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x x x x[7]

For his illegal termination, petitioner asserted that he is entitled to hisunpaid commission, tax refund, back wages and reinstatement.

On the other hand, respondents denied dismissing petitioner. Theycountered that petitioner's poor sales performance did not improveeven after he was regularized. On February 18, 2002, managementmet with the Sales Group on a per agent basis to discuss salesperformance, possible salary realignment and revamp of the SalesGroup. Agcaoili relayed to petitioner the poor assessment of his sales

performance and the possibility that he will be transferred to anotherdepartment although there was yet no official decision on the matter.Petitioner then told Agcaoili that he was aware of the problem and hispossible termination, prompting the latter to convince the former toconsider voluntarily resigning from the company rather than beterminated. The next day, February 19, 2002, petitioner talked anew toAgcaoili and informed the latter that he will just resign from thecompany and sought an appointment with Sy. When petitioner inquiredhow much he will get if he will resign, Sy advised him that he would getsalaries and commissions to which he is legally entitled; hence, fortems sold and already delivered, he will be receiving the commission infull, but for those sold but yet to be delivered, as per company policy,he will receive the commissions only upon delivery of the items. Uponhearing this, petitioner suddenly got mad and said that if that is thecase, the company president should just terminate him and walkedout. Petitioner was given a chance, through the two memos issued to

him, to explain his failure to meet the prescribed sales quota and hisfailure to report for work without informing the company of the reasontherefor. But he never submitted his explanations to his violations of thecontract of employment, and abandoned his job which is anotherground for terminating his employment. While it would appear thatpetitioner aimed to secure his alleged money claims from therespondents, this does not justify abandonment of his work asrespondents never had the intention of terminating his services.Respondents maintained that petitioner voluntarily left his workplaceand refused to report for work as in fact he indicated to his salessupervisor that he will just resign; however, he never submitted a letterof resignation.[8]

Respondents also denied the claims of petitioner regarding an allegedsouring of his relations with Garcia, as in fact it was petitioner whoclearly had a personal grudge against her and not the other wayaround. The alleged incidents with client actually showed it waspetitioner who was discourteous and abusive. There was likewise noreason for respondent Sy to say they were powerful because petitionerdid not at all threaten to sue or do something to their prejudice. Torefute petitioner's unfounded allegations, respondents presented theaffidavits of the following: (1) co-employee Rommel Azarraga whoadmitted he was the person who warned petitioner to be careful andtold him "mainit ka kay Mrs. Garcia" and explained that he only madesuch statement in order to scare petitioner and convince him to changehis attitude; the truth is that Mrs. Garcia had not spoken to him aboutharbouring any ill feelings towards petitioner and neither does he knowof any incident or circumstance which may give rise to such ill feeling ofMrs. Garcia towards petitioner; (2) Richard Agcaoili who corroboratedthe respondents' claims, denying that petitioner was terminated due tonsubordination; he further denied having told petitioner that

management was satisfied with his performance, the truth being thatwhile petitioner may have ranked second to the top performer, therewas actually only two remaining senior sales agents while the rest havemore or less six months experience; considering the number of years ofhis service to the company, petitioner should have improved as againstother agents most of whom were newly-hired and still under probation;and (3) Arnulfo Merecido, respondent company's employee(warehouse helper) who claimed that he had a fistfight with petitionersometime in June 2000 which arose from the latter's insulting remarksregarding his family.[9]

Labor A rbi ter 's Rul ing

n his decision[10]dated April 8, 2003, Labor Arbiter Elias H. Salinasdismissed petitioner's complaint on the basis of his finding that it waspetitioner who opted not to report for work since February 22, 2002,

after offering to resign (as told to his supervisor) because he could notaccept his possible transfer to another department.

NLRC's Rul ing

Petitioner appealed to the NLRC which reversed the Labor Arbiter'sruling. The NLRC found that the dismissal of petitioner was madeunder questionable circumstances, thus giving weight to petitioner'sassertion that he was being singled out notwithstanding that all salespersonnel similarly could not meet the P1.5 million monthly salesquota. Such finding is reinforced by the fact that no sanction wasimposed on petitioner or any other employee for the supposed failure meet the quota, thereby creating the impression that the situation wastolerated by the respondents. The NLRC thus decreed:

WHEREFORE, premises considered, the Decision dated April 8, 2003is set aside and reversed. A new one is entered finding complainant thave been illegally dismissed and thus entitled to reinstatement withbackwages. Respondent Centro Ceramica Corporation is herebyordered to pay complainant his backwages reckoned from the date ofhis dismissal on February 19, 2002 up to the date of the promulgationof this decision. As reinstatement is no longer feasible, complainantshould instead be paid separation pay equivalent to one half (1/2)month pay for every year of service. In addition, respondents companshould pay complainant his unpaid commission in the amount ofP16,581.00.

All other claims are dismissed for lack of merit.

SO ORDERED.[11]

Court of A ppeals Rul ing

Respondents elevated the case to the CA which reversed the NLRCand dismissed petitioner's complaint. According to the CA, petitioner bhis own account had admitted that it was he who asked for hisdismissal when he narrated that during his meeting with Sy, he hadasked for his termination paper and she threatened to do so if that wawhat he wanted. It also noted the affidavit of Agcaoili who attested thapetitioner was merely informed of the decision to transfer him toanother department, which is not denied by the petitioner; said witnesalso said that the turnover of company documents and files wasvoluntary on the part of petitioner who expressed desire to resign fromthe company. Another statement considered by the CA is that made bwitness Azarraga who explained that he only mentioned the name of

Ms. Garcia to petitioner when he warned the latter to be careful, simplbecause she is a member of the Couples for Christ who may have aninfluence over petitioner who is a member of the Singles for Christ. Ato the memos sent by the company to petitioner's residence, this showthat it has not yet terminated the employment of petitioner. Thus, theCA held that the evidence on record supports the Labor Arbiter'sfinding that petitioner "informally severed" the employment relationshipas manifested by his voluntary transfer of his accountabilities to hissupervisor and thereafter his act of not reporting for work anymore.

Petitioner's motion for reconsideration having been denied, the presenpetition was filed in this Court.

Issue

The sole issue to be addressed is whether petitioner was dismissed b

the respondents or voluntarily severed his employment by abandoninghis job.

Argum ents of the Part ies

Petitioner assails the CA's misappreciation of the facts, completelyrelying on respondents' allegations particularly on what transpiredduring the meeting with respondents Sy and Garcia, of which theappellate court made a "twisted" interpretation of theirconversation. Hence, instead of decreeing petitioner's illegaltermination based on Sy's verbal dismissal without just cause and dueprocess, the CA proceeded to conclude that petitioner voluntarily andinformally severed his relation with the company. As to the affidavit oAgcaoili, his statement that he merely informed petitioner of thedecision to transfer him to another department is of no moment

because what matters is the action of Sy who dismissed petitioneroutright. Moreover, Agcaoili, being under the employ of respondents,would logically be biased and he would naturally tend to protect the


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company by his statements regarding petitioner's case. On the otherhand, Azarraga's confusing and inconsistent statements only confirmedthat Garcia indeed had a grudge against petitioner, as he could notgive a rational explanation for warning petitioner to be careful withGarcia.

Petitioner further contends that his act of turning over hisaccountabilities to his supervisor cannot be considered voluntary on hispart as it was done by him knowing that he was already terminated andupon the specific instructions of Sy and Garcia. The CA therefore erredn relying on the unbelievable submission of respondents that suchtransfer of company documents and samples was indicative of

petitioner's desire to resign. It failed to see that petitioner's reaction tohis impending transfer to another department ("pag-iisipan ko pa") wasdue to his not coming to terms with Garcia and aware of the warningearlier given by his friends. Under this scenario, the animosity betweenpetitioner and Garcia was evident such that Garcia eventually prevailedupon Sy to terminate petitioner's services. Unfortunately, it was on thevery same day that petitioner was verbally terminated by Sy on theground of insubordination and ordered to immediately turn over his filesand samples. It was on February 21, 2002 that Agcaoili told petitionerthat the company will give him all that is due him plus goodwill money,and in a meeting with Sy he had asked for his termination paperbecause he was in fact already terminated on February 19, 2002 butshe responded by saying that if that was what he wanted she will give itto him and even threatened him to think because respondents arepowerful.

n their Comment, respondents assert that the CA committed noreversible error in concluding that petitioner was not il legallyterminated. They stress that the evidence clearly established thatpetitioner was not dismissed but required merely to explain why hefailed to report for work after meeting the company president. As topetitioner's act of turning over his accountabilities, respondents arguethat this cannot be considered proof of his illegal dismissal because itwas done voluntarily in line with his proposed resignation. Respondentcompany was about to conduct its investigation on petitioner who wentAWOL since February 19, 2002 but then he refused to accept thememos sent to him, thus confirming categorically that respondentswere investigating his failure to report for work and giving him all theopportunity to explain his absence.

The Court 's Rul ing

We grant the petition.

As a general rule, only questions of law may be allowed in a petition forreview on certiorari.[12]Considering, however, that the Labor Arbiter'sfindings were reversed by the NLRC, whose Decision was in turnoverturned by the CA, reinstating the Labor Arbiter's Decision, itbehooves the Court to reexamine the records and resolve theconflicting rulings.[13]

Scrutinizing the records, we find that the NLRC's finding of illegaldismissal is supported by the totality of evidence and more consistentwith logic and ordinary human experience than the common finding ofthe CA and Labor Arbiter that petitioner informally severed hisemployment relationship with the company. It hardly convinces us thatafter declining his supposed transfer to another department as per the

nformation relayed to him by his supervisor, petitioner would readilyturn over his files and samples unless something critical indeed tookplace in his subsequent closed-door meeting with Sy and Garcia. Ascorrectly pointed out by petitioner, it is irrelevant whether or not he hadearlier inquired from his supervisor what he will receive if he offersnstead to resign upon being told of his impending transfer, for whatmatters is the action of Sy on his employment status. If ever petitionermomentarily contemplated resignation and such was the impression heconveyed in his talk with his supervisor prior to the meeting with Sy,such is borne by circumstances indicating Garcia's antagonism towardspetitioner. In any event, whether such perception of a strained workingrelationship with Garcia was mistaken or not is beside the point. Thecrucial factor is the verbal order directly given by Sy, the companypresident, for petitioner to immediately turn over his accountabilities.Notably, Sy got irked when petitioner asked for his terminationpaper. Petitioner apparently wanted to ascertain whether such

summary dismissal was official, and it was well within his right todemand that he be furnished with a written notice in order to apprise

him of the real ground for his termination.

Contrary to respondents' theory that petitioner's act of turning over thcompany files and samples is proof of his voluntary informal resignatiorather than of the summary dismissal effected by management, noother plausible explanation can be made of such immediate turn overexcept that petitioner directly confirmed from the company presidentherself that he was already being dismissed. The subsequent memossent to petitioner's residence after he did not anymore report for workonly reinforce the conclusion that the belated written notice of thecharge against him - his alleged failure to meet the prescribed salesquota - was an afterthought on the part of respondents who may have

realized that they failed to observe due process in terminatinghim. That respondents would still require a written explanation forpetitioner's poor sales performance after the latter already compliedwith Sy's directive to turn over all his accountabilities is simplyinconsistent with their claim that petitioner offered to resign andvoluntarily relinquished possession of company files and samples whetold of his impending transfer. In other words, petitioner was not givenany opportunity to defend himself from whatever charges hurled bymanagement against him, such as poor sales performance as relayedto him by his supervisor, when Sy unceremoniously terminated himwhich must have shocked him considering that his supervisor earlieradvised that he would just be transferred to anotherdepartment. Under this scenario, petitioner's decision not to report forwork anymore was perfectly understandable, as the sensible reactionof an employee fired by no less than the company president. It wasindeed a classic case of dismissal without just cause and due process

which is proscribed under our labor laws.

As to the affidavits submitted by the respondents, these are at bestself-serving having been executed by employees beholden to theiremployer and which evidence by themselves did not refute petitioner'smain cause of action -- the fact of his summary dismissal on February19, 2002. Respondents' effort to present the case as one of an erringemployee about to be investigated for poor sales performance mustlikewise fail. The NLRC duly noted the discriminatory treatmentaccorded to petitioner when it declared that there is no evidence at allthat other sales personnel who failed to meet the prescribed salesquota were similarly reprimanded or penalized. Incidentally, thequestion may be asked if petitioner whose performance was assessedby management as "poor" yet admittedly ranked second to the topsales agent of the company, why was it that no evidence wassubmitted by respondents to show the comparative sales performancof all sales agents? Given the strained working relationship with Garcior at least a perception of such gap on the part of petitioner, the lattercould not have been properly informed of the actual ground for hisdismissal. But more importantly, respondents terminated petitioner firsand only belatedly sent him written notices of the charge against him.Fairness requires that dismissal, being the ultimate penalty that can bemeted out to an employee, must have a clear basis. Any ambiguity inthe ground for the termination of an employee should be interpretedagainst the employer, who ordained such ground in the first place.[14]

Resignation is defined as"the voluntary act of employees who arecompelled by personal reasons to disassociate themselves from theiremployment. It must be done with the intention of relinquishing anoffice, accompanied by the act of abandonment."[15]In this case, theevidence on record suggests that petitioner did not resign; he was

orally dismissed by Sy. It is this lack of clear, valid and legal cause, nto mention due process, that made his dismissal illegal, warrantingreinstatement and the award of backwages.[16] Moreover, the filing of complaint for illegal dismissal just three weeks later is difficult toreconcile with voluntary resignation. Had petitioner intended tovoluntarily relinquish his employment after being unceremoniouslydismissed by no less than the company president, he would not havesought redress from the NLRC and vigorously pursued this caseagainst the respondents.[17]

When there is no showing of a clear, valid and legal cause for thetermination of employment, the law considers it a case of illegaldismissal. Furthermore, Article 4 of the Labor Code expresses thebasic principle that all doubts in the interpretation and implementationof the Labor Code should be interpreted in favor of theworkingman. This principle has been extended by jurisprudence to

cover doubts in the evidence presented by the employer and theemployee.[18] Thus we have held that if the evidence presented by the


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employer and the employee are in equipoise, the scales of justice mustbe tilted in favor of the latter.[19]Accordingly, the NLRC's finding ofllegal dismissal must be upheld.

However, the award of back wages and separation pay in lieu ofreinstatement should be modified. Under the doctrine of strainedrelations, the payment of separation pay has been considered anacceptable alternative to reinstatement when the latter option is noonger desirable or viable.[20] Under the facts established, petitioner isentitled to the payment of full back wages, inclusive of allowances, andother benefits or their monetary equivalent, computed from the date ofhis dismissal on February 19, 2002 up to the finality of this decision,

and separation pay in lieu of reinstatement equivalent to onemonth salary for every year of service, computed from the time of hisengagement by respondents on March 21, 1999 up to the finality of thisdecision.[21]

WHEREFORE, the petition for review on certiorari is GRANTED. TheDecision dated April 21, 2006 and Resolution dated September 7, 2006of the Court of Appeals in CA-G.R. SP No. 88061 are SETASIDE. The Decision dated July 29, 2004 of the National LaborRelations Commission in NLRC NCR CA No. 035557-03s REINSTATED andAFFIRMED WITH MODIFICATIONSin that inaddition to the unpaid commission of P16,581.00, respondent CentroCeramica Corporation is hereby ordered to pay petitioner Jhorizaldy Uyhis full back wages, inclusive of allowances, and other benefits or theirmonetary equivalent, computed from the date of his dismissal onFebruary 19, 2002 up to the finality of this decision, and separation pay

n lieu of reinstatement equivalent to one monthsalary for every year ofservice, computed from the time of his engagement by respondentcorporation on March 21, 1999 up to the finality of this decision.

No pronouncement as to costs.

SO ORDERED.Corona, C.J., (Chairperson), Leonardo-De Castro, Bersamin, andDelCastillo, JJ., concur.

2.

SECOND DIVISION

[ G.R. No. 165153, September 23, 2008 ]

CARLOS C. DE CASTRO, PETITIONER, VS. LIBERTYBROADCASTING NETWORK, INC. AND EDGARDO QUIOGUE,

RESPONDENTS.

D E C I S I O NBRION, J.:Before us is the Petition for Review on Certiorari[1]filed by petitionerCarlos C. de Castro (petitioner) to annul, reverse and/or set aside theDecision[2]dated May 25, 2004 and the Resolution[3]dated August 30,2004 of the Former Special Third Division of the Court of Appeals (CA)n CA-G.R. SP No. 79207 entitled "Liberty Broadcasting Network, Inc.and Edgardo B. Quiogue v. National Labor Relations Commission andCarlos C. de Castro."

FACTUAL BACKGROUNDThe facts of the case as gathered from the records are briefly

summarized below.

The petitioner commenced his employment with respondent LibertyBroadcasting Network, Inc. (respondent company) as Building

Administrator on August 7, 1995. On May 16, 1996, the respondentcompany, through its HRM Senior Manager (Personnel Manager)

Bernard Mandap, sent a notice to the petitioner requiring him to explainwithin forty-eight (48) hours why he should not be made liable for

violation of the Company Code of Conduct for acts constituting seriousmisconduct, fraud and willful breach of the trust reposed in him as a

managerial employee.[4]

In his answer, the petitioner denied the allegations against himcontained in the affidavits of respondents' witnesses, Vicente Niguidu

(Niguidula) and Gil Balais (Balais).[5]The petitioner labeled all of therespondents' accusations as completely baseless and sham, designe

to protect Niguidula and Balais who were the favorite boys ofrespondent Edgardo Quiogue (Quiogue), the Executive Vice Presidenof the respondent company. At the petitioner's request, the responden

company scheduled a formal hearing at 2:00 p.m. of May 28, 1996.However, the petitioner sent a notice that he would not participatewhen he learned through his wife that criminal cases forestafaandqualified theft had been filed against him at the Makati Prosecutor'sOffice. He felt that the hearing was a "moro-moro" investigation. On

May 24, 1996, the respondent company further charged the petitionewith "Violation of Company Code of Conduct," based on the affidavitsof Balais, Cristino Samarita (Samarita), and Jose Aying (Aying).[6]

On May 31, 1996, the respondent company issued a Notice ofDismissal to the petitioner based on the following grounds: [7]

1. Soliciting and/or receiving money for his own benefit fromsuppliers/dealers/traders Aying and Samarita, representing"commissions" for job contracts involving the repair,reconditioning and replacement of parts of the airconditioningunits at the company's Antipolo Station, as well as the installatioof fire exits at the Technology Centre;

2. Diversion of company funds by soliciting and receiving ondifferent occasions a total of P14,000.00 in "commissions" fromAying for a job contract in the company's Antipolo Station;

3. Theft of company property involving the unauthorized removal oone gallon of Delo oil from the company storage room;

4. Disrespect/discourtesy towards a co-employee, for usingoffensive language against Niguidula;

5. Disorderly behavior, for challenging Niguidula to a fight duringworking hours within company premises, thereby creating adisturbance that interrupted the normal flow of activities in thecompany;

6. Threat and coercion, for threatening to inflict bodily harm on theperson of Niguidula and for coercing Balais, a subordinate, into

soliciting money in his (the petitioner's) behalf fromsuppliers/contractors;

7. Abuse of authority, for instructing Balais to collect commissionsfrom Aying and Samarita, and for requiring Raul Pacaldo(Pacaldo) to exact 2%-5% of the price of the contracts awarded suppliers; and

8. Slander, for uttering libelous statements against Niguidula.The petitioner filed a complaint for illegal dismissal against therespondents with the National Labor Relations Commission (NLRC)Arbitration Branch in the National Capital Region. At the arbitration, hedenied committing the offenses charged. He maintained that: he couldnot encourage solicitation of commissions from suppliers consideringthat he was quite new in the company; the accusations are belated

because the imputed acts happened in 1995; the one gallon of Delo ohe allegedly carted away was at the room of Balais at the time, whichcircumstance he immediately relayed to Mandap; the affidavits ofNiguidula and Balais are not reliable because he had altercations withthem; in the first week of May 1996, he reprimanded Balais for incurrinunnecessary overtime work, which Balais resented; on May 9, 1996,Niguidula verbally assaulted and challenged him to a fight, which hereported to respondent Quiogue and to the Makati Police. Attached tothe petitioner's position paper were the affidavits[8]of Aying andRonalisa O. Rosana, a telephone operator of the company.

On April 30, 1999, Labor Arbiter Felipe Pati rendered a Decision in thepetitioner's favor, holding the respondent company liable for illegaldismissal.[9]Arbiter Pati disbelieved the affidavits of Niguidula, Balais,Pacaldo, Samarita, and Aying in view of the circumstances prior to theexecution. The Arbiter noted that Niguidula and Balais had altercation

with petitioner prior to the issuance of the notice of violation to thelatter; the affidavit of Samarita showed that it was not petitioner who


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personally asked commission from him but Balais; Aying's credibilityhad been placed in serious doubt because he recanted his previousaffidavit and issued another stating that the petitioner did not actuallyask commission from him; and Pacaldo's affidavit should not also bebelieved because he was a subordinate of Niguidula who had an ax togrind against the petitioner.

On appeal, the NLRC reversed the Labor Arbiter's decision andadopted the findings of Labor Arbiter Tamayo who had reviewed theappeal on the NLRC's instructions.[10]It ruled that Arbiter Pati erred indisregarding the affidavits of the respondents' witnesses.

The petitioner filed a motion for reconsideration which the NLRCgranted in a Resolution promulgated on September 20, 2002. [11]TheNLRC held that the charges against petitioner "were never reallysubstantiated other than by the `bare allegations' in the affidavits ofwitnesses" who were the company's employees and who hadaltercations with petitioner prior to the execution of their affidavits.

The NLRC turned down the motion for reconsideration that therespondent company subsequently filed.[12]The respondent companythus elevated the case to the CA viaa petition for certiorariunder Rule65 of the Rules of Court. The CA granted the petition in its Decisionpromulgated on May 25, 2004,[13]thereby effectively confirming thevalidity of the petitioner's dismissal. The appellate court found that theNLRC gravely abused its discretion when it disregarded the affidavits ofall the respondents' witnesses, particularly those of Balais, Samarita,Niguidula, and Pacaldo who were one in saying that the petitioner

demanded commissions from the company's job contractors. The CAobserved that it could not have been possible that Balais and Niguidula(who had previous altercations with the petitioner), and Samarita (whodid not previously know Quiogue) all committed perjury to executerespondent Quiogue's scheme of removing the petitioner from thecompany.

The petitioner moved but failed to secure a reconsideration of the CADecision; hence, he came to us through the present petition.

THE PETITIONThe petitioner submits that the CA erred when it acted as a trial courtand interfered without sufficient basis with the NLRC's findings. Citingour ruling in Cosmos Bottling Corporation v. NLRC, et al.,[14]he pointsout that factual findings of the NLRC, particularly when they coincide

with those of the Labor Arbiter, are accorded respect and finality andshould not be disturbed if they are supported by substantial evidence.

The petitioner points out, too, that Rule 65 of the Rules of Court findsfull application only when an administrative tribunal has acted withgrave abuse of discretion amounting to lack of or in excess ofurisdiction, or when such finding is not supported by the evidence. Heargues that the respondent company failed to raise any jurisdictionalquestion of jurisdiction or grave abuse of discretion before the CA.What the respondent company effectively sought from the CA, citingour ruling in Flores v. NLRC,[15]was a judicial re-evaluation of theadequacy or inadequacy of the evidence on record - an improperexercise of power outside the scope of the extraordinary writof certiorari.

The petitioner further argues that the CA erred when it substituted its

udgment for that of the Labor Arbiter and the NLRC who were the"triers of facts" who had the opportunity to review the evidenceextensively.

The petitioner theorizes that his termination from employment was ahatchet job maliciously concocted by the respondents, with Quiogue atthe helm. He had offended Quiogue when he questioned the latter'saward of the fire exit contract to Samarita; as a result, Quioguefabricated charges against him, using his underlings Niguidula andBalais. He particularly questions the charge that he conspired with hisfellow managers (such as Niguidula, Pacaldo and even PersonnelManager Mandap) in December 1995, and asks why his investigationand the supporting evidence came only in May 1996.

The petitioner likewise cites Aying's change of statement as evidencethat the respondents' charges have been concoctions. He belies thathe slandered and challenged Niguidula to a fight; it was in factNiguidula who had defamed him. He stresses that he complained in

writing to respondent Quiogue about the incident immediately after ithappened, copy furnished B. P. Mandap, F. A. Domingo and R. M.Moreno, the Personnel Manager, Head of Human Relations andPresident of the company, respectively. He likewise reported the matteto the police and to the barangay covering the workplace, and lodged complaint for grave oral defamation against Niguidula before the MakaProsecutor's Office. His co-employee, Ronalisa Rosana, corroboratedall these allegations. He points out that Niguidula never reported theincident to Quiogue or to anyone for that matter, thus, proving thefalsity of his (Niguidula's) complaint.

Finally, the petitioner draws attention to Quiogue's failure to act on his

complaint against Niguidula, only to resurrect it under the Notice ofViolation served on him on May 16, 1996.[16]This time, however,Niguidula was already the victim. As to the notice of violation itself, thepetitioner laments that although he was given 48 hours to explain,Quiogue, in bad faith, immediately filed complaints for estafaandqualified theft against him. Mandap even went to his residence andwarned his wife not to file charges against the company, or else,Quiogue would file cases against him in the regular courts.

THE CASE FOR THE RESPONDENTS

The respondents submit that the CA correctly ruled as the NLRCcommitted grave abuse of discretion when it flip-flopped in its factualfindings. They further stress that the positive testimonies of Balais,Pacaldo, and Samarita should be given credence over the negativetestimony of the petitioner. Even granting that the testimony ofNiguidula was tainted with malice and bad faith, the affidavit of Balais

should stand because no evidence supports the petitioner's claim thatBalais also had altercations with him before he (Balais) executed histwo affidavits.

With respect to the testimony of Samarita, the respondents point outthat Samarita stated in no uncertain terms that he was forced toincrease his quotation for the construction of the company fire exitsfrom P70,091.00 to P87,000.00 because the petitioner had asked forcommissions. The petitioner failed to rebut this. They brush aside theinsinuation that Samarita and Pacaldo suffer from bias as the petitionefailed to show by evidence that their personal interests led them tofavor the company.

The respondents lastly maintain that petitioner's claim - that Quiogueorchestrated the petitioner's dismissal after he (the petitioner)questioned Quiogue's award of a contract to Samarita Enterprises for questionable price - is not supported by evidence. They reiterate thegravity of the charges the petitioner faces; they constitute seriousmisconduct and fraud or willful breach of trust reposed in him by hisemployer and are just causes for termination of employment underArticle 282 of the Labor Code, as well as serious breaches of companrules and the trust reposed in him by the respondent company.

OUR RULINGAs a rule, and as recently held in Rudy A. Palecpec, Jr. v. Hon.

Corazon C. Davis, et al. [17](a 2007 case), this Court is not a trier offacts and can review a Rule 45 petition only on questions of law. We

wade, however, into questions of facts when there are substantialconflicts in the factual findings of the CA, on the one hand, and the tricourt or government agency concerned, on the other. This is preciselthe situation that we have before us since the NLRC and the CA hav

diametrically opposed factual findings leading to differing conclusionsHence, we are left with no option but to undertake a review of the fact

in this Rule 45 case.

We find the petition meritorious. To our mind, the CA erred in theappreciation of the evidence surrounding petitioner's termination fromemployment. The cited grounds are at best doubtful under the provensurrounding circumstances, and should have been interpreted in the

petitioner's favor pursuant to Article 4 of the Labor Code.

1. The petitionerhad not stayed long in the company and had not evepassed his probationary period when the acts charged allegedly tookplace.[18]This fact carries several significant implications. First, beingnew, his natural motivation was to make an early positive impression

on his employer. Thus, it is believable that as building administrator, hdiligently, zealously, and faithfully performed his tasks, working in

excess of eight hours per day to maintain the company buildings andfacilities in excellent shape; he even lent the company his personal


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tools and equipment to facilitate urgent repairs and maintenance workon company properties.[19]Second, because of his natural motivation as

a new employee and his lack of awareness of the dynamics ofrelationships within the company, he must have been telling the truth

when he said that he objected to the way the contract for theinstallation of fire escapes was awarded to Samarita. Third, his being

new somehow rendered doubtful the charge that he had alreadyencouraged solicitation of commission from suppliers, especially if

considered with the timing of the charges against him and theturnaround of witness Aying's testimony.

2. The relationships within the company at the time the charges were

filed showed that he was a stranger who might not have known thedynamics of company inter-relationships and might have stepped onthe wrong toes in the course of performing his duties.

Respondent Quiogue was the Executive Vice-President of thecompany,[20]a very powerful official with a lot of say in company

operations. Since Samarita was doing the fabrication of steel balustersfor Quiogue's home in New Manila, Quezon City,[21]there is a lot of

hidden dynamics in their relationship and it is not surprising thatSamarita testified against the petitioner. Both Samarita and Quioquehave motives to resent the petitioner's comments about the irregular

award of a contract to Samarita.

Mandap, as Personnel Manager, is a subordinate of Quiogue. Theproposal to secure commissions from company suppliers reportedly

took place in a very public gathering - a drinking session - in his house.

Why Mandap did not take immediate action when he knew of thealleged plan as early as December 1995 was never explained although

the petitioner raised the issue squarely.[22]The time gap - fromDecember 1995 to May 1996 - is an incredibly long time under the

evidence available and can be accounted for only by the fact that therewas no intention to terminate the services of the petitioner in

December; the motivation and the scheme to do this came onlysometime in April - May 1996 as the discussions below will show.

Niguidula, as Purchasing Manager, occupies a position that deals withsupplies and suppliers. He, not the petitioner, is one who might be

expected to be in the middle of all the actions regarding supply deals.He would not welcome a new and over-zealous building administrator

since the building facilities generate the need for supplies and thebuilding administrator is the end-user who can see how supplies are

procured and used. It is significant that Niguidula and the petitioner hada dispute regarding the accounting of company items and had a near-fight that "interrupted the normal flow of activities in the company."[23]

Pacaldo, a Purchasing Officer and a subordinate of Niguidula, underusual conditions would side with Niguidula. He and Niguidula, not thepetitioner, occupy the positions critical in the purchase of supplies forthe company and were the people who could exact commissions from

suppliers.

Balais is an air-con maintenance man whom petitioner reprimanded forunauthorized overtime work on an air-conditioning unit; for failure tomonitor a newly overhauled compressor unit contrary to standard

practice; and for over-pricing his purchases; and thus, Balais had everyreason to testify against the petitioner.[24]

As already mentioned, Aying - the contractor who had earlier testifiedagainst the petitioner - recanted his earlier statement that petitionerasked for commissions from him. [25]Aying, in his second statement,exonerated the petitioner.[26]This turnaround by itself is significant,more so if considered with other circumstances,[27]particularly the

possibility that the charges might have been orchestrated owing to theconfluence of the people who were allied against the petitioner, their

respective motivations and the timing of events.

3. The timing of the filing of charges was, as the petitioner pointed out,unusual. Indeed, if the proposal to solicit commissions had transpired in

December, the charges were quite late when they came in May.Interestingly, it was in April 1996 that the petitioner questioned the

soundness of respondent Quiogue's decision to award the fabricationand installation of six (6) units of fire escape to Samarita Enterprises

without observing company procedure of requiring at least three

quotations from suppliers and contractors.[28]The petitionerreprimanded air-con maintenance man Balais sometime in the first

week of May 1996 for unnecessary overtime work and the two had averbal altercation, an incident that the petitioner reported to

Quiogue.[29]On May 9, 1996, petitioner also had an altercation withNiguidula, the company's Purchasing Manager, who verbally assaulte

slandered, and challenged him to a fight, another incident which helikewise reported to Quiogue and to the Makati Police.[30]All these

strangely coincided with the time the charges were filed. Therespondents never successfully accounted for the coincidences.

All these considerations, to our mind, render the cited causes for thepetitioner's dismissal tenuous as the evidence supporting these

grounds come from highly suspect sources: they come either from

people who harbor resentment against the petitioner; those whosepositions have inherent conflict points with that of the petitioner; or fropeople with business dealings with the company. Thus, it was not

surprising for the NLRC to observe:From the above, the Commission believes that the Motion forReconsideration should be granted. Respondents' charges againstcomplainant were never substantiated by any evidence other than thebarefaced allegations in the affidavits of respondents' witnesses whoare employees of the company and who had an altercation withcomplainant prior to the execution of their affidavits and charges. Theother witnesses are contractors having business deals with respondencompany and in fact, Jose Aying has made a turn around and deniedthe complainant has been asking commission from him.Under the circumstances, we join the NLRC in concluding that theemployer failed to prove a just cause for the termination of thepetitioner's employment - a burden the company, as employer, carries

under the LaborCode[31]- and the CA erred when it saw grave abuse of discretion in thNLRC's ruling. The evidentiary situation, at the very least, brings to thefore the dictum we stated in Prangan v. NLRC[32]and in Ni cario v.NLRC[33]that "if doubts exist between the evidence presented by theemployer and the employee, the scales of justice must be tilted in favoof the latter. It is a time-honored rule in controversies between a laborand his master, doubts reasonably arising from the evidence, or in theinterpretation of agreements and writing should be resolved in theformer's favor."

WHEREFORE, premises considered, we hereby GRANTthe petition.Accordingly, we REVERSEand SET ASIDEthe Decision andResolution of the CA promulgated on May 25, 2004 and August 30,2004, respectively, andREINSTATEin all respects the Resolution ofthe National Labor Relations Commission dated September 20, 2002.Costs against the respondents.

SO ORDERED.

Quisumbing, (Chairperson), Carpio Morales, Tinga, andVelasco, Jr.,JJ.,Concur.3.

SECOND DIVISION

[ G.R. No. 177114, January 21, 2010 ]

MANOLO A. PEAFLOR, PETITIONER, VS. OUTDOOR CLOTHINMANUFACTURING CORPORATION, NATHANIEL T. SYFU,

PRESIDENT, MEDYLENE M. DEMOGENA , FINANCE MANAGER,

AND PAUL U. LEE, CHAIRMAN, RESPONDENTS.

D E C I S I O NBRION, J.:Petitioner Manolo A. Peaflor (Peaflor) seeks the reversal of the Couof Appeals (CA) decision[1]dated December 29, 2006 and itsresolution[2]dated March 14, 2007, through the present petition forreview on certiorarifiled under Rule 45 of the Rules of Court. Theassailed CA decision affirmed the September 24, 2002 decision [3]of thNational Labor Relations Commission (NLRC) that in turn reversed thAugust 15, 2001 decision[4]of the Labor Arbiter.[5]

THE FACTUAL ANTECEDENTS

Peaflor was hired on September 2, 1999 as probationary Human

Resource Department (HRD) Manager of respondent Outdoor ClothinManufacturing Corporation (Outdoor Clothing or the company). As HRhead, Peaflor was expected to (1) secure and maintain the right


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quality and quantity of people needed by the company; (2) maintain theharmonious relationship between the employees and management in arole that supports organizational goals and individual aspirations; and(3) represent the company in labor cases or proceedings. Two staffmembers were assigned to work with him to assist him in undertakingthese functions.

Peaflor claimed that his relationship with Outdoor Clothing went wellduring the first few months of his employment; he designed andcreated the company's Policy Manual, Personnel Handbook, JobExpectations, and Organizational Set-Up during this period. His woesbegan when the company's Vice President for Operations, Edgar Lee

(Lee), left the company after a big fight between Lee and ChiefCorporate Officer Nathaniel Syfu (Syfu). Because of his closeassociation with Lee, Peaflor claimed that he was among those whobore Syfu's ire.

When Outdoor Clothing began undertaking its alleged downsizingprogram due to negative business returns, Peaflor alleged that hisdepartment had been singled out. On the pretext of retrenchment,Peaflor's two staff members were dismissed, leaving him as the onlymember of Outdoor Clothing's HRD and compelling him to perform allpersonnel-related work. He worked as a one-man department, carryingout all clerical, administrative and liaison work; he personally went tovarious government offices to process the company's papers.

When an Outdoor Clothing employee, Lynn Padilla (Padilla), sufferednjuries in a bombing incident, the company required Peaflor to attend

to her hospitalization needs; he had to work outside office premises toundertake this task. As he was acting on the company's orders,Peaflor considered himself to be on official business, but wassurprised when the company deducted six days' salary correspondingto the time he assisted Padilla. According to Finance ManagerMedylene Demogena (Demogena), he failed to submit his trip ticket,but Peaflor belied this claim as a trip ticket was required only when acompany vehicle was used and he did not use any company vehiclewhen he attended to his off-premises work.[6]

After Peaflor returned from his field work on March 13, 2000, hisofficemates informed him that while he was away, Syfu had appointedNathaniel Buenaobra (Buenaobra) as the new HRD Manager. Thisnformation was confirmed by Syfu's memorandum of March 10, 2000to the entire office stating that Buenaobra was the concurrent HRD andAccounting Manager.[7]Peaflor was surprised by the news; he also feltbetrayed and discouraged. He tried to talk to Syfu to clarify the matter,but was unable to do so. Peaflor claimed that under thesecircumstances, he had no option but to resign. He submitted a letter toSyfu declaring his irrevocable resignation from his employment withOutdoor Clothing effective at the close of office hours on March 15,2000.[8]

Peaflor then filed a complaint for illegal dismissal with the laborarbiter, claiming that he had been constructively dismissed. Hencluded in his complaint a prayer for reinstatement and payment ofbackwages, illegally deducted salaries, damages, attorney's fees, andother monetary claims.

Outdoor Clothing denied Peaflor's allegation of constructive dismissal.t posited instead that Peaflor had voluntarily resigned from his work.

Contrary to Peaflor's statement that he had been dismissed fromemployment upon Syfu's appointment of Buenaobra as the new HRDManager on March 10, 2000, Peaflor had in fact continued working forthe company until his resignation on March 15, 2000. The companycited as evidence the security report that Peaflor himself prepared andsigned on March 13, 2000.[9]

Outdoor Clothing disclaimed liability for any of Peaflor's monetaryclaims. Since Peaflor had voluntarily resigned, Outdoor Clothingalleged that he was not entitled to any backwages and damages. Thecompany likewise denied making any illegal deduction from Peaflor'ssalary; while deductions were made, they were due to Peaflor's failureto report for work during the dates the company questioned. As aprobationary employee, he was not yet entitled to any leave credit thatwould offset his absences.

n his August 15, 2001 decision, the labor arbiter found that Peaflorhad been illegally dismissed.[10]Outdoor Clothing was consequently

ordered to reinstate Peaflor to his former or to an equivalent positionand to pay him his illegally deducted salary for six days, proportionate13thmonth pay, attorney's fees, moral and exemplary damages.

Outdoor Clothing appealed the labor arbiter's decision with the NLRC.It insisted that Peaflor had not been constructively dismissed, claiminthat Peaflor tendered his resignation on March 1, 2000 because hesaw no future with the corporation due to its dire financial standing.Syfu alleged that he was compelled to appoint Buenaobra asconcurrent HRD Manager through a memorandum dated March 1,2000 to cover the position that Peaflor would soon vacate.[11]Theappointment was also made to address the personnel matters that had

to be taken cared of while Peaflor was on unauthorized leave.Incidentally, Outdoor Clothing alleged that Peaflor had already beengiven two notices, on March 6 and 11, 2000 (absence without officialleave memoranda or theAWOL memoranda), for his unauthorizedabsences. In a memorandum dated March 3, 2000 addressed to SyfuBuenaobra accepted the appointment.[12]

Peaflor contested Syfu's March 1, 2000 memorandum, Buenaobra'sMarch 3, 2000 memorandum, and the AWOL memoranda, claimingthese pieces of evidence were fabricated and were never presentedbefore the labor arbiter. He pointed out that nothing in this resignationletter indicated that it was submitted to and received by Syfu on March1, 2000. He claimed that it was submitted on March 15, 2000, the samdate he made his resignation effective. The AWOL memoranda couldnot be relied on, as he was never furnished copies of these. Moreoverhe could not be on prolonged absence without official leave, as his

residence was just a few meters away from the office.

The NLRC apparently found Outdoor Clothing's submitted memorandsufficient to overturn the labor arbiter's decision.[13]It characterizedPeaflor's resignation as a response, not to the allegedly degradingand hostile treatment that he was subjected to by Syfu, but to OutdoorClothing's downward financial spiral. Buenaobra's appointment wasmade only after Peaflor had submitted his resignation letter, and thiswas made to cover the vacancy Peaflor's resignation would create.Thus, Peaflor was not eased out from his position as HRD manager.No malice likewise was present in the company's decision to dismissPeaflor's two staff members; the company simply exercised itsmanagement prerogative to address the financial problems it faced.Peaflor, in fact, drafted the dismissal letters of his staff members. Inthe absence of any illegal dismissal, no basis existed for the monetaryawards the labor arbiter granted.

Peaflor anchored his certioraripetition with the CA on the claim thatthe NLRC decision was tainted with grave abuse of discretion, althoughe essentially adopted the same arguments he presented before thelabor arbiter and the NLRC.

In a decision dated December 29, 2006, [14]the CA affirmed the NLRCdecision, stating that Peaflor failed to present sufficient evidencesupporting his claim that he had been constructively dismissed. The Cruled that Peaflor's resignation was knowingly and voluntarily made.Accordingly, it dismissed Peaflor's certioraripetition. It likewise deniethe motion for reconsideration that Peaflor subsequentlyfiled.[15]Faced with these CA actions, Peaflor filed with us the presenpetition for review on certiorari.

THE PARTIES' ARGUMENTS

Peaflor insists that, contrary to the findings of the NLRC and the CA,he had been constructively dismissed from his employment withOutdoor Clothing. He alleges that the dismissal of his two staffmembers, the demeaning liaison work he had to perform as HRDManager, the salary deduction for his alleged unauthorized absences,and the appointment of Buenaobra as the new HRD manager evenbefore he tendered his resignation, were clear acts of discriminationthat made his continued employment with the Outdoor Clothingunbearable. He was thus forced to resign.

Outdoor Clothing claims that Peaflor voluntarily resigned from hiswork and his contrary allegations were all unsubstantiated. The HRDwas not singled out for retrenchment, but was simply the first to lose itstaff members because the company had to downsize. Thus, all HRDwork had to be performed by Peaflor. Instead of being grateful that hwas not among those immediately dismissed due to the company's


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retrenchment program, Peaflor unreasonably felt humiliated inperforming work that logically fell under his department; insisted onhaving a full staff complement; absented himself from work withoutofficial leave; and demanded payment for his unauthorized absences.

THE ISSUE and THE COURT'S RULING

The Court finds the petition meritorious.

A preliminary contentious issue is Outdoor Clothing's argument that weshould dismiss the petition outright because it raises questions of facts,not the legal questions that should be raised in a Rule 45 petition.[16]

We see no merit in this argument as the rule that a Rule 45 petitiondeals only with legal issues is not an absolute rule; it admits ofexceptions. In the labor law setting, we wade into factual issues whenconflict of factual findings exists among the labor arbiter, the NLRC,and the CA. This is the exact situation that obtains in the present casesince the labor arbiter found facts supporting the conclusion that therehad been constructive dismissal, while the NLRC's and the CA's factualfindings contradicted the labor arbiter's findings.[17]Under this situation,the conflicting factual findings below are not binding on us, and weretain the authority to pass on the evidence presented and drawconclusions therefrom.[18]

The petition turns on the question of whether Peaflor's undisputedresignation was a voluntary or a forced one, in the latter case making ita constructive dismissal equivalent to an illegal dismissal. A critical fact

necessary in resolving this issue is wh ether Peaflor fi led his letterof resignat ion before or af ter the appointment of Bu enaobra as thenew/concurrent HRD manager .This question also gives rise to theside issue of when Buenaobra's appointment was made. If theresignation letter was submitted beforeSyfu's appointment ofBuenaobra as new HRD manager, little support exists for Peaflor'sallegation that he had been forced to resign due to the prevailingabusive and hostile working environment. Buenaobra's appointmentwould then be simply intended to cover the vacancy created byPeaflor's resignation. On the other hand, if the resignation letter wassubmitted afterthe appointment of Buenaobra, then factual basisexists indicating that Peaflor had been constructively dismissed as hisresignation was a response to the unacceptable appointment ofanother person to a position he still occupied.

The question of when Peaflor submitted his resignation letter arisesbecause this letter - undisputably made - was undated. DespitePeaflor's claim of having impressive intellectual and academiccredentials,[19]his resignation letter, for some reason,was undated. Thus, the parties have directly opposing claims on thematter. Peaflor claims that he wrote and filed the letter on the samedate he made his resignation effective - March 15, 2000. OutdoorClothing, on the other hand, contends that the letter was submitted onMarch 1, 2000, for which reason Syfu issued a memorandum of thesame date appointing Buenaobra as the concurrent HRD manager;Syfu's memorandum cited Peaflor's intention to resign so he coulddevote his time to teaching. The company further cites in support of itscase Buenaobra's March 3, 2000 memorandum accepting hisappointment. Another piece of evidence is the Syfu memorandum ofMarch 10, 2000, which informed the office of the appointment ofBuenaobra as the concurrent Head of HRD - the position that Peaflor

occupied. Two other memoranda are alleged to exist, namely, theAWOL memoranda of March 6 and 11, 2000, allegedly sent toPenaflor.

Several reasons arising directly from these pieces of evidence lead usto conclude that Peaflor did indeed submit his resignation letter onMarch, 15, 2000, i.e., on the same day that it was submitted.

First,we regard the Syfu memorandum of March 1, 2000 and thememorandum of Buenaobra of March 3, 2000 accepting the position ofHRD Head to be highly suspect. In our view, these memoranda, whiledated, do not constitute conclusive evidence of their dates ofpreparation and communication. Surprisingly, Peaflor was nevernformed about these memoranda when they directly concerned him,particularly the turnover of responsibilities to Buenaobra if indeedPeaflor had resigned on March 1, 2000 and a smooth turnover toBuenaobra was intended. Even the recipients of these communicationsdo not appear to have signed for and dated their receipt. The AWOL

memoranda, to be sure, should have been presented with proof ofservice if they were to have any binding effect on Peaflor.

Second,we find it surprising that these pieces of evidence pointing to aMarch 1, 2000 resignation - specifically, Syfu's March 1, 2000memorandum to Buenaobra about Penaflor's resignation andBuenaobra's own acknowledgment and acceptance - were only

presented to the NLRC on appeal, not before the labor arbiter. Thematter was not even mentioned in the company's position paper filedwith the labor arbiter. [20]While the presentation of evidence at theNLRC level on appeal is not unheard of in labor cases,[21]still sufficienexplanation must be adduced to explain why this irregular practice

should be allowed. In the present case, Outdoor Clothing totally failedto explain the reason for its omission. This failure, to us, is significant,as these were the clinching pieces of evidence that allowed the NLRCto justify the reversal of the labor arbiter's decision.

Third,the circumstances and other evidence surrounding Peaflor'sresignation support his claim that he was practically compelled toresign from the company.

Foremost among these is the memorandum of March 10, 2000 signedby Syfu informing the whole office ("To: All concerned") about thedesignation of Buenaobra as concurrent Accounting and HRDManager. In contrast with the suspect memoranda we discussedabove, this memorandum properly bore signatures acknowledgingreceipt and dates of receipt by at least five company officials, amongthem the readable signature of Demogene and one Agbayani; three o

them acknowledged receipt on March 13, 2000, showing that indeed iwas only on that day that the appointment of Buenaobra to the HRDposition was disclosed. This evidence is fully consistent with Peaflor'position that it was only in the afternoon of March 13, 2000 that he watold, informally at that, that Buenaobra had taken over his position. Itexplains as well why as late as March 13, 2000, Peaflor still preparedand signed a security report, [22]and is fully consistent with his positionthat on that day he was still working on the excuse letter of certainsales personnel of the company.[23]

We note that the company only belatedly questioned the motivationthat Peaflor cited for his discriminatory treatment, i.e., that he wascaught in the bitter fight between Syfu and Lee, then Vice President foOperations, that led the latter to leave the company.[24]After Lee left,Peaflor alleged that those identified with Lee were singled out foradverse treatment, citing in this regard the downsizing of HRD thatoccurred on or about this time and which resulted in his one-man HRDoperation. We say this downsizing was only "alleged" as the companytotally failed - despite Penaflor's claim of discriminatory practice - toadduce evidence showing that there had indeed been a legitimatedownsizing. Other than its bare claim that it was facing severe financiaproblems, Outdoor Clothing never presented any evidence to proveboth the reasons for its alleged downsizing and the fact of suchdownsizing. No evidence was ever offered to rebut Peaflor's claim thhis staff members were dismissed to make his life as HRD Headdifficult. To be sure, Peaflor's participation in the termination of hisstaff members' employment cannot be used against him, as thetermination of employment was a management decision that Peaflorat his level, could not have effectively contested without putting his ow

job on the line.

Peaflor's own service with the company deserves close scrutiny. Hestarted working for the company on September 2, 1999 so that byMarch 1, 2000, his probationary period would have ended and hewould have become a regular employee. We find it highly unlikely thatPeaflor would resign on March 1, 2000 and would then simply leavegiven his undisputed record of having successfully worked within hisprobationary period on the company's Policy Manual, PersonnelHandbook, Job Expectations, and Organizational Set-up. It does notappear sound and logical to us that an employee would tender hisresignation on the very same day he was entitled by law to beconsidered a regular employee, especially when a downsizing wastaking place and he could have availed of its benefits if he would beseparated from the service as a regular employee. It was strange, toothat he would submit his resignation on March 1, 2000 and keepcompletely quiet about this development until its effective date onMarch 15, 2000. In the usual course, the turnover alone of

responsibilities and work loads to the successor in a small companywould have prevented the matter from being completely under wraps


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for 10 days before any announcement was ever made. That Peaflorwas caught by surprise by the turnover of his post to Buenaobra is infact indicated by the company's own evidence that Peaflor stillsubmitted a security report on March 13, 2000. On the whole,Peaflor's record with the company is not that of a company officialwho would simply and voluntarily tender a precipitate resignation on theexcuse that he would devote his time to teaching - a lame excuse atbest considering that March is the month the semester usually endsand is two or three months away from the start of another school year.

n our view, it is more consistent with human experience that Peaflorndeed learned of the appointment of Buenaobra only on March 13,

2000 and reacted to this development through his resignation letterafter realizing that he would only face hostility and frustration in hisworking environment. Three very basic labor law principles support thisconclusion and militate against the company's case.

The first is the settled rule that in employee termination disputes, theemployer bears the burden of proving that the employee's dismissalwas for just and valid cause. [25]That Peaflor did indeed file a letter ofresignation does not help the company's case as, other than the fact ofresignation, the company must still prove that the employee voluntarilyresigned.[26]There can be no valid resignation where the act was madeunder compulsion or under circumstances approximating compulsion,such as when an employee's act of handing in his resignation was areaction to circumstances leaving him no alternative but to resign. [27]Insum, the evidence does not support the existence of voluntariness inPeaflor's resignation.

Another basic principle is that expressed in Article 4 of the Labor Code- that all doubts in the interpretation and implementation of the LaborCode should be interpreted in favor of the workingman.This principlehas been extended by jurisprudence to cover doubts in the evidencepresented by the employer and the employee. [28]As shown above,Peaflor has, at very least, shown serious doubts about the merits ofthe company's case, particularly in the appreciation of the clinchingevidence on which the NLRC and CA decisions were based. In suchcontest of evidence, the cited Article 4 compels us to rule in Peaflor'sfavor. Thus, we find that Peaflor was constructively dismissed giventhe hostile and discriminatory working environment he found himself in,particularly evidenced by the escalating acts of unfairness against himthat culminated in the appointment of another HRD manager withoutany prior notice to him. Where no less than the company's chiefcorporate officer was against him, Peaflor had no alternative but toresign from his employment.[29]

Last but not the least, we have repeatedly given significance inabandonment and constructive dismissal cases to the employee'sreaction to the termination of his employment and have asked thequestion: is the complaint against the employer merely a convenientafterthought subsequent to an abandonment or a voluntaryresignation? We find from the records that Peaflor sought almostmmediate official recourse to contest his separation from servicethrough a complaint for illegal dismissal.[30]This is not the act of onewho voluntarily resigned; his immediate complaints characterize him asone who deeply felt that he had been wronged.

WHEREFORE, we GRANT the petitioner's petition for reviewon certiorari, and REVERSE the decision and resolution of the Court of

Appeals in CA-G.R. SP No. 87865 promulgated on December 29, 2006and March 14, 2007, respectively. We REINSTATEthe decision of theabor arbiter dated August 15, 2001, with the MODIFICATIONthat, dueto the strained relations between the parties, respondents areadditionally ordered to pay separation pay equivalent to the petitioner'sone month's salary.

Costs against the respondents.SO ORDERED.Carpio, (Chairperson), Del Castillo, Abad,and Perez, JJ.,concur.

4.

THIRD DIVISION

[ G.R. No. 157098, June 30, 2005 ]

NORKIS FREE AND INDEPENDENT WORKERS UNION,PETITIONER, VS. NORKIS TRADING COMPANY, INC. ,

RESPONDENT.

D E C I S I O NPANGANIBAN, J.:Wage Order No. ROVII-06, issued by the Regional Tripartite Wagesand Productivity Board (RTWPB), merely fixed a new minimum wagerate for private sector employees in Region VII; hence, respondentcannot be compelled to grant an across-the-board increase to its

employees who, at the time of the promulgation of the Wage Order,were already being paid more than the existing minimum wage.

The Case

Before us is a Petition for Review[1]under Rule 45 of the Rules ofCourt, seeking to set aside the July 30, 2002 Decision[2]and theJanuary 16, 2003 Resolution[3]of the Court of Appeals (CA) in CA-GRSP No. 54611. The disposition of the assailed Decision reads asfollows:ACCORDINGLY, We GRANTthe instant petition for certiorari. TheDecision of public respondent Voluntary Arbitrator in VA Case No. 374VII-09-014-98E dated July 8, 1999, and Order dated August 13, 1999,denying petitioners Motion for Reconsideration, are hereby SETASIDE. Petitioner is hereby declared to have lawfully complied withWage Order No. ROVII-06. No pronouncement as to costs.[4]The Decision[5]of Voluntary Arbitrator Perfecto R. de los ReyesIII,[6]reversed by the CA, disposed as follows:WHEREFORE, premises considered, this Office hereby decides infavor of Complainant. Respondent is hereby ordered to grant itsemployees the amount of increases granted under RTWPB WageOrder ROVII-06 in an across-the-board manner retroactive to the dateprovided for under the said Wage Order.[7]The January 16, 2003 Resolution denied petitioners Motion forReconsideration.

The Facts

The CA summarized the undisputed factual antecedents as follows:The instant case arose as a result of the issuance of Wage Order NoROVII-06 by the Regional Tripartite Wages and Productivity Board

(RTWPB) increasing the minimum daily wage by P10.00, effectiveOctober 1, 1998.

Prior to said issuance, herein parties entered into a CollectiveBargaining Agreement (CBA) effective from August 1, 1994 to July 311999.

Sec. 1. Salary Increase. The Company shall grant a FIFTEEN(P15.00) PESOS per day increase to all its regular or permanentemployees effective August 1, 1994.

Sec. 2. Minimum Wage Law Amendment. In the event that a law ienacted increasing minimum wage, an across-the-boardincreaseshall be granted by the company according to the provisionsof the law.

On January 27, 1998, a re-negotiation of the CBA was terminated andpursuant to which a Memorandum of Agreement was forged betweenthe parties. It was therein stated that petitioner shall grant a salaryincrease to all regular and permanent employees as follows:

Ten (10) pesos per day increase effective August 1, 1997; Ten (10pesos per day increase effective August 1, 1998.

Pursuant to said Memorandum of Agreement, the employees receivewage increases of P10.00 per day effective August 1, 1997 and P10.0per day effective August 1, 1998. As a result, the agreed P10.00 re-negotiated salary increase effectively raised the daily wage of theemployees to P165.00 retroactive August 1, 1997; and anotherincrease of P10.00, effective August 1, 1998, raising the employees[]daily wage to P175.00.

On March 10, 1998, the Regional Tripartite Wage Productivity Board


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1

(RTWPB) of Region VII issued Wage Order ROVII-06 whichestablished the minimum wage of P165.00, by mandating a wagencrease of five (P5.00) pesos per day beginning April 1, 1998, therebyraising the daily minimum wage to P160.00 and another increase offive (P5.00) pesos per day beginning October 1, 1998, thereby raisingthe daily minimum wage to P165.00 per day.

In accordance with the Wage Order and Section 2, Article XII of theCBA, [petitioner] demanded an across-the-boardncrease. [Respondent], however, refused to implement the WageOrder, insisting that since it has been paying its workers the newminimum wageof P165.00 even before the issuance of the Wage

Order, it cannot be made to comply with said Wage Order.

Thus, [respondent] argued that long before the passage of WageOrder ROVII-06 on March 10, 1998, and by virtue of the Memorandumof Agreement it entered with herein [petitioner], [respondent] wasalready paying its employees a daily wage of P165.00 per dayretroactive on August 1, 1997, while the minimum wage at that timewas still P155.00 per day. On August 1, 1998, [respondent] againgranted an increase from P165.00 per day to P175.00, so that at thetime of the effectivity of Wage Order No. 06 on October 1, 1998prescribing the new minimum wage of P165.00 per day, [respondents]employees were already receiving P175.00 per day.

For failure of the parties to settle this controversy, a preventivemediation complaint was filed by herein [petitioner] before the NationalConciliation and Mediation Board, pursuant to which the parties

selected public respondent Voluntary Arbitrator to decide saidcontroversy.

Submitted for arbitral resolution is the sole issue of whether or not[respondent] has complied with Wage Order No. ROVII-06, in relationto the CBA provision mandating an across-the-board increase in caseof the issuance of a Wage Order.

In his decision, public respondent arbitrator found herein [respondent]not to have complied with the wage order, through the followingdispositions:

The CBA provision in question (providing for an across-the-boardncrease in case of a wage order) is worded and couched in a vagueand unclear manner.

x x x In order to judge the intention of the contracting parties, theircontemporaneous and subsequent acts shall be principally considered(Art. 1371, New Civil Code). Thus, this Office x x x required the partiesto submit additional evidence in order to be able to know and interpretthe parties working intent and application of Wage Order No. 06 issuedby the Regional Tripartite Wages and Productivity Board, RegionalOffice VII in relation to Section 2, Article XII provided for in the parties[]existing CBA.

x x x Viewed from the foregoing facts and evidence, the working intentand application of RTWPB Wage Order ROVII-06 in relation to Section2, Article XII of the parties[] existing CBA is clearly establ ished. Theevidence submitted by the parties, all point to the fact that their truentention on how to implement existing wage orders is to grant suchwage orders in an across-the-board manner in relation to the provisions

of Section 2, Article XII of their existing CBA. Respondent in this case[has] failed to comply with its contractual obligation of implementing thencrease under RTWPB Wage Order ROVII-06 in an across-the-boardmanner as provided in Section 2, Article XII of its CBA with [petitioner].

x x x x x x x x x[8]Respondent elevated the case to the CA via a Petition for Certiorariand Prohibition under Rule 65 of the Rules of Court.

Ruling of the Court of Appeals

The CA noted that the grant of an across-the-board increase, providedunder Section 2 of Article XII of the CBA, was qualified by the phraseaccording to the provisions of the law. It thus stressed the necessity ofdetermining the import of Wage Order No. ROVII-06, the law involvedn the present controversy. Taking into consideration the opinion of theRTWPB, Region VII, the appellate court held that respondent hadsufficiently complied with Wage Order No. ROVII-06. The Board had

opined that since adjustments granted are only to raise the minimumwage or the floor wage as a matter of policy, x x x wages granted ovethe above amount set by this Board is deemed a compliance.

The CA added that the policy and intent of the Wage Order was tocushion the impact of the regional economic crisis upon both theworkers and the employers, not to enrich the employees at theexpense of the employers. Further, it held that to compel respondentto grant an across-the-board wage increase, notwithstanding that it waalready paying salaries to its employees above the minimum wage,would be to penalize generous employers and effectively make themwait for the passage of a new wage order before granting any

increase. This would be counter-productive [insofar] as securing theinterests of labor is concerned.[9]

The appellate court said that the Wage Order exempted fromcompliance those enterprises already paying salaries equal to or morethan the prescribed minimum wage; thus, the Order effectively madethe previous voluntary increases given by respondent to its employeecreditable against the law-mandated increase. Consequently, therewas no need for the Collective Bargaining Agreement (CBA) to providexpressly for such creditability.

Finally, the CA sustained respondents explanation that the across-theboard increases provided in the CBA was required only when aminimum wage law caused a distortion in the wage structure.

Hence, this Petition.[10]

Issues

In its Memorandum, petitioner submits the following issues for ourconsideration:

I. Whether or not the Honorable Court of Appeals gravely abused itsdiscretion in setting aside the decision and resolution of the honorablevoluntary arbitrator[.]

II. Whether or not the Honorable Court of Appeals gravely abused itsdiscretion in considering the Supplemental Memorandum of respondeand giving merit to evidence presented for the first time on appeal andfiled after the lapse of the non[-]extendible period of time to filememorandum and despite an extension granted to respondent[.]

III. Whether or not the Honorable Court of Appeals gravely abused itsdiscretion in disregarding established jurisprudence on statutoryconstruction.[11]The main issue is whether respondent violated the CBA in its refusal tgrant its employees an across-the-board increase as a result of thepassage of Wage Order No. ROVII-06. Also raised is the proceduralissue relating to the propriety of the admission by the CA of RTWPBsletter-opinion, which was attached to respondents SupplementalMemorandum submitted to that court on August 30, 2000, beyond theJuly 17, 2000 extended deadline.

The Courts Ruling

The Petition lacks merit.

Main Issue:Effect of Wage Order No. ROVII-06

on the Parties CBA

Petitioner insists that respondent should have granted to theemployees the increase stated in Wage Order No. ROVII-06. Inaddition to the increases both parties had mutually agreed upon, theCBA supposedly imposed upon respondent the obligation to implementhe increases mandated by law without any condition orqualification. To support its claim, petitioner repeatedly invokesSection 2 of Article XII of the CBA, which reads:

SECTION 2. Minimum Wage Law Amendment. In the event that alaw is enacted increasing minimum wage, an across-the-boardincrease shall be granted by the Company according to the provisions

of the law.


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nterestingly, petitioner disregards altogether in its argument thequalifying phrase according to the provisions of the law and merelyfocuses its attention on the across-the-board increase clause. Giventhe entire sentence, it is clear that the above-quoted CBA provisiondoes not support the unyielding view of petitioner that the issuance ofWage Order No. ROVII-06 entitles its members to an across-the-boardncrease, absolutely and without any condition.

Stipulations in a contract must be read together, [12]not in isolation fromone another. When the terms of its clauses are clear and leave noroom for doubt as to the intention of the contracting parties, it would notbe necessary to interpret those terms, whose literal meanings should

prevail.

[13]

The CA correctly observed that the import of Wage Order No. ROVII-06should be considered in the implementation of the government-decreedncrease. The present Petition makes no denial or refutation of thisfinding, but merely an averment of the silence of the CBA on thecreditability of increases provided under the Agreement against thosen the minimum wage under a wage order. It insists that the partiesntended no such creditability; otherwise, they would have expresslystated such intent in the CBA.

We hold that the issue here is not about creditability, but theapplicability of Wage Order No. ROVII-06 to respondentsemployees. The Wage Order was intended to fix a new minimum wageonly, not to grant across-the-board wage increases to all employees inRegion VII. The intent of the Order is indicated in its title, Establishing

New Minimum Wage Rates, as well as in its preamble: the purpose,reason or justification for its enactment was to adjust the minimumwage of workers to cushion the impact brought about by the latesteconomic crisis not only in the Philippines but also in the Asian region.

n Cagayan Sugar Milling Company v. Secretary of Labor andEmployment[14]and Manila Mandarin Employees Union v.NLRC,[15]the Wage Orders that were the subjects of those cases weresubstantially and similarly worded as Wage Order No. ROVII-06. Inthose cases, this Court construed the Orders along the same line that itfollows now: as providing for an increase in the prevailing statutoryminimum wage rates of workers. No across-the-board increases weregranted.

Parenthetically, there are two methods of adjusting the minimum wage.n Employers Confederation of the Phils. v. National Wages and

Productivity Commission,[16]these were identified as the floor wageand the salary-ceiling methods. The floor wage method involves thefixing of a determinate amount to be added to the prevailing statutoryminimum wage rates. On the other hand, in the salary-ceilingmethod, the wage adjustment was to be applied to employeesreceiving a certain denominated salary ceiling. In other words, workersalready being paid more than the existing minimum wage (up to acertain amount stated in the Wage Order) are also to be given a wagencrease.

A cursory reading of the subject Wage Order convinces us that thentention of the Regional Board of Region VII was to prescribe aminimum or floor wage; not to determine a salary ceiling. Had theatter been its intention, the Board would have expressly providedaccordingly. The text of Sections 2 and 3 of the Order states:

Section 2.AMOUNT AND MANNER OF INCREASE. Upon theeffectivity of this Order, the daily minimum wage rates for all theworkers and employees in the private sector shall be increased by TenPesos (P10.00) per day to be given in the following manner:

. Five Pesos (P5.00) per day effective April 1, 1998, andi. Additional Five Pesos (P5.00) per day effective October 1, 1998.

Section 3. UNIFORM WAGE RATE PER AREACLASSIFICATION. To effect a uniform wage rate pursuant to Section1 hereof, the prescribed minimum wage after full implementation of thisOrder for each area classification shall be as follows:

Area Classification Non-Agriculture Sector Agriculture SectorClass A 165.00 150.00Class B 155.00 140.00

Class C 145.00 130.00Class D 135.00 120.00

These provisions show that the prescribed minimum wage after fullimplementation of the P10 increase in the Wage Order is P165 forClass A private non-agriculture sectors. It would be reasonable andlogical, therefore, to infer that those employers already paying theiremployees more than P165 at the time of the issuance of the Order arsufficiently complying with the Order.

Further supporting this construction of Wage Order No. ROVII-06 is thopinion of its drafter, the RTWPB Region VII. In its letter-opinion[17]answering respondents queries, the Board gave a similar

interpretation of the essence of the Wage Order: to fix a new floor wagor to upgrade the wages of the employees receiving lower than theminimum wage set by the Order.

Notably, the RTWPB was interpreting only its ownissuance, not astatutory provision. The best authority to construe a rule or anissuance is its very source,[18]in this case the RTWPB. Without adoubt, the Board, like any other executive agency, has the authority tointerpret its ownrules and issuances; any phrase contained in itsinterpretation becomes a part of those rules or issuancesthemselves.[19] Therefore, it was proper for the CA to consider theletter dated June 13, 2000, written by the RTWPB to explain the scopeand import of the latters own Order, as such interpretation is deemed part of the Order itself. That the letter was belatedly submitted to thatCourt is not fatal in the determination of this particular case.

We cannot sustain petitioner, even if we assume that its contention isright and that the implementation of any government-decreed increaseunder the CBA is absolute. The CBA is no ordinary contract, but oneimpressed with public interest.[20] Therefore, it is subject to specialorders on wages,[21]such as those issued by the RTWPB. CapitolWireless v. Bate[22]is squarely in point. The union in that case claimethat all government-mandated increases in salaries should be grantedto all employees across-the-board without any qualification whatsoevepursuant to the CBA provision that any government-mandated wageincreases should be over and above the benefits granted in theCBA. The Court denied such claim and held that the provisions of theAgreement should be read in harmony with the Wage Orders. Applyinthat ruling to the present case, we hold that the implementation of awage increase for respondents employees should be controlled by thestipulations of Wage Order No. ROVII-06.

At the risk of being repetitive, we stress that the employees are notentitled to the claimed salary increase, simply because they are notwithin the coverage of the Wage Order, as they were already receivingsalaries greater than the minimum wage fixed by theOrder. Concededly, there is an increase necessarily resulting fromraising the minimum wage level, but not across-the-board. Indeed, adouble burden cannot be imposed upon an employer except by cleaprovision of law.[23] It would be unjust, therefore, to interpret WageOrder No. ROVII-06 to mean that respondent should grant an across-the-board increase. Such interpretation of the Order is not sustainedby its text.[24]

In the resolution of labor cases, this Court has always been guided bythe State policy enshrined in the Constitution: social justice[25]and theprotection of the working class.[26] Social justice does not, however,

mandate that every dispute should be automatically decided in favor olabor. In every case, justice is to be granted to the deserving anddispensed in the light of the established facts and the applicable lawand doctrine.[27]

WHEREFORE, the Petition is DENIED, and the assailed Decision andResolution AFFIRMED. Costs against petitioner.

SO ORDERED.

Sandoval-Gutierrez, Corona, Carpio-Morales,and Garcia, JJ., concur

5.THIRD DIVISION


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Retail, service and agricultural establishments or operationsemploying not more than (10) employees or workers are exemptedfrom the coverage of this provision.

x x x x (emphasis and underscoring supplied)

Further, the Implementing Rules of said law provide:

RULE IIRetirement Benefits

SECTION 1.

General Statement on Coverage. -- This Rule shall apply to allemployees in the private sector, regardless of their position,

designation or status and irrespective of the method by whichtheir wages are paid, except to those specifically exempted underSection 2hereof. As used herein, the term "Act" shall refer to Republic

Act No. 7641 which took effect on January 7, 1993.

SECTION 2

Exemptions. -- This Rule shall not applyto the following employees:

2.1 Employees of the National Governmentand its politicalsubdivisions, including Government-owned and/or controlledcorporations, if they are covered by the Civil Service Law and itsregulations.

2.2 Domestic helpers and persons in the personal service of another.

2.3 Employees of retail, service and agricultural establishment oroperations regularly employing not more than ten (10) employees.As used in this sub-section;

x x x xSECTION 5

Retirement Benefits.

5.1 In the absence of an applicable agreement or retirement plan, anemployee who retires pursuant to the Act shall be entitled to retirementpay equivalent to at least one-half () month salary for every year ofservice, a fraction of at least six (6) months being considered as onewhole year.

5.2 Components of One-half () Month Salary.-- For the purposeof determining the minimum retirement pay due an employee under thisRule, the term "one-half month salary" shall include all of the following:

(a) Fifteen (15) days salary of the employee based on his latestsalary rate. As used herein, the term "salary" includes allremunerations paid by an employer to his employees for servicesrendered during normal working days and hours, whether suchpayments are fixed or ascertained on a time, task, piece ofcommission basis, or other method of calculating the same, andncludes the fair and reasonable value, as determined by the Secretaryof Labor and Employment, of food, lodging or other facilitiescustomarily furnished by the employer to his employees. The term doesnot include cost of living allowances, profit-sharing payments and othermonetary benefits which are not considered as part of or integrated into

the regular salary of the employees.

(b) The cash equivalent of not more than five (5) days of servicencentive leave;

(c) One-twelfth of the 13th month paydue the employee.

(d) All other benefitsthat the employer and employee may agreeupon that should be included in the computation of the employee'sretirement pay.

x x x x (emphasis supplied)Admittedly, petitioner worked for 14 years for the bus company whichdid not adopt any retirement scheme. Even if petitioner as busconductor was paid on commission basis then, he falls within the

coverage of R.A. 7641 and its implementing rules. As thus correctlyruled by the Labor Arbiter, petitioner's retirement pay should include thecash equivalent of the 5-day SIL and 1/12of the 13

thmonth pay.

The affirmance by the appellate court of the reliance by the NLRC on& E Transport, Inc. is erroneous. In said case, the Court held that ataxi driver paid according to the"boundary system" is not entitled to the 13thmonth and the SIL pahence, his retirement pay should be computed on the sole basis of hissalary.

For purposes, however, of applying the law on SIL, as well as onretirement, the Court notes that there is adifference between driverspaid under the "boundary system" and conductors who are paid oncommission basis.

In practice, taxi drivers do not receive fixed wages. They retain onlythose sums in excess of the "boundary" or fee they pay to the ownersor operators of the vehicles.[7] Conductors, on the other hand, are paia certain percentage of the bus' earnings for the day.

It bears emphasis that under P.D. 851 or the SIL Law, the exclusionfrom its coverage of workers who are paid on a purely commissionbasis is only with respect to field personnel. The more recent caseofAuto Bus Transport Systems, Inc., v. Bautista[8]clarifies that anemployee who is paid on purely commission basis is entitled to SIL:A careful perusal of said provisions of law will result in the conclusionthat the grant of service incentive leave has been delimited by theImplementing Rules and Regulations of the Labor Code to apply only those employees not explicitly excluded by Section 1 of RuleV. According to the Implementing Rules, Service Incentive Leave

shall not apply to employees classified as "field personnel." Thephrase "other employees whose pe

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