PASEI v.

Drilon
G.R. No. 81958 June 30, 1988,
Sarmiento, J.
(Labor Standards, Police Power
defined)

FACTS:
Phil association of Service Exporters, Inc.,
is engaged principally in the recruitment
of Filipino workers, male and female of
overseas employment. It challenges the
constitutional validity of Dept. Order No. 1
(1998) of DOLE entitled Guidelines
Governing the Temporary Suspension of
Deployment of Filipino Domestic and
Household Workers. It claims that such
order is a discrimination against males
and females. The Order does not apply to
all Filipino workers but only to domestic
helpers and females with similar skills, and
that it is in violation of the right to travel,
it also being an invalid exercise of the
lawmaking power. Further, PASEI invokes
Sec 3 of Art 13 of the Constitution,
providing for worker participation in policy
and decision-making processes affecting
their rights and benefits as may be
provided by law. Thereafter the Solicitor
General on behalf of DOLE submitting to
the validity of the challenged guidelines
involving the police power of the State and
informed the court that the respondent
have lifted the deployment ban in some
states where there exists bilateral
agreement with the Philippines and
existing mechanism providing for
sufficient safeguards to ensure the welfare
and protection of the Filipino workers.

ISSUE:

Whether or not D.O. No. 1 of DOLE is

constitutional as it is an exercise of police
power.

RULING:

[Police power] has been defined as the

"state authority to enact legislation that
may interfere with personal liberty or
property in order to promote the general
welfare." As defined, it consists of (1) an
imposition of restraint upon liberty or
property, (2) in order to foster the
common good. It is not capable of an
exact definition but has been, purposely,
veiled in general terms to underscore its
all-comprehensive embrace.

The petitioner has shown no satisfactory

reason why the contested measure should
be nullified. There is no question that
Department Order No. 1 applies only to
"female contract workers," but it does not
thereby make an undue discrimination
between the sexes. It is well-settled that
"equality before the law" under the
Constitution does not import a perfect
Identity of rights among all men and
women. It admits of classifications,
provided that (1) such classifications rest
on substantial distinctions; (2) they are
germane to the purposes of the law; (3)
they are not confined to existing
conditions; and (4) they apply equally to
all members of the same class.
The Court is satisfied that the
classification made-the preference for
female workers rests on substantial
distinctions.

Philippine Association of Service

Expporters, Inc. vs. Drilon
G.R. No. 81958 June 30, 1988
EN BANC, SARMIENTO, J:
Facts:
The petitioner, Philippine
Association of Service Exporters, Inc.
(PASEI), a firm "engaged principally in
the recruitment of Filipino workers for
overseas placement," challenges the
Constitutional validity of Department
Order No. 1, Series of 1988, of the
Department of Labor and
Employment, in the character of
"GUIDELINES GOVERNING THE
TEMPORARY SUSPENSION OF
DEPLOYMENT OF FILIPINO DOMESTIC
AND HOUSEHOLD WORKERS," and
specifically assailed for "discrimination
against males or females;" 2 that it
"does not apply to all Filipino workers
but only to domestic helpers and
females with similar skills;" 3 and that
it is violative of the right to travel. It is
held likewise to be an invalid exercise
of the lawmaking power, police power
being legislative, and not executive, in
character.
On May 25, 1988, the Solicitor
General, on behalf of the respondents
Secretary of Labor and Administrator
of the Philippine Overseas
Employment Administration, filed a
Comment informing the Court that on
March 8, 1988, the respondent Labor
Secretary lifted the deployment ban in
the states of Iraq, Jordan, Qatar,
Canada, Hongkong, United States,

Italy, Norway, Austria, and

Switzerland. In submitting the validity
of the challenged "guidelines," the
Solicitor General invokes the police
power of the Philippine State.
Issue:
Whether the challenged Department
Order is a valid regulation in the
nature of a police power measure
under the Constitution.
Held:
The concept of police power is wellestablished in this jurisdiction. It has
been defined as the "state authority to
enact legislation that may interfere
with personal liberty or property in
order to promote the general welfare."
5
As defined, it consists of (1) an
imposition of restraint upon liberty or
property, (2) in order to foster the
common good. It is not capable of an
exact definition but has been,
purposely, veiled in general terms to
underscore its all-comprehensive
embrace.
Its scope, ever-expanding to meet the
exigencies of the times, even to
anticipate the future where it could be
done, provides enough room for an
efficient and flexible response to
conditions and circumstances thus
assuring the greatest benefits.
It finds no specific Constitutional grant
for the plain reason that it does not
owe its origin to the Charter. Along
with the taxing power and eminent
domain, it is inborn in the very fact of
statehood and sovereignty. It is a

fundamental attribute of government

that has enabled it to perform the
most vital functions of governance.
The police power of the State ... is a
power coextensive with selfprotection. It may be said to be that
inherent and plenary power in the
State which enables it to prohibit all
things hurtful to the comfort, safety,
and welfare of society.
As a general rule, official acts enjoy a
presumed validity. 13 In the absence of
clear and convincing evidence to the
contrary, the presumption logically
stands.
The petitioner has shown no
satisfactory reason why the contested
measure should be nullified. There is
no question that Department Order
No. 1 applies only to "female contract
workers," 14 but it does not thereby
make an undue discrimination
between the sexes. It is well-settled
that "equality before the law" under
the Constitution 15 does not import a
perfect Identity of rights among all
men and women.
"Protection to labor" does not signify
the promotion of employment alone.
What concerns the Constitution more
paramountly is that such an
employment be above all, decent, just,
and humane. Under these
circumstances, the Government is
duty-bound to insure that our toiling
expatriates have adequate protection,
personally and economically, while
away from home. In this case, the
Government has evidence, an
evidence the petitioner cannot
seriously dispute, of the lack or

inadequacy of such protection, and as

part of its duty, it has precisely
ordered an indefinite ban on
deployment.
This Court understands the grave
implications the questioned Order has
on the business of recruitment. The
concern of the Government, however,
is not necessarily to maintain profits of
business firms. In the ordinary
sequence of events, it is profits that
suffer as a result of Government
regulation. The interest of the State is
to provide a decent living to its
citizens.
Decision:
The Government has convinced the
Court in this case that this is its intent.
We do not find the impugned Order to
be tainted with a grave abuse of
discretion to warrant the extraordinary
relief prayed for.
WHEREFORE, the petition is
DISMISSED. No costs. SO ORDERED.
Yap, C.J., Fernan, Narvasa, MelencioHerrera, Cruz, Paras, Feliciano,
Gancayco, Padilla, Bidin, Cortes and
Grio-Aquino, JJ., concur.
Gutierrez, Jr. and Medialdea, JJ., are on
leave

Republic of the Philippines

SUPREME COURT
Manila

EN BANC
G.R. No. 81958 June 30, 1988
PHILIPPINE ASSOCIATION OF SERVICE
EXPORTERS, INC., petitioner,
vs.
HON. FRANKLIN M. DRILON as
Secretary of Labor and Employment,
and TOMAS D. ACHACOSO, as
Administrator of the Philippine
Overseas Employment
Administration, respondents.
Gutierrez & Alo Law Offices for petitioner.

SARMIENTO, J.:
The petitioner, Philippine Association of
Service Exporters, Inc. (PASEI, for short), a
firm "engaged principally in the
recruitment of Filipino workers, male and
female, for overseas
placement," 1 challenges the
Constitutional validity of Department
Order No. 1, Series of 1988, of the
Department of Labor and Employment, in
the character of "GUIDELINES GOVERNING
THE TEMPORARY SUSPENSION OF
DEPLOYMENT OF FILIPINO DOMESTIC AND
HOUSEHOLD WORKERS," in this petition
for certiorari and prohibition. Specifically,
the measure is assailed for "discrimination
against males or females;" 2 that it "does
not apply to all Filipino workers but only to
domestic helpers and females with similar
skills;" 3 and that it is violative of the right
to travel. It is held likewise to be an invalid
exercise of the lawmaking power, police
power being legislative, and not executive,
in character.
In its supplement to the petition, PASEI
invokes Section 3, of Article XIII, of the
Constitution, providing for worker
participation "in policy and decision-

making processes affecting their rights

and benefits as may be provided by
law." 4 Department Order No. 1, it is
contended, was passed in the absence of
prior consultations. It is claimed, finally, to
be in violation of the Charter's nonimpairment clause, in addition to the
"great and irreparable injury" that PASEI
members face should the Order be further
enforced.
On May 25, 1988, the Solicitor General, on
behalf of the respondents Secretary of
Labor and Administrator of the Philippine
Overseas Employment Administration,
filed a Comment informing the Court that
on March 8, 1988, the respondent Labor
Secretary lifted the deployment ban in the
states of Iraq, Jordan, Qatar, Canada,
Hongkong, United States, Italy, Norway,
Austria, and Switzerland. * In submitting
the validity of the challenged "guidelines,"
the Solicitor General invokes the police
power of the Philippine State.
It is admitted that Department Order No. 1
is in the nature of a police power measure.
The only question is whether or not it is
valid under the Constitution.
The concept of police power is wellestablished in this jurisdiction. It has been
defined as the "state authority to enact
legislation that may interfere with
personal liberty or property in order to
promote the general welfare." 5 As
defined, it consists of (1) an imposition of
restraint upon liberty or property, (2) in
order to foster the common good. It is not
capable of an exact definition but has
been, purposely, veiled in general terms to
underscore its all-comprehensive
embrace.
"Its scope, ever-expanding to meet the
exigencies of the times, even to anticipate
the future where it could be done,
provides enough room for an efficient and

flexible response to conditions and

circumstances thus assuring the greatest
benefits." 6
It finds no specific Constitutional grant for
the plain reason that it does not owe its
origin to the Charter. Along with the taxing
power and eminent domain, it is inborn in
the very fact of statehood and sovereignty.
It is a fundamental attribute of
government that has enabled it to perform
the most vital functions of governance.
Marshall, to whom the expression has
been credited, 7 refers to it succinctly as
the plenary power of the State "to govern
its citizens."8
"The police power of the State ... is a
power coextensive with self- protection,
and it is not inaptly termed the "law of
overwhelming necessity." It may be said to
be that inherent and plenary power in the
State which enables it to prohibit all things
hurtful to the comfort, safety, and welfare
of society." 9
It constitutes an implied limitation on the
Bill of Rights. According to Fernando, it is
"rooted in the conception that men in
organizing the state and imposing upon its
government limitations to safeguard
constitutional rights did not intend thereby
to enable an individual citizen or a group
of citizens to obstruct unreasonably the
enactment of such salutary measures
calculated to ensure communal peace,
safety, good order, and
welfare." 10 Significantly, the Bill of Rights
itself does not purport to be an absolute
guaranty of individual rights and liberties
"Even liberty itself, the greatest of all
rights, is not unrestricted license to act
according to one's will." 11 It is subject to
the far more overriding demands and
requirements of the greater number.
Notwithstanding its extensive sweep,
police power is not without its own

limitations. For all its awesome

consequences, it may not be exercised
arbitrarily or unreasonably. Otherwise, and
in that event, it defeats the purpose for
which it is exercised, that is, to advance
the public good. Thus, when the power is
used to further private interests at the
expense of the citizenry, there is a clear
misuse of the power. 12
In the light of the foregoing, the petition
must be dismissed.
As a general rule, official acts enjoy a
presumed vahdity. 13 In the absence of
clear and convincing evidence to the
contrary, the presumption logically stands.
The petitioner has shown no satisfactory
reason why the contested measure should
be nullified. There is no question that
Department Order No. 1 applies only to
"female contract workers," 14 but it does
not thereby make an undue discrimination
between the sexes. It is well-settled that
"equality before the law" under the
Constitution 15does not import a perfect
Identity of rights among all men and
women. It admits of classifications,
provided that (1) such classifications rest
on substantial distinctions; (2) they are
germane to the purposes of the law; (3)
they are not confined to existing
conditions; and (4) they apply equally to
all members of the same class. 16
The Court is satisfied that the
classification made-the preference for
female workers rests on substantial
distinctions.
As a matter of judicial notice, the Court is
well aware of the unhappy plight that has
befallen our female labor force abroad,
especially domestic servants, amid
exploitative working conditions marked by,
in not a few cases, physical and personal
abuse. The sordid tales of maltreatment

suffered by migrant Filipina workers, even

rape and various forms of torture,
confirmed by testimonies of returning
workers, are compelling motives for urgent
Government action. As precisely the
caretaker of Constitutional rights, the
Court is called upon to protect victims of
exploitation. In fulfilling that duty, the
Court sustains the Government's efforts.
The same, however, cannot be said of our
male workers. In the first place, there is no
evidence that, except perhaps for isolated
instances, our men abroad have been
afflicted with an Identical predicament.
The petitioner has proffered no argument
that the Government should act similarly
with respect to male workers. The Court,
of course, is not impressing some male
chauvinistic notion that men are superior
to women. What the Court is saying is that
it was largely a matter of evidence (that
women domestic workers are being illtreated abroad in massive instances) and
not upon some fanciful or arbitrary
yardstick that the Government acted in
this case. It is evidence capable indeed of
unquestionable demonstration and
evidence this Court accepts. The Court
cannot, however, say the same thing as
far as men are concerned. There is simply
no evidence to justify such an inference.
Suffice it to state, then, that insofar as
classifications are concerned, this Court is
content that distinctions are borne by the
evidence. Discrimination in this case is
justified.
As we have furthermore indicated,
executive determinations are generally
final on the Court. Under a republican
regime, it is the executive branch that
enforces policy. For their part, the courts
decide, in the proper cases, whether that
policy, or the manner by which it is
implemented, agrees with the Constitution
or the laws, but it is not for them to
question its wisdom. As a co-equal body,

the judiciary has great respect for

determinations of the Chief Executive or
his subalterns, especially when the
legislature itself has specifically given
them enough room on how the law should
be effectively enforced. In the case at bar,
there is no gainsaying the fact, and the
Court will deal with this at greater length
shortly, that Department Order No. 1
implements the rule-making powers
granted by the Labor Code. But what
should be noted is the fact that in spite of
such a fiction of finality, the Court is on its
own persuaded that prevailing conditions
indeed call for a deployment ban.
There is likewise no doubt that such a
classification is germane to the purpose
behind the measure. Unquestionably, it is
the avowed objective of Department Order
No. 1 to "enhance the protection for
Filipino female overseas workers" 17 this
Court has no quarrel that in the midst of
the terrible mistreatment Filipina workers
have suffered abroad, a ban on
deployment will be for their own good and
welfare.
The Order does not narrowly apply to
existing conditions. Rather, it is intended
to apply indefinitely so long as those
conditions exist. This is clear from the
Order itself ("Pending review of the
administrative and legal measures, in the
Philippines and in the host
countries . . ." 18), meaning to say that
should the authorities arrive at a means
impressed with a greater degree of
permanency, the ban shall be lifted. As a
stop-gap measure, it is possessed of a
necessary malleability, depending on the
circumstances of each case. Accordingly,
it provides:
9. LIFTING OF SUSPENSION. The
Secretary of Labor and Employment
(DOLE) may, upon recommendation of the
Philippine Overseas Employment

Administration (POEA), lift the suspension

in countries where there are:
1. Bilateral agreements or understanding
with the Philippines, and/or,
2. Existing mechanisms providing for
sufficient safeguards to ensure the welfare
and protection of Filipino workers. 19
The Court finds, finally, the impugned
guidelines to be applicable to all female
domestic overseas workers. That it does
not apply to "all Filipina workers" 20 is not
an argument for unconstitutionality. Had
the ban been given universal applicability,
then it would have been unreasonable and
arbitrary. For obvious reasons, not all of
them are similarly circumstanced. What
the Constitution prohibits is the singling
out of a select person or group of persons
within an existing class, to the prejudice of
such a person or group or resulting in an
unfair advantage to another person or
group of persons. To apply the ban, say
exclusively to workers deployed by A, but
not to those recruited by B, would
obviously clash with the equal protection
clause of the Charter. It would be a classic
case of what Chase refers to as a law that
"takes property from A and gives it to
B." 21 It would be an unlawful invasion of
property rights and freedom of contract
and needless to state, an invalid
act. 22 (Fernando says: "Where the
classification is based on such distinctions
that make a real difference as infancy,
sex, and stage of civilization of minority
groups, the better rule, it would seem, is
to recognize its validity only if the young,
the women, and the cultural minorities are
singled out for favorable treatment. There
would be an element of unreasonableness
if on the contrary their status that calls for
the law ministering to their needs is made
the basis of discriminatory legislation
against them. If such be the case, it would
be difficult to refute the assertion of denial

of equal protection." 23 In the case at bar,

the assailed Order clearly accords
protection to certain women workers, and
not the contrary.)
It is incorrect to say that Department
Order No. 1 prescribes a total ban on
overseas deployment. From scattered
provisions of the Order, it is evident that
such a total ban has hot been
contemplated. We quote:
5. AUTHORIZED DEPLOYMENT-The
deployment of domestic helpers and
workers of similar skills defined herein to
the following [sic] are authorized under
these guidelines and are exempted from
the suspension.
5.1 Hirings by immediate members of the
family of Heads of State and Government;
5.2 Hirings by Minister, Deputy Minister
and the other senior government officials;
and
5.3 Hirings by senior officials of the
diplomatic corps and duly accredited
international organizations.
5.4 Hirings by employers in countries with
whom the Philippines have [sic] bilateral
labor agreements or understanding.
xxx xxx xxx
7. VACATIONING DOMESTIC HELPERS AND
WORKERS OF SIMILAR SKILLS--Vacationing
domestic helpers and/or workers of similar
skills shall be allowed to process with the
POEA and leave for worksite only if they
are returning to the same employer to
finish an existing or partially served
employment contract. Those workers
returning to worksite to serve a new
employer shall be covered by the
suspension and the provision of these
guidelines.

xxx xxx xxx

9. LIFTING OF SUSPENSION-The Secretary
of Labor and Employment (DOLE) may,
upon recommendation of the Philippine
Overseas Employment Administration
(POEA), lift the suspension in countries
where there are:
1. Bilateral agreements or understanding
with the Philippines, and/or,
2. Existing mechanisms providing for
sufficient safeguards to ensure the welfare
and protection of Filipino workers. 24

The petitioners's reliance on the

Constitutional guaranty of worker
participation "in policy and decisionmaking processes affecting their rights
and benefits" 29 is not well-taken. The right
granted by this provision, again, must
submit to the demands and necessities of
the State's power of regulation.
The Constitution declares that:
Sec. 3. The State shall afford full
protection to labor, local and overseas,
organized and unorganized, and promote
full employment and equality of
employment opportunities for all. 30

xxx xxx xxx

The consequence the deployment ban has
on the right to travel does not impair the
right. The right to travel is subject, among
other things, to the requirements of
"public safety," "as may be provided by
law." 25 Department Order No. 1 is a valid
implementation of the Labor Code, in
particular, its basic policy to "afford
protection to labor," 26 pursuant to the
respondent Department of Labor's rulemaking authority vested in it by the Labor
Code.
27

The etitioner assumes that it is

unreasonable simply because of its impact
on the right to travel, but as we have
stated, the right itself is not absolute. The
disputed Order is a valid qualification
thereto.
Neither is there merit in the contention
that Department Order No. 1 constitutes
an invalid exercise of legislative power. It
is true that police power is the domain of
the legislature, but it does not mean that
such an authority may not be lawfully
delegated. As we have mentioned, the
Labor Code itself vests the Department of
Labor and Employment with rulemaking
powers in the enforcement whereof. 28

"Protection to labor" does not signify the

promotion of employment alone. What
concerns the Constitution more
paramountly is that such an employment
be above all, decent, just, and humane. It
is bad enough that the country has to
send its sons and daughters to strange
lands because it cannot satisfy their
employment needs at home. Under these
circumstances, the Government is dutybound to insure that our toiling expatriates
have adequate protection, personally and
economically, while away from home. In
this case, the Government has evidence,
an evidence the petitioner cannot
seriously dispute, of the lack or
inadequacy of such protection, and as part
of its duty, it has precisely ordered an
indefinite ban on deployment.
The Court finds furthermore that the
Government has not indiscriminately
made use of its authority. It is not
contested that it has in fact removed the
prohibition with respect to certain
countries as manifested by the Solicitor
General.
The non-impairment clause of the
Constitution, invoked by the petitioner,
must yield to the loftier purposes

targetted by the Government. 31 Freedom

of contract and enterprise, like all other
freedoms, is not free from restrictions,
more so in this jurisdiction, where laissez
faire has never been fully accepted as a
controlling economic way of life.
This Court understands the grave
implications the questioned Order has on
the business of recruitment. The concern
of the Government, however, is not
necessarily to maintain profits of business
firms. In the ordinary sequence of events,
it is profits that suffer as a result of
Government regulation. The interest of the
State is to provide a decent living to its
citizens. The Government has convinced
the Court in this case that this is its intent.
We do not find the impugned Order to be
tainted with a grave abuse of discretion to
warrant the extraordinary relief prayed for.
WHEREFORE, the petition is DISMISSED.
No costs.
SO ORDERED.
Yap, C.J., Fernan, Narvasa, MelencioHerrera, Cruz, Paras, Feliciano, Gancayco,
Padilla, Bidin, Cortes and Grio-Aquino, JJ.,
concur.
Gutierrez, Jr. and Medialdea, JJ., are on
leave.

is set aside and another one entered,

declaring the suspension of complainants
to be illegal and consequently, respondent
PAL is directed to pay complainants their
salaries corresponding to the respective
period(s) of their suspension, and to
delete the disciplinary action from
complainants' service records. 2chanrobles
virtual law library
These material facts recited in the basic
petition are virtually undisputed and we
reproduce the same hereunder:

SECOND DIVISION
G.R. No. 77875 February 4, 1993
PHILIPPINE AIRLINES, INC., Petitioner,
vs.ALBERTO SANTOS, JR., HOUDIEL
MAGADIA, GILBERT ANTONIO, REGINO
DURAN, PHILIPPINE AIRLINES
EMPLOYEES ASSOCIATION, and THE
NATIONAL LABOR RELATIONS
COMMISSION, Respondents.
Fortunato Gupit, Jr., Solon R. Garcia, Rene
B. Gorospe, Bienvinodo T. Jamoralin, jr.
and Paulino D. Ungos, Jr. for
petitioner.chanrobles virtual law library
Adolpho M. Guerzon for private
respondents.
REGALADO, J.:
The instant petition for certiorari seeks to
set aside the decision of The National
Labor Relations Commission (NLRC) in
NLRC Case No. 4-1206-85, promulgated on
December 11, 1986, 1 containing the
following disposition:
WHEREFORE, in view of the foregoing
consideration, the Decision appealed from

1. Individual respondents are all Port

Stewards of Catering Sub-Department,
Passenger Services Department of
petitioner. Their duties and
responsibilities, among others, are:
Prepares meal orders and checklists,
setting up standard equipment in
accordance with the requirements of the
type of service for each flight; skiing,
binning, and inventorying of Commissary
supplies and equipment.
2. On various occasions, several
deductions were made from their salary.
The deductions represented losses of
inventoried items charged to them for
mishandling of company properties . . .
which respondents resented. Such that on
August 21, 1984, individual respondents,
represented by the union, made a formal
notice regarding the deductions to
petitioner thru Mr. Reynaldo Abad,
Manager for Catering. . .
.chanroblesvirtualawlibrarychanrobles
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3. As there was no action taken on said
representation, private respondents filed a
formal grievance on November 4, 1984
pursuant to the grievance machinery Step
1 of the Collective Bargaining Agreement
between petitioner and the union. . . . The
topics which the union wanted to be

discussed in the said grievance were the

illegal/questionable salary deductions and
inventory of bonded goods and
merchandise being done by catering
service personnel which they believed
should not be their
duty.chanroblesvirtualawlibrarychanrobles
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4. The said grievance was submitted on
November 21, 1984 to the office of Mr.
Reynaldo Abad, Manager for Catering, who
at the time was on vacation leave. . .
.chanroblesvirtualawlibrarychanrobles
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5. Subsequently, the grievants (individual
respondents) thru the shop steward wrote
a letter on December 5, 1984 addressed
to the office of Mr. Abad, who was still on
leave at the time, that inasmuch as no
reply was made to their grievance which
"was duly received by your secretary" and
considering that petitioner had only five
days to resolve the grievance as provided
for in the CBA, said grievance as believed
by them (private respondents) was
deemed resolved in their favor. . .
.chanroblesvirtualawlibrarychanrobles
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6. Upon Mr. Abad's return on December 7,
1984, he immediately informed the
grievants and scheduled a meeting on
December 12, 1984. . .
.chanroblesvirtualawlibrarychanrobles
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7. Thereafter, the individual respondents
refused to conduct inventory works.
Alberto Santos, Jr. did not conduct ramp
inventory on December 7, 10 and 12.
Gilbert Antonio did not conduct ramp
inventory on December 10. In like manner,
Regino Duran and Houdiel Magadia did not
conduct the same on December 10 and
12.chanroblesvirtualawlibrarychanrobles
virtual law library

8. At the grievance meeting which was

attended by some union representatives,
Mr. Abad resolved the grievance by
denying the petition of individual
respondents and adopted the position that
inventory of bonded goods is part of their
duty as catering service personnel, and as
for the salary deductions for losses, he
rationalized:
1. It was only proper that employees are
charged for the amount due to
mishandling of company property which
resulted to losses. However, loss may be
cost price 1/10 selling price.
9. As there was no ramp inventory
conducted on the mentioned dates, Mr.
Abad, on January 3, 1985 wrote by an
inter-office memorandum addressed to the
grievants, individual respondents herein,
for them to explain on (sic) why no
disciplinary action should be taken against
them for not conducting ramp
inventory. . .
.chanroblesvirtualawlibrarychanrobles
virtual law library
10. The directive was complied with . . . .
The reason for not conducting ramp
inventory was put forth as:
4. Since the grievance step 1 was not
decided and no action was done by your
office within 5 days from November 21,
1984, per provision of the PAL-PALEA CBA,
Art. IV, Sec. 2, the grievance is deemed
resolved in PALEA's favor.
11. Going over the explanation, Mr. Abad
found the same unsatisfactory. Thus, a
penalty of suspension ranging from 7 days
to 30 days were (sic) imposed depending
on the number of infractions committed. *
12. After the penalty of suspension was
meted down, PALEA filed another
grievance asking for lifting of, or at least,

holding in abeyance the execution of said

penalty. The said grievance was forthwith
denied but the penalty of suspension with
respect to respondent Ramos was
modified, such that his suspension which
was originally from January 15, 1985 to
April 5, 1985 was shortened by one month
and was lifted on March 5, 1985. The
union, however, made a demand for the
reimbursement of the salaries of individual
respondents during the period of their
suspension.chanroblesvirtualawlibrarycha
nrobles virtual law library
13. Petitioner stood pat (o)n the validity of
the suspensions. Hence, a complaint for
illegal suspension was filed before the
Arbitration Branch of the Commission, . . .
Labor Arbiter Ceferina J. Diosana, on
March 17, 1986, ruled in favor of
petitioner by dismissing the
complaint. . . . 3chanrobles virtual law
library
Private respondents appealed the decision
of the labor arbiter to respondent
commission which rendered the
aforequoted decision setting aside the
labor arbiter's order of dismissal.
Petitioner's motion for reconsideration
having been denied, it interposed the
present
petition.chanroblesvirtualawlibrarychanrob
les virtual law library
The Court is accordingly called upon to
resolve the issue of whether or not public
respondent NLRC acted with grave abuse
of discretion amounting to lack of
jurisdiction in rendering the
aforementioned
decision.chanroblesvirtualawlibrarychanro
bles virtual law library
Evidently basic and firmly settled is the
rule that judicial review by this Court in
labor cases does not go so far as to
evaluate the sufficiency of the evidence

upon which the labor officer or office

based his or its determination, but is
limited to issues of jurisdiction and grave
abuse of discretion. 4 It has not been
shown that respondent NLRC has
unlawfully neglected the performance of
an act which the law specifically enjoins it
to perform as a duty or has otherwise
unlawfully excluded petitioner from the
exercise of a right to which it is
entitled.chanroblesvirtualawlibrarychanrob
les virtual law library
The instant case hinges on the
interpretation of Section 2, Article IV of the
PAL-PALEA Collective Bargaining
Agreement, (hereinafter, CBA), to wit:
Sec. 2 - Processing of Grievances
xxx xxx xxxchanrobles virtual law library
STEP 1 - Any employee who believes that
he has a justifiable grievance shall take
the matter up with his shop steward. If the
shop steward feels there is justification for
taking the matter up with the Company,
he shall record the grievance on the
grievance form heretofore agreed upon by
the parties. Two (2) copies of the
grievance form properly filled, accepted,
and signed shall then be presented to and
discussed by the shop steward with the
division head. The division head shall
answer the grievance within five (5) days
from the date of presentation by inserting
his decision on the grievance form, signing
and dating same, and returning one copy
to the shop steward. If the division head
fails to act within the five (5)-day
regl(e)mentary period, the grievance must
be resolved in favor of the aggrieved
party. If the division head's decision is not
appealed to Step II, the grievance shall be
considered settled on the basis of the
decision made, and shall not be eligible for
further appeal. 5(Emphasis ours.)

Petitioner submits that since the grievance

machinery was established for both labor
and management as a vehicle to thresh
out whatever problems may arise in the
course of their relationship, every
employee is duty bound to present the
matter before management and give the
latter an opportunity to impose whatever
corrective measure is possible. Under
normal circumstances, an employee
should not preempt the resolution of his
grievance; rather, he has the duty to
observe the status quo. 6chanrobles virtual
law library
Citing Section 1, Article IV of the CBA,
petitioner further argues that respondent
employees have the obligation, just as
management has, to settle all labor
disputes through friendly negotiations.
Thus, Section 2 of the CBA should not be
narrowly interpreted. 7Before the
prescriptive period of five days begins to
run, two concurrent requirements must be
met, i.e., presentment of the grievance
and its discussion between the shop
steward and the division head who in this
case is Mr. Abad. Section 2 is not selfexecuting; the mere filing of the grievance
does not trigger the tolling of the
prescriptive period. 8chanrobles virtual law
library
Petitioner has sorely missed the
point.chanroblesvirtualawlibrarychanroble
s virtual law library
It is a fact that the sympathy of the Court
is on the side of the laboring classes, not
only because the Constitution imposes
such sympathy, but because of the onesided relation between labor and
capital. 9 The constitutional mandate for
the promotion of labor is as explicit as it is
demanding. The purpose is to place the
workingman on an equal plane with
management - with all its power and
influence - in negotiating for the

advancement of his interests and the

defense of his rights. 10 Under the policy of
social justice, the law bends over
backward to accommodate the interests of
the working class on the humane
justification that those with less privileges
in life should have more privileges in
law. 11chanrobles virtual law library
It is clear that the grievance was filed with
Mr. Abad's secretary during his
absence. 12 Under Section 2 of the CBA
aforequoted, the division head shall act on
the grievance within five (5) days from the
date of presentation thereof, otherwise
"the grievance must be resolved in favor
of the aggrieved party." It is not disputed
that the grievants knew that division head
Reynaldo Abad was then "on leave" when
they filed their grievance which was
received by Abad's secretary.13 This
knowledge, however, should not prevent
the application of the
CBA.chanroblesvirtualawlibrarychanrobles
virtual law library
On this score, respondent NLRC aptly
ruled:
. . . Based on the facts heretofore
narrated, division head Reynaldo Abad
had to act on the grievance of
complainants within five days from 21
November 1984. Therefore, when
Reynaldo Abad, failed to act within the
reglementary period, complainants,
believing in good faith that the effect of
the CBA had already set in, cannot be
blamed if they did not conduct ramp
inventory for the days thereafter. In this
regard, respondent PAL argued that
Reynaldo Abad was on leave at the time
the grievance was presented. This,
however, is of no moment, for it is hard to
believe that everything under Abad's
authority would have to stand still during
his absence from office. To be sure, it is to
be expected that someone has to be left

to attend to Abad's duties. Of course, this

may be a product of inadvertence on the
part of PAL management, but certainly,
complainants should not be made to suffer
the consequences. 14chanrobles virtual law
library
Contrary to petitioner's submission, 15 the
grievance of employees is not a matter
which requires the personal act of Mr.
Abad and thus could not be delegated.
Petitioner could at least have assigned an
officer-in-charge to look into the grievance
and possibly make his recommendation to
Mr. Abad. It is of no moment that Mr. Abad
immediately looked into the grievance
upon returning to work, for it must be
remembered that the grievants are
workingmen who suffered salary
deductions and who rely so much on their
meager income for their daily subsistence
and survival. Besides, it is noteworthy that
when these employees first presented
their complaint on August 21, 1984,
petitioner failed to act on it. It was only
after a formal grievance was filed and
after Mr. Abad returned to work on
December 7, 1984 that petitioner decided
to turn an ear to their
plaints.chanroblesvirtualawlibrarychanrobl
es virtual law library
As respondent NLRC has pointed out,
Abad's failure to act on the matter may
have been due to petitioner's
inadvertence, 16 but it is clearly too much
of an injustice if the employees be made
to bear the dire effects thereof. Much as
the latter were willing to discuss their
grievance with their employer, the latter
closed the door to this possibility by not
assigning someone else to look into the
matter during Abad's absence. Thus,
private respondents should not be faulted
for believing that the effects of the CBA in
their favor had already stepped into the
controversy.chanroblesvirtualawlibrarycha
nrobles virtual law library

If the Court were to follow petitioner's line

of reasoning, it would be easy for
management to delay the resolution of
labor problems, the complaints of the
workers in particular, and hide under the
cloak of its officers being "on leave" to
avoid being caught by the 5-day deadline
under the CBA. If this should be allowed,
the workingmen will suffer great injustice
for they will necessarily be at the mercy of
their employer. That could not have been
the intendment of the pertinent provision
of the CBA, much less the benevolent
policy underlying our labor
laws.chanroblesvirtualawlibrarychanrobles
virtual law library
ACCORDINGLY, on the foregoing premises,
the instant petition is hereby DENIED and
the assailed decision of respondent
National Labor Relations Commission is
AFFIRMED. This judgment is immediately
executory.chanroblesvirtualawlibrarychanr
obles virtual law library
SO ORDERED.
Narvasa, C.J., Feliciano, Nocon and
Campos, Jr., JJ., concur.
Endnotes:

confidence in him, it would be highly

unfair to require said employer to continue
employing him or to reinstate him, for in
that case, the former might find it
necessary for its protection to employ
another person to watch and keep an eye
on him. In such a case the employee,
despite his acquittal is not entitled to
reinstatement to his former position from
which he was dismissed.
DECISION
MONTEMAYOR, J.:

EN BANC
[G.R. No. L-13778. April 29, 1960.]
PHILIPPINE EDUCATION CO.,
INC., Petitioners, v. UNION OF
PHILIPPINE EDUCATION EMPLOYEES
(NLU) and THE COURT OF INDUSTRIAL
RELATIONS, Respondents.
Marcial Esposo for Petitioner.
Eulogio R. Lerum for respondent
Union.
Jos B. Bolisay for respondent CIR.
SYLLABUS
1. EMPLOYER AND EMPLOYEE; ACQUITTAL
OF EMPLOYEE FROM CRIMINAL CHARGE OF
THEFT; PROPRIETY OF DISMISSAL. The
relation of employer and employee,
specially where the employee has access
to the employers property in the form of
articles and merchandise for sale,
necessarily involves trust and confidence.
If said merchandise are lost and said loss
is reasonably attributed to said employee,
and he is charged with theft, even if he is
acquitted of the charge on reasonable
doubt, when the employer has lost its

The Philippine Education Company, Inc. is

appealing the order of the Court of
Industrial Relations, dated February 7,
1958, directing it to reinstate its former
employee, Ernesto Carpio, to his former or
equivalent position, without backpay, and
from the resolution of the same court in
banc, dated March 22, 1958, denying the
companys motion for reconsideration.
Ernesto Carpio and other employees of the
company, members of the Union of
Philippine Education Employees (NLU)
joined a strike staged on January 16, 1953.
After the labor dispute was settled, the
Industrial Court ordered the reinstatement
of the strikers, including Carpio. The
company, however, opposed the
reinstatement of Carpio for the reason
that a criminal complaint had been filed
against him in the Municipal Court of
Manila for theft of magazines allegedly
belonging to the company. He was
convicted and sentenced to two months
and one day of arresto mayor. On appeal
to the Court of First Instance, Carpio was
acquitted on the ground of reasonable
doubt.
The question of Carpios reinstatement
was heard by the Industrial Court where
the parties submitted as evidence the
transcript of the stenographic notes taken
during the hearing in the criminal case
before the Court of First Instance of
Manila, the exhibits presented in said
case, as well as the decisions of the
Municipal Court convicting him, and that

of the Court of First Instance acquitting

him, or rather dismissing the case against
him on reasonable doubt. After said
hearing, the Industrial Court agreed with
the finding of the Court of First Instance
that the offense had not been proven
beyond reasonable doubt and held that
Carpios acquittal entitled him to
reinstatement, though without backpay.
We have examined the aforementioned
evidence, and we are inclined to agree
with the Municipal Court that Carpios guilt
had been duly established. At least, the
preponderance of evidence was against
his innocence. The question for
determination is whether the acquittal of
an employee, specially on the ground of
reasonable doubt, in a criminal case for
theft involving articles and merchandise
belonging to his employer, entitles said
employee to reinstatement.
In the case of National Labor Organization
of Employees and Laborers v. Court of
Industrial Relations, 95 Phil., 727; 55 Off.
Gaz. (9) 4219, we
said:jgc:chanrobles.com.ph
". . . the acquittal of an employee in a
criminal case is no bar to the Court of
Industrial Relations, after proper hearing,
finding the same employee guilty of facts
inimical to the interests of his employer
and justifying loss of confidence in him by
said employer, thereby warranting his
dismissal or the refusal of the Company to
reinstate him. The reason for this is not
difficult to see. The evidence required by
law to establish guilt and to warrant
conviction in a criminal case substantially
differs from the evidence necessary to
establish responsibility or liability in a civil
or non-criminal case. The difference is in
the amount and weight of evidence and
also in degree. In a criminal case, the
evidence or proof must be beyond
reasonable doubt while in a civil or noncriminal case it is merely preponderance
of evidence. In further support of this
principle we may refer to Art. 29 of the
New Civil Code (Rep. Act 386) which
provides that when the accused in a
criminal case is acquitted on the ground of
reasonable doubt a civil action for

damages for the same act or omission

may be instituted where only a
preponderance of evidence is necessary to
establish liability. From all this it is clear
that the Court of Industrial Relations was
justified in denying the petition of Rivas
and Tolentino for reinstatement in the
cement company, because of their illegal
possession of hand grenades intended by
them for purposes of sabotage in
connection with the strike on March 16,
1952."cralaw virtua1aw library
Then in the case of National Labor Union v.
Standard Vacuum Oil Company, 73 Phil.,
279, the City Fiscal refused to prosecute
two employees charged with theft for lack
of evidence and yet this Tribunal upheld
their dismissal from the employer
company on the ground that their
employer had ample reason to distrust
them.
The relation of employer and employee,
specially where the employee has access
to the employers property in the form of
articles and merchandise for sale,
necessarily involves trust and confidence.
If said merchandise are lost and said loss
is reasonably attributed to said employee,
and he is charged with theft, even if he is
acquitted of the charge on reasonable
doubt, when the employer has lost its
confidence in him, it would be highly
unfair to require said employer to continue
employing him or to reinstate him, for in
that case, the former might find it
necessary for its protection to employ
another person to watch and keep an eye
on him. In the present case, Carpio was
refused reinstatement not because of any
union affiliation or activity or because the
company has been guilty of any unfair
labor practice. As already stated, Carpio
was convicted in the Municipal Court and
although he was acquitted on reasonable
doubt in the Court of First Instance, the
company had ample reason to distrust
him. Under the circumstances, we cannot
in conscience require the company to
reemploy or reinstate him.
In view of the foregoing, the appealed
orders of the Industrial Court of February
7, 1958 and March 22, 1958 are hereby

reversed. No costs.
Paras, C.J., Bengzon, Bautista Angelo,
Labrador, Barrera and Gutierrez David, JJ.,
concur.

PACIFIC MILLS, INC.,

Petitioner,
-versus- G.R. No. 78090
July 26, 1991
ZENAIDA ALONZO,
Respondent.
DECISION
NARVASA, J.:

From July 30, 1973, Zenaida Alonzo was

employed as a ring frame
operator in the Pacific Mills, Inc. until
September 30, 1982 when she
was discharged by Management.
chanroblespublishingcompany
The record shows that in the early
afternoon of September 22, 1982,
Zenaida challenged Company Inspector
Ernesto Tamondong to a
fight, saying: Putang Ina mo, lumabas ka,
tarantado, kalalaki mong
tao, duwag ka. Ipagugulpi kita sa labas at
kaya kitang ipakaladkad
dito sa loob ng compound palabas ng gate
sa mga kamag-anak ko.
And suiting action to the word, she
thereupon boxed Tamondong in
the stomach. The motive for the assault
was Zenaidas resentment at
having been reprimanded, together with
other employees, two days
earlier by Tamondong for wasting time by
engaging in idle chatter.[1] Tamondong
forthwith reported the incident to the
firms
Administrative Manager[2] as well as the
Chairman of Barangay
Balombato, Quezon City.[3]
chanroblespublishingcompany

SUPREME COURT
FIRST DIVISION

On September 30, 1982, Zenaida Alonzo

was given a Memorandum
by the companys Executive Vice President
& General Manager
terminating her employment as of October
1, 1982 on various
grounds: poor work, habitual absences
and tardiness, wasting time,
insubordination and gross disrespect. The
service of that

memorandum of dismissal on her was not

preceded by any
complaint, hearing or other formality.
These were apparently
considered unnecessary by
Management[4] in view of the provision in
the Company Rules and Relations
(embodied in the Collective
Bargaining Agreement between the
company and the union
representing the employees) that:
Fighting or attempting to inflict harm to
another employee,
will render (sic) the aggressor to outright
dismissal. chanroblespublishingcompany
It was only at the hearing of the complaint
for illegal dismissal (and
non-payment of proportionate 13th month
pay) instituted by Zenaida
on October 4, 1982 in the NCR Arbitration
Branch, that evidence was
presented by the company not only of the
assault by Zenaida on her
superior but also of many other violations
by her of company rules
and regulations, in an attempt to
substantiate the validity of her
dismissal from work.
chanroblespublishingcompany
The Labor Arbiter found that Alonzo had
indeed verbally abused and
struck her superior, Tamondong, and
rejected her contention that the
assault was not punishable since it was
not work-connected and was
provoked instigated by Ernesto
Tamondong.[5] The Arbiter also
declared as fully established the previous
infractions of
complainant, these being a matter of
record and not denied by
complainant (Zenaida).
chanroblespublishingcompany
The Arbiter was of the view, however, that
Alonzo was entitled to
relief, because (a) the penalty imposed
was harsh and severe and not
commensurate with the offense,
suspension of three (3) months
(being) the proper, just and reasonable
penalty; and because (b) the

company had failed to investigate

complainant before she was dismissed.
The Arbiter thus ordered Pacific Mills, Inc.,
Zenaidas
employer: chanroblespublishingcompany
To reinstate complainant without loss of
seniority rights and to
pay her backwages from January 1, 1983
until fully reinstated,
the period from October 1, 1982 to
December 31, 1982
complainant being under suspension
without pay (as well as) to
pay complainants 13th month pay in the
amount of THREE
HUNDRED FIFTY-ONE PESOS ONLY
(P351.00). chanroblespublishingcompany
Acting on the employers appeal, the
National Labor Relations
Commission rendered judgment on March
23, 1987, sustaining the
Labor Arbiters findings. It however limited
the award of back wages
to Zenaida only to three (3) years, in
accordance with this Courts
judgment in Feati University Faculty Club
(PAFLU) vs. Feati
University, 58 SCRA 396.[6]
Pacific Mills, Inc. has instituted in this
Court the special civil action of
certiorari at bar praying for nullification of
the judgment of the
NLRC for having been rendered with grave
abuse of discretion.
chanroblespublishingcompany
In the comment thereon,[7] required of
him by the Court, the Solicitor
General opined that:
Both the Labor Arbiter and the NLRC
apparently failed to take
into consideration the fact that Zenaida
Alonzo was dismissed
not because of this isolated act (of assault
against her superior)
but rather because of numerous and
repeated violations of
company rules and regulations. It was only
this last incident
which compelled Pacific Mills, Inc. to finally
terminate her

services. It is the totality of the infractions

committed by the
employee which should have been
considered in determining
whether or not there is just cause for her
dismissal. chanroblespublishingcompany
Zenaida Alonzo was caught several times
leaving her place of
work to chat with her co-employees. This
is reprehensible
conduct since, as ring frame operator, she
must be at her post
during work hours to prevent the
occurrence of incidents which
could damage the machine. The company
inspector precisely
warned her against doing this. She had
also been repeatedly reprimanded for
insubordination habitual tardiness,
wasting
time and not wearing the required
company uniform. In spite of
these infractions the company bore with
her services and did
not see fit to dismiss her. Her assault on
the company inspector
was apparently the last straw which
compelled Pacific Mills,
Inc. to terminate her services.
chanroblespublishingcompany
Accordingly, the Solicitor General
recommended payment of
separation pay equivalent to three (3)
years backwages but without
reinstatement and of proportionate 13th
month pay.
For their part, the Chief Legal Officer of
the NLRC,[8] and the private
respondent,[9] insist that since the
dismissal of Zenaida Alonzo was
not preceded by any notice of the charges
and a hearing thereon, the
judgment of the NLRC must be sustained.
Decisive of this controversy is the
judgment of the Court en banc in
Wenphil Corporation vs. NLRC,
promulgated on February 8, 1989,[10]
in which the following policy
pronouncements were made:

The Court holds that the policy of

ordering the reinstatement
to the service of an employee without loss
of seniority and the
payment of his wages during the period of
his separation until
his actual reinstatement but not exceeding
three (3) years
without qualification or deduction, when it
appears he was not
afforded due process, although his
dismissal was found to be for
just and authorized cause in an
appropriate proceeding in the
Ministry of Labor and Employment, should
be re-examined. It
will be highly prejudicial to the interests of
the employer to
impose on him the services of an
employee who has been shown
to be guilty of the charges that warranted
his dismissal from
employment. Indeed, it will demoralize the
rank and file if the
undeserving, if not undesirable, remains in
the service. chanroblespublishingcompany
Thus in the present case, where the
private respondent, who
appears to be of violent temper, caused
trouble during office
hours and even defied his superiors as
they tried to pacify him,
should not be rewarded with
reemployment and back wages. It
may encourage him to do even worse and
will render a mockery
of the rules of discipline that employees
are required to observe. Under the
circumstances, the dismissal of the private
respondent for just cause should be
maintained. He has no right
to return to his former employer.
However, the petitioner (employer) must
nevertheless be held
to account for failure to extend to private
respondent his right
to an investigation before causing his
dismissal. The rule is
explicit as above discussed. The dismissal
of an employee must
be for just or authorized cause and after
due process (Section 1,

Rule XIV, Implementing Regulations of the

Labor Code).
Petitioner committed an infraction of the
second requirement.
Thus, it must be imposed a sanction for its
failure to give a
formal notice and conduct an investigation
as required by law
before dismissing (respondent) from
employment. Considering
the circumstances of this case petitioner
must indemnify the
private respondent the amount of
P1,000.00. The measure of
this award depends on the facts of each
case and the gravity of
the omission committed by the employer.
chanroblespublishingcompany
The Court perceives no sufficient cause, it
has indeed been cited to
none by the respondents, to decline to
apply the Wenphil doctrine to
the case at bar.
chanroblespublishingcompany
While it is true that Pacific Mills, Inc. had
not complied with the
requirements of due process prior to
removing Zenaida Alonzo from
employment, it is also true that
subsequently, in the proceedings
before the Labor Arbiter in which Zenaida
Alonzo had of course taken
active part, it had succeeded in
satisfactorily proving the commission
by Zenaida of many violations of company
rules and regulations
justifying termination of her employment.
Under the circumstances,
it is clear that, as the Solicitor General has
pointed out, the
continuance in the service of the latter is
patently inimical to her
employers interests and that, citing San
Miguel Corporation vs.
NLRC,[11] the law, in protecting the rights
of the laborer authorizes
neither oppression nor self-destruction of
the employer. And it was
oppressive and unjust in the premises to
require reinstatement of the
employee. chanroblespublishingcompany

WHEREFORE, the Petition is granted and

the challenged Decision
of the respondent Commission dated
March 23, 1987 and that of the Labor
Arbiter thereby affirmed, are NULLIFIED
AND SET
ASIDE. However, the petitioner is ordered
to pay private respondent
a proportionate part of the 13th month
pay due her, amounting to
P351.00 as well as to indemnify her in the
sum of P1,000.00. No
costs. chanroblespublishingcompany
SO ORDERED.
chanroblespublishingcompany
Cruz, Gancayco, Grio-Aquino and
Medialdea, JJ., concu

and some employees were forthwith subjected

to the disciplinary measures embodied therein.
- PALEA alleged that copies of the Code had
been circulated in limited numbers; that being
penal in nature the Code must conform with
the requirements of sufficient publication, and
that the Code was arbitrary, oppressive, and
prejudicial to the rights of the employees. It
prayed that implementation of the Code be
held in abeyance; that PAL should discuss the
substance of the Code with PALEA; that
employees dismissed under the Code be
reinstated and their cases subjected to further
hearing; and that PAL be declared guilty of
unfair labor practice and be ordered to pay
damages (pp. 7-14, Record.).
HELD

1. Philippine Airlines Inc. vs. NLRC,

201 SCRA 687
FACTS
- On March 15, 1985, the Philippine Airlines,
Inc. (PAL) completely revised its 1966 Code of
Discipline. The Code was circulated among the
employees and was immediately implemented,

- Indeed, industrial peace cannot be achieved if

the
employees
are
denied
their
just
participation in the discussion of matters
affecting their rights. Thus, even before Article
211 of the Labor Code (P.D. 442) was amended
by Republic Act No. 6715, it was already
declared a policy of the State: "(d) To promote
the enlightenment of workers concerning their
rights and obligations . . .as employees." This
was, of course, amplified by Republic Act No.
6715 when it decreed the "participation of
workers in decision and policy making
processes affecting their rights, duties and
welfare." PAL's position that it cannot be
saddled with the "obligation" of sharing
management prerogatives as during the
formulation of the Code, Republic Act No. 6715
had not yet been enacted (Petitioner's
Memorandum, p. 44; Rollo, p. 212), cannot thus
be sustained. While such "obligation" was not
yet founded in law when the Code was
formulated, the attainment of a harmonious
labor-management relationship and the then
already existing state policy of enlightening
workers concerning their rights as employees
demand no less than the observance of
transparency in managerial moves affecting
employees' rights.

PAL v. NLRC

(G.R. No. 87698

September 24,
1991)
Facts:
Private respondent Irineo, along with other
employees (Rogelio Damian Antonio
Rabasco, and Jacinto Macatol), was
dismissed by petitioner PAL on August 11,
1967, on the ground that they have been
prosecuted for estafa thru falsification of
commercial documents on account of
complicity
in
irregular
refunds
of
international plane tickets, as was
recommended by the Fact Finding Panel of
PAL.
The petitioners in the case for estafa were
convicted but upon their motion for
reconsideration/new trial, Macatol was
absolved of any liability for the offense
charged "for lack of sufficient evidence."
The other three appealed.
About 12 years after his dismissal from
employment, Macatol filed a complaint for
illegal dismissal against PAL in the
Department of Labor. His complaint was
however dismissed by the Labor Arbiter on
the ground that his right of action had
prescribed. That dismissal was affirmed by
the National Labor Relations Commission
in a decision promulgated on May 30,
1980. The Commission ruled that "the
running of the prescriptive period ...
commenced on the date ... (Macatol's)
cause of action accrued;" that such cause
of action did not accrue "upon the
termination of the criminal case," but upon
"his dismissal, the legality or illegality of
which could be determined soon after it
was effected ... (and a) suit to contest its
legality could proceed independently of
any criminal proceedings;" that "if no
criminal case was instituted, following the
logic of the complainant's argument, the
cause of action would not and could not
have accrued at all; ... (and) the institution
of the criminal action did not bar the
complainant from filing a complaint for
illegal dismissal."
On the other hand, the IAC affirmed the
judgment of conviction only as regards
Rogelio Damian, but acquitting Irineo and

Rabasco
doubt."

"on

grounds

of

reasonable

17 years after the termination of his

employment on August 23, 1967, Irineo
filed a complaint against PAL for
reinstatement and back wages on the
claim that that termination was illegal. The
Labor Arbiter ordered his reinstatement to
his position in 1967 without loss of
seniority rights and the payment to him of
back wages "from August 13, 1967 up to
his actual reinstatement," as well as moral
damages in the amount of P300,000.00.
The Arbiter overruled the defense of
prescription asserted by PAL, among
others. The Arbiter held that since there
was a PAL circular dated June 15, 1966 to
the effect that "(a)n employee charged
with any crime inimical to the company's
interest shall be placed under preventive
suspension until the final adjudication of
his case," and there was, too, a standing
order by the Court of Industrial Relations
at that time forbidding the dismissal of
any employee by PAL without court
authority, the termination by PAL of
Irineo's employment on August 23, 1967
merely "amounted to a suspension per
(said) PAL IRD Circular No. 66-11." The
difference between Irineo and Macatols
case was that issue of the circular was not
raised in Macatols case. NLRC affirmed
the Arbiters decision.

Issue:
WON Irineo had been placed on preventive
suspension.

Held:
No. His employment was terminated.

Ratio:
The letter to Oscar Irineo of then PAL
President Benigno P. Toda, Jr. dated August
23, 1967, based evidently on the
investigation and report of the fact finding

panel, leaves no doubt that Irineo's

employment was being ended; the
language is plain and categorical. It reads
pertinently as follows:
To: Oscar Ireneo
Comptroller's Department
For being involved in the irregular
refund
of
tickets
in
the
international service to the damage
and prejudice of the company, you
are dismissed from the service
effective immediately.
The acts committed being criminal,
resulting in the swindling of the company,
the Legal Department is directed to file
immediately the corresponding criminal
cases against you.
To say, as both the Arbiter and the
respondent Commission do, that that
declaration, "you are dismissed from the
service effective immediately," should be
construed merely as a suspension, not a
dismissal, from employment, is illogical if
not downright ludicrous. They attempt to
justify this conclusion by adverting to a
PAL circular dated June 15, 1966 to the
effect that "(a)n employee charged with
any crime inimical to the company's
interest shall be placed under preventive
suspension until the final adjudication of
his case," and construe this as a complete
foreclosure
or
prohibition
of
any

alternative or concurrent action on PAL's

part,
such
as
the
imposition
of
administrative sanctions or penalties; in
other words, any disciplinary action
against an erring employee was absolutely
dependent on the outcome of the criminal
action against the latter, no disciplinary
measure of any nature being permissible
against the employee "until the final
adjudication" of his criminal case. It is a
construction that has nothing to support it,
is contrary to common sense, and one
certainly not justified by the recorded
facts.
The attempt to sustain the strained theory
of dismissal-qua-suspension by referring
to a standing order by the Court of
Industrial Relations at that time forbidding
the dismissal of any employee by PAL
without court authority, is equally
indefensible. That prohibition was imposed
only in relation to a labor dispute then
pending before the Court of Industrial
Relations. That dispute however ended
when the parties entered into a collective
bargaining agreement two (2) years or so
before Irineo was fired on August 23,
1967. In other words, when Irineo's
employment was terminated, the CIR
injunction adverted was already functions
officio and could no longer have any
relevance to that event.