Labor

Republic of the PhilippinesSUPREME COURTManilaEN BANCG.R. No. 81958 June 30, 1988PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS, INC.,petitioner,vs.HON. FRANKLIN M. DRILON as Secretary of Labor and Employment, and TOMAS D. ACHACOSO, as Administrator of the Philippine Overseas Employment Administration,respondents.Gutierrez & Alo Law Offices for petitioner.SARMIENTO,J.:The petitioner, Philippine Association of Service Exporters, Inc. (PASEI, for short), a firm "engaged principally in the recruitment of Filipino workers, male and female, for overseas placement,"1challenges the Constitutional validity of Department Order No. 1, Series of 1988, of the Department of Labor and Employment, in the character of "GUIDELINES GOVERNING THE TEMPORARY SUSPENSION OF DEPLOYMENT OF FILIPINO DOMESTIC AND HOUSEHOLD WORKERS," in this petition for certiorari and prohibition. Specifically, the measure is assailed for "discrimination against males or females;"2that it "does not apply to all Filipino workers but only to domestic helpers and females with similar skills;"3and that it is violative of the right to travel. It is held likewise to be an invalid exercise of the lawmaking power, police power being legislative, and not executive, in character.In its supplement to the petition, PASEI invokes Section 3, of Article XIII, of the Constitution, providing for worker participation "in policy and decision-making processes affecting their rights and benefits as may be provided by law."4Department Order No. 1, it is contended, was passed in the absence of prior consultations. It is claimed, finally, to be in violation of the Charter's non-impairment clause, in addition to the "great and irreparable injury" that PASEI members face should the Order be further enforced.On May 25, 1988, the Solicitor General, on behalf of the respondents Secretary of Labor and Administrator of the Philippine Overseas Employment Administration, filed a Comment informing the Court that on March 8, 1988, the respondent Labor Secretary lifted the deployment ban in the states of Iraq, Jordan, Qatar, Canada, Hongkong, United States, Italy, Norway, Austria, and Switzerland.*In submitting the validity of the challenged "guidelines," the Solicitor General invokes the police power of the Philippine State.It is admitted that Department Order No. 1 is in the nature of a police power measure. The only question is whether or not it is valid under the Constitution.The concept of police power is well-established in this jurisdiction. It has been defined as the "state authority to enact legislation that may interfere with personal liberty or property in order to promote the general welfare."5As defined, it consists of (1) an imposition of restraint upon liberty or property, (2) in order to foster the common good. It is not capable of an exact definition but has been, purposely, veiled in general terms to underscore its all-comprehensive embrace."Its scope, ever-expanding to meet the exigencies of the times, even to anticipate the future where it could be done, provides enough room for an efficient and flexible response to conditions and circumstances thus assuring the greatest benefits."6It finds no specific Constitutional grant for the plain reason that it does not owe its origin to the Charter. Along with the taxing power and eminent domain, it is inborn in the very fact of statehood and sovereignty. It is a fundamental attribute of government that has enabled it to perform the most vital functions of governance. Marshall, to whom the expression has been credited,7refers to it succinctly as te plenary power of the State "to govern its citizens."8"The police power of the State ... is a power coextensive with self- protection, and it is not inaptly termed the "law of overwhelming necessity." It may be said to be that inherent and plenary power in the State which enables it to prohibit all things hurtful to the comfort, safety, and welfare of society."9It constitutes an implied limitation on the Bill of Rights. According to Fernando, it is "rooted in the conception that men in organizing the state and imposing upon its government limitations to safeguard constitutional rights did not intend thereby to enable an individual citizen or a group of citizens to obstruct unreasonably the enactment of such salutary measures calculated to ensure communal peace, safety, good order, and welfare."10Significantly, the Bill of Rights itself does not purport to be an absolute guaranty of individual rights and liberties "Even liberty itself, the greatest of all rights, is not unrestricted license to act according to one's will."11It is subject to the far more overriding demands and requirements of the greater number.Notwithstanding its extensive sweep, police power is not without its own limitations. For all its awesome consequences, it may not be exercised arbitrarily or unreasonably. Otherwise, and in that event, it defeats the purpose for which it is exercised, that is, to advance the public good. Thus, when the power is used to further private interests at the expense of the citizenry, there is a clear misuse of the power.12In the light of the foregoing, the petition must be dismissed.As a general rule, official acts enjoy a presumed vahdity.13In the absence of clear and convincing evidence to the contrary, the presumption logically stands.The petitioner has shown no satisfactory reason why the contested measure should be nullified. There is no question that Department Order No. 1 applies only to "female contract workers,"14but it does not thereby make an undue discrimination between the sexes. It is well-settled that "equality before the law" under the Constitution15does not import a perfect Identity of rights among all men and women. It admits of classifications, provided that (1) such classifications rest on substantial distinctions; (2) they are germane to the purposes of the law; (3) they are not confined to existing conditions; and (4) they apply equally to all members of the same class.16The Court is satisfied that the classification made-the preference for female workers rests on substantial distinctions.As a matter of judicial notice, the Court is well aware of the unhappy plight that has befallen our female labor force abroad, especially domestic servants, amid exploitative working conditions marked by, in not a few cases, physical and personal abuse. The sordid tales of maltreatment suffered by migrant Filipina workers, even rape and various forms of torture, confirmed by testimonies of returning workers, are compelling motives for urgent Government action. As precisely the caretaker of Constitutional rights, the Court is called upon to protect victims of exploitation. In fulfilling that duty, the Court sustains the Government's efforts.The same, however, cannot be said of our male workers. In the first place, there is no evidence that, except perhaps for isolated instances, our men abroad have been afflicted with an Identical predicament. The petitioner has proffered no argument that the Government should act similarly with respect to male workers. The Court, of course, is not impressing some male chauvinistic notion that men are superior to women. What the Court is saying is that it was largely a matter of evidence (that women domestic workers are being ill-treated abroad in massive instances) and not upon some fanciful or arbitrary yardstick that the Government acted in this case. It is evidence capable indeed of unquestionable demonstration and evidence this Court accepts. The Court cannot, however, say the same thing as far as men are concerned. There is simply no evidence to justify such an inference. Suffice it to state, then, that insofar as classifications are concerned, this Court is content that distinctions are borne by the evidence. Discrimination in this case is justified.As we have furthermore indicated, executive determinations are generally final on the Court. Under a republican regime, it is the executive branch that enforces policy. For their part, the courts decide, in the proper cases, whether that policy, or the manner by which it is implemented, agrees with the Constitution or the laws, but it is not for them to question its wisdom. As a co-equal body, the judiciary has great respect for determinations of the Chief Executive or his subalterns, especially when the legislature itself has specifically given them enough room on how the law should be effectively enforced. In the case at bar, there is no gainsaying the fact, and the Court will deal with this at greater length shortly, that Department Order No. 1 implements the rule-making powers granted by the Labor Code. But what should be noted is the fact that in spite of such a fiction of finality, the Court is on its own persuaded that prevailing conditions indeed call for a deployment ban.There is likewise no doubt that such a classification is germane to the purpose behind the measure. Unquestionably, it is the avowed objective of Department Order No. 1 to "enhance the protection for Filipino female overseas workers"17this Court has no quarrel that in the midst of the terrible mistreatment Filipina workers have suffered abroad, a ban on deployment will be for their own good and welfare.The Order does not narrowly apply to existing conditions. Rather, it is intended to apply indefinitely so long as those conditions exist. This is clear from the Order itself ("Pending review of the administrative and legal measures, in the Philippines and in the host countries . . ."18), meaning to say that should the authorities arrive at a means impressed with a greater degree of permanency, the ban shall be lifted. As a stop-gap measure, it is possessed of a necessary malleability, depending on the circumstances of each case. Accordingly, it provides:9. LIFTING OF SUSPENSION. The Secretary of Labor and Employment (DOLE) may, upon recommendation of the Philippine Overseas Employment Administration (POEA), lift the suspension in countries where there are:1. Bilateral agreements or understanding with the Philippines, and/or,2. Existing mechanisms providing for sufficient safeguards to ensure the welfare and protection of Filipino workers.19The Court finds, finally, the impugned guidelines to be applicable to all female domestic overseas workers. That it does not apply to "all Filipina workers"20is not an argument for unconstitutionality. Had the ban been given universal applicability, then it would have been unreasonable and arbitrary. For obvious reasons, not all of them are similarly circumstanced. What the Constitution prohibits is the singling out of a select person or group of persons within an existing class, to the prejudice of such a person or group or resulting in an unfair advantage to another person or group of persons. To apply the ban, say exclusively to workers deployed by A, but not to those recruited by B, would obviously clash with the equal protection clause of the Charter. It would be a classic case of what Chase refers to as a law that "takes property from A and gives it to B."21It would be an unlawful invasion of property rights and freedom of contract and needless to state, an invalid act.22(Fernando says: "Where the classification is based on such distinctions that make a real difference as infancy, sex, and stage of civilization of minority groups, the better rule, it would seem, is to recognize its validity only if the young, the women, and the cultural minorities are singled out for favorable treatment. There would be an element of unreasonableness if on the contrary their status that calls for the law ministering to their needs is made the basis of discriminatory legislation against them. If such be the case, it would be difficult to refute the assertion of denial of equal protection."23In the case at bar, the assailed Order clearly accords protection to certain women workers, and not the contrary.)It is incorrect to say that Department Order No. 1 prescribes a total ban on overseas deployment. From scattered provisions of the Order, it is evident that such a total ban has hot been contemplated. We quote:5. AUTHORIZED DEPLOYMENT-The deployment of domestic helpers and workers of similar skills defined herein to the following [sic] are authorized under these guidelines and are exempted from the suspension.5.1 Hirings by immediate members of the family of Heads of State and Government;5.2 Hirings by Minister, Deputy Minister and the other senior government officials; and5.3 Hirings by senior officials of the diplomatic corps and duly accredited international organizations.5.4 Hirings by employers in countries with whom the Philippines have [sic] bilateral labor agreements or understanding.xxx xxx xxx7. VACATIONING DOMESTIC HELPERS AND WORKERS OF SIMILAR SKILLS--Vacationing domestic helpers and/or workers of similar skills shall be allowed to process with the POEA and leave for worksite only if they are returning to the same employer to finish an existing or partially served employment contract. Those workers returning to worksite to serve a new employer shall be covered by the suspension and the provision of these guidelines.xxx xxx xxx9. LIFTING OF SUSPENSION-The Secretary of Labor and Employment (DOLE) may, upon recommendation of the Philippine Overseas Employment Administration (POEA), lift the suspension in countries where there are:1. Bilateral agreements or understanding with the Philippines, and/or,2. Existing mechanisms providing for sufficient safeguards to ensure the welfare and protection of Filipino workers.24xxx xxx xxxThe consequence the deployment ban has on the right to travel does not impair the right. The right to travel is subject, among other things, to the requirements of "public safety," "as may be provided by law."25Department Order No. 1 is a valid implementation of the Labor Code, in particular, its basic policy to "afford protection to labor,"26pursuant to the respondent Department of Labor's rule-making authority vested in it by the Labor Code.27The petitioner assumes that it is unreasonable simply because of its impact on the right to travel, but as we have stated, the right itself is not absolute. The disputed Order is a valid qualification thereto.Neither is there merit in the contention that Department Order No. 1 constitutes an invalid exercise of legislative power. It is true that police power is the domain of the legislature, but it does not mean that such an authority may not be lawfully delegated. As we have mentioned, the Labor Code itself vests the Department of Labor and Employment with rulemaking powers in the enforcement whereof.28The petitioners's reliance on the Constitutional guaranty of worker participation "in policy and decision-making processes affecting their rights and benefits"29is not well-taken. The right granted by this provision, again, must submit to the demands and necessities of the State's power of regulation.The Constitution declares that:Sec. 3. The State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full employment and equality of employment opportunities for all.30"Protection to labor" does not signify the promotion of employment alone. What concerns the Constitution more paramountly is that such an employment be above all, decent, just, and humane. It is bad enough that the country has to send its sons and daughters to strange lands because it cannot satisfy their employment needs at home. Under these circumstances, the Government is duty-bound to insure that our toiling expatriates have adequate protection, personally and economically, while away from home. In this case, the Government has evidence, an evidence the petitioner cannot seriously dispute, of the lack or inadequacy of such protection, and as part of its duty, it has precisely ordered an indefinite ban on deployment.The Court finds furthermore that the Government has not indiscriminately made use of its authority. It is not contested that it has in fact removed the prohibition with respect to certain countries as manifested by the Solicitor General.The non-impairment clause of the Constitution, invoked by the petitioner, must yield to the loftier purposes targetted by the Government.31Freedom of contract and enterprise, like all other freedoms, is not free from restrictions, more so in this jurisdiction, wherelaissez fairehas never been fully accepted as a controlling economic way of life.This Court understands the grave implications the questioned Order has on the business of recruitment. The concern of the Government, however, is not necessarily to maintain profits of business firms. In the ordinary sequence of events, it is profits that suffer as a result of Government regulation. The interest of the State is to provide a decent living to its citizens. The Government has convinced the Court in this case that this is its intent. We do not find the impugned Order to be tainted with a grave abuse of discretion to warrant the extraordinary relief prayed for.WHEREFORE, the petition is DISMISSED. No costs.SO ORDERED.Yap, C.J., Fernan, Narvasa, Melencio-Herrera, Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin, Cortes and Grio-Aquino, JJ., concur.Gutierrez, Jr. and Medialdea, JJ., are on leave.

Republic of the PhilippinesSUPREME COURTManilaSECOND DIVISION

G.R. No. 77875 February 4, 1993PHILIPPINE AIRLINES, INC.,petitioner,vs.ALBERTO SANTOS, JR., HOUDIEL MAGADIA, GILBERT ANTONIO, REGINO DURAN, PHILIPPINE AIRLINES EMPLOYE33ES ASSOCIATION, and THE NATIONAL LABOR RELATIONS COMMISSION,respondents.Fortunato Gupit, Jr., Solon R. Garcia, Rene B. Gorospe, Bienvinodo T. Jamoralin, jr. and Paulino D. Ungos, Jr. for petitioner.Adolpho M. Guerzon for private respondents.REGALADO,J.:The instant petition forcertiorariseeks to set aside the decision of The National Labor Relations Commission (NLRC) in NLRC Case No. 4-1206-85, promulgated on December 11, 1986,1containing the following disposition:WHEREFORE, in view of the foregoing consideration, the Decision appealed from is set aside and another one entered, declaring the suspension of complainants to be illegal and consequently, respondent PAL is directed to pay complainants their salaries corresponding to the respective period(s) of their suspension, and to delete the disciplinary action from complainants' service records.2These material facts recited in the basic petition are virtually undisputed and we reproduce the same hereunder:1. Individual respondents are all Port Stewards of Catering Sub-Department, Passenger Services Department of petitioner. Their duties and responsibilities, among others, are:Prepares meal orders and checklists, setting up standard equipment in accordance with the requirements of the type of service for each flight; skiing, binning, and inventorying of Commissary supplies and equipment.2. On various occasions, several deductions were made from their salary. The deductions represented losses of inventoried items charged to them for mishandling of company properties . . . which respondents resented. Such that on August 21, 1984, individual respondents, represented by the union, made a formal notice regarding the deductions to petitioner thru Mr. Reynaldo Abad, Manager for Catering. . . .As there was no action taken on said representation, private respondents filed a formal grievance on November 4, 1984 pursuant to the grievance machinery Step 1 of the Collective Bargaining Agreement between petitioner and the union. . . . The topics which the union wanted to be discussed in the said grievance were the illegal/questionable salary deductions and inventory of bonded goods and merchandise being done by catering service personnel which they believed should not be their duty.4. The said grievance was submitted on November 21, 1984 to the office of Mr. Reynaldo Abad, Manager for Catering, who at the time was on vacation leave. . . .5. Subsequently, the grievants (individual respondents) thru the shop steward wrote a letter on December 5, 1984 addressed to the office of Mr. Abad, who was still on leave at the time, that inasmuch as no reply was made to their grievance which "was duly received by your secretary" and considering that petitioner had only five days to resolve the grievance as provided for in the CBA, said grievance as believed by them (private respondents) was deemed resolved in their favor. . . .6. Upon Mr. Abad's return on December 7, 1984, he immediately informed the grievants and scheduled a meeting on December 12, 1984. . . .7. Thereafter, the individual respondents refused to conduct inventory works. Alberto Santos, Jr. did not conduct ramp inventory on December 7, 10 and 12. Gilbert Antonio did not conduct ramp inventory on December 10. In like manner, Regino Duran and Houdiel Magadia did not conduct the same on December 10 and 12.8. At the grievance meeting which was attended by some union representatives, Mr. Abad resolved the grievance by denying the petition of individual respondents and adopted the position that inventory of bonded goods is part of their duty as catering service personnel, and as for the salary deductions for losses, he rationalized:1. It was only proper that employees are charged for the amount due to mishandling of company property which resulted to losses. However, loss may be cost price 1/10 selling price.9. As there was no ramp inventory conducted on the mentioned dates, Mr. Abad, on January 3, 1985 wrote by an inter-office memorandum addressed to the grievants, individual respondents herein, for them to explain on (sic) why no disciplinary action should be taken against them for not conducting ramp inventory. . . .10. The directive was complied with . . . . The reason for not conducting ramp inventory was put forth as:4. Since the grievance step 1 was not decided and no action was done by your office within 5 days from November 21, 1984, per provision of the PAL-PALEA CBA, Art. IV, Sec. 2, the grievance is deemed resolved in PALEA's favor.11. Going over the explanation, Mr. Abad found the same unsatisfactory. Thus, a penalty of suspension ranging from 7 days to 30 days were (sic) imposed depending on the number of infractions committed.*12. After the penalty of suspension was meted down, PALEA filed another grievance asking for lifting of, or at least, holding in abeyance the execution of said penalty. The said grievance was forthwith denied but the penalty of suspension with respect to respondent Ramos was modified, such that his suspension which was originally from January 15, 1985 to April 5, 1985 was shortened by one month and was lifted on March 5, 1985. The union, however, made a demand for the reimbursement of the salaries of individual respondents during the period of their suspension.13. Petitioner stood pat (o)n the validity of the suspensions. Hence, a complaint for illegal suspension was filed before theArbitration Branch of the Commission, . . . Labor Arbiter Ceferina J. Diosana, on March 17, 1986, ruled in favor of petitioner by dismissing the complaint. . . .3Private respondents appealed the decision of the labor arbiter to respondent commission which rendered the aforequoted decision setting aside the labor arbiter's order of dismissal. Petitioner's motion for reconsideration having been denied, it interposed the present petition.The Court is accordingly called upon to resolve the issue of whether or not public respondent NLRC acted with grave abuse of discretion amounting to lack of jurisdiction in rendering the aforementioned decision.Evidently basic and firmly settled is the rule that judicial review by this Court in labor cases does not go so far as to evaluate the sufficiency of the evidence upon which the labor officer or office based his or its determination, but is limited to issues of jurisdiction and grave abuse of discretion.4It has not been shown that respondent NLRC has unlawfully neglected the performance of an act which the law specifically enjoins it to perform as a duty or has otherwise unlawfully excluded petitioner from the exercise of a right to which it is entitled.The instant case hinges on the interpretation of Section 2, Article IV of the PAL-PALEA Collective Bargaining Agreement, (hereinafter, CBA), to wit:Sec. 2 Processing of Grievancesxxx xxx xxxSTEP 1 Any employee who believes that he has a justifiable grievance shall take the matter up with his shop steward. If the shop steward feels there is justification for taking the matter up with the Company, he shall record the grievance on the grievance form heretofore agreed upon by the parties. Two (2) copies of the grievance form properly filled, accepted, and signed shall then be presented to and discussed by the shop steward with the division head. The division head shall answer the grievance within five (5) days from the date of presentation by inserting his decision on the grievance form, signing and dating same, and returning one copy to the shop steward.If the division head fails to act within the five (5)-day regl(e)mentary period, the grievance must be resolved in favor of the aggrieved party. If the division head's decision is not appealed to Step II, the grievance shall be considered settled on the basis of the decision made, and shall not be eligible for further appeal.5(Emphasis ours.)Petitioner submits that since the grievance machinery was established for both labor and management as a vehicle to thresh out whatever problems may arise in the course of their relationship, every employee is duty bound to present the matter before management and give the latter an opportunity to impose whatever corrective measure is possible. Under normal circumstances, an employee should not preempt the resolution of his grievance; rather, he has the duty to observe thestatus quo.6Citing Section 1, Article IV of the CBA, petitioner further argues that respondent employees have the obligation, just as management has, to settle all labor disputes through friendly negotiations. Thus, Section 2 of the CBA should not be narrowly interpreted.7Before the prescriptive period of five days begins to run, two concurrent requirements must be met,i.e.,presentmentof the grievance and itsdiscussionbetween the shop steward and the division head who in this case is Mr. Abad. Section 2 is not self-executing; the mere filing of the grievance does not trigger the tolling of the prescriptive period.8Petitioner has sorely missed the point.It is a fact that the sympathy of the Court is on the side of the laboring classes, not only because the Constitution imposes such sympathy, but because of the one-sided relation between labor and capital.9The constitutional mandate for the promotion of labor is as explicit as it is demanding. The purpose is to place the workingman on an equal plane with management with all its power and influence in negotiating for the advancement of his interests and the defense of his rights.10Under the policy of social justice, the law bends over backward to accommodate the interests of the working class on the humane justification that those with less privileges in life should have more privileges in law.11It is clear that the grievance was filed with Mr. Abad's secretary during his absence.12Under Section 2 of the CBA aforequoted, the division head shall act on the grievance within five (5) days from the date of presentation thereof, otherwise "the grievance must be resolved in favor of the aggrieved party." It is not disputed that the grievants knew that division head Reynaldo Abad was then "on leave" when they filed their grievance which was received by Abad's secretary.13This knowledge, however, should not prevent the application of the CBA.On this score, respondent NLRC aptly ruled:. . . Based on the facts heretofore narrated, division head Reynaldo Abad had to act on the grievance of complainants within five days from 21 November 1984. Therefore, when Reynaldo Abad, failed to act within the reglementary period, complainants, believing in good faith that the effect of the CBA had already set in, cannot be blamed if they did not conduct ramp inventory for the days thereafter. In this regard, respondent PAL argued that Reynaldo Abad was on leave at the time the grievance was presented. This, however, is of no moment, for it is hard to believe that everything under Abad's authority would have to stand still during his absence from office. To be sure, it is to be expected that someone has to be left to attend to Abad's duties. Of course, this may be a product of inadvertence on the part of PAL management, but certainly, complainants should not be made to suffer the consequences.14Contrary to petitioner's submission,15the grievance of employees is not a matter which requires the personal act of Mr. Abad and thus could not be delegated. Petitioner could at least have assigned an officer-in-charge to look into the grievance and possibly make his recommendation to Mr. Abad. It is of no moment that Mr. Abad immediately looked into the grievance upon returning to work, for it must be remembered that the grievants are workingmen who suffered salary deductions and who rely so much on their meager income for their daily subsistence and survival. Besides, it is noteworthy that when these employees first presented their complaint on August 21, 1984, petitioner failed to act on it. It was only after a formal grievance was filed and after Mr. Abad returned to work on December 7, 1984 that petitioner decided to turn an ear to their plaints.As respondent NLRC has pointed out, Abad's failure to act on the matter may have been due to petitioner's inadvertence,16but it is clearly too much of an injustice if the employees be made to bear the dire effects thereof. Much as the latter were willing to discuss their grievance with their employer, the latter closed the door to this possibility by not assigning someone else to look into the matter during Abad's absence. Thus, private respondents should not be faulted for believing that the effects of the CBA in their favor had already stepped into the controversy.If the Court were to follow petitioner's line of reasoning, it would be easy for management to delay the resolution of labor problems, the complaints of the workers in particular, and hide under the cloak of its officers being "on leave" to avoid being caught by the 5-day deadline under the CBA. If this should be allowed, the workingmen will suffer great injustice for they will necessarily be at the mercy of their employer. That could not have been the intendment of the pertinent provision of the CBA, much less the benevolent policy underlying our labor laws.ACCORDINGLY, on the foregoing premises, the instant petition is hereby DENIED and the assailed decision of respondent National Labor Relations Commission is AFFIRMED. This judgment is immediately executory.SO ORDERED.Narvasa, C.J., Feliciano, Nocon and Campos, Jr., JJ., concur.Republic of the PhilippinesSUPREME COURTManilaEN BANCG.R. No. L-13778 April 29, 1960PHILIPPINE EDUCATION CO., INC.,petitioner,vs.UNION OF PHILIPPINE EDUCATION EMPLOYEES (NLU) and THE COURT OF INDUSTRIAL RELATIONS,respondents.Marcial Esposo for petitioner.Eulogio R. Lerum for respondent Union.Jose B. Bolisay for respondent CIR.MONTEMAYOR,J.:The Philippine Education Company, Inc. is appealing the order of the Court of Industrial Relations, dated February 7, 1958, directing it to reinstate its former employee, Ernesto Carpio, to his former or equivalent position, without backpay, and from the resolution of the same courtin banc, dated March 22, 1958, denying the company's motion for reconsideration.Ernesto Carpio and other employees of the company, members of the Union of Philippine Education Employees (NLU) joined a strike staged on January 16, 1953. After the labor dispute was settled, the Industrial Court ordered the reinstatement of the strikers, including Carpio. The company, however, opposed the reinstatement of Carpio for the reason that a criminal complaint had been filed against him in the Municipal Court of Manila for theft of magazines allegedly belonging to the company. He was convicted and sentenced to two months and one day ofarresto mayor. On appeal to the Court of First Instance, Carpio was acquitted on the ground of reasonable doubt.The question of Carpio's reinstatement was heard by the Industrial Court where the parties submitted as evidence the transcript of the stenographic notes taken during the hearing in the criminal case before the Court of First Instance of Manila, the exhibits presented in said case, as well as the decisions of the Municipal Court convicting him, and that of the Court of First Instance acquitting him, or rather dismissing the case against him on reasonable doubt. After said hearing, the Industrial Court agreed with the finding of the Court of First Instance that the offense had not been proven beyond reasonable doubt and held that Carpio's acquittal entitled him to reinstatement, though without backpay.We have examined the aforementioned evidence, and we are inclined to agree with the Municipal Court that Carpio's guilt had been duly established. At least, the preponderance of evidence was against his innocence. The question for determination is whether the whether the acquittal of an employee, specially on the ground of reasonable doubt, in a criminal case for theft involving articles and merchandise belonging to his employer, entitles said employee to reinstatement.In the case of National Labor Organization of Employees and Laborers vs. Court of Industrial Relations, 95 Phil., 727; Off. Gaz. (9) 4219, we said:. . . the acquittal of a employee in a criminal case is no bar to the Court of Industrial Relations, after proper hearing, finding the same employee guilty of facts inimical to the interests of his employer and justifying loss of confidence in him by said employer, thereby warranting his dismissal or the refusal of the Company to reinstate him. The reason for this is not difficult to see. The evidence required by law to establish guilt and to warrant conviction in a criminal case substantially differs from the evidence necessary to establish responsibility or liability in a civil or non-criminal case. The difference is in the amount and weight of evidence and also in degree. In a criminal case, the evidence or proof must be beyond reasonable doubt while in a civil or non criminal case it is merely preponderance of evidence. In further support of this principle we may refer to Art. 29 of the New Civil Code (Rep. Act 386) which provides that when the accused in a criminal case is acquitted on the ground of reasonable doubt a civil action for damages for the same act or omission may be instituted where only a preponderance of evidence is necessary to establish liability. From all this it is clear that the Court of Industrial Relations was justified in denying the petition of Rivas and Tolentino for reinstatement in the cement company, because of their illegal possession of hand grenades intended by them for purposes of sabotage in connection with the strike on March 16, 1952.Then in the case of National Labor Union vs. Standard Vacuum Oil Company, 73 Phil., 279, the City Fiscal refused to prosecute two employees charged with theft for lack of evidence and yet this Tribunal upheld their dismissal from the employer company on the ground that their employer had ample reason to distrust them.The relation of employer and employee, specially where the employee has access to the employer's property in the form of articles and merchandise for sale, necessarily involves trust and confidence. If said merchandise are lost and said loss is reasonably attributed to said employee, and he is charged with theft, even if he is acquitted of the charge on reasonable doubt, when the employer has lost its confidence in him, it would be highly unfair to require said employer to continue employing him or to reinstate him, for in that case the former might find it necessary for its protection to employ another person to watch and keep an eye on him. In the present case, Carpio was refused reinstatement not because of any union affiliation or activity or because the company has been guilty of any unfair labor practice. As already stated, Carpio was convicted in the Municipal Court and although he was acquitted on reasonable doubt in the Court of First Instance, the company had ample reason to distrust him. Under the circumstances, we cannot in conscience require the company to reemploy or reinstate him.In view of the foregoing, the appealed orders of the Industrial Court of February 7, 1958 and March 22, 1958 are hereby reversed. No costs.Paras, C.J., Bengzon, Bautista Angelo, Labrador, Barrera, and Gutierrez David, JJ.,concur.Republic of the PhilippinesSUPREME COURTManilaFIRST DIVISIONG.R. No. 78090 July 26, 1991PACIFIC MILLS, INC.,petitioner,vs.ZENAIDA ALONZO,respondent.Napoleon L. Apostol for petitioner.NARVASA,J.:pFrom July 30, 1973, Zenaida Alonzo was employed as a ring frame operator in the Pacific Mills, Inc. until September 30, 1982 when she was discharged by Management.The record shows that in the early afternoon of September 22, 1982, Zenaida challenged Company Inspector Ernesto Tamondong to a fight, saying: "Putang Ina mo, lumabas ka, tarantado, kalalaki mong tao, duwag ka . . Ipagugulpi kita sa labas at kaya kitang ipakaladkad dito sa loob ng compound palabas ng gate sa mga kamag-anak ko." And suiting action to the word, she thereupon boxed Tamondong in the stomach. The motive for the assault was Zenaida's resentment at having been reprimanded, together with other employees, two days earlier by Tamondong for wasting time by engaging in Idle chatter.1Tamondong forthwith reported the incident to the firm's Administrative Manager2as well as the Chairman of Barangay Balombato, Quezon City.3On September 30, 1982, Zenaida Alonzo was given a Memorandum by the company's Executive Vice President & General Manager terminating her employment as of October 1, 1982 on various grounds: poor work, habitual absences and tardiness, wasting time, insubordination and gross disrespect. The service of that memorandum of dismissal on her was not preceded by any complaint, hearing or other formality. These were apparently considered unnecessary by Management4in view of the provision in the Company Rules and Regulations (embodied in the Collective Bargaining Agreement between the company and the union representing the employees) that:Fighting or attempting to inflict harm to another employee, will render (sic) the aggressor to outright dismissal.It was only at the hearing of the complaint for illegal dismissal (and non-payment of proportionate 13th month pay) instituted by Zenaida on October 4, 1982 in the NCR Arbitration Branch, that evidence was presented by the company not only of the assault by Zenaida on her superior but also of many other violations by her of company rules and regulations, in an attempt to substantiate the validity of her dismissal from work.The Labor Arbiter found that Alonzo had indeed verbally abused and struck her superior, Tamondong, and rejected her contention that the assault was not punishable since it was "not work-connected and was provoked/instigated by Ernesto Tamondong."5The Arbiter also declared as "fully established the previous infractions of complainant," these being "a matter of record and not denied by complainant (Zenaida)."The Arbiter was of the view, however, that Alonzo was entitled to relief, because (a) the penalty imposed was "harsh and severe and not commensurate with the offense, . . . suspension of three (3) months . . (being) the proper, just and reasonable penalty . . .;" and because (b) the company had failed "to investigate complainant before she was dismissed." The Arbiter thus ordered Pacific Mills, Inc., Zenaida's employer:. . . to reinstate complainant without loss of seniority rights and to pay her backwages from January 1, 1983 until fully reinstated, the period from October 1, 1982 to December 31, 1982 complainant being under suspension without pay . . . (as well as) to pay complainant's 13th month pay in the amount of THREE HUNDRED FIFTY-ONE PESOS ONLY (P351.00).Acting on the employer's appeal, the National Labor Relations Commission rendered judgment on March 23, 1987, sustaining the Labor Arbiter's findings. It however limited the award of back wages to Zenaida only to three (3) years, in accordance with this Court's judgment inFeati University Faculty Club (PAFLU) vs.Feati University,58 SCRA 396.6Pacific Mills Inc. has instituted in this Court the special civil action ofcertiorariat bar praying for nullification of the judgment of the NLRC for having been rendered with grave abuse of discretion.In the comment thereon,7required of him by the Court, the Solicitor General opined that:. . . both the Labor Arbiter and the NLRC apparently failed to take into consideration the fact that Zenaida Alonzo was dismissed not because of this isolated act (of assault against her superior) but rather because of numerous and repeated violations of company rules and regulations. It was only this last incident which compelled Pacific Mills, Inc. to finally terminate her services. It is the totality of the infractions committed by the employee which should have been considered in determining whether or not there is just cause for her dismissal.Zenaida Alonzo was caught several times leaving her place of work to chat with her co-employees. This is reprehensible conduct since, as ring frame operator, she must be at her post during work hours to prevent the occurrence of incidents which could damage the machine. The company inspector precisely warned her against doing this. She had also been repeatedly reprimanded for insubordination, habitual tardiness, wasting time and not wearing the required company uniform, In spite of these infractions the company bore with her services and did not see fit to dismiss her. Her assault on the company inspector was apparently the last straw which compelled Pacific Mills, Inc. to terminate her services.Accordingly, the Solicitor General recommended "payment of separation pay equivalent to three (3) years backwages but without reinstatement" and of "proportionate 13th month pay."For their part, the Chief Legal Officer of the NLRC,8and the private respondent,9insist that since the dismissal of Zenaida Alonzo was not preceded by any notice of the charges and a hearing thereon, the judgment of the NLRC must be sustained.Decisive of this controversy is the judgment of the Courten bancinWenphil Corporation v.NLRC, promulgated on February 8, 1989,10in which the following policy pronouncements were made:The Court holds that the policy of ordering the reinstatement to the service of an employee without loss of seniority and the payment of his wages during the period of his separation until his actual reinstatement but not exceeding three (3) years without qualification or deduction, when it appears he was not afforded due process, although his dismissal was found to be for just and authorized cause in an appropriate proceeding in the Ministry of Labor and Employment, should be re-examined. It will be highly prejudicial to the interests of the employer to impose on him the services of an employee who has been shown to be guilty of the charges that warranted his dismissal from employment. Indeed, it will demoralize the rank and file if the undeserving, if not undesirable, remains in the service.Thus in the present case, where the private respondent, who appears to be of violent temper, caused trouble during office hours and even defied his superiors as they tried to pacify him, should not be rewarded with reemployment and back wages. It may encourage him to do even worse and will render a mockery of the rules of discipline that employees are required to observe. Under the circumstances, the dismissal of the private respondent for just cause should be maintained. He has no right to return to his former employer.However, the petitioner (employer) must nevertheless be held to account for failure to extend to private respondent his right to an investigation before causing his dismissal. The rule is explicit as above discussed. The dismissal of an employee must be for just or authorized cause and after due process (Section 1, Rule XIV, Implementing Regulations of the Labor Code). Petitioner committed an infraction of the second requirement. Thus, it must be imposed a sanction for its failure to give a formal notice and conduct an investigation as required by law before dismissing . . . (respondent) from employment. Considering the circumstances of this case petitioner must indemnify the private respondent the amount of P1,000.00. The measure of tills award depends on the facts of each case and the gravity of the omission committed by the employer.The Court perceives no sufficient cause, it has indeed been cited to none by the respondents, to decline to apply theWenphildoctrine to the case at bar.While it is true that Pacific Mills, Inc. had not complied with the requirements of due process prior to removing Zenaida Alonzo from employment, it is also true that subsequently, in the proceedings before the Labor Arbiter in which Zenaida Alonzo had of course taken active part, it had succeeded in satisfactorily proving the commission by Zenaida of many violations of company rules and regulations justifying termination of her employment. Under the circumstances, it is clear that, as the Solicitor General has pointed out, the continuance in the service of the latter is patently inimical to her employer's interests and that,citingSan Miguel Corporation v.NLRC,11the law, in protecting the rights of the laborer authorizes neither oppression nor self-destruction of the employer. And it was oppressive and unjust in the premises to require reinstatement of the employee.WHEREFORE, the petition is granted and the challenged decision of the respondent Commission dated March 23, 1987 and that of the Labor Arbiter thereby affirmed, are NULLIFIED AND SET ASIDE. However, the petitioner is ordered to pay private respondent a proportionate part of the 13th month pay due her, amounting to P351.00 as well as to indemnify her in the sum of P1,000.00. No costs.SO ORDERED.Cruz, Gancayco, Grio-Aquino and Medialdea, JJ., concur.THIRD DIVISION[G.R. No. 120506.October 28, 1996]PHILIPPINE AIRLINES, INC.petitioner, vs.NATIONAL LABOR RELATIONS COMMISSION, HON. LABOR ARBITER CORNELIO LINSANGAN, UNICORN SECURITY SERVICES, INC., and FRED BAUTISTA,et al., respondents.D E C I S I O NDAVIDE, JR.,J.:This is a petition forcertiorariunder Rule 65 of the Rules of Court to annul the decision of the Labor Arbiter dated 12 August 1991 in NLRC Case No. 00-11-06008-90 and the resolutions of public respondent National Labor Relations Commission (NLRC) promulgated on 27 October 1994 and 31 May 1995 dismissing the appeal filed by the petitioner and denying the motion for reconsideration, respectively.The dispute arose from these antecedents:On23 December 1987, private respondent Unicorn Security Services, Inc. (USSI) and petitioner Philippine Airlines, Inc. (PAL) executed a security service agreement.[1]USSI was designated therein as the CONTRACTOR.Among the pertinent terms and conditions of the agreement are as follows:(4)The CONTRACTOR shall assign to PAL an initial force ofEIGHTY ONE (81)bodies which may be decreased or increased by agreement in writing .It is, of course, understood that the CONTRACTOR undertakes to pay the wages or salaries and cost of living allowance of the guards in accordance with the provisions of the Labor Code, as amended, the different Presidential Decrees, Orders and with the rules and regulations promulgated by competent authorities implementing said acts, assuming all responsibilities therefor .x x x(6)Without any expense on the part of PAL, CONTRACTOR shall see to it that the guards assigned to PAL are provided, at the expense of CONTRACTOR, with the necessary firearms, ammunitions and facilities needed for the rendition of the security services as aforesaid;(7)CONTRACTOR shall select, engage and discharge the guards, employees, or agents, and shall otherwise direct and control their services herein provided or heretofore to be set forth or prescribed.The determination of wages, salaries and compensation of the guards or employees of the CONTRACTOR shall be within its full control but shall in no way contravene existing laws on the matter.It is further understood that CONTRACTOR as the employer of the security guards agrees to comply with all relevant laws and regulations, including compulsory coverage under the Social Security Act, Labor Code, as amended and the Medical Care Act, in its operations.Although it is understood and agreed between parties hereto that CONTRACTOR in the performance of its obligations under this Agreement, is subject to the control and direction of PAL merely as to the result as to be accomplished by the work or services herein specified, and not as to the means and methods for accomplishing such result, CONTRACTOR hereby warrants that it will perform such work or services in such manner as will achieve the result herein desired by PAL.(8)Discipline and administration of the security guards shall be the sole responsibility of the CONTRACTOR to the end that CONTRACTOR shall be able to render the desired security service requirements of PAL.CONTRACTOR, therefore, shall conform to such rules and regulations that may be issued by PAL.For this purpose, Annex A, which forms part of this Agreement, contains such rules and regulations and CONTRACTOR is expected to comply with them.At its discretion,PALmay, however, work out with CONTRACTOR such rules and regulations before their implementation.(9)Should PAL at any time have any justifiable objection to the presence in its premises of any of CONTRACTORs officer, guard or agent under this Agreement, it shall send such objection in writing to CONTRACTOR and the latter shall immediately take proper action.(10)The security guards employed by CONTRACTOR in performing this Agreement shall be paid by the CONTRACTOR and it is distinctly understood that there is no employee-employer relationship between CONTRACTOR and/or his guards on the one hand, and PAL on the other.CONTRACTOR shall have entire charge, control and supervision of the work and services herein agreed upon, and PAL shall in no manner be answerable or accountable for any accident or injury of any kind which may occur to any guard or guards of the CONTRACTOR in the course of, or as a consequence of, their performance of work and services under this Agreement, or for any injury, loss or damage arising from the negligence of or carelessness of the guards of the CONTRACTOR or of anyone of its employ to any person or persons or to its or their property whether in the premises of PAL or elsewhere; and the CONTRACTOR hereby covenants and agrees to assume, as it does hereby assume, any and all liability or on account of any such injury, loss or damage, and shall indemnify PAL for any liability or expense it may incur by reason thereof and to hold PAL free and harmless from any such liability.x x x(13)For and in consideration of the services to be rendered by CONTRACTOR under these presents, PAL shall pay CONTRACTOR the amount of PESOSNINE & 40/100 CTVS (P9.40) PER HOUR multiplied by 905 hours equivalent to PESOS TWO HUNDRED SEVENTY FIVE THOUSAND NINE HUNDRED NINE & 58/100 CTVS,Philippine currency, - (P275,909.58) the basis of eight (8) working hours per office/guard a day, Sundays and Holidays included, the same to be payable on or before the 15thof each month for services on the first half of the month and on or before the end of the month for services for the 2ndhalf of the month.Nothing herein contained shall prevent the parties from meeting for a review of the rates should circumstances warrant.x x x(20)This Agreement shall take effect on06 December 1987and shall be in force for a period ofSIX (6) MONTHS 05 JUNE 1988thereafter it shall continue indefinitely unless sooner terminated upon thirty (30) days notice served upon by one party to the other, except as provided for in Articles 16, 17 & 18 hereof.Sometime in August of 1988, PAL requested 16 additional security guards.USSI provided what was requested; however, PAL insisted that what USSI did was merely to pick out 16 guards from the 86 already assigned by it and directed them to render overtime duty.On16 February 1990, PAL terminated the security service agreement with USSI without giving the latter the 30-day prior notice required in paragraph 20 thereof.Instead, PAL paid each of the security guards actually assigned at the time of the termination of the agreement an amount equivalent to their one-month salary to compensate for the lack of notice.In November 1990, USSI, allegedly in its capacity as Trustee for Sixteen or so Security Guards, filed with the NLRC Arbitration Branch, National Capital Region, a complaint[2]against PAL for the recovery ofP75,600.00 representing termination pay benefit due the alleged 16 additional security guards, which PAL failed and refused to pay despite demands.It further asked for an award of not less thanP15,000.00 for each of the 16 guards as damages for the delay in the performance of PALs obligation, and also for attorneys fees in an amount equivalent to 10% of whatever might be recovered.Pertinent portions of the complaint read as follows:3.By virtue of said contract and upon its effectivity, respondent required eighty-six (86) security guards whom complainant USSI supplied; on or sometime in August 1989, respondent asked for sixteen (16) security guards to render twelve (12) hours each.4.In February 1990 and for reasons of its own, respondent caused to terminate not only the contract but also the services of the security guards; in effecting such termination, said respondent caused to pay the equivalent of one (1) months notice unto all the security guards, except the 16 who, as aforementioned were rendering 12 hours each from date of assignment up to and until their termination.5.As computed, the termination pay benefits due the 16 security guards amount toP75,600.00, more or less, which, despite demands, respondent fails, neglects or refuses to pay, as it continue refusing, failing or neglecting to so do up to the present time.6.Respondent has not only incurred in delay in the performance of its obligation but also contravened the tenor thereof; hence, complainants are, by law, entitled to be indemnified with damages for no less thanP15,000.00 each for all complainants though the correct amount is left solely to the sound discretion of the Honorable Labor Arbiter.7.Complainants are now compelled to litigate their plainly valid, just or demandable claim on account of which services of counsel have been required and thereby obligated themselves to pay, for and as attorneys fees, the sum equivalent to ten percent (10%) of whatever sums or sum may be recovered in the case.The complaint was docketed as NLRC-NCR Case No. 00-11-06008-90 and assigned to Labor Arbiter Cornelio L. Linsangan.PAL filed a motion to dismiss the complaint[3]on the grounds that the Labor Arbiter had no jurisdiction over the subject matter or nature of the complaint and that USSI had no cause of action against PAL.In amplification thereof, PAL argued that the case involved the interpretation of the security service agreement, which is purely civil in character and falls outside of the Labor Arbiters jurisdiction.It is clear from Article 217 of the Labor Code that for claims to be within the jurisdiction of Labor Arbiters, they must arise from an employer-employee relationship.PAL claimed that USSI did not allege the existence of an employer-employee relationship between PAL and USSI or its guards, and that in fact, paragraph 10 of the agreement provides that there is no employer-employee relationship between the CONTRACTOR and/or his guards on the one hand and PAL on the other.In its Opposition,[4]USSI pointed out that PAL forgot or overlooked the fact that insofar as labor standards, benefits, etc. have to be resolved or adjudicated, liability therefor is shifted to, or assumed by respondent [herein petitioners] which, in law, has been constituted as anindirect employer.PAL filed a supplemental motion to dismiss[5]wherein it cites the following reasons for the dismissal of the complaint: (1) the clear stipulations in the agreement (paragraphs 4 and 10) that there exists no employer-employee relationship between PAL on the one hand and USSI and the guards on the other; (2) there were no 16 additional guards, as the 16 guards who were required to render 12-hour shifts were picked out from the original 86 guards already assigned and were already given a one-month salary in lieu of the 30-day notice of termination of the agreement; (3) USSI had no legal personality to file the case as alleged trustee of the 16 security guards; and (4) the real parties in interest -- the 16 security guards -- never showed any interest in the case either by attending any hearing or conference, or by following up the status of the case.Attached to the supplemental motion dismiss were, among other things, xerox copies of confirmation letter of USSI to PAL to show that no additional guards were in fact provided.[6]Labor Arbiter Linsangan did not resolve the motion to dismiss and the supplemental motion to dismiss.On 12 August 1991, he handed down a decision[7]ordering PAL to pay: (1) the sum ofP75,600.00 representing the equivalent of one-months separation pay due the 16 individual security guards, plus, 10% interest from the date of filing of the case until the whole obligations shall have been fully settled; (2) the sum ofP5,000.00 by way of exemplary damages due each of the 16 security guards; and (3) another sum equivalent to 10% of the total award for and as attorneys fees.It was in that decision that Labor Arbiter Linsangan mentioned for the first time that the resolution of the motion to dismiss and supplemental motion to dismiss was deferred until [the] case is decided on the merits considering the ground not to be indubitable.In holding that he had jurisdiction over the case, he stated:As heretofore and invariably held in similar cases, the issue of whether or not Labor Arbiters have jurisdiction over money claims affecting security guards assigned by security agencies (like complainant herein) to their client-companies such as PAL is, more or less, settled, especially since, as the law views such as peculiar relationship, such money claims insofar as they have to be paid, are the ultimate responsibility of the client-firms.In effect, the security guards have been constituted asindirectemployees of the client just as the client becomes theindirectemployer of the guards.Art. 107 and 109 of the Labor Code expressly provide that.To justify the awards, Labor Arbiter Linsangan opined:Evidence adduced clearly show that sometime in December 1987, aforementioned security service contract was executed, based on which the required number of security guards were assigned to, or posted at, the various premises of respondent -- PAL.Said number of security guards may, as the contract provides, be increased or reduced at respondents request, such that the original number of eighty-six (86) guards, an additional sixteen (16) were needed and, accordingly supplied who, pursuant to PALs instructions, were required to render twelve (12) hours each, per day.In February 1990, and for reasons of its own, PAL caused to terminate, as it did, the contract of security service.Unequivocably, it caused to pay the separation pay benefits of the 86-security guards for the equivalent amount of one (1) months pay.As to the additional 16, it failed and refused to grant similar equivalent, without any valid reasons therefor.As earlier stated, respondent opted to rely solely on the ground set forth in its Motion to Dismiss as well as Supplement thereto.It failed to file, despite directive made thereon, its position paper.Neither did it submit, nor adduce, evidence (documentary or otherwise) to rebut or controvert complainants claims especially since the money equivalent of the one month separation pay due the 16 guards has been duly quantified as amounting to Seventy Five Thousand Six Hundred (P75,600.00) Pesos.Thus established, it is clear that there was absolutely no legal/justifiable reason why said 16 guards applied and who rendered 12 hours each per day had to be discriminated against.Following PALs failure or refusal to pay, demands were made by complainant, asking at the same time why that was so.Conceivably, respondent has smarted itself on its mistaken belief that there was, as between the guards and itself, no employer-employee relationship and, hence, there is no legal basis for it to pay.If that was so, why did it pay separation pay unto the 86 regular employed guards.PAL being widely known as a progressively-minded employer, it should be the first to show good example for emulation.In this instant case, it did not; in fact, its actuations were not consistent with good faith.It should, therefore, be held liable for exemplary damages and having required complainant to litigate a plainly valid, just or demandable claim, an award for attorneys fees must perforce be assessed.On 3 September 1991, PAL filed its Appeal[8]wherein it indicated that it received a copy of the decision on 26 August 1991.Attached thereto was a machine copy of the Notice of Judgment/Final Order, with the date of its receipt, i.e.,26 August 1991,[9]having been stamped on the upper right hand corner by PALs Legal Department.USSI countered this Appeal with a motion for execution of judgment[10]on the ground that since PAL, received a copy of the decision on the 23rd, not on the 26th, of August 1991 it had until 2 September 1991 to appeal; hence, the appeal interposed on 3 September was late by one day.The decision had then become final and executory.In its opposition[11]to this motion, PAL insisted that it received a copy of the decision on 26 August 1991; thus, it had until 5 September 1991 to file its appeal.On 30 September 1991, Labor Arbiter Linsangan issued a writ of execution.[12]On 1 October 1991, PAL filed a motion to quash[13]the writ of execution.It tried to explain therein why it thought allalong that it received a copy of the decision on 26 August 1991, thus:4.Upon investigation the undersigned counsel learned that on 23 August 1991 (Friday) a server-messenger went to PAL Legal Department to serve said decision.The receiving clerks at that time were all out of the office so that the server persuaded a secretary, Ms. April Rose del Rosario to receive the same, notwithstanding the fact that Ms. Del Rosario told him (server) that she was not authorized to receive documents for an in behalf of PAL.Ms. Del Rosario then stamped the date of receipt on the services copy without stamping (the date of receipt) PALs copy of the decision which was left by the server.Thereafter, Ms. Del Rosario placed PALs copy of the Decision on the incoming documents rack of the receiving clerk.Attached herewith is the affidavit of Ms. Del Rosario and as Annex A hereof.5.On 26 August 1991 (Monday), the receiving clerk/messenger Mr. Greg Soriano upon finding the Decision among the documents in the incoming documents rack, immediately stamped Received 26 August 1991 thereon, on the honest and sincere belief that the same just arrived that day (26 August 1991).He then forwarded the same to the secretary of the undersigned counsel.Attached herewith is the affidavit of Mr. Greg Soriano marked as Annex B hereof.6.The undersigned counsel believing that the said decision was received on 26 August 1991 reckoned/counted the ten (10) day period for appeal from said date.7.Considering the foregoing circumstances, the undersigned counsels innocent reliance on the date of receipt stamped on the copy of the Decision furnished him was clearly due to an innocent mistake and/or excusable neglect.Hence, justice and equity dictates that respondent PAL should be considered to have filed its Appeal within the reglementary period for Appeal.[14]On 8 October 1991, Labor Arbiter Linsangan issued an order[15]denying the motion to quash.On 10 October 1991, PAL appealed[16]to the NLRC the aforesaid order of 8 October 1991 on the ground that it was issued with grave abuse of discretion.In its resolution of 27 October 1994,[17]the Second Division of the NLRC dismissed PALs appeal for having been filed out if time.It sustained the labor Arbiters finding that PAL had received a copy of the decision on 23 August 1991, and hence the last day to appeal was 2 September 1991.It ruled that whether or not the decision was received by an employee other than the receiving clerk or messenger was of no moment, as the proper performance of employees duties was PALs concern.On 31 May 1995, the NLRC denied the motion for reconsideration[18]for the reason that it cannot accept PALs excuse as it may open the floodgates to abuse; and that the lapse of the period to appeal had already deprived the Commission of jurisdiction over the case.[19]PAL then filed this special civil action forcertiorariunder Rule 65 of the Rules of Court alleging that (1) public respondents committed serious and patent error in failing to declare that the Labor Arbiter had no jurisdiction over the instant case; (2) The Labor Arbiter gravely abused its discretion in ordering PAL to pay the separation pay of the 16 security guards assigned at PALs premises by USSI; and (3) respondent NLRC committed grave abuse of discretion in declaring PALs appeal to have been filed out of time.PAL argues that since USSIs cause of action was founded on the security service agreement, and that thereunder no employer-employee relationship existed between PAL and the security guards who were USSIs employees, the Labor Arbiter had no jurisdiction over the complaint.Moreover, assumingarguendothat the claims of the security guards were valid, USSI had no personality to file the complaint, for there is nothing whatsoever to show that it was expressly authorized by the security guards to act as their trustee.As to the second assigned error, PAL asserts that it is not liable to pay separation pay because (1) it was not the employer of the security guards; (2) even as an indirect employer, as held by the Labor Arbiter, its liability was limited to violations of labor standards law, and non-payment of the separation pay is not a violation of the said law; (3) the security service agreement with USSI did not provide for payment of separation pay; (4) the payment made to the 86 security guards upon the termination of the agreement without the prior 30-day notice was not for separation pay but a benefit in lieu of the 30-day notice required under paragraph 20 of the agreement; and (5) since PAL was not the employer of the security guards, in no way could it terminate their services.In its third assigned error, PAL submits that rules of procedure ought not to be applied in a very rigid technical sense, since they are used only to help secure and not override substantial justice, especially in this case where the appeal was meritorious.Moreover, the delay in the perfection of the appeal, reckoned from the finding of the Labor Arbiter, was only one day; but if reckoned from what its counsel innocently believed to be PALs date of receipt of the decision, which was 26 August 1991, the appeal could be said to have been seasonably filed.In its Comment, USSI points out that the grounds relied upon by PAL are based on factual a issue, namely, the discrimination made by PAL in paying the 86 and not the 16 security guards.It argues that the case touched upon the rights of the 16 security guards as employees; thus, the same was within the jurisdiction of the Labor Arbiter.As regards PALs plea for the relaxation of the rule on perfection of appeals, USSI contends that the negligence of PALs counsel should not be deemed compelling reason to warrant relaxation of the rule.In its Manifestation and Motion in Lieu of Comment,[20]the Office of the Solicitor General agrees with PAL that the Labor Arbiter did not have jurisdiction over the complaint because there was no employer-employee relationship between PAL and the 16 security guards; that Articles 107 and 109 of the Labor Code which provide for joint and several liability for payment of wages by the direct and indirect employer find no application in the present case because the 16 security guards employed by USSI were not after unpaid wages; and that in the interest of justice and considering that the appeal was filed only one day late, the rule on perfection of appeals should have been relaxed to prevent a miscarriage of justice.In view of the stand of the Office of the Solicitor General, we advised public respondents to file their own comment if they so desired.In their Comment, the NLRC and Labor Arbiter Linsangan maintain that they had jurisdiction over the case because of Articles 107 and 109 of the Labor Code which constitute PAL as indirect employer of the 16 security guards, there being a question involving separation pay due the latter; that the 16 security guards were entitled to separation pay, because PAL paid the other 86 security guards when the service agreement was terminated; and that for the NLRC to excuse the delay of one day in filing the appeal would open the floodgates of abuse.The instant petition is impressed with merit.We agree with petitioner PAL that the Labor Arbiter was without jurisdiction over the subject matter of NLRC-NCR Case No. 00-11-06008-90, because no employer-employee relationship existed between PAL and the security guards provided by USSI under the security service agreement, including the alleged 16 additional security guards.We have pronounced in numerous cases[21]that in determining the existence of an employer-employee relationship, the following elements are generally considered: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power to dismiss; and (4) the power to control the employees conduct.In the instant case, the security service agreement between PAL and USSI provides the key to such consideration.A careful perusal thereof, especially the terms and conditions embodied in paragraphs 4, 6, 7, 8, 9, 10, 13 and 20 quoted earlier in thisponencia, demonstrates beyond doubt that USSI-and not PAL was the employer of the security guards.It was USSI which (a) selected, engaged or hired and discharged the security guards; (b) assigned them to PAL according to the number agreed upon; (c) provided, at its own expense, the security guards with firearms and ammunitions; (d) discipline and supervised them or controlled their conduct; and (e) determined their wages, salaries, and compensation; and (f) paid them salaries or wages.Even if we disregard the explicit covenant in said agreement that there exist no employer-employee relationship between CONTRACTOR and/or his guards on the one hand, and PAL on the other all other considerations confirm the fact that PAL was not the security guards employer.Analogous to the instant case isCanlubang Security Agency Corp. vs. NLRC.[22]Considering then that no employer-employee relationship existed between PAL and the security guards, the Labor Arbiter had no jurisdiction over the claim in NLRC-NCR Case No. 00-11-06008-90.Article 217 of the Labor Code (P.D. No. 442), as amended, vests upon Labor Arbiter exclusive original jurisdiction only over the following:1.Unfair labor practice cases;2.Termination disputes;3. If accompanied with a claim for reinstatement, those cases that workers may file involving wages, rates of pay, hours of work and other terms and conditions of employment;4. Claims for actual, moral, exemplary and other forms of damages arising from employer-employee relations;5. Cases arising from any violation of Article 264 of this Code, including questions involving legality of strikes and lockouts; and6. Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other claims, arising from employer-employee relations, including those of persons in domestic or house hold service, involving an amount exceeding five thousand pesos(P5,000.00) regardless of whether accompanied with a claim for reinstatement.In all these cases, an employer-employee relationship is an indispensable jurisdictional requisite.The Labor Arbiter cannot avoid the jurisdictional issue or justify his assumption of jurisdiction on the pretext that PAL was theindirect employerof the security guards under Article 107 in relation to Articles 106 and 109 of the Labor Code and, therefore, it is solidarily liable with USSI.We agree with the Solicitor General that these Articles are inapplicable to PAL under the facts of this case.Article 107 provides:ART. 107.Indirect employer.--The provisions of the immediately preceding Article shall likewise apply to any person, partnership, association or corporation which, not being an employer, contracts with an independent contractor for the performance of any work, task, job or project.The preceding Article referred to, which is Article 106, partly reads as follows:ART. 106.Contractor or subcontractor.--Whenever an employer enters into a contract with another person for the performance of the formers work, the employees of the contractor and of the latters subcontractor, if any, shall be paid in accordance with the provisions of this Code.In the event that the contractor or subcontractor fails to pay thewages of his employeesin accordance with this Code, the employer shall be jointly and severally liable with his contractor or subcontractor to such employees to the extent of the work performed under the contract, in the same manner and extent that he is liable to employees directly employed by him.While USSI is an independent contractor under the security service agreement and PAL may be considered anindirectemployer, that status did not make PAL the employer of the security guards in every respect.As correctly posited by the Office of the Solicitor General, PAL may be considered anindirectemployer only for purposes of unpaid wages since Article 106, which is applicable to the situation contemplated in Section 107, speaks ofwages.The concept ofindirect employeronly relates or refers tothe liability for unpaid wages.Read together, Articles 106 and 109 simply mean that the party with whom an independent contractor deals issolidarilyliable with the latter for unpaid wages, and only to that extent and for that purpose that the latter is considered adirectemployer.The term wage is defined in Article 97(f) of the Labor Code as the remuneration of earnings, however designated, capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece, or commission basis, or other method of calculating the unwritten contract of employment for work done or to be done, or for services rendered or to be rendered and includes the fair and reasonable value, as determined by the Secretary of Labor, of board, lodging, or other facilities customarily furnished by the employer to the employee.No valid claim for wages or separation pay can arise from the security service agreement in question by reason of its termination at the instance of PAL.The agreement contains no provision for separation pay.A breach thereof could only give rise to damages under the Civil Code, which is cognizable by the appropriate regular court of justice.Besides, there is no substantial proof that USSI in fact provided 16 additional guards.On the contrary, PAL was able to prove in the annexes attached to its supplemental motion to dismiss that the 16 guards were actually picked out from the original group and were just required to render overtime service.The Labor Arbiters lack of jurisdiction was too obvious from the allegations in the complaint and its annex (the security service agreement) in NLRC-NCR Case No. 00-11-06008-90.The Labor Arbiter then should have forthwith resolved the motion to dismiss and the supplemental motion to dismiss.As correctly pointed out by PAL, under Section 15 of Rule V of the New Rules of Procedure of the NLRC, any motion to dismiss on the ground of lack of jurisdiction, improper venue,res judicata,or prescriptionshall be immediately resolved by the Labor Arbiter by a written order.Yet, the Labor Arbiter did not, and it was only in his decision that he mentioned that the resolution of the motion to dismiss was deferred until this case is decided on the merits because the ground thereof was not indubitable.On this score the Labor Arbiter acted with grave abuse of discretion for disregarding the rules he was bound to observe.We shall now turn to the issue of tardiness of the appeal.The record does indeed show that on the original copy of the Notice of Judgment/Final Order,[23]there is stamped by the PAL Legal Department the date of its receipt of the decision, viz., AUG. 23 1991,It is not also denied by respondents that on the right upper hand corner of PALs copy of the Notice of Judgment/Final Orders,[24]there is stamped the date of receipt thereof by PAL Legal Department, viz., AUG. 26 1991.PAL explained how this discrepancy occurred and how its counsel was misled into believing that PAL received a copy of the decision only on 26 August 1991.This belief in good faith rendered excusable any negligence it might have committed.Besides, the delay in the perfection of the appeal was only one day.Considering that the Labor Arbiter had no jurisdiction over the subject matter of NLRC-NCR Case No. 00-11-06008-90 and that the 16 security guards are not in fact entitled to separation pay under the security service agreement, the higher interest of justice favors a relaxation of the rule on perfection of appeals in labor cases.While it is an established rule that the perfection of an appeal in the manner and within the period prescribed by law is not only mandatory but jurisdictional, and failure to perfect an appeal has the effect of rendering the judgment final and executory, it is equally settled that the NLRC may disregard the procedural lapse where there is anacceptable reasonto excuse tardiness in the taking of the appeal.[25]Among the acceptable reasons recognized by this Court are (a) counsels reliance on the footnote of the notice of the decision of the Labor Arbiter that the aggrieved party may appeal within ten (10)workingdays;[26](b) fundamental consideration of substantial justice;[27](c) prevention of miscarriage of justice or of unjust enrichment, as where the tardy appeal is from a decision granting separation pay which was already granted in an earlier final decision;[28]and (d) special circumstances of the case combined with its legal merits[29]or the amount and the issue involved.[30]A one-day delay in the perfection of the appeal was excused in Pacific Asia Overseas Shipping Corp. vs. NLRC,[31]Insular life Assurance Co. vs. NLRC,[32]and City Fair Corp vs. NLRC.[33]In the instant case, the Labor Arbiters lack of jurisdiction -- so palpably clear on the face of the complaint -- and the perpetuation of unjust enrichment if the appeal is disallowed are enough combination of reasons that warrant a relaxation of the rules on perfection of appeals in labor cases.WHEREFORE,the instant petition is hereby GRANTED.The questioned decision of the Labor Arbiter dated 12 August 1991 and the resolution of the Second Division of the National Labor Relations Commission promulgated on 27 October 1994 and 31 May 1995 are hereby SET ASIDE, and NLRC-NCR Case No. 00-11-06008-90 is DISMISSED.SO ORDERED.Narvasa, C.J. (Chairman), Melo, FranciscoandPanganiban, JJ.,concur.Republic of the PhilippinesSUPREME COURTManilaTHIRD DIVISIONG.R. No. 78409 September 14, 1989NORBERTO SORIANO,petitioner,vs.OFFSHORE SHIPPING AND MANNING CORPORATION, KNUT KNUTSEN O.A.S., and NATIONAL LABOR RELATIONS COMMISSION (Second Division),respondents.R. C. Carrera Law Firm for petitioner.Elmer V. Pormento for private respondents.FERNAN,C.J.:This is a petition forcertiorariseeking to annul and set aside the decision of public respondent National Labor Relations Commission affirming the decision of the Philippine Overseas Employment Administration in POEA Case No. (M)85-12-0953 entitled "Norberto Soriano v. Offshore Shipping and Manning Corporation and Knut Knutsen O.A.S.", which denied petitioner's claim for salary differential and overtime pay and limited the reimbursement of his cash bond to P15,000.00 instead of P20,000.00.In search for better opportunities and higher income, petitioner Norberto Soriano, a licensed Second Marine Engineer, sought employment and was hired by private respondent Knut Knutsen O.A.S. through its authorized shipping agent in the Philippines, Offshore Shipping and Manning Corporation. As evidenced by the Crew Agreement, petitioner was hired to work as Third Marine Engineer on board Knut Provider" with a salary of US$800.00 a month on a conduction basis for a period of fifteen (15) days. He admitted that the term of the contract was extended to six (6) months by mutual agreement on the promise of the employer to the petitioner that he will be promoted to Second Engineer. Thus, while it appears that petitioner joined the aforesaid vessel on July 23, 1985 he signed off on November 27, 1985 due to the alleged failure of private respondent-employer to fulfill its promise to promote petitioner to the position of Second Engineer and for the unilateral decision to reduce petitioner's basic salary from US$800.00 to US$560.00. Petitioner was made to shoulder his return airfare to Manila.In the Philippines, petitioner filed with the Philippine Overseas Employment Administration (POEA for short), a complaint against private respondent for payment of salary differential, overtime pay, unpaid salary for November, 1985 and refund of his return airfare and cash bond allegedly in the amount of P20,000.00 contending therein that private respondent unilaterally altered the employment contract by reducing his salary of US$800.00 per month to US$560.00, causing him to request for his repatriation to the Philippines. Although repatriated, he claims that he failed to receive payment for the following:1. Salary for November which is equivalent to US$800.00;2. Leave pay equivalent to his salary for 16.5 days in the sum of US$440.00;3. Salary differentials which is equivalent to US$240.00 a month for four (4) months and one (1) week in the total sum of US$1,020,00;4. Fixed overtime pay equivalent to US$240.00 a month for four (4) months and one (1) week in the sum of US$1,020.00;5. Overtime pay for 14 Sundays equivalent to US$484.99;6. Repatriation cost of US$945.46;7. Petitioner's cash bond of P20,000.00.1In resolving aforesaid case, the Officer-in-Charge of the Philippine Overseas Employment Administration or POEA found that petitioner-complainant's total monthly emolument is US$800.00 inclusive of fixed overtime as shown and proved in the Wage Scale submitted to the Accreditation Department of its Office which would therefore not entitle petitioner to any salary differential; that the version of complainant that there was in effect contract substitution has no grain of truth because although the Employment Contract seems to have corrections on it, said corrections or alterations are in conformity with the Wage Scale duly approved by the POEA; that the withholding of a certain amount due petitioner was justified to answer for his repatriation expenses which repatriation was found to have been requested by petitioner himself as shown in the entry in his Seaman's Book; and that petitioner deposited a total amount of P15,000.00 only instead of P20,000.00 cash bond.2Accordingly, respondent POEA ruled as follows:VIEWED IN THE LIGHT OF THE FOREGOING, respondents are hereby ordered to pay complainant, jointly and severally within ten (10) days from receipt hereof the amount of P15,000.00 representing the reimbursement of the cash bond deposited by complainant less US$285.83 (to be converted to its peso equivalent at the time of actual payment).Further, attorney's fees equivalent to 10 % of the aforesaid award is assessed against respondents.All other claims are hereby dismissed for lack of merit.SO ORDERED.3Dissatisfied, both parties appealed the aforementioned decision of the POEA to the National Labor Relations Commission. Complainant-petitioner's appeal was dismissed for lack of merit while respondents' appeal was dismissed for having been filed out of time.Petitioner's motion for reconsideration was likewise denied. Hence this recourse.Petitioner submits that public respondent committed grave abuse of discretion and/or acted without or in excess of jurisdiction by disregarding the alteration of the employment contract made by private respondent. Petitioner claims that the alteration by private respondent of his salary and overtime rate which is evidenced by the Crew Agreement and the exit pass constitutes a violation of Article 34 of the Labor Code of the Philippines.6On the other hand, public respondent through the Solicitor General, contends that, as explained by the POEA: "Although the employment contract seems to have corrections, it is in conformity with the Wage Scale submitted to said office.7Apparently, petitioner emphasizes the materiality of the alleged unilateral alteration of the employment contract as this is proscribed by the Labor Code while public respondent finds the same to be merely innocuous. We take a closer look at the effects of these alterations upon petitioner's right to demand for his differential, overtime pay and refund of his return airfare to Manila.A careful examination of the records shows that there is in fact no alteration made in the Crew Agreement8or in the Exit Pass.9As the original data appear, the figures US$800.00 fall under the column salary, while the word "inclusive" is indicated under the column overtime rate. With the supposed alterations, the figures US$560.00 were handwritten above the figures US$800.00 while the figures US$240.00 were also written above the word "inclusive".As clearly explained by respondent NLRC, the correction was made only to specify the salary and the overtime pay to which petitioner is entitled under the contract. It was a mere breakdown of the total amount into US$560.00 as basic wage and US$240.00 as overtime pay. Otherwise stated, with or without the amendments the total emolument that petitioner would receive under the agreement as approved by the POEA is US$800.00 monthly with wage differentials or overtime pay included.10Moreover, the presence of petitioner's signature after said items renders improbable the possibility that petitioner could have misunderstood the amount of compensation he will be receiving under the contract. Nor has petitioner advanced any explanation for statements contrary or inconsistent with what appears in the records. Thus, he claimed: [a] that private respondent extended the duration of the employment contract indefinitely,11but admitted in his Reply that his employment contract was extended for another six (6) months by agreement between private respondent and himself:12[b] that when petitioner demanded for his overtime pay, respondents repatriated him13which again was discarded in his reply stating that he himself requested for his voluntary repatriation because of the bad faith and insincerity of private respondent;14[c] that he was required to post a cash bond in the amount of P20,000.00 but it was found that he deposited only the total amount of P15,000.00; [d] that his salary for November 1985 was not paid when in truth and in fact it was petitioner who owes private respondent US$285.83 for cash advances15and on November 27, 1985 the final pay slip was executed and signed;16and [e] that he finished his contract when on the contrary, despite prodding that he continue working until the renewed contract has expired, he adamantly insisted on his termination.Verily, it is quite apparent that the whole conflict centers on the failure of respondent company to give the petitioner the desired promotion which appears to be improbable at the moment because the M/V Knut Provider continues to be laid off at Limassol for lack of charterers.17It is axiomatic that laws should be given a reasonable interpretation, not one which defeats the very purpose for which they were passed. This Court has in many cases involving the construction of statutes always cautioned against narrowly interpreting a statute as to defeat the purpose of the legislator and stressed that it is of the essence of judicial duty to construe statutes so as to avoid such a deplorable result (of injustice or absurdity) and that therefore "a literal interpretation is to be rejected if it would be unjust or lead to absurd results."18There is no dispute that an alteration of the employment contract without the approval of the Department of Labor is a serious violation of law.Specifically, the law provides:Article 34 paragraph (i) of the Labor Code reads:Prohibited Practices. It shall be unlawful for any individual, entity, licensee, or holder of authority:x x x x(i) To substitute or alter employment contracts approved and verified by the Department of Labor from the time of actual signing thereof by the parties up to and including the period of expiration of the same without the approval of the Department of Labor.In the case at bar, both the Labor Arbiter and the National Labor Relations Commission correctly analyzed the questioned annotations as not