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SO ORDERED.6 IKSI then filed a Motion for Reconsideration, but the same was denied in a Resolution dated March 12, 2014. Hence, the instant petition. The main issue in this case is whether or not the CA committed an error when it reversed the NLRC, which declared that respondent employees, as mere project employees, were validly placed on floating status and, therefore, were not illegally dismissed. The Court rules in the negative. Substantive Issues Nature of respondents’ employment contracts It is true that factual findings of administrative or quasi-judicial bodies which are deemed to have acquired expertise in matters within their respective jurisdictions are generally accorded, not only respect, but even finality, and bind the Court when supp011ed by substantial evidence. However, the Court may take cognizance of factual issues when the findings of fact and conclusions of law of the LA and/or the NLRC are inconsistent with those of the CA,7 as in the case at bar. Here, the NLRC ruled that respondents were project employees. It ratiocinated that their contracts specifically indicated that they were to hold their positions for the duration of the project which was expected to be completed after a maximum of five (5) years, or on or before July 2, 2013.8 But the CA found that respondents' employment contracts are fixed-term, which are contrary to the Constitution and labor laws. It then cited several cases9 that supposedly involved IKSI itself and would reveal that its fixed-term employment contracts have been consistently held as a form of circumvention to prevent employees from acquiring tenurial rights and benefits. The employment status of a person is defined and prescribed by law and not by what the parties say it should be. Equally important to consider is that a contract of employment is impressed with public interest such that labor contracts must yield to the common good. Thus, provisions of applicable statutes are deemed written into the contract, and the parties are never at liberty to insulate themselves and their relationships from the impact of labor laws and regulations by simply entering into contracts with each other.10 Article 29511 of the Labor Code provides the distinction between a regular and a project employment:
The aforecited provision contemplates four (4) kinds of employees: (1) regular employees or those who have been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer; (2) project employees or those whose employment has been fixed for a specific project or undertaking, the completion or termination of which has been determined at the time of the engagement of the employee; (3) seasonal employees or those who work or perform services which are seasonal in nature, and the employment is for the duration of the season; and (4) casual employees or those who are not regular, project, or seasonal employees. Jurisprudence later added a fifth (5th) kind, the fixed-term employee. Based on Article 295, the law determines the nature of the employment, regardless of any agreement expressing otherwise. The supremacy of the law over the nomenclature of the contract and its pacts and conditions is to bring life to the policy enshrined in the Constitution to afford full protection to labor. Thus, labor contracts are placed on a higher plane than ordinary contracts since these are imbued with public interest and, therefore, subject to the police power of the State.12 Project employment contracts, which fix the employment for a specific project or undertaking, are valid under the law. By entering into such a contract, an employee is deemed to understand that his employment is coterminous with the project. He may no longer be employed after the completion of the project for which he was hired. But project employment contracts are not lopsided agreements in favor of only one party. The employer's interest is equally important as that of the employees'. While it may be true that it is the employer who drafts project employment contracts with its business interest as overriding consideration, such contracts must not prejudice the employee.13 As stated in IKSI’s petition itself, the following are the basic provisions of the employment contracts which respondents signed with the company:
IKSI argued that based on the contract, it is undeniable that respondents’ employment was fixed for a specific project or undertaking, with its completion or termination clearly determined at the time of the employee’s engagement. Indeed, records would disclose that respondents signed employment contracts specifically indicating the Content Supply Chain Project,15 also known as the ACT Project, as the project for which they were being hired, which was expected to be completed after a maximum of five (5) years. However, sometime in November 2008, IKSI required respondents to work on another project called "Bloomberg," which was not included in the original contracts that they signed and without entering into a new project employment contracts. Such fact was never refuted by IKSI. During that time, respondents were required to read and review decided cases in the United States of America and they were no longer called Senior or Junior Reviewers, but referred to as Case Classifiers. Respondents initially opposed working on said project but eventually agreed, in fear of losing their employment altogether. Months later, they were again required to work on the ACT Project and reverted to their previous designation as Document Reviewers.16 In the case of ALU-TUCP v. NLRC, 17the Court made a pronouncement on the two (2) categories of project employees. The project for which project employees are hired would ordinarily have some relationship to the usual business of the employer. There should be no difficulty in distinguishing the employees for a certain project from ordinary or regular employees, as long as the duration and scope of the project were determined or specified at the time of engagement of said project employees.18 In order to safeguard the rights of workers against the arbitrary use of the word "project" which prevents them from attaining regular status, employers claiming that their workers are project employees have the burden of showing that: (a) the duration and scope of the employment was specified at the time they were engaged; and (b) there was indeed a project.19 Therefore, as evident in Article 295, the litmus test for determining whether particular employees are properly characterized as project employees, as distinguished from regular employees, is whether or not the employees were assigned to carry out a specific project or undertaking, the duration and scope of which were specified at the time the employees were engaged for that project.20 Here, while IKSI was able to show the presence of a specific project, the ACT Project, in the contract and the alleged duration of the same, it failed to prove, however, that respondents were in reality made to work only for that specific project indicated in their employment documents and that it adequately informed them of the duration and scope of said project at the time their services were engaged. It is well settled that a party alleging a critical fact must support his allegation with substantial evidence, as allegation is not evidence. The fact is IKSI actually hired respondents to work, not only on the ACT Project, but on other similar projects such as the Bloomberg. When respondents were required to work on the Bloomberg project, without signing a new contract for that purpose, it was already outside of the scope of the particular undertaking for which they were hired; it was beyond the scope of their employment contracts. The fact that the same happened only once is inconsequential. What matters is that IKSI required respondents to work on a project which was separate and distinct from the one they had signed up for. This act by IKSI indubitably brought respondents outside the realm of the project employees category. IKSI likewise fell short in proving that the duration of the project was reasonably determinable at the time respondents were hired. As earlier mentioned, the employment contracts provided for "the duration of the Project, which is expected to be completed after a maximum of five (5) years, or on or before______ ."The NLRC upheld the same, finding that the contracts clearly provided for the duration of the project which was expected to end after a maximum of five (5) years, or on or before July 2, 2013. It is interesting to note, however, that the five (5)-year period is not actually the duration of the project but merely that of the employment contract. Naturally, therefore, not all of respondents' employment would end on July 2, 2013, as the completion of the five (5)-year period would depend on when each employee was employed, thus:21
This is precisely the reason why IKSI originally left a blank for the termination date because it varied for each employee. If respondents were truly project employees, as IKSI claims and as found by the NLRC, then the termination date would have been uniform for all of them. Thus, while the CA erred in simply relying on the Court's rulings on previous cases involving Innodata Phils., Inc. since there is no substantial proof that Innodata Phils., Inc. and herein petitioner, IKSI, are one and the same entity, it would appear, however, that respondents indeed entered into fixed-term employment contracts with IKSI, contracts with a fixed period of five (5) years. But project employment and fixed-term employment are not the same. While the former requires a particular project, the duration of a fixed-term employment agreed upon by the parties may be any day certain, which is understood to be "that which must necessarily come although it may not be known when." The decisive determinant in fixed-term employment is not the activity that the employee is called upon to perform but the day certain agreed upon by the parties for the commencement and termination of the employment relationship.22 The Court has previously recognized the validity of fixed-term employment contracts, but it has consistently held that this is more of an exception rather than the general rule. Aware of the possibility of abuse in the utilization of fixed-term employment contracts, the Court has declared that where from the circumstances it is apparent that the periods have been imposed to preclude acquisition of tenurial security by the employee, they should be struck down as contrary to public policy or morals.23 It is evident that IKSI’s contracts of employment are suspect for being highly ambiguous. In effect, it sought to alternatively avail of project employment and employment for a fixed term so as to preclude the regularization of respondents' status. The fact that respondents were lawyers or law graduates who freely and with full knowledge entered into an agreement with the company is inconsequential. The utter disregard of public policy by the subject contracts negates any argument that the agreement is the law between the parties24 and that the fixed period was knowingly and voluntarily agreed upon by the parties. In the interpretation of contracts, obscure words and provisions shall not favor the party that caused the obscurity. Consequently, the terms of the present contract should be construed strictly against the employer, for being the party who prepared it.25 Verily, the private agreement of the parties can never prevail over Article 1700 of the Civil Code, which states:
Thus, there were no valid fixed-term or project contracts and respondents were IKSI’s regular employees who could not be dismissed except for just or authorized causes. Any ambiguity in said contracts must be resolved against the company, especially because under Article 1702 of the Civil Code, in case of doubt, all labor contracts shall be construed in favor of the worker. The Court cannot simply allow IKSI to construe otherwise what appears to be clear from the wordings of the contract itself. The interpretation which IKSI seeks to conjure is wholly unacceptable, as it would result in the violation of respondents' right to security of tenure guaranteed in Section 3 of Article XIII of the Constitution and in Article 29426 of the Labor Code.27 Presence of Just or Authorized Causes Here, IKSI placed respondents on forced leave, temporary lay-off, or floating status in January 2010 for the alleged decline in the volume of work in the product stream where they were assigned. When respondents filed a complaint for illegal dismissal, the LA dismissed the same for having been filed prematurely, since placing employees on forced leave or floating status is a valid exercise of management prerogative and IKSI never really had an intention to terminate their employment. It relied on the memoranda28 which IKSI issued to respondents, the tenor of which would show the intention to recall the affected employees back to work once the company's condition improves. The NLRC affirmed the LA’s ruling and declared that the fact of dismissal, whether legal or illegal, is absent in this case. Among the authorized causes for termination under Article 29829 of the Labor Code is retrenchment, or what is sometimes referred to as a layoff, thus:
Retrenchment is the severance of employment, through no fault of and without prejudice to the employee, which management resorts to during the periods of business recession, industrial depression, or seasonal fluctuations, or during lulls caused by lack of orders, shortage of materials, conversion of the plant to a new production program or the introduction of new methods or more efficient machinery, or of automation. In other words, lay-off is an act of the employer of dismissing employees because of losses in the operation, lack of work, and considerable reduction on the volume of its business. However, a lay-off would amount to dismissal only if it is permanent. When it is only temporary, the employment status of the employee is not deemed terminated, but merely suspended.30 Article 298, however, speaks of permanent retrenchment as opposed to temporary lay-off, as in the present case.1âwphi1 There is no specific provision of law which treats of a temporary retrenchment or lay-off and provides for the requisites in effecting it or a specific period or duration.31 Notably, in both permanent and temporary lay-offs, the employer must act in good faith - that is, one which is intended for the advancement of the employer's interest and not for the purpose of defeating or circumventing the rights of the employees under the law or under valid agreements.32 Certainly, the employees cannot forever be temporarily laid-off. Hence, in order to remedy this situation or fill the hiatus, Article 30133 may be applied to set a specific period wherein employees may remain temporarily laid-off or in floating status.34 Article 301 states:
The law set six (6) months as the period where the operation of a business or undertaking may be suspended, thereby also suspending the employment of the employees concerned. The resulting temporary lay-off, wherein the employees likewise cease to work, should also not last longer than six (6) months. After the period of six (6) months, the employees should either then be recalled to work or permanently retrenched following the requirements of the law. Failure to comply with this requirement would be tantamount to dismissing the employees, making the employer responsible for such dismissal.35 Elsewise stated, an employer may validly put its employees on forced leave or floating status upon bona fide suspension of the operation of its business for a period not exceeding six (6) months. In such a case, there is no termination of the employment of the employees, but only a temporary displacement. When the suspension of the business operations, however, exceeds six (6) months, then the employment of the employees would be deemed terminated,36 and the employer would be held liable for the same. Indeed, closure or suspension of operations for economic reasons is recognized as a valid exercise of management prerogative. But the burden of proving, with sufficient and convincing evidence, that said closure or suspension is bona fide falls upon the employer. In the instant case, IKSI claims that its act of placing respondents on forced leave after a decrease in work volume, subject to recall upon availability of work, was a valid exercise of its right to lay-off, as an essential component of its management prerogatives. The Court agrees with the LA's pronouncement that requiring employees on forced leave is one of the cost-saving measures adopted by the management in order to prevent further losses. However, IKSI failed to discharge the burden of proof vested upon it. Having the right should not be confused with the manner in which that right is exercised; the employer cannot use it as a subterfuge to run afoul of the employees' guaranteed right to security of tenure. The records are bereft of any evidence of actual suspension of IKSI's business operations or even of the ACT Project alone. In fact, while IKSI cited Article 301 to support the temporary lay-off of its employees, it never alleged that it had actually suspended the subject undertaking to justify such lay-off. It merely indicated changes in business conditions and client requirements and specifications as its basis for the implemented forced leave/lay-off.37 In light of the well-entrenched rule that the burden to prove the validity and legality of the termination of employment falls on the employer, IKSI should have established the bona fide suspension of its business operations or undertaking that could legitimately lead to the temporary layoff of its employees for a period not exceeding six (6) months, in accordance with Article 301.38 The LA severely erred when it sustained respondents' temporary retrenchment simply because the volume of their work would sometimes decline, thus, several employees at the ACT Project stream experienced unproductive time.39 Considering the grave consequences occasioned by retrenchment, whether permanent or temporary, on the livelihood of the employees to be dismissed, and the avowed policy of the State to afford full protection to labor and to assure the employee's right to enjoy security of tenure, the Court stresses that not every loss incurred or expected to be incurred by a company will justify retrenchment. The losses must be substantial and the retrenchment must be reasonably necessary to avert such losses. The employer bears the burden of proving this allegation of the existence or imminence of substantial losses, which by its nature is an affirmative defense. It is the employer’s duty to prove with clear and satisfactory evidence that legitimate business reasons exist in actuality to justify any retrenchment. Failure to do so would inevitably result in a finding that the dismissal is unjustified. Otherwise, such ground for termination would be susceptible to abuse by scheming employers who might be merely feigning business losses or reverses in their business ventures to dispose of their employees.40 Here, IKSI never offered any evidence that would indicate the presence of a bona fide suspension of its business operations or undertaking. IKSI’s paramount consideration should be the dire exigency of its business that compelled it to put some of its employees temporarily out of work. This means that it should be able to prove that it faced a clear and compelling economic reason which reasonably constrained it to temporarily shut down its business operations or that of the ACT Project, incidentally resulting in the temporary lay-off of its employees assigned to said particular undertaking. Due to the grim economic repercussions to the employees, IKSI must likewise bear the burden of proving that there were no other available posts to which the employees temporarily put out of work could be possibly assigned.41 Unfortunately, IKSI was not able to fulfill any of the aforementioned duties. IKSI cannot simply rely solely on the alleged decline in the volume of work for the ACT Project to support the temporary retrenchment of respondents. Businesses, by their very nature, exist and thrive depending on the continued patronage of their clients. Thus, to some degree, they are subject to the whims of clients who may suddenly decide to discontinue patronizing their services for a variety of reasons. Being inherent in any enterprise, employers should not be allowed to take advantage of this entrepreneurial risk and use it in a scheme to circumvent labor laws. Otherwise, no worker could ever attain regular employment status.42 In fact, IKSI still continued its operations and retained several employees who were also working on the ACT Project even after the implementation of the January 2010 forced leave. Much worse, it continued to hire new employees, with the same qualifications as some of respondents, through paid advertisements and placements in Suns tar Cebu, 43 a local newspaper, dated February 24, 2010 and March 7, 2010. The placing of an employee on floating status presupposes, among others, that there is less work than there are employees. But if IKSI continued to hire new employees then it can reasonably be assumed that there was a surplus of work available for its existing employees. Hence, placing respondents on floating status was unnecessary. If any, respondents - with their experience, knowledge, and familiarity with the workings of the company - should be preferred to be given new projects and not new hires who have little or no experience working for IKSI.44 There being no valid suspension of business operations, IKSI’s act amounted to constructive dismissal of respondents since it could not validly put the latter on forced leave or floating status pursuant to Article 301. And even assuming, without admitting, that there was indeed suspension of operations, IKSI did not recall the employees back to work or place them on valid permanent retrenchment after the period of six (6) months, as required of them by law. IKSI could not even use the completion of the duration of the alleged project as an excuse for causing the termination of respondents’ employment. It must be pointed out that the termination was made in 2010 and the expected completion of the project in respondents' contracts was still in 2012 to 2014. Also, if the Court would rely on IKSI’s own Notice of Partial Appeal and Memorandum on Partial Appeal45 before the NLRC dated December 10, 2010, respondents might even had been put on floating status for a period exceeding the required maximum of six (6) months. Evidence reveal that the assailed forced leave took effect on January 7, 2010 and IKSI eventually sent its termination letters four (4) months after, or on May 27, 2010, with the effectivity of said termination being on July 7, 2010. But as of December 10, 2010, IKSI was still insisting that respondents were never dismissed and were merely placed on forced leave. It was only in its Comment on Complainants’ Motion for Reconsideration dated August 3, 2011 did IKSI admit the fact of dismissal when it appended its own termination letters dated May 27, 2010. But even on May 27, 2010, there was still no basis for IKSI to finally make the retrenchment permanent. While it acknowledged the fact that respondents could not be placed on an indefinite floating status, it still failed to present any proof of a bona fide closing or cessation of operations or undertaking to warrant the termination of respondents' employment. The termination letter46 reads:
xxx It bears to point out that said termination letter did not even state any of the following valid grounds under the law as anchor for the dismissal:
The NLRC likewise committed a grave error when it held that there was no basis for respondents' reliance on the case of Bontia v. NLRc48 on the sole ground that, in the present case, the employees were neither actually nor constructively dismissed. The Court affirms respondents’ contention that when IKSI feigned suspension of operations and placed respondents on forced leave, the same had already amounted to constructive dismissal. And when IKSI sent letters informing them that they would be terminated effective July 7, 2010, respondents then had been actually dismissed. In Bontia, the manner by which the employer severed its relationship with its employees was remarkably similar to the one in the case at bar, which was held to be an underhanded circumvention of the law. Consolidated Plywood Industries summarily required its employees to sign applications for forced leave deliberately crafted to be without an expiration date, like in this case. This consequently created an uncertain situation which necessarily discouraged, if not altogether prevented, the employees from reporting, or determining when or whether to report for work. The Court further ruled that even assuming that the company had a valid reason to suspend operations and had filed the necessary notice with the Department of Labor and Employment (DOLE), it still would not be a legitimate excuse to cursorily dismiss employees without properly informing them of their rights and status or paying their separation pay in case they were eventually laid off. Under the Labor Code, separation pay is payable to an employee whose services are validly terminated as a result of retrenchment, suspension, closure of business or disease. Thus, the Court held that Consolidated Plywood's employees should, at the very least, have been given separation pay and properly informed of their status so as not to leave them in a quandary as to how they would properly respond to such a situation.49 Similarly, respondents never received any separation pay when they were terminated in July of 2010 since IKSI had been denying the existence of a dismissal, whether actual or constructive. Withal, in both permanent and temporary lay-offs, jurisprudence dictates that the one (1)-month notice rule to both the DOLE and the employee under Article 298 is mandatory.50 Here, both the DOLE and respondents did not receive any prior notice of the temporary lay-off. The DOLE Region VII Office was only informed on January 11, 201051 or four (4) days after the forced leave had already taken effect. On the other hand, respondents received the notice52 of forced leave on January 7, 2010, after the business day of which the same forced leave was to take effect. Respondents also pointed out that when they received said notice, they were told to no longer report starting the next day, made to completely vacate their workstations and surrender their company identification cards, and were not even allowed to use their remaining unused leave credits, which gave them the impression that they would never be returning to the company ever again. Since dismissal is the ultimate penalty that can be meted to an employee, the requisites for a valid dismissal from employment must always be met, namely: (1) it must be for a just or authorized cause; and (2) the employee must be afforded due process,53 meaning, he is notified of the cause of his dismissal and given an adequate opportunity to be heard and to defend himself. Our rules require that the employer be able to prove that said requisites for a valid dismissal have been duly complied with. Indubitably, IKSI’s intent was not merely to put respondents' employment on hold pending the existence of the unfavorable business conditions and call them back once the same improves, but really to sever the employer-employee relationship with respondents right from the very start. The Court cannot just turn a blind eye to IKSI’s manifest bad faith in terminating respondents under the guise of placing them on a simple floating status. It is positively aware of the unpleasant practice of some employers of violating the employees' right to security of tenure under the pretense of a seemingly valid employment contract and/or valid termination. We must abate the culture of employers bestowing security of tenure to employees, not on the basis of the latter's performance on the job, but on their ability to toe the line.54 Unfortunately for IKSI, they chanced upon respondents who, unlike the ordinary workingman who always plays an easy prey to these perfidious companies, are fully aware of their rights under the law and simply refuse to ignore and endure in silence the flagrant irruption of their rights, zealously safeguarded by the Constitution and our labor laws. Procedural Issues Tested against the above-discussed considerations, the Court finds that the CA correctly granted respondents’ certiorari petition before it, since the NLRC gravely abused its discretion in ruling that respondents were merely IKSI’s project employees and that they were validly put on floating status as part of management prerogative, when they had satisfactorily established by substantial evidence that they had become regular employees and had been constructively dismissed.55 Grave abuse of discretion connotes judgment exercised in a capricious and whimsical manner that is tantamount to lack of jurisdiction.56 In labor disputes, grave abuse of discretion may be ascribed to the NLRC when, inter alia, its findings and conclusions, as in the case at bar, are not supported by substantial evidence, or that amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion.57 In the NLRC’s Decision, only the following petitioners were included: Michael A. Rebato, Hernan Ed Noel L. de Leon, Jr., Wendell B. Quiban, Fritz Sembrino, Ismael R. Garaygay III, Edson S. Solis, Stephen Olingay, Ronan Alamillo, Jess Vincent A. dela Pefia, Dax Matthew M. Quijano, Juneth A. Rentuma and Socorro D'Marie T. Inting. On the other hand, James Horace Balonda, Dennis C. Rizon, Ennoh Chentis R. Fernandez, Aldrin 0. Torrentira, Michael Ray B. Molde, Rodolfo M. Vasquez, Ma. Nazelle B. Miralles, and Carl Hermes Carskit were excluded. IKSI argued that those eight (8) who were excluded did not sign the required Verification and Certification of Non-Forum Shopping of the Appeal Memorandum before the NLRC, and some of them also failed to execute the Verification in the Petition for Certiorari before the CA. The Court has previously set the guidelines pertaining to non-compliance with the requirements on, or submission of defective, verification and certification against forum shopping:58
In the case at hand, only twelve (12) of respondents were able to sign the Verification and Certification Against Forum Shopping since they were only given ten (10) days from the receipt of the LA's decision to perfect an appeal. Some of them were even no longer based in Cebu City. But it does not mean that those who failed to sign were no longer interested in pursuing their case. In view of the circumstances of this case and the substantive issues raised by respondents, the Court finds justification to liberally apply the rules of procedure to the present case. Rules of procedure should be viewed as mere tools designed to facilitate the attainment of justice; their strict and rigid application, which would result in technicalities that tend to frustrate rather than promote substantial justice, must always be eschewed.59 In a similar case, the Court found that the signing of the Verification by only 11 out of the 59 petitioners already sufficiently assured the Court that the allegations in the pleading were true and correct and not the product of the imagination or a matter of speculation; that the pleading was filed in good faith; and that the signatories were unquestionably real parties-in-interest who undoubtedly had sufficient knowledge and belief to swear to the truth of the allegations in the petition.60 In the same vein, the twelve (12) respondents who signed the Verification in the instant case had adequate knowledge to swear to the truth of the allegations in their pleadings, attesting that the matters alleged therein have been made in good faith or are true and correct. With respect to the failure of some of respondents to sign the Certification Against Forum Shopping, IKSI cited the case of Altres, et al. v. Empleo61 which ruled that the non-signing petitioners were dropped as parties to the case. However, the reason of the Court for removing said petitioners from the case was not because of the failure to sign per se, but actually because of the fact that they could no longer be contacted or were indeed no longer interested in pursuing the case.62 Here, as mentioned earlier, those who failed to sign the certification against forum shopping will not be dropped as parties to the case since reasonable or justifiable circumstances are extant, as all respondents share a common interest and invoke a common cause of action or defense; the signatures of some or even only one of them substantially complies with the Rule. The Court previously held that the signature of only one of the petitioners substantially complied with the Rules if all the petitioners share a common interest and invoke a common cause of action or defense. In cases, therefore, where it is highly impractical to require all the plaintiffs to sign the certificate of non-forum shopping, it is sufficient, in order not to defeat the ends of justice, for one of the plaintiffs, acting as representative, to sign the certificate, provided that the plaintiffs share a common interest in the subject matter of the case or filed the case as a "collective" raising only one common cause of action or defense.63 Thus, when respondents appealed their case to the NLRC and the CA, they pursued the same as a collective body, raising only one argument in support of their rights against the illegal dismissal allegedly committed by IKSI. There was sufficient basis, therefore, for the twelve (12) respondents to speak and file the Appeal Memorandum before the NLRC and the petition in the CA for and in behalf of their co-respondents. Clearly, verification, like in most cases required by the rules of procedure, is a formal requirement, not jurisdictional.64 Such requirement is simply a condition affecting the form of pleading, the non-compliance of which does not necessarily render the pleading fatally defective.65 It is mainly intended to secure an assurance that matters which are alleged are done in good faith or are true and correct and not of mere speculation. Thus, when circumstances so warrant, as in this case, the court may simply order the correction of the unverified pleadings or act on it and waive strict compliance with the rules in order that the ends of justice may be served.66 Moreover, no less than the Labor Code directs labor officials to use all reasonable means to ascertain the facts speedily and objectively, with little regard to technicalities or formalities, while Section 10, Rule VII of the New Rules of Procedure of the NLRC provides that technical rules are not binding. Indeed, the application of technical rules of procedure may be relaxed in labor cases to serve the demand of substantial justice. Labor cases must be decided according to justice and equity and the substantial merits of the controversy. After all, the policy of our judicial system is to encourage full adjudication of the merits of an appeal. Procedural niceties should be avoided in labor cases in which the provisions of the Rules of Court are applied only in suppletory manner. Indeed, rules of procedure may be relaxed to relieve a part of an injustice not commensurate with the degree of non-compliance with the process required. For this reason, the Court cannot indulge IKSI in its tendency to nitpick on trivial technicalities to boost its self-serving arguments.67 The CA, however, erred when it still considered Atty. Ennoh Chentis Fernandez as one of the petitioners before it and included him in the dispositive portion of its decision. It must be noted that Fernandez was one of those who filed the Motion for Execution of Decision68 dated May 28, 2012, which prayed for the issuance of a writ of execution of the LA and NLRC’s rulings. The movants likewise admitted therein that while some of them elevated the case to the NLRC, they, however, did not. Corollarily, Fernandez should have been dropped as one of the parties to the case before the CA since the rulings of the labor tribunals had already attained finality with respect to him. Award of Damages Inasmuch as IKSI failed to adduce clear and convincing evidence to support the legality of respondents' dismissal, the latter is entitled to reinstatement without loss of seniority rights and backwages computed from the time compensation was withheld up to the date of actual reinstatement, as a necessary consequence. However, reinstatement is no longer feasible in this case because of the palpable strained relations between the parties and the possibility that the positions previously held by respondents are already being occupied by new hires. Thus, separation pay equivalent to one (1) month salary for every year of service should be awarded in lieu of reinstatement.69 The Court sustains the CA’s award of moral and exemplary damages. Award of moral and exemplary damages for an illegally dismissed employee is proper where the employee had been harassed and arbitrarily terminated by the employer. Moral damages may be awarded to compensate one for diverse injuries such as mental anguish, besmirched reputation, wounded feelings, and social humiliation occasioned by the unreasonable dismissal. The Court has consistently accorded the working class a right to recover damages for unjust dismissals tainted with bad faith, where the motive of the employer in dismissing the employee is far from noble. The award of such damages is based, not on the Labor Code, but on Article 2220 of the Civil Code. In line with recent jurisprudence, the Court finds the amount of ₱50,000.00 for each of moral and exemplary damages adequate.70 The award of attorney's fees is likewise due and appropriate since respondents incurred legal expenses after they were forced to file an action to protect their rights.71 The rate of interest, however, has been changed to 6% starting July 1, 2013, pursuant to the Bangko Sentral ng Pilipinas Circular No. 799, Series of 2013.72 WHEREFORE, IN VIEW OF THE FOREGOING, the Court DISMISSES the petition, and AFFIRMS with MODIFICATIONS the Decision of the Court of Appeals Cebu, Twentieth (20th) Division, dated August 30, 2013 and Resolution dated March 12, 2014 in CA-G.R. CEB-SP No. 06443. Respondents Socorro D'Marie Inting, Ismael R. Garaygay, Edson S. Solis, Michael A. Rebato, James Horace Balonda, Stephen C. Olingay, Dennis C. Rizon, Juneth A. Rentuma, Hernan Ed Noel I. de Leon, Jr., Jess Vincent A. dela Pefia, Ronan V. Alamillo, Wendell B. Quiban, Aldrin 0. Torrentira, Michael Ray B. Molde, Fritz J. Sembrino, Dax Matthew M. Quijano, Rodolfo M. Vasquez, Ma. Nazelle B. Miralles and Carl Hermes Carskit are declared to have been illegally dismissed by petitioner Innodata Knowledge Services, Inc. and hence, the latter is hereby ORDERED to PAY each of them the following: a) Backwages and all other benefits from the time compensation was withheld on January 8, 2010 until finality of this Decision; b) Separation pay equivalent to one (1) month salary for every year of service, with a fraction of at least six (6) months to be considered as one (1) whole year, to be computed from the date of their employment up to the finality of this Decision; c) Moral and exemplary damages, each in the amount of ₱50,000.00; d) Attorney’s fees equivalent to ten percent (10%) of the total awards; and e) Legal interest of twelve percent (12%) per annum of the total monetary awards computed from January 8, 2010 up to June 30, 2013 and six percent (6%) per annum from July 1, 2013 until their full satisfaction. The case is hereby ordered REMANDED to the labor arbiter for the computation of the amounts due each respondent. Costs on petitioner Innodata Knowledge Services, Inc. SO ORDERED. DIOSDADO M. PERALTA WE CONCUR: ANTONIO T. CARPIO
ANDRES B. REYES, JR. A T T E S T A T I O N 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. ANTONIO T. CARPIO C E R T I F I C A T I O N Pursuant to the 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 Footnotes 1 Penned by Associate Justice Ramon Paul L. Hernando, with Associate Justices Carmelita Salandan-Manahan and Ma. Luisa C. Quijano-Padilla; concurring; rollo, Vol. I, pp. 53-71. 2 Id. at 74-76. 3 Penned by Commissioner Aurelio D. Menzon, with Commissioners Julie C. Rendoque and Violeta Ortiz-Bantug, concurring; rollo, Vol II, pp. 412-424. 4 Rollo, Vol. I, p. 269. 5 Rollo, Vol. II, p. 423. 6 Rollo, Vol. l, p. 70. (Emphasis in the original) 7 Dacles v. Millenium Erectors Corporation, 763 Phil. 550 (2015). 8 Rollo, Vol. II, p. 20. 9 Villanueva v. NLRC and Innodata, 356 Phil. 638 (1998); Servidad v. NLRC, 364 Phil. 5 I 8 (1999); Innodata Philippines, Inc. v. Quejada-Lopez, 535 Phil. 263 (2006); and Price v. Innodata Phils., Inc., 588 Phil. 568 (2008). 10 Price v. Innodata Phils., Inc., supra, at 580. 11 Formerly Article 280, Department Advisory No. 01, Renumbering of the Labor Code of the Philippines, as Amended, Series of 2015; pursuant to Section 5 of Republic Act No. 10151, entitled "An Act Allowing the Employment of Night Workers, thereby Repealing Articles 130 and 131 of Presidential Decree Number Four Hundred Forty-Two, as amended, otherwise known as The Labor Code of the Philippines," July 26, 2010. 12 leyte Geothermal Power Progressive Employees-Union-ALU-TUCP v. Philippine National Oil Company-Energy Development Corp., 662 Phil. 225, 234 (2011). 13 Id. 14 Rollo, Vol. I, pp. 20-21. (Emphasis ours) 15 Id. at 332-335. 16 Id. at 264. 17 304 Phil. 844, 850 (1994). 18 Dacles v. Millenium Erectors Corporation, supra note 7, at 560-561. 19 Id. at 558-559. 20 Id. at 560. 21 Rollo, Vol. II, pp. 468-470; rollo, Vol. III, pp. 1338-1530. 22 GMA Network, Inc. v. Pabriga, et al., 722 Phil. 161, 178 (2013). 23 Brent School, Inc. v. Zamora, 260 Phil. 747, 761 (1990). 24 Servidad v. NLRC, supra note 9, at 527. 25 lnnodata Philippines, Inc. v. Quejada-Lopez, supra note 9, at 272. 26 Formerly Article 279, Department Advisory No. 01, Renumbering of the Labor Code of the Philippines, as Amended, Series of 2015; pursuant to Section 5 of Republic Act No. 10151, entitled "An Act Allowing the Employment of Night Workers, thereby Repealing Articles 130 and 131 of Presidential Decree Number Four Hundred Forty-Two, as amended, otherwise known as The Labor Code of the Philippines," July 26, 2010. 27 Villanueva v. NLRC and Innodata, supra note 9, at 646. 28 Rollo, Vol. I, p. 145; IKSI's notice of the forced leave reads:
29 Formerly Article 283, Department Advisory No. 01, Renumbering of the Labor Code of the Philippines, as Amended, Series of 2015; pursuant to Section 5 of Republic Act No. 10151, entitled "An Act Allowing the Employment of Night Workers, thereby Repealing Articles 130 and 131 of Presidential Decree Number Four Hundred Forty-Two, as amended, otherwise known as The Labor Code of the Philippines," July 26, 2010. 30 Lopez v. Irvine Construction Corp., 741 Phil. 728, 740 (2014). 31 Id., citing PT&T v. NLRC, 496 Phil. 164, 177 (2005). 32 Lopez v. Irvine Construction, Corp., supra note 30, at 741. 33 Formerly Article 286, Department Advisory No. 01, Renumbering of the Labor Code of the Philippines, as Amended, Series of 2015; pursuant to Section 5 of Republic Act No. 10151, entitled "An Act Allowing the Employment of Night Workers, thereby Repealing Articles 130 and 131 of Presidential Decree Number Four Hundred Forty-Two, as amended, otherwise known as The Labor Code of the Philippines," July 26, 2010. 34 PT&T v. NLRC, supra note 31. 35 Id. 36 Nasipit Lumber Company v. NOWM, 486 Phil. 348, 362 (2004). 37 Supra note 28:
38 Lopez v. Irvine Construction Corp., supra note 30, at 743. 39 Rollo, Vol. I, p. 268. 40 Lopez v. Irvine Construction Corp., supra note 30, at 605; Nasipit Lumber Company v. NOWM, supra note 36, at 364; Somerville Stainless Steel Corporation v. NLRC, 359 Phil. 859, 869 (1998). 41 Lopez v. Irvine Construction Corp. supra note 30, at 744. 42 Innodata Phils., Inc. v. Quejada-Lopez, supra note 25. 43 Rollo, Vol. I, pp. 370-371. 44 ICT Marketing Services, Inc. v. Sales, 769 Phil. 498, 523 (2015). 45 Rollo, Vol. II, pp. 398-399. 46 Id. at 503. (Emphasis ours) 47 Formerly Article 282, Department Advisory No. 01, Renumbering of the Labor Code of the Philippines, as Amended, Series of 2015; pursuant to Section 5 of Republic Act No. 10151, entitled "An Act Allowing the Employment of Night Workers, thereby Repealing Articles 130 and 131 of Presidential Decree Number Four Hundred Forty-Two, as amended, otherwise known as The Labor Code of the Philippines," July 26, 2010. 48 325 Phil. 443(1996). 49 Id. 50 lopez v. Irvine Construction Corp., supra note 30, at 741. 51 Rollo, Vol. I, p. 186. 52 Supra note 28. 53 Visayan Electric Company Employees Union-ALU-TUCP v. VECO, 764 Phil. 608, 621 (2015). 54 ICT Marketing Services, inc. v. Sales, supra note 44. 55 Dael es v. Millenium Erectors Corporation, supra note 7, at 561. 56 id. at 557. 57 Id 58 Spouses Salise, et al. v. DARAB, G.R. No. 202830, June 20, 2016, citing Altres, et al. v. Empleo, et al., 594 Phil. 246, 261-262 (2008). 59 Spouses Salise, et al. v. DARAB, supra. 60 Altres, et al. v. Empleo, et al., supra note 58, at 260. 61 id. 62 Id. 63 Pacquing v. Coca-Cola Philippines, Inc., 567 Phil. 323, 333 (2008). 64 Heirs of Mesina v. Heirs of Fian, 708 Phil. 327, 336 (2013). 65 Pacquing v. Coca-Cola Philippines, inc., supra note 63, at 335. 66 Heirs of Mesina v. Heirs of Fian, supra note 64. 67 Pacquing v. Coca-Cola Philippines, inc., supra note 63. 68 Rollo, Vol. IV, pp. 1882-1884. 69 ICT Marketing Services, Inc. v. Sales, supra note 44. 70 SPI Technologies, inc. v. Mapua, 731Phil.480, 500 (2014). 71 Tangga-an v. Philippine Transmarine Carriers, Inc., et al., 706 Phil. 339, 354 (2013). 72 Nacar v. Gallery Frames, 716 Phil. 267 (2013) The Lawphil Project - Arellano Law Foundation 
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