Atlanta Industries, Inc. V. Sebolino

ATLANTA INDUSTRIES, INC. V.
SEBOLINO
G.R. No. 187320
January 26, 2011
For resolution is the petition for review on certiorari assailing the decision and the
resolution of the Court of Appeals.
FACTS:
Complainants Aprilito R. Sebolino, et al., filed several complaints for illegal dismissal,
regularization, underpayment, nonpayment of wages and other money claims, as well as claims
for moral and exemplary damages and attorney’s fees against the petitioners Atlanta Industries,
Inc. (Atlanta) and its President and Chief Operating Officer Robert Chan. Atlanta is a domestic
corporation engaged in the manufacture of steel pipes.
The complaints were consolidated and were raffled to Labor Arbiter Daniel Cajilig, but
were later transferred to Labor Arbiter Dominador B. Medroso, Jr.
The complainants alleged that they had attained regular status as they were allowed to work
with Atlanta for more than six (6) months from the start of a purported apprenticeship agreement
between them and the company. They claimed that they were illegally dismissed when the
apprenticeship agreement expired.
In defense, Atlanta and Chan argued that the workers were not entitled to regularization and
to their money claims because they were engaged as apprentices under a government-approved
apprenticeship program. The company offered to hire them as regular employees in the event
vacancies for regular positions occur in the section of the plant where they had trained. They also
claimed that their names did not appear in the list of employees (Master List)prior to their
engagement as apprentices.
The Compulsory Arbitration Rulings
On April 24, 2006, Labor Arbiter Medroso dismissed the complaint with respect to dela
Cruz, Magalang, Zaño and Chiong, but found the termination of service of the remaining nine to
be illegal.Consequently, the arbiter awarded the dismissed workers backwages, wage
differentials, holiday pay and service incentive leave pay amounting to P1,389,044.57 in the
aggregate.
Atlanta appealed to the National Labor Relations Commission (NLRC). In the meantime, or
on October 10, 2006, Ramos, Alegria, Villagomez, Costales and Almoite allegedly entered into a
compromise agreement with Atlanta. The agreement provided that except for Ramos, Atlanta
agreed to pay the workers a specified amount as settlement, and to acknowledge them at the same
time as regular employees.
On December 29, 2006,the NLRC rendered a decision, on appeal, modifying the ruling of
the labor arbiter, as follows: (1) withdrawing the illegal dismissal finding with respect to Sagun,
Mabanag, Sebolino and Pedregoza; (2) affirming the dismissal of the complaints of dela Cruz,
Zaño, Magalang and Chiong; (3) approving the compromise agreement entered into by Costales,
Ramos, Villagomez, Almoite and Alegria, and (4) denying all other claims.
Sebolino, Costales, Almoite and Sagun moved for the reconsideration of the decision, but
the NLRC denied the motion in its March 30, 2007[9] resolution. The four then sought relief
from the CA through a petition for certiorari under Rule 65 of the Rules of Court. They
charged that the NLRC committed grave abuse of discretion in: (1) failing to recognize their
prior employment with Atlanta; (2) declaring the second apprenticeship agreement valid; (3)
holding that the dismissal of Sagun, Mabanag, Sebolino and Melvin Pedregoza is legal; and (4)
upholding the compromise agreement involving Costales, Ramos, Villagomez, Almoite and
Alegria.
The CA Decision
The CA granted the petition.

Atlanta and Chan moved for reconsideration, but the CA denied the motion in a resolution
rendered on March 25, 2009.[15] Hence, the present petition.
The Petition
Atlanta seeks a reversal of the CA decision, contending that the appellate court erred in (1)
concluding that Costales, Almoite, Sebolino and Sagun were employed by Atlanta before they
were engaged as apprentices; (2) ruling that a second apprenticeship agreement is invalid; (3)
declaring that the respondents were illegally dismissed; and (4) disregarding the compromise
agreement executed by Costales and Almoite
The Court’s Ruling
The merits of the case

We find no merit in the petition. The CA committed no reversible error in nullifying
the NLRC decision and in affirming the labor arbiter’s ruling, as it applies to Costales,
Almoite, Sebolino and Sagun. Specifically, the CA correctly ruled that the four were
illegally dismissed because (1) they were already employees when they were required to
undergo apprenticeship and (2) apprenticeship agreements were invalid.
The following considerations support the CA ruling.
First. Based on company operations at the time material to the case, Costales, Almoite,
Sebolino and Sagun were already rendering service to the company as employees before they
were made to undergo apprenticeship. The company itself recognized the respondents’ status
through relevant operational records – in the case of Costales and Almoite, the CPS monthly
report for December 2003 which the NLRC relied upon and, for Sebolino and Sagun, the
production and work schedule for March 7 to 12, 2005 cited by the CA.
Under the CPS monthly report, Atlanta assigned Costales and Almoite to the first shift (7:00
a.m. to 3:00 p.m.) of the Section’s work. The Production and Work Schedules, in addition to the
one noted by the CA, showed that Sebolino and Sagun were scheduled on different shifts vis-à-
vis the production and work of the company’s PE/Spiral Section for the periods July 5-10, 2004;
October 25-31, 2004; November 8-14, 2004; November 16-22, 2004; January 3-9, 2005;January
10-15, 2005; March 7-12, 2005 and March 17-23, 2005.
We stress that the CA correctly recognized the authenticity of
the operational documents, for the failure of Atlanta to raise a challenge against
these documents before the labor arbiter, the NLRC and the CA itself.
The appellate court, thus, found the said documents sufficient to establish the employment of
the respondents before their engagement as apprentices.
Second. The Master List (of employees) that the petitioners heavily rely upon as proof of
their position that the respondents were not Atlanta’s employees, at the time they were engaged as
apprentices, is unreliable and does not inspire belief.
The list, consisting of several pages, is hardly legible. It requires extreme effort to sort out
the names of the employees listed, as well as the other data contained in the list. For this reason
alone, the list deserves little or no consideration. As the respondents also pointed out, the list
itself contradicts a lot of Atlanta’s claims and allegations, thus: it lists only the names of inactive
employees; even the names of those the NLRC found to have been employed by Atlanta, like
Costales and Almoite, and those who even Atlanta claims attained regular status on January 11,
2006, do not appear in the list when it was supposed to account for all employees “as of May 6,
2006.” Despite the “May 6, 2006” cut off date, the list contains no entries of employees who
were hired or who resigned in 2005 and 2006. We note that the list contains the names of
employees from 1999 to 2004.
We cannot fault the CA for ignoring the Master List even if Bernardo, its head office
accountant, swore to its correctness and authenticity. Its substantive unreliability gives it very
minimal probative value. Atlanta would have been better served, in terms of reliable evidence, if
true copies of the payroll (on which the list was based, among others, as Bernardo claimed in her
affidavit) were presented instead.
Third. The fact that Costales, Almoite, Sebolino and Sagun were already rendering service
to the company when they were made to undergo apprenticeship (as established by the evidence)
renders the apprenticeship agreements irrelevant as far as the four are concerned. This reality is
highlighted by the CA finding that the respondents occupied positions such as machine operator,
scaleman and extruder operator – tasks that are usually necessary and desirable in Atlanta’s usual
business or trade as manufacturer of plastic building materials. These tasks and their nature
characterized the four as regular employees under Article 280 of the Labor Code. Thus, when
they were dismissed without just or authorized cause, without notice, and without the opportunity
to be heard, their dismissal was illegal under the law.
Even if we recognize the company’s need to train its employees through apprenticeship, we
can only consider the first apprenticeship agreement for the purpose. With the expiration of the
first agreement and the retention of the employees, Atlanta had, to all intents and purposes,
recognized the completion of their training and their acquisition of a regular employee status. To
foist upon them the second apprenticeship agreement for a second skill which was not even
mentioned in the agreement itself, is a violation of the Labor Code’s implementing rules and is an
act manifestly unfair to the employees, to say the least. This we cannot allow.
Fourth. The compromise agreement allegedly entered into by Costales and Almoite,
together with Ramos, Villagomez and Alegria, purportedly in settlement of the case before the
NLRC, is not binding on Costales and Almoite because they did not sign it. The company itself
admitted that while Costales and Almoite were initially intended to be a part of the agreement, it
did not pursue their inclusion “due to their regularization as early as January 11, 2006.”
WHEREFORE, premises considered, we hereby DENY the petition for lack of merit.
The assailed decision and resolution of the Court of Appeals are AFFIRMED. Costs against
the petitioner Atlanta Industries, Inc.

Atlanta Industries, Inc. V. Sebolino

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ATLANTA INDUSTRIES, INC. V.

G.R. No. 187320

January 26, 2011

The CA granted the petition.

The merits of the case

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