CASE 2012-0023: JUANA COMPLEX I HOMEOWNERS ASSOCIATION, INC., ANDRES C. BAUTISTA, BRIGIDO DIMACULANGAN, DOLORES P. PRADO, IMELDA DE LA CRUZ, EDITHA C. DY, FLORENCIA M. MERCADO, LEOVINO C. DATARIO, AIDA A. ABAYON, NAPOLEON M. DIMAANO, ROSITA G. ESTIGOY AND NELSON A. LOYOLA,   VS. FIL-ESTATE LAND, INC., FIL ESTATE ECOCENTRUM CORPORATION, LA PAZ HOUSING AND DEVELOPMENT CORPORATION, WARBIRD SECURITY AGENCY, ENRIQUE RIVILLA, MICHAEL E. JETHMAL AND MICHAEL ALUNAN (G.R. NO. 152272,       MARCH 5, 2012, MENDOZA, J.) SUBJECT: HOW CAUSE OF ACTION IS DETERMINED; ELEMENTS OF CLASS SUIT; REQUIREMENTS FOR WRIT OF PRELIM INJUNCTION. (BRIEF TITLE: JUANA COMPLEX VS. FIL-ESTATE LAND)

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DISPOSITIVE

WHEREFORE, the petitions are DENIED. Accordingly, the July 31, 2001 Decision and February 21, 2002 Resolution of the Court of Appeals in CA-G.R. SP No. 60543 are AFFIRMED.

SO ORDERED.

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Republic of the Philippines

Supreme Court

Manila

THIRD DIVISION

X ————————————————————————————– X

DECISION

MENDOZA, J.:

Before the Court are two (2) consolidated petitions assailing the July 31, 2001 Decision^[1][1] and February 21, 2002 Resolution^[2][2] of the Court of Appeals (CA) in CA-G.R. SP No. 60543, which annulled and set aside the March 3, 1999 Order^[3][3] of the Regional Trial Court, Branch 25, Biñan, Laguna (RTC), granting the application for the issuance of a writ of preliminary injunction, and upheld the June 16, 2000 Omnibus Order^[4][4] denying the motion to dismiss.

The Facts:

On January 20, 1999, Juana Complex I Homeowners Association, Inc. (JCHA), together with individual residents of Juana Complex I and other neighboring subdivisions (collectively referred as JCHA, et. al.), instituted a complaint^[5][5] for damages, in its own behalf and as a class suit representing the regular commuters and motorists of Juana Complex I and neighboring subdivisions who were deprived of the use of La Paz Road, against Fil-Estate Land, Inc. (Fil-Estate), Fil-estate Ecocentrum Corporation (FEEC), La Paz Housing & Development Corporation (La Paz), and Warbird Security Agency and their respective officers (collectively referred as Fil-Estate, et al.).

The complaint alleged that JCHA, et al. were regular commuters and motorists who constantly travelled towards the direction of Manila and Calamba; that they used the entry and exit toll gates of South Luzon Expressway (SLEX) by passing through right-of-way public road known as La Paz Road; that they had been using La Paz Road for more than ten (10) years; that in August 1998, Fil-estate excavated, broke and deliberately ruined La Paz Road that led to SLEX so JCHA, et al. would not be able to pass through the said road; that La Paz Road was restored by the residents to make it passable but Fil-estate excavated the road again; that JCHA reported the matter to the Municipal Government and the Office of the Municipal Engineer but the latter failed to repair the road to make it passable and safe to motorists and pedestrians; that the act of Fil-estate in excavating La Paz Road caused damage, prejudice, inconvenience, annoyance, and loss of precious hours to them, to the commuters and motorists because traffic was re-routed to narrow streets that caused terrible traffic congestion and hazard; and that its permanent closure would not only prejudice their right to free and unhampered use of the property but would also cause great damage and irreparable injury.

Accordingly, JCHA, et al. also prayed for the immediate issuance of a Temporary Restraining Order (TRO) or a writ of preliminary injunction (WPI) to enjoin Fil-Estate, et al. from stopping and intimidating them in their use ofLa Paz Road.

On February 10, 1999, a TRO was issued ordering Fil-Estate, et al, for a period of twenty (20) days, to stop preventing, coercing, intimidating or harassing the commuters and motorists from using the La Paz Road. ^[6][6]

Subsequently, the RTC conducted several hearings to determine the propriety of the issuance of a WPI.

 On February 26, 1999, Fil-Estate, et al. filed a motion to dismiss^[7][7]  arguing that the complaint failed to state a cause of action and that it was improperly filed as a class suit. On March 5, 1999, JCHA, et al. filed their comment^[8][8] on the motion to dismiss to which respondents filed a reply.^[9][9] 

On March 3, 1999, the RTC issued an Order ^[10][10] granting the WPI and required JCHA, et al. to post a bond.

On March 19, 1999, Fil-Estate, et al. filed a motion for reconsideration^[11][11] arguing, among others, that JCHA, et al. failed to satisfy the requirements for the issuance of a WPI. On March 23, 1999, JCHA, et al. filed their opposition to the motion.^[12][12]

The RTC then issued itsJune 16, 2000Omnibus Order, denying both the motion to dismiss and the motion for reconsideration filed by Fil-Estate, et al.

Not satisfied, Fil-Estate, et al. filed a petition for certiorari and prohibition before the CA to annul (1) the Order dated March 3, 1999and (2) the Omnibus Order dated June 16, 2000. They contended that the complaint failed to state a cause of action and that it was improperly filed as a class suit. With regard to the issuance of the WPI, the defendants averred that JCHA, et al. failed to show that they had a clear and unmistakable right to the use of La Paz Road; and further claimed that La Paz Road was a torrens registered private road and there was neither a voluntary nor legal easement constituted over it.^[13][13]

OnJuly 31, 2001, the CA rendered the decision partially granting the petition, the dispositive portion of which reads:

WHEREFORE, the petition is hereby partially GRANTED. The Order datedMarch 3, 1999granting the writ of preliminary injunction is hereby ANNULLED and SET ASIDE but the portion of the Omnibus Order datedJune 16, 2000denying the motion to dismiss is upheld.

SO ORDERED.^[14][14]

The CA ruled that the complaint sufficiently stated a cause of action when JCHA, et al. alleged in their complaint that they had been using La Paz Road for more than ten (10) years and that their right was violated when Fil-Estate closed and excavated the road. It sustained the RTC ruling that the complaint was properly filed as a class suit as it was shown that the case was of common interest and that the individuals sought to be represented were so numerous that it was impractical to include all of them as parties. The CA, however, annulled the WPI for failure of JCHA, et al. to prove their clear and present right overLa Paz Road. The CA ordered the remand of the case to the RTC for a full-blown trial on the merits.

Hence, these petitions for review.

In G.R. No. 152272, JCHA, et al. come to this Court, raising the following issues:

(A)

THE HONORABLE COURT OF APPEALS, IN HOLDING THAT A FULL-BLOWN TRIAL ON THE MERITS IS REQUIRED TO DETERMINE THE NATURE OF THE LA PAZ ROAD, HAD DEPARTED FROM THE ACCEPTED AND USUAL COURSE OF JUDICIAL PROCEEDINGS AS TO CALL FOR AN EXERCISE OF THE POWER OF SUPERVISION.

(B)

THE HONORABLE COURT OF APPEALS, IN HOLDING THAT THE PETITIONERS FAILED TO SATISFY THE REQUIREMENTS FOR THE ISSUANCE OF A WRIT OF PRELIMINARY INJUNCTION, HAD DECIDED NOT IN ACCORD WITH LAW AND WITH THE APPLICABLE DECISIONS OF THE SUPREME COURT.^[15][15]

In G.R. No. 152397, on the other hand, Fil-Estate, et al. anchor their petition on the following issues:

I.

The Court of Appeals’ declaration that respondents’ Complaint states a cause of action is contrary to existing law and jurisprudence.

II.

The Court of Appeals’ pronouncement that respondents’ complaint was properly filed as a class suit is contrary to existing law and jurisprudence.

III.

The Court of Appeals’ conclusion that full blown trial on the merits is required to determine the nature of the La Paz Road is contrary to existing laws and jurisprudence.^[16][16]

JCHA, et al. concur with the CA that the complaint sufficiently stated a cause of action. They, however, disagree with the CA’s pronouncement that a full-blown trial on the merits was necessary. They claim that during the hearing on the application of the writ of injunction, they had sufficiently proven that La Paz Road was a public road and that commuters and motorists of their neighboring villages had used this road as their means of access to the San Agustin Church, Colegio De San Agustin and to SLEX in going to Metro Manila and to Southern Tagalog particularly during the rush hours when traffic at Carmona Entry/Exit and Susana Heights Entry/Exit was at its worst.

JCHA, et al. argue thatLa Paz Roadhas attained the status and character of a public road or burdened by an apparent easement of public right of way. They point out thatLa Paz Roadis the widest road in the neighborhood used by motorists in going toHalang Roadand in entering the SLEX-Halang toll gate and that there is no other road as wide asLa Paz Roadexisting in the vicinity. For residents of San Pedro, Laguna, the shortest, convenient and safe route towards SLEX Halang is alongRosario AvenuejoiningLa Paz Road.

Finally, JCHA, et al. argue that the CA erred when it voided the WPI because the public nature of La Paz Road had been sufficiently proven and, as residents of San Pedro and Biñan, Laguna, their right to use La Paz Road is undeniable.

In their Memorandum,^[17][17] Fil-Estate, et al. explain that La Paz Road is included in the parcels of land covered by Transfer Certificates of Title (TCT) Nos. T-120008, T-90321 and T-90607, all registered in the name ofLa Paz. The purpose of constructingLa Paz Road was to provide a passageway forLa Paz to its intended projects to the south, one of which was the Juana Complex I. When Juana Complex I was completed, La Paz donated the open spaces, drainage, canal, and lighting facilities inside the Juana Complex I to the Municipality of Biñan. The streets within the subdivisions were then converted to public roads and were opened for use of the general public. TheLa Paz Road, not being part of the Juana Complex I, was excluded from the donation. Subsequently,La Paz became a shareholder of FEEC, a consortium formed to develop several real properties in Biñan, Laguna, known as Ecocentrum Project. In exchange for shares of stock,La Paz contributed some of its real properties to theMunicipality ofBiñan, including the properties constitutingLa Paz Road, to form part of the Ecocentrum Project.

Fil-Estate, et al. agree with the CA that the annulment of the WPI was proper since JCHA, et al. failed to prove that they have a clear right overLa Paz Road. Fil-Estate, et al. assert that JCHA, et al. failed to prove the existence of a right of way or a right to pass over La Paz Road and that the closure of the said road constituted an injury to such right. According to them,La Paz Roadis a torrens registered private road and there is neither a voluntary nor legal easement constituted over it. They claim thatLa Paz Roadis a private property registered under the name ofLa Pazand the beneficial ownership thereof was transferred to FEEC whenLa Pazjoined the consortium for the Ecocentrum Project.

Fil-Estate, et al., however, insist that the complaint did not sufficiently contain the ultimate facts to show a cause of action. They aver the bare allegation that one is entitled to something is an allegation of a conclusion which adds nothing to the pleading.

They likewise argue that the complaint was improperly filed as a class suit for it failed to show that JCHA, et al. and the commuters and motorists they are representing have a well-defined community of interest overLa Paz Road. They claim that the excavation ofLa Paz Roadwould not necessarily give rise to a common right or cause of  action for JCHA, et al. against them since each of them has a separate and distinct purpose and each may be affected differently than the others.  

The Court’s Ruling

          The issues for the Court’s resolution are: (1) whether or not the complaint states a cause of action; (2) whether the complaint has been properly filed as a class suit; and (2) whether or not a WPI is warranted.

Section 2, Rule 2 of the Rules of Court defines a cause of action as an act or omission by which a party violates the right of another. A complaint states a cause of action when it contains three (3) essential elements of a cause of action, namely:

(1)     the legal right of the plaintiff,

(2)     the correlative obligation of the defendant, and

(3)     the act or omission of the defendant in violation of said legal right.^[18][18]

The question of whether the complaint states a cause of action is determined by its averments regarding the acts committed by the defendant.^[19][19]  Thus, it must contain a concise statement of the ultimate or essential facts constituting the plaintiff’s cause of action.^[20][20]  To be taken into account are only the material allegations in the complaint; extraneous facts and circumstances or other matters aliunde are not considered.^[21][21] 

The test of sufficiency of facts alleged in the complaint as constituting a cause of action is whether or not admitting the facts alleged, the court could render a valid verdict in accordance with the prayer of said complaint.^[22][22] Stated differently, if the allegations in the complaint furnish sufficient basis by which the complaint can be maintained, the same should not be dismissed regardless of the defense that may be asserted by the defendant.^[23][23]

In the present case, the Court finds the allegations in the complaint sufficient to establish a cause of action. First, JCHA, et al.’s averments in the complaint show a demandable right over La Paz Road. These are: (1) their right to use the road on the basis of their allegation that they had been using the road for more than 10 years; and (2) an easement of a right of way has been constituted over the said roads. There is no other road as wide as La Paz Road existing in the vicinity and it is the shortest, convenient and safe route towards SLEX Halang that the commuters and motorists may use. Second, there is an alleged violation of such right committed by Fil-Estate, et al. when they excavated the road and prevented the commuters and motorists from using the same. Third, JCHA, et al. consequently suffered injury and that a valid judgment could have been rendered in accordance with the relief sought therein. 

With respect to the issue that the case was improperly instituted as a class suit, the Court finds the opposition without merit.

Section 12, Rule 3 of the Rules of Court defines a class suit, as follows:

Sec. 12. Class suit. – When the subject matter of the controversy is one of common or general interest to many persons so numerous that it is impracticable to join all as parties, a number of them which the court finds to be sufficiently numerous and representative as to fully protect the interests of all concerned may sue or defend for the benefit of all. Any party in interest shall have the right to intervene to protect his individual interest. 

The necessary elements for the maintenance of a class suit are:  1) the subject matter of controversy is one of common or general interest to many persons; 2) the parties affected are so numerous that it is impracticable to bring them all to court; and 3) the parties bringing the class suit are sufficiently numerous or representative of the class and can fully protect the interests of all concerned.^[24][24] 

In this case, the suit is clearly one that benefits all commuters and motorists who useLa Paz Road. As succinctly stated by the CA:

The subject matter of the instant case, i.e., the closure and excavation of theLa Paz Road, is initially shown to be of common or general interest to many persons. The records reveal that numerous individuals have filed manifestations with the lower court, conveying their intention to join private respondents in the suit and claiming that they are similarly situated with private respondents for they were also prejudiced by the acts of petitioners in closing and excavating theLa Paz Road. Moreover, the individuals sought to be represented by private respondents in the suit are so numerous that it is impracticable to join them all as parties and be named individually as plaintiffs in the complaint. These individuals claim to be residents of various barangays in Biñan, Laguna and other barangays in San Pedro, Laguna.

Anent the issue on the propriety of the WPI, Section 3, Rule 58 of the Rules of Court lays down the rules for the issuance thereof. Thus:  

 (a)       That the applicant is entitled to the relief demanded, and the whole or part of such relief consists in restraining the commission or continuance of the acts complained of, or in the performance of an act or acts, either for a limited period or perpetually;

(b)       That the commission, continuance or non-performance of the act or acts complained of during the litigation would probably work injustice to the applicant; or

(c)        That a party, court, or agency or a person is doing, threatening, or attempting to do, or is procuring or suffering to be done, some act or acts probably in violation of the rights of the applicant respecting the subject of the action or proceeding, and tending to render the judgment ineffectual.  

A writ of preliminary injunction is available to prevent a threatened or continuous irremediable injury to parties before their claims can be thoroughly studied and adjudicated.^[25][25]  The requisites for its issuance are: (1) the existence of a clear and unmistakable right that must be protected; and (2) an urgent and paramount necessity for the writ to prevent serious damage.^[26][26]  For the writ to issue, the right sought to be protected must be a present right, a legal right which must be shown to be clear and positive.^[27][27] This means that the persons applying for the writ must show that they have an ostensible right to the final relief prayed for in their complaint.^[28][28]

In the case at bench, JCHA, et al. failed to establish a prima facie proof of violation of their right to justify the issuance of a WPI. Their right to the use ofLa Paz Road is disputable since they have no clear legal right therein. As correctly ruled by the CA:

Here, contrary to the ruling of respondent Judge, private respondents failed to prove as yet that they have a clear and unmistakable right over theLa Paz Road– which was sought to be protected by the injunctive writ. They merely anchor their purported right over theLa Paz Roadon the bare allegation that they have been using the same as public road right-of-way for more than ten years. A mere allegation does not meet the standard of proof that would warrant the issuance of the injunctive writ. Failure to establish the existence of a clear right which should be judicially protected through the writ of injunction is a sufficient ground for denying the injunction.

Consequently, the case should be further heard by the RTC so that the parties can fully prove their respective positions on the issues.

Due process considerations dictate that the assailed injunctive writ is not a judgment on the merits but merely an order for the grant of a provisional and ancillary remedy to preserve the status quo until the merits of the case can be heard. The hearing on the application for issuance of a writ of preliminary injunction is separate and distinct from the trial on the merits of the main case. ^[29][29] The evidence submitted during the hearing of the incident is not conclusive or complete for only a “sampling” is needed to give the trial court an idea of the justification for the preliminary injunction pending the decision of the case on the merits.^[30][30] There are vital facts that have yet to be presented during the trial which may not be obtained or presented during the hearing on the application for the injunctive writ.^[31][31] Moreover, the quantum of evidence required for one is different from that for the other.^[32][32]

WHEREFORE, the petitions are DENIED. Accordingly, the July 31, 2001 Decision and February 21, 2002 Resolution of the Court of Appeals in CA-G.R. SP No. 60543 are AFFIRMED.

SO ORDERED.

                                                JOSE CATRAL MENDOZA

                                                           Associate Justice

WE CONCUR:

PRESBITERO J. VELASCO, JR.

Associate Justice

Chairperson

DIOSDADO M. PERALTA                      ROBERTO A. ABAD

            Associate Justice                                     Associate Justice

ESTELA M. PERLAS-BERNABE

Associate Justice    

A T T E S T A T I O N

I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

          PRESBITERO J. VELASCO, JR.

                         Associate Justice

                                                                 Chairperson, Third Division

C E R T I F I C A T I O N

Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson’s Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

                                                                      RENATO C. CORONA

                                                                               Chief Justice

CASE 2012-0022: PEOPLE’S BROADCASTING SERVICE (BOMBO RADYO PHILS., INC. VS. THE SECRETARY OF THE DEPARTMENT OF LABOR AND EMPLOYMENT, THE REGIONAL DIRECTOR, DOLE REGION VII, AND JANDELEON JUEZAN (G.R. NO. 179652, MARCH 6, 2012, VELASCO, JR., J.) SUBJECT: IN THE EXERCISE OF THE DOLE’S VISITORIAL AND ENFORCEMENT POWER, THE LABOR SECRETARY OR THE LATTER’S AUTHORIZED REPRESENTATIVE SHALL HAVE THE POWER TO DETERMINE THE EXISTENCE OF AN EMPLOYER-EMPLOYEE RELATIONSHIP, TO THE EXCLUSION OF THE NLRC.   (BRIEF TITLE: PEOPLE’S BROADCASTING VS. DOLE SECRETARY).

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DISPOSITIVE:

WHEREFORE, the Decision of this Court in G.R. No. 179652 is hereby AFFIRMED, with the MODIFICATION that in the exercise of the DOLE’s visitorial and enforcement power, the Labor Secretary or the latter’s authorized representative shall have the power to determine the existence of an employer-employee relationship, to the exclusion of the NLRC. 

SO ORDERED.

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Republic of thePhilippines

SUPREME COURT

Manila

EN BANC

x—————————————————————————————–x

R E S O L U T I O N

VELASCO, JR., J.:

          In a Petition for Certiorari under Rule 65, petitioner People’s Broadcasting Service, Inc. (Bombo Radyo Phils., Inc.) questioned the Decision and Resolution of the Court of Appeals (CA) dated October 26, 2006 and June 26, 2007, respectively, in C.A. G.R. CEB-SP No. 00855.

 Private respondent Jandeleon Juezan filed a complaint against petitioner with the Department of Labor and Employment (DOLE) Regional Office No. VII, Cebu City, for illegal deduction, nonpayment of service incentive leave, 13th month pay, premium pay for holiday and rest day and illegal diminution of benefits, delayed payment of wages and noncoverage of SSS, PAG-IBIG and Philhealth.^[1][1]  After the conduct of summary investigations, and after the parties submitted their position papers, the DOLE Regional Director found that private respondent was an employee of petitioner, and was entitled to his money claims.^[2][2]  Petitioner sought reconsideration of the Director’s Order, but failed. The Acting DOLE Secretary dismissed petitioner’s appeal on the ground that petitioner submitted a Deed of Assignment of Bank Deposit instead of posting a cash or surety bond.  When the matter was brought before the CA, where petitioner claimed that it had been denied due process, it was held that petitioner was accorded due process as it had been given the opportunity to be heard, and that the DOLE Secretary had jurisdiction over the matter, as the jurisdictional limitation imposed by Article 129 of the Labor Code on the power of the DOLE Secretary under Art. 128(b) of the Code had been repealed by Republic Act No. (RA) 7730.^[3][3]

          In the Decision of this Court, the CA Decision was reversed and set aside, and the complaint against petitioner was dismissed.  The dispositive portion of the Decision reads as follows:

WHEREFORE, the petition is GRANTED.  The Decision dated 26 October 2006 and the Resolution dated 26 June 2007 of the Court of Appeals in C.A. G.R. CEB-SP No. 00855 are REVERSED and SET ASIDE.  The Order of the then Acting Secretary of the Department of Labor and Employment dated 27 January 2005 denying petitioner’s appeal, and the Orders of the Director, DOLE Regional Office No. VII, dated 24 May 2004 and 27 February 2004, respectively, are ANNULLED.  The complaint against petitioner is DISMISSED.^[4][4]

The Court found that there was no employer-employee relationship between petitioner and private respondent.  It was held that while the DOLE may make a determination of the existence of an employer-employee relationship, this function could not be co-extensive with the visitorial and enforcement power provided in Art. 128(b) of the Labor Code, as amended by RA 7730.  The National Labor Relations Commission (NLRC) was held to be the primary agency in determining the existence of an employer-employee relationship.  This was the interpretation of the Court of the clause “in cases where the relationship of employer-employee still exists” in Art. 128(b).^[5][5]

From this Decision, the Public Attorney’s Office (PAO) filed a Motion for Clarification of Decision (with Leave of Court).  The PAO sought to clarify as to when the visitorial and enforcement power of the DOLE be not considered as co-extensive with the power to determine the existence of an employer-employee relationship.^[6][6]  In its Comment,^[7][7] the DOLE sought clarification as well, as to the extent of its visitorial and enforcement power under the Labor Code, as amended.

The Court treated the Motion for Clarification as a second motion for reconsideration, granting said motion and reinstating the petition.^[8][8]  It is apparent that there is a need to delineate the jurisdiction of the DOLE Secretary vis-à-vis that of the NLRC.

Under Art. 129 of the Labor Code, the power of the DOLE and its duly authorized hearing officers to hear and decide any matter involving the recovery of wages and other monetary claims and benefits was qualified by the proviso that the complaint not include a claim for reinstatement, or that the aggregate money claims not exceed PhP 5,000.  RA 7730, or an Act Further Strengthening the Visitorial and Enforcement Powers of the Secretary of Labor, did away with the PhP 5,000 limitation, allowing the DOLE Secretary to exercise its visitorial and enforcement power for claims beyond PhP 5,000.  The only qualification to this expanded power of the DOLE was only that there still be an existing employer-employee relationship.

It is conceded that if there is no employer-employee relationship, whether it has been terminated or it has not existed from the start, the DOLE has no jurisdiction.  Under Art. 128(b) of the Labor Code, as amended by RA 7730, the first sentence reads, “Notwithstanding the provisions of Articles 129 and 217 of this Code to the contrary, and in cases where the relationship of employer-employee still exists, the Secretary of Labor and Employment or his duly authorized representatives shall have the power to issue compliance orders to give effect to the labor standards provisions of this Code and other labor legislation based on the findings of labor employment and enforcement officers or industrial safety engineers made in the course of inspection.”  It is clear and beyond debate that an employer-employee relationship must exist for the exercise of the visitorial and enforcement power of the DOLE.  The question now arises, may the DOLE make a determination of whether or not an employer-employee relationship exists, and if so, to what extent?

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

The prior decision of this Court in the present case accepts such answer, but places a limitation upon the power of the DOLE, that is, the determination of the existence of an employer-employee relationship cannot be co-extensive with the visitorial and enforcement power of the DOLE.  But even in conceding the power of the DOLE to determine the existence of an employer-employee relationship, the Court held that the determination of the existence of an employer-employee relationship is still primarily within the power of the NLRC, that any finding by the DOLE is merely preliminary.

This conclusion must be revisited.

No limitation in the law was placed upon the power of the DOLE to determine the existence of an employer-employee relationship.  No procedure was laid down where the DOLE would only make a preliminary finding, that the power was primarily held by the NLRC.  The law did not say that the DOLE would first seek the NLRC’s determination of the existence of an employer-employee relationship, or that should the existence of the employer-employee relationship be disputed, the DOLE would refer the matter to the NLRC.  The DOLE must have the power to determine whether or not an employer-employee relationship exists, and from there to decide whether or not to issue compliance orders in accordance with Art. 128(b) of the Labor Code, as amended by RA 7730.

The DOLE, in determining the existence of an employer-employee relationship, has a ready set of guidelines to follow, the same guide the courts themselves use.  The elements to determine the existence of an employment relationship are: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; (4) the employer’s power to control the employee’s conduct.^[9][9]  The use of this test is not solely limited to the NLRC. The DOLE Secretary, or his or her representatives, can utilize the same test, even in the course of inspection, making use of the same evidence that would have been presented before the NLRC.

The determination of the existence of an employer-employee relationship by the DOLE must be respected.  The expanded visitorial and enforcement power of the DOLE granted by RA 7730 would be rendered nugatory if the alleged employer could, by the simple expedient of disputing the employer-employee relationship, force the referral of the matter to the NLRC.  The Court issued the declaration that at least a prima facie showing of the absence of an employer-employee relationship be made to oust the DOLE of jurisdiction.  But it is precisely the DOLE that will be faced with that evidence, and it is the DOLE that will weigh it, to see if the same does successfully refute the existence of an employer-employee relationship.

If the DOLE makes a finding that there is an existing employer-employee relationship, it takes cognizance of the matter, to the exclusion of the NLRC.  The DOLE would have no jurisdiction only if the employer-employee relationship has already been terminated, or it appears, upon review, that no employer-employee relationship existed in the first place.

The Court, in limiting the power of the DOLE, gave the rationale that such limitation would eliminate the prospect of competing conclusions between the DOLE and the NLRC.  The prospect of competing conclusions could just as well have been eliminated by according respect to the DOLE findings, to the exclusion of the NLRC, and this We believe is the more prudent course of action to take.

This is not to say that the determination by the DOLE is beyond question or review.  Suffice it to say, there are judicial remedies such as a petition for certiorari under Rule 65 that may be availed of, should a party wish to dispute the findings of the DOLE.

It must also be remembered that the power of the DOLE to determine the existence of an employer-employee relationship need not necessarily result in an affirmative finding.  The DOLE may well make the determination that no employer-employee relationship exists, thus divesting itself of jurisdiction over the case.  It must not be precluded from being able to reach its own conclusions, not by the parties, and certainly not by this Court.

Under Art. 128(b) of the Labor Code, as amended by RA 7730, the DOLE is fully empowered to make a determination as to the existence of an employer-employee relationship in the exercise of its visitorial and enforcement power, subject to judicial review, not review by the NLRC.

There is a view that despite Art. 128(b) of the Labor Code, as amended by RA 7730, there is still a threshold amount set by Arts. 129 and 217 of the Labor Code when money claims are involved, i.e., that if it is for PhP 5,000 and below, the jurisdiction is with the regional director of the DOLE, under Art. 129, and if the amount involved exceeds PhP 5,000, the jurisdiction is with the labor arbiter, under Art. 217.  The view states that despite the wording of Art. 128(b), this would only apply in the course of regular inspections undertaken by the DOLE, as differentiated from cases under Arts. 129 and 217, which originate from complaints.  There are several cases, however, where the Court has ruled that Art. 128(b) has been amended to expand the powers of the DOLE Secretary and his duly authorized representatives by RA 7730.   In these cases, the Court resolved that the DOLE had the jurisdiction, despite the amount of the money claims involved.  Furthermore, in these cases, the inspection held by the DOLE regional director was prompted specifically by a complaint.  Therefore, the initiation of a case through a complaint does not divest the DOLE Secretary or his duly authorized representative of jurisdiction under Art. 128(b).

To recapitulate, if a complaint is brought before the DOLE to give effect to the labor standards provisions of the Labor Code or other labor legislation, and there is a finding by the DOLE that there is an existing employer-employee relationship, the DOLE exercises jurisdiction to the exclusion of the NLRC.  If the DOLE finds that there is no employer-employee relationship, the jurisdiction is properly with the NLRC.  If a complaint is filed with the DOLE, and it is accompanied by a claim for reinstatement, the jurisdiction is properly with the Labor Arbiter, under Art. 217(3) of the Labor Code, which provides that the Labor Arbiter has original and exclusive jurisdiction over those cases involving wages, rates of pay, hours of work, and other terms and conditions of employment, if accompanied by a claim for reinstatement.  If a complaint is filed with the NLRC, and there is still an existing employer-employee relationship, the jurisdiction is properly with the DOLE.  The findings of the DOLE, however, may still be questioned through a petition for certiorari under Rule 65 of the Rules of Court.

In the present case, the finding of the DOLE Regional Director that there was an employer-employee relationship has been subjected to review by this Court, with the finding being that there was no employer-employee relationship between petitioner and private respondent, based on the evidence presented.  Private respondent presented self-serving allegations as well as self-defeating evidence.^[10][10]  The findings of the Regional Director were not based on substantial evidence, and private respondent failed to prove the existence of an employer-employee relationship.  The DOLE had no jurisdiction over the case, as there was no employer-employee relationship present.  Thus, the dismissal of the complaint against petitioner is proper.

WHEREFORE, the Decision of this Court in G.R. No. 179652 is hereby AFFIRMED, with the MODIFICATION that in the exercise of the DOLE’s visitorial and enforcement power, the Labor Secretary or the latter’s authorized representative shall have the power to determine the existence of an employer-employee relationship, to the exclusion of the NLRC. 

SO ORDERED.

PRESBITERO J. VELASCO, JR.

Associate Justice

WE CONCUR:

RENATO C. CORONA

Chief Justice

            ANTONIO T. CARPIO                           TERESITA J. LEONARDO-DE CASTRO                                Associate Justice                                             Associate Justice

                 ARTURO D. BRION                                        DIOSDADO M. PERALTA

                      Associate Justice                                                 Associate Justice

                                                                             (On official leave)

LUCAS P. BERSAMIN                                   MARIANO C. DEL CASTILLO

        Associate Justice                                             Associate Justice

  ROBERTO A. ABAD                             MARTIN S. VILLARAMA, JR.

        Associate Justice                                              Associate Justice

          JOSE PORTUGAL PEREZ                          JOSE CATRAL MENDOZA

                     Associate Justice                                                Associate Justice

MARIA LOURDES P. A. SERENO                 BIENVENIDO L. REYES

          Associate Justice                                        Associate Justice

ESTELA M. PERLAS-BERNABE

Associate Justice

C E R T I F I C A T I O N

                Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Resolution had been reached in consultation before the case was assigned to the writer of the opinion of the Court.

                                                                   RENATO C. CORONA

                                                                                                                          Chief Justice

CASE 2012-0021: ERNESTO G. YMBONG VS. ABS-CBN BROADCASTING CORPORATION, VENERANDA SY AND DANTE LUZON (G.R. NO. 184885, MARCH 7, 2012, VILLARAMA, JR., J.:) SUBJECT: COMPANY POLICY THAT  AN EMPLOYEE WHO RAN FOR PUBLIC OFFICE MUST RESIGN OR IS DEEMED RESIGNED UPHELD. (BRIEF TITLE: YMBONG VS. ABS-CBN)

==============================

DISPOSITIVE:

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

With costs against petitioner.

SO ORDERED.

==============================

FIRST DIVISION

x- – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – -x

DECISION

VILLARAMA, JR., J.:

          Before us is a Rule 45 Petition seeking to set aside the August 22, 2007 Decision[1][1] and September 18, 2008 Resolution[2][2] of the Court of Appeals (CA) in CA-G.R. SP No. 86206 declaring petitioner to have resigned from work and not illegally dismissed.

          The antecedent facts follow:

          Petitioner Ernesto G. Ymbong started working for ABS-CBN Broadcasting Corporation (ABS-CBN) in 1993 at its regional station in Cebuas a television talent, co-anchoring Hoy Gising and TV Patrol Cebu. His stint in ABS-CBN later extended to radio when ABS-CBN Cebu launched its AM station DYAB in 1995 where he worked as drama and voice talent, spinner, scriptwriter and public affairs program anchor.

          Like Ymbong, Leandro Patalinghug also worked for ABS-CBN Cebu. Starting 1995, he worked as talent, director and scriptwriter for various radio programs aired over DYAB.

          OnJanuary 1, 1996, the ABS-CBN Head Office inManilaissued Policy No. HR-ER-016 or the “Policy on Employees Seeking Public Office.” The pertinent portions read:

1.       Any employee who intends to run for any public office position, must file his/her letter of resignation, at least thirty (30) days prior to the official filing of the certificate of candidacy either for national or local election.

            x x x x

3.         Further, any employee who intends to join a political group/party or even with no political affiliation but who intends to openly and aggressively campaign for a candidate or group of candidates (e.g. publicly speaking/endorsing candidate, recruiting campaign workers, etc.) must file a request for leave of absence subject to management’s approval. For this particular reason, the employee should file the leave request at least thirty (30) days prior to the start of the planned leave period.

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

          Because of the impending May 1998 elections and based on his immediate recollection of the policy at that time, Dante Luzon, Assistant Station Manager of DYAB issued the following memorandum:

TO                   :           ALL CONCERNED

FROM             :           DANTE LUZON

DATE              :          MARCH 25, 1998

SUBJECT        :           AS STATED

Please be informed that per company policy, any employee/talent who wants to run for any position in the coming election will have to file a leave of absence the moment he/she files his/her certificate of candidacy.

The services rendered by the concerned employee/talent to this company will then be temporarily suspended for the entire campaign/election period.

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

          Luzon, however, admitted that upon double-checking of the exact text of the policy and subsequent confirmation with the ABS-CBN Head Office, he saw that the policy actually required suspension for those who intend to campaign for a political party or candidate and resignation for those who will actually run in the elections.[5][5]

          After the issuance of theMarch 25, 1998Memorandum, Ymbong got in touch withLuzon. Luzonclaims that Ymbong approached him and told him that he would leave radio for a couple of months because he will campaign for the administration ticket.  It was only after the elections that they found out that Ymbong actually ran for public office himself at the eleventh hour.  Ymbong, on the other hand, claims that in accordance with the March 25, 1998 Memorandum, he informed Luzon through a letter that he would take a few months leave of absence from March 8, 1998 to May 18, 1998 since he was running for councilor of Lapu-Lapu City.

          As regards Patalinghug, Patalinghug approached Luzon and advised him that he will run as councilor for Naga,Cebu.  According to Luzon, he clarified to Patalinghug that he will be considered resigned and not just on leave once he files a certificate of candidacy.  Thus, Patalinghug wroteLuzonthe following letter onApril 13, 1998:

Dear Mr. Luzon,

            I’m submitting to you my letter of resignation as your Drama Production Chief and Talent due to your company’s policy that every person connected to ABS-CBN that should seek an elected position in the government will be forced to resigned (sic) from his position.  So herewith I’m submitting my resignation with a hard heart.  But I’m still hoping to be connected again with your prestigious company after the election[s] should you feel that I’m still an asset to your drama production department.  I’m looking forward to that day and I’m very happy and proud that I have served for two and a half years the most stable and the most prestigious Radio and TV Network in thePhilippines.

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

                                                                        Very Truly Yours,

                                                                                    (Sgd.)

                                                                Leandro “Boy” Patalinghug[6][6]

          Unfortunately, both Ymbong and Patalinghug lost in the May 1998 elections.

          Later, Ymbong and Patalinghug both tried to come back to ABS-CBN Cebu. According to Luzon, he informed them that they cannot work there anymore because of company policy.  This was stressed even in subsequent meetings and they were told that the company was not allowing any exceptions.  ABS-CBN, however, agreed out of pure liberality to give them a chance to wind up their participation in the radio drama, Nagbabagang Langit, since it was rating well and to avoid an abrupt ending.  The agreed winding-up, however, dragged on for so long promptingLuzon to issue to Ymbong the following memorandum datedSeptember 14, 1998:

TO                   :           NESTOR YMBONG

FROM             :           DANTE LUZON

SUBJECT        :           AS STATED

DATE              :           14 SEPT. 1998

Please be reminded that your services as drama talent had already been automatically terminated when you ran for a local government position last election.

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

It has been decided therefore that all your drama participation shall be terminated effective immediately. However, your involvement as drama spinner/narrator of the drama “NAGBA[BA]GANG LANGIT” continues until its writer/director Mr. Leandro Patalinghug wraps it up one week upon receipt of a separate memo issued to him.[7][7]

          Ymbong in contrast contended that after the expiration of his leave of absence, he reported back to work as a regular talent and in fact continued to receive his salary.  On September 14, 1998, he received a memorandum stating that his services are being terminated immediately, much to his surprise.  Thus, he filed an illegal dismissal complaint[8][8] against ABS-CBN, Luzon and DYAB Station Manager Veneranda Sy.  He argued that the ground cited by ABS-CBN for his dismissal was not among those enumerated in the Labor Code, as amended.  And even granting without admitting the existence of the company policy supposed to have been violated, Ymbong averred that it was necessary that the company policy meet certain requirements before willful disobedience of the policy may constitute a just cause for termination.  Ymbong further argued that the company policy violates his constitutional right to suffrage.[9][9]

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

          ABS-CBN prayed for the dismissal of the complaints arguing that there is no employer-employee relationship between the company and Ymbong and Patalinghug.  ABS-CBN contended that they are not employees but talents as evidenced by their talent contracts.  However, notwithstanding their status, ABS-CBN has a standing policy on persons connected with the company whenever they will run for public office.[11][11]

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

            WHEREFORE, in the light of the foregoing, judgment is rendered finding the dismissal of the two complainants illegal. An order is issued directing respondent ABS[-]CBN to immediately reinstate complainants to their former positions without loss of seniority rights plus the payment of backwages in the amount of P200,000.00 to each complainant.

            All other claims are dismissed.

            SO ORDERED.[13][13]

          The Labor Arbiter found that there exists an employer-employee relationship between ABS-CBN and Ymbong and Patalinghug considering the stipulations in their appointment letters/talent contracts.  The Labor Arbiter noted particularly that the appointment letters/talent contracts imposed conditions in the performance of their work, specifically on attendance and punctuality, which effectively placed them under the control of ABS-CBN.  The Labor Arbiter likewise ruled that although the subject company policy is reasonable and not contrary to law, the same was not made known to Ymbong and Patalinghug and in fact was superseded by another one embodied in the March 25, 1998 Memorandum issued by Luzon.  Thus, there is no valid or authorized cause in terminating Ymbong and Patalinghug from their employment.

          In its memorandum of appeal[14][14] before the National Labor Relations Commission (NLRC), ABS-CBN contended that the Labor Arbiter has no jurisdiction over the case because there is no employer-employee relationship between the company and  Ymbong  and  Patalinghug,  and that Sy and Luzon mistakenly assumed that Ymbong and Patalinghug could just file a leave of absence since they are only talents and not employees.  In its Supplemental Appeal,[15][15] ABS-CBN insisted that Ymbong and Patalinghug were engaged as radio talents for DYAB dramas and personality programs and their contract is one between a self-employed contractor and the hiring party which is a standard practice in the broadcasting industry.  It also argued that the Labor Arbiter should not have made much of the provisions on Ymbong’s attendance and punctuality since such requirement is a dictate of the programming of the station, the slating of shows at regular time slots, and availability of recording studios – not an attempt to exercise control over the manner of his performance of the contracted anchor work within his scheduled spot on air.  As for the pronouncement that the company policy has already been superseded by the March 25, 1998 Memorandum issued by Luzon, the latter already clarified that it was the very policy he sought to enforce.  This matter was relayed by Luzon to Patalinghug when the latter disclosed his plans to join the 1998 elections while Ymbong only informed the company that he was campaigning for the administration ticket and the company had no inkling that he will actually run until the issue was already moot and academic.  ABS-CBN further contended that Ymbong and Patalinghug’s “reinstatement” is legally and physically impossible as the talent positions they vacated no longer exist.  Neither is there basis for the award of back wages since they were not earning a monthly salary but paid talent fees on a per production/per script basis.  Attached to the Supplemental Appeal is a Sworn Statement[16][16] of Luzon.

          On March 8, 2004, the NLRC rendered a decision[17][17] modifying the labor arbiter’s decision. The fallo of the NLRC decision reads:

WHEREFORE, premises considered, the decision of Labor Arbiter Nicasio C. Aninon dated14 July 1999is MODIFIED, to wit:

Ordering respondent ABS-CBN to reinstate complainant Ernesto G. Ymbong and to pay his full backwages computed from15 September 1998up to the time of his actual reinstatement.

SO ORDERED.[18][18]

The NLRC dismissed ABS-CBN’s Supplemental Appeal for being filed out of time.  The NLRC ruled that to entertain the same would be to allow the parties to submit their appeal on piecemeal basis, which is contrary to the agency’s duty to facilitate speedy disposition of cases.  The NLRC also held that ABS-CBN wielded the power of control over Ymbong and Patalinghug, thereby proving the existence of an employer-employee relationship between them.

As to the issue of whether they were illegally dismissed, the NLRC treated their cases differently.  In the case of Patalinghug, it found that he voluntarily resigned from employment onApril 21, 1998when he submitted his resignation letter.  The NLRC noted that although the tenor of the resignation letter is somewhat involuntary, he knew that it is the policy of the company that every person connected therewith should resign from his employment if he seeks an elected position in the government.  As to Ymbong, however, the NLRC ruled otherwise.  It ruled that the March 25, 1998 Memorandum merely states that an employee who seeks any elected position in the government will only merit the temporary suspension of his services.  It held that under the principle of social justice, the March 25, 1998 Memorandum shall prevail and ABS-CBN is estopped from enforcing the September 14, 1998 memorandum issued to Ymbong stating that his services had been automatically terminated when he ran for an elective position.

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

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

I.

RESPONDENT NLRC COMMITTED A GRAVE ABUSE OF DISCRETION AND SERIOUSLY MISAPPRECIATED THE FACTS IN NOT HOLDING THAT RESPONDENT YMBONG IS A FREELANCE RADIO TALENT AND MEDIA PRACTITIONER—NOT A “REGULAR EMPLOYEE” OF PETITIONER—TO WHOM CERTAIN PRODUCTION WORK HAD BEEN OUTSOURCED BY ABS-CBN CEBU UNDER AN INDEPENDENT CONTRACTORSHIP SITUATION, THUS RENDERING THE LABOR COURTS WITHOUT JURISDICTION OVER THE CASE IN THE ABSENCE OF EMPLOYMENT RELATIONS BETWEEN THE PARTIES.

II.

RESPONDENT NLRC COMMITTED A GRAVE ABUSE OF DISCRETION IN DECLARING RESPONDENT YMBONG TO BE A REGULAR EMPLOYEE OF PETITIONER AS TO CREATE A CONTRACTUAL EMPLOYMENT RELATION BETWEEN THEM WHEN NONE EXISTS OR HAD BEEN AGREED UPON OR OTHERWISE INTENDED BY THE PARTIES.

III.

EVEN ASSUMING THE ALLEGED EMPLOYMENT RELATION TO EXIST FOR THE SAKE OF ARGUMENT, RESPONDENT NLRC IN ANY CASE COMMITTED A GRAVE ABUSE OF DISCRETION IN NOT SIMILARLY UPHOLDING AND APPLYING COMPANY POLICY NO. HR-ER-016 INTHE CASE OF RESPONDENT YMBONG AND DEEMING HIM AS RESIGNED AND DISQUALIFIED FROM FURTHER ENGAGEMENT AS A RADIO TALENT IN ABS-CBN CEBU AS A CONSEQUENCE OF HIS CANDIDACY IN THE 1998 ELECTIONS, AS RESPONDENT NLRC HAD DONE IN THE CASE OF PATALINGHUG.

IV.

RESPONDENT NLRC COMMITTED A GRAVE ABUSE OF DISCRETION AND DENIED DUE PROCESS TO PETITIONER IN REFUSING TO CONSIDER ITS SUPPLEMENTAL APPEAL, DATED OCTOBER 18, 1999, “FOR BEING FILED OUT OF TIME” CONSIDERING THAT THE FILING OF SUCH A PLEADING IS NOT IN ANY CASE PROSCRIBED AND RESPONDENT NLRC IS AUTHORIZED TO CONSIDER ADDITIONAL EVIDENCE ON APPEAL; MOREOVER, TECHNICAL RULES OF EVIDENCE DO NOT APPLY IN LABOR CASES.

V.

RESPONDENT NLRC COMMITTED A GRAVE ABUSE OF DISCRETION IN GRANTING THE RELIEF OF REINSTATEMENT AND BACKWAGES TO RESPONDENT YMBONG SINCE HE NEVER OCCUPIED ANY “REGULAR” POSITION IN PETITIONER FROM WHICH HE COULD HAVE BEEN “ILLEGALLY DISMISSED,” NOR ARE ANY OF THE RADIO PRODUCTIONS IN WHICH HE HAD DONE TALENT WORK FOR PETITIONER STILL EXISTING. INDEED, THERE IS NO BASIS WHATSOEVER FOR THE AWARD OF BACKWAGES TO RESPONDENT YMBONG IN THE AMOUNT OF P200,000.00 CONSIDERING THAT, AS SHOWN BY THE UNCONTROVERTED EVIDENCE, HE WAS NOT EARNING A MONTHLY “SALARY” OF “P20,000.00,” AS HE FALSELY CLAIMS, BUT WAS PAID TALENT FEES ON A “PER PRODUCTION/PER SCRIPT” BASIS WHICH AVERAGED LESS THAN P10,000.00 PER MONTH IN TALENT FEES ALL IN ALL.[21][21]

          OnAugust 22, 2007, the CA rendered the assailed decision reversing and setting aside theMarch 8, 2004Decision andJune 21, 2004Resolution of the NLRC.  The CA declared Ymbong resigned from employment and not to have been illegally dismissed.  The award of full back wages in his favor was deleted accordingly.

          The CA ruled that ABS-CBN is estopped from claiming that Ymbong was not its employee after applying the provisions of Policy No. HR-ER-016 to him.  It noted that said policy is entitled “Policy on Employees Seeking Public Office” and the guidelines contained therein specifically pertain to employees and did not even mention talents or independent contractors.  It held that it is a complete turnaround on ABS-CBN’s part to later argue that Ymbong is only a radio talent or independent contractor and not its employee.  By applying the subject company policy on Ymbong, ABS-CBN had explicitly recognized him to be an employee and not merely an independent contractor.

          The CA likewise held that the subject company policy is the controlling guideline and therefore, Ymbong should be considered resigned from ABS-CBN.  WhileLuzonhas policy-making power as assistant radio manager, he had no authority to issue a memorandum that had the effect of repealing or superseding a subsisting policy.  Contrary to the findings of the Labor Arbiter, the subject company policy was effective at that time and continues to be valid and subsisting up to the present.  The CA cited Patalinghug’s resignation letter to buttress this conclusion, noting that Patalinghug openly admitted in his letter that his resignation was in line with the said company policy.  Since ABS-CBN applied Policy No. HR-ER-016 to Patalinghug, there is no reason not to apply the same regulation to Ymbong who was on a similar situation as the former.  Thus, the CA found that the NLRC overstepped its area of discretion to a point of grave abuse in declaring Ymbong to have been illegally terminated.  The CA concluded that there is no illegal dismissal to speak of in the instant case as Ymbong is considered resigned when he ran for an elective post pursuant to the subject company policy.

          Hence, this petition.

          Petitioner argues that the CA gravely erred: (1) in upholding Policy No. HR-ER-016; (2) in upholding the validity of the termination of Ymbong’s services; and (3) when it reversed the decision of the NLRC 4^th Division of Cebu City which affirmed the decision of Labor Arbiter Nicasio C. Aniñon.[22][22]

          Ymbong argues that the subject company policy is a clear interference and a gross violation of an employee’s right to suffrage.  He is surprised why it was easy for the CA to rule that Luzon’s memorandum ran counter to an existing policy while on the other end, it did not see that it was in conflict with the constitutional right to suffrage.  He also points out that the issuance of the March 25, 1998 Memorandum was precisely an exercise of the management power to which an employee like him must respect; otherwise, he will be sanctioned for disobedience or worse, even terminated.  He was not in a position to know which between the two issuances was correct and as far as he is concerned, the March 25, 1998 Memorandum superseded the subject company policy.  Moreover, ABS-CBN cannot disown acts of its officers most especially since it prejudiced his property rights.[23][23]

          As to the validity of his dismissal, Ymbong contends that the ground relied upon by ABS-CBN is not among the just and authorized causes provided in the Labor Code, as amended.  And even assuming the subject company policy passes the test of validity under the pretext of the right of the management to discipline and terminate its employees, the exercise of such right is not without bounds.  Ymbong avers that his automatic termination was a blatant disregard of his right to due process.  He was never asked to explain why he did not tender his resignation before he ran for public office as mandated by the subject company policy.[24][24]

          Ymbong likewise asseverates that both the Labor Arbiter and the NLRC were consistent in their findings that he was illegally dismissed.  It is settled that factual findings of labor administrative officials, if supported by substantial evidence, are accorded not only great respect but even finality.[25][25]

          ABS-CBN, for its part, counters that the validity of policies such as Policy No. HR-ER-016 has long been upheld by this Court which has ruled that a media company has a right to impose a policy providing that employees who file their certificates of candidacy in any election shall be considered resigned.[26][26]  Moreover, case law has upheld the validity of the exercise of management prerogatives even if they appear to limit the rights of employees as long as there is no showing that management prerogatives were exercised in a manner contrary to law.[27][27]  ABS-CBN contends that being the largest media and entertainment company in the country, its reputation stems not only from its ability to deliver quality entertainment programs but also because of neutrality and impartiality in delivering news.[28][28]

          ABS-CBN further argues that nothing in the company policy prohibits its employees from either accepting a public appointive position or from running for public office.  Thus, it cannot be considered as violative of the constitutional right of suffrage. Moreover, the Supreme Court has recognized the employer’s right to enforce occupational qualifications as long as the employer is able to show the existence of a reasonable business necessity in imposing the questioned policy.  Here, Policy No. HR-ER-016 itself states that it was issued “to protect the company from any public misconceptions” and “[t]o preserve its objectivity, neutrality and credibility.”  Thus, it cannot be denied that it is reasonable under the circumstances.[29][29]

          ABS-CBN likewise opposes Ymbong’s claim that he was terminated. ABS-CBN argues that on the contrary, Ymbong’s unilateral act of filing his certificate of candidacy is an overt act tantamount to voluntary resignation on his part by virtue of the clear mandate found in Policy No. HR-ER-016. Ymbong, however, failed to file his resignation and in fact misled his superiors by making them believe that he was going on leave to campaign for the administration candidates but in fact, he actually ran for councilor. He also claims to have fully apprised Luzonthrough a letter of his intention to run for public office, but he failed to adduce a copy of the same.[30][30]

          As to Ymbong’s argument that the CA should not have reversed the findings of the Labor Arbiter and the NLRC, ABS-CBN asseverates that the CA is not precluded from making its own findings most especially if upon its own review of the case, it has been revealed that the NLRC, in affirming the findings of the Labor Arbiter, committed grave abuse of discretion amounting to lack or excess of jurisdiction when it failed to apply the subject company policy in Ymbong’s case when it readily applied the same to Patalinghug.[31][31]

          Essentially, the issues to be resolved in the instant petition are: (1) whether Policy No. HR-ER-016 is valid; (2) whether the March 25, 1998 Memorandum issued byLuzonsuperseded Policy No. HR-ER-016; and (3) whether Ymbong, by seeking an elective post, is deemed to have resigned and not dismissed by ABS-CBN.

Policy No. HR-ER-016 is valid.

          This is not the first time that this Court has dealt with a policy similar to Policy No. HR-ER-016.  In the case of Manila Broadcasting Company v. NLRC,[32][32] this Court ruled:

What is involved in this case is an unwritten company policy considering any employee who files a certificate of candidacy for any elective or local office as resigned from the company.  Although §11(b) of R.A. No. 6646 does not require mass media commentators and announcers such as private respondent to resign from their radio or TV stations but only to go on leave for the duration of the campaign period, we think that the company may nevertheless validly require them to resign as a matter of policy.  In this case, the policy is justified on the following grounds:

Working for the government and the company at the same time is clearly disadvantageous and prejudicial to the rights and interest not only of the company but the public as well. In the event an employee wins in an election, he cannot fully serve, as he is expected to do, the interest of his employer. The employee has to serve two (2) employers, obviously detrimental to the interest of both the government and the private employer.

In the event the employee loses in the election, the impartiality and cold neutrality of an employee as broadcast personality is suspect, thus readily eroding and adversely affecting the confidence and trust of the listening public to employer’s station.[33][33]

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

Rationale:

ABS-CBN BROADCASTING CORPORATION strongly believes that it is to the best interest of the company to continuously remain apolitical. While it encourages and supports its employees to have greater political awareness and for them to exercise their right to suffrage, the company, however, prefers to remain politically independent and unattached to any political individual or entity.

Therefore, employees who [intend] to run for public office or accept political appointment should resign from their positions, in order to protect the company from any public misconceptions. To preserve its objectivity, neutrality and credibility, the company reiterates the following policy guidelines for strict implementation.

x x x x[34][34]  [Emphasis supplied.]

We have consistently held that so long as a company’s management prerogatives are exercised in good faith for the advancement of the employer’s interest and not for the purpose of defeating or circumventing the rights of the employees under special laws or under valid agreements, this Court will uphold them.[35][35]   In the instant case, ABS-CBN validly justified the implementation of Policy No. HR-ER-016.  It is well within its rights to ensure that it maintains its objectivity and credibility and freeing itself from any appearance of impartiality so that the confidence of the viewing and listening public in it will not be in any way eroded.  Even as the law is solicitous of the welfare of the employees, it must also protect the right of an employer to exercise what are clearly management prerogatives.  The free will of management to conduct its own business affairs to achieve its purpose cannot be denied.[36][36]

          It is worth noting that such exercise of management prerogative has earned a stamp of approval from no less than our Congress itself when onFebruary 12, 2001, it enacted Republic Act No. 9006, otherwise known as the “Fair Election Act.” Section 6.6 thereof reads:

            6.6. Any mass media columnist, commentator, announcer, reporter, on-air correspondent or personality who is a candidate for any elective public office or is a campaign volunteer for or employed or retained in any capacity by any candidate or political party shall be deemed resigned, if so required by their employer, or shall take a leave of absence from his/her work as such during the campaign period: Provided, That any media practitioner who is an official of a political party or a member of the campaign staff of a candidate or political party shall not use his/her time or space to favor any candidate or political party. [Emphasis and underscoring supplied.]

Policy No. HR-ER-016 was not superseded by the March 25, 1998 Memorandum

          The CA correctly ruled that though Luzon, as Assistant Station Manager for Radio of ABS-CBN, has policy-making powers in relation to his principal task of administering the network’s radio station in theCeburegion, the exercise of such power should be in accord with the general rules and regulations imposed by the ABS-CBN Head Office to its employees. Clearly, theMarch 25, 1998Memorandum issued byLuzonwhich only requires employees to go on leave if they intend to run for any elective position is in absolute contradiction with Policy No. HR-ER-016 issued by the ABS-CBN Head Office in Manila which requires the resignation, not only the filing of a leave of absence, of any employee who intends to run for public office.  Having been issued beyond the scope of his authority, the March 25, 1998 Memorandum is therefore void and did not supersede Policy No. HR-ER-016. 

Also worth noting is that Luzon in his Sworn Statement admitted the inaccuracy of his recollection of the company policy when he issued the March 25, 1998 Memorandum and stated therein that upon double-checking of the exact text of the policy statement and subsequent confirmation with the ABS-CBN Head Office in Manila, he learned that the policy required resignation for those who will actually run in elections because the company wanted to maintain its independence.  Since the officer who himself issued the subject memorandum acknowledged that it is not in harmony with the Policy issued by the upper management, there is no reason for it to be a source of right for Ymbong.

Ymbong is deemed resigned when he ran for councilor.

          As Policy No. HR-ER-016 is the subsisting company policy and notLuzon’s March 25, 1998 Memorandum, Ymbong is deemed resigned when he ran for councilor.

          We find no merit in Ymbong’s argument that “[his] automatic termination x x x was a blatant [disregard] of [his] right to due process” as he was “never asked to explain why he did not tender his resignation before he ran for public office as mandated by [the subject company policy].”[37][37] Ymbong’s overt act of running for councilor ofLapu-LapuCity is tantamount to resignation on his part. He was separated from ABS-CBN not because he was dismissed but because he resigned.  Since there was no termination to speak of, the requirement of due process in dismissal cases cannot be applied to Ymbong.  Thus, ABS-CBN is not duty-bound to ask him to explain why he did not tender his resignation before he ran for public office as mandated by the subject company policy.

          In addition, we do not subscribe to Ymbong’s claim that he was not in a position to know which of the two issuances was correct.  Ymbong most likely than not, is fully aware that the subsisting policy is Policy No. HR-ER-016 and not the March 25, 1998 Memorandum and it was for this reason that, as stated by Luzon in his Sworn Statement, he only told the latter that he will only campaign for the administration ticket and not actually run for an elective post.  Ymbong claims he had fully apprisedLuzonby letter of his plan to run and even filed a leave of absence but records are bereft of any proof of said claim.  Ymbong claims that the letter stating his intention to go on leave to run in the election is attached to his Position Paper as Annex “A,” a perusal of said pleading attached to his petition before this Court, however, show that Annex “A” was not his letter to Luzon but the September 14, 1998 Memorandum informing Ymbong that his services had been automatically terminated when he ran for a local government position.

          Moreover, as pointed out by ABS-CBN, had Ymbong been truthful to his superiors, they would have been able to clarify to him the prevailing company policy and inform him of the consequences of his decision in case he decides to run, asLuzondid in Patalinghug’s case.

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

With costs against petitioner.

SO ORDERED.

C E R T I F I C A T I O N

          Pursuant to Section 13, Article VIII of the 1987 Constitution, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.