Labor Relations, Arbues

Magsino Labor Relations Digests, Arbues 2019
G.R. No. L-22008 November 3, 1924 Whether said Act has been adopted in the reasonable and lawful exercise of
PEOPLE v JULIO POMAR the police power of the state.
Facts: Held: No.

Prosecuting attorney of the City of Manila presented a complaint in the Sir William Blackstone defines the police power as "the due regulation and
Court of First Instance, accusing the defendant of a violation of section 13 in domestic order of the kingdom, whereby the inhabitants of a state, like members of a
connection with section 15 of Act No. 3071. The accused was the manager and well-governed family, are bound to conform their general behavior to the rules of
person in charge of La Flor de la Isabela, Employee Macaria Fajardo was pregnant propriety, good neighborhood, and good manners, and to be decent, industrious, and
and granted vacation leave (VL). However, accused refused to pay to Fajardo the inoffensive in their respective stations."
sum P80, to which she was entitled as her regular wages corresponding to 30 days
before and 30 days after her delivery. The defendant answered and admitted at the Mr. Jeremy Bentham, distributed into eight distinct branches: (1) prevention
trial all of the allegations contained in the complaint, and contended that the of offenses; (2) prevention of calamities; (3) prevention of endemic diseased; (4)
provisions of Act No. 3071 were unconstitutional and void. police of charity; (5) police of interior communications; (6) police of public
amusements; (7) police for recent intelligence; (8) police for registration."
Section 13 of Act No. 3071 is as follows:
Justice Cooley says: "The police power is the power vested in the
Every person, firm or corporation owning or managing a factory, shop or place of legislature by the constitution to make, ordain, and establish all manner of
labor of any description shall be obliged to grant to any woman employed by it as wholesome and reasonable laws, statutes, and ordinances, either with penalties or
laborer who may be pregnant, thirty days vacation with pay before and another thirty without, not repugnant to the constitution, as they shall judge to be for the good and
days after confinement: Provided, That the employer shall not discharge such welfare of the commonwealth, and of the subject of the same.
laborer without just cause, under the penalty of being required to pay to her wages
equivalent to the total of two months counted from the day of her discharge.
It has been said that the particular statute before us is required in the interest
Section 15 of the same Act is as follows: of social justice for whose end freedom of contract may lawfully be subjected to
restraint. The liberty of the individual to do as he pleases, even in innocent matters,
Any person, firm or corporation violating any of the provisions of this Act shall be is not absolute. That liberty must frequently yield to the common good, and the line
punished by a fine of not less than fifty pesos nor more than two hundred and fifty, beyond which the power of interference may not be pressed is neither definite nor
or by imprisonment for not less than ten days nor more than six months, or both, in unalterable, may be made to move, within limits not well defined, with changing
the discretion of the court. needs and circumstances.
In the case of firms or corporations, the presidents, directors or managers thereof or, The right of a person to sell his labor upon such terms as he deems proper
in their default, the persons acting in their stead, shall be criminally responsible for is, in its essence, the same as the right of the purchaser of labor to prescribe the
each violation of the provisions of this Act. conditions upon which he will accept such labor from the person offering to sell. In
all such particulars the employer and the employee have equality of right, and any
Said section 13 was enacted in the exercise of its police power, with the
legislation that disturbs that equality is an arbitrary interference with the liberty of
praiseworthy purpose of safeguarding the health of pregnant women laborers in
contract, which no government can legally justify in a free land, under a constitution
"factory, shop or place of labor of any description," and of insuring to them, to a
which provides that no person shall be deprived of his liberty without due process of
certain extent, reasonable support for one month before and one month after their
law.
delivery.
The state, when providing by legislation for the protection of the public
Issue:
health, the public morals, or the public safety, is subject to and is controlled by the
paramount authority of the constitution of the state, and will not be permitted to
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violate rights secured or guaranteed by that instrument or interfere with the execution Does a minimum wage law for women violate the Due Process Clause of
of the powers and rights guaranteed to the people under their law — the constitution. the Fifth Amendment, as applied to the states by the Fourteenth Amendment?
The police power of the state is a growing and expanding power. As Held: No.
civilization develops and public conscience becomes awakened, the police power
may be extended, as has been demonstrated in the growth of public sentiment with The establishment of minimum wages for women was constitutional.
reference to the manufacture and sale of intoxicating liquors. But that power cannot Echoing Muller v. Oregon (1908), the majority ruled that the state may use its police
grow faster than the fundamental law of the state, nor transcend or violate the power to restrict the individual freedom to contract. The decision overruled Atkins
express inhibition of the people's law — the constitution. If the people desire to have and marked the Court's departure from the expansive view of the freedom to
the police power extended and applied to conditions and things prohibited by the contract. The decision is generally regarded as having ended the Lochner era, a
organic law, they must first amend that law. period in American legal history in which the Supreme Court tended to invalidate
legislation aimed at regulating business.
It will also be noted from an examination of said section 13, that it takes no
account of contracts for the employment of women by the day nor by the piece. The While Justice Hughes wrote the opinion, the stark doctrinal shift resulted
law is equally applicable to each case. It will hardly be contended that the person, from Justice Owen Josephus Roberts changing his perspective on this issue.
firm or corporation owning or managing a factory, shop or place of labor, who According to Hughes, President Franklin Roosevelt's reelection in 1936 and the
employs women by the day or by the piece, could be compelled under the law to pay impressive achievements of the New Deal caused Roberts to abandon his affiliation
for sixty days during which no services were rendered. with the Court's conservative justices.
It has been decided in a long line of decisions of the US SC that the right to
contract about one's affairs is a part of the liberty of the individual, protected by the
"due process of law" clause of the constitution.
For all of the foregoing reasons, we are fully persuaded, under the facts and
the law, that the provisions of section 13, of Act No. 3071 of the Philippine
Legislature, are unconstitutional and void, in that they violate and are contrary to the G.R. No. L-21484 November 29, 1969
provisions of the first paragraph of section 3 of the Act of Congress of the US. THE AGRICULTURAL CREDIT and COOPERATIVE FINANCING
ADMINISTRATION (ACCFA) v ACCFA SUPERVISORS' ASSOCIATION
WEST COAST HOTEL CO. v PARRISH 300 US 379 (1937) Facts:

The Unions started protesting against alleged violations and non-
Facts: implementation of a CBA which was originally agreed upon to be effective a full
Under Washington state law, the Industrial Welfare Committee and year beginning July 1, 1961. On October 25, 1962 until November 26, 1962, the
Supervisor of Women in Industry set a minimum wage of $14.50 for each work Unions were on a strike. On October 30, 1962 the Unions filed a complaint with the
week of 48 hours. Elsie Parrish, an employee of the West Coast Hotel Company, Court of Industrial Relations (CIR) against the ACCFA for having allegedly
received an amount less than this wage. Parrish brought a suit to recover the committed acts of unfair labor practice, namely: violation of the CBA in order to
difference between the wages paid to her and the minimum wage fixed by state law. discourage the members of the Unions in the exercise of their right to self-
In ruling for the hotel, the lower court relied on Adkins v. Children's Hospital organization, discrimination against said members in the matter of promotions, and
(1923), in which the Court struck down a minimum wage law for working women. refusal to bargain. On March 25, 1963, CIR ruled in favor of the Union. MR denied
(G.R. No. L-21484).
Issue:
2
ACCFA was renamed as Agricultural Credit Administration (ACA). On The implementation of the land reform program of the government
March 17, 1964 the ACCFA Supervisors' Association and the ACCFA Workers' according to Republic Act No. 3844 is most certainly a governmental, not a
Association filed a petition for certification election with the CIR praying that they proprietary, function; and for that purpose Executive Order No. 75 has placed the
be certified as the exclusive bargaining agents for the supervisors and rank-and-file ACA under the Land Reform Project Administration together with the other member
employees, respectively, in the ACA. ACA denied that the Unions represented the agencies, the personnel complement of all of which are placed in one single pool and
majority of the employees, respectively, in the ACA. It further alleged that the made available for assignment from one agency to another, subject only to Civil
petition was premature, that the ACA was not the proper party to be notified and to Service laws, rules and regulations, position classification and wage structures.
answer the petition, and that the employees and supervisors could not lawfully
become members of the Unions, nor be represented by them. However, in a joint The considerations set forth above militate quite strongly against the
manifestation of the Unions dated May 7, 1964, with the conformity of the ACA recognition of collective bargaining powers in the respondent Unions within the
Administrator and of the Agrarian Counsel in his capacity as such and as counsel for context of Republic Act No. 875, and hence against the grant of their basic petition
the National Land Reform Council, it was agreed "that the union petitioners in this for certification election as proper bargaining units. The ACA is a government office
case represent the majority of the employees in their respective bargaining units" and or agency engaged in governmental, not proprietary functions. Under this traditional
that only the legal issues raised would be submitted for the resolution of the trial classification, such constituent functions are exercised by the State as attributes of
Court. The trial Court in its order dated May 21, 1964 certified "the ACCFA sovereignty, and not merely to promote the welfare, progress and prosperity of the
Workers' Association and the ACCFA Supervisors' Association as the sole and people — these letter functions being ministrant he exercise of which is optional on
exclusive bargaining representatives of the rank-and-file employees and supervisors, the part of the government.
respectively, of the Agricultural Credit Administration." Said order was affirmed by
the CIR en banc in its resolution dated August 24, 1964 (G.R. No. L-23605). The growing complexities of modern society, however, have rendered this
traditional classification of the functions of government quite unrealistic, not to say
Issue: obsolete. The areas which used to be left to private enterprise and initiative and
WON CIR has jurisdiction to entertain the petition of the Unions for which the government was called upon to enter optionally, and only "because it was
certification election on the ground that it (ACA) is engaged in governmental better equipped to administer for the public welfare than is any private individual or
functions. group of individuals," continue to lose their well-defined boundaries and to be
absorbed within activities that the government must undertake in its sovereign
Held: No. capacity if it is to meet the increasing social challenges of the times. There can be no
Under Section 3 of the Agricultural Land Reform Code the ACA was dispute as to the fact that the land reform program contemplated in the said Code is
established, among other governmental agencies, to extend credit and similar beyond the capabilities of any private enterprise to translate into reality.
assistance to agriculture, in pursuance of the policy enunciated in Section 2.
Respondent Unions are not entitled to the certification election sought in the
Section 110 provides that "the administrative machinery of the ACCFA Court below. Such certification is admittedly for purposes of bargaining in behalf of
shall be reorganized to enable it to align its activities with the requirements and the employees with respect to terms and conditions of employment, including the
objective of this Code and shall be known as the Agricultural Credit right to strike as a coercive economic weapon, as in fact the said unions did strike in
Administration." Under Section 112 the sum of P150M was appropriated out of 1962 against the ACCFA (G.R. No. L-21824). This is contrary to Section 11 of
national funds to finance the additional credit functions of the ACA as a result of the Republic Act No. 875
land reform program laid down in the Code. The power to audit the operations of
farmers' cooperatives and otherwise inquire into their affairs, as given by Section
113, is in the nature of the visitorial power of the sovereign, which only a
government agency specially delegated to do so by the Congress may legally Separate opinion of Justice Fernando
exercise.
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Governmental functions are classified into constituent and ministrant. "The
former are those which constitute the very bonds of society and are compulsory in
nature; the latter are those that are undertaken only by way of advancing the general
interests of society, and are merely optional.
President Wilson enumerates the constituent functions as follows: '(1) The

keeping of order and providing for the protection of persons and property from G.R. No. 103524 April 15, 1992
violence and robbery. (2) The fixing of the legal relations between man and wife and CESAR BENGZON v HON. FRANKLIN N. DRILON
between parents and children. (3) The regulation of the holding, transmission, and
interchange of property, and the determination of its liabilities for debt or for crime. Facts:
(4) The determination of contract rights between individuals. (5) The definition and RA 910 as amended was enacted to provide the retirement pensions of
punishment of crime. (6) The administration of justice in civil cases. (7) The Justices of the SC and of the CA and its automatic readjustment. Similar benefits
determination of the political duties, privileges, and relations of citizens. (8) were given to members of ConCom and AFP under RA 1568 and PD 578
Dealings of the state with foreign powers: the preservation of the state from external respectively. However, PD 644 repealed RA 1797 thus disallowing the automatic
danger or encroachment and the advancement of its international interests.' readjustment of pensions of retired justices and AFP. PD 1638 however allowed the
automatic readjustment of pensions only for AFP.
The ministrant functions were then enumerated, followed by a statement of
the basis that would justify engaging in such activities. Thus: "The most important of Thus, the Congress approved a bill for the reenactment of the repealed RA
the ministrant functions are: public works, public education, public charity, health 1797 to allow automatic adjustment of pensions of justices. President Aquino,
and safety regulations, and regulations of trade and industry. The principles however vetoed HB. 16297 on July 11, 1990 on the for violating the policy on
determining whether or not a government shall exercise certain of these optional standardization of compensation as articulated in RA 6758 (Compensation and
functions are: (1) that a government should do for the public welfare those things Position Classification Act of 1989). She further said that "the Government should
which private capital would not naturally undertake and (2) that a government should not grant distinct privileges to select group of officials whose retirement benefits
do these things which by its very nature it is better equipped to administer for the under existing laws already enjoy preferential treatment over those of the vast
public welfare than is any private individual or group of individuals." majority of our civil service servants."
It is thus apparent that until the administration of President Roosevelt, the Prior to the filing of the petition, the SC issued a resolution granting the
laissez-faire principle resulted in the contraction of the sphere where governmental administrative matter filed by another retired justice for the adjustment of their
entry was permissible. The object was to protect property even if thereby the needs pension. Pursuant to the above resolution, Congress included in the General
of the general public would be left unsatisfied. Appropriations Bill for Fiscal Year 1992 certain appropriations for the Judiciary
intended for the payment of the adjusted pension rates due the retired Justices of SC
The laissez-faire principle never found full acceptance in the Philippines. and CA. Such was again vetoed by Cory for nullifying her ealier veto.
Moreover, to erase any doubts, the ConCon saw to it that our fundamental law
embodies a policy of the responsibility thrust on government to cope with social and Issue:
economic problems and an earnest and sincere commitment to the promotion of the
general welfare through state action. It would thus follow that the force of any legal Held:
objection to regulatory measures adversely affecting property rights or to statutes The veto power is not absolute. The Executive must veto a bill in its entirety
organizing public corporations that may engage in competition with private or not at all. However, when it comes to appropriation, revenue or tariff bills, the
enterprise has been blunted. Unless there be a clear showing of any invasion of rights Constitution has wisely provided the "item veto power" to avoid inexpedient riders
guaranteed by the Constitution, their validity is a foregone conclusion. being attached to an indispensable appropriation or revenue measure. The power to
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disapprove any item or items in an appropriate bill does not grant the authority to
veto a part of an item and to approve the remaining portion of the same item. SOCIAL JUSTICE. — Social justice is "neither communism, nor despotism, nor
It turns out, however, that P.D. 644 never became valid law. If P.D. 644 atomism, nor anarchy," but the humanization of laws and the equalization of social
was not law, it follows that RA 1797 was not repealed and continues to be effective and economic forces by the State so that justice in its rational and objectively secular
up to the present. In the same way that it was enforced from 1951 to 1975, so should conception may at least be approximated. Social justice means the promotion of the
it be enforced today. HB 16297 was superfluous as it tried to restore benefits which welfare of all the people, the adoption by the Government of measures calculated to
were never taken away validly. The veto of HB 16297 in 1991 did not also produce insure economic stability of all the competent elements of society, through the
any effect. Both were based on erroneous and non-existent premises. From the maintenance of a proper economic and social equilibrium in the interrelations of the
foregoing discussion, it can be seen that when the President vetoed certain provisions members of the community, constitutionally, through the adoption of measures
of the 1992 GAA, she was actually vetoing RA 1797 which, of course, is beyond her legally justifiable, or extra-constitutionally, through the exercise of powers
power to accomplish. underlying the existence of all governments on the time-honored principle of salus
populi est suprema lex. Social justice, therefore, must be founded on the recognition
In the case at bar, the veto of these specific provisions in the GAA is of the necessity of interdependence among divers and diverse units of a society and
tantamount to dictating to the Judiciary how its funds should be utilized, which is of the protection that should be equally and evenly extended to all groups as a
clearly repugnant to fiscal autonomy. The freedom of the CJ to make adjustments in combined force in our social and economic life, consistent with the fundamental and
the utilization of the funds appropriated for the expenditures of the judiciary, paramount objective of the state of promoting the health, comfort, and quiet of all
including the use of any savings from any particular item to cover deficits or persons, and of bringing about "the greatest good to the greatest number."
shortages in other items of the Judiciary is withheld. Fiscal autonomy means freedom
from outside control.
It can not be denied that the retired Justices have a vested right to the
accrued pensions due them pursuant to RA 1797. The right to a public pension is of
statutory origin. Any argument which seeks to remove special privileges given by
law to former Justices of this Court and the ground that there should be no "grant of
distinct privileges" or "preferential treatment" to retired Justices ignores these
provisions of the Constitution and, in effect, asks that these Constitutional provisions
on special protections for the Judiciary be repealed. G.R. No. 119243 April 17, 1997 BREW MASTER v NATIONAL
FEDERATION OF LABOR UNIONS (NAFLU)
The SolGen was wrong when it said that giving public funds to retirees who
are now living a private life is tantamount to robbery. All that the retirees ask is to be Facts:
given the benefits granted by law. To characterize them as engaging in "robbery" is Complainant was employed by respondent as route helper. From 19 April
intemperate, abrasive, and disrespectful more so because the argument is unfounded. 1993 up to 19 May 1993, complainant went on absent without permission (AWOP).
On 20 May 1993, respondent thru Mr. Rodolfo Valentin, sent a Memo to
For as long as these retired Justices are entitled under laws which continue complainant asking the latter why he should not be disciplined. Complainant
to be effective, the government can not deprive them of their vested right to the justified that his wife left and he was forced to take his children back to Samar.
payment of their pensions. Respondent issued a Notice of Termination stating that the complainant was aware
of the company Rules and Regulations that absence without permission for 6
consecutive working days is considered abandonment of work.
G.R. No. 47800. December 2, 1940 The LA dismissed the complaint for lack of merit, citing the principle of
MAXIMO CALALANG, Petitioner, v. A. D. WILLIAMS managerial control, which recognizes the employer's prerogative to prescribe
5
reasonable rules and regulations to govern the conduct of his employees. The representative labor organization, the Association of Trade Unions and its local
principle allows the imposition of disciplinary measures which are necessary for the president and its board of directors. Private respondents also contended that the 30-
efficiency of both the employer and the employees. NLRC modified the LA decision day notices of termination were duly sent to petitioners.
and held that complainant's dismissal was invalid. Complainant appellant's prolonged
absences, although unauthorized, may not amount to gross neglect or abandonment LA ruled in favor of petitioners. NLRC reversed. Petitioners filed for R65
of work to warrant outright termination of employment. with the SC. They argued that their dismissal or retrenchment did not comply with
the requirements of Art. 283 of the Labor Code.
Petitioner filed this special civil action contending that the NLRC
committed grave abuse of discretion. It argued that the NLRC failed to consider the Issue:
rationale behind petitioner's Rules and Regulation and that it was deprived of its WON there is a valid retrenchment.
prerogative to enforce them.
Held: No.
Issue: Under Art. 283 therefore retrenchment may be valid only when the
WON NLRC committed gradilej. following requisites are met: (a) it is to prevent losses; (b) written notices were
served on the workers and DOLE at least one (1) month before the effective date of
Held: No. retrenchment; and, (c) separation pay is paid to the affected workers.
A scrutiny of the facts discloses that complainant's absence was precipitated
by grave family problem as his wife unexpectedly deserted him and abandoned the The closure of a business establishment is a ground for the termination of
family. Petitioner's finding that complainant was guilty of abandonment is the services of an employee unless the closing is for the purpose of circumventing
misplaced. Abandonment as a just and valid ground for dismissal requires the pertinent provisions of the Labor Code. But while business reverses can be a just
deliberate, unjustified refusal of the employee to resume his employment. Two cause for terminating employees, they must be sufficiently proved by the employer.
elements must then be satisfied: (1) the failure to report for work or absence without
valid or justifiable reason; and (2) a clear intention to sever the employer-employee There is no question that an employer may reduce its work force to prevent
relation. The second element is the more determinative factor and must be evinced losses. However, these losses must be serious, actual and real. Otherwise, this ground
by overt acts. Likewise, the burden of proof is on the employer to show the for termination of employment would be susceptible to abuse by scheming
employee's clear and deliberate intent to discontinue his employment without any employers who might be merely feigning losses in their business ventures in order to
intention of returning, mere absence is not sufficient. While we do not decide here ease out employees.
the validity of petitioner's Rules and Regulations on continuous, unauthorized
absences, what is plain is that it was wielded with undue haste resulting in a As regards the requirement of notices of termination to the employees, it is
deprivation of due process, thus not allowing for a determination of just cause or undisputed that the Notice of Retrenchment was submitted to the DOLE on 12
abandonment. September 1990. However, the employees were terminated either on September 25
or 30, 1990. The one-month notice of retrenchment filed with the DOLE and served
G.R. No. 110017 January 2, 1997 RODOLFO FUENTES v NLRC on the workers before the intended date thereof is mandatory. Private respondents
failed to comply with this requisite.
Facts:
On 31 October 1990 petitioners filed with the DOLE office in Cagayan de
Oro City a complaint for illegal dismissal with prayer for reinstatement, against
private respondent Agusan Plantation, and/or Chang Chee Kong. In their answer
respondents denied the allegations of petitioners and contended that upon receipt of
instructions from the head office in Singapore to implement retrenchment, private
respondentsconducted grievance conferences or meetings with petitioners G.R. No. 112630 September 5, 1997 CORAZON JAMER v NLRC
6
disposition of cases involving termination of employment since it affects one's
Facts: source or means of livelihood, it should not be overlooked that the benefits accorded
Corazon Jamer and Christina Amortizado were employees of Isetan until to labor do not include compelling an employer to retain the services of an employee
they were terminated on August 31, 1990 on the alleged ground of dishonesty in who has been shown to be a gross liability to the employer. The intent is to balance
their work as Store Cashiers. Complainants function as Store Cashiers is to reconcile the scale of justice; to put the two parties on relatively equal positions. There may be
the cash sales with the tally sheets to determine shortages or coverage. cases where the circumstances warrant favoring labor over the interests of
management but never should the scale be so tilted if the result is an injustice to the
On July 16, 1990, complainants discovered a shortage of P15k. They did employer, Justicia remini regarda est (Justice is to be denied to none).
not immediately report the shortage to management hoping to find the cause of the
shortage but to no avail they failed to reconcile the same. Hence, they had no other As regards to the second requisite, the law requires that the employer must
alternative but to report the same to the management on July 17, 1990. Respondent furnish the worker sought to be dismissed with 2 written notices before termination
Isetan conducted an administrative investigation. Finding the explanation of the may be validly effected: first, a notice apprising the employee of the particular acts
complainants to be unsatisfactory, respondent dismissed the complainants from the or omission for which his dismissal is sought and, second, a subsequent notice
service on August 31, 1990. informing the employee of the decision to dismiss him. In accordance with this
requirement, petitioners were given the required notices, on August 2 and then on
LA held that there was illegal dismissal. NLRC reversed. R65 with SC August 23. The Court finds that petitioners were accorded due process before they
without filing MR with the NLRC. were dismissed on August 3. It is a well-established rule that the essence of due
process is simply an opportunity to be heard, or as applied to administrative
Issue: proceedings, an opportunity to explain one's side or an opportunity to seek a
WON there was illegal dismissal. reconsideration of the action or ruling complained of.
Held: No. Marcopper Mining Corporation vs. NLRC
Substantial evidence exists to warrant the finding that petitioners were G.R. No. 103525. March 29, 1996
validly dismissed for just cause and after observance of due process.
Facts:
Under the Labor Code, as amended, the requirements for the lawful A CBA was entered into between Marcopper and NA-MAWU-MIF, a labor
dismissal of an employee by his employer are two-fold: the substantive and the federation to which the Marcopper Employees Union (the exclusive bargaining agent
procedural. Not only must the dismissal be for a valid or authorized cause as of all rank-and-file workers of petitioner) is affiliated, to be effective 1 May 1984
provided by law (Articles 282, 283 and 284, of the Labor Code, as amended), but the until 30 April 1987.
rudimentary requirements of due process, basic of which are the opportunity to be
heard and to defend himself, must be observed before an employee may be The CBA provides 2 wage increases. The 1st wage increase was with no
dismissed. problem. Private respondent, however, assailed the manner in which the second
wage increase was effected. It argued that the COLA should first be integrated into
With respect to the first requisite, Article 282 of the Labor Code is the basic wage before the 5% wage increase is computed. Consequently, the union
controlling. The failure of petitioners to report the aforequoted shortages and filed a complaint for underpayment of wages before the Regional Arbitration.
overages to management as soon as they arose resulted in the breach of the fiduciary
trust reposed in them by respondent company, thereby causing the latter to lose Sec. 1 Art. V of the CBA provides: “It is expressly understood that this
confidence in them. This warrants their dismissal. wage increase shall be exclusive of increase in the minimum wage and/or mandatory
living allowance that may be promulgated during the life of this Agreement.”
Social justice ceases to be an effective instrument for the "equalization of Accordingly, applying the aforequoted provision in the case at bench, petitioner
the social and economic forces" by the State when it is used to shield wrongdoing. concludes that it was clearly not the intention of the parties to include the COLA in
While it is true that compassion and human consideration should guide the
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computing the CBA/MOA mandated increase since the MOA was entered into a year Sometime in December 1987, two supervisors almost simultaneously
before E.O. No. 178 was enacted even though their effectivity dates coincide. received two different requests for overseas calls bound for different Middle East
countries and both callers reported the same calling number (98-68-16). Investigation
Issue: shows that the subject number was temporarily disconnected on June 10, 1987, and
WON EO 178 should supersede the CBA. permanently on September 24, 1987. It also showed that 439 overseas calls were
made through the same number between May and November 1987.
Held:
The principle that the CBA is the law between the contracting parties stands Private respondent Lettie Corpuz was employed as traffic operator at the
strong and true. However, the present controversy involves not merely an Manila International Traffic Division (MITD) by PLDT. On July 26, 1988, Corpuz
interpretation of CBA provisions. More importantly, it requires a determination of was asked to explain her alleged infraction, that is, facilitating 34 calls using the
the effect of an executive order on the terms and the conditions of the CBA. disconnected number. Instead of tendering the required explanation, respondent
requested a formal investigation to allow her to confront the witnesses and rebut the
Petitioner’s arguments eventually lose steam in the light of the fact that proofs that may be brought against her. On grounds of serious misconduct and
compliance with the law is mandatory and beyond contractual stipulation by and breach of trust, the Legal Department recommended her dismissal. In a letter dated
between the parties; consequently, whether or not petitioner intended the basic wage June 16, 1989, respondent was terminated from employment effective the following
to include the COLA becomes immaterial. There is evidently nothing to construe and day.
interpret because the law is clear and unambiguous. Unfortunately for petitioner, said
law, by some uncanny coincidence, retroactively took effect on the same date the LA ordered her reinstatement. NLRC affirmed. PetCert was filed by PLDT
CBA increase became effective. Therefore, there cannot be any doubt that the to SC.
computation of the CBA increase on the basis of the integrated wage does not
constitute a violation of the CBA. Issue:
WON there was a valid dismissal.
While the terms and conditions of the CBA constitute the law between the
parties, it is not, however, an ordinary contract to which is applied the principles of Held: No.
law governing ordinary contracts. A CBA, as a labor contract within the The right of an employer to freely discharge his employees is subject to
contemplation of Article 1700 of the Civil Code of the Philippines which governs the regulation by the State, basically through the exercise of its police power. This is so
relations between labor and capital, is not merely contractual in nature but impressed because the preservation of the lives of citizens is a basic duty of the State, an
with public interest, thus, it must yield to the common good. As such, it must be obligation more vital than the preservation of corporate profits.
construed liberally rather than narrowly and technically, and the courts must place a
practical and realistic construction upon it, giving due consideration to the context in Petitioner insists that respondent was guilty of defrauding them when she
which it is negotiated and purpose which it is intended to serve. serviced 56 of the 439 calls coming from telephone number 98-68-16 and received
numerous requests for overseas calls virtually from the same calling number, which
could not have been a mere coincidence but most likely was a pre-arranged
undertaking in connivance with certain subscribers. The records show, however, that
the subject phone calls were neither unusual nor coincidental as other operators
shared similar experiences.
*Substantial Evidence Rule; The Supreme Court will not sanction a dismissal
G.R. No. 111933. July 23, 1997 PLDT v NLRC premised on mere conjectures and suspicions.· This Court will not sanction a
dismissal premised on mere conjectures and suspicions. To be a valid ground for
Facts: respondent’s dismissal, the evidence must be substantial and not arbitrary and must
8
be founded on clearly established facts sufficient to warrant his separation from In any event, apart from the State’s police power, the Constitution itself
work. mandates government to extend the fullest protection to our overseas workers. The
basic constitutional statement on labor, embodied in Section 18 of Article II of the
*Security of Tenure; In carrying out and interpreting the Labor Code’s provisions Constitution provides: Sec. 18. The State affirms labor as a primary social economic
and its implementing regulations, the workingman’s welfare should be the primordial force. It shall protect the rights of workers and promote their welfare. More
and paramount consideration; The constitutional right of workers to security of emphatically, the social justice provision on labor of the 1987 Constitution in its first
tenure should not be denied on mere speculation of any unclear and nebulous basis. paragraph states: The State shall afford full protection to labor, local and overseas,
organized and unorganized and promote full employment and equality of
employment opportunities for all. Obviously, protection to labor does not indicate
JMM Promotion v CA G.R. No. 120095. August 5, 1996 promotion of employment alone. Under the welfare and social justice provisions of
the Constitution, the promotion of full employment, while desirable, cannot take a
Facts: backseat to the government’s constitutional duty to provide mechanisms for the
Due to the death of Maricris Sioson in 1991, Cory banned the deployment protection of our workforce, local or overseas.
of performing artists to Japan and other destinations. This was relaxed however with
the introduction of the Entertainment Industry Advisory Council which later A profession, trade or calling is a property right within the meaning of our
proposed a plan to POEA to screen and train performing artists seeking to go abroad. constitutional guarantees. One cannot be deprived of the right to work and the right
In pursuant to the proposal POEA and the secretary of DOLE sought a 4 step plan to to make a living because these rights are property rights, the arbitrary and
realize the plan which included an Artist’s Record Book which a performing artist unwarranted deprivation of which normally constitutes an actionable wrong.
must acquire prior to being deployed abroad. The Federation of Talent Managers of Nevertheless, no right is absolute, and the proper regulation of a profession, calling,
the Philippines assailed the validity of the said regulation as it violated the right to business or trade has always been upheld as a legitimate subject of a valid exercise of
travel, abridge existing contracts and rights and deprives artists of their individual the police power by the state particularly when their conduct affects either the
rights. JMM intervened to bolster the cause of FETMOP. The lower court ruled in execution of legitimate governmental functions, the preservation of the State, the
favor of EIAC. public health and welfare and public morals. According to the maxim, sic utere tuo
ut alienum non laedas, it must of course be within the legitimate range of legislative
Issue: action to define the mode and manner in which every one may so use his own
WON the issuances were a valid exercise of police power. property so as not to pose injury to himself or others.
Held: Yes. Locally, the Professional Regulation Commission has begun to require
The latin maxim salus populi est suprema lex embodies the character of the previously licensed doctors and other professionals to furnish documentary proof
entire spectrum of public laws aimed at promoting the general welfare of the people that they had either re-trained or had undertaken continuing education courses as a
under the State’s police power. As an inherent attribute of sovereignty which requirement for renewal of their licenses. It is not claimed that these requirements
virtually extends to all public needs, this least limitable of governmental powers pose an unwarranted deprivation of a property right under the due process clause. So
grants a wide panoply of instruments through which the state, as parens patriae gives long as professionals and other workers meet reasonable regulatory standards no
effect to a host of its regulatory powers. Thus, police power concerns government such deprivation exists.
enactments which precisely interfere with personal liberty or property in order to
promote the general welfare or the common good. As the assailed Department Order The equal protection clause of the Constitution does not forbid
enjoys a presumed validity, it follows that the burden rests upon petitioners to classification for so long as such classification is based on real and substantial
demonstrate that the said order, particularly, its ARB requirement, does not enhance differences having a reasonable relation to the subject of the particular legislation.
the public welfare or was exercised arbitrarily or unreasonably. the equal protection clause of the Constitution does not forbid classification for so
long as such classification is based on real and substantial differences having a
reasonable relation to the subject of the particular legislation.
9
Philippine Association of Service Exporters, Inc. vs. Drilon The same, however, cannot be said of our male workers. In the first place,
No. L-81958. June 30,1988. there is no evidence that, except perhaps for isolated instances, our men abroad have
been afflicted with an identical predicament. The petitioner has proffered no
Facts: argument that the Government should act similarly with respect to male workers.
Phil association of Service Exporters, Inc., is engaged principally in the The Court, of course, is not impressing some male chauvinistic notion that men are
recruitment of Filipino workers, male and female of overseas employment. It superior to women. What the Court is saying is that it was largely a matter of
challenges the constitutional validity of Dept. Order No. 1 (1998) of DOLE entitled evidence (that women domestic workers are being ill-treated abroad in massive
“Guidelines Governing the Temporary Suspension of Deployment of Filipino instances) and not upon some fanciful or arbitrary yardstick that the Government
Domestic and Household Workers.” It claims that such order is a discrimination acted in this case. It is evidence capable indeed of unquestionable demonstration and
against males and females. The Order does not apply to all Filipino workers but only evidence this Court accepts. The Court cannot, however, say the same thing as far as
to domestic helpers and females with similar skills, and that it is in violation of the men are concerned. There is simply no evidence to justify such an inference. Suffice
right to travel, it also being an invalid exercise of the lawmaking power. Further, it to state, then, that insofar as classification are concerned, this Court is content that
PASEI invokes Sec 3 of Art 13 of the Constitution, providing for worker distinctions are borne by the evidence. Discrimination in this case is justified.
participation in policy and decision-making processes affecting their rights and
benefits as may be provided by law. Thereafter the Solicitor General on behalf of Protection to labor" does not signify the promotion of einployment alone.
DOLE submitting to the validity of the challenged guidelines involving the police What concerns the Constitution more paramountly is that such an employment be
power of the State and informed the court that the respondent have lifted the above all, decent, just, and humane. It is bad enough that the country has to send its
deployment ban in some states where there exists bilateral agreement with the sons and daughters to strange lands because it cannot satisfy their employment needs
Philippines and existing mechanism providing for sufficient safeguards to ensure the at home. Under these circumstances, the Government is duty-bound to insure that
welfare and protection of the Filipino workers. our toiling expatriates have adequate protection, personally and economically, while
away from home. In this case, the Government has evidence, an evidence the
Issue: petitioner cannot seriously dispuce, of the lack or inadequacy of auch protection, and
WON DO 1-1998 is a valid exercise of police power. as part of its duty, it has precisely ordered an indefinite ban on deployment.
Held: Yes. ·The petitioner's reliance on the Constitutional guaranty of worker

Police power has been defined as the "state authority to enact legislation participation "in policy and decisionmaking processes affecting their rights and
that may interfere with personal liberty or property in order to promote the general benefits" is not well taken. The right granted by this provision, again, must submit to
welfare." As defined, it consists of (1) an imposition of restraint upon liberty or the demands and necessities of the State's power of regulation. The nonimpairment
property, (2) in order to foster the common good. clause of the Constitution, invoked by the
petitioner, must yield to the loftier purposes targetted by the Government. Freedom
The petitioner has shown no satisfactory reason why the contested of contract and enterprise, like all other freedoms, is not free from restrictions, more
measure should be nullified. There is no question that Department Order No. 1 so in this jurisdiction, where laissez faire has never been fully accepted as a
applies only to "female contract workers," but it does not thereby make an undue controlling economic-way of life.
discrimination between the sexes. It is well-settled that "equality before the law"
under the Constitution does not import a perfect identity of rights among all men and
women. It admits of classifications, provided that (1) such classiflcations rest on
substantial distinctions; (2) they are germane to the purposes of the law; (3) they are G.R. No. 95449. August 18, 1997 PHILIPPINE-SINGAPORE
not confined to existing conditions; and (4) they apply equally to all members of the TRANSPORT SERVICES (PSTS) v NLRC
same class. The Court is satisfied that the classification made – the preference for
female workers - rests on substantial distinctions. Facts:
10
Petitioner PSTS, a manning agency, hired private respondent Estrada as
master of the vessel Sea Carrier I for its foreign principal, Intra-Oil in the high seas Estrada was dismissed without just cause. Bale, inutusan kasi siya na
of Bombay, India. On January 21, 1988 or barely two months following his maghila ng barko pero ayaw niya kasi luma na yung lubid na panghila. Nireport niya
employment, Estrada was that he would be relieved from his employment and be na luma na yung lubid pero walang dumating na bago.
repatriated. Upon his arrival, he went to PSTS to ask about his dismissal from
employment and to claim for his unpaid salary and the sum corresponding to his Before an employee can be dismissed, the Labor Code requires the
plane fare which was deducted from his salary. Petitioner PSTS informed him that employer to furnish the employee a written notice containing a statement of the
his service was terminated due to his incompetence. It also denied his claim for the causes for termination and to afford said employee ample opportunity to be heard. If
sum of money. the employer decides to terminate the services of the employee, the employer must
notify the worker in writing of the decision to dismiss him, stating clearly the reasons
Estrada filed in POEA Adjudication Department a complaint against PSTS therefor. Petitioner seeks to justify the absence of the said notice and hearing by
and Intra-Oil for illegal dismissal. POEA granted the petition. NLRC affirmed invoking a provision in the contract of employment which authorizes the company to
holding that respondent’s repatriation was not due to his incompetence but due to his terminate employment without notice. Such contractual provision is inapplicable
refusal to tow another barge belonging to the charterer and which refusal had been here. The said provision applies only when the employee is liable for serious
shown to be justified by the private respondent. misconduct, neglect of duty or violation of company rules and regulations.
Apparently, private respondent Estrada was not found guilty of any of these offenses.
Issue: WON the management exercised its prerogative properly.
Held:No.
The power to dismiss an employee is a recognized prerogative that is
inherent in the employer’s right to freely manage and regulate his business. An
employer cannot rationally be expected to retain the employment of a person whose
lack respect to his employer. The right of the company to dismiss an employee is a
measure of self-protection. Such right, however, is subject to regulation by the State,
basically in the exercise of its paramount police power. Thus, the dismissal of
employees must be made within the parameters of the law and pursuant to the basic Chu v NLRC and VICTORIAS MILLING G.R. No. 106107. June 2, 1994
tenets of equity, justice and fairplay. It must not be done arbitrarily and without just
cause. Facts:
Petitioner retired from service but under a Special Contract of Employment,
Article 279 of the Labor Code provides that the security of tenure has been petitioner was employed as Head of the Warehousing Department. Private
construed to mean as that the employer shall not terminate the services of an respondent issued 2 Memos both providing for a rotation of the personnel and other
employee except for a just cause or when authorized by the Code. The two facets of organizational changes. Pursuant to the memos, petitioner was transferred to the
this legal provision are: (a) the legality of the act of dismissal; and (b) the legality in Sugar Sales Department. Petitioner protested his transfer and requested a
the manner of dismissal. The illegality of the act of dismissal constitutes discharge reconsideration thereof, which was denied.
without just cause, while illegality in the manner of dismissal is dismissal without
due process. If an employee is dismissed without just cause, he is entitled to Petitioner filed a complaint for illegal dismissal, contending that he was
reinstatement with backwages up to the time of his actual reinstatement, if the constructively dismissed from his employment. LA dismissed the complaint holding
contract of employment is not for a definite period; or to the payment of his salaries that petitioner’s transfer was without change in rank or salary; (3) petitioner’s
corresponding to the unexpired portion of the employment contract, if the contract is designation in either department was the same; (4) the personnel rotation was
for the definite period. If the dismissal is for a just cause but it was made without due pursuant to organizational changes done in the valid exercise of management
process, the employee is entitled to the payment of an indemnity. prerogatives; (5) there was no bad faith in the transfer and (6) petitioner failed to
11
show that he was prejudiced by the changes or transferred to a demeaning or afternoon workers shall report from Sunday to Thursday and the night shift workers
humiliating position. NLRC affirmed. shall work from Thursday to Sunday. On November 6, 1972, the night shift
employees filed a demand to maintain the old working schedule from Monday thru
Issue: WON there was a valid exercise of management prerogative. Friday. In manifestation of their dissention to the new work schedule, the 3
respondents Duro, Torio, and Javillonar did not report for work. Their absence
Held: Yes. caused their suspension for 14 days. LA ordered their reinstatement but secretary of
·An owner of a business enterprise is given considerable leeway in labor reversed.
managing his business because it is deemed important to society as a whole that he
should succeed. Our law, therefore, recognizes certain rights as inherent in the Issue: WON there was valid dismissal due to insubordination.
management of business enterprises. These rights are collectively called
management prerogatives or acts by which one directing a business is able to control Held: Yes.
the variables thereof so as to enhance the chances of making a profit. Together, they Management retained the prerogative, whenever exigencies of the service so
may be taken as the freedom to administer the affairs of a business enterprise such require, to change the working hours of its employees. And as long such prerogative
that the costs of running it would be below the expected earnings or receipts. In is exercised in good faith for the advancement of the employerÊs interest and not for
short, the elbow room in the quest for profits. the purpose of defeating or circumventing the rights of the employees under special
laws or under valid agreements, this Court will uphold such exercise. Even as the
It is the employer’s prerogative, based on its assessment and perception of law is solicitous of the welfare of employees, it must also protect the right of an
its employees’ qualifications to move them around in the various areas of its employer to exercise what are clearly management prerogatives. The free will of
business operations in order to ascertain where they will function with maximum management to conduct its own business affairs to achieve its purpose cannot be
benefit to the company. An employee’s right to security of tenure does not give him denied.
such a vested right in his position as would deprive the company of its prerogative to
change his assignment or transfer him where he will be most useful. When his Further, the incident complained of took place sometime in 1972, so there is
transfer is not unreasonable, nor inconvenient, nor prejudicial to him, and it does not no violation of the 1973 Constitution to speak of because the guarantee of security of
involve a demotion in rank or a diminution of his salaries, benefits, and other tenure embodied under Section 9, Article II may not be given a retroactive effect. It
privileges, the employee may not complain that it amounts to a constructive is the basic norm that provisions of the fundamental law should be given prospective
dismissal. application only, unless legislative intent for its retroactive application is so
provided.
Nothing in the Special Contract of Employment invoked by petitioner
wherein private respondent had waived its right to transfer or re-assign petitioner to
any other position in the company. Before such right can be deemed to have been
waived or contracted away, the stipulation to that effect must be clearly stated so as
to leave no room to doubt the intentions of the parties. The mere specification in the
employment contract of the position to be held by the employee is not such
stipulation.
Union Carbide Labor Union vs. Union Carbide Phils. San Miguel Brewery Sales Force Union (PTGWO) vs. Ople
G.R. No. 41314 November 13, 1992 G.R. No. 53515. February 8, 1989
Facts: Facts:
The Company used to operate morning, afternoon, and night shifts. For 3 years, a collective bargaining agreement was being implemented by
Pursuant to the CBA, a new work schedule was implemented where the morning and San Miguel Corporation Sales Force Union (PTGWO), and San Miguel Corporation.
12
Section 1, of Article IV of which provided “Employees within the appropriate respondent. By the order of the CIR, and amicable settlement was reached. The
bargaining unit shall be entitled to a basic monthly compensation plus commission General Manager thereafter met and rectified many of the demands of the Union but
based on their respective sales.” Then, the company introduced a marketing scheme the dispute continued. Respondent filed a petition with the CIR. It alleged that
known as “Complementary Distribution System”(CDS) whereby its beer products promotions are based on union affiliation and that to further discourage membership
were offered for sale directly to wholesalers through San Miguel’s Sales Offices. The in the GSISSU, the GSIS bargained with a rank and file union in the GSIS on the
union alleged that the new marketing scheme violates Sec 1, Art IV of the CBA terms and conditions of employment of employees who pertain to the certified
because the introduction of the CDS would reduce the take home pay of the supervisory bargaining unit. CIR ordered the GSIS to appoint Dr. Andrea Moral as
salesmen. Acting Assistant Medical Director, replacing the present incumbent, Dr. Orlando
Misa.
Issue: WON the CDS was a valid exercise of management prerogative.
Issue: WON the CIR’s order violated the management prerogative.
Held: Yes.
Public respondent was correct in holding that the CDS is a valid exercise of Held: Yes.
management prerogatives. Except as limited by special laws, an employer is free to The right to select and appoint employees is the prerogative of the
regulate, according to his own discretion and judgment, all aspects of employment, employer, the privilege of management because such right inheres in the conduct and
including hiring, work assignments, working methods, time, place and manner of operation of the business by the employer. Labor may not impose nor demand who is
work, tools to be used, processes to be followed, supervision of workers, working to be appointed or designated by management. This discretion or judgment lodged in
regulations, transfer of employees, work supervision, lay-off of workers and the management may not, therefore, be controlled, interfered with or substituted by the
discipline, dismissal and recall of work. CIR upon petition or representation of the
striking labor union.
So long as a company’s management prerogatives are exercised in good
faith for the advancement of the employer’s interest and not for the purpose of The promotion of Misa was fair and made in good faith. It has not been
defeating or circumventing the rights of the employees under special shown by any credible proof submitted to the Hearing Officer or to the CIR that such
laws or under valid agreements, this Court will uphold them. San Miguel selection was arbitrary. The claim of the respondent Union that the designation of
Corporation’s offer to compensate the members of its sales force who will be Dr. Misa and not Dr. Moral is discriminatory on account of the latter’s being a
adversely affected by the implementation of the CDS, by paying them a so-called member of the Union has not been sufficiently proved for there is nothing in the
back adjustment commission to make up for the commissions they might lose as a Report submitted by the Hearing Officer clearly indicating that the GSIS preferred
result of the CDS, proves the company’s good faith and lack of intention to bust their Dr. Misa instead of Dr. Moral in order to bust the GSISSU or to discourage
union. membership in said union. The Report made no finding if the protagonists belong to
different camps or even slightly that for union considerations, the GSIS favored one
or the other.
In the promotion; of personnel the basic consideration is efficiency in public

service, even to the disappointment of aspirants longer in the service.
GSIS vs. GSIS Supervisors’ Union No. L-39575. August 31, 1978 PT&T vs CA G.R. No. 152057. September 29, 2003
Facts: Facts:
A strike was called and staged by respondent in protest against the Petitioner, after conducting a series of studies regarding the profitability of
discriminatory acts constituting unfair labor practices in matters of promotion, its retail operations, its existing branches and the number of employees, the
among others, committed by the management of the petitioner against the petitioner came up with a Relocation and Restructuring Program Private respondents
13
received separate letters from the petitioner, giving them the option to choose the nature of a gift or reward, which a person has a right to refuse. Hence, the exercise
branch to which they could be transferred. Thereafter, through HRAG Bulletin No. by the private respondents of their right cannot be considered in law as
97-06-16, the private respondents and other petitioner's employees were directed to insubordination, or willful disobedience of a lawful order of the employer. As such,
"relocate" to their new PT&T Branches. The affected employees were directed to there was no valid cause for the respondent’s dismissal.
report to their respective relocation assignments. Moreover, the employees who
would agree to the transfers would be considered promoted. *Promotion
Promotion is the advancement from one position to another with an increase
The private respondents rejected the petitioner's offer. Petitioner, then, sent in duties and responsibilities as authorized by law, and usually accompanied by an
letters to the private respondents requiring them to explain in writing why no increase in salary. The indispensable element for there to be a promotion is that there
disciplinary action should be taken against them for their refusal to be must be an advancement from one position to another or an upward vertical
transferred/relocated. In their respective replies to the petitioner's letters, the private movement of the employee’s rank or position. Any increase in salary should only be
respondents explained that: The transfers imposed by the management would cause considered incidental but never determinative of whether or not a promotion is
enormous difficulties on the individual complainants. For one, their new assignment bestowed upon an employee. This can be likened to the upgrading of salaries of
involves distant places which would require their separation from their respective government employees without necessarily conferring upon them the concomitant
families. Dissatisfied with this explanation, the petitioner considered the private elevation to higher positions.
respondents' refusal as insubordination and willful disobedience to a lawful order;
hence, the private respondents were dismissed from work. They forthwith filed their
respective complaints against the petitioner before the appropriate sub-regional
branches of the NLRC.
In their position paper, private respondents declared that their refusal to

transfer could not possibly give rise to a valid dismissal on the ground of willful
disobedience, as their transfer was prejudicial and inconvenient; thus unreasonable.
The private respondents further opined that since their respective transfers resulted in
their promotion, they had the right to refuse or decline the positions being offered to
them. Resultantly, the refusal to accept the transfers could not have amounted to ELMER M. MENDOZA v RURAL BANK OF LUCBAN
insubordination or willful disobedience to the "lawful orders of the employer." G.R. No. 155421 July 7, 2004
For its part, the company alleged that the private respondents' transfers were Facts:
made in the lawful exercise of its management prerogative and were done in good
faith. The transfers were aimed at decongesting surplus employees and detailing On April 25, 1999, the Board of Directors of the Rural Bank of Lucban,
them to a more demanding branch. Inc., issued Board Resolution Nos. 99-52 and 99-53, “that in line with the policy of
the bank to familiarize bank employees with the various phases of bank operations
Issue: WON the management prerogative was valid. and further strengthen the existing internal control system, all officers and employees
are subject to reshuffle of assignments. Moreover, this resolution does not preclude
Held: No. the transfer of assignment of bank officers and employees from the branch office to
An employee cannot be promoted, even if merely as a result of a transfer, the head office and vice-versa."
without his consent. A transfer that results in promotion or demotion, advancement
or reduction or a transfer that aims to lure the employee away from his permanent Petitioner filed a Complaint before NLRC. Petitioner argued that he had
position cannot be done without the employees’ consent. There is no law that been demoted from appraiser to clerk and not given any work to do, while his table
compels an employee to accept a promotion for the reason that a promotion is in the had been placed near the toilet and eventually removed. He adds that the reshuffling
14
of employees was done in bad faith, because it was designed primarily to force him advancement of the establishment. Petitioner was not singled out; other employees
to resign. were also reassigned without their express consent.
Issue: WON the reshuffling was valid.
Held: Yes.
In the pursuit of its legitimate business interest, management has the
prerogative to transfer or assign employees from one office or area of operation to
another provided there is no demotion in rank or diminution of salary, benefits, and
other privileges; and the action is not motivated by discrimination, made in bad faith,
or effected as a form of punishment or demotion without sufficient cause. This Yuco Chemical Industries, Inc. vs. Ministry of Labor and
privilege is inherent in the right of employers to control and manage their enterprise Employment G.R. No. 75656 May 28, 1990
effectively. The right of employees to security of tenure does not give them vested
rights to their positions to the extent of depriving management of its prerogative to Facts:
change their assignments or to transfer them. Managerial prerogatives, however, are Private respondents George Halili and Amado Magno were employed by
subject to limitations provided by law, CBAs, and general principles of fair play and petitionercompany which is engaged in the manufacture/assembly of ice boxes. They
justice. were assigned to make aluminum handles for the ice boxes. On August 12,1981,
after obtaining a favorable legal opinion from the Tarlac provincial office of MOLE
The managerial prerogative to transfer personnel must be exercised without concerning the legality of moving the production of aluminum handles from Tarlac
grave abuse of discretion, bearing in mind the basic elements of justice and fair play. to Manila, petitioner addressed a memorandum to private respondents directing them
Having the right should not be confused with the manner in which that right is to report for work within one week from
exercised. Thus, it cannot be used as a subterfuge by the employer to rid himself of notice at their new place of work at Sta. Cruz, Manila. The memorandum further
an undesirable worker. In particular, the employer must be able to show that the stated that private respondents would be paid with a salary of P27.00 and an
transfer is not unreasonable, inconvenient or prejudicial to the employee; nor does it additional allowance of P2.00 "to meet the higher cost of living in Manila. A day
involve a demotion in rank or a diminution of his salaries, privileges and other after or on August 13, 1981, instead of complying with the memorandum, private
benefits. Should the employer fail to overcome this burden of proof, the employee’s respondents filed a complaint with the provincial labor office for illegal dismissal.
transfer shall be tantamount to constructive dismissal, which has been defined as a
quitting because continued employment is rendered impossible, unreasonable or Issue: WON the transfer was valid.
unlikely; as an offer involving a demotion in rank and diminution in pay. Likewise,
constructive dismissal exists when an act of clear discrimination, insensibility or Held: The managerial prerogative to transfer personnel must be exercised without
disdain by an employer has become so unbearable to grave abuse of discretion and putting to mind the basic elements of justice and fair
the employee leaving him with no option but to forego with his continued play. Having the right should not be confused with the manner in which that right
employment. must be exercised. Thus it cannot be used as a subterfuge by the employer to rid
himself of an undesirable worker. Nor when the real reason is to penalize an
Petitioner’s transfer was made in pursuit of respondent’s policy to employee for his union activities and thereby defeat his right to self-organization.
familiarize bank employees with the various phases of bank operations and further But the transfer can be upheld when there is no showing that it is unnecessary,
strengthen the existing internal control system of all officers and employees. inconvenient and prejudicial to the displaced
Employees may be transferred based on their qualifications, aptitudes and
competencies to positions in which they can function with maximum benefit to the The reassignment of Halili and Magno to Manila is legally indefensible on
company. There appears no justification for denying an employer the right to transfer several grounds. Firstly, it was grossly inconvenient to private respondents. They are
employees to expand their competence and maximize their full potential for the working students. When they received the transfer memorandum directing their
15
relocation to Manila within seven days from notice, classes had already started. The
move from Tarlac to Manila at such time would mean a disruption of their studies. Issue: WON there was valid dismissal.
Secondly, there appears to be no genuine business urgency that necessitated their
transfer. As well pointed out by private respondents’ counsel, the fabrication of Held: No.
aluminum handles for ice boxes does not require special dexterity. Many workers There are restrictions to guide the employers in the exercise of management
could be contracted right in Manila to perform that particular line of work. prerogatives, particularly the right to discipline or dismiss employees, for both the
Altogether, there is a strong basis for public respondentÊs conclusion that the Constitution and the law guarantee employees’ security of tenure. Thus, employees
controversial transfer was not prompted by legitimate reasons. Petitioner company may be dismissed only in the manner provided by law. The right of the employer
had indeed discriminated against Magno and Halili when the duo was selected for must not be exercised arbitrarily and without just cause. Otherwise, the constitutional
reassignment to Manila. The transfer was timed at the height of union concerted mandate of security of tenure of the workers would be rendered nugatory.
activities in the firm, deliberately calculated to demoralize the other union members.
Under such questionable circumstances, private respondents had a valid reason to But while Clarete may be guilty of violation of company rules, we find the
refuse the Manila reassignment. Public respondent did not err or abuse his discretion penalty of dismissal imposed upon him by respondent Caltex too harsh and
in upholding the employees’ cause. unreasonable. Penalty of dismissal must be commensurate with the act, conduct or
omission imputed to the employee and imposed in connection with the employer’s
disciplinary authority. Even when there exist some rules agreed upon between the
employer and employee on the subject of dismissal the same cannot preclude the
State from inquiring on whether its rigid application would work too harshly on the
employee.
The penalty of dismissal imposed on Clarete is unduly harsh and grossly

disproportionate to the reason for terminating his employment. Clarete has no
Caltex Refinery Employees Association (CREA) v NLRC previous record in his eight years of service; that respondent Caltex did not lose
G.R. No. 102993. July 14, 1995 anything as the bottle of lighter fluid was retrieved on time; and that there was no
showing that Clarete’s retention in the service would work undue prejudice to the
Facts: viability of employer’s operations .
Petitioner Arnelio Clarete and Caltex gave facts. Clarete argued that he G.R. No. 70479 February 27, 1987
found a bottle of lighter fluid in the rubbish pile. He asked the security guard de Villa FIRESTONE TIRE AND RUBBER v CARLOS LARIOSA
posted at the gate to allow him to bring the bottle home. De Villa referred Clarete to
Castillo, the security supervisor. Castillo instructed Clarete to leave the bottle in his Facts:
office. Clarete went home without the bottle. Caltex on the other hand, argued that When Lariosa submitted himself for routine check before going out of the
Clarete refused to allow de Villa to inspect hi bag as it was just filled with work factory, the security guards found 16 wool flannel swabs all belonging to the
clothes. De Villa opened the bag and found the lighter fluid hidden in the sleeves of company. Why he placed the swabs in his personal bag, which is not the usual
his Clarete’s clothes. When asked about the gate pass for the fluid, Clarete said he receptacle for company property, has not been satisfactorily explained. Lariosa was
did not need one as it was for his personal use. terminated for stealing company property and loss of trust. A criminal complaint for
theft was filed against Lariosa. Lariosa filed a complaint for illegal dismissal. LA
In a letter, Caltex asked Clarete why he should not be disciplined. Clarete found the dismissal justified. NLRC reversed.
replied that he had no intention to bring the bottle home without permission.
However, he was thereafter charged with theft. Clarete was acquitted. His services Issue: WON the termination was too severe.
were terminated for serious misconduct and loss of trust and confidence resulting
from having violated a lawful order of the Company. Held: No.
16
A review of the record shows that Lariosa was indubitably involved in the resolve the conflicting issue, Glaxo offered Tecson a separation pay or to be
attempted theft of the flannel swabs. There is no gainsaying that theft committed by transferred from Camarines to Butuan-Surigao-Agusan sales area to which the
an employee constitutes a valid reason for his dismissal by the employer. Although former refused to abide. Aggrieved, Tecson filed a petition to the National
as a rule this Court leans over backwards to help workers and employees continue Conciliation and Mediation Board (NCMB) which affirmed Glaxo’s policy as valid.
with their employment or to mitigate the penalties imposed on them, acts of CA affirmed NCMB’s decision, hence, this petition.
dishonesty in the handling of company property are a different matter.
Issue: May an employer prohibit an employee to marry.
Thus, under Article 283 of the Labor Code, an employer may terminate an
employment for "serious misconduct" or for "fraud or willful breach by the Held: It depends.
employee of the trust reposed in him by his employer or representative."
If the prohibition or restriction pertains to the choice of spouse, rather than
If there is sufficient evidence that an employee has been guilty of a breach the choice to marry at all, there should be an examination of the rationale behind the
of trust or that his employer has ample reasons to distrust him, the labor tribunal constraint. If the restrictions or conditions bear no relevance to any interests that the
cannot justly deny to the employer the authority to dismiss such an employee. employer should be concerned with, then they should not be upheld. Restrictions that
are nothing more than the enforcement of personal biases, such as prohibitions on
If Lariosa, by his own wrong-doing, could no longer be trusted, it would be marrying members of a particular race or ethnic group, may be struck down.
an act of oppression to compel the company to retain him, fully aware that such an
employee could, in the long run, endanger its very viability. If the rationale in question relates to a consideration so vital to the interests
of the employer as to warrant legal protection, it should then be determined whether
The employer's obligation to give his workers just compensation and the means employed by the employer are reasonable enough as to allow a measure of
treatment carries with it the corollary right to expect from the workers adequate balance between these key interests of the employer and the fundamental right of the
work, diligence and good conduct. employee to marry.
DUNCAN ASSOCIATION v GLAXO WELLCOME Glaxo belongs to the highly competitive pharmaceutical industry. Glaxo is
G.R. No. 162994 September 17, 2004 entitled to guard its trade secrets, manufacturing formulas, marketing strategies and
other confidential programs and information from competitors, concomitant to its
Facts: right to protect its own economic interests. It is but reasonable for Glaxo to be
Pedro A. Tecson was hired by respondent Glaxo Wellcome Philippines, Inc. cautious about the social interaction of its employees with those of companies which
as medical representative. As stipulated in the contract signed and agreed by Tecson, it directly competes with. If the employee goes as far as sharing hearth and home
The Glaxo provides that an employee is expected to inform management of any with the employee of the rival company, there is greater cause of concern on the part
existing or future relationship by consanguinity or affinity with co-employees or of Glaxo. The fear may not so much arise from the possibility of willful betrayal by
employees of competing drug companies. If management perceives a conflict of its employees of trade secrets, but from the myriad opportunities in the course of
interest or a potential conflict between such relationship and the employee’s shared lives that one may inadvertently divulge to the spouse confidential
employment with the company, the management and the employee will explore the information that the rival drug company may benefit from. After all, the employer
possibility of a “transfer to another department or preparation for employment has no control over pillow talk. Neither could it be expected that the employee
outside the company after six months. maintain a higher fidelity to the employer than to the spouse.
Subsequently, Tecson entered into a romantic relationship with Bettsy, an Still, these concerns aside, the steps that Glaxo may employ to avoid the
employee of Astra Pharmaceuticals, a competitor of Glaxo. In 1998,Tecson married undue divulgence of its trade secrets should be within reason. If termination is to be
Bettsy, whilst constantly reminded by the District Manager regarding the conflict of considered as an option, it should be only as a final resort. In this case, Glaxo's
interest which his relationship with Bettsy might engender. When Tecson failed to assailed policy does not call for automatic termination, providing as it does a process
17
that allows for all the opportunities for a mutually agreeable solution. Per the Respondent Nestle’s Drug Abuse Policy states that illegal drugs and use of
Employee Handbook, "every effort shall be made, together by management and the regulated drugs beyond the medically prescribed limits are prohibited in the
employee, to arrive at a solution within 6 months, either by transfer to another workplace. Illegal drug use puts at risk the integrity of Nestle operations and the
department in a non-counter checking position, or by career preparation toward safety of our products. It is detrimental to the health, safety and work-performance of
outside employment after Glaxo Wellcome. Employees must be prepared for employees and is harmful to the welfare of families and the surrounding community.
possible resignation within 6 months, if no other solution is feasible." This procedure
is extremely reasonable under the circumstances, and we have no problems in Company personnel policies are guiding principles stated in broad, long-
upholding its validity. range terms that express the philosophy or beliefs of an organizations top authority
regarding personnel matters. They deal with matter affecting efficiency and well-
Glaxo must retain the said policy, and should another employee trek the being of employees and include, among others, the procedure in the administration
same trail as Tecson did, it cannot be foreordained that the Court would similarly of wages, benefits, promotions, transfer and other personnel movements which are
rule for Glaxo and against the said employee. As repeatedly emphasized, it all usually not spelled out in the collective agreement. Considering that the Drug Abuse
depends on the particular circumstances of each case. And ultimately, if dismissal, Policy is a company personnel policy, it is the Voluntary Arbitrators or Panel of
constructive or otherwise, is resorted to, the standards for termination set by the Voluntary Arbitrators, not the RTC, which exercises jurisdiction over this case.
Labor Code must still be complied with.
G.R. No. 127598.January 28, 2002 MERALCO vs Secretary of Labor
Facts:
On March 15, 1999, Atty. Tomacruz and FLAMES entered into a "Contract
G.R. No. 148303. October 17, 2002 UNION OF NESTLE WORKERS for Professional Service," under which FLAMES undertook to pay Atty. Tomacruz
CAGAYAN DE ORO FACTORY (UNWCF) vs. NESTLE PHILPPINES for his legal services.
Facts: FLAMES had already delivered to Atty. Tomacruz the P50k as acceptance
Nestle adopted Policy No. HRM 1.8, otherwise known as the Drug Abuse fee and another P50k representing his contingent fee under their contract. FLAMES
Policy. Pursuant to this policy, the management shall conduct simultaneous drug explained to Atty. Tomacruz that pending efforts to collect from its members, it
tests on all employees from different factories and plants. There was resistance to the could only effect partial payment of his fee due to financial constraints. After the
policy in the Cagayan de Oro factory. Out of 496 employees, only 141 submitted lapse of more than a year with no payments being made, Atty. Tomacruz wrote
themselves to drug testing. On August 20, 1999, the Union of Nestle Workers FLAMES demanding the balance of his stipulated fee under the contract of service,
Cagayan de Oro Factory wrote Nestle challenging the implementation of the policy computed at 15% of the amount which each FLAMES member received from
and branding it as a mere subterfuge to defeat the employees’ constitutional rights. MERALCO or P25,000.00 per member. Atty. Tomacruz received a letter from
Nestle claimed that the policy is in keeping with the governments thrust to eradicate FLAMES, expressing its refusal to make further payments. FLAMES stated that the
the proliferation of drug abuse, explaining that the company has the right: (a) to 15% contingent fee had no actual basis "since no benefit was in fact obtained by the
ensure that its employees are of sound physical and mental health and (b) to members of FLAMES consequent to the filing of the Motion for intervention."
terminate the services of an employee who refuses to undergo the drug test. FLAMES added that the amounts already received by Atty. Tomacruz was
reasonable compensation for his services and was commensurate to what was
Petitioner filed a complaint for injuction. Respondent filed a MoDi alleging actually worked out by him.
that RTC has no jurisdiction since it is a labor dispute. RTC dismissed the complaint.
Issue: WON the employment contract was valid.
Issue: WON the complaint was a labor dispute.
Held: No.
Held: Yes.
18
Generally speaking, where the employment of an attorney is under an
express valid contract fixing the compensation for the attorney, such contract is
conclusive as to the amount of compensation.[8]cralaw A stipulation on a lawyer's
compensation in a written contract for professional services ordinarily controls the G.R. No. 76219 May 27, 1991 GTE DIRECTORIES
amount of fees that the contracting lawyer may be allowed, unless the court finds CORPORATION v HON. AUGUSTO S. SANCHEZ
such stipulated amount unreasonable or unconscionable. The degree of
unconscionability or unreasonableness of a stipulated amount in a contingent fee Facts:
contract, will not however, preclude recovery. It merely justifies the court's fixing a GTE prints directories. Increments were given by the so-called "Grid
reasonable amount for the lawyer's services System," grids within each territory usually numbering five. Each grid was assigned
a fixed closing dated. At such closing date, a salesperson should have achieved a
The contingent fee of P11M is clearly disproportionate to the extent of the certain amount of the revenue target designated for his grid; otherwise, he loses the
services rendered by Atty. Tomacruz, even if we were to take into account the forthcoming grid or forfeits the remaining grids not yet received. The new Sales
character of his intervention and the quality of his work. Thus, it is incumbent upon Evaluation and Production Policy was implemented which was more aggressive than
us to fix a more reasonable sum which, in relation to the prevailing circumstances, the Grid System.
could be deemed as appropriate. In other words, we find here reason to apply the GTE sent memorandum to its sales representatives, requiring submission of
principle of quantum meruit. "individual reports reflecting target revenues as of grid deadlines. No compliance
was made. GTE thereupon suspended its sales representatives. Finally, GTE gave its
"Quantum meruit," meaning "as much as he deserves," is used as a basis for sales representatives an ultimatum. By memorandum individually addressed to its
determining the lawyer's professional fees in the absence of a contract, but sales representatives, GTE required them, for the last time, to submit the required
recoverable by him from his client. Recovery of attorney's fees on the basis of reports GTE terminated the employment of the recalcitrant sales representatives.
quantum meruit is authorized when (1) although there is a contract, the fees
stipulated are found unconscionable or unreasonable by the court; (2) the contract for Issue: WON the termination was valid.
attorney's fees is void due to purely formal defects of execution; (3) counsel, for
justifiable cause, was not able to finish the case to its conclusion; and (4) the lawyer Held: Yes.
and client disregard the contract for attorney's fees. GTE had cause to dismiss the premise sales representatives who had
repeatedly and deliberately refused to comply with its directive for submission of
In fixing a reasonable compensation for services rendered by a lawyer on individual reports on specified matters. The record shows that GTE addressed 6
the basis of quantum meruit, the following factors are considered: (1) the time spent written official communications to said premise sales representatives embodying this
and extent of services rendered; (2) the novelty and difficulty of the questions requirement.
involved; (3) the importance of the subject matter; (4) the skill demanded; (5) the
probability of losing other employment as a result of the acceptance of the proffered The Labor Minister found nothing to suggest that the employer's unilateral
case; (6) the amount involved in the controversy and the benefits resulting to the action of inaugurating a new sales scheme "was designed to discourage union
client; (7) the certainty of compensation; (8) the character of employment; and (9) organization or diminish its influence;" that on the contrary, it was "part of its overall
the professional standing of the lawyer. plan to improve efficiency and economy and at the same time gain profit to the
highest. Except as limited by special laws, an employer is free to regulate, according
to his own discretion and judgment, all aspects of employment, including hiring,
work assignments, working methods, time, place and manner of work, tools to be
used, processes to be followed, supervision of workers, working regulations, transfer
of employees, work supervision, lay-off of workers and the discipline, dismissal and
recall of work.
19
Every business enterprise endeavors to increase its profits. In the process, it date the employee started working. On the other hand, Article 280, defined when an
may adopt or devise means designed towards that goal. So long as a company's employment shall be regular notwithstanding any written agreement to the contrary.
management prerogatives are exercised in good faith for the advancement of the In other words, the graduation of an employee from casual or probationary to regular
employer's interest and not for the purpose of defeating or circumventing the rights does not depend on the arbitrary will of his employer. If there is any group of
of the employees under special laws or under valid agreements, this Court will employees that needs robust protection from the exploitation of employers, it is the
uphold them. casuals and probationaries.
To sanction disregard or disobedience by employees of a rule or order laid

down by management, on the pleaded theory that the rule or order is unreasonable,
illegal, or otherwise irregular for one reason or another, would be disastrous to the
discipline and order that it is in the interest of both the employer and his employees.
G.R. No. 70705 August 21, 1989 MOISES DE LEON v NLRC
G.R. No. 106246 September 1, 1994 CENTRAL NEGROS Facts:

ELECTRIC COOPERATIVE (CENECO) v NLRC Petitioner was employed by respondent company La Tondeña as
maintenance man whose work consisted mainly of painting company building and
Facts: equipment, and other odd jobs relating to maintenance. After having worked for
Private respondents are employees of petitioner, an electric cooperative respondent for more than a year, petitioner requested that he be included in the
company. They have been in service varying from 10 months to 4.5 years. They were payroll of regular employees, to which the former responded by dismissing petitioner
extended permanent appointments only on July 13, 1988, retroactive to June 16, from his employment. Petitioner having been refused reinstatement filed a complaint
1988. Petitioner has a CBA with its employees' union for a duration of 3 years from before the Labor Arbiter. Petitioner asserts that he is a regular employee performing
April 1, 1987 up to March 31, 1990. The CBA provides for a wage increase for all similar functions as of a regular maintenance and was rehired by respondent
permanent. Though they were made permanent in 1988, private respondents company’s labor agency to perform the same tasks. Respondent company meanwhile
demanded payment of the wage increase for the year 1987 as provided by the above claims petitioner was a casual worker hired only to paint a certain building in the
collective bargaining agreement. Petitioner denied their demand. premises and that his work as painter terminated upon completion of the job. The LA
ruled in favor of petitioner but was reversed on appeal by the NLRC tribunal.
Issue: WON the employees were regular employees even prior to 1988.
Issue: WON De Leon was a regular employee.
Held: Yes.
It cannot be denied that private respondents attained the status of regular Held: Yes.
employees even before 1988. Firstly, they perform activities which are necessary or Contrary agreements notwithstanding, an employment is deemed regular
desirable in the usual business of the petitioner as an electric cooperative. Indeed, when the activities performed by the employee are usually necessary or desirable in
their appointments would not have been regularized if their jobs were not the usual business or trade of the employer. Not considered regular are the so-called
indispensable in the daily operation of the petitioner's business. Secondly, they had "project employment" the completion or termination of which is more or less
worked for petitioner for more than 6 months before they were given regular determinable at the time of employment, such as those employed in connection with
appointments. They had been hired on various dates starting from 1984. a particular construction project and seasonal employment which by its nature is only
desirable for a limited period of time. However, any employee who has rendered at
Articles 280 and 281 of our Labor Code, put an end to the practice of least one year of service, whether continuous or intermittent, is deemed regular with
making permanent casuals of our lowly employees by the simple expedient of respect to the activity he performed and while such activity actually exists.
extending to them probationary appointments, ad infinitum. Thus, Article 281,
placed a ceiling on probationary employment, i.e., not to exceed 6 months from the
20
The primary standard of determining a regular employment is the CBA, some members of the bargaining unit formed another union called "Kimberly
reasonable connection between the particular activity performed by the employee in Independent Labor Union for Solidarity, Activism and Nationalism-Organized Labor
relation to the usual business or trade of the employer. The connection can be Association in Line Industries and Agriculture (KILUSAN-OLALIA). KILUSAN-
determined by considering the nature of the work performed and its relation to the OLALIA filed a petition for certification election. KIMBERLY and UKCEU-
scheme of the particular business or trade in its entirety. Also, if the employee has PTGWO did not object to the holding of a certification election but objected to the
been performing the job for at least one year, even if the performance is not inclusion of the so-called contractual workers whose employment with KIMBERLY
continuous or merely intermittent, the law deems the repeated and continuing need was coursed through an independent contractor, Rank Manpower Company
for its performance as sufficient evidence of the necessity if not indispensability of (RANK), as among the qualified voters. During the pre-election conference, 64
that activity to the business. Hence, the employment is also considered regular, but casual workers were challenged by KIMBERLY and UKCEU-PTGWO on the
only with respect to such activity and while such activity exists. ground that they are not employees of KIMBERLY but of RANK. It was agreed by
all the parties that the 64 voters shall be allowed to cast their votes but that their
In the case at bar, the respondent company, which is engaged in the ballots shall be segregated and subject to challenge proceedings.
business of manufacture and distillery of wines and liquors, claims that petitioner
was contracted on a casual basis specifically to paint a certain company building and Issue: WON the 64 employees were regular Kimberly employees.
that its completion rendered petitioner's employment terminated. This may have been
true at the beginning, and had it been shown that petitioner's activity was exclusively Held:
limited to painting that certain building, respondent company's theory of casual Article 280 of the Labor Code provides for two. kinds of regular employees,
employment would have been worthy of consideration. However, during petitioner's namely: (1) those who are engaged to perform activities which are usually necessary
period of employment, the records reveal that the tasks assigned to him included not or desirable in the usual business or trade of the employer; and (2) those who have
only painting of company buildings, equipment and tools but also cleaning and oiling rendered at least one year of service, whether continuous or broken, with respect to
machines, even operating a drilling machine, and other odd jobs assigned to him the activity in which they are employed. The individual petitioners herein who have
when he had no painting job. been adjudged to be regular employees fall under the second category.
Owing to their length of service with the company, these workers became
regular employees, by operation of law, 1 year after they were employed by
KIMBERLY through RANK. While the actual regularization of these employees
entails the mechanical act of issuing regular appointment papers and compliance
with such other operating procedures as may be adopted by the employer, it is more
in keeping with the intent and spirit of the law to rule that the status of regular
employment attaches to the casual worker on the day immediately after the end of
his first year of service. To rule otherwise, and to instead make their regularization
dependent on the happening of some contingency or the fulfillment of certain
G.R. No. L-77629 May 9, 1990 requirements, is to impose a burden on the employee which is not sanctioned by law.
KIMBERLY INDEPENDENT v Drilon
That the first stated position is the situation contemplated and sanctioned by
Facts: law is further enhanced by the absence of a statutory limitation before regular status
Kimberly-Clark Philippines, Inc. (KIMBERLY) executed a three-year can be acquired by a casual employee. The law is explicit. As long as the employee
collective bargaining agreement (CBA) with United Kimberly-Clark Employees has rendered at least one year of service, he becomes a regular employee with respect
Union-Philippine Transport and General Workers' Organization (UKCEUPTGWO) to the activity in which he is employed. The law does not provide the qualification
which expired on June 30,1986. Within the 60-day freedom period prior to the that the employee must first be issued a regular appointment or must first be formally
expiration of and during the negotiations for the renewal of the aforementioned
21
declared as such before he can acquire a regular status. Obviously, where the law
does not distinguish, no distinction should be drawn
G. R. No. 148492. May 9, 2003 BUENAVENTURA C. MAGSALIN v
NATIONAL ORGANIZATION OF WORKING MEN (N.O.W.M)
G.R. No. 91307 January 24, 1991 SINGER SEWING v Drilon
Facts:
Facts: The private respondents worked as sales route helpers for the petitioner (Coca Cola)
SINGER MACHINE COLLECTORS UNION-BAGUIO (SIMACUB) filed for 5 months and thereafter they were hired on a daily basis. According to the petitioner, the
respondents were merely hired as substitutes for regular helpers when the latter were
a petition for direct certification as the sole and exclusive bargaining agent of all unavailable or due to shortage of manpower/high volume of work. These workers would then
collectors of the Singer Sewing Machine Company, Baguio City branch. The wait every morning outside the gates and if hired, they would be paid their wages at the end of
Company opposed the petition mainly on the ground that the union members are the day. The respondents asked the petitioner to make them regular but the latter refused.
actually not employees but are independent contractors as evidenced by the Hence, 23 of these temporary workers filed a case for illegal dismissal.
collection agency agreement which they signed. Union asserted that they "perform
the most desirable and necessary activities for the continuous and effective Issue: WON the truck helpers were regular employees.
operations of the business of the petitioner Company".
Held: Yes.
Issue: WON the collecting agents are employees of the company. In determining whether an employment should be considered regular or non-regular,
the applicable test is the reasonable connection between the particular activity performed by
the employee in relation to the usual business or trade of the employer. The standard, supplied
Held: No. by the law itself, is whether the work undertaken is necessary or desirable in the usual
The nature of the relationship between a company and its collecting agents business or trade of the employer, a fact that can be assessed by looking into the nature of the
depends on the circumstances of each particular relationship. Not all collecting services rendered and its relation to the general scheme under which the business or trade is
agents are employees and neither are all collecting agents independent contractors. pursued in the usual course. It is distinguished from a specific undertaking that is divorced
from the normal activities required in carrying on the particular business or trade. But,
The plain language of the agreement reveals that the designation as although the work to be performed is only for a specific project or seasonal, where a person
collection agent does not create an employment relationship and that the applicant is thus engaged has been performing the job for at least one year, even if the performance is not
to be considered at all times as an independent contractor. This is consistent with the continuous or is merely intermittent, the law deems the repeated and continuing need for its
performance as being sufficient to indicate the necessity or desirability of that activity to the
first rule of interpretation that the literal meaning of the stipulations in the contract business or trade of the employer. The employment of such person is also then deemed to be
controls. No such words as "to hire and employ" are present. Moreover, the regular with respect to such activity and while such activity exists.
agreement did not fix an amount for wages nor the required working hours.
Compensation is earned only on the basis of the tangible results produced, i.e., total The argument of petitioner that its usual business or trade is softdrink manufacturing
collections made. and that the work assigned to respondent workers as sales route helpers so involves merely
postproduction activities, one which is not indispensable in the manufacture of its products,
The Court finds that since private respondents are not employees of the scarcely can be persuasive. If, as so argued by petitioner company, only those whose work are
Company, they are not entitled to the constitutional right to join or form a labor directly involved in the production of softdrinks may be held performing functions necessary
organization for purposes of collective bargaining. Accordingly, there is no and desirable in its usual business or trade, there would have then been no need for it to even
maintain regular truck sales route helpers. The nature of the work performed must be viewed
constitutional and legal basis for their "union" to be granted their petition for direct from a perspective of the business or trade in its entirety and not on a confined scope. The
certification. repeated rehiring of respondent workers and the continuing need for their services clearly
attest to the necessity or desirability of their services in the regular conduct of the business or
trade of petitioner company.
22
G.R. No. L-46562 March 31, 1978 VASSAR INDUSTRIES Facts:
EMPLOYEES UNION (VIEU) v HON. FRANCISCO L. ESTRELLA Benjamin Victoriano (hereinafter referred to as Appellee), a member of
INC, had been in the employ of the Elizalde Rope Factory, Inc. (hereinafter referred
Facts: to as Company) since 1958. As such employee, he was a member of the Elizalde
There was in existence a CBA between private respondents Associated Rope Workers' Union (hereinafter referred to as Union) which had with the
Labor Unions and Vassar Industries. Prior to its expiration, 111 of a total number of Company a CBA containing a closed shop provision which reads as:
150 employees of such firm disaffiliated from the former labor organization and
formed their own union. Thereafter, they filed an application for registration of their Membership in the Union shall be required as a condition of employment
union with the Bureau of Labor Relations, complying with an the requirements of for all permanent employees workers covered by this Agreement.
both the Labor Code and its implementing regulations. While such application was
pending, petitioner Union filed a petition for certification as bargaining agent for the Under Section 4(a), paragraph 4, of RA 875, prior to its amendment by RA
rank-and-file employees of the company. The Med-Arbiter denied their plea on the 3350, the employer was not precluded "from making an agreement with a labor
ground that the union was not duly registered with the Department of Labor. organization to require as a condition of employment membership therein, if such
labor organization is the representative of the employees." On June 18, 1961,
The Bureau of Labor Relations denied the application for registration on the however, RA 3350 was enacted, introducing an amendment to — paragraph (4)
ground that there is a registered collective bargaining agent in the company. subsection (a) of section 4 of Republic Act No. 875, as follows: "but such agreement
shall not cover members of any religious sects which prohibit affiliation of their
Issue: WON BLR may deny the registration. members in any such labor organization".
Held: No. Being a member of a religious sect that prohibits the affiliation of its
There is both a constitutional and statutory recognition that laborers have members with any labor organization, Appellee presented his resignation to appellant
the right to form unions to take care of their interests vis-a-viz their employees. Their Union in 1962, and when no action was taken thereon, he reiterated his resignation
freedom to form organizations would be rendered nugatory if they could not choose on September 3, 1974. Thereupon, the Union wrote a formal letter to the Company
their own leaders to speak on their behalf and to bargain for them." The freedom to asking the latter to separate Appellee from the service in view of the fact that he was
choose which labor organization to join is an aspect of the constitutional mandate of resigning from the Union as a member.
protection to labor. Mandamus lies to compel the registration of a labor organization.
To allow a labor union to organize itself and acquire a personality distinct and The management of the Company in turn notified Appellee and his counsel
separate from its members and to serve as an instrumentality to conclude CBA, the that unless the Appellee could achieve a satisfactory arrangement with the Union, the
role of a labor union as the agency for the expression of the collective will affecting Company would be constrained to dismiss him from the service. This prompted
its members both present and prospective, was stressed. Appellee to file an action for injunction to enjoin the Company and the Union from
dismissing Appellee. In its answer, the Union invoked the "union security clause" of
Employees shall have the right to self-organization and to form, join or the CBA; assailed the constitutionality RA 3350.
assist labor organizations of their own choosing for the purpose of collective
bargaining through representatives of their own choosing and to engage in concerted Issue: WON RA 3350 is unconstitutional
activities for the purpose of collective bargaining and other mutual aid or
protection." The Labor Code is equally explicit on the matter. Thus: "The State shall Held: No. Section 3 of RA 875 provides that employees shall have the right to self-
assure the rights of workers to self-organization, collective bargaining, security of organization and to form, join of assist labor organizations of their own choosing for
tenure and just and humane conditions of work." the purpose of collective bargaining and to engage in concerted activities for the
G.R. No. L-25246 September 12, 1974 BENJAMIN VICTORIANO purpose of collective bargaining and other mutual aid or protection. What the
v ELIZALDE ROPE WORKERS' UNION Constitution and the Industrial Peace Act recognize and guarantee is the "right" to
form or join associations.
23
Universal Robina Corp, with a 3-yr collective bargaining agreement which was to
The right to refrain from joining labor organizations recognized by Section expire on November 15, 1987 Within the freedom period of 60 days prior to the
3 of the Industrial Peace Act is, however, limited. The legal protection granted to expiration of its CBA, TUPAS filed an amended notice of strike as a means of
such right to refrain from joining is withdrawn by operation of law, where a labor pressuring the company to extend, renew, or negotiate a new CBA with it.
union and an employer have agreed on a closed shop, by virtue of which the
employer may employ only member of the collective bargaining union, and the The NEW ULO (composed mostly of workers belonging to the INC sect)
employees must continue to be members of the union for the duration of the contract registered as a labor union. TUPAS staged a strike ROBINA obtained an injunction
in order to keep their jobs. To that all-embracing coverage of the closed shop against the strike, resulting in an agreement to return to work and for the parties to
arrangement, RA 3350 introduced an exception, when it added to Section 4 of the negotiate a new CBA. The NEW ULO filed a petition for a certification election at
Industrial Peace Act the following proviso: "but such agreement shall not cover the BLR
members of any religious sects which prohibit affiliation of their members in any
such labor organization". RA 3350 merely excludes ipso jure from the application TUPAS moved to dismiss the petition for being defective in form and the members
and coverage of the closed shop agreement the employees belonging to any religious of the NEW ULO were mostly members of INC sect which 3 yrs previous refused to
sects which prohibit affiliation of their members with any labor organization. What affiliate with any labor union and accused company of using the NEW ULO to
the exception provides, therefore, is that members of said religious sects cannot be defeat TUPAS’ bargaining rights
compelled or coerced to join labor unions even when said unions have closed shop
agreements with the employers; that in spite of any closed shop agreement, members Med-Arbiter ordered the holding of a certification election with 20 days.
of said religious sects cannot be refused employment or dismissed from their jobs on TUPAS appealed to BLR; In the meantime, it was able to negotiate a new 3-yr CBA
the sole ground that they are not members of the collective bargaining union. The with ROBINA, which was signed on December 3, 1987 and to expire on November
free exercise of religious profession or belief is superior to contract rights. In case of 15, 1990 BLR Director Calleja dismissed the appeal. TUPAS’ MR was denied.
conflict, the latter must, therefore, yield to the former. Hence, this petition alleging that BLR acted in excess of her jurisdiction and with
grave abuse of discretion in affirming the Med-Arbiter’s order for a certification
The primary effects of the exemption from closed shop agreements in favor election.
of members of religious sects that prohibit their members from affiliating with a
labor organization, is the protection of said employees against the aggregate force of Issue: WON the right of members of the INC sect not to join a labor union for being
the CBA, and relieving certain citizens of a burden on their religious beliefs; and by contrary to their religious beliefs bar the members of that sect from forming their
eliminating to a certain extent economic insecurity due to unemployment, which is a own union.
serious menace to the welfare of the people. It is our view that the exemption from
the effects of closed shop agreement does not directly advance, or diminish, the Held: No.
interests of any particular religion. The benefit upon the religious sects is merely The public respondent correctly observed that the "recognition of the tenets
incidental and indirect. The "establishment clause" (of religion) does not ban of the sect ... should not infringe on the basic right of self-organization granted by
regulation on conduct whose reason or effect merely happens to coincide or the constitution to workers, regardless of religious affiliation."
harmonize with the tenets of some or all religions. The free exercise clause of the
Constitution has been interpreted to require that religious exercise be preferentially
aided. G.R. No. 131235. November 16, 1999
G.R. No. 82914 June 20, 1988 KAPATIRAN SA MEAT AND CANNING v UST FACULTY UNION (USTFU) v ERNESTO R. BITONIO
BLR DIRECTOR PURA FERRER CALLEJA
Facts:
Facts: Private respondent Mariño et al are duly elected officer of UST faculty. The
1984-1987: TUPAS (Kapatiran) was the sole and exclusive collective union has a 5-year CBA with its employer and is set to expire on May 31,1998. On
bargaining representative of the workers in the Meat and Canning Division of the September 21, 1996, Sec Gen of the union posted a general assembly announcement
24
to be held on October 5, 1996. Various UST club presidents requested a general A union election is held pursuant to the union’s constitution and bylaws,
faculty assembly thus union and non-union faculty members convened. New set of and the right to vote in it is enjoyed only by union members. A union election should
officers were elected, violative of the CBL and that GA was held with the attendance be distinguished from a certification election, which is the process of determining,
of non-union members. Current union officers were served with a notice to vacate through secret ballot, the sole and exclusive bargaining agent of the employees in the
the union office as new set of offices were already elected. CBA was likewise appropriate bargaining unit, for purposes of collective bargaining. Specifically, the
ratified by an overwhelming majority. Mad-Arbiter declared the election conducted purpose of a certification election is to ascertain whether or not a majority of the
was violative of the union’s CBL. BLR Director Bitonio upheld the decision with a employees wish to be represented by a labor organization and, in the affirmative
ruling that the CBL which constituted the covenant between the union and its case, by which particular labor organization.
members, could not be suspended during the general assembly of all faculty
members, since it had not been authorized by the union. In a certification election, all employees belonging to the appropriate
bargaining unit can vote. Therefore, a union member who likewise belongs to the
Issue: WON public respondent committed grave abuse of discretion in refusing to appropriate bargaining unit is entitled to vote in said election. However, the reverse
recognize the officers elected during the October 4, 1996 general assembly. is not always true; an employee belonging to the appropriate bargaining unit but who
is not a member of the union cannot vote in the union election, unless otherwise
Held: No. authorized by the constitution and bylaws of the union. Verily, union affairs and
elections cannot be decided in a non-union activity.
We cannot attribute grave abuse of discretion to Director Bitonios finding
and conclusion. We invalidated the local union elections held at the wrong date In both elections, there are procedures to be followed. Thus, the October 4,
without prior notice to members and conducted without regard for duly prescribed 1996 election cannot properly be called a union election, because the procedure laid
ground rules. We held that the proceedings were rendered void by the lack of due down in the USTFUs CBL for the election of officers was not followed. It could not
process -- undue haste, lack of adequate safeguards to ensure integrity of the voting, have been a certification election either, because representation was not the issue,
and the absence of the notice of the dates of balloting. and the proper procedure for such election was not followed. The participation of
non-union members in the election aggravated its irregularity.
Self-organization is a fundamental right guaranteed by the Constitution and
the Labor Code.Corollary to this right is the prerogative not to join, affiliate with or
assist a labor union. Therefore, to become a union member, an employee must, as a
rule, not only signify the intent to become one, but also take some positive steps to
realize that intent.
On joining a labor union, the constitution and by-laws become a part of the
members contract of membership under which he agrees to become bound by the G.R. No. L-43495-99 January 20, 1990 TROPICAL HUT
constitution and governing rules of the union so far as it is not inconsistent with EMPLOYEES' UNION-CGW v TROPICAL HUT FOOD MARKET
controlling principles of law. The constitution and by-laws of an unincorporated
trade union express the terms of a contract, which define the privileges and rights Facts: The rank and file workers of the Tropical Hut Food organized a local union
secured to, and duties assumed by, those who have become members. The agreement called the Tropical Hut Employees Union (THEU), elected their officers, adopted
of a member on joining a union to abide by its laws and comply with the will of the their constitution and by-laws and immediately sought affiliation with the National
lawfully constituted majority does not require a member to submit to the Association of Trade Unions (NATU). The NATU accepted the THEU application
determination of the union any question involving his personal rights. for affiliation. Following such affiliation with NATU, Registration Certificate was
issued by the DOLE in the name of the Tropical Hut Employees Union — NATU. It
*Union Election vs Certification Election appears, however, that NATU itself as a labor federation, was not registered with the
Department of Labor.
25
PSEA subsequently affiliated itself with the National Congress of Workers
Company and THEU-NATU entered into a new CBA which incorporated (NCW), changed its name to Philippine Skylanders Employees Association -
the previous union-shop security clause and the attached check-off authorization National Congress of Workers (PSEA-NCW), and to maintain continuity within the
form. NATU received a letter jointly signed by the incumbent officers of the local organization, allowed the former officers of PSEA-PAFLU to continue occupying
union informing the NATU that THEU was disaffiliating from the NATU federation. their positions as elected officers in the newly-forged PSEA-NCW.
On despite being given the chance to affirm their membership with THEU-NATU,
they did not. The union security clause set forth in the CBA was enforced which 17 March 1994 PSEA-NCW entered into a collective bargaining agreement
says membership is a condition of continued employment. And they were dismissed. with PSI which was immediately registered with the Department of Labor and
Employment. PAFLU requested for the accounting. PSI through its personnel
Issue: WON disaffiliation is a violation of union security clause and be the basis of manager Francisco Dakila denied the request.
the dismissal of the employees.
PAFLU through Serafin Ayroso filed a complaint for unfair labor practice
Held: No. The union security clause embodied in the CBA cannot be used to against PSI, its president Mariles Romulo and personnel manager Francisco Dakila.
justify the dismissals meted to petitioners since it is not applicable to the PAFLU alleged that aside from PSI’s refusal to bargain collectively with its workers,
circumstances obtaining in this case. The CBA imposes dismissal only in case an the company through its president and personnel manager, was also liable for
employee is expelled from the union for joining another federation or for forming interfering with its employees’ union activities
another union or who fails or refuses to maintain membership therein. The case at
bar does not involve the withdrawal of merely some employees from the union but of Ayroso filed another complaint in behalf of PAFLU for unfair labor practice
the whole THEU itself from its federation. Clearly, since there is no violation of the against Francisco Dakila. Through Ayroso PAFLU claimed that Dakila was present
union security provision in the CBA, there was no sufficient ground to terminate the in PSEA’s organizational meeting thereby confirming his illicit participation in
employment of said employees. union activities. Ayroso added that the members of the local union had unwittingly
fallen into the manipulative machinations of PSI and were lured into endorsing a
In view of the fact that the dispute revolved around the mother federation collective bargaining agreement which was detrimental to their interests.
and its local, with the company suspending and dismissing the workers at the
instance of the mother federation then, the company’s liability should be limited to PAFLU amended its complaint by including the elected officers of PSEA-PAFLU as
the immediate reinstatement of the workers. And since their dismissals were effected additional party respondents. PAFLU averred that the local officers of PSEA-
without previous hearing and at the instance of NATU, this federation should be held PAFLU, namely Macario Cabanias, Pepito Rodillas, Sharon Castillo, Danilo
liable to the petitioners for the payment of their backwages, as what We have ruled Carbonel, Manuel Eda, Rolando Felix, Jocelyn Fronda, Ricardo Lumba, Joseph
in the Liberty Cotton Mills Case. Mirasol, Nerisa Mortel, Teofilo Quirong, Leonardo Reyes, Manuel Cadiente, and
G.R. No. 127374. January 31, 2002 PHILIPPINE SKYLANDERS v NLRC Herminia Riosa, were equally guilty of unfair labor practice since they brazenly
allowed themselves to be manipulated and influenced by petitioner Francisco Dakila.
Facts:
In November 1993 the Philippine Skylanders Employees Association Dakila moved for the dismissal of the complaint on the ground that the issue
(PSEA-NWC), a local labor union affiliated with the Philippine Association of Free of disaffiliation was an inter-union conflict which lay beyond the jurisdiction of the
Labor Unions (PAFLU), won in the certification election conducted among the rank Labor Arbiter. PSEA was no longer affiliated with PAFLU, Ayroso or PAFLU for
and file employees of Philippine Skylanders, Inc. (PSI). Its rival union, Philippine that matter had no personality to file the instant complaint.
Skylanders Employees Association-WATU (PSEA-WATU) immediately protested
the result of the election before the Secretary of Labor. PSEA-NWC sent PAFLU a Labor Arbiter declared PSEA’s disaffiliation from PAFLU invalid and held
notice of disaffiliation citing as reason PAFLU's supposed deliberate and habitual PSI, PSEA-PAFLU and their respective officers guilty of unfair labor practice.
dereliction of duty toward its members.
26
As PSEA-NCW’s personality was not accorded recognition, its collective
bargaining agreement with PSI was struck down for being invalid.
PSI, PSEA and their respective officers appealed to the NLRC. But the G.R. No. L-50992 June 19, 1985
NLRC upheld the Decision ofthe Labor Arbiter. NATIVIDAD SAMPANG vs HONORABLE AMADO G. INCIONG
Held: Right of local unions to separate from their mother federation on the ground Facts:
that as separate and voluntary associations, local unions do not owe their creation Sampang seeks the reversal of an order of the then Deputy Minister of
and existence to the national federation to which they areaffiliated but, instead, to the Labor Inciong, who sustained the RD in his decision to grant clearance for her
will of their members. The sole essence of affiliation is to increase, by collective dismissal, presumably for initiating "a concerted action among the rank and file
action, the common bargaining power of local unions for the effective enhancement workers not to perform overtime work amounting to gross insubordination" That
and protection of their interests. Admittedly, there aretimes when without succor and charge she denied, her version being that she made "several representations with
support local unions may find it hard, unaided by other support groups, to secure management, upon request of the members of the union, to cut-off overtime work, as
justice for themselves. Yet the local unions remain the basic units of association, free this would mean more days of work and additional living allowance for the workers,
to serve their own interests subject to the restraints imposed by the constitution and but to no avail, that the overtime work was a device of management to avoid
by-laws of the national federation, and free also to renounce the affiliation upon the compliance with P.D. 112; that there is no exigency for the rendering of overtime
terms laid down in the agreement which brought such affiliation into existence. work, hence, the concerted refusal to work overtime cannot be recalled a strike."
Nothing shown in the records nor is it claimed by PAFLU that the local Issue: WON Sampang’s dismissal violated the security of tenure.
union was expressly forbidden to disaffiliate from the federation nor were there any
conditions imposed for a valid breakaway. As such, the pendency of an election Held: Yes.
protest involving both the mother federation and the local union did not constitute a There is here a case, therefore, of an employee, with more than thirty years
bar to a valid disaffiliation. Neither was it disputed by PAFLU that 111 signatories service, having been dismissed for instigating a strike that lasted for two days and
out of the 120 members of the local union, or an equivalent of 92.5% of the total caused the loss in the amount of P2,716.00. It is quite obvious then that the
union membership supported the claim of disaffiliation and had in fact disauthorized constitutional mandate on security of tenure was violated. For even if her denial that
PAFLU from instituting any complaint in their behalf. she did not instigate such two-day strike be disregarded, still the penalty imposed
was grossly disproportionate to the offense imputed to her.
It was entirely reasonable then for PSI to enter into a collective bargaining
agreement with PSEA-NCW. As PSEA had validly severed itself from PAFLU, It would imply at the very least that where a penalty less punitive would
there would be no restrictions which could validly hinder it from subsequently suffice, whatever missteps may be committed by labor ought not to be visited with a
affiliating with NCW and entering into a collective bargaining agreement in behalf consequence so severe. It is not only because of the law's concern for the
of its members. The mere act of disaffiliation did not divest PSEA of its own workingman. There is, in addition, his family to consider. Unemployment brings
personality; neither did it give PAFLU the license to act independently of the local untold hardships and sorrows on those dependent on the wage-earner. The misery
union. and pain attendant on the loss of jobs then could be avoided if there be acceptance of
the view that under all the circumstances of this case, petitioners should not be
deprived of their means of livelihood. Nor is this to condone what had been done by
them. For all this while, since private respondent considered them separated from the
service, they had not been paid. From the strictly juridical standpoint, it cannot be
too strongly stressed, to follow Davis in his masterly work, Discretionary Justice,
that where a decision may be made to rest on informed judgment rather than rigid
rules, all the equities of the case must be accorded their due weight. Finally, labor
27
law determinations, to quote from Bultmann, should be not only secundum rationem Petitioners insist that their disaffiliation from PAFLU and filing a petition
but also secundum caritatem. for certification election are not acts of disloyalty but an exercise of their right to
self-organization. They contend that these acts were done within the 60-day freedom
period when questions of representation may freely be raised. Under the peculiar
facts of the case, We find petitioners' insistence untenable.
G.R. No. L-50283-84 April 20, 1983 A closed-shop is a valid form of union security, and a provision therefor in
DOLORES VILLAR v DEPUTY MINISTER INCIONG a collective bargaining agreement is not a restriction of the right of freedom of
association guaranteed by the Constitution. Where in a closed-shop agreement it is
Facts: stipulated that union members who cease to be in good standing shall immediately be
Petitioners were members of the Amigo Employees Union-PAFLU, and the dismissed, such dismissal does not constitute an unfair labor practice exclusively
existing bargaining agent of the employees in private respondent Amigo cognizable by the CIR.
Manufacturing (hereinafter referred to as Company). The Company and the Amigo
Employees Union-PAFLU had a CBA governing their labor relations, which Extant from the records is the fact that petitioners numbering 10, were
agreement was then about to expire on February 28, 1977. Within the last 60 days of among the 96 who signed the "Sama-Samang Kapasiyahan" whereas there are 234
the CBA, events transpired giving rise to the present dispute. union members in the Amigo Employees Union-PAFLU. Hence, petitioners
constituted a small minority for which reason they could not have successfully
On January 5, 1977, upon written authority of at least 30% of the employees disaffiliated the local union from PAFLU. Since only 96 wanted disaffiliation, it can
in the company, including the petitioners, the Federation of Unions of Rizal (referred be inferred that the majority wanted the union to remain an affiliate of PAFLU and
to as FUR) filed a petition for certification election with the Med-Arbiter. The this is not denied or disputed by petitioners. The action of the majority must,
petition was opposed by PAFLU. Thereafter, employees who signed with PAFLU therefore, prevail over that of the minority members.
signed a resolution stating their withdrawal from PAFLU and authorizing FUR to be
their sole bargaining agent.
Invoking the security clause in the CBA, PAFLU demanded the dismissal
of the members of fur, which the company granted.
Issue: WON the right to self-organization has been impaired.
Held: No.
It is true that disaffiliation from a labor union is not open to legal objection. G.R. No. L-22228 February 27, 1969
It is implicit in the freedom of association ordained by the Constitution. But this PAFLU, SOCIAL SECURITY SYSTEM EMPLOYEES ASSOCIATION-
Court has laid down the ruling that a closed shop is a valid form of union security, PAFLU v SECRETARY OF LABOR
and such provision in a collective bargaining agreement is not a restriction of the
right of freedom of association guaranteed by the Constitution. The quoted Facts:
stipulation for closed-shop is clear and unequivocal and it leaves no room for doubt The Registration of Labor Organizations — hereinafter referred to as the
that the employer is bound, under the collective bargaining agreement, to dismiss the Registrar — issued a notice of hearing of the matter of cancellation of the
employees, herein petitioners, for non- union membership. Petitioners became non- registration of the SSSEA, because of failure to furnish the BLR with copies of the
union. reports on the finances of that union duly verified by affidavits, in violation of
Section 23 of Republic Act No. 875. After hearing, the certification was cancelled.
28
UNITED SEAMEN v DAVAO SHIPOWNER
Petitioners pray for writs of certiorari and prohibition to restrain
respondents, the Secretary of Labor, the Director of Labor Relations and the Facts:
Registrar of Labor Organizations, from enforcing an order of cancellation of the On August 4, 1959, USUP presented a set of demand to DSA, representing
registration certificate of the Social Security System Employees Association — the respondent shipping companies, for union recognition, union security,
hereinafter referred to as the SSSEA — which is affiliated to the Philippine standardization of wages and other benefits. In response, the ship owners brought to
Association of Free Labor Unions — hereinafter referred to as PAFLU — as well as the attention of the USUP the existence of a CBA with the Davao Marine
to annul all proceedings in connection with said cancellation and to prohibit Association (DMA), where all of the crewmen of their launches belonged. They
respondents from enforcing Section 23 of RA 875. suggested to the USUP that they first take the necessary steps for certification as the
collective bargaining agent, as the ship owners were bound by the CBA until 1959.
Issue: WON section 23 violates freedom of assembly and association. However, even before receiving the ship owner’s response to its demands, the USUP
had filed a Notice of Strike against the individual ship owners at the Department of
Held: No. Labor Davao Office.
The registration prescribed in paragraph (b) of said section is not a
limitation to the right of assembly or association, which may be exercised with or The Chief of the Labor Operations Section of the Davao Office requested
without said registration. The latter is merely a condition sine qua non for the for a conference to solve the conflict. On August 20, 1959, both parties reached a
acquisition of legal personality by labor organizations, associations or unions and the covenant stating the withdrawal of the Notice of Strike, as well as the observance of
possession of the "rights and privileges granted by law to legitimate labor the status quo regarding the jobs incident to the businesses of the DSA and the
organizations". The Constitution does not guarantee these rights and privileges, withdrawal of the civil case of the DMA against the USUP. It was also stipulated in
much less said personality, which are mere statutory creations, for the possession and the contract that the USUP will respect the existing CBA between DSA and DMA,
exercise of which registration is required to protect both labor and the public against but USUP will file a petition for certification election for determination of union
abuses, fraud, or impostors who pose as organizers, although not truly accredited representation.
agents of the union they purport to represent. Such requirement is a valid exercise of
the police power, because the activities in which labor organizations, associations As stipulated, the USUP filed with the CIR a petition for certification
and union of workers are engaged affect public interest, which should be protected. election. Subsequent to the covenant, the shipping companies separately served
Furthermore, the obligation to submit financial statements, as a condition for the notices of termination upon 64 employees, effecting December 31, 1959, due to
non-cancellation of a certificate of registration, is a reasonable regulation for the different reasons (from stoppage of operations to the death of one of the partners of
benefit of the members of the organization, considering that the same generally the shipping companies due to business losses). As a result, USUP reported the
solicits funds or membership, as well as oftentimes collects, on behalf of its terminations to the Department of Labor, which called for a conference.
members, huge amounts of money due to them or to the organization. Nevertheless, on December 29, 1959, the USUP notified the Philippine
Constabulary, City Mayor, Bureau of Customs and the general public of a strike on
Sec. 23 does not impinge upon the right of organization guaranteed in the January 1, 1960.
Declaration of Human Rights, or run counter to Art. 2, 4, 7, which provide that
"workers and employers shall have the right to establish and join organizations of On February 11, 1960, the shipping companies filed a petition for writ of
their own choosing, without previous authorization"; that "workers and employers injunction, as a necessity due to irreparable damage to properties due to “coercion,
organizations shall not be liable to be dissolved or suspended by administrative violence and illegal picketing”. On the other hand, on February 24, 1960, the USUP
authority"; that "the acquisition of legal personality by workers' and employers' filed a ULP case against the ship owners and DSA, alleging that the ship owners
organizations, shall not be made subject to conditions of such a character as to interfered, and continued to interfere with their right to self-organization by
restrict the application of the provisions" above mentioned; and that "the guarantees discrimination against employees. CIR however sided with the DSA, dismissing the
provided for in" said Convention shall not be impaired by the law of the land. USUP’s ULP case while declaring the strike as illegal.
G.R. Nos. L-18778 and L-18779 August 31, 1967 Issue: WON the strike was legal.
29
Held: No. Petitioner filed various complaints against UPang in NLRC Dagupan,
The Supreme Court agreed with the lower court’s findings that the USUP’s mostly for non-payment of allowances. The complaints were dismissed.
Notice of Strike was but a direct offshoot of the “losing effort” to compel the DSA
and the ship owners to recognize USUP as the sole collective bargaining agent of the Petitioner's contention that the cases filed by Consuelo Abad as its president
employees, to the exclusion of the DMA as the existing collective bargaining agent should affect, not only herself, but all the other union members similarly situated as
of the DSA. she was, is well taken. The uncontroverted allegation of the petitioner is that it is the
holder of Registration Certificate No. 9865-C, having been registered with the then
First, the Court noted that the USUP filed its Notice of Strike even before Ministry of Labor and Employment on February 16, 1978. As such, petitioner
its receipt of the ship owner’s answers to its set of demands, thereby showing that the possessed the legal personality to sue and be sued under its registered name.
USUP was already set on continuing the strike with or without the answer of the ship Corollarily, its president, Consuelo Abad, correctly filed the complaints even if some
owners. This, according to the Court was a clear showing that USUP was aware of of them involved rights and interest purely or exclusively appertaining to individual
the existence of DMA as a valid collective bargaining agent, operating as a legal bar employees, it appearing that she signed the complaints "for and in behalf of the
to entertaining USUP’s demands. University of Pangasinan Faculty Union."
Second, the Court stated that USUP completely disturbed the status quo – The University's contention that petitioner had no legal personality to
the return to normal and original operating practices through the strike that was done institute and prosecute money claims must, therefore, fail. What should be borne in
by USUP. By striking, USUP impaired existing CBA between the shipowners and mind is that the interest of the individual worker can be better protected on the whole
the DMA which recognized "the right of the Employer to hire, promote and transfer by a strong union aware of its moral and legal obligations to represent the rank and
and for legal cause suspend, lay-off or discharge employees subject to the right of the file faithfully and secure for them the best wages and working terms and conditions. .
union (referring to the DMA) to notification and to ask reconsideration of any action . . Although this was stated within the context of collective bargaining, it applies
of the Employer in the premises." equally well to cases, such as the present wherein the union, through its president,
presented its individual members' grievances through proper proceedings. While the
It could not also be said that the DSA violated the covenant of August 20, complaints might not have disclosed the identities of the individual employees
1959, as it was stated that the DSA was not a party thereto. Even assuming that the claiming monetary benefits, such technical defect should not be taken against the
shipping companies were bound by the covenant, the termination of the employees claimants, especially because the University appears to have failed to demand a bill
was not considered to be a violation of the covenant, as the dismissals were of particulars during the proceedings before the Labor Arbiter.
predicated on legitimate reasons.
On the merits of the petition, the NLRC did not abuse its discretion in
Third, the existence of the CBA should have deterred USUP from acts resolving the appeal from the decision of Executive Labor Arbiter Tumang except
tending to force its recognition as a union. The employees concerned were bound by for the disallowance of the emergency cost of living allowance to members of the
the CBA between DMA and the ship owners, but instead of going through the petitioner.
procedure as stated in their CBA for grievance machinery.
Fourth, it was stated by the Court that, even granting that the purpose of the
strike was valid, the fact still remained that the means employed by the employees on
strike were far from legitimate, as shown by the fact that the USUP used acts of
violence and coercion. GR No. L-30241 June 30,1972
MACTAN WORKERS UNION VS ABOITIZ 47 SCRA 517
G.R. Nos. 64821-23 January 29, 1993
UNIVERSITY OF PANGASINAN FACULTY UNION v NLRC FACTS:
30
Defendant Cebu Shipyard & Engineering Works, Inc. in Lapulapu City is movement itself, which may well be the recipient of a crippling blow. Moreover,
employing laborers and employees belonging to two rival labor unions. Namely while it is equally understandable that their counsel would take advantage of every
plaintiff, Mactan Workers Union(MWU) and intervenor appellant Associated Labor legal doctrine deemed applicable or conjure up any defense that could serve their
Union (ALU). On November 28, 1964, the defendant Cebu Shipyard & Engineering cause, still, as officers of the court, there should be an awareness that resort to such a
Works, Inc. and the Associated Labor Union entered into a ‘Collective Bargaining technique does result in clogged dockets, without the least justification especially so
Agreement which mandate a profit sharing bonus of 10% of its net income derived if there be insistence on flimsy and insubstantial contentions just to give some
from the direct operation of its shipyard and shop in LapuLapu City for its labourers semblance of plausibility to their pleadings. Certainly, technical virtuosity, or what
and workers. The profit sharing bonus shall be paid by the company to ALU of passes for it, is no substitute for an earnest and sincere desire to assure that there be
which ALU will deliver it to the employees. Unclaimed bonuses shall be returned to justice according to law. That is a creed to which all members of the legal profession,
the management. The delivery should be in 2 instalments, 1st payable in March and labor lawyers not excluded, should do their best to live by.
the 2nd payable in June every year.
In 1965, the 2nd instalment given in June were not received by members of
the rival Mactan Workers Union (MWU) because they did not went to the ALU
office to receive their shares. After the 60 day period has lapse, ALU returned the
funds to the management with an advice to management to refrain from delivering
the amount to the members of MWU without a court order otherwise ALU will take
steps to protect the interests of its members. Because of the warning from ALU, the
company deposited the amount of P4,035.82 with the Labor Administrator. The G.R. No. 96189 July 14, 1992 UP v HON. PURA FERRER-CALLEJA
MWU filed a case with the lower court to recover the amount.
The Organization of Non-Academic Personnel of UP (ONAPUP) filed a
The lower court ordered the company to deliver the sum of money to ALU petition for certification election with Bureau of Legal Relations (BLR). It claimed to
and for ALU to pay the members of MWU their corresponding shares. Hence, the represent 33% of all the non-academic personnel of UP-Diliman, Los Baños, Manila,
appeal of intervenor ALU. and Visayas. The University made no objections thererto, but the All UP Workers’
Union opposed the same and asked that the appropriate organizational unistructure
ISSUE: WON Intervenor ALU only represent its members and not the entire be first defined. It alleged that its membership composed of both academic and non-
workforce of Defendant company academic rank-and-file (RnF) employees (EEs) of UP. The University then made a
comment on such that there should indeed be 2 distinct unions, one for academic EEs
HELD: Petition dismissed. and the other for the non-academic EEs, considering their dichotomy of interests.
The Labor Union that gets the majority vote as the exclusive bargaining Director Calleja however declared that the appropriate bargaining unit should
representative does not act for its members alone. It represents all the employees in comprise of both groups, stating that the intent of EO 180 was to not fragmentalize
such a bargaining unit. It is not to be forgotten that what is entitled to constitutional the employer (ER) unit. The University also sought to exclude from the bargaining
protection is labor, more specifically the workers, not labor organizations. That is the unit EEs holding supervisory positions, alleging that there still existed that held
Raison D’etere of labor unions. supervisory powers over her other EEs. Director Calleja upheld her earlier ruling,
Nevertheless, it is not to be forgotten that what is entitled to constitutional interposing that the policy-making powers contemplated in the case merely pertained
protection is labor, or more specifically the working men and women, not labor to academic matters and not as under the Labor Code. UP’s Motion for
organizations. The latter are merely the instrumentalities through which their welfare reconsideration was likewise denied, hence this petition for certiorari.
may be promoted and fostered. That is the raison d’etre of labor unions. The utmost
care should be taken then, lest in displaying an unyielding, intransigent attitude on ISSUE: WON academic and non-academic EEs of UP should comprise a single
behalf of their members, injustice be committed against opposing labor collective bargaining unit.
organizations. In the final analysis, they alone are not the sole victims, but the labor
31
HELD: No. Although the country’s labor laws fail to provide a criterion for - P previously certified as SEBA of EEs & laborers of PNR’s mechanical
determining the proper bargaining unit, even EO No. 180 only stated that the department
appropriate organizational unit. A “bargaining unit” has been defined as a group of - Negotiated two bargaining agreements with management (1961, 1963)
employees, consistent with equity to the ER, cases have shown the 4 criterion to - Renewal had been negotiated, contract remained to be signed
consider;(1) will of the employees; (2) affinity and unit of employees' interest, such - Caloocan shops unit was not established nor separated from the Mechanical
as substantial similarity of work and duties, or similarity of compensation and Department unit
working conditions; (3) prior collective bargaining history; and (4) employment - R composed mainly of supervisors who had filed pending case to be
status, such as temporary, seasonal probationary employees. Out of the four, it is the declared non-supervisors
“community/mutuality of interests” test that stands out the most. Applying the same, - Purpose of petition was to disturb present smooth working labor
it's clear that the acad and non-academic personnel’s respective interests contradict management relations
with each other, and in effect, failed to satisfy the “community/mutuality of interest
test.” Contrarily, the 2 obviously share a dichotomy of interest or dissimilarity in the CIR found that R was composed of workers exclusively at Caloocan shops
work. Thus, the 2 separate and distinct bargaining units, one unit is for academics of PNR changed with the maintenance of rolling stocks for repairs - major repair of
and the other for non-academic unit personnel, is essential to assure it to all the locomotives, engines, etc. It found that there is a community of interest among the
EEsthe exercise of their collective bargaining rights. workers of the Caloocan shops, since they are grouped in one place and work under
the same conditions, and exposed to the same occupational risk. Though evidence on
A "bargaining unit" is a group of employees of a given employer, record shows that workers at the Caloocan Shops perform the same nature of work as
comprised of all or less than all of the entire body of employees, which the collective their counterparts in the Manila Shed, the difference lies in the fact that workers at
interest of all the employees, consistent with equity to the employer, indicate to be the Caloocan Shops perform major repairs of locomotives, rolling stocks, engines,
the best suited to serve the reciprocal rights and duties of the parties under the etc., while those in the Manila Shed, works on minor repairs. Heavy equipment and
collective bargaining provisions of the law. machineries are found in the Caloocan Shops.
The test of the grouping is community or mutuality of interests. And this is In view of its findings and the history of "union representation" in the
so because 'the basic test of an asserted bargaining unit's acceptability is whether or railway company, indicating that bargaining units had been formed through
not it is fundamentally the combination which will best assure to all employees the separation of new units from existing ones whenever plebiscites had shown the
exercise of their collective bargaining rights." Hence, in that case, the Court upheld workers' desire to have their own representatives, and relying on the "Globe
the trial court's conclusion that two separate bargaining units should be formed, one doctrine", CIR held that the employees in the Caloocan Shops should be given a
consisting of regular and permanent employees and another consisting of casual chance to vote on whether their group should be separated from that represented by
laborers or stevedores. the Mechanical Department Labor Union, and ordered a plebiscite held for the
MECHANICAL DEPARTMENT LABOR UNION SA PHILIPPINE purpose.
NATIONAL RAILWAYS v. CIR G.R. No. L-28223 August 30, 1968
P Union appealed to SC questioning the applicability under the
FACTS: R Samahanng mga Manggagawa sa Caloocan Shops filed a petition calling circumstances of the “Globe doctrine” of considering the will of the employees in
attention to the fact that there were three unions in the Caloocan shops of the PNR determining what union should represent them.
(Samahan, KapisananngManggagawasa Manila Railroad Company, and Mechanical
Department Labor Union), that no certification election had been held in the last 12 ISSUE: W/N a plebiscite election should be held to determine whether EEs at the
months, that both R Samahanand P had submitted labor demands upon the Caloocan shops desire R Union to be separated from the P union so that it may be
management for which reason a certification election was needed to determine the recognized as a separate bargaining unit.
proper collective bargaining agency for the Caloocan shop workers. This was
opposed by the management and P. RULING: YES. Under the Globe doctrine, bargaining units may be formed through
separation of new units from existing ones whenever plebiscites had shown the
32
workers’ desire to have their own representatives. Technically, this appeal is
premature, since the result of the ordered plebiscite among the workers of the Issue: WON petitioner's monthly paid rank-and file employees can constitute a
Caloocan shops may be adverse to the formation of a separate unit, in which event, bargaining unit separate from the existing bargaining unit of its daily paid rank-and-
as stated in the appealed order, all questions raised in this case would be rendered file employees.
moot and academic.
Held: Yes.
Appellant contends that the application of the "Globe doctrine" is not
warranted because the workers of the Caloocan shops do not require different skills The monthly paid office and technical rank-and-file employees of petitioner
from the rest of the workers in the Mechanical Department of the Railway Company. Golden Farms enjoy the constitutional right to self-organization and collective
This question is primarily one of facts. The Industrial Court has found that there is a bargaining. A "bargaining unit" has been defined as a group of employees of a given
basic difference, in that those in the Caloocan shops not only have a community of employer, comprised of all or less than all of the entire body of employees, which the
interest and working conditions but perform major repairs of railway rolling stock, collective interest of all the employees, consistent with equity to the employer,
using heavy equipment and machineries found in said shops, while the others only indicate to be the best suited to serve the reciprocal rights and duties of the parties
perform minor repairs. It is easy to understand, therefore, that the workers in the under the collective bargaining provisions of the law. The community or mutuality of
Caloocan shops require special skill in the use of heavy equipment and machinery interest is therefore the essential criterion in the grouping. "And this is so because
sufficient to set them apart from the rest of the workers. In addition, the record shows 'the basic test of an asserted bargaining unit's acceptability is whether or not it is
that the collective bargaining agreements negotiated by the appellant union have fundamentally the combination which will best assure to all employees the exercise
been in existence for more than two (2) years; hence, such agreements can not of their collective bargaining rights.'
constitute a bar to the determination, by proper elections, of a new bargaining
representative (PLDT Employees' Union vs. Philippine Long Distance Telephone In the case at bench, the evidence established that the monthly paid rank-
Co.) and-file employees of petitioner primarily perform administrative or clerical work. In
contradistinction, the petitioner's daily paid rank-and-file employees mainly work in
As to the charge that some of the members of the appellee, "Samahan Ng the cultivation of bananas in the fields. It is crystal clear the monthly paid rank-and-
Manggagawa", are actually supervisors, it appears that the question of the status of file employees of petitioner have very little in common with its daily paid rank-and-
such members is still pending final decision; hence, it would not constitute a legal file employees in terms of duties and obligations, working conditions, salary rates,
obstacle to the holding of the plebiscite. At any rate, the appellant may later question and skills. To be sure, the said monthly paid rank-and-file employees have even been
whether the votes of those ultimately declared to be supervisors should be counted. excluded from the bargaining unit of the daily paid rank-and-file employees. This
G.R. No. 102130 July 26, 1994 dissimilarity of interests warrants the formation of a separate and distinct bargaining
GOLDEN FARMS v SECRETARY OF LABOR unit for the monthly paid rank-and-file employees of the petitioner. To rule otherwise
would deny this distinct class of employees the right to self-organization for
Facts: purposes of collective bargaining. Without the shield of an organization, it will also
On February 27, 1992, private respondent Progressive Federation of Labor expose them to the exploitations of management.
(PFL) filed a petition before the Med-Arbiter praying for the holding of a
certification election among the monthly paid office and technical rank-and-file *Note
employees of petitioner Golden Farms. Petitioner moved to dismiss the petition
because there was already an existing collective bargaining agreement between the It was petitioner company that filed the motion to dismiss the petition for
rank-and-file employees represented by the National Federation of Labor (NFL) and election. The general rule is that an employer has no standing to question a
petitioner. Respondent PFL opposed petitioner's Motion to Dismiss. It countered that certification election since this is the sole concern of the workers. 11 Law and policy
the monthly paid office and technical employees should be allowed to form a demand that employers take a strick, hands-off stance in certification elections. The
separate bargaining unit because they were expressly excluded from coverage in the bargaining representative of employees should be chosen free from any extraneous
Collecting Bargaining Agreement (CBA) between petitioner and NFL.
33
influence of management. A labor bargaining representative, to be effective, must The Labor Code recognizes 2 principal groups of employees, namely, the
owe its loyalty to the employees alone and to no other. managerial and the rank and file groups.
Members of the KASAMA KO who are professional, technical,

administrative and confidential personnel of PHILTRANCO performing managerial
functions are not qualified to join, much less form a union. They were expressly
excluded within the operational ambit of the bargaining unit for the simple reason
that under the law, managers are disqualified to be members of a labor organization.
The employees of Philtranco have been appraised and their functions

evaluated. Managers by any name may not join the rank and file union. On the other
hand, those who are rank and file workers may join the existing bargaining unit
G.R. No. 85343 June 28, 1989 PHILTRANCO SERVICE ENTERPRISES v instead of organizing another bargaining unit and compelling the employer to deal
s BUREAU OF LABOR RELATIONS with it.
Facts: *One-union, one-company

On February 15, 1988, the Kapisanan ng mga Kawani, Assistant,
Manggagawa at Konpidensyal sa Philtranco (KASAMA KO), a registered labor We see no need for the formation of another union in PHILTRANCO. The
organization filed a petition for certification election with DOLE seeking to represent qualified members of the KASAMA KO may join the NAMAWU-MIF if they want
all professional, technical, administrative, and confidential employees personnel of to be union members, and to be consistent with the one-union, one-company policy
respondent at its establishments in Luzon, Visayas and Mindanao for purposes of of the DOLE.
collective bargaining. KASAMA KO alleged that they were always expressly
excluded from participating in the certification election conducted among the rank It is natural in almost all fairly sized companies to have groups of workers
and file employees (drivers, conductors, coach drivers, coach stewards, and discharging different functions. No company could possibly have all employees
mechanics) of respondent and are excluded from the bargaining unit covered by the performing exactly the same work. Variety of tasks is to be expected. It would not be
CBA between respondent and its rank and file employees. In addition, there exist in the interest of sound labor-management relations if each group of employees
substantial differences in the terms and conditions of employment between the assigned to a specialized function or section would decide to break away from their
above-mentioned employees, hence, the former are covered by another appropriate fellow-workers and form their own separate bargaining unit. We cannot allow one
bargaining unit which is separate and distinct from that of the rank and file unit for typists and clerks, one unit for accountants, another unit for messengers and
employees of respondent. drivers, and so on in needless profusion. Where shall the line be drawn? The
questioned decision of the public respondent can only lead to confusion, discord and
On February 24, 1988, the National Mines and Allied Workers Union labor strife.
(NAMAWU-MIF) filed a motion for intervention alleging that it is the bargaining
agent of the workers at Philtranco and as such it has a substantial interest in the The respondents state that this case is an exception to the general rule
outcome of the petition. considering that substantial differences exist between the office employees or
professional, technical, administrative and confidential employees vis-a-vis the field
Issue: WON KASAMA KO may represent all professional, technical, administrative, workers or drivers, conductors and mechanics of the petitioner. Against this
and confidential employees personnel. contention, we find that the "substantial differences" in the terms and conditions of
employment between the private respondent's members and the rest of the company's
Held: No. rank and file employees are more imagined than real. We agree with the petitioner
34
that the differences alleged are not substantial or significant enough to merit the Held: Yes. The fact that the three plants are located in three different places, namely,
formation of another union. in Cabuyao, Laguna, in Otis, Pandacan, Metro Manila, and in San Fernando,
Pampanga is immaterial. Geographical location can be completely disregarded if the
communal or mutual interests of the employees are not sacrificed.
An appropriate bargaining unit may be defined as “a group of employees of

a given employer, comprised of all or less than all of the entire body of employees,
which the collective interest of all the employees, consistent with equity to the
employer, indicate to be best suited to serve the reciprocal rights and duties of the
parties under the collective bargaining provisions of the law.”
A unit to be appropriate must effect a grouping of employees who have

SAN MIGUEL UNION VS. LAGUESMA G.R. No. 110399 August 15, 1997 substantial, mutual interests in wages, hours, working conditions and other subjects
of collective bargaining.
Facts:
Petitioner union filed before DOLE a Petition for Direct Certification or
Certification Election among the supervisors and exempt employees of the SMC
Magnolia Poultry Products Plants of Cabuyao, San Fernando and Otis.
Med-Arbiter Danilo L. Reynante issued an Order ordering the conduct of

certification election among the abovementioned employees of the different plants as G.R. No. 77395 November 29, 1988
one bargaining unit. BELYCA CORPORATION v DIR. CALLEJA
San Miguel Corporation filed a Notice of Appeal with Memorandum on Facts:

Appeal, pointing out, among others, the Med-Arbiter’s error in grouping together all On June 3, 1986, private respondent Associated Labor Union (ALU)-TUCP
three (3) separate plants, into one bargaining unit, and in including supervisory levels filed a petition for direct certification as the sole and exclusive bargaining agent of
3 and above whose positions are confidential in nature. all the rank and file employees/workers of Belyca Corporation (Livestock and Agro-
Division). The collective bargaining unit sought for the issuance of an order
The public respondent, Usec Laguesma, granted respondent company’s Appeal and authorizing the immediate holding of a certification election.
ordered the remand of the case to the Med-Arbiter of origin for determination of the
true classification of each of the employees sought to be included in the appropriate Respondent employer alleged that due to the nature of its business, very few
bargaining unit. of its employees are permanent, the overwhelming majority of which are seasonal
and casual and regular employees and that 138 employees who signed were no
Upon petitioner-union’s motion, Undersecretary Laguesma granted the longer part of the corporation. Petitioner contends that the bargaining unit must
reconsideration prayed for and directed the conduct of separate certification elections include all the workers in its integrated business concerns ranging from piggery,
among the supervisors ranked as supervisory levels 1 to 4 (S1 to S4) and the exempt poultry, to supermarts and cinemas so as not to split an otherwise single bargaining
employees in each of the three plants at Cabuyao, San Fernando and Otis. unit into fragmented bargaining units. LA granted the petition.
Issue: WON the employees of the three plants constitute an appropriate single Issue: WON THE PROPOSED BARGAINING UNIT IS AN APPROPRIATE
bargaining unit. BARGAINING UNIT.
35
Held: Yes. Art. 256 does not specifically define what constitutes an appropriate Abaquin Security. These three agencies were collectively referred to by private
collective bargaining unit. There are 4 factors to be considered in determining the respondent Union as the "PGA Security Agency. On April 11, 1986, petitioners filed
proper bargaining unit to wit: (1) will of employees (Glove Doctrine); (2) affinity a single comment alleging therein that the said three security agencies have separate
and unity of employee's interest, such as substantial similarity of work and duties or and distinct corporate personalities.
similarity of compensation and working conditions; (3) prior collective bargaining
history; and (4) employment status, such as temporary, seasonal and probationary Issue: WON the employer may intervene in the certification election.
employees".
Held: No. Except where the employer has to file a petition for certification election
The Court stressed the importance of the fourth factor and sustained the trial pursuant to Article 258 because of a request to bargain collectively, it has nothing to
court's conclusion that two separate bargaining units should be formed in dealing do with a certification election which is the sole concern of the workers. Its role in a
with respondent company, one consisting of regular and permanent employees and certification election is a mere by-stander. It has no legal standing in a certification
another consisting of casual laborers or stevedores. Otherwise stated, temporary election as it cannot oppose the petition or appeal the Med-Arbiter's orders related
employees should be treated separately from permanent employees. But more thereto. An employer that involves itself in a certification election lends suspicion to
importantly, this Court laid down the test of proper grouping, which is community the fact that it wants to create a company union.
and mutuality of interest.
Where the employment status was not at issue but the nature of work of the
employees concerned; the Court stressed the importance of the second factor G.R. No. 101730. June 17, 1993 PT&T v LAGUESMA and PT&T
otherwise known as the substantial-mutual-interest test. SUPERVISORY EMPLOYEES UNION-APSOTEU
It is beyond question that the employees of the livestock and agro division Facts:
of petitioner corporation perform work entirely different from those performed by PT&T Supervisory Employees Union- APSOTEU (UNION, for brevity)
employees in the supermarts and cinema. Among others, the noted differences are: filed a petition before the Industrial Relations praying for the holding of a
their working conditions, hours of work, rates of pay, including the categories of certification election among the supervisory employees of petitioner Philippine
their positions and employment status. As stated by petitioner corporation in its Telegraph & Telephone Corporation (PT&T, for brevity). On 29 October 1990,
position paper, due to the nature of the business in which its livestock-agro division UNION amended its petition to include the allegation that PT&T was an
is engaged very few of its employees in the division are permanent, the unorganized establishment employing roughly 100 supervisory employees from
overwhelming majority of which are seasonal and casual and not regular employees. whose ranks will constitute the bargaining unit sought to be established. On 22
November 1990, PT&T moved to dismiss the petition for certification election on the
ground that UNION members were performing managerial functions and thus were
not merely supervisory employees. Moreover, PT&T alleged that a certified
bargaining unit already existed among its rank-and-file employees which barred the
filing of the petition.
G.R. No. 92357 July 21, 1993 PHIL. SCOUT VETERANS SECURITY
AND INVESTIGATION AGENCY (PSVSIA) v SECRETARY Issue: Can a petition for certification election filed by supervisory employees of an
unorganized establishment — one without a certified bargaining agent — be
Facts: dismissed on the ground that these employees are actually performing managerial
On April 6, 1989, private respondent labor union, PGA Brotherhood functions?
Association - Union of Filipino Workers (UFW), hereinafter referred to as "the
Union" filed a petition for Direct Certification/Certification Election among the rank Held: No.
and file employees of Philippine Scout Veterans Security, GVM Security and
36
The applicable provision of law in the case at bar is Art. 257 of the Labor G.R. No. 116172. October 10, 1996. SAN MIGUEL FOODS, INC.-CEBU
Code. The supervisor employees of PT&T did not yet have a certified bargaining B-MEG FEED PLANT v LAGUESMA and IBM
agent to represent them at the time the UNION, which is a legitimate labor
organization duly registered with the Department of Labor and Employment, filed Facts:
the petition for certification election. Since no certified bargaining agent represented On September 1993, a petition for certification election among the monthly-
the supervisory employees, PT&T may be deemed an unorganized establishment paid employees of the San Miguel Foods, Inc.-Cebu B-Meg Feeds Plant was filed by
within the purview of Art. 257 of the Labor Code. The fact that petitioner's rank-and- private respondent labor federation Ilaw at Buklod ng Manggagawa (IBM, for
file employees were already represented by a certi􀀼ed bargaining agent does not brevity) before Med- Arbiter alleging, inter alia, that it is a legitimate labor
make PT&T an organized organization duly registered with DOLE. Petition granted.
establishment vis-a-vis the supervisory employees. After all, supervisory employees
are "not eligible for membership in a labor organization of the rank-and-file Issue: WON IBM was a legitimate labor organization.
employees." Consequently, the Med-Arbiter, as sustained by public respondent,
committed no grave abuse of discretion in granting the petition for certification Held:
election among the supervisory employees of petitioner PT&T because Art. 257 of
the Labor Code provides that said election should be automatically conducted upon It is important to determine whether or not a particular labor organization is
filing of the petition. legitimate since legitimate labor organizations have exclusive rights under the law
which cannot be exercised by nonlegitimate unions, one of which is the right to be
PT&T did not possess the legal personality to file a motion to dismiss the certi􀀼ed as the exclusive representative of all the employees in an appropriate
petition for certification election even if based on the ground that its supervisory collective bargaining unit for purposes of collective bargaining. These rights are
employees are in reality managerial employees. It is well-settled that an employer found under Article 242 of the Labor Code.
has no standing to question a certification election since this is the sole concern of
the workers. The only exception to this rule is where the employer has to file the Ordinarily a labor organization attains the status of legitimacy only upon the
petition for certification election itself pursuant to Art. 258 of the Labor Code issuance in its name of a Certificate of Registration by the BLR pursuant to Articles
because it was requested to bargaining collectively. But, other than this instance, the 234 and 235 of the Labor Code. The foregoing procedure is not the only way by
choice of a collective bargaining agent is purely the internal affair of labor. What which a labor union may become legitimate, however. When an unregistered union
PT&T should have done was to question the inclusion of any disqualified employee becomes a branch, local or chapter of a federation, some of the aforementioned
in the certification election during the exclusion-inclusion proceedings before the requirements for registration are no longer required. Section 3, Rule II, Book V of
representation officer. Indeed, this is precisely the purpose of the exclusion-inclusion the Implementing Rules of the Labor Code governs the procedure for union
proceedings, i.e., to determine who among the employees are entitled to vote and be affiliation. Paragraph (a) refers to a local or chapter of a federation which did not
part of the bargaining unit sought to be certified. undergo the rudiments of registration while paragraph (b) refers to an independently
registered union which affiliated with a federation. Implicit in the foregoing
differentiation is the fact that a local or chapter need not be independently registered.
By force of law (in this case, Article 212 [h]), such local or chapter becomes a
legitimate labor organization upon compliance with the aforementioned provisions of
Section 3 (a) and (e), without having to be issued a Certificate of Registration in its
favor by the BLR. Absent compliance with these mandatory requirements, the local
or chapter does not become a legitimate labor organization. Corollarily, the
satisfaction of all these requirements by the local or chapter shall vest upon it the
status of legitimacy with all its concomitant statutory privileges, one of which is the
right to be certified as the exclusive representative of all the employees in an
appropriate bargaining unit.
37
pursuant to Article 258 of the Labor Code because it was requested to bargain
Petitioner SMFI does not dispute the fact that IBM at SMFI has complied collectively, which exception finds no application in the case before us. Its role in a
with the second set of requirements, i.e., constitution, by-laws, et al. What is certification election has aptly been described as that of a mere by-stander. It has no
controverted is the non-compliance with the requirement as to the charter certificate legal standing in a certification election as it cannot oppose the petition or appeal the
which must be submitted to the BLR within 30 days from its issuance by the labor Med-Arbiter's orders related thereto. An employer that involves itself in a
federation. While the presence of a charter certificate is conceded, petitioner certification election lends suspicion to the fact that it wants to create a company
maintains that the validity and authenticity of the same cannot yet be ascertained as it union. This Court should be the last agency to lend support to such an attempt at
is still not known who is the legitimate and authorized representative of the IBM interference with a purely internal affair of labor. While employers may rightfully be
Federation who may validly issue said charter certificate in favor of its local, IBM at notified or informed of petitions of such nature, they should not, however, be
SMFI. According to petitioner, there are 2 contending sets of officers of the IBM considered parties thereto with the concomitant right to oppose it. Sound policy
Federation at the time the charter certi􀀼cate was issued in favor of IBM at SMFI, the dictates that they should maintain a strictly hands-off policy.
faction of Mr. Severino O. Meron and that of Mr. Edilberto B. Galvez. We agree G.R. No. L-41937. July 6, 1976 FOITAF-ASSOCIATED ANGLO
with the position of the public respondent and the Solicitor General in upholding the AMERICAN CHAPTER vs Director CARMELO NORIEL
legitimate status of IBM at SMFI. In addition private respondent's Comment to this
petition indicates that in the election of o􀀼cers held to determine the representatives Facts:
of IBM, the faction of Mr. Meron lost to the group of Mr. Edilberto Galvez, and the Private respondent union filed a verified petition for certification election
latter was acknowledged as the duly elected IBM National President. Thus, the among the employees and workers of the Company alleging that more than thirty
authority of Mr. Galvez to sign the charter certificate of IBM at SMFI, as President percent of its rank and file workers support the same. The med-arbiter assigned to the
of the IBM Federation, can no longer be successfully questioned. case ordered that an election be conducted. The petitioner union appealed from said
order on the sole ground that there was failure to comply with the 39% requirement
*CHARTER CERTIFICATE; CERTIFICATION UNDER OATH BY THE alleging that there had been retractions of some employees without however
ORGANIZATION'S SECRETARY AND PRESIDENT NOT ESSENTIAL FOR presenting proofs of the same. The BLR issued a resolution sustaining the previous
VALIDITY THEREOF order of the med-arbiter for a certification election. A MR of said resolution was
Petitioner next asseverates that the Charter Certificate submitted by the filed, opposed and denied. Hence the petition for certiorari labeling respondent
private respondent was defective in that it was not certified under oath and attested to Director's order for the holding of a certification election, despite the alleged failure
by the organization's secretary and President. Petitioner is grasping at straws. Under to comply with the 30% requirement of the Labor Code, as arbitrary and improvident
our ruling in the Progressive Development Corporation case, what is required to be exercise of authority.
certified under oath by the secretary or treasurer and attested to by the local's
president are the "constitution and by-laws, a statement on the set of officers, and the Issue: WON the certification election was proper
books of accounts" of the organization. The charter certificate issued by the mother
union need not be certified under oath by the secretary or treasurer and attested to by Held: Yes.
the local's president.
Where the verified petition by private respondent labor union had the
*CERTIFICATION ELECTION; ROLE OF EMPLOYER IS THAT OF A support of more than thirty percent of the rank and file employees, it becomes, in the
MERE BY-STANDER THEREIN; Exception language of the new Labor Code, "mandatory for the Bureau to conduct a
certification election for the purpose of determining the representatives of the
In any case, this Court notes that it is petitioner, the employer, which has employees in the appropriate bargaining unit and certify the winner as the exclusive
offered the most tenacious resistance to the holding of a certification election among collective bargaining representative of all the employees in the unit." It would run
its monthly-paid rank-and-file employees. This must not be so, for the choice of a counter to the law then, with the duty thus imposed on respondent Director, to
collective bargaining agent is the sole concern of the employees. The only exception ignore the demand that it be held.
to this rule is where the employer has to file the petition for certification election
38
No grave abuse of discretion, much less arbitrariness could be imputed to a labor organization of their choice. Thus may be discerned how crucial is a
the rejection of the plea of petition to set aside the challenged order for the holding certification election.
of a certification election inspite of the alleged failure to comply with the 30% Certification election is the fairest and most effective way of determining
requirement of the New Labor Code. The alleged retraction on the part of a number which labor organization can duly represent the working force. It is a fundamental
of employees involved resulting in the requirement of the law not being met is highly postulate that the will of the majority, if given expression in an honest election with
dubious in character. The 13 employees who allegedly retracted were not even freedom on the part of the voters to make their choice, is controlling. No better
presented before the med-arbiter and the alleged additional 45 employees who device can assure the institution of industrial democracy with the two parties to a
supposedly likewise changed their minds, were also not called to testify to the effect, business enterprise, management and labor, establishing a regime of self-rule.
petitioner satisfy itself with their being named in an a􀀼davit executed by its G.R. No. L-33705. April 15, 1977. AIR LINE PILOTS ASSOCIATION
presented. There is no justification for sustaining petitioner's stand. To do so would OF THE PHILIPPINES (GASTON GROUP) v CIR
be to disregard previous authoritative doctrines on the matter involving the basic
constitutional of freedom of association, made even more meaningful in labor Facts:
matters by the statutory device of certification election. G.R. No. L-33705 April 15, 1977
AIR LINE PILOTS ASSOCIATION OF THE PHILIPPINES (GASTON GROUP),
*INDUSTRIAL PEACE ACT AND THE NEW LABOR CODE STRESS petitioner,  vs. THE COURT OF INDUSTRIAL RELATIONS and AIR LINES
EMPLOYEES RIGHT TO SELF-ORGANIZATION. — PILOTS ASSOCIATION OF THE PHILIPPINES (GOMEZ GROUP), respondents
There is in the Industrial Peace Act this categorical provision on the right of Facts:
employees to self-organization: "Employees shall have the right to self-organization These are two petitions for certiorari (L-33705 and L-35206), consolidated
and to form, join or assist labor organization of their own choosing for the purpose of for purposes of decision because they involve more or less the same parties and
collective bargaining through representatives of their own choosing and to engage in interlocking issues.
concerted activities for the purpose of collective bargaining and other mutual aid or
protection." (Section 3 of RA 875) The new Labor Code (PD 442, 1974) is equally L-33705
explicit on the matter. Thus: "The State shall assure the rights of workers to On January 2, 1971, the ALPAP, represented by Capt. Gomez, who claimed
selforganization, collective bargaining, security of tenure and just and humane to be its president, filed a petition with CIR praying for certification as the sole and
condition of work." exclusive collective bargaining representative of "all the pilots now under
employment by the Philippine Air Lines, Inc, and are on active flight and/or
*HOLDING OF A CERTIFICATION ELECTION TO DETERMINE operational assignments." This was opposed by Capt. Gaston who also claimed to be
REPRESENTATIVE UNION. — the president alleging that CIR had no jurisdiction over the subject matter “because a
certification proceeding in the Court of Industrial Relations is not the proper forum
It is of the very essence of the regime of industrial democracy sought to be for the adjudication of the question as to who is the lawful president of a legitimate
attained through the collective bargaining process that there be no obstacle to the labor organization”. The Judge thereafter ruled in favor of Gomez.
freedom identified with the exercise of the right to selforganization. Labor is to be
represented by a union that can express its collective will. In the event, and this is ALPAP then held a meeting where 221 of the 270 members adopted a
usually the case, that there is more than one such group fighting for that privilege, a resolution amending ALPAP’s constitution and by-laws by providing in a new
certification election must be conducted. The institution of collective bargaining is, section thereof that —
to recall Cox, a prime manifestation of industrial democracy at work. The 2 parties to “Any active member who shall be forced to retire or forced to resign or otherwise
the relationship, labor and management, make their own rules by coming to terms. terminated for union activities as solely determine' by the Association shall have the
That is to govern themselves in matters that really count. As labor, however, is option to either continue to be and remain as an active member in good standing or
composed of a number of individuals, it is indispensable that they be represented by to resign in writing his active membership with the Association.”
39
Gaston then said that the amendment was adopted "In anticipation on the Issue: WON the authorization given by the industrial court to ALPAP (Gomez), in a
fact that they may be forced to resign or retire because of their 'union activities.' A certification proceeding to take over the corporate name, office and funds of ALPAP
majority of ALPAP members filed letters of retirement/ resignation from PAL. is valid.
Thereafter, an election for officers was held resulting to the election of Gaston as
president. Those however, who did not tender resignation voted for Gomez as Held:
president. No. We have made a careful examination of the records of L-33705 and we
find the adoption of the resolution introducing the questioned amendment to be
On June 3, 1971, ALPAP (Gaston) filed an opposition in Case 101-IPAB to substantial compliance with the ALPAP constitution and by-law. Indeed, there is no
an urgent ex parte motion of the PAL to enjoin the members of ALPAP from retiring refutation of the act that 221out of the 270 members of ALPAP did cast their votesin
or resigning en masse. It claimed that they sought for reinstatement and that their favor of the said amendment on October 30, 1970 at the ALPAP general membership
filing of resignations is a valid exercise of their constitutional rights and they could meeting.
not be deprived of their benefits. The opposition however was denied.
L-35206 Their Court cannot likewise subscribe to the restrictive interpretation made
A labor dispute was certified by the President of the Philippines between by the court below of the term "labor organization," which Section 2(e) of R.A. 875
ALPAP and PAL and was assigned to Judge Paredes. After conferring with the defines as any union or association of employees which exist, in whole or in part, for
parties, the Judge issued a return-to-work order, which ordered ALPAP members to the purpose of the collective bargaining or dealing with employers concerning terms
return to work and ordered PAL not to suspend or dismiss any employee as result of and conditions of employment." The absence of the condition that the court would
the strike and failure to comply to the said order shall result to contempt of court. attach to the statutory concept of a labor organization, as being limited to the
The employees then returned to work but Gaston, however, did not and it resulted to employees of particular employer, is quite evident from the law. The emphasis of
his termination. Industrial Peace Act is clearly on the purposes for which a union or association of
employees established rather than that membership therein should be limited only to
PAL then filed an urgent motion with the CIR to enjoin the members of the employees of a particular employer. Trite to say, under Section 2(h) of R.A 875
ALPAP from proceeding with their intention to resign/ retire en masse. The judge "representative" is define as including "a legitimate labor organization or any officer
then issued an order to ALPAP not to strike otherwise they will be terminated. or agent of such organization, whether or not employed by the employer or employee
ALPAP then filed an MR alleging that such order subjects them to involuntary whom he represents." It cannot be overemphasized likewise that labor dispute can
servitude. Their MR was denied. exist "regardless of whether the disputants stand in the proximate relation of
employer and employee. (Section 2(j), R.a. 875).
It then resulted to mass resignation and PAL accepted such and the caveat
pilots who retired were no longer entitled to benefits as the Pilots acts constituted a There is, furthermore, nothing in the constitution and by-laws of ALPAP
violation of the court’s order not to strike. Gomez then filed a petition to allow him which indubitably restricts membership therein to PAL pilots alone. 1 Although
to represent ALPAP since those who voted for Gaston has already resigned. Gaston according to ALPAP (Gomez) there has never been an instance when a non-PAL
and the pilots who resigned then prayed to the CIR that they be reinstated. This was pilot became a member of ALPAP, the complete lack of any such precondition for
opposed by Gomez and PAL but the judge ordered a dismissal of their opposition ALPAP membership cannot but be interpreted as an unmistakable authority for the
and ordered the reinstatement. The CIR however reversed the order of Judge association to accept pilots into its fold though they may not be under PAL's employ.
Paredeson the ground that the question of the employee status of the pilots who were The fundamental assumptions relied upon by the industrial court as bases
seeking reinstatement with PAL has already been raised squarely in Case 2939-MC for authorizing ALPAP (Gomez) to take over the office and funds of ALPAP being,
and resolved by the said tribunal found that the said pilots have already lost their in this Court's opinion, erroneous, and, in the absence of any serious dispute that on
employee status as a consequence of their resignations and/or retirement from PAL December 18-22, 1970 Felix C. Gaston, and four other pilots, were elected by the
which had been duly accepted by the latter. required majority of ALPAP members as officers of their association, this Court
hereby rules that the mentioned authorization to ALPAP (Gomez) to take over the
office, funds and name of ALPAP was done with grave abuse of discretion.
40
G.R. No. 84433. June 2, 1992 appropriate bargaining unit are entitled to vote. This principle is clearly stated in Art.
ALEXANDER REYES v CRESENCIANO B. TRAJANO 255 of the Labor Code which states that the 'labor organization designated or
selected by the majority of the employees in an appropriate bargaining unit shall be
Facts: the exclusive representative of the employees in such unit for the purpose of
A certification election was held among the employees of Tri-Union collective bargaining.' Collective bargaining covers all aspects of the employment
Industries Corporation. The competing unions were the Tri-Union Employees relation and the resultant CBA negotiated by the certified union binds all employees
Union-Organized Labor Association in Line Industries and Agriculture (TUEU- in the bargaining unit. Hence, all rank-and-file employees, probationary or
OLALIA), and Trade Union of the Philippines and Allied Services (TUPAS). Of the permanent, have a substantial interest in the selection of the bargaining
348 workers initially deemed to be qualified voters, only 240 actually took part in the representative. The Code makes no distinction as to their employment status as basis
election, conducted under the supervision of the BLR. Among the 240 employees for eligibility in supporting the petition for certification election. The law refers to
who cast their votes were 141 members of the INC. TUEU-OLALIA garnished the 'all' the employees in the bargaining unit. All they need to be eligible to support the
most votes sans the INC votes. petition is to belong to the 'bargaining unit.
The challenged votes were those cast by the 141 INC members. They were Neither does not the contention that petitioners should be denied the right to
segregated and excluded from the final count in virtue of an agreement between the vote because they "did not participate in previous certification elections in the
competing unions, reached at the pre-election conference that the INC members company for the reason that their religious beliefs do not allow them to form, join or
should not be allowed to vote "because they are not members of any union and assist labor organizations," persuade acceptance. No law, administrative rule or
refused to participate in the previous certification elections." precedent prescribes forfeiture of the right to vote by reason of neglect to exercise
the right in past certification elections. In denying the petitioners' right to vote upon
The INK employees promptly made known their protest to the exclusion of these egregiously fallacious grounds, the public respondents exercised their
their votes. They filed a petition to cancel the election alleging that it "was not fair" discretion whimsically, capriciously and oppressively and gravely abused the same.
and the result thereof did "not reflect the true sentiments of the majority of the
employees." TUEU-OLALIA opposed the petition. It contended that the petitioners The purpose of a certification election is precisely the ascertainment of the
"do not have legal personality to protest the results of the election," because "they are wishes of the majority of the employees in the appropriate bargaining unit: to be or
not members of either contending unit, but of the INC" which prohibits its followers, not to be represented by a labor organization, and in the affirmative case, by which
on religious grounds, from joining or forming any labor organization. particular labor organization. If the results of the election should disclose that the
majority of the workers do not wish to be represented by any union, then their wishes
Issue: WON INC votes must be counted despite not being part of a labor union. must be respected, and no union may properly be certified as the exclusive
representative of the workers in the bargaining unit in dealing with the employer
Held: Yes. regarding wages, hours and other terms and conditions of employment. The minority
employees — who wish to have a union represent them in collective bargaining —
The respondents' argument that the petitioners are disqualified to vote can do nothing but wait for another suitable occasion to petition for a certification
because they "are not constituted into a duly organized labor union" — "but election and hope that the results will be different. They may not and should not be
members of the INC which prohibits its followers, on religious grounds, from joining permitted, however, to impose their will on the majority — who do not desire to
or forming any labor organization" — and "hence, not one of the unions which vied have a union certified as the exclusive workers' benefit in the bargaining unit - upon
for certification as sole and exclusive bargaining representative," is specious. Neither the plea that they, the minority workers, are being denied the right of self
law, administrative rule nor jurisprudence requires that only employees affiliated organization and collective bargaining.
with any labor organization may take part in a certification election. On the contrary, G.R. No. 92391. July 3, 1992 PHILIPPINE FRUITS AND VEGETABLE
the plainly discernible intendment of the law is to grant the right to vote to all bona INDUSTRIES v HON. RUBEN D. TORRES
fide employees in the bargaining unit, whether they are members of a labor
organization or not. In a certification election all rank-and-file employees in the
41
Facts: On December 16, 1988, a certification election filed by the Trade Union of the December 16, 1988, and that such employees had in fact voted accordingly on
Philippines and Allied Services (TUPAS). Said order directed the holding of a election day. Viewed thus in the light of the substantial participation in the elections
certification election among the regular and seasonal workers of the Philippine Fruits by voter-employees, and further in the light of the all-too settled rule that in
and Vegetables, Inc. After a series of pre-election conferences, all issues relative to interpreting the Constitution's protection to labor and social justice provisions and
the conduct of the certification election were threshed out except that which pertains the labor laws and rules and regulations implementing the constitutional mandate,
to the voting qualifications of the 194 workers enumerated in the lists of qualified the SC adopts the liberal approach which favors the exercise of labor rights, We find
voters submitted by TUPAS. However, Med Arbiter ordered the opening of their the lack of one day in the posting of notices insignificant, and hence, not a
votes in order to attain majority. On February 23, 1989, petitioner formally filed a compelling reason at all in nullifying the elections.
Protest.
*EMPLOYEES IMPROPERLY LAID-OFF; ELIGIBLE TO VOTE
Issue: WON the protest was filed within the reglementary period. .
Employees who have been improperly laid off but who have a present,
Held: No. The records before Us quite clearly disclose the fact that petitioner, after unabandoned right to or expectation of reemployment, are eligible to vote in
filing a manifestation of protest on December 16, 1988, election day, only formalized certification elections. Thus if the dismissal is under litigation the employees
the same on February 20, 1989, or more than 2 months after the close of election concerned could still qualify to vote in the elections.
proceedings. We are not persuaded by petitioner's arguments that election
proceedings include not only casting of votes but necessarily includes canvassing *CERTIFICATION ELECTION; PROTEST IN THE PROCEEDINGS
and appreciation of votes cast and considering that the canvassing and appreciation
of all the votes cast were terminated only on February 16, 1989, it was only then that A close reading of Sections 3 and 4, Rule VI, Book V of the Implementing
the election proceedings are deemed closed, and thus, when the formal protest was Rules of the Labor Code, provides: "Section 3: The Representation officer may rule
filed on February 20, 1989, the five-day period within which to file the formal on any on-the-spot question arising from the conduct of the election. The interested
protest still subsisted and its protest was therefore formalized within the party may however, file a protest with the representation officer before the close of
reglementary period. the proceedings. "Protests not so raised are deemed waived. Such protest shall be
contained in the minutes of the proceedings." "Section 4: Where the protest is
As explained correctly by the Solicitor General, the phrase "close of formalized before the med-arbiter within 5 days after the close of the election
election proceedings" as used in Sections 3 and 4 of the pertinent Implementing proceedings, the med-arbiter shall decide the same within 20 working days from the
Rules refers to that period from the closing of the polls to the counting and tabulation date of formalization. If not formalized within the prescribed period, the protest shall
of the votes as it could not have been the intention of the Implementing Rules to be deemed dropped. The decision may be appealed to the Bureau in the same manner
include in the term "close of the election proceedings" the period for the final and on the same grounds as provided under Rule V."
determination of the challenged votes and the canvass thereof, as in the case at bar,
which may take a very long period. Thus, if a protest can be formalized within five The following requirements in order that a protest filed thereunder would
days after a final determination and canvass of the challenged votes have been made, prosper, to wit: (1) The protest must be filed with the representation officer and made
it would result in an undue delay in the affirmation of the employees' expressed of record in the minutes of the proceedings before theclose of election proceedings,
choice of a bargaining representative. and (2) The protest must be formalized before the Med- Arbiter within 5 days after
the close of the election proceedings.
Petitioner would likewise bring into issue the fact that the notice of G.R. No. 143428. June 25, 2001
certification election was posted only on December 12, 1988 or four days before the SANDOVAL SHIPYARDS v PRISCO PEPITO
scheduled elections on December 16, 1988, instead of the five-day period as required
under Section 1 of Rule VI, Book V of the Implementing Rules. But it is not Facts:
disputed that a substantial number, or 291 of 322 qualified voters, of the employees Sometime in 1992, the National Federation of Labor (NFL) filed with
concerned were informed, thru the notices thus posted, of the elections to be held on DOLE a petition for certification election, alleging that its members, who included
42
private respondents Prisco Pepito, et al., were regular employees of petitioner
Sandoval Shipyards, Inc. (SSI). Finding that the NFL members were rank-and-file "A certification proceeding is not a 'litigation' in the sense in which this
employees of SSI, the Med-Arbiter issued an order directing that a certification term is commonly understood, but a mere investigation of a nonadversary, fact-
election be held. However, in a Resolution, then Undersecretary Bienvenido 􀀼nding character, in which the investigating agency plays the part of a disinterested
Laguesma reversed the Med-Arbiter's Order and ruled that there was a valid investigator seeking merely to ascertain the desires of the employees as to the matter
subcontracting agreement between SSI and its subcontractors, and that no employer- of their representation. The court enjoys a wide discretion in determining the
employee relationship existed between SSI and private respondents, since the latter procedure necessary to insure the fair and free choice of bargaining representatives
were the employees of the subcontractors. In 1993, several cases for illegal dismissal by the employees.
were filed by private respondents against SSI and its President, petitioner Vicente
Sandoval. The LA rendered its Decision in the illegal dismissal cases. He found that The SC ruled that both the Labor Arbiter and the NLRC erred in holding
while private respondents were illegally dismissed, they were not entitled to that there was no employer-employee relationship between SSI and private
reinstatement with backwages, damages and attorney's fees. The LA ruled that there respondents. A certification proceeding is not a "litigation" in the sense in which this
was no employer-employee relationship between SSI and private respondents, citing term is commonly understood, but a mere investigation of a nonadversary, fact-
the resolution of Undersecretary Laguesma in the certification election case. Private finding character, in which the investigating agency plays the part of a disinterested
respondents then appealed to the NLRC, which affirmed the LA decision. Not investigator seeking merely to ascertain the desires of the employees as to the matter
satisfied with the decision of the NLRC, private respondents appealed to the Court of of their representation. The appellate court properly noted that the issue as to
Appeals. The appellate court reversed the decision of the NLRC and held that SSI is whether private respondents were illegally dismissed, which was resolved in the
the direct employer of private respondents. Petitioners filed a motion for affrmative by the LA, was not appealed by petitioners. Such ruling has therefore
reconsideration, but the same was denied for lack of merit. Hence, the present attained finality. Thus, petitioner SSI, as the direct employer of private respondents,
appeal. was liable to either reinstate them or pay them backwages or separation pay.
However, because there was not enough evidence on this matter, there is a need to
Issue: remand the case to the Labor Arbiter for further proceedings.
WON CA erred in applying this Court's pronouncement in Manila Golf &
Country Club vs. Intermediate Appellate Court that a decision in a certification
election case regarding the existence of an employer-employee relationship does not
foreclose all further dispute between the parties as to the existence or non-existence G.R. No. 95013. September 21, 1994 TRADE UNIONS OF THE
of such relationship. They contend that such pronouncement is obiter dictum since PHILS/FEBRUARY SIX MOVEMENT (TUPAS/FSM) v Laguesma
the issue involved therein was whether or not the persons rendering caddying
services for the golf club's members and their guests in the club's courses or premises COLLECTIVE BARGAINING AND ADMINISTRATION OF AGREEMENTS;
are employees of Manila Golf and Country Club and therefore within the TERMS OF COLLECTIVE BARGAINING AGREEMENT
compulsory coverage of the Social Security System, not the correctness of the Med- (ARTICLE 253-A, LABOR CODE) APPLIED IN CASE AT BAR. —
Arbiter's finding in the certification election case that no employer-employee
relationship existed between the golf club and the caddies. It is crystal clear from the records that the rank-and-file employees of
private respondent's Glassware Division are, at present, represented by ILO-PHILS.
Held: No. CA affirmed. Hence, petitioner's reliance on the March 22, 1990 Certification issued by Director
Bautista, Jr., is misplaced. The existence and filing of their CBA was confirmed in a
The Court of Appeals correctly applied the ruling in Manila Golf & Country Certification, dated April 24, 1990. The certification of ILO-PHILS. "as the sole and
Club vs. IAC that "however final it may become, the decision in a certi􀀼cation exclusive bargaining agent of the rank-and-file workers of Transunion-Glassware
election case, by the very nature of such proceeding, is not such as to foreclose all Division," means it shall remain as such during the existence of the CBA, to the
further dispute as to the existence, or non-existence of an employer-employee exclusion of other labor organizations, including petitioner, and no petition
relationship" between SSI and private respondents herein. questioning the majority status of the incumbent bargaining agent shall be
43
entertained, nor shall certification election be conducted, outside of the sixty-day G.R. No. 82341. December 6, 1989 SUNDOWNER Dev Corp v Drilon
freedom period immediately before the expiry date of the five-year term of the CBA.
EMPLOYMENT CONTRACTS AND COLLECTIVE BARGAINING
AGREEMENTS; NOT ENFORCEABLE AGAINST A TRANSFEREE OF AN
REGISTRY OF UNIONS AND FILE OF COLLECTIVE AGREEMENTS; ENTERPRISE. —
OFFICIAL FUNCTIONS PRESUMED REGULARLY PERFORMED.—
The rule is that unless expressly assumed, labor contracts such as
Petitioner points out that the subject CBA was filed beyond the 30-day employment contracts and collective bargaining agreements are not enforceable
period prescribed under Article 231 of the Labor Code. It appears that the procedural against a transferee of an enterprise, labor contracts being in personam, thus binding
requirement of filing the CBA within 30 days from date of execution under Article only between the parties. A labor contract merely creates an action in personam and
231 was not met. The subject CBA was executed on November 28, 1989. It was does not create any real right which should be respected by third parties. This
ratified on December 8, 1989, and then 􀀼led with DOLE for registration purposes on conclusion draws its force from the right of an employer to select his employees and
March 14, 1990. Be that as it may, the delay in the filing of the CBA was sufficiently to decide when to engage them as protected under our Constitution, and the same can
explained, i.e., there was an inter-union conflict on who would succeed to the only be restricted by law through the exercise of the police power.
presidency of ILO-PHILS. The CBA was registered by the DOLE only on May 4,
1990. It would be injudicious for us to assume, as what petitioner did, that the said
CBA was filed only on April 30, 1990, as 5 days before its registration, on the GENERAL RULE THAT BONA FIDE PURCHASER OF ASSETS OF AN
unsupported surmise that it was done to suit the law that enjoins Regional Offices of ONGOING CONCERN NOT REQUIRED TO ABSORB EMPLOYEES OF THE
DOLE to act upon an application for registration of a CBA within 5 days from its LATTER; EXCEPTION. —
receipt thereof. In the absence of any substantial evidence that DOLE officials or
personnel, in collusion with private respondent, had antedated the filing date of the As a general rule, there is no law requiring a bona 􀀼de purchaser of
CBA, the presumption on regularity in the performance of official functions holds. assets of an on-going concern to absorb in its employ the employees of the latter.
COLLECTIVE BARGAINING AGREEMENT; IMPORTANCE. — However, although the purchaser of the assets or enterprise is not legally bound to
absorb in its employ the employers of the seller of such assets or enterprise, the
Noncompliance with the procedural requirement of Article 231 should not parties are liable to the employees if the transaction between the parties is colored or
adversely affect the substantive validity of the CBA between ILO-PHILS and the clothed with bad faith. In the case at bar, contrary to the claim of the public
Transunion Corporation- Glassware Division covering the company's rank and file respondent that the transaction between petitioner and Mabuhay was attended with
employees. A CBA is more than a contract. It is highly impressed with public bad faith, the court finds no cogent basis for such contention. Thus, the absorption of
interest for it is an essential instrument to promote industrial peace. Hence, it bears the employees of Mabuhay may not be imposed on petitioner.
the blessings not only of the employer and employees concerned but even the DOLE.
To set it aside on technical grounds is not conducive to the public good.
G.R. No. L-24711. April 30, 1968 BENGUET CONSOLIDATED v

BCI EMPLOYEES & WORKERS UNION-PAFLU
44
"PRINCIPLE OF SUBSTITUTION", MEANING OF. — G.R. Nos. 58768-70. December 29, 1989. LIBERTY FLOUR MILLS
EMPLOYEES v LIBERTY FLOUR MILLS
The principle of substitution, formulated by the National Labor Relations
Board, counterpart of our CIR, means that where there occurs a shift in employees' PRESIDENTIAL DECREE NO. 525; EMERGE ON ALLOWANCE; DEEMED
union allegiance after the execution of a collective bargaining contract with their ABSORBED BY THE WAGE INCREASE UNDER THE COLLECTIVE
employer, the employees can change their agent - the labor union, but the collective BARGAINING AGREEMENT; CASE AT BAR. —
bargaining contract which is still subsisting, continues to bind the employees up to
its expiration date. They may, however, bargain for the shortening of said expiration The Court holds that the emergency allowances are indeed absorbed by the
date. And the only consideration for the "substitutionary" doctrine is the employees' wage increases required by P.D. 525 are indeed absorbed by the wage increases
interest in the existing bargaining agreement; the agent's (Union's) interest never required under the Section 2 of the CBA. This is because Section 6 of the
enters into the picture. Interpretative Bulletin on LOI No. 174 specifically provides: Sec. 6. Allowances
under LOI . — All allowances, bonuses, wage adjustments and other benefits given
UNDER "SUBSTITUTIONARY DOCTRINE", EMPLOYEES CANNOT RENEGE by employers to their employees shall be treated by the DOLE as in substantial
ON THEIR COLLECTIVE BARGAINING CONTRACT; EXCEPTION. — compliance with the minimum standards set forth in LOI No. 174 if: (a) they
conform with at least the minimum allowances scales specified in the immediately
The "Substitutionary doctrine" provides that the employees cannot revoke preceding Section ; and (b) they are given in response to the appeal of the President
the validly executed collective bargaining contract with their employer by the simple in his speech on 4 January 1974, or to countervail the quantum jump in the cost of
expedient of changing their bargaining agent. The new agent must respect the living as a result of the energy crisis starting in November 1973, or pursuant to
contract. The employees, thru their new bargaining agent, cannot renege on the Presidential Decree No. 390; Provided, That the payment is retroactive to 18
collective bargaining contract, except to negotiate with management for the February 1974 or earlier. The allowances and other benefits may be granted
shortening thereof. unilaterally by the employer or through collective bargaining, and may be paid at the
same time as the regular wages of the employees. Allowances and other benefits
NEW COLLECTIVE BARGAINING AGENT DOES NOT AUTOMATICALLY which are not given in substantial compliance with the LOI as interpreted herein
ASSUME ALL PERSONAL UNDERTAKINGS OF DEPOSED UNION; shall not be treated by the DOLE as emergency allowances in the contemplation of
SUBSTITUTIONARY DOCTRINE, HELD INAPPLICABLE. — the LOI unless otherwise shown by sufficient proof. Thus, without such proof,
escalation clauses in collective bargaining agreements concluded before the appeal
The "Substitutionary doctrine" cannot be invoked to support the claim that a of the President providing for automatic or periodic wage increases shall not be
newly certified collective bargaining agent automatically assumes all personal considered allowances for purposes of the LOI.
undertakings, such as the no-strike stipulation in this case, assumed by the deposed
union. When the BBWU bound itself and its officers not to strike, it could not bind SECTION 5 OF ITS IMPLEMENTING RULES INTERPRETED. —
all the rival unions because the BBWU was the agent only of the employees, not of
the other unions which possess distinct personalities. The petitioners contend that the wage increases were the result of
negotiation undertaken long before the promulgation of P.D. No. 525 and so should
not be considered part of the emergency allowance decreed. In support of this
contention, they cite Section 15 of the Rules implementing P.D. No. 525, providing
as follows: Nothing herein shall prevent the employer and his employees, from
entering into any agreement with terms more favorable to the employees than those
provided herein, or be construed to sanction the diminution of any benefits granted to
the employees under existing laws, agreements, and voluntary practice. Obviously,
this section should not be read in isolation but must be related to the other sections
45
above-quoted, to give effect to the intent and spirit of the decree. The meaning of the self-organization, collective bargaining and negotiations and peaceful concerted
section simply is that any benefit over and above the prescribed allowances may still actions including the right to strike in accordance with law." There is no question
be agreed upon by the employees and the employer or, if already granted, may no that these purposes could be thwarted if every worker were to choose to go his own
longer be withdrawn or diminished. separate way instead of joining his co-employees in planning collective action and
presenting a united front when they sit down to bargain with their employers. It is for
COLLECTIVE BARGAINING AGREEMENTS; ENFORCES REGARDLESS OF this reason that the law has sanctioned stipulations for the union shop and the closed
ABSENCE OF CERTIFICATION BY THE BUREAU OF LABOR RELATIONS. shop as a means of encouraging the workers to join and support the labor union of
— their own choice as their representative in the negotiation of their demands and the
protection of their interest vis-a-vis the employer.
In its challenged decision, the public respondent held that in demanding the
dismissal of Evaristo and Biascan, PLAC had acted prematurely because the 1974
CBA providing for union shop and pursuant to which the two petitioners were
dismissed had not yet been certi􀀼ed. The implication is that it was not yet in effect G.R. No. 102636. September 10, 1993 METROPOLITAN BANK & TRUST
and so could not be the basis of the action taken against the two petitioners. This COMPANY EMPLOYEES UNIONALU- TUCP v NLRC
conclusion is erroneous. It disregards the ruling of this Court in Tanduay Distillery
Labor Union v. NLRC, were we held: The fact, therefore, that the BLR failed to "WAGE DISTORTION," DEFINED. —
certify or act on TDLU's request for certification of the CBA in question is of no
moment to the resolution of the issues presented in this case. The BLR itself found in The term "wage distortion", under the Rules Implementing Republic Act
its order of July 8, 1982, that the "uncertified CBA was duly 􀀼led and submitted on 6727, is defined, thus: "(p) Wage Distortion means a situation where an increase in
October 29, 1980, to last until June 30, 1982 is certifiable for having complied with prescribed wage rates results in the elimination or severe contraction of intentional
all the requirements for certification." The CBA concluded in 1974 was certifiable quantitative differences in wage or salary rates between and among employee groups
and was in fact certified on April 11, 1975. It bears stressing that Evaristo and in an establishment as to effectively obliterate the distinctions embodied in such
Biascan were dismissed only on May 20, 1975, more than a month after the said wage structure based on skills, length of service, or other logical bases of
certification. The correct view is that expressed by Commissioner Cecilio P. Seno in differentiation."
his concurring and dissenting opinion, viz.: . . . Evidence on record show that after
the cancellation of the registration certificate of the Federation of Democratic Labor
Unions, no other union contested the exclusive representation of the Philippine The "intentional quantitative differences" in wage among employees of the
Labor Alliance Council (PLAC), consequently, there was no more legal impediment bank has been set by the CBA to about P900 per month as of 01 January 1989. It is
that stood on the way as to the validity and enforceability of the provisions of the intentional as it has been arrived at through the collective bargaining process to
CBA entered into by and between respondent corporation and respondent union. The which the parties are thereby concluded. The Solicitor General, in recommending the
certification of the collective bargaining agreement by the BLR is not required to put grant of due course to the petition, has correctly emphasized that the intention of the
a stamp of validity to such contract. Once it is duly entered into and signed by the parties, whether the benefits under a collective bargaining agreement should be
parties, a collective bargaining agreement becomes effective as between the parties equated with those granted by law or not, unless there are compelling reasons
regardless of whether or not the same has been certified by the BLR. otherwise, must prevail and be given effect.
POLICY OF THE STATE TO PROMOTE UNIONISM EXPLAINED. — In keeping then with the intendment of the law and the agreement of the
parties themselves, along with the often repeated rule that all doubts in the
It is the policy of the State to promote unionism to enable the workers to interpretation and implementation of labor laws should be resolved in favor of labor,
negotiate with management on the same level and with more persuasiveness than if we must approximate an acceptable quantitative difference between and among the
they were to individually and independently bargain for the improvement of their CBA agreed work levels. We, however, do not subscribe to the labor arbiter's
respective conditions. To this end, the Constitution guarantees to them the rights "to exacting prescription in correcting the wage distortion. Like the majority of the
46
members of the NLRC, we are also of the view that giving the employees an across- CBA is proof enough that private respondent exerted "reasonable effort at good faith
the-board increase of P750 may not be conducive to the policy of encouraging bargaining.
"employers to grant wage and allowance increases to their employees higher than the
minimum rates of increases prescribed by statute or administrative regulation,"
particularly in this case where both RA 6727 and the CBA allow a credit for
voluntary compliance. We 􀀼nd the formula suggested then by Commissioner Bonto-
Perez, which has also been the standard considered by the Regional Tripartite Wages
and Productivity Commission for the correction of pay scale structures in cases of
wage distortion, to well be the appropriate measure to balance the respective
contentions of the parties in this instance. We also view it as being just and equitable. G.R. No. L-38258. November 19, 1982. LAKAS NG
G.R. No. 113856 September 7, 1998 SAMAHANG MANGGAGAWA SA MANGGAGAWANG MAKABAYAN v MARCELO ENTERPRISES
TOP FORM MANUFACTURING UNITED WORKERS OF THE
PHILIPPINES (SMTFM-UWP) v NLRC CERTIFICATION ELECTION; INDISPENSABLE WHERE THE ISSUE OF
LEGITIMATE REPRESENTATION IS VIED BY TWO OR MORE LABOR
There’s no wage distortion here nibba. ORGANIZATIONS; CASE AT BAR.—
WHERE A PROPOSAL RAISED BY A CONTRACTING PARTY DOES NOT Where the issue of legitimate representation in dispute is vied for not only
FIND PRINT IN THE COLLECTIVE BARGAINING AGREEMENT, IT IS NOT by one legitimate labor organization but two or more, there is every equitable ground
A PART THEREOF AND THE PROPONENT HAS NO CLAIM WHATSOEVER warranting the holding of a certi􀀼cation election. In this way, the issue as to who is
TO ITS IMPLEMENTATION; CASE AT BAR. — really the true bargaining representative of all the employees maybe 􀀼rmly settled
by the simple expedient of an election." The cited case gives the reason for the need
The CBA is the law between the contracting parties — the collective of determining once and for all the true choice of membership as to who should be
bargaining representative and the employer-company. Compliance with a CBA is their bargaining representative, which is that, "(E)xperience teaches us one of the
mandated by the expressed policy to give protection to labor. In the same vein, CBA root causes of labor or industrial disputes is the problem arising from a questionable
provisions should be "construed liberally rather than narrowly and technically, and bargaining representative entering into CBA concerning terms and conditions of
the courts must place a practical and realistic construction upon it, giving due employment."
consideration to the context in which it is negotiated and purpose which it is intended
to serve." This is founded on the dictum that a CBA is not an ordinary contract but COLLECTIVE BARGAINING EMPLOYER'S RIGHT TO DEMAND OF THE
one impressed with public interest. It goes without saying, however, that only ASSERTED BARGAINING AGENT PROOF OF ITS REPRESENTATIONS OF
provisions embodied in the CBA should be so interpreted and complied with. Where ITS EMPLOYEES. —
a proposal raised by a contracting party does not And print in the CBA, it is not a
part thereof and the proponent has no claim whatsoever to its implementation. Respecting the issue of representation and the right of the employer to
demand reasonable proof of majority representation on the part of the supposed or
EXECUTION OF COLLECTIVE BARGAINING AGREEMENT IS PROOF OF putative bargaining agent, the commentaries in Rothenberg on Labor Relations, pp.
GOOD FAITH BARGAINING; CASE AT BAR. — 429- 431 are forceful and persuasive, thus : "It is essential to the right of a putative
bargaining agent to represent the employees that it be the delegate of a majority of
With the execution of the CBA, bad faith bargaining can no longer be imputed upon the employees and, conversely, an employer is under duty to bargain collectively
any of the parties thereto. All provisions in the CBA are supposed to have been only when the bargaining agent is representative of the majority of the employees. A
jointly and voluntarily incorporated therein by the parties. This is not a case where natural consequences of these principles is that the employer has the right to demand
private respondent exhibited an indifferent attitude towards collective bargaining of the asserted bargaining agent proof of its representation of its employees. Having
because the negotiations were not the unilateral activity of petitioner union. The the right to demonstration of this fact, it is not an 'unfair labor practice' for an
47
employer to refuse to negotiate until the asserted bargaining agent has presented It is the settled jurisprudence that it is an unfair labor practice for an
reasonable proof of majority representation. It is necessary however that such employer not to reinstate, or re-employment to, members of union who abandon their
demand be made in good faith and not merely as a pretext or device for delay or strike and make unconditional offer to return to work. Exhibit "B" presents an
evasion. The employer's right is however to reasonable proof. . . . Although an unconditional offer of the striking employees to return to work under the same terms
employer has the undoubted right to bargain with a bargaining agent whose authority and conditions of employment before the strike. We find as a fact that the respondent
has been established, without the requirement that the bargaining agent be officially Marcelo Companies did not refuse to reinstate or re-employ the strikers, as a
certified by the National Labor Relations Board as such, if the informally presented consequence of which We overrule the finding of unfair labor practice against said
evidence leaves a real doubt as to the issue, the employer has a right to demand a companies based on the erroneous conclusion of the respondent court. It is clear
certification and to refuse to negotiate until such official certification is presented. from the records that even before the unconditional offer to return to work contained
in Exhibit "B" was made, the respondent Marcelo Companies had already posted
CONCERTED ACTIVITIES EXECUTED AND CARRIED INTO EFFECT AT notices for the strikers to return back to work. It is true that upon their return, the
THE INSTIGATION AND MOTIVATION OF A LABOR ORGANIZATION NOT striker were required to fill up a form (Exhibit "49") wherein they were to indicate
A BARGAINING AGENT CONSTITUTE A VIOLATION OF EMPLOYER'S the date of their availability for work. But We are more impressed and are persuaded
BASIC RIGHT TO BARGAIN COLLECTIVELY; CASE AT BAR. — to accept as true the contention of the respondent Marcelo Companies that the
aforestated requirement was only for purposes of proper scheduling of the start of
The clear facts of the case as hereinbefore restated indisputably show that a work for each returning striker. It must be noted that as a consequences of the two
legitimate representation issue confronted the respondent Marcelo Companies. In the strikes which were both attended by widespread acts of violence and vandalism, the
face of these facts and in conformity with the existing jurisprudence, We hold that businesses of the respondent companies were completely paralyzed. It would hardly
there existed on duty to bargain collectively with the complainant LAKAS on the be justiciable to demand of the respondent companies to readmit all the returning
part of said companies. And proceeding from this basis, it follows that all acts workers in one big force or as each demanded readmission. There were machines
instigated by complainant LAKAS such as the filing of the Notice of Strike on June that were not in operating condition because of long disuse during the strikes. Some
13, 1967 (although later withdrawn) and the two strikes of September 4, 1967 and of the machines needed more than one worker to operate them so that in the absence
November 7, 1967 were calculated, designed and intended to compel the respondent of the needed team of workers, the start of work by one without his teammates would
Marcelo Companies to recognize or bargain with it notwithstanding that it was an necessarily be useless, and the company would be paying for his time spent doing no
uncertified union, or in the case of respondent Marcelo Tire and Rubber Corporation, work. Finally, We take judicial cognizance of the fact that companies whose
to bargain with it despite the fact that the MUEWA of Paulino Lazaro was already businesses were completely paralyzed by major strikes cannot resume operations at
certified as the sole bargaining agent in said respondent company. These concerted once and in the same state or force as before the strikes. But what strikes Us most in
activities executed and carried into effect at the instigation and motivation of lending credence to respondents' allegation that Exhibit "49" was not meant to screen
LAKAS are all illegal and violative of the employer's basic right to bargain the strikers, is the fact that all of the returning strikers who filled up the form were
collectively only with the representative supported by the majority of its employees scheduled for work and consequently started with their jobs. It is only those strikers
in each of the bargaining units. This Court is not unaware of the present predicament who refused or failed to fill-up the required form, like the herein complaining
of the employees involved but much as We sympathize with those who have been employees, who were not scheduled for work and consequently have not been re-
misled and so lost their jobs through hasty, ill-advised and precipitate moves, We employed by the respondent Marcelo Companies. Even if there was a sincere belief
rule that the facts neither substantiate nor support the finding that the respondent on their part that the requirement
Marcelo Companies are guilty of unfair labor practice. of Exhibit "49" was a ruse at "screening" them is, this fear would have been dispelled
upon notice of the fact that each and all of their co-strikers who filled up the required
form were in fact scheduled for work and started to work. The stoppage of their work
UNFAIR LABOR PRACTICE; REQUIREMENT TO FILL UP A FORM FOR was not, therefore, the direct consequence of the respondent companies' complained
SCHEDULING, NOT A REFUSAL TO REINSTATE OR RE-EMPLOY act. Hence, their economic loss should not be shifted to the employer. In the light of
STRIKERS; CASE AT BAR. — the above ruling and taking the facts and circumstances of the case before Us in
relation to the requirement by the respondent companies in the filling up of Exhibit
48
"49", We hold and rule that the requirement was an act of self- preservation, demands shows that she did not refuse to bargain collectively with the complaining
designed to effect costsavings union.
as well as to insure peace and order within their premises. Accordingly, the petition
in G.R. No. L-38258 should be dismissed, it having failed to prove, substantiate and We can hardly dispute this finding, for it finds support in the evidence. The
justify the unfair labor practice charges against the respondent Marcelo Companies. inference that respondents did not refuse to bargain collectively with the complaining
union because they accepted some of the demands while they refused the others even
leaving open other demands for future discussion is correct, especially so when those
WORKER'S RIGHT TO SELF-ORGANIZATION; SUBJECT TO EMPLOYER'S demands were discussed at a meeting called by respondents themselves precisely in
FREEDOM TO ENFORCE RULES AND ORDERS NECESSARY TO THE view of the letter sent by the union on April 29, 1960. It is true that under Section 14
PROPER CONDUCT OF HIS BUSINESS. — of Republic Act 875 whenever a party serves a written notice upon the employer
making some demands the latter shall reply thereto not later than 10 days from
It was never the state policy nor Our judicial pronouncement that the receipt thereof, but this condition is merely procedural, and as much its non-
employees' rights to self-organization and to engage in concerted activities for compliance cannot be deemed to be an act of unfair labor practice. The fact is that
mutual aid and protection, are absolute or be upheld under all circumstances. The respondents did not
protection of workers' right to self-organization in no way interfere with employer's ignore the letter sent by the union so much so that they called a meeting to discuss its
freedom to enforce such rules and orders as are necessary to proper conduct of his demands, as already stated elsewhere.
businesses, so long as employer's supervision is not for the purpose of intimidating
or coercing his employees with respect to their self-organization and representation. It is contended that respondents refused to bargain with the complaining
It is the functions of the court to see that the rights of self-organization and collective union as such even if they called a meeting of its officers and employees hereby
bargaining guaranteed by the Act are amply secured to the employee, but in its effort concluding that they did not desire to enter into a bargaining agreement with said
to prevent the prescribed unfair labor practice, the court must be mindful of the union. This conclusion has no rational relation with the main premise of the union
welfare of the honest employer. for it is belied by the fact that respondents did actually agree and bargain with the
representatives of the union. While it is true that respondents denied the capacity of
the complaining union to bargain collectively with the respondents this is because
they were of the impression that before a union could have that capacity it must first
be certified by the CIR as the duly authorized bargaining unit, as in fact this is what
they stated in their answer to the petition for certification filed by said union before
the CIR. In said case, another union known as the International Labor and Marine
Union of the Philippines claimed to represent the majority of the employees of
respondent restaurant, and this is what it alleged in a letter sent to the manager of
G.R. No. L-20044. April 30, 1964. NATIONAL UNION OF respondents dated May 25, 1962.
RESTAURANT WORKERS (PTUC) v CIR
There appears certain marks, opposite each demand, such as a check for
those demands to which Mrs. Felisa Herrera was agreeable, a cross signifying the
disapproval of Mrs. Herrera, and a circle regarding those demands which were left Kiok Loy v. National Labor Relations Commission,
open for discussion on some future occasion that the parties may deem convenient. G.R. No. L-54334, January 22, 1986, 225 PHIL 138-147
Such markings were made during the discussion of the demands in the meeting
called by respondents on May 3, 1960 at their restaurant in Quezon City. The court a Unfair labor practice is committed when it is shown that the respondent
quo concluded that the fact that respondent Herrera had agreed to some of the employer, after having been served with a written bargaining proposal by the
petitioning Union, did not even bother to submit an answer or reply to the said
49
proposal. While the law does not compel the parties to reach an agreement, it does years, before the amendment of the law as far as the representation aspect is
contemplate that both parties will approach the negotiation with an open mind and concerned. All other provisions of the CBA shall be negotiated not later than 3 years
make a reasonable effort to reach a common ground of agreement. after its execution. The "representation aspect" refers to the identity and majority
status of the union that negotiated the CBA as the exclusive bargaining
Neither are WE persuaded by petitioner-company's stand that the Collective representative of the appropriate bargaining unit concerned. "All other provisions"
Bargaining Agreement which was approved and adopted by the NLRC is a total simply refers to the rest of the CBA, economic as well as non-economic provisions,
nullity for it lacks the company's consent, much less its argument that once the except representation.
Collective Bargaining Agreement is implemented, the Company will face the
prospect of closing down because it has to pay a staggering amount of economic ARTICLE 253-A OF THE LABOR CODE, CONSTRUED. —
benefits to the Union that will equal if not exceed its capital. Such a stand and the
evidence in support thereof should have been presented before the Labor Arbiter The framers of the law wanted to maintain industrial peace and stability by
which is the proper forum for the purpose. having both management and labor work harmoniously together without any
disturbance. Thus, no outside union can enter the establishment within 5 years and
We agree with the pronouncement that it is not obligatory upon either side challenge the status of the incumbent union as the exclusive bargaining agent.
of a labor controversy to precipitately accept or agree to the proposals of the other. Likewise, the terms and conditions of employment economic and non-economic)
But an erring party should not be tolerated and allowed with impunity to resort to cannot be questioned by the employers or employees during the period of effectivity
schemes feigning negotiations by going through empty gestures. More so, as in the of the CBA. The CBA is a contract between the parties and the parties must respect
instant case, where the intervention of the National Labor Relations Commission was the terms and conditions of the agreement. Notably, the framers of the law did not
properly sought for after conciliation efforts undertaken by the BLR failed. The give a fixed term as to the effectivity of the terms and conditions of employment. It
instant case being a certified one, it must be resolved by the NLRC pursuant to the can be gleaned from their discussions that it was left to the parties to fix the period.
mandate of P.D. 873, as amended, which authorizes the said body to determine the
reasonableness of the terms and conditions of employment embodied in any COLLECTIVE BARGAINING AGREEMENT; TERM OF NON-
Collective Bargaining Agreement. To that extent, utmost deference to its findings of REPRESENTATION PROVISION IS THREE YEARS. —
reasonableness of any Collective Bargaining Agreement as the governing agreement
by the employees and management must be accorded due respect by this Court. The issue as to the term of non-representation provisions of the CBA need
not belabored especially when we take note of the Memorandum of the Secretary of
Labor dated February 24, 1994 which was mentioned in the Resolution of
Undersecretary Bienvenido Laguesma on January 16, 1995 in the certification
election case involving the SMC employees. In said memorandum, the Secretary of
Labor had occasion to clarify the term of the renegotiated terms of the CBA vis-a-vis
the term of the bargaining agent, to wit: As a matter of policy the parties are
encourages to enter into a renegotiated CBA with a term which would coincidde with
G.R. No. 111262. September 19, 1996 SAN MIGUEL CORPORATION the aforesaid 5 year term of the bargaining representative. In the event however, that
EMPLOYEES UNION-PTGWO v Confesor the parties, by mutual agreement, enter into a renegotiated contract with a term of 3
years or one which does not coincide with the said 5-year term, and said agreement
TERM OF REPRESENTATION ASPECT FIXED TO FIVE YEARS; ALL OTHER is ratified by majority of the members in the bargaining unit, the subject contract is
ASPECTS, THREE YEARS. — valid and legal and therefore, binds the contracting parties. The same will however
not adversely affect the right of another union to challenge the majority status of the
Article 253-A is a new provision. This was incorporated by Section 21 of incumbent bargaining agent within 60 days before the lapse of the original 5 year
Republic Act No. 6715 (the Herrera-Veloso Law) which took effect on March 21, term of the CBA. Thus, we do not find any grave abuse of discretion on the part of
1989. This new provision states that the CBA has a term of 5 years instead of 3
50
the Secretary of Labor in ruling that the effectivity of the renegotiated terms of the involved in the production of feeds and the processing of chicken. The nature of their
CBA shall be for 3 years. products and scales of business may require different skills which must necessarily
be commensurate by different compensation packages. The different companies may
OPERATING DIVISIONS OF THE COMPANY WHICH BECAME SEPARATE have different volumes of work and different working conditions. For such reason,
AND DISTINCT NO LONGER BELONG TO A SINGLE BARGAINING UNIT. the employees of the different companies see the need to group themselves together
— and organize themselves into distinctive and different groups. It would then be best
to have separate bargaining units for the different companies where the employees
Ever mindful of the employees' interests, management has assured the can bargain separately according to their needs and according to their own working
concerned employees that they will be absorbed by the new corporations without conditions.
loss of tenure and retaining their present pay and benefits according to the existing
CBAs. They were advised that upon the expiration of the CBAs, new agreements
will be negotiated between the management of the new corporations and the
bargaining representatives of the employees concerned. Indubitably, therefore,
Magnolia and SMFI became distinct entities with separate juridical personalities.
Thus, they can not belong to a single bargaining unit as held in the case of Diatagon
Labor Federation Local 110 of the ULGWP v. Ople. Petitioner-union's attempt to
include the employees of Magnolia and SMFI in the SMC bargaining unit so as to
have a bigger mass base of employees has, therefore, no more valid ground.
G.R. No. 91915. September 11, 1992
TEST IN DETERMINING APPROPRIATE BARGAINING UNIT. — DIVINE WORD UNIVERSITY OF TACLOBAN v Secretary
There are various factors which must be satisfied and considered in On the issue of whether or not a certification election should have been ordered by
determining the proper constituency of a bargaining unit. No one particular factor is the Secretary of Labor, pertinent are the following respective provisions of the Labor
itself decisive of the determination. The weight accorded to any particular factor Code and Rule V, Book V of the Implementing Rules and Regulations of the same
varies in accordance with the particular question or questions that may arise in a Code:
given case. What are these factors? Rothenberg mentions a good number, but the
most pertinent to our case are: (1) will of the employees (Globe Doctrine); (2) "ART. 258. When an employer may file petition. — When requested to bargain
affinity and unit of employees' interest, such as substantial similarity of work and collectively, an employer may petition the Bureau for an election. If there is no
duties, or similarity of compensation and working conditions; (3) prior collective existing certified collective bargaining agreement in the unit, the Bureau shall, after
bargaining history; and (4) employment status, such as temporary, seasonal and hearing, order a certification election.
probationary employees.
All certification cases shall be decided within twenty (20) working days.
In determining an appropriate bargaining unit, the test of grouping is
mutuality or commonality of interests. The employees sought to be represented by The Bureau shall conduct a certification election within twenty (20) days in
the collective bargaining agent must have substantial mutual interests in terms of accordance with the rules and regulations prescribed by the Secretary of Labor.
employment and working conditions as evinced by the type of work they performed.
Considering the spin-offs, the companies would consequently have their respective Sec. 3. When to file. — In the absence of a collective bargaining agreement duly
and distinctive concerns in terms of the nature of work, wages, hours of work and registered in accordance with Article 231 of the Code, a petition for certification
other conditions of employment. Interests of employees in the different companies election may be filed at any time. However, no certification election may be held
perforce differ. SMC is engaged in the business of beer manufacturing. Magnolia is within one year from the date of issuance of a final certification election result.
involved in the manufacturing and processing of dairy products while SMFI is Neither may a representation question be entertained if, before the filing of a petition
51
for certification election, a bargaining deadlock to which an incumbent or certified
bargaining agent is a party had been submitted to conciliation or arbitration or had "ART. 250. Procedure in collective bargaining. — The following procedures
become the subject of valid notice of strike or lockout. (Emphasis supplied) shall be observed in collective bargaining:chanrob1es virtual 1aw library
If a collective bargaining agreement has been duly registered in accordance with (a) When a party desires to negotiate an agreement, it shall serve a written
Article 231 of the Code, a petition for certification election or a motion for notice upon the other party with a statement of its proposals. The other party shall
intervention can only be entertained within sixty (60) days prior to the expiry date of make a reply thereto not later than ten (10) calendar days from receipt of such notice.
such agreement."
(b) Should differences arise on the basis of such notice and reply, either party
These provisions make it plain that in the absence of a collective bargaining may request for a conference which shall begin not later than ten (10) calendar days
agreement, an employer who is requested to bargain collectively may file a petition from the date of request.
for certification election any time except upon a clear showing that one of these two
instances exists: (a) the petition is filed within one year from the date of issuance of a (c) If the dispute is not settled, the Board shall intervene upon request of either
final certification election result or (b) when a bargaining deadlock had been or both parties or at its own initiative and immediately call the parties to conciliation
submitted to conciliation or arbitration or had become the subject of a valid notice of meetings. The Board shall have the power to issue subpoenas requiring the
strike or lockout. attendance of the parties to such meetings. It shall be the duty of the parties to
participate fully and promptly in the conciliation meetings the Board may call;
While there is no question that the petition for certification election was filed by the
herein petitioner after almost four years from the time of the certification election (d) During the conciliation proceedings in the Board, the parties are prohibited
and, therefore, there is no question as to the timeliness of the petition, the problem from doing any act which may disrupt or impede the early settlement of the disputes;
appears to lie in the fact that the Secretary of Labor had found that a bargaining and
deadlock exists.
(e) The Board shall exert all efforts to settle disputes amicably and encourage
A "deadlock" is defined as the "counteraction of things producing entire stoppage: a the parties to submit their case to a voluntary arbitrator."
state of inaction or of neutralization caused by the opposition of persons or of
factions (as in government or a voting body): standstill." There is a deadlock when Considering the procedure outlined above, the Court cannot help but notice that the
there is a "complete blocking or stoppage resulting from the action of equal and DWUEU was not entirely blameless in the matter of the delay in the bargaining
opposed forces; as, the deadlock of a jury or legislature. The word is synonymous process. While it is true that as early as March 7, 1985, said union had submitted its
with the word impasse which, within the meaning of the American federal labor collective bargaining proposals and that, its subsequent withdrawal by the DWUEU
laws, "presupposes reasonable effort at good faith bargaining which, despite noble Vice-President being unauthorized and therefore ineffective, the same proposals
intentions, does not conclude in agreement between the parties." could be considered as subsisting, the fact remains that said union remained passive
for three years. The records do not show that during this three-year period, it exerted
A thorough study of the records reveals that there was no "reasonable effort at good any effort to pursue collective bargaining as a means of attaining better terms of
faith bargaining" specially on the part of the University. Its indifferent attitude employment.
towards collective bargaining inevitably resulted in the failure of the parties to arrive
at an agreement. As it was evident that unilateral moves were being undertaken only It was only after its affiliation with the ALU that the same union, through the ALU
by the DWUEU-ALU, there was no "counteraction" of forces or an impasse to speak Director for Operations, requested an "initial conference" for the purpose of
of. While collective bargaining should be initiated by the union, there is a collective bargaining. That the DWUEU abandoned its collective bargaining
corresponding responsibility on the part of the employer to respond in some manner proposals prior to its affiliation with ALU is further confirmed by the fact that in the
to such acts. This is clear from the provisions of the Labor Code Art. 250(a) of which aforequoted May 10, 1988 agreement with the University, said Union bound itself to
states: submit a new set of proposals on May 13, 1988. Under the circumstances, the
52
agreement of May 10, 1988 may as well be considered the written notice to bargain
referred to in the aforequoted Art. 250(a) of the Labor Code, which thereby set into Hence, petitioner’s contention that the DWUEU-ALU’s proposals may not be
motion the machinery for collective bargaining, as in fact, on May 19, 1988, unilaterally imposed on it on the ground that a collective bargaining agreement is a
DWUEU-ALU submitted its collective bargaining proposals. contract wherein the consent of both parties is indispensable is devoid of merit. A
similar argument had already been disregarded in the case of Kiok Loy v. NLRC,
Be that as it may, the Court is not inclined to rule that there has been a deadlock or where we upheld the order of the NLRC declaring the union’s draft CBA proposal as
an impasse in the collective bargaining process. As the Court earlier observed, there the collective agreement which should govern the relationship between the parties.
has not been a "reasonable effort at good faith bargaining" on the part of the Kiok Loy v. NLRC is applicable in the instant case considering that the facts therein
University. While DWUEU-ALU was opening all possible avenues for the have also been indubitably established in this case. These factors are: (a) the union is
conclusion of an agreement, the record is replete with evidence on the University’s the duly certified bargaining agent; (b) it made a definite request to bargain and
reluctance and thinly disguised refusal to bargain with the duly certified bargaining submitted its collective bargaining proposals, and (c) the University made no counter
agent, such that the inescapable conclusion is that the University evidently had no proposal whatsoever. As we said in Kiok Loy," [a] company’s refusal to make
intention of bargaining with it. Thus, while the Court recognizes that technically, the counter proposal if considered in relation to the entire bargaining process, may
University has the right to file the petition for certification election as there was no indicate bad faith and this is especially true where the Union’s request for a counter
bargaining deadlock to speak of, to grant its prayer that the herein assailed Orders be proposal is left unanswered." Moreover, the Court added in the same case that "it is
annulled would put an unjustified premium on bad faith bargaining. not obligatory upon either side of a labor controversy to precipitately accept or agree
to the proposals of the other. But an erring party should not be tolerated and allowed
Bad faith on the part of the University is further exemplified by the fact that an hour with impunity to resort to schemes feigning negotiations by going through empty
before the start of the May 10, 1988 conference, it surreptitiously filed the petition gestures."
for certification election. And yet during said conference, it committed itself to "sit
down" with the Union. Obviously, the University tried to preempt the conference That being the case, the petitioner may not validly assert that its consent should be a
which would have legally foreclosed its right to file the petition for certification primordial consideration in the bargaining process. By its acts, no less than its
election. In so doing, the University failed to act in accordance with Art. 252 of the inaction which bespeak its insincerity, it has forfeited whatever rights it could have
Labor Code which defines the meaning of the duty to bargain collectively as "the asserted as an employer. We, therefore, find it superfluous to discuss the two other
performance of a mutual obligation to meet and convene promptly and expeditiously contentions in its petition.
in good faith." Moreover, by filing the petition for certification election while
agreeing to confer with the DWUEU-ALU, the University violated the mandate of
Art. 19 of the Civil Code that" (e)very person must, in the exercise of his rights and
in the performance of his duties, act with justice, give everyone his due, and observe G.R. No. 91231. February 4, 1991 NESTLE PHILIPPINES v NLRC
honesty and good faith."
COLLECTIVE BARGAINING AGREEMENT (CBA); INCLUSION OF RETIREMENT
Moreover, the University’s unscrupulous attitude towards the DWUEU-ALU is also PLAN IN THE CBA, GIVES A CONSENSUAL CHARACTER TO THE PLAN. —
betrayed by its belated questioning of the status of the said union. The The NLRC correctly observed that the inclusion of the retirement plan in the CBA
communications between them afforded the University ample opportunity to raise as part of the package of economic benefits extended by the company to its employees to
the issue of representation if indeed it was doubtful of the DWUEU-ALU’s status as provide them a measure of financial security after they shall have ceased to be employed in the
a majority union, but it failed to do so. On the other hand, in the agreement of May company, reward their loyalty, boost their morale and efficiency and promote industrial peace,
10, 1988, the University even agreed "to sit down and determine the number of gives "a consensual character" to the plan so that it may not be terminated or modified at will
employees that will represent their bargaining unit." This clearly indicates that the by either party.
University recognized the DWUEU-ALU as the bargaining representative of the
employees and is, therefore, estopped from questioning the majority status of the NON-CONTRIBUTORY OF RETIREMENT PLAN, DOES NOT MAKE IT A NON-ISSUE
said union. IN THE CBA NEGOTIATION. —
53
withheld from him (which, as a rule, is from the time of his illegal dismissal) up to
The fact that the retirement plan is non-contributory, i.e., that the employees contribute the time of his actual reinstatement.
nothing to the operation of the plan, does not make it a non-issue in the CBA negotiations. As
a matter of fact, almost all of the benefits that the petitioner has granted to its employees under Backwages to be awarded to an illegally dismissed employee, should not, as
the CBA — salary increases, rice allowances, midyear bonuses, 13th and 14th month pay,
seniority pay, medical and hospitalization plans, health and dental services, vacation, sick &
a general rule, be diminished or reduced by the earnings derived by him elsewhere
other leaves with pay — are non-contributory bene􀀼ts. Since the retirement plan has been an during the period of his illegal dismissal. The underlying reason for this ruling is that
integral part of the CBA since 1972, the Union's demand to increase the benefits due the the employee, while litigating the legality of his dismissal, must still earn a living to
employees under said plan, is a valid CBA issue. The deadlock between the company and the support himself and family, while full backwages have to be paid by the employer as
union on this issue was resolvable by the Secretary of Labor, or the NLRC, after the Secretary part of the price or penalty he has to pay for illegally dismissing his employee. The
had assumed jurisdiction over the labor dispute (Art. 263). clear legislative intent of the amendment in Rep. Act No. 6715 is to give more
benefits to workers than was previously given them under the Mercury Drug rule or
EMPLOYEES HAVE VESTED AND DEMANDABLE RIGHT OVER EXISTING the "deduction of earnings elsewhere" rule. Thus, a closer adherence to the
BENEFITS GRANTED BY EMPLOYER; NON-CONTRIBUTORY RETIREMENT PLAN, legislative policy behind Rep. Act No. 6715 points to "full backwages" as meaning
INCLUDED THEREIN. —
exactly that, i.e., without deducting from backwages the earnings derived elsewhere
The petitioner's contention, that employees have no vested or demandable right to a by the concerned employee during the period of his illegal dismissal. In other words,
non-contributory retirement plan, has no merit for employees do have a vested and the provision calling for "full backwages" to illegally dismissed employees is clear,
demandable right over existing benefits voluntarily granted to them by their employer. The plain and free from ambiguity and, therefore, must be applied without attempted or
latter may not unilaterally withdraw, eliminate or diminish such benefits. strained interpretation. Index animi sermo est.
G.R. No. 111651. November 28, 1996 OSMALIK BUSTAMANTE v NLRC G.R. No. 118651. October 16, 1997 PIONEER TEXTURIZING v NLRC
Facts: On 15 March 1996, the Court (First Division) promulgated a decision in this Facts: Private respondent Lourdes A. de Jesus is petitioner’s reviser/trimmer since
case, the dispositive part of which states: 1980. De Jesus received from petitioner’s personnel manager a memo requiring her
to explain why no disciplinary action should be taken against her for dishonesty and
"WHEREFORE, the resolution of the NLRC dated 3 May 1993 is modified tampering of official records and documents with the intention of cheating as P.O.
in that its deletion of the award for backwages in favor of petitioners, is No. 3853 allegedly required no trimming. The memo also placed her under
SET ASIDE. The decision of the LA dated 26 April 1991 is AFFIRMED preventive suspension for thirty days. In her handwritten explanation, de Jesus
with the modification that backwages shall be paid to petitioners from the maintained that she merely committed a mistake and admitted that she may have
time of their illegal dismissal on 25 June 1990 up to the date of their been negligent but not for dishonesty or tampering. Petitioner’s personnel
reinstatement. If reinstatement s no longer feasible, a one-month salary shall department, nonetheless, terminated her from employment and sent her a notice of
be paid the petitioners as ordered in the labor arbiter's decision, in addition termination dated September 18, 1992.
to the adjudged backwages.
On September 22, 1992, de Jesus filed a complaint for illegal dismissal
Issue: WON petitioners are entitled to recover backwages because they were not against petitioners. Petitioners insist that the NLRC gravely abused its discretion in
actually dismissed but their probationary employment was not converted to holding that de Jesus is entitled to reinstatement to her previous position for she was
permanent employment. not illegally dismissed in the first place. In support thereof, petitioners quote portions
of the NLRC decision which stated that petitioners cannot be entirely faulted for
Held: Yes. In accordance with the above provision, an illegally dismissed dismissing the complaint and that there was no illegal dismissal to speak of in the
employee is entitled to his full backwages from the time his compensation was case at bar.
54
requirements of Article 224 were to govern, as we so declared in Maranaw, then the
Issue: WON reinstatement and backwages are due. executory nature of a reinstatement order or award contemplated by Article 223 will
be unduly circumscribed and rendered ineffectual. In enacting the law, the legislature
Held: Yes. Gleaned either from the LA observations or from the NLRCs is presumed to have ordaineda valid and sensible law, one which operates no further
assessment, it distinctly appears that petitioners accusation of dishonesty and than may be necessary to achieve its specific purpose. Statutes, as a rule, are to be
tampering of official records and documents with intention of cheating against de construed in the light of the purpose to be achieved and the evil sought to be
Jesus was not substantiated by clear and convincing evidence. Petitioners simply remedied. And where statues are fairly susceptible of two or more construction, that
failed, both before the Labor Arbiter and the NLRC, to discharge the burdent of construction should be adopted which will most tend to give effect to the manifest
proof and to validly justify de Jesus dismissal from service. The law, in this light, intent of the law maker and promote the object for which the statute was enacted,
directs the employers, such as herein petitioners, not to terminate the services of an and a construction should be rejected which would tend to render abortive other
employee except for a just or authorized cause under the Labor Code.[8] Lack of a provisions of the statute and to defeat the object which the legislator sought to attain
just cause in the dismissal from service of an employee, as in this case, renders the by its enactment. In introducing a new rule on the reinstatement aspect of a labor
dismissal illegal, despite the employers observance of procedural due process.[9] decision under R.A. No. 6715, Congress should not be considered to be indulging in
And while the NLRC stated that there was no illegal dismissal to speak of in the case mere semantic exercise. On appeal, however, the appellate tribunal concerned may
at bar and that petitioners cannot be entirely faulted therefor, said statements are enjoin or suspend the reinstatement order in the exercise of its sound discretion.
inordinate pronouncements which did not remove the assailed dismissal from the
realm of illegality. Neither can these pronouncements preclude us from holding
otherwise.
Corollary to our determination that de Jesus was illegally dismissed is her

imperative entitlement to reinstatement and backwages as mandated by law.
Issue: WON order for reinstatement requires motion for execution. G.R. No. 74531 June 28, 1988 PIZZA INN v NLRC
Held: No. Article 224 states that the need for a writ of execution applies only Facts: Before the expiration of the 6-month probationary period, Felicidad
within 5 years from the date a decision, an order or awards becomes final and Fontanilla resigned. Claiming that she was forced to resign by the petitioner, the
executory. It cannot relate to an award or order of reinstatement still to be appealed former filed a complaint against the latter. Petitioner appealed from the decision of
or pending appeal which Article 223 contemplates. The provision of Article 223 is the LA favoring private respondent. Petitioner's appeal was dismissed by the NLRC.
clear that an award for reinstatement shall be immediately executory even pending The case was elevated to SC but also with no favorable result.
appeal and the posting of a bond by the employer shall not stay the execution for
reinstatement. Due to the finality of the judgment in this case, the LA issued a second alias
Writ of Execution dated September 8, 1984 against petitioner wherein the amount
The legislative content is quite obvious, i.e., to make an award of involved (representing backwages of private respondent among others, from April
reinstatement immediately enforceable, even pending appeal. To require the 24, 1982 to September 30, 1984) amounted to P29,001.00 as per computation of the
application for and issuance of a writ of execution as prerequisites for the execution Socio-Economic Analyst of the Commission. Petitioner filed a Motion to Recompute
of a reinstatement award would certainly betray and run counter to the very object and to quash/stay writ of execution, notice of garnishment under supersedeas bond
and intent of Article 223, i. e., the immediate execution of a reinstatement order. The on October 19, 1984.
reason is simple. An application for a writ of execution and its issuance could be
delayed for numerous reasons. A mere continuance or postponement of a scheduled Issue: May an employer be ordered to reinstate private respondent after the closure
hearing, for instance, or an inaction on the part of the Labor Arbiter or the NLRC of its branch or outlet where private respondent was employed, and to pay private
could easily delay the issuance of the writ thereby setting at naught the strict respondent back wages even after the date of closure and continuously without limit
mandate and noble purpose envisioned by Article 223. In other words, if the considering that there was no way to reinstate the workers anymore?
55
Strained relations must be of such a nature or degree as to preclude
Held: No. Reinstatement became a legal impossibility due to the fact that Pizza-In reinstatement. But, where the differences between the parties are neither personal nor
closed its business in 1984 due to financial losses. However, she is entitled to physical, nor serious, then there is no reason why the illegally dismissed employee
damages. should not be reinstated rather than simply given separation pay and backwages.
More so if the cause of the perceived 'strained relations' is the filing of a complaint
It is on record that the Socio-Economic Analyst of the public respondent for illegal dismissal.
computed that award of P29,001.00 covering the period from April, 1982 to
September, 1984, which amount complainant admittedly received after the NLRC Whatever resentments had been harbored by petitioner upon her
Sheriff garnished from the amount deposited at the Philippine Commercial and unceremonious dismissal after having been employed by St. Joseph School for more
International Bank despite the pendency of petitioner's appeal questioning the order than 16 years is understandable. Such resentments, however, would not suffice to
of the Labor Arbiter's denial of petitioner's Motion to Recompute and to Quash/Stay deny her reemployment because to do so would render for naught her constitutional
Writ of Execution/Notice of Garnishment under Supersedeas Bond. right to security of tenure and her corollary right to reinstatement under Article 279.
Petitioner is, after all, a permanent teacher as she had rendered more than three years
Computing backwages beyond January 1984, the date of closure, would not of satisfactory service.
only be unjust but confiscatory as well as violative of the Constitution depriving the
petitioner of his property rights. The unlimited award would not only prejudice the *Computing award for backwages
herein petitioner but would, as well, impose a crushing financial burden on the
already financially distressed petitioner corporation. The fact that the computation of Closely related to the right to reinstatement is the employee's right to
the backwages was done ex-parte without giving petitioner a chance or opportunity receive backwages which represent the compensation that an unjustly dismissed
to comment on said computation is clearly a denial of due process. employee should have received had said employee not be dismissed. Petitioner
claims that she is entitled to full backwages (computed from the date of dismissal
G.R. No. 101427 November 8, 1993 CONSUELO KUNTING v NLRC until actual reinstatement) under Article 279. This contention, however, is not
supported by prevailing jurisprudence which limits the award of backwages to 3
Facts: Consuelo B. Kunting was employed as a teacher by respondent St. Joseph years without qualification and deduction.
School in Gov. Camins Avenue, Zamboanga City. School did not renew her
employment contract for the school year 1988-89, thereby terminating her While RA 6715 amending Sec. 279 grants full backwages to dismissed
employment with the school. The termination letter was dated April 4, 1988. employees computed from the date of their illegal dismissal up to the date of actual
reinstatement, the same cannot be applied in the case at bar. This is because
The LA held that there was illegal dismissal and awarded separation pay in petitioner was illegally dismissed on April 4, 1988, or before the effectivity of R.A.
lieu of reinstatement due to strained relations. However, the NLRC modified the 6715 on March 21, 1989. In Lantion v. NLRC (181 SCRA 513 [1990]), We held that
grant of 6 months backwages and ordered instead the payment of backwages without nothing in R.A. 6715 provides for its retroactive application. Necessarily, awards of
qualification and deduction, computed from the date of promulgation of its decision. backwages in cases of illegal dismissal initiated before the effectivity of R.A. 6715
will have to be resolved by applying the three-year limit formulated in the case of
Issue: WON separation pay may be awarded in lieu of reinstatement. Mercury, Drug v. CIR.
Held: Not in this case. An illegally dismissed employee's right to reinstatement is

not absolute. In the case at bar, however, the peculiar circumstances surrounding the
dismissal of petitioner simply do not show such kind of strained relationship as to
warrant the severance of the working relationship between the parties.
56
only exacerbate the animosities that have developed between the parties, the public
respondents were correct in ordering instead the grant of separation pay to the
G.R. No. 114250 April 5, 1995 DOMINICO CONGSON v NLRC dismissed employees in the interest of industrial peace.
Facts: Petitioner is the registered owner of Southern Fishing Industry. Private

respondents were hired on various dates by petitioner’s as regular piece-rate workers.
They were uniformly paid at a rate of P1.00 per tuna weighing 30 to 80 kilos per
movement. During the first week of June 1990, petitioner notified his workers of his
proposal to reduce the rate-per-tuna movement due to the scarcity of tuna. Private
respondents resisted petitioner's proposed rate reduction. When they reported for
work the next day, they were informed that they had been replaced by a new set of
workers, When they requested for a dialogue with the management, they were
instructed to wait for further notice. They waited for the notice of dialogue for a full
week but in vain. They filed a case for constructive dismissal and separation pay. LA G.R. No. 152308. January 26, 2005 ACESITE CORPORATION v NLRC
ruled in favor of respondents.
Facts: Gonzales was a security guard. After exhausting his paid vacation and sick
Issue: WON separation pay may be awarded in lieu of reinstatement. leaves, he filed for an emergency leave which was not approved. However, he did
not report for work thus was asked to file a written letter requiring explanation. He
Held: Yes. . As a permissible exception to the general rule, separation pay may be explained that he was recovering from stomach disorder and needed to go home to
awarded to the employee in lieu of reinstatement, by reason of strained relationship Abra. On May 7, 1998, he received a letter (sent on May 5) requiring him to report
between the employer and employee. back to work. He reported on May 8 but was barred from entering the premises
because petitioner issued a termination letter through an inter-office memo.
Firstly, petitioner consistently refused to re-admit private respondents in his Issue: WON reinstatement should be made.
establishment. Petitioner even replaced private respondents with a new set of
workers to perform the tasks of private respondents; Moreover, although petitioner Held: No. In illegal dismissal cases, reinstatement to an illegally dismissed
ostensibly argued in his supplemental motion for reconsideration that reinstatement employees former position may be excused on the ground of strained relations. This
should have been the proper remedy in the case at bench on his premise that the may be invoked against employees whose positions demand trust and confidence, or
existence of strained relationship was not adequately established, yet petitioner never whose differences with their employer are of such nature or degree as to preclude
sincerely intended to effect the actual reinstatement of private respondents. For if reinstatement.
petitioner were to pursue further the entire logic of his argument, the prayer in his
supplemental motion for reconsideration should have contained not just the mere In the case at bar, Gonzales was Chief of Security, whose duty was to
deletion of the award of separation pay, but precisely, the reinstatement of private manage the operation of the security areas of the hotel to provide and ensure the
respondents. Quite obviously then, notwithstanding petitioner's argument for safety and security of the hotel guests, visitors, management, staff and their
reinstatement he was only interested in the deletion of the award of separation pay to properties according to company policies and local laws. It cannot be gainsaid that
private respondents. Gonzales position is one of trust and confidence, he being in charge of the over-all
security of said hotel. Thus, reinstatement is no longer possible. In lieu thereof,
And secondly, private respondents themselves, from the very start, had Acesite is liable to pay separation pay of 1 month for every year of service.
already indicated their aversion to their continued employment in petitioner's
establishment. The very filing of the case for separation pay. It appears that relations As to the award of moral and exemplary damages, this Court finds it
between the petitioner and the complainants have been so strained that the unwarranted. Moral damages are recoverable only where the dismissal of the
complainants are no longer willing to be reinstated. As such reinstatement would employees was attended by bad faith or fraud or constituted an act oppressive to
57
labor or was done in a manner contrary to morals, good customs or public policy. government must still perform its function and apply the law, especially if, as in this
Exemplary damages on the other hand may be awarded only if the dismissal was case, national interest is involved.
effected in a wanton, oppressive or malevolent manner. Though these grounds have
been alleged by Gonzales, they were not sufficiently proven. It is, therefore, evident from the foregoing that the Secretary’s subsequent
order for mere payroll reinstatement constitutes grave abuse of discretion amounting
to lack or excess of jurisdiction. Indeed, this Court has always recognized the "great
breadth of discretion" by the Secretary once he assumes jurisdiction over a labor
dispute. However, payroll reinstatement in lieu of actual reinstatement is a departure
from the rule in these cases and there must be showing of special circumstances
rendering actual reinstatement impracticable, as in the UST case aforementioned, or
otherwise not conducive to attaining the purpose of the law in providing for
assumption of jurisdiction by the Secretary of Labor and Employment in a labor
dispute that affects the national interest. None appears to have been established in
this case. Even in the exercise of his discretion under Article 236(g), the Secretary
must always keep in mind the purpose of the law. Time and again, this Court has
held that when an official by-passes the law on the asserted ground of attaining a
laudable objective, the same will not be maintained if the intendment or purpose of
the law would be defeated.
G.R. No. 140518 December 16, 2004

MANILA DIAMOND HOTEL EMPLOYEES’ UNION v CA G.R. No. 152329. April 22, 2003 ALEJANDRO ROQUERO v PAL
Facts: On November 29, 1997, the Union staged a strike against the Hotel. Facts: Petitioner was a mechanic for PAL. He got caught using shabu inside the
Numerous confrontations between the two parties followed, creating an obvious airport. On March 30, 1994, Roquero received a notice of administrative charge for
strain between them. The Hotel claims that the strike was illegal and it had to dismiss violating the PAL Code of Discipline. They were required to answer the charges and
some employees for their participation in the allegedly illegal concerted activity. The were placed under preventive suspension. Roquero in his reply to notice of
Union, on the other hand, accused the Hotel of illegally dismissing the workers. The administrative charge, assailed his arrest and asserted that he was instigated by PAL
secretary of labor ordered a payroll reinstatement but the hotel refused. to take the drugs. He argued that he was instigated by the airport manager. He based
his argument on the fact that the manager was not arrested even though they were
Issue: WON strained relations warrants payroll reinstatement. together at the time of the crime.
Held: No. A strained relationship between the striking employees and The NLRC ruled in favor of complainants as it likewise found PAL guilty
management is no reason for payroll reinstatement in lieu of actual reinstatement. of instigation. It ordered reinstatement to their former positions but without
Petitioner correctly points out that labor disputes naturally involve strained relations backwages. Complainants filed a motion for a writ of execution of the order of
between labor and management, and that in most strikes, the relations between the reinstatement. The LA granted the motion but PAL refused to execute the said order
strikers and the non-strikers will similarly be tense. Bitter labor disputes always on the ground that they have filed a Petition for Review before CA. CA reversed the
leave an aftermath of strong emotions and unpleasant situations. Nevertheless, the decision of the NLRC and upheld the dismissal of Roquero. However, it denied the
58
award of separation pay and attorneys fees to Roquero on the ground that one who Issue: Effect of dismissal for just cause but lack due process.
has been validly dismissed is not entitled to those benefits.
Held: As Assistant Vice-President of Citibanks Treasury Department, Genuino
Issue: WON order of reinstatement is immediately executor. was tasked to solicit investments, and peso and dollar deposits for, and keep them in
Citibank; and to sell and/or push for the sale of Citibanks financial products, such as
Held: Yes. The order of reinstatement is immediately executory. The unjustified the MBS, for the account and benefit of Citibank. She held a position of trust and
refusal of the employer to reinstate a dismissed employee entitles him to payment of confidence. There is no way she could deny any knowledge of the banks policies nor
his salaries effective from the time the employer failed to reinstate him despite the her understanding of these policies as reflected in the survey done by the bank. All
issuance of a writ of execution. Unless there is a restraining order issued, it is the pieces of evidence compel us to conclude that Genuino did not have her
ministerial upon the Labor Arbiter to implement the order of reinstatement. In the employers interest. All told, Citibank had valid grounds to dismiss Genuino on
case at bar, no restraining order was granted. Thus, it was mandatory on PAL to ground of loss of confidence. In view of Citibanks failure to observe due process,
actually reinstate Roquero or reinstate him in the payroll. Having failed to do so, however, nominal damages are in order but the amount is hereby raised to P30k
PAL must pay Roquero the salary he is entitled to, as if he was reinstated, from the pursuant to Agabon v. NLRC.
time of the decision of the NLRC until the finality of the decision of this Court.
If the decision of the LA is later reversed on appeal upon the finding that
IN VIEW WHEREOF, the dismissal of petitioner Roquero is AFFIRMED, the ground for dismissal is valid, then the employer has the right to require the
but respondent PAL is ordered to pay the wages to which Roquero is entitled from dismissed employee on payroll reinstatement to refund the salaries s/he received
the time the reinstatement order was issued until the finality of this decision. while the case was pending appeal, or it can be deducted from the accrued benefits
that the dismissed employee was entitled to receive from his/her employer under
existing laws, collective bargaining agreement provisions, and company practices.
However, if the employee was reinstated to work during the pendency of the appeal,
then the employee is entitled to the compensation received for actual services
rendered without need of refund.
MARILOU GENUINO v NLRC G.R. Nos. 142732-33 December 4, 2007 JUANITO GARCIA v PAL G.R. No. 164856 January 20, 2009
Facts: On August 23, 1993, Citibank sent Genuino (a treasurer) a letter charging Facts: The case stemmed from the administrative charge filed by PAL against its
her with knowledge and/or involvement in transactions which were irregular or even employees-herein petitioners after they were allegedly caught in the act of sniffing
fraudulent. In the same letter, Genuino was informed she was under preventive shabu when a team of company security personnel and law enforcers raided PAL.
suspension. On September 13, 1993, Citibank sent another letter demanding After due notice, PAL dismissed petitioners on October 9, 1995 for transgressing the
explanation in writing 3 days from her receipt hereof why her employment should PAL Code of Discipline, prompting them to file a complaint for illegal dismissal and
not be terminated in view of her involvement in irregular transactions. She was also damages which was, by Decision of January 11, 1999, resolved by the LA in their
directed to appear in an administrative investigation. Despite this, petitioner did not favor, thus ordering PAL to, inter alia, immediately comply with the reinstatement
appear nor submit a written explanation. Genuinos employment was terminated. aspect of the decision. During this time, PAL was placed under Permanent
Rehabilitation.
LA held that the dismissal was without just cause and failed to comply with
administrative due process. NLRC modified judgment holding the dismissal as valid CA reversed LA on 2 grounds: (1) a subsequent finding of a valid dismissal
but ordered Citibank to pay the salaries due to the complainant from the date it removes the basis for implementing the reinstatement aspect of LA decisio, and (2)
reinstated complainant in the payroll (computed at P60k a month, as found by the the impossibility to comply with the reinstatement order due to corporate
LA) up to and until the date of this decision. rehabilitation provides a reasonable justification for the failure to exercise the
options under Article 223.
59
installment by the employer. For in the event of a reversal of the Labor Arbiters
Issue: WON subsequent finding of valid dismissal render order of reinstatement decision ordering reinstatement, the employer gets back the same amount without
nugatory. having to spend ordinarily for bond premiums. This circumvents, if not directly
contradicts, the proscription that the posting of a bond [even a cash bond] by the
Held: No. The social justice principles of labor law outweigh or render employer shall not stay the execution for reinstatement.
inapplicable the civil law doctrine of unjust enrichment.
The rule to be followed is the 1st one. The Court reaffirms the prevailing
There are 2 views regarding this matter. The 1 st view is Even if the order of principle that even if the order of reinstatement of the Labor Arbiter is reversed on
reinstatement of the LA is reversed on appeal, it is obligatory on the part of the appeal, it is obligatory on the part of the employer to reinstate and pay the wages of
employer to reinstate and pay the wages of the dismissed employee during the period the dismissed employee during the period of appeal until reversal by the higher
of appeal until reversal by the higher court. On the other hand, if the employee has court. It settles the view that the Labor Arbiter's order of reinstatement is
been reinstated during the appeal period and such reinstatement order is reversed immediately executory and the employer has to either re-admit them to work under
with finality, the employee is not required to reimburse whatever salary he received the same terms and conditions prevailing prior to their dismissal, or to reinstate them
for he is entitled to such, more so if he actually rendered services during the period. in the payroll, and that failing to exercise the options in the alternative, employer
In other words, a dismissed employee whose case was favorably decided by the must pay the employee’s salaries
Labor Arbiter is entitled to receive wages pending appeal upon reinstatement, which
is immediately executory. Unless there is a restraining order, it is ministerial upon Issue: WON Rehabilitation bars reinstatement.
the Labor Arbiter to implement the order of reinstatement and it is mandatory on the
employer to comply therewith. Held: Yes. After the labor arbiters decision is reversed by a higher tribunal, the
employee may be barred from collecting the accrued wages, if it is shown that the
The 2nd view is espoused in the case of Genuino. If the decision of the labor delay in enforcing the reinstatement pending appeal was without fault on the part of
arbiter is later reversed on appeal upon the finding that the ground for dismissal is the employer.
valid, then the employer has the right to require the dismissed employee on payroll
reinstatement to refund the salaries s/he received while the case was pending appeal, The test is two-fold: (1) there must be actual delay or the fact that the order
or it can be deducted from the accrued benefits that the dismissed employee was of reinstatement pending appeal was not executed prior to its reversal; and (2) the
entitled to receive from his/her employer under existing laws, collective bargaining delay must not be due to the employers unjustified act or omission. If the delay is
agreement provisions, and company practices. However, if the employee was due to the employers unjustified refusal, the employer may still be required to pay
reinstated to work during the pendency of the appeal, then the employee is entitled to the salaries notwithstanding the reversal of the Labor Arbiters decision.
the compensation received for actual services rendered without need of refund.
It is settled that upon appointment by the SEC of a rehabilitation receiver,
Prior to Genuino, there had been no known similar case containing a all actions for claims before any court, tribunal or board against the corporation shall
dispositive portion where the employee was required to refund the salaries received ipso jure be suspended. As stated early on, during the pendency of petitioners
on payroll reinstatement. In fact, in a catena of cases, the Court did not order the complaint before the Labor Arbiter, the SEC placed respondent under an Interim
refund of salaries garnished or received by payroll-reinstated employees despite a Rehabilitation Receiver. After the Labor Arbiter rendered his decision, the SEC
subsequent reversal of the reinstatement order. The dearth of authority supporting replaced the Interim Rehabilitation Receiver with a Permanent Rehabilitation
Genuino is not difficult to fathom for it would otherwise render inutile the rationale Receiver.
of reinstatement pending appeal.
Case law recognizes that unless there is a restraining order, the
The Genuino ruling not only disregards the social justice principles behind implementation of the order of reinstatement is ministerial and mandatory. This
the rule, but also institutes a scheme unduly favorable to management. Under such injunction or suspension of claims by legislative fiat partakes of the nature of a
scheme, the salaries dispensed pendente lite merely serve as a bond posted in restraining order that constitutes a legal justification for respondents non-compliance
60
with the reinstatement order. Respondents failure to exercise the alternative options dismissal was performed. But while the Labor Code treats of the nature of, and the
of actual reinstatement and payroll reinstatement was thus justified. Such being the remedy available as regards the first — the employee's separation from employment
case, respondents obligation to pay the salaries pending appeal, as the normal effect — it does not at all deal with the second — the manner of that separation — which is
of the non-exercise of the options, did not attach. governed exclusively by the Civil Code. In addressing the first issue, the Labor
Arbiter applies the Labor Code; in addressing the second, the Civil Code. And this
In sum, the obligation to pay the employee’s salaries upon the employers appears to be the plain and patent intendment of the law. For apart from the reliefs
failure to exercise the alternative options under Article 223 of the Labor Code is not expressly set out in the Labor Code flowing from illegal dismissal from employment,
a hard and fast rule, considering the inherent constraints of corporate rehabilitation. no other damages may be awarded to an illegally dismissed employee other than
those specified by the Civil Code. Hence, the fact that the issue-of whether or not
moral or other damages were suffered by an employee and in the affirmative, the
amount that should properly be awarded to him in the circumstances-is determined
under the provisions of the Civil Code and not the Labor Code, obviously was not
meant to create a cause of action independent of that for illegal dismissal and thus
place the matter beyond the Labor Arbiter's jurisdiction.
Thus, an employee who has been illegally dismissed causing him to suffer
moral damages (as determined by the Civil Code), has a cause of action for
reinstatement and recovery of back wages and damages. When he institutes
proceedings before the Labor Arbiter, he should make a claim for all said reliefs. He
cannot be permitted to prosecute his claims piecemeal. He cannot institute
proceedings separately and contemporaneously in a court of justice upon the same
cause of action or a part thereof. He cannot and should not be allowed to sue in two
forums: one, before the Labor Arbiter for reinstatement and recovery of back wages,
G.R. No. 72644 December 14, 1987 ALFREDO PRIMERO v IAC or for separation pay, upon the theory that his dismissal was illegal; and two, before
a court of justice for recovery of moral and other damages, upon the theory that the
Facts: Since August 1, 1974, appellee's bus dispatcher did not assign any bus to be manner of his dismissal was unduly injurious, or tortious. This is what in procedural
driven by appellant Primero. No reason or cause was given by the dispatcher to law is known as splitting causes of action, engendering multiplicity of actions.
appellant for not assigning a bus to the latter for 23 days. On the 23rd day, appellant
was told to look for another job. He filed a case for illegal dismissal, and for It is against such mischiefs that the Labor Code amendments just discussed
recovery of back wages and reinstatement. Later on, he withdraw his case to file a are evidently directed, and it is such duplicity which the Rules of Court regard as
damage suit with a civil court. On August 11, 1980 the Trial Court rendered ground for abatement or dismissal of actions, constituting either litis pendentia (auter
judgment dismissing the complaint on the ground of lack of jurisdiction, for the action pendant) or res adjudicata, as the case may be. But this was precisely what
reason that at the time that the complaint was filed. on August 17, 1978, the law — Primero's counsel did. He split Primero's cause of action; and he made one of the
the Labor Code as amended by PD 1367, eff. May 1, 1978 — conferred exclusive, split parts the subject of a cause of action before a court of justice. Consequently, the
original jurisdiction over claims for moral or other damages, not on ordinary courts, judgment of the Labor Arbiter granting Primero separation pay operated as a bar to
but on Labor Arbiters. his subsequent action for the recovery of damages before the Court of First Instance
under the doctrine of res judicata, The rule is that the prior "judgment or order is,
Issue: WON Civil Courts may entertain suits for damages arising from EER. with respect to the matter directly adjudged or as to any other matter that could have
been raised in relation thereto, conclusive between the parties and their successors in
Held: No. It is clear that the question of the legality of the act of dismissal is interest by title subsequent to the commencement of the action or special proceeding,
intimately related to the issue of the legality of the manner by which that act of litigating for the same thing and under the same title and in the same capacity.
61
The legislative intent appears clear to allow recovery in proceedings before
LA of moral and other forms of damages, in all cases or matters arising from EER.
This would no doubt include, particularly, instances where an employee has been
unlawfully dismissed. In such a case, the LA has jurisdiction to award to the
dismissed employee not only the reliefs specifically provided by labor laws, but also
moral and other forms of damages governed by the Civil Code.
*Moral damages
Moral damages would be recoverable, for example, where the dismissal of

the employee was not only effected without authorized cause and /or due process for
G.R. No. 78345 September 21, 1990 JOSE M. MAGLUTAC v NLRC which relief is granted by the Labor Code but was attended by bad faith or fraud, or
constituted an act oppressive to labor, or was done in a manner contrary to morals
Facts: On October 3, 1984, Manager Maglutac received a notice of termination. good customs or public policy for which the obtainable relief is determined by the
The notice of termination reads: Civil Code (not the Labor Code). Stated otherwise, if the evidence adduced by the
employee before the Labor Arbiter should establish that the employer did indeed
You are hereby notified and advised that the Board of Directors of this terminate the employee's services without just cause or without according him due
Corporation, acting on the unanimous resolution, have decided that your process, the Labor Arbiter's judgment shall be for the employer to reinstate the
continued employment in this company, will not be in the best interest of employee and pay him his backwages or, exceptionally, for the employee simply to
the corporation. receive separation pay. These are reliefs explicitly prescribed by the Labor Code. But
any award of moral damages by the Labor Arbiter obviously cannot be based on the
The termination of your services is without prejudice to any future action, Labor Code but should be grounded on the Civil Code.
private or legal, that the Company may take to demand restitution, enforce
collection or require repayment of whatever financial obligations you now Moral damages may be awarded to compensate one for diverse injuries such
have incurred, to the company. as mental anguish, besmirched reputation, wounded feelings and social humiliation.
It is however not enough that such injuries have arisen; it is essential that they have
It turns out that the company lost trust and confidence on Maglutac because sprung from a wrongful act or omission of the defendant which was the proximate
his family established a company that directly competes with Commart. LA ruled cause thereof.
that there was illegal dismissal and Maglutac must be reinstated with full backwages.
The NLRC affirmed the finding of the Labor Arbiter that complainant was illegally *Exemplary damages
dismissed by Commart but it deleted the award for moral and exemplary damages in
favor of complainant and absolved Jesus T. Maglutac from any personal liability to The complainant was dismissed without due process. His dismissal was
the complainant. made effective immediately and he was not given an opportunity to present his side.
Where the employee's dismissal was effected without procedural fairness, an award
Issue: WON Maglutac is entitled to damages. of exemplary damages in her favor can only be justified if her dismissal was affected
in a wanton, oppressive or malevolent manner
Held: Yes. NLRC held that his dismissal was not merely without just cause but
was also an act of vendetta, malice attended the act thus, he is entitled to moral and We agree however, with the contention of the Solicitor General that the
exemplary damages under the Civil Code. award by the Labor Arbiter of P 200,000.00 moral damages and P20,000.00
exemplary damages is excessive, In the exercise of our discretion, We reduce the
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award of damages to P40,000.00 as moral damages and P10,000.00 as exemplary represented by petitioner in the labor dispute to acquire what they have not been
damages. receiving under the law and to alleviate their living condition, the reduction of
petitioner's contingent fee is proper. Labor cases, it should be stressed, call for
compassionate justice.
Furthermore, petitioner's contingent fee falls within the purview of Article

111 of the Labor Code. This article fixes the limit on the amount of attorney's fees
which a lawyer, like petitioner, may recover in any judicial or administrative
proceedings since the labor suit where he represented private respondents asked for
the claim and recovery of wages. In fact, We are not even precluded from fixing a
lower amount than the ten percent ceiling prescribed by the article when
circumstances warrant it. Nonetheless, considering the circumstances and the able
G.R. No. 118746 September 7, 1995 ATTY. TAGANAS v NLRC handling of the case, petitioner's fee need not be further reduced.
Facts: Petitioner Atty. Taganas represented herein private respondents in a labor *Rule if the client failed to dispute excessive contingent fee
suit conditioned upon a contingent fee arrangement granting the equivalent of 50%
of the judgment award plus three P300 appearance fee per hearing. The LA ruled in The contingent fee contract being unreasonable and unconscionable the
favor of private respondents. This decision was appealed by Ultra and PTSI to the same was correctly disallowed by public respondent NLRC even with respect to the
NLRC but to no avail. During the execution stage of the decision, petitioner moved four private respondents who agreed to pay higher percentage. Petitioner is reminded
to enforce his attorney's charging lien. Private respondents, aggrieved for receiving a that as a lawyer he is primarily an officer of the court charged with the duty of
reduced award due to the attorney's charging lien, contested the validity of the assisting the court in administering impartial justice between the parties. When he
contingent fee arrangement they have with petitioner. takes his oath, he submits himself to the authority of the court and subjects his
professional fees to judicial control.
Finding the arrangement excessive, the Labor Arbiter ordered the reduction G.R. No. 79907 March 16, 1989 SAMUEL CASAS LIM v NLRC
of petitioner's contingent fee from fifty percent of the judgment award to ten percent.
Facts: Respondent Victoria Calsado tried to resign from her position in Sweet
Issue: WON the reduction of petitioner's contingent fee is warranted. Lines but she was persuaded not to. Relations began to sour later, however, when she
repeatedly asked for payment of her commissions, which had accumulated and were
Held: Yes. A contingent fee arrangement is an agreement laid down in an express long overdue. She was terminated.
contract between a lawyer and a client in which the lawyer's professional fee, usually
a fixed percentage of what may be recovered in the action is made to depend upon Issue: WON separation pay must be awarded.
the success of the litigation. This arrangement is valid in this jurisdiction. It is,
however, under the supervision and scrutiny of the court to protect clients from Held: Yes. Separation pay is granted where reinstatement is no longer advisable
unjust charges. Section 13 of the Canons of Professional Ethics states that "a contract because of strained relations between the employee and the employer. Back wages
for a contingent fee, where sanctioned by law, should be reasonable under all the represent compensation that should have been earned but were not collected because
circumstances of the case including the risk and uncertainty of the compensation, but of the unjust dismissal. The bases for computing the two are different, the first being
should always be subject to the supervision of a court, as to its reasonableness" usually the length of the employee's service and the second the actual period when he
was unlawfully prevented from working.
The financial capacity and economic status of the client have to be taken
into account in fixing the reasonableness of the fee. Noting that petitioner's clients We have ordered the payment of both in proper case as otherwise the
were lowly janitors who receive miniscule salaries and that they were precisely employee might be deprived of benefits justly due him. Thus, if an employee who
63
has worked only one year is sustained by the labor court after three years from his to dismissal but may be allowed separation pay since his conduct, while inept, is not
unjust dismissal, granting him separation pay only would entitle him to only one depraved. But if he was in fact not really sleeping but sleeping with a prostitute
month salary. There is no reason why he should not also be paid three years back during his tour of duty and in the company premises, the situation is changed
wages corresponding to the period when he could not return to his work or could not completely. This is not only inefficiency but immorality and the grant of separation
find employment elsewhere. pay would be entirely unjustified.
*Separation pay as measure of social justice
Separation pay shall be allowed as a measure of social justice only in those

instances where the employee is validly dismissed for causes other than serious
misconduct or those reflecting on his moral character. Where the reason for the valid
dismissal is, for example, habitual intoxication or an offense involving moral
turpitude, like theft or illicit sexual relations with a fellow worker, the employer may
not be required to give the dismissed employee separation pay, or financial
assistance, or whatever other name it is called, on the ground of social justice.
G.R. No. 83234 April 18, 1989 OSIAS ACADEMY v DOLE
A contrary rule would, as the petitioner correctly argues, have the effect of
Facts: The award by the respondent Minister of Labor 1 of separation pay, on rewarding rather than punishing the erring employee for his offense. The policy of
grounds of equity, to two employees of petitioner Osias Academy despite the social justice is not intended to countenance wrongdoing simply because it is
avowedly correct grant of clearance to it to terminate the services of said employees committed by the underprivileged.
on the ground of loss of confidence based on a satisfactory showing of
embezzlement of company funds, serious misconduct, etc., is challenged in the
special civil action of certiorari at bar.
Issue: WON separation pay may be awarded. ALAN GUSTILO v WYETH PHILIPPINES
G.R. No. 149629 October 4, 2004
Held: No. There should be no question that where it comes to such valid but not
iniquitous causes as failure to comply with work standards, the grant of separation Facts: Gustilo was employed by Wyeth Philippines, Inc., respondent company, as
pay to the dismissed employee may be both just and compassionate, particularly if he a pharmaceutical territory manager. Petitioners employment records show that
has worked for some time with the company. It is not the employee's fault if he does respondent company, on various dates, reprimanded and suspended him for
not have the necessary aptitude for his work but on the other hand the company habitually neglecting to submit his periodic reports.
cannot be required to maintain him just the same at the expense of the efficiency of
its operations. He too may be validly replaced. Under these and similar Petitioner submitted to respondent company a plan of action where he
circumstances, however, the award to the employee of separation pay would be committed to make an average of 18 daily calls to physicians; submit promptly all
sustainable under the social justice policy even if the separation is for cause. periodic reports; and ensure 95% territory program performance for every cycle.
However, petitioner failed to achieve the above objectives, prompting respondent
But where the cause of the separation is more serious than mere company to send him 2 separate notices dated February 20, 1996 and April 10, 1996,
inefficiency, the generosity of the law must be more discerning. There is no doubt it charging him with willful violation of company rules and regulations and directing
is compassionate to give separation pay to a salesman if he is dismissed for his him to submit a written explanation. On May 22, 1996, he was terminated.
inability to fill his quota but surely he does not deserve such generosity if his offense
is misappropriation of the receipts of his sales. This is no longer mere incompetence
but clear dishonesty. A security guard found sleeping on the job is doubtless subject
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NLRC ordered reinstatement or in lieu therof, separation pay. CA held that NLRC held DBP liable for unpaid wages of private respondents "not as a
dismissal was valid but awarded him separation pay considering the mitigating majority stockholder of respondent PSC, but as the foreclosing creditor who
factors of length of service, the loyalty awards he received. possesses the assets of said PSC by virtue of the auction sale it held in 1987." In
addition, the NLRC held that the labor arbiter is correct in assuming jurisdiction
Issue: WON separation pay shall be awarded. because "the worker's preference to the amount secured by DBP by virtue of said
foreclosure sales of PSC properties arose out of or are connected or interwoven with
Held: No. The general rule is separation pay shall not be awarded if there’s a valid the labor dispute brought forth by appellees against PSC and DBP.
dismissal. In the case at bar, we find no exceptional circumstances to warrant the
grant of financial assistance or separation pay to petitioner. It bears stressing that Issue: WON a foreclosing creditor is liable for unpaid wages.
petitioner did not only violate company disciplinary rules and regulations. As found
by the CA, he falsified his employment application form by not stating therein that Held: No. During the dates material to the foregoing proceedings, Article 110 of
he is the nephew of Mr. Danao, respondent Wyeths Nutritional Territory Manager. the Labor Code read:
Also, on February 2, 1993, he was suspended for falsifying a gasoline receipt. On
June 28, 1993, he was warned for submitting a false report of his trade outlet calls. Art. 110.Worker preference in case of bankruptcy. — In the event of
On September 8, 1993, he was found guilty of unauthorized availment of sick, bankruptcy or liquidation of an employer's business, his workers shall enjoy
vacation and emergency leaves. These infractions manifest his slack of moral first preference as regards wages due them for services rendered during the
principle. In simple term, he is dishonest. period prior to the bankruptcy or liquidation, any provision of law to the
contrary notwithstanding. Unpaid wages shall be paid in full before other
Financial assistance may be allowed as a measure of social justice in creditors may establish any claim to a share in the assets of the employer.
exceptional circumstances and as an equitable concession. We are likewise mindful
that financial assistance is allowed only in those instances where the employee is It is quite clear from the provisions that a declaration of bankruptcy or a
validly dismissed for causes other than serious misconduct or those reflecting on his judicial liquidation must be present before the worker's preference may be enforced.
moral character. The claims of all creditors whether preferred or non- preferred, the Identification of
the preferred ones and the totality of the employer's asset should be brought into the
picture. There can then be an authoritative, fair, and binding adjudication instead of
G.R. No. 86932 June 27, 1990 DBP v and DOROTHY S. ANCHETA the piece meal settlement which would result from the questioned decision in this
case.
Facts: Philippine Smelter Corporation mortgaged its assets with DBP. PSC failed
to pay the loan thus there was extrajudicial foreclosure. Republic Act No. 6715, which took effect on March 21, 1989, amended Article 110
of the Labor Code to read as follows:
On February 10, 1987, 40 petitioners filed a Petition for Involuntary
Insolvency against PSC and DBP, impleading as co-respondents therein Jose Art. 110.Worker preference in case of bankruptcy. — In the event of
Panganiban Ice Plant and Cold Storage et al. bankruptcy or liquidation of an employer's business, his workers shall enjoy
first preference as regards their unpaid wages and other monetary claims,
On February 13, 1987, herein private respondents filed a complaint with the any provision of law to the contrary notwithstanding. Such unpaid wages
DOL(E) against PSC and DBP for nonpayment of salaries, 13th month pay, and monetary claims shall be paid in full before the claims of the
incentive leave pay and separation pay. DBP filed its position paper on September 7, Government and other creditors may be paid.
1987, invoking the absence of EER between private respondents and DBP and
submitting that when DBP foreclosed the assets of PSC, it did so as a foreclosing Despite said amendments, however, the same interpretation of Article 110
creditor. as applied in the aforesaid case of Development Bank of the Philippines vs. Hon.
Labor Arbiter Ariel C. Santos, et al., supra, was adopted by this Court in the recent
65
case of Development Bank of the Philippines vs. National Labor Relations insolvent's assets. It is a right to a first preference in the discharge of the funds of the
Commission, et. al., For facility of reference, especially the rationalization for the judgment debtor.
conclusions reached therein, we reproduce the salient portions of the decision in this
later case. Article 110 of the Labor Code does not purport to create a lien in favor of
workers or employees for unpaid wages either upon all of the properties or upon any
Notably, the terms "declaration" of bankruptcy or "judicial" liquidation have been particular property owned by their employer. Claims for unpaid wages do not
eliminated but liquidation proceedings is still needed. therefore fall at all within the category of specially preferred claims established
under Articles 2241 and 2242 of the Civil Code, except to the extent that such claims
1. Because of its impact on the entire system of credit, Article 110 of the for unpaid wages are already covered by Article 2241, number 6: 'claims for laborers'
Labor Code cannot be viewed in isolation but must be read in relation to the Civil wages, on the goods manufactured or the work done; or by Article 2242, number 3:
Code scheme on classification and preference of credits. 'claims of laborers and other workers engaged in the construction, reconstruction or
repair of buildings, canals and other works, upon said buildings, canals or other
2. In the same way that the Civil Code provisions on classification of credits works.' To the extent that claims for unpaid wages fall outside the scope of Article
and the Insolvency Law have been brought into harmony, so also must the kindred 2241, number 6 and Article 2242, number 3, they would come within the ambit of
provisions of the Labor Law be made to harmonize with those laws. the category of ordinary preferred credits under Article 2244.'
3. In the event of insolvency, a principal objective should be to effect an 5. The DBP anchors its claim on a mortgage credit. A mortgage directly and
equitable distribution of the insolvent's property among his creditors. To accomplish immediately subjects the property upon which it is imposed, whoever the possessor
this there must first be some proceeding where notice to all of the insolvent's may be, to the fulfillment of the obligation for whose security it was constituted
creditors may be given and where the claims of preferred creditors may be bindingly (Article 2176, Civil Code). It creates a real right which is enforceable against the
adjudicated. 1989). whole world. It is a lien on an Identified immovable property, which a preference is
not. A recorded mortgage credit is a special preferred credit under Article 2242 (5) of
A preference of credit bestows upon the preferred creditor an advantage of the Civil Code on classification of credits. The preference given by Article 110,
having his credit satisfied first ahead of other claims which may be established when not falling within Article 2241 (6) and Article 2242 (3) of the Civil Code and
against the debtor. Logically, it becomes material only when the properties and not attached to any specific property, is an ordinary preferred credit although its
assets of the debtors are insufficient to pay his debts in full; for if the debtor is amply impact is to move it from second priority to first priority in the order of preference
able to pay his various creditors, in full, how can the necessity exist to determine established by Article 2244 of the Civil Coe.
which of his creditors shall be paid first or whether they shall be paid out of the
proceeds of the sale of the debtor's specific property? Indubitably, the preferential In fact, under the Insolvency Law (Section 29) a creditor holding a
right of credit attains significance only after the properties of the debtor have been mortgage or hen of any kind as security is not permitted to vote in the election of the
inventoried and liquidated, and the claims held by his various creditors have been assignee in insolvency proceedings unless the value of his security is first fixed or he
established. surrenders all such property to the receiver of the insolvent's estate.
4. A distinction should be made between a preference of credit and a lien. A 6. Even if Article 110 and its Implementing Rule, as amended, should be
preference applies only to claims which do not attach to specific properties. A hen interpreted to mean 'absolute preference,' the same should be given only prospective
creates a charge on a particular property. The right of first preference as regards effect in line with the cardinal rule that laws shall have no retroactive effect, unless
unpaid wages recognize by Article 110 does not constitute a hen on the property of the contrary is provided (Article 4, Civil Code). Thereby, any infringement on the
the insolvent debtor in favor of workers. It is but a preference of credit in their favor, constitutional guarantee on non-impairment of obligation of contracts (Section 10,
a preference in application. It is a method adopted to determine and specify the order Article III, 1987 Constitution) is also avoided. In point of fact, DBP's mortgage
in which credits should be paid in the final distribution of the proceeds of the credit antedated by several years the amendatory law, RA No. 6715. To give Article
110 retroactive effect would be to wipe out the mortgage in DBPs favor and expose
66
it to a risk which it sought to protect itself against by requiring a collateral in the its implementing rule cannot be invoked by the respondents in this case absent a
form of real property. formal declaration of bankruptcy or a liquidation order.
In fine, the right to preference given to workers under Article 110 of the Art. 110, which was amended by R.A. 6715 effective 21 March 1989, now
Labor Code cannot exist in any effective way prior to the time of its presentation in reads:
distribution proceedings. It will find application when, in proceedings such as
insolvency, such unpaid wages shall be paid in full before the 'claims of the Art. 110.Worker preference in case of bankruptcy. — In the event of
Government and other creditors' may be paid. But, for an orderly settlement of a bankruptcy or liquidation of an employer's business, his workers shall enjoy
debtor's assets, all creditors must be convened, their claims ascertained and first preference as regards their unpaid wages and other monetary claims,
inventoried, and thereafter the preference determined in the course of judicial any provision of law to the contrary notwithstanding. Such unpaid wages
proceedings which have for their object the subjection of the property of the debtor and monetary claims shall be paid in full before the claims of the
to the payment of his debts or other lawful obligations. Thereby, an orderly Government and other creditors may be paid.
determination of preference of creditors' claims is assured; the adjudication made
will be binding on all parties-in-interest, since those proceedings are proceedings in Obviously, the amendment expanded the concept of "worker preference" to
rem; and the legal scheme of classification, concurrence and preference of credits in cover not only unpaid wages but also other monetary claims to which even claims of
the Civil Code, the Insolvency Law, and the Labor Code is preserved in harmony. the Government must be deemed subordinate. The Rules and Regulations
Implementing R.A. 6715, approved 24 May 1989, also amended the corresponding
On the foregoing considerations and it appearing that an involuntary implementing rule, and now reads:
insolvency proceeding has been instituted against PSC, private respondents should
properly assert their respective claims in said proceeding. Sec. 10. Payment of wages and other monetary claims in case of
bankruptcy. — In case of bankruptcy or liquidation of the employer's
business, the unpaid wages and other monetary claims of the employees
shall be given first preference and shall be paid in full before the claims of
government and other creditors may be paid.
G.R. No. 108031 March 1, 1995 DBP v NLRC and LEONOR ANG Although the terms "declaration" (of bankruptcy) or "judicial" (liquidation)
have been notably eliminated, this Court did not alter its original position that the
Facts: Ang was Executive Secretary with Tropical Philippines Wood Industries, right to preference given to workers under Art. 110 cannot exist in any effective way
Inc. (TPWII) when DBP foreclosed the latter. On 14 December 1987 aggrieved by prior to the time of its presentation in distribution proceedings.
the termination of her employment, private respondent filed with the Labor Arbiter a
complaint for separation pay, 13th month pay, vacation and sick leave pay, salaries Worker preference will find application when, in proceedings such as
and allowances against TPWII, its General Manager, and petitioner. insolvency, such unpaid wages shall be paid in full before the "claims of the
Government and other creditors" may be paid. But, for an orderly settlement of a
Issue: WON Art. 110 of the Labor Code, as amended, which refers to worker debtor's assets, all creditors must be convened, their claims ascertained and
preference in case of bankruptcy or liquidation of an employer's business is inventoried, and thereafter the preferences determined. In the course of judicial
applicable to the present case notwithstanding the absence of any formal declaration proceedings which have for their object the subjection of the property of the debtor
of bankruptcy or judicial liquidation of TPWII. to the payment of his debts or other lawful obligations. Thereby, an orderly
determination of preference of creditors' claims is assured; the adjudication made
Held: A declaration of bankruptcy or a judicial liquidation must be present before will be binding on all parties-in-interest since those proceedings are proceedings in
the worker's preference may be enforced. Thus, Article 110 of the Labor Code and rem; and the legal scheme of classification, concurrence and preference of credits in
the Civil Code, the Insolvency Law, and the Labor Code is preserved in harmony
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1. When directors and trustees or, in appropriate cases, the officers of
A preference of credit bestows upon the preferred creditor an advantage of a corporation —
having his credit satisfied first ahead of other claims which may be established (a) vote for or assent to patently unlawful acts of the corporation;
against the debtor. Logically, it becomes material only when the properties and (b) act in bad faith or with gross negligence in directing the corporate
assets of the debtors are insufficient to pay his debts in full; for if the debtor is amply affairs;
able to pay his various creditors in full, how can the necessity exist to determine (c) are guilty of conflict of interest to the prejudice of the corporation,
which of his creditors shall be paid first or whether they shall be paid out of the its stockholders or members, and other persons.
proceeds of the sale of the debtor's specific property. Indubitably, the preferential 2. When a director or officer has consented to the issuance of watered
right of credit attains significance only after the properties of the debtor have been stocks or who, having knowledge thereof, did not forthwith file with the
inventoried and liquidated, and the claims held by his various creditors have been corporate secretary his written objection thereto.
established. 3. When a director, trustee or officer has contractually agreed or
stipulated to hold himself personally and solidarily liable with the
A preference applies only to claims which do not attach to specific Corporation.
properties. A lien creates a charge on a particular property. The right of first 4 When a director, trustee or officer is made, by specific provision of
preference as regards unpaid wages recognized by Article 110 does not constitute a law, personally liable for his corporate action.
lien on the property of the insolvent debtor in favor of workers. It is but a preference
of credit in their favor, a preference in application. It is a method adopted to In labor cases, for instance, the Court has held corporate directors and
determine and specify the order in which credits should be paid in the final officers solidarily liable with the corporation for the termination of employment of
distribution of the proceeds of the insolvent's assets. It is a right to a first preference employees done with malice or in bad faith.
in the discharge of the funds of the judgment debtor.
In the case at Bench, there is nothing substantial on record that can justify,
In the present case, there is as yet no declaration of bankruptcy nor judicial prescinding from the foregoing, petitioner Centeno's solidary liability with the
liquidation of TPWII. Hence, it would be premature to enforce the worker's corporation.
preference.
G.R. No. 114787 June 2, 1995 MAM REALTY v NLRC

G.R. No. 70615 October 28, 1986
Facts: The case originated from a complaint filed with the Labor Arbiter by VIRGILIO CALLANTA v Carnation Phils
private respondent Celso B. Balbastro against herein petitioners, MAM Realty
Development Corporation and its Vice President Manuel P. Centeno, for wage Facts: On June 1, 1979, respondent filed with MOLE an application for clearance
differentials et al. to terminate the employment of Virgilio Callanta on the alleged grounds of serious
misconduct and misappropriation of company funds amounting to P12k. On July 5,
Issue: WON Centeno is jointly and severally liable. 1982, Virgilio Callanta filed with the MOLE a complaint for illegal dismissal. In its
position paper dated October 5, 1982, respondent Carnation put in issue the
Held: No. A corporation, being a juridical entity, may act only through its timeliness of petitioner's complaint alleging that the same is barred by prescription
directors, officers and employees. Obligations incurred by them, acting as such for having been filed more than 3 years after the date of Callanta's dismissal.
corporate agents, are not theirs but the direct accountabilities of the corporation they
represent. True, solidary liabilities may at times be incurred but only when Issue: WON an action for illegal dismissal prescribes in 3 years pursuant to
exceptional circumstances warrant such as, generally, in the following cases: Articles 291 and 292.
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Held: No. 4-year prescriptive period under Article 1146 of the New Civil Code, recover damages as redress for defendant's breach of his contractual obligation to
applies by way of supplement, in the instant case. One's employment, profession, plaintiff who was damaged and prejudiced. The Court believes such cause of action
trade or calling is a "property right," and the wrongful interference therewith is an is within the realm of civil law, and jurisdiction over the controversy belongs to the
actionable wrong. The right is considered to be property within the protection of a regular courts.
constitutional guaranty of due process of law. Clearly then, when one is arbitrarily
and unjustly deprived of his job or means of livelihood, the action instituted to Issue: WON RTC has jurisdiction.
contest the legality of one's dismissal from employment constitutes, in essence, an
action predicated "upon an injury to the rights of the plaintiff," as contemplated Held: No. Labor Code is even more committed to the view that on policy
under Art. 1146 of the New Civil Code, which must be brought within 4 years. grounds, and equally so in the interest of greater promptness in the disposition of
labor matters, a court is spared the often onerous task of determining what essentially
In the instant case, the action for illegal dismissal was filed by petitioners is a factual matter, namely, the damages that may be incurred by either labor or
on July 5, 1982, or 3 years, 1 month and 5 days after the alleged effectivity date of management as a result of disputes or controversies arising from employer-employee
his dismissal on June 1, 1979 which is well within the 4-year prescriptive period relations.
under Article 1146 of the New Civil Code.
This is, of course, to distinguish from cases of actions for damages where
Even on the assumption that an action for illegal dismissal falls under the the EER is merely incidental and the cause of action proceeds from a different source
category of "offenses" or "money claims" under Articles 291 and 292, Labor Code, of obligation. Thus, the jurisdiction of regular courts was upheld where the damages,
which provide for a three-year prescriptive period, still, a strict application of said claimed for were based on tort, malicious prosecution, or breach of contract, as when
provisions will not destroy the enforcement of fundamental rights of the employees. the claimant seeks to recover a debt from a former employee or seeks liquidated
As a statutory provision on limitations of actions, Articles 291 and 292 go to matters damages in enforcement of a prior employment contract.
of remedy and not to the destruction of fundamental rights. As a general rule, a
statute of limitation extinguishes the remedy only. Although the remedy to enforce a Neither can we uphold the reasoning of respondent court that because the
right may be barred, that right may be enforced by some other available remedy resolution of the issues presented by the complaint does not entail application of the
which is not barred. Labor Code, the dispute is intrinsically civil. Article 217(a) bestows upon the LA
original and exclusive jurisdiction over claims for damages arising from EER. LA
has jurisdiction to award not only the reliefs provided by labor laws, but also
damages governed by the Civil Code.
G.R. No. 128024. May 9, 2000 BEBIANO BAEZ v HON. VALDEVILLA G. R. No. 143215. July 11, 2002 SOLIMAN SECURITY SERVICES v CA
Facts: Petitioner was the sales operations manager of Oro Marketing. Oro Facts: Respondent Valenzuela was a security guard until he was relieved with
indefinitely suspended Baez. LA ruled in favor of petitioner while NLRC dismissed promise to be reassigned. Valenzuela then filed a case for constructive dismissal with
the appeal for being filed out of time. Thereafter, Oro filed a complaint for damages payment for overtime et al, arguing that he was put on a floating status. Petitioner in
before the RTC. Petitioner filed a motion to dismiss arguing that the action for its answer alleged that Valenzuela refused the reassignment and the 29 days of
damages, having arisen from an EER, was squarely under the exclusive original floating status was not tantamount to constructive dismissal.
jurisdiction of the NLRC under Article 217(a), paragraph 4 and is barred by reason
of the final judgment in the labor case. LA ruled in favor of respondent. On appeal, petitioner failed to post the
appeal bond. Regardless, NLRC gave due course to the appeal upon the petitioner’s
RTC dismissed the motion to dismiss because a perusal of the complaint submission of a manifestation and affidavit.
which is for damages does not ask for any relief under the Labor Code. It seeks to
69
Issue: WON non-posting of bond warrants dismissal of appeal. bond was later discovered to be spurious because the person who signed it was no
longer connected with the insurance company for more than 10 years already. It was
Held: Yes. Private respondent would posit that the appeal of petitioners to the only on July 20, 1993, that private respondents posted a substitute bond issued by
NLRC should be considered to have been made on 19 January 1999 (when petitioner another company.
submitted, pursuant to the NLRC order, a statement under oath to the effect that the
surety bond it had posted was genuine and confirmed it to be in effect until the final Issue: WON THE LA DECISION HAS BECOME FINAL FOR NON-FILING
termination of the case) which was beyond the ten-day period for perfecting an OF A SUPERSEDEAS BOND WITHIN THE REGLEMENTARY PERIOD.
appeal. The records before the Court would show, however, that an appeal bond was
posted with the NLRC at the same time that the appeal memorandum of petitioners Held: Yes. The perfection of an appeal within the reglementary period and in the
was filed on 16 October 1998. A certified true copy of the appeal bond would manner prescribed by law is jurisdictional, and noncompliance with such legal
indicate that it was received by the Commission on 16 October 1998, the date requirement is fatal and has the effect of rendering the judgment final and executory.
reflected by the stamp-mark thereon. The surety bond issued by the Philippine Such requirement cannot be trifled with.
Charter Insurance Corporation bore the date of 14 October 1998 or two days before
the appeal memorandum was seasonably filed on 16 October 1998. The Order, dated Perfection of an appeal includes the filing, within the prescribed period, of
11 November 1998, of the NLRC categorically stated that records would disclose the memorandum of appeal containing, among others, the assignment of error/s, the
that the instant appeal was accompanied by a surety bond, as the Decision sought to relief sought and, posting of the appeal bond. In case where the judgment involves a
be appealed involved a monetary award. The NLRC, in fact, ordered petitioner to monetary award, as in this case, the appeal may be perfected only upon posting of a
submit an affidavit to confirm that its appeal bond was genuine and would be in cash or surety bond issued by a reputable bonding company duly accredited by the
force and effect until the final disposition of the case. The Commissions declaration NLRC. The amount of the bond must be equivalent to the monetary award, exclusive
that the appeal was accompanied by a surety bond indicated that there had been of moral and exemplary damages and attorney's fees.
compliance with Article 223 of the Labor Code.
The records indicate that private respondents received the copy of labor
An appeal to the NLRC is perfected once an appellant files the arbiter's decision on April 3, hence, they had only until April 13 to perfect their
memorandum of appeal, pays the required appeal fee and, where an employer appeal. While private respondents filed their memorandum of appeal on time, they
appeals and a monetary award is involved, the latter posts an appeal bond or submits posted surety bond only on April 30, which is beyond the ten-day reglementaty
a surety bond issued by a reputable bonding company. In line with the desired period. Private respondents' failure to post the required appeal bond within the
objective of labor laws to have controversies promptly resolved on their merits, the prescribed period is inexcusable. Worse, the appeal bond was bogus having been
requirements for perfecting appeals are given liberal interpretation and construction. issued by an officer no longer connected with the bonding company, which was not
sufficiently explained by private respondents. For sure, they cannot avoid
G.R. No. 116464 March 1, 2000 RODENTO NAVARRO v NLRC responsibility by disavowing any knowledge of its fictitiousness for they were
required to secure bond only from reputable companies. Corollary, they should have
Facts: Petitioners are jeepney drivers on a boundary system. The dispatcher, told ensured that the bond is genuine, otherwise, the purpose of requiring the posting of
the petitioners cannot go out on the usual working hours of 5 PM to 4 AM (night bond, that is, to guarantee the payment of valid and legal claims against the
shift) because their working hours were moved to a new schedule of work, 7 PM to 6 employer, would not be served.
AM. Petitioners did not ply their route as protest. Petitioners were dismissed.
We are mindful of the fact that this Court, in a number of cases, has relaxed
Petitioners filed a case for illegal dismissal asking for severance pay among this requirement on grounds of substantial justice and special circumstances of the
others. LA ruled in favor of petitioner. On April 3, 1992, private respondents were case. However, we find no cogent reason to apply this same liberal interpretation
served a copy of the decision of the labor arbiter. Aggrieved, they filed on April 13, herein when the bond posted was not genuine. In this case, there is really no bond
1992 with NLRC their memorandum on appeal. Nevertheless, it was only on April posted since a fake or expired bond is in legal contemplation merely a scrap of paper.
30, 1992, that private respondents filed the appeal bond. Unfortunately, the aforesaid It should be stressed that the intention of lawmakers to make the bond an
70
indispensable requisite for the perfection of an appeal by the employer is resolving the Urgent Motion to Reduce Bond, the NLRC dismissed the appeal of
underscored by the provision that an appeal by the employer may be perfected only petitioner for appellant's failure to put up a bond.
upon the posting of a cash or surety bond. The word "only" makes it perfectly clear
that the lawmakers intended the posting of a cash or surety bond by the employer to Issue: WON NLRC validly dismissed the appeal and motion to reduce bond for
be the exclusive means by which an employer's appeal may be perfected. failure to post bond.
As the appeal filed by private respondents was not perfected within the Held: No. What obviously misled the NLRC in imposing the posting of a bond as
reglementary period, the running of the prescriptive period for perfecting an appeal a precondition before it can act on the motion to reduce the bond is provision of
was not tolled. Consequently, the decision of the labor arbiter became final and Article 223 (par. 2) of the Labor Code which requires the posting of the bond before
executory upon the lapse of ten calendar days from receipt of the decision. Hence, an appeal "may be perfected."
the decision became immutable and it can no longer be amended nor altered by the
labor tribunal. Accordingly, inasmuch as the timely posting of appeal bond is an There is a clear distinction between the filing of an appeal within the
indispensable and jurisdictional requisite and not a mere technicality of law, the reglementary period and its perfection. The latter may transpire after the end of the
NLRC has no authority to entertain the appeal, much less to set aside the decision of reglementary period for filing the appeal.
the labor arbiter in this case. Any amendment or alteration made which substantially
affects the final and executory judgment is null and void for lack of jurisdiction, Under Article 223, an appeal to the NLRC from the decisions, awards or
including the entire proceedings held for that purpose. orders of the LA must be made "within 10 calendar days from receipt of such
decisions, awards or orders." Under Section 3(a) of Rule VI of the New Rules of
Procedure of the NLRC, the appeal fees must be paid and the memorandum of
appeal must be filed within the ten-day reglementary period. Neither the Labor Code
nor its implementing rules specifically provide for a situation where the appellant
moves for a reduction of the appeal bond.
Inasmuch as in practice the NLRC allows the reduction of the appeal bond
upon motion of appellant and on meritorious grounds, it follows that a motion to that
effect may be filed within the reglementary period for appealing. Such motion may
be filed in lieu of a bond which amount is being contested. In the meantime, the
appeal is not deemed perfected and the LA retains jurisdiction over the case until the
NLRC has acted on the motion and appellant has filed the bond as fixed by the
G.R. No. 108914 September 20, 1994 NLRC.
STAR ANGEL HANDICRAFT v NLRC G.R. No. 114161 November 23, 1995 VIRGILIO M. CAÑETE v NLRC
Facts: Respondent Fribaldos filed money claims against petitioner in LA. LA ruled
in favor of Frivaldos. Petitioner moved for the reconsideration of the decision of the Petitioner VIRGILIO M. CAÑETE assails the Decision and Resolution of the
LA. After the denial of the motion for reconsideration, petitioner appealed to the NLRC, dated September 20, 1993 and December 20, 1993, respectively, as having
NLRC with an Urgent Motion to Reduce Bond, alleging as grounds grave abuse of been issued with grave abuse of discretion. Petitioner claims he was illegally
discretion committed by the Labor Arbiter in computing the award of the claims dismissed from service. His employer, however, private respondent VICENTE
based on an erroneous applicable, daily-minimum wage for the handicraft TING/V.T. MARKETING, maintains petitioner abandoned his job.
establishment. The motion averred that a big portion of the awards had already
prescribed, thus justifying the reduction of the bond from P93k to only P19k.Without
71
Private respondent is a wholesaler of dry goods. Petitioner started working with (a) petitioner worked for only four (4) days for the payroll period
private respondent as helper-utility man on July 11, 1987. Petitioner alleged that he May 14-19, 1990;
and his co-employees worked from 7:30 a.m. until past 6:00 p.m., but it was made to
appear on their time cards that they worked the regular eight (8) hours from 8:00 (b) he was absent for three (3) days for the payroll period June 25-
a.m. to 5:00 p.m. Thus, they received compensation for only eight (8) hours work 30, 1990;
and were underpaid.
(c) he was absent for two (2) days for the payroll period November
On July 22, 1992, at about 7:10 a.m., petitioner arrived at the workplace and found 12-17, 1990;
some of his co-employees already working. He casually remarked: "Why are we
working so early when we were supposed to start (at) 7:30 a.m.? In fact, we (have)
(d) he was absent for three (3) days for the payroll period May 11-
already been deprived of half an hour('s pay) because our payrolls indicate that we
16, 1992;
start (work) at 8:00 a.m." Somehow, his remark reached management. At about 6:00
p.m. that night, petitioner was summoned by respondent's manager, Joaquin Chua.
He was told not to report for work anymore and he would just be paid for the (e) he was absent the whole working week of May 18-23, 1992;
services he rendered. Petitioner inquired why he was being dismissed. Referring to and,
petitioner's remark that morning, Chua told petitioner he was interferring with the
work of his co-employees. Petitioner explained he merely aired a harmless In a Decision, dated March 8, 1993,4 Labor Arbiter Ray Alan T. Drilon ruled that
observation. His explanation did not satisfy Chua. Petitioner was ordered to return petitioner did not abandon his job but was illegally dismissed from service. Petitioner
the following day to get his separation pay. was awarded backwages, separation pay and attorney's fees. He was also given wage
differentials due to a finding of underpayment of wages.
The next day, when petitioner reported for work, he was offered the amount of Six
Thousand Pesos (P6,000.00) as separation pay. He refused the offer. Respondent As per the return of service, Atty. Enrique Chua, private respondent's counsel,
then barred him from working. A month later, petitioner filed with the Department of received a copy of the Decision of the labor arbiter on March 15, 1993. However,
Labor a complaint for illegal dismissal, underpayment of wages, non-payment of private respondent's appeal to the National Labor Relations Commission (NLRC)
13th month pay and damages. 1 was filed only on March 26, 1993, or a day after the lapse of the ten-day period
prescribed by law. Initially, the NLRC dismissed his appeal.5
Private respondent, on the other hand, presented a different story. On July 22, 1992,
private respondent reprimanded petitioner for his repeated and habitual absences Private respondent moved for a reconsideration of the dismissal of his appeal. He
from work. From that day on, petitioner did not report for work. It was three (3) days explained that the copy of the labor arbiter's Decision which was sent by registered
later, or on July 25, 1992, when petitioner returned but only to demand payment for mail to his lawyer, Atty. Enrique Chua, was received by one NENETTE VASQUEZ,
his three-days work for the payroll period July 20-25, 1992. Private respondent a person not under the employ of his lawyer. Vasquez was a sales representative of
reported the abandonment of work to the Department of Labor on August 10, 1992. United System, an office which-adjoins Chua's law office. Attached to the Motion
He also furnished petitioner a copy of the notice of termination due to abandonment was the Affidavit of Vasquez6 where she deposed that she received a copy of said
at his last known address. However, the notice did not reach petitioner since, as per Decision on March 15, 1993, at about 8:20 a.m. On said date and time, she was
the Certification2of Postmaster Roberto Robit, petitioner was unknown at the given resting at the well-ventilated premises of Atty. Chua's office which was then still
address.3 closed. She was still resting when the postman who regularly delivered mail in said
building, asked her if she could receive the mail intended for Atty. Chua as the
In support of his position that petitioner had repeatedly absented himself from work, latter's office was still closed. She acceded and signed the registry return card.
and that he was reprimanded therefor, private respondent submitted to the NLRC
petitioner's time records which disclosed the following:
72
Vasquez stayed on the premises of Atty. Chua's office for about 15-20 minutes. First. Petitioner avers that private respondent failed to make a timely appeal of the
Thereafter, she left to see a prospective client and inadvertently brought with her the Decision of the labor arbiter to the NLRC. He insists that receipt by Nenette Vasquez
mail intended for Atty. Chua. She was able to give the mail to Anelyn Cadiz, Chua's of a copy of the Decision of the labor arbiter on March 15, 1993 should have been
clerk, only the following day, March 16, 1993. However, she failed to inform Cadiz considered as receipt of said Decision by Atty. Chua, private respondent's then
that she actually received the mail the day before. Cadiz thus presumed that the mail counsel of record. The fact that Ms. Vasquez may have handed a copy of said
was delivered only on said date. Consequently, Atty. Chua reckoned the period of Decision to a clerk of Atty. Chua only on March 16, 1993 is of no moment. Since the
appeal from March 16, 1993 and actually filed respondent's appeal ten (10) days return of service shows that the Decision was received on March 15, 1993, private
thereafter, or on March 26, 1993. Vasquez' account of the incident was corroborated respondent had only until March 25, 1993 within which to perfect his appeal with the
by the postman, Roque S. Tubungbanua7 and Chua's clerk, Anelyn Cadiz.8 NLRC. Hence, private respondent's appeal on March 26, 1993 was belatedly filed,
rendering the labor arbiter's Decision final and executory.
Petitioner opposed the motion for reconsideration. 9 He alleged that service of the
copy of the labor arbiter's Decision to Vasquez on March 15, 1993 should be deemed The contention has no merit.
as proper service to respondent's counsel. Petitioner also objected to the documents
submitted by respondent to the NLRC for the first time on appeal, viz: (a) petitioner's Section 4, Rule 13 of the Rules of Court provides:
daily time record and payroll for the months of August and December 1989 and
April 1990 attached to respondent Notice and Memorandum on Appeal; (b)
Sec. 4. Personal service. — Service of the papers may be made by
Certification of the Postmaster of Bacolod City, dated May 11, 1993, that he was not
delivering personally a copy to the party or his attorney, or by
able to effect delivery of the notice of abandonment for petitioner was unknown at leaving it in his office with his clerk or with a person having
the given address. Petitioner charged that he was denied due process when these charge thereof. If no person is found in his office, or his office is
documents were presented only at such late stage and was not adduced at the hearing
not known, then by leaving the copy, between the hours of eight in
before the labor arbiter.
the morning and six in the evening, at the party's or attorney's
residence, if known, with a person of sufficient discretion to
In its Decision, 10 dated September 20, 1993, NLRC reversed the Decision of the receive the same.
labor arbiter. It ruled that petitioner was not illegally dismissed but abandoned his
work. Nonetheless, in view of the willingness of the employer to pay separation pay,
We have ruled that where a copy of the decision is served on a person who is neither
the NLRC awarded to petitioner the amount of Nine Thousand Seven Hundred
a clerk nor one in charge of the attorney's office, such service is invalid. 12 In the case
Fifteen Pesos and Eighty Centavos (P9,715.80) as separation pay. Petitioner's claims
at bar, it is undisputed that Nenette Vasquez, the person who received a copy of the
for underpayment of wages and damages were found unmeritorious and were
labor arbiter's Decision, was neither a clerk of Atty. Chua, respondents counsel, nor a
likewise dismissed. Petitioner moved for reconsideration. It was denied. 11 person in charge of Atty. Chua's office. Hence, her receipt of said Decision on March
15, 1993 cannot be considered as notice to Atty. Chua. Since a copy of the Decision
Hence, this petition for certiorari. was actually delivered by Vasquez to Atty. Chua's clerk only on March 16, 1993, it
was only on this date that the ten-day period for the filing of respondent's appeal
Petitioner contends that the NLRC acted with grave abuse of discretion in: (a) commenced to run. Thus, respondent's March 26, 1993 appeal to the NLRC was
declaring private respondent's appeal to have been seasonably filed; (b) holding that seasonably filed.
petitioner was not dismissed but abandoned his employment; and, (c) admitting and
considering evidence which had been presented by private respondent for the first Second. Petitioner charges that the NLRC abused its discretion when it considered,
time on appeal. over his objection, certain documents 13 which private respondent submitted for the
first time on appeal. Petitioner claims he was denied due process.
Before proceeding with the substantive issue raised in this petition, we shall first rule
on the procedural objections raised by petitioner. We do not agree.
73
Article 221 of the Labor Code mandates that technical rules of evidence in courts of any inference that he abandoned his work. Abandonment is a matter of intention and
law shall not be controlling in any of the proceedings before the Commission or the cannot be lightly inferred or legally presumed from certain equivocal acts. To
Labor Arbiters. Further, the Commission is required to use every reasonable means constitute abandonment, there must be clear proof of deliberate and unjustified intent
to ascertain the facts without regard to technicalities or procedure. Technical rules to discontinue the employment. 15 The burden of proving abandonment of work as a
may be relaxed to prevent miscarriage of justice. They must not be allowed to stand just cause for dismissal is on the employer. Private respondent failed to discharge
in the way of equitably and completely resolving the rights and obligations of the this burden.
parties. 14
IN VIEW WHEREOF, the Decision and Resolution of the National Labor Relations
In the case at bar, petitioner had the opportunity to rebut the truth of these additional Commission, dated September 20, 1993 and December 20, 1993, respectively, are
documents. Respondent NLRC correctly accorded weight to these documents REVERSED. Accordingly, the Decision of Labor Arbiter Ray Alan T. Drilon, dated
considering their nature and character. These were daily time records, certifications March 8, 1993, is REINSTATED, except with respect to the award of wage
from the postmaster, etc., whose trustworthiness can be relied upon. differentials relative to the charge of under payment of wages which is hereby
deleted. No costs.
Consequently, we find no grave abuse of discretion on the part of the NLRC in
considering on appeal petitioner's daily time records and payrolls for the period
August 1989, December 1989 and April 1990 to rebut the charge of underpayment of
wages. On the basis of these documents, it was sufficiently proved that petitioner
received the minimum daily wage for said period. Perforce, the NLRC correctly
dismissed petitioner's charge for underpayment of wages.
However, on the issue of illegal dismissal, we find that petitioner did not abandon his
work but was illegally dismissed from service.
Private respondent claims that petitioner abandoned his employment after he was
reprimanded for his past absences. As proof thereof, private respondent submitted
the pertinent daily time records of petitioner from way back May 1990. However, the
evidence adduced by private respondent show that petitioner was last absent from
work on May 18-23, 1992. Private respondent's stance that he reprimanded petitioner
for his past absences after the lapse of one month, or on July 22, 1992 strains the
limits of credence. Indeed, private respondent did not cite any immediate
circumstance which could have triggered such a reprimand on that particular day.
G.R. No. 108951. March 7, 2000 JESUS B. DIAMONON v DOLE
The circumstances narrated by private respondent leading to petitioner's alleged
abandonment of work are highly suspect. On top of all, it is difficult to imagine that
petitioner would abandon his job for prior to his dismissal on July 22, 1992, Facts: Petitioner was removed as VP of National Congress of Unions in the Sugar
petitioner, a daily-wage earner, had been in the employ of private respondent since Industry of the Philippines (NACUSIP) and Vice President for Luzon of the
Philippine Agricultural, Commercial and Industrial Workers Union (PACIWU)
July 11, 1987, or for close to five (5) years. We find it incongruous for petitioner to
respectively through resolutions approved by the boards of the 2 unions.
give up his job after receiving a mere reprimand from his employer. What is more
telling is that on August 19, 1992 or less than a month from the time he was
There are 2 cases here. The 1st case is a is a complaint against the 2 unions
dismissed from service, petitioner immediately filed a complaint against his
employer for illegal dismissal with a prayer for reinstatement. Petitioner's acts negate while the 2nd case is against Atty. Dela Cruz for violating the CBLs of both unions.
74
company on January 18, 1990. 2 strikes ensued prompting the labor sec to certify the
The 1st case was ruled in favor of petitioner while the 2 nd case was dispute to NLRC for compulsory arbitration.
dismissed for lack of personality to sue since “petitioner was already removed.”
Petitioner appealed the 2nd case in DOLE Sec. Laguesma. Laguesma held that The company alleging loss of income, asked NLRC to submit evidence to
petitioner failed to show in his complaint that the administrative remedies provided prove the same. NLRC granted.
for in the constitution and by-laws of both unions, have been exhausted or such
remedies are not available, was fatal to petitioners cause. Resultantly, he affirmed the Issue: WON NLRC committed gadilej for allowing receipt of additional evidence.
dismissal of the complaint.
Held: No. Anent the contention that the respondent Commission gravely abused
Issue: WON Dole sec. validly switched the issue from lack of personality to its discretion when it allowed the presentation of additional evidence to prove the
failure to exhaust administrative remedies. loss suffered by the company despite the fact that they were mere afterthoughts and
just concocted by the company, time and again, We emphasize that "technical rules
Held: Yes. His failure to seek recourse before the National convention on his of evidence are not binding in labor cases. Labor officials should use every and
complaint against private respondents taints his action with prematurity. Generally, reasonable means to ascertain the facts in each case speedily and objectively, without
an appellate court may only pass upon errors assigned. However, this rule is not regard to technicalities of law or procedure, all in the interest of due process"
without exceptions. In the following instances, the Supreme Court ruled that an
appellate court (and quasi-judicial bodies) is accorded a broad discretionary power to
waive the lack of assignment of errors and consider errors not assigned:
(a) Grounds not assigned as errors but affecting the jurisdiction of the court over the
subject matter;
(b) Matters not assigned as errors on appeal but are evidently plain or clerical errors
within contemplation of law; G.R. No. 130866 September 16, 1998 ST. MARTIN FUNERAL v NLRC
(c) Matters not assigned as errors on appeal but consideration of which is necessary
in arriving at a just decision and complete resolution of the case or to serve the Facts: Respondent Aricayos filed a complaint for illegal dismissal against
interests of a justice or to avoid dispensing piecemeal justice; petitioner. Petitioner insist that Aricayos was not an employee but only helps
(d) Matters not specifically assigned as errors on appeal but raised in the trial court voluntarily as payment for debt of gratitude. LA dismissed the complaint due to lack
and are matters of record having some bearing on the issue submitted which the of jurisdiction for there was no EER present. NLRC remanded the case to LA.
parties failed to raise or which the lower court ignored; Supreme Petitioner filed this PetCert to SC arguing that NLRC committed gadilej.
(e) Matters not assigned as errors on appeal but closely related to an error assigned;
(f) Matters not assigned as errors on appeal but upon which the determination of a Issue: WON petition should be remanded to CA.
question properly assigned, is dependent.
G.R. No. 101539 September 4, 1992 CECILE DE OCAMPO v NLRC Held: Yes. BP 129 as amended by RA 7902 brings about the following changes:
1. The last paragraph which excluded its application to the LC and the Central
Facts: Baliwag Mahogany Corp. issued 3-day suspension orders affecting 20 Board of Assessment Appeals was deleted and replaced by a new paragraph granting
employees for failure to render overtime work. On the same day, the union filed a the CA limited powers to conduct trials and hearings in cases within its jurisdiction.
notice of strike on the grounds of ULP particularly the violation of the CBA 2. The reference to the LC in that last paragraph was transposed to paragraph
provisions on non-payment of unused leaves. On January 13, 1990, the company (3) of the section, such that the original exclusionary clause therein now provides
issued a notice of termination to petitioner et al allegedly to effect cost reduction and "except those falling within the appellate jurisdiction of the SC in accordance with
redundancy. The members of the union conducted a picket at the main gate of the the Constitution, the LC under PD No. 442, as amended, the provisions of this Act,
75
and of subparagraph (1) of the 3rd paragraph and subparagraph (4) of the 4th However, instead of filing the required motion for reconsideration,
paragraph of Section 17 of the Judiciary Act of 1948." petitioner filed the instant petition for certiorari. In doing so, petitioner boldly avers
3. Contrarily, however, specifically added to and included among the quasi- that a recourse to the NLRC via a motion for reconsideration is futile and will only
judicial agencies over which the CA shall have exclusive appellate jurisdiction are injure further her rights to a speedy and unbiased judgment of the case. She did not
the SEC, the SSC, the Employees Compensation Commission and the CSC expect the labor tribunal to rectify itself.
Paragraph (3), Section 9 of B.P. No. 129 now grants exclusive appellate Issue: WON certiorari should be dismissed because MR should be filed first.
jurisdiction to the CA over all final adjudications of the RTC and the quasi-judicial
agencies generally or specifically referred to therein except, among others, those Held: Yes. It is settled that certiorari will lie only if there is no appeal or any other
falling within the appellate jurisdiction of the SC in accordance with the Labor Code plain, speedy and adequate remedy in the ordinary course of law against acts of
under Presidential Decree No. 442, as amended. public respondent. In this case, the plain and adequate remedy expressly provided by
law is a motion for reconsideration of the impugned resolution, to be made under
The Court is, therefore, of the considered opinion that ever since appeals oath and filed within ten (10) days from receipt of the questioned resolution of the
from the NLRC to the Supreme Court were eliminated, the legislative intendment NLRC, a procedure which is jurisdictional. Hence, the filing of the petition for
was that the special civil action of certiorari was and still is the proper vehicle for certiorari in this case is patently violative of prevailing jurisprudence and will not
judicial review of decisions of the NLRC. The use of the word "appeal" in relation prosper without undue damage to the fundamental doctrine that undergirds the grant
thereto and in the instances we have noted could have been a lapsus plumae because of this prerogative writ.
appeals by certiorari and the original action for certiorari are both modes of judicial
review addressed to the appellate courts. The important distinction between them, Further, it should be stressed that without a motion for reconsideration
however, and with which the Court is particularly concerned here is that the special seasonably filed within the ten-day reglementary period, an order, decision or
civil action of certiorari is within the concurrent original jurisdiction of this Court resolution of the NLRC, becomes final and executory after ten (10) calendar days
and the CA; whereas to indulge in the assumption that appeals by certiorari to the SC from receipt thereof. Hence, the resolution of the NLRC had become final and
are allowed would not subserve, but would subvert, the intention of Congress. executory on January 17, 1992, insofar as petitioner is concerned, because she admits
under oath having received notice thereof9 on January 7, 1992. The merits of her
Becase there is a growing number of labor cases being elevated to this case may no longer be reviewed to determine if the public respondent might be
Court which, not being a trier of fact, only to remand it to NLRC for resolution of faulted for grave abuse of discretion, as alleged in her petition dated March 14, 1992.
ambiguous factual findings; that the CA is procedurally equipped for that purpose; Thus, the Court has no recourse but to sustain the respondent's position on
and that there is undeniably an imperative need for expeditious action on labor cases jurisdictional and other grounds, that the petition ought not to be given due course
as a major aspect of constitutional protection to labor; Therefore, all references in the and the case should be dismissed for lack of merit.
amended Section 9 of B.P. No. 129 to supposed appeals from the NLRC to the SC
are interpreted and hereby declared to mean and refer to petitions for certiorari under
Rule 65. Consequently, all such petitions should hence forth be initially filed in the
CA in strict observance of the doctrine on the hierarchy of courts as the appropriate
forum for the relief desired.
G.R. No. 104302 July 14, 1999 REBECCA VELOSO v China Airlines
G.R. No. 126805 March 16, 2000 PAL v NLRC
Facts: Petitioner, a ticket officer, was laid off due to closure of a ticketing section
to prevent losses. Petitioner filed a case of illegal dismissal and UPL. LA ruled in Facts: Respondent Pescante was load controller for PAL. He was accused of
favor of petitioner. NLRC reversed but ordered respondent to pay retrenchment pay. contracting a passenger named Cominero with excess baggage to make it appear that
her baggage was within the allowable limit. Petitioner filed an admin case against
Pescante who was found guilty and subsequently dismissed.
76
of his employment agreement and the reimbursement of his airfare. In March of
Pescante filed a case for illegal dismissal. LA upheld the dismissal but 1996, the case was referred to the NLRC as by then it was this agency which had
NLRC reversed. PAL filed rule 65 with SC. jurisdiction over respondent’s complaint by virtue of RA 8042, the Migrant Workers
and Overseas Filipinos Act of 1995.
Issue: WON SC may review factual issues.
LA ruled in favor of respondent. NLRC dismissed the appeal. Petitioner
Held: Yes. In certiorari proceedings under Rule 65, this Court does not assess and filed PetCert under R45 to the CA. CA dismissed the petition because: (1) there is no
weigh the sufficiency of evidence upon which the labor arbiter and public respondent certification against forum shopping by co-petitioner Hamil Development Co., Ltd.;
NLRC based their decisions. Our query is limited to the determination of whether or and (2) there is no written explanation why the service of the pleading was not done
not public respondent acted without or in excess of jurisdiction or with grave abuse personally (Section 3, Rule 46 and Section 11, Rule 13, 1997 Rules of Civil
of discretion in rendering the assailed decisions. Procedure). Apparently the certification for non-forum shopping was only signed by
MC and not by Hanmil.
But when the findings of the NLRC contradict those of the labor arbiter,
this Court, in the exercise of its equity jurisdiction, must of necessity review the Issue: WON there should be strict compliance in the rule on non-forum shopping.
records of the case to determine which findings should be preferred as more
comfortable to the evidentiary facts, as in this case. Held: No, substantial compliance is enough. In all cases filed in the CA, as with
all initiatory pleadings before any tribunal, a certification of non-forum shopping
signed by the petitioner must be filed together with the petition. The failure of a
petitioner to comply with this requirement constitutes sufficient ground for the
dismissal of his petition. Thus, the Court has previously held that a certification not
attached to the complaint or petition or one belatedly filed or one signed by counsel
and not the party himself constitutes a violation of the requirement which can result
in the dismissal of the complaint or petition.
However, with respect to the contents of the certification, the rule of

substantial compliance may be availed of. This is because the requirement of strict
compliance with the provisions regarding the certification of non-forum shopping
merely underscores its mandatory nature in that the certification cannot be altogether
dispensed with or its requirements completely disregarded. It does not thereby
interdict substantial compliance with its provisions under justifiable circumstances.
In the case at bar, the CA should have taken into consideration the fact that
petitioner Hanil is being sued by private respondent in its capacity as the foreign
principal of petitioner MCEI. It was petitioner MCEI, as the local private
employment agency, who entered into contracts with potential overseas workers on
G.R. No. 142314 June 28, 2001 MC ENGINEERING v NLRC behalf of petitioner Hanil.
Facts: Respondent entered into an employment agreement with petitioner for Issue: WON service of pleading should be done personally.
deployment as plumber in KSA. He was unable to complete contract. Respondent
filed a complaint with the POEA against petitioners MC and Hanil for illegal Held: There may be substantial compliance but petitioner failed to comply.
dismissal where he prayed for the payment of his salaries for the unexpired portion Section 11, Rule 13 of the 1997 Rules of Civil Procedure provides:
77
that fateful day. CA in dismissing the PetRev argued that: (a) that the certification of
"Sec. 11. Priorities in modes of service and filing. – Whenever practicable, non-forum shopping was defective; (b) that certified true copies of material portions
the service and filing of pleadings and other papers shall be done of the record were not attached to the petition; and (c) that the petition failed to state
personally. Except with respect to papers emanating from the court, a resort all the material dates which would establish the timeliness thereof. As admitted by
to other modes must be accompanied by a written explanation why the petitioner herself, she received a copy of the resolution on June 9, 1997, and yet it
service or filing was not done personally. A violation of this rule may be was only on January 27, 1998, or seven-and-a-half months later, that she filed a MR.
cause to consider the paper as not filed."
Issue: WON SC should give due course to the PetCert.
The utter disregard of the rules made by petitioners cannot justly be
rationalized by harking on the policy of liberal construction and substantial Held: No. The instant petition was not timely filed. Under section 1 of R45 of the
compliance. former Revised Rules of Court, which was then still in effect, an appeal from a
decision rendered by the CA to this Court must be made within 15 days from notice
The fact that an affidavit of service accompanied their petition does not of the judgment or the denial of a motion for reconsideration filed in due time. In the
amount to a substantial compliance with the requirement of an explanation why other case at bar, petitioner filed her MR from receipt of the resolution of dismissal 231
modes of service other than personal service were resorted to. An affidavit of days late, thereby rendering the said resolution final and executory. The gap of more
service, under Section 13, Rule 13 of the 1997 Rules of Civil Procedure, is required than 7 months is too large for us to ignore. Petitioner did not even offer any
merely as proof that service has been made to the other parties in a case. Thus, it is a explanation to account for the tardiness. It behooves the party invoking liberality in
requirement totally different from the requirement that an explanation be made if the application of procedural rules to at least explain his non-compliance therewith.
personal service of pleadings was not resorted to. In fact, a cursory reading of the We have held that the period of appeal is not only mandatory, but more importantly,
affidavit of service attached by petitioners in their petition before the Court of it is jurisdictional. Even we cannot ignore the immutable character of a final
Appeals shows that it merely states that a certain Rogelio Mindol served copies of judgment.
the pleading to the counsel of private respondent, the NLRC, and the Solicitor-
General by registered mail. There is not even a hint of an explanation why such
mode of service was resorted to.
G.R. No. 132916. November 16, 2001 RUFINA TANCINCO v GSIS
Facts: SPO1 Tancinco, an aide of VP Erap, was shot dead while off-duty. The
Employee’s Compensation Commission denied his claims. ECC argued that
Tancinco’s death, when he was on off duty status did not arise out of and in the
course of his employment as a member of the PNP Security Command because he
was neither executing an order for VP Estrada nor performing an official function on
78

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Magsino Labor Relations Digests, Arbues 2019

Facts: Held: No.

WEST COAST HOTEL CO. v PARRISH 300 US 379 (1937) Facts:

President Wilson enumerates the constituent functions as follows: '(1) The

Held: Yes. ·The petitioner's reliance on the Constitutional guaranty of worker

In the promotion; of personnel the basic consideration is efficiency in public

In their position paper, private respondents declared that their refusal to

Issue: WON the reshuffling was valid.

The penalty of dismissal imposed on Clarete is unduly harsh and grossly

To sanction disregard or disobedience by employees of a rule or order laid

G.R. No. 106246 September 1, 1994 CENTRAL NEGROS Facts:

Issue: WON the right to self-organization has been impaired.

Members of the KASAMA KO who are professional, technical,

The employees of Philtranco have been appraised and their functions

Facts: *One-union, one-company

An appropriate bargaining unit may be defined as “a group of employees of

A unit to be appropriate must effect a grouping of employees who have

Med-Arbiter Danilo L. Reynante issued an Order ordering the conduct of

San Miguel Corporation filed a Notice of Appeal with Memorandum on Facts:

G.R. No. L-24711. April 30, 1968 BENGUET CONSOLIDATED v

Corollary to our determination that de Jesus was illegally dismissed is her

Held: Not in this case. An illegally dismissed employee's right to reinstatement is

Facts: Petitioner is the registered owner of Southern Fishing Industry. Private

G.R. No. 140518 December 16, 2004

Moral damages would be recoverable, for example, where the dismissal of

Furthermore, petitioner's contingent fee falls within the purview of Article

*Separation pay as measure of social justice

Separation pay shall be allowed as a measure of social justice only in those

G.R. No. 114787 June 2, 1995 MAM REALTY v NLRC

However, with respect to the contents of the certification, the rule of

G.R. No. 132916. November 16, 2001 RUFINA TANCINCO v GSIS

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