Labor Relations Case No.
1 | 1
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 85985 August 13, 1993
PHILIPPINE AIRLINES, INC. (PAL), petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER
ISABEL P. ORTIGUERRA and PHILIPPINE AIRLINES EMPLOYEES
ASSOCIATION (PALEA), respondents.
Solon Garcia for petitioner.
Adolpho M. Guerzon for respondent PALEA.
MELO, J.:
In the instant petition for certiorari, the Court is presented the issue of
whether or not the formulation of a Code of Discipline among employees is a
shared responsibility of the employer and the employees.
On March 15, 1985, the Philippine Airlines, Inc. (PAL) completely revised its
1966 Code of Discipline. The Code was circulated among the employees and
was immediately implemented, and some employees were forthwith
subjected to the disciplinary measures embodied therein.
Thus, on August 20, 1985, the Philippine Airlines Employees Association
(PALEA) filed a complaint before the National Labor Relations Commission
(NLRC) for unfair labor practice (Case No. NCR-7-2051-85) with the following
remarks: "ULP with arbitrary implementation of PAL's Code of Discipline
without notice and prior discussion with Union by Management" (Rollo, p.
41). In its position paper, PALEA contended that PAL, by its unilateral
implementation of the Code, was guilty of unfair labor practice, specifically
Paragraphs E and G of Article 249 and Article 253 of the Labor Code. PALEA
alleged that copies of the Code had been circulated in limited numbers; that
being penal in nature the Code must conform with the requirements of
sufficient publication, and that the Code was arbitrary, oppressive, and
prejudicial to the rights of the employees. It prayed that implementation of the
Code be held in abeyance; that PAL should discuss the substance of the
Code with PALEA; that employees dismissed under the Code be reinstated
and their cases subjected to further hearing; and that PAL be declared guilty
of unfair labor practice and be ordered to pay damages (pp. 7-14, Record.)
PAL filed a motion to dismiss the complaint, asserting its prerogative as an
employer to prescibe rules and regulations regarding employess' conduct in
carrying out their duties and functions, and alleging that by implementing the
Code, it had not violated the collective bargaining agreement (CBA) or any
provision of the Labor Code. Assailing the complaint as unsupported by
evidence, PAL maintained that Article 253 of the Labor Code cited by PALEA
reffered to the requirements for negotiating a CBA which was inapplicable as
indeed the current CBA had been negotiated.
In its reply to PAL's position paper, PALEA maintained that Article 249 (E) of
the Labor Code was violated when PAL unilaterally implemented the Code,
and cited provisions of Articles IV and I of Chapter II of the Code as defective
for, respectively, running counter to the construction of penal laws and
making punishable any offense within PAL's contemplation. These provisions
are the following:
Sec. 2. Non-exclusivity. — This Code does not contain the
entirety of the rules and regulations of the company. Every
employee is bound to comply with all applicable rules,
regulations, policies, procedures and standards, including
standards of quality, productivity and behaviour, as issued
and promulgated by the company through its duly authorized
officials. Any violations thereof shall be punishable with a
penalty to be determined by the gravity and/or frequency of
the offense.
Sec. 7. Cumulative Record. — An employee's record of
offenses shall be cumulative. The penalty for an offense
shall be determined on the basis of his past record of
offenses of any nature or the absence thereof. The more
habitual an offender has been, the greater shall be the
penalty for the latest offense. Thus, an employee may be
dismissed if the number of his past offenses warrants such
penalty in the judgment of management even if each offense
considered separately may not warrant dismissal. Habitual
Labor Relations Case No. 1 | 2
offenders or recidivists have no place in PAL. On the other
hand, due regard shall be given to the length of time
between commission of individual offenses to determine
whether the employee's conduct may indicate occasional
lapses (which may nevertheless require sterner disciplinary
action) or a pattern of incorrigibility.
Labor Arbiter Isabel P. Ortiguerra handling the case called the parties to a
conference but they failed to appear at the scheduled date. Interpreting such
failure as a waiver of the parties' right to present evidence, the labor arbiter
considered the case submitted for decision. On November 7, 1986, a
decision was rendered finding no bad faith on the part of PAL in adopting the
Code and ruling that no unfair labor practice had been committed. However,
the arbiter held that PAL was "not totally fault free" considering that while the
issuance of rules and regulations governing the conduct of employees is a
"legitimate management prerogative" such rules and regulations must meet
the test of "reasonableness, propriety and fairness." She found Section 1 of
the Code aforequoted as "an all embracing and all encompassing provision
that makes punishable any offense one can think of in the company"; while
Section 7, likewise quoted above, is "objectionable for it violates the rule
against double jeopardy thereby ushering in two or more punishment for the
same misdemeanor." (pp. 38-39, Rollo.)
The labor arbiter also found that PAL "failed to prove that the new Code was
amply circulated." Noting that PAL's assertion that it had furnished all its
employees copies of the Code is unsupported by documentary evidence, she
stated that such "failure" on the part of PAL resulted in the imposition of
penalties on employees who thought all the while that the 1966 Code was
still being followed. Thus, the arbiter concluded that "(t)he phrase ignorance
of the law excuses no one from compliance . . . finds application only after it
has been conclusively shown that the law was circulated to all the parties
concerned and efforts to disseminate information regarding the new law have
been exerted. (p. 39, Rollo.) She thereupon disposed:
WHEREFORE, premises considered, respondent PAL is
hereby ordered as follows:
1. Furnish all employees with the new Code of Discipline;
2. Reconsider the cases of employees meted with penalties
under the New Code of Discipline and remand the same for
further hearing; and
3. Discuss with PALEA the objectionable provisions
specifically tackled in the body of the decision.
All other claims of the complainant union (is) [are] hereby,
dismissed for lack of merit.
SO ORDERED. (p. 40, Rollo.)
PAL appealed to the NLRC. On August 19, 1988, the NLRC through
Commissioner Encarnacion, with Presiding Commissioner Bonto-Perez and
Commissioner Maglaya concurring, found no evidence of unfair labor
practice committed by PAL and affirmed the dismissal of PALEA's charge.
Nonetheless, the NLRC made the following observations:
Indeed, failure of management to discuss the provisions of a
contemplated code of discipline which shall govern the
conduct of its employees would result in the erosion and
deterioration of an otherwise harmonious and smooth
relationship between them as did happen in the instant case.
There is no dispute that adoption of rules of conduct or
discipline is a prerogative of management and is imperative
and essential if an industry, has to survive in a competitive
world. But labor climate has progressed, too. In the
Philippine scene, at no time in our contemporary history is
the need for a cooperative, supportive and smooth
relationship between labor and management more keenly
felt if we are to survive economically. Management can no
longer exclude labor in the deliberation and adoption of rules
and regulations that will affect them.
The complainant union in this case has the right to feel
isolated in the adoption of the New Code of Discipline. The
Code of Discipline involves security of tenure and loss of
employment — a property right! It is time that management
realizes that to attain effectiveness in its conduct rules, there
should be candidness and openness by Management and
participation by the union, representing its members. In fact,
our Constitution has recognized the principle of "shared
responsibility" between employers and workers and has
likewise recognized the right of workers to participate in
"policy and decision-making process affecting their
rights . . ." The latter provision was interpreted by the
Constitutional Commissioners to mean participation in
Labor Relations Case No. 1 | 3
"management"' (Record of the Constitutional Commission,
Vol. II).
In a sense, participation by the union in the adoption of the
code if conduct could have accelerated and enhanced their
feelings of belonging and would have resulted in cooperation
rather than resistance to the Code. In fact, labor-
management cooperation is now "the thing." (pp. 3-4, NLRC
Decision ff. p. 149, Original Record.)
Respondent Commission thereupon disposed:
WHEREFORE, premises considered, we modify the
appealed decision in the sense that the New Code of
Discipline should be reviewed and discussed with
complainant union, particularly the disputed provisions [.]
(T)hereafter, respondent is directed to furnish each
employee with a copy of the appealed Code of Discipline.
The pending cases adverted to in the appealed decision if
still in the arbitral level, should be reconsidered by the
respondent Philippine Air Lines. Other dispositions of the
Labor Arbiter are sustained.
SO ORDERED. (p. 5, NLRC Decision.)
PAL then filed the instant petition for certiorari  charging public respondents
with grave abuse of discretion in: (a) directing PAL "to share its management
prerogative of formulating a Code of Discipline"; (b) engaging in quasi-judicial
legislation in ordering PAL to share said prerogative with the union; (c)
deciding beyond the issue of unfair labor practice, and (d) requiring PAL to
reconsider pending cases still in the arbitral level (p. 7, Petition; p. 8, Rollo.)
As stated above, the Principal issue submitted for resolution in the instant
petition is whether management may be compelled to share with the union or
its employees its prerogative of formulating a code of discipline.
PAL asserts that when it revised its Code on March 15, 1985, there was no
law which mandated the sharing of responsibility therefor between employer
and employee.
Indeed, it was only on March 2, 1989, with the approval of Republic Act No.
6715, amending Article 211 of the Labor Code, that the law explicitly
considered it a State policy "(t)o ensure the participation of workers in
decision and policy-making processes affecting the rights, duties and
welfare." However, even in the absence of said clear provision of law, the
exercise of management prerogatives was never considered boundless.
Thus, in Cruz vs. Medina  (177 SCRA 565 [1989]) it was held that
management's prerogatives must be without abuse of discretion.
In San Miguel Brewery Sales Force Union (PTGWO) vs. Ople  (170 SCRA 25
[1989]), we upheld the company's right to implement a new system of
distributing its products, but gave the following caveat:
So long as a company's management prerogatives are
exercised in good faith for the advancement of the
employer's interest and not for the purpose of defeating or
circumventing the rights of the employees under special laws
or under valid agreements, this Court will uphold them.
(at p. 28.)
All this points to the conclusion that the exercise of managerial prerogatives
is not unlimited. It is circumscribed by limitations found in law, a collective
bargaining agreement, or the general principles of fair play and justice
(University of Sto. Tomas vs. NLRC, 190 SCRA 758 [1990]). Moreover, as
enunciated in Abbott Laboratories (Phil.), vs. NLRC  (154 713 [1987]), it must
be duly established that the prerogative being invoked is clearly a managerial
one.
A close scrutiny of the objectionable provisions of the Code reveals that they
are not purely business-oriented nor do they concern the management
aspect of the business of the company as in the San Miguel case. The
provisions of the Code clearly have repercusions on the employee's right to
security of tenure. The implementation of the provisions may result in the
deprivation of an employee's means of livelihood which, as correctly pointed
out by the NLRC, is a property right (Callanta, vs Carnation Philippines, Inc.,
145 SCRA 268 [1986]). In view of these aspects of the case which border on
infringement of constitutional rights, we must uphold the constitutional
requirements for the protection of labor and the promotion of social justice,
for these factors, according to Justice Isagani Cruz, tilt "the scales of justice
when there is doubt, in favor of the worker" (Employees Association of the
Philippine American Life Insurance Company vs. NLRC, 199 SCRA 628
[1991] 635).
Verily, a line must be drawn between management prerogatives regarding
business operations  per se and those which affect the rights of the
Labor Relations Case No. 1 | 4

employees. In treating the latter, management should see to it that its
employees are at least properly informed of its decisions or modes action.
PAL asserts that all its employees have been furnished copies of the Code.
Public respondents found to the contrary, which finding, to say the least is
entitled to great respect.
PAL posits the view that by signing the 1989-1991 collective bargaining
agreement, on June 27, 1990, PALEA in effect, recognized PAL's "exclusive
right to make and enforce company rules and regulations to carry out the
functions of management without having to discuss the same with PALEA
and much less, obtain the latter's conformity thereto" (pp. 11-12, Petitioner's
Memorandum; pp 180-181, Rollo.) Petitioner's view is based on the following
provision of the agreement:
The Association recognizes the right of the Company to
determine matters of management it policy and Company
operations and to direct its manpower. Management of the
Company includes the right to organize, plan, direct and
control operations, to hire, assign employees to work,
transfer employees from one department, to another, to
promote, demote, discipline, suspend or discharge
employees for just cause; to lay-off employees for valid and
legal causes, to introduce new or improved methods or
facilities or to change existing methods or facilities and the
right to make and enforce Company rules and regulations to
carry out the functions of management.
that it cannot be saddled with the "obligation" of sharing management
prerogatives as during the formulation of the Code, Republic Act No. 6715
had not yet been enacted (Petitioner's Memorandum, p. 44; Rollo, p. 212),
cannot thus be sustained. While such "obligation" was not yet founded in law
when the Code was formulated, the attainment of a harmonious labor-
management relationship and the then already existing state policy of
enlightening workers concerning their rights as employees demand no less
than the observance of transparency in managerial moves affecting
employees' rights.
Petitioner's assertion that it needed the implementation of a new Code of
Discipline considering the nature of its business cannot be overemphasized.
In fact, its being a local monopoly in the business demands the most
stringent of measures to attain safe travel for its patrons. Nonetheless,
whatever disciplinary measures are adopted cannot be properly implemented
in the absence of full cooperation of the employees. Such cooperation cannot
be attained if the employees are restive on account, of their being left out in
the determination of cardinal and fundamental matters affecting their
employment.
WHEREFORE, the petition is DISMISSED and the questioned decision
AFFIRMED. No special pronouncement is made as to costs.
SO ORDERED.

The exercise by management of its prerogative shall be

done in a just reasonable, humane and/or lawful manner.

Such provision in the collective bargaining agreement may not be interpreted

as cession of employees' rights to participate in the deliberation of matters
which may affect their rights and the formulation of policies relative thereto.
And one such mater is the formulation of a code of discipline.

Indeed, industrial peace cannot be achieved if the employees are denied

their just participation in the discussion of matters affecting their rights. Thus,
even before Article 211 of the labor Code (P.D. 442) was amended by
Republic Act No. 6715, it was already declared a policy of the State, "(d) To
promote the enlightenment of workers concerning their rights and
obligations . . . as employees." This was, of course, amplified by Republic Act
No 6715 when it decreed the "participation of workers in decision and policy
making processes affecting their rights, duties and welfare." PAL's position
Labor Relations Case No. 1 | 5
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 172013               October 2, 2009
PATRICIA HALAGUEÑA, MA. ANGELITA L. PULIDO, MA. TERESITA P.
SANTIAGO, MARIANNE V. KATINDIG, BERNADETTE A. CABALQUINTO,
LORNA B. TUGAS, MARY CHRISTINE A. VILLARETE, CYNTHIA A.
STEHMEIER, ROSE ANNA G. VICTA, NOEMI R. CRESENCIO, and other
flight attendants of PHILIPPINE AIRLINES, Petitioners,
vs.
PHILIPPINE AIRLINES INCORPORATED, Respondent.
DECISION
PERALTA, J.:
Before this Court is a petition for review on certiorari under Rule 45 of the
Rules of Court seeking to annul and set aside the Decision 1 and the
Resolution2 of the Court of Appeals (CA) in CA-G.R. SP. No. 86813.
Petitioners were employed as female flight attendants of respondent
Philippine Airlines (PAL) on different dates prior to November 22, 1996. They
are members of the Flight Attendants and Stewards Association of the
Philippines (FASAP), a labor organization certified as the sole and exclusive
certified as the sole and exclusive bargaining representative of the flight
attendants, flight stewards and pursers of respondent.
On July 11, 2001, respondent and FASAP entered into a Collective
Bargaining Agreement3 incorporating the terms and conditions of their
agreement for the years 2000 to 2005, hereinafter referred to as PAL-FASAP
CBA.
Section 144, Part A of the PAL-FASAP CBA, provides that:
A. For the Cabin Attendants hired before 22 November 1996:
xxxx
3. Compulsory Retirement
Subject to the grooming standards provisions of this Agreement, compulsory
retirement shall be fifty-five (55) for females and sixty (60) for males. x x x.
In a letter dated July 22, 2003,4 petitioners and several female cabin crews
manifested that the aforementioned CBA provision on compulsory retirement
is discriminatory, and demanded for an equal treatment with their male
counterparts. This demand was reiterated in a letter5 by petitioners' counsel
addressed to respondent demanding the removal of gender discrimination
provisions in the coming re-negotiations of the PAL-FASAP CBA.
On July 12, 2004, Robert D. Anduiza, President of FASAP submitted their
2004-2005 CBA proposals6 and manifested their willingness to commence
the collective bargaining negotiations between the management and the
association, at the soonest possible time.
On July 29, 2004, petitioners filed a Special Civil Action for Declaratory Relief
with Prayer for the Issuance of Temporary Restraining Order and Writ of
Preliminary Injunction7 with the Regional Trial Court (RTC) of Makati City,
Branch 147, docketed as Civil Case No. 04-886, against respondent for the
invalidity of Section 144, Part A of the PAL-FASAP CBA. The RTC set a
hearing on petitioners' application for a TRO and, thereafter, required the
parties to submit their respective memoranda.
On August 9, 2004, the RTC issued an Order8 upholding its jurisdiction over
the present case. The RTC reasoned that:
In the instant case, the thrust of the Petition is Sec. 144 of the subject CBA
which is allegedly discriminatory as it discriminates against female flight
attendants, in violation of the Constitution, the Labor Code, and the CEDAW.
The allegations in the Petition do not make out a labor dispute arising from
employer-employee relationship as none is shown to exist. This case is not
directed specifically against respondent arising from any act of the latter, nor
does it involve a claim against the respondent. Rather, this case seeks a
declaration of the nullity of the questioned provision of the CBA, which is
within the Court's competence, with the allegations in the Petition constituting
the bases for such relief sought.
Labor Relations Case No. 1 | 6
The RTC issued a TRO on August 10, 2004,9 enjoining the respondent for
implementing Section 144, Part A of the PAL-FASAP CBA.
The respondent filed an omnibus motion10 seeking reconsideration of the
order overruling its objection to the jurisdiction of the RTC the lifting of the
TRO. It further prayed that the (1) petitioners' application for the issuance of
a writ of preliminary injunction be denied; and (2) the petition be dismissed or
the proceedings in this case be suspended.
On September 27, 2004, the RTC issued an Order11 directing the issuance of
a writ of preliminary injunction enjoining the respondent or any of its agents
and representatives from further implementing Sec. 144, Part A of the PAL-
FASAP CBA pending the resolution of the case.
Aggrieved, respondent, on October 8, 2004, filed a Petition for Certiorari and
Prohibition with Prayer for a Temporary Restraining Order and Writ of
Preliminary Injunction12 with the Court of Appeals (CA) praying that the order
of the RTC, which denied its objection to its jurisdiction, be annuled and set
aside for having been issued without and/or with grave abuse of discretion
amounting to lack of jurisdiction.
The CA rendered a Decision, dated August 31, 2005, granting the
respondent's petition, and ruled that:
WHEREFORE, the respondent court is by us declared to have NO
JURISDICTION OVER THE CASE BELOW and, consequently, all the
proceedings, orders and processes it has so far issued therein are
ANNULED and SET ASIDE. Respondent court is ordered to DISMISS its
Civil Case No. 04-886.
SO ORDERED.
Petitioner filed a motion for reconsideration,13 which was denied by the CA in
its Resolution dated March 7, 2006.
Hence, the instant petition assigning the following error:
THE COURT OF APPEALS' CONCLUSION THAT THE SUBJECT MATTER
IS A LABOR DISPUTE OR GRIEVANCE IS CONTRARY TO LAW AND
JURISPRUDENCE.
The main issue in this case is whether the RTC has jurisdiction over the
petitioners' action challenging the legality or constitutionality of the provisions
on the compulsory retirement age contained in the CBA between respondent
PAL and FASAP.
Petitioners submit that the RTC has jurisdiction in all civil actions in which the
subject of the litigation is incapable of pecuniary estimation and in all cases
not within the exclusive jurisdiction of any court, tribunal, person or body
exercising judicial or quasi-judicial functions. The RTC has the power to
adjudicate all controversies except those expressly witheld from the plenary
powers of the court. Accordingly, it has the power to decide issues of
constitutionality or legality of the provisions of Section 144, Part A of the PAL-
FASAP CBA. As the issue involved is constitutional in character, the labor
arbiter or the National Labor Relations Commission (NLRC) has no
jurisdiction over the case and, thus, the petitioners pray that judgment be
rendered on the merits declaring Section 144, Part A of the PAL-FASAP CBA
null and void.
Respondent, on the other hand, alleges that the labor tribunals have
jurisdiction over the present case, as the controversy partakes of a labor
dispute. The dispute concerns the terms and conditions of petitioners'
employment in PAL, specifically their retirement age. The RTC has no
jurisdiction over the subject matter of petitioners' petition for declaratory relief
because the Voluntary Arbitrator or panel of Voluntary Arbitrators have
original and exclusive jurisdiction to hear and decide all unresolved
grievances arising from the interpretation or implementation of the CBA.
Regular courts have no power to set and fix the terms and conditions of
employment. Finally, respondent alleged that petitioners' prayer before this
Court to resolve their petition for declaratory relief on the merits is
procedurally improper and baseless.
The petition is meritorious.
Jurisdiction of the court is determined on the basis of the material allegations
of the complaint and the character of the relief prayed for irrespective of
whether plaintiff is entitled to such relief.14
In the case at bar, the allegations in the petition for declaratory relief plainly
show that petitioners' cause of action is the annulment of Section 144, Part A
of the PAL-FASAP CBA. The pertinent portion of the petition recites:
CAUSE OF ACTION
Labor Relations Case No. 1 | 7
24. Petitioners have the constitutional right to fundamental equality
with men under Section 14, Article II, 1987 of the Constitution and,
within the specific context of this case, with the male cabin
attendants of Philippine Airlines.
26. Petitioners have the statutory right to equal work and
employment opportunities with men under Article 3, Presidential
Decree No. 442, The Labor Code and, within the specific context of
this case, with the male cabin attendants of Philippine Airlines.
27. It is unlawful, even criminal, for an employer to discriminate
against women employees with respect to terms and conditions of
employment solely on account of their sex under Article 135 of the
Labor Code as amended by Republic Act No. 6725 or the Act
Strengthening Prohibition on Discrimination Against Women.
28. This discrimination against Petitioners is likewise against the
Convention on the Elimination of All Forms of Discrimination Against
Women (hereafter, "CEDAW"), a multilateral convention that the
Philippines ratified in 1981. The Government and its agents,
including our courts, not only must condemn all forms of
discrimination against women, but must also implement measures
towards its elimination.
29. This case is a matter of public interest not only because of
Philippine Airlines' violation of the Constitution and existing laws, but
also because it highlights the fact that twenty-three years after the
Philippine Senate ratified the CEDAW, discrimination against women
continues.
31. Section 114, Part A of the PAL-FASAP 2000-20005 CBA on
compulsory retirement from service is invidiously discriminatory
against and manifestly prejudicial to Petitioners because, they are
compelled to retire at a lower age (fifty-five (55) relative to their male
counterparts (sixty (60).
33. There is no reasonable, much less lawful, basis for Philippine
Airlines to distinguish, differentiate or classify cabin attendants on the
basis of sex and thereby arbitrarily set a lower compulsory retirement
age of 55 for Petitioners for the sole reason that they are women.
37. For being patently unconstitutional and unlawful, Section 114,
Part A of the PAL-FASAP 2000-2005 CBA must be declared invalid
and stricken down to the extent that it discriminates against
petitioner.
38. Accordingly, consistent with the constitutional and statutory
guarantee of equality between men and women, Petitioners should
be adjudged and declared entitled, like their male counterparts, to
work until they are sixty (60) years old.
PRAYER
WHEREFORE, it is most respectfully prayed that the Honorable Court:
c. after trial on the merits:
(I) declare Section 114, Part A of the PAL-FASAP 2000-2005 CBA INVALID,
NULL and VOID to the extent that it discriminates against Petitioners; x x x x
From the petitioners' allegations and relief prayed for in its petition, it is clear
that the issue raised is whether Section 144, Part A of the PAL-FASAP CBA
is unlawful and unconstitutional. Here, the petitioners' primary relief in Civil
Case No. 04-886 is the annulment of Section 144, Part A of the PAL-FASAP
CBA, which allegedly discriminates against them for being female flight
attendants. The subject of litigation is incapable of pecuniary estimation,
exclusively cognizable by the RTC, pursuant to Section 19 (1) of Batas
Pambansa Blg. 129, as amended.15 Being an ordinary civil action, the same
is beyond the jurisdiction of labor tribunals.
The said issue cannot be resolved solely by applying the Labor Code.
Rather, it requires the application of the Constitution, labor statutes, law on
contracts and the Convention on the Elimination of All Forms of
Discrimination Against Women,16 and the power to apply and interpret the
constitution and CEDAW is within the jurisdiction of trial courts, a court of
general jurisdiction. In Georg Grotjahn GMBH & Co. v. Isnani,17 this Court
held that not every dispute between an employer and employee involves
matters that only labor arbiters and the NLRC can resolve in the exercise of
their adjudicatory or quasi-judicial powers. The jurisdiction of labor arbiters
and the NLRC under Article 217 of the Labor Code is limited to disputes
arising from an employer-employee relationship which can only be resolved
by reference to the Labor Code, other labor statutes, or their collective
bargaining agreement.
Labor Relations Case No. 1 | 8
Not every controversy or money claim by an employee against the employer
or vice-versa is within the exclusive jurisdiction of the labor arbiter. Actions
between employees and employer where the employer-employee
relationship is merely incidental and the cause of action precedes from a
different source of obligation is within the exclusive jurisdiction of the regular
court.18 Here, the employer-employee relationship between the parties is
merely incidental and the cause of action ultimately arose from different
sources of obligation, i.e., the Constitution and CEDAW.
Thus, where the principal relief sought is to be resolved not by reference to
the Labor Code or other labor relations statute or a collective bargaining
agreement but by the general civil law, the jurisdiction over the dispute
belongs to the regular courts of justice and not to the labor arbiter and the
NLRC. In such situations, resolution of the dispute requires expertise, not in
labor management relations nor in wage structures and other terms and
conditions of employment, but rather in the application of the general civil
law. Clearly, such claims fall outside the area of competence or expertise
ordinarily ascribed to labor arbiters and the NLRC and the rationale for
granting jurisdiction over such claims to these agencies disappears. 19
If We divest the regular courts of jurisdiction over the case, then which
tribunal or forum shall determine the constitutionality or legality of the
assailed CBA provision?
This Court holds that the grievance machinery and voluntary arbitrators do
not have the power to determine and settle the issues at hand. They have no
jurisdiction and competence to decide constitutional issues relative to the
questioned compulsory retirement age. Their exercise of jurisdiction is futile,
as it is like vesting power to someone who cannot wield it.
In Gonzales v. Climax Mining Ltd.,  this Court affirmed the jurisdiction of
20
courts over questions on constitutionality of contracts, as the same involves
the exercise of judicial power. The Court said:
Whether the case involves void or voidable contracts is still a judicial
question. It may, in some instances, involve questions of fact especially with
regard to the determination of the circumstances of the execution of the
contracts. But the resolution of the validity or voidness of the contracts
remains a legal or judicial question as it requires the exercise of judicial
function. It requires the ascertainment of what laws are applicable to the
dispute, the interpretation and application of those laws, and the rendering of
a judgment based thereon. Clearly, the dispute is not a mining conflict. It is
essentially judicial. The complaint was not merely for the determination of
rights under the mining contracts since the very validity of those contracts is
put in issue.
In Saura v. Saura, Jr.,21 this Court emphasized the primacy of the regular
court's judicial power enshrined in the Constitution that is true that the trend
is towards vesting administrative bodies like the SEC with the power to
adjudicate matters coming under their particular specialization, to insure a
more knowledgeable solution of the problems submitted to them. This would
also relieve the regular courts of a substantial number of cases that would
otherwise swell their already clogged dockets. But as expedient as this
policy may be, it should not deprive the courts of justice of their power
to decide ordinary cases in accordance with the general laws that do
not require any particular expertise or training to interpret and apply.
Otherwise, the creeping take-over by the administrative agencies of the
judicial power vested in the courts would render the judiciary virtually
impotent in the discharge of the duties assigned to it by the
Constitution.
To be sure, in Rivera v. Espiritu,22 after Philippine Airlines (PAL) and PAL
Employees Association (PALEA) entered into an agreement, which includes
the provision to suspend the PAL-PALEA CBA for 10 years, several
employees questioned its validity via a petition for certiorari directly to the
Supreme Court. They said that the suspension was unconstitutional and
contrary to public policy. Petitioners submit that the suspension was
inordinately long, way beyond the maximum statutory life of 5 years for a
CBA provided for in Article 253-A of the Labor Code. By agreeing to a 10-
year suspension, PALEA, in effect, abdicated the workers' constitutional right
to bargain for another CBA at the mandated time.
In that case, this Court denied the petition for certiorari, ruling that there is
available to petitioners a plain, speedy, and adequate remedy in the ordinary
course of law. The Court said that while the petition was denominated as one
for certiorari and prohibition, its object was actually the nullification of the
PAL-PALEA agreement. As such, petitioners' proper remedy is an ordinary
civil action for annulment of contract, an action which properly falls under the
jurisdiction of the regional trial courts.
The change in the terms and conditions of employment, should Section 144
of the CBA be held invalid, is but a necessary and unavoidable consequence
of the principal relief sought, i.e., nullification of the alleged discriminatory
provision in the CBA. Thus, it does not necessarily follow that a resolution of
controversy that would bring about a change in the terms and conditions of
employment is a labor dispute, cognizable by labor tribunals. It is unfair to
Labor Relations Case No. 1 | 9
preclude petitioners from invoking the trial court's jurisdiction merely because
it may eventually result into a change of the terms and conditions of
employment. Along that line, the trial court is not asked to set and fix the
terms and conditions of employment, but is called upon to determine whether
CBA is consistent with the laws.
Although the CBA provides for a procedure for the adjustment of grievances,
such referral to the grievance machinery and thereafter to voluntary
arbitration would be inappropriate to the petitioners, because the union and
the management have unanimously agreed to the terms of the CBA and their
interest is unified.
In Pantranco North Express, Inc., v. NLRC,23 this Court held that:
x x x Hence, only disputes involving the union and the company shall be
referred to the grievance machinery or voluntary arbitrators.
In the instant case, both the union and the company are united or have come
to an agreement regarding the dismissal of private respondents. No
grievance between them exists which could be brought to a grievance
machinery. The problem or dispute in the present case is between the union
and the company on the one hand and some union and non-union members
who were dismissed, on the other hand. The dispute has to be settled before
an impartial body. The grievance machinery with members designated by the
union and the company cannot be expected to be impartial against the
dismissed employees. Due process demands that the dismissed workers’
grievances be ventilated before an impartial body. x x x .
Applying the same rationale to the case at bar, it cannot be said that the
"dispute" is between the union and petitioner company because both have
previously agreed upon the provision on "compulsory retirement" as
embodied in the CBA. Also, it was only private respondent on his own who
questioned the compulsory retirement. x x x.
In the same vein, the dispute in the case at bar is not between FASAP and
respondent PAL, who have both previously agreed upon the provision on the
compulsory retirement of female flight attendants as embodied in the CBA.
The dispute is between respondent PAL and several female flight attendants
who questioned the provision on compulsory retirement of female flight
attendants. Thus, applying the principle in the aforementioned case cited,
referral to the grievance machinery and voluntary arbitration would not serve
the interest of the petitioners.
Besides, a referral of the case to the grievance machinery and to the
voluntary arbitrator under the CBA would be futile because respondent
already implemented Section 114, Part A of PAL-FASAP CBA when several
of its female flight attendants reached the compulsory retirement age of 55.
Further, FASAP, in a letter dated July 12, 2004, addressed to PAL, submitted
its association's bargaining proposal for the remaining period of 2004-2005 of
the PAL-FASAP CBA, which includes the renegotiation of the subject Section
144. However, FASAP's attempt to change the questioned provision was
shallow and superficial, to say the least, because it exerted no further efforts
to pursue its proposal. When petitioners in their individual capacities
questioned the legality of the compulsory retirement in the CBA before the
trial court, there was no showing that FASAP, as their representative,
endeavored to adjust, settle or negotiate with PAL for the removal of the
difference in compulsory age retirement between its female and male flight
attendants, particularly those employed before November 22, 1996. Without
FASAP's active participation on behalf of its female flight attendants, the
utilization of the grievance machinery or voluntary arbitration would be
pointless.
The trial court in this case is not asked to interpret Section 144, Part A of the
PAL-FASAP CBA. Interpretation, as defined in Black's Law Dictionary, is the
art of or process of discovering and ascertaining the meaning of a statute,
will, contract, or other written document.24 The provision regarding the
compulsory retirement of flight attendants is not ambiguous and does not
require interpretation. Neither is there any question regarding the
implementation of the subject CBA provision, because the manner of
implementing the same is clear in itself. The only controversy lies in its
intrinsic validity.
Although it is a rule that a contract freely entered between the parties should
be respected, since a contract is the law between the parties, said rule is not
absolute.
In Pakistan International Airlines Corporation v. Ople, 25 this Court held that:
The principle of party autonomy in contracts is not, however, an absolute
principle. The rule in Article 1306, of our Civil Code is that the contracting
parties may establish such stipulations as they may deem convenient,
"provided they are not contrary to law, morals, good customs, public order or
public policy." Thus, counter-balancing the principle of autonomy of
contracting parties is the equally general rule that provisions of applicable
law, especially provisions relating to matters affected with public policy, are
Labor Relations Case No. 1 | 10

deemed written into the contract. Put a little differently, the governing
principle is that parties may not contract away applicable provisions of law
especially peremptory provisions dealing with matters heavily impressed with
public interest. The law relating to labor and employment is clearly such an
area and parties are not at liberty to insulate themselves and their
relationships from the impact of labor laws and regulations by simply
contracting with each other.
WHEREFORE, the petition is PARTLY GRANTED. The Decision and
Resolution of the Court of Appeals, dated August 31, 2005 and March 7,
2006, respectively, in CA-G.R. SP. No. 86813 are REVERSED and SET
ASIDE. The Regional Trial Court of Makati City, Branch 147 is DIRECTED to
continue the proceedings in Civil Case No. 04-886 with deliberate dispatch.
SO ORDERED.

Moreover, the relations between capital and labor are not merely contractual.
They are so impressed with public interest that labor contracts must yield to
the common good.x x x 26 The supremacy of the law over contracts is
explained by the fact that labor contracts are not ordinary contracts; these
are imbued with public interest and therefore are subject to the police power
of the state.27 It should not be taken to mean that retirement provisions
agreed upon in the CBA are absolutely beyond the ambit of judicial review
and nullification. A CBA, as a labor contract, is not merely contractual in
nature but impressed with public interest. If the retirement provisions in the
CBA run contrary to law, public morals, or public policy, such provisions may
very well be voided.28

Finally, the issue in the petition for certiorari brought before the CA by the
respondent was the alleged exercise of grave abuse of discretion of the RTC
in taking cognizance of the case for declaratory relief. When the CA annuled
and set aside the RTC's order, petitioners sought relief before this Court
through the instant petition for review under Rule 45. A perusal of the petition
before Us, petitioners pray for the declaration of the alleged discriminatory
provision in the CBA against its female flight attendants.

This Court is not persuaded. The rule is settled that pure questions of fact
may not be the proper subject of an appeal by certiorari under Rule 45 of the
Revised Rules of Court. This mode of appeal is generally limited only to
questions of law which must be distinctly set forth in the petition. The
Supreme Court is not a trier of facts.29

The question as to whether said Section 114, Part A of the PAL-FASAP CBA
is discriminatory or not is a question of fact. This would require the
presentation and reception of evidence by the parties in order for the trial
court to ascertain the facts of the case and whether said provision violates
the Constitution, statutes and treaties. A full-blown trial is necessary, which
jurisdiction to hear the same is properly lodged with the the RTC. Therefore,
a remand of this case to the RTC for the proper determination of the merits of
the petition for declaratory relief is just and proper.1avvphi1
Labor Relations Case No. 1 | 11
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 87700 June 13, 1990
SAN MIGUEL CORPORATION EMPLOYEES UNION-PTGWO, DANIEL
S.L. BORBON II, HERMINIA REYES, MARCELA PURIFICACION, ET
AL., petitioners,
vs.
HON. JESUS G. BERSAMIRA, IN HIS CAPACITY AS PRESIDING JUDGE
OF BRANCH 166, RTC, PASIG, and SAN MIGUEL
CORPORATION, respondents.
Romeo C. Lagman for petitioners.
Jardeleza, Sobrevinas, Diaz, Mayudini & Bodegon for respondents.
MELENCIO-HERRERA, J.:
Respondent Judge of the Regional Trial Court of Pasig, Branch 166, is taken
to task by petitioners in this special civil action for certiorari and Prohibition
for having issued the challenged Writ of Preliminary Injunction on 29 March
1989 in Civil Case No. 57055 of his Court entitled "San Miguel Corporation
vs. SMCEU-PTGWO, et als."
Petitioners' plea is that said Writ was issued without or in excess of
jurisdiction and with grave abuse of discretion, a labor dispute being
involved. Private respondent San Miguel Corporation (SanMig. for short), for
its part, defends the Writ on the ground of absence of any employer-
employee relationship between it and the contractual workers employed by
the companies Lipercon Services, Inc. (Lipercon) and D'Rite Service
Enterprises (D'Rite), besides the fact that the Union is bereft of personality to
represent said workers for purposes of collective bargaining. The Solicitor
General agrees with the position of SanMig.
The antecedents of the controversy reveal that:
Sometime in 1983 and 1984, SanMig entered into contracts for
merchandising services with Lipercon and D'Rite (Annexes K and I, SanMig's
Comment, respectively). These companies are independent contractors duly
licensed by the Department of Labor and Employment (DOLE). SanMig
entered into those contracts to maintain its competitive position and in
keeping with the imperatives of efficiency, business expansion and diversity
of its operation. In said contracts, it was expressly understood and agreed
that the workers employed by the contractors were to be paid by the latter
and that none of them were to be deemed employees or agents of SanMig.
There was to be no employer-employee relation between the contractors
and/or its workers, on the one hand, and SanMig on the other.
Petitioner San Miguel Corporation Employees Union-PTWGO (the Union, for
brevity) is the duly authorized representative of the monthly paid rank-and-file
employees of SanMig with whom the latter executed a Collective Bargaining
Agreement (CBA) effective 1 July 1986 to 30 June 1989 (Annex A, SanMig's
Comment). Section 1 of their CBA specifically provides that "temporary,
probationary, or contract employees and workers are excluded from the
bargaining unit and, therefore, outside the scope of this Agreement."
In a letter, dated 20 November 1988 (Annex C, Petition), the Union advised
SanMig that some Lipercon and D'Rite workers had signed up for union
membership and sought the regularization of their employment with SMC.
The Union alleged that this group of employees, while appearing to be
contractual workers supposedly independent contractors, have been
continuously working for SanMig for a period ranging from six (6) months to
fifteen (15) years and that their work is neither casual nor seasonal as they
are performing work or activities necessary or desirable in the usual business
or trade of SanMig. Thus, it was contended that there exists a "labor-only"
contracting situation. It was then demanded that the employment status of
these workers be regularized.
On 12 January 1989 on the ground that it had failed to receive any favorable
response from SanMig, the Union filed a notice of strike for unfair labor
practice, CBA violations, and union busting (Annex D, Petition).
On 30 January 1989, the Union again filed a second notice of strike for unfair
labor practice (Annex F, Petition).
As in the first notice of strike. Conciliatory meetings were held on the second
notice. Subsequently, the two (2) notices of strike were consolidated and
several conciliation conferences were held to settle the dispute before the
Labor Relations Case No. 1 | 12
National Conciliation and Mediation Board (NCMB) of DOLE (Annex G,
Petition).
Beginning 14 February 1989 until 2 March 1989, series of pickets were
staged by Lipercon and D'Rite workers in various SMC plants and offices.
On 6 March 1989, SMC filed a verified Complaint for Injunction and Damages
before respondent Court to enjoin the Union from:
a. representing and/or acting for and in behalf of the
employees of LIPERCON and/or D'RITE for the purposes of
collective bargaining;
b. calling for and holding a strike vote, to compel plaintiff to
hire the employees or workers of LIPERCON and D'RITE;
c. inciting, instigating and/or inducing the employees or
workers of LIPERCON and D'RITE to demonstrate and/or
picket at the plants and offices of plaintiff within the
bargaining unit referred to in the CBA,...;
d. staging a strike to compel plaintiff to hire the employees or
workers of LIPERCON and D'RITE;
e. using the employees or workers of LIPERCON AND
D'RITE to man the strike area and/or picket lines and/or
barricades which the defendants may set up at the plants
and offices of plaintiff within the bargaining unit referred to in
the CBA ...;
f. intimidating, threatening with bodily harm and/or molesting
the other employees and/or contract workers of plaintiff, as
well as those persons lawfully transacting business with
plaintiff at the work places within the bargaining unit referred
to in the CBA, ..., to compel plaintiff to hire the employees or
workers of LIPERCON and D'RITE;
g. blocking, preventing, prohibiting, obstructing and/or
impeding the free ingress to, and egress from, the work
places within the bargaining unit referred to in the CBA .., to
compel plaintiff to hire the employees or workers of
LIPERCON and D'RITE;
h. preventing and/or disrupting the peaceful and normal
operation of plaintiff at the work places within the bargaining
unit referred to in the CBA, Annex 'C' hereof, to compel
plaintiff to hire the employees or workers of LIPERCON and
D'RITE. (Annex H, Petition)
Respondent Court found the Complaint sufficient in form and substance and
issued a Temporary Restraining Order for the purpose of maintaining
the status quo, and set the application for Injunction for hearing.
In the meantime, on 13 March 1989, the Union filed a Motion to Dismiss
SanMig's Complaint on the ground of lack of jurisdiction over the case/nature
of the action, which motion was opposed by SanMig. That Motion was denied
by respondent Judge in an Order dated 11 April 1989.
After several hearings on SanMig's application for injunctive relief, where the
parties presented both testimonial and documentary evidence on 25 March
1989, respondent Court issued the questioned Order (Annex A, Petition)
granting the application and enjoining the Union from Committing the acts
complained of,  supra. Accordingly, on 29 March 1989, respondent Court
issued the corresponding Writ of Preliminary Injunction after SanMig had
posted the required bond of P100,000.00 to answer for whatever damages
petitioners may sustain by reason thereof.
In issuing the Injunction, respondent Court rationalized:
The absence of employer-employee relationship negates the
existence of labor dispute. Verily, this court has jurisdiction to
take cognizance of plaintiff's grievance.
The evidence so far presented indicates that plaintiff has
contracts for services with Lipercon and D'Rite. The
application and contract for employment of the defendants'
witnesses are either with Lipercon or D'Rite. What could be
discerned is that there is no employer-employee relationship
between plaintiff and the contractual workers employed by
Lipercon and D'Rite. This, however, does not mean that a
final determination regarding the question of the existence of
employer-employee relationship has already been made. To
finally resolve this dispute, the court must extensively
consider and delve into the manner of selection and
engagement of the putative employee; the mode of payment
of wages; the presence or absence of a power of dismissal;
Labor Relations Case No. 1 | 13
and the Presence or absence of a power to control the
putative employee's conduct. This necessitates a full-blown
trial. If the acts complained of are not restrained, plaintiff
would, undoubtedly, suffer irreparable damages. Upon the
other hand, a writ of injunction does not necessarily expose
defendants to irreparable damages.
Evidently, plaintiff has established its right to the relief
demanded. (p. 21, Rollo)
Anchored on grave abuse of discretion, petitioners are now before us
seeking nullification of the challenged Writ. On 24 April 1989, we issued a
Temporary Restraining Order enjoining the implementation of the Injunction
issued by respondent Court. The Union construed this to mean that "we can
now strike," which it superimposed on the Order and widely circulated to
entice the Union membership to go on strike. Upon being apprised thereof, in
a Resolution of 24 May 1989, we required the parties to "RESTORE
the status quo ante declaration of strike" (p. 2,62 Rollo).
In the meantime, however, or on 2 May 1989, the Union went on strike.
Apparently, some of the contractual workers of Lipercon and D'Rite had been
laid off. The strike adversely affected thirteen (13) of the latter's plants and
offices.
On 3 May 1989, the National Conciliation and Mediation Board (NCMB)
called the parties to conciliation. The Union stated that it would lift the strike if
the thirty (30) Lipercon and D'Rite employees were recalled, and discussion
on their other demands, such as wage distortion and appointment of
coordinators, were made. Effected eventually was a Memorandum of
Agreement between SanMig and the Union that "without prejudice to the
outcome of G.R. No. 87700 (this case) and Civil Case No. 57055 (the case
below), the laid-off individuals ... shall be recalled effective 8 May 1989 to
their former jobs or equivalent positions under the same terms and conditions
prior to "lay-off" (Annex 15, SanMig Comment). In turn, the Union would
immediately lift the pickets and return to work.
After an exchange of pleadings, this Court, on 12 October 1989, gave due
course to the Petition and required the parties to submit their memoranda
simultaneously, the last of which was filed on 9 January 1990.
The focal issue for determination is whether or not respondent Court correctly
assumed jurisdiction over the present controversy and properly issued the
Writ of Preliminary Injunction to the resolution of that question, is the matter
of whether, or not the case at bar involves, or is in connection with, or relates
to a labor dispute. An affirmative answer would bring the case within the
original and exclusive jurisdiction of labor tribunals to the exclusion of the
regular Courts.
Petitioners take the position that 'it is beyond dispute that the controversy in
the court  a quo involves or arose out of a labor dispute and is directly
connected or interwoven with the cases pending with the NCMB-DOLE, and
is thus beyond the ambit of the public respondent's jurisdiction. That the acts
complained of (i.e., the mass concerted action of picketing and the reliefs
prayed for by the private respondent) are within the competence of labor
tribunals, is beyond question" (pp. 6-7, Petitioners' Memo).
On the other hand, SanMig denies the existence of any employer-employee
relationship and consequently of any labor dispute between itself and the
Union. SanMig submits, in particular, that "respondent Court is vested with
jurisdiction and judicial competence to enjoin the specific type of strike
staged by petitioner union and its officers herein complained of," for the
reasons that:
A. The exclusive bargaining representative of an employer
unit cannot strike to compel the employer to hire and thereby
create an employment relationship with contractual workers,
especially were the contractual workers were recognized by
the union, under the governing collective bargaining
agreement, as excluded from, and therefore strangers to, the
bargaining unit.
B. A strike is a coercive economic weapon granted the
bargaining representative only in the event of a deadlock in a
labor dispute over 'wages, hours of work and all other and of
the employment' of the employees in the unit. The union
leaders cannot instigate a strike to compel the employer,
especially on the eve of certification elections, to hire
strangers or workers outside the unit, in the hope the latter
will help re-elect them.
C. Civil courts have the jurisdiction to enjoin the above
because this specie of strike does not arise out of a labor
dispute, is an abuse of right, and violates the employer's
constitutional liberty to hire or not to hire. (SanMig's
Memorandum, pp. 475-476, Rollo).
Labor Relations Case No. 1 | 14
We find the Petition of a meritorious character.
A "labor dispute" as defined in Article 212 (1) of the Labor Code includes
"any controversy or matter concerning terms and conditions of employment
or the association or representation of persons in negotiating, fixing,
maintaining, changing, or arranging the terms and conditions of employment,
regardless of whether the disputants stand in the proximate relation of
employer and employee."
While it is SanMig's submission that no employer-employee relationship
exists between itself, on the one hand, and the contractual workers of
Lipercon and D'Rite on the other, a labor dispute can nevertheless exist
"regardless of whether the disputants stand in the proximate relationship of
employer and employee" (Article 212 [1], Labor Code, supra) provided the
controversy concerns, among others, the terms and conditions of
employment or a "change" or "arrangement" thereof (ibid). Put differently,
and as defined by law, the existence of a labor dispute is not negative by the
fact that the plaintiffs and defendants do not stand in the proximate relation of
employer and employee.
That a labor dispute, as defined by the law, does exist herein is evident. At
bottom, what the Union seeks is to regularize the status of the employees
contracted by Lipercon and D'Rite in effect, that they be absorbed into the
working unit of SanMig. This matter definitely dwells on the working
relationship between said employees vis-a-vis SanMig. Terms, tenure and
conditions of their employment and the arrangement of those terms are thus
involved bringing the matter within the purview of a labor dispute. Further, the
Union also seeks to represent those workers, who have signed up for Union
membership, for the purpose of collective bargaining. SanMig, for its part,
resists that Union demand on the ground that there is no employer-employee
relationship between it and those workers and because the demand violates
the terms of their CBA. Obvious then is that representation and association,
for the purpose of negotiating the conditions of employment are also
involved. In fact, the injunction sought by SanMig was precisely also to
prevent such representation. Again, the matter of representation falls within
the scope of a labor dispute. Neither can it be denied that the controversy
below is directly connected with the labor dispute already taken cognizance
of by the NCMB-DOLE (NCMB-NCR- NS-01- 021-89; NCMB NCR NS-01-
093-83).
Whether or not the Union demands are valid; whether or not SanMig's
contracts with Lipercon and D'Rite constitute "labor-only" contracting and,
therefore, a regular employer-employee relationship may, in fact, be said to
exist; whether or not the Union can lawfully represent the workers of Lipercon
and D'Rite in their demands against SanMig in the light of the existing CBA;
whether or not the notice of strike was valid and the strike itself legal when it
was allegedly instigated to compel the employer to hire strangers outside the
working unit; — those are issues the resolution of which call for the
application of labor laws, and SanMig's cause's of action in the Court below
are inextricably linked with those issues.
The precedent in Layno vs. de la Cruz (G.R. No. L-29636, 30 April 1965, 13
SCRA 738) relied upon by SanMig is not controlling as in that case there was
no controversy over terms, tenure or conditions, of employment or the
representation of employees that called for the application of labor laws. In
that case, what the petitioning union demanded was not a change in working
terms and conditions, or the representation of the employees, but that its
members be hired as stevedores in the place of the members of a rival union,
which petitioners wanted discharged notwithstanding the existing contract of
the arrastre company with the latter union. Hence, the ruling therein, on the
basis of those facts unique to that case, that such a demand could hardly be
considered a labor dispute.
As the case is indisputably linked with a labor dispute, jurisdiction belongs to
the labor tribunals. As explicitly provided for in Article 217 of the Labor Code,
prior to its amendment by R.A. No. 6715 on 21 March 1989, since the suit
below was instituted on 6 March 1989, Labor Arbiters have original and
exclusive jurisdiction to hear and decide the following cases involving all
workers including "1. unfair labor practice cases; 2. those that workers may
file involving wages, hours of work and other terms and conditions of
employment; ... and 5. cases arising from any violation of Article 265 of this
Code, including questions involving the legality of striker and lockouts. ..."
Article 217 lays down the plain command of the law.
The claim of SanMig that the action below is for damages under Articles 19,
20 and 21 of the Civil Code would not suffice to keep the case within the
jurisdictional boundaries of regular Courts. That claim for damages is
interwoven with a labor dispute existing between the parties and would have
to be ventilated before the administrative machinery established for the
expeditious settlement of those disputes. To allow the action filed below to
prosper would bring about "split jurisdiction" which is obnoxious to the orderly
administration of justice (Philippine Communications, Electronics and
Electricity Workers Federation vs. Hon. Nolasco, L-24984, 29 July 1968, 24
SCRA 321).
Labor Relations Case No. 1 | 15

We recognize the proprietary right of SanMig to exercise an inherent

management prerogative and its best business judgment to determine
whether it should contract out the performance of some of its work to
independent contractors. However, the rights of all workers to self-
organization, collective bargaining and negotiations, and peaceful concerted
activities, including the right to strike in accordance with law (Section 3,
Article XIII, 1987 Constitution) equally call for recognition and protection.
Those contending interests must be placed in proper perspective and
equilibrium.

WHEREFORE, the Writ of certiorari  is GRANTED and the Orders of

respondent Judge of 25 March 1989 and 29 March 1989 are SET ASIDE.
The Writ of Prohibition is GRANTED and respondent Judge is enjoined from
taking any further action in Civil Case No. 57055 except for the purpose of
dismissing it. The status quo ante declaration of strike ordered by the Court
on 24 May 1989 shall be observed pending the proceedings in the National
Conciliation Mediation Board-Department of Labor and Employment,
docketed as NCMB-NCR-NS-01-02189 and NCMB-NCR-NS-01-093-83. No
costs.

SO ORDERED.
Labor Relations Case No. 1 | 16

Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-39084 February 23, 1988
PHILIPPINE ASSOCIATION OF FREE LABOR UNIONS
(PAFLU), petitioner,
vs.
EMILIO V. SALAS, Judge of the Court of First Instance of Rizal, Seventh
Judicial District, Branch I, Pasig, Rizal and WONG KING
YUEN, respondents.
GANCAYCO, J.:
This is a petition for certiorari under Rule 65 of the Rules of Court.
The record of the case discloses that the herein petitioner Philippine
Association of Free Labor Unions (PAFLU) is a labor organization registered
with the Department of Labor and Employment. Sometime in 1963, the
petitioner filed a Complaint for unfair labor practice with the then Court of
Industrial Relations (CIR) against the Northwest manufacturing Corporation
and a certain Gan Hun. The suit was docketed as Case No. 3901-ULP.
On September 25, 1972, the CIR rendered a Decision in favor of the
petitioner labor organization. Pursuant to a writ of execution issued by the
CIR, the provincial sheriff of Rizal commenced levying the personal
properties of the said Gan Hun, particularly the properties found in his
residential apartment unit in San Juan, then a town of Rizal province.
The herein private respondent Wong King Yuen however, claims that Gan
Hun is his boarder in the apartment unit mentioned earlier and that the
properties inside the apartment unit levied by the provincial sheriff belong to
him and not to Gan Hun.
As sought by the private respondent, the CFI, with the herein respondent
Judge Emilio V. Salas presiding therein, issued an injunctive writ restraining
the provincial sheriff from proceeding with the sale of the properties in
question.
After having been allowed by the CFI to intervene in Civil Case No. 18460,
the petitioner labor organization sought to dismiss the Complaint on the
ground that the said court had no jurisdiction over the case filed by the
private respondent.1 The petitioner argued that Civil Case No. 18460 relates
to an existing labor dispute and as such the proper forum for the same is the
industrial court.
In an Order dated July 9, 1974, the CFI denied the Motion to Dismiss filed by
the petitioner. 2 The petitioner sought a reconsideration of the said case but
did not succeed in doing so. 3
On August 8, 1974, the petitioner elevated the case to this Court by way of
the instant Petition.4 The petitioner maintains its stand that the CFI has no
jurisdiction over Civil Case No. 18460.
In an Answer filed with this Court on August 29, 1974, the private respondent
contends that Civil Case No. 18460 is not a labor dispute recognizable by the
industrial court. The private respondent points out that Civil Case No. 18460
is an ordinary civil action for damages against the provincial sheriff and
directed against the sheriffs bond required under Section 17, Rule 39 of the
Rules of Court. The private respondent adds that it is an entirely separate
proceeding distinct from the labor case filed with the CIR and that,
accordingly, it is the Court of First Instance which has jurisdiction over the
same.5
After a careful examination of the entire record of the case, We find that
instant Petition to be devoid of merit.
The sole issue in this case is whether or not the CFI has the jurisdiction to
issue the injunctive relief questioned by the petitioner. We rule in the
affirmative.

Thus, on October 18, 1973, the private respondent filed a Complaint for
damages with the then Court of First Instance (CFI) of Rizal against the
provincial sheriff. The suit was docketed as Civil Case No. 18460. The
amount of money involved in the said case is about P24,680.00.
Labor Relations Case No. 1 | 17

It is clear that Civil Case No. 18460 is an ordinary civil action for damages, SO ORDERED.
not a labor dispute. The case is directed against the provincial sheriff and the
recovery of damages is sought against the bond provided for Section 17,
Rule 39 of the Rules of Court governing execution and satisfaction of
judgments.

Even if the act complained of by the private respondent arose from a labor
dispute between the petitioner and another party, the inevitable conclusion
remains the same — there is no labor dispute between the petitioner and the
private respondent. Civil Case No. 18460 has no direct bearing with the case
flied with the industrial court. The civil case remains distinct from the labor
dispute pending with the CIR.

Under Commonwealth Act No. 103, the law creating the Court of Industrial
Relations, the jurisdiction of the industrial court is limited to labor
disputes. i.e., problems and controversies pertaining to the relationship
between employer and employee. Section I thereof provides as follows —

Sec. 1. Jurisdiction.  — There is created a Court of Industrial

Relations hereinafter called the court, which shall have
jurisdiction over the entire Philippines to consider,
investigate, decide and settle all questions, matters,
controversies, or disputes arising between, and/or affecting
employers and employees or laborers, and regulate the
relations between them, . . . . (Emphasis supplied.)

From the foregoing, it is clear that the jurisdiction of the CIR can be invoked
only when there is a dispute arising between or affecting employers and
employees, or when an employer-employee relationship exists between the
parties.

There being no labor dispute between the petitioner and the private
respondent, the Court of First Instance 6 has the jurisdiction to issue the
injunctive relief sought by the private respondent in Civil Case No.
18460.7 The latter case can proceed independently of the case pending in
the Court of Industrial Relations. 8

Accordingly, the writ of certiorari sought by the petitioner cannot issue.

WHEREFORE, in view of the foregoing, the instant Petition for certiorari is

hereby DISMISSED for lack of merit. We make no pronouncement as to
costs: