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534 Phil. 816


[ G.R. NO. 166507, September 27, 2006 ]




Before us is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as amended, assailing the Decision [1] dated October 20, 2004 and Resolution[2] dated December 20, 2004 rendered by the Court of Appeals in CA-G.R. SP No. 76121, entitled "Nory A. Juangco, petitioner, v. National Labor Relations Commission, Amkor Technology Philippines, Inc., Mike Petrucci, Danny D. Franklin And Rosemarie S. Katalbas, respondents."

The instant controversy stemmed from a complaint for illegal dismissal, damages and attorney's fees filed with the Labor Arbiter by Nory A. Juangco, respondent, against Amkor Technology Philippines, Inc., Anthony Michael Petrucci, Danny D. Franklin and Rosemarie S. Katalbas, petitioners, docketed as NLRC NCR Case No. 30-04-02141-02.

Respondent, in her complaint, alleged that sometime in September 1990, she was employed as production control senior supervisor by Amkor Technology Philippines, Inc., petitioner company. Eventually, she became a production control executive director with a monthly salary of P220,000.00. During her employment, she received several merit increases and bonuses from petitioner company in recognition of her exemplary performance. Sometime in October 2001, Tony Ng, respondent's immediate superior, resigned and was replaced by Anthony Michael Petrucci, petitioner, as president. The new management implemented several drastic changes in the existing corporate policies and the composition of the corporate management team. During an emergency meeting on November 15, 2001, petitioners informed her of a staff reorganization and she realized her services were being terminated effective immediately. Petitioners directed her to sign a document setting forth the conditions of her alleged voluntary retirement, such as: (1) payment, on a staggered basis, of separation benefits at the rate of 11/4 months basic salary per year of service and additional two months basic salary in lieu of the one-month notice requirement; and (2) forfeiture of such separation benefits in case of violation of company rules and regulations on confidentiality and disruption of operations. Thereafter, she was ordered to leave the company. On November 21, 2001, after having been paid her separation benefits, she was forced to sign a "Release and Quitclaim."

Petitioners denied respondent's allegations in her complaint. They claimed that as a result of the economic slowdown then experienced in this country, they contemplated to implement cost-cutting measures. Several meetings were conducted by petitioners to discuss the company retrenchment program. Respondent voluntarily submitted herself for retrenchment and then tendered her resignation letter. Respondent, having rendered eleven (11) years of service, was paid by petitioners P3,704,517.98 representing her separation benefits at the rate of 11/4 months basic salary per year of service. Additionally, she received her two months salary, leave credits, 13th month pay, and coop receivable. And after having been paid her separation benefits, she executed and signed, on November 22, 2001, a Release and Quitclaim.

After the submission of the parties' pleadings and position papers, the Labor Arbiter rendered a Decision dated July 31, 2002 holding that respondent was illegally dismissed from employment and ordering petitioners (1) to reinstate her to her former position as executive director without loss of seniority rights and other privileges; and (2) to pay her, jointly and severally, full backwages and other benefits, damages and attorney's fee equivalent to 10% of the monetary awards, thus:
WHEREFORE, premises considered, judgment is hereby rendered declaring the termination of complainant NORY A. JUANGCO illegal.

Accordingly, respondents AMKOR TECHNOLOGY PHILS., INC., MIKE PETRUCCI, DANNY D. FRANKLIN and ROSEMARIE S. KATALBAS are ordered to jointly and solidarily reinstate complainant NORY A. JUANGCO to her former executive position (Executive Director) without loss of earned seniority rights and other benefits and privileges with full backwages from date of dismissal up to actual date of reinstatement in the total amount as of this date P2,025,833.33 computed as follows:
Basic Salary:    
11/15/01 - 7/31/02    
P220,000.00/mo. x 8.50 mos. = P1,870,000.00
13th month pay:    
P1,870,000.00/12 = P 155,833.33
Total = P2,025,833.33
Respondents are further ordered to jointly and solidarily pay complainant her performance bonuses and other benefits she used to receive similarly granted to her co-executive officers.

Respondents are furthermore ordered to pay complainant moral damages in the amount of Five Million Pesos (P5,000,000.00) and exemplary damages in the amount of Three Million Pesos (P3,000,000.00), as well as attorney's fees equivalent to ten percent (10%) of the entire award. The amount already received by complainant shall be considered as partial/advance payment of the judgment award in the final enforcement of the decision.

On appeal, the National Labor Relations Commission (NLRC) promulgated its Decision dated October 1, 2002 reversing the Labor Arbiter's Decision and dismissing respondent's complaint.

Respondent then filed a motion for reconsideration, but was denied by the NLRC in a Resolution dated December 26, 2002. Hence, she filed with the Court of Appeals a petition for certiorari with prayer for issuance of a temporary restraining order and a writ of preliminary injunction.

On October 20, 2004, the appellate court rendered a Decision setting aside the NLRC Decision and reinstating that of the Labor Arbiter, but with modification in the sense that in lieu of reinstatement, respondent was awarded separation pay and a reduced moral and exemplary damages of P500,000.00 and P250,000.00, respectively.

In disposing of the case, the Court of Appeals held:

The petition is impressed with merit.

x x x x x x

Notably, the notice of voluntary retirement and the "Receipt, Release, Waiver and Quitclaim" partake the nature of a contract of adhesion, such that the petitioner had no hand in the preparation of these documents. Since a contract of adhesion is unilaterally prepared by only one party, and the only thing left to be done by the other party is to affix his/her signature, any ambiguity in its provisions or any question as to the voluntariness of its execution should be generally resolved against the party who drafted the document (Magellan Capital Management Corporation vs. Zosa, 355 SCRA 157 [2001]).

Since petitioner claims that she was merely coerced into signing the subject documents, the voluntariness of the execution thereof is squarely at issue and petitioner's claim was correctly given due course by the labor arbiter (JMM Promotions and Management, Inc. vs. Court of Appeals, 390 SCRA 223 [2002]). Notably, the labor arbiter did not only find that private respondents failed to prove the voluntariness of the execution of said documents, but it also found that private respondents" copy of the "Receipt and Release, Waiver and Quitclaim" contained insertions which were not found in petitioner's copy.

x x x x x x

Despite the foregoing considerations, public respondent NLRC reversed the labor arbiter's finding of illegal dismissal and relied heavily on the affidavits of "ATP Staff members" stating that petitioner volunteered herself to be included in the retirement program and therefore was not coerced to sign the notice of voluntary retirement and the quitclaim. Pitted against the foregoing circumstances showing the coercion employed upon petitioner, the affidavits deserve no weight and credence for they were executed by the executives employed with private respondent AMKOR and are therefore self-serving.

That petitioner had already accepted her separation pay, is of no moment and did not estop her from questioning the legality of her dismissal. x x x. That petitioner executed the waiver only on November 21, 2001, or after six (6) days from the signing of the notice of voluntary retirement, does not detract from the fact that petitioner was merely forced to resign and the waiver was an afterthought of private respondents to camouflage their misdeeds, as correctly noted by the labor arbiter.

There was therefore, no basis at all for public respondent NLRC's reversal of the labor arbiter's finding of illegal dismissal. As a consequence of petitioner's illegal dismissal, she is entitled to reinstatement and all other privileges withheld from her from the time of her dismissal up to the time of reinstatement. This is in consonance with Article 279 of the Labor Code, which provides that an employee who is unjustly dismissed is entitled to reinstatement (Rodriguez , Jr. vs. National Labor Relations Commission, 393 SCRA 511 [2002]).

However, it is undeniable that the strained relations between the parties render it impracticable to reinstate petitioner who holds a key position as she has a hand in the operations of private respondent AMKOR. The award of separation pay in lieu of reinstatement is more appropriate. Thus, separation pay equivalent to one (1) month salary for every year of service should be awarded in lieu of reinstatement (Hantex Trading Co., Inc. vs. Court of Appeals, 390 SCRA 181 [2002]).

Moreover, the labor arbiter's award of moral damages of P5,000,000.00 and exemplary damages of P3,000,000.00 is excessive under the attendant circumstances. It is doctrinally settled that the power of the courts to grant damages and attorney's fees demands factual, legal and equitable justification (Ranola vs. Court of Appeals, 322 SCRA 1 [2000]). The Court therefore resolves to reasonably reduce the same, and taking into account the circumstances of the case (Asia Pacific Chartering Phils., Inc. vs. Farolan, 393 SCRA 454 [2002]), including the social and financial position of petitioner, private respondents are ordered to pay petitioner moral damages in the amount of Five Hundred Thousand Pesos (P500,000.00) and exemplary damages in the amount of Two Hundred Fifty Thousand Pesos (P250,000.00).

WHEREFORE, the present petition is GRANTED. The assailed Decision dated October 1, 2002 and Resolution dated December 26, 2002 of public respondent NLRC are SET ASIDE and the Decision dated July 31, 2002 of the Labor Arbiter is REINSTATED, with MODIFICATION that in lieu of reinstatement, petitioner Nory A. Juangco is awarded separation pay equivalent to one (1) month salary for every year of service, and the amount of moral damages and exemplary damages awarded to petitioner is hereby reduced to Five Hundred Thousand Pesos (P500,000.00) and Two Hundred Fifty Thousand Pesos (P250,000.00), respectively.

On November 4, 2004, petitioners filed a motion for reconsideration, but was denied by the appellate court in a Resolution dated December 20, 2004.

Hence, this petition for review on certiorari.

Petitioners contend that the Court of Appeals seriously erred (1) in holding that respondent was illegally dismissed; and (2) in finding that respondent is entitled to an award of separation pay, backwages, damages and attorney's fee.

The basic issue for our resolution is whether respondent was illegally dismissed from employment.

The Court of Appeals found that respondent's "notice of voluntary retirement" and the "Receipt, Release, Waiver, and Quitclaim" were already prepared when respondent signed the same. Hence, any question as to the validity of their execution should be generally resolved against petitioners who obviously drafted those documents.

Petitioners merely offered in evidence the affidavits of their executives stating that respondent volunteered to be included in petitioner company's retirement program. Considering that these executives are petitioners' personnel, the Court of Appeals is correct in concluding that their affidavits are self-serving and, therefore, not credible.

Moreover, the fact that respondent filed a complaint for illegal dismissal from employment against petitioners completely negates their claim that she voluntarily retired.

In Molave Tours Corporation v. National Labor Relations Commission,[3] we held:
By vigorously pursuing the litigation of his action against petitioner, private respondent clearly manifested that he has no intention of relinquishing his employment, which act is wholly incompatible to petitioner's assertion that he voluntarily resigned.
But still, petitioners insist that since respondent already received her separation benefits, she can no longer claim that they coerced her to retire. On this point, the Court of Appeals ruled that employees who receive their separation pay are not barred from contesting the legality of their dismissal from the service and their acceptance of those benefits would not amount to estoppel. We agree. Otherwise, employees who have been forced to resign and accept their separation pay can no longer resort to legal remedies.

Thus, we sustain the ruling of the Court of Appeals that respondent did not voluntarily retire; she was forced to retire, tantamount to illegal dismissal. And as correctly pointed out by the same court, it is "impracticable" to reinstate respondent to her former position. In lieu thereof, respondent is entitled to an award of separation pay, plus her full backwages and other privileges and benefits, or their monetary equivalent, during the period of her dismissal up to her supposed actual reinstatement. Since she had been paid P3,704,517.98 as separation benefits, this amount should be deducted from the total monetary award due her.

We observe that respondent failed to prove she is entitled to moral and exemplary damages. Thus, these awards should be deleted.

WHEREFORE, we DENY the petition. The assailed Decision dated October 20, 2004 and Resolution dated December 20, 2004 of the Court of Appeals in CA-G.R. SP No. 76121 are AFFIRMED with MODIFICATION in the sense that the awards for moral and exemplary damages are DELETED. Costs against petitioners.


Puno, (Chairperson), Corona, Azcuna and Garcia, JJ., concur.

[1] Penned by Associate Justice Fernanda Lampas Peralta, and concurred in by Associate Justice Conrado M. Vasquez, Jr. and Associate Justice Edgardo F. Sundiam, Annex "A" of the Petition, Rollo, pp. 62-71.

[2] Annex "B," id., pp. 72-74.

[3] G.R. No. 112909, November 24, 1995, 250 SCRA 325, 330, cited in Shie Jie Corporation v. National Federation of Labor, 463 SCRA 569 (2005).

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