G.R. No. L-12088 - People vs. Macarandang

Philippine Spring Water Resources, Inc. (PSWRI) engaged in the bottled mineral water business hired Juvenstein B. Mahilum as Vice-President for Sales and Marketing for the Bulacan-South Luzon Area.
His compensation included a monthly salary of P15,000.00 along with a commission structure: 0.25% on every cash on delivery transaction and an additional 0.25% on new accounts from July to August 2004.
A Memorandum of Agreement provided that Mahilum would be on probation for six (6) months, with eventual regularization contingent on satisfactory performance in accordance with the company’s Personnel Manual/House Rules.

The schedule included the inauguration of the Bulacan plant and the company’s Christmas party, both slated to occur around December 2004.
Mahilum was designated as the overall chairman of the events and convened a meeting with committee chairpersons to plan the program and budget.
Due to scheduling conflicts—he attended a prior appointment with major clients—and a rescheduling of the planning meeting, Mahilum delegated his duties to Ms. Vicky Evangelista (Vice-President for Administration and Finance).
On the day of the inauguration, Mahilum was not visibly present to supervise the program as he entertained visitors, having assumed that Evangelista was competent to lead the proceedings.
During the event, President and CEO Danilo Lua expressed his displeasure on discovering that Mahilum was neither recognized in the opening remarks nor called for an inaugural speech, raising concerns regarding his supervisory role.

Following the event, Mahilum was summoned to explain why Lua had not been appropriately recognized, leading to his placement under a 30-day preventive suspension.
He submitted his written explanation, and an internal investigation was conducted regarding his alleged lapses during the event.
Upon the expiry of his suspension, Mahilum was barred from entering the workplace. In early March 2005, he received a termination notice via a Memorandum dated January 31, 2005, effective February 1, 2005.
On February 9, 2005, a clearance certificate was issued in connection with the termination; Mahilum was paid approximately P43,998.56 and required to execute a Release, Waiver, and Quitclaim in favor of PSWRI and Danilo Lua.

Mahilum filed a complaint for illegal dismissal, seeking reinstatement, back wages, and damages, contesting that his suspension and termination were wrongful and that the signing of the quitclaim was not entirely voluntary given his financial constraints.
The Labor Arbiter (LA) initially dismissed his complaint on the basis that the quitclaim barred any further questioning of his dismissal, holding that a person of sufficient aptitude could not have been forced into signing it.
The National Labor Relations Commission (NLRC) reversed the LA’s decision, finding that the quitclaim did not amount to reasonable settlement of his cause of action and that he had been illegally dismissed.
The NLRC ruled in favor of Mahilum, awarding him separation pay, back wages (including salary, earned commissions, and benefits), as well as moral and exemplary damages.

PSWRI and Lua, after the NLRC decision, obtained a favorable ruling by the Court of Appeals (CA) on September 30, 2008, which confirmed Mahilum’s illegal dismissal and upheld the validity of the executed quitclaim.
In a subsequent motion for reconsideration, the CA modified its ruling on July 23, 2010 by declaring that Mahilum was entitled to full back wages and separation pay, and that the quitclaim was void for lack of any real consideration (since the amount received constituted merely his legally due earnings).
The petitioners (PSWRI and Lua) then filed a petition for certiorari under Rule 65 challenging the CA’s decisions, even though the proper course of appeal was by a petition for review under Rule 45 and the petition for certiorari was filed beyond the reglementary period.

Whether the petitioners’ resort to a petition for certiorari under Rule 65 was valid given that an appeal under Rule 45 was available within a prescribed period.
Whether the filing of the petition beyond the 15-day (or extended 30-day) reglementary period rendered the remedy improper despite the substantive issues raised.

Whether Mahilum’s conduct during the inauguration constituted serious misconduct, willful disobedience, or breach of trust sufficient to justify his dismissal.
Whether the allegations concerning loss of trust and confidence justified terminating a managerial employee who, as a regular employee, was afforded security of tenure.

Whether the Release, Waiver, and Quitclaim executed by Mahilum barred his claim for illegal dismissal.
Whether the quitclaim was validly executed given that it only acknowledged benefits that he was already legally entitled to and whether any inherent coercion or economic necessity vitiated its validity.

Whether the inclusion of a 0.25% commission on cash on delivery sales and a 0.25% commission on new accounts was warranted as part of back wages, given the nature of commission as a profit-sharing incentive rather than a fixed benefit.
Whether the award of moral and exemplary damages was supported by evidence of bad faith, fraud, or oppressive conduct in his dismissal.