Republic of the Philippines

SUPREME COURT
Baguio City

FIRST DIVISION

G.R. No. 192998 April 2, 2014

BERNARD A. TENAZAS, JAIME M. FRANCISCO and ISIDRO G. ENDRACA, Petitioners,

vs.
R. VILLEGAS TAXI TRANSPORT and ROMUALDO VILLEGAS, Respondents.

DECISION

REYES, J.:

This is a petition for review on certiorari1 filed under Rule 45 of the Rules of Court, assailing the
Decision2 dated March 11, 2010 and Resolution3 dated June 28, 2010 of the Court of Appeals (CA) in
CA-G.R. SP No. 111150, which affirmed with modification the Decision4 dated June 23, 2009 of the
National Labor Relations Commission (NLRC) in NLRC LAC Case No. 07-002648-08.

The Antecedent Facts

On July 4, 2007, Bernard A. Tenazas (Tenazas) and Jaime M. Francisco (Francisco) filed a
complaint for illegal dismissal against R. Villegas Taxi Transport and/or Romualdo Villegas
(Romualdo) and Andy Villegas (Andy) (respondents). At that time, a similar case had already been
filed by Isidro G. Endraca (Endraca) against the same respondents. The two (2) cases were
subsequently consolidated.5

In their position paper,6 Tenazas, Francisco and Endraca (petitioners) alleged that they were hired
and dismissed by the respondents on the following dates:

Name Date of Hiring Date of Dismissal Salary

Bernard A. Tenazas 10/1997 07/03/07 Boundary System

Jaime M. Francisco 04/10/04 06/04/07 Boundary System
Isidro G. Endraca 04/2000 03/06/06 Boundary System7

Relaying the circumstances of his dismissal, Tenazas alleged that on July 1, 2007, the taxi unit
assigned to him was sideswiped by another vehicle, causing a dent on the left fender near the driver
seat. The cost of repair for the damage was estimated at P500.00. Upon reporting the incident to the
company, he was scolded by respondents Romualdo and Andy and was told to leave the garage for
he is already fired. He was even threatened with physical harm should he ever be seen in the
companys premises again. Despite the warning, Tenazas reported for work on the following day but
was told that he can no longer drive any of the companys units as he is already fired.8

Francisco, on the other hand, averred that his dismissal was brought about by the companys
unfounded suspicion that he was organizing a labor union. He was instantaneously terminated,
without the benefit of procedural due process, on June 4, 2007.9
Endraca, for his part, alleged that his dismissal was instigated by an occasion when he fell short of
the required boundary for his taxi unit. He related that before he was dismissed, he brought his taxi
unit to an auto shop for an urgent repair. He was charged the amount of P700.00 for the repair
services and the replacement parts. As a result, he was not able to meet his boundary for the day.
Upon returning to the company garage and informing the management of the incident, his drivers
license was confiscated and was told to settle the deficiency in his boundary first before his license
will be returned to him. He was no longer allowed to drive a taxi unit despite his persistent pleas.10

For their part, the respondents admitted that Tenazas and Endraca were employees of the company,
the former being a regular driver and the latter a spare driver. The respondents, however, denied
that Francisco was an employee of the company or that he was able to drive one of the companys
units at any point in time.11

The respondents further alleged that Tenazas was never terminated by the company. They claimed
that on July 3, 2007, Tenazas went to the company garage to get his taxi unit but was informed that
it is due for overhaul because of some mechanical defects reported by the other driver who takes
turns with him in using the same. He was thus advised to wait for further notice from the company if
his unit has already been fixed. On July 8, 2007, however, upon being informed that his unit is ready
for release, Tenazas failed to report back to work for no apparent reason.12

As regards Endraca, the respondents alleged that they hired him as a spare driver in February 2001.
They allow him to drive a taxi unit whenever their regular driver will not be able to report for work. In
July 2003, however, Endraca stopped reporting for work without informing the company of his
reason. Subsequently, the respondents learned that a complaint for illegal dismissal was filed by
Endraca against them. They strongly maintained, however, that they could never have terminated
Endraca in March 2006 since he already stopped reporting for work as early as July 2003. Even
then, they expressed willingness to accommodate Endraca should he wish to work as a spare driver
for the company again since he was never really dismissed from employment anyway.13

On May 29, 2008, the petitioners, by registered mail, filed a Motion to Admit Additional
Evidence.14 They alleged that after diligent efforts, they were able to discover new pieces of evidence
that will substantiate the allegations in their position paper. Attached with the motion are the
following: (a) Joint Affidavit of the petitioners;15 (2) Affidavit of Good Faith of Aloney Rivera, a co-
driver;16 (3) pictures of the petitioners wearing company shirts;17 and (4) Tenazas
Certification/Record of Social Security System (SSS) contributions.18

The Ruling of the Labor Arbiter

On May 30, 2008, the Labor Arbiter (LA) rendered a Decision,19 which pertinently states, thus:

In the case of complainant Jaime Francisco, respondents categorically denied the existence of an
employer-employee relationship. In this situation, the burden of proof shifts to the complainant to
prove the existence of a regular employment. Complainant Francisco failed to present evidence of
regular employment available to all regular employees, such as an employment contract, company
ID, SSS, withholding tax certificates, SSS membership and the like.

In the case of complainant Isidro Endraca, respondents claim that he was only an extra driver who
stopped reporting to queue for available taxi units which he could drive. In fact, respondents offered
him in their Position Paper on record, immediate reinstatement as extra taxi driver which offer he
refused.
In case of Bernard Tenazas, he was told to wait while his taxi was under repair but he did not report
for work after the taxi was repaired. Respondents[,] in their Position Paper, on record likewise,
offered him immediate reinstatement, which offer he refused.

We must bear in mind that the complaint herein is one of actual dismissal. But there was no formal
investigations, no show cause memos, suspension memos or termination memos were never
issued. Otherwise stated, there is no proof of overt act of dismissal committed by herein
respondents.

We are therefore constrained to rule that there was no illegal dismissal in the case at bar.

The situations contemplated by law for entitlement to separation pay does [sic] not apply.

WHEREFORE, premises considered, instant consolidated complaints are hereby dismissed for lack
of merit.

SO ORDERED.20

The Ruling of the NLRC

Unyielding, the petitioners appealed the decision of the LA to the NLRC. Subsequently, on June 23,
2009, the NLRC rendered a Decision,21 reversing the appealed decision of the LA, holding that the
additional pieces of evidence belatedly submitted by the petitioners sufficed to establish the
existence of employer-employee relationship and their illegal dismissal. It held, thus:

In the challenged decision, the Labor Arbiter found that it cannot be said that the complainants were
illegally dismissed, there being no showing, in the first place, that the respondent [sic] terminated
their services. A portion thereof reads:

"We must bear in mind that the complaint herein is one of actual dismissal. But there were no formal
investigations, no show cause memos, suspension memos or termination memos were never
issued. Otherwise stated, there is no proof of overt act of dismissal committed by herein
respondents.

We are therefore constrained to rule that there was no illegal dismissal in the case at bar."

Issue: [W]hether or not the complainants were illegally dismissed from employment.

It is possible that the complainants Motion to Admit Additional Evidence did not reach the Labor
Arbiters attention because he had drafted the challenged decision even before they submitted it,
and thereafter, his staff attended only to clerical matters, and failed to bring the motion in question to
his attention. It is now up to this Commission to consider the complainants additional evidence.
Anyway, if this Commission must consider evidence submitted for the first time on appeal (Andaya
vs. NLRC, G.R. No. 157371, July 15, 2005), much more so must it consider evidence that was
simply overlooked by the Labor Arbiter.

Among the additional pieces of evidence submitted by the complainants are the following: (1) joint
affidavit (records, p. 51-52) of the three (3) complainants; (2) affidavit (records, p. 53) of Aloney
Rivera y Aldo; and (3) three (3) pictures (records, p. 54) referred to by the complainant in their joint
affidavit showing them wearing t-shirts bearing the name and logo of the respondents company.
 xxxx

WHEREFORE, the decision appealed from is hereby REVERSED. Respondent Rom[u]aldo Villegas
doing business under the name and style Villegas Taxi Transport is hereby ordered to pay the
complainants the following (1) full backwages from the date of their dismissal (July 3, 2007 for
Tena[z]as, June 4, 2004 for Francisco, and March 6, 2006 for Endraca[)] up to the date of the finality
of this decision[;] (2) separation pay equivalent to one month for every year of service; and (3)
attorneys fees equivalent to ten percent (10%) of the total judgment awards.

SO ORDERED.22

On July 24, 2009, the respondents filed a motion for reconsideration but the NLRC denied the same
in its Resolution23 dated September 23, 2009.

The Ruling of the CA

Unperturbed, the respondents filed a petition for certiorari with the CA. On March 11, 2010, the CA
rendered a Decision,24 affirming with modification the Decision dated June 23, 2009 of the NLRC.
The CA agreed with the NLRCs finding that Tenazas and Endraca were employees of the company,
but ruled otherwise in the case of Francisco for failing to establish his relationship with the company.
It also deleted the award of separation pay and ordered for reinstatement of Tenazas and Endraca.
The pertinent portions of the decision read as follows:

At the outset, We declare that respondent Francisco failed to prove that an employer-employee
relationship exists between him and R. Transport. If there is no employer-employee relationship in
the first place, the duty of R. Transport to adhere to the labor standards provisions of the Labor Code
with respect to Francisco is questionable.

xxxx

Although substantial evidence is not a function of quantity but rather of quality, the peculiar
environmental circumstances of the instant case demand that something more should have been
proffered. Had there been other proofs of employment, such as Franciscos inclusion in R.R.

Transports payroll, this Court would have affirmed the finding of employer-employee
relationship. The NLRC, therefore, committed grievous error in ordering R. Transport to answer for
1wphi 1

Franciscos claims.

We now tackle R. Transports petition with respect to Tenazas and Endraca, who are both admitted
to be R. Transports employees. In its petition, R. Transport puts forth the theory that it did not
terminate the services of respondents but that the latter deliberately abandoned their work. We
cannot subscribe to this theory.

xxxx

Considering that the complaints for illegal dismissal were filed soon after the alleged dates of
dismissal, it cannot be inferred that respondents Tenazas and Endraca intended to abandon their
employment. The complainants for dismissal are, in themselves, pleas for the continuance of
employment. They are incompatible with the allegation of abandonment. x x x.
For R. Transports failure to discharge the burden of proving that the dismissal of respondents
Tenazas and Endraca was for a just cause, We are constrained to uphold the NLRCs conclusion
that their dismissal was not justified and that they are entitled to back wages. Because they were
illegally dismissed, private respondents Tenazas and Endraca are entitled to reinstatement and back
wages x x x.

xxxx

However, R. Transport is correct in its contention that separation pay should not be awarded
because reinstatement is still possible and has been offered. It is well[-]settled that separation pay is
granted only in instances where reinstatement is no longer feasible or appropriate, which is not the
case here.

xxxx

WHEREFORE, the Decision of the National Labor Relations Commission dated 23 June 2009, in
NLRC LAC Case No. 07-002648-08, and its Resolution dated 23 September 2009 denying
reconsideration thereof are AFFIRMED with MODIFICATION in that the award of Jaime Franciscos
claims is DELETED. The separation pay granted in favor of Bernard Tenazas and Isidro Endraca is,
likewise, DELETED and their reinstatement is ordered instead.

SO ORDERED.25 (Citations omitted)

On March 19, 2010, the petitioners filed a motion for reconsideration but the same was denied by
the CA in its Resolution26 dated June 28, 2010.

Undeterred, the petitioners filed the instant petition for review on certiorari before this Court on July
15, 2010.

The Ruling of this Court

The petition lacks merit.

Pivotal to the resolution of the instant case is the determination of the existence of employer-
employee relationship and whether there was an illegal dismissal. Remarkably, the LA, NLRC and
the CA had varying assessment on the matters at hand. The LA believed that, with the admission of
the respondents, there is no longer any question regarding the status of both Tenazas and Endraca
being employees of the company. However, he ruled that the same conclusion does not hold with
respect to Francisco whom the respondents denied to have ever employed or known. With the
respondents denial, the burden of proof shifts to Francisco to establish his regular employment.
Unfortunately, the LA found that Francisco failed to present sufficient evidence to prove regular
employment such as company ID, SSS membership, withholding tax certificates or similar articles.
Thus, he was not considered an employee of the company. Even then, the LA held that Tenazas
and Endraca could not have been illegally dismissed since there was no overt act of dismissal
committed by the respondents.27

On appeal, the NLRC reversed the ruling of the LA and ruled that the petitioners were all employees
of the company. The NLRC premised its conclusion on the additional pieces of evidence belatedly
submitted by the petitioners, which it supposed, have been overlooked by the LA owing to the time
when it was received by the said office. It opined that the said pieces of evidence are sufficient to
establish the circumstances of their illegal termination. In particular, it noted that in the affidavit of the
petitioners, there were allegations about the companys practice of not issuing employment records
and this was not rebutted by the respondents. It underscored that in a situation where doubt exists
between evidence presented by the employer and the employee, the scales of justice must be tilted
in favor of the employee. It awarded the petitioners with: (1) full backwages from the date of their
dismissal up to the finality of the decision; (2) separation pay equivalent to one month of salary for
every year of service; and (3) attorneys fees.

On petition for certiorari, the CA affirmed with modification the decision of the NLRC, holding that
there was indeed an illegal dismissal on the part of Tenazas and Endraca but not with respect to
Francisco who failed to present substantial evidence, proving that he was an employee of the
respondents. The CA likewise dismissed the respondents claim that Tenazas and Endraca
abandoned their work, asseverating that immediate filing of a complaint for illegal dismissal and
persistent pleas for continuance of employment are incompatible with abandonment. It also deleted
the NLRCs award of separation pay and instead ordered that Tenazas and Endraca be reinstated.28

"Well-settled is the rule that the jurisdiction of this Court in a petition for review on certiorari under
Rule 45 of the Revised Rules of Court is limited to reviewing only 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."29 The Court finds that none of the
mentioned circumstances is present in this case.

In reviewing the decision of the NLRC, the CA found that no substantial evidence was presented to
support the conclusion that Francisco was an employee of the respondents and accordingly modified
the NLRC decision. It stressed that with the respondents denial of employer-employee relationship,
it behooved Francisco to present substantial evidence to prove that he is an employee before any
question on the legality of his supposed dismissal becomes appropriate for discussion. Francisco,
however, did not offer evidence to substantiate his claim of employment with the respondents. Short
of the required quantum of proof, the CA correctly ruled that the NLRCs finding of illegal dismissal
and the monetary awards which necessarily follow such ruling lacked factual and legal basis and
must therefore be deleted.

The action of the CA finds support in Anonas Construction and Industrial Supply Corp., et al. v.
NLRC, et al.,30where the Court reiterated:

[J]udicial review of decisions of the NLRC via petition for certiorari under Rule 65, as a general rule,
is confined only to issues of lack or excess of jurisdiction and grave abuse of discretion on the part of
the NLRC. The CA does not assess and weigh the sufficiency of evidence upon which the LA and
the NLRC based their conclusions. The issue is limited to the determination of whether or not the
NLRC acted without or in excess of its jurisdiction, or with grave abuse of discretion in rendering the
resolution, except if the findings of the NLRC are not supported by substantial evidence.31 (Citation
omitted and emphasis ours)

It is an oft-repeated rule that in labor cases, as in other administrative and quasi-judicial

proceedings, "the quantum of proof necessary is substantial evidence, or such amount of relevant
evidence which a reasonable mind might accept as adequate to justify a conclusion."32 "[T]he burden
of proof rests upon the party who asserts the affirmative of an issue."33 Corollarily, as Francisco was
claiming to be an employee of the respondents, it is incumbent upon him to proffer evidence to prove
the existence of said relationship.

"[I]n determining the presence or absence of an employer-employee relationship, the Court has
consistently looked for the following incidents, to wit: (a) the selection and engagement of the
employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employers power to
control the employee on the means and methods by which the work is accomplished. The last
element, the so-called control test, is the most important element."34

There is no hard and fast rule designed to establish the aforesaid elements. Any competent and
relevant evidence to prove the relationship may be admitted. Identification cards, cash vouchers,
social security registration, appointment letters or employment contracts, payrolls, organization
charts, and personnel lists, serve as evidence of employee status.35

In this case, however, Francisco failed to present any proof substantial enough to establish his
relationship with the respondents. He failed to present documentary evidence like attendance
logbook, payroll, SSS record or any personnel file that could somehow depict his status as an
employee. Anent his claim that he was not issued with employment records, he could have, at least,
produced his social security records which state his contributions, name and address of his
employer, as his co-petitioner Tenazas did. He could have also presented testimonial evidence
showing the respondents exercise of control over the means and methods by which he undertakes
his work. This is imperative in light of the respondents denial of his employment and the claim of
another taxi operator, Emmanuel Villegas (Emmanuel), that he was his employer. Specifically, in his
Affidavit,36 Emmanuel alleged that Francisco was employed as a spare driver in his taxi garage from
January 2006 to December 2006, a fact that the latter failed to deny or question in any of the
pleadings attached to the records of this case. The utter lack of evidence is fatal to Franciscos case
especially in cases like his present predicament when the law has been very lenient in not requiring
any particular form of evidence or manner of proving the presence of employer-employee
relationship.

In Opulencia Ice Plant and Storage v. NLRC,37 this Court emphasized, thus:

No particular form of evidence is required to prove the existence of an employer-employee

relationship. Any competent and relevant evidence to prove the relationship may be admitted. For, if
only documentary evidence would be required to show that relationship, no scheming employer
would ever be brought before the bar of justice, as no employer would wish to come out with any
trace of the illegality he has authored considering that it should take much weightier proof to
invalidate a written instrument.38

Here, Francisco simply relied on his allegation that he was an employee of the company without any
other evidence supporting his claim. Unfortunately for him, a mere allegation in the position paper is
not tantamount to evidence.39 Bereft of any evidence, the CA correctly ruled that Francisco could not
be considered an employee of the respondents.

The CAs order of reinstatement of Tenazas and Endraca, instead of the payment of separation pay,
is also well in accordance with prevailing jurisprudence. In Macasero v. Southern Industrial Gases
Philippines,40 the Court reiterated, thus:

[A]n illegally dismissed employee is entitled to two reliefs: backwages and reinstatement. The two
1wphi1

reliefs provided are separate and distinct. In instances where reinstatement is no longer feasible
because of strained relations between the employee and the employer, separation pay is granted. In
effect, an illegally dismissed employee is entitled to either reinstatement, if viable, or separation pay
if reinstatement is no longer viable, and backwages.

The normal consequences of respondents illegal dismissal, then, are reinstatement without loss of
seniority rights, and payment of backwages computed from the time compensation was withheld up
to the date of actual reinstatement. Where reinstatement is no longer viable as an option, separation
pay equivalent to one (1) month salary for every year of service should be awarded as an
alternative. The payment of separation pay is in addition to payment of backwages.41 (Emphasis
supplied)

Clearly, it is only when reinstatement is no longer feasible that the payment of separation pay is
ordered in lieu thereof. For instance, if reinstatement would only exacerbate the tension and strained
relations between the parties, or where the relationship between the employer and the employee has
been unduly strained by reason of their irreconcilable differences, it would be more prudent to order
payment of separation pay instead of reinstatement.42

This doctrine of strained relations, however, should not be used recklessly or applied loosely43 nor be
based on impression alone. "It bears to stress that reinstatement is the rule and, for the exception of
strained relations to apply, it should be proved that it is likely that if reinstated, an atmosphere of
antipathy and antagonism would be generated as to adversely affect the efficiency and productivity
of the employee concerned."44

Moreover, the existence of strained relations, it must be emphasized, is a question of fact. In Golden
Ace Builders v. Talde,45 the Court underscored:

Strained relations must be demonstrated as a fact, however, to be adequately supported by

evidencesubstantial evidence to show that the relationship between the employer and the
employee is indeed strained as a necessary consequence of the judicial controversy.46 (Citations
omitted and emphasis ours)

After a perusal of the NLRC decision, this Court failed to find the factual basis of the award of
separation pay to the petitioners. The NLRC decision did not state the facts which demonstrate that
reinstatement is no longer a feasible option that could have justified the alternative relief of granting
separation pay instead.

The petitioners themselves likewise overlooked to allege circumstances which may have rendered
their reinstatement unlikely or unwise and even prayed for reinstatement alongside the payment of
separation pay in their position paper.47 A bare claim of strained relations by reason of termination is
insufficient to warrant the granting of separation pay. Likewise, the filing of the complaint by the
petitioners does not necessarily translate to strained relations between the parties. As a rule, no
strained relations should arise from a valid and legal act asserting ones right.48 Although litigation
may also engender a certain degree of hostility, the understandable strain in the parties relation
would not necessarily rule out reinstatement which would, otherwise, become the rule rather the
exception in illegal dismissal cases.49 Thus, it was a prudent call for the CA to delete the award of
separation pay and order for reinstatement instead, in accordance with the general rule stated in
Article 27950 of the Labor Code.

Finally, the Court finds the computation of the petitioners' backwages at the rate of P800.00 daily
reasonable and just under the circumstances. The said rate is consistent with the ruling of this Court
in Hyatt Taxi Services, Inc. v. Catinoy,51 which dealt with the same matter.

WHEREFORE, in view of the foregoing disquisition, the petition for review on certiorari is DENIED.
The Decision dated March 11, 2010 and Resolution dated June 28, 2010 of the Court of Appeals in
CA-G.R. SP No. 111150 are AFFIRMED.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 119268 February 23, 2000

ANGEL JARDIN, DEMETRIO CALAGOS, URBANO MARCOS, ROSENDO MARCOS, LUIS DE

LOS ANGELES, JOEL ORDENIZA and AMADO CENTENO, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION (NLRC) and GOODMAN TAXI (PHILJAMA
INTERNATIONAL, INC.) respondents.

QUISUMBING, J.:

This special civil action for certiorari seeks to annul the decision1 of public respondent promulgated
on October 28, 1994, in NLRC NCR CA No. 003883-92, and its resolution2 dated December 13,
1994 which denied petitioners motion for reconsideration.

Petitioners were drivers of private respondent, Philjama International Inc., a domestic corporation
engaged in the operation of "Goodman Taxi." Petitioners used to drive private respondent's taxicabs
every other day on a 24-hour work schedule under the boundary system. Under this arrangement,
the petitioners earned an average of P400.00 daily. Nevertheless, private respondent admittedly
regularly deducts from petitioners, daily earnings the amount of P30.00 supposedly for the washing
of the taxi units. Believing that the deduction is illegal, petitioners decided to form a labor union to
protect their rights and interests.

Upon learning about the plan of petitioners, private respondent refused to let petitioners drive their
taxicabs when they reported for work on August 6, 1991, and on succeeding days. Petitioners
suspected that they were singled out because they were the leaders and active members of the
proposed union. Aggrieved, petitioners filed with the labor arbiter a complaint against private
respondent for unfair labor practice, illegal dismissal and illegal deduction of washing fees. In a
decision3 dated August 31, 1992, the labor arbiter dismissed said complaint for lack of merit.

On appeal, the NLRC (public respondent herein), in a decision dated April 28, 1994, reversed and
set aside the judgment of the labor arbiter. The labor tribunal declared that petitioners are
employees of private respondent, and, as such, their dismissal must be for just cause and after due
process. It disposed of the case as follows:

WHEREFORE, in view of all the foregoing considerations, the decision of the Labor Arbiter
appealed from is hereby SET ASIDE and another one entered:

1. Declaring the respondent company guilty of illegal dismissal and accordingly it is directed
to reinstate the complainants, namely, Alberto A. Gonzales, Joel T. Morato, Gavino
Panahon, Demetrio L. Calagos, Sonny M. Lustado, Romeo Q. Clariza, Luis de los Angeles,
Amado Centino, Angel Jardin, Rosendo Marcos, Urbano Marcos, Jr., and Joel Ordeniza, to
their former positions without loss of seniority and other privileges appertaining thereto; to
pay the complainants full backwages and other benefits, less earnings elsewhere, and to
reimburse the drivers the amount paid as washing charges; and
 2. Dismissing the charge of unfair [labor] practice for insufficiency of evidence.

SO ORDERED.4

Private respondent's first motion for reconsideration was denied. Remaining hopeful, private
respondent filed another motion for reconsideration. This time, public respondent, in its
decision5 dated October 28, 1994, granted aforesaid second motion for reconsideration. It ruled that
it lacks jurisdiction over the case as petitioners and private respondent have no employer-employee
relationship. It held that the relationship of the parties is leasehold which is covered by the Civil Code
rather than the Labor Code, and disposed of the case as follows:

VIEWED IN THE LIGHT OF ALL THE FOREGOING, the Motion under reconsideration is
hereby given due course.

Accordingly, the Resolution of August 10, 1994, and the Decision of April 28, 1994 are
hereby SET ASIDE. The Decision of the Labor Arbiter subject of the appeal is likewise SET
ASIDE and a NEW ONE ENTERED dismissing the complaint for lack of jurisdiction.

No costs.

SO ORDERED.6

Expectedly, petitioners sought reconsideration of the labor tribunal's latest decision which was
denied. Hence, the instant petition.

In this recourse, petitioners allege that public respondent acted without or in excess of jurisdiction, or
with grave abuse of discretion in rendering the assailed decision, arguing that:

THE NLRC HAS NO JURISDICTION TO ENTERTAIN RESPONDENT'S SECOND MOTION FOR

RECONSIDERATION WHICH IS ADMITTEDLY A PLEADING PROHIBITED UNDER THE NLRC
RULES, AND TO GRANT THE SAME ON GROUNDS NOT EVEN INVOKED THEREIN.

II

THE EXISTENCE OF AN EMPLOYER-EMPLOYEE RELATIONSHIP BETWEEN THE PARTIES IS

ALREADY A SETTLED ISSUE CONSTITUTING RES JUDICATA, WHICH THE NLRC HAS NO
MORE JURISDICTION TO REVERSE, ALTER OR MODIFY.

III

IN ANY CASE, EXISTING JURISPRUDENCE ON THE MATTER SUPPORTS THE VIEW THAT
PETITIONERS-TAXI DRIVERS ARE EMPLOYEES OF RESPONDENT TAXI COMPANY.7

The petition is impressed with merit.

The phrase "grave abuse of discretion amounting to lack or excess of jurisdiction" has settled
meaning in the jurisprudence of procedure. It means such capricious and whimsical exercise of
judgment by the tribunal exercising judicial or quasi-judicial power as to amount to lack of power.8 In
labor cases, this Court has declared in several instances that disregarding rules it is bound to
observe constitutes grave abuse of discretion on the part of labor tribunal.

In Garcia vs. NLRC,9 private respondent therein, after receiving a copy of the labor arbiter's decision,
wrote the labor arbiter who rendered the decision and expressed dismay over the judgment. Neither
notice of appeal was filed nor cash or surety bond was posted by private respondent. Nevertheless,
the labor tribunal took cognizance of the letter from private respondent and treated said letter as
private respondent's appeal. In a certiorari action before this Court, we ruled that the labor tribunal
acted with grave abuse of discretion in treating a mere letter from private respondent as private
respondent's appeal in clear violation of the rules on appeal prescribed under Section 3(a), Rule VI
of the New Rules of Procedure of NLRC.

In Philippine Airlines Inc. vs. NLRC,10 we held that the labor arbiter committed grave abuse of
discretion when he failed to resolve immediately by written order a motion to dismiss on the ground
of lack of jurisdiction and the supplemental motion to dismiss as mandated by Section 15 of Rule V
of the New Rules of Procedure of the NLRC.

In Unicane Workers Union-CLUP vs. NLRC,11 we held that the NLRC gravely abused its discretion
by allowing and deciding an appeal without an appeal bond having been filed as required under
Article 223 of the Labor Code.

In Maebo vs. NLRC,12 we declared that the labor arbiter gravely abused its discretion in
disregarding the rule governing position papers. In this case, the parties have already filed their
position papers and even agreed to consider the case submitted for decision, yet the labor arbiter
still admitted a supplemental position paper and memorandum, and by taking into consideration, as
basis for his decision, the alleged facts adduced therein and the documents attached thereto.

In Gesulgon vs. NLRC,13 we held that public respondent gravely abused its discretion in treating the
motion to set aside judgment and writ of execution as a petition for relief of judgment. In doing so,
public respondent had, without sufficient basis, extended the reglementary period for filing petition
for relief from judgment contrary to prevailing rule and case law.

In this case before us, private respondent exhausted administrative remedy available to it by seeking
reconsideration of public respondent's decision dated April 28, 1994, which public respondent
denied. With this motion for reconsideration, the labor tribunal had ample opportunity to rectify errors
or mistakes it may have committed before resort to courts of justice can be had.14 Thus, when private
respondent filed a second motion for reconsideration, public respondent should have forthwith
denied it in accordance with Rule 7, Section 14 of its New Rules of Procedure which allows only one
motion for reconsideration from the same party, thus:

Sec. 14. Motions for Reconsideration. Motions for reconsideration of any order, resolution
or decision of the Commission shall not be entertained except when based on palpable or
patent errors, provided that the motion is under oath and filed within ten (10) calendar days
from receipt of the order, resolution or decision with proof of service that a copy of the same
has been furnished within the reglementary period the adverse party and provided further,
that only one such motion from the same party shall be entertained. [Emphasis supplied]

The rationale for allowing only one motion for reconsideration from the same party is to assist the
parties in obtaining an expeditious and inexpensive settlement of labor cases. For obvious reasons,
delays cannot be countenanced in the resolution of labor disputes. The dispute may involve no less
than the livelihood of an employee and that of his loved ones who are dependent upon him for food,
shelter, clothing, medicine, and education. It may as well involve the survival of a business or an
industry.15

As correctly pointed out by petitioner, the second motion for reconsideration filed by private
respondent is indubitably a prohibited pleading16 which should have not been entertained at all.
Public respondent cannot just disregard its own rules on the pretext of "satisfying the ends of
justice",17 especially when its disposition of a legal controversy ran afoul with a clear and long
standing jurisprudence in this jurisdiction as elucidated in the subsequent discussion. Clearly,
disregarding a settled legal doctrine enunciated by this Court is not a way of rectifying an error or
mistake. In our view, public respondent gravely abused its discretion in taking cognizance and
granting private respondent's second motion for reconsideration as it wrecks the orderly procedure in
seeking reliefs in labor cases.

But, there is another compelling reason why we cannot leave untouched the flip-flopping decisions of
the public respondent. As mentioned earlier, its October 28, 1994 judgment is not in accord with the
applicable decisions of this Court. The labor tribunal reasoned out as follows:

On the issue of whether or not employer-employee relationship exists, admitted is the fact
that complainants are taxi drivers purely on the "boundary system". Under this system the
driver takes out his unit and pays the owner/operator a fee commonly called "boundary" for
the use of the unit. Now, in the determination the existence of employer-employee
relationship, the Supreme Court in the case of Sara, et al., vs. Agarrado, et al. (G.R. No.
73199, 26 October 1988) has applied the following four-fold test: "(1) the selection and
engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4)
the power of control the employees conduct."

"Among the four (4) requisites", the Supreme Court stresses that "control is deemed the
most important that the other requisites may even be disregarded". Under the control test, an
employer-employee relationship exists if the "employer" has reserved the right to control the
"employee" not only as to the result of the work done but also as to the means and methods
by which the same is to be accomplished. Otherwise, no such relationship exists. (Ibid.)

Applying the foregoing parameters to the case herein obtaining, it is clear that the
respondent does not pay the drivers, the complainants herein, their wages. Instead, the
drivers pay a certain fee for the use of the vehicle. On the matter of control, the drivers, once
they are out plying their trade, are free to choose whatever manner they conduct their trade
and are beyond the physical control of the owner/operator; they themselves determine the
amount of revenue they would want to earn in a day's driving; and, more significantly aside
from the fact that they pay for the gasoline they consume, they likewise shoulder the cost of
repairs on damages sustained by the vehicles they are driving.

Verily, all the foregoing attributes signify that the relationship of the parties is more of a
leasehold or one that is covered by a charter agreement under the Civil Code rather than the
Labor Code.18

The foregoing ratiocination goes against prevailing jurisprudence.

In a number of cases decided by this Court,19 we ruled that the relationship between jeepney
owners/operators on one hand and jeepney drivers on the other under the boundary system is that
of employer-employee and not of lessor-lessee. We explained that in the lease of chattels, the lessor
loses complete control over the chattel leased although the lessee cannot be reckless in the use
thereof, otherwise he would be responsible for the damages to the lessor. In the case of jeepney
owners/operators and jeepney drivers, the former exercise supervision and control over the latter.
The management of the business is in the owner's hands. The owner as holder of the certificate of
public convenience must see to it that the driver follows the route prescribed by the franchising
authority and the rules promulgated as regards its operation. Now, the fact that the drivers do not
receive fixed wages but get only that in excess of the so-called "boundary" they pay to the
owner/operator is not sufficient to withdraw the relationship between them from that of employer and
employee. We have applied by analogy the abovestated doctrine to the relationships between bus
owner/operator and bus conductor,20 auto-calesa owner/operator and driver,21 and recently between
taxi owners/operators and taxi drivers.22 Hence, petitioners are undoubtedly employees of private
respondent because as taxi drivers they perform activities which are usually necessary or desirable
in the usual business or trade of their employer.

As consistently held by this Court, termination of employment must be effected in accordance with
law. The just and authorized causes for termination of employment are enumerated under Articles
282, 283 and 284 of the Labor Code. The requirement of notice and hearing is set-out in Article 277
(b) of the said Code. Hence, petitioners, being employees of private respondent, can be dismissed
only for just and authorized cause, and after affording them notice and hearing prior to termination.
In the instant case, private respondent had no valid cause to terminate the employment of
petitioners. Neither were there two (2) written notices sent by private respondent informing each of
the petitioners that they had been dismissed from work. These lack of valid cause and failure on the
part of private respondent to comply with the twin-notice requirement underscored the illegality
surrounding petitioners' dismissal.

Under the law, 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.23 It must be emphasized, though, that
recent judicial pronouncements24 distinguish between employees illegally dismissed prior to the
effectivity of Republic Act No. 6715 on March 21, 1989, and those whose illegal dismissals were
effected after such date. Thus, employees illegally dismissed prior to March 21, 1989, are entitled to
backwages up to three (3) years without deduction or qualification, while those illegally dismissed
after that date are granted full backwages inclusive of allowances and other benefits or their
monetary equivalent from the time their actual compensation was withheld from them up to the time
of their actual reinstatement. The legislative policy behind Republic Act No. 6715 points to "full
backwages" as meaning exactly that, i.e., without deducting from backwages the earnings derived
elsewhere by the concerned employee during the period of his illegal dismissal. Considering that
petitioners were terminated from work on August 1, 1991, they are entitled to full backwages on the
basis of their last daily earnings.

With regard to the amount deducted daily by private respondent from petitioners for washing of the
taxi units, we view the same as not illegal in the context of the law. We note that after a tour of duty,
it is incumbent upon the driver to restore the unit he has driven to the same clean condition when he
took it out. Car washing after a tour of duty is indeed a practice in the taxi industry and is in fact
dictated by fair play.25 Hence, the drivers are not entitled to reimbursement of washing charges. 1wphi1.nt

WHEREFORE, the instant petition is GRANTED. The assailed DECISION of public respondent
dated October 28, 1994, is hereby SET ASIDE. The DECISION of public respondent dated April 28,
1994, and its RESOLUTION dated December 13, 1994, are hereby REINSTATED subject to
MODIFICATION. Private respondent is directed to reinstate petitioners to their positions held at the
time of the complained dismissal. Private respondent is likewise ordered to pay petitioners their full
backwages, to be computed from the date of dismissal until their actual reinstatement. However, the
order of public respondent that petitioners be reimbursed the amount paid as washing charges is
deleted. Costs against private respondents.
SO ORDERED.
August 2010 Philippine Supreme Court
Decisions on Labor Law and Procedure
Labor Law
Dismissal; abandonment. Time and again, the Supreme Court has held that abandonment is totally
inconsistent with the immediate filing of a complaint for illegal dismissal, more so if the same is
accompanied by a prayer for reinstatement. In the present case, however, petitioner filed his
complaint more than one year after his alleged termination from employment. Moreover, petitioner
did not ask for reinstatement in the complaint form, which he personally filled up and filed with the
NLRC. The prayer for reinstatement is made only in the Position Paper that was later prepared by
his counsel. This is an indication that petitioner never had the intention or desire to return to his
job.Elpidio Calipay vs. National Labor Relations Commission, et al., G.R. No. 166411, August 3, 2010.
Dismissal; burden of proof. In termination cases, the employer has the burden of proving, by
substantial evidence that the dismissal is for just cause. If the employer fails to discharge the burden
of proof, the dismissal is deemed illegal. In the present case, BCPI failed to discharge its burden
when it failed to present any evidence of the alleged fistfight, aside from a single statement, which
was refuted by statements made by other witnesses and was found to be incredible by both the
Labor Arbiter and the NLRC. Alex Gurango vs. Best Chemicals and Plastic, Inc., et al., G.R. No. 174593,
August 25, 2010.
Dismissal; burden of proof. The law mandates that the burden of proving the validity of the termination
of employment rests with the employer. Failure to discharge this evidentiary burden would
necessarily mean that the dismissal was not justified and, therefore, illegal. Unsubstantiated
suspicions, accusations, and conclusions of employers do not provide for legal justification for
dismissing employees. In case of doubt, such cases should be resolved in favor of labor, pursuant to
the social justice policy of labor laws and the Constitution. Century Canning Corporation, Ricardo T. Po,
Jr., et al. vs. Vicente Randy R. Ramil, G.R. No. 171630, August 8, 2010.
Dismissal; due process. In termination proceedings of employees, procedural due process consists of
the twin requirements of notice and hearing. The employer must furnish the employee with two
written notices before the termination of employment can be effected: (1) the first apprises the
employee of the particular acts or omissions for which his dismissal is sought; and (2) the second
informs the employee of the employers decision to dismiss him. The requirement of a hearing is
complied with as long as there was an opportunity to be heard, and not necessarily that an actual
hearing was conducted. Pharmacia and Upjohn, Inc., et al. vs. Ricardo P. Albayda, Jr., G.R. No. 172724,
August 23, 2010.
Dismissal; due process. The Labor Code recognizes the right to due process of all workers, without
distinction as to the cause of their termination, even if the cause was their supposed involvement in
strike-related violence. In the present case, PHIMCO sent a letter to the affected union
members/officers, directing them to explain within 24 hours why they should not be dismissed for the
illegal acts they committed during the strike; three days later, the union members/officers were
informed of their dismissal from employment. We do not find this company procedure to be sufficient
compliance with due process. It does not appear from the evidence that the union officers were
specifically informed of the charges against them. Also, the short interval of time between the first
and second notice shows that a mere token recognition of the due process requirements was made,
indicating the companys intent to dismiss the union members involved, without any meaningful
resort to the guarantees accorded them by law. PHIMCO Industries, Inc. vs. PHIMCO Industries Labor
Association (PILA), et al., G.R. No. 170830, August 11, 2010.
Dismissal; employees past infractions. A previous offense may be used as valid justification for
dismissal from work only if the past infractions are related to the subsequent offense upon which the
basis of termination is decreed. The respondents previous incidents of tardiness in reporting for
work were entirely separate and distinct from his latest alleged infraction of forgery. Hence, the same
could no longer be utilized as an added justification for his dismissal. Besides, respondent had
already been sanctioned for his prior infractions. To consider these offenses as justification for his
dismissal would be penalizing respondent twice for the same offense. Century Canning Corporation,
Ricardo T. Po, Jr., et al. vs. Vicente Randy R. Ramil, G.R. No. 171630, August 8, 2010.
Dismissal; feng shui; breach of trust and confidence. The Court finds that the complainants allegations
are more credible and that she was dismissed from her employment because the Feng Shui master
found that complainants Chinese Zodiac Sign was a mismatch to that of respondents. This is not a
just and valid cause for an employees dismissal.
In contrast, respondents pleadings and evidence suffer from several inconsistencies and the
affidavits presented by respondents only pertain to petty matters that are not sufficient to support
respondents alleged loss of trust and confidence. To be a valid cause for termination of
employment, the act or acts constituting breach of trust must have been done intentionally,
knowingly, and purposely; and they must be founded on clearly established facts. Wensha Spa Center,
inc. and/or Xu Zhi Jie ,vs. Loreta T. Yung,G.R. No. 185122, August 16, 2010.
Dismissal; gross negligence and loss of confidence. Gross negligence connotes want of care in the
performance of ones duties. Petitioners failure on 3 separate occasions to require clients to sign
the requisite documents constituted gross negligence. Furthermore, it has been held that if the
employees are cashiers, managers, supervisors, salesmen or other personnel occupying positions of
responsibility, the employers loss of trust and confidence in said employees may justify the
termination of their employment. As the Banks Personal Banking Manager, petitioners failure to
comply with basic banking policies and procedures were inimical to the interests of the bank, making
his dismissal based on loss of confidence justified. Jesus E. Dycoco, Jr.vs. Equitable PCI Bank (now
Banco de Oro), Rene Bunaventura and Siles Samalea, G.R. No. 188271, August 16, 2010.
Dismissal; loss of trust and confidence. Employers are allowed a wider latitude of discretion in
terminating the services of employees who perform functions which by their nature require the
employers full trust and confidence and the mere existence of basis for believing that the employee
has breached the trust of the employer is sufficient. However, this does not mean that the said basis
may be arbitrary and unfounded. Loss of trust and confidence, to be a valid cause for dismissal,
must be based on a willful breach of trust and founded on clearly established facts. The basis for the
dismissal must be clearly and convincingly established. It must rest on substantial grounds and not
on the employers arbitrariness, whim, caprice or suspicion; otherwise, the employee would eternally
remain at the mercy of the employer. Century Canning Corporation, Ricardo T. Po, Jr., et al. vs. Vicente
Randy R. Ramil, G.R. No. 171630, August 8, 2010.
Dismissal; probationary employment. Though the acts charged against de Castro took place when he
was still under probationary employment, the records show that de Castro was dismissed on the
ninth month of his employment with LBNI. By then, he was already a regular employee by operation
of law. As a regular employee, de Castro was entitled to security of tenure and his illegal dismissal
from LBNI justified the awards of separation pay, backwages, and damages Carlos De Castro vs.
Liberty Broadcasting Network, Inc. and Edgardo Quigue, G.R. No. 165153. August 25, 2010.
Dismissal; project employees; damages. Prior or advance notice of termination is not part of procedural
due process if the termination of a project employee is brought about by the completion of the
contract or phase thereof. This is because completion of the work or project automatically terminates
the employment, in which case, the employer is, under the law, only obliged to render a report to the
DOLE. Therefore, failing to give project employees advance notice of their termination is not a
violation of procedural due process and cannot be the basis for the payment of nominal
damages. D.M. Consunji, Inc. vs. Antonio Gobres, et al., G.R. No. 169170, August 8, 2010.
Dismissal; separation pay and backwages. The awards of separation pay and backwages are not
mutually exclusive and both may be given to the respondent. The normal consequences of a finding
that an employee has been illegally dismissed are, firstly, that the employee becomes entitled to
reinstatement to his former position without loss of seniority rights and, secondly, the payment of
backwages corresponding to the period from his illegal dismissal up to actual reinstatement. These
are two separate and distinct remedies granted to the employee and the inappropriateness or non-
availability of one does not carry with it the inappropriateness or non-availability of the other. Under
the doctrine of strained relations, the payment of separation pay has been considered an acceptable
alternative to reinstatement when the latter option is no longer desirable or viable. The grant of
separation pay is a proper substitute only for reinstatement; it cannot be an adequate substitute for
both reinstatement and backwages. Century Canning Corporation, Ricardo T. Po, Jr., et al. vs. Vicente
Randy R. Ramil, G.R. No. 171630, August 8, 2010.
Dismissal; serious misconduct. Misconduct is defined as 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. For serious misconduct to justify dismissal under the law, (a)
it must be serious, (b) must relate to the performance of the employees duties; and (c) must show
that the employee has become unfit to continue working for the employer.
It is noteworthy that prior to this incident, there had been several cases of theft and vandalism
involving both respondent companys property and personal belongings of other employees. In order
to address this issue of losses, respondent company issued two memoranda implementing an
intensive inspection procedure and reminding all employees that those who will be caught stealing
and performing acts of vandalism will be dealt with in accordance with the companys Code of
Conduct. Despite these reminders, complainant took the packing tape and was caught during the
routine inspection. All these circumstances point to the conclusion that it was not just an error of
judgment, but a deliberate act of theft of company property. Nagkakaisang Lakas ng Manggagawa sa
Keihin (NLMK-OLALIA-KMU) and Helen Valenzuela vs. Keihin Philippines Corporation, G.R. No. 171115,
August 9, 2010.
Dismissal; union security. In terminating the employment of an employee by enforcing the union
security clause, the employer needs to determine and prove that: (1) the union security clause is
applicable; (2) the union is requesting for the enforcement of the union security provision in the CBA;
and (3) there is sufficient evidence to support the decision of the union to expel the employee from
the union. These requisites constitute just cause for terminating an employee based on the union
security provision of the CBA.
The petitioner failed to satisfy the third requirement since nothing in the records would show that
respondents failed to maintain their membership in good standing in the union. Significantly,
petitioners act of dismissing respondents stemmed from the latters act of signing an authorization
letter to file a petition for certification election as they signed it outside the freedom period. The mere
signing of an authorization letter before the freedom period is not sufficient ground to terminate the
employment of respondents inasmuch as the petition itself was actually filed during the freedom
period. The court emphasizes anew that the employer is bound to exercise caution in terminating the
services of his employees especially so when it is made upon the request of a labor union pursuant
to the Collective Bargaining Agreement. Picop Resources Incorporated (PRI) vs. Anacleto L. Taeca, et
al., G.R. No. 160828, August 9, 2010.
Dimissal; use of illegal drugs. The law is clear that drug tests shall be performed only by authorized
drug testing centers. In this case, Sulpicio Lines failed to prove that S.M. Lazo Clinic is an accredited
drug testing center nor did it deny the complainants allegation that S.M. Lazo Clinic was not
accredited. Also, only a screening test was conducted to determine if the complainant was guilty of
using illegal drugs. Sulpicio Lines did not confirm the positive result of the screening test with a confirmatory
test as required by R.A. 9165. Hence, Sulpicio Lines failed to indubitably prove that Nacague was
guilty of using illegal drugs and failed to clearly show that it had a valid and legal cause for
terminating Nacagues employment. When the alleged valid cause for the termination of employment
is not clearly proven, as in this case, the law considers the matter a case of illegal dismissal. Jeffrey
Nacague vs. Sulpicio Lines, Inc., G.R. No. 172589, August 8, 2010.
Dismissal; validity. The company did not adduce any evidence to prove that Siazars dismissal had
been for a just or authorized cause, as in fact it had been its consistent stand that it did not terminate
him and that he quit on his own. But given the findings of the Court that the company had indeed
dismissed Siazar and that such dismissal has remained unexplained, there can be no other
conclusion but that the dismissal was illegal. Agricultural and Industrial Supplies Corporation, et al. vs.
Jueber P. Siazar, et al., G.R. No. 177970, August 25, 2010.
Due process; decision rendered without due process. The violation of a partys right to due process raises
a serious jurisdictional issue that cannot be glossed over or disregarded at will. Where the denial of
the fundamental right to due process is apparent, a decision rendered in disregard of that right is
void for lack of jurisdiction. This rule is equally true in quasi-judicial and administrative proceedings,
for the constitutional guarantee that no man shall be deprived of life, liberty, or property without due
process is unqualified by the type of proceedings (whether judicial or administrative) where he
stands to lose the same. Winston F. Garcia vs. Mario I. Molina, et al./Winston F. Garcia Vs. Mario I.
Molina, et al.,G.R. No. 157383/G.R. No. 174137, August 10, 2010.
Employee; evaluation and promotion. The fact that employees were re-classified from Job Grade Level
1 to Job Grade Level 2 as a result of a job evaluation program does not automatically entail a
promotion or grant them an increase in salary. Of primordial consideration is not the nomenclature or
title given to the employee, but the nature of his functions. What transpired in this case was only a
promotion in nomenclature. The employees continued to occupy the same positions they were
occupying prior to the job evaluation. Moreover, their job titles remained the same and they were not
given additional duties and responsibilities. SCA Hygiene Products Corporation Employees Association-
FFW vs. SCA Hygiene Products Corporation, G.R. No. 182877, August 9, 2010.
Employee; security of tenure. A workers security of tenure is guaranteed by the Constitution and the
Labor Code. Under the security of tenure guarantee, a worker can only be terminated from his
employment for cause and after due process. For a valid termination by the employer: (1) the
dismissal must be for a valid cause as provided in Article 282, or for any of the authorized causes
under Articles 283 and 284 of the Labor Code; and (2) the employee must be afforded an
opportunity to be heard and to defend himself. A just and valid cause for an employees dismissal
must be supported by substantial evidence, and before the employee can be dismissed, he must be
given proper notice of such cause/s and an adequate opportunity to be heard. In the process, the
employer bears the burden of proving that the dismissal of an employee was for a valid cause. Its
failure to discharge this burden renders the dismissal unjustified and, therefore, illegal. Wensha Spa
Center, Inc. and/or Xu Zhi Jie vs. Loreta T. Yung, G.R. No. 185122, August 16, 2010.
Employee benefit; time of death. The death should be deemed compensable under the ECC since
Henry was on his way back to Manila in order to be on time and be ready for work the next day when
his accidental death occurred. He should already be deemed en route to the performance of his duty
at the time of the accident. It should be noted that Henrys superior allowed him to travel to La Union
to visit his ailing mother on the condition that that he return the next day. Under these facts, Henry
was in the course of complying with his superiors order when he met his fatal accident. To be sure,
he was not in an actual firefighting or accident situation when he died, but returning to work as
instructed by his superior is no less equivalent to compensable performance of duty under Section 1,
Rule III of the ECC Rules. Government Service Insurance System vs. Felicitas Zarate, as substituted by her
heirs, namely Melanie Zarate, et al., G.R. No. 170847, August 3, 2010.
Illegal dismissal; effect of rehabilitation proceedings. The existence of the Stay Order which would
generally authorize the suspension of judicial proceedings could not have affected the Courts
action on the present case due to the petitioners failure to raise the pendency of the rehabilitation
proceedings in its memorandum to the Court. At any rate, a stay order simply suspends all actions
for claims against a corporation undergoing rehabilitation; it does not work to oust a court of its
jurisdiction over a case properly filed before it. Thus, the Courts ruling on the principal issue of the
case stands. Nevertheless, with LBNIs manifestation that it is still undergoing rehabilitation, the
Court resolves to suspend the execution of our Decision until the termination of the rehabilitation
proceedings. Carlos De Castro vs. Liberty Broadcasting Network, Inc. and Edgardo Quigue, G.R. No.
165153. August 25, 2010.
Job contracting. In permissible job contracting, the principal agrees to put out or farm out with a
contractor or subcontractor the performance or completion of a specific job, work or service within a
definite or predetermined period, regardless of whether such job, work or service is to be performed
or completed within or outside the premises of the principal. The test is whether the independent
contractor has contracted to do the work according to his own methods and without being subject to
the principals control except only as to the results, he has substantial capital, and he has assured
the contractual employees entitlement to all labor and occupational safety and health standards, free
exercise of the right to self-organization, security of tenure, and social and welfare benefits. Spic n
Span Services Corp. vs. Gloria Paje, et al., G.R. No. 174084, August 25, 2010.
Management prerogative; transfer of employees. Jurisprudence recognizes the exercise of management
prerogative to transfer or assign employees from one office or area of operation to another, provided
there is no demotion in rank or diminution of salary, benefits, and other privileges, and the action is
not motivated by discrimination, made in bad faith, or effected as a form of punishment or demotion
without sufficient cause. To determine the validity of the transfer of employees, the employer must
show that the transfer is not unreasonable, inconvenient, or prejudicial to the employee; nor does it
involve a demotion in rank or a diminution of his salaries, privileges and other benefits. Should the
employer fail to overcome this burden of proof, the employees transfer shall be tantamount to
constructive dismissal. Pharmacia and Upjohn, Inc., et al. vs. Ricardo P. Albayda, Jr., G.R. No. 172724,
August 23, 2010.
Merger; employee terms and conditions. That BPI is the same entity as FEBTC after the merger is but a
legal fiction intended as a tool to adjudicate rights and obligations between and among the merged
corporations and the persons that deal with them. Although in a merger it is as if there is no change
in the personality of the employer, there is in reality a change in the situation of the employee. Once
an FEBTC employee is absorbed, there are presumably changes in his condition of employment
even if his previous tenure and salary rate is recognized by BPI. It is reasonable to assume that BPI
would have different rules and regulations and company practices than FEBTC and it is incumbent
upon the former FEBTC employees to obey these new. Not the least of these changes is the fact
that prior to the merger FEBTC employees were employees of an unorganized establishment and
after the merger they became employees of a unionized company that had an existing CBA with the
certified union. Thus, although in a sense BPI is continuing FEBTCs employment of these absorbed
employees, BPIs employment of these absorbed employees will not be under exactly the same
terms and conditions as stated in the latters employment contracts with FEBTC. Bank of the
Philippine Islands vs. BPI Employees Union-Davao Chapter-Federation of Unions in BPI Unibank, G.R. No.
164301, August 10, 2010.
Reinstatement of employee; doctrine of strained relations. Under the doctrine of strained relations, the
payment of separation pay has been considered an acceptable alternative to reinstatement when the
latter option is no longer desirable or viable. On the one hand, such payment liberates the employee
from what could be a highly oppressive work environment. On the other, the payment releases the
employer from the grossly unpalatable obligation of maintaining in its employ a worker it could no
longer trust. Wensha Spa Center, Inc. and/or Xu Zhi Jie vs. Loreta T. Yung, G.R. No. 185122, August 16,
2010.
Retirement pay; applicability to employees on commission basis. Even if the petitioner as bus conductor
was paid on commission basis, he falls within the coverage of R.A. 7641 and its implementing rules.
Thus, his retirement pay should include the cash equivalent of 5-days SIL and 1/12 of 13th month
pay. The NLRCs reliance on the case of R & E Transport, Inc. as a basis for ruling that bus
conductors are not covered by the law on SIL and 13th month pay is erroneous since that involved a
taxi driver who was paid according to the boundary system. There is a difference between drivers
paid under the boundary system and conductors who are paid on commission basis. In practice,
taxi drivers do not receive fixed wages and retain only those sums in excess of the boundary or fee
they pay to the owners or operators of the vehicles. Conductors, on the other hand, are paid a
certain percentage of the bus earnings for the day. Rodolfo J. Serrano vs. Severino Santos Transit and/or
Severino Santos, G.R. No. 187698, August 9, 2010.
Separation pay. In those instances where an employee has been validly dismissed for causes other
than serious misconduct or those reflecting on his moral character, separation pay may still be
granted after giving considerable weight to his long years of employment. In this case, equity
considerations dictate that respondents tenure be computed from 1978, the year when respondent
started working for Upjohn, and not only from 1996, when the merger of Pharmacia and Upjohn took
place. Pharmacia and Upjohn, Inc., et al. vs. Ricardo p. Albayda, Jr., G.R. No. 172724, August 23, 2010.
Strike; validity of strike. Despite the validity of the purpose of a strike and the unions compliance with
the procedural requirements, a strike may still be held illegal where the means employed are illegal.
While the strike had not been marred by actual violence and patent intimidation, the picketing that
respondent PILA officers and members undertook as part of their strike activities effectively blocked
the free ingress to and egress from PHIMCOs premises, thus preventing non-striking employees
and company vehicles from entering the PHIMCO compound. In this manner, the picketers violated
Article 264(e) of the Labor Code and tainted the strike with illegality. PHIMCO Industries, Inc. vs.
PHIMCO Industries Labor Association (PILA), et al., G.R. No. 170830, August 11, 2010.
Union; eligibility of confidential employees to join. Confidential employees are defined as those who (1)
assist or act in a confidential capacity, (2) to persons who formulate, determine, and effectuate
management policies in the field of labor relations. The two criteria are cumulative, and both must be
met if an employee is to be considered a confidential employee that is, the confidential relationship
must exist between the employee and his supervisor, and the supervisor must handle the prescribed
responsibilities relating to labor relations. In the present case, there is no showing that the
secretaries/clerks and checkers assisted or acted in a confidential capacity to managerial employees
and obtained confidential information relating to labor relations policies. And even assuming that
they had exposure to internal business operations of the company, as respondent claims, this is
not per seground for their exclusion in the bargaining unit of the rank-and-file employees. Tunay na
Pagkakaisa ng Manggagawa sa Asia Brewery vs. Asia Brewery, Inc., G.R. No. 162025, August 3, 2010.
Union; liability for invalid strike. The effects of illegal strikes, outlined in Article 264 of the Labor Code,
make a distinction between participating workers and union officers. The services of an ordinary
striking worker cannot be terminated for mere participation in an illegal strike; proof must be adduced
showing that he or she committed illegal acts during the strike. The services of a participating union
officer, on the other hand, may be terminated, not only when he actually commits an illegal act
during a strike, but also if he knowingly participates in an illegal strike. PHIMCO Industries, Inc. vs.
PHIMCO Industries Labor Association (PILA), et al., G.R. No. 170830, August 11, 2010.
Union shop; effect of merger. All employees in the bargaining unit covered by a Union Shop Clause in
their CBA with management are subject to its terms. However, under law and jurisprudence, the
following kinds of employees are exempted from its coverage, namely, (1) employees who at the
time the union shop agreement takes effect are bona fide members of a religious organization which
prohibits its members from joining labor unions on religious grounds; (2) employees already in the
service and already members of a union other than the majority at the time the union shop
agreement took effect; (3) confidential employees who are excluded from the rank and file
bargaining unit; and (4) employees excluded from the union shop by express terms of the
agreement. In the absence of any of these recognized exceptions, there is no basis to conclude that
the terms and conditions of employment under a valid CBA in force in the surviving corporation
should not be made to apply to the absorbed employees. Bank of the Philippine Islands vs. BPI
Employees Union-Davao Chapter-Federation of Unions in BPI Unibank, G.R. No. 164301, August 10, 2010.
Labor Procedure
CSC; rules for dismissal. The filing of formal charges against the respondents without complying with
the mandated preliminary investigation or at least giving the respondents the opportunity to comment
violated the latters right to due process. These rules on due process apply even in cases where the
complainant is the disciplining officer himself, as in this case. The fact that the charges against the
respondents are serious or that the evidence of their guilt is strong cannot compensate for the
procedural shortcut undertaken by petitioner. Winston F. Garcia vs. Mario I. Molina, et al./Winston F.
Garcia Vs. Mario I. Molina, et al., G.R. No. 157383/G.R. No. 174137, August 10, 2010.
Labor case; due process; reevaluation. A reevaluation is a process by which a person or office (in this
case the DOLE secretary) revisits its own initial pronouncement and makes another assessment of
its findings. In simple terms, to reevaluate is to take another look at a previous matter in issue. From
a procedural standpoint, a reevaluation is a continuation of the original case and not a new
proceeding. The evidence, financial reports and other documents submitted by the parties in the
course of the original proceeding are to be visited and reviewed again. A reevaluation does not
necessitate the introduction of new materials for review nor does it require a full hearing for new arguments.
Hence, failure to order the presentation of new evidence in the reevaluation of an Order is not a
violation of due process. NASECO Guards Association PEMA vs. National Service Corporation, G.R. No.
165442, August 25, 2010.
Labor case; non-lawyer as representative. The respondents in this case were represented by a non-
lawyer who never showed any proof of his authority to represent the respondents. Petitioner argued
that the respondents representative had no personality to appear before the Labor Arbiter or the
NLRC, and his representation for the respondents should produce no legal effect. The Court
affirmed the ruling of the CA that the cited technical infirmity cannot defeat the respondents
preferred right to security of tenure, without prejudice to whatever action may be taken against the
representative, if he had indeed been engaged in the unauthorized practice of law. Spic n Span
Services Corp. vs. Gloria Paje, et al., G.R. No. 174084, August 25, 2010.
NLRC; factual findings. Findings of fact of the NLRC, affirming those of the LA, are entitled to great
weight and will not be disturbed if they are supported by substantial evidence. The CA had
overstepped its legal mandate by reversing the findings of fact of the LA and the NLRC as it appears
that both decisions were based on substantial evidence. There is no proof of arbitrariness or abuse
of discretion in the process by which each body arrived at its own conclusions. Thus, the CA should
have deferred to such specialized agencies that are considered experts in matters within their
jurisdictions.Pharmacia and Upjohn, Inc., et al. vs. Ricardo P. Albayda, Jr., G.R. No. 172724, August 23,
2010.
NLRC; review of decisions. The power of the Court of Appeals to review NLRC decisions via Rule 65
or Petition for Certiorari has been settled as early as in our decision in St. Martin Funeral Home v.
National Labor Relations Commission. This Court held that the proper vehicle for such review was a
Special Civil Action for Certiorari under Rule 65 of the Rules of Court, and that this action should be
filed in the Court of Appeals in strict observance of the doctrine of the hierarchy of courts. Moreover,
it is already settled that under Sec. 9 of B.P. 129, as amended, the Court of Appeals pursuant to
the exercise of its original jurisdiction over Petitions for Certiorari is specifically given the power to
pass upon the evidence, if and when necessary, to resolve factual issues. Picop Resources
Incorporated (PRI) vs. Anacleto L. Taeca, et al., G.R. No. 160828, August 9, 2010.
Pleading verification. The lack of a verification in a pleading is only a formal defect, not a jurisdictional
defect, and is not necessarily fatal to a case. The primary reason for requiring a verification is simply
to ensure that the allegations in the pleading are done in good faith, are true and correct, and are not
mere speculations. As previously explained in Torres v. Specialized Packaging Development Corporation,
where only two of the 25 real parties-in-interest signed the verification, the verification by the two
could be sufficient assurance that the allegations in the petition were made in good faith, are true
and correct, and are not speculative. Spic n Span Services Corp. vs. Gloria Paje, et al., G.R. No. 174084,
August 25, 2010.
Procedural rules; strict application. Procedural rules setting the period for perfecting an appeal or filing
a petition for review are generally inviolable. It is doctrinally entrenched that an appeal is not a
constitutional right, but a mere statutory privilege. Hence, parties who seek to avail themselves of
such privilege must comply with the statutes or rules allowing it. Furthermore, the perfection of an
appeal in the manner and within the period permitted by law is not only mandatory, but also
jurisdictional. Failure to perfect the appeal renders the judgment of the court final and executory.
Just as a losing party has the privilege to file an appeal within the prescribed period, so does the
winner also have the correlative right to enjoy the finality of the decision. Elpidio Calipay vs. National
Labor Relations Commission, et al., G.R. No. 166411, August 3, 2010.
Real party in interest; dismissed employee. It is clear that the petitioners failed to include the name of the
dismissed employee in the caption and body of its petition for certiorari and, instead, only indicated
the name of the labor union as the party acting on behalf of such dismissed employee. Hence, the
Court of Appeals rightly dismissed the petition for not having been filed by an indispensable party in
interest. (The Court still proceeded to discuss the substantive issues and merits of the case despite
affirming the dismissal of the case based on procedural grounds.) Nagkakaisang Lakas ng
Manggagawa sa Keihin (NLMK-OLALIA-KMU) and Helen Valenzuela vs. Keihin Philippines
Corporation, G.R. No. 171115, August 9, 2010.
Rule 45; review of factual findings. As a general rule, only questions of law may be raised in petitions
for certiorari under Rule 45 of the Rules of Court. However, there are recognized exceptions to the
rule. Among the exceptions are when the findings of fact are conflicting and when the findings are
conclusions without citation of specific evidence on which they are based. In the present case, the
findings of fact of the Court of Appeals conflict with the findings of fact of the NLRC and the Labor
Arbiter. Also, the finding of the Court of Appeals that Gurango engaged in a fistfight is a conclusion
without citation of specific evidence on which it is based. Alex Gurango vs. Best Chemicals and Plastic,
Inc., et al., G.R. No. 174593, August 25, 2010.
 [G.R. No. 143204. June 26, 2001]

HYATT TAXI SERVICES INC., petitioner, vs. RUSTOM M.

CATINOY, respondent.

DECISION
GONZAGA-REYES, J.:

Before us is a petition for review under Rule 45 of the Rules of Court of the Decision[1] of the
Court of Appeals dated December 27, 1999 in the case entitled RUSTOM M. CATINOY VS.
HYATT TAXI SERVICES INC., HYATT TAXI EMPLOYEE ASSOCIATION AND/OR MR.
JAIME DUBLIN that ruled against herein petitioner Hyatt Taxi Services, Inc. (hereafter petitioner)
and of the Resolution dated May 11, 2000 denying the Motion for Reconsideration of petitioner.
The assailed Decision held that the preventive suspension of respondent Rustom M. Catinoy
(hereafter respondent) by petitioner was without cause and without due process of law, and that
petitioner constructively dismissed respondent.
The facts/antecedents of this case as found by the Labor Arbiter, NLRC and Court of Appeals
are as follows:

Complainant was hired on October 10, 1992 as a taxi driver by the Respondent
Hyatt Taxi Services, Inc.

Complainant is also a member and officer (Secretary) of Respondent, Hyatt Taxi

Employees Association, a legitimate labor organization registered with the
Department of Labor and Employment and is the exclusive bargaining
representative of all taxi drivers of Respondent Hyatt Taxi Service, Inc.
Respondent Jaime Dublin is the President and Chairman of the Board of the
Respondent association.

As a taxi driver, complainant works every other day for 15 days in a month
earning P800.00 more or less a day after remitting to the respondent company his
boundary (P650.00/day) during carbarn time 1:00 a.m. Being the Secretary of the
Union/association, complainant keeps all the records and documents of the
association in the drawer of his desk at the Union Office which is located inside
the premises of Respondent company.

On August 21, 1995 at about past 10:00 a.m., complainant went inside the union
office and to his surprise found his drawer to have been forcibly opened. Since he
saw the acting President of the Union, Mr. Tomas Saturnino inside the office
together with two rice suppliers namely Melencio Reyes and Ms. Rosalinda
Balahan, complainant asked Saturnino who opened his drawer. Saturnino replied
that he was the one who forcibly opened the drawer to retrieve some documents
particularly the list of union members. An argument ensued and complainant even
reminded Saturnino that he should respect the rights and functions of other
officers of the association. Saturnino then approached the complainant and shoved
him. Complainant retaliated with fist blow but it failed to hit Saturnino and the
latter hit him twice in (sic) the face causing one of his tooth (sic) to fall. The
aggression of Saturnino was only interrupted when the Operations Manager of the
respondent company (sic) Mr. Caraig (sic) intervened and told him (Saturnino) to
stop. Complainant was brought to the hospital by Ms. Balahan and Mr. Reyes due
to the bleeding that occurred due to the loss of his tooth. After securing medical
treatment, complainant on the same day filed a criminal complaint for physical
injuries with the fiscals Office and Saturnino was arrested by the police for
investigation (Annex A of complainants position paper).

On August 24, 1995 about 25 union members requested the chairman of the Board
of the Association to suspend the complainant and Saturnino for engaging in a fist
fight (sic) since both are officers of the union which should be models of
discipline for the rank and file (Annex A of Respondent Associations position
paper) employees.

On August 25, Jaime Dublin, Chairman of the Board of the Association, acting on
the letter of some members of the association, issued a memorandum (Annex E
complainant position paper) to the Operation Manager of the Respondent
company, Mr. H. Caraig (sic) stating the following:

This is in connection with the fist fighting (sic) incident between Mr. Tomas
Saturnino and Mr. Rustom Catinoy, President and Secretary respectively, Hyatt
Taxi Drivers Association.

As per initial investigation conducted by the committee itself, both officer (sic)
have violated the Companys Rules and Regulations and likewise, the Union
Policy constitution and By-Laws, Article 15 Section 1, e.i., Impeachment.

The committee further decided the indefinite suspension of the two officers
pending completion of the Committees investigation. The decision was approved
by the Executive Board.

So, therefore, the committee is requesting your office to implement our

recommendation/decision at the soonest possible time.
 On August 26, 1995, the Asst. Vice-President of the Respondent company (sic)
Melchor Acosta, Jr. (sic) issued a memorandum preventively suspending for 30
days the services of the complainant and Saturnino pending investigation in
response to the recommendation of the Chairman of the Board of the Association.

xxxxxx

Complainant aggrieved by the preventive suspension since he was not the

aggressor, filed a complaint for illegal suspension, unpaid wages, and damages
against both the association-union and management on August 28, 1995 before
the National Labor Relations Commission.

After the lapse of his 30 days preventive suspension, complainant reported for
work but he was not allowed to resume his duties as a taxi driver allegedly, since
he is pursuing the criminal complainant for physical injuries against Saturnino,
the associations President and the complaint for the illegal suspension with the
National Labor Relations Commission.

On October 12, 1995, since there was no response from Respondent company,
complainant decided to amend his complaint to include constructive dismissal as
an additional cause of action since he was not allowed to resume his employment
after the lapse of his preventive suspension.[2]

On September 19, 1997, the Labor Arbiter rendered a Decision finding petitioner guilty of
illegal preventive suspension, requiring it to pay the wage equivalent of the suspension, and further
finding petitioner guilty of illegal constructive dismissal, ordering petitioner to reinstate
respondent and to pay him backwages and attorneys fees.
Petitioner and the Union Association then filed a Joint Memorandum of Appeal before the
National Labor Relations Commission (NLRC).
On June 26, 1998, the NLRC issued a Decision affirming the decision of the Arbitration
Branch. The dispositive portion of the Decision reads:

WHEREFORE, premises considered judgment is hereby rendered:

1. Finding Respondent Hyatt Taxi Services, Inc., guilty of illegal constructive dismissal;
2. Finding Respondents Hyatt Taxi Services, Inc., and Hyatt Taxi Employees Association and/or
Jaime Dublin jointly and severally liable for illegal preventive suspension;
2. Ordering Respondents Hyatt Taxi Services, Inc., and Hyatt Taxi Employees Association and/or
Jaime Dublin jointly and severally liable to pay a months wage due to complainants illegal
preventive suspension in the amount of P12,000.00;
 3. Ordering Respondents Hyatt Taxi Services, Inc., to pay complainants full backwages from the
time of his dismissal till actual reinstatement in the amount of P276,000.00 (computed till
promulgation only);
4. Ordering Respondents Hyatt Taxi Services, Inc. to reinstate complainant to his former position
as taxi driver without loss of seniority rights and privileges immediately upon
acknowledgment of this resolution;
5. Ordering Respondent Hyatt Taxi Services, Inc. to pay 10% attorneys fees based on the total
judgment award on the illegal dismissal aspect;
6. Ordering the Dismissal of the complaint for damages for lack of merit.

SO ORDERED.[3]

Aggrieved, petitioner filed a Motion for Reconsideration urging the NLRC to review the
finding of facts of the Arbitration Branch.
On October 30, 1998, the NLRC acting on said Motion for Reconsideration, issued a Decision
granting in part the motion. The Decision of the NLRC modified its earlier decision when it deleted
the award of backwages on the ground that there was no concrete showing that complainant was
constructively dismissed. The dispositive portion of said Decision reads:

WHEREFORE, the Decision rendered on June 26, 1998 is hereby affirmed with
modifications by deleting the award of backwages.

Accordingly, respondent is ordered to reinstate complainant without loss of seniority

rights. All other aspects are hereby AFFIRMED.

SO ORDERED.[4]

Respondent filed a Partial Motion for Reconsideration of said Decision.

On January 14, 1999, the NLRC issued a Resolution denying respondents Partial Motion for
Reconsideration.
On March 30, 1999, respondent filed a Petition for Certiorari with the Court of Appeals that
sought the annulment of the NLRC Decision, alleging grave abuse of discretion in the deletion of
the award of backwages.
On December 27, 1999, the Court of Appeals issued the now assailed Decision that set aside
and annulled the October 30, 1998 Decision of the NLRC and reinstated the earlier decision of the
NLRC dated June 25, 1998. The dispositive portion of the Decision reads:

WHEREFORE, judgment is hereby rendered SETTING ASIDE and ANNULLING

the Decision of the respondent National Labor Relations Commission dated October
30, 1998 and REINSTATING its Decision dated June 25, 1998.[5]
 On January 25, 2000, petitioner filed a Motion for Reconsideration of the Decision of the
Court of Appeals.
On May 11, 2000, the Court of Appeals issued the Resolution denying petitioners motion.
Hence, this petition for review that raises these issues:
I

THE COURT OF APPEALS ERRED GREVIOUSLY (sic) WHEN IT

ANNULED (sic) AND SET ASIDE THE DECISION OF THE NLRC
DISREGARDING THE WELL-ENTRENCHED MAXIM THAT THE
FINDINGS OF FACTS OF THE NLRC ARE ACCORDED NOT ONLY WITH
RESPECT BUT WITH FINALITY.
II

THE COURT OF APPEALS GREVIOUSLY (sic) ERRED IN NOT

CONSIDERING THAT THERE WAS NO ILLEGAL DISMISSAL
DISREGARDING THE JURISPRUDENCE APPLICABLE ON SUCH ISSUE.
III

THE COURT OF APPEALS GREVIOUSLY (sic) ERRED WHEN IT INSISTED

THAT CATINOY WAS CONSTRUCTIVELY DISMISSED WHEN THE NLRC
HAD ALREADY RULED THAT THERE WAS NO CONCRETE SHOWING
OF ILLEGAL DISMISSAL.[6]

The main contention of petitioner is that the Court of Appeals should not have disregarded the
factual findings of the NLRC to the effect that there was no concrete showing that petitioner had
constructively dismissed respondent. Petitioner maintains that while the second decision of the
NLRC modified its first decision, it cannot be considered that the NLRC had contradicted itself
because a second review is the essence of a motion for reconsideration. A court or quasi-judicial
agency like the NLRC, according to petitioner, should be given leeway to correct its findings or
decisions via motions for reconsideration. Petitioner then argues that since a second review is the
final interoperation of the issues in the case, such decision should be respected and given
finality. Petitioner also insists that there was no constructive dismissal in this case because as
employer, it did not render impossible, unreasonable or unlikely the continuation of respondents
employment. Petitioner points out that even respondent had not alleged any overt act or conduct
on the part of petitioner manifesting refusal to admit him back to its employ.
The petition is without merit.
We uphold the ruling of the Court of Appeals that there is no justification for the NLRCs
modification of its earlier decision when it deleted the award of backwages that it had previously
awarded to respondent. In abandoning its original stance that there was constructive dismissal that
would entitle respondent to backwages, the NLRC reasoned that:
Upon second review of the case records and after due consideration of the instant
motion, we still maintain the ruling rendered in the case but we are inclined to make
certain modifications relative to the issue of constructive dismissal. We have to make
clarifications on this aspect by following the jurisprudence on constructive dismissal
whereby the Supreme Court held that constructive dismissal consists in the act of
quitting because continued employment is rendered impossible, unreasonable or
unlikely as in the case of an offer involving demotion in rank and a diminution in
pay. Applying the same in the case at bar, complainant did not resign or quit. On the
contrary, he pursued his employment when he returned to the respondents officer after
his 30 days suspension. Hence, we cannot sustain the respondents claim that
complainant abandoned his job. To constitute abandonment of work, it must be
accompanied by overt acts unerringly pointing to the fact that the employee does not
want to work anymore.

We note that respondent expressed willingness to take back complainant manifesting

that the latter was one of those desirable drivers and it has no reason to terminate
him. Seemingly there was no meeting of the minds between management and
complainant due to the conflict that arose regarding the latters suspension. In view
thereof, reinstatement is proper taking into consideration the positions of the
management and complainant but we are deleting the award for payment of
backwages as there was no concrete showing that complainant was constructively
dismissed.[7]

The foregoing rationale of the NLRC is without basis. First, the evidence on record runs
counter to the ruling of the NLRC that there was no concrete showing that respondent was
constructively dismissed. The factual findings of the Labor Arbiter, which the NLRC initially
adopted, show that respondent was not taken back by petitioner after the 30-day suspension period
that petitioner imposed on respondent had lapsed. The Labor Arbiter appreciated the following
events as badges of constructive dismissal:

Records show that complainant reported for work on September 25, 1995, after the
lapse of his suspension but was not able to talk with the operation manager and this
was confirmed by the Respondents in their position paper (sic)) On the following day
complainant reported again for work but was allegedly told by Mr. Caraig (Operation
Manager) that if he will not drop the criminal complainant for physical injuries he
filed against Tomas Saturnino and his complaint for illegal suspension with the
National Labor Relations Commission he will not be able to resume his
employment. In fact, complainant on September 28, 1995 wrote a letter addressed to
Respondents Vice-President, pleading that he be allowed to resume his work (see
Annex G Complainants position paper). There being no response or reaction
complainant amended his complaint to include constructive dismissal.[8]
 Clearly, constructive dismissal had already set in when the suspension went beyond the
maximum period allowed by law. Section 4, Rule XIV, Book V of the Omnibus Rules provides
that preventive suspension cannot be more than the maximum period of 30 days. Hence, we have
ruled that after the 30-day period of suspension, the employee must be reinstated to his former
position because suspension beyond this maximum period amounts to constructive dismissal.[9]
Petitioner denies that it constructively dismissed respondent and alleges that it was respondent
who went AWOL and who refused to resume his work because he could not account for union
funds. Both the Labor Arbiter and the NLRC rejected petitioners claims. We affirm the rejection. It
bears stressing that in illegal dismissal cases, it is the employer who has the burden of
proof.[10] Since petitioner claims that respondent abandoned his work, petitioner has to establish
the concurrence of the following: (1) the employees intention to abandon employment and (2)
overt acts from which such intention may be inferredas when the employee shows no desire to
resume work.[11] Petitioner failed to make out its case of abandonment. Even the NLRC in its
modified decision confirmed that there were no overt acts unerringly pointing to the fact that
respondent had no intention of returning to work anymore. Also, the fact that respondent filed a
complaint against his employer within a reasonable period of time belies abandonment.[12]
Petitioner implores this Court to respect the modified decision of the NLRC. While it is true
that the essence of a motion for reconsideration is a second review of the facts, this theory does
not apply in the case at bar. As correctly pointed out by the Court of Appeals, the motion for
reconsideration of petitioner before the NLRC contained no factual basis that could support the
NLRCs change of heart. The evidence as it stands shows that after the lapse of the 30-day
suspension period, respondent reported for work but he was not allowed to resume his duties as a
taxi driver. To reiterate, from the time that the 30-day suspension period had expired, respondent
can be already deemed as constructively dismissed.
Second, the strict adherence by the NLRC to the definition of constructive dismissal is
erroneous. Apparently, the NLRC ruled out constructive dismissal in this case mainly because
according to it constructive dismissal consists in the act of quitting because continued employment
is rendered impossible, unreasonable or unlikely as in the case of an offer involving demotion in
rank and a diminution in pay.[13] Based on this definition, the NLRC concluded that since
respondent neither resigned nor abandoned his job and the fact that respondent pursued his
reinstatement negate constructive dismissal. What makes this conclusion tenuous is the fact that
constructive dismissal does not always involve forthright dismissal or diminution in rank,
compensation, benefit and privileges.[14] There may be 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 could foreclose any choice by him except to forego his continued employment.[15]
Here, what made it impossible or unacceptable for respondent to resume work was petitioners
insistence that respondent first desist from filing his criminal complaint against the acting president
of the union and to withdraw his complaint for illegal suspension against petitioner before he could
be allowed to return to work. Respondent refused and amended his complaint to include
constructive dismissal.Respondents refusal to yield to petitioners conditioned offer to take him
back is understandable for respondent has every right not to bargain away his right to prosecute
his complaints in exchange for the employment to which he was in the first place rightfully entitled.
In acting on the motion for reconsideration of petitioner, the NLRC gave credence to
petitioners contention that petitioners failure to reinstate respondent to his job was merely a result
of a miscommunication between the two parties since petitioner was willing to take back
respondent as its employee.
We disagree. Instead, we are in full accord with the Court of Appeals that the predicament
respondent faced was not just a product of miscommunication, an argument that the NLRC had in
fact branded in its earlier decision as a mere afterthought. Respondent had written the assistant
vice president of petitioner to complain about his non-reinstatement after the lapse of his
preventive suspension. Petitioner failed to reply, and it is actually from petitioners inaction where
the supposed miscommunication sprung.
Moreover, from the time that petitioner failed to recall respondent to work after the expiration
of the suspension period, taken together with petitioners precondition that respondent withdraw
the complaints against the acting president of the union and against petitioner itself, respondents
security of tenure was already undermined by petitioner. Petitioners actions undoubtedly constitute
constructive dismissal.
WHEREFORE, the Decision of the Court of Appeals dated December 27, 1999 is hereby
AFFIRMED.
SO ODERED.
 [G.R. No. 119500. August 28, 1998]

PAGUIO TRANSPORT CORPORATION, petitioner, vs. NATIONAL

LABOR RELATIONS COMMISSION and WILFREDO
MELCHOR, respondents.

DECISION
PANGANIBAN, J.:

In dismissing the petition, this Court reiterates the following doctrines: (1) the
boundary system used in taxi (and jeepney) operations presupposes an employer-
employee relation; (2) the employer must prove just (or authorized) cause and due
process to justify dismissal of an employee; (3) strained relations must be demonstrated
as a fact; and (4) back wages and reinstatement are necessary consequences of illegal
dismissal.

The Case

Before us is a petition for certiorari and prohibition with preliminary injunction,

assailing the December 16, 1994 Decision of the National Labor Relations
Commission[1] in NLRC NCR Case No. 00-02-01564-94 entitled Wilfredo Melchor vs.
Paguio Transport Corporation/Serafin Paguio. The dispositive portion of the challenged
Decision reads:

WHEREFORE, premises considered, the appeal insofar as it seeks reversal

of the finding on illegal dismissal is denied for lack of merit. The decision
declaring that complainant was illegally dismissed is affirmed. The decision is
however partially modified insofar as liability therefor is concerned. The
liability shall inure against PAGUIO TRANSPORT CORPORATION, subject to
the provision of the Corporation Code and the Rules of Court on matters taken
herein. The backwages as computed in the assailed decision is set aside, and
a new one is hereby provided in the amount of P86,400.00 as computed in the
immediately preceding paragraph.

Petitioner also impugns the February 21, 1995 NLRC Resolution[2] denying the motion
for reconsideration.
The June 28, 1994 Decision of the labor arbiter,[3] which the NLRC modified as to the
amount of back wages, disposed as follows:
WHEREFORE, the respondents are hereby ordered to reinstate the
complainant with full backwages from the time his salaries were withheld from
him until his actual reinstatement.

The respondents are further ordered to pay him his 13th month pay in the
amount of P5,600.00.

Complainants backwages up to the date of this Decision as computed by

LEILANI E. CALALANG of the Commissions NLRC NCR Branch is:

11/28/93 - 6/28/94 = 7 mos.

P800.00 x 3 days x 4 weeks = P9,600.00

P9,600.00 x 7 mos. = P67,200.00

The aspect of reinstatement either in the job or payroll at the option of the
employers being immediately executory pursuant to Article 223 of the Labor
Code, the respondents are hereby directed to so reinstate him when he
reports for work by virtue of this Decision.

Other claims are hereby dismissed for lack of evidence.

The Facts

The facts, as summarized in the challenged Decision, are as follows:

Complainant Wilfredo Melchor was hired by respondent company as a taxi

driver on 25 December 1992 under the [b]oundary [s]ystem. He [was]
engaged to drive the taxi unit assigned to him on a 24-hour schedule per trip
every two (2) days, for which he used to earn an average income from P500
to P700 per trip, exclusive of the P650.00 boundary and other deductions
imposed on him. On 24 [sic] November 1993, complainant allegedly met a
vehicular accident along Quirino Avenue near the PNR Station and Plaza
Dilao when he accidentally bumped a car which stopped at the intersection
even when the traffic light was green and go. After he submitted the traffic
accident report to the office of respondents, he was allegedly advised to stop
working and have a rest. After several days[,] he allegedly reported for work
only to be told that his service was no longer needed. Hence, the complaint
for illegal dismissal, among others.
Respondent[s] for their part maintained that complainant was not illegally
dismissed, there being in the first place no employer-employee relationship
between them. In amplification, it was argued that the element of control
which [was] a paramount test to determine the existence of such a
relationship [was] lacking. So too, it argued the element of the payment of
compensation. Considering that in lieu of the latter, payment of boundary is
instead made allegedly makes the relationship between them of a wase-
agreement [sic]. Respondents then argued that even if an employer-employee
relationship were to be presumed as present, still complainants termination
arose out of a valid cause and after he refused to articulate his stand on the
investigation being conducted on him. Respondents then harped on the
supposed three occasions when complainant figured in a vehicular accident
involving the taxi unit he was driving, viz: On August 3, which resulted in
damages to the respondent in the amount of P150.00; On August 4 which
again resulted [in] the damages to the respondent in the amount ofP615.00;
and again on 4 November 1993, the mishap costing the respondents this
time P25,370.00 in damages. As a result of the alleged compounded
damages which the respondents had to shoulder on account of the supposed
reckless driving of the complainant, the former was allegedly left with no
alternative but to ask complainants explanation why he should still be allowed
to drive. Complainant, despite several chances, allegedly failed to do so.[4]

Ruling of the NLRC

The NLRC held that private respondent was an illegally dismissed employee of
petitioner. Upholding the existence of an employer-employee relationship, it cited Doce
v. WCC,[5] in which the Supreme Court ruled that the relationship created between the
parties operating under a boundary system is one of an employer and employee, and not
of a lessor and a lessee.[6]
The NLRC sustained the ruling of the labor arbiter that the private respondent was
illegally dismissed, for he was not afforded the twin requirements of due process x x x. [7] It
rejected petitioners claim that private respondent had figured in three vehicular incidents
because of his reckless driving. It found that except for petitioners bare statements, no
proof was presented to establish with particularity the circumstances being claimed. x x x
The guilt and culpability of [private respondent] which would give [petitioner] valid ground
to effect his dismissal cannot be established by a mere allegation of his reckless driving. [8]
Public Respondent NLRC found petitioner liable for back wages in the amount
of P86,400, and not P67,200 as computed by the labor arbiter. It found, however, that this
liability should be imposed on Petitioner Corporation only, and not on its president who
was also impleaded by private respondent.
Hence, this petition.[9]
 Issues

Petitioner raises the following issues:

a. Whether or not public respondent Commission acted in excess of

jurisdiction and/or with grave abuse of discretion amounting to lack of
jurisdiction in ordering the reinstatement of private respondent with full
backwages, despite its strained relations with the petitioner and the
reinstatement would, in effect, be inimical to the interest of the latter in
particular, and to the riding public in general;

b. Whether or not public respondent acted in excess of jurisdiction and/or with

grave abuse of discretion in refusing to reconsider its decision and resolution
complained of despite the facts prevailing to support the reconsideration.[10]

In resolving the petition, we shall address the following points: (1) employer-employee
relation, (2) presence of just cause, (3) due process, (4) strained relationship, and (5)
propriety of reinstatement and back wages.

The Courts Ruling

The petition is not meritorious.

First Issue:

Employer-Employee Relation

Under the boundary system, private respondent was engaged to drive petitioners taxi
unit on a 24-hour schedule every two days. On each such trip, private respondent
remitted to petitioner a boundary of P650. Whatever he earned in excess of that amount
was considered his income.
Petitioner argues that under said arrangement, he had no control over the number of
hours private respondent had to work and the routes he had to take. Therefore, he
concludes that the employer-employee relationship cannot be deemed to exist.
Petitioners contention is not novel. In Martinez v. National Labor Relations
Commission,[11] this Court already ruled that the relationship of taxi owners and taxi drivers
is the same as that between jeepney owners and jeepney drivers under the boundary
system. In both cases, the employer-employee relationship was deemed to exist, viz.:
The relationship between jeepney owners/operators on one hand and jeepney
drivers on the other under the boundary system is that of employer-employee
and not of lessor-lessee. x x x In the lease of chattels[,] the lessor loses
complete control over the chattel leased x x x. In the case of jeepney
owners/operators and jeepney drivers, the former exercise supervision and
control over the latter. The fact that the drivers do not receive fixed wages but
get only the excess of that so-called boundary they pay to the owner/operator
is not sufficient to withdraw the relationship between them from that of
employer and employee. The doctrine is applicable in the present case. Thus,
private respondents were employees x x x because they had been engaged to
perform activities which were usually necessary or desirable in the usual trade
or business of the employer.[12]

Second Issue:

Just Cause

Petitioner also asserts that private respondents involvement in three vehicular

accidents within a span of several months constitutes just cause for his dismissal. It
alleges that, according to the police report concerning the most recent and serious
vehicular mishap, it was private respondent who was at fault and that the city prosecutor
of Quezon City recommended that an Information for reckless imprudence resulting in
damage to property be filed against him.[13]
Petitioner, however, did not submit any proof to support these allegations. Well-
settled is the rule that the employer has the burden of proving that the dismissal of an
employee is for a just cause. The failure of the employer to discharge this burden means
that the dismissal is not justified and that the employee is entitled to reinstatement and
back wages.[14] In this case, petitioner failed to prove any just or authorized cause for his
dismissal. Private respondent, therefore, must be deemed illegally dismissed. [15]
Petitioner contends that he submitted and presented material and competent
documentary evidence consisting of police reports of vehicular accidents of taxicab units
owned by petitioner and driven by private respondent, the repairs and expenses suffered
by the petitioner as a result thereof and the resolution of the [c]ity [p]rosecutor of Quezon
City finding private respondent at fault for the November 4, 1993 vehicular accident
caused by the latter.[16] Adding that the submission of these documents only on appeal
does not diminish their probative value, petitioner cites Article 221 of the Labor Code
which reads:

Article 221. Technical rules not binding and prior resort to amicable
settlement. -- In any proceeding before the Commission or any of the Labor
Arbiters, the rules of procedure prevailing in courts of law and equity shall not
be controlling and it is the spirit and intention of the Code that the Commission
and its members and the Labor Arbiters shall use every and all reasonable
means to ascertain the facts in each case speedily and objectively without
regard to technicalities of law and procedure, all in the interest of due process.
In any proceeding before the Commission or any Labor Arbiter, the parties
may be represented by legal counsel but it shall be the duty of the Chairman,
any Presiding Commissioner or Commissioner or any Labor Arbiter to
exercise complete control of the proceedings at all stages.

Any provision of law to the contrary notwithstanding, the Labor Arbiter shall
exert all efforts towards [t]he amicable settlement of a labor dispute within his
jurisdiction on or before the first hearing. The same rule shall apply to the
Commission in the exercise of its original jurisdiction.

However, a careful examination of both the original Complaint and the Petitioners
Memorandum of Appeal from the labor arbiters Decision reveals that said pieces of
documentary evidence were not mentioned or included therein, [17] but were submitted by
petitioner only when he filed his present petition with this Court. These pieces of evidence
were attached and referred to as Annexes G, H, I, J, K and L of the said petition. Such
factual issues cannot be resolved in a petition for certiorari like the present case, because
the Courts review of NLRC decisions is limited to questions of jurisdiction and grave
abuse of discretion. In PMI Colleges v. NLRC,[18] the Court held:

This Court is definitely not the proper venue to consider this matter for it is not
a trier of facts. x x x Certiorari is a remedy narrow in its scope and inflexible in
character. It is not a general utility tool in the legal workshop. Factual issues
are not a proper subject for certiorari, as the power of the Supreme Court to
review labor cases is limited to the issue of jurisdiction and grave abuse of
discretion. x x x.

Of the same tenor was our disquisition in Ilocos Sur Electric Cooperative, Inc.
v. NLRC where we made plain that:

In certiorari proceedings under Rule 65 of the Rules of Court, judicial review

by this Court does not go so far as to evaluate the sufficiency of evidence
upon which the Labor Arbiter and the NLRC based their determinations, the
inquiry being limited essentially to whether or not said public respondents had
acted without or in excess of [their] jurisdiction or with grave abuse of
discretion.

x x x Our deference to the expertise acquired by quasi-judicial agencies and

the limited scope granted us in the exercise of certiorari jurisdiction restrain us
from going so far as to probe into the correctness of a tribunals evaluation of
evidence, unless there is a palpable mistake and complete disregard thereof
in which case certiorari would be proper. In plain terms,
in certiorariproceedings, we are concerned with mere errors of jurisdiction and
not errors of judgment.

Equally devoid of correctness is petitioners claim that the documents should be

considered, pursuant to Article 221 of the Labor Code which states that technical rules
are not binding in proceedings before the labor arbiters and the NLRC. The Supreme
Court is not a trier of facts; as earlier stated, its jurisdiction in a petition for certiorari, like
the present case, is confined to questions of jurisdiction and grave abuse of
discretion. The unexplained failure of petitioner to present its evidence before the labor
arbiter and the NLRC cannot compel this Court to expand the scope of its review. Indeed,
petitioner has not proffered a sufficient reason for this Court to do so.
Petitioners reliance on Canete v. National Labor Relations Commission[19] is
misplaced. In that case, the documents were submitted to the NLRC before they were
tackled by the Supreme Court.
Private respondents admission that he was involved in the November 4, 1993
accident did not give petitioner a just cause to dismiss him. Mere involvement in an
accident, absent any showing of fault or recklessness on the part of an employee, is not
a valid ground for dismissal.

Third Issue:

No Due Process

Petitioner insists that private respondent was accorded due process, because he was
allowed to explain his side and to show cause why he should still be allowed to act as
one of petitioners drivers.
This does not persuade. The Court has consistently held that in the dismissal of
employees, the twin requirements of notice and hearing are essential elements of due
process. The employer must furnish the worker two written notices: (1) one to apprise him
of the particular acts or omissions for which his dismissal is sought; and (2) the other to
inform him of his employers decision to dismiss him. As to the requirement of a hearing,
the essence of due process lies simply in an opportunity to be heard, and not always and
indispensably in an actual hearing.[20]
In the present case, petitioner failed to present proof, other than its bare
allegations, that it had complied with these requirements. [21] We reiterate: the burden of
proof rests on the employer. Private respondent, in fact, was not given notice that he was
being dismissed. When ordered to explain the vehicular accident that happened on
November 4, 1993, he was not informed that petitioner was contemplating his dismissal
and that his involvement in said vehicular accident was the cause thereof. Private
respondent was merely asked to explain the vehicular accident per se, not his defense
against a charge of dismissal arising from the vehicular accident. He became aware of
his employers intention to dismiss him only when he was actually told not to report for
work anymore.

Fourth Issue:

Strained Relations

Notwithstanding its failure to prove just cause and due process in the dismissal of
private respondent, petitioner seeks to bar his reinstatement by invoking the doctrine of
strained relations. It contends that as a result of private respondents reckless and
incompetent manner of driving x x x, compounded by the damages suffered by petitioner
in terms of repairs, related expenses, and the institution of the instant case, the
relationship between the parties are so strained as to preclude a harmonious working
atmosphere to the prejudice of the petitioner as well as private respondent. [22]
We are not persuaded. Strained relations must be demonstrated as a fact. Petitioner
failed to do so. Its allegation that private respondent was incompetent and reckless in his
manner of driving, which led to the his involvement in three vehicular accidents, is not
supported by the records. As earlier noted, no evidence was properly submitted by
petitioner to prove or give credence to his assertions. Thus, Respondent NLRC ruled:

Despite allegation on the matter, not an iota of proof was presented to

establish the claim. This observation equally applies to the allegation that
complainants, in three (3) occasions had figured in [a] vehicular accident due
to his reckless driving x x x.[23]

Because the claim of petitioner has no factual basis, the doctrine on

strained relations cannot be applied in this case. Moreover, the filing of the Complaint for
illegal dismissal does not by itself justify the invocation of this doctrine. As the Court held
in Capili vs. NLRC:[24]

xxx [T]he doctrine on strained relations cannot be applied indiscriminately

since every labor dispute almost invariably results in strained relations;
otherwise, reinstatement can never be possible simply because some hostility
is engendered between the parties as a result of their disagreement. That is
human nature.

Fifth Issue:
 Reinstatement and Back Wages

Because he was illegally dismissed, private respondent is entitled to reinstatement

and back wages pursuant to Section 279 of the Labor Code, which reads:

Art. 279. Security of Tenure. -- In cases of regular employment, the employer

shall not terminate the services of an employee except for a just cause or
when authorized by this Title. 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.

Interpreting this provision, the Court held in Bustamante v. NLRC[25] that illegally
dismissed employees are entitled to full back wages without conditions or limitations, viz.:

xxx [A] closer adherence to the legislative policy behind Rep. Act No. 6715
points to full backwages as meaning exactly that, i.e., without deducting from
backwages the earnings derived elsewhere by the concerned employee
during the period of his illegal dismissal. In other words, the provision calling
for full backwages to illegally dismissed employees is clear, plain and free
from ambiguity and, therefore, must be applied without attempted or strained
interpretation.

The labor arbiter awarded back wages in the sum of P67,200 based on the following
computation:

11/28/93 - 6/28/94 = 7 mos.

P800.00 x 3 days x 4 weeks = P9,600.00

P9,600 x 7 mos. = P67,200.00[26]

In modifying the foregoing award, the NLRC relied on this other formula:

11/28/93 - 11/28/94 = 12 months

P600.00 x 3 days x 4 weeks = P 7,200.00

P7,200 x 12 months = P86,400.00.[27]

 Although the NLRC adjusted the amount of private respondents monthly income and
the period during which back wages may be awarded, neither the petitioner nor the
private respondent questioned the new computation. Accordingly, we sustain the award
but stress that the back wages ought to be computed from the time of the illegal dismissal
to the time of reinstatement, either actual or in the payroll, without any deduction or
qualification.
WHEREFORE, the petition is hereby DISMISSED for utter lack of merit, and the
assailed Decision and Resolution are hereby AFFIRMED. Costs against petitioners.
SO ORDERED.
Diamond Taxi and/or Bryan Ong vs. Felipe
Llamas, Jr.
G.R. No. 190724

DIAMOND TAXI and/or BRYAN ONG, Petitioners,

- versus -

FELIPE LLAMAS, JR., Respondent.

DECISION
BRION, J.:

In this petition for review on certiorari,

we resolve the challenge to the August 13, 2008 decision

and the November 27, 2009 resolution

of the Court of Appeals (CA) in CA-G.R. CEB-S.P. No. 02623. This CA decision reversed and set
aside the May 30, 2006 resolution

of the National Labor Relations Commission (NLRC) in NLRC Case No. V-000294-06 (RAB
VII-07-1574-05) that dismissed respondent Felipe Llamas, Jr.'s appeal for non-perfection.

The Factual Antecedents

Llamas worked as a taxi driver for petitioner Diamond Taxi, owned and operated by
petitioner Bryan Ong. On July 18, 2005, Llamas filed before the Labor Arbiter (LA) a
complaint for illegal dismissal against the petitioners.

In their position paper, the petitioners denied dismissing Llamas. They claimed that
Llamas had been absent without official leave for several days, beginning July 14, 2005
until August 1, 2005. The petitioners submitted a copy of the attendance logbook to prove
that Llamas had been absent on these cited dates. They also pointed out that Llamas
committed several traffic violations in the years 2000-2005 and that they had issued him
several memoranda for acts of insubordination and refusal to heed management
instructions. They argued that these acts - traffic violations, insubordination and refusal
to heed management instructions - constitute grounds for the termination of Llamas
employment.
Llamas failed to seasonably file his position paper.

On November 29, 2005, the LA rendered a decision

dismissing Llamas complaint for lack of merit. The LA held that Llamas was not dismissed,
legally or illegally. Rather, the LA declared that Llamas left his job and had been absent for
several days without leave.
Llamas received a copy of this LA decision on January 5, 2006. Meanwhile, he filed his
position paper

on December 20, 2005.

In his position paper, Llamas claimed that he failed to seasonably file his position paper
because his previous counsel, despite his repeated pleas, had continuously deferred
compliance with the LAs orders for its submission. Hence, he was forced to secure the
services of another counsel on December 19, 2005 in order to comply with the LAs
directive.

On the merits of his complaint, Llamas alleged that he had a misunderstanding with
Aljuver Ong, Bryans brother and operations manager of Diamond Taxi, on July 13, 2005
(July 13, 2005 incident). When he reported for work on July 14, 2005, Bryan refused to
give him the key to his assigned taxi cab unless he would sign a prepared resignation
letter. He did not sign the resignation letter. He reported for work again on July 15 and
16, 2005, but Bryan insisted that he sign the resignation letter prior to the release of the
key to his assigned taxi cab. Thus, he filed the illegal dismissal complaint.

On January 16, 2006, Llamas filed before the LA a motion for reconsideration of its
November 29, 2005 decision. The LA treated Llamas motion as an appeal per Section 15,
Rule V of the 2005 Revised Rules of Procedure of the NLRC (2005 NLRC Rules) (the
governing NLRC Rules of Procedure at the time Llamas filed his complaint before the LA).

In its May 30, 2006 resolution,

the NLRC dismissed for non-perfection Llamas motion for reconsideration treated as an
appeal. The NLRC pointed out that Llamas failed to attach the required certification of non-
forum shopping per Section 4, Rule VI of the 2005 NLRC Rules.
Llamas moved to reconsider the May 30, 2006 NLRC resolution; he attached the required
certification of non-forum shopping.

When the NLRC denied his motion for reconsideration

in its August 31, 2006 resolution,

Llamas filed before the CA a petition for certiorari.

 The CAs ruling
In its August 13, 2008 decision,

the CA reversed and set aside the assailed NLRC resolution. Citing jurisprudence, the CA
pointed out that non-compliance with the requirement on the filing of a certificate of non-forum
shopping, while mandatory, may nonetheless be excused upon showing of manifest equitable
grounds proving substantial compliance. Additionally, in order to determine if cogent reasons
exist to suspend the rules of procedure, the court must first examine the substantive aspect of
the case.
The CA pointed out that the petitioners failed to prove overt acts showing Llamas clear
intention to abandon his job. On the contrary, the petitioners placed Llamas in a situation
where he was forced to quit as his continued employment has been rendered impossible,
unreasonable or unlikely, i.e., making him sign a resignation letter as a precondition for
giving him the key to his assigned taxi cab. To the CA, the petitioners act amounted to
constructive dismissal. The CA additionally noted that Llamas immediately filed the
illegal dismissal case that proved his desire to return to work and negates the charge of
abandonment.

Further, the CA brushed aside the petitioners claim that Llamas committed several
infractions that warranted his dismissal. The CA declared that the petitioners should have
charged Llamas for these infractions to give the latter an opportunity to explain his side.
As matters then stood, they did not charge him for these infractions; hence, the
petitioners could not have successfully used these as supporting grounds to justify
Llamas dismissal on the ground of abandonment.

As the CA found equitable grounds to take exception from the rule on certificate of non-
forum shopping, it declared that the NLRC had acted with grave abuse of discretion when
it dismissed Llamas appeal purely on a technicality. To the CA, the NLRC should have
considered as substantially compliant with this rule Llamas subsequent submission of
the required certificate with his motion for reconsideration (of the NLRCs May 30, 2006
resolution).

Accordingly, the CA ordered the petitioners to pay Llamas separation pay, full backwages
and other benefits due the latter from the time of the dismissal up to the finality of the
decision. The CA awarded separation pay in lieu of reinstatement because of the resulting
strained work relationship between Llamas and Bryan following the altercation between
the former and the latters brother.

The petitioners filed the present petition after the CA denied their motion for
reconsideration

in the CAs November 27, 2009 resolution.

 The Petition
The petitioners argue that the CA erred when it encroached on the NLRCs exclusive
jurisdiction to review the merits of the LAs decision. To the petitioners, the CA should
have limited its action in determining whether grave abuse of discretion attended the
NLRCs dismissal of Llamas appeal; finding that it did, the CA should have remanded the
case to the NLRC for further proceedings.

Moreover, the petitioners point out that the NLRC did not gravely abuse its discretion
when it rejected Llamas appeal. They argue that the NLRCs action conformed with its
rules and with this Courts decisions that upheld the dismissal of an appeal for failure to
file a certificate of non-forum shopping.

Directly addressing the CAs findings on the dismissal issue, the petitioners argue that
they did not constructively dismiss Llamas. They maintain that Llamas no longer reported
for work because of the several liabilities he incurred that would certainly have, in any
case, warranted his dismissal.

The Case for the Respondent

Llamas argues in his comment

that the CA correctly found that the NLRC acted with grave abuse of discretion when it
maintained its dismissal of his appeal despite his subsequent filing of the certificate of non-
forum shopping. Quoting the CAs ruling, Llamas argues that the NLRC should have given due
course to his appeal to avoid miscarriage of substantial justice.
On the issue of dismissal, Llamas argues that the CA correctly reversed the LAs ruling
that found him not dismissed, legally or illegally. Relying on the CAs ruling, Llamas
points out that the petitioners bore the burden of proving the abandonment charge. In
this case, the petitioners failed to discharge their burden; hence, his dismissal was illegal.

The Courts Ruling

We do not find the petition meritorious.

Preliminary considerations: factual-issue-bar-rule

In this Rule 45 petition for review on certiorari, we review the legal errors that the CA may
have committed in the assailed decision, in contrast with the review for jurisdictional
error undertaken in an original certiorari action. In reviewing the legal correctness of the
CA decision in a labor case made under Rule 65 of the Rules of Court, we examine the CA
decision in the context that it determined the presence or the absence of grave abuse of
discretion in the NLRC decision before it and not on the basis of whether the NLRC
decision, on the merits of the case, was correct. In other words, we have to be keenly aware
that the CA undertook a Rule 65 review, not a review on appeal, of the challenged NLRC
decision. In question form, the question that we ask is: Did the CA correctly determine
whether the NLRC committed grave abuse of discretion in ruling on the case?

In addition, the Courts jurisdiction in a Rule 45 petition for review on certiorari is limited
to resolving only questions of law. A question of law arises when the doubt or controversy
concerns the correct application of law or jurisprudence to a certain set of facts. In
contrast, a question of fact exists when the doubt or controversy concerns the truth or
falsehood of facts.

As presented by the petitioners, the petition before us involves mixed questions of fact
and law, with the core issue being one of fact. Whether the CA, in ruling on the labor case
before it under an original certiorari action, can make its own factual determination
requires the consideration and application of law and jurisprudence; it is essentially a
question of law that a Rule 45 petition properly addresses.

In the context of this case, however, this legal issue is inextricably linked with and cannot
be resolved without the definitive resolution of the core factual issue - whether Llamas
abandoned his work or had been constructively dismissed. As a proscribed question of
fact, we generally cannot address this issue, except to the extent necessary to determine
whether the CA correctly found that the NLRC acted with grave abuse of discretion in
dismissing Llamas appeal on purely technical grounds.

For raising mixed questions of fact and law, we deny the petition outright. Even if this
error were to be disregarded, however, we would still deny the petition as we find the CA
legally correct in reversing the NLRCs resolution on the ground of grave abuse of
discretion.

The CA has ample authority to make its

own factual determination

We agree that remanding the case to the NLRC for factual determination and decision of
the case on the merits would have been, ordinarily, a prudent approach. Nevertheless, the
CAs action on this case was not procedurally wrong and was not without legal and
jurisprudential basis.

In this jurisdiction, courts generally accord great respect and finality to factual findings
of administrative agencies, i.e., labor tribunals, in the exercise of their quasi-judicial
function.

These findings, however, are not infallible. This doctrine espousing comity to administrative
findings of facts cannot preclude the courts from reviewing and, when proper, disregarding
these findings of facts when shown that the administrative body committed grave abuse of
discretion by capriciously, whimsically or arbitrarily disregarding evidence or circumstances of
considerable importance that are crucial or decisive of the controversy.
Hence, in labor cases elevated to it via petition for certiorari, the CA can grant this
prerogative writ when it finds that the NLRC acted with grave abuse of discretion in
arriving at its factual conclusions. To make this finding, the CA necessarily has to view the
evidence if only to determine if the NLRC ruling had basis in evidence. It is in the sense
and manner that the CA, in a Rule 65 certiorari petition before it, had to determine
whether grave abuse of discretion on factual issues attended the NLRCs dismissal of
Llamas appeal. Accordingly, we do not find erroneous the course that the CA took in
resolving Llamas certiorari petition. The CA may resolve factual issues by express legal
mandate and pursuant to its equity jurisdiction.

The NLRC committed grave abuse of

discretion in dismissing Llamas appeal on
mere technicality

Article 223 (now Article 229)

of the Labor Code states that decisions (or awards or orders) of the LA shall become final and
executory unless appealed to the NLRC within ten (10) calendar days from receipt of the
decision. Consistent with Article 223, Section 1, Rule VI of the 2005 NLRC Rules also provides
for a ten (10)-day period for appealing the LAs decision. Under Section 4(a), Rule VI

of the 2005 NLRC Rules, the appeal shall be in the form of a verified memorandum of appeal
and accompanied by proof of payment of the appeal fee, posting of cash or surety bond (when
necessary), certificate of non-forum shopping, and proof of service upon the other parties.
Failure of the appealing party to comply with any or all of these requisites within the
reglementary period will render the LAs decision final and executory.
Indisputably, Llamas did not file a memorandum of appeal from the LAs decision.
Instead, he filed, within the ten (10)-day appeal period, a motion for reconsideration.
Under Section 15, Rule V of the 2005 NLRC Rules, motions for reconsideration from the
LAs decision are not allowed;

they may, however, be treated as an appeal provided they comply with the requirements
for perfecting an appeal. The NLRC dismissed Llamas motion for reconsideration treated
as an appeal for failure to attach the required certificate of non-forum shopping per
Section 4(a), Rule VI of the 2005 NLRC Rules.

The requirement for a sworn certification of non-forum shopping was prescribed by the
Court under Revised Circular 28-91,

as amended by Administrative Circular No. 04-94,

to prohibit and penalize the evils of forum shopping. Revised Circular 28-91, as amended by
Administrative Circular No. 04-94, requires a sworn certificate of non-forum shopping to be
filed with every petition, complaint, application or other initiatory pleading filed before the
Court, the CA, or the different divisions thereof, or any other court, tribunal or agency.
Ordinarily, the infirmity in Llamas appeal would have been fatal and would have justified
an end to the case. A careful consideration of the circumstances of the case, however,
convinces us that the NLRC should, indeed, have given due course to Llamas appeal
despite the initial absence of the required certificate. We note that in his motion for
reconsideration of the NLRCs May 30, 2006 resolution, Llamas attached the required
certificate of non-forum shopping.

Moreover, Llamas adequately explained, in his motion for reconsideration, the

inadvertence and presented a clear justifiable ground to warrant the relaxation of the
rules. To recall, Llamas was able to file his position paper, through his new counsel, only
on December 20, 2005. He hired the new counsel on December 19, 2005 after several
repeated, albeit failed, pleas to his former counsel to submit, on or before October 25,
2005 per the LAs order, the required position paper. On November 29, 2005, however,
the LA rendered a decision that Llamas and his new counsel learned and received a copy
of only on January 5, 2006. Evidently, the LAs findings and conclusions were premised
solely on the petitioners pleadings and evidence. And, while not the fault of the LA,
Llamas, nevertheless, did not have a meaningful opportunity to present his case, refute
the contents and allegations in the petitioners position paper and submit controverting
evidence.

Faced with these circumstances, i.e., Llamas subsequent compliance with the
certification-against-forum-shopping requirement; the utter negligence and inattention
of Llamas former counsel to his pleas and cause, and his vigilance in immediately
securing the services of a new counsel; Llamas filing of his position paper before he
learned and received a copy of the LAs decision; the absence of a meaningful opportunity
for Llamas to present his case before the LA; and the clear merits of his case (that our
subsequent discussion will show), the NLRC should have relaxed the application of
procedural rules in the broader interests of substantial justice.

Indeed, while the requirement as to the certificate of non-forum shopping is mandatory,

this requirement should not, however, be interpreted too literally and thus defeat the
objective of preventing the undesirable practice of forum-shopping.

Under Article 221 (now Article 227)

of the Labor Code, "the Commission and its members and the Labor Arbiters shall use every
and all reasonable means to ascertain the facts in each case speedily and objectively and without
regard to technicalities of law or procedure, all in the interest of due process."

Consistently, we have emphasized that "rules of procedure are mere tools designed to facilitate
the attainment of justice. A strict and rigid application which would result in technicalities that
tend to frustrate rather than promote substantial justice should not be allowed x x x. No
procedural rule is sacrosanct if such shall result in subverting justice."
Ultimately, what should guide judicial action is that a party is given the fullest opportunity to
establish the merits of his action or defense rather than for him to lose life, honor, or property
on mere technicalities.
Then, too, we should remember that "the dismissal of an employees appeal on purely
technical ground is inconsistent with the constitutional mandate on protection to labor."

Under the Constitution

and the Labor Code,

the State is bound to protect labor and assure the rights of workers to security of tenure -
tenurial security being a preferred constitutional right that, under these fundamental guidelines,
technical infirmities in labor pleadings cannot defeat.
In this case, Llamas action against the petitioners concerned his job, his security of
tenure. This is a property right of which he could not and should not be deprived of
without due process.

But, more importantly, it is a right that assumes a preferred position in our legal hierarchy.
Under these considerations, we agree that the NLRC committed grave abuse of discretion
when, in dismissing Llamas appeal, it allowed purely technical infirmities to defeat
Llamas tenurial security without full opportunity to establish his cases merits.

Llamas did not abandon his work; he was

constructively dismissed

"Abandonment is the deliberate and unjustified refusal of an employee to resume his

employment."

It is a form of neglect of duty that constitutes just cause for the employer to dismiss the
employee.
To constitute abandonment of work, two elements must concur: "(1) x x x the employee
must have failed to report for work or must have been absent without valid or justifiable
reason; and (2) x x x there must have been a clear intention [on the part of the employee]
to sever the employer-employee relationship manifested by some overt act."

The employees absence must be accompanied by overt acts that unerringly point to the
employees clear intention to sever the employment relationship.

And, to successfully invoke abandonment, whether as a ground for dismissing an employee or

as a defense, the employer bears the burden of proving the employees unjustified refusal to
resume his employment.

Mere absence of the employee is not enough.

Guided by these parameters, we agree that the petitioners unerringly failed to prove the
alleged abandonment. They did not present proof of some overt act of Llamas that clearly
and unequivocally shows his intention to abandon his job. We note that, aside from their
bare allegation, the only evidence that the petitioners submitted to prove abandonment
were the photocopy of their attendance logbook and the July 15, 2005 memorandum

that they served on Llamas regarding the July 13, 2005 incident. These pieces of evidence, even
when considered collectively, indeed failed to prove the clear and unequivocal intention, on
Llamas part, that the law requires to deem as abandonment Llamas absence from work. Quite
the contrary, the petitioners July 15, 2005 memorandum, in fact, supports, if not strengthens,
Llamas' version of the events that led to his filing of the complaint, i.e., that as a result of the
July 13, 2005 incident, the petitioners refused to give him the key to his assigned taxi cab unless
he would sign the resignation letter.
Moreover, and as the CA pointed out, Llamas lost no time in filing the illegal dismissal
case against them. To recall, he filed the complaint on July 18, 2005 or only two days from
the third time he was refused access to his assigned taxi cab on July 16, 2005. Clearly,
Llamas could not be deemed to have abandoned his work for, as we have previously held,
the immediate filing by the employee of an illegal dismissal complaint is proof enough of
his intention to return to work and negates the employer's charge of abandonment.

To reiterate and emphasize, abandonment is a matter of intention that cannot lightly be

presumed from certain equivocal acts of the employee.
The CA, therefore, correctly regarded Llamas as constructively dismissed for the
petitioners' failure to prove the alleged just cause -abandonment - for his dismissal.
Constructive dismissal exists when there is cessation of work because continued
employment is rendered impossible, unreasonable or unlikely. Constructive dismissal is
a dismissal in disguise or an act amounting to dismissal but made to appear as if it were
not. In constructive dismissal cases, the employer is, concededly, charged with the burden
of proving that its conduct and action were for valid and legitimate grounds.

The petitioners' persistent refusal to give Llamas the key to his assigned taxi cab, on the
condition that he should first sign the resignation letter, rendered, without doubt, his continued
employment impossible, unreasonable and unlikely; it, thus, constituted constructive dismissal.
In sum, the CA correctly found equitable grounds to warrant relaxation of the rule on
perfection of appeal (filing of the certificate of non-forum shopping) as there was patently
absent sufficient proof for the charge of abandonment. Accordingly, we find the CA legally
correct in reversing and setting aside the NLRC's resolution rendered in grave abuse of
discretion.

WHEREFORE, in light of these considerations, we hereby DENY the petition. We

AFFIRM the decision dated August 13, 2008 and the resolution dated November 27, 2009
of the Court of Appeals in CA-G.R. CEB-S.P. No. 02623.
SO ORDERED.
 [G.R. No. 155214. February 13, 2004]

R & E TRANSPORT, INC., and HONORIO ENRIQUEZ, petitioners,

vs. AVELINA P. LATAG, representing her deceased husband,
PEDRO M. LATAG,respondents.

DECISION
PANGANIBAN, J.:

Factual issues may be reviewed by the Court of Appeals (CA) when the
findings of fact of the National Labor Relations Commission (NLRC) conflict with
those of the labor arbiter. By the same token, this Court may review factual
conclusions of the CA when they are contrary to those of the NLRC or of the
labor arbiter.

The Case

Before us is a Petition for Review under Rule 45 of the Rules of Court,

[1]

seeking to nullify the June 3, 2002 Decision and the August 28, 2002
[2]

Resolution of the Court of Appeals in CA-GR SP No. 67998. The appellate

[3]

court disposed as follows:

WHEREFORE, premises considered, the petition is hereby GRANTED. The

assailed Order of public respondent NLRC is SET ASIDE. The March 14,
2001 [D]ecision of the Labor Arbiter a quo is REINSTATED.
[4] [5]

The challenged Resolution denied petitioners Motion for Reconsideration.

The Factual Antecedents

The antecedents of the case are narrated by the CA as follows:

Pedro Latag was a regular employee x x x of La Mallorca Taxi since March 1,

1961. When La Mallorca ceased from business operations, [Latag] x x x transferred to
[petitioner] R & E Transport, Inc. x x x. He was receiving an average daily salary of
five hundred pesos (P500.00) as a taxi driver.
[Latag] got sick in January 1995 and was forced to apply for partial disability with
the SSS, which was granted. When he recovered, he reported for work in September
1998 but was no longer allowed to continue working on account of his old age.

Latag thus asked Felix Fabros, the administrative officer of [petitioners], for his
retirement pay pursuant to Republic Act 7641 but he was ignored. Thus, on December
21, 1998, [Latag] filed a case for payment of his retirement pay before the NLRC.

Latag however died on April 30, 1999. Subsequently, his wife, Avelina Latag,
substituted him. On January 10, 2000, the Labor Arbiter rendered a decision in favor
of [Latag], the dispositive portion of which reads:

WHEREFORE, judgment is hereby rendered ordering x x x LA MALLORCA

TAXI, R & E TRANSPORT, INC. and their owner/chief executive officer HONORIO
ENRIQUEZ to jointly and severally pay MRS. AVELINA P. LATAG the sum
of P277,500.00 by way of retirement pay for her deceased husband, PEDRO M.
LATAG.

SO ORDERED.

On January 21, 2000, [Respondent Avelina Latag,] with her then counsel[,] was
invited to the office of [petitioners] counsel and was offered the amount
of P38,500.00[,] which she accepted. [Respondent] was also asked to sign an already
prepared quitclaim and release and a joint motion to dismiss the case.

After a day or two, [respondent] received a copy of the January 10, 2000 [D]ecision
of the Labor Arbiter.

On January 24, 2000, [petitioners] filed the quitclaim and motion to dismiss.
Thereafter, on May 23, 2000, the Labor Arbiter issued an order, the relevant portion
of which states:

WHEREFORE, the decision stands and the Labor Arbitration Associate of this
Office is directed to prepare the Writ of Execution in due course.

SO ORDERED.

On January 21, 2000, [petitioners] interposed an appeal before the NLRC. On

March 14, 2001, the latter handed down a [D]ecision[,] the decretal portion of which
provides:
WHEREFORE, in view of the foregoing, respondents Appeal is hereby
DISMISSED for failure to post a cash or surety bond, as mandated by law.

SO ORDERED.

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

Respondent appealed to the CA, contending that under Article 223 of the
Labor Code and Section 3, Rule VI of the New Rules of Procedure of the NLRC,
an employers appeal of a decision involving monetary awards may be
perfected only upon the posting of an adequate cash or surety bond.

Ruling of the Court of Appeals

The CA held that the labor arbiters May 23, 2000 Order had referred to
the earlier January 10, 2000 Decision awarding respondent P277,500 as
retirement benefit.
According to the appellate court, because petitioners appeal before the
NLRC was not accompanied by an appropriate cash or surety bond, such
appeal was not perfected. The CA thus ruled that the labor arbiters January
10, 2000 Decision and May 23, 2000 Order had already become final and
executory.
Hence, this Petition. [7]

Issues

Petitioners submit the following issues for our consideration:

I

Whether or not the Court should respect the findings of fact [of] the NLRC as against
[those] of the labor arbiter.

II

Whether or not, in rendering judgment in favor of petitioners, the NLRC committed

grave abuse of discretion.
 III

Whether or not private respondent violated the rule on forum-shopping.

IV

Whether or not the appeal of petitioners from the Order of the labor arbiter to the
NLRC involves [a] monetary award. [8]

In short, petitioners raise these issues: (1) whether the CA acted properly
when it overturned the NLRCs factual findings; (2) whether the rule on forum
shopping was violated; and (3) whether the labor arbiters Order of May 23,
2000 involved a monetary award.

The Courts Ruling

The Petition is partly meritorious.

First Issue:
Factual Findings of the NLRC

Petitioners maintain that the CA erred in disregarding the factual findings of

the NLRC and in deciding to affirm those of the labor arbiter. Allegedly, the
NLRC findings were based on substantial evidence, while those of the labor
arbiter were groundless. Petitioners add that the appellate court should have
refrained from tackling issues of fact and, instead, limited itself to those of
jurisdiction or grave abuse of discretion on the part of the NLRC.
The power of the CA to review NLRC decisions via a Rule 65 petition is now
a settled issue. As early as St. Martin Funeral Homes v. NLRC, we have [9]

definitively ruled that the proper remedy to ask for the review of a decision of
the NLRC is a special civil action for certiorari under Rule 65 of the Rules of
Court, and that such petition should be filed with the CA in strict observance
[10]

of the doctrine on the hierarchy of courts. Moreover, it has already been

[11]

explained that under Section 9 of Batas Pambansa (BP) 129, as amended by

Republic Act 7902, the CA -- pursuant to the exercise of its original jurisdiction
[12]

over petitions for certiorari -- was specifically given the power to pass upon the
evidence, if and when necessary, to resolve factual issues. [13]
 Likewise settled is the rule that when supported by substantial
evidence, factual findings made by quasi-judicial and administrative bodies
[14]

are accorded great respect and even finality by the courts. These findings are
not infallible, though; when there is a showing that they were arrived at
arbitrarily or in disregard of the evidence on record, they may be examined by
the courts. Hence, when factual findings of the NLRC are contrary to those of
[15]

the labor arbiter, the evidentiary facts may be reviewed by the appellate
court. Such is the situation in the present case; thus, the doors to a review are
[16]

open. [17]

The very same reason that behooved the CA to review the factual findings
of the NLRC impels this Court to take its own look at the findings of fact.
Normally, the Supreme Court is not a trier of facts. However, since the findings
[18]

of fact in the present case are conflicting, it waded through the records to find
[19]

out if there was enough basis for the appellate courts reversal of the NLRC
Decision.

Number of Creditable Years

of Service for Retirement Benefits

Petitioners do not dispute the fact that the late Pedro M. Latag is entitled to
retirement benefits. Rather, the bone of contention is the number of years that
he should be credited with in computing those benefits. On the one hand, we
have the findings of the labor arbiter, which the CA affirmed. According to
[20]

those findings, the 23 years of employment of Pedro with La Mallorca Taxi must
be added to his 14 years with R & E Transport, Inc., for a total of 37 years. On
the other, we also have the findings of the NLRC that Pedro must be credited
[21]

only with his service to R & E Transport, Inc., because the evidence shows that
the aforementioned companies are two different entities.
After a careful and painstaking review of the evidence on record, we support
the NLRCs findings. The labor arbiters conclusion -- that Mallorca Taxi and
R & E Transport, Inc., areone and the same entity -- is negated by the
documentary evidence presented by petitioners. Their evidence sufficiently
[22]

shows the following facts: 1) R & E Transport, Inc., was established only in
1978; 2) Honorio Enriquez, its president, was not a stockholder of La Mallorca
Taxi; and 3) none of the stockholders of the latter company hold stocks in the
former. In the face of such evidence, which the NLRC appreciated in its
Decision, it seems that mere surmises and self-serving assertions of
Respondent Avelina Latag formed the bases for the labor arbiters
conclusions as follows:
While [Pedro M. Latag] claims that he worked as taxi driver since March 1961
since the days of the La Mallorca Taxi, which was later renamed R & E Transport,
Inc., [petitioners] limit the employment period to 14 years.

Resolving this matter, we note [respondents] ID (Annex A, [Latag] position

paper), which appears to bear the signature of Miguel Enriquez on the front portion
and the date February 27, 1961 when [x x x Latag] started with the company. We also
note an SSS document (Annex C) which shows that the date of initial coverage of
Pedro Latag, with SSS No. 03-0772155, is February 1961.

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

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

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

doctrine. In Philippine National Bank v. Andrada Electric & Engineering

Company, we said:
[25]

x x x [A]ny application of the doctrine of piercing the corporate veil should be done
with caution. A court should be mindful of the milieu where it is to be applied. It must
be certain that the corporate fiction was misused to such an extent that injustice, fraud,
or crime was committed against another, in disregard of its rights. The wrongdoing
must be clearly and convincingly established; it cannot be presumed. Otherwise, an
injustice that was never unintended may result from an erroneous application.

xx
x
x x
x x x
x

The question of whether a corporation is a mere alter ego is one of fact. Piercing the
veil of corporate fiction may be allowed only if the following elements concur: (1)
control -- not mere stock control, but complete domination -- not only of finances, but
of policy and business practice in respect to the transaction attacked, must have been
such that the corporate entity as to this transaction had at the time no separate mind,
will or existence of its own; (2) such control must have been used by the defendant to
commit a fraud or a wrong to perpetuate the violation of a statutory or other positive
legal duty, or a dishonest and an unjust act in contravention of plaintiffs legal right;
and (3) the said control and breach of duty must have proximately caused the injury or
unjust loss complained of. [26]

Respondent has not shown by competent evidence that one taxi company
had stock control and complete domination over the other or vice versa. In fact,
no evidence was presented to show the alleged renaming of La Mallorca
Taxi to R & E Transport, Inc. The seven-year gap between the time the
former closed shop and the date when the latter came into being also casts
doubt on any alleged intention of petitioners to commit a wrong or to violate a
statutory duty. This lacuna in the evidence compels us to reverse the Decision
of the CA affirming the labor arbiters finding of fact that the basis for
computing Pedros retirement pay should be 37 years, instead of only 14
years.

Validity of the Quitclaim

and Waiver

As to the Quitclaim and Waiver signed by Respondent Avelina Latag, the

appellate court committed no error when it ruled that the document was invalid
and could not bar her from demanding the benefits legally due her husband.
This is not say that all quitclaims are invalid per se. Courts, however, are wary
of schemes that frustrate workers rights and benefits, and look with disfavor
upon quitclaims and waivers that bargain these away.
Courts have stepped in to annul questionable transactions, especially where
there is clear proof that a waiver, for instance, was wangled from an
unsuspecting or a gullible person; or where the agreement or settlement was
unconscionable on its face. A quitclaim is ineffective in barring recovery of the full
[27]

measure of a workers rights, and the acceptance of benefits therefrom does

not amount to estoppel. Moreover, a quitclaim in which the consideration is
[28]

scandalously low and inequitable cannot be an obstacle to the pursuit of a

workers legitimate claim. [29]

Undisputably, Pedro M. Latag was credited with 14 years of service with R

& E Transport, Inc. Article 287 of the Labor Code, as amended by Republic Act
No. 7641, provides:
[30]
Art. 287. Retirement. - x x x

x x
x
x x
x x x x

In the absence of a retirement plan or agreement providing for retirement benefits

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

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

xx
x
x x
x x x
x (Italics supplied)
The rules implementing the New Retirement Law similarly provide the
above-mentioned formula for computing the one-half month salary. Since [31]

Pedro was paid according to the boundary system, he is not entitled to the
13th month and the service incentive pay; hence, his retirement pay should
[32] [33]

be computed on the sole basis of his salary.

It is accepted that taxi drivers do not receive fixed wages, but retain only
those sums in excess of the boundary or fee they pay to the owners or
operators of their vehicles. Thus, the basis for computing their benefits should
[34]

be the average daily income. In this case, the CA found that Pedro was earning
an average of five hundred pesos (P500) per day. We thus compute his
retirement pay as follows: P500 x 15 days x 14 years of service equals P105,000.
Compared with this amount, the P38,850 he received, which represented just
over one third of what was legally due him, was unconscionable.

Second Issue:
 Was There Forum Shopping?

Also assailed are the twin appeals that two different lawyers filed for
respondent before the CA. Petitioners argue that instead of accepting her
explanation, the appellate court should have dismissed the appeals outright for
violating the rule on forum shopping.
Forum shopping is the institution of two or more actions or proceedings
grounded on the same cause, on the supposition that one or the other court
would render a favorable disposition. Such act is present when there is an
[35]

identity of parties, rights or causes of action, and reliefs sought in two or more
pending cases. It is usually resorted to by a party against whom an adverse
[36]

judgment or order has been issued in one forum, in an attempt to seek and
possibly to get a favorable opinion in another forum, other than by an appeal or
a special civil action for certiorari. [37]

We find, as the CA did, that respondent has adequately explained why she
[38]

had filed two appeals before the appellate court. In the August 5, 2002
Affidavit that she attached as Annex A to her Compliance to Show Cause
[39]

Order with Comment on petitioners Motion for Reconsideration, she averred

[40]

that she had sought the services of another counsel to file her Petition for
certiorari before the CA. She did so after her original counsel had asked for an
extension of time to file the Petition because of time constraints and a
tremendous workload, only to discover later that the original counsel had filed
a similar Petition.
We cannot fault respondent for her tenacity. Besides, to disallow her appeal
would not be in keeping with the policy of labor laws to shun highly technical
[41]

procedural laws in the higher interest of justice.

Third Issue:
Monetary Award

Petitioners contention is that the labor arbiters January 10, 2000

Decision was supplanted by the Compromise Agreement that had preceded the
formers official release to, and receipt by, the parties. It appears from the
[42] [43]

records that they had entered into an Amicable Settlement on January 21, 2000;
that based on that settlement, respondent filed a Motion to Dismiss on January
24, 2000, before the labor arbiter who officially released on the same day his
Decision dated January 10, 2000; that upon receipt of a copy thereof,
respondent filed a Manifestation and Motion to Set Aside the Motion to Dismiss;
and that the labor arbiter subsequently calendared the case for conference,
held hearings thereon, and required the parties to exchange positions -- by way
of comments, replies and rejoinders -- after which he handed down his May 23,
2000 Order.
Under the circumstances, the case was in effect reopened by the
proceedings held after respondent had filed her Manifestation and Motion to
Set Aside the Motion to Dismiss. This ruling is in accordance with the fourth
paragraph of Section 2, Rule V of the New Rules of Procedure of the
NLRC, which therefore correctly held as follows:
[44]

x x x Thus, the further hearings conducted thereafter, to determine the validity of

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

We cannot concur, however, in petitioners other contention that the May

23, 2000 Order did not involve a monetary award. If the amicable settlement
between the parties had rendered the January 10, 2000 Decision functus oficio,
then it follows that the monetary award stated therein was reinstated -- by
reference -- by the aforementioned Order. The appeal from the latter should
perforce have followed the procedural requirements under Article 223 of the
Labor Code.
As amended, this provision explicitly provides that an appeal from the labor
arbiters decision, award or order must be made within ten (10) calendar days
from receipt of a copy thereof by the party intending to appeal it; and, if the
judgment involves a monetary award, an appeal by the employer may be
perfected only upon the posting of a cash or surety bond. Such cash or bond
must have been issued by a reputable bonding company duly accredited by the
NLRC in the amount equivalent to the monetary award stated in the judgment.
Sections 1, 3 and 6 of Rule VI of the New Rules of Procedure of the NLRC
implement this Article.
 Indeed, this Court has repeatedly ruled that the perfection of an appeal in
the manner and within the period prescribed by law is not only mandatory but
jurisdictional, and the failure to perfect an appeal has the effect of rendering the
judgment final and executory. Nonetheless, procedural lapses may be
[46]

disregarded because of fundamental considerations of substantial justice; or [47]

because of the special circumstances of the case combined with its legal merits
or the amount and the issue involved. [48]

The requirement to post a bond to perfect an appeal has also been relaxed
in cases when the amount of the award has not been included in the decision
of the labor arbiter. Besides, substantial justice will be better served in the
[49]

present case by allowing petitioners appeal to be threshed out on the

merits, especially because of serious errors in the factual conclusions of the
[50]

labor arbiter as to the award of retirement benefits.

WHEREFORE, this Petition is partly GRANTED. The Decision of the Court

of Appeals is MODIFIED by crediting Pedro M. Latag with 14 years of service.
Consequently, he is entitled to retirement pay, which is hereby computed
at P105,000 less the P38,850 which has already been received by respondent,
plus six (6) percent interest thereon from December 21, 1998 until its full
payment. No costs.
SO ORDERED.
G.R. No. L-6339 April 20, 1954

MANUEL LARA, ET AL., plaintiffs-appellants,

vs.
PETRONILO DEL ROSARIO, JR., defendant-appellee.

Manansala and Manansala for appellants.

Ramon L. Resurreccion for appellee.

MONTEMAYOR, J.:

In 1950 defendant Petronilo del Rosario, Jr., owner of twenty-five taxi cabs or cars, operated a taxi
business under the name of "Waval Taxi." He employed among others three mechanics and 49
chauffeurs or drivers, the latter having worked for periods ranging from 2 to 37 months. On
September 4, 1950, without giving said mechanics and chauffeurs 30 days advance notice, Del
Rosario sold his 25 units or cabs to La Mallorca, a transportation company, as a result of which,
according to the mechanics and chauffeurs above-mentioned they lost their jobs because the La
Mallorca failed to continue them in their employment. They brought this action against Del Rosario to
recover compensation for overtime work rendered beyond eight hours and on Sundays and legal
holidays, and one month salary (mesada) provided for in article 302 of the Code of Commerce
because the failure of their former employer to give them one month notice. Subsequently, the three
mechanics unconditionally withdrew their claims. So only the 49 drivers remained as plaintiffs. The
defendant filed a motion for dismissal of the complaint on the ground that it stated no cause of action
and the trial court for the time being denied the motion saying that it will be considered when the
case was heard on the merits. After trial the complaint was dismissed. Plaintiffs appealed from the
order of dismissal to the Court of Appeals which Tribunal after finding only questions of law are
involved, certified the case to us.

The parties are agreed that the plaintiffs as chauffeurs received no fixed compensation based on the
hours or the period of time that they worked. Rather, they were paid on the commission basis, that is
to say, each driver received 20 per cent of the gross returns or earnings from the operation of his
taxi cab. Plaintiffs claim that as a rule, each drive operated a taxi 12 hours a day with gross earnings
ranging from P20 to P25, receiving therefrom the corresponding 20 per cent share ranging from P4
to P5, and that in some cases, especially during Saturdays, Sundays, and holidays when a driver
worked 24 hours a day he grossed from P40 to P50, thereby receiving a share of from P8 to P10 for
the period of twenty-four hours.

The reason given by the trial court in dismissing the complaint is that the defendant being engaged
in the taxi or transportation business which is a public utility, came under the exception provided by
the Eight-Hour Labor Law (Commonwealth Act No. 444); and because plaintiffs did not work on a
salary basis, that is to say, they had no fixed or regular salary or remuneration other than the 20 per
cent of their gross earnings "their situation was therefore practically similar to piece workers and
hence, outside the ambit of article 302 of the Code of Commerce."

For purposes of reference we are reproducing the pertinent provisions of the Eight-Hour Labor Law,
namely, sections 1 to 4.

SECTION 1. The legal working day for any person employed by another shall not be more
than eight hours daily. When the work is not continuous, the time during which the laborer is
not working and can leave his working place and can rest completely shall not be counted.
 SEC. 2. This Act shall apply to all persons employed in any industry or occupation, whether
public or private, with the exception of farm laborers, laborers who prefer to be paid on piece
work basis, domestic servants and persons in the personal service of another and members
of the family of the employer working for him.

SEC. 3. Work may be performed beyond eight hours a day in case of actual or impending
emergencies, caused by serious accidents, fire flood, typhoon, earthquakes, epidemic, or
other disaster or calamity in order to prevent loss of life and property or imminent danger to
public safety; or in case of urgent work to be performed on the machines, equipment, or
installations in order to avoid a serious loss which the employer would otherwise suffer, or
some other just cause of a similar nature; but in all cases the laborers and the employees
shall be entitled to receive compensation for the overtime work performed at the same rate
as their regular wages or salary, plus at least twenty-five per centum additional.

In case of national emergency the Government is empowered to establish rules and

regulations for the operation of the plants and factories and to determine the wages to be
paid the laborers.

SEC. 4. No person, firm, or corporation, business establishment or place or center of work

shall compel an employee or laborer to work during Sundays and legal holidays, unless he is
paid an additional sum of at least twenty-five per centum of his regular
remuneration: Provided however, That this prohibition shall not apply to public utilities
performing some public service such as supplying gas, electricity, power, water, or providing
means of transportation or communication.

Under section 4, as a public utility, the defendant could have his chauffeurs work on Sundays and
legal holidays without paying them an additional sum of at least 25 per cent of their regular
remuneration: but that with reference only to work performed on Sundays and holidays. If the work
done on such days exceeds 8 hours a day, then the Eight-Hour Labor Law would operate, provided
of course that plaintiffs came under section 2 of the said law. So that the question to be decided here
is whether or not plaintiffs are entitled to extra compensation for work performed in excess of 8 hours
a day, Sundays and holidays included.

It will be noticed that the last part of section 3 of Commonwealth Act 444 provides for extra
compensation for over-time work "at the same rate as their regular wages or salary, plus at least
twenty-five per centum additional'" and that section 2 of the same act excludes application thereof
laborers who preferred to be on piece work basis.This connotes that a laborer or employee with no
fixed salary, wages or remuneration but receiving as compensation from his employer uncertain and
variable amount depending upon the work done or the result of said work (piece work) irrespective of
the amount of time employed, is not covered by the Eight-Hour Labor Law and is not entitled to extra
compensation should he work in excess of 8 hours a day. And this seems to be the condition of
employment of the plaintiffs. A driver in the taxi business of the defendant, like the plaintiffs, in one
day could operate his taxi cab eight hours, or less than eight hours or in excess of 8 hours, or even
24 hours on Saturdays, Sundays, and holidays, with no limit or restriction other than his desire,
inclination and state of health and physical endurance. He could drive continuously or intermittently,
systematically or haphazardly, fast or slow, etc. depending upon his exclusive wish or inclination.
One day when he feels strong, active and enthusiastic he works long, continuously, with diligence
and industry and makes considerable gross returns and receives as much as his 20 per cent
commission. Another day when he feels despondent, run down, weak or lazy and wants to rest
between trips and works for less number of hours, his gross returns are less and so is his
commission. In other words, his compensation for the day depends upon the result of his work,
which in turn depends on the amount of industry, intelligence and experience applied to it, rather
than the period of time employed. In short, he has no fixed salary or wages. In this we agree with the
learned trial court presided by Judge Felicisimo Ocampo which makes the following findings and
observations of this point.

. . . As already stated, their earnings were in the form of commission based on the gross
receipts of the day. Their participation in most cases depended upon their own industry. So
much so that the more hours they stayed on the road, the greater the gross returns and the
higher their commissions. They have no fixed hours of labor. They can retire at pleasure,
they not being paid a fixed salary on the hourly, daily, weekly or monthly basis.

It results that the working hours of the plaintiffs as taxi drivers were entirely characterized by
its irregularity, as distinguished from the specific regular remuneration predicated on specific
and regular hours of work of factories and commercial employees.

In the case of the plaintiffs, it is the result of their labor, not the labor itself, which determines
their commissions. They worked under no compulsion of turning a fixed income for each
given day. . . ..

In an opinion dated June 1, 1939 (Opinion No. 115) modified by Opinion No. 22, series 1940, dated
June 11, 1940, the Secretary of Justice held that chauffeurs of the Manila Yellow Taxicab Co. who
"observed in a loose way certain working hours daily," and "the time they report for work as well as
the time they leave work was left to their discretion.," receiving no fixed salary but only 20 per cent of
their gross earnings, may be considered as piece workers and therefore not covered by the
provisions of the Eight-Hour Labor Law.

The Wage Administration Service of the Department of Labor in its Interpretative Bulletin No. 2 dated
May 28, 1953, under "Overtime Compensation," in section 3 thereof entitled Coverage, says:

The provisions of this bulletin on overtime compensation shall apply to all persons employed
in any industry or occupation, whether public or private, with the exception of farm laborers,
non-agricultural laborers or employees who are paid on piece work, contract, pakiao, task
or commission basis, domestic servants and persons in the personal service of another and
members of the family of the employer working for him.

From all this, to us it is clear that the claim of the plaintiffs-appellants for overtime compensation
under the Eight-Hour Labor Law has no valid support.

As to the month pay (mesada) under article 302 of the Code of Commerce, article 2270 of the new
Civil Code (Republic Act 386) appears to have repealed said Article 302 when it repealed the
provisions of the Code of Commerce governing Agency. This repeal took place on August 30, 1950,
when the new Civil Code went into effect, that is, one year after its publication in the Official Gazette.
The alleged termination of services of the plaintiffs by the defendant took place according to the
complaint on September 4, 1950, that is to say, after the repeal of Article 302 which they invoke.
Moreover, said Article 302 of the Code of Commerce, assuming that it were still in force speaks of
"salary corresponding to said month." commonly known as "mesada." If the plaintiffs herein had no
fixed salary either by the day, week or month, then computation of the month's salary payable would
be impossible. Article 302 refers to employees receiving a fixed salary. Dr. Arturo M. Tolentino in his
book entitled "Commentaries and Jurisprudence on the Commercial Laws of the Philippines," Vol. 1,
4th edition, p. 160, says that article 302 is not applicable to employees without fixed salary. We
quote
 Employees not entitled to indemnity. This article refers only to those who are engaged
under salary basis, and not to those who only receive compensation equivalent to whatever
service they may render. (1 Malagarriga 314, citing decision of Argentina Court of Appeals
on Commercial Matters.)

In view of the foregoing, the order appealed from is hereby affirmed, with costs against appellants.

Pablo, Bengzon, Padilla, Reyes, Jugo, Bautista Angelo, Labrador, Concepcion, and Diokno,
JJ., concur.
Paras, C.J., concurs in the result.