PAL vs NLRC GR NO.

85985

FACTS: On March 15, 1985, the Philippine Airlines, Inc. (PAL)

completely revised its 1966 Code of Discipline. The Code was
circulated among the employees and was immediately
implemented without notice and prior discussion with the
Philippine Airlines Employees Association (PALEA) by the
Management. Some employees were subjected to the disciplinary
measures embodied therein.
On August 20, 1985, PALEA filed a complaint before the National
Labor Relations Commission (NLRC) for unfair labor practice.

ISSUE: Whether or not the formulation of a Code of Discipline

among employees is a shared responsibility of the employer and
the employees.

RULING: To achieve industrial peace, the employees must be

granted their just participation in the discussion of matters
affecting their rights. It is the policy of the State to promote the
enlightenment of workers concerning their rights and obligations
as employees. The New Code of Discipline containing disciplinary
measures cannot be implemented in the absence of full
cooperation of the employees as it affects their rights, duties and
welfare. Management cannot exclude labor in the deliberation and
adoption of rules and regulations that will affect them. Workers
have the right to participate in decision and policy making
process affecting their rights, duties and welfare.
Participation in Decision-Making Process –

A line must be drawn between management prerogatives

regarding business operations per se and those which affect the
rights of the employees. In treating the latter, management
should see to it that its employees are at least properly informed
of its decisions or modes of action. Indeed, industrial peace
cannot be achieved if the employees are denied their just
participation in the discussion of matters affecting their rights.
G.R. No. 85985 August 13, 1993
PHILIPPINE AIRLINES, INC. (PAL) vs. NATIONAL LABOR
RELATIONS COMMISSION, LABOR ARBITER ISABEL P.
ORTIGUERRA and PHILIPPINE AIRLINES EMPLOYEES
ASSOCIATION (PALEA)

FACTS:
On March 15, 1985, the Philippine Airlines, Inc. (PAL) completely
revised its 1966 Code of Discipline. The Code was circulated
among the employees and was immediately implemented, and
some employees were forthwith subjected to the disciplinary
measures embodied therein.

on August 20, 1985, the Philippine Airlines Employees Association

(PALEA) filed a complaint before the National Labor Relations
Commission (NLRC) for unfair labor practice with the following
remarks: “ULP with arbitrary implementation of PAL’s Code of
Discipline without notice and prior discussion with Union by
Management”. In its position paper, PALEA contended that PAL,
by its unilateral implementation of the Code, was guilty of unfair
labor practice, specifically Paragraphs E and G of Article 249 and
Article 253 of the Labor Code. PALEA alleged that copies of the
Code had been circulated in limited numbers; that being penal in
nature the Code must conform with the requirements of sufficient
publication, and that the Code was arbitrary, oppressive, and
prejudicial to the rights of the employees. It prayed that
implementation of the Code be held in abeyance; that PAL should
discuss the substance of the Code with PALEA; that employees
dismissed under the Code be reinstated and their cases subjected
to further hearing; and that PAL be declared guilty of unfair labor
practice and be ordered to pay damages.

PAL filed a motion to dismiss the complaint, asserting its

prerogative as an employer to prescibe rules and regulations
regarding employess’ conduct in carrying out their duties and
functions, and alleging that by implementing the Code, it had not
violated the collective bargaining agreement (CBA) or any
provision of the Labor Code. 

Labor Arbiter Isabel P. Ortiguerra handling the case called the

parties to a conference but they failed to appear at the scheduled
date. Interpreting such failure as a waiver of the parties’ right to
present evidence, the labor arbiter considered the case submitted
for decision. On November 7, 1986, a decision was rendered
finding no bad faith on the part of PAL in adopting the Code and
ruling that no unfair labor practice had been committed.
However, the arbiter held that PAL was “not totally fault free”
considering that while the issuance of rules and regulations
governing the conduct of employees is a “legitimate management
prerogative” such rules and regulations must meet the test of
“reasonableness, propriety and fairness.”

PAL appealed to the NLRC. On August 19, 1988, the NLRC

through Commissioner Encarnacion, with Presiding Commissioner
Bonto-Perez and Commissioner Maglaya concurring, found no
evidence of unfair labor practice committed by PAL and affirmed
the dismissal of PALEA’s charge. 
PAL then filed the instant petition for certiorari charging public
respondents with grave abuse of discretion

ISSUE:
whether management may be compelled to share with the union
or its employees its prerogative of formulating a code of
discipline.

HELD:
Indeed, it was only on March 2, 1989, with the approval of
Republic Act No. 6715, amending Article 211 of the Labor Code,
that the law explicitly considered it a State policy “(t)o ensure the
participation of workers in decision and policy-making processes
affecting the rights, duties and welfare.” However, even in the
absence of said clear provision of law, the exercise of
management prerogatives was never considered boundless.
San Miguel Brewery vs Ople: So long as a company’s
management prerogatives are exercised in good faith for the
advancement of the employer’s interest and not for the purpose
of defeating or circumventing the rights of the employees under
special laws or under valid agreements, this Court will uphold
them. 

UST vs NLRC: All this points to the conclusion that the exercise of
managerial prerogatives is not unlimited. It is circumscribed by
limitations found in law, a collective bargaining agreement, or the
general principles of fair play and justice.
a line must be drawn between management prerogatives
regarding business operations per se and those which affect the
rights of the employees. In treating the latter, management
should see to it that its employees are at least properly informed
of its decisions or modes action. PAL asserts that all its
employees have been furnished copies of the Code. Public
respondents found to the contrary, which finding, to say the least
is entitled to great respect.
the collective bargaining agreement may not be interpreted as
cession of employees’ rights to participate in the deliberation of
matters which may affect their rights and the formulation of
policies relative thereto. And one such mater is the formulation of
a code of discipline.
industrial peace cannot be achieved if the employees are denied
their just participation in the discussion of matters affecting their
rights. Thus, even before Article 211 of the labor Code (P.D. 442)
was amended by Republic Act No. 6715, it was already declared a
policy of the State, “(d) To promote the enlightenment of workers
concerning their rights and obligations . . . as employees.” This
was, of course, amplified by Republic Act No 6715 when it
decreed the “participation of workers in decision and policy
making processes affecting their rights, duties and welfare.” PAL’s
position that it cannot be saddled with the “obligation” of sharing
management prerogatives as during the formulation of the Code,
Republic Act No. 6715 had not yet been enacted (Petitioner’s
Memorandum, p. 44; Rollo, p. 212), cannot thus be sustained.
While such “obligation” was not yet founded in law when the Code
was formulated, the attainment of a harmonious labor-
management relationship and the then already existing state
policy of enlightening workers concerning their rights as
employees demand no less than the observance of transparency
in managerial moves affecting employees’ rights.

========================================
Halagueña, et al. vs PAL 
GR No. 172013  
October 2, 2009

Facts:
Petitioners were employed as flight attendants of respondent on
different dates prior to November 1996. They are members of
FASAP union exclusive bargaining organization of the
flightattendants, flight stewards and pursers. On July 2001,
respondent and FASAP entered into a CBA incorporating the
terms and conditions of their agreement for the years 2000 to
2005 (compulsory retirement of 55 for female and 60 for males).

In July 2003, petitioner and several female cabin crews, in a

letter, manifested that the provision in CBA on compulsory
retirement is discriminatory. On July 2004, petitioners filed a
Special Civil Action for Declaratory Relief with issuanceof TRO
with the RTC Makati. The RTC issued a TRO. After the denial of
the respondent on itsmotion for reconsideration for the TRO, it
filed a Petition with the CA. CA granted respondent’s petition and
ordered lower court to dismiss the case. Hence, this petition.

Issue:
Whether or not the regular courts has jurisdiction over the case.

Ruling:
Yes. The subject of litigation is incapable of pecuniary estimation,
exclusively cognizable by the RTC. Being an ordinary civil action,
the same is beyond the jurisdiction of labor tribunals.
Not every 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 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. 

Being an ordinary civil action, the same is beyond the jurisdiction

of labor tribunals.The said issue cannot be resolved solely by
applying the Labor Code. Rather, it requires the application of the
Constitution, labor statutes, law on contracts and the Convention
on the Elimination of All Forms of Discrimination Against Women,
and the power to apply and interpret the constitution and CEDAW
is within the jurisdiction of trial courts, a court of general
jurisdiction. In GeorgGrotjahn GMBH & Co. v. Isnani, this Court
held that not every dispute between an employer and employee
involves matters that only labor arbiters and the NLRC can
resolve in the exercise of their adjudicatory or quasi-judicial
powers. The jurisdiction of labor arbiters and the NLRC under
Article 217 of the Labor Code is limited to dispute 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.

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 as the
sole and exclusive 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 PAL-FASAP CBA.

Section 144, Part A of the PAL-FASAP CBA, provides that:

A. For the Cabin Attendants hired before 22 November              

1996:
            xxxx

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. x x x.
In a letter dated July 22, 2003, petitioners and several female
cabin crews manifested that the aforementioned CBA provision on
compulsory retirement is discriminatory, and demanded for an
equal treatment with their male counterparts. This demand was
reiterated in a letter by petitioners' counsel addressed to
respondent demanding the removal of gender discrimination
provisions in the coming re-negotiations of the PAL-FASAP CBA.

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, Branch 147

ISSUE:
Whether 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.
The said issue cannot be resolved solely by applying the Labor
Code. Rather, it requires the application of the Constitution, labor
statutes, law on contracts and the Convention on the Elimination
of All Forms of Discrimination Against Women, and the power to
apply and interpret the constitution and CEDAW is within the
jurisdiction of trial courts, a court of general jurisdiction. 

In Georg Grotjahn GMBH & Co. v. Isnani, this Court held that not
every dispute between an employer and employee involves
matters that only labor arbiters and the NLRC can resolve in the
exercise of their adjudicatory or quasi-judicial powers. 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.

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. In such
situations, resolution of the dispute requires expertise, not in
labor management relations or in wage structures and other
terms and conditions of employment, but rather in the application
of the general civil law. Clearly, such claims fall outside the area
of competence or expertise ordinarily ascribed to labor arbiters
and the NLRC and the rationale for granting jurisdiction over such
claims to these agencies disappears

=======================================

SMC vs Bersamira

Facts:
SanMig entered into contracts for merchandising services with
Lipercon and D'Rite, independent contractors duly licensed by
DOLE, to maintain its competitive position and in keeping with the
imperatives of efficiency, business expansion and diversity of its
operation. In said contracts, it was expressly understood and
agreed that the workers employed by the contractors were to be
paid by the latter and that none of them were to be deemed
employees or agents of SanMig. There was to be no employer-
employee relation between the contractors and/or its workers, on
the one hand, and SanMig on the other.

Petitioner San Miguel Corporation Employees Union-PTWGO is the

duly authorized representative of the monthly paid rank-and-file
employees of SanMig with whom the latter executed a CBA which
provides that "temporary, probationary, or contract employees
and workers are excluded from the bargaining unit and,
therefore, outside the scope of this Agreement."

The Union advised SanMig that some Lipercon and D'Rite workers
had signed up for union membership and sought the
regularization of their employment with SMC because some
employees have been continuously working for SanMig for a
period ranging from 6 months to 15 years and that their work is
neither casual nor seasonal as they are performing work or
activities necessary or desirable in the usual business or trade of
SanMig. Thus, it was contended that there exists a "labor-only"
contracting situation and wanted to be regularized.

The Union filed a notices of strike for unfair labor practice, CBA
violations, and union busting. The two (2) notices of strike were
consolidated and several conciliation conferences were held to
settle the dispute before the National Conciliation and Mediation
Board (NCMB) of DOLE.

Series of pickets were staged by Lipercon and D'Rite workers in

various SMC plants and offices.
SMC filed a verified Complaint for Injunction and Damages before
respondent Court to enjoin the Union from their acts. The Court
issued a Temporary Restraining Order and set the application for
Injunction for hearing. The Union filed a Motion to Dismiss which
was then opposed by SanMig. The Motion was denied by the
respondent Judge. The Court then issued the Order granting the
application and enjoining the union from the acts thereof. Court
issued the corresponding Writ of Preliminary Injunction after
SanMig had posted the required bond of P100,000.00 to answer
for whatever damages petitioners may sustain by reason thereof.
Petitioners then sought for the nullification of the Writ before the
SC while it also went to strike as some of the contractual workers
were laid off. NCMB called the parties for conciliation.

Issue:
Did the respondent Court correctly assumed jurisdiction over the
present controversy and properly issued the Writ of Preliminary
Injunction to the resolution of that question, is the matter of
whether, or not the case at bar involves, or is in connection with,
or relates to a labor dispute.

Held:
While it is SanMig's submission that no employer-employee
relationship exists between itself, on the one hand, and the
contractual workers of Lipercon and D'Rite on the other, a labor
dispute can
nevertheless exist "regardless of whether the disputants stand in
the proximate relationship of employer and employee” provided
the controversy concerns, among others, the terms and
conditions of employment or a "change" or "arrangement"
thereof. The existence of a labor dispute is not negative by the
fact that the plaintiffs and defendants do not stand in the
proximate relation of employer and employee.

FACTS:

Sometime in 1983 and 1984, SanMig entered into contracts for

merchandising services with Lipercon and D'Rite (independent
contractors duly licensed by the DOLE). In said contracts, it was
expressly understood and agreed that the workers employed by
the contractors were to be paid by the latter and that none of
them were to be deemed employees or agents of SanMig. There
was to be no employer-employee relation between the
contractors and/or its workers, on the one hand, and SanMig on
the other.

Petitioner San Miguel Corporation Employees Union-PTWGO (the

Union, for brevity) is the duly authorized representative of the
monthly paid rank-and-file employees of SanMig with whom the
latter executed a Collective Bargaining Agreement.
In a letter, dated 20 November 1988 (Annex C, Petition), the
Union advised SanMig that some Lipercon and D'Rite workers had
signed up for union membership and sought the regularization of
their employment with SMC.

On 12 January 1989 on the ground that it had failed to receive

any favorable response from SanMig, the Union filed a notice of
strike for unfair labor practice, CBA violations, and union busting

Beginning 14 February 1989 until 2 March 1989, series of pickets

were staged by Lipercon and D'Rite workers in various SMC
plants and offices.

On 6 March 1989, SMC filed a verified Complaint for Injunction

and Damages

ISSUE:
Whether, or not the case at bar involves, or is in connection with,
or relates to a labor dispute

HELD:

A "labor dispute" as defined in Article 212 (1) of the Labor Code

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 the disputants stand in the proximate relation of
employer and employee."
A labor dispute can nevertheless exist "regardless of whether the
disputants stand in the proximate relationship of employer and
employee"

That a labor dispute, as defined by the law, does exist herein is

evident. At bottom, what the Union seeks is to regularize the
status of the employees contracted by Lipercon and D'Rite in
effect, that they be absorbed into the working unit of SanMig.

This matter definitely dwells on the working relationship between

said employees vis-a-vis SanMig. Terms, tenure and conditions of
their employment and the arrangement of those terms are thus
involved bringing the matter within the purview of a labor
dispute. Further, the Union also seeks to represent those
workers, who have signed up for Union membership, for the
purpose of collective bargaining. SanMig, for its part, resists that
Union demand on the ground that there is no employer-employee
relationship between it and those workers and because the
demand violates the terms of their CBA.