Republic of the PhilippinesSUPREME COURTManilaEN BANCG.R. No. L-69870 November 29, 1988NATIONAL SERVICE CORPORATION (NASECO) AND ARTURO L. PEREZ,petitioners,vs.THE HONORABLE THIRD DIVISION, NATIONAL LABOR RELATIONS COMMISSION, MINISTRY OF LABOR AND EMPLOYMENT, MANILA AND EUGENIA C. CREDO,respondents.G.R. No. 70295 November 29,1988EUGENIA C. CREDO,petitioner,vs.NATIONAL LABOR RELATIONS COMMISSION, NATIONAL SERVICES CORPORATION AND ARTURO L. PEREZ,respondents.The Chief Legal Counsel for respondents NASECO and Arturo L. Perez.Melchor R. Flores for petitioner Eugenia C. Credo.PADILLA,J.:Consolidated special civil actions for certiorari seeking to review the decision*of the Third Division, National Labor Relations Commission in Case No. 11-4944-83 dated 28 November 1984 and its resolution dated 16 January 1985 denying motions for reconsideration of said decision.Eugenia C. Credo was an employee of the National Service Corporation (NASECO), a domestic corporation which provides security guards as well as messengerial, janitorial and other similar manpower services to the Philippine National Bank (PNB) and its agencies. She was first employed with NASECO as a lady guard on 18 July 1975. Through the years, she was promoted to Clerk Typist, then Personnel Clerk until she became Chief of Property and Records, on 10 March 1980.1Sometime before 7 November 1983, Credo was administratively charged by Sisinio S. Lloren, Manager of Finance and Special Project and Evaluation Department of NASECO, stemming from her non-compliance with Lloren's memorandum, dated 11 October 1983, regarding certain entry procedures in the company's Statement of Billings Adjustment. Said charges alleged that Credo "did not comply with Lloren's instructions to place some corrections/additional remarks in the Statement of Billings Adjustment; and when [Credo] was called by Lloren to his office to explain further the said instructions, [Credo] showed resentment and behaved in a scandalous manner by shouting and uttering remarks of disrespect in the presence of her co-employees."2On 7 November 1983, Credo was called to meet Arturo L. Perez, then Acting General Manager of NASECO, to explain her side before Perez and NASECO's Committee on Personnel Affairs in connection with the administrative charges filed against her. After said meeting, on the same date, Credo was placed on "Forced Leave" status for 1 5 days, effective 8 November 1983.3Before the expiration of said 15-day leave, or on 18 November 1983, Credo filed a complaint, docketed as Case No. 114944-83, with the Arbitration Branch, National Capital Region, Ministry of Labor and Employment, Manila, against NASECO for placing her on forced leave, without due process.4Likewise, while Credo was on forced leave, or on 22 November 1983, NASECO's Committee on Personnel Affairs deliberated and evaluated a number of past acts of misconduct or infractions attributed to her.5As a result of this deliberation, said committee resolved:1. That, respondent [Credo] committed the following offenses in the Code of Discipline, viz:OFFENSE vs. Company Interest & PoliciesNo. 3 Any discourteous act to customer, officer and employee of client company or officer of the Corporation.OFFENSE vs. Public MoralNo. 7 Exhibit marked discourtesy in the course of official duties or use of profane or insulting language to any superior officer.OFFENSE vs. AuthorityNo. 3 Failure to comply with any lawful order or any instructions of a superior officer.2. That, Management has already given due consideration to respondent's [Credo] scandalous actuations for several times in the past. Records also show that she was reprimanded for some offense and did not question it. Management at this juncture, has already met its maximum tolerance point so it has decided to put an end to respondent's [Credo] being an undesirable employee.6The committee recommended Credo's termination, with forfeiture of benefits.7On 1 December 1983, Credo was called age to the office of Perez to be informed that she was being charged with certain offenses. Notably, these offenses were those which NASECO's Committee on Personnel Affairs already resolved, on 22 November 1983 to have been committed by Credo.In Perez's office, and in the presence of NASECO's Committee on Personnel Affairs, Credo was made to explain her side in connection with the charges filed against her; however, due to her failure to do so,8she was handed a Notice of Termination, dated 24 November 1983, and made effective 1 December 1983.9Hence, on 6 December 1983, Credo filed a supplemental complaint for illegal dismissal in Case No. 11-4944-83, alleging absence of just or authorized cause for her dismissal and lack of opportunity to be heard.10After both parties had submitted their respective position papers, affidavits and other documentary evidence in support of their claims and defenses, on 9 May 1984, the labor arbiter rendered a decision: 1) dismissing Credo's complaint, and 2) directing NASECO to pay Credo separation pay equivalent to one half month's pay for every year of service.11Both parties appealed to respondent National Labor Relations Commission (NLRC) which, on 28 November 1984, rendered a decision: 1) directing NASECO to reinstate Credo to her former position, or substantially equivalent position, with six (6) months' backwages and without loss of seniority rights and other privileges appertaining thereto, and 2) dismissing Credo's claim for attorney's fees, moral and exemplary damages. As a consequence, both parties filed their respective motions for reconsideration,12which the NLRC denied in a resolution of 16 January 1985.13Hence, the present recourse by both parties. In G.R. No. 68970, petitioners challenge as grave abuse of discretion the dispositive portion of the 28 November 1984 decision which ordered Credo's reinstatement with backwages.14Petitioners contend that in arriving at said questioned order, the NLRC acted with grave abuse of discretion in finding that: 1) petitioners violated the requirements mandated by law on termination, 2) petitioners failed in the burden of proving that the termination of Credo was for a valid or authorized cause, 3) the alleged infractions committed by Credo were not proven or, even if proved, could be considered to have been condoned by petitioners, and 4) the termination of Credo was not for a valid or authorized cause.15On the other hand, in G.R. No. 70295, petitioner Credo challenges as grave abuse of discretion the dispositive portion of the 28 November 1984 decision which dismissed her claim for attorney's fees, moral and exemplary damages and limited her right to backwages to only six (6) months.16As guidelines for employers in the exercise of their power to dismiss employees for just causes, the law provides that:Section 2. Notice of dismissal. Any employer who seeks to dismiss a worker shall furnish him a written notice stating the particular acts or omission constituting the grounds for his dismissal.xxx xxx xxxSection 5. Answer and Hearing. The worker may answer the allegations stated against him in the notice of dismissal within a reasonable period from receipt of such notice. The employer shall afford the worker ample opportunity to be heard and to defend himself with the assistance of his representative, if he so desires.Section 6. Decision to dismiss. The employer shall immediately notify a worker in writing of a decision to dismiss him stating clearly the reasons therefor.17These guidelines mandate that the employer furnish an employee sought to be dismissed two (2) written notices of dismissal before a termination of employment can be legally effected. These are the notice which apprises the employee of the particular acts or omissions for which his dismissal is sought and the subsequent notice which informs the employee of the employer's decision to dismiss him.Likewise, a reading of the guidelines in consonance with the express provisions of law on protection to labor18(which encompasses the right to security of tenure) and the broader dictates of procedural due process necessarily mandate that notice of the employer's decision to dismiss an employee, with reasons therefor, can only be issued after the employer has afforded the employee concerned ample opportunity to be heard and to defend himself.In the case at bar, NASECO did not comply with these guidelines in effecting Credo's dismissal. Although she was apprised and "given the chance to explain her side" of the charges filed against her, this chance was given so perfunctorily, thus rendering illusory Credo's right to security of tenure. That Credo was not given ample opportunity to be heard and to defend herself is evident from the fact that the compliance with the injunction to apprise her of the charges filed against her and to afford her a chance to prepare for her defense was dispensed in only a day. This is not effective compliance with the legal requirements aforementioned.The fact also that the Notice of Termination of Credo's employment (or the decision to dismiss her) was dated 24 November 1983 and made effective 1 December 1983 shows that NASECO was already bent on terminating her services when she was informed on 1 December 1983 of the charges against her, and that any hearing which NASECO thought of affording her after 24 November 1983 would merely be pro forma or an exercise in futility.Besides, Credo's mere non-compliance with Lorens memorandum regarding the entry procedures in the company's Statement of Billings Adjustment did not warrant the severe penalty of dismissal of the NLRC correctly held that:... on the charge of gross discourtesy, the CPA found in its Report, dated 22 November 1983 that, "In the process of her testimony/explanations she again exhibited a conduct unbecoming in front of NASECO Officers and argued to Mr. S. S. Lloren in a sarcastic and discourteous manner, notwithstanding, the fact that she was inside the office of the Acctg. General Manager." Let it be noted, however, that the Report did not even describe how the so called "conduct unbecoming" or "discourteous manner" was done by complainant. Anent the "sarcastic" argument of complainant, the purported transcript19of the meeting held on 7 November 1983 does not indicate any sarcasm on the part of complainant. At the most, complainant may have sounded insistent or emphatic about her work being more complete than the work of Ms. de Castro, yet, the complaining officer signed the work of Ms. de Castro and did not sign hers.As to the charge of insubordination, it may be conceded, albeit unclear, that complainant failed to place same corrections/additional remarks in the Statement of Billings Adjustments as instructed. However, under the circumstances obtaining, where complainant strongly felt that she was being discriminated against by her superior in relation to other employees, we are of the considered view and so hold, that a reprimand would have sufficed for the infraction, but certainly not termination from services.20As this Court has ruled:... where a penalty less punitive would suffice, whatever missteps may be committed by labor ought not to be visited with a consequence so severe. It is not only because of the law's concern for the working man. There is, in addition, his family to consider. Unemployment brings untold hardships and sorrows on those dependent on the wage-earner.21Of course, in justifying Credo's termination of employment, NASECO claims as additional lawful causes for dismissal Credo's previous and repeated acts of insubordination, discourtesy and sarcasm towards her superior officers, alleged to have been committed from 1980 to July 1983.22If such acts of misconduct were indeed committed by Credo, they are deemed to have been condoned by NASECO. For instance, sometime in 1980, when Credo allegedly "reacted in a scandalous manner and raised her voice" in a discussion with NASECO's Acting head of the Personnel Administration23no disciplinary measure was taken or meted against her. Nor was she even reprimanded when she allegedly talked 'in a shouting or yelling manner" with the Acting Manager of NASECO's Building Maintenance and Services Department in 198024or when she allegedly "shouted" at NASECO's Corporate Auditor "in front of his subordinates displaying arrogance and unruly behavior" in 1980, or when she allegedly shouted at NASECO's Internal Control Consultant in 1981.25But then, in sharp contrast to NASECO's penchant for ignoring the aforesaid acts of misconduct, when Credo committed frequent tardiness in August and September 1983, she was reprimanded.26Even if the allegations of improper conduct (discourtesy to superiors) were satisfactorily proven, NASECO's condonation thereof is gleaned from the fact that on 4 October 1983, Credo was given a salary adjustment for having performed in the job "at least [satisfactorily]"27and she was then rated "Very Satisfactory"28as regards job performance, particularly in terms of quality of work, quantity of work, dependability, cooperation, resourcefulness and attendance.Considering that the acts or omissions for which Credo's employment was sought to be legally terminated were insufficiently proved, as to justify dismissal, reinstatement is proper. For "absent the reason which gave rise to [the employee's] separation from employment, there is no intention on the part of the employer to dismiss the employee concerned."29And, as a result of having been wrongfully dismissed, Credo is entitled to three (3) years of backwages without deduction and qualification.30However, while Credo's dismissal was effected without procedural fairness, an award of exemplary damages in her favor can only be justified if her dismissal was effected in a wanton, fraudulent, oppressive or malevolent manner.31A judicious examination of the record manifests no such conduct on the part of management. However, in view of the attendant circumstances in the case, i.e., lack of due process in effecting her dismissal, it is reasonable to award her moral damages. And, for having been compelled to litigate because of the unlawful actuations of NASECO, a reasonable award for attorney's fees in her favor is in order.In NASECO's comment32in G.R. No. 70295, it is belatedly argued that the NLRC has no jurisdiction to order Credo's reinstatement. NASECO claims that, as a government corporation (by virtue of its being a subsidiary of the National Investment and Development Corporation (NIDC), a subsidiary wholly owned by the Philippine National Bank (PNB), which in turn is a government owned corporation), the terms and conditions of employment of its employees are governed by the Civil Service Law, rules and regulations. In support of this argument, NASECO citesNational Housing Corporation vs. JUCO,33where this Court held that "There should no longer be any question at this time that employees of government-owned or controlled corporations are governed by the civil service law and civil service rifles and regulations."It would appear that, in the interest of justice, the holding in said case should not be given retroactive effect, that is, to cases that arose before its promulgation on 17 January 1985. To do otherwise would be oppressive to Credo and other employees similarly situated, because under the same 1973 Constitution ,but prior to the ruling inNational Housing Corporation vs. Juco, this Court had recognized the applicability of the Labor Code to, and the authority of the NLRC to exercise jurisdiction over, disputes involving terms and conditions of employment in government owned or controlled corporations, among them, the National Service Corporation (NASECO).34Furthermore, in the matter of coverage by the civil service of government-owned or controlled corporations, the 1987 Constitution starkly varies from the 1973 Constitution, upon whichNational Housing Corporation vs. Jucois based. Under the 1973 Constitution, it was provided that:The civil service embraces every branch, agency, subdivision, and instrumentality of the Government, including every government-owned or controlled corporation. ...35On the other hand, the 1987 Constitution provides that:The civil service embraces all branches, subdivisions, instrumentalities, and agencies of the Government, including government-owned or controlled corporations with original charter.36(Emphasis supplied)Thus, the situations sought to be avoided by the 1973 Constitution and expressed by the Court in the National Housing . Corporation case in the following manner The infirmity of the respondents' position lies in its permitting a circumvention or emasculation of Section 1, Article XII-B of the constitution. It would be possible for a regular ministry of government to create a host of subsidiary corporations under the Corporation Code funded by a willing legislature. A government-owned corporation could create several subsidiary corporations. These subsidiary corporations would enjoy the best of two worlds. Their officials and employees would be privileged individuals, free from the strict accountability required by the Civil Service Decree and the regulations of the Commission on Audit. Their incomes would not be subject to the competitive restrains of the open market nor to the terms and conditions of civil service employment. Conceivably, all government-owned or controlled corporations could be created, no longer by special charters, but through incorporations under the general law. The Constitutional amendment including such corporations in the embrace of the civil service would cease to have application. Certainly, such a situation cannot be allowed to exist.37appear relegated to relative insignificance by the 1987 Constitutional provision that the Civil Service embraces government-owned or controlled corporationswith original charter; and, therefore, by clear implication, the Civil Service does not include government-owned or controlled corporations which are organized as subsidiaries of government-owned or controlled corporations under the general corporation law.The proceedings in the 1986 Constitutional Commission also shed light on the Constitutional intent and meaning in the use of the phrase "with original charter." ThusTHE PRESIDING OFFICER (Mr. Trenas) Commissioner Romulo is recognized.MR. ROMULO. I beg the indulgence of the Committee. I was reading the wrong provision.I refer to Section 1, subparagraph I which reads:The Civil Service embraces all branches, subdivisions, instrumentalities, and agencies of the government, including government-owned or controlled corporations.My query: Is Philippine Airlines covered by this provision? MR. FOZ. Will the Commissioner please state his previous question?MR. ROMULO. The phrase on line 4 of Section 1, subparagraph 1, under the Civil Service Commission, says: "including government-owned or controlled corporations.' Does that include a corporation, like the Philippine Airlines which is government-owned or controlled?MR. FOZ. I would like to throw a question to the Commissioner. Is the Philippine Airlines controlled by the government in the sense that the majority of stocks are owned by the government?MR. ROMULO. It is owned by the GSIS. So, this is what we might call a tertiary corporation. The GSIS is owned by the government. Would this be covered because the provision says "including government-owned or controlled corporations."MR. FOZ. The Philippine Airlines was established as a private corporation. Later on, the government, through the GSIS, acquired the controlling stocks. Is that not the correct situation?MR. ROMULO. That is true as Commissioner Ople is about to explain. There was apparently a Supreme Court decision that destroyed that distinction between a government-owned corporation created under the Corporation Law and a government-owned corporation created by its own charter.MR. FOZ. Yes, we recall the Supreme Court decision in the case of NHA vs. Juco to the effect that all government corporations irrespective of the manner of creation, whether by special charter or by the private Corporation Law, are deemed to be covered by the civil service because of the wide-embracing definition made in this section of the existing 1973 Constitution. But we recall the response to the question of Commissioner Ople that our intendment in this provision is just to give a general description of the civil service. We are not here to make any declaration as to whether employees of government-owned or controlled corporations are barred from the operation of laws, such as the Labor Code of the Philippines.MR. ROMULO. Yes.MR. OPLE. May I be recognized, Mr. Presiding Officer, since my name has been mentioned by both sides.MR. ROMULO. I yield part of my time.THE PRESIDING OFFICER (Mr.Trenas). Commissioner Ople is recognized.MR. OPLE. In connection with the coverage of the Civil Service Law in Section 1 (1), may I volunteer some information that may be helpful both to the interpellator and to the Committee. Following the proclamation of martial law on September 21, 1972, this issue of the coverage of the Labor Code of the Philippines and of the Civil Service Law almost immediately arose. I am, in particular, referring to the period following the coming into force and effect of the Constitution of 1973, where the Article on the Civil Service was supposed to take immediate force and effect. In the case of LUZTEVECO, there was a strike at the time. This was a government-controlled and government-owned corporation. I think it was owned by the PNOC with just the minuscule private shares left. So, the Secretary of Justice at that time, Secretary Abad Santos, and myself sat down, and the result of that meeting was an opinion of the Secretary of Justice which 9 became binding immediately on the government that government corporations with original charters, such as the GSIS, were covered by the Civil Service Law and corporations spun off from the GSIS, which we called second generation corporations functioning as private subsidiaries, were covered by the Labor Code. Samples of such second generation corporations were the Philippine Airlines, the ManilaHotel and the Hyatt. And that demarcation worked very well. In fact, all of these companies I have mentioned as examples, except for the Manila Hotel, had collective bargaining agreements. In the Philippine Airlines, there were, in fact, three collective bargaining agreements; one, for the ground people or the PALIA one, for the flight attendants or the PASAC and one for the pilots of the ALPAC How then could a corporation like that be covered by the Civil Service law? But, as the Chairman of the Committee pointed out, the Supreme Court decision in the case of NHA vs. Juco unrobed the whole thing. Accordingly, the Philippine Airlines, the Manila Hotel and the Hyatt are now considered under that decision covered by the Civil Service Law. I also recall that in the emergency meeting of the Cabinet convened for this purpose at the initiative of the Chairman of the Reorganization Commission, Armand Fabella, they agreed to allow the CBA's to lapse before applying the full force and effect of the Supreme Court decision. So, we were in the awkward situation when the new government took over. I can agree with Commissioner Romulo when he said that this is a problem which I am not exactly sure we should address in the deliberations on the Civil Service Law or whether we should be content with what the Chairman said that Section 1 (1) of the Article on the Civil Service is just a general description of the coverage of the Civil Service and no more.Thank you, Mr. Presiding Officer.MR. ROMULO. Mr. Presiding Officer, for the moment, I would be satisfied if the Committee puts on records that it is not their intent by this provision and the phrase "including government-owned or controlled corporations" to cover such companies as the Philippine Airlines.MR. FOZ. Personally, that is my view. As a matter of fact, when this draft was made, my proposal was really to eliminate, to drop from the provision, the phrase "including government- owned or controlled corporations."MR. ROMULO. Would the Committee indicate that is the intent of this provision?MR. MONSOD. Mr. Presiding Officer, I do not think the Committee can make such a statement in the face of an absolute exclusion of government-owned or controlled corporations. However, this does not preclude the Civil Service Law to prescribe different rules and procedures, including emoluments for employees of proprietary corporations, taking into consideration the nature of their operations. So, it is a general coverage but it does not preclude a distinction of the rules between the two types of enterprises.MR. FOZ. In other words, it is something that should be left to the legislature to decide. As I said before, this is just a general description and we are not making any declaration whatsoever.MR. MONSOD. Perhaps if Commissioner Romulo would like a definitive understanding of the coverage and the Gentleman wants to exclude government-owned or controlled corporations like Philippine Airlines, then the recourse is to offer an amendment as to the coverage, if the Commissioner does not accept the explanation that there could be a distinction of the rules, including salaries and emoluments.MR. ROMULO. So as not to delay the proceedings, I will reserve my right to submit such an amendment.xxx xxx xxxTHE PRESIDING OFFICE (Mr. Trenas) Commissioner Romulo is recognized.MR. ROMULO. On page 2, line 5, I suggest the following amendment after "corporations": Add a comma (,) and the phrase EXCEPT THOSE EXERCISING PROPRIETARY FUNCTIONS.THE PRESIDING OFFICER (Mr. Trenas). What does the Committee say?SUSPENSION OF SESSIONMR. MONSOD. May we have a suspension of the session?THE PRESIDING OFFICER (Mr. Trenas). The session is suspended.It was 7:16 p.m.RESUMPTION OF SESSIONAt 7:21 p.m., the session was resumed.THE PRESIDING OFFICER (Mr. Trenas). The session is resumed.Commissioner Romulo is recognized.MR. ROMULO. Mr. Presiding Officer, I am amending my original proposed amendment to now read as follows: "including government-owned or controlled corporations WITH ORIGINAL CHARTERS." The purpose of this amendment is to indicate that government corporations such as the GSIS and SSS, which have original charters, fall within the ambit of the civil service. However, corporations which are subsidiaries of these chartered agencies such as the Philippine Airlines, Manila Hotel and Hyatt are excluded from the coverage of the civil service.THE PRESIDING OFFICER (Mr. Trenas). What does the Committee say?MR. FOZ. Just one question, Mr. Presiding Officer. By the term "original charters," what exactly do we mean?MR. ROMULO. We mean that they were created by law, by an act of Congress, or by special law.MR. FOZ. And not under the general corporation law.MR. ROMULO. That is correct. Mr. Presiding Officer.MR. FOZ. With that understanding and clarification, the Committee accepts the amendment.MR. NATIVIDAD. Mr. Presiding officer, so those created by the general corporation law are out.MR. ROMULO. That is correct:38On the premise that it is the 1987 Constitution that governs the instant case because it is the Constitution in place at the time of decision thereof, the NLRC has jurisdiction to accord relief to the parties. As an admitted subsidiary of the NIDC, in turn a subsidiary of the PNB, the NASECO is a government-owned or controlled corporation without original charter.Dr. Jorge Bocobo, in his Cult of Legalism, cited by Mr. Justice Perfecto in his concurring opinion inGomez vs. Government Insurance Board(L-602, March 31, 1947, 44 O.G. No. 8, pp. 2687, 2694; also published in 78 Phil. 221) on the effectivity of the principle of social justice embodied in the 1935 Constitution, said:Certainly, this principle of social justice in our Constitution as generously conceived and so tersely phrased, was not included in the fundamental law as a mere popular gesture. It was meant to (be) a vital, articulate, compelling principle of public policy. It should be observed in the interpretation not only of future legislation, but also of all laws already existing on November 15, 1935. It was intended to change the spirit of our laws, present and future. Thus, all the laws which on the great historic event when the Commonwealth of the Philippines was born, were susceptible of two interpretations strict or liberal, against or in favor of social justice, now have to be construed broadly in order to promote and achieve social justice. This may seem novel to our friends, the advocates of legalism but it is the only way to give life and significance to the above-quoted principle of the Constitution. If it was not designed to apply to these existing laws, then it would be necessary to wait for generations until all our codes and all our statutes shall have been completely charred by removing every provision inimical to social justice, before the policy of social justice can become really effective. That would be an absurd conclusion. It is more reasonable to hold that this constitutional principle applies to all legislation in force on November 15, 1935, and all laws thereafter passed.WHEREFORE, in view of the foregoing, the challenged decision of the NLRC is AFFIRMED with modifications. Petitioners in G.R. No. 69870, who are the private respondents in G.R. No. 70295, are ordered to: 1) reinstate Eugenia C. Credo to her former position at the time of her termination, or if such reinstatement is not possible, to place her in a substantially equivalent position, with three (3) years backwages, from 1 December 1983, without qualification or deduction, and without loss of seniority rights and other privileges appertaining thereto, and 2) pay Eugenia C. Credo P5,000.00 for moral damages and P5,000.00 for attorney's fees.If reinstatement in any event is no longer possible because of supervening events, petitioners in G.R. No. 69870, who are the private respondents in G.R. No. 70295 are ordered to pay Eugenia C. Credo, in addition to her backwages and damages as above described, separation pay equivalent to one-half month's salary for every year of service, to be computed on her monthly salary at the time of her termination on 1 December 1983.SO ORDERED.Fernan, C.J., Melencio-Herrera, Paras, Feliciano, Gancayco, Bidin, Sarmiento, Cortes, Grio-Aquino, Medialdea and Regalado, JJ., concur.Narvasa, J., is on leave.Gutierrez, Jr., J., in the result.Separate OpinionsCRUZ,J.,concurring:While concurring with Mr. Justice Padilla's well-researched ponencia, I have to express once again my disappointment over still another avoidable ambiguity in the 1987 Constitution.It is clear now from the debates of the Constitutional Commission that the government-owned or controlled corporations included in the Civil Service are those with legislative charters. Excluded are its subsidiaries organized under the Corporation Code.If that was the intention, the logical thing, I should imagine, would have been to simply say so. This would have avoided the suggestion that there are corporations with duplicate charters as distinguished from those with original charters.All charters are original regardless of source unless they are amended. That is the acceptable distinction. Under the provision, however, the charter is still and always original even if amended as long it was granted by the legislature.It would have been clearer, I think, to say "including government owned or controlled corporations with legislative charters." Why this thought did not occur to the Constitutional Commission places one again in needless puzzlement.Separate OpinionsCRUZ,J.,concurring:While concurring with Mr. Justice Padilla's well-researched ponencia, I have to express once again my disappointment over still another avoidable ambiguity in the 1987 Constitution.It is clear now from the debates of the Constitutional Commission that the government-owned or controlled corporations included in the Civil Service are those with legislative charters. Excluded are its subsidiaries organized under the Corporation Code.If that was the intention, the logical thing, I should imagine, would have been to simply say so. This would have avoided the suggestion that there are corporations with duplicate charters as distinguished from those with original charters.All charters are original regardless of source unless they are amended. That is the acceptable distinction. Under the provision, however, the charter is still and always original even if amended as long it was granted by the legislature.It would have been clearer, I think, to say "including government owned or controlled corporations with legislative charters." Why this thought did not occur to the Constitutional Commission places one again in needless puzzlement.Footnotes* Signed by Guillermo C. Medina, Presiding Commissioner, Gabriel M. Gatchalian and Miguel B. Varela, Commissioners; the last one concurring in the result.1 Rollo (G.R. No. 69870), p. 1222 Ibid., p. 123.3Ibid.4Ibid., p. 22.5 Ibid., p. 62.6Ibid., p. 63.7Ibid.8 Ibid., p. 66.9 Ibid., p. 65.10Ibid., p. 25.11 Ibid., p. 104.12Ibid., p. 126.13Ibid., p. 148.14Ibid., p. 8.15 Ibid.16 Rollo, (G.R. No. 70295), p. 8.17 Rule XIV, Book V, Implementing Rules and Regulations.18 Constitution (1973), Art. II, Sec. 9; Constitution (1 987), Art. II, Sec. 18; Labor Code, Art. III.19 Rollo, (G.R. No. 69870), p. 57-59.20Ibid., p. 125.21 Almira vs. B.F. Goodrich Philippine, Inc., 58 SCRA 120.22 Rollo, (G.R. No. 69870), p. 2-5.23 Ibid., p. 13.24 Ibid.25 Ibid.26 Ibid.27 Ibid., p. 91.28 Ibid., p. 78.29 Pepito vs. Secretary of Labor, 98 SCRA 454.30Ibid.31 Civil Code, Art. 2232.32 Rollo (G.R. No. 70295), p. 125.33 134 SCRA 172.34 Philippine Air Line, Inc. vs. NLRC, 124 SCRA 583; Philippine Air Lines, Inc. vs. NLRC, 126 SCRA 223 and National Service Corporation vs. Leogardo, Jr., 130 SCRA 502.35 Constitution, 1973, Art. II-B, Sec. I(1).36 Constitution (1987), Art. IX-B, Sec. 2(l).37 134 SCRA 182-183.38 Record of the Constitutional Commission, Vol. I, pp. 583-585.

Republic of the PhilippinesSUPREME COURTManilaFIRST DIVISIONG.R. No. 98107 August 18, 1997BENJAMIN C. JUCO,petitioner,vs.NATIONAL LABOR RELATIONS COMMISSION and NATIONAL HOUSING CORPORATION,respondents.HERMOSISIMA, JR.,J.:This is a petition forcertiorarito set aside the Decision of the National Labor Relations Commission (NLRC) dated March 14, 1991, which reversed the Decision dated May 21, 1990 of Labor Arbiter Manuel R Caday, on the ground of lack of jurisdiction.Petitioner Benjamin C. Juco was hired as a project engineer of respondent National Housing Corporation (NHC) from November 16, 1970 to May 14, 1975. On May 14, 1975, he was separated from the service for having been implicated in a crime of theft and/or malversation of public funds.On March 25, 1977, petitioner filed a complaint for illegal dismissal against the NHC with the Department of Labor.On September 17, 1977, the Labor Arbiter rendered a decision dismissing the complaint on the ground that the NLRC had no jurisdiction over the case.1Petitioner then elevated the case to the NLRC which rendered a decision on December 28, 1982, reversing the decision of the Labor Arbiter.2Dissatisfied with the decision of the NLRC, respondent NHC appealed before this Court and on January 17, 1985, we rendered a decision, the dispositive portion thereof reads as follows:WHEREFORE, the petition is hereby GRANTED. The questioned decision of the respondent National Labor Relations Commission is SET ASIDE. The decision of the Labor Arbiter dismissing the case before it for lack of jurisdiction is REINSTATED.3On January 6, 1989, petitioner filed with the Civil Service Commission a complaint for illegal dismissal, with preliminary mandatory injunction.4On February 6, 1989, respondent NHC moved for the dismissal of the complaint on the ground that the Civil Service Commission has no jurisdiction over the case.5On April 11, 1989, the Civil Service Commission issued an order dismissing the complaint for lack of jurisdiction. It ratiocinated that:The Board finds the comment and/or motion to dismiss meritorious. It was not disputed that NHC is a government corporation without an original charter but organized/created under the Corporation Code.Article IX, Section 2 (1) of the 1987 Constitution provides:The civil service embraces all branches, subdivisions, instrumentalities and agencies of the Government, including government owned and controlled corporationswith original charters. (emphasis supplied)From the aforequoted constitutional provision, it is clear that respondent NHC is not within the scope of the civil service and is therefore beyond the jurisdiction of this Board. Moreover, it is pertinent to state that the 1987 Constitution was ratified and became effective on February 2, 1987.WHEREFORE, for lack of jurisdiction, the instant complaint is hereby dismissed.6On April 28, 1989, petitioner filed with respondent NLRC a complaint for illegal dismissal with preliminary mandatory injunction against respondent NHC.7On May 21, 1990, respondent NLRC thru Labor Arbiter Manuel R. Caday ruled that petitioner was illegally dismissed from his employment by respondent as there was evidence in the record that the criminal case against him was purely fabricated, prompting the trial court to dismiss the charges against him. Hence, he concluded that the dismissal was illegal as it was devoid of basis, legal or factual.He further ruled that the complaint is not barred by prescription considering that the period from which to reckon the reglementary period of four years should be from the date of the receipt of the decision of the Civil Service Commission promulgated on April 11, 1989. He also ratiocinated that:It appears . . . complainant filed the complaint for illegal dismissal with the Civil Service Commission on January 6, 1989 and the same was dismissed on April 11, 1989 after which on April 28, 1989, this case was filed by the complainant. Prior to that, this case was ruled upon by the Supreme Court on January 17, 1985 which enjoined the complainant to go to the Civil Service Commission which in fact, complainant did. Under the circumstances, there is merit on the contention that the running of the reglementary period of four (4) years was suspended with the filing of the complaint with the said Commission. Verily, it was not the fault of the respondent for failing to file the complaint as alleged by the respondent but due to, in the words of the complainant, a "legal knot" that has to be untangled.8Thereafter, the Labor Arbiter rendered a decision, the dispositive portion of which reads:Premises considered, judgment is hereby rendered declaring the dismissal of the complainant as illegal and ordering the respondent to immediately reinstate him to his former position without loss of seniority rights with full back wages inclusive of allowance and to his other benefits or equivalent computed from the time it is withheld from him when he was dismissed on March 27, 1977, until actually reinstated.9On June 1, 1990, respondent NHC filed its appeal before the NLRC and on March 14, 1991, the NLRC promulgated a decision which reversed the decision of Labor Arbiter Manuel R. Caday on the ground of lack of jurisdiction.10The primordial issue that confronts us is whether or not public respondent committed grave abuse of discretion in holding that petitioner is not governed by the Labor Code.Under the laws then in force, employees of government-owned and/or controlled corporations were governed by the Civil Service Law and not by the Labor Code. Hence,Article 277 of the Labor Code (PD 442) then provided:The terms and conditions of employment of all government employees, including employees of government-owned and controlled corporations shall be governed by the Civil Service Law, rules and regulations . . . .The 1973 Constitution, Article II-B, Section 1(1), on the other hand provided:The Civil Service embraces every branch, agency, subdivision and instrumentality of the government, including government-owned or controlled corporations.Although we had earlier ruled inNational Housing Corporation v.Juco,11that employees of government-owned and/or controlled corporations, whether created by special law or formed as subsidiaries under the general Corporation Law, are governed by the Civil Service Law and not by the Labor Code, this ruling has been supplanted by the 1987 Constitution. Thus, the said Constitution now provides:The civil service embraces all branches, subdivisions, instrumentalities, and agencies of the Government, including government owned or controlled corporations withoriginal charter. (Article IX-B, Section 2[1])InNational Service Corporation (NASECO) v.National Labor Relations Commission,12we had the occasion to apply the present Constitution in deciding whether or not the employees of NASECO are covered by the Civil Service Law or the Labor Code notwithstanding that the case arose at the time when the 1973 Constitution was still in effect. We ruled that the NLRC has jurisdiction over the employees of NASECO on the ground that it is the 1987 Constitution that governs because it is the Constitution in place at the time of the decision. Furthermore, we ruled that the new phrase "with original charter" means that government-owned and controlled corporations refer to corporations chartered by special law as distinguished from corporations organized under the Corporation Code. Thus, NASECO which had been organized under the general incorporation statute and a subsidiary of the National Investment Development Corporation, which in turn was a subsidiary of the Philippine National Bank, is exluded from the purview of the Civil Service Commission.We see no cogent reason to depart from the ruling in the aforesaid case.In the case at bench, the National Housing Corporation is a government owned corporation organized in 1959 in accordance with Executive Order No. 399, otherwise known as the Uniform Charter of Government Corporation, dated January 1, 1959. Its shares of stock are and have been one hundred percent (100%) owned by the Government from its incorporation under Act 1459, the former corporation law. The government entities that own its shares of stock are the Government Service Insurance System, the Social Security System, the Development Bank of the Philippines, the National Investment and Development Corporation and the People's Homesite and Housing Corporation.13Considering the fact that the NHA had been incorporated under Act 1459, the former corporation law, it is but correct to say that it is a government-owned or controlled corporation whose employees are subject to the provisions of the Labor Code. This observation is reiterated in the recent case ofTrade Union of the Philippines and Allied Services (TUPAS) v.National HousingCorporation,14where we held that the NHA is now within the jurisdiction of the Department of Labor and Employment, it being a government-owned and/or controlled corporation without an original charter. Furthermore, we also held that the workers or employees of the NHC (now NHA) undoubtedly have the right to form unions or employee's organization and that there is no impediment to the holding of a certification election among them as they are covered by the Labor Code.Thus, the NLRC erred in dismissing petitioner's complaint for lack of jurisdiction because the rule now is that the Civil Service now covers only government-owned or controlled corporations with original charters.15Having been incorporated under the Corporation Law, its relations with its personnel are governed by the Labor Code and come under the jurisdiction of the National Labor Relations Commission.One final point. Petitioners have been tossed from one forum to another for a simple illegal dismissal case. It is but apt that we put an end to his dilemna in the interest of justice.WHEREFORE, the decision of the NLRC in NLRC NCR-04-02036089 dated March 14, 1991 is hereby REVERSED and the Decision of the Labor Arbiter dated May 21, 1990 is REINSTATED.SO ORDERED.Padilla, Bellosillo, Vitug and Kapunan, JJ., concur.Footnotes1 Rollo, pp. 20-21.2 Id., pp. 22-26.3 Id., pp. 27-37.4 Id., pp. 38-42.5 Id., pp. 43-47.6 Id., p. 52.7 Id., pp. 53-58.8 Id., p. 68.9 Id., p. 69.10 Id., pp. 78-86.11 134 SCRA 172 (1985).12 168 SCRA 122 [1988].13 National Housing Corporation vs. Juco, 134 SCRA 172 (1985).14 173 SCRA 33 (1989).15 PNOC-Energy Development Corporation v. NLRC, 201 SCRA 487 [1991] The NHC (now NHA).

FIRST DIVISION[G.R. No. 124382.August 16, 1999]PASTOR DIONISIO V. AUSTRIA,petitioner, vs. HON. NATIONAL LABOR RELATIONS COMMISSION (Fourth Division), CEBU CITY, CENTRAL PHILIPPINE UNION MISSION CORPORATION OF THE SEVENTH-DAY ADVENTIST, ELDER HECTOR V. GAYARES, PASTORS REUBEN MORALDE, OSCAR L. ALOLOR, WILLIAM U. DONATO, JOEL WALES, ELY SACAY, GIDEON BUHAT, ISACHAR GARSULA, ELISEO DOBLE, PROFIRIO BALACY, DAVID RODRIGO, LORETO MAYPA, MR. RUFO GASAPO, MR. EUFRONIO IBESATE, MRS. TESSIE BALACY, MR. ZOSIMO KARA-AN, and MR. ELEUTERIO LOBITANA,respondents.D E C I S I O NKAPUNAN,J.:Subject to the instant petition forcertiorariunder Rule 65 of the Rules of Court is the Resolution[1]of public respondent National Labor Relations Commission (the NLRC), rendered on 23 January 1996, in NLRC Case No. V-0120-93, entitled Pastor Dionisio V. Austriavs. Central Philippine Union Mission Corporation of Seventh Day Adventists,et. al., which dismissed the case for illegal dismissal filed by the petitioner against private respondents for lack of jurisdiction.Private Respondent Central Philippine Union Mission Corporation of the Seventh-Day Adventists (hereinafter referred to as the SDA) is a religious corporation duly organized and existing under Philippine law and is represented in this case by the other private respondents, officers of the SDA.Petitioner, on the other hand, was a Pastor of the SDA until 31 October1991, when his services were terminated.The records show that petitioner Pastor Dionisio V. Austria worked with the SDA for twenty eight (28) years from 1963 to 1991.[2]He began his work with the SDA on 15 July 1963 as a literature evangelist, selling literature of the SDA over the island of Negros.From then on, petitioner worked his way up the ladder and got promoted several times.In January, 1968, petitioner became the Assistant Publishing Director in the West Visayan Mission of the SDA.In July, 1972, he was elevated to the position of Pastor in the West Visayan Mission covering the island of Panay, and the provinces of Romblon and Guimaras.Petitioner held the same position up to 1988.Finally, in 1989, petitioner was promoted as District Pastor of the Negros Mission of the SDA and was assigned at Sagay, Balintawak and Toboso, Negros Occidental, with twelve (12) churches under his jurisdiction.In January, 1991, petitioner was transferred to Bacolod City.He held the position of district pastor until his services were terminated on 31 October 1991.On various occasions from August up to October, 1991, petitioner received several communications[3]from Mr. Eufronio Ibesate, the treasurer of the Negros Mission asking him to admit accountability and responsibility for the church tithes and offerings collected by his wife, Mrs. Thelma Austria, in his district which amounted to P15,078.10, and to remit the same to the Negros Mission.In his written explanation dated 11 October 1991,[4]petitioner reasoned out that he should not be made accountable for the unremitted collections since it was private respondents Pastor Gideon Buhat and Mr. Eufronio Ibesate who authorized his wife to collect the tithes and offerings since he was very sick to do the collecting at that time.Thereafter, on 16 October 1991, at around 7:30 a.m., petitioner went to the office of Pastor Buhat, the president of the Negros Mission.During said call, petitioner tried to persuade Pastor Buhat to convene the Executive Committee for the purpose of settling the dispute between him and the private respondent, Pastor David Rodrigo.The dispute between Pastor Rodrigo and petitioner arose from an incident in which petitioner assisted his friend, Danny Diamada, to collect from Pastor Rodrigo the unpaid balance for the repair of the latters motor vehicle which he failed to pay to Diamada.[5]Due to the assistance of petitioner in collecting Pastor Rodrigos debt, the latter harbored ill-feelings against petitioner.When news reached petitioner that Pastor Rodrigo was about to file a complaint against him with the Negros Mission, he immediately proceeded to the office of Pastor Buhat on the date abovementioned and asked the latter to convene the Executive Committee.Pastor Buhat denied the request of petitioner since some committee members were out of town and there was no quorum.Thereafter, the two exchanged heated arguments.Petitioner then left the office of Pastor Buhat.While on his way out, petitioner overheard Pastor Buhat saying, Pastor daw inisog na ina iya (Pastor you are talking tough).[6]Irked by such remark, petitioner returned to the office of Pastor Buhat, and tried to overturn the latters table, though unsuccessfully, since it was heavy.Thereafter, petitioner banged the attache case of Pastor Buhat on the table, scattered the books in his office, and threw the phone.[7]Fortunately, private respondents Pastors Yonilo Leopoldo and Claudio Montao were around and they pacified both Pastor Buhat and petitioner.On 17 October 1991, petitioner received a letter[8]inviting him and his wife to attend the Executive Committee meeting at the Negros Mission Conference Room on 21 October 1991, at nine in the morning.To be discussed in the meeting were the non-remittance of church collection and the events that transpired on 16 October 1991.A fact-finding committee was created to investigate petitioner.For two (2) days, from October 21 and 22, the fact-finding committee conducted an investigation of petitioner.Sensing that the result of the investigation might be one-sided, petitioner immediately wrote Pastor Rueben Moralde, president of the SDA and chairman of the fact-finding committee, requesting that certain members of the fact-finding committee be excluded in the investigation and resolution of the case.[9]Out of the six (6) members requested to inhibit themselves from the investigation and decision-making, only two (2) were actually excluded, namely: Pastor Buhat and Pastor Rodrigo.Subsequently, on 29 October 1991, petitioner received a letter of dismissal[10]citing misappropriation of denominational funds, willful breach of trust, serious misconduct, gross and habitual neglect of duties, and commission of an offense against the person of employers duly authorized representative, as grounds for the termination of his services.Reacting against the adverse decision of the SDA, petitioner filed a complaint[11]on 14 November 1991, before the Labor Arbiter for illegal dismissal against the SDA and its officers and prayed for reinstatement with backwages and benefits, moral and exemplary damages and other labor law benefits.On 15 February 1993, Labor Arbiter Cesar D. Sideo rendered a decision in favor of petitioner, the dispositive portion of which reads thus:WHEREFORE, PREMISES CONSIDERED, respondents CENTRAL PHILIPPINE UNION MISSION CORPORATION OF THE SEVENTH-DAY ADVENTISTS (CPUMCSDA) and its officers, respondents herein, are hereby ordered to immediately reinstate complainant Pastor Dionisio Austria to his former position as Pastor of Brgy. Taculing, Progreso and Banago, Bacolod City, without loss of seniority and other rights and backwages in the amount of ONE HUNDRED FIFTEEN THOUSAND EIGHT HUNDRED THIRTY PESOS (P115,830.00) without deductions and qualificatioons.Respondent CPUMCSDA is further ordered to pay complainant the following:A.13th month pay-P21,060.00B.Allowance-P4,770.83C.Service IncentiveLeave Pay-P3,461.85D.Moral Damages-P50,000.00E.ExemplaryDamages-P25,000.00F.Attorneys Fee-P22,012.27SO ORDERED.[12]The SDA, through its officers, appealed the decision of the Labor Arbiter to the National Labor Relations Commission, Fourth Division, Cebu City.In a decision, dated 26 August 1994, the NLRC vacated the findings of the Labor Arbiter.The decretal portion of the NLRC decision states:WHEREFORE, the Decision appealed from is hereby VACATED and a new one ENTERED dismissing this case for want of merit.SO ORDERED.[13]Petitioner filed a motion for reconsideration of the above-named decision.On 18 July 1995, the NLRC issued a Resolution reversing its original decision.The dispositive portion of the resolution reads:WHEREFORE, premises considered, Our decision dated August 26, 1994 is VACATED and the decision of the Labor Arbiter dated February 15, 1993 is REINSTATED.SO ORDERED.[14]In view of the reversal of the original decision of the NLRC, the SDA filed a motion for reconsideration of the above resolution.Notable in the motion for reconsideration filed by private respondents is their invocation, for the first time on appeal, that the Labor Arbiter has no jurisdiction over the complaint filed by petitioner due to the constitutional provision on the separation of church and state since the case allegedly involved and ecclesiastical affair to which the State cannot interfere.The NLRC, without ruling on the merits of the case, reversed itself once again, sustained the argument posed by private respondents and, accordingly, dismissed the complaint of petitioner.The dispositive portion of the NLRC resolution dated 23 January 1996, subject of the present petition, is as follows:WHEREFORE, in view of all the foregoing, the instant motion for reconsideration is hereby granted.Accordingly, this case is hereby DISMISSED for lack of jurisdiction.SO ORDERED.[15]Hence, the recourse to this Court by petitioner.After the filing of the petition, the Court ordered the Office of the Solicitor General (the OSG) to file its comment on behalf of public respondent NLRC.Interestingly, the OSG filed a manifestation and motion in lieu of comment[16]setting forth its stand that it cannot sustain the resolution of the NLRC.In its manifestation, the OSG submits that the termination of petitioner of his employment may be questioned before the NLRC as the same is secular in nature, not ecclesiastical.After the submission of memoranda of all the parties, the case was submitted for decision.The issues to be resolved in this petition are:1)Whether or not the Labor Arbiter/NLRC has jurisdiction to try and decide the complaint filed by petitioner against the SDA;2)Whether or not the termination of the services of petitioner is an ecclesiastical affair, and, as such, involves the separation of church and state; and3)Whether or not such termination is valid.The first two issues shall be resolved jointly, since they are related.Private respondents contend that by virtue of the doctrine of separation of church and state, the Labor Arbiter and the NLRC have no jurisdiction to entertain the complaint filed by petitioner.Since the matter at bar allegedly involves the discipline of a religious minister, it is to be considered a purely ecclesiastical affair to which the State has no right to interfere.The contention of private respondents deserves scant consideration.The principle of separation of church and state finds no application in this case.The rationale of the principle of the separation of church and state is summed up in the familiar saying, Strong fences make good neighbors.[17]The idea advocated by this principle is to delineate the boundaries between the two institutions and thus avoid encroachments by one against the other because of a misunderstanding of the limits of their respective exclusive jurisdictions.[18]The demarcation line calls on the entities to render therefore unto Ceasar the things that are Ceasars and unto God the things that are Gods.[19]While the State is prohibited from interfering in purely ecclesiastical affairs, the Church is likewise barred from meddling in purely secular matters.[20]The case at bar does not concern an ecclesiastical or purely religious affair as to bar the State from taking cognizance of the same.An ecclesiastical affair is one that concerns doctrine, creed, or form or worship of the church, or the adoption and enforcement within a religious association of needful laws and regulations for the government of the membership, and the power of excluding from such associations those deemed unworthy of membership.[21]Based on this definition, an ecclesiastical affair involves the relationship between the church and its members and relate to matters of faith, religious doctrines, worship and governance of the congregation.To be concrete, examples of this so-called ecclesiastical affairs to which the State cannot meddle are proceedings for excommunication, ordinations of religious ministers, administration of sacraments and other activities with which attached religious significance.The case at bar does not even remotely concern any of the abovecited examples.While the matter at hand relates to the church and its religious minister it does notipso factogive the case a religious significance.Simply stated, what is involved here is the relationship of the church as an employer and the minister as an employee.It is purely secular and has no relation whatsoever with the practice of faith, worship or doctrines of the church.In this case, petitioner was not excommunicated or expelled from the membership of the SDA but was terminated from employment.Indeed, the matter of terminating an employee, which is purely secular in nature, is different from the ecclesiastical act of expelling a member from the religious congregation.As pointed out by the OSG in its memorandum, the grounds invoked for petitioners dismissal, namely: misappropriation of denominational funds, willful breach of trust, serious misconduct, gross and habitual neglect of duties and commission of an offense against the person of his employers duly authorize representative, are all based on Article 282 of the Labor Code which enumerates the just causes for termination of employment.[22]By this alone, it is palpable that the reason for petitioners dismissal from the service is not religious in nature.Coupled with this is the act of the SDA in furnishing NLRC with a copy of petitioners letter of termination.As aptly stated by the OSG, this again is an eloquent admission by private respondents that NLRC has jurisdiction over the case.Aside from these, SDA admitted in a certification[23]issued by its officer, Mr. Ibesate, that petitioner has been its employee for twenty-eight (28) years.SDA even registered petitioner with the Social Security System (SSS) as its employee.As a matter of fact, the workers records of petitioner have been submitted by private respondents as part of their exhibits.From all of these it is clear that when the SDA terminated the services of petitioner, it was merely exercising its management prerogative to fire an employee which it believes to be unfit for the job.As such, the State, through the Labor Arbiter and the NLRC, has the right to take cognizance of the case and to determine whether the SDA, as employer, rightfully exercised its management prerogative to dismiss an employee.This is in consonance with the mandate of the Constitution to afford full protection to labor.Under the Labor Code, the provision which governs the dismissal of employees, is comprehensive enough to include religious corporations, such as the SDA, in its coverage.Article 278 of the Labor Code on post-employment states that the provisions of this Title shall apply to all establishments or undertakings, whether for profit or not. Obviously, the cited article does not make any exception in favor of a religious corporation.This is made more evident by the fact that the Rules Implementing the Labor Code, particularly, Section 1, Rule 1, Book VI on the Termination of Employment and Retirement, categorically includes religious institutions in the coverage of the law, to wit:Section 1.Coverage. This Rule shall apply to all establishments and undertakings, whether operated for profit or not, including educational, medical, charitable andreligious institutions and organizations, in cases of regular employment with the exception of the Government and its political subdivisions including government-owned or controlled corporations.[24]With this clear mandate, the SDA cannot hide behind the mantle of protection of the doctrine of separation of church and state to avoid its responsibilities as an employer under the Labor Code.Finally, as correctly pointed out by petitioner, private respondents are estopped from raising the issue of lack of jurisdiction for the first time on appeal.It is already too late in the day for private respondents to question the jurisdiction of the NLRC and the Labor Arbiter since the SDA had fully participated in the trials and hearings of the case from start to finish.The Court has already ruled that the active participation of a party against whom the action was brought, coupled with his failure to object to the jurisdiction of the court or quasi-judicial body where the action is pending, is tantamount to an invocation of that jurisdiction and a willingness to abide by the resolution of the case and will bar said party from later on impugning the court or bodys jurisdiction.[25]Thus, the active participation of private respondents in the proceedings before the Labor Arbiter and the NLRC mooted the question on jurisdiction.The jurisdictional question now settled, we shall now proceed to determine whether the dismissal of petitioner was valid.At the outset, we note that as a general rule, findings of fact of administrative bodies like the NLRC are binding upon this Court.A review of such findings is justified, however, in instances when the findings of the NLRC differ from those of the labor arbiter, as in this case.[26]When the findings of NLRC do not agree with those of the Labor Arbiter, this Court must of necessity review the records to determine which findings should be preferred as more comformable to the evidentiary facts.[27]We turn now to the crux of the matter.In termination cases, the settled rule is that the burden of proving that the termination was for a valid or authorized cause rests on the employer.[28]Thus, private respondents must not merely rely on the weaknesses of petitioners evidence but must stand on the merits of their own defense.The issue being the legality of petitioners dismissal, the same must be measured against the requisites for a valid dismissal, namely: (a) the employee must be afforded due process, i.e., he must be given an opportunity to be heard and to defend himself, and; (b) the dismissal must be for a valid cause as provided in Article 282 of the Labor Code.[29]Without the concurrence of this twin requirements, the termination would, in the eyes of the law, be illegal.[30]Before the services of an employee can be validly terminated, Article 277 (b) of the Labor Code and Section 2, Rule XXIII, Book V of the Rules Implementing the Labor Code further require the employer to furnish the employee with two (2) written notices, to wit: (a) a written notice served on the employee specifying the ground or grounds for termination, and giving to said employee reasonable opportunity within which to explain his side; and, (b) a written notice of termination served on the employee indicating that upon due consideration of all the circumstances, grounds have been established to justify his termination.The first notice, which may be considered as the proper charge, serves to apprise the employee of the particular acts or omissions for which his dismissal is sought.[31]The second notice on the other hand seeks to inform the employee of the employers decision to dismiss him.[32]This decision, however, must come only after the employee is given a reasonable period from receipt of the first notice within which to answer the charge and ample opportunity to be heard and defend himself with the assistance of a representative, if he so desires.[33]This is in consonance with the express provision of the law on the protection to labor and the broader dictates of procedural due process.[34]Non-compliance therewith is fatal because these requirements are conditionssine quo nonbefore dismissal may be validly effected.[35]Private respondent failed to substantially comply with the above requirements.With regard to the first notice, the letter,[36]dated 17 October 1991, which notified petitioner and his wife to attend the meeting on 21 October 1991, cannot be construed as the written charge required by law.A perusal of the said letter reveals that it never categorically stated the particular acts or omissions on which petitioners impending termination was grounded.In fact, the letter never even mentioned that petitioner would be subject to investigation.The letter merely mentioned that petitioner and his wife were invited to a meeting wherein what would be discussed were the alleged unremitted church tithes and the events that transpired on 16 October 1991.Thus, petitioner was surprised to find out that the alleged meeting turned out to be an investigation.From the tenor of the letter, it cannot be presumed that petitioner was actually on the verge of dismissal.The alleged grounds for the dismissal of petitioner from the service were only revealed to him when the actual letter of dismissal was finally issued.For this reason, it cannot be said that petitioner was given enough opportunity to properly prepare for his defense.While admittedly, private respondents complied with the second requirement, the notice of termination, this does not cure the initial defect of lack of the proper written charge required by law.In the letter of termination,[37]dated 29 October 1991, private respondents enumerated the following as grounds for the dismissal of petitioner, namely:misappropriation of denominational funds, willful breach of trust, serious misconduct, gross and habitual neglect of duties, and commission of an offense against the person of employers duly authorized representative.Breach of trust and misappropriation of denominational funds refer to the alleged failure of petitioner to remit to the treasurer of the Negros Mission tithes, collections and offerings amounting to P15,078.10 which were collected by his wife, Mrs. Thelma Austria, in the churches under his jurisdiction.On the other hand, serious misconduct and commission of an offense against the person of the employers duly authorized representative pertain to the 16 October 1991 incident wherein petitioner allegedly committed an act of violence in the office of Pastor Gideon Buhat.The final ground invoked by private respondents is gross and habitual neglect of duties allegedly committed by petitioner.We cannot sustain the validity of dismissal based on the ground of breach of trust.Private respondents allege that they have lost their confidence in petitioner for his failure, despite demands, to remit the tithes and offerings amounting to P15,078.10, which were collected in his district.A careful study of the voluminous records of the case reveals that there is simply no basis for the alleged loss of confidence and breach of trust.Settled is the rule that under Article 282 (c) of the Labor Code, the breach of trust must be willful.A breach is willful if it is done intentionally, knowingly and purposely, without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently.[38]It must rest on substantial grounds and not on the employers arbitrariness, whims, caprices or suspicion; otherwise, the employee would eternally remain at the mercy of the employer.[39]It should be genuine and not simulated.[40]This ground has never been intended to afford an occasion for abuse, because of its subjective nature.The records show that there were only six (6) instances when petitioner personally collected and received from the church treasurers the tithes, collections, and donations for the church.[41]The stenographic notes on the testimony of Naomi Geniebla, the Negros Mission Church Auditor and a witness for private respondents, show that Pastor Austria was able to remit all his collections to the treasurer of the Negros Mission.[42]Though private respondents were able to establish that petitioner collected and received tithes and donations several times, they were not able to establish that petitioner failed to remit the same to the Negros Mission, and that he pocketed the amount and used it for his personal purpose.In fact, as admitted by their own witness, Naomi Geniebla, petitioner remitted the amounts which he collected to the Negros Mission for which corresponding receipts were issued to him.Thus, the allegations of private respondents that petitioner breached their trust have no leg to stand on.In a vain attempt to support their claim of breach of trust, private respondents try to pin on petitioner the alleged non-remittance of the tithes collected by his wife.This argument deserves little consideration.First of all, as proven by convincing and substantial evidence consisting of the testimonies of the witnesses for private respondents who are church treasurers, it was Mrs. Thelma Austria who actually collected the tithes and donations from them, and, who failed to remit the same to the treasurer of the Negros Mission.The testimony of these church treasurers were corroborated and confirmed by Ms. Geniebla and Mr. Ibesate, officers of the SDA.Hence, in the absence of conspiracy and collusion, which private respondents failed to demonstrate, between petitioner and his wife, petitioner cannot be made accountable for the alleged infraction committed by his wife.After all, they still have separate and distinct personalities.For this reason, the Labor Arbiter found it difficult to see the basis for the alleged loss of confidence and breach of trust.The Court does not find any cogent reason, therefore, to digress from the findings of the Labor Arbiter which is fully supported by the evidence on record.With respect to the grounds of serious misconduct and commission of an offense against the person of the employers duly authorized representative, we find the same unmeritorious and, as such, do not warrant petitioners dismissal from the service.Misconduct has been defined as improper or wrong conduct.It is the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error in judgment.[43]For misconduct to be considered serious it must be of such grave and aggravated character and not merely trivial or unimportant.[44]Based on this standard, we believe that the act of petitioner in banging the attache case on the table, throwing the telephone and scattering the books in the office of Pastor Buhat, although improper, cannot be considered as grave enough to be considered as serious misconduct.After all, as correctly observed by the Labor Arbiter, though petitioner committed damage to property, he did not physically assault Pastor Buhat or any other pastor present during the incident of 16 October 1991.In fact, the alleged offense committed upon the person of the employers representatives was never really established or proven by private respondents.Hence, there is no basis for the allegation that petitioners act constituted serious misconduct or that the same was an offense against the person of the employers duly authorized representative.As such, the cited actuation of petitioner does not justify the ultimate penalty of dismissal from employment.While the Constitution does not condone wrongdoing by the employee, it nevertheless urges a moderation of the sanctions that may be applied to him in light of the many disadvantages that weigh heavily on him like an albatross on his neck.[45]Where a penalty less punitive would suffice, whatever missteps may have been committed by the worker ought not be visited with a consequence so severe such as dismissal from employment.[46]For the foregoing reasons, we believe that the minor infraction committed by petitioner does not merit the ultimate penalty of dismissal.The final ground alleged by private respondents in terminating petitioner, gross and habitual neglect of duties, does not requires an exhaustive discussion.Suffice it to say that all private respondents had were allegations but not proof.Aside from merely citing the said ground, private respondents failed to prove culpability on the part of petitioner.In fact, the evidence on record shows otherwise.Petitioners rise from the ranks disclose that he was actually a hard-worker.Private respondents evidence,[47]which consisted of petitioners Workers Reports, revealed how petitioner travelled to different churches to attend to the faithful under his care.Indeed, he labored hard for the SDA, but, in return, he was rewarded with a dismissal from the service for a non-existent cause.In view of the foregoing, we sustain the finding of the Labor Arbiter that petitioner was terminated from service without just or lawful cause.Having been illegally dismissed, petitioner is entitled to reinstatement to his former position without loss of seniority right[48]and the payment of full backwages without any deduction corresponding to the period from his illegal dismissal up to actual reinstatement.[49]WHEREFORE, the petition forcertiorariis GRANTED.The challenged Resolution of public respondent National Labor Relations Commission, rendered on 23 January 1996, is NULLIFIED and SET ASIDE.The Decision of the Labor Arbiter, dated 15 February 1993, is reinstated and hereby AFFIRMED.SO ORDERED.Davide, Jr., C.J., (Chairman), Puno, Pardo,andYnares-Santiago, JJ.,concur.

[1]Penned by Presiding Commissioner Irenea E. Ceniza and concurred in by Commissioner Amorito V. Caete.Commissioner Bernabe S. Batuhan dissented.Records, Vol. 1, p. 901.[2]Exhibit B for petitioner,Id., at 467.[3]Exhibits 5, 6, 7, 8, and 9 for private respondents,Id., at 355 359.[4]Exhibit M for petitioner,Id., at 252.[5]Decision of the labor arbiter,Id., at 489, 531.[6]Id., at 532.[7]Ibid.[8]Exhibit H for petitioner,Id., at 247.[9]Exhibit C for petitioner,Id., at 239.[10]Exhibit E for petitioner,Id., at 241.[11]Records, Vol. 1, p. 1.[12]Decision of the Labor Arbiter,Id., at 489, 536.[13]Decision of the NLRC,Id., at 611, 618.[14]Resolution of the NLRC,Id., at 789, 796.[15]Id., at 901, 903.[16]Rollo, p. 188.[17]ISAGANI A. CRUZ, PHILIPPINE POLITICAL LAW (1998), p. 68.[18]Ibid.[19]Id.[20]Id.[21]BLACKS LAW DICTIONARY, Fifth Edition (1979), p. 460.[22]Rollo, p. 233.[23]Exhibit B for petitioner, Records, Vol. 1, p. 238.[24]Emphasis supplied.[25]Manejavs. NLRC and Manila Midtown Hotel, G.R. No. 124013, June 5, 1998, citing Marquezvs. Secretary of Labor, 171 SCRA 337 (1989).[26]Lim, et al. vs. NLRC, et al., G.R. No. 124630, February 19, 1999.[27]Arboledavs. NLRC and Manila Electric Company, G.R. No. 119509, February 11, 1999, citing Tanalavs. NLRC, 252 SCRA 314 (1996).[28]Id., citing Gesulgonvs. NLRC, 219 SCRA 561 (1993).[29]Id., citing Pizza Hut/Progressive Devt. Corp. vs. NLRC, 252 SCRA 531 (1996).[30]Salawvs. NLRC, 202 SCRA 7, 12 (1991) citing San Miguel Corporationvs. NLRC, 173 SCRA 314 (1989).[31]Tiuv. NLRC, 215 SCRA 540, 551 (1992).[32]Ibid.[33]Id.[34]Id., at 552.[35]Id., citing Metro Port Service, Inc.v. NLRC, 171 SCRA 190 (1989).[36]Exhibit H for petitioner, Records, Vol. 1, p. 247.[37]Exhibit E for petitioner,Id., at 241.[38]Atlas Consolidated Mining & Devt. Corp.vs. NLRC and Isabelo O. Villacencio, G.R. No. 122033, May 21, 1998.[39]Ibid.[40]Id.[41]Exhibits 47, 49, 50, 51, 52, and 53 for private respondents, Records, Vol. 1, pp. 398, 400 403.[42]TSN, June 22, 1992, pp. 198-199; August 18, 1992, pp. 189-191, 198-201.[43]Alma Cosep,et al. vs. NLRC and Premiere Development Bank, G.R. No. 124966, June 16, 1998.[44]Ibid.[45]Gandara Mill Supply and Milagros Syvs. NLRC and Silvestre Germano, G.R. No. 126703, December 29, 1998 citing Diosdado de Veravs. NLRC, 191 SCRA 633 (1990).[46]PLDTvs. NLRC and Enrique Gabriel, G.R. No. 106947, February 11, 1999, citing Madlosvs. NLRC, 254 SCRA 248 (1996).[47]Exhibits 44 46 for private respondents, Records, Vol. 1, pp. 395 397.[48]Salawvs. NLRC,supranote 30 citing Santosvs. NLRC, 154 SCRA 166 (1987).[49]Joaquin Servidadvs. NLRC, 265 SCRA 61, 71 (1996).

Republic of the PhilippinesSUPREME COURTManilaTHIRD DIVISIONG.R. No. L-72654-61 January 22, 1990ALIPIO R. RUGA, JOSE PARMA, ELADIO CALDERON, LAURENTE BAUTU, JAIME BARBIN, NICANOR FRANCISCO, PHILIP CERVANTES and ELEUTERIO BARBIN,petitioners,vs.NATIONAL LABOR RELATIONS COMMISSION and DE GUZMAN FISHING ENTERPRISES and/or ARSENIO DE GUZMAN,respondents.J.C. Espinas & Associates for petitioners.Tomas A. Reyes for private respondent.FERNAN,C.J.:The issue to be resolved in the instant case is whether or not the fishermen-crew members of the trawl fishing vessel 7/B Sandyman II are employees of its owner-operator, De Guzman Fishing Enterprises, and if so, whether or not they were illegally dismissed from their employment.Records show that the petitioners were the fishermen-crew members of 7/B Sandyman II, one of several fishing vessels owned and operated by private respondent De Guzman Fishing Enterprises which is primarily engaged in the fishing business with port and office at Camaligan, Camarines Sur. Petitioners rendered service aboard said fishing vessel in various capacities, as follows: Alipio Ruga and Jose Parma patron/pilot; Eladio Calderon, chief engineer; Laurente Bautu, second engineer; Jaime Barbin, master fisherman; Nicanor Francisco, second fisherman; Philip Cervantes and Eleuterio Barbin, fishermen.For services rendered in the conduct of private respondent's regular business of "trawl" fishing, petitioners were paid on percentage commission basis in cash by one Mrs. Pilar de Guzman, cashier of private respondent. As agreed upon, they received thirteen percent (13%) of the proceeds of the sale of the fish-catch if the total proceeds exceeded the cost of crude oil consumed during the fishing trip, otherwise, they received ten percent (10%) of the total proceeds of the sale. The patron/pilot, chief engineer and master fisherman received a minimum income of P350.00 per week while the assistant engineer, second fisherman, and fisherman-winchman received a minimum income of P260.00 per week.1On September 11, 1983 upon arrival at the fishing port, petitioners were told by Jorge de Guzman, president of private respondent, to proceed to the police station at Camaligan, Camarines Sur, for investigation on the report that they sold some of their fish-catch at midsea to the prejudice of private respondent. Petitioners denied the charge claiming that the same was a countermove to their having formed a labor union and becoming members of Defender of Industrial Agricultural Labor Organizations and General Workers Union (DIALOGWU) on September 3, 1983.During the investigation, no witnesses were presented to prove the charge against petitioners, and no criminal charges were formally filed against them. Notwithstanding, private respondent refused to allow petitioners to return to the fishing vessel to resume their work on the same day, September 11, 1983.On September 22, 1983, petitioners individually filed their complaints for illegal dismissal and non-payment of 13th month pay, emergency cost of living allowance and service incentive pay, with the then Ministry (now Department) of Labor and Employment, Regional Arbitration Branch No. V, Legaspi City, Albay, docketed as Cases Nos. 1449-83 to 1456-83.2They uniformly contended that they were arbitrarily dismissed without being given ample time to look for a new job.On October 24, 1983, private respondent, thru its operations manager, Conrado S. de Guzman, submitted its position paper denying the employer-employee relationship between private respondent and petitioners on the theory that private respondent and petitioners were engaged in a joint venture.3After the parties failed to reach an amicable settlement, the Labor Arbiter scheduled the case for joint hearing furnishing the parties with notice and summons. On December 27, 1983, after two (2) previously scheduled joint hearings were postponed due to the absence of private respondent, one of the petitioners herein, Alipio Ruga, the pilot/captain of the 7/B Sandyman II, testified, among others, on the manner the fishing operations were conducted, mode of payment of compensation for services rendered by the fishermen-crew members, and the circumstances leading to their dismissal.4On March 31, 1984, after the case was submitted for resolution, Labor Arbiter Asisclo S. Coralde rendered a joint decision5dismissing all the complaints of petitioners on a finding that a "joint fishing venture" and not one of employer-employee relationship existed between private respondent and petitioners.From the adverse decision against them, petitioners appealed to the National Labor Relations Commission.On May 30, 1985, the National Labor Relations Commission promulgated its resolution6affirming the decision of the labor arbiter that a "joint fishing venture" relationship existed between private respondent and petitioners.Hence, the instant petition.Petitioners assail the ruling of the public respondent NLRC that what exists between private respondent and petitioners is a joint venture arrangement and not an employer-employee relationship. To stress that there is an employer-employee relationship between them and private respondent, petitioners invite attention to the following: that they were directly hired by private respondent through its general manager, Arsenio de Guzman, and its operations manager, Conrado de Guzman; that, except for Laurente Bautu, they had been employed by private respondent from 8 to 15 years in various capacities; that private respondent, through its operations manager, supervised and controlled the conduct of their fishing operations as to the fixing of the schedule of the fishing trips, the direction of the fishing vessel, the volume or number of tubes of the fish-catch the time to return to the fishing port, which were communicated to the patron/pilot by radio (single side band); that they were not allowed to join other outfits even the other vessels owned by private respondent without the permission of the operations manager; that they were compensated on percentage commission basis of the gross sales of the fish-catch which were delivered to them in cash by private respondent's cashier, Mrs. Pilar de Guzman; and that they have to follow company policies, rules and regulations imposed on them by private respondent.Disputing the finding of public respondent that a "joint fishing venture" exists between private respondent and petitioners, petitioners claim that public respondent exceeded its jurisdiction and/or abused its discretion when it added facts not contained in the records when it stated that the pilot-crew members do not receive compensation from the boat-owners except their share in the catch produced by their own efforts; that public respondent ignored the evidence of petitioners that private respondent controlled the fishing operations; that public respondent did not take into account established jurisprudence that the relationship between the fishing boat operators and their crew is one of direct employer and employee.Aside from seeking the dismissal of the petition on the ground that the decision of the labor arbiter is now final and executory for failure of petitioners to file their appeal with the NLRC within 10 calendar days from receipt of said decision pursuant to the doctrine laid down inVir-Jen Shipping and Marine Services,Inc.vs. NLRC, 115 SCRA 347 (1982), the Solicitor General claims that the ruling of public respondent that a "joint fishing venture" exists between private respondent and petitioners rests on the resolution of the Social Security System (SSS) in a 1968 case, Case No. 708 (De Guzman Fishing Enterprises vs. SSS), exempting De Guzman Fishing Enterprises, private respondent herein, from compulsory coverage of the SSS on the ground that there is no employer-employee relations between the boat-owner and the fishermen-crew members following the doctrine laid down inPajarillo vs. SSS, 17 SCRA 1014 (1966). In applying to the case at bar the doctrine inPajarillo vs.SSS,supra, that there is no employer-employee relationship between the boat-owner and the pilot and crew members when the boat-owner supplies the boat and equipment while the pilot and crew members contribute the corresponding labor and the parties get specific shares in the catch for their respective contribution to the venture, the Solicitor General pointed out that the boat-owners in thePajarillocase, as in the case at bar, did not control the conduct of the fishing operations and the pilot and crew members shared in the catch.We rule in favor of petitioners.Fundamental considerations of substantial justice persuade Us to decide the instant case on the merits rather than to dismiss it on a mere technicality. In so doing, we exercise the prerogative accorded to this Court enunciated inFirestone Filipinas Employees Association,et al.vs.Firestone Tire and Rubber Co.of the Philippines,Inc., 61 SCRA 340 (1974), thus "the well-settled doctrine is that in labor cases before this Tribunal, no undue sympathy is to be accorded to any claim of a procedural misstep, the idea being that its power be exercised according to justice and equity and substantial merits of the controversy."Circumstances peculiar to some extent to fishermen-crew members of a fishing vessel regularly engaged in trawl fishing, as in the case of petitioners herein, who spend one (1) whole week or more7in the open sea performing their job to earn a living to support their families, convince Us to adopt a more liberal attitude in applying to petitioners the 10-calendar day rule in the filing of appeals with the NLRC from the decision of the labor arbiter.Records reveal that petitioners were informed of the labor arbiter's decision of March 31, 1984 only on July 3,1984 by their non-lawyer representative during the arbitration proceedings, Jose Dialogo who received the decision eight (8) days earlier, or on June 25, 1984. As adverted to earlier, the circumstances peculiar to petitioners' occupation as fishermen-crew members, who during the pendency of the case understandably have to earn a living by seeking employment elsewhere, impress upon Us that in the ordinary course of events, the information as to the adverse decision against them would not reach them within such time frame as would allow them to faithfully abide by the 10-calendar day appeal period. This peculiar circumstance and the fact that their representative is a non-lawyer provide equitable justification to conclude that there is substantial compliance with the ten-calendar day rule of filing of appeals with the NLRC when petitioners filed on July 10, 1984, or seven (7) days after receipt of the decision, their appeal with the NLRC through registered mail.We have consistently ruled that in determining the existence of an employer-employee relationship, the elements that are generally considered are the following (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 with respect to the means and methods by which the work is to be accomplished.8The employment relation arises from contract of hire, express or implied.9In the absence of hiring, no actual employer-employee relation could exist.From the four (4) elements mentioned, We have generally relied on the so-called right-of-control test10where the person for whom the services are performed reserves a right to control not only the end to be achieved but also the means to be used in reaching such end. The test calls merely for the existence of the right to control the manner of doing the work, not the actual exercise of the right.11The case ofPajarillo vs.SSS,supra, invoked by the public respondent as authority for the ruling that a "joint fishing venture" existed between private respondent and petitioners is not applicable in the instant case. There is neither light of control nor actual exercise of such right on the part of the boat-owners in thePajarillocase, where the Court found that the pilots therein are not under the order of the boat-owners as regards their employment; that they go out to sea not upon directions of the boat-owners, but upon their own volition as to when, how long and where to go fishing; that the boat-owners do not in any way control the crew-members with whom the former have no relationship whatsoever; that they simply join every trip for which the pilots allow them, without any reference to the owners of the vessel; and that they only share in their own catch produced by their own efforts.The aforementioned circumstances obtaining inPajarillocase do not exist in the instant case. The conduct of the fishing operations was undisputably shown by the testimony of Alipio Ruga, the patron/pilot of 7/B Sandyman II, to be under the control and supervision of private respondent's operations manager. Matters dealing on the fixing of the schedule of the fishing trip and the time to return to the fishing port were shown to be the prerogative of private respondent.12While performing the fishing operations, petitioners received instructions via a single-side