DOMINICO C. CONGSON, PETITIONER, VS. NATIONAL LABOR RELATIONS COMMISSION, NOE BARGO, ROGER HIMENO, RAYMUNDO BADAGOS, PATRICIO SALVADOR, SR., NEHIL BARGO, JOEL MENDOZA, AND EMMAN…

Petitioner Dominico C. Congson seeks the nullification of the
decision rendered by the National Labor Relations Commission in Case No. NLRC
CA M-000681-92^[1]
dated 28 May 1993 and its resolution dated 28 January 1994, denying petitioner’s
motion for reconsideration.

In the challenged decision*, the NLRC
affirmed in toto Labor Arbiter Arturo Aponesto’s
decision dated 27 September 1991, holding thus:

“WHEREFORE, the appealed decision is hereby AFFIRMED IN TOTO
and the instant appeal is DISMISSED for lack of merit.

SO ORDERED.” ^[2]

Petitioner is the registered owner of Southern Fishing
Industry. Private respondents were
hired on various dates^[3] by
petitioner as regular piece-rate workers. They were uniformly paid at a rate of P1.00 per tuna weighing thirty
(30) to eighty (80) kilos per movement, that is – from the fishing boats down
to petitioner’s storage plant at a load/unload cycle of work until the tuna
catch reached its final shipment/destination. They did the work of unloading tuna from fishing boats to truck haulers;
unloading them again at petitioner’s cold storage plant for filing, storing,
cleaning, and maintenance; and finally loading the processed tuna for
shipment. They worked seven (7) days a
week.

During the first week of June 1990, petitioner notified his
workers of his proposal to reduce the rate-per-tuna movement due to the
scarcity of tuna. Private respondents
resisted petitioner’s proposed rate reduction. When they reported for work the next day, they were informed that they
had been replaced by a new set of workers. When they requested for a dialogue with the management, they were
instructed to wait for further notice. They waited for the notice of dialogue for a full week but in vain.

On 15 June 1990, private respondents filed a case against
petitioner before the NLRC Sub-Regional Arbitration Branch No. XI in General
Santos City, docketed as Case No. RAB-11-06-50165-90 for underpayment of wages
(non-­compliance with Rep. Act Nos. 6640 and 6727) and non-payment of overtime
pay, 13th month pay, holiday pay, rest day pay, and five (5)-day service
incentive leave pay; and for constructive dismissal. With respect to their monetary claims, private respondents
charged petitioner with violation of the minimum wage law, alleging that with
petitioner’s rates and the scarcity of tuna catches, private respondents’
average monthly earnings each did not exceed ONE THOUSAND PESOS (P1,000.00).

Accusing petitioner of constructive dismissal, private
respondents claimed that petitioner refused to give them work assignments and replaced them with new workers when they
showed resistance to the petitioner’s proposed reduction of the rate-per-tuna
movement.

On 2 July 1990, private respondents filed another case against
petitioner, docketed as Case No. RAB-11-07-50179-90 containing an additional
claim for separation pay should their complaint for constructive dismissal be
upheld.

The two (2) cases were consolidated. Conciliation conferences were scheduled. On 24 July 1990, however, Labor Arbiter
Aponesto directed the parties to submit their respective position papers within
twenty (20) days from receipt of the directive, since no amicable settlement
was reached in conciliation between the parties.

On 22 August 1990, private respondents filed their position paper
reiterating the charges in their complaint for constructive dismissal,
attaching thereto a Bill of Particulars containing the computations of their
monetary claims. Petitioner, instead of
filing his position paper, sought, through counsel, an extension of time within
which to file his position paper.

On 20 September 1991, petitioner filed his position paper wherein
he claimed that the only issue for resolution was private respondents’ monetary
claims, and that there was no constructive dismissal. Petitioner further argued that private respondents were not
dismissed but rather, they abandoned their work after learning of petitioner’s
proposal to reduce tuna movement rates because of the scarcity of tuna, and
that, it took private respondents one (1) month to return to work, but they
could no longer be accommodated as petitioner had already hired their
replacements after private respondents failed to heed petitioner’s repeated
demands for them to return to work. Upon said premises, petitioner contended that private respondents were
not entitled to separation pay.

On 27 September 1991, Labor Arbiter Aponesto rendered a decision,
with the following disposition:

“WHEREFORE, finding that complainants Noe Bargo, Roger Himeno,
Raymundo Badagos, Patricio Salvador, Sr., Negil Bargo, Joel Mendoza and
Emmanuel Calixihan were (constructively) dismissed from employment without just
or unauthorized cause, hence illegal, respondents Southern Fishing Industry and
Mr. Dominico Congson are hereby directed to pay, jointly and severally, their
respective separation pay and monetary claims for salary differentials, 13th
month pay and service incentive leave pay, as computed above, in the total sum
of FIVE HUNDRED TWO THOUSAND EIGHT HUNDRED SIXTY FIVE (P502,865.00) PESOS.

The claims for overtime pay, holiday pay and rest day pay are,
however, dismissed for lack of factual basis and for reasons aforecited.

SO ORDERED.”^[4]

In holding petitioner guilty of constructive dismissal, Labor
Arbiter Aponesto made the following findings:

“After a careful evaluation of the foregoing facts, proofs,
evidence, arguments and counter-arguments adduced by the parties we find that
complainants were summarily dismissed from employment on the first week of
June, 1990, when respondent Dominico Congson arbitrarily replaced them with
another group of laborers to do the work of complainants. This was brought about by their reluctance
or resistance to accept a new lower rate proposed by respondent the day
before. The advise to ‘wait for further
notice’ was indeed a confirmation that complainants were dismissed as
underscored by the fact that such notice never came even until this date. Having been constructively and illegally
dismissed complainants are therefore entitled to their prayer for separation
pay. Their length of service 10 years
and 6 years, respectively (supra), which respondent dismally failed to
controvert or refute, shall be the basis of our computation, thus:

Except for private respondents’ claim for overtime pay, holiday
pay, and rest day pay which were dismissed, Labor Arbiter Aponesto granted the monetary
claims of private respondents, in this wise:

“We likewise grant the monetary claims of complainants for
wage differentials, 13th month pay and service incentive leave pay payment of
or exemption from which respondents failed to show. Hence, given the 3-year period covered by their monetary claims,
i.e. from June, 1987 to June, 1990 the monetary awards due complainants are as
follows:

x                                               x                                             x

“Pertaining to salary differentials respondent failed to adduce
any evidence or document at all to show that under their peculiar arrangements
complainants were receiving compensation at par or above the then existing
minimum wage; this, despite more than sufficient time afforded. Consequently, we have no other alternative
but to give credence to complainants’ assertion that their average income
(each) did not exceed P1,000.00 a month
(Annex “B”, complainants’ position paper), thus the differentials.”^[6]

On the other hand,
Labor Arbiter Aponesto made short shrift of petitioner’s defense by ruling
that:

“We cannot give credence to the allegations or defenses put up
by respondents: As stated, one of the
principal claims of complainants is the payment of their separation pay which
was specifically prayed by complainants when they filed the second case on July
2, 1990; this claim is likewise included in their Bill of particulars (Annex
“C”, complainants’ position paper). We cannot sustain respondents’ theory of abandonment. Record shows that shortly after complainants
were constructively dis­missed on the first week of June, 1990 they immediately
filed the instant case for constructive dismissal on June 15, 1990. There is also no showing of a deliberate
refusal on their part to resume work. Moreover, respondents dismally failed to substantiate their general
allegation that ‘repeated demands’ were made upon complainants to return to
work.”^[7]

On appeal by petitioner, respondent NLRC found petitioner guilty
of illegal dismissal. Holding that
petitioner failed to substantiate his contention that private respondents
abandoned their work, respondent NLRC ruled that petitioner replaced private
respondents with a new set of workers without just cause and the required
notice and hearing. Respondent NLRC
therefore affirmed Labor Arbiter Aponesto’s findings and monetary awards. Petitioner’s motion for reconsideration and
supplemental motion for reconsideration were denied for lack of merit in the
challenged resolution dated 28 January 1994.

Hence, the present recourse by petitioner.

Petitioner imputes grave abuse of discretion to respondent NLRC
in completely disregarding his motion for reconsideration and supplemental
motion for reconsideration. He contends
that said motions for reconsideration raised substantial issues which
respondent NLRC failed to consider and resolve.

Petitioner’s motion for reconsideration and supplemental motion
for reconsideration raised only two (2) issues: a) the accuracy of Labor Arbiter Aponesto’s computations in
arriving at the monetary awards representing salary differentials; and b) the
propriety or correctness of Labor Arbiter Aponesto’s grant of separation pay to
private respondents.

Petitioner takes issue with the manner Labor Arbiter Aponesto
computed private respondents’ wage differentials. In his supplemental motion for reconsideration, petitioner
argued, thus:

“In the
Decision rendered, the Arbiter awarded wage differential on the premise that
complainants monthly average income is only P1,000.00 as alleged in their
position paper. This is erroneous. Here is why:

Herein complainants were employed by respondents on a load-unload
cycle of hauling ‘bariles’ from the fishing boats to the truck hauler of the
respondents; then from the truck hauler down to the cold storage; the herein
complainants were paid P1.00 per movement; that is, from the fishing boat to
the cold storage, the herein complainants actually received the amount of
P2.00, one (1) peso per movement; that there are two (2) movements from the
fishing boat to the cold storage, hence complainants are actually receiving
P2.00 per piece of tuna. The Arbiter
must have been on the impression that there is only one (1) movement from the
fishing boat to the cold storage. This
is erroneous.

That finally, when the tuna is ready for export, the same is to be
transferred from the cold storage to the ocean going vessel berthed at
respondents wharf at Talisay, General Santos City, this time herein
complainants are paid P3.00 per piece of tuna from the cold storage to the
ocean going vessel as shown in the herewith attached Annexes.

In fine, all in all, there are three (3) movements from the time
the tuna is unloaded from the fishing boat to the fish car then to the cold
storage; and, finally from the cold storage to the vessel.

In addition to the amount of P1.00 per ‘bariles’ per movement
herein complainants get the intestines and liver of the tuna as part of their
salary. That for every tuna delivered,
herein complainants extract at least three (3) kilos of intestines and
liver. That the minimum prevailing
price of tuna intestine and liver in 1986 to 1990 range from P15.00 to
P20.00/kilo. The value of the tuna
intestine and liver should be computed in arriving at the daily wage of herein
complainants because the very essence of the agreement between complainants and
respondent is: complainants shall be
paid only P1.00 per tuna per movement BUT the intestines and liver of the tuna
delivered shall go to the herein complainants. It should be noted that tuna intestines and liver are easily disposed of
in any public market. Complainants
themselves would not have agreed and would not have served respondent that long
period of time if they are only paid
P1.00 per tuna movement. What they are
after, in truth and in fact is
the tuna intestines and liver which they can easily convert into cash.”^[8]

Quite clearly, petitioner admits that the P1.00-per-tuna movement
is the actual wage rate applied to private respondents as expressly agreed upon
by both parties. Petitioner further
admits that private respondents, per their request, were entitled to retrieve
the tuna intestines and liver as part of their compensation. Finally, petitioner does not refute Labor
Arbiter Aponesto when the latter fixed private respondents’ individual monthly
wage at P2,670 computed at the mandatory daily wage of P89.00.

However, it is the contention of petitioner that notwithstanding
the fact that private respondents’ actual cash wage fell below the minimum wage
fixed by law, respondent NLRC should have considered as forming a substantial
part of private respondents’ total wages the cash value of the tuna liver and
intestines private respondents were entitled to retrieve. Petitioner therefore argues that the
combined value of private respondents’ cash wage and the monetary value of the
tuna liver and intestines clearly exceeded the minimum wage fixed by law.

Petitioner’s foregoing arguments do not impress us.

The Labor Code expressly provides:

“Article 102. Forms of
Payment. – No employer shall pay the
wages of an employee by means of, promissory notes, vouchers, coupons, tokens,
tickets, chits, or any object other than legal tender, even when expressly
requested by the employee.

Payment of wages by check or money order shall be allowed when such
manner of payment is customary on the date of effectivity of this Code, or is
necessary because as specified in appropriate regulations to be issued by the
Secretary of Labor or as stipulated in a collective bargaining agreement.”
(Underscoring supplied)

Undoubtedly, petitioner’s practice of paying the private
respondents the minimum wage by means of legal tender combined with tuna liver
and intestines runs counter to the abovecited provision of the Labor Code. The fact that said method of paying the
minimum wage was not only agreed upon by both parties in the employment
agreement but even expressly requested by private respondents, does not shield
petitioner. Article 102 of the Labor Code
is clear. Wages shall be paid only by
means of legal tender. The only
instance when an employer is permitted to pay wages in forms other than legal
tender, that is, by checks or money order, is when the circumstances prescribed
in the second paragraph of Article 102 are present.

We therefore find no grave abuse of discretion on the part of
respondent NLRC in upholding Labor Arbiter Aponesto’s award of salary
differentials.

With respect to the issue concerning the propriety or correctness
of the grant of separation pay to private respondents, petitioner contends
that, assuming arguendo that Labor Arbiter Aponesto’s findings were
proper as to private respondents’ illegal dismissal, his decision did not state
the reason why instead of reinstatement, separation pay has to be awarded to
private respondents. Petitioner submits
that under existing laws and jurisprudence, whenever there is a finding of
illegal dismissal, the available and logical remedy is reinstatement. As a permissible exception to the general
rule, separation pay may be awarded to the employee in lieu of reinstatement,
by reason of strained relationship between the employer and employee. Since there was no finding or even
allegation of strained relationship between petitioner and private respondents,
respondent NLRC should have deleted, according to petitioner, the award of
separation pay in Labor Arbiter Aponesto’s decision.

We find petitioner’s ratiocination on the impropriety of the
award of separation pay to private respondents to be specious. Petitioner seeks to defeat the award of
separation pay, in lieu of reinstatement, on the pretext that inasmuch as the
existence of strained relationship — as a permissible exception to an
axiomatic order of reinstatement in cases of illegal dismissal — ­was not
adequately established, Labor Arbiter Aponesto should not have entertained at
all private respondents’ claim for separation pay.

A careful scrutiny of the records of the case at bench, however,
readily discloses the existence of strained relationship between the petitioner
and private respondents.

Firstly, petitioner consistently refused to re-­admit private
respondents in his establishment. Petitioner even replaced private respondents with a new set of workers
to perform the tasks of private respondents. Moreover, although petitioner ostensibly argued in his supplemental
motion for reconsideration that reinstatement should have been the proper
remedy in the case at bench on his premise that the existence of strained
relationship was not adequately established, yet petitioner never sincerely
intended to effect the actual reinstatement of private respondents. For if petitioner were to pursue further the
entire logic of his argument, the prayer in his supplemental motion for
reconsideration should have contained not just the mere deletion of the award
of separation pay, but precisely, the reinstatement of private
respondents. Quite obviously then,
notwithstanding petitioner’s argument for reinstatement, he was only interested
in the deletion of the award of separation pay to private respondents.

In the case of Felix Esmalin vs. National Labor Relations
Commission (3rd Division) and CARE Philippines,^[9]
we held that strained relationship is fairly established if the records of the
case showed consistent refusal of the employer to accept the dismissed
employee, to wit:

“From the records of the case, it can be discerned that
reinstatement is no longer viable in view of the strained relations between
petitioner-employee (Felix Esmalin) and private respondent-employer (CARE
Philippines). This is very evident from
the vehement and consistent stand of CARE Philippines in refusing to accept
back petitioner Esmalin. Instead,
petitioner should be awarded separation pay as an alternative for reinstatement.”

And secondly, private respondents themselves, from the very
start, had already indicated their aversion to their continued employment in
petitioner’s establishment. The very filing of their second case
before Labor Arbiter Aponesto (RAB-11-07-90179-90) speci­fically for separation
pay is conclusive of private respondents’ intention to sever their working ties
with petitioner.

In the case of Arturo
Lagniton, Sr. vs. National Labor Relations Commission, et al.,^[10] we
ruled that the refusal of the dismissed employee to be re-admitted is
constitutive of strained relations, thus:

“It appears that relations between the petitioner and the
complainants have been so strained that the complainants are no longer willing
to be reinstated. As such reinstatement
would only exacerbate the animosities that have developed between the parties,
the public respondents were correct in ordering instead the grant of separation
pay to the dismissed employees in the interest of industrial peace.”

We therefore find no grave abuse of discretion on the part of
respondent NLRC in upholding Labor Arbiter Aponesto’s grant of private
respondents’ prayer for separation pay in lieu of reinstatement.

WHEREFORE, premises considered, the petition is
hereby DISMISSED. The challenged
decision of respondent NLRC dated 28 May 1993 is hereby AFFIRMED.

SO ORDERED.

Davide, Jr., Bellosillo, Quiason, and
Kapunan, JJ., concur.

^[1]
A consolidation of Cases No. RAB-11-06-50165-90 and No. RAB-11-07-90179-90 both
entitled TUPAS In Behalf of Its Members: Noe Bargo and Six (6) Others v. Southern Fishing Industries/Dominico
Congson.

* Penned by Hon. Commissioner
Oscar Abella, with the concurrence of Hon. Commssioners Leon Gonzaga, Jr., and
Musib Buat.

^[2]
Rollo, p. 34.

^[3]
Noe and Nehil Bargo, Roger Himeno and Badagos, in 1980; Patricio Salvador, Sr.,
Joel Mendoza and Emmanuel Calixihan, in 1984.

^[4]
Rollo, pp. 72-73.

^[5]
Rollo, pp.
69-70.

^[6]
Rollo, pp. 70-72.

^[7]
Rollo, pp. 71-72.

^[8]
Rollo, pp. 41-42.

^[9]
G.R. No. 67880, 15 September 1989, 177 SCRA 537, 549.

^[10]
G.R. No. 86339, 5 February 1993, 218 SCRA 456, 459-460.