Part 1 - LRTA

G.R. NO.
163782 : March 24, 2006]
LIGHT RAIL TRANSIT AUTHORITY, Petitioner, v. PERFECTO H. VENUS, JR.,

BIENVENIDO P. SANTOS, JR., RAFAEL C. ROY, NANCY C. RAMOS, SALVADOR A.
ALFON, NOEL R. SANTOS, MANUEL A. FERRER, SALVADOR G. ALINAS, RAMON
D. LOFRANCO, AMADOR H.POLICARPIO, REYNALDO B. GENER, and
BIENVENIDO G. ARPILLEDA, Respondents.
[G.R. NO. 163881 : March 24, 2006]
METRO TRANSIT ORGANIZATION, INC., Petitioner, v. COURT OF APPEALS,

PERFECTO H. VENUS, JR., BIENVENIDO P. SANTOS, JR., RAFAEL C. ROY,
NANCY C. RAMOS, SALVADOR A. ALFON, NOEL R. SANTOS, MANUEL A.
FERRER, SALVADOR G. ALINAS, RAMON D. LOFRANCO, AMADOR H.
POLICARPIO, and REYNALDO B. GENER, Respondents.
DECISION
PUNO, J.:
Before us are the consolidated petitions of Light Rail Transit Authority (LRTA) and Metro
Transit Organization, Inc. (METRO), seeking the reversal of the Decision of the Court of
Appeals directing them to reinstate private respondent workers to their former positions without
loss of seniority and other rights and privileges, and ordering them to jointly and severally pay
the latter their full back wages, benefits, and moral damages. The LRTA and METRO were also
ordered to jointly and severally pay attorney's fees equivalent to ten percent (10%) of the total
money judgment.
Petitioner LRTA is a government-owned and controlled corporation created by Executive Order

No. 603, Series of 1980, as amended, to construct and maintain a light rail transit system and
provide the commuting public with an efficient, economical, dependable and safe transportation.
Petitioner METRO, formerly Meralco Transit Organization, Inc., was a qualified transportation
corporation duly organized in accordance with the provisions of the Corporation Code, registered
with the Securities and Exchange Commission, and existing under Philippine laws.
It appears that petitioner LRTA constructed a light rail transit system from Monumento in
Kalookan City to Baclaran in ParaÃ±aque, Metro Manila. To provide the commuting public with
an efficient and dependable light rail transit system, petitioner LRTA, after a bidding process,
entered into a ten (10)-year Agreement for the Management and Operation of the Metro Manila
Light Rail Transit System from June 8, 1984 until June 8, 1994 with petitioner METRO.1 The
Agreement provided, among others, that '
1. Effective on the COMMENCEMENT DATE, METRO shall accept and take over from the
AUTHORITY [LRTA] the management, maintenance and operation of the commissioned and
tested portion of the [Light Rail Transit] System x x x [par. 2.02];
2. The AUTHORITY [LRTA] shall pay METRO the MANAGEMENT FEE as follows x x x
[par. 5.01];
3. In rendering these services, METRO shall apply its best skills and judgment, in attaining the
objectives of the [Light Rail Transit] System in accordance with accepted professional standards.
It shall exercise the required care, diligence and efficiency in the discharge of its duties and
responsibilities and shall work for the best interest of the [Light Rail Transit] System and the
AUTHORITY [LRTA] [par. 2.03];
4. METRO shall be free to employ such employees and officers as it shall deem necessary in
order to carry out the requirements of [the] Agreement. Such employees and officers shall be the
employees of METRO and not of the AUTHORITY [LRTA]. METRO shall prepare a
compensation schedule and the corresponding salaries and fringe benefits of [its] personnel in
consultation with the AUTHORITY [LRTA] [par. 3.05];
5. METRO shall likewise hold the AUTHORITY [LRTA] free and harmless from any and all
fines, penalties, losses and liabilities and litigation expenses incurred or suffered on account of
and by reason of death, injury, loss or damage to passengers and third persons, including the
employees and representatives of the AUTHORITY [LRTA], except where such death, injury,
loss or damage is attributable to a defect or deficiency in the design of the system or its
equipment [par. 3.06].
Pursuant to the above Agreement, petitioner METRO hired its own employees, including herein
private respondents. Petitioner METRO thereafter entered into a collective bargaining agreement
with Pinag-isang Lakas ng Manggagawa sa METRO, Inc. - National Federation of Labor,
otherwise known as PIGLAS-METRO, INC. - NFL - KMU (Union), the certified exclusive
collective bargaining representative of the rank-and-file employees of petitioner METRO.
Meanwhile, on June 9, 1989, petitioners LRTA and METRO executed a Deed of Sale where
petitioner LRTA purchased the shares of stocks in petitioner METRO.2 However, petitioners
LRTA and METRO continued with their distinct and separate juridical personalities. Hence,
when the above ten (10)-year Agreement expired on June 8, 1994, they renewed the same,
initially on a yearly basis, and subsequently on a monthly basis.
On July 25, 2000, the Union filed a Notice of Strike with the National Conciliation and
Mediation Board - National Capital Region against petitioner METRO on account of a deadlock
in the collective bargaining negotiation. On the same day, the Union struck. The power supply
switches in the different light rail transit substations were turned off. The members of the Union
picketed the various substations. They completely paralyzed the operations of the entire light rail
transit system. As the strike adversely affected the mobility of the commuting public, then
Secretary of Labor Bienvenido E. Laguesma issued on that same day an assumption of
jurisdiction order3 directing all the striking employees "to return to work immediately upon
receipt of this Order and for the Company to accept them back under the same terms and
conditions of employment prevailing prior to the strike."4
In their memorandum,5 Department of Labor and Employment Sheriffs Feliciano R. Orihuela,
Jr., and Romeo P. Lemi reported to Sec. Laguesma that they tried to personally serve the Order
of assumption of jurisdiction to the Union through its officials and members on July 26, 2000,
but the latter refused to receive the same. The sheriffs thus posted the Order in the different
stations/terminals of the light rail transit system. Further, the Order of assumption of jurisdiction
was published on the July 27, 2000 issues of the Philippine Daily Inquirer6 and the Philippine
Star.7
Despite the issuance, posting, and publication of the assumption of jurisdiction and return to
work order, the Union officers and members, including herein private respondent workers, failed
to return to work. Thus, effective July 27, 2000, private respondents, Perfecto Venus, Jr.,
Bienvenido P. Santos, Jr., Rafael C. Roy, Nancy C. Ramos, Salvador A. Alfon, Noel R. Santos,
Manuel A. Ferrer, Salvador G. Alinas, Ramon D. Lofranco, Amador H. Policarpio, Reynaldo B.
Gener, and Bienvenido G. Arpilleda, were considered dismissed from employment.
In the meantime, on July 31, 2000, the Agreement for the Management and Operation of the
Metro Manila Light Rail Transit System between petitioners LRTA and METRO expired. The
Board of Directors of petitioner LRTA decided not to renew the contract with petitioner METRO
and directed the LRTA management instead to immediately take over the management and
operation of the light rail transit system to avert the mass transportation crisis.
On October 10, 2000, private respondents Venus, Jr., Santos, Jr., and Roy filed a complaint for
illegal dismissal before the National Labor Relations Commission (NLRC) and impleaded both
petitioners LRTA and METRO. Private respondents Ramos, Alfon, Santos, Ferrer, Alinas,
Lofranco, Policarpio, Gener, and Arpilleda follwed suit on December 1, 2000.
On October 1, 2001, Labor Arbiter Luis D. Flores rendered a consolidated judgment in favor of
the private respondent workers8'
WHEREFORE, judgment is hereby rendered in favor of the complainants and against the
respondents, as follows:
1. Declaring that the complainants were illegally dismissed from employment and ordering their
reinstatement to their former positions without loss of seniority and other rights and privileges.
2. Ordering respondents Metro Transit Organization, Inc. and Light Rail Transit Authority to
jointly and severally pay the complainants their other benefits and full backwages, which as of
June 30, 2001 are as follows:
1. Perfecto H. Venus, Jr. P247,724.36

2. Bienvenido P. Santos, Jr. 247,724.36
3. Rafael C. Roy 247,724.36
4. Nancy [C.] Ramos 254,282.62
5. Salvador A. Alfon 257,764.62
6. Noel R. Santos 221,897.58
7. Manuel A. Ferrer 250,534.78
8. Salvador G. [Alinas] 253,454.88
9. Ramon D. Lofranco 253,642.18
10. Amador H. Policarpio 256,609.22
11. Reynaldo B. Gener 255,094.56
TOTAL P2,746,453.52
jointly and severally pay each of the complainants the amount of P50,000.00 as moral damages.
jointly and severally pay the complainants attorney's fees equivalent to ten percent (10%) of the
total money judgment.
SO ORDERED.
The complaint filed by Bienvenido G. Arpilleda, although initially consolidated with the main
case, was eventually dropped for his failure to appear and submit any document and position
paper.9
On May 29, 2002, on appeal, the NLRC found that the striking workers failed to heed the return
to work order and reversed and set aside the decision of the labor arbiter. The suit against LRTA
was dismissed since "LRTA is a government-owned and controlled corporation created by virtue
of Executive Order No. 603 with an original charter"10 and "it ha[d] no participation whatsoever
with the termination of complainants' employment."11 In fine, the cases against the LRTA and
METRO were dismissed, respectively, for lack of jurisdiction and for lack of merit.
On December 3, 2002, the NLRC denied the workers' Motion for Reconsideration "[t]here being
no showing that the Commission committed, (and that) the Motion for Reconsideration was
based on, palpable or patent errors, and the fact that (the) said motion is not under oath."
On a Petition for Certiorari however, the Court of Appeals reversed the NLRC and reinstated the
Decision rendered by the Labor Arbiter. Public respondent appellate court declared the workers'
dismissal as illegal, pierced the veil of separate corporate personality and held the LRTA and
METRO as jointly liable for back wages.
Hence, these twin Petitions for Review on Certiorari of the decision of public respondent
appellate court filed by LRTA and METRO which this Court eventually consolidated.
In the main, petitioner LRTA argues that it has no employer-employee relationship with private
respondent workers as they were hired by petitioner METRO alone pursuant to its ten (10)-year
Agreement for the Management and Operation of the Metro Manila Light Rail Transit System
with petitioner METRO. Private respondent workers recognized that their employer was not
petitioner LRTA when their certified exclusive collective bargaining representative, the Pinag-
isang Lakas ng Manggagawa sa METRO, Inc. - National Federation of Labor, otherwise known
as PIGLAS-METRO, INC. - NFL - KMU, entered into a collective bargaining agreement with
petitioner METRO. Piercing the corporate veil of METRO was unwarranted, as there was no
competent and convincing evidence of any wrongful, fraudulent or unlawful act on the part of
METRO, and, more so, on the part of LRTA.
Petitioner LRTA further contends that it is a government-owned and controlled corporation with
an original charter, Executive Order No. 603, Series of 1980, as amended, and thus under the
exclusive jurisdiction only of the Civil Service Commission, not the NLRC.
Private respondent workers, however, submit that petitioner METRO was not only fully-owned
by petitioner LRTA, but all aspects of its operations and administration were also strictly
controlled, conducted and directed by petitioner LRTA. And since petitioner METRO is a mere
adjunct, business conduit, and alter ego of petitioner LRTA, their respective corporate veils must
be pierced to satisfy the money claims of the illegally dismissed private respondent employees.
We agree with petitioner LRTA. Section 2 (1), Article IX - B, 1987 Constitution, expressly
provides that "[t]he civil service embraces all branches, subdivisions, instrumentalities, and
agencies of the Government, including government-owned or controlled corporations with
original charters." Corporations with original charters are those which have been created by
special law and not through the general corporation law. Thus, in Philippine National Oil
Company - Energy Development Corporation v. Hon. Leogrado, we held that "under the
present state of the law, the test in determining whether a government-owned or controlled
corporation is subject to the Civil Service Law is the manner of its creation such that government
corporations created by special charter are subject to its provisions while those incorporated
under the general Corporation Law are not within its coverage."12 There should be no dispute
then that employment in petitioner LRTA should be governed only by civil service rules, and not
the Labor Code and beyond the reach of the Department of Labor and Employment, since
petitioner LRTA is a government-owned and controlled corporation with an original charter,
Executive Order No. 603, Series of 1980, as amended.
In contrast, petitioner METRO is covered by the Labor Code despite its later acquisition by
petitioner LRTA. In Lumanta v. National Labor Relations Commission,13 this Court ruled
that labor law claims against government-owned and controlled corporations without original
charter fall within the jurisdiction of the Department of Labor and Employment and not the Civil
Service Commission. Petitioner METRO was originally organized under the Corporation Code,
and only became a government-owned and controlled corporation after it was acquired by
petitioner LRTA. Even then, petitioner METRO has no original charter, hence, it is the
Department of Labor and Employment, and not the Civil Service Commission, which has
jurisdiction over disputes arising from the employment of its workers. Consequently, the terms
and conditions of such employment are governed by the Labor Code and not by the Civil Service
Rules and Regulations.
We therefore hold that the employees of petitioner METRO cannot be considered as employees
of petitioner LRTA. The employees hired by METRO are covered by the Labor Code and are
under the jurisdiction of the Department of Labor and Employment, whereas the employees of
petitioner LRTA, a government-owned and controlled corporation with original charter, are
covered by civil service rules. Herein private respondent workers cannot have the best of two
worlds, e.g., be considered government employees of petitioner LRTA, yet allowed to strike as
private employees under our labor laws. Department of Justice Opinion No. 108, Series of 1999,
issued by then Secretary of Justice Serafin R. Cuevas on whether or not employees of petitioner
METRO could go on strike is persuasive'
We believe that METRO employees are not covered by the prohibition against strikes applicable
to employees embraced in the Civil Service. It is not disputed, but in fact conceded, that METRO
employees are not covered by the Civil Service. This being so, METRO employees are not
covered by the Civil Service law, rules and regulations but are covered by the Labor Code and,
therefore, the rights and prerogatives granted to private employees thereunder, including the right
to strike, are available to them.
Moreover, as noted by Secretary Benjamin E. Diokno, of the Department of Budget and

Management, in his letter dated February 22, 1999, the employees of METRO are not entitled to
the government amelioration assistance authorized by the President pursuant to Administrative
Order No. 37 for government employees, because the employees of METRO are not government
employees since Metro, Inc. "could not be considered as GOCC as defined under Section 3 (b) of
E.O. 518 x x x x"14
Indeed, there was never an intention to consider the employees of petitioner METRO as
government employees of petitioner LRTA as well - neither from the beginning, nor until the
end. Otherwise, they could have been easily converted from being employees in the private
sector and absorbed as government employees covered by the civil service when petitioner
LRTA acquired petitioner METRO in 1989. The stubborn fact is that they remained private
employees with rights and prerogatives granted to them under the Labor Code, including the
right to strike, which they exercised and from which the instant dispute arose.
We likewise hold that it is inappropriate to pierce the corporate veil of petitioner METRO. In Del
Rosario v. National Labor Relations Commission, we ruled that "[u]nder the law a corporation
is bestowed juridical personality, separate and distinct from its stockholders. But when the
juridical personality of the corporation is used to defeat public convenience, justify wrong,
protect fraud or defend crime, the corporation shall be considered as a mere association of
persons, and its responsible officers and/or stockholders shall be held individually liable. For the
same reasons, a corporation shall be liable for the obligations of a stockholder, or a corporation
and its successor-in-interest shall be considered as one and the liability of the former shall attach
to the latter. But for the separate juridical personality of a corporation to be disregarded, the
wrongdoing must be clearly and convincingly established. It cannot be presumed."15 In Del
Rosario, we also held that the "substantial identity of the incorporators of the two corporations
does not necessarily imply fraud."16
In the instant case, petitioner METRO, formerly Meralco Transit Organization, Inc., was
originally owned by the Manila Electric Company and registered with the Securities and
Exchange Commission more than a decade before the labor dispute. It then entered into a ten-
year agreement with petitioner LRTA in 1984. And, even if petitioner LRTA eventually
purchased METRO in 1989, both parties maintained their separate and distinct juridical
personality and allowed the agreement to proceed. In 1990, this Court, in Light Rail Transit
Authority v. Commission on Audit, even upheld the validity of the said agreement.17
Consequently, the agreement was extended beyond its ten-year period. In 1995, METRO's
separate juridical identity was again recognized when it entered into a collective bargaining
agreement with the workers' union. All these years, METRO's distinct corporate personality
continued quiescently, separate and apart from the juridical personality of petitioner LRTA.
The labor dispute only arose in 2000, after a deadlock occurred during the collective bargaining
between petitioner METRO and the workers' union. This alone is not a justification to pierce the
corporate veil of petitioner METRO and make petitioner LRTA liable to private respondent
workers. There are no badges of fraud or any wrongdoing to pierce the corporate veil of
petitioner METRO.
On this point, the Department of Justice Opinion No. 108, Series of 1999, issued by then
Secretary of Justice Serafin R. Cuevas is once again apropos:
Anent the issue of piercing the corporate veil, it was held in Concept Builders, Inc. v. NLRC
(G.R. No. 108734, May 29, 1996, 257 SCRA 149, 159) that the test in determining the
applicability of the doctrine of piercing the veil of corporate fiction is as follows:
"1. Control, not mere majority or complete stock control, but complete domination, not only of
finances but of policy and business practice in respect to the transaction attacked so that the
corporate entity as to this transaction had at the time no separate mind, will or existence of its
own;
2. Such control must have been used by the defendant to commit fraud or wrong, to perpetuate
the violation of a statutory or other positive legal duty, or dishonest and unjust act in
contravention of plaintiff's legal rights; and
cralawlibrary
3. The aforesaid control and breach of duty must proximately cause the injury or unjust loss
complained of.
The absence of any one of these elements prevents 'piercing the corporate veil.' In applying the
'instrumentality' or 'alter ego' doctrine, the courts are concerned with reality and not form, with
how the corporation operated and the individual defendant's relationship to that operation."
Here, the records do not show that control was used to commit a fraud or wrong. In fact, it
appears that piercing the corporate veil for the purpose of delivery of public service, would lead
to a confusing situation since the outcome would be that Metro will be treated as a mere alter ego
of LRTA, not having a separate corporate personality from LRTA, when dealing with the issue
of strike, and a separate juridical entity not covered by the Civil Service when it comes to other
matters. Under the Constitution, a government corporation is either one with original charter or
one without original charter, but never both.18
In sum, petitioner LRTA cannot be held liable to the employees of petitioner METRO.
With regard the issue of illegal dismissal, petitioner METRO maintains that private respondent
workers were not illegally dismissed but should be deemed to have abandoned their jobs after
defying the assumption of jurisdiction and return-to-work order issued by the Labor Secretary.
Private respondent workers, on the other hand, submit that they could not immediately return to
work as the light rail transit system had ceased its operations.
We find for the private respondent workers. In Batangas Laguna Tayabas Bus Co. v. National
Labor Relations Commission,19 we said that the five-day period for the strikers to obey the Order
of the Secretary of Justice and return to work was not sufficient as "some of them may have left
Metro Manila and did not have enough time to return during the period given by petitioner,
which was only five days."20 In Batangas Laguna Tayabas Bus Co.,21 we further held'
The contention of the petitioner that the private respondents abandoned their position is also not
acceptable. An employee who forthwith takes steps to protest his lay-off cannot by any logic be
said to have abandoned his work.
For abandonment to constitute a valid cause for termination of employment, there must be a
deliberate, unjustified refusal of the employee to resume his employment. This refusal must be
clearly established. As we stressed in a recent case, mere absence is not sufficient; it must be
accompanied by overt acts unerringly pointing to the fact that the employee simply does not
want to work anymore.
In the instant case, private respondent workers could not have defied the return-to-work order of
the Secretary of Labor simply because they were dismissed immediately, even before they could
obey the said order. The records show that the assumption of jurisdiction and return-to-work
order was issued by Secretary of Labor Bienvenido E. Laguesma on July 25, 2000. The said
order was served and posted by the sheriffs of the Department of Labor and Employment the
following day, on July 26, 2000. Further, the said order of assumption of jurisdiction was duly
published on July 27, 2000, in the Philippine Daily Inquirer and the Philippine Star. On the
same day also, on July 27, 2000, private respondent workers were dismissed. Neither could they
be considered as having abandoned their work. If petitioner METRO did not dismiss the strikers
right away, and instead accepted them back to work, the management agreement between
petitioners LRTA and METRO could still have been extended and the workers would still have
had work to return to.
IN VIEW WHEREOF, the Decision of public respondent Court of Appeals is AFFIRMED

insofar as it holds Metro Transit Organization, Inc. liable for the illegal dismissal of private
respondents and orders it to pay them their benefits and full back wages and moral damages.
Further, Metro Transit Organization, Inc. is ordered to pay attorney's fees equivalent to ten
percent (10%) of the total money judgment. The petition of the Light Rail Transit Authority is
GRANTED, and the complaint filed against it for illegal dismissal is DISMISSED for lack of
merit.
SO ORDERED.
[G.R. No. 94372. June 21, 1991.]
SAMAHANG MANGGAGAWA NG RIZAL PARK and DOMINGO ENRIQUEZ,

Petitioners, v. NATIONAL LABOR RELATIONS COMMISSION and NATIONAL PARK
DEVELOPMENT COMMITTEE, Respondents.
Merito R. Fernandez for petitioners.
DECISION
CRUZ, J.:
The petitioners were dismissed by the National Park Development Committee, private
respondent herein, on the supercilious ground that their continued employment was "not
compatible with the rules of the New Society." That was in 1972, shortly after the imposition of
martial law. When the petitioners complained to the Department of Labor, their dismissal was
sustained by the Labor Arbiter. This was not surprising because the year was 1976 and martial
law was still in force.
What is surprising is this. When his decision was appealed to the NLRC, the public respondent
also affirmed the dismissal albeit on a different ground. This was on June 29, 1990, long after the
New Society had been banished and discredited. The Freedom Constitution had already called
for the eradication of "all iniquitous vestiges of the previous regime." 1
The petitioners were employees of the private respondent, then under the chairmanship of Imelda
Marcos and the vice-chairmanship of the late Teodoro F. Valencia. Sometime in August 1972,
the petitioner union proposed negotiations for the adoption of a collective bargaining agreement
but the proposal was ignored. The union then filed a notice of strike with the Bureau of Labor
Relations on September 6, 1972, on the grounds of refusal of management to bargain
collectively, refusal to recognize the union, and discrimination of union members. The
conference scheduled by the Bureau for the following day could not even be held because the
private respondent did not send a representative.
On September 16, 1972, petitioner Corazon Alparicio was dismissed. This was followed on
October 3, and 4, 1972, with the unceremonious separation also of the other individual
petitioners. The uniform reason given was the incompatibility of their continued employment
with the rules of the New Society. A sample letter read as follows:chanrob1es virtual 1aw library
Republic of the Philippines
Office of the President
NATIONAL PARKS DEVELOPMENT COMMITTEE

Rizal Park, Manila
October 3, 1972
Date
Mr. Modesto Deunida
Driver Truck In-Charge
Rizal Park
Sir/Madam: chanrob1es virtual 1aw library
This notice terminates your services, effective immediately. Your continued employment under
the NATIONAL PARKS DEVELOPMENT COMMITTEE or in any of its projects is not
compatible with the rules of the New Society.
For immediate compliance and guidance.
(SGD.) JESUS B. ALVAREZ, JR.
Director
The proceedings were delayed when the private respondent submitted that the complaint should
be resolved by the Office of the President, resulting in the elevation of the matter to Malacañang.
The case was returned to the public respondent on the finding that it fell under the jurisdiction of
the NLRC pursuant to P.D. No. 21, promulgated on October 14, 1972. 2
The Labor Arbiter dismissed the case, holding that P.D. No. 21 was not applicable, the
dismissals having been made before its effectivity date. His decision was duly appealed to the
NLRC, but action on the appeal was also delayed, and further still when the records of the case
were among those burned in the fire at the NLRC building on December 13, 1983. According to
the NLRC, it took some time before they could be reconstituted. 3
In its own decision, 4 the reorganized NLRC still saw fit to sustain the dismissals made by the
private respondent and declared as follows: chanrob1es virtual 1aw library
A perusal of the evidence adduced shows that the charge of unfair labor practice allegedly
committed by the respondent has not been sufficiently proven. It is well settled that a charge for
unfair labor practice must be proven by clear and convincing evidence, which is miserably
wanting in this case.
The NLRC assumed all the time that it had jurisdiction over the case. So apparently have the
petitioners in the petition now before us as the said decision is challenged only for grave abuse of
discretion in upholding the invalid dismissals. The Solicitor General has moved for dismissal,
but not on jurisdictional grounds. chanrobles virtual lawlibrary
In recent decisions, this Court has held that the National Parks Development Committee is a
government agency whose employees are covered by the civil service rules and not the Labor
Code.
In Perlas v. People of the Philippines, 5 we held that the Sandiganbayan had jurisdiction over the
acting director of the Committee who was under prosecution for estafa, thus: chanrob1es virtual 1aw library
The National Parks Development Committee was created originally as an Executive Committee
on January 14, 1963, for the development of the Quezon Memorial, Luneta and other national
parks (Executive Order No. 30). It was later designated as the National Parks Development
Committee (NPDC) on February 7, 1974 (E.O. No. 69). On January 9, 1966, Mrs. Imelda R.
Marcos and Teodoro F. Valencia were designated Chairman and Vice-Chairman respectively
(E.O. No. 3). Despite an attempt to transfer it to the Bureau of Forest Development. Department
of Natural Resources, on December 1, 1975 (Letter of Implementation No. 39, issued pursuant to
PD No. 830, dated November 27, 1975), the NPDC has remained under the Office of the
President (E.O. No. 709, dated July 27, 1981).
Affirming that finding, we said in Republic v. Court of Appeals 6 as follows: chanrobles virtualawlibrary chanrobles.com:chanrobles.com.ph
Since NPDC is a government agency, its employees are covered by civil service rules and
regulations (Sec. 2, Article IX, 1987 Constitution). Its employees are civil service employees
(Sec. 14, Executive Order No. 180).
While NPDC employees are allowed under the 1987 Constitution to organize and join unions of
their choice, there is as yet no law permitting them to strike. In case of a labor dispute between
the employees and the government, Section 15 of Executive Order No. 180 dated June 1, 1987
provides that the Public Sector Labor-Management Council, not the Department of Labor and
Employment, shall hear the dispute. Clearly, the Court of Appeals and the lower court erred in
holding that the labor dispute between the NPDC and the members of the NPDSA is cognizable
by the Department of Labor and Employment.
Nevertheless, considering that this case has been pending since 1972 and all the evidence needed
to resolve it is before us, and more so because the issue presents no special difficulty, the Court
feels it should be decided now, without going through the correct procedural formalities that
anyway will result in the same conclusion.
Accordingly, we rule directly as follows.
A mere reading of the termination notice will readily show that the dismissals were not for cause
and that the reason given was prima facie invalid. The general statement that the employment of
the petitioners was not consonant with the rules of the New Society was a preposterous
justification. There was no indication of the specific rules supposedly violated nor was there a
showing, assuming the said rules had been pinpointed, of how or when they had been breached
by the dismissed employees. Neither was it established that the employees were informed of the
charges against them or that they were given an opportunity to be heard in their defense.
Such cavalier treatment of the employees could have been permitted under the so-called New
Society but cannot be countenanced now under the restored democracy. It is truly amazing that it
was sustained by the present NLRC and no less astonishing that it is now defended by the Office
of the Solicitor General. That office suggests that the burden of proof was on the petitioners, as
complainants, to show that their dismissal was illegal. This is incorrect; that office has it
backwards. It is settled that in cases of dismissal, it is the employer who must prove its validity,
not the employee who must prove its invalidity. chanrobles law library
It must be borne in mind that the basic principle in termination cases is that the burden of proof
rests upon the employer to show that the dismissal is for just cause and failure to do so would
necessarily mean that the dismissal is not justified and, therefore the employee is entitled to be
reinstated in accordance with the mandate of Article 280 of the New Labor Code. 7
By simply saying that the continued employment of the petitioners was not consistent with the
rules of the New Society, the private respondent failed to discharge the burden of proving that
the employees deserved to be dismissed. In sustaining the dismissals despite their undisguised
arbitrariness, the NLRC committed grave abuse of discretion correctible by the extraordinary
writ of certiorari under Rule 65 of the Rules of Court.
The insolence of the Marcos government should have been corrected by now, after more than
five years since the people power revolution that banished the deposed President and with him, it
was hoped then, all the oppressions of his discredited regime. It seems, however, that the effects
of past arrogance have not yet completely disappeared and, worse, are still being affirmed and
stoutly defended now by the new government. The Court will not allow this.
WHEREFORE, the petition is GRANTED. The decision of the NLRC dated June 29, 1990, is
REVERSED. The private respondent is ordered to REINSTATE all the individual petitioners
without loss of seniority rights and to pay them five years back salaries. 8
SO ORDERED.
[G.R. No. 80767. April 22, 1991.]
BOY SCOUTS OF THE PHILIPPINES, Petitioner, v. NATIONAL LABOR RELATIONS

COMMISSION, FORTUNATO ESGUERRA, ROBERTO MALABORBOR,
ESTANISLAO MISA, VICENTE EVANGELISTA, and MARCELINO GARCIA,
Respondents.
Julio O. Lopez for Petitioner.
SYLLABUS
1. COMMONWEALTH ACT NO. III AS AMENDED BY PRESIDENTIAL DECREE NO.

460; BOY SCOUTS OF THE PHILIPPINES; FUNCTION, WITH PUBLIC ASPECT. — BSP’s
functions as set out in its statutory charter do have a public aspect. BSP’s functions do relate to
the fostering of the public virtues of citizenship and patriotism and the general improvement of
the moral spirit and fiber of our youth. The social value of activities like those to which the BSP
dedicates itself by statutory mandate have in fact, been accorded constitutional recognition
(Article II of the 1987 Constitution). The public character of BSP’s functions and activities must
be conceded, for they pertain to the educational, civic and social development of the youth which
constitutes a very substantial and important part of the nation.
2. ID.; ID.; NATIONAL EXECUTIVE BOARD; SUBSTANTIAL GOVERNMENTAL

PARTICIPATION IN THE CHOICE OF
MEMBERS. — The second aspect that the Court must take into account relates to the
governance of the BSP. The composition of the National Executive Board of the BSP includes,
as noted from Section 5 of its charter quoted earlier, includes seven (7) Secretaries of Executive
Departments. The seven (7) Secretaries (now six [6] in view of the abolition of the Department
of Youth and Sports and merger thereof into the Department of Education, Culture and Sports)
by themselves do not constitute a majority of the members of the National Executive Board. We
must note at the same time that the appointments of members of the National Executive Board,
except only the appointments of the Regional Chairman and Scouts of Senior age from the
various Scout Regions, are subject to ratification and confirmation by the Chief Scout, who is the
President of the Philippines. Vacancies to the Board are filled by a majority vote of the
remaining members thereof, but again subject to ratification and confirmation by the Chief
Scout. We must assume that such confirmation or ratification involves the exercise of choice or
discretion on the part of ratifying or confirming power. It does appears therefore that there is
substantial governmental (i.e., Presidential) participation or intervention in the choice of the
majority of the members of the National Executive Board of the BSP.
3. ID.; ID.; CHARACTER OF ASSETS AND FUNDS. — The third aspect relates to the
character of the assets and funds of the BSP. The original assets of the BSP were acquired by
purchase or gift or other equitable arrangement with the Boy Scouts of America, of which the
BSP was part before the establishment of the Commonwealth of the Philippines. The BSP
charter, however, does not indicate that such assets were public or statal in character or had
originated from the Government or the State. According to petitioner BSP, its operating funds
used for carrying out its purposes and programs, are derived principally from membership dues
paid by the Boy Scouts themselves and from property rentals. In this respect, the BSP appears
similar to private non-stock, non-profit corporations, although its charter expressly envisages
donations and contributions to it from the Government and any of its agencies and
instrumentalities. We note only that BSP funds have not apparently heretofore been regarded as
public funds by the Commission on Audit, considering that such funds have not been audited by
the Commission.
4. ID.; ID.; A GOVERNMENT-CONTROLLED CORPORATION AND

INSTRUMENTALITY OF THE GOVERNMENT. — While the BSP may be seen to be a mixed
type of entity, combining aspects of both public and private entities, we believe that considering
the character of its purposes and its functions, the statutory designation of the BSP as "a public
corporation" and the substantial participation of the Government in the selection of members of
the National Executive Board of the BSP, the BSP, as presently constituted under its charter, is a
government-controlled corporation within the meaning of Article IX (B) (2) (1) of the
Constitution. We are fortified in this conclusion when we note that the Administrative Code of
1987 designates the BSP as one of the attached agencies of the Department of Education, Culture
and Sports ("DECS"). We believe that the BSP is appropriately regarded as "a government
instrumentality" under the 1987 Administrative Code.
5. ADMINISTRATIVE LAW; ADMINISTRATIVE CODE OF 1987; AGENCY OF THE

GOVERNMENT, DEFINED. — An "agency of the Government" is defined as referring to any
of the various units of the Government including a department, bureau, office, instrumentality,
government-owned or-controlled corporation, or local government or distinct unit therein.
6. ID.; ID.; GOVERNMENT INSTRUMENTALITY, DEFINED. — "Government

instrumentality" is in turn defined in the 1987 Administrative Code in the following manner:
"Instrumentality — refers to any agency of the National Government, not integrated within the
department framework, vested with special functions or jurisdiction by law, endowed with some
if not all corporate powers, administering special funds, and enjoying operational autonomy,
usually through a charter. This term includes regulatory agencies, chartered institutions and
government-owned or controlled corporations." cralaw virtua1aw library
7. ID.; ID.; CHARTERED INSTITUTION, DEFINED. — The same Code describes a "chartered
institution" in the following terms: "Chartered institution — refers to any agency organized or
operating under a special charter, and vested by law with functions relating to specific
constitutional policies or objectives. This term includes the state universities and colleges, and
the monetary authority of the State."
cralaw virtua1aw library
8. ID.; ID.; EMPLOYEE, EMBRACED WITHIN THE CIVIL SERVICE. — It thus appears that
the BSP may be regarded as both a "government controlled corporation with an original charter"
and as an "instrumentality’ of the Government within the meaning of Article IX (B) (2) (1) of the
Constitution. It follows that the employees of petitioner BSP are embraced within the Civil
Service and are accordingly governed by the Civil Service Law and Regulations.
9. LABOR & SOCIAL LEGISLATION; LABOR CODE; NATIONAL LABOR RELATIONS
OFFICE; WITHOUT JURISDICTION OVER ILLEGAL DISMISSAL OF EMPLOYEE OF
THE BOY SCOUTS OF THE PHILIPPINES. — In view of the foregoing, we hold that both the
Labor Arbiter and public respondent NLRC had no jurisdiction over the complaint filed by
private respondents in NLRC Case No. 1637-84; neither labor agency had before it any matter
which could validly have been passed upon by it in the exercise of original or appellate
jurisdiction. The appealed Decision and Resolution in this case, having been rendered without
jurisdiction, vested no rights and imposed no liabilities upon any of the parties here involved.
10. REMEDIAL LAW; SUPREME COURT; MAY MOTU PROPIO TAKE COGNIZANCE
OF THE ISSUE OF EXISTENCE OR ABSENCE OF JURISDICTION. — That neither party
had expressly raised the issue of jurisdiction in the pleadings poses no obstacle to this ruling of
the Court, which may motu proprio take cognizance of the issue of existence or absence of
jurisdiction and pass upon the same.
DECISION
FELICIANO, J.:
This Petition for Certiorari is directed at (1) the Decision, 1 dated 27 February 1987, and (2) the
Resolution 2 dated 16 October 1987, both issued by the National Labor Relations Commission
("NLRC") in Case No. 1637-84.
Private respondents Fortunato C. Esquerra, Roberto O. Malaborbor, Estanislao M. Misa, Vicente

N. Evangelista and Marcelino P. Garcia, had all been rank-and-file employees of petitioner Boy
Scouts of the Philippines ("BSP"). At the time of termination of their services in February 1985,
private respondents were stationed at the BSP Camp in Makiling, Los Baños, Laguna.
The events which led to such termination of services are as follows: chanrob1es virtual 1aw library
On 19 October 1984, the Secretary-General of petitioner BSP issued Special Orders Nos. 80, 81,
83, 84 and 85 addressed separately to the five (5) private respondents, informing them that on 20
November 1984, they were to be transferred from the BSP Camp in Makiling to the BSP Land
Grant in Asuncion, Davao del Norte. These Orders were opposed by private respondents who, on
4 November 1984, appealed the matter to the BSP National President.
On 6 November 1984, petitioner BSP conducted a pre-transfer briefing at its National

Headquarters in Manila. Private respondents were in attendance during the briefing and they
were there assured that their transfer to Davao del Norte would not involve any diminution in
salary, and that each of them would receive a relocation allowance equivalent to one (1) month’s
basic pay. This assurance, however, failed to persuade private respondents to abandon their
opposition to the transfer orders issued by the BSP Secretary-General.
On 13 November 1984, a complaint 3 (docketed as NLRC Case No. 1 6-84J) for illegal transfer
was filed with the then Ministry of Labor and Employment, Sub-Regional Arbitration Branch
IV, San Pablo City, Laguna. Private respondents there sought to enjoin implementation of
Special Orders Nos. 80, 81, 83, 84 and 85, alleging, among other things, that said orders were
"indubitable and irrefutable action[s] prejudicial not only to [them] but to [their] families and
[would] seriously affect [their] economic stability and solvency considering the present cost of
living."
On 21 November 1984 (or the day immediately following the date of scheduled transfer), the
BSP Camp Manager in Makiling issued a Memorandum requiring the five (5) private
respondents to explain why they should not be charged administratively for insubordination. The
Memorandum was a direct result of the refusal by private respondents, two (2) days earlier, to
accept from petitioner BSP their respective boat tickets to Davao del Norte and their relocation
allowances. chanrobles law library
Meanwhile, in a letter of the same date, the BSP National President informed private respondents
that their refusal to comply with the Special Orders was not sufficiently justified and constituted
rank disobedience. Memoranda subsequently issued by the BSP Secretary-General stressed that
such refusal as well as the explanations proffered therefor, were unacceptable and could
altogether result in termination of employment with petitioner BSP. These warnings
notwithstanding, private respondents continued pertinaciously to disobey the disputed transfer
orders.
Petitioner BSP consequently imposed a five-day suspension on the five (5) private respondents,
in the latter part of January 1985. Subsequently, by Special Order dated 12 February 1985 issued
by the BSP Secretary-General, private respondents’ services were ordered terminated effective
15 February 1985.
On 22 February 1985, private respondents amended their original complaint to include charges
of illegal dismissal and unfair labor practice against petitioner BSP. 4 The Labor Arbiter
thereafter proceeded to hear the complaint.
In a decision 5 dated 31 July 1985, the Labor Arbiter ordered the dismissal of private
respondents’ complaint for lack of merit.
On 27 February 1987, however, the ruling of the Labor Arbiter was reversed by public
respondent, NLRC, which held that private respondents had been illegally dismissed by
petitioner BSP. The dispositive portion of the NLRC decision read: jgc:chanrobles.com.ph
"WHEREFORE, premises considered, the Decision appealed from is hereby SET ASIDE and a
new one entered ordering the respondent-appellee [petitioner BSP] to reinstate the complainants-
appellants [private respondents] to their former positions without loss of seniority rights and
other benefits appurtenant thereto and with full backwages from the time they were illegally
dismissed from the service up to date of their actual reinstatement.
SO ORDERED." cralaw virtua1aw library

The Court notes at the outset that in the Position Paper 6 filed by petitioner BSP with the Labor
Arbiter, it was alleged in the second paragraph thereof, that petitioner is a "civic service, non-
stock and non-profit organization, relying mostly [on] government and public support, existing
under and by virtue of Commonwealth Act. No. 111, as amended, by Presidential Decree No.
460 . . ." A similar allegation was contained in the Brief for Appellee 7 and in the Petition 8 and
Memorandum 9 filed by petitioner BSP with public respondent NLRC and this Court,
respectively. The same allegation, moreover, appeared in the Comment 10 (also treated as the
Memorandum) submitted to this Court by the Solicitor General on behalf of public respondent
NLRC; for their part private respondents stated in their Appeal Memorandum 11 with the NLRC
that petitioner BSP is "by mandate of law a Public Corporation," a statement reiterated by them
in their Memorandum 12 before this Court. chanrobles law library
In a Resolution dated 9 August 1989, this Court required the parties and the Office of the
Government Corporate Counsel to file a comment on the question of whether or not petitioner
BSP is in fact a government-owned or controlled corporation.
Petitioner, private respondents, the Office of the Solicitor General and the Office of the
Government Corporate Counsel filed their respective comments.
The central issue is whether or not the BSP is embraced within the Civil Service as that term is
defined in Article IX (B) (2) (1) of the 1987 Constitution which reads as follows: jgc:chanrobles.com.ph
"The Civil Service embraces all branches, subdivisions, instrumentalities, and agencies of the
Government, including government-owned or controlled corporations with original charters.
x x x"
The answer to the central issue will determine whether or not private respondent NLRC had
jurisdiction to render the Decision and Resolution which are here sought to be nullified.
The responses of the parties, on the one hand, and of the Office of the Solicitor General and the
Office of the Government Corporate Counsel, upon the other hand, in compliance with the
Resolution of this Court of 9 August 1989, present a noteworthy uniformity. Petitioner BSP and
private respondents submit substantially the same view "that the BSP is a purely private
organization." In contrast, the Solicitor General and the Government Corporate Counsel take
much the same position, that is, that the BSP is a "public corporation or a "quasi-public
corporation" and, as well, a "government controlled corporation." cralaw virtua1aw library
Petitioner BSP’s compliance with our Resolution invokes the following provisions of its
Constitution and By-laws: jgc:chanrobles.com.ph
"The Boy Scouts of the Philippines declares that it is an independent, voluntary, non-political,
non-sectarian and non-governmental organization, with obligations towards nation building and
with international orientation." cralaw virtua1aw library
The BSP, petitioner stresses, does not receive any monetary or financial subsidy from the
Government whether on the national or local level. 13 Petitioner declares that it is a "purely
private organization" directed and controlled by its National Executive Board the members of
which are, it is said, all "voluntary scouters, including seven (7) Cabinet Secretaries. 14
Private respondents submitted a supplementary memorandum arguing that while petitioner BSP
was created as a public corporation, it had lost that status when Section 2 of Commonwealth Act
No. 111 as amended by P.D. No. 460 conferred upon it the powers which ordinary private
corporations organized under the Corporation Code have: chanrobles v irtual lawlibrary
"Sec. 2. The said corporation shall have perpetual succession with power to sue and be sued; to
hold such real and personal estate as shall be necessary for corporate purposes, and to receive
real and personal property by gift, devise, or bequest; to adopt a seal, and to alter or destroy the
same at pleasure; to have offices and conduct its business and affairs in the City of Manila and in
the several provinces; to make and adopt by-laws, rules and regulations not inconsistent with the
laws of the Philippines, and generally to do all such acts and things (including the establishment
of regulations for the election of associates and successors: as may be necessary to carry into
effect the provisions of the Act and promote the purposes of said corporation." cralaw virtua1aw library
Private respondents also point out that the BSP is registered as a private employer with the Social
Security System and that all its staff members and employees are covered by the Social Security
Act, indicating that the BSP had lost its personality or standing as a public corporation. It is
further alleged that the BSP’s assets and liabilities, official transactions and financial statements
have never been subjected to audit by the government auditing office, i.e., the Commission on
Audit, being audited rather by the private auditing firm of Sycip Gorres Velayo and Co. Private
respondents finally state that the appointments of BSP officers and staff were not approved or
confirmed by the Civil Service Commission.
The views of the Office of the Solicitor General and the Office of the Government Corporate
Counsel on the above issue appeared to be generally similar. The Solicitor General’s Office,
although it had appeared for the NLRC and filed a Comment on the latter’s behalf on the merits
of the Petition for Certiorari, submitted that the BSP is a government-owned or controlled
corporation, having been created by virtue of Commonwealth Act No. 111 entitled "An Act to
Create a Public Corporation to be known as the Boy Scouts of the Philippines and to Define its
Powers and Purposes." The Solicitor General stressed that the BSP was created in order to
"promote, through organization, and cooperation with other agencies the ability of boys to do
things for themselves and others, to train them in scout craft, and to teach them patriotism,
courage, self-reliance, and kindred virtues, using the methods which are now in common use by
boy scouts." 15 He further noted that the BSP’s objectives and purposes are "solely of a
benevolent character and not for pecuniary profit by its members. 16 The Solicitor General also
underscored the extent of government participation in the BSP under its charter as reflected in
the composition of its governing body: chanrobles law library
"The governing body of the said corporation shall consist of a National Executive Board
composed of (a) the President of the Philippines or his representative; (b) the charter and life
members of the Boy Scouts of the Philippines; (c) the Chairman of the Board of Trustees of the
Philippine Scouting Foundation; (d) the Regional Chairman of the Scout Regions of the
Philippines; (e) the Secretary of Education and Culture, the Secretary of Social Welfare, the
Secretary of National Defense, the Secretary of Labor, the Secretary of Finance, the Secretary of
Youth and Sports, and the Secretary of Local Government and Community Development; (f) an
equal number of individuals from the private sector; (g) the National President of the Girl Scouts
of the Philippines; (h) one Scout of Senior age from each Scout Region to represent the boy
membership; and (i) three representatives of the cultural minorities. Except for the Regional
Chairman who shall be elected by the Regional Scout Councils during their annual meetings, and
the Scouts of their respective regions, all members of the National Executive Board shall be
either by appointment or cooption, subject to ratification and confirmation by the Chief Scout,
who shall be the Head of State. . . ." 17 (Emphasis supplied)
The Government Corporate Counsel, like the Solicitor General, describes the BSP as a "public
corporation" but, unlike the Solicitor General, suggests that the BSP is more of a "quasi
corporation" than a "public corporation." The BSP, unlike most public corporations which are
created for a political purpose, is not vested with political or governmental powers to be
exercised for the public good or public welfare in connection with the administration of civil
government. The Government Corporate Counsel submits, more specifically, that the BSP falls
within the ambit of the term "government-owned or controlled corporation" as defined in Section
2 of P.D. No. 2029 (approved on 4 February 1986) which reads as follows: jgc:chanrobles.com.ph
"A government-owned or controlled corporation is a stock or a non-stock corporation, whether

performing governmental or proprietary functions, which is directly chartered by special law or
if organized under the general corporation law is owned or controlled by the government
directly, or indirectly through a parent corporation or subsidiary corporation, to the extent of at
least a majority of its outstanding capital stock or of its outstanding voting capital stock.
x x x"
(Emphasis supplied)
Examining the relevant statutory provisions and the arguments outlined above, the Court
considers that the following need to be considered in arriving at the appropriate legal
characterization of the BSP for purposes of determining whether its officials and staff members
are embraced in the Civil Service. Firstly, BSP’s functions as set out in its statutory charter do
have a public aspect. BSP’s functions do relate to the fostering of the public virtues of
citizenship and patriotism and the general improvement of the moral spirit and fiber of our youth.
The social value of activities like those to which the BSP dedicates itself by statutory mandate
have in fact, been accorded constitutional recognition. Article II of the 1987 Constitution
includes in the "Declaration of Principles and State Policies," the following: chanrobles.com.ph : virtual law library
"Sec. 13. The State recognizes the vital role of the youth in nation-building and shall promote
and protect their physical, moral, spiritual, intellectual, and social well-being. It shall inculcate in
the youth patriotism and nationalism, and encourage their involvement in public and civic
affairs." cralaw virtua1aw library
At the same time, BSP’s functions do not relate to the governance of any part of territory of the
Philippines; BSP is not a public corporation in the same sense that municipal corporations or
local governments are public corporations. BSP’s functions can not also be described as
proprietary functions in the same sense that the functions or activities of government-owned or
controlled corporations like the National Development Company or the National Steel
Corporation can be described as proprietary or "business-like" in character. Nevertheless, the
public character of BSP’s functions and activities must be conceded, for they pertain to the
educational, civic and social development of the youth which constitutes a very substantial and
important part of the nation.
The second aspect that the Court must take into account relates to the governance of the BSP.
The composition of the National Executive Board of the BSP includes, as noted from Section 5
of its charter quoted earlier, includes seven (7) Secretaries of Executive Departments. The seven
(7) Secretaries (now six [6] in view of the abolition of the Department of Youth and Sports and
merger thereof into the Department of Education, Culture and Sports) by themselves do not
constitute a majority of the members of the National Executive Board. We must note at the same
time that the appointments of members of the National Executive Board, except only the
appointments of the Regional Chairman and Scouts of Senior age from the various Scout
Regions, are subject to ratification and confirmation by the Chief Scout, who is the President of
the Philippines. Vacancies to the Board are filled by a majority vote of the remaining members
thereof, but again subject to ratification and confirmation by the Chief Scout. 18 We must
assume that such confirmation or ratification involves the exercise of choice or discretion on the
part of ratifying or confirming power. It does appears therefore that there is substantial
governmental (i.e., Presidential) participation or intervention in the choice of the majority of the
members of the National Executive Board of the BSP.
The third aspect relates to the character of the assets and funds of the BSP. The original assets of
the BSP were acquired by purchase or gift or other equitable arrangement with the Boy Scouts of
America, of which the BSP was part before the establishment of the Commonwealth of the
Philippines. The BSP charter, however, does not indicate that such assets were public or statal in
character or had originated from the Government or the State. According to petitioner BSP, its
operating funds used for carrying out its purposes and programs, are derived principally from
membership dues paid by the Boy Scouts themselves and from property rentals. In this respect,
the BSP appears similar to private non-stock, non-profit corporations, although its charter
expressly envisages donations and contributions to it from the Government and any of its
agencies and instrumentalities. 19 We note only that BSP funds have not apparently heretofore
been regarded as public funds by the Commission on Audit, considering that such funds have not
been audited by the Commission.
While the BSP may be seen to be a mixed type of entity, combining aspects of both public and
private entities, we believe that considering the character of its purposes and its functions, the
statutory designation of the BSP as "a public corporation" and the substantial participation of the
Government in the selection of members of the National Executive Board of the BSP, the BSP,
as presently constituted under its charter, is a government-controlled corporation within the
meaning of Article IX (B) (2) (1) of the Constitution.
We are fortified in this conclusion when we note that the Administrative Code of 1987
designates the BSP as one of the attached agencies of the Department of Education, Culture and
Sports ("DECS"). 20 An "agency of the Government" is defined as referring to any of the various
units of the Government including a department, bureau, office, instrumentality, government-
owned or-controlled corporation, or local government or distinct unit therein. 21 "Government
instrumentality" is in turn defined in the 1987 Administrative Code in the following manner: chanrobles virtual lawlibrary
"Instrumentality — refers to any agency of the National Government, not integrated within the
department framework, vested with special functions or jurisdiction by law, endowed with some
if not all corporate powers, administering special funds, and enjoying operational autonomy,
usually through a charter. This term includes regulatory agencies, chartered institutions and
government-owned or controlled corporations." 22 (Emphasis supplied)
The same Code describes a "chartered institution" in the following terms: jgc:chanrobles.com.ph
"Chartered institution — refers to any agency organized or operating under a special charter, and
vested by law with functions relating to specific constitutional policies or objectives. This term
includes the state universities and colleges, and the monetary authority of the State." 23
(Emphasis supplied)
We believe that the BSP is appropriately regarded as "a government instrumentality" ‘ under the
1987 Administrative Code.
It thus appears that the BSP may be regarded as both a "government controlled corporation with
an original charter" and as an "instrumentality’ of the Government within the meaning of Article
IX (B) (2) (1) of the Constitution. It follows that the employees of petitioner BSP are embraced
within the Civil Service and are accordingly governed by the Civil Service Law and Regulations.
It remains only to note that even before the effectivity of the 1987 Constitution employees of the
BSP already fell within the scope of the Civil Service. In National Housing Corporation v. Juco,
24 decided in 1985, the Court, speaking through Mr. Justice Gutierrez, held: jgc:chanrobles.com.ph
"There should no longer be any question at this time that employees of government-owned or
controlled corporations are governed by the civil service law and civil service rules and
regulations.
Section 1, Article XII-B of the [1973] Constitution specifically provides: chanrob1es v irtual 1aw lib rary
‘The Civil Service embraces every branch, agency, subdivision and instrumentality of the
Government, including every government-owned or controlled corporation. . . .’
The 1935 Constitution had a similar provision in its Section 1, Article XII which stated: chanrob1es virtual 1aw library
‘A Civil Service embracing all branches and subdivisions of the Government shall be provided
by law.’
The inclusion of ‘government-owned or controlled corporations’ within the embrace of the civil
service shows a deliberate effort of the framers to plug an earlier loophole which allowed
government-owned or controlled corporations to avoid the full consequences of the all
encompassing coverage of the civil service system. The same explicit intent is shown by the
addition of ‘agency’ and ‘instrumentality’ to branches and subdivisions of the Government. All
offices and firms of the government are covered. The amendments introduced in 1973 are not
idle exercises or meaningless gestures. They carry the strong message that civil service coverage
is broad and all-embracing insofar as employment in the government in any of its governmental
or corporate arms is concerned."25 cralaw:red
The complaint in NLRC Case No. 1637-84 having been filed on 13 November 1984, when the
1973 Constitution was still in force, our ruling in Juco applies in the case at bar. 26
In view of the foregoing, we hold that both the Labor Arbiter and public respondent NLRC had
no jurisdiction over the complaint filed by private respondents in NLRC Case No. 1637-84;
neither labor agency had before it any matter which could validly have been passed upon by it in
the exercise of original or appellate jurisdiction. The appealed Decision and Resolution in this
case, having been rendered without jurisdiction, vested no rights and imposed no liabilities upon
any of the parties here involved. That neither party had expressly raised the issue of jurisdiction
in the pleadings poses no obstacle to this ruling of the Court, which may motu proprio take
cognizance of the issue of existence or absence of jurisdiction and pass upon the same. 27
ACCORDINGLY, the Decision of the Labor Arbiter dated 31 July 1985, and the Decision dated
27 February 1987 and Resolution dated 16 October 1987, issued by public respondent NLRC, in
NLRC Case No. 1637-84, are hereby SET ASIDE. All other orders and resolutions rendered in
this case by the Labor Arbiter and the NLRC are likewise SET ASIDE. No pronouncement as to
costs.
Fernan, C.J., Gutierrez, Jr., Bidin and Davide, Jr., JJ., concur.
Endnotes:
[G.R. No. 78909. June 30, 1989.]
MATERNITY CHILDREN’S HOSPITAL, represented by ANTERA L. DORADO,

President, Petitioner, v. THE HONORABLE SECRETARY OF LABOR AND THE
REGIONAL DIRECTOR OF LABOR, REGION X, Respondents.
SYLLABUS
1. LABOR AND SOCIAL LEGISLATION; LABOR CODE; EMPLOYMENT; LABOR

STANDARDS, CONSTRUED. — Labor standards refer to the minimum requirements
prescribed by existing laws, rules, and regulations relating to wages, hours of work, cost of living
allowance and other monetary and welfare benefits, including occupational, safety, and health
standards (Section 7, Rule I, Rules on the Disposition of Labor Standards Cases in the Regional
Office, dated September 16, 1987).
2. ID.; ID.; ID.; LABOR DISPUTES; POWER OF THE REGIONAL DIRECTOR TO

ADJUDICATE MONEY CLAIMS; CONDITIONS. — Under the present rules, a Regional
Director exercises both visitorial and enforcement power over labor standards cases, and is
therefore empowered to adjudicate money claims, provided there still exists an employer-
employee relationship, and the findings of the regional office is not contested by the employer
concerned. (Art. 128-b of the Labor Code, as amended by E.O. No. 111)
3. ID.; ID.; MORE POLICY INSTRUCTIONS NOS. 6 AND 37; ADJUDICATORY POWERS
OF THE REGIONAL DIRECTOR REQUIRES THE EXISTENCE OF EMPLOYER-
EMPLOYEE RELATIONSHIP. — The provisions of MOLE Policy Instructions Nos. 6,
(Distribution of Jurisdiction Over Labor Cases) and 37 (Assignment of Cases to Labor Arbiters)
gave the Regional Directors adjudicatory powers over uncontested money claims discovered in
the course of normal inspection, provided an employer-employee relationship still exists.
4. ID.; ID.; ID.; ID.; CONFIRMED BY E.O. NO. 111. — E.O. 111 authorizes a Regional
Director to order compliance by an employer with labor standards provisions of the Labor Code
and other legislation. It is Our considered opinion however, that the inclusion of the phrase, "The
provisions of Article 217 of this Code to the contrary notwithstanding and in cases where the
relationship of employer-employee still exists." . . in Article 128(b), as amended, above-cited,
merely confirms/reiterates the enforcement adjudication authority of the Regional Director over
uncontested money claims in cases where an employer-employee relationship still exists.
5. ID.; ID.; ID.; ID.; ID.; INTENTION OF POLICY INSTRUCTIONS NOS. 6 AND 37, GIVEN
WEIGHT AND ENTITLED TO GREAT RESPECT. — The amendment of the visitorial and
enforcement powers of the Regional Director (Article 128-b) by said E.O. 111 reflects the
intention enunciated in Policy Instructions Nos. 6 and 37 to empower the Regional Directors to
resolve uncontested money claims in cases where an employer-employee relationship still exists.
This intention must be given weight and entitled to great respect.
6. ID.; LABOR LAWS; EXECUTIVE ORDER NO. 111, A CURATIVE STATUTE WITH
RETROSPECTIVE APPLICATION. — The proceedings before the Regional Director must,
perforce, be upheld on the basis of Article 128(b) as amended by E.O. No. 111, dated December
24, 1986, this executive order "to be considered in the nature of a curative statute with
retrospective application." (Progressive Workers’ Union, Et. Al. v. Hon. F.P. Aguas, Et. Al.
(Supra); M. Garcia v. Judge A. Martinez, Et Al., G.R. No. L-47629, May 28, 1979, 90 SCRA
331).
7. ID.; LABOR CODE; ENFORCEMENT POWER OF THE REGIONAL DIRECTOR

CANNOT BE UPHELD IN CASES OF SEPARATED EMPLOYEES. — There is no legal
justification for the award in favor of those employees who were no longer connected with the
hospital at the time the complaint was filed, having resigned therefrom in 1984. The enforcement
power of the Regional Director cannot legally be upheld in cases of separated employees. Article
129 of the Labor Code, cited by petitioner is not applicable as said article is in aid of the
enforcement power of the Regional Director; hence, not applicable where the employee seeking
to be paid underpayment of wages is already separated from the service. His claim is purely a
money claim that has to be the subject of arbitration proceedings and therefore within the
original and exclusive jurisdiction of the Labor Arbiter.
DECISION
MEDIALDEA, J.:
This is a petition for certiorari seeking the annulment of the Decision of the respondent
Secretary of Labor dated September 24, 1986, affirming with modification the Order of
respondent Regional Director of Labor, Region X, dated August 4, 1986, awarding salary
differentials and emergency cost of living allowances (ECOLAs) to employees of petitioner, and
the Order denying petitioner’s motion for reconsideration dated May 13, 1987, on the ground of
grave abuse of discretion.
Petitioner is a semi-government hospital, managed by the Board of Directors of the Cagayan de

Oro Women’s Club and Puericulture Center, headed by Mrs. Antera Dorado, as hold-over
President. The hospital derives its finances from the club itself as well as from paying patients,
averaging 130 per month. It is also partly subsidized by the Philippine Charity Sweepstakes
Office and the Cagayan De Oro City government. chanrobles.com : virtual law library
Petitioner has forty-one (41) employees. Aside from salary and living allowances, the employees
are given food, but the amount spent therefor is deducted from their respective salaries (pp. 77-
78, Rollo).
On May 23, 1986, ten (10) employees of the petitioner employed in different capacities/positions
filed a complaint with the Office of the Regional Director of Labor and Employment, Region X,
for underpayment of their salaries and ECOLAs, which was docketed as ROX Case No. CW-71-
86.
On June 16, 1986, the Regional Director directed two of his Labor Standard and Welfare
Officers to inspect the records of the petitioner to ascertain the truth of the allegations in the
complaints (p. 98, Rollo). Payrolls covering the periods of May, 1974, January, 1985, November,
1985 and May, 1986, were duly submitted for inspection.
On July 17, 1986, the Labor Standard and Welfare Officers submitted their report confirming
that there was underpayment of wages and ECOLAs of all the employees by the petitioner, the
dispositive portion of which reads:jgc:chanrobles.com.ph
"IN VIEW OF THE FOREGOING, deficiency on wage and ecola as verified and confirmed per
review of the respondent payrolls and interviews with the complainant workers and all other
information gathered by the team, it is respectfully recommended to the Honorable Regional
Director, this office, that Antera Dorado, President be ORDERED to pay the amount of SIX
HUNDRED FIFTY FOUR THOUSAND SEVEN HUNDRED FIFTY SIX & 01/100
(P654,756.01), representing underpayment of wages and ecola to the THIRTY SIX (36)
employees of the said hospital as appearing in the attached Annex "F" worksheets and/or
whatever action equitable under the premises." (p. 99, Rollo)
Based on this inspection report and recommendation, the Regional Director issued an Order
dated August 4, 1986, directing the payment of P723,888.58, representing underpayment of
wages and ECOLAs to all the petitioner’s employees, the dispositive portion of which reads: jgc:chanrobles.com.ph
"WHEREFORE, premises considered, respondent Maternity and Children Hospital is hereby

ordered to pay the above-listed complainants the total amount indicated opposite each name, thru
this Office within ten (10) days from receipt thereof. Thenceforth, the respondent hospital is also
ordered to pay its employees/workers the prevailing statutory minimum wage and allowance.
SO ORDERED." (p. 34, Rollo)
Petitioner appealed from this Order to the Minister of Labor and Employment, Hon. Augusto S.
Sanchez, who rendered a Decision on September 24, 1986, modifying the said Order in that
deficiency wages and ECOLAs should be computed only from May 23, 1983 to May 23, 1986,
the dispositive portion of which reads: chanrobles virtual lawlibrary
"WHEREFORE, the August 29, 1986 order is hereby MODIFIED in that the deficiency wages
and ECOLAs should only be computed from May 23, 1983 to May 23, 1986. The case is
remanded to the Regional Director, Region X, for recomputation specifying the amounts due
each the complainants under each of the applicable Presidential Decrees." (p. 40, Rollo)
On October 24, 1986, the petitioner filed a motion for reconsideration which was denied by the
Secretary of Labor in his Order dated May 13, 1987, for lack of merit (p. 43 Rollo).
The instant petition questions the all-embracing applicability of the award involving salary
differentials and ECOLAs, in that it covers not only the hospital employees who signed the
complaints, but also those (a) who are not signatories to the complaint, and (b) those who were
no longer in the service of the hospital at the time the complaints were filed.
Petitioner likewise maintains that the Order of the respondent Regional Director of Labor, as
affirmed with modifications by respondent Secretary of Labor, does not clearly and distinctly
state the facts and the law on which the award was based. In its "Rejoinder to Comment",
petitioner further questions the authority of the Regional Director to award salary differentials
and ECOLAs to private respondents, (relying on the case of Encarnacion v. Baltazar, G.R. No.
L-16883, March 27, 1961, 1 SCRA 860, as authority for raising the additional issue of lack of
jurisdiction at any stage of the proceedings, p. 52, Rollo), alleging that the original and exclusive
jurisdiction over money claims is properly lodged in the Labor Arbiter, based on Article 217,
paragraph 3 of the Labor Code.
The primary issue here is whether or not the Regional Director had jurisdiction over the case and
if so, the extent of coverage of any award that should be forthcoming, arising from his visitorial
and enforcement powers under Article 128 of the Labor Code. The matter of whether or not the
decision states clearly and distinctly statement of facts as well as the law upon which it is based,
becomes relevant after the issue on jurisdiction has been resolved.
This is a labor standards case, and is governed by Art. 128-b of the Labor Code, as amended by
E.O. No. 111. Labor standards refer to the minimum requirements prescribed by existing laws,
rules, and regulations relating to wages, hours of work, cost of living allowance and other
monetary and welfare benefits, including occupational, safety, and health standards (Section 7,
Rule I, Rules on the Disposition of Labor Standards Cases in the Regional Office, dated
September 16, 1987). 1 Under the present rules, a Regional Director exercises both visitorial and
enforcement power over labor standards cases, and is therefore empowered to adjudicate money
claims, provided there still exists an employer-employee relationship, and the findings of the
regional office is not contested by the employer concerned.
Prior to the promulgation of E.O. No. 111 on December 24, 1986, the Regional Director’s
authority over money claims was unclear. The complaint in the present case was filed on May
23, 1986 when E.O. No. 111 was not yet in effect, and the prevailing view was that stated in the
case of Antonio Ong, Sr. v. Henry M. Parel, Et Al., G.R. No. 76710, dated December 21, 1987,
thus:jgc:chanrobles.com.ph
". . . the Regional Director, in the exercise of his visitorial and enforcement powers under Article
128 of the Labor Code, has no authority to award money claims, properly falling within the
jurisdiction of the labor arbiter . . .
". . . If the inspection results in a finding that the employer has violated certain labor standard
laws, then the regional director must order the necessary rectifications. However, this does not
include adjudication of money claims, clearly within the ambit of the labor arbiter’s authority
under Article 217 of the Code." cralaw virtua1aw library
The Ong case relied on the ruling laid down in Zambales Base Metals Inc. v. The Minister of
Labor, Et Al., (G.R. Nos. 73184-88, November 26, 1986, 146 SCRA 50) that the "Regional
Director was not empowered to share in the original and exclusive jurisdiction conferred on
Labor Arbiters by Article 217." cralaw virtua1aw library
We believe, however, that even in the absence of E.O. No. 111, Regional Directors already had
enforcement powers over money claims, effective under P.D. No. 850, issued on December 16,
1975, which transferred labor standards cases from the arbitration system to the enforcement
system.
To clarify matters, it is necessary to enumerate a series of rules and provisions of law on the
disposition of labor standards cases.
Prior to the promulgation of PD 850, labor standards cases were an exclusive function of labor
arbiters, under Article 216 of the then Labor Code (PD No. 442, as amended by PD 570-a),
which read in part: jgc:chanrobles.com.ph
"Art 216. Jurisdiction of the Commission. — The Commission shall have exclusive appellate
jurisdiction over all cases decided by the Labor Arbiters and compulsory arbitrators.
"The Labor Arbiters shall have exclusive jurisdiction to hear and decide the following cases
involving all workers whether agricultural or non-agricultural.
x x x
"(c) All money claims of workers, involving non-payment or underpayment of wages, overtime
compensation, separation pay, maternity leave and other money claims arising from employee-
employer relations, except claims for workmen’s compensation, social security and medicare
benefits;
"(d) Violations of labor standard laws;
"x x x" (Emphasis supplied)
The Regional Director exercised visitorial rights only under then Article 127 of the Code as
follows: jgc:chanrobles.com.ph
"ART. 127. Visitorial Powers. — The Secretary of Labor or his duly authorized representatives,
including, but not restricted, to the labor inspectorate, shall have access to employers’ records
and premises at any time of the day or night whenever work is being undertaken therein, and the
right to copy therefrom, to question any employee and investigate any fact, condition or matter
which may be necessary to determine violations or in aid in the enforcement of this Title and of
any Wage Order or regulation issued pursuant to this Code." cralaw virtua1aw library
With the promulgation of PD 850, Regional Directors were given enforcement powers, in
addition to visitorial powers. Article 127, as amended, provided in part: jgc:chanrobles.com.ph
"SEC. 10. Article 127 of the Code is hereby amended to read as follows: chanrob1es virtual 1aw library
‘Art. 127. Visitorial and enforcement powers. —

‘x x x;
‘(b) The Secretary of Labor or his duly authorized representatives shall have the power to order
and administer, after due notice and hearing, compliance with the labor standards provisions of
this Code based on the findings of labor regulation officers or industrial safety engineers made in
the course of inspection, and to issue writs of execution to the appropriate authority for the
enforcement of their order.’
"x x x"
Labor Arbiters, on the other hand, lost jurisdiction over labor standards cases. Article 216, as
then amended by PD 850, provided in part: chanrobles virtual lawlibrary
"SEC. 22. Article 216 of the Code is hereby amended to read as follows: chanrob1es virtual 1aw library
‘Art. 216. Jurisdiction of Labor Arbiters and the Commission. — (a) The Labor Arbiters shall
have exclusive jurisdiction to hear and decide the following cases involving all workers, whether
agricultural or non-agricultural:chanrob1es virtual 1aw library
‘x x x;
‘(3) All money claims of workers involving non-payment or underpayment of wages, overtime
or premium compensation, maternity or service incentive leave, separation pay and other money
claims arising from employer-employee relations, except claims for employee’s compensation,
social security and medicare benefits and as otherwise provided in Article 127 of this Code.’
"x x x" (Emphasis ours)
Under the then Labor Code therefore (PD 442 as amended by PD 570-a, as further amended by
PD 850), there were three adjudicatory units: The Regional Director, the Bureau of Labor
Relations and the Labor Arbiter. It became necessary to clarify and consolidate all governing
provisions on jurisdiction into one document. 2 On April 23, 1976, MOLE Policy Instructions
No. 6 was issued, and provides in part (on labor standards cases) as follows: jgc:chanrobles.com.ph
"POLICY INSTRUCTIONS NO. 6
TO: All Concerned
SUBJECT: DISTRIBUTION OF JURISDICTION OVER
LABOR CASES.
"x x x
"1. The following cases are under the exclusive original jurisdiction of the Regional Director.
a) Labor standards cases arising from violations of labor standard laws discovered in the course
of inspection or complaints where employer-employee relations still exist;
x x x
"2. The following cases are under the exclusive original jurisdiction of the Conciliation Section
of the Regional Office:chanrob1es virtual 1aw librar y
a) Labor standards cases where employer-employee relations no longer exist;
x x x
"6. The following cases are certifiable to the Labor Arbiters: chanrob1es virtual 1aw library
a) Cases not settled by the Conciliation Section of the Regional Office, namely: chanrob1es vir tual 1aw library
1) labor standard cases where employer-employee relations no longer exist;
x x x" (Emphasis ours)
MOLE Policy Instructions No. 7 (undated) was likewise subsequently issued, enunciating the
rationale for, and the scope of, the enforcement power of the Regional Director, the first and
second paragraphs of which provide as follows: jgc:chanrobles.com.ph
TO: All Regional Directors
SUBJECT: LABOR STANDARDS CASES
Under PD 850, labor standards cases have been taken from the arbitration system and placed
under the enforcement system, except where a) questions of law are involved as determined by
the Regional Director, b) the amount involved exceeds P100,000.00 or over 40% of the equity of
the employer, whichever is lower, c) the case requires evidentiary matters not disclosed or
verified in the normal course of inspection, or d) there is no more employer-employee
relationship.
The purpose is clear: to assure the worker the rights and benefits due to him under labor
standards laws without having to go through arbitration. The worker need not litigate to get what
legally belongs to him. The whole enforcement machinery of the Department of Labor exists to
insure its expeditious delivery to him free of charge." (Emphasis ours)
Under the foregoing, a complaining employee who was denied his rights and benefits due him
under labor standards law need not litigate. The Regional Director, by virtue of his enforcement
power, assured "expeditious delivery to him of his rights and benefits free of charge", provided
of course, he was still in the employ of the firm.
After PD 850, Article 216 underwent a series of amendments (aside from being re-numbered as
Article 217) and with it a corresponding change in the jurisdiction of, and supervision over, the
Labor Arbiters: chanrob1es virtual 1aw library
1. PD 1367 (5-1-78) — gave Labor Arbiters exclusive jurisdiction over unresolved issues in
collective bargaining, etc., and those cases arising from employer-employee relations duly
indorsed by the Regional Directors. (It also removed his jurisdiction over moral or other
damages) In other words, the Labor Arbiter entertained cases certified to him. (Article 228, 1978
Labor Code.)
2. PD 1391 (5-29-78) — all regional units of the National Labor Relations Commission (NLRC)
were integrated into the Regional Offices Proper of the Ministry of Labor; effectively
transferring direct administrative control and supervision over the Arbitration Branch to the
Director of the Regional Office of the Ministry of Labor. "Conciliable cases" which were thus
previously under the jurisdiction of the defunct Conciliation Section of the Regional Office for
purposes of conciliation or amicable settlement, became immediately assignable to the
Arbitration Branch for joint conciliation and compulsory arbitration. In addition, the Labor
Arbiter had jurisdiction even over termination and labor-standards cases that may be assigned to
them for compulsory arbitration by the Director of the Regional Office. PD 1391 merged
conciliation and compulsory arbitration functions in the person of the Labor Arbiter. The
procedure governing the disposition of cases at the Arbitration Branch paralleled those in the
Special Task Force and Field Services Division, with one major exception: the Labor Arbiter
exercised full and untrammelled authority in the disposition of the case, particularly in the
substantive aspect, his decisions and orders subject to review only on appeal to the NLRC. 3
3. MOLE Policy Instructions No. 37 — Because of the seemingly overlapping functions as a

result of PD 1391, MOLE Policy Instructions No. 37 was issued on October 7, 1978, and
provided in part: jgc:chanrobles.com.ph
TO: All Concerned
SUBJECT: ASSIGNMENT OF CASES TO LABOR ARBITERS
Pursuant to the provisions of Presidential Decree No. 1391 and to insure speedy disposition of
labor cases, the following guidelines are hereby established for the information and guidance of
all concerned.chanrobles law library : red
1. Conciliable Cases.
Cases which are conciliable per se i.e., (a) labor standards cases where employer-employee
relationship no longer exists; (b) cases involving deadlock in collective bargaining, except those
falling under P.D. 823, as amended; (c) unfair labor practice cases; and (d) overseas employment
cases, except those involving overseas seamen, shall be assigned by the Regional Director to the
Labor Arbiter for conciliation and arbitration without coursing them through the conciliation
section of the Regional Office.
2. Labor Standards Cases.
Cases involving violation of labor standards laws where employer-employee relationship still
exists shall be assigned to the Labor Arbiters where:chanrob1es virtual 1aw library
a) intricate questions of law are involved; or
b) evidentiary matters not disclosed or verified in the normal course of inspection by labor
regulations officers are required for their proper disposition.
3. Disposition of Cases.
When a case is assigned to a Labor Arbiter, all issues raised therein shall be resolved by him
including those which are originally cognizable by the Regional Director to avoid multiplicity of
proceedings. In other words, the whole case, and not merely issues involved therein, shall be
assigned to and resolved by him.
x x x" (Emphasis ours)
4. PD 1691 (5-1-80) — original and exclusive jurisdiction over unresolved issues in collective
bargaining and money claims, which includes moral or other damages.
Despite the original and exclusive jurisdiction of labor arbiters over money claims, however, the
Regional Director nonetheless retained his enforcement power, and remained empowered to
adjudicate uncontested money claims.
5. BP 130 (8-21-81) — strengthened voluntary arbitration. The decree also returned the Labor
Arbiters as part of the NLRC, operating as Arbitration Branch thereof.
6. BP 227 (6-1-82) — original and exclusive jurisdiction over questions involving legality of
strikes and lock-outs.
The present petition questions the authority of the Regional Director to issue the Order, dated
August 4, 1986, on the basis of his visitorial and enforcement powers under Article 128
(formerly Article 127) of the present Labor Code. It is contended that based on the rulings in the
Ong v. Parel (supra) and the Zambales Base Metals, Inc. v. The Minister of Labor (supra) cases,
a Regional Director is precluded from adjudicating money claims on the ground that this is an
exclusive function of the Labor Arbiter under Article 217 of the present Code.
On August 4, 1986, when the order was issued, Article 128(b) 4 read as follows: jgc:chanrobles.com.ph
"(b) The Minister of Labor or his duly authorized representatives shall have the power to order
and administer, after due notice and hearing, compliance with the labor standards provisions of
this Code based on the findings of labor regulation officers or industrial safety engineers made in
the course of inspection, and to issue writs of execution to the appropriate authority for the
enforcement of their order, except in cases where the employer contests the findings of the labor
regulations officer and raises issues which cannot be resolved without considering evidentiary
matters that are not verifiable in the normal course of inspection." (Emphasis ours)
On the other hand, Article 217 of the Labor Code as amended by P.D. 1691, effective May
1,1980; Batas Pambansa Blg. 130, effective August 21, 1981; and Batas Pambansa Blg. 227,
effective June 1, 1982, inter alia, provides:
jgc:chanrobles.com.ph
"ART. 217. Jurisdiction of Labor Arbiters and the Commission. — (a) The Labor Arbiters shall
have the original and exclusive jurisdiction to hear and decide within thirty (30) working days
after submission of the case by the parties for decision, the following cases involving all
workers, whether agricultural or non-agricultural: jgc:chanrobles.com.ph
"1. Unfair labor practice cases;
"2. Those that workers may file involving wages, hours of work and other terms and conditions
of employment;
"3. All money claims of workers, including those based on non-payment or underpayment of
wages, overtime compensation, separation pay and other benefits provided by law or appropriate
agreement, except claims for employees’ compensation, social security, medicare and maternity
benefits;
"4. Cases involving household services; and
"5. Cases arising from any violation of Article 265 of this Code, including questions involving
the legality of strikes and lockouts." (Emphasis ours)
The Ong and Zambales cases involved workers who were still connected with the company.
However, in the Ong case, the employer disputed the adequacy of the evidentiary foundation
(employees’ affidavits) of the findings of the labor standards inspectors while in the Zambales
case, the money claims which arose from alleged violations of labor standards provisions were
not discovered in the course of normal inspection. Thus, the provisions of MOLE Policy
Instructions Nos. 6, (Distribution of Jurisdiction Over Labor Cases) and 37 (Assignment of
Cases to Labor Arbiters) giving Regional Directors adjudicatory powers over uncontested money
claims discovered in the course of normal inspection, provided an employer-employee
relationship still exists, are inapplicable.
In the present case, petitioner admitted the charge of underpayment of wages to workers still in
its employ; in fact, it pleaded for time to raise funds to satisfy its obligation. There was thus no
contest against the findings of the labor inspectors.
Barely less than a month after the promulgation on November 26, 1986 of the Zambales Base
Metals case, Executive Order No. 111 was issued on December 24, 1986, 5 amending Article
128(b) of the Labor Code, to read as follows: jgc:chanrobles.com.ph
"(b) THE PROVISIONS OF ARTICLE 217 OF THIS CODE TO THE CONTRARY

NOTWITHSTANDING AND IN CASES WHERE THE RELATIONSHIP OF EMPLOYER-
EMPLOYEE STILL EXISTS, the Minister of Labor and Employment or his duly authorized
representatives shall have the power to order and administer, after due notice and hearing,
compliance with the labor standards provisions of this Code AND OTHER LABOR
LEGISLATION based on the findings of labor regulation officers or industrial safety engineers
made in the course of inspection, and to issue writs of execution to the appropriate authority for
the enforcement of their orders, except in cases where the employer contests the findings of the
labor regulation officer and raises issues which cannot be resolved without considering
evidentiary matters that are not verifiable in the normal course of inspection." (Emphasis
supplied)
As seen from the foregoing, EO 111 authorizes a Regional Director to order compliance by an
employer with labor standards provisions of the Labor Code and other legislation. It is Our
considered opinion however, that the inclusion of the phrase, "The provisions of Article 217 of
this Code to the contrary notwithstanding and in cases where the relationship of employer-
employee still exists." . . in Article 128(b), as amended, above-cited, merely confirms/reiterates
the enforcement adjudication authority of the Regional Director over uncontested money claims
in cases where an employer-employee relationship still exists. 6
Viewed in the light of PD 850 and read in coordination with MOLE Policy Instructions Nos. 6, 7
and 37, it is clear that it has always been the intention of our labor authorities to provide our
workers immediate access (when still feasible, as where an employer-employee relationship still
exists) to their rights and benefits, without being inconvenienced by arbitration/litigation
processes that prove to be not only nerve-wracking, but financially burdensome in the long run.
Note further the second paragraph of Policy Instructions No. 7 indicating that the transfer of
labor standards cases from the arbitration system to the enforcement system is.
". . . to assure the workers the rights and benefits due to him under labor standard laws, without
having to go through arbitration . . ." cralaw virtua1aw library
so that
". . . the workers would not litigate to get what legally belongs to him . . . ensuring delivery . . .
free of charge."cralaw virtua1aw library
Social justice legislation, to be truly meaningful and rewarding to our workers, must not be
hampered in its application by long-winded arbitration and litigation. Rights must be asserted
and benefits received with the least inconvenience. Labor laws are meant to promote, not defeat,
social justice.
This view is in consonance with the present "Rules on the Disposition of Labor Standard Cases
in the Regional Offices" 7 issued by the Secretary of Labor, Franklin M. Drilon on September
16, 1987.
Thus, Sections 2 and 3 of Rule II on "Money Claims Arising from Complaint Routine
Inspection", provide as follows:chanrobles virtualawlibrary chanrobles.com:chanrobles.com.ph
"Section 2. Complaint inspection. — All such complaints shall immediately be forwarded to the
Regional Director who shall refer the case to the appropriate unit in the Regional Office for
assignment to a Labor Standards and Welfare Officer (LSWO) for field inspection. When the
field inspection does not produce the desired results, the Regional Director shall summon the
parties for summary investigation to expedite the disposition of the case . . .
"Section 3. Complaints where no employer-employee relationship actually exists. — Where

employer-employee relationship no longer exists by reason of the fact that it has already been
severed, claims for payment of monetary benefits fall within the exclusive and original
jurisdiction of the labor arbiters . . ." (Emphasis ours)
Likewise, it is also clear that the limitation embodied in MOLE Policy Instructions No. 7 to
amounts not exceeding P100,000.00 has been dispensed with, in view of the following
provisions of pars. (b) and (c), Section 7 on "Restitution", the same Rules, thus: jgc:chanrobles.com.ph
"x x x
"(b) Plant-level restitutions may be effected for money claims not exceeding Fifty Thousand
(P50,000.00) . . .
"(c) Restitutions in excess of the aforementioned amount shall be effected at the Regional Office
or at the worksite subject to the prior approval of the Regional Director." cralaw virtua1aw library
which indicate the intention to empower the Regional Director to award money claims in excess
of P100,000.00; provided of course the employer does not contest the findings made, based on
the provisions of Section 8 thereof: jgc:chanrobles.com.ph
"Section 8. Compromise agreement. — Should the parties arrive at an agreement as to the whole
or part of the dispute, said agreement shall be reduced in writing and signed by the parties in the
presence of the Regional Director or his duly authorized representative." cralaw virtua1aw library
E.O. No. 111 was issued on December 24, 1986 or three (3) months after the promulgation of the
Secretary of Labor’s decision upholding private respondents’ salary differentials and ECOLAs
on September 24, 1986. The amendment of the visitorial and enforcement powers of the
Regional Director (Article 128-b) by said E.O. 111 reflects the intention enunciated in Policy
Instructions Nos. 6 and 37 to empower the Regional Directors to resolve uncontested money
claims in cases where an employer-employee relationship still exists. This intention must be
given weight and entitled to great respect. As held in Progressive Workers’ Union, et. al. v. F.P.
Aguas, et. al. G.R. No. 59711-12, May 29, 1985, 150 SCRA 429: jgc:chanrobles.com.ph
". . . The interpretation by officers of laws which are entrusted to their administration is entitled
to great respect. We see no reason to detract from this rudimentary rule in administrative law,
particularly when later events have proved said interpretation to be in accord with the legislative
intent . . ."
The proceedings before the Regional Director must, perforce, be upheld on the basis of Article
128(b) as amended by E.O. No. 111, dated December 24, 1986, this executive order "to be
considered in the nature of a curative statute with retrospective application." (Progressive
Workers’ Union, Et. Al. v. Hon. F.P. Aguas, Et. Al. (Supra); M. Garcia v. Judge A. Martinez, Et
Al., G.R. No. L-47629, May 28, 1979, 90 SCRA 331).
We now come to the question of whether or not the Regional Director erred in extending the
award to all hospital employees. We answer in the affirmative.
The Regional Director correctly applied the award with respect to those employees who signed
the complaint, as well as those who did not sign the complaint, but were still connected with the
hospital at the time the complaint was filed. (See Order, p. 33 dated August 4, 1986 of the
Regional Director, Pedrito de Susi, p. 33, Rollo).
The justification for the award to this group of employees who were not signatories to the
complaint is that the visitorial and enforcement powers given to the Secretary of Labor is
relevant to, and exercisable over establishments, not over the individual members/employees,
because what is sought to be achieved by its exercise is the observance of, and/or compliance by,
such firm/establishment with the labor standards regulations. Necessarily, in case of an award
resulting from a violation of labor legislation by such establishment, the entire
members/employees should benefit therefrom. As aptly stated by then Minister of Labor
Augusto S. Sanchez: chanrobles virtualaw library chanrobles.com:chanrobles.com.ph
". . . It would be highly derogatory to the rights of the workers, if after categorically finding the
respondent hospital guilty of underpayment of wages and ECOLAs, we limit the award to only
those who signed the complaint to the exclusion of the majority of the workers who are similarly
situated. Indeed, this would be not only render the enforcement power of the Minister of Labor
and Employment nugatory, but would be the pinnacle of injustice considering that it would not
only discriminate but also deprive them of legislated benefits.
"x x x" (pp. 38-39, Rollo)
This view is further bolstered by the provisions of Sec. 6, Rule II of the "Rules on the
Disposition of Labor Standards cases in the Regional Offices" (supra) presently enforced, viz: jgc:chanrobles.com.ph
"SECTION 6. Coverage of complaint inspection. — A complaint inspection shall not be limited

to the specific allegations or violations raised by the complainants/workers but shall be a
thorough inquiry into and verification of the compliance by employer with existing labor
standards and shall cover all workers similarly situated." (Emphasis ours)
However, there is no legal justification for the award in favor of those employees who were no
longer connected with the hospital at the time the complaint was filed, having resigned therefrom
in 1984, viz:
chanrob1es virtual 1aw library
1. Jean (Joan) Venzon (See Order, p. 33, Rollo)
2. Rosario Paclijan
3. Adela Peralta
4. Mauricio Nagales
5. Consega Bautista
6. Teresita Agcopra
7. Felix Monleon
8. Teresita Salvador
9. Edgar Cataluna; and
10. Raymond Manija (p. 7, Rollo).
The enforcement power of the Regional Director cannot legally be upheld in cases of separated
employees. Article 129 of the Labor Code, cited by petitioner (p. 54, Rollo) is not applicable as
said article is in aid of the enforcement power of the Regional Director; hence, not applicable
where the employee seeking to be paid underpayment of wages is already separated from the
service. His claim is purely a money claim that has to be the subject of arbitration proceedings
and therefore within the original and exclusive jurisdiction of the Labor Arbiter.
Petitioner has likewise questioned the order dated August 4, 1986 of the Regional Director in
that it does not clearly and distinctly state the facts and the law on which the award is based.
We invite attention to the Minister of Labor’s ruling thereon, as follows: jgc:chanrobles.com.ph
"Finally, the respondent hospital assails the order under appeal as null and void because it does
not clearly and distinctly state the facts and the law on which the awards were based. Contrary to
the pretensions of the respondent hospital, we have carefully reviewed the order on appeal and
we found that the same contains a brief statement of the (a) facts of the case; (b) issues involved;
(c) applicable laws; (d) conclusions and the reasons therefor; (e) specific remedy granted
(amount awarded)." (p. 40, Rollo)
ACCORDINGLY, this petition should be dismissed, as it is hereby DISMISSED, as regards all

persons still employed in the Hospital at the time of the filing of the complaint, but GRANTED
as regards those employees no longer employed at that time.
SO ORDERED.
Fernan (C.J.), Narvasa, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin, Cortes,
Griño-Aquino and Regalado, JJ., concur.
Sarmiento, J., Subject to my opinion in G.R. Nos. 82805 and 83205.
Separate Opinions
MELENCIO-HERRERA, J., concurring: chanrob1es virtual 1aw library
I concur, with the observation that even as reconciled, it would seem inevitable to state that the
conclusion in the Zambales and Ong cases that, prior to Executive Order No. 111, Regional
Directors were not empowered to share the original and exclusive jurisdiction conferred on
Labor Arbiters over money claims, is now deemed modified, if not superseded.
It may not be amiss to state either that under Section 2, Republic Act No. 6715, which amends
further the Labor Code of the Philippines (PD No. 442), Regional Directors have also been
granted adjudicative powers, albeit limited, over monetary claims and benefits of workers,
thereby settling any ambiguity on the matter. Thus: chanrobles.com.ph : virtual law library
"SEC. 2. Article 129 of the Labor Code of the Philippines, as amended, is hereby further
amended to read as follows: chanrob1es virtual 1aw library
Art. 129. Recovery of wages, simple money claims and other benefits. — Upon complaint of any
interested party, the Regional Director of the Department of Labor and Employment or any of
the duly authorized hearing officers of the Department is empowered, through summary
proceeding and after due notice, to hear and decide any matter involving the recovery of wages
and other monetary claims and benefits, including legal interest, owing to an employee or person
employed in domestic or household service or househelper under this Code, arising from
employer-employee relations: Provided, That such complaint does not include a claim for
reinstatement: Provided, further, That the aggregate money claims of each employee or
househelper do not exceed five thousand pesos (P5,000.00). The Regional Director or hearing
officer shall decide or resolve the complaint within thirty (30) calendar days from the date of the
filing of the same . . ."
Endnotes:
[G.R. No. 179652 : March 06, 2012]
PEOPLE’S BROADCASTING SERVICE (BOMBO RADYO PHILS., INC.),

PETITIONER, VS. THE SECRETARY OF THE DEPARTMENT OF LABOR AND
EMPLOYMENT, THE REGIONAL DIRECTOR, DOLE REGION VII, AND
JANDELEON JUEZAN, RESPONDENTS.
RESOLUTION
VELASCO JR., J.:
In a Petition for Certiorari under Rule 65, petitioner People’s Broadcasting Service, Inc. (Bombo
Radyo Phils., Inc.) questioned the Decision and Resolution of the Court of Appeals (CA) dated
October 26, 2006 and June 26, 2007, respectively, in C.A. G.R. CEB-SP No. 00855. cralaw
Private respondent Jandeleon Juezan filed a complaint against petitioner with the Department of
Labor and Employment (DOLE) Regional Office No. VII, Cebu City, for illegal deduction,
nonpayment of service incentive leave, 13th month pay, premium pay for holiday and rest day
and illegal diminution of benefits, delayed payment of wages and noncoverage of SSS, PAG-
IBIG and Philhealth.[1] After the conduct of summary investigations, and after the parties
submitted their position papers, the DOLE Regional Director found that private respondent was
an employee of petitioner, and was entitled to his money claims.[2] Petitioner sought
reconsideration of the Director’s Order, but failed. The Acting DOLE Secretary dismissed
petitioner’s appeal on the ground that petitioner submitted a Deed of Assignment of Bank
Deposit instead of posting a cash or surety bond. When the matter was brought before the CA,
where petitioner claimed that it had been denied due process, it was held that petitioner was
accorded due process as it had been given the opportunity to be heard, and that the DOLE
Secretary had jurisdiction over the matter, as the jurisdictional limitation imposed by Article 129
of the Labor Code on the power of the DOLE Secretary under Art. 128(b) of the Code had been
repealed by Republic Act No. (RA) 7730.[3]
In the Decision of this Court, the CA Decision was reversed and set aside, and the complaint
against petitioner was dismissed. The dispositive portion of the Decision reads as follows:
WHEREFORE, the petition is GRANTED. The Decision dated 26 October 2006 and the
Resolution dated 26 June 2007 of the Court of Appeals in C.A. G.R. CEB-SP No. 00855 are
REVERSED and SET ASIDE. The Order of the then Acting Secretary of the Department of
Labor and Employment dated 27 January 2005 denying petitioner’s appeal, and the Orders of the
Director, DOLE Regional Office No. VII, dated 24 May 2004 and 27 February 2004,
respectively, are ANNULLED. The complaint against petitioner is DISMISSED.[4]
The Court found that there was no employer-employee relationship between petitioner and
private respondent. It was held that while the DOLE may make a determination of the existence
of an employer-employee relationship, this function could not be co-extensive with the visitorial
and enforcement power provided in Art. 128(b) of the Labor Code, as amended by RA
7730. The National Labor Relations Commission (NLRC) was held to be the primary agency in
determining the existence of an employer-employee relationship. This was the interpretation of
the Court of the clause “in cases where the relationship of employer-employee still exists” in Art.
128(b).[5]
From this Decision, the Public Attorney’s Office (PAO) filed a Motion for Clarification of
Decision (with Leave of Court). The PAO sought to clarify as to when the visitorial and
enforcement power of the DOLE be not considered as co-extensive with the power to determine
the existence of an employer-employee relationship.[6] In its Comment,[7] the DOLE sought
clarification as well, as to the extent of its visitorial and enforcement power under the Labor
Code, as amended.
The Court treated the Motion for Clarification as a second motion for reconsideration, granting
said motion and reinstating the petition.[8] It is apparent that there is a need to delineate the
jurisdiction of the DOLE Secretary vis-à-vis that of the NLRC.
Under Art. 129 of the Labor Code, the power of the DOLE and its duly authorized hearing
officers to hear and decide any matter involving the recovery of wages and other monetary
claims and benefits was qualified by the proviso that the complaint not include a claim for
reinstatement, or that the aggregate money claims not exceed PhP 5,000. RA 7730, or an Act
Further Strengthening the Visitorial and Enforcement Powers of the Secretary of Labor, did
away with the PhP 5,000 limitation, allowing the DOLE Secretary to exercise its visitorial and
enforcement power for claims beyond PhP 5,000. The only qualification to this expanded power
of the DOLE was only that there still be an existing employer-employee relationship.
It is conceded that if there is no employer-employee relationship, whether it has been terminated

or it has not existed from the start, the DOLE has no jurisdiction. Under Art. 128(b) of the Labor
Code, as amended by RA 7730, the first sentence reads, “Notwithstanding the provisions of
Articles 129 and 217 of this Code to the contrary, and in cases where the relationship of
employer-employee still exists, the Secretary of Labor and Employment or his duly authorized
representatives shall have the power to issue compliance orders to give effect to the labor
standards provisions of this Code and other labor legislation based on the findings of labor
employment and enforcement officers or industrial safety engineers made in the course of
inspection.” It is clear and beyond debate that an employer-employee relationship must exist for
the exercise of the visitorial and enforcement power of the DOLE. The question now arises, may
the DOLE make a determination of whether or not an employer-employee relationship exists,
and if so, to what extent?
The first portion of the question must be answered in the affirmative.
The prior decision of this Court in the present case accepts such answer, but places a limitation
upon the power of the DOLE, that is, the determination of the existence of an employer-
employee relationship cannot be co-extensive with the visitorial and enforcement power of the
DOLE. But even in conceding the power of the DOLE to determine the existence of an
employer-employee relationship, the Court held that the determination of the existence of an
employer-employee relationship is still primarily within the power of the NLRC, that any finding
by the DOLE is merely preliminary.
This conclusion must be revisited.
No limitation in the law was placed upon the power of the DOLE to determine the existence of
an employer-employee relationship. No procedure was laid down where the DOLE would only
make a preliminary finding, that the power was primarily held by the NLRC. The law did not
say that the DOLE would first seek the NLRC’s determination of the existence of an employer-
employee relationship, or that should the existence of the employer-employee relationship be
disputed, the DOLE would refer the matter to the NLRC. The DOLE must have the power to
determine whether or not an employer-employee relationship exists, and from there to decide
whether or not to issue compliance orders in accordance with Art. 128(b) of the Labor Code, as
amended by RA 7730.
The DOLE, in determining the existence of an employer-employee relationship, has a ready set
of guidelines to follow, the same guide the courts themselves use. The elements to determine the
existence of an employment relationship are: (1) the selection and engagement of the employee;
(2) the payment of wages; (3) the power of dismissal; (4) the employer’s power to control the
employee’s conduct.[9] The use of this test is not solely limited to the NLRC. The DOLE
Secretary, or his or her representatives, can utilize the same test, even in the course of inspection,
making use of the same evidence that would have been presented before the NLRC.
The determination of the existence of an employer-employee relationship by the DOLE must be

respected. The expanded visitorial and enforcement power of the DOLE granted by RA 7730
would be rendered nugatory if the alleged employer could, by the simple expedient of disputing
the employer-employee relationship, force the referral of the matter to the NLRC. The Court
issued the declaration that at least a prima facie showing of the absence of an employer-
employee relationship be made to oust the DOLE of jurisdiction. But it is precisely the DOLE
that will be faced with that evidence, and it is the DOLE that will weigh it, to see if the same
does successfully refute the existence of an employer-employee relationship.
If the DOLE makes a finding that there is an existing employer-employee relationship, it takes
cognizance of the matter, to the exclusion of the NLRC. The DOLE would have no jurisdiction
only if the employer-employee relationship has already been terminated, or it appears, upon
review, that no employer-employee relationship existed in the first place.
The Court, in limiting the power of the DOLE, gave the rationale that such limitation would
eliminate the prospect of competing conclusions between the DOLE and the NLRC. The
prospect of competing conclusions could just as well have been eliminated by according respect
to the DOLE findings, to the exclusion of the NLRC, and this We believe is the more prudent
course of action to take.
This is not to say that the determination by the DOLE is beyond question or review. Suffice it to
say, there are judicial remedies such as a petition for certiorari under Rule 65 that may be availed
of, should a party wish to dispute the findings of the DOLE.
It must also be remembered that the power of the DOLE to determine the existence of an
employer-employee relationship need not necessarily result in an affirmative finding. The
DOLE may well make the determination that no employer-employee relationship exists, thus
divesting itself of jurisdiction over the case. It must not be precluded from being able to reach its
own conclusions, not by the parties, and certainly not by this Court.
Under Art. 128(b) of the Labor Code, as amended by RA 7730, the DOLE is fully empowered to
make a determination as to the existence of an employer-employee relationship in the exercise of
its visitorial and enforcement power, subject to judicial review, not review by the NLRC.
There is a view that despite Art. 128(b) of the Labor Code, as amended by RA 7730, there is still
a threshold amount set by Arts. 129 and 217 of the Labor Code when money claims are involved,
i.e., that if it is for PhP 5,000 and below, the jurisdiction is with the regional director of the
DOLE, under Art. 129, and if the amount involved exceeds PhP 5,000, the jurisdiction is with
the labor arbiter, under Art. 217. The view states that despite the wording of Art. 128(b), this
would only apply in the course of regular inspections undertaken by the DOLE, as differentiated
from cases under Arts. 129 and 217, which originate from complaints. There are several cases,
however, where the Court has ruled that Art. 128(b) has been amended to expand the powers of
the DOLE Secretary and his duly authorized representatives by RA 7730. In these cases, the
Court resolved that the DOLE had the jurisdiction, despite the amount of the money claims
involved. Furthermore, in these cases, the inspection held by the DOLE regional director was
prompted specifically by a complaint. Therefore, the initiation of a case through a complaint
does not divest the DOLE Secretary or his duly authorized representative of jurisdiction under
Art. 128(b).
To recapitulate, if a complaint is brought before the DOLE to give effect to the labor standards
provisions of the Labor Code or other labor legislation, and there is a finding by the DOLE that
there is an existing employer-employee relationship, the DOLE exercises jurisdiction to the
exclusion of the NLRC. If the DOLE finds that there is no employer-employee relationship, the
jurisdiction is properly with the NLRC. If a complaint is filed with the DOLE, and it is
accompanied by a claim for reinstatement, the jurisdiction is properly with the Labor Arbiter,
under Art. 217(3) of the Labor Code, which provides that the Labor Arbiter has original and
exclusive jurisdiction over those cases involving wages, rates of pay, hours of work, and other
terms and conditions of employment, if accompanied by a claim for reinstatement. If a
complaint is filed with the NLRC, and there is still an existing employer-employee relationship,
the jurisdiction is properly with the DOLE. The findings of the DOLE, however, may still be
questioned through a petition for certiorari under Rule 65 of the Rules of Court.
In the present case, the finding of the DOLE Regional Director that there was an employer-
employee relationship has been subjected to review by this Court, with the finding being that
there was no employer-employee relationship between petitioner and private respondent, based
on the evidence presented. Private respondent presented self-serving allegations as well as self-
defeating evidence.[10] The findings of the Regional Director were not based on substantial
evidence, and private respondent failed to prove the existence of an employer-employee
relationship. The DOLE had no jurisdiction over the case, as there was no employer-employee
relationship present. Thus, the dismissal of the complaint against petitioner is proper.cralaw
WHEREFORE, the Decision of this Court in G.R. No. 179652 is hereby AFFIRMED, with the
MODIFICATION that in the exercise of the DOLE’s visitorial and enforcement power, the
Labor Secretary or the latter’s authorized representative shall have the power to determine the
existence of an employer-employee relationship, to the exclusion of the NLRC.
SO ORDERED.
1st decision:
[G.R. NO. 179652 : May 8, 2009]
PEOPLE'S BROADCASTING (BOMBO RADYO PHILS., INC.), Petitioner, v. THE

SECRETARY OF THE DEPARTMENT OF LABOR AND EMPLOYMENT, THE
REGIONAL DIRECTOR, DOLE REGION VII, and JANDELEON JUEZAN,
Respondents.
DECISION
TINGA, J.:
The present controversy concerns a matter of first impression, requiring as it does the
determination of the demarcation line between the prerogative of the Department of Labor and
Employment (DOLE) Secretary and his duly authorized representatives, on the one hand, and the
jurisdiction of the National Labor Relations Commission, on the other, under Article 128 (b) of
the Labor Code in an instance where the employer has challenged the jurisdiction of the DOLE
at the very first level on the ground that no employer-employee relationship ever existed between
the parties.
I.
The instant petition for certiorari under Rule 65 assails the decision and the resolution of the
Court of Appeals dated 26 October 2006 and 26 June 2007, respectively, in C.A. G.R. CEB-SP
No. 00855.1
The petition traces its origins to a complaint filed by Jandeleon Juezan (respondent) against
People's Broasting Service, Inc. (Bombo Radyo Phils., Inc) (petitioner) for illegal deduction,
non-payment of service incentive leave, 13th month pay, premium pay for holiday and rest day
and illegal diminution of benefits, delayed payment of wages and non-coverage of SSS, PAG-
IBIG and Philhealth before the Department of Labor and Employment (DOLE) Regional Office
No. VII, Cebu City.2 On the basis of the complaint, the DOLE conducted a plant level inspection
on 23 September 2003. In the Inspection Report Form,3 the Labor Inspector wrote under the
heading "Findings/Recommendations" "non-diminution of benefits" and "Note: Respondent deny
employer-employee relationship with the complainant - see Notice of Inspection results." In the
Notice of Inspection Results4 also bearing the date 23 September 2003, the Labor Inspector made
the following notations:
Management representative informed that complainant is a drama talent hired on a per drama "
participation basis" hence no employer-employeeship [sic] existed between them. As proof of
this, management presented photocopies of cash vouchers, billing statement, employments of
specific undertaking (a contract between the talent director & the complainant), summary of
billing of drama production etc. They (mgt.) has [sic] not control of the talent if he ventures into
another contract w/ other broasting industries.
On the other hand, complainant Juezan's alleged violation of non-diminution of benefits is

computed as follows:
@ P 2,000/15 days + 1.5 mos = P 6,000
(August 1/03 to Sept 15/03)
Note: Recommend for summary investigation or whatever action deem proper.5
Petitioner was required to rectify/restitute the violations within five (5) days from receipt. No
rectification was effected by petitioner; thus, summary investigations were conducted, with the
parties eventually ordered to submit their respective position papers.6
In his Order dated 27 February 2004,7 DOLE Regional Director Atty. Rodolfo M. Sabulao
(Regional Director) ruled that respondent is an employee of petitioner, and that the former is
entitled to his money claims amounting to P203,726.30. Petitioner sought reconsideration of the
Order, claiming that the Regional Director gave credence to the documents offered by
respondent without examining the originals, but at the same time he missed or failed to consider
petitioner's evidence. Petitioner's motion for reconsideration was denied.8 On appeal to the
DOLE Secretary, petitioner denied once more the existence of employer-employee relationship.
In its Order dated 27 January 2005, the Acting DOLE Secretary dismissed the appeal on the
ground that petitioner did not post a cash or surety bond and instead submitted a Deed of
Assignment of Bank Deposit.9
Petitioner elevated the case to the Court of Appeals, claiming that it was denied due process
when the DOLE Secretary disregarded the evidence it presented and failed to give it the
opportunity to refute the claims of respondent. Petitioner maintained that there is no employer-
employee relationship had ever existed between it and respondent because it was the drama
directors and producers who paid, supervised and disciplined respondent. It also added that the
case was beyond the jurisdiction of the DOLE and should have been considered by the labor
arbiter because respondent's claim exceeded P5,000.00.
The Court of Appeals held that petitioner was not deprived of due process as the essence thereof
is only an opportunity to be heard, which petitioner had when it filed a motion for
reconsideration with the DOLE Secretary. It further ruled that the latter had the power to order
and enforce compliance with labor standard laws irrespective of the amount of individual claims
because the limitation imposed by Article 29 of the Labor Code had been repealed by Republic
Act No. 7730.10 Petitioner sought reconsideration of the decision but its motion was denied.11
Before this Court, petitioner argues that the National Labor Relations Commission (NLRC), and
not the DOLE Secretary, has jurisdiction over respondent's claim, in view of Articles 217 and
128 of the Labor Code.12 It adds that the Court of Appeals committed grave abuse of discretion
when it dismissed petitioner's appeal without delving on the issues raised therein, particularly the
claim that no employer-employee relationship had ever existed between petitioner and
respondent. Finally, petitioner avers that there is no appeal, or any plain, speedy and adequate
remedy in the ordinary course of law available to it.
On the other hand, respondent posits that the Court of Appeals did not abuse its discretion. He
invokes Republic Act No. 7730, which "removes the jurisdiction of the Secretary of Labor and
Employment or his duly authorized representatives, from the effects of the restrictive provisions
of Article 129 and 217 of the Labor Code, regarding the confinement of jurisdiction based on the
amount of claims."13 Respondent also claims that petitioner was not denied due process since
even when the case was with the Regional Director, a hearing was conducted and pieces of
evidence were presented. Respondent stands by the propriety of the Court of Appeals' ruling that
there exists an employer-employee relationship between him and petitioner. Finally, respondent
argues that the instant petition for certiorari is a wrong mode of appeal considering that
petitioner had earlier filed a Petition for Certiorari, Mandamus and Prohibition with the Court of
Appeals; petitioner, instead, should have filed a Petition for Review.14
II.
The significance of this case may be reduced to one simple question does the Secretary of Labor
have the power to determine the existence of an employer-employee relationship? cralawred
To resolve this pivotal issue, one must look into the extent of the visitorial and enforcement
power of the DOLE found in Article 128 (b) of the Labor Code, as amended by Republic Act
7730. It reads:
Article 128 (b) Notwithstanding the provisions of Articles 129 and 217 of this Code to the
contrary, and in cases where the relationship of employer-employee still exists, the Secretary of
Labor and Employment or his duly authorized representatives shall have the power to issue
compliance orders to give effect to the labor standards provisions of this Code and other labor
legislation based on the findings of labor employment and enforcement officers or industrial
safety engineers made in the course of inspection. The Secretary or his duly authorized
representative shall issue writs of execution to the appropriate authority for the enforcement of
their orders, except in cases where the employer contests the findings of the labor employment
and enforcement officer and raises issues supported by documentary proofs which were not
considered in the course of inspection. (emphasis supplied)
xxx
The provision is quite explicit that the visitorial and enforcement power of the DOLE comes into
play only "in cases when the relationship of employer-employee still exists." It also underscores
the avowed objective underlying the grant of power to the DOLE which is "to give effect to the
labor standard provision of this Code and other labor legislation." Of course, a person's
entitlement to labor standard benefits under the labor laws presupposes the existence of
employer-employee relationship in the first place.
The clause "in cases where the relationship of employer-employee still exists" signifies that the
employer-employee relationship must have existed even before the emergence of the
controversy. Necessarily, the DOLE's power does not apply in two instances, namely: (a) where
the employer-employee relationship has ceased; and (b) where no such relationship has ever
existed.
The first situation is categorically covered by Sec. 3, Rule 11 of the Rules on the Disposition of
Labor Standards Cases15 issued by the DOLE Secretary. It reads:
Rule II MONEY CLAIMS ARISING FROM COMPLAINT/ROUTINE INSPECTION
Sec. 3. Complaints where no employer-employee relationship actually exists. Where employer-

employee relationship no longer exists by reason of the fact that it has already been severed,
claims for payment of monetary benefits fall within the exclusive and original jurisdiction of the
labor arbiters. Accordingly, if on the face of the complaint, it can be ascertained that employer-
employee relationship no longer exists, the case, whether accompanied by an allegation of illegal
dismissal, shall immediately be endorsed by the Regional Director to the appropriate branch of
the National Labor Relations Commission (NLRC).
In the recent case of Bay Haven, Inc. v. Abuan,16 this Court recognized the first situation and
accordingly ruled that a complainant's allegation of his illegal dismissal had deprived the DOLE
of jurisdiction as per Article 217 of the Labor Code.17
In the first situation, the claim has to be referred to the NLRC because it is the NLRC which has
jurisdiction in view of the termination of the employer-employee relationship. The same
procedure has to be followed in the second situation since it is the NLRC that has jurisdiction in
view of the absence of employer-employee relationship between the evidentiary parties from the
start.
Clearly the law accords a prerogative to the NLRC over the claim when the employer-employee
relationship has terminated or such relationship has not arisen at all. The reason is obvious. In the
second situation especially, the existence of an employer-employee relationship is a matter
which is not easily determinable from an ordinary inspection, necessarily so, because the
elements of such a relationship are not verifiable from a mere ocular examination. The intricacies
and implications of an employer-employee relationship demand that the level of scrutiny should
be far above the cursory and the mechanical. While documents, particularly documents found in
the employer's
office are the primary source materials, what may prove decisive are factors related to the history
of the employer's business operations, its current state as well as accepted contemporary
practices in the industry. More often than not, the question of employer-employee relationship
becomes a battle of evidence, the determination of which should be comprehensive and intensive
and therefore best left to the specialized quasi-judicial body that is the NLRC.
It can be assumed that the DOLE in the exercise of its visitorial and enforcement power
somehow has to make a determination of the existence of an employer-employee relationship.
Such prerogatival determination, however, cannot be coextensive with the visitorial and
enforcement power itself. Indeed, such determination is merely preliminary, incidental and
collateral to the DOLE's primary function of enforcing labor standards provisions. The
determination of the existence of employer-employee relationship is still primarily lodged with
the NLRC. This is the meaning of the clause "in cases where the relationship of employer-
employee still exists" in Art. 128 (b).
Thus, before the DOLE may exercise its powers under Article 128, two important questions must
be resolved: (1) Does the employer-employee relationship still exist, or alternatively, was there
ever an employer-employee relationship to speak of; and (2) Are there violations of the Labor
Code or of any labor law? cralawred
The existence of an employer-employee relationship is a statutory prerequisite to and a limitation

on the power of the Secretary of Labor, one which the legislative branch is entitled to impose.
The rationale underlying this limitation is to eliminate the prospect of competing conclusions of
the Secretary of Labor and the NLRC, on a matter fraught with questions of fact and law, which
is best resolved by the quasi-judicial body, which is the NRLC, rather than an administrative
official of the executive branch of the government. If the Secretary of Labor proceeds to exercise
his visitorial and enforcement powers absent the first requisite, as the dissent proposes, his office
confers jurisdiction on itself which it cannot otherwise acquire.
The approach suggested by the dissent is frowned upon by common law. To wit:
[I]t is a general rule, that no court of limited jurisdiction can give itself jurisdiction by a wrong
decision on a point collateral to the merits of the case upon which the limit to its jurisdiction
depends; and however its decision may be final on all particulars, making up together that
subject matter which, if true, is within its jurisdiction, and however necessary in many cases it
may be for it to make a preliminary inquiry, whether some collateral matter be or be not within
the limits, yet, upon this preliminary question, its decision must always be open to inquiry in the
superior court.18
A more liberal interpretative mode, "pragmatic or functional analysis," has also emerged in
ascertaining the jurisdictional boundaries of administrative agencies whose jurisdiction is
established by statute. Under this approach, the Court examines the intended function of the
tribunal and decides whether a particular provision falls within or outside that function, rather
than making the provision itself the determining centerpiece of the analysis.19 Yet even under
this more expansive approach, the dissent fails.
A reading of Art. 128 of the Labor Code reveals that the Secretary of Labor or his authorized
representatives was granted visitorial and enforcement powers for the purpose of determining
violations of, and enforcing, the Labor Code and any labor law, wage order, or rules and
regulations issued pursuant thereto. Necessarily, the actual existence of an employer-employee
relationship affects the complexion of the putative findings that the Secretary of Labor may
determine, since employees are entitled to a different set of rights under the Labor Code from the
employer as opposed to non-employees. Among these differentiated rights are those accorded by
the "labor standards" provisions of the Labor Code, which the Secretary of Labor is mandated to
enforce. If there is no employer-employee relationship in the first place, the duty of the employer
to adhere to those labor standards with respect to the non-employees is questionable.
This decision should not be considered as placing an undue burden on the Secretary of Labor in
the exercise of visitorial and enforcement powers, nor seen as an unprecedented diminution of
the same, but rather a recognition of the statutory limitations thereon. A mere assertion of
absence of employer-employee relationship does not deprive the DOLE of jurisdiction over the
claim under Article 128 of the Labor Code. At least a prima facie showing of such absence of
relationship, as in this case, is needed to preclude the DOLE from the exercise of its power. The
Secretary of Labor would not have been precluded from exercising the powers under Article 128
(b) over petitioner if another person with better-grounded claim of employment than that which
respondent had. Respondent, especially if he were an employee, could have very well enjoined
other employees to complain with the DOLE, and, at the same time, petitioner could ill-afford to
disclaim an employment relationship with all of the people under its aegis.
Without a doubt, petitioner, since the inception of this case had been consistent in maintaining
that respondent is not its employee. Certainly, a preliminary determination, based on the
evidence offered, and noted by the Labor Inspector during the inspection as well as submitted
during the proceedings before the Regional Director puts in genuine doubt the existence of
employer-employee relationship. From that point on, the prudent recourse on the part of the
DOLE should have been to refer respondent to the NLRC for the proper dispensation of his
claims. Furthermore, as discussed earlier, even the evidence relied on by the Regional Director in
his order are mere self-serving declarations of respondent, and hence cannot be relied upon as
proof of employer-employee relationship.
III.
Aside from lack of jurisdiction, there is another cogent reason to to set aside the Regional
Director's 27 February 2004 Order. A careful study of the case reveals that the said Order, which
found respondent as an employee of petitioner and directed the payment of respondent's money
claims, is not supported by substantial evidence, and was even made in disregard of the evidence
on record.
It is not enough that the evidence be simply considered. The standard is substantial evidence as
in all other quasi-judicial agencies. The standard employed in the last sentence of Article 128(b)
of the Labor Code that the documentary proofs be "considered in the course of inspection" does
not apply. It applies only to issues other than the fundamental issue of existence of employer-
employee relationship. A contrary rule would lead to controversies on the part of labor officials
in resolving the issue of employer-employee relationship. The onset of arbitrariness is the advent
of denial of substantive due process.
As a general rule, the Supreme Court is not a trier of facts. This applies with greater force in
cases before quasi-judicial agencies whose findings of fact are accorded great respect and even
finality. To be sure, the same findings should be supported by substantial evidence from which
the said tribunals can make its own independent evaluation of the facts. Likewise, it must not be
rendered with grave abuse of discretion; otherwise, this Court will not uphold the tribunals'
conclusion.20 In the same manner, this Court will not hesitate to set aside the labor tribunal's
findings of fact when it is clearly shown that they were arrived at arbitrarily or in disregard of the
evidence on record or when there is showing of fraud or error of law.21
At the onset, it is the Court's considered view that the existence of employer - employee
relationship could have been easily resolved, or at least prima facie determined by the labor
inspector, during the inspection by looking at the records of petitioner which can be found in the
work premises. Nevertheless, even if the labor inspector had noted petitioner's manifestation and
documents in the Notice of Inspection Results, it is clear that he did not give much credence to
said evidence, as he did not find the need to investigate the matter further. Considering that the
documents shown by petitioner, namely: cash vouchers, checks and statements of account,
summary billings evidencing payment to the alleged real employer of respondent, letter-contracts
denominated as "Employment for a Specific Undertaking," prima facie negate the existence of
employer-employee relationship, the labor inspector could have exerted a bit more effort and
looked into petitioner's payroll, for example, or its roll of employees, or interviewed other
employees in the premises. After all, the labor inspector, as a labor regulation officer is given
"access to employer's records and premises at any time of day or night whenever work is being
undertaken therein, and the right to copy therefrom, to question any employee and investigate
any fact, condition or matter which may be necessary to determine violations or which may aid
in the enforcement of this Code and of any labor law, wage order or rules and regulations
pursuant thereto."22 Despite these far-reaching powers of labor regulation officers, records reveal
that no additional efforts were exerted in the course of the inspection.
The Court further examined the records and discovered to its dismay that even the Regional
Director turned a blind eye to the evidence presented by petitioner and relied instead on the self-
serving claims of respondent.
In his position paper, respondent claimed that he was hired by petitioner in September 1996 as a
radio talent/spinner, working from 8:00 am until 5 p.m., six days a week, on a gross rate of
P60.00 per script, earning an average of P15,0000.00 per month, payable on a semi-monthly
basis. He added that the payment of wages was delayed; that he was not given any service
incentive leave or its monetary commutation, or his 13th month pay; and that he was not made a
member of the Social Security System (SSS), Pag-Ibig and PhilHealth. By January 2001, the
number of radio programs of which respondent was a talent/spinner was reduced, resulting in the
reduction of his monthly income from P15,000.00 to only P4,000.00, an amount he could barely
live on. Anent the claim of petitioner that no employer-employee relationship ever existed,
respondent argued that that he was hired by petitioner, his wages were paid under the payroll of
the latter, he was under the control of petitioner and its agents, and it was petitioner who had the
power to dismiss him from his employment.23 In support of his position paper, respondent
attached a photocopy of an identification card purportedly issued by petitioner, bearing
respondent's picture and name with the designation "Spinner"; at the back of the I.D., the
following is written: " This certifies that the card holder is a duly Authorized MEDIA
Representative of BOMBO RADYO PHILIPPINES - THE NO.1 Radio Network in the Country
***BASTA RADYO BOMBO***"24 Respondent likewise included a Certification which reads:
This is to certify that MR. JANDELEON JUEZAN is a program employee of PEOPLE'S
BROADCASTING SERVICES, INC. (DYMF - Bombo Radyo Cebu) since 1990 up to the
present.
Furtherly certifies that Mr. Juezan is receiving a monthly salary of FIFTEEN THOUSAND
(P15,000.00) PESOS.
This certification is issued upon the request of the above stated name to substantiate loan
requirement.
Given this 18th day of April 2000, Cebu City, Philippines.
(signed)
GREMAN B. SOLANTE
Station Manager
On the other hand, petitioner maintained in its position paper that respondent had never been its
employee. Attached as annexes to its position paper are photocopies of cash vouchers it issued to
drama producers, as well as letters of employment captioned "Employment for a Specific
Undertaking", wherein respondent was appointed by different drama directors as spinner/narrator
for specific radio programs.25
In his Order, the Regional Director merely made a passing remark on petitioner's claim of lack of
employer-employee relationship a token paragraph and proceeded to a detailed recitation of
respondent's allegations. The documents introduced by petitioner in its position paper and even
those presented during the inspection were not given an iota of credibility. Instead, full
recognition and acceptance was accorded to the claims of respondent from the hours of work to
his monthly salary, to his alleged actual duties, as well as to his alleged "evidence." In fact, the
findings are anchored almost verbatim on the self-serving allegations of respondent.
Furthermore, respondent's pieces of evidence the identification card and the certification issued
by petitioner's Greman Solante' are not even determinative of an employer-employee
relationship. The certification, issued upon the request of respondent, specifically stated that
"MR. JANDELEON JUEZAN is a program employee of PEOPLE'S BROADCASTING
SERVICES, INC. (DYMF - Bombo Radyo Cebu)," it is not therefore "crystal clear that
complainant is a station employee rather than a program employee hence entitled to all the
benefits appurtenant thereto,"26 as found by the DOLE Regional Director. Respondent should be
bound by his own evidence. Moreover, the classification as to whether one is a "station
employee" and "program employee," as lifted from Policy Instruction No. 40,27 dividing the
workers in the broast industry into only two groups is not binding on this Court, especially when
the classification has no basis either in law or in fact.28
Even the identification card purportedly issued by petitioner is not proof of employer-employee
relationship since it only identified respondent as an "Authorized Representative of Bombo
Radyo', " and not as an employee. The phrase gains significance when compared vis a vis the
following notation in the sample identification cards presented by petitioner in its motion for
reconsideration:
1. This is to certify that the person whose picture and signature appear hereon is an employee of
Bombo Radio Philippines.
2. This ID must be worn at all times within Bombo Radyo Philippines premises for proper
identification and security. Furthermore, this is the property of Bombo Radyo Philippines and
must be surrendered upon separation from the company.
HUMAN RESOURCE DEPARMENT
(Signed)
JENALIN D. PALER
HRD HEAD
Respondent tried to address the discrepancy between his identification card and the standard
identification cards issued by petitioner to its employees by arguing that what he annexed to his
position paper was the old identification card issued to him by petitioner. He then presented a
photocopy of another "old" identification card, this time purportedly issued to one of the
employees who was issued the new identification card presented by petitioner.29 Respondent's
argument does not convince. If it were true that he is an employee of petitioner, he would have
been issued a new identification card similar to the ones presented by petitioner, and he should
have presented a copy of such new identification card. His failure to show a new identification
card merely demonstrates that what he has is only his "Media" ID, which does not constitute
proof of his employment with petitioner.
It has long been established that in administrative and quasi-judicial proceedings, substantial
evidence is sufficient as a basis for judgment on the existence of employer-employee
relationship. Substantial evidence, which is the quantum of proof required in labor cases, is "that
amount of relevant evidence which a reasonable mind might accept as adequate to justify a
conclusion."30 No particular form of evidence is required to prove the existence of such
employer-employee relationship. Any competent and relevant evidence to prove the relationship
may be admitted.31 Hence, while no particular form of evidence is required, a finding that such
relationship exists must still rest on some substantial evidence. Moreover, the substantiality of
the evidence depends on its quantitative as well as its qualitative aspects.32
In the instant case, save for respondent's self-serving allegations and self-defeating evidence,
there is no substantial basis to warrant the Regional Director's finding that respondent is an
employee of petitioner. Interestingly, the Order of the Secretary of Labor denying petitioner's
appeal dated 27 January 2005, as well as the decision of the Court of Appeals dismissing the
petition for certiorari, are silent on the issue of the existence of an employer-employee
relationship, which further suggests that no real and proper determination the existence of such
relationship was ever made by these tribunals. Even the dissent skirted away from the issue of
the existence of employer-employee relationship and conveniently ignored the dearth of
evidence presented by respondent.
Although substantial evidence is not a function of quantity but rather of quality, the peculiar
environmental circumstances of the instant case demand that something more should have been
proffered.33 Had there been other proofs of employment, such as respondent's inclusion in
petitioner's payroll, or a clear exercise of control, the Court would have affirmed the finding of
employer-employee relationship. The Regional Director, therefore, committed grievous error in
ordering petitioner to answer for respondent's claims. Moreover, with the conclusion that no
employer-employee relationship has ever existed between petitioner and respondent, it is crystal-
clear that the DOLE Regional Director had no jurisdiction over respondent's complaint. Thus, the
improvident exercise of power by the Secretary of Labor and the Regional Director behooves the
court to subject their actions for review and to invalidate all the subsequent orders they issued.
IV.
The records show that petitioner's appeal was denied because it had allegedly failed to post a
cash or surety bond. What it attached instead to its appeal was the Letter Agreement34 executed
by petitioner and its bank, the cash voucher,35 and the Deed of Assignment of Bank Deposits.36
According to the DOLE, these documents do not constitute the cash or surety bond contemplated
by law; thus, it is as if no cash or surety bond was posted when it filed its appeal.
The Court does not agree.
The provision on appeals from the DOLE Regional Offices to the DOLE Secretary is in the last
paragraph of Art. 128 (b) of the Labor Code, which reads:
An order issued by the duly authorized representative of the Secretary of Labor and Employment
under this article may be appealed to the latter. In case said order involves a monetary award, an
appeal by the employer may be perfected only upon the posting of a cash or surety bond issued
by a reputable bonding company duly accredited by the Secretary of Labor and Employment in
the amount equivalent to the monetary award in the order appealed from. (emphasis supplied)
While the requirements for perfecting an appeal must be strictly followed as they are considered
indispensable interdictions against needless delays and for orderly discharge of judicial business,
the law does admit exceptions when warranted by the circumstances. Technicality should not be
allowed to stand in the way of equitably and completely resolving the rights and obligations of
the parties.37 Thus, in some cases, the bond requirement on appeals involving monetary awards
had been relaxed, such as when (i) there was substantial compliance with the Rules; (ii) the
surrounding facts and circumstances constitute meritorious ground to reduce the bond; (iii) a
liberal interpretation of the requirement of an appeal bond would serve the desired objective of
resolving controversies on the merits; or (iv) the appellants, at the very least exhibited their
willingness and/or good faith by posting a partial bond during the reglementary period.38
A review of the documents submitted by petitioner is called for to determine whether they should
have been admitted as or in lieu of the surety or cash bond to sustain the appeal and serve the
ends of substantial justice.
The Deed of Assignment reads:

DEED OF ASSIGNMENT OF BANK DEPOSIT
WITH SPECIAL POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That I, GREMAN B. SOLANTE in my capacity as Station Manager of DYMF Cebu City,

PEOPLE'S BROADCASTING SERVICES, INC., a corporation duly authorized and existing
under and by virtue of the laws of the Philippines, for and in consideration of the sum of PESOS:
TWO HUNDRED THREE THOUSAND SEVEN HUNDRED TWENTY SIX PESOS & 30/100
ONLY (P203,726.30) Phil. Currency, as CASH BOND GUARANTEE for the monetary award
in favor to the Plaintiff in the Labor Case docketed as LSED Case No. R0700-2003-09-CI-09,
now pending appeal.
That Respondent-Appellant do hereby undertake to guarantee available and sufficient funds

covered by Platinum Savings Deposit (PSD) No. 010-8-00038-4 of PEOPLE'S
BROADCASTING SERVICES, INC. in the amount of PESOS: TWO HUNDRED THREE
THOUSAND SEVEN HUNDRED TWENTY SIX PESOS & 30/100 ONLY (P203,726.30)
payable to Plaintiff-Appellee/Department of Labor and Employment Regional Office VII at
Queen City Development Bank, Cebu Branch, Sanciangko St. Cebu City.
It is understood that the said bank has the full control of Platinum Savings Deposit (PSD) No.
010-8-00038-4 from and after this date and that said sum cannot be withdrawn by the Plaintiff-
Appellee/ Department of Labor and Employment Regional Office VII until such time that a Writ
of Execution shall be ordered by the Appellate Office.
FURTHER, this Deed of Assignment is limited to the principal amount of PESOS: TWO
HUNDRED THREE THOUSAND SEVEN HUNDRED TWENTY SIX PESOS & 30/100
ONLY (P203,726.30) Phil. Currency, therefore, any interest to be earned from the said Deposit
will be for the account holder.
IN WITNESS WHEREOF, I have hereunto affixed my signature this 18th day if June, 2004, in
the City of Cebu, Philippines.
PEOPLE'S BROADCASTING SERVICES, INC.
By:
(Signed)
GREMAN B. SOLANTE
Station Manager
As priorly mentioned, the Deed of Assignment was accompanied by a Letter Agreement between
Queen City Development Bank and petitioner concerning Platinum Savings Deposit (PSD) No.
010-8-00038-4,39 and a Cash Voucher issued by petitioner showing the amount of P203,726.30
deposited at the said bank.
Casting aside the technical imprecision and inaptness of words that mark the three documents, a
liberal reading reveals the documents petitioner did assign, as cash bond for the monetary award
in favor of respondent in LSED Case NO. RO700-2003-CI-09, the amount of P203,726.30
covered by petitioner's PSD Account No. 010-8-00038-4 with the Queen City Development
Bank at Sanciangko St. Cebu City, with the depositary bank authorized to remit the amount to,
and upon withdrawal by respondent and or the Department of Labor and Employment Regional
Office VII, on the basis of the proper writ of execution. The Court finds that the Deed of
Assignment constitutes substantial compliance with the bond requirement.
The purpose of an appeal bond is to ensure, during the period of appeal, against any occurrence
that would defeat or diminish recovery by the aggrieved employees under the judgment if
subsequently affirmed.40 The Deed of Assignment in the instant case, like a cash or surety bond,
serves the same purpose. First, the Deed of Assignment constitutes not just a partial amount, but
rather the entire award in the appealed Order. Second, it is clear from the Deed of Assignment
that the entire amount is under the full control of the bank, and not of petitioner, and is in fact
payable to the DOLE Regional Office, to be withdrawn by the same office after it had issued a
writ of execution. For all intents and purposes, the Deed of Assignment in tandem with the Letter
Agreement and Cash Voucher is as good as cash. Third, the Court finds that the execution of the
Deed of Assignment, the Letter Agreement and the Cash Voucher were made in good faith, and
constituted clear manifestation of petitioner's willingness to pay the judgment amount.
The Deed of Assignment must be distinguished from the type of bank certification submitted by
appellants in Cordova v. Keysa's Boutique,41 wherein this Court found that such bank
certification did not come close to the cash or surety bond required by law. The bank
certification in Cordova merely stated that the employer maintains a depository account with a
balance of P23,008.19, and that the certification was issued upon the depositor's request for
whatever legal purposes it may serve. There was no indication that the said deposit was made
specifically for the pending appeal, as in the instant case. Thus, the Court ruled that the bank
certification had not in any way ensured that the award would be paid should the appeal fail.
Neither was the appellee in the case prevented from making withdrawals from the savings
account. Finally, the amount deposited was measly compared to the total monetary award in the
judgment.42
V.
Another question of technicality was posed against the instant petition in the hope that it would
not be given due course. Respondent asserts that petitioner pursued the wrong mode of appeal
and thus the instant petition must be dismissed. Ï‚Î·Î±Ã±rÎ¿blÎµÅ¡ Î½Î¹râ€ Ï…Î±l lÎ±Ï‰ lÎ¹brÎ±rÃ¿
Once more, the Court is not convinced.
A petition for certiorari is the proper remedy when any tribunal, board or officer exercising
judicial or quasi-judicial functions has acted without or in excess of its jurisdiction, or with grave
abuse of discretion amounting to lack or excess of jurisdiction and there is no appeal, nor any
plain speedy, and adequate remedy at law. There is "grave abuse of discretion" when respondent
acts in a capricious or whimsical manner in the exercise of its judgment as to be equivalent to
lack of jurisdiction.43
Respondent may have a point in asserting that in this case a Rule 65 petition is a wrong mode of
appeal, as indeed the writ of certiorari is an extraordinary remedy, and certiorari jurisdiction is
not to be equated with appellate jurisdiction. Nevertheless, it is settled, as a general proposition,
that the availability of an appeal does not foreclose recourse to the extraordinary remedies, such
as certiorari and prohibition, where appeal is not adequate or equally beneficial, speedy and
sufficient, as where the orders of the trial court were issued in excess of or without jurisdiction,
or there is need to promptly relieve the aggrieved party from the injurious effects of the acts of
an inferior court or tribunal, e.g., the court has authorized execution of the judgment.44 This
Court has even recognized that a recourse to certiorari is proper not only where there is a clear
deprivation of petitioner's fundamental right to due process, but so also where other special
circumstances warrant immediate and more direct action.45
In one case, it was held that the extraordinary writ of certiorari will lie if it is satisfactorily
established that the tribunal acted capriciously and whimsically in total disregard of evidence
material to or even decisive of the controversy,46 and if it is shown that the refusal to allow a
Rule 65 petition would result in the infliction of an injustice on a party by a judgment that
evidently was rendered whimsically and capriciously, ignoring and disregarding uncontroverted
facts and familiar legal principles without any valid cause whatsoever.47
It must be remembered that a wide breadth of discretion is granted a court of justice in certiorari
proceedings.48 The Court has not too infrequently given due course to a petition for certiorari,
even when the proper remedy would have been an appeal, where valid and compelling
considerations would warrant such a recourse.49 Moreover, the Court allowed a Rule 65 petition,
despite the availability of plain, speedy or adequate remedy, in view of the importance of the
issues raised
therein.50 The rules were also relaxed by the Court after considering the public interest involved
in the case;51 when public welfare and the advancement of public policy dictates; when the
broader interest of justice so requires; when the writs issued are null and void; or when the
questioned order amounts to an oppressive exercise of judicial authority.52
"The peculiar circumstances of this case warrant, as we held in Republic v. Court of Appeals,
107 SCRA 504, 524, the 'exercise once more of our exclusive prerogative to suspend our own
rules or to exempt a particular case from its operation as in x x Republic of the Philippines v.
Court of Appeals, et al., (83 SCRA 453, 478-480 [1978]), thus: - x x The Rules have been
drafted with the primary objective of enhancing fair trials and expediting justice. As a corollary,
if their applications and operation tend to subvert and defeat instead of promote and enhance it,
their suspension is justified."53
The Regional Director fully relied on the self-serving allegations of respondent and
misinterpreted the documents presented as evidence by respondent. To make matters worse,
DOLE denied petitioner's appeal based solely on petitioner's alleged failure to file a cash or
surety bond, without any discussion on the merits of the case. Since the petition for certiorari
before the Court of Appeals sought the reversal of the two aforesaid orders, the appellate court
necessarily had to examine the evidence anew to determine whether the conclusions of the
DOLE were supported by the evidence presented. It appears, however, that the Court of Appeals
did not even review the assailed orders and focused instead on a general discussion of due
process and the jurisdiction of the Regional Director. Had the appellate court truly reviewed the
records of the case, it would have seen that there existed valid and sufficient grounds for finding
grave abuse of discretion on the part of the DOLE Secretary as well the Regional Director. In
ruling and acting as it did, the Court finds that the Court of Appeals may be properly subjected to
its certiorari jurisdiction. After all, this Court has previously ruled that the extraordinary writ of
certiorari will lie if it is satisfactorily
Ï‚Î·Î±Ã ±rÎ¿blÎµÅ¡ Î½Î¹râ€ Ï…Î±l lÎ±Ï ‰ lÎ¹brÎ±rÃ ¿
established that the tribunal had acted capriciously and whimsically in total disregard of evidence
material to or even decisive of the controversy.54
The most important consideration for the allowance of the instant petition is the opportunity for
the Court not only to set the demarcation between the NLRC's jurisdiction and the DOLE's
prerogative but also the procedure when the case involves the fundamental challenge on the
DOLE's prerogative based on lack of employer-employee relationship. As exhaustively
discussed here, the DOLE's prerogative hinges on the existence of employer-employee
relationship, the issue is which is at the very heart of this case. And the evidence clearly indicates
private respondent has never been petitioner's employee. But the DOLE did not address, while
the Court of Appeals glossed over, the issue. The peremptory dismissal of the instant petition on
a technicality would deprive the Court of the opportunity to resolve the novel controversy. Ï‚Î·Î±Ã±rÎ ¿blÎµÅ¡ Î½Î¹râ€ Ï…Î±l lÎ±Ï‰ lÎ¹brÎ±rÃ ¿
WHEREFORE, the petition is GRANTED. The Decision dated 26 October 2006 and the
Resolution dated 26 June 2007 of the Court of Appeals in C.A. G.R. CEB-SP No. 00855 are
REVERSED and SET ASIDE. The Order of the then Acting Secretary of the Department of
Labor and Employment dated 27 January 2005 denying petitioner's appeal, and the Orders of the
Director, DOLE Regional Office No. VII, dated 24 May 2004 and 27 February 2004,
respectively, are ANNULLED. The complaint against petitioner is DISMISSED.
SO ORDERED.
[G.R. No. 124382. August 16, 1999.]
PASTOR DIONISIO V. AUSTRIA, Petitioner, v. HON. NATIONAL LABOR

RELATIONS COMMISSION (Fourth Division), CEBU CITY, CENTRAL PHILIPPINE
UNION MISSION CORPORATION OF THE SEVENTH-DAY ADVENTIST, ELDER
HECTOR V. GAYARES, PASTORS REUBEN MORALDE, OSCAR L. ALOLOR,
WILLIAM U. DONATO, JOEL WALES, ELY SACAY, GIDEON BUHAT, ISACHAR
GARSULA, ELISEO DOBLE, PROFIRIO BALACY, DAVID RODRIGO, LORETO
MAYPA, MR. RUFO GASAPO, MR. EUFRONIO IBESATE, MRS. TESSIE BALCY,
MR. ZOSIMO KARA-AN, and MR. ELEUTERIO LOBITANA, Respondents.
DECISION
KAPUNAN, J.:
Subject to the instant petition for certiorari under Rule 65 of the Rules of Court is the Resolution
1 of public respondent National Labor Relations Commission (the "NLRC"), rendered on 23
January 1996, in NLRC Case No. V-0120-93, entitled "Pastor Dionisio V. Austria v. Central
Philippine Union Mission Corporation of Seventh Day Adventists, et. al.," which dismissed the
case for illegal dismissal filed by the petitioner against private respondents for lack of
jurisdiction.
Private Respondent Central Philippines Union Mission Corporation of the Seventh Day
Adventists (hereinafter referred to as the "SDA") is a religious corporation duly organized and
existing under Philippine law and is represented in this case by the other private respondents,
officers of the SDA. Petitioner, on the other hand, was a Pastor of the SDA until 31 October
1991, when his services were terminated.
The records show that petitioner Pastor Dionisio V. Austria worked with the SDA for twenty
eight (28) years from 1963 to 1991. 2 He began his work with the SDA on 15 July 1963 as a
literature evangelist, selling literature of the SDA over the island of Negros. From then on,
petitioner worked his way up the ladder and got promoted several times. In January, 1968,
petitioner became the Assistant Publishing Director in the West Visayan Mission of the SDA. In
July, 1972, he was elevated to the position of Pastor in the West Visayan Mission covering the
island of Panay, and the provinces of Romblon and Guimaras. Petitioner held the same position
up to 1988. Finally, in 1989, petitioner was promoted as District Pastor of the Negros Mission of
the SDA and was assigned at Sagay, Balintawak and Toboso, Negros Occidental, with twelve
(12) churches under his jurisdiction. In January, 1991, petitioner was transferred to Bacolod City.
He held the position of district pastor until his services were terminated on 31 October 1991.
On various occasions from August up to October, 1991, petitioner received several

communications 3 from Mr. Eufronio Ibesate, the treasurer of the Negros Mission asking him to
admit accountability and responsibility for the church tithes and offerings collected by his wife,
Mrs. Thelma Austria, in his district which amounted to P15,078.10, and to remit the same to the
Negros Mission.
In his written explanation dated 11 October 1991, 4 petitioner reasoned out that he should not be
made accountable for the unremitted collections since it was private respondents Pastor Gideon
Buhat and Mr. Eufronio Ibesate who authorized his wife to collect the tithes and offerings since
he was very sick to do the collecting at that time.
Thereafter, on 16 October 1991, at around 7:30 a.m., petitioner went to the office of Pastor
Buhat, the president of the Negros Mission. During said call, petitioner tried to persuade Pastor
Buhat to convene the Executive Committee for the purpose of settling the dispute between him
and the private respondent, Pastor David Rodrigo. The dispute between David Rodrigo and
petitioner arose from an incident in which petitioner assisted his friend, Danny Diamada, to
collect from Pastor Rodrigo the unpaid balance for the repair of the latter’s motor vehicle which
he failed to pay to Diamada. 5 Due to the assistance of petitioner in collecting Pastor Rodrigo’s
debt, the latter harbored ill-feelings against petitioner. When news reached petitioner that Pastor
Rodrigo was about to file a complaint against him with the Negros Mission, he immediately
proceeded to the office of Pastor Buhat on the date abovementioned and asked the latter to
convene the Executive Committee. Pastor Buhat denied the request of petitioner since some
committee members were out of town and there was no quorum. Thereafter, the two exchanged
heated arguments. Petitioner then left the office of Pastor Buhat. While on his way out, petitioner
overheard Pastor Buhat saying "Pastor daw inisog na ina iya (Pastor you are talking tough)." 6
Irked by such remark, petitioner returned to the office of Pastor Buhat, and tried to overturn the
latter’s table, though unsuccessfully, since it was heavy. Thereafter, petitioner banged the attaché
case of Pastor Buhat on the table, scattered the books in his office, and threw the phone. 7
Fortunately, private respondents Pastors Yonillo Leopoldo and Claudio Montaño were around
and they pacified both Pastor Buhat and petitioner.
On 17 October 1991, petitioner received a letter 8 inviting him and his wife to attend the
Executive Committee meeting at the Negros Mission Conference Room on 21 October 1991, at
nine in the morning. To be discussed in the meeting were the non-remittance of church collection
and the events that transpired on 16 October 1991. A fact-finding committee was created to
investigate petitioner. For two (2) days, from October 21 and 22, the fact-finding committee
conducted an investigation of petitioner. Sensing that the result of the investigation might be
one-sided, petitioner immediately wrote Pastor Rueben Moralde, president of the SDA and
chairman of the fact-finding committee, requesting that certain members of the fact-finding
committee be excluded in the investigation and resolution of the case. 9 Out of the six (6)
members requested to inhibit themselves from the investigation and decision-making, only two
(2) were actually excluded, namely: Pastor Buhat and Pastor Rodrigo. Subsequently, on 29
October 1991, petitioner received a letter of dismissal. 10 citing misappropriation of
denominational funds, willful breach of trust, serious misconduct, gross and habitual neglect of
duties, and commission of an offense against the person of employer’s duly authorized
representative, as grounds for the termination of his services.
Reacting against the adverse decision of the SDA, petitioner filed a complaint. 11 on 14
November 1991, before the Labor Arbiter for illegal dismissal against the SDA and its officers
and prayed for reinstatement with backwages and benefits, moral and exemplary damages and
other labor law benefits.
On 15 February 1993, Labor Arbiter Cesar D. Sideño rendered a decision in favor of petitioner,
the dispositive portion of which reads thus: chanrob1es vir tual 1aw library
WHEREFORE, PREMISES CONSIDERED, respondents CENTRAL PHILIPPINE UNION

MISSION CORPORATION OF THE SEVENTH-DAY ADVENTISTS (CPUMCSDA) and its
officers, respondents herein, are hereby ordered to immediately reinstate complainant Pastor
Dionisio Austria to his former position as Pastor of Brgy. Taculing, Progreso and Banago,
Bacolod City, without loss of seniority and other rights and backwages in the amount of ONE
HUNDRED FIFTEEN THOUSAND EIGHT HUNDRED THIRTY PESOS (P115,830.00)
without deductions and qualifications.
Respondent CPUMCSDA is further ordered to pay complainant the following: chanrob1es virtual 1aw library
A. 13th month pay P21,060.00
B. Allowance P4,770.83
C. Service Incentive Leave Pay P3,461.85
D. Moral Damages P50,000.00
E. Exemplary Damages P25,000.00
F. Attorney’s Fee P22,012.27
SO ORDERED. 12
The SDA, through its officers, appealed the decision of the Labor Arbiter to the National Labor
Relations Commission, Fourth Division, Cebu City. In a decision, dated 26 August 1994, the
NLRC vacated the findings of the Labor Arbiter. The decretal portion of the NLRC decision
states:
WHEREFORE, the Decision appealed from is hereby VACATED and a new one ENTERED
dismissing this case for want of merit.
SO ORDERED. 13
Petitioner filed a motion for reconsideration of the above-named decision. On 18 July 1995, the
NLRC issued a Resolution reversing its original decision. The dispositive portion of the
resolution reads: chanrob1es virtual 1aw library
WHEREFORE, premises considered, Our decision dated August 26, 1994 is VACATED and the
decision of the Labor Arbiter dated February 15, 1993 is REINSTATED.
SO ORDERED. 14
In view of the reversal of the original decision of the NLRC, the SDA filed a motion for
reconsideration of the above resolution. Notable in the motion for reconsideration filed by
private respondents is their invocation, for the first time on appeal, that the Labor Arbiter has no
jurisdiction over the complaint filed by petitioner due to the constitutional provision on the
separation of church and state since the case allegedly involved and ecclesiastical affair to which
the State cannot interfere.
The NLRC, without ruling on the merits of the case, reversed itself once again, sustained the
argument posed by private respondents and, accordingly, dismissed the complaint of petitioner.
The dispositive portion of the NLRC resolution dated 23 January 1996, subject of the present
petition, is as follows:
WHEREFORE, in view of all the foregoing, the instant motion for reconsideration is hereby
granted. Accordingly, this case is hereby DISMISSED for lack of jurisdiction.
SO ORDERED. 15
Hence, the recourse to this Court by petitioner.
After the filing of the petition, the Court ordered the Office of the Solicitor General (the "OSG")
to file its comment on behalf of public respondent NLRC. Interestingly, the OSG filed a
manifestation and motion in lieu of comment 16 setting forth its stand that it cannot sustain the
resolution of the NLRC. In its manifestation, the OSG submits that the termination of petitioner
of his employment may be questioned before the NLRC as the same is secular in nature, not
ecclesiastical. After the submission of memoranda of all the parties, the case was submitted for
decision.
The issues to be resolved in this petition are: chanrob1es virtual 1aw library
1) Whether or not the Labor Arbiter/NLRC has jurisdiction to try and decide the complaint filed
by petitioner against the SDA.
2) Whether or not the termination of the services of petitioner is an ecclesiastical affair, and, as
such, involves the separation of church and state, and
3) Whether or not such termination is valid.
The first two issues shall be resolved jointly, since they are related.
Private respondents contend that by virtue of the doctrine of separation of church and state, the
Labor Arbiter and the NLRC have no jurisdiction to entertain the complaint filed by petitioner.
Since the matter at bar allegedly involves the discipline of a religious minister, it is to be
considered a purely ecclesiastical affair to which the State has no right to interfere.
The contention of private respondents deserves scant consideration. The principle of separation
of church and state finds no application in this case.
The rationale of the principle of the separation of church and state is summed up in the familiar
saying, "Strong fences make good neighbors." 17 The idea advocated by this principle is to
delineate the boundaries between the two institutions and thus avoid encroachments by one
against the other because of a misunderstanding of the limits of their respective exclusive
jurisdictions. 18 The demarcation line calls on the entities to "render therefore unto Ceasar the
things that are Ceasar’s and unto God the things that are God’s." 19 While the State is prohibited
from interfering in purely ecclesiastical affairs, the Church is likewise barred from meddling in
purely secular matters. 20
The case at bar does not concern an ecclesiastical or purely religious affair as to bar the State
from taking cognizance of the same. An ecclesiastical affair is "one that concerns doctrine, creed
or form or worship of the church, or the adoption and enforcement within a religious association
of needful laws and regulations for the government of the membership, and the power of
excluding from such associations those deemed unworthy of membership. 21 Based on this
definition, an ecclesiastical affair involves the relationship between the church and its members
and relate to matters of faith, religious doctrines, worship and governance of the congregation.
To be concrete, examples of this so-called ecclesiastical affairs to which the State cannot meddle
are proceedings for excommunication, ordinations of religious ministers, administration of
sacraments and other activities which attached religious significance. The case at bar does not
even remotely concern any of the abovecited examples. While the matter at hand relates to the
church and its religious minister it does not ipso facto give the case a religious significance.
Simply stated, what is involved here is the relationship of the church as an employer and the
minister as an employee. It is purely secular and has no relation whatsoever with the practice of
faith, worship or doctrines of the church. In this case, petitioner was not excommunicated or
expelled from the membership of the SDA but was terminated from employment. Indeed, the
matter of terminating an employee, which is purely secular in nature, is different from the
ecclesiastical act of expelling a member from the religious congregation.
As pointed out by the OSG in its memorandum, the grounds invoked for petitioner’s dismissal,
namely; misappropriation of denominational funds, willful breach of trust, serious misconduct,
gross and habitual neglect of duties and commission of an offense against the person of his
employer’s duly authorize representative, are all based on Article 282 of the Labor Code which
enumerates the just causes for termination of employment. 22 By this alone, it is palpable that
the reason for petitioner’s dismissal from the service is not religious in nature. Coupled with this
is the act of the SDA in furnishing NLRC with a copy of petitioner’s letter of termination. As
aptly stated by the OSG, this again is an eloquent admission by private respondents that NLRC
has jurisdiction over the case. Aside from these, SDA admitted in a certification 23 issued by its
officer, Mr. Ibesate, that petitioner has been its employee for twenty-eight (28) years. SDA even
registered petitioner with the Social Security System (SSS) as its employee. As a matter of fact,
the worker’s records of petitioner have been submitted by private respondents as part of their
exhibits. From all of these it is clear that when the SDA terminated the services of petitioner, it
was merely exercising its management prerogative to fire an employee which it believes to be
unfit for the job. As such, the State, through the Labor Arbiter and the NLRC, has the right to
take cognizance of the case and to determine whether the SDA, as employer, rightfully exercised
its management prerogative to dismiss an employee. This is in consonance with the mandate of
the Constitution to afford full protection to labor.
Under the Labor Code, the provision which governs the dismissal of employees, is
comprehensive enough to include religious corporations, such as the SDA, in its coverage.
Article 278 of the Labor Code on post-employment states that "the provisions of this Title shall
apply to all establishments or undertakings, whether for profit or not." Obviously, the cited
article does not make any exception in favor of a religious corporation. This is made more
evident by the fact that the Rules Implementing the Labor Code, particularly, Section 1, Rule 1,
Book VI on the Termination of Employment and Retirement, categorically includes religious
institutions in the coverage of the law, to wit:chanrob1es virtual 1aw library
SECTION 1. Coverage. — This Rule shall apply to all establishments and undertakings, whether
operated for profit or not, including educational, medical, charitable and religious institutions
and organizations, in cases of regular employment with the exception of Government and its
political subdivisions including government-owned or controlled corporations. 24
With this clear mandate, the SDA cannot hide behind the mantle of protection of the doctrine of
separation of church and state to avoid its responsibilities as an employer under the Labor Code.
Finally, as correctly pointed out by petitioner, private respondents are estopped from raising the
issue of lack of jurisdiction for the first time on appeal. It is already too late in the day for private
respondents to question the jurisdiction of the NLRC and the Labor Arbiter since the SDA had
fully participated in the trials and hearings of the case from start to finish. The Court has already
ruled that the active participation of a party against whom the action was brought, coupled with
his failure to object to the jurisdiction of the court or quasi-judicial body where the action is
pending, is tantamount to an invocation of that jurisdiction and a willingness to abide by the
resolution of the case and will bar said party from later on impugning the court or body’s
jurisdiction. 25 Thus, the active participation of private respondents in the proceedings before the
Labor Arbiter and the NLRC mooted the question of jurisdiction.
The jurisdictional question now settled, we shall now proceed to determine whether the dismissal
of petitioner was valid.
At the outset, we note that as a general rule, findings of fact of administrative bodies like the
NLRC are binding upon this Court. A review of such findings is justified, however, in instances
when the findings of the NLRC differ from those of the labor arbiter, as in this case. 26 When
the findings of NLRC do not agree with those of the Labor Arbiter, this Court must of necessity
review the records to determine which findings should be preferred as more conformable to the
evidentiary facts. 27
We turn now to the crux of the matter. In termination cases, the settled rule is that the burden of
proving that the termination was for a valid or authorized cause rests on the employer. 28 Thus,
private respondents must not merely rely on the weaknesses of petitioner’s evidence but must
stand on the merits of their own defense.
The issue being the legality of petitioner’s dismissal, the same must be measured against the
requisites for a valid dismissal, namely: (a) the employee must be afforded due process, i.e., he
must be given an opportunity to be heard and to defend himself, and; (b) the dismissal must be
for a valid cause as provided in Article 282 of the Labor Code. 29 Without the concurrence of
this twin requirements, the termination would, in the eyes of the law, be illegal. 30
Before the services of an employee can be validly terminated, Article 277 (b) of the Labor Code
and Section 2, Rule XXIII, Book V of the Rules Implementing the Labor Code further require
the employer to furnish the employee with two (2) written notices, to wit: (a) a written notice
served on the employee specifying the ground or grounds for termination, and giving to said
employee reasonable opportunity within which to explain his side, and, (b) a written notice of
termination served on the employee indicating that upon due consideration of all the
circumstances, grounds have been established to justify his termination.
The first notice, which may be considered as the proper charge, serves to apprise the employee of
the particular acts or omissions for which his dismissal is sought. 31 The second notice on the
other hand seeks to inform the employee of the employer’s decision to dismiss him. 32 This
decision, however, must come only after the employee is given a reasonable period from receipt
of the first notice within which to answer the charge and ample opportunity to be heard and
defend himself with the assistance of a representative, if he so desires. 33 This is in consonance
with the express provision of the law on the protection to labor and the broader dictates of
procedural due process. 34 Non-compliance therewith is fatal because these requirements are
conditions sine quo non before dismissal may be validly effected. 35
Private respondent failed to substantially comply with the above requirements. With regard to the
first notice, the letter, 36 dated 17 October 1991, which notified petitioner and his wife to attend
the meeting on 21 October 1991, cannot be construed as the written charge required by law. A
perusal of the said letter reveals that it never categorically stated the particular acts or omissions
on which petitioner’s impending termination was grounded. In fact, the letter never even
mentioned that petitioner would be subject to investigation. The letter merely mentioned that
petitioner and his wife were invited to a meeting wherein what would be discussed were the
alleged unremitted church tithes and the events that transpired on 16 October 1991. Thus,
petitioner was surprised to find out that the alleged meeting turned out to be an investigation.
From the tenor of the letter, it cannot be presumed that petitioner was actually on the verge of
dismissal. The alleged grounds for the dismissal of petitioner from the service were only
revealed to him when the actual letter of dismissal was finally issued. For this reason, it cannot
be said that petitioner was given enough opportunity to properly prepare for his defense. While
admittedly, private respondents complied with the second requirement, the notice of termination,
this does not cure the initial defect of lack of the proper written charge required by law.
In the letter of termination, 37 dated 29 October 1991, private respondents enumerated the
following as grounds for the dismissal of petitioner, namely: misappropriation of denominational
funds, willful breach of trust, serious misconduct, gross and habitual neglect of duties, and
commission of an offense against the person of employer’s duly authorized representative.
Breach of trust and misappropriation of denominational funds refer to the alleged failure of
petitioner to remit to the treasurer of the Negros Mission tithes, collections and offerings
amounting to P15,078.10 which were collected by his wife, Mrs. Thelma Austria, in the churches
under his jurisdiction. On the other hand, serious misconduct and commission of an offense
against the person of the employer’s duly authorized representative pertain to the 16 October
1991 incident wherein petitioner allegedly committed an act of violence in the office of Pastor
Gideon Buhat. The final ground invoked by private respondents is gross and habitual neglect of
duties allegedly committed by petitioner.
We cannot sustain the validity of dismissal based on the ground of breach of trust. Private
respondents allege that they have lost their confidence in petitioner for his failure, despite
demands, to remit the tithes and offerings amounting to P15,078.10, which were collected in his
district. A careful study of the voluminous records of the case reveals that there is simply no
basis for the alleged loss of confidence and breach of trust. Settled is the rule that under Article
282 (c) of the Labor Code, the breach of trust must be willful. A breach is willful if it is done
intentionally, knowingly and purposely, without justifiable excuse, as distinguished from an act
done carelessly, thoughtlessly, heedlessly or inadvertently. 38 It must rest on substantial grounds
and not on the employer’s arbitrariness, whims, caprices or suspicion, otherwise, the employee
would eternally remain at the mercy of the employer. 39 It should be genuine and not simulated.
40 This ground has never been intended to afford an occasion for abuse, because of its subjective
nature. The records show that there were only six (6) instances when petitioner personally
collected and received from the church treasurers the tithes, collections, and donations for the
church. 41 The stenographic notes on the testimony of Naomi Geniebla, the Negros Mission
Church Auditor and a witness for private respondents, show that Pastor Austria was able to remit
all his collections to the treasurer of the Negros Mission. 42
Though private respondents were able to establish that petitioner collected and received tithes
and donations several times, they were not able to establish that petitioner failed to remit the
same to the Negros Mission, and that he pocketed the amount and used it for his personal
purpose. In fact, as admitted by their own witness, Naomi Geniebla, petitioner remitted the
amounts which he collected to the Negros Mission for which corresponding receipts were issued
to him. Thus, the allegations of private respondents that petitioner breached their trust have no
leg to stand on.
chanroblesv irtuallawlibrary
In a vain attempt to support their claim of breach of trust, private respondents try to pin on
petitioner the alleged non-remittance of the tithes collected by his wife. This argument deserves
little consideration. First of all, as proven by convincing and substantial evidence consisting of
the testimonies of the witnesses for private respondents who are church treasurers, it was Mrs.
Thelma Austria who actually collected the tithes and donations from them, and, who failed to
remit the same to the treasurer of the Negros Mission. The testimony of these church treasurers
were corroborated and confirmed by Ms. Geniebla and Mrs. Ibesate, officers of the SDA. Hence,
in the absence of conspiracy and collusion, which private respondents failed to demonstrate,
between petitioner and his wife, petitioner cannot be made accountable for the alleged infraction
committed by his wife. After all, they still have separate and distinct personalities. For this
reason, the Labor Arbiter found it difficult to see the basis for the alleged loss of confidence and
breach of trust. The Court does not find any cogent reason, therefore, to digress from the findings
of the Labor Arbiter which is fully supported by the evidence on record.
With respect to the grounds of serious misconduct and commission of an offense against the
person of the employer’s duly authorized representative, we find the same unmeritorious and, as
such, do not warrant petitioner’s dismissal from the service.
Misconduct has been defined as improper or wrong conduct. It is the transgression of some
established and definite rule of action, a forbidden act, a dereliction of duty, willful in character,
and implies wrongful intent and not mere error in judgment. 43 For misconduct to be considered
serious it must be of such grave and aggravated character and not merely trivial or unimportant.
44 Based on this standard, we believe that the act of petitioner in banging the attaché case on the
table, throwing the telephone and scattering the books in the office of Pastor Buhat, although
improper, cannot be considered as grave enough to be considered as serious misconduct. After
all, as correctly observed by the Labor Arbiter, though petitioner committed damage to property,
he did not physically assault Pastor Buhat or any other pastor present during the incident of 16
October 1991. In fact, the alleged offense committed upon the person of the employer’s
representatives was never really established or proven by private respondents. Hence, there is no
basis for the allegation that petitioner’s act constituted serious misconduct or that the same was
an offense against the person of the employer’s duly authorized representative. As such, the cited
actuation of petitioner does not justify the ultimate penalty of dismissal from employment. While
the Constitution does not condone wrongdoing by the employee, it nevertheless urges a
moderation of the sanctions that may be applied to him in light of the many disadvantages that
weigh heavily on him like an albatross on his neck. 45 Where a penalty less punitive would
suffice, whatever missteps may have been committed by the worker ought not be visited with a
consequence so severe such as dismissal from employment. 46 For the foregoing reasons, we
believe that the minor infraction committed by petitioner does not merit the ultimate penalty of
dismissal.
The final ground alleged by private respondents in terminating petitioner, gross and habitual
neglect of duties, does not requires an exhaustive discussion. Suffice it to say that all private
respondents had were allegations but not proof. Aside from merely citing the said ground, private
respondents failed to prove culpability on the part of petitioner. In fact, the evidence on record
shows otherwise. Petitioner’s rise from the ranks disclose that he was actually a hard-worker.
Private respondents’ evidence, 47 which consisted of petitioner’s Worker’s Reports, revealed
how petitioner travelled to different churches to attend to the faithful under his care. Indeed, he
labored hard for the SDA, but, in return, he was rewarded with a dismissal from the service for a
non-existent cause.
In view of the foregoing, we sustain the finding of the Labor Arbiter that petitioner was
terminated from service without just or lawful cause. Having been illegally dismissed, petitioner
is entitled to reinstatement to his former position without loss of seniority right 48 and the
payment of full backwages without any deduction corresponding to the period from his illegal
dismissal up to the actual reinstatement. 49
WHEREFORE, the petition for certiorari is GRANTED. The challenged Resolution of public
respondent National Labor Relations Commission, rendered on 23 January 1996, is NULLIFIED
and SET ASIDE. The Decision of the Labor Arbiter, dated 15 February 1993, is reinstated and
hereby AFFIRMED.
SO ORDERED.
[G.R. No. 144767. March 21, 2002.]
DILY DANY NACPIL, Petitioner, v. INTERNATIONAL BROADCASTING

CORPORATION, Respondent.
DECISION
KAPUNAN, J.:
This is a petition for review on certiorari under Rule 45, assailing the Decision of the Court of
Appeals dated November 23, 1999 in CA-G.R. SP No. 52755 1 and the Resolution dated August
31, 2000 denying petitioner Dily Dany Nacpil’s motion for reconsideration. The Court of
Appeals reversed the decisions promulgated by the Labor Arbiter and the National Labor
Relations Commission (NLRC), which consistently ruled in favor of petitioner.
Petitioner states that he was Assistant General Manager for Finance/Administration and
Comptroller of private respondent Intercontinental Broadcasting Corporation (IBC) from 1996
until April 1997. According to petitioner, when Emiliano Templo was appointed to replace IBC
President Tomas Gomez III sometime in March 1997, the former told the Board of Directors that
as soon as he assumes the IBC presidency, he would terminate the services of petitioner.
Apparently, Templo blamed petitioner, along with a certain Mr. Basilio and Mr. Gomez, for the
prior mismanagement of IBC. Upon his assumption of the IBC presidency, Templo allegedly
harassed, insulted, humiliated and pressured petitioner into resigning until the latter was forced
to retire. However, Templo refused to pay him his retirement benefits, allegedly because he had
not yet secured the clearances from the Presidential Commission on Good Government and the
Commission on Audit. Furthermore, Templo allegedly refused to recognize petitioner’s
employment, claiming that petitioner was not the Assistant General Manager/Comptroller of IBC
but merely usurped the powers of the Comptroller. Hence, in 1997, petitioner filed with the
Labor Arbiter a complaint for illegal dismissal and non-payment of benefits.
Instead of filing its position paper, IBC filed a motion to dismiss alleging that the Labor Arbiter
had no jurisdiction over the case. IBC contended that petitioner was a corporate officer who was
duly elected by the Board of Directors of IBC; hence, the case qualities as an intra-corporate
dispute falling within the jurisdiction of the Securities and Exchange Commission (SEC).
However, the motion was denied by the Labor Arbiter in an Order dated April 22, 1998. 2
On August 21, 1998, the Labor Arbiter rendered a Decision stating that petitioner had been
illegally dismissed. The dispositive portion thereof reads:chanrob1es v irtual 1aw library
WHEREFORE, in view of all the foregoing, judgment is hereby rendered in favor of the
complainant and against all the respondents, jointly and severally, ordering the latter: chanrob1es virtual 1aw library
1. To reinstate complainant to his former position without diminution of salary or loss of

seniority rights, and with full backwages computed from the time of his illegal dismissal on May
16, 1997 up to the time of his actual reinstatement which is tentatively computed as of the date of
this decision on August 21, 1998 in the amount of P1,231,750.00 (i.e., P75,000.00 a month x
15.16 months = P1,137,000.00 plus 13th month pay equivalent to 1/12 of P1,137,000.00 =
P94,750.00 or the total amount of P1,231,750.00). Should complainant be not reinstated within
ten (10) days from receipt of this decision, he shall be entitled to additional backwages until
actually reinstated.
2. Likewise, to pay complainant the following: chanrob1es v irtual 1aw library
a) P2 Million as and for moral damages;
b) P500,000.00 as and for exemplary damages; plus and (sic)
c) Ten (10%) percent thereof as and for attorney’s fees.
SO ORDERED. 3
IBC appealed to the NLRC, but the same was dismissed in a Resolution dated March 2, 1999, for
its failure to file the required appeal bond in accordance with Article 223 of the Labor Code. 4
IBC then filed a motion for reconsideration that was likewise denied in a Resolution dated April
26, 1999. 5
IBC then filed with the Court of Appeals a petition for certiorari under Rule 65, which petition
was granted by the appellate court in its Decision dated November 23, 1999. The dispositive
portion of said decision states:
WHEREFORE, premises considered, the petition for Certiorari is GRANTED. The assailed
decisions of the Labor Arbiter and the NLRC are REVERSED and SET ASIDE and the
complaint is DISMISSED without prejudice.
SO ORDERED. 6
Petitioner then filed a motion for reconsideration, which was denied by the appellate court in a
Resolution dated August 31, 2000.
Hence, this petition.
Petitioner Nacpil submits that: chanrob1es virtual 1aw library
I.
THE COURT OF APPEALS ERRED IN FINDING THAT PETITIONER WAS APPOINTED

BY RESPONDENT’S BOARD OF DIRECTORS AS COMPTROLLER. THIS FINDING IS
CONTRARY TO THE COMMON, CONSISTENT POSITION AND ADMISSION OF BOTH
PARTIES. FURTHER, RESPONDENT’S BY-LAWS DOES NOT INCLUDE
COMPTROLLER AS ONE OF ITS CORPORATE OFFICERS.
II.
THE COURT OF APPEALS WENT BEYOND THE ISSUE OF THE CASE WHEN IT
SUBSTITUTED THE NATIONAL LABOR RELATIONS COMMISSION’S DECISION TO
APPLY THE APPEAL BOND REQUIREMENT STRICTLY IN THE INSTANT CASE. THE
ONLY ISSUE FOR ITS DETERMINATION IS WHETHER NLRC COMMITTED GRAVE
ABUSE OF DISCRETION IN DOING THE SAME. 7
The issue to be resolved is whether the Labor Arbiter had jurisdiction over the case for illegal
dismissal and non-payment of benefits filed by petitioner. The Court finds that the Labor Arbiter
had no jurisdiction over the same.
Under Presidential Decree No. 902-A (the Revised Securities Act), the law in force when the
complaint for illegal dismissal was instituted by petitioner in 1997, the following cases fall under
the exclusive of the SEC: chanrob1es virtual 1aw library
a) Devices or schemes employed by or any acts of the board of directors, business associates, its
officers or partners, amounting to fraud and misrepresentation which may be detrimental to the
interest of the public and/or of the stockholders, partners, members of associations or
organizations registered with the Commission;
b) Controversies arising out of intra-corporate or partnership relations, between and among

stockholders, members or associates; between any or all of them and the corporation, partnership
or association of which they are stockholders, members or associates, respectively, and between
such corporation, partnership or association and the State insofar as it concerns their individual
franchise or right to exist as such entity;
c) Controversies in the election or appointment of directors, trustees, officers, or managers of

such corporations, partnerships or associations;
d) Petitions of corporations, partnerships, or associations to be declared in the state of suspension

of payments in cases where the corporation, partnership or association possesses property to
cover all of its debts but foresees the impossibility of meeting them when they respectively fall
due or in cases where the corporation, partnership or association has no sufficient assets to cover
its liabilities, but is under the Management Committee created pursuant to this decree. (Emphasis
supplied.)
The Court has consistently held that there are two elements to be considered in determining
whether the SEC has jurisdiction over the controversy, to wit: (1) the status or relationship of the
parties; and (2) the nature of the question that is the subject of their controversy. 8
Petitioner argues that he is not a corporate officer of the IBC but an employee thereof since he
had not been elected nor appointed as Comptroller and Assistant Manager by the IBC’s Board of
Directors. He points out that he had actually been appointed as such on January 11, 1995 by the
IBC’s General Manager, Ceferino Basilio. In support of his argument, petitioner underscores the
fact that the IBC’s By-Laws does not even include the position of comptroller in its roster of
corporate officers. 9 He therefore contends that his dismissal is a controversy falling within the
jurisdiction of the labor courts. 10
Petitioner’s argument is untenable. Even assuming that he was in fact appointed by the General
Manager, such appointment was subsequently approved by the Board of Directors of the IBC. 11
That the position of Comptroller is not expressly mentioned among the officers of the IBC in the
By-Laws is of no moment, because the IBC’s Board of Directors is empowered under Section 25
of the Corporation Code 12 and under the corporation’s By-Laws to appoint such other officers
as it may deem necessary. The By-Laws of the IBC categorically provides: chanrob1es virtual 1aw library
XII. OFFICERS
The officers of the corporation shall consist of a President, a Vice-President, a Secretary-

Treasurer, a General Manager, and such other officers as the Board of Directors may from time
to time does fit to provide for. Said officers shall be elected by majority vote of the Board of
Directors and shall have such powers and duties as shall hereinafter provide (Emphasis
supplied). 13
The Court has held that in most cases the "by-laws may and usually do provide for such other
officers, "14 and that where a corporate office is not specifically indicated in the roster of
corporate offices in the by-laws of a corporation, the board of directors may also be empowered
under the by-laws to create additional officers as may be necessary. 15
An "office" has been defined as a creation of the charter of a corporation, while an "officer" as a
person elected by the directors or stockholders. On the other hand, an "employee" occupies no
office and is generally employed not by action of the directors and stockholders but by the
managing officer of the corporation who also determines the compensation to be paid to such
employee. 16
As petitioner’s appointment as comptroller required the approval and formal action of the IBC’s
Board of Directors to become valid, 17 it is clear therefore holds that petitioner is a corporate
officer whose dismissal may be the subject of a controversy cognizable by the SEC under
Section 5(c) of P.D. 902-A which includes controversies involving both election and
appointment of corporate directors, trustees, officers, and managers 18 Had petitioner been an
ordinary employee, such board action would not have been required.
Thus, the Court of Appeals correctly held that: chanrob1es v irtual 1aw library
Since complainant’s appointment was approved unanimously by the Board of Directors of the
corporation, he is therefore considered a corporate officer and his claim of illegal dismissal is a
controversy that falls under the jurisdiction of the SEC as contemplated by Section 5 of P.D.
902-A. The rule is that dismissal or non-appointment of a corporate officer is clearly an intra-
corporate matter and jurisdiction over the case properly belongs to the SEC, not to the NLRC. 19
As to petitioner’s argument that the nature of his functions is recommendatory thereby making
him a mere managerial officer, the Court has previously held that the relationship of a person to a
corporation, whether as officer or agent or employee is not determined by the nature of the
services performed, but instead by the incidents of the relationship as they actually exist. 20
It is likewise of no consequence that petitioner’s complaint for illegal dismissal includes money
claims, for such claims are actually part of the perquisites of his position in, and therefore linked
with his relations with, the corporation. The inclusion of such money claims does not convert the
issue into a simple labor problem. Clearly, the issues raised by petitioner against the IBC are
matters that come within the area of corporate affairs and management, and constitute a
corporate controversy in contemplation of the Corporation Code. 21 Petitioner further argues that
the IBC failed to perfect its appeal from the Labor Arbiter’s Decision for its non-payment of the
appeal bond as required under Article 223 of the Labor Code, since compliance with the
requirement of posting of a cash or surety bond in an amount equivalent to the monetary award
in the judgment appealed from has been held to be both mandatory and jurisdictional. 22 Hence,
the Decision of the Labor Arbiter had long become final and executory and thus, the Court of
Appeals acted with grave abuse of discretion amounting to lack or excess of jurisdiction in
giving due course to the IBC’s petition for certiorari, and in deciding the case on the merits.
The IBC’s failure to post an appeal bond within the period mandated under Article 223 of the
Labor Code has been rendered immaterial by the fact that the Labor Arbiter did not have
jurisdiction over the case since as stated earlier, the same is in the nature of an intra-corporate
controversy. The Court has consistently held that where there is a finding that any decision was
rendered without jurisdiction, the action shall be dismissed. Such defense can be interposed at
any time, during appeal or even after final judgment. 23 It is a well-settled rule that jurisdiction
is conferred only by the Constitution or by law. It cannot be fixed by the will of the parties; it
cannot be acquired through, enlarged or diminished by, any act or omission of the parties. 24
Considering the foregoing, the Court holds that no error was committed by the Court of Appeals
in dismissing the case filed before the Labor Arbiter, without prejudice to the filing of an
appropriate action in the proper court.
It must be noted that under Section 5.2 of the Securities Regulation Code (Republic Act No.
8799) which was signed into law by then President Joseph Ejercito Estrada on July 19, 2000, the
SEC’s jurisdiction over all cases enumerated in Section 5 of P.D. 902-A has been transferred to
the Regional Trial Courts.25 cralaw:red
WHEREFORE, the petition is hereby DISMISSED and the Decision of the Court of Appeals in
CA-G.R. SP No. 52755 is AFFIRMED.
SO ORDERED.
Davide, Jr., C.J. and Ynares-Santiago, J., concur.
Puno, J., on official leave.

Endnotes:

Part 1 - LRTA

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Part 1 - LRTA

Uploaded by

Copyright:

Available Formats

G.R. NO.

163782 : March 24, 2006]

LIGHT RAIL TRANSIT AUTHORITY, Petitioner, v. PERFECTO H. VENUS, JR.,

[G.R. NO. 163881 : March 24, 2006]

METRO TRANSIT ORGANIZATION, INC., Petitioner, v. COURT OF APPEALS,

Petitioner LRTA is a government-owned and controlled corporation created by Executive Order

1. Perfecto H. Venus, Jr. P247,724.36

Moreover, as noted by Secretary Benjamin E. Diokno, of the Department of Budget and

IN VIEW WHEREOF, the Decision of public respondent Court of Appeals is AFFIRMED

SAMAHANG MANGGAGAWA NG RIZAL PARK and DOMINGO ENRIQUEZ,

Merito R. Fernandez for petitioners.

Republic of the Philippines

Office of the President

NATIONAL PARKS DEVELOPMENT COMMITTEE

Mr. Modesto Deunida

Driver Truck In-Charge

Sir/Madam: chanrob1es virtual 1aw library

For immediate compliance and guidance.

(SGD.) JESUS B. ALVAREZ, JR.

Accordingly, we rule directly as follows.

BOY SCOUTS OF THE PHILIPPINES, Petitioner, v. NATIONAL LABOR RELATIONS

Julio O. Lopez for Petitioner.

1. COMMONWEALTH ACT NO. III AS AMENDED BY PRESIDENTIAL DECREE NO.

2. ID.; ID.; NATIONAL EXECUTIVE BOARD; SUBSTANTIAL GOVERNMENTAL

4. ID.; ID.; A GOVERNMENT-CONTROLLED CORPORATION AND

5. ADMINISTRATIVE LAW; ADMINISTRATIVE CODE OF 1987; AGENCY OF THE

6. ID.; ID.; GOVERNMENT INSTRUMENTALITY, DEFINED. — "Government

Private respondents Fortunato C. Esquerra, Roberto O. Malaborbor, Estanislao M. Misa, Vicente

On 6 November 1984, petitioner BSP conducted a pre-transfer briefing at its National

SO ORDERED." cralaw virtua1aw library

"A government-owned or controlled corporation is a stock or a non-stock corporation, whether

MATERNITY CHILDREN’S HOSPITAL, represented by ANTERA L. DORADO,

1. LABOR AND SOCIAL LEGISLATION; LABOR CODE; EMPLOYMENT; LABOR

2. ID.; ID.; ID.; LABOR DISPUTES; POWER OF THE REGIONAL DIRECTOR TO

7. ID.; LABOR CODE; ENFORCEMENT POWER OF THE REGIONAL DIRECTOR

Petitioner is a semi-government hospital, managed by the Board of Directors of the Cagayan de

"WHEREFORE, premises considered, respondent Maternity and Children Hospital is hereby

SO ORDERED." (p. 34, Rollo)

"(d) Violations of labor standard laws;

"x x x" (Emphasis supplied)

‘Art. 127. Visitorial and enforcement powers. —

"x x x" (Emphasis ours)

"POLICY INSTRUCTIONS NO. 6

TO: All Concerned

SUBJECT: DISTRIBUTION OF JURISDICTION OVER

a) Labor standards cases where employer-employee relations no longer exist;

1) labor standard cases where employer-employee relations no longer exist;

x x x" (Emphasis ours)

"POLICY INSTRUCTIONS NO. 7

TO: All Regional Directors

SUBJECT: LABOR STANDARDS CASES

3. MOLE Policy Instructions No. 37 — Because of the seemingly overlapping functions as a

"POLICY INSTRUCTIONS NO. 37

TO: All Concerned

SUBJECT: ASSIGNMENT OF CASES TO LABOR ARBITERS

2. Labor Standards Cases.

a) intricate questions of law are involved; or

x x x" (Emphasis ours)

"1. Unfair labor practice cases;

"4. Cases involving household services; and

"(b) THE PROVISIONS OF ARTICLE 217 OF THIS CODE TO THE CONTRARY

"Section 3. Complaints where no employer-employee relationship actually exists. — Where

"x x x" (pp. 38-39, Rollo)