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G.R. No.

78909 June 30, 1989

Maternity Childrens Hospital vs. Secretary of
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 holdover 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 Philippine Charity
Sweepstakes Office and the Cagayan De Oro City
Petitioner has forty-one (41) employees. Aside from
salary and living allowances, the employees are given
food, but the amount spent therefor is deducted from
their respective salaries
On May 23, 1986, 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, which was docketed as
ROX Case No. CW-71-86.
On June 16, 1986, 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. Based on their
inspection report and recommendation, the Regional
Director issued an Order dated August 4, 1986,
directing the payment of P723,888.58, representing
underpayment of wages and ECOLAs to all the
petitioner's employees.
Petitioner appealed from this Order to the Minister of
Labor and Employment, Hon. Augusto S. Sanchez,
who rendered a Decision on September 24, 1986,
modifying the said Order in that deficiency wages and
ECOLAs should be computed only from May 23, 1983
to May 23, 1986,
On October 24, 1986, the petitioner filed a motion for
reconsideration which was denied by the Secretary of
Labor in his Order dated May 13, 1987, for lack of
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.
This is a labor standards case, and is governed by
Art. 128-b of the Labor Code, as amended by E.O.
No. 111. Under the present rules, a 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
Labor standards refer to the minimum requirements
prescribed by existing laws, rules, and regulations
relating to wages, hours of work, cost of living
allowance and other monetary and welfare benefits,
including occupational, safety, and health standards
(Section 7, Rule I, Rules on the Disposition of Labor
Standards Cases in the Regional Office, dated
September 16, 1987).
ACCORDINGLY, this petition should be dismissed, as
it is hereby DISMISSED, as regards all persons still
employed in the Hospital at the time of the filing of the
complaint, but GRANTED as regards those
employees no longer employed at that time. SO
Fernan, C.J., Narvasa, Gutierrez, Jr., Cruz, Paras,
Feliciano, Gancayco, Padilla, Bidin, Cortes, Grio-
Aquino and Regalado, JJ., concur
G.R. No. 132564 October 20, 1999
COMMISSION, Third Division, Q.C. and PRISCILA
ENDOZO, respondents.
Private respondent Endozo was employed as
domestic helper in Taiwan. The employment contract
was for a definite period of one (1) year, with six (6)
months probationary period. She stayed in Taiwan
only for eleven (11) days as her employer terminated
her services, and sent her home for alleged
incompetence. Hence, private respondent filed with
the Philippine Overseas Employment Administration a
complaint against petitioner for illegal dismissal.
Consequently, respondent's claim was transferred to
the National Labor Relations Commission, Arbitration
Branch, in San Pablo City.
Whether the employer in Taiwan could lawfully
terminate private respondent's employment as
domestic helper for incompetence during the
probationary period of her employment.
It is an elementary rule in the law on labor relations
that even a probationary employee is entitled to
security of tenure. A probationary employee can not
be terminated, except for cause.
In this case, the employment contract was for a
definite period of one (1) year, with six (6) months
probationary period. After only eleven days of work,
the employer dismissed private respondent without
just cause.
A probationary employee may be terminated on two
grounds: (a) for just cause or (b) when he fails to
qualify as a regular employee in accordance with
reasonable standards made known by the employer
to the employee at the time of his engagement.
Under the contract of employment, the employer may
terminate the services of private respondent during
the probationary period for "being found losing ability
to work." However, "the power of the employer to
terminate a probationary employment contract is
subject to limitations. First, it must be exercised in
accordance with the specific requirements of the
contract. Secondly, the dissatisfaction of the employer
must be real and in good faith, not feigned so as to
circumvent the contract or the law; and thirdly, there
must be no unlawful discrimination in the dismissal."
In termination cases, the burden of proving just or
valid cause for dismissing an employee rests on the
employer. In this case, petitioner was not able to
present convincing proof establishing respondent
Endozo's alleged incompetence.
G.R. No. 47800 2 December 1940
Calalang vs. Williams
A resolution by the National Traffice Commission that
animal drawn vehicles be prohibited from passing
along Rosario Street extending from Plaza Calderon
de la Barca to Dasmarias Street, from 7:30 a.m. to
12:30 p.m. and from 1:30 p.m. to 5:30 p.m.; and along
Rizal Avenue extending from the railroad crossing at
Antipolo Street to Echague Street, from 7 a.m. to 11
p.m., for a period of one year from the date of the
opening of the Colgante Bridge to traffic was
approved and adopted by the Secretary of Public
Works and Communications upon indorsement by the
Director of Public Works pursuant to Commonwealth
Act 548 with modifications that Rosario Street and
Rizal Avenue be closed to traffic of animal-drawn
vehicles, between the points and during the hours as
The Mayor of Manila and the Acting Chief of Police of
Manila have enforced and caused to be enforced the
rules and regulations thus adopted. Maximo Calalang,
in his capacity as a private citizen and as a taxpayer
of Manila, brought before the Supreme Court the
petition for a writ of prohibition against A. D. Williams,
as Chairman of the National Traffic Commission;
Vicente Fragante, as Director of Public Works; Sergio
Bayan, as Acting Secretary of Public Works and
Communications; Eulogio Rodriguez, as Mayor of the
City of Manila; and Juan Dominguez, as Acting Chief
of Police of Manila.
Whether the rules and regulations promulgated by the
Director of Public Works infringe upon the
constitutional precept regarding the promotion of
social justice to insure the well-being and economic
security of all the people.
The promotion of social justice is to be achieved not
through a mistaken sympathy towards any given
Social justice is "neither communism, nor despotism,
nor atomism, nor anarchy," but the humanization of
laws and the equalization of social and economic
forces by the State so that justice in its rational and
objectively secular conception may at least be
approximated. Social justice means the promotion of
the welfare of all the people, the adoption by the
Government of measures calculated to insure
economic stability of all the competent elements of
society, through the maintenance of a proper
economic and social equilibrium in the interrelations
of the members of the community, constitutionally,
through the adoption of measures legally justifiable, or
extra-constitutionally, through the exercise of powers
underlying the existence of all governments on the
time-honored principle of salus populi est suprema
Social justice, therefore, must be founded on the
recognition of the necessity of interdependence
among divers and diverse units of a society and of the
protection that should be equally and evenly extended
to all groups as a combined force in our social and
economic life, consistent with the fundamental and
paramount objective of the state of promoting the
health, comfort, and quiet of all persons, and of
bringing about "the greatest good to the greatest
Prohibition Prayed for is hereby denied, with costs
against the petitioner. So ordered.
Avancea, C.J., Imperial, Diaz and Horrilleno, JJ.,
G.R. No. L-2089 October 31, 1949
JUSTA G. GUIDO, petitioner, vs. RURAL
AGUILAR, Manager, Rural Progress
This a petition for prohibition to prevent the Rural
Progress Administration and Judge Oscar Castelo of
the Court of First Instance of Rizal from proceeding
with the expropriation of the petitioner Justa G.
Guido's land, two adjoining lots, part commercial, with
a combined area of 22,655 square meters, situated in
Maypajo, Caloocan, Rizal, just outside the north
Manila boundary, on the main street running from this
city to the north. Four grounds are adduced in support
of the petition, to wit:
(1) That the respondent RPA (Rural Progress
Administration) acted without jurisdiction or corporate
power in filling the expropriation complaint and has no
authority to negotiate with the RFC a loan of
P100,000 to be used as part payment of the value of
the land.
(2) That the land sought to be expropriated is
commercial and therefore excluded within the purview
of the provisions of Act 539.
(3) That majority of the tenants have entered with the
petitioner valid contracts for lease, or option to buy at
an agreed price, and expropriation would impair those
existing obligation of contract.
(4) That respondent Judge erred in fixing the
provisional value of the land at P118,780 only and in
ordering its delivery to the respondent RPA.
We will take up only ground No. 2. Our conclusion on
this branch of the case will make superfluous a
decision on the other questions raised.
Sections 1 and 2 of Commonwealth Act No. 539,
copied verbatim, are as follows:
SECTION 1. The President of the Philippines is
authorized to acquire private lands or any interest
therein, through purchaser or farms for resale at
reasonable prices and under such conditions as he
may fix to theirbona fide tenants or occupants or to
private individuals who will work the lands themselves
and who are qualified to acquire and own lands in the
SEC. 2. The President may designated any
department, bureau, office, or instrumentality of the
National Government, or he may organize a new
agency to carry out the objectives of this Act. For this
purpose, the agency so created or designated shall
be considered a public corporation.
The National Assembly approved this enactment on
the authority of section 4 of Article XIII of the
Constitution which, copied verbatim, is as follows:
The Congress may authorize, upon payment of just
compensation, the expropriation of lands to be
subdivided into small lots and conveyed at cost to
What lands does this provision have in view? Does it
comprehend all lands regardless of their location,
nature and area? The answer is to be found in the
explanatory statement of Delegate Miguel Cuaderno,
member of the Constitutional Convention who was the
author or sponsor of the above-quoted provision. In
this speech, which was entitled "Large Estates and
Trust in Perpetuity" and is transcribed in full in
Aruego's "The Framing of the Philippine Constitution,"
Mr. Cuaderno said:
There has been an impairment of public tranquility,
and to be sure a continuous of it, because of the
existence of these conflicts. In our folklore the
oppression and exploitation of the tenants are vividly
referred to; their sufferings at the hand of the
landlords are emotionally pictured in our drama; and
even in the native movies and talkies of today, this
theme of economic slavery has been touched upon.
In official documents these same conflicts are
narrated and exhaustively explained as a threat to
social order and stability.
But we should go to Rizal inspiration and illumination
in this problem of this conflicts between landlords and
tenants. The national hero and his family were
persecuted because of these same conflicts in
Calamba, and Rizal himself met a martyr's death
because of his exposal of the cause of the tenant
class, because he would not close his eyes to
oppression and persecution with his own people as
I ask you, gentlemen of the Convention, knowing this
as you do and feeling deeply as you must feel a
regret over the immolation of the hero's life, would you
not write in the Constitution the provision on large
estates and trust in perpetuity, so that you would be
the very instrument of Providence to complete the
labors of Rizal to insure domestic tranquility for the
masses of our people?
If we are to be true to our trust, if it is our purpose in
drafting our constitution to insure domestic tranquility
and to provide for the well-being of our people, we
cannot, we must fail to prohibit the ownership of large
estates, to make it the duty of the government to
break up existing large estates, and to provide for
their acquisition by purchase or through expropriation
and sale to their occupants, as has been provided in
the Constitutions of Mexico and Jugoslavia.
No amendment was offered and there was no debate.
According to Dean Aruego, Mr. Cuaderno's resolution
was readily and totally approved by the Convention.
Mr. Cuaderno's speech therefore may be taken as
embodying the intention of the framers of the organic
law, and Act No. 539 should be construed in a
manner consonant with that intention. It is to be
presumed that the National Assembly did not intend
to go beyond the constitutional scope of its powers.
There are indeed powerful considerations, aside from
the intrinsic meaning of section 4 of Article XIII of the
Constitution, for interpreting Act No. 539 in a
restrictive sense. Carried to extremes, this Act would
be subversive of the Philippine political and social
structure. It would be in derogation of individual rights
and the time-honored constitutional guarantee that no
private property of law. The protection against
deprivation of property without due process for public
use without just compensation occupies the forefront
positions (paragraph 1 and 2) in the Bill for private
use relieves the owner of his property without due
process of law; and the prohibition that "private
property should not be taken for public use without
just compensation" (Section 1 [par. 2], Article III, of
the Constitution) forbids necessary implication the
appropriation of private property for private uses (29
C.J.S., 819). It has been truly said that the assertion
of the right on the part of the legislature to take the
property of and citizen and transfer it to another, even
for a full compensation, when the public interest is not
promoted thereby, is claiming a despotic power, and
one inconsistent with very just principle and
fundamental maxim of a free government. (29 C.J.S.,
Hand in hand with the announced principle, herein
invoked, that "the promotion of social justice to insure
the well-being and economic security of all the people
should be the concern of the state," is a declaration,
with which the former should be reconciled, that "the
Philippines is a Republican state" created to secure to
the Filipino people "the blessings of independence
under a regime of justice, liberty and democracy."
Democracy, as a way of life enshrined in the
Constitution, embraces as its necessary components
freedom of conscience, freedom of expression, and
freedom in the pursuit of happiness. Along with these
freedoms are included economic freedom and
freedom of enterprise within reasonable bounds and
under proper control. In paving the way for the
breaking up of existing large estates, trust in
perpetuity, feudalism, and their concomitant evils, the
Constitution did not propose to destroy or undermine
the property right or to advocate equal distribution of
wealth or to authorize of what is in excess of one's
personal needs and the giving of it to another.
Evincing much concern for the protection of property,
the Constitution distinctly recognize the preferred
position which real estate has occupied in law for
ages. Property is bound up with every aspects of
social life in a democracy as democracy is conceived
in the Constitution. The Constitution owned in
reasonable quantities and used legitimately, plays in
the stimulation to economic effort and the formation
and growth of a social middle class that is said to be
the bulwark of democracy and the backbone of every
progressive and happy country.
The promotion of social justice ordained by the
Constitution does not supply paramount basis for
untrammeled expropriation of private land by the
Rural Progress Administration or any other
government instrumentality. Social justice does not
champion division of property or equality of economic
status; what it and the Constitution do guaranty are
equality of opportunity, equality of political rights,
equality before the law, equality between values given
and received on the basis of efforts exerted in their
production. As applied to metropolitan centers,
especially Manila, in relation to housing problems, it is
a command to devise, among other social measures,
ways and means for the elimination of slums,
shambles, shacks, and house that are dilapidated,
overcrowded, without ventilation. light and sanitation
facilities, and for the construction in their place of
decent dwellings for the poor and the destitute. As will
presently be shown, condemnation of blighted urban
areas bears direct relation to public safety health,
and/or morals, and is legal.
In reality, section 4 of Article XIII of the Constitution is
in harmony with the Bill of Rights. Without that
provision the right of eminent domain, inherent in the
government, may be exercised to acquire large tracts
of land as a means reasonably calculated to solve
serious economic and social problem. As Mr. Aruego
says "the primary reason" for Mr. Cuaderno's
recommendation was "to remove all doubts as to the
power of the government to expropriation the then
existing landed estates to be distributed at costs to
the tenant-dwellers thereof in the event that in the
future it would seem such expropriation necessary to
the solution of agrarian problems therein."
In a broad sense, expropriation of large estates, trusts
in perpetuity, and land that embraces a whole town,
or a large section of a town or city, bears direct
relation to the public welfare. The size of the land
expropriated, the large number of people benefited,
and the extent of social and economic reform secured
by the condemnation, clothes the expropriation with
public interest and public use. The expropriation in
such cases tends to abolish economic slavery,
feudalistic practices, and other evils inimical to
community prosperity and contentment and public
peace and order. Although courts are not in
agreement as to the tests to be applied in determining
whether the use is public or not, some go far in the
direction of a liberal construction as to hold that public
advantage, and to authorize the exercise of the power
of eminent domain to promote such public benefit,
etc., especially where the interest involved are
considerable magnitude. (29 C.J.S., 823, 824. See
also People of Puerto Rico vs. Eastern Sugar
Associates, 156 Fed. [2nd], 316.) In some instances,
slumsites have been acquired by condemnation. The
highest court of New York States has ruled that slum
clearance and reaction of houses for low-income
families were public purposes for which New York
City Housing authorities could exercise the power of
condemnation. And this decision was followed by
similar ones in other states. The underlying reasons
for these decisions are that the destruction of
congested areas and insanitary dwellings diminishes
the potentialities of epidemic, crime and waste,
prevents the spread of crime and diseases to
unaffected areas, enhances the physical and moral
value of the surrounding communities, and promotes
the safety and welfare of the public in general.
(Murray vs. La Guardia, 52 N.E. [2nd], 884; General
Development Coop. vs. City of Detroit, 33 N.W.
[2ND], 919; Weizner vs. Stichman, 64 N.Y.S. [2nd],
50.) But it will be noted that in all these case and
others of similar nature extensive areas were involved
and numerous people and the general public
benefited by the action taken.
The condemnation of a small property in behalf of 10,
20 or 50 persons and their families does not inure to
the benefit of the public to a degree sufficient to give
the use public character. The expropriation
proceedings at bar have been instituted for the
economic relief of a few families devoid of any
consideration of public health, public peace and order,
or other public advantage. What is proposed to be
done is to take plaintiff's property, which for all we
know she acquired by sweat and sacrifice for her and
her family's security, and sell it at cost to a few
lessees who refuse to pay the stipulated rent or leave
the premises.
No fixed line of demarcation between what taking is
for public use and what is not can be made; each
case has to be judge according to its peculiar
circumstances. It suffices to say for the purpose of
this decision that the case under consideration is far
wanting in those elements which make for public
convenience or public use. It is patterned upon an
ideology far removed from that consecrated in our
system of government and embraced by the majority
of the citizens of this country. If upheld, this case
would open the gates to more oppressive
expropriations. If this expropriation be constitutional,
we see no reason why a 10-, 15-, or 25-hectare farm
land might not be expropriated and subdivided, and
sold to those who want to own a portion of it. To make
the analogy closer, we find no reason why the Rural
Progress Administration could not take by
condemnation an urban lot containing an area of
1,000 or 2,000 square meters for subdivision into tiny
lots for resale to its occupants or those who want to
build thereon.
The petition is granted without special findings as to
Moran, C.J., Feria, Bengzon, Padilla and
Montemayor, JJ., concur.
Paras and Reyes, JJ., concur in the result.
G.R. No. L-45748 April 5, 1939
People vs. Vera Reyes
The defendant was charged in the Court of First
Instance of Manila by the assistant city fiscal with a
violation of Act No. 2549, as amended by Acts Nos.
3085 and 3958. The information alleged that from
September 9 to October 28, 1936, and for the some
time after, the accused, in his capacity as president
and general manager of the Consolidated Mines,
having engaged the services of Severa Velasco de
Vera as stenographer, at an agreed salary of P35 a
month willfully and illegally refused to pay the salary
of said stenographer corresponding to the above-
mentioned period of time, which was long due and
payable, in spite of her repeated demands.
The accused interposed a demurrer on the ground
that the facts alleged in the information do not
constitute any offense, and that even if they did, the
laws penalizing it are unconstitutional. After the
hearing, the court sustained the demurrer, declaring
unconstitutional the last part of section 1 of Act No.
2549 as last amended by Act No. 3958 for the reason
that it violates the constitutional prohibition against
imprisonment for debt, and dismissed the case.
The last part of Section 1 of Act No. 2549, as
last amended by section 1 of Act No. 3958
considers as illegal the refusal of an
employer to pay when he can do so, the
salaries of his employers or laborers on the
15th or last day of every month or on
Saturday of every week, with only two days
extension, and the non-payment of the
salary within the period specified is
considered as a violation of the law. The
same act exempts from criminal
responsibility the employer who, having
failed to pay the salary, should prove
satisfactorily that it was impossible to make
such payment.
The fiscal appealed from said order. In this appeal the
Solicitor-General contends that the court erred in
declaring Act No. 3958 unconstitutional, and in
dismissing the cause.
Whether or not the last part of Sec. 1 of Act No. 2594
as amended by Act No. 3958 is constitutional and
We hold that the last part of section 1 of Act No. 2549,
as last amended by section 1 of Act No. 3958, is
valid. We do not believe that this constitutional
provision has been correctly applied in this case. A
close perusal of the last part of section 1 of Act No.
2549, as amended by section 1 of Act No. 3958, will
show that its language refers only to the employer
who, being able to make payment, shall abstain or
refuse to do so, without justification and to the
prejudice of the laborer or employee. An employer so
circumstanced is not unlike a person who defrauds
another, by refusing to pay his just debt. In both cases
the deceit or fraud is the essential element
constituting the offense. The first case is a violation of
Act No. 3958, and the second is estafa punished by
the Revised Penal Code. In either case the offender
cannot certainly invoke the constitutional prohibition
against imprisonment for debt.
Police power is the power inherent in a government to
enact laws, within constitutional limits, to promote the
order, safety, health, morals, and general welfare of
society. In the exercise of this power the Legislature
has ample authority to approve the disputed portion of
Act No. 3958 which punishes the employer who,
being able to do so, refuses to pay the salaries of his
laborers or employers in the specified periods of time.
Undoubtedly, one of the purposes of the law is to
suppress possible abuses on the part of employers
who hire laborers or employees without paying them
the salaries agreed upon for their services, thus
causing them financial difficulties. Without this law,
the laborers and employees who earn meager
salaries would be compelled to institute civil actions
which, in the majority of cases, would cost them more
than that which they would receive in case of a
decision in their favor.
We hold that the last part of section 1 of Act No. 2549,
as last amended by section 1 of Act No. 3958, is
valid, and we reverse the appealed order with
instructions to the lower court to proceed with the trial
of the criminal case until it is terminated, without
special pronouncement as to costs in this instance.
So ordered.
Avancea, C. J., Villa-Real, Diaz, Laurel, Concepcion,
and Moran, JJ., concur
P.I. Manufacturing v. P.I. Manufacturing
Supervisors and Foremen Association
GR No. 167217
4 February 2008
Sandoval-Gutierrez, J.
Facts: RA 6640 was signed into law on 10 December
1987, providing, among others, an increase in the
statutory minimum wage and salary rates of
employees and workers in the private sector. It
provides that the minimum wage of workers and
employees in the private sector shall be increased by
P10, except those outside Manila who shall receive
an increase of P11, provided those that are already
receiving above the minimum wage shall receive an
increase of P10. PI Manufacturing Supervisors and
Foremen Association (PIMASUFA) entered into a new
CBA whereby the supervisors were granted an
increase of P625 per month and the foremen, P475
per month. The increases were made to retroact to 12
May 1987, or prior to the passage of RA 6640. The
application of said CBA resulted in a wage distortion,
which prompted the PIMASUFA together with the
National Labor Union to file a case against PIMA for
violation of RA 6640. PIMA asseverates that the The
Company and Supervisors and Foremen Contract
absolves, quitclaims, and releases the company for
any monetary claim that the supervisors and the
foremen may have previous to the signing of the
agreement on 17 December 1987.
The Labor Arbiter ruled in favor of PIMASUFA and
ordered PIMA to give the PIMASUFA members wage
increases equivalent to 13.5% of their basic pay. The
CA affirmed, but raised the wage increase to 18.5%.
1. W/N the PIMASUFA, by signing The
Company and Supervisors and Foremen
Contract, has waived any benefit it may have
under RA 6640.
2. W/N the 13.5% increase in the supervisors
and foremens basic salary should be
increased to 18.5% to correct the wage
distortion brought about by the
implementation of RA 6640.
1. NO. The increase resulting from any wage
distortion brought about by the implementation of the
new minimum wage law is not waivable.
2. NO. Although there was a wage distortion, the
same was cured or remedied when PIMASUFA
entered into the 1987 CBA with PIMA after the
effectivity of RA 6640. The 1987 CBA increased the
monthly salaries of the supervisors by P626 and
P475, which re-establishes the gap not only between
supervisors and foremen but also between them and
the rank-and-file employees. Such gap as re-
established by virtue of the CBA is more than a
substantial compliance with RA 6640. Moreover,
requiring PIMA to pay 18.5%, over and above the
negotiated wage increases provided under the 1987
CBA, is highly unfair and oppressive to the former.
A CBA constitutes the law between the parties when
freely and voluntarily entered into. It was not shown
that PIMASUFA was coerced or forced by PIMA to
sign the 1987 CBA. All of its 13 officers signed the
CBA with the assistance of NLU. They signed it fully
aware of the passage of RA 6640. The duty to
bargain requires that the parties deal with each other
with open and fair minds. PIMASUFA cannot invoke
the beneficial provisions of the 1987 CBA but
disregard the concessions it voluntarily extends to
Quitclaims by laborers are generally frowned upon as
contrary to public policy and are held to be ineffective
to bar recovery for the full measure of the workers
rights. The reason for the rule is that the employer
and the employee do not stand on the same footing.
Article 1149 of the Civil Code states that: When the
law sets, or authorizes the setting of a minimum wage
for laborers, and a contract is agreed upon by which a
laborer accepts a lower wage, he shall be entitled to
recover the deficiency.
According to RA 6727, wage distortion is a situation
where an increase in prescribed wage results in the
elimination or severe contraction of intentional
quantitative differences in wage or salary rates
between and among employee groups in an
establishment as to effectively obliterate the
distinctions embodied in such wage structure based
on skills, length of service, or other logical bases of
differentiation. Otherwise stated, wage distortion
means the disappearance or virtual disappearance of
pay differentials between lower and higher positions
in an enterprise because of compliance with a wage
The goal of collective bargaining is the making of
agreements that will stabilize business conditions and
fix fair standards of working conditions
People vs. Pomar
G.R. No. L-22008November 3, 1924
On the 26th day of October, 1923, the prosecuting
attorney of the City of Manila presented a complaint in
the Court of First Instance, accusing the defendant of
a violation of section 13 in connection with section 15
of Act No. 3071 of the Philippine Legislature. The
complaint alleged that the defendant being the
manager and person in charge of La Flor de la
Isabela (a tobacco factory) failed and refused to pay
Macaria Fajardo (employed as cigar maker) the sum
of P80 to which she was entitled as her regular wages
on time of delivery and confinement by reason of
pregnancy depite and over the demands to do so.
To said complaint, the defendant demurred, alleging
that the facts therein contained did not constitute an
offense. The demurrer was overruled, whereupon the
defendant answered and admitted at the trial all of the
allegations contained in the complaint, and contended
that the provisions of said Act No. 3071, upon which
the complaint was based were illegal, unconstitutional
and void.
Upon a consideration of the facts charged in the
complaint and admitted by the defendant, the
Honorable C. A. Imperial, judge, found the defendant
guilty of the alleged offense described in the
complaint, and sentenced him to pay a fine of P50, in
accordance with the provisions of section 15 of said
Act, to suffer subsidiary imprisonment in case of
insolvency, and to pay the costs. From that sentence
the defendant appealed.
Whether or not the provisions of sections 13 and 15 of
Act No. 3071 are a reasonable and lawful exercise of
the police power of the state.
The provisions of section 13, of Act No. 3071 of the
Philippine Legislature, are unconstitutional and void,
in that they violate and are contrary to the provisions
of the first paragraph of section 3 of the Act of
Congress of the United States of August 29, 1916.
Said section 13 was enacted by the Legislature of the
Philippine Islands in the exercise of its supposed
police power, with the praiseworthy purpose of
safeguarding the health of pregnant women laborers
in "factory, shop or place of labor of any description,"
and of insuring to them, to a certain extent,
reasonable support for one month before and one
month after their delivery. It has been said that the
particular statute before us is required in the interest
of social justice for whose end freedom of contract
may lawfully be subjected to restraint.
The right to liberty includes the right to enter into
contracts and to terminate contracts. One citizen
cannot be compelled to give employment to another
citizen, nor can anyone be compelled to be employed
against his will. The Act of 1893, now under
consideration, deprives the employer of the right to
terminate his contract with his employee. Clearly,
therefore, the law has deprived, every person, firm, or
corporation owning or managing a factory, shop or
place of labor of any description within the Philippine
Islands, of his right to enter into contracts of
employment upon such terms as he and the
employee may agree upon. The law creates a term in
every such contract, without the consent of the
parties. Such persons are, therefore, deprived of their
liberty to contract. The constitution of the Philippine
Islands guarantees to every citizen his liberty and one
of his liberties is the liberty to contract.
Every law for the restraint and punishment of crimes,
for the preservation of the public peace, health, and
morals, must come within this category. But the state,
when providing by legislation for the protection of the
public health, the public morals, or the public safety, is
subject to and is controlled by the paramount
authority of the constitution of the state, and will not
be permitted to violate rights secured or guaranteed
by that instrument or interfere with the execution of
the powers and rights guaranteed to the people under
their law the constitution.
The police power of the state is a growing and
expanding power. But that power cannot grow faster
than the fundamental law of the state, nor transcend
or violate the express inhibition of the people's law
the constitution. If the people desire to have the police
power extended and applied to conditions and things
prohibited by the organic law, they must first amend
that law.
It will also be noted from an examination of said
section 13, that it takes no account of contracts for the
employment of women by the day nor by the piece.
The law is equally applicable to each case. It will
hardly be contended that the person, firm or
corporation owning or managing a factory, shop or
place of labor, who employs women by the day or by
the piece, could be compelled under the law to pay for
sixty days during which no services were rendered.
The rule in this jurisdiction is, that the contracting
parties may establish any agreements, terms, and
conditions they may deem advisable, provided they
are not contrary to law, morals or public policy. (Art.
1255, Civil Code.)
Therefore, the sentence of the lower court is hereby
revoked, the complaint is hereby dismissed, and the
defendant is hereby discharged from the custody of
the law, with costs de oficio. So ordered.
Street, Malcolm, Avancea, Villamor, Ostrand and
Romualdez, JJ., concur
79 PHIL. 40
G.R. No. L-1206 October 30, 1947
ASSOCIATION, respondent.
This is an appeal by certiorari under Rule 44 of the
Rules of Court interposed by the petitioner Manila
Electric Company against the decision of July 15,
1946 of the Court of Industrial Relations, which reads
as follows:
Although the practice of the company, according to
the manifestations of counsel for said company, has
been to grant one day vacationwith pay to every
workingman who had worked for seven
consecutivedays including Sundays, the Court
considers justified the oppositionpresented by the
workingmen to the effect that they need Sundays
andholidays for the observance of their religion and
for rest. The Court,therefore, orders the respondent
company to pay 50 per cent increasefor overtime
work done on ordinary days and 50 per cent increase
for work done during Sundays and legal holidays
irrespective of the numberof days they work during
the week.
The appellant contends that the said decision of the
Court of IndustrialRelations is against the provision of
section 4, Commonwealth Act No. 444, which reads
as follows:
No person, firm, or corporation, business
establishment or place or center of labor shall compel
an employee or laborer to work during Sundays and
legal holidays, unless he is paid an additionalsum of
at least twenty-five per centum of his regular
remuneration: Provided, however, Thast this
prohibition shall not apply to publicutilities performing
some public service such as supplying gas,electricity,
power, water, or providing means of transportationor
After a careful consideration of the issue involved in
this appeal, we are of the opinion and so hold that the
decision of the Court of Industrial Relations is
erroneous od contrary to the clear and express
provision of the above quoted provisions. The power
of theCourt to settle industrial disputes between
capital and labor, which include the fixing of wages of
employees or laborers, granted by the general
provisions of section 1 of Commonwealth Act No.
103, has beenrestricted by the above quoted special
provisions of Commonwealth ActNo. 444, in the
sense that public utilities supplying electricity,gas,
power, water, or providing means of transportation or
communication may compel their employees or
laborers to work duringSundays and legal holidays
without paying them an additional compensation of
not less than 25 per cent of their regular remuneration
on said days.
Since the provisions of the above quoted section 4,
are plain and unambiguous and convey a clear and
definite meaning, there is no need of resorting to the
rules of statutory interpretation orconstruction in order
to determine the intention of the Legislature.Said
section 1 consists of two parts: the first, which is the
enactmentclause, prohibits a person, firm or
corporation, business establishment,or place or
center of labor from compelling an employee or
laborer towork during Sundays and legal holidays,
unless the former pays thelatter an additional sum of
at least twenty five per centum of his regular
remuneration; and the second part, which is an
exception,exempts public utilities performing some
public service, such assupplying gas, electricity,
power, water or providing means oftransportation or
communication, from the prohibition establishedin the
enactment clause. As the appellant is a public utility
that supplies the electricity and provides means of
transportation to the public, it is evident that the
appellant is exempt from the qualifiedprohibition
established in the enactment clause, and may compel
its employees or laborers to work during Sundays and
legal holidays without paying them said extra
To hold that the exception or second part of section 4,
CommonwealthAct No. 444, only exempts public
utilities mentioned therein from the prohibition to
compel employees or laborers to work during
Sundaysand legal holidays, but not from the
obligation to pay them an extraor additional
compensation for compelling them to work during
thosedays, is to make the exception meaningless or a
superfluity, thatis, an exception to a general rule that
does not exist, because theprohibition in the
enactment clause is not an absolute prohibitionto
compel a laborer or employee to work during Sundays
and legal holidays. The prohibition to compel a
laborer or employee to workduring those days is
qualified by the clause "unless he is paid anadditional
sum of at least twenty five per centum of his regular
remuneration," which is inseparable from the
prohibition whichthey qualify and of which they are a
part and parcel. The secondportion of section 1 is in
reality an exception and not a provisoalthough it is
introduced by the word "provided"; and it is
elementalthat an exception takes out of an enactment
something which wouldotherwise be part of the
subject matter of it.
To construe section 4, Commonwealth Act No. 444,
as exempting public utilities, like the appellant, from
the obligation to pay the additional remuneration
required by said section 4 should they compel their
employees or laborers to work on Sundays and
legalholidays, would not make such exception a class
legislation, violative of the constitutional guaranty of
equal protectionof the laws (section 1 [1] Art. III of our
Constitution). For itis a well-settled rule in
constitutional law that a legislation which affects with
equal force all persons of the same class and
notthose of another, is not a class legislation and
does not infringesaid constitutional guaranty of equal
protection of the laws, if thedivision into classes is not
arbitrary and is based on differenceswhich are
apparent and reasonable. (Magonn vs. Illinois Trust
Savings Bank, 170 N. S., 283, 294;
State vs. Garbroski, 111 Iowa, 496; 56 L. R. A., 570.)
And it is evident that the division made by section 4,
of Commonwealth Act No. 444, of persons, firms, and
corporations into two classes: one composed of public
utilities performing somepublic service such as
supplying gas, electricity, power, water orproviding
means of transportation; and another composed of
persons,firms, and corporations which are not public
utilities and do notperform said public service , is not
arbitrary and is based ondifferences which are
apparent and reasonable.
The division is not arbitrary, and the basis thereof is
reasonable. Public utilities exempted from the
prohibition set forth in the enactment clause of section
4, Commonwealth Act No. 444, are required to
perform a continuous service including Sundays
andlegal holidays to the public, since the public good
so demands,and are not allowed to collect an extra
charge for services performed on those days; while
the others are not required to do so and are free to
operate or not their shops, business, or industries on
Sundays and legal holidays. If they operate
andcompel their laborers to work on those days it is
but just andnatural that they should pay an extra
compensation to them, because it is to be presumed
that they can make money or business by operating
on those days even if they have to pay such extra
remuneration. It would be unfair for the law to compel
publicutilities like the appellant to pay an additional or
extra compensation to laborers whom they have to
compel to work duringSundays and legal holidays, in
order to perform a continuous service to the public. To
require public utilities performingservice to do so,
would be tantamount to penalize them forperforming
public service during said days in compliance withthe
requirement of the law and public interest.
The conclusion on which the dissenting opinion is
based, which is alsosubstantially the basis of the
resolution of the lower court, is that "As to them
[referring to public utilities like the petitioner] section4
of Commonwealth Act No. 444 may be considered as
not having been enacted at all. . . . Therefore, when
there is a labor dispute as in the present case, and
the dispute is submitted to the Court of Industrial
Relations for decision or settlement, the court is free
to providewhat it may deem just and more beneficial
to the interested parties,and that freedom to settle
and decide the case certainly includesthe power to
grant additional compensation to workers who work
onSundays and holidays. The general power granted
by section 1, 4, and13 of Commonwealth Act No. 103,
are not affected in any way or senseby section 4 of
Commonwealth Act No. 444."
This conclusion finds no support in law, reason or
logic. It is a well settled rule of statutory construction
adopted by courts of last resort in the States that if
one statute enacts some thing in general terms,and
afterwards another statute is passed on the same
subject, whichalthough expressed in affirmative
language introduces special conditions or restrictions,
the subsequent statute will usually be considered
asrepealing by implication the former regarding the
matter covered by the subsequent act; and more
specially so when the latter act is expressed in
negative terms , as where for example it prohibits a
certain thing for being done, or where it declares that
a given act shall be performed in a certain manner
and not otherwise. (See Black on Interpretation of
Laws, 2d ed., p. 354, and Sutherland, Statutory
Construction, 3d ed., Vol. 1, section 1922, and cases
therein cited.)
In accordance with this rule, the provision of
Commonwealth Act No. 103 which confers upon the
Court of Industrial Relations power to settle dispute
between employers and employees in general,
including those relating to compulsion of laborers to
work on Sundays and legalholidays and additional
compensation for those working on those days,should
be considered as impliedly repealed by section 4 of
Act No. 444,which limits or restricts the minimum of
the additional compensationand specifies the
persons, firms or corporation who may be requered to
pay said compensation. That is, that the Court of
Industrial Relations may, under the provision of said
section 4, order a person, firm orcorporation or
business establishment or place or center of labor
whocompel an employee or laborer to work on
Sundays and legal holidays,to pay him an additional
compensation of at least 25 per centum of his regular
remuneration; but said court can not require public
utilities performing public service mentioned therein to
pay saidextra compensation to laborers and
employees required by them towork on Sundays and
legal holidays, because the necessity of publicservice
so requires.lawphil.net
It is evident that the principal purpose of the
Legislature in enactingsaid section 4, is not only to
restrict the general power of the Court of Industrial
Relations granted by Act No. 103, to fix the
minimumadditional compensation which an employer
may be required to pay a laborer compelled to work
on those days, but principally to exemptpublic utilities
affected with public interest, from the payment ofsuch
additional compensation. If it were the intention of the
lawmakersin enacting section 4 of the Act No. 444 to
fix the limit of the minimum of additional
compensation of laborers working on those days,
withoutexempting the public utilities, that is, leaving
intact the general power of the court to require the
public utilities to pay said additional compensation,
the law would have only provided, in substance, that
allemployers are prohibited from compelling their
laborers to work onSundays and legal holidays
without paying them an additional compensationof not
less than 50 per cent of their regular remuneration.
That the intention of the Legislature is to exempt the
public utilitiesunder consideration from the prohibition
set forth in the enactmentclause of section 4, Act No.
444, is supported by the provision ofsection 19 of Act
No. 103. As amended this section provides "that with
exception of employers engaged in the operation of
public services orin the business coupled with a public
interest, employers will notbe allowed to engage the
services of the strike breakers within fifteendays after
the declaration of the strike; which shows a contrario
sensu that public utilities performing public services
are permitted to engage the services of strike
breakers within fifteen days, that is,immediately upon
the declaration of the strike. The same public interest,
the reason of the exception in the above quoted
provision, underlies the exception provided in section
4, of Act No. 444.
Therefore, the ruling of the Court of Industrial
Relations quoted in the first part of this decision
appealed from, being contrary to law, is set aside. So
Paras, Pablo, Hilado, Bengzon, Briones, Padilla, and
Tuason, JJ., concur.
G.R. No. L-10107 February 4, 1916
Cerezo vs. Atlantic Gulf & Pacific Company
Jorge Ocumen (plaintiffs son and only means of
support) was an employee of the defendant as a day
laborer on the 8th of July, 1913, assisting in laying
gas pipes on Calle Herran in the City of Manila. The
digging of the trench was completed both ways from
the cross-trench in Calle Paz, and the pipes were laid
therein up to that point. The men of the deceased's
gang were filling the west end, and there was no work
in the progress at the east end of the trench. Shortly
after the deceased entered the trench at the east end
to answer a call of nature, the bank caved in, burying
him to his neck in dirt, where he died before he could
be released. It has not been shown that the deceased
had received orders from the defendant to enter the
trench at this point; nor that the trench had been
prepared by the defendant as a place to be used as a
water-closet; nor that the defendant acquiesced in the
using of this place for these purposes. At the time of
the accident the place where the deceased's duty of
refilling the trench required him to be was at the west
end. There is no contention that there was any danger
whatever in the refilling of the trench.
The plaintiff insists that the defendant was negligent
in failing to shore or brace the trench at the place
where the accident occurred. While, on the other
hand, the defendant urges (1) that it was under no
obligation, in so far as the deceased was concerned,
to brace the trench, in the absence of a showing that
the soil was of a loose character or the place itself
was dangerous, and (2) that although the relation of
master and servant may not have ceased, for the time
being, to exist, the defendant was under no duty to
the deceased except to do him no intentional injury,
and to furnish him with a reasonably safe place to
Judgment was entered in a favor of the plaintiff for the
sum of P1,250, together with interest and costs.
Defendant appealed.
Whether or not the plaintiff has the right to recover
based on the Employers' Liability Act (Act No. 1874)
or the Civil Code.
Act No. 1874 is essentially a copy of the
Massachusetts Employers' Liability Act, it having been
originally enacted in that jurisdiction in 1887. The
Massachusetts statute was "copied verbatim, with
some variations of detail, from the English statute.
We agree with the Supreme Court of Massachusetts
that the Act should be liberally construed in favor of
employees. The main purpose of the Act was to
extend the liability of employers and to render them
liable in damages for certain classes of personal
injuries for which it was thought they were liable under
the law prior to the passage of the Act.
We do not doubt that it was, prior to the passage of
Act No. 1874 and still is, the duty of the employer in
this jurisdiction to perform those duties, in reference
to providing reasonably safe places, and safe and
suitable ways, works, and machinary, etc., So, to this
extent, the first subsection of section 1 of the Act is
simply declaratory of the law as it stood previous to
the enactment. Standing in this form, it is quite clear
that it was not intended that all rights to compensation
and of action against employers by injured employees
or their representatives must be brought under be
governed by the Act.
Assuming that the excavation for the gas pipe is
within the category of "ways, works, or machinery
connected with the used in the business of the
defendant, " we are of the opinion that recovery
cannot be had under the Act for the reason that, as
we have indicated, the deceased was at a place
where he had no right to be at the time he met his
death. His work did not call him there, nor is it shown
that he was permitted there tacitly or otherwise. Under
the Anglo-American law the applicable to such a set
of facts is that the master is not responsible, under
the Employers' Liability Act, for accidents to his
employees when they are outside the scope of their
employment for purpose of their own.
The case under consideration does not fall within the
exceptions of Art 1105 of the Civil code. Mentioned.
After providing a reasonably safe place in and about
which the deceased was required to work, the
defendant's liability was then limited to those events
which could have been foreseen. Article 1902
provides that a person who, by an act or omission
causes damage to another when there is fault or
negligence shall be obliged to repair the damage so
done. Article 1903 after providing for the liability of
principals for the acts of their employees, agents, or
these for whom they are otherwise responsible,
provides that such liability shall cease when the
persons mentioned therein prove that they employed
all the diligence of a good father of a family to avoid
the damage. We have then, on the one hand,
nonliability of an employer for events which could not
be foreseen (article 1105), and where he has
exercised the care of a good father of a family (article
1903), and, on the other hand, his liability where fault
or negligence may be attributed to him (article 1902).
The cause of Ocumen's death was not the weight of
the earth which fell upon him, but was due to
suffocation. The accident was of a most unusual
character. Experience and common sense
demonstrate that ordinarily no danger to employees is
to be anticipated from such a trench as that in
question. The fact that the walls had maintained
themselves for a week, without indication of their
giving way, strongly indicates that the necessity for
bracing or shoring the trench was remote. To require
the company to guard against such an accident as the
one in question would virtually compel it to shore up
every foot of the miles of trenches dug by it in the city
of Manila for the gas mains. Upon a full consideration
of the evidence, we are clearly of the opinion that
ordinary care did not require the shoring of the trench
walls at the place where the deceased met his death.
The event properly comes within the class of those
which could not be foreseen; and, therefore, the
defendant is not liable under the Civil Code.
Effect upon the Law in this country
The act was not intended to curtail the any of the
rights which an employee had under the pre-existing
law. Under the act, the defense of contributory
negligence would defeat an action for damages.
Having reached the conclusions above set forth, it is
unnecessary to inquire into the right of the plaintiff to
bring and maintain this action.
For the foregoing reasons the judgment appealed
from is reversed and the complaint dismissed, without
costs. So ordered.
Arellano, C.J., Torres, Johnson and Araullo, JJ.,
G.R. No. 96169 September 24, 1991
On October 15, 1990, the Regional Board of the
National Capital Region issued Wage Order No.
NCR-01, increasing the minimum wage by P17.00
daily in the National Capital Region. The Trade Union
Congress of the Philippines (TUCP) moved for
reconsideration; so did the Personnel Management
Association of the Philippines (PMAP). ECOP
On October 23, 1990, the Board issued Wage Order
No. NCR01-A, amending Wage Order No. NCR-01. It
provides that all workers and employees in the private
sector in the National Capital Region already
receiving wages above the statutory minimum wage
rates up to one hundred and twenty-five pesos
(P125.00) per day shall also receive an increase of
seventeen pesos (P17.00) per day.
ECOP appealed to the National Wages and
Productivity Commission contending that the board's
grant of an "across-the-board" wage increase to
workers already being paid more than existing
minimum wage rates (up to P125.00 a day) as an
alleged excess of authority. ECOP further alleges that
under the Republic Act No. 6727, the boards may
only prescribe "minimum wages," not determine
"salary ceilings." ECOP likewise claims that Republic
Act No. 6727 is meant to promote collective
bargaining as the primary mode of settling wages,
and in its opinion, the boards can not preempt
collective bargaining agreements by establishing
On November 6, 1990, the Commission promulgated
an Order, dismissing the appeal for lack of merit. On
November 14, 1990, the Commission denied
reconsideration. ECOP then, elevated the case via
petition for review on certiorari to the Supreme Court.
The main issue in this case is whether Wage Order
No. NCR-01-A providing for new wage rates, as well
as authorizing various Regional Tripartite Wages and
Productivity Boards to prescribe minimum wage rates
for all workers in the various regions, and for a
National Wages and Productivity Commission to
review, among other functions, wage levels
determined by the boards is valid.
The Supreme Court ruled in favor of the National
Wages and Productivity Commission and Regional
Tripartite Wages and Productivity Board-NCR, Trade
Union Congress of the Philippines and denied the
petition of ECOP.
The Supreme Court held that Republic Act No. 6727
was intended to rationalize wages, first, by providing
for full-time boards to police wages round-the-clock,
and second, by giving the boards enough powers to
achieve this objective. The Court is of the opinion that
Congress meant the boards to be creative in resolving
the annual question of wages without labor and
management knocking on the legislature's door at
every turn.
The Court's opinion is that if Republic No. 6727
intended the boards alone to set floor wages, the Act
would have no need for a board but an accountant to
keep track of the latest consumer price index, or
better, would have Congress done it as the need
arises, as the legislature, prior to the Act, has done so
for years. The fact of the matter is that the Act sought
a "thinking" group of men and women bound by
statutory standards. The Court is not convinced that
the Regional Board of the National Capital Region, in
decreeing an across-the-board hike, performed an
unlawful act of legislation. It is true that wage-firing,
like rate-fixing, constitutes an act Congress; it is also
true, however, that Congress may delegate the power
to fix rates provided that, as in all delegations cases,
Congress leaves sufficient standards. As this Court
has indicated, it is impressed that the above-quoted
standards are sufficient, and in the light of the floor-
wage method's failure, the Court believes that the
Commission correctly upheld the Regional Board of
the National Capital Region.
G.R. No. 71813 July 20, 1987
Abella vs. NLRC
Ricardo Dionele, Sr. (private respondent) has been a
regular farm worker since 1949 in Hacienda Danao-
Ramona located in Ponteverde, Negros Occidential.
Said farm land was leased to Rosalina Abella
(petitioner) for a period of ten (10) years, renewable
for another ten years.
Upon the expiration of her leasehold rights, petitioner
dismissed Ricardo and another co-employee.
Private respondents filed a complaint against the
petitioner at the Ministry of Labor and Employment for
overtime pay, illegal dismissal and reinstatement with
backwages. After presenting their respective
evidence, the Labor Arbiter ruled that the dismissal is
warranted by the cessation of business, but granted
the private respondents separation pay.
Petitioner filed a motion for reconsideration but the
same was denied. Hence, the present petition.
Whether or not private respondents are entitled to
separation pay.
The petition is devoid of merit.
Article 284 of the Labor code provides that the
employer may also terminate the employment of any
employee due to the installation of labor-saving
devices, redundancy, retrenchment to prevent losses
or the closing or cessation of operation of the
establishment or undertaking unless the closing is for
the purpose of circumventing the provisions of this
title, by serving a written notice on the workers and
the Ministry of Labor and Employment at least month
before the intended date thereof. In case of
termination due to the installation of labor-saving
devices or redundancy, the worker affected thereby
shall be entitled to a separation pay equivalent to at
least his one month pay or to at least one month pay
for every year of service, whichever is higher. In case
of retrenchment to prevent losses and in cases of
closure or cessation of operations of establishment or
undertaking not due to serious business losses or
financial reverses, the separation pay shall be
equivalent to one month pay or at least one-half
month pay for every year of service whichever is
higher. A fraction of at least six months shall be
considered one whole year."
The purpose of the said article is obvious: the
protection of the workers whose employment is
terminated because of the closure of establishment
and reduction of personnel. Without said law,
employees like private respondents in the case at bar
will lose the benefits to which they are entitled for the
number of years served. Although they were
absorbed by the new management of the hacienda, in
the absence of any showing that the latter has
assumed the responsibilities of the former employer,
they will be considered as new employees and the
years of service behind them would amount to
In any event, it is well-settled that in the
implementation and interpretation of the provisions of
the Labor Code and its implementing regulations, the
workingmans welfare should be the primordial and
paramount consideration.
The instant petition is hereby dismissed and the
decision of the Labor Arbiter and the Resolution of the
Ministry of Labor and Employment are hereby
G.R. No. 78782 December 1, 1987
Euro-Linea Phil, Inc. vs. NLRC
Petitioner Euro-Linea Phil, Inc hired private
respondent Pastoral as shipping expediter on a
probationary basis for a period of six months. Prior to
hiring by petitioner, Pastoral had been employed by
Fitscher Manufacturing Corporation also as shipping
expediter. On 4 February 1984, Pastoral received a
memorandum terminating his probationary
employment in view of his failure to meet the
performance standards set by the company. Pastoral
filed a complaint for illegal dismissal against
petitioner. On 19 July 1985, the Labor Arbiter found
petitioner guilty of illegal dismissal. Petitioner
appealed the decision to the NLRC on 5 August 1985
but the appeal was dismissed. Hence the petition for
review seeking to reverse and set aside the resolution
of public respondent NLRC, affirming the decision of
the Labor Arbiter, which ordered the reinstatement of
complainant with six months backwages.
Whether or not the National Labor Relations
Commission acted with grave abuse of discretion
amounting to excess of jurisdiction in ruling against
the dismissal of the respondent, a temporary or
probationary employee, by his employer.
Although a probationary or temporary employee has a
limited tenure, he still enjoys the constitutional
protection of security of tenure.
Furthermore, what makes the dismissal highly
suspicious is the fact that while petitioner claims that
respondent was inefficient, it retained his services
until the last remaining two weeks of the six months
probationary employment. No less important is the
fact that private respondent had been a shipping
expediter for more than one and a half years before
he was absorbed by petitioner. It therefore appears
that the dismissal in question is without sufficient
It must be emphasized that the prerogative of
management to dismiss or lay-off an employee must
be done without abuse of discretion, for what is at
stake is not only petitioner's position but also his
means of livelihood. The right of an employer to freely
select or discharge his employees is subject to
regulation by the State, basically in the exercise of its
paramount police power.
In the instant case, it is evident that the NLRC
correctly applied Article 282 in the light of the
foregoing and that its resolution is not tainted with
unfairness or arbitrariness that would amount to grave
abuse of discretion or lack of jurisdiction (Rosario
Brothers Inc. v. Ople, 131 SCRA 73 [1984]).
PREMISES CONSIDERED, the petition is
DISMISSED for lack of merit, and the resolution of the
NLRC is affirmed. SO ORDERED.
G.R. No. L-58639 August 12, 1987
Ramon Pilones, private respondent, was employed on
February 16, 1978 on a probationary period of
employment for six (6) months with petitioner CRP.
After said period, he underwent medical examination
for qualification as regular employee but the results
showed that he is suffering from PTB minimal.
Consequently, he was informed of the termination of
his employment by respondent since his illness was
not curable within 6 months.
Pilones complained against his termination before the
Ministry of Labor which dismissed the same. The
dismissal was reversed by the public respondent who
ordered the reinstatement and payment of back
Granting reinstatement, the public respondent argues
that Pilones was already a permanent employee at
the time of his dismissal and so was entitled to
security of tenure. The alleged ground for his removal,
to wit, pulmonary tuberculosis minimal, was not
certified as incurable within six months as to justify his
separation and that the petitioner should have first
obtained a clearance, as required by the regulations
then in force, for the termination of his employment.
CRP claims that the private respondent was still on
probation at the time of his dismissal and so had no
security of tenure. The dismissal was necessary for
the protection of the public health, as he was handling
ingredients in the processing of soft drinks which were
being sold to the public.
ISSUE: Whether the dismissal was proper.
No. The dismissal was not proper. Under Article 282
of the Labor Code, an employee who is allowed to
work after a probationary period shall be considered a
regular employee. Pilones was already on permanent
status when he was dismissed on August 21, 1978, or
four days after he ceased to be a probationer. As
such, he could validly claim the security of tenure
guaranteed to him by the Constitution and the Labor
The petitioner claims it could not have dismissed the
private respondent earlier because the x-ray
examination was made only on August 17, 1978, and
the results were not immediately available. That
excuse is untenable. We note that when the petitioner
had all of six months during which to conduct such
examination, it chose to wait until exactly the last day
of the probation period.
The applicable rule on the ground for dismissal
invoked against him is Section 8, Rule I, Book VI, of
the Rules and Regulations Implementing the Labor
Code which states that the employer shall not
terminate his employment unless there is a
certification by a competent public health authority
that the disease is of such nature or at such a stage
that it cannot be cured within a period of six (6)
months even with proper medical treatment. The
record does not contain the certification required by
the above rule. Hence, dismissal was illegal.
It is also worth noting that the petitioners application
for clearance to terminate the employment of the
private respondent was filed with the Ministry of Labor
only on August 28, 1978, or seven days after his
dismissal. As the NLRC has repeatedly and correctly
said, the prior clearance rule (which was in force at
that time) was not a trivial technicality. It required
not just the mere filing of a petition or the mere
attempt to procure a clearance but that the said
clearance be obtained prior to the operative act of
Although we must rule in favor of his reinstatement,
this must be conditioned on his fitness to resume his
work, as certified by competent authority.
**Another Doctrine under Sec4 of Labor Code on
Concern for the lowly worker who, often at the mercy
of his employers, must look up to the law for his
protection. Fittingly, that law regards him with
tenderness and even favor and always with faith and
hope in his capacity to help in shaping the nations
future. It is error to take him for granted. He deserves
our abiding respect. How society treats him will
determine whether the knife in his hands shall be a
caring tool for beauty and progress or an angry
weapon of defiance and revenge. The choice is
obvious, of course. If we cherish him as we should,
we must resolve to lighten the weight of centuries of
exploitation and disdain that bends his back but does
not bow his head.
G.R. No. L-2779 October 18, 1950
DANIEL SANCHEZ, ET AL., plaintiffs-appellees,
AL., defendants-appellants.
This case originated in the Municipal Court of Manila
upon a complaint filed on March 9, 1948, by the
herein appellees as plaintiffs, against the herein
appellants as defendants, for the sum of P2,210 plus
interest, which plaintiffs claimed as one month
advance pat due them. On April 28, 1948, the parties
entered into a stipulation of facts upon which said
municipal court rendered judgment for the plaintiffs.
Upon denial of their motion for reconsideration of this
judgment, the defendants filed an appeal to the Court
of First Instance of Manila, wherein the parties
submitted the case upon the same facts agreed upon
in the Municipal Court. On October 2, 1948, the Court
of First Instance of Manila rendered its decision
holding for plaintiffs, as follows:
Wherefore judgment is hereby rendered
1. Ordering defendant Material Distributors, Inc. to
pay plaintiff Enrique Ramirez the sum of P360 and
plaintiff Juan Ramirez the sum of P250 with legal
interest on each of the said sums from the date of the
filing of the complaint in the Municipal Court of Manila
until the date of full payment thereof; and
2. Ordering defendant Harry Lyons Construction, Inc.
to pay plaintiff Daniel Sanchez the sum of P250, and
plaintiff Mariano Javier, Venancio Diaz, Esteban
Bautista, Faustino Aquillo, Godofredo Diamante,
Marcial Lazaro, Ambrosio de la Cruz, and Marcelino
Maceda the sum of P150 each, with legal interest on
each of the said sums from the date of the filing of the
complaint in the Municipal Court of Manila until the
date of full payment thereof.
One half of the costs is to be paid by Material
Distributors, Inc. and the other half by Harry Lyons
Construction, Inc.
From this judgment, defendants filed an appeal with
this court purely upon a question of law. The
stipulation of facts entered into by the parties on April
28, 1948, is as follows:
Come now the plaintiffs and the defendants, by their
respective undersigned attorneys and to this
Honorable Court, respectfully submit the following
stipulation of facts:
1. That the plaintiffs were respectively employed as
Name Date of Position Salary
Enrique Ramirez .............. 12/16/46 Warehouseman
P450 a mo.
Juan Ramirez ................... do do 250 a mo.
NOTE. The salary of Enrique Ramirez was later
reduced to P360 per month. This was the amount he
was receiving at the time of his dismissal.
Daniel Sanchez ................ 1/1/47 Carpenter- P250 a
Mariano Javier ................. ....do..................
Guard................. 5 a day
Venancio Diaz ................. ....do..................
do....................... 5 a day
Esteban Bautista ............ ....do..................
do....................... 5 a day
Faustino Aquillo ............ ....do..................
do....................... 5 a day
Godofredo Diamante ..... ....do..................
do....................... 5 a day
Marcial Lazaro ................ ....do..................
do....................... 5 a day
Ambrosio de la Cruz ..... ....do..................
do....................... 5 a day
Marcelino Macada ........ ....do..................
do....................... 5 a day
as per contracts of employment, copies of which are
attached to defendants' answer marked Exhibits 1 to
11 inclusive
2. That in said contracts of employment the plaintiff
agreed as follows:
"I accept the foregoing appointment, and in
consideration thereof I hereby agree that such
employment may be terminated at any time, without
previous notice, and I further agree that salary and
wages, shall be computed and paid at the rate
specified up to the date of such termination.
"Also in consideration of such employment I hereby
expressly waive the benefit of article 302 of the Code
of Commerce and that of any other law, ruling, or
custom which might require notice of discharge or
payment of salary or wages after date of the
termination of such employment."
3. That the plaintiffs were dismissed by the
defendants on December 31, 1947 without one
months' previous notice.
4. That each of the plaintiffs demanded payment of
one month's salary from the defendants and that the
latter refused to pay the same.
WHEREFORE, it is respectfully prayed that judgment
on the foregoing stipulation of facts be rendered by
this Honorable Court.
The points in issue herein are: first, whether plaintiffs,
both those paid on a monthly and daily basis, are
entitled to the benefit granted in article 302 of the
Code of Commerce; and secondly, if they are so
entitled, was their waiver of such benefits legal and
Article 302 of the Code of Commerce reads as
ART. 302. In cases in which no special time is fixed in
the contracts of service, any one of the parties thereto
may cancel it, advising the other party thereof one
month in advance.
The factor or shop clerk shall be entitled, in such
case, to the salary due for said month.
It is a clear doctrine, as gleaned from the provision of
the law and settled jurisprudence, 1 that in a
mercantile contract of service in which no special time
is fixed, any one of the parties may cancel said
contract upon giving of a one-month notice, called
a mesada, to the other party. The law gives an added
proviso that in the case of factors or shop clerks,
these shall be entitled to salary during this one month
of standing notice. In any case, the one-month notice
must be given to any employee, whether factor, shop
clerk or otherwise, so long as the two conditions
concur, namely, that no special time is fixed in the
contract of service, and that said employee is a
commercial employee. And when such notice is not
given under these conditions, not only the factor or
shop clerk but any employee discharged without
cause, is entitled to indemnity which may be one
month's salary. 2
In the instant case, there lies no doubt that plaintiffs
are commercial employees of appellant corporations,
rendering service as warehousemen, carpenter-
foreman and guards. There is likewise no doubt as
can be seen from the contracts of employment
submitted as exhibits, that no special time has been
fixed in the contracts of services between plaintiffs-
appellees and defendants-appellants. The stated
computation or manner of payment, whether monthly
or daily, does not represent nor determine a special
time of employment. Thus, a commercial employee
may be employed for one year and yet receive his
salary on the daily or weekly or monthly or other
Appellants allege that the use of the word "temporary"
in the contracts of services of some of the plaintiffs
shows that their employment was with a term, and the
term was "temporary, on a day to day basis." The
record discloses that this conclusion is unwarranted.
The contracts simply say "You are hereby
employed as temporary guard with a compensation at
the rate of P5 a day . . . ." The word "temporary" as
used herein does not mean the special time fixed in
the contracts referred to in article 302 of the Code of
Commerce. The daily basis therein stipulated is for
the computation of pay, and is not necessarily the
period of employment. Hence, this Court holds that
plaintiffs-appellants come within the purview of article
302 of the Code of Commerce.
Now, as the second question, namely, the validity of
plaintiffs' waiver of the benefits given them by said
article 302. This court holds that such a waiver, made
in advance, is void as being contrary to public policy.
Granting that the "mesada" given in article 302 of the
Code of Commerce, is for the bilateral benefit of both
employer and employee, nevertheless, this does not
preclude the finding that a waiver of such "mesada" in
advance by the employee is contrary to public policy.
Public policy, with regard to labor, is clearly stated in
article II, section 5, of the Philippine Constitution,
which reads
The promotion of social justice to insure the well-
being and economic security of all the people should
be the concern of the State.
and article XIV, section 6, which reads
The State shall afford protection to labor, especially to
working women and minors, and shall regulate the
relations between land-owner and tenant, and
between labor and capital in industry and in
agriculture. . . .
Article 302 of the Code of Commerce must be applied
in consonance with these provisions of our
constitution. In the matter of employment bargaining,
there is no doubt that the employer stands on higher
footing than the employee. First of all, there is greater
supply than demand for labor. Secondly, the need for
employment by labor comes from vital and even
desperate, necessity. Consequently, the law must
protect labor, at least, to the extent of raising him to
equal footing in bargaining relations with capital and
to shield him from abuses brought about by the
necessity for survival. It is safe to presume therefore,
that an employee or laborer who waives in advance
any benefit granted him by law does so, certainly not
in his interest or through generosity but under the
forceful intimidation of urgent need, and hence, he
could not have so acted freely and voluntarily.
For all the foregoing, this court hereby affirms the
decision of the lower court, with costs against
Ozaeta, Paras, Feria, Pablo, Tuason, Bengzon and
Reyes, JJ., concur.
G.R. No. L-48926 December 14, 1987
Sosito vs. Aguinaldo Development Corp.
Petitioner Manuel Sosito was employed in 1964 by
the private respondent, a logging company, and was
in charge of logging importation, with a monthly salary
of P675.00, 1 when he went on indefinite leave with
the consent of the company on January 16, 1976.
On July 20, 1976, the private respondent, through its
president, announced a retrenchment program and
offered separation pay to employees in the active
service as of June 30, 1976, who would tender their
resignations not later than July 31, 1976. The
petitioner decided to accept this offer and so
submitted his resignation on July 29, 1976, "to avail
himself of the gratuity benefits" promised. However,
his resignation was not acted upon and he was never
given the separation pay he expected. The petitioner
complained to the Department of Labor, where he
was sustained by the labor arbiter. The company was
ordered to pay Sosito the sum of P 4,387.50,
representing his salary for six and a half months. On
appeal to the National Labor Relations Commission,
this decision was reversed and it was held that the
petitioner was not covered by the retrenchment
Whether or not the petitioner is covered by the
retrenchment program and thus entitled to separation
It is clear from the memorandum that the offer of
separation pay was extended only to those who were
in the active service of the company as of June 30,
1976. It is equally clear that the petitioner was not
eligible for the promised gratuity as he was not
actually working with the company as of the said date.
Being on indefinite leave, he was not in the active
service of the private respondent although, if one
were to be technical, he was still in its employ. Even
so, during the period of indefinite leave, he was not
entitled to receive any salary or to enjoy any other
benefits available to those in the active service.
We note that under the law then in force the private
respondent could have validly reduced its work force
because of its financial reverses without the obligation
to grant separation pay. This was permitted under the
original Article 272(a), of the Labor Code, which was
in force at the time. To its credit, however, the
company voluntarily offered gratuities to those who
would agree to be phased out pursuant to the terms
and conditions of its retrenchment program, in
recognition of their loyalty and to tide them over their
own financial difficulties. The Court feels that such
compassionate measure deserves commendation
and support but at the same time rules that it should
be available only to those who are qualified therefore.
We hold that the petitioner is not one of them.
While the Constitution is committed to the policy of
social justice and the protection of the working class,
it should not be supposed that every labor dispute will
be automatically decided in favor of labor.
Management also has its own rights which, as such,
are entitled to respect and enforcement in the interest
of simple fair play. Out of its concern for those with
less privileges in life, this Court has inclined more
often than not toward the worker and upheld his
cause in his conflicts with the employer. Such
favoritism, however, has not blinded us to the rule that
justice is in every case for the deserving, to be
dispensed in the light of the established facts and the
applicable law and doctrine.
WHEREFORE, the petition is DISMISSED and the
challenged decision AFFIRMED, with costs against
the petitioner. SO ORDERED.
Teehankee, C.J., Narvasa, Paras and Gancayco, JJ.,
G.R. No. 73681 June 30, 1988
Colgate Palmolive Philippines, Inc., vs. Ople
On March 1, 1985, the respondent Union filed a
Notice of Strike with the Bureau of Labor Relations
(BLR) on ground of unfair labor practice consisting of
alleged refusal to bargain, dismissal of union
officers/members; and coercing employees to retract
their membership with the union and restraining non-
union members from joining the union.
After efforts at amicable settlement proved unavailing,
the Office of the MOLE, upon petition of petitioner
assumed jurisdiction over the dispute pursuant to
Article 264 (g) of the Labor Code.
In its position paper, the petitioner pointed out that the
infractions committed by the three salesmen fully
convinced the company, after investigation of the
existence of just cause for their dismissal, that their
dismissal was carried out pursuant to the inherent
right and prerogative of management to disciplne
erring employees. Moreover, the petitioner refuted the
unions charge that the membership in union and
refusal to retract precipitated their dismissal was
totally false and amounted to malicious imputation of
union busting. Thre respondent union on hte other
hand assailed its answers to the petitioners position
On August 9,1985, respondent Minister rendered a
decision whichfound no merit in the Union's Complaint
for unfair labor practice allegedly committed by
petitioner and that the the three salesmen, Peregrino
Sayson, Salvador Reynante & Cornelio Mejia, "not
without fault" hence "the company has grounds to
dismiss above named salesmen".
At the same time respondent Minister directly certified
the respondent Union as the collective bargaining
agent for the sales force in petitioner company and
ordered the reinstatement of the three salesmen to
the company on the ground that the employees were
first offenders.
Petitioner filed a Motion for Reconsideration which
was denied by respondent Minister in his assailed
Order, dated December 27, 1985. Hence, this
Whether the respondent Minister committed a grave
abuse of discretion when, notwithstanding his very
own finding that there was just cause for the dismissal
of the three (3) salesmen, he nevertheless ordered
their reinstatement.
The respondent Minister has the power to decide a
labor dispute in a case assumed by him under Art.
264 (g) of the Labor Code.
The order of the respondent Minister to reinstate the
employees despite a clear finding of guilt on their part
is not in conformity with law. Reinstatement is simply
incompatible with a finding of guilt. Where the totality
of the evidence was sufficient to warrant the dismissal
of the employees the law warrants their dismissal
without making any distinction between a first
offender and a habitual delinquent. Under the law,
respondent Minister is duly mandated to equally
protect and respect not only the labor or workers' side
but also the management and/or employers' side. The
law, in protecting the rights of the laborer, authorizes
neither oppression nor self-destruction of the
employer. To order the reinstatement of the erring
employees would in effect encourage unequal
protection of the laws as a managerial employee of
petitioner company involved in the same incident was
already dismissed and was not ordered to be
reinstated. As stated by Us in the case of San Miguel
Brewery vs. National Labor Union, "an employer
cannot legally be compelled to continue with the
employment of a person who admittedly was guilty of
misfeasance or malfeasance towards his employer,
and whose continuance in the service of the latter is
patently inimical to his interest."
WHEREFORE, judgment is hereby rendered
REVERSING and SETTING ASIDE the Order of the
respondent Minister, dated December 27, 1985 for
grave abuse of discretion. However, in view of the fact
that the dismissed employees are first offenders,
petitioner is hereby ordered to give them separation
pay. The temporary restraining order is hereby made
Yap, C.J., Melencio-Herrera, Padilla and Sarmiento,
JJ., concur.
G.R. No. 155421 July 7, 2004
Mendoza vs. Rural Bank of Lucban
On April 25, 1999, the Board of Directors of the Rural
Bank of Lucban, Inc., issued Board Resolution Nos.
99-52 and 99-53, providing that in line with the policy
of the bank to familiarize bank employees with the
various phases of bank operations and further
strengthen the existing internal control system, all
officers and employees are subject to reshuffle of
assignments and that those affected branch
employees are reshuffled to their new assignments
without changes in their compensation and other
On May 3, 1999, in an undated letter addressed to
Daya, the Banks Board Chairman, petitioner Elmer
Mendoza expressed his opinion on the reshuffle
alleging that "his reshuffling is deemed to be a
demotion without any legal basis and thus asking to
be allowed to remain in his position.
On May 10, 1999, Daya replied reitirating that it was
never the intention (of the management) to
downgrade his position in the bank considering that
due compensation is maintained and no future
reduction was intended. It was further reiterated that
the conduct of reshuffle is also a prerogative of bank
On June 7, 1999, petitioner submitted to the bank's
Tayabas branch manager a letter in which he applied
for a leave of absence from work.
On June 21, 1999, petitioner again submitted a letter
asking for another leave of absence for twenty days
effective on the same date.
On June 24, 1999, while on his second leave of
absence, petitioner filed a Complaint before
Arbitration Branch No. IV of the National Labor
Relations Commission (NLRC). The Complaint -- for
illegal dismissal, underpayment, separation pay and
damages -- was filed against the Rural Bank of
Lucban and/or its president, Alejo B. Daya; and its
Tayabas branch manager, Briccio V. Cada. The case
was docketed as NLRC Case SRAB-IV-6-5862-99-
Q.The labor arbiter's June 14, 2000 Decision upheld
petitioner's claims.
On appeal, the NLRC reversed the labor arbiter. In its
July 18, 2001 Resolution. After the NLRC denied his
Motion for Reconsideration, petitioner brought before
the CA a Petition for Certiorari assailing the foregoing
Finding that no grave abuse of discretion could be
attributed to the NLRC, the CA Decision ruled in favor
of the private respondent rural bank.
Whether or not the the petitioner was constructively
dismissed from employment and that the reshuffling
pursuant to Board Res. Nos. 99-52 and 99-53 is a
valid exercise of management prerogative.
The Petition has no merit.
Constructive dismissal is defined as an involuntary
resignation resorted to when continued employment is
rendered impossible, unreasonable or unlikely; when
there is a demotion in rank or a diminution of pay; or
when a clear discrimination, insensibility or disdain by
an employer becomes unbearable to the employee.
Jurisprudence recognizes the exercise of
management prerogatives. For this reason, courts
often decline to interfere in legitimate business
decisions of employers. Indeed, labor laws
discourage interference in employers' judgments
concerning the conduct of their business. The law
must protect not only the welfare of employees, but
also the right of employers.
In the pursuit of its legitimate business interest,
management has the prerogative to transfer or assign
employees from one office or area of operation to
another -- provided there is no demotion in rank or
diminution of salary, benefits, and other privileges;
and the action is not motivated by discrimination,
made in bad faith, or effected as a form of punishment
or demotion without sufficient cause. This privilege is
inherent in the right of employers to control and
manage their enterprise effectively. The right of
employees to security of tenure does not give them
vested rights to their positions to the extent of
depriving management of its prerogative to change
their assignments or to transfer them.
Managerial prerogatives, however, are subject to
limitations provided by law, collective bargaining
agreements, and general principles of fair play and
WHEREFORE, this Petition is DENIED, and the June
14, 2002 Decision and the September 25, 2002
Resolution of the Court of Appeals are AFFIRMED.
Costs against petitioner. SO ORDERED.
Davide, Jr., C.J., (Chairman), Ynares-Santiago,
Carpio, and Azcuna, JJ., concur.
Gelmart Industries Phils., Inc. vs. NLRC
G.R. No. 85668 August 10, 1989
Private respondent Felix Francis started working as
an auto-mechanic for petitioner Gelmart Industries
Phils., Inc. (GELMART) sometime in 1971. As such,
his work consisted of the repair of engines and
underchassis, as well as trouble shooting and
overhauling of company vehicles. He is likewise
entrusted with some tools and spare parts in
furtherance of the work assigned to him.
On April 11, 1987, private respondent was caught by
the security guards taking out of GELMART's
premises one (1) plastic container filled with about 16
ounces of "used' motor oil, without the necessary gate
pass to cover the same as required under
GELMART's rules and regulations which provides that
theft and/or pilferage of company property merits an
outright termination from employment. By reason
thereof, petitioner was placed under preventive
suspension pending investigation for violation of
company rules and regulations on April 13, 1987.
After due investigation, or on May 20, 1987, private
respondent was found guilty of theft of company
property. As a consequence, his services were
Thereafter, private respondent filed a complaint for
illegal dismissal before the NLRC. In a decision dated
February 26, 1988, Labor Arbiter Ceferina J. Diosana
ruled that private respondent was illegally dismissed
and, accordingly, ordered the latter's reinstatement
with full backwages from April 13, 1987 up to the time
of actual reinstatement.
From this decision, GELMART interposed an appeal
with the NLRC. In its decision dated October 21,
1988, the NLRC affirmed with modification the ruling
of Labor Arbiter Diosana.
On December 12, 1988, GELMART filed before this
Court a special civil action for certiorari with a prayer
for the issuance of a temporary restraining order.
On January 18, 1989, this Court, without necessarily
giving due course to the petition, issued a temporary
restraining order enjoining respondents from
enforcing the assailed decision.
Whether or not the NLRC committed a grave abuse of
discretion for rendering a decision that is contrary to
law and existing jurisprudence in ordering the
reinstatement of private respondent to his former
position with payment of backwages.
We find no merit in this petition.
Consistent with the policy of the State to bridge the
gap between the underprivileged workingmen and the
more affluent employers, the NLRC rightfully tilted the
balance in favor of the workingmen and this was
done without being blind to the concomitant right of
the employer to the protection of his property.
On the other hand, without being too harsh to the
employer, and naively liberal to labor, on the other,
the NLRC correctly pointed out that private
respondent cannot totally escape liability for what is
patently a violation of company rules and regulations.
To reiterate, be it of big or small commercial value,
intended to be re-used or altogether disposed of or
wasted, the "used" motor oil still remains, in legal
contemplation, the property of GELMART. As such, to
take the same out of GELMART's premises without
the corresponding gate pass is a violation of the
company rule on theft and/or pilferage of company
In this score, it is very difficult for this Court to discern
grave abuse of discretion on the part of the NLRC in
modifying the appealed decision. The suspension
imposed upon private respondent is a sufficient
penalty for the misdemeanor committed.
Considering that private respondent herein has no
previous derogatory record in his fifteen (15) years of
service with petitioner GELMART the value of the
property pilfered (16 ounces of used motor oil) is very
minimal, plus the fact that petitioner failed to
reasonably establish that non-dismissal of private
respondent would work undue prejudice to the
viability of their operation or is patently inimical to the
company's interest, it is more in consonance with the
policy of the State, as embodied in the Constitution, to
resolve all doubts in favor of labor.
Thus, the penalty of preventive suspension was
sufficient punishment for the violation under the
circumstance and that complainant-appellees
dismissal unwarranted.
WHEREFORE, in view of the foregoing, the petition is
DISMISSED for lack of merit. The, restraining order
issued by this Court on January 18, 1989 enjoining
the enforcement of the questioned decision of the
National Labor Relations Commission is hereby lifted.
No pronouncement as to costs. SO ORDERED.
China Banking Corp., vs. Borromeo
G.R. No. 156515 October 19, 2004
Respondent Mariano M. Borromeo joined the
petitioner Bank on June 1, 1989 as Manager Level 1
assigned at the latters Regional Office in Cebu City.
Subsequently, the respondent was laterally
transferred to Cagayan de Oro City as Branch
Manager of the petitioner Banks branch thereat.
For the years 1989-1995 he was promoted from
Manager Level I to Senior Manager Level II having
consistently received a "highly satisfactory"
performance rating (1989-1990) and a "very good"
performance rating (1991-1995). Finally, in 1996, with
a "highly satisfactory" performance rating, the
respondent was promoted to the position of Assistant
Vice-President, Branch Banking Group for the
Mindanao area effective October 16, 1996.
However, prior to his last promotion and then
unknown to the petitioner Bank, the respondent,
without authority from the Executive Committee or
Board of Directors, approved several DAUD/BP
(Drawn Against Uncollected Deposits/Bills
Purchased) accommodations amounting to
P2,441,375 in favor of certain Joel Maniwan. Such
checks, which are not sufficiently funded by cash, are
generally not honored by banks. Further, such
accommodations may be granted only by a bank
officer upon express authority from its Executive
Committee or Board of Directors.
Upon knowing of this by the bank authorities, Samuel
L. Chiong, First Vice-President and Head-Visayas
Mindanao Division of the petitioner bank issued a
memorandum seeking clarification on issues relative
thereto. In reply, the respondent answered the
queries but nonetheless, accepted full responsibility
for committing an error in judgment, lapses in control
and abuse of discretion. However, respondent
vehemently denied benefiting therefrom. Apology was
accorded by the respondent in relation to this and
subsequently tendered his irrevocable resignation
effective May 31, 1997.
His acts having constituted a violation of the Banks
Code of Ethics, respondent was directed to restitute
the amount of P1,507,736.79 representing 90% of the
total loss of P1,675,263.10 incurred by the petitioner
Bank. However, in view of his resignation and
considering the years of service in the petitioner
Bank, the management earmarked only P836,637.08
from the respondents total separation benefits or pay.
The said amount would be released upon recovery of
the sums demanded from Maniwan in a civil case.
Consequently, the respondent, through counsel,
made a demand on the petitioner Bank for the
payment of his separation pay and other benefits but
the petitioner Bank maintained its position to withhold
the sum earmarked. Thus, the respondent filed with
the National Labor Relations Commission (NLRC),
the complaint for payment of separation pay, mid-year
bonus, profit share and damages against the
petitioner Bank. The Labor Arbiter ruled in favor of the
bank. Respondent appealed to the NLRC but it
affirmed in toto the findings of the Labor Arbiter.
However, the CA upon petition set aside the NLRC
decision and alleged that repondent was denied his
rights to due process. Hence, this petition.
Whether the bank has the prerogative/right to impose
the withholding of respondents benefits as what it
considered the appropriate penalty under the
circumstances pursuant to its company rules and
The petition is meritorious. The petitioner Bank was
left with no other recourse but to impose the ancillary
penalty of restitution in view of his voluntary
separation from the petitioner Bank. It was certainly
within the petitioner Banks prerogative to impose on
the respondent what it considered the appropriate
penalty under the circumstances pursuant to its
company rules and regulations.
It is well recognized that company policies and
regulations are, unless shown to be grossly
oppressive or contrary to law, generally binding and
valid on the parties and must be complied with until
finally revised or amended unilaterally or preferably
through negotiation or by competent authority.
Moreover, management has the prerogative to
discipline its employees and to impose appropriate
penalties on erring workers pursuant to company
rules and regulations.
The petitioner Banks business is essentially imbued
with public interest and owes great fidelity to the
public it deals with. It is expected to exercise the
highest degree of diligence in the selection and
supervision of their employees. As a corollary, and
like all other business enterprises, its prerogative to
discipline its employees and to impose appropriate
penalties on erring workers pursuant to company
rules and regulations must be respected. The law, in
protecting the rights of labor, authorized neither
oppression nor self-destruction of an employer
company which itself is possessed of rights that must
be entitled to recognition and respect.
Significantly, the respondent ids not wholly deprived
of his separation benefits but were merely withheld
and will be released without delay as soon as the
bank has satisfied a judgment in the civil case.
WHEREFORE, the petition is GRANTED. The
Decision dated July 19, 2002 of the Court of Appeals
and its Resolution dated January 6, 2003 in CA-G.R.
Resolution dated October 20, 1999 of the NLRC,
affirming the Decision dated February 26, 1999 of the
Pampanga Bus Company, INC., vs. PAMBUSCO
Employees' Union, Inc.
G.R. No. 46739 September 23, 1939
On May 31, 1939, the Court of Industrial Relations
issued an order, directing the petitioner herein,
Pampanga Bus Company, Inc., to recruit from the
respondent, Pambusco Employees' Union, Inc., new
employees or laborers it may need to replace
members of the union who may be dismissed from
the service of the company, with the proviso that, if
the union fails to provide employees possessing the
necessary qualifications, the company may employ
any other persons it may desire. This order, in
substance and in effect, compels the company,
against its will, to employ preferentially, in its service,
the members of the union.
Whether or not the said order issued by the CIR valid
and not violative of the right of the employer to select
We hold that the court has no authority to issue such
compulsory order.
The general right to make a contract in relation to
one's business is an essential part of the liberty of the
citizens protected by the due-process clause of the
Constitution. The right of the laborer to sell his labor
to such person as he may choose is, in its essence,
the same as the right of an employer to purchase
labor from any person whom it chooses. The
employer and the employee have thus an equality of
right guaranteed by the Constitution.
Section of Commonwealth Act No. 213 confers upon
labor organizations the right "to collective bargaining
with employers for the purpose of seeking better
working and living conditions, fair wages, and shorter
working hours for laborers, and, in general, to
promote the material, social and moral well-being of
their members." This provision in granting to labor
unions merely the right of collective bargaining,
impliedly recognizes the employer's liberty to enter or
not into collective agreements with them. Indeed, we
know of no provision of the law compelling such
agreements. Such a fundamental curtailment of
freedom, if ever intended by law upon grounds of
public policy, should be effected in a manner that is
beyond all possibility of doubt. The supreme
mandates of the Constitution should not be loosely
brushed aside. As held by the Supreme Court of the
United States in Hitchman Coal & Co. vs. Mitchell
(245 U. S., 229; 62 Law. ed., 260, 276):
Thus considered, the order appealed from is hereby
reversed, with costs against the respondent
Pambusco Employees' Union, Inc.
G.R. No. L-6846 July 20, 1955
ET AL., petitioners, vs. ARSENIO C. ROLDAN, ET
AL., respondents.
This is a petition for certiorari to review the Resolution
of the Court of Industrial Relations dated March 31,
1953. Associate Judge Jose S. Bautista of said court,
in his order of February 10, 1953, states the facts of
the case substantially as follows:
The Agricultural Division of the Gregorio Araneta, Inc.,
was established in 1947 with a capital of P200,000.
The total investment in that Division in 1953 was
about P3,000,000. To reduce this overcapitalization,
the Board of Directors felt that it was necessary either
to invite fresh capital from outside or to adopt a
retrenchment policy. When Heacock and Company
refused the invitation to invest in the enterprise, the
Board took the alternative of retrenchment.
The Board decided not to import as much
merchandise as usual. It also reduced credits. All
these plans required a reduction in the volume of
business necessitating likewise a reduction of
personnel and caused the laying off of 17 employees.
The selection of those to be laid off was made by a
technical man and approved by the Board. These
employees were given one month separation pay,
except Nicolas Gonzalez who refused to receive it.
The reorganization of the Agricultural Division was
adopted by unanimous resolution of the Board of
Directors as a consequence of the retrenchment
policy. This was adopted even before the petitioner,
"Gregorio Araneta Employees' Union", was organized
and; consequently, it was never directed against the
union. Judge Bautista adds: ". . . Considering this fact,
and taking into account all the circumstances of this
case, especially the actual reduction of business of
said Division, the court fails to find sufficient
justification for altering the action of the Board of
Directors regarding those employees, who received
their severance pay".
Judge Bautista, however, believed that Gonzales
should not have been separated because his work
was shifted to another employee by the name of
Augusto Achacoso, who was thus overburdened.
Both parties filed their respective motions for
reconsideration with the court en banc. The latter
modified the decision of Associate Judge Bautista in
its resolution of March 31, 1953, prepared by the
Presiding Judge Arsenio C. Roldan and concurred in
by Associate Judges Modesto Castillo and Juan L.
Lantin. The modification consists only in holding that
the laying off of Gonzalez was also legal. Judge
Bautista dissented with regard to the separation of
Gonzalez, giving the same reasons he gave in his
original opinion.
We find no reason for disturbing the decision of the
Court of Industrial Relations, en banc. The laying off
of the 17 employees was due to the retrenchment
policy which the Company had to adopt in order to
reduce the overcapitalization and minimize expenses.
The volume of business was considerably reduced.
It should be noted that the retrenchment policy was
adopted before even the organization of the
petitioning union. It was not, therefore, aimed at the
Union or any of its members for union or labor
activities. It was not an unfair labor practice.
In view of the foregoing, the petition is denied, without
pronouncement as to costs. It is so ordered.
Bengzon, Acting C. J., Padilla, Montemayor, Reyes,
A., Bautista Angelo, Labrador, Concepcion, and
Reyes, J. B. L., JJ., concur.
Philippine Sheet Metal Workers Union vs CIR
G..R. No. L-2028
April 28, 1949
This is a petition for certiorari to review an order of the
Court of Industrial Relations on the ground that the
same was rendered in excess of jurisdiction and with
grave abuse of discretion.
On March 1, 1985, the respondent Union filed a
Notice of Strike with the Bureau of Labor Relations
(BLR) on ground of unfair labor practice consisting of
alleged refusal to bargain, dismissal of union
officers/members; and coercing employees to retract
their membership with the union and restraining non-
union members from joining the union.
The said order was issued of said court involving an
industrial dispute between the respondent company
(a corporation engaged in the manufacture of tin
plates, aluminum sheets, etc.) and its laborers some
of whom belong to the Philippine Sheet Metal
Workers' Union (CLO) and some to the Liberal Labor
The dispute was over certain demands made upon
the company by the laborers, one of the demands,
being for the recall of eleven workers who had been
laid off. Temporarily taken back on certain conditions
pending final determination of the controversy, these
eleven workers were in the end ordered retained in
the decision handed down by the court on February
19, 1947.
The petitioner tried to prove that the 11 laborers were
laid off by the respondent company due to their union
On February 10, 1947, that is, nine days before the
decision came down, filed a motion in the case,
asking for authority to lay off at least 15 workers in its
can department on the ground that the installation and
operation of nine new labor-saving machines in said
department had rendered the services of the said
workers unnecessary.
W/N the firing of the laborers due to their union
activities is valid?
Yes. The right to reduce personnel should, of course,
not be abused. It should not be made a pretext for
easing out laborers on account of their union
activities. But neither should it be denied when it is
shows that they are not discharging their duties in a
manner consistent with good discipline and the
efficient operation of an industrial enterprise.
The petitioner contends that the order complained of
was made with grave abuse of discretion and in
excess of jurisdiction in that it is contrary to the
pronouncement made by the lower court in its
decision in the main case where it disapproved of the
dismissal of eleven workers "with whom the
management is displeased due to their union
activities." It appears, however, that the
pronouncement was made upon a distinct set of facts,
which are different from those found by the court in
connection with the present incident, and that very
decision, in ordering the reinstatement of the eleven
laborers, qualifies the order by saying that those
laborers are to be retained only "until the occurrence
of facts that may give rise to a just cause of their
laying off or dismissal, or there is evidence of
sufficient weight to convince the Court that their
conduct is not satisfactory."
After a careful review of the record, we find that the
Court of Industrial Relations has neither exceeded its
jurisdiction nor committed grave abuse of discretion in
rendering the order complained of. The petition for
certiorari is, therefore, denied, but without costs
against the petitioner for the reasons stated in its
motion to litigate as pauper.
TIONG KING, petitioner,
G.R. No. L-3587
December 21, 1951
Gaw Pun So owned and operated a tailor shop known
as the Army Shirt Factory, located in his own house at
Nos. 231-245 Soler Street, Manila. In January, 1948,
he had a labor dispute with his personnel and,
pending the case in the Court of Industrial Relations,
Gaw Pun So, irked and worried by the incidents of
litigation, thought of dissolving the business and
selling the sewing machines. Tiong King offered to
take over the business by leasing the place and the
sewing machines. The transfer was put in writing.
Tiong King continued the Army Shirt Factory from the
month of February with the same employees had by
Gaw Pun So. This transfer was known to the
personnel, so much so that the latter, as petitioner in
the pending dispute in the Court of Industrial
Relations, prayed that Tiong King be included as a
respondent. In due time, the National Tailors
Association entered that all cases were terminated
against the respondents. This agreement was duly
approved by the Court of Industrial Relations.
On April 27, 1948, Tiong King filed a petition in the
Court of Industrial Relations Case No. 117-V-3,
alleging that since he operated his shop in February,
1948, he had continually suffered losses; that as there
remained only very little of the capital originally
invested, and that he was definitely closing the shop
on May 30, 1948. Tiong King accordingly prayed that
he be allowed to close his tailor shop and business
from six o'clock in the afternoon of May 29, 1948. On
May 29, 1948, Presiding Judge Arsenio C. Roldan of
the Court of Industrial Relations issued an order
enjoining Tiong King not to close his factory and not
to dismiss, suspend or lay off any laborer or employee
without previous authority of said court.
Upon petitioner for reconsideration filed by counsel for
Tiong King, the Court of Industrial Relations
promulgated a resolution dated May 27, 1949,
allowing Tiong King to close his business and shop,
subject to the condition that, upon reopening the
same, his former personnel would be taken back.
Upon motion for reconsideration filed by counsel for
the National Tailor's Association, the Court of
Industrial Relations, promulgated a resolution dated
October 31, 1949, reaffirming their stand on the
resolution of the Court of Industrial Relations under
date of July 1, 1949.
The present appeal by certiorari was taken by Tiong
King against the last resolution of the Court of
Industrial Relations.
Whether he was the owner or operator thereof and
had the right to file the petition in the Court of
Industrial Relations to close the tailors shop?
Upon this point, it is only sufficient to recall that the
National Tailors Association entered into a stipulation
with Tiong King alone whereby they agreed that all
cases against the former owners of the business were
terminated. That Tiong King was conceded to be the
owner and operator of the army shirt factory at the
time his petition to close it was filed, is conclusively
borne out by the fact that Presiding Judge Roldan in
his decision of January 13, 1949, ordered Tiong King,
and not Gaw Pun So, to pay the salaries and wages
of the personnel.
It is contended, however, that "If at all the court has
approved of the agreement between the National
Tailors' Association and Mr. Tiong King it was
because 'this arrangement is a very good solution
to the present conflict as it is advantageous not only
to the union but also the management, and, is in
consonance with the contract entered into between
the management and the new workers." This
contention is followed with the remark that the
approval of said agreement did not include a finding
that Tiong King was either the owner or the lessee of
the Army Shirt Factory. We are unable to agree. In
entering into the agreement with the National Tailors
Association, Tiong King acted in his own behalf,
regardless of the former owners of the business.
Indeed, it was covenanted that all the cases against
the latter were deemed terminated. Considerations of
fair play and justice demand that Tiong King be given
the full legal effect of said agreement which before the
sanction of the Court of Industrial Relations.
There being no question that Tiong King's capital
invested in the Army Shirt Factory was almost
exhausted at the time of the filing of his petition to
close it, said petition must necessity be granted. It is
admitted by all the Judges of the Court of Industrial
Relations that an employer may close his business,
provided the same is done in good faith and is due
beyond his control. To rule otherwise, would be
oppressive and inhuman.
Wherefore, reversing the resolution of the Court of
Industrial Relations dated October 31, 1949, we
hereby affirm the resolution of said court dated May
27, 1949. So ordered without costs.
Bengzon, Montemayor, Jugo, and Bautista Angelo,
JJ., concur.
G.R. No. L-20987 June 23, 1965
(PLASLU) ET AL., petitioners, vs. CEBU
AL., respondents.
REYES, J.B.L., J.:
Petition for review of an order of the Court of industrial
Relations of December 8, 1962 denying a motion of
Petitioners Union and individual members thereof to
reopen CIR Case No. 241-V (2), decided March 17,
The petitioners had originally instituted the case in the
Court of Industrial Relations to secure an order
directing the respondent Cebu Portland Cement
Company to pay overtime compensation and
differentials to the individual petitioners, for work
performed as security guards on Saturdays after the
enactment of the Forty Hours a Week Law (Rep. Act
1880), starting from March 22, 1958, when the
Company stopped paying overtime compensation for
work on Saturdays even if done in excess of the 40
weekly hours of work prescribed in said Republic Act.
The Company resisted the claim, alleging that
petitioners had no cause of action because they were
not covered by the law invoked, as implemented by
Executive Order No. 251.
At the hearing, the parties submitted a stipulation of
facts; and on March 17, 1960 the Industrial Court
issued an order finding that, pursuant to the opinion of
the Civil Service Commissioner, dated August 23,
1957, and that of the Executive Secretary, dated
October 23, 1957, security guards are not within the
coverage of Republic Act No. 1880 (Forty Hours a
Week Law), and are not entitled to overtime
compensation. This order of the hearing judge was
affirmed, and reconsideration thereof denied, by the
court en banc on May 10, 1960.
Over two years later, on April 3, 1962, petitioners
herein, through new counsel, made it of record that
their former attorney had not been authorized by them
to enter into the so-called stipulations of facts in the
case, and particularly that said counsel had not been
authorized to stipulate, as he did, that the individual
petitioners were required by the Company to Work 56
hours a week "due to the nature of their services and
in the interest of public service," which petitioners
termed a stipulation of legal conclusions.
On April 5, 1962, petitioners, by their new counsel,
filed a petition to reopen case No. 241-V(20), alleging
that the order of March 17, 1960 was not in
accordance with law; that the Stipulation of Facts
therein was merely a stipulation of legal conclusions
not binding on petitioners; that the order of dismissal
by the court was based on administrative opinions
that had been since overruled and superseded by
subsequent rulings of the administrative authorities,
particularly that issued on August 23, 1960 by the
Executive Secretary, by authority of the President,
ruling that security guards in government-owned or
controlled corporations discharging proprietary
functions are not excluded from the benefits of the 40-
hour week law (R.A. 1880); that the Auditor General,
by memorandum Circular No. 438 of November 29,
1960, had implemented said ruling of the Executive
Secretary; and that the Supreme Court, in G.R. No. L-
16984, Manila Port Service vs. C.I.R., promulgated
June 30, 1961, had ruled that under Republic Act No.
1880 and Executive Order No. 251 work on Saturday
may be counted for overtime purposes if during the
preceding 5 days (Monday to Friday) the laborers or
employees had worked the required minimum of 40
hours, which was allegedly the case of petitioning
security guards.
Upon opposition of the respondent Company, the
Industrial Court, by order of July 17, 1962, denied the
motion to reopen, reasoning that the order of March
17, 1960 constituted res judicata, and that under the
ruling of this Supreme Court in Pepsi-Cola Bottling
Co. vs. Philippine Labor Organizations, L-3506,
January 31, 1951, a proceeding may, be reopened
only upon grounds coming into existence after the
order rendered by the C.I.R., grounds not already
litigated and decided, and not available to the parties
at the former proceeding.
Their motion to reconsider this last ruling having been
rejected, petitioners brought the case to us for review.
In this appeal, it is insisted, on behalf of the appellant
laborers, that the order of March 17, 1960 now under
appeal was erroneous and unwarranted in law, and
that the Industrial Court exceeded its jurisdiction when
it held that the exemption from the 40-hour week law,
"where the exigencies of the service so require",
applies to security guards, instead of holding that its
application is limited only to workers in offices and
entities performing governmental functions.
Erroneous or not, the order of March 17, 1960 has
long become final and executory, and is beyond our
power to alter. The appellants could have secured a
review of the correctness of this order by seasonable
appeal, which they failed to do for reasons not
apparent in the record. No reason or excuse is given
why they allowed more than two years to elapse
before adopting remedial steps.
The argument that former counsel for the workers had
no authority to stipulate that petitioners were required
to work 56 hours a week without overtime
compensation due to the nature of their work and
duties and in the interest of public service, because
the same is a legal conclusion, is untenable. The
reasons why the petitioners-appellants were required
to work are matters of fact, and within the power of
counsel to stipulate without special authority
(Rodriguez vs. Santos, 55 Phil. 721), not being a
compromise. That the facts as agreed upon were
unfavorable to the clients does not detract from the
binding effect of the stipulation, and it has been
repeatedly held that clients are bound by the acts and
even the mistakes of counsel in procedural technique
(Montes vs. Court of First Instance of Tayabas, 48
Phil. 640; Islas vs. Platon, 47 Phil. 162; Re Filart, 40
Phil. 205).
Appellants lay stress on the last portion of section 17
of Commonwealth Act No. 103 creating the Court of
Industrial Relations and defining its powers. Said legal
precept, invoked here and in the court below, is to the
That at any time during the effectiveness of an award,
order or decision the Court may, on application of an
interested party, and after due hearing alter, modify in
whole or in part, or set aside such award, order or
decision, or reopen any question involved therein.
The difficulty lies in reconciling this provision with the
well established rules of res judicata and the
preclusive effect of final adjudications. It is clear that if
we interpret it is conferring on the C.I.R. unconditional
power to reopen finally adjudicated cases, its
decisions and orders could never, be relied upon as
final; conflicts between capital and labor would be
interminable; and industrial planning would become
The rulings of the Supreme Court have established
the conditions for reopening under section 17 of C.A.
103: if must be upon grounds not already directly or
indirectly litigated, and the grounds must not be
available to the parties in the previous proceedings;
and the reopening must not affect the period already
elapsed at the time the order to be reopened was
Thus, in Pepsi Cola Bottling Co. vs. Philippine Labor
Organization, G.R. No. L-3506, January 31, 1951, this
Court held:
Petitioner invokes Section 17 of Commonwealth Act
No. 103 to the effect that "... at any time during the
effectiveness of an award, order or decision, the
Court may, on application of an interested party, and
after due hearing alter, modify in whole or in part, or
set aside any such award, order or decision, or
reopen any question involved therein." Under this
provision, a proceeding may be reopened only upon
grounds coming into existence after the order or
decision was rendered by the Court of Industrial
Relations, but not upon grounds which had already
been directly or indirectly litigated and decided by said
court, nor upon grounds available to the parties at the
former proceedings and not availed of by any of them.
To hold otherwise may give way to vicious and
vexatious repetition of proceedings.
And in Nahag vs. Roldan, 94 Phil. 88, it was ruled:
While the above section (17) apparently authorizes
the modification of an award at any time during its
effectiveness, there is nothing in its wording to
suggest that such modification may be authorized
even after the order for execution of the award has
already become final, with respect, of course, to the
period that had already elapsed at the time the order
as issued. To read such authority into the law would
make of litigations between capital and labor an
endless affair, with the Industrial Court acting like a
modern Penelope, who puts off her suitors by
unraveling every night what she has woven by day.
Such a result could not have been contemplated by
the Act creating said Court. (Nahag vs. Roldan, 94
Phil. 88, 91)
The main is issue in this appeal is thus reduced to the
point whether, under the rulings heretofore quoted,
appellants have shown new grounds entitling them to
a reopening of C.I.R. Case No. 241-V,(20). We are of
the opinion that they have done so, and that it was
error for the CIR to hold otherwise. In their motion to
reopen the proceedings, as well as in the supporting
memoranda, appellants specifically called attention to
the ruling of the Office of the President, dated August
23, 1960, extending the benefits of the Forty-Hour
Week Law to security guards of government-owned or
controlled corporations performing proprietary
functions; and also to the Memorandum Circular No.
438 of the General Auditing Office calling the attention
of "All Managing Heads and Auditors and/or
Comptrollers of government-owned or controlled
corporations" to the preceding ruling. These executive
rulings apparently superseded those of 1957 upon
which the CIR rested its order denying appellants'
right to extra compensation. There is furthermore the
decision of the Industrial Court, rendered on August
23, 1962, in Case No. 1389-V, Cenon Francisco, et
al. vs. Cebu Portland Cement Co., directing the latter
company to "pay all petitioners security guards their
additional overtime compensation for their Saturday
services from March 22, 1958," contrary to the ruling
of March 17, 1960, review of which is now being
sought. All these rulings came after the order of
March 17, 1960, that denied overtime pay to
appellants herein, and were, therefore, not available
when the appellants' case was originally tried and
submitted. Without in any way anticipating the weight
to be accorded to these subsequent rulings, nor how
they would influence the case of appellants, their
incompatibility with the order of March 17, 1960, that
decided appellants' rights, is apparent, and, therefore,
justify a rehearing under the doctrine of the Pepsi-
Cola case.
Appellee Cebu Portland Cement Company argues
that it was laches for appellants to have delayed their
motion to reopen, and that the facts of appellants'
case differ from those of Case No. 1389-V. Whether
or not the delay was sufficient to constitute laches,
and whether it was inexcusable or not, cannot be
inquired into unless appellants' case is first reopened.
The same can be said about the alleged differences
between their case and Case No. 1389-V.
Of course, as pointed out in Nahag vs.
Roldan, supra the new award, even if favorable to
appellants, must be limited to the period subsequent
to that covered by the order of March 17, 1960.
WHEREFORE, the orders of the Court of Industrial
Relations denying reopening of Case No. 241-V(20)
are revoked and set aside, and the records ordered
remanded to the court of origin for further proceedings
in conformity with this decision. Costs will be taxed
against appellee Cebu Portland Cement Co.
Bengzon, C.J., Bautista Angelo, Concepcion,
Paredes, Dizon, Regala, Makalintal, Bengzon, J.P.,
and Zaldivar, .J.P., concur.
Barrera, J., is on leave.
SERGIO CORPUS, petitioners,
TEODORICO L. RUIZ, as Labor Arbiter and
ROGELIO R. CORIA, respondents.
G.R. No. 73140
May 29, 1987
In August, 1977, herein private respondent Rogelio R.
Coria was hired by herein petitioner Rizal Empire
Insurance Group as a casual employee with a salary
of P10.00 a day. On January 1, 1978, he was made a
regular employee, having been appointed as clerk-
typist, with a monthly salary of P300.00. Being a
permanent employee, he was furnished a copy of
petitioner company's "General Information, Office
Behavior and Other Rules and Regulations." In the
same year, without change in his position-
designation, he was transferred to the Claims
Department and his salary was increased to P450.00
a month. In 1980, he was transferred to the
Underwriting Department and his salary was
increased to P580.00 a month plus cost of living
allowance, until he was transferred to the Fire
Department as filing clerk. In July, 1983, he was
made an inspector of the Fire Division with a monthly
salary of P685.00 plus allowances and other benefits.
On October 15, 1983, private respondent Rogelio R.
Coria was dismissed from work, allegedly, on the
grounds of tardiness and unexcused absences.
Accordingly, he filed a complaint with the Ministry of
Labor and Employment (MOLE), and in a Decision
dated March 14, 1985 (Record, pp. 80-87), Labor
Arbiter Teodorico L. Ruiz reinstated him to his
position with back wages. Petitioner filed an appeal
with the National labor Relations Commission (NLRC)
but, in a Resolution dated November 15, 1985 (Ibid,
pp. 31-32), the appeal was dismissed on the ground
that the same had been filed out of time. Hence, the
instant petition.
Whether or not NLRC committed a grave abuse of
discretion amounting to lack of jurisdiction in
dismissing petitioners appeal on a technicality.
Rule VIII of the Revised Rules of the National Labor
Relations Commission on appeal, provides:
SECTION 1. (a) Appeal. Decision or orders of a
labor Arbiter shall be final and executory unless
appealed to the Commission by any or both of the
parties within ten (10) calendar days from receipt of
notice thereof.
SECTION 6. No extension of period. No motion or
request for extension of the period within which to
perfect an appeal shall be entertained.
The record shows that the employer (petitioner
herein) received a copy of the decision of the Labor
Arbiter on April 1, 1985. It filed a Motion for Extension
of Time to File Memorandum of Appeal on April 11,
1985 and filed the Memorandum of Appeal on April
22, 1985. Pursuant to the "no extension policy" of the
National Labor Relations Commission, aforesaid
motion for extension of time was denied in its
resolution dated November 15, 1985 and the appeal
was dismissed for having been filed out of time.
The Revised Rules of the National Labor Relations
Commission are clear and explicit and leave no room
for interpretation. Moreover, it is an elementary rule in
administrative law that administrative regulations and
policies enacted by administrative bodies to interpret
the law which they are entrusted to enforce, have the
force of law, and are entitled to great respect
(Espanol v. Philippine Veterans Administration, 137
SCRA 314 [1985]).
Under the above-quoted provisions of the Revised
NLRC Rules, the decision appealed from in this case
has become final and executory and can no longer be
subject to appeal.
Even on the merits, the ruling of the Labor Arbiter
appears to be correct; the consistent promotions in
rank and salary of the private respondent indicate he
must have been a highly efficient worker, who should
be retained despite occasional lapses in punctuality
and attendance. Perfection cannot after all be
WHEREFORE, this petition is DISMISSED
Philippine Association of Service Expporters, Inc.
vs. Drilon
G.R. No. 81958 June 30, 1988
The petitioner, Philippine Association of Service
Exporters, Inc. (PASEI), a firm "engaged principally in
the recruitment of Filipino workers for overseas
placement," challenges the Constitutional validity of
Department Order No. 1, Series of 1988, of the
Department of Labor and Employment, in the
WORKERS," and specifically assailed for
"discrimination against males or females;"
that it
"does not apply to all Filipino workers but only to
domestic helpers and females with similar skills;"
and that it is violative of the right to travel. It is held
likewise to be an invalid exercise of the lawmaking
power, police power being legislative, and not
executive, in character.
On May 25, 1988, the Solicitor General, on behalf of
the respondents Secretary of Labor and Administrator
of the Philippine Overseas Employment
Administration, filed a Comment informing the Court
that on March 8, 1988, the respondent Labor
Secretary lifted the deployment ban in the states of
Iraq, Jordan, Qatar, Canada, Hongkong, United
States, Italy, Norway, Austria, and Switzerland. In
submitting the validity of the challenged "guidelines,"
the Solicitor General invokes the police power of the
Philippine State.
Whether the challenged Department Order is a valid
regulation in the nature of a police power measure
under the Constitution.
The concept of police power is well-established in this
jurisdiction. It has been defined as the "state authority
to enact legislation that may interfere with personal
liberty or property in order to promote the general
As defined, it consists of (1) an imposition
of restraint upon liberty or property, (2) in order to
foster the common good. It is not capable of an exact
definition but has been, purposely, veiled in general
terms to underscore its all-comprehensive embrace.
Its scope, ever-expanding to meet the exigencies of
the times, even to anticipate the future where it could
be done, provides enough room for an efficient and
flexible response to conditions and circumstances
thus assuring the greatest benefits.
It finds no specific Constitutional grant for the plain
reason that it does not owe its origin to the Charter.
Along with the taxing power and eminent domain, it is
inborn in the very fact of statehood and sovereignty. It
is a fundamental attribute of government that has
enabled it to perform the most vital functions of
governance. The police power of the State ... is a
power coextensive with self- protection. It may be said
to be that inherent and plenary power in the State
which enables it to prohibit all things hurtful to the
comfort, safety, and welfare of society.
As a general rule, official acts enjoy a presumed
In the absence of clear and convincing
evidence to the contrary, the presumption logically
The petitioner has shown no satisfactory reason why
the contested measure should be nullified. There is
no question that Department Order No. 1 applies only
to "female contract workers,"
but it does not thereby
make an undue discrimination between the sexes. It
is well-settled that "equality before the law" under the
does not import a perfect Identity of
rights among all men and women.
"Protection to labor" does not signify the promotion of
employment alone. What concerns the Constitution
more paramountly is that such an employment be
above all, decent, just, and humane. Under these
circumstances, the Government is duty-bound to
insure that our toiling expatriates have adequate
protection, personally and economically, while away
from home. In this case, the Government has
evidence, an evidence the petitioner cannot seriously
dispute, of the lack or inadequacy of such protection,
and as part of its duty, it has precisely ordered an
indefinite ban on deployment.
This Court understands the grave implications the
questioned Order has on the business of recruitment.
The concern of the Government, however, is not
necessarily to maintain profits of business firms. In
the ordinary sequence of events, it is profits that
suffer as a result of Government regulation. The
interest of the State is to provide a decent living to its
The Government has convinced the Court in this case
that this is its intent. We do not find the impugned
Order to be tainted with a grave abuse of discretion to
warrant the extraordinary relief prayed for.
WHEREFORE, the petition is DISMISSED. No costs.
Yap, C.J., Fernan, Narvasa, Melencio-Herrera, Cruz,
Paras, Feliciano, Gancayco, Padilla, Bidin, Cortes
and Grio-Aquino, JJ., concur.
Gutierrez, Jr. and Medialdea, JJ., are on leave
CBTC Employees Union v. Clave
G.R. No. 49582
January 7, 1986
Article 5: Rules and Regulations
Petitioner Commercial Bank and Trust Company
Employees' Union (CBTC) lodged a complaint with
the Department of Labor, against private respondent
bank (Comtrust) for non-payment of the holiday pay
benefits provided for under Article 95 (now Article 94)
of the Labor Code. Failing to arrive at an amicable
settlement at conciliation level, the parties opted to
submit their dispute for voluntary arbitration.
On 22 April 1976, the Arbitrator handed down an
award on the dispute in favor of petitioner union. The
next day, 23 April 1976, the Department of Labor
released Policy Instructions No. 9, a policy regarding
the implementation of the ten (10) paid legal holidays.
Said bank interposed an appeal to the National Labor
Relations Commission (NLRC), contending that the
Arbitrator demonstrated gross incompetence and/or
grave abuse of discretion when he failed to apply
Policy Instructions No. 9. This appeal was dismissed
on 16 August 1976.
Private respondent then appealed to the Secretary of
Labor. On 30 June 1977, the Acting Secretary of
Labor reversed the NLRC decision. On the principal
issue of holiday pay, the Acting Secretary, guided by
Policy Instructions No. 9, applied the same
retrospectively, among other things.
Whether or not the monthly pay of the covered
employees already includes what Article 94 of the
Labor Code requires as regular holiday pay benefit in
the amount of his regular daily wage.
In excluding the union members the benefits of the
holiday pay law, public respondent predicated his
ruling on Section 2, Rule IV, Book III of the Rules to
implement Article 94 of the Labor Code promulgated
by the then Secretary of Labor and Policy Instructions
No. 9.
In Insular Bank of Asia and America Employees'
Union (IBAAEU) vs. Inciong, this Court's Second
Division, speaking through former Justice Makasiar,
expressed the view and declared that the section and
interpretative bulletin are null and void, having been
promulgated by the then Secretary of Labor in excess
of his rule-making authority.
The questioned Section 2, Rule IV, Book III of the
Integrated Rules and the Secretary's Policy
Instruction No. 9 add another excluded group,
namely, 'employees who are uniformly paid by the
month'. While the additional exclusion is only in the
form of a presumption that all monthly paid
employees have already been paid holiday pay, it
constitutes a taking away or a deprivation which must
be in the law if it is to be valid. An administrative
interpretation which diminishes the benefits of labor
more than what the statute delimits or withholds is
obviously ultra vires.
Ruled in favor of the petitioners. Presidential
Executive Assistant and the Acting Secretary of labor
are set aside, and the award of the Arbitrator
G.R. No. L-69870 November 29, 1988
AND ARTURO L. PEREZ, petitioners,
EUGENIA C. CREDO, respondents.
FACTS: Respondent National Labor Relations
Commission (NLRC), to which the petitioners
appealed, rendered a decision directing NASECO to
reinstate Credo to her former position, or substantially
equivalent position, with six (6) months' backwages
and without loss of seniority rights and other
privileges appertaining thereto.
In NASECO's comment in G.R. No. 70295, it is
belatedly argued that the NLRC has no jurisdiction to
order Credo's reinstatement. NASECO claims that, as
a government corporation (by virtue of its being a
subsidiary of the National Investment and
Development Corporation (NIDC), a subsidiary wholly
owned by the Philippine National Bank (PNB), which
in turn is a government owned corporation), the terms
and conditions of employment of its employees are
governed by the Civil Service Law, rules and
ISSUE: Whether the NLRC has jurisdiction to order
Credos reinstatement.
HELD: On the premise that it is the 1987 Constitution
that governs the instant case because it is the
Constitution in place at the time of decision thereof,
the NLRC has jurisdiction to accord relief to the
parties. As an admitted subsidiary of the NIDC, in turn
a subsidiary of the PNB, the NASECO is a
government-owned or controlled corporation without
original charter.
G.R. No. 98107 August 18, 1997
BENJAMIN C. JUCO, petitioner,
FACTS: Juco was hired as project engineer of NHC
from Nov16, 1970 to May 14, 75. On May 14, he was
separated from the service for having been implicated
in a crime of theft and/or malversation of public funds.
On March25, 1977, Juco filed a complaint for illegal
dismissal against NHC with the Department of Labor.
Labor Arbiter rendered a decision dismissing
complaint on the ground that NLRC had no
jurisdiction over the case.Juco then elevated the case
to NLRC which rendered a decision reversing
decision of Labor Arbiter. NHC appealed before this
SC. On Jan6, 1989, Juco filed with CSC a complaint
for illegal dismissal, with prelim mandatory injunction.
NHC moved for dismissal of complaint on the ground
that CSC has no jurisdiction over case. So, having no
jurisdiction, CSC dismissed the case. Subsequently
Juco also filed with NLRC complaint for illegal
dismissal with prelim mandatory injunction. Labor
Arbiter Caday rendered a decision declaring that
Jucos dismissal was illegal. NHC appealed before
NLRC and later on, NLRC reversed the decision of
Labor Arbiter Caday on the ground of lack of
ISSUE: Whether NLRC or CSC has jurisdiction over
Jucos case.
HELD: Article IX, Section 2 (1) of the 1987
Constitution provides: The civil service embraces all
branches, subdivisions, instrumentalities and
agencies of the Government, including government
owned and controlled corporations with original
In NASECO v NLRC SC had occasion to apply the
present Constitution in deciding whether or not the
employees of NASECO are covered by the Civil
Service Law or the Labor Code notwithstanding that
the case arose at the time when the 1973 Constitution
was still in effect. It was ruled that the NLRC has
jurisdiction over the employees of NASECO on the
ground that it is the 1987 Constitution that governs
because it is the Constitution in place at the time of
the decision. Furthermore, the new phrase "with
original charter" means that government-owned and
controlled corporations refer to corporations chartered
by special law as distinguished from corporations
organized under the Corporation Code. Thus,
NASECO which had been organized under the
general incorporation statute and a subsidiary of the
National Investment Development Corporation, which
in turn was a subsidiary of the Philippine National
Bank, is exluded from the purview of the Civil Service
The National Housing Corporation is a government
owned corporation organized in 1959 in accordance
with Executive Order No. 399, otherwise known as
the Uniform Charter of Government Corporation,
dated January 1, 1959. Its shares of stock are and
have been one hundred percent (100%) owned by the
Government from its incorporation under Act 1459,
the former corporation law. The government entities
that own its shares of stock are the Government
Service Insurance System, the Social Security
System, the Development Bank of the Philippines, the
National Investment and Development Corporation
and the People's Homesite and Housing Corporation.
13 Considering the fact that the NHA had been
incorporated under Act 1459, the former corporation
law, it is but correct to say that it is a government-
owned or controlled corporation whose employees
are subject to the provisions of the Labor Code. This
observation is reiterated in the recent case of Trade
Union of the Philippines and Allied Services (TUPAS)
v. National Housing Corporation, 14 where we held
that the NHA is now within the jurisdiction of the
Department of Labor and Employment, it being a
government-owned and/or controlled corporation
without an original charter. Furthermore, we also held
that the workers or employees of the NHC (now NHA)
undoubtedly have the right to form unions or
employee's organization and that there is no
impediment to the holding of a certification election
among them as they are covered by the Labor Code.
Thus, the NLRC erred in dismissing petitioner's
complaint for lack of jurisdiction because the rule now
is that the Civil Service now covers only government-
owned or controlled corporations with original
charters. 15 Having been incorporated under the
Corporation Law, its relations with its personnel are
governed by the Labor Code and come under the
jurisdiction of the National Labor Relations
SY, as Officer-in-Charge of the Bureau of Labor
Relations, respondents.
FACTS: July 13, 1977. TUPAS filed petition for the
conduct of a certification election with Regional Office
of the DOL to determine exclusive bargaining
representative of workers in NHC. It was claimed that
its members comprised majority of employees of
NHC. Petition dismissed by med-arbiter Jimenez
holding that NHC "being a government-owned and/or
controlled corporation its employees/workers are
prohibited to form, join or assist any labor
organization for purposes of collective bargaining
pursuant to the (IRR) of the Labor Code." From this
order of dismissal, TUPAS appealed to Bureau of
Labor Relations where Dir. Noriel reversed Jimenezs
order of dismissal and ordered the holding of a
certification election. This order was, however, set
aside by OIC Sy in his upon a motion for
reconsideration of NHC. In the instant petition for
certiorari, TUPAS seeks reversal of said reso and
prays that a certification election be held among rank
and file employees of NHC.
ISSUE: Whether NHC employees may or are
prohibited to form, join or assist any labor
organization for purposes of collective bargaining.
HELD: Under the Constitution, the civil service
embraces all branches, subdivisions, instrumentalities
and agencies of the government, including
government-owned or controlled corporations with
original charters. Consequently, the civil service now
covers only government owned or controlled
corporations with original or legislative charters, that
is those created by an act of Congress or by special
law, and not those incorporated under and pursuant
to a general legislation. As We recently held ..., the
situations sought to be avoided by the 1973
Constitution and expressed by this Court in the
National Housing Corporation case ... appear
relegated to relative insignificance by the 1987
Constitutional provision that the Civil Service
embraces government-owned controlled corporations
with original charters and therefore, by clear
implication, the Civil Service does not include
government-owned or controlled corporations which
are organized as subsidiaries of government-owned
or controlled corporations under the general
corporation law.
The workers or employees of NHC undoubtedly have
the right to form unions or employees' organizations.
The right to unionize or to form organizations is now
explicitly recognized and granted to employees in
both the governmental and the private sectors. The
Bill of Rights provides that "(t)he right of the people,
including those employed in the public and private
sectors, to form unions, associations or societies for
purposes not contrary to law shall not be abridged"
This guarantee is reiterated in the second paragraph
of Section 3, Article XIII, on Social Justice and Human
Rights, which mandates that the State "shall
guarantee the rights of all workers to self-
organization, collective bargaining and negotiations,
and peaceful concerted activities, including the right
to strike in accordance with law ...."
Specifically with respect to government employees,
the right to unionize is recognized in Paragraph (5),
Section 2, Article IX B 12 which provides that "(t)he
right to self-organization shall not be denied to
government employees." The rationale of and
justification for this innovation which found expression
in the aforesaid provision was explained by its
proponents as follows: ... The government is in a
sense the repository of the national sovereignty and,
in that respect, it must be held in reverence if not in
awe. It symbolizes the unity of the nation, but it does
perform a mundane task as well. It is an employer in
every sense of the word except that terms and
conditions of work are set forth through a Civil Service
Commission. The government is the biggest employer
in the Philippines. There is an employer-employee
relationship and we all know that the accumulated
grievances of several decades are now beginning to
explode in our faces among government workers who
feel that the rights afforded by the Labor Code, for
example, to workers in the private sector have been
effectively denied to workers in government in what
looks like a grotesque, (sic) a caricature of the equal
protection of the laws. For example, ... there were
many occasions under the old government when
wages and cost of living allowances were granted to
workers in the private sector but denied to workers in
the government for some reason or another, and the
government did not even state the reasons why. The
government employees were being discriminated
against. As a general rule, the majority of the world's
countries now entertain public service unions. What
they really add up to is that the employees of the
government form their own association. Generally,
they do not bargain for wages because these are
fixed in the budget but they do acquire a forum where,
among other things, professional and self-
development is (sic) promoted and encouraged. They
also act as watchdogs of their own bosses so that
when graft and corruption is committed, generally, it is
the unions who are no longer afraid by virtue of the
armor of self-organization that become the public's
own allies for detecting graft and corruption and for
exposing it....
There is, therefore, no impediment to the holding of a
certification election among the workers of NHC for it
is clear that they are covered by the Labor Code, the
NHC being a government-owned and/or controlled
corporation without an original charter. Statutory
implementation of the last cited section of the
Constitution is found in Article 244 of the Labor Code,
as amended by Executive Order No. 111, thus: ...
Right of employees in the public service. Employees
of the government corporations established under the
Corporation Code shall have the right to organize and
to bargain collectively with their respective employers.
All other employees in the civil service shall have the
right to form associations for purposes not contrary to
For employees in corporations and entities covered
by the Labor Code, the determination of the exclusive
bargaining representative is particularly governed by
Articles 255 to 259 of said Code. Article 256 provides
for the procedure when there is a representation issue
in organized establishments, while Article 257 covers
unorganized establishments. These Labor Code
provisions are fleshed out by Rules V to VII, Book V
of the Omnibus Implementing Rules.
With respect to other civil servants, that is, employees
of all branches, subdivisions, instrumentalities and
agencies of the government including government-
owned or controlled corporations with original charters
and who are, therefore, covered by the civil service
laws, the guidelines for the exercise of their right to
organize is provided for under Executive Order No.
180. Chapter IV thereof, consisting of Sections 9 to
12, regulates the determination of the "sole and
exclusive employees representative"; Under Section
12, "where there are two or more duly registered
employees' organizations in the appropriate
organization unit, the Bureau of Labor Relations shall,
upon petition order the conduct of certification election
and shall certify the winner as the exclusive
representative of the rank-and-file employees in said
organizational unit."
Parenthetically, note should be taken of the specific
qualification in the Constitution that the State "shall
guarantee the rights of all workers to self-
organization, collective bargaining, and peaceful
concerted activities, including the right to strike in
accordance with law" and that they shall also
participate in policy and decision-making processes
affecting their rights and benefits as may be provided
by law."
G.R. No. 120319
October 6, 1995
From a submission agreement of the Luzon
Development Bank (LDB) and the Association of
Luzon Development Bank Employees (ALDBE) arose
an arbitration case to resolve the following issue:
whether or not the company has violated the
Collective Bargaining Agreement provision and the
Memorandum of Agreement dated April 1994, on
At a conference, the parties agreed on the submission
of their respective Position Papers on December 1-
15, 1994. Atty. Ester S. Garcia, in her capacity as
Voluntary Arbitrator, received ALDBE's Position Paper
on January 18, 1995. LDB, on the other hand, failed
to submit its Position Paper despite a letter from the
Voluntary Arbitrator reminding them to do so. As of
May 23, 1995 no Position Paper had been filed by
LDB. On May 24, 1995, without LDB's Position Paper,
the Voluntary Arbitrator rendered a decision disposing
as follows:
WHEREFORE, finding is hereby made that the Bank
has not adhered to the Collective Bargaining
Agreement provision nor the Memorandum of
Agreement on promotion. Hence, this petition for
certiorari and prohibition seeking to set aside the
decision of the Voluntary Arbitrator and to prohibit her
from enforcing the same.
Which court has the jurisdiction for the appellate
review of adjudications of all quasi-judicial entities
Section 9 of B.P. Blg. 129, as amended by Republic
Act No. 7902, provides that the Court of Appeals shall
(B) Exclusive appellate jurisdiction over all final
judgments, decisions, resolutions, orders or awards of
Regional Trial Courts and quasi-judicial agencies,
instrumentalities, boards or commissions, including
the Securities and Exchange Commission, the
Employees Compensation Commission and the Civil
Service Commission, except those falling within the
appellate jurisdiction of the Supreme Court in
accordance with the Constitution, the Labor Code of
the Philippines under Presidential Decree No. 442, as
amended, the provisions of this Act, and of
subparagraph (1) of the third paragraph and
subparagraph (4) of the fourth paragraph of Section
17 of the Judiciary Act of 1948.
The voluntary arbitrator no less performs a state
function pursuant to a governmental power delegated
to him under the provisions therefor in the Labor Code
and he falls, therefore, within the contemplation of the
term "instrumentality" in the aforequoted Sec. 9 of
B.P. 129. The fact that his functions and powers are
provided for in the Labor Code does not place him
within the exceptions to said Sec. 9 since he is a
quasi-judicial instrumentality as contemplated therein
A fortiori, the decision or award of the voluntary
arbitrator or panel of arbitrators should likewise be
appealable to the Court of Appeals, in line with the
procedure outlined in Revised Administrative Circular
No. 1-95, just like those of the quasi-judicial agencies,
boards and commissions enumerated therein.
This would be in furtherance of, and consistent with,
the original purpose of Circular No. 1-91 to provide a
uniform procedure for the appellate review of
adjudications of all quasi-judicial entities not expressly
excepted from the coverage of Sec. 9 of B.P. 129 by
either the Constitution or another statute. In the same
vein, it is worth mentioning that under Section 22 of
Republic Act No. 876, also known as the Arbitration
Law, arbitration is deemed a special proceeding of
which the court specified in the contract or
submission, or if none be specified, the Regional Trial
Court for the province or city in which one of the
parties resides or is doing business, or in which the
arbitration is held, shall have jurisdiction. A party to
the controversy may, at any time within one (1) month
after an award is made, apply to the court having
jurisdiction for an order confirming the award and the
court must grant such order unless the award is
vacated, modified or corrected.
In effect, this equates the award or decision of the
voluntary arbitrator with that of the regional trial court.
Consequently, in a petition for certiorari from that
award or decision, ACCORDINGLY, the Court
resolved to REFER this case to the Court of Appeals.
Republic vs Court of Appeals
G..R. No. 87676
December 20, 1989
The Regional Trial Court of Manila, Branch III,
dismissed for lack of jurisdiction, the petitioner's
complaint in Civil Case No. 88- 44048 praying for a
declaration of illegality of the strike of the private
respondents and to restrain the same. The Court of
Appeals denied the petitioner's petition for certiorari,
hence, this petition for review.
Although the NPDC was originally created in 1963
under Executive Order No. 30, as the Executive
Committee for the development of the Quezon
Memorial, Luneta and other national parks, and later
renamed as the National Parks Development
Committee under Executive Order No. 68, on
September 21, 1967, it was registered in the
Securities and Exchange Commission (SEC) as a
non-stock and non-profit corporation, known as "The
National Parks Development Committee, Inc."
However, in August, 1987, the NPDC was ordered by
the SEC to show cause why its Certificate of
Registration should not be suspended for: (a) failure
to submit the General Information Sheet from 1981 to
1987; (b) failure to submit its Financial Statements
from 1981 to 1986; (c) failure to register its Corporate
Books; and (d) failure to operate for a continuous
period of at least five (5) years since September 27,
W/N the petitioner, National Parks Development
Committee (NPDC), is a government agency, or a
private corporation, for on this issue depends the right
of its employees to strike.
Since NPDC is a government agency, its employees
are covered by civil service rules and regulations
(Sec. 2, Article IX, 1987 Constitution). Its employees
are civil service employees (Sec. 14, Executive Order
No. 180).
While NPDC employees are allowed under the 1987
Constitution to organize and join unions of their
choice, there is as yet no law permitting them to
strike. In case of a labor dispute between the
employees and the government, Section 15 of
Executive Order No. 180 dated June 1, 1987 provides
that the Public Sector Labor- Management Council,
not the Department of Labor and Employment, shall
hear the dispute. Clearly, the Court of Appeals and
the lower court erred in holding that the labor dispute
between the NPDC and the members of the NPDSA
is cognizable by the Department of Labor and
WHEREFORE, the petition for review is granted. The
decision of the Court of Appeals in CA-G.R. SP No.
14204 is hereby set aside. The private respondents'
complaint should be filed in the Public Sector Labor-
Management Council as provided in Section 15 of
Executive Order No. 180. Costs against the private
MAGPAYO, petitioner, vs. THE COURT OF
QUEZON CITY, respondents.
G.R. No. 85279
July 28, 1989
On June 11, 1987, the SSS filed with the Regional
Trial Court of Quezon City a complaint for damages
with a prayer for a writ of preliminary injunction
against petitioners, alleging that on June 9, 1987, the
officers and members of SSSEA staged an illegal
strike and baricaded the entrances to the SSS
Building, preventing non-striking employees from
reporting for work and SSS members from transacting
business with the SSS; that the strike was reported to
the Public Sector Labor - Management Council, which
ordered the strikers to return to work; that the strikers
refused to return to work; and that the SSS suffered
damages as a result of the strike. The complaint
prayed that a writ of preliminary injunction be issued
to enjoin the strike and that the strikers be ordered to
return to work; that the defendants (petitioners herein)
be ordered to pay damages; and that the strike be
declared illegal.
It appears that the SSSEA went on strike after the
SSS failed to act on the union's demands, which
included: implementation of the provisions of the old
SSS-SSSEA collective bargaining agreement (CBA)
on check-off of union dues; payment of accrued
overtime pay, night differential pay and holiday pay;
conversion of temporary or contractual employees
with six (6) months or more of service into regular and
permanent employees and their entitlement to the
same salaries, allowances and benefits given to other
regular employees of the SSS; and payment of the
children's allowance of P30.00, and after the SSS
deducted certain amounts from the salaries of the
employees and allegedly committed acts of
discrimination and unfair labor practices.
Whether or not employees of the Social Security
System (SSS) have the right to strike.
The 1987 Constitution, in the Article on Social Justice
and Human Rights, provides that the State "shall
guarantee the rights of all workers to self-
organization, collective bargaining and negotiations,
and peaceful concerted activities, including the right
to strike in accordance with law" [Art. XIII, Sec. 31].
Resort to the intent of the framers of the organic law
becomes helpful in understanding the meaning of
these provisions. A reading of the proceedings of the
Constitutional Commission that drafted the 1987
Constitution would show that in recognizing the right
of government employees to organize, the
commissioners intended to limit the right to the
formation of unions or associations only, without
including the right to strike.
Considering that under the 1987 Constitution "the civil
service embraces all branches, subdivisions,
instrumentalities, and agencies of the Government,
including government-owned or controlled
corporations with original charters" [Art. IX(B), Sec.
.2(l) see also Sec. 1 of E.O. No. 180 where the
employees in the civil service are denominated as
"government employees"] and that the SSS is one
such government-controlled corporation with an
original charter, having been created under R.A. No.
1161, its employees are part of the civil service
[NASECO v. NLRC, G.R. Nos. 69870 & 70295,
November 24,1988] and are covered by the Civil
Service Commission's memorandum prohibiting
strikes. This being the case, the strike staged by the
employees of the SSS was illegal.