This appeal by petition for review1
seeks to annul and set aside the Decision2
dated February 15, 2010 and Resolution3
dated May 25, 2010 of the Court of Appeals (CA) in CA-G.R. SP No. 108297, which affirmed the Decision4
dated August 29, 2008 of the National Labor Relations Commission (NLRC) in NLRC-NCR Case No. 00-10-08679-05, and its Resolution5
dated January 30, 2009 denying Philippine Long Distance Telephone Company's (PLDT) Motion for Reconsideration. The NLRC Decision affirmed the Decision6
dated December 8, 2006 of the Labor Arbiter (LA) ordering PLDT to pay Henry Estranero (respondent) his separation pay.
Petitioner PLDT is a public utility corporation engaged in the business of providing telecommunication services to the general public. On July 1, 1995, PLDT employed the respondent as an Auto-Mechanic/Electrician Helper, Job Grade 3 with a monthly salary of P15,000.00 at the time of his separation from the service in 2003.
In the year 1995, PLDT adopted a company-wide Manpower Reduction Program (MRP), aimed at reducing its work force. To commence with its program, PLDT offered the affected employees an attractive redundancy pay consisting of 100% of their basic monthly salary for every year of service, in addition to their retirement benefits, if entitled. For those who were not qualified to the retirement benefits, they were offered separation or redundancy package of 200% of their basic monthly salary for every year of service.
By virtue of the MRP, a number of positions were declared redundant. Among those gravely affected by the MRP was the Fleet Management Division where the respondent was assigned, on account of the significant decrease of company vehicles, machineries, and equipment that required mechanical servicing and repair. Consequently, the respondent's position was included in those declared as redundant.
Attracted by the separation pay offered by the company, the respondent expressed his conformity to his inclusion in the MRP. In the inter-office Memorandum dated April 21, 2003, the respondent declared that he has no objection to being included in the redundancy program of PLDT. After having signified his intention and after approval thereof by his superior officers, the respondent's name was included in the list of redundant employees for that period and a Notice of Separation Due to Redundancy was submitted to the Department of Labor and Employment on April 25, 2003. He was then made to sign a deed denominated as a Receipt, Release and Quitclaim for his severance from employment, thus availed of the offered personnel reduction program. Thereafter, PLDT proceeded to compute the respondent's redundancy/separation benefits.
Since his length of service was seven (7) years, eleven (11) months and fifteen (15) days, which was rounded to 8 years, the respondent was not qualified for retirement pay which required an employee to have worked for at least 15 years. The respondent was nonetheless entitled to 200% of his basic monthly salary for every year of service by way of redundancy pay or equivalent to P240,000.00. In addition, he was also entitled to other benefits he has earned for the years prior to, and during the year of his actual separation, i.e.
, 2002 and 2003 sick leave benefits, 2002 and 2003 vacation leave and vacation leave premium benefits, longevity pay, mid-year bonus, 13th
month pay and Christmas bonus, all in the sum of P27,028.37. Thus, his aggregate redundancy pay plus other earned benefits amounted to P267,028.37.
However, the respondent had outstanding liabilities arising from various loans he obtained from different entities, namely: the Home Development Mutual Fund (HDMF), PLDT Employees Credit Cooperative, Inc., PLDT Service Cooperative, Inc.,7
Social Security System (SSS), and the Manggagawa ng Komunikasyon sa Pilipinas, which summed to P267,028.37.8
Thus, PLDT deducted the said amount from the payment that the respondent was supposed to receive as his redundancy pay.
As a result, when the respondent was made to sign the Receipt, Release and Quitclaim, it showed that his take home pay was in the amount of "zero pesos." This prompted the respondent to retract his availment of the separation pay package offered to him through a letter addressed to the company dated May 8, 2003. Despite said retraction, however, the respondent was no longer allowed to report for work.
Subsequently, the respondent filed a complaint for illegal dismissal with reinstatement, as well as moral and exemplary damages plus attorney's fees, docketed as NLRC-NCR Case No. 04-02820-97, against PLDT and Ernani Tumimbang (petitioners), the Division Head of the Fleet Management Division where the respondent was assigned.
In due course, the LA rendered a Decision dated December 8, 2006 in favor of the respondent, disposing as follows:chanRoblesvirtualLawlibrary
WHEREFORE, foregoing premises considered, respondent Philippine Long Distance Telephone Company is hereby ordered to pay complainant Henry T. Estra[n]ero his separation pay in the amount of P267,038.37 [sic].
The "set-off of complainant's outstanding loans in the amount of P267,038.37 [sic] against his separation pay invoked by respondents is hereby dismissed for lack of jurisdiction.
All other claims are hereby ordered dismissed for lack of merit.
The LA sustained the validity of PLDT's redundancy program as an authorized cause to terminate the employment of the respondent, and his entitlement to the redundancy/separation pay pursuant to the MRP, being more advantageous than the benefits allowed under the law. The LA, however, ruled that the office lacks jurisdiction to pass upon the issue of PLDT's act in deducting the total outstanding loans which the respondent obtained from different entities since the same does not involve an employer-employee relationship, and may only be enforced by PLDT through a separate civil action in the regular courts.
On appeal, the NLRC affirmed the LA decision. The NLRC ruled that the respondent should be paid his separation pay on account of redundancy. As to the setting-off of the respondent's outstanding loans, it agreed with the LA that the same is not a labor dispute but one arising from a debtor-creditor relation where PLDT stands as a collecting agent over which the labor tribunals has no jurisdiction.
The petitioners filed a motion for reconsideration but it was denied; hence, they filed a petition for certiorari
with the CA.
On February 15, 2010, the appellate court promulgated its Decision affirming the assailed NLRC decision. The CA held that there is no more question as to the legality of the respondent's dismissal from employment as the respondent had accepted the validity of his dismissal from service. The controversy arose when the petitioners deducted from the respondent's redundancy pay the latter's outstanding liabilities arising from various loans he obtained from different entities such that his take home pay became zero.
In sustaining the respondent's claim for redundancy pay, the appellate court ratiocinated:chanRoblesvirtualLawlibrary
The deductions subject of this case pertain to loans which x x x respondent availed from various entities. Hence, as above stated, there must be proof that there is a personal written authorization from x x x respondent authorizing petitioners to deduct from his terminal pay his outstanding loans from said entities. Petitioners failed to present convincing evidence that, indeed, x x x respondent, has knowledge and consented to these deductions. On the contrary, x x x respondent maintains that petitioners unilaterally made the application of deductions without his knowledge, much less consent. Thus, it is the burden of petitioners to present proof of the validity of the deductions. However, aside from their bare allegations, they did not offer any concrete and tangible evidence proving their authority to deduct the outstanding loans of x x x respondents from his redundancy pay. They did not submit any written Authority to Deduct to evince the validity of the deductions. While they submitted two written Authority to Deduct signed by x x x respondent pertaining to his loans in the PLDT Multi-Purpose [Cooperative], Inc. (Telescoop), this Court cannot, on face value, conclude from said documents that x x x respondent has given his consent to deduct his loans from his redundancy pay. At most, said Authority to Deduct pertain[s] only to his loan obtained from Telescoop, but even so, the amount stated therein does not even match the amount deducted from his redundancy pay.10 (Citation omitted)
The CA further stated that the petitioners are not without any recourse to recover from the respondent the unauthorized payment they have made in his behalf. It has a right to recover from the respondent the sum so paid out, at least to the extent in which the payment may have been beneficial to the respondent.
Aggrieved by the foregoing disquisition, the petitioners moved for reconsideration but it was denied by the appellate court; hence, the present petition for review on certiorari.The Issue
As presented, the issue for resolution hinges on whether or not the petitioners can validly deduct the respondent's outstanding loan obligation from his redundancy pay.
Ruling of the Court
The petition is bereft of merit.
At the outset, the issues in this case are factual. "Under Rule 45 of the Rules of Court, only questions of law may be raised in this Court; such factual issues may be considered and resolved only when the findings of facts and the conclusions of the [LA] are inconsistent with those of the NLRC and the CA."11
It is apparent from the arguments of the petitioners that they are calling for the Court to re-evaluate the evidence presented by the parties. "Once the issue invites a review of the evidence, the question posed is one of fact."12
The petitioners are, therefore, raising questions of facts beyond the ambit of the Court's review.
Nevertheless, this Court has thoroughly reviewed the records in this case and found that the NLRC did not commit any grave abuse of its discretion amounting to lack or excess of jurisdiction in rendering its decision in favor of the respondent. The CA acted in accord with the evidence on record and case law when it dismissed the petition and affirmed the assailed decision and resolution of the NLRC.
In the main, this Court is in consonance with the CA that the instant case is not about jurisdiction to determine the validity of the set-off but more of the petitioner's authority to deduct from the redundancy pay of the respondent his outstanding loans obtained from different entities. It is whether the deductions done by the petitioners are authorized under existing laws or subject to a written authorization from the respondent.13cralawred
The antecedent facts that gave rise to the respondent's dismissal from employment are not disputed in this case. There is no question about the validity of the MRP implemented by PLDT in 1995, since redundancy is one of the authorized causes for termination of employment.14
The respondent, however, argued that the deduction of the outstanding loans that he obtained from different entities from his redundancy pay was contrary to law. On the other hand, the petitioners insisted that they can validly deduct the said loans from the respondent's redundancy pay since the respondent was able to obtain said loans because of his employment with PLDT.
It is clear in Article 11315
of the Labor Code that no employer, in his own behalf or in behalf of any person, shall make any deduction from the wages of his employees, except in cases where the employer is authorized by law or regulations issued by the Secretary of Labor and Employment, among others. The Omnibus Rules Implementing the Labor Code, meanwhile, provides that deductions from the wages of the employees may be made by the employer when such deductions are authorized by law, or when the deductions are with the written authorization of the employees for payment to a third person.16
Thus, any withholding of an employee's wages by an employer may only be allowed in the form of wage deductions under the circumstances provided in Article 113 of the Labor Code, as well as the Omnibus Rules implementing it. Further, Article 11617
of the Labor Code clearly provides that it is unlawful for any person, directly or indirectly, to withhold any amount from the wages of a worker without the worker's consent.
In this case, the deductions made to the respondent's redundancy pay do not fall under any of the circumstances provided under Article 113, nor was it established with certainty that the respondent has consented to the said deductions or that the petitioners had authority to make such deductions.
As aptly stated by the CA, the matter would have been different if the deductions refer to the respondent's contributions for his being a member of SSS, HDMF, or withholding taxes on income, because if such was the case, the contributions are deductions already sanctioned by existing laws. Here, it is evidently emphasized that the subject deductions pertain to the respondent's outstanding loans from various entities.
Furthermore, the petitioners may not offset the outstanding loans of the respondent against the latter's monetary benefits. The records expressly revealed that the respondent has obtained various loans from different entities and not with PLDT. Accordingly, set-off or legal compensation cannot take place between PLDT and the respondent because they are not mutually creditor and debtor of each other. Thus, there can be no valid set-off because the respondent's creditor is not PLDT.18cralawred
The Court further agrees with the labor tribunals that the petitioners cannot offset the outstanding balance of the respondent's loan obligation with his redundancy pay because the balance on the loan does not come within the scope of jurisdiction of the LA. The demand for payment of the said loans is not a labor, but a civil dispute. It involves debtor-creditor relations, rather than employee-employer relations. Evidently, the respondent's unpaid balance on his loans cannot be offset against the redundancy pay due to him.
In fine, the Court rules that PLDT has no legal right to withhold the respondent's redundancy pay and other benefits to recompense for his outstanding loan obligations to different entities. The respondent's entitlement to his redundancy pay is mandated by law which the petitioners cannot unjustly deny.WHEREFORE
, the Decision dated February 15, 2010 and Resolution dated May 25, 2010 of the Court of Appeals in CA-G.R. SP No. 108297 are AFFIRMED.SO ORDERED.Peralta,* (Acting Chairperson), Villarama, Jr., Reyes, Perlas-Bernabe,**
and Jardeleza, JJ
* Acting Chairperson per Special Order No. 1815 dated October 3, 2014 vice Associate Justice Presbitero J. Velasco, Jr.
**Additional member per Special Order No. 1816 dated October 3, 2014 vice Associate Justice Presbitero J. Velasco, Jr.
1Rollo, pp. 10-45.
2 Penned by Associate Justice Rosmari D. Carandang, with Associate Justices Ramon M. Bato, Jr. and Amy C. Lazaro-Javier, concurring; id. at 49-62.
3 Id. at 65-66.
4 Id. at 91-97.
5 Id. at 99-100.
6 Issued by Labor Arbiter Thelma M. Concepcion; id. at 154-160.
7 PLDT Service Cooperative Inc. was later renamed as PLDT Employees Multi-Purpose Cooperative.
Rollo, p. 157.
Home Development Mutual Fund Loan
Manggagawa ng Komunikasyon sa Pilipinas Loan
PLDT Employees Credit Cooperative, Inc. Loan
PLDT Service Cooperative, Inc. Loan
Total Outstanding Loans
9Rollo, p. 160.
10 Id. at 58-59.
11Lopez Sugar Corp. v. Franco, 497 Phil. 806, 817 (2005).
12 Go v. Looyuko, G.R. No. 196529, July 1, 2013, 700 SCRA 313, 318-319.
13Rollo, p. 35.
14Article 283. Closure of establishment and reduction of personnel. - The employer may also terminate the employment of any employee due to the installation of labor saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of the operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title, by serving a written notice on the workers and the Department of Labor and Employment at least one (1) month before the intended date thereof. In case of termination due to the installation of labor saving devices or redundancy, the worker affected thereby shall be entitled to a separation pay equivalent to at least his one (1) month pay or to at least one (1) month pay for every year of service, whichever is higher. In case of retrenchment to prevent losses and in cases of closures or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses, the separation pay shall be equivalent to one (1) month pay or to at least one-half (1/2) month pay for every year of service, whichever is higher. A fraction of at least six (6) months shall be considered one (1) whole year.
15 Article 113. Wage Deduction. —No employer, in his own behalf or in behalf of any person, shall make any deduction from wages of his employees, except:chanroblesvirtuallawlibrary
(a) In cases where the worker is insured with his consent by the employer, and the deduction is to recompense the employer for the amount paid by him as premium on the insurance;
(b) For union dues, in cases where the right of the worker or his union to check-off has been recognized by the employer or authorized in writing by the individual worker concerned; and
(c) In cases where the employer is authorized by law or regulations issued by Secretary of Labor.
16Rule VIII, Section 10. Deductions from the wages of the employees may be made by the employer in any of the following cases:
(a) When the deductions are authorized by law, including deductions for the insurance premiums advanced by the employer in behalf of the employee as well as union dues where the right to check-off has been recognized by the employer or authorized in writing by the individual employee himself;
(b) When the deductions are with the written authorization of the employees for payment to a third person and the employer agrees to do so, provided that the latter does not receive any pecuniary benefit, directly or indirectly, from the transaction
17Article 116. Withholding of wages and kickbacks prohibited. It shall be unlawful for any person, directly or indirectly, to withhold any amount from the wages of a worker or induce him to give up any part of his wages by force, stealth, intimidation, threat or by any other means whatsoever without the worker's consent.