[ G.R. No.

 191310, April 11, 2018 ]

PRINCESS TALENT CENTER PRODUCTION, INC., AND/OR LUCHI SINGH MOLDES, PETITIONERS, VS. DESIREE T. MASAGCA,
RESPONDENT.

DECISION

LEONARDO-DE CASTRO,** J.:

Before the Court is a Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court filed by petitioners Princess Talent Center
Production, Inc. (PTCPI) and Luchi Singh Moldes (Moldes) assailing: (1) the Decision[1] dated November 27, 2009 of the Court of Appeals in CA-G.R.
SP No. 110277, which annulled and set aside the Resolutions dated November 11, 2008[2] and January 30, 2009[3] of the National Labor Relations
Commission (NLRC) in NLRC NCR CA No. 049990-06, and ordered petitioners and their foreign principal, Saem Entertainment Company, Ltd.
(SAENCO), to jointly and severally pay respondent Desiree T. Masagca her unpaid salaries for one year, plus attorney's fees; and (2) the
Resolution[4] dated February 16, 2010 of the appellate court in the same case, which denied the Motion for Reconsideration of petitioners and
SAENCO.
I
FACTUAL ANTECEDENTS

Sometime in November 2002, respondent auditioned for a singing contest at ABC-Channel 5 in Novaliches, Quezon City when a talent manager
approached her to discuss her show business potential. Enticed by thoughts of a future in the entertainment industry, respondent went to the office
of petitioner PTCPI, a domestic corporation engaged in the business of training and development of actors, singers, dancers, and musicians in the
movie and entertainment industry.[5] At the office, respondent met petitioner Moldes, President of petitioner PTCPI, who persuaded respondent to
apply for a job as a singer/entertainer in South Korea.

A Model Employment Contract for Filipino Overseas Performing Artists (OPAS) To Korea[6] (Employment Contract) was executed on February 3,
2003 between respondent and petitioner PTCPI as the Philippine agent of SAENCO, the Korean principal/promoter. Important provisions of the
Employment Contract are reproduced below:
1. DURATION AND PERIOD OF EFFECTIVITY OF THE CONTRACT
1.1 Duration: This contract shall be enforced for the period of six months, Extendible by another six months by mutual agreement of the
parties.
Affectivity (sic): The contract shall commence upon the Talent's departure from The Philippines (Date 6) and shall remain in force as
Stipulated in the duration, unless sooner terminated by the mutual consent of The parties or due to circumstances beyond their
control. Booking of Talent Shall be effected within three (3) days upon arrival in Korea, But only after Undergoing Mandatory Post-
Arrival Briefing at the Philippine Embassy Overseas Labor Office (POLO), Philippine Embassy in Seoul.
2. NAME OF PERFORMANCE VENUE:
Siheung Tourist Hotel Night Club
NAME OF OWNER:
Cho Kang Hyung
ADDRESS:
1622-6 (B2) Jung Wang Dons Siheung Kyung Ki Do
xxxx
(Subject to ocular inspection, Verification, and approval by the POLO)
3. COMPENSATION: The Talent shall receive a monthly compensation of a Minimum of U.S.D. $600, (Ranging from U.S.D. 500 to 800 based
on The categories of the ARB, skill and experience of the Talent, and of the Performance Venue) which shall accrue beginning on the day of
the Talent's Departure from the Philippines and shall be paid every end of the month directly To The Talent. By the Employer, minus the
authorized fees of the Philippine Agent and The Talent Manager, which shall be deducted at a maximum monthly Rates of U.S. $100 and
U.S. $100 for the Philippine Agent and Talent Manager, respectively. Deductions of $200/month is good for three (3) months only.
4. HOURS OF WORK, RESTDAY AND OVERTIME PAY
4.1 Hours of work: Maximum of Five (5) hours per day.
4.2 Rest day: One (1) day a week
4.3 Overtime Rate: (100) percent of regular rate or the prevailing rate in Korea as Required by the Labor Standard Act.
xxxx
9. The services of the Talents as provided in this contract shall only be rendered at the Performance Venue identified in this contract. Should
there be a need and mutual agreement of the parties for the talent to transfer to another Performance Venue There shall be executed a new
contract. The new contract shall be subject of Verification requirement of the Philippine Overseas Labor Office, Philippine Embassy.
xxxx
12. TERMINATION:
A. Termination by the Employer: The Employer may terminate the Contract of Employment for any of the following just causes: serious
misconduct or Willful disobedience of the lawful orders of the employer, gross or habitual Neglect of duties, violation of the laws of the
host country. When the Termination of the contract is due to the foregoing causes, the Talent shall Bear the cost of repatriation. In
addition, the Talent may be liable to Blacklisting and/or other penalties in case of serious offense.
B. Termination by the Talent: The Talent may terminate the contract for any of The following just causes: when the Talent is maltreated
by the Employer or Any of his/her associates, or when the employer commits of (sic) the following — Non-payment of Talent salary,
underpayment of salary in violation of this Contract, non-booking of the Talent, physical molestation, assault or Subjecting the talent to
inhumane treatment or shame. Inhumane treatment Shall be understood to include forcing or letting the talent to be used in Indecent
performance or in prostitution. In any of the foregoing case, the Employer shall pay the cost of repatriation and be liable to
garnishment of The escrow deposit, aside from other penalties that may arise from a case.
C. Termination due to illness: Any of the parties may terminate the contract on The ground of illness, disease, or injury suffered by the
Talent, where the Latter's continuing employment is prohibited by law or prejudicial to his/her Health, or to the health of the employer,
or to others. The cost of the Repatriation of the Talent for any of the foregoing reasons shall be for the Account of the employer.[7]
Respondent left for South Korea on September 6, 2003 and worked there as a singer for nine months, until her repatriation to the Philippines
sometime in June 2004. Believing that the termination of her contract was unlawful and premature, respondent filed a complaint against petitioners
and SAENCO with the NLRC.

Respondent's Allegations

Respondent alleged that she was made to sign two Employment Contracts but she was not given the chance to read any of them despite her
requests. Respondent had to rely on petitioner Moldes's representations that: (a) her visa was valid for one year with an option to renew; (b)
SAENCO would be her employer; (c) she would be singing in a group with four other Filipinas[8] at Seaman's Seven Pub at 82-8 Okkyo-Dong, Jung-
Gu, Ulsan, South Korea; (d) her Employment Contract had a minimum term of one year, which was extendible for two years; and (e) she would be
paid a monthly salary of US$400.00, less US$100.00 as monthly commission of petitioners. Petitioner Moldes also made respondent sign several
spurious loan documents by threatening the latter that she would not be deployed if she refused to do so.

For nine months, respondent worked at Seaman's Seven Pub in Ulsan, South Korea - not at Siheung Tourist Hotel Night Club in Siheung, South
Korea as stated in her Employment Contract - without receiving any salary from SAENCO. Respondent subsisted on the 20% commission that she
received for every lady's drink the customers purchased for her. Worse, respondent had to remit half of her commission to petitioner Moldes for the
payment of the fictitious loan. When respondent failed to remit any amount to petitioner Moldes in May 2004, petitioner Moldes demanded that
respondent pay the balance of the loan supposedly amounting to US$10,600.00. To dispute the loan, respondent engaged the legal services of
Fortun, Narvasa & Salazar, a Philippine law firm, which managed to obtain copies of respondent's Employment Contract and Overseas Filipino
Worker Information Sheet. It was only then when respondent discovered that her employment was just for six months and that her monthly
compensation was US$600.00, not just US$400.00.

Respondent further narrated that on June 13, 2004, petitioner Moldes went to South Korea and paid the salaries of all the performers, except
respondent. Petitioner Moldes personally handed respondent a copy of the loan document for US$10,600.00 and demanded that respondent
terminate the services of her legal counsel in the Philippines. When respondent refused to do as petitioner Moldes directed, petitioner Moldes
withheld respondent's salary. On June 24, 2004, Park Sun Na (Park), President of SAENCO,[9] went to the club where respondent worked, dragged
respondent outside, and brought respondent to his office in Seoul where he tried to intimidate respondent into apologizing to petitioner Moldes and
dismissing her counsel in the Philippines. However, respondent did not relent. Subsequently, Park turned respondent over to the South Korean
immigration authorities for deportation on the ground of overstaying in South Korea with an expired visa. It was only at that moment when
respondent found out that petitioner Moldes did not renew her visa.

Respondent filed the complaint against petitioners and SAENCO praying that a decision be rendered declaring them guilty of illegal dismissal and
ordering them to pay her unpaid salaries for one year, inclusive of her salaries for the unexpired portion of her Employment Contract, backwages,
moral and exemplary damages, and attorney's fees.

Petitioners' Allegations

Petitioners countered that respondent signed only one Employment Contract, and that respondent read its contents before affixing her signature on
the same. Respondent understood that her Employment Contract was only for six months since she underwent the mandatory post-arrival briefing
before the Philippine Labor Office in South Korea, during which, the details of her Employment Contract were explained to her. Respondent
eventually completed the full term of her Employment Contract, which negated her claim that she was illegally dismissed.

Petitioners additionally contended that respondent, on her own, extended her Employment Contract with SAENCO, and so petitioners' liability should
not extend beyond the original six-month term of the Employment Contract because the extension was made without their participation or consent.

Petitioners likewise averred that they received complaints that respondent violated the club policies of SAENCO against wearing skimpy and
revealing dresses, dancing in a provocative and immoral manner, and going out with customers after working hours. Respondent was repatriated to
the Philippines on account of her illegal or immoral activities. Petitioners also insisted that respondent's salaries were paid in full as evidenced by the
nine cash vouchers[10] dated October 5, 2003 to June 5, 2004. Petitioners submitted the Magkasamang Sinumpaang Salaysay[11] of respondent's co-
workers, Sheila Marie V. Tiatco (Tiatco) and Carolina Flores (Flores), who confirmed that respondent violated the club policies of SAENCO and that
respondent received her salaries.

Petitioners submitted as well the Sworn Statement[12] dated November 9, 2004 of Baltazar D. Fuentes (Baltazar), respondent's husband, to prove
that respondent obtained a loan from petitioner PTCPI. Baltazar affirmed that petitioner PTCPI lent them some money which respondent used for her
job application, training, and processing of documents so that she could work abroad. A portion of the loan proceeds was also used to pay for their
land in Lagrimas Village, Tiaong, Quezon, and respondent's other personal expenses.

Petitioner Moldes, for her part, disavowed personal liability, stating that she merely acted in her capacity as a corporate officer of petitioner PTCPI.

Petitioners thus prayed that the complaint against them be dismissed and that respondent be ordered to pay them moral and exemplary damages for
their besmirched reputation, and attorney's fees for they were compelled to litigate and defend their interests against respondent's baseless suit.

Labor Arbiter's Ruling

On May 4, 2006, Labor Arbiter Antonio R. Macam rendered a Decision[13] dismissing respondent's complaint, based on the following findings:
The facts of the case and the documentary evidence submitted by both parties would show that herein [respondent] was not illegally dismissed. This
Office has noted that the POEA approved contract declares that the duration of [respondent's] employment was for six (6) months only. The fact that
the duration of [respondent's] employment was for six (6) months only is substantiated by the documentary evidence submitted by both parties.
Attached is [respondent's] Position Paper as Annex "D" is a Model Employment Contract for Filipino Overseas Performing Artist to Korea signed by
the parties and approved by the POEA. Also attached to the Position Paper of the [petitioners] as Annex "1" is a copy of the Employment Contract
signed by the parties and approved by POEA. We readily noted that the common evidence submitted by the parties would prove that [respondent's]
employment was for six (6) months only. The deploying agency, Princess. Talent Center Production, Inc. processed the [respondent] for a six-month
contract only and there is no showing that the deploying agency participated in the extension of the contract made by the [respondent] herself. There
is likewise no evidence on record which would show that the POEA approved such an extension. As matters now stand, this Office has no choice but
to honor the six months duration of the contract as approved by the POEA. The conclusion therefore is that the [respondent] was not illegally
dismissed since she was able to finish the duration of the contract as approved by the POEA.
Following the above ruling, the [respondent] is likewise not entitled to the payment of the unexpired portion of the employment contract. This Office
could not exactly determine what [respondent] means when she refers to the unexpired portion of the contract. The [respondent] comes to this Office
alleging that [petitioners] are still liable to the new extended contract of the employment without however presenting the said contract binding the
recruitment agency as jointly and solidarily liable with the principal employer. Such a document is vital as this will prove the participation of the
[petitioners] and the latter's assumption of responsibility. Without the presentation of the "extended" contract, the "unexpired portion" could not be
determined. [Respondent's] claim therefore for the payment of the unexpired portion of the contract must also fail.

The crux of the present controversy is whether or not [respondent] was paid her salaries during the period she worked in Korea. [Respondent] claims
that she was not paid her salaries during the time she worked in Korea. [Petitioners] presented an Affidavit executed by Filipino workers who worked
with [respondent] in Korea declaring that they, together with the [respondent], were paid by the foreign employer all their salaries and wages.
[Petitioners and SAENCO] likewise presented vouchers showing that the [respondent] received full payment of her salaries during the time that she
worked in Korea. In the pleading submitted by the [respondent], she never denied the fact that she indeed signed the vouchers showing full payment
of her salaries.

It becomes clear therefore that [respondent] miserably failed to destroy the evidentiary value of the vouchers presented by the [petitioners]. This
Office will not dare to declare as void or incompetent the vouchers signed by the [respondent] in the absence of any evidence showing any
irregularity so much so that this Office did not fail to notice the inconsistencies in the [respondent's] position paper.

[Respondent's] claim for the payment of overtime pay likewise lacks merit. There was no showing that [respondent] actually rendered overtime work.
Mere allegation is not sufficient to establish [respondent's] entitlement to overtime pay. It is [respondent's] obligation to prove that she actually
rendered overtime work to entitle her for the payment of overtime pay.[14]
In the end, the Labor Arbiter dismissed for lack of merit respondent's complaint, as well as all other claims of the parties.[15]

Ruling of the NLRC

Respondent appealed the Labor Arbiter's Decision before the NLRC.[16] In a Decision[17] dated May 22, 2008, the NLRC ruled in respondent's favor,
reasoning that:
There is sufficient evidence to establish the fact that [respondent] was not paid her regular salaries. A scrutiny of the vouchers presented shows that
it bears the peso sign when in fact the salaries of [respondent] were to be received in Korea. Furthermore, it appears that the vouchers were signed
in one instance due to similarities as to how they were
written.

Despite the fact that We find the vouchers questionable, they prove that [respondent] was allowed to work beyond the effectivity of her visa.
[Petitioners], wanting to prove that they paid [respondent's] salary, presented vouchers for the period starting October 2003 up to June 2004. It
covers nine (9) months which implies that, despite having a visa good for six months, they consented to [respondent] working up to nine months.
Otherwise, if they were against [respondent's] overstaying in Korea, they could have asked for her deportation earlier. Also, if [respondent] was
misbehaving and went against their policy, they could have taken disciplinary action against her earlier.

The "Magkasamang Sinumpaang Salaysay" of Ms. Tiatco and Ms. Flores, which was presented by [petitioners] to prove the alleged immoral acts of
[respondent] and that they received their salaries on time, is self-serving and deserves scant weight as the affiants are beholden to [petitioners and
SAENCO] from whom they depended their employment.

We find as more credible [respondent's] allegations that she was made to believe that her contract was for one year and that her overstaying in
Korea was with the consent of [petitioners and SAENCO], and that when she refused to surrender the 50% of her commission, that was the only time
they questioned her stay and alleged that she committed immoral and illegal acts.

Further, the zealousness of [respondent] in filing a case against [petitioners and SAENCO] in different government agencies for different causes of
action manifests the intensity of her desire to seek justice for the sufferings she experienced.

There is sufficient evidence to establish that [petitioners and SAENCO] misrepresented to [respondent] the details of her employment and that she
was not paid her salaries. Hence, she is entitled to be paid her salaries for one year at the rate of $600 per month as this was what [petitioners and
SAENCO] represented to her.

For lack of proof, however, [respondent] is not entitled to her claim for overtime pay.[18]
Based on the foregoing, the NLRC ruled:
WHEREFORE, premises considered, the Decision of Labor Arbiter Antonio R. Macam dated 4 May 2006 is hereby REVERSED and SET ASIDE and
a NEW ONE entered ordering [petitioners and SAENCO] to jointly and severally pay [respondent] her salaries for one year at a rate of $600 per
month, or a total of US$7,200. The claim for overtime pay is DENIED for lack of sufficient basis.[19]
Acting on the Motion for Reconsideration[20] of petitioners, however, the NLRC issued a Resolution[21] on November 11, 2008, reversing its previous
Decision. According to the NLRC, respondent's appeal was dismissible for several fatal procedural defects, to wit:
Perusal of the records show that [respondent's] new counsel filed on May 31, 2006 a Motion for Extension of Time to File a Motion for
Reconsideration due to lack of material time in preparing a Motion for Reconsideration. However, [respondent's] counsel filed a Memorandum of
Appeal through registered mail on June 1, 2006 x x x and paid the appeal fee on July 17, 2006 x x x.

Rule VI, Section 4 of the 2005 Revised Rules and Procedures of the National Labor Relations Commission provides that:
Section 4, requisites for Perfection of Appeal. - a) The appeal shall be: 1) filed within the reglementary period provided in Section 1 of this Rule; 2)
verified by the appellant himself in accordance with Section 4, Rule 7 of the Rules of Court, as amended; 3) in the form of a memorandum of appeal
which shall state the grounds relied upon and the arguments in support thereof, the relief prayed for, and with a statement of the date the appellant
received the appealed decision, resolution or order; 4) in three (3) legibly typewritten or printed copies; and 5) accompanied by i) proof of payment of
the required appeal fee, ii) posting of a cash or surety bond as provided in Section 6 of this Rule; iii) a certificate of non-forum shopping; and iv) proof
of service upon the other parties.
The above-quoted Rules explicitly provides for the requisites for perfecting an appeal, which [respondent] miserably failed to comply. [Respondent's]
Memorandum of Appeal contains no averments as to the date [respondent] or her counsel received the Decision of the Labor Arbiter. The appeal is
unverified. No certificate of non-forum shopping was attached to the appeal. The appeal fee was paid only on July 17, 2006, or after more than forty-
six (46) days from the filing of the Memorandum of Appeal on June 1, 2006. Lacking these mandatory requirements, [respondent's] appeal is fatally
defective, and no appeal was perfected within the reglementary period. Consequently, the Decision of the Labor Arbiter had become final and
executory. The belated filing of the verification and certification on non-forum shopping will not cure its defect and it only proves that indeed
[respondent's] appeal was not perfected at all.[22]
Nonetheless, the NLRC set technicalities aside and still proceeded to resolve the case on the merits, ultimately finding that respondent failed to
present evidence to prove she had been illegally dismissed:
We cannot subscribe to [respondent's] contention that she was illegally dismissed from her employment. Records show that the Model Employment
Contract presented as evidence by both [respondent] and [petitioners and SAENCO] would prove that [respondent's] employment was for a period of
six (6) months only. Aside from [respondent's] allegation that [petitioners and SAENCO] misrepresented to her that her contract is for a period of one
(1) year, there is no other evidence on record which will corroborate and strengthen such allegation. We took note of the fact that [respondent's]
Model Employment Contract was verified by the Labor Attache of the Philippine Embassy in Korea and duly approved by the Philippines Overseas
Employment Administration (POEA). There is no showing that her contract was extended by [petitioners and SAENCO], or that an extension was
approved by the POEA. All the pieces of documentary evidence on record prove otherwise.

We agree with [petitioners and SAENCO's] argument that [respondent] was given a copy of her employment contract prior to her departure for Korea
because [respondent] was required to submit a copy thereof to the Philippine Labor Office upon her arrival in Korea. We are also convinced that
[respondent] read and understood the terms and conditions of her Model Employment Contract because of the following reasons: First, [respondent]
was informed thereof when a post arrival briefing was conducted at the Philippine Embassy Overseas Labor Office. This procedure is mandatory,
and the booking of the talent shall be effective only within three (3) days after her arrival in Korea. Second, [respondent's] passport shows that her
visa is valid only for six (6) months x x x. Third, the Model Employment Contract has been signed by [respondent] on the left hand margin on each
and every page and on the bottom of the last page thereof x x x. Fourth, [respondent's] claim that [petitioners and SAENCO] forced her in signing
two (2) employment contracts appears to be doubtful considering that she avers that she was not able to read the terms and conditions of her
employment contract. It is amazing how she was able to differentiate the contents of the two (2) contracts she allegedly signed without first reading it.

On the basis of the foregoing, [respondent's] contention that she did not know the terms and conditions of her Model Employment Contract, in
particular the provision which states that her contract and her visa is valid only for six (6) months, lacks credence. Thus, it can be concluded that she
was not dismissed at all by [petitioners and SAENCO] as her employment contract merely expired.

As to [respondent's] allegation that she was not paid her salaries during her stay in Korea, [petitioners and SAENCO] presented cash vouchers and
affidavits of co-employees showing that [respondent] was paid US$600 per month by her Korean employer. [Respondent] failed to prove that the
vouchers were faked, or her signatures appearing thereon were falsified. Hence, [respondent] is not entitled to her claim for unpaid salaries.

On her claim for the payment of her salary for the unexpired portion of her contract, We agree with the findings of the Labor Arbiter that the same
lacks merit considering that she was able to finish her six (6) month employment contract.[23]
Consequently, the NLRC granted the Motion for Reconsideration of petitioners and reinstated the Labor Arbiter's Decision dated May 4, 2006
dismissing respondent's complaint against petitioners and SAENCO.[24]

In a subsequent Resolution dated January 30, 2009, the NLRC denied respondent's Motion for Reconsideration[25] as it raised no new matters of
substance which would warrant reconsideration of the NLRC Resolution dated November 11, 2008.

Ruling of the Court of Appeals

Respondent sought remedy from the Court of Appeals by filing a Petition for Certiorari,[26] alleging that the NLRC acted with grave abuse of discretion
amounting to excess or lack of jurisdiction in reinstating the Labor Arbiter's Decision.

The Court of Appeals, in its Decision dated November 27, 2009, took a liberal approach by excusing the technical lapses of respondent's appeal
before the NLRC for the sake of substantial justice:
The requisites for perfecting an appeal before the NLRC are laid down in Rule VI of the 2005 Revised Rules of Procedure of the NLRC. Section 4 of
the said Rule requires that the appeal shall be verified by the appellant, accompanied by a certification of non-forum shopping and with proof of
payment of appeal fee. As a general rule, these requirements are mandatory and non-compliance therewith would render the appealed judgment
final and executory. Be that as it may, jurisprudence is replete that courts have adopted a relaxed and liberal interpretation of the rules on perfection
of appeal so as to give way to the more prudent policy of deciding cases on their merits and not on technicality, especially if there was substantial
compliance with the rules.

In the case of Manila Downtown YMCA vs. Remington Steel Corp., the Supreme Court held that non-compliance with [the] verification does not
necessarily render the pleading fatally defective, hence, the court may order its correction if verification is lacking, or act on the pleading although it is
not verified, if the attending circumstances are such that strict compliance with the Rules may be dispensed with in order that the ends of justice may
thereby served. Moreover, in Roadway Express, Inc. vs. CA, the High Court allowed the filing of the certification against forum shopping fourteen
(14) days before the dismissal of the petition. In Uy v. LandBank, the petition was reinstated on the ground of substantial compliance even though
the verification and certification were submitted only after the petition had already been originally dismissed.

Here, the records show that [respondent] had no intent to delay, or prolong the proceedings before the NLRC. In fact, the NLRC, in its Resolution
dated November 11, 2008 took note that [respondent] belatedly filed her verification and certification on non-forum shopping. Such belated filing
should be considered as substantial compliance with the requirements of the law for perfecting her appeal to the NLRC. Moreover, the appeal fee
was eventually paid on July 17, 2006. Clearly, [respondent] had demonstrated willingness to comply with the requirements set by the rules. Besides,
in its earlier Decision dated May 22, 2008, the First Division of the NLRC brushed aside these technicalities and gave due course to [respondent's]
appeal.

Verily, We deem it prudent to give a liberal interpretation of the technical rules on appeal, talcing into account the merits of [respondent's] case. After
all, technical rules of procedure in labor cases are not to be strictly applied in order to serve the demands of substantial justice.[27] (Citations omitted.)
The appellate court then held that respondent was dismissed from employment without just cause and without procedural due process and that
petitioners and SAENCO were solidarity liable to pay respondent her unpaid salaries for one year and attorney's fees:
Time and again, it has been ruled that the onus probandi to prove the lawfulness of the dismissal rests with the employer. In termination cases, the
burden of proof rests upon the employer to show that the dismissal was for just and valid cause. Failure to do so would necessarily mean that the
dismissal was not justified and, therefore, was illegal. In Royal Crown Internationale vs. National Labor Relations Commission and Nacionales, the
Supreme Court held that where termination cases involve a Filipino worker recruited and deployed for overseas employment, the burden to show the
validity of the dismissal naturally devolves upon both the foreign-based employer and the employment agency or recruitment entity which recruited
the worker, for the latter is not only the agent of the former, but is also solidarity liable with its foreign principal for any claims or liabilities arising from
the dismissal of the worker.

In the case at bar, [petitioners] failed to discharge the burden of proving that [respondent] was terminated from employment for a just and valid
cause.

[Petitioners'] claim that [respondent] was deported because her employment contract has already expired, was without any basis. Before being
deployed to South Korea, [petitioners] made [respondent] believe that her contract of employment was for one (1) year. [Respondent] relied on such
misrepresentation and continuously worked from September 11, 2003 up [to] June 24, 2004 or for more than nine (9) months. [Petitioners] never
questioned her stay beyond the six-month period. If [petitioners] were really against her overstaying in Korea, they could have easily asked their
principal, [SAENCO], to facilitate her immediate deportation. Even when [petitioner] Moldes sent the demand letter to [respondent] in May 2004 or
when she came to Korea to pay the salaries of the performers in June 2004, she never mentioned that [respondent's] contract has already expired.

Moreover, in the Model Employment Contract for Filipino Overseas Performing Artists (OPAS) to Korea filed with the POEA which was entered into
between [respondent] and [petitioners], it was categorically stated therein that the name of her performance venue was Si Heung Tourist Hotel Night
Club, owned by Cho Kang Hyung and with address at Jung Wang Dong Siheung Kuyng Ki Do. However, [respondent] was made to work at
Seaman's Seven Pub located at Ulsan, South Korea owned by a certain Lee Young-Gun. [Respondent's] employment contract also states that she
should be receiving a monthly salary of US$600.00 and not US$400.00 as represented to her by [petitioner] Moldes.

The Court cannot likewise adhere to [petitioners'] claim that [respondent] committed serious misconduct and willful disobedience to the lawful orders
of her employer when she allegedly danced in an immoral manner, wore skimpy costumes, and went out with clients. This Court is convinced from
the records and pictures submitted by [respondent] that her Korean employer, Lee Young-Gun, ordered them to wear provocative skirts while
dancing and singing to make the pub more attractive to their customers. Even the Seaman's Seven Pub poster itself was advertising its singers and
dancers wearing provocative dresses. [Respondent] was not even hired as a dancer, but only as a singer as shown by her Overseas Filipino Worker
Information. Besides, if [respondent] was misbehaving offensively as early as September 2003, her employer could have likewise terminated her
employment at the earliest opportunity to protect its interest. Instead, [respondent] was allowed to work even beyond the period of her contract.
Thus, [petitioners'] defenses appear to be more of an afterthought which could not be given any weight.

Furthermore, [respondent] was not afforded her right to procedural due process of notice and hearing before she was terminated. In the same case
of Royal Crown Internationale vs. National Labor Relations Commission and Nacionales, the Supreme Court ruled that all Filipino workers, whether
employed locally or overseas, enjoy the protective mantle of Philippine labor and social legislation, contract stipulations to the contrary
notwithstanding. This pronouncement is in keeping with the basic policy of the State to afford full protection to labor, promote full employment,
ensure equal work opportunities regardless of sex, race or creed, and regulate the relations between workers and employers.

In the instant case, the records show that [respondent] was publicly accosted and humiliated by one Park Sun Na, the President of [SAENCO], and
was brought to its office in Seoul, Korea, which was a six (6) hour drive from the pub. Such acts were witnessed and narrated by Wolfgang Pelzer, a
Professor in the School of English, University of Ulsan, South Korea and a frequent client of Seaman's Seven Pub, in his Affidavit dated August 16,
2004. When it became apparent that [respondent] would not be apologizing to [petitioner] Moldes nor would she dismiss her lawyer in the
Philippines, Park Sun Na turned her over to the local authorities of South Korea. [Respondent] was then deported to the Philippines allegedly for
expiration of her visa. Worst, she was not allowed to get her personal belongings which she left at the pub.

It may also be noted that [respondent] went to all the trouble of filing cases against [petitioners] in different government agencies for different causes
of action. Such zealousness of [respondent] manifests the intensity of her desire to seek justice for the wrong done to her.[28] (Citations omitted.)
The Court of Appeals determined the respective liabilities of petitioners and SAENCO for respondent's illegal dismissal to be as follows:
For being illegally dismissed, [respondent] is rightfully entitled to her unpaid salaries for one (1) year at the rate of US$600.00 per month or a total of
US$7,200.00. The US$600.00 per month was based on the rate indicated in her contract [of] employment filed with the POEA. [Petitioners] also
failed to present convincing evidence that [respondent's] salaries were actually paid. The cash vouchers presented by [petitioners] were of doubtful
character considering that they do not bear [SAENCO's] name and tax identification numbers. The vouchers also appear to have been signed in one
instance due to the similarities as to how they were written.

[Petitioner PTCPI and SAENCO] should be held solidarity liable for the payment of [respondent's] salaries. In Datuman vs. First Cosmopolitan
Manpower and Promotion Services, Inc., the Supreme Court ruled that private employment agencies are held jointly and severally liable with the
foreign-based employer for any violation of the recruitment agreement or contract of employment. This joint and solidary liability imposed by law
against recruitment agencies and foreign employers is meant to assure the aggrieved worker of immediate and sufficient payment of what is due
him. This is in line with the policy of the state to protect and alleviate the plight of the working class.

We likewise rule that [petitioner] Moldes should be held solidarity liable with [petitioner PTCPI and SAENCO] for [respondent's] unpaid salaries for
one year. Well settled is the rule that officers of the company are solidarity liable with the corporation for the termination of employees if they acted
with malice or bad faith. Here, [petitioner] Moldes was privy to [respondent's] contract of employment by taking an active part in the latter's
recruitment and deployment abroad. [Petitioner] Moldes also denied [respondent's] salary for a considerable period of time and misrepresented to
her the duration of her contract of employment.

[Respondent] should also be awarded attorney's fees equivalent to ten percent (10%) of the total monetary awards. In Asian International Manpower
Services, Inc., (AIMS) vs. Court of Appeals and Lacerna, the Supreme Court held that in actions for recovery of wages or where an employee was
forced to litigate and thus incurred expenses to protect his rights and interests, a maximum often percent (10%) of the total monetary award by way
of attorney's fees is justified under Article 111 of the Labor Code, Section 8, Rule VIII, Book III of its Implementing Rules, and paragraph 7, Article
2208 of the Civil Code.[29] (Citations omitted.)
The dispositive portion of the judgment of the appellate court reads:
WHEREFORE, premises considered, the instant petition for is hereby GRANTED. The assailed Resolutions of public respondent NLRC, First
Division, dated November 11, 2008 and January 30, 2009 are ANNULLED AND SET ASIDE. Accordingly, [petitioner PTCPI, SAENCO, and
petitioner Moldes] are ORDERED to jointly and severally pay [respondent's] unpaid salaries for one (1) year at a rate of US$600.00 per month or a
total of US$7,200.00. In addition, [petitioners and SAENCO] are ORDERED to jointly and severally pay [respondent] attorney's fees equivalent to ten
percent (10%) of the total monetary award.[30]
The Motion for Reconsideration[31] of petitioners was denied by the Court of Appeals in a Resolution dated February 16, 2010 because the issues
raised therein were already judiciously evaluated and passed upon by the appellate court in its previous Decision, and there was no compelling
reason to modify or reverse the same.
II
THE RULING OF THE COURT

Petitioners filed the instant Petition for Review on Certiorari under Rule 45 of the Rules of Court assigning a sole error on the part of the Court of
Appeals:
The Honorable Court of Appeals erred and abused its action when it ruled that private respondent is entitled to recover from the petitioners her
alleged unpaid salaries during her employment in South Korea despite of (sic) the abundance of proof that she was fully paid of (sic) her salaries
while working as [an] overseas contract worker in South Korea.[32]
Petitioners maintain that respondent initially worked at Siheung Tourist Hotel Night Club (Siheung Night Club). After completing her six-month
employment contract in Siheung Night Club, respondent decided to continue working at Ulsan Seaman's Seven Pub without the consent of
petitioners. Throughout her employment in South Korea, respondent's salaries were paid as evidenced by the cash vouchers and Entertainer Wage
Roster,[33] which were signed by respondent and attached to the "Reply"[34] dated January 11, 2010 of Park, Chief Executive Officer (CEO) of
SAENCO, duly notarized per the Certificate of Authentication[35] dated January 25, 2010 issued by Consul General Sylvia M. Marasigan of the
Philippine Embassy in Seoul, South Korea and the Notarial Certificate of Sang Rock Law and Notary Office, Inc.[36]

Petitioners contend that respondent totally failed to discharge the burden of proving nonpayment of her salaries, yet, the Court of Appeals still
ordered petitioners to pay the same on the basis of respondent's bare allegations.

Petitioners also argue that SAENCO would not risk its status as a reputable entertainment and promotional entity by violating South Korean labor
law. Petitioners assert that in the absence of any showing that SAENCO was at anytime charged with nonpayment of its employee's salaries before
the Labor Ministry of South Korea, petitioners could not be deemed to have breached the Employment Contract with respondent. Petitioners
describe respondent's complaint as plain harassment.

Thus, petitioners pray that the Court nullify the Decision dated November 27, 2009 and Resolution dated February 16, 2010 of the Court of Appeals.

The Petition is partly meritorious.

Questions of Fact

It is apparent from a perusal of the Petition at bar that it essentially raises questions of fact. Petitioners assail the findings of the Court of Appeals on
the ground that the evidence on record does not support respondent's claims of illegal dismissal and nonpayment of salaries. In effect, petitioners
would have the Court sift through, calibrate, and re-examine the credibility and probative value of the evidence on record so as to ultimately decide
whether or not there is sufficient basis to hold petitioners liable for the payment of respondent's salaries for one year, plus attorney's fees.[37]

Normally, it is not the task of the Court to re-examine the facts and weigh the evidence on record, for basic is the rule that the Court is not a trier of
facts, and this rule applies with greater force in labor cases. Questions of fact are for the labor tribunals to resolve. It is elementary that the scope of
this Court's judicial review under Rule 45 of the Rules of Court is confined only to errors of law and does not extend to questions of fact. However,
the present case falls under one of the recognized exceptions to the rule, i.e., when the findings of the Labor Arbiter, the NLRC, and/or the Court of
Appeals are in conflict with one another. The conflicting findings of the Labor Arbiter, the NLRC, and the Court of Appeals pave the way for this Court
to review factual issues even if it is exercising its function of judicial review under Rule 45.[38]

As the Court reviews the evidence on record, it notes at the outset that petitioners are presenting new evidence herein never presented in the
previous proceedings, particularly, Park's notarized "Reply" dated January 11, 2010 and the attached Entertainer Wage Roster. The Court is
precluded from considering and giving weight to said evidence which are presented for the first time on appeal. Fairness and due process dictate
that evidence and issues not presented below cannot be taken up for the first time on appeal.[39]

It is true that the Court had declared in previous cases that strict adherence to the technical rules of procedure is not required in labor cases.
However, the Court also highlights that in such cases, it had allowed the submission of evidence for the first time on appeal with the NLRC in the
interest of substantial justice, and had further required for the liberal application of procedural rules that the party should adequately explain the delay
in the submission of evidence and should sufficiently prove the allegations sought to be proven.[40] In the instant case, petitioners did not submit the
evidence during the administrative proceedings before the Labor Arbiter and NLRC or even during the proceedings before the Court of Appeals, and
petitioners did not offer any explanation at all as to why they are submitting the evidence only on appeal before this Court. Hence, the Court is not
inclined to relax the rules in the present case in petitioners' favor.

Moreover, in its review of the evidence on record, the Court bears in mind the settled rule that in administrative and quasi-judicial proceedings,
substantial evidence is considered sufficient. Substantial evidence is more than a mere scintilla of evidence or relevant evidence as a reasonable
mind might accept as adequate to support a conclusion, even if other minds, equally reasonable, might conceivably opine otherwise.[41] It is also a
basic rule in evidence that each party must prove his/her affirmative allegations. Since the burden of evidence lies with the party who asserts an
affirmative allegation, the plaintiff or complainant has to prove his/her affirmative allegation in the complaint and the defendant or the respondent has
to prove the affirmative allegations in his/her affirmative defenses and counterclaim.[42]

Petitioner's Illegal Dismissal

The Constitutional guarantee of security of tenure extends to Filipino overseas contract workers as the Court declared in Sameer Overseas
Placement Agency, Inc. v. Cabiles[43]:
Security of tenure for labor is guaranteed by our Constitution.

Employees are not stripped of their security of tenure when they move to work in a different jurisdiction. With respect to the rights of overseas Filipino
workers, we follow the principle of lex loci contractus.
Thus, in Triple Eight Integrated Services, Inc. v. NLRC, this court noted:
Petitioner likewise attempts to sidestep the medical certificate requirement by contending that since Osdana was working in Saudi Arabia, her
employment was subject to the laws of the host country. Apparently, petitioner hopes to make it appear that the labor laws of Saudi Arabia do not
require any certification by a competent public health authority in the dismissal of employees due to illness.

Again, petitioner's argument is without merit.

First, established is the rule that lex loci contractus (the law of the place where the contract is made) governs in this jurisdiction. There
is no question that the contract of employment in this case was perfected here in the Philippines. Therefore, the Labor Code, its implementing rules
and regulations, and other laws affecting labor apply in this case. Furthermore, settled is the rule that the courts of the forum will not enforce any
foreign claim obnoxious to the forum's public policy. Here in the Philippines, employment agreements are more than contractual in nature. The
Constitution itself, in Article XIII, Section 3, guarantees the special protection of workers, to wit:
The State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full employment and equality of
employment opportunities for all.

It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations, and peaceful concerted activities, including the
right to strike in accordance with law. They shall be entitled to security of tenure, humane conditions of work, and a living wage. They shall also
participate in policy and decision-making processes affecting their rights and benefits as may be provided by law.

xxxx
This public policy should be borne in mind in this case because to allow foreign employers to determine for and by themselves whether an overseas
contract worker may be dismissed on the ground of illness would encourage illegal or arbitrary pre-termination of employment contracts, x x x.
Even with respect to fundamental procedural rights, this court emphasized in PCL Shipping Philippines, Inc. v. NLRC, to wit:
Petitioners admit that they did not inform private respondent in writing of the charges against him and that they failed to conduct a formal
investigation to give him opportunity to air his side. However, petitioners contend that the twin requirements of notice and hearing applies strictly only
when the employment is within the Philippines and that these need not be strictly observed in cases of international maritime or overseas
employment.

The Court does not agree. The provisions of the Constitution as well as the Labor Code which afford protection to labor apply to Filipino employees
whether working within the Philippines or abroad. Moreover, the principle of lex loci contractus (the law of the place where the contract is made)
governs in this jurisdiction. In the present case, it is not disputed that the Contract of Employment entered into by and between petitioners and
private respondent was executed here in the Philippines with the approval of the Philippine Overseas Employment Administration (POEA). Hence,
the Labor Code together with its implementing rules and regulations and other laws affecting labor apply in this case.  x x x.
By our laws, overseas Filipino workers (OFWs) may only be terminated for a just or authorized cause and after compliance with procedural due
process requirements. (Citations omitted.)
Since respondent's Employment Contract was executed in the Philippines on February 3, 2003, Philippine Constitution and labor laws governed
respondent's employment with petitioners and SAENCO. An employee's right to security of tenure, protected by the Constitution and statutes, means
that no employee shall be dismissed unless there are just or authorized causes and only after compliance with procedural and substantive due
process. A lawful dismissal by an employer must meet both substantive and procedural requirements; in fine, the dismissal must be for a just or
authorized cause and must comply with the rudimentary due process of notice and hearing.[44]

It is undisputed that when respondent was dismissed from employment and repatriated to the Philippines in June 2004, her original six-month
Employment Contract with SAENCO had already expired.

Per the plain language of respondent's Employment Contract with SAENCO, her employment would be enforced for the period of six months
commencing on the date respondent departed from the Philippines, and extendible by another six months by mutual agreement of the parties. Since
respondent left for South Korea on September 6, 2003, the original six-month period of her Employment Contract ended on March 5, 2004.

Although respondent's employment with SAENCO was good for six months only (i.e., September 6, 2003 to March 5, 2004) as stated in the
Employment Contract, the Court is convinced that it was extended under the same terms and conditions for another six months (i.e., March 6, 2004
to September 5, 2004). Respondent and petitioners submitted evidence establishing that respondent continued to work for SAENCO in Ulsan, South
Korea even after the original six-month period under respondent's Employment Contract expired on March 5, 2004. Ideally, the extension of
respondent's employment should have also been reduced into writing and submitted/reported to the appropriate Philippine labor authorities.
Nonetheless, even in the absence of a written contract evidencing the six-month extension of respondent's employment, the same is practically
admitted by petitioners, subject only to the defense that there is no proof of their knowledge of or participation in said extension and so they cannot
be held liable for the events that transpired between respondent and SAENCO during the extension period. Petitioners presented nine vouchers to
prove that respondent received her salaries from SAENCO for nine months. Petitioners also did not deny that petitioner Moldes, President of
petitioner PTCPI, went to confront respondent about the latter's outstanding loan at the Seaman's Seven Club in Ulsan, South Korea in June 2004,
thus, revealing that petitioners were aware that respondent was still working for SAENCO up to that time.

Hence, respondent had been working for SAENCO in Ulsan, South Korea, pursuant to her Employment Contract, extended for another six-month
period or until September 5, 2004, when she was dismissed and repatriated to the Philippines by SAENCO in June 2004. With this finding, it is
unnecessary for the Court to still consider and address respondent's allegations that she had been misled into believing that her Employment
Contract and visa was good for one year.

Respondent decries that she was illegally dismissed, while petitioners assert that respondent was validly dismissed because of her expired work visa
and her provocative and immoral conduct in violation of the club policies.

The Court finds that respondent was illegally dismissed.

Dismissal from employment has two facets: first, the legality of the act of dismissal, which constitutes substantive due process; and, second, the
legality of the manner of dismissal, which constitutes procedural due process. The burden of proof rests upon the employer to show that the
disciplinary action was made for lawful cause or that the termination of employment was valid. Unsubstantiated suspicions, accusations, and
conclusions of the employer do not provide legal justification for dismissing the employee. When in doubt, the case should be resolved in favor of
labor pursuant to the social justice policy of our labor laws and the 1987 Constitution.[45]

As previously discussed herein, SAENCO extended respondent's Employment Contract for another six months even after the latter's work visa
already expired. Even though it is true that respondent could not legitimately continue to work in South Korea without a work visa, petitioners cannot
invoke said reason alone to justify the premature termination of respondent's extended employment. Neither petitioners nor SAENCO can feign
ignorance of the expiration of respondent's work visa at the same time as her original six-month employment period as they were the ones who
facilitated and processed the requirements for respondent's employment in South Korea. Petitioners and SAENCO should also have been
responsible for securing respondent's work visa for the extended period of her employment. Petitioners and SAENCO should not be allowed to
escape liability for a wrong they themselves participated in or were responsible for.

Petitioners additionally charge respondent with serious misconduct and willful disobedience, contending that respondent violated club policies by
engaging in illegal activities such as wearing skimpy and revealing dresses, dancing in an immoral or provocative manner, and going out with
customers after working hours. As evidence of respondent's purported club policy violations, petitioners submitted the joint affidavit of Tiatco and
Flores, respondent's co-workers at the club.

The Court, however, is not swayed. Aside from their bare allegations, petitioners failed to present concrete proof of the club policies allegedly
violated by respondent. The club policies were not written down. There is no allegation, much less, evidence, that respondent was at least verbally
apprised of the said club policies during her employment.

To refute petitioners' assertions against her, respondent submitted a poster promoting the club and pictures[46] of respondent with her co-workers at
the said club. Based on said poster and pictures, respondent did not appear to be wearing dresses that were skimpier or more revealing than those
of the other women working at the club. Respondent also presented the Affidavit[47] dated August 16, 2004 of Wolfgang Pelzer (Pelzer), a Canadian
citizen who was a regular patron of the club. According to Pelzer, respondent was appropriately dressed for the songs she sang, and while
respondent was employed as a singer, she was also pressured into dancing onstage and she appeared hesitant and uncomfortable as she danced.
As between the allegations of Pelzer, on one hand, and those of Tiatco and Flores, on the other hand, as regards respondent's behavior at the club,
the Court accords more weight to the former as Pelzer can be deemed a disinterested witness who had no apparent gain in executing his Affidavit,
as opposed to Tiatco and Flores who were still employed by SAENCO when they executed their joint affidavit.

Lastly, as the Court of Appeals pertinently observed, if respondent was truly misbehaving as early as September 2003 as petitioners alleged,
SAENCO would have terminated her employment at the earliest opportunity to protect its interest. Instead, SAENCO even extended respondent's
employment beyond the original six-month period. The Court likewise points out that there is absolutely no showing that SAENCO, at any time during
the course of respondent's employment, gave respondent a reminder and/or warning that she was violating club policies.

This leads to another finding of the Court in this case, that petitioners also failed to afford respondent procedural due process.

Article 277(b) of the Labor Code, as amended, mandates that the employer shall furnish the worker whose employment is sought to be terminated a
written notice stating the causes for termination and shall afford the latter ample opportunity to be heard and to defend himself/herself with the
assistance of his/her representative, if he/she so desires. Per said provision, the employer is actually required to give the employee two notices: the
first is the notice which apprises the employee of the particular acts or omissions for which his/her dismissal is being sought along with the
opportunity for the employee to air his/her side, while the second is the subsequent notice of the employer's decision to dismiss him/her.[48]

Again, the Court stresses that the burden of proving compliance with the requirements of notice and hearing prior to respondent's dismissal from
employment falls on petitioners and SAENCO, but there had been no attempt at all by petitioners and/or SAENCO to submit such proof. Neither
petitioners nor SAENCO described the circumstances how respondent was informed of the causes for her dismissal from employment and/or the
fact of her dismissal.

In contrast, respondent was able to recount in detail the events which led to her dismissal from employment and subsequent repatriation to the
Philippines, corroborated in part by Pelzer. It appears that on June 13, 2004, petitioner Moldes personally went to see respondent in Ulsan, South
Korea to demand that respondent pay the loan and dismiss the counsel respondent hired in the Philippines to contest the same; respondent,
however, refused. On June 24, 2004, Park confronted respondent while she was working at the club, forcibly took her away from the club in Ulsan,
and brought her to his office in Seoul. Park tried to intimidate respondent into agreeing to Moldes's demands. When his efforts failed, Park
surrendered respondent to the South Korean authorities and she was deported back to the Philippines on account of her expired work visa.

To reiterate, respondent could only be dismissed for just and authorized cause, and after affording her notice and hearing prior to her termination.
SAENCO had no valid cause to terminate respondent's employment. Neither did SAENCO serve two written notices upon respondent informing her
of her alleged club policy violations and of her dismissal from employment, nor afforded her a hearing to defend herself. The lack of valid cause,
together with the failure of SAENCO to comply with the twin-notice and hearing requirements, underscored the illegality surrounding respondent's
dismissal.[49]

The Liabilities of Petitioners and SAENCO

From its findings herein that (1) respondent's Employment Contract had been extended for another six months, ending on September 5, 2004; and
(2) respondent was illegally dismissed and repatriated to the Philippines in June 2004, the Court next proceeds to rule on the liabilities of petitioners
and SAENCO to respondent.

Respondent's monetary claims against petitioners and SAENCO is governed by Section 10 of Republic Act No. 8042, otherwise known as The
Migrant Workers and Overseas Filipinos Act of 1995, which provides:
Section 10. Money Claims. — Notwithstanding any provision of law to the contrary, the Labor Arbiters of the National Labor Relations Commission
(NLRC) shall have the original and exclusive jurisdiction to hear and decide, within ninety (90) calendar days after the filing of the complaint, the
claims arising out of an employer-employee relationship or by virtue of any law or contract involving Filipino workers for overseas deployment
including claims for actual, moral, exemplary and other forms of damages.

The liability of the principal/employer and the recruitment/placement agency for any and all claims under this section shall be joint and several. This
provision shall be incorporated in the contract for overseas employment and shall be a condition precedent for its approval. The performance bond to
be filed by the recruitment/placement agency, as provided by law, shall be answerable for all monetary claims or damages that may be awarded to
the workers. If the recruitment/placement agency is a juridical being, the corporate officers and directors and partners as the case may be, shall
themselves be jointly and solidarity liable with the corporation or partnership for the aforesaid claims and damages.

Such liabilities shall continue during the entire period or duration of the employment contract and shall not be affected by any substitution,
amendment or modification made locally or in a foreign country of the said contract.

Any compromise/amicable settlement or voluntary agreement on monetary claims inclusive of damages under this section shall be paid within four
(4) months from the approval of the settlement by the appropriate authority.

In case of termination of overseas employment without just, valid or authorized cause as defined by law or contract, the worker shall be entitled to
the full reimbursement of his placement fee with interest at twelve percent (12%) per annum, plus his salaries for the unexpired portion of his
employment contract or for three (3) months for every year of the unexpired term, whichever is less. (Emphases supplied.)
The Court finds that respondent had been paid her salaries for the nine months she worked in Ulsan, South Korea, so she is no longer entitled to an
award of the same.

It is a settled rule of evidence that the one who pleads payment has the burden of proving it. Even where the plaintiff must allege nonpayment, the
general rule is that the burden rests on the defendant to prove payment, rather than on the plaintiff to prove nonpayment.[50]

In the case at bar, petitioners submitted nine cash vouchers with respondent's signature. That the nine cash vouchers did not bear the name of
SAENCO and its Tax Identification Number is insignificant as there is no legal basis for requiring such. The vouchers clearly state that these were
"salary full payment" for the months of October 5, 2003 to June 5, 2004 for US$600.00 to respondent and each of the vouchers was signed received
by respondent. After carefully examining respondent's signatures on the nine cash vouchers, and even comparing them to respondent's signatures
on all the pages of her Employment Contract, the Court observes that respondent's signatures on all documents appear to be consistently the same.
The consistency and similarity of respondent's signatures on all the documents supports the genuineness of said signatures. At this point, the burden
of evidence has shifted to respondent to negate payment of her salaries.

Respondent, though, admits that the signatures on the nine cash vouchers are hers but asserts that she really had not received her salaries and was
only made to sign said vouchers all in one instance. Respondent further avers that she was made to believe that her salaries would be deposited to
her bank account, and she presents as proof the passbook of her bank account showing that no amount equivalent to her salary was ever deposited.

The Court is not persuaded.

Absent any corroborating evidence, the Court is left only with respondent's bare allegations on the matter. Pelzer's statements in his Affidavit
concerning the nonpayment of respondent's salaries are hearsay, dependent mainly on what respondent confided to him. It makes no sense to the
Court that respondent would agree to an extension of her Employment Contract for another six months if she had not been receiving her salaries for
the original six-month period. From her own actuations, respondent does not appear to be totally helpless and gullible. Respondent, in fact, was quite
zealous in protecting her rights, hiring one of the well-known law firms in the Philippines to represent her against petitioner Moldes who was
demanding payment of a loan which respondent insisted was fictitious. Respondent also stood up to and refused to given in to the demands of both
petitioner Moldes and Park even during face-to-face confrontations. The Court then cannot believe that respondent would simply sign the nine cash
vouchers even when she did not receive the corresponding salaries for the same. Respondent failed to establish that the passbook she submitted
was for her bank account for payroll payments from SAENCO; it could very well just be her personal bank account to which she had not made any
deposit. The Court, unlike the Court of Appeals, is not ready to jump to the conclusion that the vouchers were all prepared on the same occasion and
disregard their evidentiary value simply based on their physical appearance and in the total absence of any corroborating evidence.

Nonetheless, pursuant to the fifth paragraph of Section 10 of Republic Act No. 8042, respondent is entitled to an award of her salaries for the
unexpired three months of her extended Employment Contract, i.e., July to September 2004.[51] Given that respondent's monthly salary was
US$600.00, petitioners and SAENCO shall pay respondent a total of US$1,800.00 for the remaining three months of her extended Employment
Contract. The said amount, similar to backwages, is subject to legal interest of 12% per annum from respondent's illegal dismissal in June 2004 to
June 30, 2013 and 6% per annum from July 1, 2013 to the date this Decision becomes final and executory.[52] Respondent also has the right to the
reimbursement of her placement fee with interest of 12% per annum from her illegal dismissal in June 2004 to the date this Decision becomes final
and executory.[53]

Moreover, the award of attorney's fees to respondent is likewise justified. It is settled that in actions for recovery of wages or where an employee was
forced to litigate and incur expenses to protect his/her right and interest, he/she is entitled to an award of attorney's fees equivalent to 10% of the
award.[54]

Finally, all of the foregoing monetary awards in respondent's favor shall earn legal interest of 6% per annum from the time this Decision becomes
final and executory until fully satisfied.[55]

In an attempt to escape any liability to respondent, petitioners assert that only SAENCO should be answerable for respondent's illegal dismissal
because petitioners were not privy to the extension of respondent's Employment Contract beyond the original six-month period. Petitioner Moldes
additionally argues that she should not be held personally liable as a corporate officer of PTCPI without evidence that she had acted with malice or
bad faith.

Petitioners' arguments are untenable considering the explicit language of the second paragraph of Section 10 of Republic Act No. 8042, reproduced
below for easier reference:
The liability of the principal/employer and the recruitment/placement agency for any and all claims under this section shall be joint and several. This
provision shall be incorporated in the contract for overseas employment and shall be a condition precedent for its approval. The performance bond to
be filed by the recruitment/placement agency, as provided by law, shall be answerable for all money claims or damages that may be awarded to the
workers. If the recruitment/placement agency is a juridical being, the corporate officers and directors and partners as the case may be, shall
themselves be jointly and solidarity liable with the corporation or partnership for the aforesaid claims and damages.
The aforequoted provision is plain and clear, the joint and several liability of the principal/employer, recruitment/placement agency, and the corporate
officers of the latter, for the money claims and damages of an overseas Filipino worker is absolute and without qualification. It is intended to give
utmost protection to the overseas Filipino worker, who may not have the resources to pursue her money claims and damages against the foreign
principal/employer in another country. The overseas Filipino worker is given the right to seek recourse against the only link in the country to the
foreign principal/employer, i.e., the recruitment/placement agency and its corporate officers. As a result, the liability of SAENCO, as
principal/employer, and petitioner PTCPI, as recruitment/placement agency, for the monetary awards in favor of respondent, an illegally dismissed
employee, is joint and several. In turn, since petitioner PTCPI is a juridical entity, petitioner Moldes, as its corporate officer, is herself jointly and
solidarity liable with petitioner PTCPI for respondent's monetary awards, regardless of whether she acted with malice or bad faith in dealing with
respondent.

WHEREFORE, premises considered, the Petition for Review on Certiorari is PARTIALLY GRANTED. The assailed Decision dated November 27,
2009 of the Court of Appeals is AFFIRMED with MODIFICATIONS. For the illegal dismissal of respondent Desiree T. Masagca, petitioners Princess
Talent Center Production, Inc. and Luchi Singh Moldes, together with Saem Entertainment Company, Ltd., are ORDERED to jointly and severally
pay respondent the following: (a) US$1,800.00, representing respondent's salaries for the unexpired portion of her extended Employment Contract,
subject to legal interest of 12% per annum from June 2004 to June 30, 2013 and 6% per annum from July 1, 2013 to the date that this Decision
becomes final and executory; (b) reimbursement of respondent's placement fees with 12% interest per annum from June 2004 to the date that this
Decision becomes final and executory; and (c) attorney's fees equivalent to 10% of the total monetary award. The order for payment of respondent's
salaries from September 2003 to May 2004 is DELETED. All the monetary awards herein to respondent shall earn legal interest of 6% per annum
from the date that this Decision becomes final and executory until full satisfaction thereof.

SO ORDERED.

[ G.R. No. 206800, July 02, 2018 ]

STRADCOM CORPORATION AND JOSE A. CHUA, PETITIONERS, V. JOYCE ANNABELLE L. ORPILLA, RESPONDENT.

DECISION

TIJAM, J.:

Before Us is a Petition for Review on Certiorari  under Rule 45 of the Rules of Court filed by petitioners Stradcom Corporation (Stradcom) and Jose
A. Chua (Chua) (collectively referred to as petitioners), assailing the Decision[1] dated September 28, 2012 and Resolution[2] dated April 17, 2013 of
the Court of Appeals (CA) in CA-G.R. SP No. 91150, which reversed the National Labor Relations Commission (NLRC) Decision[3] dated July 30,
2004 and Resolution[4] dated April 20, 2005 and reinstated the Labor Arbiter's (LA's) ruling[5] dated September 30, 2003.
The Procedural and Factual Antecedents
The Version of Respondent Joyce Anabelle L. Orpilla
On November 15, 2001, Joyce Anabelle L. Orpilla (respondent) was employed by Stradcom as Human Resources Administration Department
(HRAD) Head, under a probationary status for six months, with a monthly salary of P60,000.[6] Her duties included administrative and training
matters.[7]
On January 2, 2003, Chua, the President and Chief Executive Officer (CEO) of Stradcom, issued a Memorandum addressed to the Chief Operating
Officer (COO), Ramon G. Reyes (Reyes), and Chief Financial Officer (CPO), Raul C. Pagdanganan (Pagdanganan), announcing the reorganization
of the HRAD.[8] The pertinent portions of the memorandum provides:
1. The Training Section of the Department shall be spinned off and will form part of the Business Operations. x x x (The Training Section shall be
called Human Resources Training and Development).
xxxx
3. Under the said reorganization, new sections shall be reporting to the following:
 The Human Resources Training and Development shall be reporting to Mr. Ramon G. Reyes, COO.
 The Personnel and Administration shall be reporting to Mr. Raul Pagdangan, CFO.
 Ms. Joyce Anabelle L. Orpilla and the Training Section will be reporting directly to the COO. x x x[9]
After the turn-over of the documents and equipment of HRAD, respondent inquired from Chua as to her status in the light of the said reorganization.
Chua, on the other hand, replied that the management has lost its trust and confidence in her and it would be better if she resigned. Respondent
protested the resignation and insisted that if there were charges against her, she was open for formal investigation. Chua, however, was not able to
come up with any charges.[10]
On January 9, 2003, a meeting was held wherein, Atty. Eric Gene Pilapil (Atty. Pilapil), the Chief Legal Officer (CLO) offered a settlement to
respondent in exchange for her employment, otherwise, respondent would have to undergo the burden of litigation in pursuing the retention of her
employment.[11] Atty. Pilapil set another meeting on January 13, 2003 with respondent, and told her to take a leave in the meantime to think about the
settlement offer. Atty. Pilapil also assured respondent that she would continue to receive her salary.[12]
On January 13, 2003, per advice of Atty. Pilapil, respondent reported for work but the guards refused her entry and advised her to take a leave of
absence.[13]
Respondent claimed that she was informed by Accounting Manager, Mr. Arnold C. Ocampo, that her January 15, 2003 salary was already deposited
in her bank account which included the proportionate 13th month pay for the year 2003 and was her last and final pay. After such,
respondent no longer received any kind of payment from petitioners.[14] Respondent claimed that she was constructively dismissed on January 2,
2003 and turned into an actual dismissal on January 15, 2003, when she received her last pay.[15]
On June 29, 2003, respondent filed a complaint for constructive dismissal with monetary claims of backwages, attorney's fees and damages.[16]
The Version of Petitioners Stradcom Corporation and Jose A. Chua
On November 15, 2001, respondent was employed by Stradcom as HRAD Head, a managerial position with a monthly salary of P60,000.[17] As
HRAD Head, respondent's duties and responsibilities included administration and personnel, and training matters.[18]
Sometime in December 2002, Pagdanganan gave instructions to respondent to commence preparations for Stradcom's 2002 Christmas party. Chua
also gave instructions to respondent to include the Land Registration Systems, Inc. (Lares) officers and employees, an affiliate of Stradcom in the
Christmas party, to foster camaraderie and working relations between the two companies.[19]
Contrary to Chua's instruction, respondent then called a staff lunch meeting for Stradcom's 2002 Christmas party, wherein respondent conveyed her
intention of easing out Lares' employees from the party.[20]
Later, it had come to Stradcom's attention that respondent was not comfortable with the idea to include Lares in the Christmas party, as respondent
appeared evasive on the queries about the event made by Ms. May Marcelo, the Head Personnel and Administration of Lares.[21] This matter was
brought to the attention of Chua, who decided to strip respondent of any responsibility in organizing the Christmas party and transferred the same to
another committee. As part of the turnover, respondent furnished the committee with a copy of the initial budget which included the catering services
from G&W Catering Services at P250 per head.[22]
On December 16, 2002, Ms. Rowena Q. Samson (Samson) and Mr. Saturnino S. Galgana (Galgana), members of the new Christmas party
committee went to see Mrs. Myrna G. Sese (Sese), the proprietress of the G&W Catering Services.[23] They were surprised to find out that the price
of the food was actually P200 per head and not P250 per head as represented by respondent. Suspicious about the correct pricing, Samson and
Galgana reported the matter to the Stradcom's management. Stradcom began its investigation and interviewed some employees regarding the
conduct of respondent.[24]
After the investigation, Stradcom also discovered that respondent required her staff to prepare presentation/training materials/manuals using
company resources for purposes not related to the affairs of the company, on overtime and on Sundays.[25]
Subsequently, Pagdanganan called for a conference with respondent, and discussed respondent's non-inclusion of Lares in Stradcom's Christmas
party, the overpricing of the food, and her moonlighting. Respondent made a bare deniat.[26]
On January 3, 2003, Chua notified his employees about the reorganization of the HRAD and the Business Operations Department.[27] On the same
date and as part of routine procedure, respondent turned-over the necessary documents and equipment.[28] Respondent reported to Reyes, her new
immediate superior and secured the latter's approval for her leave of absence on the dates of January 3 in the afternoon up to January 6, 2003, due
to personal reasons. Reyes approved her leave.[29]
However, before respondent's scheduled leave, she approached Chua to discuss the reorganization and her previous conference with Pagdanganan
regarding her said infractions. Chua told respondent that the management has lost its trust and confidence in her due to her willful disobedience in
excluding the employees of Lares in the Stradcom's Christmas party and for willful breach of trust in connection with the canvassing of the caterer.[30]
Respondent explained her side and asked Chua for his advice. Chua replied that considering her position is one that requires the trust and
confidence of the management, it would be difficult to force herself on the management. Thus, respondent conveyed her willingness to resign. In
view of this, Stradcom's officers agreed that any formal investigation on respondent was unnecessary in view of her willingness to resign.[31]
However, on January 7, 2003, respondent reported for work and suprisedly informed Stradcom that she would not resign. When Chua found out
about the respondent's retraction of her statement to resign, he instructed Atty. Pilapil to talk things through with respondent.[32]
On January 9, 2003, Atty. Pilapil invited respondent for dinner outside the company premises. Respondent was given another chance regarding her
said infractions. Respondent then requested for four days leave to think things through and Atty. Pilapil adhered to request and assured her that she
will receive her pay while on leave. They likewise agreed that they would meet again on January 13, 2003, outside the office to discuss respondent's
final decision.[33]
Petitioners were shocked when they found out that respondent had filed a complaint for constructive dismissal with monetary claims of backwages,
attorney's fees and damages on January 29, 2003.[34]
Petitioners contended that the dismissal of respondent was for just cause on the ground of loss of trust and confidence and the same was in
compliance with the due process requirements.[35] Petitioners further contended that the acts that caused the loss of trust and confidence of the
petitioners in the respondent were her mishandling of Stradcom's 2002 Christmas party, dishonesty in preparing the budget thereof,
misrepresentation in her application for employment, and using company personnel and resources for purposes not beneficial to the interest of
Stradcom.[36]
The Ruling of the LA
On September 30, 2003, the LA rendered a Decision, which ruled that respondent was illegally dismissed and Chua is solidarily liable with Stradcom
for the payment of the monetary awards to respondent.[37] The dispositive portion of the LA Decision, provides:
WHEREFORE, decision is hereby rendered, as follows:
1. Declaring that the complainant was illegally dismissed;
2. Declaring that the dismissal was effected in violation of the due process and notice requirements; and
3. Ordering respondents Stradcom Corporation and Jose A. Chua to pay complainant, jointly and severally, the total amount of EIGHT HUNDRED
FORTY SEVEN THOUSAND PESOS (P847,000.00) representing her separation pay, backwages, moral and exemplary damages and attorney fees.
The awards for separation pay, backwages and the corresponding 10% attorney's fees shall be subject to further computation until the decision in
this case becomes final and executory.
The other claims are denied for lack of merit.
SO ORDERED.[38]
Aggrieved, petitioners seasonably filed a memorandum of appeal before the NLRC.
The Ruling of the NLRC
On July 30, 2004, the NLRC issued its Decision. It partially granted the appeal filed by petitioners and modified the Decision of the LA. The NLRC
ruled that respondent was validly dismissed on the ground of loss and trust confidence, due to her mishandling of the 2002 budget for the Christmas
party. The NLRC awarded respondent her unpaid salary for the period of January 16 to April 16, 2003, the date when she was formally advised of
her disengagement from service. Attorney's fees were also awarded.[39] The decretal portion of the NLRC Decision thus, reads:
WHEREFORE, in view of the foregoing considerations, the appeal is hereby PARTIALLY GRANTED. The dispositive portion of the appealed
Decision is hereby MODIFIED and another one entered:
1. Declaring that Appellee, Joyce Anabelle L. Orpilla was validly dismissed and;
2. Ordering appellant corporation to pay her the following:
a) Withheld wages from January 16 to April 16, 2003   P195,000.00
(P60,000.00 x 3 plus 1/12 thereof as 13th month
pay)
b) attorney's fees   P 19,500.00
    --------
  Total Award   P214,500.00
SO ORDERED.[40]
Respondent sought to reconsider the above-mentioned Decision but it was denied by the NLRC in its Resolution[41] dated April 20, 2005, for lack of
merit.
Dismayed, respondent filed a petition for review on certiorari under Rule 65 with the CA.
The Ruling of the CA
On September 28, 2012, the CA reversed and set aside the NLRC and ruled that respondent was illegally dismissed.[42] The fallo of the CA Decision
provides:
IN VIEW OF ALL THESE, the Petition is GRANTED. The assailed Decision and Resolution of public respondent NLRC are SET ASIDE. The
Decision of the Labor Arbiter dated September 30, 2003 is REINSTATED.
SO ORDERED.[43]
Petitioners promptly filed a Motion for Reconsideration but it was denied by the CA in its Resolution dated April 17, 2013.[44]
Hence, the present petition.
The Issues
A. WHETHER OR NOT THE COURT OF APPEALS HAS COMMITTED SERIOUS AND REVERSIBLE ERRORS IN REVERSING THE DECISION
OF THE NATIONAL LABOR RELATIONS COMMISSION AND FAULTING THE SAME WITH GRAVE ABUSE OF DISCRETION BY FINDING THAT
PETITIONERS HAS ILLEGALLY DISMISSED RESPONDENT FROM HER EMPLOYMENT AS HEAD OF THE HUMAN RESOURCE
DEPARTMENT?
A.1 WHETHER OR NOT RESPONDENT HAS WILLFULLY DISOBEYED PETITIONERS' LAWFUL AND REASONABLE INSTRUCTIONS?
A.2 WHETHER OR NOT RESPONDENT HAS COMMITTED FRAUD, MISREPRESENTATION, DISHONESTY AND OTHER ACTS INIMICAL TO
THE INTEREST OF THE PETITIONERS WHILE BEING EMPLOYED BY THE PETITIONER?
A.3 WHETHER OR NOT REPONDENT HAS ENGAGED IN MOONLIGHTING ACTIVITIES AND USED COMPANY PERSONNEL AND
RESOURCES NOT IN LINE WITH THE BUSINESS OF STRADCOM.
B. WHETHER OR NOT THE COURT OF APPEALS HAS COMMITTED SERIOUS AND REVERSIBLE ERRORS IN REVERSING THE DECISION
OF THE NATIONAL LABOR RELATIONS COMMISSION AND FAULTING THE SAME WITH GRAVE ABUSE OF DISCRETION BY FINDING THAT
RESPONDENT WAS DEMOTED BY THE PETITIONERS AND THE LATTER DID NOT ACCORD THE FORMER DUE PROCESS?
B.1 WHETHER OR NOT THE REORGANIZATION OF THE HUMAN RESOURCE AND ADMINISTRATION (HRA) DEPARTMENT WAS A VALID
EXERCISE OF MANAGEMENT PREROGATIVE?
B.2 WHETHER OR NOT RESPONDENT WAS DENIED DUE PROCESS?
B.3 WHETHER OR NOT RESPONDENT VOLUNTARILY RESIGNED [FROM] HER EMPLOYMENT WITH STRADCOM.
C. WHETHER OR NOT THE RESPONDENT IS ENTITLED TO BACKWAGES, REINSTATEMENT OR SEPARATION PAY?
D. WHETHER OR NOT THE RESPONDENT IS ENTITLED MORAL AND EXEMPLARY DAMAGES?
E. WHETHER OR NOT PETITIONER CHUA MAY BE HELD JOINTLY AND SEVERALLY LIABLE WITH CO-PETITIONER STRADCOM FOR THE
PAYMENT OF WHATEVER MONETARY AWARD IN FAVOR OF RESPONDENT?[45]
The pivotal issue for Our resolution is whether or not respondent was validly dismissed from employment on the ground of loss of trust and
confidence.
The Court's Ruling
The petition is meritorious.
Generally, only errors of law are revived in petitions for review for certiorari, since this Court is not a trier of facts. As such, the findings of facts and
conclusion of the NLRC are generally accorded not only great weight and respect but even clothed with finality and deemed binding on this Court as
long as they are supported by substantial evidence.[46] However, if the factual findings of the LA and the NLRC are conflicting, as in this case, the
reviewing court may delve into the records and examine for itself the questioned findings.[47] The exception, rather than the general rule, applies in
the present case since the LA and the CA found facts supporting the conclusion that respondent was illegally dismissed, while the NLRC's factual
findings contradicted the LA's findings.
Under this situation, such conflicting factual findings are not binding on Us, and We retain the authority to pass on the evidence presented and draw
conclusions therefrom.[48]
After judicious review on the records of the case, this Court finds that the petitioners proved that respondent was dismissed for a just cause.
The dismissal of respondent was founded on just cause - loss of trust and
confidence
Among the just causes for termination is the employer's loss of trust and confidence in its employee. Article 297 (c) [formerly Article 282] of the Labor
Code provides that an employer may terminate the services of an employee for fraud or willful breach of the trust reposed in him/her.[49] Article 297,
provides:
Article 297. TERMINATION BY EMPLOYER.—An employer may terminate an employment for any of the following causes:
(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative;
(d) Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly
authorized representative; and
(e) Other causes analogous to the foregoing. (Emphasis ours)
In order for the said cause to be properly invoked, however, certain requirements must be complied with, namely: (1) the employee concerned must
be holding a position of trust and confidence; and (2) there must be an act that would justify the loss of trust and confidence.[50]
The two classes of positions of trust were enunciated in the case of Alaska Milk Corporation, et al. v. Ponce:[51]
(1) managerial employees whose primary duty consists of the management of the establishment in which they are employed or of a department or a
subdivision thereof, and to other officers or members of the managerial staff; and (2) fiduciary rank-and-file employees, such as cashiers, auditors,
property custodians, or those who, in the normal exercise of their functions, regularly handle significant amounts of money or property. These
employees, though rank-and-file, are routinely charged with the care and custody of the employer's money or property, and are, thus, classified as
occupying positions of trust and confidence.[52]
As regards a managerial employee, the mere existence of a basis for believing that such employee has breached the trust of his employer would
suffice for his dismissal. Hence, in the case of managerial employees, proof beyond reasonable doubt is not required, it being sufficient that there is
some basis for such loss of confidence, such as when the employer has reasonable ground to believe that the employee concerned is responsible
for the purported misconduct, and the nature of his participation therein renders him unworthy of the trust and confidence demanded by his position.
[53]

It is undisputed that at the time of respondent's dismissal, she was holding a managerial position, which was HRAD Head of Stradcom and directly
reported to the President, herein Chua and other high ranking officials of Stradcom. Likewise, respondent performed key and sensitive functions, as
her duties and responsibilities included the administration, personnel and training matters of the company. Respondent held a trust and critical
position which required the conscientious observance of the company rules and procedures.
The presence of the first requisite is thus certain. Anent to the second requisite, the Court finds that the petitioners meet their burden of proving that
the respondent's dismissal was for a just cause.
The acts alleged to have caused the loss of trust and confidence of the petitioners in the respondent was her mishandling of Stradcom's 2002
Christmas party, dishonesty in preparing the budget thereof, misrepresentation in her application for employment, and using company personnel and
resources for purposes not beneficial to the interest of Stradcom. The evidence on record support Stradcom's claims.
There was substantial evidence to support that respondent overpriced the food for the 2002 Christmas party. The overpricing was discovered by the
new committee which took over the preparations for the said party. It is undisputed that respondent was the one who initially negotiated with G&W
Catering Services. Respondent was also the one who prepared the budget for the approval of the President, herein Chua. G&W billed Stradcom for
food at the rate of Two Hundred Pesos (P200) per head only, contrary to the Two Hundred Fifty (P250) per head quoted by respondent, and the
rental for chairs at Twenty-Eight Pesos (P28), in the aggregate amount of Sixty-Three Thousand Eight Hundred Forty Pesos (P63,840) as evidenced
by the Affidavit of Sese, the proprietress of the G&W Catering Services. Clearly, the overpricing amounted to dishonesty.
Also, respondent's overpricing of P250 per head for the Christmas party was corroborated by Ms. Rowena Samson,[54] Chua's Secretary of the
President and CEO and Mr. Saturnino S. Galgana,[55] Stradcom's Purchasing Assistant, as evidenced by their affidavits dated March 18, 2003.
Furthermore, respondent was proven to have engaged in moonlighting activities and used company personnel and resources for purposes not in line
with the business interest of Stradcom. In fact, respondent admitted that she actually took home some of the training materials owned by the
company without the latter's prior clearance and without disclosed purpose.
Such dishonesty on the part of the respondent in carrying out her duties is prejudicial to the interest of Stradcom and constitutes just cause to
terminate her employment.
Considering the foregoing, this Court agrees with the findings of the NLRC that there was a just cause for the respondent's dismissal. We emphasize
that dismissal of a dishonest employee is to the best interest not only of the management but also of labor.[56] Stradcom, as an employer in the
exercise of self-protection, cannot be compelled to continue employing an employee who is guilty of acts inimical to its interest.
Respondent is entitled to nominal damages for violation of her right to
statutory procedural due process
We note however that even if there is a just cause to terminate respondent's employment, her right to due process was not satisfied.
On the matter of procedural due process, it is well-settled that the employer must furnish the employee with two written notices before termination of
employment can be legally effected.[57] The first apprises the employee of the particular acts or omissions for which dismissal is sought.[58] The
second informs the employee of the employer's decision to dismiss him.[59]
The case of Libcap Marketing Corp, et. al. v. Baquial[60] explains:
The law and jurisprudence, on the other hand, allow the award of nominal damages in favor of an employee in a case where a valid cause for
dismissal exists but the employer fails to observe due process in dismissing the employee. Financial assistance is granted as a measure of equity or
social justice, and is in the nature or takes the place of severance compensation.
On the other hand, nominal damages "may be awarded to a plaintiff whose right has been violated or invaded by the defendant, for the purpose of
vindicating or recognizing that right, and not for indemnifying the plaintiff for any loss suffered by him. Its award is thus not for the purpose of
indemnification for a loss but for the recognition and vindication of a right." The amount of nominal damages to be awarded the employee is
addressed to the sound discretion of the court, taking into consideration the relevant circumstances. (Citations omitted)[61]
As discussed above, the Court is given the latitude to determine the amount of nominal damages to be awarded to an employee who was validly
dismissed but whose due process rights were violated. The two causes for a valid dismissal in the Labor Code are under Article 282, due to just
causes and Article 283, based on authorized causes. These were differentiated in the case of Jaka Food Processing Corp. v. Pacot,[62] to wit:
A dismissal for just cause under Article 282 implies that the employee concerned has committed, or is guilty of, some violation against the employer,
i.e. the employee has committed some serious misconduct, is guilty of some fraud against the employer, or, as in Agabon, he has neglected his
duties. Thus, it can be said that the employee himself initiated the dismissal process.
On another breath, a dismissal for an authorized cause under Article 283 does not necessarily imply delinquency or culpability on the part of the
employee. Instead, the dismissal process is initiated by the employer's exercise of his management prerogative, i.e. when the employer opts to
install labor saving devices, when he decides to cease business operations or when, as in this case, he undertakes to implement a retrenchment
program.
xxxx
Accordingly, it is wise to hold that: (1) if the dismissal is based on a just cause under Article 282 but the employer failed to comply with the notice
requirement, the sanction to be imposed upon him should be tempered because the dismissal process was, in effect, initiated by an act imputable to
the employee; and (2) if the dismissal is based on an authorized cause under Article 283 but the employer failed to comply with the notice
requirement, the sanction should be stiffer because the dismissal process was initiated by the employer's exercise of his management prerogative.[63]
Here, the cause for termination was loss of trust and confidence, thus due to the employee or respondent's fault, but Stradcom failed to comply with
the twin-notice requirement, thus, as a measure of equity, We order Stradcom to pay respondent nominal damages in the amount of P30,000.
The solidary liability of Chua as a corporate officer is not proper and must
be recalled
It is well-settled that a corporation has its own legal personality separate and distinct from those of its stockholders, directors or officers.[64] Absence
of any evidence that a corporate officer and/or director has exceeded their authority, or their acts are tainted with malice or bad faith, they cannot be
held personally liable for their official acts. Here, there was neither any proof that Chua acted without or in excess of his authority nor was motivated
by personal ill-will towards respondent to be solidarily liable with the company. We quote with affirmation the NLRC's pronouncement, viz:
Finally, on the issue of whether or not the Labor Arbiter committed manifest error in ordering appellant Chua solidarily liable with appellant
corporation, we have to rule in the affirmative. Appellant Chua cannot be made solidarily liable with appellant corporation for any award in favor of
appellee. Appellant corporation is separate and distinct from Appellant Chua.
xxxx
Appellant Chua's acts were official acts, done in his capacity as an officer of appellant corporation on its behalf. There is no showing of any act, or
that he acted without or in excess of his authority or was motivated by personal ill-will toward appellee. Stated simply, appellant Chua was merely
doing his job. In fact, he even tried to save appelle from undue embarrassment.[65]
Respondent is not entitled to backwages separation pay, moral and
exemplary damages, as well as attorney's fees
With the sad reality that the respondent was not illegally dismissed, she is not entitled to backwages. Backwages may be granted only when there is
a finding that the dismissal is illegal.[66] Respondent's monetary claims for backwages, separation pay, moral and exemplary damages, as well as
attorney's fees must necessarily fail as a consequence of Our finding that her dismissal was for a just cause and that the petitioners acted in good
faith when they terminated her services.[67]
WHEREFORE, premises considered, the petition is GRANTED. The assailed Court of Appeals Decision dated September 28, 2012 and Resolution
dated April17, 2013, are hereby REVERSED and SET ASIDE, and the Decision of the National Labor Relations Commission dated July 30, 2004,
is REINSTATED but MODIFIED to the effect that backwages and attorney's fees are hereby DELETED, and that Stradcom Corporation is liable to
pay respondent Joyce Anabelle L. Orpilla nominal damages in the amount of P30,000.
SO ORDERED.

[ G.R. No. 229920, July 04, 2018 ]

SAMUEL MAMARIL, PETITIONER, VS. THE RED SYSTEM COMPANY, INC., DANILO PADRIGON, AGNES TUNPALAN, ALEJANDRO ALVAREZ,
JODERICK LOZANO, ENRIQUE ROMMEL MIRAFLORES, DOMINGO RIVERO, RESPONDENTS.

DECISION
REYES, JR., J:

An employee's tenurial security shall not be used as a shield to force the hand of an employer to maintain a recalcitrant employee, whose continued
employment is patently inimical to the employer's interest. Accordingly, an employee who is found to be willfully disobedient of the employer's lawful
and reasonable rules and regulations may be dismissed from service.

This treats of the Petition for Review on Certiorari[1] under Rule 45 of the Revised Rules of Court seeking the reversal of the Decision[2] dated
September 9, 2016, and Resolution[3] dated January 30, 2017, rendered by the Court of Appeals (CA) in CA-G.R. SP No. 06413-MIN, which
dismissed the complaint for illegal dismissal filed by petitioner Samuel Mamaril (Mamaril) against respondent The Red System Company, Inc. (Red
System).
The Antecedents

Red System is a company engaged in the business of transporting Coca Cola Products from Coca-Cola warehouses to its various customers.[4] Red
System owns and operates several delivery trucks.[5]

On June 1, 2011, Red System employed Mamaril as a delivery service representative. Mamaril was assigned in Davao and was tasked to transport
goods from various depots to the end users.[6] He received a daily wage of Php 301.00.[7]

Prior to his employment as a delivery service representative, Mamaril was required to undergo seminars to orient him on the rules and regulations of
Red System. During the orientation, drivers like Mamaril, were reminded to always observe the following safety rules, namely, to put a tire
choke (kalso),  engage the hand brake, and shift the transmission to first gear, before leaving the parked vehicle. These safeguards were necessary
to prevent the movement of the truck while pushed by a forklift during loading and unloading operations.[8]

Meanwhile, on November 9, 2011, Red System conducted an administrative hearing to determine Mamaril's complicity in fraudulent and anomalous
re-fueling charges on the truck he was driving. However, when asked if he had violated any other company regulations, or if he had met an accident
that caused any damage to the truck, Mamaril admitted that he had met an accident in the past.[9]

Apparently, three days after Mamaril's employment, he failed to put a tire choke, and worse, shifted the gear to neutral after parking the truck he was
driving. This caused the truck to move, which caused damage to Coca-Cola products valued at Php 14,556.00. Mamaril did not report the incident,
and even concealed the matter.[10]

Upon discovering Mamaril's mishap, Red System immediately re-assigned the former as a warehouse yard driver.[11] As a yard driver, Mamaril was
tasked to maneuver trucks to ensure their proper parking in preparation for the safe and efficient loading and unloading of products.[12]

However, days after Mamaril's transfer, he was involved in yet another accident. On November 12, 2011, Mamaril parked the truck with plate number
PIK 726, without again putting a tire choke and engaging the hand break. As a result, the parked truck moved and hit another vehicle, causing
damage amounting to Php 25,500.00. In addition, Mamaril caused an undetermined amount of damage to the vehicle hit by his truck.[13] Mamaril
again concealed the incident.

Sometime in February 2012, Red System suddenly received a Job Order amounting to Php 25,500.00, for the repair of the truck with plate number
PIK 726, from Motormall Davao Corporation.[14] Surprised and curious as to how the truck incurred such heavy damage, Red System conducted an
investigation. The investigation pointed to Mamaril as the person responsible for the damage.[15]

Consequently, on April 10, 2012, Red System sent Mamaril a Notice to Explain.[16] In the said Notice, Mamaril was likewise apprised that the charges
against him were serious and may warrant the penalty of dismissal.[17]

On May 3, 2012, Mamaril submitted his written explanation, where he admitted that he violated the safety rules, which caused damage to the truck.
[18]

Thereafter, on June 8, 2012, Red System held an administrative hearing. Mamaril admitted that his failure to engage the hand brake and put a tire
choke on the vehicle resulted to damage.[19] Additionally, Red System discovered during the investigation that Mamaril had also committed several
other infractions that were not reported to the company, such as pilferage, tardiness and other violations of the company's safety rules.[20]

Meanwhile, during the pendency of the administrative hearing against Mamaril, Red Systems' officers noticed that the former encountered several
near-accident misses and exhibited a lack of concern towards his work. Consequently, Mamaril was advised to be more focused on his duties.
However, the advice remained unheeded. Thus, to protect the safety of the company personnel and equipment, Red System placed Mamaril under
preventive suspension for a period of one month, which took effect on August 3, 2012. Nina Kathrina Sordan, Red System's Site Human Resource
Officer, and Ruselo Raga (Raga), Mamaril's supervisor, explained to Mamaril the nature and duration of his preventive suspension.[21]

Subsequently, prior to the expiration of the 30-day preventive suspension, Raga contacted Mamaril and told him to report for work on September 4,
2012. Mamaril did not comply with the directive, and belatedly returned on September 18, 2012.[22]

After the completion of the administrative investigation, Red System found Mamaril guilty of violating the Company Code of Conduct, particularly,
Article 4 or Unacceptable Conduct and Behavior, as well as Rule 5, Section 2, pertaining to "Other Offenses or Other Acts of Negligence, Inefficiency
in the Performance of Duties or in the Care, Custody/or Use of Company Property, Funds or Equipment Where the Amount of Loss or Damage to
the company amounted to more than Php 25,000.00." Accordingly, Mamaril was terminated for willful disobedience and willful breach of trust as
provided under Article 297 of the Labor Code.[23]

Aggrieved, Mamaril filed a Complaint for illegal dismissal with damages and attorney's fees. In his Position Paper,[24] he claimed that he was illegally
dismissed by Red System. He asserted that his termination from employment was too harsh as it was manifestly disproportionate to his infractions.
He sought for his reinstatement and the payment of his backwages and other benefits and privileges from the time of his illegal dismissal until his
reinstatement. He likewise prayed for moral damages, exemplary damages and attorney's fees, assailing Red System's unjust and oppressive
dismissal, which purportedly caused him mental anguish, social humiliation and a besmirched reputation.[25]
Ruling of the Labor Arbiter

In its Decision[26] on November 20, 2013, the Labor Arbiter (LA) dismissed the complaint for illegal dismissal. The LA ratiocinated that Mamaril was
validly dismissed, as he was found to have been negligent, for failing to follow Red System's safety instructions. In fact, Mamaril admitted his
complicity in such negligence. The LA held that Mamaril's propensity to violate the company's safety rules and conceal his misdeeds show that he is
unfit to remain in Red System's service.[27]

Likewise, the LA refused to award Mamaril his 13th month pay and service incentive leave (SIL) pay considering that they were never substantiated,
properly discussed and included in Mamaril's position paper.

The dispositive portion of the LA decision reads:

WHEREFORE, premises considered, judgment is hereby rendered DISMISSING the complaint for Illegal Dismissal for lack of merit.

All other claims are likewise DENIED for failure to substantiate and lack of merit.

SO ORDERED.[28]

Dissatisfied with the LA's ruling, Mamaril filed a Memorandum of Appeal[29] with the National Labor Relations Commission (NLRC).
Ruling of the NLRC

On April 24, 2014, the NLRC issued a Resolution[30] affirming the LA's decision with modification. Echoing the ruling of the LA, the NLRC held that
Mamaril was validly dismissed from employment, as he was proven to be guilty of violating Red System's Code of Conduct. Considering that his
dismissal was warranted under the circumstances, his claims for reinstatement and backwages have no leg to stand on. In the same vein, the NLRC
rejected Mamaril's claim for moral and exemplary damages due to his failure to present evidence showing that Red System acted with malice or bad
faith in effecting his dismissal. The NLRC also denied Mamaril's claim for attorney's fees for lack of legal and factual basis.[31]

In addition, the NLRC rejected Mamaril's claim that he was meted with a "double penalty," for having been suspended, and thereafter terminated
from employment. The NLRC clarified that what was initially imposed upon Mamaril was a preventive suspension, which was a disciplinary measure
resorted to by Red System, pending the investigation of the former's offenses.[32]

However, the NLRC awarded 13th month pay and SIL pay in favor of Mamaril. It noted that Red System failed to present any document proving that it
had indeed paid Mamaril his 13th month pay and SIL pay. Nevertheless, the NLRC limited the award to three (3) years prior to the filing of the
complaint, pursuant to Article 291 of the Labor Code.[33]

The dispositive portion of the NLRC decision reads:

WHEREFORE, [Mamaril's] appeal is PARTIALLY GRANTED.

Accordingly, the decision of [LA] Joseph Martin R. Castillo dated November 20, 2013 is AFFIRMED with modification. [Red System], through its
responsible officers, is directed to pay [Mamaril] his 13th month pay and [SIL] pay limited only to three (3) years from the filing of the instant complaint
pursuant to Article 291 of the Labor Code.

The rest of [Mamaril's] money claims are dismissed for lack of factual and/or legal basis.

The computation of [Mamaril's] money claims shall be done at the Regional Arbitration Branch a quo  during the pre-execution proceedings.

SO ORDERED.[34]

Mamaril filed a Petition for Certiorari  under Rule 65 of the Revised Rules of Court with the CA.
Ruling of the CA

On September 9, 2016, the CA rendered the assailed Decision[35] affirming the NLRC resolution. The CA found no reason to reverse the findings of
the LA and the NLRC holding that Mamaril was validly terminated by Red System. The CA ratiocinated that Mamaril's repeated failure to comply with
Red System's safety instructions constituted a just cause for his dismissal.[36] His acts caused loss and damage to Red System, and constituted
willful disobedience, negligence and willful breach of trust, which are just causes for termination under the Labor Code.[37]

Likewise, the CA agreed with the NLRC's finding that the suspension imposed on Mamaril was merely a preventive suspension and not a penalty.
[38]
 Hence, Red System cannot be held guilty for imposing a double penalty against Mamaril.[39]

The CA also affirmed the NLRC's award of 13th month pay and SIL pay in favor of Mamaril.[40]

The decretal portion of the assailed CA decision reads:

WHEREFORE, the petition is DENIED. The Resolutions dated April 24, 2014 and June 30, 2014 of the [NLRC], Eighth Division, are
hereby AFFIRMED.

SO ORDERED.[41]
Undeterred, Mamaril filed the instant Petition for Review on Certiorari[42] under Rule 45 of the Revised Rules of Court.
The Issues

The issues raised for the Court's resolution pertain to: (i) whether or not Mamaril was illegally dismissed by Red System, and is consequently entitled
to reinstatement and full backwages; and (ii) whether or not Red System was guilty of imposing a double penalty against Mamaril.

Mamaril tenaciously maintains that he was illegally dismissed from his employment. He claims that he was even subjected to a double penalty that
was harsh and excessive, as he was initially placed under suspension and thereafter dismissed, based on the same infraction. He avers that his
initial suspension could not have been a preventive suspension, considering that the incident subject of the administrative complaint took place in
February 2012 while the administrative hearing belatedly followed on June 8, 2012, and he was suspended only in September 2012. He even
continued to work for Red System from February to September 2012, which proves that he was not a threat to Red System's property and personnel.
[43]
 According to Mamaril, this clearly shows that the imposition of the preventive suspension was unnecessary and hence, unjustified.[44] Furthermore,
he bewails that the penalty of dismissal was too harsh and excessive for the infraction he committed. He points out that he readily admitted his
misdeed and even offered to pay the cost of the damage, which are circumstances that warrant the imposition of a lesser penalty.[45]

On the other hand, Red System counters that Mamaril's claim that his preventive suspension already constituted a penalty is unfounded and without
legal basis. Red System points out that Mamaril was given a Notice of Preventive Suspension, which clearly indicated that he was being placed on
suspension, pending the investigation of the charges against him. In fact, his supervisor and the Human Resource Department even separately met
with him to discuss the nature and duration of his preventive suspension. Red System stresses that it was imperative to place Mamaril under
preventive suspension due to the threat he posed to the former's property and personnel. Red System further avers that even assuming that the
preventive suspension was illegal, his dismissal was nonetheless valid. He was terminated after the completion of the administrative investigation,
where he was found to have committed a grave and blatant violation of the company's safety rules. Besides, Mamaril's conduct during his two-year
employment with Red System revealed a pattern of flagrant and repeated violations of safety rules, notorious tardiness and involvement in several
anomalies. These transgressions clearly justified his termination from employment.[46]
Ruling of the Court

The instant petition is bereft of merit.

It must be noted at the outset that the jurisdiction of the Court in a petition for review on certiorari under Rule 45 of the Revised Rules of Court is
limited only to reviewing errors of law, not of fact, unless the factual findings complained of are completely devoid of support from the evidence on
record, or the assailed judgment is based on a gross misapprehension of facts.[47] The Court finds that none of the mentioned circumstances are
present to warrant a review of the factual findings of the case. Furthermore, the issues raised in the case at bar, which chiefly pertain to the legality
of Mamaril's dismissal, involve a calibration and re-evaluation of the evidence presented by the parties, which is outside the province of a petition for
review under Rule 45 of the Revised Rules of Court.

At any rate, the CA did not commit any reversible error that would warrant the reversal of its assailed decision.

Mamaril was validly dismissed on

account of his willful disobedience
of the lawful orders of Red System.

Remarkably, "the law and jurisprudence guarantee to every employee security of tenure. This textual and the ensuing jurisprudential commitment to
the cause and welfare of the working class proceed from the social justice principles of the Constitution that the Court zealously implements out of its
concern for those with less in life."[48] However, this constitutional commitment to the policy of social justice does not mean that every labor dispute
shall be automatically decided in favor of labor.[49] It must also be remembered that in protecting the rights of the workers, the law does not authorize
the oppression of the employer.[50] Hence, due regard is likewise given to the right of an employer to manage its operations according to reasonable
standards and norms of fair play.[51] This means that an employer has free reign over every aspect of its business, including the dismissal of its
employees, as long as the exercise of its management prerogative is done reasonably, in good faith, and in a manner not otherwise intended to
defeat or circumvent the rights of workers.[52]

Accordingly, Article 297 of the Labor Code affirms the right of an employer to dismiss a miscreant employee on account of the latter's willful
disobedience, to wit:
Article 282. (now Article 297) Termination by employer.  An employer may terminate an employment for any of the following causes:
1. Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his
work;
2. Gross and habitual neglect by the employee of his duties;
3. Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative;
4. Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly
authorized representatives; and
5. Other causes analogous to the foregoing." (Emphasis Ours)

Significantly, jurisprudence ordains that for an employee to be validly dismissed on the ground of willful disobedience, the employer must prove by
substantial evidence that: (i) "the employee's assailed conduct must have been willful or intentional, the willfulness being characterized by a wrongful
and perverse attitude; and (ii) 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."[53]

In the case at bar, it bears noting that the lifeblood of Red System's business is the safe transport and delivery of Coca-Cola products from the
warehouse to the customers. As such, Red System imposed stringent guidelines to ensure the safe and efficient delivery of all the products.
Specifically, drivers were repeatedly reminded to place a tire choke, shift the engine to first gear, and pull the hand brake, upon parking the truck.
Compliance with these safety measures was essential to prevent the sudden movement of the truck while parked and pushed by a forklift during
loading and unloading operations. Likewise, caution was necessary to avoid damage to the new trucks. Moreover, extra-care was mandated in
hauling Coca-Cola products to avoid accidents which would result in needless delays and unnecessary expenses and ruin Red System's good will.[54]

It bears noting that Red System was not remiss in reminding its drivers of the importance of abiding by their safety regulations. To ensure a strict
observance of the rules, the company required its drivers to attend various safety seminars, in addition to a mandated pre-employment orientation. In
fact, Mamaril attended a pre-orientation seminar and five safety seminars over the course of his two-year stint with Red System.[55] Added to this, the
safety rules were also written in Red System's Code of Conduct. There can be no doubt as to the lawfulness, reasonableness and necessity of Red
System's safety instructions. Moreover, the rules pertained to the duties performed by Mamaril. Accordingly, Mamaril was duty-bound to comply with
such safety orders, as his main task consisted in driving and delivering fragile products. This notwithstanding, Mamaril still willfully and negligently
failed to abide by the safety rules.

The records show that three days after Mamaril was employed, he failed to put a tire choke, and worse, shifted the truck's gear to neutral. As a
result, the parked vehicle moved causing damage to Coca-Cola products valued at Php 14,556.00, in addition to the damage he caused to the truck.
To make matters worse, instead of reporting the incident to his supervisor, as mandated under Red System's rules, Mamaril deliberately concealed
the incident. If not for his belated admission in an administrative hearing on a different incident, Red System would not have learned about his prior
misdeed.[56]

To make matters worse, Mamaril was again found to have committed the same violation of Red System's safety rules. On November 12, 2011,
Mamaril parked the truck with plate number PIK 726, without again putting a tire choke and engaging the hand brake. Due to his failure to perform
the required safety standards, the truck moved backwards and hit another vehicle. This caused damage amounting to Php 25,500.00. Brazenly,
Mamaril again purposely concealed the incident. Red System belatedly learned of the accident only after conducting an investigation, after it was
surprised to receive Job Order from Motormall Davao Corporation for the repair of the said truck.[57]

Clearly, Mamaril's acts constituted a violation of Red System's company policy. Rule 5, Section 2(b)(3) of Red System's Code of Conduct penalizes
other acts of negligence or inefficiency in the performance of duties or in the care, custody and/or use of company property, funds and/or equipment,
where the amount of loss or damage amounts of more than Php 25,000.00. A violation of such rule warrants a penalty of dismissal.[58]

Notably, Mamaril violated Red System's safety rules twice, and caused damage amounting to over Php 40,000.00. To make matters worse, he even
deliberately and willfully concealed his transgressions. Such flagrant violation of the rules, coupled with the perversity of concealing the incidents,
patently show a wrongful and perverse mental attitude rendering Mamaril 's acts inconsistent with proper subordination. Indubitably, this shows that
Mamaril was indeed guilty of willful disobedience of Red System's lawful orders.

It must likewise be noted that the Court will not condone Mamaril's acts in exchange for his admission of his mistakes and his willingness to pay for
the damage he caused. Guided by the Court's ruling in St. Luke's Medical Center, Inc. v. Sanchez,[59] the deliberate disregard or disobedience by an
employee of the rules, shall not be countenanced, as it may encourage him or her to do even worse and will render a mockery of the rules of
discipline that employees are required to observe.[60] To allow a recalcitrant employee like Mamaril to remain in Red System's employ shall amount to
coddling an obstinate employee at the expense of the employer.

Thus, taking all the circumstances collectively, the Court is convinced that Red System had sufficient and valid reason for terminating Mamaril's
services, as his continued employment would be patently inimical to its interest. It is evident from the circumstances that Red System's decision to
terminate Mamaril was exercised in good faith, for the advancement of its interest and not for the purpose of defeating or circumventing the latter's
rights. This valid exercise of management prerogative must be upheld.

Mamaril's preventive suspension

and subsequent dismissal from the
service do not partake of a double
penalty; neither may his dismissal
be regarded as harsh and excessive.

Mamaril claims that he was subjected to a "double penalty," for having been initially placed under preventive suspension, and thereafter dismissed
from the service.

The Court is not persuaded.

To begin with, Mamaril's initial suspension was a preventive suspension that was necessary to protect Red System's equipment and personnel.

Significantly, "[p]reventive suspension is a measure allowed by law and afforded to the employer if an employee's continued employment poses a
serious and imminent threat to the employer's life or property or of his co-workers."[61] An employee may be placed under preventive suspension
during the pendency of an investigation against him.[62]

In fact, the employer's right to place an employee under preventive suspension is recognized in Sections 8 and 9 of Rule XXIII, Book V of the
Omnibus Rules Implementing the Labor Code, which states:
SEC. 8. Preventive suspension. - The employer may place the worker concerned under preventive suspension if his continued employment poses a
serious and imminent threat to the life or property of the employer or of his co-workers.

SEC. 9. Period of suspension. - No preventive suspension shall last longer than thirty (30) days. The employer shall thereafter reinstate the worker in
his former or in a substantially equivalent position or the employer may extend the period of suspension provided that during the period of extension,
he pays the wages and other benefits due to the worker. In such case, the worker shall not be bound to reimburse the amount paid to him during the
extension if the employer decides, after completion of the hearing, to dismiss the worker.

In the case at bar, Mamaril was placed under preventive suspension considering that during the pendency of the administrative hearings, he was
noticed to have several near-accident misses and he had exhibited a lack of concern for his work. His inattentiveness posed a serious threat to the
safety of the company equipment and personnel. This is especially true considering that he was driving trucks loaded with fragile products.
Mamaril further questions the propriety of his preventive suspension, by claiming that the timing of its imposition was suspect, as he even continued
working for Red System for eight months after the incident. According to Mamaril, this fact belied Red System's claim that he was a threat to the
company's safety.

This same argument was struck down by the Court in the case of Bluer Than Blue Ventures Company, et al. v. Esteban,[63] where it held that even if
the errant employee committed the acts complained of almost a year before the investigation was conducted, the employer shall not be estopped
from placing the former under preventive suspension, if the employee still performs functions that involve handling the employer's property and
funds. The employer still has every right to protect its assets and operations pending the employee's investigation.[64] Applying this to the case at bar,
Red System's decision to place Mamaril on preventive suspension eight months after the incident does not in any way render the said decision
questionable. What matters is that Mamaril's continued employment posed a threat to the company's properties and personnel. It would be at the
height of inequity to prevent Red System from enacting measures to protect its own equipment pending the administrative investigation.

Thus, having settled that Mamaril's one-month suspension was in fact a preventive suspension, there was nothing excessive or harsh about Red
System's decision to subsequently dismiss Mamaril after finding him guilty of willful disobedience of its lawful and reasonable orders.

Mamaril is Entitled to 13th Month

Pay and SIL Pay

Essentially, it is settled that in claims for 13th month pay and SIL pay, the burden rests on the employer to prove the fact of payment. This standard
follows the basic rule that in all illegal dismissal cases the burden rests on the defendant to prove payment rather than on the plaintiff to prove non-
payment, considering that all pertinent personnel files, payrolls, records, remittances and other similar documents – which will show that the claims
of workers have been paid – are not in the possession of the worker but are in the custody and control of the employer.[65] In the instant case, Red
System failed to present proof showing that it had indeed paid Mamaril his 13th month pay and SIL pay, thereby entitling the latter to the same
monetary claims. All amounts due shall earn legal interest of six percent (6%) per annum from the finality of this ruling until full satisfaction.

All told, Mamaril's dismissal from Red System was valid pursuant to Article 297(a) of the Labor Code. Mamaril willfully violated Red System's safety
instructions. Precisely, these safety instructions were lawful and reasonable and most importantly, were essentially for the safe discharge of his
duties. It bears stressing that while the law imposes a heavy burden on the employer to respect its employees' security of tenure, the law likewise
protects the employer's right to expect from its employees efficient service, diligence, and good conduct.[66] Thus, the Court shall not interfere with the
employer's right to dismiss an employee found to have willfully violated its rules and regulations.

WHEREFORE, premises considered, the instant Petition is hereby DENIED for lack of merit. The Decision dated September 9, 2016, and Resolution
dated January 30, 2017, rendered by the Court of Appeals in CA-G.R. SP No. 06413-MIN, are AFFIRMED with modification, such that the total
amount due to petitioner Samuel Mamaril shall be subject to a legal interest of six percent (6%) per annum from the finality of this Decision until full
satisfaction.

SO ORDERED.

[ G.R. No. 195614, January 10, 2018 ]

DIGITAL TELECOMMUNICATIONS PHILS., INC./JOHN GOKONGWEI, JR., PETITIONER, V. NEILSON M. AYAPANA, RESPONDENT.

DECISION

MARTIRES, J.:

This is a petition for review on certiorari under Rule 45 of the Rules of Court assailing the 7 October 2010 Decision[1] and 4 February 2011
Resolution[2] rendered by the Court of Appeals (CA) in CA-G.R. SP No. 112160. The CA affirmed with modification the 29 June 2009 Decision[3] and
28 October 2009 Resolution[4] of the National Labor Relations Commission (NLRC) in NLRC LAC Case No. 05-001831-08, which declared Neilson
M. Ayapana (respondent) to have been illegally dismissed.
THE FACTS
Digital Telecommunications Philippines, Inc. (petitioner  or the company) hired respondent as Key Accounts Manager for its telecommunication
products and services m the areas of Quezon, Marinduque, and Laguna provinces, with a monthly basic pay of P13,100.00. Respondent was
tasked, among others, to offer and sell DIGITEL's foreign exchange (FEX) line to prospective customers.
On 6 September 2006, respondent successfully offered two (2) FEX lines for Atimonan, Quezon, to Estela Lim (Lim), the owner of Star Lala Group of
Companies (Star Lala). He received from Lim the total amount of P7,000.00 (the subject amount) for the two lines, for which he issued two (2) official
receipts. Respondent, however, did not remit the subject amount to petitioner on the same date.
On 7 September 2006, petitioner's sales team, which included respondent, held a meeting during which respondent learned, from his immediate
superior, that there was no available FEX line in Atimonan, Quezon; and that it was not possible to have a FEX line in the area due to technical
constraints. On the same day, respondent retrieved from Lim the two (2) official receipts issued to the latter and replaced them with an
acknowledgment receipt.
On 23 November 2006, Teresita Cielo (Cielo), secretary of Lim, went to petitioner's business office to pay bills and to ask for the refund of the
subject amount. Upon verification by Myra Santiago (Santiago), petitioner's customer representative, she found that there was no existing application
for the said service under the name of Star Lala Group of Companies.
When Santiago found that respondent was the sales person handling Lim's transaction, she informed respondent of Cielo's request for refund on that
same day; but it was only on 28 November 2006, or five (5) days from said notice, that respondent was able to make the refund.
On 29 November 2006, petitioner issued a Notice to Explain[5] to respondent, asking him to explain: why he offered an inexistent FEX line; why he
withdrew the official receipts issued to Lim and replaced them with an acknowledgment receipt; why he did not immediately remit the proceeds of the
transaction to petitioner's business center; and why he retained the subject amount for 84 days.
On 30 November 2006, respondent submitted a written response.[6] He explained that he was not aware of the unavailability of the Atimonan line at
the time he offered it to Lim; that he retrieved the official receipts to avoid explaining the late remittance to the treasury department because, at the
time, Lim was still undecided whether to take up respondent's alternative offer of subscribing to a FEX line in Lucena until such time that an
Atimonan line could become available; that he issued the acknowledgment receipt as proof that the subject amount is in his possession; that prior to
23 November 2006, he made several attempts to obtain Cielo's advice as to the return of the subject amount, to no avail; and that after being
informed of Cielo's request on 23 November 2006, he went to Star Lala's office, which was closed, and thereafter tried to obtain Cielo's address in
order to return the money, to no avail. According to respondent, he handed the subject amount to Santiago after she informed him that Cielo would
retrieve the money from her.
On 4 December 2006, petitioner sent a Notice of Offense[7] to respondent, scheduling his administrative hearing and requesting his presence there.
On 19 January 2007, petitioner issued a Notice of Dismissal[8] finding respondent guilty of "breach by the employee of the trust and confidence
reposed in him by management or by a company representative" under petitioner's disciplinary rules, which merited dismissal for the first offense.
Aggrieved, respondent filed a complaint for illegal dismissal. The Labor Arbiter dismissed the complaint, ruling that substantial evidence exists that
respondent was involved in an event that justified petitioner's loss of trust and confidence in him, and therefore, he was validly dismissed from
employment.[9] Respondent then appealed to the NLRC.
The NLRC Ruling
The NLRC reversed and set aside the decision of the Labor Arbiter. It ruled that respondent was merely guilty of imprudence and not of bad faith or
malice. The NLRC found that dismissal was too harsh a penalty, especially since respondent appeared to have a clean record except for the Notice
of Final Warning[10] issued to him by petitioner on 17 October 2005. The NLRC also considered in respondent's favor the certificates of
commendation issued to him for being the most outstanding account manager in 2001 and 2002, as well as the service award he received in 2006.
Consequently, it ordered the petitioner to pay respondent separation pay in the amount of P78,600.00 computed at one-month pay for every year of
service, viz:
WHEREFORE, the appeal filed by complainant is GRANTED IN PART. The Decision of Labor Arbiter Melchisedek A. Guan dated March 6, 2008 is
REVERSED and SET ASIDE, and a NEW ONE rendered finding dismissal a harsh penalty and ordering respondents to pay complainant separation
pay in the sum of P78,600.00 as computed above.
SO ORDERED.[11]
Respondent thereafter filed a motion for reconsideration, which was denied by the NLRC. Unsatisfied with the decision, respondent appealed to the
CA.
The CA Ruling
The CA affirmed the NLRC ruling with modification that petitioner was further ordered to pay full back wages inclusive of allowances and other
benefits or their monetary equivalent, viz:
WHEREFORE, premises considered, the Decision dated June 29, 2009 of the National Labor Relations Commission (NLRC) in NLRC LAC
Case No. 05-001831-08 is AFFIRMED with MODIFICATION that private respondent DIGITEL is ordered to pay petitioner separation pay and full
back wages inclusive of allowances and other benefits or their monetary equivalent from January 19, 2007 up to the finality of this Decision.
SO ORDERED.[12]
The CA held that respondent's dismissal was not valid because neglect of duty, as a just cause for dismissal, must not only be gross but also
habitual. An isolated act of negligence cannot be ground for dismissal, and respondent was found negligent in only one instance.
Aggrieved, petitioner filed a motion for reconsideration, which was denied by the CA. Hence, this petition.
ISSUES
Petitioner raises the following issues:
I.
THE COURT OF APPEALS ERRED IN AFFIRMING THE NLRC'S FINDING THAT NO JUST CAUSE EXISTS TO WARRANT RESPONDENT
AYAPANA'S DISMISSAL DESPITE THE LAW AND EVIDENCE TO THE CONTRARY.
II.
THE COURT OF APPEALS ERRED IN AWARDING BACK WAGES AND SEPARATION PAY TO RESPONDENT AYAPANA DESPITE LACK OF
LEGAL BASIS.
Simply put, this Court is tasked to consider whether the CA correctly held that respondent's dismissal was invalid and that he is entitled to full back
wages and separation pay.
DISCUSSION
Incipiently, this Court addresses respondent's contention that petitioner can no longer raise the issue on the validity of his dismissal since it has
failed to file a motion for reconsideration from the NLRC's decision, thus, it is bound by the NLRC's finding on this issue.
Respondent errs. It is settled that the entire case becomes open to review, and the Court can review matters not specifically raised or assigned as
error by the parties, if their consideration is necessary in arriving at a just resolution of the case.[13]
The issue of whether respondent was validly dismissed, though ruled upon by the NLRC without an appeal from petitioner, is pivotal in determining
respondent's entitlement to back wages and separation pay, which was raised by respondent in his appeal to the CA. It is clearly necessary to
arriving at a just disposition of the controversy. Thus, it was proper for the CA to pass upon said issue, and for petitioner to interpose an appeal
therefrom.
Now to the primary issue at bar: was respondent validly dismissed? The Court rules in the affirmative.
Respondent held a position of trust and confidence and committed an act
that justified petitioner's loss of trust and confidence.
A perusal of the notice of dismissal issued by petitioner to respondent shows that the ground relied upon by the former was the latter's breach of the
trust and confidence reposed in him by the company, contrary to the ruling of the CA, which based its decision on gross and habitual neglect, a
separate ground under Article 297[14] of the Labor Code.
The willful breach by the employee of the trust reposed in him by his employer or the latter's duly authorized representative is a just cause for
dismissal. However, the validity of a dismissal based on this ground is premised upon the concurrence of these conditions: (1) the employee
concerned must be holding a position of trust and confidence; and (2) there must be a willful act that would justify the loss of trust and confidence.[15]
The first requisite is certainly present. In a number of cases, this Court has held that rank-and-file employees who are routinely charged with the care
and custody of the employer's money or property are classified as occupying positions of trust and confidence.[16] In Philippine Plaza Holdings, Inc. v.
Episcope,[17] the Court held that a service attendant tasked to attend to dining guests, handle their bills, and receive their payments for transmittal to
the cashier is an employee occupying a position of trust and confidence and is thus expected to act with utmost honesty and fidelity.[18]
It is not disputed that respondent was tasked to solicit subscribers for petitioner's FEX line and, in the course thereof, collect money for subscriptions
and issue official receipts therefor, as was the case in the transaction subject of this controversy. Being involved in the handling of the company's
funds, respondent undeniably occupies a position of trust and confidence.
The records likewise reveal that the second requisite is present. It must be emphasized that a finding that an employer's trust and confidence has
been breached by the employee must be supported by substantial evidence,[19] or such amount of relevant evidence which a reasonable mind might
accept as adequate to justify a conclusion. It must not be based on the employer's whims or caprices or suspicions; otherwise, the employee would
eternally remain at the mercy of the employer.[20]
The totality of the circumstances in the case at bar supports a conclusion that respondent's dismissal was based on substantial evidence that he had
willfully breached the trust reposed upon him by petitioner, and that petitioner was not actuated by mere whim or capriciousness.
It is uncontroverted that respondent took part in a series of irregularities relative to his transaction with Lim, to wit:
First, he offered an inexistent FEX line to Lim, for which he received a subscription payment of P7,000.00. Even granting he did not know that the
Atimonan line was unavailable at the time he offered the same to Lim, he was remiss in not ascertaining its availability before he concluded his
transaction with Lim and received from her the subscription payment. As an employee admittedly tasked with soliciting subscribers for the
Company's FEX line, it was an integral part of his functions to ensure that the lines he offered to potential subscribers were valid and subsisting.
Second, it is not disputed that respondent was required and expected to immediately remit the proceeds acquired in the course of his sales
transactions; which he failed to do in Lim's case, without sufficient explanation for such lapse.
Third, respondent readily admits that when he came to know of the Atimonan line's unavailability, he did not immediately effect a refund nor inform
management of his decision to retain the money supposedly pending Lim's decision to acquire another line. Instead, he retrieved the official receipts
from Lim and issued an acknowledgment receipt.
Respondent contends that he could not be imputed with any reckless, willful, or deliberate act of breaching petitioner's trust and confidence because
he was of the honest belief that the Atimonan line was existent when he offered it to Lim; that he retained the money pursuant to an oral agreement
between him and Lim, wherein he gave her time to contemplate the option of obtaining a refund or availing of another FEX line pending the
availability of the Atimonan line; and that he issued the acknowledgment receipt as evidence that the sum collected was in his possession.
Respondent's arguments are misplaced. Even if this Court were to concede that he was merely negligent in offering an FEX line whose existence he
did not ascertain first, his acts subsequent to being aware of the Atimonan line's unavailability indubitably manifests willfulness and deliberateness.
In his response to petitioner's notice to explain, respondent admitted he came to know of the Atimonan line's unavailability during their team's 7
September 2006 meeting when he was informed by his superior, Rene Rico (Rico). When respondent inquired from Rico if it was possible that the
Atimonan line would be available in the near future, the latter answered in the negative.[21] It therefore reeked of underhandedness that petitioner still
gave Lim the option to avail of a different FEX line until such time that the Atimonan line would become available, when he already knew at the time
that the Company was not even contemplating such service. There is also no showing that he disclosed the full extent of Rico's response to Lim.
Respondent's act of retrieving and cancelling the official receipts without petitioner's knowledge or conformity was also highly irregular and prejudicial
to the company, as its cancellation has tax and reportorial implications that may result in liability.
Moreover, respondent admitted that the reason he cancelled the official receipts was to conceal from the treasury department the fact of late
remittance.[22] Notably, petitioner also failed to explain why he did not at least inform management about his oral agreement with Lim, considering
that the company could incur liability arising from his continued retention of the subscription money. Lim's consent to such retention is immaterial,
because the duty to remit the proceeds or at least disclose any action relative to funds acquired for the availment of the company's services was
mandatory to the company.
Third, respondent retained the subject amount from 6 September 2006 to 28 November 2006, offering no sufficient explanation for this prolonged
period of retention, other than to insist that he was allowed to do so by Lim. However, as discussed earlier, this does not explain why respondent
would withhold from the company information regarding company funds or a potentially contentious transaction, if he had truly acted in good faith. As
borne by the records, it was only on 23 November 2006 that the petitioner, through its customer representative Santiago, became aware of such
retention. Moreover, while respondent claims that he issued an acknowledgment receipt as proof that he possessed the money and would return it
as soon as Lim signified her desire for a refund, it is curious that he was only able to return the subject amount on 28 November 2006, or five (5)
days after being told by Santiago to refund it on 23 November 2006.
All the above circumstances militated against respondent's claim of good faith and clearly established an act that justified the Company's loss of trust
and confidence in him. In Bristol Myers Squibb (Phils.), Inc. v. Baban,[23] the Court held that "as a general rule, employers are allowed a wider latitude
of discretion in terminating the services of employees who perform functions by which their nature require the employer's full trust and confidence.
Mere existence of basis for believing that the employee has breached the trust and confidence of the employer is sufficient and does not require
proof beyond reasonable doubt."[24]
Furthermore, no bad faith or ill will could be imputed to the company in dismissing respondent because the latter was apprised of the charges
against him and was given an opportunity to submit a written explanation, which he complied with. A hearing was also conducted.
It must be remembered that the discipline, dismissal, and recall of employees are management prerogatives, limited only by those imposed by labor
laws and dictated by the principles of equity and social justice.[25] This Court finds that petitioner exercised its management prerogatives consistent
with these principles.
Even with a finding that respondent was validly dismissed, separation pay
may be granted as a measure of social justice.
Generally, an employee dismissed for any of the just causes under Article 297 is not entitled to separation pay. By way of exception, the Court has
allowed the grant of separation pay based on equity and as a measure of social justice, as long as the dismissal was for causes other than serious
conduct or those manifesting moral depravity.[26]
This Court is mindful of the new rule it established in Toyota v. NLRC,[27] where the Court held that "in addition to serious misconduct, in dismissals
based on other grounds under Art. 282[28] like willful disobedience, gross and habitual neglect of duty, fraud or willful breach of trust, and commission
of a crime against the employer or his family, separation pay should not be conceded to the dismissed employee."[29] However, the Court also
recognizes that some cases merit a relaxation of this rule, taking into consideration their peculiar circumstances.
Here, while it is clear that respondent's act constitutes a willful breach of trust and confidence that justified his dismissal, it also appears that he was
primarily actuated by zealousness in acquiring and retaining subscribers rather than any intent to misappropriate company funds; as he admitted in
his response to the notice to explain that offering an alternative FEX line to Lim was part of his strategy to ensure her subscription.
The lack of moral depravity on respondent's part is also shown by the following circumstances: (1) he was the recipient of certificates of
commendation[30] from petitioner in the years 2001 and 2002, for being an outstanding account manager, as well as of a service award in 2006 for
continuous service to the company; (2) he was granted promotional increases[31] in 2002, 2004, and 2005, as well as a merit increase[32] in 2003; (3)
he has served the company from 16 February 2001 to 19 January 2007 with only one other known infraction embodied in a notice of final warning
that petitioner failed to expound on; and (4) based on Cielo's Salaysay,[33] Lim did allow respondent to retain the subject amount for a time, even
though, as discussed earlier, this is immaterial to determining whether his act justified his dismissal, since he had an independent duty to disclose
material agreements or transactions to petitioner.
To be sure, his zealousness was manifested through acts that showed an inordinate lapse of judgment warranting his dismissal in accordance with
management prerogative, but this Court considers in his favor the above circumstances in granting him separation pay in the amount of one (1)
month pay for every year of service.[34]
WHEREFORE, premises considered, the petition is GRANTED. The assailed 7 October 2010 Decision and 4 February 2011 Resolution of the Court
of Appeals in CA-G.R. SP No. 112160, are REVERSED and SET ASIDE. The Decision of the Labor Arbiter dismissing respondent Neilson M.
Ayapana's complaint for illegal dismissal and other monetary claims is REINSTATED with MODIFICATION that respondent should be paid
separation pay equivalent to one month of his latest salary for every year of service.
SO ORDERED.

[ G.R. No. 219324, August 08, 2018 ]

DEBRA ANN P. GAITE, PETITIONER, VS. FILIPINO SOCIETY OF COMPOSERS, AUTHORS AND PUBLISHERS, INC., ARTURO LUI PIO,
NOEL G. CABANGON, ALVIN F. DE VERA, LEOCADIO ERNESTO A. SANCHEZ III, ADORACION SATURNO AND CEASAR* APOSTOL,
RESPONDENTS.

DECISION

PERALTA, J.:

Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to reverse and set aside the Decision[1] dated
November 24, 2014 and the Resolution[2] dated July 1, 2015 of the Court of Appeals (CA) in CA-G.R. SP No. 133559.

The antecedent facts are as follows:

On May 16, 2006, respondent Filipino Society of Composers, Authors, and Publishers, Inc. (FILSCAP),  incorporated in 1965 as a non-stock, non-
profit association of composers, lyricists, and music publishers that collectively enforces the public performance rights granted by law to copyright
owners of musical works, employed petitioner Debra Ann P. Gaite as its General Manager. Its primary purpose includes: (i) the acquisition of
representation and performance rights on music compositions of its members and similar affiliate societies; and (ii) the grant of licenses and
collection of royalties for the representation and performance rights on music compositions of its members and similar affiliate foreign societies. In
consideration for its authorization of the public performance of copyright works through the issuance of licenses, FILSCAP collects license fees
which it then distributes to its members and affiliate foreign societies.

In 2012, several issues pertaining to Gaite were brought to the attention of FILSCAP's Board of Trustees which include the following: (1) the
erroneous filing of a case against a records company without prior notice to the Board, which eventually resulted in FILSCAP being ordered to pay
P1,000,000.00 in damages; (2) her non-disclosure of her receipt of an e-mail inviting one of the board members to a regional digital licensing
conference in Taipei; (3) her willful delay in taking action on the collection of proxy forms from members for the May 28, 2011 FILSCAP elections
and, consequently, collection of an insufficient number of proxy forms for the said election; (4) her non-disclosure of the complete list of members to
a board member who wanted to help in securing the proxy forms; and (5) the appropriation for her personal benefit of show tickets given to
FILSCAP, which were supposed to be used for monitoring purposes.[3]

Before conducting administrative disciplinary proceedings against Gaite, the Board sought the legal opinion of FILSCAP's external counsel.
Thereafter, learning of the issues between FILSCAP and Gaite, the International Confederation of Societies of Authors and Composers (CISAC),  the
umbrella organization of copyright societies around the world, advised FILSCAP to settle the matter amicably. Thus, FILSCAP discussed a graceful
exit and separation package with Gaite and scheduled the signing of a Release, Waiver, and Quitclaim on June 26, 2012 which provided that
FILSCAP would release, waive and discharge Gaite from any and all actions, whether civil, criminal or administrative, or from any and all claims of
any kind or character arising out of or in connection with her employment with FILSCAP in exchange for P1,440,386.01.

Days before the scheduled signing, however, FILSCAP discovered that for several fiscal years already, specifically from 2009 to 2011, Gaite had
been allowing funds from its Special Accounts to be used to cover the company's Operating Expenses without the knowledge, consent, or
authorization of the Board and in contravention of FILSCAP's Distribution Rules. FILSCAP pointed out that it is a non-stock, non-profit organization
established to protect the interests of composers, lyricists, and music publishers and that from the royalties it receives, it maintained a Special
Accounts for undistributed collections. Under its Distribution Rules, these Special Accounts were intended to be held for a certain period until such
time that the conditions for their release to a particular person or entity or to a general membership, as the case may be, have been met. In other
words, these funds were held in trust by FILSCAP for the benefit of the rightful owners. But as FILSCAP claimed, it discovered that said Special
Accounts were being transferred and credited to cover the shortage in the Operating Expenses resulting in the dwindling of the same, depriving the
rightful beneficiaries of the amount appropriately due them. Because of this discovery, FILSCAP decided to defer the settlement with Gaite and in
lieu of the Quitclaim-signing scheduled on June 26, 2012, FILSCAP commenced a specific inquiry into the matter.[4]

During said investigation, FILSCAP confirmed Gaite's unauthorized misappropriation or reallocation, which she committed together with the then
Distribution Manager, Mr. Genor Kasiguran, amounting to P17,720,455.77. In fact, she even admitted the same in her email to Board member, Mr.
Gary Granada, on June 22, 2012, where she said in part that:
Rox, Genor and I discussed it and made a decision which we thought was in the best interest of the Society. I agree with you that it is mainly an
accounting concern. But it was a collegial decision based on reports made by accounting and distribution, distribution rules as approved by the
Board, and sound accounting principles (otherwise Rox would have said so). Whether or not the Board was made fully aware of this (which I heard is
now the main issue) does not make the decision wrong.[5]

In view of said discovery, FILSCAP issued a Show Cause Notice to Gaite dated July 10, 2012 requiring her to explain why no disciplinary sanctions
should be imposed on her and likewise placed her under preventive suspension with pay, pending the administrative investigation. In her reply, Gaite
denied any misappropriation and informed the Board that she had already filed a case for constructive dismissal against FILSCAP on June 28, 2012,
or two (2) days after the cancelled signing of the Quitclaim and even before the July 10, 2012 show-cause notice was sent to her.

In her Position Paper, Gaite alleged that her termination was premeditated and that as early as 2010, she was already confronted about certain
matters such as her out-of-town trips, entitlement to complimentary oncert tickets, and her remarks about having too many board meetings. She
alleged that it is because FILSCAP and its counsel doubted the validity of their proposed grounds for termination that they instead negotiated with
her for a separation package in exchange for her resignation. But belatedly, they reneged on their offer and simulated the charge of loss of
confidence to justify her termination. According to Gaite, she did not misappropriate any fund nor is there proof that she utilized the same for her
personal use. As regards the alleged reallocation from the Special Accounts to the Operating Expenses, Gaite claimed that such was done in
accordance with the company's Distribution Rules which provide that the distributable revenue is calculated by subtracting from the company's gross
revenue, among others, all expenses arising from and incidental to the management and operation thereof. Also, she pointed out that, besides, said
reallocation redounded to the benefit of the company.[6]

On April 24, 2013, the Labor Arbiter (LA) rendered a Decision ordering FILSCAP to pay Gaite P1,440,386.10 representing the amount stated in the
Quitclaim declaring that there was already a perfected and binding contract between the parties when they negotiated and wrote the final draft of the
Quitclaim.[7]
On October 29, 2013, the National Labor Relations Commission (NLRC) partially set aside the LA Decision and declared that Gaite was
constructively dismissed, ordering FILSCAP to pay her backwages, separation pay, moral and exemplary damages and attorney' fees. According to
the NLRC, the acts of FILSCAP prior to terminating Gaite's services amounted to constructive dismissal. First,  they sought the legal opinion of their
counsel as to how they could terminate her employment. Apparently unconvinced with the soundness of their grounds, they negotiated with Gaite for
a separation package. But they reneged on their promise and instead belatedly came up with the charge of reallocation/misappropriation, which is a
mere afterthought. To the NLRC, these acts constituted discrimination, insensibility, and disdain towards Gaite amounting to constructive dismissal.[8]

In a Decision dated November 24, 2014, however, theCA reversed and set aside the NLRC Decision. It held that contrary to the NLRC's findings, the
acts of FILSCAP in seeking the opinion of its counsel, foregoing the signing of the Quitclaim, and conducting an administrative hearing cannot be
considered as acts of discrimination, insensibility, and disdain for it was merely exercising prudence and due diligence in good faith to ensure that
Gaite's dismissal would be proper and based on valid grounds.[9] Besides, it was stressed that the said Quitclaim was not perfected as the parties did
not sign the same.

As for her actual dismissal, the CA ruled that Gaite was validly dismissed for serious misconduct and loss of trust and confidence. This is because as
provided by the company's Distribution Rule, the Board has sole authority to allocate or appropriate FILSCAP's revenues consisting of royalties and
license fees. Thus, her act of transferring the staggering amount from the Special Accounts to augment the alleged Operating Expenses deficit
without the consent of the Board is serious in that not only did she violate the rules, she depleted the special funds which FILSCAP merely held in
trust for the rightful copyright owners, putting FILSCAP in a bad light. In fact, the appellate court noted that to correct Gaite's anomaly, FILSCAP
even had to take out a loan to cover the royalties due for distribution but were unavailable because of her reallocation.

The CA also ruled that contrary to Gaite's claim, FILSCAP was able to sufficiently prove with convincing evidence the fact of the reallocation.
Besides, her claim that there is no reallocation is inconsistent with her subsequent arguments that the reallocation was made pursuant to the
Distribution Rules and that the same even redounded to the benefit of the company. The fact remains that Gaite's culpable acts amounted to loss of
trust and confidence justifying her dismissal because as General Manager of FILSCAP, she held a fiduciary position entrusted with the overall
operation thereof.[10]

In its Resolution dated July 1, 2015, the CA further rejected Gaite's contention that the accounting report and email correspondence are inadmissible
as they were never authenticated, verified or sworn to. First of all, technical rules of evidence are not binding in labor cases. Second of all, Gaite
never questioned the authenticity/admissibility thereof before the labor tribunals. Thus, any objection thereto must be deemed waived.[11]

Unfazed, Gaite filed the instant petition on September 7, 2015 invoking the following arguments:
I.
THE COURT OF APPEALS GRAVELY ERRED IN IGNORING THE FACTUAL FINDINGS OF THE NATIONAL LABOR RELATIONS COMMISSION
WHICH WERE CLEARLY SUBSTANTIATED BY EVIDENCE ON RECORD.
II.
THE CONCLUSIONS OF THE COURT OF APPEALS WERE GROUNDED ENTIRELY ON SPECULATIONS, SURMISES, AND A
MISAPPREHENSION OF FACTS.
III.
THE GROUND UPON WHICH PETITIONER WAS DISMISSED WAS BASELESS, UNFOUNDED, AND CONTRIVED.[12]

In her petition, Gaite posits that the CA erred in reversing the ruling of the NLRC for the same was clearly supported by substantial evidence,
particularly, the legal opinion of FILSCAP's counsel, the minutes of the special meeting of the Board, and the draft of the Quitclaim. These
documents evince the premeditated scheme of FILSCAP to oust Gaite from her employment. Clearly, the supposed "reallocation or misappropriation
of funds" purportedly committed by Gaite was a belated accusation to forestall the execution of the Quitclaim. Thus, the findings of fact of the NLRC
should be respected.[13]

Gaite also claims that the CA erred when it ruled that she was validly dismissed. First, the documents presented by FILSCAP as evidence were
neither authenticated, identified nor sworn to. As such, they have no probative value and are merely hearsay and self-serving. Second,  the June 22,
2012 email where Gaite supposedly admitted that there was a "reallocation" of funds was conveniently taken out of context for the CA merely relied
on its last paragraph. She invites Us to consider the pertinent portions of the same below:
"Hi Gary. It seems that the brief I prepared was not read or forwarded. Baka that might explain things better.

The ratios reported annually are correct, but based on totals. The distribution is done in pools, with varying percentages of administration cost
(specifically for mechanicals and foreign pools) – a practice that has been in place since the beginning. That is causing the deficiencies.

The amounts were not "borrowed." The expense was already made the previous year. (i.e., last year's opex) based on the approved budgets and all
disbursements over 50,000 are cleared with the Board. The budgets were not changed at all. But these were expenses already incurred for the
previous year's operating expense, and the amount should be deducted from the following year's distribution as specified in our distribution rules. It
is simply an issue of the amount not being fully deducted from the following year's distributable amount.
xxx

Genor and I discussed this with Mars and then Rox because it is an accounting concern more than a distribution concern. When the auditor (Bing)
discussed the audit findings with us, one issue he mentioned was the lack of reconciliation between the accounting and the distribution. I agreed and
said we will direct the two to make a reconciliation. Rox and I then explained the problem of unrecovered costs to him and what we thought of doing
to correct the previous years. He said it was "ok" naman especially since these funds can no longer be attributable to any specific recipient.

Rox, Genor and I discussed it and made a decision which we thought was in the best interest of the Society. I agree with you that it is mainly an
accounting concern. But it was a collegial decision based on reports made by accounting and distribution, distribution rules as approved by the
board, and sound accounting principles (otherwise Rox would have said so). Whether or not the Board was made fully aware of this (which I heard is
the main issue) does not make the decision wrong." (Underscoring supplied)[14]
Thus, Gaite claims that "the distribution is done in pools, with varying percentages of administration cost (specifically for mechanicals and foreign
pools) – a practice that has been in place since the beginning" and that "the expense was already made the previous year. (i.e.,  last year's opex)
based on the approved budgets and all disbursements over 50,000 are cleared with the Board." Clearly, therefore, this allegation of reallocation is
merely an afterthought for had there been irregularities since 2009, the same should have already been discovered in the course of the audit.

Third, to defend her case, Gaite explains that Section 3.1 of the Distribution Rules of the company provides that all expenses arising from and
incidental to the conduct, management and operation of the company, which includes Operating Expenses, are first to be deducted from the
company's gross revenue, to wit:
3. General Principles Governing Royalty Distribution
3.1 Distributable revenue is calculated by subtracting from the Society's gross revenue:
a) all expenses arising from and incidental to the conduct. management and operation of the Society;
b) provision for reserves, if any; and
c) moneys applied by the Board for development and promotion of Filipino Music and culture." (Underscoring supplied)[15]

Thus, Gaite concludes that the monies were used for operating expenses which were used for the company. Fourth,  Gaite asseverates that the
statement of the CA that FILSCAP was constrained to take out a loan to "cover royalties due" is based on conjecture, speculation, and guesswork.
This is because the purported bank loan application submitted by FILSCAP does not indicate the purpose the same is to be used other than
"capital."[16] Finally, Gaite contends that the only offense she appears to be guilty of is that she withheld the disbursement of funds from a Special
Fund for the company's Operating Expenses without the knowledge, consent or authorization of the Board. She is not, however, guilty of
misappropriation since she did not utilize said funds for her personal use. In fact, it was clearly shown that the disbursement of funds redounded to
the benefit of the company.[17]

The Court does not agree.

Ultimately, the bone of contention in the instant case is the legality of Gaite's dismissal.

Basic is the rule that an employer may validly terminate the services of an employee for any of the just causes enumerated under Article 296
(formerly Article 282) of the Labor Code, namely:
(a) Serious misconduct  or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative;
(d) Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly
authorized representatives; and
(e) Other causes analogous to the foregoing.

Here, the Notice of Termination shows that FILSCAP terminated Gaite's employment due to the fact that her actuations constituted serious
misconduct and caused loss of trust and confidence in her as General Manager of the company.[18]

On the first ground for termination, case law characterizes "misconduct" as an improper or wrong conduct; it is the transgression of some established
and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error in judgment. The
misconduct, to be serious within the meaning of the Labor Code, must be of such a grave and aggravated character and not merely trivial or
unimportant. Thus, for misconduct or improper behavior to be a just cause for dismissal, (a) it must be serious; (b) it must relate to the performance
of the employee's duties; and (c) it must show that the employee has become unfit to continue working for the employer.[19]

In the instant case, the Court finds that Gaite's actuations constitutes serious misconduct. First, the seriousness of the same cannot be denied. Not
only is the amount involved herein a staggering amount of P17,720,455.77, the alleged reallocation violated an express provision of the company's
Distribution Rules and was accomplished without the knowledge, consent, or authorization of the Board. Second, Gaite committed said transfer in
the performance of her duties as General Manager of FILSCAP who is responsible for the overall operations thereof, including the regular review
and updating of its distribution guidelines to facilitate royalty distribution to FILSCAP members and foreign affiliates. Third, because of this grave
infraction causing the depletion of the company's Special Accounts held in trust for the rightful copyright owners, Gaite's ability to duly perform and
accomplish her duties and responsibilities as General Manager has been seriously put into question. It is clear, therefore, that Gaite's acts amounted
to serious misconduct warranting her dismissal.

On the second ground for termination, the Court has held that "loss of trust and confidence" will validate an employee's dismissal when it is shown
that: (a) the employee concerned holds a position of trust and confidence; and (b) he performs an act that would justify such loss of trust and
confidence. Moreover, certain guidelines must be observed for the employer to cite loss of trust and confidence as a ground for termination. It is
never intended to provide the employer with a blank check for terminating its employees. Neither should it be loosely applied in justifying the
termination of an employee nor should it be used as a subterfuge for causes which are improper, illegal, or unjustified.[20]

Here, the Court finds that FILSCAP validly terminated Gaite's employment on the ground of loss of trust and confidence. First, there is no doubt that
she held a position of trust and confidence. The law contemplates two (2) classes of positions of trust. The first class consists of managerial
employees. They are as those who are vested with the power or prerogative to lay down management policies and to hire, transfer, suspend, layoff,
recall, discharge, assign or discipline employees or effectively recommend such managerial actions. The second class consists of cashiers, auditors,
property custodians, etc. who, in the normal and routine exercise of their functions, regularly handle significant amounts of money or property.[21] As
General Manager of the company, Gaite clearly falls under the first class of employee for as earlier pointed out, she was responsible for the overall
operations thereof, including the regular review and updating of its distribution guidelines to facilitate royalty distribution to FILSCAP. members and
foreign affiliates. Specifically, her duties include: (1) preparation of the annual and 3-5 year FILSCAP Programs and budgets, ensuring that the same
are implemented effectively and judiciously; and (ii) regular reviews and updating of FILSCAP's distribution guidelines to facilitate royalty distribution
to FILSCAP members and foreign affiliates.[22] Hence, the first requisite is present in this case.

Second, it is rather obvious to the Court that the act of transferring the aforementioned staggering amount from the Special Accounts to cover the
company's Operating Expenses, without the knowledge and consent of the Board of Directors, and in direct contravention of FILSCAP's Distribution
Rules is sufficient reason for the loss of trust and confidence in Gaite. It bears stressing that as managerial employee, Gaite could be terminated on
the ground of loss of confidence by mere existence of a basis for believing that she had breached the trust of her employer, which in this case is
FILSCAP. Proof beyond reasonable doubt is not required. It would already be sufficient that there is some basis for such loss of confidence, such as
when the employer has reasonable ground to believe that the concerned employee is responsible for the purported misconduct and the nature of his
participation therein. This distinguishes a managerial employee from a fiduciary rank-and-file where loss of trust and confidence, as ground for valid
dismissal, requires proof of involvement in the alleged events in question, and that mere uncorroborated assertion and accusation by the employer
will not be sufficient.[23]

In the present case, the Court agrees with the appellate court in ruling that FILSCAP has sufficiently proven Gaite's unauthorized reallocation or
transfer of funds from the company's Special Accounts to its Operating Expenses. For one, the report of FILSCAP's Accounting Officer, Melinda
Lenon, dated July 18, 2012 adequately showed that the funds were taken from the distribution pool to cover the operating expenses deficit.[24] For
another, such report was, in fact, duly corroborated by Gaite's June 22, 2012 email to Board member, Mr. Gary Granada.

On this matter, Gaite contends that said June 22, 2012 email, where she allegedly admitted to the reallocation, was taken out of context. The Court
is not convinced. In the first place, nowhere in said e-mail did she expressly or impliedly deny having reallocated funds from the Special Accounts to
the Operating Expenses. In the second place, nowhere in said email did she even address the issue of her unauthorized reallocation. At most, she
merely explained therein that "the operating expenses were already incurred based on approved budgets' and that 'the same was not deducted from
the following year's funds." But the email tells Us nothing about the source from which these expenses were actually paid. Neither does it provide
any explanation for FILSCAP's finding that these operating costs were in fact paid using the funds from the Special Accounts. The fact that the issue
here is mainly an "accounting concern" has no bearing on the allegations proven in the present case.

Unfortunately for Gaite, moreover, her arguments in the instant petition are just as elusive. There, Gaite merely declared that the CA conveniently
took her email out of context and simply relied on its last paragraph but did not particularly illustrate how this was done. Instead, she merely quoted
the NLRC's ruling which found. that the allegation of reallocation is an afterthought for had there been irregularities since 2009, the same should
have already been discovered in the course of the audit. But again, this finding does not explain how her admission in her email was misinterpreted.
The allegation that the reallocation issue is a mere afterthought does not instantly render Gaite innocent of the same. Besides, even if We are to
assume that the same was indeed taken out of context, the fact remains that as pointed out by the CA, her claim that there was no reallocation is
belied by her subsequent arguments that the reallocation was made pursuant to the Distribution Rules and that the same even redounded to the
benefit of FILSCAP.

In her belated attempt to refute the charges against her, Gaite claims that the documents presented by FILSCAP as evidence have no probative
value for being neither authenticated, identified, nor sworn to. But the Court affirms the ruling of the appellate court that technical rules of evidence
are not binding in labor cases. In addition, any objection to said evidence must be deemed waived for Gaite never questioned  the authenticity or
admissibility thereof before the labor tribunals.

Contrary to Gaite's expectations, moreover, it has not escaped the Court's attention that while she persistently insists that her act of reallocating
funds was sanctioned by the company's Distribution Rules, she unfortunately failed to cite any relevant provision that supposedly authorizes her to
do so. To support her claim, she cites Section 3.1 of the Distribution Rules. But all said provision states is that all expenses arising from and
incidental to the conduct, management and operation of the company, which includes the Operating Expenses, are first to be deducted from the
gross income. Nowhere in the rules cited by Gaite was it provided, either expressly or impliedly, that she, as General Manager of FILSCAP, is
authorized to transfer funds from the Special Accounts to cover the Operating Expenses without the knowledge or consent of the Board. As the CA
points out, it is true that the Operating Expenses must first bdeducted from gross revenue to arrive at the distributable revenue. But the Distribution
Rules expressly provide that part of the distributable revenue, after operating and other expenses have been deducted, are to be held in suspense
under special accounts for certain works to be distributed later to the rightful owners or to the general membership, as the case may be.[25] Thus,
Gaite should not have used the funds from the Special Accounts to cover Operating Expenses because in the first place, the Operating Expenses
should have already been deducted from the gross revenue before part of the distributable royalties may be set aside under the Special Accounts. In
fact, it bears stressing that Paragraph 1.2 of the Distribution Rules even provides that the Board has the sole authority to allocate or appropriate
FILSCAP's revenues consisting of royalties and license fees.[26] It is therefore clear that not only did Gaite anchor her defense on an inapplicable and
irrelevant provision of the company's Distribution Rules, her commission of the subject reallocation goes against the express prohibitions provided
thereunder.

The Court finds it worthy to state further that Gaite seems to be missing the point in insisting that there is no showing that an interested person had
suffered any damage or injury as a result of the perceived 'reallocation.' That she did not use the funds for her personal gain and that the transfer
thereof redounded to the benefit of the company is of no moment. To the Court, the mere fact that she authorized said transfer without the
knowledge or consent of the Board and in direct contravention of the company's Distribution Rules constitutes valid and legal ground sufficient
enough to warrant her dismissal. Otherwise stated, regardless of whether FILSCAP has sufficiently proven actual damage to FILSCAP or that she
personally benefited from her actuations, the mere existence of a basis for believing that she breached FILSCAP's trust and confidence suffices as
grounds for her dismissal.

At this juncture, it must be noted that the Court, in Kasiguran v. FILSCAP, et al.,  had already issued a Resolution[27] dated April 6, 2015, where it
ruled upon the illegal dismissal suit filed against FILSCAP by Mr. Genor Kasiguran, the Distribution Manager of FILSCAP with whom Gaite allegedly
conspired in committing the same unauthorized act of reallocation charged herein. There, the Court upheld the validity of Kasiguran's dismissal on
the grounds of serious misconduct and loss of trust and confidence, viz.:
In this case, the LA and the NLRC were uniform in their findings that the P17,720,455.77 subject amount was transferred from Special Accounts to
the Operating Expenses without the required Board approval. The NLRC did not consider this as sufficient reason to justify Kasiguran's dismissal
because: (1) the respondents failed to prove that they were defrauded which to it was an essential element of misappropriation; and (2) hence, while
there was "transfer," the dismissal was too harsh a penalty.

It should be noted, however, that the damage to the respondents or whether or not the respondents were defrauded is not a necessary element and
consideration in determining whether sufficient basis exists to justify the employee's dismissal on grounds of serious misconduct or loss of trust. To
reiterate, the employer need only to entertain the moral conviction or such reasonable grounds to believe, that the employee is responsible for the
misconduct and the nature of the latter's participation renders him unworthy of the trust and confidence demanded by the position; that the act
resulting in the loss of trust or the misconduct is established by facts; and that the act or misconduct is willfully made, i.e.,  the employee voluntarily
and willfully committed the act, although he may not have intended the wrongful consequence.[28]
Prescinding from the foregoing, it is evident from the facts of this case that Gaite was validly dismissed on the grounds of serious misconduct and
loss of trust and confidence for her unauthorized reallocation of funds from FILSCAP's Special Accounts to cover the deficit in its Operating Expense
without the required knowledge, consent, or authorization of the company's Board of Directors. Time and again, the Court has emphasized that an
employer has the right to exercise its management prerogative in dealing with its company's affairs including its right to dismiss its erring employees.
We recognized the right of the employer to regulate all aspects of employment, such as the freedom to prescribe work assignments, working
methods, processes to be followed, regulation regarding transfer of employees, supervision of their work, lay-off and discipline, and dismissal and
recall of workers. In fact, it is a general principle of labor law to discourage interference with an employer's judgment in the conduct of his business.
Even as the law is solicitous of the welfare of the employees, it also recognizes employer's exercise of management prerogatives. Thus, for as long
as the company's exercise of judgment is in good faith to advance its interest and not for the purpose of defeating or circumventing the rights of
employees under the laws or valid agreements, such exercise will be upheld.[29]

WHEREFORE, premises considered, the instant petition is DENIED. The assailed Decision dated November 24, 2014 and Resolution dated July 1,
2015 of the Court of Appeals are AFFIRMED.

SO ORDERED.

[ G.R. No. 225125, June 06, 2018 ]

MARLON L. ARCILLA, PETITIONER, VS. ZULISIBS, INC., PIANDRE SALON, AND ROSALINDA FRANCISCO, RESPONDENTS.

R E S O L U T I O N

CARPIO, J.:

The Case

This is a petition for review to set aside the 10 February 2016  Decision[1] of the Court of Appeals in CA-G.R. SP No. 141953 which affirmed with
modifications the Resolutions dated 30 April 2015[2] and 26 June 2015[3] of the National Labor Relations Commission (NLRC), Third Division, in
NLRC LAC No. 04-001028-15/NLRC NCR No. 10-12582-14.
The Facts

Respondent Zulisibs, Inc. (Zulisibs) is a corporation organized and existing under Philippine laws with respondent Rosalinda Francisco (Francisco)
as its President and Chief Executive Officer. Zulisibs operates respondent Piandre Salon (Piandre), an establishment engaged in the operation of
beauty salons.

Petitioner Marlon L. Arcilla (Marlon) was hired by Piandre on 8 February 2000 and was assigned to the Alabang, Muntinlupa City branch. Maricel
Arcilla (Maricel), Marlon's wife, was hired on 12 November 2000 and was assigned to the Salcedo Village, Makati City branch. After several years,
both Marlon and Maricel were promoted as senior hair stylists earning a monthly salary of P11,672.00 plus commissions from customers and sale of
products.

Sometime in September 2014, Zulisibs, through its officers, received information that Marlon was establishing a beauty salon somewhere in Daang
Hari, Alabang, Muntinlupa City, near the Piandre Salon where Marlon was working.

On 6 September 2014, Marlon received a notice from Piandre and Francisco placing Marlon under preventive suspension from 6 to 14 September
2014 and requiring him to appear on 12 September 2014 at Francisco's office in Sta. Ana, Manila.

During the 12 September 2014 investigative hearing, Marlon was accused of, among other things, being involved in the opening of a salon near
Piandre Alabang. Marlon denied that he had an agreement or contract with the owner of the salon along Daang Hari, Alabang. However, he admitted
the following: (1) that he extended help to the salon owner who happens to be his brother-in-law; (2) that he called up two former employees of
Piandre and recommended them to his brother-in-law; and (3) that he gave P50,000.00 to the salon owner which amount was a portion of the
P250,000.00 loan he borrowed from the employees' cooperative of Piandre.[4]

Further investigation revealed that Marlon was often absent from work and whenever he was working, he would entertain phone calls, thus,
disrupting his work. He would be absent on days when he would be the only stylist available. Francisco and other supervisors of Piandre verified the
existence of a new salon along Daang Hari, Alabang and alleged that "the interiors of said salon, already with equipment, mirrors and chairs, [sic] all
set to operate, with towels folded and presented the 'Piandre' way."[5] They also learned from neighboring establishments that the salon was set to
open on 8 September 2014.

On 11 September 2014, Maricel received a notice from Piandre and Francisco, asking her to explain her alleged involvement with her husband,
Marlon, in setting up a salon along Daang Hari, Alabang and requiring her to appear on 13 September 2014 at the Sta. Ana office. On 14 September
2014, Maricel received a notice placing her under preventive suspension from 14 September to 13 October 2014.

Marlon received a copy of his notice of termination on 14 September 2014. Maricel received her notice of termination on 26 September 2014. Both
were found guilty of violating Piandre's Code of Discipline 3F No. 2: Pagkawala ng tiwala dahil sa ginawang masama.

Subsequently, Marlon and Maricel filed two separate complaints[6] for illegal dismissal, underpayment of wages, non-payment of overtime pay,
service incentive leave, 13th month pay, Emergency Cost of Living Allowance, and separation pay, and illegal suspension, with prayer for moral and
exemplary damages, and attorney's fees.
The Ruling of the Labor Arbiter

On 9 March 2015, the Labor Arbiter rendered a Decision[7] dismissing Marlon and Maricel's complaints for lack of merit. The Labor Arbiter held that:
WHEREFORE, the complaint[s] for illegal dismissal and x x x money claims [are] DISMISSED for lack of merit.[8]

The Ruling of the NLRC

On 30 April 2015, the NLRC denied Marlon and Maricel's appeal and affirmed the Labor Arbiter's decision. The NLRC held that:
WHEREFORE, premises considered, Complainants-Appellants' appeal is hereby DENIED. The March 9, 2015 Decision of Labor Arbiter Gaudencio
P. Demaisip, Jr. is hereby AFFIRMED.[9]

On 26 June 2015, Marlon and Maricel's Motion for Reconsideration[10] was denied by the NLRC for lack of merit, holding that "The resolution of [the]
Commission dated April 30, 2015 STANDS undisturbed."[11]
The Ruling of the Court of Appeals

On 10 February 2016, Marlon and Maricel's petition for certiorari under Rule 65 was partially granted. Marlon's termination was held to be valid. As to
Maricel, the Court of Appeals held that the NLRC and the Labor Arbiter erred in upholding the legality of her dismissal. The dispositive portion of the
Decision[12] reads:
WHEREFORE, the petition is PARTIALLY GRANTED. The Resolutions dated April 30, 2015 and June 26, 2015 of public respondent National Labor
Relations Commission, Third Division, in NLRC LAC No. 04-001028-15/NLRC NCR No. 10-12582-14 are hereby AFFIRMED with MODIFICATIONS,
in that the private respondents are ORDERED to pay MARICEL ARCILLA the following:
1) Backwages and all other benefits from September 26, 2014 until finality of this Decision;
2) Separation pay equivalent to one (1) month salary for every year of service;
3) Moral and exemplary damages in the amount of Php 50,000.00
4) Attorney's fees equivalent to ten percent (10%) of the total monetary award; and
5) Legal interest of six percent (6%) per annum  on the total monetary awards from the finality of this Decision until full payment thereof.

The appropriate Computation Division of the National Labor Relations Commission is hereby ordered to COMPUTE and UPDATE the award as
herein determined WITH DISPATCH.

All other aspects of the assailed Resolutions STAND.

SO ORDERED.[13]

The Issues

Marlon presents the following issues:

1. Whether the Court of Appeals erred in upholding the two resolutions of the NLRC, finding Marlon's dismissal to be valid and for just cause, and
effected after due notice and hearing; and

2. Whether the Court of Appeals gravely erred in upholding the two resolutions of the NLRC, finding that Marlon was not entitled to his money claims.
The Ruling of this Court

We deny the petition.

Dismissals under the Labor Code have two facets: the legality of the act of dismissal, which constitutes substantive due process; and the legality of
the manner of dismissal, which constitutes procedural due process.[14]

In this case, we do not dispute the findings of the Labor Arbiter, the NLRC, and the Court of Appeals that the manner of Marlon's dismissal was legal
and in accordance with law.[15] The requirement of procedural due process was met when Marlon was served with a first written notice containing the
specific causes or grounds for his termination, when Marlon was called to attend an investigative hearing to explain his side, and when Marlon was
served with a second written notice containing the justification for his termination.

Thus, the only issue to be resolved is the legality of the act of dismissal by re-examining the facts and evidence on record. Given that this Court is
not a trier of facts, and the scope of its authority under Rule 45 of the Rules of Court is confined only to errors of law and does not extend to
questions of fact, which are for labor tribunals to resolve, one of the recognized exceptions to the rule is when the factual findings and conclusion of
the labor tribunals are contradictory or inconsistent with those of the Court of Appeals.[16] In this case, however, the factual findings and conclusion of
the labor tribunals and the Court of Appeals regarding Marlon's dismissal are consistent and one. As to Maricel, the decision in her favor was not
appealed to us anymore. Thus, the decision of the Court of Appeals insofar as Maricel is concerned is final and executory.

Respondents Zulisibs, Francisco, and Piandre alleged that Marlon committed serious misconduct or willful disobedience of the company's lawful
orders, and of fraud or willful breach of the trust reposed in him by the company when he helped his brother-in-law open a salon along Daang Hari,
Alabang. They justified Marlon's dismissal by citing paragraphs (a) and (c), Article 297 of the Labor Code.[17] The provision reads:
Article 297. TERMINATION BY EMPLOYER.  An employer may terminate an employee for any of the following causes:

(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work.

(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative.
The Labor Arbiter, the NLRC, and the Court of Appeals all held that the respondents presented substantial evidence to justify Marlon's dismissal. We
affirm all the rulings. We adopt in toto the Court of Appeals' decision with regard to Marlon's dismissal. It held:
From the facts and circumstances obtaining with respect to petitioner Marlon Arcilla, there exists a valid cause in terminating his employment. It was
clearly stated in paragraph 8 of the Agreement or "Kasunduan"  signed by petitioners that they are prohibited from setting up or being involved in a
business similar to that of private respondents' during the course of their employment. Considering that the petitioners have neither controverted nor
denied the existence of the Kasunduan,  they are therefore bound by the terms and conditions thereof. Petitioners cannot likewise deny the existence
of the Code of Discipline and feign ignorance of the offense they committed and its corresponding penalty by holding that the private respondents did
not present a copy of said Code in the proceedings below. They are deemed to have acknowledged the existence of said Code and presumed to
have understood the provisions contained therein when they signed the Kasunduan  and agreed to abide by the Code of Discipline and the rules and
regulations of the company in paragraph 2 of their agreement. As private respondents' trusted Senior Hairstylists for quite a number of years, it is
incumbent upon them to have read and understood its provisions and be fully aware of the prohibitions and penalties imposed upon erring
employees.

Collorarily, as briefly summed up by the public respondent, petitioners were later discovered to be involved in setting up another salon near the
private respondents' salon in Alabang, albeit the involvement was only indirect by means of extending a Php50,000.00 financial assistance to the
owner of the new salon who happens to be the brother-in-law of Marlon or his wife Maricel's brother. We agree with public respondent that it is
immaterial whether the new salon was under the petitioners' name or not, or that they established a salon of their own. The important fact remains
that petitioner Marlon made an admission that he gave funds to his brother-in-law for the new salon in Alabang which directly competes with the
business of his employer. It is not disputed that the new beauty salon is located less than a kilometer away from Piandre Salon in Alabang.

Furthermore, Marlon's admission susbtantially proves two things: 1) that a new salon has indeed been established; and 2) that he willfully disobeyed
his contract of employment with the private respondents. His involvement in setting up a competing salon, which albeit indirect, constitutes serious
misconduct because of his blatant disregard [of] the terms and conditions of his contract/agreement with the private respondents. His act of allowing
himself to be involved with his brother-in-law's business displays an act of disloyalty to the company which is likewise sufficient to warrant his
dismissal for loss of trust and confidence. To our mind, his apology in his written letter to private respondent Francisco [was] a mere afterthought
after realizing the gravity of his offense after he became the subject of an investigation by the private respondents. Substantial proof, and not clear
and convincing evidence or proof beyond reasonable doubt, is a sufficient basis for the imposition of any disciplinary action upon the employee. The
standard of substantial evidence is satisfied where the employer has reasonable ground to believe that the employee is responsible for the
misconduct that renders the latter unworthy of the trust and confidence demanded by his or her position.[18] (Emphasis supplied)

All told, there is sufficient basis to dismiss Marlon on the grounds of serious misconduct or willful disobedience of the company's lawful orders, and of
fraud or willful breach of the trust reposed in him by the company when he helped his brother-in-law open a salon along Daang Hari, Alabang. The
Court of Appeals acted in accordance with the evidence on record and case law when it affirmed and upheld the resolutions of the NLRC.

WHEREFORE, the petition is DENIED for lack of merit.

SO ORDERED.

[ G.R. No. 178083, March 13, 2018 ]

FLIGHT ATTENDANTS AND STEWARDS ASSOCIATION OF THE PHILIPPINES (FASAP), PETITIONER, VS. PHILIPPINE AIRLINES, INC.,
PATRIA CHIONG AND THE COURT OF APPEALS, RESPONDENTS.

[A.M. No. 11-10-1-SC]

IN RE: LETTERS OF ATTY. ESTELITO P. MENDOZA RE: G.R. NO. 178083 - FLIGHT ATTENDANTS AND STEWARDS ASSOCIATION OF THE
PHILIPPINES (FASAP) VS. PHILIPPINE AIRLINES, INC., ET AL.

R E S O L U T I O N

BERSAMIN, J.:

In determining the validity of a retrenchment, judicial notice may be taken of the financial losses incurred by an employer undergoing corporate
rehabilitation. In such a case, the presentation of audited financial statements may not be necessary to establish that the employer is suffering from
severe financial losses.

Before the Court are the following matters for resolution, namely:
(a) Motion for Reconsideration of the Resolution of October 2, 2009 and Second Motion for Reconsideration of the Decision of July 22, 2008 filed
by respondents Philippine Airlines, Inc. (PAL) and Patria Chiong;[1] and
(b) Motion for Reconsideration [Re: The Honorable Court's Resolution dated 13 March 2012][2] of petitioner Flight Attendants and Stewards
Association of the Philippines (FASAP).
Antecedents

To provide a fitting backgrounder for this resolution, we first lay down the procedural antecedents.

Resolving the appeal of FASAP, the Third Division of the Court[3] promulgated its decision on July 22, 2008 reversing the decision promulgated on
August 23, 2006 by the Court of Appeals (CA) and entering a new one finding PAL guilty of unlawful retrenchment,[4] disposing:
WHEREFORE, the instant petition is GRANTED. The assailed Decision of the Court of Appeals in CA-G.R. SP No. 87956 dated August 23, 2006,
which affirmed the Decision of the NLRC setting aside the Labor Arbiter's findings of illegal retrenchment and its Resolution of May 29, 2007 denying
the motion for reconsideration, are REVERSED and SET ASIDE and a new one is rendered:
1. FINDING respondent Philippine Airlines, Inc. GUILTY of illegal dismissal;

2. ORDERING Philippine Airlines, Inc. to reinstate the cabin crew personnel who were covered by the retrenchment and demotion scheme of June
15, 1998 made effective on July 15, 1998, without loss of seniority rights and other privileges, and to pay them full backwages, inclusive of
allowances and other monetary benefits computed from the time of their separation up to the time of their actual reinstatement, provided that with
respect to those who had received their respective separation pay, the amounts of payments shall be deducted from their backwages. Where
reinstatement is no longer feasible because the positions previously held no longer exist, respondent Corporation shall pay backwages plus, in lieu
of reinstatement, separation pay equal to one (1) month pay for every year of service;

3. ORDERING Philippine Airlines, Inc. to pay attorney's fees equivalent to ten percent (10%) of the total monetary award.

Costs against respondent PAL.

SO ORDERED.[5]
The Third Division thereby differed from the decision of the Court of Appeals (CA), which had pronounced in its appealed decision promulgated on
August 23, 2006[6] that the remaining issue between the parties concerned the manner by which PAL had carried out the retrenchment program.
[7]
 Instead, the Third Division disbelieved the veracity of PAL's claim of severe financial losses, and concluded that PAL had not established its
severe financial losses because of its non-presentation of audited financial statements. It further concluded that PAL had implemented the
retrenchment program in bad faith, and had not used fair and reasonable criteria in selecting the employees to be retrenched.

After PAL filed its Motion for Reconsideration,[8] the Court, upon motion,[9] held oral arguments on the following issues:
I

WHETHER THE GROUNDS FOR RETRENCHMENT WERE ESTABLISHED

II

WHETHER PAL RESORTED TO OTHER COST-CUTTING MEASURES BEFORE IMPLEMENTING ITS RETRENCHMENT PROGRAM
III

WHETHER FAIR AND REASONABLE CRITERIA WERE FOLLOWED IN IMPLEMENTING THE RETRENCHMENT PROGRAM
IV

WHETHER THE QUITCLAIMS WERE VALIDLY AND VOLUNTARILY EXECUTED

Upon conclusion of the oral arguments, the Court directed the parties to explore a possible settlement and to submit their respective memoranda.[10]

Unfortunately, the parties did not reach any settlement; hence, the Court, through the Special Third Division,[11] resolved the issues on the merits
through the resolution of October 2, 2009 denying PAL's motion for reconsideration,[12] thus:
WHEREFORE, for lack of merit, the Motion for Reconsideration is hereby DENIED with FINALITY. The assailed Decision dated July 22, 2008
is AFFIRMED with MODIFICATION in that the award of attorney's fees and expenses of litigation is reduced to P2,000,000.00. The case is
hereby REMANDED to the Labor Arbiter solely for the purpose of computing the exact amount of the award pursuant to the guidelines herein stated.

No further pleadings will be entertained.

SO ORDERED.[13]
The Special Third Division was unconvinced by PAL's change of theory in urging the June 1998 Association of Airline Pilots of the Philippines
(ALPAP) pilots' strike as the reason behind the immediate retrenchment; and observed that the strike was a temporary occurrence that did not
require the immediate and sweeping retrenchment of around 1,400 cabin crew.

Not satisfied, PAL filed the Motion for Reconsideration of the Resolution of October 2, 2009 and Second Motion for Reconsideration of the Decision
of July 22, 2008.[14]

On October 5, 2009, the writer of the resolution of October 2, 2009 Justice Consuelo Ynares-Santiago, compulsorily retired from the Judiciary.
Pursuant to A.M. No. 99-8-09-SC,[15] G.R. No. 178083 was then raffled to Justice Presbitero J. Velasco, Jr., a Member of the newly-constituted
regular Third Division.[16] Upon the Court's subsequent reorganization,[17] G.R. No. 178083 was transferred to the First Division where Justice
Velasco, Jr. was meanwhile re-assigned. Justice Velasco, Jr. subsequently inhibited himself from the case due to personal reasons.[18] Pursuant to
SC Administrative Circular No. 84-2007, G.R. No. 178083 was again re-raffled to Justice Arturo D. Brion, whose membership in the Second Division
resulted in the transfer of G.R. No. 178083 to said Division.[19]

On September 7, 2011, the Second Division denied with finality PAL's Second Motion for Reconsideration of the Decision of July 22, 2008.[20]

Thereafter, PAL, through Atty. Estelito P. Mendoza, its collaborating counsel, sent a series of letters inquiring into the propriety of the successive
transfers of G.R. No. 178083.[21] His letters were docketed as A.M. No. 11-10-1-SC.

On October 4, 2011, the Court En Banc issued a resolution:[22] (a) assuming jurisdiction over G.R. No. 178083; (b) recalling the September 7, 2011
resolution of the Second Division; and (c) ordering the re-raffle of G.R. No. 178083 to a new Member-in-Charge.

Resolving the issues raised by Atty. Mendoza in behalf of PAL, as well as the issues raised against the recall of the resolution of September 7, 2011,
the Court En Banc promulgated its resolution in A.M. No. 11-10-1-SC on March 13, 2012,[23] in which it summarized the intricate developments
involving G.R. No. 178083, viz.:
To summarize all the developments that brought about the present dispute-expressed in a format that can more readily be appreciated in terms of
the Court en banc's ruling to recall the September 7, 2011 ruling - the FASAP case, as it developed, was attended by special and unusual
circumstances that saw:

(a) the confluence of the successive retirement of three Justices (in a Division of five Justices) who actually participated in the assailed Decision and
Resolution;

(b) the change in the governing rules-from the A.M.s to the IRSC regime-which transpired during the pendency of the case;

(c) the occurrence of a series of inhibitions in the course of the case (Justices Ruben Reyes, Leonardo-De Castro, Corona, Velasco, and Carpio),
and the absences of Justices Sereno and Reyes at the critical time, requiring their replacement; notably, Justices Corona, Carpio, Velasco and
Leonardo-De Castro are the four most senior Members of the Court;

(d) the three re-organizations of the divisions, which all took place during the pendency of the case, necessitating the transfer of the case from the
Third Division, to the First, then to the Second Division;

(e) the unusual timing of Atty. Mendoza's letters, made after the ruling Division had issued its Resolution of September 7, 2011, but before the
parties received their copies of the said Resolution; and

(f) finally, the time constraint that intervened, brought about by the parties' receipt on September 19, 2011 of the Special Division's Resolution of
September 7, 2011, and the consequent running of the period for finality computed from this latter date; and the Resolution would have lapsed to
finality after October 4, 2011, had it not been recalled by that date.

All these developments, in no small measure, contributed in their own peculiar way to the confusing situations that attended the September 7, 2011
Resolution, resulting in the recall of this Resolution by the Court en banc.[24]
In the same resolution of March 13, 2012, the Court En Banc directed the re-raffle of G.R. No. 178083 to the remaining Justices of the former
Special Third Division who participated in resolving the issues pursuant to Section 7, Rule 2 of the Internal Rules of the Supreme Court, explaining:
On deeper consideration, the majority now firmly holds the view that Section 7, Rule 2 of the IRSC should have prevailed in considering the raffle
and assignment of cases after the 2nd MR was accepted, as advocated by some Members within the ruling Division, as against the general rule on
inhibition under Section 3, Rule 8. The underlying constitutional reason, of course, is the requirement of Section 4(3), Article VIII of the Constitution
already referred to above.

The general rule on statutory interpretation is that apparently conflicting provisions should be reconciled and harmonized, as a statute must be so
construed as to harmonize and give effect to all its provisions whenever possible. Only after the failure at this attempt at reconciliation should one
provision be considered the applicable provision as against the other.

Applying these rules by reconciling the two provisions under consideration, Section 3, Rule 8 of the IRSC should be read as the general rule
applicable to the inhibition of a Member-in-Charge.This general rule should, however, yield where the inhibition occurs at the late stage of the case
when a decision or signed resolution is assailed through an MR. At that point, when the situation calls for the review of the merits of the decision or
the signed resolution made by a ponente (or writer of the assailed ruling), Section 3, Rule 8 no longer applies and must yield to Section 7, Rule 2 of
the IRSC which contemplates a situation when the ponente is no longer available, and calls for the referral of the case for raffle among the remaining
Members of the Division who acted on the decision or on the signed resolution. This latter provision should rightly apply as it gives those who
intimately know the facts and merits of the case, through their previous participation and deliberations, the chance to take a look at the decision or
resolution produced with their participation.

To reiterate, Section 3, Rule 8 of the IRSC is the general rule on inhibition, but it must yield to the more specific Section 7, Rule 2 of the IRSC where
the obtaining situation is for the review on the merits of an already issued decision or resolution and the ponente or writer is no longer available to act
on the matter. On this basis, the ponente, on the merits of the case on review, should be chosen from the remaining participating Justices, namely,
Justices Peralta and Bersamin.[25]
This last resolution impelled FASAP to file the Motion for Reconsideration [Re: The Honorable Court's Resolution dated 13 March 2012], praying that
the September 7, 2011 resolution in G.R. No. 178083 be reinstated.[26]

We directed the consolidation of G.R. No. 178083 and A.M. No. 11-10-1-SC on April 17, 2012.[27]

Issues

PAL manifests that the Motion for Reconsideration of the Resolution of October 2, 2009 and Second Motion for Reconsideration of the Decision of
July 22, 2008 is its first motion for reconsideration vis-a-vis the October 2, 2009 resolution, and its second as to the July 22, 2008 decision. It states
therein that because the Court did not address the issues raised in its previous motion for reconsideration, it is re-submitting the same, viz.:
I

xxx THE HONORABLE COURT ERRED IN NOT GIVING CREDENCE TO THE FOLLOWING COMPELLING EVIDENCE AND CIRCUMSTANCES
CLEARLY SHOWING PALS; DIRE FINANCIAL CONDITION AT THE TIME OF THE RETRENCHMENT: (A) PETITIONER'S ADMISSIONS OF
PAL'S FINANCIAL LOSSES; (B) THE UNANIMOUS FINDINGS OF THE SECURITIES AND EXCHANGE COMMISSION (SEC), THE LABOR
ARBITER, THE NATIONAL LABOR RELATIONS COMMISSION (NLRC) AND THE COURT OF APPEALS CONFIRMING PAL'S FINANCIAL
CRISIS; (C) PREVIOUS CASES DECIDED BY THE HONORABLE COURT RECOGNIZING PAL'S DIRE FINANCIAL STATE; AND (D) PAL BEING
PLACED BY THE SEC UNDER SUSPENSION OF PAYMENTS AND CORPORATE REHABILITATION AND RECEIVERSHIP
II

xxx THERE IS NO SUFFICIENT BASIS FOR THE HONORABLE COURT'S CONCLUSION THAT PAL DID NOT EXERCISE GOOD FAITH [IN] ITS
PREROGATIVE TO RETRENCH EMPLOYEES
III

THE HONORABLE COURT'S RULING THAT PAL DID NOT USE FAIR AND REASONABLE CRITERIA IN ASCERTAINING WHO WOULD BE
RETRENCHED IS CONTRARY TO ESTABLISHED FACTS, EVIDENCE ON RECORD AND THE FINDINGS OF THE NLRC AND THE COURT OF
APPEALS[28]
PAL insists that FASAP, while admitting PAL's serious financial condition, only questioned before the Labor Arbiter the alleged unfair and
unreasonable measures in retrenching the employees;[29] that FASAP categorically manifested before the NLRC, the CA and this Court that PAL's
financial situation was not the issue but rather the manner of terminating the 1,400 cabin crew; that the Court's disregard of FASAP's categorical
admissions was contrary to the dictates of fair play;[30] that considering that the Labor Arbiter, the NLRC and the CA unanimously found PAL to have
experienced financial losses, the Court should have accorded such unanimous findings with respect and finality;[31] that its being placed under
suspension of payments and corporate rehabilitation and receivership already sufficiently indicated its grave financial condition;[32] and that the Court
should have also taken judicial notice of the suspension of payments and monetary claims filed against PAL that had reached and had been
consequently resolved by the Court.[33]
PAL describes the Court's conclusion that it was not suffering from tremendous financial losses because it was on the road to recovery a year after
the retrenchment as a mere obiter dictum that was relevant only in rehabilitation proceedings; that whether or not its supposed "stand-alone"
rehabilitation indicated its ability to recover on its own was a technical issue that the SEC was tasked to determine in the rehabilitation proceedings;
that at any rate, the supposed track to recovery in 1999 and the capital infusion of $200,000,000.00 did not disprove the enormous losses it was
sustaining; that, on the contrary, the capital infusion accented the severe financial losses suffered because the capital infusion was a condition
precedent to the approval of the amended and restated rehabilitation plan by the Securities and Exchange Commission (SEC) with the conformity of
PAL's creditors; and that PAL took nine years to exit from rehabilitation.[34]

As regards the implementation of the retrenchment program in good faith, PAL argues that it exercised sound management prerogatives and
business judgment despite its critical financial condition; that it did not act in due haste in terminating the services of the affected employees
considering that FASAP was being consulted thereon as early as February 17, 1998; that it abandoned "Plan 14" due to intervening events, and
instead proceeded to implement "Plan 22" which led to the recall/rehire of some of the retrenched employees;[35] and that in selecting the employees
to be retrenched, it adopted a fair and reasonable criteria pursuant to the collective bargaining agreement (CBA) where performance efficiency
ratings and inverse seniority were basic considerations.[36]

With reference to the Court's resolution of October 2, 2009, PAL maintains that:
I

PAL HAS NOT CHANGED ITS POSITION THAT THE REDUCTION OF PAL'S LABOR FORCE OF ABOUT 5,000 EMPLOYEES, INCLUDING THE
1,423 FASAP MEMBERS, WAS THE RESULT OF A CONFLUENCE OF EVENTS, THE EXPANSION OF PAL'S FLEET, THE ASIAN FINANCIAL
CRISIS OF 1997, AND ITS CONSEQUENCES ON PAL'S OPERATIONS, AND THE PILOT'S STRIKE OF JUNE 1998, AND THAT PAL SURVIVED
BECAUSE OF THE IMPLEMENTATION OF ITS REHABILITATION PLAN (LATER "AMENDED AND RESTATED REHABILITATION PLAN")
WHICH INCLUDED AMONG ITS COMPONENT ELEMENTS, THE REDUCTION OF LABOR FORCE
II

THE HONORABLE COURT SHOULD HAVE UPHELD PAL'S REDUCTION OF THE NUMBER OF CABIN CREW IN ACCORD WITH ITS ENTRY
INTO REHABILITATION AND THE CONSEQUENT TERMINATION OF EMPLOYMENT OF CABIN CREW PERSONNEL AS A VALID EXERCISE
OF MANAGEMENT PREROGATIVE
III

PAL HAS SUFFICIENTLY ESTABLISHED THE SEVERITY OF ITS FINANCIAL LOSSES, SO AS TO JUSTIFY THE ENTRY INTO
REHABILITATION AND THE CONSEQUENT REDUCTION OF CABIN CREW PERSONNEL
IV

THE HONORABLE COURT ERRED IN HOLDING THAT THERE WAS NO SUFFICIENT BASIS FOR PAL TO IMPLEMENT THE RETRENCHMENT
OF CABIN CREW PERSONNEL
V

UNDER THE CIRCUMSTANCES, THE PRIOR IMPLEMENTATION OF LESS DRASTIC COST-CUTTING MEASURES WAS NO LONGER
POSSIBLE AND SHOULD NOT BE REQUIRED FOR A VALID RETRENCHMENT; IN ANY EVENT, PAL HAD IMPLEMENTED LESS DRASTIC
COST-CUTTING MEASURES BEFORE IMPLEMENTING THE DOWNSIZING PROGRAM
VI

QUITCLAIMS WERE VALIDLY EXECUTED[37]

PAL contends that the October 2, 2009 resolution focused on an entirely new basis that of PAL's supposed change in theory. It denies having
changed its theory, however, and maintains that the reduction of its workforce had resulted from a confluence of several events, like the flight
expansion; the 1997 Asian financial crisis; and the ALPAP pilots' strike.[38] PAL explains that when the pilots struck in June 1998, it had to decide
quickly as it was then facing closure in 18 days due to serious financial hemorrhage; hence, the strike came as the final blow.

PAL posits that its business decision to downsize was far from being a hasty, knee-jerk reaction; that the reduction of cabin crew personnel was an
integral part of its corporate rehabilitation, and, such being a management decision, the Court could not supplant the decision with its own judgment'
and that the inaccurate depiction of the strike as a temporary disturbance was lamentable in light of its imminent financial collapse due to the
concerted action.[39]

PAL submits that the Court's declaration that PAL failed to prove its financial losses and to explore less drastic cost-cutting measures did not at all
jibe with the totality of the circumstances and evidence presented; that the consistent findings of the Labor Arbiter, the NLRC, the CA and even the
SEC, acknowledging its serious financial difficulties could not be ignored or disregarded; and that the challenged rulings of the Court conflicted with
the pronouncements made in Garcia v. Philippine Airlines, Inc.[40] and related cases[41] that acknowledged PAL's grave financial distress.

In its comment,[42] FASAP counters that a second motion for reconsideration was a prohibited pleading; that PAL failed to prove that it had complied
with the requirements for a valid retrenchment by not submitting its audited financial statements; that PAL had immediately terminated the
employees without prior resort to less drastic measures; and that PAL did not observe any criteria in selecting the employees to be retrenched.

FASAP stresses that the October 4, 2011 resolution recalling the September 7, 2011 decision was void for failure to comply with Section 14, Article
VIII of the 1987 Constitution; that the participation of Chief Justice Renato C. Corona who later on inhibited from G.R. No. 178083 had further voided
the proceedings; that the 1987 Constitution did not require that a case should be raffled to the Members of the Division who had previously decided
it; and that there was no error in raffling the case to Justice Brion, or, even granting that there was error, such error was merely procedural.

The issues are restated as follows:

Procedural

I
IS THE RESOLUTION DATED OCTOBER 4, 2011 IN A.M. NO. 11-10-1-SC (RECALLING THE SEPTEMBER 7, 2011 RESOLUTION) VOID FOR
FAILURE TO COMPLY WITH SECTION 14, RULE VIII OF THE 1987 CONSTITUTION?
II

MAY THE COURT ENTERTAIN THE SECOND MOTION FOR RECONSIDERATION FILED BY THE RESPONDENT PAL?
Substantive

I
DID PAL LAWFULLY RETRENCH THE 1,400 CABIN CREW PERSONNEL?
A

DID PAL PRESENT SUFFICIENT EVIDENCE TO PROVE THAT IT INCURRED SERIOUS FINANCIAL LOSSES WHICH JUSTIFIED THE
DOWNSIZING OF ITS CABIN CREW?
B

DID PAL OBSERVE GOOD FAITH IN IMPLEMENTING THE RETRENCHMENT PROGRAM?

C

DID PAL COMPLY WITH SECTION 112 OF THE PAL-FASAP CBA IN SELECTING THE EMPLOYEES TO BE RETRENCHED?
III

ASSUMING THAT PAL VALIDLY IMPLEMENTED ITS RETRENCHMENT PROGRAM, DID THE RETRENCHED EMPLOYEES SIGN VALID
QUITCLAIMS?
Ruling of the Court

After a thorough review of the records and all previous dispositions, we GRANT the Motion for Reconsideration of the Resolution of October 2, 2009
and Second Motion for Reconsideration of the Decision of July 22, 2008 filed by PAL and Chiong; and DENY the Motion for Reconsideration [Re:
The Honorable Court's Resolution dated 13 March 2012][43] of FASAP.

Accordingly, we REVERSE the July 22, 2008 decision and the October 2, 2009 resolution; and AFFIRM the decision promulgated on August 23,
2006 by the CA.
I

The resolution of October 4, 2011 was a valid issuance of the Court

The petitioner urges the Court to declare as void the October 4, 2011 resolution promulgated in A.M. No. 11-10-1-SC for not citing any legal basis in
recalling the September 7, 2011 resolution of the Second Division.

The urging of the petitioner is gravely flawed and mistaken.

The requirement for the Court to state the legal and factual basis for its decisions is found in Section 14, Article VIII of the 1987 Constitution, which
reads:
Section 14. No decision shall be rendered by any court without expressing therein clearly and distinctly the facts and the law on which it is based.
The constitutional provision clearly indicates that it contemplates only a decision, which is the judgment or order that adjudicates on the merits of a
case. This is clear from the text and tenor of Section 1, Rule 36 of the Rules of Court, the rule that implements the constitutional provision, to wit:
Section 1. Rendition of judgments and final orders. A judgment or final order determining the merits of the case shall be in writing personally and
directly prepared by the judge, stating clearly and distinctly the facts and the law on which it is based, signed by him, and filed with the clerk of court.
The October 4, 2011 resolution did not adjudicate on the merits of G.R. No. 178083. We explicitly stated so in the resolution of March 13, 2012.
What we thereby did was instead to exercise the Court's inherent power to recall orders and resolutions before they attain finality. In so doing, the
Court only exercised prudence in order to ensure that the Second Division was vested with the appropriate legal competence in accordance with and
under the Court's prevailing internal rules to review and resolve the pending motion for reconsideration. We rationalized the exercise thusly:
As the narration in this Resolution shows, the Court acted on its own pursuant to its power to recall its own orders and resolutions before their
finality. The October 4, 2011 Resolution was issued to determine the propriety of the September 7, 2011 Resolution given the facts that came to light
after the ruling Division's examination of the records. To point out the obvious, the recall was not a ruling on the merits and did not constitute the
reversal of the substantive issues already decided upon by the Court in the FASAP case in its previously issued Decision (of July 22, 2008) and
Resolution (of October 2, 2009). In short, the October 4, 2011 Resolution was not meant and was never intended to favor either party, but to simply
remove any doubt about the validity of the ruling Division's action on the case. The case, in the ruling Division's view, could be brought to the
Court en banc since it is one of "sufficient importance"; at the very least, it involves the interpretation of conflicting provisions of the IRSC with
potential jurisdictional implications.

At the time the Members of the ruling Division went to the Chief Justice to recommend a recall, there was no clear indication of how they would
definitively settle the unresolved legal questions among themselves. The only matter legally certain was the looming finality of the September 7,
2011 Resolution if it would not be immediately recalled by the Court en banc by October 4, 2011. No unanimity among the Members of the ruling
Division could be gathered on the unresolved legal questions; thus, they concluded that the matter is best determined by the Court en banc as it
potentially involved questions of jurisdiction and interpretation of conflicting provisions of the IRSC. To the extent of the recommended recall, the
ruling Division was unanimous and the Members communicated this intent to the Chief Justice in clear and unequivocal terms.[44] (Bold underscoring
for emphasis)
It should further be clear from the same March 13, 2012 resolution that the factual considerations for issuing the recall order were intentionally
omitted therefrom in obeisance to the prohibition against public disclosure of the internal deliberations of the Court.[45]

Still, FASAP assails the impropriety of the recall of the September 7, 2011 resolution. It contends that the raffle of G.R. No. 178083 to the Second
Division had not been erroneous but in "full and complete consonance with Section 4(3) Article VIII of the Constitution;"[46] and that any error thereby
committed was only procedural, and thus a mere "harmless error" that did not invalidate the prior rulings made in G.R. No. 178083.[47]
The contention of FASAP lacks substance and persuasion.

The Court carefully expounded in the March 13, 2012 resolution on the resulting jurisdictional conflict that arose from the raffling
of G.R. No. 178083 resulting from the successive retirements and inhibitions by several Justices who at one time or another had been assigned to
take part in the case. The Court likewise highlighted the importance of referring the case to the remaining Members who had actually participated in
the deliberations, for not only did such participating Justices intimately know the facts and merits of the parties' arguments but doing so would give to
such Justices the opportunity to review their decision or resolution in which they had taken part. As it turned out, only Justice Diosdado M. Peralta
and Justice Lucas P. Bersamin were the remaining Members of the Special Third Division, and the task of being in charge procedurally fell on either
of them.[48] As such, it is fallacious for FASAP to still insist that the previous raffle had complied with Section 4(3), Article VIII of the 1987 Constitution
just because the Members of the Division actually took part in the deliberations.

FASAP is further wrong to insist on the application of the harmless error rule. The rule is embodied in Section 6, Rule 51 of the Rules of Court, which
states:
Section 6. Harmless error. No error in either the admission or the exclusion of evidence and no error or defect in any ruling or order or in anything
done or omitted by the trial court or by any of the parties is ground for granting a new trial or for setting aside, modifying, or otherwise disturbing a
judgment or order, unless refusal to take such action appears to the court inconsistent with substantial justice. The court at every stage of the
proceedings must disregard any error or defect which does not affect the substantial rights of the parties.
The harmless error rule obtains during review of the things done by either the trial court or by any of the parties themselves in the course of trial, and
any error thereby found does not affect the substantial rights or even the merits of the case. The Court has had occasions to apply the rule in the
correction of a misspelled name due to clerical error;[49] the signing of the decedents' names in the notice of appeal by the heirs;[50] the trial court's
treatment of the testimony of the party as an adverse witness during cross-examination by his own counsel;[51] and the failure of the trial court to give
the plaintiffs the opportunity to orally argue against a motion.[52] All of the errors extant in the mentioned situations did not have the effect of altering
the dispositions rendered by the respective trial courts. Evidently, therefore, the rule had no appropriate application herein.

The Court sees no justification for the urging of FASAP that the participation of the late Chief Justice Corona voided the recall order. The urging
derives from FASAP's failure to distinguish the role of the Chief Justice as the Presiding Officer of the Banc. In this regard, we advert to the March
13, 2012 resolution, where the Court made the following observation:
A final point that needs to be fully clarified at this juncture, in light of the allegations of the Dissent is the role of the Chief Justice in the recall of the
September 7, 2011 Resolution. As can be seen from the xxx narration, the Chief Justice acted only on the recommendation of the ruling Division,
since he had inhibited himself from participation in the case long before. The confusion on this matter could have been brought about by the Chief
Justice's role as the Presiding Officer of the Court en banc (particularly in its meeting of October 4, 2011), and the fact that the four most senior
Justices of the Court (namely, Justices Corona, Carpio, Velasco and Leonardo-De Castro) inhibited from participating in the case. In the absence of
any clear personal malicious participation, it is neither correct nor proper to hold the Chief Justice personally accountable for the collegial ruling of
the Court en banc.[53] (Bold underscoring supplied for emphasis)
To reiterate, the Court, whether sitting En Banc or in Division, acts as a collegial body. By virtue of the collegiality, the Chief Justice alone cannot
promulgate or issue any decisions or orders. In Complaint of Mr. Aurelio Indencia Arrienda Against SC Justices Puna, Kapunan, Pardo, Ynares
Santiago,[54] the Court has elucidated on the collegial nature of the Court in relation to the role of the Chief Justice, viz.:
The complainant's vituperation against the Chief Justice on account of what he perceived was the latter's refusal "to take a direct positive and
favorable action" on his letters of appeal overstepped the limits of proper conduct. It betrayed his lack of understanding of a fundamental principle in
our system of laws. Although the Chief Justice is primus inter pares, he cannot legally decide a case on his own because of the Court's nature as a
collegial body. Neither can the Chief Justice, by himself, overturn the decision of the Court, whether of a division or the en banc.

There is only one Supreme Court from whose decisions all other courts are required to take their bearings. While most of the Court's work is
performed by its three divisions, the Court remains one court-single, unitary, complete and supreme. Flowing from this is the fact that, while
individual justices may dissent or only partially concur, when the Court states what the law is, it speaks with only one voice. Any doctrine or principle
of law laid down by the court may be modified or reversed only by the Court en banc.[55]
Lastly, any lingering doubt on the validity of the recall order should be dispelled by the fact that the Court upheld its issuance of the order through the
March 13, 2012 resolution, whereby the Court disposed:
WHEREFORE, premises considered, we hereby confirm that the Court en banc has assumed jurisdiction over the resolution of the merits of the
motions for reconsideration of Philippine Airlines, Inc., addressing our July 22, 2008 Decision and October 2, 2009 Resolution; and that the
September 7, 2011 ruling of the Second Division has been effectively recalled. This case should now be raffled either to Justice Lucas P. Bersamin
or Justice Diosdado M. Peralta (the remaining members of the case) as Member-in-Charge in resolving the merits of these motions.

xxxx

The Flight Attendants and Stewards Association of the Philippines' Motion for Reconsideration of October 17, 2011 is hereby denied; the recall of the
September 7, 2011 Resolution was made by the Court on its own before the ruling's finality pursuant to the Court's power of control over its orders
and resolutions. Thus, no due process issue ever arose.

SO ORDERED.
II

PAL's Second Motion for Reconsideration of the Decision of July 22, 2008 could be allowed in the higher interest of justice

FASAP asserts that PAL's Second Motion for Reconsideration of the Decision of July 22, 2008 was a prohibited pleading; and that the July 22, 2008
decision was not anymore subject to reconsideration due to its having already attained finality.

FASAP's assertions are unwarranted.

With the Court's resolution of January 20, 2010 granting PAL's motion for leave to file a second motion for reconsideration,[56] PAL's Second Motion
for Reconsideration of the Decision of July 22, 2008 could no longer be challenged as a prohibited pleading. It is already settled that the granting of
the motion for leave to file and admit a second motion for reconsideration authorizes the filing of the second motion for reconsideration.[57] Thereby,
the second motion for reconsideration is no longer a prohibited pleading, and the Court cannot deny it on such basis alone.[58]
Nonetheless, we should stress that the rule prohibiting the filing of a second motion for reconsideration is by no means absolute. Although Section 2,
Rule 52 of the Rules of Court disallows the filing of a second motion for reconsideration,[59] the Internal Rules of the Supreme Court (IRSC) allows an
exception, to wit:
Section 3. Second motion for reconsideration. The Court shall not entertain a second motion for reconsideration, and any exception to this rule can
only be granted in the higher interest of justice by the Court en banc upon a vote of at least two-thirds of its actual membership. There is
reconsideration "in the higher interest of justice" when the assailed decision is not only legally erroneous, but is likewise patently unjust and
potentially capable of causing unwarranted and irremediable injury or damage to the parties. A second motion for reconsideration can only be
entertained before the ruling sought to be reconsidered becomes final by operation of law or by the Court's declaration.

In the Division, a vote of three Members shall be required to elevate a second motion for reconsideration to the Court en banc.
The conditions that must concur in order for the Court to entertain a second motion for reconsideration are the following, namely:
1. The motion should satisfactorily explain why granting the same would be in the higher interest of justice;
2. The motion must be made before the ruling sought to be reconsidered attains finality;
3. If the ruling sought to be reconsidered was rendered by the Court through one of its Divisions, at least three members of the Division
should vote to elevate the case to the Court En Banc; and
4. The favorable vote of at least two-thirds of the Court En Banc's actual membership must be mustered for the second motion for
reconsideration to be granted.[60]
Under the IRSC, a second motion for reconsideration may be allowed to prosper upon a showing by the movant that a reconsideration of the
previous ruling is necessary in the higher interest of justice. There is higher interest of justice when the assailed decision is not only legally
erroneous, but is likewise patently unjust and potentially capable of causing unwarranted and irremediable injury or damage to the parties.[61]

PAL maintains that the July 22, 2008 decision contravened prevailing jurisprudence[62] that had recognized its precarious financial condition;[63] that
the decision focused on PAL's inability to prove its financial losses due to its failure to submit audited financial statements; that the decision ignored
the common findings on the serious financial losses suffered by PAL made by the Labor Arbiter, the NLRC, the CA and even the SEC;[64] and that
the decision and the subsequent resolution denying PAL's motion for reconsideration would negate whatever financial progress it had achieved
during its rehabilitation.[65]

These arguments of PAL sufficed to show that the assailed decision contravened settled jurisprudence on PAL's precarious financial condition. It
cannot be gainsaid that there were other businesses undergoing rehabilitation that would also be bound or negatively affected by the July 22, 2008
decision. This was the higher interest of justice that the Court sought to address, which the dissent by Justice Leonen is adamant not to accept.
[66]
 Hence, we deemed it just and prudent to allow PAL's Second Motion for Reconsideration of the Decision of July 22, 2008.

It is timely to note, too, that the July 22, 2008 decision did not yet attain finality. The October 4, 2011 resolution recalled the September 7, 2011
resolution denying PAL's first motion for reconsideration. Consequently, the July 22, 2008 decision did not attain finality.

The dissent by Justice Leonen nonetheless proposes a contrary view that both the July 22, 2008 decision and the October 2, 2009 resolution had
become final on November 4, 2009 upon the lapse of 15 days following PAL's receipt of a copy of the resolution. To him, the grant of leave to PAL to
file the second motion for reconsideration only meant that the motion was no longer prohibited but it did not stay the running of the reglementary
period of 15 days. He submits that the Court's grant of the motion for leave to file the second motion for reconsideration did not stop the October 2,
2009 resolution from becoming final because a judgment becomes final by operation of law, not by judicial declaration.[67]

The proposition of the dissent is unacceptable.

In granting the motion for leave to file the second motion for reconsideration, the Court could not have intended to deceive the movants by allowing
them to revel in some hollow victory. The proposition manifestly contravened the basic tenets of justice and fairness.

As we see it, the dissent must have inadvertently ignored the procedural effect that a second motion for reconsideration based on an allowable
ground suspended the running of the period for appeal from the date of the filing of the motion until such time that the same was acted upon and
granted.[68] Correspondingly, granting the motion for leave to file a second motion for reconsideration has the effect of preventing the challenged
decision from attaining finality. This is the reason why the second motion for reconsideration should present extraordinarily persuasive reasons.
Indeed, allowing pro forma motions would indefinitely avoid the assailed judgment from attaining finality.[69]

By granting PAL's motion for leave to file a second motion for reconsideration, the Court effectively averted the July 22, 2008 decision and the
October 2, 2009 resolution from attaining finality. Worthy of reiteration, too, is that the March 13, 2012 resolution expressly recalled the September 7,
2011 resolution.

Given the foregoing, the conclusion stated in the dissent that the Banc was divested of the jurisdiction to entertain the second motion for
reconsideration for being a "third motion for reconsideration;"[70] and the unfair remark in the dissent that "[t]he basis of the supposed residual power
of the Court En Banc to, take on its own, take cognizance of Division cases is therefore suspect"[71] are immediately rejected as absolutely legally
and factually unfounded.

To start with, there was no "third motion for reconsideration" to speak of. The September 11, 2011 resolution denying PAL's second motion for
reconsideration had been recalled by the October 4, 2011 resolution. Hence, PAL's motion for reconsideration remained unresolved, negating the
assertion of the dissent that the Court was resolving the second motion for reconsideration "for the second time."[72]

Also, the dissent takes issue against our having assumed jurisdiction over G.R. No. 178083 despite the clear reference made in the October 4, 2011
resolution to Sections 3(m) and (n), Rule 2 of the IRSC. Relying largely on the Court's construction of Section 4(3), Article VIII of the 1987
Constitution in Fortich v. Corona,[73] the dissent opines that the Banc could not act as an appellate court in relation to the decisions of the Division;
[74]
 and that the Banc could not take cognizance of any case in the Divisions except upon a prior consulta from the ruling Division pursuant to Section
3(m), in relation to Section 3(1), Rule 2 of the IRSC.[75]

The Court disagrees with the dissent's narrow view respecting the residual powers of the Banc.
Fortich v. Corona, which has expounded on the authority of the Banc to accept cases from the Divisions, is still the prevailing jurisprudence
regarding the construction of Section 4(3), Article VIII of the 1987 Constitution. However, Fortich v. Corona does not apply herein. It is notable
that Fortich v. Corona sprung from the results of the voting on the motion for reconsideration filed by the Sumilao Farmers. The vote ended in an
equally divided Division ("two-two"). From there, the Sumilao Farmers sought to elevate the matter to the Banc based on Section 4(3), Article VIII
because the required three-member majority vote was not reached. However, the factual milieu in Fortich v. Corona is not on all fours with that in this
case.

In the March 13, 2012 resolution, the Court recounted the exigencies that had prompted the Banc to take cognizance of the matter, to wit:
On September 28, 2011, the Letters dated September 13 and 20, 2011 of Atty. Mendoza to Atty. Vidal (asking that his inquiry be referred to the
relevant Division Members who took part on the September 7, 2011 Resolution) were "NOTED" by the regular Second Division. The Members of the
ruling Division also met to consider the queries posed by Atty. Mendoza. Justice Brion met with the Members of the ruling Division (composed of
Justices Brion, Peralta, Perez, Bersamin, and Mendoza), rather than with the regular Second Division (composed of Justices Carpio, Brion, Perez,
and Sereno), as the former were the active participants in the September 7, 2011 Resolution.

In these meetings, some of the Members of the ruling Division saw the problems pointed out above, some of which indicated that the ruling Division
might have had no authority to rule on the case. Specifically, their discussions centered on the application of A.M. No. 99-8-09-SC for the incidents
that transpired prior to the effectivity of the IRSC, and on the conflicting rules under the IRSC - Section 3, Rule 8 on the effects of inhibition and
Section 7, Rule 2 on the resolution of MRs.

A.M. No. 99-8-09-SC indicated the general rule that the re-raffle shall be made among the other Members of the same Division who participated in
rendering the decision or resolution and who concurred therein, which should now apply because the ruling on the case is no longer final after the
cast had been opened for review on the merits. In other words, after acceptance by the Third Division, through Justice Velasco, of the 2nd MR, there
should have been a referral to raffle because the excepting qualification that the Clerk of Court cited no longer applied; what was being reviewed
were the merits of the case and the review should be by the same Justices who had originally issued the original Decision and the subsequent
Resolution, or by whoever of these Justices are still left in the Court, pursuant to the same A.M. No. 99-8-09-SC.

On the other hand, the raffle to Justice Brion was made by applying AC No. 84-2007 that had been superseded by Section 3, Rule 8 of the IRSC.
Even the use of this IRSC provision, however, would not solve the problem, as its use still raised the question of the provision that should really
apply in the resolution of the MR: should it be Section 3, Rule 8 on the inhibition of a Member-in-Charge, or Section 7, Rule 2 of the IRSC on the
inhibition of the ponente when an MR of a decision and a signed resolution was filed. xxx
xxxx  xxxx  xxxx

A comparison of these two provisions shows the semantic sources of the seeming conflict: Section 7, Rule 2 refers to a situation where
the ponente has retired, is no longer a Member of the Court, is disqualified, or has inhibited himself from acting on the case; while Section 3, Rule 8
generally refers to the inhibition of a Member-in-Charge who does not need to be the writer of the decision or resolution under review.

Significantly, Section 7, Rule 2 expressly uses the word ponente (not Member-in-Charge) and refers to a specific situation where the ponente (or the
writer of the Decision or the Resolution) is no longer with the Court or is otherwise unavailable to review the decision or resolution he or she wrote.
Section 3, Rule 8, on the other hand, expressly uses the term Member-in-Charge and generally refers to his or her inhibition, without reference to the
stage of the proceeding when the inhibition is made.

Under Section 7, Rule 2, the case should have been re-raffled and assigned to anyone of Justices Nachura (who did not retire until June 13, 2011),
Peralta, or Bersamin, either (1) after the acceptance of the 2nd MR (because the original rulings were no longer final); or (2) after Justice Velasco's
inhibition because the same condition existed, i.e., the need for a review by the same Justices who rendered the decision or resolution. As previously
mentioned, Justice Nachura participated in both the original Decision and the subsequent Resolution, and all three Justices were the remaining
Members who voted on the October 2, 2009 Resolution. On the other hand, if Section 3, Rule 8 were to be solely applied after Justice Velasco's
inhibition, the Clerk of Court would be correct in her assessment and the raffle to Justice Brion, as a Member outside of Justice Velasco's Division,
was correct.

These were the legal considerations that largely confronted the ruling Division in late September 2011 when it deliberated on what to do with Atty.
Mendoza's letters.

The propriety of and grounds for the recall of the September 7, 2011 Resolution

Most unfortunately, the above unresolved questions were even further compounded in the course of the deliberations of the Members of the ruling
Division when they were informed that the parties received the ruling on September 19, 2011, and this ruling would lapse to finality after the 15th
day, or after October 4, 2011.

Thus, on September 30, 2011 (a Friday), the Members went to Chief Justice Corona and recommended, as a prudent move, that the September 7,
2011 Resolution be recalled at the very latest on October 4, 2011, and that the case be referred to the Court en banc for a ruling on the questions
Atty. Mendoza asked. The consequence, of course, of a failure to recall their ruling was for that Resolution to lapse to finality. After finality, any recall
for lack of jurisdiction of the ruling Division might not be understood by the parties and could lead to a charge of flip-flopping against the Court. The
basis for the referral is Section 3(n), Rule 2 of the IRSC, which provides:
RULE 2.

OPERATING STRUCTURES
Section 3. Court en banc matters and cases. - The Court en banc shall act on the following matters and cases:

xxxx

(n) cases that the Court en banc deems of sufficient importance to merit its attention[.]
Ruling positively, the Court en banc duly issued its disputed October 4, 2011 Resolution recalling the September 7, 2011 Resolution and ordering the
re-raffle of the case to a new Member-in-Charge. Later in the day, the Court received PAL's Motion to Vacate (the September 7, 2011 ruling) dated
October 3, 2011. This was followed by FASAP's MR dated October 17, 2011 addressing the Court Resolution of October 4, 2011. The FASAP MR
mainly invoked the violation of its right to due process as the recall arose from the Court's ex parte consideration of mere letters from one of the
counsels of the parties.

As the narration in this Resolution shows, the Court acted on its own pursuant to its power to recall its own orders and resolutions before their
finality. The October 4, 2011 Resolution was issued to determine the propriety of the September 7, 2011 Resolution given the facts that came to light
after the ruling Division's examination of the records. To point out the obvious, the recall was not a ruling on the merits and did not constitute the
reversal of the substantive issues already decided upon by the Court in the FASAP case in its previously issued Decision (of July 22, 2008) and
Resolution (of October 2, 2009). In short, the October 4, 2011 Resolution was not meant and was never intended to favor either party, but to simply
remove any doubt about the validity of the ruling Division's action on the case. The case, in the ruling Division's view, could be brought to the
Court en banc since it is one of "sufficient importance"; at the very least, it involves the interpretation of conflicting provisions of the IRSC with
potential jurisdictional implications.

At the time the Members of the ruling Division went to the Chief Justice to recommend a recall, there was no clear indication of how they would
definitively settle the unresolved legal questions among themselves. The only matter legally certain was the looming finality of the September 7,
2011 Resolution if it would not be immediately recalled by the Court en banc by October 4, 2011. No unanimity among the Members of the ruling
Division could be gathered on the unresolved legal questions; thus, they concluded that the matter is best determined by the Court en banc as it
potentially involved questions of jurisdiction and interpretation of conflicting provisions of the IRSC. To the extent of the recommended recall, the
ruling Division was unanimous and the Members communicated this intent to the Chief Justice in clear and unequivocal terms.[76] (Bold scoring
supplied for emphasis)
It is well to stress that the Banc could not have assumed jurisdiction were it not for the initiative of Justice Arturo V. Brion who consulted the
Members of the ruling Division as well as Chief Justice Corona regarding the jurisdictional implications of the successive retirements, transfers, and
inhibitions by the Members of the ruling Division. This move by Justice Brion led to the referral of the case to the Banc in accordance with Section
3(1), Rule 2 of the IRSC that provided, among others, that any Member of the Division could request the Court En Banc to take cognizance of cases
that fell under paragraph (m). This referral by the ruling Division became the basis for the Banc to issue its October 4, 2011 resolution.

For sure, the Banc, by assuming jurisdiction over the case, did not seek to act as appellate body in relation to the acts of the ruling Division, contrary
to the dissent's position.[77] The Banc's recall of the resolution of September 7, 2011 should not be so characterized, considering that the Banc did
not thereby rule on the merits of the case, and did not thereby reverse the July 22, 2008 decision and the October 2, 2009 resolution. The referral of
the case to the Banc was done to address the conflict among the provisions of the IRSC that had potential jurisdictional implications on the ruling
made by the Second Division.

At any rate, PAL constantly raised in its motions for reconsideration that the ruling Division had seriously erred not only in ignoring the consistent
findings about its precarious financial situation by the Labor Arbiter, the NLRC, the CA and the SEC, but also in disregarding the pronouncements by
the Court of its serious fiscal condition. To be clear, because the serious challenge by PAL against the ruling of the Third Division was anchored on
the Third Division's having ignored or reversed settled doctrines or principles of law, only the Banc could assume jurisdiction and decide to either
affirm, reverse or modify the earlier decision. The rationale for this arrangement has been expressed in Lu v. Lu Ym[78] thuswise:
It is argued that the assailed Resolutions in the present cases have already become final, since a second motion for reconsideration is prohibited
except for extraordinarily persuasive reasons and only upon express leave first obtained; and that once a judgment attains finality, it thereby
becomes immutable and unalterable, however unjust the result of error may appear.

The contention, however, misses an important point. The doctrine of immutability of decisions applies only to final and executory decisions. Since the
present cases may involve a modification or reversal of a Court-ordained doctrine or principle, the judgment rendered by the Special Third Division
may be considered unconstitutional, hence, it can never become final. It finds mooring in the deliberations of the framers of the Constitution:
On proposed Section 3(4), Commissioner Natividad asked what the effect would be of a decision that violates the proviso that "no doctrine or
principle of law laid down by the court in a decision rendered en banc or in division may be modified or reversed except by the court en banc." The
answer given was that such a decision would be invalid. Following up, Father Bernas asked whether the decision, if not challenged, could become
final and binding at least on the parties. Romulo answered that, since such a decision would be in excess of jurisdiction, the decision on the case
could be reopened anytime. (emphasis and underscoring supplied)
A decision rendered by a Division of this Court in violation of this constitutional provision would be in excess of jurisdiction and, therefore, invalid.
Any entry of judgment may thus be said to be "inefficacious" since the decision is void for being unconstitutional.

While it is true that the Court en banc exercises no appellate jurisdiction over its Divisions, Justice Minerva Gonzaga-Reyes opined in Firestone and
concededly recognized that "[t]he only constraint is that any doctrine or principle of law laid down by the Court, either rendered en banc or in division,
may be overturned or reversed only by the Court sitting en banc."

That a judgment must become final at some definite point at the risk of occasional error cannot be appreciated in a case that embroils not only a
general allegation of "occasional error" but also a serious accusation of a violation of the Constitution, viz., that doctrines or principles of law were
modified or reversed by the Court's Special Third Division August 4, 2009 Resolution.

The law allows a determination at first impression that a doctrine or principle laid down by the court en banc or in division may be modified or
reversed in a case which would warrant a referral to the Court En Banc. The use of the word "may" instead of "shall" connotes probability, not
certainty, of modification or reversal of a doctrine, as may be deemed by the Court. Ultimately, it is the entire Court which shall decide on the
acceptance of the referral and, if so, "to reconcile any seeming conflict, to reverse or modify an earlier decision, and to declare the Court's doctrine."

The Court has the power and prerogative to suspend its own rules and to exempt a case from their operation if and when justice requires it, as in the
present circumstance where movant filed a motion for leave after the prompt submission of a second motion for reconsideration but,
nonetheless, still within 15 days from receipt of the last assailed resolution.[79]
Lastly, the dissent proposes that a unanimous vote is required to grant PAL's Second Motion for Reconsideration of the Decision of July 22, 2008.
[80]
 The dissent justifies the proposal by stating that "[a] unanimous court would debate and deliberate more fully compared with a nonunanimous
court."[81]

The radical proposal of the dissent is bereft of legal moorings. Neither the 1987 Constitution nor the IRSC demands such unanimous vote. Under
Section 4(2), Article VIII of the 1987 Constitution, decisions by the Banc shall be attained by a "concurrence of a majority of the Members who
actually took part in the deliberations on the issues in the case and voted thereon." As a collegial body, therefore, the Court votes after deliberating
on the case, and only a majority vote is required,[82] unless the 1987 Constitution specifies otherwise. In all the deliberations by the Court, dissenting
and concurring opinions are welcome, they being seen as sound manifestations of "the license of individual Justices or groups of Justices to
separate themselves from "the Court's" adjudication of the case before them,"[83] thus:
[C]oncurring and dissenting opinions serve functions quite consistent with a collegial understanding of the Court. Internally within the Court itself-
dissent promotes and improves deliberation and judgment. Arguments on either side of a disagreement test the strength of their rivals and demand
attention and response. The opportunity for challenge and response afforded by the publication of dissenting and concurring opinions is a close and
sympathetic neighbor of the obligation of reasoned justification.

Externally for lower courts, the parties, and interested bystanders-concurring and dissenting opinions are important guides to the dynamic "meaning"
of a decision by the Court. From a collegial perspective, dissenting and concurring opinions offer grounds for understanding how individual Justices,
entirely faithful to their Court's product, will interpret that product. The meaning each Justice brings to the product of her Court will inevitably be
shaped by elements of value and judgment she brings to the interpretive endeavor; her dissent from the Court's conclusions in the case in question
is likely to be dense with insight into these aspects of her judicial persona.[84]
III

PAL implemented a valid retrenchment program

Retrenchment or downsizing is a mode of terminating employment initiated by the employer through no fault of the employee and without prejudice
to the latter, resorted to by management during periods of business recession, industrial depression or seasonal fluctuations or during lulls over
shortage of materials. It is a reduction in manpower, a measure utilized by an employer to minimize business losses incurred in the operation of its
business.[85]

Anent retrenchment, Article 298[86] of the Labor Code provides as follows:

Article 298. Closure of Establishment and Reduction of Personnel. - The employer may also terminate the employment of any employee due to the
installation of labor saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operation of the establishment or
undertaking unless the closing is for the purpose of circumventing the provisions of this Title, by serving a written notice on the workers and the
Ministry of Labor and Employment at least one (1) month before the intended date thereof. In case of termination due to the installation of labor
saving devices or redundancy, the worker affected thereby shall be entitled to a separation pay equivalent to at least his one (1) month pay or to at
least one (1) month pay for every year of service, whichever is higher. In case of retrenchment to prevent losses and in cases of closure or cessation
of operations of establishment or undertaking not due to serious business losses or financial reverses, the separation pay shall be equivalent to one
(1) month pay or to at least one-half (1/2) month pay for every year of service, whichever is higher. A fraction of at least six (6) months shall be
considered one (1) whole year.
Accordingly, the employer may resort to retrenchment in order to avert serious business losses. To justify such retrenchment, the following
conditions must be present, namely:
1. The retrenchment must be reasonably necessary and likely to prevent business losses;

2. The losses, if already incurred, are not merely de minimis, but substantial, serious, actual and real, or, if only expected, are reasonably imminent;

3. The expected or actual losses must be proved by sufficient and convincing evidence;

4. The retrenchment must be in good faith for the advancement of its interest and not to defeat or circumvent the employees' right to security of
tenure; and

5. There must be fair and reasonable criteria in ascertaining who would be dismissed and who would be retained among the employees, such as
status, efficiency, seniority, physical fitness, age, and financial hardship for certain workers.[87]
Based on the July 22, 2008 decision, PAL failed to: (1) prove its financial losses because it did not submit its audited financial statements as
evidence; (2) observe good faith in implementing the retrenchment program; and (3) apply a fair and reasonable criteria in selecting who would be
terminated.

Upon a critical review of the records, we are convinced that PAL had met all the standards in effecting a valid retrenchment.
A

PAL's serious financial losses were duly established

PAL was discharged of the burden to prove serious financial losses in view of FASAP's admission

PAL laments the unfair and unjust conclusion reached in the July 22, 2008 decision to the effect that it had not proved its financial losses due to its
non-submission of audited financial statements. It points out that the matter of financial losses had not been raised as an issue before the Labor
Arbiter, the NLRC, the CA, and even in the petition in G.R. No. 178083 in view of FASAP's admission of PAL having sustained serious losses; and
that PAL's having been placed under rehabilitation sufficiently indicated the financial distress that it was suffering.

It is quite notable that the matter of PAL's financial distress had originated from the complaint filed by FASAP whereby it raised the sole issue of
"Whether or not respondents committed Unfair Labor Practice."[88] FASAP believed that PAL, in terminating the 1,400 cabin crew members, had
violated Section 23, Article VII and Section 31, Article IX of the 1995-2000 PAL-FASAP CBA. Interestingly, FASAP averred in its position paper
therein that it was not opposed to the retrenchment program because it understood PAL's financial troubles; and that it was only questioning
the manner and lack of standard in carrying out the retrenchment, thus:
At the outset, it must be pointed out that complainant was never opposed to the retrenchment program itself, as it understands respondent PAL's
financial troubles. In fact, complainant religiously cooperated with respondents in their quest for a workable solution to the company-threatening
problem. Attached herewith as Annexes "A" to "D" are the minutes of its meetings with respondent PAL's representatives showing complainant's
active participation in the deliberations on the issue.

What complainant vehemently objects to are the manner and the lack of criteria or standard by which the retrenchment program was implemented or
carried out, despite the fact that there are available criteria or standard that respondents could have utilized or relied on in reducing its workforce. In
adopting a retrenchment program that was fashioned after the evil prejudices and personal biases of respondent Patria Chiong, respondent PAL
grossly violated at least two important provisions of its CBA with complainant - Article VII, Section 23 and Article IX, Sections 31 and 32.[89]
These foregoing averments of FASAP were echoed in its reply[90] and memorandum[91] submitted to the Labor Arbiter.

Evidently, FASAP's express recognition of PAL's grave financial situation meant that such situation no longer needed to be proved, the same having
become a judicial admission[92] in the context of the issues between the parties. As a rule, indeed, admissions made by parties in the pleadings, or in
the course of the trial or other proceedings in the same case are conclusive, and do not require further evidence to prove them.[93] By FASAP's
admission of PAL's severe financial woes, PAL was relieved of its burden to prove its dire financial condition to justify the retrenchment. Thusly, PAL
should not be taken to task for the non-submission of its audited financial statements in the early part of the proceedings inasmuch as the non-
submission had been rendered irrelevant.

Yet, the July 22, 2008 decision ignored the judicial admission and unfairly focused on the lack of evidence of PAL's financial losses. The Special
Third Division should have realized that PAL had been discharged of its duty to prove its precarious fiscal situation in the face of FASAP's admission
of such situation. Indeed, PAL did not have to submit the audited financial statements because its being in financial distress was not in issue at all.

Nonetheless, the dissent still insists that PAL should be faulted for failing to prove its substantial business losses, and even referred to several
decisions of the Court[94] wherein the employers had purportedly established their serious business losses as a requirement for a valid retrenchment.

Unfortunately, the cases cited by the dissent obviously had no application herein because they originated from either simple complaints of illegal
retrenchment, or unfair labor practice, or additional separation pay.[95]

LVN Pictures originated from a complaint for unfair labor practice (ULP) based on Republic Act No. 874 (Industrial Peace Act). The allegations in the
complaint concerned interference, discrimination and refusal to bargain collectively. The Court pronounced therein that the employer (LVN Pictures)
did not resort to ULP because it was able to justify its termination, closure and eventual refusal to bargain collectively through the financial
statements showing that it continually incurred serious financial losses. Notably, the Court did not interfere with the closure and instead recognized
LVN's management prerogative to close its business and dismiss its employees.

North Davao Mining was a peculiar case, arising from a complaint for additional separation pay, among others. The Court therein held that
separation pay was not required if the reason for the termination was due to serious business losses. It clarified that Article 283 (now Art. 298)
governed payment of separation benefits in case of closure of business not due to serious business losses. When the reason for the closure was
serious business losses, the employer shall not be required to grant separation pay to the terminated employees.

In Manatad, the complaint for illegal dismissal was based on the allegation that the retrenchment program was illegal because the employer was
gaining profits. Hence, the core issue revolved around the existence (or absence) of grave financial losses that would justify retrenchment.

In the cited cases, the employers had to establish that they were incurring serious business losses because it was the very issue, if not intricately
related to the main issue presented in the original complaints. In contrast, the sole issue herein as presented by FASAP to the Labor Arbiter was the
"manner of retrenchment," not the basis for retrenchment. FASAP itself, in representation of the retrenched employees, had admitted in its position
paper, as well as in its reply and memorandum submitted to the Labor Arbiter the fact of serious financial losses hounding PAL. In reality, PAL was
not remiss by not proving serious business losses. FASAP's admission of PAL's financial distress already established the latter's precarious financial
state.

Judicial notice could be taken of the financial losses incurred; the presentation of audited financial statements was not required in such
circumstances

The July 22, 2008 decision recognized that PAL underwent corporate rehabilitation. In seeming inconsistency, however, the Special Third Division
refused to accept that PAL had incurred serious financial losses, observing thusly:
The audited financial statements should be presented before the Labor Arbiter who is in the position to evaluate evidence. They may not be
submitted belatedly with the Court of Appeals, because the admission of evidence is outside the sphere of the appellate court's certiorari jurisdiction.
Neither can this Court admit in evidence audited financial statements, or make a ruling on the question of whether the employer incurred substantial
losses justifying retrenchment on the basis thereof, as this Court is not a trier of facts. Even so, this Court may not be compelled to accept the
contents of said documents blindly and without thinking.

xxxx

In the instant case, PAL failed to substantiate its claim of actual and imminent substantial losses which would justify the retrenchment of more than
1,400 of its cabin crew personnel. Although the Philippine economy was gravely affected by the Asian financial crisis, however, it cannot be assumed
that it has likewise brought PAL to the brink of bankruptcy. Likewise, the fact that PAL underwent corporate rehabilitation does not automatically
justify the retrenchment of its cabin crew personnel.[96] (Emphasis supplied)
Indeed, that a company undergoes rehabilitation sufficiently indicates its fragile financial condition. It is rather unfortunate that when PAL petitioned
for rehabilitation the term "corporate rehabilitation" still had no clear definition. Presidential Decree No. 902-A,[97] the law then applicable, only set the
remedy.[98] Section 6(c) and (d) of P.D. No. 902-A gave an insight into the precarious state of a distressed corporation requiring the appointment of a
receiver or the creation of a management committee, viz.:
xxxx

c) To appoint one or more receivers of the property, real and personal, which is the subject of the action pending before the Commission in
accordance with the pertinent provisions of the Rules of Court in such other cases whenever necessary in order to preserve the rights of the parties-
litigants and/or protect the interest of the investing public and creditors: Provided, however, That the Commission may, in appropriate cases, appoint
a rehabilitation receiver of corporations, partnerships or other associations not supervised or regulated by other government agencies who shall
have, in addition to the powers of a regular receiver under the provisions of the Rules of Court, such functions and powers as are provided for in the
succeeding paragraph d) hereof: Provided, further, That the Commission may appoint a rehabilitation receiver of corporations, partnerships or other
associations supervised or regulated by other government agencies, such as banks and insurance companies, upon request of the government
agency concerned: Provided, finally, That upon appointment of a management committee, rehabilitation receiver, board or body, pursuant to this
Decree, all actions for claims against corporations, partnerships or associations under management or receivership pending before any court,
tribunal, board or body shall be suspended accordingly.

d) To create and appoint a management committee, board, or body upon petition or motu propio to undertake the management of corporations,
partnerships or other associations not supervised or regulated by other government agencies in appropriate cases when there is imminent danger of
dissipation, loss, wastage or destruction of assets or other properties of paralyzation of business operations of such corporations or entities which
may be prejudicial to the interest of minority stockholders, parties-litigants or the general public: Provided, further, That the Commission may create
or appoint a management committee, board or body to undertake the management of corporations, partnerships or other associations supervised or
regulated by other government agencies, such as banks and insurance companies, upon request of the government agency concerned.

The management committee or rehabilitation receiver, board or body shall have the power to take custody of, and control over, all the existing assets
and property of such entities under management; to evaluate the existing assets and liabilities, earnings and operations of such corporations,
partnerships or other associations; to determine the best way to salvage and protect the interest of the investors and creditors; to study, review and
evaluate the feasibility of continuing operations and restructure and rehabilitate such entities if determined to be feasible by the Commission. It shall
report and be responsible to the Commission until dissolved by order of the Commission: Provided, however, That the Commission may; on the
basis of the findings and recommendation of the management committee, or rehabilitation receiver, board or body, or on its own findings; determine
that the continuance in business of such corporation or entity would not be feasible or profitable nor work to the best interest of the stockholders,
parties-litigants, creditors, or the general public, order the dissolution of such corporation entity and its remaining assets liquidated accordingly. The
management committee or rehabilitation receiver, board or body may overrule or revoke the actions of the previous management and board of
directors of the entity or entities under management notwithstanding any provision of law, articles of incorporation or by-laws to the contrary.

The management committee, or rehabilitation receiver, board or body shall not be subject to any action, claim or demand for, or in connection with,
any act done or omitted to be done by it in good faith in the exercise of its functions, or in connection with the exercise of its power herein conferred.
(Bold underscoring supplied for emphasis)
After having been placed under corporate rehabilitation and its rehabilitation plan having been approved by the SEC on June 23, 2008, PAL's dire
financial predicament could not be doubted. Incidentally, the SEC's order of approval came a week after PAL had sent out notices of termination to
the affected employees. It is thus difficult to ignore the fact that PAL had then been experiencing difficulty in meeting its financial obligations long
before its rehabilitation.

Moreover, the fact that airline operations were capital intensive but earnings were volatile because of their vulnerability to economic recession,
among others.[99] The Asian financial crisis in 1997 had wrought havoc among the Asian air carriers, PAL included.[100] The peculiarities existing in the
airline business made it easier to believe that at the time of the Asian financial crisis, PAL incurred liabilities amounting to P90,642,933,919.00, which
were way beyond the value of its assets that then only stood at P85,109,075,351.

Also, the Court cannot be blind and indifferent to current events affecting the society[101] and the country's economy,[102] but must take them into
serious consideration in its adjudication of pending cases. In that regard, Section 2, Rule 129 of the Rules of Court recognizes that the courts have
discretionary authority to take judicial notice of matters that are of public knowledge, or are capable of unquestionable demonstration, or ought to be
known to judges because of their judicial functions.[103] The principle is based on convenience and expediency in securing and introducing evidence
on matters that are not ordinarily capable of dispute and are not bona fide disputed.[104]

Indeed, the Labor Arbiter properly took cognizance of PAL's substantial financial losses during the Asian financial crisis of 1997.[105] On its part, the
NLRC recognized the grave financial distress of PAL based on its ongoing rehabilitation/receivership.[106] The CA likewise found that PAL had
implemented a retrenchment program to counter its tremendous business losses that the strikes of the pilot's union had aggravated.[107] Such
recognitions could not be justly ignored or denied, especially after PAL's financial and operational difficulties had attracted so much public attention
that even President Estrada had to intervene in order to save PAL as the country's flag carrier.[108]

The Special Third Division also observed that PAL had submitted a "stand-alone" rehabilitation program that was viewed as an acknowledgment that
it could "undertake recovery on its own and that it possessed enough resources to weather the financial storm." The observation was unfounded
considering that PAL had been constrained to submit the "stand-alone" rehabilitation plan on December 7, 1998 because of the lack of a strategic
partner.[109]

We emphasize, too, that the presentation of the audited financial statements should not the sole means by which to establish the employer's serious
financial losses. The presentation of audited financial statements, although convenient in proving the unilateral claim of financial losses, is not
required for all cases of retrenchment. The evidence required for each case of retrenchment really depends on the particular circumstances
obtaining. The Court has cogently opined in that regard:
That petitioners were not able to present financial statements for years prior to 2005 should not be automatically taken against them. Petitioner BEMI
was organized and registered as a corporation in 2004 and started business operations in 2005 only. While financial statements for previous years
may be material in establishing the financial trend for an employer, these are not indispensable in all cases of retrenchment. The evidence required
for each case of retrenchment will still depend on its particular circumstances. In fact, in Revidad v. National Labor Relations Commission, the Court
declared that "proof of actual financial losses incurred by the company is not a condition sine qua non for retrenchment," and retrenchment may be
undertaken by the employer to prevent even future losses:
In its ordinary connotation, the phrase "to prevent losses" means that retrenchment or termination of the services of some employees is authorized to
be undertaken by the employer sometime before the anticipated losses are actually sustained or realized. It is not, in other words, the intention of the
lawmaker to compel the employer to stay his hand and keep all his employees until after losses shall have in fact materialized. If such an intent were
expressly written into the law, that law may well be vulnerable to constitutional attack as unduly taking property from one man to be given to another.
[110]
 (Bold underscoring supplied for emphasis)
In short, to require a distressed corporation placed under rehabilitation or receivership to still submit its audited financial statements may become
unnecessary or superfluous.

Under P.D. No. 902-A, the SEC was empowered during rehabilitation proceedings to thoroughly review the corporate and financial documents
submitted by PAL. Hence, by the time when the SEC ordered PAL's rehabilitation, suspension of payments and receivership, the SEC had already
ascertained PAL's serious financial condition, and the clear and imminent danger of its losing its corporate assets. To require PAL in the proceedings
below to still prove its financial losses would only trivialize the SEC's order and proceedings. That would be unfortunate because we should not
ignore that the SEC was then the competent authority to determine whether or not a corporation experienced serious financial losses. Hence, the
SEC's order- presented as evidence in the proceedings below - sufficiently established PAL's grave financial status.
Finally, PAL argues that the Special Third Division should not have deviated from the pronouncements made in Garcia v. Philippine Airlines, Inc.,
Philippine Airlines, Inc. v. Kurangking, Philippine Airlines v. Court of Appeals, Philippine Airlines v. Zamora, Philippine Airlines v. PALEA, and
Philippine Airlines v. National Labor Relations Commission, all of which judicially recognized PAL's dire financial condition.

The argument of PAL is valid and tenable.

Garcia v. Philippine Airlines, Inc. discussed the unlikelihood of reinstatement pending appeal because PAL had been placed under corporate
rehabilitation, explaining that unlike the ground of substantial losses contemplated in a retrenchment case, the state of corporate rehabilitation was
judicially pre-determined by a competent court and not formulated for the first time by the employer, viz.:
While reinstatement pending appeal aims to avert the continuing threat or danger to the survival or even the life of the dismissed employee and his
family, it does not contemplate the period when the employer-corporation itself is similarly in a judicially monitored state of being resuscitated in order
to survive.

The parallelism between a judicial order of corporation rehabilitation as a justification for the non-exercise of its options, on the one hand, and a claim
of actual and imminent substantial losses as ground for retrenchment, on the other hand, stops at the red line on the financial statements. Beyond
the analogous condition of financial gloom, as discussed by Justice Leonardo Quisumbing in his Separate Opinion, are more salient distinctions.
Unlike the ground of substantial losses contemplated in a retrenchment case, the state of corporate rehabilitation was judicially pre-determined by a
competent court and not formulated for the first time in this case by respondent.

More importantly, there are legal effects arising from a judicial order placing a corporation under rehabilitation. Respondent was, during the period
material to the case, effectively deprived of the alternative choices under Article 223 of the Labor Code, not only by virtue of the statutory injunction
but also in view of the interim relinquishment of management control to give way to the full exercise of the powers of the rehabilitation receiver. Had
there been no need to rehabilitate, respondent may have opted for actual physical reinstatement pending appeal to optimize the utilization of
resources. Then again, though the management may think this Wise, the rehabilitation receiver may decide otherwise, not to mention the
subsistence of the injunction on claims.[111]
In Philippine Airlines v. Kurangking, Philippine Airlines v. Court of Appeals, Philippine Airlines v. PALEA and Philippine Airlines v. National Labor
Relations Commission, the Court uniformly upheld the suspension of monetary claims against PAL because of the SEC's order placing it under
receivership. The Court emphasized the need to suspend the payment of the claims pending the rehabilitation proceedings in order to enable the
management committee/receiver to channel the efforts towards restructuring and rehabilitation. Philippine Airlines v. Zamora reiterated this rule and
deferred to the prior judicial notice taken by the Court in suspending the monetary claims of illegally dismissed employees.[112]

Through these rulings, the Court consistently recognized PAL's financial troubles while undergoing rehabilitation and suspension of payments.
Considering that the ruling related to conditions and circumstances that had occurred during the same period as those obtaining in G.R. No. 178083,
the Court cannot take a different view.

It is also proper to indicate that the Court decided the other cases long before the promulgation of the assailed July 22, 2008 decision. Hence, the
Special Third Division should not have regarded the financial losses as an issue that still required determination. Instead, it should have just simply
taken judicial notice of the serious financial losses being suffered by PAL.[113] To still rule that PAL still did not prove such losses certainly conflicted
with the antecedent judicial pronouncements about PAL's dire financial state.

As such, we cannot fathom the insistence by the dissent that the Court had not taken judicial notice but merely "recognized" that PAL was under
corporate rehabilitation. Judicial notice is the cognizance of certain facts that judges may properly take and act on without proof because they
already know them. It is the manner of recognizing and acknowledging facts that no longer need to be proved in court. In other words, when the
Court "recognizes" a fact, it inevitably takes judicial notice of it.

For sure, it would not have been the first time that the Court would have taken judicial notice of the findings of the SEC and of antecedent
jurisprudence recognizing the fact of rehabilitation by the employer. The Court did so in the 2002 case of Clarion Printing House, Inc. v. National
Labor Relations Commission,[114] to wit:
Sections 5 and 6 of Presidential Decree No. 902-A (P.D. 902-A) ("REORGANIZATION OF THE SECURITIES AND EXCHANGE COMMISSION
WITH ADDITIONAL POWERS AND PLACING SAID AGENCY UNDER THE ADMINISTRATIVE SUPERVISION OF THE OFFICE OF THE
PRESIDENT"), as amended, read:
SEC. 5. In addition to the regulatory and adjudicative functions of THE SECURITIES AND EXCHANGE COMMISSION over corporations,
partnerships and other forms of associations registered with it as expressly granted under existing laws and decrees, it shall have original and
exclusive jurisdiction to hear and decide cases involving:
xxx xxx xxx

(d) Petitions of corporations, partnerships or associations declared in the state of suspension of payments in cases where the corporation,
partnership or association possesses sufficient property to cover all debts but foresees the impossibility of meeting them when they
respectively fall due or in cases where the corporation, partnership, association has no sufficient assets to cover its liabilities, but is under the
management of a Rehabilitation Receiver or Management Committee created pursuant to this Decree.

SEC. 6. In order to effectively exercise such jurisdiction, the Commission shall possess the following powers:
xxx xxx xxx

(c) To appoint one or more receivers of the property, real and personal, which is the subject of the action pending before the Commission in
accordance with the provisions of the Rules of Court in such other cases whenever necessary in order to preserve the rights of the parties-
litigants and/or protect the interest of the investing public and creditors: Provided, however, That the Commission may in appropriate cases,
appoint a rehabilitation receiver of corporations, partnerships or other associations not supervised or regulated by other government agencies
who shall have, in addition to powers of the regular receiver under the provisions of the Rules of Court, such functions and powers as are
provided for in the succeeding paragraph (d) hereof: ...
(d) To create and appoint a management committee, board or body upon petition or motu propio to undertake the management of corporations,
partnership or other associations not supervised or regulated by other government agencies in appropriate cases when there is imminent
danger of dissipation, loss, wastage or destruction of assets or other properties or paralization of business operations of such corporations or
 entities which may be prejudicial to the interest of minority stockholders, parties-litigants of the general public: ... (Emphasis and underscoring
supplied).
From the above-quoted provisions of P.D. No. 902-A, as amended, the appointment of a receiver or management committee by the SEC
presupposes a finding that, inter alia, a company possesses sufficient property to cover all its debts but "foresees the impossibility of meeting them
when they respectively fall due" and "there is imminent danger of dissipation, loss, wastage or destruction of assets of other properties or
paralization of business operations."

That the SEC, mandated by law to have regulatory functions over corporations, partnerships or associations, appointed an interim receiver for the
EYCO Group of Companies on its petition in light of, as quoted above, the therein enumerated "factors beyond the control and anticipation of the
management" rendering it unable. to meet its obligation as they fall due, and thus resulting to "complications and problems ... to arise that would
impair and affect [its] operations ..." shows that CLARION, together with the other member-companies of the EYCO Group of Companies, was
suffering business reverses justifying, among other things, the retrenchment of its employees.

This Court in fact takes judicial notice of the Decision of the Court of Appeals dated June 11, 2000 in CA-G.R. SP No. 55208, "Nikon Industrial
Corp., Nikolite Industrial Corp., et al. (including CLARION), otherwise known as the EYCO Group of Companies v. Philippine National Bank,
Solidbank Corporation, et al., collectively known and referred as the 'Consortium of Creditor Banks,'" which was elevated to this Court via Petition for
Certiorari and docketed as G.R. No. 145977, but which petition this Court dismissed by Resolution dated May 3, 2005:
Considering the joint manifestation and motion to dismiss of petitioners and respondents dated February 24, 2003, stating that the parties have
reached a final and comprehensive settlement of all the claims and counterclaims subject matter of the case and accordingly, agreed to the
dismissal of the petition for certiorari, the Court Resolved to DISMISS the petition for certiorari (Underscoring supplied).
The parties in G.R. No. 145977 having sought, and this Court having granted, the dismissal of the appeal of the therein petitioners including
CLARION, the CA decision which affirmed in toto the September 14, 1999 Order of the SEC, the dispositive portion of which SEC Order reads:
WHEREFORE, premises considered, the appeal is as it is hereby, granted and the Order dated 18 December 1998 is set aside. The Petition to be
Declared in State of Suspension of payments is hereby disapproved and the SAC Plan terminated. Consequently, all committee,
conservator/receivers created pursuant to said Order are dissolved and discharged and all acts and orders issued therein are vacated.

The Commission, likewise, orders the liquidation and dissolution of the appellee corporations. The case is hereby remanded to the hearing panel
below for that purpose.

xxx xxx xxx (Emphasis and underscoring supplied).

has now become final and executory. Ergo, the SEC's disapproval of the EYCO Group of Companies' "Petition for the Declaration of Suspension of
Payment ..." and the order for the liquidation and dissolution of these companies including CLARION, must be deemed to have been unassailed.

That judicial notice can be taken of the above-said case of Nikon Industrial Corp. et al. v. PNB et al., there should be no doubt.

As provided in Section 1, Rule 129 of the Rules of Court:

SECTION 1. Judicial notice, when mandatory. - A court shall take judicial notice, without the introduction of evidence, of the existence and territorial
extent of states, their political history, forms of government and symbols of nationality, the law of nations, the admiralty and maritime courts of the
world and their seals, the political constitution and history of the Philippines, the official acts of the legislative, executive and judicial departments of
the Philippines, the laws of nature, the measure of time, and the geographical divisions. (Emphasis and underscoring supplied)
which Mr. Justice Edgardo L. Paras interpreted as follows:
A court will take judicial notice of its own acts and records in the same case, of facts established in prior proceedings in the same case, of the
authenticity of its own records of another case between the same parties, of the files of related cases in the same court, and of public records on file
in the same court. In addition judicial notice will be taken of the record, pleadings or judgment of a case in another court between the same parties or
involving one of the same parties, as well as of the record of another case between different parties in the same court. Judicial notice will also be
taken of court personnel. (Emphasis and underscoring supplied)
In fine, CLARION's claim that at the time it terminated Miclat it was experiencing business reverses gains more light from the SEC's disapproval of
the EYCO Group of Companies' petition to be declared in state of suspension of payment, filed before Miclat's termination, and of the SEC's
consequent order for the group of companies' dissolution and liquidation.[115]
At any rate, even assuming that serious business losses had not been proved by PAL, it would still be justified under Article 298 of the Labor Code to
retrench employees to prevent the occurrence of losses or its closing of the business, provided that the projected losses were not merely de minimis,
but substantial, serious, actual, and real, or, if only expected, were reasonably imminent as perceived objectively and in good faith by the employer.
[116]
 In the latter case, proof of actual financial losses incurred by the employer would not be a condition sine qua non for retrenchment,[117] viz.:
Third, contrary to petitioner's asseverations, proof of actual financial losses incurred by the company is not a condition sine qua non for
retrenchment. Retrenchment is one of the economic grounds to dismiss employees, which is resorted to by an employer primarily to avoid or
minimize business losses. The law recognize this under Article 283 of the Labor Code xxx

xxxx

In its ordinary connotation, the phrase "to prevent losses" means that retrenchment or termination of the services of some employees is authorized to
be undertaken by the employer sometime before the anticipated losses are, actually sustained or realized. It is not, in other words, the intention of
the lawmaker to compel the employer to stay his hand and keep all his employees until after losses shall have in fact materialized. If such an intent
were expressly written into the law, that law may well be vulnerable to constitutional attack as unduly taking property from one man to be given to
another.

At the other end of the spectrum, it seems equally clear that not every asserted possibility of loss is sufficient legal warrant for the reduction of
personnel. In the nature of things, the possibility of incurring the losses is constantly present, in greater or lesser degree, in the carrying on of
business operations, since some, indeed many, of the factors which impact upon the profitability or viability of such operations may be substantially
outside the control of the employer.

On the bases of these consideration, it follows that the employer bears the burden to prove his allegation of economic or business reverses with
clear and satisfactory evidence, it being in the nature of an affirmative defense. As earlier discussed, we are fully persuaded that the private
respondent has been and is besieged by a continuing downtrend in both its business operations and financial resources, thus amply justifying its
resort to drastic cuts in personnel and costs.[118]
B

PAL retrenched in good faith

The employer is burdened to observe good faith in implementing a retrenchment program. Good faith on its part exists when the retrenchment is
intended for the advancement of its interest and is not for the purpose of defeating or circumventing the rights of the employee under special laws or
under valid agreements.[119]

The July 22, 2008 decision branded the recall of the retrenched employees and the implementation of "Plan 22" instead of "Plan 14" as badges of
bad faith on the part of PAL. On the other hand, the October 2, 2009 resolution condemned PAL for changing its theory by attributing the cause of
the retrenchment to the ALPAP pilots' strike.

PAL refutes the adverse observations, and maintains that its position was clear and consistent - that the reduction of its labor force was an act of
survival and a less drastic measure as compared to total closure and liquidation that would have otherwise resulted; that downsizing had been an
option to address its financial losses since 1997;[120] that the reduction of personnel was necessary as an integral part of the means to ensure the
success of its corporate rehabilitation plan to restructure its business;[121] and that the downsizing of its labor force was a sound business decision
undertaken after an assessment of its financial situation and the remedies available to it.[122]

A hard look at the records now impels the reconsideration of the July 22, 2008 decision and the resolution of October 2, 2009.

PAL could not have been motivated by ill will or bad faith when it decided to terminate FASAP's affected members. On the contrary, good faith could
be justly inferred from PAL's conduct before, during and after the implementation of the retrenchment plan.

Notable in this respect was PALs candor towards FASAP regarding its plan to implement the retrenchment program. This impression is gathered
from PAL's letter dated February 11, 1998 inviting FASAP to a meeting to discuss the matter, thus:
Roberto D. Anduiza
President
Flight Attendants' and Stewards' Association of the Philippines (FASAP)
xxxx

Mr. Anduiza:

Due to critical business losses and in view of severe financial reverses, Philippine Airlines must undertake drastic measures to strive at survival. In
order to meet maturing obligations amidst the present regional crisis, the Company will implement major cost-cutting measures in its fleet plan,
operating budget, routes and frequencies. These moves include the closure of stations, downsizing of operations and reducing the workforce through
layoff/retrenchment or retirement.

In this connection, the Company would like to meet with the Flight Attendants' and Stewards' Association of the Philippines (FASAP) to discuss the
implementation of the lay-off/retrenchment or retirement of FASAP-covered employees. The meeting shall be at the Allied Bank Center (8th Floor-
Board Room) on February 12, 1998 at 4:00 p.m.

This letter serves as notice in compliance with Article 283 of the Labor Code, as amended and DOLE Orders Nos[.] 9 and 10, Series of 1997.

Very truly yours,

(Sgd.)
JOSE ANTONIO GARCIA
President & Chief Operating Officer[123]
The records also show that the parties met on several occasions[124] to explore cost-cutting measures, including the implementation of the
retrenchment program. PAL likewise manifested that the retrenchment plan was temporarily shelved while it implemented other measures (like
termination of probationary cabin attendant, and work-rotations).[125] Obviously, the dissent missed this part as it stuck to the belief that PAL did not
implement other cost-cutting measures prior to retrenchment.[126]

Given PAL's dire financial predicament, it becomes understandable that PAL was constrained to finally implement the retrenchment program when
the ALPAP pilots strike crippled a major part of PAL's operations.[127]

In Rivera v. Espiritu,[128] we observed that said strike wrought "serious losses to the financially beleaguered flag carrier;" that "PAL's financial
situation went from bad to worse;" and that "[f]aced with bankruptcy, PAL adopted a rehabilitation plan and downsized its labor force by more than
one-third." Such observations sufficed to show that retrenchment became a last resort, and was not the rash and impulsive decision that FASAP
would make it out to be now.

As between maintaining the number of its flight crew and PAL's survival, it was reasonable for PAL to choose the latter alternative. This Court cannot
legitimately force PAL as a distressed employer to maintain its manpower despite its dire financial condition. To be sure, the right of PAL as the
employer to reasonable returns on its investments and to expansion and growth is also enshrined in the 1987 Constitution.[129] Thus, although labor is
entitled to the right to security of tenure, the State will not interfere with the employer's valid exercise of its management prerogative.

Moreover, PAL filed its Petition for Appointment of Interim Rehabilitation Receiver and Approval of a Rehabilitation Plan with the SEC on June 19,
1998, before the retrenchment became effective.[130] PAL likewise manifested that:
xxx The Rehabilitation Plan and Amended Rehabilitation Plan submitted by PAL in pursuance of its corporate rehabilitation, and which obtained the
joint approval of PAL's creditors and the SEC, had as a primary component, the downsizing of PAL's labor force by at least 5,000, including the
1,400 flight attendants. As conceptualized by a team of industry experts, the cutting down of operations and the consequent reduction of work force,
along with the restructuring of debts with significant "haircuts" and the capital infusion of Mr. Lucio Tan amounting to US$200 million, were the key
components of PAL's rehabilitation. The Interim Rehabilitation Receiver was replaced by a Permanent Rehabilitation Receiver on June 7, 1999.
[131]
 (Bold underscoring supplies tor emphasis)
Being under a rehabilitation program, PAL had no choice but to implement the measures contained in the program, including that of reducing its
manpower. Far from being an impulsive decision to defeat its employees' right to security of tenure, retrenchment resulted from a meticulous plan
primarily aimed to resuscitate PAL's operations.

Good faith could also be inferred from. PAL's compliance with the basic requirements under Article 298 of the Labor Code prior to laying-off its
affected employees. Notably, the notice of termination addressed to the Department of Labor and Employment (DOLE) identified the reasons behind
the massive termination, as well as the measures PAL had undertaken to prevent the situation, to wit:
June 15, 1998

HON. MAXIMO B. LIM

THE REGIONAL DIRECTOR
Department of Labor and Employment
Regional Office No. NCR

Dear Sir:

This is to inform you that Philippine Air Lines, Inc. (PAL) will be implementing a retrenchment program one (1) month from notice hereof in order to
prevent bankruptcy.

PAL is forced to take this action because of continuous losses it has suffered over the years which losses were aggravated by the PALEA strike in
October 1996, peso depreciation, Asian currency crisis, causing a serious drop in our yield and the collapse of passenger traffic in the region.
Specifically, PAL suffered a net loss of P2.18 Billion during the fiscal year 1995-1996, P2.50 Billion during the fiscal year 1996-1997 and P8.08
Billion for the period starting April 1, 1997 to March 31, 1998.

These uncontrolled heavy losses have left PAL with no recourse but to reduce its fleet and its flight frequencies both in the domestic and
international sectors to ensure its survival.

In an effort to avoid a reduction of personnel, PAL has resorted to other measures, such as freeze on all hiring, no salary increase for managerial
and confidential staff (even for promotions), reduction of salaries of senior management personnel, freeze on staff movements, pre-termination of
temporary staff contracts and negotiations with foreign investors. But all these measures failed to avert the continued losses.

Finally, all the efforts of PAL to preserve the employment of its personnel were shattered by the illegal strike of its pilots which has cause irreparable
damage to the company's cash flow. Consequently, the company is now no longer able to meet its maturing obligations and is not about to go into
default in all its major loans. It is presently under threat of receiving a barrage of suits from its creditors who will go after the assets of the
corporation.

Under the circumstances, PAL is left with no recourse but to reduce its fleet and its flight frequencies both in the domestic and international sectors
to ensure its survival. Consequently, a reduction of personnel is inevitable.

All affected employees in the attached list will be given the corresponding benefits which they may be entitled to.
Very truly yours,

(Sgd)
JOSE ANTONIO GARCIA
President & Chief Operating Officer[132]
As regards the observation made in the decision of July 22, 2008 to the effect that the recall of the flight crew members indicated bad faith, we hold
to the contrary.

PAL explained how the recall process had materialized, as follows:

During this time, the Company was slowly but steadily recovering. Its finances were improving and additional planes were flying. Because of the
Company's steady recovery, necessity dictated more employees to man and service the additional planes and flights. Thus, instead of taking in new
hires, the Company first offered employment to employees who were previously retrenched. A recall/rehire plan was initiated.

The recall/rehire plan was a success. A majority of retrenched employees were recalled/rehired and went back to work including the members of
petitioner union. In the process of recall/rehire, many employees who could not be recalled for various reasons (such as, among others, being unfit
for the job or the employee simply did not want to work for the Company anymore) decided to accept separation benefits and executed, willingly and
voluntarily, valid quitclaims. Those who received separation packages included a good number of the members of the petitioner union.[133]
Contrary to the statement in the dissent that the implementation of Plan 22 instead of Plan 14 indicated bad faith,[134] PAL reasonably demonstrated
that the recall was devoid of bad faith or of an attempt on its part to circumvent its affected employees' right to security of tenure. Far from being
tainted with bad faith, the recall signified PAL's reluctance to part with the retrenched employees. Indeed, the prevailing unfavorable conditions had
only compelled it to implement the retrenchment.

The rehiring of previously retrenched employees should not invalidate a retrenchment program, the rehiring being an exercise of the employer's right
to continue its business. Thus, we pointed out in one case:
We likewise cannot sustain petitioners' argument that their dismissal was illegal on the basis that Lapanday did not actually cease its operation, or
that they have rehired some of the dismissed employees and even hired new set of employees to replace the retrenched employees.

The law acknowledges the right of every business entity to reduce its workforce if such measure is made necessary or compelled by economic
factors that would otherwise endanger its stability or existence. In exercising its right to retrench employees, the firm may choose to close all, or a
part of, its business to avoid further losses or mitigate expenses. In Caffco International Limited v. Office of the Minister-Ministry of Labor and
Employment, the Court has aptly observed that -
Business enterprises today are faced with the pressures of economic recession, stiff competition, and labor unrest. Thus, businessmen are always
pressured to adopt certain changes and programs in order to enhance their profits and protect their investments. Such changes may take various
forms. Management may even choose to close a branch, a department, a plant, or a shop.
In the same manner, when Lapanday continued its business operation and eventually hired some of its retrenched employees and new employees, it
was merely exercising its right to continue its business. The fact that Lapanday chose to continue its business does not automatically make the
retrenchment illegal. We reiterate that in retrenchment, the goal is to prevent impending losses or further business reversals - it therefore does not
require that there is an actual closure of the business. Thus, when the employer satisfactorily proved economic or business losses with sufficient
supporting evidence and have complied with the requirements mandated under the law to justify retrenchment, as in this case, it cannot be said that
the subsequent acts of the employer to rehire the retrenched employees or to hire new employees constitute bad faith. It could have been different if
from the beginning the retrenchment was illegal and the employer subsequently hired new employees or rehired some of the previously dismissed
employees because that would have constituted bad faith. Consequently, when Lapanday continued its operation, it was merely exercising its
prerogative to streamline its operations, and to rehire or hire only those who are qualified to replace the services rendered by the retrenched
employees in order to effect more economic and efficient methods of production and to forestall business losses. The rehiring or reemployment of
retrenched employees does not necessarily negate the presence or imminence of losses which prompted Lapanday to retrench.

In spite of overwhelming support granted by the social justice provisions of our Constitution in favor of labor, the fundamental law itself guarantees,
even during the process of tilting the scales of social justice towards workers and employees, "the right of enterprises to reasonable returns of
investment and to expansion and growth." To hold otherwise would not only be oppressive and inhuman, but also counter-productive and ultimately
subversive of the nation's thrust towards a resurgence in our economy which would ultimately benefit the majority of our people. Where appropriate
and where conditions are in accord with law and jurisprudence, the Court has authorized valid reductions in the workforce to forestall business
losses, the hemorrhaging of capital, or even to recognize an obvious reduction in the volume of business which has rendered certain employees
redundant.[135]
Consequently, we cannot pass judgment on the motive behind PAL's initiative to implement "Plan 22" instead of "Plan 14." The prerogative thereon
belonged to the management alone due to its being in the best position to assess its own financial situation and operate its own business. Even the
Court has no power to interfere with such exercise of the prerogative.
C

PAL used fair and reasonable criteria in selecting the employees to be retrenched pursuant to the CBA

The July 22, 2008 decision agreed with the holding by the CA that PAL was not obligated to consult with FASAP on the standards to be used in
evaluating the performance of its employees. Nonetheless, PAL was found to be unfair and unreasonable in selecting the employees to be
retrenched by doing away with the concept of seniority, loyalty, and past efficiency by solely relying on the employees' 1997 performance rating; and
that the retrenchment of employees due to "other reasons," without any details or specifications, was not allowed and had no basis in fact and in law.
[136]

PAL contends that it used fair and reasonable criteria in accord with Sections 23, 30 and 112 of the 1995-2000 CBA;[137] that the NLRC's use of the
phrase "other reasons" referred to the varied grounds (i.e. excess sick leaves, previous service of suspension orders, passenger complains,
tardiness, etc.) employed in conjunction with seniority in selecting the employees to be terminated;[138] that the CBA did not require reference to
performance rating of the previous years, but to the use of an efficiency rating for a single year;[139] and that it adopted both efficiency rating and
inverse seniority as criteria in the selection pursuant to Section 112 of the CBA.[140]

PAL's contentions are meritorious.

In selecting the employees to be dismissed, the employer is required to adopt fair and reasonable criteria, taking into consideration factors like: (a)
preferred status; (b) efficiency; and (c) seniority, among others.[141] The requirement of fair and reasonable criteria is imposed on the employer to
preclude the occurrence of arbitrary selection of employees to be retrenched. Absent any showing of bad faith, the choice of who should be
retrenched must be conceded to the employer for as long as a basis for the retrenchment exists.[142]

We have found arbitrariness in terminating the employee under the guise of a retrenchment program wherein the employer discarded the criteria it
adopted in terminating a particular employee;[143] when the termination discriminated the employees on account of their union membership without
regard to their years of service;[144] the timing of the retrenchment was made a day before the employee may be regularized;[145] when the employer
disregarded altogether the factor of seniority and choosing to retain the newly hired employees;[146] that termination only followed the previous
retrenchment of two non-regular employees;[147] and when there is no appraisal or criteria applied in the selection.[148]

On the other hand, we have considered as valid the retrenchment of the employee based on work efficiency,[149] or poor performance;[150] or the
margins of contribution of the consultants to the income of the company;[151] or absenteeism, or record of disciplinary action, or efficiency and work
attitude;[152] or when the employer exerted efforts to solicit the employees' participation in reviewing the criteria to be used in selecting the workers to
be laid off.[153]

In fine, the Court will only strike down the retrenchment of an employee as capricious, whimsical, arbitrary, and prejudicial in the absence of a clear-
cut and uniform guideline followed by the employer in selecting him or her from the work pool. Following this standard, PAL validly implemented its
retrenchment program.

PAL resorted to both efficiency rating and inverse seniority in selecting the employees to be subject of termination. As the NLRC keenly pointed out,
the "ICCD Masterank 1997 Ratings - Seniority Listing" submitted by PAL sufficiently established the criteria for the selection of the employees to be
laid off. To insist on seniority as the sole basis for the selection would be unwarranted, it appearing that the applicable CBA did not establish such
limitation. This counters the statement in the dissent that the retrenchment program was based on unreasonable standards without regard to service,
seniority, loyalty and performance.[154]

In this connection, we adopt the following cogent observations by the CA on the matter for being fully in accord with law and jurisprudence:
FASAP insists that several CBA provisions have been violated by the retrenchment. They are the provisions on seniority, performance appraisal,
reduction in personnel and downgrading and permanent OCARs. Seniority and performance stand out because these were the main considerations
of PAL in selecting workers to be retrenched. Under the CBA, seniority is defined "to mean a measure of a regular Cabin Attendant's claim in relation
to other regular Cabin Attendants holding similar positions, to preferential consideration whatever the Company exercises its right to promote to a
higher paying position of lay-off of any Cabin Attendant." Seniority, however, is not the sole determinant of retention. This is clear under Article XIII
on performance appraisal of the CBA provisions.
Under the CBA, several factors are likewise taken into consideration like performance and professionalism in addition to the seniority factor.
However, the criteria for performance and professionalism are not indicated in the CBA but are to be formulated by PAL in consultation with FASAP.
Where there is retrenchment, cabin attendants who fail to attain at least 85% of the established criteria shall be demoted progressively. Domestic
cabin attendants, the occupants of lowest rung of the organizational hierarchy, are to be retrenched once they fail to meet the required percentage.

We have painstakingly examined the records and We find no indication that these provisions have been grossly disregarded as to taint the
retrenchment with illegality. PAL relied on specific categories of criteria, such as merit awards, physical appearance, attendance and checkrides, to
guide its selection of employees to be removed. We do not find anything legally objectionable in the adoption of the foregoing norms. On the
contrary, these norms are most relevant to the nature of cabin attendant's work.

However, the contention of FASAP that these criteria required its prior conformity before adoption is not supported by Section 30, Article VIII of the
CBA. Note should be taken that this provision only mandates PAL to "meet and consult" the Association (FASAP) in the formulation of the
Performance and Professionalism Appraisal System. By the ordinary import of this provision, PAL is only required to confer with FASAP; it is not at
all required to forge an addendum to the CBA, which will concretize the appraisal system as basis for retrenchment or retention.[155]
To require PAL to further limit its criteria would be inconsistent with jurisprudence and the principle of fairness. Instead, we hold that for as long as
PAL followed a rational criteria defined or set by the CBA and existing laws and jurisprudence in determining who should be included in the
retrenchment program, it sufficiently met the standards of fairness and reason in its implementation of its retrenchment program.
D

The retrenched employees signed valid quitclaims

The July 22, 2008 decision struck down as illegal the quitclaims executed by the retrenched employees because of the mistaken conclusion that the
retrenchment had been unlawfully executed.

We reverse.

In EDI Staffbuilders International, Inc. v. National Labor Relations Commission,[156] we laid down the basic contents of valid and effective quitclaims
and waivers, to wit:
In order to prevent disputes on the validity and enforceability of quitclaims and waivers of employees under Philippine laws, said agreements should
contain the following:
1. A fixed amount as full and final compromise settlement;

2. The benefits of the employees if possible with the corresponding amounts, which the employees are giving up in consideration of the fixed
compromise amount;

3. A statement that the employer has dearly explained to the employee in English, Filipino, or in the dialect known to the employees - that by signing
the waiver or quitclaim, they are forfeiting or relinquishing their right to receive the benefits which are due them under the law; and

4. A statement that the employees signed and executed the document voluntarily, and had fully understood the contents of the document and that
their consent was freely given without any threat, violence, duress, intimidation, or undue influence exerted on their person.[157] (Bold supplied for
emphasis)
The release and quitclaim signed by the affected employees substantially satisfied the aforestated requirements. The consideration was clearly
indicated in the document in the English language, including the benefits that the employees would be relinquishing in exchange for the amounts to
be received. There is no question that the employees who had occupied the position of flight crew knew and understood the English language.
Hence, they fully comprehended the terms used in the release and quitclaim that they signed.

Indeed, not all quitclaims are per se invalid or against public policy. A quitclaim is invalid or contrary to public policy only: (1) where there is clear
proof that the waiver was wrangled from an unsuspecting or gullible person; or (2) where the terms of settlement are unconscionable on their face.
[158]
 Based on these standards, we uphold the release and quitclaims signed by the retrenched employees herein.

WHEREFORE, the Court:

(a) GRANTS the Motion for Reconsideration of the Resolution of October 2, 2009 and Second Motion for Reconsideration of the Decision of July 22,
2008 filed by the respondents Philippine Airlines, Inc. and Patria Chiong;

(b) DENIES the Motion for Reconsideration (Re: The Honorable Court's Resolution dated March 13, 2012) filed by the petitioner Flight Attendants
and Stewards Association of the Philippines;

(c) SETS ASIDE the decision dated July 22, 2008 and resolution dated October 2, 2009; and

(d) AFFIRMS the decision of the Court of Appeals dated August 23, 2006.

No pronouncement on costs of suit.

SO ORDERED.

[ G.R. No. 214744, March 14, 2018 ]

LA CONSOLACION COLLEGE OF MANILA, SR. IMELDA A. MORA, OSA, ALBERT D. MANALILI, AND ALICIA MANABAT, PETITIONERS, VS.
VIRGINIA PASCUA, M.D., RESPONDENT.

DECISION

LEONEN, J.:
When termination of employment is occasioned by retrenchment to prevent losses, an employer must declare a reasonable cause or criterion for
retrenching an employee. Retrenchment that disregards an employee's record and length of service is an illegal termination of employment.

This resolves a Petition for Review on Certiorari[1] under Rule 45 of the 1997 Rules of Civil Procedure, praying that the assailed June 2, 2014
Decision[2] and October 8, 2014 Resolution[3] of the Court of Appeals in CA-G.R. SP No. 130793 be reversed and set aside.

The assailed Court of Appeals June 2, 2014 Decision reversed the ruling of the National Labor Relations Commission which, in turn, reversed Labor
Arbiter Luvina P. Roque's (Labor Arbiter Roque) January 8, 2013 Decision,[4] holding that Virginia Pascua's (Pascua) employment was illegally
terminated. The assailed Court of Appeals October 8, 2014 Resolution denied the Motion for Reconsideration file by herein petitioners La
Consolacion College of Manila (La Consolacion), Sr. Imelda A. Mora (Sr. Mora), Albert Manalili (Manalili), and Alicia Manabat (Manabat).

On January 10, 2000, Pascua's services as school physician were engaged by La Consolacion.[5] She started working part-time before serving full-
time from 2008.[6]

On September 29, 2011, Pascua was handed an Inter-Office Memo from Manalili, La Consolacion's Human Resources Division Director, inviting her
to a meeting concerning her "working condition."[7] The meeting was set the following day, September 30, 2011, at the office of La Consolacion's
President, Sr. Mora.[8]

In that meeting, Pascua was handed a termination of employment letter, explaining the reasons for and the terms of her dismissal, including payment
of separation pay as follows:
Due to the current financial situation of La Consolacion College Manila caused by the decrease in enrollment in our institution, the Board of Trustees
in its last meeting of September 24, 2011 has advised the [La Consolacion College] to downsize the health services staff at the end of this 1st
Semester of School Year 2011-2012.

Accordingly, we were forced to eliminate your position as school physician who is rendering thirty-five (35) hours in a week.

It is really with regret that management has to take this decision, as a last resort, to prevent serious business losses.

Your last day of service with La Consolacion College Manila shall be one month after your receipt of this letter.

The payments that you shall be receiving are the computation of your one (1) month pay of the thirty (30) days notice, one-half QA) month of basic
salary for every year of service as a regular employee (as of August 19, 2008), 13th month pay and tax refund.[9]
Not satisfied, Pascua wrote to Sr. Mora, pointing out that the part-time school physician, Dr. Venus Dimagmaliw (Dr. Dimagmaliw),[10] should have
been considered for dismissal first. She also noted that rather than dismissing her outright, La Consolacion could have asked her to revert to part-
time status instead. Pascua sought clarification specifically on the following points:
1. What were your criteria for retrenchment selection?

2. Why was I selected to be terminated (with the status of regular, ful[l-]time School Physician) over my counterpart who is merely a part-time School
Physician without even giving me the option to rever[t] back to my part-time status?

3. How come I was the only one terminated among the health services staff?

4. Were there other cost-cutting measures done by the school to abate its alleged losses other than implementation of that drastic measure of
termination of one (1) employee as in my case?[11]
In the meantime, Pascua underwent La Consolacion's clearance procedures and completed them on November 3, 2011. However, Pascua made a
handwritten note on her Exit Clearance, stating that she was reserving the right "to question the validity/legality of [her] termination . . . before any
agency/court with appropriate jurisdiction over the case."[12] Following this, Pascua proceeded to file a complaint for illegal dismissal against La
Consolacion, Sr. Mora, Manalili, and Manabat.[13]

On November 28, 2011, Sr. Mora replied to Pascua's letter. She indicated the futility of her response considering that Pascua had opted to file a
complaint in the interim. She nevertheless answered Pascua's queries "as a matter of courtesy."[14] She explained that Pascua in particular was
retrenched because her position, the highest paid in the health services division, was dispensable:
One obvious measure to prevent serious business losses was to downsize the health services division, by eliminating your position as a full-time
physician. As you may know, the monthly payroll of the health services division, which consists of five (5) personnel, came to P90,462.34 in basic
salary and P5,550.00 in rice subsidy and transportation allowance. Your item in this payroll was P24,687.10 in basic salary and P850.00 in rice
subsidy and transportation allowance, or about 26% of total payroll.

Since the purpose of the downsizing was to reduce payroll costs, the employees with the highest rates of pay would be the first to be retrenched, if
their services could be dispensed with. For this reason, you were the employee terminated. This same objective criteri[on] was used in downsizing
the nursing faculty which resulted in the retrenchment of the six highest paid faculty members out of a faculty of eleven.[15]
On January 8, 2013, Labor Arbiter Roque[16] rendered a Decision holding that Pascua's employment was illegally terminated and noting that "[La
Consolacion, Sr. Mora, Manalili, and Manabat] failed to justify the criteria used in terminating the employment of [Pascua]."[17] The dispositive portion
of this Decision read:
WHEREFORE, premise[s] considered, judgment is hereby rendered finding the dismissal of complainant Virginia R. Pascua as illegal. Respondent
La Concolacion College, through its responsible officers, is directed to immediately reinstate said complainant to her former position as School
Physician within ten (10) days from receipt of this Decision, and submit compliance top (sic) this Office.

Moreover, respondent college is directed to pay complainant the following sums: (a) backwages from the time of illegal dismissal until actual
reinstatement, which as of this date is computed at P387,225.56 pesos; (b) proportionate 13th month pay in the amount of P20,739.25 pesos; and
attorney's fees in the amount of P40,796.48.

SO ORDERED.[18]
On appeal, the National Labor Relations Commission reversed Labor Arbiter Roque's Decision. It explained the validity of the basis for dismissing
Pascua, as follows:
The primary criterion used in selecting complainant-appellee for termination was valid considering that they faced a substantial drop in income, and
sought to directly address the problem by reducing the larger of the college expenses, such as salaries and allowances of its more expensive staff
members including but not limited to complainant-appel[l]ee.[19]
In its assailed June 2, 2014 Decision,[20] the Court of Appeals reinstated Labor Arbiter Roque's January 8, 2013 Decision.

Following the denial[21] of their Motion for Reconsideration,[22] La Consolacion, Sr. Mora, Manalili, and Manabat filed the present Petition on January
12, 2015.[23]

For resolution is the sole issue of whether or not respondent Virginia Pascua's retrenchment was valid. More specifically, this concerns the issue of
whether or not the reason cited for her retrenchment—that she had the highest rate of pay—justified her dismissal.
I

The Labor Code recognizes retrenchment as an authorized cause for terminating employment.[24] It is an option validly available to an employer to
address "losses in the operation of the enterprise, lack of work, or considerable reduction on the volume of business":[25]
Retrenchment is normally resorted to by management during periods of business reverses and economic difficulties occasioned by such events as
recession, industrial depression, or seasonal fluctuations. It is an act of the employer of reducing the work force because of losses in the operation of
the enterprise, lack of work, or considerable reduction on the volume of business. Retrenchment is, in many ways, a measure of last resort when
other less drastic means have been tried and found to be inadequate.[26] (Citations omitted)
While a legitimate business option, retrenchment may only be exercised in compliance with substantive and procedural requisites.

As to the substantive requisites, an employer must first show "that the retrenchment is reasonably necessary and likely to prevent business losses
which, if already incurred, are not merely de minimis, but substantial, serious, actual and real, or if only expected, are reasonably imminent as
perceived objectively and in good faith by the employer."[27] Second, an employer must also show "that [it] exercises its prerogative to retrench
employees in good faith for the advancement of its interest and not to defeat or circumvent the employees' right to security of tenure."[28] Third, an
employer must demonstrate "that [it] used fair and reasonable criteria in ascertaining who would be dismissed and who would be retained among the
employees, such as status (i.e., whether they are temporary, casual, regular or managerial employees), efficiency, seniority, physical fitness, age,
and financial hardship for certain workers."[29]

Procedurally, employers must serve a "written notice both to the employees and to the Department of Labor and Employment at least one month
prior to the intended date of retrenchment."[30] Likewise, they must pay "the retrenched employees separation pay equivalent to one month pay or at
least 1/2 month pay for every year of service, whichever is higher."[31]
II

Jurisprudence requires that the necessity of retrenchment to stave off genuine and significant business losses or reverses be demonstrated by an
employer's independently audited financial statements. Documents that have not been the subject of an independent audit may very well be self-
serving. Moreover, it is not enough that it presents its audited financial statement for the year that retrenchment was undertaken for even as it may
be incurring losses for that year, its overall financial status may already be improving. Thus, it must "also show that its losses increased through a
period of time and that the condition of the company is not likely to improve in the near future."[32]

The records indicate that La Consolacion suffered serious business reverses or an aberrant drop in its revenue and income, thus, compelling it to
retrench employees. In its Petition, it explained the backdrop of a "sharp spike in enrollment of students in its College of Nursing"[33] in 2008, only for
"[t]he nursing bubble [to] burst."[34] It further explained how its comprehensive income nosedived by 96%:
In this case, petitioners acted in response to an actual drop in enrollment as shown by their documentary attachments. The drop in enrollment and
corresponding drop in income to cover basic operating expenses was not a mere figment of the imagination of the administration. Attached as Annex
"C" of the Appeal at the NLRC which is Annex "I" of the Petition was a summary of the audited financial statements from 2006 to 2011 that show
very clearly the deterioration of income due to decline in enrollment in a long period of time. Also attached were copies of the audited financial
statements of the school from 2008-2012 Annexes "D", "E" and "F" . . . The 2010 audited financial report of SGV (2010 vs. 2009) clearly showed the
decline in total tuition fee revenue from Php 210,355,192 million to Php 155,823,959 million or by a drop of Php 54,531,233 million or twenty-six
[percent] (26%). Moreover the decline in comprehensive income from Php 19,133,158 to [Php] 738,671 or Php 18,394,487 or ninety-six percent
(96%) was very alarming indeed.[35]
As acknowledged by Labor Arbiter Roque,[36] this financial backdrop demonstrates the starkly difficult financial situation besetting La Consolacion.
This also shows that La Consolacion proceeded with a modicum of good faith and not with a stratagem specifically intended to undermine certain
employees' security of tenure.
III

La Consolacion's failure was non-compliance with the third substantive requisite of using fair and reasonable criteria that considered the status and
seniority of the retrenched employee.

As early as 1987, this Court in Asia World Publishing House, Inc. v. Ople[37] considered seniority, along with efficiency rating and less-preferred
status, as a crucial facet of a fair and reasonable criterion for effecting retrenchment.[38] Emcor, Inc. v. Sienes[39] was categorical, a "[r]etrenchment
scheme without taking seniority into account rendered the retrenchment invalid":[40]
Records do not show any criterion adopted or used by petitioner in dismissing respondent. Respondent was terminated without considering her
seniority. Retrenchment scheme without taking seniority into account rendered the retrenchment invalid. While respondent was the third most senior
employee among the 7 employees in petitioner's personnel department, she was retrenched while her other co-employees junior than her were
either retained in the Personnel Department or were transferred to other positions in the company. There was no showing that respondent was
offered to be transferred to other positions.[41] (Citations omitted)
In Philippine Tuberculosis Society, Inc. v. National Labor Union,[42] this Court quoted with approval the following discussion by the National Labor
Relations Commission:
We noted with concern that the criteria used by the Society failed to consider the seniority factor in choosing those to be retrenched, a failure which,
to our mind, should invalidate the retrenchment, as the omission immediately makes the selection process unfair and unreasonable. Things being
equal, retaining a newly hired employee and dismissing one who had occupied the position for years, even if the scheme should result in savings for
the employer, since he would be paying the newcomer a relatively smaller wage, is simply unconscionable and violative of the senior employee's
tenurial rights. In Villena vs. NLRC, 193 SCRA 686. February 7, 1991, the Supreme Court considered the seniority factor an important ingredient for
the validity of a retrenchment program. According to the Court, the following legal procedure should be observed for a retrenchment to be valid: (a)
one-month prior notice to the employee as prescribed by Article 282 of the Labor Code; and b) use of a fair and reasonable criteria in carrying out
the retrenchment program, such as 1) less preferred status (as in the case of temporary employees) 2) efficiency rating, 3) seniority, and 4) proof of
claimed financial losses.[43]
There is no dispute here about respondent's seniority and preferred status. Petitioners acknowledge that she had been employed by La Consolacion
since January 2000, initially as a part-time physician then serving full-time beginning 2008. It is also not disputed that while respondent was a full-
time physician, La Consolacion had another physician, Dr. Dimagmaliw, who served part-time. Precisely, respondent's preeminence is a necessary
implication of the very criteria used by La Consolacion in retrenching her, i.e., that she was the highest paid employee in health services division.

La Consolacion's disregard of respondent's seniority and preferred status relative to a part-time employee indicates its resort to an unfair and
unreasonable criterion for retrenchment.

Indeed, it may have made mathematical sense to dismiss the highest paid employee first. However, appraising the propriety of retrenchment is not
merely a matter of enabling an employer to augment financial prospects. It is as much a matter of giving employees their just due. Employees who
have earned their keep by demonstrating exemplary performance and securing roles in their respective organizations cannot be summarily
disregarded by nakedly pecuniary considerations. The Labor Code's permissiveness towards retrenchments aims to strike a balance between
legitimate management prerogatives and the demands of social justice. Concern for the employer cannot mean a disregard for employees who have
shown not only their capacity, but even loyalty. La Consolacion's pressing financial condition may invite commiseration, but its flawed standard for
retrenchment constrains this Court to maintain that respondent was illegally dismissed.

Besides, La Consolacion could have also modified respondent's status from full-time to part-time. When retrenchment becomes necessary, the
employer may, in the exercise of its business judgment, implement cost-saving measures, but at the same time, should respect labor rights.
IV

While the impropriety of the termination of respondent's employment is settled, it is equally manifest that she "was not a victim of arbitrary and high
handed action."[44] Her dismissal was a result, not so much of purposeful malevolence, but of a flawed appreciation of circumstances. La Consolacion
was contending with dire financial straits and wound up resorting to a monetarily logical, though legally faulty, course of action.

In prior cases, this Court mitigated an employer's liability for backwages "where good faith is evident."[45] In Pepsi-Cola Products Philippines, Inc. v.
Molon:[46]
An illegally dismissed employee is entitled to either reinstatement, if viable, or separation pay if reinstatement is no longer viable, and backwages. In
certain cases, however, the Court has ordered the reinstatement of the employee without backwages considering the fact that (1) the dismissal of
the employee would be too harsh a penalty; and (2) the employer was in good faith in terminating the employee. For instance, in the case of Cruz v.
Minister of Labor and Employment[,] the Court ruled as follows:
The Court is convinced that petitioner's guilt was substantially established. Nevertheless, we agree with respondent Minister's order of reinstating
petitioner without backwages instead of dismissal which may be too drastic. Denial of backwages would sufficiently penalize her for her infractions.
The bank officials acted in good faith. They should be exempt from the burden of paying backwages. The good faith of the employer, when clear
under the circumstances, may preclude or diminish recovery of backwages. Only employees discriminately dismissed are entitled to backpay ...
Likewise, in the case of Itogon-Suyoc Mines, Inc. v. National Labor Relations Commission, the Court pronounced that "[t]he ends of social and
compassionate justice would therefore be served if private respondent is reinstated but without backwages in view of petitioner's good
faith."[47] (Citations omitted)
La Consolacion's prohibitive financial condition and demonstrated, though imperfect, attempt at devising a reasonable mechanism for retrenching
employees impel this Court to temper its liability for backwages. Accordingly, this Court upholds Labor Arbiter Roque's order for respondent to be
reinstated, but modifies the amount of backwages. Respondent is deemed to be employed on a part-time basis from the effective date of her
wrongful termination and is entitled to backwages corresponding to such status and period.

WHEREFORE, the Petition for Review on Certiorari is PARTIALLY GRANTED with respect to the award of backwages and proportionate thirteenth
(13th) month pay. Labor Arbiter Luvina P. Roque's January 8, 2013 Decision is MODIFIED by awarding to respondent Virginia Pascua backwages
corresponding to a part-time physician, reckoned from October 30, 2011.

SO ORDERED.

[ G.R. No. 207354, January 10, 2018 ]

CHARLIE HUBILLA, JOEL NAYRE, NENITA A. TAN, PEDRO MAGALLANES, JR., ARNEL YUSON, JANICE CABATBAT, JUDY PAPINA,
VANESSA ESPIRITU, NOEMI YALUNG, GENALYN RESCOBILLO, FIDEL ZAQUITA, NYL B. CALINGASAN, JANICE MIRADORA, EVANGELINE
CHUA, ROSCHELLE MISSION, MELANIE BALLESTEROS, MARILYN BACALSO, RENALYN ALCANTARA, FEDERICO B. VIERNES,
CHRISTOPHER B. YARES, ANA MARY R. AGUILAR, MELANIE SAN MARCOS, EMERLOVE MONTE, CHONALYN LUCAS, THERESA
MALICOSIO, MA. FE CERCARES, RUBELYN R. CLARO, JONALYN M. YALUNG, MARY ANN V. MACANAG, RESLYN L. FLORES, CRISTEL C.
ROQUE, TERESA G. MUNAR, SUSAN A. DELA CRUZ, SHEENA KAY P. DE VERA, ARLENE R. ANES, GINA B. BINIBINI, CHERINE V. ZORILLA,
MA. CRISTINE MAGTOTO, FRANCIS MARIE O. DE CASTRO, VANESSA R. ESPIRITU, RACHELLE V. QUISTORIA, JULIE ANN ILAN, ANGELIE
F. PANOTES, ANABEL PAYOS, MELISSA M. PERLAS, MELANIE B. BERSES, BARVI ROSE PERALTA, RESIE AQUE, ROWENA RIVERA,
MELANIE M. DY, CHERYLYN CORO, RANELYN SUBONG, ANGELA SUBILLAGA, THELMA BARTOLABAC, MICHELLE C. ILAGAN, PRECIOUS
MAE DE GUZMAN, MARY CAROLINE COLINA, FRELYN HIPOLITO, MYLINE A. CALLOS, JANETH B. SEMBILLO, LEA LYN F. FERRANCO, MAY
C. SANTOS, ROSELLE A. NOBLE, JENNIFER D. SUYOM, WARREN PETCHIE C. CAJES, ROWELYN F. CATALAN, RIEZEL ANN A. ALEGRE,
DEMETRIA B. PEREZ, GENALYN OSOC, JUVILYN N. NERI, JOY B. PIMENTEL, AIRENE LAYON, MARY JOY TURQUEZA, MARY ANN
VALENTIN, ROSIE L. NIEBRES, MELCA MALLORCA, JOY CAGATCAGAT, DIANA CAMARO, MARIVEL DIJUMO, SHEILA DELA CRUZ,
ELIZABETH ARINGO, JENALYN G. DISMAYA, MELANIE G. TRIA, GRETCHEN D. MEJOS, AND JANELIE R. JIMENEZ, PETITIONERS, V. HSY
MARKETING LTD., CO., WANTOFREE ORIENTAL TRADING, INC., COEN FASHION HOUSE AND GENERAL MERCHANDISE, ASIA
CONSUMER VALUE TRADING, INC., FABULOUS JEANS & SHIRT & GENERAL MERCHANDISE, LSG MANUFACTURING CORPORATION,
UNITE GENERAL MERCHANDISE, ROSARIO Q. CO, LUCIA PUN LING YEUNG, AND ALEXANDER ARQUEZA, RESPONDENTS.

DECISION

LEONEN, J.:
When the evidence in labor cases is in equipoise, doubt is resolved in favor of the employee.
This is a Petition for Review on Certiorari[1] assailing the February 25, 2013 Decision[2] and May 30, 2013 Resolution[3] of the Court of Appeals in CA-
GR. SP No. 126522, which upheld the Labor Arbiter's finding that the employees voluntarily terminated their employment. The assailed judgments
also set aside the National Labor Relations Commission's application of the principle of equipoise on the ground that the employees failed to present
any evidence in their favor.
HSY Marketing Ltd., Co., Wantofree Oriental Trading, Inc., Coen Fashion House and General Merchandise, Asia Consumer Value Trading, Inc.,
Fabulous Jeans & Shirt & General Merchandise, LSG Manufacturing Corporation, Unite General Merchandise, Rosario Q. Co, Lucia Pun Lin Yeung,
and Alexander Arqueza (respondents) are engaged in manufacturing and selling goods under the brand Novo Jeans & Shirt & General Merchandise
(Novo Jeans).[4]
Sometime in May 2010 and June 2010, several Novo Jeans employees[5] went to Raffy Tulfo's radio program to air their grievances against their
employers for alleged labor violations. They were referred to the Department of Labor and Employment Camanava Regional Office.[6]
These employees claimed that on June 7, 2010, they were not allowed to enter the Novo Jeans branches they were employed in. They further
averred that while Novo Jeans sent them a show cause letter the next day, they were in truth already dismissed from employment. They sent a
demand letter on July 19, 2010 to amicably settle the case before the Department of Labor and Employment but no settlement was reached. They
alleged that upon learning that the Department of Labor and Employment was not the proper forum to address their grievances, they decided to file a
notice of withdrawal and file their complaint with the Labor Arbiter.[7]
On the other hand, Novo Jeans claimed that these employees voluntarily severed their employment but that they filed complaints later with the
Department of Labor and Employment. They alleged that the employees' notice of withdrawal was not actually granted by the Department of Labor
and Employment but that the employees nonetheless filed their complaints before the Labor Arbiter.[8]
On May 31, 2011, Labor Arbiter Arden S. Anni rendered a Decision[9] dismissing the complaints. He found that other than the employees' bare
allegations that they were dismissed from June 6 to 9, 2010, they did not present any other evidence showing that their employment was terminated
or that they were prevented from reporting for work.[10] The Labor Arbiter likewise ruled that the employees voluntarily severed their employment
since the airing of their grievances on Raffy Tulfo's radio program "[was] enough reason for them not to report for work, simply because of a possible
disciplinary action by [Novo Jeans]."[11] The dispositive portion of the Labor Arbiter Decision read:
WHEREFORE, PREMISES CONSIDERED, judgment is hereby rendered DISMISSING the above-captioned consolidated cases for utter lack of
merit and for forum-shopping.
SO ORDERED.[12]
The employees appealed to the National Labor Relations Commission.[13]
On June 25, 2012, the National Labor Relations Commission rendered a Decision[14] reversing that of the Labor Arbiter and finding that the
employees were illegally dismissed. It ruled that the allegations of both parties "were unsubstantiated and thus [were] equipoised" and that "if doubt
exists between the evidence presented by the employer and that by the employee, the scales of justice must be tilted in favor of the latter."[15] The
dispositive portion of the National Labor Relations Commission Decision read:
WHEREFORE, premises considered, judgment is hereby rendered finding the appeal meritorious with respect to the issue of illegal dismissal.
Complainants-appellants' respective employers are hereby found liable, jointly and severally, to pay complainants-appellants their backwages and
separation pay plus ten percent thereof as attorney's fees. Accordingly, the decision of the Labor Arbiter dated May 31, 2011 is hereby MODIFIED.
All other dispositions STANDS (sic) undisturbed.
The computation of the aforesaid awards is as follows:
....
TOTAL AWARD Php30,969,426.00
SO ORDERED.[16]
Novo Jeans moved for partial reconsideration[17] but was denied by the National Labor Relations Commission in its August 24, 2012 Resolution.
[18]
 Thus, it filed a Petition for Certiorari[19] with the Court of Appeals.
On February 25, 2013, the Court of Appeals rendered a Decision[20] reversing the Decision of the National Labor Relations Commission and
reinstating the Labor Arbiter Decision. The Court of Appeals found that Novo Jeans' counsel, as the affiant, substantially complied with the
verification requirement even if his personal knowledge was based on facts relayed to him by his clients and on authentic records since he was not
privy to the antecedents of the case.[21]
The Court of Appeals stated that while the employees merely alleged that they were no longer allowed to report to work on a particular day, Novo
Jeans was able to present the First Notice of Termination of Employment sent to them, asking them to explain their sudden absence from work
without proper authorization. It likewise found that the Notices of Termination of Employment (Notices) did not indicate that the employees were
dismissed or that they were prevented from entering the stores.[22]
According to the Court of Appeals, the equipoise rule was inapplicable in this case since it only applied when the evidence between the parties was
equally balanced. Considering that only Novo Jeans was able to present proof of its claims, the Court of Appeals was inclined to rule in its favor.
[23]
 Thus, the Court of Appeals concluded that the case involved voluntary termination of employment, not illegal dismissal.[24] The dispositive portion
of its Decision read:
WHEREFORE, in view of the foregoing, the instant Petition is hereby GRANTED. The assailed Decision dated June 25, 2012 and Resolution dated
August 24, 2012 rendered by the National Labor Relations Commission in NLRC LAC No. 07-001930-11/NLRC NCR Cases No. 08-10645-10, 08-
10649-10, 08-10655-10, 08-10660-10, 08-10662-10, 08-10666-10 and 08-10670-10 are hereby REVERSED and SET ASIDE. Corollarily, the
Decision dated May 31, 2011 rendered by the Labor Arbiter is hereby REINSTATED.
SO ORDERED.[25]
The employees filed a Motion for Reconsideration[26] but it was denied in the Court of Appeals May 30, 2013 Resolution.[27] Hence, this Petition[28] was
filed before this Court.
Petitioners point out that the Court of Appeals erred in not finding grave abuse of discretion, considering that the petition filed before it was a special
civil action for certiorari. They aver that the Court of Appeals should not have used the special remedy of certiorari merely to re-evaluate the findings
of a quasi-judicial body absent any finding of grave abuse of discretion.[29]
Petitioners likewise argue that respondents were unable to substantially comply with the verification requirement before the Court of Appeals. They
submit that respondents' counsel would have been privy to the antecedents of the case so as to have personal knowledge and not merely knowledge
as relayed by his clients.[30] They add that respondents "deliberately withheld the Annexes of the Position Paper of the Petitioners submitted to the
Labor Arbiter[;] hence, said Position Paper cannot be considered authentic."[31]
Petitioners assert that the Court of Appeals had no factual basis to rule in respondents' favor since there was no evidence to prove that the Notices
were sent to petitioners at their last known addresses. The evidence on record merely showed sample letters of the Notices.[32] Petitioners maintain
that this is a situation where the employees allege that they were prevented from entering their work place and the employer alleges otherwise. They
insist that if doubt exists between the evidence presented by the employer and the evidence presented by the employees, the doubt must be
resolved in favor of the employees, consistent with the Labor Code's policy to afford protection to labor.[33]
On the other hand, respondents argue that a defect in the verification will not necessarily cause the dismissal of the pleading and that they had
sufficiently complied with the requirement when the affiant attested that the petition was based on facts relayed by his clients and on authentic
records.[34] They also point out that only relevant and pertinent documents should be attached to their pleadings before the courts; thus, the annexes
of petitioner, not being relevant or pertinent, need not be attached to their pleadings.[35]
Respondents contend that the Court of Appeals recognized that the issue in their Petition for Certiorari concerned the alleged grave abuse of
discretion of the National Labor Relations Commission and thoroughly discussed the issue in the assailed judgment.[36] They likewise submit that the
Court of Appeals may review factual findings of the National Labor Relations Commission since the finding of grave abuse of discretion requires a re-
examination of the sufficiency or absence of evidence.[37]
Respondents maintain that the receipt of the Notices was admitted and recognized by the parties before the Labor Arbiter and was never brought as
an issue until the National Labor Relations Commission made a finding that the Notices were never received.[38] According to respondents,
petitioners were estopped from questioning the receipt of the Notices when they already admitted to their receipt before the Labor Arbiter.[39] They
argue that the Labor Arbiter and the Court of Appeals did not err in finding that the termination of employment was voluntary since petitioners failed
to present evidence of the fact of their dismissal.[40]
The main issue before this Court is whether or not petitioners were illegally dismissed by respondents. However, there are certain procedural issues
that must first be addressed, in particular: (1) whether or not the Court of Appeals may, in a petition for certiorari, review and re-assess the factual
findings of the National Labor Relations Commission; and (2) whether or not verification based on facts relayed to the affiant by his clients is valid.
I
Before discussing the merits of the case, this Court takes this opportunity to clarify certain doctrines regarding the review of factual findings by the
Court of Appeals.
Factual findings of labor officials exercising quasi-judicial functions are accorded great respect and even finality by the courts when the findings are
supported by substantial evidence.[41] Substantial evidence is "the amount of relevant evidence which a reasonable mind might accept as adequate
to support a conclusion."[42] Thus, in labor cases, the issues in petitions for certiorari before the Court of Appeals are limited only to whether the
National Labor Relations Commission committed grave abuse of discretion.
However, this does not mean that the Court of Appeals is conclusively bound by the findings of the National Labor Relations Commission. If the
findings are arrived at arbitrarily, without resort to any substantial evidence, the National Labor Relations Commission is deemed to have gravely
abused its discretion:
On this matter, the settled rule is that factual findings of labor officials, who are deemed to have acquired expertise in matters within their jurisdiction,
are generally accorded not only respect but even finality by the courts when supported by substantial evidence, i.e., the amount of relevant evidence
which a reasonable mind might accept as adequate to support a conclusion. We emphasize, nonetheless, that these findings are not infallible. When
there is a showing that they were arrived at arbitrarily or in disregard of the evidence on record, they may be examined by the courts. The [Court of
Appeals] can then grant a petition for certiorari if it finds that the [National Labor Relations Commission], in its assailed decision or resolution, has
made a factual finding that is not supported by substantial evidence. It is within the jurisdiction of the [Court of Appeals], whose jurisdiction over labor
cases has been expanded to review the findings of the [National Labor Relations Commission].[43]
The Court of Appeals may also review factual findings if quasi judicial agencies' findings are contradictory to its own findings.[44] Thus, it must re-
examine the records to determine which tribunal's findings were supported by the evidence.
In this instance, the Labor Arbiter and the National Labor Relations Commission made contradictory factual findings. Thus, it was incumbent on the
Court of Appeals to re-examine their findings to resolve the issues before it. The Court of Appeals also found that the findings of the National Labor
Relations Commission were not supported by substantial evidence, and therefore, were rendered in grave abuse of discretion.
Thus, in the determination of whether the National Labor Relations Commission committed grave abuse of discretion, the Court of Appeals may re-
examine facts and re-assess the evidence. However, its findings may still be subject to review by this Court.
This Court notes that in cases when the Court of Appeals acts as an appellate court, it is still a trier of facts. Questions of fact may still be raised by
the parties. If the parties raise pure questions of law, they may directly file with this Court. Moreover, contradictory factual findings between the
National Labor Relations Commission and the Court of Appeals do not automatically justify this Court's review of the factual findings. They merely
present a prima facie basis to pursue the action before this Court. The need to review the Court of Appeals' factual findings must still be pleaded,
proved, and substantiated by the party alleging their inaccuracy. This Court likewise retains its full discretion to review the factual findings.
II
All petitions for certiorari are required to be verified upon filing.[45] The contents of verification are stated under Rule 7, Section 4 of the Rules of
Court:
Section 4. Verification. Except when otherwise specifically required by law or rule, pleadings need not be under oath, verified or accompanied by
affidavit.
A pleading is verified by an affidavit that the affiant has read the pleading and that the allegations therein are true and correct of his personal
knowledge or based on authentic records.
A pleading required to be verified which contains a verification based on "information and belief", or upon "knowledge, information and belief," or
lacks a proper verification, shall be treated as an unsigned pleading.
Thus, for a pleading to be verified, the affiant must attest that he or she has read the pleading and that the allegations are true and correct based on
his or her personal knowledge or on authentic records. Otherwise, the pleading is treated as an unsigned pleading.
Shipside Incorporation v. Court of Appeals[46] required that the assurance should "not [be] the product of the imagination or a matter of speculation,
and that the pleading is filed in good faith."[47] However, verification is merely a formal, not jurisdictional, requirement. It will not result in the outright
dismissal of the case since courts may simply order the correction of a defective verification.[48]
Petitioners argue that respondents' verification was invalid since it was not based on authentic records, alleging that respondents' failure to attach
petitioners' position paper annexes to their Petition for Certiorari before the Court of Appeals made their records inauthentic.[49]
A pleading may be verified by attesting that the allegations are based either on personal knowledge and on authentic records, or on personal
knowledge or  on authentic records. The use of either, however, is not subject to the affiant's whim but rather on the nature of the allegations being
attested to. Circumstances may require that the affiant attest that the allegations are based only on personal knowledge or only on authentic records.
Certainly, there can be situations where the affiant must attest to the allegations being based on both personal knowledge and on authentic records,
thus:
A reading of the above-quoted Section 4 of Rule 7 indicates that a pleading may be verified under either of the two given modes or under both. The
veracity of the allegations in a pleading may be affirmed based on either one's own personal knowledge or on authentic records, or both, as
warranted. The use of the [conjunction] "or" connotes that either source qualifies as a sufficient basis for verification and, needless to state, the
concurrence of both sources is more than sufficient. Bearing both a disjunctive and conjunctive sense, this parallel legal signification avoids a
construction that will exclude the combination of the alternatives or bar the efficacy of any one of the alternatives standing alone.
Contrary to petitioner's position, the range of permutation is not left to the pleader's liking, but is dependent on the surrounding nature of the
allegations which may warrant that a verification be based either purely on personal knowledge, or entirely on authentic records, or on both sources.
[50]
Authentic records may be the basis of verification if a substantial portion of the allegations in the pleading is based on prior court proceedings.
[51]
 Here, the annexes that respondents allegedly failed to attach are employee information, supporting documents, and work-related documents
proving that petitioners were employed by respondents.[52] The fact of petitioners' employment, however, has not been disputed by respondents.
These documents would not have been the "relevant and pertinent"[53] documents contemplated by the rules.
Petitioners likewise contend that respondents' Petition for Certiorari[54] before the Court of Appeals should not have been given due course since the
verification[55] signed by respondents' counsel, Atty. Eller Roel I. Daclan (Atty. Daclan), attested that:
2. I caused the preparation of the foregoing petition and attest that, based upon facts relayed to me by my clients and upon authentic records made
available, all the allegations contained therein are true and correct[.][56]
Thus, the issue on verification centers on whether the phrase "based upon facts relayed to me by my clients" may be considered sufficient
compliance. To resolve this issue, this Court must first address whether respondents' counsel may sign the verification on their behalf.
The rules on compliance with the requirement of the verification and certification of non-forum shopping were already sufficiently outlined in Altres v.
Empleo,[57] where this Court stated:
For the guidance of the bench and bar, the Court restates in capsule form the jurisprudential pronouncements already reflected above respecting
non-compliance with the requirements on, or submission of defective, verification and certification against forum shopping:
1) A distinction must be made between non-compliance with the requirement on or submission of defective verification, and non compliance with the
requirement on or submission of defective certification against forum shopping.
2) As to verification, non-compliance therewith or a defect therein does not necessarily render the pleading fatally defective. 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.
3) 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.
4) As to certification against forum shopping, non-compliance therewith or a defect therein, unlike in verification, is generally not curable by its
subsequent submission or correction thereof, unless there is a need to relax the Rule on the ground of "substantial compliance" or presence of
"special circumstances or compelling reasons".
5) The certification against forum shopping must be signed by all the plaintiffs or petitioners in a case; otherwise, those who did not sign will be
dropped as parties to the case. Under reasonable or justifiable circumstances, however, as when all the plaintiffs or petitioners share a common
interest and invoke a common cause of action or defense, the signature of only one of them in the certification against forum shopping substantially
complies with the Rule.
6) Finally, the certification against forum shopping must be executed by the party-pleader, not by his counsel. If, however, for reasonable or
justifiable reasons, the party-pleader is unable to sign, he must execute a Special Power of Attorney designating his counsel of record to sign on his
behalf.[58]
The policy behind the requirement of verification is to guard against the filing of fraudulent pleadings. Litigants run the risk of perjury[59] if they sign the
verification despite knowledge that the stated allegations are not true or are products of mere speculation:
Verification is not an empty ritual or a meaningless formality. Its import must never be sacrificed in the name of mere expedience or sheer caprice.
For what is at stake is the matter of verity attested by the sanctity of an oath to secure an assurance that the allegations in the pleading have been
made in good faith, or are true and correct and not merely speculative.[60]
Thus, for verification to be valid, the affiant must have "ample knowledge to swear to the truth of the allegations in the complaint or petition."[61] Facts
relayed to the counsel by the client would be insufficient for counsel to swear to the truth of the allegations in a pleading. Otherwise, counsel would
be able to disclaim liability for any misrepresentation by the simple expediency of stating that he or she was merely relaying facts with which he or
she had no competency to attest to. For this reason, the Rules of Court require no less than personal  knowledge of the facts to sufficiently verify a
pleading.
Respondents' counsel, not having sufficient personal knowledge to attest to the allegations of the pleading, was not able to validly verify the facts as
stated. Therefore, respondents' Petition for Certiorari before the Court of Appeals should have been considered as an unsigned pleading.
Respondents' certification of non-forum shopping is likewise defective. The certification of non-forum shopping must be signed by the litigant, not his
or her counsel. The litigant may, for justifiable reasons, execute a special power of attorney to authorize his or her counsel to sign on his or her
behalf.[62] In this instance, the verification and certification against forum shopping[63] was contained in one (1) document and was signed by
respondents' counsel, Atty. Daclan.
Corporations, not being natural persons, may authorize their lawyers through a Secretary's Certificate to execute physical acts. Among these acts is
the signing of documents, such as the certification against forum shopping. A corporation's inability to perform physical acts is considered as a
justifiable reason to allow a person other than the litigant to sign the certification against forum shopping.[64] By the same reasoning, partnerships,
being artificial entities, may also authorize an agent to sign the certification on their behalf.
Respondents include three (3) corporations, one (1) partnership, and three (3) sole proprietorships. Respondents LSG Manufacturing Corporation,
Asia Consumer Value Trading, Inc., and Wantofree Oriental Trading, Inc. submitted Secretary's Certificates[65] authorizing Atty. Daclan to sign on
their behalf. On the other hand, respondent HSY Marketing Ltd., Co. submitted a Partnership Certification.[66] Meanwhile, respondents Alexander
Arqueza (Arqueza), proprietor of Fabulous Jeans and Shirt and General Merchandise, Rosario Q. Co (Co), proprietor of Unite General Merchandise,
and Lucia Pun Ling Yeung (Yeung), proprietor of Coen Fashion House & General Merchandise, submitted Special Powers of Attorney[67] on their
behalf.
However, sole proprietorships, unlike corporations, have no separate legal personality from their proprietors.[68] They cannot claim the inability to do
physical acts as a justifiable circumstance to authorize their counsel to sign on their behalf. Since there was no other reason given for authorizing
their counsel to sign on their behalf, respondents Arqueza, Co, and Yeung's certification against forum shopping is invalid.
While courts may simply order the resubmission of the verification or its subsequent correction,[69] a defect in the certification of non-forum shopping
is not curable[70] unless there are substantial merits to the case.[71]
However, respondents' Petition for Certiorari before the Court of Appeals was unmeritorious. Thus, its defective verification and certification of non-
forum shopping should have merited its outright dismissal.
III
When the evidence of the employer and the employee are in equipoise, doubts are resolved in favor of labor.[72] This is in line with the policy of the
State to afford greater protection to labor.[73]
Petitioners allege that they were illegally dismissed from service when they were prevented from entering their work premises a day after airing their
grievance in a radio show. On the other hand, respondents deny this allegation and state that petitioners were never dismissed from employment.
In illegal dismissal cases, the burden of proof is on the employer to prove that the employee was dismissed for a valid cause and that the employee
was afforded due process prior to the dismissal.[74]
Respondents allege that there was no dismissal since they sent petitioners a First Notice of Termination of Employment, asking them to show cause
why they should not be dismissed for their continued absence from work. However, petitioners argue that this evidence should not be given weight
since there is no proof that they received this Notice.
Indeed, no evidence has been presented proving that each and every petitioner received a copy of the First Notice of Termination of Employment.
There are no receiving copies or acknowledgement receipts. What respondents presented were "Sample Letters of Respondents"[75] and not the
actual Notices that were allegedly sent out.
While petitioners admitted that the Notices may have been sent, they have never actually admitted to receiving any of them. In their Position Paper
before the Labor Arbiter and in their Memorandum of Appeal before the National Labor Relations Commission:
On June 7, 2010, all employees who went to complain against the respondent[s] were not allowed to enter the stores of respondent[s]. The next day,
respondent[s] sent letter[s] to the employees purporting to be a show cause letter but the truth of the matter is that all employees who went to the
office of Tulfo to complain against the respondent[s] were already terminated[.][76]
The lack of evidence of petitioners' receipts suggests that the Notices were an afterthought, designed to free respondents from any liability without
having to validly dismiss petitioners.
There is likewise no proof that petitioners abandoned their employment. To constitute abandonment, the employer must prove that "first, the
employee must have failed to report for work or must have been absent without valid or justifiable reason; and second, [that] there must have been a
clear intention on the part of the employee to sever the employer-employee relationship manifested by some overt act."[77]
Abandonment is essentially a matter of intent. It cannot be presumed from the occurrence of certain equivocal acts.[78] There must be a positive and
overt act signifying an employee's deliberate intent to sever his or her employment. Thus, mere absence from work, even after a notice to return, is
insufficient to prove abandonment.[79] The employer must show that the employee unjustifiably refused to report for work and that the employee
deliberately intended to sever the employer-employee relation. Furthermore, there must be a concurrence of these two (2) elements.[80] Absent this
concurrence, there can be no abandonment.
Respondents have not presented any proof that petitioners intended to abandon their employment. They merely alleged that petitioners have already
voluntarily terminated their employment due to their continued refusal to report for work. However, this is insufficient to prove abandonment.
Where both parties in a labor case have not presented substantial evidence to prove their allegations, the evidence is considered to be in equipoise.
In such a case, the scales of justice are tilted in favor of labor. Thus, petitioners are hereby considered to have been illegally dismissed.
This Court notes that had petitioners been able to substantially prove their dismissal, it would have been rendered invalid not only for having been
made without just cause[81] but also for being in violation of their constitutional rights. A laborer does not lose his or her right to freedom of expression
upon employment.[82] This is "[a] political [right] essential to man's enjoyment of his [or her] life, to his [or her] happiness, and to his [or her] full and
complete fulfillment."[83] While the Constitution and the courts recognize that employers have property rights that must also be protected, the human
rights of laborers are given primacy over these rights. Property rights may prescribe. Human rights do not.[84]
When laborers air out their grievances regarding their employment in a public forum, they do so in the exercise of their right to free expression. They
are "fighting for their very survival, utilizing only the weapons afforded them by the Constitution—the untrammelled enjoyment of their basic human
rights."[85] Freedom and social justice afford them these rights and it is the courts' duty to uphold and protect their free exercise. Thus, dismissing
employees merely on the basis that they complained about their employer in a radio show is not only invalid, it is unconstitutional.
However, there not being sufficient proof that the dismissal was meant to suppress petitioners' constitutional rights, this Court is constrained to limit
its conclusions to that of illegal dismissal under the Labor Code.
Petitioners were not dismissed under any of the causes mentioned in Article 279 [282][86] of the Labor Code. They were not validly informed of the
causes of their dismissal. Thus, their dismissal was illegal.
An employee who is found to have been illegally dismissed is entitled to reinstatement without loss of seniority rights and other privileges.[87] If
reinstatement proves to be impossible due to the strained relations between the parties, the illegally dismissed employee is entitled instead to
separation pay.[88]
WHEREFORE, the Petition is GRANTED. The February 25, 2013 Decision and May 30, 2013 Resolution of the Court of Appeals in CA-GR. SP No.
126522 are SET ASIDE. Respondents are DIRECTED to reinstate petitioners to their former positions without loss of seniority rights or other
privileges.
SO ORDERED.

[ G.R. No. 225803, July 02, 2018 ]

SHERYLL R. CABAÑAS, PETITIONER, VS. ABELARDO G. LUZANO LAW OFFICE/ABELARDO G. LUZANO, RESPONDENTS.

DECISION

PERALTA, J.:

This is a petition for review on certiorari of the Decision[1] of the Court of Appeals dated April 21, 2016, annulling and setting aside the
Decision[2] dated June 30, 2014 of the National Labor Relations Commission (NLRC), Sixth Division and dismissing herein petitioner Sheryll R.
Cabañas' complaint for illegal dismissal and money claims.

The facts are as follows:

On October 1, 2013, petitioner Sheryll Cabañas filed before the NLRC a Complaint for illegal dismissal and money claims against herein respondent
Abelardo G. Luzano Law Office and its manager, Mary Ann Z. Detera. Respondent Law Office is a service provider for the Bank of the Philippine
Islands, Banco de Oro, Rizal Commercial Banking Corporation and Unionbank of the Philippines in the collection of delinquent credit cards and
personal loan accounts.

In her Position Paper,[3] complainant-herein petitioner Cabañas stated that she was employed as an Administrative Secretary for respondent
Abelardo G. Luzano Law Office from June 27, 2012 to September 18, 2013. She was tasked to act as receptionist/lawyer's staff, monitor petty cash
disbursements and office employees, make demand letters and do other clerical tasks. Her performance was satisfactory as she was employed as a
regular employee on [January 30, 2013] per her employment contract.[4]

In June 2013, Cabañas received a final warning in a Memorandum[5] dated June 18, 2013. The memorandum notified her that her performance as
Administrative Secretary failed to meet the performance requirements of the position due to the following: (1) erroneous entry of data for the
liquidation of petty cash; (2) erroneous computation of accounts for mailing; (3) erroneous breakdown of expenses for cash payments; (4)
instructions from colleagues are not being strictly followed; and (5) not strict in releasing gas allowance for skiptracers. Cabañas was warned that a
similar violation in the future would mean termination of her employment.

At this point, Cabañas said that the office manager, Mary Ann Detera, began meddling with her office equipment. Detera would also lose her
requests relating to the demand letters that she (Cabañas) prepares. She was even asked to cover-up irregularities.
Cabañas stated that as she was in charge of the petty cash disbursements, which was used to defray the transport expenses of skiptracers or
messengers, she would ask for receipts for the disbursements of Jomari Delos Santos, a messenger assigned to Detera. Detera wanted her to
cover-up any irregularity which may have been committed by her messenger and not report the same to Mrs. Ivy Theresa Buenaventura, the
General Manager, who was also the daughter of Atty. Abelardo G. Luzano (Atty. Luzano).  Cabañas refused to do Detera's wishes. Thus, Detera's
angry actuation began toward Cabañas.

Cabañas alleged that Detera would fail to report Mr. Delos Santos' absences, which placed Cabañas in a delicate situation as Mrs. Buenaventura
would ask her regarding Mr. Delos Santos' absences. Mr. Delos Santos would also ask Cabañas for transportation expenses, but he would take
three to four days to liquidate the said expenses. Detera would also belatedly submit receipts for liquidating the petty cash disbursements. It was
Cabañas who bore the ire of her superiors for the delay. Cabañas said that she endured this ordeal as she wanted to remain employed.

On September 1, 2013, Cabañas stated that she was summoned to the office of Atty. Luzano. Atty. Luzano and his daughter and General Manager,
Mrs. Buenaventura, asked her to resign and execute a resignation letter, but she did not do so.

On September 18, 2013, while Cabañas was on vacation leave, her officemate Josephine Santos told her that Detera went through her (Cabañas')
box containing letters she had prepared.

On September 19, 2013, Cabañas received another Memorandum of even date with the subject: "Notice of Termination," alleging her commission of
the following infractions: (1) erroneous computation of accounts for mailing; (2) erroneous encoding of petty cash liquidation report; (3) erroneous
breakdown of expenses for cash payments; (4) instructions from superiors and collectors are not being strictly followed; (5) careless releasing of gas
allowance for skiptracers; (6) erroneous filing of court orders to the wrong case folders; (7) erroneous photocopying of a different legal document; (8)
reproduction of excessive copies of documents for case filing; (9) wastage of company resources such as paper and ink due to failure to request for
mailing expenses for demand letters printed in August 2013; and (10) erroneous listing for mailing of a new batch of accounts, which were not
included in the actual count of the printed demand letters on September 18, 2013.

Cabañas was given up to the close of office hours of the next day, Friday, September 20, 2013, to submit her explanation why her employment will
not be terminated due to gross incompetence and negligence.

According to Cabañas, she verbally explained her side to Atty. Luzano and informed him that Detera was going through her work. Atty. Luzano
advised her to prepare an incident report.

At 6:00 p.m. of the same day, September 19, 2013, Cabañas stated that she was summoned by Atty. Luzano. He asked her to execute a resignation
letter, but Cabañas refused to do so.

The next day, September 20, 2013, Cabañas submitted her explanation letter to the charges against her contained in the Memorandum dated
September 19, 2013. She spoke with Atty. Luzano and inquired why she was no longer given any work and she was not informed that she already
had a replacement. Atty. Luzano informed her that the same date was her last day of work and that her salary would just be deposited in her
account. However, on September, 30, 2013, no salary was deposited in her ATM account.

On October 1, 2013, Cabañas filed a complaint for illegal dismissal and the payment of her monetary claims against respondents.

During the mediation conferences, respondents offered a settlement, but this did not push through. Hence, both parties were required to submit their
respective Position Paper and Reply.

Cabañas contended that it was undeniable that she was an employee of respondent Law Office. On September 19, 2013, a memorandum was
issued asking her to explain her side, but when she submitted her explanation the following day, September 20, 2013, she was there and then
dismissed, which was tantamount to illegal dismissal. Moreover, her salary was not given on September 30, 2013 as promised. She prayed that a
judgment be rendered that she was illegally dismissed and entitled to the following money claims: nonpayment of service incentive leave, 13th month
pay, backwages and separation pay.

On the other hand, respondents contended in their Position Paper[6] that Cabañas was not terminated from her employment, but she abandoned her
work.

Respondents stated that in the early part of 2013, Cabañas' job performance deteriorated; thus, she was repeatedly admonished to be careful and
avoid repetition of her errors in the liquidation of petty cash, computation of accounts for mailing, and in the breakdown of cash payments. She was
admonished for repeatedly failing to follow the instructions of her superiors, doing things incorrectly, and being very lax and incorrectly releasing
amounts for gas allowances of the company's motorized skiptracers as well as the unintelligible filing of papers and folders of accounts assigned to
her.

Cabañas' job performance did not improve despite repeated warnings; thus, Cabañas was given a final warning in a Memorandum[7] dated June 18,
2013 that a similar violation in the future would mean termination of her employment. Since the final warning did not work, a Memorandum[8] dated
September 19, 2013 was issued, requiring Cabañas to explain why her employment will not be terminated due to gross incompetence and
negligence.

On September 20, 2013, a Friday, Cabañas submitted her written explanation on the charges contained in the Memorandum dated September 19,
2013. The following Monday, September 23, 2013, she stopped reporting for work. Since she abandoned her work and went on absence without
leave, respondents' decision whether to terminate her or not became moot and academic.

Respondents prayed for the dismissal of the complaint.

Cabañas filed her Reply,[9] maintaining that she did not abandon her work. She averred that other than the fact that she was asked to execute a
resignation letter, which she refused to do, she was also asked on September 20, 2013 to turn over all the files assigned to her to respondents' Head
Administrative Assistant Antoinette Castro. She asserted that she was not absent without leave (AWOL), because respondents terminated her
employment; hence, she is entitled to her monetary claims.
In their Reply[10] to complainant-herein petitioner Cabañas' Position Paper, respondents reiterated that they did not force complainant to resign, and
that complainant was not dismissed, but she abandoned her work.

In a Decision[11] dated March 27, 2014, Labor Arbiter Marcial Galahad T. Makasiar held that Cabañas was illegally dismissed and ordered
respondents to pay her backwages, separation pay, service incentive leave pay and 13th month pay.

The Labor Arbiter held that in termination cases, the employer has the onus probandi to prove, by substantial evidence, that the dismissal of an
employee is due to a just cause. Failure to discharge this burden would be tantamount to an unjustified and illegal dismissal. He cited Kams
International, Inc., et al. v. NLRC, et al.,[12] which held that abandonment of work does not per se sever the employer-employee relationship. It is
merely a form of neglect of duty, which is in turn a just cause for termination of employment.[13] The operative act that will ultimately put an end to this
relationship is the dismissal of the employee after complying with the procedure prescribed by law.[14] In this case, Cabañas was served a
memorandum-notice regarding her performance. However, in regard to the ground of abandonment, neither notice to explain nor notice of
termination was issued. Moreover, Cabañas' commencement of an action for illegal dismissal was proof of her desire to return to work, negating
abandonment of her work.

The dispositive portion of the Decision of the Labor Arbiter reads:

The dispositive portion of the Decision of the Labor Arbiter reads:

xxxx
FALLO

ACCORDINGLY, the termination of complainant's employment is declared illegal. Respondent Atty. Abelardo G. Luzano is ordered to pay
complainant:
a. SEPARATION PAY of PhP23,712.00
b. BACKWAGES of PhP169,540.80;
c. SERVICE INCENTIVE LEAVE PAY of PhP2,798.70;
d. 13th MONTH PAY of PhP14,553.24;

The foregoing awards shall be subject to 5% withholding tax upon payment/execution only where the same is applicable.

Respondents's claim of damages is DENIED for lack of merit.

SO ORDERED.[15]

Respondents appealed the Decision of the Labor Arbiter to the NLRC.

In a Decision[16] dated June 30, 2014, the NLRC affirmed the Decision of the Labor Arbiter and dismissed the appeal.

The NLRC considered the Memorandum dated September 19, 2013, with the subject: "Notice of Termination," as a termination letter. It held that
Cabañas was terminated on the basis of her poor and unsatisfactory performance particularly in her quality of work and job knowledge. However, the
NLRC found that the acts alleged in the memorandum to have been committed by Cabañas have not been proven nor substantiated by respondents
for these reasons: (1) respondents have not shown any company policy which provides that the commission of any of the alleged acts shall be dealt
with the penalty of dismissal from employment to bolster their claim against Cabañas; and (2) other than respondents' self-serving statements that
Cabañas showed gross incompetence and negligence in the performance of her tasks, no convincing proof was offered to substantiate Cabañas'
alleged negligence or incompetence.

The NLRC noted that Cabañas was employed by respondents since June  27, 2012 until her dismissal on September 19, 2013, or more than a year
and three (3) months. Had Cabañas exhibited gross incompetence and negligence in her work, respondents should not have extended her
employment upon completion of her probationary contract of employment.

Moreover, the NLRC stated that while respondents argued that in the early part of 2013, they repeatedly admonished and verbally warned Cabañas
of her poor performance, there was no single evidence presented to show the particular errors allegedly committed by her.

Further, the NLRC did not agree with respondents' contention that Cabañas was not dismissed from employment, but she voluntarily severed her
employment through abandonment. It held, thus:
Abandonment is a form of neglect of duty, one of the just causes for an employer to terminate an employee. It is a hornbook precept that in illegal
dismissal cases, the employer bears the burden of proof. For a valid termination of employment on the ground of abandonment, the employer must
prove, by substantial evidence, the concurrence of the employee's failure to report for work for no valid reason and his categorical intention to
discontinue employment. In the present case, there is no substantial evidence that will prove complainant's categorical intention to discontinue
employment. The story of abandonment is simply doubtful as complainant even refused to execute a resignation letter when she was asked to resign
by respondents. In the case of Garcia v. NLRC,  the Supreme Court emphasized that there must be concurrence of the intention to abandon and
some overt acts  from which an employee may be deduced as having no more intention to work. Moreover, as correctly observed by the Labor
Arbiter, neither notice to explain nor notice of termination was issued to complainant on the ground of abandonment.

There being no just cause for the termination of complainant's employment, the compelling conclusion is that she was illegally dismissed from
employment. x x x.[17]

The dispositive portion of the Decision of the NLRC reads:

WHEREFORE, the appeal filed by the respondents is hereby DISMISSED for lack of merit. Accordingly, the Decision dated March 27, 2014 is
AFFIRMED.[18]
Respondents' motion for reconsideration was denied for lack of merit by the NLRC in a Resolution[19] dated July 31, 2014.

On October 3, 2014, respondents filed a petition for certiorari  with the Court of Appeals, questioning whether the NLRC committed grave abuse of
discretion amounting to lack or excess of jurisdiction in finding that petitioner Cabañas was illegally dismissed and, therefore, entitled to her
monetary claims.

On April 21, 2016, the Court of Appeals rendered a Decision in favor of herein respondents, the dispositive portion of which reads:
WHEREFORE, in view of the foregoing premises, the instant petition is hereby GRANTED. The assailed Decision dated June 30, 2014 of the
National Labor Relations Commission, Sixth Division, in NLRC LAC No. 04-001071-14 is ANNULLED and SET ASIDE.

Private respondents Sheryll Cabañas' complaint for illegal dismissal and money claims is hereby DISMISSED for lack of merit.[20]

The Court of Appeals held that Cabañas was not illegally dismissed, but she abandoned her job. The appellate court stated that to constitute
abandonment, two elements must be present: (1) the employee must have failed to report for work or must have been absent without valid or
justifiable reason; and (2) there must have been a clear intention on the part of the employee to sever the employer-employee relationship
manifested by some overt act.[21] It found the presence of the elements of abandonment in this case.

The Court of Appeals stated that although the subject of the Memorandum dated September 19, 2013 was "Notice of Termination," the
memorandum merely asked Cabañas to explain why she should not be dismissed from employment. The next day, September 20, 2013, Cabañas
submitted a handwritten letter in response to the memorandum and she also made a handwritten document wherein she turned over the office files
in her custody in favor of Antoinette Castro. Thereafter, she failed to report for work as evidenced by her payslip for the month of September. Based
on the foregoing, the Court of Appeals concluded that Cabañas failed to report for work without valid or justifiable reason. It stressed that
respondents did not ask Cabañas to leave or prevent her from working in the law firm. Although Cabañas alleged that Atty. Luzano and Mrs.
Buenaventura asked her to resign, such allegation ran counter to her statement in her handwritten letter dated September 20, 2013, wherein she
thanked the former for treating her well. If indeed she was asked to resign, she should have stated the same in her letter or at the very least, she
should not have thanked them.

Anent the second element of abandonment, the Court of Appeals held that Cabañas showed her clear intent to sever the employer-employee
relationship when she voluntarily and personally turned over the files in her custody in favor of Antoinette Castro, which is an overt act manifesting
her intent to leave her post in the law firm.

The Court of Appeals cited the case of Jo v. National Labor Relations Commission[22] to support its ruling that although Cabañas instituted an illegal
dismissal case immediately after her alleged termination, she, nonetheless, belies her claim of illegal dismissal when she prayed for separation pay,
not reinstatement.

Hence, this petition for review on certiorari raising these issues:

I.
WHETHER THE COURT OF APPEALS GRAVELY ERRED IN RULING THAT [Cabañas] ABANDONED HER EMPLOYMENT.
II.
WHETHER THE COURT OF APPEALS GRAVELY ERRED IN RULING THAT [Cabañas] WAS NOT ILLEGALLY DISMISSED.[23]

Petitioner maintains that she did not abandon her work as ruled by the Court of Appeals, but she was illegally dismissed from employment.

She reiterated that when she went to work on September 20, 2013, she was surprised to learn that she had already been replaced. She
was no longer given any work and ordered to turn over all the files assigned to her. The said files were received by Antoinette Castro as shown in the
turnover that she executed. She inquired from respondent Atty. Luzano the reason therefor, and she was told that it was her last day of work and her
unpaid salary would be deposited in her account.

Moreover, petitioner averred that her actuations before she allegedly abandoned her job negate any intention to sever her employment with
respondents. On two separate occasions, respondent Atty. Luzano urged her to resign, but she refused to give in to his prodding. She would not
have likewise gone to great lengths to prepare and submit her written explanation to the Memorandum dated September 19, 2013 had she intended
to relinquish her employment. She wanted to continue to be in their employ, considering that it was her means of providing for herself and her family.

Further, petitioner stated that thanking the respondents for treating her well does not necessarily counter respondents' act of asking her to resign.
She was merely being thankful for being treated well during her employ. She pointed out that respondents neither exerted any effort to question her
alleged failure to report for work since September 23, 2013 nor required her to return to work, which could have enabled them to ascertain whether
she had intention to resume her employment.

Petitioner maintains that the respondents terminated her employment without just or valid cause and without observing the requirements of due
process in violation of her right to security of tenure guaranteed by the Constitution and the Labor Code. Hence, she is entitled to reinstatement and
backwages, and her other money claims. However, since reinstatement is no longer feasible due to strained relations considering her unjust
termination from employment, she prayed for the payment of separation pay in lieu thereof and her other money claims. She likewise prayed for the
payment of attorney's fees as she was compelled to litigate. Although she is represented by the Public Attorney's Office (PAO), this should not deter
the award of attorney's fees, which is sanctioned by Section 6 of Republic Act (R.A.) No. 9406.[24]
The Ruling of the Court

The petition is meritorious.

As a rule, the Court does not review questions of fact, but only questions of law in an appeal by certiorari  under Rule 45 of the Rules of Court.[25] The
rule, however, is not absolute as the Court may review the facts in labor cases where the findings of the Court of Appeals and of the labor tribunals
are contradictory.[26]

In this case, the factual findings of the Labor Arbiter and the NLRC differ from those of the Court of Appeals. Hence, the Court shall review and
evaluate the evidence on record.

The main issue is whether or not the Court of Appeals correctly held that petitioner was not illegally dismissed, but petitioner abandoned her job.

In illegal dismissal cases, the general rule is that the employer has the burden of proving that the dismissal was legal. To discharge this burden, the
employee must first prove, by substantial evidence, that he/she had been dismissed from employment.[27]

Petitioner contends that she was terminated by respondents since she was not only asked to resign by respondent Atty. Luzano, which she refused
to do, but on September 20, 2013, she was asked to turn over all the files assigned to her, and when she asked Atty. Luzano why she was not given
any work, she was told that it was her last day of work and that her unpaid salary would just be deposited in her ATM account.

The records show the document[28] dated September 20, 2013 evidencing petitioner's turnover of all the files assigned to her to respondents' Head
Administrative Assistant Antoinette L. Castro, who acknowledged receipt of the turnover by affixing her signature on the document. In employment
parlance, the turnover of work by an employee signifies severance of employment.[29] In addition, petitioner narrated that when she asked respondent
Atty. Luzano, the owner of respondent Law Office, why she was not given any work, Atty. Luzano told her that it was her last day of work and that
her unpaid salary would just be deposited in her ATM, which is an overt act of dismissal by petitioner's employer who had the authority to dismiss
petitioner.[30] In effect, petitioner was terminated on that day, September 20, 2013, a Friday. This would explain why petitioner no longer reported to
work the next working day, September 23, 2013, a Monday, and she filed a complaint for illegal dismissal on October 1, 2013.

As petitioner Cabañas has proven that she was dismissed, the burden to prove that such dismissal was not done illegally is now shifted to her
employer, respondents herein. It is incumbent upon the employer to show by substantial evidence that the dismissal of the employee was validly
made and failure to discharge that duty would mean that the dismissal is not justified and therefore illegal.[31]

Respondents contended that petitioner was not dismissed from work, but she stopped reporting for work the following Monday, September 23, 2013,
after submitting her written explanation to the charges against her on September 20, 2013; hence, petitioner abandoned her work.

For abandonment of work to fall under Article 282 (b) of the Labor Code as gross and habitual neglect of duties, which is a just cause for termination
of employment, there must be concurrence of two elements.[32] First, there should be a failure of the employee to report for work without a valid or
justifiable reason; and, second, there should be a showing that the employee intended to sever the employer-employee relationship, the second
element being the more determinative factor as manifested by overt acts.[33]

The Court of Appeals held that petitioner abandoned her work and the intent to do so was manifested by petitioner's overt act of voluntarily turning
over the files in her custody to Antoinette L. Castro, respondents' Head Administrative Assistant.

Thus, petitioner's act of turning over all the files assigned to her to respondents' Head Administrative Assistant is contended to be an overt act of
dismissal by petitioner, while it is held to be an overt act of abandonment by the Court of Appeals.

The Court has carefully reviewed the records and we have discussed earlier that petitioner's turnover of all the files in her custody was an overt act
of dismissal. Thus, the Court does not agree with the ruling of the Court of Appeals that petitioner abandoned her job and the intent to do so was
manifested by her overt act of voluntarily turning over the files in her custody to Antoinette L. Castro for these reasons:

First, the records show that it was petitioner who first  stated in her Reply[34] to respondents' Position Paper that she was illegally terminated because
on September 20, 2013, when she submitted her letter of explanation to the charges against her, she was asked to turn over all the files assigned to
her to respondents' Head Administrative Assistant Antoinette L. Castro.[35] In her Position Paper,[36] petitioner also stated that when she submitted her
explanation letter on September 20, 2013, she inquired from Atty. Luzano why she was no longer given any work nor was she informed that she
already had a replacement, and Atty. Luzano informed her that it was her last day of work and her salary would just be deposited in her ATM
account.[37]

Second, respondents did not mention the fact that it was the petitioner who voluntarily turned over the files assigned to her in their Position Paper, or
in their Reply to Complainant's Position Paper, or in their appeal[38] from the Labor Arbiter's Decision before the NLRC, but only mentioned it for the
first time in their Reply Memorandum[39] to Complainant's Comment/Opposition before the NLRC. Such an important fact constituting the overt act of
abandonment as defense could not have been taken for granted to not be alleged at the first instance by respondents in their Position Paper if it
were true that it was petitioner who voluntarily turned over all the files assigned to her to respondents' representative. Hence, the belated allegation
before the NLRC was merely an afterthought on the part of respondents.

Third, if petitioner wanted to abandon her job, she could just have left without turning over all the files assigned to her.

Fourth, the filing of an illegal dismissal case is inconsistent with abandonment of work.

Moreover, the termination of an employee must be effected in accordance with law. Therefore, the employer must furnish the worker or employee
sought to be dismissed with two (2) written notices, i.e.,  (a) notice which apprises the employee of the particular acts or omissions for which his/her
dismissal is sought; and (b) subsequent notice which informs the employee of the employer's decision to dismiss him/her.[40] In this case, as
observed by the Labor Arbiter and the NLRC, respondents did not issue a notice to apprise/explain and a notice of termination on the ground of
abandonment; hence, respondents failed to comply with procedural due process.

Further, the Court of Appeals ruled that petitioner's prayer for separation pay, not reinstatement, belies her claim of illegal dismissal on the basis
of Jo v. National Labor Relations Commission.[41]

The Court finds that the facts and the finding of the Court in Jo v. National Labor Relations Commission  is different from this case; hence, the said
ruling therein does not apply in this case.
The Court of Appeals summarized Jo v. National Labor Relations Commission, thus:
x x x [P]rivate respondent Mejila was hired as a barber and caretaker of a barbershop. When the barbershop was sold to petitioners Jo, Mejila
retained his job as a barber-caretaker. He, however, had an altercation with his co-barber which prompted him to institute a labor case against the
latter and petitioners. Pending the resolution thereof, petitioners assured him that he was not being driven out as barber-caretake[r]. Hence, Mejila
continued reporting for work at the barbershop. But, on January 2, 1993, he turned over the duplicate keys of the shop to the cashier and took away
all his belongings therefrom. On January 8, 1993, he began working as a regular barber at the newly-opened Goldilocks Barbershop also in Iligan
City. Four (4) days after, Mejila instituted a complaint for illegal dismissal against petitioners Jo. x x x.[42]

In Jo v. National Labor Relations Commission,  the Court found that therein private respondent Mejila's intention to sever his ties with his employers
or petitioners therein were manifested by the following circumstances: (1) private respondent bragged to his co-workers his plan to quit his job at
Cesar's Palace Barbershop and Massage Clinic as borne out by the affidavit executed by his former co-workers; (2) he surrendered the shop's keys
and took away all his things from the shop; (3) he did not report anymore to the shop without giving any valid and justifiable reason for his absence;
(4) he immediately sought a regular employment in another barbershop, despite previous assurance that he could remain in petitioners' employ; and
(5) he filed a complaint for illegal dismissal without praying for reinstatement.[43]

We find that the ruling in Jo v. National Labor Relations Commission that the employee's prayer for separation pay, not reinstatement, belied his
claim of illegal dismissal was made in consideration of all the circumstances that showed the employee's intention to sever his ties with his
employers, including the employee's contemporaneous conduct, and not only because of his prayer for separation pay. Hence, it does not apply in
this case.

An employee's prayer for separation pay is an indication of the strained relations between the parties. 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.[44] The
doctrine of strained relations should not be used recklessly or applied loosely nor be based on impression alone.[45] Thus, it is the task of labor
tribunals and the appellate courts to resolve whether the employee be reinstated or granted separation pay.

In this case, the Labor Arbiter noted that complainant-herein petitioner Cabañas prayed for separation pay in her Complaint, and the Labor Arbiter
was convinced that it is more fitting to grant separation pay to complainant in lieu of reinstatement.[46] The NLRC affirmed the decision of the Labor
Arbiter. The Court accords respect to the decision of the labor tribunals considering the facts of this case.

Further, petitioner, whose legal counsel is a Public Attorney of the PAO, prayed for the award of attorney's fees in her Position Paper and now seeks
the award of attorney's fees as she was compelled to litigate in order to seek redress. She contends that R.A. No. 9406 allows the PAO to receive
attorney's fees, thus:
SEC. 6. New sections are hereby inserted in Chapter 5, Title III, Book IV of Executive Order No 292 to read as follows:

xxxx

"SEC. 16-D. Exemption from Fees and Costs of the Suit.  - The clients of the PAO shall be exempt from payment of docket and other fees incidental
to instituting an action in court and other quasi-judicial bodies, as an original proceeding or on appeal.

The costs of the suit, attorney's fees and contingent fees imposed upon the adversary of the PAO clients after a successful litigation shall be
deposited in the National Treasury as trust fund and shall be disbursed for special allowances of authorized officials and lawyers of the PAO."[47]

Indeed, petitioner is entitled to the award of attorney's fees equivalent to ten percent (10%) of the total monetary award.[48] R.A. No. 9406 sanctions
the receipt by the PAO of attorney's fees, and provides that such fees shall constitute a trust fund to be used for the special allowances of their
officials and lawyers.[49] The matter of entitlement to attorney's fees by a claimant who was represented by the PAO has already been settled in Our
Haus Realty Development Corporation v. Parian.[50] The Court ruled therein that the employees are entitled to attorney's fees, notwithstanding their
availment of free legal services offered by the PAO and the amount of attorney's fees shall be awarded to the PAO as a token recompense to them
for their provision of free legal services to litigants who have no means of hiring a private lawyer.[51]

In fine, petitioner Cabañas was dismissed by respondents without just cause and without procedural due process.

WHEREFORE, the petition for review on certiorari  is GRANTED. The assailed Decision dated April 21, 2016 and Resolution dated June 30, 2016 of
the Court of Appeals in CA-G.R. SP No. 137447 are hereby REVERSED and SET ASIDE, and the Decision dated June 30, 2014 and Resolution
dated July 31, 2014 of the National Labor Relations Commission, Sixth Division in NLRC LAC No. 04-001071-14 are
hereby REINSTATED and UPHELD but MODIFIED to the effect that, in addition to the award of separation pay of P23,712.00; backwages of
P169,540.80; service incentive leave pay of P2,798.70 and 13th month pay of P14,553.24, petitioner Sheryll R. Cabañas is also entitled to the award
of attorney's fees equivalent to ten percent (10%) of the total monetary award.

SO ORDERED.

[ G.R. No. 222219, October 03, 2018 ]

REYNALDO S. GERALDO, PETITIONER, VS. THE BILL SENDER CORPORATION/MS. LOURDES NER CANDO, RESPONDENTS.

DECISION
PERALTA, J.:

Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to reverse and set aside the Decision[1] dated
August 7, 2014 and the Resolution[2] dated September 28, 2015 of the Court of Appeals (CA) in CA-G.R. SP No. 131235.

The antecedent facts are as follows:

On June 20, 1997, respondent The Bill Sender Corporation, engaged in the business of delivering bills and other mail matters for and in behalf of
their customers, employed petitioner Reynaldo S. Geraldo as a delivery/messenger man to deliver the bills of its client, the Philippine Long Distance
Telephone Company (PLDT). He was paid on a "per-piece basis," the amount of his salary depending on the number of bills he delivered. On
February 6, 2012, Geraldo filed a complaint for illegal dismissal alleging that on August 7, 2011, the company's operations manager, Mr. Nicolas
Constantino, suddenly informed him that his employment was being terminated because he failed to deliver certain bills. He explained that he was
not the messenger assigned to deliver the said bills but the manager refused to reconsider and proceeded with his termination. Thus, he claims that
his dismissal was illegal for being done without the required due process under the law and that the company and its president, respondent Lourdes
Ner Cando, be held liable for his monetary claims.[3]

For its part, the company countered that Geraldo was not a full time employee but only a piece-rate worker as he reported to work only as he
pleased and that it was a usual practice for messengers to transfer from one company to another to similarly deliver bills and mail matters. As such,
he would only be given bills to deliver if he reports to work, otherwise, the bills would be assigned to other messengers. Moreover, contrary to
Geraldo's claims, the company asserts that he was not illegally dismissed for he was the one who abandoned his job when he no longer reported for
work. Thus, the burden was on him to substantiate his claims for illegal dismissal.[4]

On November 29, 2012, the Labor Arbiter (LA) held that contrary to the company's assertion, the burden of proving that the dismissal of an
employee is for just cause rests on the employer, without distinction whether the employer admits or does not admit the dismissal, pursuant to Article
277(b) of the Labor Code. It also ruled that Geraldo is considered as a regular employee of the company because he was doing work that is usually
necessary and desirable to the trade or business thereof. Moreover, even if the performance of his job is not continuous or is merely intermittent,
since he has been performing the same for more than a year, the law deems the repeated and continuing need thereof as sufficient evidence of the
necessity, if not indispensability, of his work to the company's business. In addition, the LA found that the company failed to substantiate its
contention that Geraldo was employed with another company and that he abandoned his job. But even if it was true that he abandoned his job, it
was incumbent on the company to send him a notice ordering him to report to work and to explain his absences as mandated by Sections 2 and 5,
Book V, Rule XIV of the Labor Code. Finding that Geraldo was illegally dismissed, the LA ordered the company to pay him separation pay, service
incentive leave pay, and attorney's fees in the aggregate amount of P352,214.13.[5]

In a Decision[6] dated May 9, 2013, the National Labor Relations Commission (NLRC) affirmed the LA ruling with clarification that the computation of
backwages must be from the time of his dismissal up to the finality of the NLRC Decision. According to the NLRC, the company failed to discharge
the burden of proving a deliberate and unjustified refusal of Geraldo to resume his employment without any intention of returning as well as to
observe the twin-notice requirement to insure that due process has been accorded to him. Moreover, said commission also rejected the company's
claim that Geraldo abandoned his job since he filed his complaint only after seven (7) months from the alleged dismissal for the lapse of time
between the dismissal of an employee for abandonment and the filing of the complaint is not a material indicium of abandonment.[7]

On August 7, 2014, however, the CA set aside the NLRC Decision. According to the appellate court, since Geraldo was paid on a per piece basis, he
was hired on a per-result basis, and as such, he was not an employee of the company. The absence of an employer-employee relationship was
further highlighted by the fact that messengers would habitually transfer from one messengerial company to another depending on the availability of
mail matters. Thus, since Geraldo was not an employee of the company, there was no basis in awarding separation pay, backwages, 13th month
pay, service incentive leave pay, and attorney's fees.[8] Thereafter, in a Resolution dated September 28, 2015, the CA further denied Geraldo's
Motion for Reconsideration.

Aggrieved, Geraldo filed the instant petition on November 26, 2015 invoking the following arguments:
I.

THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION WHEN IT DISMISSED THE COMPLAINT ON THE GROUND THAT
PETITIONER BEING A PIECE-RATE EMPLOYEE IS NOT AN EMPLOYEE OF RESPONDENT AND NOT ENTITLED TO SECURITY OF TENURE
ON THE BASIS OF THE ALLEGATIONS THAT PETITIONER WAS PAID ON A PER PIECE BASIS.
II.

THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION WHEN IT DISMISSED THE COMPLAINT AND SET ASIDE THE
MONETARY AWARD FOR BACKWAGES, SEPARATION PAY, SERVICE INCENTIVE LEAVE, 13TH MONTH PAY AND ATTORNEY'S FEES
WITHOUTH BASES IN FACT AND IN LAW.
IIII.

THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION WHEN IT RULED THAT THE OFFICERS OF RESPONDENT
CORPORATION ARE NOT LIABLE FOR THE MONETARY CLAIMS OF PETITIONER.
In his petition, Geraldo posits that the existence of an employer-employee relationship cannot be denied and as a regular employee, he is entitled to
a security of tenure. According to him, his being a piece-rate employee is just a manner of payment of his compensation and not the basis of his
regularity of work. The regular nature of his work, moreover, is shown by the fact that the same is usually necessary and desirable to the nature of
the company's business, which is the delivery of bills and other mail matters for and in behalf of its customers. Geraldo further claims that since he
was illegally dismissed, for his employment was terminated without due process of law, he is entitled to his monetary claims as correctly awarded by
the LA, and that Cando, as President of the company, should be held solidarily liable therefor. The mere fact that he was illegally dismissed,
underpaid and deprived of his 13th month pay and service incentive leave pay constitutes bad faith on Cando's part as president of said company. As
such, she cannot escape personal liability.[9]

The petition is partially meritorious.

The issue of whether Geraldo was, indeed, illegally dismissed depends upon the nature of his relationship with the company. Article 280 of the Labor
Code describes a regular employee as one who is either (1) engaged to perform activities which are necessary or desirable in the usual business or
trade of the employer; and (2) those casual employees who have rendered at least one year of service, whether continuous or broken, with respect
to the activity in which he is employed.

In Integrated Contractor and Plumbing Works, Inc. v. National Labor Relations Commission,[10] we held that the test to determine whether
employment is regular or not is the reasonable connection between the particular activity performed by the employee in relation to the usual
business or trade of the employer. If the employee has been performing the job for at least one year, even if the performance is not continuous or
merely intermittent, the law deems the repeated and continuing need for its performance as sufficient evidence of the necessity, if not
indispensability, of that activity to the business.

In the instant case, it is undisputed that the company was engaged in the business of delivering bills and other mail matters for and in behalf of their
customers, and that Geraldo was engaged as a delivery/messenger man tasked to deliver bills of the company's clients. Clearly, the company
cannot deny the fact that Geraldo was performing activities necessary or desirable in its usual business or trade for without his services, its
fundamental purpose of delivering bills cannot be accomplished. On this basis alone, the law deems Geraldo as a regular employee of the company.
But even considering that he is not a full time employee as the company insists, the law still deems his employment as regular due to the fact that he
had been performing the activities for more than one year. In fact, counting the number of years from the time he was engaged by the company on
June 20, 1997 up to the time his services were terminated on August 7, 2011 reveals that he has been delivering mail matters for the company for
more than fourteen (14) years. Without question, this amount of time that is well beyond a decade sufficiently discharges the requirement of the law.
While length of time may not be the controlling test to determine if an employee is indeed a regular employee, it is vital in establishing if he was hired
to perform tasks which are necessary and indispensable to the usual business or trade of the employer.[11]

The Court, moreover, cannot subscribe to the company's contention that Geraldo is not a regular employee but merely a piece-rate worker since his
salary depends on the number of bills he is able to deliver. In Hacienda Leddy/Ricardo Gamboa, Jr. v. Villegas,[12] We held that the payment on a
piece-rate basis does not negate regular employment. The term "wage" is broadly defined in Article 97 of the Labor Code as remuneration or
earnings, capable of being expressed in terms of money whether fixed or ascertained on a time, task, piece or commission basis. Payment by the
piece is just a method of compensation and does not define the essence of the relations. Thus, the fact that Geraldo is paid on the basis of his
productivity does not render his employment as contractual. It must be remembered that notwithstanding any agreements to the contrary, what
determines whether a certain employment is regular is not the will and word of the employer, to which the desperate worker often accedes, much
less the procedure of hiring the employee or the manner of paying his salary. It is the nature of the activities performed in relation to the particular
business or trades considering all circumstances, and in some cases the length of time of its performance and its continued existence.[13]

Having established that Geraldo was a regular employee of the company, it becomes incumbent upon the latter to show that he was dismissed in
accordance with the requirements of the law for the rule is long and well settled that, in illegal dismissal cases like the one at bench, the burden of
proof is upon the employer to prove that the employee's termination from service is for a just and valid cause.[14] Here, the company claims that
Geraldo was not illegally dismissed for he was the one who abandoned his job when he no longer reported for work. The Court, however, finds that
apart from this self-serving allegation, the company failed to adduce proof of overt acts on the part of Geraldo showing his intention to abandon his
work. Time and again, the Court has held that to justify a finding of abandonment of work, there must be proof of a deliberate and unjustified refusal
on the part of an employee to resume his employment. The burden of proof is on the employer to show an unequivocal intent on the part of the
employee to discontinue employment. Mere absence is not sufficient. It must be accompanied by manifest acts unerringly pointing to the fact that the
employee simply does not want to work anymore. Hence, it bears emphasis that the fact that Geraldo filed the instant illegal dismissal complaint
negates any intention on his part to sever his employment with the company. The records reveal that he even sought permission to return to work
but was rejected by the company. Contrary to the company's assertion, moreover, the mere lapse of seven (7) months from Geraldo's alleged
dismissal to the filing of his complaint is not a material indication of abandonment, considering that the complaint was filed within a reasonable period
during the three (3)-year period provided under Article 291 of the Labor Code.[15]

Apart from the absence of just and valid cause in the termination of Geraldo's employment, the Court rules that his dismissal was also done without
the observance of due process required by law. It has long been settled in labor law that in terminating the services of an employee, the employer
must first furnish the employee with two (2) written notices: (a) notice which apprises the employee of the particular acts or omissions for which
his/her dismissal is sought; and (b) subsequent notice which informs the employee of the employer's decision to dismiss him/her.[16] The company in
the present case, however, failed to show its compliance with the twin notice rule. In fact, in its Comment, it even expressly admitted its failure to
serve Geraldo with any written notice, merely insisting that its oral notice should be considered substantial compliance with the law.

In view of the foregoing premises, therefore, the Court is convinced that Geraldo, a regular employee entitled to security of tenure, was illegally
dismissed from his employment due to the failure of the company to comply with the substantial and procedural requirements of the law. Thus, We
sustain the award of the LA and the NLRC of separation pay, in lieu of reinstatement, attorney's fees, as well as Geraldo's monetary claims of
13th month pay and service incentive leave pay in view of the failure of the company to adduce evidence to show that Geraldo has been paid said
benefits.

It must be noted, however, that respondent Cando cannot be held personally and solidarity liable with the company for the monetary claims of
Geraldo. As a general rule, a corporate officer cannot be held liable for acts done in his official capacity because a corporation, by legal fiction, has a
personality separate and distinct from its officers, stockholders, and members. To pierce this fictional veil, it must be shown that the corporate
personality was used to perpetuate fraud or an illegal act, or to evade an existing obligation, or to confuse a legitimate issue. In illegal dismissal
cases, corporate officers may be held solidarily liable with the corporation if the termination was done with malice or bad faith.[17] To hold a director or
officer personally liable for corporate obligations, two requisites must concur, to wit: (1) the complaint must allege that the director or officer assented
to the patently unlawful acts of the corporation, or that the director or officer was guilty of gross negligence or bad faith; and (2) there must be proof
that the director or officer acted in bad faith.[18] In the instant case, however, there is no showing that Cando, as President of the company, was guilty
of malice or bad faith in terminating the employment of Geraldo. Thus, she should not be held personally liable for his monetary claims.

WHEREFORE, premises considered, the instant petition is PARTIALLY GRANTED. The assailed Decision dated August 7, 2014 and Resolution
dated September 28, 2015 of the Court of Appeals in CA-G.R. SP No. 131235 are REVERSED and SET ASIDE. The Decision dated May 9, 2013 of
the National Labor Relations Commission is REINSTATED with the MODIFICATION that Lourdes Ner Cando is absolved of any personal liability as
regards the money claims awarded to petitioner.

SO ORDERED.

[ G.R. No. 205953, June 06, 2018 ]

DIONELLA A. GOPIO, DOING BUSINESS UNDER THE NAME AND STYLE, JOB ASIA MANAGEMENT SERVICES, PETITIONER, VS.
SALVADOR B. BAUTISTA, RESPONDENTS.

DECISION
JARDELEZA, J.:

This is a petition for review on certiorari[1] seeking the reversal of the August 31, 2012 Decision[2] of the Court of Appeals (CA) in CA-G.R. SP No.
116450 which annulled the Decision[3] and Resolution[4] issued by the National Labor Relations Commission (NLRC) and reinstated the
Decision[5] rendered by the Labor Arbiter, and the February 22, 2013 CA Resolution[6] denying petitioner's motion for reconsideration of the assailed
Decision.

On September 26, 2008, respondent Salvador A. Bautista (Bautista) was hired as a Project Manager for Shorncliffe (PNG) Limited (Shorncliffe) in
Papua New Guinea through Job Asia Management Services (Job Asia), a single proprietorship owned by petitioner Dionella A. Gopio (Gopio), which
is engaged in the business of recruitment, processing, and deployment of land-based manpower for overseas work. Bautista's contract stated that
his employment shall be valid and effective for 31 months with a net monthly salary of P40,000.00. On October 4, 2008, he arrived at his workplace
in Papua New Guinea.[7]

On July 6, 2009, or just nine months after his deployment in Papua New Guinea, Bautista was served a notice of termination effective July 10, 2009
on the alleged grounds of unsatisfactory performance and failure to meet the standards of the company. He was paid his salary for the period July 1
to 10, 2009, annual leave credits, and one-month pay net of taxes. Thereafter, he was repatriated on July 11, 2009.[8]

On July 27, 2009, Bautista lodged a complaint with the arbitration branch of the NLRC against Job Asia, Gopio, and Shorncliffe for illegal dismissal
and monetary claims. He claimed that he was terminated without just cause since there had been no job evaluation conducted prior to Shorncliffe's.
decision to dismiss him from employment. As a result, he is entitled to the payment of his salaries for the unexpired portion of his contract, or for 22
months. He alleged that while his contract contained an understated monthly income of P40,000.00, he was actually being paid the amount of
P115,850.00 a month. Other than salaries, Bautista also claimed unrealized employment benefits, nine days sick leave pay, four weeks recreation
leave pay, moral and exemplary damages, as well as attorney's fees.[9]

Job Asia, Gopio, and Shorncliffe, for their part, argued that Bautista's employment was terminated because he failed to meet Shorncliffe's standards.
To buttress their claim, they submitted in evidence the work performance evaluation report on Bautista which listed the following observations:
1. He is not capable of performing the duties of a Project Manager.
2. He was unable to control or direct his workforce, equipment and materials.
3. He is incompetent in the handling of his daily tasks.
4. [He] failed to provide any monthly reports both verbal and written on the progress of his projects as a company requirement.
5. He has never submitted any monthly progress claims as a company requirement.
6. He demonstrated that he was technically incompetent and hides himself when there is a problem.
7. He was not capable of running project site meetings with the management and his staff.
8. He is a lazy person, incompetent in his decision making and has poor communication skills.
9. He was unable to pass his knowledge to young PNG Engineers, in fact they were teaching him instead.[10]
On January 7, 2010, the Labor Arbiter rendered his Decision finding Bautista to have been illegally dismissed as the dismissal was not proven to be
for a just cause and Shorncliffe failed to observe due process. The Labor Arbiter held that the work performance evaluation allegedly showing
Bautista's inefficiency and shortcomings in the performance of his job was made only on August 22, 2009, or more than one month after Bautista's
dismissal. Thus, the findings therein are mere conclusions of fact, at best self-serving and merits no consideration.[11] Moreover, Shorncliffe failed to
observe due process by not giving Bautista the twin notices required by law. The latter was not notified of the intention to dismiss him or the acts or
omissions complained of. Neither was he notified of the decision to dismiss him and given an opportunity to answer and rebut the charges against
him in between notices.[12]

The. Labor Arbiter also rejected the argument that Bautista's employment was terminated on the basis of Article 4.3 of the employment contract by
giving him one-month salary in lieu of one month's written notice.[13] The said provision states:
4.3 The Employer or Employee may terminate this contract on other grounds. The Employer should give one month's written notice of his
intention to terminate or in lieu thereof pay the Employee a sum equivalent to one month's salary. The Employee may likewise terminate this
Contract by giving three months' notice to the Employer.[14]
The Labor Arbiter held that the stipulation providing for payment of one-month salary in lieu of serving one month's notice of the employer's intention
to terminate Bautista's employment is contrary to our laws which uphold the sanctity of workers' security of tenure. It also considered the
employment contract as a contract of adhesion which cannot militate against the rights of Bautista.[15] He thus ordered Job Asia, Gopio, and
Shorncliffe to jointly and severally pay Bautista his salaries for the unexpired portion of his contract of employment in the amount of P2,548,700.00,
[16]
 moral and exemplary damages in the amount of P300,000.00, and attorney's fees at P254,870.00.[17]

Undaunted, Job Asia, Gopio, and Shorncliffe filed an appeal with the NLRC. On May 17, 2010, the NLRC issued its Decision setting aside the
Decision of the Labor Arbiter and dismissing the complaint for illegal dismissal and monetary claims for lack of merit. Nevertheless, it ordered that
Bautista be indemnified nominal damages in the amount of P40,000.00.[18]

The NLRC held that the parties were bound by the terms and conditions of the employment contract that bore the stamp of approval of the Philippine
Overseas Employment Administration (POEA). Consequently, it found that Bautista's contract was pre-terminated in accordance with Article 4.3
thereof. Contrary to the Labor Arbiter's finding, the NLRC upheld the reports of Shorncliffe's officers pertaining to his unsatisfactory performance and
incompetence, and thus declared Bautista's employment to have been terminated for a just cause. It, however, held that Bautista was not afforded
due process, for which he should be awarded indemnity pegged at the rate of his basic salary for one month as stated in his employment contract, or
P40,000.00. The NLRC found no bad faith or malice on the part of Job Asia, Gopio, or Shorncliffe that would have been the basis for an award of
moral and exemplary damages and attorney's fees.[19]

Bautista filed a motion for reconsideration of the NLRC Decision, but it was denied through a Resolution dated July 30, 2010. Hence, he filed a
petition for certiorari with the CA.

On August 31, 2012, the CA rendered its Decision annulling and setting aside the NLRC Decision and reinstating that of the Labor Arbiter. It held
that Article 4.3 of the employment contract violates the provisions of the Labor Code on security of tenure since it gives the employer the option to do
away with the notice requirement as long as he grants one-month salary to the employee in lieu thereof. The provision deprives the employee of due
process and violates his right to be apprised of the grounds for his termination without giving him an opportunity to defend himself and refute the
charges against him. Moreover, the term "other grounds" is all-encompassing and makes the employee susceptible to arbitrary dismissal.[20]

The CA also held that Job Asia, Gopio, and Shorncliffe failed to substantiate their claim that Bautista was discharged for just cause. Their claim that
the latter was dismissed for performing below standards was not backed by any proof Further, Bautista was notified of his termination only four days
prior to the intended date of dismissal without evidence of an assessment of his performance and the results thereof. Neither was he served a notice
of any wrongdoing prior to the service of the notice of his termination. The CA noted that the declarations of Anthony B. Ponnampalam and Paul
Thompson, officers of Shorncliffe, were executed on October 31, 2009 and October 1, 2009, respectively, or more than two months after the
termination of Bautista's employment on July 10, 2009. Further, the evaluation report made by Robert Aup, another Shorncliffe official, was made
only on August 22, 2009, and hence obviously an afterthought. Thus, there being no sufficient cause to terminate Bautista's employment, his
dismissal is illegal. The CA thus upheld the Labor Arbiter's Decision and additionally awarded Bautista full reimbursement of his placement fee with
interest of 12% per annum.[21]

Thus, this petition where the Court is called upon to ultimately resolve two issues that have been beleaguering the parties for more than eight years,
to wit: whether or not Bautista was illegally dismissed from employment, and whether or not he is entitled to his monetary claims.

We uphold with modification the Decision of the CA.

I.

In 1995, Republic Act (R.A.) No. 8042, otherwise known as an "An Act to Institute the Policies of Overseas Employment and Establish a Higher
Standard of Protection and Promotion of the Welfare of Migrant Workers, Their Families and Overseas Filipinos in Distress, and for Other Purposes"
was passed. More popularly known as the Migrant Workers and Overseas Filipinos Act of 1995, this law echoes the provision in the 1987
Constitution[22] on protection of labor. Thus, Section 2(b) thereof under "Declaration of Policies," states:
(b) The State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full employment and equality of
employment opportunities for all. Towards this end, the State shall provide adequate and timely social, economic and legal services to Filipino
migrant workers.
Moreover, Section 2(c) thereof provides:
(c) x x x The existence of the overseas employment program rests solely on the assurance that the dignity and fundamental human rights and
freedoms of the Filipino citizens shall not, at any time, be compromised or violated. x x x
Accordingly, regulatory provisions may be read all throughout R.A. No. 8042 that carry out the policy of the State to protect and promote the rights of
Filipino migrant workers. Employment agreements are verily more than contractual in nature in the Philippines. The Philippine Constitution and laws
guarantee special protection to workers here and abroad.[23] Thus, even if a Filipino is employed abroad, he or she is entitled to security of tenure,
among other constitutional rights.[24]

In termination disputes or illegal dismissal cases, it has been established by Philippine law and jurisprudence that the employer has the burden of
proving that the dismissal is for just and valid causes; and failure to do so would necessarily mean that the dismissal was not justified and is,
therefore, illegal.[25] Taking into account the character of the charges and the penalty meted to an employee, the employer is bound to adduce clear,
accurate, consistent, and convincing evidence to prove that the dismissal is valid and legal.[26] This is consistent with the principle of security of
tenure as guaranteed by the Constitution and reinforced by Article 292(b)[27] of the Labor Code of the Philippines,[28] which provides:
Art. 292. Miscellaneous Provisions x x x

(b) Subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal except for a just and authorized
cause and without prejudice to the requirement of notice under Article [298] of this Code, the employer shall furnish the worker whose employment is
sought to be terminated a written notice containing a statement of the causes for termination and shall afford the latter ample opportunity to be heard
and to defend himself with the assistance of his representative if he so desires in accordance with company rules and regulations promulgated
pursuant to guidelines set by the Department of Labor and Employment. Any decision taken by the employer shall be without prejudice to the right of
the worker to contest the validity or legality of his dismissal by filing a complaint with the regional branch of the National Labor Relations
Commission. The burden of proving that the termination was for a valid or authorized cause shall rest on the employer. x x x[29]
Here, petitioner argues that there was justifiable cause for the termination of Bautista's employment since the latter has fallen short of Shorncliffe's
employment and work standards. She cited the report of Shorncliffe's Chief Executive Officer and Project Team Leader, Robert Aup, which detailed
Bautista's shortcomings, as well as the report of Paul Thompson, Supervising Engineer of the Project to which Bautista was assigned, which
mentioned the latter's incompetence.[30] Maintaining that the rights and obligations among the Overseas Filipino Worker (OFW), the local recruiter or
agent, and the foreign employer or principal is governed by the employment contract which is the law among them, petitioner also claims that
Bautista's employment was validly terminated even without notice as he was given the equivalent of one-month salary in lieu thereof.[31]

The Court is not convinced.

As observed by the CA, the evaluation report of Robert Aup was made only on August 22,2009, and the declaration of Paul Thompson was executed
only on October 1, 2009, which dates are beyond the date of termination of Bautista's employment on July 10, 2009. The CA correctly concluded
that these were made as an afterthought in order to lend credence to the claim that the termination of Bautista's employment was for a valid reason.
[32]
 In Skippers United Pacific, Inc. v. Maguad,[33] we held that the Master's Statement Report presented by therein petitioners to corroborate their
claim that the dismissal of therein respondents was for just cause, i.e., incompetence, was issued 78 days[34] after therein respondents were
repatriated to Manila and two months after the latter instituted a complaint for illegal dismissal before the NLRC. Such report can no longer be a fair
and accurate assessment of therein respondents' competence as the same was presented only after the complaint was filed. Its execution was a
mere afterthought in order to justify the dismissal of therein respondents which had long been effected before the report was made; hence, such
report is a self-serving one.[35]

The Court thus finds that Bautista's incompetence as the alleged just cause for his dismissal was not proven by substantial evidence.
II.

In addition, Bautista was not accorded due process. Consequently, the Court is not convinced that he was legally dismissed.

The due process requirement is not a mere formality that may be dispensed with at will. Its disregard is a matter of serious concern since it
constitutes a safeguard of the highest order in response to man's innate sense of justice. To meet the requirements of due process, the employer
must furnish the worker sought to be dismissed with two written notices before termination of employment can be legally effected, i.e.: (1) a notice
which apprises the employee of the particular acts or omissions for which his dismissal is sought; and (2) the subsequent notice after due hearing
which informs the employee of the employer's decision to dismiss him.[36]

Here, Bautista was dismissed under Article 4.3 of the employment contract which allegedly permits his employer, Shorncliffe, to terminate the
contract on unspecified "other grounds" by giving one month's written notice of its intention to terminate, or in lieu thereof, to pay the employee a sum
equivalent to one month's salary.

Bautista was notified on July 6, 2009 that his services will be terminated effective on the close of business hours on July 10, 2009, allegedly because
his performance was "unsatisfactory and did not meet the standards of the Company."[37] He was also paid one-month salary in lieu of one month's
notice of the termination of his employment.[38] Surely, this cannot be considered compliance with the two-notice requirement mandated by the Labor
Code in effecting a valid dismissal. The Labor Code requires both notice and hearing; notice alone will not suffice. The requirement of notice is
intended to inform the employee concerned of the employer's intent to dismiss him and the reason for the proposed dismissal. On the other hand,
the requirement of hearing affords the employee an opportunity to answer his employer's charges against him and accordingly defend himself
therefrom before dismissal is effected.[39] In this case, Bautista was not given a chance to defend himself. Five days after the notice was served, he
was repatriated. Clearly, he was denied his right to due process.

The CA aptly observed that Article 4.3 deprives the employee of his right to due process of law as it gives the employer the option to do away with
the notice requirement provided that it grants one-month salary to the employee in lieu thereof. It denies the employee of the right to be apprised of
the grounds for the termination of his employment without giving him an opportunity to defend himself and refute the charges against him. Moreover,
the term "other grounds" is all-encompassing. It makes the employee susceptible to arbitrary dismissal. The employee may be terminated not only
for just or authorized causes but also for anything under the sun that may suit his employer. Thus, the employee is left unprotected and at the mercy
of his employer, subjected to the latter's whims.[40]

We cannot sustain the validity of Article 4.3 of the employment contract as it contravenes the constitutionally-protected right of every worker to
security of tenure.[41]

Bautista's employment was for a fixed period of 31 months.[42] Article 4.3 took back this period from him by rendering it in effect a facultative one at
the option of Shorncliffe, which may shorten that term at any time and for any cause satisfactory to itself, to a one-month period or even less, by
simply paying Bautista a month's salary. The net effect of Article 4.3 is to render Bautista's employment basically employment at the pleasure of
Shorncliffe. The Court considers that the provision is intended to prevent any security of tenure from accruing in favor of Bautista even during the
limited period of 31 months.[43]

To emphasize, overseas workers, regardless of their classification, are entitled to security of tenure, at least for the period agreed upon in their
contracts. This means that they cannot be dismissed before the end of their contract terms without due process.[44] The law recognizes the right of an
employer to dismiss employees in warranted cases, but it frowns upon the arbitrary and whimsical exercise of that right when employees are not
accorded due process.[45] If they were illegally dismissed, the workers' right to security of tenure is violated.[46]

The law and jurisprudence guarantee to every employee security of tenure. This textual and the ensuing jurisprudential commitment to the cause
and welfare of the working class proceed from the social justice principles of the Constitution that the Court zealously implements out of its concern
for those with less in life. Thus, the Court will not hesitate to strike down as invalid any employer act that attempts to undermine workers' tenurial
security.[47]

Indeed, while our Civil Code recognizes that parties may stipulate in their contracts such terms and conditions as they may deem convenient, these
terms and conditions must not be contrary to law, morals, good customs, public order or policy.[48] The employment contract between Shorncliffe and
Bautista is governed by Philippine labor laws. Hence, the stipulations, clauses, and terms and conditions of the contract must not contravene our
labor law provisions.

Time and again, we have he]d that a contract of employment is imbued with public interest. The parties are not at liberty to insulate themselves and
their relationships from the impact of labor laws and regulations by simply contracting with each other. Also, while a contract is the law between the
parties, the provisions of positive law that regulate such contracts are deemed included and shall limit and govern the relations between the parties.
[49]

In sum, there being no showing of any clear, valid, and legal cause for the termination of Bautista's employment and that he was not afforded due
process, the law considers the matter a case of illegal dismissal for which Bautista is entitled to indemnity. We uphold the Labor Arbiter's award of
indemnity equivalent to Bautista's salaries for the unexpired term of his employment contract, and damages.
III.

Section 10 of R.A. No. 8042 provides that in case of termination of overseas employment without just, valid or authorized cause as defined by law or
contract, the workers shall be entitled to the full reimbursement of his placement fee with interest of 12% per annum, plus his salaries for the
unexpired portion of his employment contract or for three months for every year of the unexpired term, whichever is less.

We declared the clause "or for three months for every year of the unexpired term, whichever is less" unconstitutional in the 2009 case of Serrano v.
Gallant Maritime Services, Inc.,[50] and again in the 2014 case of Sameer Overseas Placement Agency, Inc. v. Cabiles,[51] after the provision found its
way again in R.A. No. 10022[52] which took effect in 2010. We held that the clause violated substantive due process and the equal protection clause
of the Constitution in that it generated classifications among workers that do not rest on any real or substantial distinctions that would justify different
treatments in terms of the computation of money claims resulting from illegal termination.[53] Thus, we held that the proper indemnity in illegal
dismissal cases should be the amount equivalent to the unexpired term of the employment contract. In this case, it is Bautista's monthly salary of
P115,850.00[54] multiplied by 22 months, the remaining term of his employment contractor a total amount of P2,548,700.00.

We also upheld the Labor Arbiter's award of moral and exemplary damages to Bautista on the ground that his dismissal was without just and
authorized cause, in complete disregard of his right to due process of law, and done in bad faith, in addition to being anti-Filipino and capricious.
[55]
 Likewise, we find the award of attorney's fees proper. It is settled that when an action is instituted for the recovery of wages, or when employees
are forced to litigate and consequently incur expenses to protect their rights and interests, the grant of attorney's fees is legally justifiable.[56]

Petitioner's argument that she should not be held jointly and severally liable with Shorncliffe for the payment of monetary awards to Bautista as she
had no control over the manner of implementation of the employment contract, she had no hand whatsoever in Bautista's dismissal, and that her
agency was extinguished as soon as the employee was deployed to and have worked in Shorncliffe's construction project in Papua New Guinea,
[57]
 has no merit.

In the first place, such joint and solidary liability is required prior to the issuance of a license to petitioner to operate a recruitment agency. Thus,
Section 1(f)(3), Rule II, Part II of the 2002 POEA Rules and Regulations Governing the Recruitment and Employment of Land-Based Overseas
Workers provides:
RULE II
ISSUANCE OF LICENSE

Sec. 1. Requirements for Licensing. Every applicant for license to operate a private employment agency shall submit a written application together
with the following requirements:
xxxx

f. A verified undertaking stating that the applicant:

xxxx

3) Shall assume joint and solidary liability with the employer for all claims and liabilities which may arise in connection with the implementation of the
contract, including but not limited to payment of wages, death and disability compensation and repatriations[.] (Emphasis supplied.)
Furthermore, Section 10 of R.A. No. 8042 provides:
Sec. 10. Money Claims. x x x

The liability of the principal/employer and the recruitment/placement agency for any and all claims under this section shall be joint and several. This
provision shall be incorporated in the contract for overseas employment and shall be a condition precedent for its approval. The performance bond to
be filed by the recruitment/placement agency, as provided by law, shall be answerable for all money claims or damages that may be awarded to the
workers.If the recruitment/placement agency is a juridical being, the corporate officers and directors and partners as the case may be, shall
themselves be jointly and solidarily liable with the corporation or partnership for the aforesaid claims and damages. (Emphasis supplied.)
Consistent with the law and the POEA Rules, petitioner's joint and several liability is incorporated in Bautista's employment contract with Shorncliffe,
which states:
Article 1: This Employment Contract is executed and entered into by and between:

A. EMPLOYER:
SHORNCLIFFE (PNG) LIMITED
(Name of Establishment)
xxxx

Represented in the Philippines:

JOB ASIA MANAGEMENT SERVICES
By: Mr. JAIME M. ARREO
(Managing Consultant)

and persons authorized by Agent Company who will be jointly and severally responsible to [sic] compliance herewith:
and

B. EMPLOYEE: SALVADOR BUSTILLO BAUTISTA[58]

(Emphasis supplied.)
xxxx
Petitioner thus cannot evade liability by claiming that she did not have any control over the foreign employer and had nothing to do with Bautista's
dismissal, because her liability is defined by law and contract.

We have held that the burden devolves not only upon the foreign-based employer but also on the employment or recruitment agency to adduce
evidence to convincingly show that the worker's employment was validly and legally terminated. This is because the latter is not only an agent of the
former, but is also solidarity liable with the foreign principal for any claims or liabilities arising from the dismissal of the worker.[59]

R.A. No. 8042 is a police power measure intended to regulate the recruitment and deployment of OFWs. It aims to curb, if not eliminate, the
injustices and abuses suffered by numerous OFWs seeking to work abroad.[60] In Sameer, we explained that the provision on joint and several
liability in R.A. No. 8042 is in line with the state's policy of affording protection to labor and alleviating workers' plight. It assures overseas workers
that their rights will not be frustrated by difficulties in filing money claims against foreign employers. Hence, in the case of overseas employment,
either the local agency or the foreign employer may be sued for all claims arising from the foreign employer's labor law violations. This way, the
overseas workers are assured that someone-at the very least, the foreign employer's local agent-may be made to answer for violations that the
foreign employer may have committed. By providing that the liability of the foreign employer may be "enforced to the full extent" against the local
agent, the overseas worker is assured of immediate and sufficient payment of what is due them. The local agency that is held to answer for the
overseas worker's money claims, however, is not left without remedy. The law does not preclude it from going after the foreign employer for
reimbursement of whatever payment it has made to the employee to answer for the money claims against the foreign employer.[61]

WHEREFORE, the petition is DENIED. Petitioner is ordered to pay respondent:

1. Reimbursement of respondent's placement fee with interest at the rate of 12% per annum;
2. Two Million Five Hundred Forty-Eight Thousand Seven Hundred Pesos (P2,548,700.00) representing Bautista's salaries for the unexpired
portion of his contract;
3. Moral damages in the amount of One Hundred Fifty Thousand Pesos (P150,000.00);
4. Exemplary damages in the amount of One Hundred Fifty Thousand Pesos (P150,000.00); and
5. Attorney's fees at the rate of 10% of the monetary award exclusive of damages and reimbursement of placement fee in the amount of Two
Hundred Fifty-Four Thousand Eight Hundred Seventy Pesos (P254,870.00).
All monetary awards and damages (except reimbursement of placement fee) shall earn 6% interest per annum from finality of this judgment until fully
paid.

SO ORDERED.

[ G.R. No. 222317, January 24, 2018 ]

ST. PAUL COLLEGE, PASIG, AND SISTER TERESITA BARICAUA, SPC, PETITIONERS, VS. ANNA LIZA L. MANCOL AND JENNIFER CECILE
S. VALERA, RESPONDENTS.

DECISION

PERALTA, J.:

This is to resolve the Petition for Review on Certiorari under Rule 45 of the Rules of Court dated March 7, 2016 of petitioners St. Paul College, Pasig
and Sister Teresita Baricaua, SPC that seeks to reverse and set aside the Decision[1] dated April 16, 2015 and the Resolution[2] dated January 8,
2016, of the Court of Appeals (CA) in CA-G.R. SP No. 124501 finding respondents Anna Liza L. Mancol and Jennifer Cecile Valera constructively
dismissed by the petitioners.

The facts follow.

Respondents Mancol and Valera were both hired as pre-school teachers of petitioner St. Paul College, Pasig (SPCP), Mancol having been
employed on June 1, 2004 with a monthly basic salary of P20,311.50 and Valera having been employed sometime in 2003 with a basic monthly
salary of P22,044.00.

Mancol, on May 18, 2010, filed a leave of absence for the period May 21 to June 18, 2010 as she was to undergo a fertility check-up in Canada.
When she returned to the Philippines, Mancol received a letter dated June 10, 2010 from the Directress of SPCP, petitioner Sister Baricaua,
requiring her to explain why she should not be dismissed for taking a leave of absence without approval. On June 21, 2010, Mancol reported back to
SPCP, but she was allegedly barred by SPCP and Sister Baricaua from teaching in her class, entering her classroom, being introduced to her
students, preparing teaching aids and materials, and going to other offices within the campus. Thus, Mancol alleged that all these acts constitute
constructive dismissal.

Valera, on the other hand, took a leave of absence without pay from April 13 to June 11, 2010 to undergo surgical operation for scoliosis. On June
15, 2010, Valera received a letter from Sister Baricaua advising her to file a leave of absence (Sick Leave) for the entire school year 2010-2011;
otherwise, she will be reassigned to a higher grade level where the students are more independent learners. The letter also required her to submit a
waiver absolving SPCP from any liability in case of any untoward incident that may take place while in the performance of her teaching duties as well
as notarized certification of her physician as to her fitness to resume work. Valera, thus, averred that she was constructively dismissed when
petitioners stripped her of her teaching load and being forced to take a leave of absence for the school year 2010-2011.

The parties having failed to strike an amicable settlement during the scheduled mandatory conference, respondents filed on June 22, 2010, a
complaint for constructive dismissal, non-payment of overtime pay, holiday pay, holiday premium, rest day premium, service incentive leave,
13th month pay, nightshift differential overload pay, damages and attorney's fees against SPCP and Sister Baricaua in her personal and official
capacity as Directress of SPCP.

To substantiate their money claims, Mancol and Valera's similar allegations are as follow:
[Petitioners were] required to work for 40 hours a week or 8 hours of work daily (inclusive of lunch break) from Mondays thru Fridays. As pre-school
teacher[s], [their] official time was from 7:15 am to 3:30 pm daily, which is actually 8 hours and 15 minutes of work daily. However, [they were] not
paid an overtime pay equivalent to 15 minutes every day.

But the working hours of [petitioners] and other preschool teachers do not end at 3:30 [pm] daily. They extend for at least another 1 ½ hours every
day therefrom, or until 5:00 pm, on account of daily meetings required and called by the principal or by her authority under the threat of salary
deductions against teachers who refuse or fail to attend the same. Unfortunately, [petitioners were] not paid overtime pay for work rendered beyond
3:30 pm, which is equivalent to about 90 minutes every day, exclusive of the daily 15 minutes overtime already mentioned above.

Meetings or conferences were likewise called by the principal or by her authority daily during lunch break such that [petitioners] and other preschool
teachers were left with no choice but to eat their lunch only after said meetings or conferences, which usually end around 1:15 pm.

[Petitioners] and other preschool teachers were likewise required to report for work on weekends for either half day (4 hours minimum) or whole day
(8 hours minimum) but without pay. In 2007, this happened on March 3-4 (Saturday & Sunday Field Demonstrations, whole day); March 10
(Saturday- Thanksgiving Mass, half day); June 16 (Saturday – Pondo ng Pinoy Seminar, whole day); August 11 (Saturday – Parents' Recollection,
half day); October 27-28 (Saturday & Sunday – Seminar, whole day); and November 10 (Saturday – Family Day, half day). In 2008, this happened
on January 26 (Saturday, Field Demonstration, whole day); June 7 (Saturday – Parents' Orientation, half day); and October 18 (Saturday – Family
Day, half day). In 2009, this happened on February 15 (Sunday Preschool Field Demonstration, whole day); March 15 (Sunday – Kinder 2
Thanksgiving Mass, half day); June 13 (Saturday – Parents' Orientation, half day); July 25 (Saturday – Seminar Workshop with Scholastic, whole
day); August 1 (Saturday, Parents' Recollection, half day); August 19 (Saturday – PTC, half day); February 13 (Saturday – School Fair, whole day);
February 14 (Saturday – Preschool Field Demonstration, whole day) and March 13 (Saturday – Kinder 2 Thanksgiving Mass, half day).

Last school year (SY 2009-2010) [SPCP] required [petitioners] and other school teachers to teach in the grade school allegedly because preschool
teachers were not rendering the required number of teaching hours/loads on the basis of DepEd Order No. 57, s.2007. A copy of [the] secretary's
certification issued by respondents' corporate secretary is hereto attached as Annex "B". On the contrary, however, [petitioners] and other preschool
teachers were already rendering actual teaching hours/loads beyond the required teaching hours/load prescribed by the Faculty Manual of 2004.
This is also not to mention that DepEd Order No. 57, s.2007 apply only to public institutions, not to respondent SPCP which is a private institution.

The Faculty Manual of 2004 provides for an 18 to 20 hours of actual teaching in a 40-hour work week, which starts at 7:30 am, and beyond that is
already considered an extra load with corresponding extra-load pay. As regards proctoring, the same Faculty Manual classified it as "inherent" in a
teaching load and does not require extra remuneration. And being "inherent" and also on the basis of its nature, proctoring forms part of actual
teaching load. As such, if proctoring is rendered outside of, or in  addition to, the 18 to 20 actual teaching hours, then it is properly considered as
actual teaching load. This is especially true to preschool teachers who conduct proctoring beyond the 18 to 20 hours of actual teaching.

For purposes of extra-load pay, the Faculty Manual of 2004 provides for a formula: [(Basic/Minimum hours)] x extra hours of the minimum]. The
basic monthly salary of complainant Mancol is Php 20,311.50 and the minimum hours is 20 hours per Faculty Manual of 2004. Below are the extra
hours/load rendered by the complainant Mancol in both preschool and grade school.

In preschool, [petitioners] rendered about 3.5 hours of actual teaching [hours]/load (8 am – 11:30 am) during Mondays thru Thursdays; 4 hours of
actual teaching/load (7:30 am – 11:30 am) during Fridays; 45 minutes of proctoring (7:30 am – 8:00 am and 11:30 am – 11:45 am) during Mondays
thru Thursdays; and 30 minutes of proctoring (7:15 am – 7:30 am and 11:30 am – 11:45 am) during Fridays. In short, in preschool, complainant
Mancol has indubitably rendered about 21.5 hours of actual teaching/load in a week, or an excess of 1.5 hours from that of 18-20 hours prescribed
under the Faculty Manual of 2004, without being paid thereof for extra load.

Thus, for rendering 21.5 hours of actual teaching [hours]/load, or 1.5 hours in excess of that prescribed in the Faculty Manual of 2004, complainant
Mancol is entitled to: [(20,311.50/20) x 1.5] = Php1,523.36 overload pay per week since 2004; [while Valera is entitled to: [(22,044.00/20) x 1.5] =
Php1,653.30 overload pay per week since 2004).

Also, in requiring [petitioners] to teach at grade school which was already in excess of the 18-20 hours of actual teaching hours/load prescribed in
the Faculty Manual of 2004, [petitioners were] entitled to overload pay equivalent to the excess thereof for school year 2009-2010. To simplify,
[petitioners have] double teaching loads during Mondays, Wednesdays and Thursdays (from 12:35 nn to 1:55 pm equivalent to 240 minutes, or 4
hours); and single loads during Tuesdays and Fridays (from 1:15 nn to 1:55 pm for Tuesday and 12:35 nn to 1:15 [pm] for Friday; equivalent to 80
minutes, or 1.33 hours). As such, in a 5-day work week in grade school, complainant Mancol rendered about 320 minutes, or 5.33 hours of actual
teaching [hours]/load. The aforementioned teaching hours/loads in grade school do not reflect the additional time (approximately about 30 minutes
every day after class) spent by [petitioners] and other preschool teachers for their respective grade school students for checking papers and
proctoring, among others.

Thus, for rendering about 5.33 hours of actual teaching load in grade school for school year 2009-2010, complainant Mancol is entitled to a weekly
overload pay of Php5,413.01, in this wise: [(20,311.50/20) x 5.33] = Php5,413.01; [while complainant Valera is entitled to a weekly overload pay of
Php5,413.01 in this wise [22,044.00/20) x 5.33] = Php5,874.73].

There are four (4) weeks in a month and ten (10) months per school year. Thus, respondents should be held liable for the payment of overload pays
mentioned above for forty (40) weeks in a school year.[3]

Herein petitioners deny having terminated Mancol and Valera either actually or constructively. For Mancol, they aver that she was merely meted a
penalty of suspension for one (1) week for taking a leave of absence without the approval of the Directress as explicitly provided in the employee
handbook. As for Valera, they insist that she was never dismissed from work but was only advised to take either one (1) year sick leave for her to
fully recover from her spine operation or to be assigned to a higher grade level. On the issue of money claims, they aver that the same was already
dismissed by the DOLE-NCR Regional Director for lack of basis.

The Labor Arbiter, in a Decision[4] dated January 31, 2011, ruled that respondents were constructively dismissed from their employment and ordered
their immediate reinstatement and payment of monetary awards, thus:
WHEREFORE, premises considered, respondents St. Paul College of Pasig, Inc. (sic) and Sister Teresita Baricaua are found jointly and solidarily
liable for constructively dismissing complainants Anna Liza L. Mancol and Jennifer Cecile Valera and are hereby ordered to immediately reinstate
both of them to their former positions or equivalent positions under the same terms and conditions prevailing prior to their dismissal or at the option
of the respondents, to reinstate their names in the payroll also under the same terms and conditions prevailing prior to their constructive dismissal.

Respondents St. Paul College of Pasig, Inc. (sic) and Sister Teresita Baricaua are also ordered to pay complainant Mancol the following: (1) full
backwages from the time she was constructively dismissed, or from 21 June 2010, until the time of actual reinstatement, which to date amounts to
P163,438.30 (2) overtime pay equivalent to 15 minutes every day, and 90 minutes overtime every day on account of mandatory meetings and
conferences held beyond 3:30 pm, or a total of 105 minutes every day since 22 June 2007 until 21 June 2010 amounting to P166,617.76; (3)
overtime pay for work done on weekends based on the records of this case since 22 June 2007, amounting to P13,802.59; (4) a weekly overload
pay of Php1,523.36 counted from 22 June 2007, representing the amount equivalent to 1.5 hours of actual teaching/load per week rendered in
preschool, amounting to P178,233.12; (5) a weekly overload pay of P5,413.01 for school year 2009-2010, representing the amount equivalent to
5.33 hours of actual teaching/load per week in grade school, amounting to P216,520.40; (6) holiday pay amounting to P30,467.25; (7) 13th month
pay amounting to P50,778.75; and (8) service incentive leave pay amounting to P11,540.63. The computation are as follows:
Backwages:
Basic salary: P20,311.50
6/21/10 – 1/31/11
P20,311.50 x 7.3 mos. P148,273.95
13th month pay (1/12) 12,356.18
SILP: P20,311.50/22 x 5 x 7.3/12 = 2,808.19
P163,438.30
Overtime Pay for 105min./day:
6/22/07 – 6/21/10
P923.25/8 x 1.25 = P144.2578/hr. (OT rate)
P144.2578 X 1.75 X 22 X 30 = 166,617.76
Overtime pay work on weekends (OT on RD):
P20,311.50/22 = P923.25/day
P923.25/8 = 115.40625 basic hourly rate
P115.40625 + (25% of P115.40625) = 144.26
Regular OT/hour
 130% of P115.40625 = P150.0281 (RD OT/hr)
P150.0281 x 92 hrs = 13, 802.59
Overload pay in Preschool:
P1,523.36 x 117 weeks = 178,233.12
Overload Pay in Grade School:
P5,413.01 x 40 weeks = 216,520.40
Holiday Pay:
6/22/07 – P6/21/10
P20,311.50/22 P923.25/day
P923.25 x 33 days = 30,467.25
13th Month Pay:
6/22/07 – 6/21/10
P20,311.50 X 30/12 = 50,778.75
Service Incentive Leave Pay:
6/22/07 – 6/21/10
P923.25x 5/12 x 30 mos. =      11,540.63
P831,398.70

Respondents St. Paul College of Pasig, Inc. (sic) and Sister Teresita Baricaua are likewise ordered to pay complainant Valera the following: (1) full
backwages from the time she was constructively dismissed, or from 21 June 2010, until the time of actual reinstatement, which date amounts to
P177,379.05; (2) overtime pay equivalent to 15 minutes every day, and 90 minutes overtime every day on account of mandatory meetings and
conferences held beyond 3:30pm, or a total of 105 minutes every day since 22 June 2007 until 21 June 2010 amounting to P180,829.69; (3)
overtime pay for work done on weekends based on the records of this case since 22 June 2007, amounting to P14,979.90; (4) a weekly overload
pay of Php1,653.30 counted from 22 June 2007, representing the amount equivalent to 1.5 hours of actual teaching/load per week rendered in
preschool, amounting to P193,436.10; (5) a weekly overload pay of P5,874.73 for school year 2009-2010, representing the amount equivalent to
5.33 hours of actual teaching/load per week in grade school, amounting to P234,989.20; (6) holiday pay amounting to P33,066.00; (7) 13th month
pay amounting to P55,110.00; and (8) service incentive leave pay amounting to P12,525.00. Hereunder is our computation:
Backwages:
Basic salary: P22,044.00  
6/21/10 – 1/31/11 160,921.20
P22,044.00 x 7.3 mos. 13,410.10
13th month pay (1/112)        3,047.75
SILP: P20,311.50/22 x 5 x 7.3/12 = P177,379.05
Overtime Pay for 105min./day:
6/22/07 – 6/21/10
P1.002.00/8 x 1.25 P156.5625/hr. (OT rate)
P156.5625 x 1.75 x 22 x 30 = 180,829.69
Overtime pay work on weekends (OT on RD):
P22,044.00/22 = P1,002.00/day
P1,002.00/8 = 125.25 basic hourly rate
P125.25 + (25% of P125.25) = 156.5625
Regular OT/hour
130% of P125.25 = P162.825 (RD OT/hr)
P162.825 x 92hrs = 14,979.90
Overload pay in Preschool:
P1,653.30 x 117 weeks = 193,436.10
Overload Pay in Grade School:
P5,874.73 x 40 weeks = 234,989.20
Holiday Pay:
6/22/07 – 6/21/10
P22,044.00 = P1,002.00/day
P1,002.00 x 33 days = 33,066.00
13th Month Pay:
6/22/07 – 6/21/10
P22,044.00 x 30/12 = 55,110.00
Service Incentive Leave Pay:
6/22/07 – 6/21/10
P1,002.00 x 5112 x 30 mos. =        12,525.00
P902,314.94

Lastly, respondents St. Paul College of Pasig, Inc. (sic) and Sister Teresita Baricaua are ordered to pay Mancol and Valera attorney's fees
equivalent to ten percent of the total judgment award.

All other claims are denied.

SO ORDERED.[5]
Petitioners elevated the case to the National Labor Relations Commission (NLRC) and the latter in its Decision[6] dated September 30, 2011 reversed
the decision of the Labor Arbiter, disposing the case as follows:
WHEREFORE, premises considered, the appeal is hereby given due course. The assailed decision dated January 31, 2011 is hereby REVERSED
and SET ASIDE and a new one rendered DISMISSING the complaints interposed by the complainants for lack of merit. Complainants are hereby
DIRECTED to report for work, if they so desire, within five days from receipt of this decision and for respondents to ACCEPT them without
qualifications. The suspension imposed upon complainant Anna Liza Mancol is deemed served.

SO ORDERED.[7]

Aggrieved, respondents filed a petition for certiorari under Rule 65 of the Rules of Court with the CA. In its Decision[8] dated April 16, 2015, the CA
granted respondent's petition and reversed the decision of the NLRC, thus:
WHEREFORE, the petition is GRANTED. The Decision of the National Labor Relations Commission dated September 30, 2011 in NLRC LAC NO.
06-001594-11(8) is hereby REVERSED and SET ASIDE. Accordingly, the Decision of the Labor Arbiter dated January 31, 2011 is REINSTATED
with the following MODIFICATIONS as follows:
1. The award of overtime pay, holiday pay, holiday premium, rest day premium and nightshift differential overload pay are hereby DELETED;

2. Private respondents SPCP and Sister Teresita Baricaua, SPC, are ordered to pay petitioners moral and exemplary damages each in the amount
of Php100,000.00 and Php50,000.00, respectively;

3. Private respondents SPCP and Sister Teresita Baricaua, SPC are ordered to pay attorney's fees equivalent to ten percent (10%) of the total
monetary award;

4. Private respondents SPCP and Sister Teresita Baricaua, SPC are directed to pay petitioners their accrued wages reckoned from January 31,
2011 until September 30, 2011; and

5. Petitioners are declared not guilty of forum shopping.

SO ORDERED.[9]

Petitioners filed their motion for reconsideration but it was denied by the CA in its Resolution dated January 8, 2016, thus:
WHEREFORE, in view of the foregoing, the Court resolves to:
1. DENY private respondents' Motion for Reconsideration for lack of merit; and

2. CLARIFY and DECLARE that in lieu of reinstatement, the petitioners are entitled to separation pay computed from Anna Liza L. Mancol and
Jennifer Cecile Valera's respective first days of employment with St. Paul College, Pasig, up to the finality of this decision at the rate of one month
pay per year of service.

The LABOR ARBITER is hereby ORDERED to make a RECOMPUTATION of the total monetary benefits awarded and due to the petitioners in
accordance with this Resolution and Our April 16, 2015 Decision.

SO ORDERED.[10]

Hence, the present petition raising the following arguments:

6.01 Contrary to the "Finding of Fact" of the Court of Appeals that Mancol was placed on preventive suspension, Mancol was NEVER SUSPENDED
PREVENTIVELY. The story about Mancol's preventive suspension was a pure fabrication of the ponente Mr. Justice Edwin Sorongon and concurred
in by Presiding Justice Andres Reyes and Justice Ricardo Rosario. Worse, still, the ponente Mr. Justice Edwin Sorongon attributed this story to the
"decision" of the NLRC when [in] truth the NLRC decision NEVER stated that Mancol was preventively suspended. Herein petitioners even humbly
begged the Presiding Justice Andres Reyes and Justice Ricardo Rosario to read the NLRC decision and ask the ponente to show them where in the
NLRC decision was the statement that Mancol was preventively suspended. Petitioners were hoping against hope that the fabrication of facts was
purely the work of the notorious "Madame Arlene" gang of the law clerks and legal researchers in the Court of Appeals. But the three Justices
NEVER bothered to remedy or explain this grave falsification of the facts. In other words, the three justices simply decided to COVER UP this
falsification. WHY?

6.02 Contrary to the conclusion of the Court of Appeals, the NLRC correctly ruled that there was no constructive dismissal based on the evidence
and on the undisputed account of antecedent facts leading to the filing of the labor complaint last June 22, 2010.

6.03 Because respondents were not dismissed from the service, the Court of Appeals erred in affirming the award of "backwages" for respondents
under the principle of "no work, no pay". Since they had stopped reporting for work beginning June 22, 2010 (for Mancol) and June 16, 2010 (for
Valera), up to the present time, they are clearly not entitled to backwages.

6.04 The Court of Appeals erred in awarding separation pay because respondents abandoned their posts as far back as June 2011 and should have
been dismissed for CAUSE. Employees dismissed for cause are not entitled to payment of separation pay.

6.05 Neither was it correct for the Court of Appeals to rule that respondents must be paid wages from January 31, 2011 up to September 30, 2011.
The ruling is contrary to the evidence on record showing that respondents failed to report for work despite receipt of notice from the petitioners.

6.06 The Court of Appeals further erred in reinstating the labor arbiter's award for unpaid 13th month pay and SIL pay. The ruling has no evidentiary
basis as respondents never discussed this cause of action in all the pleadings filed below.

6.07 Finally, the Court of Appeals erred in holding the petitioners solidarily liable to respondents. Petitioner Sr. Teresita was only acting as officer of
the petitioner-corporation. Absent showing of malice and bad faith, officers cannot be held liable for damages and money claims of dismissed
employees.[11]
In their Comment[12] dated September 14, 2016, respondents argue that the CA correctly ruled that they were constructively dismissed by petitioners
and that the latter are solidarily liable to pay each of them their full backwages, separation pay in lieu of reinstatement, 13th month pay, service
incentive leave pay, moral damages, exemplary damages, attorney's fees and accrued wages.

The petition lacks merit.

As a general rule, only questions of law raised via a petition for review under Rule 45[13] of the Rules of Court are reviewable by this Court.[14] Factual
findings of administrative or quasi-judicial bodies, including labor tribunals, are accorded much respect by this Court as they are specialized to rule
on matters falling within their jurisdiction especially when these are supported by substantial evidence.[15] However, a relaxation of this rule is made
permissible by this Court whenever any of the following circumstances is present:
1. [W]hen the findings are grounded entirely on speculations, surmises or conjectures;
2. when the inference made is manifestly mistaken, absurd or impossible;
3. when there is grave abuse of discretion;
4. when the judgment is based on a misapprehension of facts;
5. when the findings of fact are conflicting;
6. when in making its findings[,] the Court of Appeals went beyond the issues of the case, or its findings are contrary to the admissions of
both the appellant and the appellee;
7. when the findings are contrary to that of the trial court;
8. when the findings are conclusions without citation of specific evidence on which they are based;
9. when the facts set forth in the petition[,] as well as in the petitioner's main and reply briefs[,] are not disputed by the respondent;'
10. when the findings of fact are premised on the supposed absence of evidence and contradicted by the evidence on record; [and]
11. when the Court of Appeals manifestly overlooked certain relevant facts not disputed by the parties, which, if properly considered, would
justify a different conclusion.[16]

Since the factual findings of the NLRC are completely different from that of the Labor Arbiter and the CA, this case falls under one of the exceptions,
therefore, this Court may now resolve the issues presented before it.

Constructive dismissal arises "when continued employment is rendered impossible, unreasonable or unlikely; when there is a demotion in rank
and/or a diminution in pay; or when a clear discrimination, insensibility or disdain by an employer becomes unbearable to the employee."[17] In such
cases, the impossibility, unreasonableness, or unlikelihood of continued employment leaves an employee with no other viable recourse but to
terminate his or her employment.[18]

By definition, constructive dismissal can happen in any number of ways. At its core, however, is the gratuitous, unjustified, or unwarranted nature of
the employer's action. As it is a question of whether an employer acted fairly, it is inexorable that any allegation of constructive dismissal be
contrasted with the validity of exercising management prerogative.[19]

Based on the facts of this case, respondents Mancol and Valera were constructively dismissed. The CA, in affirming the findings of the Labor Arbiter,
correctly found that petitioners committed acts that are considered to be gratuitous, unjustified, unwarranted and unfair on the part of the
respondents, thus:
In case of Valera, she underwent a successful scoliosis operation on April 14, 2010 covered by an approved leave until June 11, 2010. The Human
Resource Office assured her that she may report back for work on June 15, 2010 and all she needs to bring is a medical certificate attesting her
fitness to go back to work. However, much to her surprise, Sister Baricaua insisted that she should go on leave for one year. When Valera reasoned
out her desire to teach, Sister Baricaua uttered harsh remarks: "Why are you insisting on working? Can't your mom and dad feed you anymore? x x
x "Ask help from your brothers and sisters, tell them, 'please help me, I have no work anymore. 'I know Jeng, it is hard and painful to accept the
truth, but I am sorry, I cannot accept you.  " Valera was later on informed by Sister Lota that she has no more teaching load or class to teach with.
When Valera submitted her medical certificate, as previously advised, both the Human Resource Office and Sister Baricaua refused to accept the
same. Worse, Valera received a letter dated June 2, 2010, from Sister Baricaua accompanied by insults and forcing her to go on leave for 1 year.
Not only that, after filing the complaint for illegal dismissal on June 22, 2010, Valera received on June 30, 2010, a letter dated June 28, 2010,
requiring her to submit documents and to report for work within the period specified therein, and yet, when Valera reported back for work as
instructed on July 5, 2010, she was shocked to know that she was already barred from working in utter contradiction of private respondents' June 28,
2010 letter.

For Mancol's part, she was allegedly prevented from: 1.) teaching in her class; 2.) entering her classroom; 3.) being introduced to her students; 4.)
preparing teaching aids and materials; and 5.) going to other offices within the institution when she reported back for work on June 16, 2010, after
going through a fertility test in Canada with her husband.

xxxx

Case law defines constructive dismissal as a cessation of work because continued employment is rendered impossible, unreasonable or unlikely,
when there is a demotion in rank or diminution in pay or both; or when a clear discrimination, insensibility, or disdain by an employer becomes
unbearable to the employee. The test of constructive dismissal is whether a reasonable person in the employee's position would have felt compelled
to give up his position under the circumstances. It is an act amounting to dismissal but made to appear as if it were not. In fact, the employee who is
constructively dismissed may be allowed to keep on coming to work. Constructive dismissal is therefore a dismissal in disguise.  The law recognizes
and resolves this situation in favor of employees in order to protect their rights and interests from the coercive acts of the employer.

Both Mancol and Valera constantly attempted to report back to work. However, the private respondents barred them from resuming their work. In
case of Mancol, she was prevented from teaching in her class, going inside her classroom, being introduced to her students, preparing teaching aids
and materials, and going to other offices within the institution when she reported back for work. Neither the preschool principal nor the Human
Resource Office offered any reason for the same. She also exerted every effort to explain that she was on leave for health reasons. She even
submitted a copy of a medical certificate issued by her attending physician in Canada and photocopies of her tickets. Valera, on the other hand,
submitted her medical certificate stating that she is fit to work before the Human Resource Office. However, Sister Baricaua all the more insisted that
she should take a leave of one year; otherwise, she will be reassigned to a higher year level where students are more independent learners. She
was also given no teaching load for that academic year.[20]

The above findings of the CA are an affirmation of the earlier findings of the Labor Arbiter, thus:
Respondents cannot impute liability upon complainant Mancol for allegedly taking an absence without leave for health reasons. It must be noted that
as early as April 2010, complainant Mancol informed the preschool principal Sister Lota of the fact that she may go on personal leave for a month for
health reasons when she secured a Certification of Employment & Compensation issued by respondent SPCP. Also, complainant Mancol
immediately applied for personal leave from 21 May 2010 to 18 June 2010 and submitted it to Sister Lota, almost a week before her scheduled flight
to Toronto, Canada on 21 May 2010. In fact, Sister Lota recommended the approval of the leave application and immediately referred it to the Office
of the Directress, respondent Sister Baricaua. It was due to respondent Sister Baricaua's inaction why Mancol's meritorious leave application was not
approved prior to her departure for medical reasons. Thus, respondents cannot impute liability upon Mancol due to their own inaction or ineptitude.

Respondents' argument that a substitute teacher has been hired to take her place until June 24 because Mancol has been absent from work
has no merit. Respondents cannot justify their act of preventing Mancol from assuming her duties and entering the school premises due to such
reasons. Mancol did not abandon her work but was prevented from performing it by the respondents.

xxxx

As to complainant Valera, this Office likewise gives credence to her sworn statement which supports her allegation that she was constructively
dismissed by the respondents.

The records bear out that on 14 April 2010, complainant Valera underwent a successful scoliosis operation and had an approved leave with the
respondents until 11 June 2010. That on 25 May 2010, she went to the school premises to decorate her classroom; and on 27 May 2010,
respondent Sister Baricaua called a meeting with preschool. teachers including Sister Luisita Lota. While respondent Sister Baricaua was informed
that complainant Valera was already fit to work and has already started decorating her classroom, respondent Sister Baricaua unjustifiably refused to
give any teaching load to complainant Valera. Moreover, on 28 May 2010, complainant Valera asked Ms. Cecile Reyes of the Human Resource
Office about her leave status and she was told that her leave is up to 11 June 2010 and she can report back for work and teach at preschool upon
showing of a medical certificate that she's fit to work.

However, on 30 May 2010, complainant Valera called Sister Lota and the latter informed her of respondent Sister Baricaua's decision for her to take
a leave of absence for one year. Shocked and wanting to get an explanation, complainant Valera talked to respondent Sister Baricaua. The latter
insisted that complainant Valera should go on leave for one year and required her to prepare a letter-application for leave for one year as soon as
possible. Complainant Valera refused and stated that she wants to resume her duties as a teacher but respondent Sister Baricaua berated her by
saying: "Why are you insisting on working? Can't your mom and dad feed you anymore?" and she continued: "Ask help from your brothers and
sisters, tell them 'please help me, I have no work anymore.' I know Jeng, it is hard and painful to accept the truth, but I am sorry, I cannot accept
you." That on 02 June 2010 around 10:00 am, Ms. Calimbahim called complainant Valera informing the latter that the former will be taking
complainant Valera's place as teacher. During this time complainant Valera's personal things and classroom decors were removed and transferred to
another room. On the first day of classes or on 07 June 2010, Sister Lota and the preschool and grade school principal Ms. Arlene Cruz personally
confirmed that she is on leave for one year and that she has no more teaching load or class to teach in preschool and grade school. Thereafter, or
on 15 June 2010, complainant Valera reported back to work but was not given any teaching load and no class was assigned to her. She went to Ms.
Arlene Cruz and submitted the medical certificate stating that she's fit to work (Annex "A" of complainant Valera's Position Paper). However, after
reading the medical certificate, Ms. Cruz told complainant Valera once again that she has no more teaching load or class in preschool and grade
school. Complainant Valera met again with respondent Sister Baricaua. She personally submitted her medical certificate that she is already fit to
work but respondent Baricaua refused to accept the certificate. Instead, respondent Sister Baricaua just gave complainant Valera a letter dated 02
June 2010 (Annex "B" of complainant Valera's Position Paper) degrading her and forcing her to go on leave for one year.

By respondent's own admission, respondent Sister Baricaua in a letter dated June 2, 2010 (Annex "H" of respondents' Position Paper), respondent
Sister Baricaua formalized the options she presented to complainant Valera to (1) take a one (1) year sick leave, or (2) agree to an assignment to a
higher grade level. This was nothing but a scheme to force complainant to quit her job.

Moreover, respondents do not deny that they did not give any teaching load to complainant Valera after her successful surgery despite her
submission of a medical certificate that she is already fit to work. Instead, they tried to justify such act by saying that they were allegedly worried
about Valera's health. This is baseless and unsubstantiated precisely because Valera has already proven that she is fit to work.

Obviously, as in the case of complainant Mancol, respondents also wanted to get rid of complainant Valera by making her quit her job because
continued employment is rendered impossible, unreasonable or unlikely and because there was a clear discrimination, insensibility, or disdain by the
respondents that becomes unbearable to the employee. Indeed, complainant Valera was constructively dismissed.[21]

From the above findings alone, it is clear that petitioners employed means whereby the respondents were intentionally placed in situations that
resulted in their being coerced into severing their ties with the same petitioners, thus, resulting in constructive dismissal. An employee is considered
to be constructively dismissed from service if an act of clear discrimination, insensibility or disdain by an employer has become so unbearable to the
employee as to leave him or her with no option but to forego with his or her continued employment.[22]

As to the claim of petitioners that respondent Mancol was not constructively dismissed but the latter abandoned her job, such was not duly proven.
For a termination of employment on the ground of abandonment to be valid, the employer "must prove, by substantial evidence, the concurrence of
[the employee's] failure to report for work for no valid reason and his categorical intention to discontinue employment."[23] In this case, there
is no proof that respondent Mancol abandoned her work, instead, evidence show that she wanted to return to work but was prevented by the
respondents. As aptly found by the Labor Arbiter:
This Office finds that respondents failed to discharge their burden of proving the existence of the elements of abandonment of work. The records are
replete of proof that Mancol had no intention of abandoning her work. On the contrary, she wanted to resume her duties as a teacher. In fact, on or
around 21 June 2010, after her medical leave of absence, complainant Mancol reported back for work and was in the school premises at around
6:30 am. However, respondents prevented her from teaching in her class, entering her classroom, being introduced to her students, preparing
teaching aids and materials, and going to other offices within the school premises. More importantly, the very next day or on 22 June 2010, Mancol,
together with complainant Valera, filed an instant complaint for constructive dismissal. Thus, the records of this case belie respondents' argument of
abandonment of work.[24]

In the same manner, petitioners also failed to prove that respondent Valera abandoned her work, thus:
We find that respondents failed to discharge their burden of proving the existence of the elements of abandonment of work. The records are replete
of proof that Valera had no intention of abandoning her work. On the contrary, she wanted to resume her duties as a teacher. In fact, on 25 May
2010, she went to the school premises to decorate her classroom and insisted on resuming her duties as a teacher when respondents unjustifiably
and in bad faith refused to give her any teaching load. Also, complainant Valera also filed the instant complaint for constructive dismissal on 22 June
2010, or a week after 15 June 2010 when complainant Valera reported back to work but was not given any teaching load and no class was assigned
to her.[25]

Anent the argument raised by petitioners that the CA erred in ruling that Mancol was placed on preventive suspension, such is no longer relevant
due to the above findings proving that respondents Mancol and Valera were indeed constructively dismissed.

WHEREFORE, the Petition for Review on Certiorari under Rule 45 of the Rules of Court dated March 7, 2016 of petitioners St. Paul College, Pasig
and Sister Teresita Baricaua is DENIED for lack of merit. Consequently, the Decision dated April 16, 2015 and the Resolution dated January 8,
2016, of the Court of Appeals in CA-G.R. SP No. 124501, are AFFIRMED.

SO ORDERED.

[ G.R. No. 203587, August 13, 2018 ]

DIWA ASIA PUBLISHING, INC. AND SATURNINO BELEN, PETITIONERS, V. MARY GRACE U. DE LEON RESPONDENT.

DECISION

TIJAM, J.:

This is a petition for review[1] under Rule 45 of the Rules of Court filed by petitioners Diwa Asia Publishing, Inc. (Diwa) and Saturnino Belen, assailing
the Decision[2] dated July 2, 2012 and the Resolution[3] dated September 20, 2012 of the Court of Appeals (CA) in CA-G.R. SP No. 99055, which
reversed and set aside the Decision[4] dated November 29, 2006 and the Resolution[5] dated February 28, 2007 of the National Labor Relations
Commission (NLRC) in NLRC NCR 06-07521-04 (CA No. 046593-05) which, in turn, affirmed the Decision[6] dated October 7, 2005 of the Labor
Arbiter (LA) in NLRC NCR Case No. 06-07521-2004 dismissing the complaint filed by Mary Grace U. De Leon (respondent) for constructive
dismissal.
The Facts
Diwa Learning Systems, Inc. (DLSI) is a subsidiary of Diwa.[7] It is part of a conglomeration of companies that include First Asia Ventures Company,
Inc. (FAVCI) and Fastech Advanced. Assembly, Inc. (Fastech).[8] Petitioner Saturnino Belen[9] is the Chairman of Diwa's Board of Directors.[10]
Respondent was invited to join Fastech, but was not eventually hired due to a freeze order against the corporation. Gemma P. Asuncion (Asuncion),
then Vice-President (VP) of Fastech, endorsed her to Diwa.[11]
Respondent was subsequently hired by DLSI and began working as its Human Resource (HR) Manager on August 2, 2001, becoming a regular
employee on February 2, 2002. Although her contract was under DLSI, her work encompassed handling the HR Department of the other companies
in the conglomeration.[12]
On June 23, 2004, respondent filed a Complaint against petitioners for constructive dismissal, docketed as NLRC NCR Case No. 06-07521-2004.[13]
Respondent's Averments
According to respondent, in March 2002, the employment status of Jayde Salvan (Salvan), an editor who had been working for Diwa for two (2)
continuous years, was converted into "contractual status for the sole reason of 'incompetence.'" As HR Manager, she gave her opinion on the matter.
The management found her opinion unacceptable and even construed it as an insult. From then on, her working relationship with the company
turned sour. The management even made imputations that she took part in inciting employees to file labor cases against Diwa.[14]
In July 2003, respondent was informed that the FAVCI Executive Director for HR, Asuncion, would forthwith be regularly present in the former's office
to provide guidance for six (6) months in the management of employees which was then perceived as pro-labor. On August 11, 2003, Asuncion
informed respondent that the former would assume the position of Diwa's President, Amada J. Javellana (Javellana), as her immediate supervisor.
However, the company's hierarchical structure showed that she was under the supervision of no officer other than the President, and such was the
situation for the past two years, before the incident involving Salvan.[15]
Respondent perceived that she was being demoted as Asuncion instructed her to submit all work and decisions, which she previously had the liberty
to handle and make, for Asuncion's review and evaluation.[16]
Respondent nonetheless carried on with her job but management remained hostile towards her, blowing even the smallest issue out of proportion,
faulting her for situations she had nothing to do with or beyond her control, and giving her directives which management would later deny.
[17]
 Furthermore, she was unfairly accused of failing to properly perform her job, bypassed in important HR-related decisions, berated in front of her
staff, and held accountable for the mistakes of others. These incidents are allegedly well-outlined in the exchanges of electronic mails (e-mails)
among Asuncion, respondent and other parties. Respondent also averred that Asuncion would shout at her and would more often than not give
sarcastic comments for everything she did and said.[18]
In support of her claim of a hostile and unbearable work environment, respondent submitted the affidavit of one Mary Grace A. Lusterio (Lusterio), a
former Diwa employee.[19]
On October 2, 2003, while respondent was on a five (5)-day authorized sick leave, Mary Ann Noreen Dulig (Dulig), Fastech's Compensation and
Information System Manager, was assigned to Diwa's HR Department to help respondent with the completion of the job evaluation. When
respondent returned and even after the job evaluation was completed, Dulig continued to be involved in, and performed, respondent's tasks.[20]
Respondent also claimed that Javellana tried to give her a failing mark in her performance appraisal for June to December 2003. On March 15,
2004, Asuncion advised her that the management wanted her out because things were "not working out," but it was willing to give her separation
pay. She rejected the offer, convinced she did nothing to warrant the termination of her employment. Asuncion then told respondent that she could
go on vacation leave to think about the management's offer, but respondent declined.[21]
On March 15, 2004, respondent learned that the management was willing to give her P75,000.00 as separation pay, but because it did not give any
justifiable reason to sever her employment, she continued to work as HR Manager even as she experienced cold treatment and verbal abuse from
the management. In April 2004, she was bypassed when the company decided to terminate the employment of two employees.[22]
On May 7, 2004, Asuncion once again made an offer of separation pay, this time in the amount of P150,000.00, the additional P75,000.00 to be
taken out of her own pocket, but respondent still refused to quit her employment.[23]
On June 22, 2004, she was informed by Dulig that Asuncion would like to discuss some matters with her and an IT personnel. When she arrived in
Asuncion's office, nobody else was around except for Asuncion who had been reading a list of names on her laptop. As respondent could not recall
all the names of the applicants set for interview, she leaned close to the laptop to have a clearer view of the screen. Finding the letters too small, she
intimated to Asuncion that she could not read the names. Asuncion, however, rudely shoved the laptop to her and in an angry and high-pitched tone
said, "O sige, eto! Eto! Tingnan mo!" As she could no longer stand the situation, she left the room while Asuncion angrily shouted for her to come
back, saying that her act amounted to insubordination. The following day, respondent filed her complaint.[24]
Petitioners' Counter-Averments
Petitioners countered that respondent was dismissed for cause, i.e., for her unauthorized absences from June 23, 2004 to August 6, 2004, effective
August 7, 2004.[25]
Petitioners argued that the e-mails submitted by respondent did not prove a hostile attitude of management towards her. They described the
communications as mere replies to queries, opinions, advice, instructions, comments and a few reprimands couched in mild terms in response to
respondent's oversight in the course of her work as HR Manager. They asserted that the occasional reprimands should be viewed as constructive
criticisms that came with respondent's position which commanded great responsibility.[26]
Petitioners denied that respondent was demoted when Asuncion became her supervisor as the latter held a higher position in FAVCI and, in the
exercise of management prerogative, was merely seconded to Diwa to improve its HR's functions. They further averred that respondent was never
relegated to a lower position or suffered a diminution of benefits.[27]
Petitioners explained that Dulig was assigned to assist in the job evaluation project in Diwa because of her similar work experience in Fastech. She
never performed any of respondent's tasks and was made to assume the functions of the HR Manager only after respondent left the company.[28]
Petitioners offered a different account of the incidents cited in Lusterio's affidavit, indicating that Lusterio's attack on Asuncion was too personal as to
indicate that she had an axe to grind against the latter.[29]
Petitioners denied that Asuncion shoved her laptop to respondent on June 22, 2004, alleging that Asuncion merely turned the laptop "fronting"
respondent so the latter could have a better view of the screen.[30]
Petitioners also denied offering monetary consideration to respondent.[31] According to petitioners, following the management's evaluation of her
performance, respondent became overly sensitive, with a propensity to blow issues out of proportion. Her hostile attitude towards her work and co-
employees affected the discharge of her functions, prompting Asuncion to call her to a meeting to discuss these problems.[32]
During their conversation, respondent claimed that it had become difficult and unbearable for her to work in such a hostile environment. Asuncion
confirmed to her that the company was also not happy with her performance but reassured her that the comments on her were not meant as a direct
and personal attack, but as an objective and well-meaning assessment of the problems besetting her department. When respondent insisted that
she would not tolerate the hostile work environment, Asuncion told her that since both parties were no longer happy, parting ways was always an
option.[33]
Respondent then told Asuncion to make her an offer. After Asuncion advised respondent to evaluate her financial requirements, respondent quoted
the amount of P300,000.00 to represent her guaranteed salary up to the end of the year as she expected that it would not be easy to find another
job. Asuncion told her that there was no basis for the amount as respondent merely speculated that her employment had been intolerable. Asuncion,
however, stated that she could give respondent something from her personal funds as she felt "morally responsible" for the fact that respondent
resigned from her previous job after she invited the latter to join Fastech but was not hired for economic reasons.[34]
Asuncion eventually informed respondent that the management refused to accede to her demand. From then on, respondent became even more
defensive when dealing with the management.[35]
On June 23, 2004, respondent took flight from the office and no longer reported for work.[36]
Ruling of the LA
On October 7, 2005, the LA dismissed respondent's complaint for constructive dismissal for lack of merit.[37] She sustained petitioners' argument that
if negative feedbacks and reprimand were a form of harassment, an employer would virtually be powerless to call the attention of and correct their
officers.[38]
Ruling of the NLRC
Respondent's appeal, docketed as NLRC NCR 06-07521-04 (CA No. 046593-05), was initially granted in the NLRC Decision[39] dated August 22,
2006, the dispositive portion of the Decision reads:
WHEREFORE, premises considered, the decision under review is hereby REVERSED and SET ASIDE, and another entered, declaring the
complainant ILLEGALLY DISMISSED from her employment.
Accordingly, respondent Diwa Asia Publishing, Inc. is ordered to pay the complainant FULL BACKWAGES from June 23, 2004 up to the finality of
this decision, and SEPARATION PAY at the rate of ONE MONTH for every year of complainant's service from August [2], 2001 until finality of this
decision.
SO ORDERED.[40] (Citation omitted)
Petitioners sought reconsideration[41] and on November 29, 2006, the NLRC rendered another Decision[42] which set aside its August 22, 2006 ruling
and affirmed the LA's dismissal of the complaint.[43] Respondent's motion for reconsideration[44] was denied in the NLRC Resolution[45] dated February
28, 2007.
Ruling of the CA
Respondent elevated the case to the CA via a petition for certiorari, docketed as CA-G.R. SP No. 99055, which was granted in the assailed
Decision[46] dated July 2, 2012, the dispositive portion of the Decision reads:
WHEREFORE, premises considered, the present petition is hereby GRANTED. Accordingly, the assailed Decision of the NLRC dated 29 November
2006 is hereby SET ASIDE and its earlier Decision dated 22 August 2006 is ordered REINSTATED.
SO ORDERED.[47]
In a Resolution[48] dated September 20, 2012, the CA denied petitioners' motion for reconsideration for lack of merit. The CA ratiocinated that:
[T]he evidence submitted proving the hostility brought about by the SALVA issue, the [respondent's] humiliation by ASUNCION as corroborated by
the sworn statement of [respondent's] co-employee, the offer of separation pay to the [respondent], the conversation threads in the electronic mails
of the parties involved, the disregard of the [respondent's] input in effecting policies despite being the human resource manager, and [petitioners']
allegation that the [respondent] abandoned her work, without proving the requirements set forth by law and jurisprudence, all point to no conclusion
other than that reached in the NLRC Decision dated 22 August 2006.[49]
Hence, this petition, grounded on the following arguments: (1) the issuance of communications to reprimand and/or correct an erring employee forms
part of the employer's management prerogatives and is not tantamount to harassment, let alone illegal dismissal; and (2) the award of backwages
should be deleted, if not minimized, given the company's good faith, or adjusted since, because of the fire that gutted the CA's records, said amount
has ballooned through the years before the case could be resolved.[50]
Ruling of the Court
The petition lacks merit.
"[C]onstructive dismissal [is] a cessation of work because continued employment is rendered impossible, unreasonable or unlikely; when there is a
demotion in rank or diminution in pay or both; or when a clear discrimination, insensibility, or disdain by an employer becomes unbearable to the
employee."[51] It is an act amounting to dismissal but made to appear as if it were not. In other words, it is a dismissal in disguise.[52]
The test of constructive dismissal is whether a reasonable person in the employee's position would have felt compelled to give up his position under
the circumstances.[53] Considering the facts of this case, the Court agrees with the CA that respondent was constructively dismissed.
Asuncion's e-mails
We begin with the e-mails received by respondent from Asuncion. Petitioners would have this Court believe that they were mere replies, instructions
and comments couched in "mild terms," to be viewed as constructive criticisms, but the communications, both as to language and tone, indicate a
pattern of fault-finding and nitpicking, and an attitude of disdain. The correspondence between respondent and Asuncion also reveals that Asuncion
had purposely left respondent out on HR matters.
When respondent at one time e-mailed a project manager, copy furnished (cc) Asuncion and others, Asuncion directed her to observe proper
protocol by discussing the matter with her first because the project manager was also a VP of the company and respondent was merely a manager.
[54]
 When respondent explained that she communicated directly to the VP as project manager because it was agreed in a meeting that all project
concerns should be addressed directly to the latter to ensure swift response,[55] Asuncion replied by accusing her of simply "quibbling," thus:
JTT is a VP no matter what project he undertakes. Being called a Change Manager is just a nomenclature. He is VP by virtue of his employment
contract. You are quibbling Grace.
He is a VP therefore it should only be proper that you raise whatever concern you may have to your immediate superior instead of addressing it to
him. If time was a consideration then all you had to do was pick up the phone and call me which you prefer not to do nowadays – you ask your staff
to ask me.[56] (Emphasis ours)
Answering the foregoing e-mail, respondent reiterated that it had been understood that anyone could go directly to the project manager, adding that:
In fact, it was also discouraged to pass the concerns from one person to another as JDE is time bounded. That's what others did before and there
was no issue about it. After all, that was the primary reason why the position of Change Manager was established.
On your remarks that I prefer not to call you nowadays and I asked my staff to call you directly instead:
My staff were wondering why you sent and addressed your e-mail to them and not to me, not even a cc, which you usually do. Specifically, after we
talked of your offer of separation, which left me uncertain (until this time, I have not received any updates from you), I allowed my staff to go directly
to you instead.
Honestly, communicating with you has become rather awkward. We are both from HR, and as colleagues so we should be more better [sic] in our
remarks. It does no good to hear blunt and insensitive criticisms, instead of constructive ones.
I have no other purpose writing this reply but for clarification. I just hope that this would be taken in good light.[57] (Emphasis ours)
Five days before the May 10 elections of 2004, respondent submitted to Asuncion a draft of a memorandum regarding the "May 10 holiday," telling
her that she had been hanging on to said draft until the right announcement from Malacañang on whether it would be a legal or special holiday
and indicating that HR had just inquired with Malacañang but still received no update. In response, Asuncion faulted her, first for not indicating her
name, and then for submitting the memorandum knowing that it might be wrong, telling her to be more resourceful and proactive by checking the
DOLE or Malacanang's website and to ask HR practitioners.[58] Respondent consequently replied that HR had in fact made the inquiries, thus:
Yesterday, DOLE referred us to Malacañang. Up to this time, Malacañang has no declaration about the May 10 holiday. Also yesterday, I inquired to
[sic] a number of HR practitioners. Likewise, they have no exact information. Despite the lack of announcement, others already declared May 10 as a
special holiday, and others are still waiting for the exact announcement.[59]
Interestingly, petitioners, in arguing that Asuncion's comments were a mere reaction to respondent's alleged failure to properly discharge her duties,
omitted to indicate the above-quoted e-mails in their petition.
On another occasion, Asuncion faulted respondent for not submitting two assigned tasks on time. In reply, respondent "beg[ged] to disagree" and
forwarded to Asuncion the work she previously e-mailed, asking her to note that the tasks were submitted to her on the due date.[60] Despite this,
Asuncion insisted that respondent did not meet the deadline and accused respondent of "quibbling." Asuncion wrote:
I am the sole recipient. I did not receive it.
As long as there is no proof that you sent it then you are considered not in compliance with the Monday deadline.
Let us avoid quibbling since there is no proof that you sent it. Just begging to disagree is not enough.[61]
It has not escaped this Court's attention that once again, petitioners failed to indicate in their petition material portions of the e-mail thread,
particularly the e-mails respondent forwarded to correct Asuncion's claim that she failed to meet the deadline.[62]
We also note of another task assigned by Asuncion to respondent for accomplishment on a particular date, June 15, 2004. The petition itself shows
that respondent e-mailed the assignment - a draft-memo on the attendance of managers and supervisors - on June 15, 2004 for Asuncion's review.
This notwithstanding, Asuncion claimed that the draft was given one day late.[63]
On yet another occasion, Asuncion faulted respondent for not submitting her performance appraisal form, prompting respondent to point out that she
had in fact e-mailed the form the day before.[64]
At one point, too, Asuncion admonished respondent for delay in the submission of an assigned work. Respondent explained that she had emailed
her work on time but discovered the next day that her e-mail had remained in her Outbox. Upon such discovery, she re-sent the e-mail to Asuncion
and asked another HR personnel, "Cholet," to do the same on her computer to be sure that it was delivered. The same HR personnel, according to
respondent, saw that her message to Asuncion had still been in her Outbox.[65] Respondent's explanation, however, merited the following response
from Asuncion:
Well, what can I say? Again, you have an excuse.
But it is not acceptable. You know why? I suggest you go through a briefing with IT regarding email use. If the message is in your Outbox and you
turn your PC off then there is no way that the message will be sent. I am assuming that you turned your PC off because we have a rule on leaving
PCs turned on.
Do you have to be told to wait for the message to pop up in your Sent Items to ensure that it was indeed sent? If yes, then I may have erred in
assuming that you know how to use the email.
Consider this a warning for not complying with a deadline. Please review how to use your email.[66]
Not content with the foregoing reproof, Asuncion added:
P.S. I have to cc Cholet since you told me that she has been assigned to handle Records. I want this filed in your 201 file.[67] (Emphasis ours)
There was also the instance where Asuncion e-mailed respondent, faulting her for proceeding with the Job Evaluation without having the managers
accomplish the Role Clarification. As it turned out, however, Asuncion had sent an e-mail advising respondent to go on with the job evaluation even
without the role clarification requirements.[68]
Furthermore, when an HR consultant e-mailed respondent, cc Asuncion and other Diwa officers, in part thanking respondent for "following up the
slotting of non-benchmark positions" and setting a revised timeline for the submission of evaluation forms,[69] Asuncion sent the following e-mail to
respondent:
I find Ethel's email funny. Are you giving her the impression that you are just supposed to follow it up with me? Well, if this is true then we really have
a problem. Me, and especially you are "owners" of this project together with Mads and the DIWA officers. I think you better correct this impression
asap.
On the non-benchmark positions, please send me an update. How many are still pending? And, please do not tell me that you are conducting an
orientation or taking a break or have to go home early. LFL and RMC said that they have already submitted everything. Try to email the update
within today. Let us discuss the details tomorrow.[70]
Asuncion's e-mail prompted respondent to reply:
Regarding Ethel's email to you following up the slotting of the non-benchmark positions, I have not in any way given her the impression that you will
be providing me or her with the evaluation forms. She was advised by AJJ that you will be handling the slotting of the non-benchmark position, thus
her constant emails to you for updates. I have also forwarded her emails to you as requested by her for reasons that her emails bounced back or that
she has not been receiving replies from you.
Furthermore, Ethel is also aware that I am the one following-up the submission of the evaluation forms from all the officers. In fact, I have already
submitted the forms of six departments to her yesterday, Oct. 2. I will be sending you exchange of emails for your information.
If there are still other concerns that need further clarifications, I would be more than willing to discuss them in a meeting at your convenience.[71]
On another occasion, Asuncion faulted respondent for sending her the same e-mail twice with different attachments. It turned out, however, that
respondent had been having difficulty with her computer and the IT technician erroneously attached the wrong file to her first e-mail. Respondent
sent an SMS message to Asuncion precisely to inform her of the mistake and subsequently e-mailed the correct attachment. Asuncion, however,
saw only the mistake, admonishing respondent and asking her which attachment was correct, despite the latter's prior notice and rectification.[72]
Records also show Asuncion admonishing respondent for not requiring an approved "MRF" for certain manpower requests, writing:
And, what is the remark, "as we have thought that all of ELR's manpower requirements are urgent" for? All manpower requirements are deemed
important and urgent. But there should always be an approved MRF. It has to start with you.[73] (Italics in the original)
Asuncion's prior e-mail, however, clearly indicated that HR need not wait for an MRF for critical positions:
Treat like RSS. There should be qualified applicants available all year round. We should not wait for an MRF since it is a critical position.[74]
Furthermore, when respondent made a recommendation of penalties which did not sit well with Asuncion, the latter sent her the following email:
Please. Are you not from HR? What would be the basis for the reprimand? Is it reasonable to reprimand the employee for failing the exams? What
did the employee violate?
I hope I have triggered something in your thought process. Please review your recommendation again.[75]
Notably, the penalty of reprimand was itself suggested by a VP of Diwa.[76]
Even when respondent has shown initiative at work, Asuncion could not contain her sarcasm, stating in her e-mail: "Initiative is good. But it seems
not worth highlighting." When respondent correctly pointed out an error in the payroll adjustment, Asuncion retorted: "Yup. You are right. Finally, you
are able to contribute."[77]
Petitioners' efforts to discredit respondent are at once apparent in the foregoing e-mails. They are made even more evident by petitioners' selective
reference to the e-mail correspondence between Asuncion and respondent. The above-cited circumstances clearly depict an atmosphere of "open
disdain and hostility"[78] towards respondent, which is further established by the Affidavit[79] of respondent's co-employee, Lusterio, who corroborated
respondent's assertion that the management made work difficult and unbearable for her.
Lusterio's Affidavit
Lusterio, who cited three specific instances of mistreatment, prefaced her Affidavit[80] by stating that there were other instances when Asuncion
berated respondent in front of her or others; that she knew how difficult it was for respondent to bear everything that Asuncion was doing to her; and
that Asuncion had been "cruel" to them.
Lusterio described an incident where Asuncion accused respondent of engaging the services of an online job posting site (Jobstreet) without her
knowledge. At the meeting where Asuncion made the accusation in Lusterio's presence, respondent tried to explain to Asuncion that she approved
the engagement, but Asuncion refused to listen and interrupted respondent's every sentence, telling respondent that she was a liar. Lusterio attested
that Asuncion had, in fact, given her approval and even revised Diwa's posting format and approved the positions to be posted.[81]
At another time, said Lusterio, Asuncion accused her and respondent of giving Diwa's password to Jobstreet to an outsider. Asuncion also faulted
respondent for posting a vacancy for a Magazine Editor and for publishing the wrong job requirements on the site. Lusterio and respondent denied
disclosing the password to an outsider. Respondent also explained to Asuncion that she had e-mailed her approval of the posting, but Asuncion
retorted: "wala kang pinadadala sa akin! And don't tell me that you don't know what's going on to [sic] your department! You always twist the story!"
Respondent tried to explain herself once more but Asuncion interrupted her and instructed Lusterio to submit incident reports regarding the
password and the job posting. Lusterio conferred with Jobstreet on the password and in her incident report explained that anyone could have seen
the online posting as Jobstreet's website was open to the public. Lusterio also reported that she had, in fact, seen Asuncion's e-mail approving said
posting.[82]
The third incident Lusterio described took place in the company's get-together party. Respondent was tasked to give away the raffle prizes but the
singing contest had taken a long time to finish. Respondent told Lusterio that she would just go to the comfort room to urinate. Respondent had been
gone for about six minutes when the singing contest ended and the host called on her to do the raffle. When respondent returned, Asuncion was
already announcing the winners of the raffle. When the raffle was over, Asuncion approached respondent asking why she was nowhere to be found.
Respondent apologized and told Asuncion that she had gone to the comfort room, but the latter berated respondent in front of Lusterio and other
employees, telling her "next time pigilan mo pag punta mo sa CR."[83]
Petitioners argue that Lusterio was not credible because she supposedly had an axe to grind against Asuncion. The Court does not agree.
Lusterio had been forthright in stating in her Affidavit that she resigned from Diwa because of Asuncion whom she described as a "liar," a "back-
passer" and "cruel." Her statements, however, cannot be discredited simply for this reason. The Court notes that Lusterio's Affidavit was based on
her own knowledge of the incidents she described, having personally witnessed them. Asuncion, in her own Affidavits, did not deny that Lusterio was
privy to these incidents or that she was present during the meetings alluded to. Furthermore, the Court notes that Lusterio's statements, which were
made under oath, were replete with consistent and positive details which were not substantially refuted by Asuncion.
As regards the engagement of Jobstreet, Asuncion, in her October 20, 2004 Affidavit,[84] claimed that she was merely clarifying some details with
respondent in her e-mail, but she never particularly denied that her meeting with respondent and Lusterio took place or that she behaved towards
respondent in the manner described by Lusterio.
Anent the password and online posting issues, Asuncion did not deny that she accused respondent and Lusterio of improperly disclosing their
Jobstreet password to an outsider. While Asuncion denied berating respondent, claiming she merely told her and Lusterio that they could all just
move on and learn from their mistake, the Court notes that Lusterio had particularly mentioned receiving Asuncion's instruction to submit separate
explanations or incident reports on the password and posting issues – a claim Asuncion never specifically denied. Requiring such incident reports
seems antithetical to the idea of simply moving on.
Asuncion averred that she did not shout at or berate respondent during the get-together party and that she used a requesting tone when she told
respondent: "Kung pwede next time pigilan mo muna ang paninigarilyo mo at least while the awarding is going on." According to her, respondent
was nowhere to be found every time she would look for her, and other employees informed her that respondent was smoking by the comfort room
(CR). She claimed that she must have spoken at the top of her voice considering that the music was being loudly played at the time. The Court
notes, however, that even as Asuncion claimed that "other employees told [her] that [respondent] was near the CR puffing a cigarette," petitioners
submitted no corroborating statement from any of them.
"In constructive dismissal cases, the employer is, concededly, charged with the burden of proving that its conduct and actions were for valid and
legitimate grounds."[85] "[Petitioners] must not rely on the weakness of [respondent's] evidence but must stand on the merits of [their] own defense."[86]
Absent convincing evidence showing any cogent reason why Lusterio should falsely testify, her testimony may be accorded full faith and credit.
Besides, in judging the legality of an employee's dismissal, proof beyond reasonable doubt is not required. Neither is preponderance of evidence
expected. It is sufficient that the finding of illegal dismissal is established by substantial evidence which is such relevant evidence as a reasonable
mind might accept as adequate to support a conclusion.[87]
The talk about separation
Petitioners averred that in a conversation with respondent, Asuncion acknowledged that the company was no longer happy with respondent and
suggested parting ways.[88] By respondent's account, however, the conversation dealt with not just an option to leave but "management's decision of
[her] separation from the company."[89] In either case, petitioners evidently preferred that respondent no longer worked for Diwa. Whether or not there
was in fact an offer of separation pay which respondent refused, it is clear that respondent had then chosen to stay. These circumstances, when
viewed alongside petitioners' open disdain and hostility towards respondent, confirm that petitioners had been impelled by a desire to ease her out of
employment.
Dulig's work at Diwa's HR
The Court also notes respondent's claim that when assigned to Diwa's HR, Dulig was performing functions that properly belonged to her as HR
Manager, including representing HR in company meetings and handling the separation of Diwa employees.[90] Petitioners deny this, saying that even
the HR staff could attest that Dulig was not discharging respondent's duties.[91] Curiously, however, not one testimony from such employees has
been produced by petitioners. Not even a statement from Dulig herself was presented to directly refute respondent's claim. The absence of such
corroborating statements despite the facility with which they could have been obtained, as well as petitioners' professed dissatisfaction with
respondent, and the fact that Dulig assumed the position of HR Manager shortly after respondent left[92] serve to lend credence to respondent's
assertion that petitioners placed Dulig in Diwa's HR Department to carry out functions pertaining to her position.
Respondent's demotion
Respondent was excluded from important HR decisions which she was expected not only to be privy to, but also to have a say in, by virtue of her
position in the company.
Records show that petitioners made the decision to terminate the services of two (2) employees, Sheila Montemayor and Elline Pereys, without
respondent's knowledge or participation.[93] The Court cannot sustain petitioners' claim that respondent's act of signing the Notice of Termination and
her execution of affidavits for submission in the labor case, subsequently filed by said employees, constitute proof that she was given "substantial
participation" and was aware of the facts and issues surrounding the termination.[94] Said actions were undertaken after the management already
reached its decision to terminate.
The signing or issuance of the Notice of Termination was thus a ministerial function that simply conveyed said decision; it does not establish that
respondent took part in the deliberation. In the same vein, respondent's execution of the affidavits does not by itself prove that she had been part of
the decision-making process. In fact, petitioners have not pointed to any statement therein indicating that respondent had been involved or consulted
pre-termination. For all petitioners' assertions that respondent knew of the facts and issues surrounding the termination, they never categorically
declared that she was included in the deliberation. Besides, mere knowledge of such facts and issues does not equate to involvement in the decision
as it could have been derived from records or secondhand information.
When Diwa subsequently considered and decided to terminate the services of two (2) more employees, respondent was once again excluded. This
is clear from the following e-mail correspondence[95] between Asuncion and respondent.
Respondent wrote:
Re: Termination of:
Serrano, Jacqueline- November 17, 2003 (Probi)
Nicolas, Nicole- November 01, 2003 (Probi)
Both employees were terminated.
Jacqueline approached me this morning and asked if HR was aware of her termination and its procedures. Since I really have no idea and such was
not discussed with me, I simply answered "no" and advised her to talk to HVS, her supervisor, instead, FYI.[96] (Emphasis ours)
To this e-mail, Asuncion replied:
I am aware of it Grace and so is EAC. It seems that Meng preferred to just discuss it with the 2 of us.
So technically, someone in HR is aware of it. Not you, personally. You may want to check with Cholet the copies of the termination letter Meng gave
her for filing in the 201.[97] (Emphasis ours)
Respondent e-mailed back to say:
It is not really a surprise, Miss. It's just an FYI anyway.[98] (Emphasis ours)
to which Asuncion's responded:
You just need to be careful about the statement that you issue.
Based on your email, her question was, "Is HR aware of it?" and that you said no.
Maybe it would have been better if you answered that you are not aware of it personally. And that you will check if I or any other employee in HR is
aware of it. Or, simply say that you will look into it because you do not have personal knowledge of it.
Just a suggestion.[99] (Emphasis ours)
Respondent has likewise submitted evidence in the form of e-mails from Asuncion showing that although her job designation remained the same,
she was relegated to performing mundane or clerical tasks such as preparing drafts of termination notices based on a standard format and ensuring
that the last pay of employees was released and that termination notices were received by the Department of Labor and Employment.[100] As this
Court previously held:
There is constructive dismissal when an employee's functions, which were originally supervisory in nature, were reduced; and such reduction is not
grounded on valid grounds such as genuine business necessity.[101]
The reduction in respondent's duties and responsibilities as HR Manager amounted to a demotion that was tantamount to constructive dismissal.[102]
The laptop-shoving incident
Respondent averred that Asuncion shoved her laptop to her when she leaned to have a better view of the screen. Petitioners denied this, explaining
that Asuncion merely turned the laptop "fronting" respondent. Petitioners' explanation, however, is unsupported by any testimony or evidence.
Asuncion notably executed no less than two affidavits[103] but neither contained petitioners' version of the incident. In the calibration of evidence,
petitioners' bare denial cannot outweigh respondent's sworn account. Respondent also filed her case for constructive dismissal the day after the
incident took place, which further persuades this Court to believe that it was of such gravity as respondent described it to be.
The above-cited circumstances indubitably present a hostile and unbearable working environment that reasonably compelled respondent to leave
her employment. Respondent, therefore, was constructively dismissed.
Granting, as petitioners claimed, that respondent's performance had been deficient or unsatisfactory, the management's actuations cannot be
excused. As this Court previously held, no employee should be subjected to constant harassment and ridicule on the basis of management
prerogative or even for poor performance at work.[104]
The CA's award of full backwages and separation pay is sustained. Under Article 279[105] of the Labor Code, an employee who is unjustly dismissed
from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and
to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual
reinstatement. Furthermore, inasmuch as reinstatement is no longer feasible given the strained relations between petitioners and respondent, the
award of separation pay equivalent to one (1) month's salary for every year of service was just and reasonable as an alternative to reinstatement. As
this Court previously held:
[O]ver and again, this Court has recognized that strained relations between the employer and employee is an exception to the rule requiring actual
reinstatement for illegally dismissed employees for the practical reason that the already existing antagonism will only fester and deteriorate, and will
only worsen with possible adverse effects on the parties if we shall compel reinstatement; thus, the use of a viable substitute that protects the
interests of both parties while ensuring that the law is respected.[106]
Both the separation pay and backwages shall be computed up to the finality of the decision as it is at that point that the employment relationship is
effectively ended.[107]
Respondent's backwages shall be paid with interest at twelve percent (12%) per annum from June 23, 2004 to June 30, 2013 and at six percent
(6%) per annum from July 1, 2013 until their full satisfaction.[108] Her separation pay, in lieu of reinstatement, shall earn interest at six percent
(6%) per annum from the finality of this Decision until full payment.[109]
Backwages are aimed to replenish the income that was lost by reason of the unlawful dismissal.[110] Together with the remedy of reinstatement, they
make the dismissed employee whole who can then look forward to continued employment, thereby giving meaning and substance to the
constitutional right of labor to security of tenure.[111] For this reason, the Court cannot sustain petitioners' argument that the award of backwages must
be reduced owing to the period spent in reconstituting the CA's records of the case. In Reyes v. NLRC, et al.,[112] the Court held:
One of the natural consequences of a finding that an employee has been illegally dismissed is the payment of backwages corresponding to the
period from his dismissal up to actual reinstatement. The statutory intent of this matter is clearly discernible. The payment of backwages allows the
employee to recover from the employer that which he has lost by way of wages as a result of his dismissal. Logically, it must be computed from the
date of petitioners illegal dismissal up to the time of actual reinstatement. There can be no gap or interruption, lest we defeat the very reason of the
law in granting the same. x x x.[113] (Citation omitted and emphasis ours)
Having caused the unlawful dismissal, petitioners must assume the consequences of the application of the law and jurisprudence, no matter how
unfavorable to them. The following pronouncement in C.I.C.M. Mission Seminaries (Maryhurst, Maryheights, Maryshore and Maryhill) School of
Theology, Inc. v. Perez,[114] thus, finds relevance:
The petitioners, nonetheless, claim that it was not their fault why the amounts due ballooned to the present level. They are mistaken. Suffice it to
state that had they not illegally dismissed respondent, they will not be where they are today. They took the risk and must suffer the consequences.[115]
WHEREFORE, the petition is DENIED. The Decision dated July 2, 2012 and the Resolution dated September 20, 2012 of the Court of Appeals in
CA-G.R. SP No. 99055 are hereby AFFIRMED with MODIFICATION, in that respondent Mary Grace U. De Leon's full backwages shall be paid with
interest at twelve percent (12%) per annum from June 23, 2004 to June 30, 2013 and at six percent (6%) per annum from July 1, 2013 until their full
satisfaction, and her separation pay, in lieu of reinstatement, shall earn interest at six percent (6%) per annum from the finality of this Decision until
full payment.
SO ORDERED.

[ G.R. No. 206529, April 23, 2018 ]

RENANTE B. REMOTICADO, PETITIONER, VS. TYPICAL CONSTRUCTION TRADING CORP. AND ROMMEL M. ALIGNAY, RESPONDENTS.

DECISION

LEONEN, J.:

There can be no case for illegal termination of employment when there was no termination by the employer. While, in illegal termination cases, the
burden is upon the employer to show just cause for termination of employment, such a burden arises only if the complaining employee has shown,
by substantial evidence, the fact of termination by the employer.

This resolves a Petition for Review on Certiorari[1] under Rule 45 of the 1997 Rules of Civil Procedure praying that the assailed November 29, 2012
Decision[2] and March 26, 2013 Resolution[3] of the Court of Appeals in CA G.R. SP No. 124993 be reversed and set aside.

The assailed Court of Appeals November 29, 2012 Decision found no grave abuse of discretion on the part of National Labor Relations Commission
in rendering its January 11, 2012 Decision,[4] which affirmed Labor Arbiter Renell Joseph R. Dela Cruz's (Labor Arbiter Dela Cruz) October 11, 2011
Decision.[5] Labor Arbiter Del a Cruz's Decision dismissed petitioner Renante B. Remoticado's (Remoticado) Complaint for illegal dismissal after a
finding that he voluntarily resigned. The assailed Court of Appeals March 26, 2013 Resolution denied his Motion for Reconsideration.

Remoticado's services were engaged by Typical Construction Trading Corporation (Typical Construction) as a helper/laborer in its construction
projects, the most recent being identified as the Jedic Project at First Industrial Park in Batangas.[6]

In separate sworn statements, Pedro Nielo (Nielo), Typical Construction's Field Human Resources Officer, and two (2) of Remoticado's co-workers,
Salmero Pedros and Jovito Credo,[7] recalled that on December 6, 2010, Remoticado was absent without an official leave. He remained absent until
December 20, 2010 when, upon showing up, he informed Nielo that he was resigning. Prodded by Nielo for his reason, Remoticado noted that they
were "personal reasons considering that he got sick."[8] Nielo advised Remoticado to return the following day as he still had to report Remoticado's
resignation to Typical Construction's main office, and as his final pay had yet to be computed.[9]

Remoticado returned the following day and was handed P5,082.53 as his final pay. He protested, saying that he was entitled to "separation pay
computed at two (2) months for his services for two (2) years."[10] In response, Nielo explained that Remoticado could not be entitled to separation
pay considering that he voluntarily resigned. Nielo added that if Remoticado was not satisfied with P5,082.53, he was free to continue working for
Typical Construction. However, Remoticado was resolute and proceeded to sign and affix his thumb marks on a Kasulatan ng Pagbawi ng
Karapatan at Kawalan ng Paghahabol, a waiver and quitclaim.[11]

On January 10, 2011,[12] Remoticado filed a Complaint for illegal dismissal against Typical Construction and its owner and operator, Rommel M.
Alignay (Alignay).[13] He claimed that on December 23, 2010, he was told to stop reporting for work due to a "debt at the canteen"[14] and thereafter
was prevented from entering Typical Construction's premises.[15]

In a Decision[16] dated October 11, 2011, Labor Arbiter Dela Cruz dismissed Remoticado's Complaint for lack of merit. He explained that
Remoticado's employment could not have been illegally terminated as he voluntarily resigned.[17]

In its January 11, 2012 Decision,[18] the National Labor Relations Commission denied Remoticado's appeal.

In its assailed November 29, 2012 Decision,[19] the Court of Appeals found no grave abuse of discretion on the part of the National Labor Relations
Commission. In its assailed March 26, 2013 Resolution,[20] the Court of Appeals denied Remoticado's Motion for Reconsideration.

Undeterred by the consistent rulings of the Court of Appeals, the National Labor Relations Commission, and Labor Arbiter Dela Cruz, Remoticado
filed the present Petition.[21]

For resolution is the issue of whether petitioner Renante B. Remoticado voluntarily resigned or his employment was illegally terminated in the
manner, on the date, and for the reason he averred in his complaint.

The Petition lacks merit.

I

Determining which between two (2) alternative versions of events actually transpired and ascertaining the specifics of how, when, and why one of
them occurred involve factual issues resting on the evidence presented by the parties.

It is basic that factual issues are improper in Rule 45 petitions. Under Rule 45 of the 1997 Rules of Civil Procedure,[22] only questions of law may be
raised in a petition for review on certiorari. The rule, however, admits of exceptions. In Pascual v. Burgos:[23]
The Rules of Court require that only questions of law should be raised in petitions tiled under Rule 45. This court is not a trier of facts. It will not
entertain questions of fact as the factual findings of the appellate courts are "final, binding[,] or conclusive on the parties and upon this [c]ourt" when
supported by substantial evidence. Factual findings of the appellate courts will not be reviewed nor disturbed on appeal to this court.

However, these rules do admit exceptions. Over time, the exceptions to these rules have expanded. At present, there are 10 recognized exceptions
that were first listed in Medina v. Mayor Asistio, Jr.:
(1) When the conclusion is a finding grounded entirely on speculation, surmises or conjectures; (2) When the inference made is manifestly mistaken,
absurd or impossible; (3) Where there is a grave abuse of discretion; (4) When the judgment is based on a misapprehension of facts; (5) When the
findings of fact are conflicting; (6) When the Court of Appeals, in making its findings, went beyond the issues of the case and the same is contrary to
the admissions of both appellant and appellee; (7) The findings of the Court of Appeals are contrary to those of the trial court; (8) When the findings
of fact are conclusions without citation of specific evidence on which they are based; (9) When the facts set forth in the petition as well as in the
petitioner's main and reply briefs are not disputed by the respondents; and (10) The finding of fact of the Court of Appeals is premised on the
supposed absence of evidence and is contradicted by the evidence on record.
These exceptions similarly apply in petitions for review filed before this court involving civil, labor, tax, or criminal cases.[24] (Citations omitted)
No exception avails in this case.

Quite glaring is the sheer consistency of the factual findings of the Court of Appeals, the National Labor Relations Commission, and Labor Arbiter
Dela Cruz.

Not only are these findings uniform, but they are also sustained by evidence. The Court of Appeals correctly ruled that there is no showing of grave
abuse of discretion on the part of the National Labor Relations Commission.
II

It is petitioner's claim that the Court of Appeals, the National Labor Relations Commission, and Labor Arbiter Dela Cruz are all in error for failing to
see that Typical Construction failed to discharge its supposed burden of proving the validity of his dismissal. He asserts that such failure
leaves no other conclusion than that his employment was illegally terminated.[25]

It is petitioner who is in error.

It is true that in illegal termination cases, the burden is upon the employer to prove that termination of employment was for a just cause. Logic
dictates, however, that the complaining employee must first establish by substantial evidence the fact of termination by the employer.[26] If there
is no proof of termination by the employer, there is no point in even considering the cause for it. There can be no illegal termination when there
was no termination:
Before the employer must bear the burden of proving that the dismissal was legal, the employee must first establish by substantial evidence the fact
of his dismissal from service. If there is no dismissal, then there can be no question as to the legality or illegality thereof.[27]
Petitioner here insists on his version of events, that is, that on December 23, 2010, he was told to stop reporting for work on account of his supposed
indebtedness at the canteen. This bare insistence, however, is all that petitioner has. He failed to present convincing evidence. Even his basic
narrative is bereft of supporting details that could be taken as badges of veracity. As the Court of Appeals underscored, "[P]etitioner only made a
general statement that he was illegally dismissed . . . He did not state how he was terminated [or] mentioned who prevented him from reporting for
work."[28]
III

In contrast with petitioner's bare allegation are undisputed facts and pieces of evidence adduced by respondents, which cast serious doubt on the
veracity of petitioner's recollection of events.
It is not disputed that the establishment identified as Bax Canteen, to which petitioner owed P2,115.00, is not owned by, or otherwise connected with
any of the respondents, or with any of Typical Construction's owners, directors, or officers. There was also no showing that any of the two (2)
respondents, or anyone connected with Typical Construction, was prejudiced or even just inconvenienced by petitioner's indebtedness. It appears
that Bax Canteen was merely in the proximity of the site of Typical Construction's Jedic Project. Petitioner failed to show why Typical Construction
would go out of its way to concern itself with the affairs of another company. What stands, therefore, is the sheer improbability that Typical
Construction would take petitioner's indebtedness as an infraction, let alone as a ground for terminating his employment.[29]

The waiver and quitclaim bearing petitioner's signature and thumbmarks was d9Jed December 21, 2010,[30] predating petitioner's alleged illegal
termination by two (2) days. If indeed petitioner was told to stop reporting for work on December 23, 2010, it does not make sense for Typical
Construction to have petitioner execute a waiver and quitclaim two (2) full days ahead of the termination of his employment. It would have been a
ludicrous move for an employer that is purportedly out to outwit someone into unemployment.

The waiver and quitclaim could very well have been antedated. But it is not for this Court to sustain a mere conjecture. It was for petitioner to allege
and prove any possibility of antedating. He did not do so. In any case, even if this Court were to indulge a speculation, there does not appear to be
any cogent reason for antedating. To the contrary, antedating the waiver and quitclaim was an unnecessary complication considering that any
simulation of resignation would have already been served by petitioner's mere affixing of his signature. Antedating would just have been an
inexplicably asinine move on the part of respondents.

What is most crucial is that petitioner has never disavowed the waiver and quitclaim.[31] It does not appear also that petitioner has accounted for why
this document exists, such as by alleging that he was coerced into executing it.

Jurisprudence frowns upon waivers and quitclaims forced upon employees. Waivers and quitclaims are, however, not invalid in themselves. When
shown to be freely executed, they validly discharge an employer from liability to an employee. "[A] legitimate waiver representing a voluntary
settlement of a laborer's claims should be respected by the courts as the law between the parties."[32] In Goodrich Manufacturing Corporation v. Ativo:
[33]

It is true that the law looks with disfavor on quitclaims and releases by employees who have been inveigled or pressured into signing them by
unscrupulous employers seeking to evade their legal responsibilities and frustrate just claims of employees. In certain cases, however, the Court has
given effect to quitclaims executed by employees if the employer is able to prove the following requisites, to wit: (1) the employee executes a deed of
quitclaim voluntarily; (2) there is no fraud or deceit on the part of any of the parties; (3) the consideration of the quitclaim is credible and reasonable;
and (4) the contract is not contrary to law, public order, public policy, morals or good customs, or prejudicial to a third person with a right recognized
by law.

Our pronouncement in Periquet v. National Labor Relations Commission on this matter cannot be more explicit:
Not all waivers and quitclaims are invalid as against public policy. If the agreement was voluntarily entered into and represents a reasonable
settlement, it is binding on the parties and may not later be disowned simply because of a change of mind. It is only where there is clear proof that
the waiver was wangled from an unsuspecting or gullible person, or the terms of settlement are unconscionable on its face, that the law will step in to
annul the questionable transaction. But where it is shown that the person making the waiver did so voluntarily, with full understanding of what he was
doing, and the consideration for the quitclaim is credible and reasonable, the transaction must be recognized as a valid and binding undertaking.
[34]
 (Citations omitted)
Petitioner's barren tale of his employer's order for him to stop reporting for work is hardly the requisite "clear proof that the waiver was wangled from
an unsuspecting or gullible person."[35] Indeed, courts and tribunals should not be so gullible as to lend validity to every waiver and quitclaim
confronting them. However, neither should they be so foolhardy as to believe a complaining employee's narrative at the mere sight or mention of a
waiver or quitclaim.
IV

Petitioner here would have this Court rule in his favor when he does absolutely nothing more than entreat the doctrine on an employer's burden to
prove just cases for terminating employment. It is as though this invocation was a magic spell that would win the day for him regardless of whether or
not he is able to discharge his primordial burden of proving the occurrence of termination. This Court cannot fall for this. The task of adjudication
demands more than convenient conclusions obtained through handy invocations. Rather, it requires a meticulous appraisal of evidence and legal
bases.

Petitioner is utterly wanting, both in evidence and legal bases. This Court cannot be so witless as to rule in his favor. With an utter dearth of proof in
petitioner's favor, the consistent findings of the Court of Appeals, the National Labor Relations Commission, and the Labor Arbiter must be
sustained.

WHEREFORE, the Petition for Review on Certiorari is DENIED. The assailed November 29, 2012 Decision and March 26, 2013 Resolution of the
Court of Appeals in CA-G.R. SP No. 124993 are AFFIRMED.

SO ORDERED.

[ G.R. No. 214940, June 06, 2018 ]

MARIA DE LEON TRANSPORTATION, INC., REPRESENTED BY MA. VICTORIA D. RONQUILLO, PETITIONER, VS. DANIEL M. MACURAY,
RESPONDENT.

DECISION

DEL CASTILLO, J.:

This Petition for Review on Certiorari[1] seeks to set aside the March 17, 2014 Decision[2] and September 17, 2014 Resolution[3] of the Court of
Appeals (CA) granting the Petition for Certiorar[4] in CA-G.R. SP No. 130387 and denying herein petitioner's Motion for Reconsideration,
[5]
 respectively.

Factual Antecedent
On November 21, 2011, respondent Daniel M. Macuray filed a Complaint[6] for illegal dismissal against petitioner Maria De Leon Transportation, Inc.
before the Regional Arbitration Branch No. 1 of San Fernando City, La Union, docketed as NLRC Case No. RAB-I-11-1119-11 (LC).

In his Position Paper,[7] respondent claimed that, in April, 1991, he was employed as a bus driver of petitioner, a company engaged in paid public
transportation; that he plied the Laoag-Manila-Laoag route; that he received a monthly pay/commission of P20,000.00; that, in November 2009,
petitioner's dispatcher did not assign a bus to him, for no apparent reason; that for a period of one month, he continually returned to follow up if a bus
had already been assigned to him; that finally, when he returned to the company premises, the bus dispatcher informed him that he was already
considered AWOL (absent without leave), without giving any reason therefor; that he went back to follow up his status tor about six months in 2010,
but nobody attended to him; that he was not given any notice or explanation regarding his employment status; that he felt betrayed by the petitioner,
after having served the latter for 18 years; that he considered himself illegally dismissed; that during this time, he was already 62 years old, but he
received no benefits for his service; that he was being charged for the cost of gasoline for the bus he would drive; and that petitioner owed him three
months' salary for the year 2009. Thus, he prayed that he be awarded backwages, separation pay, retirement pay, 13th month pay, damages,
attorney's fees, and costs of suit.

In its Position Paper and other pleadings,[8] petitioner claimed that respondent was hired on commission basis, on a "no work, no pay" and "per
travel, per trip" basis; that respondent was paid an average of P10,000.00 commission per month without salary; that, contrary to his claim of illegal
dismissal, respondent permanently abandoned his employment effective March 31, 2009, after he failed to report for work; that it received
information later on that respondent was already engaged in driving his family truck and was seen doing so at public roads and highways; that
respondent's claim of illegal dismissal was not true, as there was no dismissal or termination of his services, and no instructions to do so were given;
that the bus dispatcher from whom respondent inquired about his status had no power to terminate or declare him AWOL; that respondent had not
actually approached management to inquire about his employment status, even though he and all the other employees knew that the Assistant
Manager, Corporate Secretary, and Director of the bus company, Elias Dimaya, resided with his family within the bus company's station and
compound in San Nicolas, Ilocos Norte; that respondent's witnesses had an axe to grind against petitioner, which accounts for their false
testimonies; that based on respondent's Complaint, he claimed to have been illegally dismissed in January, 2009, which was contrary to the
documentary evidence which showed that he continued to work until March, 2009, after which he completely abandoned his employment; that per
Joint Affidavit[9] of petitioner's bus dispatchers, it is not true that respondent ever made inquiries and follow-ups about his employment until mid-2010;
that there was no illegal dismissal, and thus respondent was not entitled to his monetary claims; that respondent never refuted the claim that he
abandoned his employment with petitioner because he took on a new job as driver for his family's trucking business and was seen doing so in public
roads and highways; that it was common practice for bus drivers of the petitioner to simply stop reporting for work for short periods of time, or even
years, after which they would return and ask to be allowed to drive petitioner's buses once more, which management allowed after the absentee
drivers gave satisfactory and reasonable explanations for their absences; that this practice was impliedly sanctioned in order to give the drivers the
opportunity to take time off from the stress and boredom of driving on long trips; that respondent's allegations were not true, particularly his claim that
he was told by a bus dispatcher that he was considered AWOL, since he refused to divulge the identity of the bus dispatcher who gave such
information to him; and that there was no truth to respondent's allegations that the cost of gasoline for every bus trip was charged to him, as it was
shouldered by the petitioner. Petitioner prayed for the dismissal of the case.

Ruling of the Labor Arbiter

On August 24, 2012, Labor Arbiter Irenarco R. Rimando rendered a Decision[10] dismissing the case for lack of merit, declaring that —
x x x [Complainant] cannot state with certainty the date and time of his dismissal if it was January 2009, middle of 2009 or November 2009 x x x.

[I]n his pro forma complaint sheet, he mentioned that he was already 61 at the time that he filed his complaint on 23 November 2011. Yet in his
position paper he mentioned that he was already 62 years old after he rendered service for 18 years x x x.

On the issue of constructive dismissal, seemingly Rudy Compañero and Loreto Casil presented a story that [showed] they were aware that Daniel
Macuray was poorly treated by respondent when he was still employed between  2007 and 2009. But the records [did] not show that the complainant
had shown any sign of whimper or protest. Therefore, x x x the claim is unfounded.

The [alleged] unpaid fuel expenses that were incurred by unidentified drivers for respondent's bus with Body No. 1 [was] not supported by substantial
evidence which a reasonable mind might accept to justify a conclusion. He did not present a single accounting of his purchases for diesel fuel and
how much. The complainant did not even claim that the unpaid gasoline expenses were charged to him.

The complainant failed to present evidence that the treatment he received from respondent was unreasonable or oppressive and unbearable that
would amount to a constructive dismissal x x x.

xxxx

The complainant never returned back to work after 31 March 2009. An informal voluntary termination is recognized under the law as an authorized
ground for dismissal x x x. In such case compliance with the two (2) notice requirement of due process is not necessary. When this happens the
employee is not entitled to separation pay and backwages. The dismissal is not illegal. Hence the claims for separation pay, backwages and
damages are denied.

xxxx

IN VIEW THEREOF, this case is dismissed for lack of merit.

SO ORDERED.[11] (Citations omitted)

Ruling of the National Labor Relations Commission

Respondent filed a Memorandum of Appeal[12] before the National Labor Relations Commission (NLRC). On December 28, 2012, a Resolution[13] was
issued modifying the Labor Arbiter's judgment by awarding in favor of respondent the amount of P50,000.00 as financial assistance. The NLRC held:
x x x A close evaluation of the records however [showed] that complainant-appellant was unsure of the date of his dismissal. In his complaint, he
entered the date January, 2009, in his pleadings the year 2009 and [in] his position paper be stated the month of November, 2009. Moreover, he
failed to identify the dispatcher who did not assign a bus to him. Complainant-appellant therefore failed to establish the fact of his alleged dismissal
with substantial evidence.

On the other hand, respondents-appellees stress that complainant-appellant did not report for work anymore from March 31, 2009 and in support
thereof submitted folders showing the particulars of the trips where complainant-appellant served as assistant driver for the period 3 January to 30
March 2009; that neither did complainant-appellant file any leave of absence. Thus, respondents-appellees concluded that by his failure to report for
work beginning 31 March 2009, complainant-appellant permanently abandoned and severed his employment effective 31 March 2009.

Although absence without valid or justifiable reason is an element of abandonment, settled is the rule, however, that mere absence or failure to
report for work is not tantamount to abandonment of work. x x x

x x x Respondents-appellees' conclusion that complainant-appellant abandoned his work lacks factual basis.

In the consolidated cases of Leonardo vs. NLRC x x x the Supreme Court also ordered the reinstatement sans backwages of the employee x x x
who was declared neither to have abandoned his job nor was he constructively dismissed. As pointed out by the Court, in a case where the
employee's failure to work was occasioned neither by his abandonment nor by a termination, the burden of economic loss is not rightfully shifted to
the employer. Each party must bear his own loss.

In this case, we note that complainant-appellant is already sixty two years old and he may not be apt for the job as bus driver considering the long
hours of travel from Laoag City to Manila. Hence, his reinstatement may no longer be possible. Separation pay however[,] cannot also be awarded to
complainant-appellant because he was not dismissed by respondent appellee. In cases where there was no dismissal at all, separation pay should
not be awarded. x x x

Under this circumstance, financial assistance may be allowed as a measure of social justice and as an equitable concession. x x x

x x x Respondents-appellees are therefore ordered to award financial assistance to complainant appellant in the amount of FIFTY THOUSAND
PESOS (P50,000.00).

WHEREFORE, premises considered, the DECISION dated 24 August 2012 is hereby MODIFIED ordering respondents-appellees to award financial
assistance by (sic) complainant-appellant in the amount of FIFTY THOUSAND (P50,000.00) PESOS.

SO ORDERED.[14] (Citations omitted)

Respondent filed a Motion for Reconsideration,[15] which the NLRC denied in a March 18, 2013 Resolution.[16]

Ruling of the Court of Appeals

Respondent filed a Petition for Certiorari[17] before the CA, questioning the NLRC dispositions and praying for the relief he originally sought in his
labor complaint.

On March 17, 2014, the CA rendered the assailed Decision, decreeing thus:
We find the petition to be meritorious.

xxxx

In an illegal dismissal case, the onus probandi rests on the employer company to prove that its dismissal of an employee was for a valid cause.
There is no such proof of a valid cause in the instant case. On the contrary, the facts bear the marks of constructive dismissal.

xxxx

The Labor Arbiter's findings that there was an informal voluntary termination has no basis. Based on the age of petitioner as appearing in the records
of this case, he was 58 years of age in November of 2009 when he was no longer assigned any bus. Nearing his retirement, it [was] irrational that he
would suddenly opt for an informal voluntary termination. Thus, the NLRC's appreciation of facts is more in keeping with logic as it held that there
was no abandonment. Surely, petitioner kept going back to the respondent company to check whether or not there would already be a bus assigned
to him. There being no bad records or previous transgressions committed by the petitioner against respondent company, or any third party in relation
to his job during his eighteen (18) years of working for respondent company, there was no rhyme nor reason why he would suddenly not be assigned
a bus to drive and no reason why he would suddenly voluntarily stop working while nearing his retirement.

xxxx

Reinstatement of petitioner, however, may not be in the best interest of respondent company and or petitioner himself. As correctly declared by the
NLRC, petitioner is 'already sixty-two years old and he may not be apt for the job as a bus driver considering the long hours of travel from Laoag City
to Manila. Hence, his reinstatement may no longer be possible.'

xxxx

Undoubtedly, herein petitioner Daniel Macuray was performing a job that has an intimate connection to the business of respondent company as he
worked as a driver of respondent Maria de Leon Transportation, a public transportation business company, for eighteen (18) years. As a regular
employee who has been constructively dismissed, petitioner is entitled to separation pay equivalent to one (1) month salary for every year of service.

Under the above-mentioned twin remedies, there is likewise basis for the grant of backwages. x x x. In this case, petitioner was illegally dismissed in
November of 2009 when he was no longer assigned any bus without cause or reason. Thus, his backwages may be computed from November of
2009 until December 28, 2012, when the NLRC held that 'reinstatement may no longer be possible.'
Reinstatement being no longer possible and petitioner being 62 years old, petitioner is entitled to retirement pay, having worked for respondent
company for eighteen (18) years. It is herein noted that the required length of service, to be entitled to retirement pay under the law, is only five (5)
years. The applicable law is Article 287 of the Labor Code, a amended by R.A. No. 7641 x x x:

xxxx

In view thereof, petitioner is entitled to one-half (1/2) of his monthly commission for every year of service. x x x. Thus, for having been illegally
dismissed, petitioner therein was entitled not only to separation pay and full backwages, but additionally, to his retirement benefits pursuant to any
collective bargaining agreement in the workplace or, in the absence thereof, as provided in Section 14, Book VI 8 of the Implementing Rules of the
Labor Code.

xxxx

As interpreted by the Supreme Court in Auto Bus Transport Systems vs. Bautista, 'employees engaged on task or contract basis or paid on purely
commission basis are not automatically exempted from the grant of service incentive leave, unless, they fall under the classification of field
personnel.' Herein petitioner does not fall under the classification of field personnel. If required to be at specific places at specific times, employees
including drivers cannot be said to be field personnel despite the fact that they are performing work away from the principal office of the [employer].
In this regard, Section 2, Rule V, Book III of the Implementing Rules and Regulations provides that '[e]very employee who has rendered at least one
year of service shall be entitled to a yearly service incentive leave of five days with pay.' x x x

Petitioner, who is paid on purely commission basis, is however not entitled to a 13th month pay, being among those specifically enumerated by law
as not covered by PD No. 851 (the law requiring employers to pay employees 13th month pay) x x x

xxxx

Prescinding from the foregoing, moral damages, exemplary damages, nominal damages and attorney's fees are due to the petitioner.

x x x Petitioner is thus awarded moral damages in the amount of P100,000.00 and exemplary damages in the amount of P50,000.00

x x x In accordance with existing jurisprudence, petitioner is awarded P30,000.00 in nominal damages.

A grant of attorney's fees in the amount of P20,000.00 is likewise proper. x x x

WHEREFORE, in view of the foregoing premises, the petition is hereby GRANTED. The Resolutions dated December 28, 2012 and March 18, 2013
issued by the National Labor Relations Commission in NLRC LAC No. 10-003028-12 and Decision dated August 24, 2012, rendered by the Regional
Arbitration Branch No. 1 of the Commission in NLRC Case No. RAB-I-11-1119-11 (LC) are REVERSED AND SET ASIDE.

Accordingly, a NEW JUDGMENT is entered finding herein petitioner to have been illegally dismissed by respondent company from employment and
thus is entitled to: 1) separation pay; 2) backwages; 3) retirement pay; 4) service incentive leave; 5) moral damages; 6) exemplary damages; 7)
nominal damages; and 8) attorney's fees.

Let this case be remanded to the NLRC for computation of the exact amounts due to the petitioner consistent with the findings made in this Decision.

SO ORDERED.[18] (Citations omitted)

Petitioner filed a motion for reconsideration, but the CA denied the same through its September 17, 2014 Resolution. Hence, the instant Petition.

In an April 18, 2016 Resolution,[19] the Court resolved to give due course to the Petition.
Issue

Petitioner argues in this Petition that —

1. THE COURT OF APPEALS ERRED AND GRAVELY ABUSED ITS DISCRETION IN NOT DISMISSING OUTRIGHT THE PETITION
FOR CERTIORARI  FOR HAVING BEEN FILED X X X BEYOND THE 60-DAY REGLEMENTARY PERIOD. X X X

XXXX

3. THE COURT OF APPEALS ERRED AND GRAVELY ABUSED ITS DISCRETION IN NOT DISMISSING OUTRIGHT THE PETITION
FOR CERTIORARI  ON THE GROUND THAT THE DOCKET FEES WERE NOT PAID BY PRIVATE RESPONDENT AT THE TIME HE FILED THE
PETITION OR WITHIN HIS REQUESTED PERIOD OF EXTENSION X X X

4. THE COURT OF APPEALS ERRED AND GRAVELY ABUSED ITS DISCRETION IN NOT DISMISSING OUTRIGHT THE PETITION
FOR CERTIORARI OF THE PRIVATE RESPONDENT ON THE GROUND THAT HE FAILED TO INDICATE THEREIN THE OTHER TWO (2)
MATERIAL DATES, NAMELY: THE DATE OF HIS RECEIPT OF THE RESOLUTION DATED 28 DECEMBER 2012 OF RESPONDENT
COMMISSION MODIFYING THE DECISION DATED 24 AUGUST 2012 OF EXECUTIVE LABOR ARBITER, AND THE DATE WHEN HE FILED HIS
MOTION FOR RECONSIDERATION THERETO. X X X

5. THE COURT OF APPEALS ERRED AND GRAVELY ABUSED ITS DISCRETION IN CONCLUDING THAT PRIVATE RESPONDENT WAS
CONSTRUCTIVELY OR ILLEGALLY DISMISSED OR PETITIONER X X X

6. THE COURT OF APPEALS ERRED AND GRAVELY ABUSED ITS DISCRETION IN CONCLUDING THAT PRIVATE RESPONDENT IS
ENTITLED TO SEPARATION PAY, BACKWAGES, RETIREMENT PAY, SERVICE INCENTIVE LEAVE PAY, MORAL DAMAGES, EXEMPLARY
DAMAGES, NOMINAL DAMAGES AND ATTORNEY'S FEES.[20]
Petitioner's Arguments

Petitioner argues that the CA erred in entertaining respondent's Petition for Certiorari  as it was belatedly filed and defective in form; that the CA
erred in failing to appreciate that respondent was not illegally dismissed, but that he voluntarily resigned and abandoned his employment when he
left to work for his family's trucking business; that respondent knowingly timed the filing of the instant labor case in such a way as to recover
retirement and other benefits; and that since there was no illegal dismissal, respondent was thus not entitled to his money claims, including
retirement pay and damages, as there was no bad faith on petitioner's part.

Respondent's Argument

Respondent argues that the Petition should be denied for lack of merit; that the CA's dispositions are correct and must be upheld; that there
were no procedural lapses in the filing of the CA Petition for Certiorari; that petitioner itself was guilty of procedural lapses in the filing of the instant
Petition; that the CA was correct in finding that he was illegally dismissed from employment; and that the CA did not err in awarding his money
claims.
Our Ruling

Respondent claims that he continued to follow up on his employment status for six months. Petitioner counters that he could not have done the
follow ups because members of its top management never met with him; even the bus dispatchers, who were not part of the bus company's
management, denied meeting with respondent; they declared in a joint affidavit submitted to the labor tribunals that respondent never approached
them at any time during the said period that respondent claimed he continued following up on his work status.

Indeed, respondent did not specify to whom his follow-ups were directed; if they were upon management, he would have said so, and the bus
company management would have had no reason to deny this claim. However, the only follow-up he particularly referred to was one directed to a
bus dispatcher, a certain Roger Pasion, who even denied the claim in an affidavit.[21]

For its part, petitioner claims that respondent simply stopped reporting for work; that he left his post as bus driver to work for his family's trucking
business; and that he was seen driving the family truck on public roads and highways. This was not denied by the respondent. Petitioner further
contends that what respondent did was typical of its bus drivers; they simply stop reporting for work for short periods of time, even years, only to re-
appear looking to work for the company once again. Petitioner states that this is allowed in order to give its drivers the needed break from boredom
typically encountered from driving on long trips on familiar, boring routes, a sort of therapy and sabbatical, a time to refresh oneself from monotonous
work that benefits the driver, passengers, and the bus company itself; that this practice also affords its drivers the opportunity to find more lucrative
employment or greener pastures elsewhere without foreclosing the possibility of returning to work for the company in the future.

The Court is inclined to believe petitioner's allegations: respondent left his work as bus driver to work for his family's trucking business. There
is no truth to the allegation that respondent was dismissed, actually or constructively. He claims that the dispatcher informed him that he was AWOL;
however, a mere bus dispatcher does not possess the power to fire him from work – this is a prerogative belonging to management. Respondent did
not show that he met with management to inquire on his status. On the other hand, it appears that the Assistant Manager, Corporate Secretary, and
Director of the bus company, Elias Dimaya, resided with his family within the bus company's station and compound in San Nicolas, Ilocos Norte.
Having worked for the bus company for 18 years, respondent should have known this fact, and he could have visited with Elias Dimaya at anytime, if
his employment was so important that it meant his own survival and that of his family. Apparently, however, it would appear that this was not the
case, for the simple reason that respondent had found employment elsewhere.

Thus, respondent's failure to show that his follow-ups were properly directed at management bolsters petitioner's claim that no follow-ups were made
by him. The logical explanation for this is that he found employment elsewhere and thus opted to stop reporting for work, as was the practice of other
bus drivers working for petitioner.

At any rate, even assuming that respondent was indeed told by respondent's bus dispatcher Roger Pasion that he was AWOL, this was not
tantamount to dismissal, actual or constructive. An ordinary bus dispatcher has no power to dismiss an employee; in a typical bus company, a driver
might even be of more significance than an ordinary dispatcher. Bus drivers are a more valuable resource than a dispatcher; without the former, the
latter is useless. Without a driver, there could be no bus to dispatch or trip to schedule. It cannot therefore be said that an ordinary dispatcher is
superior to a bus driver; at most, they are equal in rank.

The fact that respondent made no sincere effort to meet with the management of the bus company gives credence to petitioner's allegation that he
was never fired from work.

However, it cannot be said that respondent abandoned his employment. Petitioner itself admitted that it sanctioned the practice of allowing its drivers
to take breaks from work in order to afford them the opportunity to recover from the stresses of driving the same long and monotonous bus routes by
accepting jobs elsewhere, as some form of sabbatical or vacation, without losing productivity and in come and to safeguard the interests of the
company and its patrons, as well as to avoid fatal accidents were the drivers to be suffered to work under continuous stressful conditions occasioned
by driving on the same monotonous routes day in and day out.

Simply put, respondent availed of petitioner's company practice and unwritten policy – of allowing its bus drivers to take needed breaks or
sabbaticals to enable them to recover from the monotony of driving the same route for long periods – and obtained work elsewhere. It appears that
what matters to respondent is that when he did this, he was already approaching retirement age – he was 58 years old in April, 2009, when he took a
break from being a bus driver – and when he filed the labor case in November, 2011, he was already 60. He was born May 20, 1951.[22] By that time,
he had served petitioner for 18 years, or from April 1991 up to March 31, 2009. Respondent may have thought that for serving the bus company for a
significant period, he should be rewarded for his loyalty.

Thus, since respondent was not dismissed from work, petitioner may not be held liable for his (respondent's) monetary claims, except those that
were actually owing to him by way of unpaid salary/commission, and retirement benefits, which are due to him for the reason that he reached the
age of retirement while under petitioner's employ. As to unpaid salaries/commissions, it appears from the record that petitioner failed to pay
respondent three months' worth, that is, for the period January to March, 2009 – which, at P10,000.00 per month – amounts to P30,000.00. Indeed,
this could be one of the reasons why respondent stopped reporting after March 31, 2009, as he complained of petitioner's failure to pay his
salaries/commissions for the said period.

As for retirement benefits, respondent is entitled to them considering that he was never dismissed from work, either for cause or by resignation or
abandonment. As far as petitioner is concerned, he merely went on a company-sanctioned sabbatical. It just so happened that during this sabbatical,
he reached the retirement age of 60; by this time, he is already 67 years old. By filing the labor case, he may have pre-empted the payment of his
retirement benefits; but it is a clear demand for retirement benefits nonetheless. Understandably, respondent may have already expected that he
would not be paid retirement benefits since he stopped reporting for work in 2009 when he took his sabbatical; for him, such move might have been
construed as a resignation or abandonment by his employer, the petitioner, and rightly so – for this is precisely petitioner's defense in this case.

Under Article 287 of the Labor Code,

Art. 287. Retirement. - Any employee may be retired upon reaching the retirement age established in the collective bargaining agreement or other
applicable employment contract.

In case of retirement, the employee shall be entitled to receive such retirement benefits as he may have earned under existing laws and any
collective bargaining agreement and other agreements: Provided, however, That an employee's retirement benefits under any collective bargaining
and other agreements shall not be less than those provided herein.

In the absence of a retirement plan or agreement providing for retirement benefits of employees in the establishment, an employee upon reaching
the age of sixty (60) years or more, but not beyond sixty-five (65) years which is hereby declared the compulsory retirement age, who has served at
least five (5) years in the said establishment, may retire and shall be entitled to retirement pay equivalent to at least one-half (1/2) month salary for
every year of service, a fraction of at least six (6) months being considered as one whole year.

Unless the parties provide for broader inclusions, the term one-half (1/2) month salary shall mean fifteen (15) days plus one-twelfth (1/12) of the 13th
month pay and the cash equivalent of not more than five (5) days of service incentive leaves.

Retail, service and agricultural establishments or operations employing not more than (10) employees or workers are exempted from the coverage of
this provision.

Violation of this provision is hereby declared unlawful and subject to the penal provisions provided under Article 288 of this Code.

In the absence of a retirement plan or agreement in Maria De Leon Transportation, Inc., the Court hereby declares that respondent is entitled to one
month's salary for every year of service, that is:
P10,000.00 x 18 years = P180,000.00

Retirement compensation equivalent to one month's salary for every year of service is more equitable and just than the CA's pronouncement of one-
half month's salary per year of service, which the Court finds insufficient. This is considering that petitioner has been paying its drivers commission
equivalent to less than the minimum wage for the latter's work, and in respondent's case, it has delayed payment of the latter's compensation for
three months. On the other hand, petitioner's lax policies regarding the coming and going of its drivers, as well as the fact that respondent's layovers
are considerable – it appears that throughout his employment, respondent spends a good number of days each month not driving for petitioner,
which thus allows him to accept other work outside – makes up for deficiencies in the parties' compensation arrangement.

Petitioner's argument that respondent's CA Petition for Certiorari should have been dismissed outright for being tardy and for being procedurally
defective deserves no consideration. As has been shown above, respondent is entitled to part of his monetary claims; the NLRC judgment failed to
appreciate that respondent remained an employee of petitioner. As against petitioner's claim of procedural infirmities, the Court must uphold and
protect respondent's substantive rights. Procedure cannot prevail over substantive rights in this case.
Indeed, where as here, there is a strong showing that grave miscarriage of justice would result from the strict application of the [r]ules, we will not
hesitate to relax the same in the interest of substantial justice. It bears stressing that the rules of procedure are merely tools designed to facilitate the
attainment of justice. They were conceived and promulgated to effectively aid the court in the dispensation of justice. Courts are not slaves to or
robots of technical rules, shorn of judicial discretion. In rendering justice, courts have always been, as they ought to be, conscientiously guided by
the norm that on the balance, technicalities take a backseat against substantive rights, and not the other way around. Thus, if the application of the
Rules would tend to frustrate rather than promote justice, it is always within our power to suspend the rules, or except a particular case from its
operation.[23]

On the other hand, the CA Decision is unwarranted on account of its declaration that respondent was illegally dismissed from work, which is not the
case. As a result, it awarded other claims that respondent was not entitled to.

As for attorney's fees, the Court finds that respondent is entitled thereto. Under paragraphs 7 and 11, respectively, of Article 2208 of the Civil Code,
attorney's fees and expenses of litigation, other than judicial costs, may be recovered "in actions for the recovery of wages of household helpers,
laborers and skilled workers" and "in any other case where the court deems it just and equitable that attorney's fees and expenses of litigation should
be recovered." The CA award of P20,000.00 is thus reasonable and just under the circumstances.

Having resolved the case in the foregoing manner, the Court finds no need to address the other issues raised by the parties. They have become
unnecessary and superfluous; their resolution contributes nothing to the essence of the Court's disposition.

WHEREFORE, the March 17, 2014 Decision and September 17, 2014 Resolution of the Court of Appeals in CA-G.R. SP No. 130387
are REVERSED and SET ASIDE, and in lieu thereof, judgment is hereby rendered AWARDING respondent Daniel M. Macuray the following
amounts:

1. P30,000.00 as unpaid salaries/commissions for the period January to March, 2009;

2. P180,000.00 as retirement pay;

3. P20,000.00 as and by way of attorney's fees; and

4. Interest of 12% per annum  on the total monetary awards, computed from the filing of the Complaint up to June 30, 2013, and thereafter 6% per
annum from July 1, 2013 until their full satisfaction.

SO ORDERED.

[ G.R. No. 229881, September 05, 2018 ]

JONALD O. TORREDA, PETITIONER, VS. INVESTMENT AND CAPITAL CORPORATION OF THE PHILIPPINES, RESPONDENT.

DECISION

GESMUNDO, J.:

This is an appeal by certiorari  seeking to reverse and set aside the June 13, 2016 Decision[1] and the February 9, 2017 Resolution[2] of the Court of
Appeals (CA)  in CA-G.R. SP No. 133505. TheCA reversed and set aside the June 28, 2013 Decision[3] and the October 31, 2013 Resolution[4] of the
National Labor Relations Commission (NLRC)  in NLRC NCR-01-00610-12. The NLRC affirmed the September 27, 2012 Decision[5]  of the Labor
Arbiter (LA ), a case for constructive dismissal.
The Antecedents

Jonald O. Torreda (petitioner) was hired by Investment and Capital Corporation of the Philippines (respondent) on May 17, 2010 as an IT Senior
Manager and had a monthly salary of P93,200.00. He was tasked to supervise his team in the Information Technology (IT)  Department and manage
the IT-related projects. He reported to William M. Valtos, Jr. (Valtos),  the Officer in-Charge of the IT Department and the Group President of the
Financial Service of respondent.

Petitioner claimed that he instituted reforms in the IT management because the system was outdated and the staff members were unproductive. He
had a falling out with the senior management as the Senior Vice President for the Pueblo De Oro Development Corporation wanted to interfere with
the functions of the IT department. Further, in November 2011, respondent decided to create an IT-SAP project without the approval of petitioner.

On January 5, 2012, petitioner went to the office of Valtos for a closed-door conference meeting supposedly regarding his IT projects. In said
meeting, Valtos discussed another matter with petitioner and told him that if his performance were to be appraised at that time, Valtos would give him
a failing grade because of the negative feedback from the senior management and the IT staff. The performance appraisal of petitioner, however,
was not due until May 2012.

Valtos then gave petitioner a prepared resignation letter and asked him to sign; otherwise, the company would terminate him. The said letter
indicated that the resignation of petitioner would be effective on February 4, 2012. Petitioner refused to sign the resignation letter but Valtos did not
accept his refusal. Thus, Valtos edited the resignation letter. Petitioner thought of leaving the room by making an excuse to go to the restroom, but
Valtos and respondent's legal counsel followed him. Because of Valtos' insistence, petitioner placed his initials in the resignation letter to show that
the letter was not official. Valtos then accompanied petitioner to his room to gather his belongings and escorted him out of the building. Petitioner
was not allowed to report for work anymore and his company e-mail address was deactivated.

Six (6) days after the incident, petitioner filed the instant complaint for illegal dismissal (constructive), moral and exemplary damages and attorney's
fees against respondent before the LA.

For its part, respondent countered that petitioner was not illegally dismissed because he voluntarily resigned. It claimed that petitioner was ineffective
as an IT manager and that his staff complained about his inefficiencies. Respondent asserted that petitioner failed to integrate himself into the
company due to his lack of enthusiasm and cooperation at work, and he did not respond to queries and requests. It even claimed that a female
employee resigned because she felt uncomfortable with petitioner.

Respondent stated that while Valtos admitted that he gave a resignation letter to petitioner on January 5, 2012, petitioner himself edited the letter to
include courteous words and voluntarily signed the same. Valtos also admitted that the performance appraisal of petitioner was not due until May
2012.

The LA Ruling

In its Decision dated September 27, 2012, the LA held that petitioner was constructively dismissed by respondent. It held that Valtos admitted that he
gave a prepared resignation letter. The LA observed that Valtos told petitioner to resign; otherwise, respondent would terminate him. Also, it found
that respondent failed to present substantial evidence that petitioner voluntarily resigned from the company due to the following reasons: petitioner
did not have a prior contemplation of resigning from the company; Valtos gave a performance appraisal even though it was not yet due; the
resignation letter was effective February 4, 2012 but petitioner was barred from the company as early as January 5, 2012; and petitioner immediately
filed the constructive dismissal case after signing the resignation letter. The LA also imposed moral and exemplary damages against respondent to
serve as a deterrent to other employers. The dispositive portion of the LA decision reads:
WHEREFORE, premises considered, judgment is hereby rendered finding the complainant to have been constructively dismissed. Accordingly,
respondent ICCP is hereby directed to REINSTATE complainant to his former or equivalent position without loss of seniority rights and to pay him
backwages which as of the date of the decision already amounts to P766,104.00; and directing respondent ICCP to pay complainant the amount of
P50,000.00 as moral damages; and P50,000.00 as exemplary damages.

All other claims are dismissed.

SO ORDERED.[6]
Aggrieved, respondent appealed to the NLRC.
The NLRC Ruling

In its Decision dated June 28, 2013, the NLRC affirmed the LA ruling. It ruled that the test of constructive dismissal is whether a reasonable person
in the employee's position would have felt compelled to give up his position under the circumstances. The NLRC found that petitioner did not
voluntarily resign from the company; rather, he was constructively dismissed. It reaffirmed that it was Valtos who presented a prepared resignation
letter for petitioner to sign. The NLRC did not give credence to the defense of respondent that petitioner voluntarily resigned solely because he
edited the resignation letter. Further, it observed that respondent could not terminate the employment of petitioner in a despotic manner.

The NLRC likewise affirmed the award of moral and exemplary damages because petitioner suffered from anxiety due to his unlawful termination. It,
however, granted separation pay in lieu of reinstatement because the latter was no longer feasible due to the parties' strained relationship.
The fallo  of the NLRC Decision states:
WHEREFORE, in view of the foregoing, the assailed decision of the Labor Arbiter is AFFIRMED with MODIFICATION, in that, in lieu of
reinstatement Investment and Capital Corp. of the Philippines is ordered to pay complainant-appellee separation pay of one (1) month per year of
service computed from the time of this employment up to the finality of this decision.

SEPARATION PAY
5/27/10 6/28/13 3 yrs.
P93,200.00 x 3 P279,600.00

SO ORDERED.[7]
Respondent filed a motion for reconsideration but it was denied by the NLRC in a Resolution dated October 31, 2013.

Undaunted, respondent filed a petition for certiorari  before the CA.

The CA Ruling

In its Decision dated June 13, 2016, the CA reversed and set aside the NLRC ruling. It ruled that petitioner voluntarily resigned from the company
because he willingly signed the resignation letter. The CA opined that even though Valtos presented a prepared resignation letter, it was petitioner
who edited the same and voluntarily added words of courtesy. It also held that it was improbable for petitioner to be intimidated by Valtos due to his
managerial position and high educational attainment. The CA underscored that petitioner was not an ordinary employee with limited understanding
and he could not be duped or compelled to resign. It further opined that petitioner failed to prove that his consent to the resignation was vitiated,
hence, there was no constructive dismissal. The CA disposed the case in this wise:
WHEREFORE, by reason of the foregoing premises, the Petition is GRANTED. Hence, the Decision dated June 28, 2013 and Resolution dated
October 31, 2013 of the NLRC in NLRC NCR-01-00610-12 are REVERSED and the Complaint of private respondent for illegal dismissal
is DISMISSED for lack of merit.

SO ORDERED.[8]
Petitioner moved for reconsideration but it was denied by the CA in its Resolution dated February 9, 2017.

Hence, this petition anchored on the following arguments:

I

THE COURT OF APPEALS GRAVELY ERRED WHEN IT GRANTED RESPONDENT'S PETITION FOR CERTIORARI AND DENIED
[PETITIONER'S] MOTION FOR RECONSIDERATION WITHOUT ANY CATEGORICAL FINDINGS OF GRAVE ABUSE OF DISCRETION.[9]
II

THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN REVERSING THE FACTUAL FINDINGS OF THE LABOR ARBITER AND THE
NLRC CONSIDERING THAT THEIR DECISIONS AND RESOLUTION ARE SUPPORTED BY CLEAR AND SUBSTANTIAL EVIDENCE.[10]
III

THE COURT OF APPEALS ERRED IN FINDING THAT PETITIONER'S RESIGNATION WAS VOLUNTARY BECAUSE THE [UNDISPUTED]
FACTS AND [CIRCUMSTANCES] OF HIS ALLEGED RESIGNATION CLEARLY SHOWED THAT HE DID NOT [RESIGN] NOR DID HE INTENI>
TO RESIGN FROM HIS JOB.[11]
IV

THE COURT A QUO ERRED IN RULING THAT PETITIONER'S MONEY CLAIMS [HAVE] NO LEGAL FOUNDATION.[12] (italics supplied)
Petitioner insists that he did not voluntarily resign, instead, he was forced to resign from the company; that respondent has no legal or factual basis
to terminate his employment; that Valtos gave him a performance appraisal even though it was not yet due; that Valtos forced him to sign the
resignation letter; that he attempted to escape but he was accompanied to the comfort room by Valtos and respondent's legal counse1; that he
wanted to leave the premises, so he placed his initials on the resignation letter so that Valtos would let him go; that, on the same night of January 5,
2012, he was instructed to get his belongings and was barred from the premises of respondent even though the resignation was effective only on
February 4, 2012; and that he immediately filed the complaint before the LA to show that he did not resign from work.

In its Comment,[13] respondent countered that the issues raised by petitioner are factual in nature, hence, cannot be tackled in a petition for review
on certiorari  under Rule 45 of the Rules of Court; that petitioner voluntarily signed the resignation letter because he substantially edited it and even
placed words of courtesy in favor of respondent; that petitioner's exhaustion when he signed the resignation letter is not tantamount to coercion; and
that petitioner himself admitted that he signed the resignation letter.

In his Reply,[14] petitioner argued that there are exceptional circumstances when the Court may entertain questions of fact, such as when there are
conflicting findings of fact; and that there was no benefit to petitioner to resign from work as he was not even offered separation benefits by
respondent, hence, it is illogical for him to voluntarily sign the resignation letter.
The Court's Ruling
The Court finds the petition meritorious.

Generally, a question of
fact cannot be entertained
by the Court; exceptions

Petitioner essentially raises the issue of whether he was forced to resign from his work by respondent, which constitutes constructive dismissal. The
question posited is evidently factual because it requires an examination of the evidence on record. The Court is not a trier of facts and the function of
the Court in petitions for review on certiorari  is limited to reviewing errors of law that may have been committed by the lower courts.[15]

Nonetheless, the Court has enumerated several exceptions to this rule: (1) the conclusion is grounded on speculations, surmises or conjectures; (2)
the inference is manifestly mistaken, absurd or impossible; (3) there is grave abuse of discretion; (4) the judgment is based on misapprehension of
facts; (S) the findings of fact are conflicting; (6) there is no citation of specific evidence on which the factual findings are based; (7) the findings of
absence of facts are contradicted by the presence of evidence on record; (8) the findings of the CA are contrary to those of the trial court; (9) the CA
manifestly overlooked certain relevant and undisputed facts that, if properly considered, would justify a different conclusion; ( 10) the findings of the
CA are beyond the issues of the case; and (11) such findings are contrary to the admissions of both parties.[16]

Here, two of the exceptions exist - the findings of absence of facts are contradicted by the presence of evidence on record and the findings of the CA
are contrary to those of the NLRC and the LA. They have different appreciations of the evidence in determining the propriety of petitioner's complaint
for constructive dismissal. To finally resolve the factual dispute, the Court deems it proper to tackle the factual question presented.

Constructive dismissal;
forced resignation

Constructive dismissal is an involuntary resignation resorted to when continued employment is rendered impossible, unreasonable or unlikely; or
when there is a demotion in rank and/or a diminution in pay.[17] It exists when there is a clear act of discrimination, insensibility or disdain by an
employer, which makes it unbearable for the employee to continue his/her employment.[18] In cases of constructive dismissal, the impossibility,
unreasonableness, or unlikelihood of continued employment leaves an employee with no other viable recourse but to terminate his or her
employment.[19]

By definition, constructive dismissal can happen in any number of ways. At its core, however, is the gratuitous, unjustified, or unwarranted nature of
the employer's action. As it is a question of whether an employer acted fairly, it is inexorable that any allegation of constructive dismissal be
contrasted with the validity of exercising management prerogative.[20]

There is a difference between illegal and constructive dismissal. Illegal dismissal is readily shown by the act of the employer in openly seeking the
termination of an employee while constructive dismissal, being a dismissal in disguise, is not readily indicated by any similar act of the employer that
would openly and expressly show its desire and intent to terminate the employment relationship.[21]

In SHS Perforated Materials, Inc., et al. v. Diaz,[22] the Court ruled that there is constructive dismissal if an act of clear discrimination, insensibility, or
disdain by an employer becomes so unbearable on the part of the employee that it would foreclose any choice by him except to forego his continued
employment. In said case, the employee was forced to resign and submit his resignation letter because his salary was unlawfully withheld by the
employer.

In Tuason v. Bank of Commerce, et al.,[23] it was explained that the law resolves constructive dismissal in favor of employees in order to protect their
rights and interests from the coercive acts of the employer. In that case, the employer communicated to the employee therein to resign to save her
from embarrassment, and when the latter did not comply, the employer hired another person to replace the employee. The Court ruled that it was a
clear case of constructive dismissal.

In this case, respondent argues that even though it was Valtos who initially presented the resignation letter, petitioner still voluntarily signed the same
because he substantially edited the letter and added words of courtesy. Respondent insists that petitioner failed to overcome the validity of his
resignation letter.

The Court is not convinced.

In Fortuny Garments/Johnny Co v. Castro,[24] the Court clarified the procedure to determine the voluntariness of an employee's resignation, viz.:
xxx the intention to relinquish an office must concur with the overt act of relinquishment. The act of the employee before and after the alleged
resignation must be considered to determine whether in fact, he or she intended to relinquish such employment. If the employer introduces evidence
purportedly executed by an employee as proof of voluntary resignation and the employee specifically denies the authenticity and due execution of
said document, the employer is burdened to prove the due execution and genuineness of such document.[25] (emphasis and underscoring supplied )
Circumstances before the resignation

Before the alleged resignation of petitioner, several circumstances would show that he did not contemplate or had no intention of resigning from the
company, viz.:

First, on January 5, 2012, petitioner came back from his holiday vacation and was in the office only to present a report on the status of his IT projects
and to inquire on the updates in the company with Valtos. Petitioner's presentation started around 4:00 o'clock in the afternoon and it was finished
around 5:30 o'clock in the afternoon.[26] He had no other agenda that day and he did not have any prior consideration of resigning from the company.

Second,  when petitioner finished his report and updates, Valtos suddenly brought up his performance appraisal even though the said appraisal was
supposed to be undertaken in May 2012.[27] Petitioner underscored that in his last performance appraisal in May 2011, he received a satisifactory
rating. Thus, he was surprised that Valtos was conducting an early performance appraisal on him. Notably, respondent admitted that the appraisal of
its employees' performance was scheduled in May 2012.

Third,  the affidavit of Valtos shows that he gave petitioner two options, either to resign or be terminated from his services, to wit:
11. On January 5, 2012, I met with Mr. Torreda for one of our regular update meetings. After discussing with him the updates on the IT Department, I
started to discuss with him his performance for the past year. I told Mr. Torreda that if I were to give an evaluation on his performance, it would be
"Needs Improvement". For a Senior Manager to get a rating of "Needs Improvement", that, to me, was not acceptable. I told him that he may be a
better fit somewhere else and so on a friendly basis, I advised him that resignation was an option for him if he wanted to leave this Company
gracefully without the embarrassment. xxx.

12. I felt it was all right to discuss this option with him because I was of the impression that he was open to that idea after the Seki incident happened
few months earlier. As mentioned above, the impression I got during my meeting with him after the Seki incident is that he may have resigned had I
discussed my openness to allow him to go. However, there were still a lot of unfinished work in the IT Department. With the substantial progress of
the upgrading of the IT Department, I would be amendable to his departure.

13. I explained to him that if he stayed, this may be bad for the Company given that he is not able to deal directly with the Company's customers and
the employees did not want to work with him. He was not successful in motivating his team members in the IT Department. I felt compelled to
discuss with him the option of resignation because I am aware that the Company would commence termination proceedings against him which may
lead to his termination due to loss of trust and confidence. His termination will surely destroy his chances for future employment.[28]  (emphasis
supplied)
Based on the admission of Valtos, it is clear that petitioner was not given any chance of continued employment by respondent; it was either he resign
or he would be terminated. It was Valtos, the Officer-in-Charge of the IT Department and the Group President of the Financial Service of respondent,
who presented the prepared resignation letter, and insisted that the petitioner should sign the same. These acts demonstrate the real intent and
desire of respondent to remove petitioner. Glaringly, petitioner's supposed resignation was a subterfuge to dismiss him without any just cause.

Further, Valtos prepared the resignation letter, which contained the name and details of petitioner. Verily, it was respondent, not petitioner, which had
a prior contemplation of removing the latter as its employee. Through Valtos, respondent wanted petitioner to sign the prepared resignation letter so
that it could effortlessly get rid of him.

Fourth,  when the prepared resignation letter was presented to petitioner, he refused to sign it. However, Valtos did not accept petitioner's refusal to
sign the document. Petitioner even alleged that if respondent truly wanted to terminate his employment, Valtos should just have given him a poor
performance appraisal in May 2012.[29] However, Valtos did not relent.

Around 6:20 o'clock in the evening of January 5, 2012, or almost an hour later, Valtos still insisted that petitioner sign the resignation letter. At that
point, petitioner excused himself to go to the washroom so that he could escape the meeting but Valtos and respondent's legal counsel followed him.
Respondent never denied that petitioner was indeed followed when he went out of the meeting room. Evidently, these acts show that respondent
was unyielding and uncompromising in requiring petitioner to sign the resignation letter.

Fifth  at that moment, when petitioner realized that respondent would be obstinate in forcing him to resign, he had no other choice but to sign the
prepared resignation letter handed by Valtos. However, petitioner simply placed his initials in the said letter to show that it was not his signature and
it was not official. Again, respondent did not deny that only petitioner's initials were written in the prepared resignation letter.

Circumstances after the resignation

After petitioner placed his initials in the prepared resignation letter, the circumstances that transpired thereafter consistently show that there was
involuntary resignation on his part, to wit:

First,  the prepared resignation letter states that petitioner's resignation was effective February 4, 2012.[30] However, on January 5, 2012, or on the
same day that he initialed the said letter, petitioner was already asked to turn over the company items and to leave the building premises together
with his belongings. Thus, contrary to the date stated in the letter, petitioner's resignation from the company was effective immediately. Respondent
eagerly wanted to terminate petitioner's employment that it did not anymore respect the stipulated date of his supposed resignation.

Second,  after the purported resignation of petitioner, respondent never discussed with him any compensation or separation pay that he would
receive as a result of his separation from the company. It simply wanted to remove petitioner as soon as possible. Respondent did not even provide
petitioner any compensation or benefit for his years of service to the company. In the same manner, petitioner had absolutely no financial motivation
to tender his resignation as he had nothing to gain from leaving the company.

The case of Habana v. NLRC, et al.,[31] cited by respondent where the Court considered the significant separation pay received by the employee as
an indicium  that there was indeed a voluntary resignation is not applicable herein. In the case at bench, there was no financial consideration given to
petitioner in view of his alleged resignation.

Third,  after petitioner left the premises, he was not anymore allowed to report for work and his company e-mail address was immediately
deactivated. There was no winding up process provided by respondent. Petitioner was not given an opportunity to properly settle or transfer his
obligations or pending projects. His employment was abruptly dismissed.

Fourth,  petitioner promptly assailed the constructive dismissal committed by respondent because six (6) days after his supposed resignation, he
immediately filed a complaint before the LA. It is a settled doctrine that the filing of a complaint for illegal dismissal is inconsistent with abandonment
of employment. An employee who takes steps to protest his dismissal cannot logically be said to have abandoned his work. The filing of such
complaint is proof enough of his desire to return to work, thus, negating any suggestion of abandonment.[32]

Clearly, petitioner had no intention of abandoning his work when he filed the complaint and questioned his purported dismissal.

Based on the foregoing circumstances, which transpired before and after the signing of the prepared resignation letter, it is clear that petitioner was
constructively dismissed. Respondent forced petitioner to sign the prepared resignation letter. In fact, he was not given any viable option; it was
either he sign the resignation letter or he would be terminated from the company. Doubtless, the resignation of petitioner was involuntary and not
genuine.

Petitioner's alleged act of editing the

prepared resignation letter and his
education attainment are immaterial

Citing St. Michael Academy, et al. v. NLRC, et al.,[33] respondent argues that since petitioner edited the resignation letter and added words of
courtesy, it was improbable for him to involuntarily sign the letter. It further asserts that it was impossible to coerce petitioner to sign a prepared
resignation letter because he had a managerial position and a high educational status.

Again, the Court is not convinced.

As stated in Fortuny Garments/Johnny Co. v. Castro,[34] the circumstances before and after the signing of the resignation letter must be examined to
determine the voluntariness of the said resignation: It was uncontroverted that petitioner was actively taking part in several IT projects; that petitioner
received a satisfactory performance rating from the previous year; that petitioner was not due for performance appraisal until May 2012; that there
was no scheduled appraisal performance due on January 5, 2012; that it was Valtos who presented the prepared resignation letter; that Valtos
persistently rejected petitioner's refusal to sign the said letter; that Valtos followed petitioner even when he left the meeting room; that petitioner
merely placed his initials in the letter, instead of his customary signature; that even though the resignation was effective February 4, 2012, he was
immediately barred from the company premises on January 5, 2012; and that he immediately questioned his alleged resignation before the LA.

These numerous facts and circumstances certainly contradict the voluntariness of petitioner's resignation. Any reasonable person in the petitioner's
position would have felt compelled to give up his position. Assuming arguendo  that petitioner edited the said letter and inserted words of courtesy,
these are insufficient to prove the voluntariness of his resignation in light of the various circumstances which demonstrated that he did not have a
choice in his forced resignation.

Further, St. Michael Academy, et al. v. NLRC, et al.[35] is not applicable because, contrary to the facts therein,[36] there are several and notable
circumstances in the case at bench that would show the forced resignation of petitioner before and after he placed his initials in the prepared
resignation letter. Consequently, it is the burden of respondent to prove the due execution and genuineness of his resignation. Thus, aside from bare
conjectures, respondent failed to prove the legitimacy of petitioner's resignation.

Respondent failed to terminate

petitioner's employment on
any just cause

If respondent truly wanted to terminate the employment of petitioner, then it must have presented a just cause for his dismissal. The just causes for
dismissing an employee are provided under Article 282 of the Labor Code.[37]

Respondent asserts that petitioner was ineffective as an IT manager and his staff complained about his inefficiencies; that he failed to integrate
himself into the company due to his lack of enthusiasm and cooperation at work and he did not respond to queries and requests; and that a female
employee resigned because she felt uncomfortable with petitioner.

However, respondent's allegations against petitioner are unsupported by substantial evidence. Other than its bare assertions and suppositions,
respondent failed to cite or present any other credible evidence to substantiate the alleged misconduct or shortcomings of petitioner in his
employment with respondent.

Oddly, as petitioner was a managerial employee, respondent could have simply dismissed his employment on the basis of loss of trust and
confidence. Loss of trust and confidence as a valid ground for dismissal is premised on the fact that the employee holds a position whose functions
may only be performed by someone who enjoys the trust and confidence of the management.[38] Still, even on the basis of loss of trust and
confidence, respondent did not initiate the termination of petitioner's employment. It bolsters the fact that respondent does not have any genuine
ground to dismiss petitioner.

The Court cannot allow respondent to resort to an improper method of forcing petitioner to sign a prepared resignation letter. As respondent has no
legitimate basis to terminate petitioner as its employee, then he cannot be forced to resign from work because it would be a dismissal in disguise.
Under the law, there are no shortcuts in terminating the security of tenure of an employee. Thus, the resignation letter of petitioner must be struck
down because it was involuntary.

Award of moral and exemplary

damages must be deleted

Moral damages are recoverable when the dismissal of an employee is attended by bad faith or fraud or constitutes an act oppressive to labor, or is
done in a manner contrary to good morals, good customs or public policy. Exemplary damages, on the other hand, are recoverable when the
dismissal was done in a wanton, oppressive, or malevolent manner.[39]

Here, the LA imposed moral and exemplary damages against respondent to serve as a deterrent to other employers. On the other hand, the NLRC
affirmed the said awards because petitioner suffered from anxiety due to his unlawful termination.

The Court finds that the reasons cited by the NLRC and the LA are insufficient to award moral and exemplary damages to petitioner. The said
reasons do not show that respondent employed bad faith or fraud against petitioner. Further, it was not proven that the dismissal of petitioner was
done in a wanton, oppressive, or malevolent manner. Hence, the award of moral and exemplary damages must be deleted.

WHEREFORE, the petition is GRANTED. The June 13, 2016 Decision and the February 9, 2017 Resolution of the Court of Appeals in CA-G.R. SP
No. 133505 are hereby REVERSED and SET ASIDE. The June 28, 2013 Decision and October 31, 2013 Resolution of the National Labor Relations
Commission in NLRC NCR-01-00610-12, which affirmed the award of backwages and granted separation pay in lieu of reinstatement
to Jonald O. Torreda, are hereby REINSTATED with MODIFICATION that the award of moral and exemplary damages be DELETED.

SO ORDERED.

[ G.R. No. 226727, April 25, 2018 ]

UNIVERSITY OF THE EAST AND DR. ESTER GARCIA, PETITIONERS, V. VERONICA M. MASANGKAY AND GERTRUDO R. REGONDOLA,
RESPONDENTS.

DECISION

VELASCO JR., J.:

This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court seeking the reversal and setting aside of the February 19, 2016
Decision[1] and August 26, 2016 Resolution of the Court of Appeals (CA) in CA-G.R. SP No. 132774, entitled "Veronica M. Masangkay and
Gertrudo R. Regondola v. University of the East, Dr. Ester Garcia and The National Labor Relations Commission. "
Respondents Veronica M. Masangkay (Masangkay) and Gertrudo R. Regondola (Regondola) were regular faculty members, Associate Professors,
and Associate Deans of petitioner University of the East (UE) – Caloocan Campus, prior to their dismissal on November 26, 2007.
While holding said positions at UE, respondents submitted three (3) manuals, namely: Mechanics, Statics, and Dynamics, requesting said manuals'
temporary adoption as instructional materials. Respondents represented themselves to be the rightful authors thereof, together with their co-author,
a certain Adelia F. Rocamora (Rocamora). Accompanying said requests are certifications under oath, signed by respondents, declaring under pain of
perjury, and openly certifying that the manuals are entirely original and free from plagiarism. Said certification reads:
We hereby certify that the contents of the manual MECHANICS FOR ECE AND COE by Gertrudo R. Regondola, et al. to be used in the subjects
ECE 311N are entirely original and free from plagiarism.
(SGD.)
Gertrudo R. Regondola
 
(SGD.)
Veronica Masangkay[2]
After review, UE approved the requests for use of said manuals by students of the College of Engineering.
Thereafter, petitioners received two (2) complaint-letters via electronic mail (e-mail) from a certain Harry H. Chenoweth and Lucy Singer Block.
Chenoweth and Block's father are authors, respectively, of three books, namely: Applied Engineering Mechanics, Engineering Mechanics, 2nd
Edition, 1954, and Engineering Mechanics: Statics & Dynamics, 3rd Edition, 1975. They categorically denied giving respondents permission to copy,
reproduce, imitate, or alter said books, and asked for assistance from UE to stop the alleged unlawful acts and deal with this academic dishonesty.
Prompted by the seriousness of the allegations, UE investigated the matter. After a thorough evaluation of the alleged plagiarized portions, petitioner
conducted an investigation in which respondents actively participated and filed their Answer. Eventually, UE's Board of Trustees issued
Resolution No. 2007-11-84 dismissing respondents. Notices of Dismissal effective November 26, 2007 were sent to respondents and Rocamora via
registered mail.
Unlike herein respondents, Rocamora sought reconsideration of the decision to the Board of Trustees. Respondents, however, did not appeal the
decision terminating them and instead opted to claim their benefits due them, which consisted of leave credits, sick leave, holiday pay, bonuses,
shares in tuition fee increase, COLA, and RATA. For her part, respondent Masangkay requested that a portion of her benefits be applied to her
existing car loan. For the amounts that they received, they signed vouchers and pay slips. These were duly acted upon by UE.
Rocamora's case
It appears that after the Board of Trustees denied reconsideration of Rocamora's dismissal, the latter filed a case against UE for illegal dismissal.
Eventually reaching this Court, the illegality of her dismissal was upheld by the Court through a resolution in University of the East and Dr. Ester
Garcia v. Adelia Rocamora, G.R. No. 199959, February 6, 2012.
Meanwhile, almost three years after having been dismissed from service and after collecting their accrued benefits, respondents then filed a
complaint for illegal dismissal on July 20, 2010, docketed as NLRC NCR No. 07-09924-10, entitled "Veronica M. Masangkay and Gertrudo R.
Regondola v. University of the East (UE), President Ester Garcia."
Ruling of the Labor Arbiter
In its February 28, 2011 ruling,[3] the labor arbiter held that respondents were illegally dismissed and ordered their reinstatement without loss of
seniority rights and other benefits and full backwages inclusive of allowances until actual reinstatement. UE was directed to pay a total of
P4,623,873.34 representing both respondents' backwages, allowances, 13th month pay, moral and exemplary damages. Thus:
WHEREFORE, premises considered, judgment is hereby rendered finding complainants to have been ILLEGALLY DISMISSED. Respondents are
ordered to immediately reinstate complainants to their position without loss of seniority rights and other benefits and full backwages inclusive of
allowances until actual reinstatement. Respondent University of the East is directed to pay complainants the following:
VERONICA M. MASANGKAY
1. BACKWAGES:    
  11/1/07 - 2/28/11    
  50,000 x 39.93 = P1,996,500.00  
  13th MO. PAY:  
  P1,996,500/12 = P 166,375.00  
  ALLOWANCE: 41741  
  P3,000.00 x 39.93 = P 119,790.00 P2,282,665.00
2. 13th MO. PAY  
  7/20/2007 - 10/31/2007  
  P50,000 x 3.40 / 12 =   P 14,166.67
3. MORAL DAMAGES   P 50,000.00
4. EXEMPLARY DAMAGE   P 25,000.00
    TOTAL: P2,371,831.67
       
GERTRUDO R. REGONDOLA  
5. BACKWAGES: November 1, 2007 -February 28, 2011
  50,000.00 x 39.93 = P1,996,500.00  
  13th MO. PAY:  
  P1,996,500/12 P 166,375.00  
  ALLOWANCE:    
  P3,000.00 x 39.93   P2,162,875.00
6. 13th MO. PAY  
  July 20, 2007 - October 31, 2007  
  P50,000 x 3.40 / 12 =   P 14,166.67
7. MORAL DAMAGES   P 50,000.00
8. EXEMPLARY DAMAGE   P 25,000.00
    TOTAL: P 2,252,041.67
     
  10% Attorney's Fees 462,287.33  
       
  GRAND TOTAL: P4,623,873.34
SO ORDERED.[4]
NLRC Decision
The case reached the National Labor Relations Commission (NLRC), where the Commission reversed the labor arbiter's ruling and disposed of the
case in this wise:
WHEREFORE, the appeal of respondents is GRANTED and the labor arbiter's Decision is REVERSED and SET ASIDE. The instant complaint is
DISMISSED for lack of merit.
SO ORDERED.[5]
Their motion for reconsideration having been denied,[6] respondents elevated the case to the CA.
CA Ruling
The appellate court reinstated the labor arbiter's ruling that petitioners failed to prove that indeed a just cause for respondents' dismissal exists. Too,
it emphasized, among others, that the instant petition is bound by this Court's Decision in the Rocamora case, calling for the application of the
doctrine of stare decisis. The CA thus disposed of the case in this manner:
IN VIEW OF ALL THESE, the petition is GRANTED. The assailed Decision dated June 29, 2012 and Resolution dated September 17, 2013 of public
respondent National Labor Relations Commission are SET ASIDE. The Decision dated February 28, 2011 of the Labor Arbiter is REINSTATED.
SO ORDERED.
The CA denied reconsideration of the questioned Decision in the assailed Resolution of August 26, 2016, prompting petitioners to file the instant
petition, raising the following issues, to wit:
1) Whether or not respondents' misrepresentation, dishonesty, plagiarism and/or copyright infringement which is considered academic dishonesty
tantamount to serious misconduct is a just and valid cause for their dismissal.
2) Whether or not the CA erroneously applied the principle of stare decisis.
3) Whether or not respondents are entitled to reinstatement with full backwages, and other monetary awards despite the fact that they were
dismissed for valid cause under the Labor Code.
4) Whether or not the award of damages and attorney's fees have factual and legal basis.
Petitioners argue, among others, that the instant case cannot be bound by the Rocamora case via application of the doctrine of stare
decisis because of substantial differences in Rocamora's situation and in that of respondents, as noted by the NLRC. Too, petitioners maintain that
plagiarism, a form of academic dishonesty, is a serious misconduct that justly warrants herein respondents' dismissal.
This Court's Ruling
We resolve to grant the petition.
The principle of stare decisis requires that once a case has been decided one way, the rule is settled that any other case involving exactly the same
point at issue should be decided in the same manner.[7] It simply means that for the sake of certainty, a conclusion reached in one case should be
applied to those that follow if the facts are substantially the same, even though the parties may be different. It proceeds from the first principle of
justice that, absent any powerful countervailing considerations, like cases ought to be decided alike. Thus, where the same questions relating to the
same event have been put forward by the parties similarly situated as in a previous case litigated and decided by a competent court, the rule of stare
decisis is a bar to any attempt to relitigate the same issue.[8]
Applying said principle, the CA held that Our ruling in University of the East v. Adelia Rocamora[9] is a precedent to the case at bar, involving, as it
does, herein respondents' co-author and tackling the same violation—the alleged plagiarism of the very same materials subject of the instant case.
In this petition, UE, however, asserts that the case of respondents substantially varies from Rocamora so as not to warrant the application of said
rule.
Indeed, the CA erred when it relied on Our ruling in University of the East v. Adelia Rocamora in resolving the present dispute. Our decision
in Rocamora, rendered via a Minute Resolution, is not a precedent to the case at bar even though it tackles the same violation—the alleged
plagiarism of the very same materials subject of the instant case, which was initiated by respondents' co-author. This is so since respondents are
simply not similarly situated with Rocamora so as to warrant the application of the doctrine of stare decisis.
A legal precedent is a principle or rule established in a previous case that is either binding on or persuasive for a court or other tribunal when
deciding subsequent cases with similar issues or facts.
Here, We find that the Rocamora case is not on all fours with the present dispute, thereby removing it from the application of the principle of stare
decisis. First, herein respondents categorically represented to UE under oath that the Manuals were free from plagiarism—an act in which their co-
author Rocamora did not participate. Second, respondents benefited financially from the sale of the Manuals while Rocamora did not. Third,
respondents acquiesced to UE's decision to terminate their services and even requested the release of and thereafter claimed the benefits due
them.
Aside from these, respondents executed a Certification categorically stating under oath and declaring under pain of perjury that the manuals are
entirely original and free from plagiarism. To reiterate:
We hereby certify that the contents of the manual MECHANICS FOR ECE AND COE by Gertrude R. Regondola, et al. to be used in the subjects
ECE 311N are entirely original and free from plagiarism.
(SGD.)
Gertrudo R. Regondola
 
(SGD.)
Veronica Masangkay[10]
As correctly noted by the NLRC in its September 17, 2013 Resolution,[11] Rocamora made no such undertaking with respect to the subject materials.
This Certification is crucial in determining the guilt of herein respondents and cannot simply be disregarded.
By expressly guaranteeing to UE that their Manuals were entirely original, coupled by their omission to attribute the copied portions to the original
authors thereof, as per the Memorandum submitted by Chancellor Celso D. Benologa, it is apparent that respondents represented said copied
portions as their own.
More importantly, We find that the CA erred in disregarding the evidence presented by petitioner as regards the issue of plagiarism.
In the assailed ruling, the CA held that petitioner UE failed to prove that respondents were indeed guilty of the charge of misconduct or dishonesty
through plagiarism—a form of academic dishonesty. It found that the evidence does not show that respondents were motivated with wrongful intent
in publishing the manuals.[12] In ruling thus, the appellate court heavily relied on the approval of the manual by the Textbook Evaluation and
Publishing Office (TEPO) and the Board of Trustees m exculpating respondents from liability.
The CA also found that their act of allegedly plagiarizing the books of Chenoweth and Singer was not duly proven since the two (2) e-mails from
Chenoweth and Block were not verified such that, therefore, such e-mails afford no assurance of their authenticity and reliability.[13] The CA went on
to state that "[h]aving issues on their authenticity and reliability, the allegations in the e-mails are mere speculations that, therefore, such fact renders
such e-mails inadmissible in evidence against petitioners."[14]
The CA, in its Resolution, thereafter ruled that the evidence charging respondents with plagiarism was inadmissible, viz:
Be that as it may, We reiterate that private respondents failed to sufficiently prove that petitioners were guilty of plagiarism that would warrant the
latter's dismissal from service. In order to prove petitioners' act of plagiarizing the books of Chenoweth and Ferdinand Singer, private respondents
only presented the following: unauthenticated and unverified e-mails from Chenoweth and Block and the Lecture Guides/Manuals. The e-mails from
Chenoweth and Block, being unauthenticated, are, therefore, inadmissible in evidence against petitioners. Private respondents cannot merely rely on
the Lecture Guides/Manuals in order to show that petitioners were guilty of plagiarism. The reason is that such Lecture Guides/Manuals were duly
scrutinized and evaluated by the TEPO, through its Board of Textbooks Review, and were eventually approved by the UE Board of Trustees. It
would be absurd for private respondents to declare the Lecture Guides/Manuals as plagiarized documents when in the first place, private
respondents, through TEPO and the UE Board of Trustees, had initially scrutinized and approved the same.[15]
In labor cases, the deciding authority should use every reasonable means to ascertain speedily and objectively the facts, without regard to
technicalities of law and procedure. Technical rules of evidence are not strictly binding in labor cases such as the instant one.[16] Thus, it was error on
the part of the CA to disregard the evidence presented by petitioners to establish the act of plagiarism committed by respondents.
It is worthy to note that the CA failed to examine the actual text written in the manual and compare the same with the work claimed to have been
plagiarized. However, after a thorough review of the records of the case, the Court finds that respondents, indeed, plagiarized the works of
Chenoweth and Singer. It is glaring from a comparison of the subject text that respondents heavily lifted portions of the said books, as reported in the
Memorandum submitted by Chancellor Celso F. Bebologa,[17] thus:
FINDINGS:
1. In his Memorandum dated March 15, 2007, Dean Constantino T. Yap verified Mr. Chenoweth's claim that he is one of the authors of the
textbook "Applied Engineering Mechanics". (EXHIBIT "1")
2. At least three (3) books containing the names of Masangkay, Rocamora, Regondola, and Tolentino were copied verbatim or with slight
modifications from the following original engineering books:
- Engineering Mechanics, Second Edition, by Ferdinand L. Singer
- Applied Engineering Mechanics, Metric Edition, by Alfred Jensen, Harry H. Chenoweth, adapted by David N. Watkins
Another author, Hibbeler, is also mentioned as a source of the "reproduction" but the specific book is not identified (EXHIBITS "2," "3," "4," &
"5")
Tolentino's name appeared only in one of the three books copied from the original (EXHIBITS "6" TO "6-B," "7" TO "7-B" & "8" TO "8- B").
3. No publisher is indicated in the "copied" volumes which are made of low quality paper.
OTHER INFORMATION
- "Reproduced" copies are sold to students. Copies bought by students are retrieved by professors at the end of the school term. Records of
students who failed to return the "reproduced" copies bought by them are marked LFR and/or NC.
- Students interested to buy the "reproduced" book are referred to specific bookstores. A bookstore – Special & Journal – with address
at No. 76 Samson Road, Caloocan City is selling the "reproduced" books.
- Some professors reportedly own or operate printing press facilities. Others are holding personal review classes or having their own review
centers.
- There are pending lapsed applications for removal of LFR at the Engineering Department. Professors alleged their class records were lost
when required to present them to support the applications.
In a letter requiring respondents to provide the basis of their appeal of their dismissal, Dr. Ester A Garcia quoted the findings of the Faculty
Disciplinary Board:
SUMMARY OF FINDINGS
1. From the books of Singer, 558 sentences/figures were plagiarized and used in the manuals of Respondents, either verbatim or with
modification; while from the book of Jensen-Chenoweth, 52 sentences and figures were likewise taken and used in Respondents' manuals.
2. Respondents did not mention, as required in Section 184 of the Intellectual Property Law, the sources and the names of the authors of the
textbooks from where they lifted passages, illustrations, and tables used in their manuals.
3. In their request to TEPO for temporary adoption of the manuals, Respondents certified under oath that the manuals are all original and free
from plagiarism. Other investigation, however, shows otherwise. (emphasis ours)
To this Court, the bulk of the copied text vis-a-vis the said Certification clearly shows wrongful intent on the part of respondents. We cannot
subscribe to the CA ruling that respondents were in good faith since, being the principal authors thereof, they had full knowledge as to what they
were including in their written work. In other words, they knew which portions were truly original and which were not.
From the foregoing, the Court finds that there is sufficient basis for dismissing respondents from service, considering the highest integrity and
morality which the profession requires from its teachers. Respondents plagiarized the works of Chenoweth and Singer by lifting large portions of the
text of the works of said writers without properly attributing the copied text, and, to make matters worse, they represented under oath that no portion
of the Manuals were plagiarized when, in truth and in fact, huge portions thereof were improperly lifted from other materials.
Lastly, it is well to emphasize that Rocamora strongly opposed her dismissal from service as contained in her December 3, 2007 Letter,[18] where she
invoked denial of due process in her termination, denied having committed plagiarism or benefiting from the printing of the materials in question, and
"sincerely hop[ing] that the [Board of Trustees] x x x, will see the injustice [she] got which ought to be reversed and reconsidered."[19]
Such, however, is not so for herein respondents. It is well to emphasize that in her June 2, 2008 Letter,[20] respondent Masangkay requested the
recomputation of the amounts due in her favor after said termination, as well as the application of said amounts to her car loan balance. She was
even cooperative with the procedure, asking the management to advise her should there be a need for her to prepare and accomplish her time
records for purposes of recomputing her salary.
As to Regondola, aside from the cash and check vouchers[21] that he signed after receiving the amounts due him after said termination, it does not
appear that he made any similar letter request or appeal, unlike Masangkay or Rocamora, respectively.
Indeed, rights may be waived, unless the waiver is contrary to law, public order, public policy, morals, or good customs, or prejudicial to a third
person with a right to be recognized by law.[22] Within the context of a termination dispute, waivers are generally looked upon with disfavor and are
commonly frowned upon as contrary to public policy and ineffective to bar claims for the measure of a worker's legal rights. If (a) there is clear proof
that the waiver was wangled from an unsuspecting or gullible person; or (b) the terms of the settlement are unconscionable, and on their face invalid,
such quitclaims must be struck down as invalid or illegal.[23]
Thus, not all waivers and quitclaims are invalid as against public policy. If the agreement was voluntarily entered into and represents a reasonable
settlement, it is binding on the parties and may not later be disowned simply because of a change of mind. It is only where there is clear proof that
the waiver was wangled from an unsuspecting or gullible person, or the terms of settlement are unconscionable on its face, that the law will step in to
annul the questionable transaction. But where it is shown that the person making the waiver did so voluntarily, with full understanding of what he was
doing, and the consideration for the quitclaim is credible and reasonable, the transaction must be recognized as a valid and binding undertaking.[24]
In the case at bar, We find no reason to rule that respondents did not waive their right to contest UE's decision. Based on their actuations
subsequent to their termination, it is clear that they were amenable to UE's decision of terminating their services on the ground of academic
dishonesty. Nowhere can we find any indication of unwillingness or lack of cooperation on respondents' part with regard to the events that transpired
so as to convince Us that they were indeed constrained to forego their right to question the management's decision. Neither do we find any sign of
coercion nor intimidation, subtle or otherwise, which could have forced them to simply accept said decision. In fact, based on their qualifications, this
Court cannot say that respondents and UE do not stand on equal footing so as to force respondents to simply yield to UE's decision. Furthermore,
there is no showing that respondents did not receive or received less than what is legally due them in said termination.
In sum, We are of the view that their acceptance of UE's decision is voluntary and with full understanding thereof, tantamount to a waiver of their
right to question the management's decision to terminate their services for academic dishonesty. It is as though they have waived any and all claims
against UE when they knowingly and willingly acquiesced to their dismissal and opted to receive the benefits due them instead.
We also find that they genuinely accepted petitioner University's decision at that time and that their filing of the complaint almost three (3) years later
was a mere afterthought and, in their own words, inspired by their colleague's victory.[25]
In the light of the foregoing, the Rocamora case cannot be used as a precedent to the case at bar. In view of the substantial evidence presented by
petitioner UE that respondents committed plagiarism, then the complaint for illegal dismissal must, therefore, be dismissed for utter lack of basis.
WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals dated February 19, 2016 in CA-G.R. SP No. 132774 and its August
26, 2016 Resolution are hereby REVERSED and SET ASIDE. The complaint for illegal dismissal is hereby DISMISSED for lack of merit.
SO ORDERED.

[ G.R. No. 229302, June 20, 2018 ]

CONSOLIDATED DISTILLERS OF THE FAR EAST, INC., PETITIONER, VS. ROGEL N. ZARAGOZA, RESPONDENT.

DECISION

CAGUIOA, J:

Petitioner Consolidated Distillers of the Far East, Inc. (Condis) filed a Petition for Review on Certiorari[1] (Petition) under Rule 45 of the Rules of Court
assailing the Decision[2] dated March 17, 2016 and Resolution[3] dated January 10, 2017 of the Court of Appeals (CA) in CA-G.R. SP No. 135538.
The CA affirmed with modification the Decision[4] dated January 13, 2014 of the National Labor Relations Commission (NLRC), Sixth Division, which
declared as null and void the Labor Arbiter (LA)'s Resolution[5] dated August 3, 2013.
Facts

The present case is an offshoot of the petition entitled Consolidated Distillers of the Far East, Inc. v. Rogel N. Zaragoza and docketed as G.R. No.
196038 (Illegal Dismissal Case). The First Division of the Court denied the petition in a Resolution[6] dated June 22, 2011, which became final and
executory on March 30, 2012.[7]

In G.R. No. 196038, the Court affirmed the CA decision in favor of respondent therein Rogel Zaragoza (Rogel) which had affirmed the NLRC's and
LA's findings that Condis had illegally dismissed Rogel, and ordered his reinstatement and payment of his backwages.

After the finality of the resolution of the Court in G.R. No. 196038 on March 30, 2012, Rogel moved for the issuance of an alias writ of execution
against Condis for his reinstatement, and the payment of full backwages, accrued salaries and allowances as of December 3, 2012, less the
P454,986.98 that was already released to him by the LA pending appeal (Execution Proceedings).[8] Condis opposed the motion and argued that its
execution of the Asset Purchase Agreement with Emperador Distillers, Inc. (EDI) was a supervening event that made it impossible to reinstate Rogel
to his former position.[9] In a Resolution dated August 3, 2013, the LA ruled in favor of Rogel and directed Condis to pay P2,135,256.45 representing
the backwages/reinstatement salaries, including allowances, from December 3, 2007, the date of Rogel's illegal dismissal, up to August 3, 2013, the
date of the LA resolution.[10]

Condis filed a petition for extraordinary remedy with the NLRC, which granted the petition and declared the LA's Resolution null and void in a
Decision dated January 13, 2014.[11] The NLRC ruled that the reinstatement was indeed rendered impossible because of the Asset Purchase
Agreement, but that backwages should be computed only until the finality of the Court's Resolution in the Illegal Dismissal Case (i.e., G.R. No.
196038) on March 30, 2012.[12]

Rogel filed a petition for certiorari under Rule 65 with the CA. In a Decision dated March 17, 2016, the CA affirmed the NLRC but with modification
that the backwages should be computed from the date of illegal dismissal until the finality of the decision of the CA, and separation pay computed
from the date of employment until finality of the CA Decision. The dispositive portion states:
WHEREFORE, the instant petition for certiorari is hereby DISMISSED. The January 13, 2014 Decision and February 28, 2014 Resolution of the
National Labor Relations Commission, Sixth Division in LER Case No. 10-280-13 are AFFIRMED with MODIFICATIONS. As modified, private
respondent Consolidated Distillers of the Far East, Inc. is ORDERED to pay petitioner Rogel N. Zaragoza the following amounts: backwages,
inclusive of allowances and other benefits or their monetary equivalent computed from the date he was illegally dismissed until finality of this
Decision and separation pay computed from the first day of employment on April 18, 1994 until the finality of this Decision at the rate of one (1)
month salary for every year of service.

The sum of P454,986.98 previously received by Rogel N. Zaragoza by virtue of the release order of the Labor Arbiter must be deducted from the
foregoing awards.

SO ORDERED.[13]
Condis moved for reconsideration but this was denied in the CA's Resolution dated January 10, 2017. Hence, this Petition.
Issues
Condis raises the following issues:
I.

The Honorable Court of Appeals committed reversible error in ruling that Petitioner did not raise new issues in its Partial Motion for Reconsideration.
A. The Honorable Court of Appeals committed reversible error in applying the doctrines laid down in Bani Rural Bank vs. De Guzman, to this
instant case;
B. The factual findings of the Honorable Court of Appeals are binding to this Honorable Court as illustrated in the case of Salcedo vs. People.
This being the case, the question of whether or not there exists a supervening event, which prohibited Respondent's reinstatement is
already settled. Thus, the Honorable Court of Appeals committed reversible error in reckoning the period of back wages and separation
pay until finality of the decision of this case and not until the time, the supervening event and legal impossibility to reinstate arose in this
case, in accordance with the latest ruling in Olympia Housing Inc. Case; and
C. In awarding Zaragoza backwages and separation pay beyond the occurrence of the supervening event, which gave rise to the impossibility
of reinstatement, the Honorable Court of Appeals committed reversible error by not considering that these would be confiscatory, and
would result in unjust enrichment, not to mention that Zaragoza will be placed in a better position vis a vis the other employees of CONDIS
who were separated as a result of the supervening event, which gave rise to the legal impossibility of reinstatement.
II.

The Honorable Court of Appeals committed reversible error in not resolving the issue regarding the award of Zaragoza's allowances, which were
based on evidence which were only presented during execution proceedings, and which are clearly ad hoc in nature.[14] (Emphasis omitted)
The Court's Ruling

The Petition is partly granted.

Computation of backwages and separation pay

To recall, the Decision in G.R. No. 196038 became final and executory on March 30, 2012. As modified, the Decision awarded backwages and
directed Condis to reinstate Rogel. It was only during the Execution Proceedings that the NLRC, in reversing the LA, directed the payment of
separation pay in lieu of reinstatement. Condis does not question the propriety of the award of separation pay in lieu of reinstatement by the NLRC
during the Execution Proceedings. It only takes issue with the NLRC's and CA's computation of the backwages and separation pay.[15] Condis argues
that it should only be liable for backwages and separation pay until the year 2007. It claims that the execution of the Asset Purchase Agreement and
the termination of the subsequent Service Agreement with EDI was the reason for its failure to reinstate Rogel.[16] It claims that the foregoing were
supervening events that made Rogel's position inexistent as of 2007 and that there is no position to which Rogel could be reinstated into.[17] Condis
further claims that the CA erred when it applied Bani Rural Bank, Inc. v. De Guzman[18] (Bani) instead of Olympia Housing, Inc. v.
Lapastora[19] (Olympia Housing).

The Court disagrees.

The Court agrees with the CA that Condis is liable for backwages and separation pay until the finality of the decision awarding separation pay as
ruled in Bani.

In Bani, the decision there finding that the employee was illegally dismissed and directing his reinstatement had also already attained finality. During
the execution proceedings, since the employees manifested that they no longer wanted to be reinstated, the LA directed that separation pay be
given to them in lieu of reinstatement. On appeal, the NLRC affirmed the payment of separation pay but modified the basis of the computation. This
also became final and executory.

The LA then recomputed the award and ruled that backwages should only be paid until the date that the employees manifested that they no longer
wanted to be reinstated. The NLRC and the CA, however, both ruled that the backwages should be counted until the finality of the NLRC decision
awarding separation pay. The Supreme Court held therein that when there is a supervening event that renders reinstatement impossible, backwages
is computed from the time of dismissal until the finality of the decision ordering separation pay,[20] thus:
x x x when separation pay is ordered after the finality of the decision ordering the reinstatement by reason of a supervening event that makes the
award of reinstatement no longer possible (as in the case), backwages is computed from the time of dismissal until the finality of the
decision ordering separation pay.[21]
The reason for this, as the Court explained in Bani, is that "[w]hen there is an order of separation pay (in lieu of reinstatement or when the
reinstatement aspect is waived or subsequently ordered in light of a supervening event making the award of reinstatement no longer possible), the
employment relationship is terminated only upon the finality of the decision ordering the separation pay. The finality of the decision cuts-off the
employment relationship and represents the final settlement of the rights and obligations of the parties against each other."[22]

Here, the award of separation pay in lieu of reinstatement, which Condis does not question, was made subsequent to the finality of the Decision in
the Illegal Dismissal Case (G.R. No. 196038). Condis cannot therefore evade its liability to Rogel for backwages and separation pay computed until
the finality of this Decision which affirms the order granting separation pay. As the Court further held in Bani:
The above computation of backwages, when separation pay is ordered, has been the Court's consistent ruling. In Session Delights Ice Cream and
Fast Foods v. Court of Appeals (Sixth Division), we explained that the finality of the decision becomes the reckoning point because in allowing
separation pay, the final decision effectively declares that the employment relationship ended so that separation pay and backwages are to be
computed up to that point.[23]
Further, Condis cannot find support in Olympia Housing, as this case, in fact, holds against its position. In Olympia Housing, the Court considered
that the employer therein was able to prove in a separate labor case that it had closed its business and followed all statutory requirements arising
from the closure of its business, i.e., notice to the Department of Labor and Employment (DOLE), notice to the employees, and financial statements
substantiating its claim that it was operating at a loss. Given this, the Court therein ruled that the employer is liable for backwages and separation
pay only until the date of the closure of the business of the employer, even if this was prior to the LA's decision finding illegal dismissal, thus:
The CA correctly ruled that the principle of stare decisis finds no relevance in the present case. To begin with, there is no doctrine of law that is
similarly applicable in both the present case and in Ocampo v. OHI. While both are illegal dismissal cases, they are based on completely different
sets of facts and involved distinct issues. In the instant case, Lapastora cries illegal dismissal after he was arbitrarily placed on a floating status on
mere suspicion that he was involved in theft incidents within the company premises without being given the opportunity to explain his side or any
formal investigation of his participation. On the other hand, in Ocampo v. OHI, the petitioners therein questioned the validity of OHI's closure of
business and the eventual termination of all the employees. Thus, the NLRC ruled upon both cases differently.

Nonetheless, the Court finds the recognition of the validity of OHI's cessation of business in the Decision dated November 22, 2002 of the NLRC,
which was affirmed by the CA and this Court, a supervening event which inevitably alters the judgment award in favor of Lapastora. The NLRC noted
that OHI complied with all the statutory requirements, including the filing of a notice of closure with the DOLE and furnishing written notices of
termination to all employees effective 30 days from receipt. OHI likewise presented financial statements substantiating its claim that it is operating at
a loss and that the closure of business is necessary to avert further losses. The action of the OHI, the NLRC held, is a valid exercise of management
prerogative.

Thus, while the finding of illegal dismissal in favor of Lapastora subsists, his reinstatement was rendered a legal impossibility with OHI's closure of
business. In Galindez v. Rural Bank of Llanera, Inc., the Court noted:
Reinstatement presupposes that the previous position from which one had been removed still exists or there is an unfilled position more or less of
similar nature as the one previously occupied by the employee. Admittedly, no such position is available. Reinstatement therefore becomes a legal
impossibility. The law cannot exact compliance with what is impossible.
Considering the impossibility of Lapastora's reinstatement, the payment of separation pay, in lieu thereof, is proper. The amount of separation pay to
be given to Lapastora must be computed from March 1995, the time he commenced employment with OHI, until the time when the company ceased
operations in October 2000. As a twin relief, Lapastora is likewise entitled to the payment of backwages, computed from the time he was unjustly
dismissed, or from February 24, 2000 until October 1, 2000 when his reinstatement was rendered impossible without fault on his part.[24]
For Olympia Housing to apply, the employer must prove the closure of its business in full and complete compliance with all statutory requirements
prior to the date of the finality of the award of backwages and separation pay.

Here, Condis failed to show that in 2007 it had closed its business and that it had complied with all the statutory requirements for the closure. All it
alleged was the execution of the Asset Purchase Agreement and the termination of the Service Agreement with EDI -but this does not mean, nor
was it argued to mean, that Condis had closed its business. In fact, Condis failed to submit any document which showed that in 2007, it had notified
the DOLE or its employees of the closure of its business and the reason for its closure. It also failed to show that Rogel was affected by this
purported closure of its business. There is therefore no basis for it to claim that Olympia Housing is authority for its liability to pay backwages and
separation pay to only up to 2007.

Allowances not included

As stated above, the LA's Decision awarding backwages became final and executory on March 30, 2012. The dispositive portion of the LA Decision
pertaining to backwages reads as follows:
xxxx
b. ordering respondents to pay complainant, jointly and severally, full backwages, computed from the date of his unlawful dismissal up to the
time of actual reinstatement, which as of the date of this decision amount to Php362,692.25[.][25]
The amount of P362,692.25 is broken down as follows:
BACKWAGES: 12/03/07-03/03/09 = 15 months
  a. Basic: P20,500.00 x 15 months 307,500.00  
  b. 13th Month Pay: P307,500.00/12 25,625.00  
  c. VL/SL: (15 days VL, 15 days SL per year  
  P788.46 x 2.5 days/month x 15 months) 29,567.25[26]  
The LA, however, in its Resolution dated August 3, 2013 granting Rogel's Motion for Issuance of Alias Writ of Execution, added the following
amounts which were not in the LA's Decision:
BACKWAGES FROM ILLEGAL SUSPENSION: 20,500.00  
11/05/07- 12/02/07  
   
HOTEL/LODGING ALLOWANCE: 11/05/07- 8/3/13  
- P6,779.90 x 69 months 467,813.10  
   
MEAL ALLOWANCE: 11/05/07-8/3/13: P4,111.33 283,681.77  
   
MONTHLY INCENTIVE OF P2,000.00: 11105/07-
138,000.00[27]  
08/03/13
The foregoing amounts should not be included in computing Rogel's backwages and separation pay given that the decision of the LA awarding
backwages had already become final and executory; thus triggering the rule on immutability of judgment. As the Court held in Bani:
As a rule, "a final judgment may no longer be altered, amended or modified, even if the alteration, amendment or modification is meant to correct
what is perceived to be an erroneous conclusion of fact or law and regardless of what court, be it the highest Court of the land, rendered it. Any
attempt on the part of the x x x entities charged with the execution of a final judgment to insert, change or add matters not clearly contemplated in the
dispositive portion violates the rule on immutability of judgments." x x x[28]
From the Decision of the LA that became final and executory on March 30, 2012 (G.R. No. 196038), the computation of the backwages of Rogel is
composed of his basic pay, 13th month pay, and monetized vacation and sick leaves. Having attained finality, the LA, during execution proceedings,
cannot add the hotel and meal allowances and the monthly incentive to the computation. To be sure, Rogel had an opportunity to present evidence
on these during the Illegal Dismissal Case and he should have presented them there. Having failed to do so, he cannot claim, and the LA or even the
Court cannot add, these items, which were not contemplated in the dispositive portion of the LA's March 3, 2009 Decision. The CA therefore erred in
affirming the LA's computation of backwages and separation pay.

Finally, consistent with the Court's ruling in Bani, Condis is likewise liable to pay legal interest at the rate of six percent (6%) per annum from the
finality of this Decision until full satisfaction. The inclusion of interest is not barred by the principle of immutability of judgment as it is compensatory
interest arising from the final judgment.[29]

WHEREFORE, premises considered, the Petition for Review is hereby PARTLY GRANTED. The Decision of the Court of Appeals dated March 17,
2016 and Resolution dated January 10, 2017 are hereby AFFIRMED with MODIFICATIONS. As modified, petitioner Consolidated Distillers of the
Far East, Inc. is ORDERED to pay respondent Rogel N. Zaragoza the following amounts as computed in the Labor Arbiter's Decision dated March 3,
2009:
(a) backwages from the date he was illegally dismissed on November 20, 2007 until the finality of this Decision; and

(b) separation pay computed from April 18, 1994, the first day of Rogel's employment, until the finality of this Decision, at the rate of one (1) month
salary for every year of service.
The sum of P454,986.98 previously received by Rogel N. Zaragoza by virtue of the release order of the Labor Arbiter must be deducted from the
foregoing awards.

Further, petitioner Consolidated Distillers of the Far East, Inc. is ORDERED to pay respondent Rogel N. Zaragoza legal interest of six percent
(6%) per annum of the foregoing monetary awards computed from the finality of this Decision until full satisfaction.

The Labor Arbiter is hereby ORDERED to make another recomputation according to the above directives.

SO ORDERED.