epublic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 161596 February 20, 2013
ROBERTO BORDOMEO, JAYME SARMIENTO and GREGORIO BARREDO, Petitioners,
vs.
COURT OF APPEALS, HON. SECRETARY OF LABOR, and INTERNATIONAL
PHARMACEUTICALS, INC.,Respondents.
D E C I S I O N
BERSAMIN, J .:
As an extraordinary remedy, certiorari cannot replace or supplant an adequate remedy in the
ordinary course of law, like an appeal in due course. It is the inadequacy of a remedy in the ordinary
course of law that determines whether certiorari can be a proper alternative remedy.
The Case
The petitioners implore the Court to reverse and set aside the Decision
1
of the Court of Appeals (CA)
promulgated on May 30, 2003 in C.A.-G.R. SP No. 65970 entitled Roberto Bordomeo, Anecito
Cupta, Jaime Sarmiento and Virgilio Saragena v. Honorable Secretary of Labor and Employment
and International Pharmaceuticals, Inc.,dismissing their petition for certiorari by which they had
assailed the Order
2
issued on July 4, 2001 by Secretary Patricia A. Sto. Tomas of the Department of
Labor and Employment (DOLE), to wit:
WHEREFORE, the Order of this Office dated March 27, 1998 STANDS and having become final
and having been fully executed, completely CLOSED and TERMINATED this case.
No further motion shall be entertained.
SO ORDERED.
3

and the CAs resolution promulgated on October 30, 2003, denying their motion for reconsideration.
In effect, the Court is being called upon again to review the March 27, 1998 order issued by the
DOLE Secretary in response to the petitioners demand for the execution in full of the final orders of
the DOLE issued on December 26, 1990 and December 5, 1991 arising from the labor dispute in
International Pharmaceuticals, Inc. (IPI).
Antecedents
In 1989, the IPI Employees Union-Associated Labor Union (Union), representing the workers, had a
bargaining deadlock with the IPI management. This deadlock resulted in the Union staging a strike
and IPI ordering a lockout.
On December 26, 1990, after assuming jurisdiction over the dispute, DOLE Secretary Ruben D.
Torres rendered the following Decision,
4
to wit:
WHEREFORE, PREMISES CONSIDERED, decision is hereby rendered as follows:
1. finding the IPI Employees Union-ALU as the exclusive bargaining agent of all rank and file
employees of ALU including sales personnel;
2. dismissing, for lack of merit, the charges of contempt filed by the Union against the IPI
officials and reiterating our strict directive for a restoration of the status quo ante the strike as
hereinbefore discussed;
3. dismissing the Unions complaint against the Company for unfair labor practice through
refusal to bargain;
4. dismissing the IPI petition to declare the strike of the Union as illegal; and
5. directing the IPI Employees Union-ALU and the International Pharmaceuticals, Inc. to
enter into their new CBA, incorporating therein the dispositions hereinbefore stated. All other
provisions in the old CBA not otherwise touched upon in these proceedings are, likewise, to
be incorporated in the new CBA.
SO ORDERED.
5

Resolving the parties ensuing respective motions for reconsideration or clarification,
6
Secretary
Torres rendered on December 5, 1991 another ruling,
7
disposing thus:
WHEREFORE, in the light of the forgoing considerations, judgment is hereby rendered:
1. Dismissing the motions for reconsideration filed by the International Pharmaceutical, Inc.
and the Workers Trade Alliance Unions (WATU) for lack of merit;
2. Ordering the International Pharmaceutical Inc. to reinstate to their former positions with full
backwages reckoned from 8 December 1989 until actually reinstated without loss of seniority
rights and other benefits the "affected workers" herein-below listed:
1. Reynaldo C. Menor
2. Geronimo S. Banquirino
3. Rogelio Saberon
4. Estefanio G. Maderazo
5. Herbert G. Veloso
6. Rogelio G. Enricoso
7. Colito Virtudazo
8. Gilbert Encontro
9. Bebiano Pancho
10. Merlina Gomez
11. Lourdes Mergal
12. Anecito Cupta
13. Prescillano O. Naquines
14. Alejandro O. Rodriguez
15. Godofredo Delposo
16. Jovito Jayme
17. Emma L. Lana
18. Koannia M. Tangub
19. Violeta Pancho
20. Roberto Bordomeo
21. Mancera Vevincio
22. Caesar Sigfredo
23. Trazona Roldan
24. Carmelita Ygot
25. Gregorio Barredo
26. Dario Abella
27. Artemio Pepito
28. Anselmo Tareman
29. Merope Lozada
30. Agapito Mayorga
31. Narciso M. Leyson
32. Ananias Dinolan
33. Cristy L. Caybot
34. Johnnelito S. Corilla
35. Noli Silo
36. Danilo Palioto
37. Winnie dela Cruz
38. Edgar Montecillo
39. Pompio Senador
40. Ernesto Palomar
41. Reynante Germininano
42. Pelagio Arnaiz
43. Ireneo Russiana
44. Benjamin Gellangco, Jr.
45. Nestor Ouano (listed in paragraphs 1 & 9 of the IPI Employees Union- ALUs
Supplemental Memorandum dated 6 March 1991)
3. Ordering the International Pharmaceutical Inc. to reinstate to their former positions the
following employees, namely:
a. Alexander Aboganda
b. Pacifico Pestano
c. Carlito Torregano
d. Clemencia Pestano
e. Elisea Cabatingan
(listed in paragraph 3 of the IPI Employees Union-ALUs Supplemental Memorandum dated 6 March
1991).
No further motions of the same nature shall be entertained.
8

IPI assailed the issuances of Secretary Torres directly in this Court through a petition
for certiorari (G.R. No. 103330), but the Court dismissed its petition on October 14, 1992 on the
ground that no grave abuse of discretion had attended the issuance of the assailed
decisions.
9
Considering that IPI did not seek the reconsideration of the dismissal of its petition, the
entry of judgment issued in due course on January 19, 1994.
10

With the finality of the December 26, 1990 and December 5, 1991 orders of the DOLE Secretary, the
Union, represented by the Seno, Mendoza and Associates Law Office, moved in the National
Conciliation and Mediation Board in DOLE, Region VII on June 8, 1994 for their execution.
11

On November 21, 1994, one Atty. Audie C. Arnado, who had meanwhile entered his appearance on
October 4, 1994 as the counsel of 15 out of the 50 employees named in the December 5, 1991
judgment of Secretary Torres, likewise filed a so-called Urgent Motion for Execution.
12

After conducting conferences and requiring the parties to submit their position papers, Regional
Director Alan M. Macaraya of DOLE Region VII issued a Notice of Computation/Execution on April
12, 1995,
13
the relevant portion of which stated:
To speed-up the settlement of the issue, the undersigned on 7 February 1995 issued an order
directing the parties to submit within ten (10) calendar days from receipt of the Order, their
respective Computations. To date, only the computation from complainants including those that were
not specifically mentioned in the Supreme Court decision were submitted and received by this office.
Upon verification of the Computation available at hand, management is hereby directed to pay the
employees including those that were not specifically mentioned in the decision but are similarly
situated, the aggregate amount of FORTY-THREE MILLION SIX HUNDRED FIFTY THOUSAND
NINE HUNDRED FIVE AND 87/100 PESOS (P43,650,905.87) involving NINE HUNDRED SIXTY-
TWO (962) employees, in the manner shown in the attached Computation forming part of this Order.
This is without prejudice to the final Order of the Court to reinstate those covered employees.1wphi1
This Order is to take effect immediately and failure to comply as instructed will cause the issuance of
a WRIT OF EXECUTION.
14

In effect, Regional Director Macaraya increased the number of the workers to be benefitted to 962
employees classified into six groups and allocated to each group a share in the P43,650,905.87
award,
15
as follows:
GROUP NO. OF
EMPLOYEES
TOTAL CLAIM
Those represented by Atty. Arnado 15 P4,162,361.50
Salesman 9 P6,241,535.44
For Union Members 179 P6,671,208.86
For Non-Union Members 33 P1,228,321.09
Employees who ratified the CBA 642 P23,982,340.14
Separated Employees 84 P1,365,136.84
TOTAL 962 P43,650,905.87
On May 24, 1995, Assistant Regional Director Jalilo dela Torre of DOLE Region VII issued a writ of
execution for the amount of P4,162,361.50 (which covered monetary claims corresponding to the
period from January 1, 1989 to March 15, 1995) in favor of the 15 employees represented by Atty.
Arnado,
16
to be distributed thusly:
17

1. Barredo, Gregorio P278,700.10
2. Bordomeo, Roberto P278,700.10
3. Cupta, Anecito P278,700.10
4. Delposo, Godofredo P278,700.10
5. Dinolan, Ananias P278,700.10
6. Jayme, Jovito P278,700.10
7. Lozada, Merope P278,700.10
8. Mayorga, Agapito P278,700.10
9. Mergal, Lourdes P278,700.10
10. Pancho, Bebiano P278,700.10
11. Pancho, Violeta P278,700.10
12. Rodriguez, Alejandro P278,700.10
13. Russiana, Ireneo P263,685.10
14. Tangub, Joannis P278,700.10
15. Trazona, Rolsan P275,575.10
TOTAL P4,162,361.50
On June 5, 1995, Assistant Regional Director dela Torre issued another Writ of Execution for the
amount ofP1,200,378.92 in favor of the second group of employees. Objecting to the reduced
computation for them, however, the second group of employees filed a Motion Declaring the Writ of
Execution dated June 5, 1995 null and void.
On July 11, 1995, IPI challenged the May 24, 1995 writ of execution issued in favor of the 15
employees by filing its Appeal and Prohibition with Prayer for Temporary Restraining Order in the
Office of then DOLE Undersecretary Cresenciano Trajano.
18

On December 22, 1995,
19
Acting DOLE Secretary Jose Brillantes, acting on IPIs appeal, recalled
and quashed the May 24, 1995 writ of execution, and declared and considered the case closed and
terminated.
20

Aggrieved, the 15 employees sought the reconsideration of the December 22, 1995 Order of Acting
DOLE Secretary Brillantes.
On August 27, 1996, DOLE Secretary Leonardo A. Quisumbing granted the Motion for
Reconsideration,
21
and reinstated the May 24, 1995 writ of execution, subject to the deduction of the
sum of P745,959.39 already paid pursuant to quitclaims from the award
of P4,162,361.50.
22
Secretary Quisumbing declared the quitclaims executed by the employees on
December 2, 3, and 17, 1993 without the assistance of the proper office of the DOLE
unconscionable for having been entered into under circumstances showing vitiation of consent; and
ruled that the execution of the quitclaims should not prevent the employees from recovering their
monetary claims under the final and executory decisions dated December 26, 1990 and December
5, 1991, less the amounts received under the quitclaims.
Aggrieved by the reinstatement of the May 24, 1995 writ of execution, IPI moved for a
reconsideration.
23

On September 3, 1996, and pending resolution of IPIs motion for reconsideration, Regional Director
Macaraya issued a writ of execution in favor of the 15 employees represented by Atty. Arnado to
recover P3,416,402.10 pursuant to the order dated August 27, 1996 of Secretary
Quisumbing.
24
Thereafter, the sheriff garnished the amount of P3,416,402.10 out of the funds of IPI
with China Banking Corporation, which released the amount.
25
Hence, on September 11, 1996, the
15 employees represented by Atty. Arnado executed a Satisfaction of Judgment and
Quitclaim/Release upon receipt of their respective portions of the award, subject to the reservation of
their right to claim "unsatisfied amounts of separation pay as well as backwages reckoned from the
date after 15 March 1995 and up to the present, or until separation pay is fully paid."
26

Notwithstanding the execution of the satisfaction of judgment and quitclaim/release, Atty. Arnado still
filed an omnibus motion not only in behalf of the 15 employees but also in behalf of other employees
named in the notice of computation/execution, with the exception of the second group, seeking
another writ of execution to recover the further sum of P58,546,767.83.
27

Atty. Arnado filed a supplemental omnibus motion for the denial of IPIs Motion for Reconsideration
on the ground of mootness.
28

In the meanwhile, the employees belonging to the second group reiterated their Motion Declaring the
Writ of Execution dated June 5, 1995 null and void, and filed on May 15, 1996 a Motion for Issuance
of Writ, praying for another writ of execution based on the computation by Regional Director
Macaraya.
On December 24, 1997,
29
Secretary Quisumbing, affirming his August 27, 1996 order, denied IPIs
Motion for Reconsideration for being rendered moot and academic by the full satisfaction of the May
24, 1995 writ of execution. He also denied Atty. Arnados omnibus motion for lack of merit; and dealt
with the issue involving the June 5, 1995 writ of execution issued in favor of the second group of
employees, which the Court eventually resolved in the decision promulgated in G.R. No. 164633.
30

The employees represented by Atty. Arnado moved for the partial reconsideration of the December
24, 1997 order of Secretary Quisumbing. Resolving this motion on March 27, 1998, Acting DOLE
Secretary Jose M. Espaol, Jr. held as follow:
31

WHEREFORE, Our Order dated December 24, 1997, is hereby AFFIRMED.
The Motion for Reconsideration/Amend/Clarificatory and Reiteration of Motion for Issuance of Writ of
Execution dated January 12, 1998, filed by six (6) salesmen, namely, Geronimo S. Banquirigo,
Reynaldo C. Menor, Rogelio Enricoso, Danilo Palioto, Herbert Veloso and Colito Virtudazo as well
as the Motion for Reconsideration and/or Clarification filed by Salesman Noli G. Silo, are hereby
DISMISSED, for lack of merit. The June 5, 1995 Writ of Execution is now considered fully executed
and satisfied.
The Motion for Partial Reconsideration filed by Roberto Bordomeo and 231 others, is likewise
DENIED, for lack of merit
SO ORDERED.
32

Records reveal, however, that Virgilio Saragena, et al. brought to this Court a petition for certiorari to
assail the December 24, 1997 and March 27, 1998 Orders of the Secretary of Labor (G.R. No.
134118). As stated at the start, the Court dismissed the petition of Saragena, et al. on September 9,
1998 for having been filed out of time and for the petitioners failure to comply with the requirements
under Rule 13 and Rule 45 of the Rules of Court.
33
The entry of judgment was issued on December
7, 1998.
In the meanwhile, on July 27, 1998, Atty. Arnado filed a Motion for Execution with the DOLE
Regional Office,
34
demanding the following amounts from IPI, to wit:
For Roberto Bordomeo and 14 others P4,990,401.00
The rest of complainants 33,824,820.41
Total P 38,815,221.41
Again, on September 22, 1998, Atty. Arnado filed a Motion for Execution with the Regional
Office.
35
This time, no monetary claims were demanded but the rest of the complainants sought to
collect from IPI the reduced amount ofP6,268,818.47.
Another Motion for Execution was filed by Atty. Arnado on July 6, 1999,
36
seeking the execution of
the December 26, 1990 order issued by Secretary Torres and of the April 12, 1995 notice of
computation/execution issued by Regional Director Macaraya.
Ultimately, on July 4, 2001, DOLE Secretary Patricia Sto. Tomas issued her Order
37
affirming the
order issued on March 27, 1998, and declaring that the full execution of the order of March 27, 1998
"completely CLOSED and TERMINATED this case."
Only herein petitioners Roberto Bordomeo, Anecito Cupta, Jaime Sarmiento and Virgilio Saragena
assailed the July 4, 2001 order of Secretary Sto. Tomas by petition for certiorari in the CA (C.A.-G.R.
SP No. 65970).
38

On May 30, 2003, the CA rendered its decision in C.A.-G.R. SP No. 65970,
39
to wit:
It is worthy to note that all the decisions and incidents concerning the case between petitioners and
private respondent IPI have long attained finality. The records show that petitioners have already
been granted a writ of execution. In fact, the decision has been executed. Thus, there is nothing for
this Court to modify. The granting of the instant petition calls for the amendment of the Court of a
decision which has been executed. In this light, it is worthy to note the rule that final and executory
decisions, more so with those already executed, may no longer be amended except only to correct
errors which are clerical in nature. Amendments or alterations which substantially affect such
judgments as well as the entire proceedings held for that purpose are null and void for lack of
jurisdiction. (Pio Barreto Realty Development Corporation v. Court of Appeals, 360 SCRA 127).
This Court in the case of CA GR No. 54041 dated February 28, 2001, has ruled that the Orders of
the Secretary of Labor and Employment dated December 24, 1997 and March 27, 1998 have
become final and executory. It may be noted that the said orders affirmed the earlier orders of the
Secretary of Labor and Employment dated December 22, 1995 and August 27, 1996 granting the
execution of the decision in the case between petitioners and IPI.
x x x x
WHEREFORE, based on the foregoing, the instant petition is hereby DENIED DUE COURSE and
is DISMISSEDfor lack of merit.
SO ORDERED.
40

The petitioners filed a Motion for Reconsideration,
41
but the CA denied the motion on October 30,
2003.
42

Hence, they commenced this special civil action for certiorari.
The petitioners hereby contend that:
THE COURT OF APPEALS RULED CONTRARY TO SUPREME COURT DECISIONS AND
GRAVELY ABUSED ITS DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION
WHEN IT:
A. HELD THAT GRANTING THE PETITION FOR MANDAMUS (WHICH MERELY
SEEKS FULL EXECUTION OF DOLE FINAL JUDGMENTS 26 DECEMBER 1990
AND 5 DECEMBER 1991 WOULD AMEND SAID FINAL AND EXECUTORY
JUDGMENTS.
B. FAILED TO IMPLEMENT THE SUPREME COURT DOCTRINE SET IN PDCP
VS. GENILO, G.R. NO. 106705, THAT SIMILARLY SITUATED EMPLOYEES HAS
THE RIGHT TO PROVE THEIR ENTITLEMENT TO THE BENEFITS AWARDED
UNDER FINAL JUDGMENTS.
C. HELD THAT THE QUESTIONED JUDGMENTS HAD BEEN EXECUTED WHEN
THE RESPONDENTS THEMSELVES ADMIT THE CONTRARY.
D. HELD THAT DOLE SECRETARY DID NOT COMMIT GRAVE ABUSE OF
DISCRETION WHEN SHE REFUSED TO FULLY EXECUTE THE 1990 AND 1991
DOLE FINAL JUDGMENTS AND ISSUE CORRESPONDING WRITS OF
EXECUTION.
The petitioners submit that of the six groups of employees classified under the April 12, 1995 notice
of computation/execution issued by Regional Director Macaraya, only the first two groups, that is,
the 15 employees initially represented by Atty. Arnado; and the nine salesmen led by Geronimo S.
Banquirigo, had been granted a writ of execution. They further submit that the May 24, 1995 writ of
execution issued in favor of the first group of employees, including themselves, had only been
partially satisfied because no backwages or separation pay from March 16, 1995 onwards had yet
been paid to them; that the reduced award granted to the second group of employees was in
violation of the April 12, 1995 notice of computation/execution; that no writ of execution had been
issued in favor of the other groups of employees; and that DOLE Secretary Sto. Tomas thus
committed grave abuse of discretion in refusing to fully execute the December 26, 1990 and
December 5, 1991 orders.
In its comment, IPI counters that the petition for certiorari should be dismissed for being an improper
remedy, the more appropriate remedy being a petition for review on certiorari; that a petition for
review on certiorari should have been filed within 15 days from receipt of the denial of the motion for
reconsideration, as provided in Section 1 and Section 2 of Rule 45; and that the petition must also
be outrightly dismissed for being filed out of time.
IPI contends that the finality of the December 24, 1997 and March 27, 1998 orders of the DOLE
Secretary rendered them unalterable; that Atty. Arnado had already brought the December 24, 1997
and March 27, 1998 orders to this Court for review (G.R. No. 134118); and that the Court had
dismissed the petition for having been filed out of time and for the petitioners failure to comply with
Rule 13 and Rule 45 of the Rules of Court.
Ruling
We dismiss the petition for certiorari.
Firstly, an appeal by petition for review on certiorari under Rule 45 of the Rules of Court, to be taken
to this Court within 15 days from notice of the judgment or final order raising only questions of law,
was the proper remedy available to the petitioners. Hence, their filing of the petition for certiorari on
January 9, 2004 to assail the CAs May 30, 2003 decision and October 30, 2003 resolution in C.A.-
G.R. SP No. 65970 upon their allegation of grave abuse of discretion committed by the CA was
improper. The averment therein that the CA gravely abused its discretion did not warrant the filing of
the petition for certiorari, unless the petition further showed how an appeal in due course under Rule
45 was not an adequate remedy for them. By virtue of its being an extraordinary
remedy,certiorari cannot replace or substitute an adequate remedy in the ordinary course of law, like
an appeal in due course.
43

We remind them that an appeal may also avail to review and correct any grave abuse of discretion
committed by an inferior court, provided it will be adequate for that purpose.
It is the adequacy of a remedy in the ordinary course of law that determines whether a special civil
action forcertiorari can be a proper alternative remedy. We reiterate what the Court has discoursed
thereon in Heirs of Spouses Teofilo M. Reterta and Elisa Reterta v. Spouses Lorenzo Mores and
Virginia Lopez,
44
viz:
Specifically, the Court has held that the availability of appeal as a remedy does not constitute
sufficient ground to prevent or preclude a party from making use of certiorari if appeal is not an
adequate remedy, or an equally beneficial, or speedy remedy. It is inadequacy, not the mere
absence of all other legal remedies and the danger of failure of justice without the writ, that
must usually determine the propriety of certiorari. A remedy is plain, speedy and adequate if
it will promptly relieve the petitioner from the injurious effects of the judgment, order, or
resolution of the lower court or agency. It is understood, then, that a litigant need not mark
time by resorting to the less speedy remedy of appeal in order to have an order annulled and
set aside for being patently void for failure of the trial court to comply with the Rules of Court.
Nor should the petitioner be denied the recourse despite certiorari not being available as a proper
remedy against an assailed order, because it is better on balance to look beyond procedural
requirements and to overcome the ordinary disinclination to exercise supervisory powers in order
that a void order of a lower court may be controlled to make it conformable to law and justice. Verily,
the instances in which certiorari will issue cannot be defined, because to do so is to destroy the
comprehensiveness and usefulness of the extraordinary writ. The wide breadth and range of the
discretion of the court are such that authority is not wanting to show that certiorari is more
discretionary than either prohibition or mandamus, and that in the exercise of superintending control
over inferior courts, a superior court is to be guided by all the circumstances of each particular case
"as the ends of justice may require." Thus, the writ will be granted whenever necessary to prevent a
substantial wrong or to do substantial justice.
45
(Emphasis supplied)
Even so, Rule 65 of the Rules of Court still requires the petition for certiorari to comply with the
following requisites, namely: (1) the writ of certiorari is directed against a tribunal, a board, or an
officer exercising judicial or quasi-judicial functions; (2) such tribunal, board, or officer has acted
without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of
jurisdiction; and (3) there is no appeal or any plain, speedy, and adequate remedy in the ordinary
course of law.
46

Jurisprudence recognizes certain situations when the extraordinary remedy of certiorari may be
deemed proper, such as: (a) when it is necessary to prevent irreparable damages and injury to a
party; (b) where the trial judge capriciously and whimsically exercised his judgment; (c) where there
may be danger of a failure of justice; (d) where an appeal would be slow, inadequate, and
insufficient; (e) where the issue raised is one purely of law; (f) where public interest is involved; and
(g) in case of urgency.
47
Yet, a reading of the petition for certiorari and its annexes reveals that the
petition does not come under any of the situations. Specifically, the petitioners have not shown that
the grant of the writ of certiorari will be necessary to prevent a substantial wrong or to do substantial
justice to them.
In dismissing the petitioners petition for certiorari, the CA in effect upheld the Secretary of Labors
declaration in her assailed July 4, 2001 decision that the full satisfaction of the writs of execution had
completely closed and terminated the labor dispute.
Yet, the petitioners have ascribed grave abuse of discretion to the CA for doing so.
We do not agree. We find no just cause to now issue the writ of certiorari in order to set aside the
CAs assailed May 30, 2003 decision. Indeed, the following well stated justifications for the dismissal
of the petition show that the CA was correct, viz:
x x x x
It is worthy to note that all the decisions and incidents concerning the case between petitioners and
private respondent IPI have long attained finality. The records show that petitioners have already
been granted a writ of execution. In fact, the decision has been executed. Thus, there is nothing for
this Court to modify. The granting of the instant petition calls for the amendment of the Court of a
decision which has been executed. In this light, it is worthy to note the rule that final and executory
decisions, more so with those already executed, may no longer be amended except only to correct
errors which are clerical in nature. Amendments or alterations which substantially affect such
judgments as well as the entire proceedings held for that purpose are null and void for lack of
jurisdiction (Pio Barretto Realty Development Corporation v. Court of Appeals, 360 SCRA 127).
This Court in the case of CA GR No. 54041 dated February 28, 2001, has ruled that the Orders of
the Secretary of Labor and Employment dated December 24, 1997 and March 27, 1998 have
become final and executory. It may be noted that the said orders affirmed the earlier orders of the
Secretary of Labor and Employment dated December 22, 1995 and August 27, 1996 granting the
execution of the decision in the case between petitioners and IPI.
There is nothing on the records to support the allegation of petitioners that the Secretary of Labor
and Employment abused her discretion. The pertinent portion of the assailed order reads:
"Given that this office had already ruled on all incidents of the case in its March 27, 1998 order and
the Writ of Execution dated June 5, 1995 had already attained finality and had in fact been
completely satisfied through the deposit with the Regional Office of the amount covered by the Writ,
the subsequent Motions filed by Atty. Arnado can no longer be entertained, much less granted by
this Office. Thus, at this point, there is nothing more to grant nor to execute."
48

x x x x
In a special civil action for certiorari brought against a court with jurisdiction over a case, the
petitioner carries the burden to prove that the respondent tribunal committed not a merely reversible
error but a grave abuse of discretion amounting to lack or excess of jurisdiction in issuing the
impugned order.
49
Showing mere abuse of discretion is not enough, for the abuse must be shown to
be grave. Grave abuse of discretion means either that the judicial or quasi-judicial power was
exercised in an arbitrary or despotic manner by reason of passion or personal hostility, or that the
respondent judge, tribunal or board evaded a positive duty, or virtually refused to perform the duty
enjoined or to act in contemplation of law, such as when such judge, tribunal or board exercising
judicial or quasi-judicial powers acted in a capricious or whimsical manner as to be equivalent to lack
of jurisdiction.
50
Under the circumstances, the CA committed no abuse of discretion, least of all
grave, because its justifications were supported by the history of the dispute and borne out by the
applicable laws and jurisprudence.
And, secondly, the records contradict the petitioners insistence that the two writs of execution to
enforce the December 26, 1990 and December 5, 1991 orders of the DOLE Secretary were only
partially satisfied. To recall, the two writs of execution issued were the one for P4,162,361.50, later
reduced to P3,416,402.10, in favor of the 15 employees represented by Atty. Arnado, and that
for P1,200,378.92 in favor of the second group of employees led by Banquerigo.
There is no question that the 15 employees represented by Atty. Arnado, inclusive of the petitioners,
received their portion of the award covered by the September 3, 1996 writ of execution for the
amount of P3,416,402.10 through the release of the garnished deposit of IPI at China Banking
Corporation. That was why they then executed the satisfaction of judgment and quitclaim/release,
the basis for the DOLE Secretary to expressly declare in her July 4, 2001 decision that the full
satisfaction of the writ of execution "completely CLOSED and TERMINATED this case."
51

Still, the 15 employees demand payment of their separation pay and backwages from March 16,
1995 onwards pursuant to their reservation reflected in the satisfaction of judgment and
quitclaim/release they executed on September 11, 1996.
The demand lacked legal basis. Although the decision of the DOLE Secretary dated December 5,
1991 had required IPI to reinstate the affected workers to their former positions with full backwages
reckoned from December 8, 1989 until actually reinstated without loss of seniority rights and other
benefits, the reinstatement thus decreed was no longer possible. Hence, separation pay was instead
paid to them. This alternative was sustained in law and jurisprudence, for "separation pay may avail
in lieu of reinstatement if reinstatement is no longer practical or in the best interest of the parties.
Separation pay in lieu of reinstatement may likewise be awarded if the employee decides not to be
reinstated."
52

Under the circumstances, the employment of the 15 employees or the possibility of their
reinstatement terminated by March 15, 1995. Thereafter, their claim for separation pay and
backwages beyond March 15, 1995 would be unwarranted. The computation of separation pay and
backwages due to illegally dismissed employees should not go beyond the date when they were
deemed to have been actually separated from their employment, or beyond the date when their
reinstatement was rendered impossible. Anent this, the Court has observed in Golden Ace Builders
v. Talde:
53

The basis for the payment of backwages is different from that for the award of separation pay.
Separation pay is granted where reinstatement is no longer advisable because of strained relations
between the employee and the employer. Backwages represent compensation that should have
been earned but were not collected because of the unjust dismissal. The basis for computing
backwages is usually the length of the employees service while that for separation pay is the actual
period when the employee was unlawfully prevented from working.
As to how both awards should be computed, Macasero v. Southern Industrial Gases
Philippines instructs:
[T]he award of separation pay is inconsistent with a finding that there was no illegal dismissal, for
under Article 279 of the Labor Code and as held in a catena of cases, an employee who is
dismissed without just cause and without due process is entitled to backwages and reinstatement or
payment of separation pay in lieu thereof:
Thus, an illegally dismissed employee is entitled to two reliefs: backwages and reinstatement. The
two reliefs provided are separate and distinct. In instances where reinstatement is no longer feasible
because of strained relations between the employee and the employer, separation pay is granted. In
effect, an illegally dismissed employee is entitled to either reinstatement, if viable, or separation pay
if reinstatement is no longer viable, and backwages.
The normal consequences of respondents illegal dismissal, then, are reinstatement without
loss of seniority rights, and payment of backwages computed from the time compensation
was withheld up to the date of actual reinstatement. Where reinstatement is no longer viable
as an option, separation pay equivalent to one (1) month salary for every year of service
should be awarded as an alternative. The payment of separation pay is in addition to payment of
backwages. (emphasis, italics and underscoring supplied)
x x x x
Clearly then, respondent is entitled to backwages and separation pay as his reinstatement has been
rendered impossible due to strained relations. As correctly held by the appellate court, the
backwages due respondent must be computed from the time he was unjustly dismissed until his
actual reinstatement, or from February 1999 until June 30, 2005 when his reinstatement was
rendered impossible without fault on his part.
The Court, however, does not find the appellate court's computation of separation pay in order. The
appellate court considered respondent to have served petitioner company for only eight years.
Petitioner was hired in 1990, however, and he must be considered to have been in the service not
only until 1999, when he was unjustly dismissed, but until June 30, 2005, the day he is deemed to
have been actually separated (his reinstatement having been rendered impossible) from petitioner
company or for a total of 15 years.
54

As for the portions of the award pertaining to the rest of the employees listed in the April 12, 1995
notice of execution/computation (i.e., those allegedly similarly situated as the employees listed in the
December 5, 1991 order of the DOLE Secretary) still remaining unsatisfied, the petitioners are
definitely not the proper parties to ventilate such concern in this or any other forum. At any rate, the
concern has already been addressed and resolved by the Court in G.R. No. 164633.
55

WHEREFORE, the Court DISMISSES the petition for certiorari for its lack of merit; AFFIRMS the
decision promulgated on May 30, 2003; and ORDERS the petitioners to pay the costs of suit.
SO ORDERED.
LUCAS P. BERSAMIN
Associate Justice
WE CONCUR:
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 153799 September 17, 2012
SOLIDBANK UNION, EVANGELINE J. GABRIEL, EVELYN A. SIA, TERESITA C. LUALHATI,
ISAGANI P. MAKISIG, REY S. PASCUA, MA. VICTORIA M. VIDALLON, AUDREY A. ALJIBE,
REY ANTHONY AMPARADO, JOSE A. ANTENOR,
1
DEL CASTILLO, AUGUSTO D. ARANDIA,
JR., RUTH SHIELA M. BAGADIONG, STEVE D. BERING, ALAN ROY I. BUYCO, MANOLO T.
CABRERA, RACHEL
2
M. CASTILLO, VICTOR O. CHUA, VIRGILIO CO, JR., LEOPOLDO
DABAY, HUBERT DIMAGIBA, MA. LOURDES CECILIA EMPERADOR,
3
FELIX B. ESTACIO, JR.,
JULIETA ESTRADA, MARICEL EVALLA, JOSE GUISADIO, ALEXANDER MARTINEZ,
JOSEPHINE M. ONG, EDNA SARONG, GREGORIO S. SECRETARIO,
4
ROSIE UY, ARVIN D.
VALENCIA, FERMIN JOSEPH
5
B. VENTURA, JR., EMMANUEL C. YAPTANGCO,
6
ERNESTO C.
ZUIGA, ALVIN E. BARICANOSA, GEORGE MAXIMO P. BARQUEZ, MA. ELENA G. BELLO,
MICHAEL MATTHEW BILLENA, NEPTALI A. CADDARAO, FERDINAND MEL S.
CAPULONG,
7
MA. EDNA V. DATOR, RANIEL
8
DAYAO, RAGCY L. DE GUZMAN, LUIS E. DELOS
SANTOS, CAROLINA DIZON, JOCELYN L. ESTROBO, MINERVA S. FALLARME, HERNANE C.
FERMOCIL, RACHEL B. FETIZANAN, SAMUEL A. FLORENTINO, JOEL S. GARMINO, LESTER
MARK Z. GATCHALIAN, GONZALO GUINIT, FERDINAND S. HABIJAN, JUN HERNANDEZ, MA.
ANGELA JALANDONI,
9
MANUEL LIM, MA. LOURDES LIM, EMERSON LUNA, NOLASCO
MACATANGAY, NORMAN MAACO, CHERRY LOU MANGROBANG, EDMUNDO MARASIGAN,
ALLEN M. MARTINEZ, ARLENE P. NOBLE, SHIRLEY ONG, LOTIZ E. ORTIZ LUIS, PABLITO
PALO, GEOFFREY PRADO, OMEGA MELANIE QUINTANO, AGNES A. RAMIREZ, RICARDO D.
RAMIREZ, DANIEL O. RAQUEL, RAMON REYES, SALVACIO ROGADO, ELMOR R. ROMANA,
JR., LOURDES U. SALVADOR, ELMER S. SAYLON, BENNARD SIMBULAN, MA. LOURDES
ROCEL SOLIVEN, EMILY
10
C. SUYAT, RAYMOND
11
D. TANAY, JOCELYN Y. TAN, CANDIDO G.
TISON, MA. THERESA
12
O. TISON, EVELYN T. UYLANGCO, MERVIN S. BAUTISTA,
LEOPOLDO DE LA ROSA, DOROTEO FROILAN and JULIETE L. JUBAC, Petitioners,
vs.
METROPOLITAN BANK AND TRUST COMPANY, Respondent.
x - - - - - - - - - - - - - - - - - - - - - - - x
G.R. No. 157169
METROPOLITAN BANK AND TRUST COMPANY, Petitioner,
vs.
SOLIDBANK UNION, EVANGELINE J. GABRIEL, EVELYN A. SIA, TERESITA C. LUALHATI,
ISAGANI P. MAKISIG, REY S. PASCUA, MA. VICTORIA M. VIDALLON, AUDREY A. ALJIBE,
REY ANTHONY AMPARADO, JOSE A. ANTENOR, AUGUSTO D. ARANDIA, JR., RUTH SHIELA
M. BAGADIONG, STEVE D. BERING, ALAN ROY I. BUYCO, MANOLO T. CABRERA, RACHEL
M. CASTILLO, VICTOR O. CHUA, VIRGILIO Y. CO, JR., LEOPOLDO S. DABAY, HUBERT V.
DIMAGIBA, MA. LOURDES CECILIA B. EMPARADOR, FELIX B. ESTACIO, JR., JULIETA T.
ESTRADA, MARICEL G. EVALLA, JOSE G. GUISADIO, ALEXANDER A. MARTINEZ,
JOSEPHINE M. ONG, EDNA M. SARONG, GREGORIO S. SECRETARIO, ROSIE C. UY, ARVIN
D. VALENCIA, FERMIN JOSEPH B. VENTURA, JR., EMMANUEL C. YAPTANCO, ERNESTO C.
ZUIGA,
13
ALVIN E. BARICANOSA, GEORGE MAXIMO P. BARQUEZ, MA. ELENA G. BELLO,
MICHAEL MATTHEW B. BILLENA, LEOPE L. CABENIAN, NEPTALI A. CADDARAO,
FERDINAND MEL S. CAPULING, MARGARETTE B. CORDOVA, MA. EDNA V. DATOR, RANIEL
C. DAYAO, RAGCY L. DE GUZMAN, LUIS E. DELOS SANTOS, CAROLINA C. DIZON,
MARCHEL S. ESQUEJO,
14
JOCELYN L. ESTROBO, MINERVA S. FALLARME, HERNANE C.
FERMOCIL, RACHEL B. FETIZANAN, SAMUEL A. FLORENTINO, MENCHIE R. FRANCISCO,
JOEL S. GARMINO, LESTER MARK Z. GATCHALIAN, MA. GONZALO G. GUINIT, FERDINAND
S. HABIJAN, JUN G. HERNANDEZ, LOURDES D. IBEAS, MA. ANGELA L. JALANDONI, JULIE
T. JORNACION, MANUEL C. LIM, MA. LOURDES A. LIM, EMERSON V. LUNA, NOLASCO B.
MACATANGAY, NORAMN C. MANACO, CHERRY LOU B. MANGROBANG, MARASIGAN G.
EDMUNDO, ALLEN M. MARTINEZ, EMELITA C. MONTANO, ARLENE P. NOBLE, SHIRLEY A.
ONG, LOTIZ E. ORTIZ LUIS, PABLITO M. PALO, GEOFFREY T. PRADO, OMEGA MELANIE M.
QUINTANO, AGNES A. RAMIREZ, RICARDO D. RAMIREZ, DANIEL O. RAQUEL, RAMON B.
REYES, SALVACIO N. ROGADO, ELMOR R. ROMANA, JR., LOURDES U. SALVADOR, ELMER
S. SAYLON, BENHARD E. SIMBULAN, MA. TERESA S. SOLIS, MA. LOURDES ROCEL E.
SOLIVEN, EMILY C. SUYAT, RAYMOND D. TANAY, JOCELYN Y. TAN, CANDIDO G. TISON,
MA. THERES O. TISON, EVELYN T. UYLANGCO, MERVIN S. BAUTISTA, LEOPOLDO V. DE LA
ROSA, DOROTEO S. FROILAN, JULIETE L. JUBAC, SOLID BANK CORPORATION and/or its
successor-in-interest, FIRST METRO INVESTMENT CORPORATION, DEOGRACIAS N. VISTAN
and EDGARDO MENDOZA, JR., Respondents.
x - - - - - - - - - - - - - - - - - - - - - - - x
G.R. No. 157327
SOLID BANK CORPORATION and/or its successor-in-interest, FIRST METRO INVESTMENT
CORPORATION, DEOGRACIAS N. VISTAN and EDGARDO MENDOZA, JR., Petitioners,
vs.
SOLIDBANK UNION and its dismissed officers and members, namely: EVANGELINE J.
GABRIEL, TERESITA C. LUALHATI, ISAGANI P. MAKISIG, REY S. PASCUA, EVELYN A. SIA,
MA. VICTORIA M. VIDALLON, AUDREY A. ALJIBE, REY ANTHONY M. AMPARADO, JOSE A.
ANTEENOR, AUGUSTO D. ARANDIA, JR., JANICE L. ARRIOLA, RUTH SHIELA M.
BAGADIONG, STEVE D. BERING, ALAN ROY I. BUYCO, MANOLO T. CABRERA, RACHEL M.
CASTILLO, VICTOR O. CHUA, VIRGILIO Y. CO, JR., LEOPOLDO S. DABAY, ARMAND V.
DAYANG-HIRANG, HUBERT V. DIMAGIBA, MA. LOURDES CECILIA B. EMPARADOR, FELIX B.
ESTACIO, JR., JULIETA T. ESTRADA, MARICEL G. EVALLA, JOSE G. GUISADIO, JOSE
RAINARIO C. LAOANG, ALEXANDER A. MARTINEZ, JUAN ALEX C. NAMBONG, JOSEPHINE
M. ONG, ARMANDO B. OROZCO, ARLENE R. RODRIGUEZ, NICOMEDES P. RUIZO, JR., DON
A. SANTANA, ERNESTO R. SANTOS, JR., EDNA M. SARONG, GREGORIO S. SEECRETARIO,
ELLEN M. SORIANO, ROSIE C. UY, ARVIN D. VALENCIA, FERMIN JOSSEPH B. VENTURA,
JR., EMMANUEL C. YAPTANCO, ERNESTO C. ZUNIGA, ARIEL S. ABENDAN, EMMA R.
ABENDAN, PAULA AGNES A. ANGELES, JACQUILINE B. BAQUIRAN, JENNIFER S.
BARCENAS, ALVIN E. BARICANOSA, GEORGE MAXIMO P. BARQUEZ, MA. ELENA G.
BELLO, RODERICK M. BELLO, MICHAEL MATTHEW B. BILLENA, LEOPE L. CABENIAN,
NEPTALI A. CADDARAO, FERDINAND MEL S. CAPULING, MARGARETTE B. CORDOVA, MA.
EDNA V. DATOR, PRANIEL C. DAYAO, RAGCY L. DE GUZMAN, LUIS E. DELOS SANTOS,
CARMINA M. DEGALA, EPHRAIM RALPH A. DELFIN, KAREN M. DEOCERA, CAROLINA C.
DIZON, MARCHEL S. ESQUEJJO, JOCELYN L. ESTROBO, MINERVA S. FALLARME,
HERNANE C. FERMOCIL, RACHEL B. FETIZANAN, SAMUEL A. FLORENTINO, MENCHIE R.
FRANCISCO, ERNESTO U. GAMIEL,
15
MACARIO RODOLFO N. GARCIA, JOEL S. GARMINO,
LESTER MARK Z. GATCHALIAN, MA. JINKY P. GELERA, MA. TERESA G. GONZALES,
GONZALO G. GUINIT, EMILY H. GUINO-O, FERDINAND S. HABIJAN, JUN G. HERNANDEZ,
LOURDES D. IBEAS, MA. ANGELA L. JALANDDONI, JULIE T. JORNACION, MANUEL C. LIM,
MA. LOURDES A. LIM, EMERSON V. LUNA, NOLASCO B. MACATANGAY, NORMAN C.
MANACO, CHERRY LOU B. MANGROBANG, MARASIGAN G. EDMUNDO, ALLEN M.
MARTINEZ, EMELITA C. MONTANO, ARLENE P. NOBLE, SHIRLEY A. ONG, LOTIZ E. ORTIZ
LUIS, PABLITO M. PALO, MARY JAINE
16
D. PATINO, GEOFFREY T. PRADO, OMEGA
MELANIE M. QUINTANO, ANES A. RAMIREZ, RICARDO D. RAMIREZ, DANIEL O. RAQUEL,
RAMON B. REYES, SALVACION N. ROGADO, ELMOR R. ROMANA, JR., LOURDES U.
SALVADOR, ELMER S. SAYLON, BENHARD E. SIMBULAN, MA. TERESA S. SOLIS, MA.
LOURDES ROCEL E. SOLIVEN, EMLY C. SUYAT, EDGAR ALLAN P. TACSUAN, RAYMONDD
D. TANAY, JOCELYN Y. TAN, CANDIDO G. TISON, MA. THERESA O. TISON, EVELYN T.
UYLANGCO, CION E. YAP, MA. OPHELIA C. DE GUZMAN, MA. HIDELISA P. IRA, RAYMUND
MARTIN A. ANGELES, MERVIN S. BAUTISTA, ELENA R. CONDEVILLAMAR, CCHERRY T. CO,
LEOPOLDO V. DE LA ROSA, DOROTEO S. FROILAN, EMMANUEL B. GLORIA, JULIETE L.
JUBAC, and ROSEMARIE L. TANG, Respondents.
x - - - - - - - - - - - - - - - - - - - - - - - x
G.R. No. 157506
SOLIDBANK UNION, EVANGELINE J. GABRIEL, EVELYN A. SIA, TERESITA C. LUALHATI,
ISAGANI P. MAKISIG, REY S. PASCUA, MA. VICTORIA M. VIDALLON, AUDREY A. ALJIBE,
REY ANTHONY AMPARADO, JOSE A. ANTENOR, AUGUSTO D. ARANDIA, JR., RUTH SHIELA
M. BAGADIONG, STEVE D. BERING, ALAN ROY I. BUYCO, MANOLO T. CABRERA, RACHEL
M. CASTILLO, VICTOR O. CHUA, VIRGILIO Y. CO, JR., LEOPOLDO S. DABAY, HUBERT V.
DIMAGIBA, MA. LOURDES CECILIA B. EMPERADOR, FELIX B. ESTACIO, JR., JULIETA T.
ESTRADA, MARICEL G. EVALLA, JOSE G. GUISADIO, ALEXANDER A. MARTINEZ,
JOSEPHINE M. ONG, EDNA M. SARONG, GREGORIO S. SECRETARIO, ARVIN D. VALENCIA,
FERMIN JOSEPH B. VENTURA, JR., EMMANUEL C. YAPTANGCO, ERNESTO C. ZUIGA,
ALVIN E. BARICANOSA, GEORGE MAXIMO P. BARQUEZ, MA. ELENA G. BELLO, MICHAEL
MATTHEW B. BILLENA, NEPTALI A. CADDARAO, FERDINAND MEL S. CAPULONG, MA.
EDNA V. DATOR, RANIEL C. DAYAO, RAGCY L. DE GUZMAN, LUIS E. DELOS SANTOS,
CAROLINA C. DIZON, JOCELYN L. ESTROBO, MINERVA S. FALLARME, HERNANE C.
FERMOCIL, RACHEL B. FETIZANAN, SAMUEL A. FLORENTINO, JOEL S. GARMINO, LESTER
MARK Z. GATCHALIAN, GONZALO GUINIT, FERDINAND S. HABIJAN, JUN G. HERNANDEZ,
MA. ANGELA L. JALANDONI, MA. LOURDES A. LIM, EMERSON V. LUNA, NOLASCO B.
MACATANGAY, NORMAN C. MAACO, CHERRY LOU MANGROBANG, EDMUNDO G.
MARASIGAN, ALLEN M. MARTINEZ, ARLENE P. NOBLE, SHIRLEY A. ONG, LOTIZ E. ORTIZ
LUIS, PABLITO M. PALO, GEOFFREY T. PRADO, OMEGA MELANIE M. QUINTANO, AGNES A.
RAMIREZ, RICARDO D. RAMIREZ, DANIEL O. RAQUEL, RAMON B. REYES, SALVACIO N.
ROGADO, ELMOR R. ROMANA, JR., LOURDES U. SALVADOR, ELMER S. SA YLON,
BENNARD E. SIMBULAN, MA. LOURDES ROCEL E. SOLIVEN, EMILY C. SUYAT, RAYMOND D.
TANAY, .JOCELYN Y. TAN, CANDIDO G. TISON, MA. THERESA O. TISON, EVELYN T.
UYLANGCO, MERVIN S. BAUTISTA, LEOPOLDO V. DE LA ROSA, DOROTEO S. FROILAN and
JULIETE L. JUBAC, Petitioners.
vs.
METROPOLITAN BANK AND TRUST COMPANY, Respondent.
D E C I S I O N
DEL CASTILLO, J .:
The issues presented in these consolidated petitions have been squarely resolved by this Court in its
November 15, 2010 Decision in Solidbank Corporation v. Gamier,
17
The said Decision
constitutes res judicata in these consolidated petitions.
These petitions for review on certiorari assail the conflicting Decision of the Court of Appeals (CA) in
CA-G.R. SP Nos. 68054 and 68998. In CA-G.R. SP No. 68054, the CAs Second Division ruled that
the public demonstration conducted by the employees on April 3, 2000 after the Secretary of Labor
assumed jurisdiction over the labor dispute was a valid exercise of their constitutional rights to
freedom of expression, to peaceful assembly, and to petition the government for redress of their
grievances and, hence, their dismissal from employment was illegal. Said division of the CA thus set
aside the ruling of the National Labor Relations Commissions (NLRCs) Second Division and
reinstated the Decision
18
dated March 16, 2001 of Labor Arbiter Luis D. Flores (Labor Arbiter Flores).
In CA-G.R. SP No. 68998, however, the Special Third Division of the CA held that the employees
staged an illegal strike. It also held that Metropolitan Bank and Trust Company (Metrobank) could
not be held jointly and solidarily liable with Solidbank Corporation (Solidbank) and First Metro
Investment Corporation (First Metro) because each of them have separate and distinct legal
personalities.
Factual Antecedents
Solidbank Union (Union) was a legitimate labor organization and the duly certified sole bargaining
representative of all rank-and-file employees of Solidbank. On November 17, 1999, the Union and
Solidbank negotiated for a new economic package for the remaining two years of the 1997-2001
collective bargaining agreement (CBA). However, the parties reached an impasse. Thus, on January
18, 2000, then Secretary of Labor Bienvenido E. Laguesma (Secretary Laguesma) assumed
jurisdiction over the dispute and enjoined the parties from holding a strike or lockout or any activity
which might exacerbate the situation.
19

Thereaftter, on March 24, 2000, Secretary Laguesma issued an Order
20
disposing as follows:
WHEREFORE, premises considered, judgment is hereby issued:
a. Directing Solidbank Corporation and Solidbank Union to conclude their Collective Bargaining
Agreement for the years 2000 and 2001, incorporating the dispositions above set forth;
b. Dismissing the unfair labor practice charge against Solidbank Corporation;
c. Directing Solidbank to deduct or check-off from the employees lump sum payment an amount
equivalent to seven percent (7%) of their economic benefits for the first (1st) year, inclusive of
signing bonuses, and to remit or turn over the said sum to the Unions authorized representative,
subject to the requirements of check-off;
d. Directing Solidbank to recall the show-cause memos issued to employees who participated in the
mass actions if such memos were in fact issued.
SO ORDERED.
21

Displeased with Secretary Laguesmas ruling, about 712 union members and officers skipped work
in the morning of April 3, 2000 (a Monday) and trooped to his office in Intramuros, Manila, not only to
accompany their lawyer in filing the Unions Motion for Reconsideration but also to stage a brief
public demonstration. Other rank and file employees in the provincial branches of Solidbank also
absented themselves from work that day.
Solidbank also filed its Motion for Reconsideration. With respect to the mass demonstration
conducted by its employees, however, Solidbank perceived the same to be an illegal strike, a
deliberate abandonment of work calculated to paralyze its operations. Thus, Solidbank issued a
memorandum
22
informing all the participants in the mass demonstration that they had put their jobs
at risk. In another memorandum, Solidbank informed the employees that the bank was willing to take
back those who would report for work on April 6, 2000.
About 513 of the striking employees obliged with the second memorandum. With regard to the 199
employees who did not comply with the aforesaid memorandum, another memorandum
23
was issued
requiring them to explain within 24 hours from notice thereof why they should not be dismissed from
employment. Pending receipt of explanations, Solidbank placed the concerned employees under
preventive suspension status.
On April 17, 2000, Solidbank dismissed all 199 employees.
24
Eventually, however, it re-admitted 70
employees, bringing down the number of dismissed employees to 129. On varying dates, some 21
employees executed a Release, Waiver, and Quitclaim
25
in favor of Solidbank.
On May 8, 2000, Secretary Laguesma issued an Order
26
denying the motions for reconsideration
separately filed by Solidbank and the Union.
Meanwhile, First Metro and Solidbank entered into a merger agreement, with Solidbank as the
surviving entity and First Metro ceasing to exist as a corporation. However, the surviving corporation
was renamed First Metro Investment Corporation. Subsequently, Metrobank bought all banking-
related assets and liabilities of Solidbank (renamed First Metro), which ceased operations on August
31, 2000.
Proceedings before the Labor Arbiter
On July 21, 2000, the Union, together with its members who were dismissed by Solidbank
(hereinafter collectively referred to as complainants), filed, thru E. R. Jabla Law Offices, a Complaint
for illegal dismissal
27
against Solidbank, its President and Chief Executive Officer Deogracias N.
Vistan (Vistan), Senior Vice-President Diwata Castanos (Castanos), and First Metro.This complaint
was subsequently amended by dropping 32
28
individual complainants and Castanos and by
impleading Metrobank and its Assistant Vice-President for Human Resources Edgardo Mendoza, Jr.
(Mendoza) as party respondents. Complainants contended that the mass demonstration they
conducted was not a strike but was a legitimate exercise of their constitutional rights to freedom of
expression, to peaceful assembly and to petition the government for redress of their grievances.
On September 29, 2000, Sycip Salazar Hernandez and Gatmaitan, representing the respondents in
the Amended Complaint, filed a Position Paper with Motion to Dismiss (with respect to several
individual complainants).
29
Said law firm asserted that Solidbank validly terminated the employment
of those who participated in the strike which was illegal. And since the dismissal of said employees
was based on justifiable cause, the Unions claim of unfair labor practice had no leg to stand on.
Said counsel further pointed out that on August 31, 2000, Solidbank ceased its banking operations.
Consequently, pursuant to Article 283 of the Labor Code,
30
all of its employees were terminated from
employment on said date.
Ruling of the Labor Arbiter
On March 16, 2001, Labor Arbiter Flores rendered his Decision
31
declaring the disputed April 3, 2000
incident not a strike but a mere expression of the employees displeasure over the Secretarys ruling;
that the 24-hour deadline imposed by Solidbank within which the employees should submit their
written explanation was not sufficient to give them reasonable opportunity to refute the charges
against them; and that Solidbank was guilty of unfair labor practice for using union membership as
one of the bases for recalling or terminating employment. Accordingly, he awarded full backwages
and attorneys fees in favor of the employees. The dispositive portion of the Labor Arbiters Decision
reads as follows:
WHEREFORE, premises considered, judgment is hereby rendered declaring complainants
dismissal as illegal and unjustified and ordering the respondents Solid Bank Corporation and/or its
successor-in-interest First Metro Investment Corporation and/or Metropolitan Bank and Trust
Company and/or Deogracias Vistan and/or Edgardo Mendoza to reinstate complainants to their
former positions. Concomitantly, said respondents are hereby ordered to jointly and severally pay
the complainants their full backwages and other employees benefits from the time of their dismissal
up to the date of their actual reinstatement; payment of ten (10%) percent attorneys fees; payment
of ONE HUNDRED FIFTY THOUSAND PESOS (P 150,000.00) each as moral damages and ONE
HUNDRED THOUSAND PESOS (P 100,000.00) each as exemplary damages which are computed,
at the date of this decision in the amount of THIRTY THREE MILLION SEVEN HUNDRED NINETY
FOUR THOUSAND TWO HUNDRED TWENTY TWO PESOS and 80/100 (P 33,794,222.80), by the
Computation and Examination Unit of this branch and becomes an integral part of this Decision.
SO ORDERED.
32

Then on April 26, 2001, complainants filed an Urgent Motion for the Issuance of A Writ of
Execution
33
seeking the immediate enforcement of the Labor Arbiters Decision insofar as the
reinstatement aspect was concerned.
Proceedings before the National Labor Relations Commission
Solidbank and Metrobank separately filed their appeal. In its Memorandum of Appeal,
34
Solidbank
imputed to Labor Arbiter Flores grave abuse of discretion in concluding that the concerted action of
the complainants was a mere expression of displeasure and not a strike in defiance of Secretary
Laguesmas assumption order. Solidbank likewise alleged that the Labor Arbiter erred in holding that
it was guilty of unfair labor practice; that complainants were denied due process of law; that the 21
individual complainants who voluntarily settled their claims against the bank were still entitled to the
avails of the suit; that complainants were entitled to damages and attorneys fees; and, that the
officers of the bank were solidarily liable with it.
Metrobank, for its part, argued that it had a separate and distinct personality from Solidbank and
First Metro and, hence, could not be held solidarily liable with said entities. It also claimed that the
labor tribunal did not acquire jurisdiction over its person because it was not served with summons.
Metrobank stressed that it never engaged the services of Sycip Salazar Hernandez and Gatmaitan
and only learned of the pending case when it was informed by First Metro about it. For these
reasons, Metrobank contended that the assailed Decision of the Labor Arbiter was null and void
insofar as it was concerned.
Metrobank likewise claimed that the complaint should have been outrightly dismissed for violating
the rule against forum shopping, as six
35
of the complainants had earlier filed illegal dismissal cases.
Moreover, each of the complainants failed to sign the certificate of non-forum shopping. It also
echoed the contentions of Solidbank contained in the latters Memorandum of Appeal.
On May 21, 2001, the Labor Arbiter issued a Partial Writ of Execution,
36
ordering the reinstatement
of the dismissed employees to their former positions. Whereupon, Metrobank filed a
Motion
37
seeking to restrain the enforcement of said writ.
Solidbank likewise filed an Urgent Motion (to Quash or Recall Writ of Execution),
38
claiming that the
positions previously held by the complainants were no longer available because Solidbank had
already ceased operations.
The complainants thereafter filed their Answer (To Respondents-Appellants Memoranda of
Appeal).
39

On July 23, 2001, the NLRCs Second Division rendered its Decision
40
finding the dismissal of the
complainants valid. It opined that the mass action held on April 3, 2000 was a strike within the
contemplation of Article 212(o)
41
of the Labor Code and in violation of the Secretary of Labors
January 18, 2000 assumption order. Notably, however, the NLRC Second Division still awarded
separation benefits in favor of the complainants on equitable grounds.
The NLRC Second Division likewise ruled that Solidbank did not interfere with complainants right to
self-organization and, hence, did not commit unfair labor practice. It also dismissed the complaint
with respect to complainant Jose A. Antenor for violating the rule against forum shopping, as well as
with respect to the 21 individual complainants who already executed Release, Waiver and Quitclaim.
The Second Division of the NLRC disposed as follows:
WHEREFORE, premises considered, the decision of the Labor Arbiter is hereby VACATED and SET
ASIDE and a new one entered dismissing the complaint for illegal dismissal and unfair labor practice
for lack of merit. As equitable relief, respondents are hereby ordered to pay complainants separation
benefits as provided under the CBA at least one (1) month pay for every year of service whichever is
higher [sic].
SO ORDERED.
42

The banks and the complainants filed their respective motions for reconsideration but these were all
denied by the NLRC in its Resolution
43
dated September 28, 2001.
On November 29, 2001, Labor Arbiter Flores issued an Order and an Alias Partial Writ of Execution
directing the banks to pay complainants their accrued wages and other employees benefits
computed from the date of his Decision up to the date of the reversal thereof by the NLRC Second
Division on July 23, 2001.
Incidentally, other similarly situated employees
44
filed their separate complaints for illegal dismissal
against Solidbank, which were consolidated and assigned to Labor Arbiter Potenciano Canizares, Jr.
(Canizares). On November 14, 2000, Labor Arbiter Canizares issued a Decision dismissing the
complaints. In a Decision dated January 31, 2002, however, the NLRCs Third Division reversed the
ruling of the Labor Arbiter and ruled in favor of said complainants. Thus:
WHEREFORE, the decision appealed from is hereby SET ASIDE and a new one entered finding the
respondent Solidbank Corporation liable for the illegal dismissal of complainants Ernesto U. Gamier,
Elena P. Condevillamar, Janice L. Arriola and Maria Ophelia C. De Guzman, and ordering the
respondent bank to reinstate the complainants to their former positions without loss of seniority
rights and to pay full backwages reckoned from the time of their illegal dismissal up to the time of
their actual/payroll reinstatement. Should reinstatement not be feasible, respondent bank is further
ordered to pay in accordance with the provisions of the subsisting Collective Bargaining Agreement.
All other claims are DISMISSED for lack of merit.
SO ORDERED.
45

Proceedings before the Court of Appeals</p>
From the conflicting Decisions of the Second and Third Divisions of the NLRC stemmed five
interrelated petitions for certiorari separately filed by the parties before the CA.
CA-G.R. SP Nos. 67730 and 70820
CA-G.R. SP No. 67730 was a petition for certiorari filed by Solidbank, Vistan and Mendoza seeking
to nullify the July 23, 2001 Decision of the NLRCs Second Division insofar as it ordered Solidbank to
pay separation pay. CA-G.R. SP No. 70820, on the other hand, was another petition
for certiorari filed by Solidbank praying for the reversal of the January 31, 2002 Decision of the
NLRCs Third Division. These cases were consolidated and assigned to the CAs Twelfth Division. In
its March 10, 2003 Decision,
46
the CA Twelfth Division denied both petitions on the ground that the
mass action staged by the complainants was a legitimate exercise of their right to free expression.
Its dispositive portion reads:
WHEREFORE, the twin petitions are hereby DENIED. The dismissal of private respondents are
hereby declared to be illegal. Consequently, petitioner is ordered to reinstate private respondents to
their former position, consonant with the Decision of this Court in CA-G.R. SP No. 68054.
SO ORDERED.
47

Solidbank then filed with this Court petitions for review on certiorari questioning the above-
mentioned Decision of the CA Twelfth Division. These petitions docketed as G.R. Nos. 159460 and
159461 were consolidated and raffled to the Third Division of this Court. On November 15, 2010, the
Courts Third Division rendered its Decision which, as mentioned in our opening paragraph,
constitutes res judicata in these consolidated petitions.
CA-G.R. SP No. 68054
In their petition for certiorari in CA-G.R. SP No. 68054, complainants, thru Atty. Potenciano A.
Flores, Jr., assailed the July 23, 2001 Decision of the NLRCs Second Division. On August 29, 2002,
the Second Division of the CA rendered its Decision
48
finding the April 3, 2000 mass demonstration a
valid exercise of complainants right to petition the government for redress of their grievances.
Thus:
WHEREFORE, premises considered, the instant petition for certiorari is GRANTED. The Labor
Arbiters decision, except with respect to the award of moral and exemplary damages which are
heretofore lowered to PhP 50,000.00 and PhP 25,000.00, respectively, is hereby REINSTATED.
SO ORDERED.
49

Solidbank and Metrobank separately moved for reconsideration,
50
which drew complainants
Consolidated Comment.
51
In a Resolution
52
dated January 30, 2003, the CA denied both motions.
The August 29, 2002 Decision of the CAs Second Division was assailed by Metrobank and
Solidbank before this Court in two separate petitions for review on certiorari G.R. No. 157169 and
G.R. No. 157327, respectively.
CA-G.R. SP No. 68349
Atty. Emmanuel R. Jabla (Atty. Jabla), in collaboration with Attys. Federico C. Leynes and Jose C.
Espinas, and in representation of five individual complainants, initiated CA-G.R. SP No.
68349.
53
However, on April 24, 2002, the CAs Special Tenth Division issued a Resolution
54
outrightly
dismissing the petition on the following grounds: (i) there was no proof that the signatories in the
verification and certification against forum shopping were authorized to sign the same; (ii) violation of
the rule against forum shopping; and, (iii) non-compliance with Section 11, Rule 13 of the Rules of
Court.
55

A motion for reconsideration was filed, but the same was denied in a Resolution
56
dated October 16,
2002.
Subsequently, said five complainants still represented by Jabla Damian and Associates filed with
this Court a Motion for Extension of Time to File Petition for Review on Certiorari,
57
only to withdraw
it afterwards. Accordingly, on February 5, 2003, this Court declared the case terminated.
58

CA-G.R. SP No. 68998
CA-G.R. SP No. 68998 was a petition for certiorari with prayer for injunctive relief filed by Metrobank
seeking to nullify the Decision of the Second Division of the NLRC insofar as it awarded separation
benefits in favor of the complainants.
During the pendency of said petition, the NLRC issued on January 9, 2002 a Notice of
Garnishment
59
for the implemention of Labor Arbiter Floress March 16, 2001 Decision against
Solidbank, First Metro or Metrobank.
On January 14, 2002, the Fourth Division of the CA, thru Justice Bernardo P. Abesamis, issued a
Resolution
60
granting Metrobanks request for a temporary restraining order. Then on February 20,
2002, upon Metrobanks filing of a Supplemental Motion, the Special Fourth Division of the CA
issued another Resolution
61
granting Metrobanks prayer for the issuance of a writ of preliminary
injunction. It enjoined the implementation of Labor Arbiter Floress Decision,
62

November 29, 2001 Order and Alias Partial Writ of Execution, as well as the NLRC Second
Divisions July 23, 2001 Decision
63
and September 28, 2001 Resolution.
64

In view of this turn of events, and believing that they can no longer expect fair and impartial justice,
complainants filed a Motion to Inhibit Justice Bernardo P. Abesamis.
65
They averred that the
issuance of the two resolutions granting Metrobanks prayer for injunctive relief was a blatant display
of Justice Abesamiss bias and prejudice, if not gross ignorance of the law. Complainants also
sought reconsideration of the above-mentioned resolutions on the ground that the reinstatement
aspect of Labor Arbiter Floress Decision was immediately executory.1wphi1
In a Resolution
66
dated May 30, 2002, however, the CAs Third Division denied both motions,
ratiocinating that the Labor Codes provision on the executory nature of the reinstatement aspect,
even pending appeal, is not applicable to cases pending with the CA. With regard to complainants
motion to inhibit, the CA opined that the reasons stated therein do not constitute grounds for
disqualification or inhibition of judges.
With the denial of their motion for reconsideration to set aside the CAs resolutions granting
injunctive relief, complainants filed with this Court on July 18, 2002 a petition for review on certiorari.
This was docketed as G.R. No. 153799.
Pending resolution of G.R. No. 153799, the CAs Special Third Division rendered its Decision
67
in
CA-G.R. SP No. 68998 in favor of Metrobank. It held that since Metrobank was not duly served with
summons, the Decisions of the labor tribunals insofar as said bank is concerned are null and void. In
addition, the CA Special Third Division ruled that complainants are not entitled to separation pay
because the mass demonstration they conducted on April 3, 2000 violated Secretary Laguesmas
assumption order. Moreover, even assuming that complainants are entitled to separation pay, the
CA opined that Metrobank cannot be held solidarily liable because there was no merger between
Metrobank and Solidbank. Metrobank, which has a separate and distinct personality of its own,
merely bought the banking-related assets and liabilities of Solidbank.
The dispositive portion of the July 26, 2002 Decision of the CA Special Third Division in CA-G.R. SP
No. 68998 reads:
WHEREFORE, premises considered, the instant petition is hereby GIVEN DUE COURSE and
GRANTED. The Decision of the National Labor Relations Commission dated July 23, 2001 with
respect to the portion reading: "the decision of the Labor Arbiter is hereby VACATED and SET
ASIDE and a new one entered dismissing the complaint for illegal dismissal and unfair labor practice
for lack of merit", is AFFIRMED; and the portion of the same decision which reads: "As equitable
relief, respondents are hereby ordered to pay complainants separation benefits as provided under
the CBA at least one (1) month pay for every year of service whichever is higher" [sic], is
REVERSED and SET ASIDE.
SO ORDERED.
68

Complainants filed a Motion for Reconsideration
69
but the same was denied in the Resolution
70
dated
March 6, 2003. This prompted complainants to file with this Court a Petition for Review on Certiorari,
which was docketed as G.R. No. 157506.
Issues
G.R. No. 153799
Citing Article 223 of the Labor Code,
71
complainants contend that the reinstatement aspect of Labor
Arbiter Floress ruling is immediately executory, even pending appeal.
In resisting the petition, Metrobank counter-argues that complainants resort to a petition for review
on certiorariunder Rule 45 of the Rules of Court is improper because it is available only to correct
judgment or final order or resolution of the CA. Here, what complainants are assailing are
interlocutory resolutions of the CA granting Metrobanks prayer for injunctive relief. Also, with the
promulgation of the CA Special Third Divisions Decision in CA-G.R. SP No. 68998 on July 26, 2002,
this petition (G.R. No. 153799) has become moot and academic.
72

Metrobank likewise argues that at the time the controversy reached the CA, the Decision of Labor
Arbiter Flores was no longer on appeal. Therefore, the CAs Special Third Division was correct in
holding that the provision of Article 223 of the Labor Code was then no longer applicable.
Furthermore, Metrobank asserts that the labor tribunals did not acquire jurisdiction over its person
and that it cannot be held solidarily liable with Solidbank and First Metro.
G.R. No. 157506
In their petition, complainants contend, among others, that the April 3, 2000 mass demonstration
was a legitimate exercise of their constitutional rights to freedom of expression, to peaceful
assembly and to petition the government for redress of wrong; that Metrobank was not deprived of
its right to due process, and that it should be held solidarily liable with its co-petitioners by reason of
corporate affinity; that the Decision in CA-G.R. SP No. 68998 violated several constitutional
provisions relative to labor; that the punishment of dismissal imposed upon the
129 employees is not commensurate to their half-day absence from work; that they believed in good
faith that the April 3, 2000 mass demonstration was an ordinary protest action directed against
Secretary Laguesma; and that Solidbank is guilty of illegal dismissal for hastily and unceremoniously
carrying out their mass dismissal from work.
Complainants further state that Solidbank did not reinstate the 129 employees because of their
membership in the union, which amounts to interference with the employees right to self-
organization and, hence, constitutes unfair labor practice; that Solidbank is equally guilty of illegal
lockout for refusing to admit them back to work; that the 24 hours given them to show cause was
unreasonably short; and worse, their preventive suspension practically prevented them from
submitting their explanation because they were barred entry to the banks premises.
Finally, complainants seek reinstatement of the award of damages granted them by Labor Arbiter
Flores. They claim that Solidbank violated Article 277(b) of the Labor Code requiring employers to
observe and comply with the two-notice rule and to conduct an inquiry before dismissing their
employees. Hence, in view of these wrongful omissions in effecting their dismissal, Vistan and
Mendoza should be held jointly and severally liable with Solidbank, First Metro and Metrobank.
G.R. Nos. 157169 and 157327
Metrobank and Solidbank separately filed their respective petitions for review on certiorari assailing
the August 29, 2002 Decision
73
of the CAs Second Division in CA-G.R. SP No. 68054. On April 9,
2003, these petitions docketed as G.R. Nos. 157169 and 157327 were consolidated.
74

In G.R. No. 157169, Metrobank maintains that the April 3, 2000 mass demonstration was an illegal
strike; that the person against whom the mass action is directed as well as the true intention of the
complainants in staging the mass action, is immaterial and has no bearing in determining whether
said mass action is an illegal strike; that once the Secretary of Labor assumed jurisdiction over the
dispute, the striking employees were prohibited from committing acts that would exacerbate the
situation; and the mass action did not only take place in front of the office of Secretary Laguesma but
also in front of Solidbanks Binondo branch and in the provinces.
75

Metrobank likewise insists that the CA Second Division should have outrightly dismissed CA-G.R.
SP No. 68054 because complainants violated the rule against forum shopping. For Metrobank, the
following circumstances indubitably constitute forum shopping:
7.24 Attys. Emmanuel R. Jabla, Federico C. Leynes and Jose C. Espinas continue to represent
Solidbank Union and its Members, despite the fact that Atty. Potenciano A. Flores, Jr. filed a similar
but allegedly separate Petition with the Court of Appeals docketed as CA-G.R. SP No. 68054. It
might be important to restate that the petition in CA-G.R. SP No. 68349 was already dismissed by
the Court of Appeals primarily on the ground of forum shopping and such dismissal was declared
final and executory by this Honorable Supreme Court in its Resolution in G.R. 156097 dated 05
February 2003. Nevertheless, Attys. Emmanuel R. Jabla, Federico C. Leynes and Jose C. Espinas
were not disturbed by such adverse decision because they are now using to the benefit of Solidbank
Union and its dismissed Members/employees the favorable decision obtained by Atty. Potenciano
Flores, Jr. in CA-G.R. SP No. 68054. x x x
x x x x
7.25 Furthermore, the Unions president, Evangeline J. Gabriel, after signing and verifying the
Petition in CA-G.R. SP No. 68054 prepared by Atty. Potenciano Flores, verified several pleadings
prepared by Attys. Emmanuel R. Jabla, Federico C. Leynes and Jose C. Espinas.
x x x x
7.26 If Attys. Emmanuel R. Jabla, Federico C. Leynes and Jose C. Espinas do not recognize Atty.
Potenciano Flores as the counsel of Solidbank Union and its Members/Employees, then they should
not recognize much less benefit from the favorable Decision obtained by Atty. Potenciano Flores in
CA-G.R. SP No. 68054.
76

Metrobank likewise contends that complainants are not entitled to moral damages because the
same are recoverable only where the dismissal or suspension of the employee was attended with
bad faith and fraud; or constituted an act oppressive to labor; or was done in a manner contrary to
morals, good customs or public policy. This, according to Metrobank, is absent in this case.
Metrobank also points out that the Second Division of the CA grievously erred in reinstating the
Decision of Labor Arbiter Flores with respect to those who (i) were excluded as party complainants,
(ii) were found guilty of forum shopping, or (iii) have executed quitclaims. Metrobank claims that
several Union members/ employees can no longer benefit from the reinstatement aspect of said
Labor Arbiters Decision, considering that 32
77
of them were dropped from the original list of
complainants, and that the NLRC had long ago considered the case dismissed insofar as they were
concerned. In addition, there were 21
78
employees who executed Release, Waiver and Quitclaim
documents discharging Solidbank, its parent company, and affiliate or subsidiary companies, from
any action, claim or other obligations arising from their employment with Solidbank. Thus, the NLRC
dismissed the complaint with respect to said 21 employees. This was never questioned by the
complainants in any of the cases that reached the CA.
Moreover, there were 35
79
individuals who were not included as party-petitioners in CA-G.R. SP No.
68054. But with the reinstatement of Labor Arbiter Floress Decision, these 35 individuals will benefit
therefrom despite the fact that they did not appeal Labor Arbiter Floress Decision to the NLRC.
Furthermore, additional 21
80
Union members were included as complainants in G.R. No. 157506
despite their non-inclusion as party complainants in CA-G.R. SP No. 68998. Citing People v.
Velez,
81
Metrobank asserts that said 21 new complainants are not real parties in interest in this case
and, hence, the same should be dismissed insofar as they are concerned.
Metrobank prays for the reversal of the August 29, 2002 Decision of the CAs Second Division in CA-
G.R. SP No. 68054.
With regard to G.R. No. 157327,
82
Solidbank claims that the CAs Second Division erred in
exercising certiorarijurisdiction over the NLRC because, as can be readily seen from its Decision,
there is nothing which says that the Second Division of the NLRC acted with grave abuse of
discretion amounting to lack or excess of jurisdiction in arriving at its conclusion. On the contrary, the
NLRCs Second Division Decision is supported by substantial evidence and, hence, should be
respected and accorded finality.
Solidbank stresses that complainants unjustified stoppage of work was actually an illegal strike and
violated Article 264(a). Hence, for knowingly participating in an illegal activity, complainants are
deemed to have lost their employment status.
Solidbank avers that the Second Division of the CA overlooked the fact that it had already ceased
banking operations since August 31, 2000. Hence, it is legally impossible for it to comply with said
courts Decision ordering the reinstatement of complainants to their former position.
Solidbank cries denial of due process claiming that it was not given the opportunity to file its
comment on complainants petition for certiorari. It alleges that on January 24, 2002 it filed a
Manifestation
83
informing the CA that there are two identical petitions for certiorari (CA-G.R. SP No.
68054 and CA-G.R. SP No. 68349) filed by the complainants and that while it was furnished a copy
of the petition in CA-G.R. SP No. 68349, complainants did not serve it with a copy of the petition in
CA-G.R. SP No. 68054. Acting on Solidbanks Manifestation, the CAs Special Second Division
issued a Resolution
84
dated June 14, 2002 dismissing CA-G.R. SP No. 68054 on the ground of
forum shopping. Nonetheless, upon complainants motion, the CA reinstated the petition and
forthwith declared it submitted for decision, oblivious of the fact that Solidbank was not served with a
copy of the petition in CA-G.R. SP No. 68054 nor given a chance to comment thereon.
85
To date,
complainants have yet to furnish Solidbank with a copy of said petition. Worse, the CA, relying on
complainants allegations, sent its notices, orders, and resolutions to Solidbanks former principal
office at 777 Paseo de Roxas, 1226 Makati City instead of at its new office address at First Metro
Investment Corporation, 2nd Floor, GT Tower International, Ayala Avenue corner H. V. dela Costa
St., Makati City.
Solidbank agrees with Metrobank in claiming that the CAs Second Division erred in ordering the
reinstatement of Labor Arbiter Floress Decision with respect to the 21
86
complainants who had
previously executed Release, Waiver and Quitclaim in the presence of Mr. Reynaldo R. Ubaldo, a
labor representative of the Labor Relations Division of DOLE.
In seeking to delete the award of damages, Solidbank invokes the principle of damnum absque
injuria. It contends that the law affords no remedy for damages resulting from an act which does not
amount to a legal injury or wrong. In the present case, since the dismissal of complainants is not a
wrong but in accordance with law and settled jurisprudence, complainants are not entitled to
damages.
Finally, in urging this Court to set aside the Decision of the CAs Second Division, Solidbank posits
that to sustain the CA would create an absurd situation wherein the extraordinary authority of the
Secretary of Labor under Article 263(g) of the Labor Code would be rendered nugatory.
On September 4, 2003, complainants filed thru Jabla Damian and Associates a Manifestation and
Motion
87
alleging, among others, that per attached Board Resolution
88
dated August 25, 2003
complainants terminated the services of Atty. Potenciano A. Flores, Jr. (Atty. Flores) as their counsel
for loss of trust and confidence. This drew Atty. Floress Comment/Counter-Manifestation and
Opposition to Motion,
89
claiming that what were stated in the Manifestation and Motion were
"malicious, grossly misleading and twisted allegations." Atty. Flores did not dispute the fact that the
original counsel of complainants was Jabla Damian and Associates, who appeared before the labor
tribunals. However, on October 20, 2001, the Union, through its President, wrote Atty. Jabla a letter
terminating his services as counsel for the Union and sent him (Atty. Flores) a copy of their
Kasunduan Bilang Abogado. Accordingly, complainants filed a Manifestation dated March 13, 2002
informing the CA in CA-G.R. SP No. 67730 that their counsel was Atty. Flores and that they did not
hire or engage the services of Atty. Jabla to represent them in said case. Atty. Flores likewise
averred that none of the complainants ever approached him to withdraw his appearance from any of
the cases he handled for the Union. With respect to the Board Resolution alluded to by Jabla
Damian and Associates, Atty. Flores posited that it was not valid because of the six members
composing the Union Board, only one of them affixed her signature thereto.
90
Atty. Flores averred
that
8.05.5 These lawyers did not represent the union, its officers and members, in the proceedings
before the two (2) divisions of the Court of Appeals chaired by Justices Rodrigo V. Cosico and
Romeo Brawner. Therefore, it is unethical for them to file a motion for issuance of an alias writ of
execution with the said labor arbiter relying on the decisions rendered by the two (2) divisions of the
Court of Appeals wherein they did not participate or exert any effort to reinstate the decision of Labor
Arbiter Luis Dizon Flores. Yet, they assisted the signatories to the said "Board Resolution" in the
immoral scheme to ease out the undersigned counsel from participating in the executorial stage of
the case at bar.
91

The counsels bickering did not end with Atty. Floress Comment/Counter-Manifestation. In its
Reply,
92
Jabla Damian and Associates retaliated by claiming that complainants never sent any word
terminating its legal services. Said law firm also alleged that:
5. Had the Union officers made clear their intention of terminating Atty. Jablas services, or had there
been a valid notice and substitution of counsel, the undersigned counsels would not have gone to
great lengths to file complainants petition for certiorari in the Court of Appeals in CA.-G.R. SP No.
68349 which they felt obligated to do, lest they would be accused of being remiss in their
professional duties as counsel.
6. At the time they filed their petition in the Court of Appeals, undersigned counsels were unaware
that some individual respondents had already gone to Atty. Flores to engage his services in filing
their petition for certiorari with the Court of Appeals which was eventually docketed therein as CA-
G.R. SP No. 68054.
7. Their belated discovery of this separate petition filed by Atty. Flores in behalf of some respondents
constrained the undersigned counsels to withdraw their appeal to the Supreme Court from the
decision of the Court of Appeals in CA-G.R. SP No. 68349 for fear that, in addition to the reasons
cited in their motion to withdraw, pursuing the same could only confuse the docket or adversely
affect the other proceeding in CA-G.R. SP No. 68054 which case had been filed earlier.
8. There is therefore no truth to Atty. Floress allegation that the period for its filing lapsed that is why
the undersigned counsels withdrew their petition for review with the Supreme Court.
9. Assuming without admitting that Atty. Flores did send a Notice of Appearance and Urgent
Manifestation and Motion to Atty. Jabla at his former office at Suite 2106 Cityland Condominium 10,
Tower 1, H. V. dela Costa Street corner Ayala Avenue, Makati City, this was only in connection with
the petition for certiorari filed by petitioner Solidbank Corporation in CA-G.R. SP No. 67730. There
was no similar notice in the petition filed by petitioner Metropolitan Bank & Trust Company in CA-
G.R. SP-UDK-4431 (68998) and in CA-G.R. SP No. 153799 [sic], the very petition filed by Atty.
Flores himself in behalf of some of the respondents.
10. Finally, it is improper for Atty. Flores to boast of his victory in the Court of Appeals as if the same
is a product of his uncommon brilliance. A cursory reading of Atty. Floress petition will reveal that it
contains nothing but a repetition or restatement of the arguments raised by the undersigned
counsels before the labor arbiter below. x x x
93

Jabla Damian and Associates also accused Atty. Flores of violating Canon 11 of the Canons of
Professional Responsibility for not conducting himself with courtesy, fairness and candor towards his
professional colleagues.
94

Then on January 18, 2005, complainant Jose Antenor filed his own Memorandum
95
alleging among
others that of the 19 employees of Solidbank Bacolod City Branch who joined the nationwide
expression of displeasure he was the only one who was dismissed. He also claims that his
suspension and eventual dismissal were not based on just or authorized cause; that he was not
accorded procedural due process; and that he is entitled to full backwages.
Our Ruling
At balance, supposedly, in these consolidated cases is the managements right to discipline its
employees who, without its permission, joined a public demonstration to protest the ruling of the
Secretary of Labor vis--vis the employees constitutional rights to freedom of expression, to
peaceful assembly and to petition the government for redress of their grievances. This issue,
however, had already been resolved and passed upon by this Court in its November 15, 2010
Decision in G.R. Nos. 159460 and 159461,
96
which reversed and set aside the March 10, 2003
Decision of the CAs Twelfth Division in CA-G.R. SP Nos. 67730 and 70820.
In G.R. Nos. 159460 and 159461, the Courts Third Division resolved the following issues: "(1)
whether the protest rally and concerted work abandonment/ boycott staged by the respondents
violated the Order dated January 18, 2000 of the Secretary of Labor; (2) whether the respondents
were validly terminated; and (3) whether the respondents are entitled to separation pay or financial
assistance."
97
In said November 15, 2010 Decision, this Court ruled that complainants concerted
mass action was actually a strike and not a legitimate exercise of their right to freedom of
expression;
98
that complainants violated the January 18, 2000 Order of Secretary Laguesma;
99
that
the union officers dismissal was valid;
100
and that petitioners therein failed to present proof that the
union members participated in the commission of an illegal act during the said strike;
101
hence, their
dismissal was unjustified.
102
This Court likewise specified the individual rights and liabilities of all the
parties, including those who were dropped from the original complaint;
103
had executed Release,
Waiver and Quitclaim;
104
did not appeal to the CA but, with the reinstatement of the Labor Arbiters
Decision, will still benefit from the appellate courts Decision;
105
and were included in the appeal
though not impleaded as parties in the original complaint.
106

The Courts Third Division likewise held in its November 15, 2010 Decision in G.R. Nos. 159460and
159461 that since reinstatement was no longer feasible due to the considerable lapse of time and
the closure of Solidbank, respondents therein were awarded separation pay equivalent to one-month
salary for every year of service. For those employees who executed quitclaims, their separation pay
should be net of the amounts they had already received.
107

As regards Metrobank, the Courts Third Division held that it cannot be held solidarily liable with
Solidbank because it is not Solidbanks successor-in-interest.
108
Vistan and Mendoza were likewise
not held solidarily liable with Solidbank, there being no showing that they acted with malice, ill-will, or
bad faith.
109
The dispositive portion of the said November 15, 2010 Decision reads:
WHEREFORE, the petitions are PARTLY GRANTED. The Decision dated March 10, 2003 of the
Court of Appeals in CA-G.R. SP Nos. 67730 and 70820 is hereby SET ASIDE. Petitioner Solidbank
Corporation (now FMIC) is hereby ORDERED to pay each of the above-named individual
respondents, except union officers who are hereby declared validly dismissed, separation pay
equivalent to one (1) month salary for every year of service. Whatever sums already received from
petitioners under any release, waiver or quitclaim shall be deducted from the total separation pay
due to each of them.
The NLRC is hereby directed to determine who among the individual respondents are union
members entitled to the separation pay herein awarded, and those union officers who were validly
dismissed and hence excluded from the said award.
No costs.
SO ORDERED.
110

The Decision of this Court in G.R. Nos. 159460 and 159461, therefore, constitutes res judicata to the
present consolidated cases. "Res judicata means a matter adjudged; a thing judicially acted upon or
decided; a thing or matter settled by judgment."
111
It denotes "that a final judgment or decree on the
merits by a court of competent jurisdiction is conclusive of the rights of the parties or their privies in
all later suits on all points and matters determined in the former suit."
112
For res judicata, in its
concept as a bar by former judgment to apply, the following must be present:
1. The former judgment or order is final;
2. It is rendered by a court having jurisdiction over the subject matter and the parties;
3. It is a judgment or an order on the merits; and,
4. There is between the first and the second action identity of parties, identity of subject
matter, and identity of causes of action.
113

The Decision of this Court in G.R. Nos. 159460 and 159461 became final and executory on May 20,
2011. It is a decision based on the merits of the case and rendered by this Court in the exercise of
its appellate jurisdiction after the parties invoked its jurisdiction. There is also, between the two sets
of consolidated cases, identity of the parties, subject matter and causes of action. The parties in
G.R. Nos. 159460 and 159461 are also impleaded as parties in these consolidated cases. And while
some of the parties herein are not included in G.R. Nos. 159460 and 159461, the same are only few.
In any event, it is well-settled that only substantial, and not absolute, identity of the parties is
required for res judicata to lie. "There is substantial identity of the parties when there is a community
of interest between a party in the first case and a party in the second case albeit the latter was not
impleaded in the first case."
114

With regard to identity of causes of action, it has been held that there is identity of causes of action
when the same evidence will sustain both actions or when the facts essential to the maintenance of
the two actions are identical.
115

Here, the bone of contention in both sets of consolidated cases boils down to the nature and
consequences of complainants April 3, 2000 mass action. The antecedent facts that gave rise to all
the cases were the same. Necessarily, therefore, the same evidence would sustain all actions. Such
similarity in the evidence required to sustain all actions is also borne out by the identity of the issues
involved in all these cases. While the parties have presented a plethora of arguments which we
earlier discussed at length, the same nonetheless boil down to the same crucial issues formulated in
G.R. Nos. 159460 and 159461.
G.R. No. 153799 is also barred by res judicata.
It should be recalled that in G.R. No. 153799, the complainants assailed the Resolutions dated
January 14, 2002
116
and February 20, 2002
117
of the CAs Fourth Division granting Metrobanks
request for injunctive reliefs. They claimed that the reinstatement aspect of the Labor Arbiters
Decision is immediately executory. Hence, they are entitled to backwages from the time the Labor
Arbiter promulgated his Decision until it was reversed by the NLRC.
As discussed above, however, the November 15, 2010 Decision of this Court in G.R. Nos. 159460
and 159461 already adjudicated the respective rights and liabilities of the parties. Said Decision
pronouncing the monetary awards to which the parties herein are entitled became final and
executory on May 20, 2011. Under the rule on immutability of judgment, this Court cannot alter or
modify said Decision. It is a well-established rule that once a judgment has become final and
executory, it is no longer susceptible to any modification.
118

On a final note, we find it lamentable that while complainants are embroiled in a perturbing legal
battle, their counsels still manage to quibble over money, unabashedly unmindful that their bickering
would only further muddle the already complicated issues in these cases. If any one of them truly
believes that the other is guilty of unethical conduct, then he should bring the appropriate action
before the proper forum.
WHEREFORE, these consolidated petitions are DISMISSED. No costs.
SO ORDERED.
MARIANO C. DEL CASTILLO
Associate Justice


Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 196539 October 10, 2012
MARIETTA N. PORTILLO, Petitioner,
vs.
RUDOLF LIETZ, INC., RUDOLF LIETZ and COURT OF APPEALS Respondents.
D E C I S I O N
PEREZ, J .:
Before us is a petition for certiorari assailing the Resolution
1
dated 14 October 2010 of the Court of
Appeals in CA-G.R. SP No. I 065g I which modified its Decision
2
dated 31 March 2009, thus allowing
the legal compensation or petitioner Marietta N. Portillo's (Portillo) monetary claims against
respondent corporation Rudolf Lietz, Inc.'s (Lietz Inc.)
3
claim for liquidated damages arising from
Portillos alleged violation of the "Goodwill Clause" in the employment contract executed by the
parties.
The facts are not in dispute.
In a letter agreement dated 3 May 1991, signed by individual respondent Rudolf Lietz (Rudolf) and
conformed to by Portillo, the latter was hired by the former under the following terms and conditions:
A copy of [Lietz Inc.s] work rules and policies on personnel is enclosed and an inherent part of the
terms and conditions of employment.
We acknowledge your proposal in your application specifically to the effect that you will not engage
in any other gainful employment by yourself or with any other company either directly or indirectly
without written consent of [Lietz Inc.], and we hereby accept and henceforth consider your proposal
an undertaking on your part, a breach of which will render you liable to [Lietz Inc.] for liquidated
damages.
If you are in agreement with these terms and conditions of employment, please signify your
conformity below.
4

On her tenth (10th) year with Lietz Inc., specifically on 1 February 2002, Portillo was promoted to
Sales Representative and received a corresponding increase in basic monthly salary and sales
quota. In this regard, Portillo signed another letter agreement containing a "Goodwill Clause:"
It remains understood and you agreed that, on the termination of your employment by act of either
you or [Lietz Inc.], and for a period of three (3) years thereafter, you shall not engage directly or
indirectly as employee, manager, proprietor, or solicitor for yourself or others in a similar or
competitive business or the same character of work which you were employed by [Lietz Inc.] to do
and perform. Should you breach this good will clause of this Contract, you shall pay [Lietz Inc.] as
liquidated damages the amount of 100% of your gross compensation over the last 12 months, it
being agreed that this sum is reasonable and just.
5

Three (3) years thereafter, on 6 June 2005, Portillo resigned from Lietz Inc. During her exit interview,
Portillo declared that she intended to engage in businessa rice dealership, selling rice in
wholesale.
On 15 June 2005, Lietz Inc. accepted Portillos resignation and reminded her of the "Goodwill
Clause" in the last letter agreement she had signed. Upon receipt thereof, Portillo jotted a note
thereon that the latest contract she had signed in February 2004 did not contain any "Goodwill
Clause" referred to by Lietz Inc. In response thereto, Lietz Inc. categorically wrote:
Please be informed that the standard prescription of prohibiting employees from engaging in
business or seeking employment with organizations that directly or indirectly compete against [Lietz
Inc.] for three (3) years after resignation remains in effect.
The documentation you pertain to is an internal memorandum of your salary increase, not an
employment contract. The absence of the three-year prohibition clause in this document (or any
document for that matter) does not cancel the prohibition itself. We did not, have not, and will not
issue any cancellation of such in the foreseeable future[.] [T]hus[,] regretfully, it is erroneous of you
to believe otherwise.
6

In a subsequent letter dated 21 June 2005, Lietz Inc. wrote Portillo and supposed that the exchange
of correspondence between them regarding the "Goodwill Clause" in the employment contract was a
moot exercise since Portillos articulated intention to go into business, selling rice, will not compete
with Lietz Inc.s products.
Subsequently, Lietz Inc. learned that Portillo had been hired by Ed Keller Philippines, Limited to
head its Pharma Raw Material Department. Ed Keller Limited is purportedly a direct competitor of
Lietz Inc.
Meanwhile, Portillos demands from Lietz Inc. for the payment of her remaining salaries and
commissions went unheeded. Lietz Inc. gave Portillo the run around, on the pretext that her salaries
and commissions were still being computed.
On 14 September 2005, Portillo filed a complaint with the National Labor Relations Commission
(NLRC) for non-payment of 1 months salary, two (2) months commission, 13th month pay, plus
moral, exemplary and actual damages and attorneys fees.
In its position paper, Lietz Inc. admitted liability for Portillos money claims in the total amount of
P110,662.16. However, Lietz Inc. raised the defense of legal compensation: Portillos money claims
should be offset against her liability to Lietz Inc. for liquidated damages in the amount of
869,633.09
7
for Portillos alleged breach of the "Goodwill Clause" in the employment contract when
she became employed with Ed Keller Philippines, Limited.
On 25 May 2007, Labor Arbiter Daniel J. Cajilig granted Portillos complaint:
WHEREFORE, judgment is hereby rendered ordering respondents Rudolf Lietz, Inc. to pay
complainant Marietta N. Portillo the amount of Php110,662.16, representing her salary and
commissions, including 13
th
month pay.
8

On appeal by respondents, the NLRC, through its Second Division, affirmed the ruling of Labor
Arbiter Daniel J. Cajilig. On motion for reconsideration, the NLRC stood pat on its ruling.
Expectedly, respondents filed a petition for certiorari before the Court of Appeals, alleging grave
abuse of discretion in the labor tribunals rulings.
As earlier adverted to, the appellate court initially affirmed the labor tribunals:
WHEREFORE, considering the foregoing premises, judgment is hereby rendered by
us DENYING the petition filed in this case. The Resolution of the National Labor Relations
Commission (NLRC), Second Division, in the labor case docketed as NLRC NCR Case No. 00-09-
08113-2005 [NLRC LAC No. 07-001965-07(5)] is herebyAFFIRMED.
9

The disposition was disturbed. The Court of Appeals, on motion for reconsideration, modified its
previous decision, thus:
WHEREFORE, in view of the foregoing premises, we hereby MODIFY the decision promulgated on
March 31, 2009 in that, while we uphold the monetary award in favor of the [petitioner] in the
aggregate sum of 110,662.16 representing the unpaid salary, commission and 13
th
month pay due
to her, we hereby allow legal compensation or set-off of such award of monetary claims by her
liability to [respondents] for liquidated damages arising from her violation of the "Goodwill Clause" in
her employment contract with them.
10

Portillos motion for reconsideration was denied.
Hence, this petition for certiorari listing the following acts as grave abuse of discretion of the Court of
Appeals:
THE COURT OF APPEALS ACTED WITH GRAVE ABUSE OF DISCRETION BY EVADING TO
RECOGNIZE (sic) THAT THE RESPONDENTS EARLIER PETITION IS FATALLY DEFECTIVE;
THE COURT OF APPEALS ACTED WITH GRAVE ABUSE OF DISCRETION BY OVERSTEPPING
THE BOUNDS OF APPELLATE JURISDICTION[;]
THE COURT OF APPEALS ACTED WITH GRAVE ABUSE OF DISCRETION BY MODIFYING ITS
PREVIOUS DECISION BASED ON AN ISSUE THAT WAS RAISED ONLY ON THE FIRST
INSTANCE AS AN APPEAL BUT WAS NEVER AT THE TRIAL COURT AMOUNTING TO DENIAL
OF DUE PROCESS[;]
THE COURT OF APPEALS ACTED WITH GRAVE ABUSE OF DISCRETION BY EVADING THE
POSITIVE DUTY TO UPHOLD THE RELEVANT LAWS[.]
11

Simply, the issue is whether Portillos money claims for unpaid salaries may be offset against
respondents claim for liquidated damages.
Before anything else, we address the procedural error committed by Portillo, i.e., filing a petition
for certiorari, a special civil action under Rule 65 of the Rules of Court, instead of a petition for
review on certiorari, a mode of appeal, under Rule 45 thereof. On this score alone, the petition
should have been dismissed outright.
Section 1, Rule 45 of the Rules of Court expressly provides that a party desiring to appeal
by certiorari from a judgment or final order or resolution of the Court of Appeals may file a verified
petition for review on certiorari. Considering that, in this case, appeal by certiorari was available to
Portillo, that available recourse foreclosed her right to resort to a special civil action for certiorari, a
limited form of review and a remedy of last recourse, which lies only where there is no appeal or
plain, speedy and adequate remedy in the ordinary course of law.
12

A petition for review on certiorari under Rule 45 and a petition for certiorari under Rule 65 are
mutually exclusive remedies. Certiorari cannot co-exist with an appeal or any other adequate
remedy.
13
If a petition for review is available, even prescribed, the nature of the questions of law
intended to be raised on appeal is of no consequence. It may well be that those questions of law will
treat exclusively of whether or not the judgment or final order was rendered without or in excess of
jurisdiction, or with grave abuse of discretion. This is immaterial. The remedy is appeal,
not certiorari as a special civil action.
14

Be that as it may, on more than one occasion, to serve the ultimate purpose of all rules of
proceduresattaining substantial justice as expeditiously as possible
15
we have accepted
procedurally incorrect petitions and decided them on the merits. We do the same here.
The Court of Appeals anchors its modified ruling on the ostensible causal connection between
Portillos money claims and Lietz Inc.s claim for liquidated damages, both claims apparently arising
from the same employment relations. Thus, did it say:
x x x This Court will have to take cognizance of and consider the "Goodwill Clause" contained [in] the
employment contract signed by and between [respondents and Portillo]. There is no gainsaying the
fact that such "Goodwill Clause" is part and parcel of the employment contract extended to [Portillo],
and such clause is not contrary to law, morals and public policy. There is thus a causal connection
between [Portillos] monetary claims against [respondents] and the latters claim for liquidated
damages against the former. Consequently, we should allow legal compensation or set-off to take
place. [Respondents and Portillo] are both bound principally and, at the same time, are creditors of
each other. [Portillo] is a creditor of [respondents] in the sum of 110,662.16 in connection with her
monetary claims against the latter. At the same time, [respondents] are creditors of [Portillo] insofar
as their claims for liquidated damages in the sum of 980,295.25
16
against the latter is concerned.
17

We are not convinced.
Paragraph 4 of Article 217 of the Labor Code appears to have caused the reliance by the Court of
Appeals on the "causal connection between [Portillos] monetary claims against [respondents] and
the latters claim from liquidated damages against the former."
Art. 217. Jurisdiction of Labor Arbiters and the Commission. (a) Except as otherwise provided
under this code, the Arbiters shall have original and exclusive jurisdiction to hear and decide, within
thirty (30) calendar days after the submission of the case by the parties for decision without
extension, even in the absence of stenographic notes, the following case involving all workers,
whether agricultural or nonagricultural:
x x x x
4. Claims for actual, moral, exemplary and other forms of damages arising from the employer-
employee relations; (Underscoring supplied)
Evidently, the Court of Appeals is convinced that the claim for liquidated damages emanates from
the "Goodwill Clause of the employment contract and, therefore, is a claim for damages arising from
the employeremployee relations."
As early as Singapore Airlines Limited v. Pao,
18
we established that not all disputes between an
employer and his employee(s) fall within the jurisdiction of the labor tribunals. We differentiated
between abandonment per se and the manner and consequent effects of such abandonment and
ruled that the first, is a labor case, while the second, is a civil law case.
Upon the facts and issues involved, jurisdiction over the present controversy must be held to belong
to the civil Courts. While seemingly petitioner's claim for damages arises from employer-employee
relations, and the latest amendment to Article 217 of the Labor Code under PD No. 1691 and BP
Blg. 130 provides that all other claims arising from employer-employee relationship are cognizable
by Labor Arbiters [citation omitted], in essence, petitioner's claim for damages is grounded on the
"wanton failure and refusal" without just cause of private respondent Cruz to report for duty despite
repeated notices served upon him of the disapproval of his application for leave of absence without
pay. This, coupled with the further averment that Cruz "maliciously and with bad faith" violated the
terms and conditions of the conversion training course agreement to the damage of petitioner
removes the present controversy from the coverage of the Labor Code and brings it within the
purview of Civil Law.
Clearly, the complaint was anchored not on the abandonment per se by private respondent Cruz of
his jobas the latter was not required in the Complaint to report back to workbut on
the manner and consequent effects of such abandonment of work translated in terms of the
damages which petitioner had to suffer.
Squarely in point is the ruling enunciated in the case of Quisaba vs. Sta. Ines Melale Veneer &
Plywood, Inc. [citation omitted], the pertinent portion of which reads:
"Although the acts complained of seemingly appear to constitute 'matter involving employee-
employer' relations as Quisaba's dismissal was the severance of a pre-existing employee-employer
relations, his complaint is grounded not on his dismissal per se, as in fact he does not ask for
reinstatement or backwages, but on the manner of his dismissal and the consequent effects of such
dismissal.
"Civil law consists of that 'mass of precepts that determine or regulate the relations . . . that exist
between members of a society for the protection of private interest (1 Sanchez Roman 3).
"The 'right' of the respondents to dismiss Quisaba should not be confused with the manner in which
the right was exercised and the effects flowing therefrom. If the dismissal was done anti-socially or
oppressively as the complaint alleges, then the respondents violated Article 1701 of the Civil Code
which prohibits acts of oppression by either capital or labor against the other, and Article 21, which
makes a person liable for damages if he wilfully causes loss or injury to another in a manner that is
contrary to morals, good customs or public policy, the sanction for which, by way of moral damages,
is provided in article 2219, No. 10. [citation omitted]"
Stated differently, petitioner seeks protection under the civil laws and claims no benefits
under the Labor Code. The primary relief sought is for liquidated damages for breach of a
contractual obligation. The other items demanded are not labor benefits demanded by
workers generally taken cognizance of in labor disputes, such as payment of wages, overtime
compensation or separation pay. The items claimed are the natural consequences flowing
from breach of an obligation, intrinsically a civil dispute.
19
(Emphasis supplied)
Subsequent rulings amplified the teaching in Singapore Airlines. The reasonable causal
connection rule was discussed. Thus, in San Miguel Corporation v. National Labor Relations
Commission,
20
we held:
While paragraph 3 above refers to "all money claims of workers," it is not necessary to suppose that
the entire universe of money claims that might be asserted by workers against their employers has
been absorbed into the original and exclusive jurisdiction of Labor Arbiters. In the first place,
paragraph 3 should be read not in isolation from but rather within the context formed by paragraph 1
(relating to unfair labor practices), paragraph 2 (relating to claims concerning terms and conditions of
employment), paragraph 4 (claims relating to household services, a particular species of employer-
employee relations), and paragraph 5 (relating to certain activities prohibited to employees or to
employers). It is evident that there is a unifying element which runs through paragraph 1 to 5 and
that is, that they all refer to cases or disputes arising out of or in connection with an employer-
employee relationship. This is, in other words, a situation where the rule of noscitur a sociis may be
usefully invoked in clarifying the scope of paragraph 3, and any other paragraph of Article 217 of the
Labor Code, as amended. We reach the above conclusion from an examination of the terms
themselves of Article 217, as last amended by B.P. Blg. 227, and even though earlier versions of
Article 217 of the Labor Code expressly brought within the jurisdiction of the Labor Arbiters and the
NLRC "cases arising from employer-employee relations, [citation omitted]" which clause was not
expressly carried over, in printer's ink, in Article 217 as it exists today. For it cannot be presumed
that money claims of workers which do not arise out of or in connection with their employer-
employee relationship, and which would therefore fall within the general jurisdiction of regular courts
of justice, were intended by the legislative authority to be taken away from the jurisdiction of the
courts and lodged with Labor Arbiters on an exclusive basis. The Court, therefore, believes and so
holds that the "money claims of workers" referred to in paragraph 3 of Article 217 embraces
money claims which arise out of or in connection with the employer-employee relationship,
or some aspect or incident of such relationship. Put a little differently, that money claims of
workers which now fall within the original and exclusive jurisdiction of Labor Arbiters are
those money claims which have some reasonable causal connection with the employer-
employee relationship.
21
(Emphasis supplied)
We thereafter ruled that the "reasonable causal connection with the employer-employee relationship"
is a requirement not only in employees money claims against the employer but is, likewise, a
condition when the claimant is the employer.
In Dai-Chi Electronics Manufacturing Corporation v. Villarama, Jr.,
22
which reiterated the San
Miguel ruling and allied jurisprudence, we pronounced that a non-compete clause, as in the
"Goodwill Clause" referred to in the present case, with a stipulation that a violation thereof makes the
employee liable to his former employer for liquidated damages, refers to post-employment relations
of the parties.
In Dai-Chi, the trial court dismissed the civil complaint filed by the employer to recover damages
from its employee for the latters breach of his contractual obligation. We reversed the ruling of the
trial court as we found that the employer did not ask for any relief under the Labor Code but sought
to recover damages agreed upon in the contract as redress for its employees breach of contractual
obligation to its "damage and prejudice." We iterated that Article 217, paragraph 4 does not
automatically cover all disputes between an employer and its employee(s). We noted that the cause
of action was within the realm of Civil Law, thus, jurisdiction over the controversy belongs to the
regular courts. At bottom, we considered that the stipulation referred to post-employment relations of
the parties.
That the "Goodwill Clause" in this case is likewise a postemployment issue should brook no
argument. There is no dispute as to the cessation of Portillos employment with Lietz Inc.
23
She
simply claims her unpaid salaries and commissions, which Lietz Inc. does not contest. At that
juncture, Portillo was no longer an employee of Lietz Inc.
24
The "Goodwill Clause" or the "Non-
Compete Clause" is a contractual undertaking effective after the cessation of the employment
relationship between the parties. In accordance with jurisprudence, breach of the undertaking is a
civil law dispute, not a labor law case.
It is clear, therefore, that while Portillos claim for unpaid salaries is a money claim that arises out of
or in connection with an employer-employee relationship, Lietz Inc.s claim against Portillo for
violation of the goodwill clause is a money claim based on an act done after the cessation of the
employment relationship. And, while the jurisdiction over Portillos claim is vested in the labor arbiter,
the jurisdiction over Lietz Inc.s claim rests on the regular courts. Thus:
As it is, petitioner does not ask for any relief under the Labor Code. It merely seeks to recover
damages based on the parties' contract of employment as redress for respondent's breach thereof.
Such cause of action is within the realm of Civil Law, and jurisdiction over the controversy belongs to
the regular courts. More so must this be in the present case, what with the reality that the stipulation
refers to the postemployment relations of the parties.
For sure, a plain and cursory reading of the complaint will readily reveal that the subject matter is
one of claim for damages arising from a breach of contract, which is within the ambit of the regular
court's jurisdiction. [citation omitted]
It is basic that jurisdiction over the subject matter is determined upon the allegations made in the
complaint, irrespective of whether or not the plaintiff is entitled to recover upon the claim asserted
therein, which is a matter resolved only after and as a result of a trial. Neither can jurisdiction of a
court be made to depend upon the defenses made by a defendant in his answer or motion to
dismiss. If such were the rule, the question of jurisdiction would depend almost entirely upon the
defendant.
25
[citation omitted]
x x x x
Whereas this Court in a number of occasions had applied the jurisdictional provisions of Article 217
to claims for damages filed by employees [citation omitted], we hold that by the designating clause
"arising from the employer-employee relations" Article 217 should apply with equal force to the claim
of an employer for actual damages against its dismissed employee, where the basis for the claim
arises from or is necessarily connected with the fact of termination, and should be entered as a
counterclaim in the illegal dismissal case.
26

x x x x
This is, of course, to distinguish from cases of actions for damages where the employer-
employee relationship is merely incidental and the cause of action proceeds from a different
source of obligation. Thus, the jurisdiction of regular courts was upheld where the damages,
claimed for were based on tort [citation omitted], malicious prosecution [citation omitted], or
breach of contract, as when the claimant seeks to recover a debt from a former
employee [citation omitted] or seeks liquidated damages in enforcement of a prior employment
contract. [citation omitted]
Neither can we uphold the reasoning of respondent court that because the resolution of the issues
presented by the complaint does not entail application of the Labor Code or other labor laws, the
dispute is intrinsically civil. Article 217(a) of the Labor Code, as amended, clearly bestows upon the
Labor Arbiter original and exclusive jurisdiction over claims for damages arising from employer-
employee relationsin other words, the Labor Arbiter has jurisdiction to award not only the reliefs
provided by labor laws, but also damages governed by the Civil Code.
27
(Emphasis supplied)
In the case at bar, the difference in the nature of the credits that one has against the other,
conversely, the nature of the debt one owes another, which difference in turn results in the difference
of the forum where the different credits can be enforced, prevents the application of compensation.
Simply, the labor tribunal in an employees claim for unpaid wages is without authority to allow the
compensation of such claims against the post employment claim of the former employer for breach
of a post employment condition. The labor tribunal does not have jurisdiction over the civil case of
breach of contract.
We are aware that in Baez v. Hon. Valdevilla, we mentioned that:
Whereas this Court in a number of occasions had applied the jurisdictional provisions of Article 217
to claims for damages filed by employees [citation omitted], we hold that by the designating clause
"arising from the employer-employee relations" Article 217 should apply with equal force to the claim
of an employer for actual damages against its dismissed employee, where the basis for the claim
arises from or is necessarily connected with the fact of termination, and should be entered as a
counterclaim in the illegal dismissal case.
28

While on the surface, Baez supports the decision of the Court of Appeals, the facts beneath
premise an opposite conclusion. There, the salesman-employee obtained from the NLRC a final
favorable judgment of illegal dismissal. Afterwards, the employer filed with the trial court a complaint
for damages for alleged nefarious activities causing damage to the employer. Explaining further why
the claims for damages should be entered as a counterclaim in the illegal dismissal case, we said:
Even under Republic Act No. 875 (the Industrial Peace Act, now completely superseded by the
Labor Code), jurisprudence was settled that where the plaintiffs cause of action for damages arose
out of, or was necessarily intertwined with, an alleged unfair labor practice committed by the union,
the jurisdiction is exclusively with the (now defunct) Court of Industrial Relations, and the assumption
of jurisdiction of regular courts over the same is a nullity. To allow otherwise would be "to sanction
split jurisdiction, which is prejudicial to the orderly administration of justice." Thus, even after the
enactment of the Labor Code, where the damages separately claimed by the employer were
allegedly incurred as a consequence of strike or picketing of the union, such complaint for damages
is deeply rooted from the labor dispute between the parties, and should be dismissed by ordinary
courts for lack of jurisdiction. As held by this Court in National Federation of Labor vs. Eisma, 127
SCRA 419:
Certainly, the present Labor Code is even more committed to the view that on policy grounds, and
equally so in the interest of greater promptness in the disposition of labor matters, a court is spared
the often onerous task of determining what essentially is a factual matter, namely, the damages that
may be incurred by either labor or management as a result of disputes or controversies arising from
employer-employee relations.
29

Evidently, the ruling of the appellate court is modeled after the basis used in Baez which is the
"intertwined" facts of the claims of the employer and the employee or that the "complaint for
damages is deeply rooted from the labor dispute between the parties." Thus, did the appellate court
say that:
There is no gainsaying the fact that such "Goodwill Clause" is part and parcel of the employment
contract extended to [Portillo], and such clause is not contrary to law, morals and public policy.
There is thus a causal connection between [Portillos] monetary claims against [respondents] and
the latters claim for liquidated damages against the former. Consequently, we should allow legal
compensation or set-off to take place.
30

The Court of Appeals was misguided. Its conclusion was incorrect.
There is no causal connection between the petitioner employees claim for unpaid wages and the
respondent employers claim for damages for the alleged "Goodwill Clause" violation. Portillos claim
for unpaid salaries did not have anything to do with her alleged violation of the employment contract
as, in fact, her separation from employment is not "rooted" in the alleged contractual violation. She
resigned from her employment. She was not dismissed. Portillos entitlement to the unpaid salaries
is not even contested. Indeed, Lietz Inc.s argument about legal compensation necessarily admits
that it owes the money claimed by Portillo.
The alleged contractual violation did not arise during the existence of the employer-employee
relationship. It was a post-employment matter, a post-employment violation. Reminders are apt. That
is provided by the fairly recent case of Yusen Air and Sea Services Phils., Inc. v. Villamor,
31
which
harked back to the previous rulings on the necessity of "reasonable causal connection" between the
tortious damage and the damage arising from the employer-employee
relationship. Yusen proceeded to pronounce that the absence of the connection results in the
absence of jurisdiction of the labor arbiter. Importantly, such absence of jurisdiction cannot be
remedied by raising before the labor tribunal the tortious damage as a defense. Thus:
When, as here, the cause of action is based on a quasi-delict or tort, which has no reasonable
causal connection with any of the claims provided for in Article 217, jurisdiction over the action is
with the regular courts. [citation omitted]
As it is, petitioner does not ask for any relief under the Labor Code. It merely seeks to recover
damages based on the parties contract of employment as redress for respondents breach thereof.
Such cause of action is within the realm of Civil Law, and jurisdiction over the controversy belongs to
the regular courts. More so must this be in the present case, what with the reality that the stipulation
refers to the postemployment relations of the parties.
For sure, a plain and cursory reading of the complaint will readily reveal that the subject matter is
one of claim for damages arising from a breach of contract, which is within the ambit of the regular
courts jurisdiction. [citation omitted]
It is basic that jurisdiction over the subject matter is determined upon the allegations made in the
complaint, irrespective of whether or not the plaintiff is entitled to recover upon the claim asserted
therein, which is a matter resolved only after and as a result of a trial. Neither can jurisdiction of a
court be made to depend upon the defenses made by a defendant in his answer or motion to
dismiss. If such were the rule, the question of jurisdiction would depend almost entirely upon the
defendant.
32
(Underscoring supplied).
The error of the appellate court in its Resolution of 14 October 2010 is basic. The original decision,
the right ruling, should not have been reconsidered.1wphi 1
Indeed, the application of compensation in this case is effectively barred by Article 113 of the Labor
Code which prohibits wage deductions except in three circumstances:
ART. 113. Wage Deduction. No employer, in his own behalf or in behalf of any person, shall make
any deduction from wages of his employees, except:
(a) In cases where the worker is insured with his consent by the employer, and the deduction is to
recompense the employer for the amount paid by him as premium on the insurance;
(b) For union dues, in cases where the right of the worker or his union to check-off has been
recognized by the employer or authorized in writing by the individual worker concerned; and
(c) In cases where the employer is authorized by law or regulations issued by the Secretary of
Labor.
WHEREFORE, the petition is GRANTED. The Resolution of the Court of Appeals in CA-G.R. SP No.
I 06581 dated 14 October 20 I 0 is SET ASIDE. The Decision of the Court of Appeals in CA-G.R. SP
No. I 06581 dated 3 I March :2009 is REINSTATED. No costs.
SO ORDERED.
JOSE PORTUGAL PEREZ
Associate Justice
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 189947 January 25, 2012
MANILA PAVILION HOTEL, owned and operated by ACESITE (PHILS.) Hotel
Corporation, Petitioner,
vs.
HENRY DELADA, Respondent.
D E C I S I O N
SERENO, J .:
Before the Court is a Petition for Review on Certiorari filed under Rule 45 of the Revised Rules of
Court, assailing the 27 July 2009 Decision and 12 October 2009 Resolution of the Court of Appeals
(CA).
1

Facts
The present Petition stems from a grievance filed by respondent Henry Delada against petitioner
Manila Pavilion Hotel (MPH). Delada was the Union President of the Manila Pavilion Supervisors
Association at MPH. He was originally assigned as Head Waiter of Rotisserie, a fine-dining
restaurant operated by petitioner. Pursuant to a supervisory personnel reorganization program, MPH
reassigned him as Head Waiter of Seasons Coffee Shop, another restaurant operated by petitioner
at the same hotel. Respondent declined the inter-outlet transfer and instead asked for a grievance
meeting on the matter, pursuant to their Collective Bargaining Agreement (CBA). He also requested
his retention as Head Waiter of Rotisserie while the grievance procedure was ongoing.
MPH replied and told respondent to report to his new assignment for the time being, without
prejudice to the resolution of the grievance involving the transfer. He adamantly refused to assume
his new post at the Seasons Coffee Shop and instead continued to report to his previous assignment
at Rotisserie. Thus, MPH sent him several memoranda on various dates, requiring him to explain in
writing why he should not be penalized for the following offenses: serious misconduct; willful
disobedience of the lawful orders of the employer; gross insubordination; gross and habitual neglect
of duties; and willful breach of trust.
Despite the notices from MPH, Delada persistently rebuffed orders for him to report to his new
assignment. According to him, since the grievance machinery under their CBA had already been
initiated, his transfer must be held in abeyance. Thus, on 9 May 2007, MPH initiated administrative
proceedings against him. He attended the hearings together with union representatives.
Meanwhile, the parties failed to reach a settlement during the grievance meeting concerning the
validity of MPHs transfer order. Respondent then elevated his grievance to the Peers Resources
Development Director. Still, no settlement between the parties was reached. Respondent appealed
the matter to the Grievance Committee level. The committee recommended that he proceed to the
next level of the grievance procedure, as it was unable to reach a decision on the matter.
Consequently, on 20 April 2007, Delada lodged a Complaint before the National Conciliation and
Mediation Board. On 25 May 2007, the parties agreed to submit the following issues for voluntary
arbitration:
I. Whether or not the transfer of the union president from head waiter at Rotisserie to head
waiter at seasons restaurant is valid and justified;
II. Whether or not the preventive suspension of the complainant is valid and justified;
III. Whether or not the preventive suspension of the complainant is a valid ground to strike;
IV. Whether or not the respondent may be held liable for moral and exemplary damages and
attorneys fees; and
V. Whether or not the complainant may be held liable for moral and exemplary damages and
attorneys fees.
2

While respondents Complaint concerning the validity of his transfer was pending before the Panel of
Voluntary Arbitrators (PVA), MPH continued with the disciplinary action against him for his refusal to
report to his new post at Seasons Coffee Shop. Citing security and safety reasons, petitioner also
placed respondent on a 30-day preventive suspension. On 8 June 2007, MPH issued a Decision,
which found him guilty of insubordination based on his repeated and willful disobedience of the
transfer order. The Decision imposed on Delada the penalty of 90-day suspension. He opposed the
Decision, arguing that MPH had lost its authority to proceed with the disciplinary action against him,
since the matter had already been included in the voluntary arbitration.
On 14 December 2007, the PVA issued a Decision and ruled that the transfer of Delada was a valid
exercise of management prerogative. According to the panel, the transfer order was done in the
interest of the efficient and economic operations of MPH, and that there was no malice, bad faith, or
improper motive attendant upon the transfer of Delada to Seasons Coffee Shop. They found that the
mere fact that he was the Union President did not "put color or ill motive and purpose" to his transfer.
On the contrary, the PVA found that the real reason why he refused to obey the transfer order was
that he asked for additional monetary benefits as a condition for his transfer. Furthermore, the panel
ruled that his transfer from Rotisserie to Seasons Coffee Shop did not prejudice or inconvenience
him. Neither did it result in diminution of salaries or demotion in rank. The PVA thus pronounced that
Delada had no valid and justifiable reason to refuse or even to delay compliance with the
managements directive.
The PVA also ruled that there was no legal and factual basis to support petitioners imposition of
preventive suspension on Delada. According to the panel, the mere assertion of MPH that "it is not
far-fetched for Henry Delada to sabotage the food to be prepared and served to the respondents
dining guest and employees because of the hostile relationship then existing" was more imagined
than real. It also found that MPH went beyond the 30-day period of preventive suspension
prescribed by the Implementing Rules of the Labor Code when petitioner proceeded to impose a
separate penalty of 90-day suspension on him. Furthermore, the PVA ruled that MPH lost its
authority to continue with the administrative proceedings for insubordination and willful disobedience
of the transfer order and to impose the penalty of 90-day suspension on respondent. According to
the panel, it acquired exclusive jurisdiction over the issue when the parties submitted the
aforementioned issues before it. The panel reasoned that the joint submission to it of the issue on
the validity of the transfer order encompassed, by necessary implication, the issue of respondents
insubordination and willful disobedience of the transfer order. Thus, MPH effectively relinquished its
power to impose disciplinary action on Delada.
3

As to the other issues, the panel found that there was no valid justification to conduct any strike or
concerted action as a result of Deladas preventive suspension. It also ruled that since the 30-day
preventive suspension and the penalty of 90-day suspension was invalid, then MPH was liable to
pay back wages and other benefits.
The CA affirmed the Decision of the PVA and denied petitioners Motion for Reconsideration.
Consequently, MPH filed the instant Petition.
Issue
Despite the various issues surrounding the case, MPH limited its appeal to the following:
I. Whether MPH retained the authority to continue with the administrative case against
Delada for insubordination and willful disobedience of the transfer order.
II. Whether MPH is liable to pay back wages.
Discussion
Petitioner argues that it did not lose its authority to discipline Delada notwithstanding the joint
submission to the PVA of the issue of the validity of the transfer order. According to petitioner, the
specific issue of whether respondent could be held liable for his refusal to assume the new
assignment was not raised before the PVA, and that the panels ruling was limited to the validity of
the transfer order. Thus, petitioner maintains that it cannot be deemed to have surrendered its
authority to impose the penalty of suspension.
In Sime Darby Pilipinas, Inc. v. Deputy Administrator Magsalin,
4
we ruled that the voluntary arbitrator
had plenary jurisdiction and authority to interpret the agreement to arbitrate and to determine the
scope of his own authority subject only, in a proper case, to the certiorari jurisdiction of this Court.
In that case, the specific issue presented was "the issue of performance bonus." We then held that
the arbitrator had the authority to determine not only the issue of whether or not a performance
bonus was to be granted, but also the related question of the amount of bonus, were it to be granted.
We then said that there was no indication at all that the parties to the arbitration agreement had
regarded "the issue of performance bonus" as a two-tiered issue, only one aspect of which was
being submitted to arbitration; thus, we held that the failure of the parties to specifically limit the
issues to that which was stated allowed the arbitrator to assume jurisdiction over the related issue.
A more recent case is Ludo & Luym Corporation v. Saornido.
5
In that case, we recognized that
voluntary arbitrators are generally expected to decide only those questions expressly delineated by
the submission agreement; that, nevertheless, they can assume that they have the necessary power
to make a final settlement on the related issues, since arbitration is the final resort for the
adjudication of disputes. Thus, we ruled that even if the specific issue brought before the arbitrators
merely mentioned the question of "whether an employee was discharged for just cause," they could
reasonably assume that their powers extended beyond the determination thereof to include the
power to reinstate the employee or to grant back wages. In the same vein, if the specific issue
brought before the arbitrators referred to the date of regularization of the employee, law and
jurisprudence gave them enough leeway as well as adequate prerogative to determine the
entitlement of the employees to higher benefits in accordance with the finding of regularization.
Indeed, to require the parties to file another action for payment of those benefits would certainly
undermine labor proceedings and contravene the constitutional mandate providing full protection to
labor and speedy labor justice.
Consequently, could the PVA herein view that the issue presented before it the question of the
validity of the transfer order necessarily included the question of respondent Deladas
insubordination and willful disobedience of the transfer order?
Pursuant to the doctrines in Sime Darby Pilipinas and Ludo & Luym Corporation, the PVA was
authorized to assume jurisdiction over the related issue of insubordination and willful disobedience of
the transfer order. Nevertheless, the doctrine in the aforementioned cases is inapplicable to the
present Petition. In those cases, the voluntary arbitrators did in fact assume jurisdiction over the
related issues and made rulings on the matter. In the present case, however, the PVA did not make
a ruling on the specific issue of insubordination and willful disobedience of the transfer order. The
PVA merely said that its disagreement with the 90-day penalty of suspension stemmed from the fact
that the penalty went beyond the 30-day limit for preventive suspension:
But to us, what militates against the validity of Deladas preventive suspension is the fact that it went
beyond the 30-day period prescribed by the Implementing Rules of the Labor Code (Section 4,
Rules XIV, Book V). The preventive suspension of Delada is supposed to expire on 09 June 2007,
but without notifying Delada, the MPH proceeded to impose a separate penalty of 90-days
suspension to him which took effect only on 18 June 2007, or way beyond the 30-day rule mandated
by the Rules. While the intention of the MPH is to impose the 90-day suspension as a separate
penalty against Delada, the former is already proscribed from doing so because as of 05 June 2007,
the dispute at hand is now under the exclusive jurisdiction of the panel of arbitrators. In fact, by its
own admission, the MPH categorically stated in its Position Paper that as of 25 May 2007, or before
the suspension order was issued, MPH and Delada had already formulated and submitted the
issues for arbitration. For all legal intents and purposes, therefore, the MPH has now relinquished its
authority to suspend Delada because the issue at this juncture is now within the Panels ambit of
jurisdiction. MPHs authority to impose disciplinary action to Delada must now give way to the
jurisdiction of this panel of arbitrators to rule on the issues at hand. By necessary implication, this
Panel is thus constrained to declare both the preventive suspension and the separate suspension of
90-days meted to Delada to be not valid and justified.
6

First, it must be pointed out that the basis of the 30-day preventive suspension imposed on Delada
was different from that of the 90-day penalty of suspension. The 30-day preventive suspension was
imposed by MPH on the assertion that Delada might sabotage hotel operations if preventive
suspension would not be imposed on him. On the other hand, the penalty of 90-day suspension was
imposed on respondent as a form of disciplinary action. It was the outcome of the administrative
proceedings conducted against him. Preventive suspension is a disciplinary measure resorted to by
the employer pending investigation of an alleged malfeasance or misfeasance committed by an
employee.
7
The employer temporarily bars the employee from working if his continued employment
poses a serious and imminent threat to the life or property of the employer or of his co-workers.
8
On
the other hand, the penalty of suspension refers to the disciplinary action imposed on the employee
after an official investigation or administrative hearing is conducted.
9
The employer exercises its right
to discipline erring employees pursuant to company rules and regulations.
10
Thus, a finding of validity
of the penalty of 90-day suspension will not embrace the issue of the validity of the 30-day
preventive suspension. In any event, petitioner no longer assails the ruling of the CA on the illegality
of the 30-day preventive suspension.
11

It can be seen that, unlike in Sime Darby Pilipinas and Ludo & Luym Corporation, the PVA herein did
not make a definitive ruling on the merits of the validity of the 90-day suspension. The panel only
held that MPH lost its jurisdiction to impose disciplinary action on respondent. Accordingly, we rule in
this case that MPH did not lose its authority to discipline respondent for his continued refusal to
report to his new assignment. In relation to this point, we recall our Decision in Allied Banking
Corporation v. Court of Appeals.
12

In Allied Banking Corporation,
13
employer Allied Bank reassigned respondent Galanida from its Cebu
City branch to its Bacolod and Tagbilaran branches. He refused to follow the transfer order and
instead filed a Complaint before the Labor Arbiter for constructive dismissal. While the case was
pending, Allied Bank insisted that he report to his new assignment. When he continued to refuse, it
directed him to explain in writing why no disciplinary action should be meted out to him. Due to his
continued refusal to report to his new assignment, Allied Bank eventually terminated his services.
When the issue of whether he could validly refuse to obey the transfer orders was brought before
this Court, we ruled thus:
The refusal to obey a valid transfer order constitutes willful disobedience of a lawful order of an
employer.1wphi1Employees may object to, negotiate and seek redress against employers for rules or
orders that they regard as unjust or illegal. However, until and unless these rules or orders are
declared illegal or improper by competent authority, the employees ignore or disobey them at their
peril. For Galanidas continued refusal to obey Allied Bank's transfer orders, we hold that the bank
dismissed Galanida for just cause in accordance with Article 282(a) of the Labor Code. Galanida is
thus not entitled to reinstatement or to separation pay. (Emphasis supplied, citations omitted).
14

It is important to note what the PVA said on Deladas defiance of the transfer order:
In fact, Delada cannot hide under the legal cloak of the grievance machinery of the CBA or the
voluntary arbitration proceedings to disobey a valid order of transfer from the management of the
hotel. While it is true that Deladas transfer to Seasons is the subject of the grievance machinery in
accordance with the provisions of their CBA, Delada is expected to comply first with the said lawful
directive while awaiting the results of the decision in the grievance proceedings. This issue falls
squarely in the case of Allied Banking Corporation vs. Court of Appeals x x x.
15

Pursuant to Allied Banking, unless the order of MPH is rendered invalid, there is a presumption of
the validity of that order. Since the PVA eventually ruled that the transfer order was a valid exercise
of management prerogative, we hereby reverse the Decision and the Resolution of the CA affirming
the Decision of the PVA in this respect. MPH had the authority to continue with the administrative
proceedings for insubordination and willful disobedience against Delada and to impose on him the
penalty of suspension. As a consequence, petitioner is not liable to pay back wages and other
benefits for the period corresponding to the penalty of 90-day suspension.
WHEREFORE, the Petition is GRANTED. The Decision and the Resolution of the Court of Appeals
are hereby MODIFIED. We rule that petitioner Manila Pavilion Hotel had the authority to continue
with the administrative proceedings for insubordination and willful disobedience against Delada and
to impose on him the penalty of suspension. Consequently, petitioner is not liable to pay back wages
and other benefits for the period corresponding to the penalty of 90-day suspension.
SO ORDERED.
MARIA LOURDES P. A. SERENO
Associate Justice
Republic of the Philippines
SUPREME COURT
Manila
SPECIAL SECOND DIVISION
G.R. No. 155109 March 14, 2012
C. ALCANTARA & SONS, INC., Petitioner,
vs.
COURT OF APPEALS, LABOR ARBITER ANTONIO M. VILLANUEVA, LABOR ARBITER
ARTURO L. GAMOLO, SHERIFF OF NLRC RAB-XI-DAVAO CITY, NAGKAHIUSANG MAMUMUO
SA ALSONS-SPFL (NAMAAL-SPFL), FELIXBERTO IRAG, JOSHUA BARREDO, ERNESTO
CUARIO, EDGAR MONDAY, EDILBERTO DEMETRIA, HERMINIO ROBILLO, ROMULO
LUNGAY, MATROIL DELOS SANTOS, BONERME MATURAN, RAUL CANTIGA, EDUARDO
CAMPUSO, RUDY ANADON, GILBERTO GABRONINO, BONIFACIO SALVADOR, CIRILO MINO,
ROBERTO ABONADO, WARLITO MONTE, PEDRO ESQUIERDO, ALFREDO TROPICO, DANILO
MEJOS, HECTOR ESTUITA, BARTOLOME CASTILLANES, EDUARDO CAPUYAN, SATURNINO
CAGAS, ALEJANDRO HARDER, EDUARDO LARENA, JAIME MONTEDERAMOS,
ERMELANDO BASADRE, REYNALDO LIMPAJAN, ELPIDIO LIBRANZA, TEDDY SUELO, JOSE
AMOYLIN, TRANQUILINO ORALLO, CARLOS BALDOS, MANOLITO SABELLANO,
CARMELITO TOBIAS, PRIMITIVO GARCIA, JUANITO ALDEPOLLA, LUDIVICO ABAD,
WENCISLAO INGHUG, RICARDO ALTO, EPIFANIO JARABAY, FELICIANO AMPER,
ALEXANDER JUDILLA, ROBERTO ANDRADE, ALFREDO LESULA, JULIO ANINO, BENITO
MAGPUSAO, PEDRO AQUINO, EDDIE MANSANADES, ROMEO ARANETA, ARGUILLAO
MANTICA, CONSTANCIO ARNAIZ, ERNESTO HOTOY, JUSTINO ASCANO, RICARDO
MATURAN, EDILBERTO YAMBAO, ANTONIO MELARGO, JESUS BERITAN, ARSENIO
MELICOR, DIOSDADO BONGABONG, LAURO MONTENEGRO, CARLITO BURILLO, LEO
MORA, PABLO BUTIL, ARMANDO GUCILA, JEREMIAH CAGARA, MARIO NAMOC, CARLITO
CAL, GERWINO NATIVIDAD, ROLANDO CAPUYAN, EDGARDO ORDIZ, LEONARDO
CASURRA, PATROCINIO ORTEGA, FILEMON CESAR, MARIO PATAN, ROMEO COMPRADO,
JESUS PATOC, RAMON CONSTANTINO, ALBERTO PIELAGO, SAMUEL DELA LLANA,
NICASIO PLAZA, ROSALDO DAGONDON, TITO GUADES, BONIFACIO DINAGUDOS,
PROCOPIO RAMOS, JOSE EBORAN, ROSENDO SAJOL, FRANCISCO EMPUERTO, PATRICIO
SALOMON, NESTOR ENDAYA, MARIO SALVALEON, ERNESTO ESTILO, BONIFACIO SIGUE,
VICENTE FABROA, JAIME SUCUAHI, CELSO HUISO, ALEX TAUTO-AN, SATURNINO YAGON,
CLAUDIO TIROL, SULPECIO GAGNI, JOSE TOLERO, FERVIE GALVEZ, ALFREDO TORALBA
and EDUARDO GENELSA,Respondents.
x - - - - - - - - - - - - - - - - - - - - - - - x
G.R. No. 155135
NAGKAHIUSANG MAMUMUO SA ALSONS-SPFL (NAMAAL-SPFL), FELIXBERTO IRAG,
JOSHUA BARREDO, ERNESTO CUARIO, EDGAR MONDAY, EDILBERTO DEMETRIA,
HERMINIO ROBILLO, ROMULO LUNGAY, MATROIL DELOS SANTOS, BONERME MATURAN,
RAUL CANTIGA, EDUARDO CAMPUSO, RUDY ANADON, GILBERTO GABRONINO,
BONIFACIO SALVADOR, CIRILO MINO, ROBERTO ABONADO, WARLITO MONTE, PEDRO
ESQUIERDO, ALFREDO TROPICO, DANILO MEJOS, HECTOR ESTUITA, BARTOLOME
CASTILLANES, EDUARDO CAPUYAN, SATURNINO CAGAS, ALEJANDRO HARDER,
EDUARDO LARENA, JAIME MONTEDERAMOS, ERMELANDO BASADRE, REYNALDO
LIMPAJAN, ELPIDIO LIBRANZA, TEDDY SUELO, JOSE AMOYLIN, TRANQUILINO ORALLO,
CARLOS BALDOS, MANOLITO SABELLANO, CARMELITO TOBIAS, PRIMITIVO GARCIA,
JUANITO ALDEPOLLA, LUDIVICO ABAD, WENCISLAO INGHUG, RICARDO ALTO, EPIFANIO
JARABAY, FELICIANO AMPER, ALEXANDER JUDILLA, ROBERTO ANDRADE, ALFREDO
LESULA, JULIO ANINO, BENITO MAGPUSAO, PEDRO AQUINO, EDDIE MANSANADES,
ROMEO ARANETA, ARGUILLAO MANTICA, CONSTANCIO ARNAIZ, ERNESTO HOTOY,
JUSTINO ASCANO, RICARDO MATURAN, EDILBERTO YAMBAO, ANTONIO MELARGO,
JESUS BERITAN, ARSENIO MELICOR, DIOSDADO BONGABONG, LAURO MONTENEGRO,
CARLITO BURILLO, LEO MORA, PABLO BUTIL, ARMANDO GUCILA, JEREMIAH CAGARA,
MARIO NAMOC, CARLITO CAL, GERWINO NATIVIDAD, ROLANDO CAPUYAN, JUANITO
NISNISAN, AURELIO CARIN, PRIMO OPLIMO, ANGELITO CASTANEDA, EDGARDO ORDIZ,
LEONARDO CASURRA, PATROCINIO ORTEGA, FILEMON CESAR, MARIO PATAN, ROMEO
COMPRADO, JESUS PATOC, RAMON CONSTANTINO, MANUEL PIAPE, ROY CONSTANTINO,
ALBERTO PIELAGO, SAMUEL DELA LLANA, NICASIO PLAZA, ROSALDO DAGONDON, TITO
GUADES, BONIFACIO DINAGUDOS, PROCOPIO RAMOS, JOSE EBORAN, ROSENDO SAJOL,
FRANCISCO EMPUERTO, PATRICIO SALOMON, NESTOR ENDAYA, MARIO SALVALEON,
ERNESTO ESTILO, BONIFACIO SIGUE, VICENTE FABROA, JAIME SUCUAHI, CELSO HUISO,
ALEX TAUTO-AN, SATURNINO YAGON, CLAUDIO TIROL, SULPECIO GAGNI, JOSE TOLERO,
FERVIE GALVEZ, ALFREDO TORALBA and EDUARDO GENELSA, Petitioners,
vs.
C. ALCANTARA & SONS, INC., EDITHA I. ALCANTARA, ATTY. NELIA A. CLAUDIO, CORNELIO
E. CAGUIAT, JESUS S. DELA CRUZ, ROLANDO Z. ANDRES and JOSE MA. MANUEL
YRASUEGUI, Respondents.
x - - - - - - - - - - - - - - - - - - - - - - - x
G.R. No. 179220
NAGKAHIUSANG MAMUMUO SA ALSONS-SPFL (NAMAAL-SPFL), AND ITS MEMBERS whose
names are listed below, Petitioners,
vs.
C. ALCANTARA & SONS, INC., Respondent.
R E S O L U T I O N
PERALTA, J .:
For resolution are the (1) Motion for Partial Reconsideration
1
filed by C. Alcantara & Sons, Inc.
(CASI) and (2) Motion for Reconsideration
2
filed by Nagkahiusang Mamumuo sa Alsons-SPFL (the
Union) and the Union officers
3
and their striking members
4
of the Courts Decision
5
dated September
29, 2010. In a Resolution
6
dated December 13, 2010, the parties were required to submit their
respective Comments. After several motions for extension, the parties submitted the required
comments. Hence, this resolution.
For a proper perspective, we state briefly the facts of the case.
The negotiation between CASI and the Union on the economic provisions of the Collective
Bargaining Agreement (CBA) ended in a deadlock prompting the Union to stage a strike,
7
but the
strike was later declared by the Labor Arbiter (LA) to be illegal having been staged in violation of the
CBAs no strike-no lockout provision.
8
Consequently, the Union officers were deemed to have
forfeited their employment with the company and made them liable for actual damages plus interest
and attorneys fees, while the Union members were ordered to be reinstated without backwages
there being no proof that they actually committed illegal acts during the strike.
9

Notwithstanding the provision of the Labor Code mandating that the reinstatement aspect of the
decision be immediately executory, the LA refused to reinstate the dismissed Union members. On
November 8, 1999, the NLRC affirmed the LA decision insofar as it declared the strike illegal and
ordered the Union officers dismissed from employment and liable for damages but modified the
same by considering the Union members to have been validly dismissed from employment for
committing prohibited and illegal acts.
10

On petition for certiorari, the Court of Appeals (CA) annulled the NLRC decision and reinstated that
of the LA. Aggrieved, CASI, the Union and the Union officers and members elevated the matter to
this Court. The cases were docketed as G.R. Nos. 155109 and 155135.
11

During the pendency of the cases, the affected Union members (who were ordered reinstated) filed
with the LA a motion for reinstatement pending appeal and the computation of their backwages.
Instead of reinstating the Union members, the LA awarded separation pay and other benefits.
12
On
appeal, the NLRC denied the Union members claim for separation pay, accrued wages and other
benefits.
13
When elevated to the CA, the appellate court held that reinstatement pending appeal
applies only to illegal dismissal cases under Article 223 of the Labor Code and not to cases under
Article 263.
14
Hence, the petition by the Union and its officers and members in G.R. No. 179220.
G.R. Nos. 155109, 155135, and 179220 were consolidated. On September 29, 2010, the Court
rendered a decision the dispositive portion of which reads:
WHEREFORE, the Court DENIES the petition of the Nagkahiusang Mamumuo sa Alsons-SPFL and
its officers and members in G.R. No. 155135 for lack of merit, and REVERSES and SETS ASIDE
the decision of the Court of Appeals in CA-G.R. SP 59604 dated March 20, 2002. The Court, on the
other hand, GRANTS the petition of C. Alcantara & Sons, Inc. in G.R. 155109 and REINSTATES the
decision of the National Labor Relations Commission in NLRC CA M-004996-99 dated November 8,
1999.
Further, the Court PARTIALLY GRANTS the petition of the Nagkahiusang Mamumuo sa Alsons-
SPFL and their dismissed members in G.R. No. 179220 and ORDERS C. Alcantara & Sons, Inc. to
pay the terminated Union members backwages for four (4) months and nine (9) days and separation
pays equivalent to one-half month salary for every year of service to the company up to the date of
their termination, with interest of 12% per annum from the time this decision becomes final and
executory until such backwages and separation pays are paid. The Court DENIES all other claims.
SO ORDERED.
15

The Court agreed with the CA on the illegality of the strike as well as the termination of the Union
officers, but disagreed with the CA insofar as it affirmed the reinstatement of the Union members.
The Court, instead, sustained the dismissal not only of the Union officers but also the Union
members who, during the illegal strike, committed prohibited acts by threatening, coercing, and
intimidating non-striking employees, officers, suppliers and customers; obstructing the free ingress to
and egress from the company premises; and resisting and defying the implementation of the writ of
preliminary injunction issued against the strikers.
16

The Court further held that the terminated Union members, who were ordered reinstated by the LA,
should have been immediately reinstated due to the immediate executory nature of the
reinstatement aspect of the LA decision. In view, however, of CASIs failure to reinstate the
dismissed employees, the Court ordered CASI to pay the terminated Union members their accrued
backwages from the date of the LA decision until the eventual reversal by the NLRC of the order of
reinstatement.
17
In addition to the accrued backwages, the Court awarded separation pay as a form
of financial assistance to the Union members equivalent to one-half month salary for every year of
service to the company up to the date of their termination.
18

Not satisfied, CASI filed a Motion for Partial Reconsideration of the above decision based on the
following grounds:
I.
IT IS RESPECTFULLY SUBMITTED THAT A PRECEDENT SETTING RULING OF THIS
HONORABLE COURT IN ESCARIO V. NLRC [G.R. No. 160302, 27 SEPTEMBER 2010]
PARTICULARLY ON THE PROPER APPLICATION OF ARTICLES 264 AND 279 OF THE
LABOR CODE SUPPORTS THE AFFIRMATION AND NOT THE REVERSAL OF THE
FINDINGS OF THE COURT OF APPEALS ["CA"], AND NEGATES THE ENTITLEMENT TO
ACCRUED WAGES OF THE UNION MEMBERS WHO COMMITTED ILLEGAL ACTS
DURING THE ILLEGAL STRIKE, NOTWITHSTANDING THAT THE LABOR ARBITER
AWARDED THE SAME.
II.
IT IS RESPECTFULY SUBMITTED THAT THIS HONORABLE COURT ERRED WHEN IT
RESOLVED TO GRANT SEPARATION PAY TO THE UNION MEMBERS WHO
COMMITTED ILLEGAL ACTS DURING THE ILLEGAL STRIKE CONSIDERING THAT
JURISPRUDENCE CITED TO JUSTIFY THE GRANT OF SEPARATION PAY DO NOT
APPLY TO THE PRESENT CASE AS IT APPLIES ONLY TO DISMISSALS FOR A JUST
CAUSE.
19

The Union, its officers and members likewise filed their separate motion for reconsideration assailing
the Courts conclusions that: (1) the strike is illegal; (2) that the officers of the Union and its
appointed shop stewards automatically forfeited their employment status when they participated in
the strike; (3) that the Union members committed illegal acts during the strike and are deemed to
have lost their employment status; and (4) that CASI is entitled to actual damages and attorneys
fees.
20
They also fault the Court in not finding that: (1) CASI and its officers are guilty of acts of unfair
labor practice or violation of Article 248 of the Labor Code; (2) the lockout declared by the company
is illegal; (3) CASI and its officers committed acts of discrimination; (4) CASI and its officers violated
Article 254 of the Labor Code; and (5) CASI and its officers are liable for actual, moral, and
exemplary damages to the Union, its officers and members.
21

Simply stated, CASI only questions the propriety of the award of backwages and separation pay,
while the Union, its officers and members seek the reversal of the Courts conclusions on the
illegality of the strike, the validity of the termination of the Union officers and members, and the
award of actual damages and attorneys fees as well as the denial of their counterclaims against
CASI.
After a careful review of the records of the case, we find it necessary to reconsider the Courts
September 29, 2010 decision, but only as to the award of separation pay.
The LA, the NLRC, the CA and the Court are one in saying that the strike staged by the Union,
participated in by the Union officers and members, is illegal being in violation of the no strike-no
lockout provision of the CBA which enjoined both the Union and the company from resorting to the
use of economic weapons available to them under the law and to instead take recourse to voluntary
arbitration in settling their disputes.
22
We, therefore, find no reason to depart from such conclusion.
Article 264 (a) of the Labor Code lays down the liabilities of the Union officers and members
participating in illegal strikes and/or committing illegal acts, to wit:
ART. 264. PROHIBITED ACTIVITIES
(a) x x x
Any worker whose employment has been terminated as a consequence of an unlawful lockout shall
be entitled to reinstatement with full backwages. Any Union officer who knowingly participates in an
illegal strike and any worker or Union officer who knowingly participates in the commission of illegal
acts during a strike may be declared to have lost his employment status: Provided, That mere
participation of a worker in a lawful strike shall not constitute sufficient ground for termination of his
employment, even if a replacement had been hired by the employer during such lawful strike.
Thus, the above-quoted provision sanctions the dismissal of a Union officer who knowingly
participates in an illegal strike or who knowingly participates in the commission of illegal acts during
a lawful strike.
23
In this case, the Union officers were in clear breach of the above provision of law
when they knowingly participated in the illegal strike.
24

As to the Union members, the same provision of law provides that a member is liable when he
knowingly participates in the commission of illegal acts during a strike. We find no reason to reverse
the conclusion of the Court that CASI presented substantial evidence to show that the striking Union
members committed the following prohibited acts:
a. They threatened, coerced, and intimidated non-striking employees, officers, suppliers and
customers;
b. They obstructed the free ingress to and egress from the company premises; and
c. They resisted and defied the implementation of the writ of preliminary injunction issued
against the strikers.
25

The commission of the above prohibited acts by the striking Union members warrants their dismissal
from employment.
As clearly narrated earlier, the LA found the strike illegal and sustained the dismissal of the Union
officers, but ordered the reinstatement of the striking Union members for lack of evidence showing
that they committed illegal acts during the illegal strike. This decision, however, was later reversed
by the NLRC. Pursuant to Article 223
26
of the Labor Code and well-established jurisprudence,
27
the
decision of the LA reinstating a dismissed or separated employee, insofar as the reinstatement
aspect is concerned, shall immediately be executory, pending appeal.
28
The employee shall either be
admitted back to work under the same terms and conditions prevailing prior to his dismissal or
separation, or, at the option of the employee, merely reinstated in the payroll.
29
It is obligatory on the
part of the employer to reinstate and pay the wages of the dismissed employee during the period of
appeal until reversal by the higher court.
30
If the employer fails to exercise the option of re-admitting
the employee to work or to reinstate him in the payroll, the employer must pay the employees
salaries during the period between the LAs order of reinstatement pending appeal and the
resolution of the higher court overturning that of the LA.
31
In this case, CASI is liable to pay the
striking Union members their accrued wages for four months and nine days, which is the period from
the notice of the LAs order of reinstatement until the reversal thereof by the NLRC.
32

Citing Escario v. National Labor Relations Commission (Third Division),
33
CASI claims that the award
of the four-month accrued salaries to the Union members is not sanctioned by jurisprudence. In
Escario, the Court categorically stated that the strikers were not entitled to their wages during the
period of the strike (even if the strike might be legal), because they performed no work during the
strike. The Court further held that it was neither fair nor just that the dismissed employees should
litigate against their employer on the latters time.
34
In this case, however, the four-month accrued
salaries awarded to the Union members are not the backwages referred to in Escario. To be sure,
the awards were not given as their salaries during the period of the strike. Rather, they constitute the
employers liability to the employees for its failure to exercise the option of actual reinstatement or
payroll reinstatement following the LAs decision to reinstate the Union members as mandated by
Article 223 of the Labor Code adequately discussed earlier. In other words, such monetary award
refers to the Union members accrued salaries by reason of the reinstatement order of the LA which
is self-executory pursuant to Article 223.
35
We, therefore, sustain the award of the four-month
accrued salaries.1wphi 1
Finally, as regards the separation pay as a form of financial assistance awarded by the Court, we
find it necessary to reconsider the same and delete the award pursuant to prevailing jurisprudence.
Separation pay may be given as a form of financial assistance when a worker is dismissed in cases
such as the installation of labor-saving devices, redundancy, retrenchment to prevent losses, closing
or cessation of operation of the establishment, or in case the employee was found to have been
suffering from a disease such that his continued employment is prohibited by law.
36
It is a statutory
right defined as the amount that an employee receives at the time of his severance from the service
and is designed to provide the employee with the wherewithal during the period that he is looking for
another employment.
37
It is oriented towards the immediate future, the transitional period the
dismissed employee must undergo before locating a replacement job.
38
As a general rule, when just
causes for terminating the services of an employee exist, the employee is not entitled to separation
pay because lawbreakers should not benefit from their illegal acts.
39
The rule, however, is subject to
exceptions.
40
The Court, in Philippine Long Distance Telephone Co. v. NLRC,
41
laid down the
guidelines when separation pay in the form of financial assistance may be allowed, to wit:
We hold that henceforth separation pay shall be allowed as a measure of social justice only in those
instances where the employee is validly dismissed for causes other than serious misconduct or
those reflecting on his moral character. Where the reason for the valid dismissal is, for example,
habitual intoxication or an offense involving moral turpitude, like theft or illicit sexual relations with a
fellow worker, the employer may not be required to give the dismissed employee separation pay, or
financial assistance, or whatever other name it is called, on the ground of social justice.
A contrary rule would, as the petitioner correctly argues, have the effect, of rewarding rather than
punishing the erring employee for his offense. And we do not agree that the punishment is his
dismissal only and that the separation pay has nothing to do with the wrong he has committed x x
x.
42

We had the occasion to resolve the same issue in Toyota Motor Phils. Corp. Workers Association
(TMPCWA) v. National Labor Relations Commission.
43
Following the declaration that the strike
staged by the Union members is illegal, the Union officers and members were considered validly
dismissed from employment for committing illegal acts during the illegal strike. The Court affirmed
the CAs conclusion that the commission of illegal acts during the illegal strike constituted serious
misconduct.
44
Hence, the award of separation pay to the Union officials and members was not
sustained.
45

Indeed, we applied social justice and equity considerations in several cases to justify the award of
financial assistance. In Piero v. National Labor Relations Commission,
46
the Court declared the
strike to be illegal for failure to comply with the procedural requirements. We, likewise, sustained the
dismissal of the Union president for participating in said illegal strike. Considering, however, that his
infraction is not so reprehensible and unscrupulous as to warrant complete disregard of his long
years of service, and considering further that he has no previous derogatory records, we granted
financial assistance to support him in the twilight of his life after long years of service.
47
The same
compassion was also applied in Aparente, Sr. v. NLRC
48
where the employee was declared to have
been validly terminated from service after having been found guilty of driving without a valid drivers
license, which is a clear violation of the companys rules and regulations.
49
We, likewise, awarded
financial assistance in Salavarria v. Letran College
50
to the legally dismissed teacher for violation of
school policy because such infraction neither amounted to serious misconduct nor reflected that of a
morally depraved person.
However, in a number of cases cited in Toyota Motor Phils. Corp. Workers Association (TMPCWA)
v. National Labor Relations Commission,
51
we refrained from awarding separation pay or financial
assistance to Union officers and members who were separated from service due to their
participation in or commission of illegal acts during the strike.
52
In Pilipino Telephone Corporation v.
Pilipino Telephone Employees Association (PILTEA),
53
the strike was found to be illegal because of
procedural infirmities and for defiance of the Secretary of Labors assumption order. Hence, we
upheld the Union officers dismissal without granting financial assistance. In Sukhotai Cuisine and
Restaurant v. Court of Appeals,
54
and Manila Diamond Hotel and Resort, Inc. (Manila Diamond
Hotel) v. Manila Diamond Hotel Employees Union,
55
the Union officers and members who
participated in and committed illegal acts during the illegal strike were deemed to have lost their
employment status and were not awarded financial assistance.
In Telefunken Semiconductors Employees Union v. Court of Appeals,
56
the Court held that the
strikers open and willful defiance of the assumption order of the Secretary of Labor constitute
serious misconduct and reflective of their moral character, hence, granting of financial assistance to
them cannot be justified. In Chua v. National Labor Relations Commission,
57
we disallowed the
award of financial assistance to the dismissed employees for their participation in the unlawful and
violent strike which resulted in multiple deaths and extensive property damage because it constitutes
serious misconduct on their part.
Here, not only did the Court declare the strike illegal, rather, it also found the Union officers to have
knowingly participated in the illegal strike. Worse, the Union members committed prohibited acts
during the strike. Thus, as we concluded in Toyota, Telefunken, Chua and the other cases cited
above, we delete the award of separation pay as a form of financial assistance.
WHEREFORE, premises considered, the motion for reconsideration of the Union, its officers and
members are DENIED for lack of merit, while the motion for partial reconsideration filed by C.
Alcantara & Sons, Inc. is PARTLY GRANTED. The Decision of the Court dated September 29, 2010
is hereby PARTLY RECONSIDERED by deleting the award of separation pay.
SO ORDERED.
DIOSDADO M. PERALTA
Associate Justice