labor new cases doc

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Republic of the PhilippinesSupreme CourtManilaEN BANCANTONIO M. SERRANO, .R. No.!"#"!$

A%%ANT MARITIME SER&ICES, PERALTA,JJ.INC. an' MAR%O( NA&IATIONCO., INC., Promulgated:Respondents. March 24, 2009

x x

) E C I S I O N

A*STRIA+MARTINE,J.:

!or decades, the to"l o# sol"tar$ m"grants has helped l"#t ent"re #am"l"es and commun"t"es out o# po%ert$. The"rearn"ngs ha%e &u"lt houses, pro%"ded health care, e'u"pped schools and planted the seeds o# &us"nesses. The$ ha%e(o%en together the (orld &$ transm"tt"ng "deas and )no(ledge #rom countr$ to countr$. The$ ha%e pro%"ded thed$nam"c human l"n) &et(een cultures, soc"et"es and econom"es. Yet, only recently have we begun tounderstand not only how much international migration impacts development, but how smart public

policies can magnify this eect.

*n"ted +at"ons ecretar$-eneral an /"Moon-lo&al !orum on M"grat"on and e%elopmentrussels, 1ul$ 0, 20035

!or Anton"o errano 6pet"t"oner7, a !"l"p"no sea#arer, the last clause "n the 8thparagraph o# ect"on 0, Repu&l"c

Act 6R.A.7 +o. 042,25to ("t:

ec. 0. Money Claims. x x x n case o# term"nat"on o# o%erseas emplo$ment ("thout ;ust, %al"d or author"


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Pet"t"oner (as h"red &$ -allant Mar"t"me er%"ces, nc. and Marlo( +a%"gat"on Bo., Ltd. 6respondents7 under a

Ph"l"pp"ne ?%erseas Emplo$ment Adm"n"strat"on 6P?EA7appro%ed Bontract o# Emplo$ment ("th the #ollo("ng terms

and cond"t"ons:urat"on o# contract 2 months

Pos"t"on Bh"e# ?Dceras"c monthl$ salar$ *,400.00Fours o# (or) 4.0 hours per (ee)?%ert"me *300.00 per month

Gacat"on lea%e ("th pa$ 3.00 da$s per month85

?n March 9, 99, the date o# h"s departure, pet"t"oner (as constra"ned to accept a do(ngraded

emplo$ment contract #or the pos"t"on o# econd ?Dcer ("th a monthl$ salar$ o# *,000.00, upon the assurance and

representat"on o# respondents that he (ould &e made Bh"e# ?Dcer &$ the end o# Apr"l 99.H5

Respondents d"d not del"%er on the"r prom"se to ma)e pet"t"oner Bh"e# ?Dcer.35Fence, pet"t"oner re#used to

sta$ on as econd ?Dcer and (as repatr"ated to the Ph"l"pp"nes on Ma$ 2H, 99.5

Pet"t"oners emplo$ment contract (as #or a per"od o# 2 months or #rom March 9, 99 up to March 9, 999,

&ut at the t"me o# h"s repatr"at"on on Ma$ 2H, 99, he had ser%ed onl$ t(o 627 months and se%en 637 da$s o# h"s

contract, lea%"ng an unexp"red port"on o# n"ne 697 months and t(ent$three 62C7 da$s.

Pet"t"oner =led ("th the La&or Ar&"ter 6LA7 a Bompla"nt95aga"nst respondents #or construct"%e d"sm"ssal and #or

pa$ment o# h"s mone$ cla"ms "n the total amount o# *2H,442.3C, &ro)en do(n as #ollo(s:

Ma$ 23IC, 99 68 da$s7 "ncl.Lea%e pa$

* 4C.90

1une 0IC0, 99 2,890.001ul$ 0IC, 99 2,890.00August 0IC, 99 2,890.00ept. 0IC0, 99 2,890.00?ct. 0IC, 99 2,890.00+o%. 0IC0, 99 2,890.00ec. 0IC, 99 2,890.00

1an. 0IC, 999 2,890.00!e&. 0I2, 999 2,890.00Mar. I9, 999 69 da$s7 "ncl.lea%e pa$

,H40.00

28,C2.2C

Amount ad;usted to ch"e#mates salar$

6March 9IC, 99 to Apr"lIC0, 997 J

,0H0.8005

T?TAL BLAM * 2H,442.3C5

as (ell as moral and exemplar$ damages and attorne$s #ees.

The LA rendered a ec"s"on dated 1ul$ 8, 999, declar"ng the d"sm"ssal o# pet"t"oner "llegal and a(ard"ng h"m

monetar$ &ene=ts, to ("t:@FERE!?RE, prem"ses cons"dered, ;udgment "s here&$ rendered declar"ng that the d"sm"ssal o# the compla"nant6pet"t"oner7 &$ the respondents "n the a&o%eent"tled case (as "llegal and the respondents are here&$ ordered to pa$the compla"nant pet"t"oner5, ;o"ntl$ and se%erall$, "n Ph"l"pp"ne Burrenc$, &ased on the rate o# exchange pre%a"l"ng atthe t"me o# pa$ment, the amount o# !"#$ $#%&'* '+ #&** '+$Y &.'. *%--' (&'/,001.11), representing the complainants salary for three (3) months of the unexpired portion of theaforesaid contract of employment.

The respondents are l")e("se ordered to pa$ the compla"nant pet"t"oner5, ;o"ntl$ and se%erall$, "n Ph"l"pp"ne Burrenc$,&ased on the rate o# exchange pre%a"l"ng at the t"me o# pa$ment, the amount o# !?RTK !GE *.. ?LLAR 6*48.007,25represent"ng the compla"nants cla"m #or a salar$ d"erent"al. n add"t"on, the respondents are here&$ ordered

to pa$ the compla"nant, ;o"ntl$ and se%erall$, "n Ph"l"pp"ne Burrenc$, at the exchange rate pre%a"l"ng at the t"me o#
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pa$ment, the compla"nants 6pet"t"oners7 cla"m #or attorne$s #ees e'u"%alent to ten percent 60>7 o# the total amounta(arded to the a#oresa"d emplo$ee under th"s ec"s"on.

The cla"ms o# the compla"nant #or moral and exemplar$ damages are here&$ ME #or lac) o# mer"t.All other cla"ms are here&$ ME.? ?RERE.C56Emphas"s suppl"ed7

n a(ard"ng pet"t"oner a lumpsum salar$ o# *,330.00, the LA &ased h"s computat"on on the salar$ per"od

o# three months onl$ rather than the ent"re unexp"red port"on o# n"ne months and 2C da$s o# pet"t"oners

emplo$ment contract appl$"ng the su&;ect clause. Fo(e%er, the LA appl"ed the salar$ rate o# *2,890.00,

cons"st"ng o# pet"t"oners &5as"c salar$, *,400.00Imonth J *300.00Imonth, =xed o%ert"me pa$, J

*490.00Imonth, %acat"on lea%e pa$ *2,890.00Icompensat"on per month.45

Respondents appealed85to the +at"onal La&or Relat"ons Bomm"ss"on 6+LRB7 to 'uest"on the =nd"ng o# the LA

that pet"t"oner (as "llegall$ d"sm"ssed.

Pet"t"oner also appealedH5to the +LRB on the sole "ssue that the LA erred "n not appl$"ng the rul"ng o# the

Bourt "nTriple Integrated Services, Inc. v. National Labor Relations Commission35that "n case o# "llegal d"sm"ssal,

?!@s are ent"tled to the"r salar"es #or the unexp"red port"on o# the"r contracts.5

n a ec"s"on dated 1une 8, 2000, the +LRB mod"=ed the LA ec"s"on, to ("t:

@FERE!?RE, the ec"s"on dated 8 1ul$ 999 "s M?!E. Respondents are here&$ ordered to pa$compla"nant, ;o"ntl$ and se%erall$, "n Ph"l"pp"ne currenc$, at the pre%a"l"ng rate o# exchange at the t"me o# pa$ment the#ollo("ng:

. Three 6C7 months salar$,400 x C *4,200.002. alar$ d"erent"al 48.00*4,248.00C. 0> Attorne$s #ees 424.80

T?TAL *4,HH9.80

The other =nd"ngs are aDrmed.? ?RERE.95

The +LRB corrected the LAs computat"on o# the lumpsum salar$ a(arded to pet"t"oner &$ reduc"ng the

appl"ca&le salar$ rate #rom *2,890.00 to *,400.00 &ecause R.A. +o. 042 does not pro%"de #or the a(ard o#

o%ert"me pa$, (h"ch should &e pro%en to ha%e &een actuall$ per#ormed, and #or %acat"on lea%e pa$.205

Pet"t"oner =led a Mot"on #or Part"al Recons"derat"on, &utth"s t"me he 'uest"oned the const"tut"onal"t$ o# the

su&;ect clause.25The +LRB den"ed the mot"on.225

Pet"t"oner =led a Pet"t"on #or Certiorari2C5("th the BA, re"terat"ng the const"tut"onal challenge aga"nst the

su&;ect clause.245A#ter "n"t"all$ d"sm"ss"ng the pet"t"on on a techn"cal"t$, the BA e%entuall$ ga%e due course to "t, as

d"rected &$ th"s Bourt "n "ts Resolut"on dated August 3, 200C (h"ch granted the pet"t"on #or certiorari, doc)eted as -.R.

+o. 8CC, =led &$ pet"t"oner.

n a ec"s"on dated ecem&er , 2004, the BA aDrmed the +LRB rul"ng on the reduct"on o# the appl"ca&le

salar$ rateN ho(e%er, the BA s)"rted the const"tut"onal "ssue ra"sed &$ pet"t"oner.285

F"s Mot"on #or Recons"derat"on2H5ha%"ng &een den"ed &$ the BA,235pet"t"oner &r"ngs h"s cause to th"s Bourt on

the #ollo("ng grounds:
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The Bourt o# Appeals and the la&or tr"&unals ha%e dec"ded the case "n a (a$ not "n accord ("th appl"ca&ledec"s"on o# the upreme Bourt "n%ol%"ng s"m"lar "ssue o# grant"ng unto the m"grant (or)er &ac) (ages e'ual to theunexp"red port"on o# h"s contract o# emplo$ment "nstead o# l"m"t"ng "t to three 6C7 months

n the alternat"%e that the Bourt o# Appeals and the La&or Tr"&unals (ere merel$ appl$"ng the"r "nterpretat"on o#ect"on 0 o# Repu&l"c Act +o. 042, "t "s su&m"tted that the Bourt o# Appeals gra%el$ erred "n la( (hen "t #a"led tod"scharge "ts ;ud"c"al dut$ to dec"de 'uest"ons o# su&stance not thereto#ore determ"ned &$ the Fonora&le upremeBourt, part"cularl$, the const"tut"onal "ssues ra"sed &$ the pet"t"oner on the const"tut"onal"t$ o# sa"d la(, (h"chunreasona&l$, un#a"rl$ and ar&"trar"l$ l"m"ts pa$ment o# the a(ard #or &ac) (ages o# o%erseas (or)ers to three 6C7months.

E%en ("thout cons"der"ng the const"tut"onal l"m"tat"ons o#5 ec. 0 o# Repu&l"c Act +o. 042, the Bourt o#Appeals gra%el$ erred "n la( "n exclud"ng #rom pet"t"oners a(ard the o%ert"me pa$ and %acat"on pa$ pro%"ded "n h"scontract s"nce under the contract the$ #orm part o# h"s salar$.25

?n !e&ruar$ 2H, 200, pet"t"oner (rote the Bourt to ("thdra( h"s pet"t"on as he "s alread$ old and s"c)l$, and

he "ntends to ma)e use o# the monetar$ a(ard #or h"s med"cal treatment and med"cat"on.295Re'u"red to comment,

counsel #or pet"t"oner =led a mot"on, urg"ng the court to allo( part"al execut"on o# the und"sputed monetar$ a(ard and,

at the same t"me, pra$"ng that the const"tut"onal 'uest"on &e resol%ed.C05

Bons"der"ng that the part"es ha%e =led the"r respect"%e memoranda, the Bourt no( ta)es up the #ull mer"t o#

the pet"t"on m"nd#ul o# the extreme "mportance o# the const"tut"onal 'uest"on ra"sed there"n.

%n the 2rst and second issues

The unan"mous =nd"ng o# the LA, +LRB and BA that the d"sm"ssal o# pet"t"oner (as "llegal "s not

d"sputed. L")e("se not d"sputed "s the salar$ d"erent"al o# *48.00 a(arded to pet"t"oner "n all three #ora. @hat

rema"ns d"sputed "s onl$ the computat"on o# the lumpsum salar$ to &e a(arded to pet"t"oner &$ reason o# h"s "llegal

d"sm"ssal.

Appl$"ng the su&;ect clause, the +LRB and the BA computed the lumpsum salar$ o# pet"t"oner at the monthl$

rate o# *,400.00 co%er"ng the per"od o# three months out o# the unexp"red port"on o# n"ne months and 2C da$s o#

h"s emplo$ment contract or a total o# *4,200.00.

mpugn"ng the const"tut"onal"t$ o# the su&;ect clause, pet"t"oner contends that, "n add"t"on to the *4,200.00

a(arded &$ the +LRB and the BA, he "s ent"tled to *2,2.2C more or a total o# *28,C2.2C, e'u"%alent to h"s

salar"es #or the ent"re n"ne months and 2C da$s le#t o# h"s emplo$ment contract, computed at the monthl$ rate o#*2,890.00.C5

The Ar-uments of Petitioner

Pet"t"oner contends that the su&;ect clause "s unconst"tut"onal &ecause "t undul$ "mpa"rs the #reedom o# ?!@s

to negot"ate #or and st"pulate "n the"r o%erseas emplo$ment contracts a determ"nate emplo$ment per"od and a =xed

salar$ pac)age.C25t also "mp"nges on the e'ual protect"on clause, #or "t treats ?!@s d"erentl$ #rom local !"l"p"no

(or)ers 6local (or)ers7 &$ putt"ng a cap on the amount o# lumpsum salar$ to (h"ch ?!@s are ent"tled "n case o#

"llegal d"sm"ssal, (h"le sett"ng no l"m"t to the same monetar$ a(ard #or local (or)ers (hen the"r d"sm"ssal "s declared

"llegalN that the d"sparate treatment "s not reasona&le as there "s no su&stant"al d"st"nct"on &et(een the t(o groupsNCC5and that "t de#eats ect"on , C45Art"cle o# the Bonst"tut"on (h"ch guarantees the protect"on o# the r"ghts and

(el#are o# all !"l"p"no (or)ers, (hether deplo$ed locall$ or o%erseas.C85

Moreo%er, pet"t"oner argues that the dec"s"ons o# the BA and the la&or tr"&unals are not "n l"ne ("th ex"st"ng

;ur"sprudence on the "ssue o# mone$ cla"ms o# "llegall$ d"sm"ssed [email protected] there are conO"ct"ng rul"ngs on th"s,

pet"t"oner urges the Bourt to sort them out #or the gu"dance o# aected [email protected]

Pet"t"oner #urther underscores that the "nsert"on o# the su&;ect clause "nto R.A. +o. 042 ser%es no other

purpose &ut to &ene=t local placement agenc"es. Fe mar)s the statement made &$ the ol"c"tor -eneral "n h"s

Memorandum, viz.:
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?#ten, placement agenc"es, the"r l"a&"l"t$ &e"ng sol"dar$, shoulder the pa$ment o# mone$ cla"ms "n the e%ent

that ;ur"sd"ct"on o%er the #ore"gn emplo$er "s not ac'u"red &$ the court or "# the #ore"gn emplo$er reneges on "tso&l"gat"on. Fence, placement agenc"es that are "n good #a"th and (h"ch #ul=ll the"r o&l"gat"ons are unnecessar"l$penal"


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@hen the Bourt "s called upon to exerc"se "ts po(er o# ;ud"c"al re%"e( o# the acts o# "ts coe'uals, such as the

Bongress, "t does so onl$ (hen these cond"t"ons o&ta"n: 67 that there "s an actual case or contro%ers$ "n%ol%"ng a

conO"ct o# r"ghts suscept"&le o# ;ud"c"al determ"nat"onN435627 that the const"tut"onal 'uest"on "s ra"sed &$ a proper

part$45and at the earl"est opportun"t$N495and 6C7 that the const"tut"onal 'uest"on "s the %er$ lis motao# the case,

805other("se the Bourt ("ll d"sm"ss the case or dec"de the same on some other ground.85

@"thout a dou&t, there ex"sts "n th"s case an actual contro%ers$ d"rectl$ "n%ol%"ng pet"t"oner (ho "s personall$

aggr"e%ed that the la&or tr"&unals and the BA computed h"s monetar$ a(ard &ased on the salar$ per"od o# three

months onl$ as pro%"ded under the su&;ect clause.

The const"tut"onal challenge "s also t"mel$. t should &e &orne "n m"nd that the re'u"rement that a const"tut"onal

"ssue &e ra"sed at the earl"est opportun"t$ enta"ls the "nterpos"t"on o# the "ssue "n the plead"ngs &e#ore a competent

court, such that, "# the "ssue "s not ra"sed "n the plead"ngs &e#ore that competent court, "t cannot &e cons"dered at the

tr"al and, "# not cons"dered "n the tr"al, "t cannot &e cons"dered on appeal.

825

Records d"sclose that the "ssue on theconst"tut"onal"t$ o# the su&;ect clause (as =rst ra"sed, not "n pet"t"oners appeal ("th the +LRB, &ut "n h"s Mot"on #or

Part"al Recons"derat"on ("th sa"d la&or tr"&unal,8C5and re"terated "n h"s Pet"t"on #or Certiorari&e#ore the BA.

845+onetheless, the "ssue "s deemed seasona&l$ ra"sed &ecause "t "s not the +LRB &ut the BA (h"ch has the

competence to resol%e the const"tut"onal "ssue. The +LRB "s a la&or tr"&unal that merel$ per#orms a 'uas";ud"c"al

#unct"on "ts #unct"on "n the present case "s l"m"ted to determ"n"ng 'uest"ons o# #act to (h"ch the leg"slat"%e pol"c$ o# R.A.

+o. 042 "s to &e appl"ed and to resol%"ng such 'uest"ons "n accordance ("th the standards la"d do(n &$ the la( "tsel#N

885thus, "ts #oremost #unct"on "s to adm"n"ster and en#orce R.A. +o. 042, and not to "n'u"re "nto the %al"d"t$ o# "ts

pro%"s"ons. The BA, on the other hand, "s %ested ("th the po(er o# ;ud"c"al re%"e( or the po(er to declare

unconst"tut"onal a la( or a pro%"s"on thereo#, such as the su&;ect clause.8H5Pet"t"oners "nterpos"t"on o# the

const"tut"onal "ssue &e#ore the BA (as undou&tedl$ seasona&le.The BA (as there#ore rem"ss "n #a"l"ng to ta)e up the

"ssue "n "ts dec"s"on.

The th"rd cond"t"on that the const"tut"onal "ssue &e cr"t"cal to the resolut"on o# the case l")e("se o&ta"ns

&ecause the monetar$ cla"m o# pet"t"oner to h"s lumpsum salar$ #or the ent"re unexp"red port"on o# h"s 2month

emplo$ment contract, and not ;ust #or a per"od o# three months, str")es at the %er$ core o# the su&;ect clause.

Thus, the stage "s all set #or the determ"nat"on o# the const"tut"onal"t$ o# the su&;ect clause.

oes t!e s"b#ect cla"se violate Section $%,&rticle III o' t!e Constit"tion on non(impairmento' contracts)

The ans(er "s "n the negat"%e.

Pet"t"oners cla"m that the su&;ect clause undul$ "nter#eres ("th the st"pulat"ons "n h"s contract on the term o#

h"s emplo$ment and the =xed salar$ pac)age he ("ll rece"%e835"s not tena&le.

ect"on 0, Art"cle o# the Bonst"tut"on pro%"des:+o la( "mpa"r"ng the o&l"gat"on o# contracts shall &e passed.

The proh"&"t"on "s al"gned ("th the general pr"nc"ple that la(s ne(l$ enacted ha%e onl$ a prospect"%e

operat"on,85and cannot aect acts or contracts alread$ per#ectedN895ho(e%er, as to la(s alread$ "n ex"stence, the"r

pro%"s"ons are read "nto contracts and deemed a part thereo#.H05Thus, the non"mpa"rment clause under ect"on 0,

Art"cle "s l"m"ted "n appl"cat"on to la(s a&out to &e enacted that (ould "n an$ (a$ derogate #rom ex"st"ng acts or

contracts &$ enlarg"ng, a&r"dg"ng or "n an$ manner chang"ng the "ntent"on o# the part"es thereto.


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As aptl$ o&ser%ed &$ the ?-, the enactment o# R.A. +o. 042 "n 998 preceded the execut"on o# the

emplo$ment contract &et(een pet"t"oner and respondents "n 99. Fence, "t cannot &e argued that R.A. +o. 042,

part"cularl$ the su&;ect clause, "mpa"red the emplo$ment contract o# the part"es. Rather, (hen the part"es executed

the"r 99 emplo$ment contract, the$ (ere deemed to ha%e "ncorporated "nto "t all the pro%"s"ons o# R.A. +o. 042.

ut e%en "# the Bourt (ere to d"sregard the t"mel"ne, the su&;ect clause ma$ not &e declared unconst"tut"onal

on the ground that "t "mp"nges on the "mpa"rment clause, #or the la( (as enacted "n the exerc"se o# the pol"ce po(er

o# the tate to regulate a &us"ness, pro#ess"on or call"ng, part"cularl$ the recru"tment and deplo$ment o# ?!@s, ("th

the no&le end "n %"e( o# ensur"ng respect #or the d"gn"t$ and (ell&e"ng o# ?!@s (here%er the$ ma$ &e emplo$ed.

H5Pol"ce po(er leg"slat"ons adopted &$ the tate to promote the health, morals, peace, educat"on, good order, sa#et$,

and general (el#are o# the people are generall$ appl"ca&le not onl$ to #uture contracts &ut e%en to those alread$ "n

ex"stence, #or all pr"%ate contracts must $"eld to the super"or and leg"t"mate measures ta)en &$ the tate to promote

pu&l"c (el#are.H25

oes t!e s"b#ect cla"se violate Section $,

&rticle III o' t!e Constit"tion, and Section $*,&rticle II and Section +, &rticle III on laboras a protected sector)

The ans(er "s "n the aDrmat"%e.

ect"on , Art"cle o# the Bonst"tut"on guarantees:

+o person shall &e depr"%ed o# l"#e, l"&ert$, or propert$ ("thout due process o# la( nor shall an$ person &e den"ed thee'ual protect"on o# the la(.

ect"on ,HC5Art"cle and ect"on C,H45Art"cle accord all mem&ers o# the la&or sector, ("thout d"st"nct"on

as to place o# deplo$ment, #ull protect"on o# the"r r"ghts and (el#are.

To !"l"p"no (or)ers, the r"ghts guaranteed under the #orego"ng const"tut"onal pro%"s"ons translate to econom"c

secur"t$ and par"t$: all monetar$ &ene=ts should &e e'uall$ en;o$ed &$ (or)ers o# s"m"lar categor$, (h"le all monetar$

o&l"gat"ons should &e &orne &$ them "n e'ual degreeN none should &e den"ed the protect"on o# the la(s (h"ch "s

en;o$ed &$, or spared the &urden "mposed on, others "n l")e c"rcumstances.H85

uch r"ghts are not a&solute &ut su&;ect to the "nherent po(er o# Bongress to "ncorporate, (hen "t sees =t, a

s$stem o# class"=cat"on "nto "ts leg"slat"onN ho(e%er, to &e %al"d, the class"=cat"on must compl$ ("th these

re'u"rements: 7 "t "s &ased on su&stant"al d"st"nct"onsN 27 "t "s germane to the purposes o# the la(N C7 "t "s not l"m"ted to

ex"st"ng cond"t"ons onl$N and 47 "t appl"es e'uall$ to all mem&ers o# the class.HH5

There are three le%els o# scrut"n$ at (h"ch the Bourt re%"e(s the const"tut"onal"t$ o# a class"=cat"on em&od"ed

"n a la(: a7 the de#erent"al or rat"onal &as"s scrut"n$ "n (h"ch the challenged class"=cat"on needs onl$ &e sho(n to &e

rat"onall$ related to ser%"ng a leg"t"mate state "nterestNH35&7 the m"ddlet"er or "ntermed"ate scrut"n$ "n (h"ch the

go%ernment must sho( that the challenged class"=cat"on ser%es an "mportant state "nterest and that the

class"=cat"on "s at least su&stant"all$ related to ser%"ng that "nterestN

H5

and c7 str"ct ;ud"c"alscrut"n$H95"n (h"cha leg"slat"%e class"=cat"on (h"ch "mperm"ss"&l$ "nter#eres ("th the exerc"se o# a #undamental

r"ght305or operates to the pecul"ar d"sad%antage o# a suspect class35"s presumed unconst"tut"onal, and the &urden "s

upon the go%ernment to pro%e that the class"=cat"on "s necessar$ to ach"e%e a compelling state interestand that

"t "s the least restrictive meansto protect such "nterest.325

*nder Amer"can ;ur"sprudence, str"ct ;ud"c"al scrut"n$ "s tr"ggered &$ suspect class"=cat"ons3C5&ased

on race345or gender385&ut not (hen the class"=cat"on "s dra(n along "ncome categor"es.3H5


8/41

t "s d"erent "n the Ph"l"pp"ne sett"ng. n Central -an /no0 -ango Sentral ng 1ilipinas2 3mployee &ssociation,

Inc. v. -ango Sentral ng 1ilipinas,335the const"tut"onal"t$ o# a pro%"s"on "n the charter o# the -ango Sentral ng

1ilipinas6P7, a go%ernment =nanc"al "nst"tut"on 6-!7, (as challenged #or ma"nta"n"ng "ts ran)and=le emplo$ees

under the alar$ tandard"


9/41

sta$. 9onsidering that ma8ority, if not all, the ran4


10/41

Another (as Triple(3ig!t Integrated Services, Inc. v. National Labor Relations Commission 6Th"rd "%"s"on,

ecem&er 997,C5(h"ch "n%ol%ed an ?!@ 6there"n respondent Erl"nda ?sdana7 (ho (as or"g"nall$ granted a 2

month contract, (h"ch (as deemed rene(ed #or another 2 months. A#ter ser%"ng #or one $ear and se%enandahal#

months, respondent ?sdana (as "llegall$ d"sm"ssed, and the Bourt a(arded her salar"es #or the ent"re unexp"red

port"on o# #our and onehal# months o# her contract.

The Marsaman "nterpretat"on o# ect"on 0687 has s"nce &een adopted "n the #ollo("ng cases:

Case TitleContractPerio'

Perio' ofSer2ice

*ne3pire'Perio'

Perio' Applie' inthe Computationof the Monetar1A0ar'

)"ppers %.Maguad45

H months 4 months 4 months $ months

ah"a h"pp"n

g %. Re$naldoBhua 85

9 months 5 months 4 months $ months

Bentenn"alTransmar"ne%. dela Bru>?, 935"llegall$ d"sm"ssed ?!@s, no matter ho( long the per"od o# the"r

emplo$ment contracts, (ere ent"tled to the"r salar"es #or the ent"re unexp"red port"ons o# the"r contracts. The matr"x&elo( spea)s #or "tsel#:

Case Title ContractPerio'

Perio' ofSer2ice

*ne3pire'Perio'

Perio' Applie' inthe Computation ofthe Monetar1A0ar'

ATB %. BA,et al.95

2 $ears 4 months 22 months 44 months

Ph"l. ntegrated%. +LRB995

2 $ears # 'a1s 2C monthsand 2C da$s

47 months an' 47'a1s

1- %. +LB005 2 $ears 8 months 8 months !6 months

Ago$ %.+LRB05

2 $ears 4 months 22 months 44 months

E %. +LRB, etal.025

2 $ears 6 months 9 months !8 months

arros %. +LRB,et al.0C5

2 months $ months months 5 months

Ph"l"pp"neTransmar"ne %.Bar"lla045

2 months " monthsan' 44'a1s

8 months and da$s

6 months an' !5'a1s

It is plain t!at prior to R.&. No. *%67, all 489s, regardless o' contract periods or t!e "nepired portions

t!ereo', 0ere treated alie in terms o' t!e comp"tation o' t!eir monetary bene;ts in case o' illegal dismissal. T!eir

claims 0ere s"b#ected to a "ni'orm r"le o' comp"tation: t!eir basic salaries m"ltiplied by t!e entire "nepired portion

o' t!eir employment contracts.

The enactment o# the su&;ect clause "n R.A. +o. 042 "ntroduced a d"erent"ated rule o# computat"on o# the

mone$ cla"ms o# "llegall$ d"sm"ssed ?!@s &ased on the"r emplo$ment per"ods, "n the process singling outone

categor$ (hose contracts ha%e an unexp"red port"on o# one $ear or more and su&;ect"ng them to the pecul"ard"sad%antage o# ha%"ng the"r monetar$ a(ards l"m"ted to the"r salar"es #or C months or #or the unexp"red port"on

thereo#, (h"che%er "s less, &ut all the (h"le spar"ng the other categor$ #rom such pre;ud"ce, s"mpl$ &ecause the latters

unexp"red contracts#all short o# one $ear.

Amon- O/(s (ith Emplo1mentContracts of More Than One :ear

*pon closer exam"nat"on o# the term"nolog$ emplo$ed "n the su&;ect clause, the Bourt no( has m"sg"%"ngs on

the accurac$ o# the Marsaman"nterpretat"on.
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The Bourt notes that the su&;ect clause or #or three 6C7 months #or e%er$ $ear o# the unexp"red

term, (h"che%er "s less conta"ns the 'ual"#$"ng phrases e%er$ $ear and unexp"red term. $ "ts ord"nar$ mean"ng, the

(ord term means a l"m"ted or de=n"te extent o# t"me.085Borollar"l$, that e%er$ $ear "s &ut part o# an unexp"red term "s

s"gn"=cant "n man$ (a$s: =rst, the unexp"red term must &e at least one $ear, 'or i' it 0ere any

s!orter, t!ere 0o"ld be no occasion 'or s"c! "nepired term to be meas"red by every yearN and second, the or"g"nal

term must &e more than one $ear, #or other("se, (hate%er (ould &e the unexp"red term thereo# ("ll not reach e%en a

$ear. Bonse'uentl$, the more dec"s"%e #actor "n the determ"nat"on o# (hen the su&;ect clause #or three 6C7 months

#or e%er$ $ear o# the unexp"red term, (h"che%er "s less shall appl$ "s not the length o# the or"g"nal contract per"od as

held "n Marsaman,0H5&ut the length o# the unexp"red port"on o# the contract per"od the su&;ect clause appl"es "n

cases (hen the unexp"red port"on o# the contract per"od "s at least one $ear, (h"ch ar"thmet"call$ re'u"res that the

or"g"nal contract per"od &e more than one $ear.

G"e(ed "n that l"ght, the su&;ect clause creates a su&la$er o# d"scr"m"nat"on among ?!@s (hose contract

per"ods are #or more than one $ear: those (ho are "llegall$ d"sm"ssed ("th less than one $ear le#t "n the"r contracts

shall &e ent"tled to the"r salar"es #or the ent"re unexp"red port"on thereo#, (h"le those (ho are "llegall$ d"sm"ssed ("th

one $ear or more rema"n"ng "n the"r contracts shall &e co%ered &$ the su&;ect clause, and the"r monetar$ &ene=ts

l"m"ted to the"r salar"es #or three months onl$.

To concretel$ "llustrate the appl"cat"on o# the #orego"ng "nterpretat"on o# the su&;ect clause, the Bourt assumes

h$pothet"cal ?!@B and ?!@, (ho each ha%e a 24month contract at a salar$ rate o# *,000.00 per

month. ?!@B "s "llegall$ d"sm"ssed on the 2thmonth, and ?!@, on the Cthmonth. Bons"der"ng that there "s at

least 2 months rema"n"ng "n the contract per"od o# ?!@B, the su&;ect clause appl"es to the computat"on o# the

latters monetar$ &ene=ts. Thus, ?!@B ("ll &e ent"tled, not to *2,000,00 or the latters total salar"es #or the 2

months unexp"red port"on o# the contract, &ut to the lesser amount o# *C,000.00 or the latters salar"es #or C months

out o# the 2month unexp"red term o# the contract. ?n the other hand, ?!@ "s spared #rom the eects o# the

su&;ect clause, #or there are onl$ months le#t "n the latters contract per"od. Thus, ?!@ ("ll &e ent"tled to

*,000.00, (h"ch "s e'u"%alent to h"sIher total salar"es #or the ent"re month unexp"red port"on.

O/(s vis


13/41

Art"cle H08. # the contracts o# the capta"n and mem&ers o# the cre( ("th the agent should &e #or a de=n"te

per"od or %o$age, the$ cannot &e d"scharged unt"l the #ul=llment o# the"r contracts, except #or reasons o#"nsu&ord"nat"on "n ser"ous matters, ro&&er$, the#t, ha&"tual drun)enness, and damage caused to the %essel or to "tscargo &$ mal"ce or man"#est or pro%en negl"gence.

Art"cle H08 (as appl"ed to Madrigal S!ipping Company, Inc. v. 4gilvie,05"n

(h"ch the Bourt held the sh"pp"ng compan$ l"a&le #or the salar"es and su&s"stence allo(ance o# "ts "llegall$ d"sm"ssed

emplo$ees #or the ent"re unexp"red port"on o# the"r emplo$ment contracts.

@h"le Art"cle H08 has rema"ned good la( up to the present, 5Art"cle 299 o# the Bode o# Bommerce (as

replaced &$ Art. 8H o# the B"%"l Bode o# 9, to ("t:Art"cle 8H. !"eld hands, mechan"cs, art"sans, and other laborers hired for a certain time and for a

certain wor4cannot lea%e or &e d"sm"ssed ("thout suDc"ent cause, &e#ore the #ul=llment o# the contract.6Emphas"ssuppl"ed.7

B"t"ng Manresa, the Bourt "n Lemoine v. &lan25read the d"s;unct"%e QorQ "n Art"cle 8H as a con;unct"%e QandQ so as

to appl$ the pro%"s"on to local (or)ers (ho are emplo$ed #or a t"me certa"n although #or no part"cular s)"ll. Th"s"nterpretat"on o# Art"cle 8H (as re"terated "n S!ipping &gency, Inc. v. 4ple,

95"n%ol%"ng sea#arers (ho (ere "llegall$ d"scharged. n Tenia Sills and Trade Services, Inc. v. National Labor

Relations Commission,205an ?!@ (ho (as "llegall$ d"sm"ssed pr"or to the exp"rat"on o# her =xedper"od emplo$ment

contract as a &a&$ s"tter, (as a(arded salar"es correspond"ng to the unexp"red port"on o# her contract. The Bourt

arr"%ed at the same rul"ng "n&nderson v. National Labor Relations Commission,25(h"ch "n%ol%ed a #oreman h"red "n

9 "n aud" Ara&"a #or a =xed term o# t(o $ears, &ut (ho (as "llegall$ d"sm"ssed a#ter onl$ n"ne months on the ;o&

the Bourt a(arded h"m salar"es correspond"ng to 8 months, the unexp"red port"on o# h"s contract. n&sia 9orld

Recr"itment, Inc. v. National Labor Relations Commission,225a !"l"p"no (or)"ng as a secur"t$ oDcer "n 99

"n Angola (as a(arded h"s salar"es #or the rema"n"ng per"od o# h"s 2month contract a#ter he (as (rong#ull$

d"scharged. !"nall$, "n ?inta Maritime Co., Inc. v. National Labor Relations Commission,2C5an ?!@ (hose 2month

contract (as "llegall$ cut short "n the second month (as declared ent"tled to h"s salar"es #or the rema"n"ng 0 months

o# h"s contract.

In s"m, prior to R.&. No. *%67, 489s and local 0orers 0it! ;ed(term employment 0!o 0ere illegallydisc!arged 0ere treated alie in terms o' t!e comp"tation o' t!eir money claims: t!ey 0ere "ni'ormly entitled to t!eir
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14/41

salaries 'or t!e entire "nepired portions o' t!eir contracts.ut ("th the enactment o# R.A. +o. 042, spec"=call$ the

adopt"on o# the su&;ect clause, "llegall$ d"sm"ssed ?!@s ("th an unexp"red port"on o# one $ear or more "n the"r

emplo$ment contract ha%e s"nce &een d"erentl$ treated "n that the"r mone$ cla"ms are su&;ect to a Cmonth cap,

(hereas no such l"m"tat"on "s "mposed on local (or)ers ("th =xedterm emplo$ment.

$he 9ourt concludes that the sub8ect clause contains a suspect classi2cation in that, in the

computation of the monetary bene2ts of 2xed


15/41

The l"a&"l"t$ o# the pr"nc"pal and the recru"tmentIplacement agenc$ or an$ and all cla"ms under th"s ect"on

shall &e ;o"nt and se%eral.An$ comprom"seIam"ca&le settlement or %oluntar$ agreement on an$ mone$ cla"ms exclus"%e o# damages

under th"s ect"on shall not &e less than =#t$ percent 680>7 o# such mone$ cla"ms: 1rovided, That an$ "nstallmentpa$ments, "# appl"ca&le, to sat"s#$ an$ such comprom"se or %oluntar$ settlement shall not &e more than t(o 627months. An$ comprom"seI%oluntar$ agreement "n %"olat"on o# th"s paragraph shall &e null and %o"d.

+oncompl"ance ("th the mandator$ per"od #or resolut"ons o# cases pro%"ded under th"s ect"on shall su&;ect

the respons"&le oDc"als to an$ or all o# the #ollo("ng penalt"es:67 The salar$ o# an$ such oDc"al (ho #a"ls to render h"s dec"s"on or resolut"on ("th"n the prescr"&ed per"od shall &e, orcaused to &e, ("thheld unt"l the sa"d oDc"al compl"es there("thN627 uspens"on #or not more than n"net$ 6907 da$sN or6C7 "sm"ssal #rom the ser%"ce ("th d"s'ual"=cat"on to hold an$ appo"nt"%e pu&l"c oDce #or =%e 687 $ears.

Pro%"ded, ho(e%er, That the penalt"es here"n pro%"ded shall &e ("thout pre;ud"ce to an$ l"a&"l"t$ (h"ch an$ suchoDc"al ma$ ha%e "ncurred under other ex"st"ng la(s or rules and regulat"ons as a conse'uence o# %"olat"ng thepro%"s"ons o# th"s paragraph.

ut s"gn"=cantl$, ect"on 0 o# 2033 does not pro%"de #or an$ rule on the computat"on o# mone$ cla"ms.

A rule on the computat"on o# mone$ cla"ms conta"n"ng the su&;ect clause (as "nserted and e%entuall$ adopted

as the 8thparagraph o# ect"on 0 o# R.A. +o. 042. The Bourt exam"ned the rat"onale o# the su&;ect clause "n the

transcr"pts o# the "cameral Bon#erence Bomm"ttee 6Bon#erence Bomm"ttee7 Meet"ngs on the Magna Barta on ?B@s

6"sagree"ng Pro%"s"ons o# enate "ll +o. 2033 and Fouse "ll +o. 4C47. Fo(e%er, the Bourt =nds no d"scern"&le

state "nterest, let alone a compell"ng one, that "s sought to &e protected or ad%anced &$ the adopt"on o# the su&;ect

clause.

n =ne, the -o%ernment has #a"led to d"scharge "ts &urden o# pro%"ng the ex"stence o# a compell"ng state

"nterest that (ould ;ust"#$ the perpetuat"on o# the d"scr"m"nat"on aga"nst ?!@s under the su&;ect clause.

Assum"ng that, as ad%anced &$ the ?-, the purpose o# the su&;ect clause "s to protect the emplo$ment o#

?!@s &$ m"t"gat"ng the sol"dar$ l"a&"l"t$ o# placement agenc"es, such callous and ca%al"er rat"onale ("ll ha%e to &e

re;ected. There can ne%er &e a ;ust"=cat"on #or an$ #orm o# go%ernment act"on that alle%"ates the &urden o# one sector,

&ut "mposes the same &urden on another sector, espec"all$ (hen the #a%ored sector "s composed o# pr"%ate

&us"nesses such as placement agenc"es, (h"le the d"sad%antaged sector "s composed o# ?!@s (hose protect"on no

less than the Bonst"tut"on commands. The "dea that pr"%ate &us"ness "nterest can &e ele%ated to the le%el o# a

compell"ng state "nterest "s od"ous.

Moreo%er, e%en "# the purpose o# the su&;ect clause "s to lessen the sol"dar$ l"a&"l"t$ o# placement agenc"es vis(

a(visthe"r #ore"gn pr"nc"pals, there are mechan"sms alread$ "n place that can &e emplo$ed to ach"e%e that purpose

("thout "n#r"ng"ng on the const"tut"onal r"ghts o# ?!@s.

The P?EA Rules and Regulat"ons -o%ern"ng the Recru"tment and Emplo$ment o# Landased ?%erseas

@or)ers, dated !e&ruar$ 4, 2002, "mposes adm"n"strat"%e d"sc"pl"nar$ measures on err"ng #ore"gn emplo$ers (hode#ault on the"r contractual o&l"gat"ons to m"grant (or)ers andIor the"r Ph"l"pp"ne agents. These d"sc"pl"nar$ measures

range #rom temporar$ d"s'ual"=cat"on to pre%ent"%e suspens"on. The P?EA Rules and Regulat"ons -o%ern"ng the

Recru"tment and Emplo$ment o# ea#arers, dated Ma$ 2C, 200C, conta"ns s"m"lar adm"n"strat"%e d"sc"pl"nar$ measures

aga"nst err"ng #ore"gn emplo$ers.

Resort to these adm"n"strat"%e measures "s undou&tedl$ the less restr"ct"%e means o# a"d"ng local placement

agenc"es "n en#orc"ng the sol"dar$ l"a&"l"t$ o# the"r #ore"gn pr"nc"pals.


16/41

Thus, the su&;ect clause "n the 8thparagraph o# ect"on 0 o# R.A. +o. 042 "s %"olat"%e o# the r"ght o# pet"t"oner

and other ?!@s to e'ual protect"on.

!urther, there (ould &e certa"n m"sg"%"ngs "# one "s to approach the declarat"on o# the unconst"tut"onal"t$ o# the su&;ect

clause #rom the lone perspect"%e that the clause d"rectl$ %"olates state pol"c$ on la&or under ect"on C, C5Art"cle o#

the Bonst"tut"on.

@h"le all the pro%"s"ons o# the 93 Bonst"tut"on are presumed sel#execut"ng,,C25there are some (h"ch th"s Bourt has

declared not 8udicially enforceable, Art"cle &e"ng one,CC5part"cularl$ ect"on C thereo#, the nature o# (h"ch, th"s

Bourt, "n&gabon v. National Labor Relations Commission,C45has descr"&ed to &e not sel#actuat"ng:

Thus, the const"tut"onal mandates o# protect"on to la&or and secur"t$ o# tenure ma$ &e deemed as sel#execut"ng "n the sense that these are automat"call$ ac)no(ledged and o&ser%ed ("thout need #or an$ ena&l"ngleg"slat"on. Fo(e%er, to declare that the const"tut"onal pro%"s"ons are enough to guarantee the #ull exerc"se o# ther"ghts em&od"ed there"n, and the real"


17/41

o# the del"&erat"ons lead"ng to "ts enactment or the plead"ngs o# respondent that (ould "nd"cate that there "s an

ex"st"ng go%ernmental purpose #or the su&;ect clause, or e%en ;ust a pretext o# one.

The su&;ect clause does not state or "mpl$ an$ de=n"t"%e go%ernmental purposeN and "t "s #or that prec"se

reason that the clause %"olates not ;ust pet"t"oners r"ght to e'ual protect"on, &ut also her r"ght to su&stant"%e due

process under ect"on ,C35Art"cle o# the Bonst"tut"on.

The su&;ect clause &e"ng unconst"tut"onal, pet"t"oner "s ent"tled to h"s salar"es #or the ent"re unexp"red per"od o#

n"ne months and 2C da$s o# h"s emplo$ment contract, pursuant to la( and ;ur"sprudence pr"or to the enactment o#

R.A. +o. 042.

%n the $hird !ssue

Pet"t"oner contends that h"s o%ert"me and lea%e pa$ should #orm part o# the salar$ &as"s "n the computat"on o#

h"s monetar$ a(ard, &ecause these are =xed &ene=ts that ha%e &een st"pulated "nto h"s contract.

Pet"t"oner "s m"sta)en.

The (ord salaries"n ect"on 0687 does not "nclude o%ert"me and lea%e pa$. !or sea#arers l")e pet"t"oner, ?LE

epartment ?rder +o. CC, ser"es 99H, pro%"des a tandard Emplo$ment Bontract o# ea#arers, "n (h"ch salar$ "s

understood as the &as"c (age, exclus"%e o# o%ert"me, lea%e pa$ and other &onusesN (hereas o%ert"me pa$ "s

compensat"on #or all (or) per#ormed "n excess o# the regular e"ght hours, and hol"da$ pa$ "s compensat"on #or an$

(or) per#ormed on des"gnated rest da$s and hol"da$s.

$ the #orego"ng de=n"t"on alone, there "s no &as"s #or the automat"c "nclus"on o# o%ert"me and hol"da$ pa$ "n

the computat"on o# pet"t"oners monetar$ a(ard, unless there "s e%"dence that he per#ormed (or) dur"ng those

per"ods. As the Bourt held "n Centennial Transmarine, Inc. v. ela Cr"z,C5

Fo(e%er, the pa$ment o# o%ert"me pa$ and lea%e pa$ should &e d"sallo(ed "n l"ght o# our rul"ng "n Bagampan%. +at"onal La&or Relat"ons Bomm"ss"on, to ("t:

The rend"t"on o# o%ert"me (or) and the su&m"ss"on o# suDc"ent proo# that sa"d (as actuall$ per#ormed are

cond"t"ons to &e sat"s=ed &e#ore a seaman could &e ent"tled to o%ert"me pa$ (h"ch should &e computed on the &as"so# C0> o# the &as"c monthl$ salar$. n short, the contract pro%"s"on guarantees the r"ght to o%ert"me pa$ &ut theent"tlement to such &ene=t must =rst &e esta&l"shed.

n the same %e"n, the cla"m #or the da$s lea%e pa$ #or the unexp"red port"on o# the contract "s un(arranted s"nce thesame "s g"%en dur"ng the actual ser%"ce o# the seamen.

(


18/41

Republic of the Philippines

SUPREME COURT

Manila

EN BANC

G.R. No. 120319 October 6, 1995

LUZON DEVELOPMENT !N", petitioner,

vs.

!SSOC#!T#ON O$ LUZON DEVELOPMENT !N" EMPLO%EES &'( !TT%. ESTER S. G!RC#! )' *er c&+&c)t &-

VOLUNT!R% !R#TR!TOR, respondents.

ROMERO, J.:

From a submission agreement of the u!on "evelopment Ban# $"B% and the Association of u!on "evelopment Ban#Emplo&ees $A"BE% arose an arbitration case to resolve the follo'ing issue(

)hether or not the compan& has violated the Collective Bargaining Agreement provision and the

Memorandum of Agreement dated April *++, on promotion.

At a conference, the parties agreed on the submission of their respective Position Papers on "ecember *-*, *++. Att&.

Ester /. 0arcia, in her capacit& as 1oluntar& Arbitrator, received A"BE2s Position Paper on 3anuar& *4, *++. "B, on

the other hand, failed to submit its Position Paper despite a letter from the 1oluntar& Arbitrator reminding them to do so.

As of Ma& 56, *++ no Position Paper had been filed b& "B.

7n Ma& 5, *++, 'ithout "B2s Position Paper, the 1oluntar& Arbitrator rendered a decision disposing as follo's(


19/41

)8EREF7RE, finding is hereb& made that the Ban# has not adhered to the Collective Bargaining

Agreement provision nor the Memorandum of Agreement on promotion.

8ence, this petition for certiorari

and prohibition see#ing to set aside the decision of the 1oluntar& Arbitrator and to prohibit

her from enforcing the same.

9n labor la' conte:t, arbitration is the reference of a labor dispute to an impartial third person for determination on the

basis of evidence and arguments presented b& such parties 'ho have bound themselves to accept the decision of the

arbitrator as final and binding.

Arbitration ma& be classified, on the basis of the obligation on 'hich it is based, as either compulsor& or voluntar&.

Compulsor& arbitration is a s&stem 'hereb& the parties to a dispute are compelled b& the government to forego their right

to stri#e and are compelled to accept the resolution of their dispute through arbitration b& a third part&. 1;he essence of

arbitration remains since a resolution of a dispute is arrived at b& resort to a disinterested third part& 'hose decision is

final and binding on the parties, but in compulsor& arbitration, such a third part& is normall& appointed b& the government.

* of the abor Code accordingl& provides for e:clusive original ?urisdiction of such

voluntar& arbitrator or panel of arbitrators over $*% the interpretation or implementation of the CBA and $5% the

interpretation or enforcement of compan& personnel policies. Article 5>5 authori!es them, but onl& upon agreement of theparties, to e:ercise ?urisdiction over other labor disputes.

7n the other hand, a labor arbiter under Article 5*@ of the abor Code has ?urisdiction over the follo'ing enumerated

cases(

. . . $a% E:cept as other'ise provided under this Code the abor Arbiters shall have original and e:clusive

?urisdiction to hear and decide, 'ithin thirt& $6% calendar da&s after the submission of the case b& the

parties for decision 'ithout e:tension, even in the absence of stenographic notes, the follo'ing cases

involving all 'or#ers, 'hether agricultural or non-agricultural(

*. of this Code, including =uestions involving the legalit& of

stri#es and loc#outs

>. E:cept claims for Emplo&ees Compensation, /ocial /ecurit&, Medicare and maternit& benefits, all other

claims, arising from emplo&er-emplo&ee relations, including those of persons in domestic or household

service, involving an amount e:ceeding five thousand pesos $P,.% regardless of 'hether

accompanied 'ith a claim for reinstatement.

::: ::: :::

9t 'ill thus be noted that the ?urisdiction conferred b& la' on a voluntar& arbitrator or a panel of such arbitrators is =uite

limited compared to the original ?urisdiction of the labor arbiter and the appellate ?urisdiction of the National abor

Relations Commission $NRC% for that matter.;he state of our present la' relating to voluntar& arbitration provides that

$t%he a'ard or decision of the 1oluntar& Arbitrator . . . shall be final and e:ecutor& after ten $*% calendar da&s fromreceipt of the cop& of the a'ard or decision b& the parties, 5'hile the $d%ecision, a'ards, or orders of the abor Arbiter


20/41

are final and e:ecutor& unless appealed to the Commission b& an& or both parties 'ithin ten $*% calendar da&s from

receipt of such decisions, a'ards, or orders. 68ence, 'hile there is an e:press mode of appeal from the decision of a

labor arbiter, Republic Act No. >@* is silent 'ith respect to an appeal from the decision of a voluntar& arbitrator.

Det, past practice sho's that a decision or a'ard of a voluntar& arbitrator is, more often than not, elevated to the /upreme

Court itself on a petition for certiorari,/in effect e=uating the voluntar& arbitrator 'ith the NRC or the Court of Appeals. 9n

the vie' of the Court, this is illogical and imposes an unnecessar& burden upon it.

9n Volkschel Labor Union, et al. v

. NLRC, et al

.,

on the settled premise that the ?udgments of courts and a'ards of =uasi-?udicial agencies must become final at some definite time, this Court ruled that the a'ards of voluntar& arbitrators

determine the rights of parties hence, their decisions have the same legal effect as ?udgments of a court. 9n Oceanic Bic

Division (FFW),et al. v. Romero,et al

.,9this Court ruled that a voluntar& arbitrator b& the nature of her functions acts in a

=uasi-?udicial capacit&.


21/41

'hich the arbitration is held, shall have ?urisdiction. A part& to the controvers& ma&, at an& time 'ithin one $*% month after

an a'ard is made, appl& to the court having ?urisdiction for an order confirming the a'ard and the court must grant such

order unless the a'ard is vacated, modified or corrected.19

9n effect, this e=uates the a'ard or decision of the voluntar& arbitrator 'ith that of the regional trial court. Conse=uentl&, in

a petition for certiorari

from that a'ard or decision, the Court of Appeals must be deemed to have concurrent ?urisdiction

'ith the /upreme Court. As a matter of polic&, this Court shall henceforth remand to the Court of Appeals petitions of this

nature for proper disposition.

ACC7R"9N0D, the Court resolved to REFER this case to the Court of Appeals.

/7 7R"ERE".

!RT G?+

A+TE . E LA BR*, -.R. +o. 320C

Pet"t"oner,

Present:P*+?, B.1., Bha"rperson,

BARP?,

% e r s u s B?R?+A,

AB*+AS and

LE?+AR?E BATR?, 11.

MAER/ !LP+A BRE@+-,

+B. and ELTE FPP+- A..,

Respondents. Promulgated:

Apr"l 4, 200

x x


22/41

E B ? +

B?R?+A, 1.:

Th"s pet"t"on #or re%"e( on cert"orar"5 see)s to set as"de the +o%em&er 2H, 2004 dec"s"on25 and March 9,

200H resolut"onC5 o# the Bourt o# Appeals 6BA7 "n BA-.R. P +o. 34093.

Respondent El"te h"pp"ng A.. h"red pet"t"oner ante . de la Bru< as th"rd eng"neer #or the %essel MI

Ar)t"s Morn"ng through "ts local agenc$ "n the Ph"l"pp"nes, corespondent Maers) !"l"p"nas Bre("ng nc. Thecontract o# emplo$ment (as #or a per"od o# n"ne months, start"ng Apr"l 9, 999, ("th a monthl$ &as"c

salar$ o# *,004.00 plus other &ene=ts.

Pet"t"oner (as deplo$ed to 1e&el Al", *n"ted Ara& Em"rates and &oarded MI Ar)t"s Morn"ng on Ma$ 4,

999.

n a log&oo) entr$ dated 1une , 999, ch"e# eng"neer +ormann Per +"elsen expressed h"s d"ssat"s#act"on

o%er pet"t"oners per#ormance:

Crd Eng. ante . de la Bru< has,5 s"nce he s"gned on,5 not &een a&le to l"%e up to the compan$s M ;o&

descr"&t"on 6s"c7 #or Crd Eng"neer.5 Toda$ he has &een "n#ormed that "# he does5 not "mpro%e h"s1o&I@or)"ng per#ormance ("th"n a5 short t"me he ("ll &e s"gned o accord"ng to BA Art"cle 637.

a"d Art"cle 637 o# the collect"%e &arga"n"ng agreement 6BA7 &et(een respondent El"te h"pp"ng A.. and

"ts emplo$ees reads:

637 The =rst s"xt$ 6H07 da$s o# ser%"ce "s to &e cons"dered a pro&at"onar$ per"od (h"ch ent"tles a sh"po(ner

or h"s representat"%e, ".e.,5 the master o# the %essel,5 to term"nate the contract &$ g"%"ng #ourteen 647

da$s o# (r"tten not"ce.

Th"s entr$ (as #ollo(ed &$ another one dated 1une 2H, 999 (h"ch (as s"m"lar "n content.

?n 1une 23, 999, pet"t"oner (as "n#ormed o# h"s d"scharge through a not"ce capt"oned +ot"ce accord"ng to

BA Art"cle 637, to ("t:

To: Crd eng"neer ante . de la Bru,. $


28/41

7n April *>, *++@, respondents filed 'ith the abor Arbiter a complaint for pa&ment of their monetar& benefits againstpetitioner and its president, Augusto Pardo, doc#eted as NRC NCR Case No. -545-+@.

9n due course, the abor Arbiter rendered a "ecision dated Februar& *4, *++4, the dispositive portion of 'hich reads(

)8EREF7RE, decision is hereb& rendered ordering the respondents, /pecial /teel Products, 9nc. and Mr.Augusto Pardo to pa&, ?ointl& and severall&, complainants Frederic# 0. /o and utgardo C. 1illareal the amountsof /event& 7ne ;housand ;'o 8undred /event& Nine Pesos and Fift& Eight Centavos $P@*,5@+.4% and 7ne8undred /i:t& Four ;housand Eight 8undred /event& ;hree Pesos $P*>,4@6.%, respectivel&, representing

their commissions, retirement benefit $for 1illareal%, proportionate *6th

month, earned vacation and sic# leavebenefits, and attorne&s fees.

: : :

/7 7R"ERE".

7n appeal, the National abor Relations Commission $NRC%, in a "ecision dated 3une 5+, *++4, affirmed 'ithmodification the Arbiters "ecision in the sense that Pardo, petitioners president, 'as e:empted from an& liabilit&.

7n /eptember **, *++4, petitioner filed a motion for reconsideration but 'as denied.

8ence, petitioner filed 'ith the Court of Appeals a petition for certiorari.

7n 7ctober 5+, *+++, the Court of Appeals rendered a "ecision dismissing the petition and affirming the assailed NRC"ecision, thus(

At the outset, the Court notes that despite its /eventh Assignment of Error, petitioner does not =uestion theNRCs decision affirming the labor arbiters a'ard to private respondents of commissions, proportionate*6thmonth pa&, earned vacation and sic# leave benefits and retirement benefit $for 1illareal%. 9t merel& asserts thatit 'as 'ithholding private respondents claims b& reason of their pending obligations.

Petitioner ?ustifies its 'ithholding of 1illareals monetar& benefits as a lien for the protection of its right as suret& inthe car loan. 9t asserts that it 'ould release 1illareals monetar& benefits if he 'ould cause its substitution assuret& b& 8i-0rade. 9t further asserts that since 1illareals debt to the Ban# is no' due and demandable, it ma&,

pursuant to Art. 5@* of the Ne' Civil Code, J$eman$ a securit& that shall rotect him rom an& rocee$in% b& thecre$itor an$ rom the $an%er o insolvenc& o the $ebtor.

Petitioners posture is not sanctioned b& la'. 9t ma& onl& protect its right as suret& b& instituting an J action - - - to$eman$ a securit& $.uen/le an$ trei vs 0an unco, *> Phil >@%. 9t ma& not ta#e the la' into its o'n hands.9ndeed, it is Junla1ul or an& erson, $irectl& or in$irectl&, to 1ithhol$ an& amount rom the 1a%es o a 1orker orin$uce him to %ive u an& art o his 1a%es b& orce, stealth, intimi$ation, threat or b& an& other means1hatsoever 1ithout the 1orker2s consent $Art. **>, abor Code%.

Moreover, petitioner has made no pa&ment on the car loan. Conse=uentl&, 1illareal is not indebted to petitioner.7n the other hand, petitioner o'es 1illareal for the decreed monetar& benefits. ;he 'ithholding of 1illarealsmonetar& benefits had effectivel& prevented him from settling his arrearages 'ith the Ban#.

)ith regard to /os mone& claims. )e find no cogent reason to disturb the findings of the NRC. : : :.

/os all-e:pense paid trip to Austria 'as a bonus for his outstanding sales performance. Before his so?ourn toAustria, petitioner issued him a memorandum $or Jmemo% stating that JBohler is no' imposing that traineescoming to Hapfenberg to sta& 'ith the local representative for at least three $6% &ears after training, other'ise, alump sum compensation of not less than ,. 'ill have to be refunded to them b& the trainee. /o did notaffi: his signature on the memo. 8o'ever, nine $+% months after coming bac# from his training, he 'as made tosign the memo. 9n his letter to Augusto Pardo dated 3ul& *4, *++@, /o stated that his signature 'as needed onl&as a formalit& and that he 'as left 'ith no choice but to accommodate Augusto Pardos re=uest. ;he labor arbitergave credence to such e:planation.

Assuming arguendo that the memo is binding on /o, his more than t'o &ears post-training sta& 'ith petitioner is asubstantial compliance 'ith the condition. Besides, /o tendered his resignation effective Februar& *>, *[email protected] of as#ing /o to defer his resignation until the e:piration of the three-&ear period, petitioner advanced itseffectivit& b& one month - as of 3anuar& *>, *++@. ;his means that petitioner no longer needed /os services,particularl& the s#ill and e:pertise ac=uired b& him from the training. More importantl&, the part& entitled to claimthe ,. li=uidated damages is B78ER and not petitioner. Conse=uentl&, petitioner has no right toinsist on pa&ment of the li=uidated damages, much less to 'ithhold /os monetar& benefits in order to e:actpa&ment thereof.

)ith regard to the Christmas givea'a&s. )e agree 'ith the findings of the labor arbiter $affirmed b& the NRC%Jthat there is no e:isting memorandum re=uiring the accounting of such givea'a&s and that no actual accountinghas ever been re=uired before, as in the case of then /ales Manager Benito /a&o 'hose resignation too# effecton "ecember 6*, *++> but 'as not re=uired to account for the Christmas givea'a&s. ;o ma#e /o account no' forsaid items 'ould amount to discrimination. 9n an& event, the matter of accounting of the givea'a&s ma& beventilated in the proper forum.


29/41

Finall&, +et)t)o'er & 'ot o77-et )t- c&)- &8&)'-t +r)&te re-+o'(e't-: o'et&r be'e7)t-. )ith respect toits being the suret& of 1illareal, t'o re=uisites of compensation are lac#ing, to 'it( J that each one o the obli%orsbe boun$ rinciall&, an$ that he be at the same time a rincial cre$itor o the other and Jthat (the t1o $ebts) beli!ui$ate$ an$ $eman$able $Art. *5@+ $*% and $%, Ne' Civil Code%. And in respect to its claim for li=uidateddamages against /o, there can be no compensation because his J cre$itor is not petitioner but B78ER $Art.*5@4, Ne' Civil Code%.

Conse=uentl&, the NRC committed no grave abuse of discretion.

)8EREF7RE, the petition is "9/M9//E" 'hile the assailed decision of the NRC is AFF9RME".

/7 7R"ERE".

7n "ecember *, *+++, petitioner filed a motion for reconsideration but 'as denied b& the Appellate Court in a Resolutiondated Ma& 4, 5.

8ence, this petition for revie' on certiorari. Petitioner contends that as a guarantor, it could legall& 'ithhold respondent1illareals monetar& benefits as a preliminar& remed& pursuant to Article 5@* of the Civil Code, as amended. As torespondent /o, petitioner, citing Article **6 of the abor Code, as amended, in relation to Article *@> of the Civil Code,as amended,>maintains that it could 'ithhold his monetar& benefits being authori!ed b& the memorandum he signed.

Article **> of the abor Code, as amended, provides(

AR;. **>. Withhol$in% o 1a%es an$ kickbacks rohibite$K #t -*& be '&;7 7or &' +er-o', ()rect or)'()rect, to ;)t**o( &' &o't 7ro t*e ;&8e- eror induce him to give up an&part of his 'ages b& force, stealth, intimidation, threat or b& an& other means 'hatsoever ;)t*ot t*e ;or>er:-co'-e't.

;he above provision is clear and needs no further elucidation. 9ndeed, petitioner has no legal authorit& to 'ithholdrespondents *6thmonth pa& and other benefits. )hat an emplo&ee has 'or#ed for, his emplo&er must pa&.@;hus, anemplo&er cannot simpl& refuse to pa& the 'ages or benefits of its emplo&ee because he has either defaulted in pa&ing aloan guaranteed b& his emplo&er or violated their memorandum of agreement or failed to render an accounting of hisemplo&ers propert&.4

Nonetheless, petitioner, rel&ing on Article 5@* $earlier cited%, contends that the right to demand securit& and obtainrelease from the guarant& it e:ecuted in favor of respondent 1illareal ma& be e:ercised even 'ithout initiating a separateand distinct action.

;here is no guarant& involved herein and, therefore, the provision of Article 5@* does not appl&.

A guarant& is distinguished from a suret& in that a guarantor is the insurer of the solvenc& of the debtor and thus bindshimself to pa& if the principal is unable to pa&, 'hile a -ret )- t*e )'-rer o7 t*e (ebt, &'( *e ob)8&te- *)-e7 to+& )7 t*e +r)'c)+& (oe- 'ot +&.+

Based on the above distinction, it appears that the contract e:ecuted b& petitioner and respondent 1illareal $in favor of theBan# of Commerce% is a contract of suret&. 9n fact, it is denominated as a continuing suret&ship agreement. 8ence,petitioner could not ?ust unilaterall& 'ithhold respondents 'ages or benefits as a preliminar& remed& under Article 5@*. 9t

must file an action against respondent 1illareal. ;hus, the Appellate Court aptl& ruled that petitioner ma& onl& protect itsright as suret& b& instituting an Jaction to $eman$ a securit&.

As to respondent /o, petitioner maintains that there can be a set-off or legal compensation bet'een them. Conse=uentl&,it can 'ithhold his *6thmonth pa& and other benefits.

For legal compensation to ta#e place, the re=uirements set forth in Articles *5@4 and *5@+ of the Civil Code, =uotedbelo', must be present.

AR;9CE *5@4. Compensation shall ta#e place 'hen t'o persons, in their o'n right, are creditors and debtors ofeach other.

AR;9CE *5@+. 9n order that compensation ma& be proper, it is necessar&(

$*% ;hat each one of the obligors be bound principall&, and that he be at the same time a principal creditor of theother

$5% ;hat both debts consist in a sum of mone&, or if the things due are consumable, the& be of the same #ind, andalso of the same =ualit& if the latter has been stated

$6% ;hat the t'o debts be due

$% ;hat the& be li=uidated and demandable

$% ;hat over neither of them there be an& retention or controvers&, commenced b& third persons andcommunicated in due time to the debtor.
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9n the present case, set-off or legal compensation cannot ta#e place bet'een petitioner and respondent /o because the&are not mutuall& creditor and debtor of each other.

A careful reading of the Memorandum*dated August 55, *++ reveals that the lump sum compensation of not less than,. 'ill have to be refunded b& each trainee to B78ER, not to petitioner.

9n fine, 'e rule that petitioner has no legal right to 'ithhold respondents *6 thmonth pa& and other benefits to recompensefor 'hatever amount it paid as securit& for respondent 1illareals car loan and for the e:penses incurred b& respondent/o in his training abroad.

?@ERE$ORE, the petition is "EN9E". ;he "ecision dated 7ctober 5+, *+++ and Resolution dated Ma& 4, 5 of theCourt of Appeals in CA-0.R. /P No. +@ are hereb& AFF9RME".

SO ORDERED.

Republic of the Philippines

SUPREME COURT

Manila

F9R/; "919/97N

G.R. No. 16//2 'e , 2006

EAU#T!LE !N"#NG CORPOR!T#ON of 5 /eptember *++* reversed the abor Arbiter and declared respondent /adacs

dismissal as illegal. ;he decretal portion thereof reads, thus(

)8EREF7RE, in vie' of all the foregoing considerations, let the "ecision of 7ctober 5, *++ be, as it is hereb&, /E;

A/9"E, and a ne' one EN;ERE" declaring the dismissal of the complainant as illegal, and conse=uentl& ordering the

respondents ?ointl& and severall& to reinstate him to his former position as ban# 1ice-President and 0eneral Counsel

'ithout loss of seniorit& rights and other privileges, and to pa& him full bac#'ages and other benefits from the time his

compensation 'as 'ithheld to his actual reinstatement, as 'ell as moral damages of P*,., e:emplar& damages

of P,., and attorne&s fees e=uivalent to ;en Percent $*L% of the monetar& a'ard. /hould reinstatement be no

longer possible due to strained relations, the respondents are ordered li#e'ise ?ointl& and severall& to grant separation

pa& at one $*% month per &ear of service in the total sum of P5+6,>. 'ith bac#'ages and other benefits from

November *>, *+4+ to /eptember *, *++* $cut off date, sub?ect to ad?ustment% computed at P*,,@.4, plus

damages of P*,. $moral damages%, P,. $e:emplar& damages% and attorne&s fees e=ual to ;en Percent

$*L% of all the monetar& a'ard, or a grand total of P*,>+,65+.6.@
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Petitioner Ban# came to us for the first time via a /pecial Civil Action for Certiorari assailing the NRC Resolution of 5

/eptember *++* in E=uitable Ban#ing Corporation v. National abor Relations Commission, doc#eted as 0.R. No.

*5>@.4

9n our "ecision+ of *6 3une *++@, 'e held respondent /adacs dismissal illegal. )e said that the e:istence of the

emplo&er-emplo&ee relationship bet'een petitioner Ban# and respondent /adac had been dul& established bringing the

case 'ithin the coverage of the abor Code, hence, 'e did not permit petitioner Ban# to rel& on /ec. 5>, Rule *64 *of the

Rules of Court, claiming that the association bet'een the parties 'as one of a client-la'&er relationship, and, thus, it

could terminate at an& time the services of respondent /adac. Moreover, 'e did not find that respondent /adacsdismissal 'as grounded on an& of the causes stated in Article 545 of the abor Code. )e similarl& found that petitioner

Ban# disregarded the procedural re=uirements in terminating respondent /adacs emplo&ment as so re=uired b& /ection

5 and /ection , Rule 91, Boo# 1 of the 9mplementing Rules of the abor Code. )e decreed(

)8EREF7RE, the herein =uestioned Resolution of the NRC is AFF9RME" 'ith the follo'ing M7"9F9CA;97N/( ;hat

private respondent shall be entitled to bac#'ages from termination of emplo&ment until turning si:t& $>% &ears of age $in

*++% and, thereupon, to retirement benefits in accordance 'ith la' that private respondent shall be paid an additional

amount of P,. that the a'ard of moral and e:emplar& damages are deleted and that the liabilit& herein

pronounced shall be due from petitioner ban# alone, the other petitioners being absolved from solidar& liabilit&. No costs.**

7n 54 3ul& *++@, our "ecision in 0.R. No. *5>@ dated *6 3une *++@ became final and e:ecutor&.*5

Pursuant thereto, respondent /adac filed 'ith the abor Arbiter a Motion for E:ecution*6thereof. i#e'ise, petitioner Ban#

filed a Manifestation and Motion*pra&ing that the a'ard in favor of respondent /adac be computed and that after

pa&ment is made, petitioner Ban# be ordered forever released from liabilit& under said ?udgment.

Per respondent /adacs computation, the total amount of the monetar& a'ard is P>,6,>.+, representing his

bac#'ages and other benefits, including the general increases 'hich he should have earned during the period of his

illegal termination. Respondent /adac theori!ed that he started 'ith a monthl& compensation of P*5,. in August

*+4*, 'hen he 'as appointed as 1ice President of petitioner Ban#s egal "epartment and later as its 0eneral Counsel in

"ecember *+4*. As of November *+4+, 'hen he 'as dismissed illegall&, his monthl& compensation amounted to

P5+,6>. or more than t'ice his original compensation. ;he difference, he posited, can be attributed to the annual

salar& increases 'hich he received e=uivalent to * percent $*L% of his monthl& salar&.

Respondent /adac anchored his claim on Article 5@+ of the abor Code of the Philippines, and cited as authorit& the

cases of East Asiatic Compan&, td. v. Court of 9ndustrial Relations,*/t. ouis College of ;uguegarao v. National abor

Relations Commission,*>and /igma Personnel /ervices v. National abor Relations Commission.*@According to

respondent /adac, the catena of cases uniforml& holds that it is the obligation of the emplo&er to pa& an illegall&

dismissed emplo&ee the 'hole amount of the salaries or 'ages, plus all other benefits and bonuses and general

increases to 'hich he 'ould have been normall& entitled had he not been dismissed and therefore, salar& increases

should be deemed a component in the computation of bac#'ages. Moreover, respondent /adac contended that his

chec#-up benefit, clothing allo'ance, and cash conversion of vacation leaves must be included in the computation of his

bac#'ages.

Petitioner Ban# disputed respondent /adacs computation. Per its computation, the amount of monetar& a'ard due

respondent /adac is P5,+4*,5.+4 onl&, to the e:clusion of the latters general salar& increases and other claimed

benefits 'hich, it maintained, 'ere unsubstantiated. ;he ?urisprudential precedent relied upon b& petitioner Ban# in

assailing respondent /adacs computation is Evangelista v. National abor Relations Commission, *4citing Paramount

1in&l Products Corp. v. National abor Relations Commission, *+holding that an un=ualified a'ard of bac#'ages means

that the emplo&ee is paid at the 'age rate at the time of his dismissal. Furthermore, petitioner Ban# argued before the

abor Arbiter that the a'ard of salar& differentials is not allo'ed, the established rule being that upon reinstatement,

illegall& dismissed emplo&ees are to be paid their bac#'ages 'ithout deduction and =ualification as to an& 'age

increases or other benefits that ma& have been received b& their co-'or#ers 'ho 'ere not dismissed or did not go on

stri#e.

7n 5 August *+++, abor Arbiter 3ovencio l. Ma&or, 3r. rendered an 7rder5

adopting respondent /adacs computation. 9nthe main, the abor Arbiter rel&ing on Millares v. National abor Relations Commission5*concluded that respondent /adac

is entitled to the general increases as a component in the computation of his bac#'ages. Accordingl&, he a'arded

respondent /adac the amount of P>,6,>.+ representing his bac#'ages inclusive of allo'ances and other claimed

benefits, namel& chec#-up benefit, clothing allo'ance, and cash conversion of vacation leave plus *5 percent $*5L%

interest per annum e=uivalent to P*,6>@,+.4+ as of 6 3une *+++, or a total of P@,6+4,@.4. 8o'ever, considering

that respondent /adac had alread& received the amount of P*,,@.4 b& virtue of a )rit of E:ecution55earlier issued

on *4 3anuar& *+++, the abor Arbiter directed petitioner Ban# to pa& respondent /adac the amount of P>,65,6@..

;he abor Arbiter also granted an a'ard of attorne&s fees e=uivalent to ten percent $*L% of all monetar& a'ards, and

imposed a *5 percent $*5L% interest per annum rec#oned from the finalit& of the ?udgment until the satisfaction thereof.

;he abor Arbiter decreed, thus(
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)8EREF7RE, in vie' of al $sic% the foregoing, let an A9A/ )rit of E:ecution be issued commanding the /heriff, this

Branch, to collect from respondent Ban# the amount of Ph>,65,6@. representing the bac#'ages 'ith *5L interest per

annum due complainant.56

Petitioner Ban# interposed an appeal 'ith the NRC, 'hich reversed the abor Arbiter in a Resolution, 5promulgated on

54 March 5*. 9t ratiocinated that the doctrine on general increases as component in computing bac#'ages in /igma

Personnel /ervices and /t. ouis 'as merel& obiter dictum. ;he NRC found East Asiatic Co., td. inapplicable on the

ground that the original circumstances therein are not onl& peculiar to the said case but also completel& strange to the

case of respondent /adac. Further, the NRC disallo'ed respondent /adacs claim to chec#-up benefit ratiocinating thatthere 'as no clear and substantial proof that the same 'as being granted and en?o&ed b& other emplo&ees of petitioner

Ban#. ;he a'ard of attorne&s fees 'as similarl& deleted.

;he dispositive portion of the Resolution states(

)8EREF7RE, the instant appeal is considered meritorious and accordin

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