G.R. No.

119500 August 28, 1998 WHEREFORE, premises considered, the appeal

insofar as it seeks reversal of the finding on illegal
PAGUIO TRANSPORT dismissal is denied for lack of merit. The decision
CORPORATION, Petitioner, vs. NATIONAL declaring that complainant was illegally dismissed
LABOR RELATIONS COMMISSION and is affirmed. The decision is however partially
WILFREDO MELCHOR, Respondents. modified insofar as liability therefor is concerned.
The liability shall inure against PAGUIO
TRANSPORT CORPORATION, subject to the
provision of the Corporation Code and the Rules
PANGANIBAN, J.: of Court on matters taken herein. The backwages
as computed in the assailed decision is set aside,
In dismissing the petition, this Court reiterates and a new one is hereby provided in the amount
the following doctrines: (1) the "boundary of P86,400.00 as computed in the immediately
system" used in taxi (and jeepney) operations preceding paragraph.
presupposes an employer-employee relation; (2)
the employer must prove just (or authorized) Petitioner also impugns the February 21, 1995
cause and due process to justify dismissal of an NLRC Resolution 2 denying the motion for
employee; (3) strained relations must be reconsideration.
demonstrated as a fact; and (4) back wages and
reinstatement are necessary consequences of The June 28, 1994 Decision of the labor
illegal dismissal. arbiter, 3 which the NLRC modified as to the
amount of back wages, disposed as follows:
The Case
WHEREFORE, the respondents are hereby ordered
Before us is a petition for certiorari and to reinstate the complainant with full backwages
prohibition with preliminary injunction, assailing from the time his salaries were withheld from him
the December 16, 1994 Decision of the National until his actual reinstatement.
Labor Relations Commission 1 in NLRC NCR Case
No. 00-02-01564-94 entitled "Wilfredo Melchor The respondents are further ordered to pay him
vs. Paguio Transport Corporation/Serafin Paguio." his 13th month pay in the amount of P5,600.00.
The dispositive portion of the challenged Decision
reads:
Complainant's backwages up to the date of this the P650.00 boundary and other deductions
Decision as computed by LEILANI E. CALALANG of imposed on him. On 24 [sic] November 1993,
the Commission's NLRC NCR Branch is: complainant allegedly met a vehicular accident
along Quirino Avenue near the PNR Station and
11/28/93 - 6/28/94 = 7 mos. Plaza Dilao when he accidentally bumped a car
which stopped at the intersection even when the
P800.00 x 3 days x 4 weeks = P9,600.00 traffic light was green and go. After he submitted
the traffic accident report to the office of
P9,600.00 x 7 mos. = P67,200.00 respondents, he was allegedly advised to stop
working and have a rest. After several days[,] he
The aspect of reinstatement either in the job or allegedly reported for work only to be told that his
payroll at the option of the employers being service was no longer needed. Hence, the
immediately executory pursuant to Article 223 of complaint for illegal dismissal, among others.
the Labor Code, the respondents are hereby
directed to so reinstate him when he reports for Respondent[s] for their part maintained that
work by virtue of this Decision. complainant was not illegally dismissed, there
being in the first place no employer-employee
Other claims are hereby dismissed for lack of relationship between them. In amplification, it
evidence. was argued that the element of control which
[was] a paramount test to determine the
The Facts existence of such a relationship [was] lacking. So
too, it argued the element of the payment of
The facts, as summarized in the challenged compensation. Considering that in lieu of the
Decision, are as follows: latter, payment of boundary is instead made
allegedly makes the relationship between them of
Complainant Wilfredo Melchor was hired by a "wase-agreement" [sic]. Respondents then
respondent company as a taxi driver on 25 argued that even if an employer-employee
December 1992 under the "[b]oundary [s]ystem. relationship were to be presumed as present, still
He [was] engaged to drive the taxi unit assigned complainant's termination arose out of a valid
to him on a 24-hour schedule per trip every two cause and after he refused to articulate his stand
(2) days, for which he used to earn an average on the investigation being conducted on him.
income from P500 to P700 per trip, exclusive of Respondents then harped on the supposed three
occasions when complainant figured in a vehicular petitioner's claim that private respondent had
accident involving the taxi unit he was figured in three vehicular incidents because of his
driving, viz: On August 3, which resulted in reckless driving. It found that "except for
damages to the respondent in the amount of petitioner's bare statements, no proof was
P150.00; On August 4 which again resulted [in] presented to establish with particularity the
the damages to the respondent in the amount of circumstances being claimed. . . . The guilt and
P615.00; and, again on 4 November 1993, the culpability of [private respondent] which would
mishap costing the respondents this time give [petitioner] valid ground to effect his
P25,370.00 in damages. As a result of the alleged dismissal cannot be established by a mere
compounded damages which the respondents had allegation of his reckless driving." 8
to shoulder on account of the supposed reckless
driving of the complainant, the former was Public Respondent NLRC found petitioner liable for
allegedly left with no alternative but to ask back wages in the amount of P86,400, and not
complainant's explanation why he should still be P67,200 as computed by the labor arbiter. It
allowed to drive. Complainant, despite several found, however, that this liability should be
chances, allegedly failed to do so. 4 imposed on Petitioner Corporation only, and not
on its president who was also impleaded by
Ruling of the NLRC private respondent.

The NLRC held that private respondent was an Hence, this petition. 9

illegally dismissed employee of petitioner.

Upholding the existence of an employer-employee Issues
relationship, it cited Doce v. WCC, 5 in which the
Supreme Court ruled that "the relationship Petitioner raises the following issues:
created between the parties operating under a
'boundary system' is one of an employer and a. Whether or not public respondent Commission
employee, and not of a lessor and a lessee." 6 acted in excess of jurisdiction and/or with grave
abuse of discretion amounting to lack of
The NLRC sustained the ruling of the labor arbiter jurisdiction in ordering the reinstatement of
that the private respondent was illegally private respondent with full backwages, despite
dismissed, for he "was not afforded the twin its strained relations with the petitioner and the
requirements of due process . . . ." 7 It rejected reinstatement would, in effect, be inimical to the
interest of the latter in particular, and to the take. Therefore, he concludes that the employer-
riding public in general; employee relationship cannot be deemed to exist.

b. Whether or not public respondent acted in Petitioner's contention is not novel. In Martinez v.
excess of jurisdiction and/or with grave abuse of National Labor Relations Commission, 11 this
discretion in refusing to reconsider its decision Court already ruled that the relationship of taxi
and resolution complained of despite the facts owners and taxi drivers is the same as that
prevailing to support the reconsideration. 10 between jeepney owners and jeepney drivers
under the "boundary system." In both cases, the
In resolving the petition, we shall address the employer-employee relationship was deemed to
following points: (1) employer-employee relation, exist, viz.:
(2) presence of just cause, (3) due process, (4)
strained relationship, and (5) propriety of The relationship between jeepney
reinstatement and backwages. owners/operators on one hand and jeepney
drivers on the other under the boundary system is
The Court's Ruling that of employer-employee and not of lessor-
lessee. . . . In the lease of chattels[,] the lessor
The petition is not meritorious. loses complete control over the chattel leased . . .
. In the case of jeepney owners/operators and
First Issue: jeepney drivers, the former exercise supervision
Employer-Employee Relation and control over the latter. The fact that the
drivers do not receive fixed wages but get only
Under the "boundary system," private respondent the excess of that so-called boundary they pay to
was engaged to drive petitioner's taxi unit on a the owner/operator is not sufficient to withdraw
24-hour schedule every two days. On each such the relationship between them from that of
trip, private respondent remitted to petitioner a employer and employee. The doctrine is
"boundary" of P650. Whatever he earned in applicable in the present case. Thus, private
excess of that amount was considered his income. respondents were employees. . . because they
had been engaged to perform activities which
Petitioner argues that under said arrangement, he were usually necessary or desirable in the usual
had no control over the number of hours private trade or business of the employer. 12
respondent had to work and the routes he had to
 Second Issue: thereof and the resolution of the [c]ity
Just Cause [p]rosecutor of Quezon City finding private
respondent at fault for the November 4, 1993
Petitioner also asserts that private respondent's vehicular accident caused by the latter." 16 Adding
involvement in three vehicular accidents within a that the submission of these documents only on
span of several months constitutes just cause for appeal does not diminish their probative value,
his dismissal. It alleges that, according to the petitioner cites Article 221 of the Labor Code
police report concerning the most recent and which reads:
serious vehicular mishap, it was private
respondent who was at fault and that the "city Art. 221. Technical rules not binding and prior
prosecutor of Quezon City recommended that an resort to amicable settlement. - In any proceeding
Information for reckless imprudence resulting in before the Commission or any of the Labor
damage to property be filed against him." 13 Arbiters, the rules of procedure prevailing in
courts of law and equity shall not be controlling
Petitioner, however, did not submit any proof to and it is the spirit and intention of the Code that
support these allegations. Well-settled is the rule the Commission and its members and the Labor
that the employer has the burden of proving that Arbiters shall use every and all reasonable means
the dismissal of an employee is for a just cause. to ascertain the facts in each case speedily and
The failure of the employer to discharge this objectively without regard to technicalities of law
burden means that the dismissal is not justified and procedure, all in the interest of due process.
and that the employee is entitled to reinstatement In any proceeding before the Commission or any
and backwages. 14 In this case, petitioner failed to Labor Arbiter, the parties may be represented by
prove any just or authorized cause for his legal counsel but it shall be the duty of the
dismissal. Private respondent, therefore, must be Chairman, any Presiding Commissioner or
deemed illegally dismissed. 15 Commissioner or any Labor Arbiter to exercise
complete control of the proceedings at all stages.
Petitioner contends that he "submitted and
presented material and competent documentary Any provision of law to the contrary
evidence consisting of police reports of vehicular notwithstanding, the Labor Arbiter shall exert all
accidents of taxicab units owned by petitioner and efforts towards [t]he amicable settlement of a
driven by private respondent, the repairs and labor dispute within his jurisdiction on or before
expenses suffered by the petitioner as a result the first hearing. The same rule shall apply to the
Commission in the exercise of its original In certiorari proceedings under Rule 65 of the
jurisdiction. Rules of Court, judicial review by this Court does
not go so far as to evaluate the sufficiency of
However, a careful examination of both the evidence upon which the Labor Arbiter and the
original Complaint and the Petitioner's NLRC based their determinations, the inquiry
Memorandum of Appeal from the labor arbiter's being limited essentially to whether or not said
Decision reveals that said pieces of documentary public respondents had acted without or in excess
evidence were not mentioned or included of [their] jurisdiction or with grave abuse of
therein, 17 but were submitted by petitioner only discretion.
when he filed his present petition with this Court.
These pieces of evidence were attached and . . . Our deference to the expertise acquired by
referred to as Annexes "G", "H", "I", "J", "K" and quasi-judicial agencies and the limited scope
"L" of the said petition. Such factual issues cannot granted us in the exercise of certiorari jurisdiction
be resolved in a petition for certiorari like the restrain us from going so far as to probe into the
present case, because the Court's review of NLRC correctness of a tribunal's evaluation of evidence,
decisions is limited to questions of jurisdiction and unless there is a palpable mistake and complete
grave abuse of discretion. In PMI Colleges v. disregard thereof in which case certiorari would
NLRC, 18 the Court held: be proper. In plain terms,
in certiorari proceedings, we are concerned with
This Court is definitely not the proper venue to mere errors of jurisdiction and not errors of
consider this matter for it is not a trier of facts. . . judgment.
. Certiorari is a remedy narrow in its scope and
inflexible in character. It is not a general utility Equally devoid of correctness is petitioner's claim
tool in the legal workshop. Factual issues are not that the documents should be considered,
a proper subject for certiorari, as the power of the pursuant to Article 221 of the Labor Code which
Supreme Court to review labor cases is limited to stares that technical rules are not binding in
the issue of jurisdiction and grave abuse of proceedings before the labor arbiters and the
discretion. . . . . NLRC. The Supreme Court is not a trier of facts;
as earlier stated, its jurisdiction in a petition
Of the same tenor was our disquisition in Ilocos for certiorari, like the present case, is confined to
Sur Electric Cooperative, Inc. v. NLRC where we questions of jurisdiction and grave abuse of
made plain that: discretion. The unexplained failure of petitioner to
present its evidence before the labor arbiter and notices: (1) one to apprise him of the particular
the NLRC cannot compel this Court to expand the acts or omissions for which his dismissal is sought
scope of its review. Indeed, petitioner has not and (2) the other to inform him of his employer's
proffered a sufficient reason for this Court to do decision to dismiss him. As to the requirement of
so. a hearing, the essence of due process lies simply
in an opportunity to be heard, and not always and
Petitioner's reliance on Canete v. National Labor indispensably in an actual hearing. 20
Relations Commission 19 is misplaced. In that
case, the documents were submitted to the NLRC In the present case, petitioner failed to present
before they were tackled by the Supreme Court. proof, other than its bare allegations, that it had
complied with these requirements. 21 We
Private respondent's admission that he was reiterate: the burden of proof rests on the
involved in the November 4, 1993 accident did employer. Private respondent, in fact, was not
not give petitioner a just cause to dismiss him. given notice that he was being dismissed. When
Mere involvement in an accident, absent any ordered to explain the vehicular accident that
showing of fault or recklessness on the part of an happened on November 4, 1993, he was not
employee, is not a valid ground for dismissal. informed that petitioner was contemplating his
dismissal and that his involvement in said
Third Issue: vehicular accident was the cause thereof. Private
No Due Process respondent was merely asked to explain the
vehicular accident per se, not his defense against
Petitioner insists that private respondent was a charge of dismissal arising from the vehicular
accorded due process, because he was allowed to accident. He became aware of his employer's
explain his side and to show cause why he should intention to dismiss him only when he was
still be allowed to act as one of petitioner's actually told not to report for work anymore.
drivers.
Fourth Issue:
This does not persuade. The Court has Strained Relations
consistently held that in the dismissal of
employees, the twin requirements of notice and Notwithstanding its failure to prove just cause and
hearing are essential elements of due process. due process in the dismissal of private
The employer must furnish the worker two written respondent, petitioner seeks to bar his
reinstatement by invoking the doctrine of strained Complaint for illegal dismissal does not by itself
relations. It contends that as a result of private justify the invocation of this doctrine. As the Court
respondent's "reckless and incompetent manner held in Capili vs. NLRC: 24
of driving . . ., compounded by the damages
suffered by petitioner in terms of repairs, related . . . [T]he doctrine on "strained relations" cannot
expenses, and the institution of the instant case, be applied indiscriminately since every labor
the relationship between the parties are so dispute almost invariably results in "strained
strained as to preclude a harmonious working relations"; otherwise, reinstatement can never be
atmosphere to the prejudice of the petitioner as possible simply because some hostility is
well as private respondent." 22 engendered between the parties as a result of
their disagreement. That is human nature.
We are not persuaded. Strained relations must be
demonstrated as a fact. Petitioner failed to do so. Fifth Issue:
Its allegation that private respondent was Reinstatement and Back Wages
incompetent and reckless in his manner of
driving, which led to the his involvement in three Because he was illegally dismissed, private
vehicular accidents, is not supported by the respondent is entitled to reinstatement and back
records. As earlier noted, no evidence was wages pursuant to Section 279 of the Labor Code,
properly submitted by petitioner to prove or give which reads:
credence to his assertions. Thus, Respondent
NLRC ruled: Art. 279. Security of Tenure. - In cases of regular
employment, the employer shall not terminate the
Despite allegation on the matter, not an iota of services of an employee except for a just cause or
proof was presented to establish the claim. This when authorized by this Title. An employee who is
observation equally applies to the allegation that unjustly dismissed from work shall be entitled to
complainants, in three (3) occasions had figured reinstatement without loss of seniority rights and
in [a] vehicular accident due to his reckless other privileges and to his full backwages,
driving . . . . 23 inclusive of allowances, and to his other benefits
or their monetary equivalent computed from the
Because the claim of petitioner has no factual time his compensation was withheld from him up
basis, the doctrine on strained relations cannot be to the time of his actual reinstatement.
applied in this case. Moreover, the filing of the
Interpreting this provision, the Court held P7,200 x 12 months = P86,400.00. 27

in Bustamante v. NLRC 25 that illegally dismissed

employees are entitled to full back wages without Although the NLRC adjusted the amount of
conditions or limitations, viz.: private respondent's monthly income and the
period during which back wages may be awarded,
. . . [A] closer adherence to the legislative policy neither the petitioner nor the private respondent
behind Rep. Act No. 6715 points to "full questioned the new computation. Accordingly we
backwages" as meaning exactly that, i.e., without sustain the award but stress that the back wages
deducting from backwages the earnings derived ought to be computed from the time of the illegal
elsewhere by the concerned employee during the dismissal to the time of reinstatement, either
period of his illegal dismissal. In other words, the actual or in the payroll, without any deduction or
provision calling for "full backwages" to illegally qualification.
dismissed employees is clear, plain and free from
ambiguity and, therefore, must be applied without WHEREFORE, the petition is hereby DISMISSED
attempted or strained interpretation. for utter lack merit, and the assailed Decision and
Resolution are hereby AFFIRMED. Costs against
The labor arbiter awarded back wages in the sum petitioners.
of P67,200 based on the following computation:
SO ORDERED.
11/28/93 - 6/28/94 = 7 mos.

P800.00 x 3 days x 4 weeks = P6,600.00

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

In modifying the foregoing award, the NLRC relied

on this other formula:

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

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