405 Finals Case Digests PDF

LABOR RELATIONS LAW 1
Finals Case Digests Compilation
TABLE OF CONTENTS
JURISDICTION OF THE LABOR ARBITER
1. Tolosa vs. NLRC, G.R. No. 149578, April 10, 2003

2. Austria vs. NLRC, 312 SCRA 413
3. Eviota vs. Court of Appeals, 407 SCRA 394
4. Dynamic Signmaker Outdoor Advertising Services vs. Potongan, G.R. No. 156589, June 27, 2005
5. Metromedia Times Corp., vs. Pastorin, G.R. No. 154295, July 29, 2005
6. Yusen Air & Sea Service Phils vs. Villamor, G.R. No. 154942, August 16, 2005
7. Duty Free Phils., vs. Mojica, G.R. No. 166365, September 30, 2005
8. Easycall Communication Phils., vs. King, G.R. No. 145901, December 15, 2005
9. San Miguel Foods Inc., vs. San Miguel Corp Employees Union-PTGWO, G.R. No. 168569, October 5, 2007
10. Leyte IV Electric Cooperative Inc vs. LEYECO IV Employees Union-ALU, G.R. No. 1577745, October 19,2007
11. Atty Garcia vs. Eastern Telecommunications Phils., et al., GR No. 173115 & 173163-64, April 16, 2009
12. Halaguena et al., vs. Phil Airlines GR No. 172013, Oct 2, 2009
13. Okol vs. Slimmer‘s World International, et al., G.R. No. 160146, December 11, 2009
14. Hugo et al., vs. Light Rail Transit Authority, G.R. No. 181866, March 18, 2010
15. Matling Industrial and Commercial Corp et al., vs. Coros, GR No. 157802, Oct. 13, 2010
16. Manila Electric Co. et al., vs. Lim, GR No. 184769, Oct. 5, 2010
17. Hongkong and Shanghai Banking Corp., vs. Sps. Broqueza, GR No. 178610, Nov. 17, 2010
18. Real vs. Sangu Phils., Inc., et al., G.R. No. 168757, January 19, 2011
19. Portillo vs. Rudolf Lietz, Inc. et al., G.R. No. 196539, October 10, 2012
20. Ace Navigation Co. Inc. et al., vs. Fernandez, G.R. No. 197309, October 10, 2012
21. Cosare vs. Broadcom Asia, Inc. GR No. 201298, February 5, 2014, citing 2010 Matling
Industrial and Commercial Corp et al., vs. Coros, GR No. 157802 and 2011 Real vs. Sangu
Phils., Inc., et al., G.R. No. 168757
22. Amecos Innovators Inc. vs. Lopez, GR no. 178055, July 2, 2014
23. Indophil Textile Mills Inc. vs. Engr. Adviento, GR No. 171212, August 4, 2014
24. Honda Car Phils vs. Honda cars Technical Specialist & Supervisors Union GR No. 204142, Nov. 19 2014
25. Montero vs. Times Transportation GR No. 1980828, March 16, 2015
2011 NLRC RULES OF PROCEDURE
1. Islriz Trading/Lu vs. Capada et al., G.R. No. 168501, January 31, 2011
2. Panlilio et al., vs. RTC Br. 51, City of Manila, G.R. No. 173846, Feb. 2, 2011
3. Ando vs. Campo, G.R. No. 184007, Feb. 16, 2011
4. Pfizer Inc., et al., vs. Velasco, G.R. No. 177467, March 9, 2011
5. Social Security Commission vs. Rizal Poulty et al., G.R. No. 167050, June 1, 201111
6. BPI Employees Union-Metro manila vs. Bank of the Phil Islands, G.R. No. 178699, September 21, 2011
7. DUP Sound Phils vs. Court of Appeals, G.R. No. 168317, November 21, 2011
8. Sarona vs. NLRC G.R. No. 185280, January 18, 2012
9. Salenga et al., vs. Court of Appeals, G.R. No. 174941, February 1, 2012
10. Lockheed Detective & Watchman Agency, G.R. No. 185918, April 18, 2012
11. 3rd Alert Security & Detective Services Inc. vs. Navia, G.r. No. 200653, June 13, 2012
12. Radio Philippines Network Inc et al., vs. Yap et al., G.R. No. 187713, August 1, 2012
13. Gonzales vs. Solid Cement Corp., G.R. No. 198423, October 23, 2012
14. Martos et al., vs. New San Jose Builders, G.R. No. 192650, October 24, 2012
15. Nacar vs. Gallery Frames, GR No. 189871, August 13, 2013, En Banc
16. McBurnie vs. Ganzon et al., GR Nol. 178034 & 178117 & 186984-85, Oct. 17, 2013, En banc
17. Loon et al., vs. Power Master Inc. et al., GR No. 189404, December 11, 2013
18. Lepanto Consolidated Mining Corp., vs. Icao, GR No. 196047, January 15, 2014
19. Co Say Coco Products Phils Inc., vs. Baltasar, et al., GR No. 188828, March 5, 2014
20. Olores vs. Manila Doctors College et al., GR No. 201663, March 31, 2014
21. Bergonio et al., vs. South east Asian Airlines, GR No. 195227,.April 21, 2014
22. Arabit et al., vs. Jardine Pacific Finance Inc. GR No. 181719, April 21, 2014
23. Mirant (Phils) Corp., vs. Caro, GR No. 181490, April 23, 2014
24. Castro Jr. vs. Ateneo de Naga University et al., GR No. 175293, July 23, 2014
25. Phil. Touristers Inc et al., vs. Mas Transit Workers Union-ANGLO-KMU GR No. 201237, Sept. 3, 2014
26. Azuelo vs. Zameco II Electric Cooperative, Inc. GR No. 192573, October 22, 2014
27. University of Pangasinan vs. Fernandez, GR No. 211228, Nov. 12, 2014
28. Metroguards Secuirty Agency vs. Hilongo, GR No. 215630, March 9, 2015
29. Seacrest Maritime management vs. Picar, GR No. 209383, March 11, 2015
30. Waterfront Cebu City Casino Hotel vs. Ledesma, GR No. 197556, March 25, 2015
31. Manila Mining Corp vs. Amor, GR No. 182800, April 20, 2015
RIGHT TO SELF-ORGANIZATION
1. San Miguel Corp., vs. Mandaue Packing Products, G.R. No. 152356, August 16, 2005
2. GSIS vs. Kapisanan ng mga Manggagawa sa GSIS, G.R. No. 170132, December 6, 2006
3. San Miguel Corp. Employees Union-PTGWO vs. San Miguel Packaging Products Employees Union, G.R. No.
171153, Sept. 12, 2007
4. Dong Seung Inc., vs. Bureau of Labor Relations, G.R. No. 162356, April 14, 2008
5. Del Pilar Academy et al., vs. Del Pilar Academy Employees Union, G.R. No. 170112, April 30, 2008
6. S.S. Ventures International Inc., vs. SS Ventures Labor Union, G.R. No. 161690, July 23, 2008
7. Inguillo et al, vs. First Phil Scales Inc., et al., GR No. 165407, June 5, 2009
8. Sta Lucia East Commercial Corp., vs. SOLE et al., GR No. 162355, August 14, 2009
9. Mariwasa Siam Ceramics Inc. vs. Secretary of DOLE, et al., G.R. No. 183317, December 21, 2009
10. General Milling Corp vs. Casio et al., GR No. 149552, March 10, 2010
11. The Heritage Hotel Manila vs. Natl Union of Workers in Hotel etc., GR No. 178296, January 12, 2011
12. Legend International Resorts Ltd., vs. Kilusang Manggagawa ng Legenda, G.R. No. 169754, Feb. 23, 2011
13. Samahang Manggagawa sa Charter Chemical Solidarity of Unions in the Phils for Empowerment and
Reforms (SMCC-SUPER) et al., vs. Charter Chemical and Coating Corp., G.R. No. 169717, March 16,
2011
14. San Miguel Foods vs. san Miguel Corp Supervisors and exempt Union G.R. No. 146206 August 1, 2011
15. BPI vs. BPI Employees Union-Davao Chapter, GR No. 164301, October 19, 2011 Resolution on the main
decision of Aug. 18, 2010
16. Octavio vs. Phil Long Distance Telephone Company, G.R. No. 175492, Feb. 27, 2013
17. National Union of bank Employees vs. Philnabank Employees Association G.R. No. 174287, Aug. 12, 2013
18. Takata Phils Corp. vs. Bureau of Labor Relations, et al., GR No. 196276, June 4, 2014
RIGHTS OF LEGITIMATE LABOR ORGANIZATION
1. Rivera vs. Espiritu, G.R. No. 135547, January 23, 2002

2. Manila Diamond Hotel Employees Union vs. Court of Appeals, G.R. No. 140518, December 16, 2004
3. University of Immaculate Concepcion vs. Sec. Of Labor, G.R. No. 151379, January 14, 2005
4. Capitol Medical Center vs. NLRC, G.R. No. 147080, April 26, 2005
5. Light Railway Transit vs. Venus, Jr., G.R. No. 163782, March 24, 2006
6. Sukhotai Cuisine & Restaurant vs. Court of Appeals, G.R. No. 150437, July 17, 2006
7. Philcom Employees Union vs. Phil. Global Communication, G.R. No. 144315, July 17, 2006
8. GSIS vs. Kapisanan ng mga Manggagawa sa GSIS, G.R. No. 170132, December 6, 2006
9. Biflex Phils., Inc., Labor Union vs. Filflex Industrial & Mfg., Corp., G.R. No. 155679, December 19, 2006
10. Manila Hotel Employees Association vs. Manila Hotel Corp., G.R. No. 154591, March 5, 2007, citing Grand
Boulevard Hotel vs. Dacanay, G.R. No. 153665, July 18, 2003
12. Phil. Airlines Inc. vs. Phil Airlines Employees Association, G.R. No. 142399, March 12, 2008
13. Standard Chartered Bank Employees Union vs. Standard Chartered Bank et al., G.R. No. 161933, April 22,
2008
14. Samahan ng Mga Manggagawa sa Samma-Lakas sa Industriya ng Kapatirang Haligi ing Alyansa (Samma-
Likha) vs. Samma Corp., G.R. No. 167141, Mar. 13, 2009
15. Hotel Enterprises of the Phils., (Hyatt Regency) vs Samahan ng mga Manggagawa sa Hyatt-(NUWHRAIN),
GR No. 165756, June 5, 2009
16. Miranda vs. Asian Terminals Inc., et al., GR No. 174316, June 23, 2009
17. National Union of Workers in Hotels Restaurants and Allied Industries-Manila Pavilion Hotel Chapter vs.
SOLE, et al., GR No. 181531, July 31, 2009
18. A. Soriano Aviation vs. Employees Association of A. Soriano Aviation et al., GR No. 166879, Aug. 14, 2009
19. YSS Employees Union-Phil Transport and General Workers Organization vs. YSS Laboratories, Inc., G.R.
No. 155125, December 4, 2009
20. GSIS et al., vs. Villaviza et al., GR No. 180291, July 27, 2010
21. Picop Resources Inc. vs. Taneca et al., GR No. 160828, Aug. 9, 2010
22. Insular Hotel Employees Union-NFL vs. Waterfront Insular Hotel-Davao, GR No. 174040-41, Sept. 22, 2010
23. Cirtex Employees Labor Union-FFW vs. Cirtex Electronics Inc. GR No. 190515, Nov. 15, 2010
24. Solidbank Corp. vs. Gamier et al, GR Nos. 159461, Nov. 15, 2010
25. Fadriquelan et al., vs. Monterey Food Corp, G.R. No. 178409, June 8, 2011
26. Barairo vs. Office of the President, G.R. No. 189314, June 15, 2011
27. Magdala Multipurpose & Livelihood Cooperative vs. Kilusang Manggagawa ng LGS et al., G.R. No. 191138-
39, October 19, 2011
28. Bank of the Phils islands vs. BPI Employees Union-Davao Chapter Federation of Unions in BPI
Unibank, GR No. 164301, En banc, Res. October 19, 2011; see Main Decision of August 18,
2010
29. Abaria et al., vs. NLRC et al., G.R. Nos. 154113, 187778, 187861 & 196156, December 7, 2011
30. PICOP Resources Inc. vs. Dequilla et al., G.R. no. 172666, December 7, 2011
31. C. Alcantara & Sons, Inc. G.R. No. 155109, March 14, 2012 Resolution on the main decision of
September 29, 2010
32. Digital Telecommunications Phils Inc. vs. Digitel Employees Union et al., G.R. No. 184903-04, October 10,
2012
33. Automotive Engine Rebuilders vs. Progresibong Unyon ng mga Manggagawa sa AER G.R. No.
160138, January 16, 2013 & July 13, 2011 Main Decision
34. Holy Child Catholic School vs. Hon. Sto Tomas et al., G.R. No. 179146, July 23, 2013
35. Visayas Community Medical Center vs. Yballe, et al., GR No. 196156, January 15, 2014
36. Philtranco Service Enterprises Inc. vs. Philtranco Workers Union-Association of Genuine Labor
Organizations, GR No. 180962, February 26, 2014
37. Wesleyan University-Phils., vs. Wesleyan University-Phils., Faculty & Staff Asso., GR No. 181806, March 12,
2014
38. Tabangao Shell Refinery Employees Association vs. Pilipinas Shell Petroleum Corp., GR No. 170007, April 7,
2014
UNFAIR LABOR PRACTICE
1. General Milling Corp. vs. Court of Appeals, G.R. No. 146728, February 11, 2004
2. Standard Chartered Bank Employees Union vs. Confesor, G.R. No. 114974, June 16, 2004
3. Phil. Carpet Employees Asso. Vs. Sto. Tomas, G.R. No. 168719, February 22, 2006
4. St. John Colleges Inc., vs. St. John Academy Faculty Employees Union, G.R. Bo. 167892, October 27, 2006
6. Purefoods Corp vs. Nagkakaisang Samahang Manggagawa ng Purefoods Rank and File, G.R. No. 150896,
August 28, 2008
7. General Santos Coca-Cola Plant Free Workers Union-TUPAS vs. CCBPI (Gen. Santos City) et al., G.R. No.
178647, Feb. 13, 2009
8. De La Salle University et al., vs. De La Salle University Employees Association, GR No. 177283, April 7,
2009
9. Tunay na Pagkakaisa ng Manggagawa sa Asia Brewery vs. Asia Brewery Inc. GR No. 162025, Aug. 3, 2010
10. Manila Mining Corp. Employees Association-FFW vs. Manila Mining Corp. GR No. 178222-23, Sept. 29, 2010
11. Prince Transport et al., vs. Garcia et al. G.R. No. 167291, January 12, 2011
12. Park Hotel et al., vs. Soriano et al., G.R. No. 17118, September 10, 2012
13. Goya Inc. vs. Goya Inc. Employees Union-FFW, G.R. No. 170054, January 21, 2013
14. Baptista et al., vs. Villanueva et al., G,.R. No. 194709, July 31, 2013
15. TH Shopfitters Corp., et al., vs. T&H Shopfitters Corp., Union, GR No. 191714, Feb 26, 2014
REVISED GUIDELINES OF THE NCMB FOR THE CONDUCT OF VOLUNTARY ARBITRATION

PROCEEDINGS
1. Sanyo Philippine Workers Union-PSSLU vs. Canizares, 211 SCRA 361 [1992]
2. Navarro III vs. Damasco, 246 SCRA 260 [1995]
3. San Miguel Corp., vs. NLRC, 255 SCRA 140 [1996]
4. Pantranco North Express Inc., vs. NLRC, 259 SCRA 161 [1996]
5. Silva et al., vs. NLRC, 274 SCRA 159 [1997]
6. Union of Nestle Workers Cagayan De Oro Factory vs. Nestle Phils., Inc. G.R. No. 148303, October 17, 2002
7. Tabigue, et al. vs. International Copra Export Corp., G.R. No. 183335, December 23, 2009
8. St. Louis University vs. Cobarrubias, GR No. 187104, Aug. 3, 2010
9. Teng vs. Pahagac, et al., G.R. No. 169704, November 17, 2010
10. Caong, Jr. vs. Begualos, GR No. 179428, Jan. 26, 2011
11. Estate of Dulay vs. Aboitiz Jebsen Maritime Inc. et al., G.R. No. 172642, June 13, 2012
12. Lepanto Consolidated Mining Company vs. The Lepanto Capataz Union G.R. No. 157086, February 18,
2013
13. 7K Corp. vs. Albarico, G.R. No. 182295, June 26, 2013
14. Phil Electric Corp., vs. Court of Appeals, GR No. 168612, Dec. 10, 2014
JURISDICTION OF THE LABOR ARBITER
TOLOSA VS. NLRC

G.R No. 149578. April 10, 2003
Facts:
Evelyn Tolosa was the widow of Captain Virgilio Tolosa who was hired by Qwana-Kaiun, through its
manning agent, Asia Bulk Transport Phils. Inc., to be the master of the Vessel named M/V Lady Dona. The contract
officially began when he assumed command of the vessel in Yokohama, Japan. The vessel departed for Long Beach
California, passing by Hawaii in the middle of the voyage. At the time of embarkation, he was allegedly shown to
be in good health. During ‗channeling activities‘ upon the vessel‘s departure from Yokohama Capt. Tolosa was
drenched with rainwater. The following day, he had slight fever and in the succeeding twelve days, his health
rapidly deteriorated resulting in his death on November 18, 1992. Because of his death, his wife filed a
Complaint/Position Paper against Qwana-Kaiun, thru its resident-Agent, Mr. Fumio Nakagawa, Asia Bulk, Pedro
Garate and Mario Asis, as respondents.
Petitioner argues that her cause of action is based on the failure of private respondents, as employers
ofher husband, to provide him timely, adequate and competent medical services under Art. 161 of the Labor Code.
Likewise, she contends that Article 217 (a) (4) of the Labor Code vests labor arbiters and the NLRC with jurisdiction
to award all kinds of damages in cases arising from employer-employee relations. She also insisted that the
―reasonable causal connection‖ rule should be applied in her favor.
Issues:
1. Whether or not the labor arbiter and the NLRC had jurisdiction over petitioner‘s action.
2. Whether or not claim can be anchored on Art. 161 of the Labor Code.
Held:
(1) The NLRC and the LA had no jurisdiction over petitioner‘s claim for damages. Time and time again, we
have held that the allegations in the complaint determine the nature of the action and, consequently, the
jurisdiction of the courts. After carefully examining petitioner‘s complaint/position paper, we are convinced that the
allegations therein are in the nature of an action based on a quasi delict or tort. It is evident that she sued Pedro
Garate and Mario Asis for gross negligence. Petitioner‘s complaint/position paper refers to and extensively
discusses the negligent acts of shipmates Garate and Asis, who had no employer-employee relation with Captain
Tolosa. The LA himself classified petitioner‘s case as ―a complaint for damages, blacklisting and watchlisting for
gross negligence resulting in the death of complainant‘s husband, Capt. Virgilio Tolosa.‖
The case does not involve the adjudication of a labor dispute, but the recovery of damages based on a
quasi delict. The jurisdiction of labor tribunals is limited to disputes arising from employer-employee relations, as
we ruled in Georg Grotjahn GMBH & Co. v. Isnani: ―Not every dispute between an employer and employee involves
matters that only LAs and the NLRC can resolve in the exercise of their adjudicatory or quasi-judicial powers. The
jurisdiction of LAs and the NLRC under Article 217 of the Labor Code is limited to disputes arising from an
employer-employee relationship which can only be resolved by reference to the Labor Code, other labor statutes,
or their collective bargaining agreement.‖
The pivotal question is whether the Labor Code has any relevance to the relief sought by petitioner. From
her paper, it is evident that the primary reliefs she seeks are as follows: (a) loss of earning capacity denominated
therein as ―actual damages‖ or ―lost income‖ and (b) blacklisting. The loss she claims does not refer to the actual
earnings of the deceased, but to his earning capacity based on a life expectancy of 65 years. This amount is
recoverable if the action is based on a quasi delict as provided for in Article 2206 of the Civil Code, but not in the
Labor Code. While it is true that labor arbiters and the NLRC have jurisdiction to award not only reliefs provided by
labor laws, but also damages governed by the Civil Code, these reliefs must still be based on an action that has a
reasonable causal connection with the Labor Code, other labor statutes, or collective bargaining agreements. The
central issue is determined essentially from the relief sought in the complaint. Where such principal relief is to be
granted under labor legislation or a CBA, the case should fall within the jurisdiction of the Labor Arbiter and the
NLRC, even though a claim for damages might be asserted as an incident to such claim. It must be noted that a
worker‘s loss of earning capacity and blacklisting are not to be equated with wages, overtime compensation or
separation pay, and other labor benefits that are generally cognized in labor disputes.
The loss of earning capacity is a relief or claim resulting from a quasi delict or a similar cause within the
realm of civil law. ―Claims for damages under paragraph 4 of Article 217 must have a reasonable causal connection
with any of the claims provided for in the article in order to be cognizable by the labor arbiter. Only if there is such
a connection with the other claims can the claim for damages be considered as arising from employer-employee
relations.‖ In the present case, petitioner‘s claim for damages is not related to any other claim under Article 217,
other labor statutes, or collective bargaining agreements. (2) Petitioner cannot anchor her claim for damages to
Article 161 of the Labor Code, which does not grant or specify a claim or relief. This provision is only a safety and
health standard the enforcement of which rests with the labor secretary. Thus, claims for an employer‘s violation
thereof are beyond the jurisdiction of the labor arbiter. In other words, petitioner cannot enforce the labor
standard provided for in Article 161 by suing for damages before the labor arbiter. It is not the NLRC but the
regular courts that have jurisdiction over actions for damages, in which the employer-employee relation is merely
incidental, and in which the cause of action proceeds from a different source of obligation such as a tort. Since
petitioner‘s claim for damages is predicated on a quasi delict or tort that has no reasonable causal connection with
any of the claims provided for in Article 217, other labor statutes, or collective bargaining agreements, jurisdiction
over the action lies with the regular courts -- not with the NLRC or the labor arbiters.
NOTES: *Conditions for the application of ―reasonable causal connection‖ rule (Claims for damages under
paragraph 4 of Article 217 must have a reasonable causal connection with any of the claims provided for in the
article in order to be cognizable by the labor arbiter.) 1) the dispute arose from an employeremployee relation 2)
the dispute can be resolved by reference to the Labor Code *A worker‘s loss of earning capacity and blacklisting
are not to be equated with wages, overtime compensation or separation pay, and other labor benefits that are
generally cognized in labor disputes. The loss of earning capacity is a relief or claim resulting from a quasi delict or
a similar cause within the realm of civil law.
DOCTRINE: As a rule, labor arbiters and the National Labor Relations Commission have no power or authority to
grant reliefs from claims that do not arise from employer-employee relations. They have no jurisdiction over torts
that have no reasonable causal connection to any of the claims provided for in the Labor Code, other labor
statutes, or collective bargaining agreements.
AUSTRIA VS. NLRC

G.R. No. 124382
Facts:
Private Respondent Central Philippine Union Mission Corporation of the Seventh-Day Adventists (SDA) is
a religious corporation duly organized and existing under Philippine law. Austria was a Pastor of the SDA until 1991,
when his services were terminated. Austria worked with the SDA for 28 years from 1963 to 1991. He began his
work with the SDA as a literature evangelist, selling literature of the SDA over the island of Negros. From then on,
he worked his way up the ladder and got promoted several times. He was elevated to the position of Pastor and
the finally as a District Pastor in Negros with 12 churches under his jurisdiction. On various occasions, Austria
received several communications the treasurer of the Negros Mission asking him to admit accountability and
responsibility for the church tithes and offerings. After several meetings were held and an investigation was made
on the matter, Austria received a letter of dismissal citing misappropriation of denominational funds, willful breach
of trust, serious misconduct, ross and habitual neglect of duties, and commission of an offense against the person
of employer's duly authorized representative, as grounds for the termination of his services. Reacting against the
adverse decision of the SDA, Austria filed a before the Labor Arbiter for illegal dismissal against the SDA and its
officers and prayed for reinstatement with backwages and benefits, moral and exemplary damages and other labor
law benefits. The SDA contended that by virtue of the doctrine of separation of church and state, the Labor Arbiter
and the NLRC have no jurisdiction to entertain the complaint filed by Austria. Since the matter at bar allegedly
involves the discipline of a religious minister, it is to be considered purely ecclesiastical affair to which the State has
no right to interfere.
Issue:
Whether or noy the Labor Arbiter and the NLRC have jurisdiction to try and decide the complaint filed by
Austria against the SDA.
Held:
Yes, they have jurisdiction. The principle of separation of church and state finds no application here. The
case at bar does not concern an ecclesiastical or purely religious affair as to bar the State from taking
cognizance of the same. An ecclesiastical affair involves the relationship between the church and its
members and relate to matters of faith, religious doctrines, worship and governance of the congregation.
To be concrete, examples of this so-called ecclesiastical affairs to which the State cannot meddle are
proceedings for excommunication, ordinations of religious ministers, administration of sacraments and other
activities with attached religious significance.
While the matter at hand relates to the church and its religious minister it does not ipso facto give the case
a religious significance. What is involved here is the relationship of the church as an employer and the minister as
an employee. The matter of terminating an employee, which is purely secular in nature, is different from the
ecclesiastical act of expelling a member from the religious congregation. As such, the State, through the Labor
Arbiter and the NLRC, has the right to take cognizance of the case and to determine whether the SDA, as
employer, rightfully exercised its management prerogative to dismiss an employee. This is in consonance with the
mandate of the Constitution to afford full protection to labor. Under the Labor Code, the provision which governs
the dismissal of employees, is comprehensive enough to include religious corporations, such as the SDA, in its
coverage. Article 278 of the Labor Code on postemployment states that "the provisions of this Title shall apply to
all establishments or undertakings, whether for profit or not." Obviously, the cited article does not make any
exception in favor of a religious corporation. This is made more evident by the fact that the Rules Implementing
the Labor Code, particularly, Section 1, Rule 1, Book VI on the Termination of Employment and Retirement,
categorically includes religious institutions in the coverage of the law, to wit:
Sec. 1. Coverage. — This Rule shall apply to all establishments and undertakings, whether
operated for profit or not, including educational, medical, charitable and religious institutions and
organizations, in cases of regular employment with the exception of the Government and its political
subdivisions including government-owned or controlled corporations.
EVIOTA VS. COURT OF APPEALS

407 SCRA 394
Facts:
Sometime on January 26, 1998, the respondent Standard Chartered Bank and petitioner Eduardo G.
Eviota executed a contract of employment under which the petitioner was employed by the respondent
bank as Compensation and Benefits Manager, VP (M21). Petitioner came up with many proposals which
the bank approved and made preparations of. He was also given privileges like car, renovation of the office, and
even a trip to Singapore at the company‘s expense. However, the petitioner abruptly resigned from the respondent
bank barely a month after his employment and rejoined his former employer. On June 19, 1998, the respondent
bank filed a complaint against the petitioner with the RTC of Makati City for damages brought about his abrupt
resignation. Though petitioner reimbursed part of the amount demanded by Standard, he was not able topay it full.
Standard alleged that assuming arguendo that had the right to terminate his employment with the Bank for no
reason, the manner in and circumstances under Eviota which he exercised the same are clearly abusive and
contrary to the rules governing human relations, governed by the Civil Code. Further, Standard alleged that
petitioner also violated the Labor Code when he terminated his employment without one (1) notice in advance.
This stipulation was also provided in the employment contract of Eviota with Standard, which would also constitute
breach of contract. The petitioner filed a motion to dismiss the complaint on the ground that the action for
damages of the respondent bank was within the exclusive jurisdiction of the Labor Arbiter under paragraph 4,
Article 217 of the Labor Code of the Philippines, as amended. The petitioner averred that the respondent bank‘s
claim for damages arose out of or were in connection with his employer-employee relationship with the respondent
bank or some aspect or incident of such relationship. The respondent bank opposed the motion, claiming that its
action for damages was within the exclusive jurisdiction of the trial court. Although its claims for damages
incidentally involved an employer-employee relationship, the said claims are actually predicated on the petitioner‘s
acts and omissions which are separately, specifically and distinctly governed by the New Civil Code.
Issue:
Whether or not the RTC had jurisdiction over the case.
Held:
The SC held that the RTC has jurisdiction. Case law has it that the nature of an action and the subject
matter thereof, as well as which court has jurisdiction over the same, are determined by the material
allegations of the complaint and the reliefs prayed for in relation to the law involved. Not every
controversy or money claim by an employee against the employer or vice-versa is within the exclusive jurisdiction
of the labor arbiter. A money claim by a worker against the employer or vice-versa is within the exclusive
jurisdiction of the labor arbiter only if there is a reasonable causal connection between the claim asserted and
employee-employer relation. Absent such a link, the complaint will be cognizable by the regular courts of justice.
Actions between employees and employer where the employer-employee relationship is merely incidental and the
cause of action precedes from a different source of obligation is within the exclusive jurisdiction of the regular
court. The jurisdiction of the Labor Arbiter under Article 217of the Labor Code, as amended, is limited to disputes
arising from an employer-employee relationship which can only be resolved by reference to the Labor Code of the
Philippines, other labor laws or their collective bargaining agreements. Jurisprudence has evolved the rule that
claims for damages under paragraph 4 of Article 217, to be cognizable by the Labor Arbiter, must have a
reasonable causal connection with any of the claims provided for in that article. Only if there is such a connection
with the other claims can the claim for damages be considered as arising from employer-employee relations. In this
case, the private respondent‘s first cause of action for damages is anchored on the petitioner‘s employment of
deceit and of making the private respondent believe that he would fulfil his obligation under the employment
contract with assiduousness and earnestness. The petitioner volte face when, without the requisite thirty-day
notice under the contract and the Labor Code of the Philippines, as amended, he abandoned his office and rejoined
his former employer; thus, forcing the private respondent to hire a replacement. The private respondent was left in
a lurch, and its corporate plans and program in jeopardy and disarray. Moreover, the petitioner took off with the
private respondent‘s computer diskette, papers and documents containing confidential information on employee
compensation and other bank matters. On its second cause of action, the petitioner simply walked away from his
employment with the private respondent sans any written notice, to the prejudice of the private respondent, its
banking operations and the conduct of its business. Anent its third cause of action, the petitioner made false and
derogatory statements that the private respondent reneged on its obligations under their contract of employment;
thus, depicting the private respondent as unworthy of trust. The primary relief sought is for liquidated damages for
breach of a contractual obligation. The other items demanded are not labor benefits demanded by workers
generally taken cognizance of in labor disputes, such as payment of wages, overtime compensation or separation
pay. The items claimed are the natural consequences flowing from breach of an obligation, intrinsically a civil
dispute. It is evident that the causes of action of the private respondent against the petitioner do not involve the
provisions of the Labor Code of the Philippines and other labor laws but the New Civil Code. Thus, the said causes
of action are intrinsically civil. There is no causal relationship between the causes of action of the private
respondent‘s causes of action against the petitioner and their employer-employee relationship. The fact that the
private respondent was the erstwhile employer of the petitioner under an existing employment contract
before the latter abandoned his employment is merely incidental. Petition is denied.
DYNAMIC SIGNMAKER OUTDOOR ADVERTISING SERVICES, INC., FILOMENO P.

HERNANDEZ, ROMMEL A. HERNANDEZ, SEGUNDA A. HERNANDEZ, AND CINDERELLA
A. HERNANDEZ-RAÑESES vs.FRANCISCO POTONGAN
Facts:
In 1987, respondent started working for petitioner corporation as a Production Supervisor at a monthly
salary of P16,000.00. In early February 1996, the union of rank and file employees of petitioner corporation, the
Bigkis Manggagawa sa Dynamic Signmakers Outdoor Advertising Services declared a strike on account of which
petitioner corporation replaced all its supervisors and designated, by letter memorandum certain persons
to take over the operations of the corporation. By February 21, 1996, respondent‘s salary was withheld and was
advised to take a leave of absence until further notice. Respondent later received on a letter from petitioner,
―inviting‖ him to answer the following charges:
1.) That on February 21, 1996, at around 9:00 A.M. you entered the company fabrication shop where you
were assigned as supervisor and caused to create fire by secretly switching ‗on‘ the idle plastic oven
and grounded the 2 electric machine welders while the ‗strike‘ was on-going outside the premises.
2.) That you allegedly on several occasions, urged strongly the same group of contractors led by Mr. Luis
Mimay, working on some left over jobs at the factory, to slow down work or not to work at all in
sympathy to the ‗strikers‘ who are in the ranking files. Those proved also that as our trusted staff and
supervisor you have caused disruption of work of the contractors.
Respondent through counsel denied the charges proffered against him, he insisting that they were
fabricated to justify his termination due to suspicions that he was a strike-sympathizer. Respondent later filed a
complaint against herein petitioners for illegal dismissal, reinstatement, backwages and damages with the RAB of
NLRC. He complained that although he was not sent a formal notice of termination, he was effectively dismissed
from employment for after he was asked to take a leave of absence and he was not instructed nor allowed to
return to work, nor paid his salaries. By Resolution, the Labor Arbiter dismissed the complaint on the ground that
respondent‘s cause of action was barred by prior judgment that was rendered by Labor Arbiter Nieves V. De Castro
in the consolidated cases NLRC Case Nos. RAB-IV-2-7865-96-R and RAB-IV-2-7908-96-R which found
respondent among those guilty of committing prohibited acts and whose employment was consequently
declared lost. Respondent appealed the dismissal of his complaint to the NLRC before which he argued that the
Labor Arbiter did not acquire jurisdiction over his person in the above-said consolidated cases since
service of summons to the therein respondents President of KMM-Katipunan and the President of the local
union in either of which he is not a member cannot be considered proper service to him. Respondent thus
concluded that a void judgment such as one rendered without jurisdiction over the person of the party
maybe assailed at any time, either directly or collaterally. By decision of May 21, 1998, the 2nd Division of the
NLRC through Presiding Commissioner Raul T. Aquino set aside the Labor Arbiter‘s June 30, 1997 Resolution of
dismissal on the ground that jurisdiction over the person of respondent in the consolidated cases was not acquired,
hence, the judgment in the said cases with respect to him is null and void, and consequently, the application of the
principle ofres judicata – basis of the dismissal of his complaint was inappropriate.
On appeal, the NLRC affirmed the decision of the Labor Arbiter, holding that petitioner, in the
exercise of its business judgment, was granted leeway insofar as it concerned the movement, transfer or
reassignment of its personnel. Respondent‘s motion for reconsideration of the decision having been denied by the
NLRC by Resolution, he filed a petition for certiorari with the appellate court. By Decision, the appellate court
reversed the NLRC decision, it holding that respondent was denied due process and was dismissed without cause
when he was replaced by Rufino Hornilla and instructed to go on leave indefinitely. In reversing the NLRC decision,
the appellate court noted that it was on account of respondent‘s replacement as Operations Manager and the
instruction for him to go on indefinite leave that it took almost a year for him to file the complaint for illegal
dismissal. Hence, the appellate court concluded, he should not be faulted for laches. Nor, said the appellate court,
could respondent be deemed to have abandoned his work on receipt of petitioner‘s counsel‘s return to work March
1, 1999 letter because prior thereto he had considered himself illegally terminated as in fact he had filed on
January 29, 1997 the complaint for illegal dismissal.
Issue:
Whether or not the Respondent was illegally terminated.
Held:
Respondent‘s employment was terminated as early as February 21, 1996 when he was instructed
to go on indefinite leave and his salary was since then withheld, not for any of the just or authorized
causes under the Labor Code, but on account of the filing against him by petitioner corporation of a labor
case. This Court finds it difficult, to attribute good faith on the part of petitioners. Respondent was
instructed to go on indefinite leave. He was asked to return to work only after more than three years
from the time he was instructed to go on indefinite leave during which period his salaries were withheld,
and only after the NLRC promulgated its decision of May 21, 1998 reversing the labor arbiter‘s dismissal of
his complaint. This Court upholds then the appellate court‘s finding that respondent was constructively
dismissed. Petitioner was neither transferred nor reassigned to another office or position contrary to what
public respondent seems to allude. Petitioner was simply replaced and instructed to take a leave indefinitely. ―In
cases of illegal dismissal, the burden is on the employer to prove that there was a valid ground for dismissal.‖ We
failed to extract from the record any evidence to show that there exists valid and just cause to terminate herein
petitioner from employment. In fact during the pendency of the complaint for illegal dismissal by the petitioner
against private respondents, the latter in a letter dated March 1, 1999, ordered petitioner to report back to work
immediately. This in itself proves that herein private respondents believe that there exist no valid and just grounds
to terminate herein petitioners from his employment. Clutching at straws, petitioners fault the appellate court for
failure to recognize the final and executory nature of the June 24, 1996 NLRC Decision rendered in the
consolidated cases and for affirming the nullification of said decision, with respect to respondent, which could be
attacked only by direct action. The validity of a judgment or order of a court or quasi-judicial tribunal which has
become final and executory may be attacked when the records show that it lacked jurisdiction to render the
judgment. For a judgment rendered against one in a case where jurisdiction over his person was not acquired is
void, and a void judgment maybe assailed or impugned at any time either directly or collaterally by means of a
petition filed in the same or separate case, or by resisting such judgment in any action or proceeding wherein it is
invoked. Petitioners in fact do not even dispute respondent‘s claim that no summons was ever issued and served
on him either personally or through registered mail as required under Rule III, Sections 3 and 6 of the Rules of
Procedure of the NLRC, as amended by Resolution No. 01-02, Series of 2002:
SEC. 3. Issuance of Summons. Within two (2) days from receipt of a case, the Labor Arbiter shall issue
the required summons, attaching thereto a copy of the complaint/petition and supporting documents, if
any. The summons, together with a copy of the complaint, shall specify the date, time and place of the
conciliation and mediation conference in two (2) settings.
SEC. 6. Service of Notices and Resolutions. a) Notices or summonses and copies of orders, shall be
served on the parties to the case personally by the bailiff or duly authorized public officer within three (3)
days from receipt thereof or by registered mail, provided that in special circumstances, service of
summons may be effected in accordance with the pertinent provisions of the Rules of Court; xxx
Supplementary or applied by analogy to these provisions are the provisions and prevailing
jurisprudence in Civil Procedure. Where there is then no service of summons on or a voluntary general
appearance by the defendant, the court acquires no jurisdiction to pronounce a judgment in the cause
METROMEDIA TIMES CORPORATION AND/OR ROBINA GOKONGWEI PE vs. JOHNNY PASTORIN

G.R. No. 154295, July 29, 2005
Facts:
Johnny Pastorin (Respondent) was employed by Metromedia Times Corporation (Petitioner) on 10
December 1990 as a Field Representative/Collector. His task entailed the periodic collection of receivables from
dealers of petitioner's newspapers. Respondent, because of tardiness was supposedly terminated by the petitioner
company, but because of the timely intervention of the union, the dismissal was not effected.
However, he incurred another infraction when he obtained a loan from a magazine dealer and when he
was not able to pay the loan, he stopped collecting the outstanding dues of the dealer/creditor. After
requiring him to explain, respondent admitted his failure to pay the loan but gave no definitive
explanation for the same. Thereafter, he was penalized with suspension. He was also not allowed to do field work,
and was transferred to a new position. Despite the completion of his suspension, respondent stopped reporting for
work and sent a letter communicating his refusal to accept the transfer. He then filed a complaint for
constructive dismissal, non-payment of backwages and other money claims with the labor arbiter.
The complaint was resolved in favor of respondent. Petitioner lodged an appeal with the NLRC, raising as
a ground the lack of jurisdiction of the labor arbiter over respondent‘s complaint. Significantly, this issue
was not raised by petitioner in the proceedings before the Labor Arbiter. The NLRC reversed the decision of the LA
and ruled that the LA has no jurisdiction over the case, it being a grievance issue properly cognizable by the
voluntary arbitrator. However, the CA reinstated the ruling of the CA. The CA held that the active participation of
the party against whom the action was brought, coupled with his failure to object to the jurisdiction of the court or
quasi-judicial body where the action is pending, is tantamount to an invocation of that jurisdiction and a willingness
to abide by the resolution of the case and will bar said party from later on impugning the court or body‘s
jurisdiction.
Issue:
Whether or not petitioner is estopped from questioning the jurisdiction of the LA during appeal.
Held:
The SC held that petitioner is not estopped from questioning the jurisdiction of the LA during appeal.
The general rule is that the jurisdiction of a court over the subject matter of the action is a matter of law
and may not be conferred by consent or agreement of the parties. The lack of jurisdiction of a court may
be raised at any stage of the proceedings, even on appeal. This doctrine has been qualified by recent
pronouncements which stemmed principally from the ruling in the cited case of Sibonghanoy. It is to be
regretted, however, that the holding in said case had been applied to situations which were obviously not
contemplated therein. The exceptional circumstances involved in Sibonghanoy which justified the departure from
the accepted concept of non-waivability of objection to jurisdiction has been ignored and, instead a blanket
doctrine had been repeatedly upheld that rendered the supposed ruling in Sibonghanoy not as the exception, but
rather the general rule, virtually overthrowing altogether the time honoured principle that the issue of jurisdiction is
not lost by waiver or by estoppel. The operation of the principle of estoppel on the question of jurisdiction
seemingly depends upon whether the lower court actually had jurisdiction or not. If it had no jurisdiction, but the
case was tried and decided upon the theory that it had jurisdiction, the parties are not barred, on appeal, from
assailing such jurisdiction, for the same 'must exist as a matter of law, and may not be conferred by consent of the
parties or by estoppel. However, if the lower court had jurisdiction, and the case was heard and decided
upon a given theory, such, for instance, as that the court had no jurisdiction, the party who induced it to
adopt such theory will not be permitted, on appeal, to assume an inconsistent position—that the lower
court had jurisdiction. Here, the principle of estoppel applies. The rule that jurisdiction is conferred by
law, and does not depend upon the will of the parties, has no bearing thereon. Applying the general rule that
estoppel does not confer jurisdiction, petitioner is not estopped from assailing the jurisdiction of the labor arbiter
before the NLRC on appeal. Decision of the CA is set aside.
YUSEN AIR & SEA SERVICE PHILS. VS. VILLAMOR

G.R. No. 154942, August 16, 2005
Facts:
Petitioner is engaged in the business of freight forwarding. As such, it is contracted by clients to pick-up,
unpack, consolidate, deliver, transport and distribute all kinds of cargoes, acts as cargo or freight accommodation
and enters into charter parties for the carriage of all kinds of cargoes or freight. On August 16, 1993, petitioner
hired respondent as branch manager in its Cebu Office. Later, petitioner reclassified respondent‘s position to that of
Division Manager, which position respondent held until his resignation on February 1, 2002. Immediately after his
resignation, respondent started working for Aspac International, a corporation engaged in the same line of
business as that of petitioner. On February 11, 2002, in the Regional Trial Court at Parañaque City, petitioner filed
against respondent a complaint for injunction and damages with prayer for a temporary restraining order. The
complaint alleged that [respondent] duly signed an undertaking to abide by the policies of the [Petitioner] which
includes the provision on the employees‘ responsibility and obligation in cases of conflict of interest,
which reads:
No employee may engage in any business or undertaking that is directly or indirectly in
competition with that of the company and its affiliates or engage directly or indirectly in any
undertaking or activity prejudicial to the interests of the company or to the performance of
his/her job or work assignments. The same provision will be implemented for a period of two (2)
years from the date of an employee‘s resignation, termination or separation from the company.
That in clear violation and breach of his undertaking and agreement with the policies of [petitioner],
[respondent] joined Aspac International, within two years from [his] date of resignation, whose business
is directly in conflict with that of [petitioner].
Petitioner thus prayed for a judgment enjoining respondent from ―further pursuing his work at Aspac
International‖, and awarding it P2,000,000 as actual damages; P300,000 as exemplary damages; and
another P300,000 as attorney‘s fees. On March 4, 2002, apparently not to be outdone, respondent filed
against petitioner a case for illegal dismissal before the National Labor Relations Commission. Meanwhile, instead
of filing his answer in the civil case, respondent filed a Motion to Dismiss, arguing that the RTC has no jurisdiction
over the subject matter of said case because an employer-employee relationship is involved. On March 20, 2002,
the trial court issued the herein first assailed order dismissing petitioner‘s complaint for lack of jurisdiction over the
subject matter thereof on the ground that the action was for damages arising from employer-employee relations.
Citing Article 217 of the Labor Code, the trial court ruled that it is the labor arbiter which had jurisdiction over
petitioner‘s complaint. In time, petitioner moved for reconsideration but its motion was denied by the trial court in
its subsequent order of June 21, 2002.
Issue:
Whether or not the petitioner‘s cause of action arises from employer-employee relations even if the claim
therein is based on a provision in its handbook.
Held:
No, the petitioner‘s cause of action does not arises from employer-employee relations, because,
petitioner does not ask for any relief under the Labor Code of the Philippines. It seeks to recover
damages agreed upon in the contract as redress for private respondent‘s breach of his contractual
obligation to its ―damage and prejudice‖. Such cause of action is within the realm of Civil Law, and
jurisdiction over the controversy belongs to the regular courts. More so when we consider that the stipulation
refers to the post-employment relations of the parties.
While seemingly the cause of action arose from employer-employee relations, the employer‘s claim for
damages is grounded on wanton failure and refusal without just cause to report to duty coupled with the
averment that the employee maliciously and with bad faith violated the terms and conditions of the
contract to the damage of the employer. Such averments removed the controversy from the coverage of
the Labor Code of the Philippines and brought it within the purview of Civil Law.
Indeed, jurisprudence has evolved the rule that claims for damages under paragraph 4 of Article 217, to
be cognizable by the Labor Arbiter, must have a reasonable causal connection with any of the claims
provided for in that article. Only if there is such a connection with the other claims can a claim for
damages be considered as arising from employer-employee relations.
Article 217, as amended by Section 9 of RA 6715, provides:
Art. 217. Jurisdiction of Labor Arbiters and the Commission. — (a) Except as otherwise provided
under this Code, the Labor Arbiters shall have original and exclusive jurisdiction to hear and
decide, within thirty (30) calendar days after the submission of the case by the parties for
decision without extension, even in the absence of stenographic notes, the following cases
involving all workers, whether agricultural or non-agricultural:
xxx xxx xxx
4. Claims for actual, moral, exemplary and other forms of damages arising from the employeremployee
relations;"
xxx xxx xxx
In San Miguel Corporation vs. National Labor Relations Commission, we had occasion to construe Article
217, as amended by B.P. Blg. 227. Article 217 then provided that the Labor Arbiter had jurisdiction over
all money claims of workers, but the phrase ‗arising from employer-employee relation‘ was deleted. We
ruled thus:
While paragraph 3 above refers to ―all money claims of workers,‖ it is not necessary to suppose that the
entire universe of money claims that might be asserted by workers against their employers has been
absorbed into the original and exclusive jurisdiction of Labor Arbiters. In the first place, paragraph 3
should be read not in isolation from but rather within the context formed by paragraph 1 (relating to
unfair labor practices), paragraph 2 (relating to claims concerning terms and conditions of employment),
paragraph 4 (claims relating to household services, a particular species of employer-employee relations),
and paragraph 5 (relating to certain activities prohibited to employees or employers). It is evident that
there is a unifying element which runs through paragraph 1 to 5 and that is, that they all refer to cases or
disputes arising out of or in connection with an employer-employee relationship. This is, in other words, a
situation where the rule of noscitur a sociis may be usefully invoked in clarifying the scope of paragraph
3, and any other paragraph of Article 217 of the Labor Code, as amended. We reach the above conclusion
from an examination of the terms themselves of Article 217, as last amended by B.P. Blg 227, and even
though earlier versions of Article 217 of the Labor Code expressly brought within the jurisdiction of the
Labor Arbiters and the NLRC ―cases arising from employer-employee relations,‖ which clause was not
expressly carried over, in printer‘s ink, in Article 217 as it exists today. For it cannot be presumed that
money claims of workers which do not arise out of or in connection with their employer-employee relationship, and
which would therefore fall within the general jurisdiction of regular courts of justice, were intended by the
legislative authority to be taken away from the jurisdiction of the courts and lodged with Labor Arbiters on an
exclusive basis. The Court, therefore, believes and so holds that the ―money claims of workers‖ referred to in
paragraph 3 of Article 217 embraces money claims which arise out of or in connection with the employer-employee
relationship, or some aspect or incident of such relationship. Put a little differently, that money claims of workers
which now fall within the original and exclusive jurisdiction of Labor Arbiters are those money claims which have
some reasonable causal connection with the employer-employee relationship.
When, as here, the cause of action is based on a quasi-delict or tort, which has no reasonable causal
connection with any of the claims provided for in Article 217, jurisdiction over the action is with the
regular courts.
It is basic that jurisdiction over the subject matter is determined upon the allegations made in the
complaint, irrespective of whether or not the plaintiff is entitled to recover upon the claim asserted
therein, which is a matter resolved only after and as a result of a trial. Neither can jurisdiction of a court
be made to depend upon the defenses made by a defendant in his answer or motion to dismiss. If such
were the rule, the question of jurisdiction would depend almost entirely upon the defendant.
DUTY FREE PHILIPPINES VS. ROSSANO MOJICA

GR No. 166365, 30 September 2005
Facts:
 Mojica was an employee of Duty Free Philippines who was charged with neglect resulting to
considerable damage to or loss of materials, assets and properties of DFP;
 Hence, the discipline committee of Duty Free considered her resigned with forfeiture of all
benefits except salary and accrued leave credits;
 As a result a complaint for illegal dismissal with prayer of full back wages and reinstatement was
filed by Mojica before the NLRC;
 The Labor Arbiter awarded the back wages including an order for reinstatement; this was, however,
reversed by NLRC;
 A motion for reconsideration was likewise dismissed by NLRC;
 A petition for Certiorari under Rule 65 was filed by Mojica before the CA, which court granted the
reliefs prayed for; Duty Free petitioned before the SC;
Issue:
1. Whether the filing by Mojica of the complaint before the NLRC was proper
2. What is the nature of DFP?
3. What is the tribunal clothed with jurisdiction to try civil service cases?
Held:
1. No, DFP being a government agency attached with DOT, complaints against it are not cognizable
by NLRC.
DFP was created under Executive Order (EO) No. 46 on September 4, 1986 primarily to augment
the service facilities for tourists and to generate foreign exchange and revenue for the government. In
order for the government to exercise direct and effective control and regulation over the tax and duty free
shops, their establishment and operation was vested in the Ministry, now Department of Tourism (DOT),
through its implementing arm, the Philippine Tourism Authority (PTA). All the net profits from the
merchandising operations of the shops accrued to the DOT.
2. EO No. 292 or The Administrative Code of 1987 empowered the Civil Service Commission to hear
and decide administrative cases instituted by or brought before it directly or on appeal, including
contested appointments, and review decisions and actions of its offices and of the agencies attached to it.
EASYCALL COMMUNICATIONS PHILS. INC. VS. KING

G.R. No. 145901 December 15, 2005
Facts:
Petitioner Easycall Communications Phils., Inc. was a domestic corporation primarily engaged in the
business of message handling. Petitioner, through its general manager, Malonzo, hired the services of
respondent as assistant to the general manager. He was given the responsibility of ensuring that the
expansion plans outside Metro Manila and Metro Cebu were achieved at the soonest possible time. He
was promoted to assistant vice president for nationwide expansion and later appointed to the even higher
position of vice president for nationwide expansion. Respondent‘s promotion was based on his performance during
the six months preceding his appointment. As vice president for nationwide expansion, he became responsible for
the sales and rentals of pager units in petitioner‘s expansion areas. He was also in charge of coordinating with the
dealers in these areas.
Thereafter, Malonzo reviewed the sales performance of respondent and scrutinized the status of
petitioner‘s Nationwide Expansion Program (NEP) which was under respondent‘s responsibility. He found
that respondent‘s actual sales for the period October 1992–March 1993 was 78% of his sales commitment and
70% of his sales target. Malonzo also checked the frequency and duration of the provincial sales development visits
made by respondent for the same period to expansion areas under his jurisdiction. He discovered that the latter
spent around 40% of the total number of working days for that period in the field.
The management then confronted respondent regarding his sales performance and provincial sales
development visits. A series of dialogues between petitioner‘s management and respondent ensued. He
was then informed that the general manager wanted his resignation. Respondent, however, declared that he had
no intention of resigning from his position. Consequently, respondent received a notice of termination signed by
Malonzo. Aggrieved, the respondent filed a complaint for illegal dismissal with the NLRC.
Petitioner argues that since respondent was a ―corporate officer,‖ the NLRC had no jurisdiction over the
subject matter under PD 902-A.
Issue:
Whether or not the NLRC has jurisdiction over the subject matter.
Held:
The SC held that under Section 5 of PD 902-A, the law applicable at the time this controversy arose, the
SEC, not the NLRC, had original and exclusive jurisdiction over cases involving the removal of corporate
officers. Section 5(c) of PD 902-A applied to a corporate officer‘s dismissal for his dismissal was a
corporate act and/or an intra-corporate controversy.
However, it had to be first established that the person removed or dismissed was a corporate officer
before the removal or dismissal could properly fall within the jurisdiction of the SEC and not the NLRC.
Here, aside from its bare allegation, petitioner failed to show that respondent was in fact a corporate officer.
―Corporate officers‖ in the context of PD 902-A are those officers of a corporation who are given that
character either by the Corporation Code or by the corporation‘s by-laws. Under Section 25 of the
Corporation Code, the ―corporate officers‖ are the president, secretary, treasurer and such other officers as may be
provided for in the by-laws.
The burden of proof is on the party who makes the allegation. Here, petitioner merely alleged that
respondent was a corporate officer. However, it failed to prove that its by-laws provided for the office of
―vice president for nationwide expansion.‖ Since petitioner failed to satisfy the burden of proof that was
required of it, we cannot sanction its claim that respondent was a ―corporate officer‖ whose removal was
cognizable by the SEC under PD 902-A and not by the NLRC under the Labor Code.
An ―office‖ is created by the charter of the corporation and the officer is elected by the directors or
stockholders. On the other hand, an employee occupies no office and generally is employed not by the
action of the directors or stockholders but by the managing officer of the corporation who also determines
the compensation to be paid to such employee.
In this case, respondent was appointed vice president for nationwide expansion by Malonzo, petitioner‘s
general manager, not by the board of directors of petitioner. It was also Malonzo who determined the
compensation package of respondent. Thus, respondent was an employee, not a ―corporate officer.‖ It is
therefore correct that jurisdiction over the case was properly with the NLRC, not the SEC. Petition is denied.
SAN MIGUEL FOODS INC. VS. SAN MIGUEL CORPORATION EMPLOYEES UNION-PTGWO
G.R. No. 168569, October 5, 2007
Facts:
The present petition for review on certiorari raises the issue of whether respondent‘s complaint is
one for unfair labor practice (ULP) over which a Labor Arbiter has jurisdiction.
At the time material to the case, respondent, San Miguel Corporation Employees Union – PTWGO
(the Union), was the sole bargaining agent of all the monthly paid employees of petitioner San Miguel
Foods, Incorporated (SMFI). On November 9, 1992, some employees of SMFI‘s Finance Department,
through the Union represented by Edgar Moraleda, brought a grievance against Finance Manager Gideon
Montesa (Montesa), for ―discrimination, favoritism, unfair labor practices, not flexible [sic], harassment,
promoting divisiveness and sectarianism, etc.,‖ before SMFI Plant Operations Manager George Nava in
accordance with Step 1 of the grievance machinery adopted in the Collective Bargaining Agreement (CBA) forged
by SMFI and the Union.
In its Position Paper, the Union specified acts of ULP of SMFI et al. under Article 248, paragraphs
(e) and (i) of the Labor Code which Article reads:
Art. 248. Unfair labor practices of employers. – It shall be unlawful for an employer to commit any
of the following unfair labor practices:
xxxx
(e) To discriminate in regard to wages, hours of work, and other terms and conditions of
employment in order to encourage or discourage membership in any labor organization. x x x
xxxx
(i) To violate a collective bargaining agreement.
and which was committed by herein respondents as follows:
1. large scale and wanton unjust discrimination in matters of promotion, particularly upon
the following members of complainant: Ellen Ventura, Julie Geronimo, Ronnie Cruz, Rita
Calasin, Romy de Peralta, Malou Alano, And E. M. Moraleda, all assigned with the Finance
Department or respondent SMFI.
2. gross and blatant violations by respondent SMFI of Section 5, Article III (Job Security)
and Section 4, Article VIII (Grievance Machinery) of the current collective bargaining
agreement (CBA) between complainant and respondent SMFI, which provisions of said
CBA are hereunder quoted for easy reference. (Emphasis and underscoring supplied)
On the questioned promotions, the Union did not allege that they were done to encourage or discourage
membership in a labor organization. In fact, those promoted were members of the complaining Union.
The promotions do not thus amount to ULP under Article 248(e) of the Labor Code.
As for the alleged ULP committed under Article 248(i), for violation of a CBA, this Article is qualified by
Article 261 of the Labor Code, the pertinent portion of which latter Article reads:
x x x violations of a Collective Bargaining Agreement, except those which are gross in character, shall no
longer be treated as unfair labor practice and shall be resolved as grievances under the Collective Bargaining
Agreement. For purposes of this article, gross violations of Collective Bargaining Agreement shall mean flagrant
and/or malicious refusal to comply with the economic provisions of such agreement.
Silva v. NLRC instructs that for a ULP case to be cognizable by the Labor Arbiter, and the NLRC to
exercise its appellate jurisdiction, the allegations in the complaint should show prima facie the
concurrence of two things, namely: (1) gross violation of the CBA; AND (2) the violation pertains to the
economic provisions of the CBA.[17] (Emphasis and underscoring supplied)
As reflected in the above-quoted allegations of the Union in its Position Paper, the Union charges SMFI to
have violated the grievance machinery provision in the CBA. The grievance machinery provision in the
CBA is not an economic provision, however, hence, the second requirement for a Labor Arbiter to
exercise jurisdiction of a ULP is not present.
The Union likewise charges SMFI, however, to have violated the Job Security provision in the CBA,
specifically the seniority rule, in that SMFI ―appointed less senior employees to positions at its Finance
Department, consequently intentionally by-passing more senior employees who are deserving of said
appointment.‖
Article 4 of the Labor Code provides that ―All doubts in the implementation and interpretation of the
provisions of this Code, including implementing rules and regulations, shall be resolved in favor of labor.‖
Since the seniority rule in the promotion of employees has a bearing on salary and benefits, it may,
following a liberal construction of Article 261 of the Labor Code, be considered an ―economic provision‖ of
the CBA.
As above-stated, the Union charges SMFI to have promoted less senior employees, thus bypassing others
who were more senior and equally or more qualified. It may not be seriously disputed that this charge is
a gross or flagrant violation of the seniority rule under the CBA, a ULP over which the Labor Arbiter has
jurisdiction.
SMFI, at all events, questions why the Court of Appeals came out with a finding that it (SMFI)
disregarded the seniority rule under the CBA when its petition before said court merely raised a question of
jurisdiction. The Court of Appeals having affirmed the NLRC decision finding that the Labor Arbiter has
jurisdiction over the Union‘s complaint and thus remanding it to the Labor Arbiter for continuation of proceedings
thereon, the appellate court‘s said finding may be taken to have been made only for the purpose of determining
jurisdiction.
Petition is denied.
LEYTE IV ELECTRIC COOPERATIVE, INC., vs LEYECO IV Employees Union- ALU

G.R. No. 157775, October 19, 2007
Facts:
The Leyte IV Electric Cooperative, Inc. (petitioner) and Leyeco IV Employees Union-ALU (respondent)
entered into a Collective Bargaining Agreement covering petitioner rank-and-file employees, for a period of five (5)
years.
The Regional Vice-President, Vicente P. Casilan (for respondent), sent a letter to petitioner demanding
holiday pay and in effect enforcing the CBA. Petitioner sent a letter-reply to respondent claiming that it
had already paid all employees all the holiday pay by reviewing the pay slips.
After exhausting the procedures of the grievance machinery, both parties agreed to submit their issues
for arbitration of the National Conciliation and Mediation Board (NCMB). Petitioner claimed that payment
was presumed since the formula used in determining the daily rate of pay of the covered employees is
Basic Monthly Salary divided by 30 days or Basic Monthly Salary multiplied by 12 divided by 360 days,
thus with said formula, the employees are already paid their regular and special days, the days when no
work is done, the 51 un-worked Sundays and the 51 un-worked Saturdays.
Issue:
WON Leyte IV Electric Cooperative is liable for underpayment of holiday pay.
Held:
Leyte IV Electric Cooperative is not liable for underpayment of holiday pay.The Voluntary Arbitrator
gravely abused its discretion in giving a strict or literal interpretation of the CBA provisions that the
holiday pay be reflected in the payroll slips. Such literal interpretation ignores the admission of
respondent in its Position Paper that the employees were paid all the days of the month even if not
worked. In light of such admission, petitioner's submission of its 360 divisor in the computation of
employees' salaries gains significance.
This ruling was applied in Wellington Investment and Manufacturing Corporation v. Trajano, 43 Producers
Bank of the Philippines v. National Labor Relations Commission. In this case, the monthly salary was fixed
by Wellington to provide for compensation for every working day of the year including the holidays
specified by law — and excluding only Sundays. In fixing the salary, Wellington used what it called the
"314 factor"; that is, it simply deducted 51 Sundays from the 365 days normally comprising a year and
used the difference, 314, as basis for determining the monthly salary. The monthly salary thus fixed actually
covered payment for 314 days of the year, including regular and special holidays, as well as days
when no work was done by reason of fortuitous cause, such as transportation strike, riot, or typhoon or
other natural calamity, or cause not attributable to the employees.
It was also applied in Odango v. National Labor Relations Commission, where Court ruled that the use of
a divisor that was less than 365 days cannot make the employer automatically liable for underpayment of
holiday pay. In said case, the employees were required to work only from Monday to Friday and half of
Saturday. Thus, the minimum allowable divisor is 287, which is the result of 365 days, less 52 Sundays
and less 26 Saturdays (or 52 half Saturdays). Any divisor below 287 days meant that the employees
were deprived of their holiday pay for some or all of the ten legal holidays. The 304-day divisor used by
the employer was clearly above the minimum of 287 days.
In this case, the employees are required to work only from Monday to Friday. Thus, the minimum
allowable divisor is 263, which is arrived at by deducting 51 un-worked Sundays and 51 un-worked
Saturdays from 365 days. Considering that petitioner used the 360-day divisor, which is clearly above the
minimum, indubitably, petitioner's employees are being given their holiday pay. Thus, the Voluntary
Arbitrator should not have simply brushed aside petitioner's divisor formula. In granting respondent's
claim of non-payment of holiday pay, a "double burden" was imposed upon petitioner because it was
being made to pay twice for its employees' holiday pay when payment thereof had already been included in the
computation of their monthly salaries.
Garcia v. Eastern Telecommunications Phils., Inc.,

G.R. No. 173115, 173163-64, April 16, 2009
Facts:
Atty. Virgilio R. Garcia was the Vice President and Head of Business Support Services and Human
Resource Departments of the Eastern TelecommunicationsPhilippines, Inc. (ETPI). ETPI is a corporation
duly organized and existing under the laws of the Republic of the Philippines. Atty. Salvador C. Hizon is
the President/Chief Executive Officer of ETPI.
On 16 January 2000, Atty. Garcia was placed under preventive suspension based on three complaints for
sexual harassment filed by Atty. Maria Larrie Alinsunurin, former manager of ETPI's Office of the Legal
Counsel; Ms. Emma Valeros-Cruz, Assistant Vice President of ETPI and former secretary of Atty. Garcia;
and Dr. Mercedita M. Macalintal, medical retainer/company physician of ETPI. In response to the
complaints, the Human Resources Department constituted a Committee on Decorum to investigate the
complaints. By reason of said complaints, Atty. Garcia was placed in preventive suspension. The committee
conducted an investigation where Atty. Garcia was given copies of affidavits of the witnesses against him and a
chance to defend himself and to submit affidavits of his witnesses. The Committee submitted a report which
recommended his dismissal. In a letter dated 14 April 2000, Atty. Hizon advised Atty.Garcia that his employment
with ETPI was, per recommendation of the Committee, terminated effective 16 April 2000.
A complaint-affidavit for illegal dismissal with prayer for full backwages and recovery of moral and
exemplary damages was filed on 11 July 2000 by Atty. Virgilio R. Garcia against ETPI and Atty. Salvador C. Hizon.
Issue:
Whether the question of legality or illegality of the removal or termination of employment of an officer of
a corporation is an intra-corporate controversy that falls under the original exclusive jurisdiction of the
regional trial courts.
Held:
A corporate officer‘s dismissal or removal is always a corporate act and/or an intra-corporate controversy,
over which the Securities and Exchange Commission [SEC] (now the Regional Trial Court) has original
and exclusive jurisdiction.
An intra-corporate controversy is one which pertains to any of the following relationships: (1) between
the corporation, partnership or association and the public; (2) between the corporation, partnership or
association and the State insofar as the former's franchise, permit or license to operate is concerned; (3)between
the corporation, partnership or association and its stockholders, partners, members or officers; and (4) among
the stockholders, partners or associates themselves. In Lozon v. National Labor Relations Commission, we declared
that Presidential Decree No. 902-A confers on the SEC original and exclusive jurisdiction to hear and decide
controversies and cases involving intra-corporate and partnership relations between or among the corporation,
officers and stockholders and partners, including their elections or appointments . . . .
Before a dismissal or removal could properly fall within the jurisdiction of the SEC, it has to be first
established that the person removed or dismissed was a corporate officer. "Corporate officers" in the
context of Presidential Decree No. 902-A are those officers of the corporation who are given that
character by the Corporation Code or by the corporation's by-laws. There are three specific officers whom
a corporation must have under Section 25 of the Corporation Code. These are the president, secretary
and the treasurer. The number of officers is not limited to these three. A corporation may have such
other officers as may be provided for by its by-laws like, but not limited to, the vice-president, cashier,
auditor or general manager. The number of corporate officers is thus limited by law and by the
corporation's by-laws.
HALAGUEÑA vs. PHILIPPINE AIRLINES INCORPORATED,

G.R. No. 172013, October 2, 2009
Facts:
Petitioners were employed as female flight attendants of respondent Philippine Airlines (PAL) on different
dates prior to November 22, 1996. They are members of the Flight Attendants and Stewards Association
of the Philippines (FASAP), a labor organization certified as the sole and exclusive certified bargaining
representative of the flight attendants, flight stewards and pursers of respondent.
On July 11, 2001, respondent and FASAP entered into a Collective Bargaining Agreement incorporating
the terms and conditions of their agreement for the years 2000 to 2005, hereinafter referred to as PALFASAP CBA.
The controversy of this petition is the the constitutionality of Section 144, Part A of their PAL-FASAP CBA,
it provides that:
― A. For the Cabin Attendants hired before 22 November 1996:
3. Compulsory Retirement
Subject to the grooming standards provisions of this Agreement, compulsory retirement shall be
fifty-five (55) for females and sixty (60) for males. ‖
Petitioners and several female cabin crews challenged the aforementioned CBA provision on compulsory
retirement averring that the provision is discriminatory, and demanded for an equal treatment with their
male counterparts.
On July 29, 2004, petitioners filed a Special Civil Action for Declaratory Relief with Prayer for the Issuance
of Temporary Restraining Order and Writ of Preliminary Injunction with the Regional Trial Court (RTC) of
Makati City against respondent for the invalidity of Section 144, Part A of the PAL-FASAP CBA. Respondent
questioned the jurisdiction of the RTC as the case make out a labor dispute arising from employer-employee
relationship.
On August 9, 2004, the RTC issued an Order upholding its jurisdiction over the present case. The RTC
reasoned that the instant case, the thrust of the Petition is Sec. 144 of the subject CBA which is allegedly
discriminatory as it discriminates against female flight attendants, in violation of the Constitution, the
Labor Code, and the CEDAW. The allegations in the Petition do not make out a labor dispute arising from
employer-employee relationship as none is shown to exist.
Aggrieved, respondent, on October 8, 2004 appealed the case to the CA praying that the order of the
RTC, which denied its objection to its jurisdiction, be annuled and set aside for having been issued
without and/or with grave abuse of discretion amounting to lack of jurisdiction.
The CA rendered a Decision, dated August 31, 2005, granting the respondent's petition, and ruled that
the lower court is by us declared to have NO JURISDICTION OVER THE CASE.
Issue:
Whether or not the RTC has jurisdiction over the petitioners' action challenging the legality or
constitutionality of the provisions on the compulsory retirement age contained in the CBA between
respondent PAL and FASAP.
Held:
Jurisdiction of the court is determined on the basis of the material allegations of the complaint and the
character of the relief prayed for irrespective of whether plaintiff is entitled to such relief.
In the case at bar, the allegations in the petition for declaratory relief plainly show that petitioners' cause
of action is the annulment of Section 144, Part A of the PAL-FASAP CBA.
The Supreme Court held that from the petitioners' allegations and relief prayed for in its petition it was
clear that the issue raised by the women flight attendants is whether Section 144, Part A of the PALFASAP CBA is
unlawful and unconstitutional. Therefore the subject of litigation is incapable of pecuniary
estimation, hence, exclusively cognizable by the RTC, pursuant to Section 19 (1) of Batas PambansaBlg.
129, as amended. Being an ordinary civil action, the same is beyond the jurisdiction of labor tribunals.
The jurisdiction of labor arbiters and the NLRC under Article 217 of the Labor Code is limited to disputes
arising from an employer-employee relationship which can only be resolved by reference to the Labor
Code, other labor statutes, or their collective bargaining agreement.
Not all controversy or money claim by an employee against the employer or vice-versa is within the
exclusive jurisdiction of the labor arbiter. Actions between employees and employer where the employeremployee
relationship is merely incidental and the cause of action precedes from a different source of
obligation is within the exclusive jurisdiction of the regular court.
Thus, where the principal relief sought is to be resolved not by reference to the Labor Code or other labor
relations statute or a collective bargaining agreement but by the general civil law, the jurisdiction over
the dispute belongs to the regular courts of justice and not to the labor arbiter and the NLRC.
Here in the instant case, the employer-employee relationship between the parties is merely incidental and
the cause of action ultimately arose from different sources of obligation, i.e., the Constitution and
Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW).
The Supreme Court also holds that the grievance machinery and voluntary arbitrators do not have the
power to determine and settle the issues at hand. They have no jurisdiction and competence to decide
constitutional issues relative to the questioned compulsory retirement age. Their exercise of jurisdiction is
futile, as it is like vesting power to someone who cannot wield it.
Although the CBA provides for a procedure for the adjustment of grievances, such referral to the
grievance machinery and thereafter to voluntary arbitration would be inappropriate to the petitioners,
because the union and the management have unanimouslyagreed to the terms of the CBA and their
interest is unified.
Okol vs. Slimmer’s World International, et al,

G.R. No. 160146, December 11, 2009
Facts:
Respondent, Slimmers World International, employed petitioner Leslie Okol initially as a management
trainee. She rose up the ranks to become Head Office Manager and then Director and Vice President until
her dismissal.
Prior to her dismissal, respondent preventively suspended Okol which arose from the seizure by the
Bureau of Customs of seven Precor Elliptical Machines and seven Precor Treadmills belonging to or
consigned to Slimmers World. Okol received a memorandum extending her suspension until pending the
outcome of the investigation on the Precor equipment importation. Okol received another memorandum
requiring her to explain why no disciplinary action should be taken against her. Thereafter, Okol filed her
written explanation but respondents found it to be unsatisfactory.Through a letter signed by its president
Ronald Joseph Moy, Slimmers World terminated Okol‘s employment.
Okol filed a complaint with the Arbitration branch of the NLRC against respondents for illegal suspension,
illegal dismissal, unpaid commissions, damages and attorney‘s fees, with prayer for reinstatement and
payment of back wages. Respondents filed a motion to dismiss on the ground that NLRC had no
jurisdiction over the subject matter of the complaint, with a reservation of their right to file a Position
Paper at the proper time. The Labor Arbiter granted the motion to dismiss ruling that Okol was the vice
president, and since it involved a corporate officer, the dispute was an intra-corporate controversy falling
outside the jurisdiction of the Arbitration branch.
Okol filed an appeal with the NLRC, and it reversed and set aside the labor arbiter‘s decision, ordering the
reinstatement of Okol with payment of full back wages and other indemnities.
Respondents filed a Motion for Reconsideration with the NLR, contending that the relief prayed for was
confined only to the question of jurisdiction. However, the NLRC not only decided the case on the merits
but did so in the absence of position papers from both parties.
Respondents then filed an appeal with the Court of Appeals which set aside the NLRC‘s Resolution and
affirmed the Labor Arbiter‘s order. The Court of Appeals ruled that the case, being an intra-corporate
dispute, falls within the jurisdiction of the regular courts pursuant to Republic Act No. 8799. Okol filed a
motion for Reconsideration which was denied, hence this petition for Review on Certiorari.
Issue:
WON the NLRC has jurisdiction over the illegal dismissal case filed by the petitioner
Ruling:
The petition lacks merit. Petitioner insists that even as vice president, the work she performed conforms
to that of an employee. Mere title or designation in a corporation will not, by itself, determine the
existence of an employer-employee relationship. It is the ―four-fold‖ test. Respondents, on the other
hand, maintain that petitioner was a corporate officer at the time of her dismissal.
Sec 25 of the Corporation Code enumerates corporate officers as the president, secretary, treasurer and
such other officers as may be provided for in the by-laws. In Tabang v. NLRC, we held that an "office"
is created by the charter of the corporation and the officer is elected by the directors or stockholders. On
the other hand, an "employee" usually occupies no office and generally is employed not by action of the
directors or stockholders but by the managing officer of the corporation who also determines the
compensation to be paid to such employee.
Clearly, from the documents submitted by respondents, petitioner was a director and officer of Slimmers
World. The charges of illegal suspension, illegal dismissal unpaid commissions, reinstatement and back
wages imputed by petitioner against respondent falls squarely within the ambit of intra-corporation
disputes. It is not a simple labor problem but a matter that comes within the area of corporate affairs and
management and is a corporate controversy in contemplation of the Corporation Code, subject to the
jurisdiction of the regular courts. Thus the appellate court correctly ruled that it is not the NLRC but the
regular courts which have jurisdiction over the present case.
Hugo et al., vs. Light Rail Transit Authority

G.R. No. 181866, March 18, 2010
Facts:
Respondent Light Rail Transit Authority (LRTA), a government-owned and controlled corporation,
constructed a light rail transit system which traverses from Baclaran in Parañaque City to Monumento in
Kalookan City, Metro Manila pursuant to its mandate under its charter, Executive Order No. 603, Series of
1980, as amended.
To effectively carry out its mandate, LRTA entered into a ten-year Agreement for the Management and
Operation of the Metro Manila Light Rail Transit System (the Agreement) from June 8, 1984 until June 8,
1994 with Metro Transit Organization, Inc. (METRO).
One of the stipulations in the Agreement was:
METRO shall be free to employ such employees and officers as it shall deem necessary
in order to carry out the requirements of the Agreement. Such employees and officers
shall be the employees of METRO and not of LRTA. METRO shall prepare a compensation
schedule for the salaries and fringe benefits of its personnel (Article 3, par. 3.05).
METRO thus hired its own employees including herein petitioners-members of the
PinagisangLakasngManggagawasa METRO, Inc.-National Federation of Labor, otherwise known as PIGLASMETRO,
INC.-NFL-KMU (the Union), the certified exclusive collective bargaining representative of METRO's rank-and-file
employees.
When the Agreement expired on July 31, 2000, LRTA did not renew it. It instead took over the
management and operations of the light rail transit system, hiring new personnel for the purpose. METRO
thus considered the employment of all its personnel terminated effective September 30, 2000. Petitioners filed a
complaint for illegal dismissal and unfair labor practice with prayer for reinstatement and damages against METRO
and LRTA before the NCR Arbitration Branch, National Labor Relations Commission (NLRC).
Issue:
Whether or not the Labor Arbiter's decision against LRTA was rendered without jurisdiction.
Ruling:
The Labor Arbiter and the NLRC do not have jurisdiction over LRTA. Petitioners themselves admitted in
their complaint that LRTA "is a government agency organized and existing pursuant to anoriginal charter
(Executive Order No. 603)," and that they are employees of METRO.
Light Rail Transit Authority v. Venus, Jr., which has a similar factual backdrop, holds that LRTA, being a
government-owned or controlled corporation created by an original charter, is beyond the reach of the
Department of Labor and Employment which has jurisdiction over workers in the private sector, viz:
. . . [E]mployees of petitioner METRO cannot be considered as employees of petitioner LRTA. The
employees hired by METRO are covered by the Labor Code and are under the jurisdiction of the
Department of Labor and Employment, whereas the employees of petitioner LRTA, a governmentowned
and controlled corporation with original charter, are covered by civil service rules.
Herein private respondent workers cannot have the best of two worlds, e.g., be considered government
employees of petitioner LRTA, yet allowed to strike as private employees under our labor laws. x xx.
x xxx
. . . [I]t is inappropriate to pierce the corporate veil of petitioner METRO. x xx.
In the instant case, petitioner METRO, formerly Meralco Transit Organization, Inc., was originally owned by
the Manila Electric Company and registered with the Securities and Exchange Commission more than a
decade before the labor dispute. It then entered into a ten-year agreement with petitioner LRTA in 1984.
And, even if petitioner LRTA eventually purchased METRO in 1989, both parties maintained their separate
and distinct juridical personality and allowed the agreement to proceed. In 1990, this Court, in Light Rail
Transit Authority v. Commission on Audit (G.R. No. 88365, January 9, 1990), even upheld the validity of
the said agreement. Consequently, the agreement was extended beyond its ten-year period. In 1995,
METRO's separate juridical identity was again recognized when it entered into a collective bargaining
agreement with the workers' union. All these years, METRO's distinct corporate personality continued
quiescently, separate and apart from the juridical personality of petitioner LRTA.
The labor dispute only arose in 2000, after a deadlock occurred during the collective
bargaining between petitioner METRO and the workers' union. This alone is not a justification to pierce the
corporate veil of petitioner METRO and make petitioner LRTA liable to private respondent workers. There
are no badges of fraud or any wrongdoing to pierce the corporate veil of petitioner METRO.
x xxx
In sum, petitioner LRTA cannot be held liable to the employees of petitioner METRO.
IN FINE, the Labor Arbiter's decision against LRTA was rendered without jurisdiction, hence, it is
void, thus rendering it improper for the remand of the case to the NLRC, as ordered by the appellate
court, for it (NLRC) to give due course to LRTA's appeal.
A final word. It bears emphasis that this Court's present Decision treats only with respect to the
Labor Arbiter's decision against respondent LRTA.
Matling Industrial Corporation vs. Coros

G.R. No. 157802, Oct. 13, 2010
Facts:
After he was dismissed by Matling Industrial Corporation from his position as Vice President for Finance
and Administartion, respondent Ricardo Coros filed a complaint for illegal suspension and illegal dismissal
against the former and some of its corporate officers in the NLRC, Sub-Regional Arbitration Branch XII, Iligan City.
The petitioners moved to dismiss the complaint contending that the complaint pertained to the
jurisdiction of the Securities and Exchange Commission (SEC) due to the controversy being intracorporate
inasmuch as the respondent was a member of Matling‘s Board of Directors aside from being its
Vice-President for Finance and Administration prior to his termination.
The respondent opposed the petitioners‘ motion to dismiss, insisting that his status as a member of
Matling‘s Board of Directors was doubtful, considering that he had not been formally elected as such; that
he did not own a single share of stock in Matling, considering that he had been made to sign in blank an
undated indorsement of the certificate of stock he had been given in 1992; that Matling had taken back
and retained the certificate of stock in its custody; and that even assuming that he had been a Director of
Matling, he had been removed as the Vice President for Finance and Administration, not as a Director, a fact that
the notice of his termination dated April 10, 2000 showed.
The Labor Arbiter, ruling that the respondent was a corporate officer because he was occupying the
position of Vice President for Finance and Administration and at the same time was a Member of the
Board of Directors of Matling, granted the petitioners‘ motion to dismiss, saying that his removal was a
corporate act of Matling and the controversy resulting from such removal was under the jurisdiction of
the SEC, pursuant to Section 5, paragraph (c) of Presidential Decree No. 902.
NLRC set aside the dismissal, concluding that the respondent‘s complaint for illegal dismissal was
properly cognizable by the LA, not by the SEC, because he was not a corporate officer by virtue of his
position in Matling, albeit high ranking and managerial, not being among the positions listed in Matling‘s
Constitution and By-Laws.
The petitioners sought reconsideration reiterating that the respondent, being a member of the Board of
Directors, was a corporate officer whose removal was not within the LA‘s jurisdiction.
NLRC denied the petitioners‘ motion for reconsideration.
Thus, the petitioners elevated the issue to the CA by petition for certiorari, contending that the NLRC
committed grave abuse of discretion amounting to lack of jurisdiction in reversing the correct decision of
the LA. The CA dismissed the petition contending that:
The position of vice-president for administration and finance, which Coros used to hold in
the corporation, was not created by the corporation‘s board of directors but only by its president
or executive vice-president pursuant to the by-laws of the corporation. Moreover, Coros‘
appointment to said position was not made through any act of the board of directors or stockholders of the
corporation. Consequently, the position to which Coros was appointed and later on removed from, is not a
corporate office despite its nomenclature, but an ordinary office in the corporation.
Coros‘ alleged illegal dismissal therefrom is, therefore, within the jurisdiction of the labor arbiter.
The CA denied the petitioners‘ motion for reconsideration on April 2, 2003.
Issues:
Whether or not respondent Coros was a corporate officer of Matling
Whether or not the Labort Arbiter has jurisdiction over the case
Ruling:
First Issue
As a rule, the illegal dismissal of an officer or other employee of a private employer is properly cognizable
by the LA. This is provided for in Article 217 (a) 2 of the Labor Code.
Where the complaint for illegal dismissal concerns a corporate officer, however, the controversy falls
under the jurisdiction of the Securities and Exchange Commission (SEC), because the controversy arises
out of intra-corporate or partnership relations between and among stockholders, members, or associates,
or between any or all of them and the corporation, partnership, or association of which they are stockholders,
members, or associates, respectively; and between such corporation, partnership, or association and the State
insofar as the controversy concerns their individual franchise or right to exist as such entity; or because the
controversy involves the election or appointment of a director, trustee, officer, or manager of such corporation,
partnership, or association. Such controversy, among others, is known as an intra-corporate dispute.
The petitioners contend that the position of Vice President for Finance and Administration was a corporate
office, having been created by Matling‘s President pursuant to By-Law No. V.
The respondent counters that Matling‘s By-Laws did not list his position as Vice President for Finance and
Administration as one of the corporate offices; that Matling‘s By-Law No. III listed only four corporate
officers, namely: President, Executive Vice President, Secretary, and Treasurer; that the corporate offices
contemplated in the phrase ―and such other officers as may be provided for in the by-laws‖ found in
Section 25 of the Corporation Code should be clearly and expressly stated in the By-Laws; that the fact
that Matling‘s By-Law No. III dealt with Directors & Officers while its By-Law No. V dealt
with Officers proved that there was a differentiation between the officers mentioned in the two provisions,
with those classified under By-Law No. V being ordinary or non-corporate officers; and that the officer, to
be considered as a corporate officer, must be elected by the Board of Directors or the stockholders, for
the President could only appoint an employee to a position pursuant to By-Law No. V.
The court favors the respondents contention. Section 25 of the Corporation Code provides that a
position must be expressly mentioned in the By-Laws in order to be considered as a corporate office.
Thus, the creation of an office pursuant to or under a By-Law enabling provision is not enough to make a
position a corporate office. Moreover, the Board of Directors of Matling could not validly delegate the
power to create a corporate office to the President, in light of Section 25 of the Corporation Code requiring the
Board of Directors itself to elect the corporate officers. Verily, the power to elect the corporate officers was a
discretionary power that the law exclusively vested in the Board of Directors, and could not be delegated to
subordinate officers or agents. The office of Vice President for Finance and Administration created by Matling‘s
President pursuant to By Law No. V was an ordinary, not a corporate, office.
The power to create new offices and the power to appoint the officers to occupy them vested by By-Law
No. V merely allowed Matling‘s President to create non-corporate offices to be occupied by ordinary
employees of Matling. Such powers were incidental to the President‘s duties as the executive head of
Matling to assist him in the daily operations of the business.
Second Issue
Petitioners further content that because the respondent was a Director/stockholder of Matling, the NLRC
had no jurisdiction over his complaint, considering that any case for illegal dismissal brought by a
stockholder/officer against the corporation was an intra-corporate matter that must fall under the
jurisdiction of the SEC conformably with the context of PD No. 902-A.
This contention also has no merit.
The criteria for distinguishing between corporate officers who may be ousted from office at will, on one
hand, and ordinary corporate employees who may only be terminated for just cause, on the other hand,
do not depend on the nature of the services performed, but on the manner of creation of the office. In
the respondent‘s case, he was supposedly at once an employee, a stockholder, and a Director of
Matling. The circumstances surrounding his appointment to office must be fully considered to determine
whether the dismissal constituted an intra-corporate controversy or a labor termination dispute. We must
also consider whether his status as Director and stockholder had any relation at all to his appointment
and subsequent dismissal as Vice President for Finance and Administration.
The respondent was not appointed as Vice President for Finance and Administration because of his being a
stockholder or Director of Matling. He had started working for Matling on September 8, 1966, and had
been employed continuously for 33 years until his termination on April 17, 2000, first as a bookkeeper, and his
climb in 1987 to his last position as Vice President for Finance and Administration had been gradual but steady.
Even though he might have become a stockholder of Matling in 1992, his promotion to the position of
Vice President for Finance and Administration in 1987 was by virtue of the length of quality service he
had rendered as an employee of Matling. His subsequent acquisition of the status of Director/stockholder
had no relation to his promotion. Besides, his status of Director/stockholder was unaffected by his
dismissal from employment as Vice President for Finance and Administration.
Manila Electric Co. et al., vs. Lim

GR No. 184769 Oct. 5, 2010
Facts:
A letter was sent to the Meralco admin department in bulacan denouncing Lim, an administrative clerk.
She was ordered to be transferred to Alabang due to concerns over her safety. She complained under the
premise that the transfer was a denial of her due process. She wrote a letter stating that: ―It appears that the
veracity of these accusations and threats to be [sic] highly suspicious, doubtful or are just mere jokes if they
existed at all.‖ She added, ―instead of the management supposedly extending favor to me, the net result and effect
of management action would be a punitive one.‖ She asked for deferment thereafter. Since the company didn‘t
respond, she filed for a writ of habeas data in the Bulacan RTC due to meralco‘s omission of provding her with
details about the report of the letter. To her, this constituted a violation of her liberty and security. She asked for
disclosure of the data and measures for keeping the confidentiality of the data.
Meralco filed a reply saying that the jurisdiction was with the NLRC and that the petition wasn‘t in order.
Trial court ruled in her favor.
In the SC, Meralco petitioned that Habeas Data applies to entities engaged in the gathering, collecting or
storing of data or information regarding an aggrieved party‘s person, family or home
Issue:
Is Habeas Data the right remedy for Lim?
Held:
No, petition dismissed
―Section 1. Habeas Data. – The writ of habeas data is a remedy available to any person whose right to
privacy in life, liberty or security is violated or threatened by an unlawful act or omission of a public official or
employee or of a private individual or entity engaged in the gathering, collecting or storing of data or information
regarding the person, family, home and correspondence of the aggrieved party‖ It‘s a forum for enforcing one‘s
right to the truth. Like amparo, habeas data was a response to killings and enforced disappearances.
Castillo v Cruz- and habeas data will NOT issue to protect purely property or commercial concerns nor
when the grounds invoked in support of the petitions therefor are vague or doubtful.
Employment is a property right in the due process clause. Lim was concerned with her employment, one
that can be solved in the NLRC.
There was no violation of respondent‘s right to privacy. Respondent even said that the letters were mere
jokes and even conceded the fact that the issue was labor related due to references to ―real intent of
management‖.
HONGKONG AND SHANGHAI BANKING CORP., LTD. STAFF RETIREMENT PLAN vs.
SPOUSES BIENVENIDO AND EDITHA BROQUEZA
G.R. 178610
Facts:
Petitioners Gerong and Broqueza are employees of Hongkong and Shanghai Banking Corporation (HSBC).
They are also members of respondent Hongkong Shanghai Banking Corporation, Ltd. Staff Retirement Plan. The
HSBCL-SRP is a retirement plan established by HSBC through its Board of Trustees for the benefit of the
employees.
On October 1, 1990, petitioner Broqueza obtained a car loan in the amount of Php175,000.00. On
December 12, 1991, she again applied and was granted an appliance loan in the amount of
Php24,000.00. On the other hand, petitioner Gerong applied and was granted an emergency loan in the
amount of Php35,780.00 on June 2, 1993. These loans are paid through automatic salary deduction.
Meanwhile [in 1993], a labor dispute arose between HSBC and its employees. Majority of HSBC‘s employees were
terminated, among whom are petitioners Editha Broqueza and Fe Gerong. The employees then filed an illegal
dismissgal case before the National Labor Relations Commission (NLRC) against HSBC.
Because of their dismissal, petitioners were not able to pay the monthly amortizations of their respective
loans. Thus, respondent HSBCL-SRP considered the accounts of petitioners delinquent. Demands to pay
the respective obligations were made upon petitioners, but they failed to pay. HSBCL-SRP filed a Civil Case for
recovery and collection of money against the spouses Broqueza and Gerong.
MTC and RTC ruled in favor of HSBCL-SRP stating that Gerong and Editha Broqueza‘s termination from
employment resulted in the loss of continued benefits under their retirement plans . The absence of a period within
which to pay the loan allows HSBCL-SRP to demand immediate payment.The loan obligations are considered pure
obligations, the fulfillment of which are demandable at once. CA reversed the RTC's decision ruling that HSBCL-
SRP‘s complaints for recovery of sum of money against Gerong and tymhe spouses Broqueza are premature as the
loan obligations have not yet matured.
Issue:
Whether or not the CA has erred in reversing the decision of the RTC and the MTC.
Held:
Petition is meritorious.
The Promissory Notes do not contain a period, HSBCL-SRP has the right to demand immediate payment.
Article 1179 of the Civil Code applies. The spouses Broqueza‘s obligation to pay HSBCL-SRP is a pure
obligation. The fact that HSBCL-SRP was content with the prior monthly check-off from Editha Broqueza‘s
salary is of no moment. The payroll deduction is merely a convenient mode of payment and not the sole
source of payment for the loans. HSBCL-SRP never agreed that the loans will be paid only through salary
deductions. Neither did HSBCL-SRP agree that if Editha Broqueza ceases to be an employee of HSBC, her
obligation to pay the loans will be suspended. The enforcement of a loan agreement involves ―debtorcreditor
relations founded on contract and does not in any way concern employee relations. As such it
should be enforced through a separate civil action in the regular courts and not before the Labor Arbiter.
RENATO REAL, Petitioner, vs. SANGU PHILIPPINES, INC. and/ or KIICHI ABE
Facts:
Renato Real was the Manager of respondent corporation Sangu Philippines, Inc. which is engaged in the
business of providing manpower for general services. He filed a complaint for illegal dismissal against the
respondents stating that he was neither notified of the Board meeting during which his removal was
discussed nor was he formally charged with any infraction.
Respondents, on the other hand, said that Real committed gross acts of misconduct detrimental to the
company since 2000. The LA declared petitioner as having been illegally dismissed. Sangu appealed to
NLRC and established petitioner‘s status as a stockholder and as a corporate officer and hence, his action
against respondent corporation is an intra-corporate controversy over which the Labor Arbiter has no jurisdiction.
NLRC modified the LA‘s decision. On appeal, the CA affirmed the decision of NLRC.
Issue:
Whether or not petitioner‘s complaint for illegal dismissal constitutes an intra-corporate controversy.
Ruling:
To determine whether a case involves an intra-corporate controversy, and is to be heard and decided by
the branches of the RTC specifically designated by the Court to try and decide such cases, two elements
must concur: (a) the status or relationship of the parties, and (2) the nature of the question that is the
subject of their controversy.
The first element requires that the controversy must arise out of intra-corporate or partnership relations
between any or all of the parties and the corporation x x . The second element requires that the dispute among the
parties be intrinsically connected with the regulation of the corporation. If the nature of the controversy involves
matters that are purely civil in character, necessarily, the case does not involve an intra-corporate controversy.
Guided by this recent jurisprudence, we thus find no merit in respondents‘ contention that the fact alone
that petitioner is a stockholder and director of respondent corporation automatically classifies this case as
an intra-corporate controversy. To reiterate, not all conflicts between the stockholders and the
corporation are classified as intra-corporate. There are other factors to consider in determining whether
the dispute involves corporate matters as to consider them as intra-corporate controversies.
PORTILLO VS. RODULF LIETZ

G.R. No. 196539 October 10, 2012
Facts:
In a letter agreement dated May 3, 1991 signed by individual respondent and conformed to by petitioner,
the latter was hired by the former under the following terms and conditions:
A copy of work rules and policies on personnel is enclosed and an inherent part of the terms and
conditions of employment.
We acknowledge your proposal in your application specifically to the effect that you will not
engage
in any other gainful employment by yourself or with any other company either directly or indirectly without
written consent of Lietz Inc., and we hereby accept and henceforth consider your proposal an undertaking
on your part, a breach of which will render you liable for liquidated damages.
On her tenth year with Lietz Inc., specifically on February 2002, Portillo was promoted to Sales
representative and received corresponding increase in basic monthly and sales quota. In this regard,
Portillo signed another letter agreement containing a ―Goodwill Clause‖.
Three years after, on June 2005, Portillo resigned from Lietz Inc. During her exit interview, Portillo
declared that she intended to engage in business, a rice dealership, selling rice in wholesale. On June 15,
2005, lietz Inc. accepted Portillo‘s resignation and reminded her of the ―goodwill clause‖ in the last letter
agreement she had signed. Upon receipt, Portillo, jotted a note thereon that the latest contract she had
signed in February 2004 did not contain any ―goodwill clause‖ referred to be Lietz. In response thereto,
Lietz categorically wrote:
Please be informed that the standard prescription of prohibiting employees from engaging in
business or seeking employment with organizations that directlty or indirectly compete against Lietz for
three years after resignation remains in effect.
Subsequently, Lietz learned that portillo had been hired by Ed Keller Philippines, Limited to head its
Pharma Raw Material Department. Ed Keller is purportedly a direct competitor of Lietz Inc.
September 2005, Portillo filed a complaint with the NLRC for nonpayment of 1 month‘s salary, 2 month‘s
commission, 13th month pay, plus moral, exemplary and actual damages and attorney‘s fees. In its
position paper, Lietz admitted liability to Portillo‘s money claims in the total of P110,662.16. However
Lietz raised the defense of legal compensation: Portillo‘s money claims should be offset against her
liability to Lietz for liquidated damages in the amount of P869,633.09 for Portillo‘s alleged breach of her ―goodwill
clause‖ in the employment contract when she became employed with Ed Keller. On May 2007, labor Arbiter
granted Portillo‘s complaint ordering respondents to pay complainant Portillo the amount of P110,662.16
representing her salary and commissions including 13th month pay. Lietz filed a petition for certiorari before the
Court of Appeals, alleging grave abuse of discretion in the labor tribunal‘s rulings. The CA initially affirmed the labor
tribunals, but on motion for reconsideration, modified its previous decision. While upholding the monetary award in
favor of Portillo, the CA allowed legal compensation or set0off of such award of monetary claims by her liability to
Lietz. Portillo‘s motion for reconsideration was denied.
Issue:
Whether Portillo‘s money claims for unpaid salaries may be offset against Lietz‘s claim for liquidated
damages and whether it falls within the labor arbiter‘s jurisdiction.
Held:
Paragraph 4 of Art. 217 of the Labor Code appears to have caused reliance by the CA on the causal
connection between Portillo‘s money claims against respondent‘s claim from liquidated damages against
the former.
Art. 217. Jurisdiction of Labor Arbiters and the Commission

(a) Except as otherwise provided under this code, the Arbiters shall have original and exclusive
jurisdiction to hear and decide, within 30 calendar days after the submission of the case by the
parties for decision without extension, even in the absence of stenographic notes, the following
case involving all workers, whether agricultural or nonagricultural.
4. Claims for actual, moral, exemplary and other forms of damages arising from the employeremployee
relations.
Evidently, the CA is convinced that the claim for liquidated damages emanates from the ―goodwill clause‖
of the employment contract and, therefore, is a claim for damages arising from the employer-employee
relations.
Stated differently, the petitioner seeks protection under the Civil laws and claims no benefits under the
Labor Code. The primary relief sought for liquidated damages for breach if a contractual obligation. The
other items demanded are not labor benefits demanded by workers generally taken cognizance of in labor
disputes such as payment of wages, overtime compensation or separation pay. The items claimed are the
natural consequences flowing from breach of an obligation, intrinsically a civil dispute.
The Court, therefore, believes and so holds that the ―money claims of workers‖ referred to in paragraph 3
of Art. 217 embraces money claims which arise out of or in connection with the employer-employee
relationship, or some aspect or incident of such relationship. Put a little differently, that money claims of
workers which now fall within the original and exclusive jurisdiction of labor arbiters are those money
claims which now have some reasonable causal connection with the employer-employee relationship.
The the ―goodwill clause‖ in this case is likewise a postemployment issue should brook no argument.
There is no dispute as to the cessation of Portillo‘s employment. She simply claims her unpaid salaries
and commissions, which Lietz does not contest. At that juncture, Portillo was no longer an employee of
Lietz. The ―goodwill clause‖ or the non-compete clause‖ is a contractual undertaking after the cessation of
the employment relationship between the parties. In accordance with jurisprudence, breach of the
undertaking is a civil dispute, not a labor law case.
The CA was misguided. Its conclusion was incorrect. There is no causal connection between the petitioner
employee‘s claim and for the alleged ―goodwill clause‖ violation. Portillo‘s claim for unpaid salaries did not
have anything to do with her alleged violation of the employment contract as, in fact, her separation from
employment is not ―rooted‖ in the alleged contractual violation. She resigned from her employment. She
was not dismissed. Portillo‘s entitlement to the unpaid salaries is not even contested. Indeed Lietz‘s
argument about legal compensation necessarily admits that it owes money claimed by Portillo.
The application of compensation in this case is effectively barred by Art. 113 of the Labor Code which
prohibits wage deductions except in three circumstances:
Art 113. Wage Deduction. No employer, in his own behalf or in behalf of any person, shall
make any deduction from the wages of his employees, except:
(a) In cases where the worker is insured with his consent by the employer, and the deduction is to
recompense for the amount paid by him as premium on the insurance
(b) For union dues, in cases where the right of worker or his union to check-off has been recognized by
the employer or authorized in writing by the individual worker concerned; and
(c) In cases where the employer is authorized by law or regulations issued by the SOLE
ACE NAVIGATION CO., INC. VS. FERNANDEZ

G.R. NO. 197309, 10 OCT 2012
Facts:
On October 9, 2008, seaman Teodorico Fernandez (Fernandez), assisted by his wife, Glenita
Fernandez, filed with the NLRC a complaint for disability benefits, with prayer for moral and exemplary
damages, plus attorney‘s fees, against Ace Navigation Co., Inc., Vela International Marine Ltd., and/or
Rodolfo Pamintuan (petitioners). The petitioners moved to dismiss the complaint, contending that the
labor arbiter had no jurisdiction over the dispute. They argued that exclusive original jurisdiction is with
the voluntary arbitrator or panel of voluntary arbitrators, pursuant to Section 29 of the POEA Standard
Employment Contract (POEA-SEC ), since the parties are covered by the AMOSUP-TCC or AMOSUP-VELA
(as later cited by the petitioners) collective bargaining agreement (CBA). Under Section 14 of the CBA, a dispute
between a seafarer and the company shall be settled through the grievance machinery and mandatory voluntary
arbitration. Fernandez opposed the motion. He argued that inasmuch as his complaint involves a money claim,
original and exclusive jurisdiction over the case is vested with the labor arbiter.
On December 9, 2008, Labor Arbiter Rioflorido denied the motion to dismiss, holding that under
Section 10 of RA No.8042, the Migrant Workers and Overseas Filipinos Act of 1995, the labor arbiter has
original and exclusive jurisdiction over money claims arising out of an employer-employee relationship or
by virtue of any law or contract, notwithstanding any provision of law to the contrary. The petitioners
appealed to the NLRC, but the labor agency denied the appeal. Accordingly, it remanded the case to the
labor arbiter for further proceedings. The petitioners moved for reconsideration, but the NLRC denied the
motion, prompting the petitioners to elevate the case to the CA through a petition for certiorari under
Rule 65 of the Rules of Court.
The CA Decision
Through its decision of September 22, 2010, the CA denied the petition on procedural and
substantive grounds. On the merits of the case, the CA believed that the petition cannot prosper. The CA
clarified that while the law allows parties to submit to voluntary arbitration other labor disputes, including
matters falling within the original and exclusive jurisdiction of the labor arbiters under Article 217 of the
Labor Code as this Court recognized in Vivero v. Court of Appeal s, the parties‘ submission agreement
must be expressed in unequivocal language. It found no such unequivocal language in the AMOSUP/TCC
CBA that the parties agreed to submit money claims or, more specifically, claims for disability benefits to
voluntary arbitration. Taking note of Section 29 of the POEA-SEC, the CA explained that the relevant
POEA-SEC provisions should likewise be qualified by the ruling in the Vivero case, the Labor Code, and
other applicable laws and jurisprudence. In sum, the CA stressed that the jurisdiction of voluntary
arbitrators is limited to the seafarers‘ claims which do not fall within the labor arbiter‘s original and
exclusive jurisdiction or even in cases where the labor arbiter has jurisdiction, the parties have agreed in
unmistakable terms (through their CBA) to submit the case to voluntary arbitration. The petitioners
moved for reconsideration of the CA decision, but the appellate court denied the motion.
Issue:
Who has the original and exclusive jurisdiction over Fernandez‘s disability claim — the labor arbiter under
Section 10 of R.A. No. 8042, as amended, or the voluntary arbitration mechanism as prescribed in the
parties‘ CBA and the POEA-SEC?
Held:
We find merit in the petition. The State‘s labor relations policy laid down in the Constitution and
fleshed out in the enabling statute, the Labor Code (Art. 260, 261 and 262) and the POEA-SEC provide
that the voluntary arbitrator or panel of voluntary arbitrators has original and exclusive jurisdiction over
Fernandez‘s disability claim. There is no dispute that the claim arose out of Fernandez‘s employment with
the petitioners and that their relationship is covered by a CBA — the AMOSUP/TCC or the AMOSUP-VELA
CBA. The CBA provides for a grievance procedure for the resolution of grievances or disputes which occur
during the employment relationship and, like the grievance machinery created under Article 261 of the
Labor Code, it is a two-tiered mechanism, with voluntary arbitration as the last step.
Contrary to the CA‘s reading of the CBA‘s Article 14, there is unequivocal or unmistakable language in the
agreement which mandatorily requires the parties to submit to the grievance procedure any dispute or cause of
action they may have against each other. What might have caused the CA to miss the clear intent of the parties in
prescribing a grievance procedure in their CBA is, as the petitioners‘ have intimated, the use of the auxiliary verb
"may" in Article 14.7(a) of the CBA which provides that "if by reason of the nature of the Dispute, the parties are
unable to amicably settle the dispute, either party may refer the case to a MANDATORY ARBITRATION
COMMITTEE." While the CA did not qualify its reading of the subject provision of the CBA, it is reasonable to
conclude that it viewed as optional the referral of a dispute to the mandatory arbitration committee when the
parties are unable to amicably settle the dispute. We find this a strained interpretation of the CBA provision. The
CA read the provision separately, or in isolation of the other sections of Article 14, especially 14.7(h), which, in
clear, explicit language, states that the "referral of all unresolved disputes from the Grievance Resolution
Committee to the Mandatory Arbitration Committee shall be unwaivable prerequisite or condition precedent for
bringing any action, claim, or cause of action, legal or otherwise, before any court, tribunal, or panel in any
jurisdiction" and that the failure by a party or seaman to so refer the dispute to the prescribed dispute resolution
mechanism shall bar any legal or other action.
Read in its entirety, the CBA‘s Article 14 (Grievance Procedure) unmistakably reflects the parties‘
agreement to submit any unresolved dispute at the grievance resolution stage to mandatory voluntary
arbitration under Article 14.7(h) of the CBA. And, it should be added that, in compliance with Section 29
of the POEA-SEC which requires that in cases of claims and disputes arising from a seafarer‘s
employment, the parties covered by a CBA shall submit the claim or dispute to the original and exclusive
jurisdiction of the voluntary arbitrator or panel of voluntary arbitrators.
Since the parties used unequivocal language in their CBA for the submission of their disputes to voluntary
arbitration, we find that the CA committed a reversible error in its ruling. It bears stressing at this point
that we are upholding the jurisdiction of the voluntary arbitrator or panel of voluntary arbitrators over the
present dispute, not only because of the clear language of the parties‘ CBA on the matter; more importantly, we so
uphold the voluntary arbitrator‘s jurisdiction, in recognition of the State‘s express preference for voluntary modes
of dispute settlement, such as conciliation and voluntary arbitration as expressed in the Constitution, the law and
the rules. It is settled that when the parties have validly agreed on a procedure for resolving grievances and to
submit a dispute to voluntary arbitration then that procedure should be strictly observe.
Cosare vs. Broadcom Asia, Inc.

GR No. 201298, February 5, 2014, citing 2010
FACTS:
Broadcom Asia Inc. (Broadcom) is engaged in the business of selling b r o a d c a s t equipment needed
by television networks and production houses. One of its incorporators was Cosare, having been assigned 100
shares of stock.
In October 2001, Cosare was promoted to the position of Assistant Vice President for Sales and Head of
the Technical Coordination. In 2009, however, Cosare was asked to tender his resignation in exchange for
―financial assistance‖ in t h e a m o u n t o f ₱300,000.00. He refused to comply with the directive.
Thereafter, Cosare received a memo charging him of serious misconduct and willful breach of trust and
was, thus, suspended from having access to any and all company files/records and use of company assets. He was
likewise barred from entering the company premises and prevented from retrieving his personal belongings.
Aggrieved, Cosare filed a labor complaint against Broadcom claiming that he was constructively dismissed from his
employment.
The Labor Arbiter dismissed the complaint on the ground that Cosare failed to establish that he was
constructively dismissed. On appeal, the NLRC reversed the Labor Arbiter‘s decision. Broadcom assailed the NLRC‘s
ruling, raising the new argument that the case involved an intra-corporate controversy and thus, within the
jurisdiction of the RTC and not of the Labor Arbiter.
The CA granted Broadcom‘s petition and agreed that the case involved an intra-corporate controversy
which, pursuant to Presidential Decree No. 902-A, as amended, was within the exclusive jurisdiction of the RTC.
The CA found that Cosare was indeed a stockholder of Broadcom, and that he was listed as one of the directors.
Moreover, he held the position of AVP for Sales which is listed as a corporate office. Hence, aggrieved by the
decision of the CA, he raised it to the SC.
ISSUE:
Whether or not this involved a n intra-corporate controversy.
RULING:
No.
The Supreme Court held that the mere fact that an employee was a stockholder and an officer at the time
he was illegally dismissed will not necessarily make the case an intra-corporate dispute.
The Supreme Court reversed the CA and explained the definition of corporate officers for the purpose of
identifying an intra-corporate controversy. Citing Garcia v. Eastern Telecommunications Philippines Inc. (G.R. No.
173115, April 16, 2009), the Court said that corporate officers, in the context of PD 902-A, are those officers of the
corporation who are given that character by the Corporation Code or by the corporation‘s by-laws. The Court
further held that an ―office‖ is created by the charter of the corporation and the officer is elected by the directors
and stockholders of the corporation.
The Court explained that two circumstances must concur in order for an individual to be considered a
corporate officer, namely: (1) the creation of the position is under the corporation‘s by-laws; and (2) the election of
the officer is by the directors or stockholders. It is only when the officer claiming to have been illegally dismissed is
classified as such corporate officer that the issue is deemed an intra-corporate dispute which falls within the
jurisdiction of the trial courts.
Broadcom failed to sufficiently establish that the position of AVP for Sales was created by virtue of an act
of its board of directors, and that Cosare was specifically elected or appointed to such position by the directors.
Considering that the dispute particularly relates to Cosare‘s rights and obligations as a regular officer of Broadcom,
instead of a stockholder of the corporation, the controversy cannot be deemed intra-corporate, the Court
concluded
Amecos Innovations, Inc. vs Lopez

GR No. 178055, July 2, 2014
Facts:
Petitioner Amecos Innovations, Inc. (Amecos) is a corporation duly incorporated under Philippine laws
engaged in the business of selling assorted products created by its President and herein co-petitioner, Antonio F.
Mateo (Mateo). On May 30, 2003, Amecos received a Subpoena from the Office of the City Prosecutor of Quezon
City in connection with a complaint filed by the Social Security System (SSS) for alleged delinquency in the
remittance of SSS contributions and penalty liabilities in violation of Section 22(a) and 22(d) in relation to Section
28(e) of the SSS law, as amended.
By way of explanation, Amecos attributed its failure to remit the SSS contributions to herein respondent
Eliza R. Lopez (respondent). Amecos claimed that it hired respondent on January 15, 2001 as Marketing Assistant
to promote its products; that upon hiring, respondent refused to provide Amecos with her SSS Number and to be
deducted her contributions; that on the basis of the foregoing, Amecos no longer enrolled respondent with the SSS
and did not deduct her corresponding contributions up to the time of her termination in February 2002.
Amecos eventually settled its obligations with the SSS; consequently, SSS filed a Motion to Withdraw
Complaint which was approved by the Office of the City Prosecutor.
Thereafter, petitioners sent a demand letter to respondent for P27,791.65 representing her share in the
SSS contributions and expenses for processing, but to no avail. Thus, petitioners filed the instant Complaint for
sum of money and damages against respondent docketed as Civil Case No. 04-27802 and raffled to Branch 51 of
the Metropolitan Trial Court (MeTC) of Caloocan City. Petitioners claimed that because of respondent‘s
misrepresentation, they suffered actual damages in the amount of P27,791.65 allegedly incurred by Amecos by
way of settlement and payment of its obligations with the SSS. Mateo also allegedly suffered extreme
embarrassment and besmirched reputation as a result of the filing of the complaint by the SSS. Hence they prayed
for P50,000.00 as moral damages, P50,000.00 as exemplary damages, P50,000.00 as attorney‘s fees, and costs of
the suit.
Respondent filed her Answer with Motion to Dismiss claiming that she was formerly an employee of
Amecos until her illegal dismissal in February 2002; that Amecos deliberately failed to deduct and remit her SSS
contributions; and that petitioners filed the instant Complaint in retaliation to her filing of an illegal dismissal case.
Respondent also averred that the regular courts do not have jurisdiction over the instant case as it arose out of
their employer-employee relationship.
MeTC ruled that it has no jurisdiction over the case since it arises from employer-employee relationship and
hereby dismiss the complaint because the jurisdiction belongs to the labor Arbiter. The RTC and CA affirmed MeTC
ruling.
Issue:
Whether or not regular court has jurisdiction over the refund of SSS contributions.
Held:
The regular court has no jurisdiction over the refund of SSS contributions but to the Labor Arbiter.
This Court holds that as between the parties, Article 217(a)(4) of the Labor Code is applicable. Said
provision bestows upon the Labor Arbiter original and exclusive jurisdiction over claims for damages arising from
employer-employee relations. The observation that the matter of SSS contributions necessarily flowed from the
employer-employee relationship between the parties – shared by the lower courts and the CA – is correct; thus,
petitioners‘ claims should have been referred to the labor tribunals. In this connection, it is noteworthy to state that
"the Labor Arbiter has jurisdiction to award not only the reliefs provided by labor laws, but also damages governed
by the Civil Code."
At the same time, it cannot be assumed that since the dispute concerns the payment of SSS premiums,
petitioners‘ claim should be referred to the Social Security Commission (SSC) pursuant to Republic Act No. 1161, as
amended by Republic Act No. 8282. As far as SSS is concerned, there is no longer a dispute with respect to
petitioners‘ accountability to the System; petitioners already settled their pecuniary obligations to it. Since there is
no longer any dispute regarding coverage, benefits, contributions and penalties to speak of, the SSC need not be
unnecessarily dragged into the picture. Besides, it cannot be made to act as a collecting agency for petitioners‘
claims against the respondent; the Social Security Law should not be so interpreted, lest the SSC be swamped with
cases of this sort.
Given the above facts, it is thus clear that petitioners have no cause of action against the respondent in
Civil Case No. 04-27802. Since Amecos did not remit respondent‘s full SSS contributions, the latter was never
covered by and protected under the System. If she was never covered by the System, certainly there is no sense in
making her answerable for the required contributions during the period of her employment. And it follows as a
matter of consequence that claims for other damages founded on the foregoing non-existent cause of action
should likewise fail.
INDOPHIL TEXTILE MILLS INC. VS. ENGR. ADVIENTO

GR No. 171212, August 4, 2014
FACTS:
Petitioner Indophil Textile Mills, Inc. is a domestic corporation engaged in the business of manufacturing
thread for weaving. On August 21, 1990, petitioner hired respondent Engr. Salvador Adviento as Civil Engineer to
maintain its facilities in Lambakin, Marilao, Bulacan. On August 7, 2002, respondent consulted a physician due to
recurring weakness and dizziness. Few days later, he was diagnosed with Chronic Poly Sinusitis, and thereafter,
with moderate, severe and persistent Allergic Rhinitis. Accordingly, respondent was advised by his doctor to totally
avoid house dust mite and textile dust as it will transmute into health problems.
Distressed, respondent filed a complaint against petitioner with the National Labor Relations Commission
(NLRC), San Fernando, Pampanga, for alleged illegal dismissal and for the payment of back wages, separation pay,
actual damages and attorney‘s fees. The said case, docketed as NLRC Case No. RAB-III-05-5834-03, is still pending
resolution with the NLRC at the time the instant petition was filed.
Subsequently, respondent filed another Complaint with the Regional Trial Court (RTC) of Aparri, Cagayan,
alleging that he contracted such occupational disease by reason of the gross negligence of petitioner to provide
him with a safe, healthy and workable environment. In his Complaint, respondent alleged that as part of his job
description, he conducts regular maintenance check on petitioner‘s facilities including its dye house area, which is
very hot and emits foul chemical odor with no adequate safety measures introduced by petitioner. According to
respondent, the air washer dampers and all roof exhaust vests are blown into open air, carrying dust
thereto. Concerned, respondent recommended to management to place roof insulation to minimize, if not,
eradicate the health hazards attendant in the work place. However, said recommendation was turned down by
management due to high cost. Respondent further suggested to petitioner‘s management that the engineering
office be relocated because ofits dent prone location, such that even if the door of the office is sealed, accumulated
dust creeps in outside the office. This was further aggravated by the installation of new filters fronting the office.
However, no action was taken by management. According to respondent, these health hazards have been the
persistent complaints of most, if not all, workers of petitioner. Nevertheless, said complaints fell on deaf ears as
petitioner callously ignored the health problems of its workers and even tended to be apathetic to their plight,
including respondent.
ISSUE:
Whether or not the RTC has jurisdiction over the subject matter of respondent‘s complaint praying for
moral damages, exemplary damages, compensatory damages, anchored on petitioner‘s alleged gross negligence in
failing to provide a safe and healthy working environment for respondent.
RULING:
While we have upheld the present trend to refer worker-employer controversies to labor courts in light of
the aforequoted provision, we have also recognized that not all claims involving employees can be resolved solely
by our labor courts, specifically when the law provides otherwise. For this reason, we have formulated the
"reasonable causal connection rule," wherein if there is a reasonable causal connection between the claim asserted
and the employer-employee relations, then the case is within the jurisdiction of the labor courts; and in the
absence thereof, it is the regular courts that have jurisdiction. Such distinction is apt since it cannot be presumed
that money claims of workers which do not arise out of or in connection with their employer-employee relationship,
and which would therefore fall within the general jurisdiction of the regular courts of justice, were intended by the
legislative authority to be taken away from the jurisdiction of the courts and lodged with Labor Arbiters on an
exclusive basis.
It is obvious from the complaint that the plaintiffs have not alleged any unfair labor practice. Theirs is a
simple action for damages for tortious acts allegedly committed by the defendants. Such being the case, the
governing statute is the Civil Code and not the Labor Code. It results that the orders under revieware based on a
wrong premise.
Upon the facts and issues involved, jurisdiction over the present controversy must be held to belong to the
civil Courts. While seemingly petitioner's claim for damages arises from employer-employee relations, and the latest
amendment to Article 217 of the Labor Code under PD No. 1691 and BP Blg. 130 provides that all other claims
arising from employer-employee relationship are cognizable by Labor Arbiters [citation omitted], in essence,
petitioner's claim for damages is grounded on the "wanton failure and refusal" without just cause of private
respondent Cruz to report for duty despite repeated notices served upon him of the disapproval of his application
for leave of absence without pay. This, coupled with the further averment that Cruz "maliciously and with bad
faith" violated the terms and conditions of the conversion training course agreement to the damage of petitioner
removes the present controversy from the coverage of the Labor Code and brings it within the purview of Civil
Law.
As it is, petitioner does not ask for any relief under the Labor Code. It merely seeks to recover damages
based on the parties' contract of employment as redress for respondent's breach thereof. Such cause of action is
within the realm of Civil Law, and jurisdiction over the controversy belongs to the regular courts. More so must this
be in the present case, what with the reality that the stipulation refers to the post-employment relations of the
parties.
Where the resolution of the dispute requires expertise, not in labor management relations nor in wage
structures and other terms and conditions of employment, but rather in the application of the general civil law,
such claim falls outside the area of competence of expertise ordinarily ascribed to the LA and the NLRC.
HONDA CARS PHILIPPINES, INC. VS. HONDA CARS TECHNICAL SPECIALIST AND SUPERVISORS
UNION
G.R. No. 204142, November 19, 2014
FACTS:
 Petitioner and respondent entered into a CBA.
 Prior to the execution of the CBA, the union members were receiving transportation allowance per month.
 On 2005, they entered into a MOA converting the transportation allowance into a monthly gasoline
allowance for official business purposes and travel from home to office.
 Claiming that the gasoline allowance is similar to the company policy for managers and assistant vice-
presidents the company deducted from union members withholding tax corresponding to the conversion to
cash of their unused gasoline allowance, since the company considered it as part of compensation subject
to income tax.
 The union on the other hand claimed that the gasoline allowance is a ―negotiated item‖ under the new CBA
on fringe benefits, thus it resulted to a grievance which was not resolved by the CBA grievance procedure.
 They submitted the issue to a panel of voluntary arbitrators.
 Voluntary Arbitrators then rendered a decision declaring that the cash conversion of the unused gasoline
allowance is a fringe benefit subject to the fringe benefit tax.
 CA denied the appeal and affirmed with modification the Voluntary Arbitrators‘ decision.
 The company elevated the case to the Supreme Court.
ISSUE:
Whether or not the union has a cause of action for refund to tax withheld by the company on the cash
conversion of the unused portion of the gasoline allowance of its members.
RULING:
Petition partly granted.
 The Voluntary Arbitrator has no jurisdiction to settle tax matters.
 The Labor Code vests the Voluntary Arbitrator original and exclusive jurisdiction to hear and decide all
unresolved grievances arising from the interpretation or implementation of the Collective Bargaining
Agreement and those arising from the interpretation or enforcement of company personnel policies.
 The Voluntary Arbitrator‘s jurisdiction is limited to labor disputes.
 The Voluntary Arbitrator has no competence to rule on the taxability of the gas allowance and on the
propriety of the withholding of tax. These issues are clearly tax matters, and do not involve labor disputes.
 The company and the union cannot agree or compromise on the taxability of the gas allowance. Taxation
is the State‘s inherent power; its imposition cannot be subject to the will of the parties.
 The union has no cause of action against the company.
 The company merely performed its statutory duty to withhold tax based on its interpretation of the NIRC.
 If the BIR illegally or erroneously collected tax, the recourse of the taxpayer, and in proper cases, the
withholding agent, is against the BIR, and not against the withholding agent.
Montero vs. Times Transportation

GR No. 1980828, March 16, 2015
Facts:
The sale of 25 buses of TTCI, as well as the Certificates of Public Convenience for the operation of the buses,
were likewise approved and subsequently transferred to respondent Mencorp Transport Systems, Inc., (MENCORP)
by virtue of a Deed of Sale dated December 12, 1997. Thereafter, several union members received notices that
they were being retrenched effective 30 days from September 16, 1997.
For a second time, on October 17, 1997, TEU declared a strike against TTCI, but the latter merely reiterated
the earlier return-to-work order of the Labor Secretary. For disregarding the said return-to-work order, Santiago
issued two notices of termination dated October 26, 1997 terminating some 106 workers and a revised list dated
November 24, 1997 increasing the number of dismissed employees to 119, for participating in the illegal strike.
On December 4, 1997, Santiago served to the Department of Labor and Employment Regional Office I a notice
that TTCI would be closing its operations due to heavy business losses.
On May 14, 1998, petitioners Estrañero, Pajarillo, Padre, Avila, Avila, Jr., Tupasi, Cuenta, Dulay, Yago, and
Aganon filed several complaints against TTCI and MENCORP before the NLRC. The complaints were thereafter
consolidated under the case entitled ―Malana v. TTCI‖ docketed as NLRC RAB-I-01-1007. However, this case was
withdrawn on March 4, 1999 upon motion by the TEU‘s counsel which was given due course on March 22, 1999.
Four years later, several complaints for unfair labor practice, illegal dismissal with money claims, damages and
attorney‘s fees were filed against TTCI, Santiago, MENCORP and its General Manager Virginia Mendoza, including
the latter‘s husband Reynaldo Mendoza (collectively called the respondents), before the LA from June to July 2002.
Accordingly, these complaints were consolidated.
In response, TTCI asserted that the petitioners‘ cause of action had already been barred by prescription
because the complaints were filed only in June 2002 or after almost five years from the date of their dismissal.
MENCORP, on the other hand, raised the defense of lack of employer-employee relationship since it never engaged
the services of the petitioners when TTCI sold to them its buses and the Certificates of Public Convenience.
Issue:
Whether or not the petitioners‘ complaints for illegal dismissal have already prescribed.
Ruling:
The petition is bereft of merit.
Settled is the rule that when one is arbitrarily and unjustly deprived of his job or means of livelihood, the action
instituted to contest the legality of one‘s dismissal from employment constitutes, in essence, an action predicated
upon an injury to the rights of the plaintiff, as contemplated under Article 1146 of the New Civil Code, which must
be brought within four years.
A prudent review of the antecedents of the claim reveals that it has in fact prescribed due to the petitioners‘
withdrawal of their labor case docketed as NLRC RAB-I-01-1007. Hence, while the filing of the said case could have
interrupted the running of the four-year prescriptive period, the voluntary withdrawal of the petitioners effectively
cancelled the tolling of the prescriptive period within which to file their illegal dismissal case, leaving them in
exactly the same position as though no labor case had been filed at all. The running of the four-year prescriptive
period not having been interrupted by the filing of NLRC RAB-I-01-1007, the petitioners‘ cause of action had
already prescribed in four years after their cessation of employment on October 26, 1997 and November 24, 1997.
Consequently, when the petitioners filed their complaint for illegal dismissal, separation pay, retirement benefits,
and damages in 2002, their claim, clearly, had already been barred by prescription.
Sadly, the petitioners have no one but themselves to blame for their own predicament. By their own allegations
in their respective complaints, they have barred their remedy and extinguished their right of action. Although the
Constitution is committed to the policy of social justice and the protection of the working class, it does not
necessary follow that every labor dispute will be automatically decided in favor of labor. The management also has
its own rights. Out of concern for the less privileged in life, this Court, has more often than not inclined, to uphold
the cause of the worker in his conflict with the employer. Such leaning, however, does not blind the Court to the
rule that justice is in every case for the deserving, to be dispensed in the light of the established facts and
applicable law and doctrine.
NLRC RULES OF PROCEDURE
ISLRIZ TRADING/LU VS. CAPADE

G.R. No. 168501; January 31, 2011
Facts:
Respondents were employees of Islriz Trading, a gravel and sand business owned and operated by
petitioner Victor Hugo Lu. Claiming that they were illegally dismissed, respondents filed a Complaint for illegal
dismissal and non-payment of overtime pay, holiday pay, rest day pay, allowances and separation pay against
petitioner. On his part, petitioner imputed abandonment of work against respondents.
The Labor Arbiter rendered judgment declaring Islriz Trading guilty of illegal dismissal and ordered the
latter to reinstate the respondents and for payment of backwages until actual reinstatement. Upon appeal, the
NLRC set aside the Decision of Labor Arbiter. Finding that respondents‘ failure to continue working for petitioner
was neither caused by termination nor abandonment of work, the NLRC ordered respondents‘ reinstatement but
without backwages. However, pending appeal, respondents moved for the execution of the reinstatement aspect
of the Labor Arbiter‘s decision. However, until the issuance of the NLRC Resolution overturning Labor Arbiter Gan‘s
decision, petitioner still failed to reinstate respondents or effect payroll reinstatement. This prompted respondents
to apply for a Writ of Execution to enforce the monetary award. A Writ of Execution was issued by Labor Arbiter
Castillon. The proceedings thereafter were likewise upheld by the CA.
Issue:
Whether respondents may collect their wages during the period between the Labor Arbiter‘s order of
reinstatement pending appeal and the NLRC Resolution overturning that of the Labor Arbiter.
Held:
The petition is not meritorious.
Petitioner contends that the CA‘s act in upholding the issuance of the questioned Writ of Execution for the
enforcement of respondents‘ accrued salaries, said Decision and Resolution, in effect, altered the NLRC Resolution
which only decreed respondents‘ reinstatement without backwages.
Paragraph 3 of Article 223 of the Labor Code reads:
‗In any event, the decision of the Labor Arbiter reinstating a dismissed or separated employee, insofar as
the reinstatement aspect is concerned, shall immediately be executory, pending appeal. The employee shall either
be admitted back to work under the same terms and conditions prevailing prior to his dismissal or separation or, at
the option of the employer, merely reinstated in the payroll. The posting of a bond by the employer shall not stay
the execution for reinstatement provided herein.‘
Thus in several cases, it has maintained that even if the order of reinstatement of the Labor Arbiter is
reversed on appeal, it is obligatory on the part of the employer to reinstate and pay the wages of the dismissed
employee during the period of appeal until reversal by the higher court. On the other hand, if the employee has
been reinstated during the appeal period and such reinstatement order is reversed with finality, the employee is not
required to reimburse whatever salary he received for he is entitled to such, more so if he actually rendered
services during the period. In other words, a dismissed employee whose case was favorably decided by the Labor
Arbiter is entitled to receive wages pending appeal upon reinstatement, which is immediately executory. Unless
there is a restraining order, it is ministerial upon the Labor Arbiter to implement the order of reinstatement and it is
mandatory on the employer to comply therewith.
To come up with the answer to the present issue, we shall apply the two-fold test used in Garcia. Was
there an actual delay or was the order of reinstatement pending appeal executed prior to its reversal? As can be
recalled, until the issuance of the September 5, 2002 NLRC Resolution overturning Labor Arbiter Gan‘s Decision,
petitioner still failed to reinstate respondents or effect payroll reinstatement in accordance with Article 223 of the
Labor Code. This was what actually prompted respondents to move for the issuance of a computation of the award
of backwages and Alias Writ of Execution for its enforcement. It cannot therefore be denied that there was an
actual delay in the execution of the reinstatement aspect of the Decision of Labor Arbiter Gan prior to the issuance
of the NLRC Resolution overturning the same.
Now, the next question is: Was the delay not due to the employer‘s unjustified act or omission? Unlike in
Garcia where PAL, as the employer, was then under corporate rehabilitation, Islriz Trading here did not undergo
rehabilitation or was under any analogous situation which would justify petitioner‘s non-exercise of the options
provided under Article 223 of the Labor Code. Petitioner, without any satisfactory reason, failed to fulfill its
obligation and respondents remained to be not reinstated until the NLRC resolved petitioner‘s appeal. Evidently,
the delay in the execution of respondents‘ reinstatement was due to petitioner‘s unjustified refusal to effect the
same.
Hence, the conclusion is that respondents have the right to collect their accrued salaries during the period
between the Labor Arbiter‘s Decision ordering their reinstatement pending appeal and the NLRC Resolution
overturning the same because petitioner‘s failure to reinstate them either actually or through payroll was due to
petitioner‘s unjustified refusal to effect reinstatement. In order to enforce this, Labor Arbiter Castillon thus
correctly issued the Writ of Execution dated March 9, 2004 as well as the Order dated June 3, 2004 denying
petitioner‘s Motion to Quash Writ of Execution and granting respondents‘ Urgent Motion for Issuance of Break-Open
Order. Consequently, we find no error on the part of the CA in upholding these issuances and in dismissing the
petition for certiorari before it.
To clarify, respondents are entitled to their accrued salaries only from the time petitioner received a copy of
Labor Arbiter Gan‘s Decision declaring respondents‘ termination illegal and ordering their reinstatement up to the
date of the NLRC Resolution overturning that of the Labor Arbiter. This is because it is only during said period that
respondents are deemed to have been illegally dismissed and are entitled to reinstatement pursuant to Labor
Arbiter Gan‘s Decision which was the one in effect at that time. Beyond that period, the NLRC Resolution declaring
that there was no illegal dismissal is already the one prevailing. From such point, respondents‘ salaries did not
accrue not only because there is no more illegal dismissal to speak of but also because respondents have not yet
been actually reinstated and have not rendered services to petitioner.
PANLILIO ET AL. VS. RTC BR. 51, CITY OF MANILA;

G.R. No. 173846; February 2, 2011
Facts:
On October 15, 2004, Jose Marcel Panlilio, Erlinda Panlilio, Nicole Morris and Marlo Cristobal (petitioners),
as
corporate officers of Silahis International Hotel, Inc. (SIHI), filed with the Regional Trial Court (RTC) of Manila,
Branch 24, a petition for Suspension of Payments and Rehabilitation[4] in SEC Corp. Case No. 04-111180.
On October 18, 2004, the RTC of Manila, Branch 24, issued an Order staying all claims against SIHI upon
finding the petition sufficient in form and substance. At the time, however, of the filing of the petition for
rehabilitation, there were a number of criminal charges pending against petitioners in Branch 51 of the RTC of
Manila. These criminal charges were initiated by respondent Social Security System (SSS) and involved charges of
violations of Section 28 (h) of Republic Act 8282, or the Social Security Act of 1997 (SSS law), in relation to Article
315 (1) (b)of the Revised Penal Code, or Estafa. Consequently, petitioners filed with the RTC of Manila, Branch 51,
a Manifestation and Motion to Suspend Proceedings. Petitioners argued that the stay order issued by Branch 24
should also apply to the criminal charges pending in Branch 51. Petitioners, thus, prayed that Branch 51
suspend its proceedings until the petition for rehabilitation was finally resolved.
Branch 51 issued an Order denying petitioners‘ motion to suspend the proceedings. It ruled that the stay
order issued by Branch 24 did not cover criminal proceedings, to wit:
Xxxx
The Court shares the view of the private complainants and the SSS that the said stay order does not
include the prosecution of criminal offenses. Precisely, the law ―criminalizes‖ the non-remittance of SSS
contributions by an employer to protect the employees from unscrupulous employers. Clearly, in these
cases, public interest requires that the said criminal acts be immediately investigated and prosecuted for
the protection of society
Issue:
Whether or not the stay order issued by branch 24, regional trial court of manila, in
sec corp. Case no. 04-111180 covers also violation of sss law for non-remittance of premiums and violation of
[article] [3] 515 of the revised penal code.
Held:
Yes. Rosario is at fours with the case at bar. Petitioners are charged with violations of Section 28 (h) of the
SSS law, in relation to Article 315 (1) (b) of the Revised Penal Code, or Estafa. The SSS law clearly ―criminalizes‖
the non-remittance of SSS contributions by an employer to protect the employees from unscrupulous employers.
Therefore, public interest requires that the said criminal acts be immediately investigated and prosecuted for the
protection of society.
The rehabilitation of SIHI and the settlement of claims against the corporation is not a legal ground for the
extinction of petitioners‘ criminal liabilities. There is no reason why criminal proceedings should be suspended
during corporate rehabilitation, more so, since the prime purpose of the criminal action is to punish the offender in
order to deter him and others from committing the same or similar offense, to isolate him from society, reform and
rehabilitate him or, in general, to maintain social order. As correctly observed in Rosario, it would be absurd for one
who has engaged in criminal conduct could escape punishment by the mere filing of a petition for
rehabilitation by the corporation of which he is an officer.
The prosecution of the officers of the corporation has no bearing on the pending rehabilitation of the
corporation, especially since they are charged in their individual capacities. Such being the case, the purpose of the
law for the issuance of the stay order is not compromised, since the appointed rehabilitation receiver can still fully
discharge his functions as mandated by law. It bears to stress that the rehabilitation receiver is not charged to
defend the officers of the corporation. If there is anything that the rehabilitation receiver might be remotely
interested in is whether the court also rules that petitioners are civilly liable. Such a scenario, however, is not a
reason to suspend the criminal proceedings, because as aptly discussed in Rosario, should the court prosecuting
the officers of the corporation find that an award or indemnification is warranted, such award would fall under the
category of claims, the execution of which would be subject to the stay order issued by the rehabilitation court.
The penal sanctions as a consequence of violation of the SSS law, in relation to the revised penal code can
therefore be implemented if petitioners are found guilty after trial. However, any civil indemnity awarded as a
result of their conviction would be subject to the stay order issued by the rehabilitation court. Only to this extent
can the order of suspension be considered obligatory upon any court, tribunal, branch or body where there are
pending actions for claims against the distressed corporation.
ANDO VS. CAMPO

G.R. No. 184007; February 16, 2011
Facts:
Petitioner was the president of Premier Allied and Contracting Services, Inc. (PACSI), an independent labor
contractor. Respondents were hired by PACSI as haulers tasked to manually carry bags of sugar from the
warehouse of Victorias Milling Company and load them on trucks. The respondents were dismissed from
employment and thereafter, filed a case for illegal dismissal and some money claims with the NLRC. Labor Arbiter
promulgated a decision, ruling in respondents‘ favor.
Petitioner and PACSI appealed to the NLRC and the NLRC ruled that petitioner failed to perfect his appeal
because he did not pay the supersedeas bond. It also affirmed the Labor Arbiter‘s decision and upon finality of the
decision, respondents moved for its execution.
To answer for the monetary award, NLRC Acting Sheriff Romeo Pasustento issued a Notice of Sale on
Execution of Personal Property over the property in the name of ―Paquito V. Ando x x x married to Erlinda S.
Ando.‖
This prompted petitioner to file an action for prohibition and damages with prayer for the issuance of a
TRO before RTC claiming that the property belonged to him and his wife, not to the corporation, and, hence, could
not be subject of the execution sale. But the RTC issued an order denying the prayer for a TRO, holding that the
trial court had no jurisdiction to try and decide the case. The RTC ruled that, pursuant to the NLRC Manual on the
Execution of Judgment, petitioner‘s remedy was to file a third-party claim with the NLRC Sheriff.
Petitioner filed a petition for certiorari under Rule 65 before the CA contending that the RTC acted without
or in excess of jurisdiction or with grave abuse of discretion amounting to lack or excess of jurisdiction in issuing
the Order. The CA, however, affirmed the RTC Order in so far as it dismissed the complaint on the ground that it
had no jurisdiction over the case, and nullified all other pronouncements in the same Order. Petitioner moved for
reconsideration, but the motion was denied.
Held:
Regular courts have no jurisdiction to hear and decide questions which arise from and
are incidental to the enforcement of decisions, orders, or awards rendered in labor cases by appropriate officers
and tribunals of the Department of Labor and Employment. To hold otherwise is to sanction splitting of jurisdiction
which is obnoxious to the orderly administration of justice.
The NLRC Manual on the Execution of Judgment governs any question on the execution of a judgment of
that body(NLRC). The Rules of Court apply only by analogy or in a suppletory character.
NLRC Manual on the Execution of Judgment deals specifically with third-party claims in cases brought
before that body. It defines a third-party claim as one where a person, not a party to the case, asserts title to or
right to the possession of the property levied upon. It also sets out the procedure for the filing of a third-party
claim, to wit:
SECTION 2. Proceedings. — If property levied upon be claimed by any person other than the losing party
or his agent, such person shall make an affidavit of his title thereto or right to the possession thereof,
stating the grounds of such right or title and shall file the same with the sheriff and copies thereof served
upon the Labor Arbiter or proper officer issuing the writ and upon the prevailing party. Upon receipt of the
third party claim, all proceedings with respect to the execution of the property subject of the third party
claim shall automatically be suspended and the Labor Arbiter or proper officer issuing the writ shall conduct
a hearing with due notice to all parties concerned and resolve the validity of the claim within ten (10)
working days from receipt thereof and his decision is appealable to the Commission within ten (10)
working days from notice, and the Commission shall resolve the appeal within
same period.
There is no doubt in our mind that petitioner‘s complaint is a third- party claim within the cognizance of the
NLRC. Petitioner may indeed be considered a ―third party‖ in relation to the property subject of the execution vis-à-
vis the Labor Arbiter‘s decision. There is no question that the property belongs to petitioner and his wife, and not
to the corporation. It can be said that the property belongs to the conjugal partnership, not to petitioner alone.
Thus, the property belongs to a third party, i.e., the conjugal partnership. At the very least, the Court can consider
that petitioner‘s wife is a third party within contemplation of the law.
There is no denying that the present controversy arose from the complaint for illegal dismissal. The subject
matter of petitioner‘s complaint is the execution of the NLRC decision. Execution is an essential part of the
proceedings before the NLRC. Jurisdiction, once acquired, continues until the case is finally terminated, and there
can be no end to the controversy without the full and proper implementation of the commission‘s directives.
Further underscoring the RTC‘s lack of jurisdiction over petitioner‘s complaint is Article 254 of the Labor
Code, to wit:
ART. 254. INJUNCTION PROHIBITED. – No temporary or permanent injunction or restraining order in any
case involving or growing out of labor disputes shall be issued by any court or other entity, except as
otherwise provided in Articles 218 and 264 of this Code.
Moreover, the power of the NLRC, or the courts, to execute its judgment extends only to properties
unquestionably belonging to the judgment debtor alone. A sheriff, therefore, has no authority to attach the
property of any person except that of the judgment debtor. Likewise, there is no showing that the sheriff ever tried
to execute on the properties of the corporation. The TCT of the property bears out that, indeed, it belongs to
petitioner and his wife and the latter stands to lose the property subject of execution without ever being a
party to the case. This will be tantamount to deprivation of property without due process.
PFIZER, INC. VS. VELASCO

G.R. No. 177467; March 9, 2011
Facts:
Private respondent Geraldine L. Velasco was employed with petitioner PFIZER, INC. as Professional Health
Care Representative since 1 August 1992. Sometime in April 2003, Velasco had a medical work up for her high-risk
pregnancy and was subsequently advised bed rest which resulted in her extending her leave of absence. Velasco
filed her sick leave for the period from 26 March to 18 June 2003, her vacation leave from 19 June to 20 June
2003, and leave without pay from 23 June to 14 July 2003.
On 26 June 2003, while Velasco was still on leave, PFIZER through its Area Sales Manager, herein
petitioner Ferdinand Cortez, personally served Velasco a "Showcause Notice" dated 25 June 2003. Aside from
mentioning about an investigation on her possible violations of company work rules regarding "unauthorized deals
and/or discounts in money or samples and unauthorized withdrawal and/or pull-out of stocks" and instructing her
to submit her explanation on the matter within 48 hours from receipt of the same, the notice also advised her that
she was being placed under "preventive suspension" for 30 days .In response, Velasco sent a letter addressed to
Cortez dated 28 June 2003 denying the charges.
On 12 July 2003, Velasco received a "Second Show-cause Notice" informing her of additional developments
in their investigation. According to the notice, a certain Carlito Jomen executed an affidavit pointing to Velasco as
the one who transacted with a printing shop to print PFIZER discount coupons. Velasco sent a letter to PFIZER via
Aboitiz courier service asking for additional time to answer the second Show-cause Notice.
That same day, Velasco filed a complaint for illegal suspension with money claims before the Regional
Arbitration Branch. The following day, 17 July 2003, PFIZER sent her a letter inviting her to a disciplinary hearing to
be held on 22 July 2003. On 25 July 2003, Velasco received a "Third Show-cause Notice," together with copies of
the affidavits of two Branch Managers of Mercury Drug, asking her for her comment within 48 hours. Finally, on 29
July 2003, PFIZER informed Velasco of its "Management Decision" terminating her employment.
On 5 December 2003, the Labor Arbiter rendered its decision declaring the dismissal of Velasco illegal,
ordering her reinstatement with backwages and further awarding moral and exemplary damages with attorney‘s
fees. On appeal, the NLRC affirmed the same but deleted the award of moral and exemplary damages.
Undaunted, PFIZER filed with the Court of Appeals a special civil action for the issuance of a writ of
certiorariunder Rule 65 of the Rules of Court to annul and set aside the aforementioned NLRC issuances. In a
Decision dated November 23, 2005, the Court of Appeals upheld the validity of respondent‘s dismissal from
employment, the dispositive portion of which reads as follows:
IN VIEW WHEREOF, the dismissal of private respondent Geraldine Velasco is AFFIRMED, but petitioner
PFIZER, INC. is hereby ordered to pay her the wages to which she is entitled to from the time the
reinstatement order was issued until November 23, 2005, the date of promulgation of Our Decision.
Issue:
Whether or not the Court of Appeals committed a serious but reversible error when it ordered Pfizer to pay
Velasco wages from the date of the Labor Arbiter‘s decision ordering her reinstatement until November 23, 2005,
when the Court of Appeals rendered its decision declaring Velasco‘s dismissal valid.
Held:
The petition is without merit.
At the outset, we note that PFIZER‘s previous payment to respondent of the amount of P1,963,855.00
(representing her wages from December 5, 2003, or the date of the Labor Arbiter decision, until May 5, 2005) that
was successfully garnished under the Labor Arbiter‘s Writ of Execution dated May 26, 2005 cannot be considered in
its favor. Not only was this sum legally due to respondent under prevailing jurisprudence but also this circumstance
highlighted PFIZER‘s unreasonable delay in complying with the reinstatement order of the Labor Arbiter
As far back as 1997 in the seminal case of Pioneer Texturizing Corporation v. National Labor Relations
Commission, the Court held that an award or order of reinstatement is immediately self-executory without the need
for the issuance of a writ of execution in accordance with the third paragraph of Article 22322 of the Labor Code.
In that case, we discussed in length the rationale for that doctrine, to wit:
The provision of Article 223 is clear that an award [by the Labor Arbiter] for reinstatement shall be
immediately executory even pending appeal and the posting of a bond by the employer shall not stay the execution
for reinstatement. The legislative intent is quite obvious, i.e., to make an award of reinstatement immediately
enforceable, even pending appeal. To require the application for and issuance of a writ of execution as
prerequisites for the execution of a reinstatement award would certainly betray and run counter to the very object
and intent of Article 223, i.e., the immediate execution of a reinstatement order. The reason is simple. An
application for a writ of execution and its issuance could be delayed for numerous reasons. A mere continuance or
postponement of a scheduled hearing, for instance, or an inaction on the part of the Labor Arbiter or the NLRC
could easily delay the issuance of the writ thereby setting at naught the strict mandate and noble purpose
envisioned by Article 223. In other words, if the requirements of Article 224 [including the issuance of a writ of
execution] were to govern, as we so declared in Maranaw, then the executory nature of a reinstatement order or
award contemplated by Article 223 will be unduly circumscribed and rendered ineffectual. In enacting the law, the
legislature is presumed to have ordained a valid and sensible law, one which operates no further than may be
necessary to achieve its specific purpose. Statutes, as a rule, are to be construed in the light of the purpose to be
achieved and the evil sought to be prevented. x x x In introducing a new rule on the reinstatement aspect of a
labor decision under Republic Act No. 6715, Congress should not be considered to be indulging in mere semantic
exercise. x x x23 (Italics in the original; emphasis and underscoring supplied.)
In the case at bar, PFIZER did not immediately admit respondent back to work which, according to the law,
should have been done as soon as an order or award of reinstatement is handed down by the Labor Arbiter
without need for the issuance of a writ of execution. Thus, respondent was entitled to the wages paid to her under
the aforementioned writ of execution. At most, PFIZER‘s payment of the same can only be deemed partial
compliance/execution of the Court of Appeals Resolution dated October 23, 2006 and would not bar respondent
from being paid her wages from May 6, 2005 to November 23, 2005.
To reiterate, under Article 223 of the Labor Code, an employee entitled to reinstatement "shall either be
admitted back to work under the same terms and conditions prevailing prior to his dismissal or separation or, at
the option of the employer, merely reinstated in the payroll."
The view as maintained in a number of cases is that: x x x [E]ven if the order of reinstatement of the
Labor Arbiter is reversed on appeal, it is obligatory on the part of the employer to reinstate and pay the wages of
the dismissed employee during the period of appeal until reversal by the higher court. On the other hand, if the
employee has been reinstated during the appeal period and such reinstatement order is reversed with finality, the
employee is not required to reimburse whatever salary he received for he is entitled to such, more so if he actually
rendered services during the period.(Emphasis in the original; italics and underscoring supplied)
In other words, a dismissed employee whose case was favorably decided by the Labor Arbiter is entitled to
receive wages pending appeal upon reinstatement, which is immediately executory. Unless there is a restraining
order, it is ministerial upon the Labor Arbiter to implement the order of reinstatement and it is mandatory on the
employer to comply therewith.
SOCIAL SECURITY COMMISSION VS. RIZAL POULTRY ET AL.

G.R. No. 167050; June 1, 2011
Facts:
The instant case stemmed from a petition filed by Alberto Angeles (Angeles) before the Social Security
Commission (SSC) to compel respondents Rizal Poultry and Livestock Association, Inc. (Rizal Poultry) or BSD Agro
Industrial Development Corporation (BSD Agro) to remit to the Social Security System (SSS) all contributions due
for and in his behalf.
Angeles had earlier filed a complaint for illegal dismissal against BSD Agro and/or its owner, Benjamin San
Diego (San Diego). The Labor Arbiter initially found that Angeles was an employee and that he was illegally
dismissed. On appeal, however, the NLRC reversed the Labor Arbiter‘s Decision and held that no employer-
employee relationship existed between Angeles and respondents. The ruling was anchored on the finding that the
duties performed by Angeles, such as carpentry, plumbing, painting and electrical works, were not independent
and integral steps in the essential operations of the company, which is engaged in the poultry business. Angeles
elevated the case to the Court of Appeals via petition for certiorari. The appellate court affirmed the NLRC ruling
and upheld the absence of employer-employee relationship. Angeles moved for reconsideration but it was denied
by the Court of Appeals. No further appeal was undertaken, hence, an entry of judgment was made on 26 May
2001.
At any rate, the SSC did not take into consideration the decision of the NLRC. It denied respondents‘
motion to dismiss in an Order dated 19 February 2002. The SSC ratiocinated, thus:
Decisions of the NLRC and other tribunals on the issue of existence of employeremployee relationship
between parties are not binding on the Commission. At most, such finding has only a persuasive effect and does
not constitute res judicata as a ground for dismissal of an action pending before Us. While it is true that the parties
before the NLRC and in this case are the same, the issues and subject matter are entirely different. The labor case
is for illegal dismissal with demand for backwages and other monetary claims, while the present action is for
remittance of unpaid SS[S] contributions. In other words, although in both suits the respondents invoke lack of
employer-employee relationship, the same does not proceed from identical causes of action as one is for violation
of the Labor Code while the instant case is for violation of the SS[S] Law.
Respondents sought recourse before the Court of Appeals by way of a petition for certiorari. The Court of
Appeals reversed the rulings of the SSC and held that there is a common issue between the cases before the SSC
and in the NLRC; and it is whether there existed an employer-employee relationship between Angeles and
respondents. Thus, the case falls squarely under the principle of res judicata, particularly under the rule on
conclusiveness of judgment, as enunciated in Smith Bell and Co. v. Court of Appeals.
Issue:
WON the decision of the NLRC and the Court of Appeals, finding no employeremployee relationship,
constitutes res judicata as a rule on conclusiveness of judgment as to preclude the relitigation of the issue of
employer-employee relationship in a subsequent case filed before the petitioner.
Held:
The elements of res judicata are: (1) the judgment sought to bar the new action must be final; (2) the
decision must have been rendered by a court having jurisdiction over the subject matter and the parties; (3) the
disposition of the case must be a judgment on the merits; and (4) there must be as between the first and second
action, identity of parties, subject matter, and causes of action. Should identity of parties, subject matter, and
causes of action be shown in the two cases, then res judicata in its aspect as a "bar by prior judgment" would
apply. If as between the two cases, only identity of parties can be shown, but not identical causes of action, then
res judicata as "conclusiveness of judgment" applies.
Verily, the principle of res judicata in the mode of "conclusiveness of judgment" applies in this case. The
first element is present in this case. The NLRC ruling was affirmed by the Court of Appeals. It was a judicial
affirmation through a decision duly promulgated and rendered final and executory when no appeal was undertaken
within the reglementary period. The jurisdiction of the NLRC, which is a quasi-judicial body, was undisputed.
Neither can the jurisdiction of the Court of Appeals over the NLRC decision be the subject of a dispute. The NLRC
case was clearly decided on its merits; likewise on the merits was the affirmance of the NLRC by the Court of
Appeals.
With respect to the fourth element of identity of parties, we hold that there is substantial compliance.
The parties in SSC and NLRC cases are not strictly identical. Rizal Poultry was impleaded as additional
respondent in the SSC case. Jurisprudence however does not dictate absolute identity but only substantial identity.
There is substantial identity of parties when there is a community of interest between a party in the first case and
a party in the second case, even if the latter was not impleaded in the first case.
A case in point is Smith Bell and Co. v. Court of Appeals which, contrary to SSC, is apt and proper
reference. Smith Bell availed of the services of private respondents to transport cargoes from the pier to the
company's warehouse. Cases were filed against Smith Bell, one for illegal dismissal before the NLRC and the other
one with the SSC, to direct Smith Bell to report all private respondents to the SSS for coverage. While the SSC case
was pending before the Court of Appeals, Smith Bell presented the resolution of the Supreme Court in G.R. No. L
44620, which affirmed the NLRC, Secretary of Labor, and Court of Appeals‘ finding that no employeremployee
relationship existed between the parties, to constitute as bar to the SSC case. We granted the petition of Smith Bell
and ordered the dismissal of the case. We held that the controversy is squarely covered by the principle of res
judicata, particularly under the rule on "conclusiveness of judgment." Therefore, the judgment in G.R. No. L-44620
bars the SSC case, as the relief sought in the latter case is inextricably related to the ruling in G.R. No. L-44620 to
the effect that private respondents are not employees of Smith Bell.
BPI EMPLOYEES UNION – METRO MANILA VS. BANK OF THE PHIL. ISLANDS;
G.R No. 178699; September 21, 2011
Facts:
Petitioner Uy was a bank teller of the respondent BPI. She was separated from her
job allegedly because of insubordination, disrespect and absence without leave. She together with the Union, filed
a case for illegal dismissal against respondent in the Voluntary Arbitrator. The VA ruled in favour of her, ordering
the respondent to reinstate her and award full backwages. Both appealed to the CA which affirmed the VA‘s
decision with modifications. Still unsatisfied, Uy and the Union went to SC and alleged that BPI‘s remedy is not
a certiorari petition under Rule 65 of the Rules of Court but an appeal from judgments, final orders and resolutions
of voluntary arbitrators under Rule 43 of the Rules of Court. They also contended that BPI‘s petition is wanting in
substance.
Issue:
Whether or not BPI‘s remedy of certiorari petition under Rule 65 is proper
Held:
YES.
Section 1, Rule 41 of the Rules of Court explicitly provides that no appeal may be taken from an order of
execution, the remedy of an aggrieved party being an appropriate special civil action under Rule 65 of the Rules of
Court. Thus, BPI correctly availed of the remedy of certiorari under Rule 65 of the Rules of Court when it assailed
the December 6, 2005 order of execution of the Voluntary Arbitrator.
DUP SOUND PHILS. VS. CA

G.R. No. 168317; November 21, 2011
Facts:
Private respondent, Pial is an employee of herein petitioner DUP Sound Phils. (DUP); petitioner Tan is the
owner and manager of DUP. Pial was given the job of "mastering tape"; his main function was to adjust the sound
level and intensity of the music to be recorded as well as arrange the sequence of the songs to be recorded in the
cassette tapes. Pial got absent from work because he got sick. The following day when he was ready for work, he
was informed by the office secretary not to report for work until such time that they will advise him to do so. After
three weeks without receiving any notice, Pial again called up their office. This time the office secretary advised
him to look for another job because, per instruction of Tan, he is no longer allowed to work at DUP. Pial filed a
complaint for illegal dismissal and prayed for the payment of his unpaid service incentive leave pay, full backwages,
separation pay, moral and exemplary damages as well as attorney's fees.
Petitioners DUP and Tan denied the material allegations of Pial; that the latter failed to report for work
following an altercation with his supervisor the previous day and that Pial called up their office and informed the
office secretary that he will be going back to work on September 17, 2001. However, he failed to report for work
on the said date. Petitioners were subsequently surprised when they learned that Pial filed a complaint for illegal
dismissal against them; Pial was never dismissed, instead, it was his unilateral decision not to work at DUP
anymore.
The Labor Arbiter rendered a decision declaring Pial to have been illegally dismissed and ordering DUP and
Tan to reinstate him to his former position and pay him backwages, cost of living allowance, service incentive leave
pay and attorney's fees. On appeal, the NLRC modified the decision by deleting the award of backwages and
attorney's fees. The NLRC ruled that there was no illegal dismissal on the part of DUP and Tan, but neither was
there abandonment on the part of Pial. Pial then filed a special civil action for certiorari with the CA. The CA set
aside the decision of the NLRC and reinstated the decision of the LA.
Issue:
Whether or not Pial was illegally dismissed.
Held:
This Court cannot give credence to petitioners' claim that private respondent abandoned his job. Pial was
illegally dismissed.
The settled rule in labor cases is that the employer has the burden of proving that the employee was not
dismissed, or, if dismissed, that the dismissal was not illegal, and failure to discharge the same would mean that
the dismissal is not justified and, therefore, illegal. In the instant case, what betrays petitioners' claim that private
respondent was not dismissed from his employment but instead abandoned his job is their failure to prove that the
latter indeed stopped reporting for work without any justifiable cause or a valid leave of absence.
If private respondent indeed abandoned his job, petitioners should have afforded him due process by
serving him written notices, as well as a chance to explain his side, as required by law. It is settled that,
procedurally, if the dismissal is based on a just cause under Article 282 of the Labor Code, the employer must give
the employee two written notices and a hearing or opportunity to be heard if requested by the employee before
terminating the employment: a notice specifying the grounds for which dismissal is sought, a hearing or an
opportunity to be heard and, after hearing or opportunity to be heard, a notice of the decision to dismiss. Again,
petitioners failed to do these. Thus, the foregoing bolsters private respondent's claim that he did not
abandon his work but was, in fact, dismissed.
Neither may private respondent's refusal to report for work subsequent to the LA's issuance of an order for
his reinstatement be considered as another abandonment of his job. It is a settled rule that failure to report for
work after a notice to return to work has been served does not necessarily constitute abandonment. As defined
under established jurisprudence, abandonment is the deliberate and unjustified refusal of an employee to resume
his employment. It is a form of neglect of duty, hence, a just cause for termination of employment by the
employer. For a valid finding of abandonment, these two factors should be present: (1) the failure to report for
work or absence without valid or justifiable reason; and (2) a clear intention to sever employer-employee
relationship, with the second as the more determinative factor which is manifested by overt acts from which it may
be deduced that the employee has no more intention to work. The intent to discontinue the employment must be
shown by clear proof that it was deliberate and unjustified. In the instant case, private respondent claimed that his
subsequent refusal to report for work despite the Labor Arbiter's order for his reinstatement is due to the fact that
he was subsequently made to perform the job of a "bodegero" of which he is unfamiliar and which is totally
different from his previous task of "mastering tape." Moreover, he was assigned to a different workplace, which is a
warehouse, where he was isolated from all other employees. The Court notes that petitioners failed to refute the
foregoing claims of private respondent
Under the existing law, an employee who is unjustly dismissed from work shall be entitled to reinstatement
without loss of seniority rights. Article 279 of the Labor Code clearly provides that an employee who is dismissed
without just cause and without due process is entitled to backwages and reinstatement or payment of separation
pay in lieu thereof. Article 223 of the same Code also provides that an employee entitled to reinstatement shall
either be admitted back to work under the same terms and conditions prevailing prior to his dismissal or
separation, or, at the option of the employer, merely reinstated in the payroll. It is established in jurisprudence that
reinstatement means restoration to a state or condition from which one had been removed or separated. The
person reinstated assumes the position he had occupied prior to his dismissal. Reinstatement presupposes that the
previous position from which one had been removed still exists, or that there is an unfilled position which is
substantially equivalent or of similar nature as the one previously occupied by the employee.
This Court has ruled in many instances that reinstatement is no longer viable where, among others, the
relations between the employer and the employee have been so severely strained, that it is not in the best interest
of the parties, nor is it advisable or practical to order reinstatement, or where the employee decides not to be
reinstated. In the instant case, the resulting circumstances show that reinstatement would be impractical and
would hardly promote the best interest of the parties. Resentment and enmity between petitioners and private
respondent necessarily strained the relationship between them or even provoked antipathy and antagonism as
shown by the acts of the parties subsequent to the order of reinstatement. Besides, private respondent expressly
prayed for an award of separation pay in lieu of reinstatement from the very start of the proceedings before the
Labor Arbiter. By so doing, he forecloses reinstatement as a relief by implication. Where reinstatement is no longer
viable as an option, separation pay equivalent to one (1) month salary for every year of service should be awarded
as an alternative. This has been the consistent ruling in the award of separation pay to illegally dismissed
employees in lieu of reinstatement.
SARONA VS. NLRC

G.R. No. 185280; January 18, 2012
Facts:
Petitioner, a security guard in Sceptre since April 1976, was asked by Sceptre‘s operations manager on
June 2003, to submit a resignation letter as a requirement for an application in Royale and to fill up an employment
application form for the said company. He was then assigned at Highlight Metal Craft Inc. from July 29 to August
8, 2003 and was later transferred to Wide Wide World Express Inc. On September 2003, he was informed that his
assignment at WWWE Inc. was withdrawn because Royale has been allegedly replaced by another security agency
which he later discovered to be untrue. Nevertheless, he was once again assigned at Highlight Metal sometime in
September 2003 and when he reported at Royale‘s office on October 1, 2003, he was informed that he would no
longer be given any assignment as instructed by Sceptre‘s general manager. He thus filed a complaint for illegal
dismissal. The LA ruled in petitioner‘s favor as he found him illegally dismissed and was not convinced
by the respondent‘s claim on petitioner‘s abandonment. Respondents were ordered to pay backwages computed
from the day he was dismissed up to the promulgation of his decision on May 11, 2005.The LA also ordered for the
payment of separation pay but refused to pierce Royale‘s corporate veil.
Respondents appealed to the NLRC claiming that the LA acted with grave abuse of discretion upon ruling
on the illegal dismissal of petitioner. NLRC partially affirmed the LA‘s decision with regard to petitioner‘s illegal
dismissal and separation pay but modified the amount of backwages and limited it to only 3 months of his last
month salary reducing P95, 600 to P15, 600 since he worked for Royale for only 1 month and 3 days. Petitioner did
not appeal to LA but raised the validity of LA‘s findings on piercing Royale‘s corporate personality and computation
of his separation pay and such petition was dismissed by the NLRC. Petitioner elevated NLRC‘s decision to the CA
on a petition for certiorari, and the CA disagreed with the NLRC‘s decision of not proceeding to review the evidence
for determining if Royale is Sceptre‘s alter ego that would warrant the piercing of its corporate veil.
Issues:
1. Whether or not Royale‘s corporate fiction should be pierced for the purpose of compelling it to recognize
the petitioner‘s length of service with Sceptre and for holding it liable for the benefits that have accrued to
him arising from his employment with Sceptre; and
2. Whether or not petitioner‘s backwages should be limited to his salary for 3 months
Held:
The doctrine of piercing the corporate veil is applicable on alter ego cases, where a corporation is merely a
farce since it is a mere alter ego or business conduit of a person, or where the corporation is so organized and
controlled and its affairs are so conducted as to make it merely an instrumentality, agency, conduit or adjunct of
another corporation. The way on how petitioner was made to resign from Sceptre then later on made an employee
of Royale, reflects the use of the legal fiction of the separate corporate personality and is an implication of
continued employment. Royale is a continuation or successor or Sceptre since the employees of Sceptre and of
Royale are the same and said companies have the same principal place of business.
Because petitioner‘s rights were violated and his employer has not changed, he is entitled to separation
pay which must be computed from the time he was hired until the finality of this decision. Royale is also ordered to
pay him backwages from his dismissal on October 1, 2003 until the finality of this decision. However, the amount
already received by petitioner from the respondents shall be deducted. He is also awarded moral and exemplary
damages amounting to P 25, 000.00 each for his dismissal which was tainted with bad faith and fraud. Petition is
granted. CA‘s decision is reversed and set aside.
SALENGA ET AL. VS. CA

G.R. No. 174941; February 1, 2012
Facts:
President/Chief Executive Officer (CEO) Rufo Colayco issued an Order informing petitioner that, pursuant to
the decision of the board of directors of respondent CDC, the position of head executive assistant – the position
held by petitioner – was declared redundant. Petitioner filed a Complaint for illegal dismissal with a claim for
reinstatement and payment of back wages, benefits, and moral and exemplary damages against respondent CDC
and Colayco. Respondents, represented by the Office of the Government Corporate Counsel (OGCC), alleged that
the NLRC had no jurisdiction to entertain the case on the ground that petitioner was a corporate officer
and, thus, his dismissal was an intra-corporate matter falling properly within the jurisdiction of the Securities and
Exchange Commission (SEC). LA Darlucio rendered a Decision in favor of petitioner. From the decision, the OCGCC
filed an appeal with the National Labor Relations Commission (NLRC) via a Memorandum of Appeal verified and
certified by Hilana Timbol-Roman, the executive vice president of respondent CDC. The petitioner opposed the
appeal on the ground that the Memorandum of Appeal and Joint Affidavit were not accompanied by a board
resolution from respondent‘s board of directors authorizing either Timbol-Roman or Atty. Mallare, or both, to
pursue the case or to file the appeal on behalf of respondent.
Issue:
Whether or not the NLRC has jurisdiction to entertain the appeal.
Held:
NLRC has no jurisdiction to entertain the appeal. It is clear from the NLRC Rules of
Procedure that appeals must be verified and certified against forum-shopping by the parties-in-interest themselves.
A corporation can only exercise its powers and transact its business through its board of directors and through its
officers and agents when authorized by a board resolution or its bylaws. Absent the requisite board resolution,
neither Timbol-Roman nor Atty. Mallari, who signed the Memorandum of Appeal and Joint Affidavit of Declaration
allegedly on behalf of respondent corporation, may be considered as the ―appellant‖ and ―employer‖ referred to by
Rule VI, Sections 4 to 6 of the NLRC Rules of Procedure. The court cannot agree with the OGCC‘s attempt to
downplay this procedural flaw by claiming that, as the statutorily assigned counsel for GOCCs, it does not need
such authorization. In Constantino-David v. PangandamanGania, 456 Phil. 273, 294-298 (2003), the court
exhaustively explained why it was necessary for government agencies or instrumentalities to execute the
verification and the certification against forum-shopping through their duly authorized representatives. The purpose
of verification is to secure an assurance that the allegations in the pleading are true and correct and have been
filed in good faith. Unless equitable circumstances which are manifest from the record of a case prevail,
it therefore becomes necessary for the concerned government agency or its authorized representatives to certify
for non-forum shopping if only to be sure that no other similar case or incident is pending before any other court.
Anent the corporation‘s liability, the decision of the LA still stands. In the case at bar, respondents failed to
adduce any evidence showing that the position of Head Executive Assistant is superfluous. There is no evidence on
record to show that the position of Head Executive Assistant was abolished by the Board of Directors in its
meetings. Hence, the ground of redundancy is merely a device made by respondent Colayco in order to ease out
the complainant from the respondent corporation. Moreover, the complainant was not accorded his right to due
process prior to his termination. He was not given the opportunity to be heard and defend himself. However, the
court notes that with regards to respondent Colayco‘s solidary liability with the corporation, petitioner notably in
the case at hand, did not question the ruling made by NLRC in finding that respondent Colayco may not be held
solidarily responsible to him. As a result, it dropped him as a respondent. Based on the foregoing, all other
subsequent proceedings regarding the issue of petitioner‘s dismissal are null and void for having been conducted
without jurisdiction.
LOCKHEED DETECTIVE & WATCHMAN AGENCY VS. UNIVERSITY OF THE PHILS.

G.R No. 185918; April 18, 2012
Facts:
Petitioner entered into a contract for security services with respondent University of the Philippines and
they were both sued by several security guards in 1998 for payment of underpaid wages and other benefits. The
labor arbiter found the claims meritorious and held both petitioner and respondent solidarily liable as job contractor
and principal. Upon appeal by both, the decision was only modified by dismissing some claims (premium pay and
service incentive leave pay) for lack of basis but they were still held solidarily liable. An MR on this was also denied
by the NLRC. The NLRC decision became final and executor on 2002 and a writ of execution was issued but later
quashed by the LA on motion of UP due to the disputes regarding the amount of the award. But, such order
quashing the writ was reversed by the NLRC. UP moved to reconsider the NLRC resolution but it was upheld with
the modification that the satisfaction of the judgment award in favor of Lockheed will be only against the funds of
UP which are not identified as public funds. The order and resolution became final and an alias writ of execution
was issued. Pursuant to such order, a notice of garnishment was issued to PNB for the satisfaction of the award.
UP filed a motion to quash the writ of garnishment and argued that the funds are public in nature and are
earmarked for educational purposes. After 10 days from the receipt of the notice, PNB released the garnished
funds in favor of the NLRC.
UP filed a petition for certiorari before the CA on the garnishment order which was initially upheld by the
CA but upon reconsideration, it reversed itself and ruled in favor of UP after applying the principles in the NEA
case. Thus, Lockheed filed the petition before the SC.
Issue:
WON the money claim against UP, being a Government instrumentality, should have been coursed to the
COA first.
Held:
Yes.
This Court held that like in the NED case, UP is a juridical personality separate and distinct from the
government and has the capacity to sue and be sued and being such, it cannot evade execution, and its funds may
be subject to garnishment or levy. However, before execution may be had, a claim for payment of the judgment
award must first be filed with the COA. Under Commonwealth Act No. 327 as amended by Section 26 of P.D. No.
1445, it is the COA which has primary jurisdiction to examine, audit and settle "all debts and claims of any sort"
due from or owing the Government or any of its subdivisions, agencies and instrumentalities, including
government-owned or controlled corporations and their subsidiaries. With respect to money claims arising from the
implementation of Republic Act No. 6758, their allowance or disallowance is for COA to decide, subject only to the
remedy of appeal by petition for certiorari to this Court. As to the fait accompli argument of Lockheed, contrary to
its claim that there is nothing that can be done since the funds of UP had already been garnished, since the
garnishment was erroneously carried out and did not go through the proper procedure (the filing of a claim with
the COA), UP is entitled to reimbursement of the garnished funds plus interest of 6% per annum, to be computed
from the time of judicial demand to be reckoned from the time UP filed a petition for certiorari before the CA
which occurred right after the withdrawal of the garnished funds from PNB. Petitioner Lockheed Detective and
Watchman Agency, Inc. was ordered to reimburse University of the Philippines the amount of P12,062,398.71 plus
interest of 6% per annum, to be computed from September 12, 2005 up to the finality of the decision,
and 12% interest on the entire amount from date of finality of the court‘s decision until fully paid.
3RD ALERT SECURITY AND DETECTIVE SERVICES, INC. VS. NAVIA

G.R. No. 200653; June 13, 2012
Facts:
Romualdo Navia filed an illegal dismissal complaint against 3rd Alert and the labor arbiter issued a decision
that Navia's dismissal was illegal. 3rd Alert appealed to the NLRC which affirmed the ruling of the labor arbiter and
later on, it issued an Entry of Judgment certifying that the NLRC resolution has become final and executory. The
labor arbiter issued a writ of execution to enforce the recomputed monetary awards upon Navia‘s motion.
3rd Alert appealed the recomputed amount and alleged that the writ was issued with grave abuse of
discretion since there was already a notice of reinstatement sent to Navia. The NLRC dismissed the appeal, ruling
that 3rd Alert is guilty of bad faith since there was no earnest effort to reinstate Navia and that there was no notice
or reinstatement sent to Navia's counsel. A motion for reconsideration was filed, but it was likewise denied.
3rd Alert filed a petition for certiorari with the CA which found the petition without merit because Navia had
not been reinstated either physically or in the payroll. The CA also denied the motion for reconsideration filed by
3rd Alert; hence, this petition.
Issue:
Whether or not, the CA erred in ruling that the NLRC did not commit any grave abuse of discretion.
Held:
No. CA did not erred in ruling that the NLRC did not commit any grave abuse of discretion Article 223 of
the Labor Code provides that in case there is an order of reinstatement, the employer must admit the dismissed
employee under the same terms and conditions, or merely reinstate the employee in the payroll. The order shall be
immediately executory. Thus, 3rd Alert cannot escape liability by simply invoking that Navia did not report for work.
The law states that the employer must still reinstate the employee in the payroll. Where reinstatement is no longer
viable as an option, separation pay equivalent to one (1) month salary for every year of service could be awarded
as an alternative.
In the case at bar, 3rd Alert resorted to legal tactics to frustrate the execution of the labor arbiter's order;
for about four (4) years, it evaded the obligation to reinstate Navia. By so doing, 3rd Alert has made a mockery of
justice. We thus find it proper, under the circumstances, to impose treble costs against 3rd Alert for its utter
disregard to comply with the writ of execution. To reiterate, no indication exists showing that 3rd Alert exerted any
efforts to reinstate Navia; worse, 3rd Alert's lame excuse of having sent a notice of reinstatement to a certain
"Biznar" only compounded the intent to mislead the courts. Failure to adduce additional evidence, it was held that
indeed there was no earnest effort for 3rd alert to reinstate Navia. Thus, CA was correct in affirming the judgment
of the NLRC in this regard.
RADIO PHILIPPINES NETWORK, INC. VS. YAP

G.R No. 187713; August 1, 2012
Facts:
Petitioner RPN, represented by OGCC, is a government sequestered corporation, while petitioners Concio,
Linao, Barrameda and Angeles were the President, General Manager, Assistant General Manager for Finance, and
Human Resources Manager, respectively, of RPN who were impleaded and charged with indirect contempt, the
subject matter of the present petition. Respondents Yap, San Miguel, Dayon, Lemina and Baptista were employees
of RPN and former members of RPNEU, the bargaining agent of the rank-and-file employees of the said company.
RPN and RPNEU entered into a CBA with a union security clause providing that a member who has been
expelled from the union shall also be terminated from the company.
A conflict arose between the respondents and other members of RPNEU and recommended to the union's
board of directors the expulsion of the respondents from the union. On January 24, 2006, the union wrote to RPN
President Concio demanding the termination of the respondents' employment from the company. RPN notified the
respondents that their employment would be terminated whereupon the respondents filed with the Labor Arbiter
(LA) a complaint for illegal dismissal and non-payment of benefits.
The LA rendered a decision ordering the reinstatement of the respondents with payment of backwages and
full benefits and without loss of seniority rights after finding that the petitioners failed to establish the legal basis of
the termination of respondents' employment. The LA also directed the company to pay the respondents certain
aggregate monetary benefits.
The petitioner submitted a Manifestation and Compliance. Respondents alleging that there was no
compliance yet and that no notice was received, respondents filed with the LA a Manifestation and Urgent Motion
to Cite for Contempt.
The petitioners denied any liability, insisting that the respondents had been duly informed through a letter
of their payroll reinstatement. The petitioners explained that because of the intra-union dispute between the
respondents and the union leaders, they deemed it wise not to allow the respondents inside the company premises
to prevent any more untoward incidents, and to release their salaries only at the gate.This measure was for the
protection not only of respondents but also for the other employees of RPN as well. Unswayed by these
manifestations, the LA cited the petitioners for indirect contempt for committing disobedience to lawful order.
On appeal, the NLRC dismissed the same and it also denied the petitioners' motion for reconsideration.
The CA dismissed the petition for failure to attach copies of pertinent pleadings mentioned in the petition.
Issue:
Whether or not petitioner has fully complied with the decision of the labor arbiter.
Held:
GRANTED
The manner of reinstating a dismissed employee in the payroll generally involves an exercise
of management prerogative.
The general policy of labor law is to discourage interference with an employer's judgment in the conduct of
his business. Even as the law is solicitous of the welfare of the employees, it must also protect the right of an
employer to exercise what are clearly management prerogatives. As long as the company's exercise of judgment is
in good faith to advance its interest and not for the purpose of defeating or circumventing the rights of employees
under the laws or valid agreements, such exercise will be upheld. Neither does labor law authorize the substitution
of judgment of the employer in the conduct of his business, unless it is shown to be contrary to law, morals, or
public policy. The only condition is that the exercise of management prerogatives should not be done in bad faith
or with abuse of discretion. The circumstances of the present case have more than amply shown that the physical
restoration of the respondents to their former positions would be impractical and would hardly promote the best
interest of both parties. Respondents have accused the petitioners of being directly complicit in the plot to expel
them from the union and to terminate their employment, while petitioners have charged the respondents with
trying to sabotage the peace of the workplace in "furthering their dispute with the union." The resentment and
enmity between the parties have so strained their relationship and even provoked antipathy and antagonism, as
amply borne out by the physical clashes that had ensued every time the respondents attempted to enter the RPN
compound, that respondents' presence in the workplace will not only be distracting but even disruptive, to say the
least. Petitioners have substantially complied in good faith with the terms of payroll reinstatement.
The petitioners insist that the respondents were immediately reinstated, albeit in the payroll, in compliance
with the order of the LA, and their salaries have since been regularly paid without fail. And granting that there
were occasional delays, the petitioners assert that the respondents in their combative hostility toward the
petitioners were partly to blame for their recalcitrant demands as to the place and schedule of payment, and their
refusal to cooperate in the opening of their ATM accounts. All these clearly show that the petitioners have
substantially complied with the LA's Decision.
Petitioners are not guilty of indirect contempt.
Indirect contempt refers to contumacious or stubbornly disobedient acts perpetrated outside of the court
or tribunal, any abuse or any unlawful interference with the process or proceedings of a court not constituting
direct contempt; or any improper conduct tending directly or indirectly to impede, obstruct or degrade the
administration of justice. To be considered contemptuous, an act must be clearly contrary to or prohibited by the
order of the court or tribunal. A person cannot, for disobedience, be punished for contempt unless the act which is
forbidden or required to be done is clearly and exactly defined, so that there can be no reasonable doubt or
uncertainty as to what specific act or thing is forbidden or required. It is not denied that after the order of
reinstatement of the respondents, RPN forthwith restored them in its payroll without diminution of their benefits
and privileges, or loss of seniority rights. They retained their entitlement to the benefits under the CBA and there
was no sufficient basis for the charge of indirect contempt against the petitioners, and that the same was made
without due regard for their right to exercise their management prerogatives to preserve the viability of the
company and the harmony of the workplace.
GONZALES VS. SOLID CEMENT CORP.

G.R. No. 198423; October 23, 2012
Facts:
The current petition arose from the execution of the final and executory judgment in the parties' illegal
dismissal dispute. Since the LA found that an illegal dismissal took place, the company reinstated petitioner
Gonzales in the payroll.
In the meanwhile, the parties continued to pursue the original case on the merits. The case was appealed
to the NLRC and from there to the CA. The LA's ruling of illegal dismissal was largely left undisturbed in these
subsequent recourses. The original case eventually came to this Court. We denied the petition of respondent Solid
Cement Corporation for lack of merit. Our ruling became final and entry of judgment took place on July 12, 2005.
Soon after its finality, the original case was remanded to the LA for execution. The LA decision declared the
respondents guilty of illegal dismissal and ordered the reinstatement of Gonzales to his former position "with full
backwages and without loss of seniority rights and other benefits. Actual reinstatement and return to work
for Gonzales (who had been on payroll reinstatement since January 22, 2001) came on July 15, 2008.
When Gonzales moved for the issuance of an alias writ of execution on August 4, 2008, he included several
items as components in computing the amount of his backwages.
Acting on the motion, the LA added P57,900.00 as rice allowance and P14,675.00 as medical
reimbursement (with the company's apparent conformity), and excluded the rest of the items prayed for in the
motion, either because these items have been paid or that, based on the records of the case, Gonzales was not
entitled thereto. Under the LA's execution Gonzales was entitled to a total of P965,014.15.
The NLRC, in its decision modified the LA's execution order by including the following amounts as part of
the judgment award. This ruling increased Gonzales' entitlement to P2,805,698.04.
The CA set aside the NLRC's decision and reinstated the LA's order, prompting Gonzales to come to the
Court via a petition for review on certiorari.
From that point, only the implementation or execution of the final ruling remained to be done.
Issue:
Whether the CA was legally correct in finding that the NLRC acted outside its jurisdiction when it modified
the LA's execution order.
Held:
PARTIALLY GRANTED.
LA is DIRECTED to issue the appropriate writ of execution incorporating these additional awards.
Re-computation of awards during execution of an illegal dismissal decision
Gonzales was almost immediately reinstated pending appeal, although only by way of a payroll
reinstatement as allowed by law. Upon the finality of the decision on the appeal, Gonzales was actually reinstated.
Since Gonzales received his salary and benefit entitlements during his payroll reinstatement; the general concern in
the present case is more on the items that should be included in the award, part of which are the backwages.
The current petition only generally involves a determination of the scope of the awards that include the
backwages.
The components of the backwages
a. Salary and 13th month differential due after dismissal
The Court ruled that in computing backwages, salary increases from the time of dismissal until actual
reinstatement, and benefits not yet granted at the time of dismissal are excluded. Hence, we cannot fault the CA
for finding that the NLRC committed grave abuse of discretion in awarding the salary differential amounting to
P617,517.48 and the 13th month pay differentials amounting to P51,459.48 that accrued subsequent to Gonzales'
dismissal.
b. Legal interest of 12% on total judgment
Gonzales is entitled to 12% interest on the total unpaid judgment amount, from the time the Court's
decision (on the merits in the original case) became final. When the judgment of the court awarding a sum of
money becomes final and executory, the rate of legal interest shall be 12% per annum from such finality until its
satisfaction.
c. Additional backwages and 13th month pay
Even where the plaintiff must allege non-payment, the general rule is that the burden rests on the
defendant to prove payment, rather than on the plaintiff to prove nonpayment. Thus, even without proof of
nonpayment, the NLRC was right in requiring the payment of the 13th month pay and the salaries due after the
LA's decision until the illegally dismissed petitioner was reinstated in the payroll, i.e., from December 13, 2000 to
January 21, 2001. It follows that the CA was wrong when it concluded that the NLRC acted outside its jurisdiction
by including these monetary awards as items for execution.
These amounts are not excluded from the concept of backwages as the salaries fell due after Gonzales
should have been reinstated, while the 13th month pay fell due for the same period by legal mandate. These are
entitlements that cannot now be glossed over if the final decision on the merits in this case were to be respected.
MARTOS VS. NEW SAN JOSE BUILDERS

G.R. No. 192650; October 24, 2012
Facts:
Petitioner New San Jose Builders, Inc. is a domestic corporation duly organized and existing under the laws
of the Philippines and is engaged in the construction of road, bridges, buildings, and low cost houses primarily for
the government. One of the projects of petitioner is the San Jose Plains Project. SJPP, calls for the construction of
low cost housing, which are being turned over to the National Housing Authority to be awarded to deserving poor
families. Private respondents alleged that, on various dates, petitioner hired them on different positions.
Sometime in 2000, petitioner was constrained to slow down and suspend most of the works on the SJPP
project due to lack of funds of the National Housing Authority. Thus, the workers were informed that many of them
would be laid off and the rest would be reassigned to other projects.
Some who were retained and were issued new appointment papers to their respective assignments,
indicating therein that they are project employees. However, they refused to sign the appointment papers as
project employees and subsequently refused to continue to work.
On different dates, three (3) Complaints for Illegal Dismissal and for money claims were filed before the
NLRC against petitioner and Jose Acuzar, by private respondents who claimed to be the former employees of
petitioner. Petitioner denies that private respondents were illegally dismissed, and alleged that they were project
employees, whose employments were automatically terminated upon completion of the project for which they were
hired. On the other hand, private respondents claim that petitioner hired them as regular employees, continuously
and without interruption.
Ruling of the Labor Arbiter
As earlier stated, on May 23, 2003, the LA handed down a decision declaring, among others, that petitioner
Felix Martos (Martos) was illegally dismissed and entitled to separation pay, backwages and other monetary
benefits; and dismissing, without prejudice, the complaints/claims of the other complainants (petitioners).
Ruling of the NLRC
Both parties appealed the LA decision to the NLRC. Petitioners appealed that part which dismissed all the
complaints, without prejudice, except that of Martos. On the other hand, New San Jose Builders, Inc. (respondent)
appealed that part which held that Martos was its regular employee and that he was illegally dismissed. The NLRC
resolved the appeal by dismissing the one filed by respondent and partially granting that of the other petitioners.
Ruling of the CA
The CA stated that the factual circumstances of Martos' employment and his dismissal from work could not
equally apply to petitioners because they were not similarly situated. The NLRC did not even bother to look at the
evidence on record and inappropriately granted monetary awards to petitioners who had either denied
having filed a case or withdrawn the case against respondent. According to the CA, the position papers should have
covered only those claims and causes of action raised in the complaint excluding those that might have been
amicably settled.
With respect to Martos, the CA ruled that he was a regular employee of respondent and his termination
was illegal. It explained that Martos should have been considered a regular employee because there was no
indication that he was merely a project employee when he was hired.
Issue:
Whether or not Martos should be reinstated.
Held:
DENIED
The verification requirement is significant, as it is intended to secure an assurance that the allegations in
the pleading are true and correct and not the product of the imagination or a matter of speculation, and that the
pleading is filed in good faith. Verification is deemed substantially complied with when, as in this case, one who has
ample knowledge to swear to the truth of the allegations in the complaint or petition signs the verification, and
when matters alleged in the petition have been made in good faith or are true and correct. The absence of a
proper verification is cause to treat the pleading as unsigned and dismissible.
The lone signature of Martos would have been sufficient if he was authorized by his co-petitioners to sign
for them. Unfortunately, petitioners failed to adduce proof that he was so authorized.
The Court agrees with the CA that the dismissal of the other complaints were brought about by the own
negligence and passive attitude of the complainants themselves.
As to Martos, the Court agrees that the reinstatement being sought by him was no longer practicable
because of strained relation between the parties. Indeed, he can no longer question this fact. This issue was never
raised or taken up on appeal before the NLRC. It was only after he lost the appeal in the CA that he raised it. The
accepted doctrine is that separation pay may avail in lieu of reinstatement if reinstatement is no longer practical or
in the best interest of the parties. Separation pay in lieu of reinstatement may likewise be awarded if the employee
decides not to be reinstated.
Under the doctrine of strained relations, the payment of separation pay is considered an acceptable
alternative to reinstatement when the latter option is no longer desirable or viable. On one hand, such payment
liberates the employee from what could be a highly oppressive work environment. On the other hand, it releases
the employer from the grossly unpalatable obligation of maintaining in its employ a worker it could no longer trust.
Nacar vs. Gallery Frames

GR No. 189871, August 13, 2013
FACTS:
On October 15, 1998, the Labor Arbiter rendered a Decisionin favor of petitioner and found that he was
dismissed from employment without a valid or just cause. Thus, petitioner was awarded backwages and separation
pay in lieu of reinstatement in the amount ofP158,919.92.
Respondents appealed to the NLRC, but it was dismissed for lack of merit. Accordingly, the NLRC sustained
the decision of the Labor Arbiter. Respondents filed a motion for reconsideration, but it was denied. Dissatisfied,
respondents filed a Petition for Review on Certiorari before the CA but it was likewise denied. Respondents then
sought relief before the Supreme Court. Finding no reversible error on the part of the CA, this Court denied the
petition in the Resolution dated April 17, 2002.
An Entry of Judgment was later issued certifying that the resolution became final and executory on May 27,
2002. The case was, thereafter, referred back to the Labor Arbiter for execution. Petitioner filed a Motion for
Correct Computation, praying that his backwages be computed from the date of his dismissal on January 24, 1997
up to the finality of the Resolution of the Supreme Court on May 27, 2002. Upon recomputation, the Computation
and Examination Unit of the NLRC arrived at an updated amount in the sum ofP471,320.31.
Respondents filed a Motion to Quash Writ of Execution, arguing, among other things, that since the Labor
Arbiter awarded separation pay ofP62,986.56 and limited backwages ofP95,933.36, no more recomputation is
required to be made of the said awards. They claimed that after the decision becomes final and executory, the
same cannot be altered or amended anymore. LA denied the motion but the decision was reversed by the NLRC on
appeal.
Petitioner appealed to the CA but was denied, stating that since petitioner no longer appealed the October
15, 1998 Decision of the Labor Arbiter, which already became final and executory, a belated correction thereof is
no longer allowed. The CA stated that there is nothing left to be done except to enforce the said judgment.
Consequently, it can no longer be modified in any respect, except to correct clerical errors or mistakes. Thus,
petitioner filed this petition for review on certiorari.
ISSUE:
Whether or not a re-computation in the course of execution of the labor arbiter's original computation of
the awards made is legally proper.
HELD:
Yes.
Labor Law- computation of backwages
A source of misunderstanding in implementing the final decision in this case proceeds from the way the
original labor arbiter framed his decision. The decision consists essentially of two parts.
The first is that part of the decision that cannot now be disputed because it has been confirmed with
finality. This is the finding of the illegality of the dismissal and the awards of separation pay in lieu of
reinstatement, backwages, attorney's fees, and legal interests. The second part is the computation of the awards
made.
Clearly implied from this original computation is its currency up to the finality of the labor arbiter's decision.
As we noted above, this implication is apparent from the terms of the computation itself, and no question would
have arisen had the parties terminated the case and implemented the decision at that point.
However, the petitioner disagreed with the labor arbiter's findings on all counts - i.e., on the finding of
illegality as well as on all the consequent awards made. Hence, the petitioner appealed the case to the NLRC
which, in turn, affirmed the labor arbiter's decision. By law, the NLRC decision is final, reviewable only by the CA on
jurisdictional grounds.
The petitioner appropriately sought to nullify the NLRC decision on jurisdictional grounds through a timely
filed Rule 65 petition for certiorari. The CA decision, finding that NLRC exceeded its authority in affirming the
payment of 13th month pay and indemnity, lapsed to finality and was subsequently returned to the labor arbiter of
origin for execution.
It was at this point that the present case arose. Focusing on the core illegal dismissal portion of the original
labor arbiter's decision, the implementing labor arbiter ordered the award re-computed; he apparently read the
figures originally ordered to be paid to be the computation due had the case been terminated and implemented at
the labor arbiter's level. It was at this point that the present case arose. Focusing on the core illegal dismissal
portion of the original labor arbiter's decision, the implementing labor arbiter ordered the award re-computed; he
apparently read the figures originally ordered to be paid to be the computation due had the case been terminated
and implemented at the labor arbiter's level.
Thus, the labor arbiter re-computed the award to include the separation pay and the backwages due up to
the finality of the CA decision that fully terminated the case on the merits. Unfortunately, the labor arbiter's
approved computation went beyond the finality of the CA decision (July 29, 2003) and included as well the
payment for awards the final CA decision had deleted - specifically, the proportionate 13th month pay and the
indemnity awards. Hence, the CA issued the decision now questioned in the present petition.
We see no error in the CA decision confirming that a re-computation is necessary as it essentially
considered the labor arbiter's original decision in accordance with its basic component parts as we discussed above.
To reiterate, the first part contains the finding of illegality and its monetary consequences; the second part is the
computation of the awards or monetary consequences of the illegal dismissal, computed as of the time of the labor
arbiter's original decision.
By the nature of an illegal dismissal case, the reliefs continue to add up until full satisfaction, as expressed
under Article 279 of the Labor Code. The recomputation of the consequences of illegal dismissal upon execution of
the decision does not constitute an alteration or amendment of the final decision being implemented. The illegal
dismissal ruling stands; only the computation of monetary consequences of this dismissal is affected, and this is not
a violation of the principle of immutability of final judgments. That the amount respondents shall now pay has
greatly increased is a consequence that it cannot avoid as it is the risk that it ran when it continued to seek
recourses against the Labor Arbiter's decision.
CA Decision reversed and set aside.
McBurnie vs. Ganzon et al.

GR Nol. 178034 & 178117 & 186984-85, Oct. 17, 2013
Facts:
On October 4, 2002, McBurnie, an Australian national, instituted a complaint for illegal dismissal and other
monetary claims against the respondents. He claimed to have signed a 5-year employment agreement with the
company. He performed work for the company until sometime in November 1999, when he figured in an accident
that compelled him to go back to Australia. While in Australia, he was informed by respondent Ganzon that his
services were no longer needed because their intended project would no longer push through.
The respondents contend that their agreement with McBurnie was to jointly invest in and establish a
company for the management of the hotels. They did not intend to create an employer-employee relationship, and
the execution of the employment contract that was being invoked by McBurnie was solely for the purpose of
allowing McBurnie to obtain an alien work permit in the Philippines, and that McBurnie had not obtained a work
permit.
On September 30, 2004, the Labor Arbiter (LA) declared McBurnie as having been illegally dismissed from
employment.
The respondents filed their Memorandum of Appeal and Motion to Reduce Bond, and posted an appeal
bond in the amount of P100,000.00. They claimed that an award of more than P60 Million Pesos to a single
foreigner who had no work permit and who left the country for good one month after the purported
commencement of his employment was a patent nullity. On March 31, 2005, the NLRC denied the motion to reduce
bond explaining that in cases involving monetary award, an employer seeking to appeal the LA decision to the
Commission is unconditionally required by Art. 223, Labor Code to post bond equivalent to the monetary award.
Issues:
Sufficiency of the appeal bond that was posted by the respondents
Whether or not McBurnie was illegally dismissed.
Held:
Rule on Appeal Bonds.
While the CA, in this case, allowed an appeal bond to be reduced and then ordered the case remand to the
NLRC, this Court Decision dated September 18, 2009 provides otherwise, as it reads in part: While the bond may
be reduced upon motion by the employer, this is subject to the conditions that (1) the motion to reduce the bond
shall be based on meritorious grounds; and (2) a reasonable amount in relation to the monetary award is posted
by the appellant, otherwise the filing of the motion to reduce bond shall not stop the running of the period to
perfect an appeal (pursuant to Section 6, Rule VI of the 2011 NLRC Rules of Procedure).The qualification
effectively requires that unless the NLRC grants the reduction of the cash bond within the 10-day reglementary
period, the employer is still expected to post the cash or surety bond securing the full amount within the said 10-
day period.If the NLRC does eventually grant the motion for reduction after the reglementary period has elapsed,
the correct relief would be to reduce the cash or surety bond already posted by the employer within the 10-day
period.
To begin with, the Court rectifies its prior pronouncement the unqualified statement that even an appellant
who seeks a reduction of an appeal bond before the NLRC is expected to post a cash or surety bond securing the
full amount of the judgment award within the 10-day reglementary period to perfect the appeal.
Suspension of the period to perfect the appeal upon the filing of a motion to reduce bond.
The rule that the filing of a motion to reduce bond shall not stop the running of the period to perfect an
appeal is not absolute. The Court may relax the rule. In one case, the Court held: Jurisprudence tells us that in
labor cases, an appeal from a decision involving a monetary award may be perfected only upon the posting of cash
or surety bond.The Court, however, has relaxed this requirement under certain exceptional circumstances in order
to resolve controversies on their merits.These circumstances include: (1) fundamental consideration of substantial
justice; (2) prevention of miscarriage of justice or of unjust enrichment; and (3) special circumstances of the case
combined with its legal merits, and the amount and the issue involved.
A serious error of the NLRC was its outright denial of the motion to reduce the bond, without even
considering the respondent's arguments and totally unmindful of the rules and jurisprudence that allow the bond
reduction.Instead of resolving the motion to reduce the bond on its merits, the NLRC insisted on an amount that
was equivalent to the monetary award. When the respondents sought to reconsider, the NLRC still refused to fully
decide on the motion.It refused to at least make a preliminary determination of the merits of the appeal.
Allowance of the reduction of appeal bonds.
Guidelines that are applicable in the reduction of appeal bonds were also explained in Nicol v. Footjoy
Industrial Corporation. The bond requirement in appeals involving monetary awards has been and may be relaxed
in meritorious cases, including instances in which (1) there was substantial compliance with the Rules, (2)
surrounding facts and circumstances constitute meritorious grounds to reduce the bond, (3) a liberal interpretation
of the requirement of an appeal bond would serve the desired objective of resolving controversies on the merits, or
(4) the appellants, at the very least, exhibited their willingness and/or good faith by posting a partial bond during
the reglementary period.
To ensure that the provisions of Section 6, Rule VI of the NLRC Rules of Procedure that give parties the
chance to seek a reduction of the appeal bond are effectively carried out, without however defeating the benefits
of the bond requirement in favor of a winning litigant, all motions to reduce bond that are to be filed with the NLRC
shall be accompanied by the posting of a cash or surety bond equivalent to 10% of the monetary award that is
subject of the appeal, which shall provisionally be deemed the reasonable amount of the bond in the meantime
that an appellant motion is pending resolution by the Commission.In conformity with the NLRC Rules, the monetary
award, for the purpose of computing the necessary appeal bond, shall exclude damages and attorney fees. Only
after the posting of a bond in the required percentage shall an appellant period to perfect an appeal under the
NLRC Rules be deemed suspended.
The foregoing shall not be misconstrued to unduly hinder the NLRC exercise of its discretion, given that the
percentage of bond that is set by this guideline shall be merely provisional.
The appellant shall be given a period of 10 days from notice of the NLRC order within which to perfect the
appeal by posting the required appeal bond.
There was no employer-employee relationship so McBurnie could not successfully claim that he was
dismissed, much less illegally dismissed.
Considering that McBurnie, an Australian, alleged illegal dismissal and sought to claim under our labor
laws, it was necessary for him to establish, first and foremost, that he was qualified and duly authorized to obtain
employment within our jurisdiction.
A requirement for foreigners who intend to work within the country is an employment permit, as provided
under Article 40, Title II of the Labor Code. In one case, the Court held that a foreign national failure to seek an
employment permit prior to employment poses a serious problem in seeking relief from the Court.Clearly, this
circumstance on the failure of McBurnie to obtain an employment permit, by itself, necessitates the dismissal of his
labor complaint.
McBurnie failed to present any employment permit which would have authorized him to obtain employment
in the Philippines.This circumstance negates McBurnie claim that he had been performing work for the respondents
by virtue of an employer-employee relationship.The absence of the employment permit instead bolsters the claim
that the supposed employment of McBurnie was merely simulated, or did not ensue due to the non-fulfillment of
the conditions that were set forth in the letter of May 11, 1999.
McBurnie failed to present other competent evidence to prove his claim of an employer-employee
relationship. As previously observed by the NLRC, McBurnie even failed to show through any document such as
payslips or vouchers that his salaries during the time that he allegedly worked for the respondents were paid by
the company. In the absence of an employer-employee relationship between McBurnie and the respondents,
McBurnie could not successfully claim that he was dismissed, much less illegally dismissed, by the latter.Even
granting that there was such an employer-employee relationship, the records are barren of any document showing
that its termination was by the respondentsdismissal of McBurnie.
The motion for reconsideration filed on September 26, 2012 by petitioner Andrew James McBurnie is
DENIED. The complaint for illegal dismissal is DISMISSED.
LOON ET AL. VS. POWER MASTERS, INC.

G.R. No. 189404; December 11, 2013
Facts:
Respondents Power Master, Inc. and Tri-C General Services employed and assigned the petitioners as
janitors and leadsmen in various Philippine Long Distance Telephone Company (PLDT) offices in Metro Manila area.
Subsequently, the petitioners filed a complaint for money claims against Power Master, Inc., Tri-C General Services
and their officers, the spouses Homer and Carina Alumisin (collectively, the respondents). The petitioners alleged in
their complaint that they were not paid minimum wages, overtime, holiday, premium, service incentive leave, and
thirteenth month pays. They further averred that the respondents made them sign blank payroll sheets. On June
11, 2001, the petitioners amended their complaint and included illegal dismissal as their cause of action. They
claimed that the respondents relieved them from service in retaliation for the filing of their original complaint.
Notably, the respondents did not participate in the proceedings before the Labor Arbiter except on April 19, 2001
and May 21, 2001 when Mr. Romulo Pacia, Jr. appeared on the respondents' behalf. The respondents' counsel also
appeared in a preliminary mandatory conference on July 5, 2001. However, the respondents neither filed any
position paper nor proffered pieces of evidence in their defense despite their knowledge of the pendency of the
case.
In a decision dated March 15, 2002, Labor Arbiter (LA) Elias H. Salinas partially ruled in favor of the
petitioners. The LA awarded the petitioners salary differential, service incentive leave, and thirteenth month pays.
In awarding these claims, the LA stated that the burden of proving the payment of these money claims rests with
the employer. The LA also awarded attorney's fees in favor of the petitioners, pursuant to Article 111 of the Labor
Code.
However, the LA denied the petitioners' claims for backwages, overtime, holiday, and premium pays. The
LA observed that the petitioners failed to show that they rendered overtime work and worked on holidays and rest
days without compensation. The LA further concluded that the petitioners cannot be declared to have been
dismissed from employment because they did not show any notice of termination of employment. They were also
not barred from entering the respondents' premises.
Both parties appealed the LA's ruling with the National Labor Relations Commission. The petitioners
disputed the LA's denial of their claim for backwages, overtime, holiday and premium pays. Meanwhile, the
respondents questioned the LA's ruling on the ground that the LA did not acquire jurisdiction over their persons.
The respondents insisted that they were not personally served with summons and other processes. They
also claimed that they paid the petitioners minimum wages, service incentive leave and thirteenth month pays. As
proofs, they attached photocopied and computerized copies of payroll sheets to their memorandum on
appeal. They further maintained that the petitioners were validly dismissed. They argued that the petitioners'
repeated defiance to their transfer to different workplaces and their violations of the company rules and regulations
constituted serious misconduct and willful disobedience.
On January 3, 2003, the respondents filed an unverified supplemental appeal. They attached photocopied
and computerized copies of list of employees with automated teller machine (ATM) cards to the supplemental
appeal. This list also showed the amounts allegedly deposited in the employees' ATM cards. They also attached
documentary evidence showing that the petitioners were dismissed for cause and had been accorded due process.
On January 22, 2003, the petitioners filed an Urgent Manifestation and Motion where they asked for the
deletion of the supplemental appeal from the records because it allegedly suffered from infirmities. First, the
supplemental appeal was not verified. Second, it was belatedly filed six months from the filing of the respondents'
notice of appeal with memorandum on appeal. The petitioners pointed out that they only agreed to the
respondents' filing of a responsive pleading until December 18, 2002. Third, the attached documentary evidence on
the supplemental appeal bore the petitioners' forged signatures.
They reiterated these allegations in an Urgent Motion to Resolve Manifestation and Motion (To Expunge
from the Records Respondents' Supplemental Appeal, Reply and/or Rejoinder) dated January 31, 2003.
Subsequently, the petitioners filed an Urgent Manifestation with Reiterating Motion to Strike-Off the Record
Supplemental Appeal/Reply, Quitclaims and Spurious Documents Attached to Respondents' Appeal dated August 7,
2003. The petitioners argued in this last motion that the payrolls should not be given probative value because they
were the respondents' fabrications. They reiterated that the genuine payrolls bore their signatures, unlike the
respondents' photocopies of the payrolls. They also maintained that their signatures in the respondents' documents
(which showed their receipt of thirteenth month pay) had been forged.
In a resolution dated November 27, 2003, the NLRC partially ruled in favor of the respondents. The NLRC
affirmed the LA's awards of holiday pay and attorney's fees. It also maintained that the LA acquired jurisdiction
over the persons of the respondents through their voluntary appearance.
However, it allowed the respondents to submit pieces of evidence for the first time on appeal on the
ground that they had been deprived of due process. It found that the respondents did not actually receive the LA's
processes. It also admitted the respondents' unverified supplemental appeal on the ground that technicalities may
be disregarded to serve the greater interest of substantial due process. Furthermore, the Rules of Court do not
require the verification of a supplemental pleading.
The NLRC also vacated the LA's awards of salary differential, thirteenth month and service incentive leave
pays. In so ruling, it gave weight to the pieces of evidence attached to the memorandum on appeal and the
supplemental appeal. It maintained that the absence of the petitioners' signatures in the payrolls was not an
indispensable factor for their authenticity. It pointed out that the payment of money claims was further evidenced
by the list of employees with ATM cards. It also found that the petitioners' signatures were not forged. It took
judicial notice that many people use at least two or more different signatures.
The NLRC further ruled that the petitioners were lawfully dismissed on grounds of serious misconduct and
willful disobedience. It found that the petitioners failed to comply with various memoranda directing them to
transfer to other workplaces and to attend training seminars for the intended reorganization and reshuffling.
The NLRC denied the petitioners' motion for reconsideration in a resolution dated April 28, 2006.
Aggrieved, the petitioners filed a petition for certiorari under Rule 65 of the Rules of Court before the CA.
The CA affirmed the NLRC's ruling. The CA held that the petitioners were afforded substantive and
procedural due process. Accordingly, the petitioners deliberately did not explain their side. Instead, they
continuously resisted their transfer to other PLDT offices and violated company rules and regulations. It also upheld
the NLRC's findings on the petitioners' monetary claims.
The CA denied the petitioners' motion for reconsideration in a resolution dated August 28, 2009, prompting
the petitioners to file the present petition.
Issue:
1. Whether the CA erred when it did not find that the NLRC committed grave abuse of discretion in giving due
course to the respondents' appeal;
2. Whether the respondents perfected their appeal before the NLRC; and
3. Whether the NLRC properly allowed the respondents' supplemental appeal
4. Whether the respondents were estopped from submitting pieces of evidence for the first time on appeal;
5. Whether the petitioners were illegally dismissed and are thus entitled to backwages;
Held:
1. The respondents perfected their appeal with the NLRC because the revocation of the bonding
company's authority has a prospective application
Paragraph 2, Article 223 of the Labor Code provides that "[i]n case of a judgment involving a monetary award,
an appeal by the employer may be perfected only upon the posting of a cash or surety bond issued by a reputable
bonding company duly accredited by the Commission in the amount equivalent to the monetary award in the
judgment appealed from."
Contrary to the respondents' claim, the issue of the appeal bond's validity may be raised for the first time on
appeal since its proper filing is a jurisdictional requirement. The requirement that the appeal bond should be issued
by an accredited bonding company is mandatory and jurisdictional. The rationale of requiring an appeal bond is to
discourage the employers from using an appeal to delay or evade the employees' just and lawful claims. It is
intended to assure the workers that they will receive the money judgment in their favor upon the dismissal of the
employer's appeal.
In the present case, the respondents filed a surety bond issued by Security Pacific Assurance Corporation
(Security Pacific) on June 28, 2002. At that time, Security Pacific was still an accredited bonding company.
However, the NLRC revoked its accreditation on February 16, 2003. Nonetheless, this subsequent revocation
should not prejudice the respondents who relied on its then subsisting accreditation in good faith. A bonding
company's revocation of authority is prospective in application.
However, the respondents should post a new bond issued by an accredited bonding company in compliance
with paragraph 4, Section 6, Rule 6 of the NLRC Rules of Procedure. This provision states that "[a] cash or surety
bond shall be valid and effective from the date of deposit or posting, until the case is finally decided, resolved or
terminated or the award satisfied."
2. The CA correctly ruled that the NLRC properly gave due course to the respondents'
supplemental appeal
The CA also correctly ruled that the NLRC properly gave due course to the respondents' supplemental appeal.
Neither the laws nor the rules require the verification of the supplemental appeal. Furthermore, verification is a
formal, not a jurisdictional, requirement. It is mainly intended for the assurance that the matters alleged in the
pleading are true and correct and not of mere speculation. 27 Also, a supplemental appeal is merely an addendum
to the verified memorandum on appeal that was earlier filed in the present case; hence, the requirement for
verification has substantially been complied with. The respondents also timely filed their supplemental appeal on
January 3, 2003. The records of the case show that the petitioners themselves agreed that the pleading shall be
filed until December 18, 2002. The NLRC further extended the filing of the supplemental pleading until January 3,
2003 upon the respondents' motion for extension.
3. A party may only adduce evidence for the first time on appeal if he adequately explains his
delay in the submission of evidence and he sufficiently proves the allegations sought to be proven
In labor cases, strict adherence to the technical rules of procedure is not required. Time and again, we have
allowed evidence to be submitted for the first time on appeal with the NLRC in the interest of substantial justice.
Thus, we have consistently supported the rule that labor officials should use all reasonable means to ascertain the
facts in each case speedily and objectively, without regard to technicalities of law or procedure, in the interest of
due process.
However, this liberal policy should still be subject to rules of reason and fairplay.
The liberality of procedural rules is qualified by two requirements:
a. a party should adequately explain any delay in the submission of evidence; and
b. a party should sufficiently prove the allegations sought to be proven.
Guided by these principles, the CA grossly erred in ruling that the NLRC did not commit grave abuse of
discretion in arbitrarily admitting and giving weight to the respondents' pieces of evidence for the first time on
appeal.
A. The respondents failed to adequately explain their delay in the submission of evidence
We cannot accept the respondents' cavalier attitude in blatantly disregarding the NLRC Rules of
Procedure. The CA gravely erred when it overlooked that the NLRC blindly admitted and arbitrarily gave
probative value to the respondents' evidence despite their failure to adequately explain their delay in the
submission of evidence. Notably, the respondents' delay was anchored on their assertion that they were
oblivious of the proceedings before the LA. However, the respondents did not dispute the LA's finding that
Mr. Romulo Pacia, Jr. appeared on their behalf on April 19, 2001 and May 21, 2001. The respondents also
failed to contest the petitioners' assertion that the respondents' counsel appeared in a preliminary
mandatory conference on July 5, 2001.
Indeed, the NLRC capriciously and whimsically admitted and gave weight to the respondents'
evidence despite its finding that they voluntarily appeared in the compulsory arbitration proceedings. The
NLRC blatantly disregarded the fact that the respondents voluntarily opted not to participate, to adduce
evidence in their defense and to file a position paper despite their knowledge of the pendency of the
proceedings before the LA. The respondents were also grossly negligent in not informing the LA of the
specific building unit where the respondents were conducting their business and their counsel's address
despite their knowledge of their non-receipt of the processes.
B. The respondents failed to sufficiently prove the allegations sought to be proven
Furthermore, the respondents failed to sufficiently prove the allegations sought to be proven. Why
the respondents' photocopied and computerized copies of documentary evidence were not presented at
the earliest opportunity is a serious question that lends credence to the petitioners' claim that the
respondents fabricated the evidence for purposes of appeal. While we generally admit in evidence and give
probative value to photocopied documents in administrative proceedings, allegations of forgery and
fabrication should prompt the adverse party to present the original documents for inspection. It was
incumbent upon the respondents to present the originals, especially in this case where the petitioners had
submitted their specimen signatures. Instead, the respondents effectively deprived the petitioners of the
opportunity to examine and controvert the alleged spurious evidence by not adducing the originals. This
Court is thus left with no option but to rule that the respondents' failure to present the
originals raises the presumption that evidence willfully suppressed would be adverse if produced.
It was also gross error for the CA to affirm the NLRC's proposition that "[i]t is of common
knowledge that there are many people who use at least two or more different signatures." The NLRC
cannot take judicial notice that many people use at least two signatures, especially in this case where the
petitioners themselves disown the signatures in the respondents' assailed documentary evidence. The
NLRC's position is unwarranted and is patently unsupported by the law and jurisprudence.
4. The petitioners are entitled to backwages
In termination cases, the burden of proving just and valid cause for dismissing an
employee from his employment rests upon the employer. The employer's failure to discharge this burden
results in the finding that the dismissal is unjustified. 40 This is exactly what happened in the present case.
5. The petitioners are entitled to salary differential, service incentive, holiday, and thirteenth
month pays
As in illegal dismissal cases, the general rule is that the burden rests on the defendant to prove
payment rather than on the plaintiff to prove non-payment of these money claims. The rationale for this
rule is that the pertinent personnel files, payrolls, records, remittances and other similar documents —
which will show that differentials, service incentive leave and other claims of workers have been paid —
are not in the possession of the worker but are in the custody and control of the employer.
6. The petitioners are not entitled to overtime and premium pays
The burden of proving entitlement to overtime pay and premium pay for holidays and rest days
rests on the employee because these are not incurred in the normal course of business. In the present
case, the petitioners failed to adduce any evidence that would show that they actually rendered service in
excess of the regular eight working hours a day, and that they in fact worked on holidays and rest days.
7. The petitioners are entitled to attorney's fees
The award of attorney's fees is also warranted under the circumstances of this case. An employee
is entitled to an award of attorney's fees equivalent to ten percent (10%) of the amount of the wages in
actions for unlawful withholding of wages. As a final note, we observe that Kodelito Ayala, Winelito Ojel,
Renato Rodrego and Welito Loon are also named as petitioners in this case. However, we deny their
petition for the reason that they were not part of the proceedings before the CA. Their failure to timely
seek redress before the CA precludes this Court from awarding them monetary claims.
WHEREFORE, based on these premises, we REVERSE and SET ASIDE the decision dated June 5, 2009, and
the resolution dated August 28, 2009 of the Court of Appeals in CA-G.R. SP No. 95182. This case is REMANDED to
the Labor Arbiter for the sole purpose of computing petitioners' full backwages (computed from the date of their
respective dismissals up to the finality of this decision) and their salary differential, service incentive leave, holiday,
thirteenth month pays, and attorney's fees equivalent to ten percent (10%) of the withheld wages.
LEPANTO CONSOLIDATED MINING CORP. VS. ICAO

G.R. No. 196047; January 15, 2014
Facts:
The instant petition stemmed from a complaint for illegal dismissal and damages filed by private
respondent Belio C. Icao [Icao] against petitioners Lepanto Consolidated Mining Company (LCMC) and its Chief
Executive Officer [CEO] Felipe U. Yap [Yap] before the Arbitration Branch of the NLRC.
Private respondent claimed that his dismissal from work was without just or authorized cause since
petitioners failed to prove by ample and sufficient evidence that he stole gold bearing highgrade ores from the
company premises. If private respondent was really placing a wrapped object inside his boots, he should have
been sitting or bending down to insert the same, instead of just standing on a muckpile as alleged by petitioners.
Moreover, it is beyond imagination that a person, knowing fully well that he was being chased for allegedly placing
wrapped ore inside his boots, will transfer it to his skullguard. The tendency in such situation is to throw the object
away. As such, private respondent prayed that petitioners be held liable for illegal dismissal, to reinstate him to his
former position without loss of seniority rights and benefits, and to pay his full backwages, damages and attorney's
fees.
For their defense, petitioners averred that SG Bulwayan saw private respondent standing on a muckpile
and inserting a wrapped object inside his right rubber boot. SG Bulwayan immediately ran towards private
respondent, but the latter ran away to escape. He tried to chase private respondent but failed to capture him.
Thereafter, while SG Bulwayan was on his way to see his co-guard SG Papsa-ao, he saw private respondent
moving out of a stope. He then shouted at SG Papsa-ao to intercept him. When private respondent was
apprehended, SG Bulwayan ordered him to remove his skullguard for inspection and saw a wrapped object
placed inside the helmet. SG Bulwayan grabbed it, but the harness of the skullguard was also detached causing the
object to fall on the ground. Immediately, SG Bulwayan recovered and inspected the same which turned out to
be pieces of stone ores. Private respondent and the stone ores were later turned over to the Mankayan Philippine
National Police where he was given a written notice of the charge against him. On January 9, 2008, a hearing was
held where private respondent, together with the officers of his union as well as the apprehending guards
appeared. On February 4, 2008, private respondent received a copy of the resolution of the company informing
him of his dismissal from employment due to breach of trust and confidence and the act of highgrading.
On 30 September 2008, the labor arbiter rendered a Decision holding petitioner and its CEO liable for
illegal dismissal and ordering them to pay respondent Icao P345,879.45, representing his full backwages and
separation pay. The alleged highgrading attributed by LCMC's security guards was found to have been fabricated;
consequently, there was no just cause for the dismissal of respondent. The labor arbiter concluded that the claim
of the security guards that Icao had inserted ores in his boots while in a standing position was not in accord with
normal human physiological functioning.
The labor arbiter also noted that it was inconsistent with normal human behavior for a man, who knew
that he was being chased for allegedly placing wrapped ore inside his boots, to then transfer the ore to his
skullguard, where it could be found once he was apprehended. To further support the improbability of the
allegation of highgrading, the labor arbiter noted that throughout the 21 years of service of Icao to LCMC, he
had never been accused of or penalized for highgrading or any other infraction involving moral turpitude — until
this alleged incident.
THE NLRC ORDER DISMISSING THE APPEAL OF PETITIONER LCMC FOR FAILURE TO POST THE
APPEAL BOND
On 8 December 2008, petitioner and its CEO filed an Appearance with Memorandum of Appeal 7 before the
NLRC. Instead of posting the required appeal bond in the form of a cash bond or a surety bond in an amount
equivalent to the monetary award of P345,879.45 adjudged in favor of Icao, they filed a Consolidated Motion for
Release of Cash Bond and to Apply Bond Subject for Release As Payment for Appeal Bond (Consolidated Motion).
They requested therein that the NLRC release the cash bond of P401,610.84, which they had posted in the
separate case Dangiw Siggaao v. LCMC, and apply that same cash bond to their present appeal bond liability. They
reasoned that since this Court had already decided Dangiw Siggaao in their favor, and that the ruling therein had
become final and executory, the cash bond posted therein could now be released. They also cited financial
difficulty as a reason for resorting to this course of action and prayed that, in the interest of justice, the motion be
granted.
In its Order dated 27 February 2009, the NLRC First Division dismissed the appeal of petitioner and the
latter's CEO for non-perfection. It found that they had failed to post the required appeal bond equivalent to the
monetary award of P345,879.45.
THE CA RULING AFFIRMING THE ORDER OF THE NLRC
On 27 September 2010, the CA issued its assailed Decision 15 affirming the Order of the NLRC First
Division, which had dismissed the appeal of petitioner and the latter's CEO. According to the CA, they failed to
comply with the requirements of law and consequently lost the right to appeal.
Issue:
Whether or not petitioner complied with the appeal bond requirement under the Labor Code and the NLRC
Rules by filing a Consolidated Motion to release the cash bond it posted in another case, which had been decided
with finality in its favor, with a view to applying the same cash bond to the present case.
Held:
The Petition is meritorious. The Court finds that petitioner substantially complied with the appeal bond
requirement.
Before discussing its ruling, however, the Court finds it necessary to emphasize the well-entrenched
doctrine that an appeal is not a matter of right, but is a mere statutory privilege. It may be availed of only in the
manner provided by law and the rules. Thus, a party who seeks to exercise the right to appeal must comply with
the requirements of the rules; otherwise, the privilege is lost.
In appeals from any decision or order of the labor arbiter, the posting of an appeal bond is required under
Article 223 of the Labor Code, which reads:
Article 223. APPEAL. — Decisions, awards, or orders of the Labor Arbiter are final and executory unless
appealed to the Commission by any or both parties within ten (10) calendar days from receipt of such
decisions, awards, or orders. Such appeal may be entertained only on any of the following grounds:
xxx xxx xxx
In case of a judgment involving a monetary award, an appeal by the employer may be perfected only upon
the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the
Commission in the amount equivalent to the monetary award in the judgment appealed from. (Emphasis
and underlining supplied)
The 2011 NLRC Rules of Procedure (NLRC Rules) incorporates this requirement in Rule VI, Section 6, which
provides:
SECTION 6. Bond. — In case the decision of the Labor Arbiter or the Regional Director involves a monetary
award, an appeal by the employer may be perfected only upon the posting of a bond, which shall either be
in the form of cash deposit or surety bond equivalent in amount to the monetary award, exclusive of
damages and attorney's fees. (Emphases and underlining supplied)
We now turn to the main question of whether petitioner's Consolidated Motion to release the cash bond it
posted in a previous case, for application to the present case, constitutes compliance with the appeal bond
requirement. While it is true that the procedure undertaken by petitioner is not provided under the Labor Code or
in the NLRC Rules, we answer the question in the affirmative.
We rule that petitioner substantially complied with the mandatory requirement of posting an appeal bond
for the reasons explained below.
First, there is no question that the appeal was filed within the 10-day reglementary period. Except for the
alleged failure to post an appeal bond, the appeal to the NLRC was therefore in order.
Second, it is also undisputed that petitioner has an unencumbered amount of money in the form of cash in
the custody of the NLRC. To reiterate, petitioner had posted a cash bond of P401,610.84 in the separate case
Dangiw Siggaao, which was earlier decided in its favor.
Under the Rule VI, Section 6 of the 2005 NLRC Rules, "[a] cash or surety bond shall be valid and effective
from the date of deposit or posting, until the case is finally decided, resolved or terminated, or the award satisfied."
Hence, it is clear that a bond is encumbered and bound to a case only for as long as 1) the case has not been
finally decided, resolved or terminated; or 2) the award has not been satisfied. Therefore, once the appeal is finally
decided and no award needs to be satisfied, the bond is automatically released. Since the money is now
unencumbered, the employer who posted it should now have unrestricted access to the cash which he may now
use as he pleases — as appeal bond in another case, for instance. This is what petitioner simply did.
Third, the cash bond in the amount of P401,610.84 posted in Dangiw Siggaao is more than enough to
cover the appeal bond in the amount of P345,879.45 required in the present case.
Fourth, this ruling remains faithful to the spirit behind the appeal bond requirement which is to ensure that
workers will receive the money awarded in their favor when the employer's appeal eventually fails. There was no
showing at all of any attempt on the part of petitioner to evade the posting of the appeal bond. On the contrary,
petitioner's move showed a willingness to comply with the requirement. Hence, the welfare of Icao is adequately
protected.
Having complied with the appeal bond requirement, petitioner's appeal before the NLRC must therefore be
reinstated.
The Court will liberally apply the rules only in very highly exceptional cases such as this, in keeping with
the dictates of justice, reason and equity.
CO SAY COCO PRODUCTS PHILS INC. vs BALTAZAR

GR No. 188828, March 5, 2014
Facts:
Petitioner Co Say is a domestic corporation duly organized and existing under Philippine laws and is the
owner of a private port located in Bigaa, Legazpi City. Tanawan Port on the other hand, is a single proprietorship
owned and managed by Salazar.
On 18 March 2002, Co Say, thru its President, Efren Co Say, entered into a Contract for Cargo Handling
Services with petitioner Tanawan Port, wherein the latter was given the authority to manage and operate the
arrastre and stevedoring services of its port.
To jumpstart the operation of its cargo handling services, Tanawan Port employed respondents Benjamin
Baltasar as Manager, Marvin Baltasar as Computer Operator, Raymundo Botalon as Crane Operator, Nilo Bordeos,
Jr. as Crane Helper, Cargo Botalon as Crane Operator and Geronimo Bas as Fork Lift Operator.
Due to lack of clientele, the business venture of Tanawan Port failed to gain momentum causing serious
alarm to the company. A couple of months after respondents were hired, Tanawan Port decided to cease operation
by sending letters to the City Treasurer of Legaspi City and the Revenue District Officer of the Bureau of Internal
Revenue informing them of its intention to close its business and to surrender its business registration due to
serious business losses. On 30 August 2002, the City Treasurer approved the retirement from business of Tanawan
Port. On the same day, Salazar convened respondents to formally inform them of her intention to close Tanawan
Port's operation, but she was prevailed upon by the latter to hold it up while Baltasar is looking for new clients that
could help boost the company's revenue. Efforts to revive the business, however, proved to be futile constraining
the company to finally discontinue its operation and close its business. As a result, respondents were terminated
from employment but were accordingly given their corresponding separation pay and 13th month pay.
Barely a month after they received their separation pay, respondents filed complaints for illegal dismissal
and non-payment of labor standard benefits against petitioners Tanawan Port, Salazar, Co Say and Efren Co Say
before the Labor Arbiter. In their Position Papers, respondents alleged that Tanawan Port was merely feigning
losses in order to ease out employees, pointing out the absence of evidence to prove business reverses.
Respondents also punctuated Tanawan Port's failure to comply with the procedural requirement of sending notices
to employees concerned and to the Department of Labor and Employment (DOLE) one month before the intended
date of closure as required by law.
Tanawan Port, for its part, asserted that respondents' severance from employment was brought about by
closure or cessation of business operation which is an authorized cause for termination of employment under the
Labor Code. To dispute the allegation of respondents that the closure was done in bad faith, Tanawan Port insisted
that the lack of clientele caused serious financial drain to the company leaving the management with no other
option but to shutdown its operations.
On 7 August 2003, the Labor Arbiter rendered a Joint Decision in favor of respondents and held that
petitioners are liable for illegal dismissal for failure to comply with the procedural and substantive requirements of
terminating employment due to closure of business operations. It was found that while Tanawan Port claimed
that it was suffering from serious business losses, it failed to adduce its financial statements to prove that its
withdrawal from operation was bona fide in character. A similar failure to comply with the notice requirement was
likewise observed by the labor officer resulting in the violation of respondents' right to due process of law.
Finally, the Labor Arbiter declared that Tanawan Port is engaged in labor-only contracting and is merely an
extension of the business personality of Co Say, which is thus, solidarily liable with the former, the labor-only
contractor, for the rightful claims of the employees.
Contradicting the Labor Arbiter Decision, the NLRC in its Decision dated 31 May 2004, held that
respondents' severance from employment was not illegal, as the company where they were working closed due to
business losses, and, the closure of business or establishment is one of the authorized causes recognized by law in
dismissing an employee. The NLRC further ruled that there was sufficient compliance with the substantive
requirement in terminating employment and held that proof of business losses is not necessary since cessation of
business operation is a management prerogative and should not be interfered with by courts or labor tribunals.
In a Decision dated 20 April 2009, the Court of Appeals reversed the NLRC Decision due to failure of
petitioners to perfect their appeal and proceeded to affirm the Labor Arbiter's Decision. Contrary to the ruling of
the NLRC, the appellate court ruled that the posting of the appeal bond after the period to perfect the appeal had
expired, resulted in the non-perfection of the appeal. Accordingly, the Court of Appeals ruled that the NLRC has no
authority to alter, modify or reverse the Labor Arbiter decision after the said decision became final and executory.
Issue:
Whether the Court of Appeals acted with grave abuse of discretion maounting to lack of jurisdiction when it
ruled that the respondents failed to perfect their appeal on time.
Held:
The NLRC ruled that petitioners were able to post the surety bond and timely perfect their appeal before
the expiration of the 10-day reglementary period, while the Court of Appeals oppositely ruled although both
findings are based on the same pieces of evidence available on record. According to the appellate court, the First
Certification issued by the RAB-NLRC on 2 October 2003 is telling of the petitioners' failure to
perfect an appeal. It appeared in the said certification that the appeal bond, which is a mandatory requirement for
perfecting an appeal, has not been posted as of 2 October 2003
Three months after the said certification was issued, the RAB-NLRC issued a Second Certification on 19
January 2004, indicating that petitioners posted a surety bond on 24 September 2003 although the said bond was
received by the RAB-NLRC only on 28 October 2003.
It was on the basis of the Second Certification that the NLRC allowed the appeal. The divergence of the
findings of the NLRC on the one hand, and the Court of Appeals on the other, necessitates a review of the records
of this case to ascertain which conclusion is supported by substantial evidence and, enough to remove the
conclusion away from the issue of grave abuse of discretion. Substantial evidence is such amount of relevant
evidence which a reasonable mind might accept as adequate to support a conclusion.
The crucial issue in the resolution of the instant petition concerns the timely posting of the appeal bond.
The pertinent rule on the matter is Article 223 of the Labor Code, as amended, which sets forth the rules on appeal
from the Labor Arbiter's monetary award:
ART. 223. Appeal. — Decisions, awards, or orders of the Labor Arbiter are final and executory unless
appealed to the Commission by any or both parties within ten (10) calendar days from receipt of such
decisions, awards, or orders. . . . .
xxx xxx xxx
the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the
Commission in the amount equivalent to the monetary award in the judgment appealed from. (Emphasis
ours).
Implementing the aforestated provisions of the Labor Code are the provisions of Rule VI of the 2011 NLRC
Rules of Procedure on perfection of appeals which read:
SECTION 1. PERIODS OF APPEAL. — Decisions, awards, or orders of the Labor Arbiter shall be final and
executory unless appealed to the Commission by any or both parties within ten (10) calendar days from
receipt thereof; and in case of decisions or resolutions of the Regional Director of the Department of Labor
and Employment pursuant to Article 129 of the Labor Code, within five (5) calendar days from receipt
thereof. If the 10th or 5th day, as the case may be, falls on a Saturday, Sunday or holiday, the last day to
perfect the appeal shall be the first working day following such Saturday, Sunday or holiday.
No motion or request for extension of the period within which to perfect an appeal shall be
allowed.
SECTION 2. GROUNDS. — The appeal may be entertained only on any of the following grounds
a) If there is prima facie evidence of abuse of discretion on the part of the Labor Arbiter or Regional
Director;
b) If the decision, award or order was secured through fraud or coercion, including graft and
corruption;
c) If made purely on questions of law; and/or

d) If serious errors in the findings of facts are raised which, if not corrected, would cause grave or
irreparable damage or injury to the appellant.
SECTION 3. WHERE FILED. — The appeal shall be filed with the Regional Arbitration Branch or Regional
Office where the case was heard and decided.
SECTION 4.REQUISITES FOR PERFECTION OF APPEAL. —
a) The appeal shall be:
a. filed within the reglementary period provided in Section 1 of this Rule;
b. verified by the appellant himself/herself in accordance with Section 4, Rule 7 of the Rules
of Court, as amended;
c. in the form of a memorandum of appeal which shall state the grounds relied upon and the
arguments in support thereof, the relief prayed for, and with a statement of the date the
appellant received the appealed decision, award or order;
d. in three (3) legibly typewritten or printed copies; and
e. accompanied by:
i. proof of payment of the required appeal fee and legal research fee;
ii. posting of a cash or surety bond as provided in Section 6 of this Rule; and
iii. proof of service upon the other parties.
b) A mere notice of appeal without complying with the other requisites aforestated shall not stop the
running of the period for perfecting an appeal.
c) The appellee may file with the Regional Arbitration Branch or Regional Office where the appeal
was filed, his/her answer or reply to appellant's memorandum of appeal, not later than ten
(10) calendar days from receipt thereof. Failure on the part of the appellee who was properly
furnished with a copy of the appeal to file his/her answer or reply within the said period may
be construed as a waiver on his/her part to file the same.
d) Subject to the provisions of Article 218 of the Labor Code, once the appeal is perfected in
accordance with these Rules, the Commission shall limit itself to reviewing and deciding only the
specific issues that were elevated on appeal.
SECTION 5. APPEAL FEE. — The appellant shall pay the prevailing appeal fee and legal research fee to the
Regional Arbitration Branch or Regional Office of origin and the official receipt of such payment shall form
part of the records of the case.
SECTION 6.BOND. — In case the decision of the Labor Arbiter or the Regional Director involves a monetary
award, an appeal by the employer may be perfected only upon the posting of a bond, which shall either be
in the form of cash deposit or surety bond equivalent in amount to the monetary award, exclusive of
damages and attorney's fees.
In case of surety bond, the same shall be issued by a reputable bonding company duly accredited
by the Commission or the Supreme Court, and shall be accompanied by original or certified true copies of
the following:
a) a joint declaration under oath by the employer, his/her counsel, and the bonding company,
attesting that the bond posted is genuine, and shall be in effect until final disposition of the case.
b) an indemnity agreement between the employerappellant and bonding company;
c) proof of security deposit or collateral securing the bond: provided, that a check shall not be
considered as an acceptable security;
d) a certificate of authority from the Insurance Commission;
e) certificate of registration from the Securities and Exchange Commission;
f) certificate of accreditation and authority from the Supreme Court; and
g) notarized board resolution or secretary's certificate from the bonding company showing its
authorized signatories and their specimen signatures.
The Commission through the Chairman may on justifiable grounds blacklist a bonding company,
notwithstanding its accreditation by the Supreme Court.
A cash or surety bond shall be valid and effective from the date of deposit or posting, until the
case is finally decided, resolved or terminated, or the award satisfied.
This condition shall be deemed incorporated in the terms and conditions of the surety bond, and
shall be binding on the appellants and the bonding company.
The appellant shall furnish the appellee with a certified true copy of the said surety bond with all
the above-mentioned supporting documents. The appellee shall verify the regularity and genuineness
thereof and immediately report any irregularity to the Commission.

Upon verification by the Commission that the bond is irregular or not genuine, the Commission
shall cause the immediate dismissal of the appeal, and censure the responsible parties and their
counsels, or subject them to reasonable fine or penalty, and the bonding company may be blacklisted.
No motion to reduce bond shall be entertained except on meritorious grounds, and only upon the
posting of a bond in a reasonable amount in relation to the monetary award.
The mere filing of a motion to reduce bond without complying with the requisites in the preceding
paragraphs shall not stop the running of the period to perfect an appeal.
These statutory and regulatory provisions explicitly provide that an appeal from the Labor Arbiter to the
NLRC must be perfected within ten calendar days from receipt of such decisions, awards or orders of the Labor
Arbiter. In a judgment involving a monetary award, the appeal shall be perfected only upon; (1) proof of payment
of the required appeal fee; (2) posting of a cash or surety bond issued by a reputable bonding company; and (3)
filing of a memorandum of appeal. 23
No appeal was perfected by the petitioners within the 10-day period under Article 223 of the Labor Code.
The petitioners received the 7 August 2003 Decision of the Labor Arbiter on 15 September 2003, hence,
they had until 25 September 2003 to perfect their appeal. A perusal of the records reveals an apparent contrariety
on the date of the posting of the appeal bond, a material fact decisive of the instant controversy. While the First
Certification indicated that no appeal bond has been posted as of 2 October 2003, the Second Certification and the
Transmittal Letter stated that a surety bond was posted on 24 September 2003.
The Second Certificate is not a document of timeliness of petitioners' appeal bond. It is even confirmatory
of the fact of tardiness that the First Certification stated doubtlessly.
That the posting of the surety bond requires as necessary addition the seven enumerated documents is
underscored by the provision that the appellant shall furnish the appellee with a certified true copy of the said
surety bond with all the abovementioned supporting documents. The appellee shall verify the regularity and
genuineness thereof and immediately report any irregularity to the Commission.
The rule gives the appellee the authority and opportunity, even the duty, to verify the regularity and
genuineness not only of the surety bond but also of the seven attachments. To reiterate, even if the issuance of
the surety bond on 24 September 2003 is considered as the posting of the bond, the certification cannot
furthermore be considered as the posting of the other seven required documents.
Without a straight statement, the Second Certification seems to consider posting as mailing such that the
date 24 September 2003 should be the reckoning date that determines timeliness and not the date 28 October
2003 which was the date of receipt of the surety bond. Even such insinuation, strained and all, is unacceptable
considering the absence of proof of mailing, it being the fact that there was no mention at all in any of the
pleadings below that the surety bond was mailed.
The Court of Appeals therefore, correctly ruled that petitioners failed to perfect their appeal on time. In
holding so, the appellate court only applied the appeal bond requirement as already well explained in our previous
pronouncements that there is legislative and administrative intent to strictly apply the appeal bond requirement,
and the Court should give utmost regard to this intention. The clear intent of both statutory and procedural law is
to require the employer to post a cash or surety bond securing the full amount of the monetary award within the
ten 10-day reglementary period. Rules on perfection of an appeal, particularly in labor cases, must be strictly
construed because to extend the period of the appeal is to delay the case, a circumstance which would give the
employer a chance to wear out the efforts and meager resources of the worker to the point that the latter is
constrained to give up for less than what is due him. This is to assure the workers that if they finally prevail in the
case the monetary award will be given to them both upon dismissal of the employer's appeal. It is further meant to
discourage employers from using the appeal to delay or evade payment of their obligations to the employees. The
appeal bond requirement precisely aims to prevent empty or inconsequential victories secured by laborers in
consonance with the protection of labor clause ensconced and zealously guarded by our Constitution.
It is entrenched in our jurisprudence that perfection of an appeal in a manner and within the period
prescribed by law is not only mandatory but jurisdictional, and failure to perfect an appeal has the effect of making
judgment final and executory. While dismissal of an appeal on technical grounds is frowned upon,
Article 223 of the Labor Code which prescribes the appeal bond requirement, however, is a rule of jurisdiction and
not of procedure. Hence, there is a little leeway for condoning a liberal interpretation thereof, and certainly none
premised on the ground that its requirements are mere technicalities. It is axiomatic that an appeal is only a
statutory privilege and it may only be exercised in the manner provided by law. The timely perfection of an appeal
is a mandatory requirement, which cannot be trifled with a "mere technicality" to suit the interest of party. We
cannot condone the practice of parties who, either by their own or their counsel's inadvertence, have allowed the
judgment to become final and executory and, after the same had reached finality, seeks the shield of substantial
justice to assail it.
All considered then, the finding of the Labor Arbiter holding the petitioners liable for illegal dismissal is
binding on them. Not having been timely appealed, this issue is already beyond our jurisdiction to resolve, and the
finding of the Labor Arbiter can no longer be disturbed without violating the fundamental principle that final
judgment is immutable and unalterable and may no longer be modified in any respect, even if the modification is
meant to correct erroneous conclusion of fact and law.
WHEREFORE, premises considered, the petition is DENIED. The assailed Decision and Resolution of the
Court of Appeals, reversing the NLRC Resolution and effectively reinstating the Labor Arbiter Decision, are hereby
AFFIRMED.
OLORES VS MANILA DOCTORS COLLEGE

GR NO. 201663, March 31, 2014
Facts:
Respondent is a private higher educational institution dedicated to providing academic degrees and
certificate courses related to Allied Medical Services and Liberal Arts and Sciences. [Petitioner] was hired as a part-
time faculty of respondent on 07 November 2005. Thereafter, he signed fixed term employment contracts as
part-time instructor. From 03 November 2008, [petitioner] signed fixed term employment contracts, this time as a
full-time instructor.
[Petitioner] submitted the final grades of his students to Mr. Jacinto Bernardo, Jr. (Bernardo), the chair of
the Humanities Area. On 13 April 2010, Bernardo charged [petitioner] with gross misconduct and gross inefficiency
in the performance of duty. [Petitioner] was accused of employing a grading system not in accordance with the
system because he: a) added 50 pts to the final examination raw scores; b) added 50 pts to students who have not
been attending classes; c) credited only 40% instead of 60% of the final examination; d) did not credit the essay
questions; and e) added further incentives (1-4 pts) aside from 50 pts. In so doing, [petitioner] gave grades not
based solely on scholastic records.
On 14 April 2010, [petitioner] submitted his answer stating that he: a) did not add 50 pts to the raw scores
as verified by the dean and academic coordinator; b) made certain adjustments to help students pass; c) did not
credit the essay questions because these have never been discussed in the meetings with Bernardo; and d) did
have the judgment to give an incentive for a task well done. Also on this date, [petitioner] wrote a letter to
respondent's Human Resources Manager asking that he should now be granted a permanent status.
Acting on the report of Bernardo, respondent created the Manila Doctors Tribunal (MDT) which was tasked
to ascertain the truth. The MDT sent notices of hearing to [petitioner]. During the administrative hearing,
[petitioner] stood pat on his answer. He, however, elucidated on his points by presenting slides.
On 31 May 2010, the MDT submitted its recommendation to the president of respondent. The culpability of
[petitioner] was established, hence, dismissal was recommended. On 07 June 2010, respondent terminated the
services of [petitioner] for grave misconduct and gross inefficiency and incompetence. dated December 8, 2010,
the Labor Arbiter found merit in petitioner's charge for illegal dismissal. However, it dismissed petitioner's claim for
regularization.
Respondent appealed from the aforesaid decision to the NLRC. However, the same was denied in a
Resolution dated February 10, 2011. The NLRC reasoned that respondent's appeal was not accompanied by neither
a cash nor surety bond, thus, no appeal was perfected from the decision of the Labor Arbiter.
September 30, 2011, the NLRC granted respondent's appeal and reversed its earlier resolution.
Resultantly, petitioner filed a certiorari petition with the CA. In a Resolution dated January 9, 2012, the CA
held that since petitioner failed to file a motion for reconsideration against the NLRC decision before seeking
recourse to it via a certiorari petition, the CA dismissed petitioner's special civil action for certiorari
Issue:
1. Whether respondent's appeal with the NLRC was perfected despite its failure to post a bond; and
2. Whether the CA erred in dismissing petitioner's Rule 65 petition.
Held:
There is merit in the petition.
At the outset, it must be emphasized that Article 223 of the Labor Code states that an appeal by the
employer to the NLRC from a judgment of a Labor Arbiter, which involves a monetary award, may be perfected
only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the
NLRC, in an amount equivalent to the monetary award in the judgment appealed from.
Sections 4 (a) and 6 of Rule VI of the New Rules of Procedure of the NLRC, as amended, reaffirm the
explicit jurisdictional principle in Article 223.
SECTION 4. REQUISITES FOR PERFECTION OF APPEAL. — (a) The appeal shall be:
1) filed within the reglementary period provided in Section 1 of this Rule;
2) verified by the appellant himself in accordance with Section 4, Rule 7 of the Rules of Court, as
amended;
3) in the form of a memorandum of appeal which shall state the grounds relied upon and the
arguments in support thereof, the relief prayed for, and with a statement of the date the appellant
received the appealed decision, resolution or order;
4) in three (3) legibly type written or printed copies; and
5) accompanied by:
a. proof of payment of the required appeal fee;
b. posting of a cash or surety bond as provided in Section 6 of this Rule;
c. a certificate of non-forum shopping; and iv) proof of service upon the other parties.
SECTION 6. BOND. — In case the decision of the Labor Arbiter or the Regional Director involves a
monetary award, an appeal by the employer may be perfected only upon the posting of a bond, which
shall either be in the form of cash deposit or surety bond equivalent in the amount to the monetary award,
exclusive of damages and attorney's fees.
The posting of a bond is indispensable to the perfection of an appeal in cases involving monetary awards
from the decisions of the Labor Arbiter. Moreover, the filing of the bond is not only mandatory, but a jurisdictional
requirement as well, that must be complied with in order to confer jurisdiction upon the NLRC. Noncompliance
therewith renders the decision of the Labor Arbiter final and executory. This requirement is intended to assure the
workers that if they prevail in the case, they will receive the money judgment in their favor upon the dismissal of
the employer's appeal. It is intended to discourage employers from using an appeal to delay or evade their
obligation to satisfy their employees' just and lawful claims.
Here, it is undisputed that respondent's appeal was not accompanied by any appeal bond despite the clear
monetary obligation to pay petitioner his separation pay in the amount of P100,000.00. Since the posting of a bond
for the perfection of an appeal is both mandatory and jurisdictional, the decision of the Labor Arbiter sought to be
appealed before the NLRC had already become final and executory. Therefore, the NLRC had no authority to
entertain the appeal, much less to reverse the decision of the Labor Arbiter.
Nevertheless, assuming that the NLRC has jurisdiction to take cognizance of the instant case, this Court
would still be inclined to favor petitioner because the instant case falls under one of the recognized exceptions to
the rule that a motion for reconsideration is necessary prior to the filing of a certiorari petition.
The general rule is that a motion for reconsideration is indispensable before resort to the special civil action
for certiorari to afford the court or tribunal the opportunity to correct its error, if any. The rule is well settled that
the filing of a motion for reconsideration is an indispensable condition to the filing of a special civil action for
certiorari.
However, said rule is subject to several recognized exceptions:
a) Where the order is a patent nullity, as where the court a quo has no jurisdiction;
b) Where the questions raised in the certiorari proceedings have been duly raised and passed upon
by the lower court, or are the same as those raised and passed upon in the lower court;
c) Where there is an urgent necessity for the resolution of the question and any further delay would
prejudice the interests of the Government or of the petitioner or the subject matter of the action is
perishable;
d) Where, under the circumstances, a motion for reconsideration would be useless;
e) Where petitioner was deprived of due process and there is extreme urgency for relief;
f) Where, in a criminal case, relief from an order of arrest is urgent and the granting of such relief by
the trial court is improbable;
g) Where the proceedings in the lower court are a nullity for lack of due process;
h) Where the proceeding was ex parte or in which the petitioner had no opportunity to object; and
i) Where the issue raised is one purely of law or where public interest is involved.
In the instant case, the NLRC had all the opportunity to review its ruling and correct itself.
The NLRC issued a ruling on February 10, 2011 in favor of petitioner dismissing respondent's appeal on the
ground that the latter failed to file an appeal bond. However, upon a motion for reconsideration filed by
respondent, the NLRC completely reversed itself and set aside its earlier resolution dismissing the appeal. The
NLRC had more than enough opportunity to pass upon the issues raised by both parties on appeal of the ruling of
the Labor Arbiter and the subsequent motion for reconsideration of its resolution disposing the appeal. Thus,
another motion for reconsideration would have been useless under the circumstances since the questions
raised in the certiorari proceedings have already been duly raised and passed upon by the NLRC.
In a similar case, the Labor Arbiter rendered a decision dismissing petitioner's case for lack of merit. On
appeal, the NLRC rendered a decision reversing the decision of the Labor Arbiter and ordered the respondent
therein to pay petitioner full backwages, separation pay, salary differentials, 13th month pay and allowances. Not
satisfied, respondent therein moved for reconsideration of the aforesaid NLRC resolution. The NLRC, thereafter,
granted respondent's motion and reversed its previous ruling. In a like manner, the petitioner therein filed a
certiorari petition without first filing a motion for reconsideration with the NLRC.
All told, the petition is meritorious. However, since this Court is not a trier of facts, we cannot rule on the
substantive issue of the case, i.e., whether petitioner has attained regular status, inasmuch as the CA has not yet
passed upon the factual issues raised by the parties.
WHEREFORE, premises considered, the instant petition is hereby GRANTED and the Resolutions dated
January 9, 2012 and April 27, 2012, respectively, of the Court of Appeals in CA-G.R. SP No. 122596, are hereby
REVERSED and SET ASIDE. The case is REMANDED to the Court of Appeals for further proceedings.
BERGONIO VS SOUTH EAST ASIAN AIRLINES

GR No. 195227,.April 21, 2014
Facts:
On April 30, 2004, the petitioners filed before the LA a complaint for illegal dismissal and illegal suspension
with prayer for reinstatement against respondents South East Asian Airlines (SEAIR) and Irene Dornier as SEAIR's
President (collectively, the respondents).
In a decision dated May 31, 2005, the LA found the petitioners illegally dismissed and ordered the
respondents, among others, to immediately reinstate the petitioners with full backwages. The respondents received
their copy of this decision on July 8, 2005.
On August 20, 2005, the petitioners filed before the LA a Motion for issuance of Writ of Execution for their
immediate reinstatement.
During the scheduled pre-execution conference held on September 14, 2005, the respondents manifested
their option to reinstate the petitioners in the payroll. The payroll reinstatement, however, did not materialize.
Thus, on September 22, 2005, the petitioners filed before the LA a manifestation for their immediate
reinstatement.
On October 3, 2005, the respondents filed an opposition to the petitioners' motion for execution. They
claimed that the relationship between them and the petitioners had already been strained because of the
petitioners' threatening text messages, thus precluding the latter's reinstatement.
On October 7, 2005, the LA granted the petitioners' motion and issued a writ of execution.
The respondents moved to quash the writ of execution with a prayer to hold in abeyance the
implementation of the reinstatement order. They maintained that the relationship between them and the
petitioners had been so strained that reinstatement was no longer possible.
The October 7, 2005 writ of execution was returned unsatisfied. In response, the petitioners filed a motion
for re-computation of accrued wages, and, on January 25, 2006, a motion for execution of the re-computed
amount. On February 16, 2006, the LA granted this motion and issued an alias writ of execution.
On February 21, 2006, the respondents issued a Memorandum directing the petitioners to report for work
on February 24, 2006. The petitioners failed to report for work on the appointed date. On February 28, 2006, the
respondents moved before the LA to suspend the order for the petitioners' reinstatement.
Meanwhile, the respondents appealed with the NLRC the May 31, 2005 illegal dismissal ruling of the LA.
In an order dated August 15, 2006, the NLRC dismissed the respondents' appeal for non-perfection. The
NLRC likewise denied the respondents' motion for reconsideration in its November 29, 2006 resolution, prompting
the respondents to file before the CA a petition for certiorari.
The NLRC issued an Entry of Judgment on February 6, 2007 declaring its November 29, 2006 resolution
final and executory. The petitioners forthwith filed with the LA another motion for the issuance of a writ of
execution, which the LA granted on April 24, 2007. The LA also issued another writ of execution. A Notice of
Garnishment was thereafter issued to the respondents' depositary bank — Metrobank-San Lorenzo Village Branch,
Makati City — in the amount of P1,900,000.00 on June 6, 2007.
On December 18, 2007, the CA rendered its decision (on the illegal dismissal ruling of the LA) partly
granting the respondents' petition. The CA declared the petitioners' dismissal valid and awarded them P30,000.00
as nominal damages for the respondents' failure to observe due process.
The records show that the petitioners appealed the December 18, 2007 CA decision with this Court. In a
resolution dated August 4, 2008, the Court denied the petition. The Court likewise denied the petitioners'
subsequent motion for reconsideration, and thereafter issued an Entry of Judgment certifying that its August 4,
2008 resolution had become final and executory on March 9, 2009.
On January 31, 2008, the petitioners filed with the LA an Urgent Ex-Parte Motion for the Immediate
Release of the Garnished Amount.
In its March 13, 2008 order, the LA granted the petitioners' motion; it directed Metrobank-San Lorenzo to
release the P1,900,000.00 garnished amount. The LA found valid and meritorious the respondents' claim for
accrued wages in view of the respondents' refusal to reinstate the petitioners despite the final and executory
nature of the reinstatement aspect of its (LA's) May 31, 2005 decision. The LA noted that as of the December 18,
2007 CA decision (that reversed the illegal dismissal findings of the LA), the petitioners' accrued wages amounted
to P3,078,366.33.
In its July 16, 2008 resolution, 16 the NLRC affirmed in toto the LA's March 13, 2008 order. The NLRC
afterwards denied the respondents' motion for reconsideration for lack of merit.
The respondents assailed the July 16, 2008 decision and September 29, 2009 resolution of the NLRC via a
petition for certiorari filed with the CA.
The CA's ruling
The CA granted the respondents' petition. It reversed and set aside the July 16, 2008 decision and the
September 29, 2009 resolution of the NLRC and remanded the case to the Computation and Examination Unit of
the NLRC for the proper computation of the petitioners' accrued wages, computed up to February 24, 2006.
The CA agreed that the reinstatement aspect of the LA's decision is immediately executory even pending
appeal, such that the employer is obliged to reinstate and pay the wages of the dismissed employee during the
period of appeal until the decision (finding the employee illegally dismissed including the reinstatement order) is
reversed by a higher court. Applying this principle, the CA noted that the petitioners' accrued wages could have
been properly computed until December 18, 2007, the date of the CA's decision finding the petitioners validly
dismissed.
The CA, however, pointed out that when the LA's decision is "reversed by a higher tribunal, an employee
may be barred from collecting the accrued wages if shown that the delay in enforcing the reinstatement pending
appeal was without fault" on the employer's part. In this case, the CA declared that the delay in the execution of
the reinstatement order was not due to the respondents' unjustified act or omission. Rather, the petitioners' refusal
to comply with the February 21, 2006 return-to-work Memorandum that the respondents issued and personally
delivered to them (the petitioners) prevented the enforcement of the reinstatement order.
Thus, the CA declared that, given this peculiar circumstance (of the petitioners' failure to report for work),
the petitioners' accrued wages should only be computed until February 24, 2006 when they were supposed to
report for work per the returnto-work Memorandum. Accordingly, the CA reversed, for grave abuse of discretion,
the NLRC's July 16, 2008 decision that affirmed the LA's order to release the garnished amount.
Issues:
 The petitioners argue that the CA gravely erred when it ruled, contrary to Article 223, paragraph 3 of the
Labor Code, that the computation of their accrued wages stopped when they failed to report for work on
February 24, 2006.
 Additionally, the petitioners direct the Court's attention to the several pleadings that the respondents filed
to prevent the execution of the reinstatement aspect of the LA's May 31, 2005 decision, i.e., the Opposition
to the Issuance of the Writ of Execution, the Motion to Quash the Writ of Execution and the Motion
to Suspend the Order of Reinstatement. They also point out that in all these pleadings, the respondents
claimed that strained relationship barred their (the petitioners') reinstatement, evidently confirming the
respondents' lack of intention to reinstate them.
 Finally, the petitioners point out that the February 21, 2006 Memorandum directed them to report for work
at Clark Field, Angeles, Pampanga instead of at the NAIA-Domestic Airport in Pasay City where they had
been assigned. They argue that this directive to report for work at Clark Field violates Article 223,
paragraph 3 of the Labor Code that requires the employee's reinstatement to be under the same terms and
conditions prevailing prior to the dismissal.

 Thus, the petitioners claim that the delay in their reinstatement was in fact due to the respondents'
unjustified acts and that the respondents never really complied with the LA's reinstatement order.
Held:
We GRANT the petition.
Preliminary considerations: jurisdictional limitations of the Court's Rule 45 review of the CA's
Rule 65 decision in labor cases
In a Rule 45 petition for review on certiorari, what we review are the legal errors that the CA may have
committed in the assailed decision, in contrast with the review for jurisdictional errors that we undertake in an
original certiorari action. In reviewing the legal correctness of the CA decision in a labor case taken under Rule 65
of the Rules of Court, we examine the CA decision in the context that it determined the presence or the absence of
grave abuse of discretion in the NLRC decision before it and not on the basis of whether the NLRC decision, on the
merits of the case, was correct. Otherwise stated, we proceed from the premise that the CA undertook a Rule
65 review, not a review on appeal, of the NLRC decision challenged before it. Within this narrow scope of our Rule
45 review, the question that we ask is: Did the CA correctly determine whether the NLRC committed grave abuse
of discretion in ruling on the case?
In addition, the Court's jurisdiction in a Rule 45 petition for review on certiorari is limited to resolving only
questions of law.
The present petition essentially raises the question — whether the petitioners may recover the accrued
wages prior to the CA's reversal of the LA's May 31, 2005 decision. This is a question of law that falls well within
the Court's power in a Rule 45 petition.
Resolution of this question of law, however, is inextricably linked with the largely factual issue of whether
the accrued wages should be computed until December 17, 2008 when the CA reversed the illegal dismissal
findings of the LA or only until February 24, 2006 when the petitioners were supposed to report for work per the
February 21, 2006 Memorandum. In either case, the determination of this factual issue presupposes another
factual issue, i.e., whether the delay in the execution of the reinstatement order was due to the respondents' fault.
As questions of fact, they are proscribed by our Rule 45 jurisdiction; we generally cannot address these factual
issues except to the extent necessary to determine whether the CA correctly found the NLRC in grave abuse of
discretion in affirming the release of the garnished amount despite the respondents' issuance of and the
petitioners' failure to comply with the February 21, 2006 return-to-work Memorandum.
The jurisdictional limitations of our Rule 45 review of the CA's Rule 65 decision in labor cases,
notwithstanding, we resolve this petition's factual issues for we find legal errors in the CA's decision. Our
consideration of the facts taken within this narrow scope of our factual review power convinced us, as our
subsequent discussion will show, that no grave abuse of discretion attended the NLRC decision.
Nature of the reinstatement aspect of the LA's decision on a finding of illegal dismissal
Article 223 (now Article 229) of the Labor Code governs appeals from, and the execution of, the LA's
decision. Pertinently, paragraph 3, Article 223 of the Labor Code provides:
Article 223. APPEAL. —
xxx xxx xxx
In any event, the decision of the Labor Arbiter reinstating a dismissed or separated employee, insofar as
the reinstatement aspect is concerned, shall immediately be executory, pending appeal. The employee
shall either be admitted back to work under the same terms and conditions prevailing prior to his dismissal
or separation or, at the option of the employer, merely reinstated in the payroll. The posting of a bond by
the employer shall not stay the execution for reinstatement provided herein. [Emphasis and underscoring
supplied]
Under paragraph 3, Article 223 of the Labor Code, the LA's order for the reinstatement of an employee
found illegally dismissed is immediately executor even during pendency of the employer's appeal from the decision.
Under this provision, the employer must reinstate the employee — either by physically admitting him under the
conditions prevailing prior to his dismissal, and paying his wages; or, at the employer's option, merely reinstating
the employee in the payroll until the decision is reversed by the higher court.Failure of the employer to comply with
the reinstatement order, by exercising the options in the alternative, renders him liable to pay the employee's
salaries.
Otherwise stated, a dismissed employee whose case was favorably decided by the LA is entitled to receive
wages pending appeal upon reinstatement, which reinstatement is immediately executory. Unless the appellate
tribunal issues a restraining order, the LA is duty bound to implement the order of reinstatement and the employer
has no option but to comply with it.

Moreover, and equally worth emphasizing, is that an order of reinstatement issued by the LA is self-
executory, i.e., the dismissed employee need not even apply for and the LA need not even issue a writ of execution
to trigger the employer's duty to reinstate the dismissed employee. In Pioneer Texturizing Corp. v. NLRC, et al.,
decided in 1997, the Court clarified once and for all this self-executory nature of a reinstatement order. After
tracing back the various Court rulings interpreting the amendments introduced by Republic Act No. 6715 on the
reinstatement aspect of a labor decision under Article 223 of the Labor Code, the Court concluded that to
otherwise "require the application for and issuance of a writ of execution as prerequisites for the execution of a
reinstatement award would certainly betray and run counter to the very object and intent of Article 223, i.e., the
immediate execution of a reinstatement order."
In short, therefore, with respect to decisions reinstating employees, the law itself has determined a
sufficiently overwhelming reason for its immediate and automatic execution even pending appeal. The employer is
duty-bound to reinstate the employee, failing which, the employer is liable instead to pay the dismissed employee's
salary. The Court's consistent and prevailing treatment and interpretation of the reinstatement order as
immediately enforceable, in fact, merely underscores the right to security of tenure of employees that the
Constitution protects.
The employer is obliged to pay the dismissed employee's salary if he refuses to reinstate until
actual reinstatement or reversal by a higher tribunal; circumstances that may bar an employee from
receiving the accrued wages
As we amply discussed above, an employer is obliged to immediately reinstate the employee upon the LA's
finding of illegal dismissal; if the employer fails, it is liable to pay the salary of the dismissed employee. Of course,
it is not always the case that the LA's finding of illegal dismissal is, on appeal by the employer, upheld by the
appellate court. After the LA's decision is reversed by a higher tribunal, the employer's duty to reinstate the
dismissed employee is effectively terminated. This means that an employer is no longer obliged to keep the
employee in the actual service or in the payroll. The employee, in turn, is not required to return the wages that he
had received prior to the reversal of the LA's decision.
The reversal by a higher tribunal of the LA's finding (of illegal dismissal), notwithstanding, an employer,
who, despite the LA's order of reinstatement, did not reinstate the employee during the pendency of the appeal up
to the reversal by a higher tribunal may still be held liable for the accrued wages of the employee, i.e., the unpaid
salary accruing up to the time the higher tribunal reverses the decision. The rule, therefore, is that an employee
may still recover the accrued wages up to and despite the reversal by the higher tribunal. This entitlement of the
employee to the accrued wages proceeds from the immediate and self-executory nature of the reinstatement
aspect of the LA's decision.
By way of exception to the above rule, an employee may be barred from collecting the accrued wages if
shown that the delay in enforcing the reinstatement pending appeal was without fault on the part of the employer.
To determine whether an employee is thus barred, two tests must be satisfied: (1) actual delay or the fact that the
order of reinstatement pending appeal was not executed prior to its reversal; and (2) the delay must not be due to
the employer's unjustified act or omission. Note that under the second test, the delay must be without the
employer's fault. If the delay is due to the employer's unjustified refusal, the employer may still be required to pay
the salaries notwithstanding the reversal of the LA's decision.
Application of the two-fold test; the petitioners are entitled to receive their accrued salaries
until December 18, 2007
As we earlier pointed out, the core issue to be resolved is whether the petitioners may recover the accrued
wages until the CA's reversal of the LA's decision. An affirmative answer to this question will lead us to reverse the
assailed CA decision for legal errors and reinstate the NLRC's decision affirming the release of the garnished
amount. Otherwise, we uphold the CA's decision to be legally correct. To resolve this question, we apply the two-
fold test.
First, the existence of delay — whether there was actual delay or whether the order of reinstatement
pending appeal was not executed prior to its reversal? We answer this test in the affirmative.
To recall, on May 31, 2005, the LA rendered the decision finding the petitioners illegally dismissed and
ordering their immediate reinstatement. Per the records, the respondents received copy of this decision on July 8,
2005. On August 20, 2005, the petitioners filed before the LA a Motion for Issuance of Writ of Execution for their
immediate reinstatement. The LA issued the Writ of Execution on October 7, 2005. From the time the respondents
received copy of the LA's decision, and the issuance of the writ of execution, until the CA reversed this decision on
December 17, 2008, the respondents had not reinstated the petitioners, either by actual reinstatement or in the
payroll. This continued non-execution of the reinstatement order in fact moved the LA to issue an alias writ of
execution on February 16, 2006 and another writ of execution on April 24, 2007.
From these facts and without doubt, there was actual delay in the execution of the reinstatement aspect of
the LA's May 31, 2005 decision before it was reversed in the CA's decision.
Second, the cause of the delay — whether the delay was not due to the employer's unjustified act or
omission. We answer this test in the negative; we find that the delay in the execution of the reinstatement pending
appeal was due to the respondents' unjustified acts.
In reversing, for grave abuse of discretion, the NLRC's order affirming the release of the garnished
amount, the CA relied on the fact of the issuance of the February 21, 2006 Memorandum and of the petitioners'
failure to comply with its return-to-work directive. In other words, with the issuance of this Memorandum, the CA
considered the respondents as having sufficiently complied with their obligation to reinstate the petitioners. And,
the subsequent delay in or the non-execution of the reinstatement order was no longer the respondents' fault, but
rather of the petitioners who refused to report back to work despite the directive.
Our careful consideration of the facts and the circumstances that surrounded the case convinced us that
the delay in the reinstatement pending appeal was due to the respondents' fault. For one, the respondents filed
several pleadings to suspend the execution of the LA's reinstatement order, i.e., the opposition to the petitioners'
motion for execution filed on October 3, 2005; the motion to quash the October 7, 2005 writ of execution with
prayer to hold in abeyance the implementation of the reinstatement order; and the motion to suspend the order for
the petitioners' reinstatement filed on February 28, 2006 after the LA issued the February 16, 2006
alias writ of execution. These pleadings, to our mind, show a determined effort on the respondents' part to prevent
or suspend the execution of the reinstatement pending appeal.
Another reason is that the respondents, contrary to the CA's conclusion, did not sufficiently notify the
petitioners of their intent to actually reinstate them; neither did the respondents give them ample opportunity to
comply with the return-to-work directive. We note that the respondents delivered the February 21, 2006
Memorandum (requiring the petitioners to report for work on February 24, 2006) only in the afternoon of February
23, 2006. Worse, the respondents handed the notice to only one of the petitioners — Pelaez — who did not act in
representation of the others. Evidently, the petitioners could not reasonably be expected to comply with a directive
that they had no or insufficient notice of.
Lastly, the petitioners continuously and actively pursued the execution of the reinstatement aspect of the
LA's decision, i.e., by filing several motions for execution of the reinstatement order, and motion to cite the
respondents in contempt and recomputation of the accrued wages for the respondents' continued failure to
reinstate them.
These facts altogether show that the respondents were not at all sincere in reinstating the petitioners.
These facts — when taken together with the fact of delay — reveal the respondents' obstinate resolve and wilful
disregard of the immediate and selfexecutory nature of the reinstatement aspect of the LA's decision.
A further and final point that we considered in concluding that the delay was due to the respondents' fault
is the fact that per the 2005 Revised Rules of Procedure of the NLRC (2005 NLRC Rules), employers are required to
submit a report of compliance within ten (10) calendar days from receipt of the LA's decision, noncompliance with
which signifies a clear refusal to reinstate. Arguably, the 2005 NLRC Rules took effect only on January 7, 2006;
hence, the respondents could not have been reasonably expected to comply with this duty that was not yet in
effect when the LA rendered its decision (finding illegal dismissal) and issued the writ of execution in 2005.
Nevertheless, when the LA issued the February 16, 2006 alias writ of execution and the April 24, 2007 writ of
execution, the 2005 NLRC Rules was already in place such that the respondents had become duty-bound to submit
the required compliance report; their noncompliance with this rule all the more showed a clear and determined
refusal to reinstate.
All told, under the facts and the surrounding circumstances, the delay was due to the acts of the
respondents that we find were unjustified. We reiterate and emphasize, Article 223, paragraph 3, of the Labor
Code mandates the employer to immediately reinstate the dismissed employee, either by actually reinstating
him/her under the conditions prevailing prior to the dismissal or, at the option of the employer, in the payroll. The
respondents' failure in this case to exercise either option rendered them liable for the petitioners' accrued salary
until the LA decision was reversed by the CA on December 17, 2008. We, therefore, find that the NLRC, in
affirming the release of the garnished amount, merely implemented the mandate of Article 223; it simply
recognized as immediate and self-executory the reinstatement aspect of the LA's decision.
Accordingly, we reverse for legal errors the CA decision. We find no grave abuse of discretion attended the
NLRC's July 16, 2008 resolution that affirmed the March 13, 2008 decision of the LA granting the release of the
garnished amount.
ARABIT VS JARDINE PACIFIC FINANCE INC.

GR NO. 181719, April 21, 2014
Facts:
Petitioners were former regular employees of respondent Jardine Pacific Finance, Inc. (formerly MB
Finance) (Jardine). The petitioners were also officers and members of MB Finance Employees Association-FFW
Chapter (the Union), a legitimate labor union and the sole exclusive bargaining agent of the employees of Jardine.
On the claim of financial losses, Jardine decided to reorganize and implement a redundancy program among its
employees. The petitioners were among those affected by the redundancy program. Jardine thereafter hired
contractual employees to undertake the functions these employees used to perform.
The Union filed a notice of strike with the National Conciliation and Mediation Board (NCMB), questioning
the termination of employment of the petitioners who were also union officers. The Union alleged unfair labor
practice on the part of Jardine, as well as discrimination in the dismissal of its officers and members. They reached
a settlement but In the settlement, the petitioners accepted their redundancy pay without prejudice to their right to
question the legality of their dismissal with the NLRC. Jardine paid the petitioners a separation package composed
of their severance pay, plus their grossed up transportation allowance.
Issue:
Whether or not the petitioners was illegally dismissed because of the implementation of the redundancy
program.
Held:
Yes, We cannot accept Jardine‘s shallow understanding of the concepts of redundancy and retrenchment in
determining the validity of the severance of an employeremployee relationship. These rulings appropriately clarify
that redundancy does not need to be always triggered by a decline in the business. Primarily, employers resort
to redundancy when the functions of an employee have already become superfluous or in excess of what the
business requires. Thus, even if a business is doing well, an employer can still validly dismiss an employee from the
service due to redundancy if that employee‘s position has already become in excess of what the employer‘s
enterprise requires. From this perspective, it is illogical for Jardine to terminate the petitioners‘ employment and
replace them with contractual employees. The replacement effectively belies Jardine‘s claim that the petitioners‘
positions were abolished due to superfluity. Redundancy could have been justified if the functions of the petitioners
were transferred to other existing employees of the company. To dismiss the petitioners and hire new contractual
employees as replacements necessarily give rise to the sound conclusion that the petitioners‘ services have not
really become in excess of what Jardine‘s business requires.
Guidelines in implementing redundancy
This Court laid down the principle that the employer must use fair and reasonable criteria in the selection
of employees who will be dismissed from employment due to redundancy. Such fair and reasonable criteria may
include the following, but are not limited to: (a) less preferred status (e.g. temporary employee); (b) efficiency;
and (c) seniority. The presence of these criteria used by the employer shows good faith on its part and is evidence
that the implementation of redundancy was painstakingly done by the employer in order to properly justify the
termination from the service of its employees (Golden Thread Knitting Industries vs NLRC). For the implementation
of a redundancy program to be valid, the employer must comply with the following requisites: (1) written notice
served on both the employees and the Department of Labor and Employment at least one month prior to the
intended date of retrenchment; (2) payment of separation pay equivalent to at least one month pay or at least one
month pay for every year of service, whichever is higher; (3) good faith in abolishing the redundant positions; and
(4) fair and reasonable criteria in ascertaining what positions are to be declared redundant and accordingly
abolished (Asian Alcohol vs NLRC). The first level, based on Asian Alcohol, is broader as the case recognized
distinctions on a per position basis. At this level, Jardine failed to explain why among all of the
existing positions in its organization, Jardine chose the petitioners‘ posts as the ones which have already become
redundant and terminable. The second level, derived from Golden Thread, is more specific. Here the distinction
narrows down to the particular employees occupying the same positions which were already declared to be
redundant. At this level, Jardine‘s lapse is shown by its failure to explain why among all of its employees whose
positions were determined to be redundant, the petitioners were the ones selected to be dismissed from the
service.
MIRANT VS CARO
GR NO. 181490, April 23, 2014
Facts:
Respondent was hired by Mirant Pagbilao on January 3, 1994 as its Logistics Officer. In 2002, when
Southern Company was sold to Mirant, respondent was already a Supervisor of the Logistics and Purchasing
Department of petitioner. At the time of the severance of his employment, respondent was the Procurement
Supervisor of Mirant Pagbilao assigned at petitioner corporation‘s corporate office. As Procurement Supervisor, his
main task was to serve as the link between the Materials Management Department of petitioner corporation and its
staff, and the suppliers and service contractors in order to ensure that procurement is carried out in conformity
with set policies, procedures and practices. In addition, respondent was put incharge of ensuring the timely,
economical, safe and expeditious delivery of materials at the right quality and quantity to petitioner corporation‘s
plant. Respondent was also responsible for guiding and overseeing the welfare and training needs of the staff of
the Materials Management Department. Due to the nature of respondent‘s functions, petitioner corporation
considers his position as confidential. On November 3, 2004, petitioner corporation conducted a random drug test
where respondent was randomly chosen among its employees who would be tested for illegal drug use. Through
an Intracompany Correspondence, these employees were informed that they were selected for random drug
testing to be conducted on the same day that they received the correspondence. Respondent was duly notified that
he was scheduled to be tested after lunch on that day. His receipt of the notice was evidenced by his signature on
the correspondence.
There was phone call from his wife. She said there was a bombing incident near her workplace in Tel Aviv.
So he acted on and told the secretary of his department that respondent that he will give preferential attention to
the emergency phone call that he just received. He also told Torres that he would be back at the office as soon as
he has resolved his predicament.
On that same day, at around 6:15 p.m., respondent returned to petitioner corporation‘s office. When he
was finally able to charge his cellphone at the office, he received a text message from Tina Cecilia (Cecilia), a
member of the Drug Watch Committeethat conducted the drug test, informing him to participate in the said drug
test. He immediately called up Cecilia to explain the reasons for his failure to submit himself to the random drug
test that day. He also proposed that he would submit to a drug test the following day at his own expense.
Respondent never heard from Cecilia again.
On November 8, 2004, respondent received a Show Cause Notice15 from petitioner corporation through
Jaime Dulot (Dulot), his immediate supervisor, requiring him to explain in writing why he should not be charged
with "unjustified refusal to submit to random drug testing." Respondent submitted his written explanation16 on
November 11, 2004. Petitioner corporation further required respondent on December 14, 2004 to submit additional
pieces of supporting documents.
He was found guilty by the petitioner‘s corporation Investigating panel of ―unjustified refusal of to submit
random drug testing. and recommended a penalty of four working weeks suspension without pay, instead of
termination, due to the presence of mitigating circumstances. petitioner corporation‘s Asst. Vice President for
Material Management Department, George K. Lamela, Jr. (Lamela), recommended19 that respondent be
terminated from employment instead of merely being suspended.
Issue:
Whether or not respondent was validly terminated for his failure to take the mandatory drug test
Held:
No, We agree with the disposition of the appellate court that there was illegal dismissal in the case at bar.
While the adoption and enforcement by petitioner corporation of its Anti-Drugs Policy is recognized as a valid
exercise of its management prerogative as an employer, such exercise is not absolute and unbridled.
Managerial prerogatives are subject to limitations provided by law, collective bargaining agreements, and the
general principles of fair play and justice.
Petitioner corporation‘s subject Anti-Drugs Policy fell short of being fair and reasonable:
First. The policy was not clear on what constitutes "unjustified refusal" when the subject drug policy
prescribed that an employee‘s "unjustified refusal" to submit to a random drug test shall be punishable by the
penalty of termination for the first offense. To be sure, the term "unjustified refusal" could not possibly cover all
forms of "refusal" as the employee‘s resistance. The fact that petitioner corporation‘s own personnel had to dissect
the intended meaning of "unjustified refusal" is further proof that it is not clear on what context the term
"unjustified refusal" applies to.

Second. The penalty of termination imposed by petitioner corporation upon respondent fell short of being
reasonable. Company policies and regulations are generally valid and binding between the employer and the
employee unless shown to be grossly oppressive or contrary to law – as in the case at bar. Recognizing the
ambiguity in the subject policy, the CA was more inclined to adopt the recommendation of petitioner corporation‘s
own Investigating Panel over that of Sliman and the NLRC. Thus, We find that the recommended four (4) working
weeks‘ suspension without pay as the reasonable penalty to be imposed on [respondent] for his disobedience but
not the illegal termination of work.
Crisanto Castro Jr. Vs Ateneo de Naga University

G.R. No. 175293
Facts:
Petitioner is a regular and full-time faculty member of Ateneo de Naga University. He received from
respondent, the University President, informing him that he would no longer be renewed. Thus, petitioner filed a
complaint for illegal dismissal, and maintained that the petitioner was a participant and regular contributor to the
Ateneo de Naga Employees Retirement Plan (Plan); that upon reaching the age of 60 years old on June 26, 1999,
he was deemed automatically retired under the Plan; and that he had been allowed to teach after his retirement
only on contractual basis. The Labor Arbiter ruled in favor of petitioner and ordered respondent to reinstate the
petitioner and pay him back wages. Respondents appealed to the NLRC. Simultaneously, they submitted a
manifestation stating that neither actual nor payroll reinstatement of the petitioner could be effected because he
had meanwhile been employed as a Presidential Assistant for Southern Luzon Affairs with the position of
Undersecretary; and that his reinstatement would result in dual employment and double compensation which were
prohibited by existing civil service rules and regulations. Petitioner filed a motion to order the respondents to pay
his salaries and benefits.
The LA explained that Article 223 of the Labor Code granted to the employer the option to implement
either a physical or a payroll reinstatement, and that therefore, the respondents must first exercise the option
regardless of the petitioner‘s employment with the Government denied the petitioner‘s motion, but ordered
respondents to exercise the option of either actual or payroll reinstatement of the petitioner. NLRC reversed the
decision of the LA.
Held:
Claim for accrued benefits should be sustained despite dismissal of the petitioner‘s complaint. The
employer is obliged to reinstate and to pay the wages of the dismissed employee during the period of appeal until
its reversal bu the higher Court; and that because he was not reinstated either actually or by payroll, he should be
held entitled to the accrued salaries. Article 279 of the Labor Code, as amended, entitles an illegally dismissed
employee to reinstate. Article 223 of the Labor Code requires the reinstatement to be immediately executory even
pending appeal. The unjustified refusal of the employer to reinstate the dismissed employee would entitle the latter
to the payment of his salaries efective from the time when the employer failed to reinstate him; thus, it becomes
the ministerial duty of the LA to implement the order of reinstatement. An order or award for reinstatement does
not require a writ of execution it is already self executory. For as long as the employer continuously fails to actually
implement the reinstatement aspect of the decision of the LA, the employer‘s obligation to the employee for his
accrued backwages and other benefits continues to accumulate.
PHILIPPINE TOURISTERS, INC. v. MAS TRANSIT WORKERS UNION-ANGLO-KMU

G.R. No. 201237, September 3, 2014
FACTS:
 Samahan ng Manggagawa sa Mas Transit-Anglo-KMU (the Union) – a union organized through the
affiliation of certain MTI bus drivers/conductors with the Alliance of Nationalist and Genuine Labor
Organizations – filed a petition for certification election before the Department of Labor and Employment
(DOLE) - National Capital Region (NCR)
 The DOLE granted the Union‘s petition
 MTI decided to sell its passenger buses together with its Certificate of Public Convenience (CPC) issued by
the Land Transportation Franchising and Regulatory Board (LTFRB) to PTI
 PTI was issued a new CPC authorizing it to operate the service on the Baclaran-Malabon via EDSA route
using the passenger buses that were sold
 MTI apprised all of its employees of the sale and transfer of its operations to PTI, and the former‘s
intention to pay them separation benefits. The employees were also advised to apply anew with PTI should
they be interested to transfer
 MTI sent each of the individual respondents a Memorandum informing them of their termination from
work, effective on said date, in line with the cessation of its business operations caused by the sale of the
passenger buses to the new owners
 Claiming that the sale was intended to frustrate their right to self-organization and that there was no actual
transfer of ownership of the passenger buses as the stockholders of MTI and PTI are one and the same,
the Union, filed a complaint for illegal dismissal, unfair labor practice, i.e., illegal lock out, and damages
against MTI and PTI before the NLRC
 LA ruled in favor of the respondents, finding MTI and petitioners guilty of unfair labor practice, i.e., illegal
lock out
 Petitioners appealed before the NLRC by filing their Notice of Appeal and Appeal Memorandum
accompanied by a Manifestation with Motion for Reduction of Bond praying that the required bond covering
the monetary judgment be reduced in view of PTI‘s liquidity problems. Simultaneously, petitioners posted a
partial surety bond seeking that the same be considered as substantial compliance for purposes of
perfecting their appeal.
 Meanwhile, respondents opposed petitioners‘ motion to reduce bond and moved for the dismissal of their
appeal for failure to perfect the same as the bond posted was not in an amount equivalent to the full
judgment award as mandated by law
 Pending the NLRC‘s action, petitioners subsequently submitted their additional surety bond to cover the full
judgment award
 NLRC dismissed the appeal for petitioners‘ failure to post the required bond equal to the full judgment
award within the ten (10)-day reglementary period prescribed under the NLRC Rules of Procedure
 Petitioners moved for reconsideration and NLRC reinstated their appeal and rendered a Decision dismissing
the complaint against petitioner
 CA annulled and set aside the modified ruling of the NLRC finding the latter to have acted with grave abuse
of discretion in applying a liberal interpretation of the rules on perfection of appeal
ISSUE:
Whether or not NLRC is guilty of grave abuse of discretion when the latter gave due course to petitioner
despite its inability to perfect their appeal and consequently absolving petitioners from liability?
RULING:
For an appeal from the LA‘s ruling to the NLRC to be perfected the Labor Code requires the posting of a
cash or surety bond in an amount equivalent to the monetary award in the judgment appealed from.
the posting of a cash or surety bond in the amount equivalent to the monetary award in the judgment appealed
from.
While it has been settled that the posting of a cash or surety bond is indispensable to the perfection of an
appeal in cases involving monetary awards from the decision of the LA, the Rules nonetheless allows the reduction
of the bond upon a showing of (a) the existence of a meritorious ground for reduction, and (b) the posting of a
bond in a reasonable amount in relation to the monetary award.
The filing of the motion to reduce bond without compliance with the requisites in the preceding paragraph
shall not stop the running of the period to perfect an appeal.
Petitioners filed a motion to reduce bond claiming that they were suffering from liquidity problems and, in
support of their claim, submitted PTI‘s AFS which showed a deficit in income. Since this claim was not amply
controverted by respondents, the Court deems that the NLRC did not gravely abuse its discretion in deciding that
these circumstances constitute meritorious grounds for the reduction of the bond.
Azuelo vs. Zameco II Electric Cooperative, Inc.

GR No. 192573, October 22, 2014
Facts:
Petitioner Ricardo N. Azuelo (Azuelo) was employed by the respondent ZAMECO II Electric Cooperative Inc.
(ZAMECO) as a maintenance worker. It appears that sometime in March 2006, Azuelo filed with the Regional
Arbitration Branch (RAB) of the NLRC in San Fernando City, Pampanga a Complaint for illegal dismissal and non-
payment of benefits against ZAMECO. On July 14, 2006, Azuelo , instead of submitting his position paper, moved
that the submission of his position paper be extended to August 4, 2006, which was granted by LA Bactin. On
August 4, 2006, Azuelo again failed to submit his position paper. LA Bactin then directed Azuelo to submit his
position papers on August 22, 2006. On the said date, Azuelo to submit his position papers on August 22, 2006. On
the said date, Azuelo, instead of submitting his position paper, moved for the issuance of an order directing
ZAMECO to furnish him with a complete copy of the investigation report as regards his dismissal. On December 20,
2006, ZAMECO filed a Motion to Dismiss the second complaint filed by Azuelo on the ground of res judicata.
Issue:
Whether the dismissal of his first complaint for illegal dismissal on the ground of lack of interest on his part
to prosecute the same bars the filing of another complaint for illegal dismissal against ZAMECO based on the same
allegations or whether the dismissal of a complaint for illegal dismissal due to the unreasonable failure of the
complainant to submit his position paper amounts to a dismissal with prejudice.
Ruling:
The 2005 Revised Rules of Procedure of the NLRC ( 2005 Revised Rules), the rules applicable at the time
of the controversy, is silent as to the nature of the dismissal of a complaint on the ground of unreasonable failure
to submit a position paper by the complaint. Nevertheless, the 2005 Revised Rules, particularly Section 3, Rule 1
thereof, provides for the suppletory application of the Rules of Court to arbitration proceedings before LA‘s and the
NLRC in the absence of any applicable provisions therein, viz.:
Section 3. Suppletory Application of the Rules of Court. – In the absence of any applicable provisions in
these rules, and in order to effectuate the objectives of the Labor Code, the pertinent provisions of the Rules of
Court of the Philippines may, in the interest of expeditious dispensation of labor justice and whenever practicable
and convenient be applied by analogy or in a suppletory character and effect.
The unjustified failure of a complainant in arbitration proceedings befor the LA to submit his position paper
is akin to the case of a complainant‘s failure to prosecute his action for an unreasonable length of time in ordinary
civil proceedings. In both cases, the complainants are remiss, sans reasonable cause, to prove material allegations
in their respective complaints.
University of Pangasinan, inc. (UPI) v. Fernandez

GR No. 211228, Nov. 12, 2014
Facts:
A complaint for illegal dismissal was filed by Florentino and Nilda (respondets) against UPI‘s President
Duque, Executive Vice-President Amor and Director for Student Affairs Reyes (petitioners).
The Labor Arbiter ruled that Florentino and Nilda were illegally dismissed by the petitioners on the ground
that petitioners were dismissed from their positions as college instructors without just and valid cause. Hence,
petitioners were ordered to pay respondents backwages, allowances and other benefits computed from the date of
their dismissal on May 9, 2000 up to November 6, 2000, date of promulgation of decision.
When the case at bar reached to the Supreme Court, which rendered a decision in favor of respondents
and declared its resolution dated February 21, 2005 final and executory as of July 5, 2005, the respondents moved
for a re-computation of their award to include their backwages and other benefits from the date of the decision of
the Labor Arbiter up to the finality of the decision on July 11, 2005.
Petitioners arguments/contentions:
1. 13th month pay should not be included in the computation for ―other benefits‖ because the CA did not
explicitly stated it.
2. Even if backwages and benefits were really due, the computation should not include the period from February
21, 2002 to September 13, 2004, during which time the NLRC's disquisition that there was no illegal dismissal
stood.
3. Respondents turned 60 on December 11, 2002 and April 30, 2002, respectively. Thus, backwages and
separation pay could only be computed up to those dates since under both UPI's retirement plan and Article
287 of the Labor Code, 60 is the optional retirement age. Further, on July 18, 2005, respondents filed separate
claims for retirement benefits, hence, effectively admitting that 60 and not 65 is the retirement age for UPI's
faculty members.
Issue:
1. WON the inclusion of the 13th month pay in the computation approved by LA Flores but did not explicitly
mentioned by CA is proper.
2. WON the reckoning period of the computation of backwages and benefits awarded to the respondents is not
interrupted by the NRLC‘s reversal of LA‘s finding of illegal dismissal.
3. WON the CA properly imposed a legal interest upon the total monetary award reckoned from the Entry of
Judgment on July 11, 2005 until full satisfaction thereof.
4. WON the computation of backwages and separation pay due to the respondents properly includes the period
from 2002 to 2005.
Held:
1. Yes. The CA‘s non-explicit reference to the 13th month pay, its inclusion in the computation is proper. Entitled
to it is a right granted by PD No. 851. Besides, the computation of award for backwages and other benefits is a
mere legal consequence of the finding that there was illegal dismissal.
2. Yes. Although in Reyes case, the issue relates to the delay in filing of the complaint for illegal dismissal from
the time of termination, there is no preclusion to apply the doctrine that there should be no gap or interruption
in the reckoning period during which the dismissed employee is entitled to backwages and benefits. The
statutory intent in the award of backwages and benefits is clear. Further, an employer takes a risk in assailing
the LA‘s finding of illegal dismissal, but there is no insulation from the consequences therefrom.
3. Yes. But there is a modification to the rate indicated in the assailed decision to conform to the doctrine of
Nacar. According to the Nacar Doctrine, absence of an express stipulation as to the rate of interest that would
govern the parties, the rate allowed in judgments shall no longer be 12% per annum but 6% per annum
effective July 1, 2013. This should be applied prospectively and not retroactively.
4. Yes. First, 60 is merely an optional but not the mandatory retirement age. Second, the evidence submitted do
not show at whose option it is to retire the faculty members before the age of 65. Third, there is no proof
whatsoever that the faculty members of UPI indeed retire at 60 years of age. Fourth, respondents filed claims
for retirement pay in 2005 when they were both 63, hence, their acts did not necessarily constitute an
admission that 60 is the retirement age for UPI‘s faculty members.
Metroguards Security Agency Corp. v. Hilongo

G.R. No. 215630 (Resolution), [March 9, 2015]
Facts:
Hilongo was awarded by the Labor Arbiter backwages and separation pay dated April 30, 2010 as a result
of illegal dismissal. NLRC reversed this but CA reinstated the award of LA in a resolution dated March 26, 2013.
Petitioner did not appeal.
Hilongo then filed a motion for entry of judgment and a motion for clarification of Decision/Resolution
praying that the CA's March 26, 2013 Resolution be clarified and interpreted to include the amount of the award as
stated in the Labor Arbiter's Decision dated April 30, 2010 and additional award computed from May 1, 2010 to
March 26, 2013, or the date the CA denied petitioners' motion for reconsideration.
CA granted the motion for entry of judgment and noted Hilongo's motion for clarification of
Decision/Resolution. The CA held that when an appellate court affirms the Labor Arbiter's ruling, it is understood
that awards due to the illegally dismissed employee shall be recomputed in order to account for the period of time
that has lapsed from the rendition of the Labor Arbiter's decision up to its finality.
After the corresponding entry of judgment was issued on June 11, 2013, the case was remanded to the
Labor Arbiter. On July 9, 2013, respondent Hilongo filed a motion for issuance of writ of execution alleging that the
June 11, 2013 CA Resolution had confirmed that the amount of P170,520.31 awarded by the Labor Arbiter is not
sufficient, and that there is a need to compute additional monetary awards reckoned from May 1, 2010 up to April
26, 2013 or the date Hilongo presumed as the date of finality of the decision but the Labor Arbiter directed the
issuance of a writ of execution and ruled that the award of P170,520.31 as stated in the Labor Arbiter's Decision
dated April 30, 2010 prevails.
CA ordered the Labor Arbiter to re-compute Hilongo's monetary awards.
Issue:
Whether or not the CA erred in ordering the re-computation of Hilongo's monetary awards.
Held:
We rule in the negative. A decision that has acquired finality does not become immutable and unalterable.
The re-computation of the consequences of illegal dismissal upon execution of the decision does not constitute an
alteration or amendment of the final decision being implemented. The illegal dismissal ruling stands; only the
computation of monetary consequences of this dismissal is affected, and this is not a violation of the principle of
immutability of final judgments.
The April 30, 2010 Decision of the Labor Arbiter which ordered the payment of separation pay in lieu of
reinstatement, effectively ended the employment relationship of the parties on April 26, 2013, the date the CA
decision became final. Since the Labor Arbiter's computation of Hilongo's monetary award was up to the date of his
April 30, 2010 Decision only, the CA properly decreed the computation of additional back wages and separation
pay.
However, the CA incorrectly concluded that the April 30, 2010 Decision of the Labor Arbiter became final
on June 11, 2013, 28 contrary to its own finding that it became final and executory on April 26, 2013. 29 This led
to its erroneous computation of the additional back wages and separation pay of Hilongo, as well as reckoning the
date of the 12% legal interest. Following the teaching of Nacar v. Gallery Frames that the computation of the
monetary consequences (back wages and separation pay) of the illegal dismissal decision should be reckoned from
its finality, the additional back wages and separation pay of Hilongo should be computed from May 1, 2010 to
April 26, 2013. Further, the payment of legal interest of 12% per annum should also be from April 26, 2013 up
to June 30, 2013. Thereafter, in accordance with Bangko Sentral ng Pilipinas Monetary Board's Circular No. 799,
series of 2013, the legal interest computed from July 1, 2013 until the monetary awards were fully satisfied will be
6% per annum.
Seacrest Maritime Management, Inc., et. al. v. Mauricio G. Picar, Jr.

G.R. No. 209383, March 11, 2015
Facts:
Picar was employed by Sealion Shipping Ltd – UK through its local manning agent Seacrest as Chief Cook
on board MV Toisa Paladin continuously for several contracts from April 2005 to 2010. On September 24, 2010,
Picar experienced high fever, chilling, lumbar back pain, and difficulty in urinating accompanied with blood. He was
diagnosed with UTI and Renal Calculus. He was required to go back to the vessel and take a rest. Subsequently, he
was confined in Singapore and on October 2, 2010 he was repatriated.
In the Philippines, he was found to have kidney stone in his right kidney. He was diagnosed with Right
Renal Calculus and Essential Hypertension which were considered as work aggravated/related. He was declared
unfit to resume work as a seafarer in any capacity.
Picar filed a complaint for permanent disability compensation, balance of sick wages, reimbursement of
medical expenses, damages and attorney‘s fees. The LA found his illness was work-related and that the nature of
his work as a chief cook contributed to the aggravation of his condition. The NLRC affirmed this and ruled that
Picar‘s disability was permanent as he was totally unable to perform his job for more than 120 days from his
repatriation.
While the case was pending in the CA, Picar moved for the execution of the LA decision. The LA issued a
Writ of Execution and on August 13, 2012, petitioners paid the judgment award as evidenced by the Satisfaction of
Judgment pursuant to a Writ of Execution with Acknowledgment Receipt executed by the NLRC-NCR Sheriff on
August 13, 2012. On May 2, 2013, the CA dismissed the petition on the ground that the payment by petitioners of
the judgment award constituted an amicable settlement that had rendered the petition moot and academic.
Issue:
Whether or not the CA committed reversible error in dismissing the petition for having become moot and
academic.
Ruling:
Yes.
The settlement of the judgment award was by virtue of a writ of execution duly issued and was effected
specifically without prejudice to further recourse before the CA. There was nothing voluntary about the satisfaction
of the judgment award made in strict and compulsory compliance with Rule XI, Section 8 of the 2011 NLRC Rules
of Procedure. The terms of the settlement were fair to both the employer and the employee.
The equitable ruling in Career Philippines, relied upon by the CA, was inapplicable. In the said case, the LA
and the CA interpreted the petitioner‘s "conditional settlement" to be tantamount to an amicable settlement of the
case resulting in the mootness of the petition for certiorari. In this case, the conditional satisfaction of judgment
signed by the parties was highly prejudicial to the employee as the employee could no longer pursue other claims.
The agreement stated that the payment of the monetary award was without prejudice to the right of the employer
to file a petition for certiorari and appeal, while the employee agreed that she would no longer file any complaint or
prosecute any suit of action against the employer after receiving the payment.
However, in the case at bar, the Receipt of the Judgment Award with Undertaking was fair to both the
employer and the employee. It is clear that petitioner paid respondent subject to the terms and conditions stated in
the Receipt. The said agreement stipulated that respondent should return the amount to petitioner if the petition
for certiorari would be granted but without prejudice to respondent‘s right to appeal. The agreement, thus,
provided available remedies to both parties.
Therefore, the petition for certiorari was not rendered moot despite petitioner‘s satisfaction of the
judgment award, as the respondent had obliged himself to return the payment if the petition would be granted.
Waterfront Cebu City Casino Hotel vs. Ledesma

GR No. 197556, March 25, 2015
Facts:
Ildebrando (Ledesma), employed as a House Detective at the Waterfront Cebu City Casino Hotel, Inc., was
dismissed from employment after an investigation revealed that he kissed and mashed the breasts of one Christie
Mandal inside the hotel‘s elevator, while he exhibited his penis and asked Rosanna Lofrangco to masturbate him
inside the conference room. Ildrebrando thus filed a case for illegal dismissal before the NLRC. The Labor Arbiter,
finding the allegations against him mere concoctions, ruled Ildebrando illegally dismissed. However, the NLRC
reversed and set aside the LA ruling, averring that the sexual overtures of Ledesma constitute grave
misconduct. Ledesma‘s motion for reconsideration was denied by the NLRC on February 22, 201, and copy of the
denial was received by Atty. Gines Abellana, Ledesma‘s counsel on March 15, 2010. On May 17, 2010, or 63 days
after his receipt of the order denying the motion for reconsideration, Atty. Abellana filed a petition for certiorari
with the CA. Waterfront in its Comment prayed for the outright dismissal of the petition for its belated filing. On
August 5, 2010, Ledesma, with a new counsel, filed an Amended Petition for Certiorari thru a motion for leave to
file amended petition, contending that his receipt of the denial on March 24, 2010, not the receipt by Atty. Abellana
on March 15, 2010 should be the reckoning date of the 60-day period, hence the petition was timely filed on May
17, 2010. The CA granted Ledesma‘s motion for leave to file amended petition, and reversed and set aside the
NLRC ruling, hence Waterfront filed a petition for review with the Supreme Court, alleging that the CA erred in
granting the motion for leave to file amended petition and subsequently granting it. In his comment, Ledesma
assails the petition on the ground that the representative of the company resented a Community Tax Certificate as
proof of identity which violates the notarial law, as well as the absence of a certified true copy of the Secretary‘s
Certificate mentioned in the petition.
Issue:
Whether or not the petition for certiorari was timely filed.
Ruling:
The procedural infirmities pointed out by Ledesma are not adequate to cause the dismissal of the present
petition. Gaye Maureen Cenabre presented to the Notary Public a Community Tax Certificate numbered 27401128
to prove her identity instead of a current identification document issued by an official agency bearing her
photograph and signature as required by A.M. No. 02-8-13-SC. This rendered the juratin the
verification/certification of non-forum shopping of Waterfront as defective. Nonetheless, any flaw in the

verification, being only a formal, not a jurisdictional requirement, is not a fatal defect. In like manner, only the
judgment, order or resolution assailed in the petition are the attachments required under Section 4,Rule 45 of the
Rules of Court to be duplicate originals or certified true copies.
On the main issue, the unjustified failure of Ledesma to file his petition for certiorari before the CA within
the 60-day period is a ground for the outright dismissal of said petition.
Section 4, Rule 65 of the Rules of Court, as amended by A.M. No. 07-7-12-SC, reads:
SEC. 4. When and where to file the petition. – The petition shall be filed not later than sixty (60) days from
notice of the judgment, order or resolution. In case a motion for reconsideration or new trial is timely filed,
whether such motion is required or not, the petition shall be filed not later than sixty (60) days counted from the
notice of the denial of the motion.
In Laguna Metts Corporation v. Court of Appeals, we categorically ruled that the present rule now
mandatorily requires compliance with the reglementary period. The period can no longer be extended as
previously allowed before the amendment, thus:
As a rule, an amendment by the deletion of certain words or phrases indicates an intention to change its
meaning. It is presumed that the deletion would not have been made if there had been no intention to effect a
change in the meaning of the law or rule. The amended law or rule should accordingly be given a construction
different from that previous to its amendment.
The rationale for the amendments under A.M. No. 07-7-12-SC is essentially to prevent the use (or abuse)
of the petition for certiorari under Rule 65 to delay a case or even defeat the ends of justice. Deleting the
paragraph allowing extensions to file petition on compelling grounds did away with the filing of such motions. As
the Rule now stands, petitions for certiorari must be filed strictly within 60 days from notice of judgment or from
the order denying a motion for reconsideration.
In relaxing the rules and allowing an extension, Thenamaris Philippines, Inc. v. Court of Appeals reiterated
the necessity for the party invoking liberality to advance a reasonable or meritorious explanation for the failure to
file the petition for certiorari within the 60-day period.
The petition for certiorari was filed with the CA beyond the 60-day period
Ledesma erroneously asserted in his petition for certiorari filed before the CA, that the 60th day is May 15,
2010, counted from March 15, 2010. In computing a period, the first day shall be excluded, and the last included.
The negligence of Atty. Abellana in the computation of the 60-day period, and reckoning such period from
the party‘s receipt of the assailed NLRC resolution were similar arguments rejected in Labao v. Flores. In
the Labao case, the respondents maintained that they should not suffer the negligence of their counsel in the late
filing of their petition for certiorari, and the 60-day period be reckoned from their own notice of the NLRC‘s denial
of their motion for reconsideration. In rejecting said arguments we ruled as follows:
The general rule is that a client is bound by the acts, even mistakes, of his counsel in the realm of
procedural technique. The exception to this rule is when the negligence of counsel is so gross, reckless and
inexcusable that the client is deprived of his day in court. The failure of a party‘s counsel to notify him on time of
the adverse judgment, to enable him to appeal therefrom, is negligence that is not excusable. We have repeatedly
held that notice sent to counsel of record is binding upon the client, and the neglect or failure of counsel to inform
him of an adverse judgment resulting in the loss of his right to appeal is not a ground for setting aside a judgment
valid and regular on its face.
With the expiration of the 60-day period to file a petition for certiorari, a review of the Resolution of the
NLRC will be beyond the jurisdiction of any court. No longer assailable, the NLRC Resolution could not be altered
or modified, as previously held in Labao v. Flores:
The NLRC‘s resolution became final ten (10) days after counsel‘s receipt, and the respondents‘ failure to
file the petition within the required (60)-day period rendered it impervious to any attack through a Rule 65 petition
for certiorari. Thus, no court can exercise jurisdiction to review the resolution.
Needless to stress, a decision that has acquired finality becomes immutable and unalterable and may no
longer be modified in any respect, even if the modification is meant to correct erroneous conclusions of fact or law
and whether it will be made by the court that rendered it or by the highest court of the land. All the issues between
the parties are deemed resolved and laid to rest once a judgment becomes final and executory; execution of the
decision proceeds as a matter of right as vested rights are acquired by the winning party. After all, a denial of a
petition for being time-barred is tantamount to a decision on the merits. Otherwise, there will be no end to
litigation, and this will set to naught the main role of courts of justice to assist in the enforcement of the rule of law
and the maintenance of peace and order by settling justiciable controversies with finality.
Ledesma did not attempt to justify the belated filing of his petition for certiorari
The relaxation of procedural rules may be allowed only when there are exceptional circumstances to justify
the same. There should be an effort on the part of the party invoking liberality to advance a reasonable or
meritorious explanation for his/her failure to comply with the rules. Moreover, those who seek exemption from the
application of a procedural rule have the burden of proving the existence of exceptionally meritorious reason
warranting such departure. In Philippine National Bank v. Commissioner of Internal Revenue, we said:
It is an accepted tenet that rules of procedure must be faithfully followed except only when, for persuasive
and weighting reasons, they may be relaxed to relieve a litigant of an injustice commensurate with his failure to
comply with the prescribed procedure. Concomitant to a liberal interpretation of the rules of procedure,
however, should be an effort on the part of the party invoking liberality to adequately explain his failure to abide by
the rules. (Emphasis supplied)
Both in his petition and amended petition, Ledesma never invoked the liberality of the CA nor endeavored
to justify the belated filing of his petition. On the contrary, Ledesma remained firm that his petition was filed with
the CA within the reglementary period. Absent valid and compelling reasons for the procedural lapse, the desired
leniency cannot be accorded to Ledesma.
In sum, the late filing by Ledesma of his petition for certiorari, and his failure to justify his procedural lapse
to merit a lenient application of the rules divested the CA of jurisdiction to entertain the petition.
Manila Mining Corp vs. Amor

GR No. 182800, April 20, 2015
FACTS:
Respondents Lowito Amor, Rollybie Ceredon, Julius Cesar, Ronito Martinez and Fermin Tabili, Jr. were
regular employees of petitioner Manila Mining Corporation, a domestic corporation which operated a mining claim
in Placer, Surigao del Norte, in pursuit of its business of large-scale open-pit mining for gold and copper ore. In
compliance with existing environmental laws, petitioner maintained Tailing Pond No. 7 (TP No. 7), a tailings
containment facility required for the storage of waste materials generated by its mining operations. When the mine
tailings being pumped into TP No. 7 reached the maximum level in December 2000, petitioner temporarily shut
down its mining operations pending approval of its application to increase said facilty‘s capacity by the Department
of Environment and Natural Resources-Environment Management Bureau (DENR-EMB), Butuan City. Although the
DENR-EMB issued a temporary authority on 25 January 2001 for it to be able to continue operating TP No. 7 for
another six (6) months and to increase its capacity, petitioner failed to secure an extension permit when said
temporary authority eventually lapsed.
On 27 July 2001, petitioner served a notice, informing its employees and the Department of Labor and
Employment Regional Office No. XII (DOLE) of the temporary suspension of its operations for six months and the
temporary lay-off of two-thirds of its employees. After the lapse of said period, petitioner notified the DOLE on 11
December 2001 that it was extending the temporary shutdown of its operations for another six months. Adversely
affected by petitioner‘s continued failure to resume its operations, respondents filed the complaint for constructive
dismissal and monetary claims before the Regional Arbitration Branch No. XIII of the National Labor Relations
Commission (NLRC). On 25 October 2004, Executive Labor Arbiter Benjamin E. Pelaez rendered a Decision holding
petitioner liable for constructive dismissal in view of the suspension of its operations beyond the six-month period
allowed under Article 2867 of the Labor Code of the Philippines. Finding that the cause of suspension of petitioner‘s
business was not beyond its control, the Labor Arbiter applied Article 283of the same Code.
Aggrieved, petitioner filed its memorandum of appeal before the NLRC11 and moved for the reduction of
the appeal bond to P100,000.00, on the ground that its financial losses in the preceding years had rendered it
unable to put up one in cash and/or surety equivalent to the monetary award. In opposition, respondents moved
for the dismissal of the appeal in view of the fact that, despite receipt of the appealed decision, petitioner mailed
their copy of the memorandum of appeal only on 7 February 2005. Respondents also argued that the appeal bond
tendered by petitioner was so grossly disproportionate to monetary award for the same to be considered
substantial compliance with the requirements for the perfection of an appeal from a Labor Arbiter‘s decision.
Without addressing the procedural issues raised by respondents, however, the NLRC Fifth Division went on to
render a Resolution dated 25 April 2005 in NLRC CA No. M-008433-2005, reversing the appealed decision and
dismissing the complaint for lack of merit. Finding that the continued suspension of petitioner‘s operations was due
to circumstances beyond its control, the NLRC ruled that, under Article 283 of the Labor Code, respondents were
not even entitled to separation pay considering the eventual closure of their employer‘s business due to serious
business losses or financial reverses.
Respondents filed the Rule 65 petition for certiorari before the Mindanao Station of the CA. Insisting that
petitioner‘s memorandum of appeal was filed 65 days after the lapse of reglementary period for appeal,
respondents called attention to the fact that, as grossly inadequate as it already was vis-à-vis the P2,138,190.02
monetary award adjudicated in their favor, the check in the sum of P100,000.00 deposited by petitioner by way of
appeal bond was dishonored upon presentment for payment. Aside from the fact that the Labor Arbiter‘s decision
had already attained finality, respondents faulted the NLRC for applying Article 283 of the Labor Code absent
allegation and proof of compliance with the requirements for the closure of an employer‘s business due to serious
business losses. In its comment, on the other hand, petitioner claimed that, having caused the same to be
immediately funded, the check it issued for the appeal bond had since been deposited by the NLRC. Insisting that
the cessation of its operations was due to causes beyond its control, petitioner argued that the subsequent closure
of its business due to business losses exempted it from paying separation pay.
On 29 November 2007, the CA‘s then Twenty-Second Division rendered the herein assailed decision,
granting respondents‘ petition and nullifying the NLRC‘s 25 April 2005 Resolution. In reinstating the Labor Arbiter‘s
25 October 2004 Decision, the CA ruled that petitioner failed to perfect its appeal therefrom considering that the
copy of its 3 December 2004 Memorandum of Appeal intended for respondents was served the latter by registered
mail only on 7 February 2005. Aside from posting an unusually smaller sum as appeal bond, petitioner was likewise
faulted for replenishing the check it issued only on 1 April 2005 or 24 days before the rendition of the assailed
NLRC Decision.
ISSUE:
Whether or not the appeal was timely filed before the CA.
RULING:
Time and again, it has been held that the right to appeal is not a natural right or a part of due process; it is
merely a statutory privilege, and may be exercised only in the manner and in accordance with the provisions of
law. A party who seeks to avail of the right must, therefore, comply with the requirements of the rules, failing
which the right to appeal is invariably lost. Insofar as appeals from decisions of the Labor Arbiter are concerned,
Article 223 of the Labor Code of the Philippines provides that, "(d)ecisions, awards, or orders of the Labor Arbiter
are final and executory unless appealed to the [NLRC] by any or both parties within ten (10) calendar days from
the receipt of such decisions, awards or orders." In case of a judgment involving a monetary award, the same
provision mandates that, "an appeal by the employer may be perfected only upon the posting of a cash or surety
bond issued by a reputable bonding company duly accredited by the [NLRC] in the amount equivalent to the
monetary award in the judgment appealed from." Alongside the requirement that "the appellant shall furnish a
copy of the memorandum of appeal to the other party," the foregoing requisites for the perfection of an appeal are
reiterated under Sections 1, 4 and 6, Rule VI of the NLRC Rules of Procedure in force at the time petitioner
appealed the Labor Arbiter‘s 25 October 2004 Decision, viz.:
SECTION 1. PERIODS OF APPEAL. - Decisions, resolutions or orders of the Labor Arbiter shall be final and
executory unless appealed to the Commission by any or both parties within ten (10) calendar days from receipt of
such decisions, resolutions or orders of the Labor Arbiter. If the 10th x x x x day x x x x falls on a Saturday, Sunday
or a holiday, the last day to perfect the appeal shall be the next working day.
SECTION 4. REQUISITES FOR PERFECTION OF APPEAL. - (a) The Appeal shall be filed within the
reglementary period as provided in Section 1 of this Rule; shall be verified by appellant himself in accordance with
Section 4, Rule 7 of the Rules of Court, with proof of payment of the required appeal fee and the posting of a cash
or surety bond as provided in Section 6 of this Rule; shall be accompanied by memorandum of appeal in three (3)
legibly typewritten copies which shall state the grounds relied upon and the arguments in support thereof; the
relief prayed for; and a statement of the date when the appellant received the appealed decision, resolution or
order and a certificate of non-forum shopping with proof of service on the other party of such appeal. A mere
notice of appeal without complying with the other requisites aforestated shall not stop the running of the period for
perfecting an appeal. (Italics supplied)
SECTION 6. BOND. - In case the decision of the Labor Arbiter or the Regional Director involves a monetary
award, an appeal by the employer may be perfected only upon the posting of a cash or surety bond. The appeal
bond shall either be in cash or surety in an amount equivalent to the monetary award, exclusive of damages and
attorney‘s fees.
No motion to reduce bond shall be entertained except on meritorious grounds and upon the posting of a
bond in a reasonable amount in relation to the monetary award.
The filing of the motion to reduce bond without compliance with the requisites in the preceding paragraph
shall not stop the running of the period to perfect an appeal.
Having received the Labor Arbiter‘s Decision on 24 November 2004, petitioner had ten (10) calendar days
or until 4 December 2004 within which to perfect an appeal. Considering that the latter date fell on a Saturday,
petitioner had until the next working day, 6 December 2004, within which to comply with the requirements for the
perfection of its appeal. Our perusal of the record shows that, despite bearing the date 3 December 2004,
petitioner‘s memorandum of appeal was subscribed before Notary Public Ronald Rex Recidoro only on 6 December
2004. Without proof as to the actual date of filing of said pleading being presented by both parties, the CA
discounted the timeliness of its filing in light of the established fact that the copy thereof intended for respondents
was only served by registered mail on 7 February 2005.28 Since proof of service of the memorandum on appeal is
required for the perfection of an appeal from the decision of the Labor Arbiter, the CA ruled that "respondents filed
its appeal not earlier than 07 February 200[5], which is way beyond the ten-day reglementary period to appeal."
As allegation is not evidence, however, the rule is settled that the burden of evidence lies with the party
who asserts the affirmative of an issue. As the parties claiming the non-perfection of petitioner‘s appeal, it was,
therefore, respondents who had the burden of proving that said memorandum of appeal was, indeed, filed out of
time. By and of itself, the fact that the copy of memorandum of appeal intended for respondents was served upon
them by registered mail only on 7 February 2005 does not necessarily mean that petitioner‘s appeal from the Labor
Arbiter‘s decision was filed out of time. On the principle that justice should not be sacrificed for technicality, it has
been ruled that the failure of a party to serve a copy of the memorandum to the opposing party is not a
jurisdictional defect and does not bar the NLRC from entertaining the appeal. Considering that such an omission is
merely regarded as a formal lapse or an excusable neglect, the CA reversibly erred in ruling that, under the
circumstances, petitioner could not have filed its appeal earlier than 7 February 2005.
The question regarding the appeal bond rises from the record which shows that, in addition to its
memorandum of appeal, petitioner filed a 6 December 2004 motion for the reduction of the appeal bond on the
ground that the cash equivalent of the monetary award and/or cost of the surety bond have proven to be
prohibitive in view of the tremendous business losses it allegedly sustained. As supposed measure of its good faith
in complying with the Rules, petitioner attached to its motion Philam Bank Check No. 0000627153, dated 6
December2004, in the amount of P100,000.00 only. As pointed out by respondents, however, said check was
subsequently dishonored upon presentment for payment for insufficiency of funds. In its Ex-Parte Manifestation,
petitioner informed the NLRC that it "only learned belatedly that the same check was dishonored" as there
appeared to be "an inadvertent mix-up as other checks issued for [its] other obligations were negotiated ahead
thereof, leaving an insufficient balance in its account." As a consequence, petitioner claimed that "the deficiency in
deposit has been promptly and immediately replenished as soon as the check's dishonor was reported" and that
the same may already be re-deposited at any of NLRC's depositary banks.
The issue that has be devilled labor litigation for long has been clarified by the ruling in McBurnie v.
Ganzon, et al., which built on and extended the ruling that while it is true that reduction of the appeal bond has
been allowed in meritorious cases36 on the principle that substantial justice is better served by allowing appeals on
the merits,37it has been ruled that the employer should comply with the following conditions: (1) the motion to
reduce the bond shall be based on meritorious grounds; and (2) a reasonable amount in relation to the monetary
award is posted by the appellant, otherwise the filing of the motion to reduce bond shall not stop the running of
the period to perfect an appeal.
The McBurnie ruling pronounced:
Furthermore, on the matter of the filing and acceptance of motions to reduce appeal bond, as provided in
Section 6, Rule VI of the 2011 NLRC Rules of Procedure, the Court hereby RESOLVES that henceforth, the following
guidelines shall be observed:
(a) The filing of a motion to reduce appeal bond shall be entertained by the NLRC subject to the following
conditions: (1) there is meritorious ground; and (2) a bond in a reasonable amount is posted;
(b) For purposes of compliance with condition no. (2), a motion shall be accompanied by the posting of a
provisional cash or surety bond equivalent to ten percent (10), of the monetary award subject of the appeal,
exclusive of damages and attorney's fees;
(c) Compliance with the foregoing conditions shall suffice to suspend the running of the 10-day
reglementary period to perfect an appeal from the labor arbiter's decision to the NLRC;
(d) The NLRC retains its authority and duty to resolve the motion to reduce bond and determine the final
amount of bond that shall be posted by the appellant, still in accordance with the standards of meritorious grounds
and reasonable amount; and
(e) In the event that the NLRC denies the motion to reduce bond, or requires a bond that exceeds the
amount of the provisional bond, the appellant shall be given a fresh period of ten (10) days from notice of the
NLRC order within which to perfect the appeal by posting the required appeal bond.
In this case, we see that with no proof to substantiate its claim, petitioner moved for a reduction of the
appeal bond on the proferred basis of serious losses and reverses it supposedly sustained in the years prior to the
rendition of the Labor Arbiter's decision.
The first condition may be left for the nonce. As to the second condition, we may consider that the amount
ofP100,000.00 supposedly posted was provisional bond sufficient to suspend the running of the 10-day
reglementary period to perfect an appeal from the Labor Arbiter's decision. That would however not improve
petitioner's position one bit.
Respondent correctly called attention to the fact that the check submitted by petitioner was dishonored
upon presentment for payment, thereby rendering the tender thereof ineffectual. Although the NLRC chose not to
address the issue of the perfection of the appeal as well as the reduction of the bond in its Resolution, the record
shows that petitioner only manifested its deposit of the funds for the check 24 days before the resolution of its
appeal or 116 days after its right to appeal the Labor Arbiter‘s decision had expired. Having filed its motion and
memorandum on the very last day of the reglementary period for appeal, moreover, petitioner had no one but
itself to blame for failing to post the full amount pending the NLRC‘s action on its motion for reduction of the
appeal bond. If redundancy be risked it must be emphasized that the posting of a bond is indispensable to the
perfection of an appeal in cases involving monetary awards from the decision of the Labor Arbiter. Since it is the
posting of a cash or surety bond which confers jurisdiction upon the NLRC, the rule is settled that non-compliance
is fatal and has the effect of rendering the award final and executory.
Viewed in the light of the foregoing considerations, the CA cannot be faulted for no longer discussing the
merits of petitioner‘s case. Although appeal is an essential part of our judicial process, it has been held, time and
again, that the right thereto is not a natural right or a part of due process but is merely a statutory privilege. Thus,
the perfection of an appeal in the manner and within the period prescribed by law is not only mandatory but also
jurisdictional and failure of a party to conform to the rules regarding appeal will render the judgment final and
executory. Once a decision attains finality, it becomes the law of the case and can no longer be revised, reviewed,
changed or altered. The basic rule of finality of judgment is grounded on the fundamental principle of public policy
and sound practice that, at the risk of occasional error, the judgment of courts and the award of quasi-judicial
agencies must become final at some definite date fixed by law.
Without necessarily resulting to a termination of employment, an employer may at any rate, bona fide
suspend the operation of its business for a period of not exceeding six months under Article 286 of the Labor Code.
While the employer is, on the one hand, duty bound to reinstate his employees to their former positions without
loss of seniority rights if the operation of the business is resumed within six months, employment is deemed
terminated where the suspension exceeds said period. Not having resumed its operations within six months from
the time it suspended its operations on 27 July 2001, it necessarily follows that petitioner is liable to pay
respondents‘ separation pay computed at one (1) month pay or at least one-half (1/2) month pay for every year of
service, whichever is higher, as well as the damages and attorney‘s fees adjudicated by the Labor Arbiter. Without
proof of the serious business losses it allegedly sustained and/or compliance with the reportorial requirements
under Article 283 of the Labor Code, petitioner cannot expediently plead exemption from said liabilities due to the
supposed financial reverses which led to the eventual closure of its business. It is essentially required that the
alleged losses in business operations must be proven for, otherwise, said ground for termination would be
susceptible to abuse by scheming employers who might be merely feigning business losses or reverses in their
business ventures in order to ease out employees. The condition of business losses justifying retrenchment is
normally shown by audited financial documents like yearly balance sheets and profit and loss statements as well as
annual income tax returns which were not presented in this case.
Neither can petitioner evade said liabilities on the strength of the 28 July 2005 Decision rendered by the
CA's Twenty-Second Division in CAG.R. SP No. 00072, entitled Rosita Asumen, et al. v. National Labor Relations
Commission, et al., where its employees' claim for separation pay was denied on account of the subsequent closure
of its business due to serious business losses and financial reverses. Although the employees Rule 45 petition for
review on certiorari had been denied in the 7 February 2007 Resolution issued by this Court's Second Division in
UDK-13776, the ruling in said case can hardly be considered binding on respondents who were not parties thereto.
As for the inequality in benefits which would supposedly result if the CA's assailed decision and resolution were not
reversed, suffice it to say that this Court had sustained the claim for separation pay of petitioner's employees in the
case of Manila Mining Corp Employees Association-Federation of Free Workers Chapter, et al. v. Manila Mining
Corporation, et al. Stare decisis is inapplicable; the matter of separation pay for petitioner's employees has been
decided case to case.
WHEREFORE, premises considered, the petition is DENIED for lack of merit.
RIGHT TO SELF-ORGANIZATION
SAN MIGUEL CORP. vs. MANDAUE PACKING PRODUCTS

G.R. No. 152356, August 16, 2005
Facts:
On 15 June 1998, Respondent union, identifying itself as an affiliate of Federation of Free Workers (FFW), filed a
petition for certification election with the DOLE Regional Office. In the petition, respondent stated that it sought to
be certified and to represent the permanent rank-and-file monthly paid employees of the petitioner. The following
documents were attached to the petition:
(1) a Charter Certificate issued by FFW on 5 June 1998 certifying that respondent as of that date was duly certified
as a local or chapter of FFW;
(2) a copy of the constitution of respondent prepared by its Secretary, Noel T. Bathan and attested by its President,
Wilfred V. Sagun;
(3) a list of respondent‘s officers and their respective addresses, again prepared by Bathan and attested by Sagun;
(4) a certification signifying that respondent had just been organized and no amount had yet been collected from
its members, signed by respondent‘s treasurer Chita D. Rodriguez and attested by Sagun; and
(5) a list of all the rank-and-file monthly paid employees of the Mandaue Packaging Products Plants and Mandaue
Glass Plant prepared by Bathan and attested by Sagun.
Petitioner company filed a motion to dismiss the petition for certification election on the sole ground that the
respondent union is not listed or included in the roster of legitimate labor organizations.
Respondent then submitted to the BLR the same documents earlier attached to its petition for certification. The
accompanying letter stated that such documents were submitted in compliance with the requirements for the
creation of a local/chapter pursuant to the Labor Code and its Implementing Rules; and it was hoped that the
submissions would facilitate the listing of respondent under the roster of legitimate labor organizations. After
which, the Chief of LRD-DOLE Regional Office issued a Certificate of Creation of Local/Chapter certifying that from
30 July 1998, respondent has acquired legal personality as a labor organization or worker‘s association, it having
submitted all the required documents. Opting not to file a comment on the Motion to Dismiss, respondent instead
filed a Position Paper wherein it asserted that it had complied with all the necessary requirements for the conduct
of a certification election, and that the ground relied upon in the Motion to Dismiss was a mere technicality.
In turn, petitioner filed a comment, wherein it reiterated that respondent was not a legitimate labor organization at
the time of the filing of the petition. Petitioner also propounded that contrary to respondent‘s objectives of
establishing an organization representing rank-and-file employees, two of respondent‘s officers, namely Vice-
President Emannuel L. Rosell and Secretary Bathan, were actually supervisory employees. In support of this
allegation, petitioner attached various documents evidencing the designation of these two officers in supervisory
roles, as well as their exercise of various supervisory functions.[9] Petitioner cited Article 245 of the Labor Code,
which provides that supervisory employees shall not be eligible for membership in a labor organization of the rank-
and-file employees.
Agreeing with the petitioner company, the Med-Arbiter issued an Order dismissing respondent‘s petition for
certification election. The sole ground relied upon for the dismissal was the Med-Arbiter‘s Opinion that as of the
date of filing of the petition on 15 June 1998, respondent did not have the legal personality to file the said petition
for certification election.
Respondent union appealed the Med-Arbiter‘s order to the DOLE which reversed the same. The DOLE concluded
that respondent acquired legal personality as early as 15 June 1998, the date it submitted the required documents,
citing Section 3, Rule VI of the New Rules Implementing the Labor Code which deems that a local/chapter acquires
legal personality from the date of filing of the complete documentary requirements as mandated in the
Implementing Rules. DOLE‘s ruling was also affirmed by the CA.
Issues:
1. Whether or not the union has already acquired legal personality at the time of its filing for certification election.
2. Whether or not the union‘s president and secretary are supervisory employees and thus barred from
membership in that union.
Ruling:
1. The SC held that the union has already acquired legal personality at the time of its filing for certification election.
Section 3, Rule VI of Department Order No. 9 provides when the local/chapter acquires legal personality.
Section 3.Acquisition of legal personality by local chapter. – A local/chapter constituted in accordance with Section
1 of this Rule shall acquire legal personality from the date of filing of the complete documents enumerated therein.
Upon compliance with all the documentary requirements, the Regional Office or Bureau shall issue in favor of the
local/chapter a certificate indicating that it is included in the roster of legitimate labor organizations.
It is evident based on this rule that the local/chapter acquires legal personality from the date of the filing of the
complete documentary requirements, and not from the issuance of a certification to such effect by the Regional
Office or Bureau. On the other hand, a labor organization is deemed to have acquired legal personality only on the
date of issuance of its certificate of registration, which takes place only after the Bureau of Labor Relations or its
Regional Offices has undertaken an evaluation process lasting up until thirty (30) days, within which period it
approves or denies the application. In contrast, no such period of evaluation is provided in Department Order No. 9
for the application of a local/chapter, and more importantly, under it such local/chapter is deemed to acquire legal
personality ―from the date of filing‖ of the documents enumerated under Section 1, Rule VI, Book V.
Apart from promoting a policy of affiliation of local unions with national unions, there is a practical reason for
sanctioning a less onerous procedure for the registration of a local/chapter, as compared to the national union.
The local/chapter relies in part on the legal personality of the federation or national union, which in turn, had
already undergone evaluation and approval from the Bureau of Legal Relations or Regional Office. In fact, a
federation or national union is required, upon registration, to establish proof of affiliation of at least ten (10) locals
or chapters which are duly recognized as the collective bargaining agent in the establishment or industry in which
they operate; and the names and addresses of the companies where the locals or chapters operate and the list of
all the members in each of the companies. Once the national union or federation acquires legal personality upon
the issuance of its certificate or registration, its legal personality cannot be subject to collateral attack.
The fact that the local/chapter acquires legal personality from the moment the complete documentary
requirements are submitted seems to imply that the duty of the Bureau or Regional Office to register the
local/chapter is merely ministerial.
It is thus very clear that the issuance of the certificate of registration by the Bureau or Regional Office is not the
operative act that vests legal personality upon a local/chapter under Department Order No. 9. Such legal
personality is acquired from the filing of the complete documentary requirements enumerated in Section 1, Rule VI.
Admittedly, the manner by which respondent was deemed to have acquired legal personality by the DOLE and the
Court of Appeals was not in strict conformity with the provisions of Department Order No. 9.
In the ordinary course, it should have been FFW, and not respondent, which should have submitted the subject
documents to the Regional Office. Nonetheless, there is no good reason to deny legal personality or defer its
conferral to the local/chapter if it is evident at the onset that the federation or national union itself has already
through its own means established the local/chapter. In this case, such is evidenced by the Charter Certificate
dated 9 June 1998, issued by FFW, and attached to the petition for certification election. The Charter Certificate
expressly states that respondent has been issued the said certificate ―to operate as a local or chapter of the
[FFW]‖. The Charter Certificate expressly acknowledges FFW‘s intent to establish respondent as of 9 June 1998.
This being the case, the SC consider it permissible for respondent to have submitted the required documents itself
to the Regional Office, and proper that respondent‘s legal personality be deemed existent as of 15 June 1998, the
date the complete documents were submitted.
2. The SC held that they are not supervisory employees and are thus qualified to join the rank-and-file union.
Under the law, a managerial employee is ―one who is vested with powers or prerogatives to lay down and execute
management policies and/or to hire, transfer, suspend, layoff, recall, discharge, assign or discipline employees.‖ A
supervisory employee is ―one who, in the interest of the employer, effectively recommends managerial actions if
the exercise of such recommendatory authority is not merely routinary or clerical in nature but requires the use of
independent judgment.‘‖ Finally, ―all employees not falling within the definition of managerial or supervisory
employee are considered rank-and-file employees‖. It is also well-settled that the actual functions of an employee,
not merely his job title, are determinative in classifying such employee as managerial, supervisory or rank and file.
In the case of Emmanuel Rossell, appellant‘s evidence shows that he undertakes the filling out of evaluation reports
on the performance of mechanics, which in turn are used as basis for reclassification. Given a ready and standard
form to accomplish, coupled with the nature of the evaluation, it would appear that his functions are more
routinary than recommendatory and hardly leave room for independent judgment. In the case of Noel Bathan,
appellant‘s evidence does not show his job title although it shows that his recommendations on disciplinary actions
appear to have carried some weight on higher management. On this limited point, he may qualify as a supervisory
employee within the meaning of the law. This may, however, be outweighed by his other functions which are not
specified in the evidence.
Assuming that Bathan is a supervisory employee, this does not prove the existence of fraud, false statement or
misrepresentation. Because good faith is presumed in all representations, an essential element of fraud, false
statement and misrepresentation in order for these to be actionable is intent to mislead by the party making the
representation. In this case, there is no proof to show that Bathan, or appellee union for that matter, intended to
mislead anyone. If this was appellee union‘s intention, it would have refrained from using a more precise
description of the organization instead of declaring that the organization is composed of ‗rank and file monthlies‘.
Hence, the charge of fraud, false statement or misrepresentation cannot be sustained. Petition is denied.
GSIS vs. KAPISANAN NG MGA MANGGAGAWA SA GSIS

[G.R. No. 170132, December 6, 2006]
Facts:
This case has its genesis when the manager of GSIS issued a memorandum directing a number of its employees
who are union members to show cause why they should not be charged administratively for their participation in
the October 4 to October 7, 2004 mass action. The union‘s counsel sought reconsideration of said directive on the
ground, among others, that the subject employees resumed work in obedience to the return-to-work order thus
issued. The plea for reconsideration was, however, effectively denied by the filing, of administrative charges against
some 110 union members for grave misconduct and conduct prejudicial to the best interest of the service.
The union then filed with the CA a petition for prohibition against the GSIS on the ground that its members should
not be made to explain why they supported their union‘s cause since the Civil Service Resolution No. 021316,
otherwise known as the Guidelines for Prohibited Mass Action, Section 10 of which exhorts government agencies to
―harness all means within their capacity to accord due regard and attention to employees‘ grievances and facilitate
their speedy and amicable disposition through the use of grievance machinery or any other modes of settlement
sanctioned by law and existing civil service rules.‖ It argued that the organized demonstrating employees did
nothing more than air their grievances in the exercise of their ―broader rights of free expression‖ and are,
therefore, not amenable to administrative sanctions.
On the other hand, petitioners assert that the filing of the formal charges are but a natural consequence of the
service-disrupting rallies and demonstrations staged during office hours by the absenting GSIS employees, there
being appropriate issuances outlawing such kinds of mass action.
The CA ruled in favor of the union and held that the filing of administrative charges against the union members is
tantamount to grave abuse of discretion which may be the proper subject of the writ of prohibition.
Issue:
Whether or not the mass action staged by or participated in by said GSIS employees partook of a strike or
prohibited concerted mass action.
Ruling:
The SC held that the mass action staged by or participated in by said GSIS employees partook of a strike or
prohibited concerted mass action. It may be that the freedom of expression and assembly and the right to petition
the government for a redress of grievances stand on a level higher than economic and other liberties. Any
suggestion, however, about these rights as including the right on the part of government personnel to strike ought
to be, as it has been, trashed.
The Constitution itself qualifies its exercise with the provision ―in accordance with law.‖ This is a clear manifestation
that the state may, by law, regulate the use of this right, or even deny certain sectors such right. Executive Order
180 which provides guidelines for the exercise of the right of government workers to organize, for instance,
implicitly endorsed an earlier CSC circular which ―enjoins under pain of administrative sanctions, all government
officers and employees from staging strikes, demonstrations, mass leaves, walkouts and other forms of mass action
which will result in temporary stoppage or disruption of public service‖ by stating that the Civil Service law and
rules governing concerted activities and strikes in government service shall be observed.
The settled rule in this jurisdiction is that employees in the public service may not engage in strikes, mass leaves,
walkouts, and other forms of mass action that will lead in the temporary stoppage or disruption of public service.
The right of government employees to organize is limited to the formation of unions or associations only, without
including the right to strike, adding that public employees going on disruptive unauthorized absences to join
concerted mass actions may be held liable for conduct prejudicial to the best interest of the service.
With the view we take of the events that transpired on October 4-7, 2004, what respondent‘s members launched or
participated in during that time partook of a strike or, what contextually amounts to the same thing, a prohibited
concerted activity. The phrase ―prohibited concerted activity‖ refers to any collective activity undertaken by
government employees, by themselves or through their employees‘ organization, with the intent of effecting work
stoppage or service disruption in order to realize their demands or force concessions, economic or otherwise; it
includes mass leaves, walkouts, pickets and acts of similar nature . Indeed, for four straight days, participating
KMG members and other GSIS employees staged a walk out and waged or participated in a mass protest or
demonstration right at the very doorstep of the GSIS main office building. The record of attendance for the period
material shows that, on the first day of the protest, 851 employees, or forty eight per cent (48%) of the total
number of employees in the main office (1,756) took to the streets during office hours, from 6 a.m. to 2 p.m.,
leaving the other employees to fend for themselves in an office where a host of transactions take place every
business day. On the second day, 707 employees left their respective work stations, while 538 participated in the
mass action on the third day. A smaller number, i.e., 306 employees, but by no means an insignificant few, joined
the fourth day activity.
To say that there was no work disruption or that the delivery of services remained at the usual level of efficiency at
the GSIS main office during those four (4) days of massive walkouts and wholesale absences would be to
understate things. And to place the erring employees beyond the reach of administrative accountability would be to
trivialize the civil service rules, not to mention the compelling spirit of professionalism exacted of civil servants by
the Code of Conduct and Ethical Standards for Public Officials and Employees.
Ruling of the CA is reversed.
SAN MIGUEL CORP. EMPLOYEES UNION-PTGWO vs. SAN MIGUEL PACKAGING PRODUCTS
EMPLOYEES UNION
G.R. No. 171153, September 12, 2007
Facts:
Petitioner is the incumbent bargaining agent for the bargaining unit comprised of the regular monthly-paid rank
and file employees of the three divisions of San Miguel Corporation (SMC), namely, the San Miguel Corporate Staff
Unit (SMCSU), San Miguel Brewing Philippines (SMBP), and the San Miguel Packaging Products (SMPP), in all
offices and plants of SMC, including the Metal Closure and Lithography Plant in Laguna. It had been the certified
bargaining agent for 20 years – from 1987 to 1997.
Respondent is registered as a chapter of Pambansang Diwa ng Manggagawang Pilipino (PDMP). PDMP issued
Charter Certificate No. 112 to respondent on 15 June 1999. In compliance with registration requirements,
respondent submitted the requisite documents to the BLR for the purpose of acquiring legal personality. Upon
submission of its charter certificate and other documents, respondent was issued Certificate of Creation of Local or
Chapter PDMP-01 by the BLR on 6 July 1999. Thereafter, respondent filed with the Med-Arbiter of the DOLE
Regional Officer in the National Capital Region (DOLE-NCR), three separate petitions for certification election to
represent SMPP, SMCSU, and SMBP. All three petitions were dismissed, on the ground that the separate petitions
fragmented a single bargaining unit.
On 17 August 1999, petitioner filed with the DOLE-NCR a petition seeking the cancellation of respondent's
registration and its dropping from the rolls of legitimate labor organizations. In its petition, petitioner accused
respondent of committing fraud and falsification, and non-compliance with registration requirements in obtaining its
certificate of registration. It raised allegations that respondent violated Articles 239(a), (b) and (c) and 234(c) of
the Labor Code. Moreover, petitioner claimed that PDMP is not a legitimate labor organization, but a trade union
center, hence, it cannot directly create a local or chapter.
On 14 July 2000, DOLE-NCR Regional Director Maximo B. Lim issued an Order dismissing the allegations of fraud
and misrepresentation, and irregularity in the submission of documents by respondent. Regional Director Lim
further ruled that respondent is allowed to directly create a local or chapter. However, he found that respondent did
not comply with the 20% membership requirement and, thus, ordered the cancellation of its certificate of
registration and removal from the rolls of legitimate labor organizations.
Respondent appealed to the BLR.
While the BLR agreed with the findings of the DOLE Regional Director dismissing the allegations of fraud and
misrepresentation, and in upholding that PDMP can directly create a local or a chapter, it reversed the Regional
Director's ruling that the 20% membership is a requirement for respondent to attain legal personality as a labor
organization.
Invoking the power of the appellate court to review decisions of quasi-judicial agencies, petitioner filed with the
Court of Appeals a Petition for Certiorari under Rule 65 of the 1997 Rules of Civil Procedure.
The Court of Appeals, in a Decision dated 9 March 2005, dismissed the petition and affirmed the Decision of the
BLR
Hence, this Petition for Certiorari under Rule 45 of the Revised Rules of Court.
Issues:
1. Whether or not the private respondent is required to submit the number of employees and names of all its
members comprising at least 20% of the employees in the bargaining unit where it seeks to operate
2. Whether or not PDMP as a trade union center is a legitimate labor organization and has the power to create a
local or chapter
Ruling:
There is merit in petitioner's contentions.
A legitimate labor organization is defined as "any labor organization duly registered with the Department of Labor
and Employment, and includes any branch or local thereof."The mandate of the Labor Code is to ensure strict
compliance with the requirements on registration because a legitimate labor organization is entitled to specific
rights under the Labor Code, and are involved in activities directly affecting matters of public interest. Registration
requirements are intended to afford a measure of protection to unsuspecting employees who may be lured into
joining unscrupulous or fly-by-night unions whose sole purpose is to control union funds or use the labor
organization for illegitimate ends.Legitimate labor organizations have exclusive rights under the law which cannot
be exercised by non-legitimate unions, one of which is the right to be certified as the exclusive representative of all
the employees in an appropriate collective bargaining unit for purposes of collective bargaining. The acquisition of
rights by any union or labor organization, particularly the right to file a petition for certification election, first and
foremost, depends on whether or not the labor organization has attained the status of a legitimate labor
organization.
The procedure for registration of a local or chapter of a labor organization is provided in Book V of the
Implementing Rules of the Labor Code, as amended by Department Order No. 9 which took effect on 21 June
1997, and again by Department Order No. 40 dated 17 February 2003. The Implementing Rules as amended by
D.O. No. 9 should govern the resolution of the petition at bar since respondent's petition for certification election
was filed with the BLR in 1999; and that of petitioner on 17 August 1999.
The applicable Implementing Rules enunciates a two-fold procedure for the creation of a chapter or a local. The
first involves the affiliation of an independent union with a federation or national union or industry union. The
second, finding application in the instant petition, involves the direct creation of a local or a chapter through the
process of chartering.
A duly registered federation or national union may directly create a local or chapter by submitting to the DOLE
Regional Office or to the BLR two copies of the following:
(a) A charter certificate issued by the federation or national union indicating the creation or establishment of the
local/chapter;
(b) The names of the local/chapter's officers, their addresses, and the principal office of the local/chapter; and
(c) The local/chapter's constitution and by-laws; Provided, That where the local/chapter's constitution and by-laws
is the same as that of the federation or national union, this fact shall be indicated accordingly.
All the foregoing supporting requirements shall be certified under oath by the Secretary or the Treasurer of the
local/chapter and attested to by its President.
The Implementing Rules stipulate that a local or chapter may be directly created by a federation or national union.
A duly constituted local or chapter created in accordance with the foregoing shall acquire legal personality from the
date of filing of the complete documents with the BLR. The issuance of the certificate of registration by the BLR or
the DOLE Regional Office is not the operative act that vests legal personality upon a local or a chapter under
Department Order No. 9. Such legal personality is acquired from the filing of the complete documentary
requirements enumerated in Section 1, Rule VI.
Petitioner insists that Section 3 of the Implementing Rules, as amended by Department Order No. 9, violated Article
234 of the Labor Code when it provided for less stringent requirements for the creation of a chapter or local. This
Court disagrees.
Article 234 of the Labor Code provides that an independent labor organization acquires legitimacy only upon
its registration with the BLR:
Any applicant labor organization, association or group of unions or workers shall acquire legal personality and shall
be entitled to the rights and privileges granted by law to legitimate labor organizations upon issuance of the
certificate of registration based on the following requirements:
(a) Fifty pesos (P50.00) registration fee;

(b) The names of its officers, their addresses, the principal address of the labor organization, the minutes of the
organizational meetings and the list of the workers who participated in such meetings;
(c) The names of all its members comprising at least twenty percent (20%) of all the employees in the bargaining
unit where it seeks to operate;
(d) If the applicant union has been in existence for one or more years, copies of its annual financial reports; and
(e) Four (4) copies of the constitution and by-laws of the applicant union, minutes of its adoption or ratification,
and the list of the members who participated in it. (Italics supplied.)
It is emphasized that the foregoing pertains to the registration of an independent labor organization, association or
group of unions or workers.
However, the creation of a branch, local or chapter is treated differently. This Court, in the landmark case of
Progressive Development Corporation v. Secretary, Department of Labor and Employment , declared that when an
unregistered union becomes a branch, local or chapter, some of the aforementioned requirements for registration
are no longer necessary or compulsory. Whereas an applicant for registration of an independent union is mandated
to submit, among other things, the number of employees and names of all its members comprising at least 20% of
the employees in the bargaining unit where it seeks to operate, as provided under Article 234 of the Labor Code
and Section 2 of Rule III, Book V of the Implementing Rules, the same is no longer required of a branch, local or
chapter. The intent of the law in imposing less requirements in the case of a branch or local of a registered
federation or national union is to encourage the affiliation of a local union with a federation or national union in
order to increase the local union's bargaining powers respecting terms and conditions of labor.
Subsequently, in Pagpalain Haulers, Inc. v. Trajano where the validity of Department Order No. 9 was directly put in
issue, this Court was unequivocal in finding that there is no inconsistency between the Labor Code and Department
Order No. 9.As to petitioner's claims that respondent obtained its Certificate of Registration through fraud and
misrepresentation, this Court finds that the imputations are not impressed with merit. In the instant case, proof to
declare that respondent committed fraud and misrepresentation remains wanting. This Court had, indeed, on
several occasions, pronounced that registration based on false and fraudulent statements and documents confer no
legitimacy upon a labor organization irregularly recognized, which, at best, holds on to a mere scrap of paper.
Under such circumstances, the labor organization, not being a legitimate labor organization, acquires no rights.
This Court emphasizes, however, that a direct challenge to the legitimacy of a labor organization based on fraud
and misrepresentation in securing its certificate of registration is a serious allegation which deserves careful
scrutiny. Allegations thereof should be compounded with supporting circumstances and evidence. The records of
the case are devoid of such evidence. Furthermore, this Court is not a trier of facts, and this doctrine applies with
greater force in labor cases. Findings of fact of administrative agencies and quasi-judicial bodies, such as the BLR,
which have acquired expertise because their jurisdiction is confined to specific matters, are generally accorded not
only great respect but even finality.
Still, petitioner postulates that respondent was not validly and legitimately created, for PDMP cannot create a local
or chapter as it is not a legitimate labor organization, it being a trade union center.
Petitioner's argument creates a predicament as it hinges on the legitimacy of PDMP as a labor organization. Firstly,
this line of reasoning attempts to predicate that a trade union center is not a legitimate labor organization. In the
process, the legitimacy of PDMP is being impugned, albeit indirectly. Secondly, the same contention premises that a
trade union center cannot directly create a local or chapter through the process of chartering.
Anent the foregoing, as has been held in a long line of cases, the legal personality of a legitimate labor
organization, such as PDMP, cannot be subject to a collateral attack. The law is very clear on this matter. Article
212 (h) of the Labor Code, as amended, defines a legitimate labor organization as "any labor organization duly
registered with the DOLE, and includes any branch or local thereof." On the other hand, a trade union center is any
group of registered national unions or federations organized for the mutual aid and protection of its members; for
assisting such members in collective bargaining; or for participating in the formulation of social and employment
policies, standards, and programs, and is duly registered with the DOLE in accordance with Rule III, Section 2 of
the Implementing Rules.
The Implementing Rules stipulate that a labor organization shall be deemed registered and vested with legal
personality on the date of issuance of its certificate of registration. Once a certificate of registration is issued to a
union, its legal personality cannot be subject to collateral attack. It may be questioned only in an independent
petition for cancellation in accordance with Section 5 of Rule V, Book V of the Implementing Rules. The
aforementioned provision is enunciated in the following:
Sec. 5.Effect of registration. The labor organization or workers' association shall be deemed registered and vested
with legal personality on the date of issuance of its certificate of registration. Such legal personality cannot
thereafter be subject to collateral attack, but may be questioned only in an independent petition for cancellation in
accordance with these Rules.
PDMP was registered as a trade union center and issued Registration Certificate No. FED-11558-LC by the BLR on
14 February 1991. Until the certificate of registration of PDMP is cancelled, its legal personality as a legitimate labor
organization subsists. Once a union acquires legitimate status as a labor organization, it continues to be recognized
as such until its certificate of registration is cancelled or revoked in an independent action for cancellation. It bears
to emphasize that what is being directly challenged is the personality of respondent as a legitimate labor
organization and not that of PDMP. This being a collateral attack, this Court is without jurisdiction to entertain
questions indirectly impugning the legitimacy of PDMP.
Corollarily, PDMP is granted all the rights and privileges appurtenant to a legitimate labor organizationand continues
to be recognized as such until its certificate of registration is successfully impugned and thereafter cancelled or
revoked in an independent action for cancellation.We now proceed to the contention that PDMP cannot directly
create a local or a chapter, it being a trade union center.This Court reverses the finding of the appellate court and
BLR on this ground, and rules that PDMP cannot directly create a local or chapter.
After an exhaustive study of the governing labor law provisions, both statutory and regulatory, we find no legal
justification to support the conclusion that a trade union center is allowed to directly create a local or chapter
through chartering. Apropos, we take this occasion to reiterate the first and fundamental duty of this Court, which
is to apply the law. The solemn power and duty of the Court to interpret and apply the law does not include the
power to correct by reading into the law what is not written therein.
Presidential Decree No. 442, better known as the Labor Code, was enacted in 1972. Being a legislation on social
justice, the provisions of the Labor Code and the Implementing Rules have been subject to several amendments,
and they continue to evolve, considering that labor plays a major role as a socio-economic force. The Labor Code
was first amended by Republic Act No. 6715, and recently, by Republic Act No. 9481. Incidentally, the term trade
union center was never mentioned under Presidential Decree No. 442, even as it was amended by Republic Act No.
6715. The term trade union center was first adopted in the
Implementing Rules, under Department Order No. 9.
Culling from its definition as provided by Department Order No. 9, a trade union center is any group of registered
national unions or federations organized for the mutual aid and protection of its members; for assisting such
members in collective bargaining; or for participating in the formulation of social and employment policies,
standards, and programs, and is duly registered with the DOLE in accordance with Rule III, Section 2 of the
Implementing Rules. The same rule provides that the application for registration of an industry or trade union
center shall be supported by the following:
(a) The list of its member organizations and their respective presidents and, in the case of an industry union, the
industry where the union seeks to operate;
(b) The resolution of membership of each member organization, approved by the Board of Directors of such union;
(c) The name and principal address of the applicant, the names of its officers and their addresses, the minutes of
its organizational meeting/s, and the list of member organizations and their representatives who attended such
meeting/s; and
(d) A copy of its constitution and by-laws and minutes of its ratification by a majority of the presidents of the
member organizations, provided that where the ratification was done simultaneously with the organizational
meeting, it shall be sufficient that the fact of ratification be included in the minutes of the organizational meeting.
Evidently, while a "national union" or "federation" is a labor organization with at least ten locals or chapters or
affiliates, each of which must be a duly certified or recognized collective bargaining agent; a trade union center, on
the other hand, is composed of a group of registered national unions or federations.
The Implementing Rules, as amended by Department Order No. 9, provide that "a duly registered federation or
national union" may directly create a local or chapter. The provision reads:
Section 1.Chartering and creation of a local/chapter. – A duly registered federation or national union may directly
create a local/chapter by submitting to the Regional Office or to the Bureau two (2) copies of the following:
(a) A charter certificate issued by the federation or national union indicating the creation or establishment of the
local/chapter;
(b) The names of the local/chapter's officers, their addresses, and the principal office of the local/chapter; and
(c) The local/chapter's constitution and by-laws; provided that where the local/chapter's constitution and by-laws is
the same as that of the federation or national union, this fact shall be indicated accordingly.
Department Order No. 9 mentions two labor organizations either of which is allowed to directly create a local or
chapter through chartering – a duly registered federation or a national union. Department Order No. 9 defines a
"chartered local" as a labor organization in the private sector operating at the enterprise level that acquired legal
personality through a charter certificate, issued by a duly registered federation or national union and reported to
the Regional Office in accordance with Rule III, Section 2-E of these Rules.
Republic Act No. 9481 or "An Act Strengthening the Workers' Constitutional Right to Self-Organization, Amending
for the Purpose Presidential Decree No. 442, As Amended, Otherwise Known as the Labor Code of the Philippines"
lapsed into law on 25 May 2007 and became effective on 14 June 2007. This law further amends the Labor Code
provisions on Labor Relations.
Article 234 now includes the term trade union center, but interestingly, the provision indicating the procedure for
chartering or creating a local or chapter, namely Article 234-A, still makes no mention of a "trade union center."
Also worth emphasizing is that even in the most recent amendment of the implementing rules, there was no
mention of a trade union center as being among the labor organizations allowed to charter.
This Court deems it proper to apply the Latin maxim expressio unius est exclusio alterius. Under this maxim of
statutory interpretation, the expression of one thing is the exclusion of another. When certain persons or things are
specified in a law, contract, or will, an intention to exclude all others from its operation may be inferred. If a statute
specifies one exception to a general rule or assumes to specify the effects of a certain provision, other exceptions
or effects are excluded. Where the terms are expressly limited to certain matters, it may not, by interpretation or
construction, be extended to other matters. Such is the case here. If its intent were otherwise, the law could have
so easily and conveniently included "trade union centers" in identifying the labor organizations allowed to charter a
chapter or local. Anything that is not included in the enumeration is excluded therefrom, and a meaning that does
not appear nor is intended or reflected in the very language of the statute cannot be placed therein. The rule is
restrictive in the sense that it proceeds from the premise that the legislating body would not have made specific
enumerations in a statute if it had the intention not to restrict its meaning and confine its terms to those expressly
mentioned. Expressium facit cessare tacitum. What is expressed puts an end to what is implied. Casus omissus pro
omisso habendus est. A person, object or thing omitted must have been omitted intentionally.
Therefore, since under the pertinent status and applicable implementing rules, the power granted to labor
organizations to directly create a chapter or local through chartering is given to a federation or national union, then
a trade union center is without authority to charter directly.
The ruling of this Court in the instant case is not a departure from the policy of the law to foster the free and
voluntary organization of a strong and united labor movement, and thus assure the rights of workers to self-
organization. The mandate of the Labor Code in ensuring strict compliance with the procedural requirements for
registration is not without reason. It has been observed that the formation of a local or chapter becomes a handy
tool for the circumvention of union registration requirements. Absent the institution of safeguards, it becomes a
convenient device for a small group of employees to foist a not-so-desirable federation or union on unsuspecting
co-workers and pare the need for wholehearted voluntariness, which is basic to free unionism. As a legitimate labor
organization is entitled to specific rights under the Labor Code and involved in activities directly affecting public
interest, it is necessary that the law afford utmost protection to the parties affected. However, as this Court has
enunciated in Progressive Development Corporation v. Secretary of Department of Labor and Employment, it is not
this Court's function to augment the requirements prescribed by law. Our only recourse, as previously discussed, is
to exact strict compliance with what the law provides as requisites for local or chapter formation.
In sum, although PDMP as a trade union center is a legitimate labor organization, it has no power to directly create
a local or chapter. Thus, SMPPEU-PDMP cannot be created under the more lenient requirements for chartering, but
must have complied with the more stringent rules for creation and registration of an independent union, including
the 20% membership requirement.
Petition is GRANTED. The Decision of the Court of Appeals in is REVERSED and SET ASIDE. The Certificate of
Registration of San Miguel Packaging Products Employees Union–Pambansang Diwa ng Manggagawang Pilipino is
ORDERED CANCELLED, and SMPPEU-PDMP DROPPED from the rolls of legitimate labor organizations. Costs
against petitioner.
DONG SEUNG INC. vs. BUREAU OF LABOR RELATIONS

G.R. No. 162356, April 14, 2008
Facts:
Petitioner filed with the Department of Labor and Employment (DOLE), Region IV a Petition for cancellation of the
union registration of respondent union on the grounds that the List of Officers and Constitution and By-laws which
the respondent union attached to its application for union registration contain the union secretary's certification but
the same is not under oath, contrary to Section 1, Rule VI of the Implementing Rules of Book V of the Labor
Code, as amended by Department Order No. 9, series of 1997; and that, as shown in a Sinumpaang Petisyon, 148
out of approximately 200 employees-members have since denounced respondent union for employing deceit in
obtaining signatures to support its registration application.
DOLE (Region IV) Regional Director Ricardo Martinez, Sr. delisted from the roster of legitimate labor organization
the Charter Certificate [of] NAMAWU-Local 188. Respondent union appealed to the Bureau of Labor Relations BLR
gave due course to the appeal and granted the same, it ordered that NAMAWU-Local 188, shall remain in the
roster of legitimate labor organizations.
After its motion for reconsideration was denied by the BLR, petitioner filed with the CA a Petition for Certiorari,
insisting that the BLR acted with grave abuse of discretion in giving due course to respondent union‘s appeal
despite its having been filed out of time. The CA dismissed the petition and the motion for reconsideration which
was subsequently filed by the petitioner.
Issue:
Whether or not the CA erred in sustaining the BLR when it declared respondent‘s union registration valid.
Ruling:
The BLR found respondent union‘s appeal tardy yet gave due course to it on account of its inherent merit. The CA
found respondent union‘s appeal to have ―substantially complied with the requirements provided by law.
The requirement that the union secretary certify under oath all documents and papers filed in support of an
application for union registration is imposed by Article 235 of the Labor Code, to wit:
Art. 235. Action on application. The Bureau shall act on all applications for registration within thirty (30)
days from filing.
All requisite documents and papers shall be certified under oath by the secretary or the treasurer of the
organization, as the case may be, and attested to by its president.
In reversing DOLE Region IV, the BLR cited its Advisory, dated October 14, 1998, which interprets the requirement
under Article 235, to wit:
Pursuant to Rule XVII, Section 1 of Department Order No. 09, Series of 1997 x x x. [T]he Bureau of Labor
Relations is empowered, consistent with the State policy to promote unionism, to ―devise or prescribe such
forms as are necessary to facilitate the process of registration of labor organizations x x x,‖ including the
chartering of locals or chapters. Accordingly, the Bureau has devised and transmitted to the Regional
Offices the appropriate official registration forms, particularly the following:
xxxx
5. BLR Reg. Form No. 5-LOC-LO. S. 1998 For Chartering Locals/ Chapters
xxxx
Part I of each of the first seven forms is a space provided for the notarization of the application x x x.
However, considering that applicants are not yet fully familiar with the forms in spite of orientation and
seminar conducted, some applications have been submitted without using the forms prescribed by the
Bureau. In lieu of submitting a notarized application using the official forms, some applicants comply with
the requirements by having their supporting documents separately notarized.
To prevent inconvenience to the public, particularly to the applicants, the Regional Offices are hereby advised that
applications submitted with supporting documents which are separately notarized need not comply with the
notarization requirement under Part I or Part II, as the case may be, of the prescribed forms. x x x
Accordingly, the absence of notarization under Part I or Part II of the appropriate forms shall not be a basis for
denying applications where it appears that all the required supporting documents have already been notarized or
attested. (Emphasis supplied)
The BLR explained that under the foregoing Advisory, the certification issued by respondent union‘s secretary may
be notarized either separately or along with the main application. The BLR noted that respondent union correctly
availed of the second option:
A perusal of the registration records of the [respondent] revealed that respondent‘s registration application was
sufficient in form and substance, having been notarized as provided in the BLR official forms. (Atty. Manuel E.
Robles notarized such application on 8 February 1999 at Cavite City.) All the other supporting documents to the
charter certificate issued by the National Mines and Allied Workers Union were certified true and correct by the
secretary and attested to by the president.
Thus, from the standpoint of compliance, [respondent] x x x submitted all the documentary requirements for the
creation of a local/chapter in accordance with Section 1, Rule VI, D.O. 9 series of 1997. [28] (Emphasis supplied)
Indeed, all that Article 235 requires is that the secretary‘s certification be under oath. It does not prescribe a
specific manner of its notarization. Based on its interpretation of Article 235, the BLR, in its October 14, 1998
Advisory, allows for the wholesale notarization of a union‘s application for registration and recognizes the effects
thereof even on the attachments, including the secretary‘s certification. This is a reasonable interpretation
considering that the form of notarization contemplated in said Advisory adequately serves the purpose of Article
235, which is to forestall fraud and misrepresentation. More importantly, such interpretation of the BLR is accorded
great weight by the Court for it is said agency which is vested with authority and endowed with expertise to
implement the law in question.
The other ground cited by DOLE Region IV in canceling the registration of respondent union is that the latter
allegedly committed misrepresentation in securing the signatures of its members. The CA and BLR, on the other
hand, assign no credence to the Sinumpaang Petisyon for it is a mere photocopy, the genuineness and due
execution of which cannot be reasonably ascertained. Another factor which militates against the veracity of the
allegations in the Sinumpaang Petisyon is the lack of particularities on how, when and where respondent union
perpetrated the alleged fraud on each member. Such details are crucial for in the proceedings for cancellation of
union registration on the ground of fraud or misrepresentation, what needs to be established is that the specific act
or omission of the union deprived the complaining employees-members of their right to choose.
WHEREFORE, the petition is DENIED.
DEL PILAR ACADEMY ET AL. vs. DEL PILAR ACADEMY EMPLOYEES UNION
[G.R. No. 170112, April 30, 2008]
Facts:
Respondent Del Pilar Academy Employees Union (the UNION) is the certified collective bargaining representative of
teaching and non-teaching personnel of petitioner Del Pilar Academy (DEL PILAR), an educational institution
operating in Imus, Cavite.
On September 15, 1994, the UNION and DEL PILAR entered into a Collective Bargaining Agreement (CBA) granting
salary increase and other benefits to the teaching and non-teaching staff.
The UNION then assessed agency fees from non-union employees, and requested DEL PILAR to deduct said
assessment from the employees‘ salaries and wages. DEL PILAR, however, refused to effect deductions claiming
that the non-union employees were not amenable to it.
Traversing the complaint, DEL PILAR denied committing unfair labor practices against the UNION. It justified the
non-deduction of the agency fees by the absence of individual check off authorization from the non-union
employees. As regards the proposal to amend the provision on summer vacation leave with pay, DEL PILAR
alleged that the proposal cannot be considered unfair for it was done to make the provision of the CBA
conformable to the DECS‘ Manual of Regulations for Private Schools.
The Labor Arbiter ruled in favor of the union that DEL PILAR should have deducted the union fees from the non-
union employees citing article 248 of the Labor Code. On appeal, the National Labor Relations Commission (NLRC)
affirmed the Arbiter‘s ruling. In gist, it upheld the UNION‘s right to agency fee, but did not consider DEL PILAR‘s
failure to deduct the same an unfair labor practice. The UNION‘s motion for reconsideration having been denied, it
then went to the CA via certiorari. On July 19, 2005, the CA rendered the assailed decision, affirming with
modification the resolutions of the NLRC.
Like the Arbiter and the NLRC, the CA upheld the UNION‘s right to collect agency fees from non-union employees,
but did not adjudge DEL PILAR liable for unfair labor practice. However, it ordered DEL PILAR to deduct agency
fees from the salaries of non-union employees.
Issue:
Whether or not the UNION is entitled to collect agency fees from non-union members, and if so, whether an
individual written authorization is necessary for a valid check off.
Ruling:
The collection of agency fees in an amount equivalent to union dues and fees, from employees who are not union
members, is recognized by Article 248(e) of the Labor Code. When so stipulated in a collective bargaining
agreement or authorized in writing by the employees concerned, the Labor Code and its Implementing Rules
recognize it to be the duty of the employer to deduct the sum equivalent to the amount of union dues, as agency
fees, from the employees' wages for direct remittance to the union. The system is referred to as check off. No
requirement of written authorization from the non-union employees is necessary if the non-union employees accept
the benefits resulting from the CBA.
DEL PILAR urges this Court to reverse the CA ruling insofar as it ordered the deduction of agency fees from the
salaries of non-union employees, arguing that such conclusion proceeds from a misplaced premise that the salary
increase arose from the CBA.
The argument cannot be sustained.
Contrary to what DEL PILAR wants to portray, the grant of annual salary increase is not the only provision in the
CBA that benefited the non-union employees. The UNION negotiated for other benefits, namely, limitations on
teaching assignments to 23 hours per week, additional compensation for overload units or teaching assignments in
excess of the 23 hour per week limit, and payment of longevity pay. It also negotiated for entitlement to summer
vacation leave with pay for two (2) months for teaching staff who have rendered six (6) consecutive semesters of
service. For the non-teaching personnel, the UNION worked for their entitlement to fifteen (15) days leave with
pay. These provisions in the CBA surely benefited the non-union employees, justifying the collection of, and the
UNION‘s entitlement to, agency fees.
Accordingly, no requirement of written authorization from the non-union employees is needed to effect a valid
check off. Article 248(e) makes it explicit that Article 241, paragraph (o), [requiring written authorization is
inapplicable to non-union members, especially in this case where the non-union employees receive several benefits
under the CBA.
As explained by this Court in Holy Cross of Davao College, Inc. v. Hon. Joaquin viz.:
The employee's acceptance of benefits resulting from a collective bargaining agreement justifies the deduction of
agency fees from his pay and the union's entitlement thereto. In this aspect, the legal basis of the union's right to
agency fees is neither contractual nor statutory, but quasi-contractual, deriving from the established principle that
non-union employees may not unjustly enrich themselves by benefiting from employment conditions negotiated by
the bargaining union.
WHEREFORE, the petition is DENIED.

S.S. VENTURES INTERNATIONAL INC. vs. S.S. VENTURES LABOR UNION

G.R. No. 161690, July 23, 2008
Facts:
Petitioner S.S. Ventures International, Inc. (Ventures), a PEZA-registered export firm with principal place of
business at Phase I-PEZA-Bataan Export Zone, Mariveles, Bataan, is in the business of manufacturing sports shoes.
Respondent S.S. Ventures Labor Union (Union), on the other hand, is a labor organization registered with the
Department of Labor and Employment (DOLE).
On March 21, 2000, the Union filed with DOLE-Region III a petition for certification election in behalf of the rank-
and-file employees of Ventures. Five hundred forty two (542) signatures, 82 of which belong to terminated
Ventures employees, appeared on the basic documents supporting the petition.
On August 21, 2000, Ventures filed a Petition to cancel the Unions certificate of registration invoking the grounds
set forth in Article 239(a) of the Labor Code, the petition alleged the following:
(1) The Union deliberately and maliciously included the names of more or less 82 former employees no longer
connected with Ventures in its list of members who attended the organizational meeting and in the
adoption/ratification of its constitution and by-laws held on January 9, 2000 in Mariveles, Bataan; and the Union
forged the signatures of these 82 former employees to make it appear they took part in the organizational meeting
and adoption and ratification of the constitution;
(2) The Union maliciously twice entered the signatures of three persons namely: Mara Santos, Raymond
Balangbang, and Karen Agunos;
(3) No organizational meeting and ratification actually took place; and
(4) The Unions application for registration was not supported by at least 20% of the rank-and-file employees of
Ventures, or 418 of the total 2,197-employee complement. Since more or less 82 of the 500[3] signatures were
forged or invalid, then the remaining valid signatures would only be 418, which is very much short of the 439
minimum (2197 total employees x 20% = 439.4) required by the Labor Code.
In a Decision dated April 6, 2001, Regional Director Ana C. Dione of DOLE-Region III found for Ventures.
Aggrieved, the Union interposed a motion for reconsideration, a recourse which appeared to have been forwarded
to the Bureau of Labor Relations (BLR). Although it would later find this motion to have been belatedly filed, the
BLR, over the objection of Ventures which filed a Motion to Expunge, gave it due course and treated it as an
appeal.Despite Venturesmotion to expunge the appeal, the BLR Director rendered on October 11, 2002 a decisionin
BLR-A-C-60-6-11-01, granting the Unions appeal and reversing the decision of Dione.
Ventures sought reconsideration of the above decision but was denied by the BLR.Ventures then went to the Court
of Appeals (CA) on a petition for certiorari under Rule 65. On October 20, 2003, the CA rendered a Decision,
dismissing Ventures petition. Ventures motion for reconsideration met a similar fate.
Hence, this petition for review under Rule 45.
Issue:
Whether or not there was fraud or misrepresentation on the part of the Union sufficient to justify cancellation of its
registration.
Ruling:
The petition lacks merit. The right to form, join, or assist a union is specifically protected by Art. XIII, Section 3 of
the Constitution and such right, according to Art. III, Sec. 8 of the Constitution and Art. 246 of the Labor Code,
shall not be abridged. Once registered with the DOLE, a union is considered a legitimate labor organization
endowed with the right and privileges granted by law to such organization. While a certificate of registration
confers a union with legitimacy with the concomitant right to participate in or ask for certification election in a
bargaining unit, the registration may be canceled or the union may be decertified as the bargaining unit, in which
case the union is divested of the status of a legitimate labor organization. Among the grounds for cancellation is
the commission of any of the acts enumerated in Art. 239(a) of the Labor Code, such as fraud and
misrepresentation in connection with the adoption or ratification of the unions constitution and like documents. The
Court, has in previous cases, said that to decertify a union, it is not enough to show that the union includes
ineligible employees in its membership. It must also be shown that there was misrepresentation, false statement,
or fraud in connection with the application for registration and the supporting documents, such as the adoption or
ratification of the constitution and by-laws or amendments thereto and the minutes of ratification of the
constitution or by-laws, among other documents.
Essentially, Ventures faults both the BLR and the CA in finding that there was no fraud or misrepresentation on the
part of the Union sufficient to justify cancellation of its registration. In this regard, Ventures makes much of, first,
the separate hand-written statements of 82 employees who, in gist, alleged that they were unwilling or harassed
signatories to the attendance sheet of the organizational meeting.
We are not persuaded. As aptly noted by both the BLR and CA, these mostly undated written statements submitted
by Ventures on March 20, 2001, or seven months after it filed its petition for cancellation of registration, partake of
the nature of withdrawal of union membership executed after the Unions filing of a petition for certification election
on March 21, 2000. We have in precedent cases said that the employees withdrawal from a labor union made
before the filing of the petition for certification election is presumed voluntary, while withdrawal after the filing of
such petition is considered to be involuntary and does not affect the same. Now then, if a withdrawal from union
membership done after a petition for certification election has been filed does not vitiate such petition, is it not but
logical to assume that such withdrawal cannot work to nullify the registration of the union? Upon this light, the
Court is inclined to agree with the CA that the BLR did not abuse its discretion nor gravely err when it concluded
that the affidavits of retraction of the 82 members had no evidentiary weight.
It cannot be over-emphasized that the registration or the recognition of a labor union after it has submitted the
corresponding papers is not ministerial on the part of the BLR. Far from it. After a labor organization has filed the
necessary registration documents, it becomes mandatory for the BLR to check if the requirements under Art. 234 of
the Labor Code have been sedulously complied with. If the unions application is infected by falsification and like
serious irregularities, especially those appearing on the face of the application and its attachments, a union should
be denied recognition as a legitimate labor organization. Prescinding from these considerations, the issuance to the
Union of Certificate of Registration No. RO300-00-02-UR-0003 necessarily implies that its application for registration
and the supporting documents thereof are prima facie free from any vitiating irregularities.
Second, Ventures draws attention to the inclusion of 82 individuals to the list of participants in the January 9,
2000 organizational meeting. Ventures submits that the 82, being no longer connected with the company, should
not have been counted as attendees in the meeting and the ratification proceedings immediately afterwards.
The assailed inclusion of the said 82 individuals to the meeting and proceedings adverted to is not really fatal to
the Unions cause for, as determined by the BLR, the allegations of falsification of signatures or misrepresentation
with respect to these individuals are without basis. The Court need not delve into the question of whether these 82
dismissed individuals were still Union members qualified to vote and affix their signature on its application for
registration and supporting documents. Suffice it to say that, as aptly observed by the CA, the procedure for
acquiring or losing union membership and the determination of who are qualified or disqualified to be members are
matters internal to the union and flow from its right to self-organization.
To our mind, the relevancy of the 82 individuals active participation in the Unions organizational meeting and the
signing ceremonies thereafter comes in only for purposes of determining whether or not the Union, even without
the 82, would still meet what Art. 234(c) of the Labor Code requires to be submitted, to wit:
Art. 234. Requirements of Registration.Any applicant labor organization x x x shall acquire legal personality
and shall be entitled to the rights and privileges granted by law to legitimate labor organizations upon issuance of
the certificate of registration based on the following requirements:
xxxx
(c) The names of all its members comprising at least twenty percent (20%) of all the employees in the bargaining
unit where it seeks to operate.
The bare fact that three signatures twice appeared on the list of those who participated in the organizational
meeting would not, to our mind, provide a valid reason to cancel Certificate of Registration No. RO300-00-02-UR-
0003. As the Union tenably explained without rebuttal from Ventures, the double entries are no more than normal
human error, effected without malice. Even the labor arbiter who found for Ventures sided with the Union in its
explanation on the absence of malice.
The cancellation of a unions registration doubtless has an impairing dimension on the right of labor to self-
organization. Accordingly, we can accord concurrence to the following apt observation of the BLR: [F]or fraud and
misrepresentation [to be grounds for] cancellation of union registration under Article 239 [of the Labor Code], the
nature of the fraud and misrepresentation must be grave and compelling enough to vitiate the consent of a
majority of union members.
In its Comment, the Union points out that for almost seven (7) years following the filing of its petition, no
certification election has yet been conducted among the rank-and-file employees. If this be the case,the delay has
gone far enough and can no longer be allowed to continue. The CA is right when it said that Ventures should not
interfere in the certification election by actively and persistently opposing the certification election of the Union. A
certification election is exclusively the concern of employees and the employer lacks the legal personality to
challenge it. In fact, jurisprudence frowns on the employers interference in a certification election for such
interference unduly creates the impression that it intends to establish a company union.
WHEREFORE, the petition is DENIED. The Decision and Resolution dated respectively of the CA are AFFIRMED.
S.S. Ventures Labor Union shall remain in the roster of legitimate labor organizations, unless it has in the meantime
lost its legitimacy for causes set forth in the Labor Code. Costs against petitioner.
INGUILLO ET AL. vs. FIRST PHIL. SCALES INC., ET AL.

[G.R. No. 165407, June 5, 2009]
Facts:
First Philippine Scales, Inc. (FPSI), a domestic corporation engaged in the manufacturing of weighing scales,
employed Bergante and Inguillo as assemblers. In 1991, FPSI and First Philippine Scales Industries Labor Union
(FPSILU) entered into a Collective Bargaining Agreement, the duration of which was for a period of 5 years starting
September 12, 1991 until September 12, 1996. On September 19, 1991, the members of FPSILU ratified the CBA in
a document entitled RATIPIKASYON NG KASUNDUAN. Bergante and Inguillo, who were members of FPSILU, signed
the said document.
During the lifetime of the CBA, Bergante, Inguillo and several FPSI employees joined another union, the
Nagkakaisang Lakas ng Manggagawa (NLM), which was affiliated with a federation called KATIPUNAN (NLM-
KATIPUNAN, for brevity). Subsequently, NLM-KATIPUNAN filed with the Department of Labor and Employment
(DOLE) an intra-union dispute against FPSILU and FPSI. In said case, the Med-Arbiter decided in favor of FPSILU. It
also ordered the officers and members of NLM-KATIPUNAN to return to FPSILU the amount of P90,000.00
pertaining to the union dues erroneously collected from the employees. Upon finality of the Med-Arbiter's Decision,
a Writ of Execution was issued to collect the adjudged amount from NLM-KATIPUNAN. However, as no amount was
recovered, notices of garnishment were issued to United Coconut Planters Bank and to FPSI for the latter to hold
for FPSILU the earnings of Domingo Grutas, Jr. (Grutas) and Inguillo, formerly FPSILU's President and Secretary for
Finance, respectively.
The executive board and members of the FPSILU addressed a document denominated as "Petisyon"to FPSI's
general manager, Amparo Policarpio (Policarpio), seeking the termination of the services of the following
employees, namely: Grutas, Yolanda Tapang, Shirley Tapang, Gerry Trinidad, Gilbert Lucero, Inguillo, Bergante, and
Vicente Go, on the following grounds: (1) disloyalty to the Union by separating from it and affiliating with a rival
Union, the NLM-KATIPUNAN; (2) dereliction of duty by failing to call periodic membership meetings and to give
financial reports; (3) depositing Union funds in the names of Grutas and former Vice-President Yolanda Tapang,
instead of in the name of FPSILU, care of the President; (4) causing damage to FPSI by deliberately slowing down
production, preventing the Union to even attempt to ask for an increase in benefits from the former; and (5)
poisoning the minds of the rest of the members of the Union so that they would be enticed to join the rival union.
Inguillo filed with the NLRC a complaint against FPSI and/or Policarpio (respondents) for illegal withholding of
salary and damages. On May 16, 1996, respondents terminated the services of the employees mentioned in the
"Petisyon."
The following day, two (2) separate complaints for illegal dismissal, reinstatement and damages were filed against
respondents by: (1) NLM-KATIPUNAN, Grutas, Trinidad, Bergante, Yolanda Tapang, Go, Shirley Tapang and Lucero
(Grutas complaint, for brevity); and (2) Inguillo (Inguillo complaint). Both complaints were consolidated with
Inguillo's prior complaint for illegal withholding of salary, which was pending before Labor Arbiter Manuel
Manansala. Some of the complainants agreed to amicably settle their cases. Bergante and Inguillo, the remaining
complainants, were directed to submit their respective position papers, after which their complaints were submitted
for resolution.
The Labor Arbiter dismissed the remaining complaints of Bergante and Inguillo and held that they were not illegally
dismissed. He explained that the two clearly violated the Union Security Clause of the CBA when they joined NLM-
KATIPUNAN and committed acts detrimental to the interests of FPSILU and respondents. Affirmed by NLRC and
when elevated the case to CA, the latter also affirmed the decision of NLRC.
CA‘s decision: The employer FPSI did nothing but to put in force their agreement when it separated the
disaffiliating union members, herein complainants, upon the recommendation of the union. Such a stipulation is not
only necessary to maintain loyalty and preserve the integrity of the union, but is allowed by the Magna Carta of
Labor when it provided that while it is recognized that an employee shall have the right of self-organization, it is at
the same time postulated that such rights shall not injure the right of the labor organization to prescribe its own
rules with respect to the acquisition or retention of membership therein. Having ratified their CBA and being then
members of FPSILU, the complainants owe fealty and are required under the Union Security clause to maintain
their membership in good standing with it during the term thereof, a requirement which ceases to be binding only
during the 60-day freedom period immediately preceding the expiration of the CBA, which was not present in this
case.
x x x the dismissal of the complainants pursuant to the demand of the majority union in accordance with their
union security [clause] agreement following the loss of seniority rights is valid and privileged and does not
constitute unfair labor practice or illegal dismissal.
Indeed, the Supreme Court has for so long a time already recognized a union security clause in the CBA, like the
one at bar, as a specie of closed-shop arrangement and trenchantly upheld the validity of the action of the
employer in enforcing its terms as a lawful exercise of its rights and obligations under the contract.
The collective bargaining agreement in this case contains a union security clause-a closed-shop agreement.
A closed-shop agreement is an agreement whereby an employer binds himself to hire only members of the
contracting union who must continue to remain members in good standing to keep their jobs. It is "the most prized
achievement of unionism." It adds membership and compulsory dues. By holding out to loyal members a promise
of employment in the closed-shop, it welds group solidarity. (National Labor Union v. Aguinaldo's Echague Inc., 97
Phil. 184). It is a very effective form of union security agreement.
This Court has held that a closed-shop is a valid form of union security, and such a provision in a collective
bargaining agreement is not a restriction of the right of freedom of association guaranteed by the
Constitution.Hence, this petition.
Issue:
Whether or not the enforcement of the aforesaid Union Security Clause justified herein petitioners' dismissal from
the service.
Ruling:
Yes, the enforcement justified petitioner‘s dismissal.
Essentially, the Labor Code of the Philippines has several provisions under which an employee may be validly
terminated, namely: (1) just causes under Article 282; (2) authorized causes under Article 283; (3) termination due
to disease under Article 284; and (4) termination by the employee or resignation under Article 285. While the said
provisions did not mention as ground the enforcement of the Union Security Clause in the CBA, the dismissal from
employment based on the same is recognized and accepted in our jurisdiction.
"Union security" is a generic term, which is applied to and comprehends "closed shop," "union shop," "maintenance
of membership" or any other form of agreement, which imposes upon employees the obligation to acquire or retain
union membership as a condition affecting employment. There is union shop when all new regular employees are
required to join the union within a certain period as a condition for their continued employment. There is
maintenance of membership shop when employees, who are union members as of the effective date of the
agreement, or who thereafter become members, must maintain union membership as a condition for continued
employment until they are promoted or transferred out of the bargaining unit or the agreement is terminated. A
closed-shop, on the other hand, may be defined as an enterprise in which, by agreement between the employer
and his employees or their representatives, no person may be employed in any or certain agreed departments of
the enterprise unless he or she is, becomes, and, for the duration of the agreement, remains a member in good
standing of a union entirely comprised of or of which the employees in interest are a part.
In their Petition, Bergante and Inguillo assail the legality of their termination based on the Union Security Clause in
the CBA between FPSI and FPSILU. Article II of the CBA pertains to Union Security and Representatives, which
provides:
The Company hereby agrees to a UNION SECURITY [CLAUSE] with the following terms:
XXXXXX
5. Any employee/union member who fails to retain union membership in good standing may be recommended for
suspension or dismissal by the Union Directorate and/or FPSILU Executive Council for any of the following causes:
a) Acts of Disloyalty;
b) Voluntary Resignation or Abandonment from the UNION;
c) Organization of or joining another labor union or any labor group that would work against the UNION;
XXX XXX
The aforesaid provision requires all members to maintain their membership with FPSILU during the lifetime of the
CBA. Records show that Bergante and Inguillo were former members of FPSILU based on their signatures in the
document which ratified the CBA. It can also be inferred that they disaffiliated from FPSILU when the CBA was still
in force and subsisting, as can be gleaned from the documents relative to the intra-union dispute between FPSILU
and NLM-KATIPUNAN. In view of their disaffiliation, as well as other acts allegedly detrimental to the interest of
both FPSILU and FPSI, a "Petisyon" was submitted to Policarpio, asking for the termination of the services of
employees who failed to maintain their Union membership.
The Court is now tasked to determine whether the enforcement of the aforesaid Union Security Clause justified
herein petitioners' dismissal from the service.
In the case at bar, in terminating the employment of an employee by enforcing the Union Security Clause, the
employer needs only to determine and prove that: (1) the union security clause is applicable; (2) the union is
requesting for the enforcement of the union security provision in the CBA; and (3) there is sufficient evidence to
support the union's decision to expel the employee from the union or company.
We hold that all the requisites have been sufficiently met and FPSI was justified in enforcing the Union Security
Clause, for the following reasons:
First. FPSI was justified in applying the Union Security Clause, as it was a valid provision in the CBA, the existence
and validity of which was not questioned by either party. Moreover, petitioners were among the 93 employees who
affixed their signatures to the document that ratified the CBA. They cannot now turn their back and deny
knowledge of such provision.
Second. FPSILU acted on its prerogative to recommend to FPSI the dismissal of the members who failed to
maintain their membership with the Union. Aside from joining another rival union, FPSILU cited other grounds
committed by petitioners and the other employees which tend to prejudice FPSI‘s interests, i.e., dereliction of duty
- by failing to call periodic membership meetings and to give financial reports; depositing union funds in the names
of Grutas and former Vice-President Yolanda Tapang, instead of in the name of FPSILU care of the President;
causing damage to FPSI by deliberately slowing down production, preventing the Union from even attempting to
ask for an increase in benefits from the former; and poisoning the minds of the rest of the members of the Union
so that they would be enticed to join the rival union.
Third. FPSILU's decision to ask for the termination of the employees in the "Petisyon" was justified and supported
by the evidence on record. Bergante and Inguillo were undisputably former members of FPSILU. In fact, Inguillo
was the Secretary of Finance, the underlying reason why his salary was garnished to satisfy the judgment of the
Med-Arbiter who ordered NLM-KATIPUNAN to return the Union dues it erroneously collected from the employees.
Their then affiliation with FPSILU was also clearly shown by their signatures in the document which ratified the
CBA. Without a doubt, they committed acts of disloyalty to the Union when they failed not only to maintain their
membership but also disaffiliated from it. They abandoned FPSILU and even joined another union which works
against the former's interests. This is evident from the intra-union dispute filed by NLM-KATIPUNAN against
FPSILU. Once affiliated with NLM-KATIPUNAN, Bergante and Inguillo proceeded to recruit other employees to
disaffiliate from FPSILU and even collected Union dues from them.
In Del Monte Philippines, the stipulations in the CBA authorizing the dismissal of employees are of equal import as
the statutory provisions on dismissal under the Labor Code, since a CBA is the law between the company and the
Union, and compliance therewith is mandated by the express policy to give protection to labor. In Caltex Refinery
Employees Association (CREA) v. Brillantes, the Court expounded on the effectiveness of union security clause
when it held that it is one intended to strengthen the contracting union and to protect it from the fickleness or
perfidy of its own members. For without such safeguards, group solidarity becomes uncertain; the union becomes
gradually weakened and increasingly vulnerable to company machinations. In this security clause lies the strength
of the union during the enforcement of the collective bargaining agreement. It is this clause that provides labor
with substantial power in collective bargaining.
To safeguard the rights of the employees, We have said time and again that dismissals pursuant to union security
clauses are valid and legal, subject only to the requirement of due process, that is, notice and hearing prior to
dismissal. In like manner, We emphasized that the enforcement of union security clauses is authorized by law,
provided such enforcement is not characterized by arbitrariness, and always with due process.
There are two (2) aspects which characterize the concept of due process under the Labor Code: one is
substantive––whether the termination of employment was based on the provisions of the Labor Code or in
accordance with the prevailing jurisprudence; the other is procedural - the manner in which the dismissal was
effected.
Corollarily, procedural due process in the dismissal of employees requires notice and hearing. The employer must
furnish the employee two written notices before termination may be effected. The first notice apprises the
employee of the particular acts or omissions for which his dismissal is sought, while the second notice informs the
employee of the employer‘s decision to dismiss him. The requirement of a hearing, on the other hand, is complied
with as long as there was an opportunity to be heard, and not necessarily that an actual hearing was conducted.
In the present case, the required two notices that must be given to herein petitioners Bergante and Inguillo were
lacking. The records are bereft of any notice that would have given a semblance of substantial compliance on the
part of herein respondents. The Court has always underscored the significance of the two-notice rule in dismissing
an employee and has ruled in a number of cases that non-compliance therewith is tantamount to deprivation of the
employee‘s right to due process.
In fine, We hold that while Bergante and Inguillo's dismissals were valid pursuant to the enforcement of Union
Security Clause, respondents however did not comply with the requisite procedural due process. As in the case of
Agabon v. National Labor Relations Commission, where the dismissal is for a cause recognized by the prevailing
jurisprudence, the absence of the statutory due process should not nullify the dismissal or render it illegal, or
ineffectual. Accordingly, for violating Bergante and Inguillo's statutory rights, respondents should indemnify them
the amount of P30,000.00 each as nominal damages.
STA. LUCIA EAST COMMERCIAL CORP. vs. SOLE ET AL.

[G.R. No. 162355, August 14, 2009]
Facts:
On 27 February 2001, Confederated Labor Union of the Philippines (CLUP), in behalf of its chartered local,
instituted a petition for certification election among the regular rank-and-file employees of Sta. Lucia East
Commercial Corporation and its Affiliates. The affiliate companies included in the petition were SLE Commercial,
SLE Department Store, SLE Cinema, Robsan East Trading, Bowling Center, Planet Toys, Home Gallery and
Essentials.
On 21 August 2001, Med-Arbiter Bactin ordered the dismissal of the petition due to inappropriateness of the
bargaining unit. CLUP-Sta. Lucia East Commercial Corporation and its Affiliates Workers Union appealed the order
of dismissal to this Office on 14 September 2001.On 20 November 2001, CLUP-Sta. Lucia East Commercial
Corporation and its Affiliates Workers Union [CLUP-SLECC and its Affiliates Workers Union]moved for the
withdrawal of the appeal. On 31 January 2002, this Office granted the motion and affirmed the dismissal of the
petition.
In the meantime, on 10 October 2001, [CLUP-SLECC and its Affiliates Workers Union] reorganized itself and re-
registered as CLUP-Sta. Lucia East Commercial Corporation Workers Association (herein appellant CLUP-SLECCWA),
limiting its membership to the rank-and-file employees of Sta. Lucia East Commercial Corporation. It was issued
Certificate of Creation of a Local Chapter.
On the same date, [CLUP-SLECCWA] filed the instant petition. It alleged that [SLECC] employs about 115
employees and that more than 20% of employees belonging to the rank-and-file category are its members.[CLUP-
SLECCWA] claimed that no certification election has been held among them within the last 12 months prior to the
filing of the petition, and while there is another union registered with DOLE-Regional Office No. IV on 22 June 2001
covering the same employees, namely [SMSLEC], it has not been recognized as the exclusive bargaining agent of
[SLECCs] employees.
On 22 November 2001, SLECC filed a motion to dismiss the petition.It averred that it has voluntarily recognized
[SMSLEC] on 20 July 2001 as the exclusive bargaining agent of its regular rank-and-file employees, and that
collective bargaining negotiations already commenced between them.
On 29 November 2001, a CBA between [SMSLEC] and [SLECC] was ratified by its rank-and-file employees and
registered with DOLE-Regional Office No. IV on 9 January 2002.
Issue:
Whether or not the appellate court committed a reversible error when it affirmed the Secretary‘s finding that
SLECCs voluntary recognition of SMSLEC was done while a legitimate labor organization was in existence in the
bargaining unit.
Ruling:
The petition has no merit. We see no reason to overturn the rulings of the Secretary and of the appellate court.
Legitimate Labor Organization
Article 212(g) of the Labor Code defines a labor organization as any union or association of employees which exists
in whole or in part for the purpose of collective bargaining or of dealing with employers concerning terms and
conditions of employment. Upon compliance with all the documentary requirements, the Regional Office or Bureau
shall issue in favor of the applicant labor organization a certificate indicating that it is included in the roster of
legitimate labor organizations. Any applicant labor organization shall acquire legal personality and shall be entitled
to the rights and privileges granted by law to legitimate labor organizations upon issuance of the certificate of
registration.
Bargaining Unit
The concepts of a union and of a legitimate labor organization are different from, but related to, the concept of a
bargaining unit. We explained the concept of a bargaining unit in San Miguel Corporation v. Laguesma, where we
stated that:
A bargaining unit is a group of employees of a given employer, comprised of all or less than all of the entire body of
employees, consistent with equity to the employer, indicated to be the best suited to serve the reciprocal rights and
duties of the parties under the collective bargaining provisions of the law.
The fundamental factors in determining the appropriate collective bargaining unit are : (1) the will of the employees
(Globe Doctrine);(2) affinity and unity of the employees interest, such as substantial similarity of work and duties,
or similarity of compensation and working conditions (Substantial Mutual Interests Rule); (3) prior collective
bargaining history; and (4) similarity of employment status.
Contrary to petitioners assertion, this Court has categorically ruled that the existence of a prior collective bargaining
history is neither decisive nor conclusive in the determination of what constitutes an appropriate bargaining unit.
However, employees in two corporations cannot be treated as a single bargaining unit even if the businesses of the
two corporations are related.
A Legitimate Labor Organization Representing an Inappropriate Bargaining Unit
CLUP-SLECC and its Affiliates Workers Unions initial problem was that they constituted a legitimate labor
organization representing a non-appropriate bargaining unit. However, CLUP-SLECC and its Affiliates Workers Union
subsequently re-registered as CLUP-SLECCWA, limiting its members to the rank-and-file of SLECC.SLECC cannot
ignore that CLUP-SLECC and its Affiliates Workers Union was a legitimate labor organization at the time of SLECCs
voluntary recognition of SMSLEC. SLECC and SMSLEC cannot, by themselves, decide whether CLUP-SLECC and its
Affiliates Workers Union represented an appropriate bargaining unit.
The inclusion in the union of disqualified employees is not among the grounds for cancellation of registration,
unless such inclusion is due to misrepresentation, false statement or fraud under the circumstances enumerated in
Sections (a) to (c) of Article 239 of the Labor Code. Thus, CLUP-SLECC and its Affiliates Workers Union, having
been validly issued a certificate of registration, should be considered as having acquired juridical personality which
may not be attacked collaterally. The proper procedure for SLECC is to file a petition for cancellation of certificate of
registrationof CLUP-SLECC and its Affiliates Workers Union and not to immediately commence voluntary recognition
proceedings with SMSLEC.
SLECCs Voluntary Recognition of SMSLEC
The employer may voluntarily recognize the representation status of a union in unorganized establishments.
SLECC was not an unorganized establishment when it voluntarily recognized SMSLEC as its exclusive bargaining
representative on 20 July 2001.CLUP-SLECC and its Affiliates Workers Union filed a petition for certification election
on 27 February 2001 and this petition remained pending as of 20 July 2001.Thus, SLECCs voluntary recognition of
SMSLEC on 20 July 2001, the subsequent negotiations and resulting registration of a CBA executed by SLECC and
SMSLEC are void and cannot bar CLUP-SLECCWAs present petition for certification election.
Employers Participation in a Petition for Certification Election
We find it strange that the employer itself, SLECC, filed a motion to oppose CLUP-SLECCWAs petition for
certification election. In petitions for certification election, the employer is a mere bystander and cannot oppose the
petition or appeal the Med-Arbiters decision. The exception to this rule, which happens when the employer is
requested to bargain collectively, is not present in the case before us.
The petition is DENIED and AFFIRM the Decision promulgated of the Court of Appeals.
MARIWASA SIAM CERAMICS INC. vs. SECRETARY OF DOLE, ET AL.

[G.R. No. 183317, December 21, 2009]
Facts:
On May 4, 2005, respondent Samahan Ng Mga Manggagawa Sa Mariwasa Siam Ceramics, Inc. (SMMSC-
Independent) was issued a Certificate of Registration as a legitimate labor organization by the Department of Labor
and Employment (DOLE), Region IV-A.
On June 14, 2005, petitioner Mariwasa Siam Ceramics, Inc. filed a Petition for Cancellation of Union Registration
against respondent, claiming that the latter violated Article 234 of the Labor Code for not complying with the 20%
requirement, and that it committed massive fraud and misrepresentation in violation of Article 239 of the same
code.
On August 26, 2005, the Regional Director of DOLE IV-A issued an Order granting the petition, revoking the
registration of respondent, and delisting it from the roster of active labor unions.
Aggrieved, respondent appealed to the Bureau of Labor Relations (BLR).
In a Decision dated June 14, 2006, the BLR granted respondent‘s appeal.
Petitioner filed a Motion for Reconsideration but the BLR denied it in a Resolution dated February 2, 2007.
Petitioner sought recourse with the Court of Appeals (CA) through a Petition for Certiorari; but the CA denied the
petition for lack of merit.
Petitioner‘s motion for reconsideration of the CA Decision was likewise denied, hence, this petition based on the
following grounds—
Issues:
1. Whether or not private respondent union complied with the 20% membership requirement
2. Whether or not the Court of Appeals seriously erred when it ruled that private respondent union did not commit
misrepresentation, fraud or false statement.
Ruling:
The petition should be denied.
The petitioner insists that respondent failed to comply with the 20% union membership requirement for its
registration as a legitimate labor organization because of the disaffiliation from the total number of union members
of 102 employees who executed affidavits recanting their union membership.
It is, thus, imperative that we peruse the affidavits appearing to have been executed by thes affiants.
Evidently, the affidavits were written and prepared in advance, and the pro forma affidavits were ready to be filled
out with the employees‘ names and signatures.
It is worthy to note, however, that the affidavit does not mention the identity of the people who allegedly forced
and deceived the affiant into joining the union, much less the circumstances that constituted such force and deceit.
Indeed, not only was this allegation couched in very general terms and sweeping in nature, but more importantly,
it was not supported by any evidence whatsoever.
In appreciating affidavits of recantation such as these, our ruling in La Suerte Cigar and Cigarette Factory v.
Director of the Bureau of Labor Relations is enlightening, viz.—
On the second issue—whether or not the withdrawal of 31 union members from NATU affected the petition for
certification election insofar as the 30% requirement is concerned, We reserve the Order of the respondent
Director of the Bureau of Labor Relations, it appearing undisputably that the 31 union members had withdrawn
their support to the petition before the filing of said petition. It would be otherwise if the withdrawal was made
after the filing of the petition for it would then be presumed that the withdrawal was not free and voluntary. The
presumption would arise that the withdrawal was procured through duress, coercion or for valuable consideration.
In other words, the distinction must be that withdrawals made before the filing of the petition are presumed
voluntary unless there is convincing proof to the contrary, whereas withdrawals made after the filing of the petition
are deemed involuntary.
The reason for such distinction is that if the withdrawal or retraction is made before the filing of the petition, the
names of employees supporting the petition are supposed to be held secret to the opposite party. Logically, any
such withdrawal or retraction shows voluntariness in the absence of proof to the contrary. Moreover, it becomes
apparent that such employees had not given consent to the filing of the petition, hence the subscription
requirement has not been met.
When the withdrawal or retraction is made after the petition is filed, the employees who are supporting the petition
become known to the opposite party since their names are attached to the petition at the time of filing. Therefore,
it would not be unexpected that the opposite party would use foul means for the subject employees to withdraw
their support.
In the instant case, the affidavits of recantation were executed after the identities of the union members became
public, i.e., after the union filed a petition for certification election on May 23, 2005, since the names of the
members were attached to the petition. The purported withdrawal of support for the registration of the union was
made after the documents were submitted to the DOLE, Region IV-A. The logical conclusion, therefore, following
jurisprudence, is that the employees were not totally free from the employer‘s pressure, and so the voluntariness
of the employees‘ execution of the affidavits becomes suspect.
It is likewise notable that the first batch of 25 pro forma affidavits shows that the affidavits were executed by the
individual affiants on different dates from May 26, 2005 until June 3, 2005, but they were all sworn before a notary
public on June 8, 2005.
Accordingly, we cannot give full credence to these affidavits, which were executed under suspicious circumstances,
and which contain allegations unsupported by evidence. At best, these affidavits are self-serving. They possess no
probative value.
Nevertheless, even assuming the veracity of the affidavits of recantation, the legitimacy of respondent as a labor
organization must be affirmed. While it is true that the withdrawal of support may be considered as a resignation
from the union, the fact remains that at the time of the union‘s application for registration, the affiants were
members of respondent and they comprised more than the required 20% membership for purposes of registration
as a labor union. Article 234 of the Labor Code merely requires a 20% minimum membership during the application
for union registration. It does not mandate that a union must maintain the 20% minimum membership requirement
all throughout its existence.
Respondent asserts that it had a total of 173 union members at the time it applied for registration. Two names
were repeated in respondent‘s list and had to be deducted, but the total would still be 171 union members.
Further, out of the four names alleged to be no longer connected with petitioner, only two names should be
deleted from the list since Diana Motilla and T.W. Amutan resigned from petitioner only on May 10, 2005 and May
17, 2005, respectively, or after respondent‘s registration had already been granted. Thus, the total union
membership at the time of registration was 169. Since the total number of rank-and-file employees at that time
was 528, 169 employees would be equivalent to 32% of the total rank-and-file workers complement, still very
much above the minimum required by law.
For the purpose of de-certifying a union such as respondent, it must be shown that there was misrepresentation,
false statement or fraud in connection with the adoption or ratification of the constitution and by-laws or
amendments thereto; the minutes of ratification; or, in connection with the election of officers, the minutes of the
election of officers, the list of voters, or failure to submit these documents together with the list of the newly
elected-appointed officers and their postal addresses to the BLR.
The bare fact that two signatures appeared twice on the list of those who participated in the organizational
meeting would not, to our mind, provide a valid reason to cancel respondent‘s certificate of registration. The
cancellation of a union‘s registration doubtless has an impairing dimension on the right of labor to self-organization.
For fraud and misrepresentation to be grounds for cancellation of union registration under the Labor Code, the
nature of the fraud and misrepresentation must be grave and compelling enough to vitiate the consent of a
majority of union members.
In this case, we agree with the BLR and the CA that respondent could not have possibly committed
misrepresentation, fraud, or false statements. The alleged failure of respondent to indicate with mathematical
precision the total number of employees in the bargaining unit is of no moment, especially as it was able to comply
with the 20% minimum membership requirement. Even if the total number of rank-and-file employees of petitioner
is 528, while respondent declared that it should only be 455, it still cannot be denied that the latter would have
more than complied with the registration requirement.
The petition is DENIED. The assailed Decision and Resolution of the Court of Appeals are AFFIRMED. Costs against
petitioner.
GENERAL MILLING CORP. vs. CASIO ET AL.

[G.R. No. 149552, March 10, 2010]
Facts:
The labor union Ilaw at Buklod ng Mangagawa (IBM)-Local 31 Chapter (Local 31) was the sole and exclusive
bargaining agent of the rank and file employees of GMC in Lapu-Lapu City. On November 30, 1991, IBM-Local 31,
through its officers and board members, namely, respondents Virgilio Pino, Paulino Cabreros, Ma. Luna P. Jumaoas,
Dominador Booc, Bartolome Auman, Remegio Cabantan, Fidel Valle, Loreto Gonzaga, Edilberto Mendoza and
Antonio Panilag (Pino, et al.), entered into a Collective Bargaining Agreement (CBA) with GMC. The effectivity of
the said CBA was retroactive to August 1, 1991.
The CBA contained the following union security provisions:
Section 3. MAINTENANCE OF MEMBERSHIP – All employees/workers employed by the Company with the
exception of those who are specifically excluded by law and by the terms of this Agreement must be
members in good standing of the Union within thirty (30) days upon the signing of this agreement and
shall maintain such membership in good standing thereof as a condition of their employment or continued
employment.
Section 6. The Company, upon written request of the Union, shall terminate the services of any
employee/worker who fails to fulfill the conditions set forth in Sections 3 and 4 thereof, subject however,
to the provisions of the Labor Laws of the Philippines and their Implementing Rules and Regulations. The
Union shall absolve the Company from any and all liabilities, pecuniary or otherwise, and responsibilities to
any employee or worker who is dismissed or terminated in pursuant thereof.
Casio, et al. were regular employees of GMC with daily earnings ranging from P173.75 to P201.50, and length of
service varying from eight to 25 years.Casio was elected IBM-Local 31 President for a three-year term in June
1991, while his co-respondents were union shop stewards.
In a letter dated February 24, 1992, Rodolfo Gabiana (Gabiana), the IBM Regional Director for Visayas and
Mindanao, furnished Casio, et al. with copies of the Affidavits of GMC employees Basilio Inoc and Juan Potot,
charging Casio, et al. with ―acts inimical to the interest of the union.‖ Through the same letter, Gabiana gave
Casio, et al. three days from receipt thereof within which to file their answers or counter-affidavits. However,
Casio, et al. refused to acknowledge receipt of Gabiana‘s letter.
Subsequently, on February 29, 1992, Pino, et al., as officers and members of the IBM-Local 31, issued a
Resolution expelling Casio, et al. from the union. Gabiana then wrote a letter dated March 10, 1992, addressed to
Eduardo Cabahug (Cabahug), GMC Vice-President for Engineering and Plant Administration, informing the company
of the expulsion of Casio, et al. from the union pursuant to the Resolution dated February 29, 1992 of IBM-Local 31
officers and board members. Gabiana likewise requested that Casio, et al. ―be immediately dismissed from their
work for the interest of industrial peace in the plant.‖
Pressured by the threatened filing of a suit for unfair labor practice, GMC acceded to Gabiana‘s request to
terminate the employment of Casio, et al. GMC issued a Memorandum dated March 24, 1992 terminating the
employment of Casio, et al. effective April 24, 1992 and placing the latter under preventive suspension for the
meantime.
Casio, et al. next sought recourse from the National Labor Relations Commission (NLRC) Regional Arbitration
Branch VII by filing on August 3, 1992 a Complaint against GMC and Pino, et al. for unfair labor practice,
particularly, the termination of legitimate union officers, illegal suspension, illegal dismissal, and moral and
exemplary damages.
Issue:
Whether Casio, et al. were illegally dismissed without any valid?
Ruling:
In this case, the Voluntary Arbitrator was convinced that Casio, et al. were legally dismissed; while the Court of
Appeals believed the opposite, because even though the dismissal of Casio, et al. was made by GMC pursuant to a
valid closed shop provision in the CBA, the company still failed to observe the elementary rules of due
process. The Court is therefore constrained to take a second look at the evidence on record considering that the
factual findings of the Voluntary Arbitrator and the Court of Appeals are contradictory.
There are two aspects which characterize the concept of due process under the Labor Code: one is substantive –
whether the termination of employment was based on the provision of the Labor Code or in accordance with the
prevailing jurisprudence; the other is procedural – the manner in which the dismissal was effected. After a
thorough review of the records, the Court agrees with the Court of Appeals. The dismissal of Casio, et al. was
indeed illegal, having been done without just cause and the observance of procedural due process.
In Alabang Country Club, Inc. v. National Labor Relations Commission, the Court laid down the grounds for which
an employee may be validly terminated, thus:
Under the Labor Code, an employee may be validly terminated on the following grounds: (1) just causes under Art.
282; (2) authorized causes under Art.283; (3) termination due to disease under Art.284, and (4) termination by the
employee or resignation under Art. 285.
Another cause for termination is dismissal from employment due to the enforcement of the union
security clause in the CBA. x x x.
―Union security‖ is a generic term, which is applied to and comprehends ―closed shop,‖ ―union
shop,‖ ―maintenance of membership,‖ or any other form of agreement which imposes upon employees the
obligation to acquire or retain union membership as a condition affecting employment. There is union shop when
all new regular employees are required to join the union within a certain period as a condition for their continued
employment. There is maintenance of membership shop when employees, who are union members as of the
effective date of the agreement, or who thereafter become members, must maintain union membership as a
condition for continued employment until they are promoted or transferred out of the bargaining unit or the
agreement is terminated. A closed shop, on the other hand, may be defined as an enterprise in which, by
agreement between the employer and his employees or their representatives, no person may be employed in any
or certain agreed departments of the enterprise unless he or she is, becomes, and, for the duration of the
agreement, remains a member in good standing of a union entirely comprised of or of which the employees in
interest are a part.
Union security clauses are recognized and explicitly allowed under Article 248(e) of the Labor Code, which provides
that:
Art. 248. Unfair Labor Practices of Employers. x x x
xxxx
(e) To discriminate in regard to wages, hours of work, and other terms and conditions of employment in
order to encourage or discourage membership in any labor organization. Nothing in this Code or in any
other law shall stop the parties from requiring membership in a recognized collective
bargaining agent as a condition for employment, except those employees who are already
members of another union at the time of the signing of the collective bargaining agreement.
It is State policy to promote unionism to enable workers to negotiate with management on an even playing field
and with more persuasiveness than if they were to individually and separately bargain with the employer. For this
reason, the law has allowed stipulations for ―union shop‖ and ―closed shop‖ as means of encouraging workers to
join and support the union of their choice in the protection of their rights and interest vis-à-vis the employer.
Moreover, a stipulation in the CBA authorizing the dismissal of employees are of equal import as the statutory
provisions on dismissal under the Labor Code, since ―a CBA is the law between the company and the union and
compliance therewith is mandated by the express policy to give protection to labor.‖
In terminating the employment of an employee by enforcing the union security clause, the employer needs only to
determine and prove that: (1) the union security clause is applicable; (2) the union is requesting for the
enforcement of the union security provision in the CBA; and (3) there is sufficient evidence to support the decision
of the union to expel the employee from the union. These requisites constitute just cause for terminating an
employee based on the union security provision of the CBA.
There is no question that in the present case, the CBA between GMC and IBM-Local 31 included a maintenance of
membership and closed shop clause as can be gleaned from Sections 3 and 6 of Article II. IBM-Local 31, by
written request, can ask GMC to terminate the employment of the employee/worker who failed to maintain its good
standing as a union member.
It is similarly undisputed that IBM-Local 31, through Gabiana, the IBM Regional Director for Visayas and Mindanao,
twice requested GMC, in the letters dated March 10 and 19, 1992, to terminate the employment of Casio, et al. as
a necessary consequence of their expulsion from the union.
It is the third requisite – that there is sufficient evidence to support the decision of IBM-Local 31 to expel Casio, et
al. – which appears to be lacking in this case.
The failure of GMC to make a determination of the sufficiency of evidence supporting the decision of IBM-Local 31
to expel Casio, et al. is a direct consequence of the non-observance by GMC of procedural due process in the
dismissal of employees.
As a defense, GMC contends that as an employer, its only duty was to ascertain that IBM-Local 31 accorded
Casio, et al. due process; and, it is the finding of the company that IBM-Local 31 did give Casio, et al. the
opportunity to answer the charges against them, but they refused to avail themselves of such opportunity.
This argument is without basis. The Court has stressed time and again that allegations must be proven by
sufficient evidence because mere allegation is definitely not evidence. The records of this case are absolutely bereft
of any supporting evidence to substantiate the bare allegation of GMC that Casio, et al. were accorded due process
by IBM-Local 31. There is nothing on record that would indicate that IBM-Local 31 actually notified Casio, et al. of
the charges against them or that they were given the chance to explain their side. All that was stated in the IBM-
Local 31 Resolution dated February 29, 1992, expelling Casio, et al. from the union, was that ―a copy of the said
letter complaint [dated February 24, 1992] was dropped or left in front of E. Casio.‖ It was not established that
said letter-complaint charging Casio, et al. with acts inimical to the interest of the union was properly served upon
Casio, that Casio willfully refused to accept the said letter-notice, or that Casio had the authority to receive the
same letter-notice on behalf of the other employees similarly accused. It‘s worthy to note that Casio, et al. were
expelled only five days after the issuance of the letter-complaint against them. The Court cannot find proof on
record when the three-day period, within which Casio, et al. was supposed to file their answer or counter-affidavits,
started to run and had expired. The Court is likewise unconvinced that the said three-day period was sufficient for
Casio, et al. to prepare their defenses and evidence to refute the serious charges against them.
Contrary to the position of GMC, the acts of Pino, et al. as officers and board members of IBM-Local 31, in
expelling Casio, et al. from the union, do not enjoy the presumption of regularity in the performance of official
duties, because the presumption applies only to public officers from the highest to the lowest in the service of the
Government, departments, bureaus, offices, and/or its political subdivisions.
The twin requirements of notice and hearing constitute the essential elements of procedural due process. The law
requires the employer to furnish the employee sought to be dismissed with two written notices before termination
of employment can be legally effected: (1) a written notice apprising the employee of the particular acts or
omissions for which his dismissal is sought in order to afford him an opportunity to be heard and to defend himself
with the assistance of counsel, if he desires, and (2) a subsequent notice informing the employee of the employer‘s
decision to dismiss him. This procedure is mandatory and its absence taints the dismissal with illegality.
Irrefragably, GMC cannot dispense with the requirements of notice and hearing before dismissing Casio, et al. even
when said dismissal is pursuant to the closed shop provision in the CBA. The rights of an employee to be informed
of the charges against him and to reasonable opportunity to present his side in a controversy with either the
company or his own union are not wiped away by a union security clause or a union shop clause in a collective
bargaining agreement. An employee is entitled to be protected not only from a company which disregards his
rights but also from his own union the leadership of which could yield to the temptation of swift and arbitrary
expulsion from membership and hence dismissal from his job.
In the case at bar, Casio, et al. did not receive any other communication from GMC, except the written notice of
termination dated March 24, 1992. GMC, by its own admission, did not conduct a separate and independent
investigation to determine the sufficiency of the evidence supporting the expulsion of Casio, et al. by IBP-Local
31. It straight away acceded to the demand of IBP-Local 31 to dismiss Casio, et al.
In sum, the Court finds that GMC illegally dismissed Casio, et al. because not only did GMC fail to make a
determination of the sufficiency of evidence to support the decision of IBM-Local 31 to expel Casio, et al., but also
to accord the expelled union members procedural due process, i.e., notice and hearing, prior to the termination of
their employment
An employee who is illegally dismissed is entitled to the twin reliefs of full backwages and reinstatement. If
reinstatement is not viable, separation pay is awarded to the employee. In awarding separation pay to an illegally
dismissed employee, in lieu of reinstatement, the amount to be awarded shall be equivalent to one month salary
for every year of service. Under Republic Act No. 6715, employees who are illegally dismissed are entitled to full
backwages, inclusive of allowances and other benefits or their monetary equivalent, computed from the time their
actual compensation was withheld from them up to the time of their actual reinstatement but if reinstatement is no
longer possible, the backwages shall be computed from the time of their illegal termination up to the finality of the
decision. Thus, Casio, et al. are entitled to backwages and separation pay considering that reinstatement is no
longer possible because the positions they previously occupied are no longer existing, as declared by GMC.
Casio, et al., having been compelled to litigate in order to seek redress for their illegal dismissal, are entitled to the
award of attorney‘s fees equivalent to 10% of the total monetary award.
WHEREFORE, the instant petition is hereby DENIED.
THE HERITAGE HOTEL MANILA vs. NATIONAL UNION OF WORKERS IN THE HOTEL, ET AL.
[G.R. No. 178296, January 12, 2011]
Facts:
On October 11, 1995, respondent filed with the Department of Labor and Employment-National Capital Region
(DOLE-NCR) a petition for certification election. The Med-Arbiter granted the petition on February 14, 1996 and
ordered the holding of a certification election. On appeal, the DOLE Secretary, in a Resolution dated August 15,
1996, affirmed the Med-Arbiter's order and remanded the case to the Med-Arbiter for the holding of a pre-election
conference on February 26, 1997. Petitioner filed a motion for reconsideration, but it was denied on September 23,
1996.
The pre-election conference was not held as initially scheduled; it was held a year later, or on February 20, 1998.
Petitioner moved to archive or to dismiss the petition due to alleged repeated non-appearance of respondent. The
latter agreed to suspend proceedings until further notice. The pre-election conference resumed on January 29,
2000.
Subsequently, petitioner discovered that respondent had failed to submit to the Bureau of Labor Relations (BLR) its
annual financial report for several years and the list of its members since it filed its registration papers in 1995.
Consequently, on May 19, 2000, petitioner filed a Petition for Cancellation of Registration of respondent, on the
ground of the non-submission of the said documents. Petitioner prayed that respondent's Certificate of Creation of
Local/Chapter be cancelled and its name be deleted from the list of legitimate labor organizations. It further
requested the suspension of the certification election proceedings.
Issue:
Whether or not the non-submission of financial reports warrant the cancellation of the respondent‘s registration
Ruling:
No. The respondent's registration as a legitimate labor union should not be cancelled.
The Regional Director has ample discretion in dealing with a petition for cancellation of a union's registration,
particularly, determining whether the union still meets the requirements prescribed by law. It is sufficient to give
the Regional Director license to treat the late filing of required documents as sufficient compliance with the
requirements of the law. After all, the law requires the labor organization to submit the annual financial report and
list of members in order to verify if it is still viable and financially sustainable as an organization so as to protect the
employer and employees from fraudulent or fly-by-night unions. With the submission of the required documents by
respondent, the purpose of the law has been achieved, though belatedly.
We cannot ascribe abuse of discretion to the Regional Director and the DOLE Secretary in denying the petition for
cancellation of respondent's registration. The union members and, in fact, all the employees belonging to the
appropriate bargaining unit should not be deprived of a bargaining agent, merely because of the negligence of the
union officers who were responsible for the submission of the documents to the BLR.
Labor authorities should, indeed, act with circumspection in treating petitions for cancellation of union registration,
lest they be accused of interfering with union activities. In resolving the petition, consideration must be taken of
the fundamental rights guaranteed by Article XIII, Section 3 of the Constitution, i.e., the rights of all workers to
self-organization, collective bargaining and negotiations, and peaceful concerted activities. Labor authorities should
bear in mind that registration confers upon a union the status of legitimacy and the concomitant right and
privileges granted by law to a legitimate labor organization, particularly the right to participate in or ask for
certification election in a bargaining unit. Thus, the cancellation of a certificate of registration is the equivalent of
snuffing out the life of a labor organization. For without such registration, it loses - as a rule - its rights under the
Labor Code.
It is worth mentioning that the Labor Code's provisions on cancellation of union registration and on reportorial
requirements have been recently amended by Republic Act (R.A.) No. 9481. The amendment sought to strengthen
the workers' right to self-organization and enhance the Philippines' compliance with its international obligations as
embodied in the International Labour Organization (ILO) Convention No. 87, pertaining to the non-dissolution of
workers' organizations by administrative authority. Thus, R.A. No. 9481 inserted in the Labor Code Article 242-A,
which provides:
ART. 242-A. Reportorial Requirements.-The following are documents required to be submitted to the Bureau by the
legitimate labor organization concerned:
xxx xxx
(c) Its annual financial report within thirty (30) days after the close of every fiscal year; and
xxx xxx
Failure to comply with the above requirements shall not be a ground for cancellation of union registration
but shall subject the erring officers or members to suspension, expulsion from membership, or any
appropriate penalty.
ILO Convention No. 87, which we have ratified in 1953, provides that "workers' and employers' organizations shall
not be liable to be dissolved or suspended by administrative authority." The ILO has expressed the opinion that the
cancellation of union registration by the registrar of labor unions, which in our case is the BLR, is tantamount to
dissolution of the organization by administrative authority when such measure would give rise to the loss of legal
personality of the union or loss of advantages necessary for it to carry out its activities, which is true in our
jurisdiction. Although the ILO has allowed such measure to be taken, provided that judicial safeguards are in place,
i.e., the right to appeal to a judicial body, it has nonetheless reminded its members that dissolution of a union, and
cancellation of registration for that matter, involve serious consequences for occupational representation. It has,
therefore, deemed it preferable if such actions were to be taken only as a last resort and after exhausting other
possibilities with less serious effects on the organization.
It is undisputed that appellee failed to submit its annual financial reports and list of individual members in
accordance with Article 239 of the Labor Code. However, the existence of this ground should not necessarily lead
to the cancellation of union registration. Article 239 recognizes the regulatory authority of the State to exact
compliance with reporting requirements. Yet there is more at stake in this case than merely monitoring union
activities and requiring periodic documentation thereof.
The more substantive considerations involve the constitutionally guaranteed freedom of association and right of
workers to self-organization. Also involved is the public policy to promote free trade unionism and collective
bargaining as instruments of industrial peace and democracy. An overly stringent interpretation of the statute
governing cancellation of union registration without regard to surrounding circumstances cannot be allowed.
Otherwise, it would lead to an unconstitutional application of the statute and emasculation of public policy
objectives. Worse, it can render nugatory the protection to labor and social justice clauses that pervades the
Constitution and the Labor Code.
Moreover, submission of the required documents is the duty of the officers of the union. It would be unreasonable
for this Office to order the cancellation of the union and penalize the entire union membership on the basis of the
negligence of its officers. In National Union of Bank Employees vs. Minister of Labor, the Supreme Court ruled:
As aptly ruled by respondent Bureau of Labor Relations Director Noriel: "The rights of workers to self-organization
finds general and specific constitutional guarantees. x x x Such constitutional guarantees should not be lightly
taken much less nullified. A healthy respect for the freedom of association demands that acts imputable to officers
or members be not easily visited with capital punishments against the association itself." At any rate, we note that
on 19 May 2000, appellee had submitted its financial statement for the years 1996-1999. With this submission,
appellee has substantially complied with its duty to submit its financial report for the said period. To rule differently
would be to preclude the union, after having failed to meet its periodic obligations promptly, from taking
appropriate measures to correct its omissions. For the record, we do not view with favor appellee's late submission.
Punctuality on the part of the union and its officers could have prevented this petition.
LEGEND INTERNATIONAL RESORTS LTD. vs. KILUSANG MANGAGAWA NG LEGENDA

[G.R. No. 169754, February 13, 2011]
Facts:
June 6, 2001, KML filed with the Med-Arbitration Unit of the DOLE, San Fernando, Pampanga, a petition for
certification election. KML alleged that it is a legitimate labor organization of the rank and file employees of
Legend. It was issued its Certification of Registration by DOLE on May 18, 2001.
Legend moved to dismiss the petition on the grounds that it is not a legitimate labor organization because its
membership is a mixture of rank and file employees and supervisory employees. KML also committed acts of fraud
and misrepresentation when it made it appear that certain employees attended its general membership meeting
on April 5, 2001 when in reality some of them were either at work, have already resigned, or were abroad.
KML argued that even if the supervisory employees were excluded from membership, the certification election
could still proceed because the required number of total rank and file employees necessary is still sustained. It also
claimed that its legitimacy as a labor union cannot be attacked collaterally.
Med Arbiter judgment September 20, 2001: dismissed KML‘s petition for certification election. Since its
membership included supervisory employees, it was not a legitimate labor organization. KML was also guilty of
fraud and misrepresentation; 70 employees who were claimed to be among those who attended its organizational
meeting were either at work or elsewhere.
Office of the Secretary of DOLE May 22, 2002 decision: reversed Med- Arbiter‘s decision. KML‘s legitimacy as a
union cannot be attacked collaterally. The presence of supervisory employees does not ipso facto render the
existence of a labor organization illegal. Mixed membership is not one of the grounds for dismissal of a petition for
certification election. Ordered the immediate conduct of the certification election.
Legend filed a Motion for Reconsideration. It also alleged that it filed a petition for cancellation of union
registration of KML which was granted by the DOLE Regional Office, November 7, 2001. MFR was denied in a
resolution dated August 20, 2002: a final order of cancellation is required before a petition for certification of
election may be dismissed on the ground of lack of legal personality, and that the November 7, 2001 decision was
reversed by the BLR March 26, 2002.
CA: held that the issue on the legitimacy of KML as a labor organization has already been settled with finality. The
March 26, 2002 decision upholding the legitimacy had long become final and executor for failure of Legend to
appeal.KML being a legitimate labor org, it could properly file a petition for certification election. Legend filed MFR
stating that it has appealed to the CA the March 26, 2002 decision and is still pending. CA denied MFR.
Issues:
Whether Legend has timely appealed the March 26, 2002 decision (re: cancellation of union registration)
Whether the cancellation of KML‘s certificate of registration should retroact to the time of its issuance (it was
cancelled in the November 7, 2001 decision)
Whether the legitimacy of the legal personality of KML can be collaterally attacked in a petition for certification
election
Ruling:
1.Yes. The March 26, 2002 decision has not yet attained finality considering that it has timely appealed to the CA
and which at that time is still pending resolution. Legend timely filed on Sept 6, 2002 a petition for certiorari before
the CA assailing the March 26, 2002 decision.
On June 30, 2005, CA reversed the March 26, 2002 decision of the BLR and reinstated the November 7, 2001
decision cancelling the certificate of registration of KML. KML‘s MRF was denied. KML filed a petition for certiorari
before the SC which was denied. KML moved for reconsideration but it was denied with finality. The decision to
cancel KML‘s certificate of registration became final and executory and entry of judgment was made on July 18,
2006.
2.No. According to ACA vs Calleja, a certification proceeding is not a litigation in the sense that the term is
ordinarily understood, but an investigation of a non-adversarial and fact-finding character. An order to hold a
certificationelection is proper despite the pendency of the petition for cancellation of the registration
certificate of the respondent union. The rationale is that at the time the union filed the petition, it
still had the legal personality to perform such act absent an order directing the cancellation.
There is no basis for Legend‘s assertion that the cancellation of KML‘s certificate of registration should retroact to
the time of its issuance or that it effectively nullified all of KML‘s activities, including its filing of the petition for
certification election and its demand to collectively bargain.
3.NO. The legitimacy of the legal personality of KML cannot be collaterally attacked in a petition for certification
election proceeding. Such legal personality may not be subject to a collateral attack but only through a separate
action instituted particularly for the purpose of assailing it.
SC affirmed the May 22, 2002 decision (KML‘s legitimacy cannot be attacked collaterally, presence of
supervisory employees does not render it illegal) and the August 20, 2002 resolution (a final order of
cancellation is required before a petition for certification election may be dismissed on the ground of lack of
personality, reversed March 26, 2002 decision).
SAMAHANG MANGGAGAWA SA CHARTER SOLIDARITY OF UNIONS IN THE PHILIPPINES FOR

EMPOWERMENT AND REFORMS, ET AL vs. CHARTER CHEMICAL AND COATING CORP.
[G.R. No. 169717, March 16, 2011]
Facts:
Petitioner union filed a petition for certification election among the regular rank-and-file employees of the
respondent company witht eh Mediation Arbitration Union of the DOLE-NCR.
Respondent filed a Motion to Dismiss on the ground that petitioner union is not a legitimate labor organization
because of failure to comply with the documentation requirements set by law, and the inclusions of supervisory
employees within petitioner union.
Med-Arbiter: Dismissed the petition for certification election because petitioner union is not a legitimate labor
organization. The charter certificate and "Listahan ng mga Dumalo sa Pangkalahatang Pulong at mga Sumang-ayon
at Nagratipika sa Saligang Batas" were not executed under oath and certified by the union secretary and attested
to by the union president as required by Section 235 of the Labor Code. It also held that the list of membership of
petitioner union consisted of members who performed supervisory functions. Under Article 245 of the Labor Code,
said supervisory employees are prohibited from joining petitioner union which seeks to represent the rank-and-file
employees of respondent company.
DOLE: Granted petitioner union‘s petition for certification election.
Court of Appeals: Nullified the decision of the DOLE. The appellate court gave credence to the findings of the Med-
Arbiter that petitioner union failed to comply with the documentation requirements under the Labor Code. It,
likewise, upheld the Med-Arbiter's finding that petitioner union consisted of both rank-and-file and supervisory
employees. Moreover, the CA held that the issues as to the legitimacy of petitioner union may be attacked
collaterally in a petition for certification election and the infirmity in the membership of petitioner union cannot be
remedied through the exclusion-inclusion proceedings in a pre-election conference pursuant to the ruling inToyota
Motor Philippines v. Toyota Motor Philippines Corporation Labor Union. Thus, considering that petitioner union is
not a legitimate labor organization, it has no legal right to file a petition for certification election.
Issues:
1. Whether the alleged mixture of rank-and-file and supervisory employee[s] of petitioner [union's]
membership is [a] ground for the cancellation of petitioner [union's] legal personality and dismissal of [the]
petition for certification election.
2. Whether the alleged failure to certify under oath the local charter certificate issued by its mother federation
and list of the union membership attending the organizational meeting [is a ground] for the cancellation of
petitioner [union's] legal personality as a labor organization and for the dismissal of the petition for
certification election.
Ruling:
The petition is meritorious.
The charter certificate need not be certified under oath by the local union's secretary or treasurer and attested to
by its president.
The then prevailing Section 1, Rule VI of the Implementing Rules of Book V, as amended by D.O. No. 9, series of
1997, provides:
Section 1. Chartering and creation of a local chapter -- A duly registered federation or national union may
directly create a local/chapter by submitting to the Regional Office or to the Bureau two (2) copies of the following:
(a) A charter certificate issued by the federation or national union indicating the creation or establishment of
the local/chapter;
(b) The names of the local/chapter's officers, their addresses, and the principal office of the local/chapter;
and
(c) The local/chapter's constitution and by-laws provided that where the local/chapter's constitution and by-
laws [are] the same as [those] of the federation or national union, this fact shall be indicated accordingly.
As readily seen, the Sama-samang Pahayag ng Pagsapi at Authorization and Listahan ng mga Dumalo sa
Pangkalahatang Pulong at mga Sumang-ayon at Nagratipika sa Saligang Batas are not among the documents that
need to be submitted to the Regional Office or Bureau of Labor Relations in order to register a labor organization.
As to the charter certificate, the above-quoted rule indicates that it should be executed under oath. Petitioner
union concedes and the records confirm that its charter certificate was not executed under oath. However, in San
Miguel Corporation (Mandaue Packaging Products Plants) v. Mandaue Packing Products Plants-San Miguel
Corporation Monthlies Rank-and-File Union-FFW (MPPP-SMPP-SMAMRFU-FFW),[22]which was decided under the
auspices of D.O. No. 9, Series of 1997, we ruled -
In San Miguel Foods-Cebu B-Meg Feed Plant v. Hon. Laguesma, 331 Phil. 356 (1996), the Court ruled that it
was not necessary for the charter certificate to be certified and attested by the local/chapter officers. Id.While
this ruling was based on the interpretation of the previous Implementing Rules provisions which
were supplanted by the 1997 amendments, we believe that the same doctrine obtains in this case.
Considering that the charter certificate is prepared and issued by the national union and not the local/chapter, it
does not make sense to have the local/chapter's officers x x xcertify or attest to a document which
they had no hand in the preparation of.
In accordance with this ruling, petitioner union's charter certificate need not be executed under oath.
Consequently, it validly acquired the status of a legitimate labor organization upon submission of (1) its charter
certificate, (2) the names of its officers, their addresses, and its principal office, and (3) its constitution and by-
laws-- the last two requirements having been executed under oath by the proper union officials as borne out by the
records.
The mixture of rank-and-file and supervisory employees in petitioner union does not nullify its legal
personality as a legitimate labor organization.
The CA found that petitioner union has for its membership both rank-and-file and supervisory employees. However,
petitioner union sought to represent the bargaining unit consisting of rank-and-file employees. Under Article 245 of
the Labor Code, supervisory employees are not eligible for membership in a labor organization of rank-and-file
employees.
It was the Rules and Regulations Implementing R.A. No. 6715 (1989 Amended Omnibus Rules) which supplied the
deficiency by introducing the following amendment to Rule II (Registration of Unions):
Sec. 2. Who may file. - Any legitimate labor organization or the employer, when requested to bargain
collectively, may file the petition
The petition, when filed by a legitimate labor organization, shall contain, among others:
x x x x
(c) description of the bargaining unit which shall be the employer unit unless
circumstances otherwise require; and provided further, that the appropriate
bargaining unit of the rank-and-file employees shall not include supervisory employees
and/or security guards. (Emphasis supplied)
By that provision, any questioned mingling will prevent an otherwise legitimate and duly registered labor
organization from exercising its right to file a petition for certification election.
But the 1989 Amended Omnibus Rules was further amended by Department Order No. 9, series of 1997 (1997
Amended Omnibus Rules). Specifically, the requirement under Sec. 2(c) of the 1989 Amended Omnibus Rules -
that the petition for certification election indicate that the bargaining unit of rank-and-file employees has not been
mingled with supervisory employees - was removed. Instead, what the 1997 Amended Omnibus Rules requires is a
plain description of the bargaining unit.
there is a prohibition against the mingling of supervisory and rank-and-file employees in one labor organization, the
Labor Code does not provide for the effects thereof. Thus, the Court held that after a labor organization has been
registered, it may exercise all the rights and privileges of a legitimate labor organization . Any mingling between
supervisory and rank-and-file employees in its membership cannot affect its legitimacy for that is not
among the grounds for cancellation of its registration, unless such mingling was brought about by
misrepresentation, false statement or fraud under Article 239 of the Labor Code.
In San Miguel Corp. (Mandaue Packaging Products Plants) v. Mandaue Packing Products Plants-San Miguel
Packaging Products-San Miguel Corp. Monthlies Rank-and-File Union-FFW, the Court explained that since the 1997
Amended Omnibus Rules does not require a local or chapter to provide a list of its members, it would be improper
for the DOLE to deny recognition to said local or chapter on account of any question pertaining to its individual
members.
More to the point is Air Philippines Corporation v. Bureau of Labor Relations, which involved a petition for
cancellation of union registration filed by the employer in 1999 against a rank-and-file labor organization on the
ground of mixed membership: the Court therein reiterated its ruling in Tagaytay Highlands that the inclusion in a
union of disqualified employees is not among the grounds for cancellation, unless such inclusion is due to
misrepresentation, false statement or fraud under the circumstances enumerated in Sections (a) and (c) of Article
239 of the Labor Code.
As a result, petitioner union was not divested of its status as a legitimate labor organization even if some of its
members were supervisory employees; it had the right to file the subject petition for certification election.
The legal personality of petitioner union cannot be collaterally attacked by respondent company in
the certification election proceedings.
Petitioner union correctly argues that its legal personality cannot be collaterally attacked in the certification election
proceedings. As we explained in Kawashima:
Except when it is requested to bargain collectively, an employer is a mere bystander to any petition for
certification election; such proceeding is non-adversarial and merely investigative, for the purpose thereof
is to determine which organization will represent the employees in their collective bargaining with the
employer. The choice of their representative is the exclusive concern of the employees; the employer
cannot have any partisan interest therein; it cannot interfere with, much less oppose, the process by filing
a motion to dismiss or an appeal from it; not even a mere allegation that some employees participating in
a petition for certification election are actually managerial employees will lend an employer legal
personality to block the certification election. The employer's only right in the proceeding is to be notified
or informed thereof.
SAN MIGUEL FOODS vs. SAN MIGUEL CORP. SUPERVISORS AND EXEMPT UNION
[G.R. No. 146206, August 1, 2011]
Facts:
A certification election was conducted and on the date of the election, petitioner employer filed the Omnibus
Objections and Challenge to Voters, questioning the eligibility to vote by some of its employees on the grounds that
some employees do not belong to the bargaining unit which respondent seeks to represent or that there is no
existence of employer-employee relationship with petitioner.
The ff issues were raised when the case reached the SC: the inclusion of employees in supervisor levels 3
and 4 and the exempt employees in the proposed bargaining unit, thereby allowing their
participation in the certification election; the application of the ―community or mutuality of interests‖
test; and the determination of the employees who belong to the category of confidential employees
Ruling:
1ST issue (Certain factors, such as specific line of work, working conditions, location of work, mode
of compensation, and other relevant conditions do not affect or impede their commonality of
interest.)
Petitioner‘s contentions are erroneous. In G.R. No. 110399, the Court explained that the employees of San Miguel
Corporation Magnolia Poultry Products Plants of Cabuyao, San Fernando, and Otis constitute a single bargaining
unit, which is not contrary to the one-company, one-union policy. An appropriate bargaining unit is defined as a
group of employees of a given employer, comprised of all or less than all of the entire body of employees, which
the collective interest of all the employees, consistent with equity to the employer, indicate to be best suited to
serve the reciprocal rights and duties of the parties under the collective bargaining provisions of the law.
In National Association of Free Trade Unions v. Mainit Lumber Development Company Workers Union – United
Lumber and General Workers of the Phils, the Court, taking into account the ―community or mutuality of interests‖
test, ordered the formation of a single bargaining unit consisting of the Sawmill Division in Butuan City and the
Logging Division in Zapanta Valley, Kitcharao, Agusan [Del] Norte of the Mainit Lumber Development Company. It
held that while the existence of a bargaining history is a factor that may be reckoned with in determining the
appropriate bargaining unit, the same is not decisive or conclusive. Other factors must be considered. The test of
grouping is community or mutuality of interest. This is so because the basic test of an asserted bargaining unit‘s
acceptability is whether or not it is fundamentally the combination which will best assure to all employees the
exercise of their collective bargaining rights. Certainly, there is a mutuality of interest among the employees of the
Sawmill Division and the Logging Division. Their functions mesh with one another. One group needs the other in
the same way that the company needs them both. There may be differences as to the nature of their individual
assignments, but the distinctions are not enough to warrant the formation of a separate bargaining unit.
Thus, applying the ruling to the present case, the Court affirms the finding of the CA that there should be only one
bargaining unit for the employees in Cabuyao, San Fernando, and Otis of Magnolia Poultry Products Plant involved
in ―dressed‖ chicken processing and Magnolia Poultry Farms engaged in ―live‖ chicken operations. Certain factors,
such as specific line of work, working conditions, location of work, mode of compensation, and other relevant
conditions do not affect or impede their commonality of interest. Although they seem separate and distinct from
each other, the specific tasks of each division are actually interrelated and there exists mutuality of interests which
warrants the formation of a single bargaining unit.
Confidential employees are defined as those who (1) assist or act in a confidential capacity, in regard (2) to
persons who formulate, determine, and effectuate management policies in the field of labor relations.[ The two
criteria are cumulative, and both must be met if an employee is to be considered a confidential employee - that is,
the confidential relationship must exist between the employee and his supervisor, and the supervisor must handle
the prescribed responsibilities relating to labor relations. The exclusion from bargaining units of employees who, in
the normal course of their duties, become aware of management policies relating to labor relations is a principal
objective sought to be accomplished by the ―confidential employee rule.‖
2nd Issue (PAYROLL MASTER NOT CONFIDENTIAL, HUMAN RESOURCE ASSISTANT and PERSONNEL
ASSISTANT CONFIDENTIAL!!)
A confidential employee is one entrusted with confidence on delicate, or with the custody, handling or care and
protection of the employer‘s property. Confidential employees, such as accounting personnel, should be excluded
from the bargaining unit, as their access to confidential information may become the source of undue
advantage. However, such fact does not apply to the position of Payroll Master and the whole gamut of employees
who, as perceived by petitioner, has access to salary and compensation data. The CA correctly held that the
position of Payroll Master does not involve dealing with confidential labor relations information in the course of the
performance of his functions. Since the nature of his work does not pertain to company rules and regulations and
confidential labor relations, it follows that he cannot be excluded from the subject bargaining unit.
Corollarily, although Article 245 of the Labor Code limits the ineligibility to join, form and assist any labor
organization to managerial employees, jurisprudence has extended this prohibition to confidential employees or
those who by reason of their positions or nature of work are required to assist or act in a fiduciary manner to
managerial employees and, hence, are likewise privy to sensitive and highly confidential records. Confidential
employees are thus excluded from the rank-and-file bargaining unit. The rationale for their separate category and
disqualification to join any labor organization is similar to the inhibition for managerial employees, because if
allowed to be affiliated with a union, the latter might not be assured of their loyalty in view of evident conflict of
interests and the union can also become company-denominated with the presence of managerial employees in the
union membership. Having access to confidential information, confidential employees may also become the source
of undue advantage. Said employees may act as a spy or spies of either party to a collective bargaining
agreement.
In this regard, the CA correctly ruled that the positions of Human Resource Assistant and Personnel Assistant
belong to the category of confidential employees and, hence, are excluded from the bargaining unit, considering
their respective positions and job descriptions. As Human Resource Assistant, the scope of one‘s
work necessarily involves labor relations, recruitment and selection of employees, access to employees' personal
files and compensation package, and human resource management. As regards a Personnel Assistant, one's work
includes the recording of minutes for management during collective bargaining negotiations, assistance to
management during grievance meetings and administrative investigations, and securing legal advice for labor
issues from the petitioner‘s team of lawyers, and implementation of company programs. Therefore, in the
discharge of their functions, both gain access to vital labor relations information which outrightly disqualifies them
from union membership.
The proceedings for certification election are quasi-judicial in nature and, therefore, decisions rendered in
such proceedings can attain finality.
It bears stressing that a certification election is the sole concern of the workers; hence, an employer lacks the
personality to dispute the same. The general rule is that an employer has no standing to question the process of
certification election, since this is the sole concern of the workers. Law and policy demand that employers take a
strict, hands-off stance in certification elections. The bargaining representative of employees should be chosen free
from any extraneous influence of management. A labor bargaining representative, to be effective, must owe its
loyalty to the employees alone and to no other. The only exception is where the employer itself has to file the
petition pursuant to Article 258 of the Labor Code because of a request to bargain collectively.
BPI vs. BPI EMPLOYEES UNION - DAVAO CHARTER

[G.R. No. 164301, October 19, 2011 RESOLUTION ON THE MAIN DECISION OF AUGUST 18, 2010]
Facts:
On March 23, 2000, the Bangko Sentral ng Pilipinas approved the Articles of Merger executed on January 20, 2000
by and between BPI, herein petitioner, and FEBTC. This Article and Plan of Merger was approved by the Securities
and Exchange Commission on April 7, 2000.
Pursuant to the Article and Plan of Merger, all the assets and liabilities of FEBTC were transferred to and absorbed
by BPI as the surviving corporation. FEBTC employees, including those in its different branches across the country,
were hired by petitioner as its own employees, with their status and tenure recognized and salaries and benefits
maintained.
Respondent BPI Employees Union-Davao Chapter - Federation of Unions in BPI Unibank (hereinafter the "Union,"
for brevity) is the exclusive bargaining agent of BPI‘s rank and file employees in Davao City. The former FEBTC
rank-and-file employees in Davao City did not belong to any labor union at the time of the merger. Prior to the
effectivity of the merger, or on March 31, 2000, respondent Union invited said FEBTC employees to a meeting
regarding the Union Shop Clause (Article II, Section 2) of the existing CBA between petitioner BPI and respondent
Union.
The parties both advert to certain provisions of the existing CBA, which includes:
Section 2. Union Shop - New employees falling within the bargaining unit as defined in Article I of this Agreement,
who may hereafter be regularly employed by the Bank shall, within thirty (30) days after they become regular
employees, join the Union as a condition of their continued employment. It is understood that membership in good
standing in the Union is a condition of their continued employment with the Bank.
After the meeting called by the Union, some of the former FEBTC employees joined the Union, while others
refused. Later, however, some of those who initially joined retracted their membership.
Respondent Union then sent notices to the former FEBTC employees who refused to join, as well as those who
retracted their membership, and called them to a hearing regarding the matter. When these former FEBTC
employees refused to attend the hearing, the president of the Union requested BPI to implement the Union Shop
Clause of the CBA and to terminate their employment pursuant thereto.
Issue:
Whether or not the former FEBTC employees that were absorbed by petitioner upon the merger between FEBTC
and BPI should be covered by the Union Shop Clause found in the existing CBA between petitioner and respondent
Union.
Ruling:
Yes. They are covered by the Union Shop Clause.
"Union security" is a generic term which is applied to and comprehends "closed shop," "union shop," "maintenance
of membership" or any other form of agreement which imposes upon employees the obligation to acquire or retain
union membership as a condition affecting employment. There is union shop when all new regular employees are
required to join the union within a certain period for their continued employment. There is maintenance of
membership shop when employees, who are union members as of the effective date of the agreement, or who
thereafter become members, must maintain union membership as a condition for continued employment until they
are promoted or transferred out of the bargaining unit or the agreement is terminated. A closed-shop, on the other
hand, may be defined as an enterprise in which, by agreement between the employer and his employees or their
representatives, no person may be employed in any or certain agreed departments of the enterprise unless he or
she is, becomes, and, for the duration of the agreement, remains a member in good standing of a union entirely
comprised of or of which the employees in interest are a part.
In the case of Liberty Flour Mills Employees v. Liberty Flour Mills, Inc., we ruled that: It is the policy of the State to
promote unionism to enable the workers to negotiate with management on the same level and with more
persuasiveness than if they were to individually and independently bargain for the improvement of their respective
conditions. To this end, the Constitution guarantees to them the rights "to self-organization, collective bargaining
and negotiations and peaceful concerted actions including the right to strike in accordance with law." There is no
question that these purposes could be thwarted if every worker were to choose to go his own separate way instead
of joining his co-employees in planning collective action and presenting a united front when they sit down to
bargain with their employers. It is for this reason that the law has sanctioned stipulations for the union shop and
the closed shop as a means of encouraging the workers to join and support the labor union of their own choice as
their representative in the negotiation of their demands and the protection of their interest vis-à-vis the employer.
In other words, the purpose of a union shop or other union security arrangement is to guarantee the continued
existence of the union through enforced membership for the benefit of the workers.
All employees in the bargaining unit covered by a Union Shop Clause in their CBA with management are subject to
its terms. However, under law and jurisprudence, the following kinds of employees are exempted from its coverage,
namely, employees who at the time the union shop agreement takes effect are bona fide members of a religious
organization which prohibits its members from joining labor unions on religious grounds; employees already in the
service and already members of a union other than the majority at the time the union shop agreement took effect;
confidential employees who are excluded from the rank and file bargaining unit; and employees excluded from the
union shop by express terms of the agreement.
When certain employees are obliged to join a particular union as a requisite for continued employment, as in the
case of Union Security Clauses, this condition is a valid restriction of the freedom or right not to join any labor
organization because it is in favor of unionism. This Court, on occasion, has even held that a union security clause
in a CBA is not a restriction of the right of freedom of association guaranteed by the Constitution. Moreover, a
closed shop agreement is an agreement whereby an employer binds himself to hire only members of the
contracting union who must continue to remain members in good standing to keep their jobs. It is "the most prized
achievement of unionism." It adds membership and compulsory dues. By holding out to loyal members a promise
of employment in the closed shop, it wields group solidarity.
Indeed, the situation of the former FEBTC employees in this case clearly does not fall within the first three
exceptions to the application of the Union Shop Clause discussed earlier. No allegation or evidence of religious
exemption or prior membership in another union or engagement as a confidential employee was presented by both
parties. The sole category therefore in which petitioner may prove its claim is the fourth recognized exception or
whether the former FEBTC employees are excluded by the express terms of the existing CBA between petitioner
and respondent.
As the Union likewise pointed out in its pleadings, there were benefits under the CBA that the former FEBTC
employees did not enjoy with their previous employer. As BPI employees, they will enjoy all these CBA benefits
upon their "absorption." Thus, although in a sense BPI is continuing FEBTC‘s employment of these absorbed
employees, BPI‘s employment of these absorbed employees was not under exactly the same terms and conditions
as stated in the latter‘s employment contracts with FEBTC. This further strengthens the view that BPI and the
former FEBTC employees voluntarily contracted with each other for their employment in the surviving corporation.
The rationale for upholding the validity of union shop clauses in a CBA, even if they impinge upon the individual
employee‘s right or freedom of association, is not to protect the union for the union‘s sake. Laws and jurisprudence
promote unionism and afford certain protections to the certified bargaining agent in a unionized company because
a strong and effective union presumably benefits all employees in the bargaining unit since such a union would be
in a better position to demand improved benefits and conditions of work from the employer.
In the case at bar, since the former FEBTC employees are deemed covered by the Union Shop Clause, they are
required to join the certified bargaining agent, which supposedly has gathered the support of the majority of
workers within the bargaining unit in the appropriate certification proceeding. Their joining the certified union
would, in fact, be in the best interests of the former FEBTC employees for it unites their interests with the majority
of employees in the bargaining unit. It encourages employee solidarity and affords sufficient protection to the
majority status of the union during the life of the CBA which are the precisely the objectives of union security
clauses, such as the Union Shop Clause involved herein. We are indeed not being called to balance the interests of
individual employees as against the State policy of promoting unionism, since the employees, who were parties in
the court below, no longer contested the adverse Court of Appeals‘ decision. Nonetheless, settled jurisprudence has
already swung the balance in favor of unionism, in recognition that ultimately the individual employee will be
benefited by that policy. In the hierarchy of constitutional values, this Court has repeatedly held that the right to
abstain from joining a labor organization is subordinate to the policy of encouraging unionism as an instrument of
social justice.
In sum, this Court finds it reasonable and just to conclude that the Union Shop Clause of the CBA covers the
former FEBTC employees who were hired/employed by BPI during the effectivity of the CBA in a manner which
petitioner describes as "absorption." A contrary appreciation of the facts of this case would, undoubtedly, lead to an
inequitable and very volatile labor situation which this Court has consistently ruled against.
In the case of former FEBTC employees who initially joined the union but later withdrew their membership, there is
even greater reason for the union to request their dismissal from the employer since the CBA also contained a
Maintenance of Membership Clause.
A final point in relation to procedural due process, the Court is not unmindful that the former FEBTC employees‘
refusal to join the union and BPI‘s refusal to enforce the Union Shop Clause in this instance may have been based
on the honest belief that the former FEBTC employees were not covered by said clause. In the interest of fairness,
we believe the former FEBTC employees should be given a fresh thirty (30) days from notice of finality of this
decision to join the union before the union demands BPI to terminate their employment under the Union Shop
Clause, assuming said clause has been carried over in the present CBA and there has been no material change in
the situation of the parties.
OCTAVIO vs. PHILIPPINE LONG DISTANCE TELEPHONE COMPANY

[G.R. No. 175492, February 27, 2013]
Facts:
On October 1, 2000, PLDT hired Octavio as Sales System Analyst I on a probationary status. He became a member
of GUTS. When Octavio was regularized on January 1, 2001, he was receiving a monthly basic salary of
P10,000.00. On February 1, 2002, he was promoted to the position of Sales System Analyst 2 and his salary was
increased to P13,730.00.
Octavio claimed entitlement to salary increases per the CBAs of 1999-2001 and 2002-2004. He insisted that when
he was regularized as a supervisory employee on January 1, 2001, he became entitled to receive the across-the-
board increase of P2,500.00 as provided for under the CBA of 1999-2001 which took effect on January 1, 1999.
Then pursuant to the CBA of 2002-2004, he should have received an additional increase of P2,000.00 apart from
the merit increase of P3,730.00 which was given him due to his promotion on February 1, 2002. However, PLDT
unilaterally decided to deem as included in the said P3,730.00 the P2,000.00 across-the-board increase for 2002 as
stipulated in the CBA of 2002-2004. This, according to Octavio, amounts to diminution of benefits. Moreover,
Octavio averred that the CBA cannot be the subject of further negotiation as it has the force of law between the
parties. Finally, Octavio claimed that PLDT committed an act of unfair labor practice because, while it granted the
claim for salary increase of 18 supervisory employees who were regularized on January 1, 2002 and onwards, it
discriminated against him by refusing to grant him the same salary increase. He thus prayed for an additional
award of damages and attorney's fees.
PLDT countered that the issues advanced by Octavio had already been resolved by the Union-Management
Grievance Committee when it denied his claims through the Committee Resolution. Moreover, the grant of across-
the-board salary increase for those who were regularized starting January 1, 2002 and the exclusion thereto of
those who were regularized on January 1, 2001, do not constitute an act of unfair labor practice as would result in
any discrimination or encourage or discourage membership in a labor organization. In fact, when the Union-
Management Grievance Committee came up with the Committee Resolution, they considered the same as the most
practicable and reasonable solution for both management and union. At any rate, the said Committee Resolution
had already become final and conclusive between the parties for failure of Octavio to elevate the same to the
proper forum. In addition, PLDT claimed that the NLRC has no jurisdiction to hear and decide Octavio's claims.
The committee failed to reach an agreement. Hence, Management position deemed adopted which is read as
follows:
xxx
B) Mr. Octavio's salary at the time of his promotion and before the conclusion of the GUTS CBA was
P10,000.00.
C) Upon the effectivity of his promotion on February 1, 2002, his basic monthly salary was adjusted to
P13,730.00, the minimum salary of the new position.
D) In June 2002, the GUTS-CBA was concluded and Mr. Octavio's basic salary was recomputed to include
the P2,000.00 1st year increase retroactive January 2002. The resulting basic salary was P12,000.00.
E) Applying the above-mentioned policy, Mr. Octavio's basic salary was adjusted to the minimum salary of
the new position, which is P13,730.00.
xxx
Aggrieved, Octavio filed before the Arbitration Branch of the NLRC a Complaint for payment of said salary
increases.
The Labor Arbiter dismissed the Complaint of Octavio and upheld the Committee Resolution.
The CA declared the Committee Resolution to be binding on Octavio, he being a member of GUTS, and because he
failed to question its validity and enforceability.
Issue:
a. Whether the employer and bargaining representative may amend the provisions of the collective bargaining
agreement without the consent and approval of the employees;
b. If so, whether the said agreement is binding [on] the employees;
c. Whether merit increases may be awarded simultaneously with increases given in the Collective Bargaining
Agreement
Ruling:
The claim of an individual employee for salary increase under the terms of the existing collective bargaining
agreement (CBA) is a matter subject of the grievance machinery, it involving the interpretation and implementation
of the pertinent provisions of the CBA. From the denial of his claim by the Union- Management Grievance
Committee, his recourse pursuant to the CBA was to elevate his grievance to the Board of Arbitrators for final
decision. Here, he instead filed a complaint with the arbitration branch of the NLRC nine months after the
resolution of the Union- Management Grievance Committee. His complaint must therefore fail. By failing to abide
with the procedure prescribed by the CBA, he is deemed to have waived his right to question the resolution of the
Committee. Clearly, he departed from the grievance procedure mandated in the CBA and denied the Board of
Arbitrators the opportunity to pass upon a matter over which it has jurisdiction. That has the effect of making the
Committee‘s resolution binding upon him. Moreover, the Committee‘s resolution is not a modification of the CBA.
Said resolution is a product of the grievance procedure outlined in the CBA itself. Finally, the denial of his claim for
salary increase did not violate Article 100 of the Labor Code against diminution of benefits. Even assuming there is
diminution of benefits, Article 100 does not prohibit a union from offering and agreeing to reduce wages and
benefits of the employees as the right to free collective bargaining includes the right to suspend it. Bargaining
covers a process of finding a reasonable and acceptable solution to stabilize labor-management relations to
promote stable industrial peace.
NATIONAL UNION OF BANK EMPLOYEES vs. PHILNABANK EMPLOYEES ASSOCIATION

[G.R. No. 174287, August 12, 2013]
Facts:
Philippine National Bank (PNB) used to be a government-owned and controlled banking institution. Its rank-and-file
employees, being government personnel, were represented for collective negotiation by the Philnabank Employees
Association (PEMA), a public sector union. In 1996, the Securities and Exchange Commission approved its changed
status as a private corporation. PEMA affiliated with petitioner National Union of Bank Employees (NUBE), which is
a labor federation composed of unions in the banking industry, adopting the name NUBE-PNB Employees Chapter
(NUBE-PEC).
Later, NUBE-PEC was certified as the sole and exclusive bargaining agent of the PNB rank-and-file employees. A
collective bargaining agreement (CBA) was subsequently signed between NUBE-PEC and PNB covering the period
of January 1, 1997 to December 31, 2001.
Pursuant to Article V on Check-off and Agency Fees of the CBA, PNB shall deduct the monthly membership fee
and other assessments imposed by the union from the salary of each union member, and agency fee from the
salary of the rank- and-file employees within the bargaining unit who are not union members. Moreover, during the
effectivity of the CBA, NUBE, being the Federation union, agreed that PNB shall remit P15.00 of the P65.00 union
dues per month collected by PNB from every employee, and that PNB shall directly credit the amount to NUBE‘s
current account with PNB.
Following the expiration of the CBA, the Philnabank Employees Association-FFW (PEMA-FFW) filed on January 2,
2002 a petition for certification election among the rank-and-file employees of PNB. While the petition for
certification election was still pending, two significant events transpired – the independent union registration of
NUBE- PEC and its disaffiliation with NUBE.
Thereafter, the Board of Directors of NUBE-PEC adopted a Resolution disaffiliating itself from NUBE.
On June 25, 2003, NUBE-PEC filed a Manifestation and Motion before the Med-Arbitration Unit of DOLE, praying
that, in view of its independent registration as a labor union and disaffiliation from NUBE, its name as appearing in
the official ballots of the certification election be changed to "Philnabank Employees Association (PEMA)" or, in the
alternative, both parties be allowed to use the name "PEMA" but with PEMA-FFW and NUBE-PEC be denominated
as "PEMA-Bustria Group" and "PEMA-Serrana Group," respectively.
On the same date, PEMA sent a letter to the PNB management informing its disaffiliation from NUBE and
requesting to stop, effective immediately, the check-off of the P15.00 due for NUBE.
Acting thereon, on July 4, 2003, PNB informed NUBE of PEMA‘s letter and its decision to continue the deduction of
the P15.00 fees, but stop its remittance to NUBE effective July 2003. PNB also notified NUBE that the amounts
collected would be held in a trust account pending the resolution of the issue on PEMA‘s disaffiliation.
Issue:
Whether PEMA validly disaffiliated itself from NUBE, the resolution of which, in turn, inevitably affects the latter‘s
right to collect the union dues held in trust by PNB.
Ruling:
We deny the petition.
Whether there was a valid disaffiliation is a factual issue. It is elementary that a question of fact is not
appropriate for a petition for review on certiorari under Rule 45 of the Rules of Court. When supported by
substantial evidence, the findings of fact of the CA are conclusive and binding on the parties and are not
reviewable by this Court subject to exceptions. However, the Court finds no cogent reason to apply these
recognized exceptions.
The right of the local union to exercise the right to disaffiliate from its mother union is well settled in
this jurisdiction.
A local union has the right to disaffiliate from its mother union or declare its autonomy. A local union, being a
separate and voluntary association, is free to serve the interests of all its members including the freedom to
disaffiliate or declare its autonomy from the federation which it belongs when circumstances warrant, in accordance
with the constitutional guarantee of freedom of association.
Local unions do not owe their creation and existence to the national federation to which they are affiliated but,
instead, to the will of their members. The sole essence of affiliation is to increase, by collective action, the
common bargaining power of local unions for the effective enhancement and protection of their interests.
Admittedly, there are times when without succor and support local unions may find it hard, unaided by other
support groups, to secure justice for themselves.
It only gives rise to a contract of agency, where the former acts in representation of the latter. Hence, local
unions are considered principals while the federation is deemed to be merely their agent. As such
principals, the unions are entitled to exercise the rights and privileges of a legitimate labor organization, including
the right to seek certification as the sole and exclusive bargaining agent in the appropriate employer unit.
x x x [A] local union may disaffiliate at any time from its mother federation, absent any showing that the
same is prohibited under its constitution or rule. Such, however, does not result in it losing its legal
personality altogether.
In the case at bar, there is nothing shown in the records nor is it claimed by NUBE that PEMA was expressly
forbidden to disaffiliate from the federation nor were there any conditions imposed for a valid breakaway. This
being so, PEMA is not precluded to disaffiliate from NUBE after acquiring the status of an independent labor
organization duly registered before the DOLE.
Also, there is no merit on NUBE‘s contention that PEMA‘s disaffiliation is invalid for non-observance of the procedure
that union members should make such determination through secret ballot and after due deliberation, conformably
with Article 241 (d) of the Labor Code, as amended. Conspicuously, other than citing the opinion of a "recognized
labor law authority," NUBE failed to quote a specific provision of the law or rule mandating that a local union‘s
disaffiliation from a federation must comply with Article 241 (d) in order to be valid and effective.
Granting, for argument‘s sake, that Article 241 (d) is applicable, still, We uphold PEMA‘s disaffiliation from NUBE.
First, non-compliance with the procedure on disaffiliation, being premised on purely technical grounds cannot rise
above the employees‘ fundamental right to self-organization and to form and join labor organizations of their own
choosing for the purpose of collective bargaining. Second, the Article nonetheless provides that when the nature
of the organization renders such secret ballot impractical, the union officers may make the decision in behalf of the
general membership. In this case, NUBE did not even dare to contest PEMA‘s representation that "PNB employees,
from where [PEMA] [derives] its membership, are scattered from Aparri to Jolo, manning more than 300 branches
in various towns and cities of the country," hence, "[to] gather the general membership of the union in a general
membership to vote through secret balloting is virtually impossible." It is understandable, therefore, why PEMA‘s
board of directors merely opted to submit for ratification of the majority their resolution to disaffiliate from NUBE.
Third, and most importantly, NUBE did not dispute the existence of the persons or their due execution of the
document showing their unequivocal support for the disaffiliation of PEMA from NUBE.
Consequently, by PEMA's valid disaffiliation from NUBE, the vinculum that previously bound the two entities was
completely severed. As NUBE was divested of any and all power to act in representation of PEMA, any act
performed by the former that affects the interests and affairs of the latter, including the supposed expulsion of
Serrana et al., is rendered without force and effect.
Also, in effect, NUBE loses it right to collect all union dues held in its trust by PNB. The moment that PEMA
separated from and left NUBE and exists as an independent labor organization with a certificate of registration, the
former is no longer obliged to pay dues and assessments to the latter; naturally, there would be no longer any
reason or occasion for PNB to continue making deductions.
Without said affiliation, the employer has no link to the mother union. The obligation of an employee to pay union
dues is coterminous with his affiliation or membership. "The employees' check-off authorization, even if declared
irrevocable, is good only as long as they remain members of the union concerned." A contract between an
employer and the parent organization as bargaining agent for the employees is terminated bv the disaffiliation
ofthe local of which the employees are members.
On the other hand, it was entirely reasonable for PNB to enter into a CBA with PEMA as represented by Serrana et
al. Since PEMA had validly separated itself from NUBE, there would be no restrictions which could validly hinder it
from collectively bargaining with PNB.
TAKATA v. SALAMAT
GR 196276, June 4, 2014
FACTS:
Petitioner filed for Cancellation of the Certificate of Union Registration of Respondent Samahang Lakas
Manggagawa ng Takata on the ground of misrepresentation, false statement and fraud with respect to the number
of those who participated in the organizational meeting, the adoption and ratification of its Constitution and By-
laws and in the elections of its officers.
Petitioner‘s contention:
It contended that in May 1, 2009 during the organizational meeting, only 17% of the total number of the
396 regular rank-and-file employees which respondent sought to represent.
Hence failed to comply with the 20% minimum membership requirement.
Petitioner insisted that the document ―Pangalan ng mga kasapi ng union‖ bore no signatures of the alleged
119 member, and the document ―Sama-samang pahayag ng Pagsapi‖ was not submitted at the time of the filing of
application for union registration.
That the 119 union members were actually 117 and the number of employees were 470 and not 396 as
respondent claimed.
Respondent‘s contention:
The 119 union members were more than the 205 requirement for union registration.
The document ―Sama-samang pahayag ng Pagsapi sa unyon‖ supported their claim of 119 members.
They also contend that the petitioner is estopped from assailing its legal personality as it agreed to a
certification election proceedings.
Respondent argues that the union members were informed of the contents of the documents they signed
and that the 68 attendees constituted more than 50% of the total union membership.
DOLE Regional Director Atty. Martinez, Sr. granted the petition for cancellation of the certificate of
registration.
Respondent through Bukluran ng Manggagawang Pilipino (BMP) Paralegal officer, Domingo Mole, filed a
Notice and Memorandum of Appeal with the Bureau of Labor Relations. However, respondent, through its counsels,
filed a Notice and Memorandum of Appeal with Formal Entry of Appearance to the office of DOLE Sec.
Petitioner filed an opposition on the ground of forum shopping claiming that respondent filed two separate
appeals in two separate venues.
Respondent answered that there was no forum shopping as BMP‘s Paralegal Officer Domingo Mole, was no
longer authorized to file an appeal as the latter‘s link with BMP was already terminated.
The BLR reversed the Order of the Regional Director.
Petitioner filed a motion for reconsideration, which was denied by the BLR. Petitioner went to the CA via a
petition for certiorari under Rule 65.
CA assailed its decision which the denied the petition and affirmed the decision of the BLR.
ISSUES:
1. Whether or not respondent was guilty of forum shopping.

2. Whether or not the application for registration was compliant with the law.
HELD:
First issue, Respondent did not commit forum shopping.

BMP Paralegal officer Domingo Mole was no longer authorized to file an appeal on behalf of the respondent
and that BMP was duly informed that its services was already terminated.
It is held ―if a complaint is filed for and behalf of the plaintiff who is not authorized to do so, the complaint
is not deemed filed.‖
An unauthorized complaint does not produce any legal effect.
Second issue, It does not appear in Article 234 (b) of the Labor Code that the attendees in the
organizational meeting must comprise 20% of the employees in the bargaining unit. In fact, even the
Implementing Rules and Regulations of the Labor Code does not so provide.
Clearly, the 20% minimum requirement pertains to the employees‘ membership in the union and not to the
list of workers who participated in the organizational meeting
Respondent submitted a document entitled "Pangalan ng Mga Kasapi ng Unyon" showing the names of 119
employees as union members, thus respondent sufficiently complied even beyond the 20% minimum membership
requirement.
The one who alleges a fact has the burden of proving it and a mere allegation is not evidence. In fact, we
note that not one of those listed in the document denominated as "Pangalan ng Mga Kasaping Unyon" had come
forward to deny their membership with respondent.
In this case, we agree with the BLR and the CA that respondent could not have possibly committed
misrepresentation, fraud, or false statements.
RIGHTS OF LEGITIMATE LABOR ORGANIZATION
RIVERA vs. ESPIRITU

[G.R. No. 135547, January 23, 2002]
Facts:
On June 5, 1998, PAL pilots affiliated with the Airline Pilots Association of the Philippines (ALPAP) went on a three-
week strike, causing serious losses to the financially beleaguered flag carrier. As a result, PAL‘s financial situation
went from bad to worse. Faced with bankruptcy, PAL adopted a rehabilitation plan and downsized its labor force by
more than one-third.
On July 22, 1998, PALEA went on strike to protest the retrenchment measures adopted by the airline, which
affected 1,899 union members. The strike ended four days later, when PAL and PALEA agreed to a more
systematic reduction in PAL‘s work force and the payment of separation benefits to all retrenched employees.
On August 28, 1998, then President Estrada issued Administrative Order No. 16 creating an Inter-Agency Task
Force (Task Force) to address the problems of the ailing flag carrier. The Task Force was composed of the
Departments of Finance, Labor and Employment, Foreign Affairs, Transportation and Communication, and Tourism,
together with the Securities and Exchange Commission (SEC). It was ―empowered to summon all parties
concerned for conciliation, mediation (for) the purpose of arriving at a total and complete solution of the problem.‖
Conciliation meetings were then held between PAL management and the three unions representing the airline‘s
employees, with the Task Force as mediator.
PAL management submitted to the Task Force an offer by private respondent Lucio Tan, Chairman and Chief
Executive Officer of PAL, of a plan to transfer shares of stock to its employees. The pertinent portion of said plan,
apart from transferring shares of stocks of the company to employees reads that:
xxx
3. In order for PAL to attain (a) degree of normalcy while we are tackling its problems, we would request for a
suspension of the Collective Bargaining Agreements (CBAs) for 10 years.
This offer was rejected by the members of PALEA, a duly organized registered union of PAL. After a few more
negotiations, and mounting pressure on the worker‘s due to PAL‘s imminent closure, the following was agreed upon
and further ratified by PALEA and PAL:
―x x x
4. To assure investors and creditors of industrial peace, PALEA agrees, subject to the ratification by the general
membership, (to) the suspension of the PAL-PALEA CBA for a period of ten (10) years, provided the following
safeguards are in place:
a. PAL shall continue recognizing PALEA as the duly certified bargaining agent of the regular rank-and-file ground
employees of the Company;
b. The ‗union shop/maintenance of membership‘ provision under the PAL-PALEA CBA shall be respected.
x x x.‖
Seven officers and members of PALEA filed a petition to annul the agreement entered into between PAL and PALEA
on the ground that it violates the constitutional rights of employees to self-organization and collective bargaining,
being founded on public policy, may not be waived, nor waiver, ratified.
Issue:
Whether or not the PAL-PALEA agreement, stipulating the suspension of the PAL-PALEA CBA unconstitutional and
contrary to public policy.
Ruling:
The SC held that the agreement is both constitutional and in consonance with public policy.
Petitioners claim the agreement‘s unconstitutionality saying that violates the worker‘s right to self-organization and
collective bargaining hence violating the ―protection to labor‖ policy laid down by the Constitution:
ART. 253-A. Terms of a Collective Bargaining Agreement. – Any Collective Bargaining Agreement that the parties
may enter into shall, insofar as the representation aspect is concerned, be for a term of five (5) years.x x x All
other provisions of the Collective Bargaining Agreement shall be renegotiated not later than three (3) years after its
execution.
Under this provision, insofar as representation is concerned, a CBA has a term of five years, while the other
provisions, except for representation, may be negotiated not later than three years after the execution. Petitioners
submit by agreeing to a 10-year suspension, PALEA, in effect, abdicated the workers‘ constitutional right to bargain
for another CBA at the mandated time. This argument is devoid of merit.
A CBA is ―a contract executed upon request of either the employer or the exclusive bargaining representative
incorporating the agreement reached after negotiations with respect to wages, hours of work and all other terms
and conditions of employment, including proposals for adjusting any grievances or questions arising under such
agreement.‖
The assailed PAL-PALEA agreement was the result of voluntary collective bargaining negotiations undertaken in the
light of the severe financial situation faced by the employer, with the peculiar and unique intention of not merely
promoting industrial peace at PAL, but preventing the latter‘s closure.
The primary purpose of a CBA is the stabilization of labor-management relations in order to create a climate of a
sound and stable industrial peace.
The SC found no conflict between said agreement and Article 253-A of the Labor Code. Article 253-A has a two-
fold purpose. One is to promote industrial stability and predictability. Inasmuch as the agreement sought to
promote industrial peace at PAL during its rehabilitation, said agreement satisfies the first purpose of Article 253-A.
The other is to assign specific timetables wherein negotiations become a matter of right and requirement. Nothing
in Article 253-A, prohibits the parties from waiving or suspending the mandatory timetables and agreeing on the
remedies to enforce the same.
In the instant case, it was PALEA, as the exclusive bargaining agent of PAL‘s ground employees, that voluntarily
entered into the CBA with PAL and opted for the 10-year suspension of the CBA. Either case it was the union‘s
exercise of its right to collective bargaining. The right to free collective bargaining, after all, includes the right to
suspend it.
Petitioners further allege that the 10-year suspension of the CBA under the PAL-PALEA agreement virtually installed
PALEA as a company union for said period, amounting to unfair labor practice.
The questioned proviso of the agreement reads:

a. PAL shall continue recognizing PALEA as the duly certified-bargaining agent of the regular rank-and-file ground
employees of the Company;
The aforesaid provision clearly only shows the intent of the parties to maintain ―union security‖ during the period of
the suspension of the CBA. Its objective is to assure the continued existence of PALEA during the said period. We
are unable to declare the objective of union security an unfair labor practice. It is State policy to promote unionism
to enable workers to negotiate with management on an even playing field and with more persuasiveness than if
they were to individually and separately bargain with the employer. For this reason, the law has allowed
stipulations for ―union shop‖ and ―closed shop‖ as means of encouraging workers to join and support the union of
their choice in the protection of their rights and interests vis-à-vis the employer.
Petitioners‘ contention that the agreement installs PALEA as a virtual company union is also untenable. Under
Article 248 (d) of the Labor Code, a company union exists when the employer acts ―[t]o initiate, dominate, assist or
otherwise interfere with the formation or administration of any labor organization, including the giving of financial
or other support to it or its organizers or supporters.‖ The case records are bare of any showing of such acts by
PAL.
We also do not agree that the agreement violates the five-year representation limit mandated by Article 253-A.
Under said article, the representation limit for the exclusive bargaining agent applies only when there is an extant
CBA in full force and effect. In the instant case, the parties agreed to suspend the CBA and put in abeyance the
limit on the representation period.
In sum, we are of the view that the PAL-PALEA agreement dated September 27, 1998, is a valid exercise of the
freedom to contract. Under the principle of inviolability of contracts guaranteed by the Constitution, the contract
must be upheld.
MANILA DIAMOND HOTEL EMPLOYEES UNION vs. COURT OF APPEALS

[G.R. No. 140518, December 16, 2004]
Facts:
On November 11, 1996, Petitioner union filed a petition for a certification election so that it may be declared the
exclusive bargaining representative of the Hotel‘s employees for the purpose of collective bargaining. The petition
was dismissed by the DOLE on January 15, 1997. After a few months, however, on August 25, 1997, petitioner
union sent a letter to the Hotel informing it of its desire to negotiate for a collective bargaining agreement. In reply,
respondent hotel write to the union stating that the Hotel cannot recognize it as the employees‘ bargaining agent
since its petition for certification election had been earlier dismissed by the DOLE. On that same day, the Hotel
received a letter from the Union stating that they were not giving the Hotel a notice to bargain, but that they were
merely asking for the Hotel to engage in collective bargaining negotiations with the Union for its members only and
not for all the rank and file employees of the Hotel.
On September 18, 1997, the Union announced that it was taking a strike vote. A Notice of Strike was thereafter
filed on September 29, 1997, with the NCMB for the Hotel‘s alleged ―refusal to bargain‖ and for alleged acts of
unfair labor practice. The NCMB summoned both parties and held a series of dialogues, the first of which was on
October 6, 1997. On November 29, 1997, however, the Union staged a strike against the Hotel. Numerous
confrontations between the two parties followed, creating an obvious strain between them. The Hotel claims that
the strike was illegal and it had to dismiss some employees for their participation in the allegedly illegal concerted
activity. The Union, on the other hand, accused the Hotel of illegally dismissing the workers.
The SOLE then assumed jurisdiction over the labor dispute, and issued an order certifying the same to the NLRC
for compulsory arbitration. The striking officers and members of the union were also directed to return to work and
the Hotel to accept them back under the same terms and conditions prevailing prior to the strike. The parties are
enjoined from committing any act that may exacerbate the situation. The union members reported for work the
day after in received the order but the Hotel refused to accept the returning workers and instead filed a Motion for
Reconsideration of the SOLE‘s Order.
Thereafter, the SOLE issued another order modifying the order earlier issued. Instead of an actual return to work,
the SOLE directed that the strikers be reinstated only in the payroll. The Union moved for the reconsideration of
this Order, but its motion was denied. On appeal, the CA affirmed the order of the SOLE for payroll reinstatement.
The CA held that the challenged order is merely an error of judgment and not a grave abuse of discretion and that
payroll reinstatement is not prohibited by law, but may be ―called for‖ under certain circumstances.
Issue:
Whether or not the order of the SOLE for payroll reinstatement is ―called for the circumstance‖ of this case.
Ruling:
The SC held that there is no showing that the facts called for payroll reinstatement as an alternative remedy. A
strained relationship between the striking employees and management is no reason for payroll reinstatement in lieu
of actual reinstatement. Petitioner correctly points out that labor disputes naturally involve strained relations
between labor and management, and that in most strikes, the relations between the strikers and the non-strikers
will similarly be tense. Bitter labor disputes always leave an aftermath of strong emotions and unpleasant
situations. Nevertheless, the government must still perform its function and apply the law, especially if, as in this
case, national interest is involved.
As a general rule, the State encourages an environment wherein employers and employees themselves must deal
with their problems in a manner that mutually suits them best. This is the basic policy embodied in Article XIII,
Section 3 of the Constitution, which was further echoed in Article 211 of the Labor Code. Hence, a voluntary,
instead of compulsory, mode of dispute settlement is the general rule.
However, Article 263, paragraph (g) of the Labor Code, which allows the Secretary of Labor to assume jurisdiction
over a labor dispute involving an industry indispensable to the national interest, provides an exception:
(g) When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in an industry
indispensable to the national interest, the Secretary of Labor and Employment may assume jurisdiction over the
dispute and decide it or certify the same to the Commission for compulsory arbitration. Such assumption or
certification shall have the effect of automatically enjoining the intended or impending strike or lockout as specified
in the assumption or certification order. If one has already taken place at the time of assumption or certification,
all striking or locked out employees shall immediately return to work and the employer shall immediately resume
operations and readmit all workers under the same terms and conditions prevailing before the strike or lockout. x x
x
This provision is viewed as an exercise of the police power of the State. A prolonged strike or lockout can be
inimical to the national economy and, therefore, the situation is imbued with public necessity and involves the right
of the State and the public to self-protection.
Under Article 263(g), all workers must immediately return to work and all employers must readmit all of them
under the same terms and conditions prevailing before the strike or lockout. This Court must point out that the law
uses the precise phrase of ―under the same terms and conditions,‖ revealing that it contemplates only actual
reinstatement. This is in keeping with the rationale that any work stoppage or slowdown in that particular industry
can be inimical to the national economy. It is clear that Article 263(g) was not written to protect labor from the
excesses of management, nor was it written to ease management from expenses, which it normally incurs during a
work stoppage or slowdown. It was an error on the part of the Court of Appeals to view the assumption order of
the Secretary as a measure to protect the striking workers from any retaliatory action from the Hotel. This Court
reiterates that this law was written as a means to be used by the State to protect itself from an emergency or
crisis. It is not for labor, nor is it for management.
It is, therefore, evident from the foregoing that the Secretary‘s subsequent order for mere payroll reinstatement
constitutes grave abuse of discretion amounting to lack or excess of jurisdiction. Indeed, this Court has always
recognized the ―great breadth of discretion‖ by the Secretary once he assumes jurisdiction over a labor dispute.
However, payroll reinstatement in lieu of actual reinstatement is a departure from the rule in these cases and there
must be showing of special circumstances rendering actual reinstatement impracticable, as in the UST case
aforementioned, or otherwise not conducive to attaining the purpose of the law in providing for assumption of
jurisdiction by the Secretary of Labor and Employment in a labor dispute that affects the national interest. None
appears to have been established in this case. Even in the exercise of his discretion under Article 236(g), the
Secretary must always keep in mind the purpose of the law. Time and again, this Court has held that when an
official by-passes the law on the asserted ground of attaining a laudable objective, the same will not be maintained
if the intendment or purpose of the law would be defeated.
UNIVERSITY OF IMMACULATE CONCEPCION vs. SEC. OF LABOR

[G.R. No. 151379, January 14, 2005]
Facts:
During the negotiations for the CBA between petitioner school and its union, one item was left unresolved and this
was the inclusion or exclusion of the following positions in the scope of the bargaining unit:
a. Secretaries
b. Registrars
c. Accounting Personnel
d. Guidance Counselors
This matter was submitted for voluntary arbitration. The panel of voluntary arbitrators rendered a decision
excluding the above-mentioned secretaries, registrars, chief of the accounting department, cashiers and guidance
counselors from the coverage of the bargaining unit, while included the accounting clerks and the accounting staff
member in the bargaining unit. The union moved for the reconsideration of the above decision. Pending, however,
the resolution of its motion, it filed a notice of strike with the NCMB on the grounds of bargaining deadlock and
unfair labor practice. During the thirty (30) day cooling-off period, two union members were dismissed by
petitioner. Consequently, the union went on strike. Thereafter, the SOLE issued an order assuming jurisdiction over
the labor dispute, and all workers were directed to return to work within twenty-four (24) hours upon receipt of
this Order and for Management to accept them back under the same terms and conditions prevailing prior to the
strike. Parties were further directed to cease and desist from committing any or all acts that might exacerbate the
situation. Parties were also directed to submit their respective position papers.
Anent the motion for reconsideration filed by the union, the panel of voluntary arbitrators denied the same.
Petitioner school then furnished copies of the panel‘s denial of the motion for reconsideration and the Decision to
the individual respondents. Thereafter, the petitioner school gave the abovementioned individual respondents two
choices: to resign from the union and remain employed as confidential employees or resign from their confidential
positions and remain members of the union. The petitioner school relayed to these employees that they could not
remain as confidential employees and at the same time as members or officers of the Union. However, the
individual respondents remained steadfast in their claim that they could still retain their confidential positions while
being members or officers of the Union. Hence, the petitioner school sent notices of termination to the individual
respondents.
The union then filed another notice of strike, this time citing as a reason the petitioner school‘s termination of the
individual respondents. The union alleged that the school‘s act of terminating the individual respondents is in
violation of the Order of the SOLE. The SOLE issued another Order reiterating the directives contained in the
earlier Order. The SOLE also stated therein that the effects of the termination from employment of these individual
respondents be suspended pending the determination of the legality thereof. Hence, the school was directed to
reinstate the individual respondents under the same terms and conditions prevailing prior to the labor dispute.
The school, thereafter, moved to reconsider the aforesaid 2nd order of the SOLE. It argued that the SOLE‘s Order
directing the reinstatement of the individual respondents would render nugatory the decision of the panel of
voluntary arbitrators to exclude them from the collective bargaining unit. However, the school‘s motion was denied
by the SOLE, wherein the latter declared that the decision of the panel of voluntary arbitrators to exclude the
individual respondents from the collective bargaining unit did not authorize the school to terminate their
employment. With its 2nd MR denied, the school filed another which made the SOLE modify the two previous
orders. The 3rd order of the SOLE directed the school to place the 12 terminated employees under payroll
reinstatement until the validity of their termination is finally resolved.
On appeal, the CA dismissed the petition of the school for lack of merit and likewise denied its MR. Hence, this
petition.
The school contends that the Secretary cannot take cognizance of an issue involving employees who are not part of
the bargaining unit. It insists that since the individual respondents had already been excluded from the bargaining
unit by a final and executory order by the panel of voluntary arbitrators, then they cannot be covered by the
Secretary‘s assumption order.
Issues:
1. Whether or not the SOLE can take cognizance of an issue involving employees who are not part of the
bargaining unit.
2. Whether or not the order of the SOLE for payroll reinstatement is ―called for the circumstance‖ of this case.
Ruling:
1. The SC held that the contention of the school is incorrect. Although the SC it recognizes the exercise of
management prerogatives and it often declines to interfere with the legitimate business decisions of the employer,
this privilege is not absolute, but subject to exceptions. One of these exceptions is when the Secretary of Labor
assumes jurisdiction over labor disputes involving industries indispensable to the national interest under Article
263(g) of the Labor Code, which states:
operations and readmit all workers under the same terms and conditions prevailing before the strike or lockout. x x
x
When the Secretary of Labor ordered the school to suspend the effect of the termination of the individual
respondents, the Secretary did not exceed her jurisdiction, nor did the Secretary gravely abuse the same. It must
be pointed out that one of the substantive evils which Article 263(g) of the Labor Code seeks to curb is the
exacerbation of a labor dispute to the further detriment of the national interest.
The University‘s act of suspending and terminating union members and the Union‘s act of filing another Notice of
Strike after this Office has assumed jurisdiction are certainly in conflict with the status quo ante. By any standards,
these acts will not in any way help in the early resolution of the labor dispute. It is clear that the actions of both
parties merely served to complicate and aggravate the already strained labor-management relations.
Indeed, it is clear that the act of the school of dismissing the individual respondents from their employment
became the impetus for the union to declare a second notice of strike. It is not a question anymore of whether or
not the terminated employees, the individual respondents herein, are part of the bargaining unit. Any act
committed during the pendency of the dispute that tends to give rise to further contentious issues or increase the
tensions between the parties should be considered an act of exacerbation and should not be allowed.
2. The SC held that the order of the SOLE for payroll reinstatement is ―called for the circumstance‖ of this case.
Article 263(g) of the Labor Code states that all workers must immediately return to work and all employers must
readmit all of them under the same terms and conditions prevailing before the strike or lockout. The phrase ―under
the same terms and conditions‖ makes it clear that the norm is actual reinstatement. This is consistent with the
idea that any work stoppage or slowdown in that particular industry can be detrimental to the national interest. As
an exception to the rule, payroll reinstatement must rest on special circumstances that render actual reinstatement
impracticable or otherwise not conducive to attaining the purposes of the law.
The ―superseding circumstances‖ mentioned by the SOLE no doubt refer to the final decision of the panel of
arbitrators as to the confidential nature of the positions of the twelve private respondents, thereby rendering their
actual and physical reinstatement impracticable and more likely to exacerbate the situation. The payroll
reinstatement in lieu of actual reinstatement ordered in these cases, therefore, appears justified as an exception to
the rule until the validity of their termination is finally resolved. This Court sees no grave abuse of discretion on the
part of the SOLE in ordering the same.
CAPITOL MEDICAL CENTER vs. NLRC

[G.R. No. 147080, April 26, 2005]
Facts:
After the respondent union was able to get a Supreme Court decision dismissing its rival union‘s petition for
certification election was dismissed and ordering petitioner company to negotiate a CBA with respondent union as
the certified bargaining agent of the rank-and-file employees, said union requested for a meeting with the
petitioner company to discuss matters pertaining to a negotiation for a CBA, conformably with the decision of the
Court.
However, petitioner company rejected the proposed meeting, on the claim that it was a violation of Republic Act
No. 6713 and that the Union was not a legitimate one. Petitioner company also filed a Petition for the Cancellation
of the Union‘s Certificate of Registration with the DOLE on the ground that the union failed for several years to
submit financial statements as required by law, and the union was engaged in a strike which has been declared
illegal by the NLRC. Apparently unaware of the petition, the Union reiterated its proposal for CBA negotiations but
to no avail. Instead of filing a motion with the SOLE for the enforcement of the SC decision, the union filed a Notice
of Strike with the NCMB on the grounds of refusal to bargain, coercion on employees and interference/restraint to
self-organization.
After a series of fruitless conferences before the NCMB, petitioner company filed a letter with the NCMB requesting
that the Notice of Strike be dismissed because the union failed to furnish the agency with a copy of a notice of
meeting where the strike vote was conducted. Thereafter, the Union submitted to the NCMB the minutes of the
alleged strike vote purportedly held on November 10, 1997 at the parking lot in front of the petitioner‘s premises,
at the corner of Scout Magbanua Street and Panay Avenue, Quezon City. It appears that 178 out of the 300 union
members participated therein, and the results were as follows: 156 members voted to strike; 14 members cast
negative votes; and eight votes were spoiled.
On November 28, 1997, the officers and members of the Union staged a strike. Subsequently, on December 1,
1997, the Union filed an ex parte motion with the DOLE, praying for its assumption of jurisdiction over the dispute.
The Union likewise prayed for the imposition of appropriate legal sanctions, not limited to contempt and other
penalties, against the hospital director/president and other responsible corporate officers for their continuous
refusal, in bad faith, to bargain collectively with the Union, to adjudge the same hospital director/president and
other corporate officers guilty of unfair labor practices, and for other just, equitable and expeditious reliefs in the
premises. The SOLE then assumed jurisdiction over the labor dispute and directed all striking workers to return to
work within 24 hours and the management to resume normal operations and accept back all striking workers under
the same terms and conditions prevailing before the strike. Further, parties are directed to cease and desist from
committing any act that may exacerbate the situation; and for both parties to submit their respective proposals for
the CBA.
In obedience to the order of the SOLE, the officers and members of the Union stopped their strike and returned to
work. For its part, the petitioner filed a petition to declare the strike illegal with the NLRC where it appended
affidavits of a number of persons who where in at the corner of Scout Magbanua Street and Panay Avenue, Quezon
City on November 10, 1997, and attested that no secret balloting took place in the said premises. Another also
attested that his signature was forged while others declared that they were not union members yet their signatures
were included in the strike vote attendance. In their position paper, the respondents appended the joint affidavit
of the Union president and those members who alleged that they had cast their votes during the strike vote held
on November 10, 1997.
In the meantime, the Regional Director of the DOLE denied the petition of petitioner for the cancellation of the
respondent Union‘s certificate of registration. As to the petition of petitioner to declare the union‘s striker illegal,
the Labor Arbiter ruled in the affirmative and held that the strike staged by respondent union was illegal and
subsequently, the union officers lost their employment status with petitioner. The Labor Arbiter ruled that no voting
had taken place on November 10, 1997; moreover, no notice of such voting was furnished to the NCMB at least
twenty-four (24) hours prior to the intended holding of the strike vote.
On appeal, the NLRC reversed the ruling of the LA and petitioner‘s MR was likewise denied. Petitioner elevated its
cause to the CA which in turn dismissed the petition and affirmed the ruling of the NLRC. Hence, this petition.
The petitioner asserts that the NLRC and the CA erred in holding that the submission of a notice of a strike vote to
the Regional Branch of the NCMB as required by Section 7, Rule XXII of the Omnibus Rules Implementing the Labor
Code, is merely directory and not mandatory. The use of the word ―shall‖ in the rules, the petitioner avers,
indubitably indicates the mandatory nature of the respondent Union‘s duty to submit the said notice of strike vote.
Issue:
Whether or not the strike staged by the union was legal.
Ruling:
The SC held that the strike staged by the union was illegal.
The respondent Union failed to comply with the second paragraph of Section 10, Rule XXII of the Omnibus Rules of
the NLRC which reads:
Section 10.Strike or lockout vote. – A decision to declare a strike must be approved by a majority of the total union
membership in the bargaining unit concerned obtained by secret ballot in meetings or referenda called for the
purpose. A decision to declare a lockout must be approved by a majority of the Board of Directors of the employer,
corporation or association or the partners obtained by a secret ballot in a meeting called for the purpose.
The regional branch of the Board may, at its own initiative or upon the request of any affected party, supervise the
conduct of the secret balloting. In every case, the union or the employer shall furnish the regional branch of the
Board and notice of meetings referred to in the preceding paragraph at least twenty-four (24) hours before such
meetings as well as the results of the voting at least seven (7) days before the intended strike or lockout, subject
to the cooling-off period provided in this Rule.
Although the second paragraph of Section 10 of the said Rule is not provided in the Labor Code of the Philippines,
nevertheless, the same was incorporated in the Omnibus Rules Implementing the Labor Code and has the force
and effect of law.
Aside from the mandatory notices embedded in Article 263, paragraphs (c) and (f) of the Labor Code, a union
intending to stage a strike is mandated to notify the NCMB of the meeting for the conduct of strike vote, at least
twenty-four (24) hours prior to such meeting. Unless the NCMB is notified of the date, place and time of the
meeting of the union members for the conduct of a strike vote, the NCMB would be unable to supervise the holding
of the same, if and when it decides to exercise its power of supervision. In National Federation of Labor v. NLRC,
the Court enumerated the notices required by Article 263 of the Labor Code and the Implementing Rules, which
include the 24-hour prior notice to the NCMB:
1) A notice of strike, with the required contents, should be filed with the DOLE, specifically the Regional Branch
of the NCMB, copy furnished the employer of the union;
2) A cooling-off period must be observed between the filing of notice and the actual execution of the strike
thirty (30) days in case of bargaining deadlock and fifteen (15) days in case of unfair labor practice. However, in
the case of union busting where the union‘s existence is threatened, the cooling-off period need not be observed.
…
4) Before a strike is actually commenced, a strike vote should be taken by secret balloting, with a 24-hour prior
notice to NCMB. The decision to declare a strike requires the secret-ballot approval of majority of the total union
membership in the bargaining unit concerned.
5) The result of the strike vote should be reported to the NCMB at least seven (7) days before the intended
strike or lockout, subject to the cooling-off period.
A union is mandated to notify the NCMB of an impending dispute in a particular bargaining unit via a notice of
strike. Thereafter, the NCMB, through its conciliator-mediators, shall call the parties to a conference at the soonest
possible time in order to actively assist them in exploring all possibilities for amicable settlement. In the event of
the failure in the conciliation/mediation proceedings, the parties shall be encouraged to submit their dispute for
voluntary arbitration. However, if the parties refuse, the union may hold a strike vote, and if the requisite number
of votes is obtained, a strike may ensue. The purpose of the strike vote is to ensure that the decision to strike
broadly rests with the majority of the union members in general and not with a mere minority, and at the same
time, discourage wildcat strikes, union bossism and even corruption. A strike vote report submitted to the NCMB at
least seven days prior to the intended date of strike ensures that a strike vote was, indeed, taken. In the event
that the report is false, the seven-day period affords the members an opportunity to take the appropriate remedy
before it is too late. The 15 to 30 day cooling-off period is designed to afford the parties the opportunity to
amicably resolve the dispute with the assistance of the NCMB conciliator/mediator, while the seven-day strike ban is
intended to give the DOLE an opportunity to verify whether the projected strike really carries the imprimatur of the
majority of the union members.
The requirement of giving notice of the conduct of a strike vote to the NCMB at least 24 hours before the meeting
for the said purpose is designed to (a) inform the NCMB of the intent of the union to conduct a strike vote; (b) give
the NCMB ample time to decide on whether or not there is a need to supervise the conduct of the strike vote to
prevent any acts of violence and/or irregularities attendant thereto; and (c) should the NCMB decide on its own
initiative or upon the request of an interested party including the employer, to supervise the strike vote, to give it
ample time to prepare for the deployment of the requisite personnel, including peace officers if need be. Unless
and until the NCMB is notified at least 24 hours of the union‘s decision to conduct a strike vote, and the date,
place, and time thereof, the NCMB cannot determine for itself whether to supervise a strike vote meeting or not
and insure its peaceful and regular conduct. The failure of a union to comply with the requirement of the giving of
notice to the NCMB at least 24 hours prior to the holding of a strike vote meeting will render the subsequent strike
staged by the union illegal.
LIGHT RAILWAY TRANSIT vs. VENUS, JR.

[G.R. No. 163782, March 24, 2006]
Facts:
Petitioner LTRA, a government corporation, constructed a light rail transit system from Monumento in Kalookan
City to Baclaran in Parañaque, Metro Manila. LTRA then, contracted petitioner METRO to operate and manage the
Metro manila Light Rail Transit System. METRO then hired its own employees including herein private respondents.
Petitioner METRO thereafter entered into a 10-year CBA with Pinag-isang Lakas ng Manggagawa sa METRO, Inc. –
National Federation of Labor, otherwise known as PIGLAS-METRO, INC. – NFL – KMU (Union), the certified
exclusive collective bargaining representative of the rank-and-file employees of petitioner METRO.
However, in 1989, LTRA purchased the shares of stocks in petitioner METRO. LTRA and METRO continued with
their distinct and separate juridical personalities. Hence, when the CBA expired, they renewed the same, initially
on a yearly basis, and subsequently on a monthly basis.
In July 2000, the union filed a Notice of Strike with the NCMB against METRO on account of a deadlock in the CBA.
On the same day, the Union struck. The power supply switches in the different light rail transit substations were
turned off. The members of the Union picketed the various substations. They completely paralyzed the operations
of the entire light rail transit system. As the strike adversely affected the mobility of the commuting public, the
SOLE issued on that same day an assumption of jurisdiction order directing all the striking employees ―to return to
work immediately upon receipt of this Order and for the Company to accept them back under the same terms and
conditions of employment prevailing prior to the strike.‖ The SOLE‘s order of assumption of jurisdiction was
personally served on the Union through its members and officers, but the latter refused to receive the same. The
sheriffs thus posted the Order in the different stations/terminals of the light rail transit system. Further, the Order
of assumption of jurisdiction was published in newspapers. Despite the issuance, posting, and publication of the
assumption of jurisdiction and return to work order, the Union officers and members, including herein private
respondent workers, failed to return to work. Thus, private respondents were considered dismissed from
employment.
In the meantime, the Agreement for the Management and Operation of the Metro Manila Light Rail Transit System
between petitioners LRTA and METRO expired. The Board of Directors of petitioner LRTA decided not to renew the
contract with petitioner METRO and directed the LRTA management instead to immediately take over the
management and operation of the light rail transit system to avert the mass transportation crisis.
Private respondents then filed a complaint for illegal dismissal before NLRC and impleaded both petitioners LRTA
and METRO. The LA ruled in favor of the private respondents and held that they were illegally dismissed. On
appeal, the NLRC found that the striking workers failed to heed the return to work order and reversed and set
aside the decision of the labor arbiter. The suit against LRTA was dismissed since ―LRTA is a government-owned
and controlled corporation created by virtue of Executive Order No. 603 with an original charter‖10 and ―it had no
participation whatsoever with the termination of complainants‘ employment. The private respondents‘ MR was also
denied by the NLRC.
The CA, however, reversed the ruling of the NLRC and declared the workers‘ dismissal as illegal, pierced the veil of
separate corporate personality and held the LRTA and METRO as jointly liable for back wages. Hence, this petition.
Petitioner METRO maintains that private respondent workers were not illegally dismissed but should be deemed to
have abandoned their jobs after defying the assumption of jurisdiction and return-to-work order issued by the
Labor Secretary. Private respondent workers, on the other hand, submit that they could not immediately return to
work as the light rail transit system had ceased its operations.
Issue:
Whether or not private respondents were illegally dismissed.
Ruling:
The SC held that private respondents were not illegally dismissed.
In Batangas Laguna Tayabas Bus Co. v. NLRC, The SC said that the five-day period for the strikers to obey the
Order of the Secretary of Justice and return to work was not sufficient as ―some of them may have left Metro
Manila and did not have enough time to return during the period given by petitioner, which was only five days.‖ In
Batangas Laguna Tayabas Bus Co., it was further held –
The contention of the petitioner that the private respondents abandoned their position is also not acceptable. An
employee who forthwith takes steps to protest his lay-off cannot by any logic be said to have abandoned his work.
For abandonment to constitute a valid cause for termination of employment, there must be a deliberate, unjustified
refusal of the employee to resume his employment. This refusal must be clearly established. As we stressed in a
recent case, mere absence is not sufficient; it must be accompanied by overt acts unerringly pointing to the fact
that the employee simply does not want to work anymore.
In the instant case, private respondent workers could not have defied the return-to-work order of the SOLE simply
because they were dismissed immediately, even before they could obey the said order. The records show that the
assumption of jurisdiction and return-to-work order was issued by the SOLE on July 25, 2000. The said order was
served and posted by the sheriffs of the Department of Labor and Employment the following day, on July 26, 2000.
Further, the said order of assumption of jurisdiction was duly published on July 27, 2000, in the Philippine Daily
Inquirer and the Philippine Star. On the same day also, on July 27, 2000, private respondent workers were
dismissed. Neither could they be considered as having abandoned their work. If petitioner METRO did not dismiss
the strikers right away, and instead accepted them back to work, the management agreement between petitioners
LRTA and METRO could still have been extended and the workers would still have had work to return to. Thus
petitioner METRO is guilty of illegal dismissal.
SUKHOTAI CUISINE & RESTAURANT vs. COURT OF APPEALS

[G.R. No. 150437, July 17, 2006]
Facts:
Sometime in March 1998, the majority of the employees of the petitioner company organized themselves into a
union which affiliated with the Philippine Labor Alliance Council (PLAC), and was designated as PLAC Local 460
Sukhothai Restaurant Chapter (Union).
On December 3, 1998, private respondent union filed a Notice of Strike with the NCMB on the ground of unfair
labor practice, and particularly, acts of harassment, fault-finding, and union busting through coercion and
interference with union affairs. On December 10, 1998, in a conciliation conference, the representatives of the
petitioner agreed and guaranteed that there will be no termination of the services of private respondents during
the pendency of the case, with the reservation of the management prerogative to issue memos to erring
employees for the infraction, or violation of company policies. On the following day, or on December 11, 1998, a
Strike Vote was conducted and supervised by NCMB personnel, and the results of the vote were submitted to the
NCMB on December 21, 1998.
On January 21, 1999, the petitioner and the Union entered into a Submission Agreement, thereby agreeing to
submit the issue of unfair labor practice – the subject matter of the foregoing Notice of Strike and the Strike Vote –
for voluntary arbitration with a view to prevent the strike. On March 24, 1999, during the pendency of the
voluntary arbitration proceedings, the petitioner, through its president, Ernesto Garcia, dismissed Eugene Lucente,
a union member, due to an alleged petty quarrel with a co-employee in February 1999. In view of this termination,
private respondent Union filed with the NLRC a complaint for illegal dismissal. In the morning of June 24, 1999,
private respondent Jose Lanorias, a union member, was relieved from his post, and his employment as cook,
terminated. Subsequently, respondent Billy Bacus, the union vice-president, conferred with Ernesto Garcia and
protested Lanorias‘s dismissal. Shortly thereafter, respondents staged a ―wildcat strike.‖ On June 25, 1999, a
Notice of Strike was re-filed by the private respondents and the protest, according to the respondents, was
converted into a ―sit-down strike.‖ On the next day, or on June 26, 1999, the same was transformed into an
―actual strike.‖
On June 29, 1999, the petitioner filed a complaint for illegal strike with the NLRC against private respondents,
seeking to declare the strike illegal, and to declare respondents, who participated in the commission of illegal acts,
to have lost their employment status. Having arrived at no amicable settlement, the parties submitted their
position papers, together with supporting documents, affidavits of witnesses, and photographs, in compliance with
the orders of the Labor Arbiter.
On October 12, 1999, the Labor Arbiter rendered a Decision declaring the strike illegal, and the employment of
union officers and all individual respondents are deemed validly terminated in accordance with law. The LA held
that the Union failed to comply with the mandatory requisites for a lawful strike; that the issuance of memos by the
petitioner to instill discipline on erring employees is a lawful exercise of management prerogative and do not
amount to acts of unfair labor practice; that, instead of resorting to a strike, private respondents should have
availed of the proper legal remedies such as the filing of complaints for illegal suspension or illegal dismissal with
the NLRC; that, the root causes of the controversy are the petition for certification election and petition for
cancellation of union registration which were then pending before the Department of Labor as well as the issue on
unfair labor practice then pending before the voluntary arbitrator, and, hence, the parties should have awaited the
resolution of the cases in the proper fora; and that even if private respondents complied with all the requisites of a
valid strike, the strike is still illegal due to the commission of prohibited acts, including the obstruction of free
ingress and egress of the premises, intimidation, and threat inflicted upon non-striking employees.
On appeal by the union, the NLRC reversed the decision of the LA and dismissed the complaint of illegal strike. In
overruling the Labor Arbiter, the NLRC held that the petitioner is guilty of union busting; that the petitioner violated
the Submission Agreement dated December 10, 1998 in that no termination shall be effected during the voluntary
arbitration proceedings and, hence, the strike was justified; that the Notice of Strike and Strike Vote dated
December 3, 1998 and December 11, 1998, respectively, are applicable to the strike of June 24, 25, and 26, 1999
since the same issues of unfair labor practice were involved and that unfair labor practices are continuing offenses;
that even if the foregoing Notice of Strike and Strike Vote were not applicable, the Union may take action
immediately since the petitioner is guilty of union busting; and that the re-filing of a Notice of Strike on June 25,
1999 cured the defect of non-compliance with the mandatory requirements.
After its MR was denied by the NLRC, petitioner company appealed to the CA, which in turn, was denied. Hence,
this petition.
Respondents insist that the filing of the Notice of Strike on December 3, 1998, the Strike Vote of December 11,
1998, the submission of the results of the vote to the NCMB on December 21, 1998, and their observation of the
15-day cooling-off period in case of unfair labor practice as well as the seven-day reporting period of the results of
the strike vote, all satisfy the mandatory requirements under Article 263[9] of the Labor Code and are applicable to
the June 1999 strike. In support of this theory, respondents invoke Article 263(f) in that the decision to strike is
valid for the duration of the dispute based on substantially the same grounds considered when the strike vote was
taken, thus, there is no need to repeat the process. Furthermore, according to the respondents, even assuming for
the sake of argument that the Notice of Strike and Strike Vote in December 1998 cannot be made to apply to the
concerted actions in June 1999, these requirements may nonetheless be dispensed with since the petitioner is
guilty of union busting and, hence, the Union can take action immediately.
Issues:
1. Whether or not the strike staged by the private respondents is illegal.
2. Whether or not private respondents were deemed to have lost their employment status by participating in the
commission of illegal acts during the strike.
Ruling:
1. The SC held that the strike staged by the private respondents is illegal. The undisputed fact is that at the time
the strike was staged in June 1999, voluntary arbitration between the parties was ongoing by virtue of the January
21, 1999 Submission Agreement. The issue to be resolved under those proceedings pertained to the very same
issues stated in the Notice of Strike of December 3, 1998: the commission of unfair labor practices, such as acts of
harassment, fault-finding, and union busting through coercion and interference with union affairs.
Article 264 of the Labor Code provides that ―no strike or lockout shall be declared after assumption of jurisdiction
by the President or the Secretary or after certification or submission of the dispute to compulsory or voluntary
arbitration or during the pendency of cases involving the same grounds for the strike or lockout.‖
This Court has held that strikes staged in violation of agreements providing for arbitration are illegal, since these
agreements must be strictly adhered to and respected if their ends are to be achieved. The rationale of the
prohibition under Article 264 is that once jurisdiction over the labor dispute has been properly acquired by
competent authority, that jurisdiction should not be interfered with by the application of the coercive processes of a
strike. Indeed it is among the chief policies of the State to promote and emphasize the primacy of free collective
bargaining and negotiations, including voluntary arbitration, mediation, and conciliation, as modes of settling labor,
or industrial disputes. The principle behind labor unionism in private industry is that industrial peace cannot be
secured through compulsion by law. Relations between private employers and their employees rest on an
essentially voluntary basis, subject to the minimum requirements of wage laws and other labor and welfare
legislation.
The alleged dismissals of Lucente and respondent Lanorias, both union members, which allegedly triggered the
wildcat strike, are not sufficient grounds to justify the radical recourse on the part of the private respondents. The
questions that surround their dismissal, as private respondents so affirm, are connected to the alleged breach of
the ―guarantee‖ by the petitioner not to dismiss its employees during the pendency of the arbitration case, the very
questions which they also link to the other incidents of unfair labor practices allegedly committed by the
petitioner—these matters should have been raised and resolved in the voluntary arbitration proceedings that were
commenced precisely to address them. On the other hand, if private respondents believed that the disciplinary
measures had nothing to do with the issues under arbitration, then they should have availed of the appropriate
remedies under the Labor Code, such as the institution of cases of illegal dismissal or, by agreement of the parties,
the submission of the cases to the grievance machinery of the CBA, if one is available, so that they may be
subjected to separate voluntary arbitration proceedings, or simply seek to terminate the pending voluntary
arbitration case and complete the mandatory procedure for a lawful strike. Private respondents should have
availed themselves of any of these alternative remedies instead of resorting to a drastic and unlawful measure,
specifically, the holding a wildcat strike. And because of the fact that the Union was fully aware that the arbitration
proceedings were pending, good faith cannot be invoked as a defense.
For failing to exhaust all steps in the arbitration proceedings by virtue of the Submission Agreement, in view of the
proscription under Article 264 of the Labor Code, and the prevailing state policy as well as its underlying rationale,
this Court declares that the strike staged by the private respondents is illegal.
2. The SC held that private respondents were validly terminated. In the determination of the liabilities of the
individual respondents, the applicable provision is Article 264(a) of the Labor Code:
Art. 264. Prohibited Activities – (a) x x x

xxxx
x x x x Any union officer who knowingly participates in an illegal strike and any worker or union officer who
knowingly participates in the commission of illegal acts during a strike may be declared to have lost his
employment status: Provided, That mere participation of a worker in a lawful strike shall not constitute sufficient
ground for termination of his employment, even if a replacement had been hired by the employer during such
lawful strike.
The effects of such illegal strikes, outlined in Article 264, make a distinction between workers and union officers
who participate therein: an ordinary striking worker cannot be terminated for mere participation in an illegal strike.
There must be proof that he or she committed illegal acts during a strike. A union officer, on the other hand, may
be terminated from work when he knowingly participates in an illegal strike, and like other workers, when he
commits an illegal act during a strike. In all cases, the striker must be identified. But proof beyond reasonable
doubt is not required. Substantial evidence available under the attendant circumstances, which may justify the
imposition of the penalty of dismissal, may suffice. Liability for prohibited acts is to be determined on an individual
basis as was clearly provided by the evidence submitted by the company. Thus, the Labor Arbiter is correct in ruling
that the employment of all individual private respondents are deemed validly terminated.
PHILCOM EMPLOYEES UNION vs. PHIL. GLOBAL COMMUNICATION

[G.R. No. 144315, July 17, 2006]
Facts:
During the course of the negotiations for the renewal of its CBA, the union filed with the NCMB a Notice of Strike
due to perceived unfair labor practice committed by the company. In view of the filing of the Notice of Strike, the
company suspended negotiations on the CBA which moved the union to file another Notice of Strike, on the ground
of bargaining deadlock. At a conciliation conference held at the NCMB, the parties agreed to consolidate the two
(2) Notices of Strike filed by the union and to maintain the status quo during the pendency of the proceedings.
However, while the union and the company officers and representatives were meeting, the remaining union officers
and members staged a strike at the company premises, barricading the entrances and egresses thereof and setting
up a stationary picket at the main entrance of the building. The following day, the company immediately filed a
petition for the Secretary of Labor and Employment to assume jurisdiction over the labor dispute in accordance
with Article 263(g) of the Labor Code.
Thereafter, the SOLE issued an order assuming jurisdiction over the dispute, enjoining any strike or lockout,
whether threatened or actual, directing the parties to cease and desist from committing any act that may
exacerbate the situation, directing the striking workers to return to work within twenty-four (24) hours from receipt
of the Secretary‘s Order and for management to resume normal operations, as well as accept the workers back
under the same terms and conditions prior to the strike. The parties were likewise required to submit their
respective position papers and evidence within ten (10) days from receipt of said order. A second order was issued
reiterating the previous directive to all striking employees to return to work immediately.
The union filed a Motion for Reconsideration assailing, among others, the authority of the SOLE to assume
jurisdiction over the labor dispute. Said motion was denied.
As directed, the parties submitted their respective position papers. In its position paper, the union raised the issue
of the alleged unfair labor practice of the company, such as contractualization, disallowance of union leave, non-
implementation of employees‘ benefits, etc. The company, on the other hand, raised in its position paper the sole
issue of the illegality of the strike staged by the union.
Based on the position papers, the SOLE held that the union‘s allegation of unfair labor practices were not within the
legal connotation of Article 248 of the Labor Code, but were actually mere grievances which should have been
processed through the grievance machinery or voluntary arbitration outlined under the CBA. The SOLE further
ruled that the strike conducted by the union was illegal.
Upon appeal to the CA, the appellate court denied the union‘s petition and affirmed the ruling of the SOLE.
Issue:
Whether or not the SOLE can take cognizance of the issue of the legality of a strike notwithstanding the absence of
any proper petition to declare the strike illegal.
Ruling:
The SC held that the SOLE properly took cognizance of the issue on the legality of the strike. Since the very reason
of the Secretary‘s assumption of jurisdiction was PEU‘s declaration of the strike, any issue regarding the strike is
not merely incidental to, but is essentially involved in, the labor dispute itself.
Article 263(g) of the Labor Code provides:

When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in an industry
operations and readmit all workers under the same terms and conditions prevailing before the strike or lockout.
The Secretary of Labor and Employment or the Commission may seek the assistance of law enforcement agencies
to ensure the compliance with this provision as well as with such orders as he may issue to enforce the same.
x x x x.
The powers granted to the Secretary under Article 263(g) of the Labor Code have been characterized as an
exercise of the police power of the State, with the aim of promoting public good.[16] When the Secretary
exercises these powers, he is granted ―great breadth of discretion‖ in order to find a solution to a labor dispute.
The most obvious of these powers is the automatic enjoining of an impending strike or lockout or its lifting if one
has already taken place.
It is of no moment that PEU never acquiesced to the submission for resolution of the issue on the legality of the
strike. PEU cannot prevent resolution of the legality of the strike by merely refusing to submit the issue for
resolution. It is also immaterial that this issue, as PEU asserts, was not properly submitted for resolution of the
Secretary. The authority of the Secretary to assume jurisdiction over a labor dispute causing or likely to cause a
strike or lockout in an industry indispensable to national interest includes and extends to all questions and
controversies arising from such labor dispute. The power is plenary and discretionary in nature to enable him to
effectively and efficiently dispose of the dispute.
GSIS vs. KAPISANAN NG MGA MANGGAGAWA SA GSIS

[G.R. No. 170132, December 6, 2006]
Facts:
This case has its genesis when the manager of GSIS issued a memorandum directing a number of its employees
who are union embers to show cause why they should not be charged administratively for their participation in the
October 4 to October 7, 2004 mass action. The union‘s counsel sought reconsideration of said directive on the
ground, among others, that the subject employees resumed work in obedience to the return-to-work order thus
issued. The plea for reconsideration was, however, effectively denied by the filing, of administrative charges
against some 110 union members for grave misconduct and conduct prejudicial to the best interest of the service.
The union then filed with the CA a petition for prohibition against the GSIS on the ground that its members should
not be made to explain why they supported their union‘s cause since the Civil Service Resolution No. 021316,
otherwise known as the Guidelines for Prohibited Mass Action, Section 10 of which exhorts government agencies to
―harness all means within their capacity to accord due regard and attention to employees‘ grievances and facilitate
their speedy and amicable disposition through the use of grievance machinery or any other modes of settlement
sanctioned by law and existing civil service rules.‖ It argued that the organized demonstrating employees did
nothing more than air their grievances in the exercise of their ―broader rights of free expression‖ and are,
therefore, not amenable to administrative sanctions.
On the other hand, petitioners assert that the filing of the formal charges are but a natural consequence of the
service-disrupting rallies and demonstrations staged during office hours by the absenting GSIS employees, there
being appropriate issuances outlawing such kinds of mass action.
The CA ruled in favor of the union and held that the filing of administrative charges against the union members is
tantamount to grave abuse of discretion which may be the proper subject of the writ of prohibition.
Issue:
Whether or not the mass action staged by or participated in by said GSIS employees partook of a strike or
prohibited concerted mass action.
Ruling:
The SC held that the mass action staged by or participated in by said GSIS employees partook of a strike or
prohibited concerted mass action. It may be that the freedom of expression and assembly and the right to petition
the government for a redress of grievances stand on a level higher than economic and other liberties. Any
suggestion, however, about these rights as including the right on the part of government personnel to strike ought
to be, as it has been, trashed.
The Constitution itself qualifies its exercise with the provision ―in accordance with law.‖ This is a clear manifestation
that the state may, by law, regulate the use of this right, or even deny certain sectors such right. Executive Order
180 which provides guidelines for the exercise of the right of government workers to organize, for instance,
implicitly endorsed an earlier CSC circular which ―enjoins under pain of administrative sanctions, all government
officers and employees from staging strikes, demonstrations, mass leaves, walkouts and other forms of mass
action which will result in temporary stoppage or disruption of public service‖ by stating that the Civil Service law
and rules governing concerted activities and strikes in government service shall be observed.
The settled rule in this jurisdiction is that employees in the public service may not engage in strikes, mass leaves,
walkouts, and other forms of mass action that will lead in the temporary stoppage or disruption of public service.
The right of government employees to organize is limited to the formation of unions or associations only, without
including the right to strike, adding that public employees going on disruptive unauthorized absences to join
concerted mass actions may be held liable for conduct prejudicial to the best interest of the service.
With the view we take of the events that transpired on October 4-7, 2004, what respondent‘s members launched
or participated in during that time partook of a strike or, what contextually amounts to the same thing, a prohibited
concerted activity. The phrase ―prohibited concerted activity‖ refers to any collective activity undertaken by
government employees, by themselves or through their employees‘ organization, with the intent of effecting work
stoppage or service disruption in order to realize their demands or force concessions, economic or otherwise; it
includes mass leaves, walkouts, pickets and acts of similar nature. Indeed, for four straight days, participating
KMG members and other GSIS employees staged a walk out and waged or participated in a mass protest or
demonstration right at the very doorstep of the GSIS main office building. The record of attendance for the period
material shows that, on the first day of the protest, 851 employees, or forty eight per cent (48%) of the total
number of employees in the main office (1,756) took to the streets during office hours, from 6 a.m. to 2 p.m.,
leaving the other employees to fend for themselves in an office where a host of transactions take place every
business day. On the second day, 707 employees left their respective work stations, while 538 participated in the
mass action on the third day. A smaller number, i.e., 306 employees, but by no means an insignificant few, joined
the fourth day activity.
To say that there was no work disruption or that the delivery of services remained at the usual level of efficiency at
the GSIS main office during those four (4) days of massive walkouts and wholesale absences would be to
understate things. And to place the erring employees beyond the reach of administrative accountability would be to
trivialize the civil service rules, not to mention the compelling spirit of professionalism exacted of civil servants by
the Code of Conduct and Ethical Standards for Public Officials and Employees.
BIFLEX PHILS., INC., LABOR UNION vs. FILFLEX INDUSTRIAL & MFG., CORP.
[G.R. No. 155679, December 19, 2006]
Facts:
Petitioners Patricia Villanueva, Emilia Bandola, Raquel Cruz, Delia Relato, Regina Castillo, Lolita delos Angeles,
Marissa Villoria, Marita Antonio, Lolita Lindio, Eliza Caraulia, and Liza Sua were officers of Biflex (Phils.) Inc. Labor
Union. On the other hand, petitioners Myrna dela Torre, Avelina Añonuevo, Bernice Borcelo, Narlie Yagin, Evelyn
Santillan, Leony Serdoncilo, Trinidad Cuya, Andrea Lumibao, Gynie Arneo, Elizabeth Capellan, Josephine Detosil,
Zenaida Francisco, and Florencia Anago were officers of Filflex Industrial and Manufacturing Labor Union. The two
petitioner-unions, which are affiliated with National Federation of Labor Unions (NAFLU), are the respective
collective bargaining agents of the employees of corporations.
Respondents Biflex (Phils.) Inc. and Filflex Industrial and Manufacturing Corporation (respondents) are sister
companies engaged in the garment business. Situated in one big compound along with another sister company,
General Garments Corporation (GGC), they have a common entrance.
On October 24, 1990, the labor sector staged a welga ng bayan to protest the accelerating prices of oil. On even
date, petitioner-unions, led by their officers, herein petitioners, staged a work stoppage which lasted for several
days, prompting respondents to file on October 31, 1990 a petition to declare the work stoppage illegal for failure
to comply with procedural requirements. On November 13, 1990, respondents resumed their operations.
Petitioners, claiming that they were illegally locked out by respondents, assert that aside from the fact that the
welga ng bayan rendered it difficult to get a ride and the apprehension that violence would erupt between those
participating in the welga and the authorities, respondents‘ workers were prevented from reporting for work.
Petitioners further assert that respondents were ―slighted‖ by the workers‘ no-show, and as a punishment, the
workers as well as petitioners were barred from entering the company premises.
On their putting up of tents, tables and chairs in front of the main gate of respondents‘ premises, petitioners, who
claim that they filed a notice of strike on October 31, 1990, explain that those were for the convenience of union
members who reported every morning to check if the management would allow them to report for work.
Respondents, on the other hand, maintain that the work stoppage was illegal since the following requirements for
the staging of a valid strike were not complied with: (1) filing of notice of strike; (2) securing a strike vote, and (3)
submission of a report of the strike vote to the Department of Labor and Employment.
The Labor Arbiter decided in favor of the respondents and held that the strike was illegal. Consequently, their
following officers are declared to have lost their employment status. Respondents thereupon terminated the
employment of petitioners.
On appeal, the NLRC reversed the ruling of the Labor Arbiter, it holding that there was no strike to speak of as no
labor or industrial dispute existed between the parties. It accordingly ordered respondents to reinstate petitioners
to their former positions, without loss of seniority rights, and with full backwages from the date of their
termination. On respondents‘ petition for certiorari, the Court of Appeals reversed that of the NLRC and reinstated
that of the Labor Arbiter.
Issue:
Whether or not the strike staged by the union was illegal.
Ruling:
The SC held that the strike was illegal.
That petitioners staged a work stoppage on October 24, 1990 in conjunction with the welga ng bayan organized by
the labor sector to protest the accelerating prices of oil, it is not disputed. Stoppage of work due to welga ng bayan
is in the nature of a general strike, an extended sympathy strike. It affects numerous employers including those
who do not have a dispute with their employees regarding their terms and conditions of employment.
Employees who have no labor dispute with their employer but who, on a day they are scheduled to work, refuse to
work and instead join a welga ng bayan commit an illegal work stoppage.
Even if petitioners‘ joining the welga ng bayan were considered merely as an exercise of their freedom of
expression, freedom of assembly or freedom to petition the government for redress of grievances, the exercise of
such rights is not absolute. For the protection of other significant state interests such as the ―right of enterprises to
reasonable returns on investments, and to expansion and growth‖ enshrined in the 1987 Constitution must also be
considered, otherwise, oppression or self-destruction of capital in order to promote the interests of labor would be
sanctioned. And it would give imprimatur to workers‘ joining demonstrations/rallies even before affording the
employer an opportunity to make the necessary arrangements to counteract the implications of the work stoppage
on the business, and ignore the novel ―principle of shared responsibility between workers and employers‖ aimed at
fostering industrial peace.
There being no showing that petitioners notified respondents of their intention, or that they were allowed by
respondents, to join the welga ng bayan on October 24, 1990, their work stoppage is beyond legal protection.
Even assuming arguendo that in staging the strike, petitioners had complied with legal formalities, the strike would
just the same be illegal, for by blocking the free ingress to and egress from the company premises, they violated
Article 264(e) of the Labor Code which provides that ―no person engaged in picketing shall … obstruct the free
ingress to or egress from the employer‘s premises for lawful purposes, or obstruct public thoroughfares.‖ In fine,
the legality of a strike is determined not only by compliance with its legal formalities but also by the means by
which it is carried out.
Petitioners, being union officers, should thus bear the consequences of their acts of knowingly participating in an
illegal strike, conformably with the third paragraph of Article 264 (a) of the Labor Code which provides:
. . . Any union officer who knowingly participates in an illegal strike and any worker or union officer who knowingly
participates in the commission of illegal acts during a strike may be declared to have lost his employment status:
Provided, That mere participation of a worker in a lawful strike shall not constitute sufficient ground for termination
of his employment, even if a replacement had been hired by the employer during such lawful strike.
The SC, passing on the use of the word ―may‖ in the immediately quoted provision, held that ―the law . . . grants
the employer the option of declaring a union officer who participated in an illegal strike as having lost his
employment.‖ Reinstatement of a striker or retention of his employment, despite his participation in an illegal
strike, is a management prerogative which this Court may not supplant.
MANILA HOTEL EMPLOYEES ASSOCIATION vs. MANILA HOTEL CORP. citing GRAND BOULEVARD
HOTEL VS. DACANAY
[G.R. No. 154591, March 5, 2007,]
Facts:
On 11 November 1999, the MHEA filed a Notice of Strike with the NCMB Manila Hotel on the grounds of unfair
labor practices. Upon the petition of Manila Hotel, the SOLE certified the labor dispute to the NLRC for compulsory
arbitration pursuant to Article 263(g) of the Labor Code. Specifically, the Order enjoined any strike or lockout and
the parties were ordered to cease and desist from committing any acts that may exacerbate the situation. MHEA
filed a Motion for Reconsideration dated 29 November 1999 assailing the validity of said Order. During the
conferences at the NLRC, the parties were advised of the certification order, which prohibited them from taking any
action that would exacerbate the situation.
On 10 February 2000, the MHEA conducted a strike despite the clear terms of the Order issued by the SOLE, and
despite the repeated reminders thereof. Manila Hotel then filed a complaint with prayer for injunction and or TRO,
alleging that MHEA conducted an illegal strike, blocked all ingress and egress of the hotel premises, harassed and
intimidated company officers, non-striking employees, customers and suppliers. In addition, it sought a declaration
that the strike was illegal and that, consequently, the striking employees lost their employment.
The NLRC issued an Order directing the striking workers to return to work immediately and the hotel to accept
them back under the same terms and conditions of employment. The NLRC further instructed the parties to submit
proof of compliance with the instant order immediately after the lapse of twenty-four hours. The NLRC received a
copy of the Compliance filed by Manila Hotel on 14 February 2000, manifesting that only six striking employees
complied with the return-to-work Order and were reinstated. The other striking employees had openly defied the
said Order.
In response to the NLRC‘s return-to-work order, the union filed a motion alleging that the NLRC had not acquired
jurisdiction over the labor dispute pending the resolution of the MR filed questioning the order of the SOLE. The
union claimed that said motion had prevented the said Order of the SOLE from becoming final and executory.
The NLRC ruled that the strike held by the union was illegal for its defiance of the return-to-work order. .
However, it determined that only the union officers were deemed to have lost their employment. It ruled that
there was no evidence showing who among the striking employees were actually notified of the return-to-work
order, and therefore, such employees have not forfeited their employment. But in view of the antagonism on both
sides, the NLRC awarded a severance pay equivalent to one-month salary to the returning union members for
every year of service, instead of ordering Manila Hotel to reinstate them.
Issue:
Whether or not the strike held by petitioner was illegal.
Ruling:
The SC held that it was illegal.
MHEA members seek their reinstatement after participating in an illegal strike, that is, a strike that was conducted
after receiving an Order of assumptionby the SOLE certifying the dispute to the NLRC for compulsory arbitration.
Worse still, the strikers failed to comply with the 11 February 2000 return-to-work Order, issued by the NLRC,
despite receipt thereof. The law explicitly prohibits such acts.
ART. 263. STRIKES, PICKETING, AND LOCKOUTS

xxxx
(g) When, in his opinion there exists a labor dispute causing or likely to cause a strike or lockout in an industry
in the assumption or certification order. If one has already taken place at the time of the assumption or
certification, all striking or locked out employees shall immediately return to work and the employer shall
immediately resume operations and readmit all workers under the same terms and conditions prevailing before the
strike or lockout. The Secretary of Labor and Employment or the Commission may seek the assistance of law
enforcement agencies to ensure compliance with this provision as well as with such orders as he may issue to
enforce the same.
ART. 264. PROHIBITED ACTIVITIES

(a) x x x x
No strike or lockout shall be declared after assumption of jurisdiction by the President or the Minister or
after certification or submission of the dispute to compulsory or voluntary arbitration or during the pendency of
cases involving the same grounds for the strike or lockout.
More to the point, the Court has consistently ruled in a long line of cases spanning several decades that once the
SOLE assumes jurisdiction over a labor dispute, such jurisdiction should not be interfered with by the application of
the coercive processes of a strike or lockout. Defiance of the assumption order or a return-to work order by a
striking employee, whether a union officer or a member, is an illegal act and, therefore, a valid ground for loss of
employment status.
The assumption of jurisdiction by the SOLE over labor disputes causing or likely to cause a strike or lockout in an
industry indispensable to the national interest is in the nature of a police power measure.
The allegation[ that the strikers relied on their honest belief that the filing of a Motion for Reconsideration of the
Order, issued by the SOLE on 24 November 1999, entitled them to participate in a strike, cannot be sustained. A
return-to-work order is immediately executory notwithstanding the filing of a motion for reconsideration. It must
be strictly complied with even during the pendency of any petition questioning its validity.
The very nature of a return-to-work order issued in a certified case lends itself to no other construction. The
certification attests to the urgency of the matter, affecting as it does an industry indispensable to the national
interest. The order is issued in the exercise of the court‘s compulsory power of arbitration, and therefore must be
obeyed until set aside. To say that its [return-to-work order] effectivity must await affirmance on a motion for
reconsideration is not only to emasculate it but indeed to defeat its import, for by then the deadline fixed for the
return to work would, in the ordinary course, have already passed and hence can no longer be affirmed insofar as
the time element it concerned.
Returning to work in this situation is not a matter of option or voluntariness but of obligation. The worker must
return to his job together with his co-workers so the operations of the company can be resumed and it can
continue serving the public and promoting its interest. This extraordinary authority given to the Secretary of Labor
is aimed at arriving at a peaceful and speedy solution to labor disputes, without jeopardizing national interests.
Regardless therefore of their motives, or the validity of their claims, the striking workers must cease and/or desist
from any and all acts that tend to, or undermine this authority of the Secretary of Labor, once an assumption
and/or certification order is issued. They cannot, for instance, ignore return-to-work orders, citing unfair labor
practices on the part of the company, to justify their action.
SAN MIGUEL FOODS INC. vs. SAN MIGUEL CORP EMPLOYEES UNION-PTGWO
[G.R. No. 168569, October 5, 2007]
Facts:
On November 9, 1992, some employees of San Miguel Foods, Inc‘s Finance Department, through the Union
represented by Edgar Moraleda, brought a grievance against Finance Manager Gideon Montesa (Montesa), for
"discrimination, favoritism, unfair labor practices, promoting divisiveness, etc, before SMFI Plant Operations
Manager George Nava in accordance with Step 1 of the grievance machinery. The Union sought the "1. review,
evaluat[ion] & upgrad[ing of] all Finance staff and 2. promot[ion of] G.Q. Montesa to other SMC affiliate[s] &
subsidiaries."
SMFI informed the Union that it planned to address the grievance through a "work management review" to be
completed by March 1993. However, it was not completed by March 1993, prompting the Union to, elevate the
grievance to Step 2.
Almost 9 months after the grievance meeting was held or on October 6, 1993, SMFI rendered a "Decision on Step
1 Grievance" stating that it was still in the process of completing the "work management review," hence, the
Union‘s requests could not be granted.
The Union filed a complaint on October 20, 1993 before the NLRC, Arbitration Branch, against SMFI, its President
Amadeo P. Veloso, and its Finance Manager Montesa for "unfair labor practice, [and] unjust discrimination in
matters of promotion . . . " It prayed that SMFI et al. be ordered to promote the therein named employees "with
the corresponding pay increases, etc.‖
SMFI et al. filed a motion to dismiss, 8contending that the issues raised in the complaint were grievance issues and,
therefore, "should be resolved in the grievance machinery. The Labor Arbiter granted SMFI et al.‘s motion to
dismiss and ordered the remand of the case to the grievance machinery for completion of the proceedings.
On appeal, to the NLRC by "Motion for Reconsideration/Appeal", such was granted and accordingly ordered the
Labor Arbiter to continue the proceedings on the Union‘s complaint. Hence, SMFI filed a petition for certiorari with
SC which they referred the case to the CA pursuant to St. Martin Funeral Homes v. NLRC.
Court of Appeals denied SMFI et al.‘s petition for certiorari, it holding that the Labor Arbiter has jurisdiction over
the complaint of the Union, they having violated the seniority rule under the CBA by appointing and promoting
certain employees which amounted to a ULP.
Issues:
Whether or not the labor arbiter has jurisdiction over the case.
Whether or not SMFI is guilty of unfair labor practice.
Ruling:
Section 1 of Rule 8 of the Rules of Court should thus not be strictly applied to a case filed before a
Labor Arbiter. In determining jurisdiction over a case, allegations made in the complaint, as well as
those in the position paper, may thus be considered.
SMFI argues that the allegations in the Union‘s complaint filed before the Labor Arbiter do not establish a cause of
action for ULP, the Union having merely contended that SMFI was guilty thereof without specifying the ultimate
facts upon which it was based. It cites Section 1 of Rule 8 of the Rules of Court as applying suppletorily to the
proceedings before the Labor Arbiter. Thus, SMFI concludes that the Labor Arbiter has no jurisdiction over its
complaint.
The jurisdiction of Labor Arbiters, enumerated in Article 217 of the Labor Code, includes complaints for ULP.
Indeed, the particular acts of ULP alleged to have been committed by SMFI were not specified; neither were the
ultimate facts in support thereof. In its Position Paper, however, the Union detailed the particular acts of ULP
attributed to SMFI and the ultimate facts in support thereof.
Section 7, Rule V of the New Rules of Procedure of the NLRC provides: The proceedings before the Labor
Arbiter shall be non-litigious in nature. The technicalities of law and procedure and the rules
obtaining in the courts of law shall not strictly apply thereto. The Labor Arbiter may avail himself of all
reasonable means to ascertain the facts of the controversy speedily, including ocular inspection and examination of
well-informed persons.
SMFI guilty of ULP but only on the ground of violation of the CBA Agreement.
ULP on the ground of discrimination which must allege that that they were done to encourage or discourage
membership in a labor organization.
Based on Art. 248. Unfair labor practices of employers. – It shall be unlawful for an employer to commit any of the
following unfair labor practices: (e) To discriminate in regard to wages, hours of work, and other terms
and conditions of employment in order to encourage or discourage membership in any labor
organization.
membership in a labor organization. In fact, those promoted were members of the complaining Union. The
promotions do not thus amount to ULP under Article 248(e) of the Labor Code.
ULP on the ground of violation of Collective Bargaining Agreement –
(1) gross violation of the CBA; AND
(2) the violation pertains to the economic provisions of the CBA.
As for the alleged ULP committed under Article 248(i), for violation of a CBA, this Article is qualified by Article 261
of the Labor Code, the pertinent portion of which latter Article reads:
xxx
violations of a Collective Bargaining Agreement, except those which are gross in character, shall no
longer be treated as unfair labor practice and shall be resolved as grievances under the Collective Bargaining
Agreement. For purposes of this article, gross violations of Collective Bargaining Agreement shall
mean flagrant and/or malicious refusal to comply with the economic provisions of such agreement.
In Silva v. NLRC, for a ULP case to be cognizable by the Labor Arbiter, and the NLRC to exercise its appellate
jurisdiction, the allegations in the complaint should show prima facie the concurrence of two things, namely: (1)
gross violation of the CBA; AND (2) the violation pertains to the economic provisions of the CBA.
First, Thegrievance machinery provision in the CBA is not an economic provision, however, hence, the second
requirement for a Labor Arbiter to exercise jurisdiction of a ULP is not present.
Second, the Union alleges that violated the Job Security provision in the CBA, specifically the seniority rule, in that
SMFI "appointed less senior employees to positions at its Finance Department, consequently intentionally by-
passing more senior employees who are deserving of said appointment."
Since the seniority rule in the promotion of employees has a bearing on salary and benefits, it may, following a
liberal construction (following the rule on construction in favor of labor) of Article 261 of the Labor Code, be
considered an "economic provision" of the CBA.
the Union charges SMFI to have promoted less senior employees, thus bypassing others who were more senior and
equally or more qualified. It may not be seriously disputed that this charge is a gross or flagrant violation of the
seniority rule under the CBA, a ULP over which the Labor Arbiter has jurisdiction.
The Court of Appeals having affirmed the NLRC decision finding that the Labor Arbiter has jurisdiction over the
Union‘s complaint and thus remanding it to the Labor Arbiter for continuation of proceedings thereon, the appellate
court‘s said finding may be taken to have been made only for the purpose of determining jurisdiction.
PHIL. AIRLINES INC. vs. PHIL AIRLINES EMPLOYEES ASSOCIATION

[G.R. No. 142399, March 12, 2008]
Facts:
On 6 February 1987, petitioner PAL and respondent PALEA entered into a CBA covering the period of 1986-1989.
Part of said agreement required petitioner PAL to pay its rank and file employees the following bonuses:
Section 4. 13th Month Pay (Mid-year Bonus) A 13th month pay, equivalent to one month‘s current basic pay,
consistent with the existing practice shall be paid in advance in May.
Section 5. Christmas Bonus The equivalent of one month‘s current basic pay as of November 30, shall be paid in
December as a Christmas bonus. Payment may be staggered in two (2) stages. It is distinctly understood that
nothing herein contained shall be construed to mean that the Company may not at its sole discretion give an
additional amount or increase the Christmas bonus.
On 22 April 1988, prior to the payment of the 13th month pay (mid-year bonus), petitioner PAL released a
guideline implementing the aforequoted provision, to wit:
1)Eligibility
a) Ground employees in the general payroll who are regular as of April 30, 1988;
b)Other ground employees in the general payroll, not falling within category a) above shall receive their 13th
Month Pay on or before December 24, 1988;
2) Amount
a)For category a) above, one month basic salary as of April 30, 1988;
b)Employees covered under 1 b) above shall be paid not less than 1/12 of their basic salary for every month of
service within the calendar year.
3)Payment Date: May 9, 1988 for category 1 a) above.

Respondent PALEA assailed the implementation of the foregoing guideline on the ground that all employees of PAL,
regular or non-regular, must be paid their 13th month pay. In response thereto, petitioner PAL informed
respondent PALEA that rank and file employees who were regularized after 30 April 1988 were not entitled to the
13th month pay as they were already given their Christmas bonuses on 9 December 1988 per the Implementing
Rules of Presidential Decree No. 851.
Disagreeing with petitioner PAL, respondent PALEA filed a labor complaint [16] for unfair labor practice against
petitioner PAL before the NLRC on 1 March 1989. The complaint interposed that â€œthe cut-off period for
regularization should not be used as the parameter for granting [the] 13th month pay considering that the law does
not distinguish the status of employment but (sic) the law covers all employees. petitioner PAL countered that
those rank and file employees who were not regularized by 30 April of a particular year are, in principle, not denied
their 13th month pay considering they receive said mandatory bonus in the form of the Christmas Bonus; that the
Christmas Bonus given to all its employees is deemed a compliance with Presidential Decree No. 851 and the
latterâ€™s implementing rules. It argues that 1) the CBA does not apply to non-regular employees such that any
benefits arising from said agreement cannot be made to apply to them, including the mid- year bonus; and 2) it
has always been the company practice not to extend the mid-year bonus to those employees who have not
attained regular status prior to the month of May, when payment of the particular bonus accrues.
Issue:
Whether or not employees regularized after 30 April 1988 are entitled to 13th month pay or mid-year bonus
Ruling:
Be that as it may, a cursory reading of the 1986-1989 CBA of the parties herein will instantly reveal that Art. I, Sec.
3 of said agreement made its provision applicable to all employees in the bargaining unit.
Section 3.Application. All the terms and conditions of employment of employees within the bargaining unit are
embodied in this Agreement, xxx
without distinguishing between regular and non-regular employees. As succinctly put by respondent PALEA in its
Memorandum:
All employees in (sic) PAL are entitled to the same benefit as they are within the same collective bargaining unit
and the entitlement to such benefit spills over to even non-union members.
It is a well-settled doctrine that the benefits of a CBA extend to the laborers and employees in the collective
bargaining unit, including those who do not belong to the chosen bargaining labor organization. [32] Otherwise, it
would be a clear case of discrimination.
Hence, to be entitled to the benefits under the CBA, the employees must be members of the bargaining unit, but
not necessarily of the labor organization designated as the bargaining agent. A ―bargaining unit‖ has been defined
as a group of employees of a given employer, comprised of all or less than all of the entire body of employees,
which the collective interest of all the employees, consistent with equity to the employer, indicates to be the best
suited to serve the reciprocal rights and duties of the parties under the collective bargaining provisions of the
law.[33] At this point, the allegation of petitioner PAL that the non-regular employees do not belong to the collective
bargaining unit and are thus not covered by the CBA is unjustified and unsubstantiated. It is apparent to us that
petitioner PAL excludes certain employees from the benefits of the CBA only because they have not yet achieved
regular status by the cut-off date, 30 April 1988. There is no showing that the non-regular status of the concerned
employees by said cut-off date sufficiently distinguishes their interests from those of the regular employees so as
to exclude them from the collective bargaining unit and the benefits of the CBA.
Having ruled that the benefits provided by the subject CBA are applicable even to non-regular employees who
belong to the bargaining unit concerned, the next and crucial query to be addressed is whether the 13 th month pay
or mid- year bonus can be equated to the Christmas bonus. Xxx
It must be stressed that in the 1986-1989 CBA, petitioner PAL agreed to pay its employees 1) the 13 th month pay
or the mid-year bonus, and 2) the Christmas bonus. The 13th month pay, guaranteed by Presidential Decree No.
851, is explicitly covered or provided for as the mid-year bonus in the CBA, while the Christmas bonus is evidently
and distinctly a separate benefit. Petitioner PAL may not be allowed to brush off said distinction, and unilaterally
and arbitrarily declare that for non-regular employees, their Christmas bonus is the same as or equivalent to the
13th month pay. Xxx
The non-regular rank and file employees of petitioner PAL as of 30 April 1988, are not actually seeking more
benefits than what the other member-employees of the same bargaining unit are already enjoying. They are only
requesting that all members of the bargaining unit be treated equally and afforded the same privileges and benefits
as agreed upon between respondent PALEA and petitioner PAL in the CBA. Petitioner PAL is committing a patent
act of inequity that is grossly prejudicial to the non-regular rank and file employees there being no rational basis
for withholding from the latter the benefit of a Christmas bonus besides the 13 th month pay or mid-year bonus,
while the same is being granted to the other rank and file employees of petitioner PAL who have been regularized
as of 30 April 1988, although both types of employees are members of the same bargaining unit. As it had willfully
and intentionally agreed to under the terms of the CBA, petitioner PAL must pay its regular and non-regular
employees who are members of the bargaining unit represented by respondent PALEA their 13th month pay or mid-
year bonus separately from and in addition to their Christmas bonus.
A collective bargaining agreement refers to a negotiated contract between a legitimate labor organization and the
employer concerning wages, hours of work and all other terms and conditions of employment in a bargaining
unit.[40] As in all other contracts, the parties to a CBA may establish such stipulations, clauses, terms and conditions
as they may deem convenient, provided these are not contrary to law, morals, good customs, public order or public
policy.[41] Thus, where the CBA is clear and unambiguous, it becomes the law between the parties, and compliance
therewith is mandated by the express policy of the law.
STANDARD CHARTERED BANK EMPLOYEES UNION VS. STANDARD CHARTERED BANK

[G.R. No. 161933, April 22, 2008]
Facts:
Petitioner and the Standard Chartered Bank (Bank) began negotiating for a new Collective Bargaining Agreement
(CBA) in May 2000 as their 1998-2000 CBA already expired. Due to a deadlock in the negotiations, petitioner filed
a Notice of Strike prompting the Secretary of Labor and Employment to assume jurisdiction over the labor dispute.
On May 31, 2001, Secretary Patricia A. Sto. Tomas of the Department of Labor and Employment (DOLE) issued an
Order for the parties to execute their CBA.
Issue:
Whether the Bank's Chief Cashiers and Assistant Cashiers, personnel of the Telex Department and HR staff are
confidential employees, such that they shall be excluded in the bargaining unit
Ruling:
The CBA provisions in dispute are the exclusion of certain employees from the appropriate bargaining unit and the
adjustment of remuneration for employees serving in an acting capacity for one month.
In their proposal, petitioner sought the exclusion of only the following employees from the appropriate bargaining
unit – all managers who are vested with the right to hire and fire employees, confidential employees, those with
access to labor relations materials, Chief Cashiers, Assistant Cashiers, personnel of the Telex Department and one
Human Resources (HR) staff.
The Secretary's disposition of the issues raised by petitioner were affirmed by the CA. The Court sustains the CA.
Whether or not the employees sought to be excluded from the appropriate bargaining unit are confidential
employees is a question of fact, which is not a proper issue in a petition for review under Rule 45 of the Rules of
Court. This holds more true in the present case in which petitioner failed to controvert with evidence the findings of
the Secretary and the CA.
The disqualification of managerial and confidential employees from joining a bargaining unit for rank and file
employees is already well-entrenched in jurisprudence. While Article 245 of the Labor Code limits the ineligibility to
join, form and assist any labor organization to managerial employees, jurisprudence has extended this prohibition
to confidential employees or those who by reason of their positions or nature of work are required to assist or act
in a fiduciary manner to managerial employees and hence, are likewise privy to sensitive and highly confidential
records.
In this case, the question that needs to be answered is whether the Bank's Chief Cashiers and Assistant Cashiers,
personnel of the Telex Department and HR staff are confidential employees, such that they should be excluded.
As regards the qualification of bank cashiers as confidential employees, National Association of Trade Unions
(NATU) – Republic Planters Bank Supervisors Chapter v. Torres declared that they are confidential employees
having control, custody and/or access to confidential matters, e.g., the branch's cash position, statements of
financial condition, vault combination, cash codes for telegraphic transfers, demand drafts and other negotiable
instruments, pursuant to Sec. 1166.4 of the Central Bank Manual regarding joint custody, and therefore,
disqualified from joining or assisting a union; or joining, assisting or forming any other labor organization.
Golden Farms, Inc. v. Ferrer-Calleja meanwhile stated that ―confidential employees such as accounting personnel,
radio and telegraph operators who, having access to confidential information, may become the source of undue
advantage. Said employee(s) may act as spy or spies of either party to a collective bargaining agreement.‖
Finally, in Philips Industrial Development, Inc. v. National Labor Relations Commission, the Court designated
personnel staff, in which human resources staff may be qualified, as confidential employees because by the very
nature of their functions, they assist and act in a confidential capacity to, or have access to confidential matters of,
persons who exercise managerial functions in the field of labor relations.
Petitioner insists that the foregoing employees are not confidential employees; however, it failed to buttress its
claim. Aside from its generalized arguments and despite the Secretary's finding that there was no evidence to
support it, petitioner still failed to substantiate its claim. Petitioner did not even bother to state the nature of the
duties and functions of these employees, depriving the Court of any basis on which it may be concluded that they
are indeed confidential employees. As aptly stated by the CA:
While We agree that petitioner's proposed revision is in accordance with the law, this does not necessarily mean
that the list of exclusions enumerated in the 1998-2000 CBA is contrary to law. As found by public respondent,
petitioner failed to show that the employees sought to be removed from the list of exclusions are
actually rank and file employees who are not managerial or confidential in status and should,
accordingly, be included in the appropriate bargaining unit.
Absent any proof that Chief Cashiers and Assistant Cashiers, personnel of the Telex department and
one (1) HR Staff have mutuality of interest with the other rank and file employees, then they are
rightfully excluded from the appropriate bargaining unit. x x x
Petitioner cannot simply rely on jurisprudence without explaining how and why it should apply to this case.
Allegations must be supported by evidence. In this case, there is barely any at all.
SAMAHAN NG MGA MANGGAGAWA SA SAMMA-LAKAS SA INDUSTRIYA NG KAPATIRANG HALIGI ING

ALYANSA (SAMMA-LIKHA) vs. SAMMA CORP.
[G.R. No. 167141, Mar. 13, 2009]
Facts:
Petitioner Samahan ng mga Manggagawa sa Samma– Lakas sa Industriya ng Kapatirang Haligi ng Alyansa
(SAMMA-LIKHA) filed a petition for certification election on July 24, 2001 in the Department of Labor and
Employment (DOLE), Regional Office IV. It claimed that: (1) it was a local chapter of the LIKHA Federation, a
legitimate labor organization registered with the DOLE; (2) it sought to represent all the rank-and-file employees of
respondent Samma Corporation; (3) there was no other legitimate labor organization representing these rank-and-
file employees; (4) respondent was not a party to any collective bargaining agreement and (5) no certification or
consent election had been conducted within the employer unit for the last 12 months prior to the filing of the
petition.
Respondent moved for the dismissal of the petition arguing that (1) LIKHA Federation failed to establish its legal
personality; (2) petitioner failed to prove its existence as a local chapter; (3) it failed to attach the certificate of
non-forum shopping and (4) it had a prohibited mixture of supervisory and rank-and-file employees.
In an order dated November 12, 2002, med-arbiter Arturo V. Cosuco ordered the dismissal of the petition on the
following grounds: (1) lack of legal personality for failure to attach the certificate of registration purporting to show
its legal personality; (2) prohibited mixture of rank-and-file and supervisory employees and (3) failure to submit a
certificate of non-forum shopping.
Issues:
1. Whether a certificate for non-forum shopping is required in a petition for certification election;
2. Whether petitioner had the legal personality to file the petition for certification election.
Ruling:
No requirement of certificate of non-forum shopping.
The requirement for a certificate of non-forum shopping refers to complaints, counter-claims, cross-claims,
petitions or applications where contending parties litigate their respective positions regarding the claim for relief of
the complainant, claimant, petitioner or applicant. A certification proceeding, even though initiated by a "petition,"
is not a litigation but an investigation of a non-adversarial and fact-finding character.
… [The] rationale for the requirement of a certification against forum shopping is to apprise the Court of the
pendency of another action or claim involving the same issues in another court, tribunal or quasi-judicial agency,
and thereby precisely avoid the forum shopping situation. Filing multiple petitions or complaints constitutes abuse
of court processes, which tends to degrade the administration of justice, wreaks havoc upon orderly judicial
procedure, and adds to the congestion of the heavily burdened dockets of the courts. Furthermore, the rule
proscribing forum shopping seeks to promote candor and transparency among lawyers and their clients in the
pursuit of their cases before the courts to promote the orderly administration of justice, prevent undue
inconvenience upon the other party, and save the precious time of the courts. It also aims to prevent the
embarrassing situation of two or more courts or agencies rendering conflicting resolutions or decisions upon the
same issue.
The same situation holds true for a petition for certification election. Under the omnibus rules implementing the
Labor Code as amended by D.O. No. 9, it is supposed to be filed in the Regional Office which has jurisdiction over
the principal office of the employer or where the bargaining unit is principally situated. The rules further provide
that where two or more petitions involving the same bargaining unit are filed in one Regional Office, the same shall
be automatically consolidated. Hence, the filing of multiple suits and the possibility of conflicting decisions will
rarely happen in this proceeding and, if it does, will be easy to discover.
Notably, under the Labor Code and the rules pertaining to the form of the petition for certification election, there is
no requirement for a certificate of non-forum shopping either in D.O. No. 9, series of 1997 or in D.O. No. 40-03,
series of 2003 which replaced the former.
Considering the nature of a petition for certification election and the rules governing it, we therefore hold that the
requirement for a certificate of non-forum shopping is inapplicable to such a petition.
Legal Personality of Petitioner
Petitioner argues that the erroneous inclusion of one supervisory employee in the union of rank-and-file employees
was not a ground to impugn its legitimacy as a legitimate labor organization which had the right to file a petition
for certification election.
LIKHA was granted legal personality as a federation under certificate of registration no. 92-1015-032-11638-FED-
LC. Subsequently, petitioner as its local chapter was issued its charter certificate no. 2-01.With certificates of
registration issued in their favor, they are clothed with legal personality as legitimate labor organizations:
Section 5.Effect of registration. – The labor organization or workers‘ association shall be deemed registered and
vested with legal personality on the date of issuance of its certificate of registration. Such legal personality cannot
thereafter be subject to collateral attack, but may be questioned only in an independent petition for cancellation in
accordance with these Rules.
Section 3.Acquisition of legal personality by local chapter. - A local/chapter constituted in accordance with Section 1
of this Rule shall acquire legal personality from the date of filing of the complete documents enumerated therein.
Upon compliance with all the documentary requirements, the Regional Office or Bureau of Labor Relations shall
issue in favor of the local/chapter a certificate indicating that it is included in the roster of legitimate labor
organizations.
Such legal personality cannot thereafter be subject to collateral attack, but may be questioned only in an
independent petition for cancellation of certificate of registration. Unless petitioner‘s union registration is cancelled
in independent proceedings, it shall continue to have all the rights of a legitimate labor organization, including the
right to petition for certification election.
Furthermore, the grounds for dismissal of a petition for certification election based on the lack of legal personality
of a labor organization are the following: (a) petitioner is not listed by the Regional Office or the Bureau of Labor
Relations in its registry of legitimate labor organizations or (b) its legal personality has been revoked or cancelled
with finality in accordance with the rules.
As mentioned, respondent filed a petition for cancellation of the registration of petitioner on December 14, 2002. In
a resolution dated April 14, 2003, petitioner‘s charter certificate was revoked by the DOLE. But on May 6, 2003,
petitioner moved for the reconsideration of this resolution. Neither of the parties alleged that this resolution
revoking petitioner‘s charter certificate had attained finality. However, in this petition, petitioner prayed that its
charter certificate be "reinstated in the roster of active legitimate labor [organizations]." This cannot be granted
here. To repeat, the proceedings on a petition for cancellation of registration are independent of those of a petition
for certification election. This case originated from the latter. If it is shown that petitioner‘s legal personality had
already been revoked or cancelled with finality in accordance with the rules, then it is no longer a legitimate labor
organization with the right to petition for a certification election.
A Final Note
Respondent, as employer, had been the one opposing the holding of a certification election among its rank-and-file
employees. This should not be the case. We have already declared that, in certification elections, the employer is a
bystander; it has no right or material interest to assail the certification election.
HOTEL ENTERPRISES OF THE PHILS., (HYATT REGENCY) vs. SAMAHAN NG MGA MANGGAGAWA SA
HYATT-(NUWHRAIN)
[G.R. No. 165756, June 5, 2009]
Facts:
Samahan ng mga Manggagawa sa Hyatt-National Union of Workers in the Hotel Restaurant and Allied Industries
(Union) is the certified collective bargaining agent of the rank-and-file employees of Hyatt Regency Manila, a hotel
owned by petitioner Hotel Enterprises of the Philippines, Inc. (HEPI).
In 2001, HEPI‘s hotel business suffered a slump due to the local and international economic slowdown. After
implementing several schemes to recover their losses, HEPI decided to implement a downsizing scheme by
removing positions identified as redundant. The effect was to be a reduction of the hotel‘s rank-and file employees
from the agreed number of 248, from their CBA, down to just 150. The Union opposed the downsizing plan
because they did not believe the financial report stating that the hotel was incurring heavy financial losses, and for
being violative of the CBA.
Despite its opposition, a list of the positions declared redundant and to be contracted out was given by the
management to the Union. Notices of termination were, likewise, sent to 48 employees whose positions were to be
retrenched or declared as redundant.
The Union filed a notice of strike based on unfair labor practice (ULP) against HEPI. A petition was likewise filed by
HEPI to declare the strike illegal.
The NLRC decided in favor of HEPI. They gave credence to the financial report that the hotel had incurred huge
financial losses necessitating the adoption of a downsizing scheme. Thus, NLRC declared the strike illegal,
suspended all Union officers for a period of six (6) months without pay, and dismissed the ULP charge against
HEPI.
Issue:
Whether or not the Union staged a valid strike.
Ruling:
The Constitution affords full protection to labor, but the policy is not to be blindly followed at the expense of
capital. Always, the interests of both sides must be balanced in light of the evidence adduced and the peculiar
circumstances surrounding each case.
The requisites for a valid strike are: (a) a notice of strike filed with the DOLE 30 days before the intended date
thereof or 15 days in case of ULP; (b) a strike vote approved by a majority of the total union membership in the
bargaining unit concerned obtained by secret ballot in a meeting called for that purpose; and (c) a notice to the
DOLE of the results of the voting at least seven (7) days before the intended strike. The requirements are
mandatory and failure of a union to comply therewith renders the strike illegal.
In this case, respondent fully satisfied the procedural requirements prescribed by law: a strike notice filed on April
12, 2002; a strike vote reached on April 25, 2002; notification of the strike vote filed also on April 25, 2002;
conciliation proceedings conducted on May 8, 20002; and the actual strike on May 10, 2002.
Substantively, however, there appears to be a problem. A valid and legal strike must be based on "strikeable"
grounds, because if it is based on a "non-strikeable" ground, it is generally deemed an illegal strike. Corollarily, a
strike grounded on ULP is illegal if no acts constituting ULP actually exist. As an exception, even if no such acts are
committed by the employer, if the employees believe in good faith that ULP actually exists, then the strike held
pursuant to such belief may be legal. As a general rule, therefore, where a union believes that an employer
committed ULP and the surrounding circumstances warranted such belief in good faith, the resulting strike may be
considered legal although, subsequently, such allegations of unfair labor practices were found to be groundless.
Here, respondent Union went on strike in the honest belief that petitioner was committing ULP after the latter
decided to downsize its workforce contrary to the staffing/manning standards adopted by both parties under a CBA
forged only four (4) short months earlier. The belief was bolstered when the management hired 100 contractual
workers to replace the 48 terminated regular rank-and-file employees who were all Union members. Indeed, those
circumstances showed prima facie that the hotel committed ULP. Thus, even if technically there was no legal
ground to stage a strike based on ULP (because the downzising/retrenchment scheme by the employer was
declared valid), since the attendant circumstances support the belief in good faith that petitioner‘s retrenchment
scheme was structured to weaken the bargaining power of the Union, the strike, by exception, may be considered
legal.
Because of this, we view the NLRC‘s decision to suspend all the Union officers for six (6) months without pay to be
too harsh a punishment. A suspension of two (2) months without pay should have been more reasonable and just.
Be it noted that the striking workers are not entitled to receive strike-duration pay, the ULP allegation against the
employer being unfounded.
MIRANDA VS. ASIAN TERMINALS INC., ET AL.

[G.R. No. 174316, June 23, 2009]
Facts:
Petitioner Teodorico S. Miranda, Jr. was employed by respondent ATI in 1991 as Checker I. He also became a
member of the Associated Port Checkers and Workers Union (APCWU or the union). On April 10, 1992, the
petitioner, who was then the Vice President of the union, was appointed to the position of Shop Steward which is a
union position under the payroll of the company. The Collective Bargaining Agreement (CBA) between the union
and ATI provided for the appointment of a Shop Steward from among the union members, upon the
recommendation of the union president. The Shop Steward is a field representative of both the company and the
union and acts as an independent arbiter of all complaints brought to his attention.[
On December 28, 1993, Roger P. Silva, the President of APCWU, wrote a letter to the petitioner regarding the
recall of his designation as the union Shop Steward. The union president explained that the petitioner was recalled
as union Shop Steward due to loss of trust and confidence in him, pursuant to the ―Agreement Amending the MPSI
(Marina Port Services, Inc.) - APCWU CBA.‖ The letter further stated that the petitioner refused to heed the union
president‘s reminders concerning his ―chronic absenteeism‖ that ―is hurting the interest of the Union members as
they are left with no responsible union officer when summoned for investigation concerning alleged infractions of
company rules.‖
Upon the conclusion of the investigation, the grievance committee issued its report recommending to ATI the recall
of the petitioner as Shop Steward and for his reversion to his former position of Checker I, in accordance with the
CBA. The petitioner questioned his recall as union Shop Steward, and the union president, Roger P. Silva, issued a
letter which reasoned that the petitioner‘s recall as Shop Steward was pursuant to Section 13 of the Agreement
Amending the MPSI-APCWU CBA, amending Section 2, Article V of the MPSI-APCWU CBA which required that the
term of office of the Shop Steward shall be based on trust and confidence and favorable recommendation of the
duly elected president of the Union.
The petitioner argues that he is entitled to claim reinstatement as Shop Steward as well as the payment of his
backwages pending the respondent‘s appeal. He further contends that the Court of Appeals erred in dismissing his
consolidated petitions which prayed for the enforcement of his reinstatement as Shop Steward for being moot and
academic.
The respondent, on the other hand, maintains that both the NLRC and the Court of Appeals relied on substantial
evidence in arriving at their decision that the consolidated petitions are already moot and academic in view of the
previous reinstatement of the petitioner to Checker I and his retrenchment and separation from ATI since October
31, 2001.
Issues:
(1) Whether or not the petitioner should be reinstated to the position of Shop Steward
(2) Whether or not the Labor Arbiter has jurisdiction over the dispute
Ruling:
A cursory look at the responsibilities of a shop steward leads to the conclusion that it is a position within the union,
and not within the company. A shop steward is appointed by the union in a shop, department, or plant and serves
as representative of the union, charged with negotiating and adjustment of grievances of employees with the
supervisor of the employer. He is the representative of the union members in a building or other
workplace. Black's Law Dictionary defines a shop steward as a union official elected to represent members in a
plant or particular department. His duties include collection of dues, recruitment of new members and initial
negotiations for the settlement of grievances. The shop steward is responsible for receiving complaints and
grievances of the employees and for bringing these complaints to the immediate supervisor of the employee
concerned. If the grievance is not settled through the efforts of the shop steward, it is referred to the grievance
committee.
It is quite clear that the jurisdiction of shop stewards and the supervisors includes the determination of the issues
arising from the interpretation or even implementation of a provision of the CBA, or from any order or
memorandum, circular or assignments issued by the appropriate authority in the establishment. In fine, they are
part and parcel of the continuous process of grievance resolution designed to preserve and maintain peace among
the employees and their employer. They occupy positions of trust and laden with awesome responsibilities. Since
the Shop Steward is a union position, the controversy surrounding his recall from his position as Shop Steward
becomes a dispute within the union.
An "Internal Union Dispute" or intra-union conflict refers to a conflict within or inside a labor union. It includes all
disputes or grievances arising from any violation of or disagreement over any provision of the constitution and by-
laws of a union, including any violation of the rights and conditions of union membership provided for in the
Code.[ Article 226 of the Labor Code of the Philippines vests on the Bureau of Labor Relations and the Labor
Relations Division jurisdiction to act on all inter-union or intra-union conflicts.
The actions of the petitioner bolster the conclusion that his grievances were directed against the union and not the
respondent company, making the dispute an intra-union dispute. The first Complaints filed by the petitioner were
against the union and the Union President for illegal recall of his designation as Shop Steward. A Complaint was
then filed before the DOLE Med-Arbiter praying for reinstatement to union Shop Steward and for the award of the
salary differential while he was allegedly illegally demoted. But the money claims could not be brought before the
union since the salaries of the petitioner were paid by the respondent company; thus, a Complaint for illegal
demotion amounting to constructive dismissal was filed before the Labor Arbiter, against the union, union president
and this time including respondent company and the president of the company.
Notwithstanding the determination of the Med-Arbiter, as affirmed by the Secretary of Labor, that the petitioner
should be reinstated to the position of Shop Steward, which is binding on this Court, the petitioner could not be
reinstated to the position of Shop Steward because his eventual separation from respondent ATI made
reinstatement unfeasible. Employment with respondent ATI and membership in the union are required in order to
occupy the position of Shop Steward. But the petitioner is neither a member of the union nor employed with
respondent ATI. He was already retrenched from respondent ATI since October 21, 2001, and his retrenchment
was finally settled through the execution of a Quit Claim and Release which was executed before the Second
Division of the NLRC in NLRC CA No. 032809-02. The Quit Claim and Release provides that in consideration of the
receipt ofP367,500.00, the petitioner discharges respondent ATI and its officers from any claims arising from his
retrenchment, without prejudice to the present labor case filed by the petitioner.
It may seem that the outcome of this case provides no relief for the petitioner despite his invalid removal from the
position of union Shop Steward, but the reinstatement of the petitioner could not be forced into the present
circumstances because the petitioner is no longer employed by the respondent company. It is a fact that we cannot
avoid and must consider in resolving this case. He was already compensated for his retrenchment from ATI, and he
released respondent ATI from any and all claims or liability with respect to his separation from employment due to
retrenchment. To order the respondent company to reinstate the petitioner to his employment in ATI would render
the Quit Claim and Release nugatory.
The events which have taken place during the pendency of the case have rendered the present petition moot and
academic.
NATIONAL UNION OF WORKERS IN HOTELS RESTAURANTS AND ALLIED INDUSTRIES-MANILA

PAVILION HOTEL CHAPTER vs. SOLE, ET AL.
[G.R. No. 181531, July 31, 2009]
Facts:
A certification election was conducted on June 16, 2006 among the rank-and-file employees of respondent Holiday
Inn Manila Pavilion Hotel (the Hotel) with the following results:
EMPLOYEES IN VOTERS‘ LIST = 353 In view of the significant number of segregated votes, contending
unions, petitioner, NUHWHRAIN-MPHC, and respondent Holiday Inn
TOTAL VOTES CAST = 346 Manila Pavillion Hotel Labor Union (HIMPHLU), referred the case back
to Med-Arbiter Ma. Simonette Calabocal to decide which among those
NUWHRAIN-MPHC = 151 votes would be opened and tallied. Eleven (11) votes were initially
segregated because they were cast by dismissed employees, albeit
HIMPHLU = 169
the legality of their dismissal was still pending before the Court of
NO UNION = 1 Appeals. Six other votes were segregated because the employees who
cast them were already occupying supervisory positions at the time of
SPOILED = 3 the election. Still five other votes were segregated on the ground that
they were cast by probationary employees and, pursuant to the
SEGREGATED = 22
existing Collective Bargaining Agreement (CBA), such employees
cannot vote. It bears noting early on, however, that the vote of one Jose Gatbonton (Gatbonton), a probationary
employee, was counted.
Petitioner, which garnered 151 votes, appealed to the Secretary of Labor and Employment (SOLE), arguing that the
votes of the probationary employees should have been opened considering that probationary employee
Gatbonton‘s vote was tallied. And petitioner averred that respondent HIMPHLU, which garnered 169 votes, should
not be immediately certified as the bargaining agent, as the opening of the 17 segregated ballots would push the
number of valid votes cast to 338 (151 + 169 + 1 + 17), hence, the 169 votes which HIMPHLU garnered would be
one vote short of the majority which would then become 169.
By the assailed Resolution of January 22, 2007, the Secretary of Labor and Employment (SOLE), through then
Acting Secretary Luzviminda Padilla, affirmed the Med-Arbiter‘s Order. The Order granting the petition for the
conduct of the certification election, the six probationary employees were not yet hired, hence, they could not vote.
In fine, the SOLE concluded that the certification of HIMPHLU as the exclusive bargaining agent was proper.
Issues:
The relevant issues for resolution then are first, whether employees on probationary status at the time of the
certification elections should be allowed to vote, and second, whether HIMPHLU was able to obtain the required
majority for it to be certified as the exclusive bargaining agent.
Ruling:
On the first issue, the Court rules in the affirmative.
The inclusion of Gatbonton‘s vote was proper not because it was not questioned but because probationary
employees have the right to vote in a certification election. The votes of the six other probationary employees
should thus also have been counted. As Airtime Specialists, Inc. v. Ferrer-Calleja holds:
In a certification election, all rank and file employees in the appropriate bargaining unit, whether probationary or
permanent are entitled to vote. This principle is clearly stated in Art. 255 of the Labor Code which states that the
"labor organization designated or selected by the majority of the employees in an appropriate bargaining unit shall
be the exclusive representative of the employees in such unit for purposes of collective bargaining." Collective
bargaining covers all aspects of the employment relation and the resultant CBA negotiated by the certified union
binds all employees in the bargaining unit. Hence, all rank and file employees, probationary or permanent, have a
substantial interest in the selection of the bargaining representative. The Code makes no distinction as to their
employment status as basis for eligibility in supporting the petition for certification election. The law refers to "all"
the employees in the bargaining unit. All they need to be eligible to support the petition is to belong to the
"bargaining unit." (Emphasis supplied)
Rule II, Sec. 2 of Department Order No. 40-03, series of 2003, which amended Rule XI of the Omnibus Rules
Implementing the Labor Code, provides:
Rule II
Section 2. Who may join labor unions and workers' associations. - All persons employed in commercial, industrial
and agricultural enterprises, including employees of government owned or controlled corporations without original
charters established under the Corporation Code, as well as employees of religious, charitable, medical or
educational institutions whether operating for profit or not, shall have the right to self-organization and to form,
join or assist labor unions for purposes of collective bargaining: provided, however, that supervisory employees
shall not be eligible for membership in a labor union of the rank-and-file employees but may form, join or assist
separate labor unions of their own. Managerial employees shall not be eligible to form, join or assist any labor
unions for purposes of collective bargaining. Alien employees with valid working permits issued by the Department
may exercise the right to self-organization and join or assist labor unions for purposes of collective bargaining if
they are nationals of a country which grants the same or similar rights to Filipino workers, as certified by the
Department of Foreign Affairs.
For purposes of this section, any employee, whether employed for a definite period or not, shall beginning on the
first day of his/her service, be eligible for membership in any labor organization.
All other workers, including ambulant, intermittent and other workers, the self-employed, rural workers and those
without any definite employers may form labor organizations for their mutual aid and protection and other
legitimate purposes except collective bargaining.
The provision in the CBA disqualifying probationary employees from voting cannot override the
Constitutionally-protected right of workers to self-organization, as well as the provisions of the Labor
Code and its Implementing Rules on certification elections and jurisprudence thereon.
Prescinding from the principle that all employees are, from the first day of their employment, eligible for
membership in a labor organization, it is evident that the period of reckoning in determining who shall be included
in the list of eligible voters is, in cases where a timely appeal has been filed from the order of the MedArbiter, the
date when the Order of the Secretary of Labor and Employment, whether affirming or denying the appeal,
becomes final and executory.
The filing of an appeal to the SOLE from the Med-Arbiter’s Order stays its execution, in accordance
with Sec. 21, and rationally, the Med-Arbiter cannot direct the employer to furnish him/her with the list of eligible
voters pending the resolution of the appeal.
During the pendency of the appeal, the employer may hire additional employees. To exclude the employees hired
after the issuance of the Med-Arbiter‘s Order but before the appeal has been resolved would violate the guarantee
that every employee has the right to be part of a labor organization from the first day of their service.
In the present case, records show that the probationary employees, including Gatbonton, were included in the list
of employees in the bargaining unit submitted by the Hotel on May 25, 2006 in compliance with the directive of the
Med-Arbiter after the appeal and subsequent motion for reconsideration have been denied by the SOLE, rendering
the Med-Arbiter‘s August 22, 2005 Order final and executory 10 days after the March 22, 2007 Resolution (denying
the motion for reconsideration of the January 22 Order denying the appeal), and rightly so.
Because, for purposes of self-organization, those employees are, in light of the discussion above,
deemed eligible to vote.
A certification election is the process of determining the sole and exclusive bargaining agent of the
employees in an appropriate bargaining unit for purposes of collective bargaining. Collective
bargaining, refers to the negotiated contract between a legitimate labor organization and the
employer concerning wages, hours of work and all other terms and conditions of employment in a
bargaining unit.
The significance of an employee‘s right to vote in a certification election cannot thus be overemphasized for he has
considerable interest in the determination of who shall represent him in negotiating the terms and conditions of his
employment.
Even if the Implementing Rules gives the SOLE 20 days to decide the appeal from the Order of the Med-Arbiter,
experience shows that it sometimes takes months to be resolved. To rule then that only those employees hired as
of the date of the issuance of the Med-Arbiter‘s Order are qualified to vote would effectively disenfranchise
employees hired during the pendency of the appeal. More importantly, reckoning the date of the issuance of the
Med-Arbiter‘s Order as the cut-off date would render inutile the remedy of appeal to the SOLE.
But while the Court rules that the votes of all the probationary employees should be included, under the particular
circumstances of this case and the period of time which it took for the appeal to be decided, the votes of the six
supervisory employees must be excluded because at the time the certification elections was conducted, they had
ceased to be part of the rank and file, their promotion having taken effect two months before the election.
2nd Issue:
As to whether HIMPHLU should be certified as the exclusive bargaining agent, the Court rules in the negative. It is
well-settled that under the so-called "double majority rule," for there to be a valid certification election, majority
of the bargaining unit must have voted AND the winning union must have garnered majority of the
valid votes cast.
Prescinding from the Court‘s ruling that all the probationary employees‘ votes should be deemed valid votes while
that of the supervisory employees should be excluded, it follows that the number of valid votes cast would increase
– from 321 to 337. Under Art. 256 of the Labor Code, the union obtaining the majority of the valid votes cast by
the eligible voters shall be certified as the sole and exclusive bargaining agent of all the workers in the appropriate
bargaining unit. This majority is 50% + 1. Hence, 50% of 337 is 168.5 + 1 or at least 170.
HIMPHLU obtained 169 while petitioner received 151 votes. Clearly, HIMPHLU was not able to obtain a majority
vote. The position of both the SOLE and the appellate court that the opening of the 17 segregated ballots will not
materially affect the outcome of the certification election as for, so they contend, even if such member were all in
favor of petitioner, still, HIMPHLU would win, is thus untenable.
It bears reiteration that the true importance of ascertaining the number of valid votes cast is for it to
serve as basis for computing the required majority, and not just to determine which union won the
elections. The opening of the segregated but valid votes has thus become material. To be sure, the conduct of a
certification election has a two-fold objective: to determine the appropriate bargaining unit and to ascertain the
majority representation of the bargaining representative, if the employees desire to be represented at all by
anyone. It is not simply the determination of who between two or more contending unions won, but whether it
effectively ascertains the will of the members of the bargaining unit as to whether they want to be represented and
which union they want to represent them.
Having declared that no choice in the certification election conducted obtained the required majority, it follows that
a run-off election must be held to determine which between HIMPHLU and petitioner should represent the rank-
and-file employees.
A run-off election refers to an election between the labor unions receiving the two (2) highest number of votes in a
certification or consent election with three (3) or more choices, where such a certified or consent election results in
none of the three (3) or more choices receiving the majority of the valid votes cast; provided that the total number
of votes for all contending unions is at least fifty percent (50%) of the number of votes cast.8 With 346 votes cast,
337 of which are now deemed valid and HIMPHLU having only garnered 169 and petitioner having obtained 151
and the choice "NO UNION" receiving 1 vote, then the holding of a run-off election between HIMPHLU and
petitioner is in order.
A. SORIANO AVIATION vs. EMPLOYEES ASSOCIATION OF A. SORIANO AVIATION ET AL.

[G.R. No. 166879, Aug. 14, 2009]
Facts:
A. Soriano Aviation (petitioner or the company) and respondent Employees Association of A. Soriano Aviation (the
Union), the duly-certified exclusive bargaining agent of the rank and file employees of petitioner, entered into a
Collective Bargaining Agreement (CBA) which included a ―No-Strike, No-Lock-out‖ clause.
On May 1 & 12, and June 12, 1997, which were legal holidays and peak season for the company, eight mechanics-
members of respondent Union refused to render overtime work. Petitioner treated the refusal to work as a
concerted action which is a violation of the ―No-Strike, No-Lockout‖ clause in the CBA. It thus meted the workers a
30-day suspension. It also filed a complaint for illegal strike.
The attempted settlement between the parties having been futile, the Union filed a Notice of Strike with the
National Conciliation and Mediation Board on October 3, 1997, attributing to petitioner the following acts: (1)
union busting, (2) illegal dismissal of union officer, (3) illegal suspension of eight mechanics, (4) violation of
memorandum of agreement, (5) coercion of employees and interrogation of newly-hired mechanics with regard to
union affiliation, (6) discrimination against the aircraft mechanics, (7) harassment through systematic fault-finding,
(8) contractual labor, and (9) constructive dismissal of the Union President, Julius Vargas. As despite conciliation
no amicable settlement of the dispute was arrived at, the Union went on strike on October 22, 1997.
The Labor Arbiter declared that the newly implemented work-shift schedule was a valid exercise of management
prerogative and the refusal of herein individual respondents to work on three consecutive holidays was a form of
protest by the Union, hence, deemed a concerted action. Noting that the Union failed to comply with the formal
requirements prescribed by the Labor Code in the holding of strike, the strike was declared illegal.
The Labor Arbiter declared the second strike illegal. The Labor Arbiter went on to hold that the Union deliberately
resorted to the use of violent and unlawful acts in the course of the ―second strike,‖ hence, the individual
respondents were deemed to have lost their employment.
NLRC affirmed in toto the Labor Arbiter‘s decision.

The Court of Appeals reversed and set aside the NLRC ruling, holding that the acts of violence committed by the
Union members in the course of the strike were not serious or pervasive to call for loss of employment of the
striking employees. Specifically, the appellate court noted that at the time petitioner filed its complaint in June
1998, almost eight months had already elapsed from the commencement of the strike and, in the interim, the
alleged acts of violence were committed only during nine non-consecutive days.
Issue:
In issue then is whether the strike staged by respondents is illegal due to the alleged commission of illegal acts and
violation of the ―No Strike-No Lockout‖ clause of the CBA and, if in the affirmative, whether individual respondents
are deemed to have lost their employment status on account thereof.
Ruling:
The Court rules in the affirmative.
The Court notes that, as found by the Labor Arbiter in NLRC Case No. 07-05409-97, the first strike or the
mechanics‘ refusal to work on 3 consecutive holidays was prompted by their disagreement with the management-
imposed new work schedule. Having been grounded on a non-strikeable issue and without complying with the
procedural requirements, then the same is a violation of the ―No Strike-No Lockout Policy‖ in the existing
CBA. Respecting the second strike, where the Union complied with procedural requirements, the same was not a
violation of the ―No Strike- No Lockout‖ provisions, as a ―No Strike-No Lockout‖ provision in the Collective
Bargaining Agreement (CBA) is a valid stipulation but may be invoked only by employer when the strike is
economic in nature or one which is conducted to force wage or other concessions from the employer that are not
mandated to be granted by the law. It would be inapplicable to prevent a strike which is grounded on unfair labor
practice. In the present case, the Union believed in good faith that petitioner committed unfair labor practice when
it went on strike on account of the 30-day suspension meted to the striking mechanics, dismissal of a union officer
and perceived union-busting, among others.
The Court holds that the second strike became invalid due to the commission of illegal action in its course. It is
hornbook principle that the exercise of the right of private sector employees to strike is not absolute. Thus
Section 3 of Article XIII of the Constitution provides:
SECTION 3. x x x
It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations and peaceful
concerted activities, including the right to strike in accordance with law. They shall be entitled to security of
tenure, humane conditions of work, and a living wage. They shall also participate in policy and decision-making
processes affecting their rights and benefits as may be provided by law. (Emphasis and underscoring supplied)
Indeed, even if the purpose of a strike is valid, the strike may still be held illegal where the means employed
are illegal. Thus, the employment of violence, intimidation, restraint or coercion in carrying out concerted activities
which are injurious to the right to property renders a strike illegal. And so is picketing or the obstruction to the
free use of property or the comfortable enjoyment of life or property, when accompanied by intimidation, threats,
violence, and coercion as to constitute nuisance.
Apropos is the following ruling in Sukhothai Cuisine v. Court of Appeals:

Well-settled is the rule that even if the strike were to be declared valid because its objective or purpose is lawful,
the strike may still be declared invalid where the means employed are illegal. Among such limits are the prohibited
activities under Article 264 of the Labor Code, particularly paragraph (e), which states that no person engaged in
picketing shall:
a) commit any act of violence, coercion, or intimidation or
b) obstruct the free ingress to or egress from the employer's premises for lawful purposes, or
c) obstruct public thoroughfares.
The following acts have been held to be prohibited activities: where the strikers shouted slanderous and scurrilous
words against the owners of the vessels; where the strikers used unnecessary and obscene language or epithets to
prevent other laborers to go to work, and circulated libelous statements against the employer which show actual
malice; where the protestors used abusive and threatening language towards the patrons of a place of business or
against co-employees, going beyond the mere attempt to persuade customers to withdraw their patronage; where
the strikers formed a human cordon and blocked all the ways and approaches to the launches and vessels of the
vicinity of the workplace and perpetrated acts of violence and coercion to prevent work from being performed; and
where the strikers shook their fists and threatened non-striking employees with bodily harm if they persisted to
proceed to the workplace. Permissible activities of the picketing workers do not include obstruction of access of
customers.
The appellate court found in the present case, as in fact it is not disputed, that the Union committed illegal acts
during the strike. The Union members‘ repeated name-calling, harassment and threats of bodily harm directed
against company officers and non-striking employees and, more significantly, the putting up of placards, banners
and streamers with vulgar statements imputing criminal negligence to the company, which put to doubt reliability
of its operations, come within the purview of illegal acts under Art. 264 and jurisprudence.
That the alleged acts of violence were committed in nine non-consecutive days during the almost eight months that
the strike was on-going does not render the violence less pervasive or widespread to be excusable. Nowhere in
Art. 264 does it requires that violence must be continuous or that it should be for the entire duration of the strike.
The appellate court took against petitioner its filing of its complaint to have the strike declared illegal almost eight
months from the time it commenced. Art. 264 does not, however, state for purposes of having a strike declared as
illegal that the employer should immediately report the same. It only lists what acts are prohibited. It is thus
absurd to expect an employer to file a complaint at the first instance that an act of violence is alleged to be
committed, especially, as in the present case, when an earlier complaint to have the refusal of the individual
respondents to work overtime declared as an illegal strike was still pending — an issue resolved in its favor only on
September 25, 1998.
The records show that the Union went on strike on October 22, 1997, and the first reported harassment incident
occurred on October 29, 1997, while the last occurred in January, 1998. Those instances may have been sporadic,
but as found by the Labor Arbiter and the NLRC, the display of placards, streamers and banners even up to the
time the appeal was being resolved by the NLRC works against the Union‘s favor.
The acts complained of including the display of placards and banners imputing criminal negligence on the part of
the company and its officers, apparently with the end in view of intimidating the company‘s clientele, are, given the
nature of its business, that serious as to make the ―second strike‖ illegal. Specifically with respect to the putting up
of those banners and placards, coupled with the name-calling and harassment, the same indicates that it was
resorted to coerce the resolution of the dispute – the very evil which Art. 264 seek to prevent.
2nd Issue:
As to the issue of loss of employment of those who participated in the illegal strike, Sukhothai instructs:
In the determination of the liabilities of the individual respondents, the applicable provision is Article 264(a) of the
Labor Code:
Art. 264. Prohibited Activities – (a) x x x
x x x x Any union officer who knowingly participates in an illegal strike and any worker or union
officer who knowingly participates in the commission of illegal acts during an illegal strike may be
declared to have lost his employment status: Provided, That mere participation of a worker in a
lawful strike shall not constitute sufficient ground for termination of his employment, even if a
replacement had been hired by the employer during such lawful strike.
xxxx
In Samahang Manggagawa sa Sulpicio Lines, Inc.-NAFLU v. Sulpicio Lines, Inc., this Court explained that the
effects of such illegal strikes, outlined in Article 264, make a distinction between workers and union officers who
participate therein: an ordinary striking worker cannot be terminated for mere participation in an illegal. There
must be proof that he or she committed illegal acts during a strike. A union officer, on the other
hand, may be terminated from work when he knowingly participates in an illegal strike, and like
other workers, when he commits an illegal act during an illegal strike. In all cases, the striker must
be identified. But proof beyond reasonable doubt is not required. Substantial evidence available under the
attendant circumstances, which may justify the imposition of the penalty of dismissal, may suffice.
The liability for prohibited acts has thus to be determined on an individual basis. A perusal of the Labor Arbiter‘s
Decision, which was affirmed in toto by the NLRC, shows that on account of the staging of the illegal strike,
individual respondents were all deemed to have lost their employment, without distinction as to their respective
participation.
Of the participants in the illegal strike, whether they knowingly participated in the illegal strike in the case of union
officers or knowingly participated in the commission of violent acts during the illegal strike in the case of union
members, the records do not indicate. While respondent Julius Vargas was identified to be a union officer, there is
no indication if he knowingly participated in the illegal strike. The Court not being a trier of facts, the remand of
the case to the NLRC is in order only for the purpose of determining the status in the Union of individual
respondents and their respective liability, if any.
YSS EMPLOYEES UNION-PHIL TRANSPORT AND GENERAL WORKERS ORGANIZATION vs. YSS
LABORATORIES, INC.
[G.R. No. 155125, December 4, 2009]
Facts:
YSS Laboratories is a domestic corporation engaged in the pharmaceutical business. YSSEU is a duly registered
labor organization and the sole and exclusive bargaining representative of the rank and file employees of YSS
Laboratories.
In order to arrest escalating business losses, YSS Laboratories implemented a retrenchment program which
affected 11 employees purportedly chosen in accordance with the reasonable standards established by the
company. Of the 11 employees sought to be retrenched, nine were officers and members of YSSEU. Initially, these
employees were given the option to avail themselves of the early retirement program of the company. When no
one opted to retire early, YSS Laboratories exercised its option to terminate the services of its employees as
allegedly authorized under Article 283 of the Labor Code. Thus, copies of the Notices of Termination were filed
with DOLE on 19 March 2001 and were served to concerned employees on 20 March 2001.
Claiming that YSS Laboratories was guilty of discrimination and union-busting in carrying out the said retrenchment
program, YSSEU decided to hold a strike. After the necessary strike vote was taken under the supervision of the
National Conciliation Mediation Board – National Capital Region (NCMB-NCR), YSSEU staged a strike on 20 April
2001.
In order to forge a compromise, a number of conciliation proceedings were conducted by the NCMB-NCR, but these
efforts proved futile since the parties‘ stance was unbending.This prompted the Secretary of Labor to finally
intervene in order to put an end to a prolonged labor dispute. Underscoring the government‘s policy of preserving
economic gains and employment levels, the Secretary of Labor deemed that the continuation of the labor dispute
was inimical to national interest. Thus, in an Order dated 11 May 2001, the Secretary of Labor certified the labor
dispute to the National Labor Relations Commission (NLRC) for compulsory arbitration. Accordingly, all striking
workers were thereby directed to return to work within 24 hours from their receipt of the said Order, and YSS
Laboratories to accept them under the terms and conditions prevailing before the strike.
YSS Laboratories, however, refused to fully comply with the directive of the Secretary of Labor. In its Urgent
Motion for Reconsideration, YSS Laboratories argued that nine union officers and members who were previously
terminated from service pursuant to a valid retrenchment should be excluded from the operation of the return-to-
work order. It also asserted that the union officers who participated in the purported illegal strike should likewise
not be allowed to be back to their employment for they were deemed to have already lost their employment
status.
Issues:
I. WHETHER OR NOT THE SECRETARY OF LABOR GRAVELY ABUSED ITS DISCRETION IN CERTIFYING THE LABOR
DISPUTE TO THE NLRC FOR COMPULSORY ARBITRATION.
II. WHETHER OR NOT THE RETRENCHED EMPLOYEES SHOULD BE EXCLUDED FROM THE OPERATION OF THE
RETURN TO WORK ORDER.
Ruling:
The petition is impressed with merit.
The Orders dated 11 May 2001 and 9 June 2001 of the Secretary of Labor, certifying the labor dispute involving
the herein parties to the NLRC for compulsory arbitration, and enjoining YSSEU to return to work and YSS
Laboratories to admit them under the same terms and conditions prevailing before the strike, were issued pursuant
to Article 263(g) of the Labor Code. Said provision reads:
Art. 263. Strikes, picketing, and lockouts.
xxxx
all striking or locked out employees shall immediately return to work and the employer shall
immediately resume operations and readmit all workers under the same terms and conditions
prevailing before the strike or lockout. The Secretary of Labor and Employment or the Commission may seek
the assistance of law enforcement agencies to ensure compliance with this provision as well as with such orders as
he may issue to enforce the same.
After martial law was lifted and democracy was restored, the assumption of jurisdiction in Art. 263(g) has now
been viewed as an exercise of the police power of the State with the aim of promoting the common good. The
grant of these plenary powers to the Secretary of Labor makes it incumbent upon him to bring about soonest, a
fair and just solution to the differences between the employer and the employees, so that the damage such labor
dispute might cause upon the national interest may be minimized as much as possible, if not totally averted, by
avoiding stoppage of work or any lag in the activities of the industry or the possibility of those contingencies that
might cause detriment to the national interest.
In order to effectively achieve such end, the assumption or certification order shall have the effect of automatically
enjoining the intended or impending strike or lockout. Moreover, if one has already taken place, all striking
workers shall immediately return to work, and the employer shall immediately resume operations and readmit all
workers under the same terms and conditions prevailing before the strike or lockout.
YSS Laboratories‘ vigorous insistence on the exclusion of the retrenched employees from the coverage of the
return-to-work order seriously impairs the authority of the Secretary of Labor to forestall a labor dispute that he
deems inimical to the national economy. The Secretary of Labor is afforded plenary and broad powers, and is
granted great breadth of discretion to adopt the most reasonable and expeditious way of writing finis to the labor
dispute.
Accordingly, when the Secretary of Labor directed YSS Laboratories to accept all the striking workers back to work,
the Secretary did not exceed his jurisdiction, or gravely abuse the same. It is significant at this point to point out
that grave abuse of discretion implies a capricious and whimsical exercise of judgment. Thus, an act may be
considered as committed in grave abuse of discretion when the same is performed in a capricious or whimsical
exercise of judgment, which is equivalent to lack of jurisdiction. The abuse of discretion must be so patent and
gross as to amount to an evasion of a positive duty or to a virtual refusal to perform a duty enjoined by law, or to
act at all in contemplation of law, as where the power is exercised in an arbitrary and despotic manner by reason
of passion or personal hostility. In the case at bar, there is no showing that the assailed orders were issued in an
arbitrary or despotic manner. The Orders dated 11 May 2001 and 9 June 2001 were issued by the Secretary of
Labor, with the end in view of preserving the status quo ante while the main issues of the validity of the
retrenchment and legality of the strike were being threshed out in the proper forum. This was done for the
promotion of the common good, considering that a lingering strike could be inimical to the interest of both
employer and employee. The Secretary of Labor acts to maintain industrial peace. Thus, his certification for
compulsory arbitration is not intended to interfere with the management‘s rights but to obtain a speedy settlement
of the dispute.
By harping on the validity of the retrenchment and on the exclusion of the retrenched employees from the
coverage of the return-to-work order, YSS Laboratories undermines the underlying principle embodied in Article
263(g) of the Labor Code on the settlement of labor disputes -- that assumption and certification orders are
executory in character and are to be strictly complied with by the parties, even during the pendency of any petition
questioning their validity. Regardless therefore of its motives, or of the validity of its claims, YSS Laboratories must
readmit all striking employees and give them back their respective jobs. Accepting back the workers in this case is
not a matter of option, but of obligation mandated by law for YSS Laboratories to faithfully comply with. Its
compulsory character is mandated, not to cater to a narrow segment of society, or to favor labor at the expense of
management, but to serve the greater interest of society by maintaining the economic equilibrium.
Instructive is the ruling of this Court in Philippine Airlines Employees Association v. Philippine Airlines, Inc.:
The very nature of a return-to-work order issued in a certified case lends itself to no other construction. The
certification attests to the urgency of the matter, affecting as it does an industry indispensable to the national
interest. The order is issued in the exercise of the court‘s compulsory power of arbitration, and therefore must be
obeyed until set aside. x x x.
Certainly, the determination of who among the strikers could be admitted back to work cannot be made to depend
upon the discretion of employer, lest we strip the certification or assumption-of-jurisdiction orders of the coercive
power that is necessary for attaining their laudable objective. The return-to-work order does not interfere with the
management‘s prerogative, but merely regulates it when, in the exercise of such right, national interests will be
affected. The rights granted by the Constitution are not absolute. They are still subject to control and limitation to
ensure that they are not exercised arbitrarily. The interests of both the employers and employees are intended to
be protected and not one of them is given undue preference.
WHEREFORE, premises considered, the instant Petition is GRANTED.
GSIS ET AL. vs. VILLAVIZA ET AL.

[G.R. No. 180291, July 27, 2010]
Facts:
Petitioner Winston Garcia (PGM Garcia), as President and General Manager of the GSIS, filed separate formal
charges against respondents Dinnah Villaviza, Elizabeth Duque, Adronico A. Echavez, Rodel Rubio, Rowena Therese
B. Gracia, Pilar Layco, and Antonio Jose Legarda for Grave Misconduct and/or Conduct Prejudicial to the Best
Interest of the Service pursuant to the Rules of Procedure in Administrative Investigation (RPAI) of GSIS
Employees and Officials, III, D, (1, c, f) in relation to Section 52A (3), (20), Rule IV, of the Uniform Rules on
Administrative Cases in the Civil Service (URACCS), in accordance with Book V of the Administrative Code of 1987,
committed as follows:
That on 27 May 2005, respondent, wearing red shirt together with some employees, marched to or appeared
simultaneously at or just outside the office of the Investigation Unit in a mass demonstration/rally of protest and
support for Messrs. Mario Molina and Albert Velasco, the latter having surreptitiously entered the GSIS premises;
xxx xxx xxx

That some of these employees badmouthed the security guards and the GSIS management and defiantly raised
clenched fists led by Atty. Velasco who was barred by Hearing Officer Marvin R. Gatpayat in an Order dated 24 May
2005 from appearing as counsel for Atty. Molina pursuant to Section 7 (b) (2) of R.A. 6713 otherwise known as the
Code of Conduct and Ethical Standards for Public Officials and Employees;
That respondent, together with other employees in utter contempt of CSC Resolution No. 021316, dated 11
October 2002, otherwise known as Omnibus Rules on Prohibited Concerted Mass Actions in the Public Sector
caused alarm and heightened some employees and disrupted the work at the Investigation Unit during office
hours.
Respondents Duque, Echavez, Rubio, Gracia, Layco, and Legarda, together with two others, submitted a letter-
explanation to Atty. Barbo dated June 6, 2005. Denying that there was a planned mass action, the respondents
explained that their act of going to the office of the GSIS-IU was a spontaneous reaction after learning that their
former union president was there. Aside from some of them wanting to show their support, they were interested in
that hearing as it might also affect them.
PGM Garcia then filed the above-mentioned formal charges for Grave Misconduct and/or Conduct Prejudicial to the
Best Interest of the Service against each of the respondents, all dated June 4, 2005. Respondents were again
directed to submit their written answers under oath within three (3) days from receipt thereof.5 None was filed.
On June 29, 2005, PGM Garcia issued separate but similarly worded decisions finding all seven (7) respondents
guilty of the charges and meting out the penalty of one (1) year suspension plus the accessory penalties
appurtenant thereto.
On appeal, the Civil Service Commission (CSC) found the respondents guilty of the lesser offense of Violation of
Reasonable Office Rules and Regulations and reduced the penalty to reprimand. The CSC ruled that respondents
were not denied their right to due process but there was no substantial evidence to hold them guilty of Conduct
Prejudicial to the Best Interest of the Service.
Issue:
Whether or not respondents' actions on May 27, 2005 amounted to a "prohibited concerted activity or mass
action."
Ruling:
As defined in Section 5 of CSC Resolution No. 02-1316 which serves to regulate the political rights of those in the
government service, the concerted activity or mass action proscribed must be coupled with the "intent of effecting
work stoppage or service disruption in order to realize their demands of force concession." Wearing similarly
colored shirts, attending a public hearing at the GSIS-IU office, bringing with them recording gadgets, clenching
their fists, some even badmouthing the guards and PGM Garcia, are acts not constitutive of an (i) intent to effect
work stoppage or service disruption and (ii) for the purpose of realizing their demands of force concession.
Precisely, the limitations or qualifications found in Section 5 of CSC Resolution No. 02-1316 are there to temper and
focus the application of such prohibition. Not all collective activity or mass undertaking of government employees is
prohibited. Otherwise, we would be totally depriving our brothers and sisters in the government service of their
constitutional right to freedom of expression.
Government workers, whatever their ranks, have as much right as any person in the land to voice out their
protests against what they believe to be a violation of their rights and interests. Civil Service does not deprive them
of their freedom of expression. It would be unfair to hold that by joining the government service, the members
thereof have renounced or waived this basic liberty. This freedom can be reasonably regulated only but can never
be taken away.
A review of PGM Garcia's formal charges against the respondents reveals that he himself was not even certain
whether the respondents and the rest of the twenty or so GSIS employees who were at the GSIS-IU office that
fateful day marched there or just simply appeared there simultaneously.14 Thus, the petitioners were not even
sure if the spontaneous act of each of the twenty or so GSIS employees on May 27, 2005 was a concerted one.
The report of Manager Nagtalon of the GSIS-SD which was the basis for PGM Garcia's formal charges reflected
such uncertainty.
In the recent case of GSIS v. Kapisanan ng mga Manggagawa sa GSIS,16 the Court upheld the position of
petitioner GSIS because its employees, numbering between 300 and 800 each day, staged a walkout and
participated in a mass protest or demonstration outside the GSIS for four straight days. We cannot say the same
for the 20 or so employees in this case. To equate their wearing of red shirts and going to the GSIS-IU office for
just over an hour with that four-day mass action in Kapisanan ng mga Manggagawa sa GSIS case and to punish
them in the same manner would most certainly be unfair and unjust.
Recent analogous decisions in the United States, while recognizing the government's right as an employer to lay
down certain standards of conduct, tend to lean towards a broad definition of "public concern speech" which is
protected by their First Amendment. One such case is that of Scott v. Meters.17 In said case, the New York Transit
Authority (NYTA), responsible for operation of New York City's mass transit service, issued a rule prohibiting
employees from wearing badges or buttons on their uniforms. A number of union members wore union buttons
promoting their opposition to a collective bargaining agreement. Consequently, the NYTA tried to enforce its rule
and threatened to subject these union members to discipline. The court, though recognizing the government's right
to impose reasonable restrictions, held that the NYTA's rule was "unconstitutionally overboard."
Thus, respondents' freedom of speech and of expression remains intact, and CSC's Resolution No. 02-1316 defining
what a prohibited concerted activity or mass action has only tempered or regulated these rights. Measured against
that definition, respondents' actuations did not amount to a prohibited concerted activity or mass action. The CSC
and the CA were both correct in arriving at said conclusion.
PICOP RESOURCES INC. vs. TANECA

[G.R. No. 160828, Aug. 9, 2010]
Facts:
On February 13, 2001, respondents Tañeca and 14 others filed a Complaint for unfair labor practice, illegal
dismissal and money claims against petitioner PICOP Resources , Inc. (PRI). Respondents were regular rank-and-
file employees of PRI and bona fide members of Nagkahiusang Mamumuo sa PRI Southern Philippines Federation
of Labor (NAMAPRI-SPFL), which is the collective bargaining agent for the rank-and-file employees of petitioner
PRI.
PRI has a collective bargaining agreement (CBA) with NAMAPRI-SPFL for a period of five (5) years from May 22,
1995 until May 22, 2000.
On May 16, 2000, Atty. Proculo P. Fuentes, VP of PRI sent a letter to the management of PRI demanding the
termination of employees who allegedly campaigned for, supported and signed the Petition for Certification Election
of the Federation of Free Workers Union (FFW) during the effectivity of the CBA. NAMAPRI-SPFL considered said
act of campaigning for and signing the petition for certification election of FFW as an act of disloyalty and a valid
basis for termination for a cause in accordance with its Constitution and By-Laws, and the terms and conditions of
the CBA.
On October 16, 2000, PRI served notices of termination for causes to the 31 out of the 46 employees whom
NAMAPRIL-SPFL sought to be terminated on the ground of "acts of disloyalty" committed against it. A Notice was
also served on the DOLE, Caraga Region.
Respondents alleged that none of them ever withdrew their membership or submitted to PRI any union dues and
check-off disauthorizations against NAMAPRI-SPFL. They claimed that they continue to remain on record as bona
fide members. They insisted that mere affixation of signature on such authorization was not per se an act of
disloyalty. They claimed that while it may be true that they signed the said authorization before the start of the
freedom period, the petition of FFW was only filed with the DOLE on May 18, 2000, or 58 days after the start of
the freedom period.
Respondents, likewise, argued that at the time NAMAPRI-SPFL demanded their termination, it was no longer the
bargaining representative of the rank-and-file workers of PRI, because the CBA had already expired on May 22,
2000. Hence, there could be no justification in PRI's act of dismissing respondents due to acts of disloyalty.
Respondents asserted that the act of PRI in giving in to the wishes of the Union in discharging them on the ground
of disloyalty to the Union amounted to interference with, restraint or coercion of respondents' exercise of their right
to self-organization. The act indirectly required petitioners to support and maintain their membership with
NAMAPRI-SPFL as a condition for their continued employment.
The Labor Arbiter declared the respondents' dismissal to be illegal and ordered PRI to reinstate respondents to
their former or equivalent positions without loss of seniority rights and to jointly and solidarily pay their backwages.
PRI and NAMAPRI-SPFL appealed to the NLRC which reversed the decision of the Labor Arbiter; thus, declaring the
dismissal of respondents from employment as legal. Respondents filed a motion for reconsideration, but it was
denied for lack of merit. Respondents filed a petition for certiorari under Rule 65 before the CA.
The CA reversed and set aside the assailed Resolutions of the NLRC and reinstated the Decision of the Labor
Arbiter.
Issues:
1) Whether or not an error in the interpretation of law fall within the ambit of Extraordinary Remedy of Certiorari
under Rule 65.
2) Whether or not a CBA can be given its effectivity in all its Terms and Conditions, even beyond the 5-year period
when no CBA has yet been entered into, possessing just cause to terminate on the grounds herein.
Ruling:
Issue 1:
PRI perceived an error in the mode of appeal by respondents in assailing the decision of the NLRC. It claimed that
assuming that the NLRC erred in its judgment on the legal issues, its error, if any, is not tantamount to abuse of
discretion falling within the ambit of Rule 65. WRONG.
The power of the CA to review NLRC decisions via Rule 65 or Petition for Certiorari has been settled as early as in
our decision in St. Martin Funeral Home v. NLRC.cThis Court held that the proper vehicle for such review was a
Special Civil Action for Certiorari under Rule 65 of the Rules of Court, and that this action should be filed in the CA
in strict observance of the doctrine of the hierarchy of courts.cra1aw
Issue 2: PRI argued that the dismissal of the respondents was valid and legal. It claimed to have acted in good
faith at the instance of the incumbent union pursuant to the Union Security Clause of the CBA. Citing Article 253 of
the Labor Code, PRI contends that as parties to the CBA, they are enjoined to keep the status quo and continue in
full force and effect the terms and conditions of the existing CBA during the 60-day period until a new agreement is
reached by the parties. UNTENABLE.
"Union security" is a generic term, which is applied to and comprehends "closed shop," "union shop," "maintenance
of membership," or any other form of agreement which imposes upon employees the obligation to acquire or retain
union membership as a condition affecting employment.
However, in terminating the employment of an employee by enforcing the union security clause, the employer
needs to determine and prove that: (1) the union security clause is applicable; (2) the union is requesting for the
enforcement of the union security provision in the CBA; and (3) there is sufficient evidence to support the decision
of the union to expel the employee from the union. These requisites constitute just cause for terminating an
employee based on the union security provision of the CBA.
As to the first requisite, there is no question that the CBA between PRI and respondents included a union security
clause. Following the same provision, PRI, upon written request from the Union, can indeed terminate the
employment of the employee who failed to maintain its good standing as a union member. Secondly, it is likewise
undisputed that NAMAPRI-SPFL, in two (2) occasions demanded from PRI, in their letters, to terminate the
employment of respondents due to their acts of disloyalty to the Union.
However, as to the third requisite, there is no sufficient evidence to support the decision of PRI to terminate the
employment of the respondents.
PRI alleged that respondents were terminated based on the alleged acts of disloyalty. It contends that their acts
are a violation of the Union Security Clause, as provided in their CBA.UNCONVINCED.
The mere signing of the authorization in support of the Petition before the "freedom period," is not sufficient
ground to terminate the employment. Nothing in the records would show that respondents failed to maintain their
membership in good standing in the Union. Respondents did not resign or withdraw their membership from the
Union to which they belong. Respondents continued to pay their union dues and never joined the FFW.
An "authorization letter to file a petition for certification election" is different from an actual "Petition for
Certification Election." Likewise, as per records, it was clear that the actual Petition for Certification Election of FFW
was filed within the ambit of the freedom period. Strictly speaking, what is prohibited is the filing of a petition for
certification election outside the 60-day freedom period.
It can be said that while it is incumbent for the employer to continue to recognize the majority status of the
bargaining agent even after the expiration of the freedom period, they could only do so when no petition for
certification election was filed. The reason is, with a pending petition for certification, any such agreement entered
into by management with a labor organization is fraught with the risk that such a labor union may not be chosen
thereafter as the collective bargaining representative. The provision for statusquo is conditioned on the fact that
no certification election was filed during the freedom period.
Time and again, we have ruled that we adhere to the policy of enhancing the welfare of the workers. Their
freedom to choose who should be their bargaining representative is of paramount importance.
We will emphasize anew that the power to dismiss is a normal prerogative of the employer, but with limitations.
The employer is bound to exercise caution in terminating the services of his employees especially so when it is
made upon the request of a labor union pursuant to the CBA. Dismissals must not be arbitrary and capricious. Due
process must be observed in dismissing an employee, because it affects not only his position but also his means of
livelihood. Employers should, therefore, respect and protect the rights of their employees, which include the right
to labor.
INSULAR HOTEL EMPLOYEES UNION-NFL vs. WATERFRONT INSULAR HOTEL-DAVAO

[G.R. No. 174040-41, Sept. 22, 2010]
Facts:
On November 6, 2000, respondent sent the DOLE Region XI, a Notice of Suspension of Operations, notifying the
same that it will suspend its operations for a period of six months due to severe and serious business losses. In
said notice, respondent assured the DOLE that if the company could not resume its operations within the six-month
period, the company would pay the affected employees all the benefits legally due to them.
During the period of the suspension, Domy R. Rojas, President of Davao Insular Hotel Free Employees Union
(DIHFEU-NFL), the recognized labor organization in Waterfront Davao, sent respondent a number of letters asking
management to reconsider its decision. The letters signified, among others, the gesture of support of the union for
the economic solutions of the company, which included, suspension of the CBA for ten years (no strike, no lock-out
shall be enforced); payment of benefits be on a staggered basis or as available; overtime hours rendered shall be
off-set as practiced; reduce leave benefits; emergency leave and birthday leave be waived, and multi-tasking of
employees, among others.
After series of negotiations, respondent Hotel and DIHFEU-NFL signed a Memorandum of Agreement wherein Hotel
agreed to re-open subject to certain concessions. Accordingly, Hotel downsized its manpower structure to 100
rank-and-file employees and a new pay scale was also prepared. The retained employees individually signed a
―Reconfirmation of Employment‖, which embodied the new terms and conditions of their continued employment.
On June 15, 2001, respondent resumed its business operations.
On August 22, 2002, certain Darius Joves and Debbie Planas, claiming to be local officers of the National
Federation of Labor (NFL), filed a Notice of Mediation before the NCMB-Regional Office stating that the Union
involved was ―DARIUS JOVES/DEBBIE PLANAS ET. AL, National Federation of Labor.‖ The issue raised in said
Notice was the ―Diminution of wages and other benefits through unlawful Memorandum of Agreement.‖
The NCMB called Joves and Hotel to a conference to a possibility of settling the conflict. In the said conference,
Hotel and petitioner IHEU-NFL, represented by Joves, signed a Submission Agreement wherein they chose Alfredo
C. Olvida to act as voluntary arbitrator. Submitted for the resolution of Olvida was the determination of WON there
was a diminution of wages and other benefits through an unlawful MOA. In support of his authority to file the
complaint, Joves, assisted by Atty. Danilo Cullo (Cullo), presented several Special Powers of Attorney (SPA) which
were, however, undated and unnotarized.
Hotel filed with the NCMB a Manifestation with Motion for a Second Preliminary Conference, raising the following
grounds: (1) The persons who filed the instant complaint in the name of the Insular Hotel Employees Union-NFL
have no authority to represent the Union; (2) The individuals who executed the special powers of attorney in favor
of the person who filed the instant complaint have no standing to cause the filing of the instant complaint; and
(3) The existence of an intra-union dispute renders the filing of the instant case premature.
On September 16, 2002, a second preliminary conference was conducted in the NCMB, where Cullo denied any
existence of an intra-union dispute among the members of the union. Cullo, however, confirmed that the case was
filed not by the IHEU-NFL but by the NFL. When asked to present his authority from NFL, Cullo admitted that the
case was, in fact, filed by individual employees named in the SPAs. The hearing officer directed both parties to
elevate the aforementioned issues to AVA Olvida.
The case was docketed and referred to Olvida. Respondent again raised its objections, arguing that the persons
who signed the complaint were not the authorized representatives of the Union nor were they parties to the MOA.
AVA Olvida directed respondent to file a formal motion to withdraw its submission to voluntary arbitration.
Respondent filed its Motion to Withdraw. Cullo then filed an Opposition.
In said Opposition, Cullo reiterated that the complainants were not representing the union but filing the complaint
through their appointed attorneys-in-fact to assert their individual rights as workers who are entitled to the benefits
granted by law and stipulated in the collective bargaining agreement.
On March 18, 2003, AVA Olvida ruled that respondent was correct when it raised its objection to NFL as proper
party-complainant. The proper party-complainant is INSULAR HOTEL EMPLOYEES UNION-NFL, the recognized and
incumbent bargaining agent of the rank-and-file employees of the respondent hotel. In the submission agreement
of the parties dated August 29, 2002, the party complainant written is INSULAR HOTEL EMPLOYEES UNION-NFL
and not the NATIONAL FEDERATION OF LABOR and 79 other members. However, since the NFL is the mother
federation of the local union, and signatory to the existing CBA, it can represent the union, the officers, the
members or union and officers or members, as the case may be, in all stages of proceedings in courts or
administrative bodies provided that the issue of the case will involve labor-management relationship like in the case
at bar.
Later, respondent filed a Motion for Inhibition alleging AVA Olvida's bias and prejudice towards the cause of the
employees. AVA Olvida voluntarily inhibited himself out of ― delicadeza‖ and ordered the remand of the case to the
NCMB. The NCMB then required the parties to appear before the conciliator for the selection of a new voluntary
arbitrator. Respondent, however, maintained its stand that the NCMB had no jurisdiction over the case.
Consequently, at the instance of Cullo, the NCMB approved ex parte the selection of AVA Montejo as the new
voluntary arbitrator.
On April 5, 2004, AVA Montejo rendered a Decision ruling in favor of Cullo, declaring the Memorandum of
Agreement in question as invalid as it is contrary to law and public policy; declaring that there is a diminution of
the wages and other benefits of the Union members and officers under the said invalid MOA, among others.
Both parties appealed the Decision of AVA Montejo to the CA. Cullo only assailed the Decision in so far as it did not
categorically order respondent to pay the covered workers their differentials in wages reckoned from the effectivity
of the MOA up to the actual reinstatement of the reduced wages and benefits. Respondent, for its part, questioned
among others the jurisdiction of the NCMB. Respondent maintained that the MOA it had entered into with the
officers of the Union was valid. Both cases were consolidated by the CA.
CA rendered a ruling in favor of respondent Hotel. Aggrieved, Cullo filed a Motion for Reconsideration, which was,
however, denied.
Issues:
WON the Accredited Voluntary Arbitrator has no jurisdiction over the case, simply because the Notice of Mediation
does not mention the name of the local union but only the affiliate federation.
WON the diminution of the benefits enjoyed by the employees is allowable.
Ruling:
Cullo contends that the CA committed error when it ruled that the voluntary arbitrator had no jurisdiction over the
case simply because the Notice of Mediation did not state the name of the local union thereby disregarding the
Submission Agreement which states the names of local union as IHEU-NFL.
While it is undisputed that a submission agreement was signed by respondent and ―IHEU-NFL,‖ represented by
Joves and Cullo, there are two circumstances which affect its validity: first, the Notice of Mediation was filed by a
party who had no authority to do so; second, that respondent had persistently objected questioning the authority
of Joves, Cullo and the individual members of the Union to file the complaint before the NCMB.
Who may file a notice or declare a strike or lockout or request preventive mediation. -
Any certified or duly recognized bargaining representativemay file a notice or declare a strike or
request for preventive mediation in cases of bargaining deadlocks and unfair labor practices.
It is clear that only a certified or duly recognized bargaining agent may file a notice or request for preventive
mediation. It is curious that even Cullo himself admitted, in a number of pleadings, that the case was filed not by
the Union but by individual members thereof. Clearly, therefore, the NCMB had no jurisdiction to entertain the
notice filed before it.
A local union does not owe its existence to the federation with which it is affiliated. It is a separate and distinct
voluntary association owing its creation to the will of its members. Mere affiliation does not divest the local
union of its own personality, neither does it give the mother federation the license to act
independently of the local union. It only gives rise to a contract of agency, where the former acts in
representation of the latter. Hence, local unions are considered principals while the federation is deemed to be
merely their agent.
We hold that the voluntary arbitrator had no jurisdiction over the case. While we commend NFL's zealousness in
protecting the rights of lowly workers, We cannot, however, allow it to go beyond what it is empowered to do.
Anent the second issue, the same is again without merit.
Clearly, the prohibition against elimination or diminution of benefits set out in Article 100 of the Labor Code is
specifically concerned with benefits already enjoyed at the time of the promulgation of the Labor Code. Article 100
does not, in other words, purport to apply to situations arising after the promulgation date of the Labor Code.
A CBA is ―a contract executed upon request of either the employer or the exclusive bargaining representative
incorporating the agreement reached after negotiations with respect to wages, hours of work and all other terms
and conditions of employment, including proposals for adjusting any grievances or questions arising under such
agreement.‖ The primary purpose of a CBA is the stabilization of labor-management relations in order to create a
climate of a sound and stable industrial peace. In construing a CBA, the courts must be practical and realistic and
give due consideration to the context in which it is negotiated and the purpose which it is intended to serve. The
right to free collective bargaining, after all, includes the right to suspend it.
Stipulated in each Reconfirmation of Employment were the new salary and benefits scheme. In addition, it bears
to stress that specific provisions of the new contract also made reference to the MOA. Thus, the individual
members of the union cannot feign knowledge of the execution of the MOA. Each contract was freely entered into
and there is no indication that the same was attended by fraud, misrepresentation or duress. To this Court's mind,
that signing should, therefore, be deemed an implied ratification by the Union members of the MOA. It is
iniquitous to receive benefits from a CBA and later on disclaim its validity.
While the terms of the MOA undoubtedly reduced the salaries and certain benefits previously enjoyed by the
members of the Union, it cannot escape this Court's attention that it was the execution of the MOA which paved
the way for the re-opening of the hotel, notwithstanding its financial distress. More importantly, the execution of
the MOA allowed respondents to keep their jobs.
Withal, while the scales of justice usually tilt in favor of labor, the peculiar circumstances herein prevent this Court
from applying the same in the instant petition. Even if our laws endeavor to give life to the constitutional policy on
social justice and on the protection of labor, it does not mean that every labor dispute will be decided in favor of
the workers. The law also recognizes that management has rights which are also entitled to respect and
enforcement in the interest of fair play.
CIRTEX EMPLOYEES LABOR UNION-FFW vs. CIRTEX ELECTRONICS INC.

[G.R. No. 190515, Nov. 15, 2010]
Facts:
Cirtek Electronics, Inc. (respondent), an electronics and semi-conductor firm situated inside the Laguna
Technopark, had an existing CBA with Cirtek Employees Labor Union-Federation of Free Workers (petitioner) for
the period January 1, 2001 up to December 31, 2005. Prior to the 3rd year of the CBA, the parties renegotiated its
economic provisions but failed to reach a settlement, particularly on the issue of wage increases. Petitioner
thereupon declared a bargaining deadlock and filed a Notice of Strike with the NCMB-Regional Office on April 26,
2004. Respondent, upon the other hand, filed a Notice of Lockout on June 16, 2004.
While the conciliation proceedings were ongoing, respondent placed seven union officers including the President, a
Vice President, the Secretary and the Chairman of the Board of Directors under preventive suspension for allegedly
spearheading a boycott of overtime work. The officers were eventually dismissed from employment, prompting
petitioner to file another Notice of Strike which was, after conciliation meetings, converted to a voluntary
arbitration case. The dismissal of the officers was later found to be legal, hence, petitioner appealed.
In the meantime, as amicable settlement of the CBA was deadlocked, petitioner went on strike on June 20, 2005.
By Order dated June 23, 2005, the Secretary of Labor assumed jurisdiction over the controversy and issued a
Return to Work Order which was complied with.
Before the SOLE could rule on the controversy, respondent created a Labor Management Council (LMC) through
which it concluded with the remaining officers of petitioner a Memorandum of Agreement providing for daily wage
increases of P6.00 per day effective January 1, 2004 and P9.00 per day effective January 1, 2005. Petitioner
submitted the MOA via Motion and Manifestation to the Secretary of Labor, alleging that the remaining officers
signed the MOA under respondent‘s assurance that should the Secretary order a higher award of wage increase,
respondent would comply.
By Orderdated March 16, 2006, the Secretary of Labor resolved the CBA deadlock by awarding a wage increase of
from P6.00 to P10.00 per day effective January 1, 2004 and from P9.00 to P15.00 per day effective January 1,
2005, and adopting all other benefits as embodied in the MOA.
Respondent moved for a reconsideration of the Decision. Reconsideration of the Decision was denied by
Resolution of August 12, 2008, hence, respondent filed a petition for certiorari before the Court of Appeals.
The CA favored respondent.
Issues:
Whether or not the SOLE is authorized to give an award higher than that agreed upon in the MOA;
Whether or not the MOA was entered into and ratified by the remaining officers of petitioner under the condition,
which was not incorporated in the MOA, that respondent would honor the SOLE‘s award in the event that it is
higher.
Ruling:
The Court resolves both issues in the affirmative. It is well-settled that the SOLE, in the exercise of his power to
assume jurisdiction under Art. 263 (g)of the Labor Code, may resolve all issues involved in the controversy
including the award of wage increases and benefits. While an arbitral award cannot per se be categorized as an
agreement voluntarily entered into by the parties because it requires the intervention and imposing power of the
State thru the Secretary of Labor when he assumes jurisdiction, the arbitral award can be considered an
approximation of a collective bargaining agreement which would otherwise have been entered into by the parties,
hence, it has the force and effect of a valid contract obligation.
That the arbitral award was higher than that which was purportedly agreed upon in the MOA is of no moment. For
the SOLE, in resolving the CBA deadlock, is not limited to considering the MOA as basis in computing the wage
increases. He could, as he did, consider the financial documents submitted by respondent as well as the parties‘
bargaining history and respondent‘s financial outlook and improvements as stated in its website.
While a contract constitutes the law between the parties, this is so in the present case with respect to the CBA, not
to the MOA in which even the union‘s signatories had expressed reservations thereto. But even assuming arguendo
that the MOA is treated as a new CBA, since it is imbued with public interest, it must be construed liberally and
yield to the common good.
While the terms and conditions of a CBA constitute the law between the parties, it is not, however, an ordinary
contract to which is applied the principles of law governing ordinary contracts. A CBA, as a labor contract within the
contemplation of Article 1700 of the Civil Code of the Philippines which governs the relations between labor and
capital, is not merely contractual in nature but impressed with public interest, thus, it must yield to the common
good. As such, it must be construed liberally rather than narrowly and technically, and the courts must place a
practical and realistic construction upon it, giving due consideration to the context in which it is negotiated and
purpose which it is intended to serve.
The petition is GRANTED. The Decisions of the Court of Appeals are REVERSED and SET ASIDE and the Order
dated March 16, 2006 and Resolution dated August 12, 2008 of the Secretary of Labor are REINSTATED.
SOLIDBANK CORP. vs. GAMIER ET AL

[G.R. No. 159461, Nov. 15, 2010]
Facts:
Sometime in October 1999, petitioner Solidbank and respondent Solidbank Employees‘ Union (Union) were set to
renegotiate the economic provisions of their 1997-2001 Collective Bargaining Agreement (CBA) to cover the
remaining two years thereof. Negotiations commenced on November 17, 1999 but seeing that an agreement was
unlikely, the Union declared a deadlock on December 22, 1999 and filed a Notice of Strike on December 29, 1999.
Sensing the impending strike, the Secretary of Labor and Employment ―assumed jurisdiction‖ over the labor
dispute, pursuant to Article 263 (g) of the Labor Code, as amended. The assumption order dated January 18, 2000
directed the parties "to cease and desist from committing any and all acts that might exacerbate the situation.
In his Order dated March 24, 2000, Secretary Laguesma resolved all economic and non-economic issues submitted
by the parties.
Not satisfied with the Secretary‘s ruling, on April 3, 2000, the union officers and members decided to protest the
same by holding a rally in front of the SOLE office and the bank‘s head offices, simultaneous to their filing of MR of
the March 24, 2000 order. An overwhelming majority of the employees, including the respondents, joined the
―mass leave‖ and ―protest action‖. The bank‘s provincial branches in Cebu, Iloilo, Bacolod and Naga followed suit
and "boycotted regular work." As a result of the employees‘ concerted actions, Solidbank‘s business operations
were paralyzed. The protest action lasted for three days, from April 3 until April 5, 2000.
The president of Solidbank issued a memorandum addressed to all employees to show cause why they should not
be dismissed for participating in an illegal strike. On April 5, 2000, Vistan (president of Solidbank) issued another
memorandum, this time declaring that the bank is prepared to take back employees who will report for work
starting April 6, 2000 "provided these employees were/are not part of those who led or instigated or coerced their
co-employees into participating in this illegal act." Out of the 712 employees who took part in the three-day work
boycott, a total of 513 returned to work and were accepted by the bank. The remaining 199 employees insisted on
defying Vistan‘s directive, which included herein respondents Ernesto U. Gamier, Elena R. Condevillamar, Janice L.
Arriola and Ophelia C. De Guzman.
Thus, they were dismissed. Respondents Gamier, Condevillamar, Arriola and De Guzman filed separate complaints
for illegal dismissal, moral and exemplary damages and attorney‘s fees. Respondent Union joined by the 129
dismissed employees filed a separate suit against petitioners for illegal dismissal, unfair labor practice and
damages.
Issues:
(1) whether the protest rally and concerted work abandonment/boycott staged by the respondents violated the
Order dated January 18, 2000 of the Secretary of Labor;
(2) whether the respondents were validly terminated; and
(3) whether the respondents are entitled to separation pay or financial assistance.
Ruling:
I. Article 212 of the Labor Code, as amended, defines strike as any temporary stoppage of work by the
concerted action of employees as a result of an industrial or labor dispute. A labor dispute includes any controversy
or matter concerning terms and conditions of employment or the association or representation of persons in
negotiating, fixing, maintaining, changing or arranging the terms and conditions of employment, regardless of
whether or not the disputants stand in the proximate relation of employers and employees. The term "strike" shall
comprise not only concerted work stoppages, but also slowdowns, mass leaves, sitdowns, attempts to damage,
destroy or sabotage plant equipment and facilities and similar activities. Thus, the fact that the conventional term
"strike" was not used by the striking employees to describe their common course of action is inconsequential, since
the substance of the situation, and not its appearance, will be deemed to be controlling.
After a thorough review of the records, we hold that the CA patently erred in concluding that the concerted mass
actions staged by respondents cannot be considered a strike but a legitimate exercise of the respondents‘ right to
express their dissatisfaction with the Secretary‘s resolution of the economic issues in the deadlocked CBA
negotiations with petitioners. It must be stressed that the concerted action of the respondents was not limited to
the protest rally infront of the DOLE Office on April 3, 2000. Respondent Union had also picketed the Head Office
and Paseo de Roxas Branch. About 712 employees, including those in the provincial branches, boycotted and
absented themselves from work in a concerted fashion for three continuous days that virtually paralyzed the
employer‘s banking operations. Considering that these mass actions stemmed from a bargaining deadlock and an
order of assumption of jurisdiction had already been issued by the Secretary of Labor to avert an impending strike,
there is no doubt that the concerted work abandonment/boycott was the result of a labor dispute.
The right to strike, while constitutionally recognized, is not without legal constrictions. Article 264 (a) of the Labor
Code, as amended, provides:
Art. 264. Prohibited activities. – (a) x x x

No strike or lockout shall be declared after assumption of jurisdiction by the President or the Secretary or after
certification or submission of the dispute to compulsory or voluntary arbitration or during the pendency of cases
involving the same grounds for the strike or lockout.
The Court has consistently ruled that once the Secretary of Labor assumes jurisdiction over a labor dispute, such
jurisdiction should not be interfered with by the application of the coercive processes of a strike or lockout. A strike
that is undertaken despite the issuance by the Secretary of Labor of an assumption order and/or certification is a
prohibited activity and thus illegal.
Article 264 (a) of the Labor Code, as amended, also considers it a prohibited activity to declare a strike "during the
pendency of cases involving the same grounds for the same strike." There is no dispute that when respondents
conducted their mass actions on April 3 to 6, 2000, the proceedings before the Secretary of Labor were still
pending as both parties filed motions for reconsideration of the March 24, 2000 Order. Clearly, respondents
knowingly violated the aforesaid provision by holding a strike in the guise of mass demonstration simultaneous with
concerted work abandonment/boycott.
II. The court also ruled that notwithstanding the illegality of the strike, they cannot sanction petitioner‘s act of
indiscriminately terminating the services of individual respondents who admitted joining the mass actions and who
have refused to comply with the offer of the management to report back to work.
The court reiterates the distinction between the liabilities of a union officer and a union member when they
participate in an illegal strike, thus:
Art. 264. Prohibited activities.— x x x

xxxx
Any worker whose employment has been terminated as a consequence of an unlawful lockout shall be entitled to
reinstatement with full back wages. Any union officer who knowingly participates in an illegal strike and any worker
or union officer who knowingly participates in the commission of illegal acts during a strike may be declared to
have lost his employment status: Provided, That mere participation of a worker in a lawful strike shall not
constitute sufficient ground for termination of his employment, even if a replacement had been hired by the
employer during such lawful strike.
xxxx
The foregoing shows that the law makes a distinction between union officers and members. For knowingly
participating in an illegal strike or participating in the commission of illegal acts during a strike, the law provides
that a union officer may be terminated from employment. The law grants the employer the option of declaring a
union officer who participated in an illegal strike as having lost his employment. It possesses the right and
prerogative to terminate the union officers from service.
However, a worker merely participating in an illegal strike may not be terminated from employment. It is only
when he commits illegal acts during a strike that he may be declared to have lost employment status. We have
held that the responsibility of union officers, as main players in an illegal strike, is greater than that of the
members and, therefore, limiting the penalty of dismissal only for the former for participation in an illegal strike is
in order. Hence, with respect to respondents who are union officers, the validity of their termination by petitioners
cannot be questioned. Being fully aware that the proceedings before the Secretary of Labor were still pending as in
fact they filed a motion for reconsideration of the March 24, 2000 Order, they cannot invoke good faith as a
defense.
FADRIQUELAN ET AL. vs. MONTEREY FOOD CORP

[G.R. No. 178409, June 8, 2011]
Facts:
On April 30, 2002 the three-year collective bargaining agreement or CBA between the union Bukluran ng
Manggagawa sa Monterey-Ilaw at Buklod ng Manggagawa (the union) and Monterey Foods Corporation (the
company) expired. On March 28, 2003 after the negotiation for a new CBA reached a deadlock, the union filed a
notice of strike with the National Conciliation and Mediation Board (NCMB). To head off the strike, on April 30,
2003 the company filed with the DOLE a petition for assumption of jurisdiction over the dispute in view of its dire
effects on the meat industry. In an Order dated May 12, 2003, the DOLE Secretary assumed jurisdiction over the
dispute and enjoined the union from holding any strike. It also directed the union and the company to desist from
taking any action that may aggravate the situation.
On May 21, 2003 the union filed a second notice of strike before the NCMB on the alleged ground that the
company committed unfair labor practices. On June 10, 2003 the company sent notices to the union officers,
charging them with intentional acts of slowdown. Six days later or on June 16 the company sent new notices to the
union officers, informing them of their termination from work for defying the DOLE Secretary‘s assumption order.
Issues:
1. Whether or not the CA erred in holding that slowdowns actually transpired at the company‘s farms; and
2. Whether or not the CA erred in holding that union officers committed illegal acts that warranted their dismissal
from work.
Held:
First. The law is explicit: no strike shall be declared after the Secretary of Labor has assumed jurisdiction over a
labor dispute. A strike conducted after such assumption is illegal and any union officer who knowingly participates
in the same may be declared as having lost his employment. Here, what is involved is a slowdown strike. Unlike
other forms of strike, the employees involved in a slowdown do not walk out of their jobs to hurt the company.
They need only to stop work or reduce the rate of their work while generally remaining in their assigned post.
The union of course argues that it merely held assemblies to inform members of the developments in the CBA
negotiation, not protest demonstrations over it. But as the CA correctly observed, if the meetings had really been
for the stated reason, why did the union officers and members from separate company farms choose to start and
end their meetings at the same time and on the same day? And if they did not intend a slowdown, why did they
not hold their meetings after work.
Second. A distinction exists, however, between the ordinary workers‘ liability for illegal strike and that of the union
officers who participated in it. The ordinary worker cannot be terminated for merely participating in the strike.
There must be proof that he committed illegal acts during its conduct. On the other hand, a union officer can be
terminated upon mere proof that he knowingly participated in the illegal strike.
In termination cases, the dismissed employee is not required to prove his innocence of the charges against him.
The burden of proof rests upon the employer to show that the employee‘s dismissal was for just cause. The
employer‘s failure to do so means that the dismissal was not justified. Here, the company failed to show that all 17
union officers deserved to be dismissed.
BARAIRO vs. OFFICE OF THE PRESIDENT

[G.R. No. 189314, June 15, 2011]
Facts:
Miguel Barairo (petitioner) was hired by respondent MST Marine Services (Phils.) Inc., (MST) for its principal, TSM
International, Ltd., as Chief Mate of the vessel Maritina, for a contract period of six months. He boarded the vessel
and discharged his duties on July 23, 2004 but was relievedon August 28, 2004 ostensibly for transfer to another
vessel, Solar. Petitioner thus disembarked in Manila on August 29. 2004.
Petitioner was later to claim that he was not paid the promised "stand-by fee" in lieu of salary that he was to
receive while awaiting transfer to another vessel as in fact the transfer never materialized.
On October 20, 2004, petitioner signed a new Contract of Employmentfor a six-month deployment as Chief Mate of
M/T Haruna vessel. He was paid a 1-month ―stand-by fee‖ in connection with the Maritina contract. Petitioner
boarded the M/T Haruna on October 31, 2004 then he disembarked a week later as MST claimed that his boarding
of M/T Haruna was a "sea trial" which, MST maintains, was priorly made known to him on a "stand-by fee‖. MST
soon informed petitioner that he would be redeployed to the M/T Haruna on November 30, 2004, but petitioner
refused, prompting MST to file a complaint for breach of contract against him before the Philippine Overseas
Employment Administration (POEA).
Petitioner claimed, however, that he was placed on "forced vacation‖ when he was made to disembark from the
M/T Haruna, and that not wanting to experience a repetition of the previous "termination" of his employment
aboard the Maritina, he refused to be redeployed to the M/T Haruna.
However, the petitioner was found guilty of the said subject matter of the complaint thus was penalized by the
POEA Administrator with one year suspension from overseas deployment. Petitioner appealed said order of the
POEA to the Secretary of Labor, who noting that it was petitioner's first offense, modified the POEA Order by
shortening the period of suspension from one year to six months.
Petitioner then appealed the order to the Office of the President (OP), who in turn dismissed the case for on the
ground of lack of jurisdiction.
Issue:
Whether or not the OP‘s dismissal of the case was proper.
Ruling:
It was proper because for this case the appropriate remedy to question the decisions or orders of the Secretary of
Labor is via Petition for Certiorari under Rule 65 not via an appeal to the OP. For appeals to the OP in labor cases
have indeed been eliminated, except those involving national interest over which the President may assume
jurisdiction. The rationale behind this development is grounded on the Doctrine of Qualified Political Agency.
Also, the Petitioner's appeal of the Secretary of Labor's Decision to the Office of the President did not toll the
running of the period, hence, the assailed Decisions of the Secretary of Labor are deemed to have attained finality.
The Court concurred with the POEA Administrator and the Secretary of Labor that petitioner's refusal to board the
M/T Haruna constituted unjustified breach of his contract of employment. That petitioner believed that respondent
company violated his rights when the period of his earlier Maritina contract was not followed and his "stand-by
fees" were not fully paid did not justify his refusal to abide by the valid and existing Haruna contract requiring him
to serve aboard M/T Haruna. For, as noted in the assailed DOLE Order, "if petitioner's rights have been violated as
he claims, he has various remedies under the contract which he did not avail of.
Parenthetically, the Undersecretary of Labor declared that the real reason petitioner refused to re-join Haruna is
that he left the Philippines on to join MT Adriatiki, a vessel of another maiming agency, which declaration petitioner
has not refuted.
MAGDALA MULTIPURPOSE & LIVELIHOOD COOPERATIVE vs. KILUSANG MANGGAGAWA NG LGS .

[G.R. No. 191138-39, October 19, 2011]
Facts:
KMLMS filed a notice of strike on March 5, 2002 and conducted its strike-vote on April 8, 2002. However, KMLMS
only acquired legal personality when its registration as an independent labor organization was granted on April 9,
2002 by the Department of Labor and Employment.
On April 19, 2002, it became officially affiliated as a local chapter of the Pambansang Kaisahan ng Manggagawang
Pilipino when its application was granted by the Bureau of Labor Relations.
Thereafter, on May 6, 2002, KMLMS — now a legitimate labor organization (LLO) — staged a strike where several
prohibited and illegal acts were committed by its participating members.
On the ground of lack of valid notice of strike, ineffective conduct of a strike-vote and commission of prohibited
and illegal acts, petitioners filed their Petition to Declare the Strike of May 6, 2002 Illegal before the NLRC Regional
Arbitration Board (RAB) No. IV in Quezon City.
Ruling of Labor Arbiter

The May 6, 2002 strike is illegal and 41 workers are declared to have lost their employment.
Ruling of the NLRC

Affirmed the Labor Arbiter‘s decision but declared additional seven workers to have lost their employment
Ruling of the CA
Affirmed the decision of the NLRC.
Issues:
(1) WON the strike was illegal
(2) WON the union members are validly terminated from their employment.
Ruling:
(1)
There is no question that the May 6, 2002 strike was illegal, first, because when KMLMS filed the notice of strike on
March 5 or 14, 2002, it had not yet acquired legal personality and, thus, could not legally represent the eventual
union and its members. And second, similarly when KMLMS conducted the strike-vote on April 8, 2002, there was
still no union to speak of, since KMLMS only acquired legal personality as an independent LLO only on April 9, 2002
or the day after it conducted the strike-vote. These factual findings are undisputed and borne out by the records.
Consequently, the mandatory notice of strike and the conduct of the strike-vote report were ineffective for having
been filed and conducted before KMLMS acquired legal personality as an LLO, violating Art. 263 (c), (d) and (f) of
the Labor Code and Rule XXII, Book V of the Omnibus Rules Implementing the Labor Code.
Art. 263(c):
Controversy What to File Who may File Where to Period of Notice
File
Bargaining Notice of Strike Duly Certified or Recognized Ministry 30 days before the
Deadlock Bargaining Agent intended date of
strike
Notice of Lockout Employer Ministry 30 days before the
intended lockout
Unfair Labor Notice of Strike Duly Certified or Recognized Ministry 15 days before the
Practice Bargaining Agent intended date of
In absence of the above: strike
Any Legitimate Labor in
behalf of its members
On the other hand, Rule XXII, Book V of the Omnibus Rules Implementing the Labor Code likewise pertinently
provides:
RULE XXII
CONCILIATION, STRIKES AND LOCKOUTS
xxx xxx xxx
SEC. 6.Who may declare a strike or lockout. — Any certified or duly recognized bargaining representative may
declare a strike in cases of bargaining deadlocks and unfair labor practices. The employer may declare a lockout in
the same cases. In the absence of a certified or duly recognized bargaining representative, any legitimate labor
organization in the establishment may declare a strike but only on grounds of unfair labor practice.
It is, thus, clear that the filing of the notice of strike and the conduct of the strike-vote by KMLMS did not comply
with the aforequoted mandatory requirements of law and its implementing rules. Consequently, the May 6, 2002
strike is illegal.
(2)
There is likewise no dispute that when the May 6, 2002 illegal strike was conducted, the members of respondent
KMLMS committed prohibited and illegal acts which doubly constituted the strike illegal.
Art. 264. Prohibited Acts:

(a) Any union officer who knowingly participates in an illegal strike and any worker or union officer
who knowingly participates in the commission of illegal acts during a strike may be declared to have
lost his employment status: Provided, That mere participation of a worker in a lawful strike shall not constitute
sufficient ground for termination of his employment, even if a replacement had been hired by the employer during
such lawful strike.
(b) No person engaged in picketing shall commit any act of violence, coercion or intimidation or
obstruct the free ingress to or egress from the employer's premises for lawful purposes, or obstruct
public thoroughfares.
Here, the striking workers committed acts of (1) interference by obstructing the free ingress to or egress from
petitioners' compound and (2) coercion and intimidation.
Art. 264 of the Code present a substantial distinction of the consequences of an illegal strike between union officers
and mere members of the union:
Persons Involved Ground for Termination
Union Officers Knowingly participating in an illegal strike
Union Members Committed prohibited and illegal acts during the strike and there is substantial evidence or
proof of their participation
(mere participation is not a ground)
A total of 34 union members have been declared to have lost their employment due to their commission of
prohibited and illegal acts during the illegal strike of May 6, 2002, 27 of which are those from the judgment of the
Labor Arbiter.
72 additional union members are however found by the court to have committed illegal acts to which petitioners
have substantially proven their identity. There was patent misappreciation of evidence both by the LA and the
NLRC, and was not corrected by the CA, in having a view that there is no substantial proof of the identity of the
other 72 striking union members who committed prohibited and illegal activities.
Bank of the Phils islands vs. BPI Employees Union-Davao Chapter Federation of Unions in BPI
Unibank
GR No. 164301, En banc, Res. October 19, 2011; see Main Decision of August 18, 2010
FACTS:
In 2000, Far East Bank and trust Company (FEBTC) merged with Bank of the Philippine Islands. Petitioner had a
Union Shop agreement with respondent BPI Employees Union-Davao Chapter-Federation of Unions in BPI Unibank
(the Union).Pursuant to the merger, respondent requested BPI to terminate the employment of those new
employees from FEBTC who did not join the union.
BPI refused to undertake such action and brought the controversy before a voluntary arbitrator. Although BPI won
the initial battle at the Voluntary Arbitrator level, BPIs position was rejected by the Court of Appeals which ruled
that the Voluntary Arbitrators interpretation of the Union Shop Clause was at war with the spirit and rationale why
the Labor Code allows the existence of such provision.
This was followed and affirmation by the Supreme Court of the CA decision holding that former employees of the
Far East Bank and Trust Company (FEBTC) "absorbed" by BPI pursuant to the two banks merger. The absorbed
employees were covered by the Union Shop Clause in the then existing collective bargaining agreement (CBA)of
BPI with respondent BPI Employees Union-Davao Chapter-Federation of Unions in BPI Unibank (the Union).
Petitioners, despite the August 2010 decision moved for a Motion for reconsideration of the decision.
ISSUE:
Whether or not the "absorbed" FEBTC employees fell within the definition of "new employees" under the Union
Shop Clause, such that they may be required to join respondent union or suffer termination upon request by the
union.
HELD:
The court agreed with Justice Brions view that it is more in keeping with the dictates of social justice
and the State policy of according full protection to labor to deem employment contracts as
automatically assumed by the surviving corporation in a merger, without break in the continuity of
their employment, and even in the absence of an express stipulation in the articles of merger or the
merger plan.
By upholding the automatic assumption of the non-surviving corporations existing employment contracts by the
surviving corporation in a merger, the Court strengthens judicial protection of the right to security of tenure of
employees affected by a merger and avoid confusion regarding the status of their various benefits.However, it shall
be noted that nothing in the Resolution shall impair the right of an employer to terminate the employment of the
absorbed employees for a lawful or authorized cause or the right of such an employee to resign, retire or otherwise
sever his employment, whether before or after the merger, subjectto existing contractual obligations.
Although by virtue of the merger BPI steps into the shoes of FEBTC as a successor employer as if the former had
been the employer of the latters employees from the beginning it must be emphasized that, in reality, the legal
consequences of the merger only occur at a specific date,i.e.,upon its effectivity which is the date of approval of
the merger by the SEC.Thus, the court observed in the Decision that BPI and FEBTC stipulated in the Articles of
Merger that they will both continue their respective business operations until the SEC issues the certificate of
merger and in the event no such certificate is issued, they shall hold each other blameless for the non-
consummation of the merger.
In other words, the obligation of BPI to pay the salaries and benefits of the former FEBTC employees and its right
of discipline and control over them only arose with the effectivity of the merger.Concomitantly, the obligation of
former FEBTC employees to render service to BPI and their right to receive benefits from the latter also arose upon
the effectivity of the merger.What is material is that all of these legal consequences of the merger took place
during the life of an existing and valid CBA between BPI and the Union wherein they have mutually consented to
include a Union Shop Clause.
ABARIA ET AL. vs. NLRC ET AL.

[G.R. Nos. 154113, 187778, 187861 & 196156, December 7, 2011]
Facts:
The consolidated cases involve the legality of mass termination of hospital employees who participated in strike
and picketing activities.
Metro Cebu Community Hospital, Inc. (MCCHI), presently known as the Visayas Community Medical Center
(VCMC), is a non-stock, non-profit corporation organized under the laws of the Republic of the Philippines. It
operates the Metro Cebu Community Hospital (MCCH), a tertiary medical institution located at Osmeña Boulevard,
Cebu City. MCCH is owned by the United Church of Christ in the Philippines (UCCP) and Rev. Gregorio P. Iyoy is the
Hospital Administrator.The National Federation of Labor (NFL) is the exclusive bargaining representative of the
rank-and-file employees of MCCHI. Under the previous Collective Bargaining Agreements (CBAs), the signatories
were Ciriaco B. Pongasi, Sr. for MCCHI, and Atty. Armando M. Alforque (NFL Legal Counsel) and Paterno A.
Lumapguid as President of NFL-MCCH Chapter. In the CBA effective from January 1994 until December 31, 1995,
the signatories were Sheila E. Buot as Board of Trustees Chairman, Rev. Iyoy as MCCH Administrator and Atty.
Fernando Yu as Legal Counsel of NFL, while Perla Nava, President of Nagkahiusang Mamumuo sa MCCH (NAMA-
MCCH-NFL) signed the Proof of Posting.
Nava wrote Rev. Iyoy expressing the union‘s desire to renew the CBA, attaching to her letter a statement of
proposals signed/endorsed by 153 union members. Nava subsequently requested that the following employees be
allowed to avail of one-day union leave with pay. However, MCCHI returned the CBA proposal for Nava to secure
first the endorsement of the legal counsel of NFL as the official bargaining representative of MCCHI employees.
Meanwhile, Atty. Alforque informed MCCHI that the proposed CBA submitted by Nava was never referred to NFL
and that NFL has not authorized any other legal counsel or any person for collective bargaining negotiations. The
collection of union fees (check-off) was temporarily suspended by MCCHI in view of the existing conflict between
the federation and its local affiliate. Thereafter, MCCHI attempted to take over the room being used as union office
but was prevented to do so by Nava and her group who protested these actions and insisted that management
directly negotiate with them for a new CBA. MCCHI referred the matter to Atty. Alforque, NFL‘s Regional Director,
and advised Nava that their group is not recognized by NFL.
The next day, several union members led by Nava and her group launched a series of mass actions such as
wearing black and red armbands/headbands, marching around the hospital premises and putting up placards,
posters and streamers. Atty. Alforque immediately disowned the concerted activities being carried out by union
members which are not sanctioned by NFL. MCCHI directed the union officers led by Nava to submit within 48
hours a written explanation why they should not be terminated for having engaged in illegal concerted activities
amounting to strike, and placed them under immediate preventive suspension. Responding to this directive, Nava
and her group denied there was a temporary stoppage of work, explaining that employees wore their armbands
only as a sign of protest and reiterating their demand for MCCHI to comply with its duty to bargain collectively.
Rev. Iyoy, having been informed that Nava and her group have also been suspended by NFL, directed said officers
to appear before his office for investigation in connection with the illegal strike wherein they reportedly uttered
slanderous and scurrilous words against the officers of the hospital, threatening other workers and forcing them to
join the strike. Said union officers, however, invoked the grievance procedure provided in the CBA to settle the
dispute between management and the union.
The Department of Labor and Employment (DOLE) Regional Office No. 7 issued certifications stating that there is
nothing in their records which shows that NAMA-MCCH-NFL is a registered labor organization, and that said union
submitted only a copy of its Charter Certificate. MCCHI then sent individual notices to all union members asking
them to submit within 72 hours a written explanation why they should not be terminated for having supported the
illegal concerted activities of NAMA-MCCH-NFL which has no legal personality as per DOLE records. Thereafter,
several complaints for illegal dismissal and unfair labor practice were filed by the terminated employees against
MCCHI, Rev. Iyoy, UCCP and members of the Board of Trustees of MCCHI.
Issues:
1. Whether or not declaring private respondents MCCHI guilty of unfair labor practice and union busting.
2. Whether or not the union officers and members were guilty of illegal strike and picketing activities.
Held:
1. MCCHI not guilty of unfair labor practice
Art. 248 (g) of the Labor Code, as amended, makes it an unfair labor practice for an employer "[t]o violate the duty
to bargain collectively" as prescribed by the Code. The applicable provision in this case is Art. 253 which provides:
ART. 253. Duty to bargain collectively when there exists a collective bargaining agreement. – When there is a
collective bargaining agreement, the duty to bargain collectively shall also mean that neither party shall terminate
nor modify such agreement during its lifetime. However, either party can serve a written notice to terminate or
modify the agreement at least sixty (60) days prior to its expiration date. It shall be the duty of both parties to
keep the status quo and to continue in full force and effect the terms and conditions of the existing agreement
during the 60-day period and/or until a new agreement is reached by the parties.
NAMA-MCCH-NFL charged MCCHI with refusal to bargain collectively when the latter refused to meet and convene
for purposes of collective bargaining, or at least give a counter-proposal to the proposed CBA the union had
submitted and which was ratified by a majority of the union membership. MCCHI, on its part, deferred any
negotiations until the local union‘s dispute with the national union federation (NFL) is resolved considering that the
latter is the exclusive bargaining agent which represented the rank-and-file hospital employees in CBA negotiations
since 1987. Records of the NCMB and DOLE Region 7 confirmed that NAMA-MCCH-NFL had not registered as a
labor organization, having submitted only its charter certificate as an affiliate or local chapter of NFL. Not being a
legitimate labor organization, NAMA-MCCH-NFL is not entitled to those rights granted to a legitimate labor
organization under Art. 242, specifically:
(a) To act as the representative of its members for the purpose of collective bargaining;
(b) To be certified as the exclusive representative of all the employees in an appropriate collective bargaining unit
for purposes of collective bargaining;
2. NAMA-MCCH-NFL and its union officers and members are guilty of illegal strike and picketing.
Art. 263 (b) of the Labor Code, as amended, provides:
ART. 263. Strikes, picketing and lockouts. – x x x
(b) Workers shall have the right to engage in concerted activities for purposes of collective bargaining or for their
mutual benefit and protection. The right of legitimate labor organizations to strike and picket and of employers to
lockout, consistent with the national interest, shall continue to be recognized and respected. However, no labor
union may strike and no employer may declare a lockout on grounds involving inter-union and intra-union disputes.
As borne by the records, NAMA-MCCH-NFL was not a duly registered or an independently registered union at the
time it filed the notice of strike and when it conducted the strike. It could not then legally represent the union
members. Consequently, the mandatory notice of strike and the conduct of the strike vote report were ineffective
for having been filed and conducted by NAMA-MCCH-NFL which has no legal personality as a legitimate labor
organization, in violation of Art. 263 (c), (d) and (f) of the Labor Code and Rule XXII, Book V of the Omnibus Rules
Implementing the Labor Code. The findings of the Executive Labor Arbiter and NLRC, as sustained by the appellate
court, clearly established that the striking union members created so much noise, disturbance and obstruction that
the local government authorities eventually ordered their removal for being a public nuisance. This was followed by
an injunction from the NCMB enjoining the union leaders from further blocking the free ingress to and egress from
the hospital, and from committing threats, coercion and intimidation against non-striking employees and
patients/vehicles desiring to enter for the purpose of seeking medical treatment/confinement. By then, the illegal
strike had lasted for almost five months.
The Supreme Court rule for MCCHI.
PICOP RESOURCES INC. vs. DEQUILLA ET AL.

[G.R. No. 172666, December 7, 2011]
Facts:
Ricardo Dequilla, Cesar Atienza and Aniceto Orbeta (private respondents) were regular rank-and-file employees of
Picop Resources, Inc. (PICOP) and members of the NAMAPRI-SPFL, a duly registered labor organization and
existing bargaining agent of the PICOP rank-and-file employees. PICOP and NAMAPRI-SPFL had a collective
bargaining agreement (CBA) which would expire on May 22, 2000.
On May 16, 2000, the late Atty. Proculo P. Fuentes, Jr. (Atty. Fuentes), then National President of the Southern
Philippines Federation of Labor (SPFL), advised the PICOP management to terminate about 800 employees due to
acts of disloyalty, specifically, for allegedly campaigning, supporting and signing a petition for the certification of a
rival union, the Federation of Free Workers Union (FFW) before the 60-day "freedom period" and during the
effectivity of the CBA. Such acts of disloyalty were construed to be a valid cause for termination under the terms
and conditions of the CBA. Based on the CBA, the freedom period would start on March 22, 2000.
The employees were given an opportunity to be heard and subsequently on October 16, 2000, PICOP served a
notice of termination due to acts of disloyalty to 31 employees including herein private respondents. Thus, they
filed a complaint for Unfair Labor Practice and Illegal Dismissal with money claims, damages and attorney‘s fees.
Issue:
Whether an existing CBA can be given full force and effect in its terms and conditions, including its union security
clause, even beyond the five year period when no new CBA has been entered into.
Ruling:
The petition merits a denial.
There is no question that in the CBA entered into by the parties, there is a union security clause. The clause
imposes upon the workers the obligation to join and maintain membership in the company‘s recognized union as a
condition for employment.
There is no dispute that private respondents were members of NAMAPRI-SPFL who were terminated by PICOP due
to alleged acts of disloyalty. It is basic in labor jurisprudence that the burden of proof rests upon management to
show that the dismissal of its worker was based on a just cause. When an employer exercises its power to
terminate an employee by enforcing the union security clause, it needs to determine and prove the following: (1)
the union security clause is applicable; (2) the union is requesting for the enforcement of the union security
provision in the CBA; and (3) there is sufficient evidence to support the decision of the union to expel the employee
from the union.
In this case, the resolution thereof hinges on whether PICOP was able to show sufficient evidence to support the
decision of the union to expel private respondents from it.
PICOP basically contends that private respondents were justly terminated from employment for campaigning,
supporting and signing a petition for the certification of FFW, a rival union, before the 60-day "freedom period" and
during the effectivity of the CBA. Their acts constitute an act of disloyalty against the union which is valid cause for
termination pursuant to the Union Security Clause in the CBA.
The Court finds Itself unable to agree.
PICOP failed to show in detail how private respondents campaigned and supported FFW. Their mere act of signing
an authorization for a petition for certification election before the freedom period does not necessarily demonstrate
union disloyalty. It is far from being within the definition of "acts of disloyalty.‖ The act of "signing an authorization
for a petition for certification election" is not disloyalty to the union per se considering that the petition for
certification election itself was filed during the freedom period which started on March 22, 2000. Moreover, as
correctly ruled by the CA, the records are bereft of proof of any contemporaneous acts of resignation or withdrawal
of union membership or non-payment of union dues. Neither is there proof that private respondents joined FFW.
The fact is, private respondents remained in good standing with their union, NAMAPRI-SPFL.
We are constrained to believe that an "authorization letter to file a petition for certification election" is different
from an actual "Petition for Certification Election." Likewise, as per records, it was clear that the actual Petition for
Certification Election of FFW was filed only on May 18, 2000. Thus, it was within the ambit of the freedom period
which commenced from March 21, 2000 until May 21, 2000. Strictly speaking, what is prohibited is the filing of a
petition for certification election outside the 60-day freedom period. This is not the situation in this case. If at all,
the signing of the authorization to file a certification election was merely preparatory to the filing of the petition for
certification election, or an exercise of respondents‘ right to self-organization.
Moreover, PRI anchored their decision to terminate respondents‘ employment on Article 253 of the Labor Code
which states that "it shall be the duty of both parties to keep the status quo and to continue in full force and effect
the terms and conditions of the existing agreement during the 60-day period and/or until a new agreement is
reached by the parties." It claimed that they are still bound by the Union Security Clause of the CBA even after the
expiration of the CBA; hence, the need to terminate the employment of respondents.
Petitioner's reliance on Article 253 is misplaced.
Following Article 256, at the expiration of the freedom period, PRI's obligation to recognize NAMAPRI-SPFL as the
incumbent bargaining agent does not hold true when petitions for certification election were filed, as in this case.
Moreover, the last sentence of Article 253 which provides for automatic renewal pertains only to the economic
provisions of the CBA, and does not include representational aspect of the CBA. An existing CBA cannot constitute
a bar to a filing of a petition for certification election. When there is a representational issue, the status quo
provision in so far as the need to await the creation of a new agreement will not apply. Otherwise, it will create an
absurd situation where the union members will be forced to maintain membership by virtue of the union security
clause existing under the CBA and, thereafter, support another union when filing a petition for certification election.
If we apply it, there will always be an issue of disloyalty whenever the employees exercise their right to self-
organization. The holding of a certification election is a statutory policy that should not be circumvented, or
compromised.
C. ALCANTARA & SONS, INC., RESOLUTION ON THE MAIN DECISION OF SEPTEMBER 29, 2010
[G.R. No. 155109, March 14, 2012 ]
Facts:
C. Alcantara & Sons, Inc., (the Company) is a domestic corporation engaged in the manufacture and processing of
plywood. Nagkahiusang Mamumuo sa Alsons-SPFL (the Union) is the exclusive bargaining agent of the Company‘s
rank and file employees. The other parties to these cases are the Union officers1 and their striking members.2
The Company and the Union entered into a Collective Bargaining Agreement (CBA) that bound them to hold no
strike and no lockout in the course of its life. At some point the parties began negotiating the economic provisions
of their CBA but this ended in a deadlock, prompting the Union to file a notice of strike. After efforts at conciliation
by the Department of Labor and Employment (DOLE) failed, the Union conducted a strike vote that resulted in an
overwhelming majority of its members favoring it. The Union reported the strike vote to the DOLE and, after the
observance of the mandatory cooling-off period, went on strike.
During the strike, the Company filed a petition for the issuance of a writ of preliminary injunction with prayer for
the issuance of a temporary restraining order (TRO) Ex Partewith the National Labor Relations Commission (NLRC)
to enjoin the strikers from intimidating, threatening, molesting, and impeding by barricade the entry of non-striking
employees at the Company‘s premises. The NLRC first issued a 20-day TRO and, after hearing, a writ of
preliminary injunction, enjoining the Union and its officers and members from performing the acts complained of.
But several attempts to implement the writ failed. Only the intervention of law enforcement units made such
implementation possible. Meantime, the Union filed a petition4 with the Court of Appeals (CA), questioning the
preliminary injunction order. On February 8, 1999 the latter court dismissed the petition. The Union did not appeal
from such dismissal.
On June 29, 1999 the Labor Arbiter rendered a decision,declaring the Union‘s strike illegal for violating the CBA‘s
no strike, no lockout, provision. As a consequence, the Labor Arbiter held that the Union officers should be deemed
to have forfeited their employment with the Company and that they should pay actual damages of P3,825,000.00
plus 10% interest and attorney‘s fees. With respect to the striking Union members, finding no proof that they
actually committed illegal acts during the strike, the Labor Arbiter ordered their reinstatement without backwages.
The Labor Arbiter denied the Union‘s counterclaim for lack of merit.
On November 8, 1999 the NLRC rendered a decision,affirming that of the Labor Arbiter insofar as the latter
declared the strike illegal, ordered the Union officers terminated, and directed them to pay damages to the
Company. The NLRC ruled, however, that the Union members involved, who were identified in the proceedings
held in the case, should also be terminated for having committed prohibited and illegal acts.
The Union filed a petition for certiorari with the CA, questioning the NLRC decision. Finding merit in the petition,
the CA rendered a decision on March 20, 2002, annulling the NLRC decision and reinstating that of the Labor
Arbiter. The Company and the Union with its officers and members filed separate petitions for review of the CA
decision in G.R. 155109 and 155135, respectively.
Issue:
Whether or not the Union staged an illegal strike;
Ruling:
A strike may be regarded as invalid although the labor union has complied with the strict requirements for staging
one as provided in Article 263 of the Labor Code when the same is held contrary to an existing agreement, such as
a no strike clause or conclusive arbitration clause. 19 Here, the CBA between the parties contained a "no strike, no
lockout" provision that enjoined both the Union and the Company from resorting to the use of economic weapons
available to them under the law and to instead take recourse to voluntary arbitration in settling their disputes.
No law or public policy prohibits the Union and the Company from mutually waiving the strike and lockout maces
available to them to give way to voluntary arbitration. Indeed, no less than the 1987 Constitution recognizes in
Section 3, Article XIII, preferential use of voluntary means to settle disputes. Thus –
The State shall promote the principle of shared responsibility between workers and employers and the preferential
use of voluntary modes in settling disputes, including conciliation, and shall enforce their mutual compliance
therewith to foster industrial peace.The Court finds no compelling reason to depart from the findings of the Labor
Arbiter, the NLRC, and the CA regarding the illegality of the strike. Social justice is not one-sided. It cannot be used
as a badge for not complying with a lawful agreement.
A strike may be regarded as invalid although the labor union has complied with the strict requirements for staging
one as provided in Article 263 of the Labor Code when the same is held contrary to an existing agreement, such as
a no strike clause or conclusive arbitration clause.19 Here, the CBA between the parties contained a "no strike, no
lockout" provision that enjoined both the Union and the Company from resorting to the use of economic weapons
available to them under the law and to instead take recourse to voluntary arbitration in settling their disputes.
No law or public policy prohibits the Union and the Company from mutually waiving the strike and lockout maces
available to them to give way to voluntary arbitration. Indeed, no less than the 1987 Constitution recognizes in
Section 3, Article XIII, preferential use of voluntary means to settle disputes. Thus –
The State shall promote the principle of shared responsibility between workers and employers and the preferential
use of voluntary modes in settling disputes, including conciliation, and shall enforce their mutual compliance
therewith to foster industrial peace.The Court finds no compelling reason to depart from the findings of the Labor
Arbiter, the NLRC, and the CA regarding the illegality of the strike. Social justice is not one-sided. It cannot be used
as a badge for not complying with a lawful agreement.
Since the Union‘s strike has been declared illegal, the Union officers can, in accordance with law be terminated
from employment for their actions. This includes the shop stewards. They cannot be shielded from the coverage of
Article 264 of the Labor Code since the Union appointed them as such and placed them in positions of leadership
and power over the men in their respective work units.
As regards the rank and file Union members, Article 264 of the Labor Code provides that termination from
employment is not warranted by the mere fact that a union member has taken part in an illegal strike. It must be
shown that such a union member, clearly identified, performed an illegal act or acts during the strike.
DIGITAL TELECOMMUNICATIONS PHILS INC. vs. DIGITEL EMPLOYEES UNION ET AL.

[G.R. No. 184903-04, October 10, 2012]
Facts:
By virtue of a certification election, Digitel Employees Union (Union) became the exclusive bargaining agent of all
rank and file employees of Digitel in 1994. The Union and Digitel then commenced collective bargaining
negotiations which resulted in a bargaining deadlock. The Union threatened to go on strike, but then Acting Labor
Secretary Bienvenido E. Laguesma assumed jurisdiction over the dispute and eventually directed the parties to
execute a CBA. However, no CBA was forged between Digitel and the Union. Some Union members abandoned
their employment with Digitel. The Union later became dormant.
Ten (10) years thereafter or on 28 September 2004, Digitel received from Arceo Rafael A. Esplana (Esplana), who
identified himself as President of the Union, a letter containing the list of officers, CBA proposals and ground rules.
3 The officers were respondents Esplana, Alan D. Licando (Vice-President), Felicito C. Romero, Jr. (Secretary),
Arnold D. Gonzales (Treasurer), Reynel Francisco B. Garcia (Auditor), Zosimo B. Peralta (PRO), Regino T. Unidad
(Sgt. at Arms), and Jim L. Javier (Sgt. at Arms). Digitel was reluctant to negotiate with the Union and demanded
that the latter show compliance with the provisions of the Union's Constitution and By-laws on union membership
and election of officers.
On 4 November 2004, Esplana and his group filed a case for Preventive Mediation before the National Conciliation
and Mediation Board based on Digitel's violation of the duty to bargain. On 25 November 2004, Esplana filed a
notice of strike. On 10 March 2005, then Labor Secretary Patricia A. Sto. Tomas issued an Order 4 assuming
jurisdiction over the labor dispute. During the pendency of the controversy, Digitel Service, Inc. (Digiserv), a non-
profit enterprise engaged in call center servicing, filed with the Department of Labor and Employment (DOLE) an
Establishment Termination Report stating that it will cease its business operation. The closure affected at least 100
employees, 42 of whom are members of the herein respondent Union. Alleging that the affected employees are its
members and in reaction to Digiserv's action, Esplana and his group filed another Notice of Strike for union busting,
illegal lock-out, and violation of the assumption order.
On 23 May 2005, the Secretary of Labor ordered the second notice of strike subsumed by the previous Assumption
Order. Meanwhile, on 14 March 2005, Digitel filed a petition with the Bureau of Labor Relations (BLR) seeking
cancellation of the Union's registration on the following grounds: 1) failure to file the required reports from 1994-
2004; 2) misrepresentation of its alleged officers; 3) membership of the Union is composed of rank and file,
supervisory and managerial employees; and 4) substantial number of union members are not Digitel employees.
Issue:
Whether the Secretary of Labor erred in issuing the assumption order despite the pendency of the petition for
cancellation of union registration.
Ruling:
The pendency of a petition for cancellation of union registration does not preclude collective
bargaining.
The 2005 case of Capitol Medical Center, Inc. v. Hon. Trajano 13 is apropos. The respondent union therein sent a
letter to petitioner requesting a negotiation of their CBA. Petitioner refused to bargain and instead filed a petition
for cancellation of the union's certificate of registration. Petitioner's refusal to bargain forced the union to file a
notice of strike. They eventually staged a strike. The Secretary of Labor assumed jurisdiction over the labor dispute
and ordered all striking workers to return to work. Petitioner challenged said order by contending that its petition
for cancellation of union's certificate of registration involves a prejudicial question that should first be settled before
the Secretary of Labor could order the parties to bargain collectively. When the case eventually reached this Court,
we agreed with the Secretary of Labor that the pendency of a petition for cancellation of union registration does
not preclude collective bargaining, thus: SDaHEc
That there is a pending cancellation proceeding against the respondent Union is not a bar to set in motion the
mechanics of collective bargaining. If a certification election may still be ordered despite the pendency of a petition
to cancel the union's registration certificate (National Union of Bank Employees vs. Minister of Labor, 110 SCRA
274), more so should the collective bargaining process continue despite its pendency. We must emphasize that the
majority status of the respondent Union is not affected by the pendency of the Petition for Cancellation pending
against it. Unless its certificate of registration and its status as the certified bargaining agent are revoked, the
Hospital is, by express provision of the law, duty bound to collectively bargain with the Union. 14
Trajano was reiterated in Legend International Resorts Limited v. Kilusang Manggagawa ng Legenda (KML-
Independent). 15 Legend International Resorts reiterated the rationale for allowing the continuation of either a
CBA process or a certification election even during the pendency of proceedings for the cancellation of the union's
certificate of registration. Citing the cases of Association of Court of Appeals Employees v. Ferrer-Calleja 16 and
Samahan ng Manggagawa sa Pacific Plastic v. Hon. Laguesma, 17 it was pointed out at the time of the filing of the
petition for certification election — or a CBA process as in the instant case — the union still had the personality to
file a petition for certification — or to ask for a CBA negotiation — as in the present case.
AUTOMOTIVE ENGINE REBUILDERS vs. PROGRESIBONG UNYON NG MGA MANGGAGAWA SA AER

[G.R. No. 160138, January 16, 2013 & July 13, 2011 Main Decision]
Facts:
On December 22, 1998, Unyon filed a petition for certification election before the Department of Labor and
Employment(DOLE) after organizing their employees union within AER. Resenting what they did, AER forced all of
its employees to submit their urine samples for drug testing. Those who refused were threatened with dismissal.
On January 8, 1999, the results of the drug test came out and some employees were found positive for illegal
drugs and was suspended for coming to work under the influence of intoxicating liquor or any drug or drinking any
alcoholic beverages on the premises on company time.
On January 28, 1999, eighteen (18) employees of AER, acting collectively and in concert, suddenly and without
reason staged a walkout and assembled illegally in the company premises.
Despite management‘s plea for them to go back to work, the concerned employees refused and, instead, walked
out of the company premises and proceeded to the office of the AER Performance and Service Center (AER-
PSC) located on another street. They threatened and forced the company guards and some company officers and
personnel to open the gate of the AER-PSC compound. They also urged the AER-PSC employees to likewise stop
working.
On February 2, 1999, the affected workers were denied entry into the AER premises by order of management.
Because of this, the affected workers staged a picket in front of company premises hoping that management would
accept them back to work. When their picket proved futile, they filed a complaint for unfair labor practice, illegal
suspension and illegal dismissal.
On February 22, 1999, the concerned employees started a wildcat strike, barricaded company premises, and
prevented the free ingress and egress of the other employees, officers, clients, and visitors and the transportation
of company equipments. They also tried to use force and inflict violence against the other employees. Their wildcat
strike stopped after the NLRC issued and served a temporary restraining order (TRO).
Issue:
WON the CA erred in ruling for the reinstatement of the complaining employees but without grant of backwages.
Ruling:
The in pari delicto doctrine in labor cases is not novel to us. It has been applied in the case of Philippines Inter-
Fashion, Inc. v NLRC,where the Court held:
The Solicitor General has correctly stated in his comment that "from these facts are derived the following
conclusions which are likewise undisputed: that petitioner engaged in an illegal lockout while the NAFLU engaged
in an illegal strike; that the unconditional offer of the 150 striking employees to return to work and to withdraw
their complaint of illegal lockout against petitioner constitutes condonation of the illegal lock-out; and that the
unqualified acceptance of the offer of the 150 striking employees by petitioner likewise constitutes condonation of
the illegal strike insofar as the reinstated employees are concerned."
The issues at bar arise, however, from respondent commission's approval of its commissioner's conclusions that (1)
petitioner must be deemed to have waived its right to pursue the case of illegal strike against the 114 employees
who were not reinstated and who pursued their illegal lockout claim against petitioner; and (2) the said 114
employees are entitled to reinstatement with three months' backwages.
The Court approves the stand taken by the Solicitor General that there was no clear and unequivocal waiver on the
part of petitioner and on the contrary the record shows that it tenaciously pursued its application for their
dismissal, but nevertheless in view of the undisputed findings of illegal strike on the part of the 114 employees and
illegal lockout on petitioner's part, both parties are in pari delicto and such situation warrants the
restoration of the status quo ante and bringing the parties back to the respective positions before the
illegal strike and illegal lockout through the reinstatement of the said 114 employees, as follows:
The Bisaya case (102 Phil. 438) is inapplicable to the present case, because in the former, there were only two
strikers involved who were both reinstated by their employer upon their request to return to work. However, in the
present case, there were more than 200 strikers involved, of which 150 who desired to return to work were
reinstated. The rest were not reinstated because they did not signify their intention to return to work. Thus, the
ruling cited in the Bisaya case that the employer waives his defense of illegality of the strike upon reinstatement of
strikers is applicable only to strikers who signified their intention to return to work and were accepted back ...
Truly, it is more logical and reasonable for condonation to apply only to strikers who signified their intention to
return and did return to work. The reason is obvious. These strikers took the initiative in normalizing relations with
their employer and thus helped promote industrial peace. However, as regards the strikers who decided to pursue
with the case, as in the case of the 114 strikers herein, the employer could not be deemed to have condoned their
strike, because they had not shown any willingness to normalize relations with it. So, if petitioner really had any
intention to pardon the 114 strikers, it would have included them in its motion to withdraw on November 17, 1980.
The fact that it did not, but instead continued to pursue the case to the end, simply means that it did not pardon
the 114 strikers.
xxx xxx xxx
The finding of illegal strike was not disputed. Therefore, the 114 strikers employees who participated therein are
liable for termination (Liberal Labor Union v. Phil. Can Co., 91 Phil. 72; Insurefco Employees Union v. Insurefco, 95
Phil. 761). On the other hard, the finding of illegal lockout was likewise not disputed. Therefore, the 114 employees
affected by the lockout are also subject to reinstatement. Petitioner, however, contends that the application for
readmission to work by the 150 strikers constitutes condonation of the lockout which should likewise bind the 114
remaining strikers. Suffice it to say that the 150 strikers acted for themselves, not on behalf of the 114 remaining
strikers, and therefore the latter could not be deemed to have condoned petitioner's lockout.
The findings show that both petitioner and the 114 strikers are in pari delicto, a situation which warrants the
maintenance of the status quo. This means that the contending parties must be brought back to their
respective positions before the controversy; that is, before the strike. Therefore, the order reinstating
the 114 employees is proper.
With such restoration of the status quo ante it necessarily follows, as likewise submitted by the Solicitor General,
that the petition must be granted insofar as it seeks the setting aside of the award of three months' backwages to
the 114 employees ordered reinstated on the basis of the general rule that strikers are not entitled to backwages
(with some exceptions not herein applicable, such as where the employer is guilty of oppression and union-busting
activities and strikers ordered reinstated are denied such reinstatement and therefore are declared entitled to
backwages from the date of such denial). More so, is the principle of "no work, no pay" applicable to the case at
bar, in view of the undisputed finding of illegality of the strike.
Likewise, the in pari delicto doctrine was applied in the case of First City Interlink Transportation Co. Inc. v The
Honorable Secretary,thus:
3) Petitioner substantially complied with the Return to Work Order. The medical examination, NBI, Police and
Barangay Clearances as well as the driver's and conductor's/conductress licenses and photographs required as
conditions for reinstatement were reasonable management prerogatives. However, the other requirements imposed
as condition for reinstatement were unreasonable considering that the employees were not being hired for the first
time, although the imposition of such requirements did not amount to refusal on the part of the employer to
comply with the Return to Work Order or constitute illegal lockout so as to warrant payment of backwages to the
strikers. If at all, it is the employees' refusal to return to work that may be deemed a refusal to comply with the
Return to Work Order resulting in loss of their employment status. As both the employer and the employees
were, in a sense, at fault or in pari delicto, the nonreturning employees, provided they did not participate in
illegal acts; should be considered entitled to reinstatement. But since reinstatement is no longer feasible,
they should be given separation pay computed up to March 8, 1988 (the date set for the return of the
employees) in lieu of reinstatement. [Emphases and underscoring supplied]
In the case at bar, since both AER and the union are at fault or in pari delicto, they should be restored to their
respective positions prior to the illegal strike and illegal lockout. Nonetheless, if reinstatement is no longer feasible,
the concerned employees should be given separation pay up to the date set for the return of the complaining
employees in lieu of reinstatement.
Unyon filed the subject Motion for Partial Reconsideration questioning the Court's July 13, 2011 Decision insofar as
it failed to award backwages to fourteen (14) of its members.
Resolution: January 16, 2013

After going over the records again, the Court holds that only nine (9) of the fourteen (14) excluded employees
deserve to be reinstated immediately with backwages.Records disclose that thirty-two (32) employees filed a
complaint for illegal suspension and unfair labor practice against AER. Out of these 32 workers, only eighteen (18)
of them were charged by AER with illegal strike leaving fourteen (14) of them excluded from its complaint.
Technically, as no charges for illegal strike were filed against these 14 employees, they cannot be among those
found guilty of illegal strike. They cannot be considered in pari delicto. They should be reinstated and given their
backwages.
Out of these 14 employees, however, five (5) failed to write their names and affix their signatures in the
Membership Resolution attached to the petition filed before the CA, authorizing the Union President to represent
them.Because of their failure to affix their names and signatures in the Membership Resolution they cannot be
granted the relief that Unyon wanted for them in its Motion for Partial Reconsideration.
These excluded nine (9) workers, who signed their names in their petition before the CA, deserve to be reinstated
immediately and granted backwages. It is basic in jurisprudence that illegally dismissed workers are entitled to
reinstatement with backwages plus interest at the legal rate.
HOLY CHILD CATHOLIC SCHOOL vs. HON. STO TOMAS ET AL.

[G.R. No. 179146, July 23, 2013]
Facts:
A petition for certification election was filed by private respondent Pinag-Isang Tinig at Lakas ng Anakpawis — Holy
Child Catholic School Teachers and Employees Labor Union (HCCS-TELU-PIGLAS), alleging that: PIGLAS is a
legitimate labor organization duly registered with the Department of Labor and Employment (DOLE) representing
HCCS-TELU-PIGLAS; HCCS is a private educational institution duly registered and operating under Philippine laws;
HCCS is unorganized, there is no collective bargaining agreement or a duly certified bargaining agent or a labor
organization certified as the sole and exclusive bargaining agent of the proposed bargaining unit within one year
prior to the filing of the petition.
Petitioner averred that of the employees who signed to support the petition, fourteen (14) already resigned and six
(6) signed twice. Petitioner raised that members of private respondent do not belong to the same class; it is not
only a mixture of managerial, supervisory, and rank-and-file employees — as three (3) are vice-principals, one (1)
is a department head/supervisor, and eleven (11) are coordinators — but also a combination of teaching and non-
teaching personnel — as twenty-seven (27) are non-teaching personnel. It insisted that, for not being in accord
with Article 245 of the Labor Code, private respondent is an illegitimate labor organization lacking in personality to
file a petition for certification election, as held in Toyota Motor Philippines Corporation v. Toyota Motor Philippines
Corporation Labor Union; and an inappropriate bargaining unit for want of community or mutuality of interest, as
ruled in Dunlop Slazenger (Phils.), Inc. v. Secretary of Labor and Employment and De La Salle University Medical
Center and College of Medicine v. Laguesma.
The med-arbiter denied the petition for certification election on the ground that the unit which private respondent
sought to represent was inappropriate, stating that there was no ―community or mutuality of interest‖ since there
is a mixture of teaching and non-teaching staff. Private respondent then appealed before the SOLE, who ruled
against the dismissal of the petition and directed the conduct of two separate certification elections for the teaching
and the non-teaching personnel. The SOLE ruled that the private respondent could continue to exist as a
legitimate labor organization with combined teaching and non-teaching personnel in its membership and
representing both classes of employees in separate bargaining negotiations and agreements.
When the case was brought before the Court of Appeals, the CA affirmed the decision of the SOLE and also ruled
on the issue regarding the alleged mixture of supervisory and rank-and-file employees stating that the Toyota case
is inapplicable because the vice-principals, department head, and coordinators are neither supervisory nor
managerial employees.
Issues:
1. Whether or not a petition for certification election is dismissible on the ground that the labor organization‘s
membership allegedly consists of supervisory and rank-and-file employees.
2. Whether or not the petition for certification election should be dismissed on the ground that respondent is not
qualified for its failure to qualify as a legitimate labor organization due to the improper mixture of teaching and
non-teaching personnel (absence of mutuality of interest among its members)
Ruling:
1. No it does not.
In Dunlop, in which the labor organization that filed a petition for certification election was one for supervisory
employees, but in which the membership included rank-and-file employees, the Court reiterated that such labor
organization had no legal right to file a certification election to represent a bargaining unit composed of supervisors
for as long as it counted rank-and-file employees among its members.
It should be emphasized that the petitions for certification election involved in Toyota and Dunlop were filed on
November 26, 1992 and September 15, 1995, respectively; hence, the 1989 Rules was applied in both cases.
But then, on June 21, 1997, the 1989 Amended Omnibus Rules was further amended by Department Order No. 9,
series of 1997 (1997 Amended Omnibus Rules). Specifically, the requirement under Sec. 2(c) of the 1989 Amended
Omnibus Rules — that the petition for certification election indicate that the bargaining unit of rank-and-file
employees has not been mingled with supervisory employees — was removed. Instead, what the 1997 Amended
Omnibus Rules requires is a plain description of the bargaining unit, which does not require that, for its creation
and registration, a local or chapter submit a list of its members.
All said, while the latest issuance is R.A. No. 9481, the 1997 Amended Omnibus Rules, as interpreted by the Court
in Tagaytay Highlands, San Miguel and Air Philippines, had already set the tone for it. Toyota and Dunlop no longer
hold sway in the present altered state of the law and the rules.
In unequivocal terms, we reiterated that the alleged inclusion of supervisory employees in a labor organization
seeking to
represent the bargaining unit of rank-and-file employees does not divest it of its status as a legitimate labor
organization. Indeed, Toyota and Dunlop no longer hold true under the law and rules governing the instant case.
The petitions for certification election involved in Toyota and Dunlop were filed on November 26, 1992 and
September 15, 1995, respectively; hence, the 1989 Rules and Regulations Implementing R.A. No. 6715 (1989
Amended Omnibus Rules) was applied. In contrast, D.O. No. 9 is applicable in the petition for certification election
of private respondent as it was filed on May 31, 2002.
Following the doctrine laid down in Kawashima and SMCC-Super, it must be stressed that petitioner cannot
collaterally attack the legitimacy of private respondent by praying for the dismissal of the petition for certification
election:
Except when it is requested to bargain collectively, an employer is a mere bystander to any petition for certification
election; such proceeding is non-adversarial and merely investigative, for the purpose thereof is to determine which
organization will represent the employees in their collective bargaining with the employer. The choice of their
representative is the exclusive concern of the employees; the employer cannot have any partisan interest therein;
it cannot interfere with, much less oppose, the process by filing a motion to dismiss or an appeal from it; not even
a mere allegation that some employees participating in a petition for certification election are actually managerial
employees will lend an employer legal personality to block the certification election. The employer's only right in
the proceeding is to be notified or informed thereof.
2. The Court disagrees with Petitioner. The concepts of a union and of a legitimate labor organization are different
from, but related to, the concept of a bargaining unit.
In case of alleged inclusion of disqualified employees in a union, the proper procedure for an employer like
petitioner is to directly file a petition for cancellation of the union's certificate of registration due to
misrepresentation, false statement or fraud under the circumstances enumerated in Article 239 of the Labor Code,
as amended. To reiterate, private respondent, having been validly issued a certificate of registration, should be
considered as having acquired juridical personality which may not be attacked collaterally.
In determining the proper collective bargaining unit and what unit would be appropriate to be the collective
bargaining agency, the Court, in the seminal case of Democratic Labor Association v. Cebu Stevedoring Company,
Inc., mentioned several factors that should be considered, to wit: (1) will of employees (Globe Doctrine); (2)
affinity and unity of employees' interest, such as substantial similarity of work and duties, or similarity of
compensation and working conditions; (3) prior collective bargaining history; and (4) employment status, such as
temporary, seasonal and probationary employees. We stressed, however, that the test of the grouping is
community or mutuality of interest, because "the basic test of an asserted bargaining unit's acceptability is whether
or not it is fundamentally the combination which will best assure to all employees the exercise of their collective
bargaining rights.
As the SOLE correctly observed, petitioner failed to comprehend the full import of Our ruling in U.P. It suffices to
quote with approval the apt disposition of the SOLE when she denied petitioner's motion for reconsideration:
[Petitioner] appears to have confused the concepts of membership in a bargaining unit and membership in a union.
In emphasizing the phrase "to the exclusion of academic employees" stated in U.P. v. Ferrer-Calleja, [petitioner]
believed that the petitioning union could not admit academic employees of the university to its membership. But
such was not the intention of the Supreme Court.
A bargaining unit is a group of employees sought to be represented by a petitioning union. Such employees need
not be members of a union seeking the conduct of a certification election. A union certified as an exclusive
bargaining agent represents not only its members but also other employees who are not union members. As
pointed out in our assailed Decision, there were two contending unions in the U.P. case, namely[,] the Organization
of Non-Academic Personnel of U.P. (ONAPUP) and the All U.P. Worker's Union composed of both U.P. academic
and non-academic personnel. ONAPUP sought the conduct of a certification election among the rank-and-file non-
academic personnel only, while the All U.P. Workers Union intended to cover all U.P. rank-and-file employees,
involving both academic and non-academic personnel.
The Supreme Court ordered the "non-academic rank-and-file employees of U.P. to constitute a bargaining unit to
the exclusion of the academic employees of the institution", but did not order them to organize a separate labor
organization. In the U.P. case, the Supreme Court did not dismiss the petition and affirmed the order for the
conduct of a certification election among the non-academic personnel of U.P., without prejudice to the right of the
academic personnel to constitute a separate bargaining unit for themselves and for the All U.P. Workers Union to
institute a petition for certification election.
In the same manner, the teaching and non-teaching personnel of [petitioner] school must form separate
bargaining units. Thus, the order for the conduct of two separate certification elections, one involving teaching
personnel and the other involving non-teaching personnel. It should be stressed that in the subject petition,
[private respondent] union sought the conduct of a certification election among all the rank-and-file personnel of
[petitioner] school. Since the decision of the Supreme Court in the U.P. case prohibits us from commingling
teaching and non-teaching personnel in one bargaining unit, they have to be separated into two separate
bargaining units with two separate certification elections to determine whether the employees in the respective
bargaining units desired to be represented by [private respondent].
In summary, teaching and non-teaching personnel may be commingled in one union but have to be separated for
collective bargaining purposes. Thus the need for separate bargaining units, and the need for separate certification
elections, one for the teaching personnel and another for the non-teaching personnel.
VISAYAS COMMUNITY MEDICAL CENTER vs. YBALLE, ET AL.

[G.R. No. 196156, January 15, 2014]
Facts:
Respondents Yballe, Angel, Cortez and Ong were hired as employees of Visayas Community Medical Center, then
Metro Cebu Community Hospital Inc. National Federation of Labor was the exclusive bargaining agent of the rank-
and-file employees of MCCHI. In the CBA effective January 1994 until December 31, 1995, the signatories include
Rev. Iyoy as MCCH administrator and Perla Nava as president of the Nagkahiusang Mamumuno sa MCCH, a NFL
chartered union.
On December 6, 1995, Nava wrote Rev. Iyoy expressing the union‘s desire to renew the CBA. However, the
proposal was returned requiring Nava to secure the endorsement of the legal counsel of NFL as the official
bargaining representative of MCCHI employees. Nava insisted that the management should directly negotiate with
them. MCCHI referred the matter to Atty. Alforque, NFL‘S Regional Director, who then advised Nava that their
group was no longer recognized by NFL. He sent a letter addressed to Nava that their union membership is
suspended for serious violation of the Constitution and By-Laws. The violations occurred on February 27, 1996
when Nava and her group launched a series of mass actions such as wearing of black and red armbands and
headbands, marching around the hospital premises and putting up placards.
On March 13 and 19, 1996, DOLE Regional Office issued certifications stating that there is nothing in their records
which show that NAMA-MCCH-NFL is a registered labor organization.
On March 14, 1996, NAMA-MCCG-NFL filed a Notice of Strike but was deemed not filed for want of personality on
their part. On March 30 of the same year, MCCHI sent termination letters to union members and other members
who participated in the strike and picketing activities.
Unfazed, the union members held more mass actions. The means to and egress from the hospital were blocked so
that the vehicles carrying patients and employees were barred from entering the premises. Placards were place at
the hospital‘s entrance. With the intensified violence, MCCHI suffered heavy losses due to low patient admission
rates.
Issue:
Whether or not the union members were illegally dismissed based on their participation in the alleged illegal strike.
Ruling:
Yes. The Labor Code provides that "any union officer who knowingly participates in an illegal strike and any worker
or union officer who knowingly participates in the commission of illegal acts during a strike may be declared to
have lost his employment status". In the Decision dated December 7, 2011, we declared as invalid the dismissal of
MCCH employees who participated in the illegal strike conducted by NAMA-MCCH-NFL which is not a legitimate
labor organization. Since there was no showing that the complainants committed any illegal act during the strike,
they may not be deemed to have lost their employment status by their mere participation in the illegal strike. On
the other hand, the union leaders (Nava group) who conducted the illegal strike despite knowledge that NAMA-
MCCH-NFL is not a duly registered labor union were declared to have been validly terminated by petitioner.
A worker merely participating in an illegal strike may not be terminated from employment. It is only when he
commits illegal acts during a strike that he may be declared to have lost employment status. In contrast, a union
officer may be terminated from employment for knowingly participating in an illegal strike or participates in the
commission of illegal acts during a strike. The law grants the employer the option of declaring a union officer who
participated in an illegal strike as having lost his employment. It possesses the right and prerogative to terminate
the union officers from service.
In this case, the NLRC affirmed the finding of the Labor Arbiter that respondents supported and took part in the
illegal strike and further declared that they were guilty of insubordination. However, the mass termination of
complainants was illegal, notwithstanding the illegality of the strike in which they participated.
An ordinary striking worker cannot be dismissed for such mere participation in the illegal strike. However, the CA
erred in awarding respondents full back wages and ordering their reinstatement despite the prevailing
circumstances.
With respect to backwages, the principle of "fair day‘s wage for a fair day‘s labor" remains as the basic factor in
determining the award thereof. If there is no work performed by the employee there can be no wage or pay
unless, of course, the laborer was able, willing and ready to work but was illegally locked out, suspended or
dismissed or otherwise illegally prevented from working.
The alternative relief for union members who were dismissed for having participated in an illegal strike is the
payment of separation pay in lieu of reinstatement under the following circumstances: (a) when reinstatement can
no longer be effected in view of the passage of a long period of time or because of the realities of the situation; (b)
reinstatement is inimical to the employer‘s interest; (c) reinstatement is no longer feasible; (d) reinstatement does
not serve the best interests of the parties involved; (e) the employer is prejudiced by the workers‘ continued
employment; (f) facts that make execution unjust or inequitable have supervened; or (g) strained relations
between the employer and employee.
Considering that 15 years had lapsed from the onset of this labor dispute, and in view of strained relations that
ensued, in addition to the reality of replacements already hired by the hospital which had apparently recovered
from its huge losses, and with many of the petitioners either employed elsewhere, already old and sickly, or
otherwise incapacitated, separation pay without back wages is the appropriate relief.
Therefore, respondents were illegally dismissed. They are however only entitled to separation pay and not to full
back wages.
PHILTRANCO SERVICE ENTERPRISES INC. vs. PHILTRANCO WORKERS UNION-ASSOCIATION OF

GENUINE LABOR ORGANIZATIONS
[G.R. No. 180962, February 26, 2014]
Facts:
Petitioner Philtranco Service Enterprises, Inc., a local land transportation company, retrenched 21 of its employees
on the ground that it was suffering business losses. Thus the company union, Philtranco Workers Union-Association
of Genuine Labor Organizations (PWU-AGLU), filed a Notice of Strike with the Department of Labor and
Employment (DOLE), claiming that petitioner engaged in unfair labor practices. The NCMB conducted the
preliminary conference but no settlement was arrived at. Hence, the case was referred to the SOLE which ordered
the reinstatement of the Union Officers without loss of seniority rights. The order was received on June 14, 2007.
Petitioner filed for a Motion for Reconsideration on June 25 (Monday) or the first working day following last day
which was Sunday. The Motion was denied by SOLE on August 15, 2007 which was received by Petitioner on Aug
17. It then filed the Petition for Certiorari on August 29, 2007.
Issues:
1. WON the remedy of Petition for Certiorari was the appropriate remedy
2. WON the said remedy was timely filed
Ruling:
1. Yes. The fact is undeniable that by referring the case to the Secretary of Labor, Conciliator-Mediator Aglibut
conceded that the case fell within the coverage of Article 263 of the Labor Code. By assuming jurisdiction over the
case, the provisions of Article 263 became applicable. It has long been settled that the remedy of an aggrieved
party in a decision or resolution of the Secretary of Labor is to timely file a motion for reconsideration as a
precondition for any further or subsequent remedy, and then seasonably file a special civil action for certiorari
under Rule 65 of the 1997 Rules on Civil Procedure.
2. Yes. Rule 65 states that where a motion for reconsideration or new trial is timely filed, whether such motion is
required or not, the petition shall be filed not later than 60 days counted from the notice of the denial of the
motion. The very nature of certiorari – which is an extraordinary remedy resorted to only in the absence of plain,
available, speedy and adequate remedies in the course of law – requires that the office issuing the decision or
order be given the opportunity to correct itself. Quite evidently, this opportunity for rectification does not arise if no
motion for reconsideration has been filed.
Clearly, before a petition for certiorari under Rule 65 of the Rules of Court may be availed of, the filing of a motion
for reconsideration is a condition sine qua non to afford an opportunity for the correction of the error or mistake
complained of. Since Petitioner filed the Petition for Certiorari on August 29, 2007 which was exactly within the 60-
day period within which to file, then such petition was timely filed.
WESLEYAN UNIVERSITY-PHILS. vs. WESLEYAN UNIVERSITY-PHILS., FACULTY & STAFF

ASSOCIATION
[G.R. No. 181806, March 12, 2014]
Facts:
Petitioner Wesleyan University-Philippines is a non-stock, non-profit educational institution duly organized and
existing under the laws of the Philippines.6 Respondent Wesleyan University-Philippines Faculty and Staff
Association, on the other hand, is a duly registered labor organization7 acting as the sole and exclusive bargaining
agent of all rank-and-file faculty and staff employees of petitioner.
In December 2003, the parties signed a 5-year CBA effective June 1, 2003 until May 31, 2008.
On 2005, petitioner, through its President, issued a Memorandum providing guidelines on the implementation of
vacation and sick leave credits as well as vacation leave commutation. Some of its provisions are: vacation and sick
leave credits are not automatic; they have to be earned; only vacation leave is commuted or monetized to cash.
Respondent‘s President, Cynthia L. De Lara (De Lara) informed the petitioner through a letter that respondent is
not amenable to the unilateral changes made by petitioner. Respondent questioned the guidelines for being
violative of existing practices and the CBA.
A Labor Management Committee (LMC) Meeting was held during which petitioner advised respondent to file a
grievance complaint on the implementation of the vacation and sick leave policy. In the same meeting, petitioner
announced its plan of implementing a one-retirement policy, which was unacceptable to respondent.
Unable to settle their differences at the grievance level, the parties referred the matter to a Voluntary Arbitrator.
On November 2, 2006, the Voluntary Arbitrator rendered a Decision declaring the one-retirement policy and the
Memorandum dated August 16, 2005 contrary to law.
Aggrieved, petitioner appealed the case to the CA via a Petition for Review under Rule 43 of the Rules of Court.
On September2007, the CA rendered a Decision finding the rulings of the Voluntary Arbitrator supported by
substantial evidence. It also affirmed the nullification of the one-retirement policy and the Memorandum dated
August 16, 2005 on the ground that these unilaterally amended the CBA without the consent of respondent
Issue:
Whether the [CA] committed grave and palpable error in sustaining the Voluntary Arbitrator‘s ruling that a
university practice of granting its employees two (2) sets of Retirement Benefits had already been established as
defined by the law and jurisprudence.
Ruling:
No.
The Non-Diminution Rule found in Article 100 of the Labor Code explicitly prohibits employers from eliminating or
reducing the benefits received by their employees. This rule, however, applies only if the benefit is based on an
express policy, a written contract, or has ripened into a practice. To be considered a practice, it must be
consistently and deliberately made by the employer over a long period of time.
An exception to the rule is when "the practice is due to error in the construction or application of a doubtful or
difficult question of law." The error, however, must be corrected immediately after its discovery; otherwise, the
rule on Non-Diminution of Benefits would still apply.
The practice of giving two retirement benefits to petitioner’s employees is supported by substantial
evidence.
In this case, respondent was able to present substantial evidence in the form of affidavits to support its claim that
there are two retirement plans. Based on the affidavits, petitioner has been giving two retirement benefits as early
as 1997. Petitioner, on the other hand, failed to present any evidence to refute the veracity of these affidavits. As
we see it then, their affidavits, corroborated by the affidavits of incumbent employees, are more than sufficient to
show that the granting of two retirement benefits to retiring employees had already ripened into a consistent and
deliberate practice.
Moreover, petitioner‘s assertion that there is only one retirement plan as the CBA Retirement Plan and the PERAA
Plan are one and the same is not supported by any evidence. There is nothing in Article XVI of the CBA to indicate
or even suggest that the "Plan" referred to in the CBA is the PERAA Plan. Besides, any doubt in the interpretation
of the provisions of the CBA should be resolved in favor of respondent.
The Memorandum dated August 16, 2005 is contrary to the existing CBA.
Neither do we find any reason to disturb the findings of the CA that the Memorandum dated August 16, 2005 is
contrary to the existing CBA.
Sections 1 and 2 of Article XII of the CBA provide that all covered employees are entitled to 15-day sick leave and
15-day vacation leave with pay every year and that after the second year of service, all unused vacation leave shall
be converted to cash and paid to the employee at the end of each school year, not later than August 30 of each
year.
The Memorandum dated August 16, 2005, however, states that vacation and sick leave credits are not automatic
as leave credits would be earned on a month-to-month basis. This, in effect, limits the available leave credits of an
employee at the start of the school year.
A Collective Bargaining Agreement (CBA) is a contract entered into by an employer and a legitimate labor
organization concerning the terms and conditions of employment.1 Like any other contract, it has the force of law
between the parties and, thus, should be complied with in good faith.2 Unilateral changes or suspensions in the
implementation of the provisions of the CBA, therefore, cannot be allowed without the consent of both parties.
TABANGAO SHELL REFINERY EMPLOYEES ASSOCIATION vs. PILIPINAS SHELL PETROLEUM CORP.
[G.R. No. 170007, April 7, 2014]
Facts:
The Collective Bargaining Agreement (CBA) of the Company and the Union expired on 30 April 2004. Thus, as early
as 13 April 2004, the Company and the Union already met to discuss the ground rules that would govern their
upcoming negotiations. Then, on 15 April 2004, the Union submitted its proposals for the renewal of their CBA.
While a total of 41 meetings were held between the parties, several items, including the matter of compensation,
remained unresolved. The union proposed an annual across-the-board basic salary increase for the next three
years that would be covered by the new CBA. The company made a counter-proposal to grant all covered
employees a lump sum amount of yearly for the three-year period of the new CBA. Alleging failure on the part of
the company to justify its offer, the union manifested that the company was bargaining in bad faith. The company,
in turn, expressed its disagreement with the union‘s manifestation.
On 2 September 2004, the Union filed a Notice of Strike with the NCMB, Region IV based in Calamba, Laguna
anchored on a perceived unfair labor practice consisting of alleged bad faith bargaining on the part of the
Company. On September 16, 2004, during the cooling off period, the union conducted the necessary strike vote.
The members of the union, who participated in the voting, unanimously voted for the holding of a strike. Upon
being aware of this development, the company filed a Petition for Assumption of Jurisdiction with the Secretary of
Labor and Employment. The Secretary of Labor and Employment found that the intended strike would likely affect
the company‘s capacity to provide petroleum products to the company‘s various clientele, including the
transportation sector, the energy sector, and the manufacturing and industrial sectors. Convinced that such a strike
would have adverse consequences on the national economy, the Secretary of Labor and Employment ruled that the
labor dispute between the parties would cause or likely to cause a strike in an industry indispensable to the
national interest. Thus, the Secretary of Labor and Employment assumed jurisdiction over the dispute of the
parties.
The union thereafter filed a petition for certiorari in the Court of Appeals. The union alleged in its petition that the
Secretary of Labor and Employment acted with grave abuse of discretion in grossly misappreciating the facts and
issue of the case. The union‘s contended that the Secretary of Labor and Employment cannot resolve the economic
issues because the union had not given its consent to the declaration of a deadlock. The Court of Appeals found
the position of the union untenable.
Neither the union nor the company appealed the Decision dated June 8, 2005 of the Secretary of Labor and
Employment. Thus, the said Decision attained finality.
Issue:
Whether or not the Secretary of Labor committed grave abuse of discretion when is assumed jurisdiction over the
dispute between the union and the company
Ruling:
Findings of fact of the Secretary of Labor and Employment in the Decision dated June 8, 2005 that there already
existed a bargaining deadlock when she assumed jurisdiction over the labor dispute between the union and the
company, and that there was no bad faith on the part of the company when it was bargaining with the union are
both supported by substantial evidence. The contention of the labor union is untenable. The Secretary of Labor has
jurisdiction over the labor dispute.
The Secretary of the DOLE has been explicitly granted by Article 263(g) of the Labor Code the authority to assume
jurisdiction over a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the
national interest, and decide the same accordingly. And, as a matter of necessity, it includes questions incidental to
the labor dispute; that is, issues that are necessarily involved in the dispute itself, and not just to that ascribed in
the Notice of Strike or otherwise submitted to him for resolution.
The labor dispute between the union and the company concerned the unresolved matters between the parties in
relation to their negotiations for a new CBA. The power of the Secretary of Labor and Employment to assume
jurisdiction over this dispute includes and extends to all questions and controversies arising from the said dispute,
such as, but not limited to the union‘s allegation of bad faith bargaining. It also includes and extends to the various
unresolved provisions of the new CBA such as compensation, particularly the matter of annual wage increase or
yearly lump sum payment in lieu of such wage increase, whether or not there was deadlock in the negotiations.
In the case at bar, there was already an existing deadlock between the parties. The fact is that the negotiations
between the union and the company were stalled by the opposing offers of yearly wage increase by the union, on
the one hand, and annual lump sum payment by the company, on the other hand. Each party was adamant in its
position. Thus, because of the unresolved issue on wage increase, there was actually a complete stoppage of the
ongoing negotiations between the parties and the union filed a Notice of Strike. A mutual declaration would neither
add to nor subtract from the reality of the deadlock then existing between the parties. Thus, the absence of the
parties‘ mutual declaration of deadlock does not mean that there was no deadlock.
Furthermore, as the Decision dated June 8, 2005 of the Secretary of Labor and Employment already settled the
said issues with finality, the union cannot once again raise those issues in this Court through this petition without
violating the principle of res judicata, particularly in the concept of conclusiveness of judgment.
UNFAIR LABOR PRACTICE
GENERAL MILLING CORP. vs. COURT OF APPEALS

[G.R. No. 146728, February 11, 2004]
Facts:
In its plants located at Cebu City and Lapu-Lapu City, General Milling Corporation (GMC) employed 190 workers,
who were all members of respondent General Milling Corporation Independent Labor Union (union, for brevity), a
duly certified bargaining agent. On April 28, 1989, GMC and the union concluded a collective bargaining agreement
(CBA) which included the issue of representation effective for a term of three years. The CBA was effective for
three years retroactive to December 1, 1988. Hence, it would expire on November 30, 1991. On November 29,
1991, a day before the expiration of the CBA, the union sent GMC a proposed CBA, with a request that a counter-
proposal be submitted within ten (10) days.
As early as October 1991, GMC received letters from workers who stated that they had withdrawn from their union
membership, on grounds of religious affiliation and personal differences. Believing that the union no longer had
standing to negotiate a CBA, GMC did not send any counter-proposal. On December 16, 1991, GMC wrote a letter
to the union‘s officers stating that it felt there was no basis to negotiate with a union which no longer existed.
On January 13, 1992, GMC dismissed Marcia Tumbiga, a union member, on the ground of incompetence. The
union protested and requested GMC to submit the matter to the grievance procedure provided in the CBA. GMC,
however, advised the union to "refer to our letter dated December 16, 1991."
Thus, the union filed, on July 2, 1992, a complaint against GMC with the NLRC, Arbitration Division, Cebu City. The
complaint alleged unfair labor practice on the part of GMC for: (1) refusal to bargain collectively; (2) interference
with the right to self-organization; and (3) discrimination.
Issues:
1. Whether or not GMC is guilty of unfair labor practice.
2. Whether or not the Court of Appeals was correct when it imposed upon the GMC the draft CBA proposes by the
union for two years to begin from expiration of the original CBA.
Ruling:
GMC is guilty of unfair labor practice. Failing to comply with the mandatory obligation to submit a
reply to the union’s proposals, GMC violated its duty to bargain collectively, making it liable for unfair
labor practice.
On the first issue, Article 253-A of the Labor Code, as amended by Rep. Act No. 6715, states:
ART. 253-A. Terms of a collective bargaining agreement. – Any Collective Bargaining Agreement that the
parties may enter into shall, insofar as the representation aspect is concerned, be for a term of five (5) years. No
petition questioning the majority status of the incumbent bargaining agent shall be entertained and no certification
election shall be conducted by the Department of Labor and Employment outside of the sixty-day period
immediately before the date of expiry of such five year term of the Collective Bargaining Agreement. All other
provisions of the Collective Bargaining Agreement shall be renegotiated not later than three (3) years after its
execution.
The law mandates that the representation provision of a CBA should last for five years. The relation between labor
and management should be undisturbed until the last 60 days of the fifth year.
Hence, when the union requested for a renegotiation on November 29, 1991, it was still the certified collective
bargaining agent of the workers, because it was seeking said renegotiation within 5 years from the date of
effectivity of the CBA on December 1, 1988. The union‘s proposal was also submitted within the prescribed 3-year
period from the date of effectivity of the CBA, just before the last day of said period. It was obvious that GMC had
no valid reason to refuse to negotiate in good faith with the union. For refusing to send a counter-proposal to the
union and to bargain anew on the economic terms of the CBA, the company committed an unfair labor practice
under Article 248 of the Labor Code, which provides that:
ART. 248. Unfair labor practices of employers. – It shall be unlawful for an employer to commit any of the
following unfair labor practice:
(g) To violate the duty to bargain collectively as prescribed by this Code;
Article 252 of the Labor Code elucidates the meaning of the phrase "duty to bargain collectively," thus:
ART. 252. Meaning of duty to bargain collectively. – The duty to bargain collectively means the performance
of a mutual obligation to meet and convene promptly and expeditiously in good faith for the purpose of
negotiating an agreement....
We have held that there is no per se test of good faith in bargaining. Good faith or bad faith is an inference to be
drawn from the facts.The effect of an employer‘s or a union‘s actions individually is not the test of good-faith
bargaining,but the impact of all such occasions or actions, considered as a whole.
Under Article 252, both parties are required to perform their mutual obligation to meet and convene promptly and
expeditiously in good faith for the purpose of negotiating an agreement.
The union lived up to this obligation when it presented proposals for a new CBA to GMC within three (3) years from
the effectivity of the original CBA. But GMC failed in its duty under Article 252. What it did was to devise a flimsy
excuse, by questioning the existence of the union and the status of its membership to prevent any negotiation.
Procedure in Collective Bargaining

It bears stressing that the procedure in collective bargaining prescribed by the Code is mandatory because of the
basic interest of the state in ensuring lasting industrial peace.
ART. 250. Procedure in collective bargaining. – The following procedures shall be observed in collective
bargaining:
xxxx The other party shall make a reply thereto not later than ten (10) calendar days from receipt of such notice.
GMC‘s failure to make a timely reply to the proposals presented by the union is indicative of its utter lack of interest
in bargaining with the union. Its excuse that it felt the union no longer represented the workers, was mainly
dilatory as it turned out to be utterly baseless.
We hold that GMC‘s refusal to make a counter-proposal to the union‘s proposal for CBA negotiation is an indication
of its bad faith. Where the employer did not even bother to submit an answer to the bargaining proposals of the
union, there is a clear evasion of the duty to bargain collectively.
Failing to comply with the mandatory obligation to submit a reply to the union‘s proposals, GMC violated its duty to
bargain collectively, making it liable for unfair labor practice.
The fact that the resignations of the union members occurred during the pendency of the case before the labor
arbiter shows GMC‘s desperate attempts to cast doubt on the legitimate status of the union. The ill-timed letters of
resignation from the union members indicate that GMC had interfered with the right of its employees to self-
organization.
CA was correct in imposing the draft proposed by the Union on GMC following the doctrines on Kiok
Loy vs. NLRC and Divine Word University of Tacloban vs. Secretary of Labor and Employment.
ART. 253 on the duty to bargain collectively when there exists a collective bargaining agreement,
mandates the parties to keep the status quo while they are still in the process of working out their respective
proposal and counter proposal. The general rule is that when a CBA already exists, its provision shall continue to
govern the relationship between the parties, until a new one is agreed upon. The rule necessarily presupposes that
all other things are equal. That is, that neither party is guilty of bad faith. However, when one of the parties abuses
this grace period by purposely delaying the bargaining process, a departure from the general rule is warranted.
In Kiok Loy vs. NLRC,Sweden Ice Cream Plant, who refused to submit any counter proposal proposed by its
employees‘ certified bargaining agent, had lost its right to bargain the terms and conditions of the CBA. That
Sweden‘s approach and attitude – stalling the negotiation lead to a conclusion that it is unwilling to negotiate and
reach an agreement with the Union. Petitioner has not at any instance, evinced good faith.
In Divine Word University of Tacloban vs. Secretary of Labor and Employment , Divine Word University of Tacloban,
refused to perform its duty to bargain collectively. Thus, we upheld the unilateral imposition on the university of
the CBA proposed by the Divine Word University Employees Union.
Applying the principle in the foregoing cases to the instant case, it would be unfair to the union and its members if
the terms and conditions contained in the old CBA would continue to be imposed on GMC‘s employees for the
remaining two (2) years of the CBA‘s duration. We are not inclined to gratify GMC with an extended term of the old
CBA after it resorted to delaying tactics to prevent negotiations.
Since it was GMC which violated the duty to bargain collectively, based on Kiok Loy and Divine Word University of
Tacloban, it had lost its statutory right to negotiate or renegotiate the terms and conditions of the draft CBA
proposed by the union.
However, that as strictly distinguished from the facts of this case, there was no pre-existing CBA between the
parties in Kiok Loy and Divine Word University of Tacloban. Nonetheless, we deem it proper to apply in this case
the rationale of the doctrine in the said two cases. To rule otherwise would be to allow GMC to have its cake and
eat it too.
Thus, by imposing on GMC the provisions of the draft CBA proposed by the union, in our view, the interests of
equity and fair play were properly served and both parties regained equal footing, which was lost when GMC
thwarted the negotiations for new economic terms of the CBA.
STANDARD CHARTERED BANK EMPLOYEES UNION vs. CONFESOR

[G.R. No. 114974, June 16, 2004]
Facts:
The exclusive bargaining agent of the rank and file employees of the Standard Chartered Bank is the Standard
Chartered Bank Employees Union (the Union, for brevity). Prior to the expiration of the 3-year period of their CBA,
but within the 60-day freedom period, the Union initiated the negotiations. On February 18, 1993, the Union,
through its President, Eddie L. Divinagracia, sent a letter containing its proposals covering political provisions and
34 economic provisions. Included therein was a list of the names of the members of the Union‘s negotiating panel.
The Union suggested to the Bank‘s head of the negotiating panel, Cielito Diokno, that the bank lawyers should be
excluded from the negotiating team. The Bank acceded.Meanwhile, Diokno suggested to Divinagracia that Jose P.
Umali, Jr., the President of the National Union of Bank Employees (NUBE), the federation to which the Union was
affiliated, be excluded from the Union‘s negotiating panel. However, Umali was retained as a member thereof.
On March 12, 1993, the parties met and set the ground rules for the negotiation. Diokno suggested that the
negotiation be kept a "family affair." The proposed non-economic provisions of the CBA were discussed first. Even
during the final reading of the non-economic provisions on May 4, 1993, there were still provisions on which the
Union and the Bank could not agree.
On May 18, 1993, the negotiation for economic provisions commenced. Towards the end of the Bank‘s
presentation, Umali requested the Bank to validate the Union‘s "guestimates," especially the figures for the rank
and file staff. In the succeeding meetings, Umali chided the Bank for the insufficiency of its counter-proposal on
the provisions on salary increase, group hospitalization, death assistance and dental benefits.
In the morning of the June 15, 1993 meeting, the Union suggested that if the Bank would not make the necessary
revisions on its counter-proposal, it would be best to seek a 3rd party assistance. After the break, the Bank
presented its revised counter-proposal, wherein, except for the provisions on signing bonus and uniforms, the
Union and the Bank failed to agree on the remaining economic provisions of the CBA. The Union declared a
deadlock and filed a Notice of Strike before the National Conciliation and Mediation Board (NCMB) on June 21,
1993, docketed as NCMB-NCR-NS-06-380-93.26.
On the other hand, the Bank filed a complaint for Unfair Labor Practice (ULP) and Damages before the Arbitration
Branch of the NLRC in Manila against the Union on June 28, 1993. The Bank alleged that the Union violated its
duty to bargain, as it did not bargain in good faith. It contended that the Union demanded "sky high economic
demands," indicative of blue-sky bargaining.
On July 21, 1993, then SOLE Nieves R. Confesor, pursuant to Article 263(g) of the Labor Code, issued an Order
assuming jurisdiction over the labor dispute at the Bank. An order was issued that the parties execute a collective
bargaining agreement. Thus, the Bank‘s charge for unfair labor practice which it originally filed with the NLRC but
which is deemed consolidated herein, is dismissed for lack of merit. On the other hand, the Union‘s charge for
unfair labor practice is similarly dismissed.
The parties then executed a Collective Bargaining Agreement wherein the wage increase was effected and the
signing bonuses based on the increased wage were distributed to the employees covered by the CBA.
The Union filed this petition for certiorari under Rule 65 of the Rules of Procedure.
Issues:
1. Whether or not the company is guilty of unfair labor practice
2. Whether or not the Union is estopped after it executed with the company the CBA
3. Whether or not the Union is engaged in Blue-Sky Bargaining
Ruling:
The bank is not guilty of ULP.
"Interference" under Article248 (a) of the Labor Code to amount to ULP.
The petitioner asserts that respondent committed ULP, i.e., interference in the selection of the Union‘s negotiating
panel, when Cielito Diokno, the Bank‘s Human Resource Manager, suggested to the Union‘s President Eddie L.
Divinagracia that Jose P. Umali, Jr., President of the NUBE, be excluded from the Union‘s negotiating panel. In
support of its claim, Divinagracia executed an affidavit, stating that prior to the commencement of the negotiation,
Diokno approached him and suggested the exclusion of Umali from the Union‘s negotiating panel, and that during
the first meeting, Diokno stated that the negotiation be kept a "family affair."
In U.S. Postal Service and Harley Davidson Motor Co., Inc., AMF, the National Labor Relations Board held that upon
the employer‘s refusal to engage in negotiations with the Union for collective-bargaining contract when the Union
includes a person who is not an employee, or one who is a member or an official of other labor organizations, such
employer is engaged in unfair labor practice under Section 8(a)(1) and (5) of the NLRA.
In, Insular Life Assurance Co., Ltd. Employees Association – NATU vs. Insular Life Assurance Co. Ltd., the test of
whether an employer has interfered with and coerced employees in the exercise of their right to self-organization
within the meaning of subsection (a)(1) is whether the employer has engaged in conduct which it may reasonably
be said, tends to interfere with the free exercise of employees‘ rights under Section 3 of the Act.Further, it is not
necessary that there be direct evidence that any employee was in fact intimidated or coerced by statements of
threats of the employer if there is a reasonable inference that anti-union conduct of the employer does have an
adverse effect on self-organization and collective bargaining.
Under the International Labor Organization Convention (ILO) No. 87 FREEDOM OF ASSOCIATION AND
PROTECTION OF THE RIGHT TO ORGANIZE to which the Philippines is a signatory, "workers and employers,
without distinction whatsoever, shall have the right to establish and, subject only to the rules of the organization
concerned, to job organizations of their own choosing without previous authorization.‖
Workers‘ and employers‘ organizations shall have the right to draw up their constitutions and rules, to elect their
representatives in full freedom to organize their administration and activities and to formulate their
programs. Article 2 of ILO Convention No. 98 pertaining to the Right to Organize and Collective Bargaining,
provides:
Article 2
1. Workers‘ and employers‘ organizations shall enjoy adequate protection against any acts or interference
by each other or each other‘s agents or members in their establishment, functioning or administration.
2. In particular, acts which are designed to promote the establishment of workers‘ organizations under the
domination of employers or employers‘ organizations or to support workers‘ organizations by financial or
other means, with the object of placing such organizations under the control of employers or employers‘
organizations within the meaning of this Article.
The aforecited ILO Conventions are incorporated in our Labor Code, particularly in Article 243 thereof, which
provides:
ART. 243. COVERAGE AND EMPLOYEES‘ RIGHT TO SELF-ORGANIZATION. – All persons employed in
commercial, industrial and agricultural enterprises and in religious, charitable, medical or educational
institutions whether operating for profit or not, shall have the right to self-organization and to form, join, or
assist labor organizations of their own choosing for purposes of collective bargaining. Ambulant,
intermittent and itinerant workers, self-employed people, rural workers and those without any definite
employers may form labor organizations for their mutual aid and protection.
and Articles 248 and 249 respecting ULP of employers and labor organizations.
The 1987 Constitution, aside from making it a policy to "protect the rights of workers and promote their
welfare," devotes an entire section, emphasizing its mandate to afford protection to labor, and highlights "the
principle of shared responsibility" between workers and employers to promote industrial peace.
Article 248(a) of the Labor Code, considers it an unfair labor practice when an employer interferes, restrains or
coerces employees in the exercise of their right to self-organization or the right to form association. The right to
self-organization necessarily includes the right to collective bargaining.
If an employer interferes in the selection of its negotiators or coerces the Union to exclude from its panel of
negotiators a representative of the Union, and if it can be inferred that the employer adopted the said act to yield
adverse effects on the free exercise to right to self-organization or on the right to collective bargaining of the
employees, ULP under Article 248(a) in connection with Article 243 of the Labor Code is committed.
Substantial Evidence required to support the claim of ULP under the Labor Code.
In order to show that the employer committed ULP under the Labor Code, substantial evidence is required to
support the claim. Substantial evidence has been defined as such relevant evidence as a reasonable mind might
accept as adequate to support a conclusion. In the case at bar, the Union bases its claim of interference on the
alleged suggestions of Diokno to exclude Umali from the Union‘s negotiating panel.
The circumstances that occurred during the negotiation do not show that the suggestion made by Diokno to
Divinagracia is an anti-union conduct from which it can be inferred that the Bank consciously adopted such act to
yield adverse effects on the free exercise of the right to self-organization and collective bargaining of the
employees, especially considering that such was undertaken previous to the commencement of the negotiation and
simultaneously with Divinagracia‘s suggestion that the bank lawyers be excluded from its negotiating panel.
The records show that after the initiation of the collective bargaining process, with the inclusion of Umali in the
Union‘s negotiating panel, the negotiations pushed through. The complaint was made only on August 16, 1993
after a deadlock was declared by the Union on June 15, 1993.
It is clear that such ULP charge was merely an afterthought. The accusation occurred after the arguments and
differences over the economic provisions became heated and the parties had become frustrated. It happened after
the parties started to involve personalities. As the public respondent noted, passions may rise, and as a result,
suggestions given under less adversarial situations may be colored with unintended meanings. 49 Such is what
appears to have happened in this case.
The Duty to Bargain Collectively

If at all, the suggestion made by Diokno to Divinagracia should be construed as part of the normal relations and
innocent communications, which are all part of the friendly relations between the Union and Bank.
The Union alleges that the Bank violated its duty to bargain; hence, committed ULP under Article 248(g) when it
engaged in surface bargaining. It alleged that the Bank just went through the motions of bargaining without any
intent of reaching an agreement, as evident in the Bank‘s counter-proposals. It explained that of the 34 economic
provisions it made, the Bank only made 6 economic counterproposals.
Surface Bargaining
Surface bargaining is defined as "going through the motions of negotiating" without any legal intent to reach an
agreement. The resolution of surface bargaining allegations never presents an easy issue. The determination of
whether a party has engaged in unlawful surface bargaining is usually a difficult one because it involves, at bottom,
a question of the intent of the party in question, and usually such intent can only be inferred from the totality of
the challenged party‘s conduct both at and away from the bargaining table. 51 It involves the question of whether
an employer‘s conduct demonstrates an unwillingness to bargain in good faith or is merely hard bargaining.52
The Union has not been able to show that the Bank had done acts, both at and away from the bargaining table,
which tend to show that it did not want to reach an agreement with the Union or to settle the differences between
it and the Union. Admittedly, the parties were not able to agree and reached a deadlock. However, it is herein
emphasized that the duty to bargain "does not compel either party to agree to a proposal or require the making of
a concession."53 Hence, the parties‘ failure to agree did not amount to ULP under Article 248(g) for violation of the
duty to bargain.
In view of the finding of lack of ULP based on Article 248(g), the accusation that the Bank made bad-faith
provisions has no leg to stand on.
While the refusal to furnish requested information is in itself an unfair labor practice, and also supports the
inference of surface bargaining. We, likewise, find that the Union failed to substantiate its claim that the Bank
refused to furnish the information it needed.
Umali, in a meeting dated May 18, 1993, requested the Bank to validate its guestimates on the data of the rank
and file. However, Umali failed to put his request in writing as provided for in Article 242(c) of the Labor Code. The
Union, did not, as the Labor Code requires, send a written request for the issuance of a copy of the data about the
Bank‘s rank and file employees. Moreover, as alleged by the Union, the fact that the Bank made use of the
aforesaid guestimates, amounts to a validation of the data it had used in its presentation.
Estoppel not ApplicableIn the Case at Bar

The respondent Bank argues that the petitioner is estopped from raising the issue of ULP when it signed the new
CBA.
In the case, however, the approval of the CBA and the release of signing bonus do not necessarily mean that the
Union waived its ULP claim against the Bank during the past negotiations. After all, the conclusion of the CBA was
included in the order of the SOLE, while the signing bonus was included in the CBA itself. Moreover, the Union
twice filed a motion for reconsideration respecting its ULP charges against the Bank before the SOLE.
The Union Did Not EngageIn Blue-Sky Bargaining

Blue-Sky Bargaining is defined as "unrealistic and unreasonable demands in negotiations by either or both labor
and management, where neither concedes anything and demands the impossible." It actually is not collective
bargaining at all. (Robert‘s Dictionary of Industrial Relations (Revised Edition, 1971, p. 51).
We do not agree that the Union is guilty of ULP for engaging in blue-sky bargaining or making exaggerated or
unreasonable proposals. The Bank failed to show that the economic demands made by the Union were
exaggerated or unreasonable. The minutes of the meeting show that the Union based its economic proposals on
data of rank and file employees and the prevailing economic benefits received by bank employees from other
foreign banks doing business in the Philippines and other branches of the Bank in the Asian region.
While the approval of the CBA and the release of the signing bonus did not estop the Union from pursuing its
claims of ULP against the Bank, we find the latter did not engage in ULP. We, likewise, hold that the Union is not
guilty of ULP.
PHILIPPINE CARPET EMPLOYEES ASSOCIATION vs. HON. STO. TOMAS

[G.R. No. 168719, February 22, 2006]
Facts:
Philippine Carpet Manufacturing Corporation is engaged in the business of manufacturing wool and yarn carpets
and rugs. The Corporation also had 100% equity investments in the following corporations: Pacific Carpet Mills
Corporation (PCMC-USA) which sold carpets and mats on wholesale basis; Pacific Carpet Manufacturing Corporation
(PCMC-Clark) which manufactured hand-tufted and machine-tufted carpets and rugs; and the Philippine Woolen
Spinning Corporation (PWSC) which manufactured wool yarn. The Corporation also owned 17.95% of the shares of
stocks in DI Security and General Services, Inc., and 2.20% of such shares in the Manila Peninsula Hotel, Inc. The
Corporation employed 473 employees, 355 of whom were members of the sole bargaining unit of the employees
therein, the Philippine Carpet Employees Association (Union for brevity).
In a letter dated February 10, 2004 addressed to the Corporation‘s Assistant Vice President for Administration,
Manuel Ike Diaz, the Union proposed the holding of a conference between representatives of the Union and the
Corporation on February 24, 2004, to commence negotiations. Appended to the letter were proposals on revisions
of the previous CBA.
The Corporation did not respond to the letter. Diaz issued a Memorandum informing all employees that a
comprehensive cost reduction program would be implemented by the Corporation on April 15, 2004, "on account of
depressed business conditions brought about by the currency crisis in Southeast Asia, the Middle East war and the
9/11 incident in the United States of America.
Of the 88 employees who were terminated from employment, 77 were Union members, including Edgardo
Villanueva, who was elected Union officer after the personnel reduction program commenced.
Frustrated at the Corporation‘s reason for retrenchment, the Union filed a notice of strike with the DOLE.
Negotiations before the National Conciliation and Mediation Board ensued, but the Corporation stood pat on its
stance for a moratorium on increases in wages and benefits. The Union rejected this and accused the Corporation
of union busting, as 77 of its members were dismissed.
The Union filed a petition with the DOLE for the Secretary of Labor and Employment (SOLE) to assume jurisdiction
over the labor dispute involving economic issues on wage increases and certain benefits and non-economic issues
such as scope of bargaining unit and on the issue of unfair labor practice.
The Union claimed that there was no valid economic reason to retrench employees, and that a "slump" in demand
of the Corporation‘s products was not a valid ground to dismiss employees. The Union also charged the
Corporation of resorting to a sinister scheme of re-channeling its carpet business to its wholly owned subsidiary,
PCMC-Clark, while negotiations for a new CBA were ongoing. According to the Union, this was also to justify
the dismissal of the 77 Union members and bust the Union in the process. The Union insisted that the
Corporation was guilty of unfair labor practice.
The Union maintained that in dismissing its employees, the Corporation violated the mandatory 30-day notice rule
because such employees received the notice of termination on March 13, 2004 (Saturday),
to take effect the following working day, March 15, 2004 (Monday). It stressed that the 30-day mandatory notice
could not be substituted by paying the affected employees their respective one month salaries.
Corporation alleged that based on the documents submitted to the SOLE, it suffered a sharp decline in business in
terms of volume and income derived since 2001, caused by the Asian financial crisis and later aggravated by the
9/11 incident in the U.S. and the ongoing war in the Middle East. The Corporation went on to explain that its
income from the domestic market and export operations declined sharply: from its export operations, its income
of P28,855,000.00 in 2001 dropped to P23,927,000.00 in 2002; and, thereafter, to P5,796,000.00 in 2003.
On June 23, 2004, the SOLE rendered a Decision granting wage increases totaling P8,039,330.00 to the employees
for the three years of the CBA. Relative to increased benefits for uniform, Christmas package, rice subsidy, and
early retirement plan/separation pay, the SOLE ordered the retention of the status quo. However, the SOLE denied
the demand of the Union as to the scope of the bargaining unit.
The SOLE likewise affirmed the termination of the 88 employees on the ground that, if not for the personnel
reduction program. The Union thereafter filed a petition for certiorari with the CA which rendered judgment
dismissing the petition for lack of merit. The appellate court ruled that the Corporation failed to prove that the
SOLE committed grave abuse of discretion amounting to excess or lack of jurisdiction in issuing the decision.
The appellate court affirmed the finding of the SOLE that there was a slump in the demand of the Corporation‘s
products, holding that while low volume of work was not listed as a valid ground for dismissal under Articles 282
and 283 of the Labor Code of the Philippines, it nevertheless justified the dismissal on the ground of redundancy.
Issue:
Whether or not respondent corporation is guilty of unfair labor practice because of dismissing the 77 union
members and bust the union in the process.
Ruling:
The petition is meritorious.
1. Retrenchment
Retrenchment is an authorized cause for the termination of employment under Article 283 of the Labor Code.
Retrenchment is defined as the termination of employment initiated by the employer through no fault of the
employee and without prejudice to the latter, resorted by management during periods of business recession,
industrial depression or seasonal fluctuations or during lulls over shortage of materials. It is a reduction in
manpower, a measure utilized by an employer to minimize business losses incurred in the operation of its
business.
In Lopez Sugar Corporation v. Federation of Free Workers, the phrase "to prevent losses" was defined to mean
that retrenchment or termination of the services of some employees is authorized to be undertaken by the
employer sometime before the losses anticipated are actually sustained or realized. It is not, in other words, the
intention of the lawmaker to compel the employer to stay his hand and keep all his employees until sometime after
losses shall have, in fact, materialized; if such an intent were expressly written into the law, that law may well be
vulnerable to constitutional attack as taking property from one man to give to another. This is simple enough.
The prerogative of an employer to retrench its employees must be exercised only as a last resort, considering that
it will lead to the loss of the employees‘ livelihood. It is justified only when all other less drastic means have been
tried and found insufficient or inadequate.48 Moreover, the employer must prove the requirements for a valid
retrenchment by clear and convincing evidence; otherwise, said ground for termination would be susceptible to
abuse by scheming employers who might be merely feigning losses or reverses in their business ventures in order
to ease out employees.
The requirements are:
(1) that the retrenchment is reasonably necessary and likely to prevent business losses which, if already
incurred, are not merely de minimis, but substantial, serious, actual and real, or if only expected, are
reasonably imminent as perceived objectively and in good faith by the employer; (2) that the employer
served written notice both to the employees and to the Department of Labor and Employment at least one
month prior to the intended date of retrenchment; (3) that the employer pays the retrenched employees
separation pay equivalent to one month pay or at least ½ month pay for every year of service, whichever
is higher; (4) that the employer exercises its prerogative to retrench employees in good faith for the
advancement of its interest and not to defeat or circumvent the employees‘ right to security of tenure; and
(5) that the employer used fair and reasonable criteria in ascertaining who would be dismissed and who
would be retained among the employees, such as status (i.e., whether they are temporary, casual, regular
or managerial employees), efficiency, seniority, physical fitness, age, and financial hardship for certain
workers.
What the law speaks of is serious business losses or financial reverses. Sliding incomes or decreasing gross
revenues are not necessarily losses, much less serious business losses within the meaning of the law. The bare fact
that an employer may have sustained a net loss, such loss, per se, absent any other evidence on its impact on the
business, nor on expected losses that would have been incurred had operations been continued, may not amount
to serious business losses mentioned in the law.50 The employer must also show that its losses increased through a
period of time and that the condition of the company will not likely improve in the near future.
2. Redundancy
Redundancy, on the other hand, exists when the service capability of the work force is in excess of what is
reasonably needed to meet the demands of the enterprise. A redundant position is one rendered superfluous by
any number of factors, such as overhiring of workers, decreased volume of business, dropping of a particular
product line previously manufactured by the company, or phasing out of a service activity previously undertaken by
the business. Under these conditions, the employer has no legal obligation to keep in its payroll more employees
than are necessary for the operation of its business.
For the implementation of a redundancy program to be valid, the employer must comply with the following
requisites: (1) written notice served on both the employees and the Department of Labor and Employment at least
one month prior to the intended date of retrenchment; (2) payment of separation pay equivalent to at least one
month pay for every year of service, whichever is higher; (3) good faith in abolishing the redundant positions; and
(4) fair and reasonable criteria in ascertaining what positions are to be declared redundant and accordingly
abolished.
3. Respondent corporation failed to produce clear evidence for valid retrenchment.

Respondents failed to adduce clear and convincing evidence to prove the confluence of the essential requisites for
a valid retrenchment of its employees. We believe that respondents acted in bad faith in terminating the
employment of the members of petitioner Union.
Corporation, in fact, amassed substantial earnings from 1999 to 2003. It found no need to appropriate its retained
earnings except on March 23, 2001, when it appropriated P60,000,000.00 to increase production capacity.
The appropriation of P20,000,000.00 by the respondent Corporation on September 16, 2004 was made barely five
months after the 77 Union members were dismissed on the ground that respondent Corporation was suffering from
"chronic depression." Cash dividends were likewise declared on March 29, 2004, barely two weeks after it
implemented its "retrenchment program."
There is likewise no justification for the hiring of more than 100 new employees, more than the number of those
who were retrenched, as well as the order authorizing full blast overtime work for six hours daily. All these are
inconsistent with the intransigent claim that respondent Corporation was impelled to retrench its employees
precisely because of low demand for its products and other external causes.
Admittedly, the net income of respondent Corporation of P46,559,917.00 in 2001 decreased to P37,764,303.00 in
2002. However, such decrease ensued because respondent Corporation declared cash dividends for its
shareholders amounting to P28,000,000.00.
It also appears that respondent Corporation‘s personnel costs decreased to P97,971,479.00. There was thus no
reason for respondent Corporation to implement its "retrenchment program" and terminate the 88 employees.
The net income of the respondent Corporation of P39,553,028.00 in 2002 decreased to P12,729,776.00 in 2003.It
bears stressing, however, that the stockholders received cash dividends in the total amount of P12,259,473.00.
That respondents acted in bad faith in retrenching the 77 members of petitioner is buttressed by the fact that Diaz
issued his Memorandum announcing the cost-reduction program on March 9, 2004, after receipt of the February
10, 2004 letter of the Union president which included the proposal for additional benefits and wage increases to be
incorporated in the CBA for the ensuing year.
Moreover, respondent Corporation failed to exhaust all other means to avoid further losses without retrenching its
employees, such as utilizing the latter‘s respective forced vacation leaves. Respondents also failed to use fair and
reasonable criteria in implementing the retrenchment program, and instead chose to retrench 77 of the members
of petitioner out of the dismissed 88 employees. Worse, respondent Corporation hired new employees and even
rehired the others who had been "retrenched."
Respondents failed to prove that there was a drastic or severe decrease in the product sales or that it suffered
severe business losses within an interval of three (3) months from January 2004 to March 9, 2004 when Diaz
issued said Memorandum.
4. Since termination illegal, members are entitled to reinstatement with full backwages.
The retrenchment effected by respondent Corporation is invalid due to a substantive defect, non-compliance with
the substantial requirements to effect a valid retrenchment; it necessarily follows that the termination of the
employment of petitioner Union‘s members on such ground is, likewise, illegal. As such, they (petitioner Union‘s
members) are entitled to reinstatement with full backwages. However, in the case of those employees-members of
petitioner Union who had received their respective separation pay, the amounts of such payments shall be
deducted from the backwages due them. Where reinstatement is no longer feasible because the positions they
previously held no longer exist, respondent Corporation shall pay the employees-members of petitioner Union
backwages plus, in lieu of reinstatement, separation pay equivalent to one month pay, or one-half month pay for
every year of service, whichever is higher.
ST. JOHN COLLEGES, INC. vs. ST. JOHN ACADEMY FACULTY EMPLOYEES UNION
[G.R. No. 167892, October 27, 2006]
Facts:
Prior to 1998, petitioner offered a secondary course only. The high school, which it employed, then employed
about 80 teaching and non-teaching personnel who were members of the St. John Academy Faculty & Employees
Union (Union).
The Collective Bargaining Agreement (CBA) between SJCI and the Union was set to expire on May 31, 1997.
During the ensuing collective bargaining negotiations, SJCI rejected all the proposals of the Union for an increase in
worker‘s benefits. This resulted to a bargaining deadlock which led to the holding of a valid strike by the Union on
November 10, 1997. In order to end the strike, on November 27, 1997, SJCI and the Union, through the efforts of
the National Conciliation and Mediation Board (NCMB), agreed to refer the labor dispute to the Secretary of Labor
and Employment (SOLE) for assumption of jurisdiction.
After which, the strike ended and classes resumed. Pending resolution of the labor dispute before the SOLE, the
Board of Directors of SJCI approved on February 22, 1998 a resolution recommending the closure of the high
school which was approved by the stockholders on even date because of the irreconcilable differences between the
school management and the Academy‘s Union particularly the safety of our students and the financial aspect of the
ongoing CBA negotiations.
Subsequently, some teaching and non-teaching personnel of the high school agreed to the closure. On April 2,
1998, SJCI informed the DOLE that as of March 31, 1998, 51 employees had received their separation
compensation package while 25 employees refused to accept the same.
On May 4, 1998, the 25 employees conducted a protest action within the perimeter of the high school. The Union
filed a notice of strike with the NCMB only on May 7, 1998.
On May 21, 1998, the 25 employees filed a complaint for unfair labor practice (ULP), illegal dismissal and non-
payment of monetary benefits against SJCI before the NLRC which was docketed as RAB-IV-5-10039-98-L. The
Union members alleged that the closure of the high school was done in bad faith in order to get rid of the Union
and render useless any decision of the SOLE on the CBA deadlocked issues.
Labor Arbiter Antonio dismissed the Union‘s complaint for ULP and illegal dismissal while granting SJCI‘s petition to
declare the strike illegal coupled with a declaration of loss of employment status of the 25 Union members involved
in the strike.
On June 28, 2002, the NLRC rendered judgment reversing the decision of the Labor Arbiter. It found SJCI guilty of
ULP and illegal dismissal and ordered it to reinstate the 25 employees to their former positions without loss of
seniority rights and other benefits, and with full backwages.
On appeal, the Court of Appeals, affirmed with modification the decision of the NLRC wherein the two month
unworked summer vacation should excluded.
Issue:
Whether or not St. John Colleges is guilty of unfair labor practice through its act of closing the academy.
Ruling:
The petition lacks merit.
1. Closure. The closure was done to defeat the parties‘ agreement to refer the labor dispute to the SOLE; to
unilaterally end the bargaining deadlock; to render nugatory any decision of the SOLE; and to circumvent the
Union‘s right to collective bargaining and its members‘ right to security of tenure.
Under Article 283 of the Labor Code, the following requisites must concur for a valid closure of the business: (1)
serving a written notice on the workers at least one (1) month before the intended date thereof; (2) serving a
notice with the DOLE one month before the taking effect of the closure; (3) payment of separation pay equivalent
to one (1) month or at least one half (1/2) month pay for every year of service, whichever is higher, with a fraction
of at least six (6) months to be considered as a whole year; and (4) cessation of the operation must be bona
fide. It is not disputed that the first two requisites were satisfied. The third requisite would have been satisfied
were it not for the refusal of the herein private respondents to accept the separation compensation package.
The instant case, thus, revolves around the fourth requisite, i.e., whether SJCI closed the high school in good faith.
Whether or not the closure of the high school was done in good faith is a question of fact and is not reviewable by
this Court in a petition for review on certiorari save for exceptional circumstances. In fine, the finding of the NLRC,
which was affirmed by the Court of Appeals, that SJCI closed the high school in bad faith is supported by
substantial evidence and is, thus, binding on this Court. Consequently, SJCI is liable for ULP and illegal dismissal.
Whether SJCI acted in bad faith depends on the particular facts as established by the evidence on record. Bad faith
is, after all, an inference which must be drawn from the peculiar circumstances of a case. The two decisive factors
in determining whether SJCI acted in bad faith are (1) the timing of, and reasons for the closure of the high school,
and (2) the timing of, and the reasons for the subsequent opening of a college and elementary department, and,
ultimately, the reopening of the high school department by SJCI after only one year from its closure.
Under these circumstances, it is not difficult to discern that the closure was done to defeat the parties‘ agreement
to refer the labor dispute to the SOLE; to unilaterally end the bargaining deadlock; to render nugatory any decision
of the SOLE; and to circumvent the Union‘s right to collective bargaining and its members‘ right to security of
tenure. By admitting that the closure was due to irreconcilable differences between the Union and school
management, specifically, the financial aspect of the ongoing CBA negotiations, SJCI in effect admitted that it
wanted to end the bargaining deadlock and eliminate the problem of dealing with the demands of the Union. This
is precisely what the Labor Code abhors and punishes as unfair labor practice since the net effect is
to defeat the Union’s right to collective bargaining.
SJCI contends that these circumstances do not establish its bad faith in closing down the high school. Rather, it
claims that it was forced to close down the high school due to alleged difficult labor problems that it encountered
while dealing with the Union since 1995, specifically, the Union‘s illegal demands in violation of R.A. 6728 or the
"Government Assistance to Students and Teachers in Private Education Act." Under R.A. 6728, the income from
tuition fee increase is to be used as follows: (a) 70% of the tuition fee shall go to the payment of salaries, wages,
allowances, and other benefits of teaching and non-teaching personnel, and (b) 20% of the tuition fee increase
shall go to the improvement or modernization of the buildings, equipment, and other facilities as well as payment
of the cost of operations.
We are not persuaded.
These alleged difficult labor problems merely show that SJCI and the Union had disagreements regarding workers‘
benefits which are normal in any business establishment. If SJCI found the Union‘s demands excessive, its remedy
under the law is to refer the matter for voluntary or compulsory dispute resolution. Besides, this incident
complained of occurred in 1995, which could hardly establish the good faith of SJCI or justify the closure in 1998.
Anent the Union‘s claim for the unimplemented 20% tuition fee increase in 1996, suffice it to say that it is
erroneous to rule on said issue since the same was submitted before the Voluntary Arbitrator and is not on appeal
before this Court. Besides, by referring the labor dispute to the Voluntary Arbitrator, the parties themselves
acknowledged that there is a sufficient mechanism to resolve the said dispute. Again, we fail to see how this
alleged labor problem in 1996 shows the good faith of SJCI in closing the high school in 1998.
At any rate, even assuming that the Union‘s demands were illegal or excessive, the important and crucial point is
that these alleged illegal or excessive demands did not justify the closure of the high school and do not, in any
way, establish SJCI‘s good faith. The employer cannot unilaterally close its establishment on the pretext
that the demands of its employees are excessive. As already discussed, neither party is obliged to give-in to
the other‘s excessive or unreasonable demands during collective bargaining, and the remedy in such case is to
refer the dispute to the proper tribunal for resolution. This was what SJCI and the Union did when they referred
the 1997 CBA bargaining deadlock to the SOLE; however, SJCI pre-empted the resolution of the dispute by closing
the high school. SJCI disregarded the whole dispute resolution mechanism and undermined the Union‘s right to
collective bargaining when it closed down the high school while the dispute was still pending with the SOLE .
The Labor Code does not authorize the employer to close down the establishment on the ground of illegal or
excessive demands of the Union. Instead, aside from the remedy of submitting the dispute for voluntary or
compulsory arbitration, the employer may file a complaint for ULP against the Union for bargaining in bad faith. If
found guilty, this gives rise to civil and criminal liabilities and allows the employer to implement a lock out, but not
the closure of the establishment resulting to the permanent loss of employment of the whole workforce.
In fine, SJCI undermined the Labor Code‘s system of dispute resolution by closing down the high school while the
1997 CBA negotiations deadlock issues were pending resolution before the SOLE. The closure was done in bad
faith for the purpose of defeating the Union‘s right to collective bargaining. Besides, as found by the NLRC, the
alleged illegality and excessiveness of the Union‘s demands were not sufficiently proved by SJCI. Even on the
assumption that the Union‘s demands were illegal or excessive, SJCI‘s remedy was to await the resolution by the
SOLE and to file a ULP case against the Union. However, SJCI did not have the power to take matters into its own
hands by closing down the school in order to get rid of the Union.
2. Circumstances lead to the inescapable conclusion that SJCI merely used the alleged safety and well-being of the
students as a subterfuge to justify its actions.
SJCI next argues that the Union unduly endangered the safety and well-being of the students who joined the valid
strike held on November 10, 1997, thus it closed down the high school on March 31, 1998. It claims that the Union
coerced the students to join the protest actions to pressure SJCI to give-in to the demands of the Union.
The Union categorically denied that it put the students in harm‘s way or pressured them to join the protest actions.
Given this denial by the Union, it was incumbent upon SJCI to prove that the students were actually harmed or put
in harm‘s way and that the Union coerced them to join the protest actions. The reason for this is that the
employer carries the burden of proof to establish that the closure of the business was done in good
faith. In the instant case, SJCI had the burden of proving that, indeed, the closure of the school was necessary to
uphold the safety and well-being of the students.
There is insufficient evidence to hold that the safety and well-being of the students were endangered and/or
compromised, and that the Union was responsible therefor. Even assuming arguendo that the students‘ safety and
well-being were jeopardized by the said protest actions, the alleged threat to the students‘ safety and well-being
had long ceased by the time the high school was closed. Moreover, the parents were vehemently opposed to the
closure of the school because there was no basis to claim that the students‘ safety was at risk. Taken together,
these circumstances lead to the inescapable conclusion that SJCI merely used the alleged safety and well-being of
the students as a subterfuge to justify its actions.
3. Pieces of evidence regarding the subsequent reopening of the high school after only one year from its closure
further show that the high school‘s closure was done in bad faith.
SJCI next contends that the subsequent reopening of the high school after only one year from its closure did not
show that the previous decision to close the high school was tainted with bad faith because the reopening was
done due to the clamor of the high school‘s former students and their parents. It claims that its former students
complained about the cramped classrooms in the schools where they transferred.
The contention is untenable.

First, the fact that after one year from the time it closed its high school, SJCI opened a college and elementary
department, and reopened its high school department showed that it never intended to cease operating as an
educational institution. Second, there is evidence on record contesting the alleged reason of SJCI for reopening the
Finally, when SJCI reopened its high school, it did not rehire the Union members. Evidently, the closure had
achieved its purpose, that is, to get rid of the Union members.
Clearly, these pieces of evidence regarding the subsequent reopening of the high school after only one year from
its closure further show that the high school‘s closure was done in bad faith.
Lastly, SJCI asserts that the strike conducted by the 25 employees on May 4, 1998 was illegal for failure to take the
necessary strike vote and give a notice of strike. However, protest actions of the Union cannot be considered a
strike because, by then, the employer-employee relationship has long ceased to exist because of the previous
closure of the high school on March 31, 1998.
In sum, the timing of, and the reasons for the closure of the high school and its reopening after only one year from
the time it was closed down, show that the closure was done in bad faith for the purpose of circumventing the
Union‘s right to collective bargaining and its members‘ right to security of tenure. Consequently, SJCI is liable for
ULP and illegal dismissal.
SAN MIGUEL FOODS, INC. vs. SAN MIGUEL CORPORATION EMPLOYEES UNION-PTGWO
[G.R. No. 168569, October 5, 2007]
Facts:
On November 9, 1992, some employees of San Miguel Foods, Inc‘s Finance Department, through the Union
represented by Edgar Moraleda, brought a grievance against Finance Manager Gideon Montesa (Montesa), for
"discrimination, favoritism, unfair labor practices, promoting divisiveness, etc, before SMFI Plant Operations
Manager George Nava in accordance with Step 1 of the grievance machinery. The Union sought the "1. review,
evaluation & upgrading of all Finance staff and 2. Promotion of G.Q. Montesa to other SMC affiliate[s] &
subsidiaries."
SMFI informed the Union that it planned to address the grievance through a "work management review" to be
completed by March 1993. However, it was not completed by March 1993, prompting the Union to, elevate the
grievance to Step 2.
Almost 9 months after the grievance meeting was held or on October 6, 1993, SMFI rendered a "Decision on Step
1 Grievance" stating that it was still in the process of completing the "work management review," hence, the
Union‘s requests could not be granted.
The Union filed a complaint on October 20, 1993 before the NLRC, Arbitration Branch, against SMFI, its President
Amadeo P. Veloso, and its Finance Manager Montesa for "unfair labor practice, [and] unjust discrimination in
matters of promotion . . . " It prayed that SMFI et al. be ordered to promote the therein named employees "with
the corresponding pay increases, etc.‖
SMFI et al. filed a motion to dismiss, 8contending that the issues raised in the complaint were grievance issues and,
therefore, "should be resolved in the grievance machinery. The Labor Arbiter granted SMFI et al.‘s motion to
dismiss and ordered the remand of the case to the grievance machinery for completion of the proceedings.
On appeal, to the NLRC by "Motion for Reconsideration/Appeal", such was granted and accordingly ordered the
Labor Arbiter to continue the proceedings on the Union‘s complaint. Hence, SMFI filed a petition for certiorari with
SC which they referred the case to the CA pursuant to St. Martin Funeral Homes v. NLRC.
Court of Appeals denied SMFI et al.‘s petition for certiorari, it holding that the Labor Arbiter has jurisdiction over
the complaint of the Union, they having violated the seniority rule under the CBA by appointing and promoting
certain employees which amounted to a ULP.
Issues:
Whether or not the labor arbiter has jurisdiction over the case.
Whether or not SMFI is guilty of unfair labor practice.
Ruling:
SMFI argues that the allegations in the Union‘s complaint filed before the Labor Arbiter do not establish a cause of
action for ULP, the Union having merely contended that SMFI was guilty thereof without specifying the ultimate
facts upon which it was based. It cites Section 1 of Rule 8 of the Rules of Court as applying suppletorily to the
proceedings before the Labor Arbiter. Thus, SMFI concludes that the Labor Arbiter has no jurisdiction over its
complaint.
The jurisdiction of Labor Arbiters, enumerated in Article 217 of the Labor Code, includes complaints for ULP.
Indeed, the particular acts of ULP alleged to have been committed by SMFI were not specified; neither were the
ultimate facts in support thereof. In its Position Paper, however, the Union detailed the particular acts of ULP
attributed to SMFI and the ultimate facts in support thereof.
Section 7, Rule V of the New Rules of Procedure of the NLRC provides: The proceedings before the Labor
Arbiter shall be non-litigious in nature. The technicalities of law and procedure and the rules
obtaining in the courts of law shall not strictly apply thereto. The Labor Arbiter may avail himself of all
reasonable means to ascertain the facts of the controversy speedily, including ocular inspection and examination of
well-informed persons.
SMFI guilty of ULP but only on the ground of violation of the CBA Agreement.
ULP on the ground of discrimination which must allege that that they were done to encourage or discourage
membership in a labor organization.
Based on Art. 248. Unfair labor practices of employers. – It shall be unlawful for an employer to commit any of the
following unfair labor practices: (e) To discriminate in regard to wages, hours of work, and other terms
and conditions of employment in order to encourage or discourage membership in any labor
organization.
membership in a labor organization. In fact, those promoted were members of the complaining Union. The
promotions do not thus amount to ULP under Article 248(e) of the Labor Code.
ULP on the ground of violation of Collective Bargaining Agreement –

As for the alleged ULP committed under Article 248(i), for violation of a CBA, this Article is qualified by Article 261
of the Labor Code, the pertinent portion of which latter Article reads: x x x violations of a Collective
Bargaining Agreement, except those which are gross in character, shall no longer be treated as unfair
labor practice and shall be resolved as grievances under the Collective Bargaining Agreement. For purposes of
this article, gross violations of Collective Bargaining Agreement shall mean flagrant and/or malicious
refusal to comply with the economic provisions of such agreement.
In Silva v. NLRC, for a ULP case to be cognizable by the Labor Arbiter, and the NLRC to exercise its appellate
jurisdiction, the allegations in the complaint should show prima facie theconcurrence of two things, namely: (1)
gross violation of the CBA; AND (2) the violation pertains to the economic provisions of the CBA.
First, The grievance machinery provision in the CBA is not an economic provision, however, hence, the second
requirement for a Labor Arbiter to exercise jurisdiction of a ULP is not present.
Second, the Union alleges that violated the Job Security provision in the CBA, specifically the seniority rule, in that
SMFI "appointed less senior employees to positions at its Finance Department, consequently intentionally by-
passing more senior employees who are deserving of said appointment."
Since the seniority rule in the promotion of employees has a bearing on salary and benefits, it may, following a
liberal construction (following the rule on construction in favor of labor) of Article 261 of the Labor Code, be
considered an "economic provision" of the CBA.
the Union charges SMFI to have promoted less senior employees, thus bypassing others who were more senior and
equally or more qualified. It may not be seriously disputed that this charge is a gross or flagrant violation of the
seniority rule under the CBA, a ULP over which the Labor Arbiter has jurisdiction.
The Court of Appeals having affirmed the NLRC decision finding that the Labor Arbiter has jurisdiction over the
Union‘s complaint and thus remanding it to the Labor Arbiter for continuation of proceedings thereon, the appellate
court‘s said finding may be taken to have been made only for the purpose of determining jurisdiction.
PUREFOODS CORP. vs. NAGKAKAISANG SAMAHANG MANGGAGAWA NG PUREFOODS RANK AND FILE
[G.R. No. 150896, August 28, 2008]
Facts:
The respondents in this case, 3 labor organizations and a federation: NAGSAMA-Purefoods), the exclusive
bargaining agent of the rank-and-file workers of Purefoods' meat division throughout Luzon; STFWU, in the farm
in Sto. Tomas, Batangas; PGFWU, of those in the poultry farm in Sta. Rosa, Laguna. These organizations were
affiliates of the federation, Purefoods Unified Labor Organization (PULO).
STFWU, NAGSAMA-Purefoods, and PGFWU submitted their respective proposals for CBA renewal, and their general
membership resolutions which, affirmed the organizations' affiliation with PULO. Purefoods refused to negotiate
with the unions should a PULO representative be in the panel. The parties then agreed to postpone the
negotiations indefinitely.
On July 24, 1995, however, the petitioner company concluded a new CBA with another union in its farm in Malvar,
Batangas. 5 days thereafter, at around 8:00pm, 4 company employees facilitated the transfer of around 23,000
chickens from the poultry farm in Sto. Tomas, Batangas (where STFWU was the exclusive bargaining agent) to that
in Malvar. The next day, the regular rank-and-file workers in the Sto. Tomas farm were refused entry in the
company premises; and on July 31, 1995, 22 STFWU members were terminated from employment. The farm
manager, supervisors and electrical workers of the Sto. Tomas farm, who were members of another union, were
nevertheless retained by the company in its employ.
Aggrieved by these developments, the respondent labor organizations jointly instituted a complaint for unfair labor
practice (ULP), illegal lockout/dismissal and damages, docketed with the Labor Arbitration Branch of the NLRC.
In the proceedings before the Labor Arbiter, Purefoods interposed, among others, the defenses that PULO was not
a legitimate labor organization or federation for it did not have the required minimum number of member unions;
that the closure of the Sto. Tomas farm was not arbitrary but was the result of the financial non-viability of the
operations; STFWU, lost its status as bargaining representative when the Sto. Tomas farm was closed.
LA rendered a Decision dismissing the complaint.
NLRC reversed the ruling of the LA, saying that the company's refusal to recognize the labor organizations'
affiliation with PULO was unjustified considering that the latter had been granted the status of a federation by the
Bureau of Labor Relations; and that this refusal constituted undue interference in, and restraint on the exercise of
the employees' right to self-organization and free collective bargaining. The real motive of the company in the
sudden closure and the mass dismissal was union busting, as only the union members were locked out, and the
company subsequently resumed operations of the closed farm under a new contract with the landowner.
The petitioner corporation filed a Rule 65 petition before the CA who dismissed the petition outright for no proof of
authority to act for and on behalf of the corporation was submitted by the corporation's senior vice-president who
signed the non-forum shopping.
Petitioner instituted before us the instant petition for review on certiorari under Rule 45.
Issue:
Whether or not petitioner is guilty of ULP.
Whether or not the NLRC gravely abused its discretion.
Ruling:
The petition is denied.
When the petitioner is a corporation, the certification shall be executed by a natural person authorized by the
corporation's board of directors. While technical rules of procedure are not designed to frustrate the ends of
justice, they are provided to effect the proper and orderly disposition of cases and effectively prevent the clogging
of court dockets.
Section 1, Rule 65 of the Rules of Court mandates that the petition for certiorari shall be accompanied by a sworn
certification of non-forum shopping. When the petitioner is a corporation, the certification shall be executed by a
natural person authorized by the corporation's board of directors, and proof of such authority must be attached to
the petition. Failure to attach to the certification any proof of the signatory's authority is a sufficient ground for the
dismissal of the petition.
In the instant case, the senior vice-president of the petitioner corporation signed the certificate of non-forum
shopping. No proof of his authority to sign the said certificate was, however, attached to the petition. Thus,
applying settled jurisprudence,
we find that the CA committed no error when it dismissed the petition.
The Court cannot even be liberal in the application of the rules because liberality is warranted only in instances
when there is substantial compliance with the technical requirements in pleading and practice, and when there is
sufficient explanation that the non-compliance is for a justifiable cause, such that the outright dismissal of the case
will defeat the administration of justice. Here, the petitioner corporation did not present a reasonable explanation
for its non-compliance with the rules. Further, it cannot be said that petitioner substantially complied therewith,
because it did not attach to its motion for reconsideration any proof of the authority of its signatory. It stands to
reason, therefore, that this Court now refuses to condone petitioner's procedural transgression.
We must reiterate that the rules of procedure are mandatory, except only when, for the most persuasive of
reasons, they may be relaxed to relieve a litigant of an injustice. While technical rules of procedure are not
designed to frustrate the ends of justice, they are provided to effect the proper and orderly disposition of cases and
effectively prevent the clogging of court dockets.
2. Petitioner guilty of ULP.

It is crystal clear that the closure of the Sto. Tomas farm was made in bad faith. Badges of bad faith are evident
from the following acts of the petitioner: it unjustifiably refused to recognize the STFWU's and the other unions'
affiliation with PULO; it concluded a new CBA with another union in another farm during the agreed indefinite
suspension of the collective bargaining negotiations; it surreptitiously transferred and continued its business in a
less hostile environment; and it suddenly terminated the STFWU members, but retained and brought the non-
members to the Malvar farm.
Petitioner presented no evidence to support the contention that it was incurring losses or that the subject farm's
lease agreement was pre-terminated. Ineluctably, the closure of the Sto. Tomas farm circumvented the labor
organization's right to collective bargaining and violated the members' right to security of tenure.
3. Need to prove grave abuse of discretion of the NLRC.

It was incumbent for petitioner to prove before the appellate court that the labor commission capriciously and
whimsically exercised its judgment tantamount to lack of jurisdiction, or that it exercised its power in an arbitrary
or despotic manner by reason of passion or personal hostility, and that its abuse of discretion is so patent and
gross as to amount to an evasion of a positive duty enjoined or to act at all in contemplation of law. Here, as
aforesaid, no such proof was adduced by petitioner. We, thus, declare that the NLRC ruling is not characterized by
grave abuse of discretion.
3. Award of moral and exemplary damages due to existence of ULP.

We deem as proper the award of moral and exemplary damages. We hold that the sudden termination of the
STFWU members is tainted with ULP because it was done to interfere with, restrain or coerce employees in the
exercise of their right to self-organization. Thus, the petitioner company is liable for the payment of the aforesaid
damages. Correcting the dispositive portion of the NLRC ruling, payment of P500,000.00 as moral and exemplary
damages should be made to the illegally dismissed STFWU members.
As to the order of reinstatement, since it is no longer feasible considering the length of time that the employees
have been out of petitioner's employ, the company is ordered to pay the illegally dismissed STFWU members
separation pay equivalent to one (1) month pay, or one-half (1/2) month pay for every year of service, whichever
is higher.
The releases and quitclaims, as well as the affidavits of desistance, signed by the employees, who were then
necessitous men at the time of execution of the documents, are declared invalid and ineffective.
GENERAL SANTOS COCA-COLA PLANT FREE WORKERS UNION-TUPAS vs. CCBPI(GEN. SANTOS CITY)
ET AL.
[G.R. No. 178647, Feb. 13, 2009]
Facts:
CCBPI experienced a decline in profitability due to the Asian economic crisis, decrease in sales, and tougher
competition. It implemented 3 waves of an Early Retirement Program. Meanwhile, there was an inter-office
memorandum mandating officers to put on hold ―all requests for hiring to fill in vacancies in both regular and
temporary positions in the Head Office and in the Plants.‖ Because several employees availed of the early
retirement program, vacancies were created in some departments, including the production department of CCBPI
Gen San, where members of petitioner Union worked.
Faced with the ―freeze hiring‖ directive, CCBPI engaged the services of JLBP Services Corporation (JLBP), a
company in the business of providing labor and manpower services, including janitorial services, messengers, and
office workers.
The Union petitioner filed with the National Conciliation and Mediation Board (NCMB), a Notice of Strike on the
ground of alleged unfair labor practice for contracting-out services regularly performed by union members (―union
busting‖). The parties failed to come to an amicable settlement. CCBPI filed a Petition for Assumption of
Jurisdiction with the Office of the Secretary of Labor and Employment. The Secretary of Labor issued an Order
enjoining the threatened strike and certifying the dispute to the NLRC for compulsory arbitration.
NLRC ruled that CCBPI was not guilty of unfair labor practice for contracting out jobs to JLBP. The NLRC anchored
its ruling on the validity of the ―Going-to-the-Market‖ (GTM) system implemented by the company, which called for
restructuring its selling and distribution system, leading to the closure of certain sales offices and the elimination of
conventional sales routes. The NLRC held that petitioner failed to prove by substantial evidence that the system
was meant to curtail the right to self-organization of petitioner‘s members.
The CA upheld the NLRC‘s finding that CCBPI was not guilty of unfair labor practice. It found that JLBP was an
independent contractor and that the decision to contract out jobs was a valid exercise of management prerogative
to meet exigent circumstances.
Issue:
Whether or not CCBPI was guilty of unfair labor practice for contracting out jobs.
Ruling:
The petition is bereft of merit. Hence, we deny the Petition.
Dismissed for issues raised which are questions of facts.

First, an examination of the issues raised by petitioner reveals that they are questions of fact. The issues
raised, i.e., whether JLBP is an independent contractor, whether CCBPI‘s contracting-out of jobs to JLBP amounted
to unfair labor practice, and whether such action was a valid exercise of management prerogative, call for a re-
examination of evidence, which is not within the ambit of this Court‘s jurisdiction.
Moreover, factual findings of the NLRC, an administrative agency deemed to have acquired expertise in matters
within its jurisdiction, are generally accorded not only respect but finality especially when such factual findings are
affirmed by the CA.
The company’s action to contract did not constitute unfair labor practice as this was not directed at
the members’ right to self-organization.
Second, the NLRC found – and the same was sustained by the CA – that the company‘s action to contract-out the
services and functions performed by Union members did not constitute unfair labor practice as this was not
directed at the members‘ right to self-organization.
Article 248 of the Labor Code provides: It shall be unlawful for an employer to commit any of the following unfair
labor practices:
x x x (c) To contract out services or functions being performed by union members when such will interfere
with, restrain or coerce employees in the exercise of their right to self-organization; x x x
Unfair labor practice refers to ―acts that violate the workers‘ right to organize.‖ The prohibited acts are related to
the workers‘ right to self-organization and to the observance of a CBA. Without that element, the acts, even if
unfair, are not unfair labor practices.
Both the NLRC and the CA found that petitioner was unable to prove its charge of unfair labor practice. It was
the Union that had the burden of adducing substantial evidence to support its allegations of unfair labor
practice, which burden it failed to discharge.
DE LA SALLE UNIVERSITY ET AL. vs. DE LA SALLE UNIVERSITY EMPLOYEES ASSOCIATION

[G.R. No. 177283, April 7, 2009]
Facts:
In 2001, a group of respondents led by one Belen Aliazas (Aliazas group) filed a petition for conduct of elections
with the DOLE, alleging that the then incumbent officers of respondent had failed to call for a regular election since
1985.
Disputing the Aliazas group‘s allegation, respondent claimed that an election was conducted in 1987 but by virtue
of the enactment of Republic Act 6715, which amended the Labor Code, the term of office of its officers was
extended to 5 years or until 1992 during which a general assembly was held affirming their hold-over tenure until
the termination of collective bargaining negotiations; and that a collective bargaining agreement (CBA) was
executed only on March 30, 2000.
The DOLE-NCR held that the holdover authority of respondent‘s incumbent set of officers had been extinguished by
virtue of the execution of the CBA. It accordingly ordered the conduct of elections to be placed under the control
and supervision of its Labor Relations Division and subject to pre-election conferences.
Notwithstanding the conduct of election imposed, respondent called for a regular election on July 9, 2001, without
prior notice to the DOLE and without the conduct of pre-election conference, prompting the Aliazas group to file an
Urgent Motion for Intervention with the Bureau of Labor Relations (BLR) of the DOLE. The BLR granted the
Aliaza‘s group‘s motion for intervention directing to cease and desist from holding the general election of
DLSUEA officers.
The Aliazas group thereupon, via letter of August 7, 2001 to Brother Rolando Dizon, FSC, President of petitioner
DLSU, requested the University ―to please put on escrow all union dues/agency fees and whatever money
considerations deducted from salaries of concerned co-academic personnel until such time that an election of union
officials has been scheduled and subsequent elections has been held.
Thus, DLSU decided that, the hold-over authority of your incumbent set of officers has been considered
extinguished and an election of new union officers, to be conducted and supervised by the DOLE has been directed
to be held. It decided the following saying that it does not want itself to be unnecessarily involved in your intra-
union dispute. This is the only way that the University can maintain neutrality on this matter of grave concern.
1. Establish a savings account for the Union where all collected union dues and agency fees will be deposited and
held in trust; and
2. Discontinue normal relations with any group within the Union including the incumbent set of officers.
Consequently, respondent to file a complaint against petitioners for Unfair Labor Practice (ULP complaint), claiming
that petitioners unduly interfered with its internal affairs and discriminated against its members.
During the pendency of its ULP complaint, respondent filed its First Notice of Strike with the Office of the Secretary
of Labor (OSL), charging petitioners for 1) gross violation of the CBA and 2) bargaining in bad faith which was
certified for compulsory arbitration to the NLRC (certified case). The certified case, docketed as NLRC-NCR
CC000222-02, was raffled to the NLRC Third Division.
In the meantime, Labor Arbiter Felipe Pati, by Decision of July 12, 2002, dismissed respondent‘s ULP
complaint. Respondent appealed to the NLRC, and was lodged at the NLRC Second Division.
While the dismissal of its ULP complaint was pending appeal before the NLRC Second Division, respondent, on
behalf of some of its members, filed four other cases against petitioners which were lodged at the
NLRC Second Division.
Respondent thereafter filed in the certified case which was lodged at the NLRC Third Division a motion to have its
four other cases and its ULP complaint then pending appeal before the NLRC Second Division to have these cases
―subsumed‖ in the certified case. The NLRC Third Division granted respondent‘s motion.
The NLRC Second Division, in the meantime, affirmed the dismissal by the Arbiter of respondent‘s ULP complaint.
The Court of Appeals Tenth Division, REVERSED the said Order of the NLRC Third Divisiom with respect to the
―subsuming‖ of respondent‘s ULP complaint, the ULP complaint having been, at the time the
NLRC Third Division Order was issued, ―already disposed of‖ (dismissed) by the Arbiter and was in fact pending
appeal before the NLRC Second Division.
The Court of Appeals First Division SET ASIDE the NLRC Second Division Order affirming the dismissal of
respondent‘s ULP complaint and ordered NLRC Second Division to transmit the entire records of the ULP complaint
to the NLRC Third Division where the ULP complaint had been ordered consolidated.
Hence, petitioner‘s petition for review on certiorari at bar.

Issues:
Whether or not the CA‘s tenth division‘s decision was correct in declaring the act of subsuming wrong.
Whether or not petitioner is guilty of unfair labor practice.
Ruling:
The petition is partly meritorious.
1. To transmit the records of respondent‘s ULP complaint to the NLRC Third Division, the same can no longer be
effected, the CA‘s Tenth Division ruling having become final.
The appellate court‘s Tenth Division Decision had become final and executory on July 11, 2004. Therefore, with
respect to the herein challenged Decision of the appellate court‘s First Division ordering the NLRC Second
Division to transmit the records of respondent‘s ULP complaint to the NLRC Third Division, the same can no longer
be effected, the appellate court‘s Tenth Division ruling having, it bears repeating, become final.
2. Pending the final resolution of the intra-union dispute, respondent‘s officers remained duly authorized to conduct
union affairs.
On the other matter raised by petitioners – that their acts of withholding union and agency dues and suspension of
normal relations with respondent‘s incumbent set of officers pending the intra-union dispute did not constitute
interference, the Court finds for respondent.
Pending the final resolution of the intra-union dispute, respondent‘s officers remained duly authorized to conduct
union affairs. The clarification letter by BLR Director Hans Leo J. Cacdac enlightens:
We take this opportunity to clarify that there is no void in the DLSUEA leadership. The Decision of DOLE-
NCR Regional Director should not be construed as an automatic termination of the incumbent
officers’ tenure of office. As duly-elected officers of the DLSUEA, their leadership is not deemed
terminated by the expiration of their terms of office, for they shall continue their functions and enjoy the
rights and privileges pertaining to their respective positions in a hold-over capacity, until their
successors shall have been elected and qualified.
It bears noting that at the time petitioners‘ questioned moves were adopted, a valid and existing CBA had been
entered between the parties. It thus behooved petitioners to observe the terms and conditions thereof bearing on
union dues and representation. It is axiomatic in labor relations that a CBA entered into by a legitimate labor
organization and an employer becomes the law between the parties, compliance with which is mandated by
express policy of the law.
3. The grant of nominal damages in order. No basis for exemplary damages.

Exemplary or corrective damages are imposed by way of example or correction for the public good in addition to
the moral, temperate, liquidated or compensatory damages. While the amount of exemplary damages need not be
proved, respondent must show proof of entitlement to moral, temperate or compensatory damages before the
Court may consider awarding exemplary damages. No such damages were prayed for, however, hence, the Court
finds no basis to grant the prayer for exemplary damages.
The grant of nominal damages and attorney‘s fees is in order.
In so far as the the NLRC Second Division Decision is REVERSED finding petitioners liable for Unfair Labor Practice,
and to pay respondent nominal damages in the amount of P250,000 and attorney‘s fees in the amount ofP50,000.
TUNAY NA PAGKAKAISA NG MANGGAGAWA SA ASIA BREWERY vs. ASIA BREWERY, INC.

[G.R. No. 162025, Aug. 3, 2010]
Facts:
Asia Brewery, Inc. (ABI) is engaged in the manufacture, sale and distribution of beer, shandy, bottled water and
glass products. ABI entered into a Collective Bargaining Agreement (CBA) with Bisig at Lakas ng mga Manggagawa
sa Asia-Independent (BLMA-INDEPENDENT), the exclusive bargaining representative of ABI‘s rank-and-file
employees.
Article I of the CBA defined the scope of the bargaining unit, as follows:
Section 1.Recognition. The COMPANY recognizes the UNION as the sole and exclusive bargaining representative of
all the regular rank-and-file daily paid employees within the scope of the appropriate bargaining unit with respect
to rates of pay, hours of work and other terms and conditions of employment. The UNION shall not represent or
accept for membership employees outside the scope of the bargaining unit herein defined.
Section 2.Bargaining Unit. The bargaining unit shall be comprised of all regular rank-and-file daily-paid employees
of the COMPANY. However, the following jobs/positions as herein defined shall be excluded from the bargaining
unit, to wit:
1. Managers
2. Assistant Managers
3. Section Heads
4. Supervisors
5. Superintendents
6. Confidential and Executive Secretaries
7. Personnel, Accounting and Marketing Staff
8. Communications Personnel
9. Probationary Employees
10. Security and Fire Brigade Personnel
11. Monthly Employees
12. Purchasing and Quality Control Staff
Subsequently, a dispute arose when ABI‘s management stopped deducting union dues from eighty-one (81)
employees, believing that their membership in BLMA-INDEPENDENT violated the CBA. Eighteen (18) of these
affected employees are QA Sampling Inspectors/Inspectresses and Machine Gauge Technician who formed part of
the Quality Control Staff. Twenty (20) checkers are assigned at the Materials Department of the Administration
Division, Full Goods Department of the Brewery Division and Packaging Division. The rest are secretaries/clerks
directly under their respective division managers.
BLMA-INDEPENDENT claimed that ABI‘s actions restrained the employees‘ right to self-organization and brought
the matter to the grievance machinery. As the parties failed to amicably settle the controversy, BLMA-
INDEPENDENT lodged a complaint before the National Conciliation and Mediation Board (NCMB). The parties
eventually agreed to submit the case for arbitration to resolve the issue of "whether or not there is restraint to
employees in the exercise of their right to self-organization."
Voluntary Arbitrator sustained the BLMA-INDEPENDENT after finding that the positions of the subject employees
qualify under the rank-and-file category because their functions are merely routinary and clerical. On appeal, the
CA reversed the Voluntary Arbitrator.
BLMA-INDEPENDENT filed a motion for reconsideration. In the meantime, a certification election was held on
August 10, 2002 wherein petitioner Tunay na Pagkakaisa ng Manggagawa sa Asia (TPMA) won. As the incumbent
bargaining representative of ABI‘s rank-and-file employees claiming interest in the outcome of the case, petitioner
filed with the CA an omnibus motion for reconsideration of the decision and intervention, with attached petition
signed by the union officers.11 Both motions were denied by the CA.12
Issues:
Whether or not the 81 employees are excluded from and are not eligible for inclusion in the bargaining unit as
defined in the CBA;
Whether or not the ABI committed an act in restraining the employees in the exercise of their right to self-
organization;
Ruling:
1. Although Article 245 of the Labor Code limits the ineligibility to join, form and assist any labor organization to
managerial employees, jurisprudence has extended this prohibition to confidential employees or those who by
reason of their positions or nature of work are required to assist or act in a fiduciary manner to managerial
employees and hence, are likewise privy to sensitive and highly confidential records. Confidential employees are
thus excluded from the rank-and-file bargaining unit. The rationale for their separate category and disqualification
to join any labor organization is similar to the inhibition for managerial employees because if allowed to be
affiliated with a Union, the latter might not be assured of their loyalty in view of evident conflict of interests and
the Union can also become company-denominated with the presence of managerial employees in the Union
membership. Having access to confidential information, confidential employees may also become the source of
undue advantage. Said employees may act as a spy or spies of either party to a collective bargaining agreement.
In Philips Industrial Development, Inc. v. NLRC, this Court held that petitioner‘s "division secretaries, all Staff of
General Management, Personnel and Industrial Relations Department, Secretaries of Audit, EDP and Financial
Systems" are confidential employees not included within the rank-and-file bargaining unit. Earlier, in Pier 8 Arrastre
& Stevedoring Services, Inc. v. Roldan-Confesor, the court declared that legal secretaries who are tasked with,
among others, the typing of legal documents, memoranda and correspondence, the keeping of records and files,
the giving of and receiving notices, and such other duties as required by the legal personnel of the corporation, fall
under the category of confidential employees and hence excluded from the bargaining unit composed of rank-and-
file employees.
Also considered having access to "vital labor information" are the executive secretaries of the General Manager and
the executive secretaries of the Quality Assurance Manager, Product Development Manager, Finance Director,
Management System Manager, Human Resources Manager, Marketing Director, Engineering Manager, Materials
Manager and Production Manager.
In the present case, the CBA expressly excluded "Confidential and Executive Secretaries" from the rank-and-file
bargaining unit, for which reason ABI seeks their disaffiliation from the union. Petitioner, however, maintains that
except for Daisy Laloon, Evelyn Mabilangan and Lennie Saguan who had been promoted to monthly paid positions,
several secretaries/clerks are deemed included among the rank-and-file employees of ABI. It is rather curious that
there would be several secretaries/clerks for just one (1) department/division performing tasks which are mostly
routine and clerical. ABI insisted they fall under the "Confidential and Executive Secretaries" expressly excluded by
the CBA from the rank-and-file bargaining unit.
However, perusal of the job descriptions of these secretaries/clerks reveals that their assigned duties and
responsibilities involve routine activities of recording and monitoring, and other paper works for their respective
departments while secretarial tasks such as receiving telephone calls and filing of office correspondence appear to
have been commonly imposed as additional duties.
ABI failed to indicate who among these numerous secretaries/clerks have access to confidential data relating to
management policies that could give rise to potential conflict of interest with their Union membership. Clearly, the
rationale under our previous rulings for the exclusion of executive secretaries or division secretaries would have
little or no significance considering the lack of or very limited access to confidential information of these
secretaries/clerks.
We thus hold that the secretaries/clerks, numbering about forty (40), are rank-and-file employees and not
confidential employees.
With respect to the Sampling Inspectors/Inspectresses and the Gauge Machine Technician, there seems no dispute
that they form part of the Quality Control Staff who, under the express terms of the CBA, fall under a distinct
category. But we disagree with ABI‘s contention that the twenty (20) checkers are similarly confidential employees
being "quality control staff" entrusted with the handling and custody of company properties and sensitive
information.
Again, the job descriptions of these checkers assigned in the storeroom section of the Materials Department,
finishing section of the Packaging Department, and the decorating and glass sections of the Production Department
plainly showed that they perform routine and mechanical tasks preparatory to the delivery of the finished products.
Consequently, we hold that the twenty (20) checkers may not be considered confidential employees under the
category of Quality Control Staff who were expressly excluded from the CBA of the rank-and-file bargaining unit.
Confidential employees are defined as those who (1) assist or act in a confidential capacity, (2) to persons who
formulate, determine, and effectuate management policies in the field of labor relations. The two (2) criteria are
cumulative, and both must be met if an employee is to be considered a confidential employee – that is, the
confidential relationship must exist between the employee and his supervisor, and the supervisor must handle the
prescribed responsibilities relating to labor relations. The exclusion from bargaining units of employees who, in the
normal course of their duties, become aware of management policies relating to labor relations is a principal
objective sought to be accomplished by the "confidential employee rule.
There is no showing in this case that the secretaries/clerks and checkers assisted or acted in a confidential
capacity to managerial employees and obtained confidential information relating to labor relations policies.
Not being confidential employees, the secretaries/clerks and checkers are not disqualified from membership in the
Union of respondent‘s rank-and-file employees.
2. Unfair labor practice refers to "acts that violate the workers‘ right to organize." The prohibited acts are related to
the workers‘ right to self-organization and to the observance of a CBA. For a charge of unfair labor practice to
prosper, it must be shown that ABI was motivated by ill will, "bad faith, or fraud, or was oppressive to labor, or
done in a manner contrary to morals, good customs, or public policy, and, of course, that social humiliation,
wounded feelings or grave anxiety resulted from ABI‘s act in discontinuing the union dues deduction from those
employees it believed were excluded by the CBA. Considering that the herein dispute arose from a simple
disagreement in the interpretation of the CBA provision on excluded employees from the bargaining unit,
respondent cannot be said to have committed unfair labor practice that restrained its employees in the exercise of
their right to self-organization, nor have thereby demonstrated an anti-union stance.
MANILA MINING CORP. EMPLOYEES ASSOCIATION-FFW vs. MANILA MINING CORP.

[G.R. No. 178222-23, Sept. 29, 2010]
Facts:
Respondent Manila Mining Corporation (MMC) is a publicly-listed corporation engaged in large-scale mining for gold
and copper ore. MMC is required by law to maintain a tailings containment facility to store the waste material
generated by its mining operations. Consequently, MMC constructed several tailings dams to treat and store its
waste materials. One of these dams it constructed in 1993 and was operated under a permit issued by the DENR,
through its Environmental Management Bureau (EMB) in Butuan City, Agusan del Norte.
Eleven (11) rank-and-file employees of MMC, who later became complainants before the labor arbiter, attended the
organizational meeting of MMC-Makati Employees Association-Federation of Free Workers Chapter (Union). The
Union filed with the DOLE all the requirements for its registration, acquired its legitimate registration status and
subsequently, submitted letters to MMC relating its intention to bargain collectively. The Union submitted its
Collective Bargaining Agreement (CBA) proposal to MMC.
Upon expiration of the tailings permit, DENR-EMB did not issue a permanent permit due to the inability of MMC to
secure an Environmental Compliance Certificate (ECC). MMC was compelled to temporarily shut down its mining
operations, resulting in the temporary lay-off of more than 400 employees in the mine site.
MMC called for the suspension of negotiations on the CBA with the Union until resumption of mining operations.
Among the employees laid-off, the 11 complainants, together with the Union filed a complaint before the labor
arbiter praying for reinstatement, recognition of the Union as the sole and exclusive representative of its rank-and-
file employees, and payment of moral and exemplary damages and attorney‘s fees.
The labor arbiter ruled in favor of MMC and held that the temporary shutdown of the mining operation, as well as
the temporary lay-off of the employees, is valid. The NLRC modified the judgment of the labor arbiter and ordered
the payment of separation pay equivalent to one month pay for every year of service. It ratiocinated that the
temporary lay-off, which exceeded more than six (6) months, had the effect of severance of the employer-
employee relationship. The Court of Appeals maintained the order to pay separation pay but set aside the MMC
liability to pay the Union attorney‘s fees equivalent to 10% of the award.
Issue:
Whether or not MMC is guilty of unfair labor practice
Ruling:
The lay-off is neither illegal nor can it be considered as unfair labor practice.
Despite all efforts exerted by MMC, it did not succeed in obtaining the consent of the residents of the community
where the tailings pond would operate, one of the conditions imposed by DENR-EMB in granting its application for
a permanent permit. It is precisely MMC‘s faultless failure to secure a permit which caused the temporary shutdown
of its mining operations. As aptly put by the Court of Appeals:
The evidence on record indeed clearly shows that MMC‘s suspension of its mining operations was bonafide and the
reason for such suspension was supported by substantial evidence. MMC cannot conduct mining operations without
a tailings disposal system. For this purpose, MMC operates TP No. 7 under a valid permit from the Department of
Environment and Natural Resources (DENR) through its Environmental Management Bureau (EMB). In fact, a
"Temporary Authority to Construct and Operate" was issued on January 25, 2001 in favor of MMC valid for a period
of six (6) months or until July 25, 2001. The NLRC did not dispute MMC‘s claim that it had timely filed an
application for renewal of its permit to operate TP No. 7 but that the renewal permit was not immediately released
by the DENR-EMB, hence, MMC was compelled to temporarily shut down its milling and mining operations. Here, it
is once apparent that the suspension of MMC‘s mining operations was not due to its fault nor was it necessitated by
financial reasons. Such suspension was brought about by the non-issuance of a permit for the continued operation
of TP No. 7 without which MMC cannot resume its milling and mining operations. x x x.21 [Emphasis supplied.]
Unfair labor practice cannot be imputed to MMC since, as ruled by the Court of Appeals, the call of MMC for a
suspension of the CBA negotiations cannot be equated to "refusal to bargain."
Article 252 of the Labor Code defines the phrase "duty to bargain collectively," to wit:
ARTICLE 252. Meaning of duty to bargain collectively. - The duty to bargain collectively means the
performance of a mutual obligation to meet and convene promptly and expeditiously in good faith for the
purpose of negotiating an agreement with respect to wages, hours of work and all other terms and
conditions of employment including proposals for adjusting any grievances or questions arising under such
agreements [and executing a contract incorporating such agreements] if requested by either party but
such duty does not compel any party to agree to a proposal or to make any concession.
For a charge of unfair labor practice to prosper, it must be shown that the employer was motivated by ill-will, bad
faith or fraud, or was oppressive to labor. The employer must have acted in a manner contrary to morals, good
customs, or public policy causing social humiliation, wounded feelings or grave anxiety. While the law makes it an
obligation for the employer and the employees to bargain collectively with each other, such compulsion does not
include the commitment to precipitately accept or agree to the proposals of the other. All it contemplates is that
both parties should approach the negotiation with an open mind and make reasonable effort to reach a common
ground of agreement.
The Union based its contention on the letter request by MMC for the suspension of the collective bargaining
negotiations until it resumes operations. Verily, it cannot be said that MMC deliberately avoided the negotiation. It
merely sought a suspension and in fact, even expressed its willingness to negotiate once the mining operations
resume. There was valid reliance on the suspension of mining operations for the suspension, in turn, of the CBA
negotiation. The Union failed to prove bad faith in MMC‘s actuations.
PRINCE TRANSPORT ET AL. vs. GARCIA ET AL.

[G.R. No. 167291, January 12, 2011]
Facts:
Prince Transport, Inc. (PTI) is a company engaged in the business of transporting passengers by land.
Respondents alleged in their complaints that: that they were hired by petitioner either as drivers, conductors,
mechanics or inspectors, except for respondent Diosdado Garcia, who was assigned as Operations Manager.; in
addition to their regular monthly income, they also received commissions equivalent to 8 to 10% of their wages.;
sometime in October 1997, the said commissions were reduced to 7 to 9%; this led respondents and other
employees of PTI to hold a series of meetings to discuss the protection of their interests as employees; these
meetings led Renato Claros, who is the president of PTI, to suspect that respondents are about to form a union; he
made known to Garcia his objection to the formation of a union; in December 1997, PTI employees requested for a
cash advance, but the same was denied by management which resulted in demoralization on the employees' ranks;
later, PTI acceded to the request of some, but not all, of the employees; the foregoing circumstances led
respondents to form a union for their mutual aid and protection; in order to block the continued formation of the
union, PTI caused the transfer of all union members and sympathizers to one of its sub-companies, Lubas
Transport (Lubas); despite such transfer, the schedule of drivers and conductors, as well as their company
identification cards, were issued by PTI; the daily time records, tickets and reports of the respondents were also
filed at the PTI office; and, all claims for salaries were transacted at the same office; later, the business of Lubas
deteriorated because of the refusal of PTI to maintain and repair the units being used therein, which resulted in the
virtual stoppage of its operations and respondents' loss of employment.
Petitioners, on the other hand, denied the material allegations of the complaints contending that herein
respondents were no longer their employees, since they all transferred to Lubas at their own request; petitioners
have nothing to do with the management and operations of Lubas as well as the control and supervision of the
latter's employees; petitioners were not aware of the existence of any union in their company and came to know of
the same only in June 1998 when they were served a copy of the summons in the petition for certification election
filed by the union; that before the union was registered on April 15, 1998, the complaint subject of the present
petition was already filed; that the real motive in the filing of the complaints was because PTI asked respondents
to vacate the bunkhouse where they (respondents) and their respective families were staying because PTI wanted
to renovate the same.
The Labor Arbiter ruled that petitioners are not guilty of unfair labor practice in the absence of evidence to show
that they violated respondents' right to self-organization. The Labor Arbiter also held that Lubas is the respondents'
employer and that it is an entity which is separate, distinct and independent from PTI. Nonetheless, the Labor
Arbiter found that Lubas is guilty of illegally dismissing respondents from their employment. The NLRC partly
sustained the Labor Arbiter‘s ruling.
The CA granted respondents' petition, ruling that petitioners are guilty of unfair labor practice; that Lubas is a mere
instrumentality, agent conduit or adjunct of PTI; and that petitioners' act of transferring respondents' employment
to Lubas is indicative of their intent to frustrate the efforts of respondents to organize themselves into a union.
Issues:
(1) Whether or not Lubas is a separate and independent entity from PTI
(2) Whether or not PTI is guilty of unfair labor practice
Held:
(1) The Court agrees with the CA that Lubas is a mere agent, conduit or adjunct of PTI. A settled formulation of
the doctrine of piercing the corporate veil is that when two business enterprises are owned, conducted and
controlled by the same parties, both law and equity will, when necessary to protect the rights of third parties,
disregard the legal fiction that these two entities are distinct and treat them as identical or as one and the same. In
the present case, it may be true that Lubas is a single proprietorship and not a corporation. However, petitioners'
attempt to isolate themselves from and hide behind the supposed separate and distinct personality of Lubas so as
to evade their liabilities is precisely what the classical doctrine of piercing the veil of corporate entity seeks to
prevent and remedy.
Thus, the Court agrees with the observations of the CA, to wit:
As correctly pointed out by petitioners, if Lubas were truly a separate entity, how come that it was Prince Transport
who made the decision to transfer its employees to the former? Besides, Prince Transport never regarded Lubas
Transport as a separate entity. In the aforesaid letter, it referred to said entity as "Lubas operations." Moreover, in
said letter, it did not transfer the employees; it "assigned" them. Lastly, the existing funds and 201 file of the
employees were turned over not to a new company but a "new management."
The Court also agrees with respondents that if Lubas is indeed an entity separate and independent from PTI why is
it that the latter decides which employees shall work in the former?
Moreover, petitioners failed to refute the contention of respondents that despite the latter's transfer to Lubas of
their daily time records, reports, daily income remittances of conductors, schedule of drivers and conductors were
all made, performed, filed and kept at the office of PTI. In fact, respondents' identification cards bear the name of
PTI. It may not be amiss to point out at this juncture that in two separate illegal dismissal cases involving different
groups of employees transferred by PTI to other companies, the Labor Arbiter handling the cases found that these
companies and PTI are one and the same entity; thus, making them solidarily liable for the payment of backwages
and other money claims awarded to the complainants therein.
Petitioners likewise aver that the CA erred and committed grave abuse of discretion when it ordered petitioners to
reinstate respondents to their former positions, considering that the issue of reinstatement was never brought up
before it and respondents never questioned the award of separation pay to them.
(2) As to whether petitioners are guilty of unfair labor practice, the Court finds no cogent reason to depart from the
findings of the CA that respondents' transfer of work assignments to Lubas was designed by petitioners as a
subterfuge to foil the former's right to organize themselves into a union. Under Article 248 (a) and (e) of the Labor
Code, an employer is guilty of unfair labor practice if it interferes with, restrains or coerces its employees in the
exercise of their right to self-organization or if it discriminates in regard to wages, hours of work and other terms
and conditions of employment in order to encourage or discourage membership in any labor organization.
Indeed, evidence of petitioners' unfair labor practice is shown by the established fact that, after respondents'
transfer to Lubas, petitioners left them high and dry insofar as the operations of Lubas was concerned. The Court
finds no error in the findings and conclusion of the CA that petitioners "withheld the necessary financial and logistic
support such as spare parts, and repair and maintenance of the transferred buses until only two units remained in
running condition." This left respondents virtually jobless.
PARK HOTEL ET AL. vs. SORIANO ET AL.

[G.R. No. 17118, September 10, 2012]
Facts:
Soriano was initially hired by Park Hotel but was transferred to Burgos Corporation. Gonzales and Badilla were
employees of Burgos Corporation. Burgos is a sister company of Park Hotel. Harbutt and Percy are the General
Manager and owner, respectively, of Park Hotel. Percy, Harbutt and Atty. Roberto Enriquez are also the officers and
stockholders of Burgos Corporation. Soriano, Gonzales and Badilla were dismissed from work for allegedly stealing
company properties. As a result, respondents filed complaints for illegal dismissal, unfair labor practice, before the
Labor Arbiter (LA). In their complaints, respondents alleged that the real reason for their dismissal was that they
were organizing a union for the company's employees.
Issue:
Whether or not corporate officers are solidarily and personally liable in a case for illegal dismissal and unfair labor
practice
Ruling:
A corporation, being a juridical entity, may act only through its directors, officers and employees. Obligations
incurred by them, while acting as corporate agents, are not their personal liability but the direct accountability of
the corporation they represent. However, corporate officers may be deemed solidarily liable with the corporation
for the termination of employees if they acted with malice or bad faith. In the present case, the lower tribunals
unanimously found that Percy and Harbutt, in their capacity as corporate officers of Burgos, acted maliciously in
terminating the services of respondents without any valid ground and in order to suppress their right to self-
organization. Section 31 of the Corporation Code makes a director personally liable for corporate debts if he
willfully and knowingly votes for or assents to patently unlawful acts of the corporation. It also makes a director
personally liable if he is guilty of gross negligence or bad faith in directing the affairs of the corporation. Thus,
Percy and Harbutt, having acted in bad faith in directing the affairs of Burgos, are jointly and severally liable with
the latter for respondents' dismissal.
GOYA, INC. vs. GOYA, INC. EMPLOYEES UNION-FFW

[G.R. No. 170054, January 21, 2013]
Facts:
Sometime in January 2004, petitioner Goya, Inc. (Company), a domestic corporation engaged in the manufacture,
importation, and wholesale of top quality food products, hired contractual employees from PESO Resources
Development Corporation (PESO) to perform temporary and occasional services in its factory in Parang, Marikina
City. This prompted respondent Goya, Inc. Employees Union-FFW (Union) to request for a grievance conference on
the ground that the contractual workers do not belong to the categories of employees stipulated in the existing
Collective Bargaining Agreement (CBA). When the matter remained unresolved, the grievance was referred to the
National Conciliation and Mediation Board (NCMB) for voluntary arbitration.
During the hearing on July 1, 2004, the Company and the Union manifested before Voluntary Arbitrator (VA)
Bienvenido E. Laguesma that amicable settlement was no longer possible; hence, they agreed to submit for
resolution the solitary issue of "[w]hether or not [the Company] is guilty of unfair labor acts in engaging the
services of PESO, a third party service provider[,] under the existing CBA, laws[,] and jurisprudence." Both parties
thereafter filed their respective pleadings.
The Union asserted that the hiring of contractual employees from PESO is not a management prerogative and in
gross violation of the CBA tantamount to unfair labor practice (ULP). It noted that the contractual workers engaged
have been assigned to work in positions previously handled by regular workers and Union members, in effect
violating Section 4, Article I of the CBA, which provides for three categories of employees in the Company, to wit:
Section 4.Categories of Employees. — The parties agree on the following categories of employees:
(a)Probationary Employee. — One hired to occupy a regular rank-and-file position in the Company and is
serving a probationary period. If the probationary employee is hired or comes from outside the Company
(non-Goya, Inc. employee), he shall be required to undergo a probationary period of six (6) months, which
period, in the sole judgment of management, may be shortened if the employee has already acquired the
knowledge or skills required of the job. If the employee is hired from the casual pool and has worked in the
same position at any time during the past two (2) years, the probationary period shall be three (3) months.
(b)Regular Employee. — An employee who has satisfactorily completed his probationary period and
automatically granted regular employment status in the Company.
(c)Casual Employee. — One hired by the Company to perform occasional or seasonal work directly
connected with the regular operations of the Company, or one hired for specific projects of limited duration
not connected directly with the regular operations of the Company.
It was averred that the categories of employees had been a part of the CBA since the 1970s and that due to this
provision, a pool of casual employees had been maintained by the Company from which it hired workers who then
became regular workers when urgently necessary to employ them for more than a year. Likewise, the Company
sometimes hired probationary employees who also later became regular workers after passing the probationary
period. With the hiring of contractual employees, the Union contended that it would no longer have probationary
and casual employees from which it could obtain additional Union members; thus, rendering inutile Section 1,
Article III (Union Security) of the CBA, which states:
Section 1.Condition of Employment. — As a condition of continued employment in the Company, all regular
rank-and-file employees shall remain members of the Union in good standing and that new employees
covered by the appropriate bargaining unit shall automatically become regular employees of the Company
and shall remain members of the Union in good standing as a condition of continued employment.
The Union moreover advanced that sustaining the Company's position would easily weaken and ultimately destroy
the former with the latter's resort to retrenchment and/or retirement of employees and not filling up the vacant
regular positions through the hiring of contractual workers from PESO, and that a possible scenario could also be
created by the Company wherein it could "import" workers from PESO during an actual strike.
In countering the Union's allegations, the Company argued that: (a) the law expressly allows contracting and
subcontracting arrangements through Department of Labor and Employment (DOLE) Order No. 18-02; (b) the
engagement of contractual employees did not, in any way, prejudice the Union, since not a single employee was
terminated and neither did it result in a reduction of working hours nor a reduction or splitting of the bargaining
unit; and (c) Section 4, Article I of the CBA merely provides for the definition of the categories of employees and
does not put a limitation on the Company's right to engage the services of job contractors or its management
prerogative to address temporary/occasional needs in its operation.
Issue:
Whether or not the voluntary artbitrator committed an error in declaring that the engagement of PESO is not
keeping with the intent and spirit of the CBA .
Ruling:
We confirm that the VA ruled on a matter that is covered by the sole issue submitted for voluntary arbitration.
Resultantly, the CA did not commit serious error when it sustained the ruling that the hiring of contractual
employees from PESO was not in keeping with the intent and spirit of the CBA. Indeed, the opinion of the VA is
germane to, or, in the words of the CA, "interrelated and intertwined with," the sole issue submitted for resolution
by the parties. This being said, the Company's invocation of Sections 4 and 5, Rule IV 20 and Section 5, Rule VI 21
of the Revised Procedural Guidelines in the Conduct of Voluntary Arbitration Proceedings dated October 15, 2004
issued by the NCMB is plainly out of order.
Likewise, the Company cannot find solace in its cited case of Ludo & Luym Corporation v. Saornido. 22 In Ludo, the
company was engaged in the manufacture of coconut oil, corn starch, glucose and related products. In the course
of its business operations, it engaged the arrastre services of CLAS for the loading and unloading of its finished
products at the wharf. The arrastre workers deployed by CLAS to perform the services needed were subsequently
hired, on different dates, as Ludo's regular rank-and-file employees. Thereafter, said employees joined LEU, which
acted as the exclusive bargaining agent of the rank-and-file employees. When LEU entered into a CBA with Ludo,
providing for certain benefits to the employees (the amount of which vary according to the length of service
rendered), it requested to include in its members' period of service the time during which they rendered arrastre
services so that they could get higher benefits.
Lastly, the Company kept on harping that both the VA and the CA conceded that its engagement of contractual
workers from PESO was a valid exercise of management prerogative. It is confused. To emphasize, declaring that a
particular act falls within the concept of management prerogative is significantly different from acknowledging that
such act is a valid exercise thereof. What the VA and the CA correctly ruled was that the Company's act of
contracting out/outsourcing is within the purview of management prerogative. Both did not say, however, that
such act is a valid exercise thereof. Obviously, this is due to the recognition that the CBA provisions agreed upon
by the Company and the Union delimit the free exercise of management prerogative pertaining to the hiring of
contractual employees. Indeed, the VA opined that "the right of the management to outsource parts of its
operations is not totally eliminated but is merely limited by the CBA," while the CA held that "[t]his management
prerogative of contracting out services, however, is not without limitation. . . . [These] categories of employees
particularly with respect to casual employees [serve] as limitation to [the Company's] prerogative to outsource
parts of its operations especially when hiring contractual employees."
A collective bargaining agreement is the law between the parties:
It is familiar and fundamental doctrine in labor law that the CBA is the law between the parties and they are
obliged to comply with its provisions. We said so in Honda Phils., Inc. v. Samahan ng Malayang Manggagawa sa
Honda:
A collective bargaining agreement or CBA refers to the negotiated contract between a legitimate labor organization
and the employer concerning wages, hours of work and all other terms and conditions of employment in a
bargaining unit. As in all contracts, the parties in a CBA may establish such stipulations, clauses, terms and
conditions as they may deem convenient provided these are not contrary to law, morals, good customs, public
order or public policy. Thus, where the CBA is clear and unambiguous, it becomes the law between the parties and
compliance therewith is mandated by the express policy of the law.
Moreover, if the terms of a contract, as in a CBA, are clear and leave no doubt upon the intention of
the contracting parties, the literal meaning of their stipulations shall control.
BAPTISTA ET AL. vs. VILLANUEVA ET AL.

[G.R. No. 194709, July 31, 2013]
Facts:
Petitioners were former union members of Radio Philippines Network Employees Union (RPNEU), a legitimate labor
organization and the sole and exclusive bargaining agent of the rank and file employees of Radio Philippines
Network (RPN), a government-sequestered corporation involved in commercial radio and television broadcasting
affairs, while the respondents were the union‘s elected officers and members.
On April 26, 2005, on suspicion of union mismanagement, petitioners, together with some other union members,
filed a complaint for impeachment of their union president, Reynato Siozon, before the executive board of RPN,
which was eventually abandoned. They later re-lodged the impeachment complaint, this time, against all the union
officers and members of RPNEU before the Department of Labor and Employment (DOLE). They likewise filed
various petitions for audit covering the period from 2000 to 2004.
Thereafter, cases were filed against the petitioners and several others for alleged violation of the union‘s
constitution and by-laws. After an exchange of communications between the grievance committee and the
petitioners, petitioners were, through a memorandum, served an expulsion notice from the union.
RPNEU‘s officers informed their company of the expulsion of petitioners and the 12 others from the union and
requested the management to serve them notices of termination from employment in compliance with their CBA‘s
union security clause. On February 17, 2006, RPN HRD Manager, Lourdes Angeles, informed petitioners and the 12
others of the termination of their employment effective March 20, 2006, enforcing Article II, Section 21 also known
as the union security clause of their current CBA.
Aggrieved, petitioners filed three (3) separate complaints for ULP against the respondents, which were later
consolidated, questioning legality of their expulsion from the union and their subsequent termination from
employment.
Issue:
Whether or not respondents committed unfair labor practices
Ruling:
The petition is bereft of merit.
The primary concept of ULP is embodied in Article 247 of the Labor Code, which provides:
Article 247. Concept of unfair labor practice and procedure for prosecution thereof.––Unfair labor practices violate
the constitutional right of workers and employees to self-organization, are inimical to the legitimate interests of
both labor and management, including their right to bargain collectively and otherwise deal with each other in an
atmosphere of freedom and mutual respect, disrupt industrial peace and hinder the promotion of healthy and
stable labor-management relations.
In essence, ULP relates to the commission of acts that transgress the workers‘ right to organize. As specified in
Articles 248 and 249 of the Labor Code, the prohibited acts must necessarily relate to the workers' right to self-
organization and to the observance of a CBA. Absent the said vital elements, the acts complained, although
seemingly unjust, would not constitute ULP
Based on RPNEU‘s Constitution and By-Laws, the charges against petitioners were not mere internal squabbles, but
violations that demand proper investigation because, if proven, would constitute grounds for their expulsion from
the union.
Besides, any supposed procedural flaw in the proceedings before the Committee was deemed cured when
petitioners were given the opportunity to be heard. Due process, as a constitutional precept, is satisfied when a
person was notified of the charge against him and was given an opportunity to explain or defend himself. In
administrative proceedings, the filing of charges and giving reasonable opportunity for the person so charged to
answer the accusations against him constitute the minimum requirements of due process.
It is well-settled that workers‘ and employers‘ organizations shall have the right to draw up their constitutions and
rules to elect their representatives in full freedom, to organize their administration and activities and to formulate
their programs. In this case, RPNEU‘s Constitution and By-Laws expressly mandate that before a party is allowed to
seek the intervention of the court, it is a pre-condition that he should have availed of all the internal remedies
within the organization. Petitioners were found to have violated the provisions of the union‘s Constitution and By-
Laws when they filed petitions for impeachment against their union officers and for audit before the DOLE without
first exhausting all internal remedies available within their organization. This act is a ground for expulsion from
union membership. Thus, petitioners‘ expulsion from the union was not a deliberate attempt to curtail or restrict
their right to organize, but was triggered by the commission of an act, expressly sanctioned by Section 2.5 of
Article IX of the union‘s Constitution and By-Laws.
For a charge of ULP against a labor organization to prosper, the onus probandi rests upon the party alleging it to
prove or substantiate such claims by the requisite quantum of evidence. In labor cases, as in other administrative
proceedings, substantial evidence or such relevant evidence as a reasonable mind might accept as sufficient to
support a conclusion is required. Moreover, it is indubitable that all the prohibited acts constituting unfair labor
practice should materially relate to the workers' right to self-organization.
Unfortunately, petitioners failed to discharge the burden required to prove the charge of ULP against the
respondents. Aside from their self-serving allegations, petitioners were not able to establish how they were
restrained or coerced by their union in a way that curtailed their right to self-organization. The records likewise
failed to sufficiently show that the respondents unduly persuaded management into discriminating against
petitioners. other than to bring to its attention their expulsion from the union, which in turn, resulted in the
implementation of their CBA' s union security clause.
TH SHOPFITTERS CORP. ET AL. vs. T&H SHOPFITTERS CORP. UNION

[G.R. No. 191714, February 26, 2014]
Facts:
On September 7, 2004, the T&H Shopfitters Corporation/ Gin Queen Corporation workers union (THS-GQ Union),
its officers and/or members of THS-GQ union, filed their Complaint7 for Unfair Labor Practice (ULP) by way of union
busting, and Illegal Lockout, with moral and exemplary damages and attorney‘s fees, against T&H Shopfitters
Corporation (T&H Shopfitters) and Gin Queen Corporation (Gin Queen) (collectively referred to as "petitioners"),
before the Labor Arbiter (LA).
Respondents treated T&H Shopfitters and Gin Queen as a single entity and their sole employer. In their desire to
improve their working conditions, respondents and other employees of petitioners held their first formal meeting on
November 23, 2003 to discuss the formation of a union. The following day or on November 24, 2003, seventeen
(17) employees were barred from entering petitioners‘ factory premises located in Castillejos, Zambales, and
ordered to transfer to T&H Shopfitters‘ warehouse at Subic Bay Freeport Zone (SBFZ) purportedly because of its
expansion. Afterwards, the said seventeen (17) employees were repeatedly ordered to go on forced leave due to
the unavailability of work.
On December 18, 2003, the Department of Labor and Employment (DOLE), Regional Office No. III issued a
certificate of registration in favor of THS-GQ Union.
On March 24, 2004, THS-GQ Union filed a petition for certification election. On July 12, 2004, an order was issued
to hold the certification election in both T&H Shopfitters and Gin Queen. Eventually, the certification election was
scheduled on October 11, 2004.
Meanwhile, through a memorandum, dated August 17, 2004, petitioner Ben Huang (Huang), Director for Gin
Queen, informed its employees of the expiration of the lease contract between Gin Queen and its lessor in
Castillejos, Zambales and announced the relocation of its office and workers to Cabangan, Zambales. Some of the
respondents, who visited the site in Cabangan, discovered that it was a "talahiban" or grassland. Later, the said
union officers and members were made to work as grass cutters in Cabangan, under the supervision of a certain
Barangay Captain Greg Pangan. Due to these circumstances, the employees assigned in Cabangan did not report
for work. As a consequence, the THS-GQ Union president was made to explain why he should not be terminated
for insubordination. The other employees who likewise failed to report in Cabangan were meted out with
suspension.
On October 10, 2004, petitioners sponsored a field trip to Iba, Zambales, for its employees. The officers and
members of the THS-GQ Union were purportedly excluded from the field trip. On the evening of the field trip, a
certain Angel Madriaga, a sales officer of petitioners, campaigned against the union in the forthcoming certification
election.
The following day or on October 11, 2004, the employees were escorted from the field trip to the polling center in
Zambales to cast their votes. On October 13, 2004, the remaining employees situated at the SBFZ plant cast their
votes as well. Due to the heavy pressure exerted by petitioners, the votes for "no union" prevailed. On October 14,
2004, the THS-GQ Union filed its protest with respect to the certification election proceedings.
Issue:
Whether or not acts of unfair labor practices were committed by petitioners against respondents
Ruling:
As to the issue of ULP, petitioners’ argument is utterly without merit.
In the case at bench, petitioners are being accused of violations of paragraphs (a), (c), and (e) of Article 257
(formerly Article 248) of the Labor Code, to wit:
Article 257. Unfair labor practices of employers.––It shall be unlawful for an employer to commit any of the
following unfair labor practices:
(a) To interfere with, restrain or coerce employees in the exercise of their right to self-
organization;
xxxx
(c) To contract out services or functions being performed by union members when such will
interfere with, restrain, or coerce employees in the exercise of their right to self-organization;
xxxx
(e) To discriminate in regard to wages, hours of work, and other terms and conditions of
employment in order to encourage or discourage membership in any labor organization.
xxx
The questioned acts of petitioners, namely: 1) sponsoring a field trip to Zambales for its employees, to the
exclusion of union members, before the scheduled certification election; 2) the active campaign by the sales officer
of petitioners against the union prevailing as a bargaining agent during the field trip; 3) escorting its employees
after the field trip to the polling center; 4) the continuous hiring of subcontractors performing respondents‘
functions; 5) assigning union members to the Cabangan site to work as grass cutters; and 6) the enforcement of
work on a rotational basis for union members, all reek of interference on the part of petitioners.
Indubitably, the various acts of petitioners, taken together, reasonably support an inference that, indeed, such
were all orchestrated to restrict respondents‘ free exercise of their right to self-organization. The Court is of the
considered view that petitioners‘ undisputed actions prior and immediately before the scheduled certification
election, while seemingly innocuous, unduly meddled in the affairs of its employees in selecting their exclusive
bargaining representative.
REVISED GUIDELINES OF THE NCMB FOR THE CONDUCT OF VOLUNTARY ARBITRATION

PROCEEDINGS
SANYO PHILIPPINE WORKERS UNION-PPSLU vs. CANIZARES

[G.R. No. 101619, July 8, 1992]
Facts:
PSSLU had an existing CBA with Sanyo Philippines Inc. effective July 1, 1989 to June 30, 1994. The same CBA
contained a union security clause which provided: xxx members must retain their membership in good standing in
the union as condition of his/her continued employment with the company. The union shall have the right to
demand from the company the dismissal of the members of the union by reason of xxx their having formed,
organized, joined, affiliated, supported another labor organization xxx
PSSLU through its national and local presidents, wrote another letter to Sanyo recommending the dismissal of the
following non-union workers: Bernardo Yap, Arnel Salvo, Renato Baybon, Reynaldo Ricohermoso, Salvador Solibel,
Benito Valencia, and Allan Misterio, allegedly because: 1) they were engaged and were still engaging in anti-union
activities; 2) they willfully violated the pledge of cooperation with PSSLU which they signed and executed on
February 14, 1990; and 3) they threatened and were still threatening with bodily harm and even death the officers
of the union.
Also recommended for dismissal were the following union members who allegedly joined, supported and
sympathized with a minority union, KAMAO: Gerardo Lasala, Legardo Tangkay, Alexander Atanacio, and Leonardo
Dionisio.
As per the attached letter from the local union President SPWU and the federation President, PSSLU, requesting
management to put the respondent employees on preventive suspension, effective immediately, and the company
having received no information on whether said employees appealed to PSSLU, it considered them dismissed as of
March 23, 1991.
On May 20, 1991, the dismissed employees filed a complaint with the NLRC for illegal dismissal. Named respondent
were PSSLU and Sanyo. On June 20, 1991, PSSLU filed a motion to dismiss the complaint alleging that the Labor
Arbiter was without jurisdiction over the case, relying on Article 217 (c) of P.D. 442, as amended by Section 9 of
Republic Act No. 6715 which provides that cases arising from the interpretation or implementation of the collective
bargaining agreements shall be disposed of by the labor arbiter by referring the same to the grievance machinery
and voluntary arbitration.
On August 7, 1991, the respondent Labor Arbiter issued the first questioned order. It held that: xxx xxx xxx
While there are seemingly contradictory provisions in the aforecited article of the Labor Code, the better
interpretation will be to give effect to both, and termination dispute being clearly spelled as falling under the
jurisdiction of the Labor Arbiter, the same shall be respected. The jurisdiction of the grievance machinery and
voluntary arbitration shall cover other controversies. However, the resolution of the instant issue shall be
suspended until both parties have fully presented their respective positions.
PSSLU filed another motion to resolve motion to dismiss complaint with a prayer that the Labor Arbiter resolve the
issue of jurisdiction. On September 4, 1991, the respondent Labor Arbiter issued the second questioned order
which held that it was assuming jurisdiction over the complaint of private respondents, in effect, holding that it had
jurisdiction over the case.
PSSLU filed this petition alleging that public respondent Labor Arbiter cannot assume jurisdiction over the complaint
of public respondents because it had no jurisdiction over the dispute subject of said complaint. It is their
submission that under Article 217 (c) of the Labor Code, in relation to Article 261 thereof, as well as Policy
Instruction No. 6 of the Secretary of Labor, respondent Arbiter has no jurisdiction and authority to take cognizance
of the complaint brought by private respondents which involves the implementation of the union security clause of
the CBA. The function of the Labor Arbiter under the same law and rule is to refer this case to the grievance
machinery and voluntary arbitration.
In its comment, private respondents argue that Article 217(a) 2 and 4 of the Labor Code is explicit, to wit:
Art. 217. Jurisdiction of the Labor Arbiters and the Commission.
a) Except as otherwise provided under this Code, the Labor Arbiters shall have original and exclusive jurisdiction to
hear and decide . . . the following cases involving all workers, . . . :
xxx xxx xxx
2) Termination disputes,
xxx xxx xxx
4) Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations.
Issue:
Whether or not the resolution between an employee versus the union and the employer need to be referred to the
labor arbiter.
Ruling:
1. Only disputes involving the union and the company shall be referred to the grievance machinery or
voluntary arbitrators.
It is clear from Article 217 that termination cases fall under the jurisdiction of the Labor Arbiter. It should be noted
however that said article at the outset excepted from the said provision cases otherwise provided for in other
provisions of the same Code, thus the phrase "Except as otherwise provided under this Code . . . ." Under
paragraph (c) of the same article, it is expressly provided that "cases arising from the interpretation or
implementation of collective bargaining agreements and those arising from the interpretation and enforcement of
company personnel policies shall be disposed of by the Labor Arbiter by referring the same to the grievance
machinery and voluntary arbitration as may be provided in said agreements.
It was provided in the CBA executed between PSSLU and Sanyo that a member's voluntary resignation from
membership, willful refusal to pay union dues and his/her forming, organizing, joining, supporting, affiliating or
aiding directly or indirectly another labor union shall be a cause for it to demand his/her dismissal from the
company. The demand for the dismissal and the actual dismissal by the company on any of these grounds is an
enforcement of the union security clause in the CBA. This act is authorized by law provided that enforcement
should not be characterized by arbitrariness (Manila Mandarin Employee Union v. NLRC, G.R. No. 76989, 29 Sept.
1987, 154 SCRA 368) and always with due process (Tropical Hut Employees Union v. Tropical Food Market, Inc., L-
43495-99, Jan. 20, 1990).
The reference to a Grievance Machinery and Voluntary Arbitrators for the adjustment or resolution of grievances
arising from the interpretation or implementation of their CBA and those arising from the interpretation or
enforcement of company personnel policies is mandatory. The law grants to voluntary arbitrators original and
exclusive jurisdiction to hear and decide all unresolved grievances arising from the interpretation or implementation
of the Collective Bargaining Agreement and those arising from the interpretation or enforcement of company
personnel policies (Art. 261, Labor Code).
The failure of the parties to the CBA to establish the grievance machinery and its unavailability is not an excuse for
the Labor Arbiter to assume jurisdiction over disputes arising from the implementation and enforcement of a
provision in the CBA. In the existing CBA between PSSLU and Sanyo, the procedure and mechanics of its
establishment had been clearly laid out. All that needs to be done to set the machinery into motion is to call for the
convening thereof. If the parties to the CBA had not designated their representatives yet, they should be ordered
to do so.The procedure introduced in RA 6715 of referring certain grievances originally and exclusively to the
grievance machinery and when not settled at this level, to a panel of voluntary arbitrators outlined in CBA's does
not only include grievances arising from the interpretation or implementation of the CBA but applies as well to
those arising from the implementation of company personnel policies. No other body shall take cognizance of these
cases. The last paragraph of Article 261 enjoins other bodies from assuming jurisdiction thereof:
The commission, its Regional Offices and the Regional Directors of the Department of Labor and Employment shall
not entertain disputes, grievances or matters under the exclusive and original jurisdiction of the Voluntary
Arbitrator or panel of voluntary arbitrators and shall immediately dispose and refer the same to the grievance
machinery or voluntary arbitration provided in the Collective Bargaining Agreement.
In the instant case, however, We hold that the Labor Arbiter and not the Grievance Machinery provided for in the
CBA has the jurisdiction to hear and decide the complaints of the private respondents. While it appears that the
dismissal of the private respondents was made upon the recommendation of PSSLU pursuant to the
union security clause provided in the CBA, We are of the opinion that THESE FACTS DO NOT COME
WITH IN THE PHRASE "grievances arising from the interpretation or implementation of (their)
Collective Bargaining Agreement and those arising from the interpretation or enforcement of
company personnel policies," the jurisdiction of which pertains to the Grievance Machinery or thereafter, to a
voluntary arbitrator or panel of voluntary arbitrators.
Article 260 of the Labor Code on grievance machinery and voluntary arbitrator states that "(t)he parties to a
Collective Bargaining Agreement shall include therein provisions that will ensure the mutual observance of its terms
and conditions. They shall establish a machinery for the adjustment and resolution of grievances arising from the
interpretation or implementation of their Collective Bargaining Agreement and those arising from the interpretation
or enforcement of company personnel policies." It is further provided in said article that the parties to a CBA shall
name or designate their respective representatives to the grievance machinery and if the grievance is not settled in
that level, it shall automatically be referred to voluntary arbitrators (or panel of voluntary arbitrators) designated in
advance by the parties. It need not be mentioned that the parties to a CBA are the union and the company.
Hence, only disputes involving the union and the company shall be referred to the grievance
machinery or voluntary arbitrators.
In the instant case, both the union and the company are united or have come to an agreement regarding the
dismissal of private respondents. No grievance between them exists which could be brought to a grievance
machinery. The problem or dispute in the present case is between the union and the company on the one hand
and some union and non-union members who were dismissed, on the other hand. The dispute has to be settled
before an impartial body. The grievance machinery with members designated by the union and the
company cannot be expected to be impartial against the dismissed employees. Due process demands that
the dismissed workers grievances be ventilated before an impartial body. Since there has already been an actual
termination, the matter falls within the jurisdiction of the Labor Arbiter.
NAVARRO III vs. DAMASCO

[G.R. No. 101875, July 14, 1995]
Facts:
Petitioner Navarro was employed as typist of private respondent at its plant in Bukidnon. Petitioner went to visit
Mercy Baylas, a co-employee, at the ladies' dormitory inside the compound of private respondent. Upon seeing
petitioner, Baylas hid behind the divider at the reception room. Rosemarie Basa and Isabel Beleno, co-boarders of
Baylas, told petitioner that Baylas was not at the dormitory and advised him to stop courting her because she had
no feelings towards him. Afterwards, the two left leaving petitioner alone in the room. When he peeped behind the
divider, he saw Baylas, followed her, and after taking hold of her left hand, pulled her towards him. The force
caused her to fall on the floor. He then placed himself on top of her. She resisted and futilely struggled to free
herself from his grasp. The dormitory housekeeper, responded to Baylas' shouts for help, and saw petitioner
embracing and kissing Baylas. She tried to separate petitioner from Baylas but to no avail. So she went outside and
asked Basa, Beleno and Subong to help Baylas. According to the medical report issued by Dr. Letecia P. Maraat,
Baylas complained of pains on her shoulder and left foot.
Petitioner was informed of the complaint against him and was placed under preventive suspension. In the report of
Densing who was the one who investigated the incident, he recommended that the maximum penalty be meted
out against petitioner. Petitioner was then dismissed from the service for having violated paragraph 3.B (Conduct
and Behavior) of the Code of Employee Discipline.
A decision was rendered by the Voluntary Arbitrator dismissing petitioner from his employment and holding that
private respondent did not violate the provisions of the grievance procedure under the Collective Bargaining
Agreement. Not satisfied with the decision, petitioner filed the instant petition.
Issues:
1. Whether or not the Voluntary Arbitrator exceeded in his authority in taking cognizance of the labor case?
2. Whether or not petitioner Navarro was denied due process of law because no hearing was held and he 3. was
not given an opportunity to cross-examine the witnesses.
Whether or not the quarrel between Baylas and him was a purely private affair.
Ruling:
1. No, the Voluntary Arbitrator did not exceed in his authority.
The instant case is not a grievance that must be submitted to the grievance machinery. What are subject of the
grievance procedure for adjustment and resolution are grievances arising from the interpretation or implementation
of the collective bargaining agreement. The acts of petitioner involved a violation of the Code of Employee
Discipline, particularly the provision penalizing the immoral conduct of employees. Consequently, there was no
justification for petitioner to invoke the grievance machinery provisions of the CBA.
The case of petitioner was submitted to voluntary arbitration by agreement of the president of the labor union to
which petitioner belongs, and his employer, through its personnel officer. Petitioner himself voluntarily submitted to
the jurisdiction of the Voluntary Arbitrator when he, through his counsel, filed his position paper with the Voluntary
Arbitrator and even submitted additional documentary evidence. In addition thereto, during the initial conference
on March 27, 1991, the parties manifested that they were not questioning the authority of the Voluntary Arbitrator.
It is the policy of the State to promote voluntary arbitration as a mode of settling labor.
2. NO, he was not denied of due process.
The essence of due process is simply an opportunity to be heard, or as applied to administrative proceedings, an
opportunity to explain one's side or an opportunity to seek a reconsideration of the action or ruling complained of.
A formal or trial-type hearing is not at all times and in all instances essential. The requirements are satisfied where
the parties are fair and reasonable opportunity to explain their side of the controversy at hand. What is frowned
upon is the absolute lack of notice and hearing.
Concerning the allegation that petitioner was not allowed to cross-examine the witnesses, the record shows that
the parties had agreed not to cross-examine their witnesses anymore.
3. NO, the quarrel was not a private affair.
The incident happened within the company premises, i.e. the ladies' dormitory which was located inside the plant
site, but both of them are employees of private respondent. Management would then be at the mercy of its
employees if it cannot enforce discipline within company premises solely because the quarrel is purely personal
matter. The harassment of an employee by a co-employee within the company premises even after office hours is
a work-related matter considering that the peace of the company is thereby affected. The Code of Employee
Discipline is very clear that immoral conduct "within the company premises regardless of whether or not [it is]
committed during working time" is punishable.
The pretext of petitioner that he was merely helping Baylas is belied by the eyewitnesses. Petitioner admitted that
it took Subong to pull him away from Baylas. His alleged act of chivalry is nothing more than a chance to gratify his
amorous feelings.
WHEREFORE, the Decision of the respondent Voluntary Arbitrator is AFFIRMED.
SAN MIGUEL CORPORATION vs. NLRC

[G.R. No. 108001, March 15, 1996]
Facts:
Private respondents, employed by petitioner San Miguel Corporation (SMC) as mechanics, machinists, and
carpenters, were and still are, bona fide officers and members of private respondent Ilaw at Buklod ng
Manggagawa.
On or about July 31, 1990, private respondents were served a Memorandum from petitioner Angel G. Roa, Vice-
President and Manager of SMC‘s Business Logistics Division (BLD), to the effect that they had to be seperated from
the service effective October 31, 1990 on the ground of ―redundancy or excesss personnel.‖ Respondent union, in
behalf of private respondents, opposed the intended dismissal and asked for a dialogue with management.
On February 25, 1991, respondents filed a complaint against petitioners for Illegal Dismissal and Unfair Labor
Practices, with a prayer for damages and attorney‘s fees, with the Arbitration Branch of respondent National Labor
Relations Commission. The complaint was assigned to Labor Arbiter Eduardo F. Carpio for hearing and proper
disposition.
On April 15, 1991, petitioners filed a motion to dismiss the complaint, alleging that respondent Labor Arbiter had
no jurisdiction over the subject matter of the complaint, and that respondent Labor Arbiter must defer
consideration of the unfair labor practice complaint until after the parties have gone through the grievance
procedure provided for in the existing Collective Bargaining Agreement (CBA). Respondent Labor Arbiter denied
this motion.
The petitioners appealed the denial to respondent Commission and were unimpressed by the grounds therefor,
thus, dismissed the appeal. Hence, the instant petition for certiorari.
Issues:
1. Whether or not the labor arbiter can exercise jurisdiction over the alleged illegal termination and ULP cases
without prior resort to the grievance and arbitration provided under the CBA.
2. Whether or not the strong state policy on the promotion of voluntary modes of settlement of labor disputes
crafted in the Constitution and the Labor Code dictates the submission of the CBA dispute to grievance and
arbitration.
Ruling:
FIRST ISSUE: LABOR ARBITER has original and exclusive jurisdiction over termination disputes and
unfair labor practices and the exceptions not present in the case at bar.
The CBA between the petitioners and respondent union provides, under Section 1, Article V entitled ARBITRATION,
that ―wages, hours of work, conditions of employment and/or employer-employee relations shall be settled by
arbitration.‖ Petitioners‘ thesis is that the dispute as to the termination of the union members and the unfair labor
practice should first be settled by arbitration, and not directly by the labor arbiter, following their CBA, which ought
to be treated as the law between the parties thereto.
The argument is unmeritorious. The law in point is Article 217 (a) of the Labor Code. It is elementary that this law
is deemed written into the CBA. In fact, the law speaks in plain and unambiguous terms that termination disputes,
together with unfair labor practices, are matters falling under the original and exclusive jurisdiction of the Labor
Arbiter.
The sole EXCEPTION to the above rule can be found under Article 262 of the same Code, which provides:
―Aricle 262. Jurisdiction over other labor disputes - The voluntary arbitrator or panel of voluntary arbitrators, upon
agreement of the parties, shall also hear and decide all other labor disputes including unfair labor practices and
bargaining deadlocks.‖ (As added by R.A. 6715)
Based on the CBA, Section 1, Article V of the CBA does not provide that petitioners and the respondent union
conform to the submission of termination disputes and unfair labor practices to voluntary arbitration. Hence,
consistent with the general rule under Article 217 (a) of the Labor Code, the Labor Arbiter properly has jurisdiction
over the complaint filed by the respondent union on February 25, 1991 for illegal dismissal and unfair labor
practice.
Petitioners point however to Section 2, Article III of the CBA, under the heading Job Security, to show that the
dispute is a proper subject of the grievance procedure, viz:
―x x x The UNION, however, shall have the right to seek reconsideration of any discharge, lay-off or disciplinary
action, and such requests for reconsideration shall be considered a dispute or grievance to be dealt with in
accordance with the procedure outlined in Article IV hereof [on Grievance Machinery] x x x‖
Petitioners fail miserably to prove that, indeed, the respondent union requested for a reconsideration or review of
the management decision to dismiss the private respondents. The filing of a request for reconsideration by the
respondent union, which is the condition sine qua non to categorize the termination dispute and the ULP complaint
as a grievable dispute, was absent in the case at bench.
The only relevant provision under Article III that may need interpretation or implementation is Section 2 which was
cited herein. However, as patiently pointed out by this court, said provision does not come into play considering
that the union never exercised its right to seek reconsideration of the discharges effected by the company. It would
have been different had the union sought reconsideration. Such recourse under Section 2 would have been treated
as a grievance under Article IV (Grievance Machinery) of the CBA, thus calling for the possible interpretation or
implementation of the entire provision on Grievance Machinery as agreed upon by the parties. This was not the
case however. The union brought the termination dispute directly to the Labor Arbiter rendering Articles III and IV
of the CBA inapplicable for the resolution of this case.
Hence, the respondent union acted well within their rights in filing their complaint for illegal dismissal and ULP
directly with the Labor Arbiter under Article 217 (a) of the Labor Code.
A. There is no connection whatsoever between SMC‘s management prerogative to effect the discharges and the
interpretation or implementation of Articles III and IV of the CBA.
Second. Petitioners insist that involved in the controversy is the interpretation and implementation of the CBA
which is grievable and arbitrable by law under Article 217(c) of the Labor Code which xxx shall be disposed of by
the Labor Arbiter by referring the same to the grievance machinery and voluntary arbitration as may be provided in
said agreements.‖ (As amended by R.A. 6715).
Petitioners questions whether SMC had the management right or prerogative to effect the discharges on the
ground of redundancy, and this necessarily calls for the interpretation or implementation of Article III (Job
Security) in relation to Article IV Grievance Machinery)of the CBA.
Petitioner‘s theory does not hold water. There is no connection whatsoever between SMC‘s management
prerogative to effect the discharges and the interpretation or implementation of Articles III and IV of the CBA,
except the one stated above if a reconsideration was filed.
B. The questioned discharges due to alleged redundancy can hardly be considered company personnel policies and
therefore need not directly be subject to the grievance machinery nor to voluntary arbitration.
The discharges, petitioners also contend, call for the interpretation or enforcement of company personnel policies,
particularly SMC‘s personnel policies on lay-offs arising from redundacy, and so, they may be considered grievable
and arbitrable by virtue of Article 2 17(c).
Not necessarily so. Company personnel policies are guiding principles stated in broad, long-range terms that
express the philosophy or beliefs of an organization‘s top authority regarding personnel matters. They deal with
matters affecting efficiency and well-being of employees and include, among others, the procedure in the
administration of wages, benefits, promotions, transfer and other personnel movements which are usually not
spelled out in the collective agreement. The usual source of grievances, however, is the rules and
regulations governing disciplinary actions. Judging therefrom, the questioned discharges due to alleged
redundancy can hardly be considered company personnel policies and therefore need not directly be subject to the
grievance machinery nor to voluntary arbitration.
C. We find that based on the circumstances surrounding this case, the complaint filed by the private respondents
on alleges facts sufficient to constitute a bona fide case of ULP, and cognizable by the Labor Arbiter. This is
consistent with the rule that jurisdiction over the subject matter is determined by the allegations of the complaint.
Third. Petitioners would like to persuade us that respondents‘ ULP claims are merely conclusory and cannot serve
to vest jurisdiction to the Labor Arbiters. Petitioners maintain that respondents‘ complaint does not allege a
genuine case for ULP.
The Court is not convinced.

The complaint alleges that:

―5. Individual complainants are bona fide officers and members of complainant Ilaw at Buklod ng Manggagawa
(IBM).
xxx xxx xxx
23. The dismissal or lock-out from work of the individual complainants clearly constitutes an act of unfair labor
practices in the light of the fact that the work being performed by the individual complainants are being contracted
out by the respondent company.
xxx xxx xxx
25. The acts of the respondent company in economically coercing employees to accept payment of separation
and/or retirement benefits, pending final resolution of the labor xxxx there is undue interference, restraint, and
coercion of employees in the exercise of their right to self-organization and collective bargaining.‖
Short of pre-empting the proceedings before the Labor Arbiter, the above complaint, makes Out a genuine case for
ULP.
In Manila Pencil Co. v. CIR, where business conditions justified a lay-off of employees, unfair labor practices were
committed in the form of discriminatory dismissal where only unionists were permanently dismissed. This was
despite the valid excuse given by the Manila Pencil Company that the dismissal of the employees was due to the
reduction of the company‘s dollar allocations for importation and that both union members and non-union
members were laid-off.
A similar ruling was made by this Court in People‘s Bank and Trust Co. v. People‘s Bank and Trust Co. Employees
Union involving the lay-off by a bank of 65 employees who were active union members allegedly by reason of
retrenchment. The Court likewise found the employer in that case to have committed ULP in effecting the
discharges.
This Court was more emphatic however in Bataan Shipyard and Engineering Co., Inc. v. NLRC, et al.: Under the
circumstances, we are inclined to believe that the company had indeed been discriminatory in selecting the
employees who were to be retrenched. All of the retrenched employees are officers and members of the
NAFLU. As such, the action taken by the firm becomes highly suspect. It leads us to conclude that the firm
had been discriminating against membership in the NAFLU, an act which amounts to interference in
the employees’ exercise of their right of self-organization. Under Art. 249 (now Art. 248) of the Labor
Code of the Philippines, such interference is considered an act of unfair labor practice on the part of the Company x
x x.
It matters not that the cause of termination in the above cited cases was retrenchment while that in the instant
case was redundancy. The important fact is that in all of these cases, including the one at bar, all of the dismissed
employees were officers and members of their respective unions, and their employers failed to give a satisfactory
explanation as to why this group of employees was singled out.
It may be the case that employees other than union members may have been terminated also by petitioner SMC
on account of its redundancy program. If that is true, the discharges may really be for a bona fide authorized
cause under Article 283 of the Labor Code. On the other hand, it is also possible that such may only be a clever
scheme of the petitioner company to camouflage its real intention of discriminating against union members
particularly the private respondents. In any case, these matters will be best ventilated in a hearing before the
Labor Arbiter.
It is for the above reason that we cannot hold the petitioners guilty of the ULP charge. This will be the task of the
Labor Arbiter. We however find that based on the circumstances surrounding this case, the complaint filed by the
private respondents on February 25, 1991 alleges facts sufficient to constitute a bona fide case of ULP, and
therefore properly cognizable by the Labor Arbiter under Article 2 17(a) of the Labor Code. This is consistent with
the rule that jurisdiction over the subject matter is determined by the allegations of the complaint.
SECOND ISSUE: Finally, petitioners try to impress on this Court the strong State policy on the promotion of
voluntary modes of settlement of labor disputes crafted in the Constitution and the Labor Code which dictate the
submission of the CBA dispute to grievance and arbitration.
In the absence of an express legal conferment thereof, jurisdiction cannot be appropriated by an official or tribunal
no matter how well-intentioned it is, even in the pursuit of the clearest substantial right.
In the same manner, petitioners cannot arrogate into the powers of voluntary arbitrators the original and exclusive
jurisdiction of Labor Arbiters over unfair labor practices, termination disputes, and claims for damages, in the
absence of an express agreement between the parties in order for Article 262 of the Labor Law to apply in the case
at bar.
PANTRANCO NORTH EXPRESS INC. VS. NLRC

[G.R. No. 95940, July 24, 1996]
Facts:
Private respondent Suñiga was hired by petitioner as a bus conductor, and joined the Pantranco Employees
Association-PTGWO. He continued in petitioner's employ until he retired at the age of fifty-two (52) after having
rendered twenty five years' service. The basis of his retirement was the compulsory retirement provision of the
CBA between the petitioner and the union. Private respondent received P49,300.00 as retirement pay. Suñiga filed
a complaint for illegal dismissal against petitioner with the Sub-Regional Arbitration Branch of the respondent
Commission. LA found that the three complainants are illegally and unjustly dismissed and ordered the respondent
to reinstate them to their former or substantially equivalent positions without loss of seniority rights with full
backwages and other benefits.
The amounts already received by complainants shall be considered as advanced payment of their retirement pay
which shall be deducted when they shall actually retire or (be) separated from the service. The order of
reinstatement was immediately executory even pending appeal. Petitioner appealed to public respondent, which
issued the questioned Resolution affirming the labor arbiter's decision in toto.
Issues:
1. Whether or not the Labor Arbiter has jurisdiction
2. Whether or not the CBA stipulation on compulsory retirement after twenty-five years of service is legal and
enforceable.
Ruling:
I. Jurisdiction of Labor Arbiter
Pantranco contends that the labor arbiter had no jurisdiction because the dispute concerns a provision of the CBA
and its interpretation. It claims that the case falls under the jurisdiction of the voluntary arbitrator or panel of
arbitrators under Article 261 of the Labor Code. The Labor Arbiter believed otherwise.
First, this is a complaint of illegal dismissal of which original and exclusive jurisdiction under Article 217 has been
conferred to the Labor Arbiters. The interpretation of the CBA or enforcement of the company policy is only
corollary to the complaint of illegal dismissal. Otherwise, an employee who was on AWOL, or who committed
offenses contrary to the personnel polices (sic) can no longer file a case of illegal dismissal because the discharge
is premised on the interpretation or enforcement of the company polices.
Second. Respondent voluntarily submitted the case to the jurisdiction of this labor tribunal. It adduced arguments
to the legality of its act, whether such act may be retirement and/or dismissal, and prayed for reliefs on the merits
of the case. A litigant cannot pray for reliefs on the merits and at the same time attacks (sic) the jurisdiction of the
tribunal. A person cannot have one's cake and eat it too. x x x."
The Court agrees with the public respondent's affirmance of the arbiter's decision in respect of the question of
jurisdiction.
In Sanyo Philippines Workers Union — PSSLU vs. Cañizares
―x x x Hence, only disputes involving the union and the company shall be referred to the grievance machinery or
voluntary arbitrators.
In the instant case, both the union and the company are united or have come to an agreement regarding the
dismissal of private respondents. No grievance between them exists which could be brought to a grievance
machinery. The problem or dispute in the present case is between the union and the company on the one hand
and some union and non-union members who were dismissed, on the other hand. The dispute has to be settled
before an impartial body. The grievance machinery with members designated by the union and the company
cannot be expected to be impartial against the dismissed employees. Due process demands that the dismissed
workers‘ grievances be ventilated before an impartial body. Since there has already been an actual termination,
the matter falls within the jurisdiction of the Labor Arbiter."
Applying the same rationale to the case at bar, it cannot be said that the "dispute" is between the union and
petitioner company because both have previously agreed upon the provision on "compulsory retirement" as
embodied in the CBA. Also, it was only private respondent on his own who questioned the compulsory
retirement. Thus, the case is properly denominated as a "termination dispute" which comes under the jurisdiction
of labor arbiters.
Therefore, public respondent did not commit a grave abuse of discretion in upholding the jurisdiction of the labor
arbiter over this case.
II. Legality and enforceability of CBA stipulation

YES, the CBA stipulation on compulsory retirement after twenty-five years of service is legal and enforceable.
Article XI, Section 1 (e) (5) of the CBA states:

"Section 1. The COMPANY shall formulate a retirement plan with the following main features:
xxx xxx xxx
(e) The COMPANY agrees to grant the retirement benefits herein provided to regular employees who
may be separated from the COMPANY for any of the following reasons:
xxx xxx xxx
A CBA incorporates the agreement reached after negotiations between employer and bargaining agent with respect
to terms and conditions of employment. A CBA is not an ordinary contract. "(A)s a labor contract within the
contemplation of Article 1700 of the Civil Code of the Philippines which governs the relations between labor and
capital, (it) is not merely contractual in nature but impressed with public interest, thus it must yield to the common
good. As such, it must be construed liberally rather than narrowly and technically, and the courts must place a
practical and realistic construction upon it, giving due consideration to the context in which it is negotiated and
purpose which it is intended to serve.‖
Being a product of negotiation, the CBA between the petitioner and the union intended the provision on
compulsory retirement to be beneficial to the employees-union members, including herein private
respondent. When private respondent ratified the CBA with the union, he not only agreed to the CBA but also
agreed to conform to and abide by its provisions. Thus, it cannot be said that he was illegally dismissed when the
CBA provision on compulsory retirement was applied to his case.
Incidentally, we call attention to Republic Act No. 7641, known as "The Retirement Pay Law," which went into
effect on January 7, 1993. Although passed many years after the compulsory retirement of herein private
respondent, nevertheless, the said statute sheds light on the present discussion when it amended Art. 287 of the
Labor Code, to make it read as follows:
"ART. 7. Retirement. — Any employee may be retired upon reaching the retirement age establish in the
collective bargaining agreement or other applicable employment contract.
xxx xxx xxx
In the absence of a retirement plan or agreement providing for retirement benefits of employees in the
establishment, an employee upon reaching the age of sixty (60) years or more, but not beyond sixty-five (65)
years which is hereby declared the compulsory retirement age, who has served at least five (5) years in the said
establishment may retire x x x."
The aforequoted provision makes clear the intention and spirit of the law to give employers and employees a free
hand to determine and agree upon the terms and conditions of retirement. Providing in a CBA for compulsory
retirement of employees after twenty-five (25) years of service is legal and enforceable so long as the parties agree
to be governed by such CBA. The law presumes that employees know what they want and what is good for them
absent any showing that fraud or intimidation was employed to secure their consent thereto.
On this point then, public respondent committed a grave abuse of discretion in affirming the decision of the labor
arbiter. The compulsory retirement of private respondent effected in accordance with the CBA is legal and binding.
SILVA ET AL vs. NLRC

[G.R. No. 110226, June 19, 1997]
Facts:
Petitioners, then rank-and-file employees and members of Philtread Workers Union (PWU), volunteered for, and
availed of, the retrenchment program instituted by Philtread with the understanding that they would have priority
in re-employment in the event that the company recovers from its financial crisis, in accordance with their CBA.
Philtread, apparently having recovered from its financial reverses, expanded its operations and hired new
personnel. Upon discovery of this development, petitioners filed their respective applications for employment with
Philtread, which however, merely agreed to consider them for future vacancies. Subsequent demands for re-
employment made by petitioners were ignored. Even the request of the incumbent union for Philtread to stop
hiring new personnel until petitioners were first hired failed to elicit any favorable response. Thus, petitioners
lodged a complaint with the NCR Arbitration Branch of the NLRC for unfair labor practice, damages and attorney‘s
fees against Philtread.
LA dismissed the complaint but directing Philtread to give petitioners priority in hiring, as well as those former
employees similarly situated for available positions provided they meet the necessary current qualifications.
Petitioners duly appealed the decision of the Labor Arbiter to the NLRC. Philtread opted not to interpose an appeal
despite the Labor Arbiter‘s failure to rule squarely on the question of jurisdiction. NLRC revered the decision of the
LA. It directed Philtread to re-employ petitioners and other employees similarly situated, regardless of age
qualifications and other pre-employment conditions, subject only to existing vacancies and a finding of good
physical condition.
Atty. Borreta filed with the NLRCVan ex parte manifestation explaining that he was returning the copy of the
resolution rendered on April 15, 1992, which, according to him, was erroneously served on him by the process
server of the NLRC. NLRC, acting on a motion for reconsideration filed by Atty. Gutierrez, promulgated one of its
challenged resolutions dismissing the complaint of petitioners. It ruled that while petitioners had standing to sue,
the complaint should have been filed with the voluntary arbitrator, pursuant to Article 261 of the Labor Code, since
the primary issue was the implementation and interpretation of the CBA.
Petitioners moved for reconsideration. NLRC affirmed its earlier resolution, ruling that even before the amendatory
law took effect, matters involving bargaining agreements were already within the exclusive jurisdiction of the
voluntary arbitrator, as set forth in Article 262 of the Labor Code. Hence, this petition.
Issues:
1. Whether or not NLRC acted with grave abuse of discretion for issuing 2 resolutions which reconsidered a
resolution it rendered on April 15, 1992, despite that the latter became final and executory when Philtread failed to
seasonably file a motion for reconsideration within the ten-day reglementary period required by Article 223 of the
Labor Code.
2. Who has jurisdiction, the voluntary arbitrator or LA and NLRC? Can RA 6715 be applied retroactively?
Ruling:
1. YES, NLRC acted with grave abuse of discretion.
The seasonable filing of a motion for reconsideration within the 10-day reglementary period following the receipt
by a party of any order, resolution or decision of the NLRC, is a mandatory requirement to forestall the finality of
such order, resolution or decision. The statutory bases for this are found in Article 223 of the Labor Code and
Section 14, Rule VII of the New Rules of Procedure of the NLRC. Philtread‘s counsel filed a motion for
reconsideration 31 days after receipt of said resolution. It was thus incumbent upon the NLRC to have dismissed
outright Philtread‘s late motion for reconsideration. By doing exactly the opposite, its actuation was not only
whimsical and capricious but also a demonstration of its utter disregard for its very own rules. Certiorari,
therefore, lies.
NLRC, as an administrative and quasi-judicial body, is not bound by the rigid application of technical rules of
procedure in the conduct of its proceedings. However, the filing of a motion for reconsideration and filing it ON
TIME are not mere technicalities of procedure. These are jurisdictional and mandatory requirements which must
be strictly complied with. Although there are exceptions to said rule, the case at bar presents no peculiar
circumstances warranting a departure therefrom.
According to PhilTread, jurisdiction lies instead with the voluntary arbitrator so that when the Labor Arbiter and the
NLRC took cognizance of the case, their decisions thereon were null and void and, therefore, incapable of attaining
finality. In short, Philtread maintains that the ten-day reglementary period could not have started running and,
therefore, its motion could not be considered late.
The argument is not tenable. While we agree with the dictum that a void judgment cannot attain finality, said rule,
however, is only relevant if the tribunal or body which takes cognizance of a particular subject matter indeed lacks
jurisdiction over the same. In this case, the rule adverted to is misapplied for it is actually the Labor Arbiter and
the NLRC which possess jurisdiction over petitioners‘ complaint and NOT the voluntary arbitrator, as erroneously
contended by Philtread.
There is confusion in the minds of both Philtread and the NLRC with respect to the proper jurisdiction of the
voluntary arbitrator. When the issue concerns an interpretation or implementation of the CBA, one cannot
immediately jump to the conclusion that jurisdiction is with the voluntary arbitrator. There is an equally important
need to inquire further if the disputants involved are the union and the employer; otherwise, the voluntary
arbitrator cannot assume jurisdiction.
In Sanyo Philippines Workers Union - PSSLU v. Canizares, we clarified the jurisdiction of the
voluntary arbitrator:
We hold that the Labor Arbiter and not the Grievance Machinery provided for in the CBA has the jurisdiction to hear
and decide the complaints of the private respondents. While it appears that the dismissal of the private
respondents was made upon the recommendation of PSSLU pursuant to the union security clause provided in the
CBA, We are of the opinion that these facts do not come within the phrase ‘grievances arising from the
interpretation or implementation of (their) CBA and those arising from the interpretation or enforcement of
company personnel policies,‘ the jurisdiction of which pertains to the Grievance Machinery or thereafter, to a
voluntary arbitrator or panel of voluntary arbitrators.
Article 260 of the Labor Code on grievance machinery and voluntary arbitrator states that ‗(t)he parties to a CBA
shall include therein provisions that will ensure the mutual observance of its terms and conditions. They shall
establish a machinery for the adjustment and resolution of grievances arising from the interpretation or
implementation of their CBA and those arising from the interpretation or enforcement of company personnel
policies.‘ The parties to a CBA shall name or designate their respective representatives to the grievance machinery
and if the grievance is not settled in that level, it shall automatically be referred to voluntary arbitrators (or panel of
voluntary arbitrators) designated in advance by the parties. It need not be mentioned that the parties to a CBA are
the union and the company. Hence, only disputes involving the union and the company shall be referred to the
grievance machinery or voluntary arbitrators.‖
In the case at bar, since the contending parties in the instant case are not the union and Philtread, then
pursuant to the Sanyo doctrine, it is not the voluntary arbitrator who can take cognizance of the complaint,
notwithstanding Philtread‘s claim that the real issue is the interpretation of the CBA provision on re-employment.
If the voluntary arbitrator could not have assumed jurisdiction over the case, did the Labor Arbiter
and the NLRC validly acquire jurisdiction when both of them entertained the complaint?
At the time petitioners filed their complaint for unfair labor practice, damages and attorney‘s fees, the governing
provision of the Labor Code with respect to the jurisdiction of the Labor Arbiter and the NLRC was Article 217:
―ART. 217. Jurisdiction of Labor Arbiters and the Commission. (a) The Labor Arbiters shall have the original and
exclusive jurisdiction to hear and decide within thirty (30) working days after submission of the case by the parties
for decision, the following cases involving all workers, whether agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Those that workers may file involving wages, hours of work and other terms and conditions of employment;
3. All money claims of workers, including those based on non-payment or underpayment of wages, overtime
compensation, separation pay and other benefits provided by law or appropriate agreement, except claims for
employees‘ compensation, social security, medicare and maternity benefits;
4. Cases involving household services; and
5. Cases arising from any violation of Article 265 of this Code, including questions involving the legality of strikes
and lockouts.
(b) The Commission shall have exclusive appellate jurisdiction over all cases decided by Labor Arbiters.‖
Articles 261 and 262, on the other hand, defined the jurisdiction of the voluntary arbitrator, viz.:
―ART. 261. Grievance machinery. - Whenever a grievance arises from the interpretation or implementation of a
collective agreement, including disciplinary actions imposed on members of the bargaining unit, the employer and
the bargaining representative shall meet to adjust the grievance. Where there is no collective agreement and in
cases where the grievance procedure as provided herein does not apply, grievances shall be subject to negotiation,
conciliation or arbitration as provided elsewhere in this Code.
ART. 262. Voluntary arbitration. - All grievances referred to in the immediately preceding Article which are not
settled through the grievance procedure provided in the collective agreement shall be referred to voluntary
arbitration prescribed in said agreement: Provided, That termination disputes shall be governed by Article 278 of
this Code, as amended, unless the parties agree to submit them to voluntary arbitration.‖
Under the above provisions then prevailing, one can understand why petitioners lodged their complaint for ULP
with the Labor Arbiter. To their mind, Philtread‘s refusal to re-employ them was tantamount to a violation of the
re-employment clause in the 1983 CBA which was also substantially reproduced in the 1986 CBA. At the time, any
violation of the CBA was unqualifiedly treated as ULP of the employer falling within the competence of the Labor
Arbiter to hear and decide.
―ART. 248. Unfair labor practices of employers. - It shall be unlawful for an employer to commit any of the
following unfair labor practice:
xxx xxx
(i) To violate a collective bargaining agreement.‖
On March 21, 1989, however, Republic Act 6715, or the so-called ―Herrera-Veloso Amendments,‖ took effect,
amending several provisions of the Labor Code, including the respective jurisdictions of the Labor Arbiter, the NLRC
and the voluntary arbitrator.
―ART. 217. Jurisdiction of Labor Arbiters and the Commission. - (a) Except as otherwise provided under this Code
the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide, within thirty (30) calendar days
after the submission of the case by the parties for decision without extension, even in the absence of stenographic
notes, the following cases involving all workers, whether agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases that workers may file involving wages, rates of pay,
hours of work and other terms and conditions of employment;
4. Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations;
5. Cases arising from any violation of Article 264 of this Code, including questions involving the legality of strikes
and lockouts; and
6. Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other claims,
arising from employer-employee relations, including those of persons in domestic or household service, involving
an amount exceeding five thousand pesos (P5,000.00) regardless of whether accompanied with a claim for
reinstatement.
(b) The Commission shall have exclusive appellate jurisdiction over all cases decided by Labor Arbiters.
(c) Cases arising from the interpretation or implementation of collective bargaining agreements and those arising
from the interpretation or enforcement of company personnel policies shall be disposed of by the Labor Arbiter by
referring the same to the grievance machinery and voluntary arbitration as may be provided in said agreements.‖
―ART. 261. Jurisdiction of Voluntary Arbitrators or panel of Voluntary Arbitrators. - The Voluntary Arbitrator or
panel of Voluntary Arbitrators shall have original and exclusive jurisdiction to hear and decide all unresolved
grievances arising from the interpretation or implementation of the Collective Bargaining Agreement and those
arising from the interpretation or enforcement of company personnel policies referred to in the immediately
preceding article. Accordingly, violations of a Collective Bargaining Agreement, except those which are gross in
character, shall no longer be treated as unfair labor practice and shall be resolved as grievances under the
Collective Bargaining Agreement. For purposes of this article, gross violations of Collective Bargaining Agreement
shall mean flagrant and/or malicious refusal to comply with the economic provisions of such agreement. x x x.‖
(Underscoring supplied)
―ART. 262. Jurisdiction over other labor disputes. - The Voluntary Arbitrator or panel of Voluntary Arbitrators, upon
agreement of the parties, shall also hear and decide all other labor disputes including unfair labor practices and
bargaining deadlocks.‖
With the amendments introduced by RA 6715, it can be gleaned that the Labor Arbiter still retains jurisdiction over
ULP cases. There is, however, a significant change: The unqualified jurisdiction conferred upon the Labor Arbiter
prior to the amendment by RA 6715 has been narrowed down so that ―violations of a Collective Bargaining
Agreement, except those which are gross in character, shall no longer be treated as unfair labor practice but as
grievances under the Collective Bargaining Agreement. It is further stated that ―gross violations of Collective
Bargaining Agreement shall mean flagrant and/or malicious refusal to comply with the economic provisions of such
agreement.‖
For a ULP case to be cognizable by the Labor Arbiter, and the NLRC to exercise its appellate
jurisdiction, the allegations in the complaint should show prima facie the concurrence of two things,
namely:
RA 6715 is in the nature of a curative statute. Thus, it can be applied retroactively to pending cases.
Briad Agro Development Corporation v. Dela Cerna - Republic Act No. 6715 has retroactive application. Thus,
when this new law divested Regional Directors of the power to hear money claims, the divestment affected
pending litigations. (Note that under par. 6, where the claim does not exceed P5,000.00, regional directors have
jurisdiction)
Garcia v. Martinez - The lack of jurisdiction was cured by the issuance of the amendatory decree which is in the
nature of a curative statute with retrospective application to a pending proceeding, like Civil Case No. 9657.
With the Briad ruling in place, the implication is that the qualified jurisdiction of the Labor Arbiter and the
NLRC should have been applied when the ULP complaint was still pending. This means that petitioners should
have been required to show in their complaint the gross nature of the CBA violation, as well as the economic
provision violated, without which the complaint would be dismissible.
Thus, given the foregoing considerations, may the Briad doctrine be applied to the instant case and cause
its dismissal for want of jurisdiction of the Labor Arbiter and the NLRC?
NO, it cannot be applied.
We adopt instead the more recent case of Erectors, Inc. v. National Labor Relations Commission, where we refused
to give retroactive application to Executive Order No. 797 which created the Philippine Overseas Employment
Administration (POEA). Under said law, POEA was vested with ―original and exclusive jurisdiction over all cases,
including money claims, involving employer-employee relations arising out of or by virtue of any law or contract
involving Filipino workers for overseas employment,‖ which jurisdiction was originally conferred upon the Labor
Arbiter. As in the instant case, the Labor Arbiter‘s assumption of jurisdiction therein was likewise questioned in
view of the subsequent enactment of E.O. 797.
―The rule is that jurisdiction over the subject matter is determined by the law in force at the time of the
commencement of the action. On March 31, 1982, at the time private respondent filed his complaint against the
petitioner, the prevailing laws were Presidential Decree No. 1691 and Presidential Decree No. 1391 which vested
the Regional Offices of the Ministry of Labor and the Labor Arbiters with ‗original and exclusive jurisdiction over all
cases involving employer-employee relations including money claims arising out of any law or contracts involving
Filipino workers for overseas employment.‘ At the time of the filing of the complaint, the Labor Arbiter had clear
jurisdiction over the same.
E.O. No. 797 did not divest the Labor Arbiter‘s authority to hear and decide the case filed by private respondent
prior to its effectivity. Laws should only be applied prospectively unless the legislative intent to give them
retroactive effect is expressly declared or is necessarily implied from the language used. We fail to perceive in the
language of E.O. No. 797 an intention to give it retroactive effect.
E.O. No. 111, amended Article 217 of the Labor Code to widen the worker‘s access to the government for redress
of grievances by giving the Regional Directors and Labor Arbiters concurrent jurisdiction over cases involving
money claims. This amendment, however, created a situation where the jurisdiction of the Regional Directors and
the Labor Arbiters overlapped. As a remedy, R.A. 6715 further amended Article 217 by delineating their respective
jurisdictions. Under R.A. 6715, the Regional Director has exclusive original jurisdiction over cases involving money
claims provided: (1) the claim is presented by an employer or person employed in domestic or household service,
or househelper under the Code; (2) the claimant, no longer being employed, does not seek reinstatement; and (3)
the aggregate money claim of the employee or househelper does not exceed P5,000.00. All other cases within the
exclusive and original jurisdiction of the Labor Arbiter. E.O. No. 111 and R.A. 6715 are therefore curative
statutes. A curative statute is enacted to cure defects in a prior law or to validate legal proceedings, instruments
or acts of public authorities which would otherwise be void for want of conformity with certain existing legal
requirements.
The law at bar, E.O. No. 797, is not a curative statute. x x x.‖
Hence, RA 6715 cannot be applied retroactively.

In Briad, the underlying reason for applying RA 6715 retroactively was the fact that prior to its amendment, Article
217 of the Labor Code, as amended by then E.O. 111, created a scenario where the Labor Arbiters and the
Regional Directors of the (DOLE) had overlapping jurisdiction over money claims. This situation was viewed as a
defect in the law so that when RA No. 6715 was passed and delineated the jurisdiction of the Labor Arbiters and
Regional Directors, the Court deemed it a rectification of such defect; hence, the conclusion that it was curative in
nature and, therefore, must be applied retroactively.
The same thing cannot be said of the case at bar. Like in Erectors, the instant case presents no defect in the law
requiring a remedy insofar as the jurisdiction of the Labor Arbiter and the Voluntary Arbitrator is concerned. There
is here no overlapping of jurisdiction to speak of because matters involving interpretation and implementation of
CBA provisions, as well as interpretation and enforcement of company personnel policies, have always been
determined by the Voluntary Arbitrator even prior to RA 6715. Similarly, all ULP cases were exclusively within the
jurisdiction of the Labor Arbiter. What RA 6715 merely did was to re-apportion the jurisdiction over ULP cases by
conferring exclusive jurisdiction over such ULP cases that do not involve gross violation of a CBA‘s economic
provision upon the voluntary arbitrator. We do not see anything in the act of re-apportioning jurisdiction curative
of any defect in the law as it stood prior to the enactment of RA 6715. The Court view it as merely a matter of
change in policy of the lawmakers, especially since the 1987 Constitution adheres to the preferential use of
voluntary modes of dispute settlement. This, instead of the inherent defect in the law, must be the rationale that
prompted the amendment. Hence, we uphold the jurisdiction of the Labor Arbiter which attached to this case at
the time of its filing on December 5, 1988. WHEREFORE, the instant petition is hereby GRANTED.
UNION OF NESTLE WORKERS CAGAYAN DE ORO FACTORY vs. NESTLE PHILIPPINES INC.
[G.R. No. 148303, October 17, 2002]
Facts:
On August 1, 1999, Nestle Philippines, Inc. adopted Policy No. HRM 1.8, otherwise known as the "Drug Abuse
Policy." Pursuant to this policy, the management shall conduct simultaneous drug tests on all employees from
different factories and plants.
However, there was resistance to the policy in the Nestle Cagayan de Oro factory. Out of 496 employees, only 141
or 28.43% submitted themselves to drug testing. On August 20, 1999, the Union of Nestle Workers Cagayan de
Oro Factory and its officers, petitioners, wrote Nestle challenging the implementation of the policy and
branding it as a mere subterfuge to defeat the employees‘ constitutional rights.
Nestle claimed that the policy is in keeping with the government‘s thrust to eradicate the proliferation of drug
abuse, explaining that the company has the right: (a) to ensure that its employees are of sound physical and
mental health and (b) to terminate the services of an employee who refuses to undergo the drug test.
On August 23, 1999, petitioners filed with the RTC, Cagayan de Oro City, a complaint for injunction with prayer for
the issuance of a temporary restraining order against Nestle.
On August 24, 1999, the RTC issued a temporary restraining order enjoining respondents. Nestle filed a motion to
dismiss the complaint on the ground that the RTC has no jurisdiction over the case as it involves a labor dispute or
enforcement of a company personnel policy cognizable by the Voluntary Arbitrator or Panel of Voluntary
Arbitrators. Petitioners filed their opposition, contending that the RTC has jurisdiction since the complaint raises
purely constitutional and legal issues.
RTC dismissed the complaint for lack of jurisdiction since the constitutional issue is closely related or intertwined
with the labor issue, so much so that this Court is inclined to believe that it has no jurisdiction but the NLRC.
Petitioners filed with this Court a petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure but was
referred to the Court of Appeals.
The Appellate Court rendered its Decision dismissing the petition for petitioners xxx submitted themselves to the
drug test required by management and was confirmed free from illegal drug abuse. In view thereof, the instant
petition, which prays for an injunction had become moot and academic. The remedy of injunction could no longer
be entertained because the act sought to be prevented had been consummated.
Hence this petition for review on certiorari.
Issues:
1. Whether or not the Regional Trial Court has jurisdiction over petitioners‘ suit for injunction
2. Whether or not petitioners‘ resort to certiorari under Rule 65 is in order.
Ruling:
I. Considering that the Drug Abuse Policy is a company personnel policy, it is the Voluntary
Arbitrators or Panel of Voluntary Arbitrators, not the RTC, which exercises jurisdiction over this case.
On the first issue, we hold that petitioners‘ insistence that the RTC has jurisdiction over their complaint since it
raises constitutional and legal issues is sorely misplaced. The fact that the complaint was denominated as one for
injunction does not necessarily mean that the RTC has jurisdiction. Well-settled is the rule that jurisdiction is
determined by the allegations in the complaint.
It is indubitable from the allegations in the complaint that petitioners are not per se questioning "whether or not
the person will undergo the drug test" or the constitutionality or legality of the Drug Abuse Policy. They are
assailing the manner by which respondents are implementing the policy. According to them, it is "arbitrary in
character" because: (1) the employees were not consulted prior to its implementation; (2) the policy is punitive
inasmuch as an employee who refuses to abide with the policy may be dismissed from the service; and (3) such
implementation is subject to limitations provided by law which were disregarded by the management.
Is the complaint, on the basis of its allegations, cognizable by the RTC?

Respondent Nestle‘s Drug Abuse Policy is a guiding principle adopted by Nestle to safeguard its employees‘ welfare
and ensure their efficiency and well-being. To our minds, this is a company personnel policy. In San Miguel Corp.
vs. NLRC, this Court held: "Company personnel policies are guiding principles stated in broad, long-range terms
that express the philosophy or beliefs of an organization‘s top authority regarding personnel matters. They deal
with matter affecting efficiency and well-being of employees and include, among others, the procedure in the
administration of wages, benefits, promotions, transfer and other personnel movements which are usually not
spelled out in the collective agreement."
Considering that the Drug Abuse Policy is a company personnel policy, it is the Voluntary Arbitrators or Panel of
Voluntary Arbitrators, not the RTC, which exercises jurisdiction over this case. Article 261 of the Labor Code, as
amended, pertinently provides:
Art. 261. Jurisdiction of Voluntary Arbitrators or Panel of Voluntary Arbitrators. – The Voluntary Arbitrator or panel
of Voluntary Arbitrators shall have original and exclusive jurisdiction to hear and decide all unresolved grievances
arising from the interpretation or implementation of the Collective Bargaining Agreement and those arising from
the interpretation or enforcement of company personnel policies x x x."
II. What should have interposed is an appeal to the Court of Appeals, not a petition for certiorari
since the assailed RTC order is final. Certiorari is not a substitute for an appeal.
With respect to the second issue raised by petitioners, what they should have interposed is an appeal to the Court
of Appeals, not a petition for certiorari which they initially filed with this Court, since the assailed RTC order is final.
Certiorari is not a substitute for an appeal. For certiorari to prosper, it is not enough that the trial court committed
grave abuse of discretion amounting to lack or excess of jurisdiction, as alleged by petitioners. The requirement
that there is no appeal, nor any plain, speedy and adequate remedy in the ordinary course of law must likewise be
satisfied.10 We must stress that the remedy of appeal was then available to petitioners, but they did not resort to it.
And while this Court in exceptional instances allowed a party‘s availment of certiorari instead of appeal, we find
that no such exception exists here.
TABIGUE ET AL. vs. INTERNATIONAL COPRA EXPORT CORPORATION

[G.R. No. 183335, December 23, 2009]
Facts:
Juanito Tabigue and his 19 co-petitioners, employees of International Copra Export Corp-oration (INTERCO), filed a
Notice of Preventive Mediation with the Department of Labor and Employment – National Conciliation and
Mediation Board (NCMB), Regional Branch No. XI, Davao City against respondent, for violation of Collective
Bargaining Agreement (CBA) and failure to sit on the grievance conference/meeting.
As the parties failed to reach a settlement before the NCMB, petitioners requested to elevate the case to voluntary
arbitration. The NCMB thus set a date for the parties to agree on a Voluntary Arbitrator.
Before the parties could finally meet, respondent presented before the NCMB a letter stating that petitioners ―are
not duly authorized by [the] board or the officers to represent the union, [hence] . . . all actions, representations
or agreements made by these people with the management will not be honored or recognized by the
union.‖ Respondent thus moved to dismiss petitioners‘ complaint for lack of jurisdiction.
The parties having failed to arrive at a settlement, NCMB Director Teodorico O. Yosores wrote petitioner Alex Bibat
and respondent‘s plant manager Tangente of the lack of willingness of both parties to submit to voluntary
arbitration, which willingness is a pre-requisite to submit the case thereto; and that under the CBA forged by the
parties, the union is an indispensable party to a voluntary arbitration but that since Tan informed respondent that
the union had not authorized petitioners to represent it, it would be absurd to bring the case to voluntary
arbitration.
The NCMB Director thus concluded that ―the demand of [petitioners] to submit the issues . . . to voluntary
arbitration CAN NOT BE GRANTED.‖ He thus advised petitioners to avail of the compulsory arbitration process to
enforce their rights.
On petitioners‘ Motion for Reconsideration,the NCMB Director, by letter of April 11, 2007 to petitioners‘ counsel,
stated that the NCMB ―has no rule-making power to decide on issues [as it] only facilitates settlement among the
parties to . . . labor disputes.‖
Via Petition for Review before the Court of Appeals, it dismissed said petition, x x x x Considering that NCMB
is not a quasi-judicial agency exercising quasi-judicial functions but merely a conciliatory body for the purpose of
facilitating settlement of disputes between parties, its decisions or that of its authorized officer cannot be
appealed either through a petition for review under Rule 43 or under Rule 65 of the Revised Rules of Court.
Petitioners filed the present Petition for Review on Certiorari.
Issues:
1. Whether or not the NCMB, when exercising adjudicative powers acts as a quasi-judicial agency.
2. Whether or not final judgments of RTCs and quasi-judicial bodies like the NCMB are appealable by petition for
review to the CA.
Ruling:
The petition fails.
Section 7 of Rule 43 of the Rules of Court provides that: The failure of the petitioner to comply with any of the
foregoing requirements regarding the payment of the docket and other lawful fees, the deposit for costs, proof of
service of the petition, and the contents of and the documents which should accompany the petition shall be
sufficient ground for the dismissal thereof. (underscoring and emphasis supplied)
Petitioners claim that they had completed the payment of the appellate docket fee and other legal fees when they
filed their motion for reconsideration before the Court of Appeals. While the Court has, in the interest of justice,
given due course to appeals despite the belated payment of those fees, petitioners have not proffered any reason
to call for a relaxation of the above-quoted rule. On this score alone, the dismissal by the appellate court of
petitioners‘ petition is in order.
But even if the above-quoted rule were relaxed, the appellate court‘s dismissal would just the same be
sustained. Under Section 9 (3) of the Judiciary Reorganization Act of 1980,the Court of Appeals exercises exclusive
appellate jurisdiction over all final judgments, decisions, resolutions, orders or awards of Regional Trial Courts
and quasi-judicial agencies, instrumentalities, boards or commissions.
Rule 43 of the Rules of Court under applies to awards, judgments, final orders or resolutions of or authorized by
any quasi-judicial agency in the exercise of its quasi-judicial functions.
A[n agency] is said to be exercising judicial function where [it] has the power to determine what the law is and
what the legal rights of the parties are, and then undertakes to determine these questions and adjudicate upon the
rights of the parties. Quasi-judicial function is a term which applies to the action, discretion, etc. of public
administrative officers or bodies, who are required to investigate facts or ascertain the existence of facts, hold
hearings, and draw conclusions from them as a basis for their official action and to exercise discretion of a judicial
nature. (underscoring supplied)
Given NCMB‘s following functions, as enumerated in Section 22 of Executive Order No. 126 (the
Reorganization Act of the Ministry of Labor and Employment), viz:
(a) Formulate policies, programs, standards, procedures, manuals of operation and guidelines pertaining to
effective mediation and conciliation of labor disputes;
(b) Perform preventive mediation and conciliation functions;
(c) Coordinate and maintain linkages with other sectors or institutions, and other government authorities
concerned with matters relative to the prevention and settlement of labor disputes;
(d) Formulate policies, plans, programs, standards, procedures, manuals of operation and guidelines pertaining
to the promotion of cooperative and non-adversarial schemes, grievance handling, voluntary arbitration and other
voluntary modes of dispute settlement;
(e) Administer the voluntary arbitration program; maintain/update a list of voluntary arbitrations; compile
arbitration awards and decisions;
(f) Provide counseling and preventive mediation assistance particularly in the administration of collective
agreements;
(g) Monitor and exercise technical supervision over the Board programs being implemented in the regional
offices; and
(h) Perform such other functions as may be provided by law or assigned by the Minister;
It cannot be considered a quasi-judicial agency.

Petitioners have not, been duly authorized to represent the union. Apropos is this Court‘s pronouncement in Atlas
Farms, Inc. v. National Labor Relations Commission, viz: x x x Pursuant to Article 260 of the Labor Code, the
parties to a CBA shall name or designate their respective representatives to the grievance machinery and if the
grievance is unsettled in that level, it shall automatically be referred to the voluntary arbitrators designated in
advance by parties to a CBA. Consequently only disputes involving the union and the company shall be
referred to the grievance machinery or voluntary arbitrators.
Clutching at straws, petitioners invoke the first paragraph of Article 255 of the Labor Code which states: Art.
255. The labor organization designated or selected by the majority of the employees in an appropriate collective
bargaining unit shall be the exclusive representative of the employees in such unit for the purpose of collective
bargaining. However, an individual employee or group of employees shall have the right at any time to present
grievances to their employer.
To petitioners, the immediately quoted provision ―is meant to be an exception to the exclusiveness of the
representative role of the labor organization/union.‖
SAINT LOUIS UNIVERSITY vs. COBARRUBIAS

[G.R. No. 187104, August 3, 2010]
Facts:
Evangeline C. Cobarrubias is an associate professor of ST. Louis University, College of Human Sciences. She is an
active member of the Union of Faculty and Employees of Saint Louis University (UFESLU).
The 2001-2006 and 2006-2011 Collective Bargaining Agreements (CBAs) between SLU and UFESLU contain the
following common provision on forced leave:
Section 7.7. For teaching employees in college who fail the yearly evaluation, the following provisions shall apply:
(a) Teaching employees who are retained for three (3) cumulative years in five (5) years shall be on forced leave
for one (1) regular semester during which period all benefits due them shall be suspended.
SLU placed Cobarrubias on forced leave for the first semester of School Year (SY) 2007-2008 when she failed the
evaluation for SY 2002-2003, SY 2005-2006, and SY 2006-2007, with the rating of 85, 77, and 72.9 points,
respectively, below the required rating of 87 points.
To reverse the imposed forced leave, Cobarrubias sought recourse from the CBA‘s grievance machinery. Despite
the conferences held, the parties still failed to settle their dispute, prompting Cobarrubias to file a case for illegal
forced leave or illegal suspension with the NCMB. When circulation and mediation again failed, the parties
submitted the issues between them for voluntary arbitration before Voluntary Arbitrator (VA) Daniel T. Fariñas.
The voluntary arbitrator dismissed the case. He noted that the CBA clearly authorized SLU to place its teaching
employees on forced leave when they fail in the evaluation for three (3) years within a five-year period, without a
distinction on whether the three years fall within one or two CBA periods.
Cobarrubias filed with the CA a petition for review under Rule 43 of the Rules of Court, but failed to pay the
required filing fees and to attach to the petition copies of the material portions of the record.14
SLU insisted that the VA decision had already attained finality for Cobarrubias‘ failure to pay the docket fees on
time.
The CA brushed aside SLU‘s insistence on the finality of the VA decision and annulled it, declaring that the "three
(3) cumulative years in five (5) years" phrase in Section 7.7(a) of the 2006-2011 CBA means within the five-year
effectivity of the CBA. Thus, the CA ordered SLU to pay all the benefits due Cobarrubias for the first semester of SY
2007-2008, when she was placed on forced leave.
Issue:
Whether the CA erred in reinstating Cobarrubias‘ petition despite her failure to pay the appeal fee within the
reglementary period, and in reversing the VA decision. To state the obvious, the appeal fee is a threshold issue
that renders all other issues unnecessary if SLU‘s position on this issue is correct.
Ruling:
Payment of Appellate Court Docket Fees
Appeal is not a natural right but a mere statutory privilege, thus, appeal must be made strictly in accordance with
the provision set by law.25 Rule 43 of the Rules of Court provides that appeals from the judgment of the VA shall
be taken to the CA, by filing a petition for review within fifteen (15) days from the receipt of the notice of
judgment.26 Furthermore, upon the filing of the petition, the petitioner shall pay to the CA clerk of court the
docketing and other lawful fees non-compliance with the procedural requirements shall be a sufficient ground for
the petition‘s dismissal. Thus, payment in full of docket fees within the prescribed period is not only mandatory, but
also jurisdictional. It is an essential requirement, without which, the decision appealed from would become final
and executory as if no appeal has been filed.
As early as the 1932 case of Lazaro v. Endencia and Andres we stressed that the payment of the full amount of
the docket fee is an indispensable step for the perfection of an appeal. In Lee v. Republic, we decided that even
though half of the appellate court docket fee was deposited, no appeal was deemed perfected where the other half
was tendered after the period within which payment should have been made. In Aranas v. Endona, we reiterated
that the appeal is not perfected if only a part of the docket fee is deposited within the reglementary period and the
remainder is tendered after the expiration of the period.
In the present case, Cobarrubias filed her petition for review on December 5, 2007, fifteen (15) days from receipt
of the VA decision on November 20, 2007, but paid her docket fees in full only after seventy-two (72) days, when
she filed her motion for reconsideration on February 15, 2008 and attached the postal money orders for P4,230.00.
Undeniably, the docket fees were paid late, and without payment of the full docket fees, Cobarrubias‘ appeal was
not perfected within the reglementary period.
Exceptions to the Rule on Payment of Appellate Court Docket Fees not applicable
Procedural rules do not exist for the convenience of the litigants; the rules were established primarily to provide
order to and enhance the efficiency of our judicial system. While procedural rules are liberally construed, the
provisions on reglementary periods are strictly applied, indispensable as they are to the prevention of needless
delays, and are necessary to the orderly and speedy discharge of judicial business.
Viewed in this light, procedural rules are not to be belittled or dismissed simply because their non-observance may
have prejudiced a party's substantive rights; like all rules, they are required to be followed. However, there are
recognized exceptions to their strict observance, such as: (1) most persuasive and weighty reasons; (2) to relieve a
litigant from an injustice not commensurate with his failure to comply with the prescribed procedure; (3) good faith
of the defaulting party by immediately paying within a reasonable time from the time of the default; (4) the
existence of special or compelling circumstances; (5) the merits of the case; (6) a cause not entirely attributable to
the fault or negligence of the party favored by the suspension of the rules; (7) a lack of any showing that the
review sought is merely frivolous and dilatory; (8) the other party will not be unjustly prejudiced thereby; (9) fraud,
accident, mistake or excusable negligence without the appellant's fault; (10) peculiar, legal and equitable
circumstances attendant to each case; (11) in the name of substantial justice and fair play; (12) importance of the
issues involved; and (13) exercise of sound discretion by the judge, guided by all the attendant circumstances.52
Thus, there should be an effort, on the part of the party invoking liberality, to advance a reasonable or meritorious
explanation for his/her failure to comply with the rules.
In Cobarrubias' case, no such explanation has been advanced. Other than insisting that the ends of justice and fair
play are better served if the case is decided on its merits, Cobarrubias offered no excuse for her failure to pay the
docket fees in full when she filed her petition for review. To us, Cobarrubias‘ omission is fatal to her cause.
We, thus, find that the CA erred in reinstating Cobarrubias‘ petition for review despite the nonpayment of the
requisite docket fees within the reglementary period. The VA decision had lapsed to finality when the docket fees
were paid; hence, the CA had no jurisdiction to entertain the appeal except to order its dismissal.
TENG vs. PAHAGAC ET AL.

[G.R. No. 169704, November 17, 2010]
Facts:
Albert Teng Fish Trading is engaged in deep sea fishing and, for this purpose, owns boats (basnig), equipment,
and other fishing paraphernalia. As owner of the business, Teng claims that he customarily enters into joint
venture agreements with master fishermen (maestros) who are skilled and are experts in deep sea fishing; they
take charge of the management of each fishing venture, including the hiring of the members of its complement. He
avers that the maestros hired the respondent workers as checkers to determine the volume of the fish caught in
every fishing voyage.
On February 20, 2003, the respondent workers filed a complaint for illegal dismissal against Albert Teng Fish
Trading, Teng, and Chua before the NCMB, Region Branch No. IX, Zamboanga City.
The VA rendered a decision in Teng‘s favor and declared that no employer-employee relationship existed between
Teng and the respondent workers.
The respondent workers received the VA‘s decision on June 12, 2003. They filed a motion for reconsideration,
which was denied in an order dated June 27, 2003 and which they received on July 8, 2003. The VA reasoned out
that Section 6, Rule VII of the 1989 Procedural Guidelines in the Conduct of Voluntary Arbitration Proceedings
(1989 Procedural Guidelines) does not provide the remedy of a motion for reconsideration to the party adversely
affected by the VA‘s order or decision.
Respondent-workers elevated the case to the CA, which reversed the decision of the VA. Teng moved to reconsider
the CA‘s decision, but the CA denied the motion in its resolution of September 1, 2005. He, thereafter, filed the
present Petition for Review on Certiorari under Rule 45 of the Rules of Court, claiming that:
a. the VA‘s decision is not subject to a motion for reconsideration; and

b. no employer-employee relationship existed between Teng and the respondent workers.
Teng contends that the VA‘s decision is not subject to a motion for reconsideration in the absence of any specific
provision allowing this recourse under Article 262-A of the Labor Code. He cites the 1989 Procedural Guidelines,
which, as the VA declared, does not provide the remedy of a motion for reconsideration. He claims that after the
lapse of 10 days from its receipt, the VA‘s decision becomes final and executory unless an appeal is taken. He
argues that when the respondent workers received the VA‘s decision on June 12, 2003, they had 10 days, or until
June 22, 2003, to file an appeal. As the respondent workers opted instead to move for reconsideration, the 10-day
period to appeal continued to run; thus, the VA‘s decision had already become final and executory by the time they
assailed it before the CA on July 21, 2003.
Issue:
Whether or not the VA‘s decision is subject to a motion for reconsideration.
Ruling:
Article 262-A of the Labor Code does not prohibit the filing of a motion for reconsideration.
These rulings fully establish that the absence of a categorical language in Article 262-A does not preclude the filing
of a motion for reconsideration of the VA‘s decision within the 10-day period. Teng‘s allegation that the VA‘s
decision had become final and executory by the time the respondent workers filed an appeal with the CA thus fails.
We consequently rule that the respondent workers seasonably filed a motion for reconsideration of the VA‘s
judgment, and the VA erred in denying the motion because no motion for reconsideration is allowed.
By allowing a 10-day period, the obvious intent of Congress in amending Article 263 to Article 262-A is to provide
an opportunity for the party adversely affected by the VA‘s decision to seek recourse via a motion for
reconsideration or a petition for review under Rule 43 of the Rules of Court filed with the CA. Indeed, a motion for
reconsideration is the more appropriate remedy in line with the doctrine of exhaustion of administrative remedies.
For this reason, an appeal from administrative agencies to the CA via Rule 43 of the Rules of Court requires
exhaustion of available remedies as a condition precedent to a petition under that Rule.
The requirement that administrative remedies be exhausted is based on the doctrine that in providing for a remedy
before an administrative agency, every opportunity must be given to the agency to resolve the matter and to
exhaust all opportunities for a resolution under the given remedy before bringing an action in, or resorting to, the
courts of justice. Where Congress has not clearly required exhaustion, sound judicial discretion governs,[38] guided
by congressional intent.
By disallowing reconsideration of the VA‘s decision, Section 7, Rule XIX of DO 40-03 and Section 7 of the 2005
Procedural Guidelines went directly against the legislative intent behind Article 262-A of the Labor Code. These
rules deny the VA the chance to correct himself[40] and compel the courts of justice to prematurely intervene with
the action of an administrative agency entrusted with the adjudication of controversies coming under its special
knowledge, training and specific field of expertise. In this era of clogged court dockets, the need for specialized
administrative agencies with the special knowledge, experience and capability to hear and determine promptly
disputes on technical matters or intricate questions of facts, subject to judicial review, is indispensable.[41] In
Industrial Enterprises, Inc. v. Court of Appeals,[42] we ruled that relief must first be obtained in an administrative
proceeding before a remedy will be supplied by the courts even though the matter is within the proper jurisdiction
of a court.
CAONG, JR. vs. BEGUALOS

[G.R. No. 179428, January 26, 2011]
Facts:
Petitioners Primo E. Caong, Jr. (Caong), Alexander J. Tresquio (Tresquio), and Loriano D. Daluyon (Daluyon) were
employed by respondent Avelino Regualos under a boundary agreement, as drivers of his jeepneys. In November
2001, they filed separate complaints for illegal dismissal against respondent who barred them from driving the
vehicles due to deficiencies in their boundary payments.
Labor Arbiter decided in favor of respondent. Petitioners appealed to the NLRC which agreed with the decision of
the LA and dismissed the appeal. The petitioners‘ motion for reconsideration was also denied.
Petitioners filed a petition for certiorari with the CA. The CA found no grave abuse of discretion on the part of the
NLRC. They filed a motion for reconsideration but was denied.
Petitioners thus elevated the case to the Supreme Court arguing that they were illegally dismissed and were not
afforded due process of law.
Issues:
1. Whether or not the respondents were illegally dismissed.
2. Whether or not the policy of suspending drivers pending payment of arrears in their boundary obligations
reasonable.
Ruling:
We have no reason to deviate from such findings. Indeed, petitioners‘ suspension cannot be categorized as
dismissal, considering that there was no intent on the part of respondent to sever the employer-employee
relationship between him and petitioners. In fact, it was made clear that petitioners could put an end to the
suspension if they only pay their recent arrears. As it was, the suspension dragged on for years because of
petitioners‘ stubborn refusal to pay. It would have been different if petitioners complied with the condition and
respondent still refused to readmit them to work. Then there would have been a clear act of dismissal. But such
was not the case. Instead of paying, petitioners even filed a complaint for illegal dismissal against respondent.
Respondent‘s policy of suspending drivers who fail to remit the full amount of the boundary was fair and
reasonable under the circumstances. Respondent explained that he noticed that his drivers were getting lax in
remitting their boundary payments and, in fact, herein petitioners had already incurred a considerable amount of
arrears. He had to put a stop to it as he also relied on these boundary payments to raise the full amount of his
monthly amortizations on the jeepneys. Demonstrating their obstinacy, petitioners, on the days immediately
following the implementation of the policy, incurred deficiencies in their boundary remittances.
It is acknowledged that an employer has free rein and enjoys a wide latitude of discretion to regulate all aspects of
employment, including the prerogative to instill discipline on his employees and to impose penalties, including
dismissal, if warranted, upon erring employees. This is a management prerogative. Indeed, the manner in which
management conducts its own affairs to achieve its purpose is within the management‘s discretion. The only
limitation on the exercise of management prerogative is that the policies, rules, and regulations on work-related
activities of the employees must always be fair and reasonable, and the corresponding penalties, when prescribed,
commensurate to the offense involved and to the degree of the infraction
A company policy must be implemented in such manner as will accord social justice and compassion to the
employee. In case of noncompliance with the company policy, the employer must consider the surrounding
circumstances and the reasons why the employee failed to comply. When the circumstances merit the relaxation of
the application of the policy, then its noncompliance must be excused.
ESTATE OF DULAY vs. ABOITIZ JEBSEN MARITIME INC. ET AL.

[G.R. No. 172642, June 13, 2012]
Facts:
Nelson R. Dulay (Nelson, for brevity) was employed by [herein respondent] General Charterers, Inc. (GCI), a
subsidiary of co-petitioner [herein co-respondent] Aboitiz Jebsen Maritime, Inc. since 1986. He initially worked as
an ordinary seaman and later as bosun on a contractual basis. From September 3, 1999 up to July 19, 2000,
Nelson was detailed in petitioners' vessel, the MV Kickapoo Belle.
On August 13, 2000, or 25 days after the completion of his employment contract, Nelson died due to acute renal
failure secondary to septicemia. At the time of his death, Nelson was a bona fide member of the Associated Marine
Officers and Seaman's Union of the Philippines (AMOSUP), GCI's collective bargaining agent. Nelson's widow,
Merridy Jane, thereafter claimed for death benefits through the grievance procedure of the Collective Bargaining
Agreement (CBA) between AMOSUP and GCI. However, on January 29, 2001, the grievance procedure was
"declared deadlocked" as petitioners refused to grant the benefits sought by the widow.
On March 5, 2001, Merridy Jane filed a complaint with the NLRC Sub-Regional Arbitration Board in General Santos
City against GCI for death and medical benefits and damages.
On March 8, 2001, Joven Mar, Nelson's brother, received P20,000.00 from [respondents] pursuant to article 20(A)2
of the CBA and signed a "Certification" acknowledging receipt of the amount and releasing AMOSUP from further
liability. Merridy Jane contended that she is entitled to the aggregate sum of Ninety Thousand Dollars ($90,000.00)
pursuant to [A]rticle 20 (A)1 of the CBA . . .
Merridy Jane averred that the P20,000.00 already received by Joven Mar should be considered advance payment of
the total claim of US$90,000.[00].
[Herein respondents], on the other hand, asserted that the NLRC had no jurisdiction over the action on account of
the absence of employer-employee relationship between GCI and Nelson at the time of the latter's death. Nelson
also had no claims against petitioners for sick leave allowance/medical benefit by reason of the completion of his
contract with GCI. They further alleged that private respondent is not entitled to death benefits because petitioners
are only liable for such "in case of death of the seafarer during the term of his contract pursuant to the POEA
contract" and the cause of his death is not work-related. Petitioners admitted liability only with respect to article
20(A)2 [of the CBA]. . . .
However, as petitioners stressed, the same was already discharged.
The Labor Arbiter ruled in favor of private respondent. It took cognizance of the case by virtue of Article 217 (a),
paragraph 6 of the Labor Code and the existence of a reasonable causal connection between the employer-
employee relationship and the claim asserted. It ordered the petitioner to pay P4,621,300.00, the equivalent of
US$90,000.00 less P20,000.00, at the time of judgment . . .
The Labor Arbiter also ruled that the proximate cause of Nelson's death was not work-related.
On appeal, [the NLRC] affirmed the Labor Arbiter's decision as to the grant of death benefits under the CBA but
reversed the latter's ruling as to the proximate cause of Nelson's death.
Issue:
Whether or not the CA committed error in ruling that the Labor Arbiter has no jurisdiction over the case.
Ruling:
Petitioner contends that Section 10 of Republic Act (R.A.) 8042, otherwise known as the Migrant Workers and
Overseas Filipinos Act of 1995, vests jurisdiction on the appropriate branches of the NLRC to entertain disputes
regarding the interpretation of a collective bargaining agreement involving migrant or overseas Filipino workers.
Petitioner argues that the abovementioned Section amended Article 217 (c) of the Labor Code which, in turn,
confers jurisdiction upon voluntary arbitrators over interpretation or implementation of collective bargaining
agreements and interpretation or enforcement of company personnel policies.
The pertinent provisions of Section 10 of R.A. 8042 provide as follows:
SEC. 10.Money Claims. — Notwithstanding any provision of law to the contrary, the Labor Arbiters of the National
Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction to hear and decide, within
ninety (90) calendar days after filing of the complaint, the claims arising out of an employer-employee relationship
or by virtue of any law or contract involving Filipino workers for overseas deployment including claims for actual,
moral, exemplary and other forms of damages.
Article 217 (c) of the Labor Code, on the other hand, states that:
xxx xxx xxx
(c)Cases arising from the interpretation or implementation of collective bargaining agreements and those arising
from the interpretation or enforcement of company personnel policies shall be disposed by the Labor Arbiter by
referring the same to the grievance machinery and voluntary arbitration as may be provided in said agreements.
On their part, respondents insist that in the present case, Article 217, paragraph (c) as well as Article 261 of the
Labor Code remain to be the governing provisions of law with respect to unresolved grievances arising from the
interpretation and implementation of collective bargaining agreements. Under these provisions of law, jurisdiction
remains with voluntary arbitrators.
Article 261 of the Labor Code reads, thus:
ARTICLE 261.Jurisdiction of Voluntary Arbitrators or panel of Voluntary Arbitrators. — The Voluntary Arbitrator or
panel of Voluntary Arbitrators shall have original and exclusive jurisdiction to hear and decide all unresolved
grievances arising from the interpretation or implementation of the Collective Bargaining Agreement and those
arising from the interpretation or enforcement of company personnel policies referred to in the immediately
preceding article. Accordingly, violations of a Collective Bargaining Agreement, except those which are gross in
character, shall no longer be treated as unfair labor practice and shall be resolved as grievances under the
Collective Bargaining Agreement. For purposes of this article, gross violations of Collective Bargaining Agreement
shall mean flagrant and/or malicious refusal to comply with the economic provisions of such agreement.
The Commission, its Regional Offices and the Regional Directors of the Department of Labor and Employment shall
not entertain disputes, grievances or matters under the exclusive and original jurisdiction of the Voluntary
Arbitrator or panel of Voluntary Arbitrators and shall immediately dispose and refer the same to the Grievance
Machinery or Voluntary Arbitration provided in the Collective Bargaining Agreement.
The petition is without merit.
It is true that R.A. 8042 is a special law governing overseas Filipino workers. However, a careful reading of this
special law would readily show that there is no specific provision thereunder which provides for jurisdiction over
disputes or unresolved grievances regarding the interpretation or implementation of a CBA. Section 10 of R.A.
8042, which is cited by petitioner, simply speaks, in general, of "claims arising out of an employer-employee
relationship or by virtue of any law or contract involving Filipino workers for overseas deployment including claims
for actual, moral, exemplary and other forms of damages." On the other hand, Articles 217 (c) and 261 of the
Labor Code are very specific in stating that voluntary arbitrators have jurisdiction over cases arising from the
interpretation or implementation of collective bargaining agreements. Stated differently, the instant case involves a
situation where the special statute (R.A. 8042) refers to a subject in general, which the general statute (Labor
Code) treats in particular. 5 In the present case, the basic issue raised by Merridy Jane in her complaint filed with
the NLRC is: which provision of the subject CBA applies insofar as death benefits due to the heirs of Nelson are
concerned. The Court agrees with the CA in holding that this issue clearly involves the interpretation or
implementation of the said CBA. Thus, the specific or special provisions of the Labor Code govern.
In any case, the Court agrees with petitioner's contention that the CBA is the law or contract between the parties.
Article 13.1 of the CBA entered into by and between respondent GCI and AMOSUP, the union to which petitioner
belongs, provides as follows:
The Company and the Union agree that in case of dispute or conflict in the interpretation or application of any of
the provisions of this Agreement, or enforcement of Company policies, the same shall be settled through
negotiation, conciliation or voluntary arbitration. The Company and the Union further agree that they will use their
best endeavor to ensure that any dispute will be discussed, resolved and settled amicably by the parties hereof
within ninety (90) days from the date of filing of the dispute or conflict and in case of failure to settle thereof any
of the parties retain their freedom to take appropriate action.
From the foregoing, it is clear that the parties, in the first place, really intended to bring to conciliation or voluntary
arbitration any dispute or conflict in the interpretation or application of the provisions of their CBA. It is settled that
when the parties have validly agreed on a procedure for resolving grievances and to submit a dispute to voluntary
arbitration then that procedure should be strictly observed.
It may not be amiss to point out that the abovequoted provisions of the CBA are in consonance with Rule VII,
Section 7 of the present Omnibus Rules and Regulations Implementing the Migrant Workers and Overseas Filipinos
Act of 1995, as amended by Republic Act No. 10022, which states that "[f]or OFWs with collective bargaining
agreements, the case shall be submitted for voluntary arbitration in accordance with Articles 261 and 262 of the
Labor Code." The Court notes that the said Omnibus Rules and Regulations were promulgated by the Department
of Labor and Employment (DOLE) and the Department of Foreign Affairs (DFA) and that these departments were
mandated to consult with the Senate Committee on Labor and Employment and the House of Representatives
Committee on Overseas Workers Affairs.
In the same manner, Section 29 of the prevailing Standard Terms and Conditions Governing the Employment of
Filipino Seafarers on Board Ocean Going Vessels, promulgated by the Philippine Overseas Employment
Administration (POEA), provides as follows:
Section 29.Dispute Settlement Procedures. — In cases of claims and disputes arising from this employment, the
parties covered by a collective bargaining agreement shall submit the claim or dispute to the original and exclusive
jurisdiction of the voluntary arbitrator or panel of arbitrators. If the parties are not covered by a collective
bargaining agreement, the parties may at their option submit the claim or dispute to either the original and
exclusive jurisdiction of the National Labor Relations Commission (NLRC), pursuant to Republic Act (RA) 8042,
otherwise known as the Migrant Workers and Overseas Filipinos Act of 1995 or to the original and exclusive
jurisdiction of the voluntary arbitrator or panel of arbitrators. If there is no provision as to the voluntary arbitrators
to be appointed by the parties, the same shall be appointed from the accredited voluntary arbitrators of the
National Conciliation and Mediation Board of the Department of Labor and Employment. DHSEcI
The Philippine Overseas Employment Administration (POEA) shall exercise original and exclusive jurisdiction to hear
and decide disciplinary action on cases, which are administrative in character, involving or arising out of violations
of recruitment laws, rules and regulations involving employers, principals, contracting partners and Filipino
seafarers. (Emphasis supplied)
It is clear from the above that the interpretation of the DOLE, in consultation with their counterparts in the
respective committees of the Senate and the House of Representatives, as well as the DFA and the POEA is that
with respect to disputes involving claims of Filipino seafarers wherein the parties are covered by a collective
bargaining agreement, the dispute or claim should be submitted to the jurisdiction of a voluntary arbitrator or
panel of arbitrators. It is only in the absence of a collective bargaining agreement that parties may opt to submit
the dispute to either the NLRC or to voluntary arbitration. It is elementary that rules and regulations issued by
administrative bodies to interpret the law which they are entrusted to enforce, have the force of law, and are
entitled to great respect. 8 Such rules and regulations partake of the nature of a statute and are just as binding as
if they have been written in the statute itself. 9 In the instant case, the Court finds no cogent reason to depart
from this rule.
The above interpretation of the DOLE, DFA and POEA is also in consonance with the policy of the state to promote
voluntary arbitration as a mode of settling labor disputes.
No less than the Philippine Constitution provides, under the third paragraph, Section 3, Article XIII, thereof that
"[t]he State shall promote the principle of shared responsibility between workers and employers and the
preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce their mutual
compliance therewith to foster industrial peace."
Consistent with this constitutional provision, Article 211 of the Labor Code provides the declared policy of the State
"[t]o promote and emphasize the primacy of free collective bargaining and negotiations, including voluntary
arbitration, mediation and conciliation, as modes of settling labor or industrial disputes."
On the basis of the foregoing, the Court finds no error in the ruling of the CA that the voluntary arbitrator has
jurisdiction over the instant case.
LEPANTO CONSOLIDATED MINING COMPANY vs. THE LEPANTO CAPATAZ UNION

[G.R. No. 157086, February 18, 2013]
Facts:
As a domestic corporation authorized to engage in large-scale mining, Lepanto operated several mining claims in
Mankayan, Benguet. On May 27, 1998, respondent Lepanto Capataz Union (Union), a labor organization duly
registered with DOLE, filed a petition for consent election with the Industrial Relations Division of the Cordillera
Regional Office (CAR) of DOLE, thereby proposing to represent 139 capatazes of Lepanto.
In due course, Lepanto opposed the petition, contending that the Union was in reality seeking a certification
election, not a consent election, and would be thereby competing with the Lepanto Employees Union (LEU), the
current collective bargaining agent. Lepanto pointed out that the capatazes were already members of LEU, the
exclusive representative of all rank-and-file employees of its Mine Division.
On May 2, 2000, Med-Arbiter Michaela A. Lontoc of DOLE-CAR issued a ruling to the effect that the capatazes could
form a separate bargaining unit due to their not being rank-and-file employees.
On the day of the certification election, however, Lepanto presented an opposition/protest. Hence, on February 8,
2001, a hearing was held on Lepanto's opposition/protest. Although the parties were required in that hearing to
submit their respective position papers, Lepanto later opted not to submit its position paper, and contended that
the issues identified during the hearing did not pose any legal issue to be addressed in a position paper.
On April 26, 2001, Med-Arbiter Florence Marie A. Gacad-Ulep of DOLE-CAR rendered a decision certifying the Union
as the sole and exclusive bargaining agent of all capatazes of Lepanto.
On May 18, 2001, Lepanto appealed the decision of Med-Arbiter Gacad-Ulep to the DOLE Secretary.
By her Resolution dated September 17, 2002, 15 DOLE Secretary Patricia A. Sto. Tomas affirmed the decision
dated April 26, 2001, holding and disposing thus:
Appellant accused Med-Arbiter Ulep of grave abuse of discretion amounting to lack of jurisdiction based on her
failure to resolve appellant's motion to modify order to submit position papers and on rendering judgment on the
basis only of appellee's position paper.
Section 5, Rule XXV of Department Order No. 9, otherwise known as the New Rules Implementing Book V of the
Labor Code, states that "in all proceedings at all levels, incidental motions shall not be given due course, but shall
remain as part of the records for whatever they may be worth when the case is decided on the merits".
Further, the motion to modify order to submit position papers filed by appellant is without merit. Appellant claimed
that the issues over which Med-Arbiter Ulep directed the submission of position papers were: (1) failure to
challenge properly; (2) failure (especially of LEU) to participate actively in the proceedings before the decision
calling for the conduct of certification election; and (3) validity of earlier arguments. According to appellant, the
first issue was for appellee LCU to reply to in its position paper, the second issue was for the LEU and the third
issue for appellant company to explain in their respective position paper. It was the position of appellant company
that unless the parties filed their position paper on each of their respective issues, the other parties cannot discuss
the issues they did not raise in the same position papers and have to await receipt of the others' position paper for
their appropriate reply.
Section 9, Rule XI of Department Order No. 9, which is applied with equal force in the disposition of protests on the
conduct of election, states that "the Med-Arbiter shall in the same hearing direct all concerned parties, including
the employer, to simultaneously submit their respective position papers within a non-extendible period of ten
days". The issues as recorded in the minutes of 28 February 2001 hearing before the Med-Arbiter are clear. The
parties, including appellant company were required to submit their respective positions on whether there was
proper challenge of the voters, whether LEU failed to participate in the proceedings, if so, whether it should be
allowed to participate at this belated stage and whether the arguments raised during the pre-election conferences
and in the protests are valid. The parties, including appellant company were apprised of these issues and they
agreed thereto. The minutes of the hearing even contained the statement that "no order will issue" and that "the
parties are informed accordingly". If there is any matter that had to be clarified, appellant should have clarified the
same during the said hearing and refused to file its position paper simultaneously with LCU and LEU. It appears
that appellant did not do so and acquiesced to the filing of its position paper within fifteen days from the date of
said hearing.
Issue:
Whether or not the secretary of labor acted without or in excess of jurisdiction, [o]r with grave abuse of discretion
amounting to lack or excess of jurisdiction in issuing the decision dated september 17, 2002, when she deliberately
ignored the facts and ruled in favor of the respondent union, despite her own finding that there had been a
premature canvass of votes.
Ruling:
The filing of the motion for reconsideration is a pre-requisite to the filing of a petition for certiorari to
assail the decision of the DOLE Secretary.
We hold to be untenable and not well taken Lepanto's submissions that: (1) a motion for reconsideration was not
an available remedy from the decision of the DOLE Secretary because of Section 15, Rule XI, Book V of the
Omnibus Rules Implementing the Labor Code, as amended; and (2) the ruling in National Federation of Labor v.
Laguesma 21 (recognizing the remedy of certiorari against the decision of the DOLE Secretary to be filed initially in
the CA) actually affirms its position that an immediate recourse to the CA on certiorari is proper even without the
prior filing of a motion for reconsideration.
To start with, the requirement of the timely filing of a motion for reconsideration as a precondition to the filing of a
petition for certiorari accords with the principle of exhausting administrative remedies as a means to afford every
opportunity to the respondent agency to resolve the matter and correct itself if need be. 22 SIEHcA
And, secondly, the ruling in National Federation of Labor v. Laguesma reiterates St. Martin's Funeral Home v.
National Labor Relations Commission, where the Court has pronounced that the special civil action of certiorari is
the appropriate remedy from the decision of the National Labor Relations Commission (NLRC) in view of the lack of
any appellate remedy provided by the Labor Code to a party aggrieved by the decision of the NLRC. Accordingly,
any decision, resolution or ruling of the DOLE Secretary from which the Labor Code affords no remedy to the
aggrieved party may be reviewed through a petition for certiorari initiated only in the CA in deference to the
principle of the hierarchy of courts.
Agreeing with Med-Arbiter Lontoc's findings, then DOLE Undersecretary Baldoz, acting by authority of the DOLE
Secretary, observed in the resolution dated July 12, 2000, thus:
The bargaining unit sought to be represented by the appellee are the capataz employees of the
appellant. There is no other labor organization of capatazes within the employer unit except herein
appellant. Thus, appellant is an unorganized establishment in so far as the bargaining unit of
capatazes is concerned. In accordance with the last paragraph of Section 11, Rule XI, Department
Order No. 9 which provides that "in a petition filed by a legitimate labor organization involving an
unorganized establishment, the Med-Arbiter shall, pursuant to Article 257 of the Code, automatically
order the conduct of certification election after determining that the petition has complied with all
requirements under Sections 1, 2 and 4 of the same rules and that none of the grounds for dismissal
thereof exists", the order for the conduct of a certification election is proper.
We cannot undo the affirmance by the DOLE Secretary of the correct findings of her subordinates in the DOLE, an
office that was undeniably possessed of the requisite expertise on the matter in issue. In dealing with the matter,
her subordinates in the DOLE fairly and objectively resolved whether the Union could lawfully seek to be the
exclusive representative of the bargaining unit of capatazes in the company. Their factual findings, being supported
by substantial evidence, are hereby accorded great respect and finality. Such findings cannot be made the subject
of our judicial review by petition under Rule 45 of the Rules of Court, because:
. . . [T]he office of a petition for review on certiorari under Rule 45 of the Rules of Court requires that it shall raise
only questions of law. The factual findings by quasi-judicial agencies, such as the Department of Labor and
Employment, when supported by substantial evidence, are entitled to great respect in view of their expertise in
their respective field. Judicial review of labor cases does not go far as to evaluate the sufficiency of evidence on
which the labor official's findings rest. It is not our function to assess and evaluate all over again the evidence,
testimonial and documentary, adduced by the parties to an appeal, particularly where the findings of both the trial
court (here, the DOLE Secretary) and the appellate court on the matter coincide, as in this case at bar. The Rule
limits that function of the Court to review or revision of errors of law and not to a second analysis of the evidence.
Here, petitioners would have us re-calibrate all over again the factual basis and the probative value of the pieces of
evidence submitted by the Company to the DOLE, contrary to the provisions of Rule 45. Thus, absent any showing
of whimsical or capricious exercise of judgment, and unless lack of any basis for the conclusions made by the
appellate court may be amply demonstrated, we may not disturb such factual findings.
In any event, we affirm that capatazes or foremen are not rank-and-file employees because they are an extension
of the management, and as such they may influence the rank-and-file workers under them to engage in slowdowns
or similar activities detrimental to the policies, interests or business objectives of the employers.
7K CORP. vs. ALBARICO

[G.R. No. 182295, June 26, 2013]
Facts:
Petitioner 7K Corporation terminated Albarico‘s employment allegedly for his poor sales performance. Respondent
submitted his money claims against petitioner for arbitration before the NCMB. While the NCMB arbitration case
was pending, Albarico filed a complaint for illegal dismissal with money claims against petitioner before the
Regional Arbitration Branch of the NLRC. Petitioner filed its position paper in the NCMB arbitration case denying
that respondent was terminated from work, much less illegally dismissed. It claimed that Albarico was guilty of
abandonment of employment. The NCMB voluntary arbitrator rendered a decision finding petitioner corporation
liable for illegal dismissal. In lieu of reinstatement, however, the voluntary arbitrator ordered the corporation to pay
Albarico his separation pay, backwages, and attorney‘s fee.
Issue:
Whether the voluntary arbitrator properly assumed jurisdiction to decide the issue of the legality of the dismissal of
respondent even if the same was not expressly claimed in the Submission Agreement of the parties.
Ruling:
The voluntary arbitrator rightly assumed jurisdiction to decide the said issue.
Voluntary arbitrators may, by agreement of the parties, assume jurisdiction over a termination dispute such asthe
present case, contrary to the assertion of petitioner that they may not. Under the Labor Code, separation pay may
be given not only when there is illegal dismissal. In fact, it is also given to employees who are terminated for
authorized causes, such as redundancy, retrenchment or installation of labor-saving devices under Article 283 of
the Labor Code. Additionally, jurisprudence holds that separation pay may also be awarded for considerations of
social justice, even if an employee has been terminated for a just cause other than serious misconduct or an act
reflecting on moral character. The Court has also ruled that separation pay may be awarded if it has become an
established practice of the company to pay the said benefit to voluntarily resigning employees or to those validly
dismissed for non-membership in a union as required in a closed-shop agreement. Having established that the
issue of the legality of dismissal of Albarico was in fact necessarily albeit not explicitly included in the Submission
Agreement signed by the parties, this Court rules that the voluntary arbitrator rightly assumed jurisdiction to decide
the said issue. Consequently, we also rule that the voluntary arbitrator may award backwages upon a finding of
illegal dismissal, even though the issue of entitlement thereto is not explicitly claimed in the Submission
Agreement. Backwages, in general, are awarded on the ground of equity as a form of relief that restores the
income lost by the terminated employee by reason of his illegal dismissal.
PHILIPPINE ELECTRIC CORPORATION (PHILEC) vs. COURT OF APPEALS

G.R. No. 168612, December 10, 2014
This is a petition for review on certiorari of the Court of Appeals‘ decision dated May 25, 2004, dismissing the
Philippine Electric Corporation‘s petition for certiorari for lack of merit.
Philippine Electric Corporation (PHILEC) is a domestic corporation "engaged in the manufacture and repairs of high
voltage transformers." Among its rank-and-file employees were Eleodoro V. Lipio (Lipio) and Emerlito C. Ignacio,
Sr. (Ignacio, Sr.), former members of the PHILEC Workers‘ Union (PWU). PWU is a legitimate labor organization
and the exclusive bargaining representative of PHILEC‘s rank-and-file employees.
Lipio and Ignacio, Sr. were rank-and-file employees when PHILEC selected them for training for the position of
Foreman I beginning August 25, 1997. Lipio and Ignacio, Sr. were selected for training during the effectivity of the
June 1, 1997 rank-and-file collective bargaining agreement. Therefore, Lipio‘s and Ignacio, Sr.‘s training allowance
must be computed based on Article X, Section 4 and ArticleIX, Section 1(f) of the June 1, 1997 collective
bargaining agreement.
Contrary to PHILEC‘s claim, Lipio and Ignacio, Sr. were not transferred out of the bargaining unit when they were
selected for training. Lipio and Ignacio, Sr. remained rank-and-file employees while they trained for the position of
Foreman I. Under Article IX, Section 1(e) of the June 1, 1997 collective bargaining agreement, 114 a trainee who is
"unable to demonstrate his ability to perform the work . . . shall be reverted to his previous assignment. . .
."115According to the same provision, the trainee "shall hold that job on a trial or observation basis and . . . subject
to prior approval of the authorized management official, be appointed to the position in a regular capacity."116
Thus, training is a condition precedent for promotion. Selection for training does not mean automatic transfer out
of the bargaining unit of rankand-file employees.
Moreover, the June 1, 1997 collective bargaining agreement states that the training allowance of a rank-and-file
employee "whose application for a posted job is accepted shall [be computed] in accordance with Section (f) of
[Article IX]."117 Since Lipio and Ignacio, Sr. were rank-and-file employees when they applied for training for the
position of Foreman I, Lipio‘s and Ignacio, Sr.‘s training allowance must be computed based on Article IX, Section
1(f) of the June 1, 1997 rank-and-file collective bargaining agreement.
Claiming that the schedule of training allowance stated in the memoranda served on Lipio and Ignacio,Sr. did not
conform to Article X, Section 4 of the June 1, 1997 collective bargaining agreement, PWU submitted the
grievance to the grievance machinery. PWU and PHILEC failed to amicably settle their grievance.
Voluntary Arbitrator Jimenez held in the decision dated August 13, 1999, that PHILEC violated its collective
bargaining agreement with PWU. According to him, PHILEC‘s acts "cannot be considered a gross violation of the
[collective bargaining agreement] nor . . . [a] flagrant and/or malicious refusal to comply with the economic
provisions of the [agreement]."
In its position paper, PHILEC emphasized that it promoted Lipio and Ignacio, Sr. while it was still negotiating a new
collective bargaining agreement with PWU. Since PHILEC and PWU had not yet negotiated a new collective
bargaining agreement when PHILEC selected Lipio and Ignacio, Sr. for training, PHILEC applied the "Modified SGV"
pay grade scale in computing Lipio‘s and Ignacio, Sr.‘s training allowance.
Even assuming that it violated the collective bargaining agreement, PHILEC argued that its violation was not
"gross" or a "flagrant and/or malicious refusal to comply with the economic provisions of [the collective bargaining
agreement]." PHILEC, therefore, was not guilty of unfair labor practice.
Voluntary Arbitrator‘s decision in finding the petitioner‘s guilty for violation of the CBA was affirmed by CA.It agreed
that PHILEC was bound to apply Article X, Section 4 of its June 1, 1997 collective bargaining agreement with PWU
in computing Lipio‘s and Ignacio, Sr.‘s training allowance. In its decision, the Court of Appeals denied due course
and dismissed PHILEC‘s petition for certiorari for lack of merit. Thus the PHILEC appealed.
ISSUE: Won there exist a valid appeal by petitioner.
Ruling: The proper remedy is : Rule 43, Sections 1 and 3 of the Rules of Court provide:
Section 1. Scope.‖ This Rule shall apply to appeals from judgments or final orders of the Court of Tax Appeals and
from awards, judgments, final orders or resolutions of or authorized by any quasi-judicial agency in the exercise of
its quasi-judicial functions.
x xxxxx
Sec. 3. Where to appeal.
An appeal under this Rule may be taken to the Court of Appeals within the period and in the
manner herein provided, whether the appeal involves questions of fact, of law, or mixed questions
of fact and law. (Emphasis supplied)
A Voluntary Arbitrator or a panel of Voluntary Arbitrators has the exclusive original

jurisdiction over grievances arising from the interpretation or implementation of
collective bargaining agreements. Should the parties agree, a Voluntary Arbitrator or a panel
of Voluntary Arbitrators shall also resolve the parties‘ other labor disputes, including unfair labor
practices and bargaining deadlocks. Articles 261 and 262 of the Labor Code provide:
ART. 261. JURISDICTION OF VOLUNTARY ARBITRATORS OR PANEL OF VOLUNTARY ARBITRATORS.
The Voluntary Arbitrator or panel of Voluntary Arbitrators shall have original and exclusive
jurisdiction to hear and decide all unresolved grievances arising from the interpretation or
implementation of the Collective Bargaining Agreement and those arising from the interpretation or
enforcement of company personnel policies referred to in the immediately preceding article.
Accordingly, violations of a Collective Bargaining Agreement, except those which are gross in
character, shall no longer be treated as unfair labor practice and shall be resolved as grievances
under the Collective Bargaining Agreement. For purposes of this article, gross violations of
Collective Bargaining Agreement shall mean flagrant and/or malicious refusal to comply with the
economic provisions of such agreement.
ART. 262. JURISDICTION OVER OTHER LABOR DISPUTES.
The Voluntary Arbitrator or panel of Voluntary Arbitrators, upon agreement of the parties, shall
also hear and decide all other labor disputes including unfair labor practices and bargaining
deadlocks.
In Luzon Development Bank v. Association of Luzon Development Bank Employees, this court ruled that
the proper remedy against the award or decision of the Voluntary Arbitrator is an appeal before the Court of
Appeals. This court first characterized the office of a Voluntary Arbitrator or a panel of Voluntary Arbitrators as a
quasi-judicial agency, citing Volkschel Labor Union, et al. v. NLRC71 and Oceanic Bic Division (FFW) v. Romero:
In Volkschel Labor Union, et al. v. NLRC, et al.,on the settled premise that the judgments of courts and awards of
quasi-judicial agencies must become final at some definite time, this Court ruled that the awards of voluntary
arbitrators determine the rights of parties; hence, their decisions have the same legal effect as
judgments of a court. It follows that the voluntary arbitrator, whether acting solely or in a panel, enjoys in law
the status of a quasi-judicial agency but independent of, and apart from, the NLRC since his decisions are not
appealable to the latter.
Since the office of a Voluntary Arbitrator or a panel of Voluntary Arbitrators is considered a quasi-judicial agency,
this court concluded that a decision or award rendered by a Voluntary Arbitrator is appealable before the Court of
Appeals. Under Section 9 of the Judiciary Reorganization Act of 1980, the Court of Appeals has the exclusive
original jurisdiction over decisions or awards of quasi-judicial agencies and instrumentalities:
Section 9. Jurisdiction. The Court of Appeals shall exercise…
3. Exclusive appellate jurisdiction over all final judgements, resolutions, orders or awards of
Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards or commission,
including the Securities and Exchange Commission, the Social Security Commission, the Employees
Compensation Commission and the Civil Service Commission, except those falling within the
appellate jurisdiction of the Supreme Court in accordance with the Constitution, the Labor Code of
the Philippines under Presidential Decree No. 442, as amended, the provisions of this Act, and of
subparagraph (1) of the third paragraph and subparagraph 4 of the fourth paragraph of Section 17
of the Judiciary Act of 1948. (Emphasis supplied)
SEC. 2. Cases not covered. -This Rule shall not apply to judgments or final orders issued under the Labor Code of
the Philippines.
The provisions may be new to the Rules of Court but it is far from being a new law. Section 2, Rule
42 of the 1997 Rules of Civil Procedure, as presently worded, is nothing more but a reiteration of
the exception to the exclusive appellate jurisdiction of the Court of Appeals, as provided for in
Section 9, Batas Pambansa Blg. 129, as amended by Republic Act No. 7902:
(3) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders or awards
of Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards or commissions,
including the Securities and Exchange Commission, the Employees‘ Compensation Commission and
the Civil Service Commission, except those falling within the appellate jurisdiction of the Supreme
Court in accordance with the Constitution, the Labor Code of the Philippines under Presidential
Decree No. 442, as amended, the provisions of this Act and of subparagraph (1) of the third
paragraph and subparagraph (4) of the fourth paragraph of Section 17 of the Judiciary Act of
1948.
The Court took into account this exception in Luzon Development Bank but, nevertheless, held that the decisions of
voluntary arbitrators issued pursuant to the Labor Code do not come within its ambit:
x x x. The fact that [the voluntary arbitrator‘s] functions and powers are provided for in the Labor
Code does not place him within the exceptions to said Sec. 9 since he is a quasi-judicial
instrumentality as contemplated therein. It will be noted that, although the Employees‘
Compensation Commission is also provided for in the Labor Code, Circular No. 1-91, which is the
forerunner of the present Revised Administrative Circular No. 1-95, laid down the procedure for the
appealability of its decisions to the Court of Appeals under the foregoing rationalization, and this
was later adopted by Republic Act No. 7902 in amending Sec. 9 of B.P. 129.
This court has since reiterated the Luzon Development Bank ruling in its decisions.78
Article 262-A of the Labor Code provides that the award or decision of the Voluntary Arbitrator "shall be final and
executory after ten (10) calendar days from receipt of the copy of the award or decision by the parties":
Art. 262-A. PROCEDURES. The Voluntary Arbitrator or panel of Voluntary Arbitrators shall have the power to hold
hearings, receive evidences and take whatever action is necessary to resolve the issue or issues subject of the
dispute, including efforts to effect a voluntary settlement between parties.
Unless the parties agree otherwise, it shall be mandatory for the Voluntary Arbitrator or panel of
Voluntary Arbitrators to render an award or decision within twenty (20) calendar days from the date
of submission of the dispute to voluntary arbitration.
The award or decision of the Voluntary Arbitrator or panel of Voluntary Arbitrators shall contain the
facts and the law on which it is based. It shall be final and executory after ten (10) calendar days
from receipt of the copy of the award or decision by the parties.
It is true that Rule 43, Section 4 of the Rules of Court provides for a 15-day reglementary period for filing an
appeal:
Section 4. Period of appeal. — The appeal shall be taken within fifteen (15) days from notice of the
award, judgment, final order or resolution, or from the date of its last publication, if publication is
required by law for its effectivity, or of the denial of petitioner's motion for new trial or
reconsideration duly filed in accordance with the governing law of the court or agency a quo. Only
one (1) motion for reconsideration shall be allowed. Upon proper motion and the payment of the
full amount of the docket fee before the expiration of the reglementary period, the Court of
Appeals may grant an additional period of fifteen (15) days only within which to file the petition for
review. No further extension shall be granted except for the most compelling reason and in no
case to exceed fifteen (15) days. (Emphasis supplied)
Despite Rule 43 providing for a 15-day period to appeal, we rule that the Voluntary Arbitrator’s
decision must be appealed before the Court of Appeals within 10 calendar days from receipt of the
decision as provided in the Labor Code.
Appeal is a "statutory privilege," which may be exercised "only in the manner and in accordance with the provisions
of the law." "Perfection of an appeal within the reglementary period is not only mandatory but also jurisdictional so
that failure to do so rendered the decision final and executory, and deprives the appellate court of jurisdiction to
alter the final judgment much less to entertain the appeal."
We ruled that Article 262-A of the Labor Code allows the appeal of decisions rendered by Voluntary
Arbitrators. Statute provides that the Voluntary Arbitrator‘s decision "shall be final and executory after ten (10)
calendar days from receipt of the copy of the award or decision by the parties." Being provided in the statute, this
10-day period must be complied with; otherwise, no appellate court willhave jurisdiction over the appeal. This
absurd situation occurs when the decision is appealed on the 11th to 15th day from receipt as allowed under the
Rules, but which decision, under the law, has already become final and executory.
The rule, therefore, is that a Voluntary Arbitrator’s award or decision shall be appealed before the Court
of Appeals within 10 days from receipt of the award or decision. Should the aggrieved party choose to file
a motion for reconsideration with the Voluntary Arbitrator, the motion must be filed within the same 10-day period
since a motion for reconsideration is filed "within the period for taking an appeal."
A petition for certiorari is a special civil action "adopted to correct errors of jurisdiction committed by the lower
court or quasi-judicial agency, or when there is grave abuse of discretion on the part of such court or agency
amounting to lack or excess of jurisdiction." An extraordinary remedy, a petition for certiorari may be filed only if
appeal is not available. If appeal is available, an appeal must be taken even if the ground relied upon is grave
abuse of discretion.
As an exception to the rule, this court has allowed petitions for certiorari to be filed in lieu of an appeal "(a) when
the public welfare and the advancement of public policy dictate; (b) when the broader interests of justice so
require; (c) when the writs issued are null; and (d) when the questioned order amounts to an oppressive exercise
of judicial authority."
PHILEC filed its petition for certiorari before the Court of Appeals on August 29, 2000, which was 18 days after its
receipt of Voluntary Arbitrator Jimenez‘s resolution. The petition for certiorari was filed beyond the 10-day
reglementary period for filing an appeal. We cannot consider PHILEC‘s petition for certiorari as an appeal.
There being no appeal seasonably filed in this case, Voluntary Arbitrator Jimenez‘s decision became final and
executory after 10 calendar days from PHILEC‘s receipt of the resolution denying its motion for partial
reconsideration. Voluntary Arbitrator Jimenez‘s decision is already "beyond the purview of this Court to act upon."
Arbitrator Jimenez correctly awarded both Lipio and Ignacio, Sr. training allowances based on the amounts and
formula provided in the June 1, 1997 collective bargaining agreement.
The 6% legal interest under Circular No. 799, Series of 2013, of the Bangko Sentral ng Pilipinas Monetary Board
shall not apply, Voluntary Arbitrator Jimenez‘s decision having become final and executory prior to the effectivity of
the circular on July 1, 2013.1avvphi1 In Nacar v. Gallery Frames, we held that: . . . with regard to those
judgments that have become final and executory prior to July 1, 2013, said judgments shall not be
disturbed and shall continue to be implemented applying the rate of interest fixed therein.
WHEREFORE, the petition for review on certiorari is DENIED. Petitioner Philippine Electric Corporation is ORDERED
to PAY respondent Eleodoro V. Lipio a total of P3,549.00 for a four (4)-month training for the position of Foreman I
with legal interest of 12% per annum from August 22, 2000 until the amount's full satisfaction.
For respondent Emerlito C. Ignacio, Sr., Philippine Electric Corporation is ORDERED to PAY a total of P3,962.00 for
a four (4)-month training for the position of Foreman I with legal interest of 12% per annum from August 22, 2000
until the amount's full satisfaction.

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LABOR RELATIONS LAW 1

Finals Case Digests Compilation

JURISDICTION OF THE LABOR ARBITER

1. Tolosa vs. NLRC, G.R. No. 149578, April 10, 2003

2011 NLRC RULES OF PROCEDURE

RIGHTS OF LEGITIMATE LABOR ORGANIZATION

1. Rivera vs. Espiritu, G.R. No. 135547, January 23, 2002

UNFAIR LABOR PRACTICE

REVISED GUIDELINES OF THE NCMB FOR THE CONDUCT OF VOLUNTARY ARBITRATION

JURISDICTION OF THE LABOR ARBITER

TOLOSA VS. NLRC

AUSTRIA VS. NLRC

EVIOTA VS. COURT OF APPEALS

DYNAMIC SIGNMAKER OUTDOOR ADVERTISING SERVICES, INC., FILOMENO P.

METROMEDIA TIMES CORPORATION AND/OR ROBINA GOKONGWEI PE vs. JOHNNY PASTORIN

YUSEN AIR & SEA SERVICE PHILS. VS. VILLAMOR

DUTY FREE PHILIPPINES VS. ROSSANO MOJICA

EASYCALL COMMUNICATIONS PHILS. INC. VS. KING

LEYTE IV ELECTRIC COOPERATIVE, INC., vs LEYECO IV Employees Union- ALU

Garcia v. Eastern Telecommunications Phils., Inc.,

HALAGUEÑA vs. PHILIPPINE AIRLINES INCORPORATED,

Okol vs. Slimmer’s World International, et al,

Hugo et al., vs. Light Rail Transit Authority

Matling Industrial Corporation vs. Coros

The CA denied the petitioners‘ motion for reconsideration on April 2, 2003.

Manila Electric Co. et al., vs. Lim

PORTILLO VS. RODULF LIETZ

Art. 217. Jurisdiction of Labor Arbiters and the Commission

ACE NAVIGATION CO., INC. VS. FERNANDEZ

Cosare vs. Broadcom Asia, Inc.

Amecos Innovations, Inc. vs Lopez

INDOPHIL TEXTILE MILLS INC. VS. ENGR. ADVIENTO

Montero vs. Times Transportation

NLRC RULES OF PROCEDURE

ISLRIZ TRADING/LU VS. CAPADE

PANLILIO ET AL. VS. RTC BR. 51, CITY OF MANILA;

ANDO VS. CAMPO

PFIZER, INC. VS. VELASCO

SOCIAL SECURITY COMMISSION VS. RIZAL POULTRY ET AL.

DUP SOUND PHILS. VS. CA

SARONA VS. NLRC

SALENGA ET AL. VS. CA

LOCKHEED DETECTIVE & WATCHMAN AGENCY VS. UNIVERSITY OF THE PHILS.

3RD ALERT SECURITY AND DETECTIVE SERVICES, INC. VS. NAVIA

RADIO PHILIPPINES NETWORK, INC. VS. YAP

GONZALES VS. SOLID CEMENT CORP.

MARTOS VS. NEW SAN JOSE BUILDERS

Nacar vs. Gallery Frames

McBurnie vs. Ganzon et al.

LOON ET AL. VS. POWER MASTERS, INC.

LEPANTO CONSOLIDATED MINING CORP. VS. ICAO

CO SAY COCO PRODUCTS PHILS INC. vs BALTAZAR

c) If made purely on questions of law; and/or

thereof and immediately report any irregularity to the Commission.

OLORES VS MANILA DOCTORS COLLEGE

BERGONIO VS SOUTH EAST ASIAN AIRLINES

conditions prevailing prior to the dismissal.

has no option but to comply with it.

ARABIT VS JARDINE PACIFIC FINANCE INC.

"unjustified refusal" applies to.

Crisanto Castro Jr. Vs Ateneo de Naga University

PHILIPPINE TOURISTERS, INC. v. MAS TRANSIT WORKERS UNION-ANGLO-KMU

Azuelo vs. Zameco II Electric Cooperative, Inc.