1 Labor and Social Legislation I | 13 October 2020 | Atty.

Jerwin Lim

G.R. No. 152894 August 17, 2007 On 25 February 1999, the Labor Arbiter dismissed the complaint for lack
of merit but ordered petitioner to pay Palad her last salary and her pro-
CENTURY CANNING CORPORATION, Petitioner, rated 13th month pay. The dispositive portion of the Labor Arbiter’s
vs. decision reads:
COURT OF APPEALS and GLORIA C. PALAD, Respondents.
WHEREFORE, premises considered, judgment is hereby rendered
DECISION declaring that the complaint for illegal dismissal filed by the complainant
against the respondents in the above-entitled case should be, as it is
CARPIO, J.: hereby DISMISSED for lack of merit. However, the respondents are
hereby ordered to pay the complainant the amount of ONE THOUSAND
SIX HUNDRED THIRTY-TWO PESOS (₱1,632.00), representing her last
The Case
salary and the amount of SEVEN THOUSAND TWO HUNDRED
TWENTY EIGHT (₱7,228.00) PESOS representing her prorated 13th
This is a petition for review1 of the Decision2 dated 12 November 2001 month pay.
and the Resolution dated 5 April 2002 of the Court of Appeals in CA-G.R.
SP No. 60379.
All other issues are likewise dismissed.

The Facts
SO ORDERED.6

On 15 July 1997, Century Canning Corporation (petitioner) hired Gloria

On appeal, the National Labor Relations Commission (NLRC) affirmed
C. Palad (Palad) as "fish cleaner" at petitioner’s tuna and sardines
with modification the Labor Arbiter’s decision, thus:
factory. Palad signed on 17 July 1997 an apprenticeship agreement3 with
petitioner. Palad received an apprentice allowance of ₱138.75 daily. On
25 July 1997, petitioner submitted its apprenticeship program for WHEREFORE, premises considered, the decision of the Arbiter dated 25
approval to the Technical Education and Skills Development Authority February 1999 is hereby MODIFIED in that, in addition, respondents are
(TESDA) of the Department of Labor and Employment (DOLE). On 26 ordered to pay complainant’s backwages for two (2) months in the amount
September 1997, the TESDA approved petitioner’s apprenticeship of ₱7,176.00 (₱138.75 x 26 x 2 mos.). All other dispositions of the Arbiter
program.4 as appearing in the dispositive portion of his decision are AFFIRMED.

According to petitioner, a performance evaluation was conducted on 15 SO ORDERED.7

November 1997, where petitioner gave Palad a rating of N.I. or "needs
improvement" since she scored only 27.75% based on a 100% performance Upon denial of Palad’s motion for reconsideration, Palad filed a special
indicator. Furthermore, according to the performance evaluation, Palad civil action for certiorari with the Court of Appeals. On 12 November
incurred numerous tardiness and absences. As a consequence, petitioner 2001, the Court of Appeals rendered a decision, the dispositive portion of
issued a termination notice5 dated 22 November 1997 to Palad, informing which reads:
her of her termination effective at the close of business hours of 28
November 1997. WHEREFORE, in view of the foregoing, the questioned decision of the
NLRC is hereby SET ASIDE and a new one entered, to wit:
Palad then filed a complaint for illegal dismissal, underpayment of
wages, and non-payment of pro-rated 13th month pay for the year 1997. (a) finding the dismissal of petitioner to be illegal;
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(b) ordering private respondent to pay petitioner her 1. WHETHER THE COURT OF APPEALS COMMITTED
underpayment in wages; REVERSIBLE ERROR IN HOLDING THAT PRIVATE
RESPONDENT WAS NOT AN APPRENTICE; and
(c) ordering private respondent to reinstate petitioner to her
former position without loss of seniority rights and to pay her full 2. WHETHER THE COURT OF APPEALS COMMITTED
backwages computed from the time compensation was withheld REVERSIBLE ERROR IN HOLDING THAT PETITIONER HAD
from her up to the time of her reinstatement; NOT ADEQUATELY PROVEN THE EXISTENCE OF A VALID
CAUSE IN TERMINATING THE SERVICE OF PRIVATE
(d) ordering private respondent to pay petitioner attorney’s fees RESPONDENT.10
equivalent to ten (10%) per cent of the monetary award herein;
and The Ruling of the Court

(e) ordering private respondent to pay the costs of the suit. The petition is without merit.

SO ORDERED.8 Registration and Approval by the TESDA of Apprenticeship

Program Required Before Hiring of Apprentices
The Ruling of the Court of Appeals
The Labor Code defines an apprentice as a worker who is covered by a
The Court of Appeals held that the apprenticeship agreement which written apprenticeship agreement with an employer.11 One of the
Palad signed was not valid and binding because it was executed more objectives of Title II (Training and Employment of Special Workers) of the
than two months before the TESDA approved petitioner’s apprenticeship Labor Code is to establish apprenticeship standards for the protection of
program. The Court of Appeals cited Nitto Enterprises v. National Labor apprentices.12 In line with this objective, Articles 60 and 61 of the Labor
Relations Commission,9 where it was held that prior approval by the Code provide:
DOLE of the proposed apprenticeship program is a condition sine qua
non before an apprenticeship agreement can be validly entered into. ART. 60. Employment of apprentices. — Only employers in the highly
technical industries may employ apprentices and only in
The Court of Appeals also held that petitioner illegally dismissed Palad. apprenticeable occupations approved by the Minister of Labor
The Court of Appeals ruled that petitioner failed to show that Palad was and Employment. (Emphasis supplied)
properly apprised of the required standard of performance. The Court of
Appeals likewise held that Palad was not afforded due process because ART. 61. Contents of apprenticeship agreements. — Apprenticeship
petitioner did not comply with the twin requirements of notice and agreements, including the wage rates of apprentices, shall conform to the
hearing. rules issued by the Minister of Labor and Employment. The period of
apprenticeship shall not exceed six months. Apprenticeship
The Issues agreements providing for wage rates below the legal minimum
wage, which in no case shall start below 75 percent of the
Petitioner raises the following issues: applicable minimum wage, may be entered into only in
accordance with apprenticeship programs duly approved by the
Minister of Labor and Employment. The Ministry shall develop
standard model programs of apprenticeship. (Emphasis supplied)

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In Nitto Enterprises v. National Labor Relations Commission,13 the Court of the DOLE in apprenticeship programs and agreements cannot be
cited Article 61 of the Labor Code and held that an apprenticeship debased.
program should first be approved by the DOLE before an apprentice may
be hired, otherwise the person hired will be considered a regular Hence, since the apprenticeship agreement between petitioner and
employee. The Court held: private respondent has no force and effect in the absence of a valid
apprenticeship program duly approved by the DOLE, private
In the case at bench, the apprenticeship agreement between petitioner respondent’s assertion that he was hired not as an apprentice but as a
and private respondent was executed on May 28, 1990 allegedly delivery boy ("kargador" or "pahinante") deserves credence. He should
employing the latter as an apprentice in the trade of "care maker/molder." rightly be considered as a regular employee of petitioner as defined by
On the same date, an apprenticeship program was prepared by petitioner Article 280 of the Labor Code x x x. (Emphasis supplied) 14
and submitted to the Department of Labor and Employment. However,
the apprenticeship agreement was filed only on June 7, 1990. Republic Act No. 779615 (RA 7796), which created the TESDA, has
Notwithstanding the absence of approval by the Department of Labor and transferred the authority over apprenticeship programs from the Bureau
Employment, the apprenticeship agreement was enforced the day it was of Local Employment of the DOLE to the TESDA.16 RA 7796 emphasizes
signed. TESDA’s approval of the apprenticeship program as a pre-requisite for
the hiring of apprentices. Such intent is clear under Section 4 of RA 7796:
Based on the evidence before us, petitioner did not comply with the
requirements of the law. It is mandated that apprenticeship SEC. 4. Definition of Terms. — As used in this Act:
agreements entered into by the employer and apprentice shall be
entered only in accordance with the apprenticeship program xxx
duly approved by the Minister of Labor and Employment.
j) "Apprenticeship" training within employment with
Prior approval by the Department of Labor and Employment of compulsory related theoretical instructions involving a contract
the proposed apprenticeship program is, therefore, a condition between an apprentice and an employer on an approved
sine qua non before an apprenticeship agreement can be validly apprenticeable occupation;
entered into.
k) "Apprentice" is a person undergoing training for an
The act of filing the proposed apprenticeship program with the approved apprenticeable occupation during an established
Department of Labor and Employment is a preliminary step towards its period assured by an apprenticeship agreement;
final approval and does not instantaneously give rise to an employer-
apprentice relationship.
l) "Apprentice Agreement" is a contract wherein a prospective
employer binds himself to train the apprentice who in turn
Article 57 of the Labor Code provides that the State aims to "establish a accepts the terms of training for a recognized apprenticeable
national apprenticeship program through the participation of employers, occupation emphasizing the rights, duties and
workers and government and non-government agencies" and "to establish responsibilities of each party;
apprenticeship standards for the protection of apprentices." To translate
such objectives into existence, prior approval of the DOLE to any
m) "Apprenticeable Occupation" is an occupation officially
apprenticeship program has to be secured as a condition sine qua non
endorsed by a tripartite body and approved for apprenticeship
before any such apprenticeship agreement can be fully enforced. The role
by the Authority [TESDA]; (Emphasis supplied)
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In this case, the apprenticeship agreement was entered into between the employee has been engaged to perform activities which are usually
parties before petitioner filed its apprenticeship program with the necessary or desirable in the usual business or trade of the employer.
TESDA for approval. Petitioner and Palad executed the apprenticeship
agreement on 17 July 1997 wherein it was stated that the training would Illegal Termination of Palad
start on 17 July 1997 and would end approximately in December
1997.17 On 25 July 1997, petitioner submitted for approval its We shall now resolve whether petitioner illegally dismissed Palad.
apprenticeship program, which the TESDA subsequently approved on 26
September 1997.18 Clearly, the apprenticeship agreement was enforced
Under Article 27922 of the Labor Code, an employer may terminate the
even before the TESDA approved petitioner’s apprenticeship program.
services of an employee for just causes23 or for authorized
Thus, the apprenticeship agreement is void because it lacked prior
causes.24 Furthermore, under Article 277(b)25 of the Labor Code, the
approval from the TESDA.
employer must send the employee who is about to be terminated, a
written notice stating the causes for termination and must give the
The TESDA’s approval of the employer’s apprenticeship program is employee the opportunity to be heard and to defend himself. Thus, to
required before the employer is allowed to hire apprentices. Prior constitute valid dismissal from employment, two requisites must concur:
approval from the TESDA is necessary to ensure that only employers in (1) the dismissal must be for a just or authorized cause; and (2) the
the highly technical industries may employ apprentices and only in employee must be afforded an opportunity to be heard and to defend
apprenticeable occupations.19 Thus, under RA 7796, employers can only himself.26
hire apprentices for apprenticeable occupations which must be officially
endorsed by a tripartite body and approved for apprenticeship by the
In this case, the Labor Arbiter held that petitioner terminated Palad for
TESDA.1avvphil This is to ensure the protection of apprentices and to
habitual absenteeism and poor efficiency of performance. Under Section
obviate possible abuses by prospective employers who may want to take
25, Rule VI, Book II of the Implementing Rules of the Labor Code,
advantage of the lower wage rates for apprentices and circumvent the
habitual absenteeism and poor efficiency of performance are among the
right of the employees to be secure in their employment.
valid causes for which the employer may terminate the apprenticeship
agreement after the probationary period.
The requisite TESDA approval of the apprenticeship program prior to the
hiring of apprentices was further emphasized by the DOLE with the
However, the NLRC reversed the finding of the Labor Arbiter on the
issuance of Department Order No. 68-04 on 18 August 2004. Department
issue of the legality of Palad’s termination:
Order No. 68-04, which provides the guidelines in the implementation of
the Apprenticeship and Employment Program of the government,
specifically states that no enterprise shall be allowed to hire As to the validity of complainant’s dismissal in her status as an
apprentices unless its apprenticeship program is registered and apprentice, suffice to state that the findings of the Arbiter that
approved by TESDA.20 complainant was dismissed due to failure to meet the standards is
nebulous. What clearly appears is that complainant already passed the
probationary status of the apprenticeship agreement of 200 hours at the
Since Palad is not considered an apprentice because the apprenticeship
time she was terminated on 28 November 1997 which was already the
agreement was enforced before the TESDA’s approval of petitioner’s
fourth month of the apprenticeship period of 1000 hours. As such, under
apprenticeship program, Palad is deemed a regular employee performing
the Code, she can only be dismissed for cause, in this case, for poor
the job of a "fish cleaner." Clearly, the job of a "fish cleaner" is necessary
efficiency of performance on the job or in the classroom for a prolonged
in petitioner’s business as a tuna and sardines factory. Under Article
period despite warnings duly given to the apprentice.
28021 of the Labor Code, an employment is deemed regular where the

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We noted that no clear and sufficient evidence exist to warrant failed to prove the authenticity of the performance evaluation which
her dismissal as an apprentice during the agreed period. Besides petitioner claims to have conducted on Palad, where Palad received a
the absence of any written warnings given to complainant performance rating of only 27.75%. Petitioner merely relies on the
reminding her of "poor performance," respondents’ evidence in performance evaluation to prove Palad’s inefficiency. It was likewise not
this respect consisted of an indecipherable or unauthenticated shown that petitioner ever apprised Palad of the performance standards
xerox of the performance evaluation allegedly conducted on set by the company. When the alleged valid cause for the termination of
complainant. This is of doubtful authenticity and/or credibility, employment is not clearly proven, as in this case, the law considers the
being not only incomplete in the sense that appearing thereon is matter a case of illegal dismissal.29
a signature (not that of complainant) side by side with a date
indicated as "1/16/98". From the looks of it, this signature is close Furthermore, Palad was not accorded due process. Even if petitioner did
to and appertains to the typewritten position of conduct a performance evaluation on Palad, petitioner failed to warn
"Division/Department Head", which is below the signature of Palad of her alleged poor performance. In fact, Palad denies any
complainant’s immediate superior who made the evaluation knowledge of the performance evaluation conducted and of the result
indicated as "11-15-97." thereof. Petitioner likewise admits that Palad did not receive the notice of
termination30 because Palad allegedly stopped reporting for work. The
The only conclusion We can infer is that this evaluation was records are bereft of evidence to show that petitioner ever gave Palad the
made belatedly, specifically, after the filing of the case and opportunity to explain and defend herself. Clearly, the two requisites for
during the progress thereof in the Arbitral level, as shown that a valid dismissal are lacking in this case.
nothing thereon indicate that complainant was notified of the
results. Its authenticity therefor, is a big question mark, and WHEREFORE, we AFFIRM the Decision dated 12 November 2001 and
hence lacks any credibility. Evidence, to be admissible in the Resolution dated 5 April 2002 of the Court of Appeals in CA-G.R. SP
administrative proceedings, must at least have a modicum of No. 60379.
authenticity. This, respondents failed to comply with. As such,
complainant is entitled to the payment of her wages for the remaining SO ORDERED.
two (2) months of her apprenticeship agreement.27 (Emphasis supplied)
ANTONIO T. CARPIO
Indeed, it appears that the Labor Arbiter’s conclusion that petitioner Associate Justice
validly terminated Palad was based mainly on the performance
evaluation allegedly conducted by petitioner. However, Palad alleges that
she had no knowledge of the performance evaluation conducted and that
she was not even informed of the result of the alleged performance
evaluation. Palad also claims she did not receive a notice of dismissal, nor
was she given the chance to explain. According to petitioner, Palad did
not receive the termination notice because Palad allegedly stopped
reporting for work after being informed of the result of the evaluation.

Under Article 227 of the Labor Code, the employer has the burden of
proving that the termination was for a valid or authorized
cause.28 Petitioner failed to substantiate its claim that Palad was
terminated for valid reasons. In fact, the NLRC found that petitioner
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