SECOND DIVISION

INTERCONTINENTAL G.R. No. 152843

BROADCASTING CORPORATION,

Petitioner,

Present:

PUNO, J., Chairperson,

SANDOVAL-GUTIERREZ,
-versus- CORONA,

AZCUNA and

GARCIA, JJ.

REYNALDO BENEDICTO, deceased, substituted by his surviving spouse LOURDES V.

BENEDICTO, and children, namely: REYNALDO V. BENEDICTO, SHIRLEY V.
BENEDICTO-TAN, EDGAR V. BENEDICTO and LILIBETH V. BENEDICTO-DE LA
VICTORIA,*

Respondents. Promulgated:

July 20, 2006

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

* The present petition impleaded the National Labor Relations Commission as respondent.
However, under Rule 45, Section 4 of the 1997 Rules of Civil Procedure, the petition
may be filed without impleading the lower courts and judges thereof as petitioners or
respondents. Hence, the Court deleted it from the title.
DECISION

CORONA, J.:

This is a petition for review on certiorari1[1] of the October 18,

2001 decision2[2] and March 18, 2002 resolution3[3] of the Court of

Appeals (CA) in CA-G.R. SP No. 53413 which in turn affirmed the

March 5, 1999 decision4[4] and June 10, 1999 resolution5[5] of the

National Labor Relations Commission (NLRC) in NLRC NCR CA

Case No. 017886-99.

1[1] Under Rule 45 of the Rules of Court.

2[2] Penned by Associate Justice Perlita J. Tria Tirona and concurred in by Associate Justices
Eloy R. Bello, Jr. and Amelita G. Tolentino of the Special Eighth Division of the Court of
Appeals; rollo, pp. 50-61.

3[3] Id., pp. 64-66.

4[4] Id., pp. 151-155.

5[5] Id., pp. 156-162.

 Petitioner alleged that Intercontinental Broadcasting

Corporation is a government-owned and controlled corporation.6[6]

It is engaged in the business of mass media communications

including, among others, the operation of television Channel 13

(IBC 13).7[7]

In 1993, Reynaldo Benedicto was appointed by Ceferino

Basilio, the general manager8[8] then of petitioner, as marketing

manager with a monthly compensation of P20,000 plus 1%

commission from collections of all advertising contracts

consummated.9[9]

6[6] Id., p. 13.

7[7] Id.

8[8] Id., p. 594.

9[9] Labor arbiters Decision, id., pp. 118 and 490.

 In a letter dated October 11, 1994 signed by Tomas Gomez III,

at that time the president of petitioner, Benedicto was terminated

from his position.10[10]

On December 3, 1996, Benedicto filed a complaint with the

NLRC for illegal dismissal and damages. He alleged that after his

appointment, he was able to increase the televiewing, listening and

audience ratings of petitioner which resulted in its improved

competitive financial strength.11[11] Specifically, in 1994, he

claimed that he successfully initiated, pursued and consummated

an advertising contract with VTV Corporation for a period of five

years involving the amount of P600 million.12[12] However, on

October 11, 1994, he was terminated from his position without just

or authorized cause.

10[10] Id., p. 513. According to petitioner, respondent was terminated on grounds of

incompetence and conflict of interest that resulted to opportunity losses in the amount of
P9 million more or less; id., p. 42.

11[11] Respondents Position Paper filed before the labor arbiter; id., pp. 225-226.

12[12] Id.
 Labor arbiter Jovencio LL. Mayor, Jr.,13[13] in a decision

dated August 17, 1998, ruled in favor of Benedicto finding that he

was indeed illegally dismissed. Consequently, Mayor: (1) ordered his

reinstatement with full backwages from the time of his dismissal up

to his actual reinstatement (amounting to P920,000 at the time of

the promulgation of the decision); (2) directed petitioner to pay his

1% commission on the contract with VTV Corporation (P645,000),

attorneys fees in the amount of 10% of the total award (P156,500)

and (3) dismissed the claim for moral and exemplary

damages.14[14]

Finding the award excessive, petitioner, on October 15, 1998,

filed with the NLRC its memorandum on appeal with motion to re-

compute the award on which the appeal bond was to be

based.15[15] This motion was not acted upon,16[16] hence, on

December 10, 1998, petitioner proceeded to file the appeal bond

13[13] Id., p. 122.

14[14] Id., pp. 121-122.

15[15] Id., p. 18.

16[16] See rollo, pp. 58 and 290.

based on the amounts17[17] awarded in the judgment appealed

from.18[18]

In a decision promulgated on March 5, 1999, the NLRC

dismissed the appeal and ruled that petitioner failed to perfect its

appeal since it did not file the appeal bond within the reglementary

period. The CA affirmed the NLRCs decision.

Thus this petition with application for preliminary injunction and/or temporary restraining order
alleging the following assignment of errors:

I. WITH DUE RESPECT, THE [CA] ERRED IN AFFIRMING THE

ASSAILED DECISION/RESOLUTION OF THE [NLRC] ON MERE
TECHNICALITY, FAILING TO RECOGNIZE THAT PETITIONER
HAS IN FACT PERFECTED ITS APPEAL UNDER EXISTING LAW
AND JURISPRUDENCE[;]

II. WITH DUE RESPECT, THE [CA] ERRED IN AFFIRMING IN

TOTO THE ASSAILED RESOLUTION/DECISION DEPRIVING
PETITIONER OF ITS RIGHT TO APPEAL, BY IGNORING THE
MERITS OF THE MOTION TO RECOMPUTE AWARD TO
REDUCE BOND AND ITS SIGNIFICANCE IN RELATION TO THE
PERFECTION OF THE APPEAL[;]

17[17] Totaling P1,565,000; id., p. 145.

18[18] Id.
 III. WITH DUE RESPECT, THE [CA] ERRED IN NOT PASSING
UPON THE SUBSTANTIVE MERITS OF THE CASE, SPECIALLY
ON THE VALIDITY OF THE REINSTATEMENT OF [BENEDICTO]
AT AGE SEVENTY TWO (72), CONTRARY TO LAW AND
JURISPRUDENCE, AND THE GRANT OF BACKWAGES
BEYOND [THE] AGE FOR COMPULSORY RETIREMENT AT 65[;]

IV. WITH DUE RESPECT, THE [CA] ERRED IN AFFIRMING IN

TOTO THE ASSAILED RESOLUTION/DECISION THAT GRANTS
5-YEAR AUTOMATIC INCREASE OF AWARD [SUCH] AS FROM
P1.565M TO 2.711M WITHOUT SETTING [BENEDICTO]S
MOTION TO RECOMPUTE AWARD FOR HEARING AND
WITHOUT DUE NOTICE THEREOF DEPRIVING THE
PETITIONER OF ITS PROPERTY WITHOUT DUE PROCESS[;]

V. THE [CA] ERRED IN IGNORING THE ISSUE OF JURISDICTION

RAISED BY PETITIONER.19[19]

On June 26, 2002, this Court issued a temporary restraining order enjoining Benedicto and the
NLRC from implementing the decision of labor arbiter Mayor.20[20]

During the pendency of the case, on November 6, 2002, Benedicto passed away.21[21] He was
substituted by his surviving spouse Lourdes V. Benedicto and their four children.22[22]

After this petition was given due course, Atty. Rodolfo B. Barriga, who claimed to have been
hired by Benedicto as collaborating counsel, filed a motion dated December 17, 2002 praying to
be reinstated as counsel of record of respondents.23[23] The Court, in a resolution dated March

19[19] Id., pp. 19-20.

20[20] Id., p. 241.

21[21] Id., p. 359.

22[22] Id., p. 366. Their children executed a Special Power of Attorney naming their mother as
their attorney-in-fact.

23[23] Id., p. 376. In this motion, Atty. Barriga represented Benedictos alleged heir, Michael Ira
V. Benedicto, who prayed that he be allowed to substitute for his deceased father. In a
26, 2003, denied the motion since any attorney-client relationship between him and Benedicto, if
it indeed existed, was terminated by the latters death. Thereafter, Atty. Barriga filed a motion to
determine attorneys fees and notice and statement of charging lien for attorneys fees dated May
5, 2003 praying, among others, that we determine and approve his attorneys fees and approve the
notice of his charging lien.24[24]

Now the resolution of the issues.

Petitioner raises the issue of jurisdiction without, however, explaining properly the basis of its
objections.25[25] Such half-hearted and belated attempt to argue the NLRCs alleged lack of
jurisdiction cannot possibly be taken seriously at this late stage of the proceedings.

The NLRC and the CA dismissed petitioners appeal. Both held that petitioner failed to perfect its
appeal. Petitioner had ten calendar days from its receipt of the labor arbiters decision on October
5, 1998 to appeal. While it filed its memorandum on appeal with motion to re-compute award on
October 15, 1998, the appeal bond was posted after the appeal period.

Under the second paragraph of Article 223 of the Labor Code, when a judgment involving
monetary award is appealed by the employer, the appeal is perfected only upon the posting of a
cash or surety bond issued by a reputable bonding company duly accredited by the NLRC in an
amount equivalent to the monetary award in the judgment. This assures the workers that if they
finally prevail in the case, the monetary award will be given to them on dismissal of the
employers appeal.26[26] It is also meant to discourage employers from using the appeal to
delay or evade payment of their obligations to the employees.27[27]

resolution dated February 3, 2003, we denied this motion for substitution on the ground
that there is no conclusive proof that movant is indeed an heir of Benedicto; id., p. 409.

24[24] Id., p. 633.

25[25] He merely stated that as a consultant, the NLRC has no jurisdiction and instead the civil
court has jurisdiction over the case; id., pp. 40-42. Moreover, petitioner contradicted
itself when it also stated that [respondent] was not [its] consultant[a]ny relationship he
claims is not with [petitioner] but with Basilio personally; id., p. 17.

26[26] Casimiro v. Stern Real Estate Inc. Rembrandt Hotel, G.R. No. 162233, 10 March 2006,
citing Coral Point Development Corporation v. NLRC, 383 Phil. 456, 463-464 (2000).

27[27] Id.
Nevertheless, such amount of the bond may be reduced by the NLRC in meritorious cases, on
motion of the appellant.28[28] Indeed, an unreasonable and excessive amount of bond is
oppressive and unjust, and has the effect of depriving a party of his right to appeal.29[29]

The provision of Article 223 of the Labor Code requiring the posting of a bond for the perfection
of an appeal of a monetary award must be given liberal interpretation in line with the desired
objective of resolving controversies on the merits.30[30] If only to achieve substantial justice,
strict observance of the reglementary periods may be relaxed if warranted.31[31] However, this
liberal interpretation must be justified by substantial compliance with the rule. As we declared in
Buenaobra v. Lim King Guan:32[32]

It is true that the perfection of an appeal in the manner and within the period prescribed by law is
not only mandatory but jurisdictional, and failure to perfect an appeal has the effect of making
the judgment final and executory. However, technicality should not be allowed to stand in the
way of equitably and completely resolving the rights and obligations of the parties. We have
allowed appeals from the decisions of the labor arbiter to the NLRC, even if filed beyond the
reglementary period, in the interest of justice.33[33]

28[28] Section 6, Rule VI of the New Rules of Procedure of the NLRC.

29[29] Supra at note 26, citing Nueva Ecija I Electric Cooperative, Inc. v. NLRC, 380 Phil. 44, 56 (2000).

30[30] Buenaobra v. Lim King Guan, G.R. No. 150147, 20 January 2004, 420 SCRA 359, 364,
citing Star Angel Handicraft v. National Labor Relations Commission, G.R. No. 108914,
20 September 1994, 236 SCRA 580, 585. See also Postigo v. Philippine Tuberculosis
Society, Inc., G.R. No. 155146, 24 January 2006.

31[31] Id.

32[32] Id.

33[33] Id., citing Philippine-Singapore Ports Corporation v. National Labor Relations Commission, G.R. No. 67035,
29 January 1993, 218 SCRA 77.
In this case, petitioner posted the bond when the NLRC did not act on its motion for re-
computation of the award. There was thus substantial compliance that justified a liberal
application of the requirement on the timely filing of the appeal bond. Moreover, petitioner
presented a meritorious ground in questioning the computation of the backwages, as we shall
discuss below.

We now proceed to the merits of the case.

The labor arbiter found that Benedicto was an employee (the marketing manager) of
petitioner.34[34] He also determined that there was no just or authorized cause for Benedictos
termination. Neither did petitioner comply with the two-notice requirement for valid termination
under the law. He therefore concluded that Benedicto was illegally dismissed.35[35]

These factual findings of the NLRC, confirmed by the CA, are binding on us since they are
supported by substantial evidence. Petitioner, aside from merely stating that Benedictos
appointment was unauthorized,36[36] did not extensively deal with the issue of whether
Benedicto was in fact its employee. Besides, it is estopped from denying such fact considering its
admission that its former President, Tomas Gomez III, wrote him a letter of termination on
October 11, 1994.37[37] Petitioner, furthermore, never contested the finding of illegal
dismissal. Accordingly, there are no strong reasons for us to again delve into the facts.

34[34] Rollo, p. 118.

35[35] Id., pp. 118-119.

36[36] Id., pp. 16-17.

37[37] Id., pp. 42 and 513. The letter read:

October 11, 1994

Mr. Reynaldo Benedicto

-Present-

Dear Rey :
Instead, the bulk of petitioners arguments focused on the labor arbiters order of reinstatement
and award of backwages. The issue of reinstatement was mooted by Benedictos death in 2002.

As for the award of backwages, petitioner insists that the award should be limited to what
Benedicto was entitled to as of the compulsory retirement age of 65 years. When the labor arbiter
promulgated his decision (wherein he awarded the amount of P920,000 as backwages),
Benedicto was already 68 years old. In an order dated August 10, 1999, he further increased the
backwages by P180,000.38[38]

This does not come easy for me. My task as President of a corporation in crisis has been
rendered most difficult.

I would have wanted for you to resign, instead, but you leave me no other room.

Management no longer has confidence in your capacity and competence to perform as

Marketing, Sales & Programming Manager.

Effective immediately, you are hereby relieved and separated from the employ of this Company.
Please see the General Manager for the arrangements of your departure.

God be with you and good luck.

Sincerely yours,

(signed)

Tomas Gomez III

President.

38[38] Id., p. 195.

We agree with petitioner that Benedicto was entitled to backwages only up to the time he
reached 65 years old, the compulsory retirement age under the law.39[39] When Benedicto
was illegally dismissed on October 11, 1994, he was already 64 years old. He turned 65 years old
on December 1, 199440[40] at which age he was deemed to have retired. Since backwages are
granted on grounds of equity for earnings lost by an employee due to his illegal
dismissal,41[41] Benedicto was entitled to backwages only for the period he could have
worked had he not been illegally dismissed, i.e. from October 11, 1994 to December 1,
1994.42[42]

Petitioner also questions the award by the labor arbiter of Benedictos 1% commission on the
blocktime sale agreement with VTV Corporation in the amount of P645,000.43[43] The arbiter
found that the agreement was initiated by and consummated through Benedictos efforts and that
he was entitled to the commission.44[44] This is another factual matter that is binding on us.

39[39] Art. 287 of the Labor Code, as amended by Republic Act No. 7641 (which took effect on January 7, 1993)
provides:

Art. 287. Retirement. Any employee may be retired upon reaching the retirement age
established in the collective bargaining agreement or other applicable employment contract.

xxx xxx xxx

In the absence of a retirement plan or agreement providing for retirement benefits of employees in
the establishment, an employee upon reaching the age of sixty (60) years or more, but not beyond sixty five
(65) years which is hereby declared the compulsory retirement age, who has served at least five (5)
years in the said establishment, may retire and shall be entitled to retirement pay equivalent to at least one
half () month salary for every year of service, a fraction of at least six (6) months being considered as one
whole year.

xxx xxx xxx. (Emphasis ours)

40[40] Rollo, p. 100.

41[41] Espejo v. National Labor Relations Commission, 325 Phil. 753 (1996), citing Torillo v.
Leogardo, Jr., G.R. No. 77205, 27 May 1991, 197 SCRA 471, 477.

42[42] Respondent did not claim retirement benefits.

43[43] As of November 1996; rollo, p. 120. In the Order of the Labor Arbiter dated August 10,
1999, an additional commission in the amount of P720,000 was awarded; id., p. 195.

44[44] Id., p. 120.

However, it is unclear how the labor arbiter arrived at the amount adjudged. We therefore rule
that in computing the amount of the commission Benedicto was entitled to, the following should
be considered:

First, because Benedicto was entitled to backwages only from October 11 to December 1,
1994 when he turned 65 years old, petitioner should pay his commission only for this
period.

Second, by nature, commissions are given to employees only if the employer receives
income.45[45] Employees, as a reward, receive a percentage of the earnings of the
employer, which they, through their efforts, helped produce.46[46] Commissions are
also given in the form of incentives or encouragement so that employees will be inspired
to put a little more industry into their tasks. Commissions can also be considered as direct
remunerations for services rendered.47[47] All these different concepts of commissions
are incongruent with the claim that an employee can continue to receive them indefinitely
after reaching his mandatory retirement age.

Benedictos right to the commissions was coterminous with his employment with
petitioner48[48] and this ended when he reached the compulsory retirement age.

Lastly, the stipulation49[49] providing for commissions (which did not specify the
period of entitlement) would be too burdensome if interpreted to mean that Benedicto had

45[45] Manila Central Line Corp. v. Manila Central Line Free Workers, 353 Phil. 133, 144
(1998), quoting the Solicitor General with approval.

46[46] Id.

47[47] Iran v. National Labor Relations Commission, 352 Phil. 261, 270 (1998).

48[48] See analogous case Sobrepea., Jr. v. Court of Appeals, G.R. No. 111148, 10 October
1997, 280 SCRA 476.

49[49] In a memorandum dated September 12, 1993, the compensation package of respondent
included sales commission of 0.1% on NET of the monthly gross sales not below P8M;
rollo, p. 451. In another memorandum dated November 3, 1993, it was stated this way:
 a right to it even after his employment with petitioner. Doubts in contracts should be
settled in favor of the greatest reciprocity of interests.50[50] A lopsided and open-
minded construction could not have been the parties contemplation. Had that been their
intent, then they should have spelled it out in no uncertain terms.

The labor arbiter should therefore re-compute the commission Benedicto was entitled to in
accordance with these guidelines.

Petitioner is also liable for 10% of the total amount for attorneys fees since Benedicto and the
present respondents were compelled to litigate and incur expenses to enforce and protect his
rights.51[51]

With respect to Atty. Barrigas motion, we note that this entails a factual determination and
examination of the evidence. Since Atty. Barriga still has to prove his entitlement to the
attorneys fees he is claiming and the amount thereof (if he is so entitled), this may be taken up in
the NLRC which will execute the judgment.52[52]

In summary, this case shall be remanded to the labor arbiter for re-computation of backwages
and commissions to be paid by petitioner to respondent(s) for the period October 11, 1994 to
December 1, 1994 and 10% of the total amount as attorneys fees. The labor arbiter shall also set

one percent (01%) sales commission on net payable upon collection of accounts; id., p.
450.

50[50] Article 1378, New Civil Code. This provision states:

When it is absolutely impossible to settle doubts by the rules established in the preceding
articles, and the doubts refer to incidental circumstances of a gratuitous contract, the least
transmission of rights and interests shall prevail. If the contract is onerous, the doubt
shall be settled in favor of the greatest reciprocity of interest. xxx (emphasis ours)

51[51] Urbanes, Jr. v. Court of Appeals, G.R. No. 138379, 25 November 2004, 444 SCRA 84, 97, citing Paguio v.
Philippine Long Distance Telephone Co., Inc., 441 Phil. 679 (2002).

52[52] Cadalin v. POEAs Administrator, G.R. No. 104776, 5 December 1994, 238 SCRA 721,
770-771.
for further hearing Atty. Barrigas motion to determine his attorneys fees and thereafter to fix the
amount thereof if he is so entitled.

WHEREFORE, the assailed decision dated October 18, 2001

and resolution dated March 18, 2002 of the Court of Appeals in CA-

G.R. SP No. 53413 are hereby REVERSED and SET ASIDE.

Petitioner is ORDERED to pay the deceased respondents

backwages and commissions to his heirs from the time he was

illegally dismissed on October 11, 1994 up to the time he reached

compulsory retirement age on December 1, 1994. Likewise,

petitioner is ORDERED to pay attorneys fees equivalent to 10% of

the total monetary award (backwages plus commissions). For this

purpose, the case is hereby ordered REMANDED to the labor

arbiter for the re-computation of the amounts due.

 The labor arbiter is also DIRECTED to set for further hearing

Atty. Rodolfo B. Barrigas motion to determine his attorneys fees and

thereafter to fix the amount thereof if due to him.

Our temporary restraining order issued on June 26, 2002 is

hereby LIFTED.

Costs against petitioner.

SO ORDERED.

RENATO C. CORONA

Associate Justice

WE CONCUR:
 REYNATO S. PUNO

Associate Justice

Chairperson

ANGELINA SANDOVAL-GUTIERREZ ADOLFO S. AZCUNA

Associate Justice Associate Justice

CANCIO C. GARCIA

Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision had been

reached in consultation before the case was assigned to the writer
of the opinion of the Courts Division.
REYNATO S. PUNO

Associate Justice

Chairperson, Second Division

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution and the

Division Chairpersons Attestation, I certify that the conclusions in
the above decision had been reached in consultation before the case
was assigned to the writer of the opinion of the Courts Division.

ARTEMIO V. PANGANIBAN

Chief Justice