the strained relations between the parties, separation pay was awarded in
163. Gold City Integrated Port Service, Inc (INPORT) vs. NLRC
GR No. 103560
july 6, 1995
Facts: Petitioner’s employees stopped working and gathered in a
mass action to express their grievances regarding wages, thirteenth month
pay and hazard pay. Said employees were all members of the Macajalar
Labor Union — Federation of Free Workers (MLU-FFW) with whom petitioner
had an existing collective bargaining agreement.
Petitioner was engaged in stevedoring and arrastre services at the
port of Cagayan de Oro. The strike paralyzed operations at said port.
The strikers filed individual notices of strike (“Kaugalingon nga
Declarasyon sa Pag-Welga”) with the then Ministry of Labor and
Employment.
With the failure of conciliation conferences between petitioner and
the strikers, INPORT filed a complaint before the Labor Arbiter for Illegal
Strike with prayer for a restraining order/preliminary injunction.
The National Labor Relations Commission issued a temporary
restraining order. Thereafter, majority of the strikers returned to work,
leaving herein private respondents who continued their protest.
For not having complied with the formal requirements in Article 264
of the Labor Code, 3 the strike staged by petitioner’s workers on April 30,
1985 was found by the Labor Arbiter to be illegal. 4 The workers who
participated in the illegal strike did not, however, lose their employment,
since there was no evidence that they participated in illegal acts. After noting
that petitioner accepted the other striking employees back to work, the Labor
Arbiter held that the private respondents should similarly be allowed to
return to work without having to undergo the required screening to be
undertaken by their union (MLU-FFW).
As regards the six private respondents who were union officers, the
Labor Arbiter ruled that they could not have possibly been “duped or tricked”
into signing the strike notice for they were active participants in the
conciliation meetings and were thus fully aware of what was going on.
Hence, said union officers should be accepted back to work after seeking
reconsideration from herein petitioner. 5
The NLRC affirmed with modification 8 the Arbiter’s decision. It held
that the concerted action by the workers was more of a “protest action” than
a strike. Private respondents, including the six union officers, should also be
allowed to work unconditionally to avoid discrimination. However, in view of
lieu of reinstatement.
Upon petitioner’s motion for reconsideration, public respondent
modified the above resolution.
The Commission ruled that since private respondents were not
actually terminated from service, there was no basis for reinstatement.
However, it awarded six months’ salary as separation pay or financial
assistance in the nature of “equitable relief.” The award for backwages was
also deleted for lack of factual and legal basis. In lieu of backwages,
compensation equivalent to P1,000.00 was given.
Issue: Whether separation pay and backwages be awarded by public
respondent NLRC to participants of an illegal strike?
Held: Reinstatement and backwages or, if no longer
feasible, separation pay, can only be granted if sufficient bases
exist under the law, particularly after a showing of illegal
dismissal. However, while the union members may thus be
entitled under the law to be reinstated or to receive separation
pay, their expulsion from the union in accordance with the
collective bargaining agreement renders the same impossible.
Ratio: A strike, considered as the most effective weapon of labor, 13
is defined as any temporary stoppage of work by the concerted action of
employees as a result of an industrial or labor dispute. 14 A labor dispute
includes any controversy or matter concerning terms or 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.
15
Private respondents and their co-workers stopped working and held
the mass action on April 30, 1985 to press for their wages and other
benefits. What transpired then was clearly a strike, for the cessation of work
by concerted action resulted from a labor dispute.
The complaint before the Labor Arbiter involved the legality of said
strike. The Arbiter correctly ruled that the strike was illegal for failure to
comply with the requirements of Article 264 (now Article 263) paragraphs (c)
and (f) of the Labor Code. 16
1
 The individual notices of strike filed by the workers did not conform
to the notice required by the law to be filed since they were represented by a
union (MLU-FFW) which even had an existing collective bargaining
agreement with INPORT.
Neither did the striking workers observe the strike vote by secret
ballot, cooling-off period and reporting requirements.
A 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 their employment
status. 20 An ordinary striking worker cannot be terminated for mere
participation in an illegal strike. There must be proof that he 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 the case at bench, INPORT accepted the majority of the striking
workers, including union officers, back to work. Private respondents were left
to continue with the strike after they refused to submit to the “screening”
required by the company.
Under Article 264 of the Labor Code, a worker merely
participating in an illegal strike may not be terminated from his
employment. It is only when he commits illegal acts during a
strike that he may be declared to have lost his employment
status. Since there appears no proof that these union members
committed illegal acts during the strike, they cannot be
dismissed. The striking union members among private
respondents are thus entitled to reinstatement, there being no
just cause for their dismissal.
However, considering that a decade has already lapsed from the
time the disputed strike occurred, we find that to award separation pay in
lieu of reinstatement would be more practical and appropriate.
No backwages will be awarded to private respondent-union members
as a penalty for their participation in the illegal strike. Their continued
participation in said strike, even after most of their co-workers had returned
to work, can hardly be rewarded by such an award.
The fate of private respondent-union officers is different.
Their insistence on unconditional reinstatement or separation
pay and backwages is unwarranted and unjustified. For
knowingly participating in an illegal strike, the law mandates
that a union officer may be terminated from employment. 34
Notwithstanding the fact that INPORT previously accepted other
union officers and that the screening required by it was uncalled for, still it
cannot be gainsaid that it possessed the right and prerogative to terminate
the union officers from service. The law, in using the word may, grants the
employer the option of declaring a union officer who participated in an illegal
strike as having lost his employment. 35
Moreover, an illegal strike which, more often than not, brings about
unnecessary economic disruption and chaos in the workplace should not be
countenanced by a relaxation of the sanctions prescribed by law.
The union officers are, therefore, not entitled to any relief.
Dispositive: WHEREFORE, from the foregoing premises, the petition
in G.R. No. 103560 (“Gold City Integrated Port Service Inc. v. National Labor
Relations Commission, et al.”) is GRANTED. One month salary for each year
of service until 1985 is awarded to private respondents who were not union
officers as separation pay. The petition in G.R. No. 103599 (“Adelo Ebuna, et
al. v. National Labor Relations Commission, et al.”) is DISMISSED for lack of
merit. No costs.
164. Lapanday vs NLRC
1995 Sept 07
Facts: Lapanday Agricultural and Development Corporation
(LADECO) and Cadeco Argo Development Phils Inc. are sister companies
engaged in the production of bananas. Their agricultural establishments are
located in Davao City. They agreed to a Collective Bargaining Agreement
(CBA) covering the period from December 5, 1985 to November 30, 1988
with Lapanday Workers’ Union (Union). Said union is the duly certified
bargaining agent of the rank and file employees and is affiliated with the
KMU-ANGLO.
Before the expiration of the CBA, the management policies were
initiated by the sister companies which changed the relationship of the
parties:
Sister companies contracted with Philippine Eagle Protectors and
Security Agency, Inc., to provide security services. But there was an
allegation that guards intimidated and harassed the union members.
2
 Seminars on Human Development and Industrial Relations (HDIR)
for their managerial and supervisory employees and the rank-and-file were
conducted which the Union claimed that the ANGLO (Alliance of Nationalist
and Genuine Labor Organization) was considered belonging to other
outlawed labor organizations such as the National Democratic Front or other
leftist groups.
A labor-management meeting was held on August 2, 1988 where
the labor group represented by its President Arquilao Bacolod, and its legal
counsel raised unfair labor practices such as coercion of employees,
intimidation of the union members and union busting. They agreed to allow
its members to attend the seminar for the rank-and-file employees. But, the
Union directed its members not to attend the seminars and picketed the
premises of the Philippine Eagle Protectors to show their displeasure on the
hiring of the guards.
The Union filed on August 25, 1988, a Notice of Strike with the
National Conciliation and Mediation Board (NCMB) accusing the company of
the same issues raised during the August 2, 1988 labor-management
meeting. A conciliation conference was called for where it was agreed that
union officers would attend the HDIR seminar deleting the discussion on
KMU-ANGLO and guidelines governing the guards would be established.
On September 8, 1988, Danilo Martinez, a member of the Board of
Directors of the Sister companies charged the Union with economic sabotage
through slowdown to which they filed charges against the Union and its
members for illegal strike, unfair labor practice and damages, with prayer for
injunction.
City Mayor Rodrigo Duterte intervened but the dialogues proved
fruitless as sister companies refused to withdraw the cases earlier filed with
the Union. Thereafter, a strike vote was conducted among the members of
the Union and those in favor of the strike won overwhelming support from
the workers. The result of the strike vote was then submitted to the NCMB
on October 10, 1988. Two days later, or on October 12, 1988, the Union
struck.
The gunman was later identified as Eledio Samson, an alleged
member of the new security forces of sister companies. This incident
resulted to:
most of the members of the Union refused to report for work
they did not comply with the “quota system” adopted by the
management to bolster production output
there were allegations that the Union instructed the workers to
reduce their production to thirty per cent (30%).
Tomas Basco and 25 other workers, filed a complaint for unfair labor
practice and illegal suspension against LADECO.
Another complaint for unfair labor practice and illegal dismissal was
filed by the Union, together with Arquilao Bacolod and 58 other
complainants. These cases were heard by Labor Arbiter Newton Sancho.
With the case filed by the sister companies, Labor Arbiter Antonio
Villanueva ruled that the Union staged an illegal strike and declared the
employees listed as respondents in the complaint to have lost their
employment status with Lapanday Agricultural and Development Corporation
and Cadeco Agro Development Philippines, Inc.; and ordered respondents
(petitioners in this case) to desist from further committing an illegal strike.
Petitioners appealed the Villanueva decision to public respondent
NLRC.
Before the NLRC could resolve the appeal on the Villanueva decision,
Labor Arbiter Sancho rendered a decision in the two (2) cases filed by the
Union against private respondents LADECO and CADECO declaring LADECO
and CADECO guilty of unfair labor practices and illegal dismissal and ordered
the reinstatement of the dismissed employees of private respondents, with
backwages and other benefits. It considered the refusal of the workers to
report for work on September 9, 1988, justified by the circumstance then
prevailing which is the killing of Danilo Martinez on September 8,1988.
NLRC upheld the decision of Labor Arbiter Villanueva. The Union filed
its MR but to no avail. Hence, this petition claiming that NLRC gravely abused
its discretion in: a) declaring that their activities, from September 9, 1988 to
October 12, 1988, were strike activities; and b) declaring that the strike
staged on October 12, 1988 was illegal.
ISSUE: Whether strike staged on October 12, 1988 illegal
3

HELD: Yes, as it was held within the seven (7) day waiting period provided
for by paragraph (f), Article 263 of the Labor Code, as amended. The haste
in holding the strike prevented the Department of Labor and Employment
from verifying whether it carried the approval of the majority of the union
members. Hence, there was no grave abuse of discretion committed.
RATIO: The applicable laws are Articles 263 and 264 of the Labor
Code, as amended by E.O. No. 111, dated December 24, 1986.
Paragraphs (c) and (f) of Article 263 of the Labor Code, as amended
by E.O. 111, provides:
the intended strike or lockout subject to the cooling-off period herein
provided.
Article 264 of the same Code reads:
Art. 264. Prohibited activities. — (a) No labor organization or
employer shall declare a strike or lockout without first having bargained
collectively in accordance with Title VII of this Book or without first having
filed the notice required in the preceding Article or without the necessary
strike or lockout vote first having been obtained and reported to the Ministry.
xxx xxx xxx

(c) In cases of bargaining deadlocks, the duly certified or recognized . . . . Any union officer who knowingly participates in an
bargaining agent may file anotice of strike or the employer may file, notice of illegal strike and any worker or union officer who knowingly
lockout with the Ministry at least 30 days before the intended date thereof.
In cases of unfair labor practice, the notice shall be 15 days and in the
participates in the commission of illegal acts during a strike may
absence of a duly certified or recognized bargaining agent, the notice of be declared to have lost his employment status: Provided that
strike may be filed by any legitimate labor organization in behalf of its mere participation of a worker in a lawful strike shall not
members. However, in case of dismissal from employment of union officers constitute sufficient ground for termination of his employment,
duly elected in accordance with the union constitution and by-laws, which even if a replacement had been hired by the employer during
may constitute union busting where the existence of the union is threatened,
the 15-daycooling-off period shall not apply and the union may take action
such lawful strike. (emphasis ours).
immediately.
DISPOSITIVE: The petition is dismissed for failure to show grave
abuse of discretion on the part of the public respondent. Costs against the
xxx xxx xxx
petitioners.
(f) A decision to declare a strike must be approved by a majority of
165. Ilaw at Buklod ng Manggagawa (IBM) v. NLRC, 198 S 586 (91)
the total union membership in the bargaining unit concerned, obtained by
secret ballot in meetings or referenda called for that purpose. A decision to
FACTS:
declare a lockout must be approved by a majority of the board of directors of
IBM representing 4500 employees of SMC working at various plants, offices
the corporation or association or of the partners in a partnership, obtained
and warehouses in NCR presented to the company a demand for correction
by secret ballot in a meeting called for that purpose. The decision shall be
of the significant distortion in the workers’ wages pursuant to the Wage
valid for the duration of the dispute based on substantially the same grounds
Rationalization Act.
considered when the strike or lockout vote was taken. The Ministry may, at
its own initiative or upon the request of any affected party, supervise the
Demand unheeded by company hence the union members refused to render
conduct of secret balloting. In every case, the union or the employer shall
overtime services until the distortion has been corrected by SMC.
furnish the Ministry the results of the votingat least seven (7) days before

4
It appears that the employees working hours/schedule has been freely
observed by the employees for the past 5 years and due to the
abandonment of the longstanding schedule of work and reversion to the
eight-hour shift substantial losses were incurred by SMC.
SMC filed a complaint with arbitration branch of NLRC then before the NLRC
for the latter to declare the strike illegal.
Union’s contention: workers’ refusal to work beyond 8 hours was a legitimate
means of compelling SMC to correct distortion.
SMC: The coordinated reduction by the Union’s members of the work time in
order to compel SMC to yield to the demand was an illegal and unprotected
activity.
ISSUE: W/N the strike was legal
HELD: ILLEGAL. The strike invoking the issue of wage distortion is
illegal. The legality of these activities depends on the legality of the purposes
sought to be attained. These joint or coordinated activities may be forbidden
or restricted by law or contract.
The legislative intent that solution of the problem of
wage distortions shall be sought by voluntary negotiation or
arbitration, and not by strikes, lockouts, or other concerted
activities of the employees or management, is made clear in the
rules implementing RA 6727 issued by the Secretary of Labor
and Employment pursuant to the authority granted by Section
13 of the Act. Section 16, Chapter I of these implementing
rules, after reiterating the policy that wage distortions be first
settled voluntarily by the parties and eventually by compulsory
arbitration, declares that, «Any issue involving wage distortion
shall not be a ground for a strike/lockout.»
Moreover, the collective bargaining agreement between the SMC and
the Union, relevant provisions of which are quoted by the former without the
latter’s demurring to the accuracy of the quotation, also prescribes a similar
eschewal of strikes or other similar or related concerted activities as a mode
of resolving disputes or controversies, generally, said agreement clearly
stating that settlement of «all disputes, disagreements or controversies of
any kind» should be achieved by the stipulated grievance procedure and
ultimately by arbitration.
166. Associated Labor Union vs. Judge Borromeo
G.R. No. L-26461 , November 27, 1968
FACTS:
Prior to the expiration of the collective bargaining contract between
ALU and SUGECO, negotiations had started for the renewal of said contract
and that during said negotiations, twelve (12) SUGECO employees resigned
from ALU, owing — according to charges preferred by ALU and confirmed by
a complaint filed by a CIR prosecutor — to unfair labor practices allegedly
committed by SUGECO and its supervisors who, it was also claimed, had
induced and coerced said employees to quit the ALU, which they did.
Thereupon, SUGECO stopped negotiating with ALU alleging that, with the
resignation of said twelve (12) members, ALU no longer represented a
majority of the SUGECO employees. Consequently, ALU declared a strike and
picketed the SUGECO plant in Mandaue. Then, SUGECO filed a case in the
CFI of Cebu, which forthwith issued a writ of preliminary injunction ALU
maintains that the lower Court has no jurisdiction over the because it had
grown out of a labor dispute, is intimately connected with an unfair labor
practice case pending before the CIR. Upon the other hand, respondents
argue that the issue in the lower court does not fall within the jurisdiction of
the CIR, there being no employer-employee relationship and “no labor
dispute” between the ALU members and Cebu Home, also owned by the
owners of SUGECO.
ISSUE:
Whether or not CIR has the jurisdiction over a case wherein there is
no employer-employee relationship between the parties.
HELD:
5
 Yes, CIR has the jurisdiction over the case even if there is the
Section 5(a)
absence of employer-employee relationship. To begin with,
of Republic Act No. 875 vests in the Court of Industrial Relations
exclusive jurisdiction over the prevention of any unfair labor
practice. Moreover, for an issue “concerning terms, tenure or
conditions of employment, or concerning the association or
representation of persons in negotiating, fixing, maintaining,
changing, or seeking to arrange terms or conditions of
employment” to partake of the nature of a “labor dispute”, it is
not necessary that “the disputants stand in the proximate
relation of employer and employee.”
Then, again, in order to apply the provisions of Sec. 9 of Republic
Act No. 875, governing the conditions under which “any restraining order” or
“temporary or permanent injunction” may issue in any “case involving or
growing out of a labor dispute,” it is not indispensable that the persons
involved in the case be “employees of the same employer,” although this is
the usual case. Sec. 9, likewise, governs cases involving persons:
1) “who are engaged in the same industry, trade, craft, or
occupation”; or
2) “who . have direct or indirect interests therein;” or
3) “who are members of the same or an affiliated organization of
employers or employees”; or
4) “when the case involves any conflicting or competing interests in
a `labor dispute’ (as hereinbefore defined) or `persons participating or
interested’ therein (as hereinafter defined).” Furthermore, “a person or
association shall be held to be a person participating or interested in a labor
dispute if relief is sought against him or it” and “he or it is engaged in the
same industry, trade, craft, or occupation in which such dispute occurs, or
has a direct or indirect interest therein, or is a member, officer, or agent of
any association composed in whole or in part of employees or employers
engaged in such industry, trade, craft, or occupation.”
167. U.S. Supreme Court
Food Employees v. Logan Valley Plaza, Inc., 391 U.S. 308 (1968)
Amalgamated Food Employees Union Local 590 v. Logan Valley
Plaza, Inc.
Decided May 20, 1968
Syllabus
Respondent Weis Markets owns and operates a supermarket in a
large shopping center complex owned by respondent Logan Valley Plaza. In
front of Weis' building is a covered porch and a parcel pickup zone. Members
of petitioner union picketed Weis' store, confining the picketing almost
entirely to the parcel pickup zone and the portion of the parking area
adjacent thereto. The picketing was peaceful, with some sporadic and
infrequent congestion of the parcel pickup area. A Pennsylvania Court of
Common Pleas enjoined "picketing and trespassing upon . . . the [Weis]
storeroom, porch and parcel pick-up area . . . [and] the [Logan] parking
area," thus preventing picketing inside the shopping center. That court held
the injunction justified in order to protect respondents' property rights and
because the picketing was unlawfully aimed at coercing Weis to compel its
employees to join a union. The Pennsylvania Supreme Court affirmed the
issuance of the injunction on the sole ground that petitioners' conduct
constituted a trespass on respondents' property.
Held:
1. Peaceful picketing carried on in a location open generally to the
public is, absent other factors involving the purpose or the manner of the
picketing, protected by the First Amendment. Pp. 391 U. S. 313-315.
2. Although there may be regulation of the manner in which
handbilling, or picketing, is carried out, that does not mean that either can
be barred under all circumstances on publicly owned property simply by
recourse to traditional concepts of property law concerning the incidents of
ownership of real property. Pp. 391 U. S. 315-316.
3. Since the shopping center serves as the community business block
"and is freely accessible and open to the people in the area and those
passing through," Marsh v. Alabama, 326 U. S. 501, 326 U. S. 508, the State
may not delegate the power, through the use of trespass laws, wholly to
exclude those members of the public wishing to exercise their First
Amendment rights on the premises in a manner
6
Page 391 U. S. 309
and for a purpose generally consonant with the use to which the
property is actually put. Pp. 391 U. S. 316-325.
425 Pa. 382, 227 A.2d 874, reversed and remanded.
MR. JUSTICE MARSHALL delivered the opinion of the Court.
This case presents the question whether peaceful picketing of a business
enterprise located within a shopping center can be enjoined on the ground
that it constitutes an unconsented invasion of the property rights of the
owners of the land on which the center is situated. We granted certiorari to
consider petitioners' contentions that the decisions of the state courts
enjoining their picketing as a trespass are violative of their rights under the
First and Fourteenth Amendments of the United States Constitution. 389 U.S.
911 (1967). [Footnote 1] We reverse.
168. ELIZABETH C. BASCON and NOEMI V. COLE, vs. COURT OF
APPEALS,
METRO CEBU COMMUNITY HOSPITAL, INC., and GREGORIO IYOY
G.R. No. 144899 February 5, 2004
Facts: The petitioners were employees of private respondent Hospital and
members of the NAMA-MCCH, a labor union of MCCH employees. The instant
controversy arose from an intra-union conflict between the NAMA-MCCH and
the National Labor Federation (NFL), the mother federation of NAMA-MCCH.
NAMA-MCCH asked MCCH to renew their Collective Bargaining Agreement
(CBA). NFL, however, opposed this move by its local afliate. Mindful of the
apparent intra-union dispute, MCCH decided to defer the CBA negotiations
until there was a determination as to which of said unions had the right to
negotiate a new CBA. Believing that their union was the certifed collective
bargaining agent, the members and officers of NAMAMCCH staged a series
of mass actions inside MCCH’s premises. The DOLE issued certifications
stating that NAMA-MCCH was not a registered labor organization. This
fnding, however, did not deter NAMA-MCCH from fling a notice of strike. Said
notice was, however, disregarded by the NCMB for want of legal personality
of the union. The MCCH management received reports that petitioners
participated in NAMA-MCCH’s mass actions. Consequently, notices were
served on all union members, petitioners included, asking them to explain in
writing why they were wearing red and black ribbons and roaming around
the hospital with placards. Petitioner was dismissed from employment
because of her participation in the mass action. Bascon and Cole filed a
complaint for illegal dismissal. They denied having participated in said mass
actions or having received the notices (1) enjoining them from wearing
armbands and putting up placards, with warning that disciplinary measure
would be imposed, and (2) informing them of the schedule of hearing. They
admit, however, to wearing armbands for union identity while nursing
patients as per instruction of their union leaders. The Labor Arbiter found the
termination complained to be valid and legal, and dismissed the complaint.
The Labor Arbiter held that petitioners were justly dismissed because they
actually participated in the illegal mass action. It also concluded that
petitioners received the notices of hearing, but deliberately refused to attend
the scheduled investigation. On appeal, the NLRC reversed the ruling of the
Labor Arbiter. But the CA reversed the ruling of the NLRC.
Issue: Whether or not petitioners were validly terminated for (1) allegedly
participating in an illegal strike.
Held: The Supreme Court said that petitioner was not validly terminated.
While a union officer can be terminated for mere participation in
an illegal strike, an ordinary striking employee, like petitioners
herein, must have participated in the commission of illegal acts
during the strike. There must be proof that they committed
illegal acts during the strike. But proof beyond reasonable doubt
is not required. Substantial evidence, which may justify the
imposition of the penalty of dismissal, may suffice. In case at bar,
the Court of Appeals found that petitioners’ actual participation in the illegal
strike was limited to wearing armbands and putting up placards. There was
no fnding that the armbands or the placards contained ofensive words or
symbols. Thus, neither such wearing of armbands nor said putting up of
placards can be construed as an illegal act. In fact, per se, they are within
the mantle of constitutional protection under freedom of speech. Evidence on
record shows that various illegal acts were committed by unidentifed union
members in the course of the protracted mass action. But it cannot hold
petitioners responsible for acts they did not commit. The law, obviously
solicitous of the welfare of the common worker, requires, before termination
7
may be considered, that an ordinary union member must have knowingly
participated in the commission of illegal acts during a strike.
169. Liwayway vs. Permanent Concrete Workers Union
Plaintiff made repeated demands to the defendants not to intimidate and
threaten its employees with bodily harm and not to blockade, picket or
prohibit plaintiff's truck from getting newsprint in their bodega. $efendants
refused and continued to refuse to give in to the demands of the plaintiffs
which Liwayway rented another bodega and incurred e(penses both in terms
of bodega rentals and in transporting newsprint from pier to the temporary
bodega.
ISSUE*
May a picket be enjoined at the instance of a third party)
HELD*
The business of the appellee is ezclusively the publication of the magazines
+annawag, +isaya, Hiligaynon and Liwayway weekly magazines which has
absolutely no relation or connection whatsoever with the cause of the strike
of the union against their company, much less with the terms, conditions or
demands of the strikers. The appellee is a third party or an innocent by-
stander whose right has been invaded and, therefore, entitled to
protection by the regular courts.
-The right to picket as a means of communicating the facts of a
labor dispute is a phase of the freedom of speech guaranteed
by the constitution. If peacefully carried out, it cannot be
curtailed even in the absence of employer-employee
relationship. The right is, however, not an absolute one. W hile
peaceful picketing is entitled to protection as an exercise of free
speech, we believe that courts are not without power to confine
or localize the sphere of communication or the demonstration to
the parties to the labor dispute, including those with related
interest, and to insulate establishments or persons with no
industrial connection or having interest totally foreign to the
conte(t of the dispute. Thus, the right may be regulated at the
instance of third parties or innocent bystanders' if it appears
that the inevitable result of its exercise is to create an
impression that a labor dispute with which they have no
connection or interest exists between them and the picketing
union or constitute an invasion of their rights. In one case decided
by this Court, we upheld a trial court's injunction prohibiting the union from
blocking the entrance to a feed mill located within the compound of a flour
mill with which the union had a dispute. Although sustained on a different
ground, no connection was found other than their being situated in the same
premises. It is to be noted that in the instances cited, peaceful picketing has
not been totally banned but merely regulated. And in one American case, a
picket by a labor union in front of a motion picture theater with which the
union had a labor dispute was enjoined by the court from being e(tended in
front of the main entrance of the building housing the theater wherein other
stores operated by third persons were located.
-0n appeal, the 1upreme Court in upholding the jurisdiction of the lower
court to issue the writ of preliminary injunction, ruled that2 3a4 there is no
connection between the appellee, the appellant union and the Permanent
Concrete Products, Inc. and the fact, that the latter and appellee are situated
in the same premises, can hardly be considered as interwoven with the labor
dispute pending with the Court of Industrial Relations5 and 3b4 the acts of
the striking union are mere acts of trespass for which the lessee shall have a
direct action against the trespasser.
170. MSF Tire and Rubber vs CA
OCTOBER 23, 2012 ~ VBDIAZ
MSF Tire and Rubber vs CA
GR 128632
Facts:
Respondent Union filed a notice of strike in the NCMB charging (Phildtread)
with unfair labor practice. Thereafter, they picketed and assembled outside
the gate of Philtread’s plant. Philtread, on the other hand, filed a notice of
8
lockout. Subsequently, the Secretary of Labor assumed jurisdiction over the
labor dispute and certified it for compulsory arbitration.
During the pendency of the labor dispute, Philtread entered into a
Memorandum of Agreement with Siam Tyre whereby its plant and equipment
would be sold to a new company, herein petitioner, 80% of which would be
owned by Siam Tyre and 20% by Philtread, while the land on which the plant
was located would be sold to another company, 60% of which would be
owned by Philtread and 40% by Siam Tyre.
Petitioner then asked respondent Union to desist from picketing outside its
plant. As the respondent Union refused petitioner’s request, petitioner filed a
complaint for injunction with damages before the RTC. Respondent Union
moved to dismiss the complaint alleging lack of jurisdiction on the part of the
trial court.
Petitioner asserts that its status as an “innocent bystander” with respect to
the labor dispute between Philtread and the Union entitles it to a writ of
injunction from the civil courts.
Issue: WON petitioner has shown a clear legal right to the issuance of a writ
of injunction under the “innocent bystander” rule.
Held:
In Philippine Association of Free Labor Unions (PAFLU) v.
Cloribel, this Court, through Justice J.B.L. Reyes, stated the
“innocent bystander” rule as follows:
The right to picket as a means of communicating the facts of a
labor dispute is a phase of the freedom of speech guaranteed
by the constitution. If peacefully carried out, it cannot be
curtailed even in the absence of employer-employee
relationship.
The right is, however, not an absolute one. While peaceful picketing is
entitled to protection as an exercise of free speech, we believe the courts are
not without power to confine or localize the sphere of communication or the
demonstration to the parties to the labor dispute, including those
with related interest, and to insulate establishments or persons with no
industrial connection or having interest totally foreign to the context of the
dispute. Thus the right may be regulated at the instance of third parties or
“innocent bystanders” if it appears that the inevitable result of its
exercise is to create an impression that a labor dispute with which they have
no connection or interest exists between them and the picketing union or
constitute an invasion of their rights.
Thus, an “innocent bystander,” who seeks to enjoin a labor
strike, must satisfy the court it is entirely different from, without
any connection whatsoever to, either party to the dispute and,
therefore, its interests are totally foreign to the context thereof.
In the case at bar, petitioner cannot be said not to have such connection to
the dispute. We find that the “negotiation, contract of sale, and the post
transaction” between Philtread, as vendor, and Siam Tyre, as vendee,
reveals a legal relation between them which, in the interest of petitioner, we
cannot ignore. To be sure, the transaction between Philtread and Siam Tyre,
was not a simple sale whereby Philtread ceased to have any proprietary
rights over its sold assets. On the contrary, Philtread remains as 20% owner
of private respondent and 60% owner of Sucat Land Corporation which was
likewise incorporated in accordance with the terms of the Memorandum of
Agreement with Siam Tyre, and which now owns the land were subject plant
is located. This, together with the fact that private respondent uses the same
plant or factory; similar or substantially the same working conditions; same
machinery, tools, and equipment; and
manufacture the same products as Philtread, lead us to safely conclude that
private respondent’s personality is so closely linked to Philtread as to bar its
entitlement to an injunctive writ.
Petition denied.
171. COMPLEX ELECTRONICS CORP vs. NLRC, COMPLEX
ELECTRONICS EMPLOYEES ASSOCIATION (CEEA), represented by
Union President, TALAVERA
9
 regulations or state laws, but the term is also used to describe a
G.R. No. 122136 July 19, 1999 plant removed to a new location in order to discriminate against
FACTS: Due to losses on production of the petitioner, it was constrained to
employees at the old plant because of their union activities. It is
cease operations. In the evening of April 6, 1992, the machinery, equipment one wherein the employer moves its business to another
and materials being used for production at Complex were pulled-out from location or it temporarily closes its business for anti-union
the company premises and transferred to the premises of Ionics Circuit, Inc. purposes. A “runaway shop” in this sense, is a relocation
(Ionics) at Cabuyao, Laguna. The following day, a total closure of company motivated by anti-union animus rather than for business
operation was effected at Complex.
reasons.
A complaint was, thereafter, filed with the Labor Arbitration Branch of the
In this case, however, Ionics was not set up merely for the purpose of
NLRC for unfair labor practice, illegal closure/illegal lockout, money claims for
transferring the business of Complex. At the time the labor dispute arose at
vacation leave, sick leave, unpaid wages, 13th month pay, damages and
Complex, Ionics was already existing as an independent company. As earlier
attorney’s fees. The Union alleged that the pull-out of the machinery,
mentioned, it has been in existence since July 5, 1984 (8 years prior to the
equipment and materials from the company premises, which resulted to the
dispute). It cannot, therefore, be said that the temporary closure in Complex
sudden closure of the company was in violation of Section 3 and 8, Rule XIII,
and its subsequent transfer of business to Ionics was for anti-union
Book V of the Labor Code of the Philippines and the existing CBA. Ionics was
purposes. The Union failed to show that the primary reason for the closure
impleaded as a party defendant because the officers and management
of the establishment was due to the union activities of the employees.
personnel of Complex were also holding office at Ionics with Lawrence Qua
as the President of both companies.
The mere fact that one or more corporations are owned or controlled by the
same or single stockholder is not a sufficient ground for disregarding
The Union anchors its position on the fact that Lawrence Qua is both the
separate corporate personalities. Mere ownership by a single stockholder or
president of Complex and Ionics and that both companies have the same set
by another corporation of all or nearly all of the capital stock of a corporation
of Board of Directors. It claims that business has not ceased at Complex but
is not of itself sufficient ground for disregarding the separate corporate
was merely transferred to Ionics, a runaway shop. To prove that Ionics was
personality.
just a runaway shop, petitioner asserts that out of the 80,000 shares
comprising the increased capital stock of Ionics, it was Complex that owns
At first glance after reading the decision a quo, it would seem that the
majority of said shares with P1,200,000.00 as its capital subscription and
closure of respondent’s operation is not justified. However, a deeper
P448,000.00 as its paid up investment, compared to P800,000.00
examination of the records along with the evidence, would show that the
subscription andP324,560.00 paid-up owing to the other stockholders,
closure, although it was done abruptly as there was no compliance with the
combined. Thus, according to the Union, there is a clear ground to pierce
30-day prior notice requirement, said closure was not intended to circumvent
the veil of corporate fiction.
the provisions of the Labor Code on termination of employment. The closure
of operation by Complex on April 7, 1992 was not without valid reasons.
ISSSUE: WON Ionics is merely a runaway shop
Customers of respondent alarmed by the pending labor dispute and the
imminent strike to be foisted by the union, as shown by their strike vote,
HELD: NO
directed respondent Complex to pull-out its equipment, machinery and
materials to other safe bonded warehouse. Respondent being mere
A “runaway shop” is defined as an industrial plant moved by its consignees of the equipment, machinery and materials were without any
owners from one location to another to escape union labor
10
recourse but to oblige the customers’ directive. The pull-out was effected on
April 6, 1992. We can see here that Complex’s action, standing alone, will
not result in illegal closure that would cause the illegal dismissal of the
complainant workers. Hence, the Labor Arbiter’s conclusion that since there
were only 2 of respondent’s customers who have expressed pull-out of
business from respondent Complex while most of the customer’s have not
and, therefore, it is not justified to close operation cannot be upheld. The
determination to cease operation is a prerogative of management that is
usually not interfered with by the State as no employer can be required to
continue operating at a loss simply to maintain the workers in employment.
That would be taking of property without due process of law which the
employer has the right to resist.
172. Panay Electric Co. Inc v. NLRC October 4, 1995 Vitug, J.
Petitioner: PANAY ELECTRIC COMPANY, INC. (COMPANY)
Respondents: NATIONAL LABOR RELATIONS COMMISSION,
FOURTH DIVISION AND PANAY ELECTRIC COMPANY EMPLOYEES
AND WORKERS ASSOCIATION (UNION)
Facts: Panay Electric posted in its premises a notice announcing the need
for a Report Clerk who could assume the responsibility of gathering
accounting and computer data at its power plant. The position was open to
any employee, with Pay Class V, of the company.
When nobody applied for the position, the EDP/Personnel Manager
recommended Enrique Huyan who was at the time an Administrative
Personnel Assistant at the head office. Huyan was then also a Vice President
of respondent union. The recommendation was approved by the company's
President and General Manager.
Enrique Huyan informed petitioner that he was not interested in
accepting the new position.
He gave the following reasons:
o a. The manner or procedure of implementing this notice of transfer is
skeptical since from Administrative Personnel Assistant to Report Clerk is
apparently a demotion in my part.
o b. The position of Report Clerk is Pay Class III per our Organizational
Chart. o c. Being the Vice-President of PECEWA, my transfer would certainly
hinder my function in settling labor matters and other problems with other
PECEWA Officers. o d. Currently, the activation of geothermal power plant in
Palimpinon, Negros had gave rise to additional displaced workers in which
my transfer would be another onus to the Power Plant supervisor and my
lack of technical knowhow, I presumed would obstruct the flow of operation
in the said department. 1
The EDP/Personnel Manager required Huyan to explain within 48
hours why no disciplinary action should be taken against him for gross
insubordination and for failure to follow the General Manager's approved
directive.  Huyan was given a "notice of dismissal" for:
1. Failure to comply with the GM's general directive of 11/9/90 to a new
assigned task in the Power Plant;
2. Failure to comply with your direct superior's (AO) verbal directive to
proceed to the Power Plant 11/10/90 & 11/19/90;
3 Failure to comply with the undersigned's, as personnel manager, verbal
directive to proceed to the Power Plant last 11/16/90;
4. Continued & unauthorized entry & use of the Personnel Section & property
from 11/16/90 up to the present; (and)
o 5. Failure to report to your assigned task in the Power Plant for a period of
more than seven consecutive days from November 16, 1990 up to the
present.
2  An administrative investigation was conducted; thereafter, Huyan was
ordered dismissed.
The Union filed a notice of strike. A strike vote was taken where 113
out of 149 union members voted; the result showed 108 "yes" votes, 1 "no"
vote, and 4 abstentions. The union went on strike.
The company filed a petition to declare the strike illegal. Upon
receipt of an order from the Secretary of Labor and Employment certifying
the dispute to the NLRC, the union lifted its strike and, on the day following,
the striking employees, including Huyan, reported for work.
UNION: o The real reason for ordering the transfer of Huyan was to
penalize him for his union activities, particularly for being the suspected
"Mao," author of the column "Red Corner," in the Union's New Digest which
featured an item on alleged wrongdoings by top company officials at the
power plant; o An investigation of "Mao's" real identity be conducted and,
once ascertained, to have him dismissed from the company; o The company
had singled out Huyan for transfer to the power plant; o The Personnel
Manager's recommendation for such transfer was made without Huyan's
prior knowledge; o Upon learning of his impending reassignment, Huyan
requested for a reconsideration but the Personnel Manager did not bother to
reply, that o The transfer of Huyan was a demotion; and o Per the
Company's Code Offenses, the "insubordination" charged was punishable
11
with dismissal only after a fourth commission of the offense.  COMPANY: o
Huyan's inexplicable refusal to assume his new position was an act of
insubordination for which reason he was aptly dismissed; o The company's
directive was a valid exercise of management prerogative; o In declaring a
strike, the Union, including its officers and members, committed a serious
breach of the "no strike, no lock out clause," of the Collective Bargaining
Agreement ("CBA"); and that during the strike, illegal acts were committed
by the union officers and members, e.g., —  a) . . . union director Rey
Espinal blocked the service vehicle of PECO collectors Domingo Tabobo and
James Russel Balin, hurled invectives at them and challenged them to fight
 b) . . . union (vice-president) Prescilla Napiar, together with union
member Ma. Teresa Cruz approached PECO messenger Douglas Legada . . .
and snatched from him the envelope containing . . . passbooks.  c) when
PECO employees Carlos Miguel Borja and Joemar Paloma were on their way
to deliver bank passbook to PECO messengers riding in the car of Willy
Hallares, union (vice-president) Prescilla Napiar blocked their way at the gate
and demanded that the car be inspected for PECO bills. An unidentified union
member placed a big stone against the right front tire. Union auditor, Allen
Aquino insisted on inspecting the glove compartment of the car.  The
NLRC declared the strike as illegal.  Panay Electric filed this petition for
certiorari seeking to set aside the resolution of the NLRC in granting
separation benefits to Huyan and Napiar, in awarding moral and exemplary
damages to Huyan, and in merely sanctioning the suspension, instead of
terminating the employment status, of other officers and members of
respondent labor union.
Issue: WON the strike conducted by the Union is illegal
Held: YES. A "no strike, no lock-out" provision in the CBA is a
valid stipulation although the clause may be invoked by an
employer only 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 itself.
It would be inapplicable to prevent a strike which is grounded
on unfair labor practice as long as the Union believed in good
faith that an act of ULP has been committed.
Ratio:  The State guarantees the right of all workers to self-organization,
collective bargaining and negotiations, as well as peaceful concerted
The right to
activities, including the right to strike, in accordance with law.
strike, however, is not absolute. It has been held that a "no
strike, no lock-out" provision in the CBA is a valid stipulation
although the clause may be invoked by an employer only 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 itself. It would be inapplicable to
prevent a strike which is grounded on unfair labor practice. o In this
situation, it is not essential that the unfair labor practice act has, in fact,
been committed; it suffices that the striking workers are shown to have
acted honestly on an impression that the company has committed such
unfair labor practice and the surrounding circumstances could warrant such a
belief in good faith.  The NLRC found Huyan and Napiar, the "principal
leaders" of the strike, not to have acted in good faith. Findings of fact of the
NLRC, except when there is a grave abuse of discretion committed by it, are
practically conclusive on the Court o It is bad enough that the Union struck
despite the prohibition in the CBA. What is worse is that its principal leaders,
Napiar and Huyan, cannot honestly claim that they were in good faith in their
belief that the Company was committing unfair labor practice. o The absence
of good faith or the honest belief that the Company is committing Unfair
Labor Practice, therefore, is what inclined the NLRC to rule that the strike
conducted by the Union is illegal for being in violation of the "no strike, no
lockout" proviso and the failure to bring the union's grievances under the
grievance procedure in the CBA. o It must be borne in mind that prior to the
dismissal of Huyan, there was sufficient time to have the matter of Huyan's
transfer subjected to the grievance procedure. That the Union considered the
procedure an exercise in futility is not reason enough to disregard the same
given the circumstances in this case. Whatever wrong the Union felt the
Company committed cannot be remedied by another wrong on the part of
the Union.  The NLRC's grant of separation benefits and damages to
Huyan and Napiar would indeed appear to be unwarranted. Article 264, Title
VIII, Book V, of the Labor Code provides that "(a)ny 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." o In the case of the other
union officers, however, the NLRC, having found no sufficient proof to hold
12
them guilty of "bad faith" in taking part in the strike or of perpetrating
"serious disorders" during the concerted activity, merely decreed suspension.
There is no grave abuse of discretion by the NLRC in not ordering the
dismissal of said officers.  In the case of Huyan, the Court sustains the
NLRC in holding that he, during the period of his illegal suspension should be
entitled to back salaries and benefits plus moral damages, but in the reduced
amount of P10,000.00, in view of the findings of the NLRC, that the company
acted arbitrarily in its decision to transfer Huyan.
173. National Federation of Sugar Workers (NFSW) vs Ovejera
G.R. No. L-59743 - May 31, 1982 Plana, J.
FACTS: NFSW has been the bargaining agent of CAC rank and file employees
(about 1200 of more than 2000 personnel) and has concluded with Central
Azucarera de la Carlota (CAC) a collective bargaining agreement effective
February 16, 1981 — February 15, 1984. Under Art. VII, Sec. 5 of the said
CBA provides for: “Bonuses — The parties also agree to maintain the present
practice on the grant of Christmas bonus, milling bonus, and amelioration
bonus to the extent as the latter is required by law.” NFSW struck against
private respondent CAC to compel the latter for the payment of the 13th
month pay under PD 851 (13th Month Pay Law) in addition to the Christmas,
milling and amelioration bonuses being enjoyed by CAC workers which
amount to 1-½ months’ salary. Labor Arbiter Ovejera declared the strike as
illegal and no pronouncement was made as to the demand on the 13th
month pay. This caused petitioner to file an instant petition with SC.
ISSUE: W/N under PD 851, an employer is obliged to give its workers a 13th
month salary in addition to Christmas, milling and amelioration bonuses, the
aggregate of which exceeds the 13th month pay.
RULING: No. Keenly sensitive to the needs of the workingmen,
yet mindful of the mounting production cost that are the woe of
capital which provides employment to labor, President
Ferdinand E. Marcos issued Presidential Decree No. 851 on 16
December 1975. Thereunder, "all employers are hereby required to pay
salary of not more than all their employees receiving a basic P1,000 a
month, regardless of the nature of their employment, a 13th month pay not
later than December 24 of every year." Exempted from the obligation
however are: Employers already paying their employees a 13th month pay or
The evident intention of the law, as
its equivalent ... (Section 2.)
revealed by the law itself, was to grant an additional income in
the form of a 13th month pay to employees not already
receiving the same. Otherwise put, the intention was to grant some relief
— not to all workers — but only to the unfortunate ones not actually paid a
13th month salary or what amounts to it, by whatever name called; but it
was not envisioned that a double burden would be imposed on the employer
already paying his employees a 13th month pay or its equivalent — whether
out of pure generosity or on the basis of a binding agreement and, in the
latter ease, regardless of the conditional character of the grant (such as
making the payment dependent on profit), so long as there is actual
payment. Otherwise, what was conceived to be a 13th month salary would in
effect become a 14th or possibly 15th month pay.
174. G.R. No. 117169 PhilTread Workers Union, et al. v. Confesor, et
al. March 12, 1997
Facts:
Petitioner PTWU filed a notice of strike on grounds of unfair labor practice,
more specifically union busting and violation of CBA. On the other hand,
private respondent Philtread Tire and Rubber Corporation filed a notice of
lockout. It also filed a petition to declare illegal the work slowdowns staged
by the petitioner Union. Both cases were then consolidated. Several
conciliation meetings were conducted but the parties failed to settle their
dispute.
At some time, the National Labor Relations Commission declared the
slowdowns illegal. Thereafter, private respondent corporation requested the
Secretary of Labor to assume jurisdiction over the labor dispute. Secretary
Confesor then issued an order, which, among other things, certified the
dispute for compulsory arbitration. Petitioners filed a motion for
reconsideration of the order but the same was denied for lack of merit.
Petitioners questioned the constitutionality of Article 263 (g) of the Labor
Code on the ground that the Secretary of Labor’s intervention violates the
13
workers’ constitutional right to strike, and alleged that he acted with grave
abuse of discretion in issuing the order since his power to certify a dispute
for compulsory arbitration is strictly restricted to cases involving industries
that are indispensable to national interest.
Issues:
Whether or not Article 263 (g) of the Labor Code is unconstitutional; and
Whether or not public respondent acted with grave abuse of discretion in
issuing the questioned order.
Ruling:
No. Article 263 (g) of the Labor Code does not interfere with the
workers’ right to strike 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.
The assumption of the Secretary of Labor of jurisdiction is in the nature of
police power measure. This is done for the promotion of the common good
considering that a prolonged strike or lockout can be inimical to the national
economy. The Secretary of Labor acts to maintain industrial peace. As
articulated in International Pharmaceuticals, Inc. vs. Secretary of Labor, it is
fundamental that a statute is to be read in a manner that would breathe life
into it, rather than defeat it.
No. Grave abuse of discretion implies capricious and whimsical
exercise of judgment. The respondent company is indispensable
to national interest considering that the tire industry has already
been liberalized. Philtread supplies 22% of the tire products in
the country. As observed by the Secretary of Labor, “the
Company is one of the tire manufacturers in the country
employing more or less 700 workers. Any work disruption
thereat, as a result of a labor dispute will certainly prejudice the
employment and livelihood of its workers and their dependents.
Furthermore, the labor dispute may lead to the possible closure
of the Company and loss of employment to hundreds of its
workers. This will definitely aggravate the already worsening
unemployment situation in the country and discourage foreign
and domestic investors from further investing in the country.”
175. PSBA v Noriel
Aug 15 1988 | Cortes, J
Facts:
• Respondent union (PHILIPPINE SCHOOL OF BUSINESS
ADMINISTRATION EMPLOYEES UNION-FFW) filed petition for certificate
election
• More than 2 weeks later, it filed a notice of strike with the BLR
alleging union busting, coercion of employees and harrassment
• Petitioner prayed for dismissal contending that respondent union
does not represent the majority of non academic personnel and another
group does. However, this other group was found to have filed an application
for registration as a legit labor org later than respondent's petition for cert
election.
• Respondent decided to go on strike. Conciliation conferences were
held but to no avail and the strike pushed through
• Petitioner filed a complaint for ULP and sought that the strike be
declared illegal and prayed for preliminary injunction. Parties were again
called for conciliation conferences but the petitioner refused to attend
• While the previously filed cases were pending, PSBA students filed a
civil case seeking to enjoin union from continuing with its picket and from
barricading the school's main gate. TRO was issued. Petitioner joined the
students' complaint and included a crossclaim against respondent asking for
damages. Respondent filed MTD contending that RTC has no jurisdiction
over labor disputes which is involved in the case
• Subsequently, Acting Sec Noriel issued an order stating assumption
of jurisdiction over the labor dispute and directing strikers to return to work
to be accepted under the same terms and conditions prior to the strike
• Strikers returned to work but allegedly were prevented from doing
so. Petitioner sought annulment of the order but Sec Drilon issued a writ of
execution of the said order. Thus respondent filed in the SC a motion to
14
implead Drilon as additional respondent and to restrain enforcement of writ
of execution.
• Meanwhile, case filed in RTC was dismissed for lack of jurisdiction.
• Respondent filed petition before the DOLE to cite petitioner in
contempt. Sec Drilon issued an ordering payment of fine and readmission of
striking employees.
• Hence this supplemental petition reiterating motion to restrain
enforcement of writ of execution seeking nullification of Noriel’s order and
seeking the issuance of a restraining order. Petitioner makes much of the
handwritten letter of Cong. Jabar, VP of the FFW, to Secretary Drilon and
contends that it was improper for Sec Drilon to have acted on the request
because of the constitutional prohibition (see Art 6, Sec 14 of Consti )
Issues:
1. W/N not Noriel’s order was vitiated by a jurisdictional defect and
should be nullified. No.
2. W/N the strike staged by respondent union who had already been
restrained from picketing and barricading the school’s main gate was a fit
subject of return to work (RTW) order. Yes.
3. W/N order to accept returning employees under the same terms and
conditions prevailing prior to the strike was proper despite pendency of the
case for ULP and declaration of illegality of strike. Yes.
Petition dismissed. Order issued by Noriel affirmed.
Petitioner's motion to restrain the enforcement of the writ of execution
issued by Sec Drilon is DENIED. Likewise, the "Urgent Supplemental Petition
and Motion Reiterating Urgent Motion to Restrain Enforcement of Writ of
Execution' is also DENIED.
Ratio:
1. The premise of petitioner's argument is flawed. Its conclusion that the
Acting Secretary's order was vitiated by a jurisdictional defect is anchored on
the premise that the only basis for the order was Cong. Jabar's letter to Sec.
Drilon. But this is not so. Given the circumstances (notice of strike was filed
on the ground of union busting, conciliation conferences were held but to no
avail, strike took place, ULP complaint was filed by respondent, conciliation
conferences were not attended to by respondents leading to an impasse),
the existence of an unresolved labor despite which needed the immediate
attention of the labor authorities certainly cannot be denied.
Acting Sec. Noriel was authorized by law to assume jurisdiction over the
labor dispute, after finding that it adversely affected the national interest.
This power is expressly granted by Art. 263 (g) of the Labor Code, as
amended by B.P. Blg. 227 . Hence, even if the writing of the letter to Sec
Drilon constituted an appearance as counsel by Cong. Jabar before a quasi-
judicial body (although the Court is not disposed to agree to such
contention), still the fact remains that under the circumstances the Acting
Secretary had the power and the duty to assume jurisdiction over the labor
dispute and, corollarily to the assumption of jurisdiction, issue a return-to-
work order.
2. The facts and the law fully support the Acting Sec.'s assumption of
jurisdiction over the labor dispute and the issuance of a RTW order. It may
also be added that due to petitioner's intransigent refusal to attend the
conciliation conferences called after the union struck, assumption of
jurisdiction by the Sec. of Labor and the issuance of a RTW order had
become the only way of breaking the deadlock and maintaining the status
quo ante pending resolution of the dispute. A similar charge that certification
of a labor dispute and the issuance of a RTW order favored a party was
rejected by the Court in United CMC Textile Workers Union v. Ople ("there
can be no such unconstitutional application (of Batas Pambansa Blg. 227)
because all that respondent Minister has done is to certify the labor dispute
for arbitration and thereafter personally assume jurisdiction over it. He has
not rendered any decision; he has not favored one party over the other”).
With more reason should such a charge be rejected in this case, coming as it
does from management for the exercise of the power, to be in full accord
with the Constitution, must be with a view to the protection of labor.
(Quoting from its decision in Free Telephone Workers v MOLE, Court said “...
It must be stressed anew, however, that the power of compulsory
arbitration, while allowable under the [1973] Constitution, and quite
understandable in labor disputes affected with a national interest, to be free
from the taint of unconstitutionality, must be exercised in accordance with
the constitutional mandate of protection to labor.”)
3. Once the Sec. of Labor assumes jurisdiction over, or certifies
for compulsory arbitration, a labor dispute adversely affecting
the national interest, the law mandates that if a strike or lockout
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
15
resume operations and readmit all workers under the same
terms and conditions prevailing before the strike." [Art. 263 (g),
Labor Code, as amended.] Far from erring, the Acting Sec, in
issuing the return to work order, merely implemented the clear
mandates of the law. Thus, the contention that error attended
the issuance of such order is without any legal basis
176. University of the Immaculate Conception vs Sec of Labor
OCTOBER 23, 2012 ~ VBDIAZ
University of the Immaculate Conception vs Sec of Labor
GR 151379
Facts:
This case stemmed from the collective bargaining negotiations between
petitioner University of Immaculate Concepcion, Inc. (UNIVERSITY) and
respondent The UIC Teaching and Non- Teaching Personnel and Employees
Union (UNION). The UNION, as the certified bargaining
agent of all rank and file employees of the UNIVERSITY, submitted its
collective bargaining proposals to the latter on February 16, 1994. However,
one item was left unresolved and this was the inclusion or exclusion of some
positions in the scope of the bargaining unit.
The UNION it filed a notice of strike on the grounds of bargaining deadlock
and ULP. During the thirty (30) day cooling-off period, two union members
were dismissed by petitioner. Consequently, the UNION went on strike.
On January 23, 1995, the then Secretary of Labor, Ma. Nieves R. Confessor,
issued an Order assuming jurisdiction over the labor dispute.
On March 10, 1995, the UNION filed another notice of strike, this time citing
as a reason the UNIVERSITY’s termination of the individual respondents. The
UNION alleged that the UNIVERSITY’s act of terminating the individual
respondents is in violation of the Order of the Secretary of Labor.
On March 28, 1995, the Secretary of Labor issued another Order reiterating
the directives contained in the January 23, 1995 Order. Hence, the
UNIVERSITY was directed to reinstate the individual respondents under the
same terms and conditions prevailing prior to the labor dispute.
The UNIVERSITY filed a MR. In the Order dated August 18, 1995, then
Acting Secretary Jose S. Brilliantes denied the MR, but modified the two
previous Orders by adding:
Anent the Union’s Motion, we find that superseding circumstances would not
warrant the physical reinstatement of the twelve (12) terminated employees.
Hence, they are hereby ordered placed under payroll reinstatement until
thevalidity of their termination is finally resolved.
Issue: WON payroll reinstatement, instead of actual reinstatement, is proper.
Held:
With respect to the Secretary’s Order allowing payroll
reinstatement instead of actual reinstatement for the individual
respondents herein, an amendment to the previous Orders
issued by her office, the same is usually not allowed. Article
263(g) of the Labor Code aforementioned 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.
In ordering payroll reinstatement in lieu of actual reinstatement, then Acting
Secretary of Labor Jose S. Brillantes said:
Anent the Union’s Motion, we find that superseding circumstances would not
warrant the physical reinstatement of the twelve (12) terminated employees.
Hence, they are hereby ordered placed under payroll reinstatement until the
validity of their termination is finally resolved.
16

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 Acting Secretary of Labor
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
Acting Secretary of Labor in ordering the same. Furthermore, the issue has
not been raised by any party in this case.
Petition denied.
177. Trans-Asia v CA Digest
G.R. No. 145428, July 7 2004
Facts of the Case: The petitioner and private respondents were embroiled in
a labor dispute which unfortunately resulted to a strike and dismissal of
several employees. In order to prevent further damage and halt work
stoppage, the Secretary of Labor issued a reinstatement orders instructing
the petitioner to readmit the dismissed employees under terms and
conditions prevailing before the strikes. The petitioner contended that the
subject reinstatement orders constitute a clear encroachment upon
management's prerogatives.
Issue: Is the reinstatement order valid?
Ruling: The reinstatement order is valid as it was issued pursuant to Art. 263
of the Philippine Labor Code which empowers the Secretary of Labor to
acquire jurisdiction over labor disputes involving an industry inimical to
national interest. The maritime industry in which the context of this labor
dispute occurs is clearly such and any disruption and work stoppage therein
will adversely affect trade, commerce and transportation in the country. This
is a clear legal basis for the exercise of the Secretary's power in this case.
Moreover, management prerogative is not absolute and Art. 263 provided
the limitation to the exercise of this prerogative. Under this provision, the
Secretary of Labor is given great breath of discretion to provide solution to a
labor dispute of this kind at the soonest. Hence, in this case, management
prerogative must therefore give way to promote the general welfare.
178. PLDT CO. INC., v. MANGGAGAWA NG KOMUNIKASYON SA
PILIPINAS and CA
OCTOBER 23, 2012 ~ VBDIAZ
PHILIPPINE LONG DISTANCE TELEPHONE CO. INC., v.
MANGGAGAWA NG
KOMUNIKASYON SA PILIPINAS and the COURT OF APPEALS,
G.R. No. 162783/ July 14, 2005
FACTS:
Petitioner Philippine Long Distance Telephone Co., Inc. (PLDT) is a domestic
corporation engaged in the telecommunications business.
Private respondent
Manggagawa ng Komunikasyon sa Pilipinas (MKP) is a labor union of rank
and file
employees in PLDT.
The members of respondent union learned that a redundancy program would
be implemented by the petitioner. Thereupon it filed a Notice of Strike with
the National Conciliation and Mediation Board (NCMB) on 04 November
2002. The Notice fundamentally contained the following:
UNFAIR LABOR PRACTICES, to wit:
1.
PLDT’s abolition of the Provisioning Support Division, in violation of the duty
to bargain collectively with MKP in good faith.
2.
PLDT’s unreasonable refusal to honor its commitment before this Honorable
Office that it will provide MKP its comprehensive plan/s with respect to
personnel downsizing/reorganization and closure of exchanges. Such refusal
violates its duty to bargain collectively with MKP in good faith.
17
3.
PLDT’s continued hiring of “contractual”, “temporary”, “project” and “casual”
employees for regular jobs performed by union members, resulting in the
decimation of the union membership and in the denial of the right to self-
organization to the concerned employees.
4.
PLDT’s gross violation of the legal and CBA provisions on overtime work and
compensation.
5.
PLDT’s gross violation of the CBA provisions on promotions and job grade re-
evaluation or reclassification.
On 11 November 2002, another Notice of Strike was filed by the private
respondent, which contained the following: UNFAIR LABOR PRACTICES, to
wit: PLDT’s alleged restructuring of its GMM Operation Services.
A number of conciliation meetings, conducted by the NCMB, National Capital
Region,
were held between the parties. However, these efforts proved futile.
On 23 December 2002, the private respondent staged a strike. On 31
December 2002, three hundred eighty three (383) union members were
terminated from service pursuant to PLDT’s redundancy program.
On 02 January 2003, the Secretary, Patricia Sto. Tomas, issued an Order[4]
in NCMB- NCR-NS-11-405-02 and NCMB-NCR-NS-11-412-02. Portions of the
Order are reproduced hereunder:
xxx Accordingly, the strike staged by the Union is hereby enjoined. All
striking workers are hereby directed to return to work within twenty four
(24) hours from receipt of this Order, except those who were terminated due
to redundancy. The employer is hereby enjoined to accept the striking
workers under the same terms and conditions prevailing prior to the strike.
The parties are likewise directed to cease and desist from committing any act
that might worsen the situation. xxx
ISSUE:
WHETHER THE SUBJECT ORDERS OF THE SECRETARY OF THE DOLE
EXCLUDING FROM THE RETURN-TO-WORK
ORDER THE WORKERS DISMISSED DUE TO THE REDUNDANCY PROGRAM
OF PETITIONER, ARE VALID OR NOT.
RULING:
. . . Assumption of jurisdiction over a labor dispute, or as in this case the
certification of the same to the NLRC for compulsory arbitration, always
co-exists with an order for workers to return to work immediately and for
employers to readmit all workers under the same terms and conditions
prevailing before the strike or lockout. Time and again, this Court has held
that when an official bypasses 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.[30]
One last piece. Records would show that the strike occurred on
23 December 2002. Article 263(g) directs that the employer
must readmit all workers under the same terms and conditions
prevailing before the strike. Since the strike was held on the
aforementioned date, then the condition prevailing before it,
which was the condition present on 22 December 2002, must be
maintained.
Undoubtedly, on 22 December 2002, the members of the private respondent
who were dismissed due to alleged redundancy were still employed by the
petitioner and holding their respective positions. This is the status quo that
must be maintained.
Valid.
180. INTERNATIONAL PHARMACEUTICALS V. Sec of DOLE
FACTS: Prior to the expiration on January 1, 1989 of the collective bargaining
agreement between petitioner International Pharmaceuticals, Inc. (hereafter,
Company) and the Associated Labor Union (Union, for brevity), the latter
submitted to the Company its economic and political demands. These were
not met by the Company, hence a deadlock ensued. The Union filed a notice
18
of strike with NCMB. After all conciliation efforts had failed, the Union went
on strike on August 8, 1989 and the Company's operations were completely
paralyzed. Subsequently, three other labor cases involving the same parties
were filed with the NLRC.1 Meanwhile, considering that the Company
belongs to an industry indispensable to national interest, it being engaged in
the manufacture of drugs and pharmaceuticals and employing around 600
workers, then Acting Secretary of Labor, Ricardo C. Castro, invoking Article
263 (g) of the Labor Code, issued an order assuming jurisdiction over the
case and directed the parties to return to the status quo before the work
stoppage. The Union filed a motion seeking the consolidation of the three
NLRC cases. SOLE granted. MR denied. Company: exclusive jurisdiction to
hear and decide the three NLRC cases is vested in the labor arbiter as
provided in paragraph (a) (1) and (5) of Article 217 of the Labor Code. There
is nothing in Article 263 (g) of the Labor Code which directs the labor arbiter
to hold in abeyance all proceedings in the NLRC cases and await instruction
from the Secretary. Secretary should not have ordered the consolidation of
the four unfair labor practice cases, since the Secretary assumed jurisdiction
only over the deadlock in the negotiation of the collective bargaining
agreement and the petition for contempt as a result of the said deadlock.
1. International Pharmaceuticals, Inc. vs. Associated Labor Union, NLRC Case
No. VII-09-0810-89, 1 a petition for injunction and damages with temporary
restraining order filed by the Company against the Union and some of its
members for picketing the Company's establishment in Cebu, Davao, and
Metro Manila allegedly without the required majority of the employees
approving and agreeing to the strike and with simulated strike votes, in
direct violation of the provisions of their collective bargaining agreement and
in total and complete defiance of the provisions of the Labor Code; 2.
Associated Labor Union vs. International Pharmaceuticals, Inc., et al., NLRC
Case No-VII-08-0715-89, 2 a complaint for unfair labor practice with prayer
for damages and attorney's fees filed by the Union against the Company, its
personnel manager, and the Workers Alliance of Trade Unions (WATU) as a
result of the Company's refusal to include the sales workers in the bargaining
unit resulting in a deadlock in the bargaining negotiations; for coddling the
respondent WATU as a separate bargaining agent of the sales workers
despite a contrary ruling of the Med-Arbiter; and undue interference by the
Company in the right of the workers to self-organization through harassment
and dispersal of a peaceful picket during the strike; and 3. International
Pharmaceuticals, Inc., et al. vs. Associated Labor Union, NLRC Case No. VII-
08-0742-89, 3 a petition to declare the strike illegal with prayer for damages
filed by the Company alleging, among others, that the notice of strike filed
by the Union with the National Conciliation and Mediation Board did not
conform with the requirements of the Labor Code, and that the Union, in
violation of the Labor Code provisions on the conduct of the strike, totally
blockaded and continued to blockade the ingress and egress of the
Company's premises by human barricades, placards, benches and other
obstructions, completely paralyzing its business operations.
Respondents: authority to assume jurisdiction over labor disputes, vested in
the Secretary by Article 263 (g) of the Labor Code, extends to all questions
and incidents arising therein causing or likely to cause strikes or lockouts in
industries indispensable to national interest.
ISSUE: WON SOLE has the power to assume jurisdiction over a labor dispute
and its incidental controversies, including unfair labor practice cases, causing
or likely to cause a strike or lockout in an industry indispensable to the
national interest. (YES)
HELD: The Secretary was 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. Necessarily, this authority to assume
jurisdiction over the said labor dispute must include and extend
to all questions and controversies arising therefrom, including
cases over which the labor arbiter has exclusive jurisdiction.
Moreover, Article 217 of the Labor Code is not without, but contemplates,
exceptions thereto. This is evident from the opening proviso therein reading
"(e)xcept as otherwise provided under this Code . . ." Plainly, Article 263 (g)
of the Labor Code was meant to make both the Secretary (or the various
regional directors) and the labor arbiters share jurisdiction, subject to certain
conditions. Otherwise, the Secretary would not be able to effectively and
efficiently dispose of the primary dispute. In fine, the issuance of the assailed
orders is within the province of the Secretary as authorized by Article 263 (g)
of the Labor Code and Article 217 (a) (1) and (5) of the same Code, taken
19
conjointly and rationally construed to subserve the objective of the
jurisdiction vested in the Secretary. The Secretary has been conferred
jurisdiction over cases which would otherwise be under the original and
exclusive jurisdiction of labor arbiters .
There was an existing labor
dispute as a result of a deadlock in the negotiation for a
collective bargaining agreement and the consequent strike, over
which the Secretary assumed jurisdiction pursuant to Article 263
(g) of the Labor Code. The three NLRC cases were just offshoots of the
stalemate in the negotiations and the strike. We, therefore, uphold the
Secretary's order to consolidate the NLRC cases with the labor dispute
pending before him and his subsequent assumption of jurisdiction over the
said NLRC cases for him to be able to competently and efficiently dispose of
the dispute in its totality.
181. UNION OF FILIPRO EMPLOYEES vs. NLRC and NESTLE
PHILIPPINES, INC. OCTOBER 23, 2012 ~ VBDIAZ
UNION OF FILIPRO EMPLOYEES vs. NLRC and NESTLE
PHILIPPINES, INC.
G.R. No. 91025 : December 19, 1990.
FACTS: On June 22, 1988, the petitioner Union of the Filipro Employees, the
sole and exclusive bargaining agent of all rank-and-file employees of Nestle
Philippines, (private respondent) filed a Notice of Strike at the DOLE raising
the issues of CBA deadlock and unfair labor practice. Private respondent
assailed the legal personality of the proponents of the said notice of strike to
represent the Nestle employees, before the NCMB. This notwithstanding, the
NCMB proceeded to invite the parties to attend the conciliation meetings and
to which private respondent failed to attend contending that it will deal only
with a negotiating panel duly constituted and mandated in accordance with
the UFE Constitution and By-laws. Thereafter, Company terminated from
employment all UFE Union officers, and all the members of the negotiating
panel for instigating and knowingly participating in a strike staged at the
Makati, Alabang, Cabuyao and Cagayan de Oro on September 11, 1987
without any notice of strike filed and a strike vote obtained for the purpose.
The union filed a complaint for illegal dismissal. LA upheld the validity of the
dismissal; NLRC en banc affirmed. Subsequently, company concluded
separate CBAs with the general membership of the union at Cebu/Davao and
Cagayan de Oro units; Assailing the validity of these agreements, the union
filed a case of ULP against the company with the NLRC-NCR Arbitration
Branch Efforts to resolve the dispute amicably were taken by the NCMB but
yielded negative result. Petitioner filed a motion asking the Secretary of
Labor to assume jurisdiction over the dispute of deadlock in collective
bargaining between the parties. On October 28, 1988, Labor Secretary
Franklin Drilon “certified” to the NLRC the said dispute between the UFE and
Nestle, Philippines.. which reads as follows: xxx “The NLRC is further
directed to call all the parties immediately and resolve the CBA deadlock
within twenty (20) days from submission of the case for resolution.” Second
Division of the NLRC promulgated a resolution granting wage increase and
other benefits to Nestle’s employees, ruling on non-economic issues, as well
as absolving the private respondent of the Unfair Labor Practice charge.
Petitioner finds said resolution to be inadequate and accordingly, does not
agree therewith. It filed a motion for reconsideration, denied. Hence, this
petition.
ISSUE: (relative to the topic) WON WHETHER OR NOT THE SECOND
DIVISION OF THE NLRC ACTED WITHOUT JURISDICTION IN RENDERING
THE ASSAILED RESOLUTION, THE SAME BEING RENDERED ONLY BY A
DIVISION OF THE PUBLIC RESPONDENT AND NOT BY EN BANC;
HELD: This case was certified on October 28, 1988 when existing rules
prescribed that, it is incumbent upon the Commission en banc to decide or
resolve a certified dispute. However, R.A. 6715 took effect during the
pendency of this case. Aside from vesting upon each division the power to
adjudicate cases filed before the Commission, said Act further provides that
the divisions of the Commission shall have exclusive appellate jurisdiction
over cases within their respective territorial jurisdiction. Section 5 of RA 6715
provides as follows: xxxx The Commission may sit en banc or in five (5)
divisions, each composed of three (3) members. The Commission shall sit en
banc only for purposes of promulgating rules and regulations governing the
hearing and disposition of cases before any of its divisions and regional
branches and formulating policies affecting its administration and operations.
The Commission shall exercise its adjudicatory and all other powers,
functions and duties through its divisions. xxxx In view of the enactment of
Republic Act 6715, the aforementioned rules requiring the Commission en
banc to decide or resolve a certified dispute have accordingly been repealed.
Confirmed in Administrative Order No. 36 (Series of 1989) promulgated by
20
the Secretary under his delegated rule-making power. Moreover, it is to be
emphasized and it is a matter of judicial notice that since the effectivity of
R.A. 6715, many cases have already been decided by the 5 divisions of the
NLRC. We find no legal justification in entertaining petitioner’s claim
considering that the clear intent of the amendatory provision is to expedite
the disposition of labor cases filed before the Commission. To rule otherwise
would not be congruous to the proper administration of justice.
ACCORDINGLY, PREMISES CONSIDERED, the petition is DISMISSED. The
Resolutions of the NLRC, dated June 5, 1989 and August 8, 1989 are
AFFIRMED, except insofar as the ruling absolving the private respondent of
unfair labor practice which is declared SET ASIDE.
182. Reformist Union of R.B. Liner, Inc. v. NLRC, 266 SCRA 713,
January 27, 1997
Reformist Union, a labor union staged a strike against R.B. Liner in 1989.
R.B. Liner petitioned the Secretary of Labor to assume jurisdiction over the
dispute or certify it to the NLRC. The Secretary certified the case to the
NLRC for compulsory arbitration. The certified case was dismissed after the
union and the company reached an agreement providing, among others, for
the holding of a certification election. Later, when the union filed a
complaint for unfair labor practice against the company, i.e. illegal lockout
that allegedly took place after the strike and the election, R.B. Liner
countered with another case that sought to declare the 1989 strike illegal.
Can the company still contest the legality of the 1989 strike?
A. No, the company can no longer contest the legality of the
strike. The company itself sought compulsory arbitration in
order to resolve that very issue. The dispute or strike was
settled when the company and the union entered into an
agreement. By acceding to the peaceful settlement brokered
by the NLRC, the company waived the issue of the illegality of
the strike. The very nature of compulsory arbitration makes
the settlement binding upon the company. Compulsory
arbitration has been defined both as “the process of settlement
of labor disputes by a government agency which has the
authority to investigate and to make an award which is binding
on all the parties,” and as a mode of arbitration where the
parties are “compelled to accept the resolution of their dispute
through arbitration by a third party.” Clearly, the legality of the
strike can no longer be reviewed. (Reformist Union of R.B.
Liner, Inc. v. NLRC, 266 SCRA 713, January 27, 1997)
183. SAN MIGUEL CORPORATION vs. NLRC, ILAW AT BUKLOD NG
MANGGAGAWA (IBM) G.R. No. 119293|June 10, 2003|Azcuna,J.
Nature: Petition for Certiorari and Prohibition
FACTS:
1. Petitioner San Miguel Corporation (SMC) and respondent Ilaw at Buklod ng
Manggagawa (IBM), exclusive bargaining agent of petitioner’s daily-paid rank
and file employees, executed a Collective Bargaining Agreement (CBA) under
which they agreed to submit all disputes to grievance and arbitration
proceedings.
2. The CBA also included a mutually enforceable no-strike no-lockout
agreement.
3. On April 11, 1994, IBM, through its vice-president Alfredo Colomeda, filed
with the National Conciliation and Mediation Board (NCMB) a notice of strike
against petitioner for allegedly committing:
(1) illegal dismissal of union members,
(2) illegal transfer,
(3) violation of CBA,
(4) contracting out of jobs being performed by union members,
(5) labor-only contracting,
(6) harassment of union officers and members,
(7) non-recognition of duly-elected union officers, and
(8) other acts of unfair labor practice.
21
4. The next day, IBM filed another notice of strike, this time through its
president Edilberto Galvez, raising similar grounds:
(1) illegal transfer,
(2) labor-only contracting,
(3) violation of CBA,
(4) dismissal of union officers and members, and
(5) other acts of unfair labor practice.
5. The Galvez group subsequently requested the NCMB to consolidate its
notice of strike with that of the Colomeda group, to which the latter
opposed, alleging Galvez’s lack of authority in filing the same.
6. Petitioner thereafter filed a Motion for Severance of Notices of Strike with
Motion to Dismiss, on the grounds that the notices raised non-strikeable
issues and that they affected four corporations which are separate and
distinct from each other.
7. After several conciliation meetings, NCMB Director Reynaldo Ubaldo found
that the real issues involved are non-strikeable (illegal dismissal, labor only
contracting and internal union disputes).
8. Hence on May 2, 1994, he issued separate letter-orders to both union
groups, converting their notices of strike into preventive mediation.
9. while separate preventive mediation conferences were ongoing, the
Colomeda group filed with the NCMB a notice of holding a strike vote.
10. Petitioner opposed by filing a Manifestation and Motion to Declare Notice
of Strike Vote Illegal, invoking the case of PAL v. Drilon, which held that no
strike could be legally declared during the pendency of preventive mediation.
11. NCMB Director Ubaldo in response issued another letter to the Colomeda
Group reiterating the conversion of the notice of strike into a case of
preventive mediation and emphasizing the findings that the grounds raised
center only on an intraunion conflict, which is not strikeable.
12. Colomeda group notified the NCMB of the results of their strike vote,
which favored the holding of a strike.
13. In reply, NCMB issued a letter again advising them that by virtue of the
PAL v. Drilon ruling, their notice of strike is deemed not to have been filed,
consequently invalidating any subsequent strike for lack of compliance with
the notice requirement.
14. Despite this and the pendency of the preventive mediation proceedings,
IBM went on strike. The strike paralyzed the operations of petitioner, causing
it losses allegedly worth P29.98 million in daily lost production.
15. petitioner filed with public respondent NLRC an amended Petition for
Injunction with Prayer for the Issuance of Temporary Restraining Order, Free
Ingress and Egress Order and Deputization Order. NLRC: resolved to issue a
TRO directing free ingress to and egress from petitioner’s plants, without
prejudice to the union’s right to peaceful picketing and continuous hearings
on the injunction case. A Memorandum Of Agreement was signed calling for
a lifting of the picket lines and resumption of work in exchange of “good faith
talks” between the management and the labor management committees.
Respondent moved to reconsider the issuance of TRO and sought to dismiss
the injunction case in view of the cessation of its picketing activities as a
result of the signed MOA. NLRC issued the challenged decision, denying the
petition for injunction for lack of factual basis. NLRC issued the challenged
decision, denying the petition for injunction for lack of factual basis.
ISSUE#1: Whether there was violation of the no-strike provision
in the CBA?
HELD. NO. Jurisprudence has enunciated that such clauses only
bar strikes which are economic in nature, but not strikes
grounded on unfair labor practices. The notices filed in the case
at bar alleged unfair labor practices, the initial determination of
which would entail fact-finding that is best left for the labor
arbiters. Nevertheless, our finding herein (as discussed below)
of the invalidity of the notices of strike dispenses with the need
to discuss this issue.
22
ISSUE#2: Whether NLRC gravely abused its discretion when it failed to
enforce, by injunction, the parties’ reciprocal obligations to submit to
arbitration and not to strike.
HELD: YES. Article 218 (e) of the Labor Code expressly confers upon the
NLRC the power to “enjoin or restrain actual and threatened commission of
any or all prohibited or unlawful acts, or to require the performance of a
particular act in any labor dispute which, if not restrained or performed
forthwith, may cause grave or irreparable damage to any party or render
ineffectual any decision in favor of such party x x x.” Pursuant to Article 218
(e), the coercive measure of injunction may also be used to restrain an
actual or threatened unlawful strike. In the case ofSan Miguel Corporation v.
NLRC, where the same issue of NLRC’s duty to enjoin an unlawful strike was
raised, we ruled that the NLRC committed grave abuse of discretion when it
denied the petition for injunction to restrain the union from declaring a strike
based on non-strikeable grounds. Further, in IBM v. NLRC, we held that it is
the “legal duty and obligation” of the NLRC to enjoin a partial strike staged in
violation of the law. Failure promptly to issue an injunction by the public
respondent was likewise held therein to be an abuse of discretion. In the
case at bar, petitioner sought a permanent injunction to enjoin the
respondent’s strike. A strike is considered as the most effective weapon in
protecting the rights of the employees to improve the terms and conditions
of their employment. However, to be valid, a strike must be pursued within
legal bounds. One of the procedural requisites that Article 263 of the Labor
Code and its Implementing Rules prescribe is the filing of a valid notice of
strike with the NCMB. Imposed for the purpose of encouraging the voluntary
settlement of disputes,this requirement has been held to be mandatory, the
lack of which shall render a strike illegal. In the present case, NCMB
converted IBM’s notices into preventive mediation as it found that the real
issues raised are nonstrikeable. Such order is in pursuance of the NCMB’s
duty to exert “all efforts at mediation and conciliation to enable the parties to
settle the dispute amicably,” and in line with the state policy of favoring
voluntary modes of settling labor disputes. In accordance with the
Implementing Rules of the Labor Code, the said conversion has the effect of
dismissing the notices of strike filed by respondent. A case in point is PAL v.
Drilon, where we declared a strike illegal for lack of a valid notice of strike, in
view of the NCMB’s conversion of the notice therein into a preventive
mediation case. Clearly, therefore, applying the aforecited ruling to the case
at bar, when the NCMB ordered the preventive mediation on May 2, 1994,
respondent had thereupon lost the notices of strike it had filed.
Subsequently, however, it still defiantly proceeded with the strike while
mediation was ongoing, and notwithstanding the letter-advisories of NCMB
warning it of its lack of notice of strike. Such disregard of the mediation
proceedings was a blatant violation of the Implementing Rules, which
explicitly oblige the parties to bargain collectivelyin good faith and prohibit
them from impeding or disrupting the proceedings. The NCMB having no
coercive powers of injunction, petitioner sought recourse from the public
respondent. The NLRC issued a TRO only for free ingress to and egress from
petitioner’s plants, but did not enjoin the unlawful strike itself. It ignored the
fatal lack of notice of strike, and five months after came out with a decision
summarily rejecting petitioner’s cited jurisprudence.
ISSUE#3: whether there was lack of factual basis in issuing the injunction.
HELD: NO. Contrary to the NLRC’s finding, we find that at the time the
injunction was being sought, there existed a threat to revive the unlawful
strike as evidenced by the flyers then being circulated by the IBM-NCR
Council which led the union. These flyers categorically declared: “Ipaalala
n’yo sa management na hindi iniaatras ang ating Notice of Strike (NOS) at
anumang oras ay pwede nating muling itirik ang picket line.” These flyers
were not denied by respondent, and were dated June 19, 1994, just a day
after the union’s manifestation with the NLRC that there existed no threat of
commission of prohibited activities. Moreover, it bears stressing that Article
264(a) of the Labor Code explicitly states that a declaration of strike without
first having filed the required notice is a prohibited activity, which may be
prevented through an injunction in accordance with Article 254. Clearly,
public respondent should have granted the injunctive relief to prevent the
grave damage brought about by the unlawful strike. Also noteworthy is
public respondent’s disregard of petitioner’s argument pointing out the
union’s failure to observe the CBA provisions on grievance and arbitration. In
the case of San Miguel Corp. v. NLRC, we ruled that the union therein
violated the mandatory provisions of the CBA when it filed a notice of strike
without availing of the remedies prescribed therein.
184. G.R. No. L-30658-59 March 31, 1976 SHELL OIL WORKERS
UNION and SHELL & AFFILIATES SUPERVISORS UNION,
Petitioners, vs. SHELL COMPANY OF THE PHILIPPINES and THE
COURT OF INDUSTRIAL RELATIONS, Respondents.
23
 Facts: The claims interposed that the members of the unions were not being
paid their overtime pay due them in accordance with the ruling in NAWASA
Consolidated case to wit: “It has been held that for purposes of computing
overtime compensation a regular wage includes all payments which the
parties have agreed shall be received during the work week, including piece
work wages, differential payments for working at undesirable times, such as
at night or on Sundays and holidays, and the cost of board and lodging
customarily furnished the employee”. The company filed an answer claiming
that the employees who rendered overtime work have been paid in
accordance with law and their CBA and that the NAWASA decision insofar as
the computation of overtime pay is concerned is not applicable to the factual
situation and that claims for overtime pay filed beyond the three-year period
allowed by law have already prescribed. The trial court rendered its decision
denying both the petitions for lack of basis. The petitioners elevated their
cases to the Court of Industrial Relations and reiterated their claim for the
re-computation of their overtime pay by taking into account the fringe
benefits enjoyed and adding the same to the basic rate before computing the
overtime pay but the same were denied. Hence this petition for review on
certiorari.
Issue: Whether the pertinent ruling in the NAWASA is applicable to the case
at bar so as to follow the payment of additional overtime pay to the
petitioners notwithstanding their collective bargaining agreement.
Ruling:We rule that the NAWASA case is inapplicable to the case
at bar. Having been stipulated by the parties that ".. the Tin
Factory Incentive Pay has ceased in view of the closure of the
factory the fringe benefits as described show that they are
occasionally not regularly enjoyed and that not all employees
are entitled to them", petitioners failed to meet the test laid
down by this Court in the NAWASA case. The collective
bargaining agreement resorted to by the parties being in
accordance with R.A. 875, with its provision on overtime pay far
away beyond the premium rate provided for in Commonwealth
Act 444, the same should govern their relationship. It should be
noted in passing that Commonwealth Act 444 prescribes only a
minimum of at least 25% in addition to the regular of pay,
whereas, under the Collective Bargaining Agreement of the
parties, the premium rate of overtime pay is as high as 150%
on regular working days up to 250% on Sundays and
recognized national holidays. Since this is their contract entered
into by them pursuant to bargaining negotiations under existing
laws, they are bound to respect it. It is the duty of this Court to
see to it that contracts between parties, not tainted with
infirmity or irregularity or illegality, be strictly complied with by
the parties themselves. This is the only way by which unity and
order can be properly attained in our society
184. HENRY BACUS, et. al., ,petitioners, vs.
HON. BLAS F. OPLE, MOLE and FINDLAY MILLAR TIMBER
COMPANY, respondents,
G.R. No. L-56856; October 23, 1984; Cuevas, J.
Facts:
Findlay Millar Timber Company is engaged in logging and
manufacture of plywood, veneer and other lumber products. The company
employs approximately 2,000 employees more or less, among whom are the
herein petitioners. On February 19, 1979, about 1,400 employees, more or
less, of the Company staged a mass walk-out, to protest among others the
non-payment of their salaries and wages, non-payment of unused vacation
and sick leaves, and non-payment of the 13th month pay. Thereafter, the
Company filed with the MOLE a clearance to terminate the services of 19
employees, including the herein petitioners because of illegal strike and that
they abandoned their jobs for the past 10 days. MOLE issued an order for
the management to pay the payroll of the employees and the latter are
ordered to return to work. However, both parties failed to carry out the said
order hence conference was conducted. Subsequently, a hearing was set but
this was rescheduled and/or delayed several times. At any rate, after
hearing, Deputy Minister Inciong, acting on the recommendation of Arbiter
Macaraya rendered a decision that the strike was illegal and out of 41
workers sought to be terminated in the Company's Clearance Application,
only ten (10) [petitioners] appeared to be the instigators of the strike
pointing out that a strike thus the clearance to terminate Bacus, et.al.,
24
(petitioners) was granted. The MR of the said employees was denied hence
this petition.
Issues:
1. Whether or not strike was illegal.
2. Whether or not the order of MOLE was rendered with grave abuse of
discretion or without or in excess of its jurisdiction.
Held:
1. No. Affixing the stamp of illegality to the strike on the
ground that it was marred by acts of violence committed
by the workers, is an unrealistic and outmoded view of
the right to strike. From all indications, under the facts
and circumstances of the instant case, staging such a
concerted action by not reporting for work, as in the case
at bar, may be viewed as one inspired by good faith. Not
every form of violence suffices to affix the seal of
illegality on a strike or to cause the loss of employment
by the guilty party. To avoid rendering illusory the
recognition of the right to strike, responsibility in such a
case should be individual and not collective. Strike staged
by the workers, inspired by good faith does not
automatically make the same illegal. In the instant case,it
is not disputed that the Company did not pay the salaries
of the workers for one and a half months, more or less.
Such act of the Company broke the patience of the
workers. On the other hand, the act of the workers in
demanding a valid grievance for the payment of their
salaries is inspired by their honest belief that the
Company was committing acts inimical to their interests
relative to wages which, basically, is a violation of the
CBA existing between the parties.
2. Yes. A mere finding of the illegality of a strike should not be
automatically followed by wholesale dismissal of the strikers from
their employment. Even if declared illegal, need not have been
attended with such a drastic consequence as termination of
employment relationship because of the security of tenure provision
under the Constitution.
186. G.R. No. 106316 May 5, 1997
FIRST CITY INTERLINK TRANSPORTATION CO., INC., doing
business under the name and style FIL TRANSIT, petitioner, vs. THE
HONORABLE SECRETARY MA. NIEVES ROLDAN-CONFESOR, in her
capacity as Secretary of Labor and Employment, and
NAGKAKAISANG MANGGAGAWA NG FIL TRANSIT-NATIONAL
FEDERATION OF LABOR (NMF-NFL), respondents.
FACTS: Fil Transit Employees Union filed a notice of strike with the Bureau of
Labor Relations (BLR) because of alleged unfair labor practice of petitioner
company. Despite several conciliation conferences, the parties failed to reach
an agreement, the union went on strike, as a reason several workers were
dismissed.
The union filed another notice of strike alleging ULP, massive dismissal of
union officers and members, coercion of employees and violation of workers'
rights to self-organization. Conciliation conferences were held but the union
again went on strike. The then Minister of Labor and Employment (MOLE)
ordered the striking workers to return to work. Only 66 employees were
accepted, conditioned on the submission of certain requirements.
The Secretary of Labor ruled for the legality of the strike and awarded
backwages and separation pay to the strikers. Petitioner, however, alleged
that no strike vote was obtained, the result thereof was not reported to the
MOLE, the strikers engaged in violent, illegal and criminal acts, and it
complied with the return to work order.
ISSUE : WON the strike was illegal.
HELD : Yes. It was not shown in the pleadings that a strike vote
was obtained before the declaration of strike. The statement in
the same order of the Labor Secretary that a notice of strike
had been filed because several conciliation conferences failed
due to management's consistent refusal to appear is contrary to
evidence because management was duly represented during the
conciliation proceedings prior to the strike.
25

Even assuming that a strike vote had been taken, the strike
called by the Union was illegal because of nonobservance by the
Union of the mandatory seven-day strike ban counted from the
date the strike vote should have been reported to the
Department of Labor and Employment up to the time the Union
staged the strike on June 17, 1986. I
The union was in bad faith when it conducted the strike
because instead of attending the conciliation meetings with
petitioner, it went on strike. The strike was attended by
pervasive and widespread violence such as the hijacking of Fil-
Transit buses, barricading of the terminal in Alabang, puncturing
of tires, cutting of electric wirings, water hoses and fan belts,
use of Molotov bombs, and theft of expensive equipment such
as fuel injections. The commission of these illegal acts was
neither isolated nor accidental but deliberately employed to
intimidate and harass the employer and the public.
However, only the union officers and strikers who engaged in
violent, illegal and criminal acts against the employer are
deemed to have lost their employment status in accordance
with Art. 264 of the Labor Code.
187. TELEFUNKEN vs. SEC. OF LABOR
Due to a deadlock in Collective Bargaining Agreement (CBA) negotiations,
the Union filed a Notice of Strike on 28 August 1995, with the National
Conciliation and Mediation Board (NCMB) against Temic Telefunken Micro-
Electronics (Phils.), Inc. (Company).
Then Acting Secretary of the Department of Labor and Employment (DOLE),
Hon. Jose S. Brillantes, intervened and assumed jurisdiction over the dispute
and issued an Order enjoining any strike or lockout, whether actual or
intended, between the parties.
Despite the Assumption Order, the Union held a strike on 14 September
1995.
Thereafter, the Acting Secretary issued a Return-to-Work Order. Some of the
striking workers, however, refused to heed the Order and continued with
their picket.
On 23 September 1995, violence erupted in the picket lines causing injuries
to striking and non-striking employees of the Company. On 02 October 1995,
the Company issued letters of termination for cause to the workers who did
not report back to work despite the Notice of Assumption and Return-to-
Work Orders issued by then Acting Secretary Brillantes.
On 27 October 1995, the Acting Secretary of Labor and Employment issued
the assailed Order, a portion of which states:
Atty. Tito F. Genilo, Technical Assistant, Office of the Secretary, this
Department, is hereby designated to immediately call the parties and hear
and receive evidence on the matter of illegal strike,…
Pending resolution of the issue involving the legality of the strike, the
Company is hereby directed to accept back all striking workers, except the
Union Officers, shop stewards, and those with pending criminal charges,
whose termination shall be among the issues to be heard by Atty. Genilo.
(Emphasis supplied)
26
The aforequoted Order gave rise to the filing of a petition for certiorari
docketed as G.R. No. 122743. Therein petitioner Union questioned the
exclusion contained in said Order.
While G.R. No. 122743 was pending before the Court, then Secretary of
Labor and Employment Leonardo A. Quisumbing[3] issued a Writ of
Execution, the decretal part of which states:
ACCORDINGLY, a Writ of Execution is hereby issued commanding Sheriff
Edgar Paredes . . . to proceed to the premises of Temic Telefunken
Microelectronics (Phils.), Inc., . . . and execute fully and faithfully the
Decisions of the Secretary dated October 27, 1995 and November 24, 1995
by seeing the actual and physical reinstatement of the remaining workers in
the 32-page Annex A who are yet to be readmitted as ordered in the
Decisions under the same terms and conditions prevailing before the strike
on September 14, 1995 . . . (Emphasis supplied.)
The Company's Motion to Quash, Recall or Suspend the Writ of Execution
was denied for lack of merit. An Alias Writ of Execution was thereafter issued
directing the reinstatement of the strikers in the payroll if actual and physical
reinstatement was not possible.
The issuance of the above alias writ, in turn, gave rise to another petition for
certiorari, docketed as G.R. No. 127215.
On 12 December 1997, the Court rendered a consolidated Decision[4] in G.R.
No. 122743 and No. 127215, viz:
WHEREFORE, the petition in G.R. No. 122743 is GRANTED. Respondent
TEMIC TELEFUNKEN MICROELECTRONICS (PHILS.), INC., is ORDERED to
accept back immediately all striking workers of TELEFUNKEN
SEMICONDUCTORS EMPLOYEES UNION-FFW WITHOUT EXCEPTION.
In G.R. No. 127215, the petition is DISMISSED for lack of merit. Accordingly,
respondent Secretary of Labor and Employment is DIRECTED to ensure the
effective enforcement of the writ of execution he issued and determine
WITH DISPATCH the legality of the strike as well as the liability of the
individual strikers, if any. The members of the TELEFUNKEN
SEMICONDUCTORS EMPLOYEES UNION-FFW are WARNED that a repetition
of the same or similar mass demonstration within or about the premises of
this Court will be dealt with severely.
The Court held that excluding the workers, without first determining whether
they knowingly committed illegal acts would be tantamount to dismissal
without due process of law.
The decision became final and executory and was entered in the Book of
Entries of Judgments on 06 April 1998.
An Alias Writ of Execution was thereafter issued by the Secretary of Labor
and Employment, directing the actual physical reinstatement of the striking
workers and, in the event that the latter was not possible, reinstatement in
the payroll.
The Company moved to quash the Alias Writ but was unsuccessful.
The above fact, in turn, gave rise to yet another Petition for Certiorari,
docketed as G.R. No. 135788, filed by the Company. On 07 December 1998,
the Court, however, dismissed said case on technical grounds.
In the intervening time, marathon hearings were conducted by the DOLE to
"determine with dispatch the legality of the strike." On 28 May 1999, the
Secretary of Labor and Employment reached a decision regarding the legality
of the strike conducted way back in 1995, viz:
WHEREFORE, PREMISED ON THE FOREGOING, this Office hereby:
a. Declares the strike conducted by the Telefunken Semiconductors
Employees Union-FFW on 14 September 1995 as illegal for having been
waged in open, willful and knowing defiance of the assumption order dated 8
September 1995 and the subsequent return-to-work order dated 16
September 1995 and consequently, the striking workers are declared to have
lost their employment status;
b. Directs the payment of backwages and other benefits to the striking
workers corresponding to the temporary reinstatement periods (1) from 27
June 1996 to 28 October 1996, (2) from 21 November 1998 up to the date
of this Decision;
27

c. Directs the Telefunken Micro-Electronics (Phils.), Inc. to grant financial
assistance equivalent to one (1) month for every year of service to the
striking workers conformably with its grant of the same benefit to other
strikers as manifested by the Company to the Supreme Court on 20
November 1997.
In this connection, the Bureau of Working Conditions, this Department, is
hereby directed to compute the total award herein made and to submit its
report of computation to this Office within ten (10) days from receipt of this
Decision. (Emphasis supplied)
The subsequent Motions for Reconsideration filed by the Company and the
Union and some of its members, namely, Nancy Busa and Arnel Badua, were
all denied.
Aggrieved, both the Company and the Union filed their respective Petitions
for Certiorari with the Court of Appeals, docketed as CA-G.R. SP No. 54227
and No. 54665, respectively.
On 23 December 1999, the Court of Appeals rendered a consolidated
Decision, the dispositive portion of which reads:
WHEREFORE, the Company's Petition in CA-G.R. SP No. 54227 is GRANTED.
The Secretary of Labor's Decision dated 28 May 1999 and his Resolution
dated 16 July 1999 are REVERSED and SET ASIDE insofar as they direct the
company to pay backwages and grant financial assistance to the striking
workers. The said Decision and Resolution are AFFIRMED in all other
respects. The Union's Petitions in CA-G.R. SP No. 54665 is DISMISSED.
(Emphasis supplied)
The subsequent Motion for Reconsideration filed by the Union was denied in
a Resolution dated 19 April 2000.
The abovementioned denial of the Petition for Certiorari and the subsequent
Motion for Reconsideration brought about the filing of G.R. No. 143013-14 by
the Union.
On 18 December 2000, the Court rendered a Decision[5] in G.R. No. 143013-
14, viz:
WHEREFORE, the petition is DISMISSED. The appealed Decision dated
December 23, 1999 and the Resolution dated April 19, 2000 of the public
respondent Court of Appeals are AFFIRMED. No costs.
In confirming the illegality of the strike conducted by the Union, the Court
held that "[t]he moment the Secretary of Labor assumes jurisdiction over a
labor dispute in an industry indispensable to national interest, such
assumption shall have the effect of automatically enjoining the intended or
impending strike. . . . The mere issuance of an assumption order by the
Secretary of Labor automatically carries with it a return-to-work order, even
if the directive to return to work is not expressly stated in the assumption
order….”
"We have held in a number of cases that defiance to the assumption and
Return-to-Work Orders of the Secretary of Labor and Employment after he
has assumed jurisdiction is a valid ground for loss of the employment status
of any striking union officer or member."
With respect to the petitioner Union's claims of backwages and
financial assistance, the Court adopted the ratiocination of the
Court of Appeals in its assailed Decision as it was found to be in
accord with law and settled jurisprudence, viz:
On the issue of the award of backwages and financial assistance
to the striking workers, the well-entrenched doctrine is that it is
only when there is a finding of illegal dismissal that backwages
are granted . . ., and financial assistance or separation pay
allowed ....
Since as correctly found by the Secretary of Labor, the strikers were not
illegally dismissed, the COMPANY is under no obligation to pay backwages to
them. It is simply inconsistent, nay, absurd, to award backwages when there
is no finding of illegal dismissal . . . when the record shows that the striking
workers did not comply with lawful orders for them to return to work during
28
said periods of time. In fact, the Secretary of Labor observed that while "it
was obligatory on the part of both parties to restore, in the meantime, the
status quo obtaining in the workplace, " the same "was not possible
considering the strikers had defied the return-to-work Order of this Office"
(p. 8, Ibid.). With such blatant disregard by the strikers of official edicts
ordering their "temporary reinstatement," there is no basis to award them
backwages corresponding to said time frames. Otherwise, they will recover
something they have not or could not have earned by their willful defiance of
the return-to-work order, a patently incongruous and unjust situation
(Santos v. National Labor Relations Commission, 154SCRA166).
The same view holds with respect to the award of financial assistance or
separation pay. . . ."
The abovequoted Decision of the Court became final and executory on 31
May 2001, when it was entered in the Book of Entries of Judgment.
Meanwhile, as earlier mentioned, the Court had been deluged with letters
and motions/pleadings, all seeking the execution of the Court's consolidated
Decision in G.R. No. 122743 and No. 127215.
In response to the said pleadings and letters, the Company filed an
Opposition dated 09 January 2004. According to the Company, the issue
concerning the alleged entitlement to backwages of the members of
petitioner Union had already been passed upon and denied by the Court in
the Decision dated 18 December 2000, in G.R. No. 143013-14.
The ruling of the Court:
The consolidated Decision of the Court dated 12 December 1997, in G.R. No.
122743 and No. 127215 to the effect that the exclusion of union officers,
shop stewards and those with pending criminal charges from the directive to
the Company (to accept back the striking workers without first determining
whether said excluded personalities committed illegal acts) would be
tantamount to dismissal without due process of law, thus, the Company was
ordered to accept back immediately all striking workers, has been
superseded by the pronouncement of the Court in the Decision dated 18
December 2000, in G.R. No. 143013-14 where we held that the striking
workers openly and willfully defied the Assumption and Return-to-Work
Orders issued by the Secretary of Labor and Employment, accordingly, it is a
valid ground for terminating their employment status; since the striking
Union members were not illegally dismissed, the Company is under no
obligation to pay backwages and financial assistance to them.
The Union wrongly contends that the Court's Decision in G.R. No. 122743,
ordering the Company to immediately reinstate the striking employees, is the
law of the case between the Union and the Company.
"By 'law of the case' is meant that whatever is once irrevocably established
as the controlling legal rule or decision between the same parties in the
same case continues to be the law of the case so long as the facts on which
such decision was predicated continue to be facts of the case before the
court."[6] (Emphasis supplied) This is but elementary, to say the least. The
Union overlooked the fact that said decision was made pending resolution of
the legality of the strike.
The consolidated decision in G.R. No. 122743 and No. 127215 was based on
the premise that the assailed order[7] of the Secretary of Labor and
Employment was issued pending resolution by said Secretary of Labor and
Employment of the legality of the strike. In the latter case, G.R. No. 143013-
14, the Secretary of Labor and Employment had already resolved the legality
of the concerted actions of the striking employees. It is on this supervening
fact that the Court based its decree.
By affirming the finding of illegality of the strike conducted by the Union
members in G.R. No. 143013-14, the Court wrote finis to the protracted labor
dispute. The striking employees were, thus, considered validly separated
from their employment with the Company. Moreover, the Court ruled that
the striking employees were neither entitled to backwages nor financial
assistance.
And, contrary to the Union's position, while it may be conceded that a court
cannot refuse to issue a writ of execution upon a final and executory
judgment,[8] however, certain facts and circumstances, i.e., the finding of
illegality in the strike conducted in 1995, that transpired after the judgment
became final, rendered the execution of the Court's consolidated Decision in
G.R. No. 122743 and No. 127215 moot. As earlier stated, the finding by the
then Secretary of Labor and Employment that the strike was illegal, was a
29
supervening event that rendered nugatory the execution of the consolidated
decision in G.R. No. 122743 and No. 127215. Besides, as previously stated,
the assailed Order dated 27 October 1997 was very clear in that it was
issued pending the resolution of the issues involving the legality of the strike.
Furthermore, it is worth noting that the consolidated petitions (G.R. No.
122743 and No. 127215) dealt only with three (3) issues, namely, whether
or not then Acting Secretary of Labor and Employment gravely abused his
discretion in:
(1) excluding Union officers, shop stewards and those with pending criminal
charges in his order to the Company to accept back the striking workers;
(2) issuing a writ of execution pending resolution of a related petition for
certiorari before this Court; and
(3) holding that complaints lodged before the police authorities before 27
October 1995 and subsequently filed with the provincial prosecutor after 27
October 1995 are not within the ambit of the phrase "with pending criminal
charges."
Nowhere in the said Decision were the issues of backwages and other
monetary claims ever raised. It, therefore, cannot be said that when the
Court ruled on G.R. No. 143013-14, we were not unaware of the earlier
consolidated Decision pertaining to the same parties. All antecedents were
considered in disposing of the issues.
Undoubtedly, any and all issues concerning the execution of G.R. No.
122743, as well as the Union's claim for any monetary judgment, i.e.,
backwages and financial assistance, have been rendered otiose and nugatory
by the verdict in G.R. No. 143013-14 that the strike conducted by the
members of the Union was illegal.
In fine, there is nothing in G.R. No. 122743 that still needs to be resolved.
WHEREFORE, the Court DENIES all the motions contained in the letters of
the striking employees, as well as the "Rejoinder and Motion to Immediately
Resolve the Letter of Lydia Delos Santos Received by this Court More than
Two (2) Years Ago and to Direct the Secretary of DOLE To Enforce the 12
December 1997 Court's Decision dated 25 August 2003," and the "Urgent
Motion for Early Resolution" for utter lack of merit. No further pleadings will
be entertained in this case. This case is now deemed closed and terminated.
188. PNOC DOCKYARD AND ENGINEERING CORPORATION,
petitioner,
vs.
THE HONORABLE NATIONAL LABOR RELATIONS COMMISSION,
BATAAN REFINERS UNION OF THE PHILIPPINES (BRUP), PNOC-
COAL CORPORATION EMPLOYEES' ASSOCIATION (PCC-ELU),
KAPISANAN NG MALAYANG MAGGAGAWA-PNOC DOCKYARD AND
ENGINEERING CORPORATION (KMM-PDEC), PNOC SHIPPING AND
TRANSPORT CORPORATION EMPLOYEES' ASSOCIATION (PSTCEA),
ERNESTO M. ESTRELLA, FELIMON PAGLINAWAN, RUFINO ANDAYA,
GENEROSO MERCADO, JOHNNY CLARIANES and LEO ORRICA,
respondents.
The Facts
The solicitor general exhaustively presents their factual antecedents of the
case: 6
1. On November 22, 1991, private respondent [Kapisanan ng Malayang
Manggagawa-PNOC Dockyard & Engineering Corporation (KMM-PDEC)],
among unions namely: Bataan Refiners Union of the Philippines (BRUP);
PNOC-Energy Development Employees' Association (PEDEA); PNOC-Coal
Corporation Employees' Association (PCC-ELU); and PNOC-Shipping &
Transport Corp. [Employees' Association] (PSTCEA), filed with the
Department of Labor and Employment (DOLE) a notice of strike against Phil.
National Oil Company (PNOC) and Monico Jacob as President/Chairman, on
the ground of discrimination constituting unfair labor practice (p. 2, NLRC
Decision dated August 12, 1993). The dispute arose from the grant [by]
petitioner and PNOC [of] the amount of P2,500.00 increase in monthly
salaries to Managerial, Professionals and Technical Employees (MPT) but not
to Non-Managerial, Professional and Technical Employees (NMPT).
30
2. On December 13, 1991, Acting Secretary Nieves Confesor certified the
dispute subject of the notice of strike to the National Labor Relations
Commission (NLRC) for compulsory arbitration.
3. The aforequoted Order however was not served to the respondent union's
President, Felimon Paglinawan, who is authorized to receive notices. Wilfredo
Rojo, the process server of DOLE merely left the Order with the guard on
duty at the gate of the premises which is a distance away from the union
office (pp. 10-11, Position Paper of respondent union, Records).
4. In the morning of December 18, 1991, the day when respondent union
was poised to strike, its officers and members decided to report for work but
petitioner thru its Operations Manager, Nemesio Guillermo, padlocked the
gate and refused entry to the employees. Some officers and members of
respondent union were able to enter the premises of petitioner and punch-in
their timecards; however, they were immediately escorted back outside (pp.
4, 12, & 13, Position Paper of respondent union and its Annexes "E-1" to "E-
4", Records; pp. 13-14, NLRC Decision dated Aug. 12, 1993).
5. On December 19, 1991, Acting Labor Secretary Nieves Confesor issued a
return to work order
6. On December 20, 1991, respondent union thru its President, Felimon
Paglinawan filed before the NLRC Arbitration Branch, Region IV, a complaint
against petitioner for Illegal Lock-out (Complaint dated December 20, 1991,
Records).
7. On December 23, 1991, all members of the private respondent union
reported and were accepted back to work (p. 5, NLRC Decision dated August
12, 1993).
8. Subsequently, petitioner filed before the DOLE a petition to declare the
strike illegal with a motion to cite the striking workers in contempt for
defying the DOLE Orders (p. 4, Position Paper of Petitioner, Records).
Respondent union on the other hand filed a Motion to Dismiss the petition
(p. 4, Position Paper for Respondent, Records).
9. On March 3, 1992, Felimon Paglinawan, Leo O. Orrica, Johnny Clariones
and Generoso Mercado, Jr., the President, Secretary, Auditor and Treasurer
of the respondent union, respectively, after due notice and investigation,
were dismissed by petitioner from their employment on the ground, among
others of their participation in the work stoppage on December 18 to 21,
1991 (p. 4, Position Paper of Respondent, Records).
10. On March 9, 1992, the aforementioned dismissed union officers filed
before the NLRC a complaint for illegal dismissal. The cases were
consolidated and in [the herein challenged] Decision dated August 12, 1993,
public respondent ordered the reinstatement of the dismissed officers of
private respondent union
The parties filed their respective motions for reconsideration. In its
December 9, 1994 Decision, the NLRC modified its earlier disposition and
ordered herein petitioner to pay its separated employees severance benefit
equivalent to "two months for every year of service" in accordance with the
company's established business practice. The separate motions of PNOC and
its subsidiaries were all denied.
7
Hence, this recourse filed by the PNOC Dockyard and Engineering
Corporation. 8
Issues
Petition submits the following grounds for its petition:
I. Respondent NLRC committed a grave abuse of discretion in not holding
that KMM-PDEC and its officers are not guilty of illegal strike notwithstanding
the provisions of Section 4, Rule XIII of the Omnibus Rules implementing the
Labor Code and overwhelming evidence of their guilt.
II. Respondent NLRC committee a grave abuse of discretion in not finding
the termination of respondent KMM-PDEC union officers, who led the illegal
strike, as legal and for just cause as clearly shown by overwhelming
evidence.
III. Respondent NLRC committed a grave abuse of discretion in not finding
that petitioner is entitled to the award of damages. 9
The Court's Ruling
The arguments of petitioner do not persuade us. We find no grave abuse of
discretion committed by the NLRC in its two challenged Decisions.
31
 First Issue:
The Strike Was Legal
In resolving that the strike was legal, the labor tribunal took note of the
following facts: (1) the notice of strike was filed only after the union
members lost hope for the redress of their grievance arising from their
exclusion from the P2,500 salary increase; (2) the union members honesty
believed that they were discriminated against, since the company practice in
the past was to grant salary increases to all employees regardless of whether
they were MPTs (managerial, professional, and technical employees) or
NMPTs (non-managerial, professional, and technical employees); (3) such
discriminatory grant appeared to be an unfair labor practice intended to
discourage union membership, since MPTs were non-union members; and
(4) the labor unions complied with the legal requirements before going on
strike, such as the members' strike vote by secret ballot, the submission of
the results thereof to the National Conciliation and Meditation Board (NCMB),
the filing of a notice to strike and the observance of the 15-day cooling-off
period. Respondent Commission opined that the unions had a reason to
regard the salary discrimination, believed to discourage membership in the
labor organization, as an unfair labor practice prohibited by Article 248 (e) 12
of the Labor Code.
Thus, although rejecting that PNOC and its subsidiaries were guilty of
discrimination, the NLRC reiterated the policy enunciated in several labor
cases "that a strike does not automatically carry the stigma of illegality even
if no unfair labor practice were committed by the employer. It suffices if such
a belief in good faith is entertained by labor as the inducing factor for
staging a strike." 13 Indeed, the presumption of legality prevails even if the
allegation of unfair labor practice is subsequently found to be untrue, 14
provided that the union and its members believed in good faith in the truth
of such averment.
As to the alleged violation of the strike prohibition in their CBA, the NLRC
held that there should be no automatic verdict of illegality on the strike
conducted.
The NLRC noted further that the strike was peaceful and orderly, unmarred
by any form of violence or untoward incident.
As to the alleged transgression by respondent unions of Section 4, Rule XIII
of the Omnibus Rules Implementing the Labor Code, we agree with
Respondent Commission that there actually was substantial compliance
thereof. The aforesaid provision reads:
Sec. 4 Contents of notice. — The notice shall state, among other, the names
and addresses of the employers and the union involved, the nature of the
industry to which the employer belongs, the number of union members and
of the workers in the bargaining unit, and such other relevant data as may
facilitate the settlement of the dispute, such as a brief statement or
enumeration of all pending labor dispute involving the same parties.
In cases of bargaining deadlocks, the notice shall, as far as practicable,
further state the unresolved issues in the bargaining negotiations and be
accompanied by the written proposals of the union, the counter-proposals of
the employer and the proof of a request for conference to settle the
differences. In cases of unfair labor practices, the notice shall, as far as
practicable, state the acts complained of and the efforts taken to resolve the
dispute amicably.
Any notice which does not conform with the requirements of this and the
foregoing sections shall be deemed as not having been filed and the party
concerned shall be so informed by the regional branch of the Board.
Petitioner argues that the notice of strike was invalid, since (1) it erroneously
named PNOC as the employer, which is actually a corporate entity separate
and distinct from petitioner; (2) it did not indicate the specific acts which
respondent union considered as unfair labor practices; and (3) there was no
reasonable attempt or effort on the part of respondent union to amicably
settle the alleged labor dispute.
The NLRC ruled, and we agree, that respondent union merely committed an
honest mistake, because it appears on record that PNOC has the same set of
corporate officers as petitioner; 16 and matters as to wages and other official
policies all emanated from PNOC, the mother company. The unrebutted
testimony of Leo O. Orrica further attests to the fact that the employees
concerned repeatedly brought to the attention of the management the
discriminatory grant of salary increase, but the latter failed to address the
grievance of the NMPTs or to satisfactorily explain such grant to MPTs only,
except to say that it was management's prerogative. 17
32
Lastly, we agree with the solicitor general that, under the circumstances,
there was sufficient indication of the nature and cause of the labor dispute
subject of the notice of strike — unfair labor practice in the form of
discrimination. The unions merely filled out the standard form furnished for
the purpose by the Department of Labor and Employment, and they were
indeed not expected to write in detail the history of their dispute. By
supplying the information required in the DOLE form and submitting the
other explicitly required documents, respondent unions have substantially
complied with the law.
In addition, we disagree with petitioner's contention that the strike became
automatically illegal upon the labor secretary's certification of the dispute to
the NLRC for compulsory arbitration. Basic is the rule that no order, decision
or resolution — not even one that is "immediately executory" — is binding
and automatically executory unless and until the proper parties are duly
notified thereof. 20 The labor Code specifically enjoins that decisions, orders
or awards of the labor secretary, the regional director, the NLRC or the labor
arbiter are "to [be] separately furnish[ed] immediately [to] the counsels of
record and the parties . . . ." 21 This means that in labor cases, both the
party and its counsel must be duly served their separate copies of the order,
decision or resolution; unlike in ordinary judicial proceedings where notice to
counsel is deemed notice to the party. 22
Private respondent precisely impugn the validity of the service of the DOLE
certification order dated December 13, 191. They maintain that said order
was not validly served on them, since their supposed copy was left only with
a security guard at the gate of the office premises of the union. Allegedly, no
effort was made to serve the same to an authorized person inside their
office. The service of the order upon counsel for the umbrella union FUEL-
GAS should not be deemed a valid service upon Respondent KMM-PDEC,
which had its own counsel of record, Atty. Tomas Caspe, who appeared
before the NCMB. Besides, the law requires service to both the counsel and
the parties. It has also been previously held that service to a security guard
of the building where the principal holds office is not a valid service. 23
Nevertheless, upon verified information of the existence of the certification
order, members of respondent labor unions promptly ended their strike and
returned to their jobs.
All in all, we find that the conclusions of Respondent NLRC on the legality of
the strike are in accordance with law and jurisprudence. Petitioner has failed
to show grave abuse of discretion amounting to lack or excess of jurisdiction
on the part of the NLRC.
Second Issue:
The Dismissals Were Illegal
Having ruled that the strike staged by respondent unions was legal,
the subsequent dismissals of their officers due to their staging of said
strike cannot be countenanced.
The NLRC correctly observed that, although petitioner averred that
the dismissals of individual respondent were due to infractions of
company rules and regulations, the alleged infractions actually arose
from their participation in the strike. This is crystal clear from the
charges leveled against the union officers, such as "active
participation in the illegal work stoppage." "disruption of company
operations resulting [in] losses." "violation of the 'NO STRIKE' clause
of the existing CBA," among others, cited in their similarly worded
notices of investigation that eventually led to their dismissals.
Furthermore, such investigations conducted by petitioner were in
flagrant disregard of the authority and jurisdiction of Respondent
Commission and in defiance of the Memorandum of Agreement 24 with
the striking unions, executed upon the order of then acting Labor
Secretary Nieves R. Confesor. The issues relating to the strike and
lockout were already submitted before the NLRC through the
corresponding complaints filed by petitioner itself and private
respondents. By filing a formal complaint for illegal strike, it behooved
petitioner to desist from undertaking its own investigation on the
same matter, concluding upon the illegality of the union activity and
dismissing outright the union officers involved. The latter objected, in
fact, to the conduct of such investigations precisely due to the
pendency before the NLRC of an action based on the same grounds.
33
Instead, petitioner preempted the NLRC from ascertaining the merits
of the complaints.
Moreover, the Memorandum of Agreement, other than enjoining the
striking workers to return to work, likewise ordered the management
to "accept them under the same terms and conditions prevailing prior
to the work stoppage," and ruled that the matter of "staggered" wage
and holiday pay deductions for the strike period be discussed in the
labor-management committee (LMC). In glaring defiance, petitioner
arbitrarily undertook to change the work schedule of some employee
on the very day they resumed work, aside from deducting in full the
wages and holiday pays of the striking employees pertaining to the
strike period, even before the LMC could convene.
The actions of petitioner are clearly tainted with abuse of power and
with illegality. While we recognize the prerogative of management to
regulate all aspects of employment, the power to discipline and
terminate an employee's services may not exercised in a despotic or
whimsical manner as to erode or render meaningless the
constitutional guarantees of security of tenure and due process. 25
Time and again, we have held that the employment status of workers
cannot be trifled with, such that their constitutional and statutory
rights as well as those arising from valid agreements will, in effect, be
defeated or circumvented. No less than the Constitution itself
guarantees state protection of labor and assures workers of security
of tenure in their employment. 26
189. G.R. No. 173151 March 28, 2008
EDUARDO BUGHAW, JR., Petitioner, vs. TREASURE ISLAND
INDUSTRIAL CORPORATION, Respondent.
DECISION
Facts:
Sometime in March 1986, petitioner was employed as production worker by
respondent. Respondent was receiving information that many of its
employees were using prohibited drugs during working hours and within the
company premises.4
On 5 June 2001, one of its employees, Erlito Loberanes (Loberanes) was
caught in flagrante delicto by the police officers while in possession of shabu.
Loberanes was arrested and sent to jail. In the course of police investigation,
Loberanes admitted the commission of the crime. He implicated petitioner in
the crime by claiming that part of the money used for buying the illegal
drugs was given by the latter, and the illegal drugs purchased were for their
consumption for the rest of the month.5
In view of Loberanes’s statement, respondent, on 29 June 2001, served a
Memo for Explanation6 to petitioner requiring him to explain within 120 hours
why no disciplinary action should be imposed against him for his alleged
involvement in illegal drug activities. Petitioner was further directed to
appear at the office of respondent’s legal counsel on 16 June 2001 at 9:00
o’clock in the morning for the hearing on the matter. For the meantime,
petitioner was placed under preventive suspension for the period of 30 days
effective upon receipt of the Notice.
Notwithstanding said Memo, petitioner failed to appear before the
respondent’s legal counsel on the scheduled hearing date and to explain his
side on the matter.
On 19 July 2001, respondent, through legal counsel, sent a second letter 7 to
petitioner directing him to attend another administrative hearing scheduled
on 23 July 2001 at 11:00 o’clock in the morning at said legal counsel’s office
but petitioner once again failed to show up.
Consequently, respondent, in a third letter8 dated 21 August 2001 addressed
to petitioner, terminated the latter’s employment retroactive to 11 June 2001
for using illegal drugs within company premises during working hours, and
for refusal to attend the administrative hearing and submit written
explanation on the charges hurled against him.
34
On 20 July 2001, petitioner filed a complaint 9 for illegal dismissal against
respondent and its President, Emmanuel Ong, before the Labor Arbiter.
On 8 January 2002, the Labor Arbiter rendered a Decision 10 in favor of
petitioner since the respondent failed to present substantial evidence to
establish the charge leveled against the petitioner. The case against
respondent Emmanuel Ong is dismissed for lack of merit. 11
On appeal, the NLRC affirmed the Labor Arbiter’s Decision in its Decision
dated 28 August 2003. The NLRC decreed that respondent failed to accord
due process to petitioner when it dismissed him from employment. The use
of illegal drugs can be a valid ground for terminating employment only if it is
proven true.
The Motion for Reconsideration filed by respondent was denied by the NLRC
in a Resolution13 dated 27 February 2004.
Resolving respondent’s Petition for Certiorari, the Court of Appeals reversed
the Decisions of the Labor Arbiter and NLRC on the grounds of patent
misappreciation of evidence and misapplication of law.
Similarly ill-fated was petitioner’s Motion for Reconsideration which was
denied by the Court of Appeals in its Resolution 15 dated 8 May 2006.
Hence, this instant Petition for Review on Certiorari16 under Rule 45 of the
Revised Rules of Court filed by petitioner impugning the foregoing Court of
Appeals Decision and Resolution, and raising the sole issue of:
Issue:
WHETHER OR NOT PETITIONER WAS ILLEGALLY DISMISSED FROM
EMPLOYMENT.
Ruling:
Under the Labor Code, the requirements for the lawful dismissal of an
employee are two-fold, the substantive and the procedural aspects. Not only
must the dismissal be for a just21 or authorized cause,22 the rudimentary
requirements of due process - notice and hearing 23 – must, likewise, be
observed before an employee may be dismissed. Without the concurrence of
the two, the termination would, in the eyes of the law, be illegal, 24 for
employment is a property right of which one cannot be deprived of without
due process.25
Hence, the two (2) facets of a valid termination of employment
are: (a) the legality of the act of dismissal, i.e., the dismissal
must be under any of the just causes provided under Article 282
of the Labor Code; and (b) the legality of the manner of
dismissal, which means that there must be observance of the
requirements of due process, otherwise known as the two-notice
rule.26
Article 282 of the Labor Code enumerates the just causes for
terminating the services of an employee:
ART. 282. Termination by employer. - An employer may
terminate an employment for any of the following causes:
(a) Serious misconduct or willful disobedience by the employee
of the lawful orders of his employer or representative in
connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed
in him by his employer or his duly authorized representative;
(d) Commission of a crime or offense by the employee against
the person of his employer or any immediate member of his
family or his duly authorized representative; and
(e) Other causes analogous to the foregoing.
The charge of drug abuse inside the company’s premises and during working
hours against petitioner constitutes serious misconduct, which is one of the
just causes for termination. Misconduct is improper or wrong conduct. It is
the transgression of some established and definite rule of action, a forbidden
act, a dereliction of duty, willful in character, and implies wrongful intent and
35
not merely an error in judgment. The misconduct to be serious within the
meaning of the Act must be of such a grave and aggravated character and
not merely trivial or unimportant. Such misconduct, however serious, must
nevertheless, in connection with the work of the employee, constitute just
cause for his separation.27 This Court took judicial notice of scientific findings
that drug abuse can damage the mental faculties of the user. It is beyond
question therefore that any employee under the influence of drugs cannot
possibly continue doing his duties without posing a serious threat to the lives
and property of his co-workers and even his employer.
Loberanes’s statements given to police during investigation is evidence which
can be considered by the respondent against the petitioner. Petitioner failed
to controvert Loberanes’ claim that he too was using illegal drugs. Records
reveal that respondent gave petitioner a first notice dated 11 June 2001,
giving him 120 hours within which to explain and defend himself from the
charge against him and to attend the administrative hearing scheduled on 16
June 2001. There is no dispute that petitioner received said notice as
evidenced by his signature appearing on the lower left portion of a copy
thereof together with the date and time of his receipt. 28 He also admitted
receipt of the first notice in his Memorandum before this Court. 29 Despite his
receipt of the notice, however, petitioner did not submit any written
explanation on the charge against him, even after the lapse of the 120-day
period given him. Neither did petitioner appear in the scheduled
administrative hearing to personally present his side. Thus, the respondent
cannot be faulted for considering only the evidence at hand, which was
Loberanes’ statement, and conclude therefrom that there was just cause for
petitioner’s termination.
In administrative proceedings, technical rules of procedure and evidence are
not strictly applied and administrative due process cannot be fully equated
with due process in its strict judicial sense. Xxx It is sufficient that [herein
petitioner] was implicated in the use of illegal drugs and, more importantly,
there is no counter-statement from [herein petitioner] despite opportunities
granted to him submit to an investigation.30
It was by petitioner’s own omission and inaction that he was not able to
present evidence to refute the charge against him.
Now we proceed to judge whether the manner of petitioner’s dismissal was
legal; stated otherwise, whether petitioner was accorded procedural due
process.
In Pastor Austria v. National Labor Relations Commission, 31 the Court
underscored the significance of the two-notice rule in dismissing an
employee:
The first notice, which may be considered as the proper charge, serves to
apprise the employee of the particular acts or omissions for which his
dismissal is sought. The second notice on the other hand seeks to inform the
employee of the employer’s decision to dismiss him. This decision, however,
must come only after the employee is given a reasonable period from receipt
of the first notice within which to answer the charge and ample opportunity
to be heard and defend himself with the assistance of a representative if he
so desires. This is in consonance with the express provision of the law on the
protection to labor and the broader dictates of procedural due process. Non-
compliance therewith is fatal because these requirements are conditions sine
qua non before dismissal may be validly effected. (Emphases supplied.)
While there is no dispute that respondent fully complied with the first-notice
requirement apprising petitioner of the cause of his impending termination
and giving him the opportunity to explain his side, we find that it failed to
satisfy the need for a second notice informing petitioner that he was being
dismissed from employment.
We cannot give credence to respondent’s allegation that the petitioner
refused to receive the third letter dated 21 August 2001 which served as the
notice of termination. There is nothing on record that would indicate that
respondent even attempted to serve or tender the notice of termination to
petitioner.1avvphi1 No affidavit of service was appended to the said notice
attesting to the reason for failure of service upon its intended recipient.
Neither was there any note to that effect by the server written on the notice
itself.
The law mandates that it is incumbent upon the employer to prove the
validity of the termination of employment. 32 Failure to discharge this
evidentiary burden would necessarily mean that the dismissal was not
justified and, therefore, illegal.33 Unsubstantiated claims as to alleged
compliance with the mandatory provisions of law cannot be favored by this
36
Court. In case of doubt, such cases should be resolved in favor of labor,
pursuant to the social justice policy of our labor laws and Constitution. 34
The burden therefore is on respondent to present clear and unmistakable
proof that petitioner was duly served a copy of the notice of termination but
he refused receipt. Bare and vague allegations as to the manner of service
and the circumstances surrounding the same would not suffice. A mere copy
of the notice of termination allegedly sent by respondent to petitioner,
without proof of receipt, or in the very least, actual service thereof upon
petitioner, does not constitute substantial evidence. It was unilaterally
prepared by the petitioner and, thus, evidently self-serving and insufficient to
convince even an unreasonable mind.
We cannot overemphasize the importance of the requirement on the notice
of termination, for we have ruled in a number of cases 35 that non-compliance
therewith is tantamount to deprivation of the employee’s right to due
process.
The violation of the petitioners’ right to statutory due process by the private
respondent warrants the payment of indemnity in the form of nominal
damages. The amount of such damages is addressed to the sound discretion
of the court, taking into account the relevant circumstances…. We believe
this form of damages would serve to deter employers from future violations
of the statutory due process rights of employees. At the very least, it
provides a vindication or recognition of this fundamental right granted to the
latter under the Labor Code and its Implementing Rules.37
The above ruling was further clarified in Jaka Food Processing Corporation v.
Pacot.38
In Jaka, the employees were terminated because the corporation was
financially distressed. However, the employer failed to comply with Article
283 of the Labor Code which requires the employer to serve a written notice
upon the employees and the Department of Labor and Employment (DOLE)
at least one month before the intended date of termination. We first
distinguished the case from Agabon, to wit:
The difference between Agabon and the instant case is that in the former,
the dismissal was based on a just cause under Article 282 of the Labor Code
while in the present case, respondents were dismissed due to retrenchment,
which is one of the authorized causes under Article 283 of the same Code.
xxxx
A dismissal for just cause under Article 282 implies that the employee
concerned has committed, or is guilty of, some violation against the
employer, i.e., the employee has committed some serious misconduct, is
guilty of some fraud against the employer, or, as in Agabon, he has
neglected his duties. Thus, it can be said that the employee himself initiated
the dismissal process.
On another breath, a dismissal for an authorized cause under Article 283
does not necessarily imply delinquency or culpability on the part of the
employee. Instead, the dismissal process is initiated by the employer’s
exercise of his management prerogative, i.e., when the employer opts to
install labor saving devices, when he decides to cease business operations or
when, as in this case, he undertakes to implement a retrenchment
program.39
Then we elucidated on our ruling in Agabon in this wise:
Accordingly, it is wise to hold that: (1) if the dismissal is based on a just
cause under Article 282 but the employer failed to comply with the notice
requirement, the sanction to be imposed upon him should be tempered
because the dismissal process was, in effect, initiated by an act imputable to
the employee; and (2) if the dismissal is based on an authorized cause under
Article 283 but the employer failed to comply with the notice requirement,
the sanction should be stiffer because the dismissal process was initiated by
the employer’s exercise of his management prerogative. 40
The Agabon doctrine enunciates the rule that if the dismissal was for just
cause but procedural due process was not observed, the dismissal should be
upheld. Where the dismissal is for just cause, as in the instant case, the lack
of statutory due process should not nullify the dismissal or render it illegal or
ineffectual. However, the employer should indemnify the employee for the
violation of his right to procedural due process. The indemnity to be imposed
should be stiffer to discourage the abhorrent practice of "dismiss now, pay
later," which we sought to deter in the Serrano 41 ruling. In Agabon 42 the
nominal damages awarded was ₱30,000.00.
37

190. JAKA FOOD vs. PACOT et al
DECEMBER 19, 2016 ~ VBDIAZ
TOPIC: FAILURE TO COMPLY
G.R. No. 151378
March 28, 2005
FACTS: Respondents Pacot et al were earlier hired by petitioner JAKA Foods
Processing Corporation until the latter terminated their employment because
the corporation was “in dire financial straits”. It is not disputed, however,
that the termination was effected without JAKA complying with the
requirement under Article 283 of the Labor Code regarding the service of a
written notice upon the employees and the DOLE at least 1 month before the
intended date of termination.
In time, respondents separately filed with the regional Arbitration Branch of
the NLRC complaints for illegal dismissal, underpayment of wages and
nonpayment of SIL and 13th month pay against JAKA and its HRD Manager.
ISSUE: is the dismissal valid, because of non-compliance with the notice
requirement?
HELD:the dismissal is legal, but employer should pay nominal
damages for non-compliance witht the notice requirement
In the case of Agabon vs. NLRC, the court had the opportunity
to resolve a similar question. Therein, we found that the
employees committed a grave offense, i.e., abandonment,
which is a form of a neglect of duty which, in turn, is one of the
just causes enumerated under Article 282 of the Labor Code. In
said case, we upheld the validity of the dismissal despite non-
compliance with the notice requirement of the Labor Code.
However, we required the employer to pay the dismissed
employees nominal damages for non-compliance with statutory
due process.
**
The difference between Agabon and the instant case is that in
the former, the dismissal was based on a just cause under
Article 282 of the Labor Code while in the present case,
respondents were dismissed due to retrenchment, which is one
of the authorized causes under Article 283 of the same Code.
A dismissal for just cause under Article 282 implies that the
employee concerned has committed, or is guilty of, some
violation against the employer, i.e. the employee has committed
some serious misconduct, is guilty of some fraud against the
employer, or, as in Agabon, he has neglected his duties. Thus,
it can be said that the employee himself initiated the dismissal
process.
On another breath, a dismissal for an authorized cause under
Article 283 does not necessarily imply delinquency or culpability
on the part of the employee. Instead, the dismissal process is
initiated by the employer’s exercise of his management
prerogative, i.e. when the employer opts to install labor saving
devices, when he decides to cease business operations or when,
as in this case, he undertakes to implement a retrenchment
program.
Accordingly, it is wise to hold that: (1) if the dismissal is based on a just
cause under Article 282 but the employer failed to comply with the notice
requirement, the sanction to be imposed upon him should be tempered
because the dismissal process was, in effect, initiated by an act imputable to
the employee; and (2) if the dismissal is based on an authorized cause under
Article 283 but the employer failed to comply with the notice requirement,
38
the sanction should be stiffer because the dismissal process was initiated by
the employer’s exercise of his management prerogative.
The records before us reveal that, indeed, JAKA was suffering from serious
business losses at the time it terminated respondents’ employment.
**
The clear-cut distinction between a dismissal for just cause under Article 282
and a dismissal for authorized cause under Article 283 is further reinforced
by the fact that in the first, payment of separation pay, as a rule, is not
required, while in the second, the law requires payment of separation pay.
We find the CA to have been in error when it ordered JAKA to pay
respondents separation pay equivalent to 1 month salary for every year of
service. This is because in Reahs Corporation vs. NLRC, we made the
following declaration:
“The rule, therefore, is that in all cases of business closure or cessation of
operation or undertaking of the employer, the affected employee is entitled
to separation pay. This is consistent with the state policy of treating labor as
a primary social economic force, affording full protection to its rights as well
as its welfare. The exception is when the closure of business or cessation of
operations is due to serious business losses or financial reverses; duly
proved, in which case, the right of affected employees to separation pay is
lost for obvious reasons. xxx”
191. Standard Electric Manufacturing Corp, Standard Electric
Employer Union      
FACTS:
Rogelio Javier was employed by the Standard Electric Manufacturing
Corporation (SEMC) as radial spot machine operator in its Production
Department.  Javier was a member of the Standard Electric Employees
Union-NAFLU (Union).
          On July 31, 1995, Javier failed to report for work.  He failed to notify
the SEMC of the reason for his absences.  On August 9, 1995, he was
arrested and detained for the charge of rape upon complaint of his neighbor,
Genalyn Barotilla.  After the requisite preliminary investigation, Information
for rape was filed against respondent.
Petitioners received a letter from Javier, through counsel, informing
the SEMC that Javier was detained for the charge of rape and for that reason
failed to report for work.  He requested the SEMC to defer the
implementation of its intention to dismiss him. The SEMC denied Javier’s
request and issued a Memorandum terminating his employment for (a)
having been absent without leave (AWOL) for more than fifteen days
from July 31, 1995; and (b) for committing rape. The RTC issued an Order
his release from jail.  Shortly thereafter, Javier reported for work, but the
SEMC refused to accept him back.
          A grievance meeting between the Union, Javier and the SEMC was
held, but SEMC refused to re-admit Javier. The Union and Javier filed a
Complaint for illegal dismissal against the SEMC before the NLRC.  He
averred that since the reason for his detention for rape was non-existent, the
termination of his employment was illegal.  For its part, the SEMC averred
that Javier’s prolonged absences caused irreparable damages to its orderly
operation; he had to be replaced so that the continuity and flow of
production would not be jeopardized.  It could not afford to wait for Javier’s
indefinite return from detention, if at all.  The SEMC insisted that
conformably with its Rules and Regulations, it was justified in dismissing
Javier for being absent without leave for fifteen days or so.
 
On January 14, 1997, the Labor Arbiter rendered judgment ordering
the dismissal of the complaint.  The Labor Arbiter ruled that the complaint
was within the exclusive jurisdiction of the Voluntary Arbitrators or Panel of
Arbitrators.  On appeal, the NLRC reversed the Labor Arbiter’s decision and
ruled that the latter had jurisdiction over the complaint; it thus ordered the
remand of the case to the Labor Arbiter for resolution on the merits.
39
 The Labor Arbiter rendered judgment ordering the dismissal of the
complaint. However, the SEMC was ordered to pay separation pay to the
complainant.  On appeal, the NLRC affirmed the Labor Arbiter’s ruling. The
CA reversed the findings of the Labor Arbiter and the NLRC. It declared that
it was not Javier’s intention to abandon his job; his incarceration reasonably
justified his failure to report for work and negated the theory that he was on
AWOL.  Likewise, the CA held that Javier could not be terminated on the
ground of commission of a crime, as when he was acquitted of the rape
charges, the second ground relied upon by the  It bears stressing that for a dismissal to be validly effected, the
SEMC ceased to have factual basis. Hence, despite the fact that Javier was
allegedly afforded the opportunity to explain his side, the same was
unnecessary since, in the first place, there was no just or authorized cause
for the dismissal.
ISSUE:
Whether or not Rogelio Javier is entitled to reinstatement and full back
wages as held by the CA
HELD/Ratio:
The petitioner’s contentions are wrong.
The petitioner maintains that the mere filing of the Information for the crime
of rape against respondent Javier rendered its Rules and Regulations
operational, particularly Serious Offense No. 7.  It avers that substantial
proof, not clear and convincing evidence or proof beyond reasonable doubt,
is sufficient basis for the imposition of any disciplinary action over an erring
employee.
Respondent Javier was dismissed by the petitioner effective February 5,
1996 for (a) being AWOL from July 31, 1995 up toJanuary 30, 1996; and (b)
committing rape.  Respondent Javier was acquitted of the charge.  With
respondent Javier’s acquittal, the cause of his dismissal from his employment
turned out to be non-existent.
The petitioner acted with precipitate haste in terminating respondent
Javier’s employment on January 30, 1996, on the ground that he had raped
the complainant therein.  Respondent Javier had yet to be tried for the said
charge.  In fine, the petitioner prejudged him, and preempted the ruling of
the RTC.  The petitioner had, in effect, adjudged respondent Javier guilty
without due process of law.  While it may be true that after the preliminary
investigation of the complaint, probable cause for rape was found and
respondent Javier had to be detained, these cannot be made as legal bases
for the immediate termination of his employment.
twin requirements of due process – notice and hearing – must
be observed. In dismissing an employee, an employer has the
burden of proving that the former worker has been served two
notices: (1) one to apprise him of the particular acts or
omissions for which his dismissal is sought; and (2) the other to
inform him of his employer’s decision to dismiss him.  As to the
requirement of a hearing, the essence of due process lies in an
opportunity to be heard, and not always and indispensably in an
actual hearing.
Respondent Javier is not entitled to any salary during the
period of his detention.  His entitlement to full back wages
commenced from the time the petitioner refused his
reinstatement.  In the instant case, when respondent Javier was
freed on May 24, 1996 by virtue of the judgment of acquittal
dated May 17, 1996, he immediately proceeded to the petitioner
but was not accepted back to work; hence, the reckoning point
for the grant of back wages started.
LABOR CASE: Employee was dismissed because of the missing stocks and
merchandise.
192. G.R. No. 107721 January 10, 1994
40
CHRISTOPHER MAÑEBO, petitioner, vs. NATIONAL LABOR
RELATIONS COMMISSION and TRITRAN and/or MICHAEL
TRINIDAD, respondents.
DAVIDE, JR., J.:
The antecedent facts are sufficiently and faithfully summarized in the
Comment of the Office of the Solicitor General:
Petitioner Christopher Mañebo was hired in 1980 as a bus conductor by RJM
Bus Co. before it became TRITRAN Bus Co. In 1987, he was appointed as
the bus company's comptroller in Biñan, Laguna. He was active in union
activities, occupying the position of Chief Shop Steward and representing
union members in the grievance machinery committee hearings ( Ibid, p.
184; Annex B of Annex D, Petition).
Sometime in June 1990, respondent bus company served on petitioner notice
dismissing him from the service for serious misconduct committed against
the firm's operation manager (Record, p. 106; Annex D of Annex D, Petition).
Aggrieved, petitioner appealed the matter to the grievance machinery
committee.
On June 18, 1990, the Grievance Committee, during its hearing, resolved to
remove from petitioner's 201 file the record of termination. It directed
petitioner to report to the Personnel Office the following day for assignment
(Ibid, p. 107; Annex A of Annex D, Petition). On June 19, 1990, the bus
firm's Personnel Assistant, Rodolfo C. Lopez reinstated petitioner to his
former work (Ibid, p. 108; Annex A).
on June 21, 1990, while a scheduled Grievance Committee Hearing was
about to start, petitioner was advised by the Personnel Manager, Florencio T.
Alfonso, Jr. to see that same day the company president at his Caloocan
office. Petitioner failed to follow instructions considering that he was then
attending, as representative of the union workers,
The following day, June 22, 1990, the Personnel Manager issued a
memorandum requiring Mañebo to explain why he should not be dealt with
administratively "for refusing to obey the repeated instructions of the
President of the Company for conference and appropriate guidance" ( Ibid, p.
16).
On June 25, 1990, petitioner filed his explanation.
In a Decision dated July 14, 1990, respondent bus company dismissed
petitioner on the ground of willful disobedience of the order of the company
president and serious misconduct committed against the bus company's
operations manager.6
Petitioner then filed on 3 January 1991 with the Arbitration Branch, Region
IV, NLRC, a complaint for unfair labor practice, illegal suspension, and illegal
dismissal with moral damages and attorney's fees against the private
respondents. The case was docketed as NLRC Case No. RB-IV-1-3564-91.
Hearings of the case were scheduled. Sometime after the petitioner had
testified on 21 May 1991, the parties agreed to submit the case for decision
after they have filed their respective memoranda. The petitioner filed his
Memorandum. However, the private respondents filed instead a
Supplemental Position Paper and Memorandum attaching thereto
documentary exhibits to establish facts and defenses neither raised nor
referred to in its Position Paper, such as alleged infractions committed by the
petitioner prior to the serious misconduct and the insubordination covered by
the decisions of 2 June 1990 and 14 July 1990, respectively, like the
falsification of his report on 19 June 1988 to make it appear that he was not
at the post at Carmona when he was not, the act of allowing passengers to
board respondent's buses without tickets on 7 July 1988, and the falsification
of the entry in his time card on 13 July 1989. No copy of the said
Supplemental Position Paper and Memorandum was furnished to the
petitioner's counsel.
On 28 August 1991, the Labor Arbiter rendered a decision dismissing the
petitioner's complaint.7
The Labor Arbiter found the respondent guilty of serious misconduct for
having purportedly hurled upon the operations manager "reproaching words"
on 17 May 1990 and of wilful disobedience for refusing to comply with the
order of the president to see the latter on 21 June 1990. The Labor Arbiter's
decision, in effect, upheld the respondent corporation's decisions of 2 June
1990 and 14 July 1990,
Petitioner seasonably appealed the decision to the NLRC. In its Decision of
31 August 1992,9 the NLRC (Third Division) affirmed the Labor Arbiter's
41
decision. A motion to reconsider the same having been denied, the petitioner
filed on 1 December 1992 the instant special civil action for certiorari.
The petitioner alleges that the respondent NLRC committed grave abuse of
discretion amounting to lack of jurisdiction when it affirmed the decision of
the Labor Arbiter which was principally based on the Supplemental Position
Paper and Memorandum submitted by the private respondents after the case
had already been deemed submitted for resolution. He states that no copy of
the Supplemental Position Paper and Memorandum was furnished to him or
his counsel, thereby depriving him of due process. He avers that the Labor
Arbiter erred in holding him liable for misconduct and in affirming the 2 June
1990 decision of the respondent corporation dismissing him from the service
for alleged misconduct committed on the operations manager when such
dismissal had already been lifted by virtue of the resolution of the Grievance
Committee wherein he was even made to report for work on 19 June 1990.
He contends that his employer denied him due process and that the decision
to terminate him was a grave and patent abuse of discretion. 10
The Office of the Solicitor General agrees with the petitioner that there was a
denial of due process with respect to the admission of the Supplemental
Position Paper and Memorandum by the Labor Arbiter. It opines, however,
that such defect was cured on appeal to the NLRC which gave him a chance
to rebut the additional evidence presented by the private respondents. It
mentions Section 2 of the NLRC Rules of Procedure which provides that the
Rules should be liberally construed to assist the parties in obtaining just,
expeditious, and inexpensive settlement of labor disputes, and the case of
Philippine Telegraph and Telephone Corp . vs. NLRC 12 which enjoins Labor
Officials to ascertain the facts of each case speedily and objectively,
eschewing technicalities of law and procedure, all in the interest of justice.
As to the issue of whether the petitioner was dismissed for just cause, the
Office of the Solicitor General states that in order that an employer may
terminate an employee on the ground of willful disobedience to the former's
orders, regulations, or instructions, it must be established that the said
orders, regulations, or instructions are (1) reasonable and lawful, (2)
sufficiently known to the employee, and (3) in connection with the duties
which the employee has been engaged to discharge. 13 In the instant case,
the private respondents have not shown that the instruction or order of the
personnel manager for the petitioner to appear before the company
president is connected with the discharge of his duty as a comptroller of the
company. More pertinently, the Office of the Solicitor General observes:
Thus, the Personnel Manager vaguely defined the purpose of the ordered
meeting as one "for conference and appropriate guidance." However, in its
Supplemental Position Paper and Memorandum (pp. 3-4), respondent
company spills the truth: it was for the purpose of providing an opportunity
for the company president who apparently objects to the Grievance
Committee['s] and the Personnel Department's separate resolutions ordering
petitioner's reinstatement to his former position, to finally approve
petitioner's reinstatement. 14
It further states that the order in question imposed an unreasonable burden
on the petitioner as it required him to travel a distance of fifty kilometers in
order to plead for the president's final approval of his reinstatement, which
was unnecessary since the 18 June 1990 Minutes of the Grievance
Committee and the 19 June 1990 Memorandum issued by TRITRAN's
Personnel Department unconditionally ordered the petitioner's reinstatement.
Issue: whether there was exist a just cause for the dismissal of the petitioner
Ruling:
We are in substantial accord with the stand of the Office of the Solicitor
General.
The company president is neither a reasonable order nor one connected with
his duties. Even a wilful disobedience thereof cannot be a valid ground for
dismissal. Article 282 of the Labor Code provides:
Art. 282. Termination by Employer — An employer may terminate an
employment for any of the following causes:
(a) Serious misconduct or wilful disobedience by the employee of the lawful
orders of his employer or representative in connection with his work ;
(emphasis supplied).
In the instant case, the private respondents have not even
endeavored to show that the directive or order pertained to the
regular duties of the petitioner as a comptroller. The purpose
42
therefor was not revealed to the petitioner. It was, as wittingly superior. Uncontradicted is the fact that at the time the
or unwittingly revealed in the Supplemental Position Paper, to petitioner received the instruction to go to the company's
provide "an opportunity for the company president who president's office in Caloocan City, he was attending as Chief
apparently objects to the Grievance Committee['s] and the Steward in a scheduled grievance committee hearing. Surely, if
Personnel Department's separate resolutions ordering petitioner was to leave for Caloocan City to see the company
19
petitioner's reinstatement," to "finally approve" the president, the union workers would have lost their voice in the
petitioner's reinstatement, which was, of course, unnecessary hearing. 2
since the reinstatement was not subject to such final approval.
It is highly plausible that the president wanted to extract from
the petitioner, as a condition to the "final approval", an apology
for his past misdeeds. This was shown in the private
respondents' Comment to the Petition thus:

We proposed that Mañebo be reemployed but subject to one

condition — that he should see the new company president for
specific instructions and to apologize for his past misdeeds. 20

The primary aim then of the directive was wholly unrelated to

193. G.R. No. 100878 December 2, 1992
the petitioner's duties. It was to extract a whimsical and
oppressive condition. It was, as well, unreasonable and ESTRELLITA AGUILAR, petitioner,
extremely difficult to comply with since the petitioner was
attending a conference of the Grievance Committee held fifty vs.

kilometers away from where he was ordered to go. It was
clearly a peremptory summons meant to put the petitioner "in
his proper place." Disobedience thereof, even if wilful, cannot
be a ground for the dismissal of the petitioner. In any event, the
petitioner's disobedience can by no means be characterized as
wilful. As correctly observed by the Office of the Solicitor
General:
[T]he record shows that petitioner's failure to abide by the
Personnel Manager's instructions to see the company president
was not by reason of any ill or perverse intention to defy his
THE HONORABLE NATIONAL LABOR RELATIONS COMMISSION
(NLRC), First Division, WACK WACK GOLF AND COUNTRY CLUB and
COL. PERFECTO V. EUGENIO, respondents.
CAMPOS, JR., J.:
Wack Wack Golf and Country Club (CLUB, for brevity) operates two (2) golf
courses known as the East Course and the West Course, runs a Clubhouse
with a restaurant and bar thereat, and maintains other sports facilities for its
one thousand three hundred ten (1,310) members at its compound along
Shaw Boulevard, Mandaluyong, Metro Manila. Col. Perfecto Eugenio is its
General Manager.

43
In the course of its operation, the CLUB employed petitioner Estrellita Aguilar
(petitioner, for brevity) for twenty three (23) years prior to her alleged
"illegal dismissal" on May 12, 1988. The last position she held was that of an
Accounting Clerk for which she received a monthly salary of Three Thousand
Two Hundred Eighty Five Pesos (P3,285.00). 1
Prior to August 1, 1986, the CLUB had been incurring continuous losses in its
restaurant and bar operations. To remedy the situation, the CLUB imposed a
patronage fee of Two Hundred Pesos (P200.00) per member starting August
1, 1986 pursuant to a Board Resolution dated June 25, 1986. Under said
Board Resolution, CLUB members whose restaurant and bar bills/chits do not
exceed Two Hundred pesos (200.00) a month are to be charged an
additional amount equivalent to the difference between their bill/chits and
the patronage fee of P200.00. And CLUB members who do not avail of the
restaurant and bar services will be charged P200.00 a month. 2
On several occasions, petitioner, without the knowledge and consent of the
CLUB management, ordered and consumed food from the CLUB
restaurant/bar and charged them against the patronage fees of Jose Ma.
Ozamis, Martin Cepeda, Roberto Reverente and Alex Yu Gonzales, all CLUB
members. 3
On January 29, 1988, the CLUB, upon discovery of petitioner's misconduct,
sent a written notice of charges against her, but she refused to receive it.
The CLUB then conducted an investigation. Petitioner executed a written
statement on January 31, 1988, explaining her side. 4
During the investigation, petitioner was reminded that she was not allowed
under CLUB rules to sign restaurant and bar bills/chits chargeable to the
patronage fees of CLUB members. Nonetheless, petitioner continued to do
so. 5
On May 10, 1988, petitioner was dismissed for violation of House Rule (A),
Section 15 (a); House Rule (B), Section 7, as amended; and for serious
misconduct and breach of trust. 6
On August 16, 1988, petitioner filed a Complaint for Illegal Dismissal against
the CLUB and Col. Eugenio before the NLRC-NCR, Manila.
On March 10, 1989, the Labor Arbiter rendered his decision in favor of the
complainant and against the respondents.
Not contented with the decision, private respondent CLUB appealed to the
NLRC. On December 11, 1991, the NLRC rendered its decision reversing the
decision and a new one entered ordering herein respondent Golf Club to pay
complainant an amount of P9,000.00 as financial assistance.
Petitioner's motion for reconsideration was denied on June 25, 1991. Hence
this petition.
Issue:
whether or not petitioner violated any company rules and regulations when
she signed the chits for and in behalf of CLUB members.
Petitioner contends that House Rule (A), Section 15 (a) and House Rule (B),
Section 7, as amended, are applicable only to members of the CLUB and not
to petitioner who is merely its employee. That petitioner was able to obtain
food from the Bar Grill because of the authorization duly executed by the
CLUB members in her favor.
The rules are applicable to petitioner. There is no showing that
petitioner was unaware of said rules and regulations. All she
invokes is that the same is not applicable to her being merely an
employee of the CLUB.
It is undeniable that petitioner is not a member of the CLUB.
Being a non-member, she is prohibited from signing chits for
and in behalf of club members notwithstanding any
authorization given by them. Furthermore, under Rule (B),
Section 7, only the spouses and dependents are allowed to sign
chits for themselves and their guests for food and beverage and
other facilities. However, in case of green fees, only the
legitimate spouse of the member can sign chits for his/her
guests but the same must be expressly authorized in writing by
the member. Not being any of the persons mentioned in said
44
Rule, petitioner cannot sign chits even if authorized by CLUB
members.
Article 282 of the Labor Code provides in part:
Art. 282. Termination by Employer. — An employer may
terminate an employment for any of the following causes: a)
Serious misconduct or willful disobedience by the employee of
the lawful orders of his employer or representative in
connection with his work.
xxx xxx xxx
(Empasis supplied)
Willful disobedience of the employer's lawful orders, as a just
cause for the dismissal of an employee, envisages the
concurrence of at least two (2) requisites: the employee's
assailed conduct must have been willful or intentional, the
willfulness being characterized by a "wrongful and perverse
attitude." The order violated must have been reasonable, lawful,
made known to the employee and must pertain to the duties
which he had been engaged to discharge. 10
By petitioner's own admission, she continued signing the
restaurant and Bar Grill bills or chits chargeable to the
patronage fee of the CLUB members Cepeda and Gonzales even
after she had been investigated for such misconduct on January
29, 1988 11 and after she was already made aware that non-
members like her cannot sign chits for and in behalf of the
CLUB members.
We agree with the NLRC that the acts of herein complainant is
defiantly disobeying the rules of the company even after
investigation, shows her cavalier attitude which leaves the
management no other recourse but to terminate her services.
To condone such conduct will certainly erode the discipline that
an employer would uniformly enforce so that it can expect
compliance with said rules and regulations by its other
employees. Otherwise the rules necessary and proper for the
operation of its business would be rendered ineffectual. 12 An
employer cannot legally be compelled to continue with the
employment of a person who admitedly was guilty of
misfeasance or malfeasance towards his employer, and whose
continuance in the service of the latter is patently inimical to his
interests. 13
194. G.R. No. 106915 August 31, 1993
JARDINE DAVIES, INC., Petitioner, vs. NATIONAL LABOR
RELATIONS COMMISSION, FOURTH DIVISION, CEBU CITY, and
SALVADOR SALUTIN, Respondents.
Hilado, Hagad, & Hilado Law Office for petitioner.chanrobles virtual
law library
Romeo B. Esuerte for private respondent.
VITUG, J.:
Facts:
Respondent Salvador Salutin ("Salutin") was employed by petitioner Jardine
Davies, Inc. ("JDI"), on 15 July 1985, as a demonstrator/agronomist to
provide services relating to, and to give advice on, the promotion and use of
JDI's pesticides and other products.
Respondent Salutin filed a complaint against petitioner JDI for illegal
dismissal, with prayer for reinstatement and backwages or, in the alternative,
45
separation pay plus wage differential, service incentive leave pay, thirteenth
(13th) month pay, holiday pay, moral and exemplary damages, and
attorney's fees. The complaint was decided by the Labor Arbiter in favor of
respondent Salutin in a decision, dated 08 August 1991,
JDI appealed the case to the National Labor Relations Commission (NLRC),
and it posted a supersedeas bond to answer for the monetary awards. It also
reinstated Salutin, "on payroll only", beginning 26 August 1991, 1in
compliance with the writ of execution issued by the Labor Arbiter pursuant to
Article 223, paragraph 3, of the Labor Code.
In a decision, dated 17 October 1991, NLRC dismissed JDI's appeal for lack
of merit but modified the decision by eliminating the awards given for
holiday pay, service incentive leave pay, moral and exemplary damages. 2A
motion for reconsideration was filed which was denied in NLRC's resolution
of 13 January 1992. 3chanrobles virtual law library
Shortly after the reinstatement of Salutin "on payroll only", JDI sent a letter,
dated 21 September 1991, to Salutin directing him to report for work to their
Bacolod Branch Manager. Salutin, as directed reported on the 24th of
September 1991 at around 9:20 a.m. He did not stay long, however, since
after fifteen minutes or so, he left and was reported not to have thereafter
returned for work. JDI forthwith stopped further payment of salary to
Salutin.c
On 17 October 1991, JDI filed a "Manisfestation and Motion" with the
respondent Commission stating, inter alia, that:
Salutin be considered as having abandoned his work
considering his continuous absence of more than three (3)
weeks since he was required to report for work . . . and that
any award for reinstatement to his former position, without loss
of seniority and other rights, in the Arbiter's decision subject of
this appeal be considered and held as waived or lost.
4
chanrobles virtual law library
Salutin opposed the motion, claiming that he was forced to leave in haste
because he was then suffering from a serious ailment. He submitted a
medical certificate to support his claim.
On 13 January 1992, respondent Commission denied JDI's "Manifestation &
Motion." Prescinding from its receipt of an information that Salutin was
employed elsewhere, JDI filed an ex parte motion, dated 16 June 1992, to
set for hearing the aforestated "Manifestation and Motion." 6 Salutin, on his
part, also filed a motion praying that JDI be ordered to release his withheld
salary, 7 claiming that he had reported for work when he recovered from his
ailment on 11 December 1991.
On 22 July 1992, respondent Commission issued its assailed resolution
denying to declare or consider the complainant to have abandoned his job
for his alleged failure to report back to work during the pendency of the
appeal in this case is hereby denied for lack of merilibrary
Issue:
Whether Private Respondent had abandoned his work
Our answer is in the negative.
The records show that at the time JDI filed its Manifestation and Motion,
dated 17 October 1991, the sole basis of its prayer for a declaration that
Salutin abandoned his work was his alleged unauthorized absences from the
date he was notified to report for work. 11A shift to a new focus took place
when, on 30 January 1992, JDI, at its request, received a letter-certification
issued by the Officer-in-Charge of King's Enterprises of Iloilo City that Salutin
was employed by Monsato Philippines, Inc., from 01 September to 31
December 1991, as Aggressive Crop Technician, for which he was paid
P5,146.00 per month. 12Thus, this was the reason given by JDI in its ex parte
motion, dated 16 June 1992, to set for hearing the Manifestation and Motion
of 17 October 1991. NLRC denied the said ex parte motion in the now
assailed resolution of 22 July 1992
The petitioner's evidence to establish Salutin's supposed abandonment of
work is the certification of employment issued by King's Enterprises at the
request of herein petitioner to the effect that Salutin had indeed been
employed by Monsato Philippines, Inc., during the period from 01 September
to 31 December 1991. Is this enough? What we have heretofore said is this -
For abandonment to constitute a valid cause for
termination of employment, there must be a
46
 deliberate unjustified refusal of the employee to
resume his employment. This refusal must be clearly
shown. Mere absence is not sufficient; it must be
accompanied by overt acts pointing to the fact that
the employee simply does not want to work
anymore. 15chanrobles virtual law library
Abandonment of position is a matter of intention expressed in clearly certain
and unequivocal acts. In this instance, however, certain uncontroverted facts
show just exactly the opposite. Hence, Salutin did report, as directed, on 24
September 1991, but that he could not stay long because he was ailing at
that time; he, although perhaps belatedly made, did seek medical
consultation on 7 November 1991, at the Corazon Locsin Montelibano
Memorial Regional Hospital, for "peptic ulcer"; and on 11 December 1991, he
did, in fact, manifest his desire to assume his work with the petitioner.
This Court's resolution of 26 February 1992, denying the petition in G.R. No.
103720, became final and executory on 19 June 1992. Respondent Salutin's
interim employment, stressed by the petitioner, did not stain the picture at
all. Here, we second the well-considered view of NLRC, thus -
The order of immediate reinstatement pending appeal, in cases
of illegal dismissal is an ancillary relief under R.A. 6715 granted
to a dismissed employee to cushion him and his family against
the impact of economic dislocation or abrupt loss of earnings. If
the employee chooses not to report for work pending resolution
of the case appeal, he foregoes such a temporary relief and is
not paid of his salary. The final determination of the rights and
obligations respectively of the parties is the ultimate and final
resolution of this Commission.
195. [G.R. No. 111515. July 14, 1995.]
JACKSON BUILDING CONDOMINIUM CORPORATION and/or RAZUL
REQUESTO, Petitioners, v. NATIONAL LABOR RELATIONS
COMMISSION and FERDINAND GUMOGDA, Respondents.
Jonathan M . Polines for Petitioner. Solicitor General for public
Respondent.
SYLLABUS
1. LABOR AND SOCIAL LEGISLATION; TERMINATION OF
EMPLOYMENT; GROUNDS FOR DISMISSAL; ABANDONMENT;
REQUISITES THEREOF; NOT ESTABLISHED IN CASE AT BAR. —
For abandonment to be a valid ground for dismissal, two
requisites must be compresent: the intention by an employee to
abandon coupled with an overt act from which it may be
inferred that the employee had no more intention to resume his
work. In the instant case, the said requisites are not present. As
found by the Labor Arbiter, private respondent’s physician
advised him to rest for 30 days before reporting back for work
in order to recuperate. Private respondent heeded this advise
and even exceeded the number of days recommended by his
doctor for his recuperation. In fact, he reported back for work
50 days after his recuperation. This would clearly show that
private respondent was ready to assume his responsibilities
considering that he had fully recovered from the operation.
Furthermore, the filing of a complaint for illegal dismissal by
private respondent is inconsistent with the allegation of
petitioners that he had abandoned his job. Surely, an
employee’s posture will be illogical if he abandons his work and
then immediately filed an action for his reinstatement
Facts:
On November 22, 1989, private respondent was employed as a janitor by
petitioner with a monthly salary of P2,340.00 or as daily wage of P90.00. On
47
November 15, 1992, private respondent filed a 45-day leave of absence from
November 15, 1991 to December 29, 1991 to undergo an appendectomy,
which would necessitate complete bed rest for about thirty days from the
date of operation as shown by his medical certificate (Annex "C-1", Rollo, p.
28). This was granted by petitioner.
On January 3, 1992, private respondent informed petitioner Razul Requesto,
president of petitioner corporation, that he was physically fit to assume his
work. However, petitioners refused to accept him back contending that he
had abandoned his work.
On March 24, 1992, private respondent filed with the Labor Arbiter a
complaint against petitioners for illegal dismissal, underpayment of wages
and non-payment of thirteenth-month pay and service-incentive leave pay
(Annex "C", Rollo, pp. 20-26).
On July 12, 1992, petitioners submitted their position paper wherein they
alleged that private respondent was not dismissed but was merely advised to
rest for health reasons until he could procure a medical certificate attesting
that he was fit to work. They further alleged that private respondent failed to
return to his workplace or to submit the required medical certificate.
On October 30, 1992, the Labor Arbiter rendered a decision in favor of
private Respondent.
Petitioners then appealed to NLRC, alleging that the Labor Arbiter committed
grave abuse of discretion. However, NLRC affirmed in toto the decision of
the Labor Arbiter. A subsequent motion for reconsideration was denied.
Issue:
Whether private respondent abandoned his work
For abandonment to be a valid ground for dismissal, two requisites must be
copresent: the intention by an employee to abandon coupled with an overt
act from which it may be inferred that the employee had no more intention
to resume his work (People’s Security, Inc. v. National Labor Relations
Commission, 226 SCRA 146 [1993]).
In the instant case, the said requisites are not present.
As found by the Labor Arbiter, private respondent’s physician advised him to
rest for 30 days before reporting back for work in order to recuperate.
Private respondent heeded his advise and even exceeded the number of
days recommended by his doctor for his recuperation. In fact, he reported
back for work 50 days after his operation. This would clearly show that
private respondent was ready to assume his responsibilities considering that
he had fully recovered from the operation. Furthermore, the filing of a
complaint from illegal dismissal by private respondent is inconsistent with the
allegation of petitioners that he had abandoned his job. Surely, an
employee’s posture will be illogical if he abandons his work and then
immediately files an action for his reinstatement (Remerco Garments
Manufacturing v. Minister of Labor and Employment, 135 SCRA 167 [1985]).
196. G.R. No. 113721 May 7, 1997
ARC-MEN FOOD INDUSTRIES, INC., petitioner,vs. NATIONAL LABOR
RELATIONS COMMISSION and FABIAN ALCOMENDRAS,
respondents.
HERMOSISIMA, JR., J.:
Facts:
. . . [Private respondent] alleges that he was a regular employee of the . . .
[petitioner] firm as a company driver from September 1985 until he was
unlawfully terminated on January 23, 1990. That as a company driver he was
required to render his services to both the . . . [petitioner's] food and
construction business; that since his employment, he has never enjoyed the
minimum wage, ECOLA and service incentive leave pay.
Records disclosed that . . . [private respondent] is a regular employee of
the . . . [petitioner] company and assigned as a dump truck driver. As
admitted by the . . . [petitioner], their plant operation beginning December
1, 1989 up to February 25, 1990 as shown in their Summary of Plant
48
Operations . . . will show that there were only two (2) days of operation, on
December 1, 1989 and February 20, 1990. There was no operation for the
whole month of January, 1990. As alleged, the . . . [private respondent] was
included in the temporary lay-off during this period (from December 2, 1990
up to February 20, 1990) considering that there was no plant operation.
However, contrary to the allegation of the . . . [petitioner], they also
presented the number of days worked by the . . . [private respondent] . . .
wherein for the month of December 1 to 31, 1989, the latter had worked for
twenty one (21) days and for January 1 to 20, 1990, he worked 16.5 days.
Assuming that there was [sic] only two days plant operation from December
1, 1989 to February 20, 1990, then it is presumed that . . . [private
respondent] was still reporting for duty during that period not for the hauling
of banana peelings but for some other purpose for which the respondent is
engaged. Thereafter, for unknown reason, . . . [private respondent] was not
anymore required to work effective January 23, 1990, hence, he filed his
complaint on February 5, 1990.6
From the foregoing facts, the Labor Arbiter concluded that "the allegation
that it was . . . [private respondent] who had abandoned his job is belied by
the fact that . . . [he] immediately filed his complaint after he was
terminated from his work on January 23, 1990"7 and that the report-to-work
letter dated February 25, 1990 and cash advance slip dated January 29,
1990 were dubious, the former being a mere after-thought and the latter
bearing an alleged forged signature of private respondent.
Totally aghast over the decision of the Labor Arbiter which struck petitioner
as grossly contrary to the evidence presented before him, petitioner
appealed to the NLRC. But the NLRC did not oblige. Instead, the NLRC
upheld the findings of the Labor Arbiter, "they being substantially supported
by the facts and evidence on record," 8 the NLRC echoing as it did that
petitioner's "theory of abandonment is contrary to logic and sound reasoning
in view of the immediate filing of the complaint for illegal dismissal" 9 and
declaring that petitioner had not validly discharged its burden of proving that
the termination was for a valid or authorized cause.
Petitioner filed a Motion for Reconsideration of the decision of the NLRC. Said
motion, however, was denied in a Resolution promulgated on December 14,
1993.
Issue:
Whether the Private Respondent abandoned his employment
The petition is imbued with merit.
In the face of solid evidence of petitioner's temporary plant
shutdown during the time that private respondent claims to
have been illegally dismissed and of private respondent's receipt
of notice to return to work and his refusal to do so, with full
awareness on the part of the Labor Arbiter and the NLRC as to
the related circumstance of the pendency of a criminal charge
by petitioner against private respondent, and considering the
utter lack of evidence in negation of petitioner's own
documentary evidence formidably establishing the veracity of its
defense, it was grave abuse of decision on the part of the Labor
Arbiter and the NLRC to have found petitioners liable for having
illegally terminated private respondent.
We quote, with approval, the following observations of the
Solicitor General:
Article 286 of Labor Code of the Philippine, as amended,
provides:
Art. 286. When employment not deemed terminated . — The
bona fide suspension of the operation of a business or
undertaking for a period not exceeding six (6) months, or the
fulfillment by the employee of a military or civic duty shall not
terminate employment. In all such cases, the employer shall
reinstate the employee to his former position without loss of
seniority rights if he indicates his desire to resume his work not
later than one (1) month from the resumption of operations of
his employer or from his relief from the military or civic duty.
Likewise, Section 12, Rule 1 of Book VI of the Omnibus Rules Implementing
the Labor Code reads:
49
Sec. 12. Suspension of relationship. — The employer-employee relationship
shall be deemed suspended in case of suspension of operation of the
business or undertaking of the employer for a period not exceeding six (6)
months, unless the suspension is for the purpose of defeating the rights of
the employees under the Code, and in case of mandatory fulfillment by the
employee of a military or civic duty. The payment of wages of the employee
as well as the grant of other benefits and privileges while he is on a military
or civic duty shall be subject to special laws and decrees and to the
applicable individual or collective bargaining agreement and voluntary
employer practice or policy.
From the foregoing provisions, it is clear that management can temporarily
suspend business operations or undertakings for a period not exceeding six
(6) months without having to pay separation pay to workers, but the
suspension must be done bona fide and not for the purpose of defeating the
rights of employees. Within this period, the employer-employee relationship
shall be deemed suspended.
In the instant case, it is undisputed that at the time that private respondent
was allegedly dismissed, i.e., January 23, 1990, petitioner was not in full
operation and the employees affected by the temporary shutdown were
advised of the situated and were told not to report for work in the meantime.
Thus, the Summary of Plant Operations shows that from the period starting
December 1, 1989 up to February 25, 1990, there were only two (2) days of
operation, that is, December 1, 1989 and February 20, 1990. It was during
this period of time that private respondent was temporarily laid off from
work.
xxx xxx xxx
That the services of private respondent Fabian Alcomendras were not
terminated or January 23, 1990 is shown by the fact that on that same day,
private respondent requested from petitioner a cash advance in the amount
of P700.00.
It must be noted that in his letter dated January 23, 1990, private
respondent clearly admitted that petitioner's plant operations were
temporarily suspended ("no definite plant operation") and that he was on
"indefinite lay off." Thus, the conclusion of the Labor Arbiter that private
respondent "was not anymore required to work effective January 23, 1990
for unknown reason" is totally without basis. The reason why private
respondent was not required to report for work on January 23, 1990 is very
clear, that is, the petitioner's plant operations was [ sic] temporarily shut
down. As mentioned earlier, the law allows petitioner to temporarily
shutdown/suspend its operations if the situation warrants it (Article 286 of
the Labor Code and Section 12, Rule 1 of Book VI of the Omnibus Rules
Implementing the Labor Code).
Further, private respondent requested in his letter that the cash advance to
be given him be deducted from his salary upon resumption of plant
operations. How could petitioner have granted private respondents request
for "cash advance against salary deduction" if private respondent has already
been dismissed on January 23, 1990 is alleged by him? It would be absurd
for petitioner to favorably acted [ sic] on the request for cash advance if it
were true that private respondent had already been dismissed. The truth is
that private respondent was not dismissed but merely temporarily laid off by
petitioner due to temporary suspension of its operations.
Thus, when petitioner was to resume its operations on February 26, 1990, it
sent a notice to private respondent on February 25, 1990. However, private
respondent refused to receive said letter and did not report for work as
required of him. Such being the case, petitioner can not compel private
respondent to report for work. The decision to resume his work as dump
truck driver rests solely on him.
The finding of the Labor Arbiter and public respondent NLRC that the notice
to private respondent to report back for work is purely an afterthought is
again bereft of merit. Private respondent was never dismissed by petitioner
that is why petitioner notified private respondent that he had to report back
for work on February 26, 1990.
Finally, that private respondent worked for twenty-one (21) days for the
period December 1-31, 1989 and 16.5 days for the period January 1-20,
1990 does not negate the fact that petitioner's operations during this time
was [sic] already temporarily suspended. As the Labor Arbiter himself has
found and concluded, private respondent reported for duty on said dates not
to haul banana peelings as was his job, but "for same other purpose for
which the respondent is engaged." When these "special assignments", as
petitioner calls them were done, petitioner could rightfully ask private
respondent not to report for work in the meantime that the operations were
50
still suspended. This advice of petitioner to private respondent can not be
construed as dismissal. 19
SO ORDERED.
197. G.R. No. 114920 August 23, 1995
PHILIPPINE COMMERCIAL INTERNATIONAL BANK, petitioner, vs.
NATIONAL LABOR RELATIONS COMMISSION and EDUARDO V.
MATURAN, respondents.
Facts:
The instant petition involves the dismissal of private respondent Eduardo
Maturan, a bank teller of petitioner bank's General Santos City branch,
whose services were terminated on July 18, 1991 allegedly for incurring a
cash shortage in the amount of P10,000.00, for failure to return the
P8,000.00 cash withdrawal of a client, Rebecca Salud, and for extending
unauthorized accommodations to clients. A complaint for illegal dismissal was
filed before the NLRC Sub-Regional Arbitration Branch No. XI in General
Santos City which thereafter rendered a decision, 1 dated May 7, 1992,
declaring herein petitioner guilty of illegal dismissal and ordering the
reinstatement of respondent Maturan to his former position without loss of
seniority rights and privileges, and with payment of his back wages,
allowances and other benefits from the time of his illegal dismissal until
promulgation of the decision, moral and exemplary damages, and attorney's
fees.
In so ruling, the labor arbiter declared that the penalty of dismissal is too
harsh considering that it had not been shown that private respondent had
acted in bad faith and with malice.
On appeal, public respondent NLRC rendered a resolution 2 promulgated on
March 8, 1993 which reversed and set aside the decision of the labor arbiter,
declaring as valid the dismissal of respondent and, accordingly, dismissing
the complaint for lack of merit. However, said resolution was subsequently
reconsidered and modified in another resolution 3 of the same
commissioners .
Finally, respondent is further ordered to pay complainant his accrued
backwages from the time it was withheld during the pendency of the appeal
up to the rendition of this judgment. No costs.
Hence, this petition wherein it is basically contended that respondent NLRC
acted arbitrarily and with grave abuse of discretion in rendering its
aforequoted modified resolution.
Issue:
Whether the respondent is guilty for loss of confidence
As a whole, numerous infractions and acts of dishonesty committed by the
respondent prompted petitioner to dismiss herein respondent. Petitioner cites
the ruling in Allied Banking Corporation vs. Castro, et al.4 which held that "(a)
bank teller is entrusted with considerable sums of money. The teller as
trustee is expected to possess a high degree of fidelity and trust. The
repeated and numerous infractions committed by the private respondents in
handling the moneys entrusted to them as tellers cannot be considered
minor. Taking into account the nature of a teller's job, the infractions are too
numerous to be ignored or treated lightly. The repeated acts of misconduct
and willful breach of trust forfeited the respondent's right to security of
tenure."
Petitioner hastens to add that loss of confidence is a valid ground for
dismissing an employee and proof beyond reasonable doubt of the
employee's misconduct is not required.
4. The considerable length of time that respondent has served the bank
becomes of no moment when compared with the numerous violations that
respondent has committed. "The infraction that he committed, vis-a-vis his
long years of service with the company, reflect a regrettable lack of loyalty.
If an employee's length of service is to be regarded as a justifying
circumstance in moderating the penalty of dismissal, it will actually be a prize
for disloyalty, perverting the meaning of social justice and undermining the
efforts of labor to cleanse its ranks of all undesirables." 5 Petitioner notes that
even in its first resolution, respondent NLRC has likewise ruled that loss of
trust and confidence justifies dismissal.
51
Since his dismissal is justified, respondent is not entitled to reinstatement,
backwages, or separation pay. The doctrine that employees dismissed for
cause are entitled to separation pay on the ground of social and
compassionate justice has been abandoned. 6
5. Assuming arguendo that dismissal is not proper, the relationship between
petitioner and respondent has been so severely strained by reason of their
respective imputations of bad faith that reinstatement is no longer prudent.
Instead, respondent will just be entitled to separation pay so that he can be
spared the agony of having to work anew with the employer under an
atmosphere of antipathy and antagonism and the employer does not have to
endure the continued services of the employee in whom it has lost
confidence.7 At any rate, petitioner would rather pay separation pay to
respondent than reinstate him.
Ruling:
The aforecited case of Allied Banking Corporation vs. Castro, et al., which
upheld the dismissal of the bank teller due to numerous infractions
committed by him, is not applicable to the present case of herein respondent
Maturan. In that case, the bank tellers there were found to have incurred
several shortages on various dates (around 11 to 12 incidents were reported)
within a span of 5 to 7 months; there were 2 to 4 reported incidents of
overages incurred within a period of 4 months; they allowed encashment of
checks over the counter without verification of the drawer's signature and
without the approval of authorized officers; and they did not comply with
instruction of their superiors to report to Central Bank Cash Units. These
offenses justified the dismissal of the employees concerned.
On the contrary, respondent Maturan was involved in a single incident of
cash shortage in the amount of P10,000.00. By petitioner's own admission,
the last shortage incurred by respondent prior to this incident was way back
in January, 1988.9 As correctly found by the labor arbiter, respondent is not a
habitual violator, which undesirable category would have warranted his
dismissal.10 This is aside from the similar findings made by the labor arbiter
and respondent NLRC that the dismissal was caused by respondent's active
involvement in union activities. Consequently, it is justifiedly believed that
the dismissal of the private respondent is not warranted under the
circumstances.
Furthermore, in the aforesaid Allied Banking Corporation case, there was a
provision in the collective bargaining agreement which granted a yearly
allowance for tellers to cover shortages which they may incur during the
year. Thus, the NLRC held that this, in effect, is a recognition that among the
hazards of tellers is the incidence of shortages and overages up to a certain
limit. This very provision, therefore, is a clear indication that such errors are
understandingly viewed and forgiven provided they do not go beyond the
allowable limit.
The ruling therein supports the labor arbiter's observation that "(i)n
(t)ellering, (r)egardless of how long one has been in the trade, and how
careful one is, there is no guarantee that one can never incur cash shortage
or overage. No teller for that matter can testify that in his stint as such,
everyday his actual cash on hand always tallies with the figure appearing in
the teller's validating machine tape as the 'should be cash on hand'. Cash
shortages and overages are but ordinary and normal banking activities." As a
matter of fact, it is not disputed that there were other shortages or overages
incurred by the other tellers in petitioner's General Santos City branch at
about the same time that this particular infraction of private respondent
occurred.11
We must add, however, that these occurrences are subject to certain
limitations, depending on the amount involved as well as the number and the
gravity of the infractions. As earlier explained, we do not find the infraction
committed by private respondent to be so grave as to warrant his dismissal.
We are not even inclined to conform with the penalty imposed by respondent
NLRC, that is, the non-payment of back wages from the time of respondent's
dismissal up to the rendition of the decision of the labor arbiter (or from July
18, 1991 to May 7, 1992), considering that he has already paid, through
salary deductions, the amount of P10,000.00. Moreover, this mode of
payment was even recommended for approval by no less than the Manager,
Mr. Cubar12 and, as the records reveal, it can be safely assumed that the
same was approved because the amount was fully paid by respondent on
March 28, 1990. The imposition of a penalty is, therefore, unwarranted.
The labor arbiter and respondent NLRC uniformly found that the missing
P8,000.00 of Rebecca Salud was included in the P10,000.00 deposit reflected
in her account ledger. This is a factual finding which cannot be disturbed
unless shown to have been made with grave abuse of discretion but which,
52
apparently, is absent in this case. Furthermore, the manner by which private
respondent dealt with the missing money only serves to emphasize his good
faith.
To be a valid ground for dismissal, loss of trust and confidence
must be based on a willful breach of trust. 14 And, as realistically
stressed by the Solicitor General, unless based on a ground
provided by law and supported by substantial evidence,
dismissal will be disallowed, for what is at stake is not only the
employee's position, but also his means of livelihood. 15
Considering that private respondent was acting in good faith,
his dismissal would run counter to such established doctrinal
rulings.
To conclude, we hold that there is grossly insufficient evidence
to warrant the dismissal of private respondent on the ground of
loss of trust and confidence. We are convinced, however, that
the filing of the complaint for illegal dismissal and the protracted
proceedings with confrontational exchanges therein between
the parties have now evidently strained their erstwhile
harmonious relationship. The reinstatement of private
respondent would, in our view, no longer be beneficial to either
party. An award of back salaries and severance pay in lieu of
reinstatement would thus appear to be in order. 19
198. [G.R. No. 144089. August 9, 2001]
CONCORDE HOTEL, represented by MICHAEL ONG SIY, General
Manager, petitioner, vs. COURT OF APPEALS, NATIONAL LABOR
RELATIONS COMMISSION, Second Division, and ROBERTO
PARADO, respondents.
FACTS: Petitioner Concorde Hotel is engaged in the business of a hotel
service at the Europa Center, Legarda Road, Baguio City. Before opening its
business to the public, petitioner engaged in a mass hiring of personnel
through the Highlanders Management Services, a manpower service agency,
to fill up positions in the hotel. Those recruited were subjected to a ten-day
training and screening period. One of those recruited is herein private
respondent Roberto Parado who applied and was hired by the hotel as
assistant cook.
Sometime in January 1997, petitioner discovered that some of its stocks and
merchandise were missing and unaccounted for in the inventory reports.
When the hotel management conducted an inquiry among the employees, it
found out that some of its employees, singly or in conspiracy with each
other, had been bringing home canned goods, meat and poultry, plates,
glasses, spoons and other utensils, including cloth napkins.
An in-house investigation was thereafter initiated by the management. Those
departments whose stock inventories included items unaccounted for were
asked to explain such irregularity. The identities of those who were allegedly
involved in the pilferage were gathered from the employees. The Highlanders
Agency was furnished a list of the employees allegedly involved in the
incident. Those who were named in the list were called and asked to explain
in writing on the same day. When nobody submitted the required written
explanation, petitioner and Highlanders Agency issued separate notices of
termination to the said employees.
Petitioner reported the incident to the Baguio City police on January 22, 1997
and the same was entered in the police blotter. Fifteen (15) names were
initially listed as suspects in the theft incident. However, eight more names
were added to the list. These names were allegedly furnished by other
employees who were bothered by their conscience and decided to reveal the
identities of the other employees involved in the pilferage. Private
respondent was one of these additional suspects. Thereafter, he was
terminated from employment.
ISSUE: Whether or not the employee is validly dismissed.
HELD: The records are also bereft of any evidence showing that petitioner
conducted any further investigation or that it verified the allegations by the
other employees. While it is true that petitioner had the incident entered in
the police blotter, the initial list of suspects did not include private
respondent. His name was only added after management failed to persuade
him to testify against his co-employees. Moreover, no criminal charge was
ever filed by the petitioner against private respondent. While the filing of a
criminal charge for an employees alleged misconduct is not a prerequisite to
53
his dismissal, and proof beyond reasonable doubt is not necessary to justify
such dismissal, still the basis thereof must be clearly and convincingly
established.[15] In this case, the facts regarding private respondents actual
participation in the acts of pilferage were not clearly established by
Concorde. What the Court of Appeals correctly found as established in the
records is the fact that private respondent was the one who complained to
the police authorities after he was threatened with harm by certain
employees at the time the incident of theft was discovered.
It is also significant to note that in the memorandum of
termination sent by petitioner to private respondent, aside from
breach of trust and confidence, the other grounds for private
respondents dismissal were dishonesty and rumor mongering.
Again, there is no evidence establishing the basis for these
grounds. The specific acts which constitute these grounds were
not even alleged by petitioner. In the termination letter sent by
Highlanders Agency to private respondent, it was merely stated
that the reason for his termination was failure to satisfactorily
meet the minimum of the companys standards for its
employees. This inconsistency in the charges made by petitioner
and the agency against private respondent also militate against
the validity of the latters dismissal.
Finally, petitioner dismissed private respondent Before an employer can
legally effect a dismissal, the employee sought to be dismissed must be
furnished two written notices – the first is a notice which apprises the
employee of the particular acts or omissions for which his dismissal is
sought; the second, is a subsequent notice which informs the employee of
the employers decision to dismiss him. These requirements are mandatory,
non-ompliance with which renders any judgment reached by management
void and inexistent.
199. JEAN C. AURELIO, petitioner, vs. NATIONAL LABOR
RELATIONS COMMISSION, NORTHWESTERN COLLEGE, BEN A.
NICOLAS, ERNESTO B. ASUNCION, JOFFREY AURELIO, JOSE G.
CASTRO, FRANCISCO SANTELLA, ALBA B. CADAY, LILIA PAZ,
WILFRED A. NICOLAS, GLENN AQUINO, LUCIDIA RUIZ-FLOREZ,
respondents., G.R. No. 99034, Apr 12, 1993
FACTS:
Petitioner started as clinical instructor of the College of Nursing of
Northwestern College (NWC) in June 1917. In October 1979, petitioner was
appointed Dean of the College of Nursing. In September 1981, petitioner was
promoted to College Administrator or Vice-President for Administration,
retaining concurrently her position of Dean of the College of Nursing then
she was later promoted to Executive Vice-President.
April 10, 1988, petitioner’s husband, Oscar Aurelio, a stockholder of
respondent NWC, was elected Auditor. On May 1, 1988, the individual
respondents, as Board of Directors, took over the management of
respondent NWC. This new management unleashed a series of
reorganization affecting the petitioner and her husband, Oscar Aurelio.
Petitioner, wrote a letter informing the President of Northwestern College
that she was going on an indefinite leave. Petitioner sent a copy of the letter
to the Secretary of DECS praying for assistance. The Secretary DECS referred
the letter to the DECS Director of Region I and the latter was ordered “to
investigate and look into the problem of NWC College of Nursing, Laoag City
immediately. PRC recommends suspension of the operation of College of
Nursing due to lack of Dean and faculty to supervise students.” The
representatives of the Regional Director submitted their official findings and
recommendations confirming the truth of the allegations of petitioner in her
letter. The DECS also confirmed the willingness of petitioner to withdraw her
indefinite leave of absence. They refused to accept petitioner. Petitioner filed
her complaint for illegal dismissal against private respondents and prayed for
reinstatement plus backwages, moral and exemplary damages, and
attorney’s fees.
On April 30, 1988, the annual regular meeting of stockholders was held at
the principal office of the corporation in Laoag City. New set of Board
members were elected. The new Board conducted a preliminary audit which
revealed that the college was financially distressed, unable to meet its
maturing obligations with its creditor bank. The new management embarked
on a realignment of positions and functions of the different department in
order to minimize expenditures. As a result of the audit, NWC was compelled
54
to abolish the administrative positions held by petitioner, which she did not
contest.
LA dismissed the complaint. Petitioner went to NLRC which merely modified
the decision of LA. Hence this appeal.
ISSUE:
1. whether NWC can validly terminate the administrative position
held by petitioner.
2. Whether NWC observed due process in dismissing petitioner.
RULING:
1. YES. As found by the NLR, Petitioner was a
managerial employee who has to have the complete
trust and confidence of respondents. While it may be
true that complainant was not strictly an accountable
employee primarily responsible for disbursement of
whatever funds, respondents had some basis in
losing its trust and confidence in complainant.
Respondents’ evidence showed that under the
principle of command responsibility, complainant was
in a sense responsible in the monitoring of monetary
transactions involving funds from library collections
and from Related Learning Science collection. For it
has been held that in case of termination due to loss
of trust and confidence proof beyond reasonable
doubt of misconduct is not necessary but some basis
being sufficient.
Petitioner’s claim of constructive dismissal stems from her alleged removal
from the positions of Administrator, Vice President for Administration and
Executive Vice President. From the time petitioner assumed the position of
Executive Vice President, she did not possess any legal right to claim security
of tenure concerning this position because she assumed the same without
authority from the Board of Directors. Petitioner cannot claim that she was
dismissed from the position of Administrator and Vice-President for
Administration because her continuous occupation of the positions is at the
discretion or pleasure of the Board of Directors.
The acquisition of security of tenure by the teacher signifies that he/she shall
thenceforth have the right to remain in employment as such teacher until he
reaches the compulsory retirement age in accordance with the rules of the
school or the law. That tenure, once acquired, cannot be adversely affected
or defeated by requiring the teacher to execute contracts stipulating the
termination of his/her employment upon the expiration of a fixed period or
term. Contracts of that sort are anathema and will be struck down as null
and void.
Now, a teacher may also be appointed as a department head or
administrative officer of the school, e.g., as member of the school’s
governing council, as college dean or assistant dean, as high school principal,
as college secretary. Except in the case of a clear and explicit agreement to
the contrary, the acceptance by a teacher of an administrative position
offered to him or to which he might have aspired, does not operate as a
relinquishment or loss by him of his security of tenure as a faculty member;
he retains his tenure as a teacher during all the time that he occupies the
additional position of department head or administrative officer of the school.
The teacher designated as administrative officer ordinarily serves for a
definite term or at the pleasure of the school head or board of trustees or
regents depending on the rules of the school and the agreement he may
55
enter into with the institution. There is nothing wrong in said practice of
having teachers serve as administrative officials for a fixed term or in a non-
permanent capacity.
A distinction should be drawn between the teaching staff of private
educational institutions, on one hand — teachers, assistant instructors,
assistant professors, associate professors, full professors — and department
or administrative heads or officials on the other — college or department
secretaries, principals, directors,” assistant, deans, deans. The teaching staff,
the faculty members, may and should acquire tenure in accordance with the
rules and regulations of the Department of Education and Culture and the
school’s own rules and standards. On the other hand, teachers appointed to
serve as administrative officials do not normally and should not expect to,
acquire a second or additional tenure. The acquisition of such an additional
tenure is not normal, is the exception rather than the rule, and should
therefore be clearly and specifically provided by law or contract.
The management of NWC rests on its Board of Directors including the
selection of members of the faculty who may be allowed to assume other
positions in the college aside from that of teacher or instructor. When the
then new Board of Directors abolished the additional positions held by the
petitioner, it was merely exercising its right.
The Board abolished the positions not because the petitioner was the
occupant thereof but because the positions had become redundant with
functions overlapping those of the President of the college. The Board of
Directors has the power granted by the Corporation Code to implement a
reorganization of respondent college’s offices, including the abolition of
various positions, since it is implied or incidental to its power to conduct the
regular business affairs of the corporation.
Petitioner also failed to rebut the findings of the labor arbiter. In the instant
petition, she has again failed to overturn private respondents’ evidence as
well as the findings of the labor arbiter which were affirmed by the NLRC.
Petitioner’s application for an indefinite leave of absence was not approved
by the college authorities, but this notwithstanding, she failed to follow-up
her application and did not report for work. Believing she was dismissed,
petitioner filed the complaint for illegal dismissal, illegal deductions,
underpayment, unpaid wages or commissions and for moral damages and
attorney’s fees.
Employers, generally, are allowed a wider latitude of discretion in terminating
the employment of managerial personnel or those of similar rank performing
functions which by their nature require the employer’s trust and confidence,
than in the case of ordinary rank-and-file employees.
Article 282(c) of the Labor Code provides that an employer may terminate an
employment for “fraud or willful breach by the employee of the trust reposed
in him by his employer or his duly authorized representative.”
Loss of trust and confidence is a valid ground for dismissing an employee.
Termination of employment on this ground does not require proof beyond
reasonable doubt. All that is needed is for the employer to establish sufficient
basis for the dismissal of the employee. Both the LA NLRC found that there is
some basis for respondent NWC’s loss of trust and confidence on petitioner.
The dismissal of the petitioner was for a just and valid cause
1. NO. It appears on record that the investigation of petitioner’s
alleged irregularities was conducted only after the filing of the
complaint for illegal dismissal. Under Section 1, Rule XIV of the
Implementing Rules and Regulations of the Labor Code, the
dismissal of an employee must be for a just or authorized cause
and after due process.
The two requirements of this legal provision are:
1. The legality of the act of dismissal , that is, dismissal under the
ground provided under Article 283 of the New Labor Code; and
56
 2. The legality in the manner of dismissal , that is, with due
observance of the procedural requirements of Sections 2, 5, and
6 of BP Blg. 130.
While the Labor Code treats of the nature and the remedies available with
regard to the first, such as: (a) reinstatement to his former position without
loss of seniority rights, and (b) payment of backwages corresponding to the
period from his illegal dismissal up to actual reinstatement, said Code does
not deal at all with the second, that is, the manner of dismissal, which is
therefore, governed exclusively by the Civil Code.
In cases where there was a valid ground to dismiss an employee but there
was non-observance of due process, this Court held that only a sanction
must be imposed upon the employer for failure to give formal notice and to
conduct an investigation required by law before dismissing the employee .
Employer must be imposed a sanction for its failure to give a formal notice
and conduct an investigation as required by law before dismissing petitioner
from employment. The measure of this award depends on the facts of each
case and the gravity of the omission committed by the employer.
WHEREFORE, the decision under review is hereby AFFIRMED with
MODIFICATION.
200. G.R. No. 148410 January 17, 2005
VICENTE C. ETCUBAN, JR., petitioner, vs. SULPICIO LINES, INC.,
respondent.
Facts:
Respondent Sulpicio Lines, Inc. is a domestic corporation engaged in the
business domestic shipping. Among its fleet of inter-island vessels was the
M/V Surigao Princess, plying the Cebu–Cagayan de Oro–Jagna–Bohol route. 1
The petitioner was employed by the respondent on January 30, 1978 until
his dismissal on June 10, 1994 for loss of trust and confidence. 2 At the time
of his dismissal, the petitioner was the Chief Purser of the M/V Surigao
Princess receiving a monthly salary of ₱5,000.00. 3 As the Chief Purser, the
petitioner handled the funds of the vessel and was the custodian of all the
passage tickets and bills of lading.4 It was his responsibility, among other
things, to issue passage tickets and to receive payments from the customers
of the respondent, as well as to issue the corresponding official receipts
therefor.5 He was also tasked to disburse the salaries of the crewmen of the
vessel.6
They discovered that several yellow passenger’s duplicate original 8 of yet to
be sold or unissued passage tickets already contained the amount of ₱88.00
– the fare for adult passengers for the Cagayan de Oro to Jagna, Bohol
route. He noticed that three other original copies which made up the full set
did not bear the same impression, although they were supposed to have
been prepared at the same time. Acting on what appeared to be a strong
evidence of short-changing the company, the jefe de viaje dug deeper on
what he uncovered. As expected, he found inordinate amount of ticket
issuances for children at half the fare of ₱44.00 in Voyage 434 of the vessel. 9
When word of the anomaly reached the respondent, it waited for the
petitioner to return to Cebu City in the hope of shedding more light on the
matter.
On May 30, 1994, shortly after disembarking from the M/V Surigao Princess
at the port of Cebu, the petitioner received a memorandum of even date
from Personnel Officer Artemio F. Añiga relative to the irregularity in the
"alleged involvement in anomaly of ticket issuance," instructing him to
forthwith report to the main office and to explain in writing why no
disciplinary action should be meted on him or to submit himself to an
investigation. The memorandum warned the petitioner that his failure to
comply with the aforementioned instructions would be construed as a waiver
of his right to be heard. It also informed the petitioner of his immediate
preventive suspension until further notice. 10 The petitioner, however, refused
to acknowledge receipt of the memorandum which was personally served on
him,11 prompting the respondent to mail the same, and which the petitioner
received days later.121awphi1.nét
Thereafter, petitioner was preliminarily investigated by Mr. Añiga wherein his
statements were taken down.13 After the initial investigation, the petitioner
was told to sign its minutes but he adamantly refused, claiming the same to
57
be "self-incriminatory."14 The next day, the petitioner was replaced by Mr.
Felix Almonicar as the Chief Purser of the M/V Surigao Princess. 15 As a result
of his replacement, the petitioner thought he was fired from his job.
He filed a complaint against the respondent for illegal dismissal, non-
payment of overtime pay, 13th month pay and other monetary benefits with
the NLRC, Regional Arbitration Branch No. VII, Cebu City. The petitioner
alleged that the ground for his dismissal, i.e., loss of trust and confidence,
was ill-motivated and without factual basis. He did not deny that the
anomalous tickets were in his possession, but denied that he was guilty of
any wrongdoing. He dismissed the handwriting on the tickets as his, and
claimed that he was singled out for the dismissal. He averred that the
"trumped-up" charge was a clever scheme resorted to by his employer so it
could avoid paying him monetary benefits, considering that he was with the
company for more than sixteen (16) years. He argued that assuming that it
was he who wrote those entries in the tickets, the fact remains that they
were still unissued; hence, no money went to his pocket and no material
prejudice was caused to the respondent. According to the petitioner, he
would not jeopardize his livelihood for something as miniscule as ₱88.00. He
prayed not for reinstatement but for separation pay, monetary benefits plus
damages.16
On June 9, 1994, the respondent received its summons. 17 Short of pre-
empting its administrative investigation, coupled with the petitioner’s
obstinate refusal to submit to further investigation, the respondent decided
to terminate the petitioner’s employment for loss of trust and confidence in
connection with passage tickets nos. 636742-636748. 18 A copy of the notice
of termination19 dated June 10, 1994 was sent by mail to the petitioner.
After hearing on the merits, Labor Arbiter Ernesto F. Carreon rendered his
Decision dated March 13, 1995, finding the petitioner’s dismissal illegal. He
ruled that the respondent failed to substantiate and prove that the petitioner
committed any wrongdoing.
Both parties appealed to the NLRC, 4th Division, Cebu City. In its appeal, the
respondent insisted that the dismissal was justified. 22 The petitioner, on the
other hand, questioned the computation of his backwages, besides
reiterating his claim for moral damages.23
On February 21, 1996, a Decision 24 was rendered by the NLRC affirming the
challenged decision with the modification that the backwages to be paid to
the petitioner shall be reckoned from the time of his actual dismissal on June
10, 1994, up to the issuance of the writ of execution on the finality of the
decision, but not to exceed five (5) years.
The respondent filed a motion for reconsideration 27 which was denied by the
NLRC in a Resolution28 promulgated on April 15, 1996. It stressed its finding
that the petitioner’s alleged breach of trust was not sufficiently established
by the evidence on record. It further ruled that the petitioner’s indefinite
suspension from work amounted to his constructive dismissal. 29
On December 28, 2000, the Court of Appeals reversed and set aside the
NLRC decision.33 It ruled that there was valid and just cause for the
petitioner’s dismissal, as there was sufficient basis for loss of trust and
confidence on him. The appellate court amplified that in cases of dismissal
for loss of trust and confidence, it is not required that there is proof beyond
reasonable doubt.
The petitioner’s motion for reconsideration 36 was denied by the Court of
Appeals for lack of merit in its Resolution37 dated May 31, 2001.
Aggrieved at the unfortunate turn of events, the petitioner took the present
recourse, and now asks the Court to reinstate and uphold the NLRC decision.
The petitioner anchors his petition for review on the following grounds:
Issue:
Whether there is a valid dismissal
Ruling:
The petition is bereft of merit.
The petitioner insists that his dismissal was without factual and legal basis.
Echoing the findings of the Labor Arbiter and the NLRC, he maintains that
the handwriting on the irregular tickets was not proven to be his. He argues
that the reluctance of the respondent to take on his challenge to subject the
same tickets to a handwriting expert proved his inculpability. 39 Moreover, he
points out that the very testimony of the respondent’s Personnel Officer, Mr.
58
Añiga, to the effect that the latter had no idea whose handwriting it was on
the questioned tickets, helped clear his innocence. 40
Upon the other hand, the respondent counters that there was sufficient basis
for its loss of trust and confidence on petitioner; the tampered tickets were
found in his possession, and as Chief Purser, he was the custodian of the
unissued tickets. The respondent avers that proof beyond reasonable doubt
is not necessary to justify loss of trust and confidence, it being sufficient that
there is some basis to justify it.41
We agree with the respondent.
Law42 and jurisprudence have long recognized the right of
employers to dismiss employees by reason of loss of trust and
confidence.43 More so, in the case of supervisors or personnel
occupying positions of responsibility, loss of trust justifies
termination.44 Loss of confidence as a just cause for termination
of employment is premised from the fact that an employee
concerned holds a position of trust and confidence. This
situation holds where a person is entrusted with confidence on
delicate matters, such as the custody, handling, or care and
protection of the employer’s property. But, in order to constitute
a just cause for dismissal, the act complained of must be "work-
related" such as would show the employee concerned to be
unfit to continue working for the employer.45
The degree of proof required in labor cases is not as stringent as in other
types of cases.46 It must be noted, however, that recent decisions of this
Court have distinguished the treatment of managerial employees from that
of rank-and-file personnel, insofar as the application of the doctrine of loss of
trust and confidence is concerned.
Thus, with respect to rank-and-file personnel, loss of trust and confidence as
ground for valid dismissal requires proof of involvement in the alleged events
in question, and that mere uncorroborated assertions and accusations by the
employer will not be sufficient. But as regards a managerial employee, the
mere existence of a basis for believing that such employee has breached the
trust of his employer would suffice for his dismissal. Hence, in the case of
managerial employees, proof beyond reasonable doubt is not required, it
being sufficient that there is some basis for such loss of confidence, such as
when the employer has reasonable ground to believe that the employee
concerned is responsible for the purported misconduct, and the nature of his
participation therein renders him unworthy of the trust and confidence
demanded by his position.47
In the present case, the petitioner is not an ordinary rank-and-file employee.
The petitioner’s work is of such nature as to require a substantial amount of
trust and confidence on the part of the employer. Being the Chief Purser, he
occupied a highly sensitive and critical position and may thus be dismissed
on the ground of loss of trust and confidence. One of the many duties of the
petitioner included the preparation and filling up passage tickets, and
indicating the amounts therein before being given to the passengers. More
importantly, he handled the personnel funds of the MV Surigao Princess.
Clearly, the petitioner’s position involves a high degree of responsibility
requiring trust and confidence. The position carried with it the duty to
observe proper company procedures in the fulfillment of his job, as it relates
closely to the financial interests of the company.
The requirement that there be some basis or reasonable ground to believe
that the employee is responsible for the misconduct was sufficiently met in
the case at bar. As Chief Purser, the petitioner cannot feign ignorance on the
irregularity as he had custody of the tickets when the anomaly was
discovered. It would not be amiss to suppose that the petitioner, who would
benefit directly or indirectly from the fruits of such fraudulent scheme, was a
party to such irregularity. That there were other pursers who could have
done the irregularity is of no moment. It bears stressing that the petitioner
was the Chief Purser who was tasked to directly supervise each and every
purser under him. While, indeed, it was not proved that he was the one who
made the irregular entries on the tickets, the fact that he did not lift a finger
at all to determine who it was is a sad reflection of his job. In fact, even if
the petitioner had no actual and direct participation in the alleged anomalies,
his failure to detect any anomaly in the passage tickets amounts to gross
negligence and incompetence, which are, likewise, justifiable grounds for his
dismissal. Be that as it may, to our mind, it is no longer necessary to prove
the petitioner’s direct participation in the irregularity, for what is material is
59
that his actuations were more than sufficient to sow in his employer the seed
of mistrust and loss of confidence.
It cannot be over emphasized that there is no substitute for honesty for
sensitive positions which call for utmost trust. Fairness dictates that the
respondent should not be allowed to continue with the employment of the
petitioner who has breached the confidence reposed on him. 55 Unlike other
just causes for dismissal, trust in an employee, once lost, is difficult, if not
impossible, to regain.56 There can be no doubt that the petitioner’s
continuance in the extremely sensitive fiduciary position of Chief Purser
would be patently inimical to the respondent’s interests. It would be
oppressive and unjust to order the respondent to take him back, for the law,
in protecting the rights of the employee, authorizes neither oppression nor
self-destruction of the employer.57
201 WORLDWIDE PAPERMILLS, INC. and/or HONORIO POBLADOR,
III, Petitioner, v. NATIONAL LABOR RELATIONS COMMISSION and
EDWIN P. SABUYA, Respondents.
1. LABOR AND SOCIAL LEGISLATION; TERMINATION OF
EMPLOYMENT; GROSS AND HABITUAL NEGLECT OF DUTIES;
WARRANTS DISMISSAL; CASE AT BAR. — Article 282 of the
Labor Code provides the grounds for which an employer may
validly dismiss an employee, among which is gross and habitual
neglect by the employee of his duties. In the case at bench, it is
undisputed that respondent Edwin P. Sabuya had within a span
of almost six (6) years been repeatedly admonished, warned
and suspended for incurring excessive unauthorized absences.
Worse, he was not at home but was out driving a pedicab to
earn extra income when the company nurse visited his
residence after he filed an application for sick leave. Such
conduct of respondents Edwin P. Sabuya undoubtedly
constitutes gross and habitual neglect of duties.
Facts:
Private respondent was employed by the petitioner as a packer on July 8,
1982 until his services were terminated on September 28, 1991. It appears
that private respondent incurred excessive unexcused absences from 1986 to
1989, as summarized in a memorandum dated January 22, 1990 prepared
and signed by the personnel/administrative officer of petitioner,
Sabuya was counselled several times to improve his attendance. On April 11,
1988, he promised not to absent himself, yet, no compliance. Due to having
incurred 12 days AWOL in 1988, he was supposed to be terminated based on
our rule, but due to his asking reconsideration and intervention of R. Brusola,
Union President he was only suspended for one (1) month. A promissory
note to this effect was executed by Sabuya and witnessed by R. Brusola,
stressing among others to improve his attendance in 1989; once he exceeds
the VL & SL granted by the company, he accepts to be terminated; and the
next time he is declared AWOL he accepts the DA of termination.
To summarize it all, no improvement up to this date. In 1989 he has
exceeded the required VL & SL given by the company and aggravated by the
fact that he was disciplined for AWOL twice already for that same year. The
undersigned also called the attention of R. Brusola of this in fact he even
talked to Sabuya several times to improve his attendance but to no avail.
On February 2, 1990, private respondent wrote petitioner a letter promising
to mend his ways however, again incurred absences without official leave on
January 2, February 20, June 1, 2 and 3, 1991. He was consequently
suspended effective June 24, 1991. For the third time, private respondents
was suspended for two weeks effective July 22, 1991 up to August 4, 1991
when he incurred absences on July 5 and 8, 1991.
A week after he had served his latest suspension, private respondents
applied for sick leave covering the period August 12-18, 1991. On August 15,
1991, Ms. Belinda Luna, the company nurse, paid private respondent a home
60
visit. However, he was not there. Neither was anybody at home, though the
radio was on Ms. Luna learned from private respondent’s son that his father
was moonlighting as a pedicab driver at Bayanan, Muntinlupa, market.
After petitioner was informed of the incident, private respondent’s
applications for sick leave was disapproved. Then, on Aug. 29, 1991,
petitioner issued a memorandum to private respondent requiring him to
explain within twenty-four (24) hours from receipt why no disciplinary action
should be imposed upon him for his excessive absences without official
leave.
‘SIR, ETO LANG PO ANG MASASAGOT KO SA AKING EXPLANATION SA LOOB
NG SIYAM NA TAON PAGIGING MANGAGAWA NG KOMPANYANG ITO
GINANAP KO NG TAMA AT NAAAYON SA REGULASYON ANG AKING
PAGTATRABAHO. MALIBAN SA DI INAASAHANG MAHIGPIT NA DAHILAN SA
SANHI NG MINSANG PAGPALYA KO SA PAGPASOK.’
On September 21, 1991, petitioner terminated the employment of private
Respondent. Thus, on September 30, 1991, the latter filed a complaint for
illegal dismissal, praying for reinstatement and payment of backwages. The
case was docketed as NLRC NCR Case No 00-09-05668-91 and it was raffled
to Labor Arbiter Manuel R. Caday. 3
On 28 May 1991, Labor Arbiter Caday rendered a decision finding the
dismissal of private respondent illegal, and ordered his reinstatement without
loss of seniority rights and privileges, with full backwages.
In holding that private respondent was illegality dismissed, Labor Arbiter
Caday found that not only were petitioner remiss in according private
respondent the due process requirements of notice and hearing, but, more
importantly, petitioners offered no just cause for his dismissal. Substantiating
his finding that petitioners had no just cause for terminating the services of
Sabuya,.
Aggrieved, petitioners appealed the Labor Arbiter’s decision to the NLRC. On
14 July 1993, respondents NLRC rendered its decision reversing Labor Arbiter
Caday’s decision by ruling that private respondent was dismissed for just
cause. However, due to petitioners’ failure to observe the requirements of
due process in dismissing private respondent, respondent NLRC ordered
petitioners to indemnify private respondent the amount of one thousand
pesos (P1,000.00). Petitioners were also ordered to pay private respondent
separation pay equivalent to one (1) 3.
Issue:
Whether the dismissal is valid
Ruling:
Article 282 of the Labor Code provides the grounds for which an employer
may validly dismiss an employee, among which is gross and habitual neglect
by the employee of his duties.
In the case at bench, it is undisputed that respondent Edwin P. Sabuya had
within a span of almost six (6) years been repeatedly admonished, warned
and suspended for incurring excessive unauthorized absences. Worse, he
was not at home but was out driving a pedicab to earn extra income when
the company nurse visited his residence after he filed an application for sick
leave. Such conduct of respondents Edwin P. Sabuya undoubtedly constitutes
gross and habitual neglect of duties.
In Philippines Geothermal, Inc. v. NLRC 10 , the Court stated
thus:jgc:chanrobles.com.ph
"While it is true that compassion and human consideration should guide the
disposition of cases involving termination of employment since it affects
one’s source or means of livelihood, it should not be overlooked that the
benefits accorded to labor do not include compelling an employer to retain
the services of an employee who has been shown to be a gross liability to
the employer.
The law in protecting the rights of the employees authorizes neither
oppression nor self-destruction of the employer. It should be made clear that
when the law tilts the scale of justice in favor of labor, it is but a recognition
of the inherent economic inequality between labor and management. The
intent is to balance the scale of justice; to put the two parties on relatively
equal positions. There may be cases where the circumstances warrant
favoring labor over the interest of management but never should the scale
be so titled if the result is an injustice to the employer. Justicia nemini
neganda est (Justice is to be denied to none)." ( Citations omitted)
61
Our decision in Filipino, Inc. v. The Honorable Minister Blas F. Ople, Et. Al. 11
does not preclude private respondent’s dismissal for, unlike in Filipino,
respondent Edwin P. Sabuya was given notice that the next time he again
exceeds his allowed vacation and sick leaves, or goes on absence without
official leave, he would be terminated from employment. Private respondent
did not heed the warning. His dismissal from employment is, therefore,
justified.
Finally, on the issue of violation of private respondent’s right to procedural
due process, it is clear that the right was violated when no hearing was
conducted prior to dismissal.
In Wenphil Corporation v. NLRC 13 the Court ordered an employer to pay
P1,000.00 to an employee who was denied due process prior to dismissal. It
should be stressed however that the Court did not intend to fix a value or
price on such right of an employee, for rights, specially the right to due
process, cannot be translated in monetary value. The amount awarded in
such cases was intended to serve as a penalty to the employer who violated
an employee’s right as well as to serve as an example for other employers
inclined to violate their employees rights. Considering the importance of said
right to procedural due process, petitioners should indemnify private
respondent the amount of Five Thousand(P5,000.00)
WHEREFORE, the decision of respondent NLRC is MODIFIED to read as
follows:
The dismissal of private respondent Edwin P. Sabuya is, under the
circumstances of this case, declared valid and justified.
Petitioners are hereby ordered, for humanitarian reasons, to pay respondent
Edwin P. Sabuya separation pay equivalent to one-half (1/2) month salary
for every year of service and to indemnify him the amount of Five Thousand
Pesos (P5,000.00) for failure of petitioners to fully comply with the
requirements of procedural due process.
202. Austria v. NLRC G.R. No. 124382; August 16, 1999
Facts:
Petitioner Pastor Dionisio Austria worked with private respondent Central
Philippine Union Mission Corporation of the Seventh-Day Adventists
(hereinafter “SDA”) for 28 years. SDA is a religious corporation duly
organized and existing under Philippine law. On October 29, 1991, Austria
received a letter of dismissal from SDA, citing misappropriation of
denominational funds, willful breach of trust, serious misconduct, gross and
habitual neglect of duties, and commission of an offense against the person
of employer’s duly authorized representative as grounds for the termination
of his services. The dismissal was in relation to the alleged unremitted
church tithes and offerings amounting to P15,078.10 collected by Austria’s
wife and his alleged acts of violence – such as banging the attaché case on
the table, throwing the telephone and scattering the books – when he visited
the office of Pastor Gideon Buhat on October 16, 1991.
Austria filed a complaint for illegal dismissal against SDA before the Labor
Arbiter. The Labor Arbiter rendered a decision in favor of Austria. The SDA
appealed this decision to the National Labor Relations Commission (NLRC),
which consequently dismissed the case for want of merit. Austria filed a
motion for reconsideration, which resulted in the NLRC reversing its original
decision. In view of this reversal, the SDA also filed a motion for
reconsideration, invoking for the first time on appeal that the Labor Arbiter
has no jurisdiction over the case due to the constitutional provision on the
separation of church and state since the case allegedly involved an
ecclesiastical affair to which the State cannot interfere. The NLRC, without
ruling on the merits, reversed itself once again and dismissed the case for
lack of jurisdiction.
Austria then filed this petition for certiorari under Rule 65 of the Rules of
Court in relation to the resolution issued by the NLRC.
ISSUE: Do the Labor Arbiter and NLRC have jurisdiction over the case?
62
RULING: Yes. The principle of separation of church and state finds no
application in this case.
1. The case at bar does not concern an ecclesiastical or purely religious
affair as to bar the State from taking cognizance of the same. An
ecclesiastical affair is “one that concerns doctrine, creed, or form of
worship of the church, or the adoption and enforcement within a
religious association of needful laws and regulations for the
government of the membership, and the power of excluding from
such associations those deemed unworthy of membership.” Based
on this definition, an ecclesiastical affair involves the relationship
between the church and its members and relate to matters of faith,
religious doctrines, worship and governance of the congregation.
Examples of this so-called ecclesiastical affairs are proceedings for
excommunication, ordinations of religious ministers, administration of
sacraments and other activities with attached religious significance. The case
at bar does not even remotely concern any of these examples.
While the matter at hand relates to the church and its religious minister it
does not ipso facto give the case a religious significance. Simply stated, what
is involved here is the relationship of the church as an employer and the
minister as an employee. It is purely secular and has no relation whatsoever
with the practice of faith, worship or doctrines of the church. In this case,
petitioner was not ex-communicated or expelled from the membership of the
SDA but was terminated from employment. Indeed, the matter of
terminating an employee, which is purely secular in nature, is different from
the ecclesiastical act of expelling a member from the religious congregation.
● Moreover, the grounds invoked for Austria’s dismissal are all based
on Article 282 of the Labor Code which enumerates the just causes
for termination of employment. By this alone, it is palpable that the
reason for Austria’s dismissal is not religious in nature. Coupled with
this is the act of the SDA in furnishing NLRC with a copy of Austria’s
letter of termination. As aptly stated by the Office of the Solicitor
General, this again is an eloquent admission by private respondents
that NLRC has jurisdiction over the case.
Under the Labor Code, the provision which governs the dismissal of
employees, is comprehensive enough to include religious corporations, such
as the SDA, in its coverage. Article 278 of the Labor Code on post-
employment states that “the provisions of this Title shall apply to all
establishments or undertakings, whether for profit or not.”
Obviously, the cited article does not make any exception in favor of a
religious corporation. This is made more evident by the fact that the Rules
Implementing the Labor Code, particularly, Section 1, Rule 1, Book VI on the
Termination of Employment and Retirement, categorically includes religious
institutions in the coverage of the law. With this clear mandate, the SDA
cannot hide behind the mantle of protection of the doctrine of separation of
church and state to avoid its responsibilities as an employer under the Labor
Code.
● Finally, the SDA is estopped from raising the issue of lack of
jurisdiction for the first time on appeal. It is already too late in the
day for private respondents to question the jurisdiction of the NLRC
63
 and the Labor Arbiter since the SDA had fully participated in the
trials and hearings of the case from start to finish.
*On Austria’s termination: The Supreme Court ruled that Austria is entitled to
reinstatement to his former position without loss of seniority right and the
payment of full back wages, his dismissal being illegal for failure of the SDA
to comply with the requirements of valid termination under the Labor Code.
203. G.R. No. 142007 March 28, 2001
MANUEL C. FELIX, petitioner, vs. ENERTECH SYSTEMS INDUSTRIES,
INC. and COURT OF APPEALS, respondents.
MENDOZA, J.:
Facts:
Respondent Enertech System Industries, Incorporated is engaged in the
manufacture of boilers and tanks. Petitioner Manuel C. Felix worked as a
welder/fabricator in respondent company. On August 5, 1994, petitioner and
three other employees, namely, Dante Tunglapan, Hilario Lamog, and
Emerson Yanos, were assigned to install a smokestack at the Big J Feedmills
in Sta. Monica, Bulacan. Petitioner wrote in his DTR that he had worked eight
hours a day on the basis of which his wages were computed.1âwphi1.nêt
The work was estimated to be completed within seven days, but it actually
took the workers until August 17, 1994, or about two weeks, before it was
finished. On that day, petitioner and his three co-employees were each given
notice by respondent, accusing them that their acts of reporting at [the] Big
J jobsite at around eleven o'clock in the morning and leaving said site at two
o'clock constitutes Abandonment of Work which is [a] violation of our
Company Code on Employees Discipline that warrants a penalty of
DISMISSAL.
Therefore, you are hereby given 24 hours to explain your side on the said
matter.2
The next day, August 18, 1994, petitioner and his co-workers were placed
under preventive suspension for seven working days. an affidavit executed
by Emerson G. Yanos, stated that petitioner and his co-worker Dante
Tunglapan usually arrived for work at the Big J Feedmills between 9:30 to
10:00 a.m., stopped working at 12:00 noon, then resumed work at 1:00
p.m., continuing until 3:00 p.m. Before going home, they had snacks.
Reynaldo Tapiru, petitioner's co-employee and neighbor in Sitio Kabanatuan,
Valenzuela, also stated in an affidavit 5 that he had seen petitioner either in
his house or within their compound on August 6, 7, 8, and 14, 1994,
between 3 and 4 o'clock in the afternoon, when he was supposed to be
working at the Big J Feedmills in Bulacan at that time.
on October 17, 1994, it issued a memorandum 7 placing petitioner under
preventive suspension for 30 days. Finally, on November 21, 1994,
respondent sent petitioner a memorandum terminating his employment on
the grounds of dishonest (for falsifying time cards) and insubordination.
Petitioner filed a complaint for illegal dismissal against respondent before the
Arbitration Branch of the NLRC. On June 19, 1997, Labor Arbiter Arthur
Amansec rendered a decision finding petitioner to have been illegally
dismissed and ordering respondent to reinstate complainant with backwages
and pay his proportionate 13th month pay for 1994.
Respondent appealed to the NLRC. Pending appeal, a writ of execution was
issued on September 23, 1997 directing respondent to reinstate petitioner
either physically or in the payroll.
On October 10, 1997, respondent filed an omnibus motion 10 arguing that
reinstatement was no longer possible as the violations of company rules
committed by petitioner had caused strained relations and loss of trust
between petitioner and itself.
On June 17, 1998, the NLRC rendered a decision reversing the labor arbiter's
decision and dismissing petitioner's complaint for illegal dismissal for lack of
merit. The NLRC found sufficient evidence to prove that petitioner put in less
than the required eight hours daily work during his detail at the Big J
Feedmills and, therefore, held that his dismissal was in accordance with the
Company Code of Discipline and the Labor Code.11
64
Petitioner filed a motion for reconsideration, but the same was denied. 12 He
appealed to the Court of Appeals which, on January 6, 2000, affirmed the
dismissal of petitioner although it granted his claim for 13 th month pay. In its
resolution of February 18, 2000, the Court of Appeals denied reconsideration
of its decision. Hence this present petition.
Issue :
Whether the petitioner was illegally dismissed
Petitioner's argument has no merit. The Court of Appeals, taking into account
the findings of the NLRC, the interview with Johnny Legaspi and his
engineer, and the affidavits of Yanos and Tapiru, correctly concluded that
there was substantial evidence presented showing that petitioner did not
really work eight hours a day, as he had stated in his time cards. 14
We find the petitioner's dismissal to be in order. Falsification of
time cards constitutes serious misconduct and dishonesty or
fraud,17 which are just causes for the termination of
employment under Art. 282(a) and (c) of the Labor Code which
provides:
ART. 282. Termination by employer. - An employer may
terminate an employment for any of the following causes:
(a) Serious misconduct or willful disobedience by the employee
of the lawful orders of his employer or representative in
connection with his work;
……….
(c) Fraud or willful breach by the employee of the trust reposed
in him by his employer or duly authorized representative;
(Emphasis added)
As to the labor arbiter's observation that a timekeeper should
have been assigned to the Big J Feedmills, we think the Court of
Appeals correctly disposed of the same, thus:
Employees are hired in order to foster the employer's business,
and company rules and regulations are part of such goal. If we
adhere to the labor arbiter's view that a timekeeper should have
been placed by private respondent or to commission the latter's
client to act as timekeeper, it would be an additional burden not
only on the part of private respondent but also on its client. It
would be contrary to every business motto that "clients should
be given utmost satisfaction and convenience." Moreover, if
every time an assignment is given to an employee, the
employer will send out someone to spy, the atmosphere of
harmonious relationship between the employer and its
employees will be beclouded, thundering forth suspicion and
distrust among themselves.18
204. G.R. No. L-101438 October 13, 1992
CATHEDRAL SCHOOL OF TECHNOLOGY and SR. APOLINARIA
TAMBIEN, RVM, petitioners, vs. NATIONAL LABOR RELATIONS
COMMISSION and TERESITA VALLEJERA, respondents.
Facts:
The records disclose that in February, 1981, private respondent Teresita
Vallejera sought admission as an aspirant to the Congregation of the
Religious of Virgin Mary (RVM), upon the recommendation of Archbishop
Patrick Cronin. In order to observe the life of a religious, she came to live
with the sisters of the congregation and received free board and lodging at
the house of the nuns. she volunteered to assist as a library aide in the
library section of the Cathedral School of Technology, an educational
institution run by the RVM sisters. In return for her work as such, she was
given a monthly allowance of P200.00.
65
Private respondent confessed to the sisters that she was no longer interested
in becoming a nun. She pleaded, however, to be allowed to continue living
with the sisters, in exchange therefor, she voluntarily continued to assist in
the school library.
On January 29, 1988, private respondent formally applied for and was
appointed to the position of library aide with a monthly salary of P1,171.00.
The sisters began receiving complaints' from students and employees about
private respondent's difficult personality and sour disposition at work.
Petitioner also informed private respondent of the negative reports received
by her office regarding the latter's frictional working relationship with co-
workers and students and reminded private respondent about the proper
attitude and behavior that should be observed in the interest of peace and
harmony in the school library.
Private respondent resented the observations about her actuations and was
completely unreceptive to the advice given by her superior..
On June 15, 1989, Sister Apolinaria sent a letter 2 formally informing private
respondent that she had a month from said date or until July 15, 1989 to
look for another job as the school had decided to accept her resignation.
Private respondent then filed a complaint for illegal deduction and
underpayment of salary, overtime pay and service incentive pay. On July 19,
1989, she was prevented from entering the school premises by one Sister
Virginia Villamino in view of her dismissal from the service as per the
aforestated letter of June 15, 1989. Consequently, private respondent
amended her complaint to include illegal dismissal. 4
private respondent alleges that on June 2, 1989, she was forced by
petitioner school directress to tender her resignation but she refused. She
was informed that her services would be terminated effective July 15, 1989
through the letter dated June 15, 1989.On July 19, 1989 she was barred
from entering the school due to the fact that she had already been
dismissed. She requested that she be furnished a copy of the termination
paper but she was told that the letter of June 15, 1989 served that purpose.
Hence, her complaint for illegal dismissal.
On May 21, 1990, the labor arbiter rendered a decision in favor of private
respondent, holding that she was illegally dismissed for lack of due process,
The complementary adjudication was to the effect that private respondent
was not entitled to reinstatement with backwages, but the payment of
separation pay was ordered as an appropriate remedy under the
circumstances
On appeal, the NLRC affirmed the labor arbiter's decision, with the
modifications stated at the outset of this opinion, on the rational that while
petitioners had valid reasons to terminate the services of private respondent,
the dismissal was nonetheless illegal for lack of due process, hence the
award of backwages, separation pay and attorney's fees.
Issue: whether or not the NLRC committed grave abuse of discretion in
ordering the payment of said monetary claims where the dismissal is illegal
for denial of due process but there is a finding of a valid ground for
termination.
Public respondent correctly observed that before ruling on the legality or
illegality of the dismissal, the matter of the existence of an employer-
employee relationship must first be clearly settled for such finding is
determinative of and subsumes the claims raised in connection with the
charge of illegal dismissal. After assessing the pleadings and evidence of the
parties, public respondent found reason to approve and adopt the labor
arbiter's findings on the point, thus:
Teresita Vallejera was a regular employee of respondent, Cathedral School of
Technology. And as intimated earlier, the resolution of the issue of employer-
employee relationship will plays (sic) a decisive role in the other claims of
complainant. The finding that the complainant was at regular employee of
respondents is predicated on the fact that her assignment as a library aide
was necessary and/or desirable in the business of the respondents which
was operating an educational institution. Necessity and/or desirability is the
gauge mandated by Art. 280 of the Labor Code as amended in determining
the status of an employee.
Needless to say a library (a)ide is practically indispensable in running a
school. Her status, however, as a regular employee should not date back to
her first connection with the school on February 11, 1981. complainant prior
to January 29, 1988 was a library aide of respondent only on a volunteer
basis. The deduction that complainant was a regular worker from January
30, 1988 is also bolstered by the fact that respondent Sr. Ma. Apolinaria
66
Tambien herself, in her letter dated June 15, 1989 admitted that she and
complainant were employer and employee,.
OnJanuary 29, 1988 complainant applied to be appointed as a regular library
aide. From January 20, (sic, 30) 1988, therefore, complainant became a
regular worker. To rule otherwise would be the height of injustice as it would
result in unjust enrichment on the part of respondent. Moreover, if
respondent did not wish to hire complainant, then it should have done so
upon receipt of paid letter-application. 9
The existence of an employer-employee relationship is essentially a factual
question and the respondent commission's findings thereon are accorded
great weight and respect and even finality when the same are supported by
substantial evidence. We find no reason to overrule the same.
An evaluative review of the records of this case nonetheless
supports a finding of a just cause for termination. The reason
for which private respondent's services were terminated,
namely, her unreasonable behavior and unpleasant deportment
in dealing with the people she closely works with in the course
of her employment, is analogous to the other "just causes"
enumerated under the Labor Code.
Petitioners' averments on private respondent's disagreeable
character — "quarrelsome, bossy, unreasonable and very
difficult to deal with" — are supported by the various
testimonies of several co-employees and students of the
school.. The conduct she exhibited on that occasion smacks of
sheer disrespect and defiance of authority and assumes the
proportion of serious misconduct or insubordination, any of
which constitutes just cause for dismissal from employment.
As petitioner school is run by a religious order, it is expected that good
behavior and proper deportment, especially among the ranks of its own
employees, are major considerations in the fulfillment of its mission. Under
the circumstances, the sisters cannot be faulted for deciding to terminate
private respondent whose presence "has become more a burden rather than
a joy" and had proved. to be disruptive of the harmonious atmosphere of the
school.
Moreover, there is no dispute as to the existence of such just cause for
petitioners have presented sufficient evidence attesting to private
respondent's unsavory character. On the other hand, no evidence was
offered by private respondent to controvert the charges and statements of
petitioners and their witnesses, beyond a general denial that the same were
"imaginal (sic) and "fanciful" along with unsubstantiated allegations that her
dismissal was allegedly due to her union activities.
On the matter of illegal dismissal, petitioners do not dispute the findings, and
in effect admit, that private respondent was denied her right to due process.
As found by the labor arbiter, no hearing on the impending dismissal was
conducted as would have afforded private respondent an opportunity to
explain her side and, if need be, to defend herself. True, petitioners notified
her of the school's decision to terminate her services. But notice alone,
without the requisite hearing does not suffice. Albeit with some ambiguity
which will hereafter be clarified, this Court has held that:
Under the Labor Code, as amended, the requirements of lawful dismissal of
an employee by his employer are two-fold: the substantive and the
procedural. Not only must the dismissal be for a valid or authorized cause as
provided by law (Arts. 279, 281, 282-284), but the rudimentary requirements
of due process — notice and hearing— must also be observed before an
employee may be dismissed (Art. 277 [b]). One cannot go without the other,
for otherwise the termination would, in the eyes of the law, be illegal. 14
Nevertheless, we find no merit in public respondent's ratiocination, quoting
the labor arbiter, that:
It is likewise the finding (of) and this Branch so holds that complainant was
illegally dismissed. This finding is anchored on the lack of due process. In
this case complainant was not afforded the opportunity to defend herself in a
hearing called for the purpose. She was just summarily dismissed contrary to
the provision(s) of Batas Pambansa Bilang 130 and its Implementing Rules.
15
Clearly, therefore, its ruling that private respondent was illegally dismissed
was premised solely on the fact of alleged lack of procedural due process,
67
without regard to whether or not there was lawful cause for such dismissal,
which latter aspect constitutes the element of substantive due process.
Verily, an award for payment of separation pay presupposes that the illegally
dismissed employee would otherwise have been entitled to reinstatement.
Where, as in this case, there is sufficient basis to dismiss private respondent
(aside from the obvious existence of strained relations between the parties)
which accordingly is a lawful impediment to her reinstatement, an award for
separation pay would be a specious inconsistency. Not being entitled to
reinstatement, private respondent cannot legally be entitled to separation
pay.
Finally, private respondent is not entitled to recover attorney's fees since the
instant case clearly does not fall under either the general rule therefore or
any of the exceptions thereto as enunciated in Article 2208 of the Civil Code.
IN VIEW OF ALL THE FOREGOING, the dispositions of public respondent in
its resolution dated June 24, 1992 are hereby ANNULLED and SET ASIDE.
Petitioners are, however, ordered to INDEMNIFY private respondent in the
amount of P1,000.00 concordant with the current jurisprudential norm.
SO ORDERED.
205. G.R. No. 168081, October 17, 2008
ARMANDO G. YRASUEGUI, petitioners, vs. PHILIPPINE AIRLINES,
INC., respondents.
FACTS: THIS case portrays the peculiar story of an international flight
steward who was dismissed because of his failure to adhere to the weight
standards of the airline company.
The proper weight for a man of his height and body structure is from 147 to
166 pounds, the ideal weight being 166 pounds, as mandated by the Cabin
and Crew Administration Manual of PAL.
In 1984, the weight problem started, which prompted PAL to send him to an
extended vacation until November 1985. He was allowed to return to work
once he lost all the excess weight. But the problem recurred. He again went
on leave without pay from October 17, 1988 to February 1989.
Despite the lapse of a ninety-day period given him to reach his ideal weight,
petitioner remained overweight. On January 3, 1990, he was informed of the
PAL decision for him to remain grounded until such time that he satisfactorily
complies with the weight standards. Again, he was directed to report every
two weeks for weight checks, which he failed to comply with.
On April 17, 1990, petitioner was formally warned that a repeated refusal to
report for weight check would be dealt with accordingly. He was given
another set of weight check dates, which he did not report to.
On November 13, 1992, PAL finally served petitioner a Notice of
Administrative Charge for violation of company standards on weight
requirements. Petitioner insists that he is being discriminated as those
similarly situated were not treated the same.
On June 15, 1993, petitioner was formally informed by PAL that due to his
inability to attain his ideal weight, “and considering the utmost leniency”
extended to him “which spanned a period covering a total of almost five (5)
years,” his services were considered terminated “effective immediately.”
LABOR ARBITER: held that the weight standards of PAL are reasonable in
view of the nature of the job of petitioner. However, the weight standards
need not be complied with under pain of dismissal since his weight did not
hamper the performance of his duties.
NLRC affirmed.
CA: the weight standards of PAL are reasonable. Thus, petitioner was legally
dismissed because he repeatedly failed to meet the prescribed weight
standards. It is obvious that the issue of discrimination was only invoked by
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petitioner for purposes of escaping the result of his dismissal for being
overweight.
ISSUE: WON he was validly dismissed.
HELD: YES
A reading of the weight standards of PAL would lead to no other conclusion
than that they constitute a continuing qualification of an employee in order
to keep the job. The dismissal of the employee would thus fall under Article
282(e) of the Labor Code.
In the case at bar, the evidence on record militates against petitioner’s
claims that obesity is a disease. That he was able to reduce his weight from
1984 to 1992 clearly shows that it is possible for him to lose weight given the
proper attitude, determination, and self-discipline. Indeed, during the
clarificatory hearing on December 8, 1992, petitioner himself claimed that
“[t]he issue is could I bring my weight down to ideal weight which is 172,
then the answer is yes. I can do it now.”
Petitioner has only himself to blame. He could have easily availed the
assistance of the company physician, per the advice of PAL.
In fine, We hold that the obesity of petitioner, when placed in the context of
his work as flight attendant, becomes an analogous cause under Article
282(e) of the Labor Code that justifies his dismissal from the service. His
obesity may not be unintended, but is nonetheless voluntary. As the CA
correctly puts it, “[v]oluntariness basically means that the just cause is solely
attributable to the employee without any external force influencing or
controlling his actions. This element runs through all just causes under
Article 282, whether they be in the nature of a wrongful action or omission.
Gross and habitual neglect, a recognized just cause, is considered voluntary
although it lacks the element of intent found in Article 282(a), (c), and (d).”
NOTES:
The dismissal of petitioner can be predicated on the bona fide occupational
qualification defense. Employment in particular jobs may not be limited to
persons of a particular sex, religion, or national origin unless the employer
can show that sex, religion, or national origin is an actual qualification for
performing the job. The qualification is called a bona fide occupational
qualification (BFOQ). In short, the test of reasonableness of the company
policy is used because it is parallel to BFOQ. BFOQ is valid “provided it
reflects an inherent quality reasonably necessary for satisfactory job
performance.”
The business of PAL is air transportation. As such, it has committed itself to
safely transport its passengers. In order to achieve this, it must necessarily
rely on its employees, most particularly the cabin flight deck crew who are
on board the aircraft. The weight standards of PAL should be viewed as
imposing strict norms of discipline upon its employees.
The primary objective of PAL in the imposition of the weight standards for
cabin crew is flight safety.
Separation pay, however, should be awarded in favor of the employee as an
act of social justice or based on equity. This is so because his dismissal is not
for serious misconduct. Neither is it reflective of his moral character.
206. JPL MARKETING PROMOTIONS v. NATIONAL LABOR
RELATIONS COMMISSION, NOEL GONZALES, RAMON ABESA III and
FAUSTINO ANINIPOT,
G.R. No. 151966/July 8, 2005/Tinga, J.:
FACTS: JPL Marketing and Promotions (hereinafter referred to as “JPL”) is a
domestic corporation engaged in the business of recruitment and placement
of workers. On the other hand, private respondents Noel Gonzales, Ramon
Abesa III and Faustino Aninipot were employed by JPL as merchandisers on
separate dates and assigned at different establishments in Naga City and
Daet, Camarines Norte as attendants to the display of California Marketing
Corporation (CMC), one of petitioner’s clients.
69
 On 13 August 1996, JPL notified private respondents that CMC would
stop its direct merchandising activity in the Bicol Region, Isabela, and
Cagayan Valley effective 15 August 1996. They were advised to wait for
further notice as they would be transferred to other clients. However, on 17
October 1996, private respondents Abesa and Gonzales filed before the
NLRC complaints for illegal dismissal, praying for separation pay, 13th month
pay, service incentive leave pay and payment for moral damages. Aninipot
filed a similar case thereafter.
benefits are given by law on the basis of the service actually rendered by the
employee, and in the particular case of the service incentive leave, is granted
as a motivation for the employee to stay longer with the employer. There is
no cause for granting said incentive to one who has already terminated his
relationship with the employer.

It must be noted that private respondents were not given their 13th month
pay and service incentive leave pay while they were under the employ of
JPL. Instead, JPL provided salaries which were over and above the minimum
wage.

ISSUE: Whether or not the 13th month pay and service incentive leave pay
should be computed from the start of employment up to the finality of the
NLRC resolution.

RULING: Service incentive leave, as provided in Art. 95 of the Labor Code, is

a yearly leave benefit of five (5) days with pay, enjoyed by an employee who
has rendered at least one year of service. Unless specifically excepted, all
establishments are required to grant service incentive leave to their
employees. The term “at least one year of service” shall mean service within
twelve (12) months, whether continuous or broken reckoned from the date
the employee started working. The Court has held in several instances that
“service incentive leave is clearly demandable after one year of service.”

While computation for the 13th month pay should properly begin from the
first day of employment, the service incentive leave pay should start a year
after commencement of service, for it is only then that the employee is
entitled to said benefit. On the other hand, the computation for both
benefits should only be up to 15 August 1996, or the last day that private
respondents worked for JPL. To extend the period to the date of finality of
the NLRC resolution would negate the absence of illegal dismissal, or to be
more precise, the want of dismissal in this case. Besides, it would be unfair
to require JPL to pay private respondents the said benefits beyond 15 August
1996 when they did not render any service to JPL beyond that date. These
70