Module-9 - Merged Intel Cases

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Case Digests in Labor Law Review
Emilio Diokno, et al. v. Hon. Hans Leo Cacdac, Director of BLR, et al.
G.R. No. 168475; July 4, 2007
Chico-Nazario, J.
The BLR has the original and exclusive jurisdiction on all inter-union and intra-union
conflicts. Since Article 226 of the Labor Code has declared that the BLR shall have
original and exclusive authority to act on all inter-union and intra-union conflicts,
there should be no more doubt as to its jurisdiction. As defined, an intra-union conflict
refer to a conflict within or inside a labor union, while interunion controversy or
dispute is one occurring or carried on between and among unions.
Facts
Petitioners and private respondents are members of First Line Association of Meralco Supervisory Employees
(FLAMES) which is the supervisory union of Meralco. FLAMES Executive Board created a COMELEC for
the conduct of its union elections. Jimmy Ong, et. al. filed their respective certificates of candidacies, which the
COMELEC rejected on ground that he was not a member of FLAMES. Ong et. al. filed a petition before the
med- arbitration of DOLE to nullify the order of COMELEC. Consequently, DOLE personnel were directed to
observe the conduct of the FLAMES election.
Meanwhile, petitioners sought the disqualification of respondents Daya et. al. Petitioners alleged that Daya, et al.,
allowed themselves to be assisted by non-union members, and committed acts of disloyalty which are inimical to
the interest of FLAMES. In their campaign, they allegedly colluded with the officers of the Meralco Savings and
Loan Association (MESALA) and the Meralco Mutual Aid and Benefits Association (MEMABA) and exerted
undue influence on the members of FLAMES. As a result, the COMELEC disqualified Daya et al from the
election on May 6, 2003. On May 7, 2003 COMELEC proclaimed the winner of the elections which included
Diokno as president. Daya et al and Ong et al filed with the med-arbitration unit of DOLE a petition to nullify
the order of disqualification, election proceedings and counting of votes, and to seek declaration of holding new
election to be controlled and supervised by DOLE.
Another group, Jimenez et al (Jimenez Jr., Reyes, Gavino, Vidanes, Tayao, Cirujano, Cadavona, Caoc, Maclit,
Acorda, Ragasa, de Vera) filed a petition with the med-arbitration unit of DOLE to nullify the election on the
ground that it was not free, orderly and peaceful. Ong et al, Daya et al and Jimenez et al were eventually consolidated.
MA: Reversed the disqualification imposed by the COMELEC.
BLR Director: Affirmed the Med-Arbiter.
CA: Affirmed the BLR.
Issue
Did the CA err in affirming the jurisdiction of the BLR to take cognizance of the case and then upheld the ruling of
the BLR Director and Med-Arbiter, nullifying the COMELEC’s order of disqualification of private respondents
Data et al., and annulling the May 7, 2007 FLAMES elections?
Ruling
No. BLR has the original and exclusive jurisdiction on all inter-union and intra-union conflicts. We said that since
Article 226 of the Labor Code has declared that the BLR shall have original and exclusive authority to act on all
inter-union and intra-union conflicts, there should be no more doubt as to its jurisdiction.
As defined, an intra-union conflict refer to a conflict within or inside a labor union, while inter- union controversy
or dispute is one occurring or carried on between and among unions. More specifically, an intra-union dispute is
defined under Sec. (z), Rule I of the Rules Implementing Rule V of the Labor Code, viz:
(z) “Intra-Union Dispute” refers to any conflict between and among union members, and includes all
disputes or grievances arising from any violation of or disagreement over any provision of the constitution
and by-laws of a union, including cases arising from chartering or affiliation of labor organizations or from
san beda university 203 college of law

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any violation of the rights and conditions of union membership provided for in the Code.
The controversy in the case at bar is an intra-union dispute. There is no question that this is one which involves
a dispute within or inside FLAMES, a labor union. Despite the allegations that Daya, et. al. sought help from
non- members, it does not detract from the real character of the controversy. It remains as one which involves the
grievance over the constitution and by- laws of a union, and it is a controversy involving members of the union.
Moreover, the non- members of the union who were alleged to have aided private respondents Daya, et al., are not
parties in the case.

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Atty. Allan Montaño v. Atty. Ernesto Verceles

G.R. No. 168583; July 26, 2010
Del Castillo, J.
BLR and the Regional Directors of DOLE have concurrent jurisdiction over inter-
union and intra-union disputes.
Facts
Atty. Montaño worked as legal assistant of FFW Legal Center. Subsequently, he joined the union of rank-and-file
employees, the FFW Staff Association, and eventually became the employees’ union president. He was likewise
designated officer-in-charge of FFW Legal Center.
During the 21st National Convention and Election of National Officers of FFW, Atty. Montaño was nominated
for the position of National VicePresident. However, the FFW COMELEC informed him that he is not qualified
for the position as his candidacy violates the 1998 FFW Constitution and By-Laws. Atty. Montaño thus filed an
Urgent Motion for Reconsideration praying that his name be included in the official list of candidates.
Election ensued. Despite the pending motion for reconsideration with the FFW COMELEC, and strong
opposition and protest of respondent Atty. Ernesto C. Verceles, a delegate to the convention and president of
University of the East Employees’ Association which is an affiliate union of FFW, the convention delegates allowed
Atty. Montaño’s candidacy. He emerged victorious and was proclaimed as the National Vice-President.
BLR: there was sufficient compliance with the requirements laid down by Section 26 of Article VIII of the FFW
Constitution and By-laws and, besides, the convention delegates unanimously decided that Atty. Montaño was
qualified to run for the position of National Vice-President.
CA: Atty. Montaño did not possess the qualification requirement under paragraph (d) of Section 26 that candidates
must be an officer or member of a legitimate labor organization. According to the CA, since Atty. Montaño, as
legal assistant employed by FFW, is considered as confidential employee, consequently, he is ineligible to join FFW
Staff Association, the rank- and-file union of FFW.
Atty. Montaño contends that the CA gravely erred in upholding the jurisdiction of the BLR.
Issue
Whether or not the BLR has jurisdiction over intra-union disputes involving a federation.
Ruling
Yes. Section 226 of the Labor Code clearly provides that the BLR and the Regional Directors of DOLE have
concurrent jurisdiction over inter-union and intra-union disputes. Such disputes include the conduct or
nullification of election of union and workers’ association officers. There is, thus, no doubt as to the BLR’s
jurisdiction over the instant dispute involving member-unions of a federation arising from disagreement over the
provisions of the federation’s constitution and by-laws.
Rule XVI lays down the decentralized intra-union dispute settlement mechanism. Section 1 states that any
complaint in this regard ‘shall be filed in the Regional Office where the union is domiciled.’ The concept of
domicile in labor relations regulation is equivalent to the place where the union seeks to operate or has established
a geographical presence for purposes of collective bargaining or for dealing with employers concerning terms and
conditions of employment.
The matter of venue becomes problematic when the intra-union dispute involves a federation, because the
geographical presence of a federation may encompass more than one administrative region. Pursuant to its authority
under Article 226, this Bureau exercises original jurisdiction over intra-union disputes involving federations. It is
well-settled that FFW, having local unions all over the country, operates in more than one administrative region.
Therefore, this Bureau maintains original and exclusive jurisdiction over disputes arising from any violation of or
disagreement over any provision of its constitution and by-laws.

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La Tondeña Workers Union v. Secretary of Labor and Employment, et al.

G.R. No. 96821; December 9, 1994
Del Castillo, J.
The Labor Code, as amended by RA 6715, likewise authorizes the BLR to decide intra-union
disputes. This includes the examinations of accounts.
Facts
Petitioner La Tondena Worker’s Union (LTWU) is a duly registered labor organization. For over 30 years, it was
the solo bargaining agent of the rank-and-file workers of La Tondena. However, LTWU would eventually be
defeated in a certification election to the Ilaw at Buklod ng Manggagawa (IBM). The reason for such fact is that
about 200 members of the union petitioned the DOLE-NLRC to conduct an examination on the funds and
financial records of the union. It would be found that Ramon de la Cruz (president) and Norma Marin (treasurer)
were liable for union funds amounting to 367, 553 pesos. De la Cruz and Marin would appeal to DOLE Secretary
Franklin Drilon on the ground that they were not given the opportunity to be heard. The case was indorsed to the
Director of the Bureau of Labor Relations (BLR).
BLR: The Director of the BLR ruled in favor of De la Cruz and Martin stating that they were indeed not given the
opportunity to be heard which is why another audit must be conducted.
LTWU filed an MR contending that under Art. 274 of the Labor Code, as amended by Republic Act No. 6715, the
power to order an examination of the books of accounts and financial activities of a union is vested in the Secretary
of Labor and Employment or his representative and the BLR cannot be considered the Secretary’s representative.
The BLR maintained that it had jurisdiction over the matter and proceeded with another audit that was solely
based on the certification of the company.
Petitioner LTWU would file a motion for review before the DOLE. In the meantime, BLR continued with its
audit and found De la Cruz and Martin to still be liable for the total amount of P367,553.00. The DOLE secretary,
on the other hand, referred the petition to the BLT. The motions for review were denied by the BLT on the ground
that they were now moot and academic. Hence, the present petition.
Issue
Whether or not the BLR has the power to examine the books of accounts of petitioner.
Ruling
Yes. “The Secretary of Labor and Employment or his duly authorized representative is hereby empowered to
inquire into the financial activities of legitimate labor organizations upon the filing of a complaint under oath
and duly supported by the written consent of at least twenty (20%) percent of the total membership of the labor
organization concerned and to examine their books of accounts and other records to determine compliance or
non-compliance with the law and to prosecute any violations of the law and the union constitutions and by-laws;
Provided, that such inquiry or examination shall not be conducted during the sixty (60) day freedom period nor
within the thirty (30) days immediately preceding the date of election of union officials.”
Petitioner LTWU argues that the BLT cannot be considered a duly authorized representative because Rule 1, sec. 1
(ff) of the IRR already defined who are those who can act as a representative; namely: “Union Accounts Examiners
are officials of the Bureau or the Industrial Relations Division in the Regional Office empowered to audit books
of accounts of the union” Respondent BLT argues that the Union Accounts Examiners are actually their officials
as the phrase “are officials of the Bureau” refers to the Bureau of Labor Relations. The Supreme Court agreed
with the respondent’s contention and stated that “bureau” in Rule 1, Section 1 (ff) refers to the Bureau of Labor
Relations.
Furthermore, in the case at bar, the Secretary of Labor and Employment expressly indorsed the case to the BLT.
By virtue of such indorsement, the Secretary of Labor and Employment must be presumed to have authorized
the BLR to act on his behalf. Besides such delegation, the BLT has its own independent power to conduct the
examination of accounts. The Supreme Court cited Article 226 of the Labor Code which provides:

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“The Bureau of Labor Relations and the Labor Relations Divisions in the regional offices of the Department
of Labor shall have original and exclusive authority to act, at their own initiative or upon request of either or
both parties on all inter-union and intra-union conflicts, and all disputes, grievances or problems arising from
or affecting labor-management relations in all workplaces whether agricultural or non-agricultural, except those
arising from the implementation or interpretation of collective bargaining agreements which shall be the subject
of grievance procedure and/or voluntary arbitration.
The Bureau shall have fifteen (15) working days to act on labor cases before it, subject to extension by agreement
of the parties.”
Petitioner’s contention that the intra-union dispute mentioned in this provision does not include the examination
of accounts of the union because it contemplates intra-union conflicts affecting labor-management relations is
untenable. Conflicts affecting labor- management relations are apart from intra-union conflicts, as is apparent
from the text of Art. 226. Hence, the Bureau of Labor Relations has the power to examine the books of accounts
of petitioner.

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Abbott Laboratories Philippines, Inc. v.

Abbott Laboratories Employees Union, et al.
G.R. No. 131374; January 26, 2000
Davide, Jr., C.J.
Decisions of the Bureau of Labor Relations on cases brought before it on appeal from the
Regional Director are final and executory.
The appellate jurisdiction of the Secretary of Labor and Employment is limited only to
a review of cancellation proceedings decided by the Bureau of Labor Relations in the
exercise of its exclusive and original jurisdiction—he has no jurisdiction over decisions
of the Bureau of Labor Relations rendered in the exercise of its appellate power to review
the decision of the Regional Director in a petition to cancel the union’s certificate of
registration, said decisions being final and unappealable.
Facts
ABBOTT is a corporation engaged in the manufacture and distribution of pharmaceutical drugs. On 22 February
1996, the Abbott Laboratories Employees Union (hereafter ALEU) represented by its president, Alvin B.
Buerano, filed an application for union registration in the Department of Labor and Employment. ALEU alleged
in the application that it is a labor organization with members consisting of 30 rank-and-file employees in the
manufacturing unit of ABBOTT and that there was no certified bargaining agent in the unit it sought to represent,
namely, the manufacturing unit.
BLR: On 28 February 1996, ALEU’s application was approved by the Bureau of Labor Relations, which in due
course issued Certificate of Registration. Consequently, ALEU became a legitimate labor organization.
ABBOTT assailed the certificate of registration since ALEU’s application was not signed by at least 20% of the
total 286 rank-and-file employees of the entire employer unit; and that it omitted to submit copies of its books of
account. The Regional Director found that for ALEU’s failure to satisfy the requirements of union registration
under Article 234 of the Labor Code; the cancellation of its certificate of registration was in order.
Forthwith, on 19 August 1996, ALEU appealed said cancellation to the Office of the Secretary of Labor and
Employment, which referred the same to the Director of the Bureau of Labor Relations.
BLR: On 31 March 1997, the Bureau of Labor Relations rendered judgment reversing the 21 June 1996 decision
of the Regional Director, “WHEREFORE, Abbott Laboratories Employees Union shall remain in the roster of
legitimate labor organizations, with all the rights, privileges and obligations appurtenant thereto.”
The Secretary of Labor and Employment refused to act on ABBOTT’s appeal on the ground that it has no
jurisdiction to review the decision of the Bureau of Labor Relations on appeals in cancellation cases emanating
from the Regional Offices. The decision of the Bureau of Labor Relations therein is final and executory under
Section 4, Rule III, Book V of the Rules and Regulations Implementing the Labor Code
Issue
May the Secretary of Labor and Employment review the decisions of the Bureau of Labor Relations rendered in
the exercise of its appellate jurisdiction over decisions of the Regional Director in cases involving cancellations of
certificates of registration of labor unions.
Ruling
No. Contrary to ABBOTT’s contention, there has been no grave abuse of discretion on the part of the Secretary of
Labor and Employment. Its refusal to take cognizance of ALEU’s appeal from the decision of the Bureau of Labor
Relations is in accordance with the provisions of Rule VIII, Book V of the Omnibus Rules Implementing the
Labor Code as amended by Department Order No. 09. The rule governing petitions for cancellation of registration
of any legitimate labor organization or worker association, as it now stands, provides:
SECTION 1. Venue of Action—If the respondent to the petition is a local/chapter, affiliate, or a

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workers’ association with operations limited to one region, the petition shall be filed with the Regional
Office having jurisdiction over the place where the respondent principally operates. Petitions filed against
federations, national or industry unions, trade union centers, or workers’ associations operating in more
than one regional jurisdiction, shall be filed with the Bureau.
SECTION 3. Cancellation of registration; nature and grounds. Subject to the requirements of notice and
due process, the registration of any legitimate labor organization or worker’s association may be cancelled
by the Bureau or the Regional Office upon the filing of an independent petition for cancellation based
on any of the following grounds.
Clearly, the Secretary of Labor and Employment has no jurisdiction to entertain the appeal of ABBOTT. The
appellate jurisdiction of the Secretary of Labor and Employment is limited only to a review of cancellation
proceedings decided by the Bureau of Labor Relations in the exercise of its exclusive and original jurisdiction. The
Secretary of Labor and Employment has no jurisdiction over decisions of the Bureau of Labor Relations rendered
in the exercise of its appellate power to review the decision of the Regional Director in a petition to cancel the
union’s certificate of registration, said decisions being final and unappealable

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Articles 245-248 (formerly Articles 238-239)

The Heritage Hotel Manila vs. NUWHRAIN-HHMSC

G.R. No.178296; January 12, 2011
Nachura, J.
It is sufficient to give the Regional Director license to treat the late filing of required
documents as sufficient compliance with the requirements of the law. The union members
and, in fact, all the employees belonging to the appropriate bargaining unit should not be
deprived of a bargaining agent, merely because of the negligence of the union officers who
were responsible for the submission of the documents to the Bureau of Labor Relations.
Facts
Respondent, a labor organization of the supervisory employees of petitioner, filed with the DOLE a petition for
certification election which was subsequently granted by the Med-Arbiter. Thereafter, petitioner discovered that
respondent had failed to submit to the BLR its annual financial report for several years and the list of its members
since it filed its registration papers in 1995. Consequently, petitioner filed a petition for cancellation of registration
of respondent, on the ground of non-submission of the said documents. It further requested the suspension of
the certification election proceedings. Petitioner maintained that the resolution of the issue of whether respondent
is a legitimate labor organization is crucial to the issue of whether it may exercise rights of a legitimate labor
organization, which include the right to be certified as the bargaining agent of the covered employees. Nevertheless,
the certification election pushed wherein the respondent emerged as the winner. Afterwards, petitioner filed a
Protest with Motion to Defer Certification of Election Results and Winner.
Respondent prayed for the dismissal of the petition on the ground, among others, that It had already complied
with the reportorial requirements, having submitted its financial statements for 1996- 1999, its updated list of
officers, and its list of members for the years 1995-1999. The CA, affirming the ruling of the DOLE Secretary,
who assumed jurisdiction due to the inhibition of the BLR Director, dismissed the petition for cancellation
of registration of the petitioner. Hence, this petition. Petitioner posits that once it is determined that a ground
enumerated in Article 239 of the Labor Code is present, cancellation of registration should follow; it becomes the
ministerial duty of the Regional Director to cancel the registration of the labor organization, hence, the use of the
word “shall.” Petitioner points out that the Regional Director has admitted in its decision that respondent failed
to submit the required documents for a number of years; therefore, cancellation of its registration should have
followed as a matter of course.
Issue
Whether or not the respondent’s certificate of registration should be cancelled?
Ruling
No. Art. 238 of the Labor Code provides: The certificate of registration of any legitimate labor organization,
whether national or local, shall be canceled by the Bureau if it has reason to believe, after due hearing, that the said
labor organization no longer meets one or more of the requirements herein prescribed. Meanwhile, the grounds
for cancellation of union registration can be found in Art. 239 of the Labor Code which provides: The following
shall constitute grounds for cancellation of union registration:
xxxx
(d) Failure to submit the annual financial report to the Bureau within thirty (30) days after the closing of every
fiscal year and misrepresentation, false entries or fraud in the preparation of the financial report itself;
xxxx
(i) Failure to submit a list of individual members to the Bureau once a year or whenever required by the Bureau.
These provisions give the Regional Director ample discretion in dealing with a petition for cancellation of a
union’s registration, particularly, determining whether the union still meets the requirements prescribed by law.
It is sufficient to give the Regional Director license to treat the late filing of required documents as sufficient
compliance with the requirements of the law. After all, the law requires the labor organization to submit the annual
financial report and list of members in order to verify if it is still viable and financially sustainable as an organization
so as to protect the employer and employees from fraudulent or fly-by-night unions. With the submission of
the required documents by respondent, the purpose of the law has been achieved, though belatedly. The union
members and, in fact, all the employees belonging to the appropriate bargaining unit should not be deprived of a

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bargaining agent, merely because of the negligence of the union officers who were responsible for the submission
of the documents to the BLR.
Labor authorities should, indeed, act with circumspection in treating petitions for cancellation of union
registration, lest they be accused of interfering with union activities. In resolving the petition, consideration must
be taken of the fundamental rights guaranteed by Article XIII, Section 3 of the Constitution, i.e., the rights of
all workers to self- organization, collective bargaining and negotiations, and peaceful concerted activities. Labor
authorities should bear in mind that registration confers upon a union the status of legitimacy and the concomitant
right and privileges granted by law to a legitimate labor organization, particularly the right to participate in or ask
for certification election in a bargaining unit. Thus, the cancellation of a certificate of registration is the equivalent
of snuffing out the life of a labor organization. For without such registration, it loses - as a rule - its rights under
the Labor Code.
At any rate, the Court notes that on 19 May 2000, respondent had submitted its financial statement for the years
1996-1999. With this submission, appellee has substantially complied with its duty to submit its financial report
for the said period. To rule differently would be to preclude the union, after having failed to meet its periodic
obligations promptly, from taking appropriate measures to correct its omissions.
Note: It is worth mentioning that the Labor Code’s provisions on cancellation of union registration and on
reportorial requirements have been recently amended by Republic Act (R.A.) No. 9481. The amendment sought
to strengthen the workers’ right to self-organization and enhance the Philippines’ compliance with its international
obligations as embodied in the International Labour Organization (ILO) Convention No. 87, pertaining to the
non-dissolution of workers’ organizations by administrative authority. Thus, R.A. No. 9481 amended Article 239
to read:
ART. 239. Grounds for Cancellation of Union Registration.—The following may constitute grounds for
cancellation of union registration:
(a) Misrepresentation, false statement or fraud in connection with the adoption or ratification of the constitution
and by-laws or amendments thereto, the minutes of ratification, and the list of members who took part in the
ratification;
(b) Misrepresentation, false statements or fraud in connection with the election of officers, minutes of the election
of officers, and the list of voters;
(c) Voluntary dissolution by the members.
R.A. No. 9481 also inserted in the Labor Code Article 242-A, which provides:
ART. 242-A. Reportorial Requirements.—The following are documents required to be submitted to the Bureau
by the legitimate labor organization concerned:
(a) Its constitution and by-laws, or amendments thereto, the minutes of ratification, and the list of members who
took part in the ratification of the constitution and by-laws within thirty (30) days from adoption or ratification of
the constitution and by-laws or amendments thereto;
(b) Its list of officers, minutes of the election of officers, and list of voters within thirty (30) days from election;
(c) Its annual financial report within thirty (30) days after the close of every fiscal year; and
(d) Its list of members at least once a year or whenever required by the Bureau.
Failure to comply with the above requirements shall not be a ground for cancellation of union registration but
shall subject the erring officers or members to suspension, expulsion from membership, or any appropriate penalty.

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Articles 273-274 (formerly Articles 260-261)

Miguela Santuyo vs. Remerco Garments Manufacturing and/or Reyes

G.R. No. 174420; March 22, 2010
Corona, J.
Cases arising from the interpretation or implementation of collective bargaining

agreements shall be disposed of by the Labor Arbiter by referring the same to the
grievance machinery and voluntary arbitration. Article 260 of the Labor Code clarifies
that such disputes must be referred first to the grievance machinery and, if unresolved
within seven days, they shall automatically be referred to voluntary arbitration.
Facts
Due to a serious industrial dispute, the Kaisahan ng Manggagawa sa Remerco Garments Manufacturing Inc.–
KMMKilusan staged a strike against Remerco Garments Manufacturing, Inc. (RGMI). Because the strike was
subsequently declared illegal, all union officers were dismissed. Employees who wanted to sever their employment
were paid separation pay while those who wanted to resume work were recalled on the condition that they would
no longer be paid a daily rate but on a piece-rate basis. Miguela Santuyo, et al., who had been employed as sewers,
were among those recalled.
Without allowing RGMI to normalize its operations, the union filed a notice of strike in the NCMB. According
to the union, RGMI conducted a time and motion study and changed the salary scheme from a daily rate to
piece- rate basis without consulting it. RGMI therefore not only violated the existing CBA but also diminished
the salaries agreed upon. It therefore committed an unfair labor practice. RGMI filed a notice of lockout in the
NCMB.
RGMI transferred its factory site. The union went on strike and blocked the entry to RGMIs (new) premises.
The Secretary of Labor assumed jurisdiction pursuant to Article 263(g) of the Labor Code and ordered RGMI’s
striking workers to return to work immediately. He likewise ordered the union and RGMI to submit their
respective position papers.
The Secretary of Labor held that RGMI did not lock out its employees inasmuch as it informed them of the
transfer of the worksite. However, he did not rule on the legality of the strike. Furthermore, based on the time
and motion study, the Secretary of Labor found that the employees would receive higher wages if they were paid
on a piece-rate rather than on a daily rate basis. Hence, the new salary scheme would be more advantageous to the
employees. For this reason, despite the provisions of the CBA, the change in salary scheme was validated.
While the conciliation proceedings were pending, Santuyo, et al. filed a complaint for illegal dismissal against RGMI
and Victoria Reyes, accusing the latter of harassment. Labor Arbiter found that RGMI did not pay Santuyo, et
al. their salaries and deprived them of the benefits they were entitled to under the CBA. NLRC denied RGMI’s
appeal.
RGMI and Reyes filed a petition for certiorari in the CA claiming that the NLRC acted with grave abuse of
discretion in affirming the decision of the labor arbiter. They argued that since the complaint involved the
implementation of the CBA, the labor arbiter had no jurisdiction over it.
Court of Appeals: reversed and set aside the decision of the NLRC on the ground that the labor arbiter had no
jurisdiction over the complaint. MR denied.
Issue
Whether the labor arbiter had jurisdiction as the complaint was for illegal dismissal. NO
Ruling
No. Santuyo, et al. clearly and consistently questioned the legality of RGMI’s adoption of the new salary scheme
(i.e., piece-rate basis), asserting that such action, among others, violated the existing CBA. Indeed, the controversy
was not a simple case of illegal dismissal but a labor dispute involving the manner of ascertaining employee’s
salaries, a matter which was governed by the existing CBA.
With regard to the question of jurisdiction over the subject matter, Article 217(c) of the Labor Code provides:

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Cases arising from the interpretation or implementation of collective bargaining agreements and those arising
from the interpretation or enforcement of company personnel policies shall be disposed of by the Labor Arbiter
by referring the same to the grievance machinery and voluntary arbitration as may be provided in said agreements.
Moreover, Article 260 of the Labor Code clarifies that such disputes must be referred first to the grievance
machinery and, if unresolved within seven days, they shall automatically be referred to voluntary arbitration.
In this regard, Article 261 thereof states: The Voluntary Arbitrator or panel of Voluntary Arbitrators shall have
original and exclusive jurisdiction to hear and decide all unresolved grievances arising from the interpretation or
implementation of the Collective Bargaining Agreement And those arising from the interpretation or enforcement
of company personnel policies x x x.
Pursuant to Articles 217 in relation to Articles 260 and 261 of the Labor Code, the labor arbiter should have
referred the matter to the grievance machinery provided in the CBA. Because the labor arbiter clearly did not have
jurisdiction over the subject matter, his decision was void.

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Albert Teng vs. Alfredo Pahagac et al.

G.R. No. 169704; November 17, 2010
Reyes, J.
Article 262-A deleted the word “unappealable” from Article 263. The deliberate selection
of the language in the amendatory act differing from that of the original act indicates
that the legislature intended a change in the law, and the court should endeavor to give
effect to such intent. Article 262-A of the Labor Code does not prohibit the filing of a
motion for reconsideration.
Facts
Albert Teng Fish Trading is engaged in deep sea fishing and, for this purpose, owns boats , equipment, and
other fishing paraphernalia. As owner of the business, Teng claims that he customarily enters into joint venture
agreements with master fishermen (maestros) who are skilled and are experts in deep sea fishing; they take charge
of the management of each fishing venture, including the hiring of the members of its complement. He avers that
the maestros hired the respondent workers as checkers to determine the volume of the fish caught in every fishing
voyage
Respondent workers filed a complaint for illegal dismissal against Albert Teng Fish Trading, Teng, and Chua before
the NCMB alleging that Teng hired them, without any written employment contract, to serve as his “eyes and ears”
aboard the fishing boats; to classify the fish caught by bañera; to report to Teng via radio communication the classes
and volume of each catch; to receive instructions from him as to where and when to unload the catch; to prepare
the list of the provisions requested by the maestro and the mechanic for his approval; and, to procure the items as
approved by him. They also claimed that they received regular monthly salaries, 13th month pay, Christmas bonus,
and incentives in the form of shares in the total volume of fish caught.
VA ruled in Teng’s favor; declared that no employer-employee relationship existed between Teng and the respondent
workers; all other claims are likewise dismissed for lack of merit
Respondent workers received filed a motion for reconsideration.
VA denied the MR Section 6, Rule VII of the 1989 Procedural Guidelines in the Conduct of Voluntary Arbitration
Proceedings (1989 Procedural Guidelines) does not provide the remedy of a motion for reconsideration to the
party adversely affected by the VA’s order or decision.
CA reversed the VA’s decision after finding sufficient evidence showing the existence of employer-employee
relationship
Teng moved to reconsider the CA’s decision, but the CA denied.
Issue
Can respondent workers file an MR from the VA’s decision?
Ruling
Article 262-A of the Labor Code does not prohibit the filing of a motion for reconsideration. As amended, Article
263 is now Article 262-A, which states:
Art. 262-A. x x x [T]he award or decision x x x shall contain the facts and the law on which it is based. It
shall be final and executory after ten (10) calendar days from receipt of the copy of the award or decision
by the parties.
Notably, Article 262-A deleted the word “unappealable” from Article 263. The deliberate selection of the language
in the amendatory act differing from that of the original act indicates that the legislature intended a change in the
law, and the court should endeavor to give effect to such intent.

4S, 4B, and 4G
Under Section 6, Rule VII of the same guidelines implementing Article 262-A of the Labor Code, this Decision,
as a matter of course, would become final and executory after ten (10) calendar days from receipt of copies of the
decision by the parties x x x unless, in the meantime, a motion for reconsideration or a petition for review to the
Court of Appeals under Rule 43 of the Rules of Court is filed within the same 10-day period. We consequently
rule that the respondent workers seasonably filed a motion for reconsideration of the VA’s judgment, and the VA
erred in denying the motion because no motion for reconsideration is allowed.

4S, 4B, and 4G
Samahan ng mga Manggagawa sa Hyatt-NUWHRAIN vs. Hon. Magsalin

G.R. No. 172303; June 6, 2011
Villarama Jr., J.
Separation pay shall be allowed as a measure of social justice only in those instances
where the employee is validly dismissed for causes other than serious misconduct or those
reflecting on his moral character.
Facts
Petitioner Samahan ng mga Manggagawa sa Hyatt-NUWHRAIN-APL (Samahan) is a duly registered union and
the certified bargaining representative of the rank-and-file employees of Hyatt Regency owned and operated by
respondent Hotel Enterprises of the Philippines, Inc.
Angelito Caragdag, a waiter at the hotels Cafe Al Fresco restaurant and a director of the union on several occasions
violated Memorandums of the Manager and the Code of Discipline of the company. Some of his acts are as follows:
1. He refused to be frisked twice by the security personnel in violation of the memorandum issued by the
Manager.
2. When Moral, the manager of Hyatts Cafe Al Fresco and Caragdags immediate superior, was about to counsel
two staff members, Lacambacal and Alvaro, at the training room, Caragdag suddenly opened the door and
started yelling at the two with an enraged look.
3. Again, on one occasion, Caragdag left his work assignment during official hours without prior permission
from his Department Head.
The incidents were reported to the hotels Human Resources Department (HRD), which issued Memorandums
to Caragdag, requiring him to explain in writing why no disciplinary action should be taken against him, however
the HRD found Caragdag’s explanation insufficient and punished him in accordance with the Code of Discipline
with three separate suspensions.
An investigation board was formed after receipt of Caragdags written explanation, and the matter was set for
hearing. After due process, it resolved on the said date to dismiss Caragdag for violation of OSDA 4.32. Caragdag
appealed but the investigating board affirmed its resolution after hearing.
The hotel, through its attorney, sent Caragdag a Notice of Dismissal. Caragdags dismissal was questioned by the
petitioner, and the dispute was referred to voluntary arbitration.
VA Ruling: Three separate suspensions of Caragdag valid; union officers and members had no right to breach
company rules and regulations on security and employee discipline on the basis of certain suspicions against
management and an ongoing CBA negotiation standoff.
Petitioner sought reconsideration but the Voluntary Arbitrator denied his motions. Petitioner assailed VA’s
decision in a petition for certiorari with CA.
CA Ruling: Petition is dismissed outright for being the wrong remedy. He should have filed a Petition for Review
under Rule 43, Section 5 of the ROC; Even if this Court treats the instant petition as a Petition for Review, still the
Court has to dismiss the same for having been filed out of time. In the meantime respondent also filed a petition for
review with the CA on the ground that the Voluntary Arbitrator committed a grievous error in awarding financial
assistance to Caragdag despite his finding that the dismissal due to serious misconduct was valid.
CA deleted the award of financial assistance to Caragdag; CA agreed with the findings of the VA that Caragdag was
validly dismissed due to serious misconduct.
Petitioner sought reconsideration but the CA denied the motion for lack of merit. Hence, petitioner filed before
us a petition for review on certiorari docketed as G.R. No. 172303.
Considering that G.R. Nos. 164939 and 172303 have the same origin, involve the same parties, and raise interrelated
issues, the petitions were consolidated.

4S, 4B, and 4G
Issue
Whether the CA erred in deleting the award of financial assistance in the amount of P100,000.00 to Caragdag.
Ruling
No. Separation pay shall be allowed as a measure of social justice only in those instances where the employee
is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. Where
the reason for the valid dismissal is, for example, habitual intoxication or an offense involving moral turpitude,
like theft or illicit sexual relations with a fellow worker, the employer may not be required to give the dismissed
employee separation pay, or financial assistance, or whatever other name it is called, on the ground of social justice.
A contrary rule would, as the petitioner correctly argues, have the effect of rewarding rather than punishing the
erring employee for his offense.
Here, Caragdags dismissal was due to several instances of willful disobedience to the reasonable rules and regulations
prescribed by his employer. The Voluntary Arbitrator pointed out that according to the hotels Code of Discipline,
an employee who commits three different acts of misconduct within a twelve (12)-month period commits serious
misconduct. He stressed that Caragdags infractions were not even spread in a period of twelve (12) months, but
rather in a period of a little over a month.

4S, 4B, and 4G
NYK-FIL Ship Management v. Dabu

G.R. No. 225142; September 13, 2017
Peralta, J.
The award or decision of the Voluntary Arbitrator or Panel of Voluntary Arbitrators

shall contain the facts and the law on which it is based. It shall be final and executory
after ten (10) calendar days from receipt of the copy of the award or decision by the
parties.
Despite Rule 43 providing for a 15-day period to appeal, we rule that the Voluntary
Arbitrator’s decision must be appealed before the Court of Appeals within 10 calendar
days from receipt of the decision as provided in the Labor Code.
Facts
Petitioner NYK-Fil Ship Management, Inc., a local manning agent acting for and in behalf of its foreign principal
NYK Ship Management Pte. Ltd. Singapore, hired respondent Gener G. Dabu to work as oiler for nine months
on board the vessel M/V Hojin. Their contract of employment was covered by a Collective Bargaining Agreement
known as “IBF JSU/AMOSUP-IMMAJ CBA which was effective from January 1, 2012 to December 31, 2014.
Respondent underwent a pre-employment medical examination (PEME) on March 25, 2013 where he disclosed
that he has diabetes mellitus. The doctor who conducted the PEME noted that respondent has diabetes mellitus
type 2, controlled with medications.
On April 6, 2013, respondent embarked the vessel and discharged his duty as oiler. On April 8, 2013, he had
palpitations, pains all over the body, numbness of hands and legs, lack of sleep and nervousness. On April 10, 2013,
he consulted a doctor in Sri Lanka who found him with elevated blood sugar level and was suffering from diabetes
mellitus, and declared him unfit for sea duty. He was repatriated to Manila on April 12, 2013.
On July 18, 2013, the company-designated physician declared that respondent’s diabetes mellitus is not work-
related. However, respondent’s treatment was continued for a maximum period of 130 days. Respondent continued
his follow-up consultations as he still complained of body pains and weakness and was prescribed medicines.
Respondent then consulted Dr. Efren R. Vicaldo of the Philippine Heart Center who found him suffering from
diabetes mellitus, insulin requiring, Impediment Grade VII (41.80%) and declared him permanently unfit to
resume work as a seaman in any capacity and his illness is considered work-aggravated/related. He also consulted
Dr. Czarina Sheherazade Mae A. Miguel, an Internal Medicine Specialist, whose finding was the same as with Dr.
Vicaldo’s.
Respondent sought payment of disability benefits, damages and attorney’s fees from petitioner, but was denied.
He requested for a grievance proceedings in accordance with the CBA, however, the parties did not reach any
settlement. He then filed a notice to arbitrate with the National Conciliation Mediation Board (NCMB), and the
parties were required to submit their position papers.
On November 28, 2014, the NCMB-Panel of Voluntary Arbitrators (PVA) rendered a Decision in favor of the
respondent.
Petitioner received a copy of the PVA decision on February 9, 2015 and filed with the CA a petition for review
under Rule 43 of the Rules of Court on February 24, 2015 alleging that the PVA committed serious errors in
rendering its decision and sought to enjoin the PVA from enforcing its decision.
On April 27, 2015, the NCMB-PVA issued a Writ of Execution directing the satisfaction of the judgment award of
the PVA, which petitioner had complied without prejudice to the outcome of their petition for review.
On September 15, 2015, the CA issued its Decision granted the petition and set aside the decision of NCMB-PVA.
Aggrieved, respondent filed a motion for reconsideration wherein he reiterated his argument raised in his
memorandum that the petition should be dismissed for being filed out of time.

4S, 4B, and 4G
On March 3, 2016, the CA issued its Amended Decision in favor of the private respondent, which set aside the
September 15, 2015 decision.
Petitioner moved for reconsideration, however, the CA denied the same in a Resolution dated June 9, 2016. Hence,
this petition for review.
Issue
Whether or not the Honorable Court of Appeals committed serious, reversible and gross error in law and in fact
in rendering an amended judgment and dismissing the Petitioner’s appeal on the ground that it was allegedly filed
out of time.
Ruling
No, Art. 262-A of the Labor Code provides:
Art. 262-A. Procedures. x x x
xxx xxx xxx
The award or decision of the Voluntary Arbitrator or Panel of Voluntary Arbitrators shall contain the
facts and the law on which it is based. It shall be final and executory after ten (10) calendar days from
receipt of the copy of the award or decision by the parties.
and Section 6, Rule VII of the NCMB Procedural Guidelines in the conduct of voluntary arbitration proceedings
provides:
Section 6. Finality of Award or Decisions. — Awards or decisions of voluntary arbitrator become final
and executory after ten (10) calendar days from receipt of copies of the award or decision by the parties.
Clearly, the decision of the voluntary arbitrator becomes final and executory after 10 days from receipt thereof.
The proper remedy to reverse or modify a voluntary arbitrators’ or panel of voluntary arbitrators’ decision is to
appeal the award or decision via a petition under Rule 43 of the 1997 Rules of Civil Procedure. And under Section
4 of Rule 43, the period to appeal to the CA is 15 days from receipt of the decision. Notwithstanding, since Article
262-A of the Labor Code expressly provides that the award or decision of the voluntary arbitrator shall be final and
executory after ten (10) calendar days from receipt of the decision by the parties, the appeal of the VA decision to
the CA must be filed within 10 days. In Philippine Electric Corporation (PHILEC) v. Court of Appeals, We held:
Despite Rule 43 providing for a 15-day period to appeal, we rule that the Voluntary Arbitrator’s decision must
be appealed before the Court of Appeals within 10 calendar days from receipt of the decision as provided in the
Labor Code.
We ruled that Article 262-A of the Labor Code allows the appeal of decisions rendered by Voluntary Arbitrators.
Statute provides that the Voluntary Arbitrator’s decision “shall be final and executory after ten (10) calendar days
from receipt of the copy of the award or decision by the parties.” Being provided in the statute, this 10-day period
must be complied with; otherwise, no appellate court will have jurisdiction over the appeal. This absurd situation
occurs when the decision is appealed on the 11th to 15th day from receipt as allowed under the Rules, but which
decision, under the law, has already become final and executory.
Furthermore, under Article VIII, Section 5(5) of the Constitution, this court “shall not diminish, increase, or
modify substantive rights” in promulgating rules of procedure in courts. The 10-day period to appeal under the
Labor Code being a substantive right, this period cannot be diminished, increased, or modified through the ROC.
The rule, therefore, is that a Voluntary Arbitrator’s award or decision shall be appealed before the Court of Appeals
within 10 days from receipt of the award or decision. As the PVA decision is already final and executory when
petitioner filed the petition with the CA, the CA correctly dismissed the petition since it has no more appellate
jurisdiction to review the decision.

4S, 4B, and 4G
Guagua National Colleges v. Court of Appeals

G.R. No. 188492; August 28, 2018
Bersamin, J.
The 10-day period stated in Article 276 should be understood as the period within which
the party adversely affected by the ruling of the Voluntary Arbitrators or Panel of
Arbitrators may file a motion for reconsideration. Only after the resolution of the
motion for reconsideration may the aggrieved party appeal to the CA by filing the petition
for review under Rule 43 of the Rules of Court within 15 days from notice pursuant to
Section 4 of Rule 43.
Facts
Under Section 5 (2) 3 of Republic Act No. 6728 (Government Assistance to Students and Teachers in Private
Education Act), 70% of the increase in tuition fees shall go to the payment of salaries, wages, allowances and other
benefits of the teaching and non-teaching personnel. Pursuant to this provision, the petitioner imposed a 7%
increase of its tuition fees for school year 2006-2007.
Shortly thereafter, and in order to save the depleting funds of the petitioner’s Retirement Plan, its Board of
Trustees approved the funding of the retirement program out of the 70% net incremental proceeds arising from
the tuition fee increases. Respondents GNC-Faculty Labor Union and GNC Non-Teaching Maintenance Labor
Union challenged the petitioner’s unilateral decision by claiming that the increase violated Section 5 (2) of R.A.
No. 6728.
The parties referred the matter to voluntary arbitration after failing to settle the controversy by themselves.
After hearing the parties, Voluntary Arbitrator Froilan M. Bacungan rendered his decision dated June 16, 2008 in
favor of GNC, holding that retirement benefits fell within the category of “other benefits” that could be charged
against the 70% net incremental proceeds pursuant to Section 5 (2) of R.A. No. 6728.
After receiving a copy of the decision on June 16, 2008, the respondents filed an Urgent Motion for Extension
praying that the CA grant them an extension of 15 days from July 1, 2008, or until July 16, 2008, within which to
file their petition for review.
On July 2, 2008, the CA issued a resolution granting the Urgent Motion for Extension. The respondents filed the
petition for review on July 16, 2008.
Subsequently, the petitioner filed its Motion to Dismiss, asserting that the decision of the Voluntary Arbitrator had
already become final and executory pursuant to Article 276 of the Labor Code and in accordance with the ruling
in Coca-Cola Bottlers Philippines, Inc. Sales Force Union-PTGWO-Balais v. Coca-Cola Bottlers Philippines, Inc.
The CA acted on the Motion to Dismiss on December 15, 2008 through the now assailed resolution denying the
Motion to Dismiss. The petitioner sought reconsideration, but the CA denied the motion for reconsideration on
January 30, 2009. Hence, the petitioner instituted its petition for certiorari.
Issue
Whether or not the CA committed grave abuse of discretion, denying the motion to dismiss which asserted that
the decision of the Voluntary Arbitrator had already become final and executory. (After the lapse of 10 days)
Ruling
No, in the 2004 ruling in Sevilla Trading Company v. Semana, the Court ruled that the decision of the Voluntary
Arbitrator became final and executory after the expiration of the 15-day reglementary period within which to file
the petition for review under Rule 43. Manila Midtown Hotel v. Borromeo also ruled so. The 15-day period was
likewise adverted to in the ruling in Nippon Paint Employees Union-Olalia v. Court of Appeals, promulgated in
November 2004.
But in Philippine Electric Corporation (PHILEC) v. Court of Appeals (2014), Baronda v. Court of Appeals

4S, 4B, and 4G
(2015), and NYK-FIL Ship Management, Inc. v. Dabu (2017), the Court, citing Article 276 of the Labor Code,
applied the 10-day period. Notably, the Court opined in Philippine Electric Corporation (PHILEC) v. Court of
Appeals that despite the period provided in Rule 43, the 10-day period should apply in determining the timeliness
of appealing the decision or award of the Voluntary Arbitrator or Panel of Arbitrators.
Given the variable rulings of the Court, what should now be the period to be followed in appealing the decisions
or awards of the Voluntary Arbitrators or Panel of Arbitrators?
In the 2010 ruling in Teng v. Pahagac, the Court clarified that the 10-day period set in Article 276 of the Labor
Code gave the aggrieved parties the opportunity to file their motion for reconsideration, which was more in keeping
with the principle of exhaustion of administrative remedies, holding thusly:
In the exercise of its power to promulgate implementing rules and regulations, an implementing agency, such as
the Department of Labor, is restricted from going beyond the terms of the law it seeks to implement; it should
neither modify nor improve the law. The agency formulating the rules and guidelines cannot exceed the statutory
authority granted to it by the legislature.
By allowing a 10-day period, the obvious intent of Congress in amending Article 263 to Article 262-A is to
provide an opportunity for the party adversely affected by the VA’s decision to seek recourse via a motion for
reconsideration or a petition for review under Rule 43 of the Rules of Court filed with the CA. Indeed, a motion
for reconsideration is the more appropriate remedy in line with the doctrine of exhaustion of administrative
remedies. For this reason, an appeal from administrative agencies to the CA via Rule 43 of the Rules of Court
requires exhaustion of available remedies as a condition precedent to a petition under that Rule.
The requirement that administrative remedies be exhausted is based on the doctrine that in providing for a remedy
before an administrative agency, every opportunity must be given to the agency to resolve the matter and to exhaust
all opportunities for a resolution under the given remedy before bringing an action in, or resorting to, the courts
of justice. Where Congress has not clearly required exhaustion, sound judicial discretion governs, guided by
congressional intent.
By disallowing reconsideration of the VA’s decision, Section 7, Rule XIX of DO 40-03 and Section 7 of the 2005
Procedural Guidelines went directly against the legislative intent behind Article 262-A of the Labor Code. These
rules deny the VA the chance to correct himself and compel the courts of justice to prematurely intervene with
the action of an administrative agency entrusted with the adjudication of controversies coming under its special
knowledge, training and specific field of expertise. In this era of clogged court dockets, the need for specialized
administrative agencies with the special knowledge, experience and capability to hear and determine promptly
disputes on technical matters or intricate questions of facts, subject to judicial review, is indispensable. In Industrial
Enterprises, Inc. v. Court of Appeals, we ruled that relief must first be obtained in an administrative proceeding
before a remedy will be supplied by the courts even though the matter is within the proper jurisdiction of a court.
Hence, the 10-day period stated in Article 276 should be understood as the period within which the party adversely
affected by the ruling of the Voluntary Arbitrators or Panel of Arbitrators may file a motion for reconsideration.
Only after the resolution of the motion for reconsideration may the aggrieved party appeal to the CA by filing the
petition for review under Rule 43 of the Rules of Court within 15 days from notice pursuant to Section 4 of Rule
43.

4S, 4B, and 4G
Negros Metal v. Lamayo

G.R. No. 186557; August 25, 2010
Carpio Morales, J.
Under Art. 217, it is clear that a labor arbiter has original and exclusive jurisdiction over
termination disputes. On the other hand, under Article 261, a voluntary arbitrator has
original and exclusive jurisdiction over grievances arising from the interpretation or
enforcement of company policies.
Facts
Respondent Armelo J. Lamayo began working for petitioner Negros Metal Corporation as a machinist. Sometime
in May 2002, while respondent was at the company’s foundry grinding some tools he was using, William Uy, Sr.
(Uy), company manager, called his attention why he was using the grinder there to which he replied that since the
machine there was bigger, he would finish his work faster. Respondent’s explanation was found unsatisfactory,
hence, he was, via memorandum, charged of loitering and warned. Taking the warning as a three-day suspension
as penalized under company rules, respondent reported for work after three days, only to be meted with another
10-day suspension for allegedly failing to sign the memorandum suspending him earlier. After serving the second
suspension, respondent reported for work, but was informed by Uy that his services had been terminated and that
he should draft his resignation letter.
This prompted respondent to file a complaint for illegal dismissal. the Labor Arbiter, brushing aside petitioner’s
position, held that respondent was illegally dismissed. On petitioner’s appeal, the National Labor Relations
Commission (NLRC), set aside the ruling of, and remanded the case to, the Labor Arbiter for disposition based
on the company’s grievance procedure.
Issue
Whether or not the labor tribunal had original and exclusive jurisdiction over respondent’s complaint for illegal
dismissal.
Ruling
No. Under Art. 217, it is clear that a labor arbiter has original and exclusive jurisdiction over termination disputes.
On the other hand, under Article 261, a voluntary arbitrator has original and exclusive jurisdiction over grievances
arising from the interpretation or enforcement of company policies. As a general rule then, termination disputes
should be brought before a labor arbiter, except when the parties, under Art. 262, unmistakably express that they
agree to submit the same to voluntary arbitration.
In the present case, the CBA provision on grievance machinery being invoked by petitioner does not expressly
state that termination disputes are included in the ambit of what may be brought before the company’s grievance
machinery. Even assuming, however, that the suspension of an employee may be considered as a “disagreement”
which bears on the “application and interpretation of any of the provisions” of the CBA, respondent could not
have bound himself to bring the matter of his suspension to grievance procedure or voluntary arbitration in light of
the documented fact that he had resigned from the union more than a year before his suspension, not to mention
the fact that he denied having a hand in the preparation of the union president Ronquillo’s letter invoking the
grievance procedure. In fine, the labor tribunal had original and exclusive jurisdiction over respondent’s complaint
for illegal dismissal.

4S, 4B, and 4G
Octavio v. PLDT
G.R. No. 175492; February 27, 2013
Del Castro, J.
It is settled that “when parties have validly agreed on a procedure for resolving
grievances and to submit a dispute to voluntary arbitration then that procedure should
be strictly observed.” Moreover, we have held time and again that “before a party is
allowed to seek the intervention of the court, it is a precondition that he should have
availed of all the means of administrative processes afforded him.
Facts
On May 28, 1999, PLDT and Gabay ng Unyon sa Telekomunikasyon ng mga Superbisor (GUTS) entered into a
CBA covering the period January 1, 1999 to December 31, 2001 (CBA of 1999-2001). Article VI, Section I thereof
provides:
Section 1. The COMPANY agrees to grant the following across-the-board salary increase during the
three years covered by this Agreement to all employees covered by the bargaining unit as of the given
dates:
1. Effective January 1, 1999 — 10% of basic wage or P2,000.00 whichever is higher;
2. Effective January 1, 2000 — 11% of basic wage or P2,250.00 whichever is higher;
3. Effective January 1, 2001 — 12% of basic wage or P2,500.00 whichever is higher.
On October 1, 2000, PLDT hired Octavio as Sales System Analyst I on a probationary status. He became a
member of GUTS. When Octavio was regularized on January 1, 2001, he was receiving a monthly basic salary of
P10,000.00. On February 1, 2002, he was promoted to the position of Sales System Analyst 2 and his salary was
increased to P13,730.00.
On May 31, 2002, PLDT and GUTS entered into another CBA covering the period January 1, 2002 to December
31, 2004 (CBA of 2002-2004) which provided for the following salary increases: 8% of basic wage or P2,000.00
whichever is higher for the first year (2002); 10% of basic wage or P2,700.00 whichever is higher for the second year
(2003); and, 10% of basic wage or P2,400.00 whichever is higher for the third year (2004).
Claiming that he was not given the salary increases of P2,500.00 effective January 1, 2001 and P2,000.00 effective
January 1, 2002, Octavio wrote the President of GUTS, Adolfo Fajardo (Fajardo). Acting thereon and on similar
grievances from other GUTS members, Fajardo wrote the PLDT Human Resource Head to inform management
of the GUTS members’ claim for entitlement to the across-the-board salary increases.
Accordingly, the Grievance Committee convened on October 7, 2002 consisting of representatives from PLDT
and GUTS. The Grievance Committee, however, failed to reach an agreement. In effect, it denied Octavio’s
demand for salary increases.
Aggrieved, Octavio filed before the Arbitration Branch of the NLRC a Complaint for payment of said salary
increases. Octavio claimed entitlement to salary increases per the CBAs of 1999-2001 and 2002-2004. In a Decision
dated August 30, 2004, the Labor Arbiter dismissed the Complaint of Octavio and upheld the Committee
Resolution.
Upon Octavio’s appeal, the NLRC, in its September 30, 2005 Resolution, affirmed the Labor Arbiter’s Decision.
It upheld the Labor Arbiter’s finding that Octavio’s salary had already been adjusted in accordance with the
provisions of the CBA. The NLRC further ruled that it has no jurisdiction to decide the issues presented by
Octavio, as the same involved the interpretation and implementation of the CBA. According to it, Octavio
should have brought his claim before the proper body as provided in the 2002-2004 CBA’s provision on grievance
machinery and procedure.
Issue
Whether or not Octavio have brought his claim before the proper body as provided for the CBA’s provision on
grievance machinery and procedure.

4S, 4B, and 4G
Ruling
No, Under Article 260 of the Labor Code, grievances arising from the interpretation or implementation of the
parties’ CBA should be resolved in accordance with the grievance procedure embodied therein. It also provides
that all unsettled grievances shall be automatically referred for voluntary arbitration as prescribed in the CBA.
In its Memorandum, PLDT set forth the grievance machinery and procedure provided under Article X, Section 3
of the CBA of 2002-2004, viz.:
Step 1. Any employee (or group of employees) who believes that he has a justifiable grievance shall present the
matter initially to his division head, or if the division is involved in the grievance, to the company official next
higher to the division head (the local manager in the provincial exchanges) not later that fifteen (15) days after the
occurrence of the incident giving rise to the grievance. The initial presentation shall be made to the division head
either by the aggrieved party himself or by the Union Steward or by any Executive Officer of the Union who is not
a member of the grievance panel. The initial presentation may be made orally or in writing.
Step 2. Any party who is not satisfied with the resolution of the grievance at Step 1 may appeal in writing to the
Union-Management Grievance Committee within seven (7) days from the date of receipt of the department head’s
decision.
Step 3. If the grievance is not settled either because of deadlock or the failure of the committee to decide the matter,
the grievance shall be transferred to a Board of Arbitrators for the final decision. The Board shall be composed of
three (3) arbitrators, one to be nominated by the Union, another to be nominated by the Management, and the
third to be selected by the management and union nominees. The decision of the board shall be final and binding
both the company and the Union in accordance with law. Expenses of arbitration shall be divided equally between
the Company and the Union.
Indisputably, the present controversy involves the determination of an employee’s salary increases as provided in the
CBAs. When Octavio’s claim for salary increases was referred to the Union-Management Grievance Committee,
the clear intention of the parties was to resolve their differences on the proper interpretation and implementation of
the pertinent provisions of the CBAs. And in accordance with the procedure prescribed therein, the said committee
made up of representatives of both the union and the management convened. Unfortunately, it failed to reach an
agreement. Octavio’s recourse pursuant to the CBA was to elevate his grievance to the Board of Arbitrators for
final decision. Instead, nine months later, Octavio filed a Complaint before the NLRC.
It is settled that “when parties have validly agreed on a procedure for resolving grievances and to submit a dispute
to voluntary arbitration then that procedure should be strictly observed.” Moreover, we have held time and again
that “before a party is allowed to seek the intervention of the court, it is a precondition that he should have availed
of all the means of administrative processes afforded him. Hence, if a remedy within the administrative machinery
can still be resorted to by giving the administrative officer concerned every opportunity to decide on a matter that
comes within his jurisdiction then such remedy should be exhausted first before the court’s judicial power can
be sought. The premature invocation of the court’s judicial intervention is fatal to one’s cause of action.” “The
underlying principle of the rule on exhaustion of administrative remedies rests on the presumption that when the
administrative body, or grievance machinery, is afforded a chance to pass upon the matter, it will decide the same
correctly.”
By failing to question the Committee Resolution through the proper procedure prescribed in the CBA, that is, by
raising the same before a Board of Arbitrators, Octavio is deemed to have waived his right to question the same.
Clearly, he departed from the grievance procedure mandated in the CBA and denied the Board of Arbitrators the
opportunity to pass upon a matter over which it has jurisdiction. Hence, and as correctly held by the CA, Octavio’s
failure to assail the validity and enforceability of the Committee Resolution makes the same binding upon him.
On this score alone, Octavio’s recourse to the labor tribunals below, as well as to the CA, and, finally, to this Court,
must therefore fail.

4S, 4B, and 4G
Article 306 (formerly Article 291)

PLDT v. Pingol
G.R. No. 182622; September 8, 2010
Mendoza, J.
The prescription of an action is interrupted by the filing of an action, a written

extrajudicial demand by the creditor, and a written acknowledgment of the debt by the
debtor.
Facts
Roberto Pingol was hired by petitioner PLDT as a maintenance technician.
While still under the employ of PLDT, Pingol was admitted at The Medical City, Mandaluyong City, for “paranoid
personality disorder” due to financial and marital problems. He was eventually discharged from the hospital and
continued to report for work but frequently absented himself due to his poor mental condition.
For almost 3 months, Pingol was absent from work without official leave. According to PLDT, notices were sent
to him with a stern warning that he would be dismissed from employment if he continued to be absent without
official leave. Despite the warning, he failed to show up for work. On January 1, 2000, PLDT terminated his
services on the grounds of unauthorized absences and abandonment of office.
On March 29, 2004, 4 years later, Pingol filed a Complaint for Constructive Dismissal and Monetary Claims
against PLDT. In his complaint, he alleged that he was hastily dismissed from his employment. In response, PLDT
filed a motion to dismiss claiming, among others, that respondent’s cause of action had already prescribed as the
complaint was filed 4 years and 3 months after his dismissal.
Pingol, however, countered that in computing the prescriptive period, the years 2001 to 2003 must not be taken
into account. He explained that from 2001 to 2003, he was inquiring from PLDT about the financial benefits due
him as an employee who was no longer allowed to do his work, but he merely got empty promises. It could not,
therefore, result in abandonment of his claim.
The LA issued an order granting petitioner’s Motion to Dismiss on the ground of prescription.
Article 291 (now Art. 306) of the Labor Code provides:

‘All money claims arising from employer-employee relations accruing from the effectivity of this Code shall be filed
within 3 years from the time the cause of action accrued, otherwise they shall be forever barred.’
Pingol appealed to the NLRC arguing that the 4-year prescriptive period has not yet lapsed because PLDT failed
to categorically deny his claims. The NLRC reversed the LA’s resolution and favored Pingol.
Issue
Whether respondent Pingol filed his complaint for constructive dismissal and money claims within the prescriptive
period of 4 years as provided in Article 1146 of the Civil Code and 3 years as provided in Article 291 (now Art.
306) of the Labor Code, respectively.
Ruling
No, Pingol did not file his claim within the prescriptive period.
Pingol himself alleged the date January 1, 2000 as the date of his dismissal in his complaint filed on March 29,
2004, exactly 4 years and 3 months later. Respondent never denied making such admission or raised palpable
mistake as the reason therefor. Thus, the petitioner correctly relied on such allegation in the complaint to move for
the dismissal of the case on the ground of prescription.
The Labor Code has no specific provision on when a claim for illegal dismissal or a monetary claim accrues. Thus,
the general law on prescription applies. Article 1150 of the Civil Code states:
Article 1150. The time for prescription for all kinds of actions, when there is no special provision which ordains
otherwise, shall be counted from the day they may be brought.

4S, 4B, and 4G
The day the action may be brought is the day a claim starts as a legal possibility. In the present case, January 1,
2000 was the date that respondent Pingol was not allowed to perform his usual and regular job as a maintenance
technician. Respondent Pingol cited the same date of dismissal in his complaint before the LA. As, thus, correctly
ruled by the LA, the complaint filed had already prescribed.
Respondent claims that between 2001 and 2003, he made follow-ups with PLDT management regarding his
benefits. This, to his mind, tolled the running of the prescriptive period.
The rule in this regard is covered by Article 1155 of the Civil Code. Like other causes of action, the prescriptive
period for money claims is subject to interruption, and in the absence of an equivalent Labor Code provision for
determining whether the said period may be interrupted, Article 1155 of the Civil Code may be applied, to wit:
ART. 1155. The prescription of actions is interrupted when they are filed before the Court, when there is a written
extrajudicial demand by the creditors, and when there is any written acknowledgment of the debt by the debtor.
Thus, the prescription of an action is interrupted by (a) the filing of an action, (b) a written extrajudicial demand
by the creditor, and (c) a written acknowledgment of the debt by the debtor.
In this case, respondent Pingol never made any written extrajudicial demand. Neither did petitioner make any
written acknowledgment of its alleged obligation. Thus, the claimed “follow-ups” could not have validly tolled the
running of the prescriptive period. It is worthy to note that respondent never presented any proof to substantiate
his allegation of follow-ups.
Thus, Pingol’s claim has already prescribed.

4S, 4B, and 4G
Serrano v. CA
G.R. No. 139420 ; August 15, 2001
Puno, J.
A cause of action accrues upon an act or omission on the part of such defendant violative
of the right of the plaintiff or constituting a breach of the obligation of the defendant
to the plaintiff.
Facts
Maersk-Filipinas Crewing, Inc., the local agent of respondent foreign corporation A.P. Moller, deployed petitioner
Serrano as a seaman to Liberian, British and Danish ships. As petitioner was on board a ship most of the time,
respondent Maersk offered to send portions of petitioner’s salary to his family in the Philippines. The amounts
would be sent by money order. Petitioner agreed and the amount was deducted from Serrano’s salary. Respondent
Maersk, it is also alleged, deducted various amounts from his salary for Danish Social Security System, welfare
contributions, ship club, and SSS Medicare.
It appears that petitioner’s family failed to receive the money orders petitioner sent through respondent Maersk.
Upon learning this in 1978, petitioner demanded that respondent Maersk pay him the amounts the latter deducted
from his salary. Respondent Maersk assured him that they would look into the matter, then assigned him again to
board one of their vessels.
Whenever he returned to the Philippines, petitioner would go to the office of respondent Maersk to follow up his
money claims but he would be told to return after several weeks as respondent Maersk needed time to verify its
records and to bring up the matter with its principal employer, respondent A.P. Moller. Meantime, respondent
Maersk would hire him again to board another one of their vessels for about a year.
Finally, in October 1993, petitioner wrote to respondent Maersk demanding immediate payment to him of
the total amount of the money orders deducted from his salary from 1977 to 1978. On November 11, 1993,
respondent A.P. Moller replied to petitioner that they keep accounting documents only for a certain number of
years, thus data on his money claims from 1977 to 1978 were no longer available. Likewise, it was claimed that it
had no outstanding money orders. A.P. Moller declined petitioner’s demand for payment.
In April 1994, petitioner filed a complaint for collection of the total amount of the unsent money orders and illegal
salary deductions against the respondent Maersk in the POEA. The LA ruled in favor of Serrano in that while the
respondents claim payment of that claim, it failed to present competent evidence of payment such that this Office
is constrained to approve this claim as warranted.
The NLRC reversed and set aside the LA’s decision and dismissed the case on the ground of prescription.
Issue
Whether Serrano’s claim for the unsent money orders has already prescribed.
Ruling
No, petitioner Serrano’s claim has not yet prescribed.
His cause of action accrued only in 1993 when respondent A.P. Moller wrote to him that its accounting records
showed it had no outstanding money orders and that his case was considered outdated. Thus, the 3-year prescriptive
period should be counted from 1993 and not 1978 and since his complaint was filed in 1994.
A cause of action has three elements, to wit, (1) a right in favor of the plaintiff by whatever means and under
whatever law it arises or is created; (2) an obligation on the part of the named defendant to respect or not to
violate such right; and (3) an act or omission on the part of such defendant violative of the right of the plaintiff
or constituting a breach of the obligation of the defendant to the plaintiff. The first two elements are deemed
established. The cause of action accrued when respondent denied Serrano’s demand for reinstatement and so
committed that act or omission “constituting a breach of the obligation of the defendant to the plaintiff.”

4S, 4B, and 4G
Petitioner repeatedly demanded payment from respondent Maersk but respondent Maersk warded off these
demands by saying that it would look into the matter until years passed by. In October 1993, Serrano finally
demanded in writing payment of the unsent money orders. Then and only then was the claim categorically denied
by respondent A.P. Moller in its letter dated November 22, 1993. Following jurisprudence, petitioner’s cause of
action accrued only upon respondent A.P. Moller’s definite denial of his claim in November 1993. Having filed his
action 5 months thereafter or in April 1994, we hold that it was filed within the 3-year prescriptive period provided
in Article 291 (now Art. 306) of the Labor Code.
Thus, Serrano filed his claim within the prescriptive period and the decision of the LA ordering respondent Maersk
and/or A.P. Moller to pay petitioner his untransmitted money order payments is reinstated.

4S, 4B, and 4G
Intercontinental Broadcasting Corporation v. Panganiban

G.R. No. 151407; February 6, 2007
Austria-Martinez, J.
Although the commencement of a civil action stops the running of the statute of
prescription or limitations, its dismissal or voluntary abandonment by plaintiff leaves the
parties in exactly the same position as though no action had been commenced at all.
Facts
Ireneo Panganiban was employed as Assistant General Manager of the Intercontinental Broadcasting Corporation
from May 1986 until his preventive suspension on August 26, 1988. Respondent resigned from his employment
on September 2, 1988. On April 12, 1989, respondent filed with the RTC alleging, among others, non-payment
of his unpaid commissions.
A motion to dismiss was filed by Joselito Santiago, one of the defendants, on the ground of lack of jurisdiction, as
respondent’s claim was a labor money claim, but this was denied by the RTC.
Thus, Santiago filed a petition for certiorari with the CA, which was granted. Thereafter, respondent was elected
by the Board of Administrators of IBC as Vice-President for Marketing in July 1992. He resigned in April 1993.
On July 24, 1996, respondent filed against petitioner a complaint for illegal dismissal, separation pay, retirement
benefits, unpaid commissions, and damages.
The LA ordered respondent’s reinstatement with full backwages, and the payment of his unpaid commission,
damages and attorney’s fees. IBC appealed to the NLRC but due to petitioner’s failure to post a bond, the appeal
was dismissed. Petitioner filed a motion for reconsideration of the NLRC’s dismissal, which was denied.
Petitioner then filed a petition with this Court but the same was referred to the CA. The complaint in connection
with his appointment as VP for Marketing is within the jurisdiction of the SEC and is dismissed for lack of
jurisdiction. The CA ruled that respondent’s money claim had not yet prescribed, as it was interrupted in two
instances: first, by the filing of Civil Case by respondent with the RTC; and second, by the express acknowledgment
of the debt by petitioners.
Issue
Whether respondent’s claim for unpaid commissions have already prescribed.
Ruling
Yes, Panganiban’s claim for unpaid commissions have prescribed.
The applicable law in this case is Article 291 of the Labor Code which provides that «all money claims arising from
employer-employee relations accruing during the effectivity of this Code shall be filed within three (3) years from
the time the cause of action accrued; otherwise they shall be forever barred.»
The term “money claims” covers all money claims arising from an employer-employee relation.
Like other causes of action, the prescriptive period for money claims is subject to interruption, and in the absence
of an equivalent Labor Code provision for determining whether the said period may be interrupted, Article 1155
of the Civil Code may be applied, to wit:
ART. 1155. The prescription of actions is interrupted when they are filed before the Court, when there is a written
extrajudicial demand by the creditors, and when there is any written acknowledgment of the debt by the debtor.
Thus, the prescription of an action is interrupted by (a) the filing of an action, (b) a written extrajudicial demand
by the creditor, and (c) a written acknowledgment of the debt by the debtor. On this point, the Court ruled
that although the commencement of a civil action stops the running of the statute of prescription or limitations,
its dismissal or voluntary abandonment by plaintiff leaves the parties in exactly the same position as though no
action had been commenced at all.

4S, 4B, and 4G
Hence, while the filing of the civil case could have interrupted the running of the 3-year prescriptive period, its
consequent dismissal by the CA due to lack of jurisdiction effectively canceled the tolling of the prescriptive period
within which to file his money claim, leaving respondent in exactly the same position as though no civil case had
been filed at all. The running of the 3-year prescriptive period not having been interrupted, Panganiban’s cause
of action had already prescribed on September 2, 1991, 3 years after his cessation of employment on September
2, 1988. Consequently, when respondent Panganiban filed his complaint for illegal dismissal, separation pay,
retirement benefits, and damages in July 24, 1996, his claim, clearly, had already been barred by prescription.

4S, 4B, and 4G
Accessories Specialist Inc. v. Alabanza

G.R. NO. 168985; July 23, 2008
Nachura, J.
The principle of promissory estoppel is a recognized exception to the 3-year prescriptive

period under the Labor Code. It may arise from the making of a promise, even though
without consideration, if it was intended that the promise should be relied upon, as
in fact it was relied upon, and if a refusal to enforce it would virtually sanction the
perpetration of fraud or would result in other injustice.
Facts
Erlinda Alabanza, for and in behalf of her husband Jones Alabanza filed a complaint against petitioners ASI also
known as ARTS 21 Corporation, and Tadahiko Hashimoto for non-payment of salaries, separation pay, and 13th
month pay.
Erlinda alleged, among others, that her husband Jones was the Vice-President, Manager and Director of ASI. Jones
rendered outstanding services for the petitioners from 1975 to October 1997. On October 17, 1997, Jones was
compelled by the owner of ASI to file his involuntary resignation on the ground that ASI allegedly suffered losses
due to lack of market and incurred several debts. At the time of his resignation, Jones had unpaid salaries for 18
months. He was likewise not paid his separation pay commensurate to his 21 years of service. Jones demanded
payment of his money claims upon resignation but ASI informed him that it would just settle first the money
claims of the rank-and-file employees, and his claims will be paid thereafter. Knowing the predicament of the
company, Jones patiently waited for his turn to be paid. Several demands were made by Jones but ASI just kept on
assuring him that he will be paid his monetary claims. Jones died on August 5, 2002 and failed to receive the same.
On the other hand, the petitioners contend that Jones voluntarily resigned on October 31, 1997. Thus, Erlinda’s
cause of action has already prescribed since the complaint was filed only on September 27, 2002, or almost 5 years
from the date of the alleged illegal dismissal of her husband Jones.
The LA rendered a decision ordering the petitioners to pay Erlinda her husband’s unpaid salaries, 13th month
pay, and separation pay, and 5% on the said total award as attorney’s fees. The NLRC issued an order denying
the petitioner’s motion to reduce bond and dismissed the appeal of the petitioners. Erlinda filed a motion for
execution.
Petitioners filed a petition for certiorari under R65 before the CA and prayed for the issuance of a TRO and a writ
of preliminary injunction. The CA issued a TRO directing the respondents, their agents, assigns, and all persons
acting on their behalf to refrain and/or cease and desist from executing the Decision of the LA.
The CA issued the assailed Decision dismissing the petition. Petitioner filed a motion for reconsideration. On July
12, 2005, the CA issued the assailed Resolution denying the motion for reconsideration for lack of merit.
Issue
Whether the cause of action of Alabanza has already prescribed.
Ruling
No, Alabanza’s cause of action has not yet prescribed.
Petitioners contend that the 3-year prescriptive period under Article 291 of the Labor Code had already set-in,
thereby barring all of respondent’s money claims arising from their employer-employee relations. Based on the
findings of facts of the LA, however, it was ASI which was responsible for the delay in the institution of the
complaint. When Jones filed his resignation, he immediately asked for the payment of his money claims. However,
the management of ASI promised him that he would be paid immediately after the claims of the rank-and-file
employees had been paid. Jones relied on this representation. Unfortunately, the promise was never fulfilled even
until the time of Jones’ death.

4S, 4B, and 4G
In light of these circumstances, we can apply the principle of promissory estoppel, which is a recognized exception
to the 3-year prescriptive period enunciated in Article 291 of the Labor Code.
Promissory estoppel may arise from the making of a promise, even though without consideration, if it was
intended that the promise should be relied upon, as in fact it was relied upon, and if a refusal to enforce it would
virtually sanction the perpetration of fraud or would result in other injustice. Promissory estoppel presupposes
the existence of a promise on the part of one against whom estoppel is claimed. The promise must be plain and
unambiguous and sufficiently specific so that the court can understand the obligation assumed and enforce the
promise according to its terms.
In order to make out a claim of promissory estoppel, a party bears the burden of establishing the following elements:
(1) a promise was reasonably expected to induce action or forbearance; (2) such promise did, in fact, induce such
action or forbearance; and (3) the party suffered detriment as a result.
All the requisites of promissory estoppel are present in this case. Jones relied on the promise of ASI that he would
be paid as soon as the claims of all the rank-and-file employees had been paid. If not for this promise that he had
held on to until the time of his death, we see no reason why he would delay filing the complaint before the LA.
Thus, we find ample justification not to follow the prescriptive period imposed under Article 291 of the Labor
Code.

4S, 4B, and 4G
Auto Bus Transport Systems, Inc. v. Bautista

G.R. No. 156367; May 26, 2005
Chico-Nazario, J.
The 3-year prescriptive period commences, not at the end of the year when the employee
becomes entitled to the commutation of his service incentive leave, but from the time
when the employer refuses to pay its monetary equivalent after demand of commutation or
upon termination of the employee’s services, as the case may be.
Facts
Antonio Bautista has been employed by petitioner Autobus as driver-conductor. He was paid on commission
basis, 7% of the total gross income per travel, on a twice a month basis.
While respondent was driving the bus along Nueva Vizcaya, the bus he was driving accidentally bumped the rear
portion of another bus, as the latter vehicle suddenly stopped at a sharp curve without giving any warning.
Respondent averred that the accident happened because he was compelled by the management to go back to Roxas,
Isabela, although he had not slept for 24 hours, as he had just arrived in Manila from Roxas, Isabela. Respondent
further alleged that he was not allowed to work until he fully paid the amount of P75,551.50, representing thirty
percent 30% of the cost of repair of the damaged buses and that despite respondent’s pleas for reconsideration, the
same was ignored by management. After a month, management sent him a letter of termination.
On 02 February 2000, respondent instituted a Complaint for Illegal Dismissal with Money Claims for nonpayment
of 13th month pay and service incentive leave pay against Autobus.
Petitioner, on the other hand, maintained that respondent’s employment was replete with offenses involving
reckless imprudence, gross negligence, and dishonesty. To support its claim, petitioner presented copies of letters,
memos, irregularity reports, and warrants of arrest pertaining to several incidents wherein respondent was involved.
Furthermore, petitioner avers that in the exercise of its management prerogative, respondent’s employment was
terminated only after the latter was provided with an opportunity to explain his side regarding the accident on 03
January 2000.
The LA dismissed the complaint for illegal dismissal. However, Autobus was ordered to pay Bautista his 13th month
pay from the date of his hiring to the date of his dismissal, and his service incentive leave pay for all the years he
had been in service. All other claims of both complainant and respondent are hereby dismissed for lack of merit.
The award of service incentive leave pay was maintained by the NLRC. The CA affirmed this in toto.
Issue
Whether the 3-year prescriptive period provided under the Labor Code is applicable to respondent Bautista’s claim
of service incentive leave pay.
Ruling
Bautista’s claim has not yet prescribed.
It is settled jurisprudence that a cause of action has 3 elements, to wit, (1) a right in favor of the plaintiff by whatever
means and under whatever law it arises or is created; (2) an obligation on the part of the named defendant to respect
or not to violate such right; and (3) an act or omission on the part of such defendant violative of the right of the
plaintiff or constituting a breach of the obligation of the defendant to the plaintiff.
To properly construe Article 291 of the Labor Code, it is essential to ascertain the time when the third element of a
cause of action transpired. Stated differently, in the computation of the 3-year prescriptive period, a determination
must be made as to the period when the act constituting a violation of the workers’ right to the benefits being
claimed was committed. For if the cause of action accrued more than 3 years before the filing of the money claim,
said cause of action has already prescribed in accordance with Article 291 (now Art. 306).

4S, 4B, and 4G
Consequently, in cases of nonpayment of allowances and other monetary benefits, if it is established that the benefits
being claimed have been withheld from the employee for a period longer than 3 years, the amount pertaining to
the period beyond the 3-year prescriptive period is therefore barred by prescription. The amount that can only be
demanded by the aggrieved employee shall be limited to the amount of the benefits withheld within 3 years before
the filing of the complaint.
It is essential at this point, however, to recognize that the SIL is a curious animal in relation to other benefits
granted by the law to every employee. In the case of SIL, the employee may choose to either use his leave credits
or commute it to its monetary equivalent if not exhausted at the end of the year. Furthermore, if the employee
entitled to SIL does not use or commute the same, he is entitled upon his resignation or separation from work to
the commutation of his accrued SIL.
Applying Article 291 of the Labor Code in light of this peculiarity of the SIL, we can conclude that the 3-year
prescriptive period commences, not at the end of the year when the employee becomes entitled to the commutation
of his SIL, but from the time when the employer refuses to pay its monetary equivalent after demand of
commutation or upon termination of the employee’s services, as the case may be.
In the case at bar, Bautista had not made use of his SIL nor demanded for its commutation until his employment
was terminated by Autobus. Neither did Autobus compensate his accumulated SIL pay at the time of his dismissal.
It was only upon his filing of a complaint for illegal dismissal, 1 month from the time of his dismissal, that Bautista
demanded from his former employer commutation of his accumulated leave credits. His cause of action to claim
the payment of his accumulated SIL thus accrued from the time when his employer dismissed him and failed to
pay his accumulated leave credits.
Therefore, the prescriptive period with respect to his claim for service incentive leave pay only commenced from
the time the employer failed to compensate his accumulated service incentive leave pay at the time of his dismissal.
Since respondent had filed his money claim after only one month from the time of his dismissal, necessarily, his
money claim was filed within the prescriptive period provided for by the Labor Code.

4S, 4B, and 4G
Montero v. Times Transportation Co., Inc.

G.R. No. 190828; March 16, 2015
Reyes, J.
The prescriptive period continues even after the withdrawal of the case as though no
action has been filed at all.
Facts
Times Transportation Co., Inc., is a company engaged in the business of land transportation for passengers and
goods serving the Ilocos Region to Metro Manila route. TTCI employed the herein 21 petitioners as bus drivers,
conductors, mechanics, welders, security guards and utility personnel.
Sometime in 1995, the rank-and-file employees of TTCI formed a union named as Times Employees Union (TEU)
which was later certified as the sole and exclusive bargaining unit within TTCI.
In March 1997, members of TEU went on strike; but when former Labor Secretary Quisimbing assumed
jurisdiction over the labor dispute and certified the same for compulsory arbitration, a return-to-work Order dated
March 10, 1997 was issued which ended the strike and enjoined the parties from committing any other act that
may intensify the situation.
TTCI Board of Directors approved a resolution confirming the authority given to respondent TTCI President
and Chairman of the Board of Directors Santiago, to gradually dispose the assets of the TTCI as a result of its
unabated increase of the cost of operations and losses for the last 2 years. TTCI also adopted a company-wide
retrenchment program, which will take effect on October 1, 1997, where Santiago was given the authority to
determine the number of excess employees who would be the subject of retrenchment.
The sale of 25 buses of TTCI, as well as the Certificates of Public Convenience for the operation of the buses,
were likewise approved and subsequently transferred to respondent MENCORP by virtue of a Deed of Sale dated
December 12, 1997. Thereafter, several union members received notices that they were being retrenched effective
30 days from September 16, 1997.
For a second time, on October 17, 1997, TEU declared a strike against TTCI, but the latter merely reiterated the
earlier return-to-work order of the Labor Secretary. For disregarding the said return-to-work order, Santiago issued
two notices of termination dated October 26, 1997 terminating some workers for participating in the illegal strike.
On May 14, 1998, petitioners filed several complaints against TTCI and MENCORP before the NLRC. The
complaints were thereafter consolidated but this case was withdrawn on March 4, 1999 upon motion by the
TEU’s counsel which was given due course on March 22, 1999.
4 years later, several complaints for unfair labor practice, illegal dismissal with money claims, damages and attorney’s
fees were filed against the respondents before the LA from June to July 2002. Accordingly, these complaints were
consolidated.
The LA rendered a Decision dismissing the petitioners’ claim for ULP and money claims on the ground of
prescription. However, with regard to the issue of illegal dismissal, only the complaints of some petitioners were
dismissed for having been barred by prescription. The LA found that petitioners were illegally dismissed and were
awarded their separation pay and backwages. According to the LA, the complaints of these 10 petitioners were
timely filed in June 2002 because the 8-month period during which their cases were pending should be excluded
from the 4-year prescriptive period.
The NLRC observed that the LA had ignored the rule on prescription, and chose to be selective in awarding relief
to the 10 complainants by stating in his decision that the period during which the labor cases were pending should
be deducted from the period of prescription. The CA sustained the NLRC decision.
Issue
Whether or not the petitioners’ complaints for illegal dismissal have already prescribed.

4S, 4B, and 4G
Ruling
Yes, the petitioners’ complaints for illegal dismissal have already prescribed. The period during which their cases
were pending are not excluded from the period of prescription.
Settled is the rule that when one is arbitrarily and unjustly deprived of his job or means of livelihood, the action
instituted to contest the legality of one’s dismissal from employment constitutes, in essence, an action predicated
upon an injury to the rights of the plaintiff, as contemplated under Article 1146 of the New Civil Code, which
must be brought within 4 years.
The petitioners contend that the period when they filed a labor case on May 14, 1998 but withdrawn on March
22, 1999 should be excluded from the computation of the 4-year prescriptive period for illegal dismissal cases.
However, the Court had already ruled that the prescriptive period continues even after the withdrawal of the
case as though no action has been filed at all. The applicability of Article 1155 of the Civil Code in labor cases
was upheld in jurisprudence. Although the commencement of a civil action stops the running of the statute of
prescription or limitations, its dismissal or voluntary abandonment by plaintiff leaves the parties in exactly the same
position as though no action had been commenced at all.
In like manner, while the filing of the complaint for illegal dismissal before the LA interrupted the running of
the prescriptive period, its voluntary withdrawal left the petitioners in exactly the same position as though no
complaint had been filed at all. The withdrawal of their complaint effectively erased the tolling of the reglementary
period.
A prudent review of the antecedents of the claim reveals that it has in fact prescribed. Hence, while the filing of the
said case could have interrupted the running of the four-year prescriptive period, the voluntary withdrawal of the
petitioners effectively cancelled the tolling of the prescriptive period within which to file their illegal dismissal case,
leaving them in exactly the same position as though no labor case had been filed at all. The running of the 4-year
prescriptive period not having been interrupted by the filing, the petitioners’ cause of action had already prescribed
in 4 years after their cessation of employment on October 26, 1997 and November 24, 1997. Consequently, when
the petitioners filed their complaint for illegal dismissal, separation pay, retirement benefits, and damages in 2002,
their claim, clearly, had already been barred by prescription.

4S, 4B, and 4G
Callanta v. Carnation Philippines, Inc.

G.R. No. 70615; October 28, 1986
Fernan, J.
An action for illegal dismissal prescribes in 4 years, pursuant to Art. 1146

under the Civil Code.
Facts
Petitioner Virgilio Callanta was employed by private respondent Carnation Philippines, Inc. as a salesman in the
Agusan del Sur area. 5 years later or on June 1, 1979, respondent Carnation filed with the Regional Office of the
Ministry of Labor and Employment, an application for clearance to terminate the employment of Virgilio Callanta
on the alleged grounds of serious misconduct and misappropriation of company funds.
Upon approval on June 26, 1979 of said clearance application, petitioner Callanta’s employment with Carnation
was terminated effective June 1, 1979.
On July 5, 1982, Virgilio Callanta filed with the MOLE a complaint for illegal dismissal with claims for
reinstatement, backwages, and damages against respondent Carnation.
In its position paper dated October 5, 1982, respondent Carnation put in issue the timeliness of petitioner’s
complaint alleging that the same is barred by prescription for having been filed more than 3 years after the date of
Callanta’s dismissal.
The LA rendered a decision finding the termination of Callanta’s employment to be without valid cause.
Respondent Carnation was therefore ordered to reinstate Callanta to his former position with backwages of 1 year
without qualification including all fringe benefits provided for by law and company policy. It was likewise provided
that failure on the part of respondent to comply with the decision shall entitle complainant to full backwages and
all fringe benefits without loss of seniority rights.
The NLRC set aside the decision of the LA. It declared the complaint for illegal dismissal filed by Callanta to have
already prescribed.
Petitioner contends that since the Labor Code is silent as to the prescriptive period of an action for illegal dismissal
with claims for reinstatement, backwages and damages, the applicable law, by way of supplement, is Article 1146
of the New Civil Code which provides a 4-year prescriptive period for an action predicated upon “an injury to
the rights of the plaintiff” considering that an action for illegal dismissal is neither a “penal offense” nor a mere
“money claim,” as contemplated by the Labor Code. Petitioner further claims that an action for illegal dismissal is
a more serious violation of the rights of an employee as it deprives him of his means of livelihood; thus, it should
correspondingly have a prescriptive period longer than the 3 years provided for in “money claims.”
Issue
Whether an action for illegal dismissal prescribes in 3 years pursuant to the Labor Code.
Ruling
No, an action for illegal dismissal does not prescribe in 3 years as it is not an action for illegal dismissal that falls
under the category of “offenses” or “money claims. The same prescribes in 4 years pursuant to the Civil Code.
The dismissal without just cause of an employee from his employment constitutes a violation of the Labor Code and
its implementing rules and regulations. Such violation, however, does not amount to an “offense” as understood
under Article 291 of the Labor Code. In its broad sense, an offense is an illegal act which does not amount to a
crime as defined in the penal law, but which by statute carries with it a penalty similar to those imposed by law
for the punishment of a crime. It is in this sense that a general penalty clause is provided under Article 289 of the
Labor Code.
The confusion arises over the use of the term “illegal dismissal” which creates the impression that termination
of an employment without just cause constitutes an offense. It must be noted, however that unlike in cases of

4S, 4B, and 4G
commission of any of the probihited activities during strikes or lockouts under Article 265, ULP under Article
248, 249 and 250 and illegal recruitment activities under Article 38, among others, which the Code itself declares to
be unlawful, termination of an employment without just or valid cause is not categorized as an unlawful practice.
Besides, the reliefs principally sought by an employee who was illegally dismissed from his employment are
reinstatement to his former position without loss of seniority rights and privileges, if any, backwages and damages,
in case there is bad faith in his dismissal. By the very nature of the reliefs sought, an action for illegal dismissal
cannot be generally categorized as an “offense” as used under Article 291 of the Labor Code.
It is true that the “backwages” sought by an illegally dismissed employee may be considered, by reason of its
practical effect, as a “money claim.” However, it is not the principal cause of action in an illegal dismissal case
but the unlawful deprivation of the one’s employment committed by the employer in violation of the right of
an employee. Backwages is merely one of the reliefs which an illegally dismissed employee prays the LA and the
NLRC to render in his favor as a consequence of the unlawful act committed by the employer. The award thereof
is not private compensation or damages but is in furtherance and effectuation of the public objectives of the Labor
Code.
It is a principle in American jurisprudence which, undoubtedly, is well-recognized in this jurisdiction that one’s
employment, profession, trade or calling is a “property right,” and the wrongful interference therewith is an
actionable wrong. The right is considered to be property within the protection of a constitutional guaranty of
due process of law. Clearly then, when one is arbitrarily and unjustly deprived of his job or means of livelihood,
the action instituted to contest the legality of one’s dismissal from employment constitutes, in essence, an action
predicated “upon an injury to the rights of the plaintiff,” as contemplated under Art. 1146 of the New Civil Code,
which must be brought within 4 years.
In the instant case, the action for illegal dismissal was filed by petitioners on July 5, 1982, or 3 years, 1 month and
5 days after the alleged effectivity date of his dismissal on June 1, 1979 which is well within the 4-year prescriptive
period under Article 1146 of the Civil Code.
Even on the assumption that an action for illegal dismissal falls under the category of “offenses” or “money
claims” under Articles 291 and 292, Labor Code, still, a strict application of said provisions will not destroy the
enforcement of fundamental rights of the employees. As a general rule, a statute of limitation extinguishes the
remedy only. Although the remedy to enforce a right may be barred, that right may be enforced by some other
available remedy which is not barred.
Also, the threat to petitioner that he would be charged with estafa if he filed a complaint for illegal dismissal, which
private respondent did after all on June 22, 1981, justifies, the delayed filing of the action for illegal dismissal on
July 5, 1982.
Thus, Callanta’s action for illegal dismissal has not prescribed.

4S, 4B, and 4G
Arriola v. Pilipino Star Ngayon, Inc.

G.R. No. 175689; August 13, 2014
Leonen, J.
The prescriptive period for filing an illegal dismissal complaint is four years from the
time the cause of action accrued. This four-year prescriptive period, not the three-year
period for filing money claims under Article 306 [formerly Article 291] of the Labor Code,
applies to claims for backwages and damages due to illegal dismissal.
Facts
Pilipino Star Ngayon, Inc. employed George Arriola as correspondent. Arriola had held various positions in
Pilipino Star Ngayon, Inc. before becoming a section editor and writer of its newspaper. He wrote “Tinig ng
Pamilyang OFWs” until his column was removed from publication on November 15, 1999. Since then, Arriola
never returned for work.
On November 15, 2002, Arriola filed a complaint for illegal dismissal, non-payment of salaries/wages, moral
and exemplary damages, actual damages, attorney’s fees, and full backwages with the National Labor Relations
Commission alleging that Pilipino Star Ngayon, Inc. “arbitrarily dismissed” him on November 15, 1999. Arguing
that he was a regular employee, Arriola contended that his rights to security of tenure and due process were violated
when Pilipino Star Ngayon, Inc. illegally dismissed him.
Pilipino Star Ngayon, Inc. and Miguel Belmonte denied Arriola’s allegations contending that around the third
week of November 1999, Arriola suddenly absented himself from work and never returned despite Belmonte’s
phone calls and beeper messages. After a few months, they learned that Arriola transferred to a rival newspaper
publisher, Imbestigador, to write “Boses ng Pamilyang OFWs.”
At the outset, the Labor Arbiter ruled that laches had set in, emphasizing that Arriola took three years and one day
to file his complaint. According to the LA, this was “contrary to the immediate and natural reaction of an aggrieved
person.” If Arriola were indeed aggrieved, he would not have waited three years and one day to sue Pilipino Star
Ngayon, Inc.
On Arriola’s money claims, the LA ruled that they have already prescribed. The LA cited Article 306 [formerly
Article 291] of the Labor Code, which requires that all money claims arising from employer-employee relations be
filed three years from the time the cause of action accrued. Since Arriola filed his complaint on November 15, 2002,
which was three years and one day from his alleged illegal dismissal on November 15, 1999, the LA ruled that his
money claims were already barred.
Issue
Whether Arriola’s money claims have prescribed.
Ruling
The answer should be qualified. Arriola’s claims for unpaid salaries have prescribed but Arriola’s claims for
backwages, damages, and attorney’s fees arising from his claim of illegal dismissal have not yet prescribed.
Article 306 [formerly Article 291] covers claims for overtime pay, holiday pay, service incentive leave pay, bonuses,
salary differentials, and illegal deductions by an employer. It also covers money claims arising from seafarer contracts.
The provision, however, does not cover “money claims” consequent to an illegal dismissal such as backwages. It
also does not cover claims for damages due to illegal dismissal. These claims are governed by Article 1146 of the
Civil Code of the Philippines.
In this case, the Supreme Court agrees that Arriola’s claims for unpaid salaries have prescribed. Arriola filed his
complaint three years and one day from the time he was allegedly dismissed and deprived of his salaries. Since a
claim for unpaid salaries arises from employer-employee relations, Article 306 [formerly Article 291] of the Labor
Code applies. Arriola’s claim for unpaid salaries was filed beyond the three-year prescriptive period.
However, the Supreme Court finds that Arriola’s claims for backwages, damages, and attorney’s fees arising from

4S, 4B, and 4G
his claim of illegal dismissal have not yet prescribed when he filed his complaint with the Regional Arbitration
Branch for the NCR of the NLRC. As discussed, the prescriptive period for filing an illegal dismissal complaint
is four years from the time the cause of action accrued. Since an award of backwages is merely consequent to a
declaration of illegal dismissal, a claim for backwages likewise prescribes in four years.
The four-year prescriptive period under Article 1146 also applies to actions for damages due to illegal dismissal since
such actions are based on an injury to the rights of the person dismissed. In this case, Arriola filed his complaint
three years and one day from his alleged illegal dismissal. He, therefore, filed his claims for backwages, actual, moral
and exemplary damages, and attorney’s fees well within the four-year prescriptive period.
Petition denied.

4S, 4B, and 4G
Cadalin v. Administrator, Philippine Overseas Employment Administration

G.R. Nos. 104776, 104911-14, and 105029-32; December 05, 1994
Quiason, J.
Article 291 of the Labor Code of the Philippines provides the prescriptive period for filing
“money claims arising from employer-employee relations.” The claims in the cases at bench
all arose from the employer-employee relations, which is broader in scope than claims
arising from a specific law or from the collective bargaining agreement.
Facts
Cadalin, et al., are overseas contract workers recruited by respondent-appellant Asia International Builders
Corporation (AIBC) for its accredited foreign principal, Brown and Root International Inc. (BRII), on various
dates from 1975 to 1983. As such, they were all deployed at various projects in several countries in the Middle East
as well as in Southeast Asia, in Indonesia and Malaysia.
Cadalin, et al., instituted a class suit with the POEA for money claims arising from the unexpired portion of their
employment contract which was prematurely terminated. They worked in Bahrain for BRII and they filed the suit
after 1 year from the termination of their employment contract.
All the petitions raise the common issue of prescription although they disagreed as to the time that should be
embraced within the prescriptive period.
To the POEA Administrator, the prescriptive period was ten years, applying Article 1144 of the Civil Code of the
Philippines. NLRC believed otherwise, fixing the prescriptive period at three years as provided in Article 291 of
the Labor Code of the Philippines.
The claimants, invoking different grounds, insisted that NLRC erred in ruling that the prescriptive period
applicable to the claims was three years, instead of ten years, as found by the POEA Administrator. The claimants
are of the view that Article 291 of the Labor Code of the Philippines, which was applied by NLRC, refers only to
claims “arising from the employer’s violation of the employee’s right as provided by the Labor Code.” They assert
that their claims are based on the violation of their employment contracts, as amended by the Amiri Decree No.
23 of 1976 and therefore the claims may be brought within ten years as provided by Article 1144 of the Civil Code
of the Philippines
AIBC and BRII, insisting that the actions on the claims have prescribed under the Amiri Decree No. 23 of 1976,
argue that there is in force in the Philippines a “borrowing law,” which is Section 48 of the Code of Civil Procedure
and that where such kind of law exists, it takes precedence over the common-law conflicts rule.
Issue
Whether the prescriptive period for the filing of the claims of the complainants was 3 years.
Ruling
Yes. First to be determined is whether it is the Bahrain law on prescription of action based on the Amiri Decree No.
23 of 1976 or a Philippine law on prescription that shall be the governing law. A law on prescription of actions is
sui generis in Conflict of Laws in the sense that it may be viewed either as procedural or substantive, depending on
the characterization given such a law.
However, the characterization of a statute into a procedural or substantive law becomes irrelevant when the
country of the forum has a “borrowing statute.” Said statute has the practical effect of treating the foreign statute
of limitation as one of substance. A “borrowing statute” directs the state of the forum to apply the foreign statute
of limitations to the pending claims based on a foreign law. While there are several kinds of “borrowing statutes,”
one form provides that an action barred by the laws of the place where it accrued, will not be enforced in the forum
even though the local statute has not run against it. Section 48 of our Code of Civil Procedure is of this kind.
In the light of the 1987 Constitution, however, Section 48 cannot be enforced ex proprio vigore insofar as it ordains
the application in this jurisdiction of Section 156 of the Amiri Decree No. 23 of 1976.

4S, 4B, and 4G
The courts of the forum will not enforce any foreign claim obnoxious to the forum’s public policy. To enforce
the one-year prescriptive period of the Amiri Decree No. 23 of 1976 as regards the claims in question would
contravene the public policy on the protection to labor.
Having determined that the applicable law on prescription is the Philippine law, the next question is whether the
prescriptive period governing the filing of the claims is three years, as provided by the Labor Code or ten years, as
provided by the Civil Code of the Philippines.
Section 7-a of the Eight-Hour Labor Law provides the prescriptive period for filing “actions to enforce any cause
of action under said law.” On the other hand, Article 291 of the Labor Code of the Philippines provides the
prescriptive period for filing “money claims arising from employer-employee relations.” The claims in the cases at
bench all arose from the employer-employee relations, which is broader in scope than claims arising from a specific
law or from the collective bargaining agreement.
The contention of the POEA Administrator, that the three-year prescriptive period under Article 291 of the
Labor Code of the Philippines applies only to money claims specifically recoverable under said Code, does not find
support in the plain language of the provision. Neither is the contention of the claimants in G.R. Nos. 104911-14
that said Article refers only to claims “arising from the employer’s violation of the employee’s right,” as provided
by the Labor Code supported by the facial reading of the provision.

LABOR DOLE REGIONAL DIRECTOR: SMALL MONEY CLAIMS
RELATIONS WITHOUT CLAIMS FOR REINSTATEMENT
154. MATERNITY CHILDREN HOSPITAL GR No. 78909
V. SECRETARY OF LABOR
Date: June 30, 1989
Ponente: MEDIALDEA, J
MATERNITY CHILDREN’S HONORABLE SECRETARY OF LABOR
HOSPITAL, petitioner AND THE REGIONAL DIRECTOR OF
LABOR, REGION X, respondents
DOCTRINE: Regional Directors already had enforcement powers over money claims,
effective under P.D. No. 850, issued on December 16, 1975, which transferred labor
standards cases from the arbitration system to the enforcement system.
FACTS
Petitioner is a semi-government hospital, managed by the Board of Directors of the

Cagayan de Oro Women's Club and Puericulture Center, headed by Mrs. Antera Dorado,
as hold¬over President. The hospital derives its finances from the club itself as well as
from paying patients, averaging 130 per month. It is also partly subsidized by the PCSO
and the Cagayan De Oro City government. Petitioner has forty-one (41) employees.
Aside from salary and living allowances, the employees are given food, but the amount
spent therefore is deducted from their respective salaries.
Subsequently, ten (10) employees of the petitioner employed in different
capacities/positions filed a complaint with the Office of the Regional Director of Labor and
Employment, Region X, for underpayment of their salaries and ECOLAs.
The Regional Director directed two of his Labor Standard and Welfare Officers to inspect
the records of the petitioner to ascertain the truth of the allegations in the complaints.
Payrolls covering the periods of May 1974, January, 1985, November, 1985 and May,
1986, were duly submitted for inspection. The Labor Standard and Welfare Officers
submitted their report confirming that there was underpayment of wages and ECOLAs of
all the employees by the petitioner.
DOLE Regional Director: issued an order directing payment of P723,888.58
representing the underpayment of wages and ECOLAs to all the petitioner’s employees.
Hence, the petitioner appealed to the Secretary of Labor.
Secretary of Labor: Modified and held that deficiency wages and ECOLAs should only
be computed from May 23, 1983 to May 23, 1986. Petitioner filed an MR but was denied,
hence the present petition.
ISSUE/S
426
Whether or not the Regional Director had jurisdiction over the case and if so, the extent
of coverage of any award that should be forthcoming, arising from his visitorial and
enforcement powers under Article 128 of the Labor Code.
RULING
Yes. the Regional Director has jurisdiction over the case. Under the present rules, the
Regional Director exercises both visitorial and enforcement power over labor standards
cases, and is therefore empowered to adjudicate money claims, provided there still exists
an employer- employee relationship, and the findings of the regional office is not
contested by the employer concerned.
Prior to the promulgation of E.O. No. 111 on December 24, 1986, the Regional Director's
authority over money claims was unclear. The complaint in the present case was filed on
May 23, 1986 when E.O. No. 111 was not yet in effect, and the prevailing view was that
stated in the case of Antonio Ong, Sr. vs. Henry M. Parel, which held that the "Regional
Director was not empowered to share in the original and exclusive jurisdiction conferred
on Labor Arbiters by Article 217."
However, that even in the absence of E.O. No. 111, Regional Directors already had
enforcement powers over money claims, effective under P.D. No. 850, issued on
December 16, 1975, which transferred labor standards cases from the arbitration system
to the enforcement system.
E.O. No. 111 was issued on December 24, 1986 or three (3) months after the
promulgation of the Secretary of Labor's decision upholding private respondents' salary
differentials and ECOLAs on September 24,1986. The amendment of the visitorial and
enforcement powers of the Regional Director (Article 128-b) by said E.O. 111 reflects the
intention enunciated in Policy Instructions Nos. 6 and 37 to empower the Regional
Directors to resolve uncontested money claims in cases where an employer-employee
relationship still exists. This intention must be given weight and entitled to great respect.
The Regional Director correctly applied the award with respect to (1) those employees
who signed the complaint, as well as (2) those who did not sign the complaint, but were
still connected with the hospital at the time the complaint was filed. The justification for
the award to this group of employees who were not signatories to the complaint is that
the visitorial and enforcement powers given to the Secretary of Labor is relevant to, and
exercisable over establishments, not over the individual members/employees, because
what is sought to be achieved by its exercise is the observance of, and/or compliance by,
such firm/establishment with the labor standards regulations. Necessarily, in case of an
award resulting from a violation of labor legislation by such establishment, the entire
members/employees should benefit therefrom.
However, there is no legal justification for the award in favour of those employees who
were no longer connected with the hospital at the time the complaint was filed, having
resigned therefrom in 1984. The enforcement power of the Regional Director cannot
legally be upheld in cases of separated employees. Article 129 of the Labor Code, cited
by petitioner is not applicable as said article is in aid of the enforcement power of the
427
Regional Director; hence, not applicable where the employee seeking to be paid
underpayment of wages is already separated from the service. His claim is purely a
money claim that has to be the subject of arbitration proceedings and therefore within the
original and exclusive jurisdiction of the Labor Arbiter.
MONTELLANO, JOSEPH ANDREW G.
428
LABOR DOLE REGIONAL DIRECTOR: SMALL MONEY CLAIMS
RELATIONS WITHOUT CLAIMS FOR REINSTATEMENT
155. ODIN SECURITY V. DE LA SERNA GR No. 87439
Date: 21 February 1990
Ponente: GRIÑO-AQUINO, J
ODIN SECURITY AGENCY, petitioner HON. DIONISIO C. DE LA SERNA, in his
capacity as Undersecretary, Department of
Labor and Employment, HON. LUNA C.
PIEZAS, in his capacity as Regional
Director (DOLE), National Capital Region
and SERGIO APILADO, MAMERTO
GENER, ARMANDO YUMUL,
HERMINIGILDO BARGAS, MARCIANO
BOLOCON, WILLIAM ADAMI, ANTONIO
PUBLICO, LEOPOLDO SAAVEDRA,
WARLITO ILAGA, JOVANY SERATO,
DANIEL MINGLANA, JOSE MIRANDA,
JR., ANASTACIO SANTILLAN, ROLANDO
FERNANDEZ, NICANOR FEREAS,
FRANCISCO VERZOSA, PLARIDEL
ELORIA, APSIN PAGAYAO, JAIME
DORADO, GUILLERMO ELLARES,
ARTURO FACTOR, DANIEL FERUISH,
CRISOSTOMO FONSECA, JERRY GA,
FRANCISCO GUINSATAO, SIXTO LIPER,
ALLAN MANALLA, GEORGE ORQUESTA,
WILFREDO QUIROZ, BENJAMIN UY,
EDWIN ORDONA and DEMETRIO
TORRES, respondents
DOCTRINE: The fact is, the Regional Director and the Undersecretary did have
jurisdiction over the private respondents' complaint which was originally for violation of
labor standards (Art. 128[b], Labor Code). Only later did the guards ask for backwages
on account of their alleged "constructive dismissal". Once vested, that jurisdiction
continued until the entire controversy was decided.
FACTS
Sergio Apilado and 55 others filed a complaint against petitioner Odin Security Agency
for underpayment of wages, illegal deductions, non-payment of night shift differential,
overtime pay, premium pay for holiday work, rest days and Sundays, service incentive
leaves, vacation and sick leaves, and 13th-month pay.
Private respondents alleged in their position paper that their latest monthly salary was
P1,600; that from this amount, petitioner deducted P100 as administrative cost and P20
429
as bond; that they were not paid their premium pay and overtime pay for working on the
11 legal holidays per year; and, that since private respondents were relieved or
constructively dismissed, they must also be paid backwages.
Petitioner contended that some 48 security guards threatened mass action against it.
Alarmed by a possible abandonment of post by the guards and mindful of its contractual
obligations to its clients/principals, petitioner relieved and re-assigned the complaining
guards to other posts in Metro Manila. Those relieved were ordered to report to the
agency's main office for reassignment. Only few complied, so those who failed to comply
were placed on "AWOL" status. Petitioner claimed it complied with the Labor Code
provisions, and in support thereof, it submitted the "Quitclaim and Waiver" of 34
complainants. Petitioner filed an ex parte manifestation alleging that some of the
complainants had withdrawn their complaints. Seventeen complainants repudiated their
quitclaim and waiver and alleged that management pressured them to sign documents
which they were not allowed to read and that if such waiver existed, they did not have
any intention of waiving their rights under the law.
Petitioner argued that complainants were estopped from denying their quitclaims on the
ground of equity; that being high school graduates, complainants fully understood the
document they signed; and that complainants' allegation of coercion or threat was a mere
afterthought. Later, six of the 17 complainants who repudiated their quitclaims again
executed quitclaims and waivers. DOLE Regional Director Luna C. Piezas ordered the
payments to each of the 16 complainant-guards. This was affirmed by the DOLE USEC
De la Serna. The decision was later modified from 16 to 15 because the Undersecretary
found that Joseph Pardeno was never relieved from his post but continued to work for
the petitioner.
ISSUE/S
Whether or not the Regional Director is bereft of jurisdiction.
RULING
NO. The petitioner is estopped from questioning the alleged lack of jurisdiction of the
Regional Director over the private respondents' claims. Petitioner submitted to the
jurisdiction of the Regional Director by taking part in the hearings before him and by
submitting a position paper. When the Regional Director issued his March 20, 1987 order
requiring petitioner to pay the private respondents the benefits they were claiming,
petitioner was silent. Only the private respondents filed a motion for reconsideration. It
was only after the Undersecretary modified the order of the Regional Director on March
23, 1988 that the petitioner moved for reconsideration and questioned the jurisdiction of
the public respondents to hear and decide the case.
The fact is, the Regional Director and the Undersecretary did have jurisdiction over the
private respondents' complaint which was originally for violation of labor standards (Art.
128[b], Labor Code). Only later did the guards ask for backwages on account of their
alleged "constructive dismissal". Once vested, that jurisdiction continued until the entire
controversy was decided.
430
The jurisdiction of public respondents over the complaints is clear from a reading of Article
128(b) of the Labor Code, as amended by Executive Order No. 111, thus: "(b) The
provisions of Article 217 of this Code to the contrary notwithstanding and in cases where
the relationship of employer- employee still exists, the Minister of Labor and Employment
or his duly authorized representatives shall have the power to order and administer, after
due notice and hearing, compliance with the labor standards provisions of this Code and
other labor legislation based on the findings of labor regulation officers or industrial safety
engineers made in the course of inspection, and to issue writs of execution to the
appropriate authority for the enforcement of their orders, except in cases where the
employer contests the findings of the labor regulation officer and raises issues which
cannot be resolved without considering evidentiary matters that are not verifiable in the
normal course of inspection."
In Briad Agro Development Corp. vs. Hon. Dionisio De la Serna, we clarified the
amendment when we ruled, thus:
To recapitulate under EO 111, the Regional Directors, in representation of the
Secretary of Labor — and notwithstanding the grant of exclusive original
jurisdiction to Labor Arbiters by Article 217 of the Labor Code, as amended —
have power to hear cases involving violations of labor standards provisions of the
Labor Code or other legislation discovered in the course of normal inspection, and
order compliance therewith, provided that:
1) the alleged violations of the employer involve persons who are still his
employees, i.e., not dismissed, and
2) the employer does not contest the findings of the labor regulations officer
or raise issues which cannot be resolved without considering evidentiary
matters that are not verifiable in the normal course of inspection.
PALOMAR, ANDREI ANNE U.
431
LABOR DOLE SECRETARY: ASSUMPTION OF JURISDICTION OVER
RELATIONS STRIKES AND LOCKOUTS
157. TELEFUNKEN SEMICONDUCTORS GR No. 143013-14
EMPLOYEES UNION FFW VS. COURT
OF APPEALS Date: December 18, 2000
Ponente: DE LEON, JR., J.
TELEFUNKEN SEMICONDUCTORS THE COURT OF APPEALS, HON.
EMPLOYEES UNION-FFW and individual BIENVENIDO LAGUESMA, as Secretary
union members DANILO G. MADARA and of Labor and Employment, and TEMIC
ROMEO L. MANAYAO, petitioners TELEFUNKEN MICROELECTRONICS,
(PHILS.), INC., respondents.
DOCTRINE: It is clear from the Art. 264 (g) that the moment the Secretary of Labor
assumes jurisdiction over a labor dispute in an industry indispensable to national interest,
such assumption shall have the effect of automatically enjoining the intended or
impending strike. It was not even necessary for the Secretary of Labor to issue another
order directing them to return to work. The mere issuance of an assumption order by the
Secretary of Labor automatically carries with it a return-to-work order, even if the directive
to return to work is not expressly stated in the assumption order.
FACTS
The labor dispute started on August 25, 1995 when the Company and the Union reached
a deadlock in their negotiations for a new collective bargaining agreement. On August
28, 1995, the Union filed a Notice of Strike with the NCMB.
On September 8, 1995, the then Acting Secretary of DOLE, Brillantes, intervened and
assumed jurisdiction over the dispute pursuant to Art. 263, par. (g) and therefore, issuing
an order enjoining any strike or lockout, whether actual or intended, between the parties.
His Notice of the Assumption Order was personally served on the representatives of the
Company, to the counsel of the Union-FFW and to the Union President but both union
representatives refused to acknowledge receipt thereof.
Despite the assumption Order, the Union struck on September 14. Two days later, the
Acting Secretary of Labor issued an Order directing the striking workers to return to work
within twenty-four (24) hours and for the Company to admit them back to work under the
terms and conditions prevailing prior to the strike. Notice of the Return-to- Work Order
dated September 16 was sent to the striking Union members but still some of them
refused to heed the order and continued with their picket. The Federation of Free Workers
(FFW) received and acknowledged receipt of the said Order on September 18. On
September 23, violence erupted in the picket lines. The service bus ferrying no striking
workers were stoned, causing injuries to its passengers. Thereafter, complaints for
threats, defamation, illegal detention and physical injuries were filed against the strikers.
434
On October 2, the Company issued letters of termination for cause to the workers who
did not report back to work.
On October 27, the Acting Secretary of Labor issued another Order directing the
Company to reinstate all striking workers "except the Union Officers, shop stewards,
and those with pending criminal charges, x x x" while the resolution of the legality of the
strike was pending.
On December 5, the Union filed with this Court a petition for certiorari, questioning the
exclusions made in the aforesaid Orders.
On June 27, 1996, while the said petition was pending, then Secretary of Labor
Quisumbing* issued a Writ of Execution for the physical reinstatement of the remaining
striking workers who were not reinstated Accordingly, the Company filed a Motion to
Quash the Writ of Execution, which was denied by the in the same Order, the DOLE
directed the issuance of an Alias Writ to enforce the actual and physical reinstatement of
the workers. The Company’s MR was denied.
ISSUE/S
1. Whether or not the assumption of jurisdiction by the Secretary of Labor labor dispute
in an industry indispensable to national interest, have the effect of automatically enjoining
the intended or impending strike without need of a return-to-work order
2. Whether or not there was a valid case of dismissal of the strikers
RULING
(1) YES. The need to determine the individual liabilities of the striking workers, the union
officers and members alike, was correctly dispensed with by the Secretary of Labor after
he gave sufficient opportunity to the striking workers to cease and desist from continuing
with their picket. Ensconced in the Labor Code of the Philippines, as amended, is the rule
that:
Art. 263. Strikes, picketing and lockouts.
(g) When, in his opinion, there exists a labor dispute causing or likely to cause a strike or
lockout in an industry indispensable to the national interest, the Secretary of Labor and
Employment may assume jurisdiction over the dispute and decide it or certify the same
to the Commission for compulsory arbitration. Such assumption per certification shall
have the effect of automatically enjoining the intended or impending strike or lockout as
specified in the assumption or certification order. If one had already taken place at the
time of assumption or certification, all striking or locked out employees shall immediately
return to work and the employer shall immediately resume operations and re-admit all
workers under the same terms and conditions prevailing before the strike or lockout. The
Secretary of Labor and Employment or the Commission may seek the assistance of law
enforcement agencies to ensure the compliance with this provision as well as with such
orders as he may issue to enforce the same.
435
It is clear from the foregoing legal provision that the moment the Secretary of Labor
assumes jurisdiction over a labor dispute in an industry indispensable to national interest,
such assumption shall have the effect of automatically enjoining the intended or
impending strike. It was not even necessary for the Secretary of Labor to issue another
order directing them to return to work. The mere issuance of an assumption order by the
Secretary of Labor automatically carries with it a return-to-work order, even if the directive
to return to work is not expressly stated in the assumption order.
(2) YES. Having thus resolved the threshold issue as hereinabove discussed, it
necessarily follows that the strike of the Union cannot be viewed as anything but illegal
for having been staged in open and knowing defiance of the assumption and return-to-
work orders. The necessary consequence thereof are also detailed by the Supreme Court
in its various rulings. In Marcopper Mining Corp. v. Brillantes (254 SCRA 595), the High
Tribunal stated in no uncertain terms that:
"by staging a strike after the assumption of jurisdiction or certification for arbitration,
workers forfeited their right to; be readmitted to work, having abandoned their
employment, and so could be validly replaced." Again, in Allied Banking Corporation v.
NLRC the Supreme Court ruled that:
"xxx. However, private respondents failed to take into consideration the cases recently
decided by this
Court which emphasized on the strict adherence to the rule that defiance of the return-to-
work order of the Secretary of Labor would constitute a valid ground for dismissal. The
respective liabilities of striking union officers and members who failed to immediately
comply with the return-to-work order, are clearly spelled out in Article 264 of the Labor
Code which provides that any declaration of a strike or lock out after the Secretary of
Labor and Employment has assumed jurisdiction over the labor dispute is considered an
illegal act. Therefore, any worker or union officer who knowingly participates in a strike
defying a return-to-work order may as a result thereof be considered to have lost his
employment status."
TUVERA, VERONICA N.
436
LABOR DOLE SECRETARY: ASSUMPTION OF JURISDICTION OVER
RELATIONS STRIKES AND LOCKOUTS
158. Phimco Industries v. Brillantes GR No. 120751
Date: March 17, 1999
Ponente: PURISIMA, J.
PHIMCO INDUSTRIES, INC., petitioner HONORABLE ACTING SECRETARY OF

LABOR JOSE BRILLANTES and PHIMCO
INDUSTRIES
LABOR ASSOCIATION
(PILA), respondents
DOCTRINE: The Labor Code vests in the Secretary of Labor the discretion to determine
what industries are indispensable to the national interest. Accordingly, upon the
determination by the Secretary of Labor that such industry is indispensable to the national
interest, he will assume jurisdiction over the labor dispute in the said industry.
FACTS
Respondent PILA, duly certified collective bargaining representative of daily paid workers
of Phimco, filed a notice of strike with the NCMB against Phimco, a corporation engaged
in the production of matches. When several conciliation conferences failed to resolve
their differences, PILA staged a strike.
PILA presented a petition for the intervention of the Secretary of Labor in the resolution
of the labor dispute, to which petition PHIMCO opposed. Pending resolution of the said
petition, PHIMCO sent notice of termination to some 47 workers including several union
officers.
The then Acting Secretary of Labor Jose Brillantes assumed jurisdiction over the
labor dispute and issued his Order directing all the striking workers to return to work and
for the company to accept them back under the same terms and conditions x x x.
ISSUE/S
WON Acting DOLE Sec. Brillantes acted with GADALEJ when he assumed jurisdiction
over the labor dispute?
RULING
YES. Art. 263 (g) of the LC provides that, “When, in his opinion, there exist a labor dispute
causing or likely to cause a strike or lockout in an industry indispensable to the national
interest, the Secretary of Labor and Employment may assume jurisdiction over the
dispute and decide it or certify the same to the Commission for compulsory arbitration x
x x.” The Labor Code vests in the Secretary of Labor the discretion to determine what
industries are indispensable to the national interest. Accordingly, upon the
437
determination by the Secretary of Labor that such industry is indispensable to the
national interest, he will assume jurisdiction over the labor dispute in the said
industry. This power, however, is nor without limitation. BP 130 cannot be any clearer,
the coverage being limited to “strikes or lockouts adversely affecting the national interest.”
In this case at bar, however, the very admission by the public respondent draws the
labor dispute in question out of the ambit of the Secretary's prerogative, to wit: “While
the case at bar appears on its face not to fall within the strict categorization of cases
imbued with "national interest", this office believes that the obtaining circumstances
warrant the exercise of the powers under Article 263(g) of the Labor Code, as amended.”
The private respondent did not even make any effort to touch on the indispensability of
the match factory to the national interest. It must have been aware that a match factory,
though of value, can scarcely be considered as an industry "indispensable to the
national interest" as it cannot be in the same category as "generation and distribution
of energy, or those undertaken by banks, hospitals, and export-oriented industries." Yet,
the public respondent assumed jurisdiction thereover.
It is thus evident from the foregoing that the Secretary's assumption of jurisdiction
grounded on the alleged "obtaining circumstances" and not on a determination that the
industry involved in the labor dispute is one indispensable to the "national interest", the
standard set by the legislature, constitutes grave abuse of discretion amounting to lack
of or excess of jurisdiction. To uphold the action of the public respondent under the
premises would be stretching too far the power of the Secretary of Labor as every case
of a strike or lockout where there are inconveniences in the community, or work
disruptions in an
industry though not indispensable to the national interest, would then come within the
Secretary's power. It would be practically allowing the Secretary of Labor to intervene in
any Labor dispute at his pleasure.
In light of the foregoing, we hold that the public respondent gravely abused his discretion
in assuming jurisdiction over the labor dispute sued upon in the case.
WHEREFORE, the petition is hereby GRANTED.
(CONCURRING) SEPARATE OPINION OF J. PANGANIBAN:
From the text and the tenor of the law, it is clear as daylight that the secretary's
assumption of jurisdiction over a labor dispute is meant to be used sparingly and
only if the national interest demands it. Admittedly, the Court has allowed the
secretary's assumption of jurisdiction in many cases, some of which are worth mentioning
to show the care with which such plenary power should be used.
In Philippine School of Business Administration v. Noriel, the Court has declared that the
administration of a school is of national interest because ". . . [it] is engaged in the
promotion of the physical, intellectual and emotional well-being of the country's youth."
438
Work stoppage at a school unduly prejudices the students and entails great loss to all
concerned in terms of time, effort and money.
In Sarmiento v. Tuico , an enterprise exporting 90 percent of its production and generating
more than $12 million dollars per year was declared to be of national interest. Any
disruption of operations would have caused the delay of shipments of export consisting
of Finished products previously committed to customers abroad, a delay that would have
hampered the economic recovery program pursued by the government.
The manufacture of drugs and pharmaceuticals has also been declared to belong to the
same classification. Likewise, the operation of an airline that services domestic routes
has been deemed to be imbued with national interest.
As stated earlier, petitioner PHIMCO is a company which manufactures matches and,
thus, does not qualify as one engaged in an "industry indispensable to national
interest." The respondent labor and employment secretary admit this fact, expressly
declaring that "the case at bar appears on its face not to fall within the strict categorization
of cases imbued with 'national interest.'" He nevertheless assumed jurisdiction over
petitioner's labor dispute. The allegation of the public respondent that the "match industry
like the textile or garment industry may be classified as export-oriented" is sufficiently
rebutted by petitioner's simple argument pointing out that its export is very negligible and
would not qualify under the definition of "export-oriented industries.
WHEREFORE, I vote to GRANT the petition.
USITA, ZOFIA JILL A.
439
LABOR REMEDY FROM DECISIONS OF THE DOLE SECRETARY
RELATIONS
159. NATIONAL FEDERATION OF GR No. 123426
LABOR v. LAGUESMA
Date: 10 March 1999
Ponente: KAPUNAN, J.
NATIONAL FEDERATION OF LAGUESMA , respondents
LABOR, petitioner
DOCTRINE: Petitions for certiorari under Rule 65 against the decisions of the Secretary
of Labor rendered under the Labor Code and its implementing and related rules be filed
initially with the Court of Appeals
FACTS
On 27 December 1994, a petition for certification election among the rank and file
employees of Cebu Shipyard and Engineering Work, Inc. was filed by the Alliance of
Nationalist and Genuine Labor Organization (ANGLO-KMU), alleging among others, that
it is a legitimate labor organization; that respondent Cebu Shipyard and Engineering
Work, Inc. is a company engaged in the business of shipbuilding and repair with more or
less, four hundred (400) rank and file employees; that the Nagkahiusang Mamumuo sa
Baradero — National Federation of Labor is the incumbent bargaining agent of the rank
and file employees of the respondent company; that the petition is supported by more
than twenty-five percent (25%) of all the employees in the bargaining unit; that the petition
is filed within the sixty (60) day period prior to the expiry date of the collective bargaining
agreement (CBA) entered into by and between the Nagkahiusang Mamumuo sa
Baradero-NFL and Cebu Shipyard Engineering Work, Inc. which is due to expire on 31
December 1994; and, that there is no bar to its bid to be certified as the sole and exclusive
bargaining agent of all the rank and file employees of the respondent company.
On 2 January 1995, the Med-Arbiter ordered the petitioner to present proofs that it has
created a local in the appropriate bargaining unit where it seeks to operate as the
bargaining agent.
On 9 January 1995, forced-intervenor National Federation of Labor (NFL) moved for the
dismissal of the petition on grounds that petitioner has no legal personality to file the
present petition for certification election and that it failed to comply with the twenty-five
percent (25%) consent requirement.
On 16 January 1995, forced-intervenor filed an Addendum/Supplement to its Motion to
Dismiss, together with the certification issued by the Regional Office No. VII, this
Department and the certification issued by the BLR, this Department, stating that as of
11 January 1995, the ANGLO-Cebu Shipyard and Engineering Work has not been
reported as one of the affiliates of the Alliance of Nationalist and Genuine Labor
440
Organization (ANGLO). Forced intervenor alleged that it is clear from the said certification
that when the present petition was filed on 27 December 1994, petitioner and its alleged
local/chapter have no legal personality to file the same.
On 15 February 1995, petitioner filed its opposition to the respondent’s motion to dismiss.
On 20 February 1995, forced-intervenor filed its reply. It stressed that petitioner is not a
legitimate labor organization at the time of the filing of the petition and that the petitioner’s
submission of the mandatory requirements after the freedom period would not cure the
defect of the petition. On 13 March 1995, the Med-Arbiter issued the assailed Resolution
dismissing the petition, after finding that the submission of the required documents
evidencing the due creation of a local was made after the lapse of the freedom period.
The Alliance of Nationalist Genuine Labor Organization-Kilusang Mayo Uno (ANGLO-

KMU) filed an appeal from the March 13, 1995 Med-Arbiter's resolution insisting that it is
a legitimate labor organization at the time of the filing of the petition for certification
election, and claiming that whatever defect the petition may have had was cured by the
subsequent submission of the mandatory requirements.
In a Resolution dated August 8, 1995, respondent Undersecretary Bienvenido E.
Laguesma, by authority of the Secretary of Labor and Employment, set aside the Med-
Arbiter's resolution and entered in lieu thereof a new order "finding petitioner [ANGLO-
KMU] as having complied with the requirements of registration at the time of filing of the
petition and remanding the records of this case to the Regional Office of origin . . . ." The
National Federation of Labor thus filed this special civil action for certiorari under Rule 65
of the Rules of Court.
ISSUE/S
WON the special civil action for certiorari under Rule 65 filed with the SC is proper– NO
RULING
NO. The Labor Code and its implementing and related rules generally do not provide for
any mode for reviewing the decision of the Secretary of Labor.
It is further generally provided that the decision of the Secretary of Labor shall be final
and executory after ten (10) days from notice. Yet, like decisions of the NLRC which
under Art. 223 of the Labor Code become final after ten (10) days, decisions of the
Secretary of Labor come to this Court by way of a petition for certiorari even beyond the
ten- day period provided in the Labor Code and the implementing rules but within the
reglementary period set for Rule 65 petitions under the 1997 Rules of Civil Procedure.
In two instances, however, there is specific mention of a remedy from the decision of the
Secretary of Labor, thus:
(1) Section 15, Rule XI, Book V of the amended implementing rules provides that the
decision of the Secretary of Labor on appeal from the Med-Arbiter’s decision on a petition
for certification election shall be final and executory, but that the implementation of the
441
Secretary’s decision affirming the Med-Arbiter’s decision to conduct a certification
election "shall not be stayed unless restrained by the appropriate court."
We read "the appropriate court" in the above provision refers to the Court of Appeals.
Thus, the proper remedy which is Rule 65 should be initially filed in the Court of Appeals
in strict observance of the doctrine on the hierarchy of courts.
(2) Section 5, Rule V (Execution) of the Rules on the Disposition of Labor Standards
Cases in Regional Offices provides that "the filing of a petition for certiorari before the
Supreme Court shall not stay the execution of the [appealed] order or decision unless the
aggrieved party secures a temporary restraining order from the Court."
Section 5 cannot be read to mean that the petition for certiorari can only be filed
exclusively and solely with this Court, as the provision must invariably be read in relation
to the pertinent laws on the concurrent original jurisdiction of this Court and the Court of
Appeals in Rule 65 petitions.
Thus, the Supreme Court held that, it is procedurally feasible as well as practicable that
petitions for certiorari under Rule 65 against the decision of the Secretary of Labor
rendered under the Labor Code and its implementing and related rules be filed initially in
the Court of Appeals. Paramount consideration is strict observance of the doctrine on the
hierarchy of the courts, emphasized in St. Martin Funeral Homes v. NLRC, on "the judicial
policy that this Court will not entertain direct resort to it unless the redress desired cannot
be obtained in the appropriate courts or where exceptional and compelling circumstances
justify availment of a remedy within and calling for the exercise of our preliminary
jurisdiction.
VILLA, GENESIS KIRBY V.
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