Labor Law Working Conditions

G.R. No. 156367

May 16, 2005

AUTO BUS TRANSPORT SYSTEMS, INC., petitioner, vs. ANTONIO BAUTISTA, respondent. CHICO-NAZARIO, J.: Before Us is a Petition for Review on Certiorari assailing the Decision and 2 3 Resolution of the Court of Appeals affirming the Decision of the National Labor Relations Commission (NLRC). The NLRC ruling modified the Decision of the Labor th Arbiter (finding respondent entitled to the award of 13 month pay and service th incentive leave pay) by deleting the award of 13 month pay to respondent. THE FACTS Since 24 May 1995, respondent Antonio Bautista has been employed by petitioner Auto Bus Transport Systems, Inc. (Autobus), as driver-conductor with travel routes Manila-Tuguegarao via Baguio, Baguio- Tuguegarao via Manila and Manila-Tabuk via Baguio. Respondent was paid on commission basis, seven percent (7%) of the total gross income per travel, on a twice a month basis. On 03 January 2000, while respondent was driving Autobus No. 114 along Sta. Fe, Nueva Vizcaya, the bus he was driving accidentally bumped the rear portion of Autobus No. 124, as the latter vehicle suddenly stopped at a sharp curve without giving any warning. Respondent averred that the accident happened because he was compelled by the management to go back to Roxas, Isabela, although he had not slept for almost twenty-four (24) hours, as he had just arrived in Manila from Roxas, Isabela. Respondent further alleged that he was not allowed to work until he fully paid the amount of P75,551.50, representing thirty percent (30%) of the cost of repair of the damaged buses and that despite respondent’s pleas for reconsideration, the same was ignored by management. After a month, management sent him a letter of termination. Thus, on 02 February 2000, respondent instituted a Complaint for Illegal Dismissal th with Money Claims for nonpayment of 13 month pay and service incentive leave pay against Autobus. Petitioner, on the other hand, maintained that respondent’s employment was replete with offenses involving reckless imprudence, gross negligence, and dishonesty. To support its claim, petitioner presented copies of letters, memos, irregularity reports, and warrants of arrest pertaining to several incidents wherein respondent was involved. Furthermore, petitioner avers that in the exercise of its management prerogative, respondent’s employment was terminated only after the latter was provided with an opportunity to explain his side regarding the accident on 03 January 2000.
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On 29 September 2000, based on the pleadings and supporting evidence presented 4 by the parties, Labor Arbiter Monroe C. Tabingan promulgated a Decision, the dispositive portion of which reads: WHEREFORE, all premises considered, it is hereby found that the complaint for Illegal Dismissal has no leg to stand on. It is hereby ordered DISMISSED, as it is hereby DISMISSED. However, still based on the above-discussed premises, the respondent must pay to the complainant the following: a. his 13 month pay from the date of his hiring to the date of his dismissal, presently computed at P78,117.87; b. his service incentive leave pay for all the years he had been in service with the respondent, presently computed at P13,788.05. All other claims of both complainant and respondent are hereby dismissed 5 for lack of merit. Not satisfied with the decision of the Labor Arbiter, petitioner appealed the decision to the NLRC which rendered its decision on 28 September 2001, the decretal portion of which reads: [T]he Rules and Regulations Implementing Presidential Decree No. 851, particularly Sec. 3 provides: "Section 3. Employers covered. – The Decree shall apply to all employers except to: xxx xxx xxx
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e) employers of those who are paid on purely commission, boundary, or task basis, performing a specific work, irrespective of the time consumed in the performance thereof. xxx." Records show that complainant, in his position paper, admitted that he was paid on a commission basis. In view of the foregoing, we deem it just and equitable to modify the assailed th Decision by deleting the award of 13 month pay to the complainant. … WHEREFORE, the Decision dated 29 September 2000 is MODIFIED by th 6 deleting the award of 13 month pay. The other findings are AFFIRMED.

In other words, the award of service incentive leave pay was maintained. Petitioner thus sought a reconsideration of this aspect, which was subsequently denied in a Resolution by the NLRC dated 31 October 2001. Displeased with only the partial grant of its appeal to the NLRC, petitioner sought the review of said decision with the Court of Appeals which was subsequently denied by the appellate court in a Decision dated 06 May 2002, the dispositive portion of which reads: WHEREFORE, premises considered, the Petition is DISMISSED for lack of merit; and the assailed Decision of respondent Commission in NLRC NCR 7 CA No. 026584-2000 is hereby AFFIRMED in toto. No costs. Hence, the instant petition. ISSUES 1. Whether or not respondent is entitled to service incentive leave; 2. Whether or not the three (3)-year prescriptive period provided under Article 291 of the Labor Code, as amended, is applicable to respondent’s claim of service incentive leave pay. RULING OF THE COURT The disposition of the first issue revolves around the proper interpretation of Article 95 of the Labor Code vis-à-vis Section 1(D), Rule V, Book III of the Implementing Rules and Regulations of the Labor Code which provides: Art. 95. RIGHT TO SERVICE INCENTIVE LEAVE (a) Every employee who has rendered at least one year of service shall be entitled to a yearly service incentive leave of five days with pay. Book III, Rule V: SERVICE INCENTIVE LEAVE SECTION 1. Coverage. – This rule shall apply to all employees except: … (d) Field personnel and other employees whose performance is unsupervised by the employer including those who are engaged on task or contract basis, purely commission basis, or those who are paid in a fixed amount for performing work irrespective of the time consumed in the performance thereof; . . .

A careful perusal of said provisions of law will result in the conclusion that the grant of service incentive leave has been delimited by the Implementing Rules and Regulations of the Labor Code to apply only to those employees not explicitly excluded by Section 1 of Rule V. According to the Implementing Rules, Service Incentive Leave shall not apply to employees classified as "field personnel." The phrase "other employees whose performance is unsupervised by the employer" must not be understood as a separate classification of employees to which service incentive leave shall not be granted. Rather, it serves as an amplification of the interpretation of the definition of field personnel under the Labor Code as those "whose actual hours of work in the field cannot be determined with reasonable 8 certainty." The same is true with respect to the phrase " those who are engaged on task or contract basis, purely commission basis ." Said phrase should be related with "field personnel," applying the rule on ejusdem generis that general and unlimited terms are 9 restrained and limited by the particular terms that they follow. Hence, employees engaged on task or contract basis or paid on purely commission basis are not automatically exempted from the grant of service incentive leave, unless, they fall under the classification of field personnel. Therefore, petitioner’s contention that respondent is not entitled to the grant of service incentive leave just because he was paid on purely commission basis is misplaced. What must be ascertained in order to resolve the issue of propriety of the grant of service incentive leave to respondent is whether or not he is a field personnel. According to Article 82 of the Labor Code, "field personnel" shall refer to nonagricultural employees who regularly perform their duties away from the principal place of business or branch office of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty. This definition is further elaborated in the Bureau of Working Conditions (BWC), Advisory Opinion to 10 Philippine Technical-Clerical Commercial Employees Association which states that: As a general rule, [field personnel] are those whose performance of their job/service is not supervised by the employer or his representative, the workplace being away from the principal office and whose hours and days of work cannot be determined with reasonable certainty; hence, they are paid specific amount for rendering specific service or performing specific work. If required to be at specific places at specific times, employees including drivers cannot be said to be field personnel despite the fact that they are performing work away from the principal office of the employee. [Emphasis ours] To this discussion by the BWC, the petitioner differs and postulates that under said advisory opinion, no employee would ever be considered a field personnel because every employer, in one way or another, exercises control over his employees. Petitioner further argues that the only criterion that should be considered is the nature of work of the employee in that, if the employee’s job requires that he works away from the principal office like that of a messenger or a bus driver, then he is inevitably a field personnel.

We are not persuaded. At this point, it is necessary to stress that the definition of a "field personnel" is not merely concerned with the location where the employee regularly performs his duties but also with the fact that the employee’s performance is unsupervised by the employer. As discussed above, field personnel are those who regularly perform their duties away from the principal place of business of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty. Thus, in order to conclude whether an employee is a field employee, it is also necessary to ascertain if actual hours of work in the field can be determined with reasonable certainty by the employer. In so doing, an inquiry must be made as to whether or not the employee’s time and performance are constantly supervised by the employer. As observed by the Labor Arbiter and concurred in by the Court of Appeals: It is of judicial notice that along the routes that are plied by these bus companies, there are its inspectors assigned at strategic places who board the bus and inspect the passengers, the punched tickets, and the conductor’s reports. There is also the mandatory once-a-week car barn or shop day, where the bus is regularly checked as to its mechanical, electrical, and hydraulic aspects, whether or not there are problems thereon as reported by the driver and/or conductor. They too, must be at specific place as [sic] specified time, as they generally observe prompt departure and arrival from their point of origin to their point of destination. In each and every depot, there is always the Dispatcher whose function is precisely to see to it that the bus and its crew leave the premises at specific times and arrive at the estimated proper time. These, are present in the case at bar. The driver, the complainant herein, was therefore under constant supervision while in the 11 performance of this work. He cannot be considered a field personnel. We agree in the above disquisition. Therefore, as correctly concluded by the appellate court, respondent is not a field personnel but a regular employee who performs tasks usually necessary and desirable to the usual trade of petitioner’s business. Accordingly, respondent is entitled to the grant of service incentive leave. The question now that must be addressed is up to what amount of service incentive leave pay respondent is entitled to. The response to this query inevitably leads us to the correlative issue of whether or not the three (3)-year prescriptive period under Article 291 of the Labor Code is applicable to respondent’s claim of service incentive leave pay. Article 291 of the Labor Code states that all money claims arising from employeremployee relationship shall be filed within three (3) years from the time the cause of action accrued; otherwise, they shall be forever barred. In the application of this section of the Labor Code, the pivotal question to be answered is when does the cause of action for money claims accrue in order to determine the reckoning date of the three-year prescriptive period.

It is settled jurisprudence that a cause of action has three elements, to wit, (1) a right in favor of the plaintiff by whatever means and under whatever law it arises or is created; (2) an obligation on the part of the named defendant to respect or not to violate such right; and (3) an act or omission on the part of such defendant violative of the right of the plaintiff or constituting a breach of the obligation of the defendant to 12 the plaintiff. To properly construe Article 291 of the Labor Code, it is essential to ascertain the time when the third element of a cause of action transpired. Stated differently, in the computation of the three-year prescriptive period, a determination must be made as to the period when the act constituting a violation of the workers’ right to the benefits being claimed was committed. For if the cause of action accrued more than three (3) years before the filing of the money claim, said cause of action has already 13 prescribed in accordance with Article 291. Consequently, in cases of nonpayment of allowances and other monetary benefits, if it is established that the benefits being claimed have been withheld from the employee for a period longer than three (3) years, the amount pertaining to the period beyond the three-year prescriptive period is therefore barred by prescription. The amount that can only be demanded by the aggrieved employee shall be limited to the amount of the benefits withheld within three (3) years before the filing of the 14 complaint. It is essential at this point, however, to recognize that the service incentive leave is a curious animal in relation to other benefits granted by the law to every employee. In the case of service incentive leave, the employee may choose to either use his leave credits or commute it to its monetary equivalent if not exhausted at the end of the 15 year. Furthermore, if the employee entitled to service incentive leave does not use or commute the same, he is entitled upon his resignation or separation from work to the commutation of his accrued service incentive leave. As enunciated by the Court in 16 Fernandez v. NLRC: The clear policy of the Labor Code is to grant service incentive leave pay to workers in all establishments, subject to a few exceptions. Section 2, Rule V, Book III of the Implementing Rules and Regulations provides that "[e]very employee who has rendered at least one year of service shall be entitled to a yearly service incentive leave of five days with pay." Service incentive leave is a right which accrues to every employee who has served "within 12 months, whether continuous or broken reckoned from the date the employee started working, including authorized absences and paid regular holidays unless the working days in the establishment as a matter of practice or policy, or that provided in the employment contracts, is less than 12 months, in which case said period shall be considered as one year." It is also "commutable to its money equivalent if not used or exhausted at the end of the year." In other words, an employee who has served for one year is entitled to it. He may use it as leave days or he may collect its monetary value. To limit the award to three years, as 17 the solicitor general recommends, is to unduly restrict such right. [Italics supplied]

Correspondingly, it can be conscientiously deduced that the cause of action of an entitled employee to claim his service incentive leave pay accrues from the moment the employer refuses to remunerate its monetary equivalent if the employee did not make use of said leave credits but instead chose to avail of its commutation. Accordingly, if the employee wishes to accumulate his leave credits and opts for its commutation upon his resignation or separation from employment, his cause of action to claim the whole amount of his accumulated service incentive leave shall arise when the employer fails to pay such amount at the time of his resignation or separation from employment. Applying Article 291 of the Labor Code in light of this peculiarity of the service incentive leave, we can conclude that the three (3)-year prescriptive period commences, not at the end of the year when the employee becomes entitled to the commutation of his service incentive leave, but from the time when the employer refuses to pay its monetary equivalent after demand of commutation or upon termination of the employee’s services, as the case may be. The above construal of Art. 291, vis-à-vis the rules on service incentive leave, is in keeping with the rudimentary principle that in the implementation and interpretation of the provisions of the Labor Code and its implementing regulations, the workingman’s 18 welfare should be the primordial and paramount consideration. The policy is to extend the applicability of the decree to a greater number of employees who can avail of the benefits under the law, which is in consonance with the avowed policy of the 19 State to give maximum aid and protection to labor. In the case at bar, respondent had not made use of his service incentive leave nor demanded for its commutation until his employment was terminated by petitioner. Neither did petitioner compensate his accumulated service incentive leave pay at the time of his dismissal. It was only upon his filing of a complaint for illegal dismissal, one month from the time of his dismissal, that respondent demanded from his former employer commutation of his accumulated leave credits. His cause of action to claim the payment of his accumulated service incentive leave thus accrued from the time when his employer dismissed him and failed to pay his accumulated leave credits. Therefore, the prescriptive period with respect to his claim for service incentive leave pay only commenced from the time the employer failed to compensate his accumulated service incentive leave pay at the time of his dismissal. Since respondent had filed his money claim after only one month from the time of his dismissal, necessarily, his money claim was filed within the prescriptive period provided for by Article 291 of the Labor Code. WHEREFORE, premises considered, the instant petition is hereby DENIED. The assailed Decision of the Court of Appeals in CA-G.R. SP. No. 68395 is hereby AFFIRMED. No Costs. SO ORDERED.

G.R. No. 96078 January 9, 1992 HILARIO RADA, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION (Second Division) and PHILNOR CONSULTANTS AND PLANNERS, INC., respondents. REGALADO, J.: In this special civil action for certiorari, petitioner Rada seeks to annul the decision of respondent National Labor Relations Commission (NLRC), dated November 19, 1990, reversing the decision of the labor arbiter which ordered the reinstatement of 1 petitioner with backwages and awarded him overtime pay. The facts, as stated in the Comment of private respondent Philnor Consultants and Planners, Inc. (Philnor), are as follows: Petitioner's initial employment with this Respondent was under a "Contract of Employment for a Definite Period" dated July 7, 1977, copy of which is hereto attached and made an integral part hereof as Annex A whereby Petitioner was hired as "Driver" for the construction supervision phase of the Manila North Expressway Extension, Second Stage (hereinafter referred to as MNEE Stage 2) for a term of "about 24 months effective July 1, 1977. xxx xxx xxx Highlighting the nature of Petitioner's employment, Annex A specifically provides as follows: It is hereby understood that the Employer does not have a continuing need for the services of the Employee beyond the termination date of this contract and that the Employee's services shall automatically, and without notice, terminate upon the completion of the above specified phase of the project; and that it is further understood that the engagement of his/her services is coterminus with the same and not with the whole project or other phases thereof wherein other employees of similar position as he/she have been hired. (Par. 7, emphasis supplied) Petitioner's first contract of employment expired on June 30, 1979. Meanwhile, the main project, MNEE Stage 2, was not finished on account of various constraints, not the least of which was inadequate funding, and the same was extended and remained in progress beyond the original period of 2.3 years. Fortunately for the Petitioner, at the time the first contract of employment expired, Respondent was in need of Driver for the extended project. Since Petitioner had the necessary experience and his performance under the first contract of employment was found satisfactory, the position of Driver was offered to Petitioner, which he accepted. Hence a second Contract of Employment for a Definite Period of 10 months, that is, from July 1, 1979 to April 30, 1980 was executed between Petitioner and Respondent on July 7, 1979. . . .

In March 1980 some of the areas or phases of the project were completed, but the bulk of the project was yet to be finished. By that time some of those project employees whose contracts of employment expired or were about to expire because of the completion of portions of the project were offered another employment in the remaining portion of the project. Petitioner was among those whose contract was about to expire, and since his service performance was satisfactory, respondent renewed his contract of employment in April 1980, after Petitioner agreed to the offer. Accordingly, a third contract of employment for a definite period was executed by and between the Petitioner and the Respondent whereby the Petitioner was again employed as Driver for 19 months, from May 1, 1980 to November 30, 1981, . . . This third contract of employment was subsequently extended for a number of times, the last extension being for a period of 3 months, that is, from October 1, 1985 to December 31, 1985, . . . The last extension, from October 1, 1985 to December 31, 1985 (Annex E) covered by an "Amendment to the Contract of Employment with a Definite Period," was not extended any further because Petitioner had no more work to do in the project. This last extension was confirmed by a notice on November 28, 1985 duly acknowledged by the Petitioner the very next day, . . . Sometime in the 2nd week of December 1985, Petitioner applied for "Personnel Clearance" with Respondent dated December 9, 1985 and acknowledged having received the amount of P3,796.20 representing conversion to cash of unused leave credits and financial assistance. Petitioner also released Respondent from all obligations and/or claims, 2 etc. in a "Release, Waiver and Quitclaim" . . . Culled from the records, it appears that on May 20, 1987, petitioner filed before the NLRC, National Capital Region, Department of Labor and Employment, a Complaint for non-payment of separation pay and overtime pay. On June 3, 1987, Philnor filed its Position Paper alleging, inter alia, that petitioner was not illegally terminated since the project for which he was hired was completed; that he was hired under three distinct contracts of employment, each of which was for a definite period, all within the estimated period of MNEE Stage 2 Project, covering different phases or areas of the said project; that his work was strictly confined to the MNEE Stage 2 Project and that he was never assigned to any other project of Philnor; that he did not render overtime services and that there was no demand or claim for him for such overtime pay; that he signed a "Release, Waiver and Quitclaim" releasing Philnor from all obligations and claims; and that Philnor's business is to provide engineering consultancy services, including supervision of construction services, such that it hires employees according to the requirements of the project manning schedule of a particular 3 contract. On July 2, 1987, petitioner filed an Amended Complaint alleging that he was illegally dismissed and that he was not paid overtime pay although he was made to render three hours overtime work form Monday to Saturday for a period of three years.

On July 7, 1987, petitioner filed his Position Paper claiming that he was illegally dismissed since he was a regular employee entitled to security of tenure; that he was not a project employee since Philnor is not engaged in the construction business as to be covered by Policy Instructions No. 20; that the contract of employment for a definite period executed between him and Philnor is against public policy and a clear circumvention of the law designed merely to evade any benefits or liabilities under the statute; that his position as driver was essential, necessary and desirable to the conduct of the business of Philnor; that he rendered overtime work until 6:00 p.m. 4 daily except Sundays and holidays and, therefore, he was entitled to overtime pay. In his Reply to Respondent's Position Paper, petitioner claimed that he was a regular employee pursuant to Article 278(c) of the Labor Code and, thus, he cannot be terminated except for a just cause under Article 280 of the Code; and that the public 5 respondent's ruling in Quiwa vs. Philnor Consultants and Planners, Inc. is not applicable to his case since he was an administrative employee working as a company driver, which position still exists and is essential to the conduct of the 6 business of Philnor even after the completion of his contract of employment. Petitioner likewise avers that the contract of employment for a definite period entered into between him and Philnor was a ploy to defeat the intent of Article 280 of the Labor Code. On July 28, 1987, Philnor filed its Respondent's Supplemental Position Paper, alleging therein that petitioner was not a company driver since his job was to drive the employees hired to work at the MNEE Stage 2 Project to and from the filed office at Sto. Domingo Interchange, Pampanga; that the office hours observed in the project were from 7:00 a.m. to 4:00 p.m. Mondays through Saturdays; that Philnor adopted the policy of allowing certain employees, not necessarily the project driver, to bring home project vehicles to afford fast and free transportation to and from the project field office considering the distance between the project site and the employees' residence, to avoid project delays and inefficiency due to employee tardiness caused by transportation problem; that petitioner was allowed to use a project vehicle which he used to pick up and drop off some ten employees along Epifanio de los Santos Avenue (EDSA), on his way home to Marikina, Metro Manila; that when he was absent or on leave, another employee living in Metro Manila used the same vehicle in transporting the same employees; that the time used by petitioner to and from his residence to the project site from 5:30 a.m. to 7:00 a.m. and from 4:00 p.m. to 6:00 p.m., or about three hours daily, was not overtime work as he was merely enjoying the benefit and convenience of free transportation provided by Philnor, otherwise without such vehicle he would have used at least four hours by using public transportation and spent P12.00 daily fare; that in the case of Quiwa vs. Philnor Consultants and Planners, Inc., supra, the NLRC upheld Philnor's position that Quiwa was a project employee and he was not entitled to termination pay under Policy Instructions No. 20 since his employment was coterminous with the completion of the project. On August 25, 1987, Philnor filed its Respondent's Reply/Comments to Complainant's Rejoinder and Reply, submitting therewith two letters dated January 5, 1985 and February 6, 1985, signed by MNEE Stage 2 Project employees, including herein petitioner, where they asked what termination benefits could be given to them as the MNEE Stage 2 Project was nearing completion, and Philnor's letter-reply dated

February 22, 1985 informing them that they are not entitled to termination benefits as they are contractual/project employees. On August 31, 1989, Labor Arbiter Dominador M. Cruz rendered a decision following dispositive portion:
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with the

1. Petitioner questions the jurisdiction of respondent NLRC in taking cognizance of the appeal filed by Philnor in spite of the latter's failure to file a supersedeas bond within ten days from receipt of the labor arbiter's decision, by reason of which the appeal should be deemed to have been filed out of time. It will be noted, however, that Philnor was able to file a bond although it was made beyond the 10-day reglementary period. While it is true that the payment of the supersedeas bond is an essential requirement in the perfection of an appeal, however, where the fee had been paid although payment was delayed, the broader interests of justice and the desired objective of resolving controversies on the merits demands that the appeal be given due course. Besides, it was within the inherent power of the NLRC to have allowed late payment of the bond, considering that the aforesaid decision of the labor arbiter was received by private respondent on October 3, 1989 and its appeal was duly filed on October 13, 1989. However, said decision did not state the amount awarded as backwages and overtime pay, hence the amount of the supersedeas bond could not be determined. It was only in the order of the NLRC of February 16, 1990 that the amount of the supersedeas bond was specified and which bond, after an extension granted by the NLRC, was timely filed by private respondent. Moreover, as provided by Article 221 of the Labor Code, "in any proceeding before the Commission or any of the Labor Arbiters, the rules of evidence prevailing in Courts of law or equity shall not be controlling and it is the spirit and intention of this Code that the Commission and its members and the Labor Arbiters shall use every and all reasonable means to ascertain the facts in each case speedily and objectively without regard to technicalities of law or procedure, all in the interest of due process. 8 Finally, the issue of timeliness of the appeal being an entirely new and unpleaded matter in the proceedings below it may not now be raised for the first time before this 9 Court. 2. Petitioner postulates that as a regular employee, he is entitled to security of tenure, hence he cannot be terminated without cause. Private respondent Philnor believes otherwise and asserts that petitioner is merely a project employee who was terminated upon the completion of the project for which he was employed. In holding that petitioner is a regular employee, the labor arbiter found that:

WHEREFORE, in view of all the foregoing considerations, judgment is hereby rendered: (1) Ordering the respondent company to reinstate the complainant to his former position without loss of seniority rights and other privileges with full backwages from the time of his dismissal to his actual reinstatement; (2) Directing the respondent company to pay the complainant overtime pay for the three excess hours of work performed during working days from January 1983 to December 1985; and (3) Dismissing all other claims for lack of merit. SO ORDERED. Acting on Philnor's appeal, the NLRC rendered its assailed decision dated November 19, 1990, setting aside the labor arbiter's aforequoted decision and dismissing petitioner's complaint. Hence this petition wherein petitioner charges respondent NLRC with grave abuse of discretion amounting to lack of jurisdiction for the following reasons: 1. The decision of the labor arbiter, dated August 31, 1989, has already become final and executory; 2. The case of Quiwa vs. Philnor Consultants and Planners, Inc. is not binding nor is it applicable to this case; 3. The petitioner is a regular employee with eight years and five months of continuous services for his employer, private respondent Philnor; 4. The claims for overtime services, reinstatement and full backwages are valid and meritorious and should have been sustained; and 5. The decision of the labor arbiter should be reinstated as it is more in accord with the facts, the law and evidence. The petition is devoid of merit.

. . . There is no question that the complainant was employed as driver in the respondent company continuously from July 1, 1977 to December 31, 1985 under various contracts of employment. Similarly, there is no dispute that respondent Philnor Consultant & Planner, Inc., as its business name connotes, has been engaged in providing to its client(e)le engineering consultancy services. The record shows that while the different labor contracts executed by the parties stipulated definite periods of engaging the services of the complainant, yet the latter was suffered to continue performing his job upon the expiration of one contract and the renewal of another. Under these circumstances, the complaint has obtained the status of regular employee, it appearing that he has worked without fail for almost eight years, a fraction of six months considered as one whole year, and that his assigned task as driver was necessary and desirable in the usual

trade/business of the respondent employer. Assuming to be true, as spelled out in the employment contract, that the Employer has no "continuing need for the services of the Employe(e) beyond the termination date of this contract and that the Employee's services shall automatically, and without notice, terminate upon completion of the above specified phase of the project," still we cannot see our way clear why the complainant was hired and his services engaged contract after contract straight from 1977 to 1985 which, to our considered view, lends credence to the contention that he worked as regular driver ferrying early in the morning office personnel to the company main office in Pampanga and bringing back late in the afternoon to Manila, and driving company executives for inspection of construction workers to the jobsites. All told, we believe that the complainant, under the environmental facts obtaining in the case at bar, is a regular employee, the provisions of written agreement to the contrary notwithstanding and regardless of the oral understanding of the 10 parties . . . On the other hand, respondent NLRC declared that, as between the uncorroborated and unsupported assertions of petitioners and those of private respondent which are supported by documents, greater credence should be given the latter. It further held that: Complainant was hired in a specific project or undertaking as driver. While such project was still on-going he was hired several times with his employment period fixed every time his contract was renewed. At the completion of the specific project or undertaking his employment contract was not renewed. We reiterate our ruling in the case of (Quiwa) vs. Philnor Consultants and Planners, Inc., NLRC RAB III 5-1738-84, it is being applicable in this case, viz.: . . . While it is true that the activities performed by him were necessary or desirable in the usual business or trade of the respondent as consultants, planners, contractor and while it is also true that the duration of his employment was for a period of about seven years, these circumstances did not make him a 11 regular employee in contemplation of Article 281 of (the) Labor Code. . . . Our ruling in Sandoval Shipyards, Inc. vs. National Labor Relations Commission, et 12 al. is applicable to the case at bar. Thus: We hold that private respondents were project employees whose work was coterminous with the project or which they were hired. Project employees, as distinguished from regular or non-project employees, are mentioned in section 281 of the Labor Code as those "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."

Policy Instructions No. 20 of the Secretary of Labor, which was issued to stabilize employer-employee relations in the construction industry, provides: Project employees are those employed in connection with a particular construction project. Non-project (regular) employees are those employed by a construction company without reference to any particular project. Project employees are not entitled to termination pay if they are terminated as a result of the completion of the project or any phase thereof in which they are employed, regardless of the number of projects in which they have been employed by a particular construction company. Moreover, the company is not required to obtain clearance from the Secretary of Labor in connection with such termination. The petitioner cited three of its own cases wherein the National Labor Relations Commission, Deputy Minister of Labor and Employment Inciong and the Director of the National Capital Region held that the layoff of its project employees was lawful. Deputy Minister Inciong in TFU Case No. 1530, In Re Sandoval Shipyards, Inc. Application for Clearance to Terminate Employees, rendered the following ruling on February 26, 1979; We feel that there is merit in the contention of the applicant corporation. To our mind, the employment of the employees concerned were fixed for a specific project or undertaking. For the nature of the business the corporation is engaged into is one which will not allow it to employ workers for an indefinite period . It is significant to note that the corporation does not construct vessels for sale or otherwise which will demand continuous productions of ships and will need permanent or regular workers. It merely accepts contracts for shipbuilding or for repair of vessels form third parties and, only, on occasion when it has work contract of this nature that it hires workers to do the job which, needless to say, lasts only for less than a year or longer. The completion of their work or project automatically terminates their employment, in which case, the employer is, under the law, only obliged to render a report on the termination of the employment. (139140, Rollo of G.R. No. 65689) (Emphasis supplied) In Cartagenas, et al. vs. Romago Electric Company, Inc., et al., that:
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we likewise held

As an electrical contractor, the private respondent depends for its business on the contracts it is able to obtain from real estate developers and builders of buildings. Since its work depends on the availability of such contracts or "projects," necessarily the duration of the employment's of this work force is

not permanent but co-terminus with the projects to which they are assigned and from whose payrolls they are paid. It would be extremely burdensome for their employer who, like them, depends on the availability of projects, if it would have to carry them as permanent employees and pay them wages even if there are no projects for them to work on. (Emphasis supplied.) It must be stressed herein that although petitioner worked with Philnor as a driver for eight years, the fact that his services were rendered only for a particular project which took that same period of time to complete categorizes him as a project employee. Petitioner was employed for one specific project. A non-project employee is different in that the employee is hired for more than one project. A non-project employee, vis-a-vis a project employee, is best exemplified in 14 the case of Fegurin, et al. vs. National Labor Relations Commission, et al. wherein four of the petitioners had been working with the company for nine years, one for eight years, another for six years, the shortest term being three years. In holding that petitioners are regular employees, this Court therein explained: Considering the nature of the work of petitioners, that of carpenter, laborer or mason, their respective jobs would actually be continuous and on-going. When a project to which they are individually assigned is completed, they would be assigned to the next project or a phase thereof. In other words, they belonged to a "work pool" from which the company would draw workers for assignment to other projects at its discretion. They are, therefore, actually "non-project employees." From the foregoing, it is clear that petitioner is a project employee considering that he does not belong to a "work pool" from which the company would draw workers for assignment to other projects at its discretion. It is likewise apparent from the facts obtaining herein that petitioner was utilized only for one particular project, the MNEE Stage 2 Project of respondent company. Hence, the termination of herein petitioner is valid by reason of the completion of the project and the expiration of his employment contract. 3. Anent the claim for overtime compensation, we hold that petitioner is entitled to the same. The fact that he picks up employees of Philnor at certain specified points along EDSA in going to the project site and drops them off at the same points on his way back from the field office going home to Marikina, Metro Manila is not merely incidental to petitioner's job as a driver. On the contrary, said transportation arrangement had been adopted, not so much for the convenience of the employees, but primarily for the benefit of the employer, herein private respondent. This fact is inevitably deducible from the Memorandum of respondent company: The herein Respondent resorted to the above transport arrangement because from its previous project construction supervision experiences, Respondent found out that project delays and inefficiencies resulted from employees' tardiness; and that the problem of tardiness, in turn, was aggravated by transportation problems, which varied in degrees in proportion to the distance between the project site and the employees' residence. In view of this lesson from experience, and as a practical, if

expensive, solution to employees' tardiness and its concomitant problems, Respondent adopted the policy of allowing certain employees — not necessarily project drivers — to bring home project vehicles, so that employees could be afforded fast, convenient and free transportation to and 15 from the project field office. . . . Private respondent does not hesitate to admit that it is usually the project driver who is tasked with picking up or dropping off his fellow employees. Proof thereof is the undisputed fact that when petitioner is absent, another driver is supposed to replace him and drive the vehicle and likewise pick up and/or drop off the other employees at the designated points on EDSA. If driving these employees to and from the project site is not really part of petitioner's job, then there would have been no need to find a replacement driver to fetch these employees. But since the assigned task of fetching and delivering employees is indispensable and consequently mandatory, then the time required of and used by petitioner in going from his residence to the field office and back, that is, from 5:30 a.m. to 7:00 a.m. and from 4:00 p.m. to around 6:00 p.m., which the labor arbiter rounded off as averaging three hours each working day, should be paid as overtime work. Quintessentially, petitioner should be given overtime pay for the three excess hours of work performed during working days from January, 1983 to December, 1985. WHEREFORE, subject to the modification regarding the award of overtime pay to herein petitioner, the decision appealed from is AFFIRMED in all other respects. SO ORDERED.

G.R. No. 118506 April 18, 1997 NORMA MABEZA, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, PETER NG/HOTEL SUPREME, respondents. KAPUNAN, J.: This petition seeking the nullification of a resolution of public respondent National Labor Relations Commission dated April 28, 1994 vividly illustrates why courts should be ever vigilant in the preservation of the constitutionally enshrined rights of the working class. Without the protection accorded by our laws and the tempering of courts, the natural and historical inclination of capital to ride roughshod over the rights of labor would run unabated. The facts of the case at bar, culled from the conflicting versions of petitioner and private respondent, are illustrative. Petitioner Norma Mabeza contends that around the first week of May, 1991, she and her co-employees at the Hotel Supreme in Baguio City were asked by the hotel's management to sign an instrument attesting to the latter's compliance with minimum 1 2 wage and other labor standard provisions of law. The instrument provides: JOINT AFFIDAVIT We, SYLVIA IGANA, HERMINIGILDO AQUINO, EVELYN OGOY, MACARIA JUGUETA, ADELAIDA NONOG, NORMA MABEZA, JONATHAN PICART and JOSE DIZON, all of legal ages (sic), Filipinos and residents of Baguio City, under oath, depose and say: 1. That we are employees of Mr. Peter L. Ng of his Hotel Supreme situated at No. 416 Magsaysay Ave., Baguio City. 2. That the said Hotel is separately operated from the Ivy's Grill and Restaurant; 3. That we are all (8) employees in the hotel and assigned in each respective shifts; 4. That we have no complaints against the management of the Hotel Supreme as we are paid accordingly and that we are treated well . 5. That we are executing this affidavit voluntarily without any force or intimidation and for the purpose of informing the authorities concerned and to dispute the alleged report of the Labor Inspector of the Department of Labor and Employment conducted on the said establishment on February 2, 1991. IN WITNESS WHEREOF, we have hereunto set our hands this 7th day of May, 1991 at Baguio City, Philippines.

(Sgd.) (Sgd.) SYLVIA IGAMA HERMINIGILDO AQUINO EVELYN OGOY

(Sgd.)

(Sgd.) (Sgd.) (Sgd.) MACARIA JUGUETA ADELAIDA NONOG NORMA MABEZA. (Sgd.) JONATHAN PICART JOSE DIZON (Sgd.)

SUBSCRIBED AND SWORN to before me this 7th day of May, 1991, at Baguio City, Philippines. Asst. City Prosecutor Petitioner signed the affidavit but refused to go to the City Prosecutor's Office to swear to the veracity and contents of the affidavit as instructed by management. The affidavit was nevertheless submitted on the same day to the Regional Office of the Department of Labor and Employment in Baguio City. As gleaned from the affidavit, the same was drawn by management for the sole purpose of refuting findings of the Labor Inspector of DOLE (in an inspection of respondent's establishment on February 2, 1991) apparently adverse to the private 3 respondent. After she refused to proceed to the City Prosecutor's Office — on the same day the affidavit was submitted to the Cordillera Regional Office of DOLE — petitioner avers that she was ordered by the hotel management to turn over the keys to her living 4 quarters and to remove her belongings from the hotel premises. According to her, respondent strongly chided her for refusing to proceed to the City Prosecutor's Office 5 to attest to the affidavit. She thereafter reluctantly filed a leave of absence from her job which was denied by management. When she attempted to return to work on May 10, 1991, the hotel's cashier, Margarita Choy, informed her that she should not report to work and, instead, continue with her unofficial leave of absence. Consequently, on May 13, 1991, three days after her attempt to return to work, petitioner filed a complaint for illegal dismissal before the Arbitration Branch of the National Labor Relations Commission — CAR Baguio City. In addition to her complaint for illegal dismissal, she alleged underpayment of wages, non-payment of holiday pay, service incentive leave pay, 13th month pay, night differential and other benefits. The complaint was docketed as NLRC Case No. RAB-CAR-05-0198-91 and assigned to Labor Arbiter Felipe P. Pati. Responding to the allegations made in support of petitioner's complaint for illegal dismissal, private respondent Peter Ng alleged before Labor Arbiter Pati that 6 petitioner "surreptitiously left (her job) without notice to the management" and that she actually abandoned her work. He maintained that there was no basis for the money claims for underpayment and other benefits as these were paid in the form of 7 facilities to petitioner and the hotel's other employee. Pointing to the Affidavit of May 7, 1991, the private respondent asserted that his employees actually have no problems with management. In a supplemental answer submitted eleven (11) months

after the original complaint for illegal dismissal was filed, private respondent raised a new ground, loss of confidence, which was supported by a criminal complaint for Qualified Theft he filed before the prosecutor's office of the City of Baguio against 8 petitioner on July 4, 1991. On May 14, 1993, Labor Arbiter Pati rendered a decision dismissing petitioner's complaint on the ground of loss of confidence. His disquisitions in support of his conclusion read as follows: It appears from the evidence of respondent that complainant carted away or stole one (1) blanket, 1 piece bedsheet, 1 piece thermos, 2 pieces towel (Exhibits "9", "9-A," "9-B," "9-C" and "10" pages 12-14 TSN, December 1, 1992). In fact, this was the reason why respondent Peter Ng lodged a criminal complaint against complainant for qualified theft and perjury. The fiscal's office finding a prima facie evidence that complainant committed the crime of qualified theft issued a resolution for its filing in court but dismissing the charge of perjury (Exhibit "4" for respondent and Exhibit "B-7" for complainant). As a consequence, complainant was charged in court for the said crime (Exhibit "5" for respondent and Exhibit "B-6" for the complainant). With these pieces of evidence, complainant committed serious misconduct against her employer which is one of the just and valid grounds for an employer to terminate an employee (Article 282 of the Labor Code as 9 amended). On April 28, 1994, respondent NLRC promulgated its assailed 10 Resolution — affirming the Labor Arbiter's decision. The resolution substantially 11 incorporated the findings of the Labor Arbiter. Unsatisfied, petitioner instituted the instant special civil action for certiorari under Rule 65 of the Rules of Court on the 12 following grounds: 1. WITH ALL DUE RESPECT, THE HONORABLE NATIONAL LABOR RELATIONS COMMISSION COMMITTED A PATENT AND PALPABLE ERROR AMOUNTING TO GRAVE ABUSE OF DISCRETION IN ITS FAILURE TO CONSIDER THAT THE ALLEGED LOSS OF CONFIDENCE IS A FALSE CAUSE AND AN AFTERTHOUGHT ON THE PART OF THE RESPONDENT-EMPLOYER TO JUSTIFY, ALBEIT ILLEGALLY, THE DISMISSAL OF THE COMPLAINANT FROM HER EMPLOYMENT; 2. WITH ALL DUE RESPECT, THE HONORABLE NATIONAL LABOR RELATIONS COMMISSION COMMITTED A PATENT AND PALPABLE ERROR AMOUNTING TO GRAVE ABUSE OF DISCRETION IN ADOPTING THE RULING OF THE LABOR ARBITER THAT THERE WAS NO UNDERPAYMENT OF WAGES AND BENEFITS ON THE BASIS OF EXHIBIT "8" (AN UNDATED SUMMARY OF COMPUTATION PREPARED BY ALLEGEDLY BY RESPONDENT'S EXTERNAL ACCOUNTANT) WHICH

IS TOTALLY INADMISSIBLE AS AN EVIDENCE TO PROVE PAYMENT OF WAGES AND BENEFITS; 3. WITH ALL DUE RESPECT, THE HONORABLE NATIONAL LABOR RELATIONS COMMISSION COMMITTED A PATENT AND PALPABLE ERROR AMOUNTING TO GRAVE ABUSE OF DISCRETION IN FAILING TO CONSIDER THE EVIDENCE ADDUCED BEFORE THE LABOR ARBITER AS CONSTITUTING UNFAIR LABOR PRACTICE COMMITTED BY THE RESPONDENT. The Solicitor General, in a Manifestation in lieu of Comment dated August 8, 1995 rejects private respondent's principal claims and defenses and urges this Court to set 13 aside the public respondent's assailed resolution. We agree. It is settled that in termination cases the employer bears the burden of proof to show that the dismissal is for just cause, the failure of which would mean that the dismissal 14 is not justified and the employee is entitled to reinstatement. In the case at bar, the private respondent initially claimed that petitioner abandoned her job when she failed to return to work on May 8, 1991. Additionally, in order to strengthen his contention that there existed sufficient cause for the termination of petitioner, he belatedly included a complaint for loss of confidence, supporting this with charges that petitioner had stolen a blanket, a bedsheet and two towels from the 15 hotel. Appended to his last complaint was a suit for qualified theft filed with the Baguio City prosecutor's office. From the evidence on record, it is crystal clear that the circumstances upon which private respondent anchored his claim that petitioner "abandoned" her job were not enough to constitute just cause to sanction the termination of her services under Article 283 of the Labor Code. For abandonment to arise, there must be concurrence 16 of two things: 1) lack of intention to work; and 2) the presence of overt acts 17 signifying the employee's intention not to work. In the instant case, respondent does not dispute the fact that petitioner tried to file a leave of absence when she learned that the hotel management was displeased with her refusal to attest to the affidavit. The fact that she made this attempt clearly indicates not an intention to abandon but an intention to return to work after the period of her leave of absence, had it been granted, shall have expired. Furthermore, while absence from work for a prolonged period may suggest abandonment in certain instances, mere absence of one or two days would not be enough to sustain such a claim. The overt act (absence) ought 18 to unerringly point to the fact that the employee has no intention to return to work, which is patently not the case here. In fact, several days after she had been advised to take an informal leave, petitioner tried to resume working with the hotel, to no avail. It was only after she had been repeatedly rebuffed that she filed a case for illegal

dismissal. These acts militate against the private respondent's claim that petitioner abandoned her job. As the Solicitor General in his manifestation observed: Petitioner's absence on that day should not be construed as abandonment of her job. She did not report because the cashier told her not to report anymore, and that private respondent Ng did not want to see her in the hotel premises. But two days later or on the 10th of May, after realizing that she had to clarify her employment status, she again reported for work. However, 19 she was prevented from working by private respondents. We now come to the second cause raised by private respondent to support his contention that petitioner was validly dismissed from her job. Loss of confidence as a just cause for dismissal was never intended to provide employers with a blank check for terminating their employees. Such a vague, allencompassing pretext as loss of confidence, if unqualifiedly given the seal of approval by this Court, could readily reduce to barren form the words of the constitutional guarantee of security of tenure. Having this in mind, loss of confidence should ideally apply only to cases involving employees occupying positions of trust and confidence or to those situations where the employee is routinely charged with the care and custody of the employer's money or property. To the first class belong managerial employees, i.e., those vested with the powers or prerogatives to lay down management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees or effectively recommend such managerial actions; and to the second class belong cashiers, auditors, property custodians, etc., or those who, in the normal and routine exercise of their functions, regularly handle significant amounts of money or property. Evidently, an ordinary chambermaid who has to sign out for linen and other hotel property from the property custodian each day and who has to account for each and every towel or bedsheet utilized by the hotel's guests at the end of her shift would not fall under any of these two classes of employees for which loss of confidence, if ably supported by evidence, would normally apply. 20 Illustrating this distinction, this Court in Marina Port Services, Inc. vs. NLRC, has stated that: To be sure, every employee must enjoy some degree of trust and confidence from the employer as that is one reason why he was employed in the first place. One certainly does not employ a person he distrusts. Indeed, even the lowly janitor must enjoy that trust and confidence in some measure if only because he is the one who opens the office in the morning and closes it at night and in this sense is entrusted with the care or protection of the employer's property. The keys he holds are the symbol of that trust and confidence. By the same token, the security guard must also be considered as enjoying the trust and confidence of his employer, whose property he is safeguarding. Like the janitor, he has access to this property. He too, is charged with its care and protection. Notably, however, and like the janitor again, he is entrusted only with the physical task of protecting that property. The employer's trust and

confidence in him is limited to that ministerial function. He is not entrusted, in the Labor Arbiter's words, with the duties of safekeeping and safeguarding company policies, management instructions, and company secrets such as operation devices. He is not privy to these confidential matters, which are shared only in the higher echelons of management. It is the persons on such levels who, because they discharge these sensitive duties, may be considered holding positions of trust and confidence. The security guard 21 does not belong in such category. More importantly, we have repeatedly held that loss of confidence should not be simulated in order to justify what would otherwise be, under the provisions of law, an illegal dismissal. "It should not be used as a subterfuge for causes which are illegal, improper and unjustified. It must be genuine, not a mere afterthought to justify an 22 earlier action taken in bad faith." In the case at bar, the suspicious delay in private respondent's filing of qualified theft charges against petitioner long after the latter exposed the hotel's scheme (to avoid its obligations as employer under the Labor Code) by her act of filing illegal dismissal charges against the private respondent would hardly warrant serious consideration of loss of confidence as a valid ground for dismissal. Notably, the Solicitor General has himself taken a position opposite the public respondent and has observed that: If petitioner had really committed the acts charged against her by private respondents (stealing supplies of respondent hotel), private respondents should have confronted her before dismissing her on that ground. Private respondents did not do so. In fact, private respondent Ng did not raise the matter when petitioner went to see him on May 9, 1991, and handed him her application for leave. It took private respondents 52 days or up to July 4, 1991 before finally deciding to file a criminal complaint against petitioner, in an obvious attempt to build a case against her. The manipulations of private respondents should not be countenanced.
23

Clearly, the efforts to justify petitioner's dismissal — on top of the private respondent's scheme of inducing his employees to sign an affidavit absolving him from possible violations of the Labor Code — taints with evident bad faith and deliberate malice petitioner's summary termination from employment. Having said this, we turn to the important question of whether or not the dismissal by the private respondent of petitioner constitutes an unfair labor practice. The answer in this case must inevitably be in the affirmative. The pivotal question in any case where unfair labor practice on the part of the employer is alleged is whether or not the employer has exerted pressure, in the form of restraint, interference or coercion, against his employee's right to institute concerted action for better terms and conditions of employment. Without doubt, the act of compelling employees to sign an instrument indicating that the employer observed labor standards provisions of law when he might have not, together with the

act of terminating or coercing those who refuse to cooperate with the employer's scheme constitutes unfair labor practice. The first act clearly preempts the right of the hotel's workers to seek better terms and conditions of employment through concerted action. We agree with the Solicitor General's observation in his manifestation that "[t]his actuation . . . is analogous to the situation envisaged in paragraph (f) of Article 248 of 24 the Labor Code" which distinctly makes it an unfair labor practice "to dismiss, discharge or otherwise prejudice or discriminate against an employee for having 25 given or being about to give testimony" under the Labor Code. For in not giving positive testimony in favor of her employer, petitioner had reserved not only her right to dispute the claim and proffer evidence in support thereof but also to work for better terms and conditions of employment. For refusing to cooperate with the private respondent's scheme, petitioner was obviously held up as an example to all of the hotel's employees, that they could only cause trouble to management at great personal inconvenience. Implicit in the act of petitioner's termination and the subsequent filing of charges against her was the warning that they would not only be deprived of their means of livelihood, but also possibly, their personal liberty. This Court does not normally overturn findings and conclusions of quasi-judicial agencies when the same are ably supported by the evidence on record. However, where such conclusions are based on a misperception of facts or where they patently fly in the face of reason and logic, we will not hesitate to set aside those conclusions. Going into the issue of petitioner's money claims, we find one more salient reason in this case to set things right: the labor arbiter's evaluation of the money claims in this case incredibly ignores existing law and jurisprudence on the matter. Its blatant onesidedness simply raises the suspicion that something more than the facts, the law and jurisprudence may have influenced the decision at the level of the Arbiter. Labor Arbiter Pati accepted hook, line and sinker the private respondent's bare claim that the reason the monetary benefits received by petitioner between 1981 to 1987 were less than minimum wage was because petitioner did not factor in the meals, lodging, electric consumption and water she received during the period in her 26 computations. Granting that meals and lodging were provided and indeed constituted facilities, such facilities could not be deducted without the employer complying first with certain legal requirements. Without satisfying these requirements, the employer simply cannot deduct the value from the employee's ages. First, proof must be shown that such facilities are customarily furnished by the trade. Second, the provision of deductible facilities must be voluntarily accepted in writing by the 27 employee. Finally, facilities must be charged at fair and reasonable value. These requirements were not met in the instant case. Private respondent "failed to present any company policy or guideline to show that the meal and lodging . . . (are) 28 part of the salary;" he failed to provide proof of the employee's written authorization; 29 and, he failed to show how he arrived at the valuations. Curiously, in the case at bench, the only valuations relied upon by the labor arbiter in his decision were figures furnished by the private respondent's own accountant,

without corroborative evidence. On the pretext that records prior to the July 16, 1990 earthquake were lost or destroyed, respondent failed to produce payroll records, receipts and other relevant documents, where he could have, as has been pointed out in the Solicitor General's manifestation, "secured certified copies thereof from the 30 nearest regional office of the Department of Labor, the SSS or the BIR." More significantly, the food and lodging, or the electricity and water consumed by the petitioner were not facilities but supplements. A benefit or privilege granted to an employee for the convenience of the employer is not a facility. The criterion in making a distinction between the two not so much lies in the kind (food, lodging) but the 31 purpose. Considering, therefore, that hotel workers are required to work different shifts and are expected to be available at various odd hours, their ready availability is a necessary matter in the operations of a small hotel, such as the private respondent's hotel. It is therefore evident that petitioner is entitled to the payment of the deficiency in her wages equivalent to the full wage applicable from May 13, 1988 up to the date of her illegal dismissal. Additionally, petitioner is entitled to payment of service incentive leave pay, emergency cost of living allowance, night differential pay, and 13th month pay for the periods alleged by the petitioner as the private respondent has never been able to adduce proof that petitioner was paid the aforestated benefits. However, the claims covering the period of October 1987 up to the time of filing the case on May 13, 1988 are barred by prescription as P.D. 442 (as amended) and its implementing rules limit all money claims arising out of employer-employee 32 relationship to three (3) years from the time the cause of action accrues. We depart from the settled rule that an employee who is unjustly dismissed from work normally should be reinstated without loss of seniority rights and other privileges. Owing to the strained relations between petitioner and private respondent, allowing the former to return to her job would only subject her to possible harassment and future embarrassment. In the instant case, separation pay equivalent to one month's salary for every year of continuous service with the private respondent would be proper, starting with her job at the Belfront Hotel. In addition to separation pay, backwages are in order. Pursuant to R.A. 6715 and our 33 decision in Osmalik Bustamante, et al. vs. National Labor Relations Commission, petitioner is entitled to full backwages from the time of her illegal dismissal up to the date of promulgation of this decision without qualification or deduction. Finally, in dismissal cases, the law requires that the employer must furnish the employee sought to be terminated from employment with two written notices before the same may be legally effected. The first is a written notice containing a statement of the cause(s) for dismissal; the second is a notice informing the employee of the employer's decision to terminate him stating the basis of the dismissal. During the process leading to the second notice, the employer must give the employee ample

opportunity to be heard and defend himself, with the assistance of counsel if he so desires. Given the seriousness of the second cause (qualified theft) of the petitioner's dismissal, it is noteworthy that the private respondent never even bothered to inform petitioner of the charges against her. Neither was petitioner given the opportunity to explain the loss of the articles. It was only almost two months after petitioner had filed a complaint for illegal dismissal, as an afterthought, that the loss was reported to the police and added as a supplemental answer to petitioner's complaint. Clearly, the dismissal of petitioner without the benefit of notice and hearing prior to her termination violated her constitutional right to due process. Under the circumstance an award of One Thousand Pesos (P1,000.00) on top of payment of the deficiency in wages and benefits for the period aforestated would be proper. WHEREFORE, premises considered, the RESOLUTION of the National Labor Relations Commission dated April 24, 1994 is REVERSED and SET ASIDE, with costs. For clarity, the economic benefits due the petitioner are hereby summarized as follows: 1) Deficiency wages and the applicable ECOLA from May 13, 1988 up to the date of petitioner's illegal dismissal; 2) Service incentive leave pay; night differential pay and 13th month pay for the same period; 3) Separation pay equal to one month's salary for every year of petitioner's continuous service with the private respondent starting with her job at the Belfront Hotel; 4) Full backwages, without qualification or deduction, from the date of petitioner's illegal dismissal up to the date of promulgation of this decision pursuant to our ruling 34 in Bustamante vs. NLRC. 5) P1,000.00. ORDERED.