Labor case Digest

Friday, May 2, 2014

PETITIONER Czarina T. Malvar filed a complaint for illegal suspension and illegal dismissal against

respondents Kraft Food Philippines, Inc. (KFPI) and/or Bienvenido

Bautista.

While her appeal was pending in the Supreme Court, she and respondents entered into a compromise

agreement, whereby she was paid P40,000,000 in addition to the P14,252,192.12 earlier paid to her.

She later filed a motion to dismiss/withdraw case but before it could be acted upon, a motion for

intervention to protect attorney’s rights was filed by the law firm of Dasal, Llasos and Associates,

through its Of counsel, retired Supreme Court Associate Justice Josue N. Bellosillo. The motion sought,

among others, that both Malvar and KFPI be held and ordered to pay jointly and severally the

intervenor’s contingent fees.

In opposing the motion, Malvar claimed that the intervenor lacked the legal capacity to intervene

because it had ceased to exist after Atty. Marwil N. Llasos resigned from the intervenor and Atty.

Richard B. Dasal became barred from private practice upon his appointment to a position in a

government subsidiary. They both personally handled her case. Besides, their dismissal was based on

a justifiable cause. Does this contention find merit?

Supreme Court (First Division) ruling: No.

In the absence of the lawyer’s fault, consent or waiver, a client cannot deprive the lawyer of his just

fees already earned in the guise of a justifiable reason. Here, Malvar not only downplayed the worth of

the intervenor’s legal service to her but also attempted to camouflage her intent to defraud her lawyer

by offering excuses that were not only inconsistent with her actions but, most importantly, fell short of

being justifiable.

The letter Malvar addressed to Retired Justice Bellosillo, who represented the intervenor, debunked her

allegations of unsatisfactory legal service because she thereby lavishly lauded the intervenor for its

dedication and devotion to the prosecution of her case and to the protection of her interests. Also

significant was that the attorney-client relationship between her and the intervenor was not severed

upon Atty. Dasal’s appointment to public office and Atty. Llasos’ resignation from the law firm.

In other words, the intervenor remained as her counsel of record, for, as we held in Rilloraza, Africa, De

Ocampo and Africa v. Eastern Telecommunication Philippines, Inc., G.R. No. 104600, July 2, 1999, 309

SCRA 566, 574, a client who employs a law firm engages the entire law firm; hence, the resignation,

retirement or separation from the law firm of the handling lawyer does not terminate the relationship,

because the law firm is bound to provide a replacement.

The stipulations of the written agreement between Malvar and the intervenors, not being contrary to

law, morals, public policy, public order or good customs, were valid and binding on her. They expressly

gave rise to the right of the intervenor to demand compensation.

In a word, she could not simply walk away from her contractual obligations toward the Intervenor, for

Article 1159 of the Civil Code provides that obligations arising from contracts have the force of law

between the parties and should be complied with in good faith

THIRD DIVISION  BECMEN SERVICE EXPORTER                   G.R. Nos. 182978-79AND PROMOTION, INC.,                             Petitioner,                      Present:

                                                                                                    Ynares-Santiago, J.(Chairperson),          - versus -                                             Carpio Morales,*

  Chico-Nazario,  Nachura, and  Peralta, JJ.

SPOUSES SIMPLICIO and MILACUARESMA (for and in behalf oftheir daughter, Jasmin G. Cuaresma),WHITE FALCON SERVICES, INC.and JAIME ORTIZ (President,White Falcon Services, Inc.),                             Respondents. x ------------------------------------------------------ x SPOUSES SIMPLICIO and MILA                   G.R. Nos. 184298-99CUARESMA (for and in behalf oftheir daughter, Jasmin G. Cuaresma),                             Petitioners, 

- versus -                                                                                                            WHITE FALCON SERVICES, INC.      Promulgated:and BECMEN SERVICE EXPORTERAND PROMOTION, INC.,                                                  Respondents.                   April 7, 2009 x ---------------------------------------------------------------------------------------- x

 

DECISION 

YNARES-SANTIAGO, J.:  

These consolidated petitions assail the Amended Decision[1] of the Court of Appeals dated May 14, 2008 in CA-G.R. SP No. 80619 and CA-G.R. SP No. 81030 finding White Falcon Services, Inc. and Becmen Service Exporter and Promotion, Inc. solidarily liable to indemnify spouses Simplicio and Mila Cuaresma the amount of US$4,686.73 in actual damages with interest.

 On January 6, 1997, Jasmin Cuaresma (Jasmin) was deployed by Becmen

Service Exporter and Promotion, Inc.[2] (Becmen) to serve as assistant nurse in Al-Birk Hospital in the Kingdom of Saudi Arabia (KSA), for a contract duration of three years, with a corresponding salary of US$247.00 per month.

 Over a year later, she died allegedly of poisoning. Jessie Fajardo, a co-worker of Jasmin, narrated that on June 21, 1998,

Jasmin was found dead by a female cleaner lying on the floor inside her dormitory room with her mouth foaming and smelling of poison.[3]

 Based on the police report and the medical report of the examining physician

of the Al-Birk Hospital, who conducted an autopsy of Jasmin’s body, the likely cause of her death was poisoning.  Thus:

 According to letter No. 199, dated 27.2.1419H, issued by Al-Birk Police

Station, for examining the corpse of Jasmin Cuaresma, 12.20 P.M. 27.2.1419H, Sunday, at Al-Birk Hospital.

 1.  The Police Report on the Death2.  The Medical Diagnosis Sex: Female     Age: 25 years  Relg: Christian The said person was brought to the Emergency Room of the hospital; time 12.20 P.M. and she was unconscious, blue, no pulse, no respiration and the first aid esd undertaken but without success. 

3. Diagnosis and Opinion: Halt in blood circulation respiratory system and brain damage due to an apparent poisoning which is under investigation.[4]

 Name: Jasmin CuaresmaSex: FemaleMarital Status: Single                          Nationality: Philipino (sic)Religion: Christian                              Profession: NurseAddress: Al-Birk Genrl. Hospital       Birth Place: The Philippines On 27.2.1419H, Dr. Tariq Abdulminnem and Dr. Ashoki Komar, both have examined the dead body of Jasmin Cuaresma, at 12.20 P.M., Sunday, 22.2.14189H, and the result was: 1.  Report of the Police on the death2. Medical Examination: Blue skin and paleness on the Extrimes (sic), total halt to blood circulation and respiratory system and brain damage. There were no external injuries. Likelypoisoning by taking poisonous substance, yet not determined. There was a bad smell in the mouth and unknown to us.[5] (Emphasis supplied)

 Jasmin’s body was repatriated to Manila on September 3, 1998.  The

following day, the City Health Officer of Cabanatuan City conducted an autopsy and the resulting medical report indicated that Jasmin died under violent circumstances, and not poisoning as originally found by the KSA examining physician.  The City Health Officer found that Jasmin had abrasions at her inner lip and gums; lacerated wounds and abrasions on her left and right ears; lacerated wounds and hematoma (contusions) on her elbows; abrasions and hematoma on her thigh and legs; intra-muscular hemorrhage at the anterior chest; rib fracture; puncture wounds; and abrasions on the labia minora of the vaginal area.[6]

 On March 11, 1999, Jasmin’s remains were exhumed and examined by the

National Bureau of Investigation (NBI).  The toxicology report of the NBI, however, tested negative for non-volatile, metallic poison and insecticides.[7]

 Simplicio and Mila Cuaresma (the Cuaresmas), Jasmin’s parents and her

surviving heirs, received from the Overseas Workers Welfare Administration (OWWA) the following amounts: P50,000.00 for death benefits; P50,000.00 for loss of life; P20,000.00 for funeral expenses; and P10,000.00 for medical reimbursement.

 On November 22, 1999, the Cuaresmas filed a complaint against Becmen

and its principal in the KSA, Rajab & Silsilah Company (Rajab), claiming death and insurance benefits, as well as moral and exemplary damages for Jasmin’s death.[8]

 In their complaint, the Cuaresmas claim that Jasmin’s death was work-

related, having occurred at the employer’s premises;[9] that under Jasmin’s contract with Becmen, she is entitled to “iqama insurance” coverage; that Jasmin is entitled to compensatory damages in the amount of US$103,740.00, which is the sum total of her monthly salary of US$247.00 per month under her employment contract, multiplied by 35 years (or the remaining years of her productive life had death not supervened at age 25, assuming that she lived and would have retired at age 60).

 The Cuaresmas assert that as a result of Jasmin’s death under mysterious

circumstances, they suffered sleepless nights and mental anguish. The situation, they claim, was aggravated by findings in the autopsy and exhumation reports which evidently show that a grave injustice has been committed against them and their daughter, for which those responsible should likewise be made to pay moral and exemplary damages and attorney’s fees.

 In their position paper, Becmen and Rajab insist that Jasmin committed

suicide, citing a prior unsuccessful suicide attempt sometime in March or April 1998 and relying on the medical report of the examining physician of the Al-Birk Hospital.  They likewise deny liability because the Cuaresmas already recovered death and other benefits totaling P130,000.00 from the OWWA.  They insist that the Cuaresmas are not entitled to “iqama insurance” because this refers to the “issuance” – not insurance – of iqama, or residency/work permit required in the KSA.  On the issue of moral and exemplary damages, they claim that the Cuaresmas are not entitled to the same because they have not acted with fraud, nor have they been in bad faith in handling Jasmin’s case.

 While the case was pending, Becmen filed a manifestation and motion for

substitution alleging that Rajab terminated their agency relationship and had appointed White Falcon Services, Inc. (White Falcon) as its new recruitment agent in the Philippines.  Thus, White Falcon was impleaded as respondent as well, and it

adopted and reiterated Becmen’s arguments in the position paper it subsequently filed.

 On February 28, 2001, the Labor Arbiter rendered a Decision[10] dismissing

the complaint for lack of merit. Giving weight to the medical report of the Al-Birk Hospital finding that Jasmin died of poisoning, the Labor Arbiter concluded that Jasmin committed suicide.  In any case, Jasmin’s death was not service-connected, nor was it shown that it occurred while she was on duty; besides, her parents have received all corresponding benefits they were entitled to under the law.  In regard to damages, the Labor Arbiter found no legal basis to warrant a grant thereof.

 On appeal, the National Labor Relations Commission (Commission)

reversed the decision of the Labor Arbiter.  Relying on the findings of the City Health Officer of Cabanatuan City and the NBI as contained in their autopsy and toxicology report, respectively, the Commission, via its November 22, 2002 Resolution[11] declared that, based on substantial evidence adduced, Jasmin was the victim of compensable work-connected criminal aggression. It disregarded the Al-Birk Hospital attending physician’s report as well as the KSA police report, finding the same to be inconclusive.  It declared that Jasmin’s death was the result of an “accident” occurring within the employer’s premises that is attributable to her employment, or to the conditions under which she lived, and thus arose out of and in the course of her employment as nurse.  Thus, the Cuaresmas are entitled to actual damages in the form of Jasmin’s lost earnings, including future earnings, in the total amount of US$113,000.00.  The Commission, however, dismissed all other claims in the complaint.

 Becmen, Rajab and White Falcon moved for reconsideration, whereupon the

Commission issued its October 9, 2003 Resolution[12] reducing the award of US$113,000.00 as actual damages to US$80,000.00.[13] The NLRC likewise declared Becmen and White Falcon as solidarily liable for payment of the award.

 Becmen and White Falcon brought separate petitions for certiorari to the

Court of Appeals.[14]  On June 28, 2006, the appellate court rendered its Decision,[15] the dispositive portion of which reads, as follows:

 

WHEREFORE, the subject petitions are DENIED but in the execution of the decision, it should first be enforced against White Falcon Services and then against Becmen Services when it is already impossible, impractical and futile to go against it (White Falcon).

 SO ORDERED.[16]

 The appellate court affirmed the NLRC’s findings that Jasmin’s death was

compensable, the same having occurred at the dormitory, which was contractually provided by the employer.  Thus her death should be considered to have occurred within the employer’s premises, arising out of and in the course of her employment.

 Becmen and White Falcon moved for reconsideration.  On May 14, 2008,

the appellate court rendered the assailed Amended Decision, the dispositive portion of which reads, as follows:

 WHEREFORE, the motions for reconsideration are GRANTED.

Accordingly, the award of US$80,000.00 in actual damages is hereby reduced to US$4,686.73 plus interest at the legal rate computed from the time it became due until fully paid. Petitioners are hereby adjudged jointly and solidarily liable with the employer for the monetary awards with Becmen Service Exporter and Promotions, Inc. having a right of reimbursement from White Falcon Services, Inc.

 SO ORDERED.[17]

 In the Amended Decision, the Court of Appeals found that although

Jasmin’s death was compensable, however, there is no evidentiary basis to support an award of actual damages in the amount of US$80,000.00.  Nor may lost earnings be collected, because the same may be charged only against the perpetrator of the crime or quasi-delict.  Instead, the appellate court held that Jasmin’s beneficiaries should be entitled only to the sum equivalent of the remainder of her 36-month employment contract, or her monthly salary of US$247.00 multiplied by nineteen (19) months, with legal interest.

 Becmen filed the instant petition for review on certiorari (G.R. Nos. 182978-

79).  The Cuaresmas, on the other hand, moved for a reconsideration of the

amended decision, but it was denied.  They are now before us via G.R. Nos. 184298-99.

 On October 6, 2008, the Court resolved to consolidate G.R. Nos. 184298-99

with G.R. Nos. 182978-79. In G.R. Nos. 182978-79, Becmen raises the following issues for our

resolution: 

(THE COURT OF APPEALS) GRAVELY ERRED WHEN IT GAVE MORE CREDENCE AND WEIGHT TO THE AUTOPSY REPORT CONDUCTED BY THE CABANATUAN CITY HEALTH OFFICE THAN THE MEDICAL AND POLICE REPORTS ISSUED BY THE MINISTRY OF HEALTH OF KINGDOM OF SAUDI ARABIA AND AL-BIRK HOSPITAL.

 (THE COURT OF APPEALS) GRAVELY ERRED WHEN ON THE

BASIS OF THE POSITION PAPERS AND ANNEXES THERETO INCLUDING THE AUTOPSY REPORT, IT CONCLUDED THAT THE DEATH OF JASMIN CUARESMA WAS CAUSED BY CRIMINAL AGGRESSION.

 (THE COURT OF APPEALS) GRAVELY ERRED WHEN IT HELD

THAT THE DEATH OF JASMIN CUARESMA WAS COMPENSABLE PURSUANT TO THE RULING OF THE SUPREME COURT IN TALLER VS. YNCHAUSTI, G.R. NO. 35741, DECEMBER 20, 1932, WHICH IT FOUND TO BE STILL GOOD LAW.

 (THE COURT OF APPEALS) GRAVELY ERRED WHEN IT HELD

BECMEN LIABLE FOR THE DEATH OF JASMIN CUARESMA NOTWITHSTANDING ITS ADMISSIONS THAT “IQAMA INSURANCE” WAS A TYPOGRAPHICAL ERROR SINCE “IQAMA” IS NOT AN INSURANCE.

 (THE COURT OF APPEALS) GRAVELY ERRED WHEN IT

CONCLUDED THAT THE DEATH OF JASMIN WAS WORK RELATED. (THE COURT OF APPEALS) GRAVELY ERRED WHEN IT HELD

BECMEN LIABLE TO JASMIN’S BENEFICIARIES FOR THE REMAINDER OF HER 36-MONTH CONTRACT COMPUTED IN THIS MANNER: MONTHLY SALARY OF US$246.67 MULTIPLIED BY 19 MONTHS, THE REMAINDER OF THE TERM OF JASMIN’S EMPLOYMENT CONTRACT, IS EQUAL TO US$4,686.73.

 

(THE COURT OF APPEALS) GRAVELY ERRED WHEN IT HELD BECMEN LIABLE TO PAY INTEREST AT THE LEGAL RATE FROM THE TIME IT WAS DUE UNTIL FULLY PAID.

 (THE COURT OF APPEALS) GRAVELY ERRED WHEN IT HELD

BECMEN AND WHITE FALCON JOINTLY AND SEVERALLY LIABLE WITH THE EMPLOYER NOTWITHSTANDING THE ASSUMPTION OF LIABILITY EXECUTED BY WHITE FALCON IN FAVOR OF BECMEN.

 On the other hand, in G.R. Nos. 184298-99, the Cuaresmas raise the

following issues: 

(THE COURT OF APPEALS) GRAVELY ERRED IN APPLYING THE PROVISIONS OF THE CIVIL CODE CONSIDERED GENERAL LAW DESPITE THE CASE BEING COVERED BY E.O. 247, R.A. 8042 AND LABOR CODE CONSIDERED AS SPECIAL LAWS.

 (THE COURT OF APPEALS) GRAVELY ERRED IN NOT APPLYING

THE DECEASED’S FUTURE EARNINGS WHICH IS (AN) INHERENT FACTOR IN THE COMPUTATION OF DEATH BENEFITS OF OVERSEAS FILIPINO CONTRACT WORKERS.

 (THE COURT OF APPEALS) GRAVELY ERRED IN REDUCING THE

DEATH BENEFITS AWARDED BY NLRC CONSIDERED FINDINGS OF FACT THAT CANNOT BE DISTURBED THROUGH CERTIORARI UNDER RULE 65 OF THE RULES OF COURT.

 The issue for resolution is whether the Cuaresmas are entitled to monetary

claims, by way of benefits and damages, for the death of their daughter Jasmin. The terms and conditions of Jasmin’s 1996 Employment Agreement which

she and her employer Rajab freely entered into constitute the law between them.  As a rule, stipulations in an employment contract not contrary to statutes, public policy, public order or morals have the force of law between the contracting parties.[18]  An examination of said employment agreement shows that it provides for no other monetary or other benefits/privileges than the following:

 1.                  1,300 rials (or US$247.00) monthly salary; 2.                  Free air tickets to KSA at the start of her contract and to the Philippines

at the end thereof, as well as for her vacation at the end of each twenty four-month service;

 3.                  Transportation to and from work; 4.                  Free living accommodations; 5.                  Free medical treatment, except for optical and dental operations, plastic

surgery charges and lenses, and medical treatment obtained outside of KSA;

 6.                  Entry visa fees will be shared equally between her and her employer, but

the exit/re-entry visa fees, fees for Iqama issuance, renewal, replacement, passport renewal, sponsorship transfer and other liabilities shall be borne by her;

 7.                  Thirty days paid vacation leave with round trip tickets to Manila after

twenty four-months of continuous service; 8.                  Eight days public holidays per year; 9.                  The indemnity benefit due her at the end of her service will be calculated

as per labor laws of KSA.

 Thus, the agreement does not include provisions for insurance, or for

accident, death or other benefits that the Cuaresmas seek to recover, and which the labor tribunals and appellate court granted variably in the guise of compensatory damages.

 However, the absence of provisions for social security and other benefits

does not make Jasmin’s employment contract infirm.  Under KSA law, her foreign employer is not obliged to provide her these benefits; and neither is Jasmin entitled to minimum wage – unless of course the KSA labor laws have been amended to the opposite effect, or that a bilateral wage agreement has been entered into.  

 Our next inquiry is, should Jasmin’s death be considered as work-connected

and thus compensable?  The evidence indicates that it is not. At the time of her death, she was not on duty, or else evidence to the contrary would have been adduced.  Neither was she within hospital premises at the time. Instead, she was at her dormitory room on personal time when she died.  Neither has it been shown, nor does the evidence suggest, that at the time she died, Jasmin was performing an act reasonably necessary or incidental to her employment as nurse, because she

was at her dormitory room.  It is reasonable to suppose that all her work is performed at the Al-birk Hospital, and not at her dormitory room.

 We cannot expect that the foreign employer should ensure her safety even

while she is not on duty.  It is not fair to require employers to answer even for their employees’ personal time away from work, which the latter are free to spend of their own choosing.  Whether they choose to spend their free time in the pursuit of safe or perilous undertakings, in the company of friends or strangers, lovers or enemies, this is not one area which their employers should be made accountable for.  While we have emphasized the need to observe official work time strictly,[19] what an employee does on free time is beyond the employer’s sphere of inquiry.

 While the “employer’s premises” may be defined very broadly not only to

include premises owned by it, but also premises it leases, hires, supplies or uses,[20] we are not prepared to rule that the dormitory wherein Jasmin stayed should constitute employer’s premises as would allow a finding that death or injury therein is considered to have been incurred or sustained in the course of or arose out of her employment.  There are certainly exceptions,[21] but they do not appear to apply here.  Moreover, a complete determination would have to depend on the unique circumstances obtaining and the overall factual environment of the case, which are here lacking.

 But, did Jasmin commit suicide? Rajab, Becmen and White Falcon

vehemently insist that she did; thus, her heirs may not claim benefits or damages based on criminal aggression.  On the other hand, the Cuaresmas do not believe so.

 The Court cannot subscribe to the idea that Jasmin committed suicide while

halfway into her employment contract.  It is beyond human comprehension that a 25-year old Filipina, in the prime of her life and working abroad with a chance at making a decent living with a high-paying job which she could not find in her own country, would simply commit suicide for no compelling reason.

 The Saudi police and autopsy reports – which state that Jasmin is a likely/or

apparent victim of poisoning – are patently inconclusive.  They are thus unreliable as evidence.

 

On the contrary, the autopsy report of the Cabanatuan City Health Officer and the exhumation report of the NBI categorically and unqualifiedly show that Jasmin sustained external and internal injuries, specifically abrasions at her inner lip and gums; lacerated wounds and abrasions on her left and right ears; lacerated wounds and hematoma (contusions) on her elbows; abrasions and hematoma on her thigh and legs; intra-muscular hemorrhage at the anterior chest; a fractured rib; puncture wounds; and abrasions on the labia minora of the vaginal area. The NBI toxicology report came up negative on the presence of poison.

 All these show that Jasmin was manhandled – and possibly raped – prior to

her death. Even if we were to agree with the Saudi police and autopsy reports that

indicate Jasmin was poisoned to death, we do not believe that it was self-induced.  If ever Jasmin was poisoned, the assailants who beat her up – and possibly raped her – are certainly responsible therefor.

 We are not exactly ignorant of what goes on with our OFWs.  Nor is the rest

of the world blind to the realities of life being suffered by migrant workers in the hands of some foreign employers.  It is inconceivable that our Filipina women would seek employment abroad and face uncertainty in a foreign land, only to commit suicide for unexplained reasons.  Deciding to leave their family, loved ones, and the comfort and safety of home, to work in a strange land requires unrivaled strength and courage.  Indeed, many of our women OFWs who are unfortunate to end up with undesirable employers have been there more times than they care to, beaten up and broken in body – yet they have remained strong in mind, refusing to give up the will to live.  Raped, burned with cigarettes, kicked in the chest with sharp high-heeled shoes, starved for days or even weeks, stabbed, slaved with incessant work, locked in their rooms, forced to serve their masters naked, grossly debased, dehumanized and insulted, their spirits fought on and they lived for the day that they would once again be reunited with their families and loved ones.  Their bodies surrendered, but their will to survive remained strong.

 It is surprising, therefore, that Rajab, Becmen and White Falcon should

insist on suicide, without even lifting a finger to help solve the mystery of Jasmin’s

death.  Being in the business of sending OFWs to work abroad, Becmen and White Falcon should know what happens to some of our OFWs.  It is impossible for them to be completely unaware that cruelties and inhumanities are inflicted on OFWs who are unfortunate to be employed by vicious employers, or upon those who work in communities or environments where they are liable to become victims of crime.  By now they should know that our women OFWs do not readily succumb to the temptation of killing themselves even when assaulted, abused, starved, debased and, worst, raped.

 Indeed, what we have seen is Rajab and Becmen’s revolting scheme of

conveniently avoiding responsibility by clinging to the absurd theory that Jasmin took her own life. Abandoning their legal, moral and social obligation (as employer and recruiter) to assist Jasmin’s family in obtaining justice for her death, they immediately gave up on Jasmin’s case, which has remained under investigation as the autopsy and police reports themselves indicate.  Instead of taking the cudgels for Jasmin, who had no relative or representative in the KSA who would naturally demand and seek an investigation of her case, Rajab and Becmen chose to take the most convenient route to avoiding and denying liability, by casting Jasmin’s fate to oblivion.  It appears from the record that to this date, no follow up of Jasmin’s case was ever made at all by them, and they seem to have expediently treated Jasmin’s death as a closed case.  Despite being given the lead via the autopsy and toxicology reports of the Philippine authorities, they failed and refused to act and pursue justice for Jasmin’s sake and to restore honor to her name.

 Indeed, their nonchalant and uncaring attitude may be seen from how

Jasmin’s remains were repatriated.  No official representative from Rajab or Becmen was kind enough to make personal representations with Jasmin’s parents, if only to extend their condolences or sympathies; instead, a mere colleague, nurse Jessie Fajardo, was designated to accompany Jasmin’s body home.

 Of all life’s tragedies, the death of one’s own child must be the most painful

for a parent.  Not knowing why or how Jasmin’s life was snuffed out makes the pain doubly unbearable for Jasmin’s parents, and further aggravated by Rajab, Becmen, and White Falcon’s baseless insistence and accusation that it was a self-inflicted death, a mortal sin by any religious standard.

 Thus we categorically hold, based on the evidence; the actual experiences of

our OFWs; and the resilient and courageous spirit of the Filipina that transcends the vilest desecration of her physical self, that Jasmin did not commit suicide but a victim of murderous aggression.

 Rajab, Becmen, and White Falcon’s indifference to Jasmin’s case has caused

unfathomable pain and suffering upon her parents.  They have turned away from their moral obligation, as employer and recruiter and as entities laden with social and civic obligations in society, to pursue justice for and in behalf of Jasmin, her parents and those she left behind.  Possessed with the resources to determine the truth and to pursue justice, they chose to stand idly for the sake of convenience and in order that they may avoid pecuniary liability, turning a blind eye to the Philippine authorities’ autopsy and toxicology reports instead of taking action upon them as leads in pursuing justice for Jasmin’s death.  They have placed their own financial and corporate interests above their moral and social obligations, and chose to secure and insulate themselves from the perceived responsibility of having to answer for and indemnify Jasmin’s heirs for her death.

 Under Republic Act No. 8042 (R.A. 8042), or the Migrant Workers and

Overseas Filipinos Act of 1995,[22] the State shall, at all times, uphold the dignity of its citizens whether in country or overseas, in general, and Filipino migrant workers, in particular.[23]  The State shall provide adequate and timely social, economic and legal services to Filipino migrant workers.[24] The rights and interest of distressed[25] overseas Filipinos, in general, and Filipino migrant workers, in particular, documented or undocumented, are adequately protected and safeguarded.[26]

 Becmen and White Falcon, as licensed local recruitment agencies, miserably

failed to abide by the provisions of R.A. 8042. Recruitment agencies are expected to extend assistance to their deployed OFWs, especially those in distress. Instead, they abandoned Jasmin’s case and allowed it to remain unsolved to further their interests and avoid anticipated liability which parents or relatives of Jasmin would certainly exact from them.  They willfully refused to protect and tend to the welfare of the deceased Jasmin, treating her case as just one of those unsolved crimes that is not worth wasting their time and resources on.  The evidence does

not even show that Becmen and Rajab lifted a finger to provide legal representation and seek an investigation of Jasmin’s case.  Worst of all, they unnecessarily trampled upon the person and dignity of Jasmin by standing pat on the argument that Jasmin committed suicide, which is a grave accusation given its un-Christian nature.

 We cannot reasonably expect that Jasmin’s parents should be the ones to

actively pursue a just resolution of her case in the KSA, unless they are provided with the finances to undertake this herculean task.  Sadly, Becmen and Rajab did not lend any assistance at all in this respect.  The most Jasmin’s parents can do is to coordinate with Philippine authorities as mandated under R.A. 8042, obtain free legal assistance and secure the aid of the Department of Foreign Affairs, the Department of Labor and Employment, the POEA and the OWWA in trying to solve the case or obtain relief, in accordance with Section 23 [27] of R.A. 8042.  To our mind, the Cuaresmas did all that was within their power, short of actually flying to the KSA.  Indeed, the Cuaresmas went even further.  To the best of their abilities and capacities, they ventured to investigate Jasmin’s case on their own: they caused another autopsy on Jasmin’s remains as soon as it arrived to inquire into the true cause of her death.  Beyond that, they subjected themselves to the painful and distressful experience of exhuming Jasmin’s remains in order to obtain another autopsy for the sole purpose of determining whether or not their daughter was poisoned. Their quest for the truth and justice is equally to be expected of all loving parents.  All this time, Rajab and Becmen – instead of extending their full cooperation to the Cuaresma family – merely sat on their laurels in seeming unconcern.

 In Interorient Maritime Enterprises, Inc. v. NLRC,[28] a seaman who was

being repatriated after his employment contract expired, failed to make his Bangkok to Manila connecting flight as he began to wander the streets of Bangkok aimlessly.  He was shot to death by Thai police four days after, on account of running amuck with a knife in hand and threatening to harm anybody within sight.  The employer, sued for death and other benefits as well as damages, interposed as defense the provision in the seafarer agreement which provides that “no compensation shall be payable in respect of any injury, incapacity, disability or death resulting from a willful act on his own life by the seaman.”  The Court rejected the defense on the view, among others, that the recruitment agency should

have observed some precautionary measures and should not have allowed the seaman, who was later on found to be mentally ill, to travel home alone, and its failure to do so rendered it liable for the seaman’s death.  We ruled therein that –

 The foreign employer may not have been obligated by its contract to

provide a companion for a returning employee, but it cannot deny that it was expressly tasked by its agreement to assure the safe return of said worker.  The uncaring attitude displayed by petitioners who, knowing fully well that its employee had been suffering from some mental disorder, nevertheless still allowed him to travel home alone, is appalling to say the least.  Such attitude harks back to another time when the landed gentry practically owned the serfs, and disposed of them when the latter had grown old, sick or otherwise lost their usefulness.[29] (Emphasis supplied)

 Thus, more than just recruiting and deploying OFWs to their foreign

principals, recruitment agencies have equally significant responsibilities.  In a foreign land where OFWs are likely to encounter uneven if not discriminatory treatment from the foreign government, and certainly a delayed access to language interpretation, legal aid, and the Philippine consulate, the recruitment agencies should be the first to come to the rescue of our distressed OFWs since they know the employers and the addresses where they are deployed or stationed.  Upon them lies the primary obligation to protect the rights and ensure the welfare of our OFWs, whether distressed or not.  Who else is in a better position, if not these recruitment agencies, to render immediate aid to their deployed OFWs abroad?

 Article 19 of the Civil Code provides that every person must, in the exercise

of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith.  Article 21 of the Code states that any person who wilfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damage.  And, lastly, Article 24 requires that in all contractual, property or other relations, when one of the parties is at a disadvantage on account of his moral dependence, ignorance, indigence, mental weakness, tender age or other handicap, the courts must be vigilant for his protection.

 Clearly, Rajab, Becmen and White Falcon’s acts and omissions are against

public policy because they undermine and subvert the interest and general welfare of our OFWs abroad, who are entitled to full protection under the law.  They set an

awful example of how foreign employers and recruitment agencies should treat and act with respect to their distressed employees and workers abroad.  Their shabby and callous treatment of Jasmin’s case; their uncaring attitude; their unjustified failure and refusal to assist in the determination of the true circumstances surrounding her mysterious death, and instead finding satisfaction in the unreasonable insistence that she committed suicide just so they can conveniently avoid pecuniary liability; placing their own corporate interests above of the welfare of their employee’s – all these are contrary to morals, good customs and public policy, and constitute taking advantage of the poor employee and her family’s ignorance, helplessness, indigence and lack of power and resources to seek the truth and obtain justice for the death of a loved one.

 Giving in handily to the idea that Jasmin committed suicide, and adamantly

insisting on it just to protect Rajab and Becmen’s material interest – despite evidence to the contrary – is against the moral law and runs contrary to the good custom of not denouncing one’s fellowmen for alleged grave wrongdoings that undermine their good name and honor.[30]

 Whether employed locally or overseas, all Filipino workers enjoy the

protective mantle of Philippine labor and social legislation, contract stipulations to the contrary notwithstanding.  This pronouncement is in keeping with the basic public policy of the State to afford protection to labor, promote full employment, ensure equal work opportunities regardless of sex, race or creed, and regulate the relations between workers and employers.  This ruling is likewise rendered imperative by Article 17 of the Civil Code which states that laws which have for their object public order, public policy and good customs shall not be rendered ineffective by laws or judgments promulgated, or by determinations or conventions agreed upon in a foreign country.[31]

 The relations between capital and labor are so impressed with public

interest,[32] and neither shall act oppressively against the other, or impair the interest or convenience of the public.[33]  In case of doubt, all labor legislation and all labor contracts shall be construed in favor of the safety and decent living for the laborer.[34]

 

The grant of moral damages to the employee by reason of misconduct on the part of the employer is sanctioned by Article 2219 (10)[35] of the Civil Code, which allows recovery of such damages in actions referred to in Article 21.[36]

 Thus, in view of the foregoing, the Court holds that the Cuaresmas are

entitled to moral damages, which Becmen and White Falcon are jointly and solidarily liable to pay, together with exemplary damages for wanton and oppressive behavior, and by way of example for the public good.

 Private employment agencies are held jointly and severally liable with the

foreign-based employer for any violation of the recruitment agreement or contract of employment.  This joint and solidary liability imposed by law against recruitment agencies and foreign employers is meant to assure the aggrieved worker of immediate and sufficient payment of what is due him.[37] If the recruitment/placement agency is a juridical being, the corporate officers and directors and partners as the case may be, shall themselves be jointly and solidarily liable with the corporation or partnership for the aforesaid claims and damages.[38]

 White Falcon’s assumption of Becmen’s liability does not automatically

result in Becmen’s freedom or release from liability.  This has been ruled in ABD Overseas Manpower Corporation v. NLRC.[39]  Instead, both Becmen and White Falcon should be held liable solidarily, without prejudice to each having the right to be reimbursed under the provision of the Civil Code that whoever pays for another may demand from the debtor what he has paid.[40]

 WHEREFORE, the Amended Decision of the Court of Appeals dated May

14, 2008 in CA-G.R. SP No. 80619 and CA-G.R. SP No. 81030 is SET ASIDE.  Rajab & Silsilah Company, White Falcon Services, Inc., Becmen Service Exporter and Promotion, Inc., and their corporate directors and officers are found jointly and solidarily liable and ORDERED to indemnify the heirs of Jasmin Cuaresma, spouses Simplicio and Mila Cuaresma, the following amounts:

 

1Republic of the PhilippinesSUPREME COURT

Manila

FIRST DIVISION

G.R. No. 162839             October 12, 2006

INNODATA PHILIPPINES, INC., petitioner, vs.JOCELYN L. QUEJADA-LOPEZ and ESTELLA G. NATIVIDAD-PASCUAL, respondents.

D E C I S I O N

PANGANIBAN, J.:

A contract that misuses a purported fixed-term employment to block the acquisition of tenure by the employees deserves to be struck down for being contrary to law, morals, good customs, public order and public policy.

The Case

Before us is a Petition for Review1 under Rule 45 of the Rules of Court, seeking to reverse the September 18, 2003 Decision2 of the Court of Appeals (CA) in CA-GR SP No. 73416, as well as its March 15, 2004 Resolution3denying petitioner’s Motion for Reconsideration. The decretal portion of the Decision states:

"WHEREFORE, the challenged decision of November 27, 2001 and resolution of July 22, 2002 of the National Labor Relations Commission are SET ASIDE, and the decision of the Labor Arbiter of December 29, 1999 in NLRC NCR CASE NO. 00-03-02732-98 is REINSTATED and AFFIRMED in all respect."4

The Facts

The factual antecedents are narrated by the CA as follows:

"Innodata Philippines, Inc., is engaged in the encoding/data conversion business. It employs encoders, indexers, formatters, programmers, quality/quantity staff, and others, to maintain its business and do the job orders of its clients.

"Estrella G. Natividad and Jocelyn L. Quejada were employed as formatters by Innodata Philippines, Inc. They [worked] from March 4, 1997, until their separation on March 3, 1998.

"Claiming that their job was necessary and desirable to the usual business of the company which is data processing/conversion and that their employment is regular pursuant to Article 280 of the Labor Code, [respondents] filed a complaint for illegal dismissal and for damages as well as for attorney’s fees against Innodata Phils., Incorporated, Innodata Processing Corporation and Todd Solomon. [Respondents] further invoke the stare decicis doctrine in the case of Juanito Villanueva vs. National Labor Relations Commission, et al., G.R. No. 127448 dated September 17, 1998 and the case of Joaquin Servidad vs. National Labor Relations Commission, et al., G.R. No. 128682 dated March 18, 1999, arguing that the Highest Court has already ruled with finality that the nature of employment at [petitioner] corporation is regular and not on a fixed term basis, as the job in the company is necessary and desirable to the usual business of the corporation.

"On the other hand, [petitioner] contends that [respondents’] employment contracts expired, for [these were] only for a fixed period of one (1) year. [Petitioner] company further invoked the Brent School case by saying that since the period expired, [respondents’] employment was likewise terminated.

"After examination of the pleadings filed, Labor Arbiter Donato G. Quinto rendered a judgment in favor of complainants, the dispositive portion of which reads:

‘WHEREFORE, foregoing premises considered, judgment is hereby rendered:

(1) Holding complainants Estella G. Natividad and Jocelyn Quejada to have been illegally dismissed by [Petitioners] Innodata Philippines Incorporated and Innodata Processing Corporation and ordering said [petitioners] to reinstate them to their former position without los[s] of seniority rights, or to a substantially equivalent position, and to pay them jointly and severally, backwages computed from the time they were illegally dismissed on March 3, 1998 up to the date of this decision in the amount of P112,535.28 EACH, or in the total amount of P225,070.56 for the two of them;

(2) Further, [petitioners] are ordered to pay, jointly and severally, [respondents] attorney’s fees in the amount equivalent to 10% of their respective awards; and

(3) All other claims are hereby dismissed for lack of merit.

‘SO ORDERED.’

"Not satisfied, [petitioner] corporation interposed an appeal in the National Labor Relations Commission, which reversed and set aside the Labor Arbiter’s decision and dismissed [respondents’] complaint for lack of merit. It declared that the contract between [respondents] and [petitioner] company was for a fixed term and therefore, the dismissal of [respondents], at the end of their one year term agreed upon, was valid.

"A motion for reconsideration was filed but was denied in an order dated July 22, 2002."5

Ruling of the Court of Appeals

The CA ruled that respondents were regular employees in accordance with Section 280 of the Labor Code. It said that the fixed-term contract prepared by petitioner was a crude attempt to circumvent respondents’ right to security of tenure.

Hence, this Petition.6

Issues

Petitioner raises the followings issues for the Court’s consideration:

I

"Whether or not the Court of Appeals committed serious reversible error when it did not take into consideration that fixed-term employment contracts are valid under the law and prevailing jurisprudence.

II

"Whether or not the Court of Appeals committed serious reversible error when it failed to take into consideration the nature of the business of petitioner vis-à-vis its resort to fixed-term employment contracts.

III

"Whether or not the Court of Appeals seriously erred when it failed to consider the fixed-term employment contracts between petitioner and respondents as valid.

IV

"Whether or not the Court of Appeals seriously erred when it held that regularity of employment is always premised on the fact that it is directly related to the business of the employer.

V

"Whether or not the Court of Appeals committed serious reversible error in setting aside the Decision of the National Labor Relations Commission, dated 27 November 2001 and Resolution of 22 July 2002, respectively[,] and reinstated the decision of the Labor Arbiter dated 29 December 1999."7

The foregoing issues may be reduced into one question: whether the alleged fixed-term employment contracts entered into by petitioner and respondents are valid.

The Court’s Ruling

The Petition has no merit.

Sole Issue:Validity of the Fixed-Term Contract

Petitioner contends that the regularity of the employment of respondents does not depend on whether their task may be necessary or desirable in the usual business of the employer. It argues that the use of fixed-term employment contracts has long been recognized by this Court.

Petitioner adds that Villanueva v. NLRC8 and Servidad v. NLRC9 do not apply to the present factual circumstances. These earlier cases struck down the employment contracts prepared by herein Petitioner Innodata for being "devious, but crude, attempts to circumvent [the employee’s] right to security of tenure x x x." Petitioner avers that the present employment contracts it entered into with respondents no longer contain the so-called "double-bladed" provisions previously found objectionable by the Court.

Petitioner’s contentions have no merit.

While this Court has recognized the validity of fixed-term employment contracts in a number of cases,10 it has consistently emphasized that when the circumstances of a case show that the periods were imposed to block the acquisition of security of tenure, they should be struck down for being contrary to law, morals, good customs, public order or public policy.11

In a feeble attempt to conform to the earlier rulings of this Court in Villanueva12 and Servidad,13 petitioner has reworded its present employment contracts. A close scrutiny of the provisions, however, show that the double-bladed scheme to block the acquisition of tenurial security still exists.

To stress, Servidad struck down the following objectionable contract provisions:

"Section 2. This Contract shall be effective for a period of 1 [year] commencing on May 10, 1994, until May 10, 1995 unless sooner terminated pursuant to the provisions hereof.

"From May 10, 1994 to November 10, 1994, or for a period of six (6) months, the EMPLOYEE shall be contractual during which the EMPLOYER can terminate the EMPLOYEE’S services by serving written notice to that effect. Such termination shall be immediate, or at whatever date within the six-month period, as the EMPLOYER may determine. Should the EMPLOYEE continue his employment beyond November 10, 1994, he shall become a regular employee upon demonstration of sufficient skill in the terms of his ability to meet the standards set by the EMPLOYER. If the EMPLOYEE fails to demonstrate the ability to master his task during the first six months he can be placed on probation for another six (6) months after which he will be evaluated for promotion as a regular employee."14

In comparison, the pertinent portions of the present employment contracts in dispute read as follows:

"TERM/DURATION

1. The EMPLOYER hereby employs, engages and hires the EMPLOYEE, and the EMPLOYEE hereby accepts such appointment as FORMATTER effective March 04, 1997 to March 03, 1998, a period of one (1) year.

x x x x x x x x x

"TERMINATION

7.1 This Contract shall automatically terminate on March 03, 1998 without need of notice or demand.

x x x x x x x x x

7.4 The EMPLOYEE acknowledges that the EMPLOYER entered into this Contract upon his express representation that he/she is qualified and possesses the skills necessary and desirable for the position indicated herein. Thus, the EMPLOYER is hereby granted the right to pre-terminate this Contract within the first three (3) months of its duration upon failure of the EMPLOYEE to meet and pass the qualifications and standards set by the EMPLOYER and made known to the EMPLOYEE prior to execution hereof. Failure of the EMPLOYER to exercise its right hereunder shall be without prejudice to the automatic termination of the EMPLOYEE’s employment upon the expiration of this Contract or cancellation thereof for other causes provided herein and by law."15 (Emphasis supplied)

Like those in Villanueva and Servidad, the present contracts also provide for two periods. Aside from the fixed one-year term set in paragraph 1, paragraph 7.4 provides for a three-month period during which petitioner has the right to pre-terminate the employment for the "failure of the employees to meet and pass the qualifications and standards set by the employer and made known to the employee prior to" their employment. Thus, although couched in ambiguous language, paragraph 7.4 refers in reality to a probationary period.

Clearly, to avoid regularization, petitioner has again sought to resort alternatively to probationary employment and employment for a fixed term. Noteworthy is the following pronouncement of this Court in Servidad:

"If the contract was really for a fixed term, the [employer] should not have been given the discretion to dismiss the [employee] during the one year period of employment for reasons other than the just and authorized causes under the Labor Code. Settled is the rule that an employer can terminate the services of an employee only for valid and just causes which must be shown by clear and convincing evidence.

x x x x x x x x x

"The language of the contract in dispute is truly a double-bladed scheme to block the acquisition of the employee of tenurial security. Thereunder, [the employer] has two options. It can terminate the employee by reason of expiration of contract, or it may use ‘failure to meet work standards’ as the ground for the employee’s dismissal. In either case, the tenor of the contract jeopardizes the right of the worker to security of tenure guaranteed by the Constitution."16

In the interpretation of contracts, obscure words and provisions shall not favor the party that caused the obscurity.17 Consequently, the terms of the present contract should be construed strictly against petitioner, which prepared it.18

Article 1700 of the Civil Code declares:

"Art. 1700. The relations between capital and labor are not merely contractual. They are so impressed with public interest that labor contracts must yield to the common good. Therefore, such contracts are subject to the special laws on labor unions, collective bargaining, strikes and lockouts, closed shop, wages, working conditions, hours of labor and similar subjects."

Indeed, a contract of employment is impressed with public interest. For this reason, provisions of applicable statutes are deemed written into the contract. Hence, the "parties are not at liberty to insulate themselves and their relationships from the impact of labor laws and regulations by simply

contracting with each other."19Moreover, in case of doubt, the terms of a contract should be construed in favor of labor.20

Lastly, petitioner claims that it was constrained by the nature of its business to enter into fixed-term employment contracts with employees assigned to job orders. It argues that inasmuch as its business is that of a mere service contractor, it relies on the availability of job orders or undertakings from its clients. Hence, the continuity of work cannot be ascertained.

Petitioner’s contentions deserve little consideration.

By their very nature, businesses exist and thrive depending on the continued patronage of their clients. Thus, to some degree, they are subject to the whims of clients who may decide to discontinue patronizing their products or services for a variety of reasons. Being inherent in any enterprise, this entrepreneurial risk may not be used as an excuse to circumvent labor laws; otherwise, no worker could ever attain regular employment status.

Finally, it is worth noting that after its past employment contracts had been declared void by this Court, petitioner was expected to ensure that the subsequent contracts would already comply with the standards set by law and by this Court. Regrettably, petitioner failed to do so.

WHEREFORE, the Petition is DENIED, and the assailed Decision and Resolution are AFFIRMED. Costs against petitioner.

SO ORDERED.

Ynares-Santiago, Austria-Martinez, Callejo, Sr., and Chico-Nazario, JJ., concur.

Republic of the PhilippinesSUPREME COURT

Baguio City

SECOND DIVISION

G.R. No. 170351               March 30, 2011

LEYTE GEOTHERMAL POWER PROGRESSIVE EMPLOYEES UNION - ALU - TUCP, Petitioner, vs.PHILIPPINE NATIONAL OIL COMPANY - ENERGY DEVELOPMENT CORPORATION, Respondent.

D E C I S I O N

NACHURA, J.:

Under review is the Decision1 dated June 30, 2005 of the Court of Appeals (CA) in CA-G.R. SP No. 65760, which dismissed the petition for certiorari filed by petitioner Leyte Geothermal Power Progressive Employees Union – ALU―TUCP (petitioner Union) to annul and set aside the decision2 dated December 10, 1999 of the National Labor Relations Commission (NLRC) in NLRC Certified Case No. V-02-99.

The facts, fairly summarized by the CA, follow.

[Respondent Philippine National Oil Corporation]-Energy Development Corporation [PNOC-EDC] is a government-owned and controlled corporation engaged in exploration, development, utilization, generation and distribution of energy resources like geothermal energy.

Petitioner is a legitimate labor organization, duly registered with the Department of Labor and Employment (DOLE) Regional Office No. VIII, Tacloban City.

Among [respondent’s] geothermal projects is the Leyte Geothermal Power Project located at the Greater Tongonan Geothermal Reservation in Leyte. The said Project is composed of the Tongonan 1 Geothermal Project (T1GP) and the Leyte Geothermal Production Field Project (LGPF) which provide the power and electricity needed not only in the provinces and cities of Central and Eastern Visayas (Region VII and VIII), but also in the island of Luzon as well. Thus, the [respondent] hired and employed hundreds of employees on a contractual basis, whereby, their employment was only good up to the completion or termination of the project and would automatically expire upon the completion of such project.

Majority of the employees hired by [respondent] in its Leyte Geothermal Power Projects had become members of petitioner. In view of that circumstance, the petitioner demands from the [respondent] for recognition of it as the collective bargaining agent of said employees and for a CBA negotiation with it. However, the [respondent] did not heed such demands of the petitioner. Sometime in 1998 when the project was about to be completed, the [respondent] proceeded to serve Notices of Termination of Employment upon the employees who are members of the petitioner.

On December 28, 1998, the petitioner filed a Notice of Strike with DOLE against the [respondent] on the ground of purported commission by the latter of unfair labor practice for "refusal to bargain collectively, union busting and mass termination." On the same day, the petitioner declared a strike and staged such strike.

To avert any work stoppage, then Secretary of Labor Bienvenido E. Laguesma intervened and issued the Order, dated January 4, 1999, certifying the labor dispute to the NLRC for compulsory arbitration. Accordingly, all the striking workers were directed to return to work within twelve (12) hours from receipt of the Order and for the [respondent] to accept them back under the same terms and conditions of employment prior to the strike. Further, the parties were directed to cease and desist from committing any act that would exacerbate the situation.

However, despite earnest efforts on the part of the Secretary of Labor and Employment to settle the dispute amicably, the petitioner remained adamant and unreasonable in its position, causing the failure of the negotiation towards a peaceful compromise. In effect, the petitioner did not abide by [the] assumption order issued by the Secretary of Labor.

Consequently, on January 15, 1999, the [respondent] filed a Complaint for Strike Illegality, Declaration of Loss of Employment and Damages at the NLRC-RAB VIII in Tacloban City and at the same time, filed a Petition for Cancellation of Petitioner’s Certificate of Registration with DOLE, Regional Office No. VIII. The two cases were later on consolidated pursuant to the New NLRC Rules of Procedure. The consolidated case was docketed as NLRC Certified Case No. V-02-99 (NCMB-RAB VIII-NS-12-0190-98; RAB Case No. VIII-1-0019-99). The said certified case was indorsed to the NLRC 4th Division in Cebu City on June 21, 1999 for the proper disposition thereof.3

In due course, the NLRC 4th Division rendered a decision in favor of respondent, to wit:

WHEREFORE, based on the foregoing premises, judgment is hereby rendered as follows:

1. Declaring the officers and members of [petitioner] Union as project employees;

2. Declaring the termination of their employment by reason of the completion of the project, or a phase or portion thereof, to which they were assigned, as valid and legal;

3. Declaring the strike staged and conducted by [petitioner] Union through its officers and members on December 28, 1998 to January 6, 1999 as illegal for failure to comply with the mandatory requirements of the law on strike[;]

4. Declaring all the officers and members of the board of [petitioner] Union who instigated and spearheaded the illegal strike to have lost their employment[;]

5. Dismissing the claim of [petitioner] Union against PNOC-EDC for unfair labor practice for lack of merit[;]

6. Dismissing both parties’ claims against each other for violation of the Assumption Order dated January 4, 1999 for lack of factual basis[;]

7. Dismissing all other claims for lack of merit.4

Petitioner Union filed a motion for reconsideration of the NLRC decision, which was subsequently denied. Posthaste, petitioner Union filed a petition for certiorari before the CA, alleging grave abuse of discretion in the decision of the NLRC. As previously adverted to, the CA dismissed the petition for certiorari, thus:

WHEREFORE, in view of the foregoing premises, judgment is hereby rendered by us DISMISSING the Petition. The assailed Decision dated December 10, 1999 of the NLRC 4th Division in NLRC Certified Case No. V-02-99 (NCMB-RAB VIII-NS-12-0190-98; RAB Case No. VIII-1-0019-99) and its Order dated March 30, 2001 are hereby AFFIRMED.

Costs against the Petitioner.5

Hence, this appeal by certiorari filed by petitioner Union, positing the following questions of law:

1. MAY THE HONORABLE COURT OF APPEALS SUSTAIN THE "PROJECT CONTRACTS" THAT ARE DESIGNED TO DENY AND DEPRIVE THE EMPLOYEES’ THEIR RIGHT TO SECURITY OF TENURE BY MAKING IT APPEAR THAT THEY ARE MERE PROJECT EMPLOYEES?

2. WHEN THERE ARE NO INTERVALS IN THE EMPLOYEES’ CONTRACT, SUCH THAT THE SO-CALLED UNDERTAKING WAS CONTINUOUS, ARE THE EMPLOYEES PROPERLY TREATED AS PROJECT EMPLOYEES?

3. MAY THE HONORABLE COURT OF APPEALS IGNORE THE FIRM’S OWN ESTIMATE OF JOB COMPLETION, PROVING THAT THERE IS STILL 56.25% CIVIL/STRUCTURAL WORK TO BE ACCOMPLISHED, AND RULE THAT THE EMPLOYEES WERE DISMISSED FOR COMPLETION [OF] THE "PROJECT?"

4. MAY A FIRM HIDE UNDER THE SPURIOUS CLOAK OF "PROJECT COMPLETION" TO DISMISS EN MASSE THE EMPLOYEES WHO HAVE ORGANIZED AMONG THEMSELVES A LEGITIMATE LABOR ORGANIZATION TO PROTECT THEIR RIGHTS?

5. WHEN THERE IS NO STOPPAGE OF WORK, MAY A PROTEST ACTIVITY BE CONSIDERED AS A STRIKE CONTRARY TO ITS CONCEPTUAL DEFINITION UNDER ARTICLE 212 (O) OF THE LABOR CODE OF THE PHILIPPINES?

6. WHEN THE DISMISSAL IS AIMED AT RIDDING THE COMPANY OF MEMBERS OF THE UNION, IS THIS UNION BUSTING?6

Stripped of rhetoric, the issues for our resolution are:

1. Whether the officers and members of petitioner Union are project employees of respondent; and

2. Whether the officers and members of petitioner Union engaged in an illegal strike.

On the first issue, petitioner Union contends that its officers and members performed activities that were usually necessary and desirable to respondent’s usual business. In fact, petitioner Union reiterates that its officers and members were assigned to the Construction Department of respondent as carpenters and masons, and to other jobs pursuant to civil works, which are usually necessary and desirable to the department. Petitioner Union likewise points out that there was no interval in the employment contract of its officers and members, who were all employees of respondent, which lack of interval, for petitioner Union, "manifests that the ‘undertaking’ is usually necessary and desirable to the usual trade or business of the employer."

We cannot subscribe to the view taken by petitioner Union.

The distinction between a regular and a project employment is provided in Article 280, paragraph 1, of the Labor Code:

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

An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That, any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such actually exists.7

The foregoing contemplates four (4) kinds of employees: (a) regular employees or those who have been "engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer"; (b) project employees or those "whose employment has been fixed for a specific project or undertaking[,] the completion or termination of which has been determined at the time of the engagement of the employee"; (c) seasonal employees or those who work or perform services which are seasonal in nature, and the employment is for the duration of the season;8 and (d) casual employees or those who are not regular, project, or seasonal employees. Jurisprudence has added a fifth kind— a fixed-term employee.9

Article 280 of the Labor Code, as worded, establishes that the nature of the employment is determined by law, regardless of any contract expressing otherwise. The supremacy of the law over the nomenclature of the contract and the stipulations contained therein is to bring to life the policy enshrined in the Constitution to "afford full protection to labor."10 Thus, labor contracts are placed on a higher plane than ordinary contracts; these are imbued with public interest and therefore subject to the police power of the State.11

However, notwithstanding the foregoing iterations, project employment contracts which fix the employment for a specific project or undertaking remain valid under the law:

x x x By entering into such a contract, an employee is deemed to understand that his employment is coterminous with the project. He may not expect to be employed continuously beyond the completion of the project. It is of judicial notice that project employees engaged for manual services or those for special skills like those of carpenters or masons, are, as a rule, unschooled. However, this fact alone is not a valid reason for bestowing special treatment on them or for invalidating a contract of employment. Project employment contracts are not lopsided agreements in favor of only one party thereto. The employer’s interest is equally important as that of the employee[s’] for theirs is the interest that propels economic activity. While it may be true that it is the employer who drafts project employment contracts with its business interest as overriding consideration, such contracts do not, of necessity, prejudice the employee. Neither is the employee left helpless by a prejudicial employment contract. After all, under the law, the interest of the worker is paramount.12

In the case at bar, the records reveal that the officers and the members of petitioner Union signed employment contracts indicating the specific project or phase of work for which they were hired, with a fixed period of employment. The NLRC correctly disposed of this issue:

A deeper examination also shows that [the individual members of petitioner Union] indeed signed and accepted the [employment contracts] freely and voluntarily. No evidence was presented by [petitioner] Union to prove improper pressure or undue influence when they entered, perfected and consummated [the employment] contracts. In fact, it was clearly established in the course of the trial of this case, as explained by no less than the President of [petitioner] Union, that the contracts of employment were read, comprehended, and voluntarily accepted by them. x x x.

x x x x

As clearly shown by [petitioner] Union’s own admission, both parties had executed the contracts freely and voluntarily without force, duress or acts tending to vitiate the worker[s’] consent. Thus, we see no reason not to honor and give effect to the terms and conditions stipulated therein. x x x.13

Thus, we are hard pressed to find cause to disturb the findings of the NLRC which are supported by substantial evidence.

It is well-settled in jurisprudence that factual findings of administrative or quasi-judicial bodies, which are deemed to have acquired expertise in matters within their respective jurisdictions, are generally accorded not only respect but even finality, and bind the Court when supported by substantial evidence.14 Rule 133, Section 5 defines substantial evidence as "that amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion."

Consistent therewith is the doctrine that this Court is not a trier of facts, and this is strictly adhered to in labor cases.15 We may take cognizance of and resolve factual issues, only when the findings of fact and conclusions of law of the Labor Arbiter or the NLRC are inconsistent with those of the CA.16

In the case at bar, both the NLRC and the CA were one in the conclusion that the officers and the members of petitioner Union were project employees. Nonetheless, petitioner Union insists that they were regular employees since they performed work which was usually necessary or desirable to the usual business or trade of the Construction Department of respondent.

The landmark case of ALU-TUCP v. NLRC17 instructs on the two (2) categories of project employees:

It is evidently important to become clear about the meaning and scope of the term "project" in the present context. The "project" for the carrying out of which "project employees" are hired would ordinarily have some relationship to the usual business of the employer. Exceptionally, the "project" undertaking might not have an ordinary or normal relationship to the usual business of the employer. In this latter case, the determination of the scope and parameters of the "project" becomes fairly easy. x x x. From the viewpoint, however, of the legal characterization problem here presented to the Court, there should be no difficulty in designating the employees who are retained or hired for the purpose of undertaking fish culture or the production of vegetables as "project employees," as distinguished from ordinary or "regular employees," so long as the duration and scope of the project were determined or specified at the time of engagement of the "project employees." For, as is evident from the provisions of Article 280 of the Labor Code, quoted earlier, the principal test for determining whether particular employees are properly characterized as "project employees" as distinguished from "regular employees," is whether or not the "project employees" were assigned to carry out a "specific project or undertaking," the duration (and scope) of which were specified at the time the employees were engaged for that project.

In the realm of business and industry, we note that "project" could refer to one or the other of at least two (2) distinguishable types of activities. Firstly, a project could refer to a particular job or undertaking that is within the regular or usual business of the employer company, but which is distinct and separate, and identifiable as such, from the other undertakings of the company. Such job or undertaking begins and ends at determined or determinable times. The typical example of this first type of project is a particular construction job or project of a construction company. A construction company ordinarily carries out two or more [distinct] identifiable construction projects: e.g., a twenty-five-storey hotel in Makati; a residential condominium building in Baguio City; and a domestic air terminal in Iloilo City. Employees who are hired for the carrying out of one of these separate projects, the scope and duration of which has been determined and made known to the employees at the time of employment, are properly treated as "project employees," and their services may be lawfully terminated at completion of the project.

The term "project" could also refer to, secondly, a particular job or undertaking that is not within the regular business of the corporation. Such a job or undertaking must also be identifiably separate and distinct from the ordinary or regular business operations of the employer. The job or undertaking also begins and ends at determined or determinable times.18

Plainly, the litmus test to determine whether an individual is a project employee lies in setting a fixed period of employment involving a specific undertaking which completion or termination has been determined at the time of the particular employee’s engagement.

In this case, as previously adverted to, the officers and the members of petitioner Union were specifically hired as project employees for respondent’s Leyte Geothermal Power Project located at the Greater Tongonan Geothermal Reservation in Leyte. Consequently, upon the completion of the project or substantial phase thereof, the officers and the members of petitioner Union could be validly terminated.

Petitioner Union is adamant, however, that the lack of interval in the employment contracts of its officer and members negates the latter’s status

as mere project employees. For petitioner Union, the lack of interval further drives home its point that its officers and members are regular employees who performed work which was usually necessary or desirable to the usual business or trade of respondent.

We are not persuaded.

Petitioner Union’s members’ employment for more than a year does equate to their regular employment with respondent. In this regard, Mercado, Sr. v. NLRC19 illuminates:

The first paragraph [of Article 280 of the Labor Code] answers the question of who are regular employees. It states that, regardless of any written or oral agreement to the contrary, an employee is deemed regular where he is engaged in necessary or desirable activities in the usual business or trade of the employer, except for project employees.

A project employee has been defined to be one whose employment has been fixed for a specific project or undertaking, the completion or termination of which has been determined at the time of the engagement of the employee, or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season, as in the present case.

The second paragraph of Art. 280 demarcates as "casual" employees, all other employees who do not fall under the definition of the preceding paragraph. The proviso, in said second paragraph, deems as regular employees those "casual" employees who have rendered at least one year of service regardless of the fact that such service may be continuous or broken.

Petitioners, in effect, contend that the proviso in the second paragraph of Art. 280 is applicable to their case and that the Labor Arbiter should have considered them regular by virtue of said proviso. The contention is without merit.

The general rule is that the office of a proviso is to qualify or modify only the phrase immediately preceding it or restrain or limit the generality of the clause that it immediately follows. Thus, it has been held that a proviso is to be construed with reference to the immediately preceding part of the provision to which it is attached, and not to the statute itself or to other sections thereof. The only exception to this rule is where the clear legislative intent is to restrain or qualify not only the phrase immediately preceding it (the proviso) but also earlier provisions of the statute or even the statute itself as a whole.

Policy Instruction No. 12 of the Department of Labor and Employment discloses that the concept of regular and casual employees was designed to put an end to casual employment in regular jobs, which has been abused by many employers to prevent so – called casuals from enjoying the benefits of regular employees or to prevent casuals from joining unions. The same instructions show that the proviso in the second paragraph of Art. 280 was not designed to stifle small-scale businesses nor to oppress agricultural land owners to further the interests of laborers, whether agricultural or industrial. What it seeks to eliminate are abuses of employers against their employees and not, as petitioners would have us believe, to prevent small-scale businesses from engaging in legitimate methods to realize profit. Hence, the proviso is applicable only to the employees who are deemed "casuals" but not to the "project" employees nor the regular employees treated in paragraph one of Art. 280.

Clearly, therefore, petitioners being project employees, or, to use the correct term, seasonal employees, their employment legally ends upon completion of the project or the [end of the] season. The termination of their employment cannot and should not constitute an illegal dismissal.

Considering our holding that the officers and the members of petitioner Union were project employees, its claim of union busting is likewise dismissed.

On the second issue, petitioner Union contends that there was no stoppage of work; hence, they did not strike. Euphemistically, petitioner Union avers that it "only engaged in picketing,"20 and maintains that "without any work stoppage, [its officers and members] only engaged in xxx protest activity."

We are not convinced. Petitioner Union splits hairs.

To begin with, quite evident from the records is the undisputed fact that petitioner Union filed a Notice of Strike on December 28, 1998 with the Department of Labor and Employment, grounded on respondent’s purported

unfair labor practices, i.e., "refusal to bargain collectively, union busting and mass termination." On even date, petitioner Union declared and staged a strike.

Second, then Secretary of Labor, Bienvenido E. Laguesma, intervened and issued a Return-to-Work Order21dated January 4, 1999, certifying the labor dispute to the NLRC for compulsory arbitration. The Order narrates the facts leading to the labor dispute, to wit:

On 28 December 1998, [petitioner Union] filed a Notice of Strike against [respondent] citing unfair labor practices, specifically: refusal to bargain collectively, union busting and mass termination as the grounds [therefor]. On the same day, [petitioner] Union went on strike and took control over [respondent’s] facilities of its Leyte Geothermal Project.

Attempts by the National Conciliation and Mediation Board –RBVIII to forge a mutually acceptable solution proved futile.

In the meantime, the strike continues with no settlement in sight placing in jeopardy the supply of much needed power supply in the Luzon and Visayas grids.

x x x x

The on-going strike threatens the availability of continuous electricity to these areas which is critical to day-to-day life, industry, commerce and trade. Without doubt, [respondent’s] operations [are] indispensable to the national interest and falls (sic) within the purview of Article 263 (g) of the Labor Code, as amended, which warrants (sic) the intervention of this Office.

Third, petitioner Union itself, in its pleadings, used the word "strike."

Ultimately, petitioner Union’s asseverations are belied by the factual findings of the NLRC, as affirmed by the CA:

The failure to comply with the mandatory requisites for the conduct of strike is both admitted and clearly shown on record. Hence, it is undisputed that no strike vote was conducted; likewise, the cooling-off period was not observed and that the 7-day strike ban after the submission of the strike vote was not complied with since there was no strike vote taken.

x x x x

The factual issue of whether a notice of strike was timely filed by [petitioner] Union was resolved by the evidence on record. The evidence revealed that [petitioner] Union struck even before it could file the required notice of strike. Once again, this relied on [petitioner] Union’s proof. [Petitioner] Union[’s] witness said:

Atty. Sinsuat : You stated that you struck on 28 December 1998 is that correct?

Witness : Early in the morning of December 1998.

x x x x

Atty. Sinsuat : And you went there to conduct the strike did you not?

Witness : Our plan then was to strike at noon of December 28 and the strikers will be positioned at their respective areas.22

Article 263 of the Labor Code enumerates the requisites for holding a strike:

Art. 263. Strikes, picketing, and lockouts. – (a) x x x.

x x x x.

(c) In cases of bargaining deadlocks, the duly certified or recognized bargaining agent may file a notice of strike or the employer may file a notice of lockout with the Department at least 30 days before the intended date thereof. In cases of unfair labor practice, the period of notice shall be 15 days and in the absence of a duly certified bargaining agent, the notice of strike may be filed by any legitimate labor organization in behalf of its members. However, in case of dismissal from employment of union officers duly elected in accordance with the union constitution and by-laws, which may constitute union busting, where the existence of the union is threatened, the 15-day cooling-off period shall not apply and the union may take action immediately.

(d) The notice must be in accordance with such implementing rules and regulations as the Department of Labor and Employment may promulgate.

(e) During the cooling-off period, it shall be the duty of the Department to exert all efforts at mediation and conciliation to effect a voluntary settlement. Should the dispute remain unsettled until the lapse of the requisite number of days from the mandatory filing of the notice, the labor union may strike or the employer may declare a lockout.

(f) A decision to declare a strike must be approved by a majority of the total union membership in the bargaining unit concerned, obtained by secret ballot in meetings or referenda called for that purpose. A decision to declare a lockout must be approved by a majority of the board of directors of the corporation or association or of the partners in a partnership, obtained by secret ballot in a meeting called for that purpose. The decision shall be valid for the duration of the dispute based on substantially the same grounds considered when the strike or lockout vote was taken. The Department may, at its own initiative or upon the request of any affected party, supervise the conduct of the secret balloting. In every case, the union or the employer shall furnish the Department the results of the voting at least

seven days before the intended strike or lockout, subject to the cooling-off period herein provided.

In fine, petitioner Union’s bare contention that it did not hold a strike cannot trump the factual findings of the NLRC that petitioner Union indeed struck against respondent. In fact, and more importantly, petitioner Union failed to comply with the requirements set by law prior to holding a strike.1avvphi1

WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals in CA-G.R. SP No. 65760 is AFFIRMED. Costs against petitioner Union.

SO ORDERED.

ANTONIO EDUARDO B. NACHURAAssociate Justice

WE CONCUR:

ANTONIO T. CARPIOAssociate Justice

Chairperson

DIOSDADO M. PERALTAAssociate Justice

ROBERTO A. ABADAssociate Justice

JOSE CATRAL MENDOZAAssociate Justice

A T T E S T A T I O N

LEYTE GEOTHERMAL POWER PROGRESSIVE EMPLOYEES UNION - ALU - TUCP, Petitioner,  vs. PHILIPPINE NATIONAL OIL COMPANY - ENERGY DEVELOPMENT CORPORATION, Respondent.'

G.R. No. 170351March 30, 2011

NACHURA, J.:

FACTS:

PNOC is a government-owned and controlled corporation engaged in, among others of energy resources like geothermal energy. Petitioner is a legitimate labor organization, duly registered with the DOLE. PNOC hired employees for its Leyte Geothermal Power Project whereby, their employment was only good up to the completion or termination of the project and would automatically expire upon the completion of such project.  Majority of the employees hired had become members of petitioner. In view of that circumstance, the petitioner demands for recognition of it as the collective bargaining agent of said employees

and for a CBA negotiation with it. However, PNOC did not heed such demands. Sometime in 1998 when the project was about to be completed, PNOC proceeded to serve Notices of Termination of Employment upon the employees who are members of the petitioner.

The petitioner filed a Notice of Strike with DOLE against PNOC on the ground of purported commission by the latter of ULP for "refusal to bargain collectively, union busting and mass termination." On the same day, the petitioner declared a strike and staged such strike. PNOC filed a complaint for, among others, Strike Illegality with NLRC which ruled in its favour and whose decision was affirmed by the CA.

ISSUE: WON the officers and members of petitioner Union are project employees of respondent.

RULING:

The litmus test to determine whether an individual is a project employee lies in setting a fixed period of employment involving a specific undertaking which completion or termination has been determined at the time of the particular employee’s engagement.

In this case, as previously adverted to, the officers and the members of petitioner Union were specifically hired as project employees for respondent’s Leyte Geothermal Power Project located at the Greater Tongonan Geothermal Reservation in Leyte. Consequently, upon the completion of the project or substantial phase thereof, the officers and the members of petitioner Union could be validly terminated. Clearly, therefore, petitioners being project employees, or, to use the correct term, seasonal employees, their employment legally ends upon completion of the project or the [end of the] season. The termination of their employment cannot and should not constitute an illegal dismissal.G.R. No. 170351, March 30, 2011

LEYTE GEOTHERMAL POWER PROGRESSIVE EMPLOYEES UNION – ALU – TUCP, Petitioner,

vs.

PHILIPPINE NATIONAL OIL COMPANY – ENERGY DEVELOPMENT CORPORATION, Respondent.

FACTS: Respondent is a GOCC while petitioner is a legitimate labor organization. Among

[respondent’s] geothermal projects is the Leyte Geothermal Power Project located at the

Greater Tongonan Geothermal Reservation in Leyte. Thus, the [respondent] hired and

employed hundreds of employees on a contractual basis, whereby, their employment was

only good up to the completion or termination of the project and would automatically

expire upon the completion of such project.

Majority of the employees hired by [respondent] in its Leyte Geothermal Power Projects

had become members of petitioner. In view of that circumstance, the petitioner demands

from the [respondent] for recognition of it as the collective bargaining agent of said

employees and for a CBA negotiation with it. However, the [respondent] did not heed such

demands of the petitioner. Sometime in 1998 when the project was about to be completed,

the [respondent] proceeded to serve Notices of Termination of Employment upon the

employees who are members of the petitioner.

On December 28, 1998, the petitioner filed a Notice of Strike with DOLE against the

[respondent] on the ground of purported commission by the latter of unfair labor practice

for “refusal to bargain collectively, union busting and mass termination.” On the same day,

the petitioner declared a strike and staged such strike.

Secretary of Labor intervened and ordered all workers to return to work. However,

petitioner did not abide.

NLRC: ruled that the employees are PROJECT EMPLOYEES, and the strike as ILLEGAL

Petitioner Union contends that its officers and members performed activities that were

usually necessary and desirable to respondent’s usual business.

ISSUE: WON they are project employees

HELD: They are PROJECT EMPLOYEES

Article 280 of the Labor Code contemplates four (4) kinds of employees:

(a) regular employees or those who have been “engaged to perform activities which are

usually necessary or desirable in the usual business or trade of the employer”;

(b) project employees or those “whose employment has been fixed for a specific project or

undertaking[,] the completion or termination of which has been determined at the time of

the engagement of the employee”;

(c) seasonal employees or those who work or perform services which are seasonal in

nature, and the employment is for the duration of the season; and

(d) casual employees or those who are not regular, project, or seasonal employees.

Jurisprudence has added a fifth kind— a fixed-term employee.

By entering into such a contract, an employee is deemed to understand that his

employment is coterminous with the project. He may not expect to be employed

continuously beyond the completion of the project. It is of judicial notice that project

employees engaged for manual services or those for special skills like those of carpenters

or masons, are, as a rule, unschooled. However, this fact alone is not a valid reason for

bestowing special treatment on them or for invalidating a contract of employment. Project

employment contracts are not lopsided agreements in favor of only one party thereto. The

employer’s interest is equally important as that of the employee[s’] for theirs is the

interest that propels economic activity. While it may be true that it is the employer who

drafts project employment contracts with its business interest as overriding consideration,

such contracts do not, of necessity, prejudice the employee. Neither is the employee left

helpless by a prejudicial employment contract. After all, under the law, the interest of the

worker is paramount.

Union’s own admission, both parties had executed the contracts freely and voluntarily

without force, duress or acts tending to vitiate the worker[s’] consent. Thus, we see no

reason not to honor and give effect to the terms and conditions stipulated therein.

The litmus test to determine whether an individual is a project employee lies in setting a

fixed period of employment involving a specific undertaking which completion or

termination has been determined at the time of the particular employee’s engagement.

NOTES:

WHAT IS A PROJECT? In the realm of business and industry, we note that “project” could

refer to one or the other of at least two (2) distinguishable types of activities. Firstly, a

project could refer to a particular job or undertaking that is within the regular or usual

business of the employer company, but which is distinct and separate, and identifiable as

such, from the other undertakings of the company. Such job or undertaking begins and

ends at determined or determinable times. The typical example of this first type of project

is a particular construction job or project of a construction company. A construction

company ordinarily carries out two or more [distinct] identifiable construction projects:

e.g., a twenty-five-storey hotel in Makati; a residential condominium building in Baguio

City; and a domestic air terminal in Iloilo City. Employees who are hired for the carrying out

of one of these separate projects, the scope and duration of which has been determined

and made known to the employees at the time of employment, are properly treated as

“project employees,” and their services may be lawfully terminated at completion of the

project.

The term “project” could also refer to, secondly, a particular job or undertaking that is not

within the regular business of the corporation. Such a job or undertaking must also be

identifiably separate and distinct from the ordinary or regular business operations of the

employer. The job or undertaking also begins and ends at determined or determinable

times.

Republic of the PhilippinesSUPREME COURT

Manila

THIRD DIVISION

G.R. No. 102132. March 19, 1993.

DAVAO INTEGRATED PORT STEVEDORING SERVICES, petitioner, vs. RUBEN V. ABARQUEZ, in his capacity as an accredited Voluntary Arbitrator and THE ASSOCIATION OF TRADE UNIONS (ATU-TUCP), respondents.

Libron, Gaspar & Associates for petitioner.

Bansalan B. Metilla for Association of Trade Unions (ATUTUCP).

SYLLABUS

1. LABOR LAWS AND SOCIAL LEGISLATION; LABOR RELATIONS; COLLECTIVE BARGAINING AGREEMENT; DEFINED; NATURE THEREOF; CONSTRUCTION TO BE PLACED THEREON. — A collective bargaining agreement (CBA), as used in Article 252 of the Labor Code, refers to a contract executed upon request of either the employer or the exclusive bargaining representative incorporating the agreement reached after negotiations with respect to wages, hours of work and all other terms and conditions of employment, including proposals for adjusting any grievances or questions arising under such agreement. While the terms and conditions of a CBA constitute the law between the parties, it is not, however, an ordinary contract to which is applied the principles of law governing ordinary contracts. A CBA, as a labor contract within the contemplation of Article 1700 of

the Civil Code of the Philippines which governs the relations between labor and capital, is not merely contractual in nature but impressed with public interest, thus, it must yield to the common good. As such, it must be construed liberally rather than narrowly and technically, and the courts must place a practical and realistic construction upon it, giving due consideration to the context in which it is negotiated and purpose which it is intended to serve.

2. ID.; ID.; ID.; ID.; ID.; ID.; CASE AT BAR. — It is thus erroneous for petitioner to isolate Section 1, Article VIII of the 1989 CBA from the other related section on sick leave with pay benefits, specifically Section 3 thereof, in its attempt to justify the discontinuance or withdrawal of the privilege of commutation or conversion to cash of the unenjoyed portion of the sick leave benefit to regular intermittent workers. The manner they were deprived of the privilege previously recognized and extended to them by petitioner-company during the lifetime of the CBA of October 16, 1985 until three (3) months from its renewal on April 15, 1989, or a period of three (3) years and nine (9) months, is not only tainted with arbitrariness but likewise discriminatory in nature. It must be noted that the 1989 CBA has two (2) sections on sick leave with pay benefits which apply to two (2) distinct classes of workers in petitioner's company, namely: (1) the regular non-intermittent workers or those workers who render a daily eight-hour service to the company and are governed by Section 1, Article VIII of the 1989 CBA; and (2) intermittent field workers who are members of the regular labor pool and the present regular extra labor pool as of the signing of the agreement on April 15, 1989 or those workers who have irregular working days and are governed by Section 3, Article VIII of the 1989 CBA. It is not disputed that both classes of workers are entitled to sick leave with pay benefits provided they comply with the conditions set forth under Section 1 in relation to the last paragraph of Section 3, to wit: (1) the employee-applicant must be regular or must have rendered at least one year of service with the company; and (2) the application must be accompanied by a certification from a company-designated physician. the phrase "herein sick leave privilege," as used in the last sentence of Section 1, refers to the privilege of having a fixed 15-day sick leave with pay which, as mandated by Section 1, only the non-intermittent workers are entitled to. This fixed 15-day sick leave with pay benefit should be distinguished from the variable number of days of sick leave, not to exceed 15 days, extended to intermittent workers under Section 3 depending on the number of hours of service rendered to the company, including overtime pursuant to the schedule provided therein. It is only fair and reasonable for petitioner-company not to stipulate a fixed 15-day sick leave with pay for its regular intermittent workers since, as the term "intermittent" implies, there is irregularity in their work-days. Reasonable and practical interpretation must be placed on contractual provisions. Interpetatio fienda est ut res magis valeat quam pereat. Such interpretation is to be adopted, that the thing may continue to have efficacy rather than fail.

3. ID.; ID.; ID.; SICK LEAVE BENEFITS; NATURE AND PURPOSE. — Sick leave benefits, like other economic benefits stipulated in the CBA such as maternity leave and vacation leave benefits, among others, are by their nature, intended to be replacements for regular income which otherwise would not be earned because an employee is not working during the period of said leaves. They are non-contributory in nature, in the sense that the employees contribute nothing to the operation of the benefits. By their nature, upon agreement of the parties, they are intended to alleviate the economic condition of the workers.

4. ID.; ID.; JURISDICTION OF VOLUNTARY ARBITRATOR; CASE AT BAR. — Petitioner-company's objection to the authority of the Voluntary Arbitrator to direct the commutation of the unenjoyed portion of the sick leave with pay benefits of intermittent workers in his decision is misplaced. Article 261 of the Labor Code is clear. The questioned directive of the herein public respondent is the necessary consequence of the exercise of his arbitral power as Voluntary Arbitrator under Article 261 of the Labor Code "to hear and decide all unresolved grievances arising from the interpretation or implementation of the Collective Bargaining Agreement." We, therefore, find that no grave abuse of discretion was committed by public respondent in issuing the award

(decision). Moreover, his interpretation of Sections 1 and 3, Article VIII of the 1989 CBA cannot be faulted with and is absolutely correct.

5. ID.; CONDITIONS OF EMPLOYMENT; PROHIBITION AGAINST ELIMINATION OR DIMINUTION OF BENEFITS; BENEFITS GRANTED PURSUANT TO COMPANY PRACTICE OR POLICY CANNOT BE PEREMPTORILY WITHDRAWN. — Whatever doubt there may have been early on was clearly obliterated when petitioner-company recognized the said privilege and paid its intermittent workers the cash equivalent of the unenjoyed portion of their sick leave with pay benefits during the lifetime of the CBA of October 16, 1985 until three (3) months from its renewal on April 15, 1989. Well-settled is it that the said privilege of commutation or conversion to cash, being an existing benefit, the petitioner-company may not unilaterally withdraw, or diminish such benefits. It is a fact that petitioner-company had, on several instances in the past, granted and paid the cash equivalent of the unenjoyed portion of the sick leave benefits of some intermittent workers. Under the circumstances, these may be deemed to have ripened into company practice or policy which cannot be peremptorily withdrawn.

D E C I S I O N

ROMERO, J p:

In this petition for certiorari, petitioner Davao Integrated Port Services Corporation seeks to reverse the Award 1 issued on September 10, 1991 by respondent Ruben V. Abarquez, in his capacity as Voluntary Arbitrator of the National Conciliation and Mediation Board, Regional Arbitration Branch XI in Davao City in Case No. AC-211-BX1-10-003-91 which directed petitioner to grant and extend the privilege of commutation of the unenjoyed portion of the sick leave with pay benefits to its intermittent field workers who are members of the regular labor pool and the present regular extra pool in accordance with the Collective Bargaining Agreement (CBA) executed between petitioner and private respondent Association of Trade Unions (ATU-TUCP), from the time it was discontinued and henceforth.

The facts are as follows:

Petitioner Davao Integrated Port Stevedoring Services (petitioner-company) and private respondent ATU-TUCP (Union), the exclusive collective bargaining agent of the rank and file workers of petitioner-company, entered into a collective bargaining agreement (CBA) on October 16, 1985 which, under Sections 1 and 3, Article VIII thereof, provide for sick leave with pay benefits each year to its employees who have rendered at least one (1) year of service with the company, thus:

"ARTICLE VIII

Section 1. Sick Leaves — The Company agrees to grant 15 days sick leave with pay each year to every regular non-intermittent worker who already rendered at least one year of service with the company. However, such sick leave can only be enjoyed upon certification by a company designated physician, and if the same is not enjoyed within one year period of the current year, any unenjoyed portion thereof, shall be converted to cash and shall be paid at the end of the said one year period. And provided however, that only those regular workers of the company whose work are not intermittent, are entitled to the herein sick leave privilege.

xxx xxx xxx

Section 3. — All intermittent field workers of the company who are members of the Regular Labor Pool shall be entitled to vacation and sick leaves per year of service with pay under the following schedule based on the number of hours rendered including overtime, to wit:

Hours of Service Per Vacation Sick Leave

Calendar Year Leave

Less than 750 NII NII

751 — 825 6 days 6 days

826 — 900 7 7

901 — 925 8 8

926 — 1,050 9 9

1,051 — 1,125 10 10

1,126 — 1,200 11 11

1,201 — 1,275 12 12

1,276 — 1,350 13 13

1,351 — 1,425 14 14

1,426 — 1,500 15 15

The conditions for the availment of the herein vacation and sick leaves shall be in accordance with the above provided Sections 1 and 2 hereof, respectively."

Upon its renewal on April 15, 1989, the provisions for sick leave with pay benefits were reproduced under Sections 1 and 3, Article VIII of the new CBA, but the coverage of the said benefits was expanded to include the "present Regular Extra Labor Pool as of the signing of this Agreement." Section 3, Article VIII, as revised, provides, thus:

"Section 3. — All intermittent field workers of the company who are members of the Regular Labor Pool and present Regular Extra Labor Pool as of the signing of this agreement shall be entitled to vacation and sick leaves per year of service with pay under the following schedule based on the number of hours rendered including overtime, to wit:

Hours of Service Per Vacation Sick Leave

Calendar Year Leave

Less than 750 NII NII

751 — 825 6 days 6 days

826 — 900 7 7

901 — 925 8 8

926 — 1,050 9 9

1,051 — 1,125 10 10

1,126 — 1,200 11 11

1,201 — 1,275 12 12

1,276 — 1,350 13 13

1,351 — 1,425 14 14

1,426 — 1,500 15 15

The conditions for the availment of the herein vacation and sick leaves shall be in accordance with the above provided Sections 1 and 2 hereof, respectively."

During the effectivity of the CBA of October 16, 1985 until three (3) months after its renewal on April 15, 1989, or until July 1989 (a total of three (3) years and nine (9) months), all the field workers of petitioner who are members of the regular labor pool and the present regular extra labor pool who had rendered at least 750 hours up to 1,500 hours were extended sick leave with pay benefits. Any unenjoyed portion thereof at the end of the current year was converted to cash and paid at the end of the said one-year period pursuant to Sections 1 and 3, Article VIII of the CBA. The number of days of their sick leave per year depends on the number of hours of service per calendar year in accordance with the schedule provided in Section 3, Article VIII of the CBA.

The commutation of the unenjoyed portion of the sick leave with pay benefits of the intermittent workers or its conversion to cash was, however, discontinued or withdrawn when petitioner-company under a new assistant manager, Mr. Benjamin Marzo (who replaced Mr. Cecilio Beltran, Jr. upon the latter's resignation in June 1989), stopped the payment of its cash equivalent on the ground that they are not entitled to the said benefits under Sections 1 and 3 of the 1989 CBA.

The Union objected to the said discontinuance of commutation or conversion to cash of the unenjoyed sick leave with pay benefits of petitioner's intermittent workers contending that it is a deviation from the true intent of the parties that negotiated the CBA; that it would violate the principle in labor laws that benefits already extended shall not be taken away and that it would result in discrimination between the non-intermittent and the intermittent workers of the petitioner-company.

Upon failure of the parties to amicably settle the issue on the interpretation of Sections 1 and 3, Article VIII of the 1989 CBA, the Union brought the matter for voluntary arbitration before the National Conciliation and Mediation Board, Regional Arbitration Branch XI at Davao City by way of complaint for enforcement of the CBA. The parties mutually designated public respondent Ruben Abarquez, Jr. to act as voluntary arbitrator.

After the parties had filed their respective position papers, 2 public respondent Ruben Abarquez, Jr. issued on September 10, 1991 an Award in favor of the Union ruling that the regular intermittent

workers are entitled to commutation of their unenjoyed sick leave with pay benefits under Sections 1 and 3 of the 1989 CBA, the dispositive portion of which reads:

"WHEREFORE, premises considered, the management of the respondent Davao Integrated Port Stevedoring Services Corporation is hereby directed to grant and extend the sick leave privilege of the commutation of the unenjoyed portion of the sick leave of all the intermittent field workers who are members of the regular labor pool and the present extra pool in accordance with the CBA from the time it was discontinued and henceforth.

SO ORDERED."

Petitioner-company disagreed with the aforementioned ruling of public respondent, hence, the instant petition.

Petitioner-company argued that it is clear from the language and intent of the last sentence of Section 1, Article VIII of the 1989 CBA that only the regular workers whose work are not intermittent are entitled to the benefit of conversion to cash of the unenjoyed portion of sick leave, thus: ". . . And provided, however, that only those regular workers of the Company whose work are not intermittent are entitled to the herein sick leave privilege."

Petitioner-company further argued that while the intermittent workers were paid the cash equivalent of their unenjoyed sick leave with pay benefits during the previous management of Mr. Beltran who misinterpreted Sections 1 and 3 of Article VIII of the 1985 CBA, it was well within petitioner-company's rights to rectify the error it had committed and stop the payment of the said sick leave with pay benefits. An error in payment, according to petitioner-company, can never ripen into a practice.

We find the arguments unmeritorious.

A collective bargaining agreement (CBA), as used in Article 252 of the Labor Code, refers to a contract executed upon request of either the employer or the exclusive bargaining representative incorporating the agreement reached after negotiations with respect to wages, hours of work and all other terms and conditions of employment, including proposals for adjusting any grievances or questions arising under such agreement.

While the terms and conditions of a CBA constitute the law between the parties, 3 it is not, however, an ordinary contract to which is applied the principles of law governing ordinary contracts. 4 A CBA, as a labor contract within the contemplation of Article 1700 of the Civil Code of the Philippines which governs the relations between labor and capital, is not merely contractual in nature but impressed with public interest, thus, it must yield to the common good. As such, it must be construed liberally rather than narrowly and technically, and the courts must place a practical and realistic construction upon it, giving due consideration to the context in which it is negotiated and purpose which it is intended to serve. 5

It is thus erroneous for petitioner to isolate Section 1, Article VIII of the 1989 CBA from the other related section on sick leave with pay benefits, specifically Section 3 thereof, in its attempt to justify the discontinuance or withdrawal of the privilege of commutation or conversion to cash of the unenjoyed portion of the sick leave benefit to regular intermittent workers. The manner they were deprived of the privilege previously recognized and extended to them by petitioner-company during the lifetime of the CBA of October 16, 1985 until three (3) months from its renewal on April 15, 1989, or a period of three (3) years and nine (9) months, is not only tainted with arbitrariness but likewise discriminatory in nature. Petitioner-company is of the mistaken notion that since the privilege of

commutation or conversion to cash of the unenjoyed portion of the sick leave with pay benefits is found in Section 1, Article VIII, only the regular non-intermittent workers and no other can avail of the said privilege because of the proviso found in the last sentence thereof.

It must be noted that the 1989 CBA has two (2) sections on sick leave with pay benefits which apply to two (2) distinct classes of workers in petitioner's company, namely: (1) the regular non-intermittent workers or those workers who render a daily eight-hour service to the company and are governed by Section 1, Article VIII of the 1989 CBA; and (2) intermittent field workers who are members of the regular labor pool and the present regular extra labor pool as of the signing of the agreement on April 15, 1989 or those workers who have irregular working days and are governed by Section 3, Article VIII of the 1989 CBA.

It is not disputed that both classes of workers are entitled to sick leave with pay benefits provided they comply with the conditions set forth under Section 1 in relation to the last paragraph of Section 3, to wit: (1) the employee-applicant must be regular or must have rendered at least one year of service with the company; and (2) the application must be accompanied by a certification from a company-designated physician.

Sick leave benefits, like other economic benefits stipulated in the CBA such as maternity leave and vacation leave benefits, among others, are by their nature, intended to be replacements for regular income which otherwise would not be earned because an employee is not working during the period of said leaves. 6 They are non-contributory in nature, in the sense that the employees contribute nothing to the operation of the benefits. 7 By their nature, upon agreement of the parties, they are intended to alleviate the economic condition of the workers.

After a careful examination of Section 1 in relation to Section 3, Article VIII of the 1989 CBA in light of the facts and circumstances attendant in the instant case, we find and so hold that the last sentence of Section 1, Article VIII of the 1989 CBA, invoked by petitioner-company does not bar the regular intermittent workers from the privilege of commutation or conversion to cash of the unenjoyed portion of their sick leave with pay benefits, if qualified. For the phrase "herein sick leave privilege," as used in the last sentence of Section 1, refers to the privilege of having a fixed 15-day sick leave with pay which, as mandated by Section 1, only the non-intermittent workers are entitled to. This fixed 15-day sick leave with pay benefit should be distinguished from the variable number of days of sick leave, not to exceed 15 days, extended to intermittent workers under Section 3 depending on the number of hours of service rendered to the company, including overtime pursuant to the schedule provided therein. It is only fair and reasonable for petitioner-company not to stipulate a fixed 15-day sick leave with pay for its regular intermittent workers since, as the term "intermittent" implies, there is irregularity in their work-days. Reasonable and practical interpretation must be placed on contractual provisions. Interpetatio fienda est ut res magis valeat quam pereat. Such interpretation is to be adopted, that the thing may continue to have efficacy rather than fail. 8

We find the same to be a reasonable and practical distinction readily discernible in Section 1, in relation to Section 3, Article VIII of the 1989 CBA between the two classes of workers in the company insofar as sick leave with pay benefits are concerned. Any other distinction would cause discrimination on the part of intermittent workers contrary to the intention of the parties that mutually agreed in incorporating the questioned provisions in the 1989 CBA.

Public respondent correctly observed that the parties to the CBA clearly intended the same sick leave privilege to be accorded the intermittent workers in the same way that they are both given the same treatment with respect to vacation leaves - non-commutable and non-cumulative. If they are treated equally with respect to vacation leave privilege, with more reason should they be on par with each other with respect to sick leave privileges. 9 Besides, if the intention were otherwise, during its

renegotiation, why did not the parties expressly stipulate in the 1989 CBA that regular intermittent workers are not entitled to commutation of the unenjoyed portion of their sick leave with pay benefits?

Whatever doubt there may have been early on was clearly obliterated when petitioner-company recognized the said privilege and paid its intermittent workers the cash equivalent of the unenjoyed portion of their sick leave with pay benefits during the lifetime of the CBA of October 16, 1985 until three (3) months from its renewal on April 15, 1989. Well-settled is it that the said privilege of commutation or conversion to cash, being an existing benefit, the petitioner-company may not unilaterally withdraw, or diminish such benefits. 10 It is a fact that petitioner-company had, on several instances in the past, granted and paid the cash equivalent of the unenjoyed portion of the sick leave benefits of some intermittent workers. 11 Under the circumstances, these may be deemed to have ripened into company practice or policy which cannot be peremptorily withdrawn. 12

Moreover, petitioner-company's objection to the authority of the Voluntary Arbitrator to direct the commutation of the unenjoyed portion of the sick leave with pay benefits of intermittent workers in his decision is misplaced. Article 261 of the Labor Code is clear. The questioned directive of the herein public respondent is the necessary consequence of the exercise of his arbitral power as Voluntary Arbitrator under Article 261 of the Labor Code "to hear and decide all unresolved grievances arising from the interpretation or implementation of the Collective Bargaining Agreement." We, therefore, find that no grave abuse of discretion was committed by public respondent in issuing the award (decision). Moreover, his interpretation of Sections 1 and 3, Article VIII of the 1989 CBA cannot be faulted with and is absolutely correct.

WHEREFORE, in view of the foregoing, the petition is DISMISSED. The award (decision) of public respondent dated September 10, 1991 is hereby AFFIRMED. No costs.

SO ORDERED.

Feliciano, Bidin, Davide, Jr. and Melo, JJ., concur.

Gutierrez, Jr., on terminal leave.