1. Peoples Broadcasting v. Sec. of DOLEG.R. no. 179652.

May 8, 2009
Facts:
Jandeleon Juezan (respondent) filed a complaint against Peoples Broadcasting Service, Inc.
(BomboRadyo Phils., Inc) (petitioner) for illegal deduction, non-payment of service incentive leave, 13
thmonth pay, premium pay for holiday and rest day and illegal diminution of benefits, delayed payment of
wages and non-coverage of SSS, PAG-IBIG and Philhealth before the Department of Labor and
Employment (DOLE)Regional Office No. VII,Cebu City.On the basis of the complaint, the DOLE
conducted a plant level inspection on 23 September 2003. Inthe Inspection Report Form,
the Labor Inspector wrote under the heading Findings/Recommendations non-diminution of benefits
and Note: Respondent deny employer-employee relationship with the complainant- see Notice of
Inspection results.Petitioner was required to rectify/restitute the violations within five (5) days from
receipt. No rectificationwas effected by petitioner; thus, summary investigations were conducted, with the
parties eventually ordered tosubmit their respective position papers.In his Order dated 27 February 2004,
DOLE Regional Director Atty. Rodolfo M. Sabulao (RegionalDirector) ruled that respondent is an
employee of petitioner, and that the former is entitled to his money claimsamounting to P203, 726.30.
Petitioner sought reconsideration of the Order, claiming that the Regional Director gavecredence to the
documents offered by respondent without examining the originals, but at the same time he missed or
failed to consider petitioners evidence. Petitioners motion for reconsideration was denied.
On appeal to theDOLE Secretary, petitioner denied once more the existence of employer-employee
relationship. In its Order dated 27 January 2005, the Acting DOLE Secretary dismissed the appeal on the
ground that petitioner did not post acash or surety bond and instead submitted a Deed of Assignment of
Bank Deposit. Petitioner maintained that there isno employer-employee relationship had ever existed
between it and respondent because it was the drama directorsand producers who paid, supervised and
disciplined respondent. It also added that the case was beyond the jurisdiction of the DOLE and should
have been considered by the labor arbiter because respondents claimexceeded P5,000.00.
Issue:
Does the Secretary of Labor have the power to determine the existence of an employer-
employeerelationship?
Held:
No.Clearly the law accords a prerogative to the NLRC over the claim when the employer-employee
relationshiphas terminated or such relationship has not arisen at all. The reason is obvious. In the second
situation especially,the existence of an employer-employee relationship is a matter which is not easily
determinable from an ordinaryinspection, necessarily so, because the elements of such a relationship are
not verifiable from a mere ocular examination. The intricacies and implications of an employer-employee
relationship demand that the level of scrutiny should be far above the cursory and themechanical. While
documents, particularly documents found in the employers office are the primary sourcematerials, what
may prove decisive are factors related to the history of the employers business operations, itscurrent
state as well as accepted contemporary practices in the industry. More often than not, the question of
employer-employee relationship becomes a battle of evidence, the determination of which should be
comprehensiveand intensive and therefore best left to the specialized quasi-judicial body that is the
NLRC.
It can be assumed that the DOLE in the exercise of its visitorial and enforcement power somehow has
tomake a determination of the existence of an employer-employee relationship. Such
prerogativaldetermination, however, cannot be coextensive with the visitorial and enforcement power
itself. Indeed, suchdetermination is merely preliminary, incidental and collateral to the DOLEs primary
function of enforcinglabor standards provisions. The determination of the existence of employer-
employee relationship is stillprimarily lodged with the NLRC. This is the meaning of the clause in cases
where the relationship of employer-employee still exists in Art. 128 (b)
2. REFORMIST UNION OF R.B. LINER, INC., HEVER DETROS, ET AL., petitioners, vs.
NATIONAL LABOR RELATIONS COMMISSION, R.B. LINER, INC., BERNITA
DEJERO, FELIPE DEJERO, RODELIO DEJERO, ANA TERESA DEJERO, and
RODELIO RYAN DEJERO, respondents.
Labor Law; Compulsory Arbitration; Strikes; When an employer accedes to the peaceful settlement
brokered by the NLRC, agreeing to accept all employees who had not yet returned to work, it waives the
issue of the illegality of the strike.The private respondents can no longer contest the legality of the
strike held by the petitioners on 13 December 1989, as the private respondents themselves sought
compulsory arbitration in order to resolve that very issue, hence their letter to the Labor Secretary read, in
part: This is to request your good office to certify for compulsory arbitration or to assume jurisdiction
over the labor dispute (strike continuing) between R.B. Liner, Inc. . . . and the Lakas Manggagawa sa
Pilipinas . . . The current strike by Lakas which started on December 13, 1989 even before Certification
Election could be held could not be resolved by the NCR Conciliation-Mediation Division after six
meetings/conferences between the parties. The dispute or strike was settled when the company and the
union entered into an agreement on 19 January 1990 where the private respondents agreed to accept all
employees who, by then, had not yet returned to work. By acceding to the peaceful settlement brokered
by the NLRC, the private respondents waived the issue of the illegality of the strike.
Same; Same; Same; Words and Phrases; Compulsory Arbitration, Defined.The very nature of
compulsory arbitration makes the settlement binding upon the private respondents, for compulsory
arbitration has been defined both as the process of settlement of labor disputes by a government agency
which has the authority to investigate and to make an award which is binding on all the parties, and as a
mode of arbitration where the parties are compelled to accept the resolution of their dispute through
arbitration by a third party. Clearly then, the legality of the strike could no longer be reviewed by the
Labor Arbiter, much less by the NLRC, as [Reformist Union of R.B. Liner, Inc. vs. NLRC, 266 SCRA
713(1997)] this had already been resolved. It was the sole issue submitted for compulsory arbitration by
the private respondents, as is obvious from the portion of their letter quoted above. The case certified by
the Labor Secretary to the NLRC was dismissed after the union and the company drew up the agreement
mentioned earlier. This conclusively disposed of the strike issue.
Same; Same; Same; Jurisdiction; Neither the Labor Arbiter nor the NLRC could review the same issue
passed upon in a certified case, and their decisions to the contrary are rendered in grave abuse of
discretion amounting to excess of jurisdiction.The Labor Code provides that the decision in
compulsory arbitration proceedings shall be final and executory ten (10) calendar days after receipt
thereof by the parties. The parties were informed of the dismissal of the case in a letter dated 14
February 1990, and while nothing in the record indicates when the said letter was received by the parties,
it is reasonable to infer that more than ten days elapsedhence, the NLRC decision had already become
final and executorybefore the private respondents filed their complaint with the Labor Arbiter on 13
July 1990. A final judgment is no longer susceptible to change, revision, amendment, or reversal. Neither
the Labor Arbiter nor the NLRC, therefore, could review the same issue passed upon in NLRC Certified
Case No. 0542, and their decisions to the contrary have been rendered in grave abuse of discretion
amounting to excess of jurisdiction.
Same; Same; Same; Compromise Agreements; While the Supreme Court is not abandoning the rule that
unfair labor practice acts are beyond and outside the sphere of compromises, the agreement in the
instant case was voluntarily entered into and represents a reasonable settlement, thus binding upon the
parties.The agreement entered into by the company and the union, moreover, was in the nature of a
compromise agreement, i.e., an agreement between two or more persons, who, for preventing or putting
an end to a lawsuit, adjust their difficulties by mutual consent in the manner which they agree on, and
which everyone of them prefers to the hope of gaining, balanced by the danger of losing. Thus, in the
agreement, each party made concessions in favor of the other to avoid a protracted litigation. While we do
not abandon the rule that unfair labor practice acts are beyond and outside the sphere of compromises,
the agreement herein was voluntarily entered into and represents a reasonable settlement, thus it binds the
parties. [Reformist Union of R.B. Liner, Inc. vs. NLRC, 266 SCRA 713(1997)] Same; Illegal Dismissals;
The burden of proving just and valid cause for dismissing employees from employment rests on the
employer, and the latters failure to do so results in a finding that the dismissal was unfounded.The
only barrier then to the petitionersemployees reinstatement is their defiance of the Labor Secretarys
return-to-work order, which the private respondents claim as one reason to validly dismiss the petitioners-
employees. We disagree, however, with the finding that Lakas/Reformist violated the said order. It is
upon the private respondents to substantiate the aforesaid defiance, as the burden of proving just and valid
cause for dismissing employees from employment rests on the employer, and the latters failure to do so
results in a finding that the dismissal was unfounded. The private respondents fell short of discharging
this burden.
Same; Same; Return-to-Work Orders; Grave Abuse of Discretion; Where the employer fails to
satisfactorily establish any violation of the Labor Secretarys return-to-work order, any contrary finding
by the Labor Arbiter and the NLRC is committed with grave abuse of discretion.The private
respondents thus failed to satisfactorily establish any violation of the Labor Secretarys return-to-work
order, and consequently, the Labor Arbiters and the NLRCs contrary finding is not anchored on
substantial evidence. Grave abuse of discretion was thus committed once more.
Same; Same; Same; Reinstatement; Where there was, in fact, no defiance of the Labor Secretarys return-
to-work order, and no cause to decree the employees dismissal in the first instance, reinstatement of the
dismissed employees can be the only outcome.As regards the illegal lockout alleged by the petitioners,
we agree with the NLRCs finding that the petitioners had sufficient basis to believe in good faith that the
private respondents were culpable. The NLRC found this circumstance to justify the petitioners-
employees reinstatement; we add that since there was, in fact, no defiance of the Labor Secretarys
return-to-work order, and no cause to decree the petitioners-employees dismissal in the first instance,
reinstatement of the dismissed employees can be the only outcome in this case.
Same; Same; Same; Same; Separation Pay; Separation pay, equivalent to one months salary for every
year of service, is awarded as an alternative to reinstatement when the latter is no longer an option, and is
computed from the commencement of employment up to the time of termination, including the imputed
service for which the [Reformist Union of R.B. Liner, Inc. vs. NLRC, 266 SCRA 713(1997)]
Same; Illegal Dismissals; The burden of proving just and valid cause for dismissing employees from
employment rests on the employer, and the latters failure to do so results in a finding that the dismissal
was unfounded.The only barrier then to the petitioners employees reinstatement is their defiance of the
Labor Secretarys return-to-work order, which the private respondents claim as one reason to validly
dismiss the petitioners-employees. We disagree, however, with the finding that Lakas/Reformist violated
the said order. It is upon the private respondents to substantiate the aforesaid defiance, as the burden of
proving just and valid cause for dismissing employees from employment rests on the employer, and the
latters failure to do so results in a finding that the dismissal was unfounded. The private respondents fell
short of discharging this burden.
Same; Same; Return-to-Work Orders; Grave Abuse of Discretion; Where the employer fails to
satisfactorily establish any violation of the Labor Secretarys return-to-work order, any contrary finding
by the Labor Arbiter and the NLRC is committed with grave abuse of discretion.The private
respondents thus failed to satisfactorily establish any violation of the Labor Secretarys return-to-work
order, and consequently, the Labor Arbiters and the NLRCs contrary finding is not anchored on
substantial evidence. Grave abuse of discretion was thus committed once more.
Same; Same; Same; Reinstatement; Where there was, in fact, no defiance of the Labor Secretarys return-
to-work order, and no cause to decree the employees dismissal in the first instance, reinstatement of the
dismissed employees can be the only outcome.As regards the illegal lockout alleged by the petitioners,
we agree with the NLRCs finding that the petitioners had sufficient basis to believe in good faith that the
private respondents were culpable. The NLRC found this circumstance to justify the petitioners-
employees reinstatement; we add that since there was, in fact, no defiance of the Labor Secretarys
return-to-work order, and no cause to decree the petitioners-employees dismissal in the first instance,
reinstatement of the dismissed employees can be the only outcome in this case.
Same; Same; Same; Same; Separation Pay; Separation pay, equivalent to one months salary for every
year of service, is awarded as an alternative to reinstatement when the latter is no longer an option, and is
computed from the commencement of employment up to the time of termination, including the imputed
service for which the [Reformist Union of R.B. Liner, Inc. vs. NLRC, 266 SCRA 713(1997)
3. DAVAO CITY WATER DISTRICT, CAGAYAN DE ORO CITY WATER DISTRICT,
METRO CEBU WATER DISTRICT, ZAMBOANGA CITY WATER DISTRICT, LEYTE
METRO WATER DISTRICT, BUTUAN CITY WATER DISTRICT, CAMARINES
NORTE WATER DISTRICT, LAGUNA WATER DISTRICT, DUMAGUETE CITY
WATER DISTRICT, LA UNION WATER DISTRICT, BAYBAY WATER DISTRICT,
METRO LINGAYEN WATER DISTRICT, URDANETA WATER DISTRICT,
COTABATO CITY WATER DISTRICT, MARAWI WATER DISTRICT, TAGUM
WATER DISTRICT, DIGOS WATER DISTRICT, BISLIG WATER DISTRICT, and
MECAUAYAN WATER DISTRICT, petitioners, vs. CIVIL SERVICE COMMISSION,
and COMMISSION ON AUDIT, respondents.
Corporation Law; Civil Service Law; Court reiterates the ruling in Tanjay case declaring water district
government-owned or controlled corporations with original charter.After a fair consideration of the
parties arguments coupled with a careful study of the applicable laws as well as the constitutional
provisions-involved, We rule against the petitioners and reiterate Our ruling in Tanjay case declaring
water districts government-owned or controlled corporations with original charter.
Same; Same; Same; A water district is a corporation created pursuant to a special lawP.D. No. 198, as
amended, and as such its officers and employees are covered by the Civil Service Law.As. early as
Baguio Water District v. Trajano, et al., (G.R. No. 65428, February 20, 1984, 127 SCRA 730), We
already ruled that a water district is a corporation created pursuant to a special lawP.D. No. 198, as
amended, and as such its officers and employees are covered by the Civil Service Law.
Same; Same; Same; Same; P.D. No. 198 is a special law applicable only to the different water districts
created pursuant thereto; Courts resolution in Metro Iloilo case declaring PD 198 as a general legislation
is abandoned.Ascertained from a consideration of the whole statute, PD 198 is a special law applicable
only to the different water districts created pursuant thereto. In all its essential terms, it is obvious that it
pertains to a special purpose which is intended to meet a particular set of conditions and circumstances.
The fact that said decree generally applies to all water districts throughout the country does not change
the fact that PD 198 is a special law. Accordingly, this Courts resolution in Metro Iloilo case declaring
PD 198 as a general legislation is hereby abandoned,
Same; Same; Same; Same; By government-owned or controlled corporation with original charter means
government owned or controlled corporation created by a special law and not under the Corporation Code
of the Philippines.By government-owned or controlled corporation with original charter, We mean
government owned or controlled corporation created by a special law and not under the Corporation Code
of the Philippines.
Same; Same; Same; Same; Same; From the foregoing pronouncement, it is clear that what has been
excluded from the coverage of the CSC are those corporations created pursuant to the Corporation
Code.From the foregoing pronouncement, it is clear that what has been excluded from the coverage of
the CSC are those corporations created pursuant to the Corporation Code. Significantly, petitioners are
not created under the said code, but on the contrary, they were created pursuant to a special law and are
governed primarily by its provision. [Davao City Water District vs. Civil Service Commission, 201
SCRA 593(1991)]
4. VICTORIANO ZAMORAS, petitioner, vs. ROQUE SU, JR., ANITA SU HORTELLANO
and NATIONAL LABOR RELATIONS COMMISSION, respondents.
Agrarian Law; Tenant, defined; Agricultural tenancy, defined.Un-der Section 5 (a) of R.A. No. 1199, a
tenant is a person who by himself, or with the aid available from within his immediate household,
cultivates the land belonging to or possessed by another, with the latters consent for purposes of
production, sharing the produce with the landholder or for a price certain or ascertainable in produce or in
money or both, under the leasehold tenancy system (Matienzo vs. Servidad, 107 SCRA 276).
Agricultural tenancy is defined as the physical possession by a person of land devoted to agriculture,
belonging to or legally possessed by another for the purpose of production through the labor of the former
and of the members of his immediate farm household in consideration of which the former agrees to share
the harvest with the latter or to pay a price certain or ascertainable, whether in produce or in money, or
both (Sec. 3, R.A. No. 1199; 50 O.G. 4655-56; Miguel Carag vs. CA, et al., 151 SCRA 44).
Same; Same; Same; Requisites of tenancy relationship.The essential requisites of a tenancy relationship
are: (1) the parties are the landholder and the tenant; (2) the subject is the agricultural holding; (3) there is
consent between the parties; (4) the purpose is agricultural production; (5) there is personal cultivation by
the tenant; and (6) there is a sharing of harvests between landlord and tenant (Antonio Castro vs. CA and
De la Cruz, G.R. L-34613, January 26, 1989; Tiongson vs. CA, 130 SCRA 482; Guerrero vs. CA, 142
SCRA 138).
Same; Same; Same; Elements of personal cultivation.The element of personal cultivation of the land, or
with the aid of his farm household, essential in establishing a landlord-tenant or a lessor-lessee
relationship, is absent in the relationship between Su and Zamoras (Co vs. IAC, 162 SCRA 390; Graza vs.
CA, 163 SCRA 39), for Zamoras did not cultivate any part of Sus plantation either by himself or with the
help of his household.
Same; NLRC, Jurisdiction; It is the NLRC, not the Court of Agrarian Relations, that has jurisdiction to try
and decide Zamoras complaint for illegal dismissal.Since Zamoras was an employee, not a tenant of
Su, it is the NLRC, not the Court of Agrarian Relations, that has jurisdiction to try and decide Zamoras
complaint for illegal dismissal (Art. 217, Labor Code; Manila Mandarin Employees Union vs. NLRC,
154 SCRA 368; Jacqueline Industries Dunhill Bags Industries, et al. vs. NLRC, et al., 69 SCRA 242).
[Zamoras vs. Su, Jr., 184 SCRA 248(1990)]











5. FORTUNE CEMENT CORPORATION, petitioner, vs. NATIONAL LABOR
RELATIONS COMMISSION (First Division) and ANTONIO M. LAGDAMEO,
respondents.
Labor Law; National Labor Relations Commission; Dismissal; Corporation Law; PD 902-A; Securities
and Exchange Commission; A complaint filed by a corporate executive vice-president for illegal
dismissal, resulting from a board resolution dismissing him as such officer is within the jurisdiction of the
SEC, not of the NLRC.In PSBA vs. Leao (127 SCRA 778), this Court, confronted with a similar
controversy, ruled that the SEC, not the NLRC, has jurisdiction: This is not a case of dismissal. The
situation is that of a corporate office having been declared vacant, and of Tans not having been elected
thereafter. The matter of whom to elect is a prerogative that belongs to the Board, and involves the
exercise of deliberate choice and the faculty of discriminative selection. Generally speaking, the
relationship of a person to a corporation, whether as officer or as agent or employee is not determined by
the nature of the services performed, but by the incidents of the relationship as they actually exist. x x x
The issue of the SECs power or jurisdiction is decisive and renders unnecessary a consideration of the
other questions raised by Lagdameo. Thus did this Court rule in the case of Dy vs. National Labor
Relations Commission (145 SCRA 211) which involved a similar situation: It is of no moment that
Vailoces, in his amended complaint, seeks other reliefs which would seemingly fall under the jurisdiction
of the Labor Arbiter, because a closer look at theseunderpayment of salary and non-payment of living
allowanceshows that they are actually part of the perquisites of his elective position, hence, intimately
linked with his relations with the corporation. The question of remuneration, involving as it does, a person
who is not a mere employee but a stockholder and officer, an integral part, it might be said, of the
corporation, is not a simple labor problem but a matter that comes within the area of corporate affairs and
management, and is in fact a corporate controversy in contemplation of the Corporation Code. (Italics
ours.) [Fortune Cement Corporation vs. NLRC, 193 SCRA 258(1991)]











6. SOUTHEAST ASIAN FISHERIES DEVELOPMENT CENTER-AQUACULTURE
DEPARTMENT (SEAFDEC-AQD), DR. FLOR LACANILAO (CHIEF), RUFIL CUEVAS
(HEAD, ADMINISTRATIVE DIV.), BEN DELOS REYES (FINANCE OFFICER),
petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION AND JUVENAL
LAZAGA, respondents.
Labor Law; Independency of SEAFDEC as intergovernmental organization from state.Being an
intergovernmental organization, SEAFDEC including its Departments (AQD), enjoys functional
independence and freedom from control of the state in whose territory its office is located.
Same; Jurisdiction; Estoppel; Estoppel does not apply to confer jurisdiction to a tribunal that has none
over a cause of action.Estoppel does not apply to confer jurisdiction to a tribunal that has none over a
cause of action. Jurisdiction is conferred by law. Where there is none, no agreement of the parties can
provide one.
Same; Same.Decision of a tribunal not vested with appropriate jurisdiction is null and void.
Same; Same; Appeal.The lack of jurisdiction of a court may be raised at any stage of the proceedings,
even on appeal. This doctrine has been qualified by recent pronouncements which stemmed principally
from the ruling in the cited case of Sibonghanoy. It is to be regretted, however, that the holding in said
case had been applied to situations which were obviously not contemplated therein. The exceptional
circumstances involved in Sibonghanoy which justified the departure from the accepted concept of non-
waivability of objection to jurisdiction has been ignored and, instead a blanket doctrine had been
repeatedly upheld that rendered the supposed ruling in Sibonghanoy not as the exception, but rather the
general rule, virtually overthrowing altogether the time-honored principle that the issue of jurisdiction is
not lost by waiver or by estoppel. [Southeast Asian Fisheries Development Center-Aquaculture
Department vs. National Labor Relations Commission, 206 SCRA 283(1992)]
7. BOY SCOUTS OF THE PHILIPPINES, petitioner, vs. NATIONAL LABOR RELATIONS
COMMISSION, FORTUNATO ESGUERRA, ROBERTO MALABORBOR,
ESTANISLAO MISA, VICENTE EVANGELISTA, and MARCELINO GARCIA,
respondents.
Constitutional Law; Public Corporations; BSPs functions as set out in its statutory charter do have a
public aspect; Case at bar.Examining the relevant statutory provisions and the arguments outlined
above, the Court considers that the following need to be considered in arriving at the appropriate legal
characterization of the BSP for purposes of determining whether its officials and staff members are
embraced in the Civil Service. Firstly, BSPs functions as set out in its statutory charter do have a public
aspect. BSPs functions do relate to the fostering of the public virtues of citizenship and patriotism and
the general improvement of the moral spirit and fiber of our youth. The social value of activities like
those to which the BSP dedicates itself by statutory mandate have in fact, been accorded constitutional
recognition. Article II of the 1987 Constitution includes in the Declaration of Principles and State
Policies, the following: Sec. 13. The State recognizes the vital role of the youth in nation-building and
shall promote and protect their physical, moral, spiritual, intellectual, and social well-being. It shall
inculcate in the youth patriotism and nationalism, and encourage their involvement in public and civic
affairs. At the same time, BSPs functions do not relate to the governance of any part of territory of the
Philippines; BSP is not a public corporation in the same sense that municipal corporations or local
governments are public corporations. BSPs functions can not also be described as proprietary functions
in the same sense that the func- [Boy Scouts of the Philippines vs NLRC, 196 SCRA 176(1991)]
8. IBM PHILIPPINES, INC., VIRGILIO L. PEA, and VICTOR V. REYES, petitioners, vs.
NATIONAL LABOR RELATIONS COMMISSION and ANGEL D. ISRAEL, respondents.
Labor Law; Appeals; The practice of admitting additional evidence on appeal in labor cases has been
sanctioned by this Court.It is indeed true that administrative agencies, such as the NLRC, are not bound
by the technical rules of procedure and evidence in the adjudication of cases. This was the reason private
respondent was allowed to submit additional evidence even after the case was deemed submitted for
resolution by the labor arbiter. The practice of admitting additional evidence on appeal in labor cases has
been sanctioned by this Court.
Same; Same; The provision for flexibility in administrative procedure does not go so far as to justify
orders without a basis in evidence having rational probative value.The liberality of procedure in
administrative actions is subject to limitations imposed by basic requirements of due process. As this
Court said in Ang Tibay v. CIR, the provision for flexibility in administrative procedure does not go so
far as to justify orders without a basis in evidence having rational probative value.
Same; Same; In proceedings before the NLRC, the evidence presented before it must at least have a
modicum of admissibility for it to be given some probative value.The computer print-outs, which
constitute the only evidence of petitioners, afford no assurance of their authenticity because they are
unsigned. The decisions of this Court, while adhering to a liberal view in the conduct of proceedings
before administrative agencies, have nonetheless consistently required some proof of authenticity or
reliability as condition for the admission of documents.
Same; Dismissals; Due Process; The law requires an employer to furnish the employee two written
notices before termination of his employment may be ordered.The law requires an employer to furnish
the employee two written notices before termination of his [IBM Philippines, Inc. vs. NLRC, 305 SCRA
592(1999)]
9. PEPSI COLA DISTRIBUTORS OF THE PHILIPPINES, INC., represented by its Plant
General Manager ANTHONY B. SIAN, ELEAZAR LIMBAB, IRENEO BALTAZAR &
JORGE HERAYA, petitioners, vs. HON. LOLITA O. GAL-LANG, SALVADOR
NOVILLA, ALEJANDRO OLIVA, WILFREDO CABAAS & FULGENCIO LEGO,
respondents.
Civil Law; Labor Law; Jurisdiction; Not every controversy involving workers and their employers can be
resolved only by the labor arbiters; There must be a reasonable causal connection between the claim
asserted and employee-employer relations to put the case under the provisions of Article 217.It must be
stressed that not every controversy involving workers and their employers can be resolved only by the
labor arbiters. This will be so only if there is a reasonable causal connection between the claim asserted
and employee-employer relations to put the case under the provisions of Article 217. Absent such a link,
the complaint will be cognizable by the regular courts of justice in the exercise of their civil and criminal
jurisdiction.
Same; Same; Same; Same; Although a controversy is between an employer and an employee, the Labor
Arbiters have no jurisdiction if the Labor Code is not involved.ln Molave Motor Sales, Inc. v. Laron,
the same Justice held for the Court that the claim of the plaintiff against its sales manager for payment of
certain accounts pertaining to his purchase of vehicles and automotive parts, repairs of such vehicles, and
cash advances from the corporation was properly cognizable by the Regional Trial Court of Dagupan City
and not the labor arbiter, because although a controversy is between an employer and an employee, the
Labor Arbiters have no jurisdiction if the Labor Code is not involved.
Same; Same; Same; Same; No reasonable causal connection between the complaint and the relations of
the parties as employer and employees in the case at bar.The case now before the Court involves a
complaint for damages for malicious prosecution which was filed with the Regional Trial Court of Leyte
by the employees of the defendant company. It does not appear that there is a reasonable causal
connection between the complaint and the relations of the [Pepsi Cola Distributors of the Phils., Inc. vs.
Gal-lang, 201 SCRA 695(1991)]
10. EVELYN TOLOSA, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION,
QWANA KAIUN (through its residentagent, FUMIO NAKAGAWA), ASIA BULK
TRANSPORT PHILS., INC., PEDRO GARATE and MARIO ASIS, respondents.
Labor Law; National Labor Relations Commission; Jurisdiction; The allegations in the complaint
determine the nature of the action and, consequently, the jurisdiction of the courts.Time and time again,
we have held that the allegations in the complaint determine the nature of the action and, consequently,
the jurisdiction of the courts. After carefully examining the complaint/position paper of petitioner, we are
convinced that the allegations therein are in the nature of an action based on a quasi delict or tort. It is
evident that she sued Pedro Garate and Mario Asis for gross negligence.
Same; Same; Same; Damages; The jurisdiction of labor tribunals is limited to disputes arising from
employer-employee relations.The jurisdiction of labor tribunals is limited to disputes arising from
employer-employee relations, as we ruled in Georg Grotjahn GMBH & Co. v. Isnani: Not every dispute
between an employer and employee involves matters that only labor arbiters and the NLRC can resolve in
the exercise of their adjudicatory or quasi-judicial powers. The jurisdiction of labor arbiters and the
NLRC under Article 217 of the Labor Code is limited to disputes arising from an employer-employee
relationship which can only be resolved by reference to the Labor Code, other labor statutes, or their
collective bargaining agreement.
Same; Same; Same; Same; Reliefs to be awarded by labor arbiters and the NLRC must still be based on
an action that has a reasonable causal connection with labor laws.While it is true that labor arbiters and
the NLRC have jurisdiction to award not only reliefs provided by labor laws, but also damages governed
by the Civil Code, these reliefs must still be based on an action that has a reasonable causal connection
with the Labor Code, other labor statutes, or collective bargaining agreements.
Same; Same; Same; Same; Where such principal relief is to be granted under labor legislation or a
collective bargaining agreement, the case should fall within the jurisdiction of the Labor Arbiter and the
NLRC.It is the character of the principal relief sought that appears essential in this connection. Where
such principal relief is to be granted under labor legislation or a collective bargaining agreement, the case
should fall within the jurisdiction of the Labor Arbiter and the NLRC, even though a claim for damages
might be asserted as an incident to such claim.
Same; Same; Same; Same; It is not the NLRC but the regular courts that have jurisdiction over actions for
damages.It is not the NLRC but the regular courts that have jurisdiction over actions for damages, in
which the employer-employee relation is merely incidental, and in which the cause of action proceeds
from a different source of obligation such as a tort. Since petitioners claim for damages is predicated on a
quasi delict or tort that has no reasonable causal connection with any of the claims provided for in Article
217, other labor statutes, or collective bargaining agreements, jurisdiction over the action lies with the
regular courtsnot with the NLRC or the labor arbiters.
Same; Same; Appeals; Well-settled is the rule that issues not raised below cannot be raised for the first
time on appeal.This argument cannot be passed upon in this appeal, because it was not raised in the
tribunals a quo. Well-settled is the rule that issues not raised below cannot be raised for the first time on
appeal. Thus, points of law, theories, and arguments not brought to the attention of the Court of Appeals
need notand ordinarily will notbe considered by this Court. Petitioners allegation cannot be accepted
by this Court on its face; to do so would be tantamount to a denial of respondents right to due process.
[Tolosa vs. National Labor Relations Commission, 401 SCRA 291(2003)]
11. RUFINO C. MONTOYA, petitioner, vs. TRANSMED MANILA CORPORATION/MR.
EDILBERTO ELLENA and GREAT LAKE NAVIGATION CO., LTD., respondents.
Labor Law; Termination of Employment; A work-relatedness could possibly have been shown since the
tuberculosis, apparently dormant when Montoya boarded his ship, flared up after the work-related
accident and its stresses intervened. This possible line of argument, however, is one that escaped the
parties and the tribunals below, and to date has remained unexplored.To recapitulate, the CA properly
recognized that the NLRC committed no grave abuse of discretion in dismissing Montoyas complaint;
the NLRCs findings of facts have sufficient basis in evidence and in the records of the case and, in our
own view, far from the arbitrariness that characterizes excess of jurisdiction. If Montoya had any basis at
all to support his claim, such basis might have been found after considering that he was medically fit
when he boarded the ship based on the requisite pre-employment examination; his tuberculosis was only
discovered after repatriation, and the company doctor himself certified that it could have been pre-
existing and might have just flared up because of the accident. Under this Courts ruling in Belarmino v.
Employees Compensation Commission (185 SCRA 304 [1990]), a work-relatedness could possibly have
been shown since the tuberculosis, apparently dormant when Montoya boarded his ship, flared up after
the work-related accident and its stresses intervened. This possible line of argument, however, is one that
escaped the parties and the tribunals below, and to date has remained unexplored. In any event, even if
invoked, the CAs omission to recognize the validity of this line of argument would have only been an
error of judgment, not a grave abuse of discretion, since the argument would have simply embodied a
competing theory that the CA did not adopt in a situation not attended by any arbitrariness or grave abuse
of discretion. [Montaya vs. Transmed Manila Corporation, 597 SCRA 334(2009)]
12. NAZARIO C. AUSTRIA, petitioner, vs. NATIONAL LABOR RELATIONS
COMMISSION, ABETO A. UY and PHILIP-PINE STEEL COATING CORPORATION,
respondents.
Labor Law; Administrative Law; Words and Phrases; Sub-stantial Evidence, Explained; The Supreme
Court cannot affirm the decision of the National Labor Relations Commission when its findings of fact on
which the conclusion was based are not supported by substantial evidence.Petitioner, in effect, assigns
grave abuse of discretion on the part of public respondent NLRC for its misappreciation of the evidence
and giving it undue weight. Basic is the rule that judicial review of labor cases does not go so far as to
evaluate the sufficiency of evidence on which the labor officials findings rest; more so when both the
Labor Arbiter and the NLRC share the same findings. This, notwithstanding, we cannot affirm the
decision of the NLRC especially when its findings of fact on which the conclusion was based are not
supported by substantial evidence. By substantial evidence, we mean the amount of relevant evidence
which a reasonable mind might accept as adequate to justify the conclusion.
Same; Evidence; Burden of Proof; Pleadings and Practice; Unlike in other cases where the complainant
has the burden of proof to discharge, in labor cases concerning illegal dismissals, the burden of proving
that the employee was dismissed with just cause rests upon the employer.The NLRC grounded its
findings on the following postulates: (a) the witnesses of PHILSTEEL are credible for petitioner failed to
show any ground for them to falsely testify, especially in the light of his excellent job performance; and,
(b) respondents witnesses are more credible than petitionersLukban who, insofar as the source of the
information is concerned, impressed the NLRC as evasive. The NLRC however entertained a patent
misapprehension of the burden of proof rule in labor termination cases. Unlike in other cases where the
complainant has the burden of proof to discharge, in labor cases concerning illegal dismissals, the burden
of proving that the employee was dismissed with just cause rests upon the employer. Such is the mandate
of Art. 278 of the Labor Code.
Same; Same; Hearsay Evidence; Witnesses; Loss of Trust and Confidence; Reliance both by the Labor
Arbiter and the National Labor Relations Commission on the hearsay testimonies in assessing the
evidence reflects a dangerous propensity for baseless conclusions amounting to grave abuse of discretion;
While loss of confidence or breach of trust is a valid ground for termination, it must rest on some basis
which must be convincingly established.The reliance both by the Labor Arbiter and the NLRC on the
hearsay testimonies in assessing the evidence of private respondents reflects a dangerous propensity for
baseless conclusions amounting to grave abuse of
13. PAL EMPLOYEES SAVINGS AND LOAN ASSOCIATION, INC. (PESALA), petitioner,
vs. NATIONAL LABOR RELATIONS COMMISSION and ANGEL V. ESQUEJO,
respondents.
Appeals; Certiorari; Abuse of Discretion; Special civil action of certiorari should be instituted within a
period of three months.At the outset, we would like to rectify the statement made by the Solicitor
General that the petitioner did not appeal from the Decision of (public) respondent NLRC. The
elevation of the said case by appeal is not possible. The only remedy available from an order or decision
of the NLRC is a petition for certiorari under Rule 65 of the Rules of Court alleging lack or excess of
jurisdiction or grave abuse of discretion. The general rule now is that the special civil action of certiorari
should be instituted within a period of three months. Hence, when the petition was filed on July 10, 1992,
three months had not yet elapsed from petitioners receipt of the assailed Decision (should really be from
receipt of the order denying the motion for reconsideration).
Labor Law; Labor Contracts; Contracts of labor are explicitly subject to the police power of the State.
In connection with the foregoing, we should add that even if there had been a meeting of the minds in the
instant case, the employment contract could not have effectively shielded petitioner from the just and
valid claims of private respondent. Generally speaking, contracts are respected as the law between the
contracting parties, and they may establish such stipulations, clauses, terms and conditions as they may
see fit; and for as long as such agreements are not contrary to law, morals, good customs, public policy or
public order, they shall have the force of law between them. However, x x x, while it is the inherent and
inalienable right of every man to have the utmost liberty of contracting, and agreements voluntarily and
fairly made will be held valid and enforced in the courts, the general right to contract is subject to the
limitation that the agreement must not be in violation of the Constitution, the statute or some rule of law
(12 Am. Jur. pp. 641-642). And under the Civil Code, contracts of labor are explicitly subject to the
police power of the State because they are not ordinary contracts but are impressed with public interest.
Inasmuch as in this particular instance the contract in question would have been deemed in violation of
pertinent labor laws, the provisions of said laws would prevail over the terms of the contract, and private
respondent would still be entitled to overtime pay.
Same; Same; When an employee fails to assert his right immediately upon violation of the agreement,
such failure cannot ipso facto be deemed as a waiver of the oppression.The interpretation of the
provision in question having been put in issue, the Court is constrained to determine which interpretation
is more in accord with the intent of the parties. To ascertain the intent of the parties, the Court is bound to
look at their contemporaneous and subsequent acts. Private respondents silence and failure to claim his
overtime pay since 1986 cannot be considered as proving the understanding on his part that the rate
provided in his employment contract covers overtime pay. Precisely, that is the very question raised by
private respondent with the arbiter, because contrary to the claim of petitioner, private respondent
believed that he was not paid his overtime pay and that such pay is not covered by the rate agreed upon
and stated in his Appointment Memorandum. The subsequent act of private respondent in filing money
claims negates the theory that there was clear agreement as to the inclusion of his overtime pay in the
contracted salary rate. When an employee fails to assert his right immediately upon violation thereof,
such failure cannot ipso facto be deemed as a waiver of the oppression. We must recognize that the
worker and his employer are not equally situated. When a worker keeps silent inspite of flagrant
violations of his rights, it may be because he is seriously fearful of losing his job. And the dire
consequences thereof on his family and his dependents prevent him from complaining. In short, his
thoughts of sheer survival weigh heavily against launching an attack upon his more powerful employer.
[PAL Employees Savings and Loan Association, Inc. vs. NLRC, 260 SCRA 758(1996)]
14. CELESTINO VIVERO, petitioner, vs. COURT OF APPEALS, HAMMONIA MARINE
SERVICES, and HANSEATIC SHIPPING CO., LTD., respondents.
Labor Law; Voluntary Arbitrations; Collective Bargaining Agreements; Illegal Dismissals; Jurisdiction;
Words and Phrases; Absent an express stipulation in the CBA, the phrase all disputes should be
construed as limited to the areas of conflict traditionally within the jurisdiction of Voluntary Arbitrators,
i.e., disputes relating to contract-interpretation, contract-implementation, or interpretation or enforcement
of company personnel policiesillegal termination disputes in the absence of an express CBA provision,
do not fall within any of these categories, and are within the exclusive original jurisdiction of Labor
Arbiters by express provision of law.In San Miguel Corp. v. National Labor Relations Commission this
Court held that the phrase all other labor disputes may include termination disputes provided that the
agreement between the Union and the Company states in unequivocal language that [the parties]
conform to the submission of termination disputes and unfair labor practices to voluntary arbitration.
Ergo, it is not sufficient to merely say that parties to the CBA agree on the principle that all disputes
should first be submitted to a Voluntary Arbitrator. There is a need for an express stipulation in the CBA
that illegal termination disputes should be resolved by a Voluntary Arbitrator or Panel of Voluntary
Arbitrators, since the same fall within a special class of disputes that are generally within the exclusive
original jurisdiction of Labor Arbiters by express provision of law. Absent such express stipulation, the
phrase all disputes should be construed as limited to the areas of conflict traditionally within the
jurisdiction of Voluntary Arbitrators, i.e., disputes relating to contract-interpretation, contract-
implementation, or interpretation or enforcement of company personnel policies. Illegal termination
disputesnot falling within any of these categoriesshould then be considered as a special area of
interest governed by a specific provision of law.
Same; Same; Same; The use of the word may shows the intention of the parties to reserve the right to
submit the illegal termination dispute to the jurisdiction of the Labor Arbiter, rather than to a Voluntary
Arbitrator-In this case, however, while the parties did agree to make termination disputes the proper
subject of voluntary arbitration, such submission remains discretionary upon the parties. A perusal of the
CBA provisions shows that Sec. 6, Art. XII (Grievance Procedure) of the CBA is the general agreement
of the parties to refer grievances, disputes or misunderstandings to a grievance committee, and
henceforth, to a voluntary arbitration committee, x x x The use of the word may shows the intention of
the parties to reserve the right to submit the illegal termination dispute to the jurisdiction of the Labor
Arbiter, rather than to a Voluntary Arbitrator. Petitioner validly exercised his option to submit his case to
a Labor Arbiter when he filed his Complaint before the proper government agency.
Same; Same; Same; When the parties have validly agreed on a procedure for resolving grievances and to
submit a dispute to voluntary arbitration then that procedure should be strictly observed.The CBA
clarifies the proper procedure to be followed in situations where the parties expressly stipulate to submit
termination disputes to the jurisdiction of a Voluntary Arbitrator or Panel of Voluntary Arbitrators. For
when the parties have validly agreed on a procedure for resolving grievances and to submit a dispute to
voluntary arbitration then that procedure should be strictly observed. Non-compliance therewith cannot be
excused, as petitioner suggests, by the fact that he is not well-versed with the fine prints of the CBA. It
was his responsibility to find out, through his Union, what the provisions of the CBA were and how they
could affect his rights.
Same; Same; Same; Grievance Procedure; Where under the CBA, both Union and the employer are
responsible for selecting an impartial arbitrator or for convening an arbitration committee, yet neither
made a move towards this end, the employee should not be deprived of his legitimate recourse because of
the refusal of both Union and the employer to follow the grievance procedure.After the grievance
proceedings have failed to bring about a resolution, AMOSUP, as agent of petitioner, should have
informed him of his option to settle the case through voluntary arbitration. Private respondents, on their
part, should have timely invoked the provision of their CBA requiring the referral of their unresolved
disputes to a Voluntary Arbitrator once it became apparent that the grievance machinery failed to resolve
it prior to the filing of the case before the proper tribunal. The private respondents should not have waited
for nine (9) months from the filing of their Position Paper with the POEA before it moved to dismiss the
case purportedly for lack of jurisdiction. As it is, private respondents are deemed to have waived their
right to question the procedure followed by petitioner, assuming that they have the right to do so. Under
their CBA, both Union and respondent companies are responsible for selecting an impartial arbitrator or
for convening an arbitration committee; yet, it is apparent that neither made a move towards this end.
Consequently, [Vivero vs. Court of Appeals, 344 SCRA 268(2000)]
15. ATLAS FARMS, INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION,
JAIME O. DELA PEA and MARCIAL I. ABION, respondents.
Labor Law; Dismissals; Appeals; Factual findings of agencies exercising quasi-judicial functions are
accorded not only respect but even finality.The burden of proving that the dismissal of private
respondents was legal and valid falls upon petitioner. The NLRC found that petitioner failed to
substantiate its claim that both private respondents committed certain acts that violated company rules and
regulations, hence we find no factual basis to say that private respondents dismissal was in order. We see
no compelling reason to deviate from the NLRC ruling that their dismissal was illegal, absent a showing
that it reached its conclusion arbitrarily. Moreover, factual findings of agencies exercising quasi-judicial
functions are accorded not only respect but even finality, aside from the consideration here that this Court
is not a trier of facts. Same; Same; Requisites for a valid dismissal.For a dismissal to be valid, the
employer must show that: (1) the employee was accorded due process, and (2) the dismissal must be for
any of the valid causes provided for by law.
Same; Same; Benefits; A terminated employees receipt of his separation pay and other monetary benefits
does not preclude reinstatement or full benefits under the law, should reinstatement be no longer
possible.As a consequence of their illegal dismissal, private respondents are entitled to reinstatement to
their former positions. But since reinstatement is no longer feasible because petitioner had already closed
its shop, separation pay in lieu of reinstatement shall be awarded. A terminated employees receipt of his
separation pay and other monetary benefits does not preclude reinstatement or full benefits under the law,
should reinstatement be no longer possible. [Atlas Farms, Inc. vs. National Labor Relations Commission,
392 SCRA 128(2002)]
16. PIONEER TEXTURIZING CORP. and/or JULIANO LIM, petitioners, vs. NATIONAL
LABOR RELATIONS COMMISSION, PIONEER TEXTURIZING WORKERS UNION
and LOURDES A. DE JESUS, respondents.
Labor Law; Illegal Dismissal; Due Process; Lack of a just cause in the dismissal from service of an
employee renders the dismissal illegal, despite the employers observance of procedural due process.
Gleaned either from the Labor Arbiters observations or from the NLRCs assessment, it distinctly
appears that petitioners accusation of dishonesty and tampering of official records and documents with
intention of cheating against de Jesus was not substantiated by clear and convincing evidence. Petitioners
simply failed, both before the Labor Arbiter and the NLRC, to discharge the burden of proof and to
validly justify de Jesus dismissal from service. The law, in this light, directs the employers, such as
herein petitioners, not to terminate the services of an employee except for a just or authorized cause under
the Labor Code. Lack of a just cause in the dismissal from service of an employee, as in this case, renders
the dismissal illegal, despite the employers observance of procedural due process.
Same; Same; Management Prerogatives; While an employer has the inherent right to discipline its
employees, this right must always be exercised humanely, and the penalty it must impose should be
commensurate to the offense involved and to the degree of its infraction.We also find the imposition of
the extreme penalty of dismissal against de Jesus as certainly harsh and grossly disproportionate to the
negligence committed, especially where said employee holds a faithful and an untarnished twelve-year
service record. While an employer has the inherent right to discipline its employees, we have always held
that this right must always be exercised humanely, and the penalty it must impose should be
commensurate to the offense involved and to the degree of its infraction. The employer should bear in
mind that, in the exercise of such right, what is at stake is not only the employees position but her
livelihood as well.
Same; Same; Loss of Confidence; While loss of confidence is one of the valid grounds for termination of
employment, the same, however, cannot be used as a pretext to vindicate each and every instance of
unwarranted dismissalto be a valid ground, it must be shown that the employee concerned is
responsible for the misconduct or infraction and that the nature of his participation therein rendered him
absolutely unworthy of the trust and confidence demanded by his position.Equally unmeritorious is
petitioners assertion that the dismissal is justified on the basis of loss of confidence. While loss of
confidence, as correctly argued by petitioners, is one of the valid grounds for termination of employment,
the same, however, cannot be used as a pretext to vindicate each and every instance of unwarranted
dismissal. To be a valid ground, it must be shown that the employee concerned is responsible for the
misconduct or infraction and that the nature of his participation therein rendered him absolutely unworthy
of the trust and confidence demanded by his position. In this case, petitioners were unsuccessful in
establishing their accusations of dishonesty and tampering of records with intention of cheating. Indeed,
even if petitioners allegations against de Jesus were true, they just the same failed to prove that her
position needs the continued and unceasing trust of her employers. The breach of trust must be related to
the performance of the employees functions. Surely, de Jesus who occupies the position of a
reviser/trimmer does not require the petitioners perpetual and full confidence.
Same; Same; Reinstatement; Statutory Construction; As a rule, shall in a statute commonly denotes an
imperative obligation and is inconsistent with the idea of discretionthe presumption is that the word
shall, when used in a statute, is mandatory.We note that prior to the enactment of R.A. No. 6715,
Article 223 of the Labor Code contains no provision dealing with the reinstatement of an illegally
dismissed employee. The amendment introduced by R.A. No. 6715 is an innovation and a far departure
from the old law indicating thereby the legislatures unequivocal intent to insert a new rule that will
govern the reinstatement aspect of a decision or resolution in any given labor dispute. In fact, the law as
now worded employs the phrase shall immediately be executory without qualification emphasizing the
need for prompt compliance. As a rule, shall in a statute commonly denotes an imperative obligation
and is inconsistent with the idea of discretion and that the presumption is that the word shall, when used
in a statute, is mandatory. An appeal or posting of bond, by plain mandate of the law, could not even
forestall nor stay the executory nature of an order of reinstatement. The law, moreover, is unambiguous
and clear. Thus, it must be applied according to its plain and obvious meaning, according to its express
terms.
Same; Same; Same; Same; To require the application for and issuance of a writ of execution as
prerequisites for the execution of a reinstatement award would certainly betray and run counter to the very
object and intent of Art. 223 of the Labor Code, i.e., the immediate execution of a reinstatement order.
Article 224 states that the need for a writ of execution applies only within five (5) years from the date a
decision, an order or award becomes final and executory. It can not relate to an award or order of
reinstatement still to be appealed or pending appeal which Article 223 contemplates. The provision of
Article 223 is clear that an award for reinstatement shall be immediately executory even pending appeal
and the posting of a bond by the employer shall not stay the execution for reinstatement. The legislative
intent is quite obvious, i.e., to make an award of reinstatement immediately enforceable, even pending
appeal. To require the application for and issuance of a writ of execution as prerequisites for the execution
of a reinstatement award would certainly betray and run counter to the very object and intent of Article
223, i.e., the immediate execution of a reinstatement order. The reason is simple. An application for a writ
of execution and its issuance could be delayed for numerous reasons. A mere continuance or
postponement of a scheduled hearing, for instance, or an inaction on the part of the Labor Arbiter or the
NLRC could easily delay the issuance of the writ thereby setting at naught the strict mandate and noble
purpose envisioned by Article 223. In other words, if the requirements of Article 224 were to govern, as
we so declared in Maranaw, then the executory nature of a reinstatement order or award contemplated by
Article 223 will be unduly circumscribed and rendered ineffectual.
Same; Same; Same; Same; In introducing a new rule on the reinstatement aspect of a labor decision under
R.A. No. 6715, Congress should not be considered to be indulging in mere semantic exercise; On appeal
the appellate tribunal concerned may enjoin or suspend the reinstatement order in the exercise of its sound
discretion.In enacting the law, the legislature is presumed to have ordained a valid and sensible law,
one which operates no further than may be necessary to achieve its specific purpose. Statutes, as a rule,
are to be construed in the light of the purpose to be achieved and the evil sought to be remedied. And
where the statute is fairly susceptible of two or more constructions, that construction should be adopted
which will most tend to give effect to the manifest intent of the lawmaker and promote the object for
which the statute was enacted, and a construction should be rejected which would tend to render abortive
other provisions of the statute and to defeat the object which the legislator sought to attain by its
enactment. In introducing a new rule on the reinstatement aspect of a labor decision under R.A. No. 6715,
Congress should not be considered to be indulging in mere semantic exercise. On appeal, however, the
appellate tribunal concerned may enjoin or suspend the reinstatement order in the exercise of its sound
discretion.
Same; Same; Same; Same; Henceforth, an award or order for reinstatement is self-executoryafter
receipt of the decision or resolution ordering the employees reinstatement, the employer has the right to
choose whether to re-admit the employee to work under the same terms and conditions prevailing prior to
his dismissal or to reinstate the employee in the payroll.Furthermore, the rule is that all doubts in the
interpretation and implementation of labor laws should be resolved in favor of labor. In ruling that an
order or award for rein-
17. ST. MARTIN FUNERAL HOME, petitioner, vs. NATIONAL LABOR RELATIONS
COMMISSION and BIENVENIDO ARICAYOS, respondents.
Labor Law; Judicial Review; Appeals; Pleadings and Practice; The Court feels that it is now exigent and
opportune to reexamine the functional validity and systemic practicability of the mode of judicial review
it has long adopted and still follows with respect to decisions of the NLRC.Before proceeding further
into the merits of the case at bar, the Court feels that it is now exigent and opportune to reexamine the
functional validity and systemic practicability of the mode of judicial review it has long adopted and still
follows with respect to decisions of the NLRC. The increasing number of labor disputes that find their
way to this Court and the legislative changes introduced over the years into the provisions of Presidential
Decree (P.D.) No. 442 (The Labor Code of the Philippines and Batas Pambansa Blg. (B.P. No.) 129 (The
Judiciary Reorganization Act of 1980) now stridently call for and warrant a reassessment of that
procedural aspect.
Same; Same; Same; Jurisdiction; Statutes; The excepting clause provided for in paragraph (3), Section 9
of B.P. No. 129, as amended by R.A. No. 7902, contradicts what has been ruled and said all along that
appeal does not lie from decisions of the NLRC.It will, however, be noted that paragraph (3), Section 9
of B.P. No. 129 now grants exclusive appellate jurisdiction to the Court of Appeals over all final
adjudications of the Regional Trial Courts and the quasi-judicial agencies generally or specifically
referred to therein except, among others, those falling within the appellate jurisdiction of the Supreme
Court in accordance with x x x the Labor Code of the Philippines under Presidential Decree No. 442, as
amended, x x x. This would necessarily contradict what has been ruled and said all along that appeal
does not lie from decisions of the NLRC. Yet, under such excepting clause literally construed, the appeal
from the NLRC cannot be brought to the Court of Appeals, but to this Court by necessary implication.
Same; Same; Same; Same; There are no cases in the Labor Code the decisions, resolutions, orders or
awards wherein are within the appellate jurisdiction of the Supreme Court or of any other court for that
matter.The same exceptive clause further confuses the situation by declaring that the Court of Appeals
has no appellate jurisdiction over decisions falling within the appellate jurisdiction of the Supreme Court
in accordance with the Constitution, the provisions of B.P. No. 129, and those specified cases in Section
17 of the Judiciary Act of 1948. These cases can, of course, be properly excluded from the exclusive
appellate jurisdiction of the Court of Appeals. However, because of the aforementioned amendment by
transposition, also supposedly excluded are cases falling within the appellate jurisdiction of the Supreme
Court in accordance with the Labor Code. This is illogical and impracticable, and Congress could not
have intended that procedural gaffe, since there are no cases in the Labor Code the decisions, resolutions,
orders or awards wherein are within the appellate jurisdiction of the Supreme Court or of any other court
for that matter. [St. Martin Funeral Home vs. NLRC, 295 SCRA 494(1998)]
18. JUANITO A. GARCIA and ALBERTO J. DUMAGO, petitioners, vs. PHILIPPINE
AIRLINES, INC., respondent.
Labor Law; Wages; A dismissed employee whose case was favorably decided by the Labor Arbiter is
entitled to receive wages pending appeal upon reinstatement, which is immediately executoryunless
there is a restraining order, it is ministerial upon the Labor Arbiter to implement the order of
reinstatement and it is mandatory on the employer to comply therewith.A dismissed employee whose
case was favorably decided by the Labor Arbiter is entitled to receive wages pending appeal upon
reinstatement, which is immediately executory. Unless there is a restraining order, it is ministerial upon
the Labor Arbiter to implement the order of reinstatement and it is mandatory on the employer to comply
therewith.
Same; Reinstatement; It settles the view that the Labor Arbiters order of reinstatement is immediately
executory and the employer has to either re-admit them to work under the same terms and conditions
prevailing prior to their dismissal, or to reinstate them in the payroll, and that failing to exercise the
options in the alternative, employer must pay the employees salaries.The Court reaffirms the
prevailing principle that even if the order of reinstatement of the Labor Arbiter is reversed on appeal, 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. It settles the view that the Labor Arbiters order of
reinstatement is immediately executory and the employer has to either re-admit them to work under the
same terms and conditions prevailing prior to their dismissal, or to reinstate them in the payroll, and that
failing to exercise the options in the alternative, employer must pay the employees salaries.
Same; Same; While reinstatement pending appeal aims to avert the continuing threat or danger to the
survival or even the life of the dismissed employee and his family, it does not contemplate the period
when the employer-corporation itself is similarly in a judicially monitored state of being resuscitated in
order to survive.While reinstatement pending appeal aims to avert the continuing threat or danger to the
survival or even the life of the dismissed employee and his family, it does not contemplate the period
when the employer-corporation itself is similarly in a judicially monitored state of being resuscitated in
order to survive.
Same; Writ of Execution; The new National Labor Relations Commission (NLRC) Rules of Procedure,
which took effect on January 7, 2006, now require the employer to submit a report of compliance within
ten (10) calendar days from receipt of the Labor Arbiters decision, disobedience to which clearly denotes
a refusal to reinstatethe employee need not file a motion for the issuance of the writ of execution since
the Labor Arbiter shall thereafter motu proprio issue the writ, and, with the new rules in place, there is
hardly any difficulty in determining the employers intransigence in immediately complying with the
order.The new NLRC Rules of Procedure, which took effect on January 7, 2006, now require the
employer to submit a report of compliance within 10 calendar days from receipt of the Labor Arbiters
decision, disobedience to which clearly denotes a refusal to reinstate. The employee need not file a
motion for the issuance of the writ of execution since the Labor Arbiter shall thereafter motu proprio issue
the writ. With the new rules in place, there is hardly any difficulty in determining the employers
intransigence in immediately complying with the order.
Same; Corporate Rehabilitation; Had there been no need to rehabilitate, respondent may have opted for
actual physical reinstatement pending appeal to optimize the utilization of resourcesthen again, though
the management may think this wise, the rehabilitation receiver may decide otherwise, not to mention the
subsistence of the injunction on claims.There are legal effects arising from a judicial order placing a
corporation under rehabilitation. Respondent was, during the period material to the case, effectively
deprived of the alternative choices under Article 223 of the Labor Code, not only by virtue of the
statutory injunction but also in view of the interim relinquishment of management control to give way to
the full exercise of the powers of the rehabilitation receiver. Had there been no need to rehabilitate,
respondent may have opted for actual physical reinstatement pending appeal to optimize the utilization of
resources. Then again, though the management may think this wise, the rehabilitation receiver may decide
otherwise, not to mention the subsistence of the injunction on claims. [Garcia vs. Philippine Airlines, Inc.,
576 SCRA 479(2009)]

19. EMCO Plywood Corporation vs. Abelgas, 427 SCRA 496(2004)
Same; Same; Same; The losses must be substantial and the retrenchment must be reasonably necessary to
avert such losses, and the employer bears the burden of proving the existence or the imminence of
substantial losses with clear and satisfactory evidence that there are legitimate business reasons justifying
a retrenchment.The Court is not persuaded. Not every loss incurred or expected to be incurred by a
company will justify retrenchment. The losses must be substantial and the retrenchment must be
reasonably necessary to avert such losses. The employer bears the burden of proving the existence or the
imminence of substantial losses with clear and satisfactory evidence that there are legitimate business
reasons justifying a retrenchment. Should the employer fail to do so, the dismissal shall be deemed
unjustified.
Same; Same; Same; Retrenchment must be exercised essentially as a measure of last resort, after less
drastic means have been tried and found wanting, and the fact that an employer did not resort to other
such measures seriously belies its claim that retrenchment was done in good faith to avoid losses.
Retrenchment is a management prerogative consistently recognized and affirmed by this Court. It is,
however, subject to faithful compliance with the substantive and the procedural requirements laid down
by law and jurisprudence. It must be exercised essentially as a measure of last resort, after less drastic
means have been tried and found wanting. The only less drastic measure that EMCO undertook was the
rotation work scheme: the three-day-work per employee per week schedule. It did not try other measures,
such as cost reduction, lesser investment on raw materials, adjustment of the work routine to avoid the
scheduled power failure, reduction of the bonuses and salaries of both management and rank-and-file,
improvement of manufacturing efficiency, trimming of marketing and advertising costs, and so on. The
fact that petitioners did not resort to other such measures seriously belies their claim that retrenchment
was done in good faith to avoid losses.
Same; Same; Notice Requirement; For a valid termination due to retrenchment, written notices of the
intended retrenchment must be served by the employer on the workers and on the Department of Labor
and Employment at least one (1) month before the actual date of the retrenchment, and the written notice
should be served on the employees themselves, not on their supervisors.For a valid termination due to
retrenchment, the law requires that written notices of the intended retrenchment be served by the
employer on the worker and on the Department of Labor and Employment at least one (1) month before
the actual date of the retrenchment. The purpose of this requirement is to give employees some time to
prepare for the eventual loss of their jobs, as well as to give DOLE the opportunity to ascertain the verity
of the alleged cause of termination. There is no showing that such notice was served on the employees in
the present case. Petitioners argue that on January 20, 1993, Petitioner [EMCO Plywood Corporation vs.
Abelgas, 427 SCRA 496(2004)]
20. WYETH-SUACO LABORATORIES, INC., AYERST LABORATORIES (PHILS.), INC.
and THOMAS LEBER, petitioners, vs. -NATIONAL LABOR RELATIONS
COMMISSION, LABOR ARBITER DAISY G. BARCELONA and ROLANDO SANTOS,
respondents.
Labor Law; Waiver of rights of employees and laborers; Quitclaims; A quitclaim executed in favor of a
company by an employee amounts to a valid and binding compromise agreement between them.A
quitclaim executed in favor of a company by an employee amounts to a valid and binding compromise
agreement between them (Samaniego v. NLRC, 198 SCRA 111 [1991]). Article 227 of the Labor Code
provides that any compromise settlement voluntarily agreed upon with the assistance of the Bureau of
Labor Relations or the regional office of the DOLE, shall be final and binding upon the parties and the
NLRC or any court "shall not assume jurisdiction over issues involved therein except in case of non-
compliance thereof or if there is prima facie evidence that the settlement was obtained through fraud,
misrepresentation, or coercion." [Wyeth-Suaco Laboratories, Inc. vs. National Labor Relations
Commission, 219 SCRA 356(1993)] Same; Same; Same; Reason why quitclaim are commonly frowned
upon as contrary to public policy and they are ineffective to bar claims for the full measure of the
workers' legal rights.Quit-claims are commonly frowned upon as contrary to public policy and they are
ineffective to bar claims for the full measure of the workers' legal rights (Lopez Sugar Corporation v.
FFW, 189 SCRA 179 [1990]). The reason for this is because the employer and the employee do not stand
on the same footing, such that quitclaims usually take the form of contracts of adherence, not of choice.
Same; Same; Same; While dire necessity as a reason for signing a quitclaim is not acceptable reason to set
aside the quitclaim in the absence of a showing that the employee had been forced to execute it, such
reason gains importance if the consideration for the quitclaim is unconscionably low and the employee
has been tricked into accepting it.In the case at bar, both the labor arbiter and the NLRC found for
private respondent primarily because of the fact that petitioners were guilty of misrepresentation by their
failure to disclose to the ALPI employees the real nature of the negotiations and transaction between
Wyeth and ALPI. The Court is bound by this finding of fact there being no showing that neither the
arbiter nor the NLRC gravely abused their discretion or otherwise acted without jurisdiction or in excess
of the same.
Same; Evidence; Appeal; Court is bound by the findings of fact there being no showing that neither the
arbiter nor the NLRC gravely abused their discretion or otherwise acted without jurisdiction or in excess
of the same.Indeed, Santos resigned because of the uncertainty as to the future of ALPI. Like the other
employees, he was made to believe that the deal between the two companies was merely a merger but it
really was a projected buy-out. While "dire necessity" as a reason for signing a quitclaim is not acceptable
reason to set aside the quitclaim in the absence of a showing that the employee had been forced to execute
it, such reason gains importance if the consideration for the quitclaim is unconscionably low and the
employee has been tricked into accepting it.
21. NATIONAL ASSOCIATION OF FREE TRADE UNIONS (NAFTU), petitioner, vs.
MAINIT LUMBER DEVELOPMENT COMPANY WORKERS UNION-UNITED
LUMBER AND GENERAL WORKERS OF THE PHILIPPINES. (MALDECOWU-
ULGWP), respondents.
Labor Relations; Unions; Certification Election; The basic test of an asserted bargaining unit's
acceptability is whether or not it is fundamentally the combination which will best assure to all employees
the exercise of their collective bargaining rights.Moreover, while the existence of a bargaining history
is a factor that may be reckoned with in determining the appropriate bargaining unit, the same is not
decisive or conclusive. Other factors must be considered. The test of grouping is community or mutuality
of interests. This is so because "the basic test of an asserted bargaining unit's acceptability is whether or
not it is fundamentally the combination which will best assure to all employees the exercise of their
collective bargaining rights." (Democratic Labor Association v. Cebu Stevedoring Company, Inc., et al.,
103 Phil. 1103 [1958]).
Judgments; Res Judicata; The principle of res judicata applies as well to the judicial and quasi-judicial
acts of public, executive, or administrative officers and boards acting within their jurisdiction as to the
judgments of courts having general judicial powers.Secondly, the issue had been raised earlier by
petitioner. The respondent Bureau of Labor Relations had already ruled on the same in its decision dated
April 28,1986 affirming the Med-Arbiter's Order dated April 11, 1985 which granted the petition for
Certification Election. NAFTU did not elevate the April 28,1986 decision to this Court. On the contrary,
it participated in the questioned election and later it did not raise the issue in its election protest (Rollo, p.
210). Hence, the principle of res judicata applies. It was settled as early as 1956 that "the rule which
forbids the reopening of a matter once judicially determined by competent authority applies as well to the
judicial and quasi-judicial acts of public, executive or administrative officers and boards acting within
their jurisdiction as to the judgments of courts having general judicial powers x x x" (B.F. Goodrich
Philippines, Inc. v. Workmen's Compen- [National Association of Free Trade Unions vs. Mainit Lumber
Development Company Workers Union-United Lumber and General Workers of the Phils., 192 SCRA
598(1990)]
22. MERALCO vs Secretary of Labor
GR 91902
Facts:
On November 22, 1988, the Staff and Technical Employees Association of MERALCO, a labor
organization of staff and technical employees of MERALCO, filed a petition for certification election,
seeking to represent regular employees of MERALCO. MERALCO moved for the dismissal of the
petition on the grounds that the employees sought to be represented by petitioner are security services
personnel who are prohibited from joining or assisting the rank-and-file union, among others.
Issue: WON security guards may join rank-and-file or supervisors union.
Held:
While therefore under the old rules, security guards were barred from joining a labor organization of the
rank and file, under RA 6715, they may now freely join a labor organization of the rank and file or that of
the supervisory union, depending on their rank.
We are aware however of possible consequences in the implementation of the law in allowing security
personnel to join labor unions within the company they serve. The law is apt to produce divided loyalties
in the faithful performance of their duties. Economic reasons would present the employees concerned
with the temptation to subordinate their duties to the allegiance they owe the union of which they are
members, aware as they are that it is usually union action that obtains for them increased pecuniary
benefits.
Thus, in the event of a strike declared by their union, security personnel may neglect or outrightly
abandon their duties, such as protection of property of their employer and the persons of its officials and
employees, the control of access to the employers premises, and the maintenance of order in the event of
emergencies and untoward incidents.

It is hoped that the corresponding amendatory and/or suppletory laws be passed by Congress to avoid
possible conflict of interest in security personnel.
Petition dismissed.
from Atty. Alba^^

23. Philips Industrial Development, Inc. vs NLRC
Facts:- PIDI is a domestic corporation engaged in the manufacturing and marketing of electronic
products.Since 1971, it had a total of 6 collective bargaining agreements with private respondent
PhilipsEmployees Organization-FFW (PEO-FFW), a registered labor union and the certified bargaining
agent of all rank and file employees of PIDI.- In the first CBA, the supervisors (referred to in RA 875),
confidential employees, security guards,temporary employees and sales representatives were excluded in
the bargaining unit. In the second to thefifth, the sales force, confidential employees and heads of small
units, together with the managerialemployees, temporary employees and security personnel were
excluded from the bargaining unit. Theconfidential employees are the division secretaries of
light/telecom/data and consumer electronics,marketing managers, secretaries of the corporate planning
and business manager, fiscal and financialsystem manager and audit and EDP manager, and the staff of
both the General Management and thePersonnel Department.- In the sixth CBA, it was agreed that the
subject of inclusion or exclusion of service engineers, sales personnel and confidential employees in the
coverage of the bargaining unit would be submitted for arbitration. The parties failed to agree on a
voluntary arbitrator and the Bureau of Labor Relationsendorsed the petition to the Executive Labor
Arbiter of the NCR for compulsory arbitration.- March 1998, Labor Arbiter: A referendum will be
conducted to determine the will of the serviceengineers and sales representatives as to their inclusion or
exclusion in the bargaining unit. It was alsodeclared that the Division Secretaries and all staff of general
management, personnel and industrialrelations department, secretaries of audit, EDP, financial system are
confidential employees are deemedexcluded in the bargaining unit.- PEO-FFW appealed to the NLRC;
NLRC declared PIDI's Service Engineers, Sales Force, divisionsecretaries, all Staff of General
Management, Personnel and Industrial Relations Department, Secretariesof Audit, EDP and Financial
Systems are included within the rank and file bargaining unit, citing theImplementing Rules of E.O 111
and Article 245 of the Labor Code (all workers, except managerialemployees and security personnel, are
qualified to join or be a part of the bargaining unit)
Issue:-Whether service engineers, sales representatives and confidential employees of petitioner are
qualified to be part of the existing bargaining unit- Whether the "Globe Doctrine" should be applied
Held: NLRC decision is set aside while the decision of the Executive Labor Arbiter is reinstated.
Confidentialemployees are excluded from the bargaining unit while a referendum will be conducted to
determine thewill of the service engineers and sales representatives as to their inclusion or exclusion from
the bargaining unit, but those who are holding supervisory positions or functions are ineligible to join a
labor organization of the rank and file employees but may join, assist or form a separate labor
organization of their own.Ratio:The exclusion of confidential employees:The rationale behind the
ineligibility of managerial employees to form, assist or join a labor union equally applies to confidential
employees. With the presence of managerial employees in a union,the union can become company-
dominated as their loyalty cannot be assured. In Golden Farms vs Calleja,the Court states that confidential
employees, who have access to confidential information, may becomethe source of undue advantage.
Colgate v Ople
Facts: Before us is a Petition for Certiorari seeking to set aside and annul the Order of respondent
Minister of Labor and Employment (MOLE) directly certifying private respondent as the recognized and
duly-authorized collective bargaining agent for petitioner's sales force and ordering the reinstatement of
three employees of petitioner.
The respondent Union, on the other hand, reiterated the issue in its Notice to Strike, alleging that it was
duly registered with the Bureau of Labor Relations with a total membership of 87 regular salesmen
(nationwide) out of 117 regular salesmen presently employed by the company as of November 30, 1985.
In addition, it stated that since the registration of the Union up to the present, more than 213 of the total
salesmen employed are already members of the Union, leaving no doubt that the true sentiment of the
salesmen was to form and organize the Colgate Palmolive Salesmen Union. The Union further alleged
that the company is unreasonably delaying the recognition of the union because when it was informed of
the organization of the union, and when it was presented with a set of proposals for a collective
bargaining agreement, the company took an adversarial stance by secretly distributing a "survey sheet on
union membership" to newly hired salesmen from the Visayas, Mindanao and Metro Manila areas.
Moreover, District Sales Managers and Sales Supervisors coerced salesmen from the Visayas and
Mindanao by requiring them to fill up and/or accomplish said form by checking answers which were
adverse to the union; that with a handful of the survey sheets secured by management through coercion, it
now would like to claim that all salesmen are not in favor of the organization of the union, which acts are
clear manifestations of unfair labor practices.
Issue: Whether or not the employer can be compelled to continue with the employment of a person who is
guilty of misfeasance towards his employer.
Held: No. The order of the respondent Minister to reinstate the employees despite a clear finding of guilt
on their part is not in conformity with law. Reinstatement is simply incompatible with a finding of guilt.
Where the totality of the evidence was sufficient to warrant the dismissal of the employees the law
warrants their dismissal without making any distinction between a first offender and a habitual
delinquent. Under the law, the respondent Minister is duly mandated to equally protect and respect not
only the labor or workers' side but also the management and/or employers' side. The law, in protecting the
rights of the laborer, authorizes neither oppression nor self-destruction of the employer. To order the
reinstatement of the erring employees namely, Mejia, Sayson and Reynante would in effect encourage
unequal protection of the laws as a managerial employee of the petitioner company involved in the same
incident which was already dismissed and was not ordered to be reinstated. As stated in the case of San
Miguel Brewery vs. National Labor Union, "an employer cannot legally be compelled to continue with
the employment of a person who admittedly was guilty of misfeasance or malfeasance towards his
employer, and whose continuance in the service of the latter is patently inimical to his interest.
24. Union of Nestl Workers Cagayan de Oro Factory vs.
Nestl Philippines, Inc.
G.R. No. 148303. October 17, 2002.*
UNION OF NESTL WORKERS CAGAYAN DE ORO FACTORY (UNWCF for brevity), represented
by its President YURI P. BERTULFO and officers, namely, DEXTER E. AGUSTIN, DANTE S.
SEAREZ, EDDIE P. OGNIR, JEFFREY C. RELLIQUETE, ENRIQUITO B. BUAGAS, EDWIN P.
SALVAA, RAMIL B. MONSANTO, JERRY A. TABILIRAN, ARNOLD A. TADLAS, REYQUE A.
FACTURA, NAPOLEON S. GALERINA, JR., TOLENTINO T. MICABALO and EDDIE O.
MACASOCOL, petitioners, vs. NESTL PHILIPPINES, INC., represented by its President JUAN B.
SANTOS, RUDY P. TRILLANES, Factory Manager, Cagayan de Oro City Branch and FRANCIS L.
LACSON, Cagayan de Oro City Human Resources Manager, respondents.
Actions; Pleadings and Practice; Jurisdiction; Well-settled is the rule that jurisdiction is determined by the
allegations in the complaint.On the first issue, we hold that petitioners insistence that the RTC has
jurisdiction over their complaint since it raises constitutional and legal issues is sorely misplaced. The fact
that the complaint was denominated as one for injunction does not necessarily mean that the RTC has
jurisdiction. Well-settled is the rule that jurisdiction is determined by the allegations in the complaint.
Labor Law; Management Prerogatives; Personnel Policies; Drug Testing; Company personnel policies are
guiding principles stated in broad, long-range terms that express the philosophy or beliefs of an
organizations top authority regarding personnel matters.Respondent Nestls Drug Abuse Policy states
that (i)llegal drugs and use of regulated drugs beyond the medically prescribed limits are prohibited in
the workplace. Illegal drug use puts at risk the integrity of Nestl operations and the safety of our
products. It is detrimental to the health, safety and work-performance of employees and is harmful to the
welfare of families and the surrounding community. This pronouncement is a guiding principle adopted
by Nestl to safeguard its employees welfare and ensure their efficiency and wellbeing. To our minds,
this is a company personnel policy. In San Miguel Corp. vs. NLRC, this Court held: Company personnel
policies are guiding principles stated in broad, long-range terms that express the philosophy or beliefs of
an organizations top authority regarding personnel matters. They deal with matter affecting efficiency
and well-being of employees and include, among others, the procedure in the administration of wages,
benefits, promotions, transfer and other personnel movements which are usually not spelled out in the
collective agreement.
Same; Same; Same; Same; Courts; Jurisdiction; It is the Voluntary Arbitrators or Panel of Voluntary
Arbitrators, not the Regional Trial Court, which exercises jurisdiction over a Drug Abuse Policy which is
part of a company personnel policy.Considering that the Drug Abuse Policy is a company personnel
policy, it is the Voluntary Arbitrators or Panel of Voluntary Arbitrators, not the RTC, which exercises
jurisdiction over this case. Article 261 of the Labor Code, as amended, pertinently provides: Art. 261.
Jurisdiction of Voluntary Arbitrators or Panel of Voluntary Arbitrators.The Voluntary Arbitrator or
panel of Voluntary Arbitrators shall have original and exclusive jurisdiction to hear and decide all
unresolved grievances arising from the interpretation or implementation of the Collective Bargaining
Agreement and those arising from the interpretation or enforcement of company personnel policies x x x.
(Emphasis supplied)
Actions; Certiorari; For certiorari to prosper, it is not enough that the trial court committed grave abuse of
discretion amounting to lack or excess of jurisdictionthe requirement that there is no appeal, nor any
plain, speedy and adequate remedy in the ordinary course of law must likewise be satisfied.With
respect to the second issue raised by petitioners, what they should have interposed is an appeal to the
Court of Appeals, not a petition for certiorari which they initially filed with this Court, since the assailed
RTC order is final. Certiorari is not a substitute for an appeal. For certiorari to prosper, it is not enough
that the trial court committed grave abuse of discretion amounting to lack or excess of jurisdiction, as
25. GENERAL MILLING CORPORATION vs HON. COURT OF APPEALS, GENERAL
MILLINGCORPORATION INDEPENDENT LABOR UNION (GMC-ILU), and RITO
MANGUBAT
FACTS: In its two plants located at Cebu City and Lapu-Lapu City, petitioner General
MillingCorporation (GMC) employed 190 workers. They were all members of private respondent
GeneralMilling Corporation Independent Labor Union. On April 28, 1989, GMC and the union concluded
acollective bargaining agreement (CBA) which included the issue of representation effective for a termof
three years. The day before the expiration of the CBA, the union sent GMC a proposed CBA, with
arequest that a counter-proposal be submitted within ten (10) days. However, GMC had
receivedcollective and individual letters from workers who stated that they had withdrawn from their
unionmembership, on grounds of religious affiliation and personal differences. Believing that the union
nolonger had standing to negotiate a CBA, GMC did not send any counter-proposal.
On December 16, 1991, GMC wrote a letter to the unions officers, Rito Mangubat and Victor
Lastimoso. The letter stated that it felt there was no basis to negotiate with a union which no
longerexisted, but that management was nonetheless always willing to dialogue with them on matters of
common concern and was open to suggestions on how the company may improve its operations.
Inanswer, the union officers wrote a letter dated December 19, 1991 disclaiming any massivedisaffiliation
or resignation from the union and submitted a manifesto, signed by its members, statingthat they had not
withdrawn from the union.NLRC held that the action of GMC in not negotiating was ULP.
ISSUE: WON the company (GMC) should have entered into collective bargaining with the union
HELD:
The law mandates that the representation provision of a CBA should last for fiveyears.
The relation between labor and managementshould be undisturbed until the last 60 daysof the fifth year.
Hence, it is indisputable that when the union requested for a renegotiation of the economic terms of the
CBA on November 29, 1991,it was still the certified collective bargaining agent of the workers, because it
was seeking said renegotiation within five (5) years from the date of effectivity of the CBA on December
1, 1988. The unions proposal was also
submitted within the prescribed 3-year period from the date of effectivity of the CBA, albeit just before
the last day of said period.
It was obvious that
GMC had no valid reason to refuseto negotiate in good faith with the union.
For refusing to send a counter-proposal to the union
and to bargain anew on the economic terms of the CBA, the company committed an unfair laborpractice
under Article 248 of the Labor Code.
ART. 253-A
Terms of a collective bargaining agreement.
Any Collective Bargaining Agreementthat the parties may enter into shall, insofar as the representation
aspect is concerned, be for a term of five (5) years. No petition questioning the majority status of the
incumbent bargaining
agent shall be entertained and no certification election shall be conducted by the Department of Laborand
Employment outside of the sixty-day period immediately before the date of expiry of such fiveyear term
of the Collective Bargaining Agreement. All other provisions of the Collective Bargaining
Agreement shall be renegotiated not later than three (3) years after its execution.
ART. 248
Unfair labor practices of employers.
It shall be unlawful for an employer to commitany of the following unfair labor practice:(g) To violate the
duty to bargain collectively as prescribed by this Code;Under Article 252 abovecited, both parties are
required to perform their mutual obligation to meet andconvene promptly and expeditiously in good faith
for the purpose of negotiating an agreement. Theunion lived up to this obligation when it presented
proposals for a new CBA to GMC within three (3)
26. G.R. No. 149434. June 3, 2004.*
PHILIPPINE APPLIANCE CORPORATION (PHILACOR), petitioner, vs. THE COURT OF
APPEALS, THE HONORABLE SECRETARY OF LABOR BIENVENIDO E. LAGUESMA and
UNITED PHILACOR WORKERS UNION-NAFLU, respondents.
Labor Law; Collective Bargaining Agreements; Signing Bonus; The signing bonus is a grant motivated
by the goodwill generated when a CBA is successfully negotiated and signed between the employer and
the union.In the case of MERALCO v. The Honorable Secretary of Labor, we stated that the signing
bonus is a grant motivated by the goodwill generated when a CBA is successfully negotiated and signed
between the employer and the union. In that case, we sustained the argument of the Solicitor General, viz:
When negotiations for the last two years of the 1992-1997 CBA broke down and the parties sought the
assistance of the NCMB, but which failed to reconcile their differences, and when petitioner MERALCO
bluntly invoked the jurisdiction of the Secretary of Labor in the resolution of the labor dispute, whatever
goodwill existed between petitioner MERALCO and respondent union disappeared. . . . Verily, a signing
bonus is justified by and is the consideration paid for the goodwill that existed in the negotiations that
culminated in the signing of a CBA.
Same; Same; Same; While the Court does not fault one party for failure of the negotiations, it is apparent
that there was no more goodwill between the parties where the CBA was clearly not signed through their
mutual efforts alone.In the case at bar, the CBA negotiation between petitioner and respondent union
failed notwithstanding the intervention of the NCMB. Respondent union went on strike for eleven days
and blocked the ingress to and egress from petitioners two work plants. The labor dispute had to be
referred to the Secretary of Labor and Employment because neither of the parties was willing to
compromise their respective positions regarding the four remaining items which stood unresolved. While
we do not fault any one party for the failure of the negotiations, it is apparent that there was no more
goodwill between the parties and that the CBA was clearly not signed through their mutual efforts alone.
Hence, the payment of the signing bonus is no longer justified and to order such payment would be unfair
and unreasonable for petitioner.
Same; Same; Same; A bonus is not a demandable and enforceable obligation unless the giving of such
bonus has been the companys long and regular practicei.e., the giving of the bonus should have been
done over a long period of time, and must be shown to have been consistent and deliberate.
Furthermore, we have consistently ruled that a bonus is not a demandable and enforceable obligation.
True, it may nevertheless be granted on equitable considerations as when the giving of such bonus has
been the companys long and regular practice. To be considered a regular practice, however, the giving
of the bonus should have been done over a long period of time, and must be shown to have been
consistent and deliberate. The test or rationale of this rule on long practice requires an indubitable
showing that the employer agreed to continue giving the benefits knowing fully well that said employees
are not covered by the law requiring payment thereof. Respondent does not contest the fact that petitioner
initially offered a signing bonus only during the previous CBA negotiation. Previous to that, there is no
evidence on record that petitioner ever offered the same or that the parties included a signing bonus
among the items to be resolved in the CBA negotiation. Hence, the giving of such bonus cannot be
deemed as an established practice considering that the same was given only once, that is, during the 1997
CBA negotiation.
27. NEW PACIFIC TIMBER & SUPPLY COMPANY, INC., petitioner, vs. NATIONAL
LABOR RELATIONS COMMISSION, MUSIB M. BUAT, LEON G. GONZAGA, JR., ET
AL., NATIONAL FEDERATION OF LABOR, MARIANO AKILIT and 350 OTHERS,
respondents.
Labor Law; National Labor Relations Commission; Appeals; No grave abuse of discretion on the part of
the NLRC, when it entertained the petition for relief filed by the private respondents and treated it as an
appeal, even if it was filed beyond the reglementary period for filing an appeal.We find no grave abuse
of discretion on the part of the NLRC, when it entertained the petition for relief filed by the private
respondents and treated it as an appeal, even if it was filed beyond the reglementary period for filing an
appeal. Ordinarily, once a judgment has become final and executory, it can no longer be disturbed, altered
or modified. However, a careful scrutiny of the facts and circumstances of the instant case warrants
liberality in the application of technical rules and procedure. It would be a greater injustice to deprive the
concerned employees of the monetary benefits rightly due them because of a circumstance over which
they had no control.
Same; Same; Same; Supreme Court has allowed appeals from decisions of the Labor Arbiter to the
NLRC, even if filed beyond the reglementary period in the interest of justice.The Supreme Court-has
allowed appeals from decisions of the labor arbiter to the NLRC, even if filed beyond the reglementary
period, in the interest of justice. Moreover, under Article 218 (c) of the Labor Code, the NLRC may, in
the exercise of its appellate powers, correct, amend or waive any error, defect or irregularity whether in
substance or in form. Further, Article 221 of the same provides that: In any proceeding before the
Commission or any of the Labor Arbiters, the rules of evidence prevailing in courts of law or equity shall
not be controlling and it is the spirit and intention of this Code that the Commission and its members and
the Labor Arbiters shall use every and all reasonable means to ascertain the facts in each case speedily
and objectively and without regard to technicalities of law or procedure, all in the interest of due process.
x x x
Same; Labor Code; Labor Unions; Until a new Collective Bargaining Agreement has been executed by
and between the parties, they are duty bound to keep the status quo and to continue in full force and effect
the terms and conditions of the existing agreement.It is clear from the above provision of law that until
a new Collective Bargaining Agreement has been executed by and between the parties, they are duty-
bound to keep the status quo and to continue in full force and effect the terms and conditions of the
existing agreement. The law does not provide for any exception nor qualification as to which of the
economic provisions of the existing agreement are to retain force and effect; therefore, it must be
understood as encompassing all the terms and conditions in the said agreement.
Same; Same; Same; When a collective bargaining contract is entered into by the union representing the
employees and the employer, even the non-member employees are entitled to the benefits of the
contract.In a long line of cases, this Court has held that when a collective bargaining contract is entered
into by the union representing the employees and the employer, even the non-member employees are
entitled to the benefits of the contract. To accord its benefits only to members of the union without any
valid reason would constitute undue discrimination against nonmembers. It is even conceded, that a
laborer can claim benefits from a CBA entered into between the company and the union of which he is a
member at the time of the conclusion of the agreement, after he has resigned from said union.
SPECIAL CIVIL ACTION in the Supreme Court. Certiorari.

The facts are stated in the opinion of the Court.
Siguion-Reyna, Montecillo & Ongsiako for petitioner.
Rene J. Santos and Romulo D. Plagata for private respondents.
Dioscoro Albarico, Sr. authorized representative of private respondents.
KAPUNAN, J.:
May the term of a Collective Bargaining Agreement (CBA) as to its economic provisions be extended
beyond the term expressly stipulated therein, and, in the absence of a new CBA, even beyond the three-
year period provided by law? Are employees hired after the stipulated term of a CBA entitled to the
benefits provided thereunder?
These are the issues at the heart of the instant petition for certiorari with prayer for the issuance of
preliminary injunction and/or temporary restraining order filed by petitioner New Pacific Timber &
Supply Company, Incorporated against the National Labor Relations Commission (NLRC), et al. and the
National Federation of Labor, et al.
The antecedent facts, as found by the NLRC, are as follows:
The National Federation of Labor (NFL, for brevity) was certified as the sole and exclusive bargaining
representative of all the regular rank-and-file employees of New Pacific Timber & Supply Co., Inc.
(hereinafter referred to as petitioner Company).1 As such, NFL started to negotiate for better terms and
conditions of employment for the employees in the bargaining unit which it represented. However, the
same was allegedly met with stiff resistance by petitioner Company, so that the former was prompted to
file a complaint for unfair labor practice (ULP) against the latter on the ground of refusal to bargain
collectively.2
On March 31, 1987, then Executive Labor Arbiter Hakim S. Abdulwahid issued an order declaring (a)
herein petitioner Company guilty of ULP; and (b) the CBA proposals submitted by the NFL as the CBA
between the regular rank-and-file employees in the bargaining unit and petitioner Company.3
Petitioner Company appealed the above order to the NLRC. On November 15, 1989, the NLRC rendered
a decision dismissing the appeal for lack of merit. A motion for reconsideration thereof was, likewise,
denied in a Resolution, dated November 12, 1990.4 Unsatisfied, petitioner Company filed a petition for
certiorari with this Court. But the Court dismissed said petition in a Resolution, dated January 21, 1991.5
Thereafter, the records of the case were remanded to the arbitration branch of origin for the execution of
Labor Arbiter Abdulwahids Order, dated March 31, 1987, granting monetary benefits consisting of wage
increases, housing allowances, bonuses, etc. to the regular rank-and-file employees. Following a series of
conferences to thresh out the details of computation, Labor Arbiter Reynaldo S. Villena issued an Order,
dated October 18, 1993, directing petitioner Company to pay the 142 employees entitled to the aforesaid
benefits the respective amounts due them under the CBA. Petitioner Company complied; and, the
corresponding quitclaims were executed. The case was considered closed following NFLs manifestation
that it will no longer appeal the October 18, 1993 Order of Labor Arbiter Villena.6
However, notwithstanding such manifestation, a Petition for Relief was filed in behalf of 186 of the
private respondents Mariano J. Akilit and 350 others on May 12, 1994. In their petition, they claimed
that they were wrongfully excluded from enjoying the benefits under the CBA since the agreement with
NFL and petitioner Company limited the CBAs implementation to only the 142 rank-and-file employees
enumerated. They claimed that NFLs misrepresentations had precluded them from appealing their
exclusion.7
Treating the petition for relief as an appeal, the NLRC entertained the same. On August 4, 1994, said
commission issued a resolution8 declaring that the 186 excluded employees form part and parcel of the
then existing rank-and-file bargaining unit and were, therefore, entitled to the benefits under the CBA.
The NLRC held, thus: [New Pacific Timber & Supply Company, Inc. vs. NLRC, 328 SCRA 404(2000)]

FACTS: The NFL was the sole and exclusive bargaining representative for the rank and file employees of
petitioner. NFL started to negotiate for better terms and conditions of employment; which were met with
resistance by Petitioner Company. The NFL filed a complaint for ULP on the ground of refusal to bargain
collectively. LA issued an order declaring the company guilty of ULP and ordering the CBA proposals
submitted by the NFL as the CBA between parties. Later, 186 of private respondents claiming they were
wrongfully excluded from the benefits under the CBA filed a petition for relief. Petitioner asserts that
private respondents are not parties to the agreement and may not claim benefits thereunder. As for the
CBA, petitioner maintains that the force and effect of the CBAs terms are limited to only three years and
cannot extend to terms and conditions which ceased to have force and effect.
ISSUES:
1. W/N the terms of an existing CBA as to its economic provisions can be extended beyond the period
stipulated therein, even beyond the three year period prescribed by law, in the absence of a new
agreement.
2. W/N the rank and file employees hired after the term of the CBA, considering their subsequent
membership in the bargaining unit, are parties to the agreement and may claim benefits thereunder.
HELD:
1. Yes. It is clear from Art. 253 that until a new CBA has been executed by and between the parties; they
are duly bound to keep the status quo and to continue in full force and effect the terms and conditions of
the existing agreement. In the case at bar, no new agreement was entered between the parties pending
appeal of the decision in the NLRC. Consequently, the employees from to the year 1985 (after expiration
of the CBA) onwards would be deprived of a substantial amount of monetary benefits if the terms and
conditions of the CBA were not to remain in force and effect which runs counter to the intent of the Labor
Cod to curb labor unrest and promote industrial peace.

2. Yes. When a CBA is entered into by the union representing the employees and the employer, even the
non-union members are entitled to the benefits of the contract. A laborer can claim benefits from a CBA
entered into the company and the union of which he is a member at the time of the conclusion of the
agreement even after he has resigned from said union. Therefore, the benefits under the CBA should be
extended to those who only became such after it expired; to exclude them would constitute undue
discrimination.