SECOND DIVISION
[G.R. No. 111042. October 26, 1999]
AVELINO LAMBO and VICENTE BELOCURA, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION and J.C. TAILOR SHOP and/or JOHNNY CO, respondents.
D E C I S I O N
MENDOZA, J.:
This is a petition for certiorari
to set aside the decision[1] of the National Labor Relations Commission (NLRC)
which reversed the awards made by the Labor Arbiter in favor of petitioners,
except one for P4,992.00 to each, representing 13th month pay.
The facts are as follows.
Petitioners Avelino Lambo and
Vicente Belocura were employed as tailors by private respondents J.C. Tailor
Shop and/or Johnny Co on September 10, 1985 and March 3, 1985,
respectively. They worked from 8:00
a.m. to 7:00 p.m. daily, including Sundays and holidays. As in the case of the other 100 employees of
private respondents, petitioners were paid on a piece-work basis, according to
the style of suits they made.
Regardless of the number of pieces they finished in a day, they were
each given a daily pay of at least P64.00.
On January 17, 1989, petitioners
filed a complaint against private respondents for illegal dismissal and sought
recovery of overtime pay, holiday pay, premium pay on holiday and rest day,
service incentive leave pay, separation pay, 13th month pay, and attorney’s
fees.
After hearing, Labor Arbiter Jose
G. Gutierrez found private respondents guilty of illegal dismissal and
accordingly ordered them to pay petitioners’ claims. The dispositive portion of the Labor Arbiter’s decision reads:
WHEREFORE, in the light of the foregoing, judgment is hereby rendered declaring the complainants to have been illegally dismissed and ordering the respondents to pay the complainants the following monetary awards:
AVELINO
LAMBO VICENTE BELOCURA
I. BACKWAGES P64,896.00 P64,896.00
II. OVERTIME PAY 13,447.90 13,447.90
III. HOLIDAY PAY 1,399.30 1,399.30
IV. 13TH MONTH PAY 4,992.00 4,992.00
V. SEPARATION PAY 9,984.00 11,648.00
TOTAL P94,719.20 P96,383.20
= P191,102.40
Add: 10% Attorney’s Fees 19,110.24
GRAND TOTAL P210,212.64
= = = = = =
or a total aggregate amount of TWO HUNDRED
TEN THOUSAND TWO HUNDRED TWELVE AND 64/100 (P210,212.64).
All other claims are dismissed for lack of merit.
SO ORDERED.[2]
On appeal by private respondents,
the NLRC reversed the decision of the Labor Arbiter. It found that petitioners had not been dismissed from employment
but merely threatened with a closure of the business if they insisted on their
demand for a “straight payment of their minimum wage,” after petitioners, on
January 17, 1989, walked out of a meeting with private respondents and other
employees. According to the NLRC,
during that meeting, the employees voted to maintain the company policy of
paying them according to the volume of work finished at the rate of P18.00
per dozen of tailored clothing materials.
Only petitioners allegedly insisted that they be paid the minimum wage
and other benefits. The NLRC held
petitioners guilty of abandonment of work and accordingly dismissed their
claims except that for 13th month pay.
The dispositive portion of its decision reads:
WHEREFORE, in view of the foregoing, the appealed decision is
hereby vacated and a new one entered ordering respondents to pay each of the
complainants their 13th month pay in the amount of P4,992.00. All other monetary awards are hereby
deleted.
SO ORDERED.[3]
Petitioners allege that they were
dismissed by private respondents as they were about to file a petition with the
Department of Labor and Employment (DOLE) for the payment of benefits such as
Social Security System (SSS) coverage, sick leave and vacation leave. They deny that they abandoned their work.
The petition is meritorious.
First. There is no
dispute that petitioners were employees of private respondents although they
were paid not on the basis of time spent on the job but according to the
quantity and the quality of work produced by them. There are two categories of employees paid by results: (1) those whose time and performance are supervised
by the employer. (Here, there is an
element of control and supervision over the manner as to how the work is to be
performed. A piece-rate worker belongs
to this category especially if he performs his work in the company premises.);
and (2) those whose time and performance are unsupervised. (Here, the employer’s control is over the
result of the work. Workers on pakyao
and takay basis belong to this group.) Both classes of workers are paid per unit accomplished. Piece-rate payment is generally practiced in
garment factories where work is done in the company premises, while payment on pakyao
and takay basis is commonly observed in the agricultural industry,
such as in sugar plantations where the work is performed in bulk or in volumes
difficult to quantify.[4] Petitioners belong to the first category, i.e., supervised
employees.
In determining the existence of an
employer-employee relationship, the following elements must be considered: (1) the selection and engagement of the
employee; (2) the payment of wages; (3) the power of dismissal; and (4) the
power to control the employee’s conduct.[5] Of these elements, the most important criterion is
whether the employer controls or has reserved the right to control the employee
not only as to the result of the work but also as to the means and methods by
which the result is to be accomplished.[6]
In this case, private respondents
exercised control over the work of petitioners. As tailors, petitioners worked in the company’s premises from
8:00 a.m. to 7:00 p.m. daily, including Sundays and holidays. The mere fact that they were paid on a
piece-rate basis does not negate their status as regular employees of private
respondents. The term “wage” is broadly
defined in Art. 97 of the Labor Code as remuneration or earnings, capable of
being expressed in terms of money whether fixed or ascertained on a time, task,
piece or commission basis. Payment by
the piece is just a method of compensation and does not define the essence of
the relations.[7] Nor does the fact that petitioners are not covered by
the SSS affect the employer-employee relationship.
Indeed, the following factors show
that petitioners, although piece-rate workers, were regular employees of
private respondents: (1) within the
contemplation of Art. 280 of the Labor Code, their work as tailors was
necessary or desirable in the usual business of private respondents, which is
engaged in the tailoring business; (2) petitioners worked for private
respondents throughout the year, their employment not being dependent on a
specific project or season; and, (3) petitioners worked for private respondents
for more than one year.[8]
Second. Private
respondents contend, however, that petitioners refused to report for work after
learning that the J.C. Tailoring and Dress Shop Employees Union had demanded
their (petitioners’) dismissal for conduct unbecoming of employees. In support of their claim, private
respondents presented the affidavits[9] of Emmanuel Y. Caballero, president of the union, and
Amado Cabañero, member, that petitioners had not been dismissed by private
respondents but that practically all employees of the company, including the
members of the union had asked management to terminate the services of
petitioners. The employees allegedly
said they were against petitioners’ request for change of the mode of payment
of their wages, and that when a meeting was called to discuss this issue, a
petition for the dismissal of petitioners was presented, prompting the latter
to walk out of their jobs and instead file a complaint for illegal dismissal
against private respondents on January 17, 1989, even before all employees
could sign the petition and management could act upon the same.
To justify a finding of
abandonment of work, there must be proof of a deliberate and unjustified
refusal on the part of an employee to resume his employment. The burden of proof is on the employer to
show an unequivocal intent on the part of the employee to discontinue
employment.[10] Mere absence is not sufficient. It must be accompanied by manifest acts
unerringly pointing to the fact that the employee simply does not want to work
anymore.[11]
Private respondents failed to
discharge this burden. Other than the
self-serving declarations in the affidavits of their two employees, private
respondents did not adduce proof of overt acts of petitioners showing their
intention to abandon their work. On the
contrary, the evidence shows that petitioners lost no time in filing the case
for illegal dismissal against private respondent. This fact negates any intention on their part to sever their
employment relationship.[12] Abandonment is a matter of intention; it cannot be
inferred or presumed from equivocal acts.[13]
Third. Private
respondents invoke the compromise agreement,[14] dated March 2, 1993, between them and petitioner
Avelino Lambo, whereby in consideration of the sum of P10,000.00,
petitioner absolved private respondents from liability for money claims or any
other obligations.
To be sure, not all quitclaims are
per se invalid or against public policy. But those (1) where there is clear proof that the waiver was
wangled from an unsuspecting or gullible person or (2) where the terms of
settlement are unconscionable on their face are invalid. In these cases, the law will step in to
annul the questionable transaction.[15] However, considering that the Labor Arbiter had given
petitioner Lambo a total award of P94,719.20, the amount of P10,000.00
to cover any and all monetary claims is clearly unconscionable. As we have held in another case,[16] the subordinate position of the individual employee vis-a-vis
management renders him especially vulnerable to its blandishments,
importunings, and even intimidations, and results in his improvidently waiving
benefits to which he is clearly entitled.
Thus, quitclaims, waivers or releases are looked upon with disfavor for
being contrary to public policy and are ineffective to bar claims for the full
measure of the workers’ legal rights.[17] An employee who is merely constrained to accept the
wages paid to him is not precluded from recovering the difference between the
amount he actually received and that amount which he should have received.
Fourth. The Labor
Arbiter awarded backwages, overtime pay, holiday pay, 13th month pay,
separation pay and attorney’s fees, corresponding to 10% of the total monetary
awards, in favor of petitioners.
As petitioners were illegally
dismissed, they are entitled to reinstatement with backwages. Considering that petitioners were dismissed from
the service on January 17, 1989, i.e., prior to March 21, 1989,[18] the Labor Arbiter correctly applied the rule in the Mercury
Drug case,[19] according to which the recovery of backwages should
be limited to three years without qualifications or deductions. Any award in excess of three years is null
and void as to the excess.[20]
The Labor Arbiter correctly
ordered private respondents to give separation pay. Considerable time has lapsed since petitioners’ dismissal, so
that reinstatement would now be impractical and hardly in the best interest of
the parties. In lieu of reinstatement,
separation pay should be awarded to petitioners at the rate of one month salary
for every year of service, with a fraction of at least six (6) months of
service being considered as one (1) year.[21]
The awards for overtime pay,
holiday pay and 13th month pay are in accordance with our finding that
petitioners are regular employees, although paid on a piece-rate basis.[22] These awards are based on the following computation
of the Labor Arbiter:
AVELINO LAMBO
I. BACKWAGES: Jan. 17/89 - Jan. 17/92 = 36 mos.
P 64.00/day x 26
days =
1,664.00/mo. x 36 mos. = P 59,904.00
13th Mo. Pay:
P 1,664.00/yr. x 3 yrs. = 4, 992.00 P64,896.00
II. OVERTIME PAY: Jan. 17/86 - Jan. 17/89
Jan. 17/86 - April 30/87 = 15 mos. & 12 days =
(15 mos. x 26 days + 12 days) = 402 days
*2 hours = 25%
402 days x 2 hrs./day = 804 hrs.
P 32.00/day ÷ 8
hrs. =
4.00/hr. x 25% =
1.00/hr. + P4.00/hr. =
5.00/hr. x 804 hrs. =
P 4,020.00
May 1/87-Sept. 30/87 = 4 mos. & 26 days =
(4 mos. x 26 days + 26 days) = 130 days
130 days x 2 hrs./day = 260 hrs.
P 41.00/day ÷ 8
hrs. =
5.12/hr. x 25% =
1.28/hr. + P5.12/hr. =
6.40/hr. x 260 hrs. = P 1,664.00
Oct. 1/87-Dec. 13/87 = 2 mos. & 11 days =
(2 mos. x 26 days + 11 days) = 63 days
63 days x 2 hrs./day = 126 hrs.
P 49.00/day ÷ 8
hrs. =
6.12/hr. x 25% =
1.53/hr. + P6.12/hr. =
7.65/hr. x 126 hrs. =
P963.90
Dec. 14/87 - Jan. 17/89 = 13 mos. & 2 days =
(13 mos. x 26 days + 2 days) = 340 days
340 days x 2 hrs./day = 680 hrs.
P 64.00/day ÷ 8
hrs. =
8.00/hr. x 25% =
2.00/hr. + P8.00/hr. =
10.00/hr. x 680 hrs. =
P6,800.00 P13,447.90
III. HOLIDAY PAY: Jan.
17/86 - Jan. 17/89
Jan. 17/86 - April
30/87 = 12 RHs; 8 SHs
P 32.00/day x 200% =
64.00/day x 12
days = P768.00
32.00/day x 12
days = (384.00) P384.00
32.00/day x 30% =
9.60/day x 8 days = 76.80 460.80
May 1/87 - Sept. 30/87 = 3 RHs; 3 SHs
P 41.00/day x 200% =
82.00/day x 3 days = P246.00
41.00/day x 3 days = (123.00) P123.00
41.00/day x 30% =
12.30/day x 3 days = 36.90 159.90
Oct. 1/87 - Dec. 13/87 = 1 RH
P 49.00/day x 200% =
98.00/day x 1 day = P98.00
49.00/day x 1 day = (49.00) 49.00
Dec. 14/87 - Jan. 17/89 = 9 RHs; 8 SHs
P 64.00/day x
200% =
128.00/day x 9 days =
P1,152.00
64.00/day x 9 days =
(576.00) P 576.00
64.00/day x 30% =
19.20/day x 8 days = 153.60 729.60 1,399.30
IV. 13TH MO. PAY: Jan. 17/86 - Jan. 17/89 = 3 yrs.
P 64.00/day x 26
days =
1,664.00/yr. x 3 yrs. = 4,992.00
V. SEPARATION PAY: Sept. 10/85 - Jan. 17/92 = 6 yrs.
1,664.00/mo. x 6 yrs. = 9,984.00
TOTAL AWARD OF AVELINO LAMBO P94,719.20
= = = = = =
VICENTE BELOCURA
I. BACKWAGES: Jan. 17/89 - Jan. 17/92 = 36 mos.
Same computation as A. Lambo P64,896.00
II. OVERTIME PAY: Jan. 17/86 - Jan. 17/89
Same computation as A. Lambo 13,447.90
III. HOLIDAY PAY: Jan. 17/86 - Jan. 17/89
Same computation as A. Lambo 1,399.30
IV. 13TH MO. PAY: Jan. 17/86 - Jan. 17/89
Same computation as A. Lambo 4,992.00
V. SEPARATION PAY: March 3/85 - Jan. 17/92 = 7 yrs.
P1,664.00/mo. x 7 yrs.
= 11,648.00
TOTAL AWARD OF VICENTE BELOCURA P96,383.20
= = = = =
SUMMARY
AVELINO LAMBO VICENTE BELOCURA
I. BACKWAGES P64,896.00 P64,896.00
II. OVERTIME PAY 13,447.90 13,447.90
III. HOLIDAY PAY 1,399.30 1,399.30
IV. 13TH MO. PAY 4,992.00 4,992.00
V. SEPARATION PAY 9,984.00
11,648.00
TOTAL P94,719.20 P96,383.20
=
P191,102.40
ADD:
10% Attorney’s Fees 19,110.24
GRAND TOTAL P 210,212.64
= = = = = = =
Except for the award of attorney’s
fees in the amount of P19,110.24, the above computation is
affirmed. The award of attorney’s fees
should be disallowed, it appearing that petitioners were represented by the
Public Attorney’s Office. With regard to
petitioner Avelino Lambo, the amount of P10,000.00 paid to him under the
compromise agreement should be deducted from the total award of P94,719.20. Consequently, the award to each petitioner
should be as follows:
AVELINO
LAMBO VICENTE BELOCURA
I. BACKWAGES P64,896.00
P 64,896.00
II. OVERTIME PAY 13,447.90 13,447.90
III. HOLIDAY PAY 1,399.30 1,399.30
IV. 13TH MONTH PAY 4,992.00 4,992.00
V. SEPARATION PAY 9,984.00
11,648.00
P 94,719.20
Less 10,000.00
TOTAL P84,719.20 P96,383.20
GRAND TOTAL P181,102.40
= = = = = =
vvvvvvvvvv
WHEREFORE, the decision of the National Labor Relations
Commission is SET ASIDE and another one is RENDERED ordering private
respondents to pay petitioners the total amount of One Hundred Eighty-One
Thousand One Hundred Two Pesos and 40/100 (P181,102.40), as computed
above.
SO ORDERED.
Buena, and De Leon, JJ., concur.
Bellosillo, (Chairman), and Quisumbing, JJ., on official leave.
[1] Per Commissioner Bernabe S. Batuhan (Acting
Presiding Commissioner) and concurred in by Commissioner Irenea E. Ceniza.
[2] Decision dated August 28, 1992; Rollo,
pp. 29-30.
[3] NLRC Decision dated June 14, 1993; Rollo,
p. 38.
[4] 1 C.A. Azucena, THE LABOR CODE WITH COMMENTS
AND CASES 331 (1996).
[5] Santos v. NLRC, 293 SCRA 113 (1998).
[6] Makati Haberdashery, Inc. v. NLRC, 179
SCRA 448 (1989); Rosario Brothers, Inc. v. Ople, 131 SCRA 72 (1984); Dy
Keh Beng v. International Labor and Marine Union of the Phils., 90 SCRA
161 (1979).
[7] Villuga v. NLRC, 225 SCRA 537 (1993).
[8] Labor Congress of the Philippines v.
NLRC, 290 SCRA 509 (1998).
[9] Exhs.
4 and 6, NLRC Records, pp. 21-22.
[10] Metro Transit Organization, Inc. v. NLRC,
G.R. No. 119724, May 31, 1999, citing De Paul/King Philip Customs Tailor v.
NLRC, G.R. No. 129824, March 10, 1999.
[11] Kingsize
Manufacturing Corporation v. NLRC, 238 SCRA 349 (1994).
[12] Hua
Bee Shirt Factory v. NLRC, 186 SCRA 586 (1990).
[13] Pure
Blue Industries, Inc. v. NLRC, 337 Phil. 711 (1997).
[14] Annex B, Comment; Rollo, p. 47.
[15] Bogo-Medellin Sugarcane Planters Association,
Inc. v. NLRC, 296 SCRA 108 (1998).
[16] Martinez v. NLRC, G.R. No. 118743, October
12, 1998.
[17] Peftok Integrated Services, Inc. v.
NLRC, 293 SCRA 507 (1998).
[18] Effectivity of R.A. No. 6715, amending
Article 279 of the Labor Code.
[19] Mercury Drug Co., Inc. v. CIR, 155
Phil. 637 (1974).
[20] Bustamante
v. NLRC, 332 Phil. 833 (1996), cited in Highway Copra Traders v.
NLRC-Cagayan de Oro, 293 SCRA 350 (1998).
[21] Labor
Congress of the Philippines v. NLRC, supra.
[22] Supra.