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Contents[A.M. No. P-02-1629. September 11, 2002] ................................................................................................ 2

CONCERNED EMPLOYEE,complainant,vs. HELEN D. NUESTRO,

COURT STENOGRAPHER III, RTC, BRANCH 28, BAYOMBONG, NUEVA

VIZCAYA,respondent. ................................................................................................................................... 2

G.R. No. L-65786 July 16, 1984 ..................................................................................................................... 4

SINGAPORE AIRLINES LOCAL EMPLOYEES ASSOCIATION, and CECILIA

MATRIANO,petitioners, vs. NATIONAL LABOR RELATIONS

COMMISSION and SINGAPORE AIRLINES LIMITED,respondents. ................................................................ 4

SEVILLA TRADING COMPANY,petitioner, vs.A.V.A. TOMAS E.

SEMANA, SEVILLA TRADING WORKERS UNION

SUPER,respondents. ......................................................... 8

G.R. No. 81477 April 19, 1989 ..................................................................................................................... 14

DENTECH MANUFACTURING CORPORATION and JACINTO LEDESMA

in his capacity as General Manager,petitioners, vs. NATIONAL

LABOR RELATIONS COMMISSION, CCLU, BENJAMIN MARBELLA,

ARMANDO TORNO, JUANITO TAJAN, JR. and JOEL

TORNO,respondents. ................................................................................................................................. 14

G.R. No. 97346 March 23, 1992 .................................................................................................................. 18

RODOLFO YOSORES,petitioner, vs. EMPLOYEE'S COMPENSATION

COMMISSION,respondent. ........................................................................................................................ 18

GOLDEN ACE BUILDERS and ARNOLD U. AZUL, .......................................................................................... 20

Petitioners, .................................................................................................................................................. 20

- versus - ...................................................................................................................................................... 20

JOSE A. TALDE, ............................................................................................................................................ 20

Respondent. ....................................................................................................................

G.R. No. 187200 ..............................................................................................................

Present: ...........................................................................................................................

PUNO, C.J., Chairperson, ...............................................................................................

CARPIO MORALES, ..........................................................................................................

LEONARDO-DE CASTRO, ..................................................................................................

BERSAMIN, and ...............................................................................................................

VILLARAMA, JR.,JJ. .........................................................................................................

Promulgated:...................................................................................................................

May 5, 2010.....................................................................................................................

G.R. No. 110068 February 15, 1995 ................................................................................

PHILIPPINE DUPLICATORS, INC.,petitioner, vs. NATIONAL LABOR

RELATIONS COMMISSION and PHILIPPINE DUPLICATORS

EMPLOYEES UNION-TUPAS,respondents. .......................................................................

G.R. No. 92174 December 10, 1993 ................................................................................

BOIE-TAKEDA CHEMICALS, INC., petitioner, vs. .............................................................

HON. DIONISIO DE LA SERNA, Acting Secretary of the Department of

Labor and Employment, respondent. .............................................................................

G.R. No. L-102552 December 10, 1993 ...........................................................................

PHILIPPINE FUJI XEROX CORP., petitioner, vs. ...............................................................

CRESENCIANO B. TRAJANO, Undersecretary of the Department of

Labor and Employment, and PHILIPPINE FUJI XEROX EMPLOYEES

UNION, respondents. ......................................................................................................

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[A.M. No. P-02-1629. September 11, 2002]

CONCERNED EMPLOYEE,complainant,vs.

HELEN D. NUESTRO, COURT STENOGRAPHER

III, RTC, BRANCH 28, BAYOMBONG, NUEVA

VIZCAYA,respondent.

R E S O L U T I O N

PER CURIAM:

The instant administrative case stemmed from the letter-complaint dated March 1, 1999 filed with the Office of the Court

Administrator by a concerned employee against Helen D. Nuestro,Court Stenographer of the Regional Trial Court of Bayombong,Nueva Vizcaya, Branch 28 charging her with dishonesty. It is allegedtherein that respondent availed of maternity leave effective October1, 1998 to November 25, 1998

[1]although she did not get pregnant

nor delivered but merely adopted a child which the Nuestro couplewere able to register in their name with the local civil registrar.

Acting on the letter-complaint, Deputy Court Administrator

Bernardo T. Ponferrada referred the matter by way of 1stIndorsement dated April 23,1999 to Executive Judge Jose B.Rosales of the Regional Trial Court, Branch 28, Bayombong, NuevaViscaya and to make a discreet investigation thereon.

Based on his investigation, Executive Judge Rosales found thatthe Nuestro couple adopted a child whom they registered in theirname; that respondent filed an application for maternity leaveallegedly upon the advice of someone knowledgeable in law; thatrespondent subsequently tried to withdraw her application as shewas bothered by her conscience but failed; and that accordingly,

Executive Judge Rosales leaves the matter for appropriate action ofthe Court.

On September 18, 2000, respondent was required by the Officeof the Court Administrator to file her comment on the letter-complaintas well as on the findings of Executive Judge Rosales in hisinvestigation.

Respondent admits that she applied for maternity leave for aperiod of sixty (60) days effective September 1998 to October 1998;that she availed of the privilege after seeking the advice of someoneknowledgeable in the law; that her application for the said privilegewas occasioned by the overwhelming joy she experienced in havingan adopted child after eleven (11) years of marriage; that she was,however, bothered by her conscience so she tried to withdraw thesame but failed; and that she even filed an adoption case to correctthe simulated birth of the child.

Hence, respondent begs for utmost consideration andcompassion from the Court for her infraction. She also pleads to bespared the penalty of suspension or dismissal from service as shehas a family who depends on her for support.

Respondent has been in the government service sinceNovember 16, 1990 and should therefore be familiar with the CivilService Law and Rules. Sections 12, 13 and 14, Rule XVI of the CivilService Commission Resolution No. 91-1631

[2]explicitly provide that

only female married employees in every instance ofpregnancy andirrespective of its frequency can be granted maternity leave. Saidprovisions state:

Sec. 12. Marriedwomen in the government service who haverendered two (2) years or more of continuous service, shall, inaddition to the vacation and sick leave granted to them, be entitled tomaternity leave of sixty (60) days with full pay.

For those who have rendered less than two (2) years of governmentservice at the time of the enjoyment of maternity leave, thecomputation of their maternity leave pay shall be proportionate totheir length of service.

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Sec. 13. Maternity leave shall be granted to female marriedemployees inevery instance of pregnancy irrespective of itsfrequency.

Sec. 14. When an employee wants to report back to duty before the

expiration of her maternity leave, she may be allowed to do sowithout refunding the commuted money value of the unexpired

portion of her maternity leave and she shall be paid thecorresponding salary for the services rendered.

The act of filing an application for maternity leave whenrespondent never actually got pregnant constitutes dishonesty thatdeserves severe sanction from the Court. There is no need toremind respondent that she is an officer of the court and her conductand behavior must always be beyond reproach and circumscribedwith the heavy burden of responsibility.

[3]A public servant must

exhibit at all times the highest sense of honesty and integrity for no

less than the Constitution mandates the principle that a public officeis a public trust and all public officers and employees must at alltimes be accountable to the people, serve them with utmostresponsibility, integrity, loyalty and efficiency.

[4]As the administration

of justice is a sacred task, the persons involved in it ought to live upto the highest standards of honesty and integrity. Their conductmust, at all times, not only be characterized by propriety anddecorum but, above all, be above suspicion.

[5]This Court cannot

countenance any act or omission of any of its officers whichdiminishes or tends to diminish the faith of the people in the judiciary.

Her futile attempt to withdraw the fraudulent application for

maternity leave is no point in her favor because it was obviously anafterthought and a result of her fear of getting caught. Notablyrespondent even bragged before this complaint was filed about beingable to get around the law by successfully availing of maternity leaveeven without getting pregnant.

[6]She must not be allowed to get

away with it because of the bad example such a behavior will give toher co-employees and the bad image it will create for the judiciary.

Under the Omnibus Rules Implementing Book V of ExecutiveOrder No. 292, (Administrative Code of 1987), the penalty fordishonesty is dismissal, even for the first offense.

[7]Sec. 9 of the said

rule likewise provides that the penalty shall carry with it cancellation

of eligibility, forfeiture of leave credits and retirement benefits anddisqualification from reemployment in the government service.Further, it may be imposed without prejudice to criminal or civilliability.

Dishonesty is a malevolent act that has no place in the court

system. In the present case, respondents misconduct constitutesgrave dishonesty that disqualifies her from holding any position in the

judiciary. Her action is a blatant disregard for the values of integrity,uprightness and good conduct which are expected of all courtpersonnel without exception. The behavior of even minor employeesmirrors the image of the courts they serve, thus, they should at alltimes preserve the judiciarys good name and standing as a truetemple of justice.

[8]

The recommendation of the Office of the Court Administrator forsix (6) months suspension is therefore too lenient in view of thegravity of the offense charged. It may be true that the respondent

has been in the service for eleven years but she has blemished herrecord irreparably and, under the circumstances, we believe that herdismissal is warranted.

WHEREFORE, the Court finds respondent Court StenographerHelen D. Nuestro administratively liable for dishonesty and herebyresolves to DISMISS her from the service with forfeiture of all leavecredits and retirement benefits, if any, and with prejudice toreinstatement or re-employment in any branch, instrumentality oragency of the government including government-owned andcontrolled corporations.

SO ORDERED.

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G.R. No. L-65786 July 16, 1984

SINGAPORE AIRLINES LOCAL EMPLOYEES

ASSOCIATION, and CECILIA

MATRIANO,petitioners,

vs.

NATIONAL LABOR RELATIONS COMMISSION

and SINGAPORE AIRLINES

LIMITED,respondents.

Jose C. Espinas for petitioners.

The Solicitor General for respondent NLRC.

Bengzon, Zarraga, Narciso, Cudala & Pecson, Azcuna & Bengzonfor private respondent.

GUTIERREZ, JR., J. :

This is a petition for certiorari to review the decision of respondent

National Labor Relations Commission (NLRC) dated March 31,1982, dismissing the petitioner's appeal and affirming in toto theLabor Arbiter's decision to wit:

xxx xxx xxx

... Suffice it for us to state that the only provision inthe CBA granting maternity benefits is Article X ofthe said CBA. And it only grants maternity leavebenefits of 45 days. Really, if the intention of the

parties is for the company to undertake theexpenses incurred by way of caesarian or evennatural child birth, they could have easily provided itso in Article X of the CBA. Complainants are awareor should have been aware of this claimed benefit

from the CBA since they are participants to thecontract. Yet, they did not do anything about itduring the negotiation and conclusion of the CBA.For us therefore to interpret the provision of Article Xbeyond its simple and precise meaning wouldcertainly be sheer abuse of discretion on our part.

Singapore Airlines Limited is a foreign corporation duly licensed toengage in the business of common carrier in the Philippines.

Petitioner, Cecilia E. Matriano, on the other hand, is employed bySingapore Airlines Limited (hereinafter referred to as SIA) as a

telephone operator/receptionist.

On July 25,1981, a Collective Bargaining Agreement (CBA) wasconcluded between the complainant Singapore Airlines LocalEmployees-NTUAI-TRANSPIL-TUPAS (of which petitioner Matrianois a member) and respondent Singapore Airlines Limited. The CBAprovides among other things:

ARTICLE XI Hospitalization, Medical Care-Benefits

Section 1. The COMPANY will meet expenses up toP9,000.00 per calendar year for ward charges andsurgical fees in respect of each employee except asprovided in Section 3. ...

xxx xxx xxx

Section 3. The company shall not bear anyexpenses arising from any of the following:

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(a) illness or disablement arisingfrom attempted suicide theperformance o f any unlawful act,exposure to any unjustifiablehazards except when endeavoring

to save human life, provokedassault, the use of drugs other thanthose prescribed by theCOMPANY's doctors or other dulyqualified and registered medicalpractitioner or any breach of thepeace or disorderly conduct;

(b) where hospitalization isnecessary as a result of misconductor negligence on the part of theemployee.

In June 1981, petitioner Matriano underwent a caesarian operationfor which expenses were incurred amounting to P6,393.70representing hospital, medical, and surgical fees. Thereafter,Matriano filed a claim with SIA for reimbursement of said expensespursuant to Article XI of the CBA aforequoted. Respondent SIArefused, contending that Matriano is not entitled to hospitalizationand medical benefits under Article XI as its liability in maternity casesis limited to the maternity leave benefit provided in Article X of theCBA, which provides

ARTICLE X Maternity Leave Benefits

The COMPANY will grant maternity leave benefits offorty-five (45) days pursuant to PD 1202.

xxx xxx xxx

It is further contended that Article XI which, except for the amount ofbenefit, has been lifted from Paragraph 13 of the "Conditions forEmployment for Locally Engaged Staff in the Philippines" which wasadopted in toto, should receive the same interpretation as the latter,

traditionally understood to exclude maternity cases, the benefits forthe same being specifically provided for under Article X of the CBA inquestion.

On the other hand, petitioners are of the considered view that the

liability of SIA regarding maternity leaves, under Article X, isseparate and distinct from: the hospitalization benefits providedunder Article XI. As expressly agreed Upon in Article XVIII of theCBA, "Each article in this agreement is separate and independent:from the others and not to be construed as having' to have restrictiveeffect upon the meaning of the other." (page 30 of the CBA Theyalso contend that maternity cases, more specifically operations arenot among those mentioned as exceptions to Article X or thesewould have been so provided, if such was the intent.

Hence, upon SIA's refusal to grant the complainant's claim, theSingapore Airlines Employees' Association, in behalf of individual

complainant Matriano, charged SIA before Labor Arbiter SofronioOna with unfair labor practice for violation of the CBA.

The Labor Arbiter dismissed the case, stating that pregnancy cannotbe considered as sickness per se to entitle an employee to thehospitalization benefits under Article XI of the CBA.

On appeal the NLRC sustained the Labor Arbiter's decision, findingno basis for the charge of unfair labor practice. Hence, this petition.Two main issues are to be resolved, to wit:

(a) Whether or not under the CBApetitioner Matriano is entitled toreimbursement of her hospitalizationexpenses as a result of hercaesarian operation; and

(b) Whether or not respondents areguilty of unfair labor practice.

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We find no difficulty in disposing of the matter at hand. Theprovisions of the CBA in question are clear and from them we gatherthe intent of the contracting parties.

The very title of Article XI alone provides us with an answer to the

first issue raised. Borrowing a principle of statutory construction, it iswell-established that titles given to sections of an act or contract areof ' ten resorted to for the purpose of determining the scope of theprovisions and their relation to other portions of the act (Francisco,Statutory Construction, Second Edition, pp. 186-187). In very generalterms, Section 1, Article XI provides hospitalization and medical carebenefits. From the language of the Article in question, noqualification as to cause of confinement or need of medical care ismade. The contention that pregnancy or childbirth is not sickness perse so as to be reimbursable under the CBA is untenable. Article XIneither states nor implies that its provisions apply only to sickness. Infact, it speaks of "illness or disablement", for one may be

hospitalized not only for treatment of disease but also for injury,disability or incapacity.

The disputed CBA provision states that the "Company will meetexpenses up to P9,000 per calendar year for ward expenses andsurgical fees in respect of each employee ..." Undoubtedly, thehospitalization expenses of petitioner for her caesarian operation arecovered by the very wordings of the provision, as it involves surgery.To adopt respondent's strained interpretation would be to create anabsurd situation whereby an employee may no longer avail of thebenefits under Article XI when one is on vacation, sick, orcompassionate leave, which are also separated granted in the same

way that maternity leave benefits are provided as distinct privileges.Such a construction would, of course, be absurd, and yet therespondents would apply it to another form of leave. Reasonable andpractical interpretation must be placed on contractualprovisions. Interpretatio fienda est ut res magis valeat quam

pereat. Such interpretation is to be adopted, that the thing maycontinue to have efficacy rather than fail. (Martin v. Sheppard, 102 SCo. 2nd p. 1036; Adamonski v. Bord, AC Pa 193F 2d p. 578;Shimonek v. Tillanan 1 P: 2d 154; Almeda v. Florentino, G.R. No. L-23800, Dec. 21,1965).

Sick leave, maternity leave, and vacation leave benefits are intendedto be replacements for regular income which otherwise would not beearned because an employee is not working during the period of saidleaves. If an employee is on leave for 100 days, he gets his salaryfor 100 days without having to work during those days. There is

absolutely no connection between the expenditures for sickness,childbirth, or vacation trips and the amount of sick leave, maternityleave, or vacation petition leave benefits. Thus, if a company grantssick leave or full pay during the period when an employee is sick andat the same time grants hospital or medical expenses incurred as aresult of the sickness, there is no incongruity or conflict between thetwo types of privileges one is sick leave while the other is medicalbenefits. In the same manner, there is no conflict between maternityleave benefits which are nothing else but full salaries for 45 days inthis case and the hospitalization and surgical benefits for expensesincurred during the same period for hospitalization and surgery.

By analogy, qualified workers in the private sector are given sicknessbenefits under the Social Security Act, as amended, as well asmedicare benefits under the Medicare provisions of the Labor Code.Sickness benefits are intended to replace, even if only partially, lostincome during the period of sickness while medicare benefitspartially defray the cost of hospitalization and surgical care . Onebenefit does not exclude the other.

The above conclusion is bolstered by the fact that under the CBA inthis case, exceptions are specifically provided. The disputedcontingency of surgery and hospitalization does not come under theexceptions provided by Section 3 of Article XI which enumerates

specific instances to wit: "illness and disablement" arising fromillegal, immoral, wrongful, negligent, aggressive, or similar acts.None of these specify nor even remotely imply pregnancy orchildbirth. Had it been their purpose to exclude, then SIA shouldhave expressly excluded the two as it did in the CBA with itsemployees in Singapore. Not being so excepted, hospital andmedical care benefits due to pregnancy or childbirth arereimbursable under the general rule set by Article XI. Expressionunius est exclusion alterius (In re Estate of Enriquez, 29 Phil. 167;Gomez v. Ventura, 54 Phil. 726; Managat et al. v. Aquino, et al, 92Phil. 1025). Anything that is not included in an enumeration is

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excluded therefrom, and a meaning that does not appear nor isintended or reflected in the very language of the statute cannot beplaced therein.

Moreover, we cannot restrict the application of Article XI by

correlating it with another separate and independent Article onMaternity Leave. The parties have provided for a separability clauseunder Article XVIII of the CBA. They agreed that one article of theCBA cannot have a restrictive effect upon the meaning of anotherarticle.

Respondents also advance the argument that since the CBA inquestion was lifted, almost verbatim, from the "Conditions ofEmployment for Locally Engaged Staff in the Philippines", it shouldlikewise be interpreted as excluding maternity hospitalization andmedical care benefits. We do not agree. Petitioner's reasons are welltaken and we quote:

We beg to disagree. Firstly, Article XI provided fornon-hospitalization medical care and dental benefits(Sections 4 and 5) which were not in the "Conditionsof Employment". Secondly, since the said policy wasunilaterally promulgated by SIA, its implementationwas solely within the prerogative of SIA and theemployees could not do anything even if SIA did notfunny implement it by refusing to extendhospitalization and medical care benefits to itsemployees who were hospitalized because ofchildbirth. However, once the policy was

incorporated in a collective bargaining agreement,the employees thru their Union have as much rightas the Company in its proper implementation.

As a bilateral act and a result of long deliberation and dialoguebetween the parties, the CBA is law between the parties (Kapisananng mga Manggagawa sa La Suerte FOITAF v. Noriel, 77 SCRA 414;Batangas-Laguna Tayabas Bus Company v. Court of Appeals, 71SCRA 470; Philippine Apparel Workers' Union v. NLRC, 106 SCRA444). Having the force of law between the parties, obligations arising

therefrom should be complied with in good faith (De Cortes v.Venturanza, 79 SCRA 709).

Parenthetically, the Solicitor General, as counsel for the publicrespondent agrees that this petition is impressed with merit and

states:

Whether child birth is an illness or not is immaterial.Article XI of the CBA does not make a distinction.The only exceptions where hospitalization benefitsmay not be availed of are those enumerated inSection 3 of the same Article XI, relating toattempted suicide, use of drugs and those arisingfrom employees misconduct. Child birth not beingone of the excepted causes, it is therefore, includedin its coverage.

xxx xxx xxx

Finally, to exclude hospitalization expenses for childdelivery from the coverage of the said CBA provisionwould be a strained application that favors theemployer, negates the labor protection clause in theConstitution and runs counter to the pronouncementof this Honorable Court that the construction of laborlegislation and labor contracts should be in favor ofsafety and decent living of the laborer (PALEA v.PAL, 70 SCRA 214; Insular Lumber Co. v. C.A., 80SCRA 28; Phil. Apparel Workers' Union v. NLRC,

106 SCRA 444).

Despite a finding of petitioner's entitlement to her claim forreimbursement, we are not prepared to pronounce respondent SIAguilty of unfair labor practice. SIA's refusal to grant benefits was nota willful evasion of its obligations under the CBA but was due to anhonest mistake in the belief that the same is not covered by theaforementioned CBA provision. An error in interpretation withoutmalice or bad faith does not constitute unfair labor practice. We take

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judicial notice of the fact that honest d ifferences in construction mayarise in the actual application of contractual provisions.

WHEREFORE, the decision of the respondent Commission is herebyMODIFIED. The petition is granted insofar as petitioners' claim for

reimbursement is concerned. Private respondent Singapore AirlinesLimited is ordered to refund petitioner Cecilia Matriano the amount ofSIX THOUSAND THREE HUNDRED NINETY THREE PESOS andSEVENTY CENTAVOS (P6,393.70) representing hospital, medicaland surgical expenses which the latter had incurred during herpregnancy and childbirth. The respondent Commission's finding thatno unfair labor practice was committed is AFFIRMED.

SO ORDERED.

SEVILLA TRADING COMPANY,petitioner,

vs.A.V.A. TOMAS E. SEMANA, SEVILLA TRADING

WORKERS UNIONSUPER,respondents.

D E C I S I O N

PUNO, J .:

On appeal is the Decision[1]

of the Court of Appeals in CA-G.R.SP No. 63086 dated 27 November 2001 sustaining the Decision

[2]of

Accredited Voluntary Arbitrator Tomas E. Semana dated 13

November 2000, as well as its subsequent Resolution[3]

dated 06March 2002 denying petitioners Motion for Reconsideration.

The facts of the case are as follows:

For two to three years prior to 1999, petitioner Sevilla TradingCompany (Sevilla Trading, for short), a domestic corporationengaged in trading business, organized and existing under Philippinelaws, added to the base figure, in its computation of the 13

th-month

pay of its employees, the amount of other benefits received by the

employees which are beyond the basic pay. These benefitsincluded:

(a) Overtime premium for regular overtime, legal and specialholidays;

(b) Legal holiday pay, premium pay for special holidays;

(c) Night premium;

(d) Bereavement leave pay;

(e) Union leave pay;

(f) Maternity leave pay;

(g) Paternity leave pay;

(h) Company vacation and sick leave pay; and

(i) Cash conversion of unused company vacation and sick leave.

Petitioner claimed that it entrusted the preparation of the payrollto its office staff, including the computation and payment of the 13

th-

month pay and other benefits. When it changed its person in chargeof the payroll in the process of computerizing its payroll, and afteraudit was conducted, it allegedly discovered the error of including

non-basic pay or other benefits in the base figure used in thecomputation of the 13th-month pay of its employees. It cited the

Rules and Regulations Implementing P.D. No. 851 (13th-Month Pay

Law), effective December 22, 1975, Sec. 2(b) which stated that:

Basic salary shall includeall remunerations or earnings paid by anemployer to an employee for services rendered but may not includecost-of-living allowances granted pursuant to P.D. No. 525 or Letterof Instruction No. 174, profit-sharing payments, and all allowancesand monetary benefits which are not considered or integrated as part

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of the regular or basic salary of the employee at the time of thepromulgation of the Decree on December 16, 1975.

Petitioner then effected a change in the computation of thethirteenth month pay, as follows:

13th-month pay = net basic pay

12 months

where:

net basic pay = gross pay(non-basic pay or other benefits)

Now excluded from the base figure used in the computation of thethirteenth month pay are the following:

a) Overtime premium for regular overtime, legal and specialholidays;

b) Legal holiday pay, premium pay for special holidays;

c) Night premium;

d) Bereavement leave pay;

e) Union leave pay;

f) Maternity leave pay;

g) Paternity leave pay;

h) Company vacation and sick leave pay; and

i) Cash conversion of unused vacation/sick leave.

Hence, the new computation reduced the employees thirteenthmonth pay. The daily piece-rate workers represented by private

respondent Sevilla Trading Workers Union SUPER (Union, forshort), a duly organized and registered union, through the GrievanceMachinery in their Collective Bargaining Agreement, contested thenew computation and reduction of their thirteenth month pay. Theparties failed to resolve the issue.

On March 24, 2000, the parties submitted the issue of whetheror not the exclusion of leaves and other related benefits in thecomputation of 13

th-month pay is valid to respondent Accredited

Voluntary Arbitrator Tomas E. Semana (A.V.A. Semana, for short) ofthe National Conciliation and Mediation Board, for consideration andresolution.

The Union alleged that petitioner violated the rule prohibiting theelimination or diminution of employees benefits as provided for in

Art. 100 of the Labor Code, as amended. They claimed that paidleaves, like sick leave, vacation leave, paternity leave, union leave,bereavement leave, holiday pay and other leaves with pay in the

CBA should be included in the base figure in the computation of their13th-month pay.

On the other hand, petitioner insisted that the computation ofthe 13

th-month pay is based on basic salary, excluding benefits such

as leaves with pay, as per P.D. No. 851, as amended. It maintainedthat, in adjusting its computation of the 13

th-month pay, it merely

rectified the mistake its personnel committed in the previous years.

A.V.A. Semana decided in favor of the Union. The dispositiveportion of his Decision reads as follows:

WHEREFORE, premises considered, this Voluntary Arbitrator

hereby declared that:

1. The company is hereby ordered to include sick leave andvacation leave, paternity leave, union leave, bereavement leave andother leave with pay in the CBA, premium for work done on rest daysand special holidays, and pay for regular holidays in the computationof the 13

th-month pay to all covered and entitled employees;

2. The company is hereby ordered to pay correspondingbackwages to all covered and entitled employees arising from the

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exclusion of said benefits in the computation of 13th-month pay for

the year 1999.

Petitioner received a copy of the Decision of the Arbitratoron December 20, 2000. It filed before the Court of Appeals, a

Manifestation and Motion for Time to File Petition for Certiorarion January 19, 2001. A month later, on February 19, 2001, it filed itsPetition for Certiorari under Rule 65 of the 1997 Rules of CivilProcedure for the nullification of the Decision of the Arbitrator. Inaddition to its earlier allegations, petitioner claimed that assuming theold computation will be upheld, the reversal to the old computationcan only be made to the extent of including non-basic benefitsactually included by petitioner in the base figure in the computationof their 13

th-month pay in the prior years. It must exclude those non-

basic benefits which, in the first place, were not included in theoriginal computation. The appellate court denied due course to, anddismissed the petition.

Hence, this appeal. Petitioner Sevilla Trading enumerates thegrounds of its appeal, as follows:

1. THE DECISION OF THE RESPONDENT COURT TOREVERT TO THE OLD COMPUTATION OF THE 13

TH-

MONTH PAY ON THE BASIS THAT THE OLDCOMPUTATION HAD RIPENED INTO PRACTICE ISWITHOUT LEGAL BASIS.

2. IF SUCH BE THE CASE, COMPANIES HAVE NOMEANS TO CORRECT ERRORS IN COMPUTATIONWHICH WILL CAUSE GRAVE AND IRREPARABLEDAMAGE TO EMPLOYERS.

[4]

First, we uphold the Court of Appeals in ruling that the properremedy from the adverse decision of the arbitrator is a petition forreview under Rule 43 of the 1997 Rules of Civil Procedure, not apetition forcertiorariunder Rule 65. Section 1 of Rule 43 states:

RULE 43

Appeals from the Court of Tax Appeals and

Quasi-Judicial Agencies to the Court of Appeals

SECTION 1. Scope. This Rule shall apply to appeals fromjudgments or final orders of the Court of Tax Appeals and fromawards, judgments, final orders or resolutions of or authorized by

any quasi-judicial agency in the exercise of its quasi-judicialfunctions. Among these agencies are the Civil Service Commission,Central Board of Assessment Appeals, Securities and ExchangeCommission, Office of the President, Land Registration Authority,Social Security Commission, Civil Aeronautics Board, Bureau ofPatents, Trademarks and Technology Transfer, NationalElectrification Administration, Energy Regulatory Board, NationalTelecommunications Commission, Department of Agrarian Reformunder Republic Act No. 6657, Government Service InsuranceSystem, Employees Compensation Commission, AgriculturalInventions Board, Insurance Commission, Philippine Atomic EnergyCommission, Board of Investments, Construction Industry Arbitration

Commission, and voluntary arbitrators authorized by law.[Emphasis supplied.]

It is elementary that the special civil action of certiorariunderRule 65 is not, and cannot be a substitute for an appeal, where thelatter remedy is available, as it was in this case. Petitioner SevillaTrading failed to file an appeal within the fifteen-day reglementaryperiod from its notice of the adverse decision of A.V.A. Semana. Itreceived a copy of the decision of A.V.A. Semana on December 20,2000, and should have filed its appeal under Rule 43 of the 1997Rules of Civil Procedure on or before January 4, 2001. Instead,petitioner filed on January 19, 2001 a Manifestation and Motion for

Time to File Petition forCertiorari, and onFebruary 19, 2001, it fileda petition for certiorariunder Rule 65 of the 1997 Rules of CivilProcedure. Clearly, petitioner Sevilla Trading had a remedy ofappeal but failed to use it.

A special civil action under Rule 65 of the Rules of Court will notbe a cure for failure to timely file a petition for reviewon certiorariunder Rule 45 (Rule 43, in the case at bar) of the Rulesof Court. Rule 65 is an independent action that cannot be availed ofas a substitute for the lost remedy of an ordinary appeal, includingthat under Rule 45 (Rule 43, in the case at bar), especially if such

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loss or lapse was occasioned by ones own neglect or error in thechoice of remedies.

[5]

Thus, the decision of A.V.A. Semana had become final andexecutory when petitioner Sevilla Trading filed its petitionfor certiorarion February 19, 2001. More particularly, the decision of

A.V.A. Semana became final and executory upon the lapse of thefifteen-day reglementary period to appeal, or on January 5,2001. Hence, the Court of Appeals is correct in holding that it nolonger had appellate jurisdiction to alter, or much less, nullify thedecision of A.V.A. Semana.

Even assuming that the present petition for certiorariunder Rule65 of the 1997 Rules of Civil Procedure is a proper action, we stillfind no grave abuse of discretion amounting to lack or excess of

jurisdiction committed by A.V.A. Semana. Grave abuse ofdiscretion has been interpreted to mean such capricious andwhimsical exercise of judgment as is equivalent to lack of jurisdiction,

or, in other words where the power is exercised in an arbitrary ordespotic manner by reason of passion or personal hostility, and itmust be so patent and gross as to amount to an evasion of positiveduty or to a virtual refusal to perform the duty enjoined or to act at allin contemplation of law.

[6]We find nothing of that sort in the case at

bar.

On the contrary, we find the decision of A.V.A. Semana to besound, valid, and in accord with law and jurisprudence. A.V.A.Semana is correct in holding that petitioners stance of mistake orerror in the computation of the thirteenth month pay isunmeritorious. Petitioners submission of financial statements everyyear requires the services of a certified public accountant to audit its

finances. It is quite impossible to suggest that they have discoveredthe alleged error in the payroll only in 1999. This implies that inprevious years it does not know its cost of labor andoperations. This is merely basic cost accounting. Also, petitionerfailed to adduce any other relevant evidence to support itscontention. Aside from its bare claim of mistake or error in thecomputation of the thirteenth month pay, petitioner merely appendedto its petition a copy of the 1997-2002 Collective Bargaining

Agreement and an alleged corrected computation of the thirteenthmonth pay. There was no explanation whatsoever why its inclusion

of non-basic benefits in the base figure in the computation of their13

th-month pay in the prior years was made by mistake, despite the

clarity of statute and jurisprudence at that time.

The instant case needs to be distinguished from Globe MackayCable and Radio Corp. vs. NLRC,[7]which petitioner Sevilla Tradinginvokes. In that case, this Court decided on the proper computationof the cost-of-living allowance (COLA) for monthly-paidemployees. Petitioner Corporation, pursuant to Wage Order No. 6(effective 30 October 1984), increased the COLA of its monthly-paidemployees by multiplying the P3.00 daily COLA by 22 days, which isthe number of working days in the company. The Union disagreedwith the computation, claiming that the daily COLA rate of P3.00should be multiplied by 30 days, which has been the practice of thecompany for several years. We upheld the contention of thepetitioner corporation. To answer the Unions contention of companypractice, we ruled that:

Payment in full by Petitioner Corporation of the COLA before theexecution of the CBA in 1982 and in compliance with Wage OrdersNos. 1 (26 March 1981) to 5 (11 June 1984), should not beconstrued as constitutive of voluntary employer practice, whichcannot now be unilaterally withdrawn by petitioner. To beconsidered as such, it should have been practiced over a long periodof time, and must be shown to have been consistent and deliberate .. . The test of long practice has been enunciated thus:

. . . Respondent Company agreed to continue giving holidaypay knowing fully well that said employees are not covered by thelaw requiring payment of holiday pay. (Oceanic PharmacalEmployees Union [FFW] vs. Inciong, 94 SCRA 270 [1979])

Moreover, before Wage Order No. 4, there was lack of administrativeguidelines for the implementation of the Wage Orders. It was onlywhen the Rules Implementing Wage Order No. 4 were issued on 21May 1984 that a formula for the conversion of the daily allowance toits monthly equivalent was laid down.

Absent clear administrative guidelines, Petitioner Corporation cannotbe faulted for erroneous application of the law . . .

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In the above quoted case, the grant by the employer of benefitsthrough an erroneous application of the law due to absence of clearadministrative guidelines is not considered a voluntary act whichcannot be unilaterally discontinued. Such is not the case now. Inthe case at bar, the Court of Appeals is correct when it pointed out

that as early as 1981, this Court has held inSan Miguel

Corporation vs. Inciong[8]that:

Under Presidential Decree 851 and its implementing rules, the basicsalaryof an employee is used as the basis in the determination of his13

th-month pay. Any compensations or remunerations which are

deemed not part of the basic pay is excluded as basis in thecomputation of the mandatory bonus.

Under the Rules and Regulations Implementing Presidential Decree851, the following compensations are deemed not part of the basicsalary:

a) Cost-of-living allowances granted pursuant to Presidential Decree525 and Letter of Instruction No. 174;

b) Profit sharing payments;

c) All allowances and monetary benefits which are not considered orintegrated as part of the regular basic salary of the employee at thetime of the promulgation of the Decree on December 16, 1975.

Under a later set of Supplementary Rules and Regulations

Implementing Presidential Decree 851 issued by the then LaborSecretary Blas Ople, overtime pay, earnings and otherremunerations are excluded as part of the basic salary and in thecomputation of the 13

th-month pay.

The exclusion of cost-of-living allowances under Presidential Decree525 and Letter of Instruction No. 174 and profit sharing paymentsindicate the intention to strip basic salary of other payments whichare properly considered as fringe benefits. Likewise, the catch-allexclusionary phrase all allowances and monetary benefits which arenot considered or integrated as part o f the basic salary shows also

the intention to strip basic salary of any and all additions which maybe in the form of allowances or fringe benefits.

Moreover, the Supplementary Rules and Regulations ImplementingPresidential Decree 851 is even more empathic in declaring that

earnings and other remunerations which are not part of the basicsalary shall not be included in the computation of the 13

th-month pay.

While doubt may have been created by the prior Rules andRegulations Implementing Presidential Decree 851 which definesbasic salary to include all remunerations or earnings paid by anemployer to an employee, this cloud is dissipated in the later andmore controlling Supplementary Rules and Regulations whichcategorically, exclude from the definition of basic salary earnings andother remunerations paid by employer to an employee. A cursoryperusal of the two sets of Rules indicates that what has hitherto beenthe subject of a broad inclusion is now a subject of broad exclusion.

The Supplementary Rules and Regulations cure the seemingtendency of the former rules to include all remunerations andearnings within the definition of basic salary.

The all-embracing phrase earnings and other remunerations whichare deemed not part of the basic salary includes within its meaningpayments for sick, vacation, or maternity leaves, premium for worksperformed on rest days and special holidays, pay for regular holidaysand night differentials. As such they are deemed not part of thebasic salary and shall not be considered in the computation of the13

th-month pay. If they were not so excluded, it is hard to find any

earnings and other remunerations expressly excluded in the

computation of the 13th

-month pay. Then the exclusionary provisionwould prove to be idle and with no purpose.

In the light of the clear ruling of this Court, there is, thus noreason for any mistake in the construction or application of thelaw. When petitioner Sevilla Trading still included over the yearsnon-basic benefits of its employees, such as maternity leave pay,cash equivalent of unused vacation and sick leave, among others inthe computation of the 13

th-month pay, this may only be construed

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as a voluntary act on its part. Putting the blame on the petitionerspayroll personnel is inexcusable.

In Davao Fruits Corporation vs. Associated LaborUnions,we likewise held that:[9]

The Supplementary Rules and Regulations Implementing P.D. No.851 which put to rest all doubts in the computation of the thirteenthmonth pay, was issued by the Secretary of Labor as earlyas January 16, 1976, barely one month after the effectivity of P.D.No. 851 and its Implementing Rules. And yet, petitioner computedand paid the thirteenth month pay, without excluding the subjectitems therein until 1981. Petitioner continued its practice inDecember 1981, after promulgation of the aforequoted SanMigueldecision on February 24, 1981, when petitioner purportedlydiscovered its mistake.

From 1975 to 1981, petitioner had freely, voluntarily andcontinuously included in the computation of its employees thirteenthmonth pay, without the payments for sick, vacation and maternityleave, premium for work done on rest days and special holidays, andpay for regular holidays. The considerable length of time thequestioned items had been included by petitioner indicates aunilateral and voluntary act on its part, sufficient in itself to negateany claim of mistake.

A company practice favorable to the employees had indeed beenestablished and the payments made pursuant thereto, ripened intobenefits enjoyed by them. And any benefit and supplement being

enjoyed by the employees cannot be reduced, diminished,discontinued or eliminated by the employer, by virtue of Sec. 10 ofthe Rules and Regulations Implementing P.D. No. 851, and Art. 100of the Labor Code of the Philippines which prohibit the diminution orelimination by the employer of the employees existing benefits.[Tiangco vs. Leogardo, Jr., 122 SCRA 267 (1983)]

With regard to the length of time the company practice shouldhave been exercised to constitute voluntary employer practice whichcannot be unilaterally withdrawn by the employer, we hold that

jurisprudence has not laid down any rule requiring a specific

minimum number of years. In the above quoted case of DavaoFruits Corporation vs. Associated Labor Unions,[10]the companypractice lasted for six (6) years. In another case, Davao IntegratedPort Stevedoring Services vs. Abarquez,[11]the employer, forthree (3) years and nine (9) months, approved the commutation tocash of the unenjoyed portion of the sick leave with pay benefits ofits intermittent workers. While in Tiangco vs. Leogardo, Jr.,[12]theemployer carried on the practice of giving a fixed monthly emergencyallowance from November 1976 to February 1980, or three (3) yearsand four (4) months. In all these cases, this Court held that the grantof these benefits has ripened into company practice or policy whichcannot be peremptorily withdrawn. In the case at bar, petitionerSevilla Trading kept the practice of including non-basic benefits suchas paid leaves for unused sick leave and vacation leave in thecomputation of their 13

th-month pay for at least two (2) years. This,

we rule likewise constitutes voluntary employer practice whichcannot be unilaterally withdrawn by the employer without violating

Art. 100 of the Labor Code:

Art. 100. Prohibition against elimination or diminution of benefits. Nothing in this Book shall be construed to eliminate or in any waydiminish supplements, or other employee benefits being enjoyed atthe time of promulgation of this Code.

IN VIEW WHEREOF, the petition is DENIED. The Decision ofthe Court of Appeals in CA-G.R. SP No. 63086 dated 27 November2001 and its Resolution dated 06 March 2002 are hereby

AFFIRMED.

SO ORDERED.

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G.R. No. 81477 April 19, 1989

DENTECH MANUFACTURING CORPORATION

and JACINTO LEDESMA in his capacity asGeneral Manager,petitioners,

vs.

NATIONAL LABOR RELATIONS COMMISSION,

CCLU, BENJAMIN MARBELLA, ARMANDO

TORNO, JUANITO TAJAN, JR. and JOEL

TORNO,respondents.

GANCAYCO, J .:

The principal issue in this Petition is whether or not the privaterespondents are entitled as a matter of right to a 13th month pay.

The herein petitioner Dentech Manufacturing Corporation is adomestic corporation organized under Philippine laws. Before thefirm became a corporate entity, it was known as the J.L. LedesmaEnterprises, a sole proprietorship owned by the herein petitioner

Jacinto Ledesma. At present, he is the president and generalmanager of the corporation as well as the owner of the controllinginterest thereof. The firm is engaged in the manufacture and sale ofdental equipment and supplies.

The herein private respondents Benjamin Marbella, Armando Torno,Juanito Tajan, Jr. and Joel Torno are members of the Confederationof Citizens Labor Union, a labor organization registered with theDepartment of Labor and Employment. They used to be theemployees of the petitioner firm, working therein as welders,

upholsterers and painters. They were already employed with thecompany when it was still a sole proprietorship. They were dismissedfrom the firm beginning February 14, 1985.

On June 26, 1985, the private respondents filed a Complaint with the

arbitration branch of the respondent National Labor RelationsCommission (NLRC) against the petitioners for, among others, illegaldismissal and violation of Presidential Decree No. 851.

1They were

originally joined by another employee, one Raymundo Labarda, wholater withdrew his Complaint.

At first, they only sought the payment of their 13th month pay underPresidential Decree No. 851 as well as their separation pay, and therefund of the cash bond they filed with the company at the start oftheir employment. Later on, they sought their reinstatement as wellas the payment of their 13th month pay and service incentive leavepay, and separation pay in the event that they are not reinstated. It is

alleged in the Complaint and Position Paper accompanying the samethat they were dismissed from the firm for pursuing union activities.

2

On the other hand, the petitioners alleged in their Position Paper thatthe private respondents were not dismissed from the firm on accountof their union activities. They maintained that the private respondentsabandoned their work without informing the company about theirreasons for doing so and that, accordingly, the private respondentsare not entitled to service incentive leave pay and separation pay.

The petitioners also argued that the private respondents are notentitled to a 13th month pay. They maintained that each of the

private respondents receive a total monthly compensation of morethat Pl,000.00 and that under Section 1 of Presidential Decree No.851, such employees are not entitled to receive a 13th month pay.The petitioners likewise alleged that the company is in bad financialshape and that pursuant to Section 3 of the Decree, the firm isexempted from complying with the provisions of the Decree.

3

A hearing was conducted to allow the parties to further ventilate theirviews. Thereafter, the labor arbiter assigned to the case rendered a

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Decision dated January 28, 1987, the pertinent portions of which areas follows-

Noticeable in this case is that complainants initiallymade manifest their lack of intent to seek

reinstatement and their preference to collect theirseparation pay. Towards the end of (the)proceedings this was changed to preference forreinstatement ... . On the other hand, respondenthas indicated with sufficient clarity even at theinception of the case that it is charging complainantwith abandonment and is willing to accept them backto work. In short, while complainants supposedlywanted to report for work and respondents,supposedly ... willing to accept them back to work,we cannot imagine why the parties never achieved(an) understanding on this aspect.

In line with the above manifestation of the parties,we hereby order the reinstatement of complainants.We also find respondent's contention for exemptionin the payment of (the) 13th month pay as withoutvalidity (sic). The ceiling of P1,000.00 a month in thematter of 13th month pay has been removed andcomplainants are entitled to receive fromrespondents at least the unprescribed 13th monthpay for the last three years based on theiruncontroverted pleadings. This order includes themoney value of the service incentive leave pay of

complainants and the cash bond ... .

xxx xxx xxx

Premises considered, judgment is hereby renderedordering respondents to reinstate complainants totheir former positions, without backwages and to paythem the following amounts

1. Benjamin Marbella - P3,921.00

2. Armando Torno - 3,828.00

3. Juanito Tajan Jr. - 3,270.00

4. Joel Torno - 878.00

P1 1,897.00

xxx xxx xxx

All other claims are hereby dismissed.4

Both parties filed their respective appeals with the NLRC. Thepetitioners maintained that no provision of law was cited in theDecision of the labor arbiter to support the view therein that the 13thmonth pay ceiling of P1,000.00 had been duly eliminated. The

petitioners went on to reiterate that the firm is in bad financial shapeand is, therefore, exempted from complying with the provisions ofPresidential Decree No. 851. The petitioners added that the refund ofthe cash bond filed by the private respondents should not have beenordered by the labor arbiter inasmuch as the proceeds of the samehad already been given by the company to a certain carinderia

5topay for the outstanding accounts of the private respondents therein.

6

In a Resolution dated November 4,1987, the Third Division of theNLRC affirmed the Decision of the labor arbiter. The pertinentportions thereof are as follows-

The award of 13th month pay to the complainants isassailed by the respondents for the reason that noprovision of law was cited in the decision supportingthe statement that the ceiling of 13th month pay (sic)has been removed.

For the record, Memorandum Order No. 28 issuedby President Corazon C. Aquino modifiedPresidential Decree No. 851 to the extent that allemployers are ... (now) required to pay all their rank-

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and-file employees 13th month pay, thus in effectremoving from exclusion from entitlement to the (sic)13th month pay those employees who werereceiving a basic salary of more than P1,000.00 amonth.

At any rate the simple assertion of the respondentthat it is in financial distress and thus exempt (sic)from payment of 13th month pay (sic) to thecomplainants is not in itself sufficient to evadepayment of the 13th month pay to whichcomplainants were entitled prior to thecommencement of the respondent's financialproblems.

The cash bond required of complainants is likewisein direct contravention to (sic) the provisions of

Article 114 of the Labor Code, as amended. Thus,the refund of the cash bond appears to be in order.

7

On January 29, 1988, the petitioners elevated the case to this Courtby way of the instant Petition. The private respondents, however,decided not to challenge the Resolution of the NLRC.

The main pleading is erroneously captioned "Petition For Review OnCertiorari." This error notwithstanding, and in the interest of justice,this Court resolved to treat the instant Petition as a special civilaction for certiorari under Rule 65 of the Rules of Court on account ofa number of jurisdictional issues raised by the petitioners.

The petitioners reiterate their contention that the private respondentsabandoned their work. In support of this claim, they call attention tothe alleged testimony of the general manager of the petitionerfirm.

8The petitioners likewise maintain that the company is afinancially distressed firm exempted from complying with theprovisions of Presidential Decree No. 851.

9

The petitioners also contend that Memorandum Order No. 28 citedby the NLRC cannot apply to the case at bar. They point out that the

said Memorandum Order was signed into law only in 1986, long afterthe case was instituted with the NLRC and, accordingly, the samecannot be given a retroactive effect.

10It is likewise the position ofthe petitioners that the refund of the cash bond filed by the privaterespondents is improper inasmuch as the proceeds of the same hadalready been given to a certain carinderia to pay for the outstandingaccounts of the private respondents therein. 11

As instructed by the Court, the respondents filed their respectivecomments on the Petition. In seeking the dismissal of the Petition,the Solicitor General points out that each of the private respondentsis actually paid less than Pl,000.00 a month and that, accordingly,they are entitled to a 13th month pay pursuant to Presidential DecreeNo. 851. The Solicitor General also argues that under the rules andregulations implementing the said Decree, a distressed employershall qualify for exemption from the requirements of the Decree onlyupon prior authorization from the Secretary of Labor and

Employment. The Solicitor General manifests that no such priorauthorization had been obtained by the petitioner firm. The SolicitorGeneral likewise maintains that the Pl,000.00 ceiling recited inPresidential Decree No. 851 has been eliminated by PresidentialDecree No. 1364, promulgated on May 1, 1978.

12

As to the refund of the cash bond filed by the private respondents,the Solicitor General submits that such cash bond required from theprivate respondents is disallowed under Article 114 of the LaborCode.

13

After the parties submitted other supplementary pleadings, the Court

resolved to give due course to the Petition, and to consider the casesubmitted for decision.

The Petition is devoid of merit.

Presidential Decree No. 851 was signed into law in 1975 by thenPresident Ferdinand Marcos. Under the original provisions of Section1 thereof, all employers are required to pay all their employeesreceiving a basic salary of not more than Pl,000.00 a month,regardless of the nature of their employment, a 13th month pay not

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later than December 24 of every year. Under Section 3 of the rulesand regulations implementing said Presidential Decree financiallydistressed employers, i., e., those currently incurring substantiallosses, are not covered by the Decree. Section 7 thereof requires,however, that such distressed employers must obtain the priorauthorization of the Secretary of Labor and Employment before theymay qualify for such exemption.

On May 1, 1978, Presidential Decree No. 1364 was signed intolaw.

14The Decree enjoined the Department of Labor andEmployment to stop accepting applications for exemptionunder, inter alia, Presidential Decree No. 851.

On August 13, 1986, President Corazon C. Aquino issuedMemorandum Order No. 28 which modified Section 1 of PresidentialDecree No. 851. The said issuance eliminated the Pl,000.00 salaryceiling.

From the foregoing, it clearly appears that the petitioners have nobasis to claim that the company is exempted from complying with thepertinent provisions of the law relating to the payment of 13th monthcompensation.

The Pl,000.00 salary ceiling provided in Presidential Decree No. 851pertains to basic salary, not total monthly compensation. Thepetitioners admit that the private respondents work only five days aweek and that they each receive a basic daily wage of P40.00 only.

A simple computation of the basic daily wage multiplied by thenumber of working days in a month results in an amount of less than

Pl,000.00. Thus, there is no basis for the contention that thecompany is exempted from the provision of Presidential Decree No.851 which mandated the payment of 13th month compensation toemployees receiving less than P1,000.00 a month.

Even assuming, arguendo, that the private respondents are eachpaid a monthly salary of over Pl,000.00, the company is still not in aposition to claim exemption. The rules and regulations implementingPresidential Decree No. 851 provide that a distressed employer shallqualify for exemption from the requirements of the Decree only upon

prior authorization from the Secretary of Labor and Employment. Ascorrectly pointed out by the Solicitor General, no such priorauthorization had been obtained by the petitioner firm.

The refund of the cash bond filed by the private respondents is in

order. Article 114 of the Labor Code prohibits an employer fromrequiting his employees to file a cash bond or to make deposits,subject to certain exceptions, to wit-

Art. 114. Deposits for loss or damage.- No employershall require his worker to make deposits from whichdeductions shall be made for the reimbursement ofloss of or damage to tools, materials, or equipmentsupplied by the employer, except when the employeris engaged in such trades, occupations or businesswhere the practice of making deductions or requiringdeposits is a recognized one, or is necessary or

desirable as determined by the Secretary of Labor inappropriate rules and regulations.

The petitioners have not satisfactorily disputed the applicability ofthis provision of the Labor Code to the case at bar. Consideringfurther that the petitioners failed to show that the company isauthorized by law to require the private respondents to file the cashbond in question, the refund thereof is in order.

The allegation of the petitioners to the effect that the proceeds of thecash bond had already been given to a certain carinderia to pay forthe accounts of the private respondents therein does not merit

serious consideration. As correctly observed by the Solicitor General,no evidence or receipt has been shown to prove such payment.

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G.R. No. 97346 March 23, 1992

RODOLFO YOSORES,petitioner,

vs.EMPLOYEE'S COMPENSATION

COMMISSION,respondent.

GRIO-AQUINO, J .:

This petition seeks the review of the decision dated December 20,1990 of the Employees' Compensation Commission in ECC Case

No. 4827 entitled, "Rodolfo Yosores vs. Government ServiceInsurance System," affirming the decision of the System whichdenied petitioner's claim compensation benefits.

Rodolfo Yosores was employed by the GSIS for a period of twenty-five (25) years, commencing on May 3, 1963. He was doing electricalwork during the first ten (10) years until his assignment in 1973 asField Collection Officer, doing the rounds of GSIS mortagees indifferent areas of Metro Manila in the performance of his collectionwork.

On July 31, 1988, Yosores retired from the GSIS for total andpermanent disability. The cause of his disability, as indicated in hisclaim papers and approved by Cesar Alina (Senior Vice-President &Chairman of the Social Insurance Group) and by Dr. Orlando C. Misa(Vice-President & Medical Director), was Parkinson's Disease.

On August 9, 1988, he filed a claim for compensation benefits, butwas awarded disability benefits for only nine (9) months "due topulmonary tuberculosis." He asked for a reconsideration of the actiontaken on his claim. A re-evaluation was made by the GSIS MedicalEvaluation and Underwriting Group, which rendered a Report on

April 6, 1990, denying his request for reconsideration on the groundthat his ailment was not work-connected.

Not satisfied with the GSIS' decision he appealed to the Employees'Compensation cases (ECC Case No. 4827), praying for

compensation based on his actual ailment as diagnosed by thecompany physicians, citing two decided Employees' Compensationcases (ECC Case No. 1580 in favor of one Rufino Chungalao),where the Commission settled their respective claims by declaringtheir disabilities, caused by Parkinson's Disease, compensable, andthereby entitling each of them to benefits pursuant to PresidentialDecree No. 626.

On December 20, 1990, the Employees' Compensation Commissionrendered a decision upholding the adverse decision of GSIS. TheCommission ruled that:

As the foregoing medical findings suggest, theailment (Parkinson's Disease) has no causal relationwith the nature and working conditions of appellantas Field Collection Officer. Therefore, consideringthat the records are bereft of any evidence thatwould indicate that the risk of contracting hid ailmentwas increased by his working conditions, we areconstrained to rule against the compensability of theclaim. (pp. 35-36, Rollo.)

Hence, this recourse with the petitioner alleging that the respondentCommission erred:

1. in stating that the appellant "was already suffering fromParkinson's Disease as early as 1960 [before his employment] and .. . had already developed fine tremors of the extremities way back as1960, respectively," (p. 18, Rollo) having basis in fact or in law; and

2. in holding that the ailment of Parkinson's Disease has no causalrelation with the nature working conditions of the petitioner as fieldcollection officer.

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The petition is meritorious.

Parkinson's Disease or Parkinsonism, scientifically knownasparalysis agitans, is a core syndrome of the late middle life,occurring in most cases between the ages of 50 and 60, observed in

all countries, ethnic groups, socio-economic classes and in bothsexes, resulting from an excessive loss of melanin pigment anddegeneration of neurones in the substantia nigra, characterized byinvoluntary tremulous motion, with lessened muscular power in partsof the body which are not in action and even when supported, anexpressionless face, poverty and slowness of voluntary movement,stooped posture, rigidity and festinating gait, the senses and intellectbeing uninjured. Researches have proven that the rate ofparkinsonian tremor is increase by emotional excitement anddisappears during sleep. Trauma, emotional upset, overworkexposure to cold, etc., have been suggested as predisposing orexciting factors. Further research on the diagnosis of the cause of

parkinsonism mentions the existence of arteriosclerotic parkinsonism(Principles of Neurology by Raymonds Adams & Maurice Victor, pp.874-875; Brains Clinical Neurology by Sir Roger Bannister, pp. 339-342; Current Medical Diagnosis & Treatment, 199 Ed. by StevenSchroeder, Marcus Krupp & Lawrence Tierney, Jr., pp. 594-597).

Although there is no known treatment that will halt or reverse theneuronal degeneration that presumably underlies this disease,methods are available which can afford considerable relief from itssymptoms. It is, for now, merely possible to replace for a time someof the transmitter deficiency, thus making the symptoms moretolerable for a number of years.

As field collection officer during the years 1973 to 1988, thepetitioner performed collection work around Metro Manila, f rom eighto'clock in the morning to four o'clock in the afternoon (when he wouldreturn to the office to prepare his daily collection report) for five daysa week and for fifteen long years. He commuted in all kinds of publictransport, and was subjected to the elements of nature and to allkinds of risks. The petitioner's attending physician also attested tothe fact that in 1967 (four years after entering the governmentservice) he constracted essential hypertension with tremors,insomnia, and anxiety neurosis (p. 29, Rollo).

The Court is unable to accept the sweeping statement in the ECCdecision that the disease has no causal relation with the nature andworking conditions of Yosores' job, for it is not improbable that therewere factors affecting his work as a field collection officer, coupledwith the hypertension which he contracted in the course of hisemployment, which may have constituted "predisposing or excitingfactors" in the development of the disease. This conclusion findsaffirmation in the ECC's decisions in the cases of Francisco Samuray(ECC Resolution No. 1580 dated August 21, 1980) and RufinoChungalao (ECC Resolution No. 3041 dated October 5, 1988). Thefollowing observation of the ECC in the case of Chungalao isrelevant:

. . . said official's development of HypertensiveCardiovascular Disease, which triggerd his ailmentof Basal Ganglia (Parkinson's Disease) as theevidence on record had borne out substantially, was

directly causally job-connected and that the samerisk exacerbated by employment conditions. (p.42,Rollo.)

We cannot see how Chungalao's case can be any different from thecase at bar. Yosores, who spent the prime years of his life as a GSISemployee, is entitled to the same beneficial consideration from theGovernment. We, therefore, hold that petitioner's debilitating ailmentwhich caused his total and permanent disability is compensableunder the employees' compensation program in P.D. No. 626.

WHEREFORE, the appealed decision of the respondent Employees'

Compensation Commission is hereby REVERSED and the claim ofthe petitioner, Rodolfo Yosores, for total and permanent disabilitybenefits is approved. Let the records of this case be remanded to theGovernment Service Insurance System for computation andpayment of the benefits due the petitioner under P.D. 626, asamended.

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GOLDEN ACE BUILDERS

and ARNOLD U. AZUL,

Petitio

ners,

- versus -

G.R. No. 187200

Present:

PUNO, C.J., Chairper

son,

CARPIO MORALES,

LEONARDO-DE

CASTRO,

BERSAMIN, and

VILLARAMA, JR.,JJ.

JOSE A. TALDE,

Respondent.

Promulgated:

May 5,

2010

x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - --x

D E C I S I O N

CARPIO MORALES, J. :

Jose A. Talde (respondent) was hired in 1990 as a carpenter

by petitioner Golden Ace Builders of which its co-petitioner Arnold

Azul (Azul) is the owner-manager. In February 1999, Azul, alleging

the unavailability of construction projects, stopped giving work

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assignments to respondent, prompting the latter to file a

complaint[1]

for illegal dismissal.

By Decision[2]

of January 10, 2001, the Labor Arbiter ruled in

favor of respondent and ordered his immediate reinstatement without

loss of seniority rights and other privileges, and with payment of full

backwages, which at that time was computed at P144,382.23,

and the amount of P3,236.37 representing premium pay for rest

days, service incentive leave pay and 13thmonth pay.

Pending their appeal to the National Labor Relations

Commission (NLRC) and in compliance with the Labor Arbiters

Decision, petitioners, through counsel, advised respondent to report

for work in the construction site within 10 days from receipt

thereof. Respondent submitted, however, on May 16, 2001 a

manifestation[3]

to the Labor Arbiter that actual animosities existed

between him and petitioners and there had been threats to his life

and his familys safety, hence, he opted for the payment ofseparation pay. Petitioners denied the existence of any such

animosity.

Meanwhile, the NLRC dismissed petitioners appeal by

Resolution[4]

of April 22, 2002, holding that respondent was a regular

employee and not a project employee, and that there was no valid

ground for the termination of his services. Petitioners motion for

reconsideration was denied by Resolution[5]

of August 6, 2002.

Petitioners appeal to the Court of Appeals was dismissed by

Decision[6]

of August 12, 2004 which attained finality on September

15, 2004.

As an agreement could not be forged by the parties on the

satisfaction of the judgment, the matter was referred to the Fiscal

Examiner of the NLRC who recomputed at P562,804.69 the amount

due respondent, which was approved by the Labor Arbiter by

Order

[7]

of July 5, 2005. A writ of execution

[8]

dated July 8, 2005 wasthereupon issued.

Finding the amount exorbitant, petitioners filed a motion for

reconsideration with the NLRC, contending that since respondent

refused to report back to work, he should be considered to have

abandoned the same, hence, the recomputation of the wages and

benefits due him should not be beyond May 15, 2001, the date when

he manifested his refusal to be reinstated.

By Resolution[9]

of March 9, 2006, the NLRC granted

petitioners motion and accordingly vacated the computation. It held

that since respondent did not appeal the Decision of the Labor

Arbiter granting him only reinstatement and backwages, not

separation pay in lieu thereof, he may not be afforded affirmative

http://sc.judiciary.gov.ph/jurisprudence/2010/may2010/187200.htm#_ftn1http://sc.judiciary.gov.ph/jurisprudence/2010/may2010/187200.htm#_ftn1http://sc.judiciary.gov.ph/jurisprudence/2010/may2010/187200.htm#_ftn1http://sc.judiciary.gov.ph/jurisprudence/2010/may2010/187200.htm#_ftn2http://sc.judiciary.gov.ph/jurisprudence/2010/may2010/187200.htm#_ftn2http://sc.judiciary.gov.ph/jurisprudence/2010/may2010/187200.htm#_ftn2http://sc.judiciary.gov.ph/jurisprudence/2010/may2010/187200.htm#_ftn3http://sc.judiciary.gov.ph/jurisprudence/2010/may2010/187200.htm#_ftn3http://sc.judiciary.gov.ph/jurisprudence/2010/may2010/187200.htm#_ftn4http://sc.judiciary.gov.ph/jurisprudence/2010/may2010/187200.htm#_ftn4http://sc.judiciary.gov.ph/jurisprudence/2010/may2010/187200.htm#_ftn5http://sc.judiciary.gov.ph/jurisprudence/2010/may2010/187200.htm#_ftn5http://sc.judiciary.gov.ph/jurisprudence/2010/may2010/187200.htm#_ftn5http://sc.judiciary.gov.ph/jurisprudence/2010/may2010/187200.htm#_ftn6http://sc.judiciary.gov.ph/jurisprudence/2010/may2010/187200.htm#_ftn6http://sc.judiciary.gov.ph/jurisprudence/2010/may2010/187200.htm#_ftn7http://sc.judiciary.gov.ph/jurisprudence/2010/may2010/187200.htm#_ftn7http://sc.judiciary.gov.ph/jurisprudence/2010/may2010/187200.htm#_ftn7http://sc.judiciary.gov.ph/jurisprudence/2010/may2010/187200.htm#_ftn8http://sc.judiciary.gov.ph/jurisprudence/2010/may2010/187200.htm#_ftn8http://sc.judiciary.gov.ph/jurisprudence/2010/may2010/187200.htm#_ftn9http://sc.judiciary.gov.ph/jurisprudence/2010/may2010/187200.htm#_ftn9http://sc.judiciary.gov.ph/jurisprudence/2010/may2010/187200.htm#_ftn9http://sc.judiciary.gov.ph/jurisprudence/2010/may2010/187200.htm#_ftn9http://sc.judiciary.gov.ph/jurisprudence/2010/may2010/187200.htm#_ftn8http://sc.judiciary.gov.ph/jurisprudence/2010/may2010/187200.htm#_ftn7http://sc.judiciary.gov.ph/jurisprudence/2010/may2010/187200.htm#_ftn6http://sc.judiciary.gov.ph/jurisprudence/2010/may2010/187200.htm#_ftn5http://sc.judiciary.gov.ph/jurisprudence/2010/may2010/187200.htm#_ftn4http://sc.judiciary.gov.ph/jurisprudence/2010/may2010/187200.htm#_ftn3http://sc.judiciary.gov.ph/jurisprudence/2010/may2010/187200.htm#_ftn2http://sc.judiciary.gov.ph/jurisprudence/2010/may2010/187200.htm#_ftn1

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relief; and since he refused to go back to work, he may recover

backwages only up to May 20, 2001, the day he was supposed to

return to the job site. Respondents motion for reconsideration was

denied by the NLRC by Resolution[10]

of June 30, 2006, hence, he

filed a petition for certiorari with the Court of Appeals.

By Decision[11]

of September 10, 2008, the appellate court set

aside the NLRC Resolutions, holding that respondent is entitled to

both backwages and separation pay, even if separation pay was not

granted by the Labor Arbiter, the latter in view of the strained

relations between the parties. The appellate court disposed:

WHEREFORE, in view of all the foregoingpremises, judgment is hereby rendered byus GRANTINGthe petition filed in this case. Theassailed RESOLUTIONSdated 30, 2006 and March9, 2006 of the NLRC are hereby SET ASIDE.

Thus, the full backwages and separation payto be awarded to the petitioner shall be computed asfollows:

Full Backwages as of June 30,2005 = P562,804.69

Separation Pay:P220.00 x 26 days = P5,720,00P5,720/month x 8

years = 45,760.00

P608,564.69

We also award an additional 10% of the totalmonetary award by way of attorneys fees for theexpenses incurred by the petitioner to protect his

rights and interests. Furthermore, when the decisionof this Court as to the monetary award becomesfinal and executory, the rate of legal interest shall beimposed at 12% per annum from such finality until itssatisfaction, this interim period being deemed to beby then an equivalent to a forbearance of credit.

SO ORDERED. (emphasis in the original)

Petitioners motion for reconsideration was denied by

Resolution[12]

of March 12, 2009, hence, the present petition for

review on certiorari.

Petitioners assail the appellate courts award of separation

pay. They assailed too as contrary to prevailing jurisprudence the

computation of backwages from the time of dismissal up to actual

reinstatement. They contend that, in effect, the appellate court

modified an already final and executory decision.

The petition fails.

The basis for the payment of backwages is different from

that for the award of separation pay. Separation pay is granted

where reinstatement is no longer advisable because of strained

relations between the employee and the employer. Backwages

represent compensation that should have been earned but were not

collected because of the unjust dismissal. The basis for computing

backwages is usually the length of the employees service while that

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for separation pay is the actual period when the employee was

unlawfully prevented from working.[13]

As to how both awards should be computed, Macasero v.

Southern Industrial Gases Philippines[14]

instructs:

[T]he award of separation pay isinconsistent with a finding that there was no illegaldismissal, for under Article 279 of the Labor Codeand as held in a catena of cases, an employee whois dismissed without just cause and without dueprocess is entitled to backwages andreinstatementor payment of separation pay in lieu thereof:

Thus, an illegallydismissed employee is entitled totwo reliefs: backwages andreinstatement. The two reliefsprovided are separate anddistinct. In instances wherereinstatement is no longer feasiblebecause of strained relationsbetween the employee and theemployer, separation pay isgranted. In effect, an illegallydismissed employee is entitled toeither reinstatement, if viable, orseparation pay if reinstatement is nolonger viable, and backwages.

The normalconsequences of respondentsillegal dismissal, then, arereinstatement without loss ofseniority rights, and payment ofbackwages computed from the

time compensation was withheldup to the date of actualreinstatement. Wherereinstatement is no longer viableas an option, separation payequivalent to one (1) monthsalary for every year of serviceshould be awarded as analternative. The payment ofseparation pay is in addition topayment ofbackwages. (emphasis, italics andunderscoring supplied)

Velasco v. National Labor Relations

Commission emphasizes:

The accepted doctrine is that separationpay may avail in l ieu of reinstatementif reinstatement is no longer practical or in thebest interest of the parties. Separation pay in lieuof reinstatement may likewise be awarded if theemployee decides not to be reinstated. (emphasisin the original; italics supplied)

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Under the doctrine of strained relations, the payment of

separation pay is considered an acceptable alternative to

reinstatement when the latter option is no longer desirable or

viable. On one hand, such payment liberates the employee from

what could be a highly oppressive work environment. On the other

hand, it releases the employer from the grossly unpalatable

obligation of maintaining in its employ a worker it