Professional Documents
Culture Documents
Labor Cases 2
Labor Cases 2
Petitioners, Present:
This treats of the Petition for Review[1] of the Resolution[2] and Decision[3]
of the Court of Appeals dated 9 December 2005 and 29 September
QUISUMBING, J., 2005, respectively in CA-G.R. SP No. 85089 entitled
Chairperson,
- versus - TINGA,
VELASCO, and
Respondent.
Petitioner is a company engaged in the manufacture of metal products,
May 14, 2008 whereas respondent is the labor union of petitioner’s rank and file
employees. Sometime in December 2003, petitioner paid the 13th month
pay, bonus, and leave encashment of three union members in amounts
proportional to the service they actually rendered in a year, which is less
x---------------------------------------------------------------------------x
than a full twelve (12) months. The employees were:
employees. The appellate court noted that aside from the affidavit of
petitioner’s officer, it has not presented any evidence in support of its
Respondent protested the prorated scheme, claiming that on several position that it has no voluntary practice of granting the contested benefits
occasions petitioner did not prorate the payment of the same benefits to in full and without regard to the service actually rendered within the year.
seven (7) employees who had not served for the full 12 months. The It also questioned why it took petitioner eleven (11) years before it was able
payments were made in 1992, 1993, 1994, 1996, 1999, 2003, and 2004. to discover the alleged error. The dispositive portion of the court’s decision
According to respondent, the prorated payment violates the rule against reads:
diminution of benefits under Article 100 of the Labor Code. Thus, they filed
a complaint before the National Conciliation and Mediation Board (NCMB).
The parties submitted the case for voluntary arbitration. WHEREFORE, premises considered, the instant petition is hereby
GRANTED and the Decision of Accredited Voluntary Arbiter Apron M.
Mangabat in NCMB-NCR Case No. PM-12-345-03, dated June 18, 2004 is
The voluntary arbitrator, Apron M. Mangabat, ruled in favor of hereby AFFIRMED WITH MODIFICATION in that the 13th month pay, bonus,
petitioner and found that the giving of the contested benefits in full, vacation leave and sick leave conversions to cash shall be paid to the
irrespective of the actual service rendered within one year has not ripened employees in full, irrespective of the actual service rendered within a
into a practice. He noted the affidavit of Joselito Baingan, manufacturing year.[7]
group head of petitioner, which states that the giving in full of the benefit
was a mere error. He also interpreted the phrase “for each year of service”
found in the pertinent CBA provisions to mean that an employee must have
rendered one year of service in order to be entitled to the full benefits
provided in the CBA.[5] Petitioner moved for the reconsideration of the decision but its
motion was denied, hence this petition.
Section 2. Employees/workers covered by this agreement who have Section 3. That the Company further grants the amount of Two
rendered at least one (1) year of service shall be entitled to seven (7) days of Thousand Five Hundred Pesos (P2,500.00) as signing bonus plus a free CBA
Paternity Leave with pay in case the married employee’s legitimate spouse Booklet.[9] (Underscoring ours)
gave birth. Said benefit shall be non-cumulative and non-commutative and
shall be deemed in compliance with the law on the same.
5. Ronnie Licuan Sickness 8 Nov. 1999 to 9 Dec. 1999 Any benefit and supplement being enjoyed by employees cannot be
reduced, diminished, discontinued or eliminated by the employer.[14] The
6. Guilbert Villaruel Sickness 23 Aug. 2002 to 4 Feb. 2003
principle of non-diminution of benefits is founded on the Constitutional
7. Melandro Moque Sickness 29 Aug. 2003 to 30 Sept. 2003[11] mandate to "protect the rights of workers and promote their welfare,”[15]
and “to afford labor full protection.”[16] Said mandate in turn is the basis of
Article 4 of the Labor Code which states that “all doubts in the
implementation and interpretation of this Code, including its implementing
rules and regulations shall be rendered in favor of labor.” Jurisprudence is
Petitioner claims that its full payment of benefits regardless of the length of replete with cases which recognize the right of employees to benefits which
service to the company does not constitute voluntary employer practice. It were voluntarily given by the employer and which ripened into company
points out that the payments had been erroneously made and they practice. Thus in Davao Fruits Corporation v. Associated Labor Unions, et
occurred in isolated cases in the years 1992, 1993, 1994, 1999, 2002 and al.[17] where an employer had freely and continuously included in the
2003. According to petitioner, it was only in 2003 that the accounting computation of the 13th month pay those items that were expressly
department discovered the error “when there were already three (3) excluded by the law, we held that the act which was favorable to the
employees involved with prolonged absences and the error was corrected employees though not conforming to law had thus ripened into a practice
and could not be withdrawn, reduced, diminished, discontinued or for a period less than one (1) year or twelve (12) months in accordance with
eliminated. In Sevilla Trading Company v. Semana,[18] we ruled that the the CBA provision relative thereto.
employer’s act of including non-basic benefits in the computation of the
13th month pay was a voluntary act and had ripened into a company
practice which cannot be peremptorily withdrawn. Meanwhile in Davao 6. It was never the intention much less the policy of the management to
Integrated Port Stevedoring Services v. Abarquez,[19] the Court ordered grant the aforesaid benefits to the employees in full regardless of whether
the payment of the cash equivalent of the unenjoyed sick leave benefits to or not the employee has rendered services to the company for the entire
its intermittent workers after finding that said workers had received these year, otherwise, it would be unjust and inequitable not only to the company
benefits for almost four years until the grant was stopped due to a different but to other employees as well.[24]
interpretation of the CBA provisions. We held that the employer cannot
unilaterally withdraw the existing privilege of commutation or conversion
to cash given to said workers, and as also noted that the employer had in
In cases involving money claims of employees, the employer has the
fact granted and paid said cash equivalent of the unenjoyed portion of the
burden of proving that the employees did receive the wages and
sick leave benefits to some intermittent workers.
benefits and that the same were paid in accordance with law.[25]
In the years 1992, 1993, 1994, 1999, 2002 and 2003, petitioner had adopted
Indeed, if petitioner wants to prove that it merely erred in giving full
a policy of freely, voluntarily and consistently granting full benefits to its
benefits, it could have easily presented other proofs, such as the names of
employees regardless of the length of service rendered. True, there were
other employees who did not fully serve for one year and thus were given
only a total of seven employees who benefited from such a practice, but it
prorated benefits. Experientially, a perfect attendance in the workplace is
was an established practice nonetheless. Jurisprudence has not laid down
always the goal but it is seldom achieved. There must have been other
any rule specifying a minimum number of years within which a company
employees who had reported for work less than a full year and who, as a
practice must be exercised in order to constitute voluntary company
consequence received only prorated benefits. This could have easily
practice.[20] Thus, it can be six (6) years,[21] three (3) years,[22] or even as
bolstered petitioner’s theory of mistake/error, but sadly, no evidence to
short as two (2) years.[23] Petitioner cannot shirk away from its
that effect was presented.
responsibility by merely claiming that it was a mistake or an error,
supported only by an affidavit of its manufacturing group head portions of
which read:
IN VIEW HEREOF, the petition is DENIED. The Decision of the Court of
Appeals in CA-G.R. SP No. 85089 dated 29 September 2005 is and its
Resolution dated 9 December 2005 are hereby AFFIRMED.
5. 13th month pay, bonus, and cash conversion of unused/earned vacation
leave, sick leave and emergency leave are computed and paid in full to
employees who rendered services to the company for the entire year and
proportionately to those employees who rendered service to the company SO ORDERED.
SPECIAL FIRST DIVISION and Housing loans -granted up to P60,000.00 granted
[G.R. No. 127598. February 22, 2000] Signing bonus -denied granted
MANILA ELECTRIC COMPANY, petitioner, vs. Hon. Secretary of Labor Union leave -40 days (typo error) 30 days
Leonardo Quisumbing and Meralco Employees and Workers Association
(MEWA), respondents. High voltage/pole -not apply to those who are members of a team
In the Decision promulgated on January 27, 1999, the Court disposed of the need to reduce quota and MAPL
case as follows: CBU -exclude confidential employees include
"WHEREFORE, the petition is granted and the orders of public respondent Union security -maintenance of membership closed shop
Secretary of Labor dated August 19, 1996 and December 28, 1996 are set
aside to the extent set forth above. The parties are directed to execute a Contracting out -no need to consult union consult first
Collective Bargaining Agreement incorporating the terms and conditions
All benefits -existing terms and conditions all terms
contained in the unaffected portions of the Secretary of Labors orders of
August 19, 1996 and December 28, 1996, and the modifications set forth Retroactivity -Dec 28, 1996-Dec 27, 199(9) from Dec 1, 1995
above. The retirement fund issue is remanded to the Secretary of Labor for
reception of evidence and determination of the legal personality of the Dissatisfied with the Decision, some alleged members of private respondent
Meralco retirement fund."[1] union (Union for brevity) filed a motion for intervention and a motion for
reconsideration of the said Decision. A separate intervention was likewise
The modifications of the public respondents resolutions include the made by the supervisors union (FLAMES[2]) of petitioner corporation alleging
following: that it has bona fide legal interest in the outcome of the case.[3] The Court
required the "proper parties" to file a comment to the three motions for
January 27, 1999 decision Secretarys resolution
reconsideration but the Solicitor-General asked that he be excused from
Wages -P1,900.00 for 1995-96 P2,200.00 filing the comment because the "petition filed in the instant case was
granted" by the Court.[4] Consequently, petitioner filed its own consolidated
Xmas bonus -modified to one month 2 months comment. An "Appeal Seeking Immediate Reconsideration" was also filed by
Retirees -remanded to the Secretary granted the alleged newly elected president of the Union.[5] Other subsequent
pleadings were filed by the parties and intervenors.
Loan to coops -denied granted
The issues raised in the motions for reconsideration had already been
GHSIP, HMP passed upon by the Court in the January 27, 1999 decision. No new
arguments were presented for consideration of the Court. Nonetheless, regarded as trustworthy and reliable. Absent extrinsic proof of their
certain matters will be considered herein, particularly those involving the accuracy, these reports are not admissible.[6] In the same manner,
amount of wages and the retroactivity of the Collective Bargaining newspapers containing stock quotations are not admissible in evidence
Agreement (CBA) arbitral awards. when the source of the reports is available.[7] With more reason, mere
analyses or projections of such reports cannot be admitted. In particular,
Petitioner warns that if the wage increase of P2,200.00 per month as the source of the report in this case can be easily made available
ordered by the Secretary is allowed, it would simply pass the cost covering considering that the same is necessary for compliance with certain
such increase to the consumers through an increase in the rate of
governmental requirements.
electricity. This is a non sequitur. The Court cannot be threatened with such
a misleading argument. An increase in the prices of electric current needs Nonetheless, by petitioners own allegations, its actual total net income for
the approval of the appropriate regulatory government agency and does 1996 was P5.1 billion.[8] An estimate by the All Asia financial analyst stated
not automatically result from a mere increase in the wages of petitioners that petitioners net operating income for the same year was about P5.7
employees. Besides, this argument presupposes that petitioner is capable of billion, a figure which the Union relies on to support its claim. Assuming
meeting a wage increase. The All Asia Capital report upon which the Union without admitting the truth thereof, the figure is higher than the P4.171
relies to support its position regarding the wage issue can not be an billion allegedly suggested by petitioner as its projected net operating
accurate basis and conclusive determinant of the rate of wage increase. income. The P5.7 billion which was the Secretarys basis for granting the
Section 45 of Rule 130 Rules of Evidence provides: P2,200.00 is higher than the actual net income of P5.1 billion admitted by
petitioner. It would be proper then to increase this Courts award of
"Commercial lists and the like. - Evidence of statements of matters of P1,900.00 to P2,000.00 for the two years of the CBA award. For 1992, the
interest to persons engaged in an occupation contained in a list, register, agreed CBA wage increase for rank-and-file was P1,400.00 and was reduced
periodical, or other published compilation is admissible as tending to prove to P1,350.00, for 1993; further reduced to P1,150.00 for 1994. For
the truth of any relevant matter so stated if that compilation is published supervisory employees, the agreed wage increase for the years 1992-1994
for use by persons engaged in that occupation and is generally used and
are P1,742.50, P1,682.50 and P1,442.50, respectively. Based on the
relied upon by them therein." foregoing figures, the P2,000.00 increase for the two-year period awarded
Under the afore-quoted rule, statement of matters contained in a periodical to the rank-and-file is much higher than the highest increase granted to
may be admitted only "if that compilation is published for use by persons supervisory employees.[9] As mentioned in the January 27, 1999 Decision,
engaged in that occupation and is generally used and relied upon by them the Court does "not seek to enumerate in this decision the factors that
therein." As correctly held in our Decision dated January 27, 1999, the cited should affect wage determination" because collective bargaining disputes
report is a mere newspaper account and not even a commercial list. At particularly those affecting the national interest and public service "requires
most, it is but an analysis or opinion which carries no persuasive weight for due consideration and proper balancing of the interests of the parties to the
purposes of this case as no sufficient figures to support it were presented. dispute and of those who might be affected by the dispute."[10] The Court
Neither did anybody testify to its accuracy. It cannot be said that takes judicial notice that the new amounts granted herein are significantly
businessmen generally rely on news items such as this in their occupation. higher than the weighted average salary currently enjoyed by other rank-
Besides, no evidence was presented that the publication was regularly and-file employees within the community. It should be noted that the
prepared by a person in touch with the market and that it is generally relations between labor and capital is impressed with public interest which
must yield to the common good.[11] Neither party should act oppressively of the Labor Code, speaks of agreements by and between the parties, and
against the other or impair the interest or convenience of the not arbitral awards . . .
public.[12] Besides, matters of salary increases are part of management
prerogative.[13] "Therefore, in the absence of a specific provision of law prohibiting
retroactivity of the effectivity of arbitral awards issued by the Secretary of
On the retroactivity of the CBA arbitral award, it is well to recall that this Labor pursuant to Article 263(g) of the Labor Code, such as herein involved,
petition had its origin in the renegotiation of the parties 1992-1997 CBA public respondent is deemed vested with plenary and discretionary powers
insofar as the last two-year period thereof is concerned. When the to determine the effectivity thereof."
Secretary of Labor assumed jurisdiction and granted the arbitral awards,
there was no question that these arbitral awards were to be given In the 1997 case of Mindanao Terminal,[17] the Court applied the St.
retroactive effect. However, the parties dispute the reckoning period when Lukes doctrine and ruled that:
retroaction shall commence. Petitioner claims that the award should "In St. Lukes Medical Center v. Torres, a deadlock also developed during the
retroact only from such time that the Secretary of Labor rendered the CBA negotiations between management and the union. The Secretary of
award, invoking the 1995 decision in Pier 8 case[14] where the Court, Labor assumed jurisdiction and ordered the retroaction of the CBA to the
citing Union of Filipino Employees v. NLRC,[15] said: date of expiration of the previous CBA. As in this case, it was alleged that
"The assailed resolution which incorporated the CBA to be signed by the the Secretary of Labor gravely abused its discretion in making his award
parties was promulgated on June 5, 1989, the expiry date of the past CBA. retroactive. In dismissing this contention this Court held:
Based on the provision of Section 253-A, its retroactivity should be agreed "Therefore, in the absence of a specific provision of law prohibiting
upon by the parties. But since no agreement to that effect was made, public retroactive of the effectivity of arbitral awards issued by the Secretary of
respondent did not abuse its discretion in giving the said CBA a prospective Labor pursuant to Article 263(g) of the Labor Code, such as herein involved,
effect. The action of the public respondent is within the ambit of its public respondent is deemed vested with plenary and discretionary powers
authority vested by existing law." to determine the effectivity thereof."
On the other hand, the Union argues that the award should retroact to such The Court in the January 27, 1999 Decision, stated that the CBA shall be
time granted by the Secretary, citing the 1993 decision of St Lukes.[16] "effective for a period of 2 years counted from December 28, 1996 up to
"Finally, the effectivity of the Order of January 28, 1991, must retroact to December 27, 1999." Parenthetically, this actually covers a three-year
period. Labor laws are silent as to when an arbitral award in a labor dispute
the date of the expiration of the previous CBA, contrary to the position of
petitioner. Under the circumstances of the case, Article 253-A cannot be where the Secretary had assumed jurisdiction by virtue of Article 263 (g) of
properly applied to herein case. As correctly stated by public respondent in the Labor Code shall retroact. In general, a CBA negotiated within six
his assailed Order of April 12, 1991 dismissing petitioners Motion for months after the expiration of the existing CBA retroacts to the day
Reconsideration--- immediately following such date and if agreed thereafter, the effectivity
depends on the agreement of the parties.[18] On the other hand, the law is
Anent the alleged lack of basis for the retroactivity provisions awarded, we silent as to the retroactivity of a CBA arbitral award or that granted not by
would stress that the provision of law invoked by the Hospital, Article 253-A virtue of the mutual agreement of the parties but by intervention of the
government. Despite the silence of the law, the Court rules herein that CBA period is herein set at two (2) years from December 1, 1995 to November
arbitral awards granted after six months from the expiration of the last CBA 30, 1997.
shall retroact to such time agreed upon by both employer and the
employees or their union. Absent such an agreement as to retroactivity, the On the allegation concerning the grant of loan to a cooperative, there is no
award shall retroact to the first day after the six-month period following the merit in the unions claim that it is no different from housing loans granted
expiration of the last day of the CBA should there be one. In the absence of by the employer. The award of loans for housing is justified because it
a CBA, the Secretarys determination of the date of retroactivity as part of pertains to a basic necessity of life. It is part of a privilege recognized by the
employer and allowed by law. In contrast, providing seed money for the
his discretionary powers over arbitral awards shall control.
establishment of the employees cooperative is a matter in which the
It is true that an arbitral award cannot per se be categorized as an employer has no business interest or legal obligation. Courts should not be
agreement voluntarily entered into by the parties because it requires the utilized as a tool to compel any person to grant loans to another nor to
interference and imposing power of the State thru the Secretary of Labor force parties to undertake an obligation without justification. On the
when he assumes jurisdiction. However, the arbitral award can be contrary, it is the government that has the obligation to render financial
considered as an approximation of a collective bargaining agreement which assistance to cooperatives and the Cooperative Code does not make it an
would otherwise have been entered into by the parties.[19] The terms or obligation of the employer or any private individual.[22]
periods set forth in Article 253-A pertains explicitly to a CBA. But there is
nothing that would prevent its application by analogy to an arbitral award Anent the 40-day union leave, the Court finds that the same is a
by the Secretary considering the absence of an applicable law. Under Article typographical error. In order to avoid any confusion, it is herein declared
253-A: "(I)f any such agreement is entered into beyond six months, the that the union leave is only thirty (30) days as granted by the Secretary of
parties shal! agree on the duration of retroactivity thereof." In other words, Labor and affirmed in the Decision of this Court.
the law contemplates retroactivity whether the agreement be entered into The added requirement of consultation imposed by the Secretary in cases of
before or after the said six-month period. The agreement of the parties contracting out for six (6) months or more has been rejected by the Court.
need not be categorically stated for their acts may be considered in Suffice it to say that the employer is allowed to contract out services for six
determining the duration of retroactivity. In this connection, the Court months or more. However, a line must be drawn between management
considers the letter of petitioners Chairman of the Board and its President prerogatives regarding business operations per se and those which affect
addressed to their stockholders, which states that the CBA "for the rank- the rights of employees, and in treating the latter, the employer should see
and-file employees covering the period December 1, 1995 to November 30, to it that its employees are at least properly informed of its decision or
1997 is still with the Supreme Court,"[20] as indicative of petitioners modes of action in order to attain a harmonious labor-management
recognition that the CBA award covers the said period. Earlier, petitioners relationship and enlighten the workers concerning their rights.[23] Hiring of
negotiating panel transmitted to the Union a copy of its proposed CBA workers is within the employers inherent freedom to regulate and is a valid
covering the same period inclusive.[21] In addition, petitioner does not exercise of its management prerogative subject only to special laws and
dispute the allegation that in the past CBA arbitral awards, the Secretary agreements on the matter and the fair standards of justice.[24] The
granted retroactivity commencing from the period immediately following management cannot be denied the faculty of promoting efficiency and
the last day of the expired CBA. Thus, by petitioners own actions, the Court attaining economy by a study of what units are essential for its operation. It
sees no reason to retroact the subject CBA awards to a different date. The has the ultimate determination of whether services should be performed by
its personnel or contracted to outside agencies. While there should be THIRD DIVISION
mutual consultation, eventually deference is to be paid to what
management decides.[25] Contracting out of services is an exercise of [G.R. No. 116593. September 24, 1997]
business judgment or management prerogative.[26] Absent proof that
management acted in a malicious or arbitrary manner, the Court will not
interfere with the exercise of judgment by an employer.[27] As mentioned in PULP AND PAPER, INC., petitioner, vs. NATIONAL LABOR RELATIONS
the January 27, 1999 Decision, the law already sufficiently regulates this COMMISSION AND EPIFANIA ANTONIO, respondents.
matter.[28] Jurisprudence also provides adequate limitations, such that the
DECISION
employer must be motivated by good faith and the contracting out should
not be resorted to circumvent the law or must not have been the result of PANGANIBAN, J.:
malicious or arbitrary actions.[29]These are matters that may be categorically
determined only when an actual suit on the matter arises.
WHEREFORE, the motion for reconsideration is partially granted and the In the absence of wage rates specially prescribed for piece-rate workers,
assailed Decision is modified as follows: (1) the arbitral award shall retroact how should the separation pay and salary differential of such workers be
from December 1, 1995 to November 30, 1997; and (2) the award of wage is computed?
increased from the original amount of One Thousand Nine Hundred Pesos
(P1,900.00) to Two Thousand Pesos (P2,000.00) for the years 1995 and
1996. This Resolution is subject to the monetary advances granted by Statement of the Case
petitioner to its rank-and-file employees during the pendency of this case
assuming such advances had actually been distributed to them. The assailed
Decision is AFFIRMED in all other respects.
This is the main question raised in the instant petition for certiorari, filed
SO ORDERED. under Rule 65 of the Rules of Court, to set aside and annul National Labor
Relations Commissions[1] Decision[2] promulgated on September 24, 1993
and Resolution[3] dated December 16, 1993 in NLRC NCR CA No. 004041-
92.[4] Public respondents assailed Decision affirmed in toto Labor Arbiter
Eduardo J. Carpios decision[5] dated October 6, 1992, which disposed
thus:[6]
Petitioner couched the main issue in this wise:[8] The Public Respondents Ruling
Did the Public Respondent NLRC act correctly in affirming in toto the In dismissing the appeal of petitioner, public respondent reasoned:[10]
decision rendered by the labor arbitration branch a quo in NLRC NCR Case
no. 00-01-00494-92?
It is true that all the above circumstances cited by the [herein petitioner] are
not present in the case at bar, hence, separation pay based on those
While it expressly admits that private respondent is entitled to separation circumstances is not owing to the [herein private respondent]. However, it
pay, petitioner raises nonetheless the following queries: (a) Are the factors is quite obvious that [petitioner] missed the legal and factual basis why
in determining the amount of separation pay for a piece-rate worker the separation pay was awarded by the Labor Arbiter. In the first place, the
same as that of a time-worker? (b) Is a worker, who was terminated for lack [petitioner] admits that the complainant-appellee was temporarily laid off
of work, entitled to separation pay at the rate of one-months pay for every on June 29, 1991. This means that there was a temporary suspension of
year of service?[9] The petition is based on the following grounds: employer-employee relationship between the appellant and the appellee.
Lay-off is a temporary termination initiated by the employer, but without
prejudice to the reinstatement or recall of the workers who have been
temporarily separated. The reasons for laying off employees are varied: lack
I of work, shutdown for repairs, business reverses, and the like. Always,
however, there is the expectation that the employees who have been laid The argument interposed by the [petitioner] based on Art. 101 of the Labor
off will be recalled or rehired. This situation is governed by Rule I, Section Code, in relation to Rule VII, Section (8), Book III of the Omnibus
12, of Book VI of the Implementing Rules and Regulations of the Labor Code, Implementing Rule and Regulations, will not lie in the case at bar. In the first
which provides: place, pursuant to the provision of law cited by the [petitioner], all time and
motion studies, or any other schemes or devices to determine whether the
employees paid by results are being compensated in accordance with the
Sec. 12. Suspension of Relationship. -- The employer-employee relationship minimum wage requirements, shall only be approved on petition of the
shall be deemed suspended in case of suspension of operation of the interested employer. Thus, it is the fault of the [petitioner] on whose
business or undertaking of the employer for a period not exceeding six (6) initiative, a time and motion study or any other similar scheme is not yet
months x x x. available in its establishment.
From June 29, 1991 up to the time the complainant-appellee filed her The Courts Ruling
complaint on January 21, 1992, there was more than six (6) months that
already elapse (sic) and yet, the appellant failed to recall the appellee to let
her resume working. If the appellant was not yet in a possession to recall or The appeal is not meritorious.
reinstate the appellee after six (6) months, up to when shall appellant let
her keep in waiting. Of course, she cannot be allowed to wait interminably.
That is the reason why the law imposes a period of six (6) months within First Issue: Computation of Minimum Wage
which the resumption of employer-employee relationship must be resumed
in temporary lay-offs. Otherwise, any employer can, in the guise of a
temporary lay-off, close its doors to an employee for more than six months
Petitioner argues that private respondent was a piece-rate worker and not a
and their claim that the lay-off has ripened into termination and try to get
time-worker. Since private respondents employment as (p)acker/(w)rapper
away from any liability. The award of separation pay is hereby declared in
in 1975 until her separation on June 29, 1991, (h)er salary depended upon
order.
the number of reams of bond paper she packed per day. Petitioner
contends that private respondents work depended upon the number and
availability of purchase orders from customers. Petitioner adds that,
On the second issue raised by the (petitioner) on appeal, We are also for the oftentimes, packers/wrappers only work three to four hours a day. Thus,
Labor Arbiters ruling upholding the appellees right to salary differential in her separation pay must be based on her latest actual compensation per
the amount computed. piece or on the minimum wage per piece as determined by Article 101 of
the Labor Code, whichever is higher, and not on the daily minimum wage
applicable to time-workers.[11]
Compensation of Pieceworkers 1) Amount of increase in AMW x 100 = % increase
In the absence of wage rates based on time and motion studies determined Previous AMW
by the labor secretary or submitted by the employer to the labor secretary
for his approval, wage rates of piece-rate workers must be based on the
applicable daily minimum wage determined by the Regional Tripartite 2) Existing rate/piece x % increase = increase in rate/piece;
Wages and Productivity Commission. To ensure the payment of fair and
reasonable wage rates, Article 101[12] of the Labor Code provides that the
Secretary of Labor shall regulate the payment of wages by results, including
3) Existing rate/piece + increase in rate/piece = adjusted rate/piece.
pakyao, piecework and other nontime work. The same statutory provision
also states that the wage rates should be based, preferably, on time and
motion studies, or those arrived at in consultation with representatives of
workers and employers organizations. In the absence of such prescribed b) The wage rates of workers who are paid by results shall continue to be
wage rates for piece-rate workers, the ordinary minimum wage rates established in accordance with Art. 101 of the Labor Code, as amended and
prescribed by the Regional Tripartite Wages and Productivity Boards should its implementing regulations. (Underscoring supplied.)
apply. This is in compliance with Section 8 of the Rules Implementing Wage
Order Nos. NCR-02 and NCR-02-A -- the prevailing wage order at the time of
dismissal of private respondent, viz.:[13] On November 29, 1991, private respondent was orally informed of the
termination of her employment. Wage Order No. NCR-02, in effect at the
time, set the minimum daily wage for non-agricultural workers like private
SEC. 8. Workers Paid by Results. -- a) All workers paid by results including respondent at P118.00.[14] This was the rate used by the labor arbiter in
those who are paid on piece work, takay, pakyaw, or task basis, shall receive computing the separation pay of private respondent. We cannot find any
not less than the applicable minimum wage rates prescribed under the abuse of discretion, let alone grave abuse, in the order of the labor arbiter
Order for the normal working hours which shall not exceed eight (8) hours which was later affirmed by the NLRC.
work a day, or a proportion thereof for work of less than the normal
working hours.
Moreover, since petitioner employed piece-rate workers, it should have
inquired from the secretary of labor about their prescribed specific wage
The adjusted minimum wage rates for workers paid by results shall be rates. In any event, there being no such prescribed rates, petitioner, after
computed in accordance with the following steps: consultation with its workers, should have submitted for the labor
secretarys approval time and motion studies as basis for the wage rates of
its employees. This responsibility of the employer is clear under Section 8,
Rule VII, Book III of the Omnibus Rules Implementing the Labor Code:
studies and reached after consultation with the representatives from both
workers and employers organization -- which would have applied to its
Section 8. Payment by result. (a) On petition of any interested party, or piece-rate workers. Without those submissions, the labor arbiter had the
upon its initiative, the Department of Labor shall use all available devices, duty to use the daily minimum wage rate for non-agricultural workers
including the use of time and motion studies and consultations with prevailing at the time of private respondents dismissal, as prescribed by the
representatives of employers and workers organizations, to determine Regional Tripartite Wages and Productivity Boards. Put differently,
whether the employees in any industry or enterprise are being petitioner did not take the initiative of proposing an appropriate wage rate
compensated in accordance with the minimum wage requirements of this for its piece-rate workers. In the absence of such wage rate, the labor
Rule. arbiter cannot be faulted for applying the prescribed minimum wage rate in
the computation of private respondents separation pay. In fact, it acted and
ruled correctly and legally in the premises.
(b) The basis for the establishment of rates for piece, output or contract
work shall be the performance of an ordinary worker of minimum skill or
ability. It is clear, therefore, that the applicable minimum wage for an eight-hour
working day is the basis for the computation of the separation pay of piece-
rate workers like private respondent. The computed daily wage should not
(c) An ordinary worker of minimum skill or ability is the average worker of be reduced on the basis of unsubstantiated claims that her daily working
the lowest producing group representing 50% of the total number of hours were less than eight. Aside from its bare assertion, petitioner
employees engaged in similar employment in a particular establishment, presented no clear proof that private respondents regular working day was
excluding learners, apprentices and handicapped workers employed less than eight hours. Thus, the labor arbiter correctly used the full amount
therein. of P118.00 per day in computing private respondents separation pay. We
agree with the following computation:[15]
(d) Where the output rates established by the employer do not conform
with the standards prescribed herein, or with the rates prescribed by the Considering therefore that complainant had been laid-off for more than six
Department of Labor in an appropriate order, the employees shall be (6) months now, we strongly feel that it is already reasonable for the
entitled to the difference between the amount to which they are entitled to respondent to pay the complainant her separation pay of one month for
receive under such prescribed standards or rates and that actually paid every year of service, a fraction of six (6) months to be considered as one
them by employer. whole year. Separation pay should be computed based on her minimum
salary as will be determined hereunder.
DECISION
Petitioner argues that the work of the private respondent is seasonal, being
dependent upon the availability of job-orders and not twenty-six (26) days a
month.[23] Further, petitioner contends that private respondent herself
admitted she was a piece worker whose work [was] seasonal.[24] PARDO, J.:
Contrary to the assertion of petitioner, neither the assailed Decision nor the
pleadings of private respondent show that private respondents work was
What is before the Court for resolution is a petition to annul the resolution
seasonal. More important, petitioner utterly failed to substantiate its
of the National Labor Relations Commission (NLRC),[1] affirming the labor-
allegation that private respondents work was seasonal. We observe that the
arbiter's award but deleting the moral and exemplary damages.
labor arbiter based the computation of the salary differential on a 26-day
month on the presumption that private respondents work was continuous.
In view of the failure of petitioner to support its claim, we must sustain the
correctness of this computation. The facts are as follows:
"SO ORDERED."[4]
On August 26, 1994, Rubberworld filed with the Department of Labor and
Employment a notice of temporary shutdown of operations to take effect
on September 26, 1994. Before the effectivity date, however, Rubberworld On January 24, 1995, petitioners submitted to the labor arbiter a motion to
was forced to prematurely shutdown its operations. suspend the proceedings invoking the SEC order dated December 28, 1994.
The labor arbiter did not act on the motion and ordered the parties to
submit their respective position papers.
On November 11, 1994, private respondents filed with the National Labor
Relations Commission a complaint[2] against petitioner for illegal dismissal
and non-payment of separation pay. On December 10, 1995, the labor arbiter rendered a decision, which
provides:
On November 22, 1994, Rubberworld filed with the Securities and Exchange
Commission (SEC) a petition for declaration of suspension of payments with "In the light of the foregoing, respondents are hereby declared guilty of
a proposed rehabilitation plan.[3] ILLEGAL SHUTDOWN and that respondents are ordered to pay complainants
their separation pay equivalent to one (1) month pay for every year of
service.
On December 28, 1994, SEC issued the following order:
Presidential Decree No. 902-A is clear that "all actions for claims against
On February 5, 1996, petitioners appealed to the National Labor Relations corporations, partnerships or associations under management or
Commission (NLRC) alleging abuse of discretion and serious errors in the receivership pending before any court, tribunal, board or body shall be
findings of facts of the labor arbiter. suspended accordingly." The law did not make any exception in favor of
labor claims.[8]
On November 20, 1996, NLRC denied petitioners' motion for Thus, the labor case would defeat the purpose of an automatic stay. To rule
reconsideration. otherwise would open the floodgates to numerous claims and would defeat
the rescue efforts of the management committee.
The issue is whether or not the Department of Labor and Employment, the
Labor Arbiter and the National Labor Relations Commission may legally act
on the claims of respondents despite the order of the Securities and
Exchange Commission suspending all actions against a company under
This finds ratiocination in that the power to hear and decide labor disputes THIRD DIVISION
is deemed suspended when the Securities and Exchange Commission puts
the corporation under rehabilitation. [G.R. No. 148372. June 27, 2005]
Thus, when NLRC proceeded to decide the case despite the SEC suspension CLARION PRINTING HOUSE, INC., and EULOGIO YUTINGCO, petitioners, vs.
order, the NLRC acted without or in excess of its jurisdiction to hear and THE HONORABLE NATIONAL LABOR RELATIONS COMMISSION (Third
decide cases. As a consequence, any resolution, decision or order that it Division) and MICHELLE MICLAT, respondents.
rendered or issued without jurisdiction is a nullity. DECISION
CARPIO-MORALES, J.:
WHEREFORE, the petition is hereby GRANTED. The decision of the labor
arbiter dated December 10, 1995 and the NLRC resolution dated August 30,
1996, are SET ASIDE. Respondent Michelle Miclat (Miclat) was employed on April 21, 1997 on a
probationary basis as marketing assistant with a monthly salary of
P6,500.00 by petitioner Clarion Printing House (CLARION) owned by its co-
No costs. petitioner Eulogio Yutingco. At the time of her employment, she was not
informed of the standards that would qualify her as a regular employee.
SO ORDERED.
On September 16, 1997, the EYCO Group of Companies of which CLARION
formed part filed with the Securities and Exchange Commission (SEC) a
Petition for the Declaration of Suspension of Payment, Formation and
Appointment of Rehabilitation Receiver/ Committee, Approval of
Rehabilitation Plan with Alternative Prayer for Liquidation and Dissolution of
Corporation[1] the pertinent allegations of which read:
xxx
5. The situation was that since all these companies were sister companies
and were operating under a unified and centralized management team, the
financial requirements of one company would normally be backed up or b) The economic interplay consisting of the inflation and the erratic changes
supported by one of the available fundings from the other companies. in the peso-dollar exchange rate which precipitated a soaring banking
interest.
6. The expansion exhausted the cash availability of Nikon, NKI, and 2000
because those fundings were absorbed by the requirements of NPI and c) Labor problems that has precipitated adverse company effect on the
EYCO Properties, Inc. which were placed on real estate investments. media and in the financial circuit.
However, at the time that those investments and expansions were made,
there was no cause for alarm because the market situation was very bright
and very promising, hence, the decision of the management to implement d) Liberalization of the industry (GATT) which has resulted in flooding the
the expansion. market with imported goods;
7. The situation resulted in the cash position being spread thin. However, e) Other related adverse matters.
despite the thin cash positioning, the management still was very positive
and saw a very viable proposition since the expansion and the additional
investments would result in a bigger real estate base which would be very
9. The inability of the EYCO Group of Companies to meet the obligations as
credible collateral for further expansions. It was envisioned that in the end,
they fall due on the schedule agreed with the bank has now become a stark
there would be bigger cash procurement which would result in greater
reality. The situation therefore is that since the obligations would not be
volume of production, profitability and other good results based on the
met within the scheduled due date, complications and problems would
expectations and projections of the team itself.
definitely arise that would impair and affect the operations of the entire
conglomerate comprising the EYCO Group of Companies.
x x x (Emphasis and underscoring supplied)[2] And on September 30, 1997, the SEC issued an Order[4] approving the
creation of an interim receiver for the EYCO Group of Companies.
On September 19, 1997, the SEC issued an Order[3] the pertinent portions
of which read: On October 10, 1997, the EYCO Group of Companies issued to its employees
the following Memorandum:[5]
xxx
This is to formally announce the entry of the Interim Receiver Group
represented by SGV from today until October 22, 1997 or until further
It appearing that the petition is sufficient in form and substance, the formal notice from the SEC.
corporate petitioners prayer for the creation of management or
receivership committee and creditors approval of the proposed
Rehabilitation Plan is hereby set for hearing on October 22, 1997 at 2:00 This interim receiver groups function is to make sure that all assets of the
oclock in the afternoon at the SICD, SEC Bldg., EDSA, Greenhills, company are secured and accounted for both for the protection of us and
Mandaluyong City. our creditors.
xxx Their function will involve familiarization with the different processes and
controls in our organization & keeping physical track of our assets like
inventories and machineries.
Finally, the petitioners are hereby enjoined from disposing any and all of
their properties in any manner, whatsoever, except in the ordinary course
of business and from making any payment outside of the legitimate Anything that would be required from you would need to be in writing and
business expenses during the pendency of the proceedings and as a duly approved by the top management in order for us to maintain a clear
consequence of the filing of the Petition, all actions, claims and proceedings
line.
of the Philippines, we are constrained to go on a temporary partial
shutdown of some operations of the Company.
We trust that this temporary inconvenience will benefit all of us in the spirit
of goodwill. Lets extend our full cooperation to them.
Respecting the alleged financial losses cited by petitioners as basis for her
In view of the numerous external factors such as slowdown in business and termination, Miclat disputed the same, she contending that as marketing
consumer demand and consistent with Art. 286 of the Revised Labor Code assistant tasked to receive sales calls, produce sales reports and conduct
market surveys, a credible assessment on production and sales showed By Decision[9] of November 23, 1998, the labor arbiter found that Miclat
otherwise. was illegally dismissed and directed her reinstatement. The dispositive
portion of the decision reads:
In any event, Miclat claimed that assuming that her termination was
necessary, the manner in which it was carried out was illegal, no written WHEREFORE, in view of the foregoing premises, judgment is hereby
notice thereof having been served on her, and she merely learned of it only rendered ordering the respondent to reinstate complainant to her former or
a day before it became effective. equivalent position without loss of seniority rights and benefits and to pay
her backwages, from the time of dismissal to actual reinstatement,
proportionate 13th month pay and two (2) days salary computed as follows:
Additionally, Miclat claimed that she did not receive separation pay, 13th
month pay and salaries for October 21, 22 and 23, 1997.
a.1) Backwages 10/23/97 to 11/30/98
TOTAL P 99,083.33
Contending that Miclats termination was made with due process,
petitioners referred to the EYCO Group of Companies abovesaid July 21,
1997 Memorandum which, so they claimed, substantially complied with the
notice requirement, it having been issued more than one month before (Emphasis and underscoring supplied).
Miclat was terminated on October 23, 1997.
The records show that these requirements were not substantially complied
There are three (3) valid requisites for valid retrenchment: (1) the
with. And proofs presented by respondents-appellants were short of being
retrenchment is necessary to prevent losses and such losses are proven; (2)
sufficient and convincing to justify valid retrenchment. Their position must
written notices to the employees and to the Department of Labor and
therefore fail. The reason is simple. Evidences on record presented fall short
Employment at least one (1) month prior to the intended date of
of the requirement of substantial, sufficient and convincing evidence to
retrenchment; and (3) payment of separation pay equivalent to one (1)
persuade this Commission to declare the validity of retrenchment espoused
month pay or at least month pay for every year of service, whichever is
by respondents-appellants. The petition before the Securit[ies] and
Exchange Commission for suspension of payment does not prove anything WHEREFORE, premises considered, and finding no grave abuse of discretion
to come within the bounds of justifying retrenchment. In fact, the petition on the findings of Labor Arbiter Nieves V. De Castro, the appeal is DENIED
itself lends credence to the fact that retrenchment was not actually for lack of merit.
reinstated under the circumstances prevailing when it stated, The foregoing
notwithstanding, however, the present combined financial condition of the
petitioners clearly indicates that their assets are more than enough to pay The decision appealed from is AFFIRMED in toto. (Italics in the original;
off the credits. Verily, reading further into the petition, We are not ready to underscoring supplied; citations omitted)
disregard the fact that the petition merely seeks to suspend payments of
their obligation from creditor banks and other financing institutions, and not
because of imminent substantial financial loss. On this account, We take
Petitioners Motion for Reconsideration of the NLRC resolution having been
note of paragraph 7 of the petition which stated: The situation resulted in
denied by Resolution[14] of July 29, 1999, petitioners filed a petition for
cash position being spread thin. However, despite the thin cash positioning,
certiorari[15] before the Court of Appeals (CA) raising the following
the management was very positive and saw a very viable proposition since
arguments:
the expansion and the additional investments would result in a bigger real
estate base which would be a very credible collateral for further expansions.
It was envisioned that in the end, there would a bigger cash procurement
which would result in greater volume of production, profitability and other 1. PETITIONER CLARION WAS PLACED UNDER RECEIVERSHIP THEREBY
good results based on the expectations and projections of the team itself. EVIDENCING THE FACT THAT IT SUSTAINED BUSINESS LOSSES TO WARRANT
Admittedly, this does not create a picture of retrenchable business THE TERMINATION OF PRIVATE RESPONDENT MICLAT FROM HER
atmosphere pursuant to Article 283 of the Labor Code. EMPLOYMENT.
We cannot disregard the fact that respondent-appellants failed in almost all 2. THE DISMISSAL OF PRIVATE RESPONDENT MICLAT FROM HER
of the criteria set by law and jurisprudence in justifying valid retrenchment. EMPLOYMENT HAVING BEEN EFFECTED IN ACCORDANCE WITH THE LAW
The two (2) mandatory notices were violated. The supposed notice to the AND IN GOOD FAITH, PRIVATE RESPONDENT DOES NOT DESERVE TO BE
DOLE (Annex 4, List of Employees on Shutdown) is of no moment, the same REINSTATED AND PAID BACKWAGES, 13TH MONTH PAY AND TWO (2) DAYS
having no bearing in this case. Herein complainant-appellee was not even SALARY. (Underscoring supplied)
listed therein and the date of receipt by DOLE, that is, January 18, 1999, was
way out of time in relation to this case. And no proof was adduced to
evidence cost cutting measures, to say the least. Nor was there proof shown By Decision[16] of November 24, 2000, the CA sustained the resolutions of
that separation pay had been awarded to complainant-appellee. the NLRC in this wise:
In the instant case, Clarion failed to prove its ground for retrenchment as decreasing gross revenues alone are not necessarily business losses within
well as compliance with the mandated procedure of furnishing the the meaning of Art. 283 since in the nature of things, the possibility of
employee and the Department of Labor and Employment (hereafter, DOLE) incurring losses is constantly present in business operations.
with one (1) month written notice and payment of separation pay to the
employee. Clarions failure to discharge its burden of proof is evident from
the following instances: Last, even if business losses were indeed sufficiently proven, the employer
must still prove that retrenchment was resorted to only after less drastic
measures such as the reduction of both management and rank-and-file
First, Clarion presented no evidence whatsoever before the Labor Arbiter. bonuses and salaries, going on reduced time, improving manufacturing
To prove serious business losses, Clarion presented its 1997 and 1998 efficiency, reduction of marketing and advertising costs, faster collection of
financial statements and the SEC Order for the Creation of an Interim customer accounts, reduction of raw materials investment and others, have
Receiver, for the first time on appeal before the NLRC. The Supreme Court been tried and found wanting. Again, petitioner failed to prove the
has consistently disallowed such practice unless the party making the exhaustion of less drastic measures short of retrenchment as it had failed
belated submission of evidence had satisfactorily explained the delay. In the with the other requisites.
instant case, said financial statements are not admissible in evidence due to
Clarions failure to explain the delay.
It is interesting to note that Miclat started as a probationary employee on
21 April 1997. There being no stipulation to the contrary, her probation
Second, even if such financial statements were admitted in evidence, they period had a duration of six (6) months from her date of employment. Thus,
would not alter the outcome of the case as statements have weak probative after the end of the probation period on 22 October 1997, she became a
value. The required method of proof in such case is the presentation of regular employee as of 23 October 1997 since she was allowed to work after
financial statements prepared by independent auditors and not merely by the end of said period. It is also clear that her probationary employment
company accountants. Again, petitioner failed in this regard. was not terminated at the end of the probation period on the ground that
the employee failed to qualify in accordance with reasonable standards
made known to her at the time of engagement.
Third, even audited financial statements are not enough. The employer
must present the statement for the year immediately preceding the year
the employee was retrenched, which Clarion failed to do in the instant case, However, 23 October 1997 was also the day of Miclats termination from
to prove not only the fact of business losses but more importantly, the fact employment on the ground of retrenchment. Thus, we have a bizarre
that such losses were substantial, continuing and without immediate situation when the first day of an employees regular employment was also
prospect of abatement. Hence, neither the NLRC nor the courts must blindly the day of her termination. However, this is entirely possible, as had in fact
accept such audited financial statements. They must examine and make happened in the instant case, where the employers basis for termination is
inferences from the data presented to establish business losses. Art. 288, instead of Art. 281 of the Labor Code. If petitioner terminated
Furthermore, they must be cautioned by the fact that sliding incomes or Miclat with Art. 281 in mind, it would have been too late to present such
theory at this stage and it would have been equally devastating for
petitioner had it done so because no evidence exists to show that Miclat
failed to qualify with petitioners standards for regularization. Failure to B. ORDERING THE REINSTATEMENT OF PRIVATE RESPONDENT MICLAT TO
discharge its burden of proof would still be petitioners undoing. HER FORMER OR EQUIVALENT POSITION WITHOUT LOSS OF SENIORITY
RIGHTS AND BENEFITS AND PAYMENT OF BACKWAGES, 1[3]TH MONTH PAY
AND TWO (2) DAYS SALARY.[18]
Whichever way We examine the case, the conclusion is the same Miclat was
illegally dismissed. Consequently, reinstatement without loss of seniority
rights and full backwages from date of dismissal on 23 October 1997 until Petitioners argue that the conclusion of the CA that no sufficient proof of
actual reinstatement is in order. financial losses on the part of CLARION was adduced is patently erroneous,
given the serious business reverses it had gravely suffered as reflected in its
financial statements/balance sheets, thereby leaving as its only option the
retrenchment of its employees including Miclat.[19]
WHEREFORE, the instant petition is hereby DISMISSED and the 29 July 1999
and 7 June 1999 resolutions of the NLRC are SUSTAINED. (Emphasis and
Petitioners further argue that when a company is under receivership and a
underscoring supplied)
receiver is appointed to take control of its management and corporate
affairs, one of the evident reasons is to prevent further losses of said
company and protect its remaining assets from being dissipated; and that
By Resolution[17] of May 23, 2001, the CA denied petitioners motion for
the submission of financial reports/statements prepared by independent
reconsideration of the decision. auditors had been rendered moot and academic, the company having
shutdown its operations and having been placed under receivership by the
SEC due to its inability to pay or comply with its obligations.[20]
Hence, the present petition for review on certiorari, petitioners contending
that:
Respecting the CAs holding that the financial statements CLARION
submitted for the first time on appeal before the NLRC are inadmissible in
WITH ALL DUE RESPECT, THE HONORABLE COURT OF APPEALS GRAVELY evidence due to its failure to explain the delay in the submission thereof,
ERRED IN SUSTAINING THE ASSAILED DECISIONS OF HONORABLE PUBLIC petitioners lament the CAs failure to consider that technical rules on
RESPONDENT COMMISSION: evidence prevailing in the courts are not controlling in proceedings before
the NLRC which may consider evidence such as documents and affidavits
submitted by the parties for the first time on appeal.[21]
A. HOLDING THAT PRIVATE RESPONDENT MICLAT WAS ILLEGALLY
DISMISSED; and
As to the CAs holding that CLARION failed to prove the exhaustion of less technicality that said evidence can no longer be considered on appeal.
drastic measures short of retrenching, petitioners advance that prior to the Certainly, the first course of action would be more consistent with equity
termination of Miclat, CLARION, together with the other companies under and the basic notions of fairness. (Italics in the original; citations
the EYCO Group of Companies, was placed under receivership during which omitted)[24]
drastic measures to continue business operations of the company and
eventually rehabilitate itself were implemented.[22]
It is likewise well-settled that for retrenchment to be justified, any claim of
actual or potential business losses must satisfy the following standards: (1)
Denying Miclats entitlement to backwages, petitioners proffer that her the losses are substantial and not de minimis; (2) the losses are actual or
dismissal rested upon a valid and authorized cause. And petitioners assail as reasonably imminent; (3) the retrenchment is reasonably necessary and is
grossly erroneous the award of 13th month pay to Miclat, she not having likely to be effective in preventing expected losses; and (4) the alleged
sought it and, therefore, there was no jurisdiction to award the same.[23] losses, if already incurred, or the expected imminent losses sought to be
forestalled, are proven by sufficient and convincing evidence.[25] And it is
the employer who has the onus of proving the presence of these standards.
The petition is partly meritorious.
The settled rule is that the NLRC is not precluded from receiving evidence SEC. 5 In addition to the regulatory and adjudicative functions of THE
on appeal as technical rules of evidence are not binding in labor cases. In SECURITIES AND EXCHANGE COMMISSION over corporations, partnerships
fact, labor officials are mandated by the Labor Code to use every and all and other forms of associations registered with it as expressly granted
reasonable means to ascertain the facts in each case speedily and under existing laws and decrees, it shall have original and exclusive
objectively, without regard to technicalities of law or procedure, all in the jurisdiction to hear and decide cases involving:
interest of due process. Thus, in Lawin Security Services v. NLRC, and Bristol
Laboratories Employees Association-DFA v. NLRC, we held that even if the
evidence was not submitted to the labor arbiter, the fact that it was duly xxx
introduced on appeal to the NLRC is enough basis for the latter to be more
judicious in admitting the same, instead of falling back on the mere
(d) Petitions of corporations, partnerships or associations declared in the government agencies in appropriate cases when there is imminent danger
state of suspension of payments in cases where the corporation, of dissipation, loss, wastage or destruction of assets or other properties or
partnership or association possesses sufficient property to cover all debts paralization of business operations of such corporations or entities which
but foresees the impossibility of meeting them when they respectively fall may be prejudicial to the interest of minority stockholders, parties-litigants
due or in cases where the corporation, partnership, association has no of the general public: x x x (Emphasis and underscoring supplied).
sufficient assets to cover its liabilities, but is under the management of a
Rehabilitation Receiver or Management Committee created pursuant to this
Decree. From the above-quoted provisions of P.D. No. 902-A, as amended, the
appointment of a receiver or management committee by the SEC
presupposes a finding that, inter alia, a company possesses sufficient
SEC. 6. In order to effectively exercise such jurisdiction, the Commission property to cover all its debts but foresees the impossibility of meeting
shall possess the following powers: them when they respectively fall due and there is imminent danger of
dissipation, loss, wastage or destruction of assets of other properties or
paralization of business operations.
xxx
The parties in G.R. No. 145977 having sought, and this Court having granted, As provided in Section 1, Rule 129 of the Rules of Court:
the dismissal of the appeal of the therein petitioners including CLARION, the
CA decision which affirmed in toto the September 14, 1999 Order of the
SEC, the dispositive portion of which SEC Order reads: SECTION 1. Judicial notice, when mandatory. A court shall take judicial
notice, without the introduction of evidence, of the existence and territorial
extent of states, their political history, forms of government and symbols of
WHEREFORE, premises considered, the appeal is as it is hereby, granted and nationality, the law of nations, the admiralty and maritime courts of the
the Order dated 18 December 1998 is set aside. The Petition to be Declared world and their seals, the political constitution and history of the
in State of Suspension of payments is hereby disapproved and the SAC Plan Philippines, the official acts of the legislative, executive and judicial
terminated. Consequently, all committee, conservator/ receivers created departments of the Philippines, the laws of nature, the measure of time,
pursuant to said Order are dissolved and discharged and all acts and orders and the geographical divisions. (Emphasis and underscoring supplied)
issued therein are vacated.
xxx Since Article 283 of the Labor Code also provides that [i]n case of
retrenchment to prevent losses, . . . the separation pay shall be equivalent
to one (1) month pay or at least one-half (1/2) month pay for every year of
service, whichever is higher. . . , [a] fraction of at least six (6) months [being]
considered one (1) whole year, this Court holds that Miclat is entitled to
separation pay equivalent to one (1) month salary. With the appointment of a management receiver in September 1997,
however, all claims and proceedings against CLARION, including labor
claims,[32] were deemed suspended during the existence of the
receivership.[33] The labor arbiter, the NLRC, as well as the CA should not
As to Miclats entitlement to 13th month pay, paragraph 6 of the Revised
have proceeded to resolve respondents complaint for illegal dismissal and
Guidelines on the 13th Month Pay Law provides: should instead have directed respondent to lodge her claim before the then
duly-appointed receiver of CLARION. To still require respondent, however,
at this time to refile her labor claim against CLARION under the peculiar
6. 13th Month Pay of Resigned or Separated Employee circumstances of the case that 8 years have lapsed since her termination
and that all the arguments and defenses of both parties were already
ventilated before the labor arbiter, NLRC and the CA; and that CLARION is
An employee x x x whose services were terminated any time before the already in the course of liquidation this Court deems it most expedient and
time for payment of the 13th month pay is entitled to this monetary benefit advantageous for both parties that CLARIONs liability be determined with
in proportion to the length of time he worked during the calendar year up finality, instead of still requiring respondent to lodge her claim at this time
to the time of his resignation or termination from the service. Thus if he before the liquidators of CLARION which would just entail a mere reiteration
worked only from January up to September his proportionate 13th month of what has been already argued and pleaded. Furthermore, it would be in
pay shall be equivalent to 1/12 of his total basic salary he earned during that the best interest of the other creditors of CLARION that claims against the
period. company be finally settled and determined so as to further expedite the
liquidation proceedings. For the lesser number of claims to be proved, the
sooner the claims of all creditors of CLARION are processed and settled.
xxx
3) P3,250.00 as 13th month pay. LINGKOD MANGGAGAWA SA RUBBERWORLD, ADIDAS-ANGLO, its officers
and members as represented by SONIA ESPERANZA,
Petitioners,
Let a copy of this Decision be furnished the SEC Hearing Panel charged with
the liquidation and dissolution of petitioner corporation for inclusion, in the
list of claims of its creditors, respondent Michelle Miclats claims, to be
satisfied in accordance with Article 110 of the Labor Code in relation to the
Civil Code provisions on Concurrence and Preference of Credits. - versus -
Respondents.
Present:
SANDOVAL-GUTIERREZ,
CORONA,
AZCUNA, and
GARCIA, JJ. respondent, Rubberworld Philippines, Inc.(Rubberworld, for short), a
domestic corporation engaged in the manufacture of footwear, bags and
garments.
On August 26, 1994, Rubberworld filed with the Department of Labor and
January 29, 2007 Employment (DOLE) a Notice of Temporary Partial Shutdown due to severe
financial crisis, therein announcing the formal actual company shutdown to
x------------------------------------------------------------------------------------------x take effect on September 26, 1994. A copy of said notice was served on the
recognized labor union of Rubberworld, the Bisig Pagkakaisa-NAFLU, the
union with which the corporation had a collective bargaining agreement.
DECISION
On September 1, 1994, Bisig Pagkakaisa-NAFLU staged a strike. It set up a
picket line in front of the premises of Rubberworld and even welded its
gate. As a result, Rubberworld's premises closed prematurely even before
GARCIA, J.: the date set for the start of its temporary partial shutdown.
Assailed and sought to be set aside in this petition for review under Rule 45 On September 9, 1994, herein petitioner union, the Lingkod Manggagawa
of the Rules of Court is the Decision[1] dated January 18, 2002 of the Court Sa Rubberworld, Adidas-Anglo (Lingkod, for brevity), represented by its
of Appeals (CA) in CA-G.R. SP No. 53356, as reiterated in its Resolution[2] of President, Sonia Esperanza, filed a complaint against Rubberworld and its
June 5, 2002, denying the petitioners motion for reconsideration. The Vice Chairperson, Mr. Antonio Yang, for unfair labor practice (ULP), illegal
assailed CA decision annulled and set aside an earlier decision of the Labor shutdown, and non-payment of salaries and separation pay. In its
Arbiter, as well as the resolution/order and writ of execution issued by the complaint, docketed as NLRC-NCR-Case No. 00-09-06637 (hereinafter
National Labor Relations Commission (NLRC) in a labor dispute between the referred to as ULP Case, for brevity), petitioner union alleged that it had
petitioners and the respondents over which a suspension order had been filed a petition for certification election during the freedom period, which
issued by the Securities and Exchange Commission (SEC). petition was granted by the DOLE Regional Director. In the same complaint,
petitioner union claimed that the strike staged by Bisig Pagkakaisa-NAFLU
was company-instigated/supported. The said complaint was referred to
Petitioner Lingkod Manggagawa sa Rubberworld, Adidas-Anglo is a Labor Arbiter Ernesto Dinopol for appropriate action.
legitimate labor union whose members were employees of the principal
subject to the condition that awards, if any, should be presented to the
Management Committee for processing and payment,
On November 22, 1994, while the aforementioned complaint was pending
with Labor Arbiter Dinopol, Rubberworld filed with the SEC a Petition for and disposing as follows:
Declaration of a State of Suspension of Payments with Proposed
Rehabilitation Plan. The petition, docketed as SEC Case No. 11-94-4920, was
granted by the SEC in its Order[3] dated December 28, 1994, to wit: WHEREFORE, decision is hereby rendered:
Accordingly, with the creation of the Management Committee, all actions 1) denying respondents motion to suspend proceedings;
for claims against Rubberworld Philippines, Inc. pending before any court,
tribunal, office, board, body, Commission or sheriff are hereby deemed 2) declaring respondent Rubberworld Phils., Inc. to have
SUSPENDED. committed unfair labor practice;
Consequently, all pending incidents for preliminary injunctions, writ of 3) declaring the temporary shutdown to have been officially ended
attachments, foreclosures and the like are hereby rendered moot and as of March 26, 1995;
academic.
Its motion for reconsideration of the same Order having been denied by the
For purposes of any appeal, the appeal bond is tentatively set at NLRC in its Resolution[7] of March 29, 1996, Rubberworld directly went to
P500,000.00. this Court on a Petition for Certiorari,[8] interposing the sole issue of
whether or not the NLRC acted without or in excess of jurisdiction or with
grave abuse of discretion amounting to lack or excess of jurisdiction in
SO ORDERED. requiring the corporation to post the upgraded appeal bond of
P27,506,255.70 based on the computation of Mr. Atienza.
Accordingly, respondents-appellants are hereby directed to upgrade or Finding that the continuance in business [of Rubberworld] would neither be
complete their Appeal Bond in the amount equivalent to Twenty Seven feasible/profitable nor work to the best of interest of the stockholders,
Million Five Hundred Six Thousand Two Hundred Fifty-Five Pesos and parties-litigants, creditors, or the general public, xxx Rubberworld
70/100 (P27,506,255.70) pursuant to the award as computed by Ricardo O. Philippines, Inc. is hereby DISSOLVED under Section 6(d) of P.D. 902-A.
Atienza within ten (10) days from receipt of this Order. Accordingly, the suspension Order is LIFTED.
The Laya Mananghaya Salgado & Co., CPAs is hereby appointed as liquidator Rubberworlds aforementioned amended petition and the supplement
to effect the dissolution of the petitioner. thereto in the interest of justice.
Eventually, in the herein assailed Decision[17] dated January 18, 2002, the
CA granted Rubberworlds petition in CAG.R. SP. No. 53356 on the finding
SO ORDERED. that the Labor Arbiter had indeed committed grave abuse of discretion
when it proceeded with the ULP case despite the SECs suspension order of
December 28, 1994, and accordingly declared the proceedings before it,
including the subsequent orders by the NLRC dismissing Rubberworlds
appeal and the writ of execution, null and void.
On August 18, 1995, a writ of execution[12] was issued by the NLRC in favor
of the petitioner union with a copy thereof served on the respondent
corporation. Faced with this dilemma, Rubberworld filed with the Court an
Urgent Omnibus Motion to declare null and void the execution/garnishment With their motion for reconsideration having been denied in the CA in its
made pursuant to the same writ. The motion, however, was denied by the Resolution[18] of June 5, 2002, petitioners are now with the Court via the
Court in its Resolution of November 18, 1998. instant recourse, raising the following issues:
On February 8, 1999, Rubberworld filed with the Court a Motion to Admit its
Amended Petition for Certiorari[13] and its Supplement,[14] alleging therein 1) Whether the CA had committed grave abuse of discretion amounting to
that pursuant to the SEC Order dated December 28, 1994, supra, the lack of jurisdiction or an excess in the exercise thereof when it gave due
proceedings before the Labor Arbiter should have been suspended. Hence, course to the petition filed by Rubberworld (Phils.), Inc. and annulled and
since the Labor Arbiter disregarded the SECs suspension order, the set aside the decisions rendered by the labor arbiter a quo and the NLRC,
subsequent proceedings before it were null and void. when the said decisions had become final and executory warranting the
outright dismissal of the aforesaid petition;
Consistent with its ruling in St. Martin Funeral Homes v. NLRC,[15] the
Court, in its Resolution of February 29, 1999, referred Rubberworlds 2) Whether the CA had committed grave abuse of discretion and reversible
amended petition for certiorari and its supplement to the CA for error when it applied Section 5(d) and Section 6 (c) of P.D. No. 902-A, as
appropriate action, whereat it was docketed as CA- G.R. SP No. 53356. amended, to the case at bar;
For its part, the CA, in its Resolution[16] of May 11, 2000, over the 3) Whether the CA had committed reversible error when it adopted and
vehement opposition of the petitioner union, resolved to admit applied the rulings in the cases of Rubberworld (Phils.), Inc., or Julie Yap Ong
v. NLRC, Marilyn F. Arellano, et. al.[19] and Rubberworld (Phils.), Inc. and The Labor Arbiter completely disregarded and violated Section 6(c) of
Julie Y. Ong v. NLRC, Aquino Magsalin, et. al.[20] to the case at bar. Presidential Decree 902-A, as amended, which categorically mandates the
suspension of all actions for claims against a corporation placed under a
management committee by the SEC. Thus, the proceedings before the Labor
Arbiter and the order and writ subsequently issued by the NLRC are all null
and void for having been undertaken or issued in violation of the SEC
We DENY. suspension Order dated December 28, 1994. As such, the Labor Arbiters
decision, including the dismissal by the NLRC of Rubberworls appeal, could
not have achieved a final and executory status.
It is the petitioners submission that the decision of the Labor Arbiter, the
affirmatory decision of the NLRC and the latters dismissal of Rubberworlds
appeal, as well the writ of execution subsequently issued, can no longer be
annulled and set aside, the same having all become final and executory.
Additionally, petitioners argue that no appeal from the decision of the Labor Acts executed against the provisions of mandatory or prohibitory laws shall
Arbiter was ever perfected due to Rubberworld's failure to upgrade or post be void, except when the law itself authorizes their validity.[21] The Labor
additional bond as ordered by the NLRC. Hence, they submit that the CA Arbiter's decision in this case is void ab initio, and therefore, non-
acted in grave abuse of discretion in even giving due course to existent.[22] A void judgment is in effect no judgment at all. No rights are
Rubberworlds petition in CA-G.R. SP No. 53356, let alone rendering a divested by it nor obtained from it. Being worthless in itself, all proceedings
decision thereon annulling and setting aside the proceedings before the upon which the judgment is founded are equally worthless. It neither binds
Labor Arbiter and the NLRCs dismissal of Rubberworlds appeal and the writ nor bars anyone. All acts performed under it and all claims flowing out of it
of execution issued following the dismissal of said appeal. are void.[23] In other words, a void judgment is regarded as a nullity, and
the situation is the same as it would be if there were no judgment. It
The Court disagrees. accordingly leaves the party-litigants in the same position they were in
before the trial.[24]
We shall now address the more substantial issue in this case, namely, the c) To appoint one or more receivers of the property, real or personal, which
applicability of the provisions of Section 5 (d) and Section 6 (c) of P.D. No. is the subject of the action pending before the Commission in accordance
902-A, as amended, reorganizing the SEC, vesting it with additional powers with the pertinent provisions of the Rules of Court in such other cases
and placing it under the Office of the President, which respectively read: whenever necessary in order to preserve the rights of the parties-litigants
and/or protect the interest of the investing public and creditors: x x x
Provided, finally, That upon appointment of a management committee, the
Section 5. In addition to the regulatory adjudicative functions of the rehabilitation receiver, board or body, pursuant to this Decree, all actions
for claims against corporations, partnerships, or associations under
Securities and Exchange Commission over corporations, partnerships and
other forms of associations registered with it as expressly granted under management or receivership pending before any court, tribunal, board or
existing laws and decrees, it shall have original and exclusive jurisdiction to body shall be suspended accordingly. [Emphasis supplied]
hear and decide cases involving:
As correctly ruled by the CA, the issue of applicability in labor cases of the this Court. Ubi lex non distinguit nec nos distinguere debemos. Allowing
aforequoted provisions of PD 902-A, as amended, had already been labor cases to proceed clearly defeats the purpose of the automatic stay
resolved by this Court in its earlier decisions in Rubberworld (Phils.), Inc., or and severely encumbers the management committee's time and resources.
Julie Yap Ong v. NLRC, Marilyn F. Arellano, et. al.[27] and Rubberworld The said committee would need to defend against these suits, to the
(Phils.), Inc. and Julie Y. Ong v. NLRC, Aquino, Magsalin, et. al,[28] supra. detriment of its primary and urgent duty to work towards rehabilitating the
corporation and making it viable again. To rule otherwise would open the
floodgates to other similarly situated claimants and forestall if not defeat
In the first Rubberworld case, the Court upheld the applicability of PD 902-A the rescue efforts. Besides, even if the NLRC awards the claims of private
to labor cases pursuant to Section 5(d) and Section 6(c) thereof, with the respondents, its ruling could not be enforced as long as the petitioner is
following pronouncements: under the management committee.[30]
It is plain from the foregoing provisions of the law that upon the In Chua v. National Labor Relations Commission, we ruled that labor claims
appointment [by the SEC] of a management committee or a rehabilitation cannot proceed independently of a bankruptcy liquidation proceeding, since
receiver, all actions for claims against the corporation pending before any these claims would spawn needless controversy, delays, and confusion.[31]
court, tribunal or board shall ipso jure be suspended. The justification for With more reason, allowing labor claims to continue in spite of a SEC
the automatic stay of all pending actions for claims is to enable the suspension order in a rehabilitation case would merely lead to such results.
management committee or the rehabilitation receiver to effectively exercise
its/his powers free from any judicial or extra-judicial interference that might
unduly hinder or prevent the rescue of the debtor company. To allow such xxx xxx xxx
other actions to continue would only add to the burden of the management
committee or rehabilitation receiver, whose time, effort and resources
would be wasted in defending claims against the corporation instead of Article 217 of the Labor Code should be construed not in isolation but in
being directed toward its restructuring and rehabilitation.[29] harmony with PD 902-A, according to the basic rule in statutory
construction that implied repeals are not favored.[32] Indeed, it is axiomatic
that each and every statute must be construed in a way that would avoid
xxx xxx xxx conflict with existing laws. True, the NLRC has the power to hear and decide
labor disputes, but such authority is deemed suspended when PD 902-A is
put into effect by the Securities and Exchange Commission. [Emphasis
x x x The law is clear: upon the creation of a management committee or the supplied]
appointment of a rehabilitation receiver, all claims for actions shall be
suspended accordingly. No exception in favor of labor claims is mentioned
in the law. Since the law makes no distinction or exemptions, neither should
The second Rubberworld case reiterates the above pronouncements of the Petitioners are in error.
Court:
In short, at the time the SEC issued its suspension Order of December 28,
xxx xxx xxx 1994, the proceedings before the Labor Arbiter were still very much
pending. As such, no final and executory decision could have validly
emanated therefrom. Like the CA, we do not see any reason why the
Thus, when NLRC proceeded to decide the case despite the SEC suspension doctrine of stare decisis will not apply to this case.
order, the NLRC acted without or in excess of its jurisdiction to hear and
decide cases. As a consequence, any resolution, decision or order that it
rendered or issued without jurisdiction is a nullity. [Emphasis supplied] For being well-grounded in fact and law, the assailed CA decision and
resolution in CA-G.R. SP No. 53356 cannot be said to have been tainted with
grave abuse of discretion or issued in excess or want of jurisdiction. We find
no reason to overturn such rulings.
Petitioners argue, however, that the doctrines laid down in the two
aforecited cases cannot be made to apply to the instant controversy
WHEREFORE, the instant petition is DENIED and the assailed decision and
because the SEC order therein only mandates that all pending cases against resolution of the CA are AFFIRMED.
Rubberworld Philippines, Inc. should be deemed suspended. Petitioners
contend that the decision of the Labor Arbiter in the present case, as well
the order of dismissal and writ of execution issued by NLRC, have become
final and executory by reason of Rubberworlds failure to perfect its appeal Costs against the petitioner.
by not upgrading or completing the required cash or surety bond as
ordained by the NLRC. Petitioners thus conclude that the doctrine of stare
decisis cannot apply to the instant case. SO ORDERED.
SECOND DIVISION On 10 March 1994 private respondents filed complaints for illegal
deduction, underpayment and/or non-payment of wages, premium pay for
[G.R. No. 125298. February 11, 1999] holiday, rest day and night shift differential pay, 13th month pay, service
incentive leave pay, separation pay, allowance and unfair labor practice
against CMP,[3] Carolina Mabanta Piao and Ponciano Mabanta Sr. Private
CMP FEDERAL SECURITY AGENCY, INC., petitioner, vs. NATIONAL LABOR respondent Fernando Caranto later amended his complaint to include illegal
RELATIONS COMMISSION, LABOR ARBITER CRESENCIANO R. INIEGO, and dismissal[4] after he was relieved from his post at the Maalikaya Health
FERNANDO CARANTO, RESTY REMITTERE, REYNALDO ROSALES, ANTONIO Complex by CMP, allegedly upon request of the client.
TAPAR, NARCISO CLARO, SIONY MANOS, BALDO VIODOR and DAWAY
WAHAB, respondents.
DECISION The case was initially set for mandatory conference or conciliation on 29
March 1994. It was reset to 11 April 1994 by agreement of the parties to
BELLOSILLO, J.: give them adequate time to explore the possibility of amicable settlement.
Thereafter the hearing was reset several times with Labor Arbiter Cresencio
R. Iniego directing the parties each time to submit their respective position
CMP FEDERAL SECURITY AGENCY INC. seeks in this petition for certiorari to papers and other documentary evidence. Efforts at settlement failed.
annul, for having been rendered with grave abuse of discretion amounting
to lack or excess of jurisdiction, the 26 October 1995 Decision of the
National Labor Relations Commission in NLRC NCR CA 007480-94, Fernando When the case was finally called for hearing on 23 May 1994 private
Caranto, et al. v. CMP Federal Security Agency, Inc., et al.,[1] affirming with respondents filed their position paper and other documentary evidence in
modifications the decision of the Labor Arbiter and ordering herein compliance with the Labor Arbiters orders. On the other hand, CMP moved
petitioner to pay private respondents wage differentials, 13th month pay, for another postponement which the Labor Arbiter denied. Thereafter, the
holiday pay and service incentive leave pay; and, its Resolution of 29 case was deemed submitted for decision. It was only on 13 June 1994 that
November 1995 denying reconsideration. CMP presented its position paper.
CMP Federal Security Agency Inc. (CMP hereon) is in the business of On 22 July 1994 the Labor Arbiter rendered a decision in favor of private
providing detective and security services. Among its employees were herein respondents ordering CMP to reinstate Fernando Caranto with full back
private respondent security guards Fernando Caranto, Resty Remittere, wages, pay salary differentials to all private respondents, plus attorneys
Reynaldo Rosales, Antonio Tapar, Narciso Claro, Siony Manos, Baldo Viodor fees.
and Daway Wahab,[2] all assigned at the Maalikaya Health Complex in
Quezon City.
Both parties appealed to the NLRC. Private respondents, in their Partial Holiday Pay - P1,760.00
Appeal, alleged that the Labor Arbiter erred in excluding the awards for
service incentive leave pay, holiday pay, overtime pay and illegal
deductions. CMP for its part argued that the Labor Arbiter erred in holding Service Incentive Leave Pay - P 590.00
that CMP did not submit any position paper despite his repeated orders; in
ruling that the non-filing of the position paper amounted to an admission of
liability by CMP; and, in deciding the case solely on the basis of the position
P6,142.75
paper and evidence submitted by complainants.
RESTY REMITTERE
In its assailed Decision of 26 October 1995 the NLRC denied CMPs appeal,
granted private respondents Partial Appeal and modified the decision of the
Labor Arbiter by including in the computation of monetary awards holiday
pay, service incentive leave pay, 13th month pay, overtime pay and 13th Month Pay - P 9,195.49
reimbursement for illegal deductions. The dispositive portion reads -
REYNALDO ROSALES
FERNANDO CARANTO
P 9,504.50
P17,076.17
SIONY MANOS
ANTONIO TAPAR
P 7,537.83
P17,076.17
BALDO VIODOR
CLARO NARCISO
DAWAY WAHAB The issues are: (a) whether the NLRC committed grave abuse of discretion
amounting to lack or excess of jurisdiction in holding that private
respondent Fernando Caranto was illegally dismissed by CMP; and, (b)
13th Month Pay - P 362.50 whether in granting all the money claims of private respondents CMP was
denied due process.
Contrariwise, when Caranto was relieved from his post on 6 May 1994 he
In termination cases like the one before us, the burden of proving that the immediately pursued his claim against CMP by amending his complaint six
dismissal of the employee was for a valid or authorized cause rests on the (6) days after to include illegal dismissal among his charges. This can hardly
be expected from one who has voluntarily "abandoned" his job, as claimed
employer[7] and failure to discharge that duty would mean that the
dismissal is not justified and therefore illegal.[8] The same principle was by CMP. The immediate filing of a complaint for illegal dismissal against the
reiterated by this Court in Golden Donuts Inc. v. NLRC[9] when it ruled that employer is a clear indication that the employee has not given up on his
the employer carries the burden of proof in showing just cause for work.[10]
terminating the services of an employee.
The fact that the NLRC in its decision made no reference to the position
Set against the records of this case, CMP's claim that it was deprived of its paper and evidence of petitioner does not mean that they were not
right to be heard readily collapses. The earlier narration of facts clearly considered. It is simply that the NLRC agreed with the Labor Arbiters
demonstrates that the parties were repeatedly ordered by the Labor Arbiter findings and conclusions and found nothing substantial in petitioners
to submit their position papers together with the affidavits of their position paper and documentary evidence to warrant a reversal of those
witnesses and other evidence in support thereof - first on 11 April 1994, findings and conclusions.
then on 22 April 1994, and finally on 6 May 1994. During the 23 May 1994
conference CMP, instead of complying with the order requiring it to submit
its position paper, moved for another postponement which was denied. It The essence of due process is simply an opportunity to be heard or, as
was only on 13 June 1994, after the case was submitted for resolution, that applied to administrative proceedings, an opportunity to explain ones side
CMP finally presented its position paper. Having been given ample or an opportunity to seek reconsideration of the action or ruling complained
of.[16] Where, as in this case, the party has had ample opportunity to FIRST DIVISION
present its side of the controversy not only before the Labor Arbiter but also
the NLRC on appeal, it cannot thereafter interpose lack of due process for [G.R. No. 116572. December 18, 2000]
what the fundamental law abhors is simply the absolute absence of D. M. CONSUNJI, INC., petitioner, vs. NATIONAL LABOR RELATIONS
opportunity to be heard. COMMISSION (FOURTH DIVISION), and ALEXANDER AGRAVIADOR,
JOVENCIO MENDREZ, FELIPE BARCELONA, CONCORCIOLASPUA and
ROGELIO DIAZ, respondents.
Finally, while it may be true that in labor cases stringent rules of procedure
may be dispensed with in the interest of justice, it does not mean that a DECISION
party litigant is at liberty to completely disregard or ignore the rules, KAPUNAN, J.:
particularly those relating to the periods for filing of pleadings. In this
connection, if we are to sustain petitioners argument that it was denied due In this special civil action of certiorari, petitioner prays that the decision of
process when its position paper and documentary evidence were not public respondent National Labor Relations Commission be set aside since it
considered by the Labor Arbiter in deciding the case, we will in effect put a acted with grave abuse of discretion amounting to lack of jurisdiction when
premium on the undesirable practice of filing position papers late and only it directed the reinstatement of private respondents to their former
after the case has already been submitted for decision. positions with full backwages.
This case arose from the complaint for illegal dismissal with prayer for
reinstatement and payment of full wages filed by the private
WHEREFORE, the petition is DISMISSED. The Decision of the National Labor respondents. Private respondents were hired by petitioner as project
Relations Commission dated 26 October 1995 affirming with modifications employees to work on its Cebu Super Block Project in Cebu City. Their
the Decision of the Labor Arbiter and ordering petitioner CMP FEDERAL separate but identical contracts state among others:
SECURITY AGENCY, INC., to pay private respondents FERNANDO CARANTO,
RESTY REMITTERE, REYNALDO ROSALES, ANTONIO TAPAR, NARCISO CLARO, You are hired/appointed as project employee as ___________ for an
SIONY MANOS, BALDO VIODOR and DAWAY WAHAB wage differentials, estimated period of employment for _____________________ in the
13th month pay, holiday pay and service incentive leave pay as earlier company's construction project at Cebu Superblock.
quoted in this Decision, and its Resolution of 29 November 1995 denying
THE TERMS AND CONDITIONS OF YOUR EMPLOYMENT ARE AS FOLLOWS:
petitioners Motion for Reconsideration, are AFFIRMED. Costs against
petitioner. The period of employment is for an estimated period of one month that is
for ___________________ to _____________________ provided that it
shall not extend beyond the duration of the project, or a particular phase
SO ORDERED. thereof, for which you are hired; subject to the further condition that your
services may be sooner terminated should the particular phase of work for
which you are hired be completed earlier or should supervisor find your
services unsatisfactory or for any other justifiable cause. Should there be
other construction projects of the company at the time of your layoff for 2. Jovencio Mendrez 5,460.00
completion of phase of work, you may request for employment in such
other project, subject to the availability of job vacancy in such other project 3. Felipe Barcelona 5,460.00
suited to your skills.[1] 4. Consorcio Laspua 5,460.00
Their contracts also provide for the following terms and conditions:[2] 5. Rogelio Diaz 5,460.00
Name Date of Hiring Date of Position Salary GRAND TOTAL P27,300.00[3]
Termination
In ruling that the dismissals were illegal, the Labor Arbiter explained that
Alexander Feb. 9, 1993 March 9, 1993 Carpenter 13.625/hr. while the private respondents voluntarily signed the employment contract
Agraviador which fixed the term of their employment, their dismissal was not actually
based on the expiration of the term of their employment because some of
Jovencio Feb. 8, 1993 March 8, 1993 Laborer 13.125/hr.
them were dismissed before the end of the contract and there were those
Mendrez
dismissed even long after its expiration. The Labor Arbiter, thus, concluded
Felipe Barcelona Nov. 21, 1992 Dec. 21, 1992 Carpenter 13.625/hr. that the contracts of employment of the private respondents should not be
honored because they were made more for breach rather than for
observance.[4]
Consorcio Feb. 17, 1993 March 2, 1993 Laborer 13.125/hr.
Laspuna The NLRC affirmed the decision of the Labor Arbiter. It ruled that the
employment period need not reach six months in order that the private
Rogelio Diaz Dec. 01, 1992 Jan. 01, 1993 Laborer 13.125/hr.
respondents attain the status of regular employees citing Article 280 of the
Labor Code.[5] It agreed with the Labor Arbiter that the private respondents
On March 2, 1993, private respondents services were terminated allegedly could not be considered contract workers because they worked even after
without regard to the date of termination as specified in their contracts of the expiration of their contracts of employment.[6]
employment. Petitioner reported the termination of their services to the
nearest Regional Office of the Department of Labor alleging that the term of Dissatisfied with the decision of the respondent NLRC, petitioner appealed
the contracts of employment had expired. to this Court by way of a special civil action of certiorari under Rule 65 of the
Rules of Court, raising the following issues:
The private respondents then filed their respective complaints for illegal
1. ARE THE PRIVATE RESPONDENTS ENTITLED TO REINSTATEMENT WITH
dismissal. On July 9, 1993, the Labor Arbiter rendered a decision finding the
dismissal of the private respondents without just cause and ordering FULL BACKWAGES THE FACT (sic) THAT THEY WERE HIRED STRICTLY ON
petitioner to reinstate them to their former positions without loss of PROJECT TO PROJECT BASIS?
benefits and seniority rights and to pay them as their backwages, to wit: 2. DID THE RESPONDENT NATIONAL LABOR RELATIONS COMMISSION ACT
WITH GRAVE ABUSE OF DISCRETION WHICH AMOUNTED TO LACK OF
1. Alexander Agraviador P5,460.00
JURISDICTION WHEN IT DIRECTED THE REINSTATEMENT OF THE PRIVATE
RESPONDENTS TO THEIR PREVIOUS POSITION (sic) DESPITE THEIR BEING project or undertaking the completion or termination of which has been
PROJECT EMPLOYEES?[7] determined at the time of the engagement of the employee.[14]
In resolving these issues, we shall discuss whether or not the private We hold that the private respondents are project employees. Their
respondents were project employees; and if in the affirmative, whether or contracts of employment readily show that the private respondents were
not the termination of their employment was illegal. employed with respect to a specific project.The private respondents in this
case were workers in a construction project of the petitioner. While
Petitioner maintains that the private respondents were project employees employed with respect to a specific project, the contracts of employment
since they were hired on a project-to-project basis.[8] Moreover, private between the private respondents and the petitioner provide that the former
respondents cannot be regular employees because they were all employed were employed for a term of one (1) month which was the estimated period
for less than six (6) months such that even assuming that they were not for the project to be finished. The private respondents do not even claim to
project employees, they have not attained that status of regular be regular employees but merely that, as employees at the Cebu Super
employment.[9] Block, they were terminated before the completion of the project without
On the other hand, private respondents claim that they were dismissed just cause and due process. As project employees, there is no showing that
from their employment on March 2, 1993 even though the construction they were part of the work pool of the petitioner construction
project was not yet completed. They also allege that after their services company. Hence, in their memorandum, private respondents admit that
were terminated, petitioner hired new workers.[10] They argue that their they are not unaware that as project employees their employment can be
dismissal was effected without just cause and without due process of law.[11] terminated upon the completion of the project.[15]
The Office of the Solicitor General in its Memorandum recommended that Examining the standard contracts signed by the private respondents, there
the decision of the NLRC be reversed and the complaints filed by private are three ways by which their employment may be terminated: one, the
respondents dismissed as they were project employees whose employment expiration of the one month period, which was the estimated period for the
periods were pre-determined at the moment they were hired. As project completion of the project; two, the completion of the project or phase of
employees, private respondents are not entitled to reinstatement and full the project for which they were engaged prior to the expiration of the one
backwages.[12] month period; and three, upon the finding of unsatisfactory services or
other just cause. The private respondents admitted before the labor arbiter
The petition is impressed with merit. that they signed their employment contract voluntarily.[16] By this
admission, the private respondents necessarily bound themselves to be
Project employee is one whose employment has been fixed for a specific
employed for a fixed duration knowingly and voluntarily without any force,
project or undertaking the completion or termination of which has been
duress or improper pressure. There is no showing that the term fixed was
determined at the time of the engagement of the employee or where the
used to preclude acquisition of tenurial security since private respondents
work or services to be performed is seasonal in nature and the employment
were admittedly employed with respect to a specific project, the Cebu
is for the duration of the season.[13] This Court has held that the length of
Super Block. Inescapably, being a valid contract between the private
service of a project employee is not the controlling test of employment
respondents and the petitioner, the provisions thereof, specifically with
tenure but whether or not the employment has been fixed for a specific
respect to the one (1) month period of employment, has the force of law employment.[21]Specifically, private respondents Agraviador and Mendrez
between the parties. are entitled to the payment of their salaries equivalent to their salary from
the time of termination until the expiration of their employment period of
At the time of the termination of the private respondents employment on one (1) month, the estimated period the project was to be completed.
March 2, 1993, the respective periods or terms of employment of private
respondents Felipe Barcelona, Consorcio Laspuna and Rogelio Diaz had WHEREFORE, the instant petition is granted. The decision of the National
already expired. The fact that they were allowed to work for weeks after the Labor Relations Commission dated June 28, 1994 is
expiration of their contracts would not necessarily show that petitioner had hereby REVERSED and SET ASIDE. Petitioner is ordered to pay private
dishonored the contracts. Indeed, some phases of the project may not have respondent Alexander Agraviador and Jovencio Mendrez the unexpired
been completed after the estimated one month period and that their portion of their contract.
services were still necessary.
SO ORDERED.
On the other hand, the one month period under the contracts of Alexander
Agraviador and Jovencio Mendrez had not yet expired when their services
were terminated on March 2, 1993 considering that the duration of their
contracts was from February 9 to March 9, 1993 with respect to Agraviador,
and from February 8 to March 8, 1993 with respect to Mendrez. Petitioner
merely claims that all the private respondents were terminated because of
the expiration of the period of the contract.[17] Petitioner has not alleged,
much less established, that the premature termination of the services of
private respondents Agraviador and Mendrez was due to the earlier
completion of the project or any phase or phases thereof to which they
were assigned. Neither has it been shown that the services of Agraviador
and Mendrez were unsatisfactory. In termination cases, the burden of
proving that an employee has been lawfully dismissed lies with the
employer.[18] It is in the interest of justice to require employers to state the
reason for their project employees dismissal and prove this ground once its
veracity is challenged. Employers who hire project employees are mandated
to prove the actual basis of the latters dismissal.[19] The inescapable
conclusion is that Agraviador and Mendrez were terminated prior to the
expiration of the period of their employment without just cause, hence,
their termination was illegal. However, private respondents can not be
reinstated since the project they were assigned to was already completely
finished.[20] What they are entitled to is the payment of their salaries
corresponding to the unexpired portions of their
SECOND DIVISION On January 17, 1989, petitioners filed a complaint against private
respondents for illegal dismissal and sought recovery of overtime pay,
[G.R. No. 111042. October 26, 1999] holiday pay, premium pay on holiday and rest day, service incentive leave
pay, separation pay, 13th month pay, and attorneys fees.
MENDOZA, J.:
WHEREFORE, in the light of the foregoing, judgment is hereby rendered
declaring the complainants to have been illegally dismissed and ordering the
This is a petition for certiorari to set aside the decision[1] of the National respondents to pay the complainants the following monetary awards:
Labor Relations Commission (NLRC) which reversed the awards made by the
Labor Arbiter in favor of petitioners, except one for P4,992.00 to each,
representing 13th month pay. AVELINO LAMBO VICENTE BELOCURA
Petitioners Avelino Lambo and Vicente Belocura were employed as tailors II. OVERTIME PAY 13,447.90 13,447.90
by private respondents J.C. Tailor Shop and/or Johnny Co on September 10,
1985 and March 3, 1985, respectively. They worked from 8:00 a.m. to 7:00
p.m. daily, including Sundays and holidays. As in the case of the other 100
employees of private respondents, petitioners were paid on a piece-work III. HOLIDAY PAY 1,399.30 1,399.30
basis, according to the style of suits they made. Regardless of the number of
pieces they finished in a day, they were each given a daily pay of at least
P64.00. IV. 13TH MONTH PAY 4,992.00 4,992.00
======
SO ORDERED.[3]
SO ORDERED.[2]
The petition is meritorious.
In determining the existence of an employer-employee relationship, the Second. Private respondents contend, however, that petitioners refused to
following elements must be considered: (1) the selection and engagement report for work after learning that the J.C. Tailoring and Dress Shop
of the employee; (2) the payment of wages; (3) the power of dismissal; and Employees Union had demanded their (petitioners) dismissal for conduct
(4) the power to control the employees conduct.[5] Of these elements, the unbecoming of employees. In support of their claim, private respondents
most important criterion is whether the employer controls or has reserved presented the affidavits[9] of Emmanuel Y. Caballero, president of the
the right to control the employee not only as to the result of the work but union, and Amado Cabaero, member, that petitioners had not been
also as to the means and methods by which the result is to be dismissed by private respondents but that practically all employees of the
accomplished.[6] company, including the members of the union had asked management to
terminate the services of petitioners. The employees allegedly said they
were against petitioners request for change of the mode of payment of
In this case, private respondents exercised control over the work of their wages, and that when a meeting was called to discuss this issue, a
petitioners. As tailors, petitioners worked in the companys premises from petition for the dismissal of petitioners was presented, prompting the latter
8:00 a.m. to 7:00 p.m. daily, including Sundays and holidays. The mere fact to walk out of their jobs and instead file a complaint for illegal dismissal
that they were paid on a piece-rate basis does not negate their status as against private respondents on January 17, 1989, even before all employees
regular employees of private respondents. The term wage is broadly defined could sign the petition and management could act upon the same.
in Art. 97 of the Labor Code as remuneration or earnings, capable of being
expressed in terms of money whether fixed or ascertained on a time, task,
piece or commission basis. Payment by the piece is just a method of To justify a finding of abandonment of work, there must be proof of a
compensation and does not define the essence of the relations.[7] Nor does deliberate and unjustified refusal on the part of an employee to resume his
the fact that petitioners are not covered by the SSS affect the employer- employment. The burden of proof is on the employer to show an
employee relationship. unequivocal intent on the part of the employee to discontinue
employment.[10] Mere absence is not sufficient. It must be accompanied by
manifest acts unerringly pointing to the fact that the employee simply does
not want to work anymore.[11]
recovering the difference between the amount he actually received and that
amount which he should have received.
Private respondents failed to discharge this burden. Other than the self-
serving declarations in the affidavits of their two employees, private
respondents did not adduce proof of overt acts of petitioners showing their
intention to abandon their work. On the contrary, the evidence shows that Fourth. The Labor Arbiter awarded backwages, overtime pay, holiday pay,
13th month pay, separation pay and attorneys fees, corresponding to 10%
petitioners lost no time in filing the case for illegal dismissal against private
respondent. This fact negates any intention on their part to sever their of the total monetary awards, in favor of petitioners.
employment relationship.[12] Abandonment is a matter of intention; it
cannot be inferred or presumed from equivocal acts.[13]
As petitioners were illegally dismissed, they are entitled to reinstatement
with backwages. Considering that petitioners were dismissed from the
Third. Private respondents invoke the compromise agreement,[14] dated service on January 17, 1989, i.e., prior to March 21, 1989,[18] the Labor
March 2, 1993, between them and petitioner Avelino Lambo, whereby in Arbiter correctly applied the rule in the Mercury Drug case,[19] according to
consideration of the sum of P10,000.00, petitioner absolved private which the recovery of backwages should be limited to three years without
respondents from liability for money claims or any other obligations. qualifications or deductions. Any award in excess of three years is null and
void as to the excess.[20]
To be sure, not all quitclaims are per se invalid or against public policy. But
The Labor Arbiter correctly ordered private respondents to give separation
those (1) where there is clear proof that the waiver was wangled from an
unsuspecting or gullible person or (2) where the terms of settlement are pay. Considerable time has lapsed since petitioners dismissal, so that
unconscionable on their face are invalid. In these cases, the law will step in reinstatement would now be impractical and hardly in the best interest of
the parties. In lieu of reinstatement, separation pay should be awarded to
to annul the questionable transaction.[15] However, considering that the
Labor Arbiter had given petitioner Lambo a total award of P94,719.20, the petitioners at the rate of one month salary for every year of service, with a
amount of P10,000.00 to cover any and all monetary claims is clearly fraction of at least six (6) months of service being considered as one (1)
unconscionable. As we have held in another case,[16] the subordinate year.[21]
position of the individual employee vis-a-vis management renders him
especially vulnerable to its blandishments, importunings, and even
intimidations, and results in his improvidently waiving benefits to which he The awards for overtime pay, holiday pay and 13th month pay are in
is clearly entitled. Thus, quitclaims, waivers or releases are looked upon accordance with our finding that petitioners are regular employees,
with disfavor for being contrary to public policy and are ineffective to bar although paid on a piece-rate basis.[22] These awards are based on the
claims for the full measure of the workers legal rights.[17] An employee who following computation of the Labor Arbiter:
is merely constrained to accept the wages paid to him is not precluded from
AVELINO LAMBO
P 32.00/day 8 hrs. =
4.00/hr. x 25% =
P 64.00/day x 26 days =
1.00/hr. + P4.00/hr. =
P 41.00/day 8 hrs. =
5.12/hr. x 25% =
*2 hours = 25%
1.28/hr. + P5.12/hr. =
P 64.00/day 8 hrs. =
8.00/hr. x 25% =
2.00/hr. + P8.00/hr. =
P 49.00/day 8 hrs. =
6.12/hr. x 25% =
1.53/hr. + P6.12/hr. =
P 32.00/day x 200% =
32.00/day x 30% =
P 64.00/day x 200% =
P 41.00/day x 200% =
64.00/day x 30% =
41.00/day x 30% =
P 64.00/day x 26 days =
P 49.00/day x 200% =
======
VICENTE BELOCURA
=====
SUMMARY
=======
Except for the award of attorneys fees in the amount of P19,110.24, the TOTAL P84,719.20 P96,383.20
above computation is affirmed. The award of attorneys fees should be
disallowed, it appearing that petitioners were represented by the Public
Attorneys Office. With regard to petitioner Avelino Lambo, the amount of GRAND TOTAL P181,102.40
P10,000.00 paid to him under the compromise agreement should be
deducted from the total award of P94,719.20. Consequently, the award to
each petitioner should be as follows:
WHEREFORE, the decision of the National Labor Relations Commission is
SET ASIDE and another one is RENDERED ordering private respondents to
pay petitioners the total amount of One Hundred Eighty-One Thousand One
AVELINO LAMBO VICENTE BELOCURA Hundred Two Pesos and 40/100 (P181,102.40), as computed above.
Article XII The [C]ompany agrees to advance to the Union a sum equivalent WHEREFORE, premises considered, judgment is hereby rendered:
to 10% of the sum total of all the salary increases and signing bonuses
granted to the Supervisors under this collective Bargaining Agreement and
a) declaring the special assessment of 10% of the sum total of CBA benefits WHEREFORE, the appeals are hereby denied, the Order of the Med-Arbiter
as illegal; is affirmed en toto.
b) ordering respondents union officers to refund to the complainants and On July 5, 1991, the aforesaid Decision was received by the respondent
other union members the amount of five Hundred Thousand Pesos Union Officers and respondent Company. On July 13, 1991, they filed their
(P500,000.00) advanced by the respondent Company as part of the 10% Motion for Reconsideration stating, inter alia that the questioned ten
sum total of CBA benefits without unnecessary delay; percent (10%) special assessment is valid pursuant to the ruling in Bank of
the Philippine Islands Employee Union ALU vs. NLRC.[8]
c) ordering the respondent company to stop and desist from further making On July 31, 1992, Undersecretary B.E. Laguesma issued an Order[9];
advances and deductions from the union members salaries their share in resolving, thus:
the advances already made to the union;
"WHEREFORE, the Decision dated 01 July 1991 is hereby SET ASIDE. In lieu
d) ordering the respondent Company to remit directly to the complainants thereof, a new one is hereby entered DISMISSING the Complaint/Petition
and other union members the amount already deducted from the union for lack of merit."
members salaries as part of their share in the advances already made to the
union and which it had kept in trust during the pendency of this case; and
Hence, the present petition seeking to annul and set aside the above-cited
Order of public respondent Undersecretary B.E. Laguesma, for being
e) directing the respondents union officers and respondent Company to allegedly tainted with grave abuse of discretion amounting to lack of
submit report on the compliance thereof. jurisdiction.
SO ORDERED. Did the public respondent act with grave abuse of discretion in issuing the
challenged Order reversing his own Decision of July 1, 1991? Such is the sole
issue posited,which we resolve in the negative. The petition is
On appeal, respondent DOLE Undersecretary Bienvenido E. Laguesma unmeritorious.
handed down a Decision[7] on July 1, 1991, disposing as follows:
Petitioners claim[10] that the Decision of the Secretary of Labor and Clearly, before a petition for certiorari under Rule 65 of the Rules of Court
Employment dated July 1, 1991, affirming in toto the Order of Med-Arbiter may be availed of, the filing of a motion for reconsideration is a condition
Rasidali Abdullah dated January 31, 1991, cannot be a subject of a motion sine qua non to afford an opportunity for the correction of the error or
for reconsideration because it is final and unappealable pursuant to Section mistake complained of.
8, Rule VIII, Book V of the Omnibus Rule Implementing the Labor Code. It is
further argued that the only remedy of the respondent Union Officers' is to
file a petition for certiorari with this Court. So also, considering that a decision of the Secretary of Labor is subject to
judicial review only through a special civil action of certiorari and, as a rule,
cannot be resorted to without the aggrieved party having exhausted
Section 8, Rule VIII, Book V of the Omnibus Rules Implementing the Labor administrative remedies through a motion for reconsideration, the
Code, provides: aggrieved party, must be allowed to move for a reconsideration of the same
so that he can bring a special civil action for certiorari before the Supreme
Court.[12]
"The Secretary shall have fifteen (15) calendar days within which to decide
the appeal from receipt of the records of the case. The decision of the
Secretary shall be final and inappealable." [Underscoring supplied]. Furthermore, it appears that the petitioners filed with the public
(Comment, p. 101) respondent a Motion for Early Resolution[13] dated June 24, 1992. Averring
that private respondents' Motion for Reconsideration did not contain
substantial factual or legal grounds for the reversal of subject decision.
The aforecited provision cannot be construed to mean that the Decision of Consequently, petitioners are now estopped from raising the issue sought
the public respondent cannot be reconsidered since the same is reviewable for resolution. In Alfredo Marquez vs. Secretary of Labor,[14] the Court said:
by writ of certiorari under Rule 65 of the Rules of Court. As a rule, the law
requires a motion for reconsideration to enable the public respondent to
correct his mistakes, if any. In Pearl S. Buck Foundation, Inc., vs. NLRC,[11] "xxx The active participation of the party against whom the action was
this Court held: 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
"Hence, the only way by which a labor case may reach the Supreme Court is the case and will bar said party from later on impugning the court or body's
through a petition for certiorari under Rule 65 of the Rules of Court alleging jurisdiction."
lack or excess of jurisdiction or grave abuse of discretion. Such petition may
be filed within a reasonable time from receipt of the resolution denying the
motion for reconsideration of the NLRC decision." [Underscoring; supplied]. What is more, it was only when the public respondents issued the Order
adverse to them that the petitioners raised the question for the first time
before this Court. Obviously, it is a patent afterthought which must be
abhorred.
(g) No officer, agent, member of a labor organization shall collect any fees,
dues, or other contributions in its behalf or make any disbursement of its
money or funds unless he is duly authorized pursuant to its constitution and
Petitioners also argued that the check-off provision in question is illegal
by-laws.
because it was never submitted for consideration and approval to "all the
members at a general membership meeting called for the purpose"; and
further alleged that the formalities mandated by Art. 241, paragraphs (n)
and (o) of the Labor Code, as amended, were not complied with. xxx
"A check-off is a process or device whereby the employer, on agreement (n) No special assessment or other extraordinary fees may be levied upon
with the Union, recognized as the proper bargaining representative, or on the members of a labor organization unless authorized by a written
prior authorization from its employees, deducts union dues or agency fees resolution of a majority of all the members of a general membership
from the latter's wages and remits them directly to the union."[15] Its meeting duly called for the purpose. The secretary of the organization shall
desirability in a labor organization is quite evident. It is assured thereby of record the minutes of the meeting including the list of all members present,
continuous funding. As this Court has acknowledged, the system of check- the votes cast, the purpose of the special assessment or fees and the
off is primarily for the benefit of the Union and only indirectly, for the recipient of such assessment or fees. The record shall be attested to by the
individual employees. president.
The legal basis of check-off is found in statutes or in contracts.[16] The (o) Other than for mandatory activities under the Code, no special
statutory limitations on check-offs are found in Article 241, Chapter II, Title assessments, attorney's fees, negotiation fees or any other extraordinary
fees may be checked off from any amount due to an employee with an
IV, Book Five of the Labor Code, which reads:
individual written authorization duly signed by the employee. The
authorization should specifically state the amount, purpose and beneficiary
of the deductions. [Underscoring; supplied]
"Rights and conditions of membership in a labor organization. - The
following are the rights and conditions of membership in a labor
organization:
Article 241 of the Labor Code, as amended, must be read in relation to
Article 222, paragraph (b) of the same law, which states:
xxx
"No attorney's fees, negotiation fees or similar charges of any kind arising Union's incidental expenses, attorney's fees and representation expenses
from collective bargaining negotiations or conclusion of the collective were met.
agreement shall be imposed on any individual member of the contracting
union: Provided, however, that attorney's fees may be charged against
union funds in an amount to be agreed upon by the parties. Any contract, It can be gleaned that on July 14, 1989, the ABS-CBN Supervisors Employee
agreement or arrangement of any sort to the contrary shall be null and Union held its general meeting, whereat it was agreed that a ten percent
void." [Underscoring; supplied] (10%) special assessment from the total economic package due to every
member would be checked-off to cover expenses for negotiation, other
miscellaneous expenses and attorney's fees. The minutes of the said
And this court elucidated the object and import of the said provision of law meeting were recorded by the Union's Secretary, Ma. Carminda M. Munoz,
in Bank of Philippine Islands Employees Union - Association Labor Union and noted by its President, Herbert Rivera.[18]
(BPIEU-ALU) vs. National Labor Relations Commission:[17]
On May 24, 1991, said Union held its General Membership Meeting,
"The Court reads the afore-cited provision (Article 222 [b] of the Labor wherein majority of the members agreed that "in as much as the Union had
Code) as prohibiting the payment of attorney's fees only when it is effected already paid Atty. P. Pascual the amount of P500,000.00, the same must be
through forced contributions from the workers from their own funds as shared by all the members until this is fully liquidated."[19]
distinguished from the union funds. xxx"
In this case, the majority of the Union members gave their individual written
check-off authorizations for the ten percent (10%) special assessment. And
they have never withdraw their individual written authorizations for check-
off.
There is thus cogent reason to uphold the assailed Order, it appearing from
the records of the case that twenty (20)[25] of the forty-two (42) petitioners
executed as Compromise Agreement[26] ratifying the controversial check-
off provision in the CBA.