SUPREME COURT

SECOND DIVISION

ZEL T. ZAFRA and EDWIN B. ECARMA,

Petitioners,

-versus- G.R. No. 139013

September 17, 2002

HON. COURT OF APPEALS,

PHILIPPINE LONG DISTANCE
TELEPHONE CO., INC., AUGUSTO
COTELO, and ERIBERTO MELLIZA,
Respondents.
x---------------------------------------------------x

DECISION

QUISUMBING, J.:

For Review on Certiorari is the Decision[1] of the Court of Appeals

dated December 22, 1998, in CA-G.R. SP. No. 48578, reversing that of
the voluntary arbitrator which ordered respondent Philippine Long
Distance Telephone Co. (PLDT) to reinstate petitioners. Also
impugned is the resolution dated May 24, 1999, denying petitioners’
motion for reconsideration. chanroblespublishingcompany

The undisputed facts, as set forth in the decision of the Court of

Appeals, are as follows: chanroblespublishingcompany
Petitioner Zel T. Zafra was hired by PLDT on October 1, 1984 as
Operations Analyst II with a monthly salary of P14,382 while co-
petitioner Edwin B. Ecarma was hired as Junior Operations Analyst I
on September 16, 1987 at a monthly rate of P12,032. Both were
regular rank-and-file employees assigned at the Regional Operations
and Maintenance Control Center (ROMCC) of PLDT’s Cebu
Provincial Division. They were tasked to maintain the operations and
maintenance of the telephone exchanges in the Visayas and
Mindanao areas.[2] chanroblespublishingcompany

In March 1995, petitioners were chosen for the OMC Specialist and
System Software Acceptance Training Program in Germany in
preparation for “ALCATEL 1000 S12,” a World Bank-financed PLDT
project in line with its Zero Backlog Program. ALCATEL, the foreign
supplier, shouldered the cost of their training and travel expenses.
Petitioners left for Germany on April 10, 1995 and stayed there until
July 21, 1995.[3] chanroblespublishingcompany

On July 12, 1995, while petitioners were in Germany, a certain Mr. R.

Relucio, SwitchNet Division Manager, requested advice, through an
inter-office memorandum, from the Cebu and Davao Provincial
Managers if any of the training participants were interested to
transfer to the Sampaloc ROMCC to address the operational
requirements therein. The transfer was to be made before the
ALCATEL exchanges and operations and maintenance center in
Sampaloc would become operational. chanroblespublishingcompany

Upon petitioners’ return from Germany, a certain Mr. W.P.

Acantillado, Senior Manager of the PLDT Cebu Plant, ;informed them
about the memorandum. They balked at the idea, but PLDT, through
an inter-office memorandum dated December 21, 1995, proceeded to
transfer petitioners to the Sampaloc ROMCC effective January 3,
1996.[4]chanroblespublishingcompany

Petitioners left Cebu for Manila on December 27, 1995 to air their
grievance to PLDT and to seek assistance from their union head office
in Mandaluyong. PLDT ordered petitioners to report for work on
January 16, 1996, but they asked for a deferment to February 1, 1996.
Petitioners reported for work at the Sampaloc office on January 29,
1996. Meanwhile PLDT moved the effectivity date of their transfer to
March 1, 1996. On March 13, 1996, petitioners again appealed to
PLDT to no avail. And, because all their appeals fell on deaf ears,
petitioners, while in Manila, tendered their resignation letters on
March 21, 1996. Consequently, the expenses for their training in
Germany were deducted from petitioners’ final pay. chanroblespublishingcompany

On September 11, 1996, petitioners filed a complaint with the

National Labor Relations Commission Regional Arbitration Branch
No. 7 for alleged constructive dismissal and non-payment of benefits
under the Collective Bargaining Agreement.[5] In an order dated
November 10, 1996, the presiding labor arbiter referred the complaint
to the National Conciliation and Mediation Board, Cebu City, for
appropriate action.[6] On January 17, 1997, the parties agreed to
designate lawyer Rolando M. Lim as their voluntary arbitrator.[7]
chanroblespublishingcompany

In their complaint, petitioners prayed that their dismissal from

employment be declared illegal. They also asked for reinstatement
with full backwages, refund of unauthorized deductions from their
final pay, including damages, costs of litigation, and attorney’s fees.[8]

Respondent PLDT, for its part, averred that petitioners agreed to

accept any assignment within PLDT in their application for
employment[9] and also in the undertaking[10] they executed prior to
their training in Germany. It prayed that petitioners’ complaint be
dismissed. chanroblespublishingcompany

After submission of their respective position papers and admission of

facts, the case was set for hearing. Petitioners presented their
witnesses and made their formal offer of documentary evidence.
PLDT, however, requested for a re-setting of the hearing from
October 9 and 10, 1997 to November 10 and 11, 1997.[11] But on those
dates PLDT did not appear. Nor did it file any notice of postponement
or motion to cancel the hearings.[12] chanroblespublishingcompany

Upon petitioners’ motion and pursuant to Article 262-A of the Labor

Code,[13] the voluntary arbitrator issued an order admitting all
documentary exhibits offered in evidence by petitioners and.
submitting the case for resolution.[14] In said order, PLDT was
declared to have waived its right to present evidence on account of its
unjustified failure to appear in the November 10 to 11 hearings.
chanroblespublishingcompany
On December 1, 1997, the voluntary arbitrator issued a decision which
reads:

IN VIEW OF ALL THE FOREGOING CONSIDERATIONS,

judgment is hereby rendered in the above case, in favor of
complainants Zel Zafra and Edwin Ecarma and against
respondent PLDT, as follows:

1. Declaring that complainants were illegally dismissed

by reason of the forced resignations or constructive
discharge from their respective employment with
PLDT;

2. Ordering the reinstatement of complainants without

loss of seniority rights and other privileges, and
granting the award of full backwages from April 22,
1996, inclusive of allowances granted in the CBA or
their monetary equivalent computed from the time
complainants’ compensation were withheld up to the
time of their actual reinstatement, or in lieu thereof,
ordering the payment of separation pay with full
backwages; chanroblespublishingcompany

3. Ordering the refund of P35,721.81 to complainant

Zafra and P24,186.67 to complainant Ecarma, which
amounts constitute as unauthorized deductions from
their final pay;

4. Ordering payment of P50,000.00 as moral damages;

P20,000.00 as exemplary damages and P20,000.00 as
refund for litigation expenses; chanroblespublishingcompany

5. Ordering payment of 10% Attorney’s Fees computed on

all adjudicated claims. chanroblespublishingcompany

SO ORDERED.[15]

PLDT’s motion for reconsideration of the above decision was denied

on July 10, 1998.[16] On August 7, 1998, PLDT initiated a special civil
action for certiorari with the Court of Appeals,[17] which was treated
as a petition for review.[18] On December 22, 1998, the CA ruled in
favor of PLDT and reversed the voluntary arbitrator’s decision, in this
wise:

WHEREFORE, the instant petition is hereby given due course.

Accordingly, the assailed Order is hereby REVERSED with the
exception of the refund, which is hereby ordered, of the amount
of P35,721.81 to respondent Zafra and P24,186.67 to
respondent Ecarma representing unauthorized deductions from
their final pay.

SO ORDERED.[19]

Zafra and Ecarma as respondents below moved for reconsideration of

the CA decision which, however, was denied on May 24, 1999.[20]
chanroblespublishingcompany

Petitioners now anchor their petition on the following grounds:

I. THE COURT OF APPEALS HAS DECIDED A QUESTION

OF SUBSTANCE IN THE RESPONDENTS’ PETITION IN
A WAY PROBABLY NOT IN ACCORD WITH THE LAW
OR THE APPLICABLE DECISIONS OF THE SUPREME
COURT.

A. THE COURT A QUO, INSTEAD OF RESOLVING

ERRORS OF JURISDICTION ALLEGED IN THE
RESPONDENTS’ PETITION ERRED IN RENDERING
THE DECISION ON ITS MERITS, IN EFFECT NOT
ACCORDING RESPECT AND SETTING ASIDE THE
VOLUNTARY ARBITRATOR’S EVALUATION OF THE
EVIDENCE AND FACTUAL FINDINGS BASED
THEREON. chanroblespublishingcompany

B. THE COURT A QUO, IN GIVING DUE COURSE TO

THE RESPONDENTS’ PETITION ERRED IN
PROCEEDING TO RESOLVE THE SAME ON THE
MERITS, WITHOUT FIRST REVIEWING THE
ENTIRE RECORD OF THE PROCEEDINGS OF THE
VOLUNTARY ARBITRATOR. chanroblespublishingcompany
 II. THE COURT OF APPEALS HAS DEPARTED FROM THE
ACCEPTED AND USUAL COURSE OF JUDICIAL
PROCEEDINGS, AS TO CALL FOR AN EXERCISE OF
THE HONORABLE SUPREME COURT’S SUPERVISION.

A. THE COURT A QUO COMMITTED GRAVE ABUSE

OF DISCRETION IN RENDERING THE DECISION
THROUGH ITS UTTER DISREGARD OF THE
APPROPRIATE MODE OF APPEAL TO BE TAKEN BY
THE RESPONDENTS FROM THE JUDGMENT OF
THE VOLUNTARY ARBITRATOR. chanroblespublishingcompany

B. THE COURT A QUO COMMITTED GRAVE ABUSE

OF ITS DISCRETION IN TREATING JOINTLY THE
RESPONDENTS’ PETITION EITHER AS AN APPEAL
UNDER RULE 43, OR IN THE ALTERNATIVE, A
SPECIAL CIVIL ACTION FOR CERTIORARI UNDER
RULE 65. chanroblespublishingcompany

C. THE COURT A QUO COMMITTED GRAVE ABUSE

OF ITS DISCRETION IN FAILING TO DISMISS THE
RESPONDENTS’ PETITION FOR CERTIORARI
OUTRIGHTLY FOR FAILURE TO COMPLY WITH
THE STRICT REQUIREMENTS IN THE FILING
THEREOF.[21] chanroblespublishingcompany

Briefly, the issues in this case may be restated as follows: (1) whether
or not the CA erred in treating the special civil action for certiorari
filed by respondent as a petition for review, and (2) whether or not
the CA erred in its appreciation of facts and the decision it rendered.

Petitioners invoke Luzon Development Bank vs. Association of Luzon

Development Bank Employees, et al.[22] and Rule 43 of the 1997 Rules
of Civil Procedure[23] in arguing that an appeal and not a petition for
certiorari should be the proper remedy to question the decision or
award of the voluntary arbitrator. Even assuming that Rule 65
applies, petitioners argue that PLDT, nevertheless, erred in not
including the voluntary arbitrator as one of the respondents in the
petition and in not serving him a copy thereof.[24] These procedural
flaws, they aver, merit the outright dismissal by the CA of the
petition.[25]
chanroblespublishingcompany

A perusal of the petition before the CA shows that the mode chosen by
PLDT was a petition for review under Rule 43 and not a special civil
action for certiorari under Rule 65. While it was captioned as a
petition for certiorari, it is not the caption of the pleading but the
allegations therein that determine the nature of the action.[26] The
appellate court was not precluded from granting relief as warranted
by PLDT’s allegations in the petition and the evidence it had
presented to support the petition. chanroblespublishingcompany

A perusal of the petition before the CA discloses the following: First,

under the heading “Nature of the Action”, the PLDT averred it was “a
petition for review on certiorari of the Decision dated December 1,
1997 and Order dated July 10, 1998 of Voluntary Arbitrator Atty.
Rolando M. Lim.”[27] Second, while the assigned errors alleged that
the voluntary arbitrator acted with grave abuse of discretion,
nevertheless, the issue set forth was whether or not there existed
sufficient evidence to show that complainants [herein petitioners]
were constructively dismissed, and whether they were entitled to
reinstatement, back wages and other monetary awards.[28] Clearly, the
issue was factual and not limited to questions of jurisdiction and
grave abuse of discretion. Third, the petition was filed within the 15-
day period to perfect an appeal and did not implead the voluntary
arbitrator as a respondent. All of these indicate that the petition
below was indeed one for review. chanroblespublishingcompany

Moreover, contrary to petitioners’ contention that the voluntary

arbitrator was not furnished a copy of the petition, the records reveal
otherwise. Attached to the petition filed before the appellate court
was a registry receipt of the copy sent to the voluntary arbitrator.[29]

Coming now to the substantive merits of the petition before us.

Considering that the CA’s findings of fact clash with those of the
voluntary arbitrator, with contradictory results, this Court is
compelled to go over the records of the case as well as the
submissions of the parties. Having done so carefully, we are not
convinced that the voluntary arbitrator erred in his factual
conclusions so as to justify reversal thereof by the appellate court. We
are persuaded to rule in favor of the complaining workers, herein
petitioners, following the well-established doctrine in labor-
management relations that in case of doubt, labor should prevail.

The fact that petitioners, in their application for employment,[30]

agreed to be transferred or assigned to any branch[31] should not be
taken in isolation, but rather in conjunction with the established
company practice in PLDT. chanroblespublishingcompany

The standard operating procedure in PLDT is to inform personnel

regarding the nature and location of their future assignments after
training abroad. This prevailing company practice is evidenced by the
inter-office memorandum[32] of a certain PLDT’s First Vice President
(Reyes), dated May 3, 1996 to PLDT’s Chief Operating Officer (Perez),
duly-acknowledged by private respondents:

x x x

To : Atty. E.D. Perez, SEVP & COO

Thru : J.P. de Jesus, EVP — Meet Demand Group
From : FVP — Program Planning & Engineering
Sector
Subject : NON-ASSIGNABLE TRAINED PERSONNEL

During the Group Head’s Meeting on 03 April 1996, Mr. R.R.

Zarate reported on the case of some provincial personnel who
had foreign training for functions intended for Manila
Operations but refused to be relocated and assigned to Manila,
and who eventually resigned on account of the said transfer. In
view of this situation, two (2) issues were raised as follows:
chanroblespublishingcompany

1. Network Services to be involved in the planning of

facilities, specially when this involves trainees from
Network.

2. Actual training to be undertaken only after the sites

where such training will be utilized have been
determined. chanroblespublishingcompany

x x x
A total of 53 slots (for the Exchange O&M, System
Software/Acceptance Engineering and OMC Specialist Courses) were
allocated to Network Services by the Steering Committee composed of
representatives from ProgPlan and TechTrain. The O&M slots were
equally distributed to Provincial Operations on the basis where
Alcatel switches will be geographically installed. With regards to NSC,
since the contract has defined its location to be in Sampaloc and
considering that its monitoring function would focus on provincial
exchanges, slots were opened both for Provincial and Metro Manila
Operations. Please note that all these relevant informations were
disseminated to concerned parties as inputs, to enable them to
recommend the appropriate training participants. chanroblespublishingcompany

The choice of trainees were made by Network and therefore, it is

incumbent upon them to brief the participants or trainees they
selected on the nature and assignment of their employment after
training.

To prevent similar instances in the future, we strongly recommend

the following:

1. Prior to the training, all concerned groups should conform

with the standard practice of informing personnel regarding
the nature and/or location of their future assignments after
the training.

2. The contractual obligation of the trainees should include a

provision on their willingness and commitment to perform
the related training functionalities required by the company.

x x x (Emphasis supplied.)

The want of notice of transfer to petitioners was the subject of

another inter-office memorandum dated November 24, 1995, from
one Mr. Relucio, SwitchNet Division Manager, to a certain Mr.
Albania, First Vice President-Regional & Toll Network. It states: chanroblespublishingcompany

As the cheaper option is to relocate personnel who have

attended the training already, we have solicited the desire of the
 Cebu and Davao-based provincial personnel to transfer to
SwitchNet Sampaloc ROMCC which they declined. We should
note that these personnel were not made aware prior to start of
training that they will be transferred to Manila.[33]

A third inter-office memorandum dated November 29, 1995

confirmed this procedural flaw, thus:

Alternative 1: Require the four Jones and Davao ROMCC

personnel to transfer [to] the Sampaloc ROMCC, as service
requirement. This is the least cost alternative. We should note
however, that these personnel were not aware that they would
relocate after training.[34]

Under these circumstances, the need for the dissemination of notice

of transfer to employees before sending them abroad for training
should be deemed necessary and later to have ripened into a company
practice or policy that could no longer be peremptorily withdrawn,
discontinued, or eliminated by the employer. Fairness at the
workplace and settled expectations among employees require that we
honor this practice and commend this policy. chanroblespublishingcompany

The appellate court’s justification that petitioners’ transfer was a

management prerogative did not quite square with the preceding
evidence on record, which are not disputed. To say that petitioners
were not constructively dismissed inasmuch as the transfer was
effected without demotion in rank or diminution of salary benefits is,
to our mind, inaccurate. It is well to remember that constructive
dismissal does not always involve forthright dismissal or diminution
in rank, compensation, benefits, and privileges. For an act of clear
discrimination, insensibility, or disdain by an employer may become
so unbearable on the part of the employee that it could foreclose any
choice by him except to forego his continued employment.[35] The
insensibility of private respondents is at once deducible from the
foregoing circumstances. chanroblespublishingcompany

Despite their knowledge that the lone operations and maintenance

center of the 33 ALCATEL 1000 S12 Exchanges would be “homed” in
Sampaloc,[36] PLDT officials neglected to disclose this vital piece of
information to petitioners before they acceded to be trained abroad.
On arriving home, they did not give complaining workers any other
option but placed them in an either/or straightjacket, that appeared
too oppressive for those concerned.

As pointed out in the abovementioned inter-office memorandum by

Mr. Reyes:

All sites where training will be utilized are already pre-

determined and pinpointed in the contract documents and
technical protocols signed by PLDT and the contractor. Hence,
there should be no reason or cause for the misappointment of
the training participants.[37]

Needless to say, had they known about their pre-planned

reassignments, petitioners could have declined the foreign training
intended for personnel assigned to the Manila office. The lure of a
foreign trip is fleeting while a reassignment from Cebu to Manila
entails major and permanent readjustments for petitioners and their
families.

We are not unaware that the transfer of an employee ordinarily lies

within the ambit of management prerogatives. However, a transfer
amounts to constructive dismissal when the transfer is unreasonable,
inconvenient, or prejudicial to the employee, and involves a demotion
in rank or diminution of salaries, benefits, and other privileges.[38] In
the present case, petitioners were unceremoniously transferred,
necessitating their families’ relocation from Cebu to Manila. This act
of management appears to be arbitrary without the usual notice that
should have been done even prior to their training abroad. From the
employees’ viewpoint, such action affecting their families are
burdensome, economically and emotionally. It is no exaggeration to
say that their forced transfer is not only unreasonable, inconvenient,
and prejudicial, but to our mind, also in defiance of basic due process
and fair play in employment relations.

WHEREFORE, this Petition for Review is GRANTED. The

decision of the Court of Appeals in CA-G.R. SP No. 48578; dated
December 22, 1998, is REVERSED and SET ASIDE. The decision
of the Voluntary Arbitrator dated December 1, 1997, is
REINSTATED. No pronouncement as to costs. chanroblespublishingcompany
SO ORDERED. chanroblespublishingcompany

Bellosillo, Mendoza, Austria-Martinez and Callejo, Jr., JJ.,

concur. chanroblespublishingcompany

chanroblespublishingcompany

[1] Rollo, pp. 36-43.

[2] Id. at 37.
[3] Ibid.chanroblespublishingcompany

[4] Id. at 37-38.

[5] Id. at 36-37.
[6] Id. at 37.
[7] Ibid.chanroblespublishingcompany

[8] Id. at 38.

[9] CA Rollo, pp. 49-50.
[10] Id. at 45 and 47.
[11] Rollo, p. 38. chanroblespublishingcompany

[12] Id. at 39. chanroblespublishingcompany

[13] Article 262-A, Labor Code. Procedures. —

x x x
Unless the parties agree otherwise, it shall be mandatory for the Voluntary
Arbitrator or panel of Voluntary Arbitrators to render an award or decision
within twenty (20) calendar days from the date of the submission of the
dispute to voluntary arbitration. chanroblespublishingcompany

x x x
[14] CA Rollo, p. 42.
[15] Rollo, pp. 77-78.
[16] CA Rollo, p. 41.
[17] Id. at 2. chanroblespublishingcompany

[18] Rollo, p. 36.

[19] Id. at 43. chanroblespublishingcompany

[20] Id. at 56-A. chanroblespublishingcompany

[21] Id. at 20-21. chanroblespublishingcompany

[22] 249 SCRA 162, 170 (1995).

[23] SEC. 5, Rule 43, 1997 Rules of Court. How appeal taken. — Appeal shall be
taken by filing a verified petition for review in seven (7) legible copies with
the Court of Appeals, with proof of service of a copy thereof on the adverse
party and on the court or agency a quo. The original copy of the petition
intended for the Court of Appeals shall be indicated as such by the
petitioner. (Emphasis ours.) chanroblespublishingcompany

x x x
[24] SEC. 5, Rule 65, 1997 Rules of Court. Respondents and costs in certain
cases. — When the petition filed relates to the acts or omissions of a judge,
court, quasi-judicial agency, tribunal, corporation, board, officer or person,
 the petitioner shall join, as private respondent or respondents with such
public respondent or respondents, the person or persons interested in
sustaining the proceedings in the court; and it shall be the duty of such
private respondents to appear and defend, both in his or their own behalf
and in behalf of the public respondent or respondents affected by the
proceedings, and the costs awarded in such proceedings in favor of the
petitioner shall be against the private respondents only, and not against the
judge, court, quasi-judicial agency, tribunal, corporation, board, officer or
person impleaded as public respondent or respondents. (Emphasis ours.)
x x x
[25] Rollo, pp. 22-23.
[26] Almuete, et al. vs. Andres, et al., G.R. No. 122276, November 20, 2001, p. 9.
[27] Rollo, p. 80; CA Rollo, p. 3.
[28] Id. at 90.chanroblespublishingcompany

[29] CA Rollo, p. 24.

[30] Id. at 45-48. chanroblespublishingcompany

[31] Id. at 49-50. chanroblespublishingcompany

[32] Id. at 51-52. chanroblespublishingcompany

[33] Rollo, p. 73. chanroblespublishingcompany

[34] Id. at 74.

chanroblespublishingcompany

[35] Litonjua Group of Companies, et al. vs. Vigan, G.R. No. 143723, June 28,
2001, p. 12. Stress supplied.
[36] Rollo, pp. 193-194. chanroblespublishingcompany

[37] CA Rollo, p. 51. chanroblespublishingcompany

[38] OSS Security & Allied Services, Inc., et al. vs. NLRC, et al., 325 SCRA 157,
165 (2000). Stress supplied. chanroblespublishingcompany