Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 192650               October 24, 2012

FELIX MARTOS, JIMMY ECLANA, RODEL PILONES, RONALDO NOVAL, JONATHAN

PAILAGO, ERNESTO MONTANO, DOYONG JOSE, DEO MAMALATEO, ROSELO MAGNO,
BONNIE SANTILLAN, ARSENIO GONZALES, ALEX EDRADAN, MICHAEL ERASCA, MARLON
MONTANO, VICENTE OLIVEROS, REYNALDO LAMBOSON, DOMINGO ROTA, EDDIE ROTA,
ZALDY OLIVEROS, ANTONIO NATIL, HERMIE BUISON, ROGER BUISON, MARIANO LAZATE,
JUAN VILLABER, LIMUEL LLANETA, LITO BANTILO, TERSO GARAY, ROWEL BESTOLO,
JERRY YORTAS, PASTOR PANTIG, GAVINO NICOLAS, RAFAEL VILLA, FELIX YORTAS,
MELVIN GARAY, NEIL DOMINGUEZ REYNALDO EVANGELISTA, JR., JOSE RAMOS, ELVIN
ROSALES, JUN GRANEHO, DANNY ASPARES, SALVEDOR TONLOC, ROLANDO
EVANGELISTA, RICKY M. FRANCISCO, EDUARDO ALEGRIA, SALVADOR SANTOS, GREG
BISONIA, RUFO CARBILLO, MARVIN MONTERO, DANILO BESSIRE, ALLAN CABALLERO,
ORLANDO LIMOS, EDGARDO BICLAR, MANDY MAMALATEO, ALFRED GAJO, ERIC
CASTRENCE, ANTHONY MOLINA, JAIME SALIM, ROY SILVA, DANILO BEGORIE, PEPING
CALISANA, ERIC RONDA, RUFO CARBANILLO, ROWEL BATA, RICARDO TOLENTINO,
ARNEL ARDINEZ, FERDINAND R. ARANDIA, ROMEO R. GARBO, ANTONIO ROTA,
REYNIELANDRE QUINTANILLA, JOSELITO HILARIO, JIMMY CAMPANA, DANILO LIDO-AN,
EMERSON PENAFLOR, CESAR PABALINAS, JONATHAN MELCHOR, ALEX DAVID, EUTIQUIO
ALCALA, MICHAEL CARANDANG, EDUARDO MANUEL, RAMON EVANGELISTA, RUBEN
MENDOZA, ERNESTO MENDOZA, RICKY RAMOS, ROBERTO NOVELLA, RUBEN CONDE,
DANILO POLISTICO, DOMINGO MENDOZA, FERNANDO SAN GABRIEL, AND DOMINGO
ROTO, Petitioners,
vs.
NEW SAN JOSE BUILDERS, INC., Respondent.

DECISION

MENDOZA, J.:

Questioned in this Petition for Review is the July 31, 2009 Decision of the Court of Appeals (CA) and
1 

its June 17, 2010 Resolution, which reversed and set aside the July 30, 2008 Decision and October
2  3 

28, 2008, Resolution of the National Labor Relations Commission (NLRC); and reinstated the May
4 

23, 2003 Decision of the Labor Arbiter (LA). The dispositive portion of the CA Decision reads:
5 

WHEREFORE, decision is hereby rendered, as follows:

1. Declaring the complainant Felix Martos was illegally dismissed and ordering respondent New San
Jose Builders, Inc. to pay him his separation pay, backwages, salary differentials, 13th month pay,
service incentive leave pay, and attorney’s fees in the total amount of TWO HUNDRED SIXTY
THOUSAND SIX HUNDRED SIXTY ONE PESOS and 50/1000 (P260, 661.50).

The awards for separation pay, backwages and the corresponding attorney’s fees are subject to
further computation until the decision in this case becomes final and executory; and

2. Dismissing the complaints/claim of the other complainants without prejudice.

SO ORDERED. 6

The Facts

The factual and procedural antecedents were succinctly summarized by the CA as follows:

New San Jose Builders, Inc. (hereafter petitioner) is a domestic corporation duly organized and
existing under the laws of the Philippines and is engaged in the construction of road, bridges,
buildings, and low cost houses primarily for the government. One of the projects of petitioner is the
San Jose Plains Project (hereafter SJPP), located in Montalban, Rizal. SJPP, which is also known
as the "Erap City" calls for the construction of low cost housing, which are being turned over to the
National Housing Authority to be awarded to deserving poor families.

Private respondents alleged that, on various dates, petitioner hired them on different positions,
hereunder specified:
1âwphi1

Names Date Employed Date Dismissed

1. Felix Martos October 5, 1998 February 25, 2002
2. Jimmy Eclana 1999 July 2001
3. Rodel Pilones February 1999 July 2001
4. Ronaldo Noval
5. Jonathan Pailago
6. Ernesto Montaño 1998 2000
7. Doyong Jose 1996 July 2001
8. Deo Mamalateo 1999 July 2001
9. Roselo Magno 1994 November 2000
10. Bonnie Santillan 1998 July 2001
11. Arsenio Gonzales 1998 July 2001
12. Alex Edradan 1998 November 2001
13. Michael Erasca 1999 July 2001
14. Marlon Montaño 1998 July 2001
15. Vicente Oliveros April 5, 1998 July 2001
16. Reynaldo Lamboson 1999 July 2001
17. Domingo Rota 1998
18. Eddie Rota 1998
19. Zaldy Oliveros 1999 July 2001
20. Antonio Natel 1998 July 2001
21. Hermie Buison 1998 July 2001
22. Roger Buison 1998 2000
23. Mariano Lazate February 19, 1995
24. Juan Villaber January 10, 1997
25. Limuel Llaneta March 5, 1994
26. Lito Bantilo May 1987
27. Terso Garay October 3, 1986
28. Rowel Bestolo February 6, 1999
29. Jerry Yortas May 1994
30. Pastor Pantig April 11,1998
31. Gavino Nicolas June 20, 1997
32. Rafael Villa March 9, 1998
33. Felix Yortas 1992
34. Melvin Garay February 2, 1994
35. Neil Dominguez February 16, 1998
36. Reynaldo Evangelista, Jr. October 10, 1998
37. Jose Ramos October 10, 1998
38. Elvis Rosales June 14, 1998
39. Jun Graneho January 15, 1998
40. Danny Espares April 1999
41. Salvador Tonloc January 8, 1998
42. Rolando Evangelista March 15, 1998
43. Ricky M. Francisco September 28, 1991
44. Eduardo Alegria May 2001
45. Salvador Santos September 22, 2000
46. Greg Bisonia March 28, 1993
47. Rufo Carbillo March 28, 1993
48. Marvin Montero 1997 January 2001
49. Danilo Bessiri 1997 2002
50. Allan Caballero 1997 2002
51. Orlando Limos 1997 July 2001
52. Edgardo Biclar 1997 July 2001
53. Mandy Mamalatco 1989 2002
54. Alfred Gajo 1998 July 2001
55. Eric Castrence 1988 2002
56. Anthony Molina 1997 2002
57. Jaime Salin
58. Roy Silva 1997 2002
59. Danilo V. Begorie 1994 January 2001
60. Peping Celisana 1999 July 2001
61. Eric Ronda 1998 July 2001
62. Rufo Carbanillo 1998 July 2001
63. Rowel Batta 1999 July 2001
64. Ricardo Tolentino 1997 July 2001
65. Arnel Ardinez 1998 July 2001
66. Ferdinand P. Arandia 1998 1999
67. Romeo R. Garbo 1998 2000
68. Antonio Rota 1998 July 2001
69. Reynielande Quintanilla February 28, 1998 2002
70. Joselito Hilario 1998 2002
71. Jimmy Campana August 15, 1998 August 2001
72. Danilo Lido-An September 8, 1998
73. Emerson Peñaflor August 8,1998
74. Cesar Pabalinas
75. Jonathan Melchor November 1998
 76. Alex David 1998
77. Eutiquio Alcala December 1999
78. Michael Carandang June 2000
79. Eduardo Nanuel October 1999
80. Ramon Evangelista February 15, 1998
81. Ruben Mendoza 1999 July 2001
82. Ernesto A. Mendoza 1998 July 2001
83. Ricky Ramos 1999 July 2001
84. Roberto Novella 1998 July 2001
85. Ruben Conde 1998 July 2001
86. Ramon Evangelista 1997 July 2001
87. Danilo Polistico 1999 July 2001
88. Domingo Mendoza 1999 July 2001
89. Fernando San Gabriel 1999 July 2001
90. Domingo Roto 1994 July 2001

Sometime in 2000, petitioner was constrained to slow down and suspend most of the works on the
SJPP project due to lack of funds of the National Housing Authority. Thus, the workers were
informed that many of them [would] be laid off and the rest would be reassigned to other projects.
Juan Villaber, Terso Garay, Rowell Batta, Pastor Pantig, Rafael Villa, and Melvin Garay were laid
off. While on the other hand, Felix Martos, Ariel Dominguez, Greg Bisonia, Allan Caballera, Orlando
Limos, Mandy Mamalateo, Eric Castrence, Anthony Molina, and Roy Silva were among those who
were retained and were issued new appointment papers to their respective assignments, indicating
therein that they are project employees. However, they refused to sign the appointment papers as
project employees and subsequently refused to continue to work.

On different dates, three (3) Complaints for Illegal Dismissal and for money claims were filed before
the NLRC against petitioner and Jose Acuzar, by private respondents who claimed to be the former
employees of petitioner, to wit:

1. Complaint dated March 11, 2002, entitled "Felix Martos, et al. vs. NSJBI", docketed as
NLRC-NCR Case No. 03-01639-2002;

2. Complaint dated July 9, 2002, entitled "Jimmy Campana, et al. vs. NSJBI," docketed as
NLRC-NCR Case No. 07-04969-2002;

3. Complaint dated July 4, 2002, entitled "Greg Bisonia, et al. vs. NSJBI", docketed as
NLRC-NCR Case No. 07-02888-2002.

Petitioner denies that private respondents were illegally dismissed, and alleged that they were
project employees, whose employments were automatically terminated upon completion of the
project for which they were hired. On the other hand, private respondents claim that petitioner hired
them as regular employees, continuously and without interruption, until their dismissal on February
28, 2002.

Subsequently, the three Complaints were consolidated and assigned to Labor Arbiter Facundo
Leda.7

Ruling of the Labor Arbiter

As earlier stated, on May 23, 2003, the LA handed down a decision declaring, among others, that
petitioner Felix Martos (Martos) was illegally dismissed and entitled to separation pay, backwages
and other monetary benefits; and dismissing, without prejudice, the complaints/claims of the other
complainants (petitioners).
Ruling of The NLRC

Both parties appealed the LA decision to the NLRC. Petitioners appealed that part which dismissed
all the complaints, without prejudice, except that of Martos. On the other hand, New San Jose
Builders, Inc. (respondent) appealed that part which held that Martos was its regular employee and
that he was illegally dismissed.

On July 30, 2008, the NLRC resolved the appeal by dismissing the one filed by respondent and
partially granting that of the other petitioners. The dispositive portion of the NLRC decision reads as
follows:

WHEREFORE, premises considered, respondent’s appeal is DISMISSED for lack of merit. The
appeal of the complainants is, however, PARTIALLY GRANTED by modifying the 23 May 2003
Decision of the Labor Arbiter Facundo L. Leda, in that, respondents are ordered to reinstate all the
complainants to their former positions, without loss of seniority rights and with full backwages,
counted from the time their compensation was withheld from them until actual reinstatement.

Respondents are likewise ordered to pay complainants their salary differentials, service incentive
leave pay, and 13th month pay, using, as basis, the computation made on the claims of complainant
Felix Martos.

In all other aspects, the Decision is AFFIRMED.

SO ORDERED. 8

Ruling Of The CA

After the denial of its motion for reconsideration, respondent filed before the CA a petition for
certiorari under Rule 65 of the 1997 Rules of Civil Procedure, as amended, raising the following
issues:

I) The public respondent has committed grave abuse of discretion in holding that the private
respondents were regular employees and, thus, have been illegally dismissed.

II) The public respondent has committed grave abuse of discretion in reviving the complaints
of the other private respondents despite their failure to verify the same.

III) The public respondent has committed grave abuse of discretion when it upheld the
findings of the Labor Arbiter granting relief in favor of those supposed complainants who did
not even render service to the petitioner and, hence, are not on its payroll.

On July 31, 2009, the CA rendered a decision reversing and setting aside the July 30, 2008 Decision
and the October 28, 2008 Resolution of the NLRC and reinstating the May 23, 2003 Decision of the
LA. The dispositive portion of the CA decision reads:

WHEREFORE, premises considered, the present petition is hereby GRANTED. Accordingly, the
assailed Resolution dated October 28, 2008 of public respondent National Labor Relations
Commission is REVERSED and SET ASIDE, and the Decision dated May 23, 2003 of Labor Arbiter
Facundo L. Leda, is hereby ordered reinstated.

SO ORDERED. 9

The CA explained that the NLRC committed grave abuse of discretion in reviving the complaints of
petitioners despite their failure to verify the same. Out of the 102 complainants, only Martos verified
the position paper and his counsel never offered any explanation for his failure to secure the
verification of the others. The CA also held that the NLRC gravely abused its discretion when it took
cognizance of petitioners’ appeal because Rule 41, Section 1(h) of the 1997 Rules of Civil
Procedure, as amended, which is suppletory, provides that no appeal may be taken from an order
dismissing an action without prejudice.

Nevertheless, the CA stated that the factual circumstances of Martos’ employment and his dismissal
from work could not equally apply to petitioners because they were not similarly situated. The NLRC
did not even bother to look at the evidence on record and inappropriately granted monetary awards
to petitioners who had either denied having filed a case or withdrawn the case against respondent.
According to the CA, the position papers should have covered only those claims and causes of
action raised in the complaint excluding those that might have been amicably settled.

With respect to Martos, the CA ruled that he was a regular employee of respondent and his
termination was illegal. It explained that Martos should have been considered a regular employee
because there was no indication that he was merely a project employee when he was hired. To
show otherwise, respondent should have presented his employment contract for the alleged specific
project and the successive employment contracts for the different projects or phases for which he
was hired. In the absence of such document, he could not be considered such an employee
because his work was necessary and desirable to the respondent’s usual business and that he was
not required to sign any employment contract fixing a definite period or duration of his engagement.
Thus, Martos already attained the status of a regular employee. Moreover, the CA noted that
respondent did not report the termination of Martos’ supposed project employment to the
Department of Labor and Employment (DOLE), as required under Department Order No. 19.

Being a regular employee, the CA concluded that he was constructively dismissed when he was
asked to sign a new appointment paper indicating therein that he was a project employee and that
his appointment would be co-terminus with the project.

Not in conformity with the CA decision, petitioners filed this petition anchored on the following

ASSIGNMENT OF ERRORS

WITH DUE RESPECT, THE HONORABLE COURT OF APPEALS AND THE LABOR
ARBITER BELOW GRAVELY ERRED IN DISMISSING THE COMPLAINTS OF THE
NINETY NINE (99) PETITIONERS DUE TO FAILURE OF THE LATTER TO VERIFY THEIR
POSITION PAPER WHEN, OBVIOUSLY, SUCH TECHNICALITY SHOULD NOT HAVE
BEEN RESORTED TO BY THEM AS IT WILL DEPRIVE THESE PETITIONERS OF THEIR
PROPERTY RIGHT TO WORK.

WITH DUE RESPECT, THE HONORABLE COURT OF APPEALS AND THE LABOR
ARBITER BELOW GRAVELY ERRED IN NOT ORDERING THE REINSTATEMENT OF
PETITIONER MARTOS AND THE OTHER 99 PETITIONERS WHEN, OBVIOUSLY, AND
AS FOUND BY THEM, THE DISMISSAL OF MARTOS IS ILLEGAL WHICH WOULD
WARRANT HIS REINSTATEMENT AND THE GRANT TO HIM OF FULL BACKWAGES
AND OTHER EMPLOYEES’ BENEFITS.

WITH DUE RESPECT, THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN

NOT ORDERING THE RESPONDENTS TO PAY THE PETITIONERS ACTUAL, MORAL
AND EXEMPLARY DAMAGES.

Position of Petitioners

Petitioners basically argue that the CA was wrong in affirming the dismissal of their complaints due
to their failure to verify their position paper. They insist that the lack of verification of a position paper
is only a formal and not a jurisdictional defect. Hence, it was not fatal to their cause of action
considering that the CA could have required them to submit the needed verification.

The CA overlooked the fact that all of them verified their complaints by declaring under oath relevant
and material facts such as their names, addresses, employment status, salary rates, facts, causes of
action, and reliefs common to all of them. The information supplied in their complaints is sufficient to
prove their status of employment and entitlement of their monetary claims. In the adjudication of
labor cases, the adherence to stringent technical rules may be relaxed in the interest of the working
man. Moreover, respondent failed to adduce evidence of payment of their money claims.
Finally, petitioners argue that they and Martos were similarly situated. The award of separation pay
instead of reinstatement to an illegally dismissed employee was improper because the strained
relations between the parties was not clearly established. Moreover, they are entitled to actual,
moral and exemplary damages for respondent’s illegal act of violating labor standard laws, the
minimum wage law and the 13th month pay law.

Position of Respondents

On the other hand, respondent principally counters that the CA and the LA 1) did not err in
dismissing the complaints of the 88 petitioners who failed to verify their position paper, without
prejudice; 2) correctly ruled that Martos and the 88 petitioners concerned were not entitled to
reinstatement; and 3) correctly ruled that petitioners were not entitled to an award of actual, moral
and exemplary damages.

Petitioners have the propensity to disregard the mandatory provisions of the 2005 Revised Rules of
Procedure of the NLRC (NLRC Rules) which require the parties to submit simultaneously their
verified position papers with supporting documents and affidavits. In the proceedings before the LA,
the complaints of the 99 workers were dismissed because they failed to verify or affix their
signatures to the position paper filed with the LA.

While it is true that the NLRC Rules must be liberally construed and that the NLRC is not bound by
the technicalities of law and procedure, it should not be the first to arbitrarily disregard specific
provisions of the rules which are precisely intended to assist the parties in obtaining just, expeditious
and inexpensive settlement of labor disputes. It was only Felix Martos who verified their position
paper and their memorandum of appeal. It was only he alone who was vigilant in looking after his
interest and enforcing his rights. Petitioners should be considered to have waived their rights and
interests in the case for their consistent neglect and passive attitude.

Moreover, Martos was never authorized by any of his fellow complainants through a special power of
attorney or other document in the proceedings to represent them before the LA and the NLRC. His
acts and verifications were made only in his own personal capacity and did not bind or benefit
petitioners. There is only one logical reason why a majority of them failed to verify their position
paper, their appeal and now their petition: they were not in any way employees of the respondent.
They were total strangers to the respondent. They even refused to identify themselves during the
proceedings by their failure to appear thereat. Hence, it is too late for the others to participate in the
fruits, if any, of this litigation.

Finally, the reinstatement being sought by Martos and the others was no longer practicable because
of the strained relation between the parties. Petitioners can no longer question this fact. This issue
was never raised or taken up on appeal before the NLRC. It was only when the petitioners lost in the
appeal in the CA that they first raised the issue of strained relation. Moreover, no proof of actual
damages was presented by the petitioners. There is no clear and convincing evidence on record
showing that the termination of an employee’s services had been carried out in an arbitrary,
capricious or malicious manner.

The Court’s Ruling

The Court is basically asked to resolve two (2) issues: 1 whether or not the CA was correct in
dismissing the complaints filed by those petitioners who failed to verify their position papers; and 2
whether or not Martos should be reinstated.

Regarding the first issue, the Court agrees with the respondent.

Sections 4 and 5 of Rule 7 of the 1997 Rules of Civil Procedure provide:

SEC. 4. Verification. – Except when otherwise specifically required by law or rule, pleadings need
not be under oath, verified or accompanied by affidavit.

A pleading is verified by an affidavit that the affiant has read the pleadings and that the allegations
therein are true and correct of his personal knowledge or based on authentic records.
A pleading required to be verified which contains a verification based on "information and belief" or
upon "knowledge, information and belief" or lacks a proper verification, shall be treated as an
unsigned pleading.

SEC. 5. Certification against forum shopping. – The plaintiff or principal party shall certify under oath
in the complaint or other initiatory pleading asserting a claim for relief, or in a sworn certification
annexed thereto and simultaneously filed therewith:

(a) that he has not theretofore commenced any action or filed any claim involving the same issues in
any court, tribunal or quasi-judicial agency and, to the best of his knowledge, no such other action or
claim is pending therein; (b) if there is such other pending action or claim, a complete statement of
the present status thereof; and (c) if he should thereafter learn that the same or similar action or
claim has been filed or is pending, he shall report that fact within five (5) days therefrom to the court
wherein his aforesaid complaint or initiatory pleading has been filed.

Failure to comply with the foregoing requirements shall not be curable by mere amendment of the
complaint or other initiatory pleading but shall be cause for the dismissal of the case without
prejudice, unless otherwise provided, upon motion and after hearing. The submission of a false
certification or non-compliance with any of the undertakings therein shall constitute indirect contempt
of court, without prejudice to the corresponding administrative and criminal actions. If the acts of the
party or his counsel clearly constitute willful and deliberate forum shopping, the same shall be
ground for summary dismissal with prejudice and shall constitute direct contempt, as well as a cause
for administrative sanctions. x x x. [Emphases supplied]

The verification requirement is significant, as it is intended to secure an assurance that the

allegations in the pleading are true and correct and not the product of the imagination or a matter of
speculation, and that the pleading is filed in good faith. Verification is deemed substantially complied
10 

with when, as in this case, one who has ample knowledge to swear to the truth of the allegations in
the complaint or petition signs the verification, and when matters alleged in the petition have been
made in good faith or are true and correct. 11

The absence of a proper verification is cause to treat the pleading as unsigned and dismissible. 12

The lone signature of Martos would have been sufficient if he was authorized by his co-petitioners to
sign for them. Unfortunately, petitioners failed to adduce proof that he was so authorized. The
complaints of the other parties in the case of Nellie Vda. De Formoso v. v. PNB suffered a similar
13 

fate. Thus:

Admittedly, among the seven (7) petitioners mentioned, only Malcaba signed the verification and
certification of non-forum shopping in the subject petition. There was no proof that Malcaba was
authorized by his co-petitioners to sign for them. There was no special power of attorney shown by
the Formosos authorizing Malcaba as their attorney-in-fact in filing a petition for review on certiorari.
Neither could the petitioners give at least a reasonable explanation as to why only he signed the
verification and certification of non-forum shopping.

The liberal construction of the rules may be invoked in situations where there may be some
excusable formal deficiency or error in a pleading, provided that the same does not subvert the
essence of the proceeding and it at least connotes a reasonable attempt at compliance with the
rules. Besides, fundamental is the precept that rules of procedure are meant not to thwart but to
facilitate the attainment of justice; hence, their rigid application may, for deserving reasons, be
subordinated by the need for an apt dispensation of substantial justice in the normal course. They
ought to be relaxed when there is subsequent or even substantial compliance, consistent with the
policy of liberality espoused by Rule 1, Section 6. Not being inflexible, the rule on verification allows
14 

for such liberality.

15

Considering that the dismissal of the other complaints by the LA was without prejudice, the other
complainants should have taken the necessary steps to rectify their procedural mistake after the
decision of the LA was rendered. They should have corrected this procedural flaw by immediately
filing another complaint with the correct verification this time. Surprisingly, they did not even attempt
to correct this technical blunder. Worse, they committed the same procedural error when they filed
their appeal with the NLRC.
16 
Under the circumstances, the Court agrees with the CA that the dismissal of the other complaints
were brought about by the own negligence and passive attitude of the complainants themselves. In
Formoso, the Court further wrote:

The petitioners were given a chance by the CA to comply with the Rules when they filed their motion
for reconsideration, but they refused to do so. Despite the opportunity given to them to make all of
them sign the verification and certification of non-forum shopping, they still failed to comply. Thus,
the CA was constrained to deny their motion and affirm the earlier resolution.

The Court can only do so much for them.

Most probably, as the list submitted is not complete with the information as to when each started
17 

and when each was dismissed there must be some truth in the claim of respondent that those
complainants who failed to affix their signatures in the verification were either not employees of
respondent at all or they simply refused to prosecute their complaints. In its position
paper, respondent alleged that, aside from the four (4) complainants who withdrew their complaints,
18 

only 17 out of the more or less 104 complainants appeared on its records as its former project
employees or at least known by it to have worked in one of its construction projects. From the sworn
statements executed by Felix Yortas, Marvin Batta,
19  20

Lito Bantillo, Gavino Felix Nicolas, and Romeo Pangacian Martos, they already withdrew their
21  22  23 

complaints against respondent. Their status and cause of action not being clear and proven, it is just
not right that these complaints be considered as similarly situated as Martos and entitled to the same
benefits.

As to Martos, the Court agrees that the reinstatement being sought by him was no longer practicable
because of strained relation between the parties. Indeed, he can no longer question this fact. This
issue was never raised or taken up on appeal before the MLRC. It was only after he lost the appeal
in the CA that he raised it.

Thus, the Court deems it fair to award separation pay in lieu of reinstatement.  In addition to his
1âwphi1

separation pay. Martos is also entitled to payment of full backwages, 13th month pay, service
incentive leave pay, and attorney’s fees.

The accepted doctrine is that separation pay may avail in lieu of reinstatement if reinstatement is no
longer practical or in the best interest of the parties. Separation pay in lieu of reinstatement may
likewise be awarded if the employee decides not to be reinstated.

Under the doctrine of stained relations, the payment of separation pay is considered an acceptable
alternative to reinstatement when the latter opinion is no longer desirable or viable. On one hand,
such payment liberates the employee from what could be highly oppressive work environment. On
the other hand, it release the employer from the grossly unpalatable obligation of maintaining in its
employ a worker it could no longer trust. 24

WHEREFORE, the petition is DENIED.

SO ORDERED.

JOSE CATRAL MENDOZA

Associate Justice

WE CONCUR:

PRESBITERO J. VELASCO, JR.

Associate Justice

TERESITA J. LEONARDO-DE CASTRO* ARTURO D. BRION**

Associate Justice Associate Justice

DIOSDADO M. PERALTA
Associate Justice
 ATTESTATION

I attest that the conclusions in the above Decision had been reached in consultation before the case
was assigned to the writer of the opinion of the Court’s Division.

PRESBITERO J. VELASCO, JR.

Associate Justice
Chairperson, Third Division

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson’s Attestation, I
certify that the conclusions in the above Decision had been reached in consultation before the case
was assigned to the writer of the opinion of the Court’s Division.

MARIA LOURDES P. A. SERENO

Chief Justice

Footnotes

* Designated acting member, per Special Order No. 1343, dated October 9, 2012.

** Designated additional member, per Special Order No. 1332, dated October 9, 2012.

Rollo, pp. 66-84 (Penned by Associate Justice Juan Q. Enriquez, Jr. and concurred in by
1 

Associate Justice Celia C. Librea-Leagogo and Associate Justice Antonio L. Villamor).

Id. at 87-88.
2 

Id. at 125-132.
3 

Id. at 123-124.
4 

Id. at 304-315.
5 

Id. at 314-315.
6 

Id. at 68-72.
7 

Id. at 132.
8 

Id. at 83.
9 

10 
Christine Chua v. Jorge Torres & Antonio Beltran, 505 Phil. 455, 461 (2005).

Georgia T. Estel v. Recaredo P. Diego, Sr., G.R. No. 174082, January 16, 2012, 663 SCRA
11 

17, 27, citing Nellie Vda. de Formoso v. Philippine National Bank, G.R. No. 154704, June 1,
2011, 650 SCRA 35.

12 
Christine Chua v. Jorge Torres & Antonio Beltran, supra note 10.

13 
G.R. No. 154704, June 1, 2011, 650 SCRA 35, 45.

SEC. 6. Construction. — These Rules shall be liberally construed in order to promote their
14 

objective of securing a just, speedy and inexpensive disposition of every action and
proceeding.

15 
Edito Pagadora v. Julieta S. Ilao, G.R. No. 165769, December 12, 2011, 662 SCRA 14, 25.
16 
Rollo, pp. 263-281

17 
Id. at 139-140-147.

18 
Id. at 148-174.

19 
Id. at 236.

20 
Id. at 237.

21 
Id. at 238.

22 
Id. at 239.

23 
Id. at 240.

Golden Ace Builders and Arnold U. Azul v. Jose A. Talde, G.R. No. 187200, May 5, 2010,
24 

620 SCRA 283, 289-290