Republic of the Philippines


G.R. No. 120008 October 18, 1996



Petitioners assail, in the petition ( for certiorari) before us, the decision dated 29 December 1994, and the resolution, dated 11 April 1995, of public respondent National Labor Relations Commission ("NLRC") reversing the 29th November 1993 ruling of Labor Arbiter Manuel R. Caday in NLRC-NCR-Case No. 00-07-03769-91.

Private respondent Teodoro M. Diaz joined the Philippine Advertising Counselors/BBDO Worldwide, Inc. ("PAC"), in 1976. His initial appointment with the firm was that of an Executive Account Trainee. He later rose to the position of Vice President and, concurrently, head of the Account Management Group.

In December, 1990, during a meeting of the company's senior management officials, Chairman of the Board Antonio G. Cumagun accused Elenita C. Panganiban, then the owner of fifty-two (52%) percent of PAC, of trying to manipulate the value of PAC's shares of stock in order to obtain a better price for her shares. Cumagun thereupon made known his intention to organize a new advertising agency. He asked private respondent to join the group but the latter expressed reluctance to the idea. He, instead, suggested that the owners should reconcile their differences. On 20 January 1991, private respondent was summoned by petitioner Adriel C. Peña, PAC's President, to the latter's townhouse unit. Peña expressed his disappointment over private respondent's non-committal stance. Peña again asked private respondent to join the Cumagun group but Diaz would not be convinced. From then on, Diaz was treated with indifference, if not hostility, by Peña.

Ultimately, the Cumagun faction bought out the Panganiban group. A major reorganization of PAC followed. The Account Management Group, then composed of four major divisions, was expanded into six departments. Diaz's position was abolished and he was made to merely head a division of the Account Management Group. On 27 June 1991, Diaz served on petitioners notice that he considered himself constructively dismissed. He forthwith filed a complaint for illegal dismissal, non-payment of 13th month pay, payment of separation pay, and other monetary claims, against petitioners.

On 29 November 1993, Labor Arbiter Manuel R. Caday held that Diaz was "never dismissed, constructively or otherwise," but that he had "voluntarily severed his employment with respondent." The Labor Arbiter further adjudged:

Lastly, anent the third issue of whether or not complaint Diaz is entitled to separation pay and to other monetary benefits like retirement pay, accrued vacation leave and proportionate 13th month pay for the year 1991, this Office is of the considered view and so holds that except for the other mentioned monetary benefits to which complainant Diaz is considered to be entitled, he is not entitled to any separation pay for the same reasons in denying him entitlement to damages and attorney's fees, namely, his being not dismissed as in fact, it was he who voluntarily severed his employment relationship with the respondent Company.

Regarding retirement benefits, accrued vacation leave and proportionate 13th month pay for the year 1991, these were admitted to be due to complainant and offered to be paid during the proposed (but aborted) settlement of the case. Under the retirement plan of the Company, Diaz' entitlement of one-half month pay for each year of service will amount to P240,000.00, computed as follows: P32,000.00 divided by 2 times 15 years.

As to vacation leave, Diaz has an accrued leave of 24 days amounting to P29,350.32 and a pro rata 13th month pay for the year 1991 equivalent to 6 months or one-half month pay amounting to P16,000.00. (Exhs. "II" and "3-A").

All in all, herein three (3) monetary benefits due to complainant amounted to P285,350.32.

Considering, however, that complainant Diaz' unpaid balance on his car loan plus interest will amount to more than the amount due him, and this does not include yet his unpaid balance on his housing loan plus interest to the Dominion Development and Investment, Inc., payment of Diaz' monetary benefits has to be withheld or be considered as payment to offset part of his outstanding balance on his car loan. This is in consonance with his commitment in the Promissory note for P303,704.00 car loan (Exh. "C" and "2"), wherein he authorizes the respondent Company to deduct his outstanding balance from any and all benefits he may received or may be entitled to receive from the Company and from the employee's pension fund as a result of his termination for any reason whatsoever. In case of any further balance he shall continue to be liable therefor and the same shall be paid as of date of default or separation (Exh. "2-B").

WHEREFORE, premises all considered, the respondents are hereby ordered to pay complainant Teodoro M. Diaz the sum of TWO HUNDRED EIGHTY FIVE THOUSAND THREE HUNDRED FIFTY & 32/100 (P285,350.32) as above computed, subject however to their right to withhold payment thereof and instead consider it as payment to off-set part of his still outstanding balance on his car loan.

As to the other charges or claims of the complainant, the same are hereby dismissed for lack of merit.


Dissatisfied with the decision, Diaz appealed to respondent commission.

The NLRC's Second Division 2 partly upheld Diaz and, in its decision of 29 December 1994, concluded:

WHEREFORE, in view of all the foregoing, the appeal is hereby GRANTED. The Decision, dated 29 November 1993, of the Labor Arbiter a quo is hereby MODIFIED, ordering Appellees to pay Appellant separation pay equivalent to one-month pay for every year of his 15 years of service or P600,000.00 (P32,000.00 basic salary + P8,000.00 allowances = P40,000.00 x 15 years = P600,000.00; sick leave and vacation leave benefits plus 13th month pay in proportion to the number of months in 1991 when he was constructively dismissed on 27 June 1991 in the amount of P16,000.00; moral damages in the amount of P500,000.00; exemplary damages in the amount of P500,000.00 and attorney's fees equivalent to ten (10%) percent of the total money judgment herein, subject however to Appellees' right to set-off part of the total money judgment herein as payment for the principal balance of Appellant's car loan in the amount of P293,480.29.


Petitioners brought the case to this Court for relief, alleging that respondent commission

. . . acted with grave abuse of discretion amounting to a lack or excess of jurisdiction in ruling for private respondent in the 29 December 1994 Decision and denying petitioners' Motion for Reconsideration in the questioned Resolution dated for the following reasons:

a. Public respondent NLRC utterly and completely ignored in an arbitrary, capricious and one-sided manner the definitive findings of fact of Honorable Labor Arbiter Manuel Caday, who was in the best position to ascertain the credibility of the witnesses and other evidence during trial, and the compelling evidence adduced and elicited by petitioners in the proceedings below; and

b. Public respondent NLRC, without any factual or legal basis and contrary to this Honorable Court's ruling in Radio Communications of the Philippines vs. Rodriguez (182 SCRA 906) [1990], awarded private respondents moral and exemplary damages and in sums so unconscionably and palpably excessive so as to effect the unjust enrichment of private respondent. 4

The first contention is without merit.

The well-settled rule confines the original and exclusive jurisdiction of the Supreme Court in the review of decisions of the NLRC under Rule 65 of the Revised Rules of Court only to the issue of jurisdiction or grave abuse of discretion amounting to lack of jurisdiction. 5 Grave abuse of discretion is committed when the judgment is rendered in a capricious, whimsical, arbitrary or despotic manner. 6 An abuse of discretion does not necessarily follow just because the is a reversal by the NLRC of the decision of the Labor Arbiter. Neither does not mere variance in the evidentiary assessment of the NLRC and that of the Labor Arbiter would, as a matter of course, so warrant another full review of the facts. The NLRC's decision, so long as it is not bereft of support from the records, deserves respect from the Court. Indeed, as the Solicitor General so maintains in this instance

. . . petitioners do not assail public respondent's conclusions as not supported by evidence. They simply maintain the view that such contrary conclusion were based solely on Diaz' and his witnesses' allegedly self-serving statements and testimonies and from copies of memorandas intended to the former and other verbal acts which do not constitute harassment or oppression.

xxx xxx xxx

There being no dispute on public respondent's bases or lack of it to adequately form its own conclusion on the case, the rule that factual findings if supported by substantial evidence are entitled to great respect and even finality (Loadstar Shipping Co., Inc. v. Gallo, 229 SCRA 654). Absent any showing that such factual findings of public respondent are not supported by the evidence on record, they are, therefore, not correctible by certiorari (Diola v. NLRC, 222 SCRA 860). The above submission is consistent with the general rule that the Honorable Court's original and exclusive jurisdiction to review public respondent's decision or resolution does not include a correction of its evaluation of the evidence (Loadstar, supra).

Besides, since the Labor Arbiter's decision was appealed to public respondent the fact that the case would be open for review and the possibility of said decision being reversed or modified is not remote. In City Fair Corporation v. NLRC (243 SCRA 572, 576) the Honorable Court citing Article 218(c) of the Labor Code held that public respondent may, in the exercise of its appellate powers, correct, amend or waive any error, defect or irregularity whether in substance or in form' the decision of the Labor Arbiter in the interpretation or formation of a conclusion from the evidence adduced by the parties. 7

In any event, we sustain the view that private respondent did not abandon his employment. For abandonment to exist, it is essential (1) that the employee must have failed to report for work or must have been absent without valid or justifiable reason; and (2) that there must have been a clear intention to sever the employer-employee relationship manifested by some overt acts. 8 Abandonment is not compatible with constructive dismissal. Petitioner argues that private respondent did not suffer any demotion in rank since he has "retained his rank of Vice President, continued to work in the same office, and received the same salaries, benefits and privileges." 9 Constructive dismissal, however, does not always involve such kinds of diminution; 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.

The Court, on the second issue, sees it fit to modify the award of moral and exemplary damages. While, it is true, an employee may rightfully recover moral damages when his dismissal is pernicious in nature, 10 as well as exemplary damages when that dismissal is effected in an oppressive or malevolent manner, 11 these damages, however, are not meant to enrich him 12 but are merely intended, in the case of moral damages, to have some compensation for the suffering that may have been caused to the injured party and, in the case of exemplary damages, by way of example or correction for the public good. Given the circumstances, the Court, after deliberations, consider it proper to reduce the award or moral damages to P100,000.00 and of exemplary damages to P50,000.00.

WHEREFORE, the decision of respondent National Labor Relations Commission is AFFIRMED with modification by reducing the award of moral damages to P100,000.00 and the award of exemplary damages to P50,000.00. Costs against petitioners.


Padilla, Bellosillo, Kapunan and Hermosisima, Jr., JJ., concur.


1 Rollo, pp. 85-87.

2 Through Presiding Commissioner Raul T. Aquino, ponente, and Commissioners Victoriano R. Calaycay and Rogelio I. Rayala, members.

3 Rollo, pp. 67-68.

4 Rollo, pp. 4-5.

5 Sta. Fe Construction Co. vs. NLRC, 230 SCRA 593.

6 See Philippine Airlines, Inc. vs. Confessor, 231 SCRA 41; Oro Enterprises, Inc. vs. NLRC, 238 SCRA 105.

7 Rollo, pp. 755-757.

8 De Ysasi III vs. NLRC, 231 SCRA 173; Bonotan vs. NLRC, 237 SCRA 717.

9 Petition, p. 25., Rollo, p. 26.

10 See Garcia vs. NLRC, 234 SCRA 632.

11 See Estiva vs. NLRC, 225 SCRA 169.

12 See Korean Airlines Co., Ltd. vs. Court of Appeals, 234 SCRA 717; Philippine Airlines, Inc. vs. Court of Appeals, 226 SCRA 423.

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