ST. MICHAEL ACADEMY AND SISTER PATRICIA AGUILAR, PETITIONERS, VS. THE NATIONAL LABOR RELATIONS COMMISSION, HERMIE BOLOSIÑO, EDERLINDA REBADULLA, FERLIZA GOLO, IMELDA ALERIA, BER…

St. Michael Academy versus National Labor Relations Commission

The Case

This is a labor case in which St. Michael Academy, an educational institution in Catarman, Northern Samar, and its principal, Sister Patricia Aguilar, seek to annul the decision of the National Labor Relations Commission, Fourth Division, Cebu City, which affirmed with modification the ruling of Labor Arbiter Gabino A. Velasquez, Junior, and granted monetary awards to seven former teachers in the total amount of three hundred twenty thousand two hundred seventy five pesos and forty two centavos. The teachers had filed complaints for terminal pay and separation pay, and later for wage differentials, thirteenth month pay, vacation and sick leave benefits, and separation pay. The case matters because it gathers in one decision the rules on the relaxation of technical rules in labor proceedings, the computation of thirteenth month pay, the source of vacation leave benefits, the crediting of tuition fee subsidy against wage orders, the prescriptive period for money claims, and the requisites of intimidation as a ground for forced resignation.

Procedural History

The case began before Labor Arbiter Gabino A. Velasquez, Junior, who decided in favor of the complainants and awarded monetary benefits, including separation pay and backwages to those he found to have been involuntarily resigned. The petitioners appealed to the National Labor Relations Commission, Fourth Division, Cebu City. The Commission affirmed the Labor Arbiter with modification, deleting the award of moral and exemplary damages and service incentive leave pay and denying some monetary claims on the ground of prescription, but still granting a total of three hundred twenty thousand two hundred seventy five pesos and forty two centavos. The petitioners then came to the Supreme Court on a petition for certiorari, alleging that the Commission acted with grave abuse of discretion.

Facts

St. Michael Academy is an educational institution in Catarman, Northern Samar, and Sister Patricia Aguilar is its principal. The private respondents were former teachers of the school. On July 9, 1992, Hermie Bolosiño and Josephine Delorino filed a complaint for payment of terminal pay. On August 3, 1992, they filed a new complaint for separation pay. The petitioners disputed the claim, presenting resignation letters showing that Bolosiño and Delorino voluntarily resigned on June 15, 1992 and April 4, 1992, respectively.

In September 1992, Bolosiño and Delorino filed an unverified position paper, joined by seven other former teachers, namely Gallano, Daclag, Aleria, Oserraos, Rebadulla, Tan and Golo, none of whom had previously filed complaints. The position paper alleged new claims for wage differentials, vacation and sick leave benefits, separation pay, and all other benefits under the Labor Code. The seven teachers alleged that they were forced to resign after their rally against the school for not releasing their share in the tuition fee increase. The petitioners objected to the joinder of new parties and new claims, and later submitted the voluntary resignation letters of the teachers. On November 5, 1992, Oserraos, Daclag, Aleria, Golo and Rebadulla filed their individual complaints. On March 5, 1993, the petitioners received an order stating that the case was already submitted for decision, and later received the sworn statements of the complainants specifying their monetary claims, some of which dated back to 1981. The petitioners replied with payroll sheets, notices of inspection results from Department of Labor and Employment inspectors, and provisions of the School Manual, and invoked prescription.

The Labor Arbiter ruled in favor of the complainants, awarding salary differentials, thirteenth month pay, service incentive leave pay, and, for some, separation pay, backwages and damages after finding their resignations involuntary. The Commission affirmed with modification, applying the three-year prescriptive period to some claims and deleting the damages and service incentive leave pay. Hence, this petition.

Issues

• Whether or not the private respondents are entitled to the payment of salary differentials, thirteenth month pay, vacation leave pay and service incentive leave pay.
• Whether or not private respondents Bolosiño, Daclag and Oserraos were illegally dismissed by being forced to resign.
• Whether or not the private respondents' failure to follow the rules of procedure in labor cases violated the petitioners' right to due process.

Applicable Provisions

Section 2 of the School Manual of petitioner school provides:

SECTION 2 CLASSIFICATION OF LEAVES Permanent or regular faculty members are entitled to five (5) days sick leave, five (5) days emergency leave and one (1) month summer vacation leave with pay during the calendar year. These leaves are not commutative nor cumulative. Part-time members are not entitled to the privilege under this paragraph.

This provision governs the entitlement of the teachers to vacation and sick leave benefits, and the Court used it to deny vacation leave pay to probationary teachers.

Article 221 of the Labor Code provides:

In any proceeding before the National Labor Relations Commission or any of the Labor Arbiters, the rules of evidence prevailing in courts of law or equity shall not be controlling and it is the spirit and intention of the Labor Code that the National Labor Relations Commission and the Labor Arbiters shall use every and all reasonable means to ascertain the facts in each case speedily and objectively and without regard to technicalities of law or procedure.

This provision supports the relaxation of technical rules of procedure and evidence in labor cases, which the Court applied to the procedural objections of the petitioners.

Article 291 of the Labor Code provides:

All money claims arising from employer-employee relations accruing during the effectivity of this Code shall be filed within three (3) years from the time the cause of action accrued; otherwise they shall be forever barred.

This provision supplied the three-year prescriptive period that the Court applied to limit the recoverable salary differentials.

Ruling

On the first issue, the Court held that the Commission did not gravely abuse its discretion in granting thirteenth month pay differential even though the private respondents did not specifically pray for it, because technical rules of pleading are not enforced strictly in labor cases where they would defeat the substantive rights of employees. However, the Court found a clear mistake in the computation. Following the Revised Guidelines on the Implementation of the Thirteenth Month Law, the thirteenth month pay is one twelfth of the total basic salary earned within a calendar year, and an employee who resigns before payment is entitled to a proportionate share. The Court recomputed the differentials accordingly.

On vacation leave pay, the Court sustained the petitioners. The payment of vacation and sick leave is governed by the policy of the employer or the agreement between employer and employee. Under Section 2 of the School Manual, only permanent or regular faculty members are entitled to the leaves, and probationary teachers are not. Since the probationary period for private school teachers is three years under the Manual of Regulations for Private Schools, the Court held that Golo and Rebadulla, and Aleria for the years she was on probation, were not entitled to vacation leave pay, except for the differential due to Delorino for 1991.

On salary differentials, the Court found partial merit. Under Wage Order Number RB VIII-01, which took effect on December 9, 1990, the share of covered workers in the increase in tuition fees for school year 1990 shall be credited as compliance with the wage increase. Since the payroll sheets showed that the private respondents received subsidy starting January 1990, the Court credited it as compliance, leaving no salary differential from January 1990 onward, except for May 1991 for Delorino. For July to December 1989, the subsidy could not be credited, so salary differentials were due. Applying the three-year prescriptive period under Article 291, the Court limited recovery to July 1989 for Bolosiño and Delorino, and November 1989 for Rebadulla, Oserraos, Daclag and Aleria.

On the second issue, the Court held that the private respondents were not forced to resign. The resignation letter of Daclag stated that she was resigning to undergo a check-up, and her letter and that of Oserraos contained words of gratitude and appreciation, which can hardly come from teachers forced to resign. The absence of a stated reason in Bolosiño's letter did not prove that he was threatened. The Court laid down the requisites of intimidation:

For intimidation to vitiate consent, the following requisites must be present: (1) that the intimidation caused the consent to be given; (2) that the threatened act be unjust or unlawful; (3) that the threat be real or serious, there being evident disproportion between the evil and the resistance which all men can offer, leading to the choice of doing the act which is forced on the person to do as the lesser evil; and (4) that it produces a well-grounded fear from the fact that the person from whom it comes has the necessary means or ability to inflict the threatened injury to his person or property.

Bare allegations of threat or force do not constitute substantial evidence to support a finding of forced resignation. Accordingly, Bolosiño, Oserraos and Daclag were not entitled to separation pay and backwages.

On the third issue, the Court held that while the procedure adopted by the private respondents failed to comply strictly with the rules of the Commission, the underlying policy of the Labor Code relaxing technical rules must be heeded to help secure and not defeat justice. The petitioners were not denied due process, because the essence of due process in administrative proceedings is simply an opportunity to explain one's side or to seek reconsideration, and in labor cases the submission of position papers and memoranda fulfills that requirement.

Doctrine

First, technical rules of pleading and procedure are not strictly enforced in labor cases, and statutory benefits may be granted to employees even if not specifically prayed for, provided they are supported by the evidence. Second, the thirteenth month pay is one twelfth of the total basic salary earned within a calendar year, and a resigning employee is entitled to a proportionate share. Third, vacation and sick leave benefits are governed by the employer's policy or the agreement of the parties, and under the School Manual only permanent or regular faculty members are entitled to them. Fourth, tuition fee subsidy may be credited as compliance with a wage order where the wage order so provides. Fifth, money claims arising from employer-employee relations prescribe in three years under Article 291 of the Labor Code. Sixth, for intimidation to vitiate consent, the four requisites must concur, and bare allegations of threat or force do not constitute substantial evidence of forced resignation. Seventh, the essence of due process in administrative proceedings is an opportunity to explain one's side, which the submission of position papers satisfies.

Disposition

The Court affirmed the decision of the National Labor Relations Commission with modification, recomputing the monetary awards and deleting the separation pay and backwages awarded to Bolosiño, Oserraos and Daclag.

Remember This

The single line worth memorizing is that bare allegations of threat or force do not constitute substantial evidence of forced resignation, and that technical rules yield to substantial justice in labor cases. Examiners like to use this case on the requisites of intimidation vitiating consent, the computation of thirteenth month pay, and the relaxation of procedural rules before labor tribunals.