Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 187226
On June 4, 2003, the petitioner, through counsel, sent Sr. Quiambao a letter,9 which, in
part, reads:
To us, pre-marital sex between two consenting adults without legal impediment to marry
each other who later on married each other does not fall within the contemplation of
"disgraceful or immoral conduct" and "serious misconduct" of the Manual of Regulations
for Private Schools and the Labor Code of the Philippines.
Your argument that what happened to our client would set a bad example to the
students and other employees of your school is speculative and is more imaginary than
real. To dismiss her on that sole ground constitutes grave abuse of management
prerogatives.
Considering her untarnished service for two years, dismissing her with her present
condition would also mean depriving her to be more secure in terms of financial
capacity to sustain maternal needs.10
In a letter11 dated June 6, 2003, SSCW, through counsel, maintained that pre-marital
sexual relations, evenif between two consenting adults without legal impediment to
marry, is considered a disgraceful and immoral conduct or a serious misconduct, which
are grounds for the termination of employment under the 1992 MRPS and the Labor
Code. That SSCW, as a Catholic institution of learning, has the right to uphold the
teaching of the Catholic Church and expect its employees to abide by the same. They
further asserted that the petitioners indiscretion is further aggravated by the fact that
she is the Assistant to the Director of the Lay Apostolate and Community Outreach
Directorate, a position of responsibility that the students look up to as rolemodel. The
petitioner was again directed to submit a written explanation on why she should not be
dismissed.
On June 9, 2003, the petitioner informed Sr. Quiambao that she adopts her counsels
letter dated June 4, 2003 as her written explanation.12
Consequently, in her letter13 dated June 11, 2003, Sr. Quiambao informed the petitioner
that her employment with SSCW is terminated on the ground of serious misconduct.
She stressed that pre-marital sexual relations between two consenting adults with no
impediment to marry, even if they subsequently married, amounts to immoral conduct.
She further pointed out that SSCW finds unacceptable the scandal brought about by the
petitioners pregnancy out of wedlock as it ran counter to the moral principles that
SSCW stands for and teaches its students.
Thereupon, the petitioner filed a complaint for illegal dismissal with the Regional
Arbitration Branch of the NLRC in Quezon City against SSCW and Sr. Quiambao
(respondents). In her position paper,14 the petitioner claimed that SSCW gravely
abused its management prerogative as there was no just cause for her dismissal. She
maintained that her pregnancy out of wedlock cannot be considered as serious
misconduct since the same is a purely private affair and not connected in any way with
her duties as an employee of SSCW. Further, the petitioner averred that she and her
boyfriend eventually got married even prior to her dismissal.
For their part, SSCW claimed that there was just cause to terminate the petitioners
employment with SSCW and that the same is a valid exercise of SSCWs management
prerogative. They maintained that engaging in pre-marital sex, and getting pregnant as
a result thereof, amounts to a disgraceful or immoral conduct, which is a ground for the
dismissal of an employee under the 1992 MRPS.
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They pointed out that SSCW is a Catholic educational institution, which caters
exclusively to young girls; that SSCW would lose its credibility if it would maintain
employees who do not live up to the values and teachings it inculcates to its students.
SSCW further asserted that the petitioner, being an employee of a Catholic educational
institution, should have strived to maintain the honor, dignity and reputation of SSCW as
a Catholic school.15
The Ruling of the Labor Arbiter
On February 28, 2006, the Labor Arbiter (LA) rendered a Decision,16 in NLRC Case
No. 6-17657-03-C which dismissed the complaint filed by the petitioner. The LA found
that there was a valid ground for the petitioners dismissal; that her pregnancy out of
wedlock is considered as a "disgraceful and immoral conduct." The LA pointed out that,
as an employee of a Catholic educational institution, the petitioner is expected to live up
to the Catholic values taught by SSCW to its students. Likewise, the LA opined that:
Further, a deep analysis of the facts would lead us to disagree with the complainant that
she was dismissed simply because she violate[d] a Catholic [teaching]. It should not be
taken in isolation but rather it should be analyzed in the lightof the surrounding
circumstances as a whole. We must also take into [consideration] the nature of her work
and the nature of her employer-school. For us, it is not just an ordinary violation. It was
committed by the complainant in an environment where her strict adherence to the
same is called for and where the reputation of the school is at stake. x x x.17
The LA further held that teachers and school employees, both in their official and
personal conduct, must display exemplary behavior and act in a manner that is beyond
reproach.
The petitioner appealed to the NLRC, insisting that there was no valid ground for the
termination of her employment. She maintained that her pregnancy out of wedlock
cannot be considered as "serious misconduct" under Article 282 of the Labor Code
since the same was not of such a grave and aggravated character. She asserted that
SSCW did not present any evidence to establish that her pregnancy out of wedlock
indeed eroded the moral principles that it teaches its students.18
The Ruling of the NLRC
On February 28, 2007, the NLRC issued a Resolution,19 which affirmed the LA
Decision dated February 28, 2006. The NLRC pointed out that the termination of the
employment of the personnel of private schools is governed by the 1992 MRPS; that
Section 94(e) thereof cites "disgraceful or immoral conduct" as a just cause for
dismissal, in addition to the grounds for termination of employment provided for under
Article 282 of the Labor Code. The NLRC held that the petitioners pregnancy out of
wedlock is a "disgraceful or immoral conduct" within the contemplation of Section 94(e)
of the 1992 MRPS and, thus, SSCW had a valid reason to terminate her employment.
The petitioner sought reconsideration20 of the Resolution dated February 28, 2007 but
it was denied by the NLRC in its Resolution21 dated May 21, 2007.
Unperturbed, the petitioner filed a petition22 for certiorari with the CA, alleging that the
NLRC gravely abused its discretion in ruling that there was a valid ground for her
dismissal. She maintained that pregnancy out of wedlock cannot be considered as a
disgraceful or immoral conduct; that SSCW failed to prove that its students were indeed
gravely scandalized by her pregnancy out of wedlock. She likewise asserted that the
NLRC erred in applying Section 94(e) of the 1992 MRPS.
The Ruling of the CA
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On September 24, 2008, the CA rendered the herein assailed Decision,23 which denied
the petition for certiorari filed by the petitioner. The CA held that it is the provisions of the
1992 MRPS and not the Labor Code which governs the termination of employment of
teaching and non-teaching personnel of private schools, explaining that:
It is a principle of statutory construction that where there are two statutes that apply to a
particular case, that which was specially intended for the said case must prevail.
Petitioner was employed by respondent private Catholic institution which undeniably
follows the precepts or norms of conduct set forth by the Catholic Church. Accordingly,
the Manual of Regulations for Private Schools followed by it must prevail over the Labor
Code, a general statute. The Manual constitutes the private schools Implementing
Rules and Regulations of Batas Pambansa Blg. 232 or the Education Act of 1982. x x
x.24
The CA further held that the petitioners dismissal was a valid exercise of SSCWs
management prerogative to discipline and impose penalties on erring employees
pursuant toits policies, rules and regulations. The CA upheld the NLRCs conclusion that
the petitioners pregnancy out of wedlock is considered as a "disgraceful and immoral
conduct" and, thus, a ground for dismissal under Section 94(e) of the 1992 MRPS. The
CA likewise opined that the petitioners pregnancy out of wedlock is scandalous per
segiven the work environment and social milieu that she was in, viz:
Under Section 94 (e) of the [MRPS], and even under Article 282 (serious misconduct) of
the Labor Code, "disgraceful and immoral conduct" is a basis for termination of
employment.
xxxx
Petitioner contends that her pre-marital sexual relations with her boyfriend and her
pregnancy prior to marriage was not disgraceful or immoral conduct sufficient for her
dismissal because she was not a member of the schools faculty and there is no
evidence that her pregnancy scandalized the school community.
We are not persuaded. Petitioners pregnancy prior to marriage is scandalous in itself
given the work environment and social milieu she was in. Respondent school for young
ladies precisely seeks to prevent its students from situations like this, inculcating in
them strict moral values and standards. Being part of the institution, petitionersprivate
and public life could not be separated. Her admitted pre-marital sexual relations was a
violation of private respondents prescribed standards of conduct that views pre-marital
sex as immoral because sex between a man and a woman must only take place within
the bounds of marriage.
Finally, petitioners dismissal is a valid exercise of the employer-schools management
prerogative to discipline and impose penalties on erring employees pursuant to its
policies, rules and regulations. x x x.25 (Citations omitted)
The petitioner moved for reconsideration26 but it was denied by the CA in its
Resolution27 dated March 2, 2009.
Hence, the instant petition.
Issues
Essentially, the issues set forth by the petitioner for this Courts decision are the
following: first, whether the CA committed reversible error in ruling that it is the 1992
MRPS and not the Labor Code that governs the termination of employment of teaching
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as the right to privacy) should be observed to the extent that they protect behavior that
may be frowned upon by the majority.
Under these tests, two things may be concluded from the fact that an unmarried woman
gives birth out of wedlock:
(1) if the father of the child is himself unmarried, the woman is not ordinarily
administratively liable for disgraceful and immoral conduct.It may be a not-so-ideal
situation and may cause complications for both mother and child but it does not give
cause for administrative sanction. There is no law which penalizes an unmarried mother
under those circumstances by reason of her sexual conduct or proscribes the
consensual sexual activity between two unmarried persons. Neither does the situation
contravene any fundamental state policy as expressed in the Constitution, a document
that accommodates various belief systems irrespective of dogmatic origins.
(2) if the father of the child born out of wedlock is himself married to a woman other
thanthe mother, then there is a cause for administrative sanction against either the
father or the mother. In sucha case, the "disgraceful and immoral conduct" consists of
having extramarital relations with a married person. The sanctity of marriage is
constitutionally recognized and likewise affirmed by our statutes as a special contract of
permanent union. Accordingly, judicial employees have been sanctioned for their
dalliances with married persons or for their own betrayals of the marital vow of fidelity.
In this case, it was not disputed that, like respondent, the father of her child was
unmarried. Therefore, respondent cannot be held liable for disgraceful and immoral
conduct simply because she gave birth to the child Christian Jeon out of wedlock.44
(Citations omitted and emphases ours)
Both Estrada and Radamare administrative cases against employees in the civil
service. The Court, however, sees no reason not to apply the doctrines enunciated in
Estrada and Radamin the instant case. Estrada and Radamalso required the Court to
delineate what conducts are considered disgraceful and/or immoral as would constitute
a ground for dismissal. More importantly, as in the said administrative cases, the instant
case involves an employees security of tenure; this case likewise concerns
employment, which is not merely a specie of property right, but also the means by which
the employee and those who depend on him live.45
It bears stressing that the right of an employee to security of tenure is protected by the
Constitution. Perfunctorily, a regular employee may not be dismissed unless for cause
provided under the Labor Code and other relevant laws, in this case, the 1992 MRPS.
As stated above, when the law refers to morality, it necessarily pertains to public and
secular morality and not religious morality. Thus, the proscription against "disgraceful or
immoral conduct" under Section 94(e) of the 1992 MRPS, which is made as a cause for
dismissal, must necessarily refer to public and secular morality. Accordingly, in order for
a conduct tobe considered as disgraceful or immoral, it must be "detrimental (or
dangerous) to those conditions upon which depend the existence and progress of
human society and not because the conduct is proscribed by the beliefs of one religion
or the other."
Thus, in Santos v. NLRC,46 the Court upheld the dismissal of a teacher who had an
extra-marital affair with his co-teacher, who is likewise married, on the ground of
disgraceful and immoral conduct under Section 94(e) of the 1992 MRPS. The Court
pointed out that extra-marital affair is considered as a disgraceful and immoral conduct
is an afront to the sanctity of marriage, which is a basic institution of society, viz:
We cannot overemphasize that having an extra-marital affair is an afront to the sanctity
of marriage, which is a basic institution of society. Even our Family Code provides that
Page 9 of 55
husband and wife must live together, observe mutual love, respect and fidelity. This is
rooted in the fact that both our Constitution and our laws cherish the validity of marriage
and unity of the family. Our laws, in implementing this constitutional edict on marriage
and the family underscore their permanence, inviolability and solidarity.47
The petitioners pregnancy out of
wedlock is not a disgraceful or
immoral conduct since she and the
father of her child have no
impediment to marry each other.
In stark contrast to Santos, the Court does not find any circumstance in this case which
would lead the Court to conclude that the petitioner committed a disgraceful or immoral
conduct. It bears stressing that the petitioner and her boyfriend, at the time they
conceived a child, had no legal impediment to marry. Indeed, even prior to her
dismissal, the petitioner married her boyfriend, the father of her child. As the Court held
in Radam, there is no law which penalizes an unmarried mother by reason of her sexual
conduct or proscribes the consensual sexual activity between two unmarried persons;
that neither does such situation contravene any fundamental state policy enshrined in
the Constitution.
Admittedly, the petitioner is employed in an educational institution where the teachings
and doctrines of the Catholic Church, including that on pre-marital sexual relations, is
strictly upheld and taught to the students. That her indiscretion, which resulted in her
pregnancy out of wedlock, is anathema to the doctrines of the Catholic Church.
However, viewed against the prevailing norms of conduct, the petitioners conduct
cannot be considered as disgraceful or immoral; such conduct is not denounced by
public and secular morality. It may be an unusual arrangement, but it certainly is not
disgraceful or immoral within the contemplation of the law.
To stress, pre-marital sexual relations between two consenting adults who have no
impediment to marry each other, and, consequently, conceiving a child out of wedlock,
gauged from a purely public and secular view of morality, does not amount to a
disgraceful or immoral conduct under Section 94(e) of the 1992 MRPS.
Accordingly, the labor tribunals erred in upholding the validity of the petitioners
dismissal. The labor tribunals arbitrarily relied solely on the circumstances surrounding
the petitioners pregnancy and its supposed effect on SSCW and its students without
evaluating whether the petitioners conduct is indeed considered disgraceful or immoral
in view of the prevailing norms of conduct. In this regard, the labor tribunals respective
haphazard evaluation of the evidence amounts to grave abuse of discretion, which the
Court will rectify.
The labor tribunals finding that the petitioners pregnancy out of wedlock despite the
absence of substantial evidence is not only arbitrary, but a grave abuse of discretion,
which should have been set right by the CA.
There is no substantial evidence to
prove that the petitioners pregnancy
out of wedlock caused grave scandal
to SSCW and its students.
SSCW claimed that the petitioner was primarily dismissed because her pregnancy out
of wedlock caused grave scandal to SSCW and its students. That the scandal brought
about by the petitioners indiscretion prompted them to dismiss her. The LA upheld the
respondents claim, stating that:
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In this particular case, an "objective" and "rational evaluation" of the facts and
circumstances obtaining in this case would lead us to focus our attention x x x on the
impact of the act committed by the complainant. The act of the complainant x x x eroded
the moral principles being taught and project[ed] by the respondent [C]atholic school to
their young lady students.48 (Emphasis in the original)
On the other hand, the NLRC opined that:
In the instant case, when the complainant-appellant was already conceiving a child
even before she got married, such is considered a shameful and scandalous behavior,
inimical to public welfare and policy. It eroded the moral doctrines which the respondent
Catholic school, an exclusive school for girls, is teaching the young girls. Thus, when
the respondent-appellee school terminated complainant-appellants services, it was a
valid exercise of its management prerogative. Whether or not she was a teacher is of no
moment. There is no separate set of rules for non-teaching personnel. Respondentsappellees uphold the teachings of the Catholic Church on pre-marital sex and that the
complainant-appellant as an employee of the school was expected to abide by this
basic principle and to live up with the standards of their purely Catholic values. Her
subsequent marriage did not take away the fact that she had engaged in pre-marital sex
which the respondent-appellee school denounces as the same is opposed to the
teachings and doctrines it espouses.49 (Emphasis ours)
Contrary to the labor tribunals declarations, the Court finds that SSCW failed to adduce
substantial evidence to prove that the petitioners indiscretion indeed caused grave
scandal to SSCW and its students. Other than the SSCWs bare allegation, the records
are bereft of any evidence that would convincingly prove that the petitioners conduct
indeed adversely affected SSCWs integrity in teaching the moral doctrines, which it
stands for. The petitioner is only a non-teaching personnel; her interaction with SSCWs
students is very limited. Itis thus quite impossible that her pregnancy out of wedlock
caused such a grave scandal, as claimed by SSCW, as to warranther dismissal.
Settled is the rule that in termination cases, the burden of proving that the dismissal of
the employees was for a valid and authorized cause rests on the employer. It is
incumbent upon the employer to show by substantial evidence that the termination of
the employment of the employees was validly made and failure to discharge that duty
would mean that the dismissal is not justified and therefore illegal.50 "Substantial
evidence is more than a mere scintilla of evidence. It means such relevant evidence as
a reasonable mind might accept as adequateto support a conclusion, even if other
minds equally reasonable mightconceivably opine otherwise."51
Indubitably, bare allegations do not amount to substantial evidence. Considering that
the respondents failed to adduce substantial evidence to prove their asserted cause for
the petitioners dismissal, the labor tribunals should not have upheld their allegations
hook, line and sinker. The labor tribunals respective findings, which were arrived at
sans any substantial evidence, amounts to a grave abuse of discretion, which the CA
should have rectified. "Security of tenure is a right which may not be denied on mere
speculation of any unclearand nebulous basis."52
The petitioners dismissal is not a
valid exercise of SSCWs
management prerogative.
The CA be labored the management prerogative of SSCW to discipline its employees.
The CA opined that the petitioners dismissal is a valid exercise of management
prerogative to impose penalties on erring employees pursuant to its policies, rules and
regulations.
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separation pay to the petitioner equivalent to one (1) month pay for every year of
service, with a fraction of at least six (6) months considered as one (1) whole year, from
the time of her illegal dismissal up to the finality of this judgment, as an alternative to
reinstatement.
Also, "employees who are illegally dismissed are entitled to full backwages, inclusive of
allowances and other benefits or their monetary equivalent, computed from the time
their actual compensation was withheld from them up to the time of their actual
reinstatement but if reinstatement is no longer possible, the backwages shall be
computed from the time of their illegal termination up to the finality of the decision."60
Accordingly, the petitioner is entitled to an award of full backwages from the time she
was illegally dismissed up to the finality of this decision.
Nevertheless, the petitioner is not entitled to moral and exemplary damages. "A
dismissed employee isentitled to moral damages when the dismissal is attended by bad
faith or fraud or constitutes an act oppressive to labor, or is done in a manner contrary
to good morals, good customs or public policy. Exemplary damages may be awarded if
the dismissal is effected in a wanton, oppressive or malevolent manner."61
"Bad faith, under the law, does not simply connote bad judgment or negligence.1wphi1
It imports a dishonest purpose or some moral obliquity and conscious doing of a wrong,
or a breach of a known duty through some motive or interest or ill will that partakes of
the nature of fraud."62
"It must be noted that the burden of proving bad faith rests on the one alleging it"63
since basic is the principle that good faith is presumed and he who alleges bad faith has
the duty to prove the same.64 "Allegations of bad faith and fraud must be proved by
clear and convincing evidence."65
The records of this case are bereft of any clear and convincing evidence showing that
the respondents acted in bad faith or in a wanton or fraudulent manner in dismissing the
petitioner. That the petitioner was illegally dismissed is insufficient to prove bad faith. A
dismissal may be contrary to law but by itself alone, it does not establish bad faith to
entitle the dismissed employee to moral damages. The award of moral and exemplary
damages cannot be justified solely upon the premise that the employer dismissed his
employee without cause.66
However, the petitioner is entitled to attorneys fees in the amount of 10% of the total
monetary award pursuant to Article 11167 of the Labor Code. "It is settled that where an
employee was forced to litigate and, thus, incur expenses to protect his rights and
interest, the award of attorneys fees is legally and morally justifiable."68
Finally, legal interest shall be imposed on the monetary awards herein granted at the
rate of six percent (6%) per annumfrom the finality of this judgment until fully paid.69
WHEREFORE, in consideration of the foregoing disquisitions, the petition is GRANTED.
The Decision dated September 24, 2008 and Resolution dated March 2, 2009 of the
Court of Appeals in CA-G.R. SP No. 100188 are hereby REVERSED and SET ASIDE.
The respondent, St. Scholasticas College Westgrove, is hereby declared guilty of illegal
dismissal and is hereby ORDERED to pay the petitioner, Cheryll Santos Leus, the
following: (a) separation pay in lieu of actual reinstatement equivalent to one (1) month
pay for every year of service, with a fraction of at least six (6) months considered as one
(1) whole year from the time of her dismissal up to the finality of this Decision; (b) full
backwages from the time of her illegal dismissal up to the finality of this Decision; and
(c) attorneys fees equivalent to ten percent (10%) of the total monetary award. The
monetary awards herein granted shall earn legal interest at the rate of six percent (6%)
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per annumfrom the date of the finality of this Decision untilfully paid. The case is
REMANDED to the Labor Arbiter for the computation of petitioners monetary awards.
SO ORDERED.
BIENVENIDO L. REYES
Associate Justice
WE CONCUR:
PRESBITERO J. VELASCO, JR.
Associate Justice
Chairperson
DIOSDADO M. PERALTA
Associate Justice MARTIN S. VILLARAMA, JR.
Associate Justice
FRANCIS H. JARDELEZA
Associate Justice
Page 14 of 55
SECOND DIVISION
G.R. No. 198587, January 14, 2015
SAUDI ARABIAN AIRLINES (SAUDIA) AND BRENDA J. BETIA, Petitioners, v. MA.
JOPETTE M. REBESENCIO, MONTASSAH B. SACAR-ADIONG, ROUEN RUTH A.
CRISTOBAL AND LORAINE S. SCHNEIDER-CRUZ, Respondents.
DECISION
LEONEN, J.:
All Filipinos are entitled to the protection of the rights guaranteed in the Constitution.
This is a Petition for Review on Certiorari with application for the issuance of a
temporary restraining order and/or writ of preliminary injunction under Rule 45 of the
1997 Rules of Civil Procedure praying that judgment be rendered reversing and setting
aside the June 16, 2011 Decision1 and September 13, 2011 Resolution2 of the Court of
Appeals in CA-G.R. SP. No. 113006.
Petitioner Saudi Arabian Airlines (Saudia) is a foreign corporation established and
existing under the laws of Jeddah, Kingdom of Saudi Arabia. It has a Philippine office
located at 4/F, Metro House Building, Sen. Gil J. Puyat Avenue, Makati City.3 In its
Petition filed with this court, Saudia identified itself as follows:chanroblesvirtuallawlibrary
1. Petitioner SAUDIA is a foreign corporation established and existing under the Royal
Decree No. M/24 of 18.07.1385H (10.02.1962G) in Jeddah, Kingdom of Saudi Arabia
("KSA"). Its Philippine Office is located at 4/F Metro House Building, Sen, Gil J. Puyat
Avenue, Makati City (Philippine Office). It may be served with orders of this Honorable
Court through undersigned counsel at 4th and 6th Floors, Citibank Center Bldg., 8741
Paseo de Roxas, Makati City.4 (Emphasis supplied)
Respondents (complainants before the Labor Arbiter) were recruited and hired by
Saudia as Temporary Flight Attendants with the accreditation and approval of the
Philippine Overseas Employment Administration.5 After undergoing seminars required
by the Philippine Overseas Employment Administration for deployment overseas, as
well as training modules offered by Saudia (e.g., initial flight attendant/training course
and transition training), and after working as Temporary Flight Attendants, respondents
became Permanent Flight Attendants. They then entered into Cabin Attendant contracts
with Saudia: Ma. Jopette M. Rebesencio (Ma. Jopette) on May 16, 1990;6 Montassah
B. Sacar-Adiong (Montassah) and Rouen Ruth A. Cristobal (Rouen Ruth) on May 22,
1993;7 and Loraine Schneider-Cruz (Loraine) on August 27, 1995.8
Respondents continued their employment with Saudia until they were separated from
service on various dates in 2006.9
Respondents contended that the termination of their employment was illegal. They
alleged that the termination was made solely because they were pregnant.10
As respondents alleged, they had informed Saudia of their respective pregnancies and
had gone through the necessary procedures to process their maternity leaves. Initially,
Saudia had given its approval but later on informed respondents that its management in
Jeddah, Saudi Arabia had disapproved their maternity leaves. In addition, it required
respondents to file their resignation letters.11
Respondents were told that if they did not resign, Saudia would terminate them all the
same. The threat of termination entailed the loss of benefits, such as separation pay
and ticket discount entitlements.12
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Specifically, Ma. Jopette received a call on October 16, 2006 from Saudia's Base
Manager, Abdulmalik Saddik (Abdulmalik).13 Montassah was informed personally by
Abdulmalik and a certain Faisal Hussein on October 20, 2006 after being required to
report to the office one (1) month into her maternity leave.14 Rouen Ruth was also
personally informed by Abdulmalik on October 17, 2006 after being required to report to
the office by her Group Supervisor.15 Loraine received a call on October 12, 2006 from
her Group Supervisor, Dakila Salvador.16
Saudia anchored its disapproval of respondents' maternity leaves and demand for their
resignation on its "Unified Employment Contract for Female Cabin Attendants" (Unified
Contract).17 Under the Unified Contract, the employment of a Flight Attendant who
becomes pregnant is rendered void. It provides:chanroblesvirtuallawlibrary
(H) Due to the essential nature of the Air Hostess functions to be physically fit on board
to provide various services required in normal or emergency cases on both
domestic/international flights beside her role in maintaining continuous safety and
security of passengers, and since she will not be able to maintain the required medical
fitness while at work in case of pregnancy, accordingly, if the Air Hostess becomes
pregnant at any time during the term of this contract, this shall render her employment
contract as void and she will be terminated due to lack of medical fitness.18 (Emphasis
supplied)
In their Comment on the present Petition,19 respondents emphasized that the Unified
Contract took effect on September 23, 2006 (the first day of Ramadan),20 well after
they had filed and had their maternity leaves approved. Ma. Jopette filed her maternity
leave application on September 5, 2006.21 Montassah filed her maternity leave
application on August 29, 2006, and its approval was already indicated in Saudia's
computer system by August 30, 2006.22 Rouen Ruth filed her maternity leave
application on September 13, 2006,23 and Loraine filed her maternity leave application
on August 22, 2006.24
Rather than comply and tender resignation letters, respondents filed separate appeal
letters that were all rejected.25
Despite these initial rejections, respondents each received calls on the morning of
November 6, 2006 from Saudia's office secretary informing them that their maternity
leaves had been approved. Saudia, however, was quick to renege on its approval. On
the evening of November 6, 2006, respondents again received calls informing them that
it had received notification from Jeddah, Saudi Arabia that their maternity leaves had
been disapproved.26
Faced with the dilemma of resigning or totally losing their benefits, respondents
executed handwritten resignation letters. In Montassah's and Rouen Ruth's cases, their
resignations were executed on Saudia's blank letterheads that Saudia had provided.
These letterheads already had the word "RESIGNATION" typed on the subject portions
of their headings when these were handed to respondents.27
On November 8, 2007, respondents filed a Complaint against Saudia and its officers for
illegal dismissal and for underpayment of salary, overtime pay, premium pay for holiday,
rest day, premium, service incentive leave pay, 13th month pay, separation pay, night
shift differentials, medical expense reimbursements, retirement benefits, illegal
deduction, lay-over expense and allowances, moral and exemplary damages, and
attorney's fees.28 The case was initially assigned to Labor Arbiter Hermino V. Suelo and
docketed as NLRC NCR Case No. 00-11-12342-07.
Saudia assailed the jurisdiction of the Labor Arbiter.29 It claimed that all the determining
points of contact referred to foreign law and insisted that the Complaint ought to be
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dismissed on the ground of forum non conveniens.30 It added that respondents had no
cause of action as they resigned voluntarily.31
On December 12, 2008, Executive Labor Arbiter Fatima Jambaro-Franco rendered the
Decision32 dismissing respondents' Complaint. The dispositive portion of this Decision
reads:chanroblesvirtuallawlibrary
WHEREFORE, premises' considered, judgment is hereby rendered DISMISSING the
instant complaint for lack of jurisdiction/merit.33cralawlawlibrary
On respondents' appeal, the National Labor Relations Commission's Sixth Division
reversed the ruling of Executive Labor Arbiter Jambaro-Franco. It explained that
"[considering that complainants-appellants are OFWs, the Labor Arbiters and the NLRC
has [sic] jurisdiction to hear and decide their complaint for illegal termination."34 On the
matter of forum non conveniens, it noted that there were no special circumstances that
warranted its abstention from exercising jurisdiction.35 On the issue of whether
respondents were validly dismissed, it held that there was nothing on record to support
Saudia's claim that respondents resigned voluntarily.
The dispositive portion of the November 19, 2009 National Labor Relations Commission
Decision36 reads:chanroblesvirtuallawlibrary
WHEREFORE, premises considered, judgment is hereby rendered finding the appeal
impressed with merit. The respondents-appellees are hereby directed to pay
complainants-appellants the aggregate amount of SR614,001.24 corresponding to their
backwages and separation pay plus ten (10%) percent thereof as attorney's fees. The
decision of the Labor Arbiter dated December 12, 2008 is hereby VACATED and SET
ASIDE. Attached is the computation prepared by this Commission and made an integral
part of this Decision.37cralawlawlibrary
In the Resolution dated February 11, 2010,38 the National Labor Relations Commission
denied petitioners' Motion for Reconsideration.
In the June 16, 2011 Decision,39 the Court of Appeals denied petitioners' Rule 65
Petition and modified the Decision of the National Labor Relations Commission with
respect to the award of separation pay and backwages.
The
dispositive
portion
of
the
Court
of
Appeals
Decision
reads:chanroblesvirtuallawlibrary
WHEREFORE, the instant petition is hereby DENIED. The Decision dated November
19, 2009 issued by public respondent, Sixth Division of the National Labor Relations
Commission - National Capital Region is MODIFIED only insofar as the computation of
the award of separation pay and backwages. For greater clarity, petitioners are ordered
to pay private respondents separation pay which shall be computed from private
respondents' first day of employment up to the finality of this decision, at the rate of one
month per year of service and backwages which shall be computed from the date the
private respondents were illegally terminated until finality of this decision. Consequently,
the ten percent (10%) attorney's fees shall be based on the total amount of the award.
The assailed Decision is affirmed in all other respects.
The labor arbiter is hereby DIRECTED to make a recomputation based on the
foregoing.40cralawlawlibrary
In the Resolution dated September 13, 2011,41 the Court of Appeals denied petitioners'
Motion for Reconsideration.
Hence, this Appeal was filed.
The issues for resolution are the following:
Page 17 of 55
First, whether the Labor Arbiter and the National Labor Relations Commission may
exercise jurisdiction over Saudi Arabian Airlines and apply Philippine law in adjudicating
the present dispute;
Second, whether respondents' voluntarily resigned or were illegally terminated; and
Lastly, whether Brenda J. Betia may be held personally liable along with Saudi Arabian
Airlines.chanRoblesvirtualLawlibrary
I
Summons were validly served on Saudia and jurisdiction over it validly acquired.
There is no doubt that the pleadings and summons were served on Saudia through its
counsel.42 Saudia, however, claims that the Labor Arbiter and the National Labor
Relations Commission had no jurisdiction over it because summons were never served
on it but on "Saudia Manila."43 Referring to itself as "Saudia Jeddah," it claims that
"Saudia Jeddah" and not "Saudia Manila" was the employer of respondents because:
First, "Saudia Manila" was never a party to the Cabin Attendant contracts entered into
by respondents;
Second, it was "Saudia Jeddah" that provided the funds to pay for respondents' salaries
and benefits; and
Lastly, it was with "Saudia Jeddah" that respondents filed their resignations.44
Saudia posits that respondents' Complaint was brought against the wrong party
because "Saudia Manila," upon which summons was served, was never the employer of
respondents.45
Saudia is vainly splitting hairs in its effort to absolve itself of liability. Other than its bare
allegation, there is no basis for concluding that "Saudia Jeddah" is distinct from "Saudia
Manila."
What is clear is Saudia's statement in its own Petition that what it has is a "Philippine
Office . . . located at 4/F Metro House Building, Sen. Gil J. Puyat Avenue, Makati
City."46 Even in the position paper that Saudia submitted to the Labor Arbiter,47 what
Saudia now refers to as "Saudia Jeddah" was then only referred to as "Saudia Head
Office at Jeddah, KSA,"48 while what Saudia now refers to as "Saudia Manila" was then
only referred to as "Saudia's office in Manila."49
By its own admission, Saudia, while a foreign corporation, has a Philippine office.
Section 3(d) of Republic Act No.. 7042, otherwise known as the Foreign Investments Act
of 1991, provides the following:chanroblesvirtuallawlibrary
The phrase "doing business" shall include . . . opening offices, whether called "liaison"
offices or branches; . . . and any other act or acts that imply a continuity of commercial
dealings or arrangements and contemplate to that extent the performance of acts or
works, or the exercise of some of the functions normally incident to, and in progressive
prosecution of commercial gain or of the purpose and object of the business
organization. (Emphasis supplied)
A plain application of Section 3(d) of the Foreign Investments Act leads to no other
conclusion than that Saudia is a foreign corporation doing business in the Philippines.
As such, Saudia may be sued in the Philippines and is subject to the jurisdiction of
Philippine tribunals.
Page 18 of 55
Moreover, since there is no real distinction between "Saudia Jeddah" and "Saudia
Manila" the latter being nothing more than Saudia's local office service of
summons to Saudia's office in Manila sufficed to vest jurisdiction over Saudia's person
in Philippine tribunals.chanRoblesvirtualLawlibrary
II
Saudia asserts that Philippine courts and/or tribunals are not in a position to make an
intelligent decision as to the law and the facts. This is because respondents' Cabin
Attendant contracts require the application of the laws of Saudi Arabia, rather than those
of the Philippines.50 It claims that the difficulty of ascertaining foreign law calls into
operation the principle of forum non conveniens, thereby rendering improper the
exercise of jurisdiction by Philippine tribunals.51
A choice of law governing the validity of contracts or the interpretation of its provisions
dees not necessarily imply forum non conveniens. Choice of law and forum non
conveniens are entirely different matters.
Choice of law provisions are an offshoot of the fundamental principle of autonomy of
contracts.
Article
1306
of
the
Civil
Code
firmly
ensconces
this:chanroblesvirtuallawlibrary
Article 1306. The contracting parties may establish such stipulations, clauses, terms
and conditions as they may deem convenient, provided they are not contrary to law,
morals, good customs, public order, or public policy.
In contrast, forum non conveniens is a device akin to the rule against forum shopping. It
is designed to frustrate illicit means for securing advantages and vexing litigants that
would otherwise be possible if the venue of litigation (or dispute resolution) were left
entirely to the whim of either party.
Contractual choice of law provisions factor into transnational litigation and dispute
resolution in one of or in a combination of four ways: (1) procedures for settling
disputes, e.g., arbitration; (2) forum, i.e., venue; (3) governing law; and (4) basis for
interpretation. Forum non conveniens relates to, but is not subsumed by, the second of
these.
Likewise, contractual choice of law is not determinative of jurisdiction. Stipulating on the
laws of a given jurisdiction as the governing law of a contract does not preclude the
exercise of jurisdiction by tribunals elsewhere. The reverse is equally true: The
assumption of jurisdiction by tribunals does not ipso facto mean that it cannot apply and
rule
on
the
basis
of
the
parties'
stipulation.
In
Hasegawa
v.
Kitamura:52ChanRoblesVirtualawlibrary
Analytically, jurisdiction and choice of law are two distinct concepts. Jurisdiction
considers whether it is fair to cause a defendant to travel to this state; choice of law
asks the further question whether the application of a substantive law V'hich will
determine the merits of the case is fair to both parties. The power to exercise jurisdiction
does not automatically give a state constitutional authority to apply forum law. While
jurisdiction and the choice of the lex fori will often, coincide, the "minimum contacts" for
one do not always provide the necessary "significant contacts" for the other. The
question of whether the law of a state can be applied to a transaction is different from
the question of whether the courts of that state have jurisdiction to enter a
judgment.53cralawlawlibrary
As various dealings, commercial or otherwise, are facilitated by the progressive ease of
communication and travel, persons from various jurisdictions find themselves
transacting with each other. Contracts involving foreign elements are, however, nothing
new. Conflict of laws situations precipitated by disputes and litigation anchored on these
contracts are not totally novel.
Page 19 of 55
Transnational transactions entail differing laws on the requirements Q for the validity of
the formalities and substantive provisions of contracts and their interpretation. These
transactions inevitably lend themselves to the possibility of various fora for litigation and
dispute resolution. As observed by an eminent expert on transnational
law:chanroblesvirtuallawlibrary
The more jurisdictions having an interest in, or merely even a point of contact with, a
transaction or relationship, the greater the number of potential fora for the resolution of
disputes arising out of or related to that transaction or relationship. In a world of
increased mobility, where business and personal transactions transcend national
boundaries, the jurisdiction of a number of different fora may easily be invoked in a
single or a set of related disputes.54cralawlawlibrary
Philippine law is definite as to what governs the formal or extrinsic validity of contracts.
The first paragraph of Article 17 of the Civil Code provides that "[t]he forms and
solemnities of contracts . . . shall be governed by the laws of the country in which they
are executed"55 (i.e., lex loci celebrationis).
In contrast, there is no statutorily established mode of settling conflict of laws situations
on matters pertaining to substantive content of contracts. It has been noted that three
(3) modes have emerged: (1) lex loci contractus or the law of the place of the making;
(2) lex loci solutionis or the law of the place of performance; and (3) lex loci intentionis
or the law intended by the parties.56
Given Saudia's assertions, of particular relevance to resolving the present dispute is lex
loci intentionis.
An author observed that Spanish jurists and commentators "favor lex loci intentionis."57
These jurists and commentators proceed from the Civil Code of Spain, which, like our
Civil Code, is silent on what governs the intrinsic validity of contracts, and the same civil
law traditions from which we draw ours.
In this jurisdiction, this court, in Philippine Export and Foreign Loan Guarantee v. V.P.
Eusebio Construction, Inc.,58 manifested preference for allowing the parties to select
the law applicable to their contract":chanroblesvirtuallawlibrary
No conflicts rule on essential validity of contracts is expressly provided for in our laws.
The rule followed by most legal systems, however, is that the intrinsic validity of a
contract must be governed by the lex contractus or "proper law of the contract." This is
the law voluntarily agreed upon by the parties (the lex loci voluntatis) or the law
intended by them either expressly or implicitly (the lex loci intentionis). The law selected
may be implied from such factors as substantial connection with the transaction, or the
nationality or domicile of the parties. Philippine courts would do well to adopt the first
and most basic rule in most legal systems, namely, to allow the parties to select the law
applicable to their contract, subject to the limitation that it is not against the law, morals,
or public policy of the forum and that the chosen law must bear a substantive
relationship to the transaction.59 (Emphasis in the original)
Saudia asserts that stipulations set in the Cabin Attendant contracts require the
application of the laws of Saudi Arabia. It insists that the need to comply with these
stipulations calls into operation the doctrine of forum non conveniens and, in turn,
makes it necessary for Philippine tribunals to refrain from exercising jurisdiction.
As mentioned, contractual choice of laws factors into transnational litigation in any or a
combination of four (4) ways. Moreover, forum non conveniens relates to one of these:
choosing between multiple possible fora.
Nevertheless, the possibility of parallel litigation in multiple fora along with the host of
difficulties it poses is not unique to transnational litigation. It is a difficulty that
similarly arises in disputes well within the bounds of a singe jurisdiction.
Page 20 of 55
When parallel litigation arises strictly within the context of a single jurisdiction, such
rules as those on forum shopping, litis pendentia, and res judicata come into operation.
Thus, in the Philippines, the 1997 Rules on Civil Procedure provide for willful and
deliberate forum shopping as a ground not only for summary dismissal with prejudice
but also for citing parties and counsels in direct contempt, as well as for the imposition
of administrative sanctions.60 Likewise, the same rules expressly provide that a party
may seek the dismissal of a Complaint or another pleading asserting a claim on the
ground "[t]hat there is another action pending between the same parties for the same
cause," i.e., litis pendentia, or "[t]hat the cause of action is barred by a prior
judgment,"61 i.e., res judicata.
Forum non conveniens, like the rules of forum shopping, litis pendentia, and res
judicata, is a means of addressing the problem of parallel litigation. While the rules of
forum shopping, litis pendentia, and res judicata are designed to address the problem of
parallel litigation within a single jurisdiction, forum non conveniens is a means devised
to address parallel litigation arising in multiple jurisdictions.
Forum non conveniens literally translates to "the forum is inconvenient."62 It is a
concept in private international law and was devised to combat the "less than
honorable" reasons and excuses that litigants use to secure procedural advantages,
annoy and harass defendants, avoid overcrowded dockets, and select a "friendlier"
venue.63 Thus, the doctrine of forum non conveniens addresses the same rationale that
the rule against forum shopping does, albeit on a multijurisdictional scale.
Forum non conveniens, like res judicata,64 is a concept originating in common law.65
However, unlike the rule on res judicata, as well as those on litis pendentia and forum
shopping, forum non conveniens finds no textual anchor, whether in statute or in
procedural rules, in our civil law system. Nevertheless, jurisprudence has applied forum
non conveniens as basis for a court to decline its exercise of jurisdiction.66
Forum non conveniens is soundly applied not only to address parallel litigation and
undermine a litigant's capacity to vex and secure undue advantages by engaging in
forum shopping on an international scale. It is also grounded on principles of comity and
judicial efficiency.
Consistent with the principle of comity, a tribunal's desistance in exercising jurisdiction
on account of forum non conveniens is a deferential gesture to the tribunals of another
sovereign. It is a measure that prevents the former's having to interfere in affairs which
are better and more competently addressed by the latter. Further, forum non conveniens
entails a recognition not only that tribunals elsewhere are better suited to rule on and
resolve a controversy, but also, that these tribunals are better positioned to enforce
judgments and, ultimately, to dispense justice. Forum non conveniens prevents the
embarrassment of an awkward situation where a tribunal is rendered incompetent in the
face of the greater capability both analytical and practical of a tribunal in another
jurisdiction.
The wisdom of avoiding conflicting and unenforceable judgments is as much a matter of
efficiency and economy as it is a matter of international courtesy. A court would
effectively be neutering itself if it insists on adjudicating a controversy when it knows full
well that it is in no position to enforce its judgment. Doing so is not only an exercise in
futility; it is an act of frivolity. It clogs the dockets of a.tribunal and leaves it to waste its
efforts on affairs, which, given transnational exigencies, will be reduced to mere
academic, if not trivial, exercises.
Accordingly, under the doctrine of forum non conveniens, "a court, in conflicts of law
cases, may refuse impositions on its jurisdiction where it is not the most 'convenient' or
available forum and the parties are not precluded from seeking remedies elsewhere."67
Page 21 of 55
In Puyat v. Zabarte,68 this court recognized the following situations as among those that
may warrant a court's desistance from exercising jurisdiction:chanroblesvirtuallawlibrary
1)
The belief that the matter can be better tried and decided elsewhere, either because the
main aspects of the case transpired in a foreign jurisdiction or the material witnesses
have their residence there;
2)
The belief that the non-resident plaintiff sought the forum[,] a practice known as forum
shopping[,] merely to secure procedural advantages or to convey or harass the
defendant;
3)
The unwillingness to extend local judicial facilities to non residents or aliens when the
docket may already be overcrowded;
4)
The inadequacy of the local judicial machinery for effectuating the right sought to be
maintained; and
5)
The difficulty of ascertaining foreign law.69
In Bank of America, NT&SA, Bank of America International, Ltd. v. Court of Appeals,70
this court underscored that a Philippine court may properly assume jurisdiction over a
case if it chooses to do so to the extent: "(1) that the Philippine Court is one to which the
parties may conveniently resort to; (2) that the Philippine Court is in a position to make
an intelligent decision as to the law and the facts; and (3) that the Philippine Court has
or is likely to have power to enforce its decision."71
The use of the word "may" (i.e., "may refuse impositions on its jurisdiction"72) in the
decisions shows that the matter of jurisdiction rests on the sound discretion of a court.
Neither the mere invocation of forum non conveniens nor the averment of foreign
elements operates to automatically divest a court of jurisdiction. Rather, a court should
renounce jurisdiction only "after 'vital facts are established, to determine whether special
circumstances' require the court's desistance."73 As the propriety of applying forum non
conveniens is contingent on a factual determination, it is, therefore, a matter of
defense.74
The second sentence of Rule 9, Section 1 of the 1997 Rules of Civil Procedure is
exclusive in its recital of the grounds for dismissal that are exempt from the omnibus
motion rule: (1) lack of jurisdiction over the subject matter; (2) litis pendentia; (3) res
judicata; and (4) prescription. Moreover, dismissal on account offorum non conveniens
is a fundamentally discretionary matter. It is, therefore, not a matter for a defendant to
foist upon the court at his or her own convenience; rather, it must be pleaded at the
earliest possible opportunity.
On the matter of pleading forum non conveniens, we state the rule, thus: Forum non
conveniens must not only be clearly pleaded as a ground for dismissal; it must be
pleaded as such at the earliest possible opportunity. Otherwise, it shall be deemed
waived.
This court notes that in Hasegawa,76 this court stated that forum non conveniens is not
a ground for a motion to dismiss. The factual ambience of this case however does not
squarely raise the viability of this doctrine. Until the opportunity comes to review the use
of motions to dismiss for parallel litigation, Hasegawa remains existing doctrine.
Consistent with forum non conveniens as fundamentally a factual matter, it is imperative
that it proceed from & factually established basis. It would be improper to dismiss an
action pursuant to forum non conveniens based merely on a perceived, likely, or
hypothetical multiplicity of fora. Thus, a defendant must also plead and show that a prior
suit has, in fact, been brought in another jurisdiction.
Page 22 of 55
The existence of a prior suit makes real the vexation engendered by duplicitous
litigation, the embarrassment of intruding into the affairs of another sovereign, and the
squandering of judicial efforts in resolving a dispute already lodged and better resolved
elsewhere. As has been noted:chanroblesvirtuallawlibrary
A case will not be stayed o dismissed on [forum] non conveniens grounds unless the
plaintiff is shown to have an available alternative forum elsewhere. On this, the moving
party bears the burden of proof.
A number of factors affect the assessment of an alternative forum's adequacy. The
statute of limitations abroad may have run, of the foreign court may lack either subject
matter or personal jurisdiction over the defendant. . . . Occasionally, doubts will be
raised as to the integrity or impartiality of the foreign court (based, for example, on
suspicions of corruption or bias in favor of local nationals), as to the fairness of its
judicial procedures, or as to is operational efficiency (due, for example, to lack of
resources, congestion and delay, or interfering circumstances such as a civil unrest). In
one noted case, [it was found] that delays of 'up to a quarter of a century' rendered the
foreign forum... inadequate for these purposes.77cralawlawlibrary
We deem it more appropriate and in the greater interest of prudence that a defendant
not only allege supposed dangerous tendencies in litigating in this jurisdiction; the
defendant must also show that such danger is real and present in that litigation or
dispute resolution has commenced in another jurisdiction and that a foreign tribunal has
chosen to exercise jurisdiction.
III
Forum non conveniens finds no application and does not operate to divest Philippine
tribunals of jurisdiction and to require the application of foreign law.
Saudia invokes forum non conveniens to supposedly effectuate the stipulations of the
Cabin Attendant contracts that require the application of the laws of Saudi Arabia.
Forum non conveniens relates to forum, not to the choice of governing law. Thai forum
non conveniens may ultimately result in the application of foreign law is merely an
incident of its application. In this strict sense, forum non conveniens is not applicable. It
is not the primarily pivotal consideration in this case.
In any case, even a further consideration of the applicability of forum non conveniens on
the incidental matter of the law governing respondents' relation with Saudia leads to the
conclusion that it is improper for Philippine tribunals to divest themselves of jurisdiction.
Any evaluation of the propriety of contracting parties' choice of a forum and'its incidents
must grapple with two (2) considerations: first, the availability and adequacy of recourse
to a foreign tribunal; and second, the question of where, as between the forum court
and a foreign court, the balance of interests inhering in a dispute weighs more heavily.
The first is a pragmatic matter. It relates to the viability of ceding jurisdiction to a foreign
tribunal and can be resolved by juxtaposing the competencies and practical
circumstances of the tribunals in alternative fora. Exigencies, like the statute of
limitations, capacity to enforce orders and judgments, access to records, requirements
for the acquisition of jurisdiction, and even questions relating to the integrity of foreign
courts, may render undesirable or even totally unfeasible recourse to a foreign court. As
mentioned, we consider it in the greater interest of prudence that a defendant show, in
pleading forum non conveniens, that litigation has commenced in another jurisdiction
and that a foieign tribunal has, in fact, chosen to exercise jurisdiction.
Page 23 of 55
Two (2) factors weigh into a court's appraisal of the balance of interests inhering in a
dispute: first, the vinculum which the parties and their relation have to a given
jurisdiction; and second, the public interest that must animate a tribunal, in its capacity
as an agent of the sovereign, in choosing to assume or decline jurisdiction. The first is
more concerned with the parties, their personal circumstances, and private interests;
the second concerns itself with the state and the greater social order.
In considering the vinculum, a court must look into the preponderance of linkages which
the parties and their transaction may have to either jurisdiction. In this respect, factors,
such as the parties' respective nationalities and places of negotiation, execution,
performance, engagement or deployment, come into play.
In considering public interest, a court proceeds with a consciousness that it is an organ
of the state. It must, thus, determine if the interests of the sovereign (which acts through
it) are outweighed by those of the alternative jurisdiction. In this respect, the court
delves into a consideration of public policy. Should it find that public interest weighs
more heavily in favor of its assumption of jurisdiction, it should proceed in adjudicating
the dispute, any doubt or .contrary view arising from the preponderance of linkages
notwithstanding.
Our law on contracts recognizes the validity of contractual choice of law provisions.
Where such provisions exist, Philippine tribunals, acting as the forum court, generally
defer to the parties' articulated choice.
This is consistent with the fundamental principle of autonomy of contracts. Article 1306
of the Civ:l Code expressly provides that "[t]he contracting parties may establish 'such
stipulations, clauses, terms and conditions as they may deem convenient."78
Nevertheless, while a Philippine tribunal (acting as the forum court) is called upon to
respect the parties' choice of governing law, such respect must not be so permissive as
to lose sight of considerations of law, morals, good customs, public order, or public
policy that underlie the contract central to the controversy.
Specifically with respect to public policy, in Pakistan International Airlines Corporation v.
Ople,79 this court explained that:chanroblesvirtuallawlibrary
counter-balancing the principle of autonomy of contracting parties is the equally general
rule that provisions of applicable law, especially provisions relating to matters affected
with public policy, are deemed written inta the contract. Put a little differently, the
governing principle is that parties may not contract away applicable provisions of law
especially peremptory provisions dealing with matters heavily impressed with public
interest.80 (Emphasis supplied)
Article II, Section 14 of the 1987 Constitution provides that "[t]he State ... shall ensure
the fundamental equality before the law of women and men." Contrasted with Article II,
Section 1 of the 1987 Constitution's statement that "[n]o person shall ... be denied the
equal protection of the laws," Article II, Section 14 exhorts the State to "ensure." This
does not only mean that the Philippines shall not countenance nor lend legal recognition
and approbation to measures that discriminate on the basis of one's being male or
female. It imposes an obligation to actively engage in securing the fundamental equality
of men and women.
The Convention on the Elimination of all Forms of Discrimination against Women
(CEDAW), signed and ratified by the Philippines on July 15, 1980, and on August 5,
1981, respectively,81 is part of the law of the land. In view of the widespread signing
and ratification of, as well as adherence (in practice) to it by states, it may even be said
that many provisions of the CEDAW may have become customary international law. The
CEDAW gives effect to the Constitution's policy statement in Article II, Section 14. Article
I of the CEDAW defines "discrimination against women" as:chanroblesvirtuallawlibrary
Page 24 of 55
any distinction, exclusion or restriction made on the basis of sex which has the effect or
purpose of impairing or nullifying the recognition, enjoyment or exercise by women,
irrespective of their marital status, on a basis of equality of men and women, of human
rights and fundamental freedoms in the political, economic, social, cultural, civil or any
other field.82cralawlawlibrary
The constitutional exhortation to ensure fundamental equality, as illumined by its
enabling law, the CEDAW, must inform and animate all the actions of all personalities
acting on behalf of the State. It is, therefore, the bounden duty of this court, in rendering
judgment on the disputes brought before it, to ensure that no discrimination is heaped
upon women on the mere basis of their being women. This is a point so basic and
central that all our discussions and pronouncements regardless of whatever
averments there may be of foreign law must proceed from this premise.
So informed and animated, we emphasize the glaringly discriminatory nature of
Saudia's policy. As argued by respondents, Saudia's policy entails the termination of
employment of flight attendants who become pregnant. At the risk of stating the
obvious, pregnancy is an occurrence that pertains specifically to women. Saudia's policy
excludes from and restricts employment on the basis of no other consideration but sex.
We do not lose sight of the reality that pregnancy does present physical limitations that
may render difficult the performance of functions associated with being a flight
attendant. Nevertheless, it would be the height of iniquity to view pregnancy as a
disability so permanent and immutable that, it must entail the termination of one's
employment. It is clear to us that any individual, regardless of gender, may be subject to
exigencies that limit the performance of functions. However, we fail to appreciate how
pregnancy could be such an impairing occurrence that it leaves no other recourse but
the complete termination of the means through which a woman earns a living.
Apart from the constitutional policy on the fundamental equality before the law of men
and women, it is settled that contracts relating to labor and employment are impressed
with public interest. Article 1700 of the Civil Code provides that "[t]he relation between
capital and labor are not merely contractual. They are so impressed with public interest
that labor contracts must yield to the common good."
Consistent with this, this court's pronouncements in Pakistan International Airlines
Corporation83 are clear and unmistakable:chanroblesvirtuallawlibrary
Petitioner PIA cannot take refuge in paragraph 10 of its employment agreement which
specifies, firstly, the law of Pakistan as the applicable law of the agreement, and,
secondly, lays the venue for settlement of any dispute arising out of or in connection
with the agreement "only [in] courts of Karachi, Pakistan". The first clause of paragraph
10 cannot be invoked to prevent the application of Philippine labor laws and'regulations
to the subject matter of this case, i.e., the employer-employee relationship between
petitioner PIA and private respondents. We have already pointed out that the
relationship is much affected with public interest and that the otherwise applicable
Philippine laws and regulations cannot be rendered illusory by the parties agreeing
upon some other law to govern their relationship. . . . Under these circumstances,
paragraph 10 of the employment agreement cannot be given effect so as to oust
Philippine agencies and courts of the jurisdiction vested upon them by Philippine law.84
(Emphasis supplied)
As the present dispute relates to (what the respondents allege to be) the illegal
termination of respondents' employment, this case is immutably a matter of public
interest and public policy. Consistent with clear pronouncements in law and
jurisprudence, Philippine laws properly find application in and govern this case.
'Moreover, as this premise for Saudia's insistence on the application forum non
conveniens has been shattered, it follows that Philippine tribunals may properly assume
jurisdiction over the present controversy. Philippine jurisprudence provides ample
Page 25 of 55
Here, the circumstances of the parties and their relation do not approximate the
circumstances enumerated in Puyat,92 which this court recognized as possibly
justifying the desistance of Philippine tribunals from exercising jurisdiction.
First, there is no basis for concluding that the case can be more conveniently tried
elsewhere. As established earlier, Saudia is doing business in the Philippines. For their
part, all four (4) respondents are Filipino citizens maintaining residence in the
Philippines and, apart from their previous employment with Saudia, have no other
connection to the Kingdom of Saudi Arabia. It would even be to respondents'
inconvenience if this case were to be tried elsewhere.
Second, the records are bereft of any indication that respondents filed their Complaint in
an effort to engage in forum shopping or to vex and inconvenience Saudia.
Third, there is no indication of "unwillingness to extend local judicial facilities to nonresidents or aliens."93 That Saudia has managed to bring the present controversy all
the way to this court proves this.
Fourth, it cannot be said that the local judicial machinery is inadequate for effectuating
the right sought to be maintained. Summons was properly served on Saudia and
jurisdiction over its person was validly acquired.
Lastly, there is not even room for considering foreign law. Philippine law properly
governs the present dispute.
As the question of applicable law has been settled, the supposed difficulty of
ascertaining foreign law (which requires the application of forum non conveniens)
provides no insurmountable inconvenience or special circumstance that will justify
depriving Philippine tribunals of jurisdiction.
Even if we were to assume, for the sake of discussion, that it is the laws of Saudi Arabia
which should apply, it does not follow that Philippine tribunals should refrain from
exercising jurisdiction. To. recall our pronouncements in Puyat,94 as well as in Bank of
America, NT&SA,95 it is not so much the mere applicability of foreign law which calls
into operation forum non conveniens. Rather, what justifies a court's desistance from
exercising jurisdiction is "[t]he difficulty of ascertaining foreign law"96 or the inability of a
"Philippine Court to make an intelligent decision as to the law[.]"97
Consistent with lex loci intentionis, to the extent that it is proper and practicable (i.e., "to
make an intelligent decision"98), Philippine tribunals may apply the foreign law selected
by the parties. In fact, (albeit without meaning to make a pronouncement on the
accuracy and reliability of respondents' citation) in this case, respondents themselves
have made averments as to the laws of Saudi Arabia. In their Comment, respondents
write:chanroblesvirtuallawlibrary
Under the Labor Laws of Saudi Arabia and the Philippines[,] it is illegal and unlawful to
terminate the employment of any woman by virtue of pregnancy. The law in Saudi
Arabia is even more harsh and strict [sic] in that no employer can terminate the
employment of a female worker or give her a warning of the same while on Maternity
Leave, the specific provision of Saudi Labor Laws on the matter is hereto quoted as
follows:chanroblesvirtuallawlibrary
"An employer may not terminate the employment of a female worker or give her a
warning of the same while on maternity leave." (Article 155, Labor Law of the Kingdom
of Saudi Arabia, Royal Decree No. M/51.)99cralawlawlibrary
All told, the considerations for assumption of jurisdiction by Philippine tribunals as
outlined in Bank of America, NT&SA100 have been satisfied. First, all the parties are
based in the Philippines and all the material incidents transpired in this jurisdiction.
Thus, the parties may conveniently seek relief from Philippine tribunals. Second,
Page 27 of 55
Philippine tribunals are in a position to make an intelligent decision as to the law and the
facts. Third, Philippine tribunals are in a position to enforce their decisions. There is no
compelling basis for ceding jurisdiction to a foreign tribunal. Quite the contrary, the
immense public policy considerations attendant to this case behoove Philippine
tribunals to not shy away from their duty to rule on the case.chanRoblesvirtualLawlibrary
IV
Respondents were illegally terminated.
In Bilbao v. Saudi Arabian Airlines,101 this court defined voluntary resignation as "the
voluntary act of an employee who is in a situation where one believes that personal
reasons cannot be sacrificed in favor of the exigency of the service, and one has no
other choice but to dissociate oneself from employment. It is a formal pronouncement or
relinquishment of an office, with the intention of relinquishing the office accompanied by
the act of relinquishment."102 Thus, essential to the act of resignation is voluntariness.
It must be the result of an employee's exercise of his or her own will.
In the same case of Bilbao, this court advanced a means for determining whether an
employee resigned voluntarily:chanroblesvirtuallawlibrary
As the intent to relinquish must concur with the overt act of relinquishment, the acts of
the employee before and after the alleged resignation must be considered in
determining whether he or she, in fact, intended, to sever his or her employment.103
(Emphasis supplied)
On the other hand, constructive dismissal has been defined as "cessation of work
because 'continued employment is rendered impossible, unreasonable or unlikely, as an
offer involving a demotion in rank or a diminution in pay' and other benefits."104
In Penaflor v. Outdoor Clothing Manufacturing Corporation,105 constructive dismissal
has been described as tantamount to "involuntarily [sic] resignation due to the harsh,
hostile, and unfavorable conditions set by the employer."106 In the same case, it was
noted that "[t]he gauge for constructive dismissal is whether a reasonable person in the
employee's position would feel compelled to give up his employment under the
prevailing circumstances."107
Applying the cited standards on resignation and constructive dismissal, it is clear that
respondents were constructively dismissed. Hence, their termination was illegal.
The termination of respondents' employment happened when they were pregnant and
expecting to incur costs on account of child delivery and infant rearing. As noted by the
Court of Appeals, pregnancy is a time when they need employment to sustain their
families.108 Indeed, it goes against normal and reasonable human behavior to abandon
one's livelihood in a time of great financial need.
It is clear that respondents intended to remain employed with Saudia. All they did was
avail of their maternity leaves. Evidently, the very nature of a maternity leave means that
a pregnant employee will not report for work only temporarily and that she will resume
the performance of her duties as soon as the leave allowance expires.
It is also clear that respondents exerted all efforts to' remain employed with Saudia.
Each of them repeatedly filed appeal letters (as much as five [5] letters in the case of
Rebesencio109) asking Saudia to reconsider the ultimatum that they resign or be
terminated along with the forfeiture of their benefits. Some of them even went to
Saudia's office to personally seek reconsideration.110
Respondents also adduced a copy of the "Unified Employment Contract for Female
Cabin Attendants."111 This contract deemed void the employment of a flight attendant
Page 28 of 55
who becomes pregnant and threatened termination due to lack of medical fitness.112
The threat of termination (and the forfeiture of benefits that it entailed) is enough to
compel a reasonable person in respondents' position to give up his or her employment.
Saudia draws attention to how respondents' resignation letters were supposedly made
in their own handwriting. This minutia fails to surmount all the other indications negating
any voluntariness on respondents' part. If at all, these same resignation letters are proof
of how any supposed resignation did not arise from respondents' own initiative. As
earlier pointed out, respondents' resignations were executed on Saudia's blank
letterheads that Saudia had provided. These letterheads already had the word
"RESIGNATION" typed on the subject portion of their respective headings when these
were handed to respondents.113ChanRoblesVirtualawlibrary
"In termination cases, the burden of proving just or valid cause for dismissing an
employee rests on the employer."114 In this case, Saudia makes much of how
respondents supposedly completed their exit interviews, executed quitclaims, received
their separation pay, and took more than a year to file their Complaint.115 If at all,
however, these circumstances prove only the fact of their occurrence, nothing more.
The voluntariness of respondents' departure from Saudia is non sequitur.
Mere compliance with standard procedures or processes, such as the completion of
their exit interviews, neither negates compulsion nor indicates voluntariness.
As with respondent's resignation letters, their exit interview forms even support their
claim of illegal dismissal and militates against Saudia's arguments. These exit interview
forms, as reproduced by Saudia in its own Petition, confirms the unfavorable conditions
as regards respondents' maternity leaves. Ma. Jopette's and Loraine's exit interview
forms are particularly telling:chanroblesvirtuallawlibrary
a. From Ma. Jopette's exit interview form:
3. In what respects has the job met or failed to meet your expectations?
THE SUDDEN TWIST OF DECISION REGARDING THE MATERNITY LEAVE.116
b. From Loraine's exit interview form:
1. What are your main reasons for leaving Saudia? What company are you joining?
xxx xxx xxx
Others
CHANGING POLICIES REGARDING MATERNITY LEAVE (PREGNANCY)117
As to respondents' quitclaims, in Phil. Employ Services and Resources, Inc. v.
Paramio,118 this court noted that "[i]f (a) there is clear proof that the waiver was
wangled from an unsuspecting or gullible person; or (b) the terms of the settlement are
unconscionable, and on their face invalid, such quitclaims must be struck down as
invalid or illegal."119 Respondents executed their quitclaims after having been unfairly
given an ultimatum to resign or be terminated (and forfeit their
benefits).chanRoblesvirtualLawlibrary
V
Having been illegally and unjustly dismissed, respondents are entitled to full backwages
and benefits from the time of their termination until the finality of this Decision. They are
likewise entitled to separation pay in the amount of one (1) month's salary for every year
Page 29 of 55
of service until the fmality of this Decision, with a fraction of a year of at least six (6)
months being counted as one (1) whole year.
Moreover, "[m]oral damages are awarded in termination cases where the employee's
dismissal was attended by bad faith, malice or fraud, or where it constitutes an act
oppressive to labor, or where it was done in a manner contrary to morals, good customs
or public policy."120 In this case, Saudia terminated respondents' employment in a
manner that is patently discriminatory and running afoul of the public interest that
underlies employer-employee relationships. As such, respondents are entitled to moral
damages.
To provide an "example or correction for the public good"121 as against such
discriminatory and callous schemes, respondents are likewise entitled to exemplary
damages.
In a long line of cases, this court awarded exemplary damages to illegally dismissed
employees whose "dismissal[s were] effected in a wanton, oppressive or malevolent
manner."122 This court has awarded exemplary damages to employees who were
terminated on such frivolous, arbitrary, and unjust grounds as membership in or
involvement with labor unions,123 injuries sustained in the course of employment,124
development of a medical condition due to the employer's own violation of the
employment contract,125 and lodging of a Complaint against the employer.126
Exemplary damages were also awarded to employees who were deemed illegally
dismissed by an employer in an attempt to evade compliance with statutorily
established employee benefits.127 Likewise, employees dismissed for supposedly just
causes, but in violation of due process requirements, were awarded exemplary
damages.128
These examples pale in comparison to the present controversy. Stripped of all
unnecessary complexities, respondents were dismissed for no other reason than simply
that they were pregnant. This is as wanton, oppressive, and tainted with bad faith as
any reason for termination of employment can be. This is no ordinary case of illegal
dismissal. This is a case of manifest gender discrimination. It is an affront not only to our
statutes and policies on employees' security of tenure, but more so, to the Constitution's
dictum of fundamental equality between men and women.129
The award of exemplary damages is, therefore, warranted, not only to remind
employers of the need to adhere to the requirements of procedural and substantive due
process in termination of employment, but more importantly, to demonstrate that gender
discrimination should in no case be countenanced.
Having been compelled to litigate to seek reliefs for their illegal and unjust dismissal,
respondents are likewise entitled to attorney's fees in the amount of 10% of the total
monetary award.130
VI
Petitioner Brenda J. Betia may not be held liable.
A corporation has a personality separate and distinct from those of the persons
composing it. Thus, as a rule, corporate directors and officers are not liable for the
illegal termination of a corporation's employees. It is only when they acted in bad faith or
with malice that they become solidarity liable with the corporation.131
In Ever Electrical Manufacturing, Inc. (EEMI) v. Samahang Manggagawa ng Ever
Electrical,132 this court clarified that "[b]ad faith does not connote bad judgment or
negligence; it imports a dishonest purpose or some moral obliquity and conscious doing
Page 30 of 55
of wrong; it means breach of a known duty through some motive or interest or ill will; it
partakes of the nature of fraud."133
Respondents have not produced proof to show that Brenda J. Betia acted in bad faith or
with malice as regards their termination. Thus, she may not be held solidarity liable with
Saudia.cralawred
WHEREFORE, with the MODIFICATIONS that first, petitioner Brenda J. Betia is not
solidarity liable with petitioner Saudi Arabian Airlines, and second, that petitioner Saudi
Arabian Airlines is liable for moral and exemplary damages. The June 16, 2011 Decision
and the September 13, 2011 Resolution of the Court of Appeals in CA-G.R. SP. No.
113006 are hereby AFFIRMED in all other respects. Accordingly, petitioner Saudi
Arabian Airlines is ordered to pay respondents:
(1)
Full backwages and all other benefits computed from the respective dates in which each
of the respondents were illegally terminated until the finality of this Decision;
(2)
Separation pay computed from the respective dates in which each of the respondents
commenced employment until the finality of this Decision at the rate of one (1) month's
salary for every year of service, with a fraction of a year of at least six (6) months being
counted as one (1) whole year;
(3)
Moral damages in the amount of P100,000.00 per respondent;
(4)
Exemplary damages in the amount of P200,000.00 per respondent; and
(5)
Attorney's fees equivalent to 10% of the total award.
Interest of 6% per annum shall likewise be imposed on the total judgment award from
the finality of this Decision until full satisfaction thereof.
This case is REMANDED to the Labor Arbiter to make a detailed computation of the
amounts due to respondents which petitioner Saudi Arabian Airlines should pay without
delay.
SO ORDERED.chanroblesvirtuallawlibrary
Carpio, (Chairperson), Velasco, Jr.,*Del Castillo, and Mendoza, JJ., concur.
a. his 13th month pay from the date of his hiring to the date of his dismissal, presently
computed at P78,117.87;
b. his service incentive leave pay for all the years he had been in service with the
respondent, presently computed at P13,788.05.
All other claims of both complainant and respondent are hereby dismissed for lack of
merit.[5]
Not satisfied with the decision of the Labor Arbiter, petitioner appealed the decision to
the NLRC which rendered its decision on 28 September 2001, the decretal portion of
which reads:
[T]he Rules and Regulations Implementing Presidential Decree No. 851, particularly
Sec. 3 provides:
Section 3. Employers covered. The Decree shall apply to all employers except to:
xxx xxx xxx
e) employers of those who are paid on purely commission, boundary, or task basis,
performing a specific work, irrespective of the time consumed in the performance
thereof. xxx.
Records show that complainant, in his position paper, admitted that he was paid on a
commission basis.
In view of the foregoing, we deem it just and equitable to modify the assailed Decision
by deleting the award of 13th month pay to the complainant.
WHEREFORE, the Decision dated 29 September 2000 is MODIFIED by deleting the
award of 13th month pay. The other findings are AFFIRMED.[6]
In other words, the award of service incentive leave pay was maintained. Petitioner thus
sought a reconsideration of this aspect, which was subsequently denied in a Resolution
by the NLRC dated 31 October 2001.
Displeased with only the partial grant of its appeal to the NLRC, petitioner sought the
review of said decision with the Court of Appeals which was subsequently denied by the
appellate court in a Decision dated 06 May 2002, the dispositive portion of which reads:
WHEREFORE, premises considered, the Petition is DISMISSED for lack of merit; and
the assailed Decision of respondent Commission in NLRC NCR CA No. 026584-2000 is
hereby AFFIRMED in toto. No costs.[7]
Hence, the instant petition.
ISSUES
1. Whether or not respondent is entitled to service incentive leave;
2. Whether or not the three (3)-year prescriptive period provided under Article 291 of the
Labor Code, as amended, is applicable to respondents claim of service incentive leave
pay.
RULING OF THE COURT
Page 33 of 55
The disposition of the first issue revolves around the proper interpretation of Article 95 of
the Labor Code vis--vis Section 1(D), Rule V, Book III of the Implementing Rules and
Regulations of the Labor Code which 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 leave of five days with pay.
Book III, Rule V: SERVICE INCENTIVE LEAVE
SECTION 1. Coverage. This rule shall apply to all employees except:
(d) Field personnel and other employees whose performance is unsupervised by the
employer including those who are engaged on task or contract basis, purely
commission basis, or those who are paid in a fixed amount for performing work
irrespective of the time consumed in the performance thereof; . . .
A careful perusal of said provisions of law will result in the conclusion that the grant of
service incentive leave has been delimited by the Implementing Rules and Regulations
of the Labor Code to apply only to those employees not explicitly excluded by Section 1
of Rule V. According to the Implementing Rules, Service Incentive Leave shall not apply
to employees classified as field personnel. The phrase other employees whose
performance is unsupervised by the employer must not be understood as a separate
classification of employees to which service incentive leave shall not be granted.
Rather, it serves as an amplification of the interpretation of the definition of field
personnel under the Labor Code as those whose actual hours of work in the field cannot
be determined with reasonable certainty.[8]
The same is true with respect to the phrase those who are engaged on task or contract
basis, purely commission basis. Said phrase should be related with field personnel,
applying the rule on ejusdem generis that general and unlimited terms are restrained
and limited by the particular terms that they follow.[9] Hence, employees engaged on
task or contract basis or paid on purely commission basis are not automatically
exempted from the grant of service incentive leave, unless, they fall under the
classification of field personnel.
Therefore, petitioners contention that respondent is not entitled to the grant of service
incentive leave just because he was paid on purely commission basis is misplaced.
What must be ascertained in order to resolve the issue of propriety of the grant of
service incentive leave to respondent is whether or not he is a field personnel.
According to Article 82 of the Labor Code, field personnel shall refer to non-agricultural
employees who regularly perform their duties away from the principal place of business
or branch office of the employer and whose actual hours of work in the field cannot be
determined with reasonable certainty. This definition is further elaborated in the Bureau
of Working Conditions (BWC), Advisory Opinion to Philippine Technical-Clerical
Commercial Employees Association[10] which states that:
As a general rule, [field personnel] are those whose performance of their job/service is
not supervised by the employer or his representative, the workplace being away from
the principal office and whose hours and days of work cannot be determined with
reasonable certainty; hence, they are paid specific amount for rendering specific service
or performing specific work. If required to be at specific places at specific times,
employees including drivers cannot be said to be field personnel despite the fact that
they are performing work away from the principal office of the employee. [Emphasis
ours]
Page 34 of 55
To this discussion by the BWC, the petitioner differs and postulates that under said
advisory opinion, no employee would ever be considered a field personnel because
every employer, in one way or another, exercises control over his employees. Petitioner
further argues that the only criterion that should be considered is the nature of work of
the employee in that, if the employees job requires that he works away from the
principal office like that of a messenger or a bus driver, then he is inevitably a field
personnel.
We are not persuaded. At this point, it is necessary to stress that the definition of a field
personnel is not merely concerned with the location where the employee regularly
performs his duties but also with the fact that the employees performance is
unsupervised by the employer. As discussed above, field personnel are those who
regularly perform their duties away from the principal place of business of the employer
and whose actual hours of work in the field cannot be determined with reasonable
certainty. Thus, in order to conclude whether an employee is a field employee, it is also
necessary to ascertain if actual hours of work in the field can be determined with
reasonable certainty by the employer. In so doing, an inquiry must be made as to
whether or not the employees time and performance are constantly supervised by the
employer.
As observed by the Labor Arbiter and concurred in by the Court of Appeals:
It is of judicial notice that along the routes that are plied by these bus companies, there
are its inspectors assigned at strategic places who board the bus and inspect the
passengers, the punched tickets, and the conductors reports. There is also the
mandatory once-a-week car barn or shop day, where the bus is regularly checked as to
its mechanical, electrical, and hydraulic aspects, whether or not there are problems
thereon as reported by the driver and/or conductor. They too, must be at specific place
as [sic] specified time, as they generally observe prompt departure and arrival from their
point of origin to their point of destination. In each and every depot, there is always the
Dispatcher whose function is precisely to see to it that the bus and its crew leave the
premises at specific times and arrive at the estimated proper time. These, are present in
the case at bar. The driver, the complainant herein, was therefore under constant
supervision while in the performance of this work. He cannot be considered a field
personnel.[11]
We agree in the above disquisition. Therefore, as correctly concluded by the appellate
court, respondent is not a field personnel but a regular employee who performs tasks
usually necessary and desirable to the usual trade of petitioners business. Accordingly,
respondent is entitled to the grant of service incentive leave.
The question now that must be addressed is up to what amount of service incentive
leave pay respondent is entitled to.
The response to this query inevitably leads us to the correlative issue of whether or not
the three (3)-year prescriptive period under Article 291 of the Labor Code is applicable
to respondents claim of service incentive leave pay.
Article 291 of the Labor Code states that all money claims arising from employeremployee relationship shall be filed within three (3) years from the time the cause of
action accrued; otherwise, they shall be forever barred.
In the application of this section of the Labor Code, the pivotal question to be answered
is when does the cause of action for money claims accrue in order to determine the
reckoning date of the three-year prescriptive period.
Page 35 of 55
It is settled jurisprudence that a cause of action has three elements, to wit, (1) a right in
favor of the plaintiff by whatever means and under whatever law it arises or is created;
(2) an obligation on the part of the named defendant to respect or not to violate such
right; and (3) an act or omission on the part of such defendant violative of the right of
the plaintiff or constituting a breach of the obligation of the defendant to the plaintiff.[12]
To properly construe Article 291 of the Labor Code, it is essential to ascertain the time
when the third element of a cause of action transpired. Stated differently, in the
computation of the three-year prescriptive period, a determination must be made as to
the period when the act constituting a violation of the workers right to the benefits being
claimed was committed. For if the cause of action accrued more than three (3) years
before the filing of the money claim, said cause of action has already prescribed in
accordance with Article 291.[13]
Consequently, in cases of nonpayment of allowances and other monetary benefits, if it
is established that the benefits being claimed have been withheld from the employee for
a period longer than three (3) years, the amount pertaining to the period beyond the
three-year prescriptive period is therefore barred by prescription. The amount that can
only be demanded by the aggrieved employee shall be limited to the amount of the
benefits withheld within three (3) years before the filing of the complaint.[14]
It is essential at this point, however, to recognize that the service incentive leave is a
curious animal in relation to other benefits granted by the law to every employee. In the
case of service incentive leave, the employee may choose to either use his leave
credits or commute it to its monetary equivalent if not exhausted at the end of the year.
[15] Furthermore, if the employee entitled to service incentive leave does not use or
commute the same, he is entitled upon his resignation or separation from work to the
commutation of his accrued service incentive leave. As enunciated by the Court in
Fernandez v. NLRC:[16]
The clear policy of the Labor Code is to grant service incentive leave pay to workers in
all establishments, subject to a few exceptions. Section 2, Rule V, Book III of the
Implementing Rules and Regulations provides that [e]very employee who has rendered
at least one year of service shall be entitled to a yearly service incentive leave of five
days with pay. Service incentive leave is a right which accrues to every employee who
has served within 12 months, whether continuous or broken reckoned from the date the
employee started working, including authorized absences and paid regular holidays
unless the working days in the establishment as a matter of practice or policy, or that
provided in the employment contracts, is less than 12 months, in which case said period
shall be considered as one year. It is also commutable to its money equivalent if not
used or exhausted at the end of the year. In other words, an employee who has served
for one year is entitled to it. He may use it as leave days or he may collect its monetary
value. To limit the award to three years, as the solicitor general recommends, is to
unduly restrict such right.[17] [Italics supplied]
Correspondingly, it can be conscientiously deduced that the cause of action of an
entitled employee to claim his service incentive leave pay accrues from the moment the
employer refuses to remunerate its monetary equivalent if the employee did not make
use of said leave credits but instead chose to avail of its commutation. Accordingly, if
the employee wishes to accumulate his leave credits and opts for its commutation upon
his resignation or separation from employment, his cause of action to claim the whole
amount of his accumulated service incentive leave shall arise when the employer fails to
pay such amount at the time of his resignation or separation from employment.
Applying Article 291 of the Labor Code in light of this peculiarity of the service incentive
leave, we can conclude that the three (3)-year prescriptive period commences, not at
the end of the year when the employee becomes entitled to the commutation of his
Page 36 of 55
service incentive leave, but from the time when the employer refuses to pay its
monetary equivalent after demand of commutation or upon termination of the
employees services, as the case may be.
The above construal of Art. 291, vis--vis the rules on service incentive leave, is in
keeping with the rudimentary principle that in the implementation and interpretation of
the provisions of the Labor Code and its implementing regulations, the workingmans
welfare should be the primordial and paramount consideration.[18] The policy is to
extend the applicability of the decree to a greater number of employees who can avail of
the benefits under the law, which is in consonance with the avowed policy of the State
to give maximum aid and protection to labor.[19]
In the case at bar, respondent had not made use of his service incentive leave nor
demanded for its commutation until his employment was terminated by petitioner.
Neither did petitioner compensate his accumulated service incentive leave pay at the
time of his dismissal. It was only upon his filing of a complaint for illegal dismissal, one
month from the time of his dismissal, that respondent demanded from his former
employer commutation of his accumulated leave credits. His cause of action to claim
the payment of his accumulated service incentive leave thus accrued from the time
when his employer dismissed him and failed to pay his accumulated leave credits.
Therefore, the prescriptive period with respect to his claim for service incentive leave
pay only commenced from the time the employer failed to compensate his accumulated
service incentive leave pay at the time of his dismissal. Since respondent had filed his
money claim after only one month from the time of his dismissal, necessarily, his money
claim was filed within the prescriptive period provided for by Article 291 of the Labor
Code.
WHEREFORE, premises considered, the instant petition is hereby DENIED. The
assailed Decision of the Court of Appeals in CA-G.R. SP. No. 68395 is hereby
AFFIRMED. No Costs.
SO ORDERED.
Puno, (Chairman), Austria-Martinez, Callejo, Sr., and Tinga, JJ., concur.
SECOND DIVISION
respondent CDC, the position of head executive assistant the position held by petitioner
was declared redundant. Petitioner received a copy of the Order on the same day and
immediately went to see Colayco. The latter informed him that the Order had been
issued as part of the reorganization scheme approved by the board of directors. Thus,
petitioners employment was to be terminated thirty (30) days from notice of the Order.
On 17 September 1999, petitioner filed a Complaint for illegal dismissal with a claim for
reinstatement and payment of back wages, benefits, and moral and exemplary
damages against respondent CDC and Colayco. The Complaint was filed with the
National Labor Relations Commission-Regional Arbitration Branch (NLRC-RAB) III in
San Fernando, Pampanga. In defense, respondents, represented by the Office of the
Government Corporate Counsel (OGCC), alleged that the NLRC had no jurisdiction to
entertain the case on the ground that petitioner was a corporate officer and, thus, his
dismissal was an intra-corporate matter falling properly within the jurisdiction of the
Securities and Exchange Commission (SEC).
On 29 February 2000, labor arbiter (LA) Florentino R. Darlucio issued a Decision[3] in
favor of petitioner Salenga. First, the LA held that the NLRC had jurisdiction over the
Complaint, considering that petitioner was not a corporate officer but a managerial
employee. He held the position of head executive assistant, categorized as a Job Level
12 position, not subject to election or appointment by the board of directors.
Second, the LA pointed out that respondent CDC and Colayco failed to establish a valid
cause for the termination of petitioners employment. The evidence presented by
respondent CDC failed to show that the position of petitioner was superfluous as to be
classified redundant. The LA further pointed out that respondent corporation had not
disputed the argument of petitioner Salenga that his position was that of a regular
employee. Moreover, the LA found that petitioner had not been accorded the right to
due process. Instead, the latter was dismissed without the benefit of an explanation of
the grounds for his termination, or an opportunity to be heard and to defend himself.
Finally, considering petitioners reputation and contribution as a government employee
for 40 years, the LA awarded moral damages amounting to P2,000,000 and exemplary
damages of P500,000. The dispositive portion of the LAs Decision reads:
WHEREFORE, premises considered, judgment is hereby rendered declaring
respondent Clark Development Corporation and Rufo Colayco guilty of illegal dismissal
and for which they are ordered, as follows:
1.
To reinstate complainant to his former or equivalent position without loss of
seniority rights and privileges;
2.
To pay complainant his backwages reckoned from the date of his dismissal on
September 22, 1998 until actual reinstatement or merely reinstatement in the payroll
which as of this date is in the amount of P722,400.00;
3.
4.
SO ORDERED.[4]
At the time the above Decision was rendered, respondent CDC was already under the
leadership of Sergio T. Naguiat. When he received the Decision on 10 March 2000, he
subsequently instructed Atty. Monina C. Pineda, manager of the Corporate and Legal
Services Department and concurrent corporate board secretary, not to appeal the
Decision and to so inform the OGCC.[5]
Page 39 of 55
Despite these instructions, two separate appeals were filed before LA Darlucio on 20
March 2000. One appeal[6] was from the OGCC on behalf of respondent CDC and Rufo
Colayco. The OGCC reiterated its allegation that petitioner was a corporate officer, and
that the termination of his employment was an intra-corporate matter. The Memorandum
of Appeal was verified and certified by Hilana Timbol-Roman, the executive vice
president of respondent CDC. The Memorandum was accompanied by a UCPB
General Insurance Co., Inc. supersedeas bond covering the amount due to petitioner as
adjudged by LA Darlucio. Timbol-Roman and OGCC lawyer Roy Christian Mallari also
executed on 17 March 2000 a Joint Affidavit of Declaration wherein they swore that they
were the respective authorized representative and counsel of respondent corporation.
However, the Memorandum of Appeal and the Joint Affidavit of Declaration were not
accompanied by a board resolution from respondents board of directors authorizing
either Timbol-Roman or Atty. Mallari, or both, to pursue the case or to file the appeal on
behalf of respondent.
It is noteworthy that Naguiat, who was president/CEO of respondent CDC from 3
February 2000 to 5 July 2000, executed an Affidavit on 20 March 2002,[7] wherein he
stated that without his knowledge, consent or approval, Timbol-Roman and Atty. Mallari
filed the above-mentioned appeal. He further alleged that their statements were false.
The second appeal, meanwhile, was filed by former CDC President/CEO Rufo Colayco.
Colayco alleged that petitioner was dismissed not on 22 September 1998, but twice on
9 March 1999 and 23 March 1999. The dismissal was allegedly approved by
respondents CDC board of directors pursuant to a new organizational structure.
Colayco likewise stated that he had posted a supersedeas bond the same bond taken
out by Timbol-Roman issued by the UCPB General Insurance Co. dated 17 March 2000
in order to secure the monetary award, exclusive of moral and exemplary damages.
Petitioner thereafter opposed the two appeals on the grounds that both appellants,
respondent CDC as allegedly represented by Timbol-Roman and Atty. Mallari and Rufo
Colayco had failed to observe Rule VI, Sections 4 to 6 of the NLRC Rules of Procedure;
and that appellants had not been authorized by respondents board of directors to
represent the corporation and, thus, they were not the employer whom the Rules
referred to. Petitioner also alleged that appellants failed to refute the findings of LA
Darlucio in the previous Decision.
In the meantime, while the appeal was pending, on 19 October 2000, respondents
board chairperson and concurrent President/CEO Rogelio L. Singson ordered the
reinstatement of petitioner to the latters former position as head executive assistant,
effective 24 October 2000.[8]
On 28 May 2001, respondent CDCs new President/CEO Emmanuel Y. Angeles issued a
Memorandum, which offered all managers of respondent corporation an early
separation/redundancy program. Those who wished to avail themselves of the program
were to be given the equivalent of their 1.25-month basic salary for every year of
service and leave credits computed on the basis of the same 1.25-month equivalent of
their basic salary.[9]
In August 2001, respondent CDC offered another retirement plan granting higher
benefits to the managerial employees. Thus, on 12 September 2001, petitioner filed an
application for the early retirement program, which Angeles approved on 3 December
2001.
Meanwhile, in the proceedings of the NLRC, petitioner received on 12 September 2001
its 30 July 2001 Decision[10] on the appeal filed by Timbol-Roman and Colayco. It is
worthy to note that the said Decision referred to the reports of reviewer arbiters Cristeta
D. Tamayo and Thelma M. Concepcion, who in turn found that petitioner Salenga was a
Page 40 of 55
corporate officer of CDC. Nevertheless, the First Division of the NLRC upheld LA
Darlucios ruling that petitioner Salenga was indeed a regular employee. It also found
that redundancy, as an authorized cause for dismissal, has not been sufficiently proven,
rendering the dismissal illegal. However, the NLRC held that the award of exemplary
and moral damages were unsubstantiated. Moreover, it also dropped Colayco as a
respondent to the case, since LA Darlucio had failed to provide any ground on which to
anchor the formers solidary liability.
Petitioner Salenga thereafter moved for a partial reconsideration of the abovementioned Decision. He sought the reinstatement of the award of exemplary and moral
damages. He likewise insisted that the NLRC should not have entertained the appeal on
the following grounds: (1) respondent CDC did not file an appeal and did not post the
required cash or surety bond; (2) both Timbol-Roman and Colayco were admittedly not
real parties-in-interest; (3) they were not the employer or the employers authorized
representative and, thus, had no right to appeal; and (4) both appeals had not been
perfected for failure to post the required cash or surety bond. In other words, petitioners
theory revolved on the fact that neither Timbol-Roman nor Colayco was authorized to
represent the corporation, so the corporation itself did not appeal LA Darlucios Decision.
As a result, that Decision should be considered as final and executory.
For its part, the OGCC also filed a Motion for Reconsideration[11] of the NLRCs 30 July
2001 Decision insofar as the finding of illegal dismissal was concerned. It no longer
questioned the commissions finding that petitioner was a regular employee, but instead
insisted that he had been dismissed as a consequence of his redundant position. The
motion, however, was not verified by the duly authorized representative of respondent
CDC.
On 5 December 2002, the NLRC denied petitioner Salengas Motion for Partial
Reconsideration and dismissed the Complaint. The dispositive portion of the
Resolution[12] reads as follows:
WHEREFORE, complainants partial motion for reconsideration is denied. As
recommended by Reviewer Arbiters Cristeta D. Tamayo in her August 2, 2000 report
and Thelma M. Concepcion in her November 25, 2002 report, the decision of Labor
Arbiter Florentino R. Darlucio dated 29 February 2000 is set aside.
The complaint below is dismissed for being without merit.
SO ORDERED.[13]
Meanwhile, pending the Motions for Reconsideration of the NLRCs 30 July 2001
Decision, another issue arose with regard to the computation of the retirement benefits
of petitioner. Respondent CDC did not immediately give his requested retirement
benefits, pending clarification of the computation of these benefits. He claimed that the
computation of his retirement benefits should also include the forty (40) years he had
been in government service in accordance with Republic Act No. (R.A.) 8291, or the
GSIS Act, and should not be limited to the length of his employment with respondent
corporation only, as the latter insisted.
In a letter dated 14 March 2003, petitioner Salengas counsel wrote to the board of
directors of respondent to follow up the payment of the retirement benefits allegedly due
to petitioner.[14]
Pursuant to the NLRCs dismissal of the Complaint of petitioner Salenga, Angeles
subsequently denied the formers request for his retirement benefits, to wit:[15]
Please be informed that we cannot favorably grant your clients claim for retirement
benefits considering that Clark Development Corporation's dismissal of Mr. Antonio B.
Page 41 of 55
Salenga had been upheld by the National Labor Relations Commission through a
Resolution dated December 5, 2002...
xxx xxx xxx
As it is, the said Resolution dismissed the Complaint filed by Mr. Salenga for being
without merit. Consequently, he is not entitled to receive any retirement pay from the
corporation.
Meanwhile, petitioner Salenga filed a second Motion for Reconsideration of the 5
December 2002 Resolution of the NLRC, reiterating his claim that it should not have
entertained the imperfect appeal, absent a proper verification and certification against
forum-shopping from the duly authorized representative of respondent CDC. Without
that authority, neither could the OGCC act on behalf of the corporation.
The OGCC, meanwhile, resurrected its old defense that the NLRC had no jurisdiction
over the case, because petitioner Salenga was a corporate officer.
The parties underwent several hearings before the NLRC First Division. During these
times, petitioner Salenga demanded from the OGCC to present a board resolution
authorizing it or any other person to represent the corporation in the proceedings. This,
the OGCC failed to do.
After giving due course to the Motion for Reconsideration filed by petitioner Salenga, the
NLRC issued a Resolution[16] on 10 September 2003, partially granting the motion.
This time, the First Division of the NLRC held that, absent a board resolution authorizing
Timbol-Roman to file the appeal on behalf of respondent CDC, the appeal was not
perfected and was thus a mere scrap of paper. In other words, the NLRC had no
jurisdiction over the appeal filed before it.
The NLRC further held that respondent CDC had failed to show that petitioner Salengas
dismissal was pursuant to a valid corporate reorganization or board resolution. It also
deemed respondent estopped from claiming that there was indeed a redundancy,
considering that petitioner Salenga had been reinstated to his position as head
executive assistant. While it granted the award of moral damages, it nevertheless
denied exemplary damages. Thus, the dispositive portion of its Decision reads:
WHEREFORE, premises considered, the complainants Motion for Reconsideration is
GRANTED and We set aside our Resolution of December 5, 2002. The Decision of the
Labor Arbiter dated February 29, 2000 is REINSTATED with the MODIFICATION that:
1.) Being a nominal party, respondent Rufo Colayco is declared to be not jointly and
severally liable with respondent Clark Development Corporation;
2.) Respondent Clark Development Corporation is ordered to pay the complainant his
full backwages and other monetary claims to which he is entitled under the decision of
the Labor Arbiter;
3.) Respondent CDC is likewise ordered to pay the complainant moral and exemplary
damages as provided under the Labor Arbiters Decision; and
4.)
In the meantime, respondent CDC is ordered to pay the complainant his retirement
benefits without further delay.
SO ORDERED.[17]
Page 42 of 55
On 3 October 2003, the OGCC filed a Motion for Reconsideration[18] despite the
absence of a verification and the certification against forum shopping.
On 21 January 2004, the motion was denied by the NLRC for lack of merit.[19]
On 5 February 2004, the executive clerk of the NLRC First Division entered the
judgment on the foregoing case. Thereafter, on 9 February 2004, the NLRC forwarded
the entire records of the case to the NLRC-RAB III Office in San Fernando, Pampanga
for appropriate action.
On 4 March 2004, petitioner Salenga filed a Motion for Issuance of Writ of Execution
before the NLRC-RAB III, Office of LA Henry D. Isorena. The OGCC opposed the
motion on the ground that it had filed with the CA a Petition for Certiorari seeking the
reversal of the NLRC Decision dated 30 July 2001 and the Resolutions dated 10
September 2003 and 21 January 2004, respectively. It is noteworthy that, again, there
was no board resolution attached to the Petition authorizing its filing.
Despite the pending Petition with the CA, LA Isorena issued a Writ of Execution
enforcing the 10 September 2003 Resolution of the NLRC. On 1 April 2004, the LA
issued an Order[20] to the manager of the Philippine National Bank, Clark Branch,
Angeles City, Pampanga, to immediately release in the name of NLRC-RAB III the
amount of P3,222,400 representing partial satisfaction of the judgment award, including
the execution fee of P31,720.
Respondent CDC filed with the CA in February 2004 a Petition for Certiorari with a
prayer for the issuance of a temporary restraining order and/or a writ of preliminary
injunction. However, the Petition still lacked a board resolution from the board of
directors of respondent corporation authorizing its then President Angeles to verify and
certify the Petition on behalf of the board. It was only on 16 March 2004 that counsel for
respondent filed a Manifestation/Motion[21] with an attached Secretarys Certificate
containing the boards Resolution No. 86, Series of 2001. The Resolution authorized
Angeles to represent respondent corporation in prosecuting, maintaining, or
compromising any lawsuit in connection with its business.
Meanwhile, in the proceedings before LA Isorena, both respondent CDCs legal
department and the OGCC on 6 April 2004 filed their respective Motions to Quash Writ
of Execution.[22] They both cited the failure to afford to respondent due process in the
issuance of the writ. They claimed that the pre-conference hearing on the execution of
the judgment had not pushed through. They also reiterated that the Petition for
Certiorari dated 11 February 2004 was still pending with the CA.
Both motions were denied by LA Isorena for lack of factual and legal bases.
On 6 May 2004, respondent filed with LA Isorena another Motion to Quash Writ of
Execution, again reiterating the pending Petition with the CA.
This active exchange of pleadings and motions and the delay in the payment of his
money claims eventually led petitioner Salenga to file an Omnibus Motion[23] before LA
Isorena. In his motion, he recomputed the amount due him representing back wages,
other benefits or allowances, legal interests and attorneys fees. He also prayed for the
computation of his retirement benefits plus interests in accordance with R.A. 8291[24]
and R.A. 1616.[25] He insisted that since respondent CDC was a government-owned
and -controlled corporation (GOCC), his previous government service totalling 40 years
must also be credited in the computation of his retirement pay. Thus, he demanded the
payment of the total amount of P23,920,772.30, broken down as follows:
Page 43 of 55
Decision of LA Darlucio. LA Bactin held that since the Decision had become final and
executory, he no longer had jurisdiction to amend or to alter the judgment.
Anent the second issue of the computation of retirement benefits, LA Bactin also denied
the claim of petitioner Salenga, considering that the latters retirement benefits had
already been paid. The LA, however, did not rule on whether petitioner was entitled to
retirement benefits, either under the Government Service Insurance System (GSIS) or
under the Social Security System (SSS), and held that this issue was beyond the
expertise and jurisdiction of a LA.
Petitioner Salenga thereafter appealed to the NLRC, which granted the appeal in a
Resolution[34] dated 22 July 2005. First, it was asked to resolve the issue of the
propriety of having the Laguesma Law Office represent respondent CDC in the
proceedings before the LA. The said law firm entered its appearance as counsel for
respondent during the pre-execution conference/hearing on 1 October 2004. On this
issue, the NLRC held that respondent corporations legal department, which had
previously been representing the corporation, was not validly substituted by the
Laguesma Law Office. In addition, the NLRC held that respondent had failed to comply
with Memorandum Circular No. 9, Series of 1998, which strictly prohibits the hiring of
lawyers of private law firms by GOCCs without the prior written conformity and
acquiescence of the Office of Solicitor General, as the case may be, and the prior
written concurrence of the Commission on Audit (COA). Thus, the NLRC held that all
actions and submissions undertaken by the Laguesma Law Office on behalf of
respondent were null and void.
The second issue raised before the NLRC was whether LA Bactin acted without
jurisdiction in annulling and setting aside the formers final and executory judgment
contained in its 10 September 2003 Resolution, wherein it held that the appeal had not
been perfected, absent the necessary board resolution allowing or authorizing TimbolRoman and Atty. Mallari to file the appeal. On this issue, the NLRC stated:
The final and executory judgment in this case is clearly indicated in the dispositive
portion of Our Resolution promulgated on September 10, 2003 GRANTING
complainants motion for reconsideration, SETTING ASIDE Our Resolution of December
5, 2002, and REINSTATING the Decision of the Labor Arbiter dated February 29, 2000
with the following modification[s]: (1) declaring respondent Rufo Colayco not jointly and
severally liable with respondent Clark Development Corporation; (2) ordering
respondent CDC to pay the complainant his full backwages and other monetary claims
to which he is entitled under the decision of the Labor Arbiter; (3) ordering respondent
CDC to pay complainant moral and exemplary damages as provided under the Labor
Arbiters Decision; and (4) ordering respondent CDC to pay the complainant his
retirement benefits without further delay. This was entered in the Book of Entry of
Judgment as final and executory effective as of February 2, 2004.
Implementing this final and executory judgment, Arbiter Isorena issued an Order dated
May 24, 2004, DENYING respondents Motion to Quash the Writ of Execution dated
March 22, 2004, correctly stating thusly:
Let it be stressed that once a decision has become final and executory, it becomes the
ministerial duty of this Office to issue the corresponding writ of execution. The rationale
behind it is based on the fact that the winning party has suffered enough and it is the
time for him to enjoy the fruits of his labor with dispatch. The very purpose of the preexecution conference is to explore the possibility for the parties to arrive at an amicable
settlement to satisfy the judgment award speedily, not to delay or prolong its
implementation.
Page 45 of 55
Thus, when Arbiter Bactin, who took over from Arbiter Isorena upon the latters filing for
leave of absence due to poor health in January 2005, issued the appealed Order
nullifying, instead of implementing, the final and executory judgment of this
Commission, the labor arbiter a quo acted WITHOUT JURISDICTION.[35]
xxx xxx xxx
WHEREFORE, premises considered, the appeal of herein complainant is hereby
GRANTED, and We declare NULL AND VOID the appealed Order of March 8, 2005 and
SET ASIDE said Order; We direct the immediate issuance of the corresponding Alias
Writ of Execution to enforce the final and executory judgment of this Commission as
contained in Our September 10, 2003 Resolution.
SO ORDERED.[36]
Unwilling to accept the above Resolution of the NLRC, the Laguesma Law Office filed a
Motion for Reconsideration dated 29 August 2005 with the NLRC. Again, the motion
lacked proper verification and certification against non-forum shopping.
In the meantime, the OGCC also filed with the CA a Motion for the Issuance of a Writ of
Preliminary Injunction dated 30 August 2005[37] against the NLRCs 22 July 2005
Resolution. The OGCC alleged that the issues in the Resolution addressed monetary
claims that were raised by petitioner Salenga only in his Omnibus Motion dated 7 May
2004 or after the issuance of the 10 September 2003 Decision of LA Darlucio. Thus, the
OGCC insisted that the NLRC had no jurisdiction over the issue, for the matter was still
pending with the CA.
The OGCC likewise filed another Motion for Reconsideration[38] dated 31 August 2005
with the NLRC. The OGCC maintained that it was only acting in a collaborative manner
with the legal department of respondent CDC, for which the former remained the lead
counsel. The OGCC reiterated that, as the statutory counsel of GOCCs, it did not need
authorization from them to maintain a case, and thus, LA Bactin had jurisdiction over
that case. Finally, it insisted that petitioner Salenga was not covered by civil service
laws on retirement, the CDC having been created under the Corporation Code.
On 13 September 2005, the CA promulgated the assailed Decision. Relying heavily on
the reports of Reviewer Arbiters Cristeta D. Tamayo and Thelma M. Concepcion, it held
that petitioner Salenga was a corporate officer. Thus, the issue before the NLRC was an
intra-corporate dispute, which should have been lodged with the Securities and
Exchange Commission (SEC), which had jurisdiction over the case at the time the issue
arose. The CA likewise held that the NLRC committed grave abuse of discretion when it
allowed and granted petitioner Salengas second Motion for Reconsideration, which was
a prohibited pleading.
Petitioner subsequently filed a Motion for Reconsideration on 7 October 2005, alleging
that the CA committed grave abuse of discretion in reconsidering the findings of fact,
which had already been found to be conclusive against respondent; and in taking
cognizance of the latters Petition which had not been properly verified.
The CA, finding no merit in petitioners allegations, denied the motion in its 17 August
2006 Resolution.
On 4 September 2006, petitioner Salenga filed a Motion for Extension of Time to File a
Petition for Review on Certiorari under Rule 45, praying for an extension of fifteen (15)
days within which to file the Petition. The motion was granted through this Courts
Resolution dated 13 September 2006. The case was docketed as G.R. No. 174159.
Page 46 of 55
e.
It did not dismiss the Petition when respondent failed to attach to it certified true
copies of the assailed NLRC 30 July 2001 Decision; 10 September 2003 Resolution; 21
January 2004 Resolution; copies of material portions of the record as are referred to
therein; and copies of pleadings and documents relevant and pertinent thereto.
f.
It did not act on respondents failure to serve on the Office of the Solicitor General
a copy of the pleadings, motions and manifestations the latter had filed before the Court
of Appeals, as well as copies of pertinent court resolutions and decisions, despite the
NLRC being a party to the present case.
g.
It disregarded the findings of fact and conclusions of law arrived at by LA Darlucio,
subjecting them to a second analysis and evaluation and supplanting them with its own
findings.
h.
It granted the Petition despite respondents failure to show that the NLRC
committed grave abuse of discretion in rendering the latters 30 July 2001 Decision, 10
September 2003 Resolution and 21 January 2004 Resolution.
i.
It dismissed the complaint for illegal dismissal and ordered the restitution of the
P3,222,400 already awarded to petitioner, plus interest thereon.
In its defense, private respondent insists that the present Petition for Certiorari under
Rule 65 is an improper remedy to question the Decision of the CA, and thus, the case
Page 47 of 55
the verification and the certification against forum-shopping through their duly
authorized representatives. We ruled thereon as follows:
But the rule is different where the OSG is acting as counsel of record for a government
agency. For in such a case it becomes necessary to determine whether the petitioning
government body has authorized the filing of the petition and is espousing the same
stand propounded by the OSG. Verily, it is not improbable for government agencies to
adopt a stand different from the position of the OSG since they weigh not just legal
considerations but policy repercussions as well. They have their respective mandates
for which they are to be held accountable, and the prerogative to determine whether
further resort to a higher court is desirable and indispensable under the circumstances.
The verification of a pleading, if signed by the proper officials of the client agency itself,
would fittingly serve the purpose of attesting that the allegations in the pleading are true
and correct and not the product of the imagination or a matter of speculation, and that
the pleading is filed in good faith. Of course, the OSG may opt to file its own petition as
a People's Tribune but the representation would not be for a client office but for its own
perceived best interest of the State.
The case of Commissioner of Internal Revenue v. S.C. Johnson and Son, Inc., is not
also a precedent that may be invoked at all times to allow the OSG to sign the certificate
of non-forum shopping in place of the real party-in-interest. The ruling therein mentions
merely that the certification of non-forum shopping executed by the OSG constitutes
substantial compliance with the rule since the OSG is the only lawyer for the petitioner,
which is a government agency mandated under Section 35, Chapter 12, Title III, Book
IV, of the 1987 Administrative Code (Reiterated under Memorandum Circular No. 152
dated May 17, 1992) to be represented only by the Solicitor General.
By its very nature, substantial compliance is actually inadequate observance of the
requirements of a rule or regulation which are waived under equitable circumstances to
facilitate the administration of justice there being no damage or injury caused by such
flawed compliance. This concept is expressed in the statement the rigidity of a previous
doctrine was thus subjected to an inroad under the concept of substantial compliance.
In every inquiry on whether to accept substantial compliance, the focus is always on the
presence of equitable conditions to administer justice effectively and efficiently without
damage or injury to the spirit of the legal obligation.
xxx xxx xxx
The fact that the OSG under the 1987 Administrative Code is the only lawyer for a
government agency wanting to file a petition, or complaint for that matter, does not
operate per se to vest the OSG with the authority to execute in its name the certificate
of non-forum shopping for a client office. For, in many instances, client agencies of the
OSG have legal departments which at times inadvertently take legal matters requiring
court representation into their own hands without the intervention of the OSG.
Consequently, the OSG would have no personal knowledge of the history of a particular
case so as to adequately execute the certificate of non-forum shopping; and even if the
OSG does have the relevant information, the courts on the other hand would have no
way of ascertaining the accuracy of the OSG's assertion without precise references in
the record of the case. Thus, unless equitable circumstances which are manifest from
the record of a case prevail, it becomes necessary for the concerned government
agency or its authorized representatives to certify for non-forum shopping if only to be
sure that no other similar case or incident is pending before any other court.
We recognize the occasions when the OSG has difficulty in securing the attention and
signatures of officials in charge of government offices for the verification and certificate
of non-forum shopping of an initiatory pleading. This predicament is especially true
Page 51 of 55
where the period for filing such pleading is non-extendible or can no longer be further
extended for reasons of public interest such as in applications for the writ of habeas
corpus, in election cases or where sensitive issues are involved. This quandary is more
pronounced where public officials have stations outside Metro Manila.
But this difficult fact of life within the OSG, equitable as it may seem, does not excuse it
from wantonly executing by itself the verification and certificate of non-forum shopping.
If the OSG is compelled by circumstances to verify and certify the pleading in behalf of a
client agency, the OSG should at least endeavor to inform the courts of its reasons for
doing so, beyond instinctively citing City Warden of the Manila City Jail v. Estrella and
Commissioner of Internal Revenue v. S.C. Johnson and Son, Inc.
Henceforth, to be able to verify and certify an initiatory pleading for non-forum shopping
when acting as counsel of record for a client agency, the OSG must (a) allege under
oath the circumstances that make signatures of the concerned officials impossible to
obtain within the period for filing the initiatory pleading; (b) append to the petition or
complaint such authentic document to prove that the party-petitioner or complainant
authorized the filing of the petition or complaint and understood and adopted the
allegations set forth therein, and an affirmation that no action or claim involving the
same issues has been filed or commenced in any court, tribunal or quasi-judicial
agency; and, (c) undertake to inform the court promptly and reasonably of any change
in the stance of the client agency.
Anent the document that may be annexed to a petition or complaint under letter (b)
hereof, the letter-endorsement of the client agency to the OSG, or other
correspondence to prove that the subject-matter of the initiatory pleading had been
previously discussed between the OSG and its client, is satisfactory evidence of the
facts under letter (b) above. In this exceptional situation where the OSG signs the
verification and certificate of non-forum shopping, the court reserves the authority to
determine the sufficiency of the OSG's action as measured by the equitable
considerations discussed herein. (Emphasis ours, italics provided)
The ruling cited above may have pertained only to the Office of the Solicitor Generals
representation of government agencies and instrumentalities, but we see no reason why
this doctrine cannot be applied to the case at bar insofar as the OGCC is concerned.
While in previous decisions we have excused transgressions of these rules, it has
always been in the context of upholding justice and fairness under exceptional
circumstances. In this case, though, respondent failed to provide any iota of rhyme or
reason to compel us to relax these requirements. Instead, what is clear to us is that the
so-called appeal was done against the instructions of then President/CEO Naguiat not
to file an appeal. Timbol-Roman, who signed the Verification and the Certification
against forum-shopping, was not even an authorized representative of the corporation.
The OGCC was equally remiss in its duty. It ought to have advised respondent
corporation, the proper procedure for pursuing an appeal. Instead, it maintained the
appeal and failed to present any valid authorization from respondent corporation even
after petitioner had questioned OGCCs authority all throughout the proceedings. Thus, it
is evident that the appeal was made in bad faith.
The unauthorized and overzealous acts of officials of respondent CDC and the OGCC
have led to a waste of the governments time and resources. More alarmingly, they have
contributed to the injustice done to petitioner Salenga. By taking matters into their own
hands, these officials let the case drag on for years, depriving him of the enjoyment of
property rightfully his. What should have been a simple case of illegal dismissal became
an endless stream of motions and pleadings.
Page 52 of 55
Time and again, we have said that the perfection of an appeal within the period
prescribed by law is jurisdictional, and the lapse of the appeal period deprives the courts
of jurisdiction to alter the final judgment.[43] Thus, there is no other recourse but to
respect the findings and ruling of the labor arbiter. Clearly, therefore, the CA committed
grave abuse of discretion in entertaining the Petition filed before it after the NLRC had
dismissed the case based on lack of jurisdiction. The assailed CA Decision did not even
resolve petitioner Salengas consistent and persistent claim that the NLRC should not
have taken cognizance of the appeal in the first place, absent a board resolution. Thus,
LA Darlucios Decision with respect to the liability of the corporation still stands.
However, we note from that Decision that Rufo Colayco was made solidarily liable with
respondent corporation. Colayco thereafter filed his separate appeal. As to him, the
NLRC correctly held in its 30 July 2001 Decision that he may not be held solidarily
responsible to petitioner. As a result, it dropped him as respondent. Notably, in the case
at bar, petitioner does not question that ruling.
Based on the foregoing, all other subsequent proceedings regarding the issue of
petitioners dismissal are null and void for having been conducted without jurisdiction.
Thus, it is no longer incumbent upon us to rule on the other errors assigned in the
matter of petitioner Salengas dismissal.
Page 54 of 55
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
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