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FIRST DIVISIONG.R. No. 78763 July 12,1989

MANILA ELECTRIC COMPANY, petitioner,vs.

THE NATIONAL LABOR RELATIONS COMMISSION, and APOLINARIO M.SIGNO, respondents.

Angara, Abello, Concepcion, Regala & Cruz for petitioner.Dominador Maglalang for private respondent.

MEDIALDEA, J.:This is a petition for certiorari under Rule 65 of the Rules of Court seeking the annulment of theresolution of the respondent National Labor Relations Commission dated March 12, 1987 (p.28, Rollo) in NLRC Case No. NCR-8-3808-83, entitled, "Apolinario M. Signo, Complainant,versus Manila Electric Company, Respondents", affirming the decision of the Labor Arbiterwhich ordered the reinstatement of private respondent herein, Apolinario Signo, to his formerposition without backwages.The antecedent facts are as follows:Private respondent Signo was employed in petitioner company as supervisor-leadman since

January 1963 up to the time when his services were terminated on May 18, 1983.In 1981, a certain Fernando de Lara filed an application with the petitioner company forelectrical services at his residence at Peafrancia Subdivision, Marcos Highway, Antipolo, Rizal.Private respondent Signo facilitated the processing of the said application as well as therequired documentation for said application at the Municipality of Antipolo, Rizal. Inconsideration thereof, private respondent received from Fernando de Lara the amount ofP7,000.00. Signo thereafter filed the application for electric services with the Power SalesDivision of the company.It was established that the area where the residence of de Lara was located is not yet within theserviceable point of Meralco, because the place was beyond the 30-meter distance from thenearest existing Meralco facilities. In order to expedite the electrical connections at de Lara'sresidence, certain employees of the company, including respondent Signo, made it appear in

the application that the sari-sari store at the corner of Marcos Highway, an entrance to thesubdivision, is applicant de Lara's establishment, which, in reality is not owned by the latter.

As a result of this scheme, the electrical connections to de Lara's residence were installed andmade possible. However, due to the fault of the Power Sales Division of petitioner company,Fernando de Lara was not billed for more than a year.Petitioner company conducted an investigation of the matter and found respondent Signoresponsible for the said irregularities in the installation. Thus, the services of the latter wereterminated on May 18, 1983.On August 10 1983, respondent Signo filed a complaint for illegal dismissal, unpaid wages, andseparation pay.

After the parties had submitted their position papers, the Labor Arbiter rendered a decision (p.79, Rollo) on April 29, 1985, which stated, inter alia:

Verily, complainant's act of inducing the Meralco employees to effectuate theinstallation on Engr. de Lara's residence prejudiced the respondent, andtherefore, complainant himself had indeed became a participant in thetransactions, although not directly, which turned out to be illegal, not to mentionthat some of the materials used therein belongs to Meralco, some of which wereinferior quality. . . .While complainant may deny the violation, he cannot do away with company'sCode on Employee Discipline, more particularly Section 7, par. 8 and Section 6,

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par. 24 thereof However, as admitted by the respondent, the infraction of theabove cited Code is punishable by reprimand to dismissal."... . And in this case, while considering that complainant indeed committed theabove-cited infractions of company Code of Employee Discipline, We shall alsoconsider his records of uninterrupted twenty (20) years of service coupled withtwo (2) commendations for honesty. Likewise, We shall take note that subject

offense is his first, and therefore, to impose the extreme penalty of dismissal iscertainly too drastic. A penalty short of dismissal is more in keeping with justice,and adherence to compassionate society.WHEREFORE, respondent Meralco is hereby directed to reinstate complainant

Apolinario M. Signo to his former position as Supervisor Leadman withoutbackwages, considering that he is not at all faultless. He is however, herewarned, that commission of similar offense in the future, shall be dealt with moreseverely.SO ORDERED.

Both parties appealed from the decision to the respondent Commission. On March 12, 1987, therespondent Commission dismissed both appeals for lack of merit and affirmed in toto thedecision of the Labor Arbiter.

On June 23, 1987, the instant petition was filed with the petitioner contending that therespondent Commission committed grave abuse of discretion in affirming the decision of theLabor Arbiter. A temporary restraining order was issued by this Court on August 3, 1987,enjoining the respondents from enforcing the questioned resolution of the respondentCommission.The issue to resolve in the instant case is whether or not respondent Signo should be dismissedfrom petitioner company on grounds of serious misconduct and loss of trust and confidence.Petitioner contends that respondent Signo violated Sections 6 and 7 of the company's Code onEmployee Discipline, which provide:

Section 6, Par. 24Encouraging, inducing or threatening another employee toperform an act constituting a violation of this Code or of company work, rules oran offense in connection with the official duties of the latter, or allowing himself to

be persuaded, induced or influenced to commit such offense.PenaltyReprimand to dismissal, depending upon the gravity of the offense.Section 7, Par. 8Soliciting or receiving money, gift, share, percentage orbenefits from any person, personally or through the mediation of another, toperform an act prejudicial to the Company.PenaltyDismissal. (pp. 13-14, Rollo)

Petitioner further argues that the acts of private respondent constituted breach of trust andcaused the petitioner company economic losses resulting from the unbilled electric consumptionof de Lara; that in view thereof, the dismissal of private respondent Signo is proper consideringthe circumstances of the case.The power to dismiss is the normal prerogative of the employer. An employer, generally, candismiss or lay-off an employee for just and authorized causes enumerated under Articles 282

and 283 of the Labor Code. However, the right of an employer to freely discharge hisemployees is subject to regulation by the State, basically in the exercise of its paramount policepower. This is so because the preservation of the lives of the citizens is a basic duty of theState, more vital than the preservation of corporate profits (Euro-Linea, Phil. Inc. v. NLRC, G.R.No. 75782, December 1, 1987,156 SCRA 78).There is no question that herein respondent Signo is guilty of breach of trust and violation ofcompany rules, the penalty for which ranges from reprimand to dismissal depending on thegravity of the offense. However, as earlier stated, the respondent Commission and the Labor

Arbiter found that dismissal should not be meted to respondent Signo considering his twenty

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(20) years of service in the employ of petitioner, without any previous derogatory record, inaddition to the fact that petitioner company had awarded him in the past, two (2)commendations for honesty. If ever the petitioner suffered losses resulting from the unlistedelectric consumption of de Lara, this was found to be the fault of petitioner's Power SalesDivision.We find no reason to disturb these findings. Well-established is the principle that findings of

administrative agencies which have acquired expertise because their jurisdiction is confined tospecific matters are generally accorded not only respect but even finality. Judicial review by thisCourt on labor cases does not go so far as to evaluate the sufficiency of the evidence uponwhich the proper labor officer or office based his or its determination but is limited to issues of

jurisdiction or grave abuse of discretion (Special Events and Central Shipping Office WorkersUnion v. San Miguel Corporation, G.R. Nos. L-51002-06, May 30,1983,122 SCRA 557).This Court has held time and again, in a number of decisions, that notwithstanding the existenceof a valid cause for dismissal, such as breach of trust by an employee, nevertheless, dismissalshould not be imposed, as it is too severe a penalty if the latter has been employed for aconsiderable length of time in the service of his employer. (Itogon-Suyoc Mines, Inc. v. NLRC, etal., G.R. No. L- 54280, September 30,1982,117 SCRA 523; Meracap v. International CeramicsManufacturing Co., Inc., et al., G.R. Nos. L-48235-36, July 30,1979, 92 SCRA 412; Sampang v.

Inciong, G.R. No. 50992, June 19,1985,137 SCRA 56; De Leon v. NLRC, G.R. No. L-52056,October 30,1980, 100 SCRA 691; Philippine Airlines, Inc. v. PALEA, G.R. No. L-24626, June28, 1974, 57 SCRA 489).In a similar case, this Court ruled:

As repeatedly been held by this Court, an employer cannot legally be compelledto continue with the employment of a person who admittedly was guilty of breachof trust towards his employer and whose continuance in the service of the latteris patently inimical to its interest. The law in protecting the rights of the laborers,authorized neither oppression nor self- destruction of the employer.However, taking into account private respondent's 'twenty-three (23) years ofservice which undisputedly is unblemished by any previous derogatory record' asfound by the respondent Commission itself, and since he has been under

preventive suspension during the pendency of this case, in the absence of ashowing that the continued employment of private respondent would result inpetitioner's oppression or self-destruction, We are of the considered view that hisdismissal is a drastic punishment. ... .xxx xxx xxxThe ends of social and compassionate justice would therefore be served ifprivate respondent is reinstated but without backwages in view of petitioner'sobvious good faith. (Itogon- Suyoc Mines, Inc. v. NLRC, et al., 11 7 SCRA 528)

Further, in carrying out and interpreting the Labor Code's provisions and its implementingregulations, the workingman's welfare should be the primordial and paramount consideration.This kind of interpretation gives meaning and substance to the liberal and compassionate spiritof the law as provided for in Article 4 of the New Labor Code which states that "all doubts in the

implementation and interpretation of the provisions of the Labor Code including its implementingrules and regulations shall be resolved in favor of labor" (Abella v. NLRC, G.R. No. 71812, July30,1987,152 SCRA 140).In view of the foregoing, reinstatement of respondent Signo is proper in the instant case, butwithout the award of backwages, considering the good faith of the employer in dismissing therespondent.

ACCORDINGLY, premises considered, the petition is hereby DISMISSED and the assaileddecision of the National Labor Relations Commission dated March 12, 1987 is AFFIRMED. Thetemporary restraining order issued on August 3, 1987 is lifted. SO ORDERED.

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FIRST DIVISIONG.R. No. 162053 March 7, 2007

ST. LUKE'S MEDICAL CENTER EMPLOYEE'S ASSOCIATION-AFW (SLMCEA-AFW) ANDMARIBEL S. SANTOS,Petitioners,

vs.NATIONAL LABOR RELATIONS COMMISSION (NLRC) AND ST. LUKE'S MEDICAL

CENTER, INC.,Respondents.D E C I S I O N

AZCUNA, J.:Challenged in this petition for review on certiorariis the Decision1 of the Court of Appeals (CA)dated January 29, 2004 in CA-G.R. SP No. 75732 affirming the decision2 dated August 23,2002 rendered by the National Labor Relations Commission (NLRC) in NLRC CA No. 026225-00.The antecedent facts are as follows:Petitioner Maribel S. Santos was hired as X-Ray Technician in the Radiology department ofprivate respondent St. Luke's Medical Center, Inc. (SLMC) on October 13, 1984. She is agraduate of Associate in Radiologic Technology from The Family Clinic Incorporated School ofRadiologic Technology.

On April 22, 1992, Congress passed and enacted Republic Act No. 7431 known as the"Radiologic Technology Act of 1992." Said law requires that no person shall practice or offer topractice as a radiology and/or x-ray technologist in the Philippines without having obtained theproper certificate of registration from the Board of Radiologic Technology.On September 12, 1995, the Assistant Executive Director-Ancillary Services and HR Director ofprivate respondent SLMC issued a final notice to all practitioners of Radiologic Technology tocomply with the requirement of Republic Act No. 7431 by December 31, 1995; otherwise, theunlicensed employee will be transferred to an area which does not require a license to practiceif a slot is available.On March 4, 1997, the Director of the Institute of Radiology issued a final notice to petitionerMaribel S. Santos requiring the latter to comply with Republic Act. No. 7431 by taking andpassing the forthcoming examination scheduled in June 1997; otherwise, private respondent

SLMC may be compelled to retire her from employment should there be no other positionavailable where she may be absorbed.On May 14, 1997, the Director of the Institute of Radiology, AED-Division of Ancillary Servicesissued a memorandum to petitioner Maribel S. Santos directing the latter to submit her PRCRegistration form/Examination Permit per Memorandum dated March 4, 1997.On March 13, 1998, the Director of the Institute of Radiology issued another memorandum topetitioner Maribel S. Santos advising her that only a license can assure her of her continuedemployment at the Institute of Radiology of the private respondent SLMC and that the latter isgiving her the last chance to take and pass the forthcoming board examination scheduled inJune 1998; otherwise, private respondent SLMC shall be constrained to take action which mayinclude her separation from employment.On November 23, 1998, the Director of the Institute of Radiology issued a notice to petitioner

Maribel S. Santos informing the latter that the management of private respondent SLMC hasapproved her retirement in lieu of separation pay.On November 26, 1998, the Personnel Manager of private respondent SLMC issued a "Noticeof Separation from the Company" to petitioner Maribel S. Santos effective December 30, 1998in view of the latter's refusal to accept private respondent SLMC's offer for early retirement. Thenotice also states that while said private respondent exerted its efforts to transfer petitionerMaribel S. Santos to other position/s, her qualifications do not fit with any of the present vacantpositions in the hospital.

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In a letter dated December 18, 1998, a certain Jack C. Lappay, President of the PhilippineAssociation of Radiologic Technologists, Inc., wrote Ms. Judith Betita, Personnel Manager ofprivate respondent SLMC, requesting the latter to give "due consideration" to the organization'sthree (3) regular members of his organization (petitioner Maribel S. Santos included) "for notpassing yet the Board of Examination for X-ray Technology," "by giving them an assignment inany department of your hospital awaiting their chance to pass the future Board Exam."

On January 6, 1999, the Personnel Manager of private respondent SLMC again issued a"Notice of Separation from the Company" to petitioner Maribel S. Santos effective February 5,1999 after the latter failed to present/ submit her appeal for rechecking to the ProfessionalRegulation Commission (PRC) of the recent board examination which she took and failed.On March 2, 1999, petitioner Maribel S. Santos filed a complaint against private respondentSLMC for illegal dismissal and non-payment of salaries, allowances and other monetarybenefits. She likewise prayed for the award of moral and exemplary damages plus attorney'sfees.In the meantime, petitioner Alliance of Filipino Workers (AFW), through its President and LegalCounsel, in a letter dated September 22, 1999 addressed to Ms. Rita Marasigan, HumanResources Director of private respondent SLMC, requested the latter to accommodate petitionerMaribel S. Santos and assign her to the vacant position of CSS Aide in the hospital arising from

the death of an employee more than two (2) months earlier.In a letter dated September 24, 1999, Ms. Rita Marasigan replied thus:Gentlemen:Thank you for your letter of September 22, 1999 formally requesting to fill up the vacant regularposition of a CSS Aide in Ms. Maribel Santos' behalf.The position is indeed vacant. Please refer to our Recruitment Policy for particulars especiallyon minimum requirements of the job and the need to meet said requirements, as well as otherpre-employment requirements, in order to be considered for the vacant position. As a matter offact, Ms. Santos is welcome to apply for any vacant position on the condition that shepossesses the necessary qualifications.

As to the consensus referred to in your letter, may I correct you that the agreement is,regardless of the vacant position Ms. Santos decides to apply, she must go through the usual

application procedures. The formal letter, I am afraid, will not suffice for purposes of recruitmentprocessing. As you know, the managers requesting to fill any vacancy has a say on the matterand correctly so. The manager's inputs are necessarily factored into the standard recruitmentprocedures. Hence, the need to undergo the prescribed steps.Indeed we have gone through the mechanics to accommodate Ms. Santos' transfer while shewas employed with SLMC given the prescribed period. She was given 30 days from issuance ofthe notice of termination to look for appropriate openings which incidentally she wittinglydeclined to utilize. She did this knowing fully well that the consequences would be that herapplication beyond the 30-day period or after the effective date of her termination from SLMCwould be considered a re-application with loss of seniority and shall be subjected to thepertinent application procedures.Needless to mention, one of the 3 X-ray Technologists in similar circumstances as Ms. Santos

at the time successfully managed to get herself transferred to E.R. because she opted to applyfor the appropriate vacant position and qualified for it within the prescribed 30-day period. Theother X-ray Technologist, on the other hand, as you may recall, was eventually terminated not

just for his failure to comply with the licensure requirement of the law but for cause (refusal toserve a customer).Why Ms. Santos opted to file a complaint before the Labor Courts and not to avail of theopportunity given her, or assuming she was not qualified for any vacant position even if shetried to look for one within the prescribed period, I simply cannot understand why she alsorefused the separation pay offered by Management in an amount beyond the minimum required

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by law only to re-apply at SLMC, which option would be available to her anyway even (if she)chose to accept the separation pay!Well, here's hoping that our Union can timely influence our employees to choose their optionswell as it has in the past.(Signed)RITA MARASIGAN

Subsequently, in a letter dated December 27, 1999, Ms. Judith Betita, Personnel Manager ofprivate respondent SLMC wrote Mr. Angelito Calderon, President of petitioner union as follows:Dear Mr. Calderon:This is with regard to the case of Ms. Maribel Santos. Please recall that last Oct. 8, 1999, Ms.Rita Marasigan, HR Director, discussed with you and Mr. Greg Del Prado the terms regardingthe re-hiring of Ms. Maribel Santos. Ms. Marasigan offered Ms. Santos the position of Secretaryat the Dietary Department. In that meeting, Ms. Santos replied that she would think about theoffer. To date, we still have no definite reply from her. Again, during the conference held on Dec.14, 1999, Atty. Martir promised to talk to Ms. Santos, and inform us of her reply by Dec. 21,1999. Again we failed to hear her reply through him.Please be informed that said position is in need of immediate staffing. The Dietary Departmenthas already been experiencing serious backlog of work due to the said vacancy. Please note

that more than 2 months has passed since Ms. Marasigan offered this compromise.Management cannot afford to wait for her decision while the operation of the said departmentsuffers from vacancy.Therefore, Management is giving Ms. Santos until the end of this month to give her decision. Ifwe fail to hear from her or from you as her representatives by that time, we will consider it as awaiver and we will be forced to offer the position to other applicants so as not to jeopardize theDietary Department's operation.For your immediate action.(Signed)JUDITH BETITAPersonnel ManagerOn September 5, 2000, the Labor Arbiter came out with a Decision ordering private respondent

SLMC to pay petitioner Maribel S. Santos the amount of One Hundred Fifteen Thousand FiveHundred Pesos (P115,500.00) representing her separation pay. All other claims of petitionerwere dismissed for lack of merit.Dissatisfied, petitioner Maribel S. Santos perfected an appeal with the public respondent NLRC.On August 23, 2002, public respondent NLRC promulgated its Decision affirming the Decisionof the Labor Arbiter. It likewise denied the Motion for Reconsideration filed by petitioners in itsResolution promulgated on December 27, 2002.Petitioner thereafter filed a petition for certiorari with the CA which, as previously mentioned,affirmed the decision of the NLRC.Hence, this petition raising the following issues:

I. Whether the CA overlooked certain material facts and circumstances on petitioners'legal claim in relation to the complaint for illegal dismissal.

II. Whether the CA committed grave abuse of discretion and erred in not resolving withclarity the issues on the merit of petitioner's constitutional right of security of tenure.3

For its part, private respondent St. Luke's Medical Center, Inc. (SLMC) argues in itscomment4 that: 1) the petition should be dismissed for failure of petitioners to file a motion forreconsideration; 2) the CA did not commit grave abuse of discretion in upholding the NLRC andthe Labor Arbiter's ruling that petitioner was legally dismissed; 3) petitioner was legally andvalidly terminated in accordance with Republic Act Nos. 4226 and 7431; 4) private respondent'sdecision to terminate petitioner Santos was made in good faith and was not the result of unfair

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discrimination; and 5) petitioner Santos' non-transfer to another position in the SLMC was avalid exercise of management prerogative.The petition lacks merit.Generally, the Court has always accorded respect and finality to the findings of fact of the CAparticularly if they coincide with those of the Labor Arbiter and the NLRC and are supported bysubstantial evidence.5 True this rule admits of certain exceptions as, for example, when the

judgment is based on a misapprehension of facts, or the findings of fact are not supported bythe evidence on record6 or are so glaringly erroneous as to constitute grave abuse ofdiscretion.7 None of these exceptions, however, has been convincingly shown by petitioners toapply in the present case. Hence, the Court sees no reason to disturb such findings of fact ofthe CA.Ultimately, the issue raised by the parties boils down to whether petitioner Santos was illegallydismissed by private respondent SLMC on the basis of her inability to secure a certificate ofregistration from the Board of Radiologic Technology.The requirement for a certificate of registration is set forth under R.A. No. 74318 thus:Sec. 15. Requirement for the Practice of Radiologic Technology and X-ray Technology. - Unlessexempt from the examinations under Sections 16 and 17 hereof, no person shall practice oroffer to practice as a radiologic and/or x-ray technologist in the Philippines without having

obtained the proper certificate of registration from the Board.It is significant to note that petitioners expressly concede that the sole cause for petitionerSantos' separation from work is her failure to pass the board licensure exam for X-raytechnicians, a precondition for obtaining the certificate of registration from the Board. It isargued, though, that petitioner Santos' failure to comply with the certification requirement did notconstitute just cause for termination as it violated her constitutional right to security of tenure.This contention is untenable.While the right of workers to security of tenure is guaranteed by the Constitution, its exercisemay be reasonably regulated pursuant to the police power of the State to safeguard health,morals, peace, education, order, safety, and the general welfare of the people. Consequently,persons who desire to engage in the learned professions requiring scientific or technicalknowledge may be required to take an examination as a prerequisite to engaging in their

chosen careers.9

The most concrete example of this would be in the field of medicine, thepractice of which in all its branches has been closely regulated by the State. It has long beenrecognized that the regulation of this field is a reasonable method of protecting the health andsafety of the public to protect the public from the potentially deadly effects of incompetence andignorance among those who would practice medicine.10 The same rationale applies in theregulation of the practice of radiologic and x-ray technology. The clear and unmistakableintention of the legislature in prescribing guidelines for persons seeking to practice in this field isembodied in Section 2 of the law:Sec. 2. Statement of Policy. - It is the policy of the State to upgrade the practice of radiologictechnology in the Philippines for the purpose of protecting the public from the hazards posed byradiation as well as to ensure safe and proper diagnosis, treatment and research through theapplication of machines and/or equipment using radiation.11

In this regard, the Court quotes with approval the disquisition of public respondent NLRC in itsdecision dated August 23, 2002:The enactment of R.A. (Nos.) 7431 and 4226 are recognized as an exercise of the State'sinherent police power. It should be noted that the police power embraces the power to prescriberegulations to promote the health, morals, educations, good order, safety or general welfare ofthe people. The state is justified in prescribing the specific requirements for x-ray techniciansand/or any other professions connected with the health and safety of its citizens. Respondent-appellee being engaged in the hospital and health care business, is a proper subject of the cited

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law; thus, having in mind the legal requirements of these laws, the latter cannot close its eyesand [let] complainant-appellant's private interest override public interest.Indeed, complainant-appellant cannot insist on her "sterling work performance without anyderogatory record" to make her qualify as an x-ray technician in the absence of a propercertificate of Registration from the Board of Radiologic Technology which can only be obtainedby passing the required examination. The law is clear that the Certificate of Registration cannot

be substituted by any other requirement to allow a person to practice as a RadiologicTechnologist and/or X-ray Technologist (Technician).12No malice or ill-will can be imputed upon private respondent as the separation of petitionerSantos was undertaken by it conformably to an existing statute. It is undeniable that hercontinued employment without the required Board certification exposed the hospital to possiblesanctions and even to a revocation of its license to operate. Certainly, private respondent couldnot be expected to retain petitioner Santos despite the inimical threat posed by the latter to itsbusiness. This notwithstanding, the records bear out the fact that petitioner Santos was givenample opportunity to qualify for the position and was sufficiently warned that her failure to do sowould result in her separation from work in the event there were no other vacant positions towhich she could be transferred. Despite these warnings, petitioner Santos was still unable tocomply and pass the required exam. To reiterate, the requirement for Board certification was set

by statute. Justice, fairness and due process demand that an employer should not be penalizedfor situations where it had no participation or control.13It would be unreasonable to compel private respondent to wait until its license is cancelled and itis materially injured before removing the cause of the impending evil. Neither can the courtsstep in to force private respondent to reassign or transfer petitioner Santos under thesecircumstances. Petitioner Santos is not in the position to demand that she be given a differentwork assignment when what necessitated her transfer in the first place was her own fault orfailing. The prerogative to determine the place or station where an employee is best qualified toserve the interests of the company on the basis of the his or her qualifications, training andperformance belongs solely to the employer.14 The Labor Code and its implementing Rules donot vest in the Labor Arbiters nor in the different Divisions of the NLRC (nor in the courts)managerial authority.15

While our laws endeavor to give life to the constitutional policy on social justice and theprotection of labor, it does not mean that every labor dispute will be decided in favor of theworkers. The law also recognizes that management has rights which are also entitled to respectand enforcement in the interest of fair play.16 Labor laws, to be sure, do not authorizeinterference with the employer's judgment in the conduct of the latter's business. Privaterespondent is free to determine, using its own discretion and business judgment, all elements ofemployment, "from hiring to firing" except in cases of unlawful discrimination or those which maybe provided by law. None of these exceptions is present in the instant case.The fact that another employee, who likewise failed to pass the required exam, was allowed byprivate respondent to apply for and transfer to another position with the hospital does notconstitute unlawful discrimination. This was a valid exercise of management prerogative,petitioners not having alleged nor proven that the reassigned employee did not qualify for the

position where she was transferred. In the past, the Court has ruled that an objection foundedon the ground that one has better credentials over the appointee is frowned upon so long as thelatter possesses the minimum qualifications for the position.17 Furthermore, the records showthat Ms. Santos did not even seriously apply for another position in the company.WHEREFORE, the petition is DENIED for lack of merit. Costs against petitioners.SO ORDERED.

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FIRST DIVISIONG.R. No. 98107 August 18, 1997BENJAMIN C. JUCO, petitioner,

vs.NATIONAL LABOR RELATIONS COMMISSION and NATIONAL HOUSING

CORPORATION, respondents.

HERMOSISIMA, JR., J.:This is a petition forcertiorarito set aside the Decision of the National Labor RelationsCommission (NLRC) dated March 14, 1991, which reversed the Decision dated May 21, 1990 ofLabor Arbiter Manuel R Caday, on the ground of lack of jurisdiction.Petitioner Benjamin C. Juco was hired as a project engineer of respondent National HousingCorporation (NHC) from November 16, 1970 to May 14, 1975. On May 14, 1975, he wasseparated from the service for having been implicated in a crime of theft and/or malversation ofpublic funds.On March 25, 1977, petitioner filed a complaint for illegal dismissal against the NHC with theDepartment of Labor.On September 17, 1977, the Labor Arbiter rendered a decision dismissing the complaint on the

ground that the NLRC had no jurisdiction over the case. 1Petitioner then elevated the case to the NLRC which rendered a decision on December 28,1982, reversing the decision of the Labor Arbiter. 2Dissatisfied with the decision of the NLRC, respondent NHC appealed before this Court and onJanuary 17, 1985, we rendered a decision, the dispositive portion thereof reads as follows:

WHEREFORE, the petition is hereby GRANTED. The questioned decision of therespondent National Labor Relations Commission is SET ASIDE. The decision ofthe Labor Arbiter dismissing the case before it for lack of jurisdiction isREINSTATED. 3

On January 6, 1989, petitioner filed with the Civil Service Commission a complaint for illegaldismissal, with preliminary mandatory injunction. 4On February 6, 1989, respondent NHC moved for the dismissal of the complaint on the ground

that the Civil Service Commission has no jurisdiction over the case.5

On April 11, 1989, the Civil Service Commission issued an order dismissing the complaint forlack of jurisdiction. It ratiocinated that:

The Board finds the comment and/or motion to dismiss meritorious. It was notdisputed that NHC is a government corporation without an original charter butorganized/created under the Corporation Code.

Article IX, Section 2 (1) of the 1987 Constitution provides:The civil service embraces all branches, subdivisions,instrumentalities and agencies of the Government, includinggovernment owned and controlled corporations with originalcharters. (emphasis supplied)

From the aforequoted constitutional provision, it is clear that respondent NHC is

not within the scope of the civil service and is therefore beyond the jurisdiction ofthis Board. Moreover, it is pertinent to state that the 1987 Constitution wasratified and became effective on February 2, 1987.WHEREFORE, for lack of jurisdiction, the instant complaint is hereby dismissed. 6

On April 28, 1989, petitioner filed with respondent NLRC a complaint for illegal dismissal withpreliminary mandatory injunction against respondent NHC. 7On May 21, 1990, respondent NLRC thru Labor Arbiter Manuel R. Caday ruled that petitionerwas illegally dismissed from his employment by respondent as there was evidence in the recordthat the criminal case against him was purely fabricated, prompting the trial court to dismiss the

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charges against him. Hence, he concluded that the dismissal was illegal as it was devoid ofbasis, legal or factual.He further ruled that the complaint is not barred by prescription considering that the period fromwhich to reckon the reglementary period of four years should be from the date of the receipt ofthe decision of the Civil Service Commission promulgated on April 11, 1989. He alsoratiocinated that:

It appears . . . complainant filed the complaint for illegal dismissal with the CivilService Commission on January 6, 1989 and the same was dismissed on April11, 1989 after which on April 28, 1989, this case was filed by the complainant.Prior to that, this case was ruled upon by the Supreme Court on January 17,1985 which enjoined the complainant to go to the Civil Service Commissionwhich in fact, complainant did. Under the circumstances, there is merit on thecontention that the running of the reglementary period of four (4) years wassuspended with the filing of the complaint with the said Commission. Verily, itwas not the fault of the respondent for failing to file the complaint as alleged bythe respondent but due to, in the words of the complainant, a "legal knot" thathas to be untangled. 8

Thereafter, the Labor Arbiter rendered a decision, the dispositive portion of which reads:

Premises considered, judgment is hereby rendered declaring the dismissal of thecomplainant as illegal and ordering the respondent to immediately reinstate himto his former position without loss of seniority rights with full back wages inclusiveof allowance and to his other benefits or equivalent computed from the time it iswithheld from him when he was dismissed on March 27, 1977, until actuallyreinstated. 9

On June 1, 1990, respondent NHC filed its appeal before the NLRC and on March 14, 1991, theNLRC promulgated a decision which reversed the decision of Labor Arbiter Manuel R. Caday onthe ground of lack of jurisdiction. 10The primordial issue that confronts us is whether or not public respondent committed graveabuse of discretion in holding that petitioner is not governed by the Labor Code.Under the laws then in force, employees of government-owned and/or controlled corporations

were governed by the Civil Service Law and not by the Labor Code. Hence,Article 277 of the Labor Code (PD 442) then provided:

The terms and conditions of employment of all government employees, includingemployees of government-owned and controlled corporations shall be governedby the Civil Service Law, rules and regulations . . . .The 1973 Constitution, Article II-B, Section 1(1), on the other hand provided:The Civil Service embraces every branch, agency, subdivision andinstrumentality of the government, including government-owned or controlledcorporations.

Although we had earlier ruled inNational Housing Corporation v.Juco, 11 that employees of government-owned and/or controlled corporations, whether createdby special law or formed as subsidiaries under the general Corporation Law, are governed by

the Civil Service Law and not by the Labor Code, this ruling has been supplanted by the 1987Constitution. Thus, the said Constitution now provides:

The civil service embraces all branches, subdivisions, instrumentalities, andagencies of the Government, including government owned or controlledcorporations with original charter. (Article IX-B, Section 2[1])

In National Service Corporation (NASECO) v. National Labor Relations Commission, 12 we hadthe occasion to apply the present Constitution in deciding whether or not the employees ofNASECO are covered by the Civil Service Law or the Labor Code notwithstanding that the casearose at the time when the 1973 Constitution was still in effect. We ruled that the NLRC has

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jurisdiction over the employees of NASECO on the ground that it is the 1987 Constitution thatgoverns because it is the Constitution in place at the time of the decision. Furthermore, we ruledthat the new phrase "with original charter" means that government-owned and controlledcorporations refer to corporations chartered by special law as distinguished from corporationsorganized under the Corporation Code. Thus, NASECO which had been organized under thegeneral incorporation statute and a subsidiary of the National Investment Development

Corporation, which in turn was a subsidiary of the Philippine National Bank, is exluded from thepurview of the Civil Service Commission.We see no cogent reason to depart from the ruling in the aforesaid case.In the case at bench, the National Housing Corporation is a government owned corporationorganized in 1959 in accordance with Executive Order No. 399, otherwise known as the UniformCharter of Government Corporation, dated January 1, 1959. Its shares of stock are and havebeen one hundred percent (100%) owned by the Government from its incorporation under Act1459, the former corporation law. The government entities that own its shares of stock are theGovernment Service Insurance System, the Social Security System, the Development Bank ofthe Philippines, the National Investment and Development Corporation and the People'sHomesite and Housing Corporation. 13 Considering the fact that the NHA had been incorporatedunder Act 1459, the former corporation law, it is but correct to say that it is a government-owned

or controlled corporation whose employees are subject to the provisions of the Labor Code. Thisobservation is reiterated in the recent case ofTrade Union of the Philippines and Allied Services(TUPAS) v. National HousingCorporation, 14 where we held that the NHA is now within the jurisdiction of the Department ofLabor and Employment, it being a government-owned and/or controlled corporation without anoriginal charter. Furthermore, we also held that the workers or employees of the NHC (nowNHA) undoubtedly have the right to form unions or employee's organization and that there is noimpediment to the holding of a certification election among them as they are covered by theLabor Code.Thus, the NLRC erred in dismissing petitioner's complaint for lack of jurisdiction because therule now is that the Civil Service now covers only government-owned or controlled corporationswith original charters. 15 Having been incorporated under the Corporation Law, its relations with

its personnel are governed by the Labor Code and come under the jurisdiction of the NationalLabor Relations Commission.One final point. Petitioners have been tossed from one forum to another for a simple illegaldismissal case. It is but apt that we put an end to his dilemna in the interest of justice.WHEREFORE, the decision of the NLRC in NLRC NCR-04-02036089 dated March 14, 1991 ishereby REVERSED and the Decision of the Labor Arbiter dated May 21, 1990 is REINSTATED.SO ORDERED.

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FIRST DIVISIONG.R. No. 144767 March 21, 2002

DILY DANY NACPIL, petitioner,vs.

INTERNATIONAL BROADCASTING CORPORATION, respondent.KAPUNAN, J.:

This is a petition for review on certiorari under Rule 45, assailing the Decision of the Court ofAppeals dated November 23, 1999 in CA-G.R. SP No. 527551 and the Resolution dated August31, 2000 denying petitioner Dily Dany Nacpil's motion for reconsideration. The Court of Appealsreversed the decisions promulgated by the Labor Arbiter and the National Labor RelationsCommission (NLRC), which consistently ruled in favor of petitioner.Petitioner states that he was Assistant General Manager for Finance/Administration andComptroller of private respondent Intercontinental Broadcasting Corporation (IBC) from 1996until April 1997. According to petitioner, when Emiliano Templo was appointed to replace IBCPresident Tomas Gomez III sometime in March 1997, the former told the Board of Directors thatas soon as he assumes the IBC presidency, he would terminate the services of petitioner.

Apparently, Templo blamed petitioner, along with a certain Mr. Basilio and Mr. Gomez, for theprior mismanagement of IBC. Upon his assumption of the IBC presidency, Templo allegedly

harassed, insulted, humiliated and pressured petitioner into resigning until the latter was forcedto retire. However, Templo refused to pay him his retirement benefits, allegedly because he hadnot yet secured the clearances from the Presidential Commission on Good Government and theCommission on Audit. Furthermore, Templo allegedly refused to recognize petitioner'semployment, claiming that petitioner was not the Assistant General Manager/Comptroller of IBCbut merely usurped the powers of the Comptroller. Hence, in 1997, petitioner filed with theLabor Arbiter a complaint for illegal dismissal and non-payment of benefits.1wphi1.ntInstead of filing its position paper, IBC filed a motion to dismiss alleging that the Labor Arbiterhad no jurisdiction over the case. IBC contended that petitioner was a corporate officer who wasduly elected by the Board of Directors of IBC; hence, the case qualifies as an intra-corporatedispute falling within the jurisdiction of the Securities and Exchange Commission (SEC).However, the motion was denied by the Labor Arbiter in an Order dated April 22, 1998.2

On August 21, 1998, the Labor Arbiter rendered a Decision stating that petitioner had beenillegally dismissed. The dispositive portion thereof reads:

WHEREFORE, in view of all the foregoing, judgment is hereby rendered in favor of thecomplainant and against all the respondents, jointly and severally, ordering the latter:

1. To reinstate complainant to his former position without diminution of salary orloss of seniority rights, and with full backwages computed from the time of hisillegal dismissal on May 16, 1997 up to the time of his actual reinstatement whichis tentatively computed as of the date of this decision on August 21, 1998 in theamount of P1,231,750.00 (i.e., P75,000.00 a month x 15.16 months =P1,137,000.00 plus 13th month pay equivalent to 1/12 of P 1,137,000.00 =P94,750.00 or the total amount of P 1,231,750.00). Should complainant be notreinstated within ten (10) days from receipt of this decision, he shall be entitled to

additional backwages until actually reinstated.2. Likewise, to pay complainant the following:a) P 2 Million as and for moral damages;b) P500,000.00 as and for exemplary damages; plus and (sic)c) Ten (10%) percent thereof as and for attorney's fees.

SO ORDERED.3IBC appealed to the NLRC, but the same was dismissed in a Resolution dated March 2, 1999,for its failure to file the required appeal bond in accordance with Article 223 of the Labor

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Code.4 IBC then filed a motion for reconsideration that was likewise denied in a Resolutiondated April 26, 1999.5IBC then filed with the Court of Appeals a petition for certiorari under Rule 65, which petitionwas granted by the appellate court in its Decision dated November 23, 1999. The dispositiveportion of said decision states:

WHEREFORE, premises considered, the petition for Certiorari is GRANTED. The

assailed decisions of the Labor Arbiter and the NLRC are REVERSED and SET ASIDEand the complaint is DISMISSED without prejudice.SO ORDERED.6

Petitioner then filed a motion for reconsideration, which was denied by the appellate court in aResolution dated August 31, 2000.Hence, this petition.Petitioner Nacpil submits that:

I.THE COURT OF APPEALS ERRED IN FINDING THAT PETITIONER WAS

APPOINTED BY RESPONDENT'S BOARD OF DIRECTORS AS COMPTROLLER.THIS FINDING IS CONTRARY TO THE COMMON, CONSISTENT POSITION AND

ADMISSION OF BOTH PARTIES. FURTHER, RESPONDENT'S BY-LAWS DOES NOT

INCLUDE COMPTROLLER AS ONE OF ITS CORPORATE OFFICERS.II.THE COURT OF APPEALS WENT BEYOND THE ISSUE OF THE CASE WHEN ITSUBSTITUTED THE NATIONAL LABOR RELATIONS COMMISSION'S DECISION TO

APPLY THE APPEAL BOND REQUIREMENT STRICTLY IN THE INSTANT CASE.THE ONLY ISSUE FOR ITS DETERMINATION IS WHETHER NLRC COMMITTEDGRAVE ABUSE OF DISCRETION IN DOING THE SAME.7

The issue to be resolved is whether the Labor Arbiter had jurisdiction over the case for illegaldismissal and non-payment of benefits filed by petitioner. The Court finds that the Labor Arbiterhad no jurisdiction over the same.Under Presidential Decree No. 902-A (the Revised Securities Act), the law in force when thecomplaint for illegal dismissal was instituted by petitioner in 1997, the following cases fall under

the exclusive of the SEC:a) Devices or schemes employed by or any acts of the board of directors, businessassociates, its officers or partners, amounting to fraud and misrepresentation which maybe detrimental to the interest of the public and/or of the stockholders, partners, membersof associations or organizations registered with the Commission;b) Controversies arising out of intra-corporate or partnership relations, between andamong stockholders, members or associates; between any or all of them and thecorporation, partnership or association of which they are stockholders, members orassociates, respectively; and between such corporation, partnership or association andthe State insofar as it concerns their individual franchise or right to exist as such entity;c) Controversies in the election or appointment of directors, trustees, officers, ormanagers of such corporations, partnerships or associations;

d) Petitions of corporations, partnerships, or associations to be declared in the state ofsuspension of payments in cases where the corporation, partnership or associationpossesses property to cover all of its debts but foresees the impossibility of meetingthem when they respectively fall due or in cases where the corporation, partnership orassociation has no sufficient assets to cover its liabilities, but is under the ManagementCommittee created pursuant to this decree. (Emphasis supplied.)

The Court has consistently held that there are two elements to be considered in determiningwhether the SEC has jurisdiction over the controversy, to wit: (1) the status or relationship of theparties; and (2) the nature of the question that is the subject of their controversy.8

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Petitioner argues that he is not a corporate officer of the IBC but an employee thereof since hehad not been elected nor appointed as Comptroller and Assistant Manager by the IBC's Boardof Directors. He points out that he had actually been appointed as such on January 11, 1995 bythe IBC's General Manager, Ceferino Basilio. In support of his argument, petitioner underscoresthe fact that the IBC's By-Laws does not even include the position of comptroller in its roster ofcorporate officers.9 He therefore contends that his dismissal is a controversy falling within the

jurisdiction of the labor courts.10Petitioner's argument is untenable. Even assuming that he was in fact appointed by the GeneralManager, such appointment was subsequently approved by the Board of Directors of theIBC.11 That the position of Comptroller is not expressly mentioned among the officers of the IBCin the By-Laws is of no moment, because the IBC's Board of Directors is empowered underSection 25 of the Corporation Code12 and under the corporation's By-Laws to appoint such otherofficers as it may deem necessary. The By-Laws of the IBC categorically provides:

XII. OFFICERSThe officers of the corporation shall consist of a President, a Vice-President, aSecretary-Treasurer, a General Manager, and such other officers as the Board ofDirectorsmay from time to time does fit to provide for. Said officers shall beelected by majority vote of the Board of Directors and shall have such powers and

duties as shall hereinafter provide (Emphasis supplied).13The Court has held that in most cases the "by-laws may and usually do provide for such otherofficers,"14 and that where a corporate office is not specifically indicated in the roster ofcorporate offices in the by-laws of a corporation, the board of directors may also be empoweredunder the by-lawsto create additional officers as may be necessary.15

An "office" has been defined as a creation of the charter of a corporation, while an "officer" as aperson elected by the directors or stockholders. On the other hand, an "employee" occupies nooffice and is generally employed not by action of the directors and stockholders but by themanaging officer of the corporation who also determines the compensation to be paid to suchemployee.16

As petitioner's appointment as comptroller required the approval and formal action of the IBC'sBoard of Directors to become valid,17 it is clear therefore holds that petitioner is a corporate

officer whose dismissal may be the subject of a controversy cognizable by the SEC underSection 5(c) of P.D. 902-A which includes controversies involving both electionand appointmentof corporate directors, trustees, officers, and managers.18 Had petitioner beenan ordinary employee, such board action would not have been required.Thus, the Court of Appeals correctly held that:

Since complainant's appointment was approved unanimously by the Board of Directorsof the corporation, he is therefore considered a corporate officer and his claim of illegaldismissal is a controversy that falls under the jurisdiction of the SEC as contemplated bySection 5 of P.D. 902-A. The rule is that dismissal or non-appointment of a corporateofficer is clearly an intra-corporate matter and jurisdiction over the case properly belongsto the SEC, not to the NLRC.19

As to petitioner's argument that the nature of his functions is recommendatory thereby making

him a mere managerial officer, the Court has previously held that the relationship of a person toa corporation, whether as officer or agent or employee is not determined by the nature of theservices performed, but instead by the incidents of the relationship as they actually exist.20It is likewise of no consequence that petitioner's complaint for illegal dismissal includes moneyclaims, for such claims are actually part of the perquisites of his position in, and therefore linkedwith his relations with, the corporation. The inclusion of such money claims does not convert theissue into a simple labor problem. Clearly, the issues raised by petitioner against the IBC arematters that come within the area of corporate affairs and management, and constitute acorporate controversy in contemplation of the Corporation Code.21

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Petitioner further argues that the IBC failed to perfect its appeal from the Labor Arbiter'sDecision for its non-payment of the appeal bond as required under Article 223 of the LaborCode, since compliance with the requirement of posting of a cash or surety bond in an amountequivalent to the monetary award in the judgment appealed from has been held to be bothmandatory and jurisdictional.22 Hence, the Decision of the Labor Arbiter had long become finaland executory and thus, the Court of Appeals acted with grave abuse of discretion amounting to

lack or excess of jurisdiction in giving due course to the IBC's petition for certiorari, and indeciding the case on the merits.The IBC's failure to post an appeal bond within the period mandated under Article 223 of theLabor Code has been rendered immaterial by the fact that the Labor Arbiter did not have

jurisdiction over the case since as stated earlier, the same is in the nature of an intra-corporatecontroversy. The Court has consistently held that where there is a finding that any decision wasrendered without jurisdiction, the action shall be dismissed. Such defense can be interposed atany time, during appeal or even after final judgment.23 It is a well-settled rule that jurisdiction isconferred only by the Constitution or by law. It cannot be fixed by the will of the parties; it cannotbe acquired through, enlarged or diminished by, any act or omission of the parties.24Considering the foregoing, the Court holds that no error was committed by the Court of Appealsin dismissing the case filed before the Labor Arbiter, without prejudice to the filing of an

appropriate action in the proper court. 1wphi1.ntIt must be noted that under Section 5.2 of the Securities Regulation Code (Republic Act No.8799) which was signed into law by then President Joseph Ejercito Estrada on July 19, 2000,the SEC's jurisdiction over all cases enumerated in Section 5 of P.D. 902-A has beentransferred to the Regional Trial Courts.25WHEREFORE, the petition is hereby DISMISSED and the Decision of the Court of Appeals inCA-G.R. SP No. 52755 is AFFIRMED.SO ORDERED.

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SECOND DIVISION

G.R. No. 109583 September 5, 1997TRANS ACTION OVERSEAS CORPORATION, petitioner,

vs.THE HONORABLE SECRETARY OF LABOR, ROSELLE CASTIGADOR, JOSEFINA

MAMON, JENELYN CASA, PEACHY LANIOG, VERDELINA BELGIRA, ELMA FLORES,RAMONA LITURCO, GRACE SABANDO, GLORIA PALMA, AVELYN ALVAREZ,

CANDELARIA NONO, NITA BUSTAMANTE, CYNTHIA ARANDILLO, SANDIE AGUILAR,DIGNA PANAGUITON, VERONICA BAYOGOS, JULIANITA ARANADOR, LEONORA

CABALLERO, NANCY BOLIVAR, NIMFA BUCOL, ZITA GALINDO, ESTELITA BIOCOS,MARJORIE MACATE, RUBY SEPULVIDA, ROSALIE SONDIA, NORA MAQUILING,

PAULINA CORDERO, LENIROSE ABANGAN, SELFA PALMA, ANTONIA NAVARRO, ELSIEPENARUBIA, IRMA SOBREQUIL, SONY JAMUAT, CLETA MAYO,respondents.

ROMERO, J.:The issue presented in the case at bar is whether or not the Secretary of Labor andEmployment has jurisdiction to cancel or revoke the license of a private fee-charging

employment agency.From July 24 to September 9, 1987, petitioner Trans Action Overseas Corporation, a privatefee-charging employment agency, scoured Iloilo City for possible recruits for alleged jobvacancies in Hongkong. Private respondents sought employment as domestic helpers throughpetitioner's employees, Luzviminda Aragon, Ben Hur Domincil and his wife Cecille. Theapplicants paid placement fees ranging from P1,000.00 to P14,000.00, but petitioner failed todeploy them. Their demands for refund proved unavailing; thus, they were constrained toinstitute complaints against petitioner for violation of Articles 32 and 34(a) 1 of the Labor Code,as amended.Petitioner denied having received the amounts allegedly collected from respondents, andaverred that Aragon, whose only duty was to pre-screen and interview applicants, and thespouses Domincil were not authorized to collect fees from the applicants. Accordingly, it cannot

be held liable for the money claimed by respondents. Petitioner maintains that it even warnedrespondents not to give any money to unauthorized individuals.POEA Regional Extension Unit Coordinator Edgar Somes testified that although he was awarethat petitioner collected fees from respondents, the latter insisted that they be allowed to makethe payments on the assumption that it could hasten their deployment abroad. He added thatMrs. Honorata Manliclic, a representative of petitioner tasked to oversee the conduct of theinterviews, told him that she was leaving behind presigned receipts to Aragon as she cannotstay in Iloilo City for the screening of the applicants. Manliclic, however, denied this version andargued that it was Somes who instructed her to leave the receipts behind as it was perfectlyalright to collect fees.On April 5, 1991, then Labor Undersecretary Nieves R. Confesor rendered the assailed order,the dispositive portion of which reads:

WHEREFORE, respondents are hereby ordered to pay, jointly and severally, thefollowing claims:

1. Rosele Castigador P14,000.002. Josefina Mamon 3,000.003. Jenelyn Casa 3,000.004. Peachy Laniog 13,500.005. Verdelina Belgira 2,000.006. Elma Flores 2,500.007. Ramona Liturco 2,500.00

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8. Grace Sabando 3,500.009. Gloria Palma 1,500.0010. Avelyn Alvarez 1,500.0011. Candelaria Nono 1,000.0012. Nita Bustamante 5,000.0013. Cynthia Arandillo 1,000.00

14. Sandie Aguilar 3,000.0015. Digna Panaguiton 2,500.0016. Veronica Bayogos 2,000.0017. Sony Jamuat 4,500.0018. Irma Sobrequil 2,000.0019. Elsie Penarubia 2,000.0020. Antonia Navarro 2,000.0021. Selfa Palma 3,000.0022. Lenirose Abangan 13,300.0023. Paulina Cordero 1,400.0024. Nora Maquiling 2,000.0025. Rosalie Sondia 2,000.00

26. Ruby Sepulvida 3,500.0027. Marjorie Macate 1,500.0028. Estelita Biocos 3,000.0029. Zita Galindo 3,500.0030. Nimfa Bucol 1,000.0031. Nancy Bolivar 2,000.0032. Leonora Caballero 13,900.0033. Julianita Aranador 14,000.00

The complaints of Ma. Luz Alingasa, Nimfa Perez, and Cleta Mayo are herebydismissed in view of their desistance.The following complaints are hereby dismissed for failure to appear/prosecute:

1. Jiyasmin Bantillo 6. Edna Salvante

2. Rosa de Luna Senail 7. Thelma Beltiar3. Elnor Bandojo 8. Cynthia Cepe4. Teresa Caldeo 9. Rosie Pavillon5. Virginia Castroverde

The complaints filed by the following are hereby dismissed for lack of evidence:1. Aleth Palomaria 5. Mary Ann Beboso2. Emely Padrones 6. Josefina Tejero3. Marybeth Aparri 7. Bernadita Aprong4. Lenia Biona 8. Joji Lull

Respondent agency is liable for twenty eight (28) counts of violation of Article 32and five (5) counts of Article 34 (a) with a corresponding suspension in theaggregate period of sixty six (66) months. Considering however, that under the

schedule of penalties, any suspension amounting to a period of 12 months meritsthe imposition of the penalty of cancellation, the license of respondentTRANS

ACTION OVERSEAS CORPORATION to participate in the overseas placementand recruitment of workers is hereby ordered CANCELLED, effectiveimmediately.SO ORDERED. 2 (Emphasis supplied)

On April 29, 1991, petitioner filed its Motion for Temporary Lifting of Order of Cancellationalleging, among other things, that to deny it the authority to engage in placement andrecruitment activities would jeopardize not only its contractual relations with its foreign

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principals, but also the welfare, interests, and livelihood of recruited workers scheduled to leavefor their respective assignments. Finally, it manifested its willingness to post a bond to insurepayment of the claims to be awarded, should its appeal or motion be denied.Finding the motion to be well taken, Undersecretary Confesor provisionally lifted thecancellation of petitioner's license pending resolution of its Motion for Reconsideration filed onMay 6, 1991. On January 30, 1992, however, petitioner's motion for reconsideration was

eventually denied for lack of merit, and the April 5, 1991, order revoking its license wasreinstated.Petitioner contends that Secretary; Confesor acted with grave abuse of discretion in renderingthe assailed orders on alternative grounds, viz.: (1) it is the Philippine Overseas Employment

Administration (POEA) which has the exclusive and original jurisdiction to hear and decideillegal recruitment cases, including the authority to cancel recruitment licenses, or (2) thecancellation order based on the 1987 POEA Schedule of Penalties is not valid for non-compliance with the Revised Administrative Code of 1987 regarding its registration with the U.P.Law Center.Under Executive Order No. 797 3 (E.O. No. 797) and Executive Order No. 247 (E.O. No.247), 4 the POEA was established and mandated to assume the functions of the OverseasEmployment Development Board (OEDB), the National Seamen Board (NSB), and the overseas

employment function of the Bureau of Employment Services (BES). Petitioner theorizes thatwhen POEA absorbed the powers of these agencies, Article 35 of the Labor Code, as amended,was rendered ineffective.The power to suspend or cancel any license or authority to recruit employees for overseasemployment is vested upon the Secretary of Labor and Employment. Article 35 of the LaborCode, as amended, which provides:

Art. 5. Suspension and/or Cancellation of License or Authority The Minister ofLabor shall have the power to suspend or cancel any license or authority torecruit employees for overseas employment for violation of rules and regulationsissued by the Ministry of Labor, the Overseas Employment Development Board,and the National Seamen Board, or for violation of the provisions of this andother applicable laws, General Orders and Letters of Instructions.

In the case ofEastern Assurance and Surety Corp. v. Secretary ofLabor, 5 we held that:

The penalties of suspension and cancellation of license or authority areprescribed for violations of the above quoted provisions, among others.And theSecretary of Labor has the power under Section 35 of the law to apply thesesanctions, as well as the authority, conferred by Section 36, not only to "restrictand regulate the recruitment and placement activities of all agencies," but also to"promulgate rules and regulations to carry out the objectives and implement theprovisions" governing said activities. Pursuant to this rule-making power thusgranted, the Secretary of Labor gave the POEA, 6 "on its own initiative or uponfiling of a complaint or report or upon request for investigation by any aggrievedperson, . . (authority to) conduct the necessary proceedings for the suspension or

cancellation of the license or authority of any agency or entity" for certainenumerated offenses including 1) the imposition or acceptance, directly or indirectly, of any amount of money,goods or services, or any fee or bond in excess of what is prescribed by the

Administration, and2) any other violation of pertinent provisions of the Labor Code and other relevantlaws, rules and regulations. 7

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SECOND DIVISION

G.R. Nos. 85122-24 March 22, 1991JULIO N. CAGAMPAN, SILVINO C. VICERA, JORGE C. DE CASTRO, JUANITO R. DE

JESUS, ARNOLD J. MIRANDA, , MAXIMO O. ROSELLO & ANICETO L.BETANA, petitioners,

vs.NATIONAL LABOR RELATIONS COMMISSION, & ACE MARITIME AGENCIES,

INC., respondents.Benjamin S. Davidfor petitioners.

DeLuna, Sumnoad and Gaerlan for private respondent.

PARAS, J.:pPresented before Us for review is the decision of public respondent National Labor RelationsCommission handed down on March 16, 1988 reversing the decision of the Philippine OverseesEmployment Administration and correspondingly dismissing the cases for lack of merit. ThePOEA decision granted overtime pay to petitioners equivalent to 30% of their basic pay.We do not dispute the facts as found by the Solicitor General. Thus:

On April 17 and 18,1985, petitioners, all seamen, entered into separate contractsof employment with the Golden Light Ocean Transport, Ltd., through its localagency, private respondent ACE MARITIME AGENCIES, INC. Petitioners, withtheir respective ratings and monthly salary rates, are as follows:Petitioners Rating Salary per monthJulio Cagampan 2nd Engineer US$500.00Silvino Vicera 2nd Engineer US$800.00Juanito de Jesus Ordinary Seaman US$120.00Jorge C. de Castro Ordinary Seaman US$160.00

Arnold Miranda 3rd Officer US$310.00Maximo Rosello Cook US$230.00

Aniceto Betana 3rd Engineer US$400.00

Petitioners were deployed on May 7, 1985, and discharged on July 12, 1986.Thereafter, petitioners collectively and/or individually filed complaints for non-payment of overtime pay, vacation pay and terminal pay against privaterespondent. In addition, they claimed that they were made to sign their contractsin blank. Likewise, petitioners averred that although they agreed to renderservices on board the vessel Rio Colorado managed by Golden Light OceanTransport, Ltd., the vessel they actually boarded was MV "SOIC I" managed byColumbus Navigation. Two (2) petitioners, Jorge de Castro and Juanito deJesus, charged that although they were employed as ordinary seamen (OS), theyactually performed the work and duties of Able Seamen (AB).Private respondent was furnished with copies of petitioners' complaints andsummons, but it failed to file its answer within the reglementary period. Thus, on

January 12, 1987, an Order was issued declaring that private respondent haswaived its right to present evidence in its behalf and that the cases are submittedfor decision (Page 68, Records).On August 5, 1987, the Philippine Overseas Employment Administration (POEA)rendered a Decision dismissing petitioners' claim for terminal pay but grantedtheir prayer for leave pay and overtime pay. The dispositive portion of theDecision reads:

IN VIEW OF THE FOREGOING, judgment is hereby renderedordering respondent (private respondent) Ace Maritime Agencies,

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Inc. to pay the following complainants (petitioners) in the amountsopposite their names:1. Julio CagampanUS$583.33 plus US$2,125.00 representingthe 30% guaranteed overtime pay;2. Silvino ViceraUS$933.33 plus US$3,400.00 representing the30% guaranteed overtime pay;

3. Jorge de CastroUS$233.33 plus US$850.00 representing the30% guaranteed overtime pay;4. Juanito de JesusUS$233.33 plus US$850.00 representingthe 30% guaranteed overtime pay;5. Lauro DiongzonUS$233.33 plus US$850.00 representing the30% guaranteed overtime pay;6. Arnold MirandaUS$455.00 plus US$1,659.50 representingthe 30% guaranteed overtime pay;7. Maximo RoselloUS$303.33 plus US$1,105.00 representingthe 30% guaranteed overtime pay; and8. Aniceto BetanaUS$583.33 plus US$2,125.00 representingthe 30% guaranteed overtime pay.

The payments represent their leave pay equivalent to theirrespective salary (sic) of 35 days and should be paid in Philippinecurrency at the current rate of exchange at the time of actualpayment. (pp. 81-82, Records)

Private respondent appealed from the POEA's Decision to the NLRC on August24, 1987. On March 16, 1988, the NLRC promulgated a Decision, the dispositiveportion of which reads:

WHEREFORE, premises considered, the appealed decision ishereby REVERSED and SET ASIDE and another one entereddismissing these cases for lack of merit. (p. 144, Records)

On May 8, 1988, petitioners filed an Urgent Motion for Reconsideration of theNLRC's Decision (p. 210, Records), but the same was denied by the NLRC for

lack of merit in its Resolution dated September 12, 1988 (p. 212, Records).Hence, this appeal from the decision and resolution of the respondent NLRC.Petitioners allege that respondent Commission gravely abused its discretion or erred in decidingin favor of private respondent company by reason of the following:1. Respondent NLRC overlooked the fact that private respondent company had repeatedlyfailed and refused to file its answer to petitioners' complaints with their supporting documents.2. Respondent Commission erred in reversing and setting aside the POEA decision andcorrespondingly dismissing the appeal of petitioners, allegedly in contravention of law and

jurisprudence.Private respondent maritime company disclaims the aforesaid allegations of petitioners throughthese arguments:1. As borne out by the records, its former counsel attended all the hearings before the POEA

wherein he raised the basis objection that the complaint of petitioners was so generally couchedthat a more detailed pleading with supporting documents was repeatedly requested for the latterto submit.2. The NLRC never abused its discretion in arriving at assailed decision considering that thesame was based on the Memorandum on Appeal dated August 14, 1987 filed by privaterespondent.3. In the hearings conducted by respondent Commission, all the arguments of both parties wereproperly ventilated and considered by said Commission in rendering its decision.

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4. The Labor Code basically provides that the rules of evidence prevailing in courts of law orequity shall not be controlling and it is the spirit and intention of the Code that the Commissionand its members and Labor Arbiters should use every and an reasonable means to ascertainthe facts in each case speedily and objectively and without regard to technicalities of law andprocedure, all in the interest of due process.5. Petitioners' motion for reconsideration of the NLRC decision did not invoke the merits of the

case but merely raised purely technical and procedural matters. Even assuming that privaterespondent, technically speaking, waived the presentation of evidence, its appeal to the NLRCwas valid since it involved merely a correct interpretation and clarification of certain provisions ofthe contract the validity of which has never been questioned.The Solicitor General, arguing for public respondent NLRC, contends:1. Petitioners' assumption that a party who is declared to have waived his right to presentevidence also loses his right to appeal from an adverse judgment made against him is a falsityfor, although the technical rules of evidence prevailing in the courts of law or equity do not bindlabor tribunals, even the Rules of Court allows a party declared in default to appeal from said

judgment by attaching the propriety of the relief awarded therein.2. The NLRC did not abuse its discretion in the rendition of subject decision because theevidence presented by petitioners in support of their complaint is by itself sufficient to back up

the decision. The issue of the disallowance of overtime pay stems from an interpretation ofparticular provisions of the employment contract.We cannot sustain petitioners' position.The failure of respondent to submit its responsive pleading was not fatal as to invalidate its casebefore the Phil. Overseas Employment Authority. Evidently, such formal or technical defect wasrectified by the fact that the POEA proceeded with the hearings on the case where both partieswere given sufficient leeway to ventilate their cases.Petitioners' manifest pursuit of their claims before the POEA in the absence of the answerproduced the effect of condoning the failure of private respondent to submit the said answer.Their submission to the POEA's authority without questioning its jurisdiction to continue thehearings further strengthens the fact that the alleged technical defect had already been cured.

After all, what is there to complain of when the POEA handed down a decision favorable to

petitioners with the allowance of the latter's leave pay and overtime pay.Notably, it was only when private respondent appealed the NLRC decision to this Court thatpetitioners suddenly unearth the issue of private respondent's default in the POEA case. Hadthe decision favoring them not been reversed by the NLRC, petitioners could have just clammedup. They resorted to bringing up a technical, not a substantial, defect in their desperate attemptto sway the Court's decision in their favor.Private respondent has pointedly argued that the NLRC anchored its decision primarily upon theMemorandum on Appeal. In the case of Manila Doctors Hospital v. NLRC (153 SCRA 262) thisCourt ruled that the National Labor Relations Commission and the Labor Arbiter have authorityunder the Labor Code to decide a case based on the position papers and documents submittedwithout resorting to the technical rules of evidence.On the issue of whether or not petitioners should be entitled to terminal pay, We sustain the

finding of respondent NLRC that petitioners were actually paid more than the amounts fixed intheir employment contracts. The pertinent portion of the NLRC decision reads as follows.

On this award for leave pay to the complainants (petitioners), the (private)respondent maintains that the actually theywere paid much more than what theywere legally entitled to under their contract.This fact has not been disputed by thecomplainants (petitioners.) Thus, as mentioned in (private) respondent'sMemorandum on Appeal dated 14 August 1987, their overpayment is more thanenough and sufficient to offsetwhatever claims for leave pay they filed in thiscase and for which the POEA favorably considered in their favor. For

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hours that he was on board his vessel or barge each day, irrespective of whetheror not he actually put in work during those hours. Seamen are required to stay onboard their vessels by the very nature of their duties, and it is for this reason that,in addition to their regular compensation, they are given free living quarters andsubsistence allowances when required to be on board. It could not have been thepurpose of our law to require their employers to pay them overtime even when

they are not actually working; otherwise, every sailor on board a vessel would beentitled to overtime for sixteen hours each day, even if he spent all those hoursresting or sleeping in his bunk, after his regular tour of duty. The correct criterionin determiningwhether or not sailors are entitled to overtime pay is not, therefore,whether theywere on board and can not leave ship beyond the regular eightworking hours a day, butwhether they actually rendered service in excess of saidnumber of hours.(Emphasis supplied)

The aforequoted ruling is a reiteration of Our resolution in Luzon Stevedoring Co.,Inc. vs. LuzonMarine Department Union, et al. (G.R. No. 9265, April 29, 1957).WHEREFORE, the decision of the NLRC is hereby AFFIRMED with the modification thatpetitioners Cagampan and Vicera are awarded their leave pay according to the terms of thecontract.

SO ORDERED.

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EN BANCG.R. No. L-17750 August 31, 1962

A. L. AMMEN TRANSPORTATION COMPANY, INC., and CONSOLIDATED AUTO LINES,INC., petitioners,

vs.JOSE BORJA, respondent.

Manuel O. Chan for petitioners.Madrid LawOffice for respondent.

DIZON, J.: Appeal bycertioraritaken by A. L. Ammen Transportation Co., Inc. and Consolidated AutoLines, Inc. from an order of the Court of Industrial Relations in Case No. 6-V Bicol dated May 9,1960 and its Resolution of August 27, 1960 denying their motion for reconsideration. Thedispositive part of the appealed order is as follows:

IN VIEW OF THE FOREGOING, respondents are hereby ordered to pay petitioner forthe services rendered by the latter in excess of eight hours a day from January 1, 1952up to and including March 10, 1957. In connection herewith, the Chief Examiner andEconomist of this Court or his duly authorized representative is hereby directed toproceed to the premises of the respondents and make the necessary computations to

determine the exact amount due to the petitioner. The computation of the number ofhours worked in excess of eight hours a day should be based on the inspector'snotebook of the petitioner and/or the abstract thereof in the possession of therespondents. The count should start from the first inspection up to the last, as stated insaid inspector's notebooks. But in no case shall count be stopped until 6:00 P.M.because if the last inspection was terminated before said time, petitioner was giveninvestigation work.The bonus of P30.00 a month is to be included as part of the basic salary of thepetitioner, it having been regularly given by respondents since 1951 for somemeritorious work rendered by petitioner and should, therefore, be deemed as part of hisregular salary. However, an allowance of 30 minutes a day for lunch break should bededucted from the total number of working hours rendered by petitioner. Further, the

work not in excess of eight hours a day, rendered by petitioner for respondents duringSundays and holidays should not be considered as compensable overtime workbecause the respondents are public service corporations.

Respondent Jose Borja was employed by petitioners as Supervising Inspector, with a basicsalary of P180.00 a month, P3.00 daily per diems, and a monthly bonus of P30.00, fromJanuary 1, 1952 to March 10, 1957 when he was dismissed from the service.On April 15, 1958 respondent filed an action against petitioners in the Court of First Instance of

Albay (Civil Case No. 1905) to recover compensation for overtime work rendered by him duringthe above-mentioned period, a damages. In their answer, petitioners denied respondent claimfor overtime pay, and alleged, by way of affirmative defense, that respondent had filed the sameclaim with Department of Labor, Regional Office No. IV at Naga City on May 29, 1957 but thesame was dismissed with prejudice upon the latter's petition, on April 30, 1958.

Pending trial of the abovementioned case, respondent commenced the present proceedings inthe Court of Industrial Relations substantially reproducing the claim involve in Civil Case No.1905. Petitioners, after likewise producing their answer in said case, asserted, by way additionalaffirmative defense, the pendency of Civil Case No. 1905 between the same parties and for thesame cause. .

After due trial, the Court of Industrial Relations issued its order of May 9, 1960 and its resolutionof August 27, 1960 subject of the present appeal.To reverse the order and resolution appealed from, petitioner contends that the Court ofIndustrial Relations erred firstly, in not holding that respondent's cause of action has prescribed;

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secondly, in taking cognizance of this case although it had no jurisdiction over the same; andlastly, in disregarding petitioner's memorandum to the respondent prohibiting him to work inexcess of eight (8) hours daily.On the question of prescription, petitioner claims the respondent's action was commenced onlyin December 1958; that in accordance with Republic Act 1994, amending Commonwealth ActNo. 444, any action to enforce a cause action under said Act shall be commenced within three

(3) years after its accrual; that respondent's cause of action having accrued more than threeyears before December 1958, his action was filed too late.1wph1.tWe find petitioner's contention to be untenable. The Court of Industrial Relations made a findingof fact the effect that respondent had commenced his action against petitioner before June 22,1957 the effective date of Republic Act No. 1994, amending Commonwealth Act No. 444.This finding is not now reviewable.But even on the merits, petitioner's contention is without merit. Respondent itself admitted in itsanswer dated May 6, 1959, filed in the above-mentioned case No. 6-V Bicol, that petitioner hadoriginally filed his complaint with the Department of Labor, Regional Office No. 4 on May 29,1957. It is clear therefore that his action had already been commenced before the effective dateof Republic Act 1994, and is covered by the exception provided for therein.But petitioner contends in this regard that the phrase "actions already commenced" employed in

the statute should be construed as meaning only actions filed in a regular court of justice. Withthis limited and narrow interpretation, we can not agree. The statute under consideration isundoubtedly a labor statute and, as such, must be liberally construed in favor of the laborerconcerned. (Art. 1702, New Civil Code). Consequently, the term "actions" should include every

judicial and administrative proceeding intended to enforce a right or secure redress for a wrongalready committed. Since respondent admittedly first filed his claim against petitioner with theDepartment of Labor on May 29, 1957, in accordance with laws then in force, it seems clearthat, as already stated, it is covered by the exception provided for in Republic Act No. 1994,whose date of effectivity was June 22, 1957.On the question of jurisdiction, petitioner claims that, as respondent sought to collect overtimewages, and nothing more, this case was not within the jurisdiction of the Court of IndustrialRelations.

This is also without merit. The complaint filed by respondent with the Court of IndustrialRelations alleged, inter alia, that he "was' separated automatically from the said employmentwith defendants, and notwithstanding pleas for reinstatement defendants refused and still refuseto reinstate plaintiff", and, aside from some specific reliefs, respondent herein also asked that"other reliefs be granted him".

A reasonable interpretation of respondent's pleading fully justifies the opinion of the Court ofIndustrial Relations to the effect that respondent, aside from overtime wages, also soughtreinstatement. The case, therefore, was within the jurisdiction of said Court.In connection with its last contention, petitioner claims that the Court of Industrial Relationserred in disregarding the memorandum of the company prohibiting respondent from working inexcess of eight hours daily. Such memorandum could not fairly apply to respondent becauseaccording to the Court of Industrial Relations, there sufficient evidence showing that inspite of it,

respondent had received verbal instructions from superior authority to inspect the first trip, noontrip, and last trip; that this connection he had submitted to petitioner a daily report of inspectionwhich stated the period or number hours he had worked for the day, and that since January 1,1952 up to and including March 10, 1957, respondent had been rendering overtime service withfull knowledge petitioner. All these show conclusively that the Court Industrial Relations wasright in awarding to respondent the corresponding overtime compensation.WHEREFORE, the order and resolution appealed from are affirmed, with costs.

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THIRD DIVISIONG.R. No. 79351 November 28, 1989

DEVELOPMENT BANK OF THE PHILIPPINES, petitioner,vs.

THE HON. SECRETARY OF LABOR, CRESENCIA DIFONTORUM, ET AL., respondents.The Chief Legal Counsel for petitioner.

Dante P. Sindac for private respondents.

CORTES, J.:Petitioner Development Bank of the Philippines seeks the nullification of an order dated July 29,1987 and issued by the Undersecretary of Labor and Employment, affirming that of NationalCapital Region Officer-in-Charge Romeo A. Young, directing the petitioner to deliver theproperties of Riverside Mills Corporation (RMC) which it had in its possession to the Ministry(now Department) of Labor and Employment (MOLE) for proper disposition in Case No. NCR-LSED-7-334-84 pursuant to Article 110 of the Labor Code.Labor Case No. NCR-LSED-7-334-84 involves a complaint for illegal dismissal, unfair laborpractice, illegal deductions from salaries and violation of the minimum wage law filed by privaterespondents herein against RMC. On July 3, 1985, a decision was rendered by Director Severo

M. Pucan of the National Capital Region, MOLE, ordering RMC to pay private respondentsbackwages and separation benefits. A corresponding writ of execution was issued on October22, 1985 directing the sheriff to collect the amount of ONE MILLION TWO HUNDRED FIFTY-SIX THOUSAND SIX HUNDRED SEVENTY-EIGHT PESOS AND SEVENTY SIX CENTAVOS(P1,256,678.76) from RMC and, in case of failure to collect, to execute the writ by selling thegoods and chattel of RMC not exempt from execution or, in case of insufficiency thereof, thereal or immovable properties of RMC.However, on May 23, 1986, the writ of execution was returned unserved and unsatisfied, withthe information that the company premises of RMC had been padlocked and foreclosed bypetitioner. It appears that petitioner had instituted extra-judicial foreclosure proceedings as earlyas 1983 on the properties and other assets of RMC as a result of the latter's failure to meet itsobligations on the loans it secured from petitioner.

Consequently, private respondents filed with the MOLE a "Motion for Delivery of Properties ofthe [RMC] in the Possession of the [DBP] to the [MOLE] for Proper Disposition," stating thatpursuant to Article 110 of the Labor Code, they enjoy first preference over the mortgagedproperties of RMC for the satisfaction of the judgment rendered in their favor notwithstandingthe foreclosure of the same by petitioner as mortgage creditor [Rollo, pp. 16-17]. Petitioner filedits opposition.In an order signed by Officer-in-Charge Romeo A. Young and dated December 11, 1986,private respondents' motion was granted based on the finding that Article 110 of the Labor Codeand the ruling laid down in Philippine Commercial and Industrial Bank v. Natural Mines and

AlliedWorkers' (NAMAWU-MIF) [G.R. No. 50402, August 19, 1982, 115 SCRA 873] support theconclusion that private respondents still enjoyed a preferential lien for the payment of theirbackwages and separation benefits over the properties of RMC which were foreclosed by

petitioner [Rollo, pp. 21-22].Petitioner then filed its motion for reconsideration on December 24,1986 contending that Article110 of the Labor Code finds no application in the case at bar for the following reasons: (1) Theproperties sought to be delivered have ceased to belong to RMC in view of the fact thatpetitioner had foreclosed on the mortgage, and the properties have been sold and delivered tothird parties; (2) The requisite condition for the application of Article 110 of the Labor Code isnot present since no bankruptcy or insolvency proceedings over RMC properties and assetshave been undertaken [Rollo, pp. 24-28]. In an order dated July 29, 1987, petitioner's motion forreconsideration was denied for lack of merit by Undersecretary Dionisio C. dela Serna.

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Hence, petitioner filed this special civil action forcertiorariwith prayer for the issuance of a writof preliminary injunction. On August 27, 1987, this Court issued a temporary restraining orderenjoining public respondent from enforcing or carrying out its order dated July 29, 1987. Afterconsidering the allegations made and issues raised in the petition, comments thereto and reply,the Court, on March 14, 1988, resolved to give due course to the petition and to require theparties to submit their respective memoranda. Petitioner and private respondent submitted their

memoranda, while public respondent adopted as its memorandum the comment it hadpreviously submitted.

After a careful study of the various arguments adduced, as well as the legal provisions and jurisprudence