MANLY EXPRESS INC.

 G.R. No. 167462

and SIU ENG T. CHING,
Petitioners, Present:
Davide, Jr., C.J. (Chairman),
- versus - Quisumbing,
Ynares-Santiago,
Carpio, and
Azcuna, JJ.
ROMUALDO PAYONG, JR.,
Respondent. Promulgated:
 
October 25, 2005
x ---------------------------------------------------------------------------------------- x
 
DECISION
 
 
YNARES-SANTIAGO, J.:
 
 
This petition for review on certiorari under Rule 45 of the Rules of Court
assails the November 22, 2004 Decision of the Court of Appeals [1] in CA-G.R.
SP No. 83800, as well as the February 28, 2005 Resolution[2] denying the
motion for partial reconsideration.
 
The facts as found by the Court of Appeals are as follows:
 
 The simple relevant facts of the case show that petitioners
Hercules Balena and Romualdo Payong, Jr. were employed by
Manly Express, Inc. and/or Siy Eng T. Ching on different dates, as
tour coordinator (dispatcher) and welder, respectively.
 
Balena alleged that during his employment, he demanded
from his employer the payment of correct employees benefits.
Nevertheless, every time he made the demand, he was told not to
report for work anymore if he is not contented with the wages he
was receiving. Then, herein private respondents called Balenas
attention on his tardiness in work. As a result, on May 16, 2000,
Balena commenced a case for constructive dismissal, payment of
salaries, overtime pay, holiday pay, back wages, leave pay,
13th month pay and attorneys fees.
 
Petitioner Romualdo Payong, Jr. has another story to tell.
Sometime in December 1999, he was complaining of eyesight
problems. Brought to an eye specialist by private respondent
Ching, he was diagnosed to be suffering from eye cataract.
Despite having the cataract removed in January of 2000, he was
disallowed to return to his work by Ching. Much later, on August
1, 2000, he was given a letter of termination of employment.[3]
 
The full text of the termination letter[4] reads:
 
01 August 2000
 
Dear Mr. Romualdo Payong Jr.,
 
Our company has been severely affected by the prevailing poor
business climate. There is a reduced demand for our bus services
both for shuttle and city operations and this has substantially
reduced our income. At the same time, our operating costs have
increased, leaving us with a difficult cash position.
 
In order to survive, the company has decided to check on the
performance of all its employees to determine productivity.
Unfortunately, it has been noticed that due to your partial
blindness, you can no longer work in the position that you are
presently employed for.
 
In view of the above and the fact that despite the proper medical
treatment for more than six months now, the company is
constrained to terminate your employment effective immediately.
In line with this, you are given a grace period of 15 days to
remove all your personal belongings from the company premises
counted from this date.
 
In behalf of the company, I would like to express my gratitude for
the services that you have rendered our company. Kindly see the
undersigned to coordinate the payment of your financial
assistance and other benefits.
 
Thank you.
 
(Sgd.)
 Charles Malvin Ching
Operations Manager
Thus, a complaint for illegal dismissal with money claims was filed against
Manly, which was consolidated with the complaint of two other employees,
namely Francisca Adsuara and Flor Palisoc, also for illegal dismissal.
 
On July 31, 2001, the Labor Arbiter rendered judgment the dispositive portion
of which reads:
 
WHEREFORE, in view of all the foregoing, the complaint of
Hercules Balena is hereby DISMISSED for want of cause of
action. Furthermore, respondent company is hereby ordered to
pay complainants Payong, Adsuara and Palisoc the total amount
of SEVENTY-FIVE THOUSAND NINE HUNDRED PESOS
(P75,900.00), as discussed above.
 
SO ORDERED.[5]
The National Labor Relations Commission (NLRC) modified the
decision of the labor arbiter, thus:
 
WHEREFORE, premises considered, the Decision of July 31,
2001 is hereby MODIFIED. Respondents are directed to pay the
following:
 
Hercules Balena - P3,750.00 Service incentive leave pay
22, 500.00 13th month pay
P26,250.00
 
 Romualdo Payong - P3,352.00 Service incentive leave pay
20,115.00 13th month pay
P23,467.00
 
Flor Palisoc 20,115.00 13th month pay
 
The other findings stand affirmed.
 
SO ORDERED.[6]
 
With the denial of their motion for reconsideration, [7] Balena and Payong
elevated the case before the Court of Appeals, which rendered on November
22, 2004 a Decision, the dispositive portion of which reads:
 
IN VIEW OF ALL THE FOREGOING, the instant petition is hereby
DENIED, in so far as petitioner Hercules Balena is concerned and
the NLRC Decision, as to him, is AFFIRMED. However, as to
petitioner Romualdo Payong, Jr., We resolve to GRANT the
petition and declare his dismissal from employment by the private
respondents to be unlawful and should therefore be entitled to
reinstatement and separation pay, if reinstatement is no longer
viable and backwages. No pronouncement as to costs.
 
SO ORDERED.[8]
 
The Court of Appeals found that Balena prematurely filed the complaint for
illegal dismissal considering that at the time of its filing, he was still gainfully
employed by Manly. The appellate court noted that he failed to mention the
details of the alleged dismissal or to prove the severance of his employment.
It held that the managements statement that he quit his job if he is not
contented with the salary he is receiving is not equivalent to constructive
dismissal.
 
As regards Payong, the appellate court observed that considering that the
termination was based on his alleged partial blindness, Manly should have
presented a certification by a competent public health authority that Payong
was suffering from such a disease and his continued employment is
prejudicial to his health and that of his co-employees. Without the certification,
the dismissal was illegal.
 
Manlys motion for partial reconsideration was denied, hence, this petition.
 
The petition lacks merit.
Article 284 of the Labor Code authorizes an employer to terminate an
employee on the ground of disease, thus:
 
Art. 284. Disease as ground for termination. An employer
may terminate the services of an employee who has been found
to be suffering from any disease and whose continued
employment is prohibited by law or is prejudicial to his health as
well as to the health of his co-employees: .
 
However, in order to validly terminate employment on this ground,
Section 8, Rule I, Book VI of the Omnibus Rules Implementing the Labor
Code requires:
 
 Sec. 8. Disease as a ground for dismissal. Where the
employee suffers from a disease and his continued employment is
prohibited by law or prejudicial to his health or to the health of his
co-employees, the employer shall not terminate his employment
unless there is a certification by a competent public health
authority that the disease is of such nature or at such a stage that
it cannot be cured within a period of six (6) months even with
proper medical treatment. If the disease or ailment can be cured
within the period, the employer shall not terminate the employee
but shall ask the employee to take a leave. The employer shall
reinstate such employee to his former position immediately upon
the restoration of his normal health.
 
The rule is explicit. For a dismissal on the ground of disease to be
considered valid, two requisites must concur: (a) the employee suffers from a
disease which cannot be cured within six months and his continued
employment is prohibited by law or prejudicial to his health or to the health of
his co-employees, and (b) a certification to that effect must be issued by a
competent public health authority.
 
In the present case, there was no proof that Payongs continued
employment was prohibited by law or prejudicial to his health and that of his
co-employees. No medical certificate by a competent public health authority
was submitted that Payong was suffering from a disease that cannot be cured
within a period of six months. In the absence of such certification, Payongs
dismissal must necessarily be declared illegal.
Manlys contention that the requirement for a medical certification does
not apply in the instant case since it was Payong who refused to undergo
medical treatment and his resignation from work was of his own free will, is
untenable. Manly has not established Payongs refusal to undergo a medical
examination or that he resigned from work on his own accord. On the
contrary, the termination letter dated August 1, 2000 showed that it was Manly
who initiated the termination in view of the prevailing poor business climate
and Payongs partial blindness. Moreover, evidence shows that even before
the termination letter was served on Payong, he was no longer allowed to
work which shows Manlys intent to dismiss him from work.
 
The burden of proving the validity of the dismissal rests on the
employer. As such, the employer must prove that the requisites for a valid
dismissal due to a disease have been complied with. In the absence of the
required certification by a competent public health authority, this Court has
ruled against the validity of the employees dismissal.[9]
 
In Triple Eight Integrated Services, Inc. v. NLRC,[10] we held that:
 
The requirement for a medical certificate under Article 284
of the Labor Code cannot be dispensed with; otherwise, it would
sanction the unilateral and arbitrary determination by the
employer of the gravity or extent of the employees illness and
thus defeat the public policy on the protection of labor....
 
We also note that Manly failed to comply with the procedure for
terminating an employee. In dismissing an employee, the employer has the
burden of proving that the employee has been served two notices: (1) one to
apprise him of the particular acts or omissions for which his dismissal is
sought, and (2) the other to inform him of his employers decision to dismiss
him.  The first notice must state that dismissal is sought for the act or omission
charged against the employee, otherwise, the notice cannot be considered
sufficient compliance with the rules.[11]
 
All told, Payongs dismissal did not comply with both the substantive and
procedural aspects of due process. Clearly, his dismissal is tainted with
invalidity.[12]
 
WHEREFORE, the petition is DENIED. The November 22, 2004
Decision of the Court of Appeals in CA-G.R. SP No. 83800 and its February
28, 2005 Resolution, are AFFIRMED.
 
SO ORDERED.

G.R. No. 129584. December 3, 1998]

TRIPLE EIGHT INTEGRATED SERVICES, INC., petitioner, vs. NATIONAL

LABOR RELATIONS COMMISSION, HON. LABOR ARBITER
POTENCIANO S. CANIZARES, JR. and ERLINDA R.
OSDANA, respondents.

DECISION

ROMERO, J.:

In this petition for certiorari now before us, petitioner Triple Eight

Integrated Services Inc. seeks to annul the decision [1] of public respondent
National Labor Relations Commission (First Division, Quezon City) dated
March 11, 1997 affirming the August 20, 1996 decision [2] of Labor Arbiter
Potenciano Canizares. Petitioner was ordered to pay private respondent
Erlinda Osdana her salaries for the unexpired portion of her employment
contract, unpaid salaries, salary differential, moral and exemplary damages,
as well as attorneys fees. On April 28, 1997, the NLRC denied petitioners
motion for reconsideration.[3]

The antecedent facts follow.

Sometime in August 1992, private respondent Osdana was recruited by

petitioner for employment with the latters principal, Gulf Catering Company
(GCC), a firm based in the Kingdom of Saudi Arabia. Under the original
employment contract, Osdana was engaged to work as Food Server for a
period of thirty-six (36) months with a salary of five hundred fifty Saudi rials
(SR550).

Osdana claims she was required by petitioner to pay a total of eleven

thousand nine hundred fifty pesos (P11,950.00) in placement fees and other
charges, for which no receipt was issued. She was likewise asked to undergo
a medical examination conducted by the Philippine Medical Tests System, a
duly accredited clinic for overseas workers, which found her to be Fit of
Employment.

Subsequently, petitioner asked Osdana to sign another Contractor-

Employee Agreement[4] which provided that she would be employed as a
waitress for twelve (12) months with a salary of two hundred eighty US dollars
($280). It was this employment agreement which was approved by the
Philippine Overseas Employment Administration (POEA).
 On September 16, 1992, Osdana left for Riyadh, Saudi Arabia, and
commenced working for GCC. She was assigned to the College of Public
Administration of the Oleysha University and, contrary to the terms and
conditions of the employment contract, was made to wash dishes, cooking
pots, and utensils, perform janitorial work and other tasks which were
unrelated to her job designation as waitress. Making matters worse was the
fact that she was made to work a gruelling twelve-hour shift, from six oclock in
the morning to six oclock in the evening, without overtime pay.

Because of the long hours and the strenuous nature of her work, Osdana
suffered from numbness and pain in her arms. The pain was such that she
had to be confined at the Ladies Villa, a housing facility of GCC, from June 18
to August 22, 1993, during which period, she was not paid her salaries.

After said confinement, Osdana was allowed to resume work, this time as
Food Server and Cook at the Hota Bani Tameem Hospital, where she worked
seven days a week from August 22 to October 5, 1993. Again, she was not
compensated.

Then, from October 6 to October 23, 1993, Osdana was again confined at
the Ladies Villa for no apparent reason. During this period, she was still not
paid her salary.

On October 24, 1993, she was re-assigned to the Oleysha University to

wash dishes and do other menial tasks. As with her previous assignment at
the said University, Osdana worked long hours and under harsh
conditions. Because of this, she was diagnosed as having Bilateral Carpal
Tunnel Syndrome, a condition precipitated by activities requiring repeated
flexion, pronation, and supination of the wrist and characterized by
excruciating pain and numbness in the arms.[5]
 As the pain became unbearable, Osdana had to be hospitalized. She
underwent two surgical operations, one in January 1994, another on April 23,
1994. Between these operations, she was not given any work assignments
even if she was willing and able to do light work in accordance with her
doctors advice. Again, Osdana was not paid any compensation for the period
between February to April 22, 1994.

After her second operation, Osdana was discharged from the hospital on
April 25, 1994. The medical report stated that she had very good improvement
of the symptoms and she was discharged on the second day of the operation.
[6]

Four days later, however, she was dismissed from work, allegedly on the
ground of illness. She was not given any separation pay nor was she paid her
salaries for the periods when she was not allowed to work.

Upon her return to the Philippines, Osdana sought the help of petitioner,
but to no avail. She was thus constrained to file a complaint before the POEA
against petitioner, praying for unpaid and underpaid salaries, salaries for the
unexpired portion of the employment contract, moral and exemplary damages
and attorneys fees, as well as the revocation, cancellation, suspension and/or
imposition of administrative sanctions against petitioner.

Pursuant to Republic Act No. 8042, otherwise known as the Migrant

Workers and Overseas Filipinos Act of 1995, the case was transferred to the
arbitration branch of the NLRC and assigned to Labor Arbiter Canizares.

In a decision dated August 20, 1996, the labor arbiter ruled in favor of
Osdana. The dispositive portion of the decision follows:
Wherefore, the respondent is hereby ordered to pay the complainant
US$2,499.00 as salaries for the unexpired portion of the contract, and
US$1,076.00 as unpaid salary and salary differential, or its equivalent in
Philippine Peso.

The respondent is likewise ordered to pay the complainant P50,000 moral

damages, and P20,000 exemplary damages.

The respondent is further ordered to pay the complainant 10% of the

monetary award as attorneys fee.

Other claims are hereby dismissed for lack of sufficient evidence.

SO ORDERED.

Aggrieved by the labor arbiters decision, petitioner appealed to the NLRC,

which affirmed the decision in question on March 11, 1997. Petitioners motion
for reconsideration was likewise denied by the NLRC in its order dated April
28, 1997.

Hence, this petition for certiorari.

Petitioner alleges grave abuse of discretion on the part of the public

respondents for the following reasons: (a) ruling in favor of Osdana even if
there was no factual or legal basis for the award and, (b) holding petitioner
solely liable for her claims despite the fact that its liability is joint and several
with its principal, GCC.

At the outset, petitioner argues that public respondent Labor Arbiter

gravely abused his discretion when he rendered the questioned decision
dated August 20, 1996 without stating the facts and the law where he derived
his conclusions.[7] In support of this argument, petitioner cites the first
paragraph of Article VIII, Section 14 of the Constitution: No decision shall be
rendered by any court without expressing therein clearly and distinctly the
facts and the law on which it is based.

On this point, it is enough to note that the decisions of both the labor
arbiter and the NLRC were based mainly on the facts and allegations in
Osdanas position paper and supporting documents. We find these sufficient to
constitute substantial evidence to support the questioned
decisions. Generally, findings of facts of quasi-judicial agencies like the NLRC
are accorded great respect and, at times, even finality if supported by
substantial evidence. Substantial evidence is such amount of relevant
evidence which a reasonable mind might accept as adequate to justify a
conclusion.[8]

Moreover, well-settled is the rule that if doubts exist between the evidence
presented by the employer and the employee, the scales of justice must be
tilted in favor of the latter. Thus, in controversies between a worker and her
employer, doubts reasonably arising from the evidence or in the interpretation
of agreements should be resolved in favor of the former.

Petitioner, for its part, was given the same opportunity to file its own
position paper but instead, it opted to file a two-page Answer With Special
And Affirmative Defenses, denying generally the allegations of the complaint.[9]

As observed by the labor arbiter, The record shows the complainant filed
complaint (sic), position paper, and supporting documents, and prosecuted
her case diligently; while the respondent merely tried to settle the case
amicably, failing even to file its position paper. [10] The present case being one
for illegal dismissal, it was incumbent upon petitioner employer to show by
substantial evidence that the termination was validly made. In termination
cases, the burden of proof rests on the employer to show that the dismissal is
for a just cause.[11] Having failed to file its position paper and to support its
denials and affirmative defenses in its answer, petitioner cannot now fault the
labor arbiter and the NLRC for relying on the facts as laid down by Osdana in
her position paper and supported by other documents. The essence of due
process is that a party be afforded reasonable opportunity to be heard and to
submit any evidence he may have in support of his defense,[12] and this is
exactly what petitioner was accorded, although it chose not to fully avail
thereof.

This Court, therefore, upholds the finding of herein public respondents that
the facts and the evidence on record adduced by Osdana and taken in
relation to the answer of petitioner show that indeed there was breach of the
employment contract and illegal dismissal committed by petitioners principal.

Petitioner claims that public respondents committed grave abuse of

discretion when they ruled that Osdana had been illegally dismissed by
GCC. It maintains that the award for salaries for the unexpired portion of the
contract was improper because Osdana was validly dismissed on the ground
of illness.

The argument must fail.

In its Answer, Memorandum of Appeal,[13] Petition for Certiorari,[14] and

Consolidated Reply,[15] petitioner consistently asserted that Osdana was
validly repatriated for medical reasons, but it failed to substantiate its claim
that such repatriation was justified and done in accordance with law.

Article 284 of the Labor Code is clear on the matter of termination by

reason of disease or illness, viz:
Art. 284. Disease as a ground for termination An employer may terminate the
services of an employee who has been found to be suffering from any disease
and whose continued employment is prohibited by law or prejudicial to his
health as well as the health of his co-employees: x x x.

Specifically, Section 8, Rule 1, Book VI of the Omnibus Rules

Implementing the Labor Code provides:

Sec. 8. Disease as a ground for dismissal Where the employee suffers from a
disease and his continued employment is prohibited by law or prejudicial to
his health or to the health of his co-employees, the employer shall not
terminate his employment unless there is a certification by competent public
authority that the disease is of such nature or at such a stage that it cannot be
cured within a period of six (6) months with proper medical treatment. If the
disease or ailment can be cured within the period, the employer shall not
terminate the employee but shall ask the employee to take a leave. The
employer shall reinstate such employee to his former position immediately
upon the restoration of his normal health. (Underscoring supplied)

Viewed in the light of the foregoing provisions, the manner by which

Osdana was terminated was clearly in violation of the Labor Code and its
implementing rules and regulations.

In the first place, Osdanas continued employment despite her illness was

not prohibited by law nor was it prejudicial to her health, as well as that of her
co-employees. In fact, the medical report issued after her second operation
stated that she had very good improvement of the symptoms. Besides, Carpal
Tunnel Syndrome is not a contagious disease.
 Petitioner attributes good faith on the part of its principal, claiming that It
was the concern for the welfare and physical well being (sic) of private
respondent that drove her employer to take the painful decision of terminating
her from the service and having her repatriated to the Philippines at its
expense. The employer did not want to risk the aggravation of the illness of
private respondent which could have been the logical consequence were
private respondent allowed to continue with her job.[16]

The Court notes, however, that aside from these bare allegations,
petitioner has not presented any medical certificate or similar document from
a competent public health authority in support of its claims.

On the medical certificate requirement, petitioner erroneously argues that

private respondent was employed in Saudi Arabia and not here in the
Philippines. Hence, there was a physical impossibility to secure from a
Philippine public health authority the alluded medical certificate that public
respondents illness will not be cured within a period of six months.[17]

Petitioner entirely misses the point, as counsel for private respondent

states in the Comment.[18] The rule simply prescribes a certification by a
competent public health authority and not a Philippine public health authority.

If, indeed, Osdana was physically unfit to continue her employment, her
employer could have easily obtained a certification to that effect from a
competent public health authority in Saudi Arabia, thereby heading off any
complaint for illegal dismissal.

The requirement for a medical certificate under Article 284 of the Labor
Code cannot be dispensed with; otherwise, it would sanction the unilateral
and arbitrary determination by the employer of the gravity or extent of the
employees illness and thus defeat the public policy on the protection of
labor. As the Court observed in Prieto v. NLRC, [19] The Court is not unaware of
the many abuses suffered by our overseas workers in the foreign land where
they have ventured, usually with heavy hearts, in pursuit of a more fulfilling
future. Breach of contract, maltreatment, rape, insufficient nourishment, sub-
human lodgings, insults and other forms of debasement, are only a few of the
inhumane acts to which they are subjected by their foreign employers, who
probably feel they can do as they please in their country. While these workers
may indeed have relatively little defense against exploitation while they are
abroad, that disadvantage must not continue to burden them when they return
to their own territory to voice their muted complaint. There is no reason why,
in their own land, the protection of our own laws cannot be extended to them
in full measure for the redress of their grievances.

Petitioner likewise attempts to sidestep the medical certificate requirement

by contending that since Osdana was working in Saudi Arabia, her
employment was subject to the laws of the host country. Apparently, petitioner
hopes to make it appear that the labor laws of Saudi Arabia do not require any
certification by a competent public health authority in the dismissal of
employees due to illness.

Again, petitioners argument is without merit.

First, established is the rule that lex loci contractus (the law of the place
where the contract is made) governs in this jurisdiction. There is no question
that the contract of employment in this case was perfected here in the
Philippines. Therefore, the Labor Code, its implementing rules and
regulations, and other laws affecting labor apply in this case. Furthermore,
settled is the rule that the courts of the forum will not enforce any foreign claim
obnoxious to the forums public policy.[20] Here in the Philippines, employment
agreements are more than contractual in nature. The Constitution itself, in
Article XIII Section 3, guarantees the special protection of workers, to wit:

The State shall afford full protection to labor, local and overseas, organized
and unorganized, and promote full employment and equality of employment
opportunities for all.

It shall guarantee the rights of all workers to self-organization, collective

bargaining and negotiations, and peaceful concerted activities, including the
right to strike in accordance with law. They shall be entitled to security of
tenure, humane conditions of work, and a living wage. They shall also
participate in policy and decision-making processes affecting their rights and
benefits as may be provided by law.

x x x x x x x x x.

This public policy should be borne in mind in this case because to allow
foreign employers to determine for and by themselves whether an overseas
contract worker may be dismissed on the ground of illness would encourage
illegal or arbitrary pre-termination of employment contracts.

As regards the monetary award of salaries for the unexpired portion of the
employment contract, unpaid salaries and salary differential granted by public
respondents to Osdana, petitioner assails the same for being contrary to law,
evidence and existing jurisprudence, all of which therefore constitutes grave
abuse of discretion.

Although this contention is without merit, the award for salaries for the
unexpired portion of the contract must, however, be reduced. Paragraph 5,
Section 10 of R.A. No. 8042, applies in this case, thus:
In case of termination of overseas employment without just, valid or
authorized cause as defined by law or contract, the worker shall be entitled to
the full reimbursement of his placement fee with interest at twelve percent
(12%) per annum, plus his salaries for the unexpired portion of his
employment contract or for three (3) months for every year of the unexpired
term, whichever is less.

In the case at bar, while it would appear that the employment contract
approved by the POEA was only for a period of twelve months, Osdanas
actual stint with the foreign principal lasted for one year and seven-and-a-half
months. It may be inferred, therefore, that the employer renewed her
employment contract for another year. Thus, the award for the unexpired
portion of the contract should have been US$1,260 (US$280 x 4 months) or
its equivalent in Philippine pesos, not US$2,499 as adjudged by the labor
arbiter and affirmed by the NLRC.

As for the award for unpaid salaries and differential amounting to

US$1,076 representing seven months unpaid salaries and one month
underpaid salary, the same is proper because, as correctly pointed out by
Osdana, the no work, no pay rule relied upon by petitioner does not apply in
this case. In the first place, the fact that she had not worked from June 18 to
August 22, 1993 and then from January 24 to April 29, 1994, was due to her
illness which was clearly work-related. Second, from August 23 to October 5,
1993, Osdana actually worked as food server and cook for seven days a week
at the Hota Bani Tameem Hospital, but was not paid any salary for the said
period. Finally, from October 6 to October 23, 1993, she was confined to
quarters and was not given any work for no reason at all.
 Now, with respect to the award of moral and exemplary damages, the
same is likewise proper but should be reduced. Worth reiterating is the rule
that moral damages are recoverable where the dismissal of the employee was
attended by bad faith or fraud or constituted an act oppressive to labor, or was
done in a manner contrary to morals, good customs, or public policy.
[21]
 Likewise, exemplary damages may be awarded if the dismissal was
effected in a wanton, oppressive or malevolent manner.[22]

According to the facts of the case as stated by public respondent, Osdana

was made to perform such menial chores, as dishwashing and janitorial work,
among others, contrary to her job designation as waitress. She was also
made to work long hours without overtime pay. Because of such arduous
working conditions, she developed Carpal Tunnel Syndrome. Her illness was
such that she had to undergo surgery twice. Since her employer determined
for itself that she was no longer fit to continue working, they sent her home
posthaste without as much as separation pay or compensation for the months
when she was unable to work because of her illness. Since the employer is
deemed to have acted in bad faith, the award for attorneys fees is likewise
upheld.

Finally, petitioner alleges grave abuse of discretion on the part of public

respondents for holding it solely liable for the claims of Osdana despite the
fact that its liability with the principal is joint and several.

Petitioner misunderstands the decision in question. It should be noted that

contrary to petitioners interpretation, the decision of the labor arbiter which
was affirmed by the NLRC did not really absolve the foreign principal.

Petitioner was the only one held liable for Osdanas monetary claims
because it was the only respondent named in the complaint and it does not
appear that petitioner took steps to have its principal included as co-
respondent. Thus, the POEA, and later the labor arbiter, did not acquire
jurisdiction over the foreign principal.

This is not to say, however, that GCC may not be held liable at
all. Petitioner can still claim reimbursement or contribution from it for the
amounts awarded to the illegally-dismissed employee.

WHEREFORE, in view of the foregoing, the instant petition is

DISMISSED. Accordingly, the decisions of the labor arbiter dated August 20,
1996, and of the NLRC dated March 11, 1997, are AFFIRMED with the
MODIFICATION that the award to private respondent Osdana should be one
thousand two hundred sixty US dollars (US$1,260), or its equivalent in
Philippine pesos, as salaries for the unexpired portion of the employment
contract, and one thousand seventy six US dollars (US$1,076), or its
equivalent in Philippine pesos, representing unpaid salaries for seven (7)
months and underpaid salary for one (1) month, plus interest.

Petitioner is likewise ordered to pay private respondent P30,000.00 in

moral damages, P10,000.00 in exemplary damages and 10% attorneys fees.

This decision is without prejudice to any remedy or claim for

reimbursement or contribution petitioner may institute against its foreign
principal, Gulf Catering Company. No pronouncement as to costs.

G.R. No. 194649, August 10, 2016

SOLIMAN SECURITY SERVICES, INC. AND TERESITA L.

SOLIMAN, Petitioners, v. IGMEDIO C. SARMIENTO, JOSE JUN CADA AND
ERVIN R. ROBIS, Respondents.

DECISION

PEREZ, J.:
This is a Petition for Review on Certiorari1 under Rule 45 of the Rules of
Court, assailing the Decision2dated 27 August 2010 and the Resolution3 dated
25 November 2010 of the Court of Appeals in CA-G.R. SP No. 110905, which
affirmed the 2 June 2009 Decision4 of the National Labor Relations
Commission (NLRC) declaring respondents Igmedio C. Sarmiento
(Sarmiento), Jose Jun Cada (Cada), and Ervin R. Robis (Robis) to have been
illegally dismissed from employment.

The Antecedent Facts

This case stemmed from a complaint filed by respondents against petitioners

Soliman Security Services, Inc. (the agency) and Teresita L. Soliman
(Teresita) for illegal dismissal; underpayment of salaries, overtime pay and
premium pay for holiday and rest day; damages; attorney's fees; illegal
deduction and non-payment of ECOLA.

Respondents were hired as security guards by petitioner Soliman Security

Services, Inc. and were assigned to Interphil Laboratories, working seven (7)
days a week for twelve (12) straight hours daily. Respondents alleged that
during their employment - from May 1997 until January 2007 for Robis and
from May 2003 until January 2007 for Sarmiento and Cada � they were paid
only P275.00 a day for eight (8) hours of work or P325.00 for twelve (12)
hours of work but were not paid ECOLA, night shift differentials, holiday pay,
as well as rest day premiums. For cash bond and mutual aid contributions, the
amounts of P400.00 and P100.00, respectively, were deducted from their
salaries per month. Respondents claimed that they sought a discussion of the
nonpayment of their benefits with petitioner Teresita Soliman but the latter
refused to take heed and told them to tender their resignations instead.
According to respondents, on 21 January 2007, they received an order
relieving them from their posts and since then, they were not given any
assignments.

On the other hand, the agency's version of the story hinges on an alleged
placement of the respondents under a "floating status." The agency admitted
relieving the respondents from duty on 20 January 2007 but insists that the
same was only done pursuant to its contract with client Interphil Laboratories.
To support this claim, petitioners presented a standing contract5 with
Astrazeneca Pharmaceuticals, Interphil's predecessor-in-interest. The contract
contained stipulations pertaining to the client's policy of replacing guards on
duty every six (6) months without repeat assignment. The agency further
posits that respondent guards were directed several times to report to the
office for their new assignments but they failed to comply with such directives.

A review of the records reveals the following timeline: (1) on 20 January 2007,
the agency sent respondents notices informing them that they were being
relieved from their current posts pursuant to a standing contract with Interphil
Laboratories6 with directives for respondents to report to the office for their
new assignments; (2) on 7 February 2007, the agency sent another letter
addressed to Robis, directing him to report to the office for his new
assignment;7 (3) on 22 February 2007, the first complaint for illegal dismissal
was filed with the Labor Arbiter;8 (4) on 26 March 2007, a hearing before the
Executive Labor Arbiter was conducted, where petitioner agency's
representative presented respondents an offer to return to work; 9 (5) the
agency sent respondents letters dated 2410 and 2611April 2007, directing them
to clarify their intentions as they have not been reporting to seek new
assignments; (6) on 3 August 2007, respondents filed a Supplemental
Complaint,12 the purpose of which was to anticipate the possibility that the
agency might set up the defense of pre-maturity of filing of the constructive
dismissal complaint; (7) respondents executed their respective complaint
affidavits on 8 August 2007;13 (8) and finally after the parties submitted their
respective position papers, the Executive Labor Arbiter rendered a decision
on 4 January 2008.14chanrobleslaw

Finding that respondents' failure to comply with the Memoranda amounted to

abandonment, the Labor Arbiter dismissed the complaint. 15 The Labor Arbiter
concluded that there can be no dismissal to speak of, much less an illegal
dismissal. On appeal, the NLRC reversed the 4 January 2008 decision of the
the Executive Labor Arbiter, ultimately finding respondents to have been
illegally dismissed. The NLRC ruled that the letters directing respondents to
"clarify their intentions" were not in the nature of return-to-work orders, which
may effectively interrupt their floating status. The NLRC observed that the
Memoranda received by respondents were but mere afterthoughts devised
after the case for illegal dismissal was filed. The NLRC also put the agency to
task for failing to traverse the guards' averment that there were other
employee-guards who stayed with the same client beyond the six-month term
imposed.

Aggrieved, the petitioners brought the case to the Court of Appeals, asking
the court to issue an extraordinary writ of certiorari to reverse the NLRC
decision. Reiterating that the agency had no legitimate reasons for placing
respondents on prolonged floating status, the appellate court affirmed the
decision of the NLRC. The dispositive portion of the NLRC decision
reads:ChanRoblesVirtualawlibrary
WHEREFORE, premises considered, the decision of the Executive Labor
Arbiter Fatima Jambaro-Franco dated 4 January 2008 is reversed and set
aside and a new one is rendered ordering [petitioners] to pay [respondents]
the following:

chanRoblesvirtualLawlibrary1. Backwages from 21 January 2007 until finality

of this Decision;

2. Separation pay equivalent to one-month salary for every year of service

from the date of employment as appearing in the complaint also up to finality
of this Decision; and cralawlawlibrary

3. Salary differentials for the period not yet barred by prescription.

All other claims are dismissed for lack of merit.16chanroblesvirtuallawlibrary

Petitioners sought a reconsideration of the decision but the appellate court
denied the same. Hence, this Petition for Review on Certiorari.

Our Ruling

After a careful evaluation of the records of the case, this Court finds no
reversible error in the NLRC decision as affirmed by the Court of Appeals. The
petition is denied for lack of merit.

Placement on floating status as a management prerogative

The Court is mindful of the fact that most contracts for services stipulate that
the client may request the replacement of security guards assigned to
it.17 Indeed, the employer has the right to transfer or assign its employees from
one area of operation to another, "provided there is no demotion in rank or
diminution of salary, benefits, and other privileges, and the transfer is not
motivated by discrimination or bad faith, or effected as a form of punishment
or demotion without sufficient cause."18 During that period of time when they
are in between assignments or when they are made to wait for new
assignments after being relieved from a previous post, guards are considered
on temporary "off-detail" or under "floating status". It has long been
recognized by this Court that the industry practice of placing security guards
on floating status does not constitute dismissal, as the assignments primarily
depend on the contracts entered into by the agency with third parties 19 and the
same is a valid exercise of management prerogative. However, such practice
must be exercised in good faith and courts must be vigilant in assessing the
different situations, especially considering that the security guard does not
receive any salary or any financial assistance provided by law when placed on
floating status.20chanrobleslaw

Constructive Dismissal

Though respondents were not per se dismissed on 20 January 2007 when

they were ordered relieved from their posts, we find that they were
constructively dismissed when they were not given new assignments. As
previously mentioned, placing security guards under floating status or
temporary off-detail has been an established industry practice. It must be
emphasized, however, that they cannot be placed under floating status
indefinitely; thus, the Court has applied Article 29221 (formerly Article 286) of
the Labor Code by analogy to set the specific period of temporary off-detail to
a maximum of six (6) months.22 It must also be clarified that such provision
does not entitle agencies to retain security guards on floating status for a
period of not more than six (6) months for whatever reason. Placing
employees on floating status requires the dire exigency of the
employer's bona fide suspension of operation. In security services, this
happens when there is a surplus of security guards over available
assignments as when the clients that do not renew their contracts with the
security agency are more than those clients that do. 23chanrobleslaw

The crux of the controversy lies in the consequences of the lapse of a

significant period of time without respondents having been reassigned.
Petitioner agency faults the respondents for their repeated failure to comply
with the directives to report to the office for their new assignments. To support
its argument, petitioner agency submitted in evidence notices addressed to
respondents, which read:ChanRoblesVirtualawlibrary
You are directed to report to the undersigned to clarify your intentions as
you have not been reporting to seek a new assignment after your relief
from Interphil.

To this date, we have not received any update from you neither did you
update your government requirements x x x

We are giving you up to May 10, 2007 to comply or we will be forced to drop
you from our roster and terminate your services for abandonment of work and
insubordination.
Consider this our final warning.24 (Emphasis ours)
As for respondents, they maintain that the offers of new assignments were
mere empty promises. Respondents claim that they have been reporting to
the office for new assignments only to be repeatedly turned down and ignored
by petitioner's office personnel.25cralawredchanrobleslaw

We rule that such notices were mere afterthoughts. The notices were
allegedly sent to respondents on 24 and 26 April 24 2007, a month after the
hearing before the Executive Labor Arbiter. By the time the notices were sent,
a complaint for illegal dismissal with a prayer for reinstatement was already
filed. In fact, the agency, through its representative, already had the chance to
discuss new assignments during the hearing before the Labor Arbiter. Instead
of taking the opportunity to clarify during the hearing that respondents were
not dismissed but merely placed on floating status and instead of specifying
details about the available new assignments, the agency merely gave out
empty promises. No mention was made regarding specific details of these
pending new assignments. If respondent guards indeed had new assignments
awaiting them, as what the agency has been insinuating since the day
respondents were relieved from their posts, the agency should have identified
these assignments during the hearing instead of asking respondents to report
back to the office. The agency's statement in the notices - that respondents
have not clarified their intentions because they have not reported to seek new
assignments since they were relieved from their posts - is specious at best. As
mentioned, before these notices were sent out, a complaint was already filed
and a hearing before the Labor Arbiter had already been conducted. The
complaint clarified the intention of respondents. Indeed, respondents'
complaint for illegal dismissal with prayer for reinstatement is inconsistent with
the agency's claim that respondents did not report for reassignment despite
the notices directing them to do so. It is evident that the notices sent by the
agency were mere ostensible offers for new assignments. It was intended to
cover the illegality of the termination of respondents' employment.

Lack of service agreement for a continuous period of 6 months as an

authorized cause for termination

It is significant to note that had the reason for such failure to reassign
respondents been the lack of service agreements for a continuous period of
six (6) months, petitioner agency could have exercised its right to terminate
respondents for an authorized cause upon compliance with the procedural
requirements.
On this score, Department Order No. 14, Series of 2001 26 (DO 14-01) of the
Department of Labor and Employment is instructive. Section 9.3 of the same
provides:ChanRoblesVirtualawlibrary
9.3 Reserved status - x x x

x x x x

If after a period of 6 months, the security agency/employer cannot provide

work or give assignment to the reserved security guard, the latter can be
dismissed from service and shall be entitled to separation pay as described in
subsection 6.5

xxxx
In relation thereto, Section 6.5 of DO 14-01 treats such lack of service
assignment for a continuous period of six (6) months as an authorized cause
for termination of employment entitling the security guard to separation pay, to
wit:ChanRoblesVirtualawlibrary
6.5 Other Mandatory Benefits. In appropriate cases, security guards/similar
personnel are entitled to the mandatory benefits as listed below, although the
same may not be included in the monthly cost distribution in the contracts,
except the required premiums form their coverage:

a. Maternity benefit as provided under SS Law;

b. Separation pay if the termination of employment is for authorized

cause as provided by law and as enumerated below:

Half-Month Pay Per Year of Service, but in no case less than One Month Pay
if separation pay is due to:

1. Retrenchment or reduction of personnel effected by management

to prevent serious losses;

2. Closure or cessation of operation of an establishment not due to

serious losses or financial reverses;

3. Illness or disease not curable within a period of 6 months and

continued employment is prohibited by law or prejudicial to the
employee's health or that of co-employees;
 4. Lack of service assignment for a continuous period of 6
months. (Emphasis and underlining supplied)

xxxx
It bears stressing that the only time a prolonged floating status is considered
an authorized cause for dismissal is when the security agency experiences a
surplus of security guards brought about by lack of clients.27 We quote with
approval the pertinent portion of the NLRC's decision as affirmed by the
appellate court, to wit:ChanRoblesVirtualawlibrary
Being placed on floating status is only legitimate when guaranteed by bona
fide business exigencies. In security services, this happens when there is a
surplus of security guards over available assignments as when the clients that
do not renew their contracts with the security agency are more than those
clients that do x x x.28chanroblesvirtuallawlibrary
Otherwise stated, absent such justification, the placing of a security guard on
floating status is tantamount to constructive dismissal. And, when the floating
status is justified, the lapse of a continuous period of six (6) months results in
an authorized cause for termination of employment, the security guard being
entitled, however, to separation pay.

As for the procedural aspect, employer agencies must be reminded that to

validly terminate a security guard for lack of service assignment for a
continuous period of six months, the agency must comply with the provisions
of Article 289 (previously Art. 283) of the Labor Code, 29 "which mandates that
a written notice should be served on the employee on temporary off-detail or
floating status and to the DOLE one (1) month before the intended date of
termination."30 Sec. 9.2 of DO 14-01 provides for a similar procedure, to
wit:ChanRoblesVirtualawlibrary
9.2 Notice of Termination - In case of termination of employment due to
authorized causes provided in Article 283 and 284 of the Labor Code and in
the succeeding subsection, the employer shall serve a written notice on the
security guard/personnel and the DOLE at least one (1) month before the
intended date thereof.
It cannot be denied that the placement of security guards on floating status
may be subject to abuse by agencies, considering that they are not obliged to
pay the security guards while placed on floating status. Recognizing the
jurisprudence elaborating on the application of DO 14-01, we now provide a
summary as follows:

chanRoblesvirtualLawlibraryThe floating status period, wherein the security

guards are not paid, should not last longer than six (6) months as provided by
law. Before the lapse of six (6) months, the agency should have recalled the
security guard for a new assignment. If the agency failed to do so due to the
lack of service agreements for a continuous period of six (6) months, an
authorized cause for dismissal as per DO 14-01, the security guard may be
considered permanently retrenched and validly dismissed upon compliance
with the procedural requirements laid down by the Department Order and the
Labor Code.31 It must be emphasized however, that in order for the dismissal
to be valid and in order for the employer agency to free itself from any liability
for illegal dismissal, the justification for the failure to reassign should be the
lack of service agreements for a continuous period of six (6) months, aside
from the other authorized causes provided by the Labor Code. Corollarily,
placing the security guard on floating status in bad faith, as when there is
failure to reassign despite the existence of sufficient service agreements will
make the employer agency liable for illegal dismissal. In such cases, there is
no bona fide business exigency which calls for the temporary retrenchment or
laying-off of the security guards. Lastly, if six (6) months have already lapsed
and the employer agency failed to either (a) reassign the security guard or (b)
validly dismiss and give him/her the corresponding separation pay, the
security guard may be considered to have been constructively
dismissed.32chanrobleslaw

On the finding that respondents are entitled to their money claims

In its decision, the Court of Appeals discussed how the NLRC might have
erred in its computations of the wages received by the private respondents.
However, despite such observation, the appellate court dismissed the petition
for certiorari, ultimately holding that the NLRC based its decision on all the
evidence presented, with nary an abuse of the exercise of its discretion. The
appellate court found that petitioners failed to discharge their burden of
showing at least an abuse of discretion on the part of the NLRC, when the
latter found that the security guards were underpaid. Petitioners now fault the
appellate court for affirming the NLRC decision declaring them liable for
private respondents' monetary claims.

Petitioners' contention is bereft of merit

In petitioners' Motion for Reconsideration of the NLRC decision, they invested

heavily in the argument about the validity of the dismissal, stating only briefly
in the penultimate paragraph their manifestation to reserve a purported right to
submit additional evidence in a supplemental pleading, if necessary to
strengthen their arguments regarding the award of monetary claims. The
Court of Appeals correctly ruled that such scheme subverts the reglementary
periods established by law and more significantly, the NLRC would no longer
have the opportunity to correct itself, assuming errors, since the Motion for
Reconsideration filed before it did not detail the computations regarding
monetary benefits. Said computations were only subsequently raised in their
petition before the appellate court.

In the Court of Appeals, petitioners adopted a similar scheme. In their Petition

for Certiorari, they did not anymore dispute the NLRC's determinations as to
the monetary aspects. Instead, their arguments on the alleged issue of
monetary awards were inserted in their Reply to Comment pleading. The
Court of Appeals correctly ruled that such scheme contradicts elementary due
process as the arguments raised were not dealt with in the comment the
Reply supposedly responds to.

From the foregoing, it is quite obvious that the NLRC may not be faulted for
relying on the evidence presented before it when it made its computations for
underpayment. Neither may the appellate court be faulted for declaring that
the NLRC did not abuse its discretion. The task of resolving the issue on
monetary claims, purely factual, properly pertains to the NLRC as the quasi-
judicial appellate body to which these documents were presented to review
the arbiter's ruling.33 The appellate court correctly ruled that the usual appeal
in labor cases is exhausted after the NLRC has decided. Petitioner cannot
fault the Court of Appeals in affirming the NLRC decision despite the alleged
computational error as the special civil action of certiorari is a remedy to
correct errors of jurisdiction and not mere errors of judgment. Consequently,
an error of judgment that the court may commit in the exercise of its
jurisdiction is not correctable through the original civil action of certiorari.

The present petition is a Rule 45 petition reviewing a Rule 65 ruling of the

Court of Appeals. This Court's jurisdiction is thus limited to errors of law which
the appellate court might have committed in its Rule 65 ruling. 34 In essence, in
ruling for legal correctness, "we have to view the CA's decision in the same
context that the petition for certiorari it ruled upon was presented to it; we
have to examine the CA decision from the prism of whether it correctly
determined the presence or absence of grave abuse of discretion in the NLRC
decision before it, not on the basis of whether the NLRC decision on the
merits of the case, was correct."35 After a meticulous review of the facts of the
case, the records, relevant laws and jurisprudence, we rule that the Court of
Appeals correctly determined that the NLRC did not abuse its discretion when
it held that respondents were constructively dismissed and entitled to their
monetary claims.

WHEREFORE, the petition is DENIED. The assailed 27 August 2010 Decision

and 25 November 2010 Resolution of the Court of Appeals in CA-G.R. SP No.
110905 are AFFIRMED. Accordingly, petitioners Soliman Security Services,
Inc. and Teresita L. Soliman are hereby ORDERED to pay respondents
Igmedio C. Sarmiento, Jose Jun Cada, and Ervin R. Robis, to wit:

1. Backwages from 21 January 2007 until finality of this decision;

2. Separation pay equivalent to one-month salary for every year of service

from the date of employment as appearing in the complaint also up to
finality of this decision; and cralawlawlibrary

3. Salary differentials for the period not yet barred by prescription.

All other claims are dismissed for lack of merit.

SO ORDERED.chanRoblesvirtualLawlibrary