Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 93666             April 22, 1991

GENERAL MILLING CORPORATION and EARL TIMOTHY CONE, petitioners, 

vs.
HON. RUBEN D. TORRES, in his capacity as Secretary of Labor and Employment, HON. BIENVENIDO E.
LAGUESMA, in his capacity as Acting Secretary of Labor and Employment, and BASKETBALL COACHES
ASSOCIATION OF THE PHILIPPINES, respondents.

Sobrevinas, Diaz, Hayudini & Bodegon Law Office for petitioners.

Rodrigo, Cuevas & De Borja for respondent BCAP.

RESOLUTION

FELICIANO, J.:

On 1 May 1989, the National Capital Region of the Department of Labor and Employment issued Alien Employment
Permit No. M-0689-3-535 in favor of petitioner Earl Timothy Cone, a United States citizen, as sports consultant and
assistant coach for petitioner General Milling Corporation ("GMC").

On 27 December 1989, petitioners GMC and Cone entered into a contract of employment whereby the latter undertook to
coach GMC's basketball team.

On 15 January 1990, the Board of Special Inquiry of the Commission on Immigration and Deportation approved petitioner
Cone's application for a change of admission status from temporary visitor to pre-arranged employee.

On 9 February 1990, petitioner GMC requested renewal of petitioner Cone's alien employment permit. GMC also
requested that it be allowed to employ Cone as full-fledged coach. The DOLE Regional Director, Luna Piezas, granted the
request on 15 February 1990.

On 18 February 1990, Alien Employment Permit No. M-02903-881, valid until 25 December 1990, was issued.

Private respondent Basketball Coaches Association of the Philippines ("BCAP") appealed the issuance of said alien
employment permit to the respondent Secretary of Labor who, on 23 April 1990, issued a decision ordering cancellation of
petitioner Cone's employment permit on the ground that there was no showing that there is no person in the Philippines
who is competent, able and willing to perform the services required nor that the hiring of petitioner Cone would redound to
the national interest.

Petitioner GMC filed a Motion for Reconsideration and two (2) Supplemental Motions for Reconsideration but said Motions
were denied by Acting Secretary of Labor Bienvenido E. Laguesma in an Order dated 8 June 1990.

Petitioners are now before the Court on a Petition for Certiorari, dated 14 June 1990, alleging that:

1. respondent Secretary of Labor gravely abused his discretion when he revoked petitioner Cone's alien
employment permit; and

2. Section 6 (c), Rule XIV, Book I of the Omnibus Rules Implementing the Labor Code is null and void as it is in
violation of the enabling law as the Labor Code does not empower respondent Secretary to determine if the
employment of an alien would redound to national interest.

Deliberating on the present Petition for Certiorari, the Court considers that petitioners have failed to show any grave
abuse of discretion or any act without or in excess of jurisdiction on the part of respondent Secretary of Labor in rendering
his decision, dated 23 April 1990, revoking petitioner Cone's Alien Employment Permit.

The alleged failure to notify petitioners of the appeal filed by private respondent BCAP was cured when petitioners were
allowed to file their Motion for Reconsideration before respondent Secretary of Labor. 1

Petitioner GMC's claim that hiring of a foreign coach is an employer's prerogative has no legal basis at all. Under Article
40 of the Labor Code, an employer seeking employment of an alien must first obtain an employment permit from the
Department of Labor. Petitioner GMC's right to choose whom to employ is, of course, limited by the statutory requirement
of an alien employment permit.
Petitioners will not find solace in the equal protection clause of the Constitution. As pointed out by the Solicitor-General,
no comparison can be made between petitioner Cone and Mr. Norman Black as the latter is "a long time resident of the
country," and thus, not subject to the provisions of Article 40 of the Labor Code which apply only to "non-resident aliens."
In any case, the term "non-resident alien" and its obverse "resident alien," here must be given their technical connotation
under our law on immigration.

Neither can petitioners validly claim that implementation of respondent Secretary's decision would amount to an
impairment of the obligations of contracts. The provisions of the Labor Code and its Implementing Rules and Regulations
requiring alien employment permits were in existence long before petitioners entered into their contract of employment. It
is firmly settled that provisions of applicable laws, especially provisions relating to matters affected with public policy, are
deemed written into contracts.2 Private parties cannot constitutionally contract away the otherwise applicable provisions of
law.

Petitioners' contention that respondent Secretary of Labor should have deferred to the findings of Commission on
Immigration and Deportation as to the necessity of employing petitioner Cone, is, again, bereft of legal basis. The Labor
Code itself specifically empowers respondent Secretary to make a determination as to the availability of the services of a
"person in the Philippines who is competent, able and willing at the time of application to perform the services for which an
alien is desired."3

In short, the Department of Labor is the agency vested with jurisdiction to determine the question of availability of local
workers. The constitutional validity of legal provisions granting such jurisdiction and authority and requiring proof of non-
availability of local nationals able to carry out the duties of the position involved, cannot be seriously questioned.

Petitioners apparently also question the validity of the Implementing Rules and Regulations, specifically Section 6 (c),
Rule XIV, Book I of the Implementing Rules, as imposing a condition not found in the Labor Code itself. Section 6 (c),
Rule XIV, Book I of the Implementing Rules, provides as follows:

Section 6. Issuance of Employment Permit –– the Secretary of Labor may issue an employment permit to the
applicant based on:

a) Compliance by the applicant and his employer with the requirements of Section 2 hereof;

b) Report of the Bureau Director as to the availability or non-availability of any person in the Philippines who is
competent and willing to do the job for which the services of the applicant are desired.

(c) His assessment as to whether or not the employment of the applicant will redound to the national interest;

(d) Admissibility of the alien as certified by the Commission on Immigration and Deportation;

(e) The recommendation of the Board of Investments or other appropriate government agencies if the applicant
will be employed in preferred areas of investments or in accordance with the imperative of economic
development;

x x x           x x x          x x x

(Emphasis supplied)

Article 40 of the Labor Code reads as follows:

Art. 40. Employment per unit of non-resident aliens. –– Any alien seeking admission to the Philippines for
employment purposes and any domestic or foreign employer who desires to engage an alien for employment in
the Philippines shall obtain an employment permit from the Department of Labor.

The employment permit may be issued to a non-resident alien or to the applicant employer after a determination
of the non-availability of a person in the Philippines who is competent, able and willing at the time of application to
perform the services for which the alien is desired.

For an enterprise registered in preferred areas of investments, said employment permit may be issued upon
recommendation of the government agency charged with the supervision of said registered enterprise. (Emphasis
supplied)

Petitioners apparently suggest that the Secretary of Labor is not authorized to take into account the question of whether or
not employment of an alien applicant would "redound to the national interest" because Article 40 does not explicitly refer
to such assessment. This argument (which seems impliedly to concede that the relationship of basketball coaching and
the national interest is tenuous and unreal) is not persuasive. In the first place, the second paragraph of Article 40 says:
"[t]he employment permit may be issued to a non-resident alien or to the applicant employer after a determination of the
non-availability of a person in the Philippines who is competent, able and willing at the time of application to perform the
services for which the alien is desired." The permissive language employed in the Labor Code indicates that the authority
granted involves the exercise of discretion on the part of the issuing authority. In the second place, Article 12 of the Labor
Code sets forth a statement of objectives that the Secretary of Labor should, and indeed must, take into account in
exercising his authority and jurisdiction granted by the Labor Code,
 Art. 12. Statement of Objectives. –– It is the policy of the State:

a) To promote and maintain a state of full employment through improved manpower training, allocation and
utilization;

x x x           x x x          x x x

c) To facilitate a free choice of available employment by persons seeking work in conformity with the national
interest;

d) To facilitate and regulate the movement of workers in conformity with the national interest;

e) To regulate the employment of aliens, including the establishment of a registration and/or work permit system;

x x x           x x x          x x x

Thus, we find petitioners' arguments on the above points of constitutional law too insubstantial to require further
consideration.1avvphi1

Petitioners have very recently manifested to this Court that public respondent Secretary of Labor has reversed his earlier
decision and has issued an Employment Permit to petitioner Cone. Petitioners seek to withdraw their Petition
for Certiorari on the ground that it has become moot and academic.

While ordinarily this Court would dismiss a petition that clearly appears to have become moot and academic, the
circumstances of this case and the nature of the questions raised by petitioners are such that we do not feel justified in
leaving those questions unanswered.4

Moreover, assuming that an alien employment permit has in fact been issued to petitioner Cone, the basis of the reversal
by the Secretary of Labor of his earlier decision does not appear in the record. If such reversal is based on some view of
constitutional law or labor law different from those here set out, then such employment permit, if one has been issued,
would appear open to serious legal objections.

ACCORDINGLY, the Court Resolved to DISMISS the Petition for certiorari for lack of merit. Costs against petitioners.
 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 100641 June 14, 1993

FARLE P. ALMODIEL, petitioner, 
vs.
NATIONAL LABOR RELATIONS COMMISSION (FIRST DIVISION), RAYTHEON PHILS., INC., respondents.

Apolinario Lomabao, Jr. for petitioner.

Vicente A. Cruz, Jr., for private respondent.

NOCON, J.:

Subject of this petition for certiorari is the decision dated March 21, 1991 of the National Labor Relations Commission in
NLRC Case No. 
00-00645-89 which reversed and set aside the Labor Arbiter's decision dated September 27, 1989 and ordered instead
the payment of separation pay and financial assistance of P100,000.00. Petitioner imputes grave abuse of discretion on
the part of the Commission and prays for the reinstatement of the Labor Arbiter's decision which declared his termination
on the ground of redundancy illegal.

Petitioner Farle P. Almodiel is a certified public accountant who was hired in October, 1987 as Cost Accounting Manager
of respondent Raytheon Philippines, Inc. through a reputable placement firm, John Clements Consultants, Inc. with a
starting monthly salary of P18,000.00. Before said employment, he was the accounts executive of Integrated
Microelectronics, Inc. for several years. He left his lucrative job therein in view of the promising career offered by
Raytheon. He started as a probationary or temporary employee. As Cost Accounting Manager, his major duties were: (1)
plan, coordinate and carry out year and physical inventory; (2) formulate and issue out hard copies of Standard Product
costing and other cost/pricing analysis if needed and required and (3) set up the written Cost Accounting System for the
whole company. After a few months, he was given a regularization increase of P1,600.00 a month. Not long thereafter, his
salary was increased to P21,600.00 a month.

On August 17, 1988, he recommended and submitted a Cost Accounting/Finance Reorganization, affecting the whole
finance group but the same was disapproved by the Controller. However, he was assured by the Controller that should his
position or department which was apparently a one-man department with no staff becomes untenable or unable to deliver
the needed service due to manpower constraint, he would be given a three (3) year advance notice.

In the meantime, the standard cost accounting system was installed and used at the Raytheon plants and subsidiaries
worldwide. It was likewise adopted and installed in the Philippine operations. As a consequence, the services of a Cost
Accounting Manager allegedly entailed only the submission of periodic reports that would use computerized forms
prescribed and designed by the international head office of the Raytheon Company in California, USA.

On January 27, 1989, petitioner was summoned by his immediate boss and in the presence of IRD Manager, Mr. Rolando
Estrada, he was told of the abolition of his position on the ground of redundancy. He pleaded with management to defer
its action or transfer him to another department, but he was told that the decision of management was final and that the
same has been conveyed to the Department of Labor and Employment. Thus, he was constrained to file the complaint for
illegal dismissal before the Arbitration Branch of the National Capital Region, NLRC, Department of Labor and
Employment.

On September 27, 1989, Labor Arbiter Daisy Cauton-Barcelona rendered a decision, the dispositive portion of which
reads as follows:

WHEREFORE, judgment is hereby rendered declaring that complainant's termination on the ground of
redundancy is highly irregular and without legal and factual basis, thus ordering the respondents to
reinstate complainant to his former position with full backwages without lost of seniority rights and other
benefits. Respondents are further ordered to pay complainant P200,000.00 as moral damages and
P20,000.00 as exemplary damages, plus ten percent (10%) of the total award as attorney's fees. 1

Raytheon appealed therefrom on the grounds that the Labor Arbiter committed grave abuse of discretion in denying its
rights to dismiss petitioner on the ground of redundancy, in relying on baseless surmises and self-serving assertions of
the petitioner that its act was tainted with malice and bad faith and in awarding moral and exemplary damages and
attorney's fees.
On March 21, 1991, the NLRC reversed the decision and directed Raytheon to pay petitioner the total sum of
P100,000.00 as separation pay/financial assistance. The dispositive portion of which is hereby quoted as follows:

WHEREFORE, the appealed decision is hereby set aside. In its stead, Order is hereby issued directing
respondent to pay complainant the total separation pay/financial assistance of One Hundred Thousand
Pesos (P100,000.00).

SO ORDERED.2

From this decision, petitioner filed the instant petition averring that:

The public respondent committed grave abuse of discretion amounting to (lack of) or in excess of
jurisdiction in declaring as valid and justified the termination of petitioner on the ground of redundancy in
the face of clearly established finding that petitioner's termination was tainted with malice, bad faith and
irregularity.3

Termination of an employee's services because of redundancy is governed by Article 283 of the Labor Code which
provides as follows:

Art. 283. Closure of establishment and reduction of personnel. — The employer may also terminate the
employment of any employee due to installation of labor-saving devices, redundancy, retrenchment to
prevent losses or the closing or cessation of operation of the establishment or undertaking unless the
closing is for the purpose of circumventing the provisions of this Title, by serving a written notice on the
worker and the Department of Labor and Employment at least one (1) month before the intended date
thereof. In case of termination due to installation of labor-saving devices or redundancy, the worker
affected thereby shall be entitled to a separation pay equivalent to at least one (1) month pay for every
year of service, whichever is higher. In case of retrenchment to prevent losses and in cases of closure or
cessation of operations of establishment or undertaking not due to serious business losses or financial
reverses, the separation pay shall be equivalent to at least one (1) month pay or at least one-half (1/2)
month pay for every year of service, whichever is higher. A fraction of at least six (6) months shall be
considered as one (1) whole year.

There is no dispute that petitioner was duly advised, one (1) month before, of the termination of his employment on the
ground of redundancy in a written notice by his immediate superior, Mrs. Magdalena B.D. Lopez sometime in the
afternoon of January 27, 1989. He was issued a check for P54,863.00 representing separation pay but in view of his
refusal to acknowledge the notice and the check, they were sent to him thru registered mail on January 30, 1989. The
Department of Labor and Employment was served a copy of the notice of termination of petitioner in accordance with the
pertinent provisions of the Labor Code and the implementing rules.

The crux of the controversy lies on whether bad faith, malice and irregularity crept in the abolition of petitioner's position of
Cost Accounting Manager on the ground of redundancy. Petitioner claims that the functions of his position were absorbed
by the Payroll/Mis/Finance Department under the management of Danny Ang Tan Chai, a resident alien without any
working permit from the Department of Labor and Employment as required by law. Petitioner relies on the testimony of
Raytheon's witness to the effect that corollary functions appertaining to cost accounting were dispersed to other units in
the Finance Department. And granting that his department has to be declared redundant, he claims that he should have
been the Manager of the Payroll/Mis/Finance Department which handled general accounting, payroll and encoding. As a
B. S. Accounting graduate, a CPA with M.B.A. units, 21 years of work experience, and a natural born Filipino, he claims
that he is better qualified than Ang Tan Chai, a B.S. Industrial Engineer, hired merely as a Systems Analyst Programmer
or its equivalent in early 1987, promoted as MIS Manager only during the middle part of 1988 and a resident alien.

On the other hand, Raytheon insists that petitioner's functions as Cost Accounting Manager had not been absorbed by
Ang Tan Chai, a permanent resident born in this country. It claims to have established below that Ang Tan Chai did not
displace petitioner or absorb his functions and duties as they were occupying entirely different and distinct positions
requiring different sets of expertise or qualifications and discharging functions altogether different and foreign from that of
petitioner's abolished position. Raytheon debunks petitioner's reliance on the testimony of Mr. Estrada saying that the
same witness testified under oath that the functions of the Cost Accounting Manager had been completely dispensed with
and the position itself had been totally abolished.

Whether petitioner's functions as Cost Accounting Manager have been dispensed with or merely absorbed by another is
however immaterial. Thus, notwithstanding the dearth of evidence on the said question, a resolution of this case can be
arrived at without delving into this matter. For even conceding that the functions of petitioner's position were merely
transferred, no malice or bad faith can be imputed from said act. A survey of existing case law will disclose that
in Wiltshire File Co., Inc. v. NLRC,4 the position of Sales Manager was abolished on the ground of redundancy as the
duties previously discharged by the Sales Manager simply added to the duties of the General Manager to whom the Sales
Manager used to report. In adjudging said termination as legal, this Court said that redundancy, for purposes of our Labor
Code, exists where the services of an employee are in excess of what is reasonably demanded by the actual
requirements of the enterprise. The characterization of an employee's services as no longer necessary or sustainable,
and therefore, properly terminable, was an exercise of business judgment on the part of the employer. The wisdom or
soundness of such characterization or decision was not subject to discretionary review on the part of the Labor Arbiter nor
of the NLRC so long, of course, as violation of law or merely arbitrary and malicious action is not shown.
In the case of International Macleod, Inc. v. Intermediate Appellate Court,5 this Court also considered the position of
Government Relations Officer to have become redundant in view of the appointment of the International Heavy Equipment
Corporation as the company's dealer with the government. It held therein that the determination of the need for the
phasing out of a department as a labor and cost saving device because it was no longer economical to retain said
services is a management prerogative and the courts will not interfere with the exercise thereof as long as no abuse of
discretion or merely arbitrary or malicious action on the part of management is shown.

In the same vein, this Court ruled in Bondoc v. People's Bank and Trust Co.,6 that the bank's board of directors possessed
the power to remove a department manager whose position depended on the retention of the trust and confidence of
management and whether there was need for his services. Although some vindictive motivation might have impelled the
abolition of his position, this Court expounded that it is undeniable that the bank's board of directors possessed the power
to remove him and to determine whether the interest of the bank justified the existence of his department.

Indeed, an employer has no legal obligation to keep more employees than are necessary for the operation of its business.
Petitioner does not dispute the fact that a cost accounting system was installed and used at Raytheon subsidiaries and
plants worldwide; and that the functions of his position involve the submission of periodic reports utilizing computerized
forms designed and prescribed by the head office with the installation of said accounting system. Petitioner attempts to
controvert these realities by alleging that some of the functions of his position were still indispensable and were actually
dispersed to another department. What these indispensable functions that were dispersed, he failed however, to specify
and point out. Besides, the fact that the functions of a position were simply added to the duties of another does not affect
the legitimacy of the employer's right to abolish a position when done in the normal exercise of its prerogative to adopt
sound business practices in the management of its affairs.

Considering further that petitioner herein held a position which was definitely managerial in character, Raytheon had a
broad latitude of discretion in abolishing his position. An employer has a much wider discretion in terminating employment
relationship of managerial personnel compared to rank and file employees. 7 The reason obviously is that officers in such
key positions perform not only functions which by nature require the employer's full trust and confidence but also functions
that spell the success or failure of an enterprise.

Likewise destitute of merit is petitioner's imputation of unlawful discrimination when Raytheon caused corollary functions
appertaining to cost accounting to be absorbed by Danny Ang Tan Chai, a resident alien without a working permit. Article
40 of the Labor Code which requires employment permit refers to non-resident aliens. The employment permit is required
for entry into the country for employment purposes and is issued after determination of the non-availability of a person in
the Philippines who is competent, able and willing at the time of application to perform the services for which the alien is
desired. Since Ang Tan Chai is a resident alien, he does not fall within the ambit of the provision.

Petitioner also assails Raytheon's choice of Ang Tan Chai to head the Payroll/Mis/Finance Department, claiming that he is
better qualified for the position. It should be noted, however, that Ang Tan Chai was promoted to the position during the
middle part of 1988 or before the abolition of petitioner's position in early 1989. Besides the fact that Ang Tan Chai's
promotion thereto is a settled matter, it has been consistently held that an objection founded on the ground that one has
better credentials over the appointee is frowned upon so long as the latter possesses the minimum qualifications for the
position. In the case at bar, since petitioner does not allege that Ang Tan Chai does not qualify for the position, the Court
cannot substitute its discretion and judgment for that which is clearly and exclusively management prerogative. To do so
would take away from the employer what rightly belongs to him as aptly explained in National Federation of Labor Unions
v. NLRC:8

It is a well-settled rule that labor laws do not authorize interference with the employer's judgment in the
conduct of his business. The determination of the qualification and fitness of workers for hiring and firing,
promotion or reassignment are exclusive prerogatives of management. The Labor Code and its
implementing Rules do not vest in the Labor Arbiters nor in the different Divisions of the NLRC (nor in the
courts) managerial authority. The employer is free to determine, using his own discretion and business
judgment, all elements of employment, "from hiring to firing" except in cases of unlawful discrimination or
those which may be provided by law. There is none in the instant case.

Finding no grave abuse of discretion on the part of the National Labor Relations Commission in reversing and annulling
the decision of the Labor Arbiter and that on the contrary, the termination of petitioner's employment was anchored on a
valid and authorized cause under Article 283 of the Labor Code, the instant petition for certiorari must fail.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. Nos. 178034 & 178117 G R. Nos. 186984-85               October 17, 2013

ANDREW JAMES MCBURNIE, Petitioner, 

vs.
EULALIO GANZON, EGI-MANAGERS, INC. and E. GANZON, INC., Respondents.

RESOLUTION

REYES, J.:

For resolution are the –

(1) third motion for reconsideration1 filed by Eulalio Ganzon (Ganzon), EGI-Managers, Inc. (EGI) and E. Ganzon,
Inc. (respondents) on March 27, 2012, seeking a reconsideration of the Court’s Decision 2 dated September 18,
2009 that ordered the dismissal of their appeal to the National Labor Relations Commission (NLRC) for failure to
post additional appeal bond in the amount of ₱54,083,910.00; and

(2) motion for reconsideration3 filed by petitioner Andrew James McBurnie (McBurnie) on September 26, 2012,
assailing the Court en banc’s Resolution4 dated September 4, 2012 that (1) accepted the case from the Court’s
Third Division and (2) enjoined the implementation of the Labor Arbiter’s (LA) decision finding him to be illegally
dismissed by the respondents.

Antecedent Facts

The Decision dated September 18, 2009 provides the following antecedent facts and proceedings –

On October 4, 2002, McBurnie, an Australian national, instituted a complaint for illegal dismissal and other monetary
claims against the respondents. McBurnie claimed that on May 11, 1999, he signed a five-year employment
agreement5 with the company EGI as an Executive Vice-President who shall oversee the management of the company’s
hotels and resorts within the Philippines. He performed work for the company until sometime in November 1999, when he
figured in an accident that compelled him to go back to Australia while recuperating from his injuries. While in Australia, he
was informed by respondent Ganzon that his services were no longer needed because their intended project would no
longer push through.

The respondents opposed the complaint, contending that their agreement with McBurnie was to jointly invest in and
establish a company for the management of hotels. They did not intend to create an employer-employee relationship, and
the execution of the employment contract that was being invoked by McBurnie was solely for the purpose of allowing
McBurnie to obtain an alien work permit in the Philippines. At the time McBurnie left for Australia for his medical treatment,
he had not yet obtained a work permit.

In a Decision6 dated September 30, 2004, the LA declared McBurnie as having been illegally dismissed from employment,
and thus entitled to receive from the respondents the following amounts: (a) US$985,162.00 as salary and benefits for the
unexpired term of their employment contract, (b) ₱2,000,000.00 as moral and exemplary damages, and (c) attorney’s fees
equivalent to 10% of the total monetary award.

Feeling aggrieved, the respondents appealed the LA’s Decision to the NLRC. 7 On November 5, 2004, they filed their
Memorandum of Appeal8 and Motion to Reduce Bond9, and posted an appeal bond in the amount of ₱100,000.00. The
respondents contended in their Motion to Reduce Bond, inter alia, that the monetary awards of the LA were null and
excessive, allegedly with the intention of rendering them incapable of posting the necessary appeal bond. They claimed
that an award of "more than ₱60 Million Pesos to a single foreigner who had no work permit and who left the country for
good one month after the purported commencement of his employment" was a patent nullity. 10Furthermore, they claimed
that because of their business losses that may be attributed to an economic crisis, they lacked the capacity to pay the
bond of almost ₱60 Million, or even the millions of pesos in premium required for such bond.

On March 31, 2005, the NLRC denied11 the motion to reduce bond, explaining that "in cases involving monetary award, an
employer seeking to appeal the [LA’s] decision to the Commission is unconditionally required by Art. 223, Labor Code to
post bond in the amount equivalent to the monetary award x x x." 12 Thus, the NLRC required from the respondents the
posting of an additional bond in the amount of ₱54,083,910.00.

When their motion for reconsideration was denied,13 the respondents decided to elevate the matter to the Court of
Appeals (CA) via the Petition for Certiorari and Prohibition (With Extremely Urgent Prayer for the Issuance of a
Preliminary Injunction and/or Temporary Restraining Order) 14 docketed as CA-G.R. SP No. 90845.
In the meantime, in view of the respondents’ failure to post the required additional bond, the NLRC dismissed their appeal
in a Resolution15 dated March 8, 2006. The respondents’ motion for reconsideration was denied on June 30, 2006. 16 This
prompted the respondents to file with the CA the Petition for Certiorari (With Urgent Prayers for the Immediate Issuance of
a Temporary Restraining Order and a Writ of Preliminary Injunction) 17 docketed as CA-G.R. SP No. 95916, which was
later consolidated with CA-G.R. SP No. 90845.

CA-G.R. SP Nos. 90845 and 95916

On February 16, 2007, the CA issued a Resolution18 granting the respondents’ application for a writ of preliminary
injunction. It directed the NLRC, McBurnie, and all persons acting for and under their authority to refrain from causing the
execution and enforcement of the LA’s decision in favor of McBurnie, conditioned upon the respondents’ posting of a bond
in the amount of ₱10,000,000.00. McBurnie sought reconsideration of the issuance of the writ of preliminary injunction,
but this was denied by the CA in its Resolution19 dated May 29, 2007.

McBurnie then filed with the Court a Petition for Review on Certiorari 20 docketed as G.R. Nos. 178034 and 178117,
assailing the CA Resolutions that granted the respondents’ application for the injunctive writ. On July 4, 2007, the Court
denied the petition on the ground of McBurnie’s failure to comply with the 2004 Rules on Notarial Practice and to
sufficiently show that the CA committed any reversible error. 21 A motion for reconsideration was denied with finality in a
Resolution22 dated October 8, 2007.

Unyielding, McBurnie filed a Motion for Leave (1) To File Supplemental Motion for Reconsideration and (2) To Admit the
Attached Supplemental Motion for Reconsideration,23 which was treated by the Court as a second motion for
reconsideration, a prohibited pleading under Section 2, Rule 56 of the Rules of Court. Thus, the motion for leave was
denied by the Court in a Resolution24 dated November 26, 2007. The Court’s Resolution dated July 4, 2007 then became
final and executory on November 13, 2007; accordingly, entry of judgment was made in G.R. Nos. 178034 and 178117. 25

In the meantime, the CA ruled on the merits of CA-G.R. SP No. 90845 and CA-G.R. SP No. 95916 and rendered its
Decision26 dated October 27, 2008, allowing the respondents’ motion to reduce appeal bond and directing the NLRC to
give due course to their appeal. The dispositive portion of the CA Decision reads:

WHEREFORE, in view of the foregoing, the petition for certiorari and prohibition docketed as CA GR SP No. 90845 and
the petition for certiorari docketed as CA GR SP No. 95916 are GRANTED. Petitioners’ Motion to Reduce Appeal Bond is
GRANTED. Petitioners are hereby DIRECTED to post appeal bond in the amount of ₱10,000,000.00. The NLRC is
hereby DIRECTED to give due course to petitioners’ appeal in CA GR SP No. 95916 which is ordered remanded to the
NLRC for further proceedings.

SO ORDERED.27

On the issue28 of the NLRC’s denial of the respondents’ motion to reduce appeal bond, the CA ruled that the NLRC
committed grave abuse of discretion in immediately denying the motion without fixing an appeal bond in an amount that
was reasonable, as it denied the respondents of their right to appeal from the decision of the LA. 29 The CA explained that
"(w)hile Art. 223 of the Labor Code requiring bond equivalent to the monetary award is explicit, Section 6, Rule VI of the
NLRC Rules of Procedure, as amended, recognized as exception a motion to reduce bond upon meritorious grounds and
upon posting of a bond in a reasonable amount in relation to the monetary award." 30

On the issue31 of the NLRC’s dismissal of the appeal on the ground of the respondents’ failure to post the additional
appeal bond, the CA also found grave abuse of discretion on the part of the NLRC, explaining that an appeal bond in the
amount of ₱54,083,910.00 was prohibitive and excessive. Moreover, the appellate court cited the pendency of the petition
for certiorari over the denial of the motion to reduce bond, which should have prevented the NLRC from immediately
dismissing the respondents’ appeal.32

Undeterred, McBurnie filed a motion for reconsideration. At the same time, the respondents moved that the appeal be
resolved on the merits by the CA. On March 3, 2009, the CA issued a Resolution 33 denying both motions. McBurnie then
filed with the Court the Petition for Review on Certiorari 34 docketed as G.R. Nos. 186984-85.

In the meantime, the NLRC, acting on the CA’s order of remand, accepted the appeal from the LA’s decision, and in its
Decision35 dated November 17, 2009, reversed and set aside the Decision of the LA, and entered a new one dismissing
McBurnie’s complaint. It explained that based on records, McBurnie was never an employee of any of the respondents,
but a potential investor in a project that included said respondents, barring a claim of dismissal, much less, an illegal
dismissal. Granting that there was a contract of employment executed by the parties, McBurnie failed to obtain a work
permit which would have allowed him to work for any of the respondents. 36 In the absence of such permit, the employment
agreement was void and thus, could not be the source of any right or obligation.

Court Decision dated September 18, 2009

On September 18, 2009, the Third Division of this Court rendered its Decision 37 which reversed the CA Decision dated
October 27, 2008 and Resolution dated March 3, 2009. The dispositive portion reads:

WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals in CA-G.R. SP Nos. 90845 and 95916
dated October 27, 2008 granting respondents’ Motion to Reduce Appeal Bond and ordering the National Labor Relations
Commission to give due course to respondents’ appeal, and its March 3, 2009 Resolution denying petitioner’s motion for
reconsideration, are REVERSED and SET ASIDE. The March 8, 2006 and June 30, 2006 Resolutions of the National
Labor Relations Commission in NLRC NCR CA NO. 042913-05 dismissing respondents’ appeal for failure to perfect an
appeal and denying their motion for reconsideration, respectively, are REINSTATED and AFFIRMED.

SO ORDERED.38

The Court explained that the respondents’ failure to post a bond equivalent in amount to the LA’s monetary award was
fatal to the appeal.39 Although an appeal bond may be reduced upon motion by an employer, the following conditions must
first be satisfied: (1) the motion to reduce bond shall be based on meritorious grounds; and (2) a reasonable amount in
relation to the monetary award is posted by the appellant. Unless the NLRC grants the motion to reduce the cash bond
within the 10-day reglementary period to perfect an appeal from a judgment of the LA, the employer is mandated to post
the cash or surety bond securing the full amount within the said 10-day period. 40 The respondents’ initial appeal bond of
₱100,000.00 was grossly inadequate compared to the LA’s monetary award.

The respondents’ first motion for reconsideration41 was denied by the Court for lack of merit via a Resolution 42dated
December 14, 2009.

Meanwhile, on the basis of the Court’s Decision, McBurnie filed with the NLRC a motion for reconsideration with motion to
recall and expunge from the records the NLRC Decision dated November 17, 2009. 43 The motion was granted by the
NLRC in its Decision44 dated January 14, 2010.45

Undaunted by the denial of their first motion for reconsideration of the Decision dated September 18, 2009, the
respondents filed with the Court a Motion for Leave to Submit Attached Second Motion for Reconsideration 46 and Second
Motion for Reconsideration,47 which motion for leave was granted in a Resolution48 dated March 15, 2010. McBurnie was
allowed to submit his comment on the second motion, and the respondents, their reply to the comment. On January 25,
2012, however, the Court issued a Resolution49 denying the second motion "for lack of merit," "considering that a second
motion for reconsideration is a prohibited pleading x x x." 50

The Court’s Decision dated September 18, 2009 became final and executory on March 14, 2012. Thus, entry of
judgment51 was made in due course, as follows:

ENTRY OF JUDGMENT

This is to certify that on September 18, 2009 a decision rendered in the above-entitled cases was filed in this Office, the
dispositive part of which reads as follows:

xxxx

and that the same has, on March 14, 2012 become final and executory and is hereby recorded in the Book of Entries of
Judgments.52

The Entry of Judgment indicated that the same was made for the Court’s Decision rendered in G.R. Nos. 186984-85.

On March 27, 2012, the respondents filed a Motion for Leave to File Attached Third Motion for Reconsideration, with an
attached Motion for Reconsideration (on the Honorable Court’s 25 January 2012 Resolution) with Motion to Refer These
Cases to the Honorable Court En Banc.53 The third motion for reconsideration is founded on the following grounds:

I.

THE PREVIOUS 15 MARCH 2010 RESOLUTION OF THE HONORABLE COURT ACTUALLY GRANTED
RESPONDENTS’ "MOTION FOR LEAVE TO SUBMIT A SECOND MOTION FOR RECONSIDERATION."

HENCE, RESPONDENTS RESPECTFULLY CONTEND THAT THE SUBSEQUENT 25 JANUARY 2012 RESOLUTION
CANNOT DENY THE " SECOND MOTION FOR RECONSIDERATION " ON THE GROUND THAT IT IS A PROHIBITED
PLEADING. MOREOVER, IT IS RESPECTFULLY CONTENDED THAT THERE ARE VERY PECULIAR
CIRCUMSTANCES AND NUMEROUS IMPORTANT ISSUES IN THESE CASES THAT CLEARLY JUSTIFY GIVING
DUE COURSE TO RESPONDENTS’ "SECOND MOTION FOR RECONSIDERATION," WHICH ARE:

II.

THE 10 MILLION PESOS BOND WHICH WAS POSTED IN COMPLIANCE WITH THE OCTOBER 27, 2008 DECISION
OF THE COURT OF APPEALS IS A SUBSTANTIAL AND SPECIAL MERITORIOUS CIRCUMSTANCE TO MERIT
RECONSIDERATION OF THIS APPEAL.

III.

THE HONORABLE COURT HAS HELD IN NUMEROUS LABOR CASES THAT WITH RESPECT TO ARTICLE 223 OF
THE LABOR CODE, THE REQUIREMENTS OF THE LAW SHOULD BE GIVEN A LIBERAL INTERPRETATION,
ESPECIALLY IF THERE ARE SPECIAL MERITORIOUS CIRCUMSTANCES AND ISSUES.
IV. THE LA’S JUDGMENT WAS PATENTLY VOID SINCE IT AWARDS MORE THAN ₱60 MILLION PESOS TO A
SINGLE FOREIGNER WHO HAD NO WORK PERMIT, AND NO WORKING VISA.

V.

PETITIONER MCBURNIE DID NOT IMPLEAD THE NATIONAL LABOR RELATIONS COMMISSION (NLRC) IN HIS
APPEAL HEREIN, MAKING THE APPEAL INEFFECTIVE AGAINST THE NLRC.

VI.

NLRC HAS DISMISSED THE COMPLAINT OF PETITIONER MCBURNIE IN ITS NOVEMBER 17, 2009 DECISION.

VII.

THE HONORABLE COURT’S 18 SEPTEMBER 2009 DECISION WAS TAINTED WITH VERY SERIOUS
IRREGULARITIES.

VIII.

GR NOS. 178034 AND 178117 HAVE BEEN INADVERTENTLY INCLUDED IN THIS CASE.

IX.

THE HONORABLE COURT DID NOT DULY RULE UPON THE OTHER VERY MERITORIOUS ARGUMENTS OF THE
RESPONDENTS WHICH ARE AS FOLLOWS:

(A) PETITIONER NEVER ATTENDED ANY OF ALL 14 HEARINGS BEFORE THE [LA] (WHEN 2 MISSED
HEARINGS MEAN DISMISSAL).

(B) PETITIONER REFERRED TO HIMSELF AS A "VICTIM" OF LEISURE EXPERTS, INC., BUT NOT OF ANY
OF THE RESPONDENTS.

(C) PETITIONER’S POSITIVE LETTER TO RESPONDENT MR. EULALIO GANZON CLEARLY SHOWS THAT
HE WAS NOT ILLEGALLY DISMISSED NOR EVEN DISMISSED BY ANY OF THE RESPONDENTS AND
PETITIONER EVEN PROMISED TO PAY HIS DEBTS FOR ADVANCES MADE BY RESPONDENTS.

(D) PETITIONER WAS NEVER EMPLOYED BY ANY OF THE RESPONDENTS. PETITIONER PRESENTED
WORK FOR CORONADO BEACH RESORT WHICH IS [NEITHER] OWNED NOR CONNECTED WITH ANY OF
THE RESPONDENTS.

(E) THE [LA] CONCLUDED THAT PETITIONER WAS DISMISSED EVEN IF THERE WAS ABSOLUTELY NO
EVIDENCE AT ALL PRESENTED THAT PETITIONER WAS DISMISSED BY THE RESPONDENTS.

(F) PETITIONER LEFT THE PHILIPPINES FOR AUSTRALIA JUST 2 MONTHS AFTER THE START OF THE
ALLEGED EMPLOYMENT AGREEMENT, AND HAS STILL NOT RETURNED TO THE PHILIPPINES AS
CONFIRMED BY THE BUREAU OF IMMIGRATION.

(G) PETITIONER COULD NOT HAVE SIGNED AND PERSONALLY APPEARED BEFORE THE NLRC
ADMINISTERING OFFICER AS INDICATED IN THE COMPLAINT SHEET SINCE HE LEFT THE COUNTRY 3
YEARS BEFORE THE COMPLAINT WAS FILED AND HE NEVER CAME BACK. 54

On September 4, 2012, the Court en banc55 issued a Resolution56 accepting the case from the Third Division. It also
issued a temporary restraining order (TRO) enjoining the implementation of the LA’s Decision dated September 30, 2004.
This prompted McBurnie’s filing of a Motion for Reconsideration, 57 where he invoked the fact that the Court’s Decision
dated September 18, 2009 had become final and executory, with an entry of judgment already made by the Court.

Our Ruling

In light of pertinent law and jurisprudence, and upon taking a second hard look of the parties’ arguments and the records
of the case, the Court has ascertained that a reconsideration of this Court’s Decision dated September 18, 2009 and
Resolutions dated December 14, 2009 and January 25, 2012, along with the lifting of the entry of judgment in G.R. No.
186984-85, is in order.

The Court’s acceptance of the

third motion for reconsideration

At the outset, the Court emphasizes that second and subsequent motions for reconsideration are, as a general rule,
prohibited. Section 2, Rule 52 of the Rules of Court provides that "no second motion for reconsideration of a judgment or
final resolution by the same party shall be entertained." The rule rests on the basic tenet of immutability of judgments. "At
some point, a decision becomes final and executory and, consequently, all litigations must come to an end." 58

The general rule, however, against second and subsequent motions for reconsideration admits of settled exceptions. For
one, the present Internal Rules of the Supreme Court, particularly Section 3, Rule 15 thereof, provides:

Sec. 3. Second motion for reconsideration. ― The Court shall not entertain a second motion for reconsideration, and any
exception to this rule can only be granted in the higher interest of justice by the Court en banc upon a vote of at least two-
thirds of its actual membership. There is reconsideration "in the higher interest of justice" when the assailed decision is not
only legally erroneous, but is likewise patently unjust and potentially capable of causing unwarranted and irremediable
injury or damage to the parties. A second motion for reconsideration can only be entertained before the ruling sought to
be reconsidered becomes final by operation of law or by the Court’s declaration.

x x x x (Emphasis ours)

In a line of cases, the Court has then entertained and granted second motions for reconsideration "in the higher interest of
substantial justice," as allowed under the Internal Rules when the assailed decision is "legally erroneous," "patently
unjust" and "potentially capable of causing unwarranted and irremediable injury or damage to the parties." In Tirazona v.
Philippine EDS Techno-Service, Inc. (PET, Inc.),59 we also explained that a second motion for reconsideration may be
allowed in instances of "extraordinarily persuasive reasons and only after an express leave shall have been obtained." 60 In
Apo Fruits Corporation v. Land Bank of the Philippines, 61 we allowed a second motion for reconsideration as the issue
involved therein was a matter of public interest, as it pertained to the proper application of a basic constitutionally-
guaranteed right in the government’s implementation of its agrarian reform program. In San Miguel Corporation v.
NLRC,62 the Court set aside the decisions of the LA and the NLRC that favored claimants-security guards upon the
Court’s review of San Miguel Corporation’s second motion for reconsideration. In Vir-Jen Shipping and Marine Services,
Inc. v. NLRC, et al.,63 the Court en banc reversed on a third motion for reconsideration the ruling of the Court’s Division on
therein private respondents’ claim for wages and monetary benefits.

It is also recognized that in some instances, the prudent action towards a just resolution of a case is for the Court to
suspend rules of procedure, for "the power of this Court to suspend its own rules or to except a particular case from its
operations whenever the purposes of justice require it, cannot be questioned." 64 In De Guzman v. Sandiganbayan,65 the
Court, thus, explained:

The rules of procedure should be viewed as mere tools designed to facilitate the attainment of justice. Their strict and rigid
application, which would result in technicalities that tend to frustrate rather than promote substantial justice, must always
be avoided. Even the Rules of Court envision this liberality. This power to suspend or even disregard the rules can be so
pervasive and encompassing so as to alter even that which this Court itself has already declared to be final, as we are
now compelled to do in this case. x x x.

xxxx

The Rules of Court was conceived and promulgated to set forth guidelines in the dispensation of justice but not to bind
and chain the hand that dispenses it, for otherwise, courts will be mere slaves to or robots of technical rules, shorn of
judicial discretion. That is precisely why courts in rendering real justice have always been, as they in fact ought to be,
conscientiously guided by the norm that when on the balance, technicalities take a backseat against substantive rights,
and not the other way around. Truly then, technicalities, in the appropriate language of Justice Makalintal, "should give
way to the realities of the situation." x x x.66 (Citations omitted)

Consistent with the foregoing precepts, the Court has then reconsidered even decisions that have attained finality, finding
it more appropriate to lift entries of judgments already made in these cases. In Navarro v. Executive Secretary, 67 we
reiterated the pronouncement in De Guzman that the power to suspend or even disregard rules of procedure can be so
pervasive and compelling as to alter even that which this Court itself has already declared final. The Court then recalled in
Navarro an entry of judgment after it had determined the validity and constitutionality of Republic Act No. 9355, explaining
that:

Verily, the Court had, on several occasions, sanctioned the recall of entries of judgment in light of attendant extraordinary
circumstances. The power to suspend or even disregard rules of procedure can be so pervasive and compelling as to
alter even that which this Court itself had already declared final. In this case, the compelling concern is not only to afford
the movants-intervenors the right to be heard since they would be adversely affected by the judgment in this case despite
not being original parties thereto, but also to arrive at the correct interpretation of the provisions of the [Local Government
Code (LGC)] with respect to the creation of local government units. x x x. 68(Citations omitted)

In Munoz v. CA,69 the Court resolved to recall an entry of judgment to prevent a miscarriage of justice. This justification
was likewise applied in Tan Tiac Chiong v. Hon. Cosico,70 wherein the Court held that:

The recall of entries of judgments, albeit rare, is not a novelty. In Muñoz v. CA , where the case was elevated to this Court
and a first and second motion for reconsideration had been denied with finality , the Court, in the interest of substantial
justice, recalled the Entry of Judgment as well as the letter of transmittal of the records to the Court of Appeals. 71 (Citation
omitted)

In Barnes v. Judge Padilla,72 we ruled:

A final and executory judgment can no longer be attacked by any of the parties or be modified, directly or indirectly, even
by the highest court of the land.

However, this Court has relaxed this rule in order to serve substantial justice considering (a) matters of life, liberty, honor
or property, (b) the existence of special or compelling circumstances, (c) the merits of the case, (d) a cause not entirely
attributable to the fault or negligence of the party favored by the suspension of the rules, (e) a lack of any showing that the
review sought is merely frivolous and dilatory, and (f) the other party will not be unjustly prejudiced thereby. 73 (Citations
omitted)

As we shall explain, the instant case also qualifies as an exception to, first, the proscription against second and
subsequent motions for reconsideration, and second, the rule on immutability of judgments; a reconsideration of the
Decision dated September 18, 2009, along with the Resolutions dated December 14, 2009 and January 25, 2012, is
justified by the higher interest of substantial justice.

To begin with, the Court agrees with the respondents that the Court’s prior resolve to grant , and not just merely note, in a
Resolution dated March 15, 2010 the respondents’ motion for leave to submit their second motion for reconsideration
already warranted a resolution and discussion of the motion for reconsideration on its merits. Instead of doing this,
however, the Court issued on January 25, 2012 a Resolution 74 denying the motion to reconsider for lack of merit, merely
citing that it was a "prohibited pleading under Section 2, Rule 52 in relation to Section 4, Rule 56 of the 1997 Rules of Civil
Procedure, as amended."75 In League of Cities of the Philippines (LCP) v. Commission on Elections, 76 we reiterated a
ruling that when a motion for leave to file and admit a second motion for reconsideration is granted by the Court, the Court
therefore allows the filing of the second motion for reconsideration. In such a case, the second motion for reconsideration
is no longer a prohibited pleading. Similarly in this case, there was then no reason for the Court to still consider the
respondents’ second motion for reconsideration as a prohibited pleading, and deny it plainly on such ground. The Court
intends to remedy such error through this resolution.

More importantly, the Court finds it appropriate to accept the pending motion for reconsideration and resolve it on the
merits in order to rectify its prior disposition of the main issues in the petition. Upon review, the Court is constrained to rule
differently on the petitions. We have determined the grave error in affirming the NLRC’s rulings, promoting results that are
patently unjust for the respondents, as we consider the facts of the case, pertinent law, jurisprudence, and the degree of
the injury and damage to the respondents that will inevitably result from the implementation of the Court’s Decision dated
September 18, 2009.

The rule on appeal bonds

We emphasize that the crucial issue in this case concerns the sufficiency of the appeal bond that was posted by the
respondents. The present rule on the matter is Section 6, Rule VI of the 2011 NLRC Rules of Procedure, which was
substantially the same provision in effect at the time of the respondents’ appeal to the NLRC, and which reads:

RULE VI
APPEALS

Sec. 6. BOND. – In case the decision of the Labor Arbiter or the Regional Director involves a monetary award, an appeal
by the employer may be perfected only upon the posting of a cash or surety bond. The appeal bond shall either be in cash
or surety in an amount equivalent to the monetary award, exclusive of damages and attorney’s fees.

xxxx

No motion to reduce bond shall be entertained except on meritorious grounds and upon the posting of a bond in a
reasonable amount in relation to the monetary award.

The filing of the motion to reduce bond without compliance with the requisites in the preceding paragraph shall not stop
the running of the period to perfect an appeal. (Emphasis supplied)

While the CA, in this case, allowed an appeal bond in the reduced amount of ₱10,000,000.00 and then ordered the case’s
remand to the NLRC, this Court’s Decision dated September 18, 2009 provides otherwise, as it reads in part:

The posting of a bond is indispensable to the perfection of an appeal in cases involving monetary awards from the
decision of the Labor Arbiter. The lawmakers clearly intended to make the bond a mandatory requisite for the perfection of
an appeal by the employer as inferred from the provision that an appeal by the employer may be perfected "only upon the
posting of a cash or surety bond." The word "only" makes it clear that the posting of a cash or surety bond by the
employer is the essential and exclusive means by which an employer’s appeal may be perfected. x x x.

Moreover, the filing of the bond is not only mandatory but a jurisdictional requirement as well, that must be complied with
in order to confer jurisdiction upon the NLRC. Non-compliance therewith renders the decision of the Labor Arbiter final
and executory. This requirement is intended to assure the workers that if they prevail in the case, they will receive the
money judgment in their favor upon the dismissal of the employer’s appeal. It is intended to discourage employers from
using an appeal to delay or evade their obligation to satisfy their employees’ just and lawful claims.

xxxx
Thus, it behooves the Court to give utmost regard to the legislative and administrative intent to strictly require the
employer to post a cash or surety bond securing the full amount of the monetary award within the 10[-]day reglementary
period. Nothing in the Labor Code or the NLRC Rules of Procedure authorizes the posting of a bond that is less than the
monetary award in the judgment, or would deem such insufficient posting as sufficient to perfect the appeal.

While the bond may be reduced upon motion by the employer, this is subject to the conditions that (1) the motion to
reduce the bond shall be based on meritorious grounds; and (2) a reasonable amount in relation to the monetary award is
posted by the appellant, otherwise the filing of the motion to reduce bond shall not stop the running of the period to perfect
an appeal. The qualification effectively requires that unless the NLRC grants the reduction of the cash bond within the 10-
day reglementary period, the employer is still expected to post the cash or surety bond securing the full amount within the
said 10-day period. If the NLRC does eventually grant the motion for reduction after the reglementary period has elapsed,
the correct relief would be to reduce the cash or surety bond already posted by the employer within the 10-day
period.77 (Emphasis supplied; underscoring ours)

To begin with, the Court rectifies its prior pronouncement – the unqualified statement that even an appellant who seeks a
reduction of an appeal bond before the NLRC is expected to post a cash or surety bond securing the full amount of the
judgment award within the 10-day reglementary period to perfect the appeal.

The suspension of the period to

perfect the appeal upon the filing of
a motion to reduce bond

To clarify, the prevailing jurisprudence on the matter provides that the filing of a motion to reduce bond, coupled with
compliance with the two conditions emphasized in Garcia v. KJ Commercial 78 for the grant of such motion, namely, (1) a
meritorious ground, and (2) posting of a bond in a reasonable amount, shall suffice to suspend the running of the period to
perfect an appeal from the labor arbiter’s decision to the NLRC. 79 To require the full amount of the bond within the 10-day
reglementary period would only render nugatory the legal provisions which allow an appellant to seek a reduction of the
bond. Thus, we explained in Garcia:

The filing of a motion to reduce bond and compliance with the two conditions stop the running of the period to perfect an
appeal. x x x

xxxx

The NLRC has full discretion to grant or deny the motion to reduce bond, and it may rule on the motion beyond the 10-day
period within which to perfect an appeal. Obviously, at the time of the filing of the motion to reduce bond and posting of a
bond in a reasonable amount, there is no assurance whether the appellant’s motion is indeed based on "meritorious
ground" and whether the bond he or she posted is of a "reasonable amount." Thus, the appellant always runs the risk of
failing to perfect an appeal.

x x x In order to give full effect to the provisions on motion to reduce bond, the appellant must be allowed to wait for the
ruling of the NLRC on the motion even beyond the 10-day period to perfect an appeal. If the NLRC grants the motion and
rules that there is indeed meritorious ground and that the amount of the bond posted is reasonable, then the appeal is
perfected. If the NLRC denies the motion, the appellant may still file a motion for reconsideration as provided under
Section 15, Rule VII of the Rules. If the NLRC grants the motion for reconsideration and rules that there is indeed
meritorious ground and that the amount of the bond posted is reasonable, then the appeal is perfected. If the NLRC
denies the motion, then the decision of the labor arbiter becomes final and executory.

xxxx

In any case, the rule that the filing of a motion to reduce bond shall not stop the running of the period to perfect an appeal
is not absolute. The Court may relax the rule. In Intertranz Container Lines, Inc. v. Bautista, the Court held:

"Jurisprudence tells us that in labor cases, an appeal from a decision involving a monetary award may be perfected only
upon the posting of cash or surety bond. The Court, however, has relaxed this requirement under certain exceptional
circumstances in order to resolve controversies on their merits. These circumstances include: (1) fundamental
consideration of substantial justice; (2) prevention of miscarriage of justice or of unjust enrichment; and (3) special
circumstances of the case combined with its legal merits, and the amount and the issue involved." 80(Citations omitted and
emphasis ours)

A serious error of the NLRC was its outright denial of the motion to reduce the bond, without even considering the
respondents’ arguments and totally unmindful of the rules and jurisprudence that allow the bond’s reduction. Instead of
resolving the motion to reduce the bond on its merits, the NLRC insisted on an amount that was equivalent to the
monetary award, merely explaining:

We are constrained to deny respondents’ motion for reduction. As held by the Supreme Court in a recent case, in cases
involving monetary award, an employer seeking to appeal the Labor Arbiter’s decision to the Commission is
unconditionally required by Art. 223, Labor Code to post bond in the amount equivalent to the monetary award (Calabash
Garments vs. NLRC, G.R. No. 110827, August 8, 1996). x x x 81 (Emphasis ours)

When the respondents sought to reconsider, the NLRC still refused to fully decide on the motion. It refused to at least
make a preliminary determination of the merits of the appeal, as it held:
We are constrained to dismiss respondents’ Motion for Reconsideration. Respondents’ contention that the appeal bond is
excessive and based on a decision which is a patent nullity involves the merits of the case. x x x 82

Prevailing rules and jurisprudence

allow the reduction of appeal bonds.

By such haste of the NLRC in peremptorily denying the respondents’ motion without considering the respondents’
arguments, it effectively denied the respondents of their opportunity to seek a reduction of the bond even when the same
is allowed under the rules and settled jurisprudence. It was equivalent to the NLRC’s refusal to exercise its discretion, as it
refused to determine and rule on a showing of meritorious grounds and the reasonableness of the bond tendered under
the circumstances.83 Time and again, the Court has cautioned the NLRC to give Article 223 of the Labor Code, particularly
the provisions requiring bonds in appeals involving monetary awards, a liberal interpretation in line with the desired
objective of resolving controversies on the merits. 84 The NLRC’s failure to take action on the motion to reduce the bond in
the manner prescribed by law and jurisprudence then cannot be countenanced. Although an appeal by parties from
decisions that are adverse to their interests is neither a natural right nor a part of due process, it is an essential part of our
judicial system. Courts should proceed with caution so as not to deprive a party of the right to appeal, but rather, ensure
that every party has the amplest opportunity for the proper and just disposition of their cause, free from the constraints of
technicalities.85 Considering the mandate of labor tribunals, the principle equally applies to them.

Given the circumstances of the case, the Court’s affirmance in the Decision dated September 18, 2009 of the NLRC’s
strict application of the rule on appeal bonds then demands a re-examination. Again, the emerging trend in our
jurisprudence is to afford every party-litigant the amplest opportunity for the proper and just determination of his cause,
free from the constraints of technicalities.86 Section 2, Rule I of the NLRC Rules of Procedure also provides the policy that
"the Rules shall be liberally construed to carry out the objectives of the Constitution, the Labor Code of the Philippines and
other relevant legislations, and to assist the parties in obtaining just, expeditious and inexpensive resolution and
settlement of labor disputes."87

In accordance with the foregoing, although the general rule provides that an appeal in labor cases from a decision
involving a monetary award may be perfected only upon the posting of a cash or surety bond, the Court has relaxed this
requirement under certain exceptional circumstances in order to resolve controversies on their merits. These
circumstances include: (1) the fundamental consideration of substantial justice; (2) the prevention of miscarriage of justice
or of unjust enrichment; and (3) special circumstances of the case combined with its legal merits, and the amount and the
issue involved.88 Guidelines that are applicable in the reduction of appeal bonds were also explained in Nicol v. Footjoy
Industrial Corporation.89 The bond requirement in appeals involving monetary awards has been and may be relaxed in
meritorious cases, including instances in which (1) there was substantial compliance with the Rules, (2) surrounding facts
and circumstances constitute meritorious grounds to reduce the bond, (3) a liberal interpretation of the requirement of an
appeal bond would serve the desired objective of resolving controversies on the merits, or (4) the appellants, at the very
least, exhibited their willingness and/or good faith by posting a partial bond during the reglementary period. 90

In Blancaflor v. NLRC,91 the Court also emphasized that while Article 223 92 of the Labor Code, as amended by Republic
Act No. 6715, which requires a cash or surety bond in an amount equivalent to the monetary award in the judgment
appealed from may be considered a jurisdictional requirement for the perfection of an appeal, nevertheless, adhering to
the principle that substantial justice is better served by allowing the appeal on the merits to be threshed out by the NLRC,
the foregoing requirement of the law should be given a liberal interpretation.

As the Court, nonetheless, remains firm on the importance of appeal bonds in appeals from monetary awards of LAs, we
stress that the NLRC, pursuant to Section 6, Rule VI of the NLRC Rules of Procedure, shall only accept motions to reduce
bond that are coupled with the posting of a bond in a reasonable amount. Time and again, we have explained that the
bond requirement imposed upon appellants in labor cases is intended to ensure the satisfaction of awards that are made
in favor of appellees, in the event that their claims are eventually sustained by the courts. 93 On the part of the appellants,
its posting may also signify their good faith and willingness to recognize the final outcome of their appeal.

At the time of a motion to reduce appeal bond’s filing, the question of what constitutes "a reasonable amount of bond" that
must accompany the motion may be subject to differing interpretations of litigants. The judgment of the NLRC which has
the discretion under the law to determine such amount cannot as yet be invoked by litigants until after their motions to
reduce appeal bond are accepted.

Given these limitations, it is not uncommon for a party to unduly forfeit his opportunity to seek a reduction of the required
bond and thus, to appeal, when the NLRC eventually disagrees with the party’s assessment. These have also resulted in
the filing of numerous petitions against the NLRC, citing an alleged grave abuse of discretion on the part of the labor
tribunal for its finding on the sufficiency or insufficiency of posted appeal bonds.

It is in this light that the Court finds it necessary to set a parameter for the litigants’ and the NLRC’s guidance on the
amount of bond that shall hereafter be filed with a motion for a bond’s reduction. To ensure that the provisions of Section
6, Rule VI of the NLRC Rules of Procedure that give parties the chance to seek a reduction of the appeal bond are
effectively carried out, without however defeating the benefits of the bond requirement in favor of a winning litigant, all
motions to reduce bond that are to be filed with the NLRC shall be accompanied by the posting of a cash or surety bond
equivalent to 10% of the monetary award that is subject of the appeal, which shall provisionally be deemed the
reasonable amount of the bond in the meantime that an appellant’s motion is pending resolution by the Commission. In
conformity with the NLRC Rules, the monetary award, for the purpose of computing the necessary appeal bond, shall
exclude damages and attorney’s fees.94 Only after the posting of a bond in the required percentage shall an appellant’s
period to perfect an appeal under the NLRC Rules be deemed suspended.
The foregoing shall not be misconstrued to unduly hinder the NLRC’s exercise of its discretion, given that the percentage
of bond that is set by this guideline shall be merely provisional. The NLRC retains its authority and duty to resolve the
motion and determine the final amount of bond that shall be posted by the appellant, still in accordance with the standards
of "meritorious grounds" and "reasonable amount". Should the NLRC, after considering the motion’s merit, determine that
a greater amount or the full amount of the bond needs to be posted by the appellant, then the party shall comply
accordingly. The appellant shall be given a period of 10 days from notice of the NLRC order within which to perfect the
appeal by posting the required appeal bond.

Meritorious ground as a condition

for the reduction of the appeal bond

In all cases, the reduction of the appeal bond shall be justified by meritorious grounds and accompanied by the posting of
the required appeal bond in a reasonable amount.

The requirement on the existence of a "meritorious ground" delves on the worth of the parties’ arguments, taking into
account their respective rights and the circumstances that attend the case. The condition was emphasized in University
Plans Incorporated v. Solano,95 wherein the Court held that while the NLRC’s Revised Rules of Procedure "allows the
[NLRC] to reduce the amount of the bond, the exercise of the authority is not a matter of right on the part of the movant,
but lies within the sound discretion of the NLRC upon a showing of meritorious grounds." 96 By jurisprudence, the merit
referred to may pertain to an appellant’s lack of financial capability to pay the full amount of the bond, 97 the merits of the
main appeal such as when there is a valid claim that there was no illegal dismissal to justify the award, 98 the absence of
an employer-employee relationship,99 prescription of claims,100 and other similarly valid issues that are raised in the
appeal.101 For the purpose of determining a "meritorious ground", the NLRC is not precluded from receiving evidence, or
from making a preliminary determination of the merits of the appellant’s contentions. 102

In this case, the NLRC then should have considered the respondents’ arguments in the memorandum on appeal that was
filed with the motion to reduce the requisite appeal bond. Although a consideration of said arguments at that point would
have been merely preliminary and should not in any way bind the eventual outcome of the appeal, it was apparent that the
respondents’ defenses came with an indication of merit that deserved a full review of the decision of the LA. The CA, by
its Resolution dated February 16, 2007, even found justified the issuance of a preliminary injunction to enjoin the
immediate execution of the LA’s decision, and this Court, a temporary restraining order on September 4, 2012.

Significantly, following the CA’s remand of the case to the NLRC, the latter even rendered a Decision that contained
findings that are inconsistent with McBurnie’s claims. The NLRC reversed and set aside the decision of the LA, and
entered a new one dismissing McBurnie’s complaint. It explained that McBurnie was not an employee of the respondents;
thus, they could not have dismissed him from employment. The purported employment contract of the respondents with
the petitioner was qualified by the conditions set forth in a letter dated May 11, 1999, which reads:

May 11, 1999

MR. ANDREW MCBURNIE

Re: Employment Contract

Dear Andrew,

It is understood that this Contract is made subject to the understanding that it is effective only when the project financing
for our Baguio Hotel project pushed through.

The agreement with EGI Managers, Inc. is made now to support your need to facilitate your work permit with the
Department of Labor in view of the expiration of your contract with Pan Pacific.

Regards,

Sgd. Eulalio Ganzon (p. 203, Records)103

For the NLRC, the employment agreement could not have given rise to an employer-employee relationship by reason of
legal impossibility. The two conditions that form part of their agreement, namely, the successful completion of the project
financing for the hotel project in Baguio City and McBurnie’s acquisition of an Alien Employment Permit, remained
unsatisfied.104 The NLRC concluded that McBurnie was instead a potential investor in a project that included Ganzon, but
the said project failed to pursue due to lack of funds. Any work performed by McBurnie in relation to the project was
merely preliminary to the business venture and part of his "due diligence" study before pursuing the project, "done at his
own instance, not in furtherance of the employment contract but for his own investment purposes." 105 Lastly, the alleged
employment of the petitioner would have been void for being contrary to law, since it is undisputed that McBurnie did not
have any work permit. The NLRC declared:

Absent an employment permit, any employment relationship that McBurnie contemplated with the respondents was void
for being contrary to law. A void or inexistent contract, in turn, has no force and effect from the beginning as if it had never
been entered into. Thus, without an Alien Employment Permit, the "Employment Agreement" is void and could not be the
source of a right or obligation. In support thereof, the DOLE issued a certification that McBurnie has neither applied nor
been issued an Alien Employment Permit (p. 204, Records). 106
McBurnie moved to reconsider, citing the Court’s Decision of September 18, 2009 that reversed and set aside the CA’s
Decision authorizing the remand. Although the NLRC granted the motion on the said ground via a Decision 107that set
aside the NLRC’s Decision dated November 17, 2009, the findings of the NLRC in the November 17, 2009 decision merit
consideration, especially since the findings made therein are supported by the case records.

In addition to the apparent merit of the respondents’ appeal, the Court finds the reduction of the appeal bond justified by
the substantial amount of the LA’s monetary award. Given its considerable amount, we find reason in the respondents’
claim that to require an appeal bond in such amount could only deprive them of the right to appeal, even force them out of
business and affect the livelihood of their employees. 108 In Rosewood Processing, Inc. v. NLRC,109 we emphasized:
"Where a decision may be made to rest on informed judgment rather than rigid rules, the equities of the case must be
accorded their due weight because labor determinations should not be ‘secundum rationem but also secundum
caritatem.’"110

What constitutes a reasonable

amount in the determination of the
final amount of appeal bond

As regards the requirement on the posting of a bond in a "reasonable amount," the Court holds that the final determination
thereof by the NLRC shall be based primarily on the merits of the motion and the main appeal.

Although the NLRC Rules of Procedure, particularly Section 6 of Rule VI thereof, provides that the bond to be posted shall
be "in a reasonable amount in relation to the monetary award ," the merit of the motion shall always take precedence in
the determination. Settled is the rule that procedural rules were conceived, and should thus be applied in a manner that
would only aid the attainment of justice. If a stringent application of the rules would hinder rather than serve the demands
of substantial justice, the former must yield to the latter. 111

Thus, in Nicol where the appellant posted a bond of ₱10,000,000.00 upon an appeal from the LA’s award of
₱51,956,314.00, the Court, instead of ruling right away on the reasonableness of the bond’s amount solely on the basis of
the judgment award, found it appropriate to remand the case to the NLRC, which should first determine the merits of the
motion. In University Plans,112 the Court also reversed the outright dismissal of an appeal where the bond posted in a
judgment award of more than ₱30,000,000.00 was ₱30,000.00. The Court then directed the NLRC to first determine the
merit, or lack of merit, of the motion to reduce the bond, after the appellant therein claimed that it was under receivership
and thus, could not dispose of its assets within a short notice. Clearly, the rule on the posting of an appeal bond should
not be allowed to defeat the substantive rights of the parties. 113

Notably, in the present case, following the CA’s rendition of its Decision which allowed a reduced appeal bond, the
respondents have posted a bond in the amount of ₱10,000,000.00. In Rosewood, the Court deemed the posting of a
surety bond of ₱50,000.00, coupled with a motion to reduce the appeal bond, as substantial compliance with the legal
requirements for an appeal from a ₱789,154.39 monetary award "considering the clear merits which appear, res ipsa
loquitor, in the appeal from the LA’s Decision, and the petitioner’s substantial compliance with rules governing
appeals."114 The foregoing jurisprudence strongly indicate that in determining the reasonable amount of appeal bonds, the
Court primarily considers the merits of the motions and appeals.

Given the circumstances in this case and the merits of the respondents’ arguments before the NLRC, the Court holds that
the respondents had posted a bond in a "reasonable amount", and had thus complied with the requirements for the
perfection of an appeal from the LA’s decision. The CA was correct in ruling that:

In the case of Nueva Ecija I Electric Cooperative, Inc. (NEECO I) Employees Association, President Rodolfo Jimenez, and
members, Reynaldo Fajardo, et al. vs. NLRC, Nueva Ecija I Electric Cooperative, Inc. (NEECO I) and Patricio de la Peña
(GR No. 116066, January 24, 2000), the Supreme Court recognized that: "the NLRC, in its Resolution No. 11-01-91 dated
November 7, 1991 deleted the phrase "exclusive of moral and exemplary damages as well as attorney’s fees in the
determination of the amount of bond, and provided a safeguard against the imposition of excessive bonds by providing
that "(T)he Commission may in meritorious cases and upon motion of the appellant, reduce the amount of the bond."

In the case of Cosico, Jr. vs. NLRC, 272 SCRA 583, it was held:

"The unreasonable and excessive amount of bond would be oppressive and unjust and would have the effect of depriving
a party of his right to appeal."

xxxx

In dismissing outright the motion to reduce bond filed by petitioners, NLRC abused its discretion. It should have fixed an
appeal bond in a reasonable amount. Said dismissal deprived petitioners of their right to appeal the Labor Arbiter’s
decision.

xxxx

NLRC Rules allow reduction of appeal bond on meritorious grounds (Sec. 6, Rule VI, NLRC Rules of Procedure). This
Court finds the appeal bond in the amount of ₱54,083,910.00 prohibitive and excessive, which constitutes a meritorious
ground to allow a motion for reduction thereof. 115
The foregoing declaration of the Court requiring a bond in a reasonable amount, taking into account the merits of the
motion and the appeal, is consistent with the oft-repeated principle that letter-perfect rules must yield to the broader
interest of substantial justice.116

The effect of a denial of the appeal

to the NLRC

In finding merit in the respondents’ motion for reconsideration, we also take into account the unwarranted results that will
arise from an implementation of the Court’s Decision dated September 18, 2009. We emphasize, moreover, that although
a remand and an order upon the NLRC to give due course to the appeal would have been the usual course after a finding
that the conditions for the reduction of an appeal bond were duly satisfied by the respondents, given such results, the
Court finds it necessary to modify the CA’s order of remand, and instead rule on the dismissal of the complaint against the
respondents.

Without the reversal of the Court’s Decision and the dismissal of the complaint against the respondents, McBurnie would
be allowed to claim benefits under our labor laws despite his failure to comply with a settled requirement for foreign
nationals.

Considering that McBurnie, an Australian, alleged illegal dismissal and sought to claim under our labor laws, it was
necessary for him to establish, first and foremost, that he was qualified and duly authorized to obtain employment within
our jurisdiction. A requirement for foreigners who intend to work within the country is an employment permit, as provided
under Article 40, Title II of the Labor Code which reads:

Art. 40. Employment permit for non-resident aliens. Any alien seeking admission to the Philippines for employment
purposes and any domestic or foreign employer who desires to engage an alien for employment in the Philippines shall
obtain an employment permit from the Department of Labor.

In WPP Marketing Communications, Inc. v. Galera,117 we held that a foreign national’s failure to seek an employment
permit prior to employment poses a serious problem in seeking relief from the Court. 118 Thus, although the respondent
therein appeared to have been illegally dismissed from employment, we explained:

This is Galera’s dilemma: Galera worked in the Philippines without proper work permit but now wants to claim employee’s
benefits under Philippine labor laws.

xxxx

The law and the rules are consistent in stating that the employment permit must be acquired prior to employment. The
Labor Code states: "Any alien seeking admission to the Philippines for employment purposes and any domestic or foreign
employer who desires to engage an alien for employment in the Philippines shall obtain an employment permit from the
Department of Labor." Section 4, Rule XIV, Book I of the Implementing Rules and Regulations provides:

"Employment permit required for entry. – No alien seeking employment, whether as a resident or non-resident, may enter
the Philippines without first securing an employment permit from the Ministry. If an alien enters the country under a non-
working visa and wishes to be employed thereafter, he may be allowed to be employed upon presentation of a duly
approved employment permit."

Galera cannot come to this Court with unclean hands. To grant Galera’s prayer is to sanction the violation of the
Philippine labor laws requiring aliens to secure work permits before their employment. We hold that the status quo must
prevail in the present case and we leave the parties where they are. This ruling, however, does not bar Galera from
seeking relief from other jurisdictions.119 (Citations omitted and underscoring ours)

Clearly, this circumstance on the failure of McBurnie to obtain an employment permit, by itself, necessitates the dismissal
of his labor complaint.

Furthermore, as has been previously discussed, the NLRC has ruled in its Decision dated November 17, 2009 on the
issue of illegal dismissal. It declared that McBurnie was never an employee of any of the respondents. 120 It explained:

All these facts and circumstances prove that McBurnie was never an employee of Eulalio Ganzon or the respondent
companies, but a potential investor in a project with a group including Eulalio Ganzon and Martinez but said project did
not take off because of lack of funds.

McBurnie further claims that in conformity with the provision of the employment contract pertaining to the obligation of the
respondents to provide housing, respondents assigned him Condo Unit # 812 of the Makati Cinema Square Condominium
owned by the respondents. He was also allowed to use a Hyundai car. If it were true that the contract of employment was
for working visa purposes only, why did the respondents perform their obligations to him?

There is no question that respondents assigned him Condo Unit # 812 of the MCS, but this was not free of charge. If it
were true that it is part of the compensation package as employee, then McBurnie would not be obligated to pay anything,
but clearly, he admitted in his letter that he had to pay all the expenses incurred in the apartment.
Assuming for the sake of argument that the employment contract is valid between them, record shows that McBurnie
worked from September 1, 1999 until he met an accident on the last week of October. During the period of employment,
the respondents must have paid his salaries in the sum of US$26,000.00, more or less.

However, McBurnie failed to present a single evidence that [the respondents] paid his salaries like payslip, check or cash
vouchers duly signed by him or any document showing proof of receipt of his compensation from the respondents or
activity in furtherance of the employment contract. Granting again that there was a valid contract of employment, it is
undisputed that on November 1, 1999, McBurnie left for Australia and never came back. x x x. 121(Emphasis supplied)

Although the NLRC’s Decision dated November 17, 2009 was set aside in a Decision dated January 14, 2010, the Court’s
resolve to now reconsider its Decision dated September 18, 2009 and to affirm the CA’s Decision and Resolution in the
respondents’ favor effectively restores the NLRC’s basis for rendering the Decision dated November 17, 2009.

More importantly, the NLRC’s findings on the contractual relations between McBurnie and the respondents are supported
by the records.

First, before a case for illegal dismissal can prosper, an employer-employee relationship must first be
established.122 Although an employment agreement forms part of the case records, respondent Ganzon signed it with the
notation "per my note."123 The respondents have sufficiently explained that the note refers to the letter 124dated May 11,
1999 which embodied certain conditions for the employment’s effectivity. As we have previously explained, however, the
said conditions, particularly on the successful completion of the project financing for the hotel project in Baguio City and
McBurnie’s acquisition of an Alien Employment Permit, failed to materialize. Such defense of the respondents, which was
duly considered by the NLRC in its Decision dated November 17, 2009, was not sufficiently rebutted by McBurnie.

Second, McBurnie failed to present any employment permit which would have authorized him to obtain employment in the
Philippines. This circumstance negates McBurnie’s claim that he had been performing work for the respondents by virtue
of an employer-employee relationship. The absence of the employment permit instead bolsters the claim that the
supposed employment of McBurnie was merely simulated, or did not ensue due to the non-fulfillment of the conditions
that were set forth in the letter of May 11, 1999.

Third, besides the employment agreement, McBurnie failed to present other competent evidence to prove his claim of an
employer-employee relationship. Given the parties’ conflicting claims on their true intention in executing the agreement, it
was necessary to resort to the established criteria for the determination of an employer-employee relationship, namely: (1)
the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power
to control the employee’s conduct.125 The rule of thumb remains: the onus probandi falls on the claimant to establish or
substantiate the claim by the requisite quantum of evidence. Whoever claims entitlement to the benefits provided by law
should establish his or her right thereto.126 McBurnie failed in this regard.1âwphi1 As previously observed by the NLRC,
McBurnie even failed to show through any document such as payslips or vouchers that his salaries during the time that he
allegedly worked for the respondents were paid by the company. In the absence of an employer-employee relationship
between McBurnie and the respondents, McBurnie could not successfully claim that he was dismissed, much less illegally
dismissed, by the latter. Even granting that there was such an employer-employee relationship, the records are barren of
any document showing that its termination was by the respondents’ dismissal of McBurnie.

Given these circumstances, it would be a circuitous exercise for the Court to remand the case to the NLRC, more so in
the absence of any showing that the NLRC should now rule differently on the case’s merits. In Medline Management, Inc.
v. Roslinda,127 the Court ruled that when there is enough basis on which the Court may render a proper evaluation of the
merits of the case, the Court may dispense with the time-consuming procedure of remanding a case to a labor tribunal in
order "to prevent delays in the disposition of the case," "to serve the ends of justice" and when a remand "would serve no
purpose save to further delay its disposition contrary to the spirit of fair play." 128 In Real v. Sangu Philippines, Inc.,129 we
again ruled:

With the foregoing, it is clear that the CA erred in affirming the decision of the NLRC which dismissed petitioner’s
complaint for lack of jurisdiction. In cases such as this, the Court normally remands the case to the NLRC and directs it to
properly dispose of the case on the merits. "However, when there is enough basis on which a proper evaluation of the
merits of petitioner’s case may be had, the Court may dispense with the time-consuming procedure of remand in order to
prevent further delays in the disposition of the case." "It is already an accepted rule of procedure for us to strive to settle
the entire controversy in a single proceeding, leaving no root or branch to bear the seeds of litigation. If, based on the
records, the pleadings, and other evidence, the dispute can be resolved by us, we will do so to serve the ends of justice
instead of remanding the case to the lower court for further proceedings." x x x. 130 (Citations omitted)

It bears mentioning that although the Court resolves to grant the respondents’ motion for reconsideration, the other
grounds raised in the motion, especially as they pertain to insinuations on irregularities in the Court, deserve no merit for
being founded on baseless conclusions. Furthermore, the Court finds it unnecessary to discuss the other grounds that are
raised in the motion, considering the grounds that already justify the dismissal of McBurnie’s complaint.

All these considered, the Court also affirms its Resolution dated September 4, 2012; accordingly, McBurnie’s motion for
reconsideration thereof is denied.

WHEREFORE, in light of the foregoing, the Court rules as follows:

(a) The motion for reconsideration filed on September 26, 2012 by petitioner Andrew James McBurnie is DENIED;
 (b) The motion for reconsideration filed on March 27, 2012 by respondents Eulalio Ganzon, EGI-Managers, Inc.
and E. Ganzon, Inc. is GRANTED.

(c) The Entry of Judgment issued in G.R. Nos. 186984-85 is LIFTED. This Court’s Decision dated September 18,
2009 and Resolutions dated December 14, 2009 and January 25, 2012 are SET ASIDE. The Court of Appeals
Decision dated October 27, 2008 and Resolution dated March 3, 2009 in CA-G.R. SP No. 90845 and CA-G.R. SP
No. 95916 are AFFIRMED WITH MODIFICATION. In lieu of a remand of the case to the National Labor Relations
Commission, the complaint for illegal dismissal filed by petitioner Andrew James McBurnie against respondents
Eulalio Ganzon, EGI-Managers, Inc. and E. Ganzon, Inc. is DISMISSED.

Furthermore, on the matter of the filing and acceptance of motions to reduce appeal bond, as provided in Section 6, Rule
VI of the 2011 NLRC Rules of Procedure, the Court hereby RESOLVES that henceforth, the following guidelines shall be
observed:

(a) The filing o a motion to reduce appeal bond shall be entertained by the NLRC subject to the following
conditions: (1) there is meritorious ground; and (2) a bond in a reasonable amount is posted;

(b) For purposes o compliance with condition no. (2), a motion shall be accompanied by the posting o a
provisional cash or surety bond equivalent to ten percent (10,) of the monetary award subject o the appeal,
exclusive o damages and attorney's fees;

(c) Compliance with the foregoing conditions shall suffice to suspend the running o the 1 0-day reglementary
period to perfect an appeal from the labor arbiter's decision to the NLRC;

(d) The NLRC retains its authority and duty to resolve the motion to reduce bond and determine the final amount o
bond that shall be posted by the appellant, still in accordance with the standards o meritorious grounds and
reasonable amount; and

(e) In the event that the NLRC denies the motion to reduce bond, or requires a bond that exceeds the amount o
the provisional bond, the appellant shall be given a fresh period o ten 1 0) days from notice o the NLRC order
within which to perfect the appeal by posting the required appeal bond.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 114337 September 29, 1995

NITTO ENTERPRISES, petitioner, 
vs.
NATIONAL LABOR RELATIONS COMMISSION and ROBERTO CAPILI, respondents.

KAPUNAN, J.:

This petition for certiorari under Rule 65 of the Rules of Court seeking to annul the decision 1 rendered by public
respondent National Labor Relations Commission, which reversed the decision of the Labor Arbiter.

Briefly, the facts of the case are as follows:

Petitioner Nitto Enterprises, a company engaged in the sale of glass and aluminum products, hired Roberto Capili
sometime in May 1990 as an apprentice machinist, molder and core maker as evidenced by an apprenticeship
agreement2 for a period of six (6) months from May 28, 1990 to November 28, 1990 with a daily wage rate of P66.75
which was 75% of the applicable minimum wage.

At around 1:00 p.m. of August 2, 1990, Roberto Capili who was handling a piece of glass which he was working on,
accidentally hit and injured the leg of an office secretary who was treated at a nearby hospital.

Later that same day, after office hours, private respondent entered a workshop within the office premises which was not
his work station. There, he operated one of the power press machines without authority and in the process injured his left
thumb. Petitioner spent the amount of P1,023.04 to cover the medication of private respondent.

The following day, Roberto Capili was asked to resign in a letter 3 which reads:

August 2, 1990

Wala siyang tanggap ng utos mula sa superbisor at wala siyang experiensa kung papaano gamitin and
"TOOL" sa pagbuhat ng salamin, sarili niyang desisyon ang paggamit ng tool at may disgrasya at
nadamay pa ang isang sekretarya ng kompanya.

Sa araw ding ito limang (5) minute ang nakakalipas mula alas-singko ng hapon siya ay pumasok sa shop
na hindi naman sakop ng kanyang trabaho. Pinakialaman at kinalikot ang makina at nadisgrasya niya ang
kanyang sariling kamay.

Nakagastos ang kompanya ng mga sumusunod:

Emergency and doctor fee P715.00

Medecines (sic) and others 317.04

Bibigyan siya ng kompanya ng Siyam na araw na libreng sahod hanggang matanggal ang tahi ng
kanyang kamay.

Tatanggapin niya ang sahod niyang anim na araw, mula ika-30 ng Hulyo at ika-4 ng Agosto, 1990.

Ang kompanya ang magbabayad ng lahat ng gastos pagtanggal ng tahi ng kanyang kamay, pagkatapos
ng siyam na araw mula ika-2 ng Agosto.

Sa lahat ng nakasulat sa itaas, hinihingi ng kompanya ang kanyang resignasyon, kasama ng kanyang
comfirmasyon at pag-ayon na ang lahat sa itaas ay totoo.

Naiintindihan ko ang lahat ng nakasulat sa itaas, at ang lahat ng ito ay aking pagkakasala sa hindi
pagsunod sa alintuntunin ng kompanya.
 (Sgd.) Roberto Capili
Roberto Capili

On August 3, 1990 private respondent executed a Quitclaim and Release in favor of petitioner for and in consideration of
the sum of P1,912.79.4

Three days after, or on August 6, 1990, private respondent formally filed before the NLRC Arbitration Branch, National
Capital Region a complaint for illegal dismissal and payment of other monetary benefits.

On October 9, 1991, the Labor Arbiter rendered his decision finding the termination of private respondent as valid and
dismissing the money claim for lack of merit. The dispositive portion of the ruling reads:

WHEREFORE, premises considered, the termination is valid and for cause, and the money claims
dismissed for lack of merit.

The respondent however is ordered to pay the complainant the amount of P500.00 as financial
assistance.

SO ORDERED.5

Labor Arbiter Patricio P. Libo-on gave two reasons for ruling that the dismissal of Roberto Capilian was valid. First, private
respondent who was hired as an apprentice violated the terms of their agreement when he acted with gross negligence
resulting in the injury not only to himself but also to his fellow worker. Second, private respondent had shown that "he
does not have the proper attitude in employment particularly the handling of machines without authority and proper
training.6

On July 26, 1993, the National Labor Relations Commission issued an order reversing the decision of the Labor Arbiter,
the dispositive portion of which reads:

WHEREFORE, the appealed decision is hereby set aside. The respondent is hereby directed to reinstate
complainant to his work last performed with backwages computed from the time his wages were withheld
up to the time he is actually reinstated. The Arbiter of origin is hereby directed to further hear
complainant's money claims and to dispose them on the basis of law and evidence obtaining.

SO ORDERED.7

The NLRC declared that private respondent was a regular employee of petitioner by ruling thus:

As correctly pointed out by the complainant, we cannot understand how an apprenticeship agreement
filed with the Department of Labor only on June 7, 1990 could be validly used by the Labor Arbiter as
basis to conclude that the complainant was hired by respondent as a plain "apprentice" on May 28, 1990.
Clearly, therefore, the complainant was respondent's regular employee under Article 280 of the Labor
Code, as early as May 28,1990, who thus enjoyed the security of tenure guaranteed in Section 3, Article
XIII of our 1987 Constitution.

The complainant being for illegal dismissal (among others) it then behooves upon respondent, pursuant to
Art. 227(b) and as ruled in Edwin Gesulgon vs. NLRC, et al. (G.R. No. 90349, March 5, 1993, 3rd Div.,
Feliciano, J.) to prove that the dismissal of complainant was for a valid cause. Absent such proof, we
cannot but rule that the complainant was illegally dismissed. 8

On January 28, 1994, Labor Arbiter Libo-on called for a conference at which only private respondent's representative was
present.

On April 22, 1994, a Writ of Execution was issued, which reads:

NOW, THEREFORE, finding merit in [private respondent's] Motion for Issuance of the Writ, you are
hereby commanded to proceed to the premises of [petitioner] Nitto Enterprises and Jovy Foster located at
No. l 74 Araneta Avenue, Portero, Malabon, Metro Manila or at any other places where their properties
are located and effect the reinstatement of herein [private respondent] to his work last performed or at the
option of the respondent by payroll reinstatement.

You are also to collect the amount of P122,690.85 representing his backwages as called for in the
dispositive portion, and turn over such amount to this Office for proper disposition.

Petitioner filed a motion for reconsideration but the same was denied.

Hence, the instant petition — for certiorari.

The issues raised before us are the following:

 I

WHETHER OR NOT PUBLIC RESPONDENT NLRC COMMITTED GRAVE ABUSE OF DISCRETION IN

HOLDING THAT PRIVATE RESPONDENT WAS NOT AN APPRENTICE.

II

WHETHER OR NOT PUBLIC RESPONDENT NLRC COMMITTED GRAVE ABUSE OF DISCRETION IN

HOLDING THAT PETITIONER HAD NOT ADEQUATELY PROVEN THE EXISTENCE OF A VALID
CAUSE IN TERMINATING THE SERVICE OF PRIVATE RESPONDENT.

We find no merit in the petition.

Petitioner assails the NLRC's finding that private respondent Roberto Capili cannot plainly be considered an apprentice
since no apprenticeship program had yet been filed and approved at the time the agreement was executed.

Petitioner further insists that the mere signing of the apprenticeship agreement already established an employer-
apprentice relationship.

Petitioner's argument is erroneous.

The law is clear on this matter. Article 61 of the Labor Code provides:

Contents of apprenticeship agreement. — Apprenticeship agreements, including the main rates of

apprentices, shall conform to the rules issued by the Minister of Labor and Employment. The period of
apprenticeship shall not exceed six months. Apprenticeship agreements providing for wage rates below
the legal minimum wage, which in no case shall start below 75% per cent of the applicable minimum
wage, may be entered into only in accordance with apprenticeship program duly approved by the Minister
of Labor and Employment. The Ministry shall develop standard model programs of apprenticeship.
(emphasis supplied)

In the case at bench, the apprenticeship agreement between petitioner and private respondent was executed on May 28,
1990 allegedly employing the latter as an apprentice in the trade of "care maker/molder." On the same date, an
apprenticeship program was prepared by petitioner and submitted to the Department of Labor and Employment. However,
the apprenticeship Agreement was filed only on June 7, 1990. Notwithstanding the absence of approval by the
Department of Labor and Employment, the apprenticeship agreement was enforced the day it was signed.

Based on the evidence before us, petitioner did not comply with the requirements of the law. It is mandated that
apprenticeship agreements entered into by the employer and apprentice shall be entered only in accordance with the
apprenticeship program duly approved by the Minister of Labor and Employment.

Prior approval by the Department of Labor and Employment of the proposed apprenticeship program is, therefore, a
condition sine quo non before an apprenticeship agreement can be validly entered into.

The act of filing the proposed apprenticeship program with the Department of Labor and Employment is a preliminary step
towards its final approval and does not instantaneously give rise to an employer-apprentice relationship.

Article 57 of the Labor Code provides that the State aims to "establish a national apprenticeship program through the
participation of employers, workers and government and non-government agencies" and "to establish apprenticeship
standards for the protection of apprentices." To translate such objectives into existence, prior approval of the DOLE to any
apprenticeship program has to be secured as a condition sine qua non before any such apprenticeship agreement can be
fully enforced. The role of the DOLE in apprenticeship programs and agreements cannot be debased.

Hence, since the apprenticeship agreement between petitioner and private respondent has no force and effect in the
absence of a valid apprenticeship program duly approved by the DOLE, private respondent's assertion that he was hired
not as an apprentice but as a delivery boy ("kargador" or "pahinante") deserves credence. He should rightly be considered
as a regular employee of petitioner as defined by Article 280 of the Labor Code:

Art. 280. Regular and Casual Employment. — The provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to
be regular where the employee has been engaged to perform activities which are usually necessary or
desirable in the usual business or trade of the employer, except where the employment has been fixed for
a specific project or undertaking the completion or termination of which has been determined at the time
of the engagement of the employee or where the work or services to be performed is seasonal in nature
and the employment is for the duration of the season.

An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided,

That, any employee who has rendered at least one year of service, whether such service is continuous or
broken, shall be considered a regular employee with respect to the activity in which he is employed and
his employment shall continue while such activity exists. (Emphasis supplied)
 and pursuant to the constitutional mandate to "protect the rights of workers and promote their welfare." 9

Petitioner further argues that, there is a valid cause for the dismissal of private respondent.

There is an abundance of cases wherein the Court ruled that the twin requirements of due process, substantive and
procedural, must be complied with, before valid dismissal exists. 10 Without which, the dismissal becomes void.

The twin requirements of notice and hearing constitute the essential elements of due process. This simply means that the
employer shall afford the worker ample opportunity to be heard and to defend himself with the assistance of his
representative, if he so desires.

Ample opportunity connotes every kind of assistance that management must accord the employee to enable him to
prepare adequately for his defense including legal representation. 11

As held in the case of Pepsi-Cola Bottling Co., Inc. v. NLRC: 12

The law requires that the employer must furnish the worker sought to be dismissed with two (2) written
notices before termination of employee can be legally effected: (1) notice which apprises the employee of
the particular acts or omissions for which his dismissal is sought; and (2) the subsequent notice which
informs the employee of the employer's decision to dismiss him (Sec. 13, BP 130; Sec. 2-6 Rule XIV,
Book V, Rules and Regulations Implementing the Labor Code as amended). Failure to comply with the
requirements taints the dismissal with illegality. This procedure is mandatory, in the absence of which,
any judgment reached by management is void and in existent (Tingson, Jr. vs. NLRC, 185 SCRA 498
[1990]; National Service Corp. vs. NLRC, 168 SCRA 122; Ruffy vs. NLRC. 182 SCRA 365 [1990]).

The fact is private respondent filed a case of illegal dismissal with the Labor Arbiter only three days after he was made to
sign a Quitclaim, a clear indication that such resignation was not voluntary and deliberate.

Private respondent averred that he was actually employed by petitioner as a delivery boy ("kargador" or "pahinante").

He further asserted that petitioner "strong-armed" him into signing the aforementioned resignation letter and quitclaim
without explaining to him the contents thereof. Petitioner made it clear to him that anyway, he did not have a choice. 13

Petitioner cannot disguise the summary dismissal of private respondent by orchestrating the latter's alleged resignation
and subsequent execution of a Quitclaim and Release. A judicious examination of both events belies any spontaneity on
private respondent's part.

WHEREFORE, finding no abuse of discretion committed by public respondent National Labor Relations Commission, the
appealed decision is hereby AFFIRMED.

SO ORDERED.
 SECOND DIVISION

[G.R. NO. 152894 : August 17, 2007]

CENTURY CANNING CORPORATION, Petitioner, v. COURT OF APPEALS and GLORIA C. PALAD,Respondents.

DECISION

CARPIO, J.:

The Case

This is a Petition for Review 1 of the Decision2 dated 12 November 2001 and the Resolution dated 5 April 2002 of the
Court of Appeals in CA-G.R. SP No. 60379.

The Facts

On 15 July 1997, Century Canning Corporation (petitioner) hired Gloria C. Palad (Palad) as "fish cleaner" at petitioner's
tuna and sardines factory. Palad signed on 17 July 1997 an apprenticeship agreement 3with petitioner. Palad received an
apprentice allowance of P138.75 daily. On 25 July 1997, petitioner submitted its apprenticeship program for approval to
the Technical Education and Skills Development Authority (TESDA) of the Department of Labor and Employment (DOLE).
On 26 September 1997, the TESDA approved petitioner's apprenticeship program. 4

According to petitioner, a performance evaluation was conducted on 15 November 1997, where petitioner gave Palad a
rating of N.I. or "needs improvement" since she scored only 27.75% based on a 100% performance indicator.
Furthermore, according to the performance evaluation, Palad incurred numerous tardiness and absences. As a
consequence, petitioner issued a termination notice5 dated 22 November 1997 to Palad, informing her of her termination
effective at the close of business hours of 28 November 1997.

Palad then filed a complaint for illegal dismissal, underpayment of wages, and non-payment of pro-rated 13th month pay
for the year 1997.

On 25 February 1999, the Labor Arbiter dismissed the complaint for lack of merit but ordered petitioner to pay Palad her
last salary and her pro-rated 13th month pay. The dispositive portion of the Labor Arbiter's decision reads:

WHEREFORE, premises considered, judgment is hereby rendered declaring that the complaint for illegal dismissal filed
by the complainant against the respondents in the above-entitled case should be, as it is hereby DISMISSED for lack of
merit. However, the respondents are hereby ordered to pay the complainant the amount of ONE THOUSAND SIX
HUNDRED THIRTY-TWO PESOS (P1,632.00), representing her last salary and the amount of SEVEN THOUSAND TWO
HUNDRED TWENTY EIGHT (P7,228.00) PESOS representing her prorated 13th month pay.

All other issues are likewise dismissed.

SO ORDERED.6

On appeal, the National Labor Relations Commission (NLRC) affirmed with modification the Labor Arbiter's decision, thus:

WHEREFORE, premises considered, the decision of the Arbiter dated 25 February 1999 is hereby MODIFIED in that, in
addition, respondents are ordered to pay complainant's backwages for two (2) months in the amount of P7,176.00
(P138.75 x 26 x 2 mos.). All other dispositions of the Arbiter as appearing in the dispositive portion of his decision are
AFFIRMED.

SO ORDERED.7

Upon denial of Palad's motion for reconsideration, Palad filed a special civil action for certiorari with the Court of Appeals.
On 12 November 2001, the Court of Appeals rendered a decision, the dispositive portion of which reads:

WHEREFORE, in view of the foregoing, the questioned decision of the NLRC is hereby SET ASIDE and a new one
entered, to wit:

(a) finding the dismissal of petitioner to be illegal;

(b) ordering private respondent to pay petitioner her underpayment in wages;

(c) ordering private respondent to reinstate petitioner to her former position without loss of seniority rights and to pay her
full backwages computed from the time compensation was withheld from her up to the time of her reinstatement;
(d) ordering private respondent to pay petitioner attorney's fees equivalent to ten (10%) per cent of the monetary award
herein; andcralawlibrary

(e) ordering private respondent to pay the costs of the suit.

SO ORDERED.8

The Ruling of the Court of Appeals

The Court of Appeals held that the apprenticeship agreement which Palad signed was not valid and binding because it
was executed more than two months before the TESDA approved petitioner's apprenticeship program. The Court of
Appeals cited Nitto Enterprises v. National Labor Relations Commission,9 where it was held that prior approval by the
DOLE of the proposed apprenticeship program is a condition sine qua non before an apprenticeship agreement can be
validly entered into.

The Court of Appeals also held that petitioner illegally dismissed Palad. The Court of Appeals ruled that petitioner failed to
show that Palad was properly apprised of the required standard of performance. The Court of Appeals likewise held that
Palad was not afforded due process because petitioner did not comply with the twin requirements of notice and hearing.

The Issues

Petitioner raises the following issues:

1. WHETHER THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN HOLDING THAT PRIVATE
RESPONDENT WAS NOT AN APPRENTICE; andcralawlibrary

2. WHETHER THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN HOLDING THAT PETITIONER HAD
NOT ADEQUATELY PROVEN THE EXISTENCE OF A VALID CAUSE IN TERMINATING THE SERVICE OF PRIVATE
RESPONDENT.10

The Ruling of the Court

The petition is without merit.

Registration and Approval by the TESDA of Apprenticeship Program Required Before Hiring of Apprentices

The Labor Code defines an apprentice as a worker who is covered by a written apprenticeship agreement with an
employer.11 One of the objectives of Title II (Training and Employment of Special Workers) of the Labor Code is to
establish apprenticeship standards for the protection of apprentices. 12 In line with this objective, Articles 60 and 61 of the
Labor Code provide:

ART. 60. Employment of apprentices. - Only employers in the highly technical industries may employ apprentices
and only in apprenticeable occupations approved by the Minister of Labor and Employment. (Emphasis
supplied)cralawlibrary

ART. 61. Contents of apprenticeship agreements. - Apprenticeship agreements, including the wage rates of apprentices,
shall conform to the rules issued by the Minister of Labor and Employment. The period of apprenticeship shall not exceed
six months. Apprenticeship agreements providing for wage rates below the legal minimum wage, which in no case
shall start below 75 percent of the applicable minimum wage, may be entered into only in accordance with
apprenticeship programs duly approved by the Minister of Labor and Employment. The Ministry shall develop
standard model programs of apprenticeship. (Emphasis supplied)cralawlibrary

In Nitto Enterprises v. National Labor Relations Commission,13 the Court cited Article 61 of the Labor Code and held that
an apprenticeship program should first be approved by the DOLE before an apprentice may be hired, otherwise the
person hired will be considered a regular employee. The Court held:

In the case at bench, the apprenticeship agreement between petitioner and private respondent was executed on May 28,
1990 allegedly employing the latter as an apprentice in the trade of "care maker/molder." On the same date, an
apprenticeship program was prepared by petitioner and submitted to the Department of Labor and Employment. However,
the apprenticeship agreement was filed only on June 7, 1990. Notwithstanding the absence of approval by the
Department of Labor and Employment, the apprenticeship agreement was enforced the day it was signed.

Based on the evidence before us, petitioner did not comply with the requirements of the law. It is mandated that
apprenticeship agreements entered into by the employer and apprentice shall be entered only in accordance with
the apprenticeship program duly approved by the Minister of Labor and Employment.

Prior approval by the Department of Labor and Employment of the proposed apprenticeship program is, therefore, a
condition sine qua non before an apprenticeship agreement can be validly entered into.
The act of filing the proposed apprenticeship program with the Department of Labor and Employment is a preliminary step
towards its final approval and does not instantaneously give rise to an employer-apprentice relationship.

Article 57 of the Labor Code provides that the State aims to "establish a national apprenticeship program through the
participation of employers, workers and government and non-government agencies" and "to establish apprenticeship
standards for the protection of apprentices." To translate such objectives into existence, prior approval of the DOLE to any
apprenticeship program has to be secured as a condition sine qua non before any such apprenticeship agreement can be
fully enforced. The role of the DOLE in apprenticeship programs and agreements cannot be debased.

Hence, since the apprenticeship agreement between petitioner and private respondent has no force and effect in the
absence of a valid apprenticeship program duly approved by the DOLE, private respondent's assertion that he was hired
not as an apprentice but as a delivery boy ("kargador" or "pahinante") deserves credence. He should rightly be considered
as a regular employee of petitioner as defined by Article 280 of the Labor Code x x x. (Emphasis supplied)14

Republic Act No. 779615 (RA 7796), which created the TESDA, has transferred the authority over apprenticeship programs
from the Bureau of Local Employment of the DOLE to the TESDA. 16 RA 7796 emphasizes TESDA's approval of the
apprenticeship program as a pre-requisite for the hiring of apprentices. Such intent is clear under Section 4 of RA 7796:

SEC. 4. Definition of Terms. - As used in this Act:

xxx

j) "Apprenticeship" training within employment with compulsory related theoretical instructions involving a contract
between an apprentice and an employer on an approved apprenticeable occupation;

k) "Apprentice" is a person undergoing training for an approved apprenticeable occupation during an established

period assured by an apprenticeship agreement;

l) "Apprentice Agreement" is a contract wherein a prospective employer binds himself to train the apprentice who in turn
accepts the terms of training for a recognized apprenticeable occupation emphasizing the rights, duties and
responsibilities of each party;

m) "Apprenticeable Occupation" is an occupation officially endorsed by a tripartite body and approved for

apprenticeship by the Authority [TESDA]; (Emphasis supplied)cralawlibrary

In this case, the apprenticeship agreement was entered into between the parties before petitioner filed its apprenticeship
program with the TESDA for approval. Petitioner and Palad executed the apprenticeship agreement on 17 July 1997
wherein it was stated that the training would start on 17 July 1997 and would end approximately in December 1997. 17 On
25 July 1997, petitioner submitted for approval its apprenticeship program, which the TESDA subsequently approved on
26 September 1997.18 Clearly, the apprenticeship agreement was enforced even before the TESDA approved petitioner's
apprenticeship program. Thus, the apprenticeship agreement is void because it lacked prior approval from the TESDA.

The TESDA's approval of the employer's apprenticeship program is required before the employer is allowed to hire
apprentices. Prior approval from the TESDA is necessary to ensure that only employers in the highly technical industries
may employ apprentices and only in apprenticeable occupations. 19 Thus, under RA 7796, employers can only hire
apprentices for apprenticeable occupations which must be officially endorsed by a tripartite body and approved for
apprenticeship by the TESDA.ςηαñrοblεš  Î½Î¹r†υαl  lαω  lιbrαrÿ

This is to ensure the protection of apprentices and to obviate possible abuses by prospective employers who may want to
take advantage of the lower wage rates for apprentices and circumvent the right of the employees to be secure in their
employment.

The requisite TESDA approval of the apprenticeship program prior to the hiring of apprentices was further emphasized by
the DOLE with the issuance of Department Order No. 68-04 on 18 August 2004. Department Order No. 68-04, which
provides the guidelines in the implementation of the Apprenticeship and Employment Program of the government,
specifically states that no enterprise shall be allowed to hire apprentices unless its apprenticeship program is
registered and approved by TESDA.20

Since Palad is not considered an apprentice because the apprenticeship agreement was enforced before the TESDA's
approval of petitioner's apprenticeship program, Palad is deemed a regular employee performing the job of a "fish
cleaner." Clearly, the job of a "fish cleaner" is necessary in petitioner's business as a tuna and sardines factory. Under
Article 28021 of the Labor Code, an employment is deemed regular where the employee has been engaged to perform
activities which are usually necessary or desirable in the usual business or trade of the employer.

Illegal Termination of Palad

We shall now resolve whether petitioner illegally dismissed Palad.

Under Article 27922 of the Labor Code, an employer may terminate the services of an employee for just causes 23 or for
authorized causes.24 Furthermore, under Article 277(b)25 of the Labor Code, the employer must send the employee who is
about to be terminated, a written notice stating the causes for termination and must give the employee the opportunity to
be heard and to defend himself. Thus, to constitute valid dismissal from employment, two requisites must concur: (1) the
dismissal must be for a just or authorized cause; and (2) the employee must be afforded an opportunity to be heard and to
defend himself.26

In this case, the Labor Arbiter held that petitioner terminated Palad for habitual absenteeism and poor efficiency of
performance. Under Section 25, Rule VI, Book II of the Implementing Rules of the Labor Code, habitual absenteeism and
poor efficiency of performance are among the valid causes for which the employer may terminate the apprenticeship
agreement after the probationary period.

However, the NLRC reversed the finding of the Labor Arbiter on the issue of the legality of Palad's termination:

As to the validity of complainant's dismissal in her status as an apprentice, suffice to state that the findings of the Arbiter
that complainant was dismissed due to failure to meet the standards is nebulous. What clearly appears is that
complainant already passed the probationary status of the apprenticeship agreement of 200 hours at the time she was
terminated on 28 November 1997 which was already the fourth month of the apprenticeship period of 1000 hours. As
such, under the Code, she can only be dismissed for cause, in this case, for poor efficiency of performance on the job or
in the classroom for a prolonged period despite warnings duly given to the apprentice.

We noted that no clear and sufficient evidence exist to warrant her dismissal as an apprentice during the agreed
period. Besides the absence of any written warnings given to complainant reminding her of "poor performance,"
respondents' evidence in this respect consisted of an indecipherable or unauthenticated xerox of the
performance evaluation allegedly conducted on complainant. This is of doubtful authenticity and/or credibility,
being not only incomplete in the sense that appearing thereon is a signature (not that of complainant) side by
side with a date indicated as "1/16/98". From the looks of it, this signature is close to and appertains to the
typewritten position of "Division/Department Head", which is below the signature of complainant's immediate
superior who made the evaluation indicated as "11-15-97."

The only conclusion We can infer is that this evaluation was made belatedly, specifically, after the filing of the
case and during the progress thereof in the Arbitral level, as shown that nothing thereon indicate that
complainant was notified of the results. Its authenticity therefor, is a big question mark, and hence lacks any
credibility. Evidence, to be admissible in administrative proceedings, must at least have a modicum of
authenticity. This, respondents failed to comply with. As such, complainant is entitled to the payment of her wages for the
remaining two (2) months of her apprenticeship agreement. 27 (Emphasis supplied)cralawlibrary

Indeed, it appears that the Labor Arbiter's conclusion that petitioner validly terminated Palad was based mainly on the
performance evaluation allegedly conducted by petitioner. However, Palad alleges that she had no knowledge of the
performance evaluation conducted and that she was not even informed of the result of the alleged performance
evaluation. Palad also claims she did not receive a notice of dismissal, nor was she given the chance to explain.
According to petitioner, Palad did not receive the termination notice because Palad allegedly stopped reporting for work
after being informed of the result of the evaluation.

Under Article 227 of the Labor Code, the employer has the burden of proving that the termination was for a valid or
authorized cause.28 Petitioner failed to substantiate its claim that Palad was terminated for valid reasons. In fact, the
NLRC found that petitioner failed to prove the authenticity of the performance evaluation which petitioner claims to have
conducted on Palad, where Palad received a performance rating of only 27.75%. Petitioner merely relies on the
performance evaluation to prove Palad's inefficiency. It was likewise not shown that petitioner ever apprised Palad of the
performance standards set by the company. When the alleged valid cause for the termination of employment is not clearly
proven, as in this case, the law considers the matter a case of illegal dismissal. 29

Furthermore, Palad was not accorded due process. Even if petitioner did conduct a performance evaluation on Palad,
petitioner failed to warn Palad of her alleged poor performance. In fact, Palad denies any knowledge of the performance
evaluation conducted and of the result thereof. Petitioner likewise admits that Palad did not receive the notice of
termination30 because Palad allegedly stopped reporting for work. The records are bereft of evidence to show that
petitioner ever gave Palad the opportunity to explain and defend herself. Clearly, the two requisites for a valid dismissal
are lacking in this case.

WHEREFORE, we AFFIRM the Decision dated 12 November 2001 and the Resolution dated 5 April 2002 of the Court of
Appeals in CA-G.R. SP No. 60379.

SO ORDERED.
 THIRD DIVISION

[G.R. No. 122917. July 12, 1999.]

MARITES BERNARDO, ELVIRA GO DIAMANTE, REBECCA E. DAVID, DAVID P. PASCUAL, RAQUEL ESTILLER,
ALBERT HALLARE, EDMUND M. CORTEZ, JOSELITO O. AGDON, GEORGE P. LIGUTAN JR., CELSO M. YAZAR,
ALEX G. CORPUZ, RONALD M. DELFIN, ROWENA M. TABAQUERO, CORAZON C. DELOS REYES, ROBERT G.
NOORA, MILAGROS O. LEQUIGAN, ADRIANA F. TATLONGHARI, IKE CABANDUCOS, COCOY NOBELLO,
DORENDA CANTIMBUHAN, ROBERT MARCELO, LILIBETH Q. MARMOLEJO, JOSE E. SALES, ISABEL
MAMAUAG, VIOLETA G. MONTES, ALBINO TECSON, MELODY V. GRUELA, BERNADETH D. AGERO, CYNTHIA
DE VERA, LANI R. CORTEZ, MA. ISABEL B. CONCEPTION, DINDO VALERIO, ZENAIDA MATA, ARIEL DEL PILAR,
MARGARET CECILIA CANOZA, THELMA SEBASTIAN, MA. JEANETTE CERVANTES, JEANNIE RAMIL, ROZAIDA
PASCUAL, PINKY BALOLOA, ELIZABETH VENTURA, GRACE S. PARDO & RICO TIMOSA, Petitioners, v.
NATIONAL LABOR RELATIONS COMMISSION & FAR EAST BANK AND TRUST COMPANY, Respondents.

DECISION

PANGANIBAN, J.:

The Magna Carta for Disabled Persons mandates that qualified disabled persons be granted the same terms and
conditions of employment as qualified able-bodied employees. Once they have attained the status of regular workers,
they should be accorded all the benefits granted by law, notwithstanding written or verbal contracts to the contrary. This
treatment is rooted not merely on charity or accommodation, but on justice for all.chanrobles virtualawlibrary
chanrobles.com:chanrobles.com.ph

The Case

Challenged in the Petition for Certiorari 1 before us is the June 20, 1995 Decision 2 of the National Labor Relations
Commission (NLRC), 3 which affirmed the August, 22 1994 ruling of Labor Arbiter Cornelio L. Linsangan. The labor
arbiter’s Decision disposed as follows: 4 

"WHEREFORE, judgment is hereby rendered dismissing the above-mentioned complaint for lack of merit."cralaw
virtua1aw library

Also assailed is the August 4, 1995 Resolution 5 of the NLRC, which denied the Motion for Reconsideration.

The Facts

The facts were summarized by the NLRC in this wise: 6 

"Complainants numbering 43 (p. 176, Records) are deaf-mutes who were hired on various periods from 1988 to 1993 by
respondent Far East Bank and Trust Co. as Money Sorters and Counters through a uniformly worded agreement called
‘Employment Contract for Handicapped Workers’. (pp. 68 & 69, Records) The full text of said agreement is quoted
below:chanrob1es virtual 1aw library

‘EMPLOYMENT CONTRACT FOR HANDICAPPED WORKERS

This Contract, entered into by and between:chanrob1es virtual 1aw library

FAR EAST BANK AND TRUST COMPANY, a universal banking corporation duly organized and existing under and by
virtue of the laws of the Philippines, with business address at FEBTC Building, Muralla, Intramuros, Manila, represented
herein by its Assistant Vice President, MR. FLORENDO G. MARANAN, (hereinafter referred to as the ‘BANK’);

- and -

________________, ________________ years old, of legal age, _____________, and residing at __________________
(hereinafter referred to as the (‘EMPLOYEE’).

WITNESSETH: That

WHEREAS, the BANK, cognizant of its social responsibility, realizes that there is a need to provide disabled and
handicapped persons gainful employment and opportunities to realize their potentials, uplift their socio-economic well
being and welfare and make them productive, self-reliant and useful citizens to enable them to fully integrate in the
mainstream of society;chanroblesvirtual|awlibrary

WHEREAS, there are certain positions in the BANK which may be filled-up by disabled and handicapped persons,
particularly deaf-mutes, and the BANK ha[s] been approached by some civic-minded citizens and authorized government
agencies [regarding] the possibility of hiring handicapped workers for these positions;

WHEREAS, the EMPLOYEE is one of those handicapped workers who [were] recommended for possible employment
with the BANK;

NOW, THEREFORE, for and in consideration of the foregoing premises and in compliance with Article 80 of the Labor
Code of the Philippines as amended, the BANK and the EMPLOYEE have entered into this Employment Contract as
follows:chanrob1es virtual 1aw library

1. The BANK agrees to employ and train the EMPLOYEE, and the EMPLOYEE agrees to diligently and faithfully work
with the BANK, as Money Sorter and Counter.

2. The EMPLOYEE shall perform among others, the following duties and responsibilities:chanrob1es virtual 1aw library

i. Sort out bills according to color;

ii. Count each denomination per hundred, either manually or with the aid of a counting machine;

iii. Wrap and label bills per hundred;

iv. Put the wrapped bills into bundles; and

v. Submit bundled bills to the bank teller for verification.

3. The EMPLOYEE shall undergo a training period of one (1) month, after which the BANK shall determine whether or not
he/she should be allowed to finish the remaining term of this Contract.

4. The EMPLOYEE shall be entitled to an initial compensation of P118.00 per day, subject to adjustment in the sole
judgment of the BANK, payable every 15th and end of the month.

5. The regular work schedule of the EMPLOYEE shall be five (5) days per week, from Mondays thru Fridays, at eight (8)
hours a day. The EMPLOYEE may be required to perform overtime work as circumstance may warrant, for which
overtime work he/she [shall] be paid an additional compensation of 125% of his daily rate if performed during ordinary
days and 130% if performed during Saturday or [a] rest day.

6. The EMPLOYEE shall likewise be entitled to the following benefits:chanrob1es virtual 1aw library

i. Proportionate 13th month pay based on his basic daily wage.

ii. Five (5) days incentive leave.

iii. SSS premium payment.

7. The EMPLOYEE binds himself/herself to abide [by] and comply with all the BANK Rules and Regulations and Policies,
and to conduct himself/herself in a manner expected of all employees of the BANK.

8. The EMPLOYEE acknowledges the fact that he/she had been employed under a special employment program of the
BANK, for which reason the standard hiring requirements of the BANK were not applied in his/her case. Consequently,
the EMPLOYEE acknowledges and accepts the fact that the terms and conditions of the employment generally observed
by the BANK with respect to the BANK’s regular employee are not applicable to the EMPLOYEE, and that therefore, the
terms and conditions of the EMPLOYEE’s employment with the BANK shall be governed solely and exclusively by this
Contract and by the applicable rules and regulations that the Department of Labor and Employment may issue in
connection with the employment of disabled and handicapped workers. More specifically, the EMPLOYEE hereby
acknowledges that the provisions of Book Six of the Labor Code of the Philippines as amended, particularly on regulation
of employment and separation pay are not applicable to him/her.chanroblesvirtual|awlibrary

9. The Employment Contract shall be for a period of six (6) months or from ____ to ____ unless earlier terminated by the
BANK for any just or reasonable cause. Any continuation or extension of this Contract shall be in writing and therefore this
Contract will automatically expire at the end of its terms unless renewed in writing by the BANK.

IN WITNESS WHEREOF, the parties, have hereunto affixed their signature[s] this ____ day of _________________,
____________ at Intramuros, Manila, Philippines.’

"In 1988, two (2) deaf-mutes were hired under this Agreement; in 1989 another two (2); in 1990, nineteen (19); in 1991 six
(6); in 1992, six (6) and in 1993, twenty-one (21). Their employment[s] were renewed every six months such that by the
time this case arose, there were fifty-six (56) deaf-mutes who were employed by respondent under the said employment
agreement. The last one was Thelma Malindoy who was employed in 1992 and whose contract expired on July 1993.

x       x       x

"Disclaiming that complainants were regular employees, respondent Far East Bank and Trust Company maintained that
complainants who are a special class of workers — the hearing impaired employees were hired temporarily under [a]
special employment arrangement which was a result of overtures made by some civic and political personalities to the
respondent Bank; that complainant[s] were hired due to ‘pakiusap’ which must be considered in the light of the context of
the respondent Bank’s corporate philosophy as well as its career and working environment which is to maintain and
strengthen a corps of professionals trained and qualified officers and regular employees who are baccalaureate degree
holders from excellent schools which is an unbending policy in the hiring of regular employees; that in addition to this,
training continues so that the regular employee grows in the corporate ladder; that the idea of hiring handicapped workers
was acceptable to them only on a special arrangement basis; that it adopted the special program to help tide over a group
of handicapped workers such as deaf-mutes like the complainants who could do manual work for the respondent Bank;
that the task of counting and sorting of bills which was being performed by tellers could be assigned to deaf-mutes; that
the counting and sorting of money are tellering works which were always logically and naturally part and parcel of the
tellers’ normal functions; that from the beginning there have been no separate items in the respondent Bank plantilla for
sorters or counters; that the tellers themselves already did the sorting and counting chore as a regular feature and integral
part of their duties (p. 97, Records); that through the ‘pakiusap’ of Arturo Borjal, the tellers were relieved of this task of
counting and sorting bills in favor of deaf-mutes without creating new positions as there is no position either in the
respondent or in any other bank in the Philippines which deals with purely counting and sorting of bills in banking
operations." chanroblesvirtuallawlibrary:red

Petitioners specified when each of them was hired and dismissed, viz: 7 

"NAME OF PETITIONER WORKPLACE Date Hired Date Dismissed

1. MARITES BERNARDO Intramuros 12 NOV 90 17 NOV 93

2. ELVIRA GO DIAMANTE Intramuros 24 JAN 90 11 JAN 94

3. REBECCA E. DAVID Intramuros 16 APR 90 23 OCT 93

4. DAVID P. PASCUAL Bel-Air 15 OCT 88 21 NOV 94

5. RAQUEL ESTILLER Intramuros 2 JUL 92 4 JAN 94

6. ALBERT HALLARE West 4 JAN 91 9 JAN 94

7. EDMUND M. CORTEZ Bel-Air 15 JAN 91 3 DEC 93

8. JOSELITO O. AGDON Intramuros 5 NOV 90 17 NOV 93

9. GEORGE P. LIGUTAN, JR. Intramuros 6 SEPT 89 19 JAN 94

10. CELSO M. YAZAR Intramuros 8 FEB 93 8 AUG 93

11. ALEX G. CORPUZ Intramuros 15 FEB 93 15 AUG 93

12. RONALD M. DELFIN Intramuros 22 FEB 93 22 AUG 93

13. ROWENA M. TABAQUERO Intramuros 22 FEB 93 22 AUG 93

14. CORAZON C. DELOS REYES Intramuros 8 FEB 93 8 AUG 93

15. ROBERT G. NOORA Intramuros 15 FEB 93 15 AUG 93

16. MILAGROS O. LEQUIGAN Intramuros 1 FEB 93 1 AUG 93

17. ADRIANA F. TATLONGHARI Intramuros 22 JAN 93 22 JUL 93

18. IKE CABANDUCOS Intramuros 24 FEB 93 24 AUG 93

19. COCOY NOBELLO Intramuros 22 FEB 93 22 AUG 93

20. DORENDA CATIMBUHAN Intramuros 15 FEB 93 15 AUG 93

21. ROBERT MARCELO West 31 JUL 93 8 1 AUG 93

22. LILIBETH Q. MARMOLEJO West 15 JUN 90 21 NOV 93

23. JOSE E. SALES West 6 AUG 92 12 OCT 93

24. ISABEL MAMAUAG West 8 MAY 92 10 NOV 93

25. VIOLETA G. MONTES Intramuros 2 FEB 90 15 JAN 94

26. ALBINO TECSON Intramuros 7 NOV 91 10 NOV 93

27. MELODY V. GRUELA West 28 OCT 91 3 NOV 93

28. BERNADETH D. AGERO West 19 DEC 90 27 DEC 93

29. CYNTHIA DE VERA Bel-Air 26 JUN 90 3 DEC 93

30. LANI R. CORTEZ Bel-Air 15 OCT 88 10 DEC 93

31. MA. ISABEL B. CONCEPTION West 6 SEPT 90 6 FEB 94

32. DINDO VALERIO Intramuros 30 MAY 93 30 NOV 93

33. ZENAIDA MATA Intramuros 10 FEB 93 10 AUG 93

34. ARIEL DEL PILAR Intramuros 24 FEB 93 24 AUG 93

35. MARGARET CECILIA CANOZA Intramuros 27 JUL 90 4 FEB 94

36. THELMA SEBASTIAN Intramuros 12 NOV 90 17 NOV 93

37. MA. JEANETTE CERVANTES West 6 JUN 92 7 DEC 93

38. JEANNIE RAMIL Intramuros 23 APR 90 12 OCT 93

39. ROZAIDA PASCUAL Bel-Air 20 APR 89 29 OCT 93

40. PINKY BALOLOA West 3 JUN 91 2 DEC 93

41. ELIZABETH VENTURA West 12 MAR 90 FEB 94 [sic]

42. GRACE S. PARDO West 4 APR 90 13 MAR 94

43. RICO TIMOSA Intramuros 28 APR 93 28 OCT 93" 

As earlier noted, the labor arbiter and, on appeal, the NLRC ruled against herein petitioners. Hence, this recourse to this
Court. 9 

The Ruling of the NLRC

In affirming the ruling of the labor arbiter that herein petitioners could not be deemed regular employees under Article 280
of the Labor Code, as amended, Respondent Commission ratiocinated as follows:jgc:chanrobles.com.ph

"We agree that Art. 280 is not controlling herein. We give due credence to the conclusion that complainants were hired as
an accommodation to [the] recommendation of civic oriented personalities whose employment[s] were covered by . . .
Employment Contract[s] with special provisions on duration of contract as specified under Art. 80. Hence, as correctly
held by the Labor Arbiter a quo, the terms of the contract shall be the law between the parties." 10 

The NLRC also declared that the Magna Carta for Disabled Persons was not applicable, "considering the prevailing
circumstances/milieu of the case."cralaw virtua1aw library

Issues

In their Memorandum, petitioners cite the following grounds in support of their cause:jgc:chanrobles.com.ph

"I. The Honorable Commission committed grave abuse of discretion in holding that the petitioners — money sorters and
counters working in a bank — were not regular employees.

"II. The Honorable Commission committed grave abuse of discretion in holding that the employment contracts signed and
renewed by the petitioners — which provide for a period of six (6) months — were valid.

"III. The Honorable Commission committed grave abuse of discretion in not applying the provisions of the Magna Carta for
the Disabled (Republic Act No. 7277), on proscription against discrimination against disabled persons." 11 

In the main, the Court will resolve whether petitioners have become regular employees.

This Court’s Ruling

The petition is meritorious. However, only the employees, who worked for more than six months and whose contracts
were renewed are deemed regular. Hence, their dismissal from employment was illegal.

Preliminary Matter: Propriety of Certiorari

Respondent Far East Bank and Trust Company argues that a review of the findings of facts of the NLRC is not allowed in
a petition for certiorari. Specifically, it maintains that the Court cannot pass upon the findings of public respondents that
petitioners were not regular employees.chanrobles.com : virtual law library

True, the Court, as a rule, does not review the factual findings of public respondents in a certiorariproceeding. In resolving
whether the petitioners have become regular employees, we shall not change the facts found by the public Respondent.
Our task is merely to determine whether the NLRC committed grave abuse of discretion in applying the law to the
established facts, as above-quoted from the assailed Decision.
Main Issue: Are Petitioners Regular Employees?

Petitioners maintain that they should be considered regular employees, because their task as money sorters and counters
was necessary and desirable to the business of respondent bank. They further allege that their contracts served merely to
preclude the application of Article 280 and to bar them from becoming regular employees.

Private respondent, on the other hand, submits that petitioners were hired only as "special workers and should not in any
way be considered as part of the regular complement of the Bank." 12 Rather, they were "special" workers under Article
80 of the Labor Code. Private respondent contends that it never solicited the services of petitioners, whose employment
was merely an "accommodation" in response to the requests of government officials and civic-minded citizens. They were
told from the start, "with the assistance of government representatives," that they could not become regular employees
because there were no plantilla positions for "money sorters," whose task used to be performed by tellers. Their contracts
were renewed several times, not because of need "but merely for humanitarian reasons." Respondent submits that "as of
the present, the ‘special position’ that was created for the petitioners no longer exist[s] in private respondent [bank], after
the latter had decided not to renew anymore their special employment contracts." chanrobles virtual lawlibrary

At the outset, let it be known that this Court appreciates the nobility of private respondent’s effort to provide employment
to physically impaired individuals and to make them more productive members of society. However, we cannot allow it to
elude the legal consequences of that effort, simply because it now deems their employment irrelevant. The facts, viewed
in light of the Labor Code and the Magna Carta for Disabled Persons, indubitably show that the petitioners, except sixteen
of them, should be deemed regular employees. As such, they have acquired legal rights that this Court is duty-bound to
protect and uphold, not as a matter of compassion but as a consequence of law and justice.

The uniform employment contracts of the petitioners stipulated that they shall be trained for a period of one month, after
which the employer shall determine whether or not they should be allowed to finish the 6-month term of the contract.
Furthermore, the employer may terminate the contract at any time for a just and reasonable cause. Unless renewed in
writing by the employer, the contract shall automatically expire at the end of the term.

According to private respondent, the employment contracts were prepared in accordance with Article 80 of the Labor
Code, which provides:jgc:chanrobles.com.ph

"ARTICLE 80. Employment agreement. — Any employer who employs handicapped workers shall enter into an
employment agreement with them, which agreement shall include:chanrob1es virtual 1aw library

(a) The names and addresses of the handicapped workers to be employed;

(b) The rate to be paid the handicapped workers which shall be not less than seventy five (75%) per cent of the applicable
legal minimum wage;

(c) The duration of employment period; and

(d) The work to be performed by handicapped workers.

The employment agreement shall be subject to inspection by the Secretary of Labor or his duly authorized
representatives."cralaw virtua1aw library

The stipulations in the employment contracts indubitably conform with the aforecited provision. Succeeding events and
the enactment of RA No. 7277 (the Magna Carta for Disabled Persons), 13 however, justify the application of Article 280
of the Labor Code. 

Respondent bank entered into the aforesaid contract with a total of 56 handicapped workers and renewed the contracts of
37 of them. In fact, two of them worked from 1988 to 1993. Verily, the renewal of the contracts of the handicapped
workers and the hiring of others lead to the conclusion that their tasks were beneficial and necessary to the bank. More
important, these facts show that they were qualified to perform the responsibilities of their positions. In other words, their
disability did not render them unqualified or unfit for the tasks assigned to them.

In this light, the Magna Carta for Disabled Persons mandates that a qualified disabled employee should be given the
same terms and conditions of employment as a qualified able-bodied person. Section 5 of the Magna Carta
provides:chanroblesvirtualawlibrary

"SECTION 5. Equal Opportunity for Employment. — No disabled person shall be denied access to opportunities for
suitable employment. A qualified disabled employee shall be subject to the same terms and conditions of employment and
the same compensation, privileges, benefits, fringe benefits, incentives or allowances as a qualified able bodied
person."cralaw virtua1aw library

The fact that the employees were qualified disabled persons necessarily removes the employment contracts from the
ambit of Article 80. Since the Magna Carta accords them the rights of qualified able-bodied persons, they are thus
covered by Article 280 of the Labor Code, which provides:jgc:chanrobles.com.ph

"ARTICLE 280. Regular and Casual Employment. — The provisions of written agreement to the contrary notwithstanding
and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee
has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the
employer, except where the employment has been fixed for a specific project or undertaking the completion or termination
of which has been determined at the time of the engagement of the employee or where the work or services to be
performed is seasonal in nature and the employment is for the duration of the season.

"An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That, any
employee who has rendered at least one year of service, whether such service is continuous or broken, shall be
considered as regular employee with respect to the activity in which he is employed and his employment shall continue
while such activity exists."cralaw virtua1aw library

The test of whether an employee is regular was laid down in De Leon v. NLRC , 14 in which this Court
held:jgc:chanrobles.com.ph

"The primary standard, therefore, of determining regular employment is the reasonable connection between the particular
activity performed by the employee in relation to the usual trade or business of the employer. The test is whether the
former is usually necessary or desirable in the usual business or trade of the employer. The connection can be
determined by considering the nature of the work performed and its relation to the scheme of the particular business or
trade in its entirety. Also if the employee has been performing the job for at least one year, even if the performance is not
continuous and merely intermittent, the law deems repeated and continuing need for its performance as sufficient
evidence of the necessity if not indispensability of that activity to the business. Hence, the employment is considered
regular, but only with respect to such activity, and while such activity exists."cralaw virtua1aw library

Without a doubt, the task of counting and sorting bills is necessary and desirable to the business of respondent bank. With
the exception of sixteen of them, petitioners performed these tasks for more than six months. Thus, the following twenty-
seven petitioners should be deemed regular employees: Marites , Elvira Go Diamante, Rebecca E. David, David P.
Pascual, Raquel Estiller, Albert Hallare, Edmund M. Cortez, Joselito O. Agdon, George P. Ligutan Jr., Lilibeth Q.
Marmolejo, Jose E. Sales, Isabel Mamauag, Violeta G. Montes, Albino Tecson, Melody V. Gruela, Bernadeth D. Agero,
Cynthia de Vera, Lani R. Cortez, Ma. Isabel B. Conception, Margaret Cecilia Canoza, Thelma Sebastian, Ma. Jeanette
Cervantes, Jeannie Ramil, Rozaida Pascual, Pinky Baloloa, Elizabeth Ventura and Grace S. Pardo.chanrobles
virtuallawlibrary

As held by the Court, "Articles 280 and 281 of the Labor Code put an end to the pernicious practice of making permanent
casuals of our lowly employees by the simple expedient of extending to them probationary appointments, ad infinitum." 15
The contract signed by petitioners is akin to a probationary employment, during which the bank determined the
employees’ fitness for the job. When the bank renewed the contract after the lapse of the six-month probationary period,
the employees thereby became regular employees. 16 No employer is allowed to determine indefinitely the fitness of its
employees.

As regular employees, the twenty-seven petitioners are entitled to security of tenure; that is, their services may be
terminated only for a just or authorized cause. Because respondent failed to show such cause, 17 these twenty-seven
petitioners are deemed illegally dismissed and therefore entitled to back wages and reinstatement without loss of seniority
rights and other privileges. 18 Considering the allegation of respondent that the job of money sorting is no longer available
because it has been assigned back to the tellers to whom it originally belonged, 19 petitioners are hereby awarded
separation pay in lieu of reinstatement. 20 

Because the other sixteen worked only for six months, they are not deemed regular employees and hence not entitled to
the same benefits.

Applicability of the Brent Ruling

Respondent bank, citing Brent School v. Zamora, 21 in which the Court upheld the validity of an employment contract with
a fixed term, argues that the parties entered into the contract on equal footing. It adds that the petitioners had in fact an
advantage, because they were backed by then DSWD Secretary Mita Pardo de Tavera and Representative Arturo Borjal.

We are not persuaded. The term limit in the contract was premised on the fact that the petitioners were disabled, and that
the bank had to determine their fitness for the position. Indeed, its validity is based on Article 80 of the Labor Code. But as
noted earlier, petitioners proved themselves to be qualified disabled persons who, under the Magna Carta for Disabled
Persons, are entitled to terms and conditions of employment enjoyed by qualified able-bodied individuals; hence, Article
80 does not apply because petitioners are qualified for their positions. The validation of the limit imposed on their
contracts, imposed by reason of their disability, was a glaring instance of the very mischief sought to be addressed by the
new law.

Moreover, it must be emphasized that a contract of employment is impressed with public interest. 22 Provisions of
applicable statutes are deemed written into the contract, and the "parties are not at liberty to insulate themselves and their
relationships from the impact of labor laws and regulations by simply contracting with each other." 23 Clearly, the
agreement of the parties regarding the period of employment cannot prevail over the provisions of the Magna Carta for
Disabled Persons, which mandate that petitioners must be treated as qualified able-bodied employees.chanrobles virtual
lawlibrary

Respondent’s reason for terminating the employment of petitioners is instructive. Because the Bangko Sentral ng Pilipinas
(BSP) required that cash in the bank be turned over to the BSP during business hours from 8:00 a.m. to 5:00 p.m.,
respondent resorted to nighttime sorting and counting of money. Thus, it reasons that this task "could not be done by deaf
mutes because of their physical limitations as it is very risky for them to travel at night." 24 We find no basis for this
argument. Travelling at night involves risks to handicapped and able-bodied persons alike. This excuse cannot justify the
termination of their employment.

Other Grounds Cited by Respondent

Respondent argues that petitioners were merely "accommodated" employees. This fact does not change the nature of
their employment. As earlier noted, an employee is regular because of the nature of work and the length of service, not
because of the mode or even the reason for hiring them.

Equally unavailing are private respondent’s arguments that it did not go out of its way to recruit petitioners, and that its
plantilla did not contain their positions. In L. T . Datu v. NLRC, 25 the Court held that "the determination of whether
employment is casual or regular does not depend on the will or word of the employer, and the procedure of hiring . . . but
on the nature of the activities performed by the employee, and to some extent, the length of performance and its
continued existence."cralaw virtua1aw library

Private respondent argues that the petitioners were informed from the start that they could not become regular
employees. In fact, the bank adds, they agreed with the stipulation in the contract regarding this point. Still, we are not
persuaded. The well-settled rule is that the character of employment is determined not by stipulations in the contract, but
by the nature of the work performed. 26 Otherwise, no employee can become regular by the simple expedient of
incorporating this condition in the contract of employment.

In this light, we iterate our ruling in Romares v. NLRC : 27 

"Article 280 was emplaced in our statute books to prevent the circumvention of the employee’s right to be secure in his
tenure by indiscriminately and completely ruling out all written and oral agreements inconsistent with the concept of
regular employment defined therein. Where an employee has been engaged to perform activities which are usually
necessary or desirable in the usual business of the employer, such employee is deemed a regular employee and is
entitled to security of tenure notwithstanding the contrary provisions of his contract of
employment.chanroblesvirtuallawlibrary:red

"x       x       x

"At this juncture, the leading case of Brent School, Inc. v. Zamora proves instructive. As reaffirmed in subsequent cases,
this Court has upheld the legality of fixed-term employment. It ruled that the decisive determinant in ‘term employment’
should not be the activities that the employee is called upon to perform but the day certain agreed upon the parties for the
commencement and termination of their employment relationship. But this Court went on to say that where from the
circumstances it is apparent that the periods have been imposed to preclude acquisition of tenurial security by the
employee, they should be struck down or disregarded as contrary to public policy and morals."cralaw virtua1aw library

In rendering this Decision, the Court emphasizes not only the constitutional bias in favor of the working class, but also the
concern of the State for the plight of the disabled. The noble objectives of Magna Carta for Disabled Persons are not
based merely on charity or accommodation, but on justice and the equal treatment of qualified persons, disabled or not. In
the present case, the handicap of petitioners (deaf-mutes) is not a hindrance to their work. The eloquent proof of this
statement is the repeated renewal of their employment contracts. Why then should they be dismissed, simply because
they are physically impaired? The Court believes, that, after showing their fitness for the work assigned to them, they
should be treated and granted the same rights like any other regular employees.

In this light, we note the Office of the Solicitor General’s prayer joining the petitioners’ cause. 28 

WHEREFORE, premises considered, the Petition is hereby GRANTED. The June 20, 1995 Decision and the August 4,
1995 Resolution of the NLRC are REVERSED and SET ASIDE. Respondent Far East Bank and Trust Company is hereby
ORDERED to pay back wages and separation pay to each of the following twenty-seven (27) petitioners, namely, Marites
Bernardo, Elvira Go Diamante, Rebecca E. David, David P. Pascual, Raquel Estiller, Albert Hallare, Edmund M. Cortez,
Joselito O. Agdon, George P. Ligutan Jr., Lilibeth Q. Marmolejo, Jose E. Sales, Isabel Mamauag, Violeta G. Montes,
Albino Tecson, Melody V. Gruela, Bernadeth D. Agero, Cynthia de Vera, Lani R. Cortez, Ma. Isabel B. Conception,
Margaret Cecilia Canoza, Thelma Sebastian, Ma. Jeanette Cervantes, Jeannie Ramil, Rozaida Pascual, Pinky Baloloa,
Elizabeth Ventura and Grace S. Pardo. The NLRC is hereby directed to compute the exact amount due each of said
employees, pursuant to existing laws and regulations, within fifteen days from the finality of this Decision. No
costs.chanrobles.com:cralaw:red

SO ORDERED.