THIRD DIVISION

On April 24, 2006, Labor Arbiter Medroso dismissed the complaint with respect to dela Cruz,
[G.R. No. 187320 : January 26, 2011] Magalang, Zaño and Chiong, but found the termination of service of the remaining nine to be
illegal.[6] Consequently, the arbiter awarded the dismissed workers backwages, wage differentials,
ATLANTA INDUSTRIES, INC. AND/OR ROBERT CHAN, PETITIONERS, VS. APRILITO R. SEBOLINO, KHIM holiday pay and service incentive leave pay amounting to P1,389,044.57 in the aggregate.
V. COSTALES, ALVIN V. ALMOITE, AND JOSEPH S. SAGUN, RESPONDENTS.
Atlanta appealed to the National Labor Relations Commission (NLRC). In the meantime, or on
DECISION October 10, 2006, Ramos, Alegria, Villagomez, Costales and Almoite allegedly entered into a
compromise agreement with Atlanta.[7] The agreement provided that except for Ramos, Atlanta
BRION, J.: agreed to pay the workers a specified amount as settlement, and to acknowledge them at the
same time as regular employees.
For resolution is the petition for review on certiorari[1] assailing the decision[2] and the
resolution[3] of the Court of Appeals (CA) rendered on November 4, 2008 and March 25, 2009, On December 29, 2006,[8] the NLRC rendered a decision, on appeal, modifying the ruling of the
respectively, in CA-G.R. SP. No. 99340.[4]cralaw labor arbiter, as follows: (1) withdrawing the illegal dismissal finding with respect to Sagun,
Mabanag, Sebolino and Pedregoza; (2) affirming the dismissal of the complaints of dela Cruz,
The Antecedents Zaño, Magalang and Chiong; (3) approving the compromise agreement entered into by Costales,
Ramos, Villagomez, Almoite and Alegria, and (4) denying all other claims.
The facts are summarized below.
Sebolino, Costales, Almoite and Sagun moved for the reconsideration of the decision, but the
In the months of February and March 2005, complainants Aprilito R. Sebolino, Khim V. Costales, NLRC denied the motion in its March 30, 2007[9] resolution. The four then sought relief from the
Alvin V. Almoite, Joseph S. Sagun, Agosto D. Zaño, Domingo S. Alegria, Jr., Ronie Ramos, Edgar CA through a petition for certiorari under Rule 65 of the Rules of Court. They charged that the
Villagomez, Melvin Pedregoza, Teofanes B. Chiong, Jr., Leonardo L. dela Cruz, Arnold A. Magalang, NLRC committed grave abuse of discretion in: (1) failing to recognize their prior employment with
and Saturnino M. Mabanag filed several complaints for illegal dismissal, regularization, Atlanta; (2) declaring the second apprenticeship agreement valid; (3) holding that the dismissal of
underpayment, nonpayment of wages and other money claims, as well as claims for moral and Sagun, Mabanag, Sebolino and Melvin Pedregoza is legal; and (4) upholding the compromise
exemplary damages and attorney's fees against the petitioners Atlanta Industries, Inc. (Atlanta) agreement involving Costales, Ramos, Villagomez, Almoite and Alegria.
and its President and Chief Operating Officer Robert Chan. Atlanta is a domestic corporation
engaged in the manufacture of steel pipes. The CA Decision

The complaints were consolidated and were raffled to Labor Arbiter Daniel Cajilig, but were later The CA granted the petition based on the following findings:[10]
transferred to Labor Arbiter Dominador B. Medroso, Jr.
1. The respondents were already employees of the company before they entered into the first
The complainants alleged that they had attained regular status as they were allowed to work with and second apprenticeship agreements - Almoite and Costales were employed as early as
Atlanta for more than six (6) months from the start of a purported apprenticeship agreement December 2003 and, subsequently, entered into a first apprenticeship agreement from May 13,
between them and the company. They claimed that they were illegally dismissed when the 2004 to October 12, 2004; before this first agreement expired, a second apprenticeship
apprenticeship agreement expired. agreement, from October 9, 2004 to March 8, 2005 was executed. The same is true with Sebolino
and Sagun, who were employed by Atlanta as early as March 3, 2004. Sebolino entered into his
In defense, Atlanta and Chan argued that the workers were not entitled to regularization and to first apprenticeship agreement with the company from March 20, 2004 to August 19, 2004, and
their money claims because they were engaged as apprentices under a government-approved his second apprenticeship agreement from August 20, 2004 to January 19, 2005. Sagun, on the
apprenticeship program. The company offered to hire them as regular employees in the event other hand, entered into his first agreement from May 28, 2004 to October 8, 2004, and the
vacancies for regular positions occur in the section of the plant where they had trained. They also second agreement from October 9, 2004 to March 8, 2005.
claimed that their names did not appear in the list of employees (Master List)[5] prior to their
engagement as apprentices. 2. The first and second apprenticeship agreements were defective as they were executed in
violation of the law and the rules.[11] The agreements did not indicate the trade or occupation in
On May 24, 2005, dela Cruz, Magalang, Zaño and Chiong executed a Pagtalikod at Pagwawalang which the apprentice would be trained; neither was the apprenticeship program approved by the
Saysay before Labor Arbiter Cajilig. Technical Education and Skills Development Authority (TESDA).

The Compulsory Arbitration Rulings 3. The positions occupied by the respondents - machine operator, extruder operator and
scaleman - are usually necessary and desirable in the manufacture of plastic building materials,
the company's main business. Costales, Almoite, Sebolino and Sagun were, therefore, regular
employees whose dismissals were illegal for lack of a just or authorized cause and notice.
The respondents initially executed a five-month apprenticeship program with Atlanta, at the end
4. The compromise agreement entered into by Costales and Almoite, together with Ramos, of which, they "voluntarily and willingly entered into another apprenticeship agreement with the
Villagomez and Alegria, was not binding on Costales and Almoite because they did not sign the petitioner for the training of a second skill"[21] for five months; thus, the petitioners committed no
agreement. violation of the apprenticeship period laid down by the law.

The petitioners themselves admitted that Costales and Almoite were initially planned to be a part Further, the apprenticeship agreements, entered into by the parties, complied with the requisites
of the compromise agreement, but their employment has been regularized as early as January under Article 62 of the Labor Code; the company's authorized representative and the
11, 2006; hence, the company did not pursue their inclusion in the compromise agreement.[12] respondents signed the agreements and these were ratified by the company's apprenticeship
committee. The apprenticeship program itself was approved and certified by the TESDA.[22] The
The CA faulted the NLRC for failing to appreciate the evidence regarding the respondents' prior CA, thus, erred in overturning the NLRC's finding that the apprenticeship agreements were valid.
employment with Atlanta. The NLRC recognized the prior employment of Costales and Almoite on
Atlanta's monthly report for December 2003 for the CPS Department/Section dated January 6, Third. There was no illegal dismissal as the respondent workers' tenure ended with the expiration
2004.[13] This record shows that Costales and Almoite were assigned to the company's first shift of the apprenticeship agreement they entered into. There was, therefore, no regular employer-
from 7:00 a.m. to 3:00 p.m. The NLRC ignored Sebolino and Sagun's prior employment under the employee relationship between Atlanta and the respondent workers.
company's Production and Work Schedule for March 7 to 12, 2005 dated March 3, 2004,[14] as
they had been Atlanta's employees as early as March 3, 2004, with Sebolino scheduled to work The Case for Costales, Almoite, Sebolino and Sagun
on March 7-12, 2005 at 7:00 a.m. to 7:00 p.m., while Sagun was scheduled to work for the same
period but from 7:00 p.m. to 7:00 a.m. The CA noted that Atlanta failed to challenge the In a Comment filed on August 6, 2009,[23] Costales, Almoite, Sebolino and Sagun pray for a denial
authenticity of the two documents before it and the labor authorities. of the petition for being procedurally defective and for lack of merit.

Atlanta and Chan moved for reconsideration, but the CA denied the motion in a resolution The respondent workers contend that the petition failed to comply with Section 4, Rule 45 of the
rendered on March 25, 2009.[15] Hence, the present petition. Rules of Court which requires that the petition be accompanied by supporting material portions
of the records. The petitioners failed to attach to the petition a copy of the Production and Work
The Petition Schedule despite their submission that the CA relied heavily on the document in finding the
respondent workers' prior employment with Atlanta. They also did not attach a copy of the
Atlanta seeks a reversal of the CA decision, contending that the appellate court erred in (1) compromise agreement purportedly executed by Costales and Almoite. For this reason, the
concluding that Costales, Almoite, Sebolino and Sagun were employed by Atlanta before they respondent workers submit that the petition should be dismissed.
were engaged as apprentices; (2) ruling that a second apprenticeship agreement is invalid; (3)
declaring that the respondents were illegally dismissed; and (4) disregarding the compromise The respondents posit that the CA committed no error in holding that they were already Atlanta's
agreement executed by Costales and Almoite. It submits the following arguments: employees before they were engaged as apprentices, as confirmed by the company's Production
and Work Schedule.[24] They maintain that the Production and Work Schedule meets the
First. The CA's conclusion that the respondent workers were company employees before they requirement of substantial evidence as the petitioners failed to question its authenticity.
were engaged as apprentices was primarily based on the Monthly Report[16] and the Production They point out that the schedule was prepared by Rose A. Quirit and approved by Adolfo R. Lope,
and Work Schedule for March 7-12, 2005,[17] in total disregard of the Master List[18] prepared by head of the company's PE/Spiral Section. They argue that it was highly unlikely that the head of a
the company accountant, Emelita M. Bernardo. The names of Costales, Almoite, Sebolino and production section of the company would prepare and assign work to the complainants if the
Sagun do not appear as employees in the Master List which "contained the names of all the latter had not been company employees.
persons who were employed by and at petitioner."[19]
The respondent workers reiterate their mistrust of the Master List[25] as evidence that they were
Atlanta faults the CA for relying on the Production and Work Schedule and the Monthly Report not employees of the company at the time they became apprentices. They label the Master List
which were not sworn to, and in disregarding the Master List whose veracity was sworn to by as "self-serving, dubious and even if considered as authentic, its content contradicts a lot of
Bernardo and by Alex Go who headed the company's accounting division. It maintains that the CA petitioner's claim and allegations,"[26] thus -
should have given more credence to the Master List.
1. Aside from the fact that the Master List is not legible, it contains only the names of inactive
Second. In declaring invalid the apprenticeship agreements it entered into with the respondent employees. Even those found by the NLRC to have been employed in the company (such as
workers, the CA failed to recognize the rationale behind the law on apprenticeship. It submits Almoite, Costales and Sagun) do not appear in the list. If Costales and Almoite had been
that under the law,[20] apprenticeship agreements are valid, provided they do not exceed six (6) employed with Atlanta since January 11, 2006, as the company claimed,[27] their names would
months and the apprentices are paid the appropriate wages of at least 75% of the applicable have been in the list, considering that the Master List accounts for all employees "as of May
minimum wage. 2006" - the notation carried on top of each page of the document.
2. There were no entries of employees hired or resigned in the years 2005 and 2006 despite the The procedural issue
"as of May 2006" notation; several pages making up the Master List contain names of employees
for the years 1999 - 2004. The respondent workers ask that the petition be dismissed outright for the petitioners' failure to
attach to the petition a copy of the Production and Work Schedule and a copy of the compromise
3. The fact that Atlanta presented the purported Master List instead of the payroll raised serious agreement Costales and Almoite allegedly entered into -- material portions of the record that
doubts on the authenticity of the list. should accompany and support the petition, pursuant to Section 4, Rule 45 of the Rules of Court.

In sum, the respondent workers posit that the presentation of the Master List revealed the In Mariners Polytechnic Colleges Foundation, Inc. v. Arturo J. Garchitorena[35] where the Court
"intention of the herein petitioner[s] to perpetually hide the fact of [their] prior employment." [28] addressed essentially the same issue arising from Section 2(d), Rule 42 of the Rules of
Court,[36] we held that the phrase "of the pleadings and other material portions of the record xxx
On the supposed apprenticeship agreements they entered into, Costales, Almoite, Sebolino and as would support the allegation of the petition clearly contemplates the exercise of discretion on
Sagun refuse to accept the agreements' validity, contending that the company's apprenticeship the part of the petitioner in the selection of documents that are deemed to be relevant to the
program is merely a ploy "to continually deprive [them] of their rightful wages and benefits which petition. The crucial issue to consider then is whether or not the documents accompanying the
are due them as regular employees."[29] They submit the following "indubitable facts and petition sufficiently supported the allegations therein."[37]
ratiocinations:"[30]
As in Mariners, we find that the documents attached to the petition sufficiently support the
1. The apprenticeship agreements were submitted to TESDA only in 2005 (with dates of receipt petitioners' allegations. The accompanying CA decision[38] and resolution,[39] as well as those of
on "1/4/05" & "2/22/05"[31]), when the agreements were supposed to have been executed in the labor arbiter[40] and the NLRC,[41] referred to the parties' position papers and even to their
April or May 2004. Thus, the submission was made long after the starting date of the workers' replies and rejoinders. Significantly, the CA decision narrates the factual antecedents, defines the
apprenticeship or even beyond the agreement's completion/termination date, in violation of complainants' cause of action, and cites the arguments, including the evidence the parties
Section 23, Rule VI, Book II of the Labor Code. adduced. If any, the defect in the petition lies in the petitioners' failure to provide legible copies
of some of the material documents mentioned, especially several pages in the decisions of the
2. The respondent workers were made to undergo apprenticeship for occupations different from labor arbiter and of the NLRC. This defect, however, is not fatal as the challenged CA decision
those allegedly approved by TESDA. TESDA approved Atlanta's apprenticeship program on "Plastic clearly summarized the labor tribunal's rulings. We, thus, find no procedural obstacle in resolving
Molder"[32] and not for extrusion molding process, engineering, pelletizing process and mixing the petition on the merits.
process.
The merits of the case
3. The respondents were already skilled workers prior to the apprenticeship program as they had
been employed and made to work in the different job positions where they had undergone We find no merit in the petition. The CA committed no reversible error in nullifying the NLRC
training. Sagun and Sebolino, together with Mabanag, Pedregoza, dela Cruz, Chiong, Magalang decision[42] and in affirming the labor arbiter's ruling,[43] as it applies to Costales, Almoite,
and Alegria were even given production assignments and work schedule at the PE/Spiral Section Sebolino and Sagun. Specifically, the CA correctly ruled that the four were illegally dismissed
from May 11, 2004 to March 23, 2005, and some of them were even assigned to the 3:00 p.m. - because (1) they were already employees when they were required to undergo apprenticeship
11:00 p.m. and graveyard shifts (11:00 p.m. - 7:00 a.m.) during the period.[33] and (2) apprenticeship agreements were invalid.

4. The respondent workers were required to continue as apprentices beyond six months. The The following considerations support the CA ruling.
TESDA certificate of completion indicates that the workers' apprenticeship had been completed
after six months. Yet, they were suffered to work as apprentices beyond that period. First. Based on company operations at the time material to the case, Costales, Almoite, Sebolino
and Sagun were already rendering service to the company as employees before they were made
Costales, Almoite, Sebolino and Sagun resolutely maintain that they were illegally dismissed, as to undergo apprenticeship. The company itself recognized the respondents' status through
the reason for the termination of their employment - notice of the completion of the second relevant operational records - in the case of Costales and Almoite, the CPS monthly report for
apprenticeship agreement - did not constitute either a just or authorized cause under Articles December 2003[44] which the NLRC relied upon and, for Sebolino and Sagun, the production and
282 and 283 of the Labor Code. work schedule for March 7 to 12, 2005[45] cited by the CA.

Finally, Costales and Almoite refuse to be bound by the compromise agreement[34] that Atlanta Under the CPS monthly report, Atlanta assigned Costales and Almoite to the first shift (7:00 a.m.
presented to defeat the two workers' cause of action. They claim that the supposed agreement is to 3:00 p.m.) of the Section's work. The Production and Work Schedules, in addition to the one
invalid as against them, principally because they did not sign it. noted by the CA, showed that Sebolino and Sagun were scheduled on different shifts vis-Ã -vis the
production and work of the company's PE/Spiral Section for the periods July 5-10,
The Court's Ruling 2004;[46] October 25-31, 2004;[47] November 8-14, 2004;[48] November 16-22, 2004;[49] January 3-
9, 2005;[50] January 10-15, 2005;[51] March 7-12, 2005[52] and March 17-23, 2005.[53] binding on Costales and Almoite because they did not sign it. The company itself admitted[62] that
while Costales and Almoite were initially intended to be a part of the agreement, it did not pursue
We stress that the CA correctly recognized the authenticity of their inclusion "due to their regularization as early as January 11, 2006."[63]cralaw
the operational documents, for the failure of Atlanta to raise a challenge against
these documents before the labor arbiter, the NLRC and the CA itself. WHEREFORE, premises considered, we hereby DENY the petition for lack of merit. The assailed
The appellate court, thus, found the said documents sufficient to establish the employment of decision and resolution of the Court of Appeals are AFFIRMED. Costs against the petitioner
the respondents before their engagement as apprentices. Atlanta Industries, Inc.

Second. The Master List[54] (of employees) that the petitioners heavily rely upon as proof of their SO ORDERED.
position that the respondents were not Atlanta's employees, at the time they were engaged as
apprentices, is unreliable and does not inspire belief.

The list, consisting of several pages, is hardly legible. It requires extreme effort to sort out the
names of the employees listed, as well as the other data contained in the list. For this reason
alone, the list deserves little or no consideration. As the respondents also pointed out, the list
itself contradicts a lot of Atlanta's claims and allegations, thus: it lists only the names of inactive
employees; even the names of those the NLRC found to have been employed by Atlanta, like
Costales and Almoite, and those who even Atlanta claims attained regular status on January 11,
2006,[55] do not appear in the list when it was supposed to account for all employees "as of May
6, 2006." Despite the "May 6, 2006" cut off date, the list contains no entries of employees who
were hired or who resigned in 2005 and 2006. We note that the list contains the names of
employees from 1999 to 2004.

We cannot fault the CA for ignoring the Master List even if Bernardo, its head office accountant,
swore to its correctness and authenticity.[56] Its substantive unreliability gives it very minimal
probative value. Atlanta would have been better served, in terms of reliable evidence, if true
copies of the payroll (on which the list was based, among others, as Bernardo claimed in her
affidavit) were presented instead.

Third. The fact that Costales, Almoite, Sebolino and Sagun were already rendering service to the
company when they were made to undergo apprenticeship (as established by the evidence)
renders the apprenticeship agreements irrelevant as far as the four are concerned. This reality is
highlighted by the CA finding that the respondents occupied positions such as machine operator,
scaleman and extruder operator - tasks that are usually necessary and desirable in Atlanta's usual
business or trade as manufacturer of plastic building materials.[57] These tasks and their nature
characterized the four as regular employees under Article 280 of the Labor Code. Thus, when
they were dismissed without just or authorized cause, without notice, and without the
opportunity to be heard, their dismissal was illegal under the law.[58]

Even if we recognize the company's need to train its employees through apprenticeship, we can
only consider the first apprenticeship agreement for the purpose. With the expiration of the first
agreement and the retention of the employees, Atlanta had, to all intents and purposes,
recognized the completion of their training and their acquisition of a regular employee status. To
foist upon them the second apprenticeship agreement for a second skill which was not even
mentioned in the agreement itself,[59] is a violation of the Labor Code's implementing rules[60] and
is an act manifestly unfair to the employees, to say the least. This we cannot allow.

Fourth. The compromise agreement[61] allegedly entered into by Costales and Almoite, together
with Ramos, Villagomez and Alegria, purportedly in settlement of the case before the NLRC, is not
Republic of the Philippines Contract Agreement, PROVI was to provide TESDA with the system and equipment compliant
SUPREME COURT with the specifications defined in the Technical Proposal. In return, TESDA would pay PROVI
Manila the amount of Thirty-Nine Million Four Hundred and Seventy-Five Thousand Pesos
(₱39,475,000) within fifteen (15) days after TESDA’s acceptance of the contracted goods and
SECOND DIVISION services.
G.R. No. 155504 June 26, 2009 On August 24, 2000, TESDA and PROVI executed an "Addendum to the Contract Agreement
PROFESSIONAL VIDEO, INC., Petitioner, Project: PVC ID Card Issuance" (Addendum),8 whose terms bound PROVI to deliver one
vs. hundred percent (100%) of the enumerated supplies to TESDA consisting of five hundred
TECHNICAL EDUCATION AND SKILLS DEVELOPMENT AUTHORITY, Respondent. thousand (500,000) pieces of security foil; five (5) pieces of security die with TESDA seal; five
hundred thousand (500,000) pieces of pre-printed and customized identification cards; one
DECISION hundred thousand (100,000) pieces of scannable answer sheets; and five hundred thousand
(500,000) customized TESDA holographic laminate. In addition, PROVI would install and
BRION, J.: maintain the following equipment: one (1) unit of Micropoise, two (2) units of card printer,
We resolve the petition filed by Professional Video, Inc. (PROVI)1 to annul and set aside the three (3) units of flatbed scanner, one (1) unit of OMR scanner, one (1) unit of Server, and
Decision2 of the Court of Appeals (CA) in CA-G.R. SP No. 67599, and its subsequent Order seven (7) units of personal computer.
denying PROVI’s motion for reconsideration.3 The assailed CA decision nullified: TESDA in turn undertook to pay PROVI thirty percent (30%) of the total cost of the supplies
a. the Order4 dated July 16, 2001 of the Regional Trial Court (RTC), Pasig City, in Civil Case No. within thirty (30) days after receipt and acceptance of the contracted supplies, with the
68527, directing the attachment/garnishment of the properties of respondent Technical balance payable within thirty (30) days after the initial payment.
Education and Skills Development Authority (TESDA) amounting to Thirty Five Million Pesos According to PROVI, it delivered the following items to TESDA on the dates indicated:
(₱35,000,000.00); and

b. the RTC’s August 24, 2001 Order5 denying respondent TESDA’s motion to discharge/quash Date Particulars Amount
writ of attachment.
26 April 2000 48,500 pre-printed cards ₱ 2,764,500.00
THE FACTUAL BACKGROUND

PROVI is an entity engaged in the sale of high technology equipment, information technology 07 June 2000 330,000 pre-printed cards 18,810,000.00
products and broadcast devices, including the supply of plastic card printing and security
facilities.
07 August 2000 121,500 pre-printed cards 6,925,500.00
TESDA is an instrumentality of the government established under Republic Act (R.A.) No. 7796
(the TESDA Act of 1994) and attached to the Department of Labor and Employment (DOLE) to
26 April 2000 100,000 scannable answer sheets 600,000.00
"develop and establish a national system of skills standardization, testing, and certification in
the country."6 To fulfill this mandate, it sought to issue security-printed certification and/or
identification polyvinyl (PVC) cards to trainees who have passed the certification process. 06 June 2000 5 Micro-Poise customized die 375,000.00

TESDA’s Pre-Qualification Bids Award Committee (PBAC) conducted two (2) public biddings on
June 25, 1999 and July 22, 1999 for the printing and encoding of PVC cards. A failure of 13 June 2000 35 boxes @ 15,000 imp/box 10,000,000.00
bidding resulted in both instances since only two (2) bidders – PROVI and Sirex Phils. Corp. – Custom hologram Foil
submitted proposals.
Total ₱ 39,475,000.00
Due to the failed bidding, the PBAC recommended that TESDA enter into a negotiated
contract with PROVI. On December 29, 1999, TESDA and PROVI signed and executed their
PROVI further alleged that out of TESDA’s liability of ₱39,475,000.00, TESDA paid PROVI only
"Contract Agreement Project: PVC ID Card Issuance" (the Contract Agreement) for the
₱3,739,500.00, leaving an outstanding balance of ₱35,735,500.00, as evidenced by PROVI’s
provision of goods and services in the printing and encoding of PVC cards.7 Under this
Statement of Account.9 Despite the two demand letters dated March 8 and April 27, 2001 that attach its funds since these are public funds. Lastly, TESDA points out that PROVI failed to
PROVI sent TESDA,10 the outstanding balance remained unpaid. comply with the elements for the valid issuance of a writ of preliminary attachment, as set
forth in Section 1, Rule 57 of the 1997 Rules of Civil Procedure.
On July 11, 2001, PROVI filed with the RTC a complaint for sum of money with damages
against TESDA. PROVI additionally prayed for the issuance of a writ of preliminary THE COURT’S RULING
attachment/garnishment against TESDA. The case was docketed as Civil Case No. 68527. In an
Order dated July 16, 2001, the RTC granted PROVI’s prayer and issued a writ of preliminary We find, as the CA did, that the RTC’s questioned order involved a gross misreading of the law
attachment against the properties of TESDA not exempt from execution in the amount of and jurisprudence amounting to action in excess of its jurisdiction. Hence, we resolve to DENY
₱35,000,000.00.11 PROVI’s petition for lack of merit.

TESDA responded on July 24, 2001 by filing a Motion to Discharge/Quash the Writ of TESDA is an instrumentality of the government undertaking governmental functions.
Attachment, arguing mainly that public funds cannot be the subject of garnishment.12 The RTC R.A. No. 7796 created the Technical Education and Skills Development Authority or TESDA
denied TESDA’s motion, and subsequently ordered the manager of the Land Bank of the under the declared "policy of the State to provide relevant, accessible, high quality and
Philippines to produce TESDA’s bank statement for the garnishment of the covered amount.13 efficient technical education and skills development in support of the development of high
Faced with these rulings, TESDA filed a Petition for Certiorari with the CA to question the RTC quality Filipino middle-level manpower responsive to and in accordance with Philippine
orders, imputing grave abuse of discretion amounting to lack or excess of jurisdiction on the development goals and priorities."17 TESDA replaced and absorbed the National Manpower
trial court for issuing a writ of preliminary attachment against TESDA’s public funds.14 and Youth Council, the Bureau of Technical and Vocational Education and the personnel and
functions pertaining to technical-vocational education in the regional offices of the
The CA set aside the RTC’s orders after finding that: (a) TESDA’s funds are public in nature and, Department of Education, Culture and Sports and the apprenticeship program of the Bureau
therefore, exempt from garnishment; and (b) TESDA’s purchase of the PVC cards was a of Local Employment of the DOLE.18 Thus, TESDA is an unincorporated instrumentality of the
necessary incident of its governmental function; consequently, it ruled that there was no legal government operating under its own charter.
basis for the issuance of a writ of preliminary attachment/garnishment.15 The CA subsequently
denied PROVI’s motion for reconsideration;16 hence, the present petition. Among others, TESDA is empowered to: approve trade skills standards and trade tests as
established and conducted by private industries; establish and administer a system of
THE PETITION accreditation of both public and private institutions; establish, develop and support the
institutions' trainors' training and/or programs; exact reasonable fees and charges for such
The petition submits to this Court the single issue of whether or not the writ of attachment tests and trainings conducted, and retain such earnings for its own use, subject to guidelines
against TESDA and its funds, to cover PROVI’s claim against TESDA, is valid. The issue involves a promulgated by the Authority; and perform such other duties and functions necessary to carry
pure question of law and requires us to determine whether the CA was correct in ruling that out the provisions of the Act, consistent with the purposes of the creation of TESDA.19
the RTC gravely abused its discretion in issuing a writ of attachment against TESDA.
Within TESDA’s structure, as provided by R.A. No. 7769, is a Skills Standards and Certification
PROVI argues that the CA should have dismissed TESDA’s petition for certiorari as the RTC did Office expressly tasked, among others, to develop and establish a national system of skills
not commit any grave abuse of discretion when it issued the Orders dated July 16, 2001 and standardization, testing and certification in the country; and to conduct research and
August 24, 2001. According to PROVI, the RTC correctly found that when TESDA entered into a development on various occupational areas in order to recommend policies, rules and
purely commercial contract with PROVI, TESDA went to the level of an ordinary private citizen regulations for effective and efficient skills standardization, testing and certification system in
and could no longer use the defense of state immunity from suit. PROVI further contends that the country.20 The law likewise mandates that "[T]here shall be national occupational skills
it has alleged sufficient ultimate facts in the affidavit it submitted to support its application for standards to be established by TESDA-accredited industry committees. The TESDA shall
a writ of preliminary attachment. Lastly, PROVI maintains that sufficient basis existed for the develop and implement a certification and accreditation program in which private groups and
RTC’s grant of the writ of preliminary attachment, since TESDA fraudulently misapplied or trade associations are accredited to conduct approved trade tests, and the local government
embezzled the money earmarked for the payment of the contracted supplies and services, as units to promote such trade testing activities in their respective areas in accordance with the
evidenced by the Certification as to Availability of Funds. guidelines to be set by the TESDA. The Secretary of Labor and Employment shall determine
TESDA claims that it entered the Contract Agreement and Addendum in the performance of the occupational trades for mandatory certification. All certificates relating to the national
its governmental function to develop and establish a national system of skills standardization, trade skills testing and certification system shall be issued by the TESDA through its
testing, and certification; in the performance of this governmental function, TESDA is immune Secretariat."21
from suit. Even assuming that it had impliedly consented to be sued by entering into a
contract with PROVI, TESDA posits that the RTC still did not have the power to garnish or
All these measures are undertaken pursuant to the constitutional command that "[T]he State least provocation, the loss of time and energy required to defend against law suits, in the
affirms labor as a primary social economic force," and shall "protect the rights of workers and absence of such a basic principle that constitutes such an effective obstacle, could very well be
promote their welfare";22 that "[T]he State shall protect and promote the right of all citizens to imagined.
quality education at all levels, and shall take appropriate steps to make such education
accessible to all";23 in order "to afford protection to labor" and "promote full employment and PROVI argues that TESDA can be sued because it has effectively waived its immunity when it
equality of employment opportunities for all."24 entered into a contract with PROVI for a commercial purpose. According to PROVI, since the
purpose of its contract with TESDA is to provide identification PVC cards with security seal
Under these terms, both constitutional and statutory, we do not believe that the role and which TESDA will thereafter sell to TESDA trainees, TESDA thereby engages in commercial
status of TESDA can seriously be contested: it is an unincorporated instrumentality of the transactions not incidental to its governmental functions.
government, directly attached to the DOLE through the participation of the Secretary of Labor
as its Chairman, for the performance of governmental functions – i.e., the handling of formal TESDA’s response to this position is to point out that it is not engaged in business, and there is
and non-formal education and training, and skills development. As an unincorporated nothing in the records to show that its purchase of the PVC cards from PROVI is for a business
instrumentality operating under a specific charter, it is equipped with both express and purpose. While TESDA admits that it will charge the trainees with a fee for the PVC cards, it
implied powers,25 and all State immunities fully apply to it.26 claims that this fee is only to recover their costs and is not intended for profit.

TESDA, as an agency of the State, cannot be sued without its consent. We agree with TESDA. As the appellate court found, the PVC cards purchased by TESDA from
PROVI are meant to properly identify the trainees who passed TESDA’s National Skills
The rule that a state may not be sued without its consent is embodied in Section 3, Article XVI Certification Program – the program that immediately serves TESDA’s mandated function of
of the 1987 Constitution and has been an established principle that antedates this developing and establishing a national system of skills standardization, testing, and
Constitution.27 It is as well a universally recognized principle of international law that exempts certification in the country.32 Aside from the express mention of this function in R.A. No. 7796,
a state and its organs from the jurisdiction of another state.28 The principle is based on the the details of this function are provided under DOLE Administrative Order No. 157, S. 1992, as
very essence of sovereignty, and on the practical ground that there can be no legal right as supplemented by Department Order Nos. 3 thru 3-F, S. 1994 and Department Order No. 13, S.
against the authority that makes the law on which the right depends.29 It also rests on reasons 1994.33
of public policy — that public service would be hindered, and the public endangered, if the
sovereign authority could be subjected to law suits at the instance of every citizen and, Admittedly, the certification and classification of trainees may be undertaken in ways other
consequently, controlled in the uses and dispositions of the means required for the proper than the issuance of identification cards, as the RTC stated in its assailed Order.34 How the
administration of the government.30 mandated certification is to be done, however, lies within the discretion of TESDA as an
incident of its mandated function, and is a properly delegated authority that this Court cannot
The proscribed suit that the state immunity principle covers takes on various forms, namely: a inquire into, unless its exercise is attended by grave abuse of discretion.
suit against the Republic by name; a suit against an unincorporated government agency; a suit
against a government agency covered by a charter with respect to the agency’s performance That TESDA sells the PVC cards to its trainees for a fee does not characterize the transaction as
of governmental functions; and a suit that on its face is against a government officer, but industrial or business; the sale, expressly authorized by the TESDA Act,35 cannot be considered
where the ultimate liability will fall on the government. In the present case, the writ of separately from TESDA’s general governmental functions, as they are undertaken in the
attachment was issued against a government agency covered by its own charter. As discussed discharge of these functions. Along this line of reasoning, we held in Mobil Philippines v.
above, TESDA performs governmental functions, and the issuance of certifications is a task Customs Arrastre Services:36
within its function of developing and establishing a system of skills standardization, testing, Now, the fact that a non-corporate government entity performs a function proprietary in
and certification in the country. From the perspective of this function, the core reason for the nature does not necessarily result in its being suable. If said non-governmental function is
existence of state immunity applies – i.e., the public policy reason that the performance of undertaken as an incident to its governmental function, there is no waiver thereby of the
governmental function cannot be hindered or delayed by suits, nor can these suits control the sovereign immunity from suit extended to such government entity.
use and disposition of the means for the performance of governmental functions. In
Providence Washington Insurance Co. v. Republic of the Philippines,31 we said: TESDA’s funds are public in character, hence exempt from attachment or garnishment.

[A] continued adherence to the doctrine of non-suability is not to be deplored for as against Even assuming that TESDA entered into a proprietary contract with PROVI and thereby gave
the inconvenience that may be caused private parties, the loss of governmental efficiency and its implied consent to be sued, TESDA’s funds are still public in nature and, thus, cannot be the
the obstacle to the performance of its multifarious functions are far greater if such a valid subject of a writ of garnishment or attachment. Under Section 33 of the TESDA Act, the
fundamental principle were abandoned and the availability of judicial remedy were not thus TESDA budget for the implementation of the Act shall be included in the annual General
restricted. With the well known propensity on the part of our people to go to court, at the Appropriation Act; hence, TESDA funds, being sourced from the Treasury, are moneys
belonging to the government, or any of its departments, in the hands of public officials.37 We (a) In an action for recovery of a specified amount of money or damages, other than moral
specifically spoke of the limits in dealing with this fund in Republic v. Villasor38 when we said: and exemplary, on a cause of action arising from law, contract, quasi-contract, delict or quasi-
delict against a party who is about to depart from the Philippines with intent to defraud his
This fundamental postulate underlying the 1935 Constitution is now made explicit in the creditors;
revised charter. It is therein expressly provided, ‘The State may not be sued without its
consent.’ A corollary, both dictated by logic and sound sense, from such a basic concept, is (b) In an action for money or property embezzled or fraudulently misapplied or converted to
that public funds cannot be the object of garnishment proceedings even if the consent to be his use by a public officer, or an officer of a corporation, or an attorney, factor, broker, agent
sued had been previously granted and the state liability adjudged. Thus in the recent case of or clerk, in the course of his employment as such, or by any other person in a fiduciary
Commissioner of Public Highways vs. San Diego, such a well-settled doctrine was restated in capacity, or for a willful violation of duty;
the opinion of Justice Teehankee:
(c) In an action to recover the possession of property unjustly or fraudulently taken, detained
The universal rule that where the State gives its consent to be sued by private parties either by or converted, when the property or any part thereof, has been concealed, removed or
general or special law, it may limit claimant's action 'only up to the completion of proceedings disposed of to prevent its being found or taken by the applicant or an authorized person;
anterior to the stage of execution' and that the power of the Courts ends when the judgment
is rendered, since government funds and properties may not be seized under writs of (d) In an action against a party who has been guilty of fraud in contracting the debt or
execution or garnishment to satisfy such judgments, is based on obvious considerations of incurring the obligation upon which the action is brought, or in concealing or disposing of the
public policy. Disbursements of public funds must be covered by the corresponding property for the taking, detention or conversion of which the action is brought;
appropriation as required by law. The functions and public services rendered by the State (e) In an action against a party who has removed or disposed of his property, or is about to do
cannot be allowed to be paralyzed or disrupted by the diversion of public funds from their so, with intent to defraud his creditors;
legitimate and specific objects, as appropriated by law. [Emphasis supplied.]
(f) In an action against a party who does not reside and is not found in the Philippines, or on
We reiterated this doctrine in Traders Royal Bank v. Intermediate Appellate Court,39 where we whom summons may be served by publication. [Emphasis supplied.]
said:
Jurisprudence teaches us that the rule on the issuance of a writ of attachment must be
The NMPC’s implied consent to be sued notwithstanding, the trial court did not have the construed strictly in favor of the defendant. Attachment, a harsh remedy, must be issued only
power to garnish NMPC deposits to answer for any eventual judgment against it. Being public on concrete and specific grounds and not on general averments merely quoting the words of
funds, the deposits are not within the reach of any garnishment or attachment the pertinent rules.42 Thus, the applicant’s affidavit must contain statements clearly showing
proceedings. [Emphasis supplied.] that the ground relied upon for the attachment exists.
As pointed out by TESDA in its Memorandum,40 the garnished funds constitute TESDA’s Section 1(b), Rule 57 of the Rules of Court, that PROVI relied upon, applies only where money
lifeblood – in government parlance, its MOOE41 – whose withholding via a writ of attachment, or property has been embezzled or converted by a public officer, an officer of a corporation,
even on a temporary basis, would paralyze TESDA’s functions and services. As well, these or some other person who took advantage of his fiduciary position or who willfully violated his
funds also include TESDA’s Personal Services funds from which salaries of TESDA personnel are duty.
sourced. Again and for obvious reasons, the release of these funds cannot be delayed.
PROVI, in this case, never entrusted any money or property to TESDA. While the Contract
PROVI has not shown that it is entitled to the writ of attachment. Agreement is supported by a Certificate as to Availability of Funds (Certificate) issued by the
Even without the benefit of any immunity from suit, the attachment of TESDA funds should Chief of TESDA’s Accounting Division, this Certificate does not automatically confer ownership
not have been granted, as PROVI failed to prove that TESDA "fraudulently misapplied or over the funds to PROVI. Absent any actual disbursement, these funds form part of TESDA’s
converted funds allocated under the Certificate as to Availability of Funds." Section 1, Rule 57 public funds, and TESDA’s failure to pay PROVI the amount stated in the Certificate cannot be
of the Rules of Court sets forth the grounds for issuance of a writ of preliminary attachment, construed as an act of fraudulent misapplication or embezzlement. In this regard, Section 86
as follows: of Presidential Decree No. 1445 (The Accounting Code) provides:

SECTION 1. Grounds upon which attachment may issue. – A plaintiff or any proper party may, Section 86. Certificate showing appropriation to meet contract. – Except in a case of a contract
at the commencement of the action or at any time thereafter, have the property of the for personal service, for supplies for current consumption or to be carried in stock not
adverse party attached as security for the satisfaction of any judgment that may be recovered exceeding the estimated consumption for three months, or banking transactions of
in the following cases: government-owned or controlled banks, no contract involving the expenditure of public funds
by any government agency shall be entered into or authorized unless the proper accounting
official or the agency concerned shall have certified to the officer entering into the obligation
that funds have been duly appropriated for the purpose and that the amount necessary to
cover the proposed contract for the current fiscal year is available for expenditure on account
thereof, subject to verification by the auditor concerned. The certification signed by the
proper accounting official and the auditor who verified it, shall be attached to and become an
integral part of the proposed contract, and the sum so certified shall not thereafter be
available for expenditure for any other purpose until the obligation of the government agency
concerned under the contract is fully extinguished. [Emphasis supplied.]

By law, therefore, the amount stated in the Certification should be intact and remains devoted
to its purpose since its original appropriation. PROVI can rebut the presumption that
necessarily arises from the cited provision only by evidence to the contrary. No such evidence
has been adduced.

Section 1 (d), Rule 57 of the Rules of Court applies where a party is guilty of fraud in
contracting a debt or incurring an obligation, or in concealing or disposing of the property for
the taking, detention or conversion of which the action is brought. In Wee v. Tankiansee,43 we
held that for a writ of attachment to issue under this Rule, the applicant must sufficiently
show the factual circumstances of the alleged fraud because fraudulent intent cannot be
inferred from the debtor’s mere non-payment of the debt or failure to comply with his
obligation. The affidavit, being the foundation of the writ, must contain particulars showing
how the imputed fraud was committed for the court to decide whether or not to issue the
writ. To reiterate, a writ of attachment can only be granted on concrete and specific grounds
and not on general averments merely quoting the words of the rules.44

The affidavit filed by PROVI through Elmer Ramiro, its President and Chief Executive Officer,
only contained a general allegation that TESDA had fraudulent misapplied or converted the
amount of ₱10,975,000.00 that was allotted to it. Clearly, we cannot infer any finding of fraud
from PROVI’s vague assertion, and the CA correctly ruled that the lower court acted with
grave abuse of discretion in granting the writ of attachment despite want of any valid ground
for its issuance.1avvphi1

For all these reasons, we support the appellate court’s conclusion that no valid ground exists
to support the grant of the writ of attachment against TESDA. The CA’s annulment and setting
aside of the Orders of the RTC were therefore fully in order.

WHEREFORE, premises considered, we hereby DENY the petition filed by petitioner

SO ORDERED.

ARTURO D. BRION
Republic of the Philippines TWO PESOS (₱1,632.00), representing her last salary and the amount of SEVEN THOUSAND
SUPREME COURT TWO HUNDRED TWENTY EIGHT (₱7,228.00) PESOS representing her prorated 13th month
Manila pay.

SECOND DIVISION All other issues are likewise dismissed.

G.R. No. 152894 August 17, 2007 SO ORDERED.6

CENTURY CANNING CORPORATION, Petitioner, On appeal, the National Labor Relations Commission (NLRC) affirmed with modification the
vs. Labor Arbiter’s decision, thus:
COURT OF APPEALS and GLORIA C. PALAD, Respondents.
WHEREFORE, premises considered, the decision of the Arbiter dated 25 February 1999 is
DECISION hereby MODIFIED in that, in addition, respondents are ordered to pay complainant’s
backwages for two (2) months in the amount of ₱7,176.00 (₱138.75 x 26 x 2 mos.). All other
CARPIO, J.: dispositions of the Arbiter as appearing in the dispositive portion of his decision are
The Case AFFIRMED.

This is a petition for review1 of the Decision2 dated 12 November 2001 and the Resolution SO ORDERED.7
dated 5 April 2002 of the Court of Appeals in CA-G.R. SP No. 60379. Upon denial of Palad’s motion for reconsideration, Palad filed a special civil action for
The Facts certiorari with the Court of Appeals. On 12 November 2001, the Court of Appeals rendered a
decision, the dispositive portion of which reads:
On 15 July 1997, Century Canning Corporation (petitioner) hired Gloria C. Palad (Palad) as "fish
cleaner" at petitioner’s tuna and sardines factory. Palad signed on 17 July 1997 an WHEREFORE, in view of the foregoing, the questioned decision of the NLRC is hereby SET
apprenticeship agreement3 with petitioner. Palad received an apprentice allowance of ASIDE and a new one entered, to wit:
₱138.75 daily. On 25 July 1997, petitioner submitted its apprenticeship program for approval (a) finding the dismissal of petitioner to be illegal;
to the Technical Education and Skills Development Authority (TESDA) of the Department of
Labor and Employment (DOLE). On 26 September 1997, the TESDA approved petitioner’s (b) ordering private respondent to pay petitioner her underpayment in wages;
apprenticeship program.4
(c) ordering private respondent to reinstate petitioner to her former position without loss of
According to petitioner, a performance evaluation was conducted on 15 November 1997, seniority rights and to pay her full backwages computed from the time compensation was
where petitioner gave Palad a rating of N.I. or "needs improvement" since she scored only withheld from her up to the time of her reinstatement;
27.75% based on a 100% performance indicator. Furthermore, according to the performance
evaluation, Palad incurred numerous tardiness and absences. As a consequence, petitioner (d) ordering private respondent to pay petitioner attorney’s fees equivalent to ten (10%) per
issued a termination notice5 dated 22 November 1997 to Palad, informing her of her cent of the monetary award herein; and
termination effective at the close of business hours of 28 November 1997. (e) ordering private respondent to pay the costs of the suit.
Palad then filed a complaint for illegal dismissal, underpayment of wages, and non-payment of SO ORDERED.8
pro-rated 13th month pay for the year 1997.
The Ruling of the Court of Appeals
On 25 February 1999, the Labor Arbiter dismissed the complaint for lack of merit but ordered
petitioner to pay Palad her last salary and her pro-rated 13th month pay. The dispositive The Court of Appeals held that the apprenticeship agreement which Palad signed was not
portion of the Labor Arbiter’s decision reads: valid and binding because it was executed more than two months before the TESDA approved
petitioner’s apprenticeship program. The Court of Appeals cited Nitto Enterprises v. National
WHEREFORE, premises considered, judgment is hereby rendered declaring that the complaint Labor Relations Commission,9 where it was held that prior approval by the DOLE of the
for illegal dismissal filed by the complainant against the respondents in the above-entitled proposed apprenticeship program is a condition sine qua non before an apprenticeship
case should be, as it is hereby DISMISSED for lack of merit. However, the respondents are agreement can be validly entered into.
hereby ordered to pay the complainant the amount of ONE THOUSAND SIX HUNDRED THIRTY-
The Court of Appeals also held that petitioner illegally dismissed Palad. The Court of Appeals prepared by petitioner and submitted to the Department of Labor and Employment. However,
ruled that petitioner failed to show that Palad was properly apprised of the required standard the apprenticeship agreement was filed only on June 7, 1990. Notwithstanding the absence of
of performance. The Court of Appeals likewise held that Palad was not afforded due process approval by the Department of Labor and Employment, the apprenticeship agreement was
because petitioner did not comply with the twin requirements of notice and hearing. enforced the day it was signed.

The Issues Based on the evidence before us, petitioner did not comply with the requirements of the
law. It is mandated that apprenticeship agreements entered into by the employer and
Petitioner raises the following issues: apprentice shall be entered only in accordance with the apprenticeship program duly approved
1. WHETHER THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN HOLDING THAT by the Minister of Labor and Employment.
PRIVATE RESPONDENT WAS NOT AN APPRENTICE; and Prior approval by the Department of Labor and Employment of the proposed apprenticeship
2. WHETHER THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN HOLDING THAT program is, therefore, a condition sine qua non before an apprenticeship agreement can be
PETITIONER HAD NOT ADEQUATELY PROVEN THE EXISTENCE OF A VALID CAUSE IN validly entered into.
TERMINATING THE SERVICE OF PRIVATE RESPONDENT.10 The act of filing the proposed apprenticeship program with the Department of Labor and
The Ruling of the Court Employment is a preliminary step towards its final approval and does not instantaneously give
rise to an employer-apprentice relationship.
The petition is without merit.
Article 57 of the Labor Code provides that the State aims to "establish a national
Registration and Approval by the TESDA of Apprenticeship Program Required Before Hiring of apprenticeship program through the participation of employers, workers and government and
Apprentices non-government agencies" and "to establish apprenticeship standards for the protection of
apprentices." To translate such objectives into existence, prior approval of the DOLE to any
The Labor Code defines an apprentice as a worker who is covered by a written apprenticeship apprenticeship program has to be secured as a condition sine qua non before any such
agreement with an employer.11 One of the objectives of Title II (Training and Employment of apprenticeship agreement can be fully enforced. The role of the DOLE in apprenticeship
Special Workers) of the Labor Code is to establish apprenticeship standards for the protection programs and agreements cannot be debased.
of apprentices.12 In line with this objective, Articles 60 and 61 of the Labor Code provide:
Hence, since the apprenticeship agreement between petitioner and private respondent has no
ART. 60. Employment of apprentices. — Only employers in the highly technical industries may force and effect in the absence of a valid apprenticeship program duly approved by the DOLE,
employ apprentices and only in apprenticeable occupations approved by the Minister of Labor private respondent’s assertion that he was hired not as an apprentice but as a delivery boy
and Employment. (Emphasis supplied) ("kargador" or "pahinante") deserves credence. He should rightly be considered as a regular
ART. 61. Contents of apprenticeship agreements. — Apprenticeship agreements, including the employee of petitioner as defined by Article 280 of the Labor Code x x x. (Emphasis supplied)14
wage rates of apprentices, shall conform to the rules issued by the Minister of Labor and Republic Act No. 779615 (RA 7796), which created the TESDA, has transferred the authority
Employment. The period of apprenticeship shall not exceed six months. Apprenticeship over apprenticeship programs from the Bureau of Local Employment of the DOLE to the
agreements providing for wage rates below the legal minimum wage, which in no case shall TESDA.16 RA 7796 emphasizes TESDA’s approval of the apprenticeship program as a pre-
start below 75 percent of the applicable minimum wage, may be entered into only in requisite for the hiring of apprentices. Such intent is clear under Section 4 of RA 7796:
accordance with apprenticeship programs duly approved by the Minister of Labor and
Employment. The Ministry shall develop standard model programs of apprenticeship. SEC. 4. Definition of Terms. — As used in this Act:
(Emphasis supplied)
xxx
In Nitto Enterprises v. National Labor Relations Commission,13 the Court cited Article 61 of the
Labor Code and held that an apprenticeship program should first be approved by the DOLE j) "Apprenticeship" training within employment with compulsory related theoretical
before an apprentice may be hired, otherwise the person hired will be considered a regular instructions involving a contract between an apprentice and an employer on an approved
employee. The Court held: apprenticeable occupation;

In the case at bench, the apprenticeship agreement between petitioner and private k) "Apprentice" is a person undergoing training for an approved apprenticeable
respondent was executed on May 28, 1990 allegedly employing the latter as an apprentice in occupation during an established period assured by an apprenticeship agreement;
the trade of "care maker/molder." On the same date, an apprenticeship program was
l) "Apprentice Agreement" is a contract wherein a prospective employer binds himself to train written notice stating the causes for termination and must give the employee the opportunity
the apprentice who in turn accepts the terms of training for a recognized apprenticeable to be heard and to defend himself. Thus, to constitute valid dismissal from employment, two
occupation emphasizing the rights, duties and responsibilities of each party; requisites must concur: (1) the dismissal must be for a just or authorized cause; and (2) the
employee must be afforded an opportunity to be heard and to defend himself.26
m) "Apprenticeable Occupation" is an occupation officially endorsed by a tripartite body
and approved for apprenticeship by the Authority [TESDA]; (Emphasis supplied) In this case, the Labor Arbiter held that petitioner terminated Palad for habitual absenteeism
and poor efficiency of performance. Under Section 25, Rule VI, Book II of the Implementing
In this case, the apprenticeship agreement was entered into between the parties before Rules of the Labor Code, habitual absenteeism and poor efficiency of performance are among
petitioner filed its apprenticeship program with the TESDA for approval. Petitioner and Palad the valid causes for which the employer may terminate the apprenticeship agreement after
executed the apprenticeship agreement on 17 July 1997 wherein it was stated that the the probationary period.
training would start on 17 July 1997 and would end approximately in December 1997.17 On 25
July 1997, petitioner submitted for approval its apprenticeship program, which the TESDA However, the NLRC reversed the finding of the Labor Arbiter on the issue of the legality of
subsequently approved on 26 September 1997.18 Clearly, the apprenticeship agreement was Palad’s termination:
enforced even before the TESDA approved petitioner’s apprenticeship program. Thus, the
apprenticeship agreement is void because it lacked prior approval from the TESDA. As to the validity of complainant’s dismissal in her status as an apprentice, suffice to state that
the findings of the Arbiter that complainant was dismissed due to failure to meet the
The TESDA’s approval of the employer’s apprenticeship program is required before the standards is nebulous. What clearly appears is that complainant already passed the
employer is allowed to hire apprentices. Prior approval from the TESDA is necessary to ensure probationary status of the apprenticeship agreement of 200 hours at the time she was
that only employers in the highly technical industries may employ apprentices and only in terminated on 28 November 1997 which was already the fourth month of the apprenticeship
apprenticeable occupations.19 Thus, under RA 7796, employers can only hire apprentices for period of 1000 hours. As such, under the Code, she can only be dismissed for cause, in this
apprenticeable occupations which must be officially endorsed by a tripartite body and case, for poor efficiency of performance on the job or in the classroom for a prolonged period
approved for apprenticeship by the TESDA.1avvphil This is to ensure the protection of despite warnings duly given to the apprentice.
apprentices and to obviate possible abuses by prospective employers who may want to take
advantage of the lower wage rates for apprentices and circumvent the right of the employees We noted that no clear and sufficient evidence exist to warrant her dismissal as an apprentice
to be secure in their employment. during the agreed period. Besides the absence of any written warnings given to complainant
reminding her of "poor performance," respondents’ evidence in this respect consisted of an
The requisite TESDA approval of the apprenticeship program prior to the hiring of apprentices indecipherable or unauthenticated xerox of the performance evaluation allegedly conducted on
was further emphasized by the DOLE with the issuance of Department Order No. 68-04 on 18 complainant. This is of doubtful authenticity and/or credibility, being not only incomplete in the
August 2004. Department Order No. 68-04, which provides the guidelines in the sense that appearing thereon is a signature (not that of complainant) side by side with a date
implementation of the Apprenticeship and Employment Program of the government, indicated as "1/16/98". From the looks of it, this signature is close to and appertains to the
specifically states that no enterprise shall be allowed to hire apprentices unless its typewritten position of "Division/Department Head", which is below the signature of
apprenticeship program is registered and approved by TESDA.20 complainant’s immediate superior who made the evaluation indicated as "11-15-97."

Since Palad is not considered an apprentice because the apprenticeship agreement was The only conclusion We can infer is that this evaluation was made belatedly, specifically, after
enforced before the TESDA’s approval of petitioner’s apprenticeship program, Palad is the filing of the case and during the progress thereof in the Arbitral level, as shown that nothing
deemed a regular employee performing the job of a "fish cleaner." Clearly, the job of a "fish thereon indicate that complainant was notified of the results. Its authenticity therefor, is a big
cleaner" is necessary in petitioner’s business as a tuna and sardines factory. Under Article question mark, and hence lacks any credibility. Evidence, to be admissible in administrative
28021 of the Labor Code, an employment is deemed regular where the employee has been proceedings, must at least have a modicum of authenticity. This, respondents failed to comply
engaged to perform activities which are usually necessary or desirable in the usual business or with. As such, complainant is entitled to the payment of her wages for the remaining two (2)
trade of the employer. months of her apprenticeship agreement.27 (Emphasis supplied)

Illegal Termination of Palad Indeed, it appears that the Labor Arbiter’s conclusion that petitioner validly terminated Palad
was based mainly on the performance evaluation allegedly conducted by petitioner. However,
We shall now resolve whether petitioner illegally dismissed Palad. Palad alleges that she had no knowledge of the performance evaluation conducted and that
Under Article 27922 of the Labor Code, an employer may terminate the services of an she was not even informed of the result of the alleged performance evaluation. Palad also
employee for just causes23 or for authorized causes.24 Furthermore, under Article 277(b)25 of claims she did not receive a notice of dismissal, nor was she given the chance to explain.
the Labor Code, the employer must send the employee who is about to be terminated, a
According to petitioner, Palad did not receive the termination notice because Palad allegedly
stopped reporting for work after being informed of the result of the evaluation.

Under Article 227 of the Labor Code, the employer has the burden of proving that the
termination was for a valid or authorized cause.28 Petitioner failed to substantiate its claim
that Palad was terminated for valid reasons. In fact, the NLRC found that petitioner failed to
prove the authenticity of the performance evaluation which petitioner claims to have
conducted on Palad, where Palad received a performance rating of only 27.75%. Petitioner
merely relies on the performance evaluation to prove Palad’s inefficiency. It was likewise not
shown that petitioner ever apprised Palad of the performance standards set by the company.
When the alleged valid cause for the termination of employment is not clearly proven, as in
this case, the law considers the matter a case of illegal dismissal.29

Furthermore, Palad was not accorded due process. Even if petitioner did conduct a
performance evaluation on Palad, petitioner failed to warn Palad of her alleged poor
performance. In fact, Palad denies any knowledge of the performance evaluation conducted
and of the result thereof. Petitioner likewise admits that Palad did not receive the notice of
termination30 because Palad allegedly stopped reporting for work. The records are bereft of
evidence to show that petitioner ever gave Palad the opportunity to explain and defend
herself. Clearly, the two requisites for a valid dismissal are lacking in this case.

WHEREFORE, we AFFIRM the Decision dated 12 November 2001 and the Resolution dated 5
April 2002 of the Court of Appeals in CA-G.R. SP No. 60379.

SO ORDERED.
Republic of the Philippines Nakagastos ang kompanya ng mga sumusunod:
SUPREME COURT
Manila Emergency and doctor fee P715.00
Medecines (sic) and others 317.04
FIRST DIVISION
Bibigyan siya ng kompanya ng Siyam na araw na libreng sahod hanggang matanggal ang tahi
ng kanyang kamay.

G.R. No. 114337 September 29, 1995 Tatanggapin niya ang sahod niyang anim na araw, mula ika-30 ng Hulyo at ika-4 ng Agosto,
1990.
NITTO ENTERPRISES, petitioner,
vs. Ang kompanya ang magbabayad ng lahat ng gastos pagtanggal ng tahi ng kanyang kamay,
NATIONAL LABOR RELATIONS COMMISSION and ROBERTO CAPILI, respondents. pagkatapos ng siyam na araw mula ika-2 ng Agosto.

Sa lahat ng nakasulat sa itaas, hinihingi ng kompanya ang kanyang resignasyon, kasama ng

This petition for certiorari under Rule 65 of the Rules of Court seeking to annul the
decision1 rendered by public respondent National Labor Relations Commission, which Naiintindihan ko ang lahat ng nakasulat sa itaas, at ang lahat ng ito ay aking pagkakasala sa
reversed the decision of the Labor Arbiter. hindi pagsunod sa alintuntunin ng kompanya.

Briefly, the facts of the case are as follows: (Sgd.) Roberto Capili
Roberto Capili
Petitioner Nitto Enterprises, a company engaged in the sale of glass and aluminum products,
hired Roberto Capili sometime in May 1990 as an apprentice machinist, molder and core On August 3, 1990 private respondent executed a Quitclaim and Release in favor of petitioner
maker as evidenced by an apprenticeship agreement2 for a period of six (6) months from May for and in consideration of the sum of P1,912.79.4
28, 1990 to November 28, 1990 with a daily wage rate of P66.75 which was 75% of the
applicable minimum wage. Three days after, or on August 6, 1990, private respondent formally filed before the NLRC
Arbitration Branch, National Capital Region a complaint for illegal dismissal and payment of
At around 1:00 p.m. of August 2, 1990, Roberto Capili who was handling a piece of glass which other monetary benefits.
he was working on, accidentally hit and injured the leg of an office secretary who was treated
at a nearby hospital. On October 9, 1991, the Labor Arbiter rendered his decision finding the termination of private
respondent as valid and dismissing the money claim for lack of merit. The dispositive portion
Later that same day, after office hours, private respondent entered a workshop within the of the ruling reads:
office premises which was not his work station. There, he operated one of the power press
machines without authority and in the process injured his left thumb. Petitioner spent the WHEREFORE, premises considered, the termination is valid and for cause, and the money
amount of P1,023.04 to cover the medication of private respondent. claims dismissed for lack of merit.

The following day, Roberto Capili was asked to resign in a letter3 which reads: The respondent however is ordered to pay the complainant the amount of P500.00 as
financial assistance.
August 2, 1990
SO ORDERED.5
Wala siyang tanggap ng utos mula sa superbisor at wala siyang experiensa kung papaano
gamitin and "TOOL" sa pagbuhat ng salamin, sarili niyang desisyon ang paggamit ng tool at Labor Arbiter Patricio P. Libo-on gave two reasons for ruling that the dismissal of Roberto
may disgrasya at nadamay pa ang isang sekretarya ng kompanya. Capilian was valid. First, private respondent who was hired as an apprentice violated the terms
of their agreement when he acted with gross negligence resulting in the injury not only to
Sa araw ding ito limang (5) minute ang nakakalipas mula alas-singko ng hapon siya ay pumasok himself but also to his fellow worker. Second, private respondent had shown that "he does not
sa shop na hindi naman sakop ng kanyang trabaho. Pinakialaman at kinalikot ang makina at have the proper attitude in employment particularly the handling of machines without
nadisgrasya niya ang kanyang sariling kamay. authority and proper training.6
On July 26, 1993, the National Labor Relations Commission issued an order reversing the WHETHER OR NOT PUBLIC RESPONDENT NLRC COMMITTED GRAVE ABUSE OF DISCRETION IN
decision of the Labor Arbiter, the dispositive portion of which reads: HOLDING THAT PRIVATE RESPONDENT WAS NOT AN APPRENTICE.

WHEREFORE, the appealed decision is hereby set aside. The respondent is hereby directed to II
reinstate complainant to his work last performed with backwages computed from the time his
wages were withheld up to the time he is actually reinstated. The Arbiter of origin is hereby WHETHER OR NOT PUBLIC RESPONDENT NLRC COMMITTED GRAVE ABUSE OF DISCRETION IN
directed to further hear complainant's money claims and to dispose them on the basis of law HOLDING THAT PETITIONER HAD NOT ADEQUATELY PROVEN THE EXISTENCE OF A VALID
and evidence obtaining. CAUSE IN TERMINATING THE SERVICE OF PRIVATE RESPONDENT.

SO ORDERED.7 We find no merit in the petition.

The NLRC declared that private respondent was a regular employee of petitioner by ruling Petitioner assails the NLRC's finding that private respondent Roberto Capili cannot plainly be
thus: considered an apprentice since no apprenticeship program had yet been filed and approved at
the time the agreement was executed.
As correctly pointed out by the complainant, we cannot understand how an apprenticeship
agreement filed with the Department of Labor only on June 7, 1990 could be validly used by Petitioner further insists that the mere signing of the apprenticeship agreement already
the Labor Arbiter as basis to conclude that the complainant was hired by respondent as a plain established an employer-apprentice relationship.
"apprentice" on May 28, 1990. Clearly, therefore, the complainant was respondent's regular Petitioner's argument is erroneous.
employee under Article 280 of the Labor Code, as early as May 28,1990, who thus enjoyed the
security of tenure guaranteed in Section 3, Article XIII of our 1987 Constitution. The law is clear on this matter. Article 61 of the Labor Code provides:

The complainant being for illegal dismissal (among others) it then behooves upon respondent, Contents of apprenticeship agreement. — Apprenticeship agreements, including the main
pursuant to Art. 227(b) and as ruled in Edwin Gesulgon vs. NLRC, et al. (G.R. No. 90349, March rates of apprentices, shall conform to the rules issued by the Minister of Labor and
5, 1993, 3rd Div., Feliciano, J.) to prove that the dismissal of complainant was for a valid cause. Employment. The period of apprenticeship shall not exceed six months. Apprenticeship
Absent such proof, we cannot but rule that the complainant was illegally dismissed.8 agreements providing for wage rates below the legal minimum wage, which in no case shall
start below 75% per cent of the applicable minimum wage, may be entered into only in
On January 28, 1994, Labor Arbiter Libo-on called for a conference at which only private accordance with apprenticeship program duly approved by the Minister of Labor and
respondent's representative was present. Employment. The Ministry shall develop standard model programs of apprenticeship.
On April 22, 1994, a Writ of Execution was issued, which reads: (emphasis supplied)

NOW, THEREFORE, finding merit in [private respondent's] Motion for Issuance of the Writ, you In the case at bench, the apprenticeship agreement between petitioner and private
are hereby commanded to proceed to the premises of [petitioner] Nitto Enterprises and Jovy respondent was executed on May 28, 1990 allegedly employing the latter as an apprentice in
Foster located at No. l 74 Araneta Avenue, Portero, Malabon, Metro Manila or at any other the trade of "care maker/molder." On the same date, an apprenticeship program was
places where their properties are located and effect the reinstatement of herein [private prepared by petitioner and submitted to the Department of Labor and Employment. However,
respondent] to his work last performed or at the option of the respondent by payroll the apprenticeship Agreement was filed only on June 7, 1990. Notwithstanding the absence of
reinstatement. approval by the Department of Labor and Employment, the apprenticeship agreement was
enforced the day it was signed.
You are also to collect the amount of P122,690.85 representing his backwages as called for in
the dispositive portion, and turn over such amount to this Office for proper disposition. Based on the evidence before us, petitioner did not comply with the requirements of the law.
It is mandated that apprenticeship agreements entered into by the employer and apprentice
Petitioner filed a motion for reconsideration but the same was denied. shall be entered only in accordance with the apprenticeship program duly approved by the
Minister of Labor and Employment.
Hence, the instant petition — for certiorari.
Prior approval by the Department of Labor and Employment of the proposed apprenticeship
The issues raised before us are the following: program is, therefore, a condition sine quo non before an apprenticeship agreement can be
I validly entered into.
The act of filing the proposed apprenticeship program with the Department of Labor and Ample opportunity connotes every kind of assistance that management must accord the
Employment is a preliminary step towards its final approval and does not instantaneously give employee to enable him to prepare adequately for his defense including legal
rise to an employer-apprentice relationship. representation. 11

Article 57 of the Labor Code provides that the State aims to "establish a national As held in the case of Pepsi-Cola Bottling Co., Inc. v. NLRC: 12
apprenticeship program through the participation of employers, workers and government and
non-government agencies" and "to establish apprenticeship standards for the protection of The law requires that the employer must furnish the worker sought to be dismissed with two
apprentices." To translate such objectives into existence, prior approval of the DOLE to any (2) written notices before termination of employee can be legally effected: (1) notice which
apprenticeship program has to be secured as a condition sine qua non before any such apprises the employee of the particular acts or omissions for which his dismissal is sought; and
apprenticeship agreement can be fully enforced. The role of the DOLE in apprenticeship (2) the subsequent notice which informs the employee of the employer's decision to dismiss
programs and agreements cannot be debased. him (Sec. 13, BP 130; Sec. 2-6 Rule XIV, Book V, Rules and Regulations Implementing the Labor
Code as amended). Failure to comply with the requirements taints the dismissal with illegality.
Hence, since the apprenticeship agreement between petitioner and private respondent has no This procedure is mandatory, in the absence of which, any judgment reached by management
force and effect in the absence of a valid apprenticeship program duly approved by the DOLE, is void and in existent (Tingson, Jr. vs. NLRC, 185 SCRA 498 [1990]; National Service Corp. vs.
private respondent's assertion that he was hired not as an apprentice but as a delivery boy NLRC, 168 SCRA 122; Ruffy vs. NLRC. 182 SCRA 365 [1990]).
("kargador" or "pahinante") deserves credence. He should rightly be considered as a regular
employee of petitioner as defined by Article 280 of the Labor Code: The fact is private respondent filed a case of illegal dismissal with the Labor Arbiter only three
days after he was made to sign a Quitclaim, a clear indication that such resignation was not
Art. 280. Regular and Casual Employment. — The provisions of written agreement to the voluntary and deliberate.
contrary notwithstanding and regardless of the oral agreement of the parties, an employment
shall be deemed to be regular where the employee has been engaged to perform activities Private respondent averred that he was actually employed by petitioner as a delivery boy
which are usually necessary or desirable in the usual business or trade of the employer, except ("kargador" or "pahinante").
where the employment has been fixed for a specific project or undertaking the completion or He further asserted that petitioner "strong-armed" him into signing the aforementioned
termination of which has been determined at the time of the engagement of the employee or resignation letter and quitclaim without explaining to him the contents thereof. Petitioner
where the work or services to be performed is seasonal in nature and the employment is for made it clear to him that anyway, he did not have a choice. 13
the duration of the season.
Petitioner cannot disguise the summary dismissal of private respondent by orchestrating the
An employment shall be deemed to be casual if it is not covered by the preceding latter's alleged resignation and subsequent execution of a Quitclaim and Release. A judicious
paragraph: Provided, That, any employee who has rendered at least one year of service, examination of both events belies any spontaneity on private respondent's part.
whether such service is continuous or broken, shall be considered a regular employee with
respect to the activity in which he is employed and his employment shall continue while such WHEREFORE, finding no abuse of discretion committed by public respondent National Labor
activity exists. (Emphasis supplied) Relations Commission, the appealed decision is hereby AFFIRMED.

and pursuant to the constitutional mandate to "protect the rights of workers and promote SO ORDERED.
their welfare."9

Petitioner further argues that, there is a valid cause for the dismissal of private respondent.

There is an abundance of cases wherein the Court ruled that the twin requirements of due
process, substantive and procedural, must be complied with, before valid dismissal
exists. 10 Without which, the dismissal becomes void.

The twin requirements of notice and hearing constitute the essential elements of due process.
This simply means that the employer shall afford the worker ample opportunity to be heard
and to defend himself with the assistance of his representative, if he so desires.
MARITES BERNARDO, ELVIRA GO DIAMANTE, REBECCA E. DAVID, DAVID P. PASCUAL, RAQUEL FAR EAST BANK AND TRUST COMPANY, a universal banking corporation duly organized and
ESTILLER, ALBERT HALLARE, EDMUND M. CORTEZ, JOSELITO O. AGDON GEORGE P. LIGUTAN JR., existing under and by virtue of the laws of the Philippines, with business address at FEBTC
CELSO M. YAZAR, ALEX G. CORPUZ, RONALD M. DELFIN, ROWENA M. TABAQUERO, CORAZON C. Building, Muralla, Intramuros, Manila, represented herein by its Assistant Vice President, MR.
DELOS REYES, ROBERT G. NOORA, MILAGROS O. LEQUIGAN, ADRIANA F. TATLONGHARI, IKE FLORENDO G. MARANAN, (hereinafter referred to as the BANK);
CABANDUCOS, COCOY NOBELLO, DORENDA CANTIMBUHAN, ROBERT MARCELO, LILIBETH Q.
MARMOLEJO, JOSE E. SALES, ISABEL MAMAUAG, VIOLETA G. MONTES, ALBINO TECSON, - and -
MELODY V. GRUELA, BERNADETH D. AGERO, CYNTHIA DE VERA, LANI R. CORTEZ, MA. ISABEL B. ________________, ________________ years old, of legal age, _____________, and residing
CONCEPCION, DINDO VALERIO, ZENAIDA MATA, ARIEL DEL PILAR, MARGARET CECILIA CANOZA, at __________________ (hereinafter referred to as the (EMPLOYEE).
THELMA SEBASTIAN, MA. JEANETTE CERVANTES, JEANNIE RAMIL, ROZAIDA PASCUAL, PINKY
BALOLOA, ELIZABETH VENTURA, GRACE S. PARDO & RICO TIMOSA, Petitioners v. NATIONAL WITNESSETH: That
LABOR RELATIONS COMMISSION & FAR EAST BANK AND TRUST COMPANY, Respondents.
WHEREAS, the BANK, cognizant of its social responsibility, realizes that there is a need to
DECISION provide disabled and handicapped persons gainful employment and opportunities to realize
their potentials, uplift their socio-economic well being and welfare and make them productive,
PANGANIBAN, J.: self-reliant and useful citizens to enable them to fully integrate in the mainstream of society;
The Magna Carta for Disabled Persons mandates that qualified disabled persons be granted WHEREAS, there are certain positions in the BANK which may be filled-up by disabled and
the same terms and conditions of employment as qualified able-bodied employees. Once they handicapped persons, particularly deaf-mutes, and the BANK ha[s] been approached by some
have attained the status of regular workers, they should be accorded all the benefits granted civic-minded citizens and authorized government agencies [regarding] the possibility of hiring
by law, notwithstanding written or verbal contracts to the contrary. This treatment is rooted handicapped workers for these positions;
not merely on charity or accommodation, but on justice for all.
WHEREAS, the EMPLOYEE is one of those handicapped workers who [were] recommended for
The Case
possible employment with the BANK;
Challenged in the Petition for Certiorari1 before us is the June 20, 1995 Decision2 of the NOW, THEREFORE, for and in consideration of the foregoing premises and in compliance with
National Labor Relations Commission (NLRC),3 which affirmed the August, 22 1994 ruling of Article 80 of the Labor Code of the Philippines as amended, the BANK and the EMPLOYEE have
Labor Arbiter Cornelio L. Linsangan. The labor arbiters Decision disposed as entered into this Employment Contract as follows:
follows:4cräläwvirtualibräry
1. The BANK agrees to employ and train the EMPLOYEE, and the EMPLOYEE agrees to
WHEREFORE, judgment is hereby rendered dismissing the above-mentioned complaint for diligently and faithfully work with the BANK, as Money Sorter and Counter.
lack of merit.
2. The EMPLOYEE shall perform among others, the following duties and responsibilities:
Also assailed is the August 4, 1995 Resolution5 of the NLRC, which denied the Motion for
Reconsideration. i Sort out bills according to color;
The Facts ii. Count each denomination per hundred, either manually or with the aid of a counting
machine;
The facts were summarized by the NLRC in this wise:6
iii. Wrap and label bills per hundred;
Complainants numbering 43 (p. 176, Records) are deaf-mutes who were hired on various
periods from 1988 to 1993 by respondent Far East Bank and Trust Co. as Money Sorters and iv. Put the wrapped bills into bundles; and
Counters through a uniformly worded agreement called Employment Contract for
Handicapped Workers. (pp. 68 & 69, Records) The full text of said agreement is quoted below: v. Submit bundled bills to the bank teller for verification.

EMPLOYMENT CONTRACT FOR HANDICAPPED WORKERS 3. The EMPLOYEE shall undergo a training period of one (1) month, after which the BANK shall
determine whether or not he/she should be allowed to finish the remaining term of this
This Contract, entered into by and between: Contract.
4. The EMPLOYEE shall be entitled to an initial compensation of P118.00 per day, subject to Disclaiming that complainants were regular employees, respondent Far East Bank and Trust
adjustment in the sole judgment of the BANK, payable every 15th and end of the month. Company maintained that complainants who are a special class of workers the hearing
impaired employees were hired temporarily under [a] special employment arrangement which
5. The regular work schedule of the EMPLOYEE shall be five (5) days per week, from Mondays was a result of overtures made by some civic and political personalities to the respondent
thru Fridays, at eight (8) hours a day. The EMPLOYEE may be required to perform overtime Bank; that complainant[s] were hired due to pakiusap which must be considered in the light of
work as circumstance may warrant, for which overtime work he/she [shall] be paid an the context of the respondent Banks corporate philosophy as well as its career and working
additional compensation of 125% of his daily rate if performed during ordinary days and 130% environment which is to maintain and strengthen a corps of professionals trained and
if performed during Saturday or [a] rest day. qualified officers and regular employees who are baccalaureate degree holders from excellent
6. The EMPLOYEE shall likewise be entitled to the following benefits: schools which is an unbending policy in the hiring of regular employees; that in addition to
this, training continues so that the regular employee grows in the corporate ladder; that the
i. Proportionate 13th month pay based on his basic daily wage. idea of hiring handicapped workers was acceptable to them only on a special arrangement
basis; that it adopted the special program to help tide over a group of handicapped workers
ii. Five (5) days incentive leave. such as deaf-mutes like the complainants who could do manual work for the respondent Bank;
iii. SSS premium payment. that the task of counting and sorting of bills which was being performed by tellers could be
assigned to deaf-mutes; that the counting and sorting of money are tellering works which
7. The EMPLOYEE binds himself/herself to abide [by] and comply with all the BANK Rules and were always logically and naturally part and parcel of the tellers normal functions; that from
Regulations and Policies, and to conduct himself/herself in a manner expected of all the beginning there have been no separate items in the respondent Bank plantilla for sorters
employees of the BANK. or counters; that the tellers themselves already did the sorting and counting chore as a regular
feature and integral part of their duties (p. 97, Records); that through the pakiusap of Arturo
8. The EMPLOYEE acknowledges the fact that he/she had been employed under a special Borjal, the tellers were relieved of this task of counting and sorting bills in favor of deaf-mutes
employment program of the BANK, for which reason the standard hiring requirements of the without creating new positions as there is no position either in the respondent or in any other
BANK were not applied in his/her case. Consequently, the EMPLOYEE acknowledges and bank in the Philippines which deals with purely counting and sorting of bills in banking
accepts the fact that the terms and conditions of the employment generally observed by the operations.
BANK with respect to the BANKs regular employee are not applicable to the EMPLOYEE, and
that therefore, the terms and conditions of the EMPLOYEEs employment with the BANK shall Petitioners specified when each of them was hired and dismissed, viz:7cräläwvirtualibräry
be governed solely and exclusively by this Contract and by the applicable rules and regulations
that the Department of Labor and Employment may issue in connection with the employment NAME OF PETITIONER WORKPLACE Date Hired Date Dismissed
of disabled and handicapped workers. More specifically, the EMPLOYEE hereby acknowledges 1. MARITES BERNARDO Intramuros 12 NOV 90 17 NOV 93
that the provisions of Book Six of the Labor Code of the Philippines as amended, particularly
on regulation of employment and separation pay are not applicable to him/her. 2. ELVIRA GO DIAMANTE Intramuros 24 JAN 90 11 JAN 94

9. The Employment Contract shall be for a period of six (6) months or from ____ to ____ 3. REBECCA E. DAVID Intramuros 16 APR 90 23 OCT 93
unless earlier terminated by the BANK for any just or reasonable cause. Any continuation or
extension of this Contract shall be in writing and therefore this Contract will automatically 4. DAVID P. PASCUAL Bel-Air 15 OCT 88 21 NOV 94
expire at the end of its terms unless renewed in writing by the BANK. 5. RAQUEL ESTILLER Intramuros 2 JUL 92 4 JAN 94
IN WITNESS WHEREOF, the parties, have hereunto affixed their signature[s] this ____ day of 6. ALBERT HALLARE West 4 JAN 91 9 JAN 94
_________________, ____________ at Intramuros, Manila, Philippines.
7. EDMUND M. CORTEZ Bel-Air 15 JAN 91 3 DEC 93
In 1988, two (2) deaf-mutes were hired under this Agreement; in 1989 another two (2); in
1990, nineteen (19); in 1991 six (6); in 1992, six (6) and in 1993, twenty-one (21). Their 8. JOSELITO O. AGDON Intramuros 5 NOV 90 17 NOV 93
employment[s] were renewed every six months such that by the time this case arose, there
were fifty-six (56) deaf-mutes who were employed by respondent under the said employment 9. GEORGE P. LIGUTAN, JR. Intramuros 6 SEPT 89 19 JAN 94
agreement. The last one was Thelma Malindoy who was employed in 1992 and whose 10. CELSO M. YAZAR Intramuros 8 FEB 93 8 AUG 93
contract expired on July 1993.
11. ALEX G. CORPUZ Intramuros 15 FEB 93 15 AUG 93
xxx
12. RONALD M. DELFIN Intramuros 22 FEB 93 22 AUG 93 39. ROZAIDA PASCUAL Bel-Air 20 APR 89 29 OCT 93

13. ROWENA M. TABAQUERO Intramuros 22 FEB 93 22 AUG 93 40. PINKY BALOLOA West 3 JUN 91 2 DEC 93

14. CORAZON C. DELOS REYES Intramuros 8 FEB 93 8 AUG 93 41. ELIZABETH VENTURA West 12 MAR 90 FEB 94 [SIC]

15. ROBERT G. NOORA Intramuros 15 FEB 93 15 AUG 93 42. GRACE S. PARDO West 4 APR 90 13 MAR 94

16. MILAGROS O. LEQUIGAN Intramuros 1 FEB 93 1 AUG 93 43. RICO TIMOSA Intramuros 28 APR 93 28 OCT 93

17. ADRIANA F. TATLONGHARI Intramuros 22 JAN 93 22 JUL 93 As earlier noted, the labor arbiter and, on appeal, the NLRC ruled against herein petitioners.
Hence, this recourse to this Court.9
18. IKE CABANDUCOS Intramuros 24 FEB 93 24 AUG 93
The Ruling of the NLRC
19. COCOY NOBELLO Intramuros 22 FEB 93 22 AUG 93
In affirming the ruling of the labor arbiter that herein petitioners could not be deemed regular
20. DORENDA CATIMBUHAN Intramuros 15 FEB 93 15 AUG 93 employees under Article 280 of the Labor Code, as amended, Respondent Commission
21. ROBERT MARCELO West 31 JUL 938 1 AUG 93 ratiocinated as follows:

22. LILIBETH Q. MARMOLEJO West 15 JUN 90 21 NOV 93 We agree that Art. 280 is not controlling herein. We give due credence to the conclusion that
complainants were hired as an accommodation to [the] recommendation of civic oriented
23. JOSE E. SALES West 6 AUG 92 12 OCT 93 personalities whose employment[s] were covered by xxx Employment Contract[s] with special
provisions on duration of contract as specified under Art. 80. Hence, as correctly held by the
24. ISABEL MAMAUAG West 8 MAY 92 10 NOV 93 Labor Arbiter a quo, the terms of the contract shall be the law between the parties.10
25. VIOLETA G. MONTES Intramuros 2 FEB 90 15 JAN 94 The NLRC also declared that the Magna Carta for Disabled Persons was not applicable,
26. ALBINO TECSON Intramuros 7 NOV 91 10 NOV 93 considering the prevailing circumstances/milieu of the case.
Issues
27. MELODY V. GRUELA West 28 OCT 91 3 NOV 93

28. BERNADETH D. AGERO West 19 DEC 90 27 DEC 93 In their Memorandum, petitioners cite the following grounds in support of their cause:

29. CYNTHIA DE VERA Bel-Air 26 JUN 90 3 DEC 93 I. The Honorable Commission committed grave abuse of discretion in holding that the
petitioners - money sorters and counters working in a bank - were not regular employees.
30. LANI R. CORTEZ Bel-Air 15 OCT 88 10 DEC 93
II. The Honorable Commission committed grave abuse of discretion in holding that the
31. MA. ISABEL B. CONCEPCION West 6 SEPT 90 6 FEB 94 employment contracts signed and renewed by the petitioners - which provide for a period of
six (6) months - were valid.
32. DINDO VALERIO Intramuros 30 MAY 93 30 NOV 93
III. The Honorable Commission committed grave abuse of discretion in not applying the
33. ZENAIDA MATA Intramuros 10 FEB 93 10 AUG 93 provisions of the Magna Carta for the Disabled (Republic Act No. 7277), on proscription
against discrimination against disabled persons.11
34. ARIEL DEL PILAR Intramuros 24 FEB 93 24 AUG 93
In the main, the Court will resolve whether petitioners have become regular employees.
35. MARGARET CECILIA CANOZA Intramuros 27 JUL 90 4 FEB 94
This Courts Ruling
36. THELMA SEBASTIAN Intramuros 12 NOV 90 17 NOV 93
The petition is meritorious. However, only the employees, who worked for more than six
37. MA. JEANETTE CERVANTES West 6 JUN 92 7 DEC 93
months and whose contracts were renewed are deemed regular. Hence, their dismissal from
38. JEANNIE RAMIL Intramuros 23 APR 90 12 OCT 93 employment was illegal.
Preliminary Matter: Propriety of Certiorari According to private respondent, the employment contracts were prepared in accordance
with Article 80 of the Labor Code, which provides:
Respondent Far East Bank and Trust Company argues that a review of the findings of facts of
the NLRC is not allowed in a petition for certiorari. Specifically, it maintains that the Court ART. 80. Employment agreement. Any employer who employs handicapped workers shall
cannot pass upon the findings of public respondents that petitioners were not regular enter into an employment agreement with them, which agreement shall include:
employees.
(a) The names and addresses of the handicapped workers to be employed;
True, the Court, as a rule, does not review the factual findings of public respondents in
a certiorari proceeding. In resolving whether the petitioners have become regular employees, (b) The rate to be paid the handicapped workers which shall be not less than seventy five
we shall not change the facts found by the public respondent. Our task is merely to determine (75%) per cent of the applicable legal minimum wage;
whether the NLRC committed grave abuse of discretion in applying the law to the established (c) The duration of employment period; and
facts, as above-quoted from the assailed Decision.
(d) The work to be performed by handicapped workers.
Main Issue: Are Petitioners Regular Employees?

The employment agreement shall be subject to inspection by the Secretary of Labor or his
Petitioners maintain that they should be considered regular employees, because their task as duly authorized representatives.
money sorters and counters was necessary and desirable to the business of respondent bank.
They further allege that their contracts served merely to preclude the application of Article The stipulations in the employment contracts indubitably conform with the aforecited
280 and to bar them from becoming regular employees. provision. Succeeding events and the enactment of RA No. 7277 (the Magna Carta for
Disabled Persons),13 however, justify the application of Article 280 of the Labor Code.
Private respondent, on the other hand, submits that petitioners were hired only as special
workers and should not in any way be considered as part of the regular complement of the Respondent bank entered into the aforesaid contract with a total of 56 handicapped workers
Bank.12 Rather, they were special workers under Article 80 of the Labor Code. Private and renewed the contracts of 37 of them. In fact, two of them worked from 1988 to 1993.
respondent contends that it never solicited the services of petitioners, whose employment Verily, the renewal of the contracts of the handicapped workers and the hiring of others lead
was merely an accommodation in response to the requests of government officials and civic- to the conclusion that their tasks were beneficial and necessary to the bank. More important,
minded citizens. They were told from the start, with the assistance of government these facts show that they were qualified to perform the responsibilities of their positions. In
representatives, that they could not become regular employees because there were no other words, their disability did not render them unqualified or unfit for the tasks assigned to
plantilla positions for money sorters, whose task used to be performed by tellers. Their them.
contracts were renewed several times, not because of need but merely for humanitarian
reasons. Respondent submits that as of the present, the special position that was created for In this light, the Magna Carta for Disabled Persons mandates that a qualified disabled
the petitioners no longer exist[s] in private respondent [bank], after the latter had decided not employee should be given the same terms and conditions of employment as a qualified able-
to renew anymore their special employment contracts. bodied person. Section 5 of the Magna Carta provides:

At the outset, let it be known that this Court appreciates the nobility of private respondents Section 5. Equal Opportunity for Employment.No disabled person shall be denied access to
effort to provide employment to physically impaired individuals and to make them more opportunities for suitable employment. A qualified disabled employee shall be subject to the
productive members of society. However, we cannot allow it to elude the legal consequences same terms and conditions of employment and the same compensation, privileges, benefits,
of that effort, simply because it now deems their employment irrelevant. The facts, viewed in fringe benefits, incentives or allowances as a qualified able bodied person.
light of the Labor Code and the Magna Carta for Disabled Persons, indubitably show that the The fact that the employees were qualified disabled persons necessarily removes the
petitioners, except sixteen of them, should be deemed regular employees. As such, they have employment contracts from the ambit of Article 80. Since the Magna Carta accords them the
acquired legal rights that this Court is duty-bound to protect and uphold, not as a matter of rights of qualified able-bodied persons, they are thus covered by Article 280 of the Labor
compassion but as a consequence of law and justice. Code, which provides:
The uniform employment contracts of the petitioners stipulated that they shall be trained for ART. 280. Regular and Casual Employment. -- The provisions of written agreement to the
a period of one month, after which the employer shall determine whether or not they should contrary notwithstanding and regardless of the oral agreement of the parties, an employment
be allowed to finish the 6-month term of the contract. Furthermore, the employer may shall be deemed to be regular where the employee has been engaged to perform activities
terminate the contract at any time for a just and reasonable cause. Unless renewed in writing which are usually necessary or desirable in the usual business or trade of the employer, except
by the employer, the contract shall automatically expire at the end of the term. where the employment has been fixed for a specific project or undertaking the completion or
termination of which has been determined at the time of the engagement of the employee or belonged,19 petitioners are hereby awarded separation pay in lieu of
where the work or services to be performed is seasonal in nature and the employment is for reinstatement.20cräläwvirtualibräry
the duration of the season.
Because the other sixteen worked only for six months, they are not deemed regular
An employment shall be deemed to be casual if it is not covered by the preceding paragraph: employees and hence not entitled to the same benefits.
Provided, That, any employee who has rendered at least one year of service, whether such
Applicability of the Brent Ruling
service is continuous or broken, shall be considered as regular employee with respect to the
activity in which he is employed and his employment shall continue while such activity exists. Respondent bank, citing Brent School v. Zamora21 in which the Court upheld the validity of an
The test of whether an employee is regular was laid down in De Leon v. NLRC,14 in which this employment contract with a fixed term, argues that the parties entered into the contract on
Court held: equal footing. It adds that the petitioners had in fact an advantage, because they were backed
by then DSWD Secretary Mita Pardo de Tavera and Representative Arturo Borjal.
The primary standard, therefore, of determining regular employment is the reasonable
connection between the particular activity performed by the employee in relation to the usual We are not persuaded. The term limit in the contract was premised on the fact that the
trade or business of the employer. The test is whether the former is usually necessary or petitioners were disabled, and that the bank had to determine their fitness for the position.
desirable in the usual business or trade of the employer. The connection can be determined Indeed, its validity is based on Article 80 of the Labor Code. But as noted earlier, petitioners
by considering the nature of the work performed and its relation to the scheme of the proved themselves to be qualified disabled persons who, under the Magna Carta for Disabled
particular business or trade in its entirety. Also if the employee has been performing the job Persons, are entitled to terms and conditions of employment enjoyed by qualified able-bodied
for at least one year, even if the performance is not continuous and merely intermittent, the individuals; hence, Article 80 does not apply because petitioners are qualified for their
law deems repeated and continuing need for its performance as sufficient evidence of the positions. The validation of the limit imposed on their contracts, imposed by reason of their
necessity if not indispensability of that activity to the business. Hence, the employment is disability, was a glaring instance of the very mischief sought to be addressed by the new law.
considered regular, but only with respect to such activity, and while such activity exists. Moreover, it must be emphasized that a contract of employment is impressed with public
Without a doubt, the task of counting and sorting bills is necessary and desirable to the interest.22 Provisions of applicable statutes are deemed written into the contract, and the
business of respondent bank. With the exception of sixteen of them, petitioners performed parties are not at liberty to insulate themselves and their relationships from the impact of
these tasks for more than six months. Thus, the following twenty-seven petitioners should be labor laws and regulations by simply contracting with each other.23 Clearly, the agreement of
deemed regular employees: Marites Bernardo, Elvira Go Diamante, Rebecca E. David, David P. the parties regarding the period of employment cannot prevail over the provisions of the
Pascual, Raquel Estiller, Albert Hallare, Edmund M. Cortez, Joselito O. Agdon, George P. Magna Carta for Disabled Persons, which mandate that petitioners must be treated as
Ligutan Jr., Lilibeth Q. Marmolejo, Jose E. Sales, Isabel Mamauag, Violeta G. Montes, Albino qualified able-bodied employees.
Tecson, Melody V. Gruela, Bernadeth D. Agero, Cynthia de Vera, Lani R. Cortez, Ma. Isabel B. Respondents reason for terminating the employment of petitioners is instructive. Because the
Concepcion, Margaret Cecilia Canoza, Thelma Sebastian, Ma. Jeanette Cervantes, Jeannie Bangko Sentral ng Pilipinas (BSP) required that cash in the bank be turned over to the BSP
Ramil, Rozaida Pascual, Pinky Baloloa, Elizabeth Ventura and Grace S. Pardo. during business hours from 8:00 a.m. to 5:00 p.m., respondent resorted to nighttime sorting
As held by the Court, Articles 280 and 281 of the Labor Code put an end to the pernicious and counting of money. Thus, it reasons that this task could not be done by deaf mutes
practice of making permanent casuals of our lowly employees by the simple expedient of because of their physical limitations as it is very risky for them to travel at night.24 We find no
extending to them probationary appointments, ad infinitum.15 The contract signed by basis for this argument. Travelling at night involves risks to handicapped and able-bodied
petitioners is akin to a probationary employment, during which the bank determined the persons alike. This excuse cannot justify the termination of their employment.
employees fitness for the job. When the bank renewed the contract after the lapse of the six- Other Grounds Cited by Respondent
month probationary period, the employees thereby became regular employees.16 No
employer is allowed to determine indefinitely the fitness of its employees. Respondent argues that petitioners were merely accommodated employees. This fact does
not change the nature of their employment. As earlier noted, an employee is regular because
As regular employees, the twenty-seven petitioners are entitled to security of tenure; that is, of the nature of work and the length of service, not because of the mode or even the reason
their services may be terminated only for a just or authorized cause. Because respondent for hiring them.
failed to show such cause,17 these twenty-seven petitioners are deemed illegally dismissed
and therefore entitled to back wages and reinstatement without loss of seniority rights and Equally unavailing are private respondents arguments that it did not go out of its way to
other privileges.18 Considering the allegation of respondent that the job of money sorting is no recruit petitioners, and that its plantilla did not contain their positions. In L. T. Datu v.
longer available because it has been assigned back to the tellers to whom it originally NLRC,25 the Court held that the determination of whether employment is casual or regular
does not depend on the will or word of the employer, and the procedure of hiring x x x but on separation pay to each of the following twenty-seven (27) petitioners, namely, Marites
the nature of the activities performed by the employee, and to some extent, the length of Bernardo, Elvira Go Diamante, Rebecca E. David, David P. Pascual, Raquel Estiller, Albert
performance and its continued existence. Hallare, Edmund M. Cortez, Joselito O. Agdon, George P. Ligutan Jr., Lilibeth Q. Marmolejo,
Jose E. Sales, Isabel Mamauag, Violeta G. Montes, Albino Tecson, Melody V. Gruela, Bernadeth
Private respondent argues that the petitioners were informed from the start that they could D. Agero, Cynthia de Vera, Lani R. Cortez, Ma. Isabel B. Concepcion, Margaret Cecilia Canoza,
not become regular employees. In fact, the bank adds, they agreed with the stipulation in the Thelma Sebastian, Ma. Jeanette Cervantes, Jeannie Ramil, Rozaida Pascual, Pinky Baloloa,
contract regarding this point. Still, we are not persuaded. The well-settled rule is that the Elizabeth Ventura and Grace S. Pardo. The NLRC is hereby directed to compute the exact
character of employment is determined not by stipulations in the contract, but by the nature amount due each of said employees, pursuant to existing laws and regulations, within fifteen
of the work performed.26 Otherwise, no employee can become regular by the simple days from the finality of this Decision. No costs.
expedient of incorporating this condition in the contract of employment.
SO ORDERED.
In this light, we iterate our ruling in Romares v. NLRC:27cräläwvirtualibräry

Article 280 was emplaced in our statute books to prevent the circumvention of the employees
right to be secure in his tenure by indiscriminately and completely ruling out all written and
oral agreements inconsistent with the concept of regular employment defined therein. Where
an employee has been engaged to perform activities which are usually necessary or desirable
in the usual business of the employer, such employee is deemed a regular employee and is
entitled to security of tenure notwithstanding the contrary provisions of his contract of
employment.

xxx

At this juncture, the leading case of Brent School, Inc. v. Zamora proves instructive. As
reaffirmed in subsequent cases, this Court has upheld the legality of fixed-term employment.
It ruled that the decisive determinant in term employment should not be the activities that
the employee is called upon to perform but the day certain agreed upon the parties for the
commencement and termination of their employment relationship. But this Court went on to
say that where from the circumstances it is apparent that the periods have been imposed to
preclude acquisition of tenurial security by the employee, they should be struck down or
disregarded as contrary to public policy and morals.

In rendering this Decision, the Court emphasizes not only the constitutional bias in favor of the
working class, but also the concern of the State for the plight of the disabled. The noble
objectives of Magna Carta for Disabled Persons are not based merely on charity or
accommodation, but on justice and the equal treatment of qualified persons, disabled or not.
In the present case, the handicap of petitioners (deaf-mutes) is not a hindrance to their work.
The eloquent proof of this statement is the repeated renewal of their employment contracts.
Why then should they be dismissed, simply because they are physically impaired? The Court
believes, that, after showing their fitness for the work assigned to them, they should be
treated and granted the same rights like any other regular employees.

In this light, we note the Office of the Solicitor Generals prayer joining the petitioners
cause.28cräläwvirtualibräry

WHEREFORE, premises considered, the Petition is hereby GRANTED. The June 20, 1995
Decision and the August 4, 1995 Resolution of the NLRC are REVERSEDand SETASIDE.
Respondent Far East Bank and Trust Company is hereby ORDEREDto pay back wages and