1

G.R. No. 122653 December 12, 1997 of service, whichever is higher, with back wages and 10% of the
monetary award as attorney's fees.
PURE FOODS CORPORATION, petitioner,
vs. Its motion for reconsideration having been denied, 5 the petitioner came
NATIONAL LABOR RELATIONS COMMISSION, RODOLFO to this Court contending that respondent NLRC committed grave abuse
CORDOVA, VIOLETA CRUSIS, ET AL., * respondents. of discretion amounting to lack of jurisdiction in reversing the decision of
the Labor Arbiter.
DAVIDE, JR., J.:
The petitioner submits that the private respondents are now estopped
The crux of this petition for certiorari is the issue of whether employees from questioning their separation from petitioner's employ in view of
hired for a definite period and whose services are necessary and their express conformity with the five-month duration of their
desirable in the usual business or trade of the employer are regular employment contracts. Besides, they fell within the exception provided
employees. in Article 280 of the Labor Code which reads: "[E]xcept 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 private respondents (numbering 906) were hired by petitioner Pure the engagement of the employee." Moreover, the first paragraph of the
Foods Corporation to work for a fixed period of five months at its tuna said article must be read and interpreted in conjunction with the proviso
cannery plant in Tambler, General Santos City. After the expiration of in the second paragraph, which reads: "Provided that any employee
their respective contracts of employment in June and July 1991, their who has rendered at least one year of service, whether such service is
services were terminated. They forthwith executed a "Release and continuous or broken, shall be considered a regular employee with
Quitclaim" stating that they had no claim whatsoever against the respect to the activity in which he is employed . . ." In the instant case,
petitioner. the private respondents were employed for a period of five months only.
In any event, private respondents' prayer for reinstatement is well within
On 29 July 1991, the private respondents filed before the National Labor the purview of the "Release and Quitclaim" they had executed wherein
Relations Commission (NLRC) Sub-Regional Arbitration Branch No. XI, they unconditionally released the petitioner from any and all other
General Santos City, a complaint for illegal dismissal against the claims which might have arisen from their past employment with the
petitioner and its plant manager, Marciano Aganon. 1 This case was petitioner.
docketed as RAB-11-08-50284-91.
In its Comment, the Office of the Solicitor General (OSG) advances the
On 23 December 1992, Labor Arbiter Arturo P. Aponesto handed down argument that the private respondents were regular employees, since
a decision 2 dismissing the complaint on the ground that the private they performed activities necessary and desirable in the business or
respondents were mere contractual workers, and not regular trade of the petitioner. The period of employment stipulated in the
employees; hence, they could not avail of the law on security of tenure. contracts of employment was null and void for being contrary to law and
The termination of their services by reason of the expiration of their public policy, as its purpose was to circumvent the law on security of
contracts of employment was, therefore, justified. He pointed out that tenure. The expiration of the contract did not, therefore, justify the
earlier he had dismissed a case entitled "Lakas ng Anak-Pawis-NOWM termination of their employment.
v. Pure Foods Corp." (Case No. RAB-11-02-00088-88) because the
complainants therein were not regular employees of Pure Foods, as The OSG further maintains that the ruling of the then Secretary of Labor
their contracts of employment were for a fixed period of five months. and Employment in LAP-NOWM v. Pure Foods Corporation is not
Moreover, in another case involving the same contractual workers of binding on this Court; neither is that ruling controlling, as the said case
Pure Foods (Case No. R-196-ROXI-MED-UR-55-89), then Secretary of involved certification election and not the issue of the nature of private
Labor Ruben Torres held, in a Resolution dated 30 April 1990, that the respondents' employment. It also considers private respondents'
said contractual workers were not regular employees. quitclaim as ineffective to bar the enforcement for the full measure of
their legal rights.
The Labor Arbiter also observed that an order for private respondents'
reinstatement would result in the reemployment of more than 10,000 The private respondents, on the other hand, argue that contracts with a
former contractual employees of the petitioner. Beside, by executing a specific period of employment may be given legal effect provided,
"Release and Quitclaim," the private respondents had waived and however, that they are not intended to circumvent the constitutional
relinquished whatever right they might have against the petitioner. guarantee on security of tenure. They submit that the practice of the
petitioner in hiring workers to work for a fixed duration of five months
The private respondents appealed from the decision to the National only to replace them with other workers of the same employment
Labor Relations Commission (NLRC), Fifth Division, in Cagayan de Oro duration was apparently to prevent the regularization of these so-called
City, which docketed the case as NLRC CA No. M-001323-93. "casuals," which is a clear circumvention of the law on security of
tenure.
On 28 October 1994, the NLRC affirmed the Labor Arbiter's
decision. 3 However, on private respondents' motion for reconsideration, We find the petition devoid of merit.
the NLRC rendered another decision on 30 January 1995 4 vacating and
setting aside its decision of 28 October 1994 and holding that the Article 280 of the Labor Code defines regular and casual employment
private respondent and their co-complainants were regular employees. as follows:
It declared that the contract of employment for five months was a
"clandestine scheme employed by [the petitioner] to stifle [private
respondents'] right to security of tenure" and should therefore be struck Art. 280. Regular and Casual Employment. — The
down and disregarded for being contrary to law, public policy, and provisions of written agreement to the contrary
morals. Hence, their dismissal on account of the expiration of their notwithstanding and regardless of the oral argument
respective contracts was illegal. 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
Accordingly, the NLRC ordered the petitioner to reinstate the private desirable in the usual business or trade of the
respondents to their former position without loss of seniority rights and employer, except where the employment has been
other privileges, with full back wages; and in case their reinstatement fixed for a specific project or undertaking the
would no longer be feasible, the petitioner should pay them separation completion or termination of which has been
pay equivalent to one-month pay or one-half-month pay for every year determined at the time of the engagement of the
 2

employee or where the work or services to be petitioner] KNOWINGLY and VOLUNTARILY

performed is seasonal in nature and the agreed to the 5-month employment contract.
employment is for the duration of the season. Cannery workers are never on equal terms with
their employers. Almost always, they agree to any
An employment shall be deemed to be casual if it is terms of an employment contract just to get
not covered by the preceding paragraph; Provided, employed considering that it is difficult to find work
That, any employee who has rendered at least one given their ordinary qualifications. Their freedom to
year of service, whether such service is continuous contract is empty and hollow because theirs is the
or broken, shall be considered a regular employee freedom to starve if they refuse to work as casual or
with respect to the activity in which he is employed contractual workers. Indeed, to the unemployed,
and his employment shall continue while such security of tenure has no value. It could not then be
activity exists. said that petitioner and private respondents "dealt
with each other on more or less equal terms with no
moral dominance whatever being exercised by the
Thus, the two kinds of regular employees are (1) those who are former over the latter. 10
engaged to perform activities which are necessary or desirable in the
usual business or trade of the employer; and (2) those casual
employees who have rendered at least one year of service, whether The petitioner does not deny or rebut private respondents' averments
continuous or broken, with respect to the activity in which they are (1) that the main bulk of its workforce consisted of its so-called "casual"
employed.6 employees; (2) that as of July 1991, "casual" workers numbered 1,835;
and regular employee, 263; (3) that the company hired "casual" every
month for the duration of five months, after which their services were
In the instant case, the private respondents' activities consisted in the terminated and they were replaced by other "casual" employees on the
receiving, skinning, loining, packing, and casing-up of tuna fish which same five-month duration; and (4) that these "casual" employees were
were then exported by the petitioner. Indisputably, they were performing actually doing work that were necessary and desirable in petitioner's
activities which were necessary and desirable in petitioner's business or usual business.
trade.
As a matter of fact, the petitioner even stated in its position paper
Contrary to petitioner's submission, the private respondents could not submitted to the Labor Arbiter that, according to its records, the
be regarded as having been hired for a specific project or undertaking. previous employees of the company hired on a five-month basis
The term "specific project or undertaking" under Article 280 of the Labor numbered about 10,000 as of July 1990. This confirms private
Code contemplates an activity which is not commonly or habitually respondents' allegation that it was really the practice of the company to
performed or such type of work which is not done on a daily basis but hire workers on a uniformly fixed contract basis and replace them upon
only for a specific duration of time or until completion; the services the expiration of their contracts with other workers on the same
employed are then necessary and desirable in the employer's usual employment duration.
business only for the period of time it takes to complete the project.7
This scheme of the petitioner was apparently designed to prevent the
The fact that the petitioner repeatedly and continuously hired workers to private respondents and the other "casual" employees from attaining the
do the same kind of work as that performed by those whose contracts status of a regular employee. It was a clear circumvention of the
had expired negates petitioner's contention that those workers were employees' right to security of tenure and to other benefits like minimum
hired for a specific project or undertaking only. wage, cost-of-living allowance, sick leave, holiday pay, and 13th month
pay. 11 Indeed, the petitioner succeeded in evading the application of
Now on the validity of private respondents' five-month contracts of labor laws. Also, it saved itself from the trouble or burden of establishing
employment. In the leading case of Brent School, a just cause for terminating employees by the simple expedient of
Inc. v. Zamora, 8 which was reaffirmed in numerous subsequent refusing to renew the employment contracts.
cases, 9 this Court has upheld the legality of fixed-term employment. It
ruled that the decisive determinant in term employment should not be The five-month period specified in private respondents' employment
the activities that the employee is called upon to perform but the day contracts having been imposed precisely to circumvent the
certain agreed upon by the parties for the commencement and constitutional guarantee on security of tenure should, therefore, be
termination of their employment relationship. But, this Court went on to struck down or disregarded as contrary to public policy or morals. 12 To
say that where from the circumstances it is apparent that the periods uphold the contractual arrangement between the petitioner and the
have been imposed to preclude acquisition of tenurial security by the private respondents would, in effect, permit the former to avoid hiring
employee, they should be struck down or disregarded as contrary to permanent or regular employees by simply hiring them on a temporary
public policy and morals. or casual basis, thereby violating the employees' security of tenure in
their jobs. 13
Brent also laid down the criteria under which term employment cannot
be said to be in circumvention of the law on security of tenure: The execution by the private respondents of a "Release and Quitclaim"
did not preclude them from questioning the termination of their services.
1) The fixed period of employment was knowingly and voluntarily Generally, quitclaims by laborers are frowned upon as contrary to public
agreed upon by the parties without any force, duress, or improper policy and are held to be ineffective to bar recovery for the full measure
pressure being brought to bear upon the employee and absent any of the workers' rights. 14 The reason for the rule is that the employer and
other circumstances vitiating his consent; or the employee do not stand on the same footing. 15

2) It satisfactorily appears that the employer and the employee dealt Notably, the private respondents lost not time in filing a complaint for
with each other on more or less equal terms with no moral dominance illegal dismissal. This act is hardly expected from employees who
exercised by the former over the latter. 10 voluntarily and freely consented to their dismissal. 16

None of these criteria had been met in the present case. As pointed out The NLRC was, thus, correct in finding that the private respondents
by the private respondents: were regular employees and that they were illegally dismissed from their
jobs. Under Article 279 of the Labor Code and the recent
[I]t could not be supposed that private respondents jurisprudence, 17 the legal consequence of illegal dismissal is
and all other so-called "casual" workers of [the reinstatement without loss of seniority rights and other privileges, with
 3

full back wages computed from the time of dismissal up to the time of On June 11, 2004, Aliling and WWWEC inked an Employment
actual reinstatement, without deducting the earnings derived elsewhere Contract7 under the following terms, among others:
pending the resolution of the case.
 Conversion to regular status shall be determined on the basis
However, since reinstatement is no longer possible because the of work performance; and
petitioner's tuna cannery plant had, admittedly, been close in November  Employment services may, at any time, be terminated for just
1994, 18 the proper award is separation pay equivalent to one month pay cause or in accordance with the standards defined at the time
or one-half month pay for every year of service, whichever is higher, to of engagement.8
be computed from the commencement of their employment up to the
closure of the tuna cannery plant. The amount of back wages must be Training then started. However, instead of a Seafreight Sale
computed from the time the private respondents were dismissed until assignment, WWWEC asked Aliling to handle Ground Express (GX), a
the time petitioner's cannery plant ceased operation. 19 new company product launched on June 18, 2004 involving domestic
cargo forwarding service for Luzon. Marketing this product and finding
WHEREFORE, for lack of merit, the instant petition is DISMISSED and daily contracts for it formed the core of Aliling’s new assignment.
the challenged decision of 30 January 1995 of the National Labor
Relations Commission in NLRC CA No. N-001323-93 is hereby Barely a month after, Manuel F. San Mateo III (San Mateo), WWWEC
AFFIRMED subject to the above modification on the computation of the Sales and Marketing Director, emailed Aliling 9 to express dissatisfaction
separation pay and back wages. with the latter’s performance, thus:

SO ORDERED. Armand,

Bellosillo, Vitug and Kapunan, JJ., concur. My expectations is [sic] that GX Shuttles should be 80% full by the 3rd
week (August 5) after launch (July 15). Pls. make that happen. It has
Footnotes been more than a month since you came in. I am expecting sales to be
pumping in by now. Thanks.

Nonong

G.R. No. 185829 April 25, 2012 Thereafter, in a letter of September 25, 2004, 10 Joseph R. Lariosa
(Lariosa), Human Resources Manager of WWWEC, asked Aliling to
report to the Human Resources Department to explain his absence
ARMANDO ALILING, Petitioner, taken without leave from September 20, 2004.
vs.
JOSE B. FELICIANO, MANUEL F. SAN MATEO III, JOSEPH R.
LARIOSA, and WIDE WIDE WORLD EXPRESS Aliling responded two days later. He denied being absent on the days in
CORPORATION, Respondents. question, attaching to his reply-letter 11 a copy of his timesheet12 which
showed that he worked from September 20 to 24, 2004. Aliling’s
explanation came with a query regarding the withholding of his salary
DECISION corresponding to September 11 to 25, 2004.

VELASCO, JR., J.: In a separate letter dated September 27, 2004, 13 Aliling wrote San
Mateo stating: "Pursuant to your instruction on September 20, 2004, I
The Case hereby tender my resignation effective October 15, 2004." While
WWWEC took no action on his tender, Aliling nonetheless demanded
This Petition for Review on Certiorari under Rule 45 assails and seeks reinstatement and a written apology, claiming in a subsequent letter
to set aside the July 3, 2008 Decision 1 and December 15, 2008 dated October 1, 200414 to management that San Mateo had forced him
Resolution2 of the Court of Appeals (CA), in CA-G.R. SP No. 101309, to resign.
entitled Armando Aliling v. National Labor Relations Commission, Wide
Wide World Express Corporation, Jose B. Feliciano, Manuel F. San Lariosa’s response-letter of October 1, 2004,15 informed Aliling that his
Mateo III and Joseph R. Lariosa. The assailed issuances modified the case was still in the process of being evaluated. On October 6,
Resolutions dated May 31, 20073 and August 31, 20074 rendered by the 2004,16 Lariosa again wrote, this time to advise Aliling of the termination
National Labor Relations Commission (NLRC) in NLRC NCR Case No. of his services effective as of that date owing to his "non-satisfactory
00-10-11166-2004, affirming the Decision dated April 25, 2006 5 of the performance" during his probationary period. Records show that Aliling,
Labor Arbiter. for the period indicated, was paid his outstanding salary which consisted
of:
The Facts
PhP 4,988.18 (salary for the September 25, 2004 payroll)
Via a letter dated June 2, 2004,6 respondent Wide Wide World Express
Corporation (WWWEC) offered to employ petitioner Armando Aliling 1,987.28 (salary for 4 days in October 2004)
(Aliling) as "Account Executive (Seafreight Sales)," with the following
compensation package: a monthly salary of PhP 13,000, transportation
------------------
allowance of PhP 3,000, clothing allowance of PhP 800, cost of living
allowance of PhP 500, each payable on a per month basis and a 14th PhP 6,975.46 Total
month pay depending on the profitability and availability of financial
resources of the company. The offer came with a six (6)-month
probation period condition with this express caveat: "Performance Earlier, however, or on October 4, 2004, Aliling filed a Complaint 17 for
during [sic] probationary period shall be made as basis for confirmation illegal dismissal due to forced resignation, nonpayment of salaries as
to Regular or Permanent Status." well as damages with the NLRC against WWWEC. Appended to the
complaint was Aliling’s Affidavit dated November 12, 2004, 18 in which he
stated: "5. At the time of my engagement, respondents did not make
 4

known to me the standards under which I will qualify as a regular For engaging the services of counsel to protect his interest, complainant
employee." is likewise entitled to a 10% attorney’s fees of the judgment amount.
Such other claims for lack of basis sufficient to support for their grant
Refuting Aliling’s basic posture, WWWEC stated in its Position Paper are unwarranted.
dated November 22, 200419 that, in addition to the letter-offer and
employment contract adverted to, WWWEC and Aliling have signed a WHEREFORE, judgment is hereby rendered ordering respondent
letter of appointment20 on June 11, 2004 containing the following terms company to pay complainant Armando Aliling the sum of THIRTY FIVE
of engagement: THOUSAND EIGHT HUNDRED ELEVEN PESOS (P35,811.00)
representing his salaries and other benefits as discussed above.
Additionally, upon the effectivity of your probation, you and your
immediate superior are required to jointly define your objectives Respondent company is likewise ordered to pay said complainant the
compared with the job requirements of the position. Based on the pre- amount of TEN THOUSAND SEVEN HUNDRED SIXTY SIX PESOS
agreed objectives, your performance shall be reviewed on the 3rd AND 85/100 ONLY (10.766.85) representing his proportionate 13th
month to assess your competence and work attitude. The 5th month month pay for 2004 plus 10% of the total judgment as and by way of
Performance Appraisal shall be the basis in elevating or confirming your attorney’s fees.
employment status from Probationary to Regular.
Other claims are hereby denied for lack of merit. (Emphasis supplied.)
Failure to meet the job requirements during the probation stage means
that your services may be terminated without prior notice and without The labor arbiter gave credence to Aliling’s allegation about not
recourse to separation pay. receiving and, therefore, not bound by, San Mateo’s purported
September 20, 2004 memo. The memo, to reiterate, supposedly
WWWEC also attached to its Position Paper a memo dated September apprised Aliling of the sales quota he was, but failed, to meet. Pushing
20, 200421 in which San Mateo asked Aliling to explain why he should the point, the labor arbiter explained that Aliling cannot be validly
not be terminated for failure to meet the expected job performance, terminated for non-compliance with the quota threshold absent a prior
considering that the load factor for the GX Shuttles for the period July to advisory of the reasonable standards upon which his performance
September was only 0.18% as opposed to the allegedly agreed upon would be evaluated.
load of 80% targeted for August 5, 2004. According to WWWEC, Aliling,
instead of explaining himself, simply submitted a resignation letter. Both parties appealed the above decision to the NLRC, which affirmed
the Decision in toto in its Resolution dated May 31, 2007. The separate
In a Reply-Affidavit dated December 13, 2004,22 Aliling denied having motions for reconsideration were also denied by the NLRC in its
received a copy of San Mateo’s September 20, 2004 letter. Resolution dated August 31, 2007.

Issues having been joined, the Labor Arbiter issued on April 25, 2006 23 a Therefrom, Aliling went on certiorari to the CA, which eventually
Decision declaring Aliling’s termination as unjustified. In its pertinent rendered the assailed Decision, the dispositive portion of which reads:
parts, the decision reads:
WHEREFORE, the petition is PARTLY GRANTED. The assailed
The grounds upon which complainant’s dismissal was based did not Resolutions of respondent (Third Division) National Labor Relations
conform not only the standard but also the compliance required under Commission are AFFIRMED, with the following
Article 281 of the Labor Code, Necessarily, complainant’s termination is MODIFICATION/CLARIFICATION: Respondents Wide Wide World
not justified for failure to comply with the mandate the law requires. Express Corp. and its officers, Jose B. Feliciano, Manuel F. San Mateo
Respondents should be ordered to pay salaries corresponding to the III and Joseph R. Lariosa, are jointly and severally liable to pay
unexpired portion of the contract of employment and all other benefits petitioner Armando Aliling: (A) the sum of Forty Two Thousand Three
amounting to a total of THIRTY FIVE THOUSAND EIGHT HUNDRED Hundred Thirty Three & 50/100 (P42,333.50) as the total money
ELEVEN PESOS (P35,811.00) covering the period from October 6 to judgment, (B) the sum of Four Thousand Two Hundred Thirty Three &
December 7, 2004, computed as follows: 35/100 (P4,233.35) as attorney’s fees, and (C) the additional sum
equivalent to one-half (1/2) month of petitioner’s salary as separation
Unexpired Portion of the Contract: pay.

SO ORDERED.24 (Emphasis supplied.)

Basic Salary P13,000.00
The CA anchored its assailed action on the strength of the following
Transportation 3,000.00 premises: (a) respondents failed to prove that Aliling’s dismal
performance constituted gross and habitual neglect necessary to justify
Clothing Allowance 800.00 his dismissal; (b) not having been informed at the time of his
engagement of the reasonable standards under which he will qualify as
ECOLA 500.00 a regular employee, Aliling was deemed to have been hired from day
one as a regular employee; and (c) the strained relationship existing
between the parties argues against the propriety of reinstatement.
-----------------
P17,300.00
Aliling’s motion for reconsideration was rejected by the CA through the
assailed Resolution dated December 15, 2008.
10/06/04 – 12/07/04
P17,300.00 x 2.7 mos. = P35,811.00 Hence, the instant petition.

Complainant’s 13th month pay proportionately for 2004 was not shown The Issues
to have been paid to complainant, respondent be made liable to him
therefore computed at SIX THOUSAND FIVE HUNDRED THIRTY TWO Aliling raises the following issues for consideration:
PESOS AND 50/100 (P6,532.50).
 5

A. The failure of the Court of Appeals to order reinstatement Petitioner was regularized from the time of the execution of the
(despite its finding that petitioner was illegally dismissed from employment contract on June 11, 2004, although respondent company
employment) is contrary to law and applicable jurisprudence. had arbitrarily shortened his tenure. As pointed out, respondent
company did not make known the reasonable standards under which he
B. The failure of the Court of Appeals to award backwages will qualify as a regular employee at the time of his engagement. Hence,
(even if it did not order reinstatement) is contrary to law and he was deemed to have been hired from day one as a regular
applicable jurisprudence. employee.30 (Emphasis supplied.)

C. The failure of the Court of Appeals to award moral and WWWEC, however, excepts on the argument that it put Aliling on notice
exemplary damages (despite its finding that petitioner was that he would be evaluated on the 3rd and 5th months of his
dismissed to prevent the acquisition of his regular status) is probationary employment. To WWWEC, its efforts translate to sufficient
contrary to law and applicable jurisprudence.25 compliance with the requirement that a probationary worker be apprised
of the reasonable standards for his regularization. WWWEC invokes the
ensuing holding in Alcira v. National Labor Relations Commission 31 to
In their Comment,26 respondents reiterated their position that WWWEC support its case:
hired petitioner on a probationary basis and fired him before he became
a regular employee.
Conversely, an employer is deemed to substantially comply with the rule
on notification of standards if he apprises the employee that he will be
The Court’s Ruling subjected to a performance evaluation on a particular date after his
hiring. We agree with the labor arbiter when he ruled that:
The petition is partly meritorious.
In the instant case, petitioner cannot successfully say that he was never
Petitioner is a regular employee informed by private respondent of the standards that he must satisfy in
order to be converted into regular status. This rans (sic) counter to the
On a procedural matter, petitioner Aliling argues that WWWEC, not agreement between the parties that after five months of service the
having appealed from the judgment of CA which declared Aliling as a petitioner’s performance would be evaluated. It is only but natural that
regular employee from the time he signed the employment contract, is the evaluation should be made vis-à-vis the performance standards for
now precluded from questioning the appellate court’s determination as the job.1âwphi1 Private respondent Trifona Mamaradlo speaks of such
to the nature of his employment. standard in her affidavit referring to the fact that petitioner did not
perform well in his assigned work and his attitude was below par
compared to the company’s standard required of him. (Emphasis
Petitioner errs. The Court has, when a case is on appeal, the authority supplied.)
to review matters not specifically raised or assigned as error if their
consideration is necessary in reaching a just conclusion of the case. We
said as much in Sociedad Europea de Financiacion, SA v. Court of WWWEC’s contention is untenable.
Appeals,27 "It is axiomatic that an appeal, once accepted by this Court,
throws the entire case open to review, and that this Court has the Alcira is cast under a different factual setting. There, the labor arbiter,
authority to review matters not specifically raised or assigned as error the NLRC, the CA, and even finally this Court were one in their findings
by the parties, if their consideration is necessary in arriving at a just that the employee concerned knew, having been duly informed during
resolution of the case." his engagement, of the standards for becoming a regular employee.
This is in stark contrast to the instant case where the element of being
The issue of whether or not petitioner was, during the period material, a informed of the regularizing standards does not obtain. As such, Alcira
probationary or regular employee is of pivotal import. Its resolution is cannot be made to apply to the instant case.
doubtless necessary at arriving at a fair and just disposition of the
controversy. To note, the June 2, 2004 letter-offer itself states that the regularization
standards or the performance norms to be used are still to be agreed
The Labor Arbiter cryptically held in his decision dated April 25, 2006 upon by Aliling and his supervisor. WWWEC has failed to prove that an
that: agreement as regards thereto has been reached. Clearly then, there
were actually no performance standards to speak of. And lest it be
overlooked, Aliling was assigned to GX trucking sales, an activity
Be that as it may, there appears no showing that indeed the said entirely different to the Seafreight Sales he was originally hired and
September 20, 2004 Memorandum addressed to complainant was trained for. Thus, at the time of his engagement, the standards relative
received by him. Moreover, complainant’s tasked where he was to his assignment with GX sales could not have plausibly been
assigned was a new developed service. In this regard, it is noted: communicated to him as he was under Seafreight Sales. Even for this
reason alone, the conclusion reached in Alcira is of little relevant to the
"Due process dictates that an employee be apprised beforehand of the instant case.
conditions of his employment and of the terms of advancement therein.
Precisely, implicit in Article 281 of the Labor Code is the requirement Based on the facts established in this case in light of extant
that reasonable standards be previously made known by the employer jurisprudence, the CA’s holding as to the kind of employment petitioner
to the employee at the time of his engagement (Ibid, citing Sameer enjoyed is correct. So was the NLRC ruling, affirmatory of that of the
Overseas Placement Agency, Inc. vs. NLRC, G.R. No. 132564, October labor arbiter. In the final analysis, one common thread runs through the
20, 1999).28 holding of the labor arbiter, the NLRC and the CA, i.e., petitioner Aliling,
albeit hired from management’s standpoint as a probationary employee,
From our review, it appears that the labor arbiter, and later the NLRC, was deemed a regular employee by force of the following self-
considered Aliling a probationary employee despite finding that he was explanatory provisions:
not informed of the reasonable standards by which his probationary
employment was to be judged. Article 281 of the Labor Code
The CA, on the other hand, citing Cielo v. National Labor Relations ART. 281. Probationary employment. - Probationary employment shall
Commission,29 ruled that petitioner was a regular employee from the not exceed six (6) months from the date the employee started working,
outset inasmuch as he was not informed of the standards by which his unless it is covered by an apprenticeship agreement stipulating a longer
probationary employment would be measured. The CA wrote:
 6

period. The services of an employee who has been engaged on a Failure to meet the job requirements during the probation stage means
probationary basis may be terminated for a just cause or when he fails that your services may be terminated without prior notice and without
to qualify as a regular employee in accordance with reasonable recourse to separation pay. (Emphasis supplied.)
standards made known by the employer to the employee at the time of
his engagement. An employee who is allowed to work after a Respondents further allege that San Mateo’s email dated July 16, 2004
probationary period shall be considered a regular employee. (Emphasis shows that the standards for his regularization were made known to
supplied.) petitioner Aliling at the time of his engagement. To recall, in that email
message, San Mateo reminded Aliling of the sales quota he ought to
Section 6(d) of the Implementing Rules of Book VI, Rule VIII-A of the meet as a condition for his continued employment, i.e., that the GX
Labor Code trucks should already be 80% full by August 5, 2004. Contrary to
respondents’ contention, San Mateo’s email cannot support their
Sec. 6. Probationary employment. – There is probationary employment allegation on Aliling being informed of the standards for his continued
where the employee, upon his engagement, is made to undergo a trial employment, such as the sales quota, at the time of his engagement. As
period where the employee determines his fitness to qualify for regular it were, the email message was sent to Aliling more than a month after
employment, based on reasonable standards made known to him at the he signed his employment contract with WWWEC. The aforequoted
time of engagement. Section 6 of the Implementing Rules of Book VI, Rule VIII-A of the Code
specifically requires the employer to inform the probationary employee
of such reasonable standards at the time of his engagement, not at any
Probationary employment shall be governed by the following rules: time later; else, the latter shall be considered a regular employee. Thus,
pursuant to the explicit provision of Article 281 of the Labor Code,
xxxx Section 6(d) of the Implementing Rules of Book VI, Rule VIII-A of the
Labor Code and settled jurisprudence, petitioner Aliling is deemed a
(d) In all cases of probationary employment, the employer shall make regular employee as of June 11, 2004, the date of his employment
known to the employee the standards under which he will qualify as a contract.
regular employee at the time of his engagement. Where no standards
are made known to the employee at that time, he shall be deemed a Petitioner was illegally dismissed
regular employee. (Emphasis supplied.)
To justify fully the dismissal of an employee, the employer must, as a
To repeat, the labor arbiter, NLRC and the CA are agreed, on the basis rule, prove that the dismissal was for a just cause and that the
of documentary evidence adduced, that respondent WWWEC did not employee was afforded due process prior to dismissal. As a
inform petitioner Aliling of the reasonable standards by which his complementary principle, the employer has the onus of proving with
probation would be measured against at the time of his engagement. clear, accurate, consistent, and convincing evidence the validity of the
The Court is loathed to interfere with this factual determination. As We dismissal.34
have held:
WWWEC had failed to discharge its twin burden in the instant case.
Settled is the rule that the findings of the Labor Arbiter, when affirmed
by the NLRC and the Court of Appeals, are binding on the Supreme First off, the attendant circumstances in the instant case aptly show that
Court, unless patently erroneous. It is not the function of the Supreme the issue of petitioner’s alleged failure to achieve his quota, as a ground
Court to analyze or weigh all over again the evidence already for terminating employment, strikes the Court as a mere afterthought on
considered in the proceedings below. The jurisdiction of this Court in a the part of WWWEC. Consider: Lariosa’s letter of September 25, 2004
petition for review on certiorari is limited to reviewing only errors of law, already betrayed management’s intention to dismiss the petitioner for
not of fact, unless the factual findings being assailed are not supported alleged unauthorized absences. Aliling was in fact made to explain and
by evidence on record or the impugned judgment is based on a he did so satisfactorily. But, lo and behold, WWWEC nonetheless
misapprehension of facts.32 proceeded with its plan to dismiss the petitioner for non-satisfactory
performance, although the corresponding termination letter dated
The more recent Peñafrancia Tours and Travel Transport, Inc., v. October 6, 2004 did not even specifically state Aliling’s "non-satisfactory
Sarmiento33 has reaffirmed the above ruling, to wit: performance," or that Aliling’s termination was by reason of his failure to
achieve his set quota.
Finally, the CA affirmed the ruling of the NLRC and adopted as its own
the latter's factual findings. Long-established is the doctrine that findings What WWWEC considered as the evidence purportedly showing it gave
of fact of quasi-judicial bodies x x x are accorded respect, even finality, Aliling the chance to explain his inability to reach his quota was a
if supported by substantial evidence. When passed upon and upheld by purported September 20, 2004 memo of San Mateo addressed to the
the CA, they are binding and conclusive upon this Court and will not latter. However, Aliling denies having received such letter and WWWEC
normally be disturbed. Though this doctrine is not without exceptions, has failed to refute his contention of non-receipt. In net effect, WWWEC
the Court finds that none are applicable to the present case. was at a loss to explain the exact just reason for dismissing Aliling.

WWWEC also cannot validly argue that "the factual findings being At any event, assuming for argument that the petitioner indeed failed to
assailed are not supported by evidence on record or the impugned achieve his sales quota, his termination from employment on that
judgment is based on a misapprehension of facts." Its very own letter- ground would still be unjustified.
offer of employment argues against its above posture. Excerpts of the
letter-offer: Article 282 of the Labor Code considers any of the following acts or
omission on the part of the employee as just cause or ground for
Additionally, upon the effectivity of your probation, you and your terminating employment:
immediate superior are required to jointly define your objectives
compared with the job requirements of the position. Based on the pre- (a) Serious misconduct or willful disobedience by the
agreed objectives, your performance shall be reviewed on the 3rd employee of the lawful orders of his employer or
month to assess your competence and work attitude. The 5th month representative in connection with his work;
Performance Appraisal shall be the basis in elevating or confirming your
employment status from Probationary to Regular.
(b) Gross and habitual neglect by the employee of his duties;
 7

(c) Fraud or willful breach by the employee of the trust regards to his performance. Your assessment of him would be more
reposed in him by his employer or duly authorized accurate.
representative;
Being an experimental activity and having been launched for the first
(d) Commission of a crime or offense by the employee against time, the sales of GX services could not be reasonably quantified. This
the person of his employer or any immediate member of his would explain why Amador implied in her email that other bases besides
family or his duly authorized representatives; and sales figures will be used to determine Aliling’s performance. And yet,
despite such a neutral observation, Aliling was still dismissed for his
(e) Other causes analogous to the foregoing. (Emphasis dismal sales of GX services. In any event, WWWEC failed to
supplied) demonstrate the reasonableness and the bona fides on the quota
imposition.
In Lim v. National Labor Relations Commission, 35 the Court considered
inefficiency as an analogous just cause for termination of employment Employees must be reminded that while probationary employees do not
under Article 282 of the Labor Code: enjoy permanent status, they enjoy the constitutional protection of
security of tenure. They can only be terminated for cause or when they
otherwise fail to meet the reasonable standards made known to them by
We cannot but agree with PEPSI that "gross inefficiency" falls within the the employer at the time of their engagement. 37 Respondent WWWEC
purview of "other causes analogous to the foregoing," this constitutes, miserably failed to prove the termination of petitioner was for a just
therefore, just cause to terminate an employee under Article 282 of the cause nor was there substantial evidence to demonstrate the standards
Labor Code. One is analogous to another if it is susceptible of were made known to the latter at the time of his engagement. Hence,
comparison with the latter either in general or in some specific detail; or petitioner’s right to security of tenure was breached.
has a close relationship with the latter. "Gross inefficiency" is closely
related to "gross neglect," for both involve specific acts of omission on
the part of the employee resulting in damage to the employer or to his Aliling’s right to procedural due process was violated
business. In Buiser vs. Leogardo, this Court ruled that failure to
observed prescribed standards to inefficiency may constitute just cause As earlier stated, to effect a legal dismissal, the employer must show
for dismissal. (Emphasis supplied.) not only a valid ground therefor, but also that procedural due process
has properly been observed. When the Labor Code speaks of
It did so anew in Leonardo v. National Labor Relations Commission 36 on procedural due process, the reference is usually to the two (2)-written
the following rationale: notice rule envisaged in Section 2 (III), Rule XXIII, Book V of the
Omnibus Rules Implementing the Labor Code, which provides:
An employer is entitled to impose productivity standards for its workers,
and in fact, non-compliance may be visited with a penalty even more Section 2. Standard of due process: requirements of notice. — In all
severe than demotion. Thus, cases of termination of employment, the following standards of due
process shall be substantially observed.
[t]he practice of a company in laying off workers because they failed to
make the work quota has been recognized in this jurisdiction. (Philippine I. For termination of employment based on just causes as defined in
American Embroideries vs. Embroidery and Garment Workers, 26 Article 282 of the Code:
SCRA 634, 639). In the case at bar, the petitioners' failure to meet the
sales quota assigned to each of them constitute a just cause of their (a) A written notice served on the employee specifying the
dismissal, regardless of the permanent or probationary status of their ground or grounds for termination, and giving to said
employment. Failure to observe prescribed standards of work, or to employee reasonable opportunity within which to explain his
fulfill reasonable work assignments due to inefficiency may constitute side;
just cause for dismissal. Such inefficiency is understood to mean failure
to attain work goals or work quotas, either by failing to complete the (b) A hearing or conference during which the employee
same within the allotted reasonable period, or by producing concerned, with the assistance of counsel if the employee so
unsatisfactory results. This management prerogative of requiring desires, is given opportunity to respond to the charge, present
standards may be availed of so long as they are exercised in good his evidence or rebut the evidence presented against him; and
faith for the advancement of the employer's interest. (Emphasis
supplied.)
(c) A written notice [of] termination served on the employee
indicating that upon due consideration of all the circumstance,
In fine, an employee’s failure to meet sales or work quotas falls under grounds have been established to justify his termination.
the concept of gross inefficiency, which in turn is analogous to gross
neglect of duty that is a just cause for dismissal under Article 282 of the
Code. However, in order for the quota imposed to be considered a valid In case of termination, the foregoing notices shall be served on the
productivity standard and thereby validate a dismissal, management’s employee’s last known address.
prerogative of fixing the quota must be exercised in good faith for the
advancement of its interest. The duty to prove good faith, however, MGG Marine Services, Inc. v. NLRC 38 tersely described the mechanics
rests with WWWEC as part of its burden to show that the dismissal was of what may be considered a two-part due process requirement which
for a just cause. WWWEC must show that such quota was imposed in includes the two-notice rule, "x x x one, of the intention to dismiss,
good faith. This WWWEC failed to do, perceptibly because it could not. indicating therein his acts or omissions complained against, and two,
The fact of the matter is that the alleged imposition of the quota was a notice of the decision to dismiss; and an opportunity to answer and
desperate attempt to lend a semblance of validity to Aliling’s illegal rebut the charges against him, in between such notices."
dismissal. It must be stressed that even WWWEC’s sales manager, Eve
Amador (Amador), in an internal e-mail to San Mateo, hedged on King of Kings Transport, Inc. v. Mamac 39 expounded on this procedural
whether petitioner performed below or above expectation: requirement in this manner:

Could not quantify level of performance as he as was tasked to handle a (1) The first written notice to be served on the employees
new product (GX). Revenue report is not yet administered by IT on a should contain the specific causes or grounds for termination
month-to-month basis. Moreover, this in a way is an experimental against them, and a directive that the employees are given the
activity. Practically you have a close monitoring with Armand with opportunity to submit their written explanation within a
 8

reasonable period. "Reasonable opportunity" under the contract of employment dated June 11, 2004 was of no moment. In net
Omnibus Rules means every kind of assistance that effect, as of that date June 11, 2004, Aliling became part of the
management must accord to the employees to enable them to WWWEC organization as a regular employee of the company without a
prepare adequately for their defense. This should be fixed term of employment. Thus, he is entitled to backwages reckoned
construed as a period of at least five calendar days from from the time he was illegally dismissed on October 6, 2004, with a PhP
receipt of the notice xxxx Moreover, in order to enable the 17,300.00 monthly salary, until the finality of this Decision. This
employees to intelligently prepare their explanation and disposition hews with the Court’s ensuing holding in Javellana v.
defenses, the notice should contain a detailed narration of the Belen:40
facts and circumstances that will serve as basis for the charge
against the employees. A general description of the charge Article 279 of the Labor Code, as amended by Section 34 of Republic
will not suffice. Lastly, the notice should specifically mention Act 6715 instructs:
which company rules, if any, are violated and/or which among
the grounds under Art. 288 [of the Labor Code] is being
charged against the employees Art. 279. Security of Tenure. - In cases of regular employment, the
employer shall not terminate the services of an employee except for a
just cause or when authorized by this Title. An employee who is unjustly
(2) After serving the first notice, the employees should dismissed from work shall be entitled to reinstatement without loss of
schedule and conduct a hearing or conference wherein the seniority rights and other privileges and to his full backwages, inclusive
employees will be given the opportunity to (1) explain and of allowances, and to his other benefits or their monetary equivalent
clarify their defenses to the charge against them; (2) present computed from the time his compensation was withheld from him up to
evidence in support of their defenses; and (3) rebut the the time of his actual reinstatement. (Emphasis supplied)
evidence presented against them by the management. During
the hearing or conference, the employees are given the
chance to defend themselves personally, with the assistance Clearly, the law intends the award of backwages and similar benefits to
of a representative or counsel of their choice x x x. accumulate past the date of the Labor Arbiter’s decision until the
dismissed employee is actually reinstated. But if, as in this case,
reinstatement is no longer possible, this Court has consistently ruled
(3) After determining that termination is justified, the employer that backwages shall be computed from the time of illegal dismissal until
shall serve the employees a written notice of termination the date the decision becomes final. (Emphasis supplied.)
indicating that: (1) all the circumstances involving the charge
against the employees have been considered; and (2)
grounds have been established to justify the severance of Additionally, Aliling is entitled to separation pay in lieu of reinstatement
their employment. (Emphasis in the original.) on the ground of strained relationship.

Here, the first and second notice requirements have not been properly In Golden Ace Builders v. Talde,41 the Court ruled:
observed, thus tainting petitioner’s dismissal with illegality.
The basis for the payment of backwages is different from that for the
The adverted memo dated September 20, 2004 of WWWEC award of separation pay.1âwphi1 Separation pay is granted where
supposedly informing Aliling of the likelihood of his termination and reinstatement is no longer advisable because of strained relations
directing him to account for his failure to meet the expected job between the employee and the employer. Backwages represent
performance would have had constituted the "charge sheet," sufficient compensation that should have been earned but were not collected
to answer for the first notice requirement, but for the fact that there is no because of the unjust dismissal. The basis for computing backwages is
proof such letter had been sent to and received by him. In fact, in his usually the length of the employee's service while that for separation
December 13, 2004 Complainant’s Reply Affidavit, Aliling goes on to tag pay is the actual period when the employee was unlawfully prevented
such letter/memorandum as fabrication. WWWEC did not adduce proof from working.
to show that a copy of the letter was duly served upon Aliling. Clearly
enough, WWWEC did not comply with the first notice requirement. As to how both awards should be computed, Macasero v. Southern
Industrial Gases Philippines instructs:
Neither was there compliance with the imperatives of a hearing or
conference. The Court need not dwell at length on this particular breach [T]he award of separation pay is inconsistent with a finding that there
of the due procedural requirement. Suffice it to point out that the record was no illegal dismissal, for under Article 279 of the Labor Code and as
is devoid of any showing of a hearing or conference having been held in a catena of cases, an employee who is dismissed without just
conducted. On the contrary, in its October 1, 2004 letter to Aliling, or cause and without due process is entitled to backwages and
barely five (5) days after it served the notice of termination, WWWEC reinstatement or payment of separation pay in lieu thereof:
acknowledged that it was still evaluating his case. And the written notice
of termination itself did not indicate all the circumstances involving the Thus, an illegally dismissed employee is entitled to two reliefs:
charge to justify severance of employment. backwages and reinstatement. The two reliefs provided are separate
and distinct. In instances where reinstatement is no longer feasible
Aliling is entitled to backwages because of strained relations between the employee and the employer,
and separation pay in lieu of reinstatement separation pay is granted. In effect, an illegally dismissed employee is
entitled to either reinstatement, if viable, or separation pay if
As may be noted, the CA found Aliling’s dismissal as having been reinstatement is no longer viable, and backwages.
illegally effected, but nonetheless concluded that his employment
ceased at the end of the probationary period. Thus, the appellate court The normal consequences of respondents’ illegal dismissal, then, are
merely affirmed the monetary award made by the NLRC, which reinstatement without loss of seniority rights, and payment of
consisted of the payment of that amount corresponding to the unserved backwages computed from the time compensation was withheld up to
portion of the contract of employment. the date of actual reinstatement. Where reinstatement is no longer
viable as an option, separation pay equivalent to one (1) month salary
The case disposition on the award is erroneous. for every year of service should be awarded as an alternative. The
payment of separation pay is in addition to payment of backwages. x x x
As earlier explained, Aliling cannot be rightfully considered as a mere
probationary employee. Accordingly, the probationary period set in the Velasco v. National Labor Relations Commission emphasizes:
 9

The accepted doctrine is that separation pay may avail in lieu of serious anxiety as the result of the actuations of the other party.
reinstatement if reinstatement is no longer practical or in the best Invariably such action must be shown to have been willfully done in bad
interest of the parties. Separation pay in lieu of reinstatement may faith or with ill motive. Bad faith, under the law, does not simply connote
likewise be awarded if the employee decides not to be reinstated. bad judgment or negligence. It imports a dishonest purpose or some
(emphasis in the original; italics supplied) moral obliquity and conscious doing of a wrong, a breach of a known
duty through some motive or interest or ill will that partakes of the nature
Under the doctrine of strained relations, the payment of separation pay of fraud. (Emphasis supplied.)
is considered an acceptable alternative to reinstatement when the latter
option is no longer desirable or viable. On one hand, such payment In alleging that WWWEC acted in bad faith, Aliling has the burden of
liberates the employee from what could be a highly oppressive work proof to present evidence in support of his claim, as ruled in Culili v.
environment. On the other hand, it releases the employer from the Eastern Telecommunications Philippines, Inc.:46
grossly unpalatable obligation of maintaining in its employ a worker it
could no longer trust. According to jurisprudence, "basic is the principle that good faith is
presumed and he who alleges bad faith has the duty to prove the
Strained relations must be demonstrated as a fact, however, to be same." By imputing bad faith to the actuations of ETPI, Culili has the
adequately supported by evidence — substantial evidence to show that burden of proof to present substantial evidence to support the allegation
the relationship between the employer and the employee is indeed of unfair labor practice. Culili failed to discharge this burden and his
strained as a necessary consequence of the judicial controversy. bare allegations deserve no credit.

In the present case, the Labor Arbiter found that actual animosity This was reiterated in United Claimants Association of NEA (UNICAN)
existed between petitioner Azul and respondent as a result of the filing v. National Electrification Administration (NEA),47 in this wise:
of the illegal dismissal case. Such finding, especially when affirmed by
the appellate court as in the case at bar, is binding upon the Court, It must be noted that the burden of proving bad faith rests on the one
consistent with the prevailing rules that this Court will not try facts anew alleging it. As the Court ruled in Culili v. Eastern Telecommunications,
and that findings of facts of quasi-judicial bodies are accorded great Inc., "According to jurisprudence, ‘basic is the principle that good faith is
respect, even finality. (Emphasis supplied.) presumed and he who alleges bad faith has the duty to prove the
same.’" Moreover, in Spouses Palada v. Solidbank Corporation, the
As the CA correctly observed, "To reinstate petitioner [Aliling] would Court stated, "Allegations of bad faith and fraud must be proved by clear
only create an atmosphere of antagonism and distrust, more so that he and convincing evidence."
had only a short stint with respondent company." 42 The Court need not
belabor the fact that the patent animosity that had developed between Similarly, Aliling has failed to overcome such burden to prove bad faith
employer and employee generated what may be considered as the on the part of WWWEC. Aliling has not presented any clear and
arbitrary dismissal of the petitioner. convincing evidence to show bad faith. The fact that he was illegally
dismissed is insufficient to prove bad faith. Thus, the CA correctly ruled
Following the pronouncements of this Court Sagales v. Rustan’s that "[t]here was no sufficient showing of bad faith or abuse of
Commercial Corporation,43 the computation of separation pay in lieu of management prerogatives in the personal action taken against
reinstatement includes the period for which backwages were awarded: petitioner."48 In Lambert Pawnbrokers and Jewelry Corporation v.
Binamira,49 the Court ruled:
Thus, in lieu of reinstatement, it is but proper to award petitioner
separation pay computed at one-month salary for every year of service, A dismissal may be contrary to law but by itself alone, it does not
a fraction of at least six (6) months considered as one whole year. In the establish bad faith to entitle the dismissed employee to moral damages.
computation of separation pay, the period where backwages are The award of moral and exemplary damages cannot be justified solely
awarded must be included. (Emphasis supplied.) upon the premise that the employer dismissed his employee without
authorized cause and due process.
Thus, Aliling is entitled to both backwages and separation pay (in lieu of
reinstatement) in the amount of one (1) month’s salary for every year of The officers of WWWEC cannot be held
service, that is, from June 11, 2004 (date of employment contract) until jointly and severally liable with the company
the finality of this decision with a fraction of a year of at least six (6)
months to be considered as one (1) whole year. As determined by the The CA held the president of WWWEC, Jose B. Feliciano, San Mateo
labor arbiter, the basis for the computation of backwages and and Lariosa jointly and severally liable for the monetary awards of Aliling
separation pay will be Aliling’s monthly salary at PhP 17,300. on the ground that the officers are considered "employers" acting in the
interest of the corporation. The CA cited NYK International Knitwear
Finally, Aliling is entitled to an award of PhP 30,000 as nominal Corporation Philippines (NYK) v. National Labor Relations
damages in consonance with prevailing jurisprudence44 for violation of Commission50 in support of its argument. Notably, NYK in turn cited A.C.
due process. Ransom Labor Union-CCLU v. NLRC.51

Petitioner is not entitled to moral and exemplary damages Such ruling has been reversed by the Court in Alba v.
Yupangco,52 where the Court ruled:
In Nazareno v. City of Dumaguete,45 the Court expounded on the
requisite elements for a litigant’s entitlement to moral damages, thus: By Order of September 5, 2007, the Labor Arbiter denied respondent’s
motion to quash the 3rd alias writ. Brushing aside respondent’s
Moral damages are awarded if the following elements exist in the case: contention that his liability is merely joint, the Labor Arbiter ruled:
(1) an injury clearly sustained by the claimant; (2) a culpable act or
omission factually established; (3) a wrongful act or omission by the Such issue regarding the personal liability of the officers of a corporation
defendant as the proximate cause of the injury sustained by the for the payment of wages and money claims to its employees, as in the
claimant; and (4) the award of damages predicated on any of the cases instant case, has long been resolved by the Supreme Court in a long list
stated Article 2219 of the Civil Code. In addition, the person claiming of cases [A.C. Ransom Labor Union-CLU vs. NLRC (142 SCRA 269)
moral damages must prove the existence of bad faith by clear and and reiterated in the cases of Chua vs. NLRC (182 SCRA 353), Gudez
convincing evidence for the law always presumes good faith. It is not vs. NLRC (183 SCRA 644)]. In the aforementioned cases, the Supreme
enough that one merely suffered sleepless nights, mental anguish, and Court has expressly held that the irresponsible officer of the corporation
 10

(e.g. President) is liable for the corporation’s obligations to its workers. While in Lambert Pawnbrokers and Jewelry Corporation,54 the Court
Thus, respondent Yupangco, being the president of the respondent YL specifically ruled:
Land and Ultra Motors Corp., is properly jointly and severally liable with
the defendant corporations for the labor claims of Complainants Alba However, the award of attorney’s fee is warranted pursuant to Article
and De Guzman. x x x 111 of the Labor Code. Ten (10%) percent of the total award is usually
the reasonable amount of attorney’s fees awarded. It is settled that
xxxx where an employee was forced to litigate and, thus, incur expenses to
protect his rights and interest, the award of attorney’s fees is legally and
As reflected above, the Labor Arbiter held that respondent’s liability is morally justifiable.
solidary.
Finally, legal interest shall be imposed on the monetary awards herein
There is solidary liability when the obligation expressly so states, when granted at the rate of 6% per annum from October 6, 2004 (date of
the law so provides, or when the nature of the obligation so requires. termination) until fully paid.
MAM Realty Development Corporation v. NLRC, on solidary liability of
corporate officers in labor disputes, enlightens: WHEREFORE, the petition is PARTIALLY GRANTED. The July 3, 2008
Decision of the Court of Appeals in CA-G.R. SP No. 101309 is hereby
x x x A corporation being a juridical entity, may act only through its MODIFIED to read:
directors, officers and employees. Obligations incurred by them, acting
as such corporate agents are not theirs but the direct accountabilities of WHEREFORE, the petition is PARTIALLY GRANTED. The assailed
the corporation they represent. True solidary liabilities may at times be Resolutions of respondent (Third Division) National Labor Relations
incurred but only when exceptional circumstances warrant such as, Commission are AFFIRMED, with the following
generally, in the following cases: MODIFICATION/CLARIFICATION: Respondent Wide Wide World
Express Corp. is liable to pay Armando Aliling the following: (a)
1. When directors and trustees or, in appropriate cases, the officers of a backwages reckoned from October 6, 2004 up to the finality of this
corporation: Decision based on a salary of PhP 17,300 a month, with interest at 6%
per annum on the principal amount from October 6, 2004 until fully paid;
(b) the additional sum equivalent to one (1) month salary for every year
(a) vote for or assent to patently unlawful acts of the of service, with a fraction of at least six (6) months considered as one
corporation; whole year based on the period from June 11, 2004 (date of
employment contract) until the finality of this Decision, as separation
(b) act in bad faith or with gross negligence in directing the pay; (c) PhP 30,000 as nominal damages; and (d) Attorney’s Fees
corporate affairs; equivalent to 10% of the total award.

xxxx SO ORDERED.

In labor cases, for instance, the Court has held corporate directors and PRESBITERO J. VELASCO, JR.
officers solidarily liable with the corporation for the termination of Associate Justice
employment of employees done with malice or in bad faith.
WE CONCUR:
A review of the facts of the case does not reveal ample and satisfactory
proof that respondent officers of WWEC acted in bad faith or with malice
in effecting the termination of petitioner Aliling. Even assuming
arguendo that the actions of WWWEC are ill-conceived and erroneous,
respondent officers cannot be held jointly and solidarily with it. Hence,
the ruling on the joint and solidary liability of individual respondents
must be recalled.

Aliling is entitled to Attorney’s Fees and Legal Interest

Petitioner Aliling is also entitled to attorney’s fees in the amount of ten

percent (10%) of his total monetary award, having been forced to litigate
in order to seek redress of his grievances, pursuant to Article 111 of the
Labor Code and following our ruling in Exodus International
Construction Corporation v. Biscocho,53 to wit:

In Rutaquio v. National Labor Relations Commission, this Court held

that:

It is settled that in actions for recovery of wages or where an employee

was forced to litigate and, thus, incur expenses to protect his rights and
interest, the award of attorney’s fees is legally and morally justifiable.

In Producers Bank of the Philippines v. Court of Appeals this Court ruled

that:

Attorney’s fees may be awarded when a party is compelled to litigate or

to incur expenses to protect his interest by reason of an unjustified act
of the other party.