Republic of the
SUPREME COURT
Manila
SECOND DIVISION
GREGORIO V.
TONGKO, G.R. No. 167622
Petitioner,
Present:
QUISUMBING,
J., Chairperson,
- versus - CARPIO MORALES,
TINGA,
VELASCO,
JR., and
BRION,
JJ.
THE MANUFACTURERS LIFE
INSURANCE CO. (PHILS.), INC. Promulgated:
and RENATO
A.
VERGEL DE
DIOS,
Respondents. November 7, 2008
x-----------------------------------------------------------------------------------------x
D E C I S I O N
VELASCO,
JR., J.:
The
Case
This Petition for Review on Certiorari
under Rule 45 seeks the reversal of the March 29, 2005 Decision[1] of
the Court of Appeals (CA) in CA-G.R. SP No. 88253, entitled The Manufacturers Life Insurance Co.
(Phils.), Inc. v. National Labor Relations Commission and Gregorio V. Tongko. The
assailed decision set aside the Decision dated
The Facts
Manufacturers
Life Insurance Co. (Phils.), Inc. (Manulife) is a domestic corporation engaged
in life insurance business. Renato A.
Vergel De Dios was, during the period material, its President and Chief Executive
Officer. Gregorio V. Tongko started his professional relationship with Manulife
on
In
the Agreement, it is provided that:
It is understood and agreed that the Agent is
an independent contractor and nothing contained herein shall be construed or
interpreted as creating an employer-employee relationship between the Company
and the Agent.
x x x x
a) The Agent shall canvass for applications
for Life Insurance, Annuities, Group policies and other products offered by the
Company, and collect, in exchange for provisional receipts issued by the Agent,
money due or to become due to the Company in respect of applications or
policies obtained by or through the Agent or from policyholders allotted by the
Company to the Agent for servicing, subject to subsequent confirmation of
receipt of payment by the Company as evidenced by an Official Receipt issued by
the Company directly to the policyholder.
x x x x
The Company may terminate this Agreement for
any breach or violation of any of the provisions hereof by the Agent by giving
written notice to the Agent within fifteen (15) days from the time of the
discovery of the breach. No waiver, extinguishment, abandonment, withdrawal or
cancellation of the right to terminate this Agreement by the Company shall be
construed for any previous failure to exercise its right under any provision of
this Agreement.
Either of the parties hereto may likewise
terminate his Agreement at any time without cause, by giving to the other party
fifteen (15) days notice in writing. x x x
In 1983, Tongko was named as a Unit Manager in Manulife’s Sales Agency
Organization. In 1990, he became a
Branch Manager. As the CA found, Tongko’s gross earnings from his work at
Manulife, consisting of commissions, persistency income, and management
overrides, may be summarized as follows:
January to
2001 - 6,214,737.11
2000 - 8,003,180.38
1999 - 6,797,814.05
1998 - 4,805,166.34
1997 - 2,822,620.00[3]
The problem started sometime in 2001, when Manulife instituted manpower
development programs in the regional sales management level. Relative thereto, De
Dios addressed a letter dated
The first step to
transforming Manulife into a big league player has been very clear – to
increase the number of agents to at least 1,000 strong for a start. This may
seem diametrically opposed to the way Manulife was run when you first joined
the organization. Since then, however, substantial changes have taken place in
the organization, as these have been influenced by developments both from
within and without the company.
x x x x
The issues around
agent recruiting are central to the intended objectives hence the need for a
Senior Managers’ meeting earlier last month when Kevin O’Connor, SVP – Agency,
took to the floor to determine from our senior agency leaders what more could
be done to bolster manpower development. At earlier meetings, Kevin had
presented information where evidently, your Region was the lowest performer (on
a per Manager basis) in terms of recruiting in 2000 and, as of today, continues
to remain one of the laggards in this area.
While discussions,
in general, were positive other than for certain comments from your end which
were perceived to be uncalled for, it became clear that a one-on-one meeting
with you was necessary to ensure that you and management, were on the same
plane. As gleaned from some of your previous comments in prior meetings (both
in group and one-on-one), it was not clear that we were proceeding in the same
direction.
Kevin held
subsequent series of meetings with you as a result, one of which I joined
briefly. In those subsequent meetings you reiterated certain views, the
validity of which we challenged and subsequently found as having no basis.
With such views
coming from you, I was a bit concerned that the rest of the Metro North
Managers may be a bit confused as to the directions the company was taking. For
this reason, I sought a meeting with everyone in your management team,
including you, to clear the air, so to speak.
This note is
intended to confirm the items that were discussed at the said Metro North
Region’s Sales Managers meeting held at the 7/F Conference room last 18
October.
x x x x
Issue # 2: “Some
Managers are unhappy with their earnings and would want to revert to the
position of agents.”
This is an often
repeated issue you have raised with me and with Kevin. For this reason, I
placed the issue on the table before the rest of your Region’s Sales Managers
to verify its validity. As you must have noted, no Sales Manager came forward
on their own to confirm your statement and it took you to name Malou Samson as
a source of the same, an allegation that Malou herself denied at our meeting
and in your very presence.
This only
confirms, Greg, that those prior comments have no solid basis at all. I now
believe what I had thought all along, that these allegations were simply meant
to muddle the issues surrounding the inability of your Region to meet its
agency development objectives!
Issue # 3: “Sales
Managers are doing what the company asks them to do but, in the process, they
earn less.”
x x x x
All the above
notwithstanding, we had your own records checked and we found that you made a
lot more money in the Year 2000 versus 1999. In addition, you also volunteered
the information to Kevin when you said that you probably will make more money
in the Year 2001 compared to Year 2000. Obviously, your above statement about
making “less money” did not refer to you but the way you argued this point had
us almost believing that you were spouting the gospel of truth when you were
not. x x x
x x x x
All of a sudden, Greg,
I have become much more worried about your ability to lead this group towards
the new direction that we have been discussing these past few weeks, i.e.,
Manulife’s goal to become a major agency-led distribution company in the
x x x x
I cannot afford to
see a major region fail to deliver on its developmental goals next year and so,
we are making the following changes in the interim:
1.
You will hire at your expense a competent
assistant who can unload you of much of the routine tasks which can be easily
delegated. This assistant should be so chosen as to complement your skills and
help you in the areas where you feel “may not be your cup of tea”.
You have stated,
if not implied, that your work as Regional Manager may be too taxing for you
and for your health. The above could solve this problem.
x x x x
2.
Effective immediately, Kevin and the rest of
the Agency Operations will deal with the North Star Branch (NSB) in autonomous fashion.
x x x
I have decided to
make this change so as to reduce your span of control and allow you to concentrate
more fully on overseeing the remaining groups under Metro North, your Central
Unit and the rest of the Sales Managers in Metro North. I will hold you solely
responsible for meeting the objectives of these remaining groups.
x x x x
The above changes
can end at this point and they need not go any further. This, however, is
entirely dependent upon you. But you have to understand that meeting corporate
objectives by everyone is primary and will not be compromised. We are meeting
tough challenges next year and I would want everybody on board. Any resistance
or holding back by anyone will be dealt with accordingly.
Subsequently, De Dios wrote Tongko another letter dated
It would appear, however, that despite the series of meetings and
communications, both one-on-one meetings between yourself and SVP Kevin
O’Connor, some of them with me, as well as group meetings with your Sales
Managers, all these efforts have failed in helping you align your directions
with Management’s avowed agency growth policy.
x x x x
On account thereof, Management is exercising its prerogative under
Section 14 of your Agents Contract as we are now issuing this notice of
termination of your Agency Agreement with us effective fifteen days from the
date of this letter.
Therefrom, Tongko filed a Complaint dated
In the Complaint, Tongko, in a bid to establish an employer-employee
relationship, alleged that De Dios gave him specific directives on how to
manage his area of responsibility in the latter’s letter dated
Such control was
certainly exercised by respondents over the herein complainant. It was Manulife
who hired, promoted and gave various assignments to him. It was the company who
set objectives as regards productions, recruitment, training programs and all
activities pertaining to its business. Manulife prescribed a Code of Conduct
which would govern in minute detail all aspects of the work to be undertaken by
employees, including the sales process, the underwriting process, signatures,
handling of money, policyholder service, confidentiality, legal and regulatory
requirements and grounds for termination of employment. The letter of Mr. De
Dios dated
Tongko bolstered his argument by citing Insular Life Assurance Co., Ltd. v. NLRC (4th Division)[7]
and Great Pacific Life Assurance
Corporation v. NLRC,[8]
which Tongko claimed to be similar to the instant case.
Tongko further claimed that his dismissal was without basis and that he
was not afforded due process. He also
cited the Manulife Code of Conduct by which his actions were controlled by the
company.
Manulife then filed a Position Paper with Motion to Dismiss dated
In a Decision dated
WHEREFORE, premises considered, judgment is hereby rendered DISMISSING
the instant complaint for lack of jurisdiction, there being no
employer-employee relationship between the parties.
SO ORDERED.
Tongko appealed the arbiter’s Decision to the NLRC which reversed the same
and rendered a Decision dated
The NLRC’s First Division, while finding an employer-employee
relationship between Manulife and Tongko applying the four-fold test, held Manulife
liable for illegal dismissal. It further stated that Manulife exercised control
over Tongko as evidenced by the letter dated
The above-mentioned letter shows the extent to which respondents
controlled complainant’s manner and means of doing his work and achieving the
goals set by respondents. The letter shows how respondents concerned themselves
with the manner complainant managed the Metro North Region as Regional Sales
Manager, to the point that respondents even had a say on how complainant
interacted with other individuals in the Metro North Region. The letter is in
fact replete with comments and criticisms on how complainant carried out his
functions as Regional Sales Manager.
More importantly, the letter contains an abundance of directives or
orders that are intended to directly affect complainant’s authority and manner
of carrying out his functions as Regional Sales Manager.[10]
x x x
Additionally,
the First Division also ruled that:
Further evidence
of [respondents’] control over complainant can be found in the records of the
case. [These] are the different codes of conduct such as the Agent Code of
Conduct, the Manulife Financial Code of Conduct, and the Manulife Financial
Code of Conduct Agreement, which serve as the foundations of the power of
control wielded by respondents over complainant that is further manifested in
the different administrative and other tasks that he is required to perform.
These codes of conduct corroborate and reinforce the display of respondents’
power of control in their
The fallo of the September 27, 2004 Decision
reads:
WHEREFORE, premises considered, the appealed Decision is
hereby reversed and set aside. We find
complainant to be a regular employee of respondent Manulife and that he was
illegally dismissed from employment by respondents.
In lieu of reinstatement, respondent Manulife is hereby
ordered to pay complainant separation pay as above set forth. Respondent Manulife is further ordered to pay
complainant backwages from the time he was dismissed on
x x x x
All other claims are hereby dismissed for utter lack of merit.
From this
Decision, Manulife filed a motion for reconsideration which was denied by the
NLRC First Division in a Resolution dated
Thus,
Manulife filed an appeal with the CA docketed as CA-G.R. SP No. 88253.
Thereafter, the CA issued the assailed Decision dated
WHEREFORE, premises considered, the present petition is
hereby GRANTED and the writ prayed for accordingly GRANTED. The assailed Decision dated September 27,
2004 and Resolution dated December 16, 2004 of the National Labor Relations
Commission in NLRC NCR Case No. 00-11-10330-2002 (NLRC NCR CA No. 040220-04)
are hereby ANNULLED and SET ASIDE. The
Decision dated
Hence, Tongko
filed this petition and presented the following issues:
A
The Court of Appeals committed grave abuse of
discretion in granting respondents’ petition for certiorari.
B
The Court of Appeals committed grave abuse of
discretion in annulling and setting aside the Decision dated
C
The Court of Appeals committed grave abuse of
discretion in annulling and setting aside the Decision dated
Restated,
the issues are: (1) Was there an employer-employee relationship between
Manulife and Tongko? and (2) If yes, was Manulife guilty of illegal dismissal?
The Court’s Ruling
This petition is meritorious.
Tongko Was An
Employee of Manulife
The basic issue of whether or not the
NLRC has jurisdiction over the case resolves itself into the question of whether
an employer-employee relationship existed between Manulife and Tongko. If no
employer-employee relationship existed between the two parties, then
jurisdiction over the case properly lies with the Regional Trial Court.
In the determination of whether an
employer-employee relationship exists between two parties, this Court applies
the four-fold test to determine the existence of the elements of such
relationship. In Pacific Consultants
International Asia, Inc. v. Schonfeld, the Court set out the elements of an
employer-employee relationship, thus:
Jurisprudence is firmly settled that whenever the existence of an employment relationship is in dispute, four elements constitute the reliable yardstick: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer’s power to control the employee’s conduct. It is the so-called “control test” which constitutes the most important index of the existence of the employer-employee relationship that is, whether the employer controls or has reserved the right to control the employee not only as to the result of the work to be done but also as to the means and methods by which the same is to be accomplished. Stated otherwise, an employer-employee relationship exists where the person for whom the services are performed reserves the right to control not only the end to be achieved but also the means to be used in reaching such end.[14]
The NLRC, for its part, applied the four-fold
test and found the existence of all the elements and declared Tongko an
employee of Manulife. The CA, on the other hand, found that the element of
control as an indicator of the existence of an employer-employee relationship
was lacking in this case. The NLRC and the CA based their rulings on the same
findings of fact but differed in their interpretations.
The NLRC arrived at its conclusion,
first, on the basis of the letter dated
1.
You will hire at your expense a competent
assistant who can unload you of much of the routine tasks which can be easily
delegated. x x x
x x
x x
This
assistant should be hired immediately.
2.
Effective immediately, Kevin and the rest
of the Agency Operations will deal with the North Star Branch (NSB) in
autonomous fashion x x x.
x x
x x
I
have decided to make this change so as to reduce your span of control and allow
you to concentrate more fully on overseeing the remaining groups under Metro
North, your Central Unit and the rest of the Sales Managers in Metro North. x x
x
3.
Any resistance or holding back by anyone
will be dealt with accordingly.
4.
I have been straightforward in this my
letter and I know that we can continue to work together… but it will have to be
on my terms. Anything else is unacceptable!
The NLRC
further ruled that the different codes of conduct that were applicable to
Tongko served as the foundations of the power of control wielded by Manulife
over Tongko that is further manifested in the different administrative and
other tasks that he was required to perform.
The NLRC
also found that Tongko was required to render exclusive service to Manulife,
further bolstering the existence of an employer-employee relationship.
Finally,
the NLRC ruled that Tongko was integrated into a management structure over
which Manulife exercised control, including the actions of its officers. The
NLRC held that such integration added to the fact that Tongko did not have his
own agency belied Manulife’s claim that Tongko was an independent contractor.
The CA, however,
considered the finding of the existence of an employer-employee relationship by
the NLRC as far too sweeping having as its only basis the letter dated November
6, 2001 of De Dios. The CA did not concur with the NLRC’s ruling that the
elements of control as pointed out by the NLRC are “sufficient indicia of
control that negates independent contractorship and conclusively establish an
employer-employee relationship between”[15]
Tongko and Manulife. The CA ruled that
there is no employer-employee relationship between Tongko and Manulife.
An impasse
appears to have been reached between the CA and the NLRC on the sole issue of
control over an employee’s conduct. It bears clarifying that such control not
only applies to the work or goal to be done but also to the means and methods
to accomplish it.[16] In Sonza
v. ABS-CBN Broadcasting Corporation, we explained that not all forms of
control would establish an employer-employee relationship, to wit:
Further, not every form of control that a party reserves to himself over the conduct of the other party in relation to the services being rendered may be accorded the effect of establishing an employer-employee relationship. The facts of this case fall squarely with the case of Insular Life Assurance Co., Ltd. vs. NLRC. In said case, we held that:
Logically, the line should be drawn between
rules that merely serve as guidelines towards the achievement of the mutually
desired result without dictating the means or methods to be employed in
attaining it, and those that control or fix the methodology and bind or
restrict the party hired to the use of such means. The first, which aim only to
promote the result, create no employer-employee relationship unlike the second,
which address both the result and the means used to achieve it.[17] (Emphasis supplied.)
We ruled in Insular Life Assurance Co., Ltd. v. NLRC (Insular) that:
It is, therefore, usual and
expected for an insurance company to promulgate a set of rules to guide its
commission agents in selling its policies that they may not run afoul of the
law and what it requires or prohibits. Of such a character are the rules which
prescribe the qualifications of persons who may be insured, subject insurance
applications to processing and approval by the Company, and also reserve to the
Company the determination of the premiums to be paid and the schedules of
payment. None of these really invades the agent’s contractual prerogative to
adopt his own selling methods or to sell insurance at his own time and
convenience, hence cannot justifiably be said to establish an employer-employee
relationship between him and the company.[18]
Hence, we ruled in Insular that no employer-employee
relationship existed therein. However, such ruling was tempered with the
qualification that had there been evidence that the company promulgated rules
or regulations that effectively controlled or restricted an insurance agent’s
choice of methods or the methods themselves in selling insurance, an
employer-employee relationship would have existed. In other words, the Court in
Insular in no way definitively held
that insurance agents are not employees of insurance companies, but rather made
the same a case-to-case basis. We held:
The respondents limit themselves to pointing
out that Basiao’s contract with the Company bound him to observe and conform to
such rules and regulations as the latter might from time to time prescribe. No showing has been made that any such
rules or regulations were in fact promulgated, much less that any rules existed
or were issued which effectively controlled or restricted his choice of methods
or the methods themselves of selling insurance. Absent such showing, the Court
will not speculate that any exceptions or qualifications were imposed on the
express provision of the contract leaving Basiao “... free to exercise his own
judgment as to the time, place and means of soliciting insurance.”[19]
(Emphasis supplied.)
There is no conflict between our
rulings in Insular and in Great Pacific Life Assurance Corporation.
We said in the latter case:
[I]t cannot be gainsaid that Grepalife had
control over private respondents’ performance as well as the result of their
efforts. A cursory reading of their
respective functions as enumerated in their contracts reveals that the company
practically dictates the manner by which their jobs are to be carried out. For
instance, the District Manager must properly account, record and document the
company’s funds spot-check and audit the work of the zone supervisors, conserve
the company’s business in the district through ‘reinstatements’, follow up the
submission of weekly remittance reports of the debit agents and zone
supervisors, preserve company property in good condition, train understudies
for the position of district manager, and maintain his quota of sales (the
failure of which is a ground for termination). On the other hand, a zone
supervisor must direct and supervise the sales activities of the debit agents
under him, conserve company property through “reinstatements”, undertake and
discharge the functions of absentee debit agents, spot-check the records of
debit agents, and insure proper documentation of sales and collections by the
debit agents.[20] (Emphasis supplied.)
Based on the foregoing cases, if the
specific rules and regulations that are enforced against insurance agents or
managers are such that would directly affect the means and methods by which
such agents or managers would achieve the objectives set by the insurance
company, they are employees of the insurance company.
In the instant case, Manulife had the
power of control over Tongko that would make him its employee. Several factors contribute
to this conclusion.
In the Agreement dated
The Agent hereby agrees to comply with all
regulations and requirements of the Company as herein provided as well as
maintain a standard of knowledge and competency in the sale of the Company’s
products which satisfies those set by the Company and sufficiently meets the
volume of new business required of Production Club membership.[21]
Under this provision, an agent of
Manulife must comply with three (3) requirements: (1) compliance with the
regulations and requirements of the company; (2) maintenance of a level of
knowledge of the company’s products that is satisfactory to the company; and
(3) compliance with a quota of new businesses.
Among the company regulations of
Manulife are the different codes of conduct such as the Agent Code of Conduct,
Manulife Financial Code of Conduct, and Manulife Financial Code of Conduct
Agreement, which demonstrate the power of control exercised by the company over
Tongko. The fact that Tongko was obliged
to obey and comply with the codes of conduct was not disowned by respondents.
Thus, with the company regulations
and requirements alone, the fact that Tongko was an employee of Manulife may
already be established. Certainly, these requirements controlled the means and
methods by which Tongko was to achieve the company’s goals.
More importantly, Manulife’s evidence
establishes the fact that Tongko was tasked to perform administrative duties
that establishes his employment with Manulife.
In its Comment (Re: Petition for
Review dated
In an Affidavit dated
4. On
1.
Refer and recommend prospective agents to Manulife
2.
Coach agents to become productive
3.
Regularly meet with, and coordinate activities of agents affiliated to
my region.
While Amada Toledo, a Branch Manager
of Manulife, stated in her Affidavit dated
3. In
January 1997, I was assigned as a Branch Manager (“BM”) of Manulife for the Metro
North Sector;
4. As
such BM, I render the following services:
a. Refer
and recommend prospective agents to Manulife;
b. Train
and coordinate activities of other commission agents;
c. Coordinate
activities of Agency Managers who, in turn, train and coordinate activites of
other commission agents;
d. Achieve
agreed production objectives in terms of Net Annualized Commissions and Case
Count and recruitment goals; and
e. Sell
the various products of Manulife to my personal clients.
While Ma. Lourdes Samson, a Unit
Manager of Manulife, stated in her Affidavit dated
3. In
1977, I was assigned as a Unit Manager (“UM”) of North Peaks Unit, North Star
Branch, Metro North Region;
4. As
such UM, I render the following services:
a. To
render or recommend prospective agents to be licensed,
trained and contracted to sell Manulife products
and who will be part of my Unit;
b. To
coordinate activities of the agents under my Unit in their daily, weekly and monthly selling activities, making sure that their respective
sales targets are met;
c. To
conduct periodic training sessions for my agents to further enhance their sales skills.
d. To
assist my agents with their sales activities by way of joint fieldwork, consultations and one-on- one evaluation and analysis of
particular accounts.
e. To
provide opportunities to motivate my agents to succeed
like conducting promos to increase sales activities
and encouraging them to be involved in company
and industry activities.
f. To
provide opportunities for professional growth to my agents by encouraging them to be a member of the LUCAP (Life Underwriters
Association of the
A comparison of the above functions and
those contained in the Agreement with those cited in Great Pacific Life Assurance Corporation[25] reveals
a striking similarity that would more than support a similar finding as in that
case. Thus, there was an employer-employee relationship between the parties.
Additionally, it must be pointed out
that the fact that Tongko was tasked with recruiting a certain number of
agents, in addition to his other administrative functions, leads to no other
conclusion that he was an employee of Manulife.
In his letter dated
Tongko Was Illegally Dismissed
In its Petition for Certiorari dated
In the instant case, private respondent,
despite the written reminder from Mr. De Dios refused to shape up and
altogether disregarded the latter’s advice resulting in his laggard performance
clearly indicative of his willful disobedience of the lawful orders of his
superior. x x x
x x x x
As private respondent has patently failed to
perform a very fundamental duty, and that is to yield obedience to all
reasonable rules, orders and instructions of the Company, as well as gross
failure to reach at least minimum quota, the termination of his engagement from
Manulife is highly warranted and therefore, there is no illegal dismissal to
speak of.
It is readily evident from the above-quoted
portions of Manulife’s petition that it failed to cite a single iota of
evidence to support its claims. Manulife did not even point out which order or
rule that Tongko disobeyed. More importantly, Manulife did not point out the
specific acts that Tongko was guilty of that would constitute gross and
habitual neglect of duty or disobedience. Manulife merely cited Tongko’s
alleged “laggard performance,” without substantiating such claim, and equated
the same to disobedience and neglect of duty.
We cannot, therefore, accept Manulife’s
position.
In
When there is no showing of a clear, valid
and legal cause for the termination of employment, the law considers the matter
a case of illegal dismissal and the burden is on the employer to prove that the
termination was for a valid or authorized cause. This
burden of proof appropriately lies on the shoulders of the employer and not on
the employee because a worker’s job has some of the characteristics of property
rights and is therefore within the constitutional mantle of
protection. No person shall be deprived of life, liberty or property
without due process of law, nor shall any person be denied the equal protection
of the laws.
Apropos thereto, Art. 277, par. (b), of the
Labor Code mandates in explicit terms that the burden of proving the validity
of the termination of employment rests on the employer. Failure to
discharge this evidential burden would necessarily mean that the dismissal
was not justified, and, therefore, illegal.[27]
We again ruled in Times Transportation
The law mandates that the burden of proving the validity of the termination of employment rests with the employer. Failure to discharge this evidentiary burden would necessarily mean that the dismissal was not justified, and, therefore, illegal. Unsubstantiated suspicions, accusations and conclusions of employers do not provide for legal justification for dismissing employees. In case of doubt, such cases should be resolved in favor of labor, pursuant to the social justice policy of our labor laws and Constitution.[28]
This burden of proof was clarified in
Community Rural Bank of San Isidro
(N.E.), Inc. v. Paez to mean substantial evidence, to wit:
The Labor Code provides that an employer may
terminate the services of an employee for just cause and this must be supported
by substantial evidence. The settled rule in administrative and quasi-judicial
proceedings is that proof beyond reasonable doubt is not
required in determining the legality of an employer’s dismissal of an employee,
and not even a preponderance of evidence is necessary as substantial evidence
is considered sufficient. Substantial evidence is more than a mere scintilla of
evidence or relevant evidence as a reasonable mind might accept as adequate to
support a conclusion, even if other minds, equally reasonable, might
conceivably opine otherwise.[29]
Here, Manulife failed to overcome
such burden of proof. It must be reiterated that Manulife even failed to
identify the specific acts by which Tongko’s employment was terminated much
less support the same with substantial evidence. To repeat, mere conjectures cannot work to
deprive employees of their means of livelihood. Thus, it must be concluded that
Tongko was illegally dismissed.
Moreover, as to Manulife’s failure to
comply with the twin notice rule, it reasons that Tongko not being its employee
is not entitled to such notices. Since we have ruled that Tongko is its
employee, however, Manulife clearly failed to afford Tongko said notices. Thus,
on this ground too, Manulife is guilty of illegal dismissal. In
Furthermore,
not only does our legal system dictate that the reasons for dismissing a worker
must be pertinently substantiated, it also mandates that the manner of
dismissal must be properly done, otherwise, the termination
itself is gravely defective and may be declared
unlawful.[30]
For breach of the due process requirements,
Manulife is liable to Tongko in the amount of PhP 30,000 as indemnity in the
form of nominal damages.[31]
Finally, Manulife raises the issue of
the correctness of the computation of the award to Tongko made by the NLRC by
claiming that Songco v. National Labor
Relations Commission[32]
is inapplicable to the instant case, considering that Songco was dismissed on
the ground of retrenchment.
An examination of Songco reveals that it may be applied to
the present case. In that case, Jose Songco was a salesman of F.E. Zuellig (M),
Inc. which terminated the services of Songco on the ground of retrenchment due
to financial losses. The issue raised to the Court, however, was whether
commissions are considered as part of wages in order to determine separation
pay. Thus, the fact that Songco was dismissed due to retrenchment does not
hamper the application thereof to the instant case. What is pivotal is that we
ruled in Songco that commissions are
part of wages for the determination of separation pay.
Article 279 of the Labor Code on
security of tenure pertinently provides that:
In
cases of regular employment the employer shall not terminate the services of an
employee except for a just cause or when authorized by this Title. An employee who is unjustly dismissed from
work shall be entitled to reinstatement without loss of seniority rights and
other privileges and to his full backwages, inclusive of allowances, and to his
other benefits or their monetary equivalent computed from the time his
compensation was withheld from him up to the time of his actual reinstatement.
In Triad Security & Allied Services, Inc. v. Ortega, Jr. (Triad), we thus stated that an illegally
dismissed employee shall be entitled to backwages and separation pay, if
reinstatement is no longer viable:
As the law now stands, an illegally dismissed
employee is entitled to two reliefs, namely: backwages and reinstatement. These are separate and distinct from each
other. However, separation pay is granted where reinstatement is no longer feasible
because of strained relations between the employee and the employer. In effect,
an illegally dismissed employee is entitled to either reinstatement, if viable,
or separation pay if reinstatement is no longer viable and backwages.[33]
Taking into consideration the cases
of Songco and Triad, we find correct the computation of the NLRC that the monthly
gross wage of Tongko in 2001 was PhP 518,144.76. For having been illegally dismissed, Tongko
is entitled to reinstatement with full backwages under Art. 279 of the Labor
Code. Due to the strained relationship
between Manulife and Tongko, reinstatement, however, is no longer
advisable. Thus, Tongko will be entitled
to backwages from
WHEREFORE, the
petition is hereby GRANTED. The
assailed
Manulife shall pay Tongko the
following:
(1) Full
backwages, inclusive of allowances and other benefits or their monetary
equivalent from
(2) Separation
pay of one (1) month salary for every year of service from 1977 up to 2001
amounting to PhP 12,435,474.24;
(3) Nominal
damages of PhP 30,000 as indemnity for violation of the due process
requirements; and
(4) Attorney’s
fees equivalent to ten percent (10%) of the aforementioned backwages and
separation pay.
Costs against respondent Manulife.
SO ORDERED.
PRESBITERO J. VELASCO, JR.
Associate
Justice
WE
CONCUR:
LEONARDO A. QUISUMBING
Associate Justice
Chairperson
Associate Justice
Associate Justice
ARTURO D. BRION
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.
LEONARDO A. QUISUMBING
Associate Justice
Chairperson
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.
REYNATO S. PUNO
Chief Justice
[1] Rollo, pp. 51-87. Penned by Associate Justice Martin S. Villarama, Jr. and concurred in by Associate Justices Regalado E. Maambong and Lucenito N. Tagle (now retired).
[2]
[3]
[4]
[5]
[6]
[7]
G.R. No. 119930,
[8]
G.R. Nos. 80750-51,
[9] Rollo, pp. 430-450.
[10]
[11]
[12]
[13]
[14]
G.R. No. 166920,
[16] Lakas ng Kapatirang Haligi ng Alyansa-Pinagbuklod ng Manggagawang Promo ng Burlingame v. Burlingame Corporation, G.R. No. 162833, June 15, 2007, 524 SCRA 690, 695.
[17]
G.R. No. 138051,
[18]
G.R. No. 84484,
[19]
[20] Supra note 8, at 698-699.
[21] Rollo, p. 451.
[22]
[23]
[24]
[25] Supra.
[26] Rollo, pp. 88-162.
[27]
G.R. No. 123184,
[28]
G.R. Nos. 148500-01,
[29]
G.R. No. 158707,
[30] Supra at 634.
[32] G.R.
Nos. 50999-51000,
[33]
G.R. No. 160871,