Saturday, April 28, 2012

JURIST - Sidebar: The Law of the Seas and the Scarborough Shoal Dispute

JURIST - Sidebar: The Law of the Seas and the Scarborough Shoal Dispute

"x x x.

April 27, 2012, marks the formal end date of the Balikatan joint military exercises of US and Philippine military forces. Considered a yearly event, Balikatan draws its proximate basis from the 1999 US-Philippines Visiting Forces Agreement (VFA), but the ultimate basis for the parties' joint exercises is the 1952 US-Philippines Mutual Defense Treaty (MDT). While Balikatan's timing may be coincidental, the ongoing standoff between Chinese and Philippine gunboats in Scarborough Shoal is certainly not, thus implicating potential US intervention in yet another theater of war, this time in the Pacific. The gunboat standoff is now on its seventeenth day, triggered by a plausible case of illegal fishing activities by Chinese fishermen in Philippine exclusive economic zones: the Philippine navy then sought to arrest Chinese fishermen found to have harvested live corals, live baby sharks, and other rare or endangered marine species in Scarborough Shoal — "Panatag Shaol" under the local vernacular — which refers to a group of islands and reefs in an atoll located just 124 nautical miles from the Philippine province of Zambales, but lying more than 500 nautical miles from Hainan, the nearest Chinese port. Scarborough Shoal is approximately 230 kilometers from Luzon, a main island of the Philippines, and 1,200 kilometers from Hainan province. As Philippine naval vessels attempted to seize illegal cargo and make the arrest, Chinese ships intervened and established a defensive posture. To date, no arrest or seizure could be made without escalating what is still a defense posture by both navies. The Chinese navy also dropped steel posts and navigation buoys to mark the waters around Scarborough in "defense" of its "national territory." As of April 26, Philippine authorities spotted two unidentified aircraft in Scarborough's airspace which, according to Philippines Foreign Affairs Secretary Albert del Rosario, were "not from the Philippines."

Article IV of the MTD between the US and Philippines requires each party to recognize an "armed attack" in the "Pacific Area" on either party as an attack against the other, the happening of which obliges them to "act to meet the common dangers in accordance with its constitutional processes." Read with Article IV, Article V defines an "armed attack" as "includ[ing] an armed attack on the metropolitan territory of either of the Parties, or on the island territories under its jurisdiction in the Pacific or on its armed forces, public vessels or aircraft in the Pacific." Noteworthy is the fact that the treaty provisions do not use "use or threat of force" as operative terms, but "armed attack."

As the twenty-eighth Balikatan exercises draw to a close with each side showcasing the program as a "success," China was quick to warn the Philippines government that a US presence may "internationalize" the situation, as a number of Balikatan exercises were held near or at the West Philippine Sea — or the South China Sea — depending on one's vantage point. In fact, China considers both Scarborough and the Spratly Islands disputes as "regional" or even "bilateral" in nature. The Philippines, speaking through its foreign minister, proposed that the parties raise Scarborough to the International Tribunal on the Law of the Sea (ITLOS), an idea which the Chinese government flatly rejected. ITLOS is a key dispute resolution component of the UN Convention on the Law of the Sea (UNCLOS).

Is this a case where a maritime dispute, described in terms of which country is encroaching upon the other's "exclusive economic zone," and a territorial dispute, described in terms of "national territory," can and ought to be distinguished? Or does the answer to one question determine the other? Commentators have argued that the maritime dispute and the territorial dispute are separable and ought to be resolved independently, even to the extent of implying that each question would require different venues. Many are tempted, on one hand, to associate UNCLOS solely with maritime questions, and the International Court of Justice (ICJ) and the Permanent Court of Arbitration with the "grander" and "greater" questions of territorial claims. It is unavoidable, however, that any attempt at drawing archipelagic baselines — which are inherently territorial questions — under UNCLOS will certainly determine how far exclusive economic zones, or for that matter, the contiguous zones and territorial waters of a country can be.

Questions of substantive international norms aside, the more pressing question is whether China, having formally ratified UNCLOS in 1996, can be bound at all by the compulsory dispute resolution mechanisms of the UNCLOS regime. In a declaration made on August 25, 2006, after China's 1996 ratification of UNCLOS, the Chinese government made a statement to the effect that it "does not accept any of the procedures provided for in Section 2 of Part XV of the Convention with respect to all the categories of disputes referred to in paragraph 1 (a), (b), and (c) of Article 298 of the Convention." That Section 2 is captioned as "Compulsory Procedures Entailing Binding Decisions." Articles 286 and 287 of the same section, read together, point to ITLOS, the ICJ, an arbitral tribunal "constituted in accordance with Annex VII" (which may refer to the Permanent Court of Arbitration), and a "special arbitral tribunal" likewise under Annex VII. Thus there can be at least four venues for Scarborough if the dispute is brought to UNCLOS.

It seems that China, while a state party to UNCLOS, is not bound by its compulsory processes, ITLOS included. And even if China had not lodged its 2006 declaration which effectively served as a reservation against any binding outcome of UNCLOS's grievance system, China's ratification instrument to UNCLOS — made a decade earlier — stated that "The People's Republic of China reaffirms its sovereignty over all its archipelagos and islands as listed in article 2 of the Law of the People's Republic of China on the territorial sea and the contiguous zone, which was promulgated on 25 February 1992."

Does China consider Scarborough as among its "archipelagos" and "islands" listed under its basic law? Regardless of venue, China seems to be posturing for an historical claim, or an historical title, to the Scarboroughs, which is consistent with its claim over the Spratly Islands. In The Law of the Seas and the Spratly Islands Dispute, I discussed the Philippines-China dispute over the Spratlys, a group of islands which lie at the heart of one of the world's busiest sea lanes and are known to hold rich oil and natural gas reserves. Time and again, as with Scarborough, the Chinese government insists that the Spratly dispute should be resolved through bilateral negotiations, while the Philippines and its long-time ally, the US, call for a multilateral approach. Whether bilateral or multilateral, and whether it be Scarborough or the Spratlys, in meeting the greater question of who really owns the South China Sea (or West Philippine Sea, again depending on one's vantage point) there can be no avoidance of a rules-based regime of some kind, treaty or custom.

A less ambitious, but a potentially viable venue, might be the Association of Southeast Asian Nations (ASEAN). In 2002, China and ASEAN signed the Declaration on the Conduct of Parties in the South China Sea, which called for the
exercise self-restraint in the conduct of activities that would complicate or escalate disputes and affect peace and stability including, among others, refraining from action of inhabiting on the presently uninhabited islands, reefs, shoals, cays, and other features and to handle their differences in a constructive manner.
Del Rosario very recently announced that ASEAN should take a more active role, as both Scarborough and Spratlys would clearly fall under the 2002 ASEAN-China Declaration. While Del Rosario was quick to petition ASEAN (quite understandably) to intervene, deploring China's continuing breach of the 2002 declaration, ASEAN's experience in dispute resolution remains shaky, nor was ASEAN originally designed or built to resolve diplomatic rows occurring between and among non-ASEAN member states such as China.

As the Philippines, along with Japan and South Korea, struggles to shake off the perception of acting as a mere US proxy in Asia, it will be difficult to deny that more than 7,000 American and Filipino troops were present in the name of "war games" and "disaster response activities" held near or even at a potential theater of combat in the Pacific. It is clear, wherever one's political perspectives may lie, that those joint military exercises were undertaken under a post-war "mutual defense treaty" whose commitments of "mutual interests" had been reaffirmed by no less than Secretary of State Hillary Clinton during her November 2011 visit in Manila. Dubbed as the "2 + 2" summit, US and Philippine diplomats have planned to meet next week to discuss their next steps in pursuit of their "mutual interests" in Asia.

Edsel Tupaz is the founder and managing partner of Tupaz & Associates and is currently a private prosecutor of the House prosecution panel in the impeachment trial of Philippine Chief Justice Renato Corona. Tupaz is a public interest lawyer and law professor whose expertise lies in comparative constitutional law and policy, teaching at law schools in the US and the Philippines. He is a graduate of Harvard Law School and Ateneo Law School.

Suggested citation: Edsel Tupaz, The Law of the Seas and the Scarborough Shoal Dispute, JURIST - Sidebar, Apr. 27, 2012,

x x x."

Illegal dismissal and personal liability of corporate officers; law and jurisprudence.

I wish to share to my readers the legal and jurisprudential parts of a recent reply position paper in a labor case that our law office has prepared under my direct supervision, for legal research purposes.


THE COMPLAINANT x x x, by counsel, respectfully states:

1.       The two (2) basic issues in this case are whether X X X was illegally dismissed and whether the respondents should be held jointly and severally liable for tort and damages.

X x x.

2.      Please note that Article 281 of the Labor Code on probationary employment (applicable to X x x) provides that “the services of an employee who has been engaged on a probationary basis may be terminated for a just cause or when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement”. It further provides that “an employee who is allowed to work after a probationary period shall be considered a regular employee”. In the employment contract of X X X, his probation actually was 3 months. He had completed his first 3 months it without any negative action on the part of respondents. He was allowed to proceed to another renewable (2nd phase) 3 months of probation. At this time, no formal performance evaluation was conducted. The respondents simply dismissed him by reason of the above-mentioned two incidents.

3.      Further, it must be noted Article 282 of the Labor Code (termination by employer) provides that an  “employer may terminate an employment for:

(a)  Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work;

(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative; 

(d) Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representative; and

(e) Other causes analogous to the foregoing.”

To repeat: None of the foregoing grounds applies to X X X. His subject actuations were not harmful, were without malicious intent to injure, harm, intimidate, or threaten, or to commit sexual harassment or acts of lasciviousness or, in any manner, to  commit acts of disrespect towards his women colleagues.

4.      At this point, it must be repeated, for emphasis,  that X X X was not afforded the opportunity: to hire a private lawyer (a basic human right to counsel) during the rush administrative hearing; to confront the complainants and witnesses against him by way of cross examination; to study the documents, records, and evidence against him in the possession of the respondents; to secure formal minutes and transcripts of the said hearing (there being none, it now appears); and at the least, the fair time to prepare for his own defense. His human right to DUE PROCESS OF LAW was violated. End result: A family man, with good moral character, good education and work experience, and good name and honor has been rendered jobless, exposing his helpless wife and young children to hunger, suffering, anxieties, mental pain, anguish, and public ridicule, all of which deserve the imposition of MORAL and EXEMPLARY DAMAGES of P500, 000.o0 each and ATTORNEY’S FEES of 10% of recoverable amounts, plus COSTS OF SUIT and LITIGATION EXPENSES.

5.      X X X reiterates the jurisprudence he had earlier cited in his Position Paper in support of his arguments, to wit:

5.1.             Marcial Gu-Miro v. Rolando C. Adorable, et. al., GR No. 160952, 20 August 2004, citing Asuncion v. NLRC, GR No. 129329, 31 July 2001, 362 SCRA 56, and Dizon v. NLRC, GR No. 79554, 14 December 1989, 180 SCRA 52).
5.2.            Solidbank Corporation v. CA, et. al., GR No. 151026, August 25, 2003).
5.3.            Felix v. NLRC, GR No. 148256, November 17, 2004 citing Pilipinas Bank v. NLRC, 215 SCRA 750, 756 (1992), and  Quezon Electric Cooperative v. NLRC, 172 SCRA 88, 97 (1989)).
5.4.            Philippine Commercial Industrial Bank v. Cabrera, GR No. 160386, March 31, 2005.
5.5.            Hacienda Bino et al v. Cuenca et al, GR No. 150478, April 15, 2005
5.6.            PLDT vs. NLRC and Enrique Gabriel; G.R. No. 106947; February 11, 1999.
5.7.            SOLVIC INDUSTRIAL CORP. and ANTONIO C. TAM, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION and DIOSDADO LAUZ, respondents. [G.R. No. 125548.  September 25, 1998].
5.8.           Melody Paulino Lopez V. NLRC, G.R. No. 125548, October 8,1999; Martinez, J.; and
5.9.            CAINGAT vs. NLRC, et al, GR 154308, March 10, 2005

6.      The Civil Code provides when a person may be held liable for DAMAGES arising from TORT, QUASI DELICT, ABUSE OF RIGHT, MALICIOUS PROSECUTION, and other unjust, unfair and abusive acts that injure one’s constitutional and statutory rights as a person, citizen, and worker, to wit:

Art. 10.  In case of doubt in the interpretation or application of laws, it is presumed that the lawmaking body intended right and justice to prevail. 

Art. 19. Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith.

Art. 20. Every person who, contrary to law, willfully or negligently causes damage to another shall indemnify the latter for the same.

Art. 21. Any person who willfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damage.

Art. 22. Every person who through an act of performance by another, or any other means, acquires or comes into possession of something at the expense of the latter without just or legal ground, shall return the same to him.

Art. 23. Even when an act or event causing damage to another's property was not due to the fault or negligence of the defendant, the latter shall be liable for indemnity if through the act or event he was benefited.

Art. 24. In all contractual, property or other relations, when one of the parties is at a disadvantage on account of his moral dependence, ignorance, indigence, mental weakness, tender age or other handicap, the courts must be vigilant for his protection.

Art. 32. Any public officer or employee, or any private individual, who directly or indirectly obstructs, defeats, violates or in any manner impedes or impairs any of the following rights and liberties of another person shall be liable to the latter for damages:

X x x.

 (6)  The right against deprivation of property without due process of law;

X x x.

(8)  The right to the equal protection of the laws;

X x x.

(16)  The right of the accused to be heard by himself and counsel, to be informed of the nature and cause of the accusation against him, to have a speedy and public trial, to meet the witnesses face to face, and to have compulsory process to secure the attendance of witness in his behalf;

(17)  Freedom from being compelled to be a witness against one's self, or from being forced to confess guilt, or from being induced by a promise of immunity or reward to make such confession, except when the person confessing becomes a State witness;

X x x.

In any of the cases referred to in this article, whether or not the defendant's act or omission constitutes a criminal offense, the aggrieved party has a right to commence an entirely separate and distinct civil action for damages, and for other relief. Such civil action shall proceed independently of any criminal prosecution (if the latter be instituted), and mat be proved by a preponderance of evidence.

The indemnity shall include moral damages. Exemplary damages may also be adjudicated.

X x x.

Art. 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is called a quasi-delict and is governed by the provisions of this Chapter. (1902a)

Art. 2177. Responsibility for fault or negligence under the preceding article is entirely separate and distinct from the civil liability arising from negligence under the Penal Code. But the plaintiff cannot recover damages twice for the same act or omission of the defendant.

Art. 2178. The provisions of Articles 1172 to 1174 are also applicable to a quasi-delict. (n)

Art. 2179. When the plaintiff's own negligence was the immediate and proximate cause of his injury, he cannot recover damages. But if his negligence was only contributory, the immediate and proximate cause of the injury being the defendant's lack of due care, the plaintiff may recover damages, but the courts shall mitigate the damages to be awarded. (n)

Art. 2180. The obligation imposed by Article 2176 is demandable not only for one's own acts or omissions, but also for those of persons for whom one is responsible.

X x x.

The owners and managers of an establishment or enterprise are likewise responsible for damages caused by their employees in the service of the branches in which the latter are employed or on the occasion of their functions.

Employers shall be liable for the damages caused by their employees and household helpers acting within the scope of their assigned tasks, even though the former are not engaged in any business or industry.

X x x.

The responsibility treated in this article shall cease when the persons herein mentioned prove that they observed all the diligence of a good father of a family to prevent damage.

Art. 2194. The responsibility of two or more persons who are liable for quasi-delict is solidary. 

Art. 2202. In crimes and quasi-delicts, the defendant shall be liable for all damages which are the natural and probable consequences of the act or omission complained of. It is not necessary that such damages have been foreseen or could have reasonably been foreseen by the defendant.

Art. 2208. In the absence of stipulation, attorney's fees and expenses of litigation, other than judicial costs, cannot be recovered, except:

(1) When exemplary damages are awarded;
(2) When the defendant's act or omission has compelled the plaintiff to litigate with third persons or to incur expenses to protect his interest;

X x x.

 (5) Where the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiff’s plainly valid, just and demandable claim;

X x x.

(7) In actions for the recovery of wages of household helpers, laborers and skilled workers;
(8) In actions for indemnity under workmen's compensation and employer's liability laws;

X x x.

 (11) In any other case where the court deems it just and equitable that attorney's fees and expenses of litigation should be recovered.
In all cases, the attorney's fees and expenses of litigation must be reasonable.

Art. 2217. Moral damages include physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury. Though incapable of pecuniary computation, moral damages may be recovered if they are the proximate result of the defendant's wrongful act for omission.

Art. 2219. Moral damages may be recovered in the following and analogous cases:

X x x.

 (10) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34, and 35.

X x x.

Art. 2220. Willful injury to property may be a legal ground for awarding moral damages if the court should find that, under the circumstances, such damages are justly due. The same rule applies to breaches of contract where the defendant acted fraudulently or in bad faith.  

Art. 2229. Exemplary or corrective damages are imposed, by way of example or correction for the public good, in addition to the moral, temperate, liquidated or compensatory damages.

Art. 2231. In quasi-delicts, exemplary damages may be granted if the defendant acted with gross negligence.

Art. 2232. In contracts and quasi-contracts, the court may award exemplary damages if the defendant acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner.

Art. 2233. Exemplary damages cannot be recovered as a matter of right; the court will decide whether or not they should be adjudicated.

Art. 2234. While the amount of the exemplary damages need not be proved, the plaintiff must show that he is entitled to moral, temperate or compensatory damages before the court may consider the question of whether or not exemplary damages should be awarded. In case liquidated damages have been agreed upon, although no proof of loss is necessary in order that such liquidated damages may be recovered, nevertheless, before the court may consider the question of granting exemplary in addition to the liquidated damages, the plaintiff must show that he would be entitled to moral, temperate or compensatory damages were it not for the stipulation for liquidated damages.

7.      ABUSE OF RIGHT as a legal doctrine was dissected in the case of NIKKO HOTEL MANILA GARDEN, et al, vs. REYES, GR 154259, February 28, 2005, where, inter alia, Articles 19 and 21 of the Civil Code were invoked.  Although the hotel was not held liable for damages, the  Court took the case as an opportunity to make an extensive discussion of the concept of ABUSE OF RIGHT, which X X X hereby adopts in this case in support of his legal theory, thus:

X x x.

Article 19, known to contain what is commonly referred to as the principle of abuse of rights,[59] is not a panacea for all human hurts and social grievances.  Article 19 states:

Art. 19.  Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith.

Elsewhere, we explained that when “a right is exercised in a manner which does not conform with the norms enshrined in Article 19 and results in damage to another, a legal wrong is thereby committed for which the wrongdoer must be responsible.”[60]  The object of this article, therefore, is to set certain standards which must be observed not only in the exercise of one’s rights but also in the performance of one’s duties.[61]  These standards are the following: act with justice, give everyone his due and observe honesty and good faith.[62]  Its antithesis, necessarily, is any act evincing bad faith or intent to injure.  Its elements are the following:  (1) There is a legal right or duty; (2) which is exercised in bad faith; (3) for the sole intent of prejudicing or injuring another.[63]  When Article 19 is violated, an action for damages is proper under Articles 20 or 21 of the Civil Code.  Article 20 pertains to damages arising from a violation of law [64] which does not obtain herein as Ms. Lim was perfectly within her right to ask Mr. Reyes to leave.  Article 21, on the other hand, states:

Art. 21. Any person who willfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damage.

 Article 21[65] refers to acts contra bonus mores and has the following elements: (1) There is an act which is legal; (2) but which is contrary to morals, good custom, public order, or public policy; and (3) it is done with intent to injure.[66]

A common theme runs through Articles 19 and 21,[67] and that is, the act complained of must be intentional.[68] 

X x x.

[47]             E.L. Pineda, Torts and Damages Annotated, p. 52 (2004 ed).
[48]             Garciano v. Court of Appeals, G.R. No. 96126, 10 August 1992, 212 SCRA 436, 440.
[49]             cf. Servicewide Specialists, Inc. v. Intermediate Appellate Court, G.R. No. 74553, 08 June 1989, 174 SCRA 80, 88.
[50]             Sangco, Torts and Damages Vol.1 , pp. 83-84.
[51]             Floro v. Llenado, G.R. No. 75723, 02 June 1995, 244 SCRA 713, 720.
[58]             Article 2180, Civil Code.
[59]             Globe-Mackay Cable and Radio Corp. v. Court of Appeals, G.R. No. 81262, 25 August 1989, 176 SCRA 779, 783.
[60]             Albenson Enterprises Corp. v. Court of Appeals, G.R. No. 88694, 11 January 1993, 217 SCRA 16, 25.
[64]             Art. 20. Every person who, contrary to law, willfully or negligently causes damage to another, shall indemnify the latter for the same.  See Globe Mackay, supra, note 61 at 784.
[72]             Art. 2234, Civil Code.

8.    Respondents cited the case of MERCURY DRUG CORPORATION vs. NATIONAL LABOR RELATIONS COMMISSION, NLRC SHERIFF and CESAR E. LADISLA, G.R. No. 75662 September 15, 1989, but it is not applicable in this case. In the said case, the private respondent Cesar E. Ladisla was employed by petitioner Mercury Drug Corporation as a Stock Analyst at its Claro M. Recto Branch. He had been with the company for two years and nine months. On August 15, 1977 he was “apprehended by representatives of Mercury Drug while in the act of pilfering company property consisting of three (3) bottles of Persantin and one (1) bottle of Valoron at 100 tablets per bottle with a total value of P272.00”. He “admitted his guilt” to the investigating representatives of petitioner company and “executed a handwritten admission”. Said “admission was repeated verbally at the police station” before the arresting officer as shown in the Booking Sheet and Arrest Report which was signed and authenticated by Ladisla.  On August 19, 1977, petitioner, while simultaneously placing private respondent on “preventive suspension”, filed before the Department of Labor an application for the termination of private respondent's employment on grounds of “dishonesty and breach of trust”.   All of the foregoing facts do not apply in the present case. X X X was and is not being charged for DISHONESTY, THEFT, BREACH OF TRUST AND CONFIDENCE and the like. He did not make any CONFESSION of criminal guilt.

9.      Respondent cited the case of MERALCO VS. NLRC, GR 78763, JULY 12, 1989, 175 SCRA 277. Again this case is not applicable to X X X. In the said case the facts were as follows: Private respondent Signo was employed in petitioner company as supervisor-leadman since January 1963 up to the time when his services were terminated on May 18, 1983. In 1981, a certain Fernando de Lara filed an application with the petitioner company for electrical services at his residence at Peñafrancia Subdivision, Marcos Highway, Antipolo, Rizal. Private respondent Signo facilitated the processing of the said application as well as the required documentation for said application at the Municipality of Antipolo, Rizal. In consideration thereof, private respondent received from Fernando de Lara the amount of P7,000.00. Signo thereafter filed the application for electric services with the Power Sales Division of the company. It was established that the area where the residence of de Lara was located is not yet within the serviceable point of Meralco, because the place was beyond the 30-meter distance from the nearest existing Meralco facilities. In order to expedite the electrical connections at de Lara's residence, certain employees of the company, including respondent Signo, made it appear in the application that the sari-sari store at the corner of Marcos Highway, an entrance to the subdivision, is applicant de Lara's establishment, which, in reality is not owned by the latter. As a result of this scheme, the electrical connections to de Lara's residence were installed and made possible. However, due to the fault of the Power Sales Division of petitioner company, Fernando de Lara was not billed for more than a year. Petitioner company conducted an investigation of the matter and found respondent Signo responsible for the said irregularities in the installation. Thus, the services of the latter were terminated on May 18, 1983. On August 10 1983, respondent Signo filed a complaint for illegal dismissal, unpaid wages, and separation pay.

In fact, MERALCO lost in the abovecited case. Applying the doctrine of COMPASSIONATE JUSTICE IN LABOR AND SOCIAL LEGISLATION, the Court ruled in favor of the worker who was unjustly dismissed. Thus:

X x x.

This Court has held time and again, in a number of decisions, that notwithstanding the existence of a valid cause for dismissal, such as breach of trust by an employee, nevertheless, dismissal should not be imposed, as it is too severe a penalty if the latter has been employed for a considerable length of time in the service of his employer. (Itogon-Suyoc Mines, Inc. v. NLRC, et al., G.R. No. L- 54280, September 30,1982,117 SCRA 523; Meracap v. International Ceramics Manufacturing Co., Inc., et al., G.R. Nos. L-48235-36, July 30,1979, 92 SCRA 412; Sampang v. Inciong, G.R. No. 50992, June 19,1985,137 SCRA 56; De Leon v. NLRC, G.R. No. L-52056, October 30,1980, 100 SCRA 691; Philippine Airlines, Inc. v. PALEA, G.R. No. L-24626, June 28, 1974, 57 SCRA 489).

In a similar case, this Court ruled:

As repeatedly been held by this Court, an employer cannot legally be compelled to continue with the employment of a person who admittedly was guilty of breach of trust towards his employer and whose continuance in the service of the latter is patently inimical to its interest. The law in protecting the rights of the laborers, authorized neither oppression nor self- destruction of the employer.

However, taking into account private respondent's 'twenty-three (23) years of service which undisputedly is unblemished by any previous derogatory record' as found by the respondent Commission itself, and since he has been under preventive suspension during the pendency of this case, in the absence of a showing that the continued employment of private respondent would result in petitioner's oppression or self-destruction, We are of the considered view that his dismissal is a drastic punishment. ... .

xxx xxx xxx

The ends of social and compassionate justice would therefore be served if private respondent is reinstated but without backwages in view of petitioner's obvious good faith. (Itogon- Suyoc Mines, Inc. v. NLRC, et al., 11 7 SCRA 528)
Further, in carrying out and interpreting the Labor Code's provisions and its implementing regulations, the workingman's welfare should be the primordial and paramount consideration. This kind of interpretation gives meaning and substance to the liberal and compassionate spirit of the law as provided for in Article 4 of the New Labor Code which states that "all doubts in the implementation and interpretation of the provisions of the Labor Code including its implementing rules and regulations shall be resolved in favor of labor" (Abella v. NLRC, G.R. No. 71812, July 30,1987,152 SCRA 140).

In view of the foregoing, reinstatement of respondent Signo is proper in the instant case, but without the award of backwages, considering the good faith of the employer in dismissing the respondent.

X x x.

10.  Respondents cited the case of  ABBOTT LABORATORIES (PHILIPPINES), INC., and JAIME C. VICTA vs. NATIONAL LABOR RELATIONS COMMISISON and ALBERT BOBADILLA, G.R. No. 76959 October 12, 1987. Again the facts of the said case are not applicable to X X X. It involved the legal issue of UNJUST TRANSFER of a worker which the latter contested as being tantamount to a DEMOTION. In that case, complainant Bobadilla started his employment with respondent company sometime in May 1982. After undergoing training, in September, 1982, competent was designated professional medical representative (PMR) and was assigned to cover the sales territory comprising of Sta. Cruz, Binondo and a part of Quiapo and Divisoria, of the Metro Manila district. In connection with the respondent company's marketing and sales operations, it had been its policy and established practice of undertaking employment movements and/or reassignments from one territorial area to another as the exigencies of its operations require and to hire only applicant salesmen, including professional medical representatives (PMRs) who were willing to take provincial assignments, at least insofar as male applicants were concerned. Likewise, respondent company had made reassignments or transfers of sales personnel which included PMRs from one territorial area of responsibility to another on a more or less regular basis. In complainant's application for employment with respondent company, he agreed to the following: 1) that if employed he win accept assignment in the provinces and/or cities anywhere in the Philippines; 2) he is willing and can move into and live in the territory assigned to him; and (3) that should any answer or statement in his application for employment be found false or incorrect, he will be subject to immediate dismissal, if then employed. On 22 July 1983, respondent Victa called complainant to his office and informed the latter that he was being transferred effective 1 August 1983 to the newly opened Cagayan territory comprising the provinces of Cagayan, Nueva Vizcaya and Isabela. The transfer order was made formal in a memorandum dated 29 July 1983. Among the reasons given for complainant's selection as PMR for the Cagayan territory were: The territory required a veteran and seasoned PMR who could operate immediately with minimum training and supervision. Likewise, a PMR who can immediately exploit the vast business potential of the area. In a letter dated 1 August 1983, which was received by Abbott on 4 August 1983, competent, thru his lawyer, objected to the transfer on the grounds that it was not only a demotion but also personal and punitive in nature without basis legally and factually. On 8 August 1983, Victa issued another inter-office correspondence to competent, giving the latter up to 15 August 1983 within which to comply with the transfer order, otherwise his would be dropped from the payroll for having abandoned his job. When competent failed to report to his new assignment, Abbott assigned thereat Fausto Antonio T. Tibi another PED PMR who was priorly covering the provinces of Nueva Ecija and Tarlac. Meanwhile, complainant filed applications for vacation leave from 2 to 9 August 1983, and then from 10 to 13 August 1983. And on 18 August 1983, he filed the present complaint. After due consideration of the evidence adduced by the parties, the Arbiter below ruled for the respondent on the ground that the complainant is guilty of gross insubordination.

11.   Respondents cited the case of FEDERICO NUEZ vs. NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER MANUEL ASUNCION, PHILIPPINE OVERSEAS TELECOMMUNICATIONS CORPORATION (PHILCOMSAT), HONORIO POBLADOR, RAMON NIETO, FRED AUJERO and ROMEO VALENCIA, G.R. No. 107574 December 28, 1994. Again this case is not applicable to X X X. In the said case, petitioner Nuez was a driver of private respondent PHILCOMSAT since 1 May 1970. On 25 November 1988 he was assigned to its station in Baras, Antipolo, Rizal, from seven-thirty in the morning to three-thirty in the afternoon. At one-thirty that afternoon, Engr. Jeremias Sevilla, the officer in charge and the highest ranking official of the station, asked Nuez to drive the employees to the Makati head office to collect their profit shares. Nuez declined saying that he had an important personal appointment right after office hours. At two-thirty that same afternoon, he also declined a similar order given on the phone by his vehicle supervisor, Pedro Sibal, reasoning that
"Ayaw kong magmaneho dahil may bibilhin ako sa Lagundi. Kung gusto mo yong 'loyalist' ang magmaneho." In his memorandum of 28 November 1988, Station Manager Ramon Bisuna required Nuez to explain within seventy-two hours why he should not be administratively dealt with for disobeying an order of their most senior officer on 25 November 1988. In his written reply dated 1 December 1988, Nuez mentioned a personal appointment in justification for his refusal to render "overtime" service and that "ferrying employees . . . was not a kind of emergency that . . . warrants (the) charge of disobedience." Taking into consideration the reports of Engr. Sevilla and Supervisor Sibal as well as the letter of petitioner Nuez, AVP for Transport and Maintenance Fredelino Aujero referred the matter to Vice President for Administration Ramon V. Nieto for appropriate action and invited his attention to the Code of Disciplinary Action of the company providing that "refusal to obey any lawful order or instruction of a superior is classified as insubordination, an extremely serious offense and its first infraction calls for dismissal of the erring employee." The report of Aujero pointed out that Nuez could have obeyed the directive and still have enough time to attend to his appointment because the order was given him two hours before his tour of duty ended and, moreover, he was seen playing billiards after office hours. Vice President Nieto then issued a memorandum to Nuez terminating his employment effective 26 December 1988 for insubordination. In his letter for reconsideration dated 1 January 1989, Nuez explained to Vice President Nieto that after failing to get a ride to Lagundi, he went with the company coaster at four-thirty in the afternoon and then proceeded to TMC to play billiards when the person he wanted to see at Lagundi had already left. On 6 March 1989, Nuez filed this suit for illegal dismissal, indemnity pay, moral and exemplary damages and attorney's fees. On 29 January 1990, Labor Arbiter Manuel P. Asuncion dismissed the complaint for lack of merit but awarded Nuez a "monetary consideration" in an amount equivalent to his one-half month salary for every year of service. On appeal, the National Labor Relations Commission affirmed on 15 June 1992 the decision of the Labor Arbiter but limited the financial assistance to Nuez in an amount equivalent to three months basic pay only.

12.  As to the issue of PERSONAL LIABILITY for damages of CORPORATE OFFICERS in illegal dismissal cases, although the case of M+W ZANDER PHILIPPINES, INC. and ROLF WILTSCHEK vs. TRINIDAD M. ENRIQUEZ, G.R. No. 169173, June 5, 2009, which cited the case of EPG Construction Company, Inc., et al. v. Court of Appeals, et al., G.R. No. 103372, June 22, 1992 (also cited by respondents in their position paper, pp. 26, et, seq.), held that the general manager of a corporation should not be made personally answerable for the payment of an illegally dismissed employee's monetary claims arising from the dismissal because the  employer corporation has a separate and distinct personality from its officers who merely act as its agents, it cited a clear EXCEPTION, that is, where the official "had acted maliciously or in bad faith," in which event he may be made personally liable for his own act. X X X submits that, in this case, respondents acted on bad faith and with malice when they ABUSED their right to discipline X X X; when they relied on flimsy grounds (NOT GROSS OR HABITUAL OR SERIOUS  OR GRAVE violations as provided by the Art. 282 of the Labor Code) to dismiss him; when they RUSHED, RAILROADED and MANIPULATED the sole administrative hearing without informing X x x of his human right to counsel (while two lawyers represented the respondent Company and its prosecuting corporate officers); when they and their agents did not grant X x x the fair opportunity to confront the complainants and witnesses against him; when they did not give him advance copies of the alleged complaints and other documentary evidence against him before the administrative hearing (Note: The respondents, thru their lawyer, gave copies of the 201 File and the Administrative Case Record of X x x only when this case had been filed with the NLRC and only upon motion in open court and reiterated in writing made by counsel for X x x); when X x x’ termination date was made effective on the very day of receipt by him of the notice of dismissal (February 2, 2012); when the president X X Xdid not sign the notice of dismissal, contrary to the company’s code of discipline/conduct; when X X Xand X X X did not attend the sole administrative hearing and thus had no personal knowledge of the facts and exhibits adduced in evidence during such hearing and yet they signed and/or affirmed the notice of dismissal and rejected X X X’ appeal to X x xas if they personally knew the entire case record and proceedings.

RESPONDENTS must be made to pay for the MENTAL ANGUISH, EXTREME ANXIETIES, SLEEPLESS NIGHTS, BESMIRCHED REPUTATION, AND PUBLIC RIDICULE that X x x has suffered and continues to suffer by reason of the abusive act of respondents in unjustly dismissing him from the service, which act has jeopardized his ability to financially support his two young children and his wife and to pay for his financial obligations to his creditors.  Yes, they may be prominent stockholders and well-paid officers of a huge corporation as X x x Global City, Inc., occupying top positions in their own little kingdoms. But that does not give them the dictatorial right to patently and tortuously trample upon the rights of X x x, a worker and a Filipino citizen whose rights are protected by the law or to endanger the very physical subsistence and existence of his helpless family by unjustly dismissing him from his source of livelihood and income. 

13.  The case of LLORENTE vs. SANDIGANBAYAN, ET AL., EN BANC, [G.R. No. 85464.  October 3, 1991] is applicable by analogy as to the issue of the personal liability of private and public officers for acts done in bad faith, with abuse of right, with graver abuse of discretion, and the like.

X x x.

CIVIL LAW; INDEPENDENT CIVIL ACTIONS; DAMAGES FOR ACTS DONE IN BAD FAITH; CASE AT BAR. — The acts of the petitioner were legal (that is, pursuant to procedures), as he insists in this petition, yet it does not follow, as we said, that his acts were done in good faith. For emphasis, he had no valid reason to "go legal" all of a sudden with respect to Mr. Curio, since he had cleared three employees who, as the Sandiganbayan found, "were all similarly circumstanced in that they all had pending obligations when, their clearances were filed for consideration, warranting similar official action. The Court is convinced that the petitioner had unjustly discriminated against Mr. Curio. It is no defense that the petitioner was motivated by no ill-will (a grudge, according to the Sandiganbayan), since the facts speak for themselves. It is no defense either that he was, after all, complying merely with legal procedures since, as we indicated, he was not as strict with respect to the three retiring other employees. There can be no other logical conclusion that he was acting unfairly, no more, no less, to Mr. Curio. It is the essence of Article 19 of the Civil Code, under which the petitioner was made to pay damages, together with Article 27, that the performance of duty be done with justice and good faith. We believe that the petitioner is liable under Article 19. The Court finds the award of P90,000.00 to be justified by Article 2202 of the Civil Code, which holds the defendant liable for all "natural and probable" damages. Hermenegildo Curio presented evidence that as a consequence of the petitioner's refusal to clear him, he failed to land a job at the Philippine Cotton Authority and Philippine First Marketing Authority. He also testified that a job in either office would have earned him a salary of P2,500.00 a month, or P150,000.00 in five years. Deducting his probable expenses of reasonably about P1,000.00 a month, or P60,000.00 in five years, the petitioner owes him a total of actual damages of P90,000.00.

X x x.

14.  Further on the issue of personal liability of officers, by analogy, the case of  The City of Angeles, Hon.  Antonio Abad Santos vs. CA, et al., G.R. No. 97882, Aug. 26, l996, citing Rama vs. CA, 148 SCRA 498; San Luis vs. CA, 174 SCRA 258, is applicable. In that case, a donation of a parcel of land to the City of Angeles, Pampanga was made for the sole purpose of using it as the site of the Angeles City Sports Center except cockfighting.  Instead, a Drug Rehabilitation Center was constructed upon approval and orders of the mayor and the members of the sangguniang panglunsod. In  ordering the demolition of the Center and the  reimbursement  of the public funds spent for the construction of the  Center,   the  Court  held that it must be borne by  the  officials  of Angeles  City  who  ordered and directed  the  construction.   It held that public officials are not immune from damages in their personal capacities arising from acts done in bad faith.   They are liable in their  personal  capacities  for whatever  damages they may cause by their acts done  with  malice and in bad faith or beyond the scope of their authority or jurisdiction.[citing  Vidad  vs. RTC Negros Oriental, Branch  42,  227 SCRA  271, M.H. Wylie vs. Rarang, 209 SCEA 357; Orocio  vs.  COA, 213 SCRA 109]. But such officials must be sued in their personal capacity. In this case the public officials deliberately violated  the law,  and persisted in their violation, attempted to deceive  the courts  by  their pretended change in the use of the  Center  and making  it  a mockery of justice. The Court held that public officials were held  liable  personally  for damages  arising  from their illegal acts done in bad  faith  if said officials were sued both in their  official  and personal capacities.

Thus held the Court, inter alia:

X x x.

This Court has time and again ruled that  public  officials are not immune from damages in their personal capacities  arising from acts done in bad faith. Otherwise stated, a public  official may  be liable for whatever damage he may have caused by his  act done  with  malice and in bad faith or beyond the  scope  of  his authority  or jurisdiction. (See Vidal vs. RTC, Negros Oriental, 227  SCRA 271); Wylie vs. Rarang, 209 SCRA 357; Orocio  vs.  COA, 213 SCRA 109). In the instant case, the public  officials  concerned  deliberately  violated  the law and  persisted  in  their violations,  going so far as attempting to deceive the courts  by their  pretended change of purpose and usage for the center,  and making  a  mockery of the judicial  system."  Indisputably, said public  officials acted beyond the scope of their  authority  and jurisdiction and with evident bad faith. However, as noted by the trial court, the petitioners mayor and members of the Sangguniang Panlungsod  of  Angeles  City were sued only  in  their  official capacities,  hence,  they  could not be  held  personally  liable without  first giving them their day in court. Prevailing  jurisprudence  Roma  vs. CA, 148 SCRA 496; San Luis cs. CA,  174  SCRA 258)  holding  that public officials are  personally  liable  for damages arising from illegal acts done in bad faith are  premised on  said  officials having been sued both in their  official  and personal capacities.

After  due  consideration of the circumstances,  we  believe that the fairest and most equitable solution is to have the  City of Angeles, donee of the subject open space and, ostensibly,  the main  beneficiary of the construction and operation of  the  proposed  drug rehabilitation center, undertake the  demolition  and removal of said center, and if feasible, recover the cost thereof from  the city officials concerned. (The City of Angeles  vs.  CA, et. al., G. R. No. 97882, Aug. 28, 1996).


WHEREFORE, premises considered, it is respectfully prayed that the respondents, jointly and severally, be found guilty and liable for the ILLEGAL DISMISSAL of the complainant, with the concomitant imposition of civil awards, penalties and damages against the said respondents,  more specifically: BACKWAGES computed according to existing jurisprudence; SEPARATION PAY as provided by existing jurisprudence, in lieu of restoration of the complainant to his former position, considering the strained relations between the parties at present by reason of this pending case; MORAL DAMAGES in the amount of P500,000.00; EXEMPLARY DAMAGES in the amount of P500,000.00; and ATTORNEY’S FEES equivalent to 10% of recoverable damages, and COSTS OF SUIT and LITIGATION EXPENSES.
Further, it is respectfully prayed that, pendent lite, the unquestioned/admitted receivable of the complainant from the respondent company, in the amount of P19, 846.96, be released to him soonest for humanitarian reasons, considering the financial difficulties that he and his family are now severely facing by reason of his abrupt termination from the service.
Finally, the complainant respectfully prays for such and other reliefs as may be deemed just and equitable in the premises.
Las Pinas City, April 30, 2012.     




Counsel for Complainant                            
Unit 15, Star Arcade, C.V. Star Ave.
Philamlife Village, Las Pinas City 1743
Tel/Fax 8462539, 8725443

Roll No. 33640, 4/27/85
IBP Lifetime Member No. 1907
IBP Leyte Chapter
MCLE Exemption No. IV-1326, 2/3/11
PTR No. 10288207, 1/18/12, Las Pinas


            I, x x x.,  of legal age, married, Filipino, and with postal address at x x x  , under oath, depose:  that I am the complainant in the foregoing Reply Position Paper; that I caused the preparation thereof; that I have read its contents; and that the same are true and correct of my own direct, personal knowledge.

            Quezon City, April  30, 2012.

                                                                        X x x.

            SUBSCRIBED and sworn to before me in Quezon City this  30th day of April 2012, affiant showing his Driver’s License No. x x x  expiring on x x x .

                                                                        Administering Labor Arbiter       


X x x
(Atty. X x x)
Counsel for Respondents
            (Personal Delivery
            During the Hearing Set
            On x x x at x x x)


Friday, April 27, 2012

In The Know: US Courts

In The Know: US Courts

The equivalent of US district courts in the Philippines are the Regional Trial Court, formerly called the Courts of First Instance. 

"x x x.

In the United States, the district court is where most federal cases are initially tried and decided.
There are 94 district courts, including the District of Columbia, the Commonwealth of Puerto Rico and the territories of Guam, the US Virgin Islands and the Northern Mariana Islands.
Except in the case of the three territorial courts, the judge, who presides over the district court, is appointed by the President and confirmed by the Senate.
Nominees to the position may be recommended by senators or members of the House of Representatives belonging to the political party of the President.
The Senate Judiciary Committee conducts confirmation hearings before a judge is finally appointed for a life term.
While the Constitution does not set specific requirements, those who nominate and examine the nominations have developed informal criteria over time.
There are currently 677 district court judgeships in the USA.
x x x.