497 Phil. 8
CALLEJO, SR., J.:
WHEREFORE, all the foregoing premises being considered, judgment is hereby rendered ordering the respondent company to pay complainant the sum of P7,080,546.00, plus ten percent (10%) thereof as and for attorney’s fees.Undaunted, the respondent corporation appealed the decision to the NLRC, alleging that:
SO ORDERED.[9]
The respondent corporation averred that based on the petitioner’s memorandum, his admissions and the contract of employment, the petitioner was not entitled to the cash conversion of his sick and vacation leave credits. While the respondent corporation conceded that the petitioner may have been entitled to unlimited sick and vacation leave benefits during his employment, it maintained that no such promise was made by Lim to convert the same; even assuming that such verbal promise was made, the respondent corporation was not bound thereby since the petitioner failed to adduce the written conformity of its board of directors. The respondent corporation insisted that the claims of the petitioner were barred under Article 291 of the Labor Code.
- THE LABOR ARBITER ERRED IN CONCLUDING THAT KWOK WAS COVERED BY THE NOVEMBER 6, 1981 MEMORANDUM ON VACATION AND SICK LEAVE CREDITS.[10]
- THE LABOR ARBITER ERRED IN CONCLUDING THAT IT WAS DISCRIMINATORY NOT TO GRANT KWOK THESE BENEFITS.[11]
- KWOK’S CLAIMS ARE BASELESS.[12]
- KWOK’S CLAIMS FOR BENEFITS ACCRUING FROM 1966 ARE BARRED BY PRESCRIPTION.[13]
- THERE IS NO BASIS FOR THE AWARD OF P7,080,546.00.[14]
The non-performance by PCMC of this particular promise to convert in cash all of his unused cash (sic) and sick leave credits was precipitated by the falling out of the marriage between Mr. Kwok and his wife, the daughter of Mr. Lim. In fact, even while Mr. Kwok was still the Executive Vice-President and General Manager of PCMC, when the falling out of the said marriage became apparent, the other benefits or perquisites which Mr. Kwok used to enjoy were immediately curtailed by Mr. Lim to the prejudice of Mr. Kwok.[15]On November 29, 1999, the NLRC, by majority vote, rendered judgment granting the appeal, reversing and setting aside the decision of the Labor Arbiter.[16] The NLRC ordered the dismissal of the complaint. Commissioner Angelita A. Gacutan filed a dissenting opinion.[17]
On February 28, 2001, the CA rendered judgment affirming the decision of the NLRC and dismissing the petition.[19] The petitioner’s motion for reconsideration thereof was denied by the appellate court, per its Resolution[20] dated July 17, 2001.I
THE COMMISSION ACTED WITHOUT OR IN EXCESS OF ITS JURISDICTION OR WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT DECLARED THAT THE VERBAL PROMISE OF MR. LIM TO PETITIONER WAS UNENFORCEABLE.II
THE COMMISSION ACTED WITHOUT OR IN EXCESS OF ITS JURISDICTION OR WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT RULED THAT THE VERBAL PROMISE BY MR. LIM TO PETITIONER WAS NOT BINDING AS IT WAS NOT APPROVED BY THE BOARD OF DIRECTORS.III
THE COMMISSION ACTED WITHOUT OR IN EXCESS OF ITS JURISDICTION OR WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT IGNORED STRONG EVIDENCE THAT PCMC CLOTHED MR. LIM WITH AWESOME POWERS TO GRANT BENEFITS TO ITS EMPLOYEES INCLUDING PETITIONER AND RATIFIED THE SAME BY ITS SILENCE AND WHEN IT IGNORED TOO EXISTING JURISPRUDENCE ON THE MATTER.IV
THE COMMISSION ACTED WITHOUT OR IN EXCESS OF ITS JURISDICTION OR WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT IGNORED STRONG AND CLEAR EVIDENCE THAT IN PCMC THE GIVING OF BENEFITS TO PETITIONER, THOUGH NOT IN WRITING, WAS A PREVALENT PRACTICE.V
THE COMMISSION ACTED WITHOUT OR IN EXCESS OF ITS JURISDICTION OR WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT RULED THAT THE MEMORANDUM DATED APRIL 26, 1997 APPLICABLE TO MR. RAOUL RODRIGO WAS ALSO APPLICABLE TO PETITIONER.[18]
As gleaned from his Memorandum, the petitioner posits that he had adduced substantial evidence to prove that Lim, as president and chairman of the respondent corporation’s board of directors, made a verbal promise to give him the cash conversion of his accumulated vacation and sick leave credits upon his retirement (that is, benefits at par with the number of days to which the officer next in rank to him was entitled). According to the petitioner, his claim is fortified by the fact that his successor, Raoul Rodrigo, has unlimited vacation and sick leave credits. The petitioner further asserts that he would not have accepted the positions in the respondent corporation without such benefit, especially since his subordinates were also enjoying the same. He posits that he was entitled to the said privilege because of his rank. He, likewise, claims that, in contrast to the evidence he has presented, the respondent corporation failed to adduce proof of its affirmative allegations.I
The Hon. Court of Appeals, contrary to law, gravely erred and disregarded established jurisprudence in ruling that petitioner has not adduced sufficient evidence to support his claim that he was, indeed, promised the cash conversion of his unused vacation and sick leave credits upon retirement.[21]II
The Hon. Court of Appeals gravely erred in ruling that even if private respondent’s (sic) Mr. Lim did make him such promise, the same cannot be enforced.[22]III
The Hon. Court of Appeals gravely erred and disregarded clear jurisprudence on the matter when it ruled that there is no showing that private respondent, thru its board of directors either recognized, approved or ratified the promise made by Mr. Lim to petitioner.[23]
Except for his bare assertions, petitioner has not adduced sufficient evidence to support his claim that he was, indeed, promised the cash conversion of his unused vacation and sick leaves upon retirement. Petitioner harps on what he calls the prevalent practice in PCMC of giving him benefits, such as the use of golf and country club facilities, salary increases, the use of the company vehicle and driver, and sharing in PCMC’s annual net income, without either a written contract or a Board resolution to back it up. Respondent PCMC denies all these, however. According to respondent, petitioner’s share in the income of the company is actually part of the consultancy fee which PCMC pays DK Management Services, Inc., a firm owned by petitioner’s company. PCMC adds that the yearly salary increases of corporate officers were always with the prior approval of the Board.The CA made short shift of the claim of the petitioner that per Memorandum dated November 6, 1981, he was not entitled to the benefits of the company policy of commutation of leave credits. Indeed, the company policy of conversion into equivalent cash of unused vacation and sick leave credits applied only to its regular employees. The petitioner failed to offer evidence to rebut the testimony of Nel Gopez, Chief Accountant of the respondent, that the petitioner was not among the regular employees covered by the policy for the simple reason that he had unlimited vacation leave benefits. As stated by the CA, the petitioner no less corroborated the testimony of Gopez, thus:
Nevertheless, assuming that petitioner was, indeed, given the benefits which he so claimed, it does not necessarily follow that among those is the cash conversion of his accumulated leaves. It is a basic rule in evidence that each party must prove his affirmative allegation. Since the burden of proof lies with the party who asserts an affirmative allegation, the plaintiff or complainant has to prove his affirmative allegations in the complaint and the defendant or respondent has to prove the affirmative allegations in his affirmative defenses and counterclaim. Petitioner, in the case at bar, has failed to discharge this burden.[26]
ATTY. PIMENTELWe have reviewed the records and found no evidence to controvert the following findings of the CA and its ratiocinations on its resolution of the petitioner’s submissions:
And, so you mention[ed] earlier that … the policy on vacation leave benefits apply for category one employee(s) and rank-and-file employee(s)?
WITNESS (Mr. Nel Gopez)
Yes.
ATTY. PIMENTEL
And who are considered category one employee(s)?
WITNESS
Category One employees are from the rank and of Senior Vice-President and Assistant General Manager and below, up to the level of department managers.
ATTY. PIMENTEL
How about the complainant, Mr. Kwok, does he falling (sic) to the category one?
WITNESS
As far as I can remember, he is (sic) not belong to category one employee.
ATTY. PIMENTEL
Therefore, he is not entitled to the lump sum benefit?
WITNESS
Yes, Ma’am.
ATTY. PIMENTEL
And would you know, Mr. Witness, why he is (sic) not given the conversion of the vacation leave benefits at the time category one employees sectors (sic) are given?
WITNESS
Because he has, as far as I can remember, he has unlimited vacation leave.”
This was corroborated by petitioner himself when he testified in this wise:
ATTY. PIMENTEL
Mr. Witness, you occupied the position of Executive Vice-President and General Manager. You agree with me that this position or this office of Executive Vice-President and General Manager are not covered by this policy.
WITNESS (Donald Kwok)
Yes, it is not covered by this policy.…
ATTY. PIMENTEL
So this policy applies to persons below you and your father-in-law?
WITNESS
Yes, right.
ATTY. PIMENTEL
And this policy does not apply to you?
WITNESS
As far as I’m concerned, it does not apply for (sic) me.
In all respects, therefore, petitioner, by virtue of his position as Executive Vice-President, is not covered by the November 6, 1981 Memorandum granting PCMC employees the conversion of their unused vacation and sick leaves into cash.[27]
Second, even assuming that petitioner is included among the “regular employees” of PCMC referred to in said memorandum, there is no evidence that he complied with the cut-off dates for the filing of the cash conversion of vacation and sick leaves. This being so, we find merit in respondent’s argument that petitioner’s money claims have already been barred by the three-year prescriptive period under Article 291 of the Labor Code, as amended.We are not convinced by the petitioner’s claim that Lim capriciously deprived him of his entitlement to the cash conversion of his accumulated vacation and sick leave credits simply because of his estrangement from his wife, who happens to be Lim’s daughter. The petitioner did not adduce any evidence to show that he appealed to the respondent corporation’s board of directors for the implementation of the said privilege which was allegedly granted to him. Even if Lim was the president and chairman of the respondent corporation’s board of directors, the rest of the membership of the board could have overruled him and granted to the petitioner his claim if, indeed, the latter was entitled thereto. Indeed, even the petitioner admitted that, after his retirement, the board of directors granted to him salary increase for two years prior to his retirement. If the claim of the petitioner had been approved by the board of directors, for sure, it would have approved the same despite his falling out with the daughter of Lim.
Third, and this is of primordial importance, there is no proof that petitioner has filed vacation and sick leaves with PCMC’s personnel department. Without a record of petitioner’s absences, there is no way to determine the actual number of leave credits he is entitled to. The P7,080,546.00 figure arrived at by petitioner supposedly representing the cash equivalent of his earned sick and vacation leaves is thus totally baseless.
And, fourth, even assuming that PCMC President Patricio Lim did promise petitioner the cash conversion of his leaves, we agree with respondent that this cannot bind the company in the absence of any Board resolution to that effect. We must stress that the personal act of the company president cannot bind the corporation. As explicitly stated by the Supreme Court in People’s Aircargo and Warehousing Co., Inc. v. Court of Appeals:“The general rule is that, in the absence of authority from the board of directors, no person, not even its officers, can validly bind a corporation. A corporation is a juridical person, separate and distinct from its stockholders and members, ‘having xxx powers, attributes and properties expressly authorized by law or incident to its existence.’Anent the third assigned error, petitioner maintains that the PCMC Board of Directors has granted its President, Patricio Lim, awesome powers to grant benefits to its employees, adding that the Board has always given its consent to the way Lim ran the affairs of the company especially on matters relating to the benefits that its corporate officers enjoyed.…
“… the power and the responsibility to decide whether the corporation should enter into a contract that will bind the corporation is lodged in the board, subject to the articles of incorporation, by-laws, or relevant provisions of law.”
True, jurisprudence holds that the president of a corporation possesses the power to enter into a contract for the corporation when “the conduct on the part of both the president and corporation [shows] that he had been in the habit of acting in similar matters on behalf of the company and that the company had authorized him so to act and had recognized, approved and ratified his former and similar actions.”
In the case at bar, however, there is no showing that PCMC had either recognized, approved or ratified the cash conversion of petitioner’s leave credits as purportedly promised to him by Lim. On the contrary, PCMC has steadfastly maintained that “the Company, through the Board, has long adopted the policy of granting its earlier mentioned corporate officers unlimited leave benefits denying them the privilege of converting their unused vacation or sick leave benefits into their cash equivalent.”
As to the last assigned error, petitioner faults the NLRC for holding as applicable to petitioner, the April 26, 1997 Memorandum issued by PCMC to Raoul Rodrigo, Donald Kwok’s successor as company executive vice-president. The said memo granted Rodrigo unlimited sick and vacation leave credits but disallowed the cash conversion thereof. Before he became executive vice-president, Rodrigo was senior vice-president and enjoyed the commutation of his unused vacation and sick leaves.
We note that the April 26, 1997 memo was issued to Rodrigo when petitioner was already retired from PCMC. While said memorandum was particularly directed to Rodrigo, however, this does not necessarily mean that petitioner, as former executive vice-president, was then not prohibited from converting his earned vacation and sick leaves into cash since he was not issued a similar memo. On the contrary, the memo simply affirms the long-standing company practice of excluding PCMC’s top two positions, that of president and executive vice-president, from the commutation of leaves. As heretofore discussed, among the perks of those occupying these posts is the privilege of having unlimited leaves, which is totally incompatible with the concept of converting unused leave credits into their cash equivalents.[28]