Labor Cases 5-8

7/25/2019 Labor Cases 5-8

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THIRD DIVISION

RAUL G. LOCSIN and G.R. No. 185251

EDDIE B. TOMAQUIN,Petitioners,

Present:

YNARES-SANTIAGO,J.,

Chairperson,

- versus - CHICO-NAZARIO,

VELASCO, JR.,

NACHURA, and

PERALTA,JJ.

PHILIPPINE LONG DISTANCEPromulgated:

TELEPHONE COMPANY,Respondent. October 2, 2009

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D E C I S I O N

VELASCO, JR., J.:

The Case

This Petition for Review on Certiorari under Rule 45 seeks the reversal of the May 6, 2008 Decisio n[1]and November 4, 2008

Resolution[2]of the Court of Appeals (CA) in CA-G.R. SP No. 97398, entitled Philippine Long Distance Telephone Company v

National Labor Relations Commission, Raul G. Locsin and Eddie B. Tomaquin.The assailed decision set aside the Resolutions of the

National Labor Relations Commission (NLRC) dated October 28, 2005 and August 28, 2006 which in turn affirmed the Decision

datedFebruary 13, 2004 of the Labor Arbiter. The assailed resolution, on the other hand, denied petitioners motion for reconsideration

of the assailed decision.

The Facts

On November 1, 1990, respondent Philippine Long Distance Telephone Company (PLDT) and the Security and Safety Corporation of

the Philippines (SSCP) entered into a Security Services Agreement[3](Agreement) whereby SSCP would provide armed security

guards to PLDT to be assigned to its various offices.

Pursuant to such agreement, petitioners Raul Locsin and Eddie Tomaquin, among other security guards, were posted at a PLDT office.

On August 30, 2001, respondent issued a Letter dated August 30, 2001 terminating the Agreement effective October 1, 2001 .[4]

Despite the termination of the Agreement, however, petitioners continued to secure the premises of their assigned office. They were

allegedly directed to remain at their post by representatives of respondent. In support of their contention, petitioners provided the

Labor Arbiter with copies of petitioner Locsins pay slips for the period of January to September 2002 .[5]

Then, on September 30, 2002, petitioners services were terminated.

Thus, petitioners filed a complaint before the Labor Arbiter for illegal dismissal and recovery of money claims such as overtime pay,

holiday pay, premium pay for holiday and rest day, service incentive leave pay, Emergency Cost of Living Allowance, and moral and

exemplary damages against PLDT.

The Labor Arbiter rendered a Decision finding PLDT liable for illegal dismissal. It was explained in the Decision that petitioners were

found to be employees of PLDT and not of SSCP. Such conclusion was arrived at with the factual finding that petitioners continued to

serve as guards of PLDTs offices. As such employees, petitioners were entitled to substantive and procedural due process before

termination of employment. The Labor Arbiter held that respondent failed to observe such due process requirements. The dispositive

portion of the Labor Arbiters Decision reads:
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WHEREFORE, premises considered, judgment is hereby rendered ordering respondent Philippine Long Distance

and Telephone Company (PLDT) to pay complainants Raul E. Locsin and Eddie Tomaquin their separation pay and

back wages computed as follows:

NAME SEPARATION PAY BACKWAGES

1. Raul E. Locsin P127,500.00 P240,954.67

2. Eddie B. Tomaquin P127,500.00 P240,954.67

P736,909.34

All other claims are DISMISSED for want of factual basis.

Let the computation made by the Computation and Examination Unit form part of this decision.

SO ORDERED.

PLDT appealed the above Decision to the NLRC which rendered a Resolution affirming in totothe Arbiters Decision.

Thus, PDLT filed a Motion for Reconsideration of the NLRCs Resolution which was also denied.

Consequently, PLDT filed a Petition for Certiorari with the CA asking for the nullification of the Resolution issued by the NLRC as

well as the Labor Arbiters Decision. The CA rendered the assailed decision granting PLDTs petition and dismissing petitioners

complaint. The dispositive portion of the CA Decision provides:

WHEREFORE, the instant Petition for Certiorari is GRANTED. The Resolutions dated October 28,2005 and August 28, 2006 of the National Labor Relations Commission are ANNULLED and SET ASIDE. Private

respondents complaint against Philippine Long Distance Telephone Company is DISMISSED.

SO ORDERED.

The CA applied the four-fold test in order to determine the existence of an employer-employee relationship between the

parties but did not find such relationship. It determined that SSCP was not a labor-only contractor and was an independent contractor

having substantial capital to operate and conduct its own business. The CA further bolstered its decision by citing the Agreement

whereby it was stipulated that there shall be no employer-employee relationship between the security guards and PLDT.

Anent the pay slips that were presented by petitioners, the CA noted that those were issued by SSCP and not PLDT; hence,

SSCP continued to pay the salaries of petitioners after the Agreement. This fact allegedly proved that petitioners continued to be

employees of SSCP albeit performing their work at PLDTs premises.

From such assailed decision, petitioners filed a motion for reconsideration which was denied in the assailed resolution.

Hence, we have this petition.

The Issues

1. Whether or not; complainants extended services to the respondent for one (1) year from October 1, 2001, the

effectivity of the termination of the contract of complainants agency SSCP, up to September 30, 2002, without a

renewed contract, constitutes an employer-employee relationship between respondent and the complainants.

2. Whether or not; in accordance to the provision of the Article 280 of the Labor Code, complainants extended

services to the respondent for another one (1) year without a contract be considered as contractual employment.

3. Whether or not; in accordance to the provision of the Article 280 of the Labor Code, does complainants

thirteen (13) years of service to the respondent with manifestation to the respondent thirteen (13) years renewal

of its security contract with the complainant agency SSCP, can be considered only as seasonal in nature or fixed

as [specific projects] or undertakings and its completion or termination can be dictated as [controlled] by the

respondent anytime they wanted to.

4. Whether or not; complainants from being an alleged contractual employees of the respondent for thirteen (13)

years as they were then covered by a contract, becomes regular employees of the respondent as the one (1) year

extended services of the complainants were not covered by a contract, and can be considered as direct

employment pursuant to the provision of the Article 280 of the Labor Code.


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5. Whether or not; the Court of Appeals committed grave abuse of discretion when it set aside and [annulled] the

labor [arbiters] decision and of the NLRCs resolution declaring the dismissal of the complainant as illegal.[6]

The Courts Ruling

This petition is hereby granted.

An Employer-Employee

Relationship Existed Between the Parties

It is beyond cavil that there was no employer-employee relationship between the parties from the time of petitioners first

assignment to respondent by SSCP in 1988 until the alleged termination of the Agreement between respondent and SSCP. In fact, this

was the conclusion that was reached by this Court inAbella v. Philippine Long Distance Telephone Company,[7]where we ruled tha

petitioners therein, including herein petitioners, cannot be considered as employees of PLDT. It bears pointing out that petitioners

were among those declared to be employees of their respective security agencies and not of PLDT.

The only issue in this case is whether petitioners became employees of respondent after the Agreement between SSCP and

respondent was terminated.

This must be answered in the affirmative.

Notably, respondent does not deny the fact that petitioners remained in the premises of their offices even after the Agreemen

was terminated. And it is this fact that must be explained.

To recapitulate, the CA, in rendering a decision in favor of respondent, found that: (1) petitioners failed to prove that SSCP

was a labor-only contractor; and (2) petitioners are employees of SSCP and not of PLDT.

In arriving at such conclusions, the CA relied on the provisions of the Agreement, wherein SSCP undertook to supply PLDT

with the required security guards, while furnishing PLDT with a performance bond in the amount of PhP 707,000. Moreover, the CA

gave weight to the provision in the Agreement that SSCP warranted that it carry on an independent business and has substantial capital

or investment in the form of equipment, work premises, and other materials which are necessary in the conduct of its business.

Further, in determining that no employer-employee relationship existed between the parties, the CA quoted the express

provision of the Agreement, stating that no employer-employee relationship existed between the parties herein. The CA disregarded

the pay slips of Locsin considering that they were in fact issued by SSCP and not by PLDT.

From the foregoing explanation of the CA, the fact remains that petitioners remained at their post after the termination of the

Agreement. Notably, in its Comment datedMarch 10, 2009,[8]

respondent never denied that petitioners remained at their postuntil September 30, 2002. While respondent denies the alleged circumstances stated by petitioners, that they were told to remain a

their post by respondents Security Department and that they were informed by SSCP Operations Officer Eduardo Juliano that their

salaries would be coursed through SSCP as per arrangement with PLDT, it does not state why they were not made to vacate their

posts. Respondent said that it did not know why petitioners remained at their posts.

Rule 131, Section 3(y) of the Rules of Court provides:

SEC. 3.Disputable presumptions.The following presumptions are satisfactory if uncontradicted, but may

be contradicted and overcome by other evidence:

x x x x

(y) That things have happened according to the ordinary course of nature and the ordinary habits of life.

In the ordinary course of things, responsible business owners or managers would not allow security guards of an agency with

whom the owners or managers have severed ties with to continue to stay within the business premises. This is because upon the

termination of the owners or managers agreement with the security agency, the agencys undertaking of liability for any damage that

the security guard would cause has already been terminated. Thus, in the event of an accident or otherwise damage caused by such

security guards, it would be the business owners and/or managers who would be liable and not the agency. The business owners or

managers would, therefore, be opening themselves up to liability for acts of security guards over whom the owners or managers

allegedly have no control.

At the very least, responsible business owners or managers would inquire or learn why such security guards were remaining

at their posts, and would have a clear understanding of the circumstances of the guards stay. It is but logical that responsible business

owners or managers would be aware of the situation in their premises.
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We point out that with respondents hypothesis, it would seem that SSCP was paying petitioners salaries while securing

respondents premises despite the termination of their Agreement. Obviously, it would only be respondent that would benefit from such

a situation. And it is seriously doubtful that a security agency that was established for profit would allow its security guards to secure

respondents premises when the Agreement was already terminated.

From the foregoing circumstances, reason dictates that we conclude that petitioners remained at their post under the

instructions of respondent. We can further conclude that respondent dictated upon petitioners that the latter perform their regula

duties to secure the premises during operating hours. This, to our mind and under the circumstances, is sufficient to establish the

existence of an employer-employee relationship. Certainly, the facts as narrated by petitioners are more believable than the irrational

denials made by respondent. Thus, we ruled inLee Eng Hong v. Court of Appeals:[9]

Evidence, to be believed, must not only proceed from the mouth of a credible witness, but it must be credible in

itself such as the common experience and observation of mankind can approve as probable under the circumstances.

We have no test of the truth of human testimony, except its conformity to our knowledge, observation and

experience. Whatever is repugnant to these belongs to the miraculous and is outside judicial cognizance (Castaares

v. Court of Appeals, 92 SCRA 568 [1979]).

To reiterate, while respondent and SSCP no longer had any legal relationship with the termination of the Agreement,

petitioners remained at their post securing the premises of respondent while receiving their salaries, allegedly from SSCP. Clearly

such a situation makes no sense, and the denials proffered by respondent do not shed any light to the situation. It is but reasonable to

conclude that, with the behest and, presumably, directive of respondent, petitioners continued with their services. Evidently, such

areindicia of control that respondent exercised over petitioners.

Such power of control has been explained as the right to control not only the end to be achieved but also the means to be usedin reaching such end.[10]With the conclusion that respondent directed petitioners to remain at their posts and continue with their

duties, it is clear that respondent exercised the power of control over them; thus, the existence of an employer-employee relationship.

In Tongko v. The Manufacturers Life Insurance Co. (Phils.) Inc.,[11]we reiterated the oft repeated rule that control is the most

important element in the determination of the existence of an employer-employee relationship:

In the determination of whether an employer-employee relationship exists between two parties, this Court

applies the four-fold test to determine the existence of the elements of such relationship. InPacific Consultants

International Asia, Inc. v. Schonfeld, the Court set out the elements of an employer-employee relationship, thus:

Jurisprudence is firmly settled that whenever the existence of an employment relationship is in

dispute, four elements constitute the reliable yardstick: (a) the selection and engagement of the employee;

(b) the payment of wages; (c) the power of dismissal; and (d) the employers power to control theemployees conduct. It is the so-called control test which constitutes the most important index of the

existence of the employer-employee relationship that is, whether the employer controls or has reserved the

right to control the employee not only as to the result of the work to be done but also as to the means and

methods by which the same is to be accomplished. Stated otherwise, an employer-employee relationship

exists where the person for whom the services are performed reserves the right to control not only the end

to be achieved but also the means to be used in reaching such end.

Furthermore, Article 106 of the Labor Code contains a provision on contractors, to wit:

Art. 106. Contractor or subcontractor. Whenever an employer enters into a contract with another person for

the performance of the formers work, the employees of the contractor and of the latters subcontractor, if any, shall

be paid in accordance with the provisions of this Code.

In the event that the contractor or subcontractor fails to pay the wages of his employees in accordance with

this Code, the employer shall be jointly and severally liable with his contractor or subcontractor to such employees

to the extent of the work performed under the contract, in the same manner and extent that he is liable to employees

directly employed by him.

The Secretary of Labor and Employment may, by appropriate regulations, restrict or prohibit the

contracting-out of labor to protect the rights of workers established under this Code. In so prohibiting or

restricting, he may make appropriate distinctions between labor-only contracting and job contracting as well

as differentiations within these types of contracting and determine who among the parties involved shall be

considered the employer for purposes of this Code, to prevent any violation or circumvention of any

provision of this Code.
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There is labor-only contracting where the person supplying workers to an employer does not have

substantial capital or investment in the form of tools, equipment, machineries, work premises, among others, and the

workers recruited and placed by such person are performing activities which are directly related to the principal

business of such employer. In such cases, the person or intermediary shall be considered merely as an agent of the

employer who shall be responsible to the workers in the same manner and extent as if the latter were directly

employed by him. (Emphasis supplied.)

Thus, the Secretary of Labor issued Department Order No. 18-2002, Series of 2002, implementing Art. 106 as follows:

Section 5. Prohibition against labor-only contracting.Labor-only contracting is hereby declared prohibited.

For this purpose, labor-only contracting shall refer to an arrangement where the contractor or subcontractor merely

recruits, supplies or places workers to perform a job, work or service for a principal, and any of the following

elements are present:

(i) The contractor or subcontractor does not have substantial capital or investment which relates to

the job, work or service to be performed and the employees recruited, supplied or placed by such contractor

or subcontractor are performing activities which are directly related to the main business of the principal; or

(ii) the contractor does not exercise the right to control over the performance of the work of

the contractual employee.

The foregoing provisions shall be without prejudice to the application of Article 248 (C) of the Labor Code,

as amended.

Substantial capital or investment refers to capital stocks and subscribed capitalization in the case of

corporations, tools, equipment, implements, machineries and work premises, actually and directly used by the

contractor or subcontractor in the performance or completion of the job, work or service contracted out.

The right to control shall refer to the right reserved to the person for whom the services of the contractual

workers are performed, to determine not only the end to be achieved, but also the manner and means to be used in

reaching that end.

On the other hand, Sec. 7 of the department order contains the consequence of such labor-only contracting:

Section 7. Existence of an employer-employee relationship.The contractor or subcontractor shall be

considered the employer of the contractual employee for purposes of enforcing the provisions of the Labor Code and

other social legislation. The principal, however, shall be solidarily liable with the contractor in the event of anyviolation of any provision of the Labor Code, including the failure to pay wages.

The principal shall be deemed the employer of the contractual employee in any of the following cases as

declared by a competent authority:

(a) where there is labor-only contracting; or

(b) where the contracting arrangement falls within the prohibitions provided in Section 6 (Prohibitions)

hereof. (Emphasis supplied.)

Evidently, respondent having the power of control over petitioners must be considered as petitioners employerfrom the

termination of the Agreement onwardsas this was the only time that any evidence of control was exhibited by respondent over

petitioners and in light of our ruling inAbella.[12]Thus, as aptly declared by the NLRC, petitioners were entitled to the rights and

benefits of employees of respondent, including due process requirements in the termination of their services.

Both the Labor Arbiter and NLRC found that respondent did not observe such due process requirements. Having failed to do

so, respondent is guilty of illegal dismissal.

WHEREFORE, we SET ASIDE the CAs May 6, 2008 Decision and November 4, 2008 Resolution in CA-G.R. SP No

97398. We hereby REINSTATEthe Labor Arbiters Decision dated February 13, 2004 and the NLRCs Resolutions dated October 28,

2005 and August 28, 2006.

No costs.

SO ORDERED.
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Republic of the Philippines

SUPREME COURT

Manila

EN BANC

PEOPLES BROADCASTING SERVICE

(BOMBO RADYO PHILS., INC.),Petitioner,

- versus -

THE SECRETARY OF THE

DEPARTMENT OF LABOR AND

EMPLOYMENT, THE REGIONAL

DIRECTOR, DOLE REGION VII, and

JANDELEON JUEZAN,

Respondents.

G.R. No. 179652

Present:

CORONA, C.J.,

CARPIO,

VELASCO, JR.,

LEONARDO-DE CASTRO,

BRION,

PERALTA,

BERSAMIN,

DEL CASTILLO,*

ABAD,

VILLARAMA, JR.,

PEREZ,

MENDOZA,

SERENO,REYES, and

PERLAS-BERNABE,JJ.

Promulgated:

March 6, 2012

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R E S O L U T I O N

VELASCO, JR., J.:

In a Petition for Certiorari under Rule 65, petitioner Peoples Broadcasting Service, Inc. (Bombo Radyo Phils., Inc.) questioned theDecision and Resolution of the Court of Appeals (CA) dated October 26, 2006 and June 26, 2007, respectively, in C.A. G.R. CEB-SP

No. 00855.

Private respondent Jandeleon Juezan filed a complaint against petitioner with the Department of Labor and Employment

(DOLE) Regional Office No. VII, Cebu City, for illegal deduction, nonpayment of service incentive leave, 13th month pay, premium

pay for holiday and rest day and illegal diminution of benefits, delayed payment of wages and noncoverage of SSS, PAG-IBIG and

Philhealth.[1]After the conduct of summary investigations, and after the parties submitted their position papers, the DOLE Regional

Director found that private respondent was an employee of petitioner, and was entitled to his money claims .[2]Petitioner sough

reconsideration of the Directors Order, but failed. The Acting DOLE Secretary dismissed petitioners appeal on the ground that

petitioner submitted a Deed of Assignment of Bank Deposit instead of posting a cash or surety bond. When the matter was brought

before the CA, where petitioner claimed that it had been denied due process, it was held that petitioner was accorded due process as i

had been given the opportunity to be heard, and that the DOLE Secretary had jurisdiction over the matter, as the jurisdictional

limitation imposed by Article 129 of the Labor Code on the power of the DOLE Secretary under Art. 128(b) of the Code had been

repealed by Republic Act No. (RA) 7730.[3]

In the Decision of this Court, the CA Decision was reversed and set aside, and the complaint against petitioner was dismissed. The

dispositive portion of the Decision reads as follows:

WHEREFORE, the petition is GRANTED. The Decision dated 26 October 2006 and the Resolution

dated 26 June 2007 of the Court of Appeals in C.A. G.R. CEB-SP No. 00855 areREVERSED and SET

ASIDE. The Order of the then Acting Secretary of the Department of Labor and Employment dated 27 January

2005 denying petitioners appeal, and the Orders of the Director, DOLE Regional Office No. VII, dated 24 May 2004

and 27 February 2004, respectively, are ANNULLED. The complaint against petitioner is DISMISSED.[4]

The Court found that there was no employer-employee relationship between petitioner and private respondent. It was held

that while the DOLE may make a determination of the existence of an employer-employee relationship, this function could not be co-
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extensive with the visitorial and enforcement power provided in Art. 128(b) of the Labor Code, as amended by RA 7730. The National

Labor Relations Commission (NLRC) was held to be the primary agency in determining the existence of an employer-employee

relationship. This was the interpretation of the Court of the clause in cases where the relationship of employer-employee still exists in

Art. 128(b).[5]

From this Decision, the Public Attorneys Office (PAO) filed a Motion for Clarification of Decision (with Leave of

Court). The PAO sought to clarify as to when the visitorial and enforcement power of the DOLE be not considered as co-extensive

with the power to determine the existence of an employer-employee relationship.[6]In its Comment,[7]the DOLE sought clarification

as well, as to the extent of its visitorial and enforcement power under the Labor Code, as amended.

The Court treated the Motion for Clarification as a second motion for reconsideration, granting said motion and reinstating

the petition.[8]It is apparent that there is a need to delineate the jurisdiction of the DOLE Secretary vis--vis that of the NLRC.

Under Art. 129 of the Labor Code, the power of the DOLE and its duly authorized hearing officers to hear and decide any

matter involving the recovery of wages and other monetary claims and benefits was qualified by the proviso that the complaint no

include a claim for reinstatement, or that the aggregate money claims not exceed PhP 5,000. RA 7730, or anAct Further

Strengthening the Visitorial and Enforcement Powers of the Secretary of Labor, did away with the PhP 5,000 limitation, allowing the

DOLE Secretary to exercise its visitorial and enforcement power for claims beyond PhP 5,000. The only qualification to this expanded

power of the DOLE was only that there still be an existing employer-employee relationship.

It is conceded that if there is no employer-employee relationship, whether it has been terminated or it has not existed from the

start, the DOLE has no jurisdiction. Under Art. 128(b) of the Labor Code, as amended by RA 7730, the first sentence reads

Notwithstanding the provisions of Articles 129 and 217 of this Code to the contrary, and in cases where the relationship of e mployer

employee still exists, the Secretary of Labor and Employment or his duly authorized representatives shall have the power to issuecompliance orders to give effect to the labor standards provisions of this Code and other labor legislation based on the findings o

labor employment and enforcement officers or industrial safety engineers made in the course of inspection. It is clear and beyond

debate that an employer-employee relationship must exist for the exercise of the visitorial and enforcement power of the DOLE. The

question now arises, may the DOLE make a determination of whether or not an employer-employee relationship exists, and if so, to

what extent?

The first portion of the question must be answered in the affirmative.

The prior decision of this Court in the present case accepts such answer, but places a limitation upon the power of the DOLE

that is, the determination of the existence of an employer-employee relationship cannot be co-extensive with the visitorial and

enforcement power of the DOLE. But even in conceding the power of the DOLE to determine the existence of an employer-employee

relationship, the Court held that the determination of the existence of an employer-employee relationship is still primarily within the

power of the NLRC, that any finding by the DOLE is merely preliminary.This conclusion must be revisited.

No limitation in the law was placed upon the power of the DOLE to determine the existence of an employer-employee

relationship. No procedure was laid down where the DOLE would only make a preliminary finding, that the power was primarily held

by the NLRC. The law did not say that the DOLE would first seek the NLRCs determination of the existence of an employer-

employee relationship, or that should the existence of the employer-employee relationship be disputed, the DOLE would refer the

matter to the NLRC. The DOLE must have the power to determine whether or not an employer-employee relationship exists, and from

there to decide whether or not to issue compliance orders in accordance with Art. 128(b) of the Labor Code, as amended by RA 7730.

The DOLE, in determining the existence of an employer-employee relationship, has a ready set of guidelines to follow, the

same guide the courts themselves use. The elements to determine the existence of an employment relationship are: (1) the selection

and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; (4) the employers power to control the

employees conduct.[9]The use of this test is not solely limited to the NLRC. The DOLE Secretary, or his or her representatives, can

utilize the same test, even in the course of inspection, making use of the same evidence that would have been presented before the

NLRC.

The determination of the existence of an employer-employee relationship by the DOLE must be respected. The expanded

visitorial and enforcement power of the DOLE granted by RA 7730 would be rendered nugatory if the alleged employer could, by the

simple expedient of disputing the employer-employee relationship, force the referral of the matter to the NLRC. The Court issued the

declaration that at least aprima facieshowing of the absence of an employer-employee relationship be made to oust the DOLE of

jurisdiction. But it is precisely the DOLE that will be faced with that evidence, and it is the DOLE that will weigh it, to see if the same

does successfully refute the existence of an employer-employee relationship.

If the DOLE makes a finding that there is an existing employer-employee relationship, it takes cognizance of the matter, to

the exclusion of the NLRC. The DOLE would have no jurisdiction only if the employer-employee relationship has already been

terminated, or it appears, upon review, that no employer-employee relationship existed in the first place.
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The Court, in limiting the power of the DOLE, gave the rationale that such limitation would eliminate the prospect of

competing conclusions between the DOLE and the NLRC. The prospect of competing conclusions could just as well have been

eliminated by according respect to the DOLE findings, to the exclusion of the NLRC, and this We believe is the more prudent course

of action to take.

This is not to say that the determination by the DOLE is beyond question or review. Suffice it to say, there are judicial

remedies such as a petition for certiorari under Rule 65 that may be availed of, should a party wish to dispute the findings of the

DOLE.

It must also be remembered that the power of the DOLE to determine the existence of an employer-employee relationship

need not necessarily result in an affirmative finding. The DOLE may well make the determination that no employer-employee

relationship exists, thus divesting itself of jurisdiction over the case. It must not be precluded from being able to reach its own

conclusions, not by the parties, and certainly not by this Court.

Under Art. 128(b) of the Labor Code, as amended by RA 7730, the DOLE is fully empowered to make a determination as to

the existence of an employer-employee relationship in the exercise of its visitorial and enforcement power, subject to judicial review,

not review by the NLRC.

There is a view that despite Art. 128(b) of the Labor Code, as amended by RA 7730, there is still a threshold amount set by

Arts. 129 and 217 of the Labor Code when money claims are involved, i.e., that if it is for PhP 5,000 and below, the jurisdiction is

with the regional director of the DOLE, under Art. 129, and if the amount involved exceeds PhP 5,000, the jurisdiction is with the

labor arbiter, under Art. 217. The view states that despite the wording of Art. 128(b), this would only apply in the course of regular

inspections undertaken by the DOLE, as differentiated from cases under Arts. 129 and 217, which originate from complaints. Thereare several cases, however, where the Court has ruled that Art. 128(b) has been amended to expand the powers of the DOLE Secretary

and his duly authorized representatives by RA 7730. In these cases, the Court resolved that the DOLE had the jurisdiction, despite the

amount of the money claims involved. Furthermore, in these cases, the inspection held by the DOLE regional director was prompted

specifically by a complaint. Therefore, the initiation of a case through a complaint does not divest the DOLE Secretary or his duly

authorized representative of jurisdiction under Art. 128(b).

To recapitulate, if a complaint is brought before the DOLE to give effect to the labor standards provisions of the Labor Code

or other labor legislation, and there is a finding by the DOLE that there is an existing employer-employee relationship, the DOLE

exercises jurisdiction to the exclusion of the NLRC. If the DOLE finds that there is no employer-employee relationship, the

jurisdiction is properly with the NLRC. If a complaint is filed with the DOLE, and it is accompanied by a claim for reinstatement, the

jurisdiction is properly with the Labor Arbiter, under Art. 217(3) of the Labor Code, which provides that the Labor Arbiter has

original and exclusive jurisdiction over those cases involving wages, rates of pay, hours of work, and other terms and conditions of

employment, if accompanied by a claim for reinstatement. If a complaint is filed with the NLRC, and there is still an existingemployer-employee relationship, the jurisdiction is properly with the DOLE. The findings of the DOLE, however, may still be

questioned through a petition for certiorari under Rule 65 of the Rules of Court.

In the present case, the finding of the DOLE Regional Director that there was an employer-employee relationship has been

subjected to review by this Court, with the finding being that there was no employer-employee relationship between petitioner and

private respondent, based on the evidence presented. Private respondent presented self-serving allegations as well as self-defeating

evidence.[10]The findings of the Regional Director were not based on substantial evidence, and private respondent failed to prove the

existence of an employer-employee relationship. The DOLE had no jurisdiction over the case, as there was no employer-employee

relationship present. Thus, the dismissal of the complaint against petitioner is proper.

WHEREFORE, the Decision of this Court in G.R. No. 179652 is hereby AFFIRMED, with the MODIFICATIONthat in

the exercise of the DOLEs visitorial and enforcement power, the Labor Secretary or the latters authorized representative shall have the

power to determine the existence of an employer-employee relationship, to the exclusion of the NLRC.

SO ORDERED.
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FIRST DIVISION

ERNESTO G. YMBONG,

Petitioner,

G.R. No. 184885

- versus -

Present:

CORONA, C.J.,

Chairperson,

LEONARDO-DE CASTRO,

BERSAMIN,

VILLARAMA, JR., and

PERLAS-BERNABE,*JJ.

ABS-CBN BROADCASTING CORPORATION, VENERANDASY AND DANTE LUZON,

Respondents.

Promulgated:

March 7, 2012

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION

VILLARAMA, JR., J.:

Before us is a Rule 45 Petition seeking to set aside the August 22, 2007 Decisio n

[1]

and September 18, 2008 Resolution

[2]

of the Courof Appeals (CA) in CA-G.R. SP No. 86206 declaring petitioner to have resigned from work and not illegally dismissed.

The antecedent facts follow:

Petitioner Ernesto G. Ymbong started working for ABS-CBN Broadcasting Corporation (ABS-CBN) in 1993 at its regional station

in Cebu as a television talent, co-anchoringHoy Gisingand TV Patrol Cebu. His stint in ABS-CBN later extended to radio when ABS-

CBN Cebu launched its AM station DYAB in 1995 where he worked as drama and voice talent, spinner, scriptwriter and public affairs

program anchor.

Like Ymbong, Leandro Patalinghug also worked for ABS-CBN Cebu. Starting 1995, he worked as talent, director and scriptwriter for

various radio programs aired over DYAB.

On January 1, 1996, the ABS-CBN Head Office in Manila issued Policy No. HR-ER-016 or the Policy on Employees Seeking Public

Office. The pertinent portions read:

1. Any employee who intends to run for any public office position, must file his/her letter of resignation, at

least thirty (30) days prior to the official filing of the certificate of candidacy either for national or local

election.

x x x x

3. Further, any employee who intends to join a political group/party or even with no political affiliation but

who intends to openly and aggressively campaign for a candidate or group of candidates(e.g. publicly
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speaking/endorsing candidate, recruiting campaign workers, etc.) must file a request for leave of absence

subject to managements approval. For this particular reason, the employee should file the leave request at

least thirty (30) days prior to the start of the planned leave period.

x x x x[3][Emphasis and underscoring supplied.]

Because of the impending May 1998 elections and based on his immediate recollection of the policy at that time, Dante Luzon

Assistant Station Manager of DYAB issued the following memorandum:

TO : ALL CONCERNED

FROM : DANTE LUZON

DATE : MARCH 25, 1998

SUBJECT : AS STATED

Please be informed that per company policy, any employee/talent who wants to run for any position in the

coming election will have to file a leave of absence the moment he/she files his/her certificate of candidacy.

The services rendered by the concerned employee/talent to this company will then be temporarily suspended for the

entire campaign/election period.

For strict compliance.[4][Emphasis and underscoring supplied.]

Luzon, however, admitted that upon double-checking of the exact text of the policy and subsequent confirmation with the ABS-CBN

Head Office, he saw that the policy actually required suspension for those who intend to campaign for a political party or candidate

and resignation for those who will actually run in the elections.[5]

After the issuance of the March 25, 1998 Memorandum, Ymbong got in touch with Luzon. Luzon claims that Ymbong approached

him and told him that he would leave radio for a couple of months because he will campaign for the administration ticket. It was only

after the elections that they found out that Ymbong actually ran for public office himself at the eleventh hour. Ymbong, on the other

hand, claims that in accordance with the March 25, 1998 Memorandum, he informed Luzon through a letter that he would take a few

months leave of absence from March 8, 1998 to May 18, 1998 since he was running for councilor of Lapu-Lapu City.

As regards Patalinghug, Patalinghug approached Luzon and advised him that he will run as councilor for Naga, Cebu. According to

Luzon, he clarified to Patalinghug that he will be considered resigned and not just on leave once he files a certificate of

candidacy. Thus, Patalinghug wrote Luzon the following letter on April 13, 1998:

Dear Mr. Luzon,

Im submitting to you my letter of resignation as your Drama Production Chief and Talent due to your companys

policy that every person connected to ABS-CBN that should seek an elected position in the government will be

forced to resigned (sic) from his position. So herewith Im submitting my resignation with a hard heart. But Im still

hoping to be connected again with your prestigious company after the election[s] should you feel that Im still an

asset to your drama production department. Im looking forward to that day and Im very happy and proud that I have

served for two and a half years the most stable and the most prestigious Radio and TV Network in the Philippines.

As a friend[,] wish me luck and Pray for me. Thank you.

Very Truly Yours,

(Sgd.)

Leandro Boy Patalinghug[6]
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Unfortunately, both Ymbong and Patalinghug lost in the May 1998 elections.

Later, Ymbong and Patalinghug both tried to come back to ABS-CBN Cebu. According to Luzon, he informed them that they canno

work there anymore because of company policy. This was stressed even in subsequent meetings and they were told that the company

was not allowing any exceptions. ABS-CBN, however, agreed out of pure liberality to give them a chance to wind up their

participation in the radio drama, Nagbabagang Langit, since it was rating well and to avoid an abrupt ending. The agreed winding-up

however, dragged on for so long prompting Luzon to issue to Ymbong the following memorandum dated September 14, 1998:

TO : NESTOR YMBONG

FROM : DANTE LUZON

SUBJECT : AS STATED

DATE : 14 SEPT. 1998

Please be reminded that your services as drama talent had already been automatically terminated when you ran for a

local government position last election.

The Management however gave you more than enough time to end your drama participation and other involvement

with the drama department.

It has been decided therefore that all your drama participation shall be terminated effective immediately. However,

your involvement as drama spinner/narrator of the drama NAGBA[BA]GANG LANGIT continues until its

writer/director Mr. Leandro Patalinghug wraps it up one week upon receipt of a separate memo issued to him.[7]

Ymbong in contrast contended that after the expiration of his leave of absence, he reported back to work as a regular talent and in fact

continued to receive his salary. OnSeptember 14, 1998, he received a memorandum stating that his services are being terminated

immediately, much to his surprise. Thus, he filed an illegal dismissal complaint[8]against ABS-CBN, Luzon and DYAB Station

Manager Veneranda Sy. He argued that the ground cited by ABS-CBN for his dismissal was not among those enumerated in theLabor

Code, as amended. And even granting without admitting the existence of the company policy supposed to have been violated

Ymbong averred that it was necessary that the company policy meet certain requirements before willful disobedience of the policy

may constitute a just cause for termination. Ymbong further argued that the company policy violates his constitutional right to

suffrage.[9]

Patalinghug likewise filed an illegal dismissal complaint[10]against ABS-CBN.

ABS-CBN prayed for the dismissal of the complaints arguing that there is no employer-employee relationship between the company

and Ymbong and Patalinghug. ABS-CBN contended that they are not employees but talents as evidenced by their talen

contracts. However, notwithstanding their status, ABS-CBN has a standing policy on persons connected with the company wheneve

they will run for public office.[11]

On July 14, 1999, the Labor Arbiter rendered a decision[12]finding the dismissal of Ymbong and Patalinghug illegal, thus:

WHEREFORE, in the light of the foregoing, judgment is rendered finding the dismissal of the two complainants

illegal. An order is issued directing respondent ABS[-]CBN to immediately reinstate complainants to their former

positions without loss of seniority rights plus the payment of backwages in the amount of P200,000.00 to eachcomplainant.

All other claims are dismissed.

SO ORDERED.[13]

The Labor Arbiter found that there exists an employer-employee relationship between ABS-CBN and Ymbong and Patalinghug

considering the stipulations in their appointment letters/talent contracts. The Labor Arbiter noted particularly that the appointment

letters/talent contracts imposed conditions in the performance of their work, specifically on attendance and punctuality, which

effectively placed them under the control of ABS-CBN. The Labor Arbiter likewise ruled that although the subject company policy is

reasonable and not contrary to law, the same was not made known to Ymbong and Patalinghug and in fact was superseded by another
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one embodied in the March 25, 1998 Memorandum issued by Luzon. Thus, there is no valid or authorized cause in terminating

Ymbong and Patalinghug from their employment.

In its memorandum of appeal[14]before the National Labor Relations Commission (NLRC), ABS-CBN contended that the Labor

Arbiter has no jurisdiction over the case because there is no employer-employee relationship between the company

and Ymbong and Patalinghug, and that Sy and Luzon mistakenly assumed that Ymbong and Patalinghug could just file a leave of

absence since they are only talents and not employees. In its Supplemental Appeal,[15]ABS-CBN insisted that Ymbong and

Patalinghug were engaged as radio talents for DYAB dramas and personality programs and their contract is one between a self

employed contractor and the hiring party which is a standard practice in the broadcasting industry. It also argued that the Labor

Arbiter should not have made much of the provisions on Ymbongs attendance and punctuality since such requirement is a dictate ofthe programming of the station, the slating of shows at regular time slots, and availability of recording studios not an attempt to

exercise control over the manner of his performance of the contracted anchor work within his scheduled spot on air. As for the

pronouncement that the company policy has already been superseded by the March 25, 1998 Memorandum issued by Luzon, the latter

already clarified that it was the very policy he sought to enforce. This matter was relayed by Luzon to Patalinghug when the latter

disclosed his plans to join the 1998 elections while Ymbong only informed the company that he was campaigning for the

administration ticket and the company had no inkling that he will actually run until the issue was already moot and academic. ABS-

CBN further contended that Ymbong and Patalinghugs reinstatement is legally and physically impossible as the talent positions they

vacated no longer exist. Neither is there basis for the award of back wages since they were not earning a monthly salary but paid talent

fees on a per production/per script basis. Attached to the Supplemental Appeal is a Sworn Statement[16]of Luzon.

On March 8, 2004, the NLRC rendered a decision[17]modifying the labor arbiters decision. Thefalloof the NLRC decision reads:

WHEREFORE, premises considered, the decision of Labor Arbiter Nicasio C. Aninon dated 14 July1999 is MODIFIED, to wit:

Ordering respondent ABS-CBN to reinstate complainant Ernesto G. Ymbong and to pay his full backwages

computed from 15 September 1998 up to the time of his actual reinstatement.

SO ORDERED.[18]

The NLRC dismissed ABS-CBNs Supplemental Appeal for being filed out of time. The NLRC ruled that to entertain the

same would be to allow the parties to submit their appeal on piecemeal basis, which is contrary to the agencys duty to facilitate speedy

disposition of cases. The NLRC also held that ABS-CBN wielded the power of control over Ymbong and Patalinghug, thereby

proving the existence of an employer-employee relationship between them.

As to the issue of whether they were illegally dismissed, the NLRC treated their cases differently. In the case of Patalinghug

it found that he voluntarily resigned from employment on April 21, 1998 when he submitted his resignation letter. The NLRC noted

that although the tenor of the resignation letter is somewhat involuntary, he knew that it is the policy of the company that every person

connected therewith should resign from his employment if he seeks an elected position in the government. As to Ymbong, however,

the NLRC ruled otherwise. It ruled that the March 25, 1998 Memorandum merely states that an employee who seeks any elected

position in the government will only merit the temporary suspension of his services. It held that under the principle of social justice

the March 25, 1998 Memorandum shall prevail and ABS-CBN is estopped from enforcing the September 14, 1998 memorandum

issued to Ymbong stating that his services had been automatically terminated when he ran for an elective position.

ABS-CBN moved to reconsider the NLRC decision, but the same was denied in a Resolution dated June 21, 2004 .[19]

Imputing grave abuse of discretion on the NLRC, ABS-CBN filed a petition for certiorari[20]before the CA alleging that:

I.

RESPONDENT NLRC COMMITTED A GRAVE ABUSE OF DISCRETION AND SERIOUSLY

MISAPPRECIATED THE FACTS IN NOT HOLDING THAT RESPONDENT YMBONG IS A FREELANCE

RADIO TALENT AND MEDIA PRACTITIONERNOT A REGULAR EMPLOYEE OF PETITIONERTO WHOM

CERTAIN PRODUCTION WORK HAD BEEN OUTSOURCED BY ABS-CBN CEBU UNDER AN

INDEPENDENT CONTRACTORSHIP SITUATION, THUS RENDERING THE LABOR COURTS WITHOUT

JURISDICTION OVER THE CASE IN THE ABSENCE OF EMPLOYMENT RELATIONS BETWEEN THE

PARTIES.
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II.

RESPONDENT NLRC COMMITTED A GRAVE ABUSE OF DISCRETION IN DECLARING RESPONDENT

YMBONG TO BE A REGULAR EMPLOYEE OF PETITIONER AS TO CREATE A CONTRACTUAL

EMPLOYMENT RELATION BETWEEN THEM WHEN NONE EXISTS OR HAD BEEN AGREED UPON OR

OTHERWISE INTENDED BY THE PARTIES.

III.

EVEN ASSUMING THE ALLEGED EMPLOYMENT RELATION TO EXIST FOR THE SAKE OF

ARGUMENT, RESPONDENT NLRC IN ANY CASE COMMITTED A GRAVE ABUSE OF DISCRETION IN

NOT SIMILARLY UPHOLDING AND APPLYING COMPANY POLICY NO. HR-ER-016 IN THE CASE OF

RESPONDENT YMBONG AND DEEMING HIM AS RESIGNED AND DISQUALIFIED FROM FURTHER

ENGAGEMENT AS A RADIO TALENT IN ABS-CBN CEBU AS A CONSEQUENCE OF HIS CANDIDACY

IN THE 1998 ELECTIONS, AS RESPONDENT NLRC HAD DONE IN THE CASE OF PATALINGHUG.

IV.

RESPONDENT NLRC COMMITTED A GRAVE ABUSE OF DISCRETION AND DENIED DUE PROCESS TOPETITIONER IN REFUSING TO CONSIDER ITS SUPPLEMENTAL APPEAL, DATED OCTOBER 18, 1999,

FOR BEING FILED OUT OF TIME CONSIDERING THAT THE FILING OF SUCH A PLEADING IS NOT IN

ANY CASE PROSCRIBED AND RESPONDENT NLRC IS AUTHORIZED TO CONSIDER ADDITIONAL

EVIDENCE ON APPEAL; MOREOVER, TECHNICAL RULES OF EVIDENCE DO NOT APPLY IN LABOR

CASES.

V.

RESPONDENT NLRC COMMITTED A GRAVE ABUSE OF DISCRETION IN GRANTING THE RELIEF OF

REINSTATEMENT AND BACKWAGES TO RESPONDENT YMBONG SINCE HE NEVER OCCUPIED ANY

REGULAR POSITION IN PETITIONER FROM WHICH HE COULD HAVE BEEN ILLEGALLY DISMISSED,

NOR ARE ANY OF THE RADIO PRODUCTIONS IN WHICH HE HAD DONE TALENT WORK FOR

PETITIONER STILL EXISTING. INDEED, THERE IS NO BASIS WHATSOEVER FOR THE AWARD OF

BACKWAGES TO RESPONDENT YMBONG IN THE AMOUNT OF P200,000.00 CONSIDERING THAT, AS

SHOWN BY THE UNCONTROVERTED EVIDENCE, HE WAS NOT EARNING A MONTHLY SALARY OF

P20,000.00, AS HE FALSELY CLAIMS, BUT WAS PAID TALENT FEES ON A PER PRODUCTION/PER

SCRIPT BASIS WHICH AVERAGED LESS THAN P10,000.00 PER MONTH IN TALENT FEES ALL IN

ALL.[21]

On August 22, 2007, the CA rendered the assailed decision reversing and setting aside the March 8, 2004 Decision and June 21

2004 Resolution of the NLRC. The CA declared Ymbong resigned from employment and not to have been illegally dismissed. The

award of full back wages in his favor was deleted accordingly.

The CA ruled that ABS-CBN is estopped from claiming that Ymbong was not its employee after applying the provisions of Policy No.HR-ER-016 to him. It noted that said policy is entitled Policy on Employees Seeking Public Office and the guidelines contained

therein specifically pertain to employees and did not even mention talents or independent contractors. It held that it is a complete

turnaround on ABS-CBNs part to later argue that Ymbong is only a radio talent or independent contractor and not its employee. By

applying the subject company policy on Ymbong, ABS-CBN had explicitly recognized him to be an employee and not merely an

independent contractor.

The CA likewise held that the subject company policy is the controlling guideline and therefore, Ymbong should be considered

resigned from ABS-CBN. While Luzon has policy-making power as assistant radio manager, he had no authority to issue a

memorandum that had the effect of repealing or superseding a subsisting policy. Contrary to the findings of the Labor Arbiter, the

subject company policy was effective at that time and continues to be valid and subsisting up to the present. The CA cited

Patalinghugs resignation letter to buttress this conclusion, noting that Patalinghug openly admitted in his letter that his resignation was


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in line with the said company policy. Since ABS-CBN applied Policy No. HR-ER-016 to Patalinghug, there is no reason not to apply

the same regulation to Ymbong who was on a similar situation as the former. Thus, the CA found that the NLRC overstepped its area

of discretion to a point of grave abuse in declaring Ymbong to have been illegally terminated. The CA concluded that there is no

illegal dismissal to speak of in the instant case as Ymbong is considered resigned when he ran for an elective post pursuant to the

subject company policy.

Hence, this petition.

Petitioner argues that the CA gravely erred: (1) in upholding Policy No. HR-ER-016; (2) in upholding the validity of the termination

of Ymbongs services; and (3) when it reversed the decision of the NLRC 4 thDivision of Cebu City which affirmed the decision of

Labor Arbiter Nicasio C. Anion.[22]

Ymbong argues that the subject company policy is a clear interference and a gross violation of an employees right to suffrage. He is

surprised why it was easy for the CA to rule that Luzons memorandum ran counter to an existing policy while on the other end, it did

not see that it was in conflict with the constitutional right to suffrage. He also points out that the issuance of the March 25, 1998

Memorandum was precisely an exercise of the management power to which an employee like him must respect; otherwise, he will be

sanctioned for disobedience or worse, even terminated. He was not in a position to know which between the two issuances was correct

and as far as he is concerned, the March 25, 1998 Memorandum superseded the subject company policy. Moreover, ABS-CBN canno

disown acts of its officers most especially since it prejudiced his property rights.[23]

As to the validity of his dismissal, Ymbong contends that the ground relied upon by ABS-CBN is not among the just and authorized

causes provided in the Labor Code, as amended. And even assuming the subject company policy passes the test of validity under the

pretext of the right of the management to discipline and terminate its employees, the exercise of such right is not without

bounds. Ymbong avers that his automatic termination was a blatant disregard of his right to due process. He was never asked to

explain why he did not tender his resignation before he ran for public office as mandated by the subject company policy. [24]

Ymbong likewise asseverates that both the Labor Arbiter and the NLRC were consistent in their findings that he was illegally

dismissed. It is settled that factual findings of labor administrative officials, if supported by substantial evidence, are accorded not only

great respect but even finality.[25]

ABS-CBN, for its part, counters that the validity of policies such as Policy No. HR-ER-016 has long been upheld by this Court which

has ruled that a media company has a right to impose a policy providing that employees who file their certificates of candidacy in any

election shall be considered resigned.[26]Moreover, case law has upheld the validity of the exercise of management prerogatives even

if they appear to limit the rights of employees as long as there is no showing that management prerogatives were exercised in amanner contrary to law.[27]ABS-CBN contends that being the largest media and entertainment company in the country, its reputation

stems not only from its ability to deliver quality entertainment programs but also because of neutrality and impartiality in delivering

news.[28]

ABS-CBN further argues that nothing in the company policy prohibits its employees from either accepting a public appointive

position or from running for public office. Thus, it cannot be considered as violative of the constitutional right of suffrage. Moreover

the Supreme Court has recognized the employers right to enforce occupational qualifications as long as the employer is able to show

the existence of a reasonable business necessity in imposing the questioned policy. Here, Policy No. HR-ER-016 itself states that it

was issued to protect the company from any public misconceptions and [t]o preserve its objectivity, neutrality and credibility. Thus, it

cannot be denied that it is reasonable under the circumstances.[29]

ABS-CBN likewise opposes Ymbongs claim that he was terminated. ABS-CBN argues that on the contrary, Ymbongs unilateral act offiling his certificate of candidacy is an overt act tantamount to voluntary resignation on his part by virtue of the clear mandate found in

Policy No. HR-ER-016. Ymbong, however, failed to file his resignation and in fact misled his superiors by making them believe that

he was going on leave to campaign for the administration candidates but in fact, he actually ran for councilor. He also claims to have

fully apprised Luzon through a letter of his intention to run for public office, but he failed to adduce a copy of the same .[30]

As to Ymbongs argument that the CA should not have reversed the findings of the Labor Arbiter and the NLRC, ABS-CBN

asseverates that the CA is not precluded from making its own findings most especially if upon its own review of the case, it has been

revealed that the NLRC, in affirming the findings of the Labor Arbiter, committed grave abuse of discretion amounting to lack or

excess of jurisdiction when it failed to apply the subject company policy in Ymbongs case when it readily applied the same to

Patalinghug.[31]
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Essentially, the issues to be resolved in the instant petition are: (1) whether Policy No. HR-ER-016 is valid; (2) whether the March 25,

1998 Memorandum issued by Luzonsuperseded Policy No. HR-ER-016; and (3) whether Ymbong, by seeking an elective post, is

deemed to have resigned and not dismissed by ABS-CBN.

Policy No. HR-ER-016 is valid.

This is not the first time that this Court has dealt with a policy similar to Policy No. HR-ER-016. In the case of Manila Broadcasting

Company v. NLRC,[32]this Court ruled:

What is involved in this case is an unwritten company policy considering any employee who files a

certificate of candidacy for any elective or local office as resigned from the company.Although 11(b) of R.A. No.

6646 does not require mass media commentators and announcers such as private respondent to resign from their

radio or TV stations but only to go on leave for the duration of the campaign period, we think that the company may

nevertheless validly require them to resign as a matter of policy. In this case, the policy is justified on the following

grounds:

Working for the government and the company at the same time is clearly disadvantageous and

prejudicial to the rights and interest not only of the company but the public as well. In the event an

employee wins in an election, he cannot fully serve, as he is expected to do, the interest of his

employer. The employee has to serve two (2) employers, obviously detrimental to the interest of

both the government and the private employer.

In the event the employee loses in the election, the impartiality and cold neutrality of anemployee as broadcast personality is suspect, thus readily eroding and adversely affecting the

confidence and trust of the listening public to employers station.[33]

ABS-CBN, like Manila Broadcasting Company, also had a valid justification for Policy No. HR-ER-016. Its rationale is embodied in

the policy itself, to wit:

Rationale:

ABS-CBN BROADCASTING CORPORATION strongly believes that it is to the best interest of the company to

continuously remain apolitical. While it encourages and supports its employees to have greater political

awareness and for them to exercise their right to suffrage, the company, however, prefers to remain

politically independent and unattached to any political individual or entity.

Therefore, employees who [intend] to run for public office or accept political appointment should resign from

their positions, in order to protect the company from any public misconceptions. To preserve its objectivity,

neutrality and credibility, the company reiterates the following policy guidelines for strict implementation.

x x x x[34][Emphasis supplied.]

We have consistently held that so long as a companys management prerogatives are exercised in good faith for the

advancement of the employers interest and not for the purpose of defeating or circumventing the rights of the employees under special

laws or under valid agreements, this Court will uphold them.[35]In the instant case, ABS-CBN validly justified the implementation of

Policy No. HR-ER-016. It is well within its rights to ensure that it maintains its objectivity and credibility and freeing itself from any

appearance of impartiality so that the confidence of the viewing and listening public in it will not be in any way eroded. Even as thelaw is solicitous of the welfare of the employees, it must also protect the right of an employer to exercise what are clearly management

prerogatives. The free will of management to conduct its own business affairs to achieve its purpose cannot be denied.[36]

It is worth noting that such exercise of management prerogative has earned a stamp of approval from no less than our Congress itself

when on February 12, 2001, it enacted Republic Act No. 9006, otherwise known as the Fair Election Act. Section 6.6 thereof reads:

6.6. Any mass media columnist, commentator, announcer, reporter, on-air correspondent or personality who

is a candidate for any elective public office or is a campaign volunteer for or employed or retained in any

capacity by any candidate or political party shall be deemed resigned, if so required by their employer, or

shall take a leave of absence from his/her work as such during the campaign period: Provided, That any media
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practitioner who is an official of a political party or a member of the campaign staff of a candidate or political party

shall not use his/her time or space to favor any candidate or political party. [Emphasis and underscoring supplied.]

Poli cy No. HR-ER-016 was not superseded by the March 25, 1998

Memorandum

The CA correctly ruled that though Luzon, as Assistant Station Manager for Radio of ABS-CBN, has policy-making powers in

relation to his principal task of administering the networks radio station in the Cebu region, the exercise of such power should be inaccord with the general rules and regulations imposed by the ABS-CBN Head Office to its employees. Clearly, the March 25

1998 Memorandum issued by Luzon which only requires employees to go on leave if they intend to run for any elective position is in

absolute contradiction with Policy No. HR-ER-016 issued by the ABS-CBN Head Office in Manila which requires the resignation, not

only the filing of a leave of absence, of any employee who intends to run for public office. Having been issued beyond the scope of his

authority, the March 25, 1998 Memorandum is therefore void and did not supersede Policy No. HR-ER-016.

Also worth noting is that Luzon in his Sworn Statement admitted the inaccuracy of his recollection of the company policy

when he issued the March 25, 1998 Memorandum and stated therein that upon double-checking of the exact text of the policy

statement and subsequent confirmation with the ABS-CBN Head Office in Manila, he learned that the policy required resignation for

those who will actually run in elections because the company wanted to maintain its independence. Since the officer who himself

issued the subject memorandum acknowledged that it is not in harmony with the Policy issued by the upper management, there is no

reason for it to be a source of right for Ymbong.

Ymbong is deemed resigned when he ran for council or .

As Policy No. HR-ER-016 is the subsisting company policy and not Luzons March 25, 1998 Memorandum, Ymbong is deemed

resigned when he ran for councilor.

We find no merit in Ymbongs argument that [his] automatic termination x x x was a blatant [disregard] of [his] right to due process as

he was never asked to explain why he did not tender his resignation before he ran for public office as mandated by [the subject

company policy].[37]Ymbongs overt act of running for councilor of Lapu-Lapu City is tantamount to resignation on his part. He was

separated from ABS-CBN not because he was dismissed but because he resigned. Since there was no termination to speak of, the

requirement of due process in dismissal cases cannot be applied to Ymbong. Thus, ABS-CBN is not duty-bound to ask him to explainwhy he did not tender his resignation before he ran for public office as mandated by the subject company policy.

In addition, we do not subscribe to Ymbongs claim that he was not in a position to know which of the two issuances was

correct. Ymbong most likely than not, is fully aware that the subsisting policy is Policy No. HR-ER-016 and not the March 25, 1998

Memorandum and it was for this reason that, as stated by Luzon in his Sworn Statement, he only told the latter that he will only

campaign for the administration ticket and not actually run for an elective post. Ymbong claims he had fully apprised Luzon by letter

of his plan to run and even filed a leave of absence but records are bereft of any proof of said claim. Ymbong claims that the letter

stating his intention to go on leave to run in the election is attached to his Position Paper as Annex A, a perusal of said pleading

attached to his petition before this Court, however, show that Annex A was not his letter to Luzon but the September 14, 1998

Memorandum informing Ymbong that his services had been automatically terminated when he ran for a local government position.

Moreover, as pointed out by ABS-CBN, had Ymbong been truthful to his superiors, they would have been able to clarify to him the

prevailing company policy and inform him of the consequences of his decision in case he decides to run, as Luzon did in Patalinghugscase.

WHEREFORE, the petition for review on certiorari is DENIEDfor lack of merit.

With costs against petitioner.

SO ORDERED.


17/23

PROFESSIONAL SERVICES INC. VS. THE COURT OF APPEALS AND NATIVIDAD AND ENRIQUE AGANA

RESOLUTION

SANDOVAL-GUTIERREZ, J.:

As the hospital industry changes, so must the laws and jurisprudence governing hospital liability. The immunity from medical

malpractice traditionally accorded to hospitals has to be eroded if we are to balance the interest of the patients and hospitals under the

present setting.

Before this Court is a motion for reconsideration filed by Professional Services, Inc. (PSI), petitioner in G.R. No. 126297, assailing the

Courts First Division Decision datedJanuary 31, 2007, finding PSI and Dr. Miguel Ampil, petitioner in G.R. No. 127590, jointly and

severally liable for medical negligence.

A brief revisit of the antecedent facts is imperative.

On April 4, 1984, Natividad Agana was admitted at the Medical City General Hospital (Medical City) because of difficulty of bowemovement and bloody anal discharge. Dr. Ampil diagnosed her to be suffering from cancer of the sigmoid. Thus, on April 11, 1984,

Dr. Ampil, assisted by the medical staff[1]of Medical City, performed an anterior resection surgery upon her. During the surgery, he

found that the malignancy in her sigmoid area had spread to her left ovary, necessitating the removal of certain portions of it.Thus, Dr

Ampil obtained the consent of Atty. Enrique Agana, Natividads husband, to permit Dr. Juan Fuentes, respondent in G.R. No. 126467,

to perform hysterectomy upon Natividad.

Dr. Fuentes performed and completed the hysterectomy. Afterwards, Dr. Ampil took over, completed the operation and closed the

incision. However, the operation appeared to be flawed.

Documents

Labor Cases 5-8