3. G.R. No.
110187 September 4, 1996 – TITLE/EFFECTIVITY/APPLICABILITY insurance coverage for group life, medical, death, dismemberment and disability benefits;
JOSE G. EBRO III, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, INTERNATIONAL CATHOLIC
MIGRATION COMMISSION, JON DARRAH, ALEX DY-REYES, CARRIE WILSON, and
MARIVIC SOLIVEN, respondents.
CASE: This is a petition for certiorari to set aside the order and resolution of the NLRC.
FACTS:
 PRIVATE RESPONDENT ICMC is a non-profit agency engaged in international
humanitarian and voluntary work. It is duly registered with the ECOSOC and enjoys
Consultative Status, Category II. It was one of the agencies accredited by the Philippine
Government to operate the refugee processing center at Sabang, Morong, Bataan.
 On June 24, 1985, PRIVATE RESPONDENT ICMC employed PETITIONER JOSE G.
EBRO III to teach "English as a Second Language and Cultural Orientation Training
Program" at the refugee processing center.
 After six months, ICMC notified EBRO that effective December 21, 1985, the latter's
services were terminated for his failure to meet the requirements of "
1. classroom performance . . . up to the standards set in the Guide for Instruction;
2. regular attendance in the mandated teacher training, and in the schedule team
meetings, one-on-one conferences with the supervisor, etc.; and
3. compliance with ICMC and PRPC policies and procedures."
 On February 4, 1986, EBRO filed a complaint for illegal dismissal, unfair labor practice,
underpayment of wages, accrued leave pay, 14th month pay, damages, attorney's fees.,
and expenses of litigation.
 The complaint was filed against private respondents ICMC and its Project Director Jon
Darrah, Personnel Officer Alex Dy-Reyes, Program Officer of the Cultural Orientation
Program Carrie Wilson, and Supervisor of the Cultural Orientation Program Marivic
Soliven.
 EBRO ALLEGATIONS: EBRO alleged that there was no objective evaluation of his
performance to warrant his dismissal and that he should have been considered a regular
employee from the start because ICMC failed to acquaint him with the standards under
which he must qualify as such.
HENCE, he prayed for reinstatement with backwages; P3,155.00 for probationary and
P3,445.00 for regular salary adjustments; value of lodging or dormitory privileges; cost of
moral, and exemplary, and nominal damages plus interest on the above claims with
attorney's fees.
 ICMC ANSWER: ICMC claimed that EBRO failed to quality for regular employment because
he showed no interest in improving his professional performance both in and out of the
classroom after he had been periodically evaluated (observation summary from August 20
to October 2, 1985 and evaluation summary of December 14, 1985); that EBRO was paid
his salary up to December 31, 1985, two weeks pay in lieu of notice, and 14th month pay
pro-rata; and that his accrued leave balance already been converted to cash.
 Subsequently, on 31 July 1989, ICMC submitted a memorandum invoking their diplomatic
immunity on the basis of the Memorandum of Agreement signed on July 15, 1988 between
the Philippines government and ICMC.
 LA DECISION: LA held that ICMC legal immunity under the Memorandum could not be
given retroactive effect since "[that would] deprive complainant's property right without due
process and impair the obligation of contract of employment."
In addition, he expressed doubt about petitioner's legal immunity on the ground that it was
provided for by agreement and not through an act of Congress. Accordingly, the Labor
Arbiter ordered ICMC to reinstate petitioner as regular teacher without loss of seniority
rights and to pay him one year backwages, other benefits, and ten percent attorney's fees
for a total sum of P70,944.85. BOTH PARTIES APPEALED
 NLRC DECISION: NLRC ordered the case dismissed on the ground that, under the
Memorandum of Agreement between the Philippine government and ICMC, the latter was
immune from suit.
 EBRO moved for reconsideration arguing that that the Memorandum of Agreement could
not be given retroactive effect and that in any case ICMC had waived its immunity by
consenting to be sued. DENIED BY THE NLRC.
 HENCE, this case.
ISSUE: Whether or not the MOA between the Philippine Government and ICMC should be
applied in this case.
RULING: YES. The Court ruled that the the Memorandum of Agreement executed on July
15, 1988 ICMC immunity from suit must be applied in this case.
First. EBRO’S contention that the Memorandum of Agreement is not an act of Congress
which is needed to "repeal or supersede" the provision of the Labor Code on the
jurisdiction of the NLRC and of the Labor Arbiter.
The Court disagree.
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 The grant of immunity to ICMC is in virtue of the Convention on the Privileges and
Immunities of Specialized Agencies of the United Nations, adopted by the UN General
Assembly on November 21, 1947, and concurred in by the Philippine Senate on May 17,
1949. This Convention has the force and effect of law, considering that under the
Constitution, the Philippines adopts the generally accepted principles of international
law as part of the law of the land.  settlement of: (a) disputes arising out of contracts or other disputes of
The Memorandum of Agreement in question merely carries out the Philippine government's
obligation under the Convention. In International Catholic Migration Commission
v. Calleja,  this Court explained the grant of immunity to ICMC in this wise:
The grant of immunity from local jurisdiction to ICMC . . . is clearly
necessitated by their international character and respective purposes.
The objective is to avoid the danger of partiality and interference by the
host country in their internal workings. The exercise of jurisdiction by the
Department of Labor in these instances would defeat the very purpose of
immunity, which is to shield the affairs of international organizations, in
accordance with international practice, from political pressure or control
by the host country to the prejudice of member State of the organization,
and to ensure the unhampered performance of their functions.
Second. EBRO argues that in any case ICMC's immunity can not apply because this case
was filed below before the signing of the Memorandum on July 15, 1988.
The Court disagree.
The scope of immunity of the ICMC contained in the Convention on the Privileges and
Immunities of the Specialized Agencies of the United Nations is instructive. Art. III, §4 of the
Convention provides for immunity from "every form of legal process." Thus, even if private
respondents had been served summons and subpoenas prior to the execution of the
Memorandum, they, as officers of ICMC, can claim immunity under the same in order to
prevent enforcement of an adverse judgment, since a writ of execution is "a legal process"
within the meaning of Article III.
As pointed out in International Catholic Commission v. Calleja, 11 petitioner is not exactly
without remedy for whatever violation of rights it may have suffered for the following reason:
Section 31 of the Convention on the Privileges and Immunities of the
Specialized Agencies of the United Nations provides that "each
specialized agency shall make provision for appropriate modes of
private character to which the specialized agency is a party." Moreover,
pursuant to Article IV of the Memorandum of Agreement between ICMC
and the Philippine Government, whenever there is any abuse of privilege
by ICMC, the Government is free to withdraw the privileges and
immunities accorded. Thus:
Article IV. Cooperation with Government Authorities. —
1. The Commission shall cooperate at all times with the appropriate
authorities of the Government to ensure the observance of Philippine
laws, rules and regulations, facilitate the proper administration of justice
and prevent the occurrences of any abuse of the privileges and
immunities granted is officials and alien employees in Article III of this
Agreement of the Commission.
2. In the event that the Government determines that there has been an
abuse of the privileges and immunities granted under this Agreement,
consultations shall be held between the Government and the Commission
to determine whether any such abuse has occurred and, if so, the
Government shall withdraw the privileges and immunities granted the
Commission and its officials.

Third. Whether ICMC can invoke its immunity because it only did so in its memorandum
before the Labor Arbiter. It is contended that ICMC waived its immunity in any event.

The Court disagree.

Art III 4 of the Convention on the Privileges and Immunities of the Specialized Agencies of
the United Nations requires, however, that the waiver of the privilege must be express.
In this case, there was no such waiver of immunity in this case. Nor can ICMC be estopped
from claiming diplomatic immunity since estoppel does not operate to confer jurisdiction to a
tribunal that has none over a cause of action. 

Fourth. That recognition of ICMC's immunity from suit deprives petitioner of due process.

The Court disagree.

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 7. G.R. No. 157038               December 23, 2009 - INTERPRETATION
GOVERNMENT SERVICE INSURANCE SYSTEM, Petitioner,
vs.
JEAN E. RAOET, Respondent.
CASE: This is a petition for review on certiorari seeking to set aside the CA deicision which
overturned the decision of ECC and dranted RESPONDENT JEAN RAOET claim for
income benefits arising from her husband’s death.
FACTS:
 RESPONDENT’S HUSBAND, Francisco M. Raoet (Francisco), entered government service
on July 16, 1974 as an Engineer Trainee at the National Irrigation Administration (NIA). On
July 5, 1978, he was appointed as Junior Civil Engineer, and on April 22, 1981 up until he
was promoted to the position of Engineer A – the position he held until his death on May 5,
2001.
 As Engineer A, Francisco supervised the implementation of construction activities of Lateral
E and E-1. He was also tasked to review and check the structural plan and the facilities.
 In 2000, Francisco was diagnosed with Hypertension, Severe, Stage III, Coronary Artery
Disease, and he was confined at the Region I Medical Center from July 16 to July 25, 2000.
 As the GSIS considered this a work-related condition, Francisco was awarded 30 days
Temporary Total Disability benefits, plus reimbursement of medical expenses incurred
during treatment.
 On May 5, 2001, Francisco was rushed to the Dr. Marcelo M. Chan Memorial Hospital
because he was vomiting blood. He was pronounced dead on arrival at the hospital. His
death certificate listed the causes of his death as follows:
CAUSES OF DEATH
Immediate cause: Cardiac Arrest
Antecedent cause: Acute Massive Hemorrhage
Underlying cause: T/C Bleeding Peptic Ulcer Disease
 Consequently, the respondent, as widow, filed with the GSIS on May 24, 2001 a claim for
income benefits accruing from the death of her husband, pursuant to Presidential Decree
No. 626 (P.D. 626), as amended. On August 31, 2001, the GSIS denied the claim on the
ground that the respondent did not submit any supporting documents to show that
Francisco’s death was due to peptic ulcer. – RESPONDENT APPEALED TO ECC
 ECC DECISION: ECC affirmed the findings of the GSIS in its decision of July 24, 2002.
According to the ECC, it could not determine if Francisco’s death was compensable due to
the absence of documents supporting the respondent’s claim. Since Francisco had no prior
history of consultation relating to peptic ulcer and no autopsy was performed to ascertain
the cause of his death, the ECC could not conclude that Bleeding Peptic Ulcer Disease was
the reason for his demise.
 JEAN ALLEGATION AT CA: She alleged that ECC failed to consider that peptic ulcer is an
on and off disease which does not need confinement in a hospital or clinic or submission to
a Doctor of Medicine because it can be cured by self-medication. Also, that ECC failed to
consider also that there were medical treatment of Francisco Raoet of occupational and
compensable diseases other than peptic ulcer as shown by the medical findings of
certificates.
 CA DECISION: The CA reversed the ECC decision and held that while the Amended Rules
on Employees’ Compensation does not list peptic ulcer as an occupational disease,
Francisco’s death should be compensable since its immediate cause was cardiac arrest.
Thus, the CA ordered the GSIS to pay the respondent’s claim for death benefits under P.D.
626, as amended.
 GSIS ARGUMENTS TO SC:
1. The GSIS reasons out that since the cause of Francisco’s death was peptic ulcer,
a disease not included in the occupational diseases listed in Annex "A" of the
Amended Rules on Employees’ Compensation, proof must be shown that the risk
of contracting the disease was increased by his working conditions.
2. That respondent failed to present any such evidence to support her claim apart
from her bare allegations. In fact, Francisco’s medical records disclose that he did
not consult his doctors regarding peptic ulcer. Since no autopsy was performed to
ascertain the cause of death, no assurance exists that Bleeding Peptic Ulcer was
indeed the cause of his death.
3. That Francisco’s other ailments, i.e., his hypertension and coronary artery disease,
had already been awarded the maximum benefits commensurate to the degree of
his disability when he was granted 30 days Temporary Total Disability benefits,
plus reimbursement of medical expenses incurred in the treatment of these
illnesses. Thus, no death benefit for the same diseases can be claimed.
4. That the employees’ compensation trust fund is presently empty, and claims on
this fund are being paid by the GSIS from advances coming from its other funds.
Accordingly, the GSIS argues that the trust fund would suffer if benefits are paid to
claimants who are not entitled under the law.
 RESPONDENT CLAIMS: Respondent claims that the issues the GSIS raised are
essentially questions of fact which the Court is now barred from resolving in a petition for
review on certiorari. Thus, she posits that the petition should be denied.
ISSUE: Whether or not the RESPONDENT is entitled to claim death benefits for his
husband’s death.
Page 3 of 9
RULING: YES. The Court ruled that RESPONDENT JEAN is entitled to claim the death
benefit from the GSIS.
In this case the Court disagree with the contention of the GSIS that RESPONDENT failed to
submit enough evidence that will support her claim that the cause of death of her husband
was peptic ulcer because the court ruled that presentation of a death certificate
establishes the fact of death and its immediate, antecedent, and underlying causes.
Hence, since neither the GSIS nor the ECC presented any evidence to refute that cardiac
arrest was the immediate cause, and peptic ulcer was the underlying cause of Francisco’s
death, we accept as established, in accordance with the death certificate, that the
underlying cause of Francisco’s demise was peptic ulcer.
Secondly, in finally resolving the issue whether RESPONDENT is entitled, the Court ruled
that PEPTIC ULCER is a compensable illness under PD 626 even if it is not listed as
occupational disease. The Court explained that contrary to the CA’s conclusion, peptic ulcer
is a compensable cause of death, pursuant to ECC Resolution No. 1676 dated January 29,
1981, which unmistakably provides that peptic ulcer is a compensable disease listed
under Annex "A," provided the claimant is in an occupation that involves prolonged
emotional or physical stress, as among professional people, transport workers and the
like.
In this case, the Court found that the pressures of Francisco’s work – constant, continuing
and consistent at his level of responsibility – inevitably manifested their physical effects on
Francisco’s health and body; the initial and most obvious were the hypertension and
coronary artery disease that the GSIS itself recognized. Less obvious, but nevertheless
arising from the same pressures and stresses, were the silent killers, like peptic ulcer, that
might not have attracted Francisco’s attention to the point of driving him to seek immediate
and active medical intervention. Ultimately, when the ulcer-producing stresses did not end,
his ulcer bled profusely, affecting his heart and causing its arrest. In this manner, Francisco
died.
HENCE, in view of the foregoing, the Court ruled that his widow should now be granted
benefits for Francisco’s death is a conclusion we cannot avoid and is, in fact, one that we
should gladly make as a matter of law and social justice.
EXPLANATION OF THE COURT AS TO THE PURPOSE OF P.D. 626
Understandably, the GSIS may accuse us of leniency in the grant of compensation benefits
in light of the jurisprudential trends in this area of law. Our leniency, however, is not due to
our individual predilections or liberal leanings; it proceeds mainly from the character of P.D.
626 as a social legislation whose primordial purpose is to provide meaningful protection to
the working class against the hazards of disability, illness, and other contingencies resulting
in loss of income.
In employee compensation, persons charged by law to carry out the Constitution’s social
justice objectives should adopt a liberal attitude in deciding compensability claims and
should not hesitate to grant compensability where a reasonable measure of work-
connection can be inferred.
Only this kind of interpretation can give meaning and substance to the law’s compassionate
spirit as expressed in Article 4 of the Labor Code – that all doubts in the implementation and
interpretation of the provisions of the Labor Code, including their implementing rules and
regulations, should be resolved in favor of labor.
When the implementors fail to reach up to these standards, this Court, as guardian of the
Constitution, necessarily has to take up the slack and order what we must, to ensure that
the constitutional objectives are achieved. This is simply what we are doing in this case.
Acting on this same role, we remind the GSIS that when it is called upon to determine
the compensability of an employee’s disease or death, the present state of the State
Insurance Fund cannot be an excuse to avoid the payment of compensation. If the
State Insurance Fund lacks the financial capacity, it is not the responsibility of the insured
civil servant, but rather of the State to fill in the deficiency and ensure the solvency of the
State Insurance Fund. This is the clear mandate of Article 184 of the Labor Code, which
reads:
Article 184. Government guarantee. – The Republic of the Philippines guarantees
the benefits prescribed under this Title, and accepts general responsibility for the
solvency of the State Insurance Fund. In case of deficiency, the same shall be
covered by supplemental appropriations from the national government.
In Biscarra v. Republic, we explicitly said:21
The fear that this humane, liberal and progressive view will swamp the
Government with claims for continuing medical, hospital and surgical services
and as a consequence unduly drain the National Treasury, is no argument
against it; because the Republic of the Philippines as a welfare State, in
providing for the social justice guarantee in our Constitution, assumes
such risk. This assumption of such a noble responsibility is, as heretofore
stated, only just and equitable since the employees to be benefited thereby
precisely became permanently injured or sick while invariably devoting the
greater portion of their lives to the service of our country and people. Human
beings constitute the most valuable natural resources of the nation and
therefore should merit the highest solicitude and the greatest protection
from the State to relieve them from unbearable agony. They have a right to
entertain the hope that during the few remaining years of their life some
dedicated institution or gifted individual may produce a remedy or cure to relieve
them from the painful or crippling or debilitating or humiliating effects of their
injury or ailment, to fully and completely rehabilitate them and develop their
"mental, vocational and social potential," so that they will remain useful and
productive citizens. [Emphasis supplied]
The GSIS, therefore, cannot use the excuse of the State Insurance Fund’s present lack of
capital to refuse paying income benefits to the respondent, whose husband devoted 27
years of his life to government service and whose death was caused by an ailment
aggravated by the emotional stresses and pressures of his work.
Page 4 of 9
WHEREFORE, premises considered, we hereby DENY the petition for lack of merit. No
costs.

SO ORDERED.

Page 5 of 9
The CA decision and Peptic Ulcer
as Compensable Illness
According to the CA, Francisco’s death is compensable even if peptic ulcer is not a listed
occupational disease, since Francisco died due to a listed cause – cardiac arrest.
The Court disagree.
The CA is apparently wrong in its conclusion as it viewed in isolation the immediate cause
of death (cardiac arrest), disregarding that what brought about the cardiac arrest was the
ultimate underlying cause – peptic ulcer. This error, however, does not signify that
Francisco’s death is not compensable because peptic ulcer itself, under specific conditions,
is a compensable illness.
Contrary to the CA’s conclusion, peptic ulcer is a compensable cause of death, pursuant to
ECC Resolution No. 1676 dated January 29, 1981, which unmistakably provides that peptic
ulcer is a compensable disease listed under Annex "A," provided the claimant is in an
occupation that involves prolonged emotional or physical stress, as
among professional people, transport workers and the like.
Peptic Ulcer is defined as:
[A]n ulceration of the mucous membrane of the esophagus, stomach or
duodenum, caused by the action of the acid gastric juice.
Peptic ulcer is most common among persons who are chronically anxious or
irritated, or who otherwise suffer from mental tension. It occurs about three
times as often in men as in women. Symptoms include a pain or gnawing
sensation in the epigastric region. The pain occurs from 1 to 3 hours after eating,
and is usually relieved by eating or taking an antacid drug. Vomiting, sometimes
preceded by nausea, usually follows a severe bout of pain.
COMPLICATIONS. If ulcers are untreated, bleeding can occur, leading to anemia
and therefore weakness and impaired health. Blood may be vomited, and
appears brownish and like coffee grounds because of the digestive effect of
gastric secretions on the hemoglobin. There may be blood in the stools, giving
them a tarry black color. In acute cases sudden hemorrhage can occur and
may be fatal if not treated properly.
xxxx
Worry and anxiety can contribute to the development of an ulcer and prevent
it from healing. If emotional tensions persist, an ulcer that has been healed by
medical treatment can return. Therefore, every effort is made to help the patient
relax. Sometimes counseling or psychotherapy is helpful in relieving emotional
strain.
Based on the Annex "A" list and the accompanying requisite condition for compensability,
the question that really confronts us is: did Francisco’s occupation involve prolonged
emotional or physical stress to make his death due to peptic ulcer compensable?
A significant point to appreciate in considering this question is that based on the GSIS’ own
records, Francisco was diagnosed with Hypertension, Severe, Stage III, Coronary Artery
Disease, and confined at the Region I Medical Center in July 2000. The GSIS found this
ailment work-connected and awarded Francisco 30 days Temporary Total Disability
benefits. This finding assumes importance in the present case because the established
underlying causes of the combination of these diseases are, among others, the stressful
nature and pressures inherent in an occupation.  This was what the GSIS acknowledged
in recognizing Francisco’s total temporary disability.
As already mentioned, Francisco worked as Engineer A with the NIA, a job with enormous
responsibilities. He had to supervise the construction activities of Lateral E and E-1, and
review the structural plan and facilities. The stresses these responsibilities carried did not
abate for Francisco when he returned from his Temporary Total Disability; he occupied the
same position without change of responsibilities until his death on May 5, 2001. Thus,
Francisco had continuous exposure to prolonged emotional stress that would qualify
his peptic ulcer – a stress-driven ailment – as a compensable cause of death.
In arriving at this conclusion, we stress that in determining the compensability of an illness,
we do not require that the employment be the sole factor in the growth, development, or
acceleration of a claimant’s illness to entitle him to the benefits provided for. It is enough
that his employment contributed, even if only in a small degree, to the development of the
disease. 
In the recent case of GSIS v. Vicencio,  we said:
It is well-settled that the degree of proof required under P.D. No. 626 is merely
substantial evidence, which means, "such relevant evidence as a reasonable mind
might accept as adequate to support a conclusion." What the law requires is a
reasonable work-connection and not a direct causal relation. It is enough that the
hypothesis on which the workman’s claim is based is probable. Medical opinion to the
contrary can be disregarded especially where there is some basis in the facts for
inferring a work-connection. Probability, not certainty, is the touchstone. It is not
required that the employment be the sole factor in the growth, development or
acceleration of a claimant’s illness to entitle him to the benefits provided for. It
is enough that his employment contributed, even if to a small degree, to the
development of the disease. 
Page 6 of 9
 11. G.R. No. 160302               September 27, 2010 - INTERPRETATION
JAILE OLISA, ISIDRO SANCHEZ, ANTONIO SARCIA, OSCAR CONTRERAS, ROMEO
ZAMORA, MARIANO GAGAL, ROBERTO MARTIZANO, DOMINGO SANTILLICES,
ARIEL ESCARIO, HEIRS OF FELIX LUCIANO, AND MALAYANG SAMAHAN NG MGA
MANGGAGAWA SA BALANCED FOODS, Petitioners,
vs.
DANILO ESCARIO, PANFILO AGAO, ARSENIO AMADOR, ELMER COLICO, ROMANO
DELUMEN, DOMINADOR AGUILO, OLYMPIO GOLOSINO, RICARDO LABAN, LORETO
MORATA, ROBERTO TIGUE, GILBERT VIBAR, THOMAS MANCILLA, JR., NESTOR
LASTIMOSO, JIMMY MIRABALLES, NATIONAL LABOR RELATIONS COMMISSION
(THIRD DIVISION), PINAKAMASARAP CORPORATION, DR. SY LIAN TIN, AND
DOMINGO TAN, Respondents.
CASE: This is a petition for review on certiorari of the CA decision which affirm the decision
of NLRC directing their reinstatement of the petitioners to their former positions without
backwages, or, in lieu of reinstatement, the payment of separation pay equivalent to one-
half month per year of service.
FACTS:
 The PETITIONERS were among the regular employees of RESPONDENT
PINAKAMASARAP CORPORATION (PINA), a corporation engaged in manufacturing and
selling food seasoning. They were members of petitioner Malayang Samahan ng mga
Manggagawa sa Balanced Foods (UNION).
 At 8:30 in the morning of March 13, 1993, all the officers and some 200 members of the
UNION walked out of PINA’s premises and proceeded to the barangay office to show
support for JUANITO CAÑETE, an officer of the UNION charged with oral defamation by
Aurora Manor, PINA’s personnel manager, and Yolanda Fabella, Manor’s secretary. 
 It appears that the proceedings in the barangay resulted in a settlement, and the officers
and members of the Union all returned to work thereafter.
 As a result of the walkout, PINA preventively suspended all officers of the UNION because
of the March 13, 1993 incident. PINA terminated the officers of the Union after a month.
 On April 14, 1993, PINA filed a complaint for unfair labor practice (ULP) and damages.
 LA DECISION: LA held that the March 13, 1993 incident was an illegal walkout constituting
ULP; and that all the Union’s officers, except Cañete, had thereby lost their employment.
 UNION filed a notice of strike, claiming that PINA was guilty of union busting through the
constructive dismissal of its officers. On May 9, 1993, the Union held a strike vote, at which
a majority of 190 members of the Union voted to strike. The strike was held in the afternoon
of June 15, 1993.
 PINA retaliated by charging the petitioners with ULP and abandonment of work, stating that
they had violated provisions on strike of the collective bargaining agreement (CBA), such
as:
 NLRC issued a TRO, enjoining the Union’s officers and members to cease and desist from
barricading and obstructing the entrance to and exit from PINA’s premises, to refrain from
committing any and all forms of violence, and to remove all forms of obstructions such as
streamers, placards, or human barricade.
 LA DECISION: LA held that the subject strike to be illegal and that there was abandonment.
– RESPONDENT APPEAL TO NLRC
 NLRC DECISION: NLRC sustained the findings that the strike was illegal but reversed the
LA’s ruling that there was abandonment of their employment citing Article 264 of the Labor
Code.
Under Article 264 of the Labor Code, as amended, the union officers who
knowingly participate in the illegal strike may be declared to have lost their
employment status. However, mere participation of a union member in the illegal
strike does not mean loss of employment status unless he participates in the
commission of illegal acts during the strike.
While it is true that complainant thru individual memorandum directed the
respondents to return to work (pp. 1031-1112, Records) there is no showing that
respondents deliberately refused to return to work. A worker who joins a strike
does so precisely to assert or improve the terms and conditions of his work. If his
purpose is to abandon his work, he would not go to the trouble of joining a strike
(BLTB v. NLRC, 212 SCRA 794).
HENCE, PINA is directed to reinstate respondents named in the complaint to their former
positions but without backwages. In the event that reinstatement is not feasible complainant
company is directed to pay respondents separation pay at one (1/2) half month per year of
service.
 CA DECISION: The CA affirmed the NLRC applying Article 264(a) instead of Article 279 of
the Labor Code, explaining that the only instance under Article 264 when a dismissed
employee would be reinstated with full backwages was when he was dismissed by reason
of an illegal lockout; that Article 264 was silent on the award of backwages to employees
participating in a lawful strike; and that a reinstatement with full backwages would be
granted only when the dismissal of the petitioners was not done in accordance with Article
282 (dismissals with just causes) and Article 283 (dismissals with authorized causes) of the
Labor Code.
ISSUE: (1) Whether or not the PETITIONERS are entitled to reinstatement
Page 7 of 9
 (2) Whether or not the PETITIONERS are entitled to full backwages from the date
of dismissal until the date of actual reinstatement due to their not being found to
have abandoned their jobs.
RULING:
First Issue: YES. The Court ruled that the petitioners are entitled to be reinstated in
accordace with Article 264 and not in accordance with Article 279 of the Labor Code.
By its use of the phrase unjustly dismissed, Article 279 refers to a dismissal that is unjustly
done, that is, the employer dismisses the employee without observing due process, either
substantive or procedural. Substantive due process requires the attendance of any of the
just or authorized causes for terminating an employee as provided under Article 278
(termination by employer), or Article 283 (closure of establishment and reduction of
personnel), or Article 284 (disease as ground for termination), all of the Labor Code; while
procedural due process demands compliance with the twin-notice requirement.
In contrast, the third paragraph of Article 264(a) states:
Art. 264. Prohibited activities. – (a) xxx
Any worker whose employment has been terminated as a consequence of
an unlawful lockout shall be entitled to reinstatement with full backwages.
Any union officer who knowingly participates in an illegal strike and any worker
or union officer who knowingly participates in the commission of illegal acts
during a strike may be declared to have lost his employment status; Provided,
That mere participation of a worker in a lawful strike shall not constitute
sufficient ground for termination of his employment, even if a replacement had
been hired by the employer during such lawful strike.
xxx
Contemplating two causes for the dismissal of an employee, that is: (a)
unlawful lockout; and (b) participation in an illegal strike, the third paragraph of
Article 264(a) authorizes the award of full backwages only when the termination
of employment is a consequence of an unlawful lockout.
On the consequences of an illegal strike, the provision distinguishes between a
union officer and a union member participating in an illegal strike. A union
officer who knowingly participates in an illegal strike is deemed to have
lost his employment status, but a union member who is merely instigated
or induced to participate in the illegal strike is more benignly treated.
Part of the explanation for the benign consideration for the union member is the
policy of reinstating rank-and-file workers who are misled into supporting illegal
strikes, absent any finding that such workers committed illegal acts during the
period of the illegal strikes.
The petitioners were terminated for joining a strike that was later declared to be illegal. The
NLRC ordered their reinstatement or, in lieu of reinstatement, the payment of their
separation pay, because they were mere rank-and-file workers whom the Union’s officers
had misled into joining the illegal strike. They were not unjustly dismissed from work.
Based on the text and intent of the two aforequoted provisions of the Labor Code,
therefore, it is plain that Article 264(a) is the applicable one.
Second Issue: NO. The Court ruled that the petitioners are not entitled with backwages
despite the declaration of their reinstatement in accordance with the policy of a fair day’s
wage for a fair day’s labor. In this case, the Court ruled that backwages are not granted to
employees participating in an illegal strike simply accords with the reality that they do not
render work for the employer during the period of the illegal strike. Hence, even if in the
union members who are merely instgated or induced to participate in the illegal strike is
ordered to be reinstated, they are not entitled to backwages simply because they do not go
to work on the said date of strike.
In explaining the point, the court cited 2 cases which are:
G&S Transport Corporation v. Infante: With respect to backwages, the principle of a "fair
day’s wage for a fair day’s labor" remains as the basic factor in determining the award
thereof. If there is no work performed by the employee there can be no wage or pay
unless, of course, the laborer was able, willing and ready to work but was illegally
locked out, suspended or dismissed or otherwise illegally prevented from working.
xxx
In Philippine Marine Officers’ Guild v. Compañia Maritima, as affirmed in Philippine
Diamond Hotel and Resort v. Manila Diamond Hotel Employees Union, the Court stressed
that for this exception to apply, it is required that the strike be legal, a situation that does not
obtain in the case at bar.
The petitioners herein do not deny their participation in the June 15, 1993 strike. As such,
they did not suffer any loss of earnings during their absence from work. Their
reinstatement sans backwages is in order, to conform to the policy of a fair day’s
wage for a fair day’s labor.
Under the principle of a fair day’s wage for a fair day’s labor, the petitioners were not
entitled to the wages during the period of the strike (even if the strike might be legal),
because they performed no work during the strike. Verily, it was neither fair nor just that the
dismissed employees should litigate against their employer on the latter’s time. 
IN VIEW OF THE FOREGOING. the Court deleted the award of backwages and held that
the striking workers were entitled only to reinstatement in Philippine Diamond Hotel and
Resort, Inc. (Manila Diamond Hotel) v. Manila Diamond Hotel Employees Union,
considering that the striking employees did not render work for the employer during the
strike.
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