ATLANTA INDUSTRIES, INC. V.

SEBOLINO

G.R. No. 187320

January 26, 2011

         For resolution is the petition for review on certiorari assailing the decision and the resolution of the
Court of Appeals.
FACTS:

         Complainants Aprilito R. Sebolino, et al., filed several complaints for illegal dismissal, regularization,
underpayment, nonpayment of wages and other money claims, as well as claims for moral and
exemplary damages and attorney’s fees against the petitioners Atlanta Industries, Inc. (Atlanta) and its
President and Chief Operating Officer Robert Chan. Atlanta is a domestic corporation engaged in the
manufacture of steel pipes.
         The complaints were consolidated and were raffled to Labor Arbiter Daniel Cajilig, but were later
transferred to Labor Arbiter Dominador B. Medroso, Jr.
         The complainants alleged that they had attained regular status as they were allowed to work with
Atlanta for more than six (6) months from the start of a purported apprenticeship agreement between
them and the company. They claimed that they were illegally dismissed when the apprenticeship
agreement expired.
         In defense, Atlanta and Chan argued that the workers were not entitled to regularization and to
their money claims because they were engaged as apprentices under a government-approved
apprenticeship program. The company offered to hire them as regular employees in the event vacancies
for regular positions occur in the section of the plant where they had trained. They also claimed that
their names did not appear in the list of employees (Master List)prior to their engagement as
apprentices.
The Compulsory Arbitration Rulings

         On April 24, 2006, Labor Arbiter Medroso dismissed the complaint with respect to dela Cruz,
Magalang, Zaño and Chiong, but found the termination of service of the remaining nine to be
illegal.Consequently, the arbiter awarded the dismissed workers backwages, wage differentials, holiday
pay and service incentive leave pay amounting to P1,389,044.57 in the aggregate.
         Atlanta appealed to the National Labor Relations Commission (NLRC). In the meantime, or on
October 10, 2006, Ramos, Alegria, Villagomez, Costales and Almoite allegedly entered into a
compromise agreement with Atlanta. The agreement provided that except for Ramos, Atlanta agreed to
pay the workers a specified amount as settlement, and to acknowledge them at the same time as
regular employees.
         On December 29, 2006,the NLRC rendered a decision, on appeal, modifying the ruling of the 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, Zaño, Magalang and
Chiong; (3) approving the compromise agreement entered into by Costales, Ramos, Villagomez, Almoite
and Alegria, and (4) denying all other claims.
         Sebolino, Costales, Almoite and Sagun  moved for the reconsideration of the decision, but the NLRC
denied the motion in its March 30, 2007[9] resolution. The four then sought relief from the CA through
a petition for certiorari under Rule 65 of the Rules of Court. They charged that the NLRC committed
grave abuse of discretion in: (1) failing to recognize their prior employment with Atlanta; (2) declaring
the second apprenticeship agreement valid; (3) holding that the dismissal of Sagun, Mabanag, Sebolino
and Melvin Pedregoza is legal; and (4) upholding the compromise agreement involving Costales, Ramos,
Villagomez, Almoite and Alegria.

The CA Decision

The CA granted the petition.

The Petition

Atlanta seeks a reversal of the CA decision, contending that the appellate court erred in (1) concluding
that Costales, Almoite, Sebolino and Sagun were employed by Atlanta before they 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 agreement executed by
Costales and Almoite
The Court’s Ruling

The merits of the case

         We find no merit in the petition. The CA committed no reversible error in nullifying the NLRC
decision and in affirming the labor arbiter’s ruling, as it applies to Costales, Almoite, Sebolino and
Sagun. Specifically, the CA correctly ruled that the four were illegally dismissed because (1) they were
already employees when they were required to undergo apprenticeship and (2) apprenticeship
agreements were invalid.
         The following considerations support the CA ruling.
         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 to
undergo apprenticeship. The company itself recognized the respondents’ status through relevant
operational records – in the case of Costales and Almoite, the CPS monthly report for December 2003
which the NLRC relied upon and, for Sebolino and Sagun, the production and work schedule for March 7
to 12, 2005 cited by the CA.
         Under the CPS monthly report, Atlanta assigned Costales and Almoite to the first shift (7:00 a.m. to
3:00 p.m.) of the Section’s work. The Production and Work Schedules, in addition to the one noted by
the CA, showed that Sebolino and Sagun were scheduled on different shifts vis-à-vis the production and
work of the company’s PE/Spiral Section for the periods July 5-10, 2004; October 25-31, 2004;
November 8-14, 2004; November 16-22, 2004; January 3-9, 2005;January 10-15, 2005; March 7-12, 2005
and March 17-23, 2005.
         We  stress  that  the  CA  correctly  recognized  the  authenticity  of 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. The  appellate  court,  thus,  found the said  documents  sufficient  to establish
the employment of the respondents before their engagement as apprentices.
         Second. The Master List (of employees) that the petitioners heavily rely upon as proof of their
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, 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. 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. 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.
        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, is a violation of the Labor Code’s implementing rules and is an act manifestly unfair to the
employees, to say the least. This we cannot allow.
         Fourth. The compromise agreement allegedly entered into by Costales and Almoite, together with
Ramos, Villagomez and Alegria, purportedly in settlement of the case before the NLRC, is not binding on
Costales and Almoite because they did not sign it. The company itself admitted that while Costales and
Almoite were initially intended to be a part of the agreement, it did not pursue their inclusion “due to
their regularization as early as January 11, 2006.”
         WHEREFORE, premises considered, we hereby DENY the petition for lack of merit. The assailed
decision and resolution of the Court of Appeals are AFFIRMED. Costs against the petitioner Atlanta
Industries, Inc.