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WAGES G.R. No.

172161 March 2, 2011

SLL INTERNATIONAL CABLES SPECIALIST and SONNY L. LAGON, Petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, 4th DIVISION, ROLDAN LOPEZ, EDGARDO ZUIGA and DANILO CAETE, Respondents. DECISION MENDOZA, J.: Assailed in this petition for review on certiorari are the January 11, 2006 Decision1 and the March 31, 2006 Resolution2 of the Court of Appeals (CA), in CA-G.R. SP No. 00598 which affirmed with modification the March 31, 2004 Decision 3 and December 15, 2004 Resolution4 of the National Labor Relations Commission (NLRC). The NLRC Decision found the petitioners, SLL International Cables Specialist (SLL) and its manager, Sonny L. Lagon(petitioners), not liable for the illegal dismissal of Roldan Lopez, Danilo Caete and Edgardo Zuiga (private respondents) but held them jointly and severally liable for payment of certain monetary claims to said respondents. A chronicle of the factual antecedents has been succinctly summarized by the CA as follows: Sometime in 1996, and January 1997, private respondents Roldan Lopez (Lopez for brevity) and Danilo Caete (Caete for brevity), and Edgardo Zuiga (Zuiga for brevity) respectively, were hired by petitioner Lagon as apprentice or trainee cable/lineman. The three were paid the full minimum wage and other benefits but since they were only trainees, they did not report for work regularly but came in as substitutes to the regular workers or in undertakings that needed extra workers to expedite completion of work. After their training, Zuiga, Caete and Lopez were engaged as project employees by the petitioners in their Islacom project in Bohol. Private respondents started on March 15, 1997 until December 1997. Upon the completion of their project, their employment was also terminated. Private respondents received the amount of P145.00, the minimum prescribed daily wage for Region VII. In July 1997, the amount of P145 was increased to P150.00 by the Regional Wage Board (RWB) and in October of the same year, the latter was increased to P155.00. Sometime in March 1998, Zuiga and Caete were engaged again by Lagon as project employees for its PLDT Antipolo, Rizal project, which ended sometime in (sic) the late September 1998. As a consequence, Zuiga and Caetes employment was terminated. For this project, Zuiga and Caete received only the wage of P145.00 daily. The minimum prescribed wage for Rizal at that time was P160.00. Sometime in late November 1998, private respondents re-applied in the Racitelcom project of Lagon in Bulacan. Zuiga and Caete were re-employed. Lopez was also hired for the said specific project. For this, private respondents received the wage of P145.00. Again, after the completion of their project in March 1999, private respondents went home to Cebu City. On May 21, 1999, private respondents for the 4th time worked with Lagons project in Camarin, Caloocan City with Furuka wa Corporation as the general contractor. Their contract would expire on February 28, 2000, the period of completion of the project. From May 21, 1997-December 1999, private respondents received the wage ofP145.00. At this time, the minimum prescribed rate for Manila was P198.00. In January to February 28, the three received the wage of P165.00. The existing rate at that time was P213.00. For reasons of delay on the delivery of imported materials from Furukawa Corporation, the Camarin project was not completed on the scheduled date of completion. Face[d] with economic problem[s], Lagon was constrained to cut down the overtime work of its worker[s][,] including private respondents. Thus, when requested by private respondents on February 28, 2000 to work overtime, Lagon refused and told private respondents that if they insist, they would have to go home at their own expense and that they would not be given anymore time nor allowed to stay in the quarters. This prompted private respondents to leave their work and went home to Cebu. On March 3, 2000, private respondents filed a complaint for illegal dismissal, non-payment of wages, holiday pay, 13th month pay for 1997 and 1998 and service incentive leave pay as well as damages and attorneys fees. In their answers, petitioners admit employment of private respondents but claimed that the latter were only project employees[,] for their services were merely engaged for a specific project or undertaking and the same were covered by contracts duly signed by private respondents. Petitioners further alleged that the food allowance ofP63.00 per day as well as private respondents allowance for lodging house, transportation, electricity, water and snacks allowance should be added to their basic pay. With these, petitioners claimed that private respondents received higher wage rate than that prescribed in Rizal and Manila. Lastly, petitioners alleged that since the workplaces of private respondents were all in Manila, the complaint should be filed there. Thus, petitioners prayed for the dismissal of the complaint for lack of jurisdiction and utter lack of merit. (Citations omitted.)

On January 18, 2001, Labor Arbiter Reynoso Belarmino (LA) rendered his decision5 declaring that his office had jurisdiction to hear and decide the complaint filed by private respondents. Referring to Rule IV, Sec. 1 (a) of the NLRC Rules of Procedure prevailing at that time,6 the LA ruled that it had jurisdiction because the "workplace," as defined in the said rule, included the place where the employee was supposed to report back after a temporary detail, assignment or travel, which in this case was Cebu. As to the status of their employment, the LA opined that private respondents were regular employees because they were repeatedly hired by petitioners and they performed activities which were usual, necessary and desirable in the business or trade of the employer. With regard to the underpayment of wages, the LA found that private respondents were underpaid. It ruled that the free board and lodging, electricity, water, and food enjoyed by them could not be included in the computation of their wages because these were given without their written consent. The LA, however, found that petitioners were not liable for illegal dismissal. The LA viewed private respondents act of goin g home as an act of indifference when petitioners decided to prohibit overtime work.7 In its March 31, 2004 Decision, the NLRC affirmed the findings of the LA. In addition, the NLRC noted that not a single report of project completion was filed with the nearest Public Employment Office as required by the Department of Labor and Employment (DOLE) Department Order No. 19, Series of 1993. 8 The NLRC later denied9 the motion for reconsideration10 subsequently filed by petitioners. When the matter was elevated to the CA on a petition for certiorari, it affirmed the findings that the private respondents were regular employees. It considered the fact that they performed functions which were the regular and usual business of petitioners. According to the CA, they were clearly members of a work pool from which petitioners drew their project employees. The CA also stated that the failure of petitioners to comply with the simple but compulsory requirement to submit a report of termination to the nearest Public Employment Office every time private respondents employment was terminated was proof that the latter were not project employees but regular employees. The CA likewise found that the private respondents were underpaid. It ruled that the board and lodging, electricity, water, and food enjoyed by the private respondents could not be included in the computation of their wages because these were given without their written consent. The CA added that the private respondents were entitled to 13th month pay. The CA also agreed with the NLRC that there was no illegal dismissal. The CA opined that it was the petitioners prerogative to grant or deny any request for overtime work and that the private respondents act of leaving the workplace after their request was denied was an act of abandonment. In modifying the decision of the labor tribunal, however, the CA noted that respondent Roldan Lopez did not work in the Antipolo project and, thus, was not entitled to wage differentials. Also, in computing the differentials for the period January and February 2000, the CA disagreed in the award of differentials based on the minimum daily wage of P223.00, as the prevailing minimum daily wage then was only P213.00. Petitioners sought reconsideration but the CA denied it in its March 31, 2006 Resolution. 11 In this petition for review on certiorari,12 petitioners seek the reversal and setting aside of the CA decision anchored on this lone: GROUND/ASSIGNMENT OF ERROR THE PUBLIC RESPONDENT NLRC COMMITTED A SERIOUS ERROR IN LAW IN AWARDING WAGE DIFFERENTIALS TO THE PRIVATE COMPLAINANTS ON THE BASES OF MERE TECHNICALITIES, THAT IS, FOR LACK OF WRITTEN CONFORMITY x x x AND LACK OF NOTICE TO THE DEPARTMENT OF LABOR AND EMPLOYMENT (DOLE)[,] AND THUS, THE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING WITH MODIFICATION THE NLRC DECISION IN THE LIGHT OF THE RULING IN THE CASE OF JENNY M. AGABON and VIRGILIO AGABON vs, NLRC, ET AL., GR NO. 158963, NOVEMBER 17, 2004, 442 SCRA 573, [AND SUBSEQUENTLY IN THE CASE OF GLAXO WELLCOME PHILIPPINES, INC. VS. NAGAKAKAISANG EMPLEYADO NG WELLCOME-DFA (NEW DFA), ET AL., GR NO. 149349, 11 MARCH 2005], WHICH FINDS APPLICATION IN THE INSTANT CASE BY ANALOGY.13 Petitioners reiterated their position that the value of the facilities that the private respondents enjoyed should be included in the computation of the "wages" received by them. They argued that the rulings in Agabon v. NLRC 14and Glaxo Wellcome Philippines, Inc. v. Nagkakaisang Empleyado Ng Wellcome-DFA15 should be applied by analogy, in the sense that the lack of written acceptance of the employees of the facilities enjoyed by them should not mean that the value of the facilities could not be included in the computation of the private respondents "wages." On November 29, 2006, the Court resolved to issue a Temporary Restraining Order (TRO) enjoining the public respondent from enforcing the NLRC and CA decisions until further orders from the Court.

After a thorough review of the records, however, the Court finds no merit in the petition. This petition generally involves factual issues, such as, whether or not there is evidence on record to support the findings of the LA, the NLRC and the CA that private respondents were project or regular employees and that their salary differentials had been paid. This calls for a re-examination of the evidence, which the Court cannot entertain. Settled is the rule that factual findings of labor officials, who are deemed to have acquired expertise in matters within their respective jurisdiction, are generally accorded not only respect but even finality, and bind the Court when supported by substantial evidence. It is not the Courts function to asses s and evaluate the evidence all over again, particularly where the findings of both the Labor tribunals and the CA concur. 16 As a general rule, on payment of wages, a party who alleges payment as a defense has the burden of proving it. 17Specifically with respect to labor cases, the burden of proving payment of monetary claims rests on the employer, the rationale being that the pertinent personnel files, payrolls, records, remittances and other similar documents which will show that overtime, differentials, service incentive leave and other claims of workers have been paid are not in the possession of the worker but in the custody and absolute control of the employer.18 In this case, petitioners, aside from bare allegations that private respondents received wages higher than the prescribed minimum, failed to present any evidence, such as payroll or payslips, to support their defense of payment. Thus, petitioners utterly failed to discharge the onus probandi. Private respondents, on the other hand, are entitled to be paid the minimum wage, whether they are regular or non-regular employees. Section 3, Rule VII of the Rules to Implement the Labor Code19 specifically enumerates those who are not covered by the payment of minimum wage. Project employees are not among them. On whether the value of the facilities should be included in the computation of the "wages" received by private respondents, Section 1 of DOLE Memorandum Circular No. 2 provides that an employer may provide subsidized meals and snacks to his employees provided that the subsidy shall not be less that 30% of the fair and reasonable value of such facilities. In such cases, the employer may deduct from the wages of the employees not more than 70% of the value of the meals and snacks enjoyed by the latter, provided that such deduction is with the written authorization of the employees concerned. Moreover, before the value of facilities can be deducted from the employees wages, the following requisites must all be attendant: first, proof must be shown that such facilities are customarily furnished by the trade; s econd, the provision of deductible facilities must be voluntarily accepted in writing by the employee; and finally, facilities must be charged at reasonable value.20 Mere availment is not sufficient to allow deductions from employees wages. 21 These requirements, however, have not been met in this case. SLL failed to present any company policy or guideline showing that provisions for meals and lodging were part of the employees salaries. It also failed to provide proof of the employees written authorization, much less show how they arrived at their valuations. At any rate, it is not even clear whether private respondents actually enjoyed said facilities. The Court, at this point, makes a distinction between "facilities" and "supplements." It is of the view that the food and lodging, or the electricity and water allegedly consumed by private respondents in this case were not facilities but supplements. In the case of AtokBig Wedge Assn. v. Atok-Big Wedge Co.,22 the two terms were distinguished from one another in this wise: "Supplements," therefore, constitute extra remuneration or special privileges or benefits given to or received by the laborers over and above their ordinary earnings or wages. "Facilities," on the other hand, are items of expense necessary for the laborer's and his family's existence and subsistence so that by express provision of law (Sec. 2[g]), they form part of the wage and when furnished by the employer are deductible therefrom, since if they are not so furnished, the laborer would spend and pay for them just the same. In short, the benefit or privilege given to the employee which constitutes an extra remuneration above and over his basic or ordinary earning or wage is supplement; and when said benefit or privilege is part of the laborers' basic wages, it is a facility. The distinction lies not so much in the kind of benefit or item (food, lodging, bonus or sick leave) given, but in the purpose for which it is given. 23 In the case at bench, the items provided were given freely by SLL for the purpose of maintaining the efficiency and health of its workers while they were working at their respective projects. 1avvphi1 For said reason, the cases of Agabon and Glaxo are inapplicable in this case. At any rate, these were cases of dismissal with just and authorized causes. The present case involves the matter of the failure of the petitioners to comply with the payment of the prescribed minimum wage.

The Court sustains the deletion of the award of differentials with respect to respondent Roldan Lopez. As correctly pointed out by the CA, he did not work for the project in Antipolo. WHEREFORE, the petition is DENIED. The temporary restraining order issued by the Court on November 29, 2006 is deemed, as it is hereby ordered, DISSOLVED. SO ORDERED. JOSE CATRAL MENDOZA Associate Justice WE CONCUR: ANTONIO T. CARPIO Associate Justice Chairperson PRESBITERO J. VELASCO, JR.* Associate Justice ROBERTO A. ABAD Associate Justice ATTESTATION I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division. ANTONIO T. CARPIO Associate Justice Chairperson, Second Division CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution and the Division Chairpersons Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Divi sion. RENATO C. CORONA Chief Justice MARIANO C. DEL CASTILLO** Associate Justice

Footnotes
*

Designated as additional member in lieu of Associate Justice Antonio Eduardo B. Nachura per Special Order No. 933 dated January 24, 2011.
**

Designated as additional member in lieu of Associate Justice Diosdado M. Peralta per Special Order No. 954 dated February 21, 2011.
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Rollo, pp. 48-60. Penned by Associate Justice Vicente L. Yap and concurred in by Associate Justice Arsenio J. Magpale and Associate Justice Apolinario D. Bruselas, Jr.
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Id. at 62-63. Id. at 155-164.

Id. at 171-172. Id. at 123-134.

Section 1. Venue. (a) All cases which Labor Arbiters have authority to hear and decide may be filed in the Regional Arbitration Branch having jurisdiction over the workplace of the complaint/petitioner. For purposes of venue, workplace shall be understood as the place or locality where the employee is regularly assigned when the cause of action arose. It shall include the place where the employee is supposed to report back after a temporary detail, assignment or travel. In the case of field employees, as well as ambulant or itinerant workers, their workplace is where they are regularly assigned, or where they are supposed to regularly receive their salaries/wages or work instructions from, and report the results of their assignment to, their employers.
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Rollo, p. 130.

2.2 Indicators of project employment. Either one or more of the following circumstances, among other, may be considered as indicators that an employee is a project employee. (a) The duration of the specific/identified undertaking for which the worker is engaged is reasonably determinable. (b) Such duration, as well as the specific work/service to be performed, is defined in an employment agreement and is made clear to the employee at the time of hiring. (c) The work/service performed by the employee is in connection with the particular project/undertaking for which he is engaged. (d) The employee, while not employed and awaiting engagement, is free to offer his services to any other employer. (e) The termination of his employment in the particular project/undertaking is reported to the Department of Labor and Employment (DOLE) Regional Office having jurisdiction over the workplace within 30 days following the date of his separation from work, using the prescribed form o n employees terminations/dismissals/suspensions. (f) An undertaking in the employment contract by the employer to pay completion bonus to the project employee as practiced by most construction companies.
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Rollo, pp. 171-172. Id. at 165-170. Id. at 62-63. Id. at 10-172. Id. at 22. 485 Phil. 248 (2004). 493 Phil.410 (2005). Stamford Marketing Corp. v. Julian, 468 Phil 34 (2004).

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Far East Bank and Trust Company v. Querimit, 424 Phil. 721 (2002); Sevillana v. I.T. (International) Corp., 408 Phil. 570 (2001); Villar v. National Labor Relations Commission, 387 Phil. 706 (2000); Audion Electric Co, Inc. v. NLRC, 367 Phil. 620 (1999); Ropali Trading Corporation v. National Labor Relations Commission, 357 Phil. 314 (1998); National Semiconductor (HK) Distribution, Ltd. v. National Labor Relations Commission (4th Division) , 353 Phil. 551 (1998); Pacific Maritime Services, Inc. v. Ranay, 341 Phil. 716 (1997); Jimenez v. National Labor Relations Commission, 326 Phil. 89

(1996); Philippine National Bank v. Court of Appeals, 326 Phil. 46 (1996); Good Earth Emporium, Inc. v. Court of Appeals, G.R. No. 82797, February 27, 1991, 194 SCRA 544, 552; Villaflor v. Court of Appeals, G.R. No. 46210, December 26, 1990, 192 SCRA 680, 690; Biala v. Court of Appeals, G.R. No. 43503, October 31, 1990, 191 SCRA 50, 59;Servicewide Specialists, Inc. v. Intermediate Appellate Court, 255 Phil. 787 (1989).
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Dansart Security Force & Allied Services Company v. Bagoy , G.R. No. 168495, July 2, 2010; G & M Philippines, Inc. v. Cruz, 496 Phil. 119 (2005); Villar v. National Labor Relations Commission, 387 Phil. 706.
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Sec. 3. Coverage. This Rule shall not apply to the following persons: (a) Household or domestic helpers, including family drivers and persons in the personal service of another; (b) Homeworkers who are engaged in needlework; (c) Workers employed in any establishment duly registered with the National Cottage Industries and Development Authority in accordance with R.A. 3470, provided that such workers perform the work in their respective homes; (d) Workers in any duly registered cooperative when so recommended by the Bureau of Cooperative Development and upon approval of the Secretary of Labor; Provided, however, That such recommendation shall be given only for the purpose of making the cooperative viable and upon finding and certification of said Bureau, supported by adequate proof, that the cooperative cannot resort to other remedial measures without serious loss or prejudice to its operation except through its exemption from the requirements of this Rule. The exemption shall be subject to such terms and conditions and for such period of time as the Secretary of Labor may prescribe.

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Mayon Hotel & Restaurant v. Adana, G.R. No. 157634, 492 Phil. 892 (2005); Mabeza v. NLRC, 338 Phil. 386 (1997). Mayon Hotel & Restaurant v. Adana, supra. 97 Phil. 294 (1955). States Marine Corporation and Royal Line, Inc. v. Cebu Seamen's Association, Inc ., 117 Phil. 307 (1963).

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G.R. No. 199547

September 24, 2012

THE NEW PHILIPPINE SKYLANDERS, INC. and/or JENNIFER M. ENANO-BOTE, Petitioners, vs. FRANCISCO N. DAKILA, Respondent. RESOLUTION PERLAS-BERNABE, J.: The Petition for Review on Certiorari1 assails the August 31, 20112 and November 23, 20113 Resolutions of the Court of Appeals (CA) in CA-G.R. SP No. 113015 which affirmed the September 10, 2009 Decision4 and December 15, 2009 Resolution5 of the National Labor Relations Commission (NLRC) finding respondent Francisco N.Dakila (respondent Dakila) to have been illegally dismissed. The Factual Antecedents Respondent Dakila was employed by petitionercorporation as early as 1987 and terminated for cause in April 1997 when the corporation was sold. In May 1997, he was rehired as consultant by the petitioners under a Contract for Consultancy Services6 dated April 30, 1997. Thereafter, in a letter7 dated April 19, 2007, respondent Dakila informed petitioners of his compulsory retirement effective May 2, 2007 and sought for the payment of his retirement benefits pursuant to the Collective Bargaining Agreement. His request, however, was not acted upon. Instead, he was terminated from service effective May 1, 2007.

Consequently, respondent Dakila filed a complaint for constructive illegal dismissal, non-payment of retirement benefits, under/nonpayment of wages and other benefits of a regular employee, and damages against petitioners, The New Philippine Skylanders, Inc. and its President and General Manager, Jennifer M. Eano-Bote, before the NLRC. He averred, among others, that the consultancy contract was a scheme to deprive him of the benefits of regularization, claiming to have assumed tasks necessary and desirable in the trade or business of petitioners and under their direct control and supervision. In support of his claim, he submitted, among others, copies of his time cards, Official Business Itinerary Slips, Daily Attendance Sheets and other documents prescribing the manner in which his tasks were to be accomplished under the control of the petitioners and acknowledging his status as a regular employee of the corporation. On the other hand, petitioners, in their position paper,8 asserted that respondent Dakilawas a consultant and not their regular employee. The latter was not included in petitioners' payroll and paid a fixed amount under the consultancy contract. He was not required to observe regular working hours and was free to adopt means and methods to accomplish his task except as to the results of the work required of him. Hence, no employer-employee relationship existed between them. Moreover, respondentDakila terminated his contract in a letter dated April 19, 2007, thus, negating his dismissal. Ruling of the Labor Arbiter On May 28, 2008, Labor Arbiter Thomas T. Que, Jr. rendered a Decision9 finding respondent Dakila to have been illegally dismissed and ordered his reinstatement with full backwages computed from the time of his dismissal on May 1, 2007 until his actual reinstatement as well as the payment of his unpaid benefits under the Collective Bargaining Agreement (CBA). He declared respondent Dakila to be a regular employee on the basis of the unrebutted documentary evidence showing that he was under the petitioners' direct control and supervision and performed tasks that were either incidental or usually desirable and necessary in the trade or business of petitioner corporation for a period of ten years. Having been dismissed without cause and notice, respondent Dakila was awarded moral and exemplary damages in the amount of P 50,000.00 each. He is also entitled to avail of thecorporation's retirement benefits upon his reinstatement. Ruling of the NLRC On appeal, the NLRC sustained the Labor Arbiter's (LA) finding that respondent Dakila was a regular employee and that his dismissal was illegal. However, it noted that since he was already beyond the retirement age, his reinstatement was no longer feasible. As such, it ordered the payment of his retirement pay to be computed from 1997 until the date of the decision. Moreover, it found respondent Dakila entitled to reinstatement wages from the time petitioners received a copy of the LAs Decision on July 7, 2008 up to the date of the NLRC's decision. Thus, it ordered the petitioners to pay respondent Dakila the additional amount of P 278,508.33representing reinstatement wages and retirement pay.10 The petitioners' motion for reconsideration having been denied in the Resolution11 dated December 15, 2009, they filed a petition for certiorari12 before the CA raising the following errors: (1) the complaint should have been dismissed against petitioner Jennifer M. Eano-Bote absent any showing of bad faith; (2) respondent Dakila is not a regular employee; (3) respondent was not illegally dismissed as it was the respondent who resigned; and (4) theLAs monetary award has no basis. Ruling of the CA In the Resolution13 dated August 31, 2011, the CA dismissed the petition for failure to show that the NLRC committed grave abuse of discretion in affirming the LA's Decision. It found the factual findings of the LA and the NLRC to be supported by substantial evidence and thus, should be accorded respect and finality. Petitioners' motion for reconsideration therefrom was likewise denied in the Resolution14 dated November 23, 2011. Hence, the instant petition reiterating the arguments raised before the CA. Ruling of the Court The issue of illegal dismissal is premised on the existence of an employer-employee relationship between the parties herein. It is essentially a question of fact, beyond the ambit of a petition for review on certiorari under Rule 45 of the Rules of Court unless there is a clear showing of palpable error or arbitrary disregard of evidence which does not obtain in this case. Records reveal that both the LA and the NLRC, as affirmed by the CA, have found substantial evidence to show that respondent Dakila was a regular employee who was dismissed without cause.

Following Article 279 of the Labor Code, an employee who is unjustly dismissed from work is entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages computed from the time he was illegally dismissed. However, considering that respondent Dakila was terminated on May 1, 2007, or one (1) day prior to his compulsory retirement on May 2, 2007, his reinstatement is no longer feasible. Accordingly, the NLRC correctly held him entitled to the payment of his retirement benefits pursuant to the CBA. On the other hand, his backwages should be computed only for days prior to his compulsory retirement which in this case is only a day. Consequently, the award of reinstatement wages pending appeal must be deleted for lack of basis. Similarly, the Court finds no basis to hold petitioner Jennifer M. Eano-Bote, President and General Manager of The New Philippine Skylanders, Inc., jointly and severally liable with the corporation for the payment of the monetary awards. The mere lack of authorized or just cause to terminate one's employment and the failure to observe due process do not ipso facto mean that the corporate officer acted with malice or bad faith.15 There must be independent proof of malice or bad faith which was not established in this case. Perforce, petitioner Jennifer M. Eano-Bote cannot be made personally liable for the liabilities of the corporation which, by legal fiction, has a personality separate and distinct from its officers, stockholders and members. Moreover, for lack of factual and legal bases, the awards of moral and exemplary damages cannot also be sustained.161wphi1 WHEREFORE, premises considered, the petition is PARTLY GRANTED. The assailed August 31, 2011 and November 23, 2011 Resolutions of the Court of Appeals in CA-G.R. SP No. 113015 are MODIFIED as follows: (1) petitioner Jennifer M. Eano-Bote is ABSOLVED from liability for payment of respondent Francisco N. Dakila's monetary awards; (2) the awards of reinstatement wages pending appeal as well as the moral and exemplary damages are ordered DELETED; and (3) the computation of backwages should be limited only for a day prior to his compulsory retirement. The rest of the decision stands. SO ORDERED. ESTELA M. PERLAS-BERNABE Associate Justice WE CONCUR: ANTONIO T. CARPIO Associate Justice Chairperson TERESITA J. LEONARDO-DE CASTRO* Associate Justice JOSE PORTUGAL PEREZ Associate Justice ATTESTATION I attest that the conclusions in the above Resolution had been reached in consultation before the case was assigned to the writer of the opinion of the Court's Division. ANTONIO T. CARPIO Associate Justice Chairperson, Second Division CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson's Attestation, I certify that the conclusions in the above Resolution had been reached in consultation before the case was assigned to the writer of the opinion of the Court's Division. ARTURO D. BRION Associate Justice

MARIA LOURDES P. A. SERENO Chief Justice

Footnotes
*

Acting Member per Special Order No. 1308 dated September 21, 2012. Under Rule 45 of the Rules of Court.

Penned by Associate Justice Normandie B. Pizarro, with Associate Justices Amelita G. Tolentino and Rodil V. Zalameda, rollo, pp. 43-45.
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Id. at 47-48.

Penned by Presiding Commissioner Benedicta R. Palaeo!, with Commissioners Isabel G. Panganiban-Ortiguerra and Nieves Vivar-De Castro, concurring, id. at 300-306.
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Id. at 325-327. Id. at 60-61. Id. at 145-146. Id. at 64-72. Id. at 198-206. Id. at 305. Id. at 325-327. Id. at 329-354. Id. at 43-45. Id. at 47-48. Lambert Pawnbrokers and Jewelry Corporation v. Binamira, G.R. No. 170464, July 12, 2010, 624 SCRA 705. Aliling v. Feliciano, G.R. No. 185829, April 25, 2012. July 20, 2011

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G.R. No. 181919

JONES INTERNATIONAL MANPOWER SERVICES, INC., represented by its President, EDWARD G. CUE, Petitioner, vs. BELLA AGCAOILI-BARIT, Respondent. DECISION BRION, J.: We pass upon the present petition for review on certiorari1 seeking the reversal of the January 23, 2008 Decision2and the February 27, 2008 Resolution3 of the Court of Appeals (CA) in CA-G.R. SP No. 101069.4

The Antecedents Summarized below are the relevant facts on record. On November 21, 2003, respondent Bella Agcaoili-Barit filed a complaint5 for non-payment of salaries and refund of transportation fare against the petitioner Jones International Manpower Services, Inc. (agency), owned and managed by Edward G. Cue. Barit alleged that she entered into a two-year employment contract (July 23, 1999 to July 23, 2001) with the agency, for its foreign principal in the Kingdom of Saudi Arabia, Mohamad Hameed Al-Naimi (Hameed), as a domestic helper with a salary of US$200.00 a month. She did her job diligently and with dedication, but was paid only US$100.00 a month and, starting January 2001, was not paid any salary at all. She extended her employment for another 10 months upon Hameed's request as her replacement had not yet been deployed by the agency. Hameed refused to pay her salaries even during the extension. Fed up with her situation, she left Hameed on May 29, 2002 and had a live-in relationship with another Filipino overseas worker, Thomas Ambrosio, allegedly her boyfriend. As the law of Saudi Arabia prohibits such a relationship, she was arrested and imprisoned for more than a year. She claimed that she embraced the Islam religion and was exonerated of the charges against her. She was released from prison on October 14, 2003 and immediately left for home, arriving in the Philippines on October 15, 2003. She demanded payment of her salaries for one year and four months, payment of wage differentials from July 1999 to December 2000, and the refund of her airfare to the Philippines. In defense, the agency argued that Barit's contract of employment expired on July 23, 2001, without any complaint from her. Her contract was extended for another two years with her consent. It alleged that Barit left her employer without permission. She was then reported missing to the Saudi police who found her staying with Ambrosio. She was subsequently arrested and imprisoned. Hameed was helpless in providing Barit assistance because she violated marital law and the offense was non-employment related. Her passport, air ticket and the balance of her unpaid salaries were turned over to the Saudi authorities pursuant to Saudi law. The agency denied liability for Barit's alleged unpaid salaries beginning July 2001 as her employment contract, which it facilitated, was only for two years. The contract expired on July 23, 2001. It maintained it had no involvement or participation in the alleged extension of Barit's employment with Hameed. It also argued that it had no liability for the refund of her airfare to the Philippines. The agency argued further that it was not also liable for Barit's alleged wage differentials from July 1999 to December 2000 and unpaid wages from January 2001 to July 23, 2001. It pointed out that all wages due her were paid in full, while the final wages due her before she left her employment were turned over to the Saudi government. It stressed that it was highly illogical for Barit to agree to an extension of her employment contract with the same employer who, she claimed, had not paid her salaries and underpaid her wages in the past two years of her contract. The Compulsory Arbitration Rulings On March 31, 2004, Labor Arbiter Nieves Vivar-de Castro found Barit's money claims meritorious.6 She directed the agency and its foreign principal to pay Barit salary differentials from July 23, 1999 to December 31, 2000 and her unpaid salaries from January 2001 to July 23, 2001. The labor arbiter, however, absolved the agency of liability for Barit's alleged unpaid benefits during her second or extended employment as it did not participate or intervene in securing this extended posting. The agency appealed to the National Labor Relations Commission (NLRC). In its decision dated August 28, 2006, 7the NLRC granted the appeal. It set aside the labor arbiter's ruling and dismissed the complaint, but awarded Barit financial assistance of P10,000.00 "for reasons of equity." In the main, the labor arbitration body rejected Barit's submission that she was compelled to leave Hameed because he had been underpaying and was not paying her salaries. The NLRC did not believe that she would agree to continue working for the same employer for another ten (10) months, when the employer had not been paying her salaries before and during her extended employment. Barit moved for reconsideration, but the NLRC denied the motion in a resolution dated March 30, 2007. 8 She then sought relief from the CA through a petition for certiorari, charging the NLRC with grave abuse of discretion in setting aside the labor arbiter's decision, and in holding that the agency is not solidarily liable with her employer for the underpayment and non-payment of her wages. The CA Decision In its decision of January 23, 2008,9 the CA found that the NLRC committed grave abuse of discretion in setting aside the labor arbiter's decision. It upheld the labor arbiter's award to Barit of salary differentials from July 23, 1999 to December 31, 2000 and unpaid salaries from January 2001 to July 23, 2001, to be paid solidarily by the agency and its foreign principal. It brushed aside Hameed's defense, through his letters dated November 15, 2003, 10 January 21, 200411 and February 28, 2004,12 that he had fully paid Barit's salaries since day one of her employment. It declared that absent any evidence, such as payrolls, payslips or acknowledgment receipts, Hameed is deemed to have failed to discharge the onus probandi of payment.

Its motion for reconsideration turned down by the CA,13 the agency now appeals to the Court by way of the present petition for review on certiorari. The Petitioner's Case Aside from the petition itself,14 the agency submitted a memorandum,15 as required by the Court,16 and a reply17to Barit's comment. Through these submissions, the agency asks for a reversal of the CA decision on the ground that the appellate court erred in (1) affirming the labor arbiter's award to Barit of salary differentials from July 23, 1999 to December 31, 2000 despite the non-inclusion of the claim for underpayment of wages in the complaint, in violation of the NLRC Rules of Procedure; and (2) disregarding the "other similar documents" the agency submitted to the labor arbiter to prove that Barit was fully paid of her wages. On the first issue, the agency cites Section 7(b) and (d), Rule V of the 2005 Revised Rules of Procedure of the NLRC, as follows: b) The position papers of the parties shall cover only those claims and causes of action raised in the complaint or amended complaint excluding those that may have been amicably settled, and accompanied by all supporting documents, including the affidavits of witnesses, which shall take the place of their direct testimony. d) In their position papers and replies, the parties shall not be allowed to allege facts, or present evidence to prove facts and any cause or causes of action not referred to or included in the original or amended complaint or petition. The agency argues that the labor arbiter ignored these rules when she took cognizance of Barit's claim for wage underpayment which was mentioned only in the latter's position paper. It points out that in the complaint 18 Barit filed with the NLRC, she underlined only (1) non-payment of wages and (2) refund of transportation fare as her only causes of action. It posits that the labor arbiter and the CA both erred in ignoring the rules. On a different plane, the agency contends that the award of salary differentials to Barit has no legal basis as she herself admitted that she received a monthly salary of SR600 that, if converted to US dollars in 1999-2000, was equivalent to US$200.00, thus negating the claim of underpayment of wages. The agency insists that Barit's wages had been paid in full as evidenced by the letters19 of Hameed which show that all the salaries and other benefits due Barit, including her passport and other belongings, were paid and given to her before she was released from jail and repatriated to the Philippines, in accordance with the laws of Saudi Arabia. The agency bewails the CA's failure to give due consideration to what took place after Barit left her employer in May 2002. Barit was then apprehended by the authorities of Saudi Arabia for living-in with a man who was not her husband. She was imprisoned for having committed a marital offense and was discharged only after she served out her sentence, not exonerated by the court as she claimed. It further contends that the CA failed to give consideration to the policy of the government of Saudi Arabia not to allow the release of foreign workers from prison without their employers paying all their salaries and other benefits, as well as releasing all their personal belongings. The Case for Respondent Barit Through her comment20 and memorandum,21 filed on June 27, 2008 and October 22, 2008, respectively, Barit prays that the petition be denied for lack of merit. On the first issue, she argues that the agency resorted to hairsplitting or pure semantics in denying liability for her claim of underpayment of wages. She refers particularly to the agency's contention that wage differentials should not have been awarded to her because she did not include underpayment of wages as a cause of action in her complaint. She insists that the complaint form that she accomplished shows that her cause of action was for non-payment and underpayment of wages as the two terms appear in only one box. In any event, she explains that "to underpay,"22 means "to pay less than what is normal or required." Since she was paid only half of her wages, there was an amount that was not paid and this was the other half of her wages. There is, therefore, non-payment of this other half. She posits that in this context, she was correct in pursuing her claim of underpayment of wages. On the issue of non-payment of wages, Barit maintains that the CA committed no error in ruling that the agency failed to present substantial evidence to prove due payment of her wages while she was under the employ of Hameed. She takes offense at the agency's submission that the issuance of monthly payslips or the keeping of payrolls is seldom or rarely done in the case of domestic helpers. She argues that with this reasoning, the agency would be placing domestic helpers in a different category of workers, a distinction which is repugnant to the Constitution. Barit further argues that the burden of proving payment of what is due the employee is upon the employer and, since she is an overseas worker, also upon the employer's recruitment agency. She contends that her employer's letters, 23 purporting to show that her salaries and other benefits had all been paid, are self-serving unofficial statements that have dubious evidentiary value. She reasons out that such letters, which were mentioned in the case cited by the agency in its submissions,24 cannot be considered as "other documents" for nowhere in that case was the term "other documents" discussed and neither did the ruling give an example of

"other similar documents that have the same force and effect as payrolls, employment records and remittances." 25 In the absence of evidence proving payment, Barit submits that her employer and the agency are solidarily liable for the award, pursuant to the law and the rules. Finally, Barit takes exception to the agency's argument faulting the CA for disregarding other relevant circumstances in the case, such as the completion of her contract without the filing of any claim for unpaid or underpaid salaries on her part, and her supposedly voluntary act of renewing her contract and living-in with another Filipino worker which led to her imprisonment. She maintains that these circumstances, even if considered, do not change the fact that there has been gross violation of Philippine laws by her employer and by the agency, for which they should be made solidarily liable. She explains that she was forced to act because of the long suffering inflicted on her by her employer who refused to pay her salaries in full and compelled her to extend her contract for another year. The Court's Ruling The Court, as a rule,26 is bound by the factual findings of the CA, but has the discretion to reexamine the evidence in a case when a basic conflict exists between the CA's findings of fact and those of the NLRC.27 In this case, such conflict exists and we need to reexamine their findings to determine: (1) whether Barit had been underpaid and/or had not been paid her wages during her employment in Saudi Arabia; and (2) whether the agency is solidarily liable with the foreign employer if Barit is indeed entitled to her money claims. We find merit in the petition. Under the circumstances of Barit's employment in Saudi Arabia, we wonder how she could have and why she remained in the service of the same employer for a considerable period of time if she had been underpaid her salaries or had not been paid at all, and why she had kept silent about her salary situation. Nowhere in the records does it appear that Barit complained about the alleged underpayment and non-payment of her wages with the Philippine labor or consular representatives in Saudi Arabia, or even with the Saudi authorities themselves. Neither is there any showing too that she ever objected to or protested her iniquitous work situation directly with Hameed, if that had really been the case, nor that Barit identified or spoke of any problem that could have prevented her from seeking relief in Saudi Arabia, as the NLRC noted.28 Barit abruptly left her employer, not because she was being exploited with respect to her wages, but for a personal reason - she left in order to live with her boyfriend Ambrosio. As a consequence of what she did, she ran afoul of the law of Saudi Arabia. This analysis leads us to conclude that the NLRC's conclusion is not without basis; substantial basis exists to believe that Barit received her full salaries for the entire duration of her original contract, or from July 23, 1999 to July 23, 2001. The NLRC further opined that to make the agency liable for Barit's alleged unpaid and underpaid wages on the sole ground that it failed to submit copies of payslips and payrolls is unfair as the agency appears to have taken all available means to secure the necessary documents from Barit's employer to dispute her claims. The NLRC stressed that the labor arbiter should have considered other factors in resolving the case. The records support the NLRC's appreciation of the merits of Barit's claim. As early as September 28, 2002, the agency inquired with Barit's employer how she was faring in Saudi Arabia, in relation particularly to the case brought against her by the Saudi authorities and to her unpaid salaries.29 The inquiry was prompted by Barit's mother's inquiry about her situation in Saudi Arabia. On October 3, 2002, the agency received an answer from Hameed30 advising the agency's President, Edward G. Cue, that Barit had left his residence and was discovered by the Saudi police to be living with Ambrosio and that Hameed could not intervene as she committed "a crime related to martial (sic) affair."31 Hameed also informed Cue that Barit's passport and air ticket, and the balance of the money due her were handed over to the authorities, pursuant to the law of Saudi Arabia. Additionally, Hameed intimated that if necessary, the agency could seek verification from the Philippine Embassy in Saudi Arabia about what he reported to Cue. On November 15, 2003, the agency received another letter32 from Hameed in response to Cue's overseas call regarding Barit's unpaid salary. Hameed again informed Cue that "[t]here is no more pending salary with us, all her personal belongings were turned over to the police as this is the law here in Saudi Arabia." Hameed also told Cue that Barit finished her two-year contract and she could not have signed another contract with him if she had not been paid her past salaries. On November 21, 2004, Hameed again wrote Cue33 informing the agency official that as he said in his previous letters, "everything has been paid to her" and that the Saudi authorities will not release her from jail unless everything is settled, for the Saudi government is very strict when it comes to unpaid salaries. In light of this exchange between the agency and Hameed, and the real reason why Barit left Hameed's employ, we are as convinced as the NLRC that she had been paid her salaries in full for her first employment contract (which the agency facilitated), from July 23, 1999 to July 23, 2001. The argument that absent the payslips or payrolls, the agency failed to present proof of payment of Barit's claim should be viewed in the context of the realities of domestic service. The relationship between Hameed and his family, on the one hand, and Barit, on the

other hand, was largely confined within Hameed's household. It was not as structured as the relationship obtaining in an office or in an industrial plant. There was very little or no paperwork at all, even on wage payments. As the NLRC opined: Just like our local domestic house helpers who receive their wages directly from their employers without any payslip or voucher to acknowledge payment and receipt, we do not expect the case of herein complainant x x x to be any different. It is, therefore, understandable that no payslip or payroll could be presented by respondent agency. 34 We find this NLRC view to be a fair and credible assessment of the employment relationship between Barit and her Saudi employer, at least, in relation to the payment of Barit's wages. In sum, we hold that the NLRC committed no grave abuse of discretion in dismissing the complaint.1avvphi1 The CA thus erred in granting the petition for certiorari. WHEREFORE, premises considered, the assailed Decision and Resolution of the Court of Appeals are set aside, and the Decision of the NLRC dated August 28, 2006 is REINSTATED. SO ORDERED. ARTURO D. BRION Associate Justice WE CONCUR: ANTONIO T. CARPIO Associate Justice Chairperson TERESITA J. LEONARDO-DE CASTRO* Associate Justice JOSE PORTUGAL PEREZ Associate Justice ATTESTATION I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court's Division. ANTONIO T. CARPIO Associate Justice Chairperson, Second Division CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson's Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court's Division. RENATO C. CORONA Chief Justice DIOSDADO M. PERALTA** Associate Justice

Footnotes
*

Designated as Acting Member of the Second Division per Special Order No. 1006 dated June 10, 2011.

**

Additional member in lieu of Associate Justice Maria Lourdes P. A. Sereno per Special Order No. 1040 dated July 6, 2011.

Rollo, pp. 3-14.

Id. at 16-25; penned by Associate Justice Myrna Dimaranan Vidal, and concurred in by Associate Justices Jose L. Sabio, Jr. and Jose C. Reyes, Jr.
3

Id. at 27. Entitled "Bella Agcaoili Barit v. NLRC and Jones International Manpower Services, Inc." Rollo, p. 161. Id. at 262-266. Id. at 125-133. Id. at 139-140. Supra note 2. Rollo, p. 190. Id. at 191. Id. at 298. Supra note 3. Supra note 1. Rollo, pp. 64-76; dated October 16, 2008. Id. at 62-63; Resolution dated August 11, 2008. Id. at 55-60. Supra note 5. Supra notes 10, 11, and 12. Rollo, pp. 38-53. Id. at 192-207. As defined by the Merriam Webster Online Dictionary. Supra notes 10, 11, and 12. Villar v. NLRC, 387 Phil. 706 (2000). Supra note 21, at 201. RULES OF COURT, Rule 45, Section 1. Fujitsu Computer Products Corporation of the Philippines v. Court of Appeals, 494 Phil. 697 (2005). Supra note 7, at 131, par. 2.

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Rollo, p. 115. Id. at 189. Ibid. Id. at 190. Id. at 191. Supra note 7, at 128-129.

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G.R. No. 121927 April 22, 1998 ANTONIO W. IRAN (doing business under the name and style of Tones Iran Enterprises), petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION (Fourth Division), GODOFREDO O. PETRALBA, MORENO CADALSO, PEPITO TECSON, APOLINARIO GOTHONG GEMINA, JESUS BANDILAO, EDWIN MARTIN, CELSO LABIAGA, DIOSDADO GONZALGO, FERNANDO M. COLINA, respondents.

ROMERO, J.: Whether or not commissions are included in determining compliance with the minimum wage requirement is the principal issue presented in this petition. Petitioner Antonio Iran is engaged in softdrinks merchandising and distribution in Mandaue City, Cebu, employing truck drivers who double as salesmen, truck helpers, and non-field personnel in pursuit thereof. Petitioner hired private respondents Godofredo Petralba, Moreno Cadalso, Celso Labiaga and Fernando Colina as drivers/salesmen while private respondents Pepito Tecson, Apolinario Gimena, Jesus Bandilao, Edwin Martin and Diosdado Gonzalgo were hired as truck helpers. Drivers/salesmen drove petitioner's delivery trucks and promoted, sold and delivered softdrinks to various outlets in Mandaue City. The truck helpers assisted in the delivery of softdrinks to the different outlets covered by the driver/salesmen. As part of their compensation, the driver/salesmen and truck helpers of petitioner received commissions per case of softdrinks sold at the following rates: SALESMEN: Ten Centavos (P0.10) per case of Regular softdrinks. Twelve Centavos (P0.12) per case of Family Size softdrinks. TRUCK HELPERS: Eight Centavos (P0.08) per case of Regular softdrinks. Ten Centavos (P0.10) per case of Family Size softdrinks. Sometime in June 1991, petitioner, while conducting an audit of his operations, discovered cash shortages and irregularities allegedly committed by private respondents. Pending the investigation of irregularities and settlement of the cash shortages, petitioner required private respondents to report for work everyday. They were not allowed, however, to go on their respective routes. A few days thereafter, despite aforesaid order, private respondents stopped reporting for work, prompting petitioner to conclude that the former had abandoned their employment. Consequently, petitioner terminated their services. He also filed on November 7, 1991, a complaint for estafa against private respondents. On the other hand, private respondents, on December 5, 1991, filed complaints against petitioner for illegal dismissal, illegal deduction, underpayment of wages, premium pay for holiday and rest day, holiday pay, service incentive leave pay, 13th month pay, allowances, separation pay, recovery of cash bond, damages and attorney's fees. Said complaints were consolidated and docketed as Rab VII-12-1791-91, RAB VII-12-1825-91 and RAB VII-12-1826-91, and assigned to Labor Arbiter Ernesto F. Carreon.

The labor arbiter found that petitioner had validly terminated private respondents, there being just cause for the latter's dismissal. Nevertheless, he also ruled that petitioner had not complied with minimum wage requirements in compensating private respondents, and had failed to pay private respondents their 13th month pay. The labor arbiter, thus, rendered a decision on February 18, 1993, the dispositive portion of which reads: WHEREFORE, premises considered, judgment is hereby rendered ordering the respondent Antonio W. Iran to pay the complainants the following: 1. Celso Labiaga P10,033.10 2. Godofredo Petralba 1,250.00 3. Fernando Colina 11,753.10 4. Moreno Cadalso 11,753.10 5. Diosdado Gonzalgo 7,159.04 6. Apolinario Gimena 8,312.24 7. Jesus Bandilao 14,729.50 8. Pepito Tecson. 9,126.55 Attorney's Fees (10%) 74,116.63 of the gross award 7,411.66 GRAND TOTAL AWARD P81,528.29 ======== The other claims are dismissed for lack of merit. SO ORDERED. 1 Both parties seasonably appealed to the NLRC, with petitioner contesting the labor arbiter's refusal to include the commissions he paid to private respondents in determining compliance with the minimum wage requirement. He also presented, for the first time on appeal, vouchers denominated as 13th month pay signed by private respondents, as proof that petitioner had already paid the latter their 13th month pay. Private respondents, on the other hand, contested the findings of the labor arbiter holding that they had not been illegally dismissed, as well as mathematical errors in computing Jesus Bandilao's wage differentials. The NLRC, in its decision of December 21, 1994, affirmed the validity of private respondent's dismissal, but found that said dismissal did not comply with the procedural requirements for dismissing employees. Furthermore, it corrected the labor arbiter's award of wage differentials to Jesus Bandilao. The dispositive portion of said decision reads: WHEREFORE, premises considered, the decision is hereby MODIFIED in that complainant Jesus Bandilao's computation for wage differential is corrected from P154.00 to P4,550.00. In addition to all the monetary claim (sic) originally awarded by the Labor Arbiter a quo, P1,000.00 is hereby granted to each complainants (sic) as indemnity fee for failure of respondents to observe procedural due process. SO ORDERED. 2 Petitioner's motion for reconsideration of said decision was denied on July 31, 1995, prompting him to elevate this case to this Court, raising the following issues: 1. THE HONORABLE COMMISSION ACTED WITH GRAVE ABUSE OF DISCRETION AND CONTRARY TO LAW AND JURISPRUDENCE IN AFFIRMING THE DECISION OF THE LABOR ARBITER A QUOEXCLUDING THE COMMISSIONS RECEIVED BY THE PRIVATE RESPONDENTS IN COMPUTING THEIR WAGES; 2. THE HONORABLE COMMISSION ACTED WITH GRAVE ABUSE OF DISCRETION IN FINDING PETITIONER GUILTY OF PROCEDURAL LAPSES IN TERMINATING PRIVATE RESPONDENTS AND IN AWARDING EACH OF THE LATTER P1,000.00 AS INDEMNITY FEE; 3. THE HONORABLE COMMISSION GRAVELY ERRED IN NOT CREDITING THE ADVANCE AMOUNT RECEIVED BY THE PRIVATE RESPONDENTS AS PART OF THEIR 13TH MONTH PAY. The petition is impressed with merit. The NLRC, in denying petitioner's claim that commissions be included in determining compliance with the minimum wage ratiocinated thus:

Respondent (petitioner herein) insist assiduously that the commission should be included in the computation of actual wages per agreement. We will not fall prey to this fallacious argument. An employee should receive the minimum wage as mandated by law and that the attainment of the minimum wage should not be dependent on the commission earned by an employee. A commission is an incentive for an employee to work harder for a better production that will benefit both the employer and the employee. To include the commission in the computation of wage in order to comply with labor standard laws is to negate the practice that a commission is granted after an employee has already earned the minimum wage or even beyond it. 3 This holding is unsupported by law and jurisprudence. Article 97(f) of the Labor Code defines wage as follows: Art. 97(f) "Wage" paid to any employee shall mean the remuneration or earnings, however designated, capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece, or commission basis, or other method of calculating the same, which is payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done, or for services rendered or to be rendered and includes the fair and reasonable value, as determined by the Secretary of Labor, of board, lodging, or other facilities customarily furnished by the employer to the employee. xxx xxx xxx (Emphasis supplied) This definition explicitly includes commissions as part of wages. While commissions are, indeed, incentives or forms of encouragement to inspire employees to put a little more industry on the jobs particularly assigned to them, still these commissions are direct remunerations for services rendered. In fact, commissions have been defined as the recompense, compensation or reward of an agent, salesman, executor, trustee, receiver, factor, broker or bailee, when the same is calculated as a percentage on the amount of his transactions or on the profit to the principal. The nature of the work of a salesman and the reason for such type of remuneration for services rendered demonstrate clearly that commissions are part of a salesman's wage or salary. 4 Thus, the commissions earned by private respondents in selling softdrinks constitute part of the compensation or remuneration paid to drivers/salesmen and truck helpers for serving as such, and hence, must be considered part of the wages paid them. The NLRC asserts that the inclusion of commissions in the computation of wages would negate the practice of granting commissions only after an employee has earned the minimum wage or over. While such a practice does exist, the universality and prevalence of such a practice is questionable at best. In truth, this Court has taken judicial notice of the fact that some salesmen do not receive any basic salary but depend entirely on commissions and allowances or commissions alone, although an employeremployee relationship exists. 5 Undoubtedly, this salary structure is intended for the benefit of the corporation establishing such, on the apparent assumption that thereby its salesmen would be moved to greater enterprise and diligence and close more sales in the expectation of increasing their sales commissions. This, however, does not detract from the character of such commissions as part of the salary or wage paid to each of its salesmen for rendering services to the corporation. 6 Likewise, there is no law mandating that commissions be paid only after the minimum wage has been paid to the employee. Verily, the establishment of a minimum wage only sets a floor below which an employee's remuneration cannot fall, not that commissions are excluded from wages in determining compliance with the minimum wage law. This conclusion is bolstered by Philippine Agricultural Commercial and Industrial Workers Union vs. NLRC, 7 where this Court acknowledged that drivers and conductors who are compensated purely on a commission basis are automatically entitled to the basic minimum pay mandated by law should said commissions be less than their basic minimum for eight hours work. It can, thus, be inferred that were said commissions equal to or even exceed the minimum wage, the employer need not pay, in addition, the basic minimum pay prescribed by law. It follows then that commissions are included in determining compliance with minimum wage requirements. With regard to the second issue, it is settled that in terminating employees, the employer must furnish the worker with two written notices before the latter can be legally terminated: (a) a notice which apprises the employee of the particular acts or omissions for which his dismissal is sought, and (b) the subsequent notice which informs the employee of the employer's decision to dismiss him. 8 (Emphasis ours) Petitioner asseverates that no procedural lapses were committed by him in terminating private respondents. In his own words: . . . when irregularities were discovered, that is, when the misappropriation of several thousands of pesos was found out, the petitioner instructed private respondents to report back for work and settle their accountabilities but the latter never reported for work. This instruction by the petitioner to report back for work and settle their accountabilities served as notices to private respondents for the latter to explain or account for the missing funds held in trust by them before they disappeared. 9 Petitioner considers this return-to-work order as equivalent to the first notice apprising the employee of the particular acts or omissions for which his dismissal is sought. But by petitioner's own admission, private respondents were never told in said notice that their dismissal was being sought, only that they should settle their accountabilities. In petitioner's incriminating words:

It should be emphasized here that at the time the misappropriation was discovered and subsequently thereafter, the petitioner's first concern was not effecting the dismissal of private respondents but the recovery of the misappropriated funds thus the latter were advised to report back to work. 10 As above-stated, the first notice should inform the employee that his dismissal is being sought. Its absence in the present case makes the termination of private respondents defective, for which petitioner must be sanctioned for his non-compliance with the requirements of or for failure to observe due process. 11 The twin requirements of notice and hearing constitute the essential elements of due process, and neither of these elements can be disregarded without running afoul of the constitutional guarantee. Not being mere technicalities but the very essence of due process, to which every employee is entitled so as to ensure that the employer's prerogative to dismiss is not exercised arbitrarily, 12 these requisites must be complied with strictly. Petitioner makes much capital of private respondents' failure to report to work, construing the same as abandonment which thus authorized the latter's dismissal. As correctly pointed out by the NLRC, to which the Solicitor General agreed, Section 2 of Book V, Rule XIV of the Omnibus Rules Implementing the Labor Code requires that in cases of abandonment of work, notice should be sent to the worker's last known address. If indeed private respondents had abandoned their jobs, it was incumbent upon petitioner to comply with this requirement. This, petitioner failed to do, entitling respondents to nominal damages in the amount of P5,000.00 each, in accordance with recent jurisprudence, 13 to vindicate or recognize their right to procedural due process which was violated by petitioner. Lastly, petitioner argues that the NLRC gravely erred when it disregarded the vouchers presented by the former as proof of his payment of 13th month pay to private respondents. While admitting that said vouchers covered only a ten-day period, petitioner argues that the same should be credited as amounts received by private respondents as part of their 13th month pay, Section 3(e) of the Rules and Regulations Implementing P.D. No. 851 providing that the employer shall pay the difference when he pays less than 1/12th of the employee's basic salary. 14 While it is true that the vouchers evidencing payments of 13th month pay were submitted only on appeal, it would have been more in keeping with the directive of Article 221 15 of the Labor Code for the NLRC to have taken the same into account. 16Time and again, we have allowed evidence to be submitted on appeal, emphasizing that, in labor cases, technical rules of evidence are not binding. 17 Labor officials should use every and all reasonable means to ascertain the facts in each case speedily and objectively, without regard to technicalities of law or procedure. 18 It must also be borne in mind that the intent of P.D. No. 851 is the granting of additional income in the form of 13th month pay to employees not as yet receiving the same and not that a double burden should be imposed on the employer who is already paying his employees a 13th month pay or its equivalent. 19 An employer who pays less than 1/12th of the employees basic salary as their 13th month pay is only required to pay the difference. 20 The foregoing notwithstanding, the vouchers presented by petitioner covers only a particular year. It does not cover amounts for other years claimed by private respondents. It cannot be presumed that the same amounts were given on said years. Hence, petitioner is entitled to credit only the amounts paid for the particular year covered by said vouchers. WHEREFORE, in view of the foregoing, the decision of the NLRC dated July 31, 1995, insofar as it excludes the commissions received by private respondents in the determination of petitioner's compliance with the minimum wage law, as well as its exclusion of the particular amounts received by private respondents as part of their 13th month pay is REVERSED and SET ASIDE. This case is REMANDED to the Labor Arbiter for a recomputation of the alleged deficiencies. For non-observance of procedural due process in effecting the dismissal of private respondents, said decision is MODIFIED by increasing the award of nominal damages to private respondents from P1,000.00 to P5,000.00 each. No costs. SO ORDERED. Narvasa, C.J., Kapunan and Purisima, JJ., concur. Footnotes 1 Rollo, p. 40-41. 2 Ibid., p. 45. 3 Id., p. 32. 4 Philippine Duplicator's, Inc. vs. NLRC, 227 SCRA 747 (1993). 5 Songco vs. NLRC, 183 SCRA 610 (1990).

6 Supra, Note 4. 7 247 SCRA 256 (1995). 8 Malaya Shipping vs. NLRC, G.R. No. 121698, March 26, 1998. 9 Rollo, p. 18-19. 10 Ibid., p. 19. 11 Sebuguero vs. NLRC, 248 SCRA 532 (1995). 12 Supra, Note 8. 13 Better Buildings, Inc. vs. NLRC, G.R. No. 109714, December 15, 1997; see also Note 8. 14 Section 3(e) . . . The term "its equivalent" as used in paragraph (c) hereof shall include Christmas bonus, mid-year bonus, profitsharing payments and other cash bonuses amounting to not less than 1/12th of the basic salary but shall not include cash and stock dividends, cost of living allowances and all other allowances regularly enjoyed by the employee, as well as non-monetary benefits. Where an employer pays less than 1/12th of the employees basic salary, the employer shall pay the difference. 15 Art. 221. Technical rules not binding and prior resort to amicable development. In any proceeding before the Commission or any of the Labor Arbiters, the rules of evidence prevailing in courts of law or equity shall not be controlling and it is the spirit and intention of this 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 and without regard to technicalities of law and procedure, all in the interest of due process. xxx xxx xxx 16 Columbia Development Corporation vs. Minister of Labor and Employment, 146 SCRA 421 (1986). 17 Bristol Laboratories Employees Association vs. NLRC, 187 SCRA 118 (1990); PT & T vs. NLRC, 183 SCRA 451 (1990); Haverton Shipping Ltd. vs. NLRC, 135 SCRA 685 (1985). 18 De Ocampo vs. NLRC, 213 SCRA 653 (1992). 19 NFSW vs. Ovejera, 114 SCRA 354 (1982). 20 Dole Philippines vs. Leogardo, Jr., 117 SCRA 938 (1982). G.R. No. 198662 September 12, 2012

RADIO MINDANAO NETWORK, INC. and ERIC S. CANOY, Petitioners, vs. DOMINGO Z. YBAROLA, JR. and ALFONSO E. RIVERA, JR., Respondents. RESOLUTION BRION, J.: We resolve the motion for reconsideration1 of petitioners Radio Mindanao Network, Inc. (RMN) and Eric S. Canoy addressing our Resolution2 of December 7, 2011 which denied the appeal from the decision3 and the resolution4of the Court of Appeals (CA) in CAG.R. SP No. 109016. Factual Background

Respondents Domingo Z. Ybarola, Jr. and Alfonso E. Rivera, Jr. were hired on June 15, 1977 and June 1, 1983, respectively, by RMN. They eventually became account managers, soliciting advertisements and servicing various clients of RMN. On September 15, 2002, the respondents services were terminated as a result of RMNs reorganization/restructuring; they were given their separation pay P 631,250.00 for Ybarola, and P 481,250.00 for Rivera. Sometime in December 2002, they executed release/quitclaim affidavits. Dissatisfied with their separation pay, the respondents filed separate complaints (which were later consolidated) against RMN and its President, Eric S. Canoy, for illegal dismissal with several money claims, including attorneys fees. They indicated that their monthly salary rates were P 60,000.00 for Ybarola and P 40,000.00 for Rivera. The Compulsory Arbitration Proceedings The respondents argued that the release/quitclaim they executed should not be a bar to the recovery of the full benefits due them; while they admitted that they signed release documents, they did so due to dire necessity. The petitioners denied liability, contending that the amounts the respondents received represented a fair and reasonable settlement of their claims, as attested to by the release/quitclaim affidavits which they executed freely and voluntarily. They belied the respondents claimed salary rates, alleging that they each received a monthly salary of P 9,177.00, as shown by the payrolls. On July 18, 2007, Labor Arbiter Patricio Libo-on dismissed the illegal dismissal complaint, but ordered the payment of additional separation pay to the respondents P 490,066.00 for Ybarola and P 429,517.55 for Rivera.5 The labor arbiter adjusted the separation pay award based on the respondents Certificates of Compensation Payment/Tax Withheld showing that Ybarola and Rivera were receiving an annual salary of P 482,477.61 and P697,303.00, respectively. On appeal by the petitioners to the National Labor Relations Commission (NLRC), the NLRC set aside the labor arbiters decision and dismissed the complaint for lack of merit.6 It ruled that the withholding tax certificate cannot be the basis of the computation of the respondents separation pay as the tax document included the respondents cost -of-living allowance and commissions; as a general rule, commissions cannot be included in the base figure for the computation of the separation pay because they have to be earned by actual market transactions attributable to the respondents, as held by the Court in Soriano v. NLRC 7 and San Miguel Jeepney Service v. NLRC.8 The NLRC upheld the validity of the respondents quitclaim affidavits as they failed to show th at they were forced to execute the documents. From the NLRC, the respondents sought relief from the CA through a petition for certiorari under Rule 65 of the Rules of Court. The CA Decision and the Courts Ruling In its decision9 of February 17, 2011, the CA granted the petition and set aside the assailed NLRC dispositions. It reinstated the labor arbiters separation pay award, rejecting the NLRCs ruling that the respondents commissions are not included in the computation of their separation pay. It pointed out that in the present case, the respondents earned their commissions through actual market transactions attributable to them; these commissions, therefore, were part of their salary. The appellate court declared the release/quitclaim affidavits executed by the respondents invalid for being against public policy, citing two reasons: (1) the terms of the settlement are unconscionable; the separation pay the respondents received was deficient by at least P 400,000.00 for each of them; and (2) the absence of voluntariness when the respondents signed the document, it was their dire circumstances and inability to support their families that finally drove them to accept the amount the petitioners offered. Significantly, they dallied and it took them three months to sign the release/quitclaim affidavits. The petitioners moved for reconsideration, but the CA denied the motion in a resolution10 dated September 23, 2011.1wphi1 Thus, the petitioners appealed to this Court through a petition for review on certiorari under Rule 45 of the Rules of Court. By a Resolution11 dated December 7, 2011, the Court denied the petition for failure to show any reversible error or grave abuse of discretion in the assailed CA rulings. The Motion for Reconsideration The petitioners seek reconsideration of the Courts denial of their appeal on the ground that the CA, in fact, committed reve rsible error in: (1) failing to declare that Canoy is not personally liable in the present case; (2) disregarding the rule laid down in Talam v. National Labor Relations Commission12 on the proper appreciation of quitclaims; and (3) disregarding prevailing jurisprudence which places on the respondents the burden of proving that their commissions were earned through actual market transactions attributable to them.

The petitioners fault the CA for not expressly declaring that no basis exists to hold Canoy personally liable for the award to the respondents as they failed to specify any act Canoy committed against them or to explain how Canoy participated in their dismissal. They express alarm as they believe that unless the Court acts, the respondents will enforce the award against Canoy himself. On the release/quitclaim issue, the petitioners bewail the CAs disregard of the Courts ruling in Talam that the quitclaim t hat Francis Ray Talam, who was not an unlettered employee, executed was a voluntary act as there was no showing that he was coerced into signing the instrument, and that he received a valuable consideration for his less than two years of service with the company. They point out that in this case, the labor arbiter and the NLRC correctly concluded that the respondents are hardly unlettered employees, but intelligent, well-educated and who were too smart to be caught unaware of what they were doing. They stress, too, that the respondents submitted no proof that they were in dire circumstances when they executed the release/quitclaim document. With regard to the controversy on the inclusion of the respondents commissions in the computation of their separation pay, t he petitioners reiterate their contention that the respondents failed to show proof that they earned the commissions through actual market forces attributable to them. The Respondents Position Through their Comment/Opposition (to the Motion for Reconsideration),13 the respondents pray that the motion be denied for lack of merit. They argue that the motion is based on arguments already raised in the petition for review which had already been denied by this Court. The respondents submit that the issue of Canoys personal liability has become final and conclusive on the parties as the petitioners failed to raise the issue on time. They maintain that as the records show, the petitioners failed to raise the issue in their appeal to the NLRC and neither did they bring it up in their motion for reconsideration of the CAs decision reinstating the labor arbiters award.1wphi1 The Petitioners Reply In their reply (to the respondents Comment/Opposition),14 the petitioners ask that their petition be reinstated to allow the full ventilation of the issues presented for consideration. They contend that the respondents merely reiterated the CA pronouncements and have not confronted the issues raised and the jurisprudence they cited. On the question of Canoys personal liability, the petitioners take exception to the respondents submission that the matter had been resolved with finality and has become conclusive on them. They assert that they did not raise the issue with the CA because there was no reason for them to do so as the ruling then being reviewed was one which held that they were not liable to the respondents. Our Ruling on the Motion for Reconsideration We find the motion for reconsideration unmeritorious. The motion raises substantially the same arguments presented in the petition and we find no compelling justification to grant the reconsideration prayed for. The petitioners insist that the respondents commissions were not part of their salaries, because they failed to present proof that they earned the commission due to actual market transactions attributable to them. They submit that the commissions are profitsharing payments which do not form part of their salaries. We are not convinced. If these commissions had been really profit-sharing bonuses to the respondents, they should have received the same amounts, yet, as the NLRC itself noted, Ybarola and Rivera received P 372,173.11 and P 586,998.50 commissions, respectively, in 2002.15 The variance in amounts the respondents received as commissions supports the CAs finding that the salary structure of the respondents was such that th ey only received a minimal amount as guaranteed wage; a greater part of their income was derived from the commissions they get from soliciting advertisements; these advertisements are the "products" they sell. As the CA aptly noted, this kind of salary structure does not detract from the character of the commissions being part of the salary or wage paid to the employees for services rendered to the company, as the Court held in Philippine Duplicators, Inc. v. NLRC.16 The petitioners reliance on our ruling in Talam v. National Labor Relations Commission, 17 regarding the "proper appreciation of quitclaims," as they put it, is misplaced. While Talam, in the cited case, and Ybarola and Rivera, in this case, are not unlettered employees, their situations differ in all other respects.1wphi1 In Talam, the employee received a valuable consideration for his less than two years of service with the company; 18 he was not shortchanged and no essential unfairness took place. In this case, as the CA noted, the separation pay the respondents each received was deficient by at least P 400,000.00; thus, they were given only half of the amount they were legally entitled to. To be sure, a settlement under these terms is not and cannot be a reasonable one, given especially the respondents length of service 25 years for Ybarola and 19 years for Rivera. The CA was correct when it opined that the respondents were in dire straits when they executed the release/quitclaim affidavits. Without jobs and with families to support, they dallied in executing the quitclaim instrument, but were eventually forced to sign given their circumstances.

Lastly, the petitioners are estopped from raising the issue of Canoy's personal liability. They did not raise it before the NLRC in their appeal from the labor arbiter's decision, nor with the CA in their motion for reconsideration of the appellate court's judgment. The risk of having Canoy's personal liability for the judgment award did not arise only with the filing of the present petition, it had been there all along - in the NLRC, as well as in the CA. WHEREFORE, premises considered, we hereby DENY the motion for reconsideration with finality. No second motion for reconsideration shall be entertained. Let judgment be entered in due course. SO ORDERED. ARTURO D. BRION Associate Justice WE CONCUR: MARIA LOURDES P. A. SERENO Chief Justice ANTONIO T. CARPIO Associate Justice Chairperson BIENVENIDO L. REYES Associate Justice ATTESTATION I attest that the conclusions in the above Resolution had been reached in consultation before the case was assigned to the writer of the opinion of the Court's Division. ANTONIO T. CARPIO Associate Justice Chairperson, Second Division CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson's Attestation, I certify that the conclusions in the above Resolution had been reached in consultation before the case was assigned to the writer of the opinion of the Court's Division. MARIA LOURDES P. A. SERENO Chief Justice

JOSE PORTUGAL PEREZ Associate Justice

Footnotes
1

Rollo, pp. 204-220. Id. at 202-203. Id. at 8-21; dated February 17, 2011I. Id. at 23-24; dated September 23, 2011. Id. at 69-84. Id. at 103-111; Resolution dated January 26, 2009.

239 Phil. 119 (1987). 332 Phil. 804 (1996). Supra note 3. Supra note 4. Supra note 2. G.R. No. 175040, April 6, 2010, 617 SCRA 408. Rollo, pp. 236-245. Id. at 248-255. Supra note 6, at 107. G.R. No. 110068, November 11, 1993, 227 SCRA 747, 753. Supra note 12. Supra note 1, at 211.

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G.R. No. 120677 December 21, 1998 FOOD TRADERS HOUSE, INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and BARBARA A. CAMACHO-ESPINO, respondents.

BELLOSILLO, J.: FOOD TRADERS HOUSE, INC. hired Barbara Camacho-Espino as its Marketing Manager. Eventually however discord set in between her and its President and General Manager Orlando Alinas. On 30 January 1992 Espino was summoned to the office of Alinas and summarily notified of her dismissal effective the following day. Petitioner withheld Espino's salary for the period 15-30 January 1992 and applied it to her personal loan with Alinas. In a Complaint for Illegal Dismissal and Illegal Deduction filed by Espino against petitioner and Alinas, the Labor Arbiter found that Espino's dismissal was illegal as it was without valid cause and due process, at the same time ruling that petitioner was correct in garnishing the salary of Espino and applying the same to her personal loan. Consequently, the Labor Arbiter ordered Espino's immediate reinstatement, payment of full back wages and attorney's fees. After the National Labor Relations Commission affirmed the decision of the Labor Arbiter, Espino filed a Motion for Execution. On 14 April 1994 a writ of execution was issued 1 and Deputy Sheriff Ricardo B. Perona was ordered to proceed to the premises of petitioner to reinstate Espino and to collect the sum of P428,340.00 representing Espino's full back wages plus attorney's fees. Petitioner moved to quash the writ of execution alleging that reinstatement was no longer feasible considering Espino's employment with Higure International Corporation. Nevertheless, during subsequent conferences, Espino made known her desire to be reinstated. Consequently, she was reemployed on 4 July 1994. Conceding to the argument that income earned elsewhere by Espino during the pendency of the case should be deducted from her back wages, the Labor Arbiter, in an Order dated 22 July 1994, deducted P36,000.00 from Espino's previously computed back wages. Four (4) days after receipt of the 22 July 1994 Order Espino filed an Urgent Omnibus Motion 2 with the NLRC arguing that the back wages accruing for the period 1 April 1994 up to 2 July 1994 plus 13th month pay should be included in the computation since she was only reinstated on 4 July 1994.

From the same order, petitioner filed a Partial Appeal 3 alleging grave abuse of discretion on the part of the Labor Arbiter in deducting P36,000.00 only instead of P80,000.00. Petitioner contended that P80,000.00 should be deducted from the back wages as it was the amount which Espino admitted to have earned during the pendency of the case. It likewise asserted that Espino's P15,000.00 personal loan from Alinas should also be deducted from the total award of back wages. On appeal, the NLRC sustained petitioner and ruled that P80,000.00, which Espino admitted to have earned elsewhere, was the amount properly deductible from the computation of back wages. The NLRC further ordered that Espino's personal loan, now amounting only to P7,500.00, should also be deducted from the computation of back wages. Lastly, the NLRC held that Espino was entitled to back wages and 13th month pay from the time she was illegally dismissed up to the date of her actual reinstatement. Petitioner filed a Partial Motion for Reconsideration with the NLRC insofar as it awarded additional back wages and payment of 13th month pay. It was denied. Hence, this Petition for Certiorari under Rule 65 of the Rules of Court. Art. 279 of the Labor Code, as amended by R.A. 6715 which took effect 21 March 1989, now provides . . . 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. As the law now stands, an illegally dismissed employee is entitled to his full back wages, without deduction of earnings earned elsewhere, from the time his compensation was withheld until his actual reinstatement. As such, earnings earned elsewhere during the pendency of the case should not be deducted from the computation of his back wages. The rationale is that the employee, while litigating the legality (illegality) of his dismissal, must still earn a living to support himself and family, while full backwages have to be paid by the employer as part of the price or penalty he has to pay for illegally dismissing his employee. The clear legislative intent of the amendment in Rep. Act No. 6715 is to give more benefits to workers than was previously given them under the Mercury Drug rule or the "deduction of earnings elsewhere" rule. Thus, 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. Index animi sermo est. 4 It was error therefore on the part of the NLRC to deduct earnings earned elsewhere by Espino during the pendency of the case in the computation of her back wages. But the NLRC was correct in holding that Espino was entitled to additional back wages. In the instant case, Espino was illegally dismissed on 31 January 1992 and was only actually reinstated on 4 July 1994. Conformably with Art. 279 of the Labor Code, which provides that an illegally dismissed employee is entitled to full back wages from the time his compensation was withhem from him up to the time of his actual reinstatement, Espino's back wages should January 1992 until 4 July 1994, plus the corresponding increases and other benefits, including 13th month pay. Thus, in case reinstatement is adjudged, the award of back wages and other benefits continues beyond the date of the labor arbiter's decision ordering reinstatement and extends up to the time said order of reinstatement is actually carried out. 5 The Labor Arbiter gravely abused his discretion when he ordered the garnishment of Espino's salary for the period 15-30 January 1992 and applied the same to Espino's personal loan to Alinas. Article 217 of the Labor Code limits the jurisdiction of labor arbiters to (a) unfair labor practice cases; (b) termination disputes; (c) if accompanied with a claim for reinstatement, those cases that workers may file involving wages, rates of pay, hours of work and other terms and conditions of employment; (d) claims for actual, moral exemplary and other forms of damages arising from the employer-employee relations; (e) cases arising from any violation of Art. 264 of this Code, including questions involving the legality of strikes and lockouts; and, (f) except for claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other claims arising from employer-employee relations, including those of persons in domestic or household service, involving an amount exceeding P5,000.00 regardless of whether accompanied with a claim for reinstatement. In the instant case, there is want of evidence that the P15,000 6 or P7,500.00 7 supposed indebtedness of Espino to Alinas arose out of employer-employee relationship. On the contrary, it was admitted by both parties that such indebtedness was a personal loan to Espino and out of the personal funds of Alinas. Clearly, this personal loan is not within the ambit of the Labor Arbiter's jurisdiction. Under par. (b) of Art. 217 of the Labor Code, the NLRC shall have exclusive appellate jurisdiction over all cases decided by labor arbiters. This simply means that if a claim does not fall within the exclusive original jurisdiction of the labor arbiter, the NLRC cannot have appellate jurisdiction thereon, 8 much less receive additional evidence. As a result, the NLRC gravely abused its discretion

when it affirmed the garnishment of Espino's salary and allowed its set-off against Espino's personal loan on the ground that it does not fall within the Labor Arbiter's exclusive original jurisdiction. WHEREFORE, the decision of public respondent National Labor Relations Commission is MODIFIED. Private respondent BARBARA A. CAMACHO-ESPINO is AWARDED full back wages, including 13th month pay and other benefits, computed from 31 January 1992, the date when her compensation was withheld, until 4 July 1994, the date of her actual reinstatement. Meanwhile, the garnishment of private respondent Barbara A. Camacho-Espino's salary and allowing the set-off against her supposed personal loan with Alinas is nullified and disregarded. SO ORDERED. Puno, Mendoza and Martinez, JJ., concur. Footnotes 1 NLRC Records, pp. 139-141. 2 Id., p. 211. 3 Id., p. 225. 4 Bustamante v. National Labor Relations Commission, G.R. No. 111651, 28 November 1996, 265 SCRA 7071. 5 Rasonable v. National Labor Relations Commission, G.R. No. 117195, 20 February 1996, 253 SCRA 823. 6 As found by the Labor Arbiter. 7 As found by the National Labor Relations Commission. 8 Pondoc v. National Labor Relations Commission, G.R. No. 116347, 3 October 1996, 262 SCRA 639. G.R. No. 177467 March 9, 2011

PFIZER, INC. AND/OR REY GERARDO BACARRO, AND/OR FERDINAND CORTES, AND/OR ALFRED MAGALLON, AND/OR ARISTOTLE ARCE, Petitioners, vs. GERALDINE VELASCO, Respondent. DECISION LEONARDO-DE CASTRO, J.: This is a petition for review on certiorari under Rule 45 of the Rules of Civil Procedure to annul and set aside the Resolution1 dated October 23, 2006 as well as the Resolution2 dated April 10, 2007 both issued by the Court of Appeals in CA-G.R. SP No. 88987 entitled, "Pfizer, Inc. and/or Rey Gerardo Bacarro, and/or Ferdinand Cortes, and/or Alfred Magallon, and/or Aristotle Arce v. National Labor Relations Commission Second Division and Geraldine Velasco." The October 23, 2006 Resolution modified upon respondents motion for reconsideration the Decision3 dated November 23, 2005 of the Court of Appeals by requiring PFIZER, Inc. (PFIZER) to pay respondents wages from the date of the Labor Arbiters Decision4 dated December 5, 2003 until it was eventually reversed and set aside by the Court of Appeals. The April 10, 2007 Resolution, on the other hand, denied PFIZERs motion for partial reconsideration. The facts of this case, as stated in the Court of Appeals Decision dated November 23, 2005, are as follows: Private respondent Geraldine L. Velasco was employed with petitioner PFIZER, INC. as Professional Health Care Representative since 1 August 1992. Sometime in April 2003, Velasco had a medical work up for her high-risk pregnancy and was subsequently advised bed rest which resulted in her extending her leave of absence. Velasco filed her sick leave for the period from 26 March to 18 June 2003, her vacation leave from 19 June to 20 June 2003, and leave without pay from 23 June to 14 July 2003.

On 26 June 2003, while Velasco was still on leave, PFIZER through its Area Sales Manager, herein petitioner Ferdinand Cortez, personally served Velasco a "Show-cause Notice" dated 25 June 2003. Aside from mentioning about an investigation on her possible violations of company work rules regarding "unauthorized deals and/or discounts in money or samples and unauthorized withdrawal and/or pull-out of stocks" and instructing her to submit her explanation on the matter within 48 hours from receipt of the same, the notice also advised her that she was being placed under "preventive suspension" for 30 days or from that day to 6 August 2003 and consequently ordered to surrender the following "accountabilities;" 1) Company Car, 2) Samples and Promats, 3) CRF/ER/VEHICLE/SOA/POSAP/MPOA and other related Company Forms, 4) Cash Card, 5) Caltex Card, and 6) MPOA/TPOA Revolving Travel Fund. The following day, petitioner Cortez together with one Efren Dariano retrieved the above-mentioned "accountabilities" from Velascos residence. In response, Velasco sent a letter addressed to Cortez dated 28 June 2003 denying the charges. In her letter, Velasco claimed that the transaction with Mercury Drug, Magsaysay Branch covered by her check (no. 1072) in the amount of P23,980.00 was merely to accommodate two undisclosed patients of a certain Dr. Renato Manalo. In support thereto, Velasco attached the Doctors letter and the affidavit of the latters secretary. On 12 July 2003, Velasco received a "Second Show-cause Notice" informing her of additional developments in their investigation. According to the notice, a certain Carlito Jomen executed an affidavit pointing to Velasco as the one who transacted with a printing shop to print PFIZER discount coupons. Jomen also presented text messages originating from Velascos company issued cellphone referring to the printing of the said coupons. Again, Velasco was given 48 hours to submit her written explanation on the matter. On 16 July 2003, Velasco sent a letter to PFIZER via Aboitiz courier service asking for additional time to answer the second Showcause Notice. That same day, Velasco filed a complaint for illegal suspension with money claims before the Regional Arbitration Branch. The following day, 17 July 2003, PFIZER sent her a letter inviting her to a disciplinary hearing to be held on 22 July 2003. Velasco received it under protest and informed PFIZER via the receiving copy of the said letter that she had lodged a complaint against the latter and that the issues that may be raised in the July 22 hearing "can be tackled during the hearing of her case" or at the preliminary conference set for 5 and 8 of August 2003. She likewise opted to withhold answering the Second Show-cause Notice. On 25 July 2003, Velasco received a "Third Show-cause Notice," together with copies of the affidavits of two Branch Managers of Mercury Drug, asking her for her comment within 48 hours. Finally, on 29 July 2003, PFIZER informed Velasco of its "Management Decision" terminating her employment. On 5 December 2003, the Labor Arbiter rendered its decision declaring the dismissal of Velasco illegal, ordering her reinstatement with backwages and further awarding moral and exemplary damages with attorney s fees. On appeal, the NLRC affirmed the same but deleted the award of moral and exemplary damages.5 The dispositive portion of the Labor Arbiters Decision dated December 5, 2003 is as follows: WHEREFORE, judgment is hereby rendered declaring that complainant was illegally dismissed. Respondents are ordered to reinstate the complainant to her former position without loss of seniority rights and with full backwages and to pay the complainant the following:

1. 2. 3. 4. 5.

Full backwages (basic salary, company benefits, all allowances as of December 5, 2003 in the amount of 13th Month Pay, Midyear, Christmas and performance bonuses in the amount of Moral damages of Exemplary damages in the amount of Attorneys Fees of 10% of the award excluding damages in the amount of The total award is in the amount of

P572,780.00); P105,300.00; P50,000.00; P30,000.00; P67,808.00. P758,080.00.6

PFIZER appealed to the National Labor Relations Commission (NLRC) but its appeal was denied via the NLRC Decision7 dated October 20, 2004, which affirmed the Labor Arbiters ruling but deleted the award for damages, the dispositive portion of whi ch is as follows: WHEREFORE, premises considered, the instant appeal and the motion praying for the deposit in escrow of complainants payroll reinstatement are hereby denied and the Decision of the Labor Arbiter is affirmed with the modification that the award of moral and exemplary damages is deleted and attorneys fees shall be based on the award of 13th mon th pay pursuant to Article III of the Labor Code.8

PFIZER moved for reconsideration but its motion was denied for lack of merit in a NLRC Resolution9 dated December 14, 2004. Undaunted, PFIZER filed with the Court of Appeals a special civil action for the issuance of a writ of certiorariunder Rule 65 of the Rules of Court to annul and set aside the aforementioned NLRC issuances. In a Decision dated November 23, 2005, the Court of Appeals upheld the validity of respondents dismissal from employment, the dispositive portion of which reads as follows: WHEREFORE, the instant petition is GRANTED. The assailed Decision of the NLRC dated 20 October 2004 as well as its Resolution of 14 December 2004 is hereby ANNULED and SET ASIDE. Having found the termination of Geraldine L. Velascos employment in accordance with the two notice rule pursuant to the due process requirement and with just cause, her complaint for illegal dismissal is hereby DISMISSED.10 Respondent filed a Motion for Reconsideration which the Court of Appeals resolved in the assailed Resolution dated October 23, 2006 wherein it affirmed the validity of respondents dismissal from employment but modified its earlier ruling by directing PFIZER to pay respondent her wages from the date of the Labor Arbiters Decision dated December 5, 2003 up to the Court of Appeals Decision dated November 23, 2005, to wit: IN VIEW WHEREOF, the dismissal of private respondent Geraldine Velasco is AFFIRMED, but petitioner PFIZER, INC. is hereby ordered to pay her the wages to which she is entitled to from the time the reinstatement order was issued until November 23, 2005, the date of promulgation of Our Decision.11 Respondent filed with the Court a petition for review under Rule 45 of the Rules of Civil Procedure, which assailed the Court of Appeals Decision dated November 23, 2005 and was docketed as G.R. No. 175122. Respondents petition, questionin g the Court of Appeals dismissal of her complaint, was denied by this Courts Second Division in a minute Resolution12 dated December 5, 2007, the pertinent portion of which states: Considering the allegations, issues and arguments adduced in the petition for review on certiorari, the Court resolves to DENY the petition for failure to sufficiently show any reversible error in the assailed judgment to warrant the exercise of this Courts discretionary appellate jurisdiction, and for raising substantially factual issues. On the other hand, PFIZER filed the instant petition assailing the aforementioned Court of Appeals Resolutions and offering for our resolution a single legal issue, to wit: Whether or not the Court of Appeals committed a serious but reversible error when it ordered Pfizer to pay Velasco wages from the date of the Labor Arbiters decision ordering her reinstatement until November 23, 2005, when the C ourt of Appeals rendered its decision declaring Velascos dismissal valid.13 The petition is without merit. PFIZER argues that, contrary to the Court of Appeals pronouncement in its assailed Decision dated November 23, 2005, the ruling in Roquero v. Philippine Airlines, Inc.14 is not applicable in the case at bar, particularly with regard to the nature and consequences of an order of reinstatement, to wit: The order of reinstatement is immediately executory. The unjustified refusal of the employer to reinstate a dismissed employee entitles him to payment of his salaries effective from the time the employer failed to reinstate him despite the issuance of a writ of execution. Unless there is a restraining order issued, it is ministerial upon the Labor Arbiter to implement the order of reinstatement. In the case at bar, no restraining order was granted. Thus, it was mandatory on PAL to actually reinstate Roquero or reinstate him in the payroll. Having failed to do so, PAL must pay Roquero the salary he is entitled to, as if he was reinstated, from the time of the decision of the NLRC until the finality of the decision of the Court.15 (Emphases supplied.) It is PFIZERs contention in its Memorandum 16 that "there was no unjustified refusal on [its part] to reinstate [respondent] Velasco during the pendency of the appeal,"17 thus, the pronouncement in Roquero cannot be made to govern this case. During the pendency of the case with the Court of Appeals and prior to its November 23, 2005 Decision, PFIZER claimed that it had already required respondent to report for work on July 1, 2005. However, according to PFIZER, it was respondent who refused to return to work when she wrote PFIZER, through counsel, that she was opting to receive her separation pay and to avail of PFIZERs early retirement program. In PFIZERs view, it should no longer be required to pay wages considering that (1) it had already previously paid an enormou s sum to respondent under the writ of execution issued by the Labor Arbiter; (2) it was allegedly ready to reinstate respondent as of July 1, 2005 but it was respondent who unjustifiably refused to report for work; (3) it would purportedly be tantamount to allowing respondent to choose "payroll reinstatement" when by law it was the employer which had the right to choose between actual and payroll reinstatement; (4) respondent should be deemed to have "resigned" and therefore not entitled to additional backwages or separation pay; and (5) this Court should not mechanically apply Roquero but rather should follow the doctrine in Genuino v. National Labor Relations Commission18 which was supposedly "more in accord with the dictates of fairness and justice." 19

We do not agree. At the outset, we note that PFIZERs previous payment to respondent of the amount of P1,963,855.00 (representing her wages from December 5, 2003, or the date of the Labor Arbiter decision, until May 5, 2005) that was successfully garnished under the Labor Arbiters Writ of Execution dated May 26, 2005 cannot be considered in its favor. Not only was this sum legally due to respon dent under prevailing jurisprudence but also this circumstance highlighted PFIZERs unreasonable delay in complying with the reinstatement order of the Labor Arbiter. A perusal of the records, including PFIZERs own submissions, confirmed that it onl y required respondent to report for work on July 1, 2005, as shown by its Letter20 dated June 27, 2005, which is almost two years from the time the order of reinstatement was handed down in the Labor Arbiters Decision dated December 5, 2003. As far back as 1997 in the seminal case of Pioneer Texturizing Corporation v. National Labor Relations Commission,21 the Court held that an award or order of reinstatement is immediately self-executory without the need for the issuance of a writ of execution in accordance with the third paragraph of Article 22322 of the Labor Code. In that case, we discussed in length the rationale for that doctrine, to wit: The provision of Article 223 is clear that an award [by the Labor Arbiter] for reinstatement shall be immediately executory even pending appeal and the posting of a bond by the employer shall not stay the execution for reinstatement. The legislative intent is quite obvious, i.e., to make an award of reinstatement immediately enforceable, even pending appeal. To require the application for and issuance of a writ of execution as prerequisites for the execution of a reinstatement award would certainly betray and run counter to the very object and intent of Article 223, i.e., the immediate execution of a reinstatement order. The reason is simple. An application for a writ of execution and its issuance could be delayed for numerous reasons. A mere continuance or postponement of a scheduled hearing, for instance, or an inaction on the part of the Labor Arbiter or the NLRC could easily delay the issuance of the writ thereby setting at naught the strict mandate and noble purpose envisioned by Article 223. In other words, if the requirements of Article 224 [including the issuance of a writ of execution] were to govern, as we so declared in Maranaw, then the executory nature of a reinstatement order or award contemplated by Article 223 will be unduly circumscribed and rendered ineffectual. In enacting the law, the legislature is presumed to have ordained a valid and sensible law, one which operates no further than may be necessary to achieve its specific purpose. Statutes, as a rule, are to be construed in the light of the purpose to be achieved and the evil sought to be prevented. x x x In introducing a new rule on the reinstatement aspect of a labor decision under Republic Act No. 6715, Congress should not be considered to be indulging in mere semantic exercise. x x x23 (Italics in the original; emphasis and underscoring supplied.) In the case at bar, PFIZER did not immediately admit respondent back to work which, according to the law, should have been done as soon as an order or award of reinstatement is handed down by the Labor Arbiter without need for the issuance of a writ of execution. Thus, respondent was entitled to the wages paid to her under the aforementioned writ of execution. At most, PFIZER s payment of the same can only be deemed partial compliance/execution of the Court of Appeals Resolution dated October 23, 2006 and would not bar respondent from being paid her wages from May 6, 2005 to November 23, 2005. It would also seem that PFIZER waited for the resolution of its appeal to the NLRC and, only after it was ordered by the Labor Arbiter to pay the amount of P1,963,855.00 representing respondents full backwages from December 5, 2003 up to May 5, 2005, did PFIZER decide to require respondent to report back to work via the Letter dated June 27, 2005. PFIZER makes much of respondents non-compliance with its return- to-work directive by downplaying the reasons forwarded by respondent as less than sufficient to justify her purported refusal to be reinstated. In PFIZERs view, the return -to-work order it sent to respondent was adequate to satisfy the jurisprudential requisites concerning the reinstatement of an illegally dismissed employee. It would be useful to reproduce here the text of PFIZERs Letter dated June 27, 2005: Dear Ms. Velasco: Please be informed that, pursuant to the resolutions dated 20 October 2004 and 14 December 2004 rendered by the National Labor Relations Commission and the order dated 24 May 2005 issued by Executive Labor Arbiter Vito C. Bose, you are required to report for work on 1 July 2005, at 9:00 a.m., at Pfizers main office at the 23rd Floor, Ayala LifeFGU Center, 6811 Ayala Avenue, Makati City, Metro Manila. Please report to the undersigned for a briefing on your work assignments and other responsibilities, including the appropriate relocation benefits. For your information and compliance. Very truly yours, (Sgd.) Ma. Eden Grace Sagisi

Labor and Employee Relations Manager24 To reiterate, under Article 223 of the Labor Code, an employee entitled to reinstatement "shall either be admitted back to work under the same terms and conditions prevailing prior to his dismissal or separation or, at the option of the employer, merely reinstated in the payroll." It is established in jurisprudence that reinstatement means restoration to a state or condition from which one had been removed or separated. The person reinstated assumes the position he had occupied prior to his dismissal. Reinstatement presupposes that the previous position from which one had been removed still exists, or that there is an unfilled position which is substantially equivalent or of similar nature as the one previously occupied by the employee.25 Applying the foregoing principle to the case before us, it cannot be said that with PFIZERs June 27, 2005 Letter, in belated fulfillment of the Labor Arbiters reinstatement order, it had shown a clear intent to reinstate respondent to he r former position under the same terms and conditions nor to a substantially equivalent position. To begin with, the return-to-work order PFIZER sent respondent is silent with regard to the position or the exact nature of employment that it wanted respondent to take up as of July 1, 2005. Even if we assume that the job awaiting respondent in the new location is of the same designation and pay category as what she had before, it is plain from the text of PFIZERs June 27, 2005 letter that such reinstatement was not "under the same terms and conditions" as her previous employment, considering that PFIZER ordered respondent to report to its main office in Makati City while knowing fully well that respondents previous job had her stationed in Baguio City (respondents place of residence) and it was still necessary for respondent to be briefed regarding her work assignments and responsibilities, including her relocation benefits. The Court is cognizant of the prerogative of management to transfer an employee from one office to another within the business establishment, provided that there is no demotion in rank or diminution of his 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.26 Likewise, the management prerogative to transfer personnel must be exercised without grave abuse of discretion and putting to mind the basic elements of justice and fair play. There must be no showing that it is unnecessary, inconvenient and prejudicial to the displaced employee.27 The June 27, 2005 return-to-work directive implying that respondent was being relocated to PFIZERs Makati main office would necessarily cause hardship to respondent, a married woman with a family to support residing in Baguio City. However, PFIZER, as the employer, offered no reason or justification for the relocation such as the filling up of respondents former position an d the unavailability of substantially equivalent position in Baguio City. A transfer of work assignment without any justification therefor, even if respondent would be presumably doing the same job with the same pay, cannot be deemed faithful compliance with the reinstatement order. In other words, in this instance, there was no real, bona fide reinstatement to speak of prior to the reversal by the Court of Appeals of the finding of illegal dismissal. In view of PFIZERs failure to effect respondent's actual or payroll reinstatement, it is indubitable that the Roqueroruling is applicable to the case at bar. The circumstance that respondent opted for separation pay in lieu of reinstatement as manifested in her counsels Letter28 dated July 18, 2005 is of no moment. We do not see respondents letter as taking away the option from management to effect actual or payroll reinstatement but, rather under the factual milieu of this case, where the employer failed to categorically reinstate the employee to her former or equivalent position under the same terms, respondent was not obliged to comply with PFIZERs ambivalent return-to-work order. To uphold PFIZERs view that it was respondent who unjustifiably refused to work when PFIZER did not reinstate her to her former position, and worse, required her to report for work under conditions prejudicial to her, is to open the doors to potential employer abuse. Foreseeably, an employer may circumvent the immediately enforceable reinstatement order of the Labor Arbiter by crafting return-to-work directives that are ambiguous or meant to be rejected by the employee and then disclaim liability for backwages due to non-reinstatement by capitalizing on the employees purported refusal to work. In sum, the option of the employer to effect actual or payroll reinstatement must be exercised in good faith. Moreover, while the Court has upheld the employers right to choose between actually reinstating an employee or merely reinst ating him in the payroll, we have also in the past recognized that reinstatement might no longer be possible under certain circumstances. In F.F. Marine Corporation v. National Labor Relations Commission,29 we had the occasion to state: It is well-settled that when a person is illegally dismissed, he is entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages. In the event, however, that reinstatement is no longer feasible, or if the employee decides not be reinstated, the employer shall pay him separation pay in lieu of reinstatement. Such a rule is likewise observed in the case of a strained employer-employee relationship or when the work or position formerly held by the dismissed employee no longer exists. In sum, an illegally dismissed employee is entitled to: (1) either reinstatement if viable or separation pay if reinstatement is no longer viable, and (2) backwages.30 (Emphasis supplied.) Similarly, we have previously held that an employees demand for separation pay may be indicative of strained relations that may justify payment of separation pay in lieu of reinstatement.31 This is not to say, however, that respondent is entitled to separation pay in addition to backwages. We stress here that a finding of strained relations must nonetheless still be supported by substantial evidence.32

In the case at bar, respondents decision to claim separation pay over reinstatement had no legal effect, not only because th ere was no genuine compliance by the employer to the reinstatement order but also because the employer chose not to act on said claim. If it was PFIZERs position that respondents act amounted to a "resignation" it should have informed respondent that it w as accepting her resignation and that in view thereof she was not entitled to separation pay. PFIZER did not respond to respondents deman d at all. As it was, PFIZERs failure to effect reinstatement and accept respondents offer to terminate her employmen t relationship with the company meant that, prior to the Court of Appeals reversal in the November 23, 2005 Decision, PFIZERs liability for backwages continued to accrue for the period not covered by the writ of execution dated May 24, 2005 until November 23, 2005. Lastly, PFIZER exhorts the Court to re-examine the application of Roquero with a view that a mechanical application of the same would cause injustice since, in the present case, respondent was able to gain pecuniary benefit notwithstanding the circumstance of reversal by the Court of Appeals of the rulings of the Labor Arbiter and the NLRC thereby allowing respondent to profit from the dishonesty she committed against PFIZER which was the basis for her termination. In its stead, PFIZER proposes that the Court apply the ruling in Genuino v. National Labor Relations Commission33 which it believes to be more in accord with the dictates of fairness and justice. In that case, we canceled the award of salaries from the date of the decision of the Labor Arbiter awarding reinstatement in light of our subsequent ruling finding that the dismissal is for a legal and valid ground, to wit: Anent the directive of the NLRC in its September 3, 1994 Decision ordering Citibank "to pay the salaries due to the complainant from the date it reinstated complainant in the payroll (computed at P60,000.00 a month, as found by the Labor Arbiter) up to and until the date of this decision," the Court hereby cancels said award in view of its finding that the dismissal of Genuino is for a legal and valid ground. Ordinarily, the employer is required to reinstate the employee during the pendency of the appeal pursuant to Art. 223, paragraph 3 of the Labor Code, which states: xxxx If the decision of the labor arbiter is later reversed on appeal upon the finding that the ground for dismissal is valid, then the employer has the right to require the dismissed employee on payroll reinstatement to refund the salaries s/he received while the case was pending appeal, or it can be deducted from the accrued benefits that the dismissed employee was entitled to receive from his/her employer under existing laws, collective bargaining agreement provisions, and company practices. However, if the employee was reinstated to work during the pendency of the appeal, then the employee is entitled to the compensation received for actual services rendered without need of refund. Considering that Genuino was not reinstated to work or placed on payroll reinstatement, and her dismissal is based on a just cause, then she is not entitled to be paid the salaries stated in item no. 3 of the fallo of the September 3, 1994 NLRC Decision.34 (Emphases supplied.) Thus, PFIZER implores the Court to annul the award of backwages and separation pay as well as to require respondent to refund the amount that she was able to collect by way of garnishment from PFIZER as her accrued salaries. The contention cannot be given merit since this question has been settled by the Court en banc. In the recent milestone case of Garcia v. Philippine Airlines, Inc.,35 the Court wrote finis to the stray posture inGenuino requiring the dismissed employee placed on payroll reinstatement to refund the salaries in case a final decision upholds the validity of the dismissal. In Garcia, we clarified the principle of reinstatement pending appeal due to the emergence of differing rulings on the issue, to wit: On this score, the Court's attention is drawn to seemingly divergent decisions concerning reinstatement pending appeal or, particularly, the option of payroll reinstatement. On the one hand is the jurisprudential trend as expounded in a line of cases including Air Philippines Corp. v. Zamora, while on the other is the recent case ofGenuino v. National Labor Relations Commission. At the core of the seeming divergence is the application of paragraph 3 of Article 223 of the Labor Code x x x. xxxx The view as maintained in a number of cases is that: x x x [E]ven if the order of reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory on the part of the employer to reinstate and pay the wages of the dismissed employee during the period of appeal until reversal by the higher court. On the other hand, if the employee has been reinstated during the appeal period and such reinstatement order is reversed with finality, the employee is not required to reimburse whatever salary he received for he is entitled to such, more so if he actually rendered services during the period.(Emphasis in the original; italics and underscoring supplied)

In other words, a dismissed employee whose case was favorably decided by the Labor Arbiter is entitled to receive wages pending appeal upon reinstatement, which is immediately executory. Unless there is a restraining order, it is ministerial upon the Labor Arbiter to implement the order of reinstatement and it is mandatory on the employer to comply therewith. The opposite view is articulated in Genuino which states: If the decision of the labor arbiter is later reversed on appeal upon the finding that the ground for dismissal is valid, then the employer has the right to require the dismissed employee on payroll reinstatement to refund the salaries [he] received while the case was pending appeal, or it can be deducted from the accrued benefits that the dismissed employee was entitled to receive from [his] employer under existing laws, collective bargaining agreement provisions, and company practices. However, if the employee was reinstated to work during the pendency of the appeal, then the employee is entitled to the compensation received for actual services rendered without need of refund. Considering that Genuino was not reinstated to work or placed on payroll reinstatement, and her dismissal is based on a just cause, then she is not entitled to be paid the salaries stated in item no. 3 of the fallo of the September 3, 1994 NLRC Decision. (Emphasis, italics and underscoring supplied) It has thus been advanced that there is no point in releasing the wages to petitioners since their dismissal was found to be valid, and to do so would constitute unjust enrichment. Prior to Genuino, there had been no known similar case containing a dispositive portion where the employee was required to refund the salaries received on payroll reinstatement. In fact, in a catena of cases, the Court did not order the refund of salaries garnished or received by payroll-reinstated employees despite a subsequent reversal of the reinstatement order. The dearth of authority supporting Genuino is not difficult to fathom for it would otherwise render inutile the rationale of reinstatement pending appeal. xxxx x x x Then, by and pursuant to the same power (police power), the State may authorize an immediate implementation, pending appeal, of a decision reinstating a dismissed or separated employee since that saving act is designed to stop, although temporarily since the appeal may be decided in favor of the appellant, a continuing threat or danger to the survival or even the life of the dismissed or separated employee and his family.36 Furthermore, in Garcia, the Court went on to discuss the illogical and unjust effects of the "refund doctrine" erroneously espoused in Genuino: Even outside the theoretical trappings of the discussion and into the mundane realities of human experience, the "refund doctrine" easily demonstrates how a favorable decision by the Labor Arbiter could harm, more than help, a dismissed employee. The employee, to make both ends meet, would necessarily have to use up the salaries received during the pendency of the appeal, only to end up having to refund the sum in case of a final unfavorable decision. It is mirage of a stop-gap leading the employee to a risky cliff of insolvency.1avvphi1 Advisably, the sum is better left unspent. It becomes more logical and practical for the employee to refuse payroll reinstatement and simply find work elsewhere in the interim, if any is available. Notably, the option of payroll reinstatement belongs to the employer, even if the employee is able and raring to return to work. Prior to Genuino, it is unthinkable for one to refuse payroll reinstatement. In the face of the grim possibilities, the rise of concerned employees declining payroll reinstatement is on the horizon. Further, the Genuino ruling not only disregards the social justice principles behind the rule, but also institutes a scheme unduly favorable to management. Under such scheme, the salaries dispensed pendente lite merely serve as a bond posted in installment by the employer. For in the event of a reversal of the Labor Arbiter's decision ordering reinstatement, the employer gets back the same amount without having to spend ordinarily for bond premiums. This circumvents, if not directly contradicts, the proscription that the "posting of a bond [even a cash bond] by the employer shall not stay the execution for reinstatement." In playing down the stray posture in Genuino requiring the dismissed employee on payroll reinstatement to refund the salaries in case a final decision upholds the validity of the dismissal, the Court realigns the proper course of the prevailing doctrine on reinstatement pending appeal vis--vis the effect of a reversal on appeal. xxxx

The Court reaffirms the prevailing principle that even if the order of reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory on the part of the employer to reinstate and pay the wages of the dismissed employee during the period of appeal until reversal by the higher court. x x x.37 (Emphasis supplied.) In sum, the Court reiterates the principle that reinstatement pending appeal necessitates that it must be immediately self-executory without need for a writ of execution during the pendency of the appeal, if the law is to serve its noble purpose, and any attempt on the part of the employer to evade or delay its execution should not be allowed. Furthermore, we likewise restate our ruling that an order for reinstatement entitles an employee to receive his accrued backwages from the moment the reinstatement order was issued up to the date when the same was reversed by a higher court without fear of refunding what he had received. It cannot be denied that, under our statutory and jurisprudential framework, respondent is entitled to payment of her wages for the period after December 5, 2003 until the Court of Appeals Decision dated November 23, 2005, notwithstanding the finding therein that her dismissal was legal and for just cause. Thus, the payment of such wages cannot be deemed as unjust enrichment on respondents part. WHEREFORE, the petition is DENIED and the assailed Resolution dated October 23, 2006 as well as the Resolution dated April 10, 2007 both issued by the Court of Appeals in CA-G.R. SP No. 88987 are hereby AFFIRMED. SO ORDERED. TERESITA J. LEONARDO-DE CASTRO Associate Justice WE CONCUR: RENATO C. CORONA Chief Justice Chairperson PRESBITERO J. VELASCO, JR. Associate Justice JOSE PORTUGAL PEREZ Associate Justice CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division. RENATO C. CORONA Chief Justice MARIANO C. DEL CASTILLO Associate Justice

Footnotes
1

Rollo, pp. 42-44. Id. at 65-66.

Id. at 307-323; penned by Associate Justice Rosmari D. Carandang with Associate Justices Andres B. Reyes, Jr. and Monina Arevalo-Zenarosa, concurring.
4

Id. at 187-201. Id. at 307-310. Id. at 201.

Id. at 234-248; penned by NLRC Commissioner Ernesto C. Verceles with Presiding Commissioner Lourdes C. Javier and Commissioner Tito F. Genilo, concurring.
8

Id. at 247. Id. at 265-266. Id. at 322-323. Id. at 43. Rollo (G.R. No. 175122), p. 238. Id. at 403. 449 Phil. 437 (2003). Id. at 446. Rollo, pp. 394-415. Id. at 405. G.R. Nos. 142732-33 and 142753-54, December 4, 2007, 539 SCRA 342. Rollo, p. 411. Id. at 304. 345 Phil. 1057 (1997).

10

11

12

13

14

15

16

17

18

19

20

21

22

In any event, the decision of the Labor Arbiter reinstating a dismissed or separated employee, insofar as the reinstatement aspect is concerned, shall immediately be executory, even pending appeal. The employee shall either be admitted back to work under the same terms and conditions prevailing prior to his dismissal or separation or, at the option of the employer, merely reinstated in the payroll. The posting of a bond by the employer shall not stay the execution for reinstatement provided herein.
23

Pioneer Texturizing Corporation v. National Labor Relations Commission, supra note 21 at 1075-1076. Rollo, p. 304. Asian Terminals, Inc. v. Villanueva, G.R. No. 143219, November 28, 2006, 508 SCRA 346, 352. Norkis Trading Co., Inc. v. Gnilo, G.R. No. 159730, February 11, 2008, 544 SCRA 279, 289. Urbanes, Jr. v. Court of Appeals, G.R. No. 138379, November 25, 2004, 444 SCRA 84, 95. Rollo, pp. 305-306. 495 Phil. 140 (2005). Id. at 159. F.R.F. Enterprises, Inc. v. National Labor Relations Commission, 313 Phil. 493, 502 (1995). Golden Ace Builders v. Talde, G.R. No. 187200, May 5, 2010.

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29

30

31

32

33

Supra note 18. Id. at 363-364. G.R. No. 164856, January 20, 2009, 576 SCRA 479. Id. at 488-491. Id. at 491-493. September 21, 2011

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37

G.R. No. 178699

BPI EMPLOYEES UNION METRO MANILA and ZENAIDA UY, Petitioners, vs. BANK OF THE PHILIPPINE ISLANDS, Respondent. x - - - - - - - - - - - - - - -x G.R. No. 178735 BANK OF THE PHILIPPINE ISLANDS, Petitioner, vs. BPI EMPLOYEES UNION - METRO MANILA and ZENAIDA UY, Respondents. DECISION DEL CASTILLO, J.: The base figure in computing the award of back wages to an illegally dismissed employee is the emp loyees basic salary plus regular allowances and benefits received at the time of dismissal, unqualified by any wage and benefit increases granted in the interim.1 By these consolidated Petitions for Review on Certiorari,2 the Bank of the Philippine Islands (BPI), BPI Employees Union-Metro Manila (the Union) and Zenaida Uy (Uy) seek modification of the Court of Appeals' (CA) Amended Decision3 dated July 4, 2007 in CA-G.R. SP No. 92631. Said Amended Decision computed Uy's back wages and other monetary awards pursuant to the final and executory Decision4 dated March 31, 2005 of this Court in G.R. No. 137863 based on her salary rate at the time of her dismissal and disregarded the salary increases granted in the interim as well as other benefits which were not proven to have been granted at the time of Uy's dismissal from the service. Factual Antecedents On December 14, 1995, Uys services as a bank teller in BPIs Escolta Branch was terminated on grounds of gross disrespect/discourtesy towards an officer, insubordination and absence without leave. Uy, together with the Union, thus filed a case for illegal dismissal. On December 31, 1997, the Voluntary Arbitrator5 rendered a Decision6 finding Uy's dismissal as illegal and ordering BPI to immediately reinstate Uy and to pay her full back wages, including all her other benefits under the Collective Bargaining Agreement (CBA) and attorneys fees.7 On October 28, 1998, the CA affirmed with modification the Decision of the Voluntary Arbitrator. Instead of reinstatement, the CA ordered BPI to pay Uy her separation pay. Further, instead of full back wages, the CA fixed Uy's back wages to three years.8 The case eventually reached this Court when both parties separately filed petitions for review on certiorari. While BPIs petition which was docketed as G.R. No. 137856 was denied for failure to comply with the requirements of a valid certification of non-forum shopping,9 Uys and the Unions petition which was docketed as G.R. No. 137863 was given due course. On March 31, 2005, the Court rendered its Decision10 in G.R. No. 137863, the dispositive portion of which reads: WHEREFORE, the instant petition is GRANTED. The assailed 28 October 1998 Decision and 8 March 1999 Resolution of the Court of Appeals are hereby MODIFIED as follows: 1) respondent BPI is DIRECTED to pay petitioner Uy backwages from the time of her

illegal dismissal until her actual reinstatement; and 2) respondent BPI is ORDERED to reinstate petitioner Uy to her former position, or to a substantially equivalent one, without loss of seniority right and other benefits attendant to the position. SO ORDERED.11 Ruling of the Voluntary Arbitrator After the Decision in G.R. No. 137863 became final and executory, Uy and the Union filed with the Office of the Voluntary Arbitrator a Motion for the Issuance of a Writ of Execution.12 In Uys computation, she based the amount of her back wages on the current wage level and included all the increases in wages and benefits under the CBA that were granted during the entire period of her illegal dismissal. These include the following: Cost of Living Allowance (COLA), Financial Assistance, Quarterly Bonus, CBA Signing Bonus, Uniform Allowance, Medicine Allowance, Dental Care, Medical and Doctors Allowance, Tellers Functional Allowance, Vacation Leave, Sick Leave, Holiday Pay, Annivers ary Bonus, Burial Assistance and Omega watch.13 BPI disputed Uy's/Unions computation arguing that it contains items which are not included in the term "back wages" and that no proof was presented to show that Uy was receiving all the listed items therein before her termination. It claimed that the basis for the computation of back wages should be the employees wage rate at the time of dismissal.14 In an Order dated December 6, 2005,15 the Voluntary Arbitrator agreed with Uys/Unions contention that full back wages should include all wage and benefit increases, including new benefits granted during the period of dismissal. The Voluntary Arbitrator opined that this Courts March 31, 2005 Decision in G.R. No. 137863 reinstated his December 31, 1997 Decision which ordered t he payment of full back wages computed from the time of dismissal until actual reinstatement including all benefits under the CBA. Nonetheless, the Voluntary Arbitrator excluded the claims for uniform allowance, anniversary bonus and Omega watch for want of basis for their grant. The Voluntary Arbitrator thus granted the motion for issuance of writ of execution and computed Uys back wages in the total amount of P3,897,197.89 as follows: Basic Monthly Salary (BMS) ..............................................P 2,062, 087.50 Cost of Living Allowance.......................................................... 56, 100.00 Financial Assistance.................................................................... 39,000.00 Total Quarterly Bonuses ....................................................... 693, 820.00 CBA Signing Bonus................................................................... 32, 500.00 Medicine Allowance................................................................... 58, 400.00 Dental Care .............................................................................. 14, 120.00 Medical and Doctors Allowance.................................... 58, 400.00 Tellers Functional Allowance........................................ 25, 500.00 Vacation Leave............................................................................ 187, 085.50 Sick Leave.................................................................................... 187, 085.50 Holiday Pay.................................................................................. 128, 808.65 Attorneys Fee.............................................................................. 354, 290.72 Grand Total....................................................................................P 3,897,197.8916

A Writ of Execution17 and a Notice of Garnishment18 were subsequently issued. Ruling of the Court of Appeals Imputing grave abuse of discretion on the part of the Voluntary Arbitrator, BPI filed with the CA a Petition for Certiorari with urgent Motion for the Issuance of a Temporary Restraining Order (TRO) and/or Writ of Preliminary Injunction.19 BPI alleged that the Voluntary Arbitrators erroneous computation of back wages amended and varied the terms of the March 31, 2005 final and executory Decision in G.R. No. 137863. Specifically, it averred that the Voluntary Arbitrator erred in computing back wages based on the current rate and in including the wage increases or benefits given in the interim as well as attorney's fees. BPI further argued that there was no basis for the award of tellers functional allowance, cash conversion of vacation and sick leaves and dental care allowance. In their Comment,20 Uy and the Union alleged that BPIs remedy is not a certiorari petition under Rule 65 of the Rules of Court but an appeal from judgments, final orders and resolutions of voluntary arbitrators under Rule 43 of the Rules of Court. They also contended that BPIs petition is wanting in substance. Meanwhile, the CA issued a TRO21 restraining the implementation of the December 6, 2005 Order of the Voluntary Arbitrator and the corresponding Writ of Execution issued on December 12, 2005. Upon receipt of the TRO, Uy and the Union filed an Urgent Motion for Clarification22 on whether the TRO encompasses even the implementation of the reinstatement aspect of the March 31, 2005 Decision of this Court in G.R. No. 137863. The CA initially rendered a Decision23 on May 24, 2006. In said Decision, the CA held that BPI's resort to certiorariwas proper and that the award of CBA benefits and attorney's fees has legal basis. The CA however found that the Voluntary Arbitrator erroneously computed Uy's back wages based on the current rate. The CA also deleted the award of dental allowance since it was granted in 2002 or more than six years after Uy's dismissal. Both parties thereafter filed their respective motions for reconsideration. Consequently, on July 4, 2007, the CA issued the herein assailed Amended Decision. In its Amended Decision, the CA upheld the propriety of BPIs resort to certiorari. It also ruled that this Courts March 31, 2005 Decision in G.R. No. 137863 did not reinstate the December 31, 1997 Decision of the Voluntary Arbitrator awarding full back wages including CBA benefits. The CA ruled that the computation of Uys full back wages, as defined under Republic Act No. 6715, should be based on the basic salary at the time of her dismissal plus the regular allowances that she had been receiving likewise at the time of her dismissal. It held that any increase in the basic salary occurring af ter Uys dismissal as well as all benefits given after said dismissal should not be awarded to her in consonance with settled jurisprudence on the matter. Accordingly, the CA pronounced that Uys basic salary, which amounted to P10,895.00 at the time of her dismissal on December 14, 1995, is to be used as the base figure in computing her back wages, exclusive of any increases and/or modifications. As Uys entitlement to COLA, quarterly bonus and financial assistance are not disputed, the CA retained their award provided that, again, the base figure for the computation of these benefits should be the rate then prevailing at the time of Uys dismissal. The CA deleted the award of CBA signing bonus, medicine allowance, medical and doctors allowance and dental care allowance for lack of sufficient proof that these benefits were already being received and enjoyed by Uy at the time of her dismissal. However, it held that the tellers functional allowance should rightfully be given to Uy as a regular bank teller as well as the holiday pay and monetary equivalent of vacation and sick leave benefits. As for the attorneys fees, the CA ruled that Uys right over the same has already been resolved and has attained finality when it was neither assailed nor raised as an issue after the Voluntary Arbitrator awarded it in favor of Uy. Finally, the CA likewise ruled that Uys reinstatement was effectively restrained by the TRO issued by it. Pertinent portions of the CAs Amended Decision read: All told, We find Petitioners Motion for Reconsideration to be partly meritorious and so hold that Private Respondent Uy is entitled to the following sums to be included in the computation: 1. Basic Monthly Salary, COLA and Quarterly Bonus, with P10,895.00 as the base figure, computed from the time of her dismissal up to her actual reinstatement; 2. Tellers Functional Allowance, based on the rate at the time of her dismissal; 3. Monetary Equivalent of Vacation and Sick Leaves, and Holiday Pay, based on the rate at the time of her dismissal; 4. Attorneys Fees, which is 10% of the total amount of the award.

Anent the Private Respondents Urgent Motion for Clarification, Private Respondent asked whether the TRO issued by this Court on January 3, 2006 restrained the reinstatement of Private Respondent Uy. We answer in the affirmative. The wordings of the Resolution ordering the issuance of a temporary restraining order are clear. The TRO was issued to restrain the implementation and/or enforcement of the Public Respondents Order dated Decem ber 6, 200[5] and the Writ of Execution, dated December 12, 200[5]. Considering that said Order and the ensuing Writ are for the reinstatement of Private Respondent Uy, hence, the TRO, indeed, effectively restrained Uys reinstatement. WHEREFORE, Private Respondents Motion for Partial Reconsideration is DENIED and Petitioners Motion for Partial Reconsideration is GRANTED IN PART. The Decision of this Court promulgated on May 24, 2006 is herebyamended, and the Public Respondent Voluntary Arbitrator is ordered to recompute the amount of backwages due to Private Respondent Uy consistent with the foregoing ruling. SO ORDERED.24 From the foregoing Amended Decision, both parties separately filed petitions before this Court. Uys and the Unions petition is docketed as G.R. No 178699, and that of BPI is docketed as G.R. No. 178735. The Court resolved to consolidate both petitions in a Resolution dated September 3, 2007.25 Issues G.R. No. 178699 Uy and the Union argue that the CA effectively amended the final Decision in G.R. No. 137863. They allege that the issues raised in G.R. No. 137863 were confined only to the propriety of the CAs award of back wages for a fixed period of three years as well a s the order for the payment of separation pay in lieu of reinstatement. Hence, the Voluntary Arbitrators award of CBA benefits as components of Uys back wages and the attorneys fees, which were not raised as issues in G.R. No. 137863, should no longer b e disturbed. Uy and the Union likewise assail the CAs order restraining Uys reinstatement despite the finality of this Courts Decision ordering such reinstatement. They also fault the CA in not dismissing BPIs petition for being an improper mode of appeal. Finally, Uy and the Union assert that a twelve percent (12%) interest per annum should be imposed on the total amount due to Uy, computed from the finality of the Decision of this Court in G.R. No. 137863 until full compliance thereof by BPI. G.R. No. 178735 On the other hand, BPI alleges that Uy's/Unions petition should be dismissed for lack of proof of service of the petition on the lower court concerned as required by the Rules of Court. BPI also argues that the CA erred in including the tellers functional all owance and the vacation and sick leave cash equivalent in the computation of Uys backwages. Also, BPI questions the p ropriety of the award of attorneys fees. Our Ruling The March 31, 2005 Decision of this Court in G.R. No. 137863 did not reinstate the December 31, 1997 Decision of the Voluntary Arbitrator which ordered the payment of full back wages including all benefits under the CBA. We agree with the CAs finding that the March 31, 2005 Decision of this Court in G.R. No. 137863 did not in anyway reinstate the Voluntary Arbitrators December 31, 1997 Decision regarding the award of CBA benefits. To recall, after Uy and the Union filed the case for illegal dismissal, the Voluntary Arbitrator rendered his Decision 26 on December 31, 1997, the dispositive portion of which reads: WHEREFORE, premises considered, judgment is hereby rendered declaring the dismissal of complainant Zenaida Uy as illegal and ordering the respondent Bank of the Philippine Islands to immediately reinstate her to her position as bank teller of the Escolta Branch without loss of seniority rights and with full backwages computed from the time she was dismissed on December 14, 1995 until she is actually reinstated in the service, and including all her other benefits which are benefits under their Collective Bargaining Agreement (CBA).

For reasonable attorneys fees, respondent is also ordered to pay complainant the equivalent of 10% of the recoverable award in this case. SO ORDERED.27 On appeal, the CA, in its October 28, 1998 Decision,28 affirmed with modification the Decision of the Voluntary Arbitrator. Instead of full back wages, the CA limited the award to three years. Also, in lieu of reinstatement, the CA ordered BPI to pay separation pay, thus: WHEREFORE, the judgment appealed from is AFFIRMED with the MODIFICATION that instead of reinstatement, the petitioner Bank of the Philippine Islands is DIRECTED to pay Uy back salaries not exceeding three (3) years and separation pay of one month for every year of service. The said judgment is AFFIRMED in all other respects. SO ORDERED.29 As already discussed, both parties appealed to this Court. However, BPIs petition was dismissed outright for failure to comp ly with the requirements for a valid certification of non- forum shopping. Uys and the Unions petition docketed as G.R. No. 137863, on the other hand, was given due course. On March 31, 2005, the Court rendered its Decision disposing thus: WHEREFORE, the instant petition is GRANTED. The assailed 28 October 1998 Decision and 8 March 1999 Resolution of the Court of Appeals are hereby MODIFIED as follows: 1) respondent BPI is DIRECTED to pay petitioner Uy backwages from the time of her illegal dismissal until her actual reinstatement; and 2) respondent BPI is ORDERED to reinstate petitioner Uy to her former position, or to a substantially equivalent one, without loss of seniority right and other benefits attendant to the position. SO ORDERED.30 From the foregoing, it is clear that Uys and the Unions contention that the March 31, 2005 Decision of this Court in G.R. N o. 137863 in effect reinstated the December 31, 1997 Decision of the Voluntary Arbitrator awarding full back wages including the CBA benefits, is without basis. What is clear is that the March 31, 2005 Decision modified the October 28, 1998 Decision of the CA by awarding full back wages instead of limiting the award to a period of three years. This interpretation is further bolstered by the Courts discussion in the main body of March 31, 2005 Decision as to the meaning of "full back wages" in view of the passage of Republic Act No. 671531 on March 21, 1989 which amended Article 279 of the Labor Code, as follows: 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 the 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. (Italics supplied) Jurisprudence dictates that such award of back wages is without qualifications and deductions, 32 that is, "unqualified by any wage increases or other benefits that may have been received by co-workers who were not dismissed."33 It is likewise settled that the base figure to be used in the computation of back wages is pegged at the wage rate at the time of the employees dismissal unqualified by deductions, increases and/or modifications.34 We thus fully agree with the observation of the CA in its Amended Decision that the back wages as discussed in the March 31, 2005 Decision in G.R. No. 137863 did not include salary increases and CBA benefits, viz: There is no ambiguity or omission in the dispositive portion of the SC decision but Public Respondent erroneously concluded that said SC decision effectively reinstated Public Respondent's December 31, 1997 Decision. There is a need to read the findings and conclusions reached by the Supreme Court in the subject decision to understand what was finally adjudicated. In the dispositive portion of Its Decision of March 31, 2005, the Supreme Court expressly awarded Uy full backwages from the time of her dismissal up to the time of her actual reinstatement. The full backwages, as referred to in the body of the decision pertains to "backwages" as defined in Republic Act No. 6715. Under said law, and as provided in numerous jurisprudence, "full backwages" means backwages without any deduction or qualification, including benefits or their monetary equivalent the employee is enjoying at the time of his dismissal. Clearly, it is the intention of the Supreme Court to grant unto Private Respondent Uy full backwages as defined under RA 6715. Consequently, any benefit or allowance over and above that allowed and provided by said law is deemed excluded under said SC Decision. The CBA benefits awarded by Public Respondent is not within the benefits under RA 6715. Said benefits are not to be included in the backwages. x x x35

The CA correctly deleted the award of CBA benefits. Thus, we find that the CA properly disregarded the salary increases and correctly computed Uys back wages based on the salary rate at the time of Uys dismissal plus the regular allowances that she had been receiving likewise at the time of her dismis sal.36 The CA also correctly deleted the signing bonus, medicine allowance, medical and doctors allowance and dental care allowance, as they were all not proven to have been granted to Uy at the time of her dismissal from service. The award of attorneys fees is proper. We likewise affirm the CAs award of attorneys fees. The issue on its grant has already been threshed out and settled with f inality when the parties failed to question it on appeal. As aptly held by the CA in its Amended Decision: Based on the evidence, We find Uy to be entitled to Attorneys fees. True, the SC Decision did not include the award of attorneys fees; however, after the Public Respondent awarded said attorneys fees in favor of Private Respondent Uy, said award was neither assailed nor raised as an issue before the Court of Appeals and the Supreme Court. Hence, the March 31, 2005 Decision of the Supreme Court and the Court of Appeals Decision as modif ied no longer mention said award. Consequently, as the right of Uy to attorneys fees has already been resolved and had attained finality, Petitioner cannot no w question its inclusion to the computation of awards given to Private Respondent Uy during the execution proceedings.37 The issue concerning the CAs temporary restraining order which covered the reinstatement aspect of this Courts final decisi on has been rendered moot by Uys subsequent reinstatement in BPIs payroll on August 1, 2006. While we agree with Uy's/Unions postulation that it was improper for the CA to restrain the implementation of the reinstatem ent aspect of this Courts final and executory Decision considering that BPIs appeal with the CA only questioned the propriety of the Voluntary Arbitrators computation of back wages, suffice it to say that this particular issue has already been rendered moot by Uys reinstatement. As manifested by BPI in its Comment,38Uy, with her acquiescence, was reinstated in BPI's payroll on August 1, 2006. Notably, this fact was not at all disputed or denied by Uy in any of her pleadings. BPI's resort to certiorari under Rule 65 of the Rules of Court is proper. Section 1, Rule 41 of the Rules of Court explicitly provides that no appeal may be taken from an order of execution, the remedy of an aggrieved party being an appropriate special civil action under Rule 65 of the Rules of Court. Thus, BPI correctly availed of the remedy of certiorari under Rule 65 of the Rules of Court when it assailed the December 6, 2005 order of execution of the Voluntary Arbitrator. A legal interest at 12% per annum should be imposed upon the monetary awards granted in favor of Uy commencing from the finality of this Courts March 31, 2005 Decision until full satisfaction thereof. Pursuant to our ruling in Eastern Shipping Lines, Inc. v. Court of Appeals,39 the legal interest of 12% per annumshall be imposed upon the monetary award granted in favor of Uy, from the time this Courts March 31, 2005 Decision became final and executory until full satisfaction thereof, for the delay caused. This natural consequence of a final judgment is not defeated notwithstanding the fact that the parties were at variance in the computation of what is due to Uy under the judgment.40 The CA was properly served with a copy of Uy's/Unions petition in compliance with the Rules of Court. BPI's allegation that Uy's/Unions petition in G.R. No. 178699 should be dismissed outright for failure to furnish the lower court concerned of their petition is without basis. Records disclose that Uy's/Unions petition was accompanied with an affidavit o f service with the corresponding registry receipt41 showing that the CA was duly provided with a copy of the petition. Uy is entitled to tellers functional allowance but not to vacation and sick leave cash conversion. BPI contends that at the time of Uys dismissal, she was no longer functioning as a teller but as a low-counter staff and as such, Uy is not anymore entitled to the tellers functional allowance pursuant to company policy.Furthermore, BPI ar gues that Uy is neither entitled to the monetary conversion of vacation and sick leaves for failure to prove that she is entitled to these benefits at the time of her dismissal.

We rule that Uy is entitled to the tellers functional allowance since Uys fu nction as a teller at the time of her dismissal was factually established and was never impugned by the parties during the proceedings held in the main case. Besides, BPI did not present any evidence to substantiate its allegation that Uy was assigned as a low-counter staff at the time of her dismissal. It is a hornbook rule that he who alleges must prove.42 Neither was there any proof on record which could support this bare allegation. As to the vacation and sick leave cash conversion benefit, we disagree with the CAs pronouncement that entitlement to the sa me should not be necessarily proved. It is to be noted that this privilege is not statutory or mandatory in character but only voluntarily granted.43 As such, the existence of this benefit as well as the employee's entitlement thereto cannot be presumed but should be proved by the employee.44 The records, however, failed to prove that Uy was receiving this benefit at the time of her dismissal on December 14, 1995. The CBA covering the period April 1, 2001 to March 31, 2006, which was presented by the parties does not at all prove that vacation and sick leave credits, as well as the privilege of converting the same into cash, were granted before the CBAs effectivity in 2001. We thus hold that Uy failed to prove that she is entitled to such benefit as a matter of right. WHEREFORE, the petitions in G.R. Nos. 178699 and 178735 are both PARTIALLY GRANTED.1wphi1 The Amended Decision dated July 4, 2007 of the Court of Appeals in CA-G.R. SP No. 92631 is hereby AFFIRMED with MODIFICATIONS. The back wages of Zenaida Uy should be computed as follows: 1. Basic Monthly Salary, Cost of Living Allowance, Financial Assistance and Quarterly Bonus, withP10,895.00 as the base figure which is her salary rate at the time of her dismissal, computed from the time of her dismissal on December 14, 1995 up to her reinstatement on August 1, 2006; 2. Tellers Functional Allowance, based on the rate at the time of her dismissal; 3. Holiday Pay, based on the rate at the time of her dismissal; 4. Attorneys Fees, which is 10% of the total amount of the award; and 5. Interest at 12% per annum on the total amount of the awards commencing from the finality of the Decision in G.R. No. 137863 until full payment thereof. 6. The award for the monetary conversion of vacation and sick leave is deleted. The Voluntary Arbitrator is hereby ORDERED TO RECOMPUTE the amounts due to Zenaida Uy in accordance with the above disposition. SO ORDERED. MARIANO C. DEL CASTILLO Associate Justice WE CONCUR: RENATO C. CORONA Chief Justice Chairperson TERESITA J. LEONARDO-DE CASTRO Associate Justice JOSE PORTUGAL PEREZ* Associate Justice CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division. RENATO C. CORONA Chief Justice LUCAS P. BERSAMIN Associate Justice

Footnotes
*

In lieu of Associate Justice Martin S. Villarama, Jr., per Special Order No. 1080 dated September 13, 2011. Villaruel v. Atty. Grapilon, A.C. No. 4826, October 17, 2000. Minute Resolution. Rollo (G.R. No. 178699), pp. 8-30; (G.R. No. 178735), pp. 8-30.

Rollo (G.R. No. 178699), pp. 50-78; penned by Associate Justice Noel G. Tijam and concurred in by Associate Justices Rosalinda Asuncion-Vicente and Vicente Q. Roxas.
4

Id. at 142-160; penned by Associate Justice Minita V. Chico-Nazario and concurred in by Associate Justices Reynato S. Puno (later to become Chief Justice), Ma. Alicia Austria-Martinez, Romeo J. Callejo, Sr. and Dante O. Tinga.
5

Samuel D. Entuna. Rollo (G.R. No. 178699), pp. 128-134. Id. at 133.

Id. at 135-141; penned by Associate Justice Delilah Vidallon-Magtolis and concurred in by Associate Justices Artemon D. Luna and Rodrigo V. Cosico.
9

See page 8 of the Courts March 31, 2005 Decision in G.R. No. 137863, id. at 149. Supra note 4. Rollo (G.R. No. 178699), pp. 158-159. CA rollo, pp. 61-70. Id. at 70. Id. at 71-77. Rollo (G.R. No. 178699), pp. 161-173. Id. at 170-173. Dated December 12, 2005; CA rollo, pp. 92-96. Id. at 91. Id. at 2-26. Id. at 160-171. Id. at 127-128. Id. at 175-178.

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23

Rollo (G.R. No. 178699), pp. 32-48; penned by Associate Justice Godardo A. Jacinto and concurred in by Associate Justices Joel G. Tijam and Vicente Q. Roxas.

24

Id. at 76-78. Rollo (G.R. No. 178735), pp. 235-236. Supra note 6. Rollo (G.R. No. 178699), p. 133. Id. at 135-141. Id. at 141. Id. at 158-159.

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31

An Act to extend Protection to Labor, Strengthen the Constitutional Rights of Workers to Self-Organization, Collective Bargaining and Peaceful Concerted Activities, Foster Industrial Peace and Harmony, Promote the preferential use of Voluntary Modes of settling Labor disputes, and Reorganize the National Labor Relations Commission, amending for these purposes certain provisions of Presidential Decree No. 442, as amended, otherwise known as the Labor Code of the Philippines, appropriating funds therefor and for other purposes; took effect on March 21, 1989.
32

General Baptist Bible College v. National Labor Relations Commission, G.R. No. 85534, March 5, 1993, 219 SCRA 549, 559-560.
33

Evangelista v. National Labor Relations Commission, 319 Phil. 299, 301 (1995), citing Paramount Vinyl Products Corp. v. National Labor Relations Commission, G.R. No. 81200, October 17, 1990, 190 SCRA 525, 537.
34

Villaruel v. Atty. Grapilon, supra note 1. Rollo (G.R. No. 178699), p. 67.

35

36

Palmeria, Sr. v. National Labor Relations Commission, 317 Phil. 67, 76 (1995); Espejo v. National Labor Relations Commission, 325 Phil. 753, 760 (1996); Masagana Concrete Products v. National Labor Relations Commission, 372 Phil. 459, 481 (1999); Equitable Banking Corporation v. Sadac, G.R. No. 164772, June 8, 2006, 490 SCRA 380, 409.
37

Rollo (G.R. No. 178699), p. 76. Id. at 104-127. G.R. No. 97412, July 12, 1994, 234 SCRA 78. Equitable Banking Corporation v. Sadac, G.R. No. 164772, June 8, 2006, 490 SCRA 380,420. Rollo (G.R. No. 178699), p. 30. Morales v. Skills International Company, G.R. No. 149285, August 30, 2006, 500 SCRA 186, 197. Everyones Labor Code, C.A. Azucena, Jr., fifth ed. (2007), p. 75. Kwok v. Phil. Carpet Manufacturing Corporation, 497 Phil. 8, 17 (2005). June 13, 2012

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G.R. No. 200653

3RD ALERT SECURITY AND DETECTIVE SERVICES, INC., Petitioner, vs. ROMUALDO NAVIA, Respondent. RESOLUTION

BRION, J.: This is a petition for review on certiorari1 under Rule 45 of the Rules of Court, assailing the decision2 dated September 30, 2011 and the resolution3 dated February 15, 2012 of the Court of Appeals (CA) in CA-G.R. SP No. 117361, which dismissed the petition filed by 3rd Alert Security and Detective Services, Inc. (3rd Alert). The Antecedent Facts This case started from an illegal dismissal complaint filed by Romualdo Navia against 3rd Alert. On November 30, 2005, the labor arbiter issued a decision that Navias dismissal was illegal. 3rd Alert appealed to the Natio nal Labor Relations Commission (NLRC) which affirmed the ruling of the labor arbiter. 3rd Alerts motion for reconsideration of the NLRC decision was denied in a resolution dated October 19, 2008. From this ruling, 3rd Alert filed an appeal with the CA (docketed as CA-G.R. SP No. 106963) with a prayer for the issuance of a temporary restraining order. The CA denied the appeal; 3rd Alert moved for a motion for reconsideration but the motion was also denied. The writ of execution (CA-G.R. SP No. 117361) In the meantime, on January 29, 2009, the NLRC issued an Entry of Judgment certifying that the NLRC resolution dated October 19, 2008 has become final and executory. Thus, Navia filed with the labor arbiter an ex-parte motion for recomputation of back wages and an ex-parte motion for execution based on the recomputed back wages. On November 10, 2009, the labor arbiter issued a writ of execution to enforce the recomputed monetary awards. 3rd Alert appealed the recomputed amount stated in the writ of execution to the NLRC. 3rd Alert also alleged that the writ was issued with grave abuse of discretion since there was already a notice of reinstatement sent to Navia. The NLRC dismissed the appeal, ruling that 3rd Alert is guilty of bad faith since there was no earnest effort to reinstate Navia. The NLRC also ruled that there was no notice or reinstatement sent to Navias counsel. A motion for reconsideration was filed, but it was likewise denied. 3rd Alert filed a petition for certiorari with the CA which found the petition without merit because Navia had not been reinstated either physically or in the payroll. The CA also denied the motion for reconsideration filed by 3rd Alert; hence, this petition. The Issue In this petition, we resolve the issue of whether the CA erred in ruling that the NLRC did not commit any grave abuse of discretion. The Ruling We do not see any grave abuse of discretion after a close examination of the petition and the attached records where 3rd Alert insists that a copy of the manifestation on reinstatement had been sent to Navias counsel and was received by a certain "Biznar." Time and again, we have held that this Court is not a trier of facts. 4 In the absence of any attendant grave abuse of discretion, these findings are entitled not only to respect, but to our final recognition in this appellate review. Since it was ruled that there had been no notice of reinstatement sent to Navia or his counsel, as also affirmed by the CA, we cannot rule otherwise in the absence of any compelling evidence. Article 223 of the Labor Code provides that in case there is an order of reinstatement, the employer must admit the dismissed employee under the same terms and conditions, or merely reinstate the employee in the payroll. The order shall be immediately executory. Thus, 3rd Alert cannot escape liability by simply invoking that Navia did not report for work. The law states that the employer must still reinstate the employee in the payroll. Where reinstatement is no longer viable as an option, separation pay equivalent to one (1) month salary for every year of service could be awarded as an alternative. 5 Since the proceedings below indicate that 3rd Alert failed to adduce additional evidence to show that it tried to reinstate Navia, either physically or in the payroll, we adopt as correct the finding that there was no earnest effort to reinstate Navia. The CA was correct in affirming the judgment of the NLRC in this regard.

We also take note that 3rd Alert resorted to legal tactics to frustrate the execution of the labor arbiters order; for about four (4) years, it evaded the obligation to reinstate Navia. By so doing, 3rd Alert has made a mockery of justice. We thus find it proper, under the circumstances, to impose treble costs against 3rd Alert for its utter disregard to comply with the writ of execution. To reiterate, no indication exists showing that 3rd Alert exerted any efforts to reinstate Navia; worse, 3rd Alerts lame excuse of having sent a notice of reinstatement to a certain "Biznar" only compounded the intent to mislead the courts. Also, the main issue of this case, finding Navia to have been illegally dismissed, has already attained finality. Litigation must end and terminate sometime and somewhere, and it is essential for an effective and efficient administration of justice that, once a judgment has become final, the winning party be not deprived of the fruits of the verdict. 6 The order is to reinstate Navia; sadly, the mere execution of this judgment has to even reach the highest court of the land, thereby frustrating the entire judicial process. This justifies the treble costs we now impose against 3rd Alert. 7 "It is settled that in actions for recovery of wages or where an employee was forced to litigate and incur expenses to protect his right and interest, he is entitled to an award of attorney's fees."8 Navia, having been compelled to litigate due to 3rd Alerts failure to satisfy his valid claim, is also entitled to attorney's fees of ten percent (10%) of the total award at the time of actual payment, following prevailing jurisprudence.9 While we agree that lawyers owe their entire devotion to the interest of their clients, they should not forget that they are also officers of the court, bound to exert every effort to assist in the speedy and efficient administration of justice. They should not, therefore, misuse the rules of procedure to defeat the ends of justice or unduly delay a case, impede the execution of a judgment or misuse court processes.10 WHEREFORE, premises considered, we hereby DENY the petition outright and AFFIRM the decision dated September 30, 2011 and the resolution dated February 15, 2012 of the Court of Appeals in CA-G.R. SP No. 117361. Treble costs and attorney's fees of ten percent (10%) of the total monetary award at the time of actual payment against 3rd Alert are hereby also awarded to Romualdo Navia. SO ORDERED. ARTURO D. BRION Associate Justice WE CONCUR: ANTONIO T. CARPIO Senior Associate Justice Chairperson JOSE PORTUGAL PEREZ Associate Justice MARIA LOURDES P. A. SERENO Associate Justice BIENVENIDO L. REYES Associate Justice CERTIFICATION I certify that the conclusions in the above Resolution had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division. ANTONIO T. CARPIO Senior Associate Justice (Per Section 12, R.A. 296, The Judiciary Act of 1948, as amended)

Footnotes
1

Rollo, pp. 9-24.

Id. at 27-34; penned by Associate Justice Manuel M. Barrios, and concurred in by Associate Justices Mario L. Guaria III and Apolinario D. Bruselas, Jr.
3

Id. at 35-36. Commissioner of Customs v. Phil. Phosphate Fertilizer Corp., 481 Phil. 31 (2004). Pheschem Industrial Corp. v. Moldez, 497 Phil. 647 (2005). Dizon v. Court of Appeals, G.R. Nos. 122544 and 124741, January 28, 2003, 396 SCRA 151, 157.

Section 3, Rule 142 of the Rules of Court: Where an action or an appeal is found to be frivolous, double or treble costs may be imposed on the plaintiff or appellant, which shall be paid by his attorney, if so ordered by the court.
8

Rasonable v. NLRC, 324 Phil. 191, 195-196 (1996), citing Article 2208 (7) & (2) of the Civil Code. Remigio v. NLRC, 521 Phil. 330, 353 (2006).

10

National Power Corporation v. Philippine Commercial and Industrial Bank, G.R. No. 171176, September 04, 2009, 598 SCRA 326. G.R. No. 198501 January 30, 2013

KESTREL SHIPPING CO., INC./ CAPT. AMADOR P. SERVILLON and ATLANTIC MANNING LTD., Petitioners, vs. FRANCISCO D. MUNAR, Respondent. DECISION REYES, J.: This is a petition for review on certiorari assailing the Decision1 dated January 28, 2011 and Resolution2 dated September 6, 2011 of the Court of Appeals (CA) in CA-G.R. SP No. 110878. The facts leading to the filing of this petition are undisputed. On March 23, 2006, petitioner Kestrel Shipping, Inc. (Kestrel), on behalf of its principal, petitioner Atlantic Manning, Ltd., and respondent Francisco Munar (Munar) forged a six (6)-month employment contract designating Munar as pump man for M/V Southern Unity. As pump man, his duties include: (a) operating, maintaining and repairing power-driven pumps, valves and related machinery; (b) transferring materials to and from vessels and terminal storages; (c) transferring liquids by siphoning; (d) installing hoses and pipes between pumps and containers that require filling or emptying; (e) maintenance of pump rooms and similar spaces; (f) assisting in the cleaning of tanks, crude oil washing, gas inerting, purging of tanks and wage sampling of cargo; (g) checking and recording cargo temperature; and (h) operating tank heating equipment.3 On October 12, 2006, after Munar assisted in manually lifting the ships anchor windlass motor that weighs about 350 kilogram s, he started to limp and experience severe pain in his lumbar region. On October 18, 2006, Munar was admitted at the Entabeni Hospital in Durban, South Africa. According to his attending physician, Dr. Soma T. Govender (Dr. Govender), the x-ray and magnetic resonant image (MRI) of Munars lumbar spine showed degenerative changes, which required him to take pain medication, use pelvic traction, and undergo physiotherapy. In his medical report 4 dated October 19, 2006, Dr. Govender stated that: I arranged for him to have lumbar spine x-rays and this showed that he had degenerative changes especially of the lower lumbar spine in the L3/4 and L5/S1 region with degenerative changes noted bilaterally. I proceeded to do a MRI of the lumbar spine to exclude an acute prolapsed disc and this confirmed degenerative changes of the lumbar spine extending from the L2/3 region and L3/4 and the worst affected levels appeared to be L4/5 and L5/S1. xxxx I have admitted him for a course on intensive conservative management in hospital. He has been commenced on pelvic traction and been given pain medication, which includes Narcotic analgesia, muscle relaxants, and anti-inflammatories. I have also commenced

him on a course of physiotherapy and hopefully with this conservative mode of treatment he should show sufficient improvement to obviate any spinal surgery.5 On October 24, 2006, Dr. Govender issued another medical report6 where he stated that while Munars improved condition allowed him to travel, he would require assistance in carrying his things and should be lying down for the entire duration of the trip. Munar should undergo further treatment and management in a spine rehabilitation facility but if he would not register a positive response thereto, he must undergo surgery. Specifically: Mr. Munar is currently recovered from the acute pain syndrome that he first presented with. Although he has not recuperated completely he has progressed to the state were he will be able to travel back to the Phillipines (sic) with assistance. He will require assistance with regard to his baggage transfers and he should also be accommodated on the aircraft so that he can lie down, as this would minimize the amount of pressure on his lumbar inter-vertebral disc and minimize the nerve root compression. It is reasonable to assume that the heavy lifting that forms part of his daily work duties has contributed significantly to the abnormalities demonstrated on his lumbar spine MRI scans. x x x. Mr. Munar will require further treatment and management in the Philippines. I would recommend a further course of conservative treatment for a few more weeks. If this does not settle he may then require surgical intervention with decompression of the areas of stenosis (narrowing) and removal of the disc fragments that are compressing the nerve roots and a possible fusion of his lower back. However, this will depend on the response to the conservative treatment and his recovery after such surgery may take up to 3 months.7 Dr. Govender also declared Munar unfit to perform his usual sea duties: Whether he has further surgery or not, it will not be possible for Mr. Munar to continue performing the "heavy manual duties" that hisjob requires any longer, as this could exacerbate his lumbar spine problem. From this perspective he is medically unfit to continue such duties. x x x8 On October 28, 2006, Munar was repatriated. On October 30, 2006, Munar was admitted at the Chinese General Hospital. For two (2) weeks, he underwent intensive physiotherapy and was attended to by the following doctors: Dr. Tiong Sam Lim (Dr. Lim), a spine surgeon; Dr. Antonio Periquet (Dr. Periquet), a specialist on physical rehabilitation medicine; and Dr. Fidel Chua (Dr. Chua) of Trans Global Health Systems, Inc. to whom Kestrel referred his case for evaluation.9 On November 17, 2006, Dr. Chua issued a medical report,10 stating that Munar did not respond positively to the treatment and recommending that he undergo laminectomy and dissectomy, procedures which would entail a recovery period from four (4) to six (6) months: The above patient had 2 weeks intensitive (sic) physiotherapy but no improvement. I had conference with Dr. Tiong Sam Lim (spinal surgeon) and Dr. Antonio Periquet (rehabilitation medicine) and strongly suggest patient to undergo Laminectomy & dissectomy which will approximately cost PHP 120,000.00 to PHP 150,000.00 barring complication. Recuperation will take 4-6 months from date of operation.11 On December 2, 2006, Munar had surgical intervention. On December 20, 2006, he was discharged from the hospital. In his medical report12 of even date, Dr. Chua diagnosed Munar as suffering from herniated disc and that while the surgery was successful, Munar should continue physiotherapy: The above patient discharged today from Chinese General Hospital. He underwent Laminectomy and Dissectomy last December 2, 2006. Since he is from La Union, he may continue his physiotherapy in his hometown. At present, the prognosis is good and recuperation will take 4-6 months from date of operation.13 Munar continued his physiotherapy sessions at Lorma Medical Center at Carlatan, San Fernando City, La Union. 14 On February 27, 2007, Munar was physically examined by Dr. Lim and Dr. Periquet. The following observations were noted in the medical report Dr. Chua issued: Patient was re-evaluated by Dr. Tiong Sam Lim with finding of right lower extremities has improved but there is still pain on straight leg raise of left and weak extensor hallis longes.

He was also evaluated by Dr. Antonio Periquet with following finding 1. there is a decrease in pain 2. tenderness lumbar paravertebral 3. weakness left lower extremity 4. decrease in sensation from T 10 down 5. SLR 30o left; full right 6. decrease ankle jerk left 7. pain on all trunk motion15 On April 11 and 12, 2007, Munar was once again examined by Dr. Periquet and Dr. Lim, respectively. On May 3, 2007, Dr. Chua issued a medical report16 where he enumerated the findings of Dr. Periquet and Dr. Lim and rated Munars impediment as Grade 8. The above patient was re-evaluated by Dr. Antonio Periquet on April 11, 2007 with report of pain level is 5/10 - SLR-45o bilateral, weakness left foot muscle, decrease sensation below mid-thigh - Tenderness-lumbo sacral process and left lumbar area - Pain on side bending and forward flexion He is advised to continue physiotherapy. He was also seen by Dr. Tiong Sam Lim on April 12, 2007 and advised to continue physiotherapy and recommended disability assessment. After thorough evaluation, the report of Dr. Antonio Periquet; Dr. Tiong Sam Lim and Dr. Edward Lingayo, patient will take a long time to fully recovered. Therefore, he may be given disability. Based on Amended POEA Contract Section 32-CHEST-TRUNK-SPINE # 5-disability grade 8.17 Meantime, on April 17, 2007, Munar filed a complaint for total and permanent disability benefits. His complaint was docketed as NLRC-NCR Case No. OFW-07-04-00970-00 and raffled to Labor Arbiter Veneranda Guerrero (LA Guerrero). Munar claimed that the mere fact that his medical condition, which incapacitated him to engage in any gainful employment, persisted for more than 120 days automatically entitles him to total and permanent disability benefits. During the mandatory mediation and conciliation conferences, petitioners invok ed Dr. Chuas assessment per his medical report dated May 3, 2007 and offered to pay Munar the benefit corresponding to Grade 8 disabilities or $16,795.00. Munar rejected petitioners offer and maintained that his disability should be rated as Grade 1. Munar relied on the following assessment made by Dr. Edward L. Chiu (Dr. Chiu), an orthopedic surgeon at Lorma Medical Center, in a medical certificate 18 the latter issued on May 21, 2007: At present, he could tolerate walking for short distances due to his low back pain. There is weakness of his left foot. Due to his back injury and pain, he could not go back to work. He could not tolerate stren[u]ous physical activities.19 In a Decision20 dated May 30, 2008, LA Guerrero awarded Munar with total and permanent disability benefits in the amount of US$60,000.00 and attorneys fees equivalent to ten percent (10%) of the former. As between the assessment of Dr. Chua and tha t of Dr. Chiu, LA Guerrero gave more weight to the latter:

Assessing the parties respective averments and documents adduced in support thereof, this Office finds that the complainant is entitled to the maximum compensation benefit as provided under the POEA Standard Employment Contract in the amount of US$60,000.00. The medical certificate issued by Dr. Edward L. Chiu dated May 21, 2007 categorically states that complainant cannot go back to work due to his back injury and that he cannot tolerate strenuous physical activities. Given the nature of his shipboard employment, it is logical to conclude that the complainant cannot resume shipboard employment. This conclusion is borne out by the respondents own medical certificate showing that after the complainant underwent surgery in December, 2006 he was expected t o recuperate for a period of 4-6 months, and on May 3, 2007 the respondents designated physician determined that the complainant "will take a long time to fully recovered (sic)". And, while he was assessed with Impediment Grade 8, the assessment is not accompanied by any justification, other than the vague qualification on the length of time of recovery. Evidently, such ambiguous assessment, vis--vis that made by the complainants independent physician who had taken over the complainants therapy, cannot be a basis for the grant of the assessed disability grading. The determination of the company designated physician cannot prevail over the specific assessment made by the independent physician. Verily the illness sustained by the complainant has rendered him unfit to continue his employment as seafarer. Accordingly, he is entitled to the maximum compensation benefit of US$60,000.00. It is well-settled that: "disability should not be understood more on its medical significance but on the loss of earning capacity. Permanent total disability means disablement of an employee to earn wages in the same kind of work, or work of similar nature that (he) was trained for or accustomed to perform, or any kind of work which a person of (his) mentality and attainment could do. It does not mean absolute helplessness. In disability compensation, We likewise held, it is not the injury which is compensated, but rather it is the incapacity to work resulting in the impairment of ones earning capacity." (Philippine Transmarine, Inc. , vs. NLRC 353 SCRA 47)21 On appeal by petitioners, the National Labor Relations Commission (NLRC) affirmed LA Guerreros Decision dated May 30, 2008. In a Decision22 dated June 30, 2009, the NLRC ruled that Dr. Chius categorical and definite assessment should prevail over that of Dr. Chua, which failed to approximate the period needed by Munar to fully recover and lacked clear basis. Given the report of the company-designated physician who is unsure how much time complainant needs in order to fully recover, and the report of complainants physician who is certain in his own findings that complainant cannot go back to work given his present condition, this Commission has no other obvious choice than to place its confidence and accordingly uphold the findings of complainants physician.23 The NLRC denied petitioners motion for reconsideration in a Resolution24 dated August 28, 2009. Petitioners filed a petition for certiorari25 with the CA, alleging that the NLRC acted with grave abuse of discretion in characterizing Munars disability as total and permanent. The NLRC should have upheld Dr. Chuas findings over those of Dr. Chiu whose knowledge of Munars case is questionable. Apart from the fact that it is Dr. Chua, being the company designated physician, who is tasked under the Philippine Overseas Employment Administration-Standard Employment Contract (POEA-SEC) to determine the nature and degree of a seafarers disability or his fitness to perform sea duties, the reliability of his assessment springs from his undisputed familiarity with Munars medical condition. As one of Munars attending physicians from the time he was repatriated, Dr. Chua is in a position to give a more accurate appraisal of Munars disability. Moreover, Dr. Chuas assessment is based on th e findings of Dr. Lim and Dr. Periquet who are both specialists in the treatment and management of spine injuries. Furthermore, under the POEA-SEC, herniated disc is not one of the disabilities that are classified as Grade 1. Munars herniated or slipped disc only resulted to partial loss of motion of his lower extremities, which is classified as Grade 8 impediment under Section 32 of the POEASEC. Petitioners claim that for a spine injury to be considered as Grade 1 disability, it should have brought forth incontinence or rendered walking impossible even with the aid of crutches. By way of the assailed decision, the CA found no grave abuse of discretion on the part of the NLRC and ruled that Munars continued inability to perform his usual sea duties, which is attributable to his medical condition that is work-related, despite surgery and seven (7) months of physical therapy, conclusively indicate that he is totally and permanently disabled. The CA noted that while the company-designated doctors did not categorically state that Munar is unfit for sea duties, this is easily inferable from their statement that he continues to experience pain, weakness and tenderness and would take a long time to recover. In the case at bar, despite his having undergone surgeries, treatment and physical therapy of more than seven months from the injury, Munar is still found by all physicians involved to continue to suffer from weakness, tenderness and pain that prevent him from doing strenuous activities. In fact, Kestrels own designated physicians have st ated this in their last report and found that Munar was entitled to disability benefits as he "(would) take a long time to fully recover." Though they did not state it, it is clear from these findings that Munar is still unable to return to his customary work as a seafarer in an ocean-going vessel, due to the strenuous nature of the work demanded by it. No profit-motivated ship owner will employ Munar because of his condition. Munars private physicians statement of this fact in his own report merely confirms what is already obvious. Should he even try, Munar is certain to

get disqualified as seafarer since such an employment will require him to undergo rigorous physical examinations which he is sure to fail because of the sorry state of his physical health. Thus, it is not even necessary to address Kestrel et al.s arguments as to the persuasive or binding nature of the findings o f the company-designated physicians since, as earlier stated, they have been ruled to be not binding nor conclusive on the courts. In fact, the findings of Kestrels company-designated doctors themselves do not categorically state that Munar is fit to return to work; on the contrary, they state that Munar still suffers from weakness, tenderness and pain and is entitled to disability benefits. Thus, the only issue left for resolution is the amount of disability payments due to Munar. 26 (Citations omitted) Nonetheless, while the CA agreed with the NLRC that Munars spine injury is a Grade 1 disability, it deemed proper to reduce the amount of attorneys fees to two percent (2%) of his disability benefits. We find, however, that the grant by public respondent of 10% of $60,000 as attorneys fe es is exorbitant and without any stated basis, since it was not proven that Kestrel[,] et al. acted in gross and evident bad faith in denying Munars claim of Impedi ment Grade 1 compensation. The records bear that Kestrel in fact offered to pay Impediment Grade 8 compensation, or $16,795.00, to Munar in good faith, which the latter refused. But since the instant case is an action for recovery of compensation by a laborer, attorneys fees are still due based on Article 2208(8) of the Civil Code, albeit on a reduced amount of two percent (2%) of the main award, which We deem to be the reasonable fee under the circumstances. 27 In a Resolution28 dated September 6, 2011, the CA denied petitioners motion for reconsideration. Issue There is no dispute that Munars spine injury is work-related and that he is entitled to disability benefits. The bone of contention is how to classify such injury in order to determine the amount of benefits due to him. There is a conflict between the disability ratings made by the company-designated physician and Munars doctor-of-choice and petitioners claim that holding the latters determination to be more credible is contrary to the provisions of the POEA-SEC and prevailing jurisprudence. Absent any substantial challenge to the competence and skill of the company-designated doctors, there is no reason why their assessment should not be given due credence. Petitioners insist on the correctness of the grade assigned by their doctors on Munars disability. According to petitioners, Munars herniated disc is not a Grade 1 impediment as it did not disable him from walking or rendered him incontinent. Munar suffers from "moderate rigidity or two thirds (2/3) loss of motion or lifting power of the trunk" and under Section 32 of the POEA-SEC, this is a Grade 8 and not a Grade 1 impediment. Munar cannot claim, petitioners further posit, that he is totally and permanently disabled and claim the benefits corresponding to Grade 1 disabilities simply because he has not yet fully recovered after the lapse of 120 days from the time he signed-off from M/V Southern Unity. The nature of disability and the benefits attached thereto are determined by the manner they are graded or classified under the POEA and not by the number of days that a seafarer is under treatment. If a seafarer has an injury or medical condition that is not considered a Grade 1 impediment under the POEA-SEC, then he cannot claim that he is totally or permanently disabled. To allow the contrary would render naught the schedule of disabilities under the POEA-SEC. Our Ruling This Court resolves to DENY the petition. Indeed, under Section 3229 of the POEA-SEC, only those injuries or disabilities that are classified as Grade 1 may be considered as total and permanent. However, if those injuries or disabilities with a disability grading from 2 to 14, hence, partial and permanent, would incapacitate a seafarer from performing his usual sea duties for a period of more than 120 or 240 days, depending on the need for further medical treatment, then he is, under legal contemplation, totally and permanently disabled. In other words, an impediment should be characterized as partial and permanent not only under the Schedule of Disabilities found in Section 32 of the POEA-SEC but should be so under the relevant provisions of the Labor Code and the Amended Rules on Employee Compensation (AREC) implementing Title II, Book IV of the Labor Code. That while the seafarer is partially injured or disabled, he is not precluded from earning doing the same work he had before his injury or disability or that he is accustomed or trained to do. Otherwise, if his illness or injury prevents him from engaging in gainful employment for more than 120 or 240 days, as the case may be, he shall be deemed totally and permanently disabled. Moreover, the company-designated physician is expected to arrive at a definite assessment of the seafarers fitness to work or permanent disability within the period of 120 or 240 days. That should he fail to do so and the seafarers medical condition remains unresolved, the seafarer shall be deemed totally and permanently disabled.

It is settled that the provisions of the Labor Code and AREC on disabilities are applicable to the case of seafarers such that the POEA-SEC is not the sole issuance that governs their rights in the event of work-related death, injury or illness. As ruled in Remigio v. NLRC:30 Second. Is the Labor Codes concept of permanent total disability applicable to the case at bar? Petitioner claims to have suffered from permanent total disability as defined under Article 192(c)(1) of the Labor Code, viz: Art. 192 (c). The following disabilities shall be deemed total and permanent: (1) Temporary total disability lasting continuously for more than one hundred twenty days, except as otherwise provided in the Rules; x x x Petitioner likewise cites Vicente v. ECC and Abaya, Jr. v. ECC, both of which were decided applying the Labor Code provisions on disability benefits. Private respondents, on the other hand, contend that petitioner erred in applying the definition of "permanent total disability" under the Labor Code and cases decided under the ECC as the instant case involves a contractual claim under the 1996 POEA SEC. Again, we rule for petitioner. The standard employment contract for seafarers was formulated by the POEA pursuant to its mandate under E.O. No. 247 to "secure the best terms and conditions of employment of Filipino contract workers and ensure compliance therewith" and to "promote and protect the well-being of Filipino workers overseas." Section 29 of the 1996 POEA SEC itself provides that "all rights and obligations of the parties to the Contract, including the annexes thereof, shall be governed by the laws of the Republic of the Philippines, international conventions, treaties and covenants where the Philippines is a signatory." Even without this provision, a contract of labor is so impressed with public interest that the New Civil Code expressly subjects it to "the special laws on labor unions, collective bargaining, strikes and lockouts, closed shop, wages, working conditions, hours of labor and similar subjects." Thus, the Court has applied the Labor Code concept of permanent total disability to the case of seafarers. In Philippine Transmarine Carriers v. NLRC, seaman Carlos Nietes was found to be suffering from congestive heart failure and cardiomyopathy and was declared as unfit to work by the company-accredited physician. The Court affirmed the award of disability benefits to the seaman, citing ECC v. Sanico, GSIS v. CA, and Bejerano v. ECC that "disability should not be understood more on its medical significance but on the loss of earning capacity. Permanent total disability means disablement of an employee to earn wages in the same kind of work, or work of similar nature that he was trained for or accustomed to perform, or any kind of work which a person of hismentality and attainment could do. It does not mean absolute helplessness." It likewise cited Bejerano v. ECC, that in a disability compensation, it is not the injury which is compensated, but rather it is the incapacity to work resulting in the impairment of ones earning capacity.31 (Citations omitted) In Vergara v. Hammonia Maritime Services, Inc.,32 this Court read the POEA-SEC in harmony with the Labor Code and the AREC in interpreting in holding that: (a) the 120 days provided under Section 20-B(3) of the POEA-SEC is the period given to the employer to determine fitness to work and when the seafarer is deemed to be in a state of total and temporary disability; (b) the 120 days of total and temporary disability may be extended up to a maximum of 240 days should the seafarer require further medical treatment; and (c) a total and temporary disability becomes permanent when so declared by the company-designated physician within 120 or 240 days, as the case may be, or upon the expiration of the said periods without a declaration of either fitness to work or permanent disability and the seafarer is still unable to resume his regular seafaring duties. Quoted below are the relevant portions of this Courts Decision dated October 6, 2008: In real terms, this means that the shipowneran employer operating outside Philippine jurisdictiondoes not subject itself to Philippine laws, except to the extent that it concedes the coverage and application of these laws under the POEA Standard Employment Contract. On the matter of disability, the employer is not subject to Philippine jurisdiction in terms of being compelled to contribute to the State Insurance Fund that, under the Labor Code, Philippine employers are obliged to support. (This Fund, administered by the Employees Compensation Commission, is the source of work-related compensation payments for work-related deaths, injuries, and illnesses.) Instead, the POEA Standard Employment Contract provides its own system of disability compensation that approximates (and even exceeds) the benefits provided under Philippine law. The standard terms agreed upon, as above pointed out, are intended to be read and understood in accordance with Philippine laws, particularly, Articles 191 to 193 of the Labor Code and the applicable implementing rules and regulations in case of any dispute, claim or grievance. In this respect and in the context of the present case, Article 192(c)(1) of the Labor Code provides that: xxxx The rule referred to Rule X, Section 2 of the Rules and Regulations implementing Book IV of the Labor Code states: xxxx

These provisions are to be read hand in hand with the POEA Standard Employment Contract whose Section 20 (3) states: xxxx As these provisions operate, the seafarer, upon sign-off from his vessel, must report to the company-designated physician within three (3) days from arrival for diagnosis and treatment. For the duration of the treatment but in no case to exceed 120 days, the seaman is on temporary total disability as he is totally unable to work. He receives his basic wage during this period until he is declared fit to work or his temporary disability is acknowledged by the company to be permanent, either partially or totally, as his condition is defined under the POEA Standard Employment Contract and by applicable Philippine laws. If the 120 days initial period is exceeded and no such declaration is made because the seafarer requires further medical attention, then the temporary total disability period may be extended up to a maximum of 240 days, subject to the right of the employer to declare within this period that a permanent partial or total disability already exists. The seaman may of course also be declared fit to work at any time such declaration is justified by his medical condition. xxxx As we outlined above, a temporary total disability only becomes permanent when so declared by the company physician within the periods he is allowed to do so, or upon the expiration of the maximum 240-day medical treatment period without a declaration of either fitness to work or the existence of a permanent disability. In the present case, while the initial 120-day treatment or temporary total disability period was exceeded, the company-designated doctor duly made a declaration well within the extended 240-day period that the petitioner was fit to work. Viewed from this perspective, both the NLRC and CA were legally correct when they refused to recognize any disability because the petitioner had already been declared fit to resume his duties. In the absence of any disability after his temporary total disability was addressed, any further discussion of permanent partial and total disability, their existence, distinctions and consequences, becomes a surplusage that serves no useful purpose. 33(Citations omitted) Consequently, if after the lapse of the stated periods, the seafarer is still incapacitated to perform his usual sea duties and the company-designated physician had not yet declared him fit to work or permanently disabled, whether total or permanent, the conclusive presumption that the latter is totally and permanently disabled arises. On the other hand, if the company-designated physician declares the seaman fit to work within the said periods, such declaration should be respected unless the physician chosen by the seaman and the doctor selected by both the seaman and his employer declare otherwise. As provided under Section 20-B(3) of the POEA-SEC, a seafarer may consult another doctor and in case the latters findings differ from those of the company designated physician, the opinion of a third doctor chosen by both parties may be secured and such shall be final and binding. The same procedure should be observed in case a seafarer, believing that he is totally and permanently disabled, disagrees with the declaration of the company-designated physician that he is partially and permanently disabled. In Vergara, as between the determinations made by the company-designated physician and the doctor appointed by the seaman, the former should prevail absent any indication that the above procedure was complied with: The POEA Standard Employment Contract and the CBA clearly provide that when a seafarer sustains a work-related illness or injury while on board the vessel, his fitness or unfitness for work shall be determined by the company-designated physician. If the physician appointed by the seafarer disagrees with the company-designated physicians assessment, the opinion of a third doctor may be agreed jointly between the employer and the seafarer to be the decision final and binding on them. Thus, while petitioner had the right to seek a second and even a third opinion, the final determination of whose decision must prevail must be done in accordance with an agreed procedure. Unfortunately, the petitioner did not avail of this procedure; hence, we have no option but to declare that the company-designated doctors certification is the final determination that must prevail. x x x.34 (Citation omitted) In this case, the following are undisputed: (a) when Munar filed a complaint for total and permanent disability benefits on April 17, 2007, 181 days had lapsed from the time he signed-off from M/V Southern Unity on October 18, 2006; (b) Dr. Chua issued a disability grading on May 3, 2007 or after the lapse of 197 days; and (c) Munar secured the opinion of Dr. Chiu on May 21, 2007; (d) no third doctor was consulted by the parties; and (e) Munar did not question the competence and skill of the company-designated physicians and their familiarity with his medical condition. It may be argued that these provide sufficient grounds for the dismissal of Munars complaint. Considering that the 240-day period had not yet lapsed when the NLRC was asked to intervene, Munars complaint is premature and no cause of action for total and permanent disability benefits had set in. While beyond the 120-day period, Dr. Chuas medical report dated May 3, 2007 was issued within the 240-day period. Moreover, Munar did not contest Dr. Chuas findings using the procedure outlined under Section 20 -B(3) of the POEA-SEC. For being Munars attending physicians from the time he was repatriated and given their specialization in spine injuries, the findings of Dr. Periquet and Dr. Lim constitute sufficient bases for Dr. Chuas disability grading. As Munar di d not allege, much less, prove the contrary, there exists no reason why Dr. Chius assessment should be preferred over that of Dr. Chua. It must be noted, however, that when Munar filed his complaint, Dr. Chua had not yet determined the nature and extent of Muna rs disability. Also, Munar was still undergoing physical therapy and his spine injury had yet been fully addressed. Furthermore, when

Munar filed a claim for total and permanent disability benefits, more than 120 days had gone by and the prevailing rule then was that enunciated by this Court in Crystal Shipping, Inc. v. Natividad35 that total and permanent disability refers to the seafarers incapacity to perform his customary sea duties for more than 120 days. Particularly: Permanent disability is the inability of a worker to perform his job for more than 120 days, regardless of whether or not he loses the use of any part of his body. As gleaned from the records, respondent was unable to work from August 18, 1998 to February 22, 1999, at the least, or more than 120 days, due to his medical treatment. This clearly shows that his disability was permanent. Total disability, on the other hand, means the disablement of an employee to earn wages in the same kind of work of similar nature that he was trained for, or accustomed to perform, or any kind of work which a person of his mentality and attainments could do. It does not mean absolute helplessness. In disability compensation, it is not the injury which is compensated, but rather it is the incapacity to work resulting in the impairment of ones earning capacity. xxxx Petitioners tried to contest the above findings by showing that respondent was able to work again as a chief mate in March 2001. Nonetheless, this information does not alter the fact that as a result of his illness, respondent was unable to work as a chief mate for almost three years. It is of no consequence that respondent was cured after a couple of years. The law does not require that the illness should be incurable. What is important is that he was unable to perform his customary work for more than 120 days which constitutes permanent total disability. An award of a total and permanent disability benefit would be germane to the purpose of the benefit, which is to help the employee in making ends meet at the time when he is unable to work. 36 (Citations omitted and emphasis supplied) Consequently, that after the expiration of the 120-day period, Dr. Chua had not yet made any declaration as to Munars fitness to work and Munar had not yet fully recovered and was still incapacitated to work sufficed to entitle the latter to total and permanent disability benefits. In addition, that it was by operation of law that brought forth the conclusive presumption that Munar is totally and permanently disabled, there is no legal compulsion for him to observe the procedure prescribed under Section 20-B(3) of the POEA-SEC. A seafarers compliance with such procedure presupposes that the company-designated physician came up with an assessment as to his fitness or unfitness to work before the expiration of the 120-day or 240-day periods. Alternatively put, absent a certification from the company-designated physician, the seafarer had nothing to contest and the law steps in to conclusively characterize his disability as total and permanent. This Courts pronouncements in Vergara presented a restraint against the indiscriminate reliance on Crystal Shipping such that a seafarer is immediately catapulted into filing a complaint for total and permanent disability benefits after the expiration of 120 days from the time he signed-off from the vessel to which he was assigned. Particula rly, a seafarers inability to work and the failure of the company-designated physician to determine fitness or unfitness to work despite the lapse of 120 days will not automatically bring about a shift in the seafarers state from total and temporary to t otal and permanent, considering that the condition of total and temporary disability may be extended up to a maximum of 240 days. Nonetheless, Vergara was promulgated on October 6, 2008, or more than two (2) years from the time Munar filed his complaint and observance of the principle of prospectivity dictates that Vergara should not operate to strip Munar of his cause of action for total and permanent disability that had already accrued as a result of his continued inability to perform his customary work and the failure of the company-designated physician to issue a final assessment. WHEREFORE, premises considered, the petition is DENIED. The Decision dated January 28, 2011 and Resolution dated September 6, 2011 of the Court of Appeals in CA-G.R. SP No. 110878 are AFFIRMED. SO ORDERED. BIENVENIDO L. REYES Associate Justice WE CONCUR: MARIA LOURDES P. A. SERENO Chief Justice Chairperson TERESITA J. LEONARDO-DE CASTRO Associate Justice LUCAS P. BERSAMIN Associate Justice

MARTIN S. VILLARAMA, JR. Associate Justice CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court's Division. MARIA LOURDES P. A. SERENO Chief Justice

Footnotes
1

Penned by Associate Justice Rebecca De Guia-Salvador, with Associate Justices Sesinando E. Villon and Amy C. Lazaro-Javier, concurring; rollo, pp. 13-24.
2

Id. at 26-27. CA rollo, p. 96. Id. 101-102. Id. at 102. Id. at 103-104. Id. Id. at 104. Id. at 142. Id. at 144. Id. Id. at 145. Id. Id. at 113. Id. at 146. Id. at 147. Id. Id. at 114. Id. Id. at 201-207.

10

11

12

13

14

15

16

17

18

19

20

21

Id. at 204-206. Id. at 63-70. Id. at 68. Id. at 80-81. Id. at 3-61. Rollo, pp. 20-21. Id. at 22-23. Id. at 26-27.

22

23

24

25

26

27

28

29

NOTE: Any item in the schedule classified under Grade 1 shall be considered or shall constitute total and permanent disability.
30

521 Phil. 330 (2006). Id. at 345-347. G.R. No. 172933, October 6, 2008, 567 SCRA 610. Id. at 626-629. Id. at 629-630. 510 Phil. 332 (2005). Id. at 340-341. November 16, 2011

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34

35

36

G.R. No. 195167

FERNANDO CO (formerly doing business under the name "Nathaniel Mami House"*), Petitioner, vs. LINA B. VARGAS, Respondent. RESOLUTION CARPIO, J.: The Case This petition for review1 assails the 29 June 2010 Decision2 and the 5 January 2011 Resolution3 of the Court of Appeals in CA-G.R. SP No. 110728. The Court of Appeals set aside the 11 June 2008 Decision4 of the National Labor Relations Commission (NLRC) and reinstated the 30 October 2004 Decision5 of the Labor Arbiter. The Facts On 22 April 2003, respondent Lina B. Vargas (respondent) filed against Nathaniel Bakeshop and its owner Fernando Co a complaint for underpayment or non-payment of wages and holiday pay.6 The complaint was later amended to include illegal dismissal as a cause of action and the non-payment of service incentive leave.7 Respondent alleged that she started working at the bakeshop in October 1994 as a baker and worked from 8:00 a.m. until 8:30 p.m., Monday to Saturday. Aside from baking, respondent also served the customers and supervised the other workers in the

absence of the owner. Furthermore, respondent claimed that she sometimes cooked and did the chores of a housemaid whenever the latter was not available. Respondent had a salary ofP220 per day, which she received every Saturday afternoon. During the period of her employment, respondent was not given a payslip and she was never asked to sign a payroll. On 6 April 2003, petitioner Cos wife, Nely Co, told respondent to cook their lunch because the housemaid was ironing clothes . Since respondent was busy preparing customers orders, she lost track of time and was unable to cook lunch as instructed. Irate at respondents failure to cook, Nely Co cussed respondent and told her to leave and never to return because she was not needed anymore. Respondent was so humiliated and could no longer bear the treatment she received from her employers that she decided to take her salary and leave that same day. Respondent later filed the complaint against Nathaniel Bakeshop and its owner Fernando Co. Petitioner denies respondents claim that she was employed as a baker in their business. Petitioner alleges that they hired respondent to work as a housemaid. Petitioner refutes respondents version of the events which allegedly happened on 6 April 2003. Petitioner alleges that in April 2003, his wife, Nely Co, reprimanded respondent for her failure to cook lunch on time. Angered at being reprimanded, respondent then demanded her salary and walked out of petitioners residence and has never reported for work again. Petitioner further avers that respondent badmouthed petitioners daughter and displayed defiance, disrespect and insubordination toward them. On 30 October 2004, the Labor Arbiter rendered a Decision, the dispositive portion of which reads: WHEREFORE, premises considered, judgment is hereby rendered finding illegal complainants dismissal. Consequently, respondents are hereby held liable and ordered to reinstate complainant to her former position without loss of seniority rights and other privileges with full backwages initially computed at this time atP110,436.04. IN CASE REINSTATEMENT BECOMES IMPOSSIBLE DUE TO SOME SUPERVENING EVENT, RESPONDENTS ARE ALSO ORDERED TO PAY COMPLAINANTS SEPARATION PAY COMPUTED at one months pay for every year of service. Respondents are likewise ordered to pay complainants service incentive leave of P3,332.50, 13th month pay (pro-rata) of P1,551.66 and salary differential of P1,723.41. All other claims are hereby dismissed for lack of merit. SO ORDERED.8 The Labor Arbiter found that the place of business of petitioner is the same as his place of residence and that respondent works for petitioner as well as for his business which is based in his home. Thus, the Labor Arbiter concluded that "while complainant may have started her employ doing chores for the [petitioners] family, she also fulfilled tasks connected with t he [petitioners] business such as cooking, filling orders, baking orders, and other clerical work, a ll of which are usually necessary and desirable in the usual trade or business of the respondent. Inescapably, complainant is a regular employee and thus, entitled to security of tenure."9 On appeal, the NLRC reversed and set aside the Labor Arbiters Decision. The NLRC concluded that respondent was not employed as a baker at petitioners bakeshop but was merely petitioners housemaid who left her employ voluntari ly. The NLRC found petitioner not guilty of illegal dismissal. Respondent filed a petition for certiorari with the Court of Appeals. The Ruling of the Court of Appeals On 29 June 2010, the Court of Appeals promulgated its Decision in favor of respondent. The Court of Appeals annulled the NLRC Decision and reinstated the 30 October 2004 Decision of the Labor Arbiter. The Court of Appeals ruled: [I]t is clear that petitioner [Lina B. Vargas] is not a househelper or domestic servant of private respondents [Nathaniel Bakeshop and Fernando Co]. The evidence shows that petitioner is working within the premises of the business of private respondent Co and in relation to or in connection with such business. In the Memorandum of Appeal filed by private respondents before the NLRC, the place of business of respondent Co and his residence is located in the same place, Brgy. Juliana, San Fernando, Pampanga. Thus, respondent Co exercised control and supervision over petitioners functions. Respondent Cos averment that petitioner had the simple task of cleaning the house and cooking at times and was not involved in the business was negated by the fact that petitioner likewise takes the orders of private respondents customers. Even if petitioner was actually working as dom estic servant in private respondents residence, her act of taking orders, which was ratiocinated by the NLRC as not leading to the conclusion that petitioner in fact took the orders, would warrant the conclusion that petitioner should be considered as a regular employee and not as a mere family househelper or domestic servant of respondent Co.

Private respondents relied heavily on the recantation (through an Affidavit of Recantation) by Joseph Baybayon of his Affidavit stating that petitioner was an employee, to boast [sic] their theory that petitioner is a mere domestic helper. Nonetheless, this Court is convinced that the allegations in the first affidavit are sufficient to establish that petitioner is an employee of private respondent and not a housemaid. Granting arguendo, that the second affidavit validly repudiated the first one, courts generally do not look with favor on any retraction or recanted testimony, for it could have been secured by considerations other than to tell the truth and would make solemn trials a mockery and place the investigation of the truth at the mercy of unscrupulous witnesses. A recantation does not necessarily cancel an earlier declaration, but like any other testimony, the same is subject to the test of credibility and should be received with caution. Having resolved the issue that petitioner was an employee of private respondents and not a housemaid, was petitioner illegally dismissed? The answer is in the affirmative. Since petitioner is an employee of private respondents, she is entitled to security of tenure. The NLRC observed that it was petitioner who left private respondents on April 6, 2003 when petitioner was allegedly driven away from work by Nely Co. Private respondents witnesses, Jay dela Cruz and Maria Fe Reniva, averred that it was petitioner who abandoned her job by not reporting for work. But their affidavits did state that the two were employees of private respondent. The other two documents considered by the NLRC were the affidavits of Felisa Borason San Andres (who allegedly helped petitioner to be employed as housemaid of Nely Co) and Alma P. Agorita (an alleged co-housemaid of petitioner in the Co residence). Surprisingly, the affidavit of Felisa Borason San Andres was written in English, considering the statement that she was employed as househelper of Nely Co. The question is whether the said househelper understood what was written in her affidavit or if the same was explained to her in her native language, for she was a resident of San Felipe, Naga City, where she allegedly executed her affidavit. All told, the said affidavits cannot be given credence to refute the fact that petitioner was an employee of private respondent Co doing work in relation to private respondents business, which is that of a bakes hop. Assuming further that petitioner abandoned her job, the Supreme Court held in Ultra Villa Food Haus and/or Rosie Tio vs. NLRC that to constitute abandonment, two requisites must concur: (1) the failure to report to work or absence without valid or justifiable reason, and (2) a clear intention to sever the employer-employee relationship as manifested by some overt acts, with the second requisite as the more determinative factor. The burden of proving abandonment as a just cause for dismissal is on the employer. Private respondents failed to discharge this burden. The only evidence adduced by private respondents to prove abandonment were the affidavits of their househelpers and employees. WHEREFORE, premises considered, the petition is GRANTED. The Decision of the National Labor Relations Commission, Second Division dated June 11, 2008 is hereby ANNULLED and SET ASIDE and the Decision of the Labor Arbiter dated October 30, 2004 is REINSTATED. SO ORDERED.10 (Boldfacing supplied) Petitioner filed a Motion for Reconsideration, which the Court of Appeals denied in its Resolution dated 5 January 2011. Hence, this petition. The Issue Petitioner raises the sole issue of whether the "Court of Appeals erred in ruling that at the time Respondent was working with the Co family, the business was being conducted at the residence."11 The Ruling of the Court We find the petition without merit. In this case, it was only in petitioners Supplement to the Motion for Reconsideration of the Court of Appeals Decision that petitioner raised the issue that contrary to the findings of the Labor Arbiter, NLRC, and the Court of Appeals, the bakery was not located at his residence at the time respondent was in their employ. Furthermore, petitioner would even have this Court evaluate additional documentary evidence which were not offered during the proceedings in the Labor Arbiter, NLRC, and the Court of Appeals. The additional evidence were only submitted after the Court of Appeals promulgated its Decision, when petitioner attached the additional evidence in his Supplement to the Motion for Reconsideration.12 The issue raised by petitioner is clearly a question of fact which requires a review of the evidence presented. The Supreme Court is not a trier of facts.13 It is not the function of this Court to examine, review or evaluate the evidence all over again, 14 specially on evidence raised for the first time on appeal.15 A petition for review under Rule 45 of the Rules of Court should cover only questions of law, thus: Section 1. Filing of petition with Supreme Court. A party desiring to appeal by certiorari from a judgment or final order or resolution of the Court of Appeals, the Sandiganbayan, the Regional Trial Court or other courts whenever authorized by law, may file with the

Supreme Court a verified petition for review on certiorari. The petition shall raise only questions of law which must be distinctly set forth. (Emphasis supplied) As a rule, the findings of fact of the Court of Appeals are final and conclusive and this Court will not review them on appeal, 16 subject to exceptions such as those enumerated by this Court in Development Bank of the Philippines v. Traders Royal Bank :17 The jurisdiction of the Court in cases brought before it from the appellate court is limited to reviewing errors of law, and findings of fact of the Court of Appeals are conclusive upon the Court since it is not the Courts function to analyze and weigh the evid ence all over again. Nevertheless, in several cases, the Court enumerated the exceptions to the rule that factual findings of the Court of Appeals are binding on the Court: (1) when the findings are grounded entirely on speculations, surmises or conjectures; (2) when the inference made is manifestly mistaken, absurd or impossible; (3) when there is grave abuse of discretion; (4) when the judgment is based on a misapprehension of facts; (5) when the findings of fact are conflicting; (6) when in making its findings the Court of Appeals went beyond the issues of the case, or its findings are contrary to the admissions of both the appellant and the appellee; (7) when the findings are contrary to that of the trial court; (8) when the findings are conclusions without citation of specific evidence on which they are based; (9) when the facts set forth in the petition as well as in the petitioners main and reply briefs are not disputed by the respondent; (10) when the findings of fact are premised on the supposed absence of evidence and contradicted by the evidence on record; or (11) when the Court of Appeals manifestly overlooked certain relevant facts not disputed by the parties, which, if properly considered, would justify a different conclusion.18 Petitioner failed to show that this case falls under any of the exceptions. The finding of the Labor Arbiter that petitioners bakery and his residence are located at the same place was not reversed by the NLRC. 19Furthermore, the Court of Appeals upheld this finding of the Labor Arbiter. We find no justifiable reason to deviate from the findings and ruling of the Court of Appeals. WHEREFORE, we DENY the petition. We AFFIRM the 29 June 2010 Decision and the 5 January 2011 Resolution of the Court of Appeals in CA-G.R. SP No. 110728. SO ORDERED. ANTONIO T. CARPIO Associate Justice WE CONCUR: ARTURO D. BRION Associate Justice JOSE PORTUGAL PEREZ Associate Justice MARIA LOURDES P. A. SERENO Associate Justice BIENVENIDO L. REYES Associate Justice ATTESTATION I attest that the conclusions in the above Resolution had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division. ANTONIO T. CARPIO Associate Justice Chairperson CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairpersons Attestation, I certify that the conc lusions in the above Resolution had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division. RENATO C. CORONA Chief Justice

Footnotes
*

Also known as "Nathaniels Bakeshop." Under Rule 45 of the 1997 Rules of Civil Procedure.

Rollo, pp. 12-25. Penned by Associate Justice Magdangal M. De Leon, with Associate Justices Mario V. Lopez and Amy C. Lazaro-Javier, concurring.
3

Id. at 86-87. CA rollo, pp. 245-264. Id. at 110-125. Id. at 28-29. Id. at 30-31. Id. at 124-125. Id. at 121. Rollo, pp. 22-24. Petition for Review, p. 24. Rollo, pp. 88-145.

10

11

12

13

Alio v. Heirs of Angelica A. Lorenzo, G.R. No. 159550, 27 June 2008, 556 SCRA 139; Diesel Construction Co., Inc. v. UPSI Property Holdings, Inc., G.R. Nos. 154885 & 154937, 24 March 2008, 549 SCRA 12.
14

Alicer v. Compas, G.R. No. 187720, 30 May 2011.

15

China Banking Corporation v. Asian Construction and Development Corporation, G.R. No. 158271, 8 April 2008, 550 SCRA 585.
16

Sps. Andrada v. Pilhino Sales Corporation, G.R. No. 156448, 23 February 2011; Atlas Consolidated Mining and Development Corporation v. Commissioner of Internal Revenue, G.R. No. 159490, 18 February 2008, 546 SCRA 150; Microsoft Corporation v. Maxicorp, Inc., 481 Phil. 550 (2004).
17

G.R. No. 171982, 18 August 2010, 628 SCRA 404. Id. at 413-414.

18

19

Although the NLRC reversed the Labor Arbiters Decision and held that respondent was not employed as a baker at petitioners bakeshop but was merely petitioners housemaid, the NLRC did not reverse the Labor Arbiters find ing that the bakery is located at petitioners residence. G.R. No. 200837 June 5, 2013

MAERSK FILIPINAS CREWING INC./MAERSK SERVICES LTD., AND/OR MR. JEROME DELOS ANGELES,Petitioners, vs. NELSON E. MESINA, Respondent. RESOLUTION

REYES, J.: This Petition for Review on Certiorari,1 under Rule 45 of the Rules of Court, assails the Decision2 dated October 27, 2011 of the Court of Appeals (CA) in CA-G.R. SP No. 113470 which reversed and set aside the Decision3dated July 23, 2009 of the National Labor Relations Commission (NLRC) and reinstated the Decision4 dated April 14, 2008 of the Labor Arbiter (LA) awarding US$75,000.00 total disability benefits to Nelson Mesina (respondent) as well as attorneys fees. Likewise assailed is the CA Resolution5 dated February 29, 2012 which denied reconsideration. Antecedent Facts On March 29, 2005, the respondent was employed by Maersk Filipinas Crewing Inc., with Mr. Jerome delos Angeles as its Manager, for and in behalf of its principal, Maersk Services, Ltd., (petitioners) as a steward on board the vessel "Sealand Innovator" for a period of nine (9) months with a monthly basic salary of US$425.00. 6 The respondent boarded the vessel on May 3, 2005 after having been declared fit for sea duties in his Pre-Employment Medical Examination.7 As a steward, the respondents functions involved kitchen-related services, cleaning accommodation spaces and performing laundry services, as may be required. Thus, while on board he cooked and served three meals everyday for sixty (60) persons. He also washed a cabin-load of dirty laundry all by himself using strong detergent and fabric conditioner. He was further ordered by the vessels captain to wash-paint the decks from second to fourth deck using special soap and chemicals. Sometime in June 2005, the respondent started to feel unusual itchiness all over his body followed by the appearance of small spots on his skin. He initially deferred seeking medical attention but when the itching became unbearable in October 2005, he requested for a thorough medical check-up. He was subjected to medical check-up on board. After considering the extent of the rashes on his upper torso8and the fact that he is engaged in food preparation and service, he was medically repatriated on October 7, 2005. Upon arrival in the Philippines, the respondent was referred to the petitioners company -designated physician, Dr. Natalio Alegre II (Dr. Alegre),9 before whom he reported for treatment twice a week for eight (8) months. The respondent also underwent phototherapy for not less than twenty (20) sessions. During all these times, the petitioners shouldered the medical expenses of the respondent and paid him sick wage benefits. In a letter dated June 23, 2006 to the petitioners, Dr. Alegre declared the respondent to be afflicted with psoriasis, an auto-immune ailment that is not work-related, viz: Mr. Nelson E. Mesina followed-up on 23 June 2006. The complete hepatitis profile was normal. The SGPT and SGOT were elevated indicating liver inflammation. Ultrasound of the liver showed severe fatty infiltration. Essentiale Forte three times daily is prescribed and follow-up is requested on 23 July 2006. Psoriasis is an auto-immune ailment whereby the immune system misbehaves for no known reasons to attack a particular part of the body (in this case, the skin). It is not work-related and based on POEA contract, no disability could be assessed. 10 Based on Dr. Alegres finding that psoriasis is not work-related, the petitioners discontinued paying the respondents benefits. Aggrieved, the respondent sought the assistance of his union, the Associated Maritime Officers and Seamens Union of the Philippines (AMOSUP), which submitted him for diagnosis to Dr. Glenda Anastacio-Fugoso (Dr. Fugoso), a dermatologist at the Seamans Hospital. In a handwritten certification dated February 13, 2007, Dr. Fugoso confirmed that the respondent is suffering from Psoriasis Vulgaris, a disease aggravated by work but is not contagious. In another handwritten certification dated February 20, 2007, Dr. Fugoso certified that: Mr. Nelson E, Mesina is at present disabled. Diagnosed as Psoriasis Vulgaris (a recurring non-contagious papulosquamous disease aggravated by stress drug intake alcohol etc.). His skin condition has occupied 80% of his body which will need a longer time to control.11

In view of the conflicting findings of the two doctors on the causal connection between respondents illness and work, the pa rties pursued grievance machinery under the Total Crew Cost-International Maritime Employers Committee-Collective Bargaining Agreement (TCC-IMEC CBA). Their conferences, however, yielded no settlement. This prompted the respondent to commence the herein complaint for the payment of full disability benefits, damages, and attorneys fees before the LA. The respondent claimed that his illness is compensable because it manifested during his employment aboard the petitioners ve ssel. He further averred that it was triggered by his exposure to strong detergent soap and chemicals which he used in washing the dishes, laundry and ship decks. Upon the other hand, the petitioners denied liability on the basis of Dr. Alegres declaratio n that it is not a work-related ailment and psoriasis is not an occupational disease under the 2000 Philippine Overseas Employment Administration-Standard Employment Contract for Seafarers (POEA-SEC). Ruling of the LA In its Decision12 dated April 14, 2008, LA Romelita N. Rioflorido adjudged the respondents illness to be reasonably connected to his work and thus compensable. The LA explained, thus: Our own research confirms that respondents illness can be reasonably related to his work as stewa rd. Not every everyone [sic] who has the gene mutations gets psoriasis and there are several forms of psoriasis that people can develop. Certain environmental triggers play a role in causing psoriasis in people who have these gene mutations. Also, psychological stress has long been understood as a trigger for psoriasis flares, but scientists are still unclear about exactly how this occurs. Studies do show that not only can a sudden, stressful event trigger a rash to worsen; daily hassles of life can also trigger a flare. In addition, one study showed that people who are categorized as "huge worriers" were almost two times less likely to respond to treatment compared to "low worriers". (//dermatology.about.com/od/psoriasisbasics/a/psorcause.htm). Sometimes even mild injuries to the skin such as abrasions can trigger psoriasis flares. This is called koebner phenomenon. (www.psoriasiscafe.org/psoriasis-cause.htm). There is nothing in the record to show that respondents illness was caused by genetic predispositi on or drug reaction. Having ruled out these causes, what remains is the environmental factor such as respondents constant exposure to strong laundry detergent powder and fabric conditioner, chemicals and the stress and strain which are present in his work.13 The LA further reasoned that in disability compensation, it is not the injury which is compensated but rather the incapacity to work resulting in the impairment of ones earning capacity. Obviously, the respondents continued employment is deleterious to his health because he will be exposed to factors that can increase the risk of the further recurrence or aggravation of his psoriasis. The fact that the petitioners no longer employed him is the most eloquent proof of his permanent disability. 14 Accordingly, the decretal portion of the LA decision read: WHEREFORE, premises considered, judgment is hereby rendered ordering petitioners to pay the respondent, jointly and severally, the amount of US$75,000.00 representing his total disability benefits, plus attorneys fees of US$7,500.00, in Philippine cur rency, at the rate of exchange prevailing at the time of actual payment. All other claims are dismissed. SO ORDERED.15 Ruling of the NLRC The NLRC differed with the conclusions of the LA and held that there is actually no substantial evidence to prove that the nature of and the stress concomitant to the respondents work aggravated his psoriasis. The NLRC observed that the only evidence substantiating the claim that the respondents illness is work-related were his bare allegations and the two certifications of Dr. Fugoso who examined him only once. The NLRC noted that Dr. Fugoso even failed to make a clear finding that it was the stress specifically experienced by the respondent while aboard the vessel that aggravated his disease. The NLRC accorded more weight to the certification issued by Dr. Alegre, who was in a better position to assess the respondent after having examined and treated him twice a week for eight (8) months. Thus, the NLRC reversed the LAs ruling and disposed as follows in its Decision 16 dated July 23, 2009, viz: WHEREFORE, premises considered, the appealed Decision is hereby REVERSED and SET ASIDE, and another one entered DISMISSING the instant complaint for lack of merit. SO ORDERED.17 Ruling of the CA The CA sustained the LAs judgment elaborating that inasmuch as the actual cause of psoriasis is unknown and given the probability that its onset was caused by factors found within the respondents work environment, the doubt as to whether his illness is work-related should be resolved in his

The CA further pointed out that despite the failure of the two doctors to declare the respondent to be fit to return to work, the abrasions on his skin remain repulsive despite treatment for eight (8) months, and the fact that there is no known cure for psoriasis reasonably establish that he can no longer work as seaman; hence, permanently and totally disabled for purposes of compensation under the law. The decretal portion of the CA Decision18 dated October 27, 2011 thus read: WHEREFORE, the foregoing considered, the assailed Decision dated 23 July 2009 of the National Labor Relations Commission in NLRC LAC No. (OFW-M) 07-000527-08 is REVERSED and SET ASIDE, and the Decision dated 14 April 2008 of the Labor Arbiter Romelita N. Rioflorido rendered in NLRC NCR CASE No. OFW-(M)-06-06586-07 is hereby REINSTATED. SO ORDERED.19 The petitioners moved for reconsideration but their motion was denied in the CA Resolution20 dated February 29, 2012. Issues The petitioners impute the following errors to the appellate court, viz: I. THE CONCLUSION OF THE CA WAS BASED ON INFERENCES THAT WERE MANIFESTLY MISTAKEN; ITS FINDINGS WERE CONTRARY TO THE PROVISIONS OF THE POEA STANDARD EMPLOYMENT CONTRACT AND THE CBA, AND THE AGREEMENTS BETWEEN THE PARTIES; II. THE HONORABLE CA BLATANTLY ERRED IN REVERSING THE DECISION OF THE NLRC EVEN IF RESPONDENT FAILED TO DEMONSTRATE THAT THE NLRC COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF OR EXCESS OF JURISDICTION IN DECIDING TO REVERSE THE DECISION OF LA RIOFLORIDO.21 The primordial issue submitted for the Courts resolution is whether or not the respondent is entitled to permanent total disability benefits. Ruling of the Court At the onset, it is well to note that in resolving disputes on disability benefits, the fundamental consideration has been that the POEA-SEC was designed primarily for the protection and benefit of Filipino seamen in the pursuit of their employment on board ocean-going vessels. As such, its provisions must be construed and applied fairly, reasonably and liberally in their favor because only then can its beneficent provisions be fully carried into effect.22 Under Section 20.1.4.123 of the parties AMOSUP/IMEC-CPA for 2004, the respondent shall be entitled to compensation if he suffers permanent disability as a result of a work-related illness while serving on board. The provision further states that the determination of whether an illness is work-related shall be made in accordance with Philippine laws on employees compensation.24 The 2000 POEA-SEC25 defines "work-related illness" as "any sickness resulting to disability or death as a result of an occupational disease listed under Section 32-A of this contract with the conditions set therein satisfied." 26 In interpreting the said definition, the Court has held that for disability to be compensable under Section 20(B) of the 2000 POEASEC,27 it is not sufficient to establish that the seafarers illness or injury has rendered him permanently or partially disabled; i t must also be shown that there is a causal connection between the seafarers illness or injury and the work for which he had been contracted.28 The Court has likewise ruled that the list of illnesses/diseases in Section 32-A does not preclude other illnesses/diseases not so listed from being compensable. The POEA-SEC cannot be presumed to contain all the possible injuries that render a seafarer unfit for further sea duties.29 This is in view of Section 20(B)(4) of the POEA-SEC which states that "those illnesses not listed in Section 32 of this Contract are disputably presumed as work-related." Concomitant with such presumption is the burden placed upon the claimant to present substantial evidence that his working conditions caused or at least increased the risk of contracting the disease. 30 Substantial evidence consists of such relevant evidence which a reasonable mind might accept as adequate to justify a conclusion that there is a causal connection between the nature of his employment and his illness, or that the risk of contracting the illness was increased by his working conditions.31 Only a

reasonable proof of work-connection, not direct causal relation is required to establish compensability of a non-occupational disease.32 Equally relevant to the resolution of the present claim are the following provisions of the POEA-SEC, viz: SECTION 20. COMPENSATION AND BENEFITS (B) COMPENSATION AND BENEFITS FOR INJURY OR ILLNESS xxxx 3. Upon sign-off from the vessel for medical treatment, the seafarer is entitled to sickness allowance equivalent to his basic wage until he is declared fit to work or the degree of permanent disability has been assessed by the company-designated physician but in no case shall this period exceed one hundred twenty (120) days. For this purpose, the seafarer shall submit himself to a post employment medical examination by a company-designated physician within three working days upon his return except when he is physically incapacitated to do so, in which case, a written notice to the agency within the same period is deemed as compliance. Failure of the seafarer to comply with the mandatory reporting requirement shall result in his forfeiture of the right to claim the above benefits. If a doctor appointed by the seafarer disagrees with the assessment, a third doctor may be agreed jointly between the employer and the seafarer. The third doctors decision shall be final and binding on both parties. 4. Those illnesses not listed in Section 32 of this Contract are disputably presumed as work related. 5. Upon sign-off of the seafarer from the vessel for medical treatment, the employer shall bear the full cost of repatriation in the event the seafarer is declared (1) fit for repatriation; or (2) fit to work but the employer is unable to find employment for the seafarer on board his former vessel or another vessel of the employer despite earnest efforts. 6. In case of permanent total or partial disability of the seafarer caused by either injury or illness the seafarer shall be compensated in accordance with the schedule of benefits arising from an illness or disease shall be governed by the rates and the rules of compensation applicable at the time the illness or disease was contracted. In determining the work-causation of a seafarers illness, the diagnosis of the company-designated physician bears vital significance. After all, it is before him that the seafarer must initially report to upon medical repatriation pursuant to above terms. Nevertheless, the company physicians assessment does not evince irrefutable and conclusive weight in assessing the compensability of an illness as the seafarer has the right to seek a second opinion from his preferred physician.33 The conflicting findings of the companys doctor and the seafarers physician often stir suits for disability compensa tion. As an extrajudicial measure of settling their differences, the POEA-SEC gives the parties the option of agreeing jointly on a third doctor whose assessment shall break the impasse and shall be the final and binding diagnosis. While it has been held that failure to resort to a third doctor will render the company doctors diagnosis controlling, it is not the absolute and automatic consequence in all cases. This is because resort to a third doctor remains a mere directory not a mandatory provision as can be gleaned from the tenor of Section 20(B)(3), POEA-SEC itself. Further, the right of a seafarer to consult a physician of his choice can only be sensible when his findings are duly evaluated by the labor tribunals in awarding disability claims.34 Hence, it has been held that if serious doubt exists on the company designated physicians declaration of the nature of a seamans injury, resort to prognosis of other competent medical professionals should be made. In doing so, a seaman should be given the opportunity to assert his claim after proving the nature of his injury. This proof will in turn be used to determine the benefits rightfully accruing to him.35 Psoriasis comes from the Greek word "psora" which means itch. It is a common disfiguring and stigmatising skin disease associated with profound impaired quality of life.36 People with psoriasis typically have sharply demarcated erythematous plaques covered by silvery white scales, which most commonly appear on the elbows, knees, scalp, umbilicus, and lumbar area.37 Chronic plaque psoriasis (psoriasis vulgaris) is the most common type of the disease which manifests thru plaques of varying degrees of scaling, thickening and inflammation in the skin. The plaques are typically oval-shaped, of variable size and clearly distinct from adjacent normal skin.38 As a result of the chronic, incurable nature of psoriasis, associated morbidity is significant. Patients in primary care and hospital settings have similar reductions in quality of life specifically in the functional, psychological and social dimensions. Symptoms

specifically related to the skin (i.e., chronic itch, bleeding, scaling, nail involvement), problems related to treatments (mess, odor, inconvenience, time), arthritis, and the effect of living with a highly visible, disfiguring skin disease (difficulties with relationships, difficulties with securing employment, and poor self- esteem) all contribute to morbidity. About one in four patients experience major psychological distress, and the extent to which they feel socially stigmatised and excluded is significant.39 Current available treatments for the disease are reasonably effective as short-term therapy. Extended disease control is, however, difficult to achieve as the safety profile of most therapeutic agents limit their long-term use.40 Until now, the exact cause of psoriasis remains a mystery. But several family studies have provided compelling evidence of a genetic predisposition to psoriasis, although the inheritance pattern is still unclear. 41 Other environmental factors such as climate changes, physical trauma, infections of the upper respiratory tract, 42 drugs, and stress may also trigger its onset or development.43 After a circumspect evaluation of the conflicting medical certifications of Drs. Alegre and Fugoso, the Court finds that serious doubts pervade in the former. While both doctors gave a brief description of psoriasis, it was only Dr. Fugoso who categorically stated a factor that triggered the activity of the respondents disease stress, drug or alcohol intake, etc. Dr. Alegre immediately concluded that it is not work-related on the basis merely of the absence of psoriasis in the schedule of compensable diseases in Sections 32 and 32-A of the POEA-SEC. Dr. Alegre failed to consider the varied factors the respondent could have been exposed to while on board the vessel. At best, his certification was merely concerned with the examination of the respondent for purposes of diagnosis and treatment and not with the determination of his fitness to resume his work as a seafarer in stark contrast with the certification issued by Dr. Fugoso which categorically declared the respondent as "disabled." The certification of Dr. Alegre is, thus, inconclusive for purposes of determining the compensability of psoriasis under the POEA-SEC. Moreover, Dr. Alegres specialization is General Surgery44 while Dr. Fugoso is a dermatologist, or one with specialized knowledge and expertise in skin conditions and diseases like psoriasis. Based on these observations, it is the Courts considered view that Dr. Fugosos certification deserves greater weight. It remains undisputed that the respondent used strong detergent, fabric conditioner, special soap and chemicals in performing his duties as a steward. Stress and climate changes likewise permeate his working environment as with that of any other seafarer. These factors, taken together with Dr. Fugosos certification, confirm the existence of a reasonable connection between the n ature of respondents work and the onset of his psoriasis. At any rate, even in the absence of an official finding by the company-designated physician or the respondents own physician, he is deemed to have suffered permanent total disability pursuant to the following guidelines in Fil-Star Maritime Corporation v. Rosete,45 thus: Permanent disability is inability of a worker to perform his job for more than 120 days, regardless of whether or not he loses the use of any part of his body. Total disability, on the other hand, means the disablement of an employee to earn wages in the same kind of work of similar nature that he was trained for, or accustomed to perform, or any kind of work which a person of his mentality and attainments could do. A total disability does not require that the employee be completely disabled, or totally paralyzed. 1wphi1 What is necessary is that the injury must be such that the employee cannot pursue his or her usual work and earn from it. A total disability is considered permanent if it lasts continuously for more than 120 days. x x x.46 (Citations omitted) It is undisputed that from the time the respondent was medically repatriated on October 7, 2005 he was unable to work for more than 120 days. In fact, Dr. Alegres certification was issued only after 259 days with the respondent needing further medic al treatments thus rendering him unable to pursue his customary work. Despite the declaration in the medical reports that psoriasis is not contagious, no profit-minded employer will hire him considering the repulsive physical manifestation of the disease, its chronic nature, lack of long-term cure and the vulnerability of the patient to cardiovascular diseases and some cancers. 47 Its inevitable impact to the respondents chances of being hired and capacity to continue working as a seaman cannot be ignored. His permanent disability thus effectively became total in nature entitling him to permanent total disability benefits as correctly awarded by the LA and the CA. WHEREFORE, premises considered, the petition is hereby DENIED. The Decision dated October 27, 2011 and Resolution dated February 29, 2012 of the Court of Appeals in CA-G.R. SP No. 113470 are AFFIRMED. SO ORDERED. BIENVENIDO L. REYES Associate Justice WE CONCUR:

MARIA LOURDES P. A. SERENO Chief Justice Chairperson TERESITA J. LEONARDO-DE CASTRO Associate Justice MARTIN S. VILLARAMA, JR. Associate Justice CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution, I cet1ify that the conclusions in the above Resolution had been reached in consultation before the case was assigned to the writer of the opinion of the Court's Division. MARIA LOURDES P. A. SERENO Chief Justice LUCAS P. BERSAMIN Associate Justice

Footnotes
1

Rollo, pp. 3-28.

Penned by Associate Justice Manuel M. Barrios, with Associate Justices Mario L. Guaria III and Apolonio D. Bruselas, Jr., concurring; id. at 30-37.
3

Id. at 69-79. Id. at 127-137. Id. at 66-67. Id. at 80. Id. at 199. Id. at 82. Id. Id. at 83. Id. at 241. Id. at 127-137. Id. at 135. Id. at 136-137. Id. at 137. Id. at 69-79. Id. at 78.

10

11

12

13

14

15

16

17

18

Id. at 30-37. Id. at 36-37. Id. at 66-67. Id. at 11. Seagull Maritime Corp. v. Dee, 548 Phil. 660, 671-672 (2007).

19

20

21

22

23

A seafarer who suffers permanent disability as a result of work-related illness or from an injury as a result of an accident, regardless of fault but excluding injuries caused by a seafarers willful act, whilst serving on board, including accidents and work[-]related illness occurring whilst travelling to and from the ship, and whose ability to work is reduced as a result thereof, shall in addition to sick pay, be entitled to compensation according to the provisions of this Agreement. In determining work-related illness, reference shall be made to the Philippine Employees Compensation Law and/or Social Security Law. Rollo, p. 73.
24

Id.

25

Department Order No. 4, s. of 2000 is entitled Amended Terms and Conditions Governing the Employment of Filipino Seafarers On-Board Ocean-Going Vessels.
26

Id., Definition of Terms, Item No. 12. SEC. 20. COMPENSATION AND BENEFITS xxxx B. COMPENSATION AND BENEFITS FOR INJURY OR ILLNESS The liabilities of the employer when the seafarer suffers work-related injury or illness during the term of his contract are as follows: 1. The employer shall continue to pay the seafarer his wages during the time he is on board the vessel; 2. If the injury or illness requires medical and/or dental treatment in a foreign port, the employer shall be liable for the full cost of such medical, serious dental, surgical and hospital treatment as well as board and lodging until the seafarer is declared fit to work or to repatriated. However, if after repatriation, the seafarer still requires medical attention arising from said injury or illness, he shall be so provided at cost to the employer until such time he is declared fit or the degree of his disability has been established by the company-designated physician. 3. Upon sign-off from the vessel for medical treatment, the seafarer is entitled to sickness allowance equivalent to his basic wage until he is declared fit to work or the degree of permanent disability has been assessed by the company-designated physician but in no case shall this period exceed one hundred twenty (120) days. For this purpose, the seafarer shall submit himself to a post-employment medical examination by a company-designated physician within three working days upon his return except when he is physically incapacitated to do so, in which case, a written notice to the agency within the same period is deemed as compliance. Failure of the seafarer to comply with the mandatory reporting requirement shall result in his forfeiture of the right to claim the above benefits. If a doctor appointed by the seafarer disagrees with the assessment, a third doctor may be agreed jointly between the employer and the seafarer. The third doctors decision shall be final and binding on both parties. 4. Those illnesses not listed in Section 32 of this Contract are disputably presumed as work-related. 5. Upon sign-off of the seafarer from the vessel for medical treatment, the employer shall bear the full cost of repatriation in the event the seafarer is declared (1) fit for repatriation, or (2) fit to work but the employer is unable to find employment for the seafarer on board his former vessel or another vessel of the employer despite earnest efforts.

27

6. In case of permanent total or partial disability of the seafarer caused by either injury or illness the seafarer shall be compensated in accordance with the schedule of benefits arising from an illness or disease shall be governed by the rates and the rules of compensation applicable at the time the illness or disease was contracted.
28

Magsaysay Maritime Corporation v. NLRC, G.R. No. 186180, March 22, 2010, 616 SCRA 362, 373-374. Supra note 22. Aya-ay v. Arpaphil Shipping Corp., 516 Phil. 628, 639-640 (2006). Supra note 28, at 376. GSIS v. Besitan, G.R. No. 178901, November 23, 2011, 661 SCRA 186, 194. See Coastal Safeway Marine Services, Inc. v. Esguerra, G.R. No. 185352, August 10, 2011, 655 SCRA 300, 307-308. See HFS Philippines, Inc. v. Pilar, G.R. No. 168716, April 16, 2009, 585 SCRA 315, 326. Supra note 22, at 670-671.

29

30

31

32

33

34

35

36

Smith, Catherine H. and Barker, J N W N, "Psoriasis and its management," BRITISH MEDICAL JOURNAL 333 (2006), 380.
37

Schon, Michael P. and Boehncke, W.-Henning, "Psoriasis," THE NEW ENGLAND JOURNAL OF MEDICINE 352 (2005), 1900.
38

Supra note 36, at 381. Id. Supra note 37, at 1909. Id. at 1899. Id. at 1902. Supra note 36. http://alegremedicalclinic.net/about_us.html, last accessed on April 2, 2013, 11:22 a.m. G.R. No. 192686, November 23, 2011, 661 SCRA 247. Id. at 257-258. Supra note 36. February 16, 2011

39

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43

44

45

46

47

G.R. No. 182070

E.G & I. CONSTRUCTION CORPORATION and EDSEL GALEOS, Petitioners, vs. ANANIAS P. SATO, NILO BERDIN, ROMEO M. LACIDA, JR., and HEIRS OF ANECITO S. PARANTAR, SR., namely: YVONNE, KIMBERLY MAE, MARYKRIS, ANECITO, JR., and JOHN BRYAN, all surnamed PARANTAR, Respondents. DECISION NACHURA, J.:

Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court, assailing the Decision 1dated October 24, 2007 and the Resolution2 dated March 3, 2008 of the Court of Appeals (CA) in CA-G.R. SP No. 02316. The factual and procedural antecedents of the case are as follows: Respondent Ananias P. Sato (Sato) was hired in October 1990 by petitioner E.G. & I. Construction Corporation as a grader operator, which is considered as technical labor. He held the position for more than thirteen (13) years. In April 2004, Sato discovered that petitioner corporation had not been remitting his premium contributions to the Social Security System (SSS). When Sato kept on telling petitioners to update his premium contributions, he was removed as a grader operator and made to perform manual labor, such as tilling the land in a private cemetery and/or digging earthworks in petitioner corporations construction projects.3 In July 2004, an inspection team from the SSS went to petitioner corporations office to check its compliance with the SSS law. On July 22, 2004, petitioners told Sato that they could no longer afford to pay his wages, and he was advised to look for employment in other construction companies.4 Sato, however, found difficulty in finding a job because he had been blacklisted in other construction companies and was prevented from entering the project sites of petitioners. 5 Respondent Nilo Berdin (Berdin) was hired by petitioners in March 1991 as a steelman/laborer; respondent Anecito S. Parantar, Sr.6 (Parantar) was hired in February 1997 as a steelman; and respondent Romeo M. Lacida, Jr. 7 (Lacida) was hired in March 2001 as a laborer.8 At the start of their employment, they were required by petitioners to sign several documents purporting to be employment contracts.9 They immediately signed the documents without verifying their contents for fear of forfeiting their employment.10 Respondents were required to work from 7:00 a.m. until 5:00 p.m. While in the employ of petitioners, they devoted their time exclusively in the service of petitioners and were assigned to various construction projects of petitioners. They were tasked to set up steel bars used in the building foundation, to mix cement, and to perform other tasks required of them by petitioners. 11 On July 24, 2004, the project engineer of respondents Berdin, Parantar, and Lacida instructed them to affix their signatures on various documents. They refused to sign the documents because they were written in English, a language that they did not understand. Irked by their disobedience, the project engineer terminated their employment. On the same date, they were given their weekly wages. However, the wages that were paid to them were short of three (3) days worth of wages, as penalty for their refusal to sign the documents. The following day, they were not allowed to enter the work premises. 12 On July 26, 2004, respondents filed their respective complaints with the Regional Arbitration Branch of Cebu City for illegal dismissal, underpayment of wages (wage differentials), holiday pay, thirteenth (13th) month pay, and service incentive leave pay.13 Petitioners, on the other hand, admitted that respondents were employed by them and were assigned in their various construction projects. However, they denied that they illegally terminated respondents employment. According to petitioners, respondents abandoned their work when they failed to report for work starting on July 22, 2004. Petitioner corporation sent letters advising respondents to report for work, but they refused. Petitioner corporation maintained that respondents are still welcome, if they desire to work.14 As to respondent Sato, petitioner corporation alleged that it admonished respondent for having an illicit affair with another woman; that, in retaliation, Sato complained to the SSS for alleged non-remittance of his premium contributions; that Satos work was substandard; and that he also incurred unexplained absences and was constantly reprimanded for habitual tardiness. On July 27, 2005, the Labor Arbiter rendered a decision15 finding that respondents were illegally dismissed from employment. In lieu of reinstatement, due to the strained relations of the parties and as prayed for by respondents, each of them was granted separation pay equivalent to one (1) month pay for every year of service. The Labor Arbiter likewise awarded respondents claim fo r wage differentials, 13th month pay, holiday pay, and service incentive leave pay. The Labor Arbiter ruled in favor of granting the monetary claims of respondents because of petitioner corporations failure to effectively controvert the said claims by not presenting proof of payment, such as payrolls or vouchers.16 The dispositive portion of the decision reads: WHEREFORE, premises considered, judgment is hereby rendered ordering respondent [petitioner] E.G. & I. Construction Corporation to pay [respondents] the following:

1. Ananias P. Sato 2. Anecito Parantar 3. Nilo Berdin 4. Romeo M. Lacida, Jr. Total Award

P 107,250.00 120,944.00 152,144.00 138,594.00

P 518,932.00 ==========

The other claims and the case against respondent Edsel Galeos are dismissed for lack of merit. SO ORDERED.17 On appeal, the National Labor Relations Commission (NLRC) reversed the ruling of the Labor Arbiter in a decision18 dated July 31, 2006. The fallo of the NLRC decision reads: WHEREFORE, premises considered, the decision of the Labor Arbiter is hereby SET ASIDE and VACATED and a new one entered Dismissing the case. Respondents are however ordered to pay complainants proportionate 13th month [pay] for the year 2004 computed as follows: 1. Ananias Sato 3. Nilo Berdin 4. Romeo Laceda Total - P 3,180.00 - 2,700.00 - 2,520.00 P 10,920.00

2. Anecito Parantar - 2,520.00

SO ORDERED.19 In reversing the decision of the Labor Arbiter, the NLRC ratiocinated that, other than respondents bare allegation that they were dismissed, they failed to present a written notice of dismissal, 20 and that respondents individual complaints opted for the payment of separation pay instead of reinstatement.21 The NLRC opined that illegal dismissal was inconsistent with the prayer for separation pay instead of reinstatement. As for the monetary reliefs prayed for by respondents, the NLRC withdrew the grant of the same because of petitioner corporations submission of the c opies of payrolls, annexed to its memorandum on appeal.22 Respondents filed a motion for reconsideration. However, the same was denied in a resolution 23 dated October 9, 2006. Aggrieved, respondents filed a petition for certiorari under Rule 65 of the Rules of Court before the CA. On October 24, 2007, the CA rendered a Decision, the dispositive portion of which reads: WHEREFORE, premises considered, this petition is GRANTED. The Decision and Resolution of the NLRC, dated July 31, 2006 and October 9, 2006, respectively, are hereby REVERSED and SET ASIDE. The Decision of the labor arbiter, dated July 27, 2005, is REINSTATED. Costs against private respondents. SO ORDERED.24 The CA ruled that respondents were illegally dismissed. A written notice of dismissal is not a pre-requisite for a finding of illegal dismissal.25 Respondents did not abandon their work. They were refused entry into the companys project sites.26 As to the award of monetary claims, the CA decided in favor of the grant of the same. Petitioner corporation belatedly submitted copies of the weekly time record, payroll, and acknowledgement receipts of the 13th month pay. There was no explanation given why the said documents were not submitted before the Labor Arbiter in order to establish their authenticity and correctness, and to give respondents the opportunity to refute the entries therein.27 Hence, this petition. The issue to be resolved in this case is whether the CA erred in reinstating the decision of the Labor Arbiter, declaring that respondents were illegally terminated from employment by petitioner corporation, and that respondents are entitled to their monetary claims. We sustain the ruling of the CA. Petitioner corporation failed to prove that respondents were dismissed for just or authorized cause. In an illegal dismissal case, the onus probandi rests on the employer to prove that the dismissal of an employee is for a valid cause.28

For abandonment to exist, it is essential (a) that the employee must have failed to report for work or must have been absent without valid or justifiable reason; and (b) that there must have been a clear intention to sever the employer-employee relationship manifested by some overt acts.29 The employer has the burden of proof to show the employee's deliberate and unjustified refusal to resume his employment without any intention of returning. Mere absence is not sufficient. There must be an unequivocal intent on the part of the employee to discontinue his employment.30 In this case, petitioner corporation claims that respondent Sato committed unexplained absences on May 20, 24, and 25, 2004 and on June 7, 18, and 23, 2004. However, based on the findings of fact of the CA, respondent Sato worked on May 20, June 18 and 23, 2004. This was based on the weekly time record and payroll of respondent Sato that were presented by petitioner corporation in its appeal before the NLRC. On respondent Satos alleged absences on May 24 and 25 and on June 7, 2004, no time record and payroll documents were presented by petitioner corporation. With regard to respondents Berdin, Lacida, and Parantar, petitioner corporation alleges that they failed to report for work starting on July 22, 2004, and that petitioner even sent them letters advising them to report for work, but to no avail. Notwithstanding these assertions of petitioner corporation, we sustain the ruling of the CA. lawphi1 The reason why respondents failed to report for work was because petitioner corporation barred them from entering its construction sites. It is a settled rule that failure to report for work after a notice to return to work has been served does not necessarily constitute abandonment. 31 The intent to discontinue the employment must be shown by clear proof that it was deliberate and unjustified. 32 Petitioner corporation failed to show overt acts committed by respondents from which it may be deduced that they had no more intention to work. Respondents filing of the case for illegal dismissal barely four (4) days from their alleged abandonment is totally inconsistent with our known concept of what constitutes abandonment. We sustain the ruling of the CA on respondents money claims. As a rule, one who pleads payment has the burden of proving it. Even as the employee must allege non-payment, the general rule is that the burden rests on the employer to prove payment, rather than on the employee to prove non-payment. The reason for the rule is that the pertinent personnel files, payrolls, records, remittances, and other similar documents which will show that overtime, differentials, service incentive leave, and other claims of the worker have been paid are not in the possession of the worker but in the custody and absolute control of the employer. 33 In this case, the submission of petitioner corporation of the time records and payrolls of respondents only on their appeal before the NLRC is contrary to elementary precepts of justice and fair play. Respondents were not given the opportunity to check the authenticity and correctness of the same. Thus, we sustain the ruling of the CA in the grant of the monetary claims of respondents. We are guided by the time-honored principle that if doubts exist between the evidence presented by the employer and the employee, the scales of justice must be tilted in favor of the latter. It is the rule in controversies between a laborer and his master that doubts reasonably arising from the evidence, or in the interpretation of agreements and writing, should be resolved in the former's favor.34 WHEREFORE, in view of the foregoing, the Decision dated October 24, 2007 and the Resolution dated March 3, 2008 of the Court of Appeals in CA-G.R. SP No. 02316 are hereby AFFIRMED. Costs against the petitioners. SO ORDERED. ANTONIO EDUARDO B. NACHURA Associate Justice WE CONCUR: ANTONIO T. CARPIO Associate Justice Chairperson DIOSDADO M. PERALTA Associate Justice JOSE CATRAL MENDOZA Associate Justice ATTESTATION I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division. ROBERTO A. ABAD Associate Justice

ANTONIO T. CARPIO Associate Justice Chairperson, Second Division CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson's Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Divi sion. RENATO C. CORONA Chief Justice

Footnotes
1

Penned by Associate Justice Antonio L. Villamor, with Associate Justices Stephen C. Cruz and Amy C. Lazaro-Javier, concurring; rollo, pp. 40-54.
2

Id. at 56-58. CA Decision, id. at 41; NLRC decision, id. at 61-62; LA decision, id. at 142. CA Decision, id. at 41-42; NLRC decision, id. at 62; LA decision, id. at 142-143. CA Decision; id. at 42. Also known as Aniceto S. Parantar, Sr. in other documents. Also known as Romeo Laceda in other documents. CA Decision; rollo, p. 41. CA Decision, id. at 42; NLRC decision, id. at 62; LA decision, id. at 143. CA Decision, id. at 42. Id.; NLRC decision, id. at 62; LA decision, id. at 143. Id. Id. CA Decision, id. at 43; NLRC decision, id. at 62-63; LA decision, id. at 143-144. Penned by Labor Arbiter Ernesto F. Carreon; id. at 142-148. Id. at 145. Id. at 147-148.

10

11

12

13

14

15

16

17

18

Penned by Commissioner Oscar S. Uy, with Presiding Commissioner Gerardo C. Nograles and Commissioner Aurelio D. Menzon, concurring; id. at 61-67.
19

Id. at 66.

20

Id. at 63. Id. at 64. Id. at 65. Id. at 73-76. Id. at 53. Id. at 47. Id. Id. at 50.

21

22

23

24

25

26

27

28

THE LABOR CODE, Art. 277(b); Pepsi Cola Products Philippines, Inc. v. Santos, G.R. No. 165968, April 14, 2008, 551 SCRA 245, 252.
29

Padilla Machine Shop v. Javilgas, G.R. No. 175960, February 19, 2008, 546 SCRA 351, 357.

30

Uniwide Sales Warehouse Club v. National Labor Relations Commission, G.R. No. 154503, February 29, 2008, 547 SCRA 220, 239.
31

Id. Agabon v. National Labor Relations Commission, G.R. No. 158693, November 17, 2004, 442 SCRA 573, 606. Id. at 618. De Castro v. Liberty Broadcasting Network, Inc., G.R. No. 165153, September 23, 2008, 566 SCRA 238, 251. January 16, 2012

32

33

34

G.R. No. 173648

ABDULJUAHID R. PIGCAULAN,* Petitioner, vs. SECURITY and CREDIT NVESTIGATION, INC. and/or RENE AMBY REYES, Respondents. DECISION DEL CASTILLO, J.: It is not for an employee to prove non-payment of benefits to which he is entitled by law. Rather, it is on the employer that the burden of proving payment of these claims rests. This Petition for Review on Certiorari1 assails the February 24, 2006 Decision2 of the Court of Appeals (CA) in CA-G.R. SP No. 85515, which granted the petition for certiorari filed therewith, set aside the March 23, 20043 and June 14, 20044 Resolutions of the National Labor Relations Commission (NLRC), and dismissed the complaint filed by Oliver R. Canoy (Canoy) and petitioner Abduljuahid R. Pigcaulan (Pigcaulan) against respondent Security and Credit Investigation, Inc. (SCII) and its General Manager, respondent Rene Amby Reyes. Likewise assailed is the June 28, 2006 Resolution5 denying Canoys and Pigcaulans Motion for Reconsideration.6 Factual Antecedents Canoy and Pigcaulan were both employed by SCII as security guards and were assigned to SCIIs different clients. Subsequently , however, Canoy and Pigcaulan filed with the Labor Arbiter separate complaints 7 for underpayment of salaries and non-payment of overtime, holiday, rest day, service incentive leave and 13th month pays. These complaints were later on consolidated as they involved the same causes of action.

Canoy and Pigcaulan, in support of their claim, submitted their respective daily time records reflecting the number of hours served and their wages for the same. They likewise presented itemized lists of their claims for the corresponding periods served. Respondents, however, maintained that Canoy and Pigcaulan were paid their just salaries and other benefits under the law; that the salaries they received were above the statutory minimum wage and the rates provided by the Philippine Association of Detective and Protective Agency Operators (PADPAO) for security guards; that their holiday pay were already included in the computation of their monthly salaries; that they were paid additional premium of 30% in addition to their basic salary whenever they were required to work on Sundays and 200% of their salary for work done on holidays; and, that Canoy and Pigcaulan were paid the corresponding 13th month pay for the years 1998 and 1999. In support thereof, copies of payroll listings 8 and lists of employees who received their 13th month pay for the periods December 1997 to November 1998 and December 1998 to November 19999 were presented. In addition, respondents contended that Canoys and Pigcaulans monetary claim s should only be limited to the past three years of employment pursuant to the rule on prescription of claims. Ruling of the Labor Arbiter Giving credence to the itemized computations and representative daily time records submitted by Canoy and Pigcaulan, Labor Arbiter Manuel P. Asuncion awarded them their monetary claims in his Decision10 dated June 6, 2002. The Labor Arbiter held that the payroll listings presented by the respondents did not prove that Canoy and Pigcaulan were duly paid as same were not signed by the latter or by any SCII officer. The 13th month payroll was, however, acknowledged as sufficient proof of payment, for it bears Canoys and Pigcaulans signatures. Thus, without indicating any detailed computation of the judgment award, the Labor Arbiter ordered the payment of overtime pay, holiday pay, service incentive leave pay and proportionate 13th month pay for the year 2000 in favor of Canoy and Pigcaulan, viz: WHEREFORE, the respondents are hereby ordered to pay the complainants: 1) their salary differentials in the amount of P166,849.60 for Oliver Canoy and P121,765.44 for Abduljuahid Pigcaulan; 2) the sum of P3,075.20 for Canoy and P2,449.71 for Pigcaulan for service incentive leave pay and; [3]) the sum of P1,481.85 for Canoy andP1,065.35 for Pigcaulan as proportionate 13th month pay for the year 2000. The rest of the claims are dismissed for lack of sufficient basis to make an award. SO ORDERED.11 Ruling of the National Labor Relations Commission Respondents appealed to the NLRC. They alleged that there was no basis for the awards made because aside from the self-serving itemized computations, no representative daily time record was presented by Canoy and Pigcaulan. On the contrary, respondents asserted that the payroll listings they submitted should have been given more probative value. To strengthen their cause, they attached to their Memorandum on Appeal payrolls 12 bearing the individual signatures of Canoy and Pigcaulan to show that the latter have received their salaries, as well as copies of transmittal letters 13 to the bank to show that the salaries reflected in the payrolls were directly deposited to the A TM accounts of SCIIs employees. The NLRC, however, in a Resolution14 dated March 23, 2004, dismissed the appeal and held that the evidence show underpayment of salaries as well as non-payment of service incentive leave benefit. Accordingly, the Labor Arbiters Decision was sustained. The motion for reconsideration thereto was likewise dismissed by the NLRC in a Resolution 15 dated June 14, 2004. Ruling of the Court of Appeals In respondents petition for certiorari with prayer for the issuance of a temporary restraining order and preliminary injunction16 before the CA, they attributed grave abuse of discretion on the part of the NLRC in finding that Canoy and Pigcaulan are entitled to salary differentials, service incentive leave pay and proportionate 13th month pay and in arriving at amounts without providing sufficient bases therefor. The CA, in its Decision17 dated February 24, 2006, set aside the rulings of both the Labor Arbiter and the NLRC after noting that there were no factual and legal bases mentioned in the questioned rulings to support the conclusions made. Consequently, it dismissed all the monetary claims of Canoy and Pigcaulan on the following rationale: First. The Labor Arbiter disregarded the NLRC rule that, in cases involving money awards and at all events, as far as practicable, the decision shall embody the detailed and full amount awarded. Second. The Labor Arbiter found that the payrolls submitted by SCII have no probative value for being unsigned by Canoy, when, in fact, said payrolls, particularly the payrolls from 1998 to 1999 indicate the individual signatures of Canoy.

Third. The Labor Arbiter did not state in his decision the substance of the evidence adduced by Pigcaulan and Canoy as well as the laws or jurisprudence that would show that the two are indeed entitled to the salary differential and incentive leave pays. Fourth. The Labor Arbiter held Reyes liable together with SCII for the payment of the claimed salaries and benefits despite the absence of proof that Reyes deliberately or maliciously designed to evade SCIIs alleged financial obligation; hence the Labo r Arbiter ignored that SCII has a corporate personality separate and distinct from Reyes. To justify solidary liability, there must be an allegation and showing that the officers of the corporation deliberately or maliciously designed to evade the financial obligation of the corporation.18 Canoy and Pigcaulan filed a Motion for Reconsideration, but same was denied by the CA in a Resolution 19 dated June 28, 2006. Hence, the present Petition for Review on Certiorari. Issues The petition ascribes upon the CA the following errors: I. The Honorable Court of Appeals erred when it dismissed the complaint on mere alleged failure of the Labor Arbiter and the NLRC to observe the prescribed form of decision, instead of remanding the case for reformation of the decision to include the desired detailed computation. II. The Honorable Court of Appeals erred when it [made] complainants suffer the consequences of the alleged nonobservance by the Labor Arbiter and NLRC of the prescribed forms of decisions considering that they have complied with all needful acts required to support their claims. III. The Honorable Court of Appeals erred when it dismissed the complaint allegedly due to absence of legal and factual [bases] despite attendance of substantial evidence in the records. 20 It is well to note that while the caption of the petition reflects both the names of Canoy and Pigcaulan as petitioners, it appears from its body that it is being filed solely by Pigcaulan. In fact, the Verification and Certification of Non-Forum Shopping was executed by Pigcaulan alone. In his Petition, Pigcaulan submits that the Labor Arbiter and the NLRC are not strictly bound by the rules. And even so, the rules do not mandate that a detailed computation of how the amount awarded was arrived at should be embodied in the decision. Instead, a statement of the nature or a description of the amount awarded and the specific figure of the same will suffice. Besides, his and Canoys claims were supported by substantial evidence in the form of the handwritten detailed c omputations which the Labor Arbiter termed as "representative daily time records," showing that they were not properly compensated for work rendered. Thus, the CA should have remanded the case instead of outrightly dismissing it. In their Comment,21 respondents point out that since it was only Pigcaulan who filed the petition, the CA Decision has already become final and binding upon Canoy. As to Pigcaulans arguments, respondents submit that they were able to present sufficient evidence to prove payment of just salaries and benefits, which bits of evidence were unfortunately ignored by the Labor Arbiter and the NLRC. Fittingly, the CA reconsidered these pieces of evidence and properly appreciated them. Hence, it was correct in dismissing the claims for failure of Canoy and Pigcaulan to discharge their burden to disprove payment. Pigcaulan, this time joined by Canoy, asserts in his Reply22 that his filing of the present petition redounds likewise to Canoys benefit since their complaints were consolidated below. As such, they maintain that any kind of disposition made in favor or against either of them would inevitably apply to the other. Hence, the institution of the petition solely by Pigcaulan does not render the assailed Decision final as to Canoy. Nonetheless, in said reply they appended Canoys affidavit 23 where he verified under oath the contents and allegations of the petition filed by Pigcaulan and also attested to the authenticity of its annexes. Canoy, however, failed to certify that he had not filed any action or claim in another court or tribunal involving the same issues. He likewise explains in said affidavit that his absence during the preparation and filing of the petition was caused by severe financial distress and his failure to inform anyone of his whereabouts. Our Ruling The assailed CA Decision is considered final as to Canoy. We have examined the petition and find that same was filed by Pigcaulan solely on his own behalf. This is very clear from the petitions prefatory which is phrased as follows: COMES NOW Petitioner Abduljuahid R. Pigcaulan, by counsel, unto this Honorable Court x x x. (Emphasis supplied.)

Also, under the heading "Parties", only Pigcaulan is mentioned as petitioner and consistent with this, the body of the petition refers only to a "petitioner" and never in its plural form "petitioners". Aside from the fact that the Verification and Certification of Non-Forum Shopping attached to the petition was executed by Pigcaulan alone, it was plainly and particularly indicated under the name of the lawyer who prepared the same, Atty. Josefel P. Grageda, that he is the "Counsel for Petitioner Adbuljuahid Pigcaulan" only. In view of these, there is therefore, no doubt, that the petition was brought only on behalf of Pigcaulan. Since no appeal from the CA Decision was brought by Canoy, same has already become final and executory as to him. Canoy cannot now simply incorporate in his affidavit a verification of the contents and allegations of the petition as he is not one of the petitioners therein. Suffice it to state that it would have been different had the said petition been filed in behalf of both Canoy and Pigcaulan. In such a case, subsequent submission of a verification may be allowed as non-compliance therewith or a defect therein does not necessarily render the pleading, or the petition as in this case, fatally defective. 24 "The court may order its submission or correction, or act on the pleading if the attending circumstances are such that strict compliance with the Rule may be dispensed with in order that the ends of justice may be served thereby. Further, a verification is deemed substantially complied with when one who has ample knowledge to swear to the truth of the allegations in the complaint or petition signs the verification, and when matters alleged in the petition have been made in good faith or are true and correct."25 However, even if it were so, we note that Canoy still failed to submit or at least incorporate in his affidavit a certificate of non-forum shopping. The filing of a certificate of non-forum shopping is mandatory so much so that non-compliance could only be tolerated by special circumstances and compelling reasons.26 This Court has held that when there are several petitioners, all of them must execute and sign the certification against forum shopping; otherwise, those who did not sign will be dropped as parties to the case. 27 True, we held that in some cases, execution by only one of the petitioners on behalf of the other petitioners constitutes substantial compliance with the rule on the filing of a certificate of non-forum shopping on the ground of common interest or common cause of action or defense.28 We, however, find that common interest is not present in the instant petition. To recall, Canoys and Pigcaulans complaints were consolidated because they both sought the same reliefs against the same respondents. This does not, however, mean that they share a common interest or defense. The evidence required to substantiate their claims may not be the same. A particular evidence which could sustain Canoys action may not effectively serve as sufficient to support Pigcaulans claim. Besides, assuming that the petition is also filed on his behalf, Canoy failed to show any reasonable cause for his failure to join Pigcaulan to personally sign the Certification of Non-Forum Shopping. It is his duty, as a litigant, to be prudent in pursuing his claims against SCII, especially so, if he was indeed suffering from financial distress. However, Canoy failed to advance any justifiable reason why he did not inform anyone of his whereabouts when he knows that he has a pending case against his former employer. Sadly, his lack of prudence and diligence cannot merit the courts consideration or sympathy. It must be emphasized at this point that procedural rules should not be ignored simply because their non-observance may result in prejudice to a partys substantial rights. The Rules of Court should be followed except only for the most persuasive of reasons. 29 Having declared the present petition as solely filed by Pigcaulan, this Court shall consider the subsequent pleadings, although apparently filed under his and Canoys name, as solely filed by the former. There was no substantial evidence to support the grant of overtime pay. The Labor Arbiter ordered reimbursement of overtime pay, holiday pay, service incentive leave pay and 13th month pay for the year 2000 in favor of Canoy and Pigcaulan. The Labor Arbiter relied heavily on the itemized computations they submitted which he considered as representative daily time records to substantiate the award of salary differentials. The NLRC then sustained the award on the ground that there was substantial evidence of underpayment of salaries and benefits. We find that both the Labor Arbiter and the NLRC erred in this regard. The handwritten itemized computations are self-serving, unreliable and unsubstantial evidence to sustain the grant of salary differentials, particularly overtime pay. Unsigned and unauthenticated as they are, there is no way of verifying the truth of the handwritten entries stated therein. Written only in pieces of paper and solely prepared by Canoy and Pigcaulan, these representative daily time records, as termed by the Labor Arbiter, can hardly be considered as competent evidence to be used as basis to prove that the two were underpaid of their salaries. We find nothing in the records which could substantially support Pigcaulans contention that he had rendered service beyond eight hours to entitle him to overtime pay and during Sundays to entitle him to restday pay. Hence, in the absence of any concrete proof that additional service beyond the normal working hours and days had indeed been rendered, we cannot affirm the grant of overtime pay to Pigcaulan. Pigcaulan is entitled to holiday pay, service incentive leave pay and proportionate 13th month pay for year 2000. However, with respect to the award for holiday pay, service incentive leave pay and 13th month pay, we affirm and rule that Pigcaulan is entitled to these benefits. Article 94 of the Labor Code provides that:

ART. 94. RIGHT TO HOLIDAY PAY. (a) Every worker shall be paid his regular daily wage during regular holidays, except in retail and service establishments regularly employing less than ten (10) workers; xxxx While Article 95 of the Labor Code provides: ART. 95. RIGHT TO SERVICE INCENTIVE LEAVE. (a) Every employee who has rendered at least one year of service shall be entitled to a yearly service incentive of five days with pay. xxxx Under the Labor Code, Pigcaulan is entitled to his regular rate on holidays even if he does not work. 30 Likewise, express provision of the law entitles him to service incentive leave benefit for he rendered service for more than a year already. Furthermore, under Presidential Decree No. 851,31 he should be paid his 13th month pay. As employer, SCII has the burden of proving that it has paid these benefits to its employees.32 SCII presented payroll listings and transmittal letters to the bank to show that Canoy and Pigcaulan received their salaries as well as benefits which it claimed are already integrated in the employees monthly salaries. However, the documents presented do not prove SCIIs allegation. SCII failed to show any other concrete proof by means of records, pertinent files or similar documen ts reflecting that the specific claims have been paid. With respect to 13th month pay, SCII presented proof that this benefit was paid but only for the years 1998 and 1999. To repeat, the burden of proving payment of these monetary claims rests on SCII, being the employer. It is a rule that one who pleads payment has the burden of proving it. "Even when the plaintiff alleges non-payment, still the general rule is that the burden rests on the defendant to prove payment, rather than on the plaintiff to prove nonpayment."33Since SCII failed to provide convincing proof that it has already settled the claims, Pigcaulan should be paid his holiday pay, service incentive leave benefits and proportionate 13th month pay for the year 2000. The CA erred in dismissing the claims instead of remanding the case to the Labor Arbiter for a detailed computation of the judgment award. Indeed, the Labor Arbiter failed to provide sufficient basis for the monetary awards granted. lawphi1 Such failure, however, should not result in prejudice to the substantial rights of the party.1avvphi1 While we disallow the grant of overtime pay and restday pay in favor of Pigcaulan, he is nevertheless entitled, as a matter of right, to his holiday pay, service incentive leave pay and 13th month pay for year 2000. Hence, the CA is not correct in dismissing Pigcaulans claims in its entirety. Consistent with the rule that all money claims arising from an employer-employee relationship shall be filed within three years from the time the cause of action accrued,34 Pigcaulan can only demand the amounts due him for the period within three years preceding the filing of the complaint in 2000. Furthermore, since the records are insufficient to use as bases to properly compute Pigcaulans claims, the case should be remanded to the Labor Arbiter for a detailed computation of the monetary benefits due to him. WHEREFORE, the petition is GRANTED. The Decision dated February 24, 2006 and Resolution dated June 28, 2006 of the Court of Appeals in CA-G.R. SP No. 85515 are REVERSED and SET ASIDE. Petitioner Abduljuahid R. Pigcaulan is hereby declared entitled to holiday pay and service incentive leave pay for the years 1997-2000 and proportionate 13th month pay for the year 2000. The case is REMANDED to the Labor Arbiter for further proceedings to determine the exact amount and to make a detailed computation of the monetary benefits due Abduljuahid R. Pigcaulan which Security and Credit Investigation Inc. should pay without delay. SO ORDERED. MARIANO C. DEL CASTILLO Associate Justice WE CONCUR: RENATO C. CORONA Chief Justice Chairperson TERESITA J. LEONARDO-DE CASTRO Associate Justice ROBERTO A. ABAD** Associate Justice

MARTIN S. VILLARAMA, JR. Associate Justice CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division. RENATO C. CORONA Chief Justice

Footnotes
*

Originally captioned as Oliver Canoy and Abduljuahid Pigcaulan, petitioners vs. Security and Credit Investigation Inc. and/or Rene Amby Reyes, respondents. The Court, however, drops Oliver Canoy from the caption consistent with the Courts ruling herein.
**

Per raffle dated January 10, 2012. Rollo, pp. 10-26.

CA rollo, pp. 219-225; penned by Associate Justice Santiago Javier Ranada and concurred in by Associate Justices Roberto A. Barrios and Mario L. Guaria III.
3

Id. at 18-25; penned by Commissioner Tito F. Genilo and concurred in by Presiding Commissioner Lourdes C. Javier and Commissioner Ernesto C. Verceles.
4

Id. at 27-28. Id. at 250. Id. at 229-234.

Canoys complaint was docketed as NLRC-NCR Case No. 00-03-01409-2000 while Pigcaulans complaint was docketed as NLRC-NCR Case No. 00-03-01782-2000.
8

Annex "1" of SCIIs Position Paper, CA rollo, pp. 59-63 and 70-76. Annex "2" of SCIIs Position Paper, id. at 64-65 and 77-78. Id. at 83-87. Id. at 87. Annex "2"-"2-OO" of SCIIs Memorandum on Appeal, id. at 101-142. Annex "4"-"31" of SCIIs Memorandum on Appeal, id. at 150-205. Id. at 18-25. Id. at 27-28. Id. at 2-16.

10

11

12

13

14

15

16

17

Id. at 219-225. Id. at 223-224. Id. at 250. Rollo, p. 18. Id. at 46-52. Id. at 57-61. Annex "A" of the petitioners Reply, id. at 62-63.

18

19

20

21

22

23

24

Mactan-Cebu International Airport Authority v. Heirs of Estanislao Mioza, G.R. No. 186045, February 2, 2011, 641 SCRA 520, 528 citing Altres v. Empleo, G.R. No. 180986, December 10, 2008, 573 SCRA 583, 597.
25

Id. Mandaue Galleon Trade, Inc. v. Isidto, G.R. No. 181051, July 5, 2010, 623 SCRA 414, 421.

26

27

Traveo v. Bobongon Banana Growers Multi-Purpose Cooperative, G.R. No. 164205, September 3, 2009, 598 SCRA 27, 36 citing Altres v. Empleo, G.R. No. 180986, December 10, 2008, 573 SCRA 583, 597.
28

Northeastern College Teachers and Employees Association v. Northeastern College, Inc., G.R. No. 152923, January 19, 2009, 576 SCRA 149, 179; Heirs of Domingo Hernandez, Sr. v. Mingoa, Sr., G.R. No. 146548, December 18, 2009, 608 SCRA 394, 406-407.
29

Pyro Copper Mining Corporation v. Mines Adjudication Board-Department of Environment and Natural Resources, G.R. No. 179674, July 28, 2009, 594 SCRA 195, 211-212.
30

Labadan v. Forest Hills Academy, G.R. No. 172295, December 23, 2008, 575 SCRA 262, 268. Requiring All Employers To Pay Their Employees A 13th-Month Pay. Saberola v. Suarez, G.R. No. 151227, July 14, 2008, 558 SCRA 135, 146-147. Id. Labor Code, Article 291.

31

32

33

34

BENEFITS

G.R. No. 162372

SEPTEMBER 11, 2012

GOVERNMENT SERVICE INSURANCE SYSTEM(GSIS), HERMOGENES D. CONCEPCION, .JR., WINSTON F. GARCIA, REYNALDO P. PALMIERY, LEOVIGILDO P. ARRELLANO, ELMER T. BAUTISTA, LEONORA V. DE JESUS, FULGENCIO S. FACTORAN, FLORINO O. IBAEZ, AIDA C. NOCETE, AURORA P. MATHAY, ENRIQUETA DISUANCO, AMALIO MALLARI, LOURDES PATAG, RICHARD M. MARTINEZ, ASUNCION C. SINDAC, GLORIA D. CAEDO, ROMEO C. QUILATAN, ESPERANZA FALLORINA, LOLITA BACANI, ARNULFO MADRIAGA, LEOCADIA S. FAJARDO, BENIGNO BULAONG, SHIRLEY D. FLORENTINO, and LEA M. MENDIOLA, Petitioners, vs. COMMISSION ON AUDIT (COA), AMORSONIA B. ESCARDA, MA. CRISTINA D. DIMAGIBA, and REYNALDO P. VENTURA, Respondents.

RESOLUTION LEONARDO-DE CASTRO, J.: Romeo C. Quilatan, in his capacity as one of the petitioners in GSIS, et al. v. Commission on Audit, et al., and in representation of his fellow Government Service Insurance System (GSIS) officers and employees who retired under the GSIS RFP (Retirement/Financial Plan), filed a Motion for Clarification and Reconsideration dated November 7, 2011, and a Manifestation to Supplement the Motion for Clarification and Reconsiderationdated January 20, 2012, of this Courts October 11, 2011 Decision in the said case. On May 17, 2012, Quilatan filed a Final Memorandum and Summary of Arguments, which he followedup on August 28, 2012, with another Manifestation to Supplement the Final Memorandum and Summary of Arguments. On November 11, 2011, Federico Pascual, Daniel N. Mijares, Elvira U. Geronimo, Aurora P. Mathay, Manuel P. Bausa, Rustico G. Delos Angeles, Lourdes Delos Angeles, Sonia S. Sindac, Marina Santamaria, the Estate of Lourdes G. Patag represented by Napolen Patag, and Vicente Villegas (Movants Federico Pascual, et al.), who are some of the payees named in the decision, filed an Entry of Appearance with Motion for Leave of Court to Admit the Motion for Clarification filed on the same day. The Movants Federico Pascual, et al. later on furnished Quilatan a copy of this Motion, as per their Compliance/Manifestation dated July 20, 2012, which this Court notes. On February 22, 2012, Quilatan filed a Manifestation and Motion to Defer Execution of Judgment, alleging that GSIS, the main petitioner in the case, which no longer contested this Courts October 11, 2011 Decision, had started to send out demand letters from the payees, asking them to refund the amounts they had received as retirement benefits under the GSIS RFP. In his Manifestations, Memorandum, and Motion for Clarification and Reconsideration of this Courts October 11, 2011 Decision, Quilatan raises several grounds, all of which were already addressed in said Decision. Movants Federico Pascual, et al., however, raised in their Motion for Clarification, a new issue, which this Court will address, to wit: Whether or not the payees should be compelled to return the retirement benefits they had received under the GSIS RFP. In essence, the Movants Federico Pascual, et al. are asking this Court to reconsider our Decision in so far as their liability, as the payees, to return the benefits they had already received, by applying our rulings in Molen, Jr. v. Commission on Audit,1 De Jesus v. Commission on Audit,2 Magno v. Commission on Audit,3 Baybay Water District v. Commission on Audit,4Barbo v. Commission on Audit,5 Bases Conversion and Development Authority v. Commission on Audit,6 among others, wherein, despite this Courts disapproval of the allowances and/or benefits the payees therein received, for being contrary to the law applicable in those cases, this Court did not require such payees to refund the monies they had received in good faith. On April 11, 2012, the public respondents, through the Office of the Solicitor General, commented and agreed with the Movants Federico Pascual, et al. that it would be an injustice if they were ordered to refund the retirement benefits they had received more than a decade ago. The Court notes the Comment filed by the GSIS on July 13, 2012, in compliance with our March 13, 2012 Resolution, where GSIS states that since it did not move for the reconsideration of this Courts October 11, 2011 Decision, it was bound by such dec ision. As far as it was concerned, the said decision became final after the lapse of fifteen days from receipt of said Decision on October 21, 2011. GSIS adds that since it already conceded that it had no power to adopt the GSIS RFP, and decided to accept the notices of disallowance, it had no reason to continue disregarding such notices, the implementation of which was never enjoined. As for Quilatan, GSIS claims that he has no legal standing to represent the payees as he has no interest in the main controversy, i.e., the power of GSIS to adopt the RFP, and because he was not prejudiced by the decision on the case. Moreover, the GSIS avers, Quilatan had already retired from the GSIS; thus, he cannot represent it and argue its case before this Court. Anent the payees, some of whom are the Movants now before us, the GSIS posits that they did not timely intervene in this case despite knowledge of its pendency before this Court, which lasted for almost eight years. According to the GSIS, giving due course to the motions would allow a form of intervention by persons who were not parties to the case after the opportunity for them to do so had lapsed. The Court finds merit in the aforesaid position of the GSIS. Quilatans Motion for Clarification and Reconsideration and the Movants Federico Pascual, et al.s Motion for Clarification, which in effect seeks a reconsideration of the Courts Decision dated October 11, 2011, should be denied for lack of the Movants legal standing to question the said Decision. Furthermore, even if the substantive issues and arguments raised by the Movants Federico Pascual, et al. are considered, there is no justifiable ground to reverse the Courts Decision. While it is true, as claimed by the Movants Federico Pascual, et al., that based on prevailing jurisprudence, disallowed benefits received in good faith need not be refunded, the case before us may be distinguished from all the cases cited by Movants Federico Pascual, et al. because the monies involved here are retirement benefits.

Retirement benefits belong to a different class of benefits. All the cases cited by the Movants Federico Pascual, et al. involved benefits such as cash gifts, representation allowances, rice subsidies, uniform allowances, per diems, transportation allowances, and the like. The foregoing allowances or fringe benefits are given in addition to ones salary, either to reimburse him for expenses he might have incurred in relation to his work, or as a form of supplementary compensation. On the other hand, retirement benefits are given to one who is separated from employment either voluntarily or compulsorily. Such benefits, subject to certain requisites imposed by law and/or contract, are given to the employee on the assumption that he can no longer work. They are also given as a form of reward7 for the services he had rendered. The purpose is not to enrich him but to help him during his non-productive years. Our Decision dated October 11, 2011 does not preclude Movants Federico Pascual, et al. from receiving retirement benefits provided by existing retirement laws.1wphi1 What they are prohibited from getting are the additional benefits under the GSIS RFP, which we found to have emanated from a void and illegal board resolution. To allow the payees to retain the disallowed benefits would amount to their unjust enrichment to the prejudice of the GSIS, whose avowed purpose is to maintain its actuarial solvency to finance the retirement, disability, and life insurance benefits of its members. 8 This Court, elucidating on the concept of unjust enrichment in University of the Philippines v. PHILAB Industries, Inc.,9 said: Unjust enrichment is a term used to depict result or effect of failure to make remuneration of or for property or benefits received under circumstances that give rise to legal or equitable obligation to account for them; to be entitled to remuneration, one must confer benefit by mistake, fraud, coercion, or request. Unjust enrichment is not itself a theory of reconvey. Rather, it is a prerequisite for the enforcement of the doctrine of restitution. 10 The statutory basis for unjust enrichment is found in Article 22 of the Civil Code, which provides: Every person who through an act of performance by another, or any other means, acquires or comes into possession of something at the expense of the latter without just or legal ground, shall return the same to him. Under the foregoing provision, there is unjust enrichment when: 1. A person is unjustly benefited; and 2. Such benefit is derived at the expense of or with damages to another. 11 In Car Cool Philippines, Inc. v. Ushio Realty and Development Corporation12 we said: There is unjust enrichment when a person unjustly retains a benefit to the loss of another, or when a person retains money or property of another against the fundamental principles of justice, equity and good conscience. x x x. 13 (Citation omitted.) In the same case, we added that "there is no unjust enrichment when the person who will benefit has a valid claim to such benefit."14 Because the GSIS RFP, which we repeat, is contrary to law, thus void and of no effect, the enrichment of the payees is without just or legal ground. Therefore, the payees have no valid claim to the benefits they received under the GSIS RFP. The payees received the disallowed benefits with the mistaken belief that they were entitled to the same under the GSIS RFP. Article 1456 of the Civil Code, which is applicable in this case, reads: If property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an implied trust for the benefit of the person from whom the property comes. Construing the above provision, this Court, in Aznar Brothers Realty Company v. Aying,15 quoted established jurisprudence as follows: A deeper analysis of Article 1456 reveals that it is not a trust in the technical sense for in a typical trust, confidence is reposed in one person who is named a trustee for the benefit of another who is called the cestui que trust, respecting property which is held by the trustee for the benefit of the cestui que trust. A constructive trust, unlike an express trust, does not emanate from, or generate a fiduciary relation. While in an express trust, a beneficiary and a trustee are linked by confidential or fiduciary relations, in a constructive trust, there is neither a promise nor any fiduciary relation to speak of and the so-called trustee neither accepts any trust nor intends holding the property for the beneficiary.1wphi1 xxxx

x x x Implied trusts are those which, without being expressed, are deducible from the nature of the transaction as matters of intent or which are superinduced on the transaction by operation of law as matters of equity, independently of the particular intention of the parties. x x x16 Policarpio v. Court of Appeals17 expounded on the doctrine of implied trust in relation to another provision of the Civil Code. We ruled in the said case that a constructive trust is substantially an appropriate remedy against unjust enrichment, as follows: And specifically applicable to the case at bar is the doctrine that a constructive trust is substantially an appropriate remedy against unjust enrichment. It is raised by equity in respect of property, which has been acquired by fraud, or where although acquired originally without fraud, it is against equity that it should be retained by the person holding it.18 Thus, the payees, who acquired the retirement benefits under the GSIS RFP, are considered as trustees of the disallowed amounts, as although they committed no fraud in obtaining these benefits, it is against equity and good conscience for them to continue holding on to them. WHEREFORE, premises considered, the Motion for Clarification and Reconsideration and Manifestation to Supplement the Motion for Clarification and Reconsideration filed by Romeo C. Quilatan and the Motion for Clarification (which we treat as a Motion for Reconsideration) filed by Federico Pascual, Daniel N. Mijares, Elvira U. Geronimo, Aurora P. Mathay, Manuel P. Bausa, Rustico G. Delos Angeles, Lourdes Delos Angeles, Sonia S. Sindac, Marina Santamaria, the Estate of Lourdes G. Patag represented by Napolen Patag, and Vicente Villegas are DENIED. SO ORDERED: TERESITA J. LEONARDO-DE CASTRO Associate Justice WE CONCUR: MARIA LOURDES P.A. SERENO Chief Justice

ANTONIO T. CARPIO Associate Justice ARTURO D. BRION Associate Justice LUCAS P. BERSAMIN Associate Justice ROBERTO A. ABAD Associate Justice JOSE PORTUGAL PEREZ Associate Justice BIENVENIDO L. REYES Associate Justice

PRESBITERO J. VELASCO, JR. Associate Justice DIOSDADO M. PERALTA Associate Justice MARIANO C. DEL CASTILLO Associate Justice MARTIN S. VILLARAMA, JR. Associate Justice JOSE CATRAL MENDOZA Associate Justice ESTELA M. PERLAS-BERNABE Associate Justice

CERTIFICATION Pursuant to Article VI 11, Section 13 of the Constitution, I certify that the conclusions in the above Resolution had been reached in consultation before the case was assigned to the writer of the opinion of the Court. MARIA LOURDES P.A. SERENO Chief Justice

Footnotes
1

493 Phil. 874 (2005). 451 Phil. 812 (2003). G.R. No. 149941, August 28, 2007, 531 SCRA 339. 425 Phil. 326 (2002). G.R. No. 157542, October 10, 2008, 568 SCRA 302. G.R. No. 178160, February 26, 2009, 580 SCRA 295. Santos v. Court of Appeals, 399 Phil. 298, 307 (2000). Government Service Insurance System v. The City Assessor of Iloilo City , 526 Phil. 145, 149 (2006). 482 Phil. 693 (2004). Id. at 710. Tamio v. Ticson, 485 Phil. 434, 443 (2004). 515 Phil. 376 (2006). Id. at 384. Id. 497 Phil. 788 (2005). Id. at 799-800. 336 Phil. 329 (1997). Id. at 342.

10

11

12

13

14

15

16

17

18

A.M. No. 2011-05-SC

September 6, 2011

Re: Deceitful Conduct of Ignacio S. del Rosario, Cash Clerk III, Records and Miscellaneous Matter Section, Checks Disbursement Division, FMO-OCA. DECISION PER CURIAM: On April 19, 2011, the Office of the Court Administrator (OCA) was furnished a copy of the letter-complaint dated April 6, 2011 written by Noel G. Primo, a retired sheriff of the Regional Trial Court, Branch 65, Bulan, Sorsogon. Primos letter was addressed to Ignacio S. del Rosario, Cash Clerk III of the Records and Miscellaneous Matter Section, Checks Disbursement Division, Fiscal Management Office-OCA of the Supreme Court, demanding the return of a sum of money that was entrusted to him by Primo. In the letter, Primo accused Del Rosario of dishonesty, grave abuse of trust and confidence, and conduct extremely prejudicial to a civil servant, "specifically a SUPREME COURT EMPLOYEE."1

According to Primo, Del Rosario is a friend who offered to help him settle his financial liability with the Court so he could process his retirement papers. On November 3, 2010, Primo entrusted to Del Rosario the amount ofP34,000.00. It was agreed that a portion of this amount (P32,421.43) would be paid by Del Rosario to the Courts cashier while the remaining amount would belong to Del Rosario as a token for the services rendered to Primo. From December 2010 to January 2011, Del Rosario represented to Primo that he could process his retirement papers with the Government Service Insurance System (GSIS). Del Rosario also blamed the GSIS for the slow processing of Primos retirement papers. Primo subsequently discovered that his retirement papers were still with the Supreme Court. He also discovered that Del Rosario did not pay the formers financial liability with the Court. Primo dem anded from Del Rosario the return of the P32,421.43. Despite Del Rosarios assurances and Primos repeated demands, the money was not returned. Court Administrator Jose Midas P. Marquez indorsed the matter for appropriate action to the Office of Administrative Services (OAS) which directed Del Rosario to comment on the letter-complaint. In his Comment, Del Rosario admitted receiving P34,000.00 from Primo. He claimed that he failed to pay the Courts cashier as he was compelled to use the money to pay for his sons hospitalization. He also claimed that with the help of his relatives and friends, he raised the money and fully paid the financial liability of Primo with the Court. Del Rosario asked that the present matter be considered settled, and that the complaint against him be dismissed considering the restitution and payment made. Primo at the same time manifested that he no longer wanted to pursue his complaint against Del Rosario in light of the restitution and payment made. After evaluation of the letter-complaint and Del Rosarios comment, the OAS found that Del Rosario violated the Code of Conduct and Ethical Standards for Public Officials and Employees;2 Canon I (Fidelity to Duty)3 of the Code of Conduct for Court Personnel, for not returning the amount in excess of P32,421.43; and Canon IV, Section 74 (Performance of Duties) of the same Code, for doing work outside the scope of his duties as Cash Clerk III. For his actions, the OAS found him administratively liable for dishonesty and conduct prejudicial to the best interest of the service. The OAS reasoned: Del Rosarios actuation amounts to dishonesty and conduct prejudicial to the best interest of the service. Inasmuch as Del Ro sario was fully aware that the money was only entrusted to him for payment since Primo could not personally tender payment due to the long distance in going to Manila and of his present health condition, the former, however, appropriated it instead for his personal use to remedy the financial needs of his family. This is a form of deceit and betrayal of trust. The Court defines dishonesty as a "disposition to lie, cheat, deceive, or defraud; untrustworthiness; lack of integrity; lack of honesty; probity or integrity in principle; lack of fairness and straightforwardness; disposition to defraud, deceive or betray.5 The OAS recommended: a. That Mr. Ignacio S. Del Rosario, Cash Clerk III, Records and Miscellaneous Matter Section, Checks Disbursement Division, FMO-OCA be held liable for serious dishonesty and conduct prejudicial to the best interest of the service; and b. That he be suspended from office for six (6) months without pay, with a stern warning that a repetition of the same or similar acts shall be dealt with more severely.6 The Courts Ruling We agree with the findings of the OAS that Del Rosarios actions constituted dishonesty and demonstrated conduct prejudicial to the best interest of the service. We cannot, however, accept the recommended penalty imposed by the OAS. Dishonesty has been defined as a disposition to lie, cheat, deceive or defraud. 7 It implies untrustworthiness, lack of integrity, lack of honesty, probity or integrity in principle on the part of the individual who failed to exercise fairness and straightforwardness in his or her dealings.8 On the other hand, conduct prejudicial to the best interest of the service refers to acts or omissions that violate the norm of public accountability and diminish or tend to diminish the people's faith in the Judiciary.9 The circumstances of the present case show that Del Rosario committed these violations in his dealings with Primo. The records show that Del Rosario admitted to the dishonest act of misappropriating the money that was entrusted to him by Primo. He also did not deny the misrepresentations he made to Primo to cover up his misappropriation of the entrusted sum. Del Rosario also admitted to his improper conduct in accepting money to undertake work outside the scope of his assigned tasks. Lastly, he admitted that he failed to immediately return the money he misappropriated despite Primos repeated demands. Under the Revised Uniform Rules on Administrative Cases in the Civil Service (Civil Service Rules), dishonesty and conduct prejudicial to the best interest of the service are classified as grave offenses. Under Section 52(A)(1), Rule IV of the Civil Service Rules, dishonesty is punishable by dismissal for the first offense. In turn, conduct prejudicial to the best interest of the service under Section 52(A)(20), Rule IV of the Civil Service Rules is punishable by suspension for six (6) months and one (1) day to one year for the first offense, and by dismissal for the second offense. 1avvphi1

In this case, considering Del Rosarios two civil service offenses, Section 55 of the Civil Service Rules provides that the p enalty to be imposed should be that corresponding to the most serious charge, with the rest considered as aggravating circumstances. Thus, Del Rosarios infractions merit the imposition of the penalty of dismissal from the service with the accessory penalties of f orfeiture of retirement benefits, except accrued leave credits, and perpetual disqualification from re-employment in the government service.10 We cannot consider as mitigating circumstances Del Rosarios ready admissions of his infractions, the proffered reason for the misappropriation, the restitution made, and Primos expressed intent to desist from pursuing the present administrative case. We note the OAS observation that Del Rosarios restitution was not of his own volition but stemmed only from his fear of possible administrative sanctions.11 Any consideration of restitution must also take into account the nature of the offense committed in terms of the stakes involved. In this case, public interest in the conduct of an employee of the Judiciary and the name of the Judiciary itself are involved. Del Rosarios infractions cannot but be severe as he took advantage of the trust and confidence of a lower court employee that his office (Fiscal Management Office-OCA) ministers to. The complainants desistance, on the other hand, is not a critical factor as what is involved is not a private offense but one where public interest is involved. As an OCA employee, Del Rosario is expected to set a good example for other court employees in the standards of propriety, honesty and fairness. He is expected to possess a high degree of work ethic, and abide by the strictest principles of ethical conduct and decorum both in his professional and private dealings. Del Rosario failed to meet these standards for he placed his personal interest over the interest of an employee who trusted him as a friend and as an employee administering to the needs of other employees; he catered to his own interest without regard to the Courts interest in promoting and uplifting the publics conf idence in the integrity of the Judiciary, and in the trustworthiness, reliability and honesty of its employees. We have many times declared that the image of a court of justice is mirrored by the conduct, official or otherwise, of its personnel from the judge to the lowest of its rank and file who are all bound to adhere to the exacting standard of morality and decency in both their professional and private actions.12 In this case, Del Rosarios actions tarnished the public perception of the image of the Court, and placed into serious question the Courts capability to ably handle the supervision and administration of its own p ersonnel. Under the circumstances, our compassion has to give way to the higher demand of the interest of the institution. Thus, we impose the supreme penalty of dismissal from the service in this case. We hope that this case shall remind court employees that as public servants, the highest sense of honesty, integrity, morality and decency is demanded in their performance of official duties and in the handling of their personal affairs; at all times, they carry, and must preserve, the Court's good name and standing. 13 The Court cannot sit idly as its own employee violates the norm of public accountability in a manner that diminishes the peoples faith in the Judiciary.14 WHEREFORE, premises considered, we hereby DISMISS Ignacio S. del Rosario, Cash Clerk III of the Records and Miscellaneous Matter Section, Checks Disbursement Division, Fiscal Management Office-Office of the Court Administrator, from the service for Dishonesty and Conduct Prejudicial to the Best Interest of the Service. The penalty of dismissal shall carry the accessory penalties of forfeiture of all his retirement benefits, except accrued leave benefits, and with prejudice to re-employment in any branch or instrumentality of the government, including government-owned or controlled corporations. SO ORDERED. RENATO C. CORONA Chief Justice

ANTONIO T. CARPIO Associate Justice TERESITA J. LEONARDO-DE CASTRO Associate Justice DIOSDADO M. PERALTA Associate Justice MARIANO C. DEL CASTILLO Associate Justice MARTIN S. VILLARAMA, JR. Associate Justice JOSE CATRAL MENDOZA

PRESBITERO J. VELASCO, JR. Associate Justice ARTURO D. BRION Associate Justice LUCAS P. BERSAMIN Associate Justice ROBERTO A. ABAD Associate Justice JOSE PORTUGAL PEREZ Associate Justice (on leave)

Associate Justice

MARIA LOURDES P. A. SERENO* Associate Justice

(on official leave) BIENVENIDO L. REYES** Associate Justice

Footnotes
*

On leave. On official leave. Letter dated April 6, 2011 of Primo to Del Rosario, p. 2.

**

Republic Act No. 6713, as amended. Section 4(c) states, [j]ustness and sincerity. Public officials and employees shall remain true to the people at all times. They must act with justness and sincerity x x x. They shall at all times respect the rights of others, and shall refrain from doing acts contrary to law, good morals, good customs, public policy, public order, public safety and public interest.
3

CANON I (Fidelity to Duty) SECTION 1. Court personnel shall not use their official position to secure unwarranted benefits, privileges or exemptions for themselves or for others. SECTION 2. Court personnel shall not solicit or accept any gift, favor or benefit based on any or explicit understanding that such gift, favor or benefit shall influence their official actions. SECTION 3. Court personnel shall not discriminate by dispensing special favors to anyone. They shall not allow kinship, rank, position or favors from any party to influence their official acts or duties. SECTION 4. Court personnel shall not accept any fee or remuneration beyond what they receive or are entitled to in their official capacity. SECTION 5. Court personnel shall use the resources, property and funds under their official custody in a judicious manner and solely in accordance with the prescribed statutory and regulatory guidelines or procedures.

Sec. 7. Court personnel shall not be required to perform any work or duty outside the scope of their assigned job description.
5

Memorandum for Hon. Renato C. Corona dated July 26, 2011, p. 3. Id. at 5-6. Bulalat v. Adil, A.M. No. SCC-05-10-P, October 19, 2007, 537 SCRA 44, 48. Ibid.

Toledo v. Perez, A.M. Nos. P-03-1677 and P-07-2317, July 15, 2009, 593 SCRA 5, 11, citing Ito v. De Vera, A.M. No. P01-1478, December 13, 2006, 511 SCRA 1, 11.
10

Section 58(a), Rule IV of the Civil Service Rules.

11

Supra note 5. Floria v. Sunga, 420 Phil. 637, 650 (2001).

12

13

San Jose, Jr. v. Camurongan, A.M. No. P-06-2158, April 25, 2006, 488 SCRA 102, 106; and Floria v. Sunga, ibid., citing Bucatcat v. Bucatcat, 380 Phil. 555, 567 (2000).
14

San Jose, Jr. v. Camurongan, supra, at 106. June 30, 1951

G.R. No. L-2011

THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. LORETO BARRIOQUINTO, ET AL., defendants. x---------------------------------------------------------x G.R. No. L-2267 June 30, 1951

THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. LORETO BARRIOQUINTO, ET AL., defendants. NORBERTO JIMENEZ, defendant-appellant. Roseller T. Lim for appellants. Office of the Solicitor General Felix Bautista Angelo and Solicitor Augusto M. Luciano for appellee. BENGZON, J.: In April, 1946, before the Court of First Instance of Zamboanga, Norberto Jimenez and Loreto Barrioquinto, together with others were charged with the murder of Simeon Bernardo committed on December 1, 1943. Because Barrioquinto was still at large, the case proceeded against Jimenez and others. After trial, the first was sentenced to life imprisonment by a decision dated September 25, 1946. Informed of the Amnesty Proclamation (September 7, 1946) in favor of persons who had committed crimes in furtherance of the resistance movement. Jimenez submitted his case to the 14th Guerilla Amnesty Commission, together with the petition of Barrioquinto who at that time had already been apprehended. Said Commission refused to extent to them the benefit of the proclamation, principally because neither admitted having committed the offense, their theory being that it was Hipolito Tolentino who had shot and killed the deceased. Consequently it returned the expediente to the court of first instance, wherein Jimenez subsequently filed a motion for new trial and an amended motion praying for an opportunity to prove his defense connected with the efforts of the guerrillas. Both motions were denied, and he appealed in due time. Immediately after the refusal of the Amnesty Commission, both the above-mentioned defendants instituted here a special civil action of mandamus to compel the said Commission to decide their petition. (Barrioquinto vs.Fernandez, 4 Off. Gaz., 3031.) They maintained the proposition that in order that a person may be entitled to the benefits of the Proclamation it is not essential, nor a condition sine qua non, that he should admit having performed the criminal act imputed to him by the prosecution. This Court upheld their contention in its decision of January 21, 1949. In the meantime, pursuant to his appeal to this Tribunal, Norberto Jimenez filed a brief (G.R. No. L-2011) contending that the court a quo erred in denying his petitions for new trial involving the Amnesty Proclamation, especially without waiting for this Courts decision in the mandamus proceedings. It must be observed that when tried in the court below, Jimenez attempted to prove an alibi, which was rejected, but did not submit any evidence as to the "resistance-movement" defense, because at that time the proclamation had not yet been issued or published in Zamboanga. However in his brief as appellant he expressly abandoned his alibi, and insists on his motion for a new trial to established connection between the homicide and the underground activities. On the other hand, Loreto Barrioquinto, tried after the Amnesty Proclamation, had ample opportunity to prove and submitted evidence that Simeon Bernardo was an enemy collaborator and had been eliminated to further the resistance plans. Nevertheless he was convicted by the Zamboanga judge. Therefore he appealed to this Courts. At the request of the attorney of both appellants, who are on bail, these two appeals are now considered together. Main question is the application of the Amnesty Proclamation. If the amnesty applies, Barrioquinto should be acquitted; but a new trial should be granted to Jimenez. Otherwise both should be declared guilty as charged.

Simeon Bernardo lived in barrio Maasin, City of Zamboanga together with his family, consisting of his wife Enrica Macapili and several children, among them Clinia and Elena, surnamed Bernardo. Early in the morning of December 1, 1943 the Bernardos were awakened by calls of men allegedly of the "army" (guerrilla). Enrica lighted a kerosene lamp and opened the door, to admit Loreto Barrioquinto and Norberto Jimenez. Some persons the other co-accused waited below surrounding the house. According to the prosecution, Barrioquinto immediately pointed his revolver at Simeon Bernardo; but Enrica interceded, saying, "Let us talk first. What is it about" Somehow the gun was discharged, the bullet piercing the floor. Then Barrioquinto ordered Jimenez to shoot, which the latter did, hitting Simeon Bernardo on the face and causing his instantaneous death. Again, according to the prosecution, Barrioquinto had been courting Clinia Bernardo, and had urged her to lived with him in the mountains; but she rejected his attentions. And her parents, knowing his status as a married man, had opposed his courtship, opposition which he deeply resented. The prosecution also showed that Norberto Jimenez repaired to Simeon's house in November, 1943 to collect certain "contribution" for the guerrillas which Simeon was in the habit of paying; but that time Simeon refused to make payment because he had already delivered it to another guerrilla named Ciriaco Antonio; that Norberto Jimenez resented this fiasco and the shooting was the pay-off. At his trial Jimenez essayed an alibi. However, Barrioquinto, when tried, presented evidence to show that: Before the incident Simeon Bernardo was denounced to the guerrillas operating in and around Zamboanga as a Japanese spy and collaborator. Several underground men were captured and tortured thru his help or thru information facilitated by him. Consequently, one day his arrest was decreed by Lieut. Celso Fernandez, and composed Norberto Jimenez, Sgt. Teodulfo Molina, Esperato Molina, Ciriaco Antonio, Severo de los Santos and Carlos Antonio, set out to execute the secret military directive. Accordingly they went to Maasin. That night Barrioquinto, Jimenez and Teodulfo Molina entered when the door was opened by Simeon Bernardo. His wife Enrica Macapili wrestled with Barrioquinto for the latters gun, and Simeon tied to grab the rifle of Teodulfo Molina, even as Hipolito Tolentino, a henchman of Simeon from distance shot at Barrioquinto ordered his men to open fire, and Jimenez downed Simeon Bernardo. It will be recalled that on September 7, 1946 President Manuel Roxas, with concurrence of the Congress declared and proclaimed an amnesty in favor of all persons who committed any act penalized under the revised Penal Code in furtherance of the resistance to the enemy, if such act was committed during the period from December 8, 1941 to the date when each particular area of the Philippines was actually liberated from enemy control and occupation; provided however that the amnesty shall not apply to crimes against chastity nor to acts performed for purely personal motives. In Barrioquinto vs. Fernandez supra, we hold that, to enjoy the benefits of the above amnesty, the accused need not openly and expressly admit having committed the deed imputed to them, and the fact that they at first denied responsibility or denied having committed the criminal act, does prevent the application of the amnesty to them, if and when the evidence shows they are included within its terms, because they did the act in support of guerrilla warfare. Unfortunately for Barrioquinto that decision was rendered January 21, 1949, almost a year after he had been convicted in the lower court. We say unfortunately because as we read the record and analyze the reasoning of the appealed decision, we get the general impression that the guerrilla story was discounted by his Honor mainly upon the ground that the accused had maintained inconsistent theories and did not from the beginning openly and sincerely confess to having snuffed out the life of Simeon Bernardo for being a Japanese spy and collaborator.1 Suspecting that the amnesty theory was defendant's eleventh-hour effort to evade punishment, His Honor naturally appraised the defendants evidence with critical perceiving areas of absolute inconsistency and indications of falsity where others could explanations. In this revision we did not start with a misconception of the implications of the amnesty. We examined the record in spirit of liberality, not only because of the circumstances above mentioned, but also because we have heretofore adopted a liberal interpretation of its provisions, giving the benefit of the doubt to guerrillas who found themselves in the toils of the law for acts connected with the resistance operations (People vs. Gajo, 46 Off. Gaz., 6093; 84 Phil., 107), absolving members of the underground legions who liquidated persons suspected as traitors to the cause (People vs. Tuazon, 47 Off. Gaz., 2345; 85 Phil., 85) or who killed in the belief that their victim had been assisting the Japanese (People vs. Dosal, 46 Off. Gaz., 2500; 82 Phil., 501). There is no question that Loreto Barrioquinto, Norberto Jimenez and the others who raided Bernardo's house were members of a recognized guerrilla unit. On that occasion they presented themselves as "army" men (meaning guerrillas) thereby indicating they had come on guerrilla business. Barrioquinto declared that about November 27, 1943 upon orders of Lt. Celso Fernandez of the guerrilla, he set out from Malayal to lead a combat and reconnaissance patrol and to arrest soldiers who had surrendered without orders and Japanese spies; that the aforesaid guerrillas2 were under his command; that they went to Labuan, Simabung, Rancho Cabonegro, and Capisan where Ciriaco Antonio, one of the party, received a note from Eduardo Montuno saying he had been captured by the Japanese guided by Simeon Bernardo;3 that they proceeded to Mabuhay, and then on to Kawit interior where they arrested Pedro Santos whom they

thought had surrendered voluntarily to the Japanese, but who explained that he had been captured by Simeon Bernardo and his nephew-in-law Hipolito Tolentino; that in order to verify the reports about the treasonable activities of Bernardo he contacted Felix Inclan, his secret operative in Maasin interior; that when he arrived at the latter's house Inclan's wife reported he had been taken to Lamitan by the Japanese, accompanied by Bernardo and Hipolito Tolentino; that they decided to arrest the traitor quietly, and after posting guards in several strategic places they approached the house of Bernardo. The result: for resisting or avoiding arrest, Bernardo was shot down by Jimenez. Captain Celso Fernandez (then Lieutenant) confirmed his orders to Barrioquinto and his men. He added that Simeon Bernardo and Tolentino armed with rifles helped Japanese soldiers when the latter attacked his headquarters at Capisan, Zamboanga, on November 1, 1943. Eduardo Montuno related his arrest on October 23, 1943, accomplished by Japanese soldiers with Simeon Bernardo's guidance; and he ratified the contents of his note to Ciriaco Antonio, which he had sent thru Pangalima Lala. Candido Kabugsa, also a guerrilla operative, under Captain Fernandez swore that in the month of October, 1943, he was seized at the place called Sabana at Cabigan by Japanese soldiers led and helped by Simeon Bernardo, who told the Japanese that he was a member of a group of "bandits" (guerrillas); that he was imprisoned until he was compelled to join the outfit of Miguel Moreno, a well-known and powerful Japanese collaborator. Delfin Molina, brother of Teodulfo and Esperato Molina declared that sometime in October 1943 some Japanese soldiers guided by Simeon Bernardo apprehended him near Kawit, the latter having told the Japanese that he was the brother of Teodulfo Molina, a "bandit." Other witnesses, like Pingli Sala, Moro Jakaria, Luciano Makiling and Nicasio Solomon described instances of service rendered by Bernardo to the Japanese, and his personal association with them. In the face of this array of witnesses it is not hard to believe the report that Simeon Bernardo had treasonably aided the Japanese invader. In fact, the prosecution and the court below make little effort to demonstrate wherein these witnesses had departed from the truth in the matter of Bernardo's pro-Japanese inclinations. Yet the prosecution insists the appellant's plea should be rejected, (a) because, contrary to the defense's theory, it is incredible that Simeon Bernardo and his wife should dare to struggle when the party entered their dwelling; (b) because appellant and his witnesses gave conflicting versions of the actual shooting; and (c) because Barrioquinto was prompted by purely personal motives, his purpose having been to seek revenge on the family that had spurned his love and affection. As to the first, it is quite probable that seeing Barrioquinto with a raised gun, Enrica Macapili, impelled by wifely devotion, attempted to deflect the gun's aim - not to fight or wrest it from Barrioquinto. At any rate, supposing there was no actual struggle, appellant would, just the same, be entitled to acquittal, if, as he has shown, he took punitive measures because Bernardo had been denounced as a Japanese spy and collaborator. As to the second point, the contradictions relate to the person who actually shot Simeon Bernardo; but the question becomes immaterial, because granting it was Norberto Jimenez, by order of appellant, as is the prosecution's theory inasmuch as the shooting was prompted by Bernardo's treasonous conduct, a reversal of the decision becomes inevitable. And now as to the "spurned-suitor" proposition. Barrioquinto denied having made love to Clinia. We believe it is not impossible that he had set covetous eyes on that young lady. But it is also possible that his advances and the incidents thereof had been embroidered or enlarged to strike back at Barrioquinto, who was responsible for the untimely death of Bernardo. Anyway supposing that Barrioquinto nurtured a grudge against the family for his frustrated additional incentive to carry out the liquidation. The verdict would then be: Simeon Bernardo was done to death because Barrioquinto hated him and also because he was a Japanese informer and collaborator. Hence it may not be held that the manslaughter stemmed from purely personal motives, and that Loreto Barrioquinto is excluded from the benefits of the aforesaid decree of amnesty. Wherefore we have to reverse the judgment of conviction and to direct the exoneration of said appellant Loreto Barrioquinto. As to Norberto Jimenez, a new trial shall be had to afford him a chance equally to enjoy the advantages of that Presidential Proclamation. So ordered. Paras, C.J., Feria, Pablo, Padilla, Montemayor, Reyes and Jugo, JJ., concur.

Footnotes
1

Of course there is the "rejected-suitor" angle. On that, we shall comment later. The non-payment of fees to Norberto Jimenez, even if true, could not have been so serious an offense as to induce a cold-blooded murder.
2

Teodulfo Molina, Esperato Molina, Ciriaco Antonio, Severo de los Santos, Carlos Antonio.

He also swore that he received in October the note exhibit 6 from his operative Santiago Alivio: "Simeon Bernardo tell soldiers to surrender. The Japanese paid him P40 for soldier surrendered by him." G.R. No. 197205 September 26, 2012

JESSIE V. DAVID, represented by his wife, MA. THERESA S. DAVID, and children, KATHERINE and KRISTINA DAVID, Petitioners, vs. OSG SHIP MANAGEMENT MANILA, INC., and/or MICHAELMAR SHIPPING SERVICES, Respondents. DECISION VELASCO, J.: Before Us in a Petition for Review on Certiorari under Rule 45 assailing and seeking to set aside the Decision1and Resolution2 dated March 11, 2011 and June 1, 2011, respectively, of the Court of Appeals (CA) in CA-G.R. SP No. 114616, overturning the January 22, 2010 and March 30, 2010 Resolutions3 of the National Labor Relations Commission (NLRC), Second Division in NLRC NCR OFW Case No. (M)09-10261-07. The facts are not disputed. On May 10, 2006, petitioner Jessie David (David) entered into a six-month Contract of Employment4 with respondent OSG Shipmanagement Manila, Inc. (OSG Manila), for and in behalf of its principal Michaelmar Shipping Services, Inc., as a Third Officer of the crude tanker M/T Raphael. The engagement was the third contract of employment between David and OSG Manila. OSG Manila previously hired and deployed David to work aboard crude tankers since December 2004. 5 Prior to his embarkation, David underwent a pre-employment medical examination (PEME) and was declared "fit for further sea duty."6 David then boarded the ship M/T Raphael on May 23, 2006.7 Barely six months into his employment or in November 2006, David complained of an intolerable pain on his left foot so that he consulted a doctor at the port of Rotterdam. The doctor diagnosed him as suffering from "lipoma on the left upper leg"8 and a possible "calcaneus spur of the left foot."9 Although found to be fit for work, David was nonetheless advised to undergo further treatment upon repatriation to the Philippines.10 Immediately after his return to the country on December 4, 2006, OSG Manila referred David to the company-designated physician, Dr. Robert Lim (Dr. Lim) of the Metropolitan Medical Center (MMC), who referred him to the Cardinal Santos Medical Center for a Magnetic Resonance Imaging (MRI), which reflected the following impressions: Large soft tissue mass of the anterior left thigh, as described. Considerations include neoplasm such as benign/malignant nerve sheath tumor, hemangioma, soft tissue sarcoma or inflammatory process such as intramuscular abscess. 11 The Pathology Report of the MMC also showed the following: "Left anterior thigh mass excision: Malignant fibrous histiocytoma, myxoid type. Margins of resection negative for tumor."12 On February 27, 2007, OSG Manila certified Davids entitlement "to sickness allowance from the company or principal equivalent to basic salary of member."13 On March 2, 2007, Dr. Christopher Co Pea (Dr Pea), also of MMC, wrote Dr. Lim, informing the latter of the etiology of soft tissue sarcoma, viz: The following are the etiology of soft tissue sarcoma: 1. Ionizing radiation

2. Genetic predisposition 3. Chemical exposure Phenoxyacetic acid, cholorophenols, thorotrast, vinyl chloride, arsenic 4. Chronic lymphedema Whether work-related or not will depend on the exposure of the above mentioned factors. 14 On March 5, 2007, the Marine Medical Services of MMC certified that David had undergone medical and surgical evaluation treatment at its establishment from December 21, 2006 due to "malignant fibrous histiocytoma, left thigh calcaneal spur, left; s/p with excision of mass left thigh."15 Apparently as a result of another inquiry regarding Davids illness and its relation to his wor k, Dr. Pea again addressed a letter to Dr. Lim stating: Dear Dr. Lim, This is with regards to Mr. Jessie David, diagnosed case of Malignant Fibrous Histiocytoma last February 2007. S/P Resection. Etiology has already been mentioned in my previous letter dated March 2, 2007. It is difficult to determine exactly whether his work history would have bearing as etiology is multifactorial. Unless there is documented exposure to the previously mentioned chemicals.16 Despite the non-conclusive findings of the company designated physician and Dr. Pea, respondents issued on June 28, 2007 a Certification stating that David has been given a "permanent disability Grade One (1)"17 by the Marine Medical Services, viz: CERTIFICATION TO WHOM IT MAY CONCERN: This is to certify that MR. JESSIE V. DAVID, a resident of Block 3 Lot 4, NWSA Compound Tondo, Manila, has been given a permanent disability Grade of One (1) by Marine Medical Services. This certification is being issued 28th day of June 2007 for whatever legal purpose it may serve him best. Very truly yours, OSG SHIPMANAGEMENT MANILA INC. As Agent Only, acting for and in behalf of the Owners (SGD.) MS. MA. CRISTINA G. PARAS President Due to his condition, David underwent chemotherapy per the advice of the company-designated physician. However, despite several requests, respondents refused to shoulder Davids expenses and medication. Hence, after an unsuccessful grievance proceeding, David filed on September 17, 2007 a complaint against respondents for total and permanent disability benefits, medical and transportation expenses, moral and exemplary damages, and attorneys fees.18 In his Decision of March 31, 2008 finding for David, Labor Arbiter (LA) Legerio V. Ancheta noted that there was no categorical denial on the part of respondents that Davids disability was not work -related. Instead, respondent OSG Manila, through its President, issued a certification that David has a Grade I disability. According to LA Ancheta, this certification should bind the respondents.19 Hence, LA Ancheta declared David to be permanently and totally disabled, entitled to be paid his total disability compensation, plus damages and attorneys fees in the total amount of USD 115,500 and PhP 426,645.69. 20 The NLRC affirmed the Decision of the LA in toto holding that the respondents, by certifying Davids Grade I disability and by paying his sickness allowance, are estopped from impugning the work-related nature of Davids illness.21 Undaunted, respondents elevated the case to the CA. In its Decision dated March 11, 2011, the appellate court ruled against Davids entitlement to the benefits he claimed, and accordingly nullified the resolutions of the NLRC. 22 The CA ratiocinated, thus:

In the case at bar, there is no question that private respondent (David) reported to the company-designated physician for treatment immediately upon arriving in the Philippines. Problems arose, however, when private respondent was diagnosed to be suffering from malignant fibrous histiocytoma and while his condition was given a grade I disability rating, Dr. Chrisopher Co Pea who diagnosed private respondents condition opined that it is difficult to determine whether work history would have a bearing to his illness as etiology is multifactorial. Dr. Pea was short of declaring private respondents illness as non -work related. It is noted, however, that aside from the certification by the president of petitioner OSG stating that the Marine Medical Services, the record is bereft of the actual medical certificate coming from the Marine Medical Services itself which shows that indeed it issued a Grade I disability rating for private respondents illness. xxxx Malignant Fibrous Histiocytoma is not listed as an occupational disease under Section 32-A thereof. Nonetheless, Section 20(B), paragraph (4) provides that "those illnesses not listed in Section 32 of this Contract are disputably presumed as work-related." The burden is, therefore, placed upon private respondent to present substantial evidence x x x. Private respondent, however, failed to do this. Private respondent did not, by way of a contrary medical finding, assail the diagnosis arrived at by the company-designated physician x x x. xxxx As to the issue that there was an admission on the part of petitioner OSG that private respondent was already assessed to have a grade I disability, the same only shows that indeed private respondent is suffering from a disability. But going back to the provisions of the POEA Standard Employment Contract, such disability must have a causal relation to the work of private respondent to be compensable.23 In due time, David filed a Motion for Reconsideration of the CAs March 11, 2011 Decision. 24 Pending the resolution of his motion, David succumbed and died on April 9, 201125 and was substituted in the case by his wife and children. 26 On June 14, 2011, the CA issued a resolution denying the motion for reconsideration. Hence, this petition.27 Petitioners argue that the appellate court grievously erred in overturning the NLRC and the LAs decisions considering that i t is presumed that Davids illness was work-related and it behooves the respondents to present substantial evidence to overcome this presumption.To petitioners, respondents have failed to discharge this burden. On the contrary, respondents admitted that David was suffering from a Grade I disability. Petitioners further add that there is a reasonable causal connection between Davids illness and the duties he performed as a Third Officer on board respondents crude tanker. In their comment, respondents counter that the appellate courts denial action was correct since "convenient presumption re garding work-relation will not suffice to justify an award of disability benefits" 28 and David failed to submit any real and substantial evidence "to dispute the opinion of the company physician confirming [the] absence of work-relation."29 Respondents posit that if David was indeed convinced that his illness was work-related, he should have procured supporting opinion from his various doctors. 30 The petition has merit. Deemed read and incorporated into the Contract of Employment between David and respondents are the provisions of the 2000 Philippine Overseas Employment Agency Standard Employment Contract (POEA-SEC). Section 20(B) of the POEA-SEC reads: SECTION 20. COMPENSATION AND BENEFITS. --B. COMPENSATION AND BENEFITS FOR INJURY OR ILLNESSES The liabilities of the employer when the seafarer suffers work-related injury or illness during the term of his contract are as follows: 1. x x x x 2. x x x x 3. Upon sign-off from the vessel for medical treatment, the seafarer is entitled to sickness allowance equivalent to his basic wage until he is declared fit to work, or the degree of permanent disability has been assessed by the companydesignated physician, but in no case shall this period exceed one hundred twenty (120) days. xxxx

4. Those illnesses not listed in Section 32 of this Contract are disputably presumed as work related. 31(Emphasis supplied.) In this case, David suffered from malignant fibrous histiocytoma (MFH) in his left thigh. MFH is not one of the diseases enumerated under Sec. 32 of the POEA-SEC. However, Sec. 20(B)(4) of the POEA-SEC clearly established a disputable presumption in favor of the compensability of an illness suffered by a seafarer during the term of his contract. This disputable presumption works in favor of the employee pursuant to the mandate under Executive Order No. (EO) 247 dated July 21, 1987 under which the POEA-SEC was created: "to secure the best terms and conditions of employment of Filipino contract workers and ensure compliance therewith"32 and "to promote and protect the well-being of Filipino workers overseas."33 Hence, unless contrary evidence is presented by the seafarers employer/s, this disputable presumption stands. 34 In this case, David not only relies on this disputable presumption of the compensability of his illness but further alleges that the following conditions provided in Sec. 32-A of the POEA-SEC have all been satisfied: SECTION 32-A OCCUPATIONAL DISEASES For an occupational disease and the resulting disability or death to be compensable, all of the following conditions must be satisfied: 1. The seafarers work must involve the risks describe herein; 2. The disease was contracted as a result of the seafarers exposure to the described risks; 3. The disease was contracted within a period of exposure and under such other factors necessary to contract it; 4. There was no notorious negligence on the part of the seafarer. David showed that part of his duties as a Third Officer of the crude tanker M/T Raphael involved "overseeing the loading, stowage, securing and unloading of cargoes."35 As a necessary corollary, David was frequently exposed to the crude oil that M/T Raphael was carrying.36 The chemical components of crude oil include, among others, sulphur, vanadium and arsenic compounds.37 Hydrogen sulphide and carbon monoxide may also be encountered,38 while benzene is a naturally occurring chemical in crude oil.39 It has been regarded that these hazardous chemicals can possibly contribute to the formation of cancerous masses. 40 In this case, David was diagnosed with MFH (now known as undifferentiated pleomorphic sarcoma [UPS]),41 which is a class of softtissue sarcoma or an illness that account for approximately 1% of the known malignant tumors.42As stated by Dr. Pea of the MMC, who was consulted by the company-designated physician, the etiology of soft tissue sarcomas are multifactorial. 43 However, some factors are associated with a higher risk.44 These factors include exposure to chemical carcinogens45 like some of the chemical components of crude oil. Clearly, David has provided more than a reasonable nexus between the nature of his job and the disease that manifested itself on the sixth month of his last contract with respondents. It is not necessary that the nature of the employment be the sole and only reason for the illness suffered by the seafarer. It is sufficient that there is a reasonable linkage between the disease suffered by the employee and his work to lead a rational mind to conclude that his work may have contributed to the establishment or, at the very least, aggravation of any pre-existing condition he might have had.46 This reasonable connection has not been convincingly refuted by respondents. On the contrary, respondents do not deny the functions performed by David on board M/T Raphael or the cargo transported by the tanker in which he was assigned. At best, respondents have cited contrary researches suggesting that the chemicals in crude oil do not induce the kind of disease contracted by Davida soft tissue sarcoma, which can supposedly occur to anybody regardless of the nature of their employment. 47 Furthermore, respondents harp on the alleged "opinion of the company physician confirming absence of work-relation"48 that "explicitly stated that there is no documented exposure to previously cited etiology." 49 A review of the documentary evidence submitted by parties will readily show that there is no such "opinion of the company physician confirming absence of work-relation," much less an explicit statement that David had "no documented exposure" to the etiology cited by Dr. Pea in his letter to the company-designated physician, Dr. Lim.50 There is only an imprecise and ambivalent medical opinion regarding the work-relation of the MFH/UPS suffered by David that can be construed in favor of the employee. With more reason, such construal in favor of David and the relation of his illness to the nature of his work must be sustained considering that the employers, through respondent OSG Manila, admitted that David had suffered a Grade I disability. Notably, respondents have not denied the authenticity and genuineness of the Certification dated June 28, 2007 wherein the admission was made.51 Instead, respondents whimsically argue that the admission merely pertains to the gravity of the ailment suffered by David but not its nature. This hair-splitting argument presented by respondents, and accepted by the appellate court, does not persuade. It ignores the fact that employers do not have the business of certifying the gravity of an illness suffered by an employee unless it is in relation to the latters employment. Hence, the certification issued by OSG Manila regarding the classification/grading of Davids illness can only be taken as a strong validation of the relation between Davids illness and hi s employment as a seafarer with the respondents.

It is significant to note that OSG Manila issued the June 28, 2007 Certification after the issuance of the letters/certifications regarding the possible etiology of Davids illness, where it was tacitly suggested by the MMC doctors that Davids illness could be work-related provided there is a documented exposure to carcinogenic chemicals. It can be easily deduced, therefore, that the certification impliedly fills in the information required by Dr. Pea in his last letter to the company-designated physician regarding the nature of the work performed by David and his exposure to chemical carcinogens that could have led to his illness. After all, respondents, as Davids employers, have knowledge regarding the functions of a Third Officer on board a crude tanker and the nature of the cargo transported in their vessels. Without a doubt, the certification issued by OSG Manila encompasses not only the gravity of Davids illness but also its nature and relation to the employment undertaken by David in their crude tankers. This conclusion is corroborated by respondents contemporaneous act of extending to David sickness allowance under Sec. 20(B) of the POEA-SEC, since an employer is liable for the payment of sickness allowance only "when the seafarer suffers work-related injury or illness during the term of his contract." Surely, an illness that has been recognized at the outset by the employer as workrelated cannot evolve to an illness not connected to the seafarers employment. The quantom of evidence required in labor cases to determine the liability of an employer for the illness suffered by an employee under the POEA-SEC is not proof beyond reasonable doubt but mere substantial evidence or "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." 52 In this case, in accordance with the foregoing disquisitions, We find that there is substantial evidence to support the decision of the LA and the NLRC. WHEREFORE, the petition is GRANTED. The March 11, 2011 Decision of the CA and its June 1, 2011 Resolution are hereby REVERSED and SET ASIDE, and the January 22, 2010 and March 30, 2010 Resolutions of the NLRC are REINSTATED. SO ORDERED. PRESBITERO J. VELASCO, JR. Associate Justice WE CONCUR: MARIA LOURDES P. A. SERENO* Chief Justice JOSE PORTUGAL PEREZ** Associate Justice JOSE CATRAL MENDOZA Associate Justice

ESTELA M. PERLAS-BERNABE*** Associate Justice ATTESTATION I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division. PRESBITERO J. VELACO, JR. Associate Justice Chairperson CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above Decision had been reached in consultation before the case was 3ssigned to the writer of the opinion of the Court's Division. MARIA LOURDES P. A. SERENO Chief Justice

Footnotes

Additional member per Special Order No. 1311 dated September 21, 2012. Additional member per Special Order No. 1299 dated August 28, 2012. Additional member per Special Order No. 1320 dated September 21, 2012.

**

***

Rollo, pp. 49-62. Penned by Associate Justice Franchito N. Diamante and concurred in by Associate Justices Josefina Guevara-Salonga and Mariflor P. Punzalan Castillo.
2

Id. at 86-87.

CA rollo, pp. 56-78. Penned by NLRC Commissioner Teresita Castillon-Lora and concurred in by Presiding Commissioner Raul T. Aquino, Commissioner Napoleon M. Menese took no part.
4

Id. at 121.

Prior to the May 2006 contract, David had been working on board two other crude tankers of the respondents since December 2004. (Certification dated January 11, 2007; id. at 144.)
6

Id. at 122, Medical Examination Records. Id. at 12. Id. at 123, Medical Report dated November 9, 2006. Id. Id. Id. at 145; rollo, p. 107, MRI of the Left Thigh with and without Contrast dated January 15, 2007. Id. at 146; rollo, p. 108, Pathology Report dated February 14, 2007. Id. at 147; rollo, p. 109. Id. at 124. The contents of the letter were reiterated in a letter/certification dated April 23, 2007. Id. at 148; rollo, p. 110. Id. at 125. Id. at 149; rollo, p. 111. Id. at 90-92. Id. at 86. Id. at 88-89. The dispositive portion of LA Anchetas Decision dated March 31, 2008 provides: WHEREFORE, the foregoing premises considered, judgment is hereby rendered finding and ORDERING all the respondents jointly and severally liable to pay complainant JESSIE V. DAVID the following:

10

11

12

13

14

15

16

17

18

19

20

1. Disability Benefits 2. Reimbursement of Medical Expenses

US$105,000.00 PhP 187,859.72

3. Moral Damages 4. Exemplary Damages 5. Attorneys Fees 10% of the above awards GRAND TOTAL:
21

PhP 100,000.00 PhP 100,000.00 US$10,500.00 US$115,500.00 + PhP 38,785.97 + PhP 426,645.69

Id. at 58-78. Rollo, pp. 49-62. Id. at 59-61. Id. at 63-83. Id. at 14. Id. at 10-15; CA rollo, pp. 600-605. Id. at 18-47. Id. at 127. Id. Id. at 130-131.

22

23

24

25

26

27

28

29

30

31

The foregoing provisions are reiterated in the Collective Bargaining Agreement between respondents and Davids union, which pertinently states: 20.1.4 Compensation for Disability 20.1.4.1 A seafarer who suffers permanent disability as a result of work-related illness or from an injury as a result of an accident, regardless of fault but excluding injuries caused by a seafarers willful act, whilst serving on board including accidents and work related illness occurring whilst traveling to or from the ship, and whose ability to work is reduced as a result thereof, shall in addition to sick pay, be entitled to compensation according to the provisions of this Agreement. In determining work related illness, reference shall be made to the Philippine Employees Compensation Law and/or Social Security Law.
32

EO 247, Sec. 3(i). Id., Sec. 3(j); Fil-Star Maritime Corporation v. Rosete, G.R. No. 192686, November 23, 2011, 661 SCRA 247, 254. Fil-Star Maritime Corporation v. Rosete, supra note 33, at 255. Rollo, p. 31. Id.

33

34

35

36

37

Labour Administration Training Material: Labour Inspection Skills in the Petroleum Industry (Bangkok: International Labour Organisation, 1991), p. 18.
38

Rollo, p. 32; see <http://www.cancer.org/Cancer/CancerCauses/OtherCarcinogens/IntheWorkplace/benzene> (visited July 31, 2011).


39

Jahn, Frank, Cook, Mark, and Graham, Mark, HYDROCARBON EXPLORATION AND PRODUCTION 112 (2nd ed., 2008).

40

Id. See also Fontham, Elizabeth T.H. and Trapido, Edward, Oil and Water. Environ Health Perspect. 2010 October; 118(10): A422A423 <http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2957937/> (visited July 31, 2011).
41

Per the new classification of adopted by the World Health Organization in 2002 Kransdorf, Mark. J. and Murphey, Mark. D., IMAGING OF SOFT TISSUE TUMORS 1 (2nd ed., 2006).
42

M. van Vliet, M. Kliffen, G. P. Krestin and C. F. van Dijke, SOFT TISSUE SARCOMAS AT A GLANCE: CLINICAL, HISTIOLOGICAL, AND IMAGING FEATURES OF MALIGNANT EXTREMITY SOFT TISSUE TUMORS. EUROPEAN RADIOLOGY, Volume 19, Number 6 (2009), 1499-1511.
43

CA rollo, p. 125. M. van Vliet, et al., supra note 42. Id. Nisda v. Sea Serve Maritime Agency, G.R. No. 179177, July 23, 2009, 593 SCRA 668, 699; NYK-Fil Ship Management v. Talavera, G.R. No. 175894, November 14, 2008, 571 SCRA 183.

44

45

46

47

Rollo, p. 136. Id. at 130. Id. at 129. CA rollo, p. 124. Rollo, pp. 138-140. Government Service Insurance System v. Besitan, G.R. No. 178901, November 23, 2011, 661 SCRA 186, 195. October 23, 2012

48

49

50

51

52

G.R. No. 198423

LEO A. GONZALES, Petitioner, vs. SOLID CEMENT CORPORATION and ALLEN QUERUBIN, Respondents. RESOLUTION BRION, J.: Before us is the Second Motion for Reconsideration1 filed by petitioner Leo Gonzales (petitioner) in the case in caption (the current petition). Previously, the Court granted the petitioner's Motion for Leave to File and Admit the Attached Motion to Refer the Case to the Court En Bane. The motion for reconsideration addresses our Minute Resolutions of November 16, 2011 and February 27, 2012, both denying petitioners petition for review on certiorari. The Antecedent Facts The current petition arose from the execution of the final and executory judgment in the parties illegal dismissal dispute ( referred to as "original case," docketed in this Court as G.R. No. 165330 and entitled Solid Cement Corporation, et al. v. Leo Gonzales). The Labor Arbiter (LA) resolved the case at his level on December 12, 2000. Since the LA found that an illegal dismissal took place, the company reinstated petitioner Gonzales in the payroll on January 22, 2001.2 In the meanwhile, the parties continued to pursue the original case on the merits. The case was appealed to the National Labor Relations Commission (NLRC) and from there to the Court of Appeals (CA) on a petition for certiorari under Rule 65 of the Rules of Court. The LAs ruling of illegal dismissal was largely left undisturbed in t hese subsequent recourses. The original case eventually came to this Court. In our Resolutions of March 9, 20053 and June 8, 2005,4 we denied the petition of respondent Solid Cement Corporation (Solid Cement) for lack of merit. Our ruling became final and entry of judgment took place on July 12, 2005.

Soon after its finality, the original case was remanded to the LA for execution. The LA decision dated December 12, 2000 declared the respondents guilty of illegal dismissal and ordered the reinstatement of Gonzales to his former position "with full backwages and without loss of seniority rights and other benefits."5 Under this ruling, as modified by the NLRC ruling on appeal, Gonzales was awarded the following: (1) Backwages in the amount of P636,633.33; (2) Food and Transportation Allowance in the amount of P18,080.00; (3) Moral damages in the amount of P100,000.00; (4) Exemplary damages in the amount of P 50,000.00; and (5) Ten percent (10%) of all sums owing to the petitioner as attorneys fees. Actual reinstatement and return to work for Gonzales (who had been on payroll reinstatement since January 22, 2001) came on July 15, 2008.6 When Gonzales moved for the issuance of an alias writ of execution on August 4, 2008, he included several items as components in computing the amount of his backwages. Acting on the motion, the LA added P57,900.00 as rice allowance and P14,675.00 as medical reimbursement (with the companys apparent conformity), and excluded the rest of the items prayed for in the motion, either because these items have been paid or that, based on the records of the case, Gonzales was not entitled thereto. Under the LA s execution order dated August 18, 2009, Gonzales was entitled to a total of P965,014.15. 7 The NLRC, in its decision8 dated February 19, 2010 and resolution dated May 18, 2010, modified the LAs execution order by including the following amounts as part of the judgment award: Additional backwages from Dec. 13, 2000 to Jan. 21, 2001 P 50, 800.009 Salary differentials from year 2000 until August 2008 617,517.48 13th month pay differential 51,459.79 13th month pay for years 2000 and 2001 80,000.00 12% interest from July 12, 2005 878,183.42 This ruling increased Gonzales entitlement to P2,805,698.04. On a petition for certiorari under Rule 65 of the Rules of Court, the CA set aside the NLRCs decision and reinstated the LA s order, prompting Gonzales to come to the Court via a petition for review on certiorari (docketed as G.R. No. 198423) under Rule 45 of the Rules of Court. In our Minute Resolutions, we denied Gonzales Rule 45 petition. At this point came the two motions now under consideration. For easier tracking and understanding, the developments in the original case and in the current petition are chronologically arranged in the table below: October 5, 1999 Solid Cement terminated Gonzales employment; December 12, 2000 The LA declared that Gonzales was illegally dismissed and ordered his reinstatement; January 5, 2001 Gonzales filed a Motion for Execution of reinstatement aspect; January 22, 2001 Solid Cement reinstated Gonzales in the payroll; March 26, 2002 The NLRC modified the LA decision by reducing amount of damages awarded by the LA but otherwise affirmed the judgment;

June 28, 2004 The CA dismissed Solid Cements certiorari petition; March 9, 2005 The Court ultimately denied Solid Cements petition for review; July 12, 2005 The judgment became final and an entry of judgment was recorded; July 15, 2008 Gonzales was actually reinstated; August 4, 2008 Gonzales filed with the LA a motion for the issuance of an alias writ of execution (with computation of monetary benefits as of August 28, 2008 the day before his termination anew, allegedly due to redundancy, shall take effect); August 18, 2009 The LA issued an Order directing the issuance of a writ of execution; February 19, 2010 The NLRC rendered a decision affirming with modific ation the LAs Order by including certain monetary benefits in favor of Gonzales; May 31, 2011 The CA reversed the NLRC and reinstated the LAs Order; November 16, 2011 The Court denied Gonzales petition for review, questioning the reinstatement of the LAs Order; February 27, 2012 The Court denied Gonzales 1st motion for reconsideration; April 12, 2012 Gonzales again moved for reconsideration and asked that his case be referred to the En Banc. Our Ruling As a rule, a second motion for reconsideration is a prohibited pleading under the Rules of Court,10 and this reason alone is sufficient basis for us to dismiss the present second motion for reconsideration. The ruling in the original case, as affirmed by the Court, has been expressly declared final. A definitive final judgment, however erroneous, is no longer subject to change or revision. A decision that has acquired finality becomes immutable and unalterable. This quality of immutability precludes the modification of a final judgment, even if the modification is meant to correct erroneous conclusions of fact and law. And this postulate holds true whether the modification is made by the court that rendered it or by the highest court in the land. The orderly administration of justice requires that, at the risk of occasional errors, the judgments/resolutions of a court must reach a point of finality set by the law. The noble purpose is to write finis to dispute once and for all. This is a fundamental principle in our justice system, without which there would be no end to litigations. Utmost respect and adherence to this principle must always be maintained by those who exercise the power of adjudication. Any act, which violates such principle, must immediately be struck down. Indeed, the principle of conclusiveness of prior adjudications is not confined in its operation to the judgments of what are ordinarily known as courts, but extends to all bodies upon which judicial powers had been conferred.11 (emphases ours, citations omitted) After due consideration and further analysis of the case, however, we believe and so hold that the CA did not only legally err but even acted outside its jurisdiction when it issued its May 31, 2011 decision. Specifically, by deleting the awards properly granted by the NLRC and by reverting back to the LAs execution order, the CA effectively varied the final and executory judgment in the original case, as modified on appeal and ultimately affirmed by the Court, and thereby acted outside its jurisdiction. The CA likewise, in the course of its rulings and as discussed below, acted with grave abuse of discretion amounting to lack or excess of jurisdiction by using wrong considerations, thereby acting outside the contemplation of law. The CAs actions outside its jurisdiction cannot produce legal effects and cannot likewise be perpetuated by a simple reference to the principle of immutability of final judgment; a void decision can never become final. "The only exceptions to the rule on the immutability of final judgments are (1) the correction of clerical errors, (2) the so-called nunc pro tunc entries which cause no prejudice to any party, and (3) void judgments."12 For these reasons, the Court sees it legally appropriate to vacate the assailed Minute Resolutions of November 16, 2011 and February 27, 2012, and to reconsider its ruling on the current petition. The fallo or the dispositive portion The resolution of the court in a given issue embodied in the fallo or dispositive part of a decision or order is the controlling factor in resolving the issues in a case. The fallo embodies the courts decisive action on the issue/s posed, and is thus the part of the decision that must be enforced during execution. The other parts of the decision only contain, and are aptly called, the ratio decidendi (or reason for the decision) and, in this sense, assume a lesser role in carrying into effect the tribunals dispos ition of the case.

When a conflict exists between the dispositive portion and the opinion of the court in the text or body of the decision, the former must prevail over the latter under the rule that the dispositive portion is the definitive order, while the opinion is merely an explanatory statement without the effect of a directive. Hence, the execution must conform with what the fallo or dispositive portion of the decision ordains or decrees. Significantly, no claim or issue has arisen regarding the fallo of the labor tribunals and the CAs ruling on the merits of t he original case. We quote below the fallo of these rulings, which this Court ultimately sustained. LA ruling: WHEREFORE, premises considered, respondents are hereby declared guilty of ILLEGAL DISMISSAL and ordered to reinstate complainant to his former position with full backwages and without loss of seniority rights and other benefits which to date amounts (sic) to Six Hundred Thirty Six Thousand and Six Hundred Thirty Three Pesos and Thirty Three Centavos (P636,633.33). Further, respondents are jointly and severally liable to pay the following: 1. P18,080 as reimbursement for food and transportation allowance; 2. Five Hundred Thousand (P500,000.00) Pesos as moral damages; 3. Two Hundred Fifty Thousand (P250,000.00) Pesos as exemplary damages; and 4. 10% of all sums owing to complainant as attorneys fees.13 (emphasis and underscoring ours) NLRC Ruling: WHEREFORE, premises considered, the decision under review is hereby, MODIFIED by REDUCING the amount of moral and exemplary damages due the complainant to the sum of P100,000.00 an P50,000.00, respectively. Further, joint and several liability for the payment of backwages, food and transportation allowance and attorneys fees as a djudged in the appealed decision is hereby imposed only upon respondents Allen Querubin and Solid Cement Corporation, the latter having a personality which is distinct and separate from its officers. The relief of reinstatement is likewise, AFFIRMED.14 CA Ruling: IN VIEW OF ALL THE FOREGOING, the instant petition is hereby dismissed for lack of merit. Accordingly, the decision of the Second Division of the NLRC dated 26 March 2002 in NLRC CA No. 027452-01 is hereby AFFIRMED.15 We affirmed the CA ruling on the original case in the final recourse to us; thus, on the merits, the judgment in Gonza les favor is already final. From that point, only the implementation or execution of the fallo of the final ruling remained to be done. Re-computation of awards during execution of an illegal dismissal decision On the execution aspect of an illegal dismissal decision, the case of Session Delights Ice Cream and Fast Foods v. Court of Appeals (Sixth Division),16 despite its lack of a complete factual congruence with the present case, serves as a good guide on how to approach the execution of an illegal dismissal decision that contains a monetary award. In Session Delights, the LA found that the employee had been illegally dismissed and consequently ordered the payment of separation pay (in lieu of reinstatement), backwages, 13th month pay, and indemnity, all of which the LA itemized and computed as of the time of his decision. The NLRC and the CA affirmed the LAs decision on appellate review, except that the CA del eted the award for 13th month pay and indemnity. In due course, the CA decision became final. During the execution stage of the decision, the LA arrived at an updated computation of the final awards that included additional backwages, separation pay (computed from the date of the LA decision to the finality of the ruling on the case) and 13th month pay. This updated computation was affirmed by the NLRC and by the CA, except for the latters deletion of the 13th month pay award .

Session Delights went to this Court raising the issue of whether the original fallo of the LAs decision on the merits at that point already final could still be re-computed. After stating that only the monetary awards of backwages, separation pay, and attorneys fees required active enforcement and re-computation, the Court stated: A source of misunderstanding in implementing the final decision in this case proceeds from the way the original labor arbiter framed his decision. The decision consists essentially of two parts. The first is x x x the finding of the illegality of the dismissal and the awards of separation pay in lieu of reinstatement, backwages, attorneys fees, and legal interests. The second part is the computation of the awards made. On its face, the computation the labor arbiter made shows that it was timebound as can be seen from the figures used in the computation. This part, being merely a computation of what the first part of the decision established and declared, can, by its nature, be re-computed. x x x. xxxx However, the petitioner disagreed with the labor arbiters findings on all counts i.e., on the finding of illegality as well as on all the consequent awards made. Hence, the petitioner appealed the case to the NLRC which, in turn, affirmed the labor ar biters decision. x x x. The petitioner appropriately sought to nullify the NLRC decision on jurisdictional grounds through a timely filed Rule 65 petition for certiorari. The CA decision, finding that NLRC exceeded its authority in affirming the payment of 13th month pay and indemnity, lapsed to finality and was subsequently returned to the labor arbiter of origin for execution. It was at this point that the present case arose. Focusing on the core illegal dismissal portion of the original labor arbite rs decision, the implementing labor arbiter ordered the award re-computed; he apparently read the figures originally ordered to be paid to be the computation due had the case been terminated and implemented at the labor arbiters level. Thus, the labor arbite r re-computed the award to include the separation pay and the backwages due up to the finality of the CA decision that fully terminated the case on the merits. Unfortunately, the labor arbiters approved computation went beyond the finality of the CA decis ion (July 29, 2003) and included as well the payment for awards the final CA decision had deleted specifically, the proportionate 13th month pay and the indemnity awards. Hence, the CA issued the decision now questioned in the present petition. We see no error in the CA decision confirming that a re-computation is necessary as it essentially considered the labor arbiters original decision in accordance with its basic component parts as we discussed above. To reiterate, the first part contains the finding of illegality and its monetary consequences; the second part is the computation of the awards or monetary consequences of the illegal dismissal, computed as of the time of the labor arbiters original decision. xxxx x x x. What the petitioner simply disputes is the re-computation of the award when the final CA decision did not order any recomputation while the NLRC decision that the CA affirmed and the labor arbiter decision the NLRC in turn affirmed, already made a computation that on the basis of immutability of judgment and the rule on execution of the dispositive portion of the decision should not now be disturbed. Consistent with what we discussed above, we hold that under the terms of the decision under execution, no essential change is made by a re-computation as this step is a necessary consequence that flows from the nature of the illegality of dismissal declared in that decision. A re-computation (or an original computation, if no previous computation has been made) is a part of the law specifically, Article 279 of the Labor Code and the established jurisprudence on this provision that is read into the decision. By the nature of an illegal dismissal case, the reliefs continue to add on until full satisfaction, as expressed under Article 279 of the Labor Code. The re-computation of the consequences of illegal dismissal upon execution of the decision does not constitute an alteration or amendment of the final decision being implemented. The illegal dismissal ruling stands; only the computation of monetary consequences of this dismissal is affected and this is not a violation of the principle of immutability of final judgments. x x x The core issue in this case is not the payment of separation pay and backwages but their re-computation in light of an original labor arbiter ruling that already contained a dated computation of the monetary consequences of illegal dismissal. That the amount the petitioner shall now pay has greatly increased is a consequence that it cannot avoid as it is the risk that it ran when it continued to seek recourses against the labor arbiters decision. Article 279 provides for the consequences of illega l dismissal in no uncertain terms, qualified only by jurisprudence in its interpretation of when separation pay in lieu of reinstatement is allowed. When that happens, the finality of the illegal dismissal decision becomes the reckoning point instead of the reinstatement that the law decrees. In allowing separation pay, the final decision effectively declares that the employment relationship ended so that separation pay and backwages are to be computed up to that point. The decision also becomes a judgment for money from which another consequence flows the payment of interest in case of delay. This was what the CA correctly decreed when it

provided for the payment of the legal interest of 12% from the finality of the judgment, in accordance with our ruling in Eastern Shipping Lines, Inc. v. Court of Appeals.17 (emphases ours, italics supplied) The re-computation of the amounts still due took off from the LAs decision that contained the itemized and computed dispositive portion as of the time the LA rendered his judgment. It was necessary because time transpired between the LAs decision and the final termination of the case on appeal, during which time the illegally dismissed employee should have been paid his salary and benefit entitlements. The present case, of course, is not totally the same as Session Delights. At the most obvious level, separation pay is not an issue here as reinstatement, not separation from service, is the final directive; Gonzales was almost immediately reinstated pending appeal, although only by way of a payroll reinstatement as allowed by law. Upon the finality of the decision on the appeal, Gonzales was actually reinstated. Although backwages was an issue in both cases, the thrusts of this issue in the two cases were different. In Session Delights, the issue was more on whether the award would be confined to what the LA originally awarded or would continue to run during the period of appeal. This is not an issue in the present case, since Gonzales received his salary and benefit entitlements during his payroll reinstatement; the general concern in the present case is more on the items that should be included in the award, part of which are the backwages. In other words, the current petition only generally involves a determination of the scope of the awards that include the backwages. The following were the demanded items: 1. Additional backwages from the LAs decision (on the merits) until Gonzales was payroll reinstated; 2. Seniority rights a. longevity pay/loyalty/service award b. general annual bonus c. annual birthday gift d. bereavement assistance; 3. Other benefits a. vacation and sick leave b. holiday pay; 4. Other allowances a. monetary equivalent of rice allowance (from October 1999 to July 2005) which should be included in computing backwages b. monetary equivalent of yearly medical allowance from 2000 to July 2005 which should be included in computing backwages c. meal allowance d. uniform and clothing allowance e. transportation, gasoline and representation allowance; 5. 13th month pay for the years 2000 and 2001; 6. Salary differentials; 7. Damages; 8. Interest on the computed judgment award; and

9. Attorneys fees.18 The LA and the NLRC uniformly excluded some of these items from the awards they made and we could have dismissed the current petition outright on the issue of entitlement to these benefits, since entitlement mainly involves questions of fact which a Rule 45 petition generally does not allow. A deeper consideration of the current petition, however, shows that there is more beyond the factual issues of entitlement that are evident on the surface. To recall, the NLRC differed from the LA on the actual details of implementation and modified the latters ruling by including Additional backwages from Dec. 13, 2000 to Jan. 21, 2001 P 50, 800.0019 Salary differentials from year 2000 until August 2008 617,517.48 13th month pay differential 51,459.79 13th month pay for years 2000 and 2001 80,000.00 12% interest from July 12, 2005 878,183.42 The CA, in its own Rule 65 review of the NLRC ruling, effectively found that the NLRC acted outside its jurisdiction when it modified the LAs execution order and, on this basis, ruled for the implementation of what the LA ordered. Under this situation and in the context of the Rule 45 petition before us, the reviewable issue before us is whether the CA was legally correct in finding that the NLRC acted outside its jurisdiction when it modified the LAs execution order. This is the issue on which our assailed Resolutions would rise or fall. For, indeed, a Rule 45 petition which seeks a review of the CA decision on a Rule 65 petition should be reviewed "from the prism of whether the CA correctly determined the presence or absence of grave abuse of discretion in the NLRC decision."20 In short, we do not rule whether the CA committed grave abuse of discretion; rather, we rule on whether the CA correctly determined the absence or presence of grave abuse of discretion by the NLRC. The components of the backwages a. Salary and 13th month differential due after dismissal In the case of BPI Employees Union Metro Manila and Zenaida Uy v. Bank of the Philippine Islands and Bank of the Philippine Islands v. BPI Employees Union Metro Manila and Zenaida Uy,21 the Court ruled that in computing backwages, salary increases from the time of dismissal until actual reinstatement, and benefits not yet granted at the time of dismissal are excluded. Hence, we cannot fault the CA for finding that the NLRC committed grave abuse of discretion in awarding the salary differential amounting to P617,517.48 and the 13th month pay differentials amounting to P51,459.48 that accrued subsequent to Gonzales dismissal. b. Legal interest of 12% on total judgment However, based on the same BPI case, Gonzales is entitled to 12% interest on the total unpaid judgment amount, from the time the Courts decision (on the merits in the original case) became final. When the CA reversed the NLRC and reinstated the LAs ruling (which did not order payment of interest), the CA overstepped the due bounds of its jurisdiction under a certiorari petition as it acted on the basis of wrong considerations and outside the contemplation of the law on the legal interests that final orders and rulings on forbearance of money should bear. In a certiorari petition, the scope of review is limited to the determination of whether a judicial or quasi-judicial tribunal acted without or in excess of its jurisdiction or grave abuse of discretion amounting to lack of jurisdiction; such grave abuse of discretion can exist when the ruling entity used the wrong considerations and thereby acted outside the contemplation of law. In justifying the return to and adoption of the LAs execution order, the CA solely relied on the doctrine of immutability of judgment which it considered to t he exclusion of other attendant and relevant factors. This is a fatal error that amounted to grave abuse of discretion, particularly on the award of 12% interest. The seminal case of Eastern Shipping Lines, Inc. v. Court of Appeals 22 cannot be clearer on the rate of interest that applies: 3. When the judgment of the court awarding a sum of money becomes final and executory, the rate of legal interest x x x shall be 12% per annum from such finality until its satisfaction, this interim period being deemed to be by then an equivalent to a forbearance of credit.23 (emphasis ours) In BPI, we even said that "this natural consequence of a final judgment is not defeated notwithstanding the fact that the parties were at variance in the computation of what is due"24 under the judgment. In the present case, the LAs failure to include this award in its

order was properly corrected by the NLRC on appeal, only to be unreasonably deleted by the CA. Such deletion, based solely on the immutability of the judgment in the original case, is a wrong consideration that fatally afflicts and renders the CAs ru ling void. c. Additional backwages and 13th month pay We reach the same conclusion on the other deletions the CA made, particularly on the deletion of the 13th month pay for 20002001, amounting to P80,000.00, and the additional backwages for the period of December 13, 2000 to January 21, 2001, amounting to P50,800.00. We note in this regard that the execution proceedings were conducted before the LA issued an Order requiring the payment of P965,014.15 in Gonzales favor. An appeal of this computation to the NLRC to question the LAs determination of the amount due throws the LAs determination wide open for the NLRCs review. In granting these monetary reliefs, the NLRC reason ed that Since there is no showing that complainant was paid his salaries from the time when he should have been immediately reinstated until his payroll reinstatement, he is entitled thereto.25 (emphasis ours) To be sure, if the NLRCs findings had been arrived at arbitrarily or in disregard of the evidence on record, the CA would have been right and could have granted the petition for certiorari on the finding that the NLRC made a factual finding not supported by substantial evidence.26 The CA, in fact, did not appear to have looked into these matters and did not at all ask whether the NLRCs findings on the awarded monetary benefits were supported by substantial evidence. This omission, however, did not render the NLRCs ruling defective as Jimenez v. NLRC, et al.27 teaches us that On the first issue, we find no reason to disturb the findings of respondent NLRC that the entire amount of commissions was not paid, this by reason of the evident failure of herein petitioners to present evidence that full payment thereof has been made. It is a basic rule in evidence that each party must prove his affirmative allegations. Since the burden of evidence lies with the party who asserts an affirmative allegation, the plaintiff or complainant has to prove his affirmative allegation, in the complaint and the defendant or respondent has to prove the affirmative allegations in his affirmative defenses and counterclaim. Considering that petitioners herein assert that the disputed commissions have been paid, they have the bounden duty to prove that fact. As a general rule, one who pleads payment has the burden of proving it.1wphi1 Even where the plaintiff must allege non-payment, the general rule is that the burden rests on the defendant to prove payment, rather than on the plaintiff to prove non-payment. The debtor has the burden of showing with legal certainty that the obligation has been discharged by payment. When the existence of a debt is fully established by the evidence contained in the record, the burden of proving that it has been extinguished by payment devolves upon the debtor who offers such a defense to the claim of the creditor. Where the debtor introduces some evidence of payment, the burden of going forward with the evidence as distinct from the general burden of proof shifts to the creditor, who is then under a duty of producing some evidence to show non-payment.28 (emphases ours, citations omitted) Thus, even without proof of nonpayment, the NLRC was right in requiring the payment of the 13th month pay and the salaries due after the LAs decision until the illegally dismissed petitioner was reinstated in the payroll, i.e., from December 13, 2000 to January 21, 2001. It follows that the CA was wrong when it concluded that the NLRC acted outside its jurisdiction by including these monetary awards as items for execution. These amounts are not excluded from the concept of backwages as the salaries fell due after Gonzales should have been reinstated, while the 13th month pay fell due for the same period by legal mandate. These are entitlements that cannot now be glossed over if the final decision on the merits in this case were to be respected. The Legal Obstacle: the prohibition on 2nd motion for reconsideration The above discussions unavoidably lead to the conclusion that the Courts Minute Resolutions denying Gonzales petition were not properly issued and are tainted by the nullity of the CA decision these Resolutions effectively approved. We do not aim to defend these actions, however, by mechanically and blindly applying the principle of immutability of judgment, nor by tolerating the CAs inappropriate application of this principle. The immutability principle, rather than being absolute, is subject to well-settled exceptions, among which is its inapplicability when a decision claimed to be final is not only erroneous, but null and void. We cannot also be oblivious to the legal reality that the matter before us is no longer the validity of Gonzales dismissal a nd the legal consequences that follow matters long laid to rest and which we do not and cannot now disturb. Nor is the matter before us the additional monetary benefits that Gonzales claims in his petition, since these essentially involve factual matters that are beyond a Rule 45 petition to rule upon and correct.

The matter before us in the Rule 45 petition questioning the CAs Rule 65 determination is the scope of the benefits awarded by the LA, as modified on appeal and ultimately affirmed by this Court, which ruling has become final and which now must be implemented as a matter of law. Given these considerations, to reopen this case on second motion for reconsideration would not actually embroil the Court with changes in the decision on the merits of the case, but would confine itself solely to the issue of the CAs actions in the course of determining lack or excess of jurisdiction or the presence of grave abuse of discretion in reviewing the NLRCs ruling on the execution aspect of the case. Additionally, while continued consideration of a case on second motion for reconsideration very strongly remains an exception, our action in doing so in this case is not without sound legal justification.29 An order of execution that varies the tenor of a final and executory judgment is null and void.30 This was what the CA effectively did it varied the final and executory judgment of the LA, as modified on appeal and ultimately affirmed by the Court. We would simply be enforcing our own Decision on the merits of the original case by nullifying what the CA did. Viewed in these lights, the recognition of, and our corrective action on, the nullity of the CAs ruling on the current petition is a duty this Court is under obligation to undertake pursuant to Section 1, Article VIII of the Constitution. We undertake this corrective action by restoring what the CA should have properly recognized to be covered by the Decision on the merits of the original case. WHEREFORE, premises considered, in lieu of our Minute Resolutions of November 16, 2011 and February 27, 2012 which we hereby vacate, we hereby PARTIALLY GRANT the petition and DIRECT the payment of the following deficiencies in the payments due petitioner Leo Gonzales under the Labor Arbiters Order of August 18, 2009: 1. 13th month pay for the years 2000 and 2001; 2. Additional backwages from December 13, 2000 until January 21, 2001; and 3. 12% interest on the total judgment award from the time of the judgments finality on July 12, 2005 until the total award i s fully paid. The Labor Arbiter is hereby DIRECTED to issue the appropriate writ of execution incorporating these additional awards to those reflected in his Order of August 18, 2009. Costs against respondents Solid Cement Corporation and Allen Querubin. SO ORDERED. ARTURO D. BRION Associate Justice WE CONCUR: MARIA LOURDES P. A. SERENO Chief Justice

(On Leave) ANTONIO T. CARPIO* Associate Justice TERESITA J. LEONARDO-DE CASTRO Associate Justice

PRESBITERO J. VELASCO, JR. Associate Justice

DIOSDADO M. PERALTA Associate Justice (On Leave) MARIANO C. DEL CASTILLO* Associate Justice MARTIN S. VILLARAMA, JR. Associate Justice

LUCAS P. BERSAMIN Associate Justice

ROBERTO A. ABAD Associate Justice

(On Leave) JOSE PORTUGAL PEREZ* Associate Justice BIENVENIDO L. REYES Associate Justice

JOSE CATRAL MENDOZA Associate Justice

ESTELA M. PERLAS-BERNABE Associate Justice

CERTIFICATION Pursuant to Section 13, A11icle VIII of the Constitution, l certify that the conclusions in the above Resolution had been reached in consultation before the case was assigned to the writer of the opinion of the Court.

Footnotes
*

On official leave. Rollo, pp. 616-619. Id. at 17. Id. at 141. Id. at 142. Id. at 16. Id. at 19. Id. at 310. Id. at 312-326. Id. at 329. Rule 37, Section 5, par. 2. Mocorro, Jr. v. Ramirez, G.R. No. 178366, July 28, 2008, 560 SCRA 362, 372-373. Id. at 373; emphases ours. Rollo, p. 16. Id. at 17. Id. at 18. G.R. No. 172149, February 8, 2010, 612 SCRA 10. Id. at 21-27. Rollo, pp. 44-70.

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Supra note 9.

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Montoya v. Transmed Manila Corporation, G.R. No. 183329, August 27, 2009, 597 SCRA 334, 342-343, cited in Mercado v. AMA Computer College-Paraaque City, Inc., G.R. No. 183572, April 13, 2010, 618 SCRA 218, 232-233.
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G.R. Nos. 178699 and 178735, September 21, 2011. G.R. No. 97412, July 12, 1994, 234 SCRA 78. Id. at 97. Supra note 21. Decision dated February 19, 2010; rollo, p. 321. Prince Transport, Inc. v. Garcia, G.R. No. 167291, January 12, 2011, 639 SCRA 312, 325. 326 Phil. 89 (1996). Id. at 95. Resolution, Muoz v. Court of Appeals, G.R. No. 125451, August 22, 2001. INIMACO v. NLRC, 387 Phil. 659, 667 (2000). January 21, 2013

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G.R. No. 199338

ELEAZAR S. PADILLO,** Petitioner vs. RURAL BANK OF NABUNTURAN, INC. and MARK S. OROPEZA, Respondents. DECISION PERLAS-BERNABE, J.: Before the Court is a Petition for Review on Certiorari1 assailing the June 28, 2011 Decision2 and October 27, 2011 Resolution3 of the Cagayan de Oro City Court of Appeals (CA) in CA-G.R. SP No 03669-MIN which revoked and set aside the National Labor Relations Commission's (NLRCs) Resolutions dated December 29, 20094 and March 31, 20105 and reinstated the Labor Arbiter's (LA's) Decision dated March 13, 20096 with modification. The Facts On October 1, 1977, petitioner, the late Eleazar Padillo (Padillo), was employed by respondent Rural Bank of Nabunturan, Inc. (Bank) as its SA Bookkeeper. Due to liquidity problems which arose sometime in 2003, the Bank took out retirement/insurance plans with Philippine American Life and General Insurance Company (Philam Life) for all its employees in anticipation of its possible closure and the concomitant severance of its personnel. In this regard, the Bank procured Philam Plan Certificate of Full Payment No. 88204, Plan Type 02FP10SC, Agreement No. PP98013771 (Philam Life Plan) in favor of Padillo for a benefit amount of P100,000.00 and which was set to mature on July 11, 2009.7 On October 14, 2004, respondent Mark S. Oropeza (Oropeza), the President of the Bank, bought majority shares of stock in the Bank and took over its management which brought about its gradual rehabilitation. The Banks finances improved and eventually, its liquidity was regained.8 During the latter part of 2007, Padillo suffered a mild stroke due to hypertension which consequently impaired his ability to effectively pursue his work. In particular, he was diagnosed with Hypertension S/P CVA (Cerebrovascular Accident) with short term memory loss, the nature of which had been classified as a total disability.9 On September 10, 2007, he wrote a letter addressed to respondent Oropeza expressing his intention to avail of an early retirement package. Despite several follow-ups, his request remained unheeded.

On October 3, 2007, Padillo was separated from employment due to his poor and failing health as reflected in a Certification dated December 4, 2007 issued by the Bank. Not having received his claimed retirement benefits, Padillo filed on September 23, 2008 with the NLRC Regional Arbitration Branch No. XI of Davao City a complaint for the recovery of unpaid retirement benefits. He asserted, among others, that the Bank had adopted a policy of granting its aging employees early retirement packages, pointing out that one of his co-employees, Nenita Lusan (Lusan), was accorded retirement benefits in the amount of P348,672.7210 when she retired at the age of only fifty-three (53). The Bank and Oropeza (respondents) countered that the claim of Padillo for retirement benefits was not favorably acted upon for lack of any basis to grant the same. 11 The LA Ruling On March 13, 2009, the LA issued a Decision12 dismissing Padillos complaint but directed the Bank to pay him the amount of P100,000.00 as financial assistance, treated as an advance from the amounts receivable under the Philam Life Plan. 13 It found Padillo disqualified to receive any benefits under Article 300 (formerly, Article 287) of the Labor Code of the Philippines (Labor Code)14 as he was only fifty-five (55) years old when he resigned, while the law specifically provides for an optional retirement age of sixty (60) and compulsory retirement age of sixty-five (65). Dissatisfied with the LAs ruling, Padillo elevated the matter to the NLRC. The NLRC Ruling On December 29, 2009, the NLRCs Fifth Division reversed and set aside the LAs ruling and ordered respondents to pay Padillo the amount of P164,903.70 as separation pay, on top of the P100,000.00 Philam Life Plan benefit.15 Relying on the case of Abaquin Security and Detective Agency, Inc. v. Atienza (Abaquin),16 the NLRC applied the Labor Code provision on termination on the ground of disease particularly, Article 297 thereof (formerly, Article 323) holding that while Padillo did resign, he did so only because of his poor health condition.17Respondents moved for reconsideration but the same was denied by the NLRC in its Resolution dated March 31, 2010.18 Aggrieved, respondents filed a petition for certiorari with the CA. The CA Ruling On June 28, 2011, the CA granted respondents petition for certiorari and rendered a decision setting aside the NLRCs December 29, 2009 and March 31, 2010 Resolutions, thereby reinstating the LAs March 13, 2009 Decision but with modification. It direc ted the respondents to pay Padillo the amount of P50,000.00 as financial assistance exclusive of the P100,000.00 Philam Life Plan benefit which already matured on July 11, 2009. The CA held that Padillo could not, absent any agreement with the Bank, receive any retirement benefits pursuant to Article 300 of the Labor Code considering that he was only fifty-five (55) years old when he retired.19 It likewise found the evidence insufficient to prove that the Bank has an existing company policy of granting retirement benefits to its aging employees. Finally, citing the case of Villaruel v. Yeo Han Guan (Villaruel),20 it pronounced that separation pay on the ground of disease under Article 297 of the Labor Code should not be given to Padillo because he was the one who initiated the severance of his employment and that even before September 10, 2007, he already stopped working due to his poor and failing health. 21 Nonetheless, Padillo was still awarded the amount of P50,000.00 as financial assistance, in addition to the benefits accruing under the Philam Life Plan, considering his twenty-nine (29) years of service with no derogatory record and that he was severed not by reason of any infraction on his part but because of his failing physical condition. 22 Displeased with the CAs ruling, Padillo (now substituted by his legal heirs due to his death on February 24, 2012) filed the instant petition contending that the CA erred when it: (a) deviated from the factual findings of the NLRC; (b) misapplied the case of Villaruel vis--vis the factual antecedents of this case; (c) drastically reduced the computation of financial assistance awarded by the NLRC; (d) failed to rule on the consequences of respondents bad faith; and (e) reversed and set aside the NLRCs December 29, 2009 Resolution.23 The Ruling of the Court The petition is partly meritorious. At the outset, it must be maintained that the Labor Code provision on termination on the ground of disease under Article 297 24 does not apply in this case, considering that it was the petitioner and not the Bank who severed the employment relations. As borne from the records, the clear import of Padillos September 10, 2007 letter25 and the fact that he stopped working before the foregoing date and never reported for work even thereafter show that it was Padillo who voluntarily retired and that he was not terminated by the Bank. As held in Villaruel,26 a precedent which the CA correctly applied, Article 297 of the Labor Code contemplates a situation where the employer, and not the employee, initiates the termination of employment on the ground of the latters disease or sickness, viz:

A plain reading of the [Article 297 of the Labor Code] clearly presupposes that it is the employer who terminates the services of the employee found to be suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health as well as to the health of his co-employees. It does not contemplate a situation where it is the employee who severs his or her employment ties. This is precisely the reason why Section 8, Rule 1, Book VI of the Omnibus Rules Implementing the Labor Code, directs that an employer shall not terminate the services of the employee unless there is a certification by a competent public health authority that the disease is of such nature or at such a stage that it cannot be cured within a period of six (6) months even with proper medical treatment. (Emphasis, underscoring and words in brackets supplied) Thus, given the inapplicability of Article 297 of the Labor Code to the case at bar, it n ecessarily follows that petitioners claim for separation pay anchored on such provision must be denied. Further, it is noteworthy to point out that the NLRCs application of Abaquin27 was gravely misplaced considering its dissimilar factual milieu with the present case. To elucidate, a careful reading of Abaquin shows that the Court merely awarded termination pay on the ground of disease in favor of security guard28 Antonio Jose because he belonged to a "special class of employees x x x deprived of the right to ventilate demands collectively."29 Thus, notwithstanding the fact that it was Antonio Jose who voluntarily resigned because of his sickness and it was not the security agency which terminated his employment, the Court held that Jose "deserve[d] the full measure of the laws benevolence" and still granted him separation pay because of his situation, particularly, the fact that he could not have organized with other employees belonging to the same class for the purpose of bargaining with their employer for greater benefits on account of the prohibition under the old law. In this case, it cannot be said that Padillo belonged to the same class of employees prohibited to self-organize which, at present, consist of: (1) managerial employees;30 and (2) confidential employees who assist persons who formulate, determine, and effectuate management policies in the field of labor relations.31 Therefore, absent this equitable peculiarity, termination pay on the ground of disease under Article 297 of the Labor Code and the Courts ruling in Abaquin should not be applied. What remains applicable, however, is the Labor Code provision on retirement. In particular, Article 300 of the Labor Code as amended by Republic Act Nos. 764132 and 855833 partly provides: Art. 300. Retirement. Any employee may be retired upon reaching the retirement age established in the collective bargaining agreement or other applicable employment contract. In case of retirement, the employee shall be entitled to receive such retirement benefits as he may have earned under existing laws and any collective bargaining agreement and other agreements: Provided, however, That an employee's retirement benefits under any collective bargaining and other agreements shall not be less than those provided herein. 1wphi1 In the absence of a retirement plan or agreement providing for retirement benefits of employees in the establishment, an employee upon reaching the age of sixty (60) years or more, but not beyond sixty-five (65) years which is hereby declared the compulsory retirement age, who has served at least five (5) years in the said establishment, may retire and shall be entitled to retirement pay equivalent to at least one-half (1/2) month salary for every year of service, a fraction of at least six (6) months being considered as one whole year. Unless the parties provide for broader inclusions, the term one half (1/2) month salary shall mean fifteen (15) days plus one-twelfth (1/12) of the 13th month pay and the cash equivalent of not more than five (5) days of service incentive leaves. (Emphasis and underscoring supplied) Simply stated, in the absence of any applicable agreement, an employee must (1) retire when he is at least sixty (60) years of age and (2) serve at least (5) years in the company to entitle him/her to a retirement benefit of at least one-half (1/2) month salary for every year of service, with a fraction of at least six (6) months being considered as one whole year. Notably, these age and tenure requirements are cumulative and non-compliance with one negates the employees entitlement to the retirement benefits under Article 300 of the Labor Code altogether. In this case, it is undisputed that there exists no retirement plan, collective bargaining agreement or any other equivalent contract between the parties which set out the terms and condition for the retirement of employees, with the sole exception of the Philam Life Plan which premiums had already been paid by the Bank. Neither was it proven that there exists an established company policy of giving early retirement packages to the Banks aging employees. In the case of Metropolitan Bank and Trust Company v. National Labor Relations Commission, it has been pronounced that to be considered a company practice, the giving of the benefits should have been done over a long period of time, and must be shown to have been consistent and deliberate. 34 In this relation, petitioners bare allegation of the solitary case of Lusan cannot assuming such fact to be true sufficiently establish that the Banks grant of an early retirement package to her (Lusan) evolved into

an established company practice precisely because of the palpable lack of the element of consistency. As such, petitioners r eliance on the Lusan incident cannot bolster their claim. All told, in the absence of any applicable contract or any evolved company policy, Padillo should have met the age and tenure requirements set forth under Article 300 of the Labor Code to be entitled to the retirement benefits provided therein. Unfortunately, while Padillo was able to comply with the five (5) year tenure requirement as he served for twenty-nine (29) years he, however, fell short with respect to the sixty (60) year age requirement given that he was only fifty-five (55) years old when he retired. Therefore, without prejudice to the proceeds due under the Philam Life Plan, petitioners claim for retirement benefits must be denied. Nevertheless, the Court concurs with the CA that financial assistance should be awarded but at an increased amount. With a veritable understanding that the award of financial assistance is usually the final refuge of the laborer, considering as well the supervening length of time which had sadly overtaken the point of Padillos death an employee who had devoted twenty-nine (29) years of dedicated service to the Bank the Court, in light of the dictates of social justice, holds that the CAs financial assistance award should be increased from P50,000.00 to P75,000.00, still exclusive of the P100,000.00 benefit receivable by the petitioners under the Philam Life Plan which remains undisputed.1wphi1 Finally, the Court finds no bad faith in any of respondents actuations as they were within their right, absent any proof of its abuse, to ignore Padillos misplaced claim for retirement benefits. Respondents obstinate refusal to accede to Padillos request is precisely justified by the fact that there lies no basis under any applicable agreement or law which accords the latter the right to demand any retirement benefits from the Bank. While the Court mindfully notes that damages may be recoverable due to an abuse of right under Article 2135 in conjunction with Article 19 of the Civil Code of the Philippines, 36 the following elements must, however, obtain: ( 1) there is a legal right or duty; (2) exercised in bad faith; and (3) for the sole intent of prejudicing or injuring another. 37Records reveal that none of these elements exists in the case at bar and thus, no damages on account of abuse of right may he recovered. Neither can the grant of an early retirement package to Lusan show that Padillo was unfairly discriminated upon. Records show that the same was merely an isolated incident and petitioners have failed to show that any had faith or motive attended such disparate treatment between Lusan and Padillo. lrrefragably also, there is no showing that other Bank employees were accorded the same benefits as that of Lusan which thereby dilutes the soundness of petitioners' imputation of discrimination and bad faith. Verily, it is axiomatic that held f8ith can never be presumed it must be proved by clear and convincing evidence.38 This petitioners were unable to prove in the case at bar. WHEREFORE, the petition is PARTLY GRANTED. Accordingly, the assailed Court of Appeals' Decision dated June 28, 2011 Decision and October 27, 2011 Resolution in CA-G.R. SP No. 03669-MIN are hereby MODIFIED, increasing the 8Ward of financial assist8nce of F50,000.00 to P75,000.00, exclusive of the P 100,000.00 benefit under the Phil am Life Plan. SO ORDERED. ESTELA M. PERLAS-BERNABE Associate Justice WE CONCUR: ANTONIO T. CARPIO Associate Justice Chairperson MARIANO C. DEL CASTILLO Associate Justice JOSE PORTUGAL PEREZ Associate Justice

MARVIC MARIO VICTOR F. LEONEN* Associate Justice ATTESTATION I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court's Division. ANTONIO T. CARPIO Associate Justice Chairperson, Second Division

CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution. and the Division Chairperson's Attestation. I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court's Division. MARIA LOURDES P. A. SERENO Chief Justice

Footnotes
*

Designated Additional Member per Special Order No. 1408 dated January 15, 2013.

**

Eleazar Padillo passed away last February 24, 2012 and had been substituted in this case by his heirs Anita Giuillena Paldillo. Lynette Padillo Banayo, Earvin G. Padillo, Marco Antonio G. Padillo, Anileebeth G. Padillo and Patrick Ray G. Padillo. See rollo, pp. 187-198, 221.
1

Id. at 8-19.

Id. at 20-36, penned by Associate Justice Pamela Ann A. Maxino, with Associate Justices Edgardo T. Lloren and Zenaida T. Galapate-Laguilles, concurring.
3

Id. at 44-47. Amended by CA Resolution dated November 28, 2011.

ld. at 92-99. Penned by Commissioner Proculo T. Sarmen, with Presiding Commissioner Salic B. Dumarpa and Dominador B. Medroso. Jr., concurring.
5

Id. at 109-111. Id. at 79-85. Penned by Labor Arbiter Miriam A. Libron-Barroso. Id. at 76. Id. at 22, 69. Id. at 61. Id. at 23, 63. Id. at 24. Supra note 6. Id. at 85. As amended by Republic Act No. 8558 and further renumbered to Article 300 pursuant to Republic Act No. 10151. Supra note 4. G.R. No. 72971, October 15, 1990, 190 SCRA 460. Supra note 4, at 96. Supra note 5.

10

11

12

13

14

15

16

17

18

19

Id. at 29-31. G.R. No. 169191, June 1, 2011, 650 SCRA 64. Rollo, pp. 32-33. Id. at 35. Id. at 13-14.

20

21

22

23

24

Art. 297. Disease as Ground for Termination. An employer may terminate the services of an employee who has been found to be suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health as well as to the health of his co-employees: Provided, That he is paid separation pay equivalent to at least one (1) month salary or to one-half month salary for every year of service, whichever is greater, a fraction of at least six (6) months being considered as one (1) whole year.
25

Rollo, p. 60. Mr. Padillos September 10, 2007 Letter reads as follows: Sir/Madam Greetings! It is always my desire to be a good employee in your company. Working with RBN is a great honor and privilege that is why I remain faithful and loyal throughout my 31 years of service. RBN had given me the chance to prove my ability in my work and with the people Im working with whom I called my second family. Unfortunately, I just lately had a mild stroke due to hypertension and that causes me with some memory lapses that I am having a hard time to pursue with working in the bank. Though I am trying so hard to refresh and recover my memories with the nature of my job. Yet, I dont want that my co-workers and the operation of the bank might be affected with the adjustments I had undergone. I finally had decided then, that I have to take a rest of my body and mind for total recovery. With this regard, I am applying for an early retirement to hopefully regain normal health conditions. I am also requesting for the settlement of my retirement benefits with my employment in RBN. As a father, I am looking forward that my application and request will be granted soon so that the education of my two children in high school and one in college may not be affected of my becoming retired from employment. So as to aid the lifetime support of my daily requirements of medication. I am very hopeful for your kind consideration and understanding. Thank you Sincerely yours, [signature] ELEAZAR S. PADILLO Employee.

26

Supra note 20, at 70. Supra note 16.

27

28

Abaquin was decided on October 15, 1990, or before the subsequent amendments to the Labor Code. At that time, the old Article 245 of the Labor Code (which was originally designated as Article 291 in the first version of the Labor Code) read that "[s]ecurity guards and other personnel employed for the protection and security of the person, properties and premises of the employer shall not be eligible for membership in any labor organization." This provision has now been deleted. In fact, in the case of Manila Electric Company v. Secretary of Labor, G.R. No. 91902, May 20, 1991, 197 SCRA 275, 286, the Court ruled that security guards can now join labor organizations, viz:

x x x While therefore under the old rules, security guards were barred from joining a labor organization of the rank and file, under RA 6715, they may now freely join a labor organization of the rank and file or that of the supervisory union, depending on their rank. By accommodating supervisory employees, the Secretary of Labor must likewise apply the provisions of RA 6715 to security guards by favorably allowing them free access to a labor organization, whether rank and file or supervisory, in recognition of their constitutional right to selforganization. In relation, Section 18 of Republic Act No. 6715 reads: Sec. 18. Article 245 of the same Code, as amended, is hereby further amended to read as follows: Art. 245. Ineligibility of managerial employees to join any labor organization; right of supervisory employees. Managerial employees are not eligible to join, assist or form any labor organization. Supervisory employees shall not be eligible for membership in a labor organization of the rank-and-file employees but may join, assist or form separate labor organizations of their own.
29

Supra note 16, at 468. See Article 253 (formerly, Article 245) of the Labor Code, as amended.

30

31

See San Miguel Corporation Supervisors and Exempt Union v. Laguesma, G.R. No. 110399, August 15, 1997, 277 SCRA 370, 374.
32

AN ACT AMENDING ARTICLE 287 OF PRESIDENTIAL DECREE NO. 442, AS AMENDED, OTHERWISE KNOWN AS THE LABOR CODE OF THE PHILIPPINES, BY PROVIDING FOR RETIREMENT PAY TO QUALIFIED PRIVATE SECTOR EMPLOYEES IN THE ABSENCE OF ANY RETIREMENT PLAN IN THE ESTABLISHMENT.
33

AN ACT AMENDING ARTICLE 287 OF PRESIDENTIAL DECREE NO. 442, AS AMENDED, OTHERWISE KNOWN AS THE LABOR CODE OF THE PHILIPPINES, BY REDUCING THE RETIREMENT AGE OF UNDERGROUND MINE WORKERS FROM SIXTY (60) TO FIFTY(50).
34

G.R. No. 152928, June 18, 2009, 589 SCRA 376, 384.

35

Art. 21. Any person who willfully causes loss or injury to another in manner that is contrary to morals, good customs or public policy shall compensate the latter for the damage.
36

Art. 19. Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith.
37

Albenson Enterprises Corp. v. Court of Appeals, G.R. No. 88694, January 11, 1993, 217 SCRA 16, 25.

38

Gatmaitan v. Gonzales, G.R. No. 149226, June 26, 2006, 492 SCRA, 591, 604, citing Fernando v. Sto. Tomas, G.R. No. 112309, July 28, 1994, 234 SCRA 546. G.R. No. 201701 June 3, 2013

UNILEVER PHILIPPINES, INC., Petitioner, vs. MARIA RUBY M. RIVERA, Respondent. DECISION MENDOZA, J.: Subject of this disposition is the petition for review on certiorari1 under Rule 45 of the Rules of Court filed by petitioner Unilever Philippines, Inc. (Unilever) questioning the June 22, 2011 Decision2 and the April 25, 2012 Resolution3 of the Court of Appeals (CA)Cagayan de Oro City, in CA G.R. SP No. 02963-MIN, an Illegal Dismissal case filed by respondent Maria Ruby M. Rivera (Rivera). The CA affirmed with modification the March 31, 2009 Resolution of the National Labor Relations Commission (NLRC) finding Rivera's dismissal from work to be valid as it was for a just cause and declaring that she was not entitled to any retirement benefit. The CA, however, awarded separation pay in her favor as a measure of social justice.

The Facts Unilever is a company engaged in the production, manufacture, sale, and distribution of various food, home and personal care products, while Rivera was employed as its Area Activation Executive for Area 9 South in the cities of Cotabato and Davao. She was primarily tasked with managing the sales, distribution and promotional activities in her area and supervising Ventureslink International, Inc. (Ventureslink), a third party service provider for the companys activation projects. Unilever enforces a strict policy that every trade activity must be accompanied by a Trade Development Program (TDP) and that the allocated budget for a specific activity must be used for such activity only.4 Sometime in 2007, Unilevers internal auditor conducted a random audit and found out that there were fictitious billings and fabricated receipts supposedly from Ventureslink amounting to P11,200,000.00. It was also discovered that some funds were diverted from the original intended projects. Upon further verification, Ventureslink reported that the fund deviations were upon the instruction of Rivera. On July 16, 2007, Unilever issued a show-cause notice to Rivera asking her to explain the following charges, to wit: a) Conversion and Misappropriation of Resources; b) Breach of Fiduciary Trust; c) Policy Breaches; and d) Integrity Issues. Responding through an email, dated July 16, 2007, Rivera admitted the fund diversions, but explained that such actions were mere resourceful utilization of budget because of the difficulty of procuring funds from the head office. 5 She insisted that the diverted funds were all utilized in the companys promotional ventures in her area of coverage. Through a letter, dated August 23, 2007, Unilever found Rivera guilty of serious breach of the companys Code of Business Principles compelling it to sever their professional relations. In a letter, dated September 20, 2007, Rivera asked for reconsideration and requested Unilever to allow her to receive retirement benefits having served the company for fourteen (14) years already. Unilever denied her request, reasoning that the forfeiture of retirement benefits was a legal consequence of her dismissal from work. On October 19, 2007, Rivera filed a complaint for Illegal Dismissal and other monetary claims against Unilever. On April 28, 2008, the Labor Arbiter (LA) dismissed her complaint for lack of merit and denied her claim for retirement benefits, but ordered Unilever to pay a proportionate 13th month pay and the corresponding cash equivalent of her unused leave credits. The decretal portion of the LA decision reads: WHEREFORE, premises considered, judgment is hereby rendered dismissing for lack of merit the illegal dismissal complaint. However, UNILEVER PHILIPPINES, INC. is hereby ordered to pay complainant the total amount of PESOS: FIFTY SEVEN THOUSAND EIGHTY TWO & 90/100 ONLY (P57,082.90) representing proportionate 13th month pay and unused leave credits. The complaint against individual respondents Recto Sampang and Alejandro Concha are likewise dismissed for it was not shown that they acted in bad faith in the dismissal of complainant. Moreover, their legal personality is separate and distinct from that of the corporation. All other money claims are dismissed for lack of basis.6 On appeal, the NLRC partially granted Riveras prayer. In its Resolution, dated November 28, 2008, the NLRC held that althoug h she was legally dismissed from the service for a just cause, Unilever was guilty of violating the twin notice requirement in labor cases. Thus, Unilever was ordered to pay her P30,000.00 as nominal damages, retirement benefits and separation pay. The dispositive portion reads: WHEREFORE, foregoing premises considered, the appeal is PARTIALLY GRANTED. The assailed Decision dated 28 April 2008 is hereby MODIFIED in the sense that respondent UNILEVER PHILIPPINES, INC. is hereby ordered to pay the following sums: 1. The amount of P30,000.00 representing nominal damages for violation of complainants right to procedural due process; 2. Retirement benefits under the companys applicable retirement policy or written agreement, and in the absence of which, to pay complainant her 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; 3. Separation pay under the companys applicable policy or written agreement, and in the absence of which, to pay separation 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. The rest of the Decision is hereby AFFIRMED.

SO ORDERED.7 Unilever asked for a reconsideration of the NLRC decision. In its Resolution, dated March 31, 2009, the NLRC modified its earlier ruling by deleting the award of separation pay and reducing the nominal damages fromP30,000.00 to P20,000.00, but affirmed the award of retirement benefits to Rivera. The fallo reads: WHEREFORE, foregoing premises considered, the instant Motion for Partial Reconsideration is PARTLY GRANTED. The Resolution dated 28 November 2008 of the Commission is hereby RECONSIDERED as follows: (1)The award of separation pay is hereby deleted for lack of factual and legal basis; and (2)The award of nominal damages is hereby tempered and reduced to the amount of P20,000.00. The rest of the award for retirement benefits is affirmed in toto. SO ORDERED.8 Unsatisfied with the ruling, Unilever elevated the case to CA-Cagayan de Oro City via a petition for certiorari under Rule 65 of the Rules of Court. On June 22, 2011, the CA affirmed with modification the NLRC resolution. Justifying the deletion of the award of retirement benefits, the CA explained that, indeed, under Unilevers Retirement Plan, a validly dismissed employee cannot claim any retirement benefit regardless of the length of service. Thus, Rivera is not entitled to any retirement benefit. It stated, however, that there was no proof that she personally gained any pecuniary benefit from her infractions, as her instructions were aimed at increasing the sales efficiency of the company and competing in the local market. For said reason, the CA awarded separation pay in her favor as a measure of social justice.9 The decretal portion of the CA decision reads: WHEREFORE, the assailed Resolution dated March 31, 2009 of the NLRC (Branch 5), Cagayan De Oro City is hereby AFFIRMED with MODIFICATION. Consequently, UNILEVER is directed to pay MARIA RUBY M. RIVERA the following: a) Separation pay, to be computed based on the companys applicable policy or written agreement, or in the absence thereof, the equivalent of 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; b) P20,000.00 as nominal damages; and c) Proportionate 13th month pay and unused leave credits, to be computed based on her salary during the period relevant to the case. The award of retirement benefits is hereby DELETED. SO ORDERED.10 Unilever filed a motion for partial reconsideration,11 but it was denied in a Resolution, dated April 25, 2012. Hence, this petition.12 In support of its position, Unilever submits for consideration the following GROUNDS I. THE COURT OF APPEALS SERIOUSLY ERRED AND GRAVELY ABUSED ITS DISCRETION IN GRANTING AFFIRMATIVE RELIEFS IN FAVOR OF RIVERA EVEN IF SHE DID NOT FILE ANY PETITION FOR CERTIORARI TO CHALLENGE THE NLRC RESOLUTIONS.

II. THE COURT OF APPEALS SERIOUSLY ERRED AND GRAVELY ABUSED ITS DISCRETION IN AWARDING SEPARATION PAY IN FAVOR OF RIVERA CONSIDERING THAT THE LATTER WAS VALIDLY DISMISSED FROM EMPLOYMENT BASED ON JUST CAUSES UNDER THE LAW. III. THE COURT OF APPEALS SERIOUSLY ERRED AND GRAVELY ABUSED ITS DISCRETION IN RULING THAT THE COMPANY VIOLATED RIVERAS RIGHT TO PROCEDURAL DUE PROCESS BEFORE TERMINATING HER EMPLOYMENT, AND CONSEQUENTLY, IN AWARDING NOMINAL DAMAGES.13 Unilever argues that Rivera did not file any separate petition for certiorari before the CA. Neither did she file any comment on its petition. Hence, it was erroneous for the CA to grant an affirmative relief because it was inconsistent with the doctrine that a party who has not appealed cannot obtain from the appellate court any affirmative relief other than the ones granted in the appealed decision. The petitioner stresses that Rivera misappropriated company funds amounting to millions of pesos and that granting her separation pay undermines the serious misdeeds she committed against the company. Moreover, the length of her service with Unilever does not mitigate her offense, but even aggravates the depravity of her acts. 14 The petition is partly meritorious. The pivotal issue in the case at bench is whether or not a validly dismissed employee, like Rivera, is entitled to an award of separation pay. As a general rule, an employee who has been dismissed for any of the just causes enumerated under Article 282 15of the Labor Code is not entitled to a separation pay.16 Section 7, Rule I, Book VI of the Omnibus Rules Implementing the Labor Code provides: Sec. 7. Termination of employment by employer. The just causes for terminating the services of an employee shall be those provided in Article 282 of the Code. The separation from work of an employee for a just cause does not entitle him to the termination pay provided in the Code, without prejudice, however, to whatever rights, benefits and privileges he may have under the applicable individual or collective agreement with the employer or voluntary employer policy or practice. In exceptional cases, however, the Court has granted separation pay to a legally dismissed employee as an act of "social justice" or on "equitable grounds." In both instances, it is required that the dismissal (1) was not for serious misconduct; and (2) did not reflect on the moral character of the employee.17 The leading case of Philippine Long Distance Telephone Co. vs. NLRC18 is instructive on this point: We hold that henceforth separation pay shall be allowed as a measure of social justice only in those instances where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. Where the reason for the valid dismissal is, for example, habitual intoxication or an offense involving moral turpitude, like theft or illicit sexual relations with a fellow worker, the employer may not be required to give the dismissed employee separation pay, or financial assistance, or whatever other name it is called, on the ground of social justice. A contrary rule would, as the petitioner correctly argues, have the effect, of rewarding rather than punishing the erring employee for his offense. And we do not agree that the punishment is his dismissal only and the separation pay has nothing to do with the wrong he has committed. Of course it has. Indeed, if the employee who steals from the company is granted separation pay even as he is validly dismissed, it is not unlikely that he will commit a similar offense in his next employment because he thinks he can expect a like leniency if he is again found out.1wphi1This kind of misplaced compassion is not going to do labor in general any good as it will encourage the infiltration of its ranks by those who do not deserve the protection and concern of the Constitution. The policy of social justice is not intended to countenance wrongdoing simply because it is committed by the underprivileged. At best, it may mitigate the penalty but it certainly will not condone the offense. Compassion for the poor is an imperative of every humane society but only when the recipient is not a rascal claiming an undeserved privilege. Social justice cannot be permitted to be refuge of scoundrels any more than can equity be an impediment to the punishment of the guilty. Those who invoke social justice may do so only if their hands are clean and their motives blameless and not simply because they happen to be poor. This great policy of our Constitution is not meant for the protection of those who have proved they are not worthy of it, like the workers who have tainted the cause of labor with the blemishes of their own character. 19 In the subsequent case of Toyota Motor Philippines Corporation Workers Association (TMPCWA) v. National Labor Relations Commission,20 it was further elucidated that "in addition to serious misconduct, in dismissals based on other grounds under Art. 282 like willful disobedience, gross and habitual neglect of duty, fraud or willful breach of trust, and commission of a crime against the employer or his family, separation pay should not be conceded to the dismissed employee." 21 In Reno Foods, Inc, v. Nagkakaisang Lakas ng Manggagawa (NLM)-Katipunan,22 the Court wrote that "separation pay is only warranted when the cause for termination is

not attributable to the employees fault, such as those provided in Artic les 283 and 284 of the Labor Code, as well as in cases of illegal dismissal in which reinstatement is no longer feasible. It is not allowed when an employee is dismissed for just cause."23 In this case, Rivera was dismissed from work because she intentionally circumvented a strict company policy, manipulated another entity to carry out her instructions without the companys knowledge and approval, and directed th e diversion of funds, which she even admitted doing under the guise of shortening the laborious process of securing funds for promotional activities from the head office. These transgressions were serious offenses that warranted her dismissal from employment and proved that her termination from work was for a just cause. Hence, she is not entitled to a separation pay. More importantly, Rivera did not appeal the March 31, 2009 ruling of the NLRC disallowing the award of separation pay to her. It was Unilever who elevated the case to the CA. It is axiomatic that a party who does not appeal, or file a petition for certiorari, is not entitled to any affirmative relief.24 Due process prevents the grant of additional awards to parties who did not appeal. 25 An appellee who is not an appellant may assign errors in his brief where his purpose is to maintain the judgment, but he cannot seek modification or reversal of the judgment or claim affirmative relief unless he has also appealed. 26 It was, therefore, erroneous for the CA to grant an affirmative relief to Rivera who did not ask for it. Lastly, Unilever questions the grant of nominal damages in favor of Rivera for its alleged non-observance of the requirements of procedural due process. It insists that she was given ample opportunity "to explain her side, interpose an intelligent defense and adduce evidence on her behalf." 27 The Court is not persuaded. Section 2, Rule XXIII, Book V of the Rules Implementing the Labor Code expressly states: Section 2. Standard of due process: requirements of notice. In all cases of termination of employment, the following standards of due process shall be substantially observed. I. For termination of employment based on just causes as defined in Article 282 of the Code: (a) A written notice served on the employee specifying the ground or grounds for termination, and giving to said employee reasonable opportunity within which to explain his side; (b) A hearing or conference during which the employee concerned, with the assistance of counsel if the employee so desires, is given opportunity to respond to the charge, present his evidence or rebut the evidence presented against him; and (c) A written notice of termination served on the employee indicating that upon due consideration of all the circumstance, grounds have been established to justify his termination. In case of termination, the foregoing notices shall be served on the employees last known address. King of Kings Transport, Inc. v. Mamac28 detailed the steps on how procedural due process can be satisfactorily complied with. Thus: To clarify, the following should be considered in terminating the services of employees: (1) The first written notice to be served on the employees should contain the specific causes or grounds for termination against them, and a directive that the employees are given the opportunity to submit their written explanation within a reasonable period. "Reasonable opportunity" under the Omnibus Rules means every kind of assistance that management must accord to the employees to enable them to prepare adequately for their defense. This should be construed as a period of at least five (5) calendar days from receipt of the notice to give the employees an opportunity to study the accusation against them, consult a union official or lawyer, gather data and evidence, and decide on the defenses they will raise against the complaint. Moreover, in order to enable the employees to intelligently prepare their explanation and defenses, the notice should contain a detailed narration of the facts and circumstances that will serve as basis for the charge against the employees. A general description of the charge will not suffice. Lastly, the notice should specifically mention which company rules, if any, are violated and/or which among the grounds under Art. 282 is being charged against the employees. (2) After serving the first notice, the employers should schedule and conduct a hearing or conference wherein the employees will be given the opportunity to: (1) explain and clarify their defenses to the charge against them; (2) present evidence in support of their defenses; and (3) rebut the evidence presented against them by the management. During the hearing or conference, the employees are given the chance to defend themselves personally, with the assistance of a

representative or counsel of their choice. Moreover, this conference or hearing could be used by the parties as an opportunity to come to an amicable settlement. (3) After determining that termination of employment is justified, the employers shall serve the employees a written notice of termination indicating that: (1) all circumstances involving the charge against the employees have been considered; and (2) grounds have been established to justify the severance of their employment.29 In this case, Unilever was not direct and specific in its first notice to Rivera. The words it used were couched in general terms and were in no way informative of the charges against her that may result in her dismissal from employment. Evidently, there was a violation of her right to statutory due process warranting the payment of indemnity in the form of nominal damages. Hence, the Court finds no compelling reason to reverse the award of nominal damages in her favor. The Court, however, deems it proper to increase the award of nominal damages from P20,000.00 to P30,000.00, as initially awarded by the NLRC, in accordance with existing jurisprudence.30 WHEREFORE, the petition is hereby PARTIALLY GRANTED.1wphi1 The June 22, 2011 Decision and the April 25, 2012 Resolution of the Court of Appeals (CA)-Cagayan de Oro City in CA-G.R. SP No. 02963-MIN are AFFIRMED with MODIFICATION. The dispositive portion should read as follows: WHEREFORE, the March 31, 2009 Resolution of the NLRC (Branch 5), Cagayan de Oro City, is hereby AFFIRMED with MODIFICATION. UNILEVER PHILIPPINES, INC., is hereby directed to pay MARIA RUBY M. RIVERA the following: a) P30,000.00 as nominal damages; and b) Proportionate 13th month pay and unused leave credits, to be computed based on her salary during the period relevant to the case. The award of retirement benefit is DELETED. SO ORDERED. JOSE CATRAL MENDOZA Associate Justice WE CONCUR: PRESBITERO J. VELASCO, JR. Associate Justice Chairperson DIOSDADO M. PERALTA Associate Justice ROBERTO A. ABAD Associate Justice

MARVIC MARIO VICTOR F. LEONEN Associate Justice ATTESTATION I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court's Division. PRESBITERO J. VELASCO, JR. Associate Justice Chairperson, Third Division CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson's Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court's Division.

MARIA LOURDES P. A. SERENO Chief Justice

Footnotes
1

Rollo. pp. 15-52.

Id. at 54-71. Penned by Associate Justice Rodrigo F. Lim Jr., with Associate Justice Pamela Ann Abella Maxino and Associate Justice Zenaida T. Galapate-Laguilles, concurring.
3

Id. at 73-74. Id. at 20. Id. at 58. Id. at 24. Id. at 25. Id. at 26. Id. at 64-67. Id. at 69-70. Id. at 75-94. Id. at 15-52. Id. at 28. Id. at 35. ART. 282. Termination by employer. - An employer may terminate an employment for any of the following causes: a. Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work; b. Gross and habitual neglect by the employee of his duties; c. Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative; d. Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representative; and e. Other causes analogous to the foregoing.

10

11

12

13

14

15

16

Tirazona v. Philippine Eds Techno-Service Inc. (PWT, Inc.), G.R. No. 169712, January 20, 2009, 576 SCRA 625, 628629.
17

Yrasuegui v. Philippine Airlines, Inc., G.R. No. 168081, October 17, 2008, 569 SCRA 467, 502.

18

247 Phil. 641 (1988). Philippine Long Distance Telephone Co. vs. NLRC, 247 Phil. 641, 649-650 (1988). G.R. Nos. 158786 & 158789, October 19, 2007, 537 SCRA 171.

19

20

21

Toyota Motor Philippines Corporation Workers Association (TMPCWA) v. National Labor Relations Commission, G.R. Nos. 158786 & 158789, October 19, 2007, 537 SCRA 171, 223.
22

G.R. No. 164016, March 15, 2010, 615 SCRA 240.

23

Reno Foods, Inc, v. Nagkakaisang Lakas ng Manggagawa (NLM)-Katipunan, G.R. No. 164016, March 15, 2010, 615 SCRA 240, 249.
24

Corinthian Gardens Association Inc. v. Tanjangco, G.R. No. 160795, June 27, 2008, 556 SCRA 154, 166, citing Alauya, Jr v. Commission on Elections, 443 Phil. 893, 907 (2003).
25

Aklan College, Inc. v. Enero, G.R. No. 178309, January 27, 2009, 577 SCRA 64, 79-80.

26

Corinthian Gardens Association Inc. v. Tanjangco, supra note 25, citing Acebedo Optical Company, Inc. v. Court of Appeals, 385 Phil. 956, 976 (2000).
27

Rollo, pp. 44 553 Phil. 108 (2007). King of Kings Transport, Inc. v. Mamac, 553 Phil. 108, 115-116 (2007). Agabon NLRC, 485 Phil. 248, 287-288 (2004). March 28, 2011

28

29

30

G.R. No. 170195

SOCIAL SECURITY COMMISSION and SOCIAL SECURITY SYSTEM, Petitioner, vs. TERESA G. FAVILA, Respondent. DECISION DEL CASTILLO, J.: A spouse who claims entitlement to death benefits as a primary beneficiary under the Social Security Law must establish two qualifying factors, to wit: (1) that he/she is the legitimate spouse; and (2) that he/she is dependent upon the member for support.1 This Petition for Review on Certiorari assails the Decision2 dated May 24, 2005 of the Court of Appeals (CA) in CA-G.R. SP No. 82763 which reversed and set aside the Resolution3 dated June 4, 2003 and Order4 dated January 21, 2004 of the Social Security Commission (SSC) in SSC Case No. 8-15348-02. Likewise assailed is the CA Resolution5 dated October 17, 2005 denying the Motion for Reconsideration thereto. Factual Antecedents On August 5, 2002, respondent Teresa G. Favila (Teresa) filed a Petition6 before petitioner SSC docketed as SSC Case No. 815348-02. She averred therein that after she was married to Florante Favila (Florante) on January 17, 1970, the latter designated her as the sole beneficiary in the E-1 Form he submitted before petitioner Social Security System (SSS), Quezon City Branch on June 30, 1970. When they begot their children Jofel, Floresa and Florante II, her husband likewise designated each one of them as beneficiaries. Teresa further averred that when Florante died on February 1, 1997, his pension benefits under the SSS were given to their only minor child at that time, Florante II, but only until his emancipation at age 21. Believing that as the surviving legal wife she is likewise entitled to receive Florantes pension benefits, Teresa subsequently filed her claim for said benefits before the SSS. The SSS, however, denied the claim in a letter dated January 31, 2002, hence, the petition.

In its Answer,7 SSS averred that on May 6, 1999, the claim for Florantes pension benefits was initially settled in favor of Teresa as guardian of the minor Florante II. Per its records, Teresa was paid the monthly pension for a total period of 57 months or from February 1997 to October 2001 when Florante II reached the age of 21. The claim was, however, re-adjudicated on July 11, 2002 and the balance of the five-year guaranteed pension was again settled in favor of Florante II. 8 SSS also alleged that Estelita Ramos, sister of Florante, wrote a letter9stating that her brother had long been separated from Teresa. She alleged therein that the couple lived together for only ten years and then decided to go their separate ways because Teresa had an affair with a married man with whom, as Teresa herself allegedly admitted, she slept with four times a week. SSS also averred that an interview conducted in Teresas neighborhood in Tondo, Manila on September 18, 1998 revealed that although she did not cohabit with another man after her separation with Florante, there were rumors that she had an affair with a police officer. To support Teresas non -entitlement to the benefits claimed, SSS cited the provisions of Sections 8(k) and 13 of Republic Act (RA) No. 1161, as amended otherwise known as Social Security (SS) Law.10 Ruling of the Social Security Commission In a Resolution11 dated June 4, 2003, SSC held that the surviving spouses entitlement to an SSS members death benefits is dependent on two factors which must concur at the time of the latters death, to wit: (1) legality of the marital relationship; and (2) dependency for support. As to dependency for support, the SSC opined that same is affected by factors such as separation de facto of the spouses, marital infidelity and such other grounds sufficient to disinherit a spouse under the law. Thus, although Teresa is the legal spouse and one of Florantes designated beneficiaries, the SSC ruled that she is disqualified from claiming the death benefits because she was deemed not dependent for support from Florante due to marital infidelity. Under Section 8(k) of the SS Law, the dependent spouse until she remarries is entitled to death benefits as a primary beneficiary, together with the deceased members legitimate minor children. According to SSC, the word "remarry" under said provision has been interpreted as to include a spouse who cohabits with a person other than his/her deceased spouse or is in an illicit relationship. This is for the reason that no support is due to such a spouse and to allow him/her to enjoy the members death benefits would be tantamount to circumvention of the law. Even if a spouse did not cohabit with another, SSC went on to state that for purposes of the SS Law, it is sufficient that the separation in-fact of the spouses was precipitated by an adulterous act since the actual absence of support from the member is evident from such separation. Notable in this case is that while Teresa denied having remarried or cohabited with another man, she did not, however, deny her having an adulterous relationship. SSC therefore concluded that Teresa was not dependent upon Florante for support and consequently disqualified her from enjoying her husbands death benefits. SSC further held that Teresa did not timely contest her non-entitlement to the award of benefits. It was only when Florante IIs pension was stopped that she deemed it wise to file her claim. For SSC, Teresas long silence led SSS to believe that she rea lly suffered from a disqualification as a beneficiary, otherwise she would have immediately protested her non-entitlement. It thus opined that Teresa is now estopped from claiming the benefits. Hence, SSC dismissed the petition for lack of merit. As Teresas Motion for Reconsideration12 of said Resolution was also denied by SSC in an Order13 dated January 21, 2004, she sought recourse before the CA through a Petition for Review14 under Rule 43. Ruling of the Court of Appeals Before the CA, Teresa insisted that SSS should have granted her claim for death benefits because she is undisputedly the legal surviving spouse of Florante and is therefore entitled to such benefits as primary beneficiary. She claimed that the SSCs fi nding that she was not dependent upon Florante for support is unfair because the fact still remains that she was legally married to Florante and that her alleged illicit affair with another man was never sufficiently established. In fact, SSS admitted that there was no concrete evidence or proof of her amorous relationship with another man. Moreover, Teresa found SSSs strict interpretation of the SS Law as not only anti-labor but also anti-family. It is anti-labor in the sense that it does not work to the benefit of a deceased employees primary beneficiaries and anti-family because in denying benefits to surviving spouses, it destroys family solidarity. In sum, Teresa prayed for the reversal and setting aside of the assailed Resolution and Order of the SSC. The SSC and the SSS through the Office of the Solicitor General (OSG) filed their respective Comments 15 to the petition. SSC contended that the word "spouse" under Section 8(k) of the SS Law is qualified by the word "dependent". Thus, to be entitled to death benefits under said law, a surviving spouse must have been dependent upon the member spouse for support during the latters lifetime including the very moment of contingency. According to it, the fact of dependency is a mandatory requirement of law. If it is otherwise, the law would have simply used the word "spouse" without the descriptive word "dependent". In this case, SSC emphasized that Teresa never denied the fact that she and Florante were already separated and living in different houses when the contingency happened. Given this fact and since the conduct of investigation is standard operating procedure for SSS, it being under legal obligation to determine prior to the award of death benefit whether the supposed beneficiary is actually receiving support from the member or if such support was rightfully withdrawn prior to the contingency, SSS conducted an investigation with respect to the couples separation. And as said investigation revealed tales of Teresas adulterous relationship with another man, SSS therefore correctly adjudicated the entire death benefits in favor of Florante II. To negate Teresas claim that SSS failed to establish her marital infidelity, SSC enumerated the following evidence: (1) the letter16 of Florantes sister, Estelita Ramos, stating that the main reasons why Teresa and Florante separated after only 10 years of marriage were Teresas adulterous relationship with another man and her propensity for gambling; (2) the Memorandum 17 dated August 30,

2002 of SSS Senior Analysts Liza Agilles and Jana Simpas which ran through the facts in connection with the claim for death benefits accruing from Florantes death. It indicates therein, among others, that based on interviews conducted in Teresas neighborhood, she did not cohabit with another man after her separation from her husband although there were rumors that she and a certain police officer had an affair. However, there is not enough proof to establish their relationship as Teresa and her paramour did not live together as husband and wife; and (3) the field investigation report18 of SSS Senior Analyst Fernando F. Nicolas which yielded the same findings. The SSC deemed the foregoing evidence as substantial to support the conclusion that Teresa indeed had an illicit relationship with another man. SSC also defended SSSs interpretation of the SS law and argued that it is neither anti -labor nor anti-family. It is not anti-labor because the subject matter of the case is covered by the SS Law and hence, Labor Law has no application. It is likewise not antifamily because SSS has nothing to do with Teresas separation from her husband which resulted to the latters withdrawal of support for her. At any rate, SSC advanced that even if Teresa is entitled to the benefits claimed, same have already been received in its entirety by Florante II so that no more benefits are due to Florantes other beneficiaries. Hence, SSC prayed for the dismissal of the petition. For its part, the OSG likewise believed that Teresa is not entitled to the benefits claimed as she lacks the requirement that the wife must be dependent upon the member for support. This is in view of the rule that beneficiaries under the SS Law need not be the legal heirs but those who are dependent upon him for support. Moreover, it noted that Teresa did not file a protest before the SSS to contest the award of the five-year guaranteed pension to their son Florante II. It posited that because of this, Teresa cannot raise the matter for the first time before the courts. The OSG also believed that no further benefits are due to Florantes other beneficiaries considering that the balance of the five-year guaranteed pension has already been settled. In a Decision19 dated May 24, 2005, the CA found Teresas petition impressed with merit. It gave weight to the fact that she is a primary beneficiary because she is the lawful surviving spouse of Florante and in addition, she was designated by Florante as such beneficiary. There was no legal separation or annulment of marriage that could have disqualified her from claiming the death benefits and that her designation as beneficiary had not been invalidated by any court of law. The CA cited Social Security System v. Davac20 where it was held that it is only when there is no designation of beneficiary or when the designation is void that the SSS would have to decide who is entitled to claim the benefits. It opined that once a spouse is designated by an SSS member as his/her beneficiary, same forecloses any inquiry as to whether the spouse is indeed a dependent deriving support from the member. Thus, when SSS conducted an investigation to determine whether Teresa is indeed dependent upon Florante, SSS was unilaterally adding a requirement not imposed by law which makes it very difficult for designated primary beneficiaries to claim for benefits. To make things worse, the result of said investigation which became the basis of Teresas non -entitlement to the benefits claimed was culled from unfounded rumors. Moreover, the CA saw SSSs conduct of investigations to be violative of the constitutional right to privacy. It lamented that SSS has no power to investigate and pry into the members and his/her familys personal lives and should cease and desist from conduc ting such investigations. Ultimately, the CA reversed and set aside the assailed Resolution and Order of the SSC and directed SSS to pay Teresas monetary claims which included the monthly pension due her as the surviving spouse and the lump sum benefit equivalent to thirty-six times the monthly pension. SSC filed its Motion for Reconsideration21 of said Decision but same was denied in a Resolution22 dated October 17, 2005. Impleading SSS as co-petitioner, SSC thus filed this petition for review on certiorari. Issue Is Teresa a primary beneficiary in contemplation of the Social Security Law as to be entitled to death benefits accruing from the death of Florante? Petitioners Arguments SSC reiterates the argument that to be entitled to death benefits, a surviving spouse must have been actually dependent for support upon the member spouse during the latters lifetime including the very moment of contingency. To it, this is clearly the inte ntion of the legislature; otherwise, Section 8(k) of the SS law would have simply stated "spouse" without the descriptive word "dependent". Here, although Teresa is without question Florantes legal spouse, she is not the "dependent spouse" referred to in the said provision of the law. Given the reason for the couples separation for about 17 years prior to Florantes death and in the absence of proof that during said period Teresa relied upon Florante for support, there is therefore no reason to infer that Teresa is a dependent spouse entitled to her husbands death benefits. SSC adds that in the process of determining non-dependency status of a spouse, conviction of a crime involving marital infidelity is not an absolute necessity. It is sufficient for purposes of the award of death benefits that a thorough investigation was conducted by SSS through interviews of impartial witnesses and that same showed that the spouse-beneficiary committed an act of marital infidelity which caused the member to withdraw support from his spouse. In this case, no less than Florantes sister, who doe s not stand to benefit from the present controversy, revealed that Teresa frequented a casino and was disloyal to her husband so that they separated after only 10 years of marriage. This was affirmed through the interview conducted in Teresas neighborhood. Hence, it is not true that Teresas marital infidelity was not sufficiently proven.

Likewise, SSC contends that contrary to the CAs posture, a members designation of a primary beneficiary does not guarantee the latters entitlement to death benefits because such entitlement is determined only at the time of happening of the contingency. This is because there may have been events which supervened subsequent to the designation which would otherwise disqualify the person designated as beneficiary such as emancipation of a members child or separation from his/her spouse. This is actually the same reason why SSS must conduct an investigation of all claims for benefits. Moreover, SSC justifies SSSs conduct of investigation and argues that said office did not intrude into Florantes and his familys personal lives as the investigation did not aggravate the situation insofar as Teresas relationship with her deceased husban d was concerned. It merely led to the discovery of the true state of affairs between them so that based on it, the death benefits were awarded to the rightful primary beneficiary, Florante II. Clearly, such an investigation is an essential part of adjudication process, not only in this case but also in all claims for benefits filed before SSS. Thus, SSC prays for the setting aside of the assailed CA Decision and Resolution. Respondents Arguments To support her entitlement to the death benefits claimed, Teresa cited Ceneta v. Social Security System,23 a case decided by the CA which declared, viz: Clearly then, the term dependent spouse, who must not re-marry in order to be entitled to the SSS death benefits accruing from the death of his/her spouse, refers to the legal spouse who, under the law, is entitled to receive support from the other spouse. Indubitably, petitioner, having been legally married to the deceased SSS member until the latters death and despite his subs equent marriage to respondent Carolina, is deemed dependent for support under Article 68 of the Family Code. Said provision reads: The husband and wife are obliged to live together, observe mutual love, respect and fidelity, and render mutual help and support Based on said law, petitioner is, therefore, entitled to the claimed death benefits. Her marriage to the deceased not having been lawfully severed, the law disputably presumes her to be continually dependent for support. No evidence or even a mere inference can be adduced to prove that petitioner ceased to derive all her needs indispensable for her sustenance, and thus, she remains a legal dependent. A dependent spouse is primary beneficiary entitled to the death benefits of a deceased SSS member spouse unless he or she remarries. A mere allegation of adultery not substantially proven can not validly deprive petitioner of the support referred to under the law, and consequently, of her claim under the SSS Law. Thus, being the legal wife, Teresa asserts that she is presumed to be dependent upon Florante for support. The bare allegation of Estelita that she had an affair with another man is insufficient to deprive her of support from her husband under the law and, conversely, of the death benefits from SSS. Moreover, Teresa points out that despite their separation and the rumors regarding her infidelity, Florante did not withdraw her designation as primary beneficiary. Under this circumstance, Teresa believes that Florante really intended for her to receive the benefits from SSS. Teresa also agrees with the CAs finding that SSS unilaterally added to the requirements of the law the condition that a surviving spouse must be actually dependent for support upon the member spouse during the latters lifetime. She avers that this could not have been the lawmakers intention as it would make it difficult or even impossible for beneficiaries to claim for benefits under the SS Law. She stresses that courts (or quasi-judicial agencies for that matter), may not, in the guise of interpretation, enlarge the scope of a statute and include therein situations not provided nor intended by lawmakers. Courts are not authorized to insert into the law what they think should be in it or to supply what they think the legislature would have supplied if its attention had been called to the omission. Hence, Teresa prays that the assailed CA Decision and Resolution be affirmed in toto. Our Ruling We find merit in the petition. The law in force at the time of Florantes death was RA 1161. Section 8 (e) and (k) of said law pr ovides: Section 8. Terms Defined. For the purposes of this Act, the following terms shall, unless the context indicates otherwise, have the following meanings: xxxx

(e) Dependent The legitimate, legitimated or legally adopted child who is unmarried, not gainfully employed and not over twentyone years of age, or over twenty-one years of age, provided that he is congenitally incapacitated and incapable of self-support, physically or mentally; the legitimate spouse dependent for support upon the employee; and the legitimate parents wholly dependent upon the covered employee for regular support. xxxx (k) Beneficiaries The dependent spouse until he remarries and dependent children, who shall be the primary beneficiaries. In their absence, the dependent parents and, subject to the restrictions imposed on dependent children, the legitimate descendants and illegitimate children who shall be the secondary beneficiaries. In the absence of any of the foregoing, any other person designated by the covered employee as secondary beneficiary. (Emphasis ours.) From the above-quoted provisions, it is plain that for a spouse to qualify as a primary beneficiary under paragraph (k) thereof, he/she must not only be a legitimate spouse but also a dependent as defined under paragraph (e), that is, one who is dependent upon the member for support. Paragraphs (e) and (k) of Section 8 of RA 1161 are very clear. "Hence, we need only apply the law. Under the principles of statutory construction, if a statute is clear, plain and free from ambiguity, it must be given its literal meaning and applied without attempted interpretation. This plain meaning rule or verba legis, derived from the maxim index animo sermo est (speech is the index of intention), rests on the valid presumption that the words employed by the legislature in a statute correctly express its intent by the use of such words as are found in the statute. Verba legis non est recedendum, or, from the words of a statute there should be no departure."24 Thus, in Social Security System v. Aguas25 we held that: [I]t bears stressing that for her (the claimant) to qualify as a primary beneficiary, she must prove that she was the legiti mate spouse dependent for support from the employee. The claimant-spouse must therefore establish two qualifying factors: (1) that she is the legitimate spouse, and (2) that she is dependent upon the member for support. x x x Here, there is no question that Teresa was Florantes legal wife. What is at point, however, is whether Teresa is dependent upon Florante for support in order for her to fall under the term "dependent spouse" under Section 8(k) of RA 1161. What the SSC relies on in concluding that Teresa was not dependent upon Florante for support during their separation for 17 years was its findings that Teresa maintained an illicit relationship with another man. Teresa however counters that such illicit relationship has not been sufficiently established and, hence, as the legal wife, she is presumed to be continually dependent upon Florante for support. We agree with Teresa that her alleged affair with another man was not sufficiently established. The Memorandum of SSS Senior Analysts Liza Agilles and Jana Simpas reveals that it was Florante who was in fact living with a common law wife, Susan Favila (Susan) and their three minor children at the time of his death. Susan even filed her own claim for death benefits with the SSS but same was, however, denied. With respect to Teresa, we quote the pertinent portions of said Memorandum, viz: SUSAN SUBMITTED A LETTER SIGNED BY ESTELITA RAMOS, ELDER SISTER OF THE DECEASED STATING THAT MEMBER WAS SEPARATED FROM TERESA AFTER 10 YEARS OF LIVING IN FOR THE REASONS THAT HIS WIFE HAD COHABITED WITH A MARRIED MAN. ALSO, PER ESTELITA, THE WIFE HERSELF ADMITTED THAT THE MAN SLEPT WITH HER 4 TIMES A WEEK. TERESA SUBMITTED AN AFFIDAVIT EXECUTED BY NAPOLEON AND JOSEFINA, BROTHER AND SISTER (IN) LAW, RESPECTIVELY, OF THE DECEASED THAT TERESA HAS NEVER RE-MARRIED NOR COHABITED WITH ANOTHER MAN. BASED ON THE INTERVIEW (DATED 9/18/98) CONDUCTED FROM THE NEIGHBORHOOD OF TERESA AND BGY. KAGAWAD IN TONDO, MANILA, IT WAS ESTABLISHED THAT TERESA DID NOT COHABIT WITH ANOTHER MAN AFTER THE SEPARATION ALTHOUGH THERE ARE RUMORS THAT SHE AND A CERTAIN POLICE OFFICER HAD AN AFFAIR. BUT [NOT] ENOUGH PROOF TO ESTABLISH THEIR RELATIONSHIP SINCE THEY DID NOT LIVE-IN AS HUSBAND AND WIFE. BASED ON THE INTERVIEW WITH JOSEFINA FAVILA, MEMBER AND TERESA WERE SEPARATED FOR A NUMBER OF YEARS AND THAT SHE HAD NO KNOWLEDGE IF TERESA COHABITED WITH ANOTHER MAN ALTHOUGH SHE HEARD OF THE RUMORS THAT SAID WIFE HAD AN AFFAIR WITH ANOTHER MAN. NAPOLEON WAS NOT INTERVIEWED. (Emphasis ours) While SSC believes that the foregoing constitutes substantial evidence of Teresas amorous relationship, we, however, find otherwise. It is not hard to see that Estelitas claim of Teresas cohabitation with a married man is a mere allegation witho ut proof. Likewise, the interviews conducted by SSS revealed rumors only that Teresa had an affair with a certain police officer. Notably, not one from those interviewed confirmed that such an affair indeed existed. "The basic rule is that mere allegation is not evidence and

is not equivalent to proof. Charges based on mere suspicion and speculation likewise cannot be given credence." 26 "Mere uncorroborated hearsay or rumor does not constitute substantial evidence."27 Remarkably, the Memorandum itself stated that there is not enough proof to establish Teresas alleged relationship with another man since they did not live as husband and wife. This notwithstanding, we still find untenable Teresas assertion that being the legal wife, she is presumed dependent upon Fl orante for support. In Re: Application for Survivors Benefits of Manlavi,28 this Court defined "dependent" as "one who derives his or her main support from another [or] relying on, or subject to, someone else for support; not able to exist or sustain oneself, or to perform anything without the will, power or aid of someone else." Although therein, the wifes marriage to the deceased husband was not dissolved prior to the latters death, the Court denied the wifes claim for survivorship benefits from the Government Servic e Insurance System (GSIS) because the wife abandoned her family to live with other men for more than 17 years until her husband died. Her whereabouts was unknown to her family and she never attempted to communicate with them or even check up on the well-being of her daughter with the deceased. From these, the Court concluded that the wife during said period was not dependent on her husband for any support, financial or otherwise, hence, she is not a dependent within the contemplation of RA 8291 29 as to be entitled to survivorship benefits. It is worthy to note that under Section 2(f) RA 8291, a legitimate spouse dependent for support is likewise included in the enumeration of dependents and under Section 2(g), the legal dependent spouse in the enumeration of primary beneficiaries. Under this premise, we declared in Aguas that "the obvious conclusion is that a wife who is already separated de facto from her husband cannot be said to be dependent for support upon the husband, absent any showing to the contrary. Conversely, if it is proved that the husband and wife were still living together at the time of his death, it would be safe to presume that she was dependent on the husband for support, unless it is shown that she is capable of providing for herself."30 Hence, we held therein that the wife-claimant had the burden to prove that all the statutory requirements have been complied with, particularly her dependency on her husband at the time of his death. And, while said wife-claimant was the legitimate wife of the deceased, we ruled that she is not qualified as a primary beneficiary since she failed to present any proof to show tha t at the time of her husbands death, she was still dependent on him for support even if they were already living separately. In this case, aside from Teresas bare allegation that she was dependent upon her husband for support and her misplaced relia nce on the presumption of dependency by reason of her valid and then subsisting marriage with Florante, Teresa has not presented sufficient evidence to discharge her burden of proving that she was dependent upon her husband for support at the time of his death. She could have done this by submitting affidavits of reputable and disinterested persons who have knowledge that during her separation with Florante, she does not have a known trade, business, profession or lawful occupation from which she derives income sufficient for her support and such other evidence tending to prove her claim of dependency. While we note from the abovementioned SSS Memorandum that Teresa submitted affidavits executed by Napoleon Favila and Josefina Favila, same only pertained to the fact that she never remarried nor cohabited with another man. On the contrary, what is clear is that she and Florante had already been separated for about 17 years prior to the latters death as Florante was in fact, living with his c ommon law wife when he died. Suffice it to say that "[w]hoever claims entitlement to the benefits provided by law should establish his or her right thereto by substantial evidence."31Hence, for Teresas failure to show that despite their separation she was dependent upon Florante for support at the time of his death, Teresa cannot qualify as a primary beneficiary. 1wphi1 Hence, she is not entitled to the death benefits accruing on account of Florantes death. As a final note, we do not agree with the CAs pronouncement that the investigations conducted by SSS violate a persons righ t to privacy. SSS, as the primary institution in charge of extending social security protection to workers and their beneficiaries is mandated by Section 4(b)(7) of RA 828232 to require reports, compilations and analyses of statistical and economic data and to make an investigation as may be needed for its proper administration and development. Precisely, the investigations conducted by SSS are appropriate in order to ensure that the benefits provided under the SS Law are received by the rightful beneficiaries. It is not hard to see that such measure is necessary for the systems proper administration, otherwise, it will be swamped with bog us claims that will pointlessly deplete its funds. Such scenario will certainly frustrate the purpose of the law which is to provide covered employees and their families protection against the hazards of disability, sickness, old age and death, with a view to promoting their well-being in the spirit of social justice. Moreover and as correctly pointed out by SSC, such investigations are likewise necessary to carry out the mandate of Section 15 of the SS Law which provides in part, viz: Sec. 15. Non-transferability of Benefits. The SSS shall pay the benefits provided for in this Act to such [x x x] persons as may be entitled thereto in accordance with the provisions of this Act x x x. (Emphasis ours.) WHEREFORE, the Petition for Review on Certiorari is GRANTED. The assailed Decision and Resolution of the Court of Appeals dated May 24, 2005 and October 17, 2005 in CA-G.R. SP No. 82763 are hereby REVERSED and SET ASIDE. Respondent Teresa G. Favila is declared to be not a dependent spouse within the contemplation of Republic Act No. 1161 and is therefore not entitled to death benefits accruing from the death of Florante Favila. SO ORDERED. MARIANO C. DEL CASTILLO Associate Justice WE CONCUR:

RENATO C. CORONA Chief Justice Chairperson PRESBITERO J. VELASCO, JR. Associate Justice TERESITA J. LEONARDO-DE CASTRO Associate Justice

JOSE PORTUGAL PEREZ Associate Justice CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division. RENATO C. CORONA Chief Justice

Footnotes
1

Social Security System v. Aguas, G.R. No. 165546, February 27, 2006, 483 SCRA 383,400.

CA rollo, pp. 93-106; penned by Associate Justice Vicente Q. Roxas and concurred in by Associate Justices Juan Q. Enriquez, Jr. and Regalado E. Maambong.
3

Id. at 27-30. Id. at 34-36. Id. at 125-126. Id. at 21-23. Id. at 24-26. See SSSs Diliman Processing Center Routing Slip dated August 20, 2002, id. at 54. Id. at 50. Sections 8 (k) and 13 thereof reads: Section 8. Terms Defined. For the purposes of this Act, the following terms shall, unless the context indicates otherwise, have the following meanings: xxxx (k) Beneficiaries The dependent spouse until he remarries and dependent children, who shall be primary beneficiaries. In their absence, the dependent parents and, subject to the restrictions imposed on dependent children, the legitimate descendants and illegitimate children who shall be the secondary beneficiaries. In the absence of any of the foregoing, any other person designated by the covered employee as secondary beneficiary. Section 13. Death Benefits. Upon the covered employees death, his primary beneficiaries shall be entitled to the monthly pension and his dependents to the dependents pension: Provided, That he has paid at least thirty six monthly contributions prior to the semester of death: Provided, further, That if the foregoing condition is not

10

satisfied his primary beneficiaries shall be entitled to a lump sum benefit equivalent to thirty-five times the monthly pension: Provided, further, That if he has no primary beneficiaries, his secondary beneficiaries shall be entitled to a lump sum benefit equivalent to twenty times the monthly pension: Provided, however, That the minimum death benefits shall not be less than the total contributions paid by him and his employer on his behalf nor less than one thousand pesos: Provided, finally, That the beneficiaries of the covered employee who dies without having paid at least three monthly contributions shall be entitled to the minimum benefit.
11

CA rollo, pp. 27-30. Id. at 31-32. Id. at 34-36. Id. at 8-20. SSC Comment, id. at 45-54; OSGs Comment, id. at 71-77. Id. at 50. Id. at 51-52. Id. at 53. Id. at 93-106. 124 Phil. 255 (1966). CA rollo, pp. 107-114. Id. at 125-126.

12

13

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16

17

18

19

20

21

22

23

CA-G.R. SP No. 72505, October 15, 2003; penned by Associate Justice Noel G. Tijam and concurred in by Associate Justices Ruben T. Reyes and Edgardo P. Cruz.
24

Signey v. Social Security System, G.R. No. 173582, January 28, 2008, 542 SCRA 629, 637. Supra note 1 at 400. De Jesus v. Guerrero III, G.R. No. 171491, September 4, 2009, 598 SCRA 341, 350.

25

26

27

Rizal Workers Union v. Hon. Calleja, 264 Phil. 805, 811 (1990) citing Ang Tibay v. The Court of Industrial Relations and National Labor Union, Inc., 69 Phil. 635 (1940).
28

405 Phil 152, 160 (2001). Otherwise known as the GSIS Act of 1997. Supra note 1 at 401. Signey v. Social Security System, supra note 24 at 639.

29

30

31

32

An Act Further Strengthening the Social Security System thereby Amending for this Purpose, Republic Act No. 1161, as amended, otherwise known as the Social Security Law. G.R. No. 176985 April 1, 2013

RICARDO E. VERGARA, JR., Petitioner, vs. COCA-COLA BOTTLERS PHILIPPINES, INC., Respondent. DECISION PERALTA, J.: Before Us is a petition for review on certiorari under Rule 45 of the Rules of Civil Procedure assailing the January 9, 2007 Decision1 and March 6, 2007 Resolution2 of the Court of Appeals (CA) in CA .. G.R. SP No. 94622, which affirmed the January 31, 2006 Decision3 and March 8, 2006 Resolution4 of the National Labor Relations Commission (NLRC) modifying the September 30, 2003 Decision5 of the Labor Arbiter (LA) by deleting the sales management incentives in the computation of petitioner's retirement benefits. Petitioner Ricardo E. Vergara, Jr. was an employee of respondent Coca-Cola Bottlers Philippines, Inc. from May 1968 until he retired on January 31, 2002 as a District Sales Supervisor (DSS) for Las Pias City, Metro Manila. As stipulated in respondents existing Retirement Plan Rules and Regulations at the time, the Annual Performance Incentive Pay of RSMs, DSSs, and SSSs shall be considered in the computation of retirement benefits, as follows: Basic Monthly Salary + Monthly Average Performance Incentive (which is the total performance incentive earned during the year immediately preceding 12 months) No. of Years in Service.6 Claiming his entitlement to an additional PhP474,600.00 as Sales Management Incentives (SMI)7 and to the amount of PhP496,016.67 which respondent allegedly deducted illegally, representing the unpaid accounts of two dealers within his jurisdiction, petitioner filed a complaint before the NLRC on June 11, 2002 for the payment of his "Full Retirement Benefits, Merit Increase, Commission/Incentives, Length of Service, Actual, Moral and Exemplary Damages, and Attorneys Fees." 8 After a series of mandatory conference, both parties partially settled with regard the issue of merit increase and length of service.9 Subsequently, they filed their respective Position Paper and Reply thereto dealing on the two remaining issues of SMI entitlement and illegal deduction. On September 30, 2003, the LA rendered a Decision10 in favor of petitioner, directing respondent to reimburse the amount illegally deducted from petitioners retirement package and to integrate therein his SMI privilege. Upon appeal of respondent, however, the NLRC modified the award and deleted the payment of SMI. Petitioner then moved to partially execute the reimbursement of illegal deduction, which the LA granted despite respondents opposition.11 Later, without prejudice to the pendency of petitioners petition for certiorari before the CA, the parties executed a Compromise Agreement12 on October 4, 2006, whereby petitioner acknowledged full payment by respondent of the amount of PhP496,016.67 covering the amount illegally deducted. The CA dismissed petitioners case on January 9, 2007 and denied his motion for reconsideration two months thereafter. Hence , this present petition to resolve the singular issue of whether the SMI should be included in the computation of petitioners retirement benefits on the ground of consistent company practice. Petitioner insistently avers that many DSSs who retired without achieving the sales and collection targets were given the average SMI in their retirement package. We deny. This case does not fall within any of the recognized exceptions to the rule that only questions of law are proper in a petition for review on certiorari under Rule 45 of the Rules of Court. Settled is the rule that factual findings of labor officials, who are deemed to have acquired expertise in matters within their respective jurisdiction, are generally accorded not only respect but even finality, and bind us when supported by substantial evidence.13Certainly, it is not Our function to assess and evaluate the evidence all over again, particularly where the findings of both the CA and the NLRC coincide. In any event, even if this Court would evaluate petitioner's arguments on its supposed merits, We still find no reason to disturb the CA ruling that affirmed the NLRC. The findings and conclusions of the CA show that the evidence and the arguments of the parties had all been carefully considered and passed upon. There are no relevant and compelling facts to justify a different resolution which the CA failed to consider as well as no factual conflict between the CA and the NLRC decisions. Generally, employees have a vested right over existing benefits voluntarily granted to them by their employer. 14Thus, any benefit and supplement being enjoyed by the employees cannot be reduced, diminished, discontinued or eliminated by the employer. 15 The principle of non-diminution of benefits is actually founded on the Constitutional mandate to protect the rights of workers, to promote their welfare, and to afford them full protection.16 In turn, said mandate is the basis of Article 4 of the Labor Code which states that "all doubts in the implementation and interpretation of this Code, including its implementing rules and regulations, shall be rendered in favor of labor."17

There is diminution of benefits when the following requisites are present: (1) the grant or benefit is founded on a policy or has ripened into a practice over a long period of time; (2) the practice is consistent and deliberate; (3) the practice is not due to error in the construction or application of a doubtful or difficult question of law; and (4) the diminution or discontinuance is done unilaterally by the employer.18 To be considered as a regular company practice, the employee must prove by substantial evidence that the giving of the benefit is done over a long period of time, and that it has been made consistently and deliberately. 19Jurisprudence has not laid down any hard-and-fast rule as to the length of time that company practice should have been exercised in order to constitute voluntary employer practice.20 The common denominator in previously decided cases appears to be the regularity and deliberateness of the grant of benefits over a significant period of time.21 It requires an indubitable showing that the employer agreed to continue giving the benefit knowing fully well that the employees are not covered by any provision of the law or agreement requiring payment thereof.22 In sum, the benefit must be characterized by regularity, voluntary and deliberate intent of the employer to grant the benefit over a considerable period of time.23 Upon review of the entire case records, We find no substantial evidence to prove that the grant of SMI to all retired DSSs regardless of whether or not they qualify to the same had ripened into company practice. Despite more than sufficient opportunity given him while his case was pending before the NLRC, the CA, and even to this Court, petitioner utterly failed to adduce proof to establish his allegation that SMI has been consistently, deliberately and voluntarily granted to all retired DSSs without any qualification or conditions whatsoever. The only two pieces of evidence that he stubbornly presented throughout the entirety of this case are the sworn statements of Renato C. Hidalgo (Hidalgo) and Ramon V. Velazquez (Velasquez), former DSSs of respondent who retired in 2000 and 1998, respectively. They claimed that the SMI was included in their retirement package even if they did not meet the sales and collection qualifiers.24 However, juxtaposing these with the evidence presented by respondent would reveal the frailty of their statements. The declarations of Hidalgo and Velazquez were sufficiently countered by respondent through the affidavits executed by Norman R. Biola (Biola), Moises D. Escasura (Escasura), and Ma. Vanessa R. Balles (Balles). 25 Biola pointed out the various stop-gap measures undertaken by respondent beginning 1999 in order to arrest the deterioration of its accounts receivables balance, two of which relate to the policies on the grant of SMI and to the change in the management structure of respondent upon its re-acquisition by San Miguel Corporation. Escasura represented that he has personal knowledge of the circumstances behind the retirement of Hidalgo and Velazquez. He attested that contrary to petitioners claim, Hidalgo was in fact qualified for the SMI. As for Vel azquez, Escasura asserted that even if he (Velazquez) did not qualify for the SMI, respondents General Manager in its Calamba plant still granted his (Velazquez) request, along with other numerous concessions, to achieve industrial peace in the plant which was then experiencing labor relations problems. Lastly, Balles confirmed that petitioner failed to meet the trade receivable qualifiers of the SMI. She also cited the cases of Ed Valencia (Valencia) and Emmanuel Gutierrez (Gutierrez), both DSSs of respondent who retired on January 31, 2002 and December 30, 2002, respectively. She noted that, unlike Valencia, Gutierrez also did not receive the SMI as part of his retirement pay, since he failed to qualify under the policy guidelines. The verity of all these statements and representations stands and holds true to Us, considering that petitioner did not present any iota of proof to debunk the same.1wphi1 Therefore, respondent's isolated act of including the SMI in the retirement package of Velazquez could hardly be classified as a company practice that may be considered an enforceable obligation. To repeat, the principle against diminution of benefits is applicable only if the grant or benefit is founded on an express policy or has ripened into a practice over a long period of time which is consistent and deliberate; it presupposes that a company practice, policy and tradition favorable to the employees has been clearly established; and that the payments made by the company pursuant to it have ripened into benefits enjoyed by them.26 Certainly, a practice or custom is, as a general rule, not a source of a legally demandable or enforceable right. 27 Company practice, just like any other fact, habits, customs, usage or patterns of conduct, must be proven by the offering party who must allege and establish specific, repetitive conduct that might constitute evidence of habit or company practice. 28 To close, We rule that petitioner could have salvaged his case had he step up to disprove respondents contention that he miserably failed to meet the collection qualifiers of the SMI. Respondent argues that An examination of the Companys aged trial balance reveals that petitioner did not meet the trade receivable qual ifier. On the contrary, the said trial balance reveals that petitioner had a large amount of uncollected overdue accounts. For the year 2001, his percentage collection efficiency for current issuance was at an average of 13.5% a month as against the required 70%. For the same, petitioners collection efficiency was at an average of 60.25% per month for receivables aged 1 -30 days, which is again, way below the required 90%. For receivables aged 31-60 days during said year, petitioners collection efficiency was at an average of 56.17% per month, which is approximately half of the required 100%. Worse, for receivables over 60 days old, petitioners ave rage collection efficiency per month was a reprehensively low 14.10% as against the required 100%. 29 The above data was repeatedly raised by respondent in its Rejoinder (To Complainants Reply) before the LA, 30Memorandum of Appeal31 and Opposition (To Complainant-Appellees Motion for Reconsideration)32 before the NLRC, and Comment (On the Petition),33 Memorandum (For the Private Respondent),34 and Comment (On the Motion for Reconsideration)35 before the CA. Instead of frontally rebutting the data, petitioner treated them with deafening silence; thus, reasonably and logically implying lack of evidence to support the contrary.

WHEREFORE, the petition is DENIED. The January 9, 2007 Decision and March 6, 2007 Resolution of the Court of Appeals in CAG.R. SP No. 94622, which affirmed the January 31, 2006 Decision and March 8, 2006 Resolution of the NLRC deleting the LA's inclusion of sales management incentives in the computation of petitioner's retirement benefits, is hereby AFFIRMED. SO ORDERED. DIOSDADO M. PERALTA Associate Justice WE CONCUR: PRESBITERO J. VELASCO, JR. Associate Justice Chairperson TERESITA J. LEONARDO-DE CASTRO* Associate Justice ROBERTO A. ABAD Associate Justice

MARVIC MARIO VICTOR F. LEONEN Associate Justice ATTESTATION I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court's Division. PRESBITERO J. VELASCO, JR. Associate Justice Chairperson, Third Division CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson's Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court's Division. MARIA LOURDES P. A. SERENO Chief Justice

Footnotes
*

Designated Acting Member, in lieu of Associate Justice Jose Catral Mendoza, per Raffle dated February 22, 2010.

Penned by Associate Justice Remedios A. Salazar-Fernanda, with Associate Justices Jose Catral Mendoza (now a member ofthis Court Justice) and Ramon M. Bato, Jr., concurring; rollo, pp. 16-32.
2

Id. at 34-35. CA rollo, pp. 12-20. Id. at 25-27. Id. at 28-36. Rollo, p. 37.

Previously termed as Sales Performance Incentive (SPI). Records, pp. 3-4, 22. Id. at 16; CA rollo, p. 4. Id. at 115-123. Id. at 347-349, 351-358, 369-373. Id. at 391-392.

10

11

12

13

Honda Phils., Inc. v. Samahan ng Malayang Manggagawa sa Honda, G.R. No. 145561, June 15, 2005, 460 SCRA 186, 191-192.
14

University of the East v. University of the East Employees' Association, G.R. No. 179593, September 14, 2011, 657 SCRA 637, 650.
15

Eastern Telecommunications Philippines, Inc., v. Eastern Telecoms Employees Union, G.R. No. 185665, February 8, 2012, 665 SCRA 516, 533; University of the East v. University of the East Employees' Association, supra; and Arco Metal Products, Co., Inc. v. Samahan ng mga Manggagawa sa Arco Metal-NAFLU (SAMARM-NAFLU), G.R. No. 170734, May 14, 2008, 554 SCRA 110, 118.
16

Eastern Telecommunications Philippines, Inc., v. Eastern Telecoms Employees Union, supra; and Arco Metal Products, Co., Inc. v. Samahan ng mga Manggagawa sa Arco Metal-NAFLU (SAMARM-NAFLU), supra note 15.
17

Arco Metal Products, Co., Inc. v. Samahan ng mga Manggagawa sa Arco Metal-NAFLU (SAMARM-NAFLU), supra note 15.
18

Supreme Steel Corporation v. Nagkakaisang Manggagawa ng Supreme Independent Union (NMS-IND-APL), G.R. No. 185556, March 28, 2011, 646 SCRA 501, 527.
19

See Eastern Telecommunications Philippines, Inc., v. Eastern Telecoms Employees Union, supra note 15, at 532; Supreme Steel Corporation v. Nagkakaisang Manggagawa ng Supreme Independent Union (NMS-IND-APL), supra, at 528; and Metropolitan Bank and Trust Company v. National Labor Relations Commission, G.R. No. 152928, June 18, 2009, 589 SCRA 376, 384.
20

Metropolitan Bank and Trust Company v. National Labor Relations Commission, supra, at 385-386; Arco Metal Products, Co., Inc. v. Samahan ng mga Manggagawa sa Arco Metal-NAFLU (SAMARM-NAFLU), supra note 15, at 119; and Honda Phils., Inc. v. Samahan ng Malayang Manggagawa sa Honda, supra note 13, at 195.
21

Metropolitan Bank and Trust Company v. National Labor Relations Commission, supra note 19, at 386.

22

See Eastern Telecommunications Philippines, Inc., v. Eastern Telecoms Employees Union, supra note 15, at 532; University of the East v. University of the East Employees' Association, supra note 14; and Metropolitan Bank and Trust Company v. National Labor Relations Commission, supra note 19.
23

See University of the East v. University of the East Employees' Association, supra note 14, at 650-651. Records, pp. 110-111. Id. at 140-142, 157-160. University of the East v. University of the East Employees' Association, supra note 14. Makati Stock Exchange, Inc. v. Campos, G.R. No. 138814, April 16, 2009, 585 SCRA 120, 131.

24

25

26

27

28

Supreme Steel Corporation v. Nagkakaisang Manggagawa ng Supreme Independent Union (NMS-IND-APL), supra note 18, at 522.

29

Rollo, pp. 68-69. Records, pp. 136-137. Id. at 198. Id. at 333. CA rollo, p. 134. Id. at 432-433. Id. at 480. February 13, 2013

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35

G.R. No. 197299

OFFICE OF THE OMBUDSMAN, Petitioner, vs. RODRIGO V. MAPOY and DON EMMANUEL R. REGALARIO, Respondents. DECISION PER CURIAM: This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court assailing the Decision1 dated February 7, 2011 and Resoluiton2 dated June 7, 2011 of the Court of Appeals (CA) in CA-G.R. SP No. 116179 which reversed and set aside the Review/Recommendation3 dated February 1, 2008 issued by the Office of Ombudsman finding respondents Rodrigo V. Mapoy (Mapoy) and Don Emmanuel R. Regalario (Regalario) guilty of grave misconduct and dishonesty, and imposing upon them the penalty of dismissal from the service with cancellation of eligibility, forfeiture of retirement benefits and perpetual disqualification for reemployment in the government service. The Antecedent Facts Mapoy and Regalario (respondents) are Special Investigators of the National Bureau of Investigation (NBI), assigned at the Criminal Intelligence Division (CRID).4 On August 26, 2003, they implemented a search warrant against Pocholo Matias (Matias), owner of Pocholo Matias Grain Center, at his warehouses located in Valenzuela City and were able to seize 250,000 sacks of imported rice. Matias was then charged with technical smuggling or violation of Section 3602 of the Tariff and Customs Code before the Office of the City Prosecutor of Valenzuela. The search warrant, however, was subsequently quashed for "lack of deputization by the Bureau of Customs."5 On October 8, 2003, respondents were arrested by the elements of the Counter Intelligence Special Unit of the National Capital Regional Police Office (CISU-NCRPO) during an entrapment operation conducted at the Century Park Hotel, Manila based on the complaint6 of Matias that the respondents extorted money from him in exchange for not filing any other criminal charges against him. The arresting officers recovered the P300,000.00 marked money from Regalario.7 Thus, on October 20, 2003, the NBI, through its then Director, General Reynaldo G. Wycoco, filed a complaint 8against respondents before the Office of the Ombudsman, docketed as OMB-CA-03-0499-K and OMB-CA-03-0559-L, for Dishonesty, Grave Misconduct and Corrupt Practices. In their position paper,9 respondents denied the charges against them and claimed that Matias sent them death threats and offered money for the settlement of his case. This led them to seek authority from the Chief of the CRID-Intelligence Services to conduct further investigation on the matter.10 Thus, when Matias called them up in the morning of October 8, 2003 reiterating his offered consideration, they formed a team to conduct a legitimate entrapment operation against him for corruption of public officials at the agreed place or the Century Park Hotel, Manila whereat Matias dropped a white envelope on their table and hurriedly left. They then followed him to effect his arrest but were prevented from doing so by the CISU-NCRPO operatives. The Ombudsman Ruling On February 1, 2008, Medwin S. Dizon, Graft Investigation and Prosecution Officer II, issued a Review/Recommendation, 11 the dispositive portion of which states:

WHEREFORE, foregoing considered, respondents Rodrigo V. Mapoy, Special Investigator IV and Don Emmanuel R. Regalario, Special Investigator III, both of the National Bureau of Investigation are hereby found guilty of Grave Misconduct and Dishonesty, and are hereby meted the penalty of DISMISSAL from the service with cancellation of eligibility, forfeiture of retirement benefits, and perpetual disqualification for re-employment in the government service pursuant to the Uniform Rules on Administrative Cases in the Civil Service. SO ORDERED. 12 It found substantial evidence to support the charges against respondents who were caught in possession of the marked money inside the hotel. It ruled that as between the claims of entrapment by the parties, the presumption of regularity in the performance of duty applies in favor of the CISU-NCRPO operatives whose acts were not impelled by ill-motives, and whose entrapment operation was well-planned and coordinated. It noted that even the serial numbers of the marked money were duly recorded by the bank. In contrast, the supposed entrapment operation by the respondents did not have the imprimatur of the NBI Director who even initiated the instant complaint against them. Not even the Deputy Director for Intelligence Service of the NBI supported respondents entrapment claim. Neither was the alleged presence of the other members of the NBI team, Jose Rommel G. Ramirez (Ramirez) and Mark III C. Maure (Maure), at the hotel on that fateful day sufficiently established. Nor did the Disposition Form relied upon by respondents disclose the purported entrapment operation against Matias. Moreover, the Investigating Officer noted that: (1) some inconsistencies in the statements of respondents and their witnesses tend to corroborate the claims of Matias; (2) respondents did not immediately reveal the supposed purpose of their presence at the crime scene; and (3) it took them one week after the incident to file their complaint against Matias for corruption of public officials.13 Thus, it was concluded that respondents defenses were mere afterthought resorted to in order to gain leverage against the charge of robbery/extortion. 14 The foregoing resolution was approved by then Acting Ombudsman, Orlando C. Casimiro, on December 8, 2009. 15 Respondents motion for reconsideration therefrom was denied in the Order16 dated September 2, 2010. Aggrieved, respondents filed a petition for review under Rule 43 of the Rules of Court before the CA. The CA Ruling In its assailed Decision,17 the CA reversed and set aside the findings of the Office of the Ombudsman based on the following grounds: (1) there was no evidence positively confirming the fact that respondents were not conducting a legitimate entrapment operation; (2) Matias had an axe to grind against respondents who raided his warehouses and caused the filing of a criminal case against him, thus, his motive is highly suspect; (3) it is unclear what really transpired at the Century Park Hotel, Manila on October 8, 2003 between the respondents, Matias and the arresting officers of the CISU-NCRPO. Consequently, applying the equipoise rule, the CA acquitted respondents of the crimes charged. The NBI thus sought reconsideration 18 while the Office of the Ombudsman filed an Omnibus Motion to Intervene and to Admit Attached Motion for Reconsideration of the Decision dated 07 February 2011 (Filed with Plea for Leave of Court). 19 On June 7, 2011, the CA issued a Resolution 20 where it noted the Office of the Ombudsmans Motion to Intervene and denied both motions for reconsideration. Issues Before the Court Hence, the instant petition filed by the Office of the Ombudsman based on the following ground: THE COURT OF APPEALS SERIOUSLY ERRED IN ISSUING THE ASSAILED DECISION DATED 07 FEBRUARY 2011, REVERSING THE OFFICE OF THE OMBUDSMANS REVIEW/RECOMMENDATION DATED 01 FEBRUARY 2008 WHICH FOUND THE RESPONDENTS GUILTY OF GRAVE MISCONDUCT AND DISHONESTY AND IMPOSED UPON THEM THE PENALTY OF DISMISSAL FROM THE SERVICE WITH CANCELLATION OF ELIGIBILITY, FORFEITURE OF RETIREMENT BENEFITS, AND PERPETUAL DISQUALIFICATION FOR REEMPLOYMENT IN THE GOVERNMENT SERVICE, CONSIDERING THAT: The findings of facts established by the Office of the Ombudsman in the Review/Recommendation dated 01 February 2008 are supported by substantial evidence, thus, conclusive upon the reviewing authority. 21 The Courts Ruling The petition is meritorious. It is well-entrenched that in an administrative proceeding, the quantum of proof required for a finding of guilt is only substantial evidence or such relevant evidence as a reasonable mind might accept as adequate to support a conclusion and not proof beyond reasonable doubt which requires moral certainty to justify affirmative findings. 22

In this case, the Court finds substantial evidence to support the charges against respondents for grave misconduct and dishonesty. Records show that Matias sought the help of the police to entrap respondents who were illegally soliciting money from him. Hence, the CISU-NCRPO planned an entrapment operation which took place at the Century Park Hotel, Manila on October 8, 2003. Prior to the entrapment, Matias withdrew P300,000.00 from his bank,23 which, in turn, recorded the serial numbers of the bills released. 24 During the entrapment, Mapoy received the white envelope containing P300,000.00 marked money from Matias and handed it over to Regalario from whom it was subsequently recovered. After their arrest, respondents were brought to the police station for investigation 25 and subsequently charged of the crime of robbery/extortion. To a reasonable mind, the foregoing circumstances are more than adequate to support the conclusion that respondents extorted money from Matias which complained act amounts to grave misconduct or such corrupt conduct inspired by an intention to violate the law, or constituting flagrant disregard of well-known legal rules.26 Similarly, respondents have been dishonest in accepting money from Matias. Dishonesty has been held to include the disposition to lie, cheat, deceive or defraud, untrustworthiness, lack of integrity, lack of honesty, probity or integrity in principle, lack of fairness and straightforwardness, among others. 27 Hence, their dismissal from the service with all its accessory penalties was in order.1wphi1 The Court cannot subscribe to the theory of respondents that they were at the Century Park Hotel, Manila on that fateful day to entrap Matias for the crime of corruption of public officers. As correctly found by the Ombudsman, nothing was mentioned in the Disposition Form28 relied upon by respondents with respect to their planned entrapment of Matias. 29 It was only a request to conduct further investigation which was not even shown to have been approved. Moreover, the respondents' act of letting Matias leave the table after handing the money to them30 is inconsistent with their purported intent to arrest him for the crime of corruption of public officers. No law ot1icer would let an offender walk away from him. Furthermore, as aptly observed by the Ombudsman, the presence of respondents' witnesses, Ramirez and Maure, at the hotel was not sufficiently established, 31 and no justification was offered to explain their failure to come to the aid of respondents when the latter were being arrested. All told, the inculpatory evidence herein point to only one thing: respondents are guilty as charged. Consequently, the CA committed reversible error in applying the equipoise rule 32 in resolving respondents' appeal. WHEREFORE, premises considered, the instant petition is GRANTED. The February 7, 2011 Decision and June 7, 2011 Resolution of the Court of Appeals in CA-G.R. SP No. 116179 are hereby REVERSED and SET ASIDE.The Review/Recommendation dated February I, 2008 of the Office of the Ombudsman is REINSTATED. SO ORDERED. ANTONIO T. CARPIO Associate Justice Chairperson

ARTURO D. BRION Associate Justice JOSE PORTUGAL PEREZ Associate Justice

MARIANO C. DEL CASTILLO Associate Justice ESTELA M. PERLAS-BERNABE Associate Justice

ATTESTATION I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court's Division. ANTONIO T. CARPIO Associate Justice Chairperson, Second Division CERTTIFICATION Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson's Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court's Division. MARIA LOURDES P. A. SERENO Chief Justice

Footnotes
1

Rollo. pp 44-56. Penned by Associate Justice Danton Q. Bueser, with Associate Justices Noel G. Tijam and Marlene Gonzales-Sison, concurring.
2

Id at 58-59 Id at 174-182. Id. at 144. Id. at 45. Id. at 131-132. Id. at 135. Id. at 115-116. Id. at 165-173. Id. at 198. Disposition Form. Id. at 174-182. Id. at 180-181. Id. at 177-180. Id. at 180. Id. at 181. Id. at 183-187. Id. at 44-56. Id. at 188-196. Id. at 61-88. Id. at 58-59. Id. at 25-26.

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Miro v. Dosono, G.R. No. 170697, April 30, 2010, 619 SCRA 653, 660; Commission on Audit, Regional Office No. 13, Butuan City v. Hinampas, G.R. No. 158672, August 7, 2007, 529 SCRA 245, 260.
23

Rollo, p. 137. Id. at 138. Id. at 135.

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Miro v. Dosono, G.R. No. 170697, April 30, 2010, 619 SCRA 653, 662. Estarija v. Ranada, G.R. No. 159314, June 26, 2006, 492 SCRA 652, 663. Rollo. p. 198 Id at 178 Id at 179-180 Id at 178 Id at 53. December 14, 2011

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G.R. No. 191491

JEBSENS MARITIME INC., represented by MS. ARLENE ASUNCION and/or ALLIANCE MARINE SERVICES, LTD., Petitioners, vs. ENRIQUE UNDAG, Respondent. DECISION MENDOZA, J.: This petition for review assails the September 16, 2009 Decision1 and the March 3, 2010 Resolution2 of the Court of Appeals (CA), which set aside the October 17, 2005 and January 24, 2006 Resolutions of the National Labor Relations Commission (NLRC), dismissing the complaint of respondent Enrique Undag (respondent) for disability benefits. Records bear out that respondent was hired as Lead Operator on board the vessel FPSO Jamestown owned by Alliance Marine Services, Ltd. and managed by its local agent, Jebsens Maritime, Inc. (petitioners). Respondents contract with petitioners was for a period of four (4) months with a basic salary of US$806.00 a month. He was deployed on March 24, 2003 and eventually repatriated to the Philippines on July 18, 2003 after his contract with the petitioners had expired. On September 24, 2003, about two months after repatriation, he went to see a physician, Dr. Efren Vicaldo (Dr. Vicaldo), for a physical check-up and was diagnosed to have "Hypertensive cardiovascular disease, Atrial Fibrillation, Diabetes Mellitus II, Impediment Grade X (20.15%)." According to Dr. Vicaldo, respondent had a history of hypertension and diabetes and was at risk of developing a stroke, coronary artery disease and congestive heart failure. He likewise stated that respondents ailment was aggravated by his work as a seaman and that he was no longer fit for work. For said reason, respondent requested for financial assistance from petitioners but the latter denied his request. Constrained, he filed a complaint for sickness benefits against petitioners before the NLRC, alleging that he had been suffering from chest pains and difficulty of breathing since July 2003 when he was on board petitioners vessel. Despite knowing his bad phy sical condition upon repatriation, the petitioners did not give him any financial assistance. Thus, he prayed that petitioners be ordered to reimburse him for his medical expenses and pay him sickness allowance amounting to US$3,224.00, including damages and attorneys fees. Petitioners countered that respondent was not entitled to disability benefits because his repatriation was not due to medical reasons but due to the expiration of his employment contract. Petitioners basically argued that, under the POEA Standard Employment Contract (POEA-SEC), a seafarer was entitled to disability benefits only if he had suffered a work-related illness during the term of his contract. On June 30, 2005, after due hearing, the Labor Arbiter (LA) rendered a decision ordering petitioners to pay, jointly and severally, respondent the Philippine peso equivalent of US$60,000.00 representing total permanent disability compensation benefits for US$3,224.00 sickness allowance, and 10% attorneys fees. On appeal, however, the NLRC reversed the LA decision and denied respondents claim for disability benefits. The NLRC reasoned out that respondent failed to present substantial evidence proving that he had suffered any illness while on board or after disembarking from petitioners vessel. Respondents motion for reconsideration was later deni ed.

Not satisfied with the NLRC decision, respondent appealed before the CA. On September 16, 2009, the CA rendered a decision setting aside the ruling of the NLRC. The appellate court stated that respondent was able to prove by substantial evidence that his work as a seafarer caused his hypertensive cardiovascular disease or, at least, was a relevant factor in contracting his illness. The CA explained that as Lead Operator, respondent performed multi-tasking functions which required excessive physical and mental effort. Moreover, he was also exposed to the perils of the sea and was made to endure unpredictable and extreme climate changes in the daily performance of his job. The CA also took judicial notice of the fact that overseas workers suffer a great degree of emotional strain while on duty on board vessels because of their being separated from their families for the duration of their contract. The CA was of the strong view that the inherent difficulties in respondents job definitely caused his illnes s. The CA added that because of the nature of his work, the illness suffered by respondent contributed to the aggravation of his injury which was pre-existing at the time of his employment. Finally, the CA ruled that respondent is entitled to claim total and permanent disability benefits because of the undisputed doctors findings that he " is now unfit to resume work as a seaman in any capacity," which clearly constitutes a permanent and total disability as defined by law. Not in conformity with the CA decision, petitioners filed this petition for review praying for its reversal raising this lone ISSUE WHETHER OR NOT THE COURT OF APPEALS ERRED IN AWARDING FULL DISABILITY BENEFITS TO THE PRIVATE RESPONDENT. In advocacy of their position, petitioners argue that the CA committed a reversible error in awarding respondent disability benefits on the principal ground that there are numerous substantial and competent evidence on record which clearly establish the fact that respondent was guilty of fraudulent misrepresentation, hence, forfeiting his right to any benefits under the POEA contract. For one, respondent intentionally lied when he declared that he was not suffering from a previous medical condition in his pre-employment medical examination (PEME). Specifically, he failed to disclose the fact that he was suffering from diabetes and heart problem, which is a clear case of concealment. Secondly, respondents illnesses were not acquired during the term of his contract with petitioners. He had no evidence showi ng that he acquired the heart problem and hypertension while he was on board the vessel. The fact that respondent passed his PEME does not automatically mean that he suffered his illness on board the vessel or that the same was not pre-existing. Third, the Labor Code provision on permanent disability is not applicable in a claim for disability benefits under the POEA contract. Respondents Position Respondent counters that petitioners never raised the issue of fraudulent misrepresentation before the labor tribunals despite being given the opportunity to do so. Hence, they are estopped from raising it for the first time on appeal. At any rate, he claims that he did not commit any fraud or misrepresentation because he underwent a stringent PEME, which included a blood and urine examination, conducted by the company-designated physician. His illness, therefore, was not pre-existing. In any case, the pre-existence of an illness is not a bar for the compensability of a seafarers illness. His non-compliance with the mandatory 3-day reporting upon signoff is irrelevant because it only applies to a seafarer who has signed off from the vessel for medical reasons. Moreover, respondent argues that a repatriation due to a finished contract does not preclude a seafarer from recovery of benefits, as the only requirement is that the disease must be a consequence or a result of the work performed. He has shown by substantial evidence that his cardiovascular disease was work-related. The strenuous work conditions that he experienced while on sea duty coupled with his usual encounter with the unfriendly forces of nature increased the risk of contracting his heart ailment. Lastly, he asserts that his disability is permanent and total because he has been declared to be unfit for sea duty for which he is entitled to recover attorneys fees and litigation costs under Article 2208. THE COURTS RULING >No substantial evidence that illness was work-related Entitlement of seamen on overseas work to disability benefits is a matter governed, not only by medical findings, but by law and by contract. The material statutory provisions are Articles 191 to 193 under Chapter VI (Disability Benefits) of the Labor Code, in relation with Rule X of the Rules and Regulations Implementing Book IV of the Labor Code. By contract, the POEA-SEC, as provided under Department Order No. 4, series of 2000 of the Department of Labor and Employment, and the parties Collective Bargaining Agreement (CBA) bind the seaman and his employer to each other. 3 Deemed incorporated in every Filipino seafarers contract of employment, denominated as POEA -SEC or the Philippine Overseas Employment Administration-Standard Employment Contract, is a set of standard provisions established and implemented by the POEA, called the Amended Standard Terms and Conditions Governing the Employment of Filipino Seafarers on Board Ocean-

Going Vessels, which contain the minimum requirements prescribed by the government for the employment of Filipino seafarers. Section 20(B), paragraph 6, of the 2000 Amended Standard Terms and Conditions provides: SECTION 20. COMPENSATION AND BENEFITS xxx B. COMPENSATION AND BENEFITS FOR INJURY OR ILLNESS The liabilities of the employer when the seafarer suffers work-related injury or illness during the term of his contract are as follows: Xxx 6. In case of permanent total or partial disability of the seafarer caused by either injury or illness the seafarer shall be compensated in accordance with the schedule of benefits enumerated in Section 32 of this Contract. Computation of his benefits arising from an illness or disease shall be governed by the rates and the rules of compensation applicable at the time the illness or disease was contracted. Pursuant to the aforequoted provision, two elements must concur for an injury or illness to be compensable. First, that the injury or illness must be work-related; and second, that the work-related injury or illness must have existed during the term of the seafarers employment contract. The 2000 POEA Amended Standard Terms and Conditions defines "work-related injury" as "injury(ies) resulting in disability or death arising out of and in the course of employment" and "work-related illness" as "any sickness resulting in disability or death as a result of an occupational disease listed under Section 32-A of this contract with the conditions set therein satisfied." These are: SECTION 32-A. OCCUPATIONAL DISEASES For an occupational disease and the resulting disability or death to be compensable, all of the following conditions must be satisfied: 1) The seafarers work must involve the risks described herein; 2) The disease was contracted as a result of the seafarers exposure to the described risks; 3) The disease was contracted within a period of exposure and under such other factors necessary to contract it; and 4) There was no notorious negligence on the part of the seafarer. Sec. 32-A(11) of the 2000 POEA Amended Standard Terms and Conditions explicitly considers a cardiovascular disease as an occupational disease if the same was contracted under working conditions that involve any of the following risks a) If the heart disease was known to have been present during employment, there must be proof that an acute exacerbation was clearly precipitated by the unusual strain by reasons of the nature of his work. b) The strain of the work that brings about an acute attack must be sufficient severity and must be followed within 24 hours by the clinical signs of cardiac insult to constitute causal relationship. c) If a person who was apparently asymptomatic before being subjected to strain at work showed signs and symptoms of cardiac injury during the performance of his work and such symptoms and signs persisted, it is reasonable to claim a causal relationship. Consequently, for cardiovascular disease to constitute an occupational disease for which the seafarer may claim compensation, it is incumbent upon said seafarer to show that he developed the same under any of the three conditions identified above. 4 In labor cases as in other administrative proceedings, substantial evidence or such relevant evidence as a reasonable mind might accept as sufficient to support a conclusion is required. The oft-repeated rule is that whoever claims entitlement to the benefits provided by law should establish his or her right thereto by substantial evidence. 5 Substantial evidence is more than a mere scintilla.lawphi1 The evidence must be real and substantial, and not merely apparent; for the duty to prove work-causation or workaggravation imposed by law is real and not merely apparent.6

In this case, the Court is of the considered view that respondent failed to prove that his ailment was work-related and was acquired during his 4-month sea deployment. Respondent claims that sometime in July 2003, he showed manifestations of a heart disease when he suddenly felt chest pains, shortness of breath and fatigability.7 He, however, never substantiated such claim. He never showed any written note, request or record about any medical check-up, consultation or treatment. Similarly, he failed to substantiate his allegation that after his arrival in Manila on July 18, 2003, he reported to petitioners office on July 31, 2003 to seek medical consultation for the discomfort he was experiencing but petitioners ignored him. 81avvphi1 He also alleged that on August 4, 2003, more or less sixteen (16) days after arriving in Manila, he underwent a physical and laboratory examination at the Maritime Clinic for International Service, Inc. conducted by petitioners where he was declared to be unfit for sea duty. Again, there is no record of this except his self-serving claim. What is on record is that on September 24, 2003, respondent surfaced demanding payment of disability benefits. Respondent failed to comply with the mandatory 3-day rule More importantly, respondent failed to comply with the mandatory 3-day medical examination deadline provided in Section 20(B), paragraph (3) of the 2000 Amended Standard Terms and Conditions Governing the Employment of Filipino Seafarers on Board Ocean-Going Vessels. As earlier stated, it was only on September 24, 2003, or more than two (2) months after his arrival in Manila, that he sought a medical opinion from Dr. Vicaldo who declared him unfit to work as a seaman due to "hypertensive cardiovascular disease, atrial fibrillation and diabetes mellitus II."9Section 20(B), paragraph (3) of the 2000 Amended Standard Terms and Conditions Governing the Employment of Filipino Seafarers on Board Ocean-Going Vessels, reads: Section 20(B), paragraph (3) thereof states: X x x. 3. Upon sign off from the vessel for medical treatment, the seafarer is entitled to sickness allowance equivalent to his basic wage until he is declared fit to work or the degree of permanent disability has been assessed by the company-designated physician but in no case shall this period exceed one-hundred twenty (120) days. For this purpose, the seafarer shall submit himself to a post-employment medical examination by a company-designated physician within three working days upon his return except when he is physically incapacitated to do so, in which case a written notice to the agency within the same period is deemed as compliance. Failure of the seafarer to comply with the mandatory reporting requirement shall result in his forfeiture of the right to claim the above benefits. [Emphases and underscoring supplied] While the rule is not absolute, there is no credible explanation from respondent why he failed to comply with the mandatory rule considering his claim that in July, 2003, he was suffering from chest pain, shortness of breath and fatigue. An award of disability benefit to a seaman in this case, despite non-compliance with strict mandatory requirements of the law, cannot be sustained. The rationale behind the rule can easily be divined. Within three days from repatriation, it would be fairly easier for a physician to determine if the illness was work-related or not. After that period, there would be difficulty in ascertaining the real cause of the illness. To ignore the rule would set a precedent with negative repercussions because it would open the floodgates to a limitless number of seafarers claiming disability benefits. It would certainly be unfair to the employer who would have difficulty determining the cause of a claimants illness considering the passage of time. In such a case, the employers would have no protection against unrelated disability claims. Respondent claims that the 3-day mandatory rule is not applicable as it is only for those who were repatriated for medical reasons. This could only mean that he had no medical reason then. In his pleadings, he claimed that sometime in July 2003, he showed manifestations of a heart disease as he suddenly felt chest pains, shortness of breath and fatigability. 10 He, however, failed to disclose when exactly in July 2003 that he felt those manifestations whether before or after his repatriation on July 18, 2003. If it was before the said date, he should have submitted himself to a medical examination three days after repatriation. The Courts ruling is not novel. In the past, the Court repeatedly denied the payment of disability benefits to seamen who fa iled to comply with the mandatory reporting and examination requirement. Lately, in the recent case of Alex C. Cootauco v. MMS Phil. Maritime Services, Inc.,11 it was written: For this purpose, the seafarer shall submit himself to a post-employment medical examination by a companydesignated physician within three working days upon his return except when he is physically incapacitated to do so, in which case a written notice to the agency within the same period is deemed as compliance. Failure of the seafarer to comply with the mandatory reporting requirement shall result in his forfeiture of the right to claim the above benefits. As these provisions operate, the seafarer, upon sign-off from his vessel, must report to the company-designated physician within three working days from arrival for diagnosis and treatment.

Applying the above provision of Section 20(B), paragraph (3), petitioner is required to undergo post-employment medical examination by a company-designated physician within three working days from arrival, except when he is physically incapacitated to do so, in which case, a written notice to the agency within the same period would suffice. In Maunlad Transport, Inc. v. Manigo, Jr., this Court explicitly declared that it is mandatory for a claimant to be examined by a company-designated physician within three days from his repatriation. The unexplained omission of this requirement will bar the filing of a claim for disability benefits. The NLRC and the Court of Appeals determined that petitioner did not observe the established procedure as there is no proof at all that he reported to the office of the respondents. We see no reason to depart from their findings. While petitioner remains firm that he reported to the office of the respondents for mandatory reporting, the records are bereft of any proof to fortify his claim. The onus probandi falls on petitioner to establish or substantiate such claim by the requisite quantum of evidence. There is absolutely no evidence on record to prove petitioners claim that he reported to respondents office for mandatory reportorial requirement. Petitioner therefore failed to adduce substantial evidence as basis for the grant of relief. [Emphasis and underscoring supplied] The Court reiterated the same ruling in the case of Coastal Safeway Marine Services, Inc. vs. Elmer T. Esguerra, 12 where it was written: For this purpose, the seafarer shall submit himself to a post-employment medical examination by a company-designated physician within three working days upon his return except when he is physically incapacitated to do so, in which case, a written notice to the agency within the same period is deemed as compliance. Failure of the seafarer to comply with the mandatory reporting requirement shall result in his forfeiture of the right to claim the above benefits. If a doctor appointed by the seafarer disagrees with the assessment, a third doctor may be agreed jointly between the employer and the seafarer. The third doctor's decision shall be final and binding on both parties. The foregoing provision has been interpreted to mean that it is the company-designated physician who is entrusted with the task of assessing the seaman's disability, whether total or partial, due to either injury or illness, during the term of the latter's employment. Concededly, this does not mean that the assessment of said physician is final, binding or conclusive on the claimant, the labor tribunal or the courts. Should he be so minded, the seafarer has the prerogative to request a second opinion and to consult a physician of his choice regarding his ailment or injury, in which case the medical report issued by the latter shall be evaluated by the labor tribunal and the court, based on its inherent merit. For the seamans claim to prosper, however, it is mandatory that he should be examined by a company-designated physician within three days from his repatriation. Failure to comply with this mandatory reporting requirement without justifiable cause shall result in forfeiture of the right to claim the compensation and disability benefits provided under the POEA-SEC. [Emphases and underscoring supplied] WHEREFORE, the petition is GRANTED. The September 16, 2009 Decision of the Court of Appeals and its March 3, 2010 Resolution are hereby REVERSED and SET ASIDE, and the October 17, 2005 and January 24, 2006 Resolutions of the National Labor Relations Commission are REINSTATED. SO ORDERED. JOSE CATRAL MENDOZA Associate Justice WE CONCUR: PRESBITERO J. VELASCO, JR. Associate Justice Chairperson DIOSDADO M. PERALTA Associate Justice ESTELA M. PERLAS-BERNABE Associate Justice ATTESTATION I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division. ROBERTO A. ABAD Associate Justice

PRESBITERO J. VELASCO, JR. Associate Justice Chairperson, Third Division CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution and the Division Chairpersons Attestation, I certify that the concl usions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division. RENATO C. CORONA Chief Justice

Footnotes
1

Rollo, pp. 13-25. Id. at 27.

Magsaysay Maritime Corp. and/or Cruise Ships Catering and Services International N.V. v. National Labor Relations Commission and Rommel B. Cedol, G.R. No. 186180, March 22, 2010, 616 SCRA 362, 372-373.
4

Carlos N. Nisda v. Sea Serve Maritime Agency and Khalifa A. Algosaibi Diving and Marine Services, G.R. No. 179177, July 23, 2009, 593 SCRA 668, 695.
5

Alex C. Cootauco v. MMS Phil. Maritime Services, Inc., Ms. Mary C. Maquilan and/or MMS Co. Ltd., G.R. No. 184722, March 15, 2010, 615 SCRA 529, 544-545.
6

Edgardo M. Panganiban v. Tara Trading Ship Management, Inc. & ShinLine SDN BHD, G.R. No. 187032, October 18, 2010, 633 SCRA 353, 365.
7

Rollo, p. 130. Id. at 213. Id. at 213-214. Id. at 130. G.R. No. 184722, March 15, 2010, 615 SCRA 529, 543-544. G.R. No. 185352, August 10, 2011.

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