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LABOR LAW II: LABOR RELATIONS

CASE DIGESTS
Interpretation in favor of labor
Continental Steel Manufacturing Corporation vs. Montao
GR No. 182836, October 13, 2009
Facts:
Hortillano filed his claims for Paternity Leave, Bereavement Leave, and Death and
Accident Insurance for dependent based on the death of his unborn child when his wife had
a premature delivery in the 38th week of her pregnancy. The company alleges however that
he is not entitled to Bereavement Leave and Death and Accident Insurance because the
express provision of the CBA did not contemplate the death of an unborn child, a fetus,
without legal personality.
Issue:

Can an employee claim benefits pursuant to a provision of a CBA which does not
properly define the pertinent terms connected with his claim?
Ruling:
Yes. CBA provisions should be interpreted liberally to give life to the intentions
thereof. The Labor Code is specific in enunciating that in case of doubt in the interpretation
of any law or provision affecting labor, such should be interpreted in favor of labor. In the
same way, the CBA and its provisions should be interpreted in favor of labor.
In the case at bar, Arbitrator Montao was correct in pointing out that the employee
was able to satisfy the requirements of the said claims. The Court found it unnecessary to
establish the legal personality of the unborn child because it is not an issue on this case.
Hortillano was able to establish that there was death of his legitimate dependent and was
able to provide documents in the proof of such. Hence, his claims were sustained.

MARAO, REBBEKAH GRACE G. Block B

LABOR LAW II: LABOR RELATIONS


CASE DIGESTS
Interpretation in favor of labor
Star Paper Corporation, et. al. vs. Simbol, et. al.
GR No. 164774, April 12, 2006
Facts:
Simbol, Comia, and Estrella complain of unfair labor practice and constructive
dismissal against Star Paper averring that the company policy of their employer in banning
spouses from working in the same company violates their right as employees and that such
policy is against the law. On the other hand, Star Paper contends that such policy only gives
teeth to the rule avoiding the employment of relatives up to the third degree. Furthermore,
the employer contends that it is not the marital status of the employee that is being
discriminated, and that it is within the ambit of management prerogatives.
Issue:
Is the policy of an employer in banning spouses from working in the same company a
valid exercise of management prerogative?
Ruling:
Yes, as long as it can be established by the employer that a reasonable business
necessity exists to justify the validity of such policy. The policy, to pass judicial scrutiny,
should be shown to be reasonable despite its discriminatory effect. The Court said that
although there is no statute expressly prohibiting marital discrimination, the protection
given to labor is vast and extensive that inferences cannot be prudently drawn from the
legislatures silence that married persons are not protected under the Constitution and
declare a valid policy based on a prejudice or stereotype.

MARAO, REBBEKAH GRACE G. Block B

LABOR LAW II: LABOR RELATIONS


CASE DIGESTS
Interpretation in favor of labor; limitations
Revidad, et. al. vs NLRC
GR No. 111105, June 27, 1995
Facts:
Atlantic, Gulf and Pacific Company of Manila (AG&P) temporarily laid off some of its
employees pursuant to its management decision to lay off 40% of the workers due to
financial losses and agreed to extend financial assistance to said affected workers.
Issue:

Is the temporary layoff or retrenchment of employees due to continuing financial


losses valid?
Ruling:
Yes, provided that the requirements of the law have been faithfully met.
Retrenchment is one of the economic grounds to dismiss employees resorted to by an
employer primarily to avoid or minimize business losses. The law in protecting the rights of
the laborer authorizes neither oppression nor self-destruction of the employer. While the
Constitution is committed to the social justice policy and the protection of the working class,
it should not be supposed that every labor dispute will be automatically decided in favor of
labor. Management also has their own rights entitled to respect and enforcement in the
interest of simple fair play.

MARAO, REBBEKAH GRACE G. Block B

LABOR LAW II: LABOR RELATIONS


CASE DIGESTS
Interpretation in favor of labor; limitations
Mercury Drug Corporation vs. NLRC
GR No. 75662, September 15, 1989
Facts:
Cesar Ladisla was apprehended by representative of Mercury Drug while in the act of
pilfering company property. While he was placed in preventive suspension, Mercury Drug
filed an application for his termination on grounds of dishonesty and breach of trust.
Mercury Drug also filed criminal charges and Ladisla was convicted for simple theft. The
NLRC however ordered for Ladislas reinstatement.
Issue:

Can an employer be compelled to reinstate an employee convicted for simple theft


because of stealing company property?
Ruling:
No. As a measure of self-protection against acts inimical to its interest, a company has
the right to dismiss its erring employees. An employer cannot be compelled to continue in
employment its employee guilty of acts inimical to its interest, justifying loss of confidence
in the latter. Under the Labor Code, an employer may terminate an employment for fraud or
willful breach by the employee of the trust reposed in him by his employer. Loss of
confidence is established as a valid ground for the dismissal. The law does not require proof
beyond reasonable doubt of such misconduct to invoke such justification. It is sufficient that
there is some basis for the loss of trust or that the employer has reasonable grounds to
believe that the employee is responsible for the misconduct and his participation therein
renders him unworthy of the trust and confidence demanded of his position.
The law in protecting the rights of the laborer authorizes neither oppression nor selfdestruction of the employer. While the Constitution is committed to the social justice policy
and the protection of the working class, it should not be supposed that every labor dispute
will be automatically decided in favor of labor. Management also has their own rights entitled
to respect and enforcement in the interest of simple fair play.

MARAO, REBBEKAH GRACE G. Block B

LABOR LAW II: LABOR RELATIONS


CASE DIGESTS
Interpretation in favor of labor; limitations
Caltex (Philippines) Inc. vs Philippine Labor Organization
GR No. L-9915, May 27, 1959
Facts:
Hidpion del Rosario was hired as a laborer by Caltex in view of a dispute between the
latter and Philippine Labor Organization. His employment was on a temporary basis, as to
determine whether he is fit to become a regular employee. About two months later, the
company suspended del Rosario for insubordination disorderly conduct and willful
disobedience and filed a petition with the Industrial Court for authority to dismiss him. The
CIR found del Rosario guilty of the acts complained of him but it believed that a permanent
dismissal was a severe punishment; thus, it ordered for del Rosarios reinstatement without
payment of backwages.
Issue:

Can an employer be compelled to reinstate an employee guilty of acts of


insubordination?
Ruling:
No. The acts of insubordination justified the employees discharge. The company has
a right to place the employee in a temporary status to determine his fitness and competency.
The discharge was all the more justified because the acts of insubordination were committed
within a very short period of two months following the employment.

MARAO, REBBEKAH GRACE G. Block B

LABOR LAW II: LABOR RELATIONS


CASE DIGESTS
Interpretation in favor of labor; limitations
San Miguel Brewery Sales Force Union vs. Ople
GR No. L-53515, February 8, 1989
Facts:
As stipulated in the CBA, employees of San Miguel Corporation within the appropriate
bargaining unit shall be entitled to a basic monthly compensation plus commission based on
their respective sales. A new marketing scheme, the Complementary Distribution System
(CDS) whereby its beer products were offered for sale directly to wholesalers through San
Miguels sales offices, was introduced by San Miguel. In turn, the company agreed to
compensate for the losses that the workers may suffer. The labor union filed a complaint for
unfair labor practice on the ground that the new marketing scheme was a violation of the
CBA, because such scheme would reduce the take-home pay of the salesmen and their truck
helpers, for the company would be unfairly competing with them.
Issue:

Is the introduction of a new marketing scheme tending to reduce the take-home pay
of the employees a valid exercise of the companys management prerogatives?
Ruling:
Yes. An employer is free to regulate, according to his own discretion and judgment,
all aspects of employment, including processes to be followed, with limitations as provided
by special laws. Every business enterprise endeavors to increase its profits. In the process, it
may adopt or devise means designed towards that goal. So long as a companys management
prerogatives are exercised in good faith for the advancement of the employers interest and
not for the purpose of defeating or circumventing the rights of the employees under special
laws or under valid agreements, the Court will uphold them.

MARAO, REBBEKAH GRACE G. Block B

LABOR LAW II: LABOR RELATIONS


CASE DIGESTS
Effect of international labor conventions
The Heritage Hotel Manila vs NUWHRAIN-HHMSC
G.R. No. 178296, January 12, 2011
Facts:
Heritage Hotel Manila filed a petition to cancel the registration of the National Union
of Workers in the Hotel, Restaurant and Allied Industries-Heritage Hotel Manila Supervisors
Chapter (NUWHRAIN-HHMSC) when it discovered the unions failure to file the necessary
reportorial documents on time to the Bureau of Labor Relations. It was filed after the union
filed its petition for certification election as the exclusive bargaining representative of the
supervisory employees and subsequently the commencement of bargaining negotiations.
Issue:

Can the registration of a labor union be cancelled for failure to submit the required
documents to the BLR on time?
Ruling:
Yes, if in the determination of the Regional Director, the labor union has not
substantially complied with the requirements prescribed by law. According to the Court, it
is sufficient to give the Regional Director license to treat the late filing of the required
documents as sufficient compliance with the legal requirements. Labor authorities should,
indeed, act with circumspection in treating petitions for cancellation of labor union
registration, lest they be accused of interfering with union activities. They must take into
consideration the fundamental rights of all workers to self-organization, collective
bargaining and negotiations, and peaceful concerted activities.
In compliance with our international obligations as embodied in the International
Labour Organization (ILO) Convention No. 87, Congress enacted RA 9481 which provides for
the non-dissolution of workers organizations by administrative authority, effectively
amending the Labor Code provisions to strengthen the workers right to self-organization.

MARAO, REBBEKAH GRACE G. Block B

LABOR LAW II: LABOR RELATIONS


CASE DIGESTS
Concept of employer and employee; employer-employee relationship
Bautista vs. Inciong
G.R. No. L-52824, March 16, 1988
Facts:
Bautista was employed by Associated Labor Unions (ALU) as organizer. He paid his
monthly SSS contributions with ALU as employer. One time, he was left in the office while his
co-organizers attended a certification election. The following day, he went on sick leave for
10 days, and upon returning to work, he has been informed that his employment has already
been terminated. However, ALU filed a clearance application to terminate Bautistas
employment only after more than a month of the effectivity of his termination. Deputy
Minister Inciong ruled that no employer-employee relationship exists between Bautista and
ALU, contending that SSS membership is not conclusive proof of employment and that ALU
is a non-profit entity duly organized for representational purposes.
Issue:

Can a labor union not be considered as an employer?

Ruling:
No. The mere fact that the labor union is such does not mean that it cannot be
considered as employer of the persons who work for it. Much less should it be exempted
from the labor laws which it espouses as a labor organization. So long as the elements of an
employer-employee relationship exist the selection and engagement of the employee, the
payment of wages, the power of dismissal, and the power to control the employees conduct
the entity is considered the employer of the putative employee.
In the case at bar, it was sufficiently proven that all four elements are present. It was
also reflected in Bautistas payroll sheets, and his membership coverage with the SSS and
ALUs contribution as employer. Even bolstering such fact is the act of ALU in filing a
clearance application to terminate Bautistas employment.

MARAO, REBBEKAH GRACE G. Block B

LABOR LAW II: LABOR RELATIONS


CASE DIGESTS
Concept of employer and employee; employer-employee relationship
Associated Labor Union vs. Borromeo
G.R. No. L-26461, November 27, 1968
Facts:
Employees of Superior Gas and Equipment Company of Cebu, Inc. (SUGECO) were
members of the Associated Labor Union (ALU). ALU declared a strike against SUGECO upon
charging the latter with bargaining in bad faith. In its letter to SUGECO, ALU stated that they
will establish picket lines in any place where SUGECOs business may be found, unless the
company will immediately stop its unfair labor practice acts and a collective bargaining
agreement be entered into. ALU established picket lines in the SUGECO plant in Mandaue,
and subsequently at the house of its general manager and at the store of the Cebu Home and
Industrial Supply, which is engaged in the marketing of SUGECOs products. In this case, Cebu
Home contends that no employee-employer relationship exists and no labor dispute
between ALU members and Cebu Home.
Issue:
Can the distributor of company products be validly involved in a picketing organized
by the employees of its manufacturer?
Ruling:
Yes. According to the Court, within the limits of peaceful picketing, however, picketing
may be carried on not only against the manufacturer but also against a non-union products
sold by one in unity of interest with the manufacturer who is in the same business for profit.
As distributor of SUGECO products, the Cebu Home has, at least, an indirect interest
in the labor dispute between SUGECO and ALU.

MARAO, REBBEKAH GRACE G. Block B

LABOR LAW II: LABOR RELATIONS


CASE DIGESTS
Types of employees for purposes of labor relations
Philtranco Service Enterprises vs. BLR and KASAMA KO
G.R. No. 85343, June 28, 1989
Facts:
The Kapisanan ng mga Kawani, Assistant, Manggagawa at Konpidensyal sa Philtranco
(KASAMA KO) filed a petition for certification election for representation in the bargaining
unit. It alleges that there exists substantial differences in the terms and conditions between
the professional, technical, administrative and confidential employees, and the rank-and-file
employees already included in a bargaining unit within Philtranco.
Issue:

Should professional, technical, administrative and confidential employees be entitled


to form a separate union from the rank-and-file employees in a company?
Ruling:
No. The Labor Code recognizes two principal groups of employees, namely, the
managerial and the rank-and-file groups. The IRR did away with existing supervisors unions
classifying the members either as managerial or rank-and-file employees depending on the
work they perform. If they discharge managerial functions, supervisors are prohibited from
forming or joining any labor organization. If they do not perform managerial work, they may
join the rank-and-file union and if none exists, they may form one such rank-and-file
organization.
It, therefore, follows that the members of the KASAMA KO who are professional,
technical, administrative and confidential personnel of Philtranco performing managerial
functions are not qualified to join, much less form a union. This rationalizes the exclusion of
managers and confidential employees exercising managerial functions from the ambit of the
collective bargaining unit.

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LABOR LAW II: LABOR RELATIONS


CASE DIGESTS
Types of employees for purposes of labor relations
Franklin Baker Company vs. Trajano
G.R. No. 75039, January 28, 1988
Facts:
Franklin Baker Brotherhood Association, a labor union organized by inspectors,
foremen and supervisors of Franklin Baker Company filed a petition for certification
election. It alleges that the 90 regular technical and office employees compose a group
separate and distinct from the rank-and-file employees currently included in the coverage of
the existing collective bargaining agreement. The company did not object to the holding of
election, but manifested that 74 out the 90 employees are managerial employees, and
another two are confidential employees; hence, they must be excluded from the certification
election. The company posits that the employees mentioned are managerial because they
exercise the power to hire, suspend, or dismiss other employees.
Issue:

Can employees exercising the power to hire, suspend, or dismiss other employees
subject to a review be considered managerial employees for the purpose of inclusion in the
bargaining unit of the company?
Ruling:
No. The test of supervisory or managerial status depends on whether a person
possesses authority to act in the interest of his employer as specified by the Labor Code and
its IRR, and whether such authority is not merely routinary or clerical in nature, but requires
the use of independent judgment. Where such recommendatory powers are subject to
evaluation, review, and final action of department heads and other higher executives, the
same, although present, are not effective and not an exercise of independent judgment as
required by law.
It was shown that the aforementioned employees are exercising the power to hire.
However, in the performance of their functions and duties and in the exercise of
recommendatory powers, subject employees may only recommend, as the ultimate power
to hire, fire or suspend, rests upon the plant personnel manager. Hence, the Court did not
consider them as managerial employees.

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LABOR LAW II: LABOR RELATIONS


CASE DIGESTS
Types of employees for purposes of labor relations
Bulletin Publishing Corp. vs. Sanchez
G.R. No. 74425, October 7, 1986
Facts:
A labor union among the rank-and-file employees named as Bulletin Employees
Union has already been existing in Bulletin Publishing Corporation and has administered the
current collective bargaining agreement for several years. This has been the only bargaining
unit in the company, and the supervisory employees were never included and had never
sought for inclusion in the union. Later on, 25 out of 48 supervisors in the company formed
their own union, named as Bulletin Publishing Corporation Supervisors Union, but the
company refused recognition of such union and sought for its registration cancellation.
Issue:
Can supervisors in a company may, for purposes of collective bargaining, form a union
separate and distinct from the existing union organized by the rank-and-file employees of
the same company?
Ruling:
No. As provided by the Labor Code, managerial employees are explicitly excluded
from the right to self-organization, the right to form, join, and assist labor unions. The
rationale for the inhibition has been stated to be, because if these managerial employees
would belong to or be affiliated with a union, the latter might not be assured of their loyalty
to the Union in view of evident conflict of interests. The Union can also become companydominated with the presence of managerial employees in the Union membership.

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LABOR LAW II: LABOR RELATIONS


CASE DIGESTS
Employer-employee relationship
Compaia Maritima vs. Cabagnot
G.R. No. L-10675, April 29, 1960
Facts:
Compaia Maritima contracted with Pablo Velez Special Watchmens Agency for the
security of the officers of the company who did not join then ongoing strike. Dionisio Hio was
among those detailed in the company, and he was assigned in the night shift duty as
gangwayman of M/V Basilan. One night, the Chief Engineer picked up Dionisio and others
and all proceeded to the formers house for several drinking rounds. Afterwards, they left
said house and proceeded with their posts the following morning. Hours later, they found
the body of Dionisio floating near his post. The deceaseds survivors claim for compensation,
but the company questions the claims for it denied having employer-employee relations with
the deceased. It contends that the deceased was a casual employee whose services were
engaged only for the duration of the strike and is therefore not entitled to compensation.
Issue:
Can an employer validly deny the existence of an employer-employee relationship, in
disclaiming liability, with a casual employee whose services were engaged temporarily, that
is, only for a duration of a strike in the company?
Ruling:
No. According to the Court, the casual service that the law speaks of must be
construed, interpreted and concluded by the circumstance of whether or not the aforesaid
service is related with the occupation of business of the employer. The law states that for an
employee to be excluded from the term laborer or employee under the Workmans
Compensation Act, his employment must be purely casual and is not for the purpose of the
occupation or business of the employer.
In the case at bar, the Court had reason to believe that the work of the deceased in the
case at bar was in connection with the business of petitioner. It has been shown that it was
not only during the strike that the Compaia Maritima needed the services of watchmen. In
fact, it admitted having its own permanently employed watchmen doing the same duties as
that of the deceased. The duties referred to must be that of giving security not only to the
cargo of the vessel but also to the lives of its officers and crew, and they are, undoubtedly, in
connection with the business of the petitioner. Without security, any shipping company
could not possibly go on with its maritime business.

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LABOR LAW II: LABOR RELATIONS


CASE DIGESTS
Determination of existence of employer-employee relationship
Viaa vs. Al-Lagadan and Piga
GR No. L-8967, May 31, 1956
Facts:
Anastacio Viaa owned a fishing sailboat which sunk as a consequence of a collision
with a vessel of the US Navy. Alejandro Al-Lagadan, a crew of the vessel, disappeared with
the vessel. His parents claimed for compensation with Viaa. The latter denied such claims,
contending that the deceased, at the time of his death, was his industrial partner, not his
employee. The referee of the WCC asked a lawyer to look into the method of engaging the
service of crewmen for sailboats then prevailing, and the lawyer reported that the basis was
a contract between the owner and the patron. The hiring of the crew is done by the patron.
When a patron enters into a contract with the owner of the vessel, he has a crew ready with
him. As compensation, a share basis between the owner and the patron and crew follows,
that is, one-half goes to the owner and the other half is divided among the patron and the
crew members. It was contended by the Referee that Al-Lagadan was an employee, the mere
fact that his share as a patron could be reckoned in terms of money. However, Viaa claims
that the deceased is a partner, because the latter shared in the profits, not in the losses.
Issue:
Can the owner of a vessel deny the existence of employer-employee relationship with
the patron, in disclaiming compensation liability, in view of the sharing method of profits of
a voyage alleged as not partaking the nature of wages?
Ruling:
No. According to the Court, in determining the existence of employer-employee
relationship, the following elements are generally considered, namely: (1) the selection and
engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4)
the power to control the employees conduct although the latter is the most important
element.
Assuming that the share received by the deceased could partake of the nature of
wages on which the Court need not, and do not, express our view and that the second
element, therefore, exists in the case at bar, the record does not contain any specific data
regarding the third and fourth elements. In this case, the Court did not actually decide on the
status of the deceased employee, but merely remanded the case to the WCC in finding
whether the elements laid down exist.

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LABOR LAW II: LABOR RELATIONS


CASE DIGESTS
Determination of existence of employer-employee relationship
De Los Reyes vs. Espineli
GR No. L-28280-81, November 28, 1969
Facts:
Geronimo de los Reyes owns a coconut plantation in Laguna. His katiwala Gonzalo
Belarmino took into the land the several respondents to cultivate the land under an
agreement that they were to receive 1/7 portion of every coconut harvest. After some time,
de los Reyes dismissed Belarmino upon the suspicion that the latter had been deceiving
him in connivance with the respondents. The respondents filed petitions with the Court of
Agrarian Relations seeking the delivery of the difference between the 1/7 share which they
have been given and the 30% share to which they, as tenants, were allegedly entitled.

MARAO, REBBEKAH GRACE G. Block B

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LABOR LAW II: LABOR RELATIONS


CASE DIGESTS
Powers and jurisdiction of the NLRC
Hawaiian-Philippine Company vs. Gulmatico
GR No. 106231, November 16, 1994
Facts:

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LABOR LAW II: LABOR RELATIONS


CASE DIGESTS
Powers and jurisdiction of NLRC
San Miguel Corporation vs. NLRC
GR No. 80774, May 31, 1988
Facts:
In line with an Innovation Program sponsored by petitioner San Miguel Corporation
and under which management undertook to grant cash awards to "all SMC employees ...
except ED-HO staff, Division Managers and higher-ranked personnel" who submit to the
Corporation Ideas and suggestions found to be beneficial to the Corporation, Rustico Vega
submitted an innovation proposal. SMC did not find the proposal acceptable, and
consequently refused Mr. Vegas demands for a cash award. Vega then filed a complaint with
the Minister of Labor, alleging that his proposal was accepted by the methods analyst and
was implemented by the company. SMC alleged that the Labor Arbiter had no jurisdiction
over the case, for Vega had bypassed the grievance proceedings as stipulated in the CBA. The
Labor Arbiter dismissed the complaint for lack of jurisdiction, since the money claim is not a
necessary incident of Vegas employment.
Issue:

Can a claim for a cash award pursuant to an innovation program implemented by a


company be considered as a money claim arising from employer-employee relationship,
therefore within the jurisdiction of the Labor Arbiter and the NLRC?
Ruling:
No. While paragraph 3 of Article 217 (Jurisdiction of Labor Arbiters and the
Commission) of the Labor Code refers to "all money claims of workers," it is not necessary to
suppose that the entire universe of money claims that might be asserted by workers against
their employers has been absorbed into the original and exclusive jurisdiction of Labor
Arbiters. Money claims of workers which now fall within the original and exclusive
jurisdiction of Labor Arbiters are those money claims which have some reasonable causal
connection with the employer-employee relationship. Applying the foregoing reading to the
present case, we note that SMC's Innovation Program is an employee incentive scheme
offered and open only to employees of petitioner Corporation, more specifically to
employees below the rank of manager. However, in deciding that such claim is not within the
jurisdiction of the NLRC, the Court stated that where the claim to the principal relief sought
is to be resolved not by reference to the Labor Code or other labor relations statute or a
collective bargaining agreement but by the general civil law, the jurisdiction over the dispute
belongs to the regular courts of justice and not to the Labor Arbiter and the NLRC. In such
situations, resolution of the dispute requires expertise, not in labor management relations
nor in wage structures and other terms and conditions of employment, but rather in the
application of the general civil law.

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LABOR LAW II: LABOR RELATIONS


CASE DIGESTS
Rules of procedure of the NLRC
Montoya vs. Escayo, et.al
GR No. 82211-12, March 21, 1989
Facts:
The respondents in this case were salesgirls in the store of Teresita Montoya. They
filed complaints for money claims for alleged unpaid statutory benefits with the Labor
Arbiter. Montoya moved for the dismissal of the complaints, alleging that the respondents
failed to refer the dispute to the Lupong Tagapamayapa for possible settlement and to secure
the Certification to File Action, in pursuance of the Katarungang Pambarangay Law.
Issue:

Should the Katarungang Pambarangay Law be applied to labor disputes?

Ruling:
No. According to the Court, the provisions of P.D. No. 1508 requiring the submission
of disputes before the barangay Lupong Tagapayapa prior to their filing with the court or
other government offices are not applicable to labor cases. The decree was intended to be
applicable only to courts of justice, and not to labor relations commissions or labor
arbitrators' offices. The express reference to "judicial resources", to "courts of justice", "court
dockets", or simply to "courts" are significant. There is no mention at all of labor relations or
controversies and labor arbiters or commissions in the clauses involved. The term other
government offices cannot be construed to include the Office of the Labor Arbiter and the
Med-Arbiter, for it refers only to such offices as the Fiscal's Office or, in localities where there
is no fiscal, the Municipal Trial Courts. Requiring conciliation of labor disputes before the
barangay courts would defeat the very salutary purposes of the law. Instead of simplifying
labor proceedings designed at expeditious settlement or referral to the proper court or office
to decide it finally, the position taken by the petitioner would only duplicate the conciliation
proceedings and unduly delay the disposition of the labor case.

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LABOR LAW II: LABOR RELATIONS


CASE DIGESTS
Voluntary arbitration
Auxilio, Jr. vs. NLRC
GR No. 82189, August 2, 1990
Facts:
Porfirio Auxilio, Jr. was dismissed by the Baguio Country Club upon the loss of an
amount of money which had been placed in the cashiers office. The employees were
subjected to a polygraph examination, and only Auxilio was found out to have offered no
satisfactory explanation for the adverse result of the polygraph test, as against the others
who showed no indications of deception. Auxilio was asked by the management to appear
for investigation for several times, but he never appeared. His dismissal was meted out by
the company, on the ground of loss of trust and confidence. Auxilio filed a complaint for
illegal dismissal, alleging he was dismissed without due process of law because the
grievance procedure was not observed.
Issue:

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LABOR LAW II: LABOR RELATIONS


CASE DIGESTS
Jurisdiction of Labor Arbiters and NLRC over labor disputes
AGUSAN DEL NORTE ELECTRIC COOPERATIVE, INC. vs. VAILOCES, et.al
G.R. No. L-60716, October 27, 1983
Facts:
Perlita Jongko filed with the CFI a petition for prohibition and mandamus, with a
prayer for reinstatement with back salary, against Agusan del Norte Electric Cooperative
(ANECO) and its officers after her alleged illegal dismissal from said electric cooperative. The
defendants filed a motion to dismiss, alleging lack of jurisdiction over the subject matter of
the action. This motion was subsequently denied by the CFI and did not reconsider the same.
Defendants then filed this instant petition for certiorari assailing the denial of the motion to
dismiss, on the ground that ordinary courts have no jurisdiction over illegal dismissal cases
which have been assigned by law exclusively to labor arbiters. On the same date that the
instant petition was filed, Jongko also filed with the court a quo an amended petition seeking
not only reinstatement with back salary but also moral and exemplary damages.
Issue:
Does the labor arbiters and the NLRCs jurisdiction over money claims of workers
include claims for moral and exemplary damages of a dismissed employee against his
employer?
Ruling:
YES. According to the Court, PD 1691, which also amended the Labor Code, deleted
the ban against labor arbiters taking cognizance of claims for damages. This amendment had
the effect of restoring the jurisdiction of labor arbiters over said claims under their broad
and exclusive authority to hear and decide all money claims of workers, including those
based on non-payment . . . of wages . . . and other benefits provided by law . . . The provisions
that the Labor Arbiters and the NLRC have jurisdiction over all money claims of workers
are comprehensive enough to include claims for moral and exemplary damages of a
dismissed employee against his employer.
Thus, when the CFI denied the motion to dismiss, it resolved to take cognizance over
the case, on which it had no jurisdiction. Hence, this petition was granted.

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CASE DIGESTS
Jurisdiction of Labor Arbiters and NLRC over labor disputes
BASAYA, JR. et.al. vs MILITANTE
G.R No. L-75837, December 11, 1987
Facts:
The petitioners in this case are the captain and the crew of the fishing vessel of
charterer Philippine TUNA Venturers, Inc. TUNA Inc. transferred the operations of the said
vessel to its sister company Eastship Fishing Corporation. The petitioners, having presented
several labor demands to the management of TUNA Inc., informed Eastship that they would
not move the vessel to any destination until their demands are met. With this, Eastship filed
a case with the NLRC to declare the employees strike illegal. TUNA Inc. also filed with the
RTC a replevin case to recover possession of the vessel. Judgment in the replevin case was
rendered in favor of TUNA Inc., declaring it to have a better right over the possession of the
vessel. Months after the said judgment was rendered, the NLRC issued an Injunction order
enjoining petitioners from blocking the free ingress and egress to the Vessel and seven (7)
other fishing boats and to disembark from and vacate the Vessel without prejudice to the
exercise of their right to lawful and peaceful picketing. Petitioners filed this petition for
review on certiorari, challenge the assumption of jurisdiction of the RTC over the replevin
case upon the allegation that it is intertwined with a labor dispute so that exclusive
jurisdiction belongs to the NLRC.
Issue:

Is a replevin case filed by a charterer against the crew holding possession of a vessel,
due to unheeded labor demands, intertwined with the crews complaint for unfair labor
practices?
Ruling:
NO. According to the Court, the labor dispute involved is not intertwined with the
issue in the Replevin Case. Replevin is a possessory action, the gist of which is the right of
possession in the plaintiff. The primary relief sought therein is the return of the property in
specie wrongfully detained by another person. With respect to the other issue, the NLRC in
the case before it had issued an Injunctive Writ, this aspect of the controversy, and the crews
right to picket, is properly settled under the Labor Code. The respective issues raised in the
RTC and the NLRC can be resolved independently of the other. The Court is not sanctioning
split jurisdiction but defining avenues of jurisdiction as laid down by pertinent laws.
Hence, this petition for review was denied, affirming the RTCs decision on the
replevin case.

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CASE DIGESTS
Jurisdiction of Labor Arbiters; Concurrent jurisdiction with DOLE Regional Director
BROKENSHIRE MEMORIAL HOSPITAL vs. MINISTER OF LABOR, et.al
G.R. No. 74621, February 7, 1990
Facts:
Brokenshire Memorial Hospital Employees and Workers Union-FFW filed with the
Regional Office of MOLE (now DOLE) against Brokenshire Memorial Hospital for noncompliance with Wage Order No. 5. The claims of the employees were paid directly by the
hospital, thus lifting the levy and garnishment to the latters properties. Still, the hospital
failed to comply with said wage order, and the new Wage Order No. 6, prompting the union
to file another complaint, this instant case. The hospital, in its answer, alleged lack of
jurisdiction over the case by the Regional Director, because said claims are allegedly in the
original and exclusive jurisdiction of the Labor Arbiter. The latter, in rendering a favorable
decision to the union, said that the hospital is estopped from questioning the jurisdiction
because the appearance in the hearing is in itself a submission to the jurisdiction of the
Regional Director.
Issue:

Does the Regional Director have jurisdiction over money claims of workers
concurrent with the Labor Arbiter?
Ruling:
Yes, provided that the requisites of the law, due to the Labor Codes amendment by
RA 6715, be present, namely: 1) that the claim is presented by an employee or person
employed in domestic or household service, or househelper under the code; 2) that the
claimant, no longer being employed, does not seek reinstatement; and 3) that the aggregate
money claim of the employee or househelper does not exceed five thousand pesos
(P5,000.00). In the absence of these requisites, the Labor Arbiter has exclusive original
jurisdiction over all claims arising from employer-employee relations, other than those
claims for employees compensation, social security, medicare, and maternity benefits. As
explained by then Justice Narvasa, in the resolution, of any question of jurisdiction over a
money claim arising from employer-employee relations, the first inquiry should be into
whether the employment relation does indeed still exist between the claimant and the
respondent. If the relation no longer exists, and the claimant does not seek reinstatement, the
case is cognizable by the Labor Arbiter, not by the Regional Director. On the other hand, if
the employment relation still exists, or reinstatement is sought, the next inquiry should be
into the amount involved. If the amount involved does not exceed P5,000.00, the Regional
Director undeniably has jurisdiction. But even if the amount of the claim exceeds P5,000.00,
the claim is not on that account necessary removed from the Regional Director's competence.

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LABOR LAW II: LABOR RELATIONS


CASE DIGESTS
Jurisdiction of Labor Arbiters does not cover intra-corporate disputes
DY vs. NLRC
G.R. No. L-68544, October 27, 1986
Facts:
Private Respondent Carlito H. Vailoces was the manager of the Rural Bank of Ayungon
and also a director and stockholder of the bank. A special stockholders meeting was called
for the purpose of electing the members of the banks Board of Directors. Lorenzo Dy was
elected president, but Vailoces was not re-elected as bank manager. Vailoces filed a
complaint for illegal dismissal and damages with the Ministry of Labor and Employment
against Lorenzo Dy asserting that Dy, after obtaining control of the majority stock of the
bank, called an illegal stockholders meeting and elected a Board of Directors controlled by
him; and that he was illegally dismissed as manager, without giving him the opportunity to
be heard first. Dy denied the charge of illegal dismissal and pointed out that Vailoces position
was an elective one, and he was not re-elected as bank manager because of the Boards loss
of confidence in him brought about by his absenteeism and negligence in the performance of
his duties.
Issue:

Does the jurisdiction of Labor Arbiters on labor disputes cover complaints of an


alleged illegal dismissal of a stockholder not re-elected in the Board of Directors of a
corporation?
Ruling:
No. Such case is an intra-corporate controversy which should be under the original
and exclusive jurisdiction of the Securities and Exchange Commission. This case falls under
controversies in the election or appointments of directors, trustees, officers or managers of
such corporations, partnerships or associations.
In this case, it shows that the controversy between the parties is intra-corporate in
nature because it revolves around the election of directors, officers or managers of the Rural
Bank of Ayungon, the relation between and among its stockholders, and between them and
the corporation. It is well settled that the decision of a tribunal not vested with appropriate
jurisdiction is null and void. Therefore, the judgment of the Labor Arbiter and the NLRC are
void for lack of jurisdiction.

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LABOR LAW II: LABOR RELATIONS


CASE DIGESTS
Jurisdiction of Labor Arbiters does not cover intra-corporate disputes
FORTUNE CEMENT CORPORATION vs. NLRC
G.R. No. 79762, January 24, 1991
Facts:
Lagdameo is a registered stockholder of FCC, was elected Executive Vice-President of
the Board. Some eight years laterduring a regular meeting, the FCC Board resolved that all of
its incumbent corporate officers, including Lagdameo, would be "deemed" retained in their
respective positions without necessity of yearly reappointments, unless they resigned or
were terminated by the Board. At subsequent regular meetings, the FCC Board approved
and adopted a resolution dismissing Lagdameo as Executive Vice-President of the company,
effective immediately, for loss of trust and confidence. Lagdameo filed with the NLRC a
complaint for illegal dismissal against FCC alleging that his dismissal was done without a
formal hearing and investigation and, therefore, without due process. FCC moved to dismiss
Lagdameo's complaint on the ground that his dismiss as a corporate officer is a purely intracorporate controversy over which the Securities and Exchange Commission has original and
exclusive jurisdiction.
Issue:

Does the NLRC have jurisdiction over a complaint filed by a corporate executive vicepresident for illegal dismissal, resulting from a board resolution dismissing him as such
officer?
Ruling:
No. Section 5 of Presidential Decree No. 902-A vests in the SEC original and exclusive
jurisdiction over controversies in the election or appointments of directors, trustees, officers
or managers of such corporations, partnership or associations. As pointed out by the
Solicitor General, the election, appointment and/or removal of an executive vice-president
is a prerogative vested upon a corporate board. A corporate officer's dismissal is always a
corporate act and/or intra-corporate controversy and that nature is not altered by the
reason or wisdom which the Board of Directors may have in taking such action. 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.

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LABOR LAW II: LABOR RELATIONS


CASE DIGESTS
CIR has jurisdiction over labor disputes and all incidental matters connected
GOODRICH EMPLOYEES ASSOCIATION vs. NLRC
G.R. No. L-30211, October 5, 1976
Facts:
Goodrich Employees Association was held liable for civil damages, arising from its
strike against employer BF Goodrich Philippines, Inc., by the Court of First Instance. The
question on the jurisdiction of the CFI over the civil suit for damages, via motion to dismiss,
was questioned by the petitioner union, alleging that the Court of Industrial Relations still
has jurisdiction over the suit for damages, being an incident of a labor dispute. The CFI
denied the motion to dismiss, and eventually ruled the damage suit in favor of the employer.
Issue:

Do the regular courts have jurisdiction over civil cases for damages arising from a
labor dispute?
Ruling:
No. As pronounced by the Court in several cases, a CFI is devoid of jurisdiction on
matters appropriately for the CIR. The right to damages would still depend on the evidence
in the unfair labor practice case in the CIR. To hold otherwise is to sanction split jurisdiction,
which is not according to the orderly administration of justice. Where the subject matter is
within the competence of the CIR, it must be deemed to have jurisdiction of all incidental
matters connected with the main issue.

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LABOR LAW II: LABOR RELATIONS


CASE DIGESTS
International organizations can invoke immunity from coverage of labor laws
INTERNATIONAL CATHOLIC MIGRATION COMMISSION vs. CALLEJA
G.R. No. 85750, September 28, 1990
(consolidated case)
Facts:

In this consolidated case, International Catholic Migration Commission (ICMC) and


International Rice Research Institute (IRRI) invoke immunity from suit pursuant to the
Memorandum of Agreement with the Philippine Government and PD 1620, respectively. In
both cases, the labor unions involved filed separate petitions for certification election.
Issue:

Can the grant of diplomatic privileges and immunities to international organizations


extend to immunity from the application of Philippine labor laws?
Ruling:
Yes. According to the Court, the objective of this grant of diplomatic privileges and
immunities to international organizations is to avoid the danger of partiality and
interference by the host country in their internal workings. The exercise of jurisdiction by
the Department of Labor in these instances would defeat the very purpose of immunity,
which is to shield the affairs of international organizations, in accordance with international
practice, from political pressure or control by the host country to the prejudice of member
States of the organization, and to ensure the unhampered performance of their functions. It
is inaccurate to state that a certification election is beyond the scope of that immunity for the
reason that it is not a suit. A certification election cannot be viewed as an independent or
isolated process. It could trigger off a series of events in the collective bargaining process
together with related incidents and/or concerted activities, which could inevitably involve
the international organization in the "legal process," which includes "any penal, civil and
administrative proceedings." The eventuality of Court litigation is neither remote and from
which international organizations are precisely shielded to safeguard them from the
disruption of their functions. Clauses on jurisdictional immunity are said to be standard
provisions in the constitutions of international Organizations.

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LABOR LAW II: LABOR RELATIONS


CASE DIGESTS
Government agencies can invoke immunity from coverage of labor laws
JUSMAG vs. NLRC
G.R. No. 108813, December 15, 1994
Facts:
Florencio Sacramento was employed with the Joint United States Military Assistance
Group to the Republic of the Philippines (JUSMAG-Philippines) as one of the latters seventyfour security assistance support personnel (SASP). According to the Memorandum of
Agreement, the Armed Forces of the Philippines shall appoint the SASP, and that for the
period of time that there is an exceptional funding agreement between the government of
the Philippines and the United States Government (USG), JUSMAG will pay the total payroll
costs for the SASP employees. Florencio filed a complaint for illegal dismissal with the DOLE
against JUSMAG. The latter invoked immunity from suit as an agency of the United States
government.
Issue:

Can a government agency, in the exercise of governmental functions, invoke


immunity against suits involving labor disputes?
Ruling:
Yes. According to the Court, the application of the doctrine of state immunity depends
on the legal nature of the act. The application of the doctrine of immunity from suit has been
restricted to sovereign or governmental activities (jure imperii) and cannot be extended to
commercial, private and proprietary acts (jure gestionis). Since a governmental function
was involved it was held that the United States was not deemed to have waived its immunity
from suit.
The Court said that the MoA entered into, whereby JUSMAG took the services of
private respondent, was in performance of a governmental function on behalf of the United
States pursuant to the Military Assistance Agreement. The suit was, in effect, one against the
United States Government, albeit it was not impleaded in the complaint. Considering that the
United States has not waived or consented to the suit, the complaint against JUSMAG cannot
not prosper. In this jurisdiction, we recognize and adopt the generally accepted principles of
international law as part of the law of the land. Immunity of State from suit is one of these
universally recognized principles. In international law, "immunity" is commonly understood
as an exemption of the state and its organs from the judicial jurisdiction of another state.
This is anchored on the principle of the sovereign equality of states under which one state
cannot assert jurisdiction over another in violation of the maxim par in parem non habet
imperium (an equal has no power over an equal).

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LABOR LAW II: LABOR RELATIONS


CASE DIGESTS
Jurisdiction of Labor Arbiters does not cover intra-corporate disputes, even if coupled with
labor standards claims
LOZON vs. NLRC
G.R. No. 107660, January 2, 1995
Facts:

Ramon Lozon, was a Senior Vice-President-Finance of Private respondent Philippine


Airlines, Inc. (PAL), when his services were terminated in the aftermath of the "two-billionpeso PALscam." Lozon, together with two high-ranking PAL officials, was charged
administratively by another corporate officer of PAL. For loss of confidence and for acts
inimical to PALs interest, PAL considered him resigned from service. Lozon filed a complaint
for illegal dismissal and claims for statutory and fringe benefits, plus damages. PAL, on
appeal with the NLRC, contends that the labor arbiter has no jurisdiction over the case,
because it is an intra-corporate controversy which must be within the jurisdiction of the
Securities and Exchange Commission. The NLRC, on this argument, dismissed Lozons case.
In this appeal, Lozon contends that his claim for vacation and sick leaves, 13th month pay,
Christmas bonus, medical expenses, car expenses, and other benefits, as well as for moral
damages and attorney's fees do not fall within SECs jurisdiction.
Issue:
Does the jurisdiction of the labor arbiters cover illegal dismissal of corporate officers
with claims for labor standard benefits and damages?
Ruling:
No. A corporate officer's dismissal is always a corporate act and/or intra-corporate
controversy and that nature is not altered by the reason or wisdom which the Board of
Directors may have in taking such action. The question of remuneration being asserted by
an officer of a 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. On the issue regarding claims for damages, while it
may be said that the same corporate acts also give rise to civil liability for damages, it does
not follow that the case is necessarily taken out of the jurisdiction of the SEC as it may award
damages which can be considered consequential in the exercise of its adjudicative powers.
Besides, incidental issues that properly fall within the authority of a tribunal may also be
considered by it to avoid multiplicity of actions. Consequently, in intra-corporate matters
such as those affecting the corporation, its directors, trustees, officers, shareholders, the
issue of consequential damages may just as well be resolved and adjudicated by the SEC.

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LABOR LAW II: LABOR RELATIONS


CASE DIGESTS
Labor arbiters have jurisdiction over claims for damages arising from picketing
NATIONAL FEDERATION OF LABOR vs. EISMA
G.R. No. L-61236, January 31, 1984
Facts:
The National Federation of Labor filed with the Ministry of Labor and Employment a
petition for direct certification as the sole exclusive collective bargaining representative of
the monthly paid employees of the Zamboanga Wood Products, Inc. (Zambowood) at its
manufacturing plant in Lumbayao, Zamboanga City. The employees, due to underpayment of
allowances, filed with the same Minister such claims. They also issued a notice of strike.
Zambowood filed with the CFI [now RTC] for damages for obstruction of private property
with prayer for preliminary injunction and/or restraining order. It was alleged that
defendants, now petitioners, blockaded the road leading to its manufacturing division, thus
preventing customers and suppliers free ingress to or egress from such premises.
Issue:

Does the RTC have jurisdiction over claims for damages of an employer arising from
a picketing that accompanied a strike by its employees?
Ruling:
No. It is a labor arbiter, not a court, which possesses original and exclusive jurisdiction
to decide a claim for damages arising from picketing or a strike. Article 217, Section 3 of the
Labor Code states that the labor arbiters have exclusive and original jurisdiction over all
money claims of workers, including those based on nonpayment or underpayment of wages,
overtime compensation, separation pay and other benefits provided by law or appropriate
agreement, except claims for employees' compensation, social security, medicare and
maternity benefits. Section 5 of the same article also provides that all other claims arising
from employer-employee relations, unless expressly excluded by the Code also belong to
such jurisdiction. Certainly, the present Labor Code is even more committed to the view that
on policy grounds, and equally so in the interest of greater promptness in the disposition of
labor matters, a court is spared the often onerous task of determining what essentially is a
factual matter, namely, the damages that may be incurred by either labor or management as
a result of disputes or controversies arising from employer-employee relations.

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LABOR LAW II: LABOR RELATIONS


CASE DIGESTS
Money claims of workers arising from Er-Ee relationship
SAN MIGUEL CORPORATION vs. NLRC
GR No. 80774, May 31, 1988
Facts:
In line with an Innovation Program sponsored by petitioner San Miguel Corporation
and under which management undertook to grant cash awards to "all SMC employees ...
except ED-HO staff, Division Managers and higher-ranked personnel" who submit to the
Corporation Ideas and suggestions found to be beneficial to the Corporation, Rustico Vega
submitted an innovation proposal. SMC did not find the proposal acceptable, and
consequently refused Mr. Vegas demands for a cash award. Vega then filed a complaint with
the Minister of Labor, alleging that his proposal was accepted by the methods analyst and
was implemented by the company. SMC alleged that the Labor Arbiter had no jurisdiction
over the case, for Vega had bypassed the grievance proceedings as stipulated in the CBA. The
Labor Arbiter dismissed the complaint for lack of jurisdiction, since the money claim is not a
necessary incident of Vegas employment.
Issue:

Can a claim for a cash award pursuant to an innovation program implemented by a


company be considered as a money claim arising from employer-employee relationship,
therefore within the jurisdiction of the Labor Arbiter and the NLRC?
Ruling:
No. While paragraph 3 of Article 217 (Jurisdiction of Labor Arbiters and the
Commission) of the Labor Code refers to "all money claims of workers," it is not necessary to
suppose that the entire universe of money claims that might be asserted by workers against
their employers has been absorbed into the original and exclusive jurisdiction of Labor
Arbiters. Money claims of workers which now fall within the original and exclusive
jurisdiction of Labor Arbiters are those money claims which have some reasonable causal
connection with the employer-employee relationship. Applying the foregoing reading to the
present case, we note that SMC's Innovation Program is an employee incentive scheme
offered and open only to employees of petitioner Corporation, more specifically to
employees below the rank of manager. However, in deciding that such claim is not within the
jurisdiction of the NLRC, the Court stated that where the claim to the principal relief sought
is to be resolved not by reference to the Labor Code or other labor relations statute or a
collective bargaining agreement but by the general civil law, the jurisdiction over the dispute
belongs to the regular courts of justice and not to the Labor Arbiter and the NLRC. In such
situations, resolution of the dispute requires expertise, not in labor management relations
nor in wage structures and other terms and conditions of employment, but rather in the
application of the general civil law.

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LABOR LAW II: LABOR RELATIONS


CASE DIGESTS
Money claims of workers arising from Er-Ee relationship

Facts:

PEPSI COLA BOTTLING CO. vs. MARTINEZ


G.R. No. L-58877, March 15, 1982

Abraham Tumala, Jr. averred that he was declared winner of the Lapu-Lapu Award
in the annual Sumakwel contest conducted by his employer Pepsi Cola Bottling Co. in 1979
as top salesman of that year. This award entitled him to a prize of house and lot. Pepsi Cola
refused to deliver him the prize allegedly due to fraudulent manipulations in his
performance as a salesman. His employment was also terminated. He filed this case with the
CFI, praying that the company deliver him the prize of house and lot or its cash equivalent.
He also prayed for the payment of back salaries and separation benefits, plus damages.
Tumala argues that this action was a civil controversy, hence, the CFI has jurisdiction over
his case. Pepsi Cola moved for the cases dismissal for the CFI has no jurisdiction.
Issue:

Does the CFI [now RTC] have jurisdiction over an employees claim of prize pursuant
to a contest conducted by his employer in relation to the formers work performance?
Ruling:
No. The Court said that the claim for the prize of house and lot unquestionably arose
from an employer-employee relationship. Therefore, this case falls within the coverage of
Article 217 of the Labor Code, which speaks of all other claims arising from employeremployee relations, unless expressly excluded by this Code. The Court explains that Tumala
would not have qualified for the said contest had he not been the employee of Pepsi Cola.
Also, the ground provided by the company in refusing to deliver the prize fraudulent
manipulations in Tumalas performance as a salesman involved an inquiry into his
actuations as employee. To hold that Tumala's claim for the prize should be passed upon by
the regular court of justice, independently and separately from his claim for back salaries,
retirement benefits and damages, would be to sanction split jurisdiction and multiplicity of
suits which are prejudicial to the orderly administration of justice.

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LABOR LAW II: LABOR RELATIONS


CASE DIGESTS
CFI, now RTC, has jurisdiction over injunctive reliefs sought for by a party arising from a labor
dispute
PHILIPPINE ASSOCIATION OF FREE LABOR UNIONS vs. SALAS
G.R. No. L-39084, February 23, 1988
Facts:

Philippine Association of Free Labor Unions (PAFLU) filed a complaint for unfair
labor practice with the Court of Industrial Relations (CIR) against Northwest Manufacturing
Corporation and a certain Gan Hun. The CIR ruled in favor of the union and issued a writ of
execution, levying the personal properties of Gan Hun. Wong King Yuen, however, filed a
complaint for recovery of his properties and damages with the Court of First Instance (CFI)
against the provincial sheriff, because the properties inside the apartment unit levied by the
provincial sheriff belong to him and not to Gan Hun. The union, in this civil case, sought for
intervention. They moved for the dismissal of this complaint for damages, saying that the CFI
had no jurisdiction over the case filed by the private respondent because the execution
relates to a labor dispute.
Issue:

Does the CFI have jurisdiction over a complaint for the recovery of property and
damages after an execution wrongfully levied by the sheriff, wherein the writ of execution
issued arose from a labor dispute?
Ruling:
Yes. The civil case is an ordinary civil action for damages, not a labor dispute. The case
is directed against the provincial sheriff and the recovery of damages is sought against the
bond provided for Section 17, Rule 39 of the Rules of Court governing execution and
satisfaction of judgments. Even if the act complained of by Wong King Yuen arose from a
labor dispute between the union and Gan Hun, the inevitable conclusion remains the same
there is no labor dispute between the union and Wong King Yuen. The civil case has no
direct bearing with the case filed with the industrial court and is distinct from the labor
dispute pending with the CIR.

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LABOR LAW II: LABOR RELATIONS


CASE DIGESTS
Jurisdiction over labor arbiters include claims for damages arising from illegal dismissal cases
PRIMERO vs. IAC
G.R. No. 72644, December 14, 1987
Facts:
Alfredo Primero filed a complaint with the Labor Arbiter against his employer DM
Transit for illegal dismissal, recovery of back wages, and reinstatement. This is due to his
termination from employment without being informed of the grounds and also for the
alleged malice and bad faith when DM Transit persuaded other firms not to employ him.
However, he withdrew his claims for back wages and reinstatement, with the end in view of
filing suit for damages in a civil court. The suit for damages was grounded on the on tortious
acts, breach of employment contract, and other consequent effects. The Labor Arbiter
rendered judgment in his favor and was entitled to separation pay. But the damage suit was
dismissed by the trial court for want of jurisdiction.
Issue:

Does the jurisdiction of Labor Arbiters include employee claims for damages arising
from illegal dismissal complaints?
Ruling:
Yes. At the time that Primero filed his complaints for illegal dismissal and recovery of
back wages, etc. with the Labor Arbiter, the latter possessed original and exclusive
jurisdiction also over claims for moral and other forms of damages; this, in virtue of Article
265 of the Labor Code, effective from May 1, 1974. In the proceedings before the Labor
Arbiter, Primero plainly had the right to plead and prosecute a claim not only for the reliefs
specified by the Labor Code itself for unlawful termination of employment, but also for moral
or other damages under the Civil Code arising from or connected with that termination of
employment. The legislative intent appears clear to allow recovery in proceedings before
Labor Arbiters of moral and other forms of damages, in all cases or matters arising from
employer-employee relations. An employee who has been illegally dismissed (i.e.,
discharged without just cause or being accorded due process), in such a manner as to cause
him to suffer moral damages (as determined by the Civil Code), has a cause of action for
reinstatement and recovery of back wages and damages. When he institutes proceedings
before the Labor Arbiter, he should make a claim for all said reliefs. He cannot, to be sure, be
permitted to prosecute his claims piecemeal. He cannot institute proceedings separately and
contemporaneously in a court of justice upon the same cause of action or a part thereof. He
cannot and should not be allowed to sue in two forums: one, before the Labor Arbiter for
reinstatement and recovery of back wages, or for separation pay, upon the theory that his
dismissal was illegal; and two, before a court of justice for recovery of moral and other
damages, upon the theory that the manner of his dismissal was unduly injurious, or tortious.

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LABOR LAW II: LABOR RELATIONS


CASE DIGESTS
Jurisdiction of Labor Arbiters and Regional Directors over money claims of workers
SERVANDOS INC., vs. SECRETARY OF LABOR
G.R. No. 85840, June 5, 1991
Facts:
This case is a motion for reconsideration filed by the Secretary of Labor and the
Regional Director Region VI on the decision of the Court setting aside their orders requiring
Servandos Inc. to pay salary differentials to its employees, after the Labor Standards and
Welfare Office conducted a routine inspection of Servando's establishment. The case was
declared by the Court to be within the exclusive jurisdiction of the Labor Arbiter, since the
aggregate claims of each of the fifty four (54) employees involved exceed the amount of
Php5,000.00. Respondents invoke the visitorial and enforcement power of the Secretary of
Labor under Art. 128(b) of the Labor Code which, according to them, is entirely separate and
distinct from the Regional Director's power to adjudicate simple money claims under Art.
129 of the same Code; and that Art. 217 (a) (6) of the Labor Code granting original and
exclusive jurisdiction to Labor Arbiters over all money claims arising from employeremployee relations involving an amount exceeding P5,000.00, whether or not accompanied
with a claim for reinstatement, should not be interpreted as an amendment to Art. 128(b),
i.e. as providing an additional exception to the visitorial and enforcement power of the
Secretary of Labor.
Issue:

Does the Labor Arbiter have exclusive and original jurisdiction over employees
money claims exceeding the aggregate amount of Php5,000.00?
Ruling:
Yes. According to the Court, this exclusive jurisdiction of the Labor Arbiter is
confirmed by the provisions of Article 129 which excludes from the jurisdiction of the
Regional Director or any hearing officer of the Department of Labor the power to hear and
decide claims of employees arising from employer-employee relations exceeding the amount
of Php5,000.00 for each employee. The inspection conducted by the Secretary of Labor,
through labor regulation officers or industrial safety engineers, may yield findings of
violations through labor standards under labor laws; the Secretary of Labor may order
compliance with said labor standards, if necessary, through appropriate writs of execution
but when the findings disclose an employee claim of over Php5,000.00, the matter should be
referred to the Labor Arbiter in recognition of his exclusive jurisdiction over such claims.

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Jurisdiction of the regular courts over claims for liquidated damages for breach of contractual
obligation and suretyship liabilities
SINGAPORE AIRLINES vs. HON. CRUZ-PANO
G.R. No. L-47739, June 22, 1983
Facts:

Carlos Cruz was offered employment as Engineer Officer of Singapore Airlines with
the opportunity to undergo a B-707 I conversion training course. In this offer, he was
required to enter into a bond with the airline company for a period of five years. Cruz
accepted the offer, and signed an agreement, stipulating among others that he shall agree to
remain in the service of the Company for a period of five years from the date of
commencement of such aforesaid conversion training if so required by the Company. In the
event he leaves the company within the period stated or he is dismissed for misconduct, he
and his surety shall be liable solidarily to pay liquidated sums as damages. Singapore Airlines
claimed that Cruz went on leave without its approval during the 2nd year, thus prompting
them to file a suit for damages. The trial court dismissed the suit, contending that the case
involves a money claim arising from an employer-employee relation or at the very least a
case arising from employer-employee relations, which under Art. 216 of the Labor Code is
vested exclusively with the Labor Arbiters of the National Labor Relations Commission.
Issue:

Does the trial court have jurisdiction over the employers claim for liquidated
damages, arising from an employees breach of its contractual obligation?
Ruling:
Yes. While seemingly petitioner's claim for damages arises from employer-employee
relations, and the latest amendment to Article 217 of the Labor Code provides that all other
claims arising from employer-employee relationship are cognizable by Labor Arbiters, in
essence, petitioner's claim for damages is grounded on the "wanton failure and refusal"
without just cause of private respondent Cruz to report for duty despite repeated notices
served upon him of the disapproval of his application for leave of absence without pay. The
complaint was anchored not on the abandonment per se by Cruz of his job as the latter was
not required in the Complaint to report back to work but on the manner and consequent
effects of such abandonment of work translated in terms of the damages which petitioner
had to suffer.
Singapore Airlines sought protection under the civil laws and claims no benefits
under the Labor Code. The primary relief sought is for liquidated damages for breach of a
contractual obligation. The other items demanded are not labor benefits demanded by
workers generally taken cognizance of in labor disputes, such as payment of wages, overtime
compensation or separation pay. The items claimed are the natural consequences flowing
from breach of an obligation, intrinsically a civil dispute.

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Technical rules of procedure not binding in labor cases
FEMs ELEGANCE LODGING HOUSE vs. MURILLO
G.R. Nos. 117442-43 January 11, 1995
Facts:
Private respondents are former employees of FEMs Elegance Lodging House of the
Saavedras. After the dismissal of these employees, they filed claims for unpaid benefits such
as minimum wage, overtime pay, rest day pay, holiday pay, full thirteenth-month pay and
separation pay. The reglementary period of 15 days from date of last conference lapsed,
without the private respondents filing their position papers. With this, petitioners filed a
motion to dismiss the claims for failure to file the position papers on time. Subsequently,
private respondents filed their position papers and was given due course by the Labor
Arbiter, but the petitioners filed a motion to expunge the said position papers. The Labor
Arbiter denied the motions, holding that a fifteen-day delay in filing the position paper was
not unreasonable considering that the substantive rights of litigants should not be sacrificed
by technicality, and citing Article 4 of the Labor Code (construction in favor of labor). In this
instant petition for certiorari under Rule 65, petitioners contend that there was grave abuse
of discretion by the Labor Arbiter in admitting the position papers filed after the
reglementary period provided by the NLRC Rules.
Issue:

Does the admission by the Labor Arbiter of position papers filed after the
reglementary period constitute grave abuse of discretion?
Ruling:
No. The delay of private respondents in the submission of their position paper is a
procedural flaw, and the admission thereof is within the discretion of the Labor Arbiter.
Well-settled is the rule that technical rules of procedure are not binding in labor cases, for
procedural lapses may be disregarded in the interest of substantial justice, particularly
where labor matters are concerned. As provided also by the NLRC Rules of Procedure, the
failure to submit a position paper on time is not one of the grounds for the dismissal of a
complaint in labor cases. It cannot therefore be invoked by petitioners to declare private
respondents as non-suited. This stance is in accord with Article 4 of the Labor Code of the
Philippines, which resolves that all doubts in the interpretation of the law and its
implementing rules and regulations shall be construed in favor of labor.

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Quantum of proof required in proceedings before the Labor Arbiter Substantial Evidence
GELMART INDUSTRIES (Phils.) vs. LEOGARDO
G.R. No. 70544, November 5, 1987
Facts:
The National Union of Garment, Textile Cordage and Allied Workers of the Philippine
(GATCORD) went on strike against GELMART Industries. Two return to work orders were
issued by the Ministry of Labor, the second one giving a 48-hour deadline; otherwise, the
employees may be dismissed. Deputy Minister Leogardo sustained the preventive
suspension issued by GELMART but certified the case for compulsory arbitration. The Labor
Arbiter, in his decision, granted the clearance for dismissal, but excluded those who did not
join the strike. Jenny Juanillo was not among those excluded, thus she filed for illegal
dismissal, contending that she could not have been one of those who joined the strike
because she was on vacation leave. Juanillo presented evidence of her letter application for
leave, but it was not shown that the said letter was duly received. The Minister of Labor, in
its decision, affirmed the findings of the Labor Arbiter that Juanillo is entitled to an
immediate reinstatement.
Issue:

Was the required proof of substantial evidence complied when an employee, in a


complaint for illegal dismissal, submits only a letter of application for leave without
proving its receipt by the employer?
Ruling:
No. As held by the Court, not only must there be some evidence to support a finding
or conclusion, but evidence must be substantial. Substantial evidence is more than a mere
scintilla. It means such relevant evidence as a reasonable mind might accept as adequate to
support a conclusion.
As the Court found out, the facts reveal that not only is there no substantial evidence
to support Juanillo's claim but also that the respondents' evidence to the contrary
contravenes it. Juanillo asserts that at the time of the strike she was on leave, to prove which
she presented a letter purportedly requesting on the day before the illegal strike began.
There is no proof that it was filed with or received by the company. Since Juanillo had
received notice of the termination in and as she claims she had made repeated
representation and demands for reinstatement, it is passing strange that her claim was not
ventilated in the compulsory arbitration proceeding conducted precisely on the issue of
termination of GATCORD members who had not complied with the return to work order. All
that was needed was to show that she had indeed not participated in the strike by presenting
her letter asking for leave. Instead she filed her case seven months after the decision had
become final and executory. By way of evidence all she presented was a self- serving
uncorroborated letter purportedly asking for leave, receipt of which was not proved. This
quantum of evidence fails the substantiality of evidence test to support a decision, a basic
requirement in administrative adjudication.
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Offer of reinstatement will not cure the defect of an arbitrary dismissal
RANARA vs. NLRC
G.R. No. 100969, August 14, 1992
Facts:
Carlo Ranara had been working as a driver with Oro Union Construction Supply. One
day, the secretary of Jimmy Tang Chang (owner/general manager) told him not to come back
the following day. Thinking that the secretary was only joking, Carlo reported for work, but
was surprised to find some other person already handling the vehicle previously assigned to
him. This made him realize that he was already separated from work. Carlo filed a complaint
for illegal dismissal, reinstatement, claims for unpaid benefits and damages. In his defense,
Chang said that he did not authorize the secretary to dismiss Carlo, and alleged that it was
Carlo who abandoned his work. During the hearing, Chang offered to re-employ Carlo, but
the latter refused. When the Labor Arbiter made his decision in favor of Chang, he contended
that the offer of reinstatement showed that there was no dismissal and that this
strengthened the defense of Carlos abandonment of work.
Issue:

Can the offer of reinstatement by an employer, during the hearing for an illegal
dismissal complaint, cure the defect of the employees dismissal without prior notice, cause,
or formal investigation (arbitrary dismissal)?
Ruling:
No. The Court doubted if Changs offer would have been made if Ranara had not
complained against him. At any rate, sincere or not, the offer of reinstatement could not
correct the earlier illegal dismissal of the petitioner. Chang incurred liability under the Labor
Code from the moment Carlo was illegally dismissed, and the liability did not abate as a result
of Chang's repentance.
The Court viewed Carlos refusal to be re-employed justified, as this was a case of
strained relations between the employer and the employee. Carlo would have found it
uncomfortable to continue working under the hostile eyes of the employer who had been
forced to reinstate him.

Note:
Article 221 [now 227], first paragraph:
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
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case speedily and objectively and without regard to technicalities of law or procedure, all in
the interest of due process

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Then CIR has jurisdiction over all incidents of labor disputes, including attorneys fees
AMALGAMATED LABORERS ASSOCIATION vs CIR
G.R. No. L-23467, March 27, 1968
Facts:
The employees of Binalbagan Sugar Central Company filed a case for ULP against its
employer. Upon finality of the case, Atty. Leonardo C. Fernandez, the employees chief
counsel on the case, filed a Notice of Attorneys Lien, and claimed the 25% attorney's fee so
contracted, being reasonable and proper taking into consideration the length of services he
rendered and the nature of the work actually performed by him. Another counsel for the
employees, Atty. Jose Ur. Carbonell, presented a document, the union board resolution
discharging Atty. Fernandez as the unions counsel. The CIR granted Fernandez notice of
attorneys lien. Atty. Carbonell and the Amalgamated Laborers Association filed this instant
case, contending that the a dispute arising from contracts for attorneys' fees is not a labor
dispute and is not one among the cases ruled to be within CIR's authority.
Issue:
Does the CIR have jurisdiction over contracts of attorneys fees incidental to a labor
dispute filed with it?
Ruling:
Yes. As the Court held, once the Court of Industrial Relations has acquired jurisdiction
over a case under the law of its creation, it retains that jurisdiction until the case is
completely decided, including all the incidents related thereto. A grant of jurisdiction implies
the necessary and usual incidental powers essential to effectuate it, and every regularly
constituted court has power to do all things reasonably necessary for the administration of
justice within the scope of its jurisdiction, and for the enforcement of its judgments and
mandates, even though the court may thus be called upon to decide matters which would not
be within its cognizance as original causes of action. To direct that the present dispute be
lodged in another court as petitioners advocate would only result in multiplicity of suits, a
situation abhorred by the rules. Thus it is, that usually the application to fix the attorneys'
fees is made before the court which renders the judgment. And, it has been observed that an
approved procedure, where a charging lien has attached to a judgment or where money has
been paid into court, is for the attorney to file an intervening petition and have the amount
and extent of his lien judicially determined.

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Attorneys fees limited only to 10% of the amount awarded by judgment
KAPISANAN NG MGA MANGGAGAWA SA MANILA RAILROAD CO. vs FAJARDO
G.R. No. L-33493, August 18, 1988
Facts:
Atty. Gregorio Fajardo represented the 400 of the members of union Kapisanan ng
mga Manggagawa sa Manila Railroad Company in a suit for the refund of the fees collected
from them monthly as gratuities of retired and/or deceased members alleged to be without
their consent and in violation of their constitution and by-laws. The union members were
granted a favorable decision. With this, Atty. Fajardo, as compensation for his legal services,
claims 25% of the refundable amount to the members. The union, however, opposed to said
amount, contending that Atty. Fajardo should claim only from the 400 membercomplainants, and not from the whole refundable amount. Atty. Fajardo, on the other hand,
contends that all members should pay his fees, because they would all benefit from the
decision. The CIR rendered a decision, saying that Atty. Fajardo is entitled to 25% of the
refundable amount as attorneys fees, said amount being fair and reasonable.
Issues:
1) Should all the members of a union be liable for attorneys fees for a suit it filed against
its union?
2) Is 25% of the judgment award representing attorneys fees a fair and reasonable
amount?
Rulings:
1) Yes. Lawyers who represent members of the Union to secure benefits for all the
employees, should be paid corresponding fees by all those favored or benefitted by
the award secured by them. There is no gainsaying Attorney Fajardo's right to be paid
reasonable fees by all the members of the union who benefitted from his services.
2) No, the Court held that 25% attorneys fees is excessive. Section 11, Rule VIII, Book III
of the Omnibus Rules Implementing the Labor Code fixes the attorney's fees in judicial
and administrative proceedings at 10% of the amount awarded. This is the same
percentage allowed by law to lawyers prosecuting workmen's compensation cases
that reach the appellate court. Moreover, considering the low economic status of their
clientele, the slice that labor lawyers should take from the avails of their clients' suit
should not be too large as to leave the latter with only a pittance for themselves.

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Stipulated attorneys fees, if iniquitous and unconscionable, can be reduced by the Court
RADIOWEALTH FINANCE CORP. vs INTERNATIONAL CORPORATE BANK
G.R. No. 77042-43, February 28, 1990
Facts:
Radiowealth, Inc. and Radiowealth Finance Company, Inc. applied for and obtained
credit facilities from Interbank. In the agreement, both parties stipulated that in the event a
case is filed connected to such credit obtained, the attorneys fees and other fees and costs
shall not be less than 10%of the amount involved in the suit. When the petitioners failed to
comply with their obligations, a case was filed against them, and the trial court ruled, among
others that the stipulated attorneys fees be reduced from 10% to 8%. In this petition, the
contention of petitioners that this Court may alter, modify or change even an admittedly valid
stipulation between the parties, hence the trial court erred in the reduction of such.
Issue:

Does the court have discretion to modify the attorney's fees previously agreed upon
by the parties under a valid contractual stipulation?
Ruling:
Yes, if by its determination the amount stipulated by the parties is unconscionable.
For the law recognizes the validity of stipulations included in documents such as negotiable
instruments and mortgages with respect to attorney's fees in the form of penalty provided
that they are not unreasonable or unconscionable. Attorney's fees provided in contracts as
recoverable against the other party and damages are not, strictly speaking, the attorney's
fees recoverable as between attorneys and client spoken of and regulated by the Rules of
Court. Rather, the attorney's fees here are in the nature of liquidated damages and the
stipulations therefor is aptly called a penal clause, So long as such stipulation does not
contravene law, morals, or public order, it is strictly binding upon the defendant

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NLRC may disregard the procedural lapse where there is an acceptable reason to excuse
tardiness in the taking of an appeal
CHONG GUAN TRADING vs NLRC
G.R. No. 81471, April 26, 1989
Facts:

Jose M. Chua was employed as a Sales Manager of Chong Guan Trading. On a certain
date, a customer accidentally dropped the telephone directory on the top-glass of the stores
showcase, causing it to break. Chua, in order to cover up for the customer, admitted that he
accidentally broke it. It was in this incident that Chua was allegedly dismissed by his
employer, and this prompted him to file a complaint. The Labor Arbiter decided he was not
illegally dismissed by the employer, but the NLRC reversed this decision. In this appeal, the
employer argues that there was a procedural lapse Chua appealed the decision of the Labor
Arbiter beyond the reglementary period of ten days thus the NLRC had no jurisdiction over
the complaint. Furthermore, while the employer concedes that Chua must be reinstated
since there was no intentional abandonment on the latters part, it challenges the order for
the payment of back wages and separation pay.
Issues:
1) Does the NLRC lose its jurisdiction to entertain an appeal filed after the reglementary
period of ten days, the decision having become final and executory after the lapse of
said period from the receipt of said decision?
2) Are the findings of fact of the NLRC always binding with the Courts?
3) Can the NLRC grant a decision to reinstate an employee and award the same with
back wages in a case of an alleged illegal dismissal found out to be a result of the
employees misinterpretation of facts?
Ruling:
1) No. Article 223 of the Labor Code provides for a reglementary period of ten (10) days
within which to appeal a decision of the labor arbiter to the NLRC. The ten-day period
has been interpreted by this Court as ten (10) "calendar" days and not ten (10)
"working" days. The perfection of an appeal in the manner and within the period
prescribed by law is not only mandatory but jurisdictional, and failure to perfect an
appeal has the effect of rendering the judgment final and executory. However, the
NLRC may disregard the procedural lapse where there is an acceptable reason to
excuse tardiness in the taking of an appeal.
2) No. While it is well-established that the findings of facts of the NLRC are entitled to
great respect and are generally binding on this Court, it will not uphold erroneous
conclusions of the NLRC when the Court finds that the latter committed grave abuse
of discretion in reversing the decision of the labor arbiter or when the findings of facts
from which the conclusions were based were not supported by substantial evidence.
3) No. The Court was convinced that there was no illegal dismissal, as Chua did not
return to his work after his heated argument with his employer and was also negated
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by the manifest intentions of the employer to reinstate Chua. Back wages, in general,
are granted on grounds of equity for earnings which a worker or employee has lost
due to his illegal dismissal from work. In this case, Chua's failure to work was due to
the misunderstanding between him and his employer.

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Although the law provides no appeal for NLRC decisions, the Courts may grant writs of
certiorari to nullify them if tainted with grave abuse of discretion
JOHN CLEMENTS CONSULTANTS, INC. vs NLRC
G.R. No. 72096, January 29, 1988
Facts:

Nestor Flores was a Managing Consultant of John Clements Consultants Inc. Due to an
infringement of standing company policy, JCCI directed a decrease in his salary to pay for his
indebtedness, but Flores expressed his desire to resign from the company. Flores was
directed to take a vacation leave, but it was noted that he rendered services for a rival firm.
After his leave, his resignation was accepted by the company, but he failed to tender the
required resignation letter. JCCI issued a memorandum announcing his resignation from the
company. However, Flore filed a complaint for illegal dismissal. While the proceedings went
on, he still rendered services for the same rival firm, and even succeeded in pirating one of
JCCIs clients. The Labor Arbiter dismissed the complaint. Fifteen days after receipt of the
notice of the decision, Flores appealed to the NLRC, which reversed the Labor Arbiters
decision.
Issues:
1) Does the NLRC have jurisdiction over appeals on Labor Arbiters decisions filed after
the lapse of the reglementary period of ten days from the receipt of the assailed
decision?
2) Can a writ of certiorari be granted against the decisions of NLRC tainted with grave
abuse of discretion?
Ruling:
1) Yes. In taking cognizance of Flores appeal, notwithstanding the recorded actuality
that it was filed 15 days after notice of the judgment sought to be appealed and
therefore beyond the 10-day period of appeal set by law, the NLRC had acted without
jurisdiction, in deliberate disregard of this Courts holding in the aforecited Vir-Jen
case that the ten-day period of appeal set out in Article 223 of the Labor Code, as
amended, meant calendar and not working days.
2) Yes. As the Solicitor General correctly points out, Flores appeal was indeed filed out
of time: and the facts clearly establish that Flores had not been illegally dismissed but
had in truth voluntarily resigned, his offer to resign being unconditional and
irrevocable, and Flores clearly had acted in bad faith: he deliberately withheld
submission of his written resignation in order to retain employment in JCCI while
"moonlighting" in a rival enterprise, contrary to JCCI company policy. This Court is
satisfied, after a thoroughgoing review of the record that the findings of fact of the
Labor Arbiter are warranted by the evidence, and the rejection and reversal thereof
by the NLRC was without justification, and was therefore whimsical and capricious.

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NLRC is not bound with the procedural rules prevailing in courts; Grant of separation pay
inconsistent with order of reinstatement
LOPEZ JR. vs NLRC
G.R. No. 109166, July 6, 1995
Facts:

Starting 1966, private respondent Dominador Amante worked as driver for Hacienda
Colisap managed by Hernan Lopez, Jr. Sometime in 1987, he transferred to Bea Agricultural
Corporation managed by Javier Lopez Tanjanco, a nephew of Hernan. Javier dismissed him
on April 25, 1990 and paid his separation pay. He worked again with Hacienda Colisap. His
work was, however, short-lived. He was also dismissed by Hernan without a valid reason on
July 5, 1990. Dominador filed a complaint for illegal dismissal against Hernan. Hernan
alleged that it was Bea Agricultural Corporation that terminated the employment of private
respondent. He likewise contended that he was abroad when private respondent was
dismissed and could not be responsible for the same. The Labor Arbiter dismissed the
complaint for lack of cause of action. The NLRC however reversed the decision, stating that
Dominador was a probationary employee and that he was also entitled to back wages and
separation pay based on pay rolls presented only during the time of appeal.
Issues:
1) Can evidence be admitted if presented for the first time on appeal with the NLRC?
2) Are probationary employees entitled to security of tenure?
3) Can separation pay be also granted even if the decision provides an order for
reinstatement?
Ruling:
1) Yes. Article 221 of the Labor Code 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." It further mandates the NLRC to 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. Technicality should not be
permitted to stand in the way of equitably and completely resolving the rights and
obligations of the parties.
2) Yes. Article 281 of the Labor Code states that The services of an employee who has
been engaged on a probationary basis may be terminated for a just cause It is true
that probationary employees do not enjoy permanent status but they can only be
removed from their work during their probationary period for a valid reason. As
probationary employees, they are likewise protected by the security of tenure
provision of the Constitution. Consequently, they cannot be removed from their
positions unless for cause.
No. Back wages and separation pay are distinct reliefs given to alleviate the economic
damage suffered by an illegally dismissed employee. Payment of back wages is
specifically designed to restore an employee's income that was lost because of his
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unjust dismissal. On the other hand, payment of separation pay is intended to provide
the employee money during the period in which he will be looking for another
employment. Considering the purpose behind the grant of separation pay, it was
grave abuse of discretion on the part of NLRC to order the payment of separation pay
as it is inconsistent with its ruling to reinstate Dominador.

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Perfection of an appeal to NLRC within ten (10) calendar days
NARAG vs NLRC
G.R. No. L-69628, October 28, 1987
Facts:
Pedro Narag was a security officer in one of Airborne Security Inc.s clients. As a result
of a request, he was relieved from said office and was detailed at the central headquarters of
his employer, not being given any assignment. When the time for the release of salary came,
the accounting department informed him that he has no salary to receive. He was told that
he was already laid off. Pedro filed a complaint for illegal dismissal. The Labor Arbiter ruled
that he was constructively dismissed by the employer. The latter appealed the case with the
NLRC, and reversed the Labor Arbiters decision. In this petition to review on certiorari,
Pedro contends that the NLRC had no jurisdiction over the appeal, it being filed one-day late
of the ten-day reglementary period.
Issue:

Does the NLRC lose its jurisdiction over an appeal filed one day late of the period
prescribed by law for its perfection?
Ruling:
Yes. The shortened period of ten (10) days fixed by Art. 223 of the Labor Code
contemplates calendar days and not working days. The purpose for providing this period is
that the law has commanded that labor cases be promptly, if not pretemporarily disposed of.
Long periods for any acts to be done by the contending parties can be taken advantage of
more by management than by labor. Most labor claims are decided in their favor and
management is generally the appellant. Delay in most instances gives the employers more
opportunity not only to prepare even ingenious defenses, what with well-paid talented
lawyers they can afford, but even to wear out the efforts and meager resources of the
workers, to the point that not infrequently the latter.

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Appeal to Secretary of Labor abolished by law; failure to file appeal bond warrants dismissal
ORIENTAL MINDORO ELECTRIC COOPERATIVE INC. vs NLRC
G.R. No. 111905, July 31, 1995
Facts:
Oscar Nitural was employed with ORMECOs Engineering Department. He was
subjected to several disciplinary actions. He was also habitually absent from work. He was
then subjected to an indefinite suspension. Nitural contends, however, that he was sick at
that time and even submitted a medical certificate. He alleged that his indefinite suspension
amounted to constructive dismissal, thus prompting him to file a complaint against ORMECO.
The Labor Arbiter found that Nitural was indeed illegally dismissed. The NLRC, on appeal of
ORMECO, dismissed the case for failure to file the required bond, but granted Niturals appeal
for reinstatement. ORMECO, aggrieved, appealed the NLRCs resolution to the Secretary of
Labor.
Issues:
1) Can the decisions of the NLRC be appealed with the Secretary of Labor?
2) Does the failure to file the appeal bond with the NLRC warrant the dismissal of the
case submitted to it?
Ruling:
1) No. Presidential Decree No. 1391 amended Article 223 and abolished appeals to the
Secretary of Labor "to insure speedy labor justice." Since petitioner's appeal to the
Secretary of Labor was not authorized in law, it did not toll or affect the period for
seeking relief from the decision and resolution of the NLRC through a petition for
certiorari.
2) Indeed, Article 223 of the Labor Code provides that In case of a judgment involving
a monetary award, an appeal by the employer may be perfected only upon the posting
of a cash or surety bond issued by a reputable bonding company duly accredited by
the Commission in the amount equivalent to the monetary award in the judgment
appealed from. The intention of the lawmakers to make the bond an indispensable
requisite for the perfection of an appeal by the employer is underscored by the
provision that an appeal by the employer may be perfected "only upon the posting of
a cash or surety bond." The word "only" makes it perfectly clear, that the lawmakers
intended the posting of a cash or surety bond by the employer to be the exclusive
means by which an employer's appeal may be perfected. That requirement is
intended to discourage employers from using an appeal to delay, or even evade, their
obligation to satisfy their employees' just and lawful claims.

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Appeals belatedly filed can be admitted in the interest of justice; Valid dismissal pursuant to
company policy and as provided by the Labor Code (Art. 282)
PHILIPPINE GEOTHERMAL INC. vs NLRC
G.R. No. 106370, September 8, 1994
Facts:

Edilberto Alvarez injured his wrist while at work. He was then given fifty-day work
concerned accident leave with pay by his employer. He was asked to return to work and was
assigned to do light work as recommended by his doctor. He was again examined, and was
qualified then to do moderate work, but Alvarez continued to absent himself from work,
exhausting his leave credits. Alvarez went to a total of five doctors, and all of them
recommended his fitness to work. His employer addressed him several letters serving as
warning, but Alvarez never heeded these letters. Under company policy, employees who
incur unauthorized absences of six days or more are subject to dismissal. As a consequence,
he was terminated from work. Alvarez filed a complaint for illegal dismissal. The Labor
Arbiter ruled that his dismissal was valid and justified, but on appeal with the NLRC, the
decision was reversed. Be it noted that the appeal was filed after fifteen days for receipt.
Issues:
1) Can the NLRC admit appeals filed later than the reglementary period of ten days?
2) Is an employer validly dismissed for absenting himself from work despite
recommendations of several doctors of his fitness to return to work and several
letters of his employer warning him of his dismissal?
Ruling:
1) Yes. The broader interest of justice and the desired objective of deciding the case on
the merits demand that appeals of such nature be given due course.
2) Yes. Article 282(b) of the Labor Code provides that an employer may validly dismiss
an employee for gross and habitual neglect by the employee of his duties. While it is
true that compassion and human consideration should guide the disposition of casses
involving termination of employment since it affects one's source or means of
livelihood, it should not be overlooked that the benefits accorded to labor do not
include compelling an employer to retain the services of an employee who has been
shown to be a gross liability to the employer. The law in protecting the rights of the
employees authorizes neither oppression nor self-destruction of the employer. In the
present case, it is clear that Nitural was guilty of seriously neglecting his duties. His
employer validly dismissed him not only for violation of company policy but also for
violation of Section 282(c) of the Labor Code.

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If based on the same facts determined by the Labor Arbiter, the NLRC does not commit grave
abuse of discretion in the exercise of its appellate jurisdiction
POCKETBELL PHILS. vs NLRC
G.R. No. 106843, January 20, 1995
Facts:

In view of a corporate dispute, Pocketbell Philippines, Inc. was placed under


receivership. During this time, Arthur Alinas continued to report with the EVP Braga.
Eventually, the corporation was given to Telectronics System, Inc. Alinas, who was
previously an Accounting Supervisor, was appointed as staff to the Finance Manager. He was
subsequently informed that he was to be transferred to the Davao City branch as Provincial
Marketing and Sales Supervisor. Alinas refused the offer, stating his reasons in a letter. The
new EVP, Jose Abejo, told him his explanation was unsatisfactory, and that if he does not
assume this new assignment, his services would be terminated. Alinas did not take the
position, and he filed a case of ULP against the company and Abejo. The Labor Arbiter found
his dismissal valid but the NLRC reversed the decision. The Labor Arbiter viewed the transfer
as a chance for Alinas to redeem the lost confidence of his employer, as his continued
reporting to then EVP Braga was considered disloyalty. However, the NLRC viewed that his
transfer to the Davao City branch was a mere subterfuge resorted to by the company to mask
its real intention to remove him because of what it perceived was his personal loyalty to the
Braga.
Issues:
1) Does the NLRC commit grave abuse of discretion when it reversed the decision of the
Labor Arbiter by arriving at a conclusion differently but basing it on the same set of
facts determined by the Labor Arbiter?
2) Can the managerial prerogative of transferring an employee to a new assignment be
justified by its view of the latters disloyalty to the company?
Ruling:
1) No. The NLRC considered the same facts found by the Labor Arbiter. Where the NLRC
differed was as to the conclusion to be drawn from those facts. Otherwise, it acted
within its appellate power and considered no issue which was not raised on the
appeal. By contending that "the decision of the Labor Arbiter had no sufficient basis,"
private respondent put in issue the correctness of the Labor Arbiter's conclusion that
private respondent was guilty of insubordination. Nor does the substantial evidence
rule require a court to shut out from its view evidence in the record which fairly
detracts from the decisions of a lower body. This is true of our review of the decisions
of the NLRC. It is certainly even truer of the review by the NLRC of the decisions of
the Labor Arbiter.
Yes, if it was not exercised as a mere subterfuge by the employer to rid himself of an
undesirable employee. The managerial prerogative to transfer personnel must be
exercised without grave abuse of discretion and putting to mind the basic elements
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of justice and fair play. Having the right must be exercised. Thus it cannot be used as
a subterfuge by the employer to rid himself of an undesirable worker. Nor then the
real reason is to penalize an employee for his union activities and thereby defeat his
right of self-organization. But the transfer can be upheld when there is no showing
that it is unnecessary, inconvenient and prejudicial to the displaced employee.

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CASE DIGESTS
POEA decisions appealed to NLRC can be dismissed if filed belatedly; prescription of money
claims arising from Er-Ee relations three years
RANCES vs NLRC
G.R. No. 101135, July 14, 1995
Facts:

Teodoro Rances entered into an amicable settlement with his employer Gulf-East
Ship Management Limited for payment of money in Dubai. Rances sought to enforce the
agreement in the Philippines through the POEA. The Court ruled that POEA has no
jurisdiction to hear and decide the claim for enforcement of foreign judgment, and stated
that Rances can initiate another proceeding before the POEA against private respondent on
the basis of the contract of employment. Rances filed another complaint for non-payment of
salary allotments, but his employer raised the defenses of payment and prescription. POEA
dismissed the case on the ground of prescription, so Rances appealed to the NLRC by filing a
notice of appeal and a motion for extension of time to file his appeal brief. The appeal was
dismissed on the ground that the memorandum of appeal was belatedly filed.
Issues:
1) Can the NLRC dismiss an appeal of a POEA decision filed belatedly?
2) Is the claim for payment of monetary awards barred by prescription filed after a
period of three years has elapsed?
Ruling:
1) Yes. Rule V, Book VII of the Rules Governing Overseas Employment provides: The
appeal shall be filed within the reglementary period as provided in Section 1 of this
Rule; shall be under oath with proof of payment of the required appeal fee and the
posting of a cash or surety bond as provided in Section 6 of this Rule; shall be
accompanied by a memorandum of appeal which shall state the grounds relied upon
and the arguments in support thereof; the relief prayed for; and a statement of the
date when the appellant received the appealed decision, and/or proof of service on
the other party of such appeal. A mere notice appeal without complying with the other
requisites aforestated shall not stop the running of the period for perfecting an
appeal. Section 7 further provides no extension of the period provided. The Court has
allowed the belated filing of appeals to NLRC in some cases. This liberal practice is
done only when it would serve the demands of substantial justice and in the exercise
of the court's equity jurisdiction, but it was not shown in this case.
2) Yes. As provided by Article 291 of the Labor Code, All money claims arising from
employer-employee relations accruing during the effectivity of this Code shall be filed
within three (3) years from the time the cause of action accrued; otherwise they shall
be forever barred.

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Memorandum on appeal must be verified and attached with certificate of non-forum
shopping; Corporations filing cases must be authorized through board resolutions
SALENGA vs CA
G.R. No. 174941, February 1, 2012
Facts:

An appeal was filed to the NLRC by the former CEO of Clark Development Corporation
on a decision of the Labor Arbiter granting the money claims of Antonio Salenga. This appeal
was however dismissed for the memorandum was not verified and it lacked a certification
of non-forum shopping, considering that there was also another appeal pending before the
NLRC on the same claims. There was also no board resolution attached, which authorized
the filing of the appeal. The NLRC, however, still admitted the appeal and reversed the Labor
Arbiters decision. The case was elevated to the CA, and the said court ruled that Salenga was
a corporate officer, thus the issue was an intra-corporate controversy not within the NLRCs
jurisdiction.
Issue:
Should an appeal filed with the NLRC by a corporation be dismissed if no board
resolution authorizing the filing of such and no certificate of non-forum shopping were
attached, and the memorandum was not verified?
Ruling:
Yes. The NLRC Rules of Procedure provides for the requirements for the perfection of
appeals. Among these is the requirement that the appeal must be verified by the appellant
himself. A corporation can only exercise its powers and transact its business through its
board of directors and through its officers and agents when authorized by a board resolution
or its bylaws. The power of a corporation to sue and be sued is exercised by the board of
directors. The physical acts of the corporation, like the signing of documents, can be
performed only by natural persons duly authorized for the purpose by corporate bylaws or
by a specific act of the board. The purpose of verification is to secure an assurance that the
allegations in the pleading are true and correct and have been filed in good faith. The counsel
for the corporation, for failure to provide the authorization from the board, cannot be
considered the appellant as provided for by law.

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DANAO DEVELOPMENT CORPORATION vs NLRC
G.R. No. L-40706-07, February 16, 1978
Facts:

This case is a petition for certiorari and prohibition assailing the writ of execution and
garnishment of the National Labor Relations Commission (NLRC) against Danao
Development Corporation, containing orders of reinstatement and payment of back wages
to private respondents who were employees of the corporation. The implementation of said
writ was transferred to said commission after the abolition of the CIR. Prior to the execution,
Mr. Aurelio Cruz was ordered to make the necessary computation of the amount of back
wages. In his report, Cruz made mention of the different factors to consider in computing the
said amount. There was also a purported compromise agreement entered into by the Union
of the private respondents and the employer.
Issues:
1) Can a judgments regarding the grant of back wages attain immediate finality?
2) Can a labor union validly enter into a compromise agreement with an employer in
behalf of its member-complainants in a case claiming for reinstatement and back
wages?
Ruling:
1) No. The usual concept of finality which makes a judgment executory does not attach
to judgments of the nature herein concerned. A judgment ordering payment of back
wages does not necessarily contemplate a simple and straight computation of the
corresponding wages of the prevailing claimants on the basis of the number of days
or months from the date of unlawful dismissal to the date of reinstatement or the date
fixed by the Court. There are other factors which must be indispensably looked into
also. such a judgment is incomplete until after the definite amounts of back wages due
the respective claimants have been finally settled, albeit, as a matter of social justice
and expediency, such determination may be made individually, if feasible, and the
execution carried out as the computation for each worker is finished, assuming that
there would be considerable delay in the computation of the respective amounts for
the others. The Court has evolved a policy in such cases to just grant a straight award
for a reasonable period, say three years, regardless of the actual number of years of
lay-off, thereby relieving the parties from the work, time and expenses needed to
prove circumstances that would otherwise go into the exact determination of what is
due.
2) No. It bears making it unmistakably clear here that the beneficiaries in this case are
the individual claimants or complainants themselves. Nothing short of personal
acknowledgments on their part may be deemed as legal satisfaction of this judgment.
The union to which they belong and their counsel can only assist them; they cannot
decide for their even as they are entitled to their corresponding dues and fees in
accordance with the by-laws and the corresponding contract for services.
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PACIFIC MILLS, INC. vs NLRC
G.R. No. 88864, January 17, 1990
Facts:

In the case of Pacific Mills vs NLRC (GR No. 79535, 1988), the Court dismissed the
petition questioning the decision of the NLRC because it was not sufficiently shown that the
Commission committed grave abuse of discretion. When the decision attained finality, the
NLRC made a computation of the award to complainants and issued a partial writ of
execution. Pacific Mills filed a motion to stay execution, contending several supervening
events that would affect the computation of the award. The NLRC denied such motion and
issued an order for the immediate implementation of the partial writ of execution without
further delay. In this instant case, Pacific Mills questions the validity of the issuance of the
said orders.
Issue:
May the execution of a final judgment of NLRC be stayed in view of supervening
events?
Ruling:
Yes. There can be no question that the supervening events cited by petitioner would
certainly affect the computation of the award in the decision of the NLRC. It is the duty of the
NLRC to consider the same and inquire into the correctness of the execution, as such
supervening events may affect such execution. Despite lack of objections on the part of
Pacific Mills, the fact cannot be denied that such supervening events as the length of service
of the private respondents, the wage exemptions granted, and payments already made on
the award would certainly affect the computation of the total award under the decision. Thus,
a prompt and immediate determination of these objections and a recomputation of the
award should be made. A denial of this opportunity to right a clear error in the execution of
the judgment constitutes a grave abuse of discretion.

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SAMPAGUITA GARMENTS CORP. vs NLRC
G.R. No. 102406, June 17, 1994
Facts:

Emilia Santos was charged with theft by her employer for attempting to bring out of
company premises a piece of cloth belonging to the latter without authority. Sampaguita
Garments dismissed her on this ground. Emilia filed a complaint for illegal dismissal; the case
was dismissed by the labor arbiter, but the NLRC reversed the decision and awarded her
with reinstatement and payment of back wages. Meanwhile, Sampaguita Garments filed a
criminal action against Emilia. Both the MTC and RTC sustained Emilias conviction for theft.
The decision of the NLRC, when it reached the Supreme Court, was sustained for lack of
showing that it was tainted with grave abuse of discretion. The decision of the trial courts
were also sustained by the SC. Both decisions became final and executory. Emilia then moved
for the execution of the NLRC decision, but Sampaguita Garments invoke her conviction in
the criminal case. The NLRC granted Emilias motion, thus prompting Sampaguita Garments
to seek relief from the Court. In this petition, it is asserted that the decision of the NLRC
calling for Emilias reinstatement and the payment of back wages should not now be
enforced. Otherwise, she would in effect be undeservedly rewarded when she should instead
be punished for her offense.
Issue:
If an employee is absolved of an offense that led to her dismissal and is ordered
reinstated, will her subsequent conviction in a criminal prosecution for the same offense
affect the administrative decision?
Ruling:
Yes. It is true that once a judgment has become final and executory, it can no longer
be disturbed except only for the correction of clerical errors or where supervening events
render its execution impossible or unjust. In the latter event, the interested party may ask
the court to modify the judgment to harmonize it with justice and the facts. But this Court
held that the power of the NLRC to issue a writ of execution carries with it the right to look
into the correctness of the execution of the decision and to consider supervening events that
may affect such execution. The private respondents conviction of the crime of theft of
property belonging to the petitioner has affirmed the existence of a valid ground for her
dismissal and thus removed the justification for the administrative decision ordering her
reinstatement with back wages. Nevertheless, the petitioner is still subject to sanction for its
failure to accord the private respondent the right to an administrative investigation in
conformity with the procedural requirements of due process.

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INDUSTRIAL AND TRANSPORT EQUIPMENT, INC. vs NLRC
G.R. No. 113592, January 15, 1998
Facts:

Leopoldo Medrano was asked to resign by his supervisor in Industrial and Transport
Equipment Inc. (INTECO) after being confronted for working with another firm during his
leave of absence. He filed a complaint for illegal dismissal, and the Labor Arbiter ruled in his
favor by ordering his reinstatement. The judgment became final and executory, thus
Medrano moved for the issuance of a writ of execution which was granted. Medrano was not
reinstated. He filed for a motion to cite INTECO for indirect contempt which was again
granted. In this instant petition, INTECO asks the Court to set aside this decision of the labor
arbiter which was subsequently affirmed by the NLRC.
Issue:

Can the labor arbiter cite an employer for indirect contempt for not complying with
the formers order to reinstate an employee?
Ruling:
Yes. Section 2, Rule X of the New Rules of Procedure of the NLRC provides that the
Commission or any labor arbiter may cite any person for indirect contempt upon grounds
and in the manner prescribed under Section 3(b), Rule 71 of the 1997 Rules of Civil
Procedure. Section 3(b), Rule 71 provides disobedience of or resistance to a lawful writ,
process, order, or judgment of a court as a ground to cite a person for indirect contempt.
The Court defines contempt as a disobedience to the Court by setting up an opposition to its
authority, justice and dignity. It signifies not only a willful disregard or disobedience of the
courts orders but such conduct as tends to bring the authority of the court and the
administration of law into disrepute or in some manner to impede the due administration of
justice. There is no question that disobedience or resistance to a lawful writ, process, order,
judgment or command of a court or injunction granted by a court or judge constitutes
indirect contempt punishable under Rule 71 of the Rules of Court.

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CASE DIGESTS
ROBOSA vs NLRC
G.R. No. 176085, February 8, 2012
Facts:

Federico Robosa and other rank-and-file employees of Chemo-Technische


Manufacturing, Inc. (CTMI) were officers and members of the CTMI Employees Union-DFA
(union). The union filed a petition for certification election at CTMI. However, the union was
not able to garner the required votes to become the exclusive bargaining representative of
the company. Subsequently, the CTMI President issued two memoranda grounding the sales
personnel of the company and a notice of termination of the sales drivers. The union filed a
complaint for illegal dismissal and unfair labor practice and also moved for the issuance of a
writ of preliminary injunction and/or TRO. The labor arbiter denied the unions motion for
a stay order on the ground that the issues raised by the petitioners can best be ventilated
during the trial on the merits of the case. When elevated to the NLRC, the Commission issued
the TRO, which was not complied by CTMI, thus prompting for the upgrade of the TRO to a
writ of preliminary injunction. The union moved to cite CTMI in contempt. The NLRC
dismissed the contempt charge. Robosa, et. al. appealed to the CA to review the dismissal of
the contempt charge, but the CA ruled that such dismissal was not subject to review of an
appellate court. In this petition, the CA was charged with grave abuse of discretion for
dismissing the appeal.
Issues:
1) Does the NLRC have contempt powers?
2) Can a dismissal of a contempt charge be appealed?
Ruling:
1) Yes. Under Article 218[22] of the Labor Code, the NLRC (and the labor arbiters) may
hold any offending party in contempt, directly or indirectly, and impose appropriate
penalties in accordance with law. The penalty for direct contempt consists of either
imprisonment or fine, the degree or amount depends on whether the contempt is
against the Commission or the labor arbiter. The Labor Code, however, requires the
labor arbiter or the Commission to deal with indirect contempt in the manner
prescribed under Rule 71 of the Rules of Court. Rule 71 of the Rules of Court does not
require the labor arbiter or the NLRC to initiate indirect contempt proceedings before
the trial court. This mode is to be observed only when there is no law granting them
contempt powers. As is clear under Article 218(d) of the Labor Code, the labor arbiter
or the Commission is empowered or has jurisdiction to hold the offending party or
parties in direct or indirect contempt.
2) No. The contempt proceeding far from being a civil action is of a criminal nature and
of summary character in which the court exercises but limited jurisdiction. It was
then explicitly held: Hence, as in criminal proceedings, an appeal would not lie from
the order of dismissal of, or an exoneration from, a charge of contempt of court.

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CASE DIGESTS
BARLES, et. al., vs BITONIO, et. al.
GR No. 120270, June 16, 1999
Facts:

Petitioners Barles, Elomina, and Sayo are union officers of Ilaw Buklod ng
Manggagawa Local Chapter No. 15. Private respondents Oquendo and Ragasa also ran as
union officers but they lost to petitioners. The Executive Board of the union passed a
resolution increasing union dues. At this instance, Oquendo, etc. filed a petition with the
Bureau of Labor Relations (BLR) for an immediate audit and examination of union funds. The
BLR then issued an order granting the petition. Petitioners appealed the order with the Office
of the Secretary. After several motions for reconsideration, the Office sustained the order of
conducting the audit, but endorsed such task with the Regional Office. Petitioners filed a
petition for certiorari, and the Court dismissed it. Acting on the endorsement, the Regional
Office conducted an examination based on the records sent by the employer and ordered the
union officers to conduct a general membership meeting to open their books of accounts.
The petitioners filed an appeal with the Secretary of Labor, but the Undersecretary endorsed
the appeal to the BLR. The latter found the appeal unmeritorious and authorizing the
Regional Director to proceed with the audit. The petitioners moved to strike out the order
challenging the jurisdiction of the BLR over appeals on petitions for union accounts
examination, but was denied. In this petition, petitioners assert that the BLR Director, in
taking cognizance of the appeal from the Order of the Regional Director upon the Secretary
of Labor's endorsement, acted with grave abuse of discretion amounting to lack of
jurisdiction or excess in the exercise thereof because the latter can "neither delegate nor
abdicate his appellate jurisdiction to a subordinate body or entity" like the BLR.
Issue:

Does the BLR have jurisdiction to review the decision of the DOLE Regional Director
endorsed to it by the Secretary of Labor?
Ruling:
Yes. Appellate authority over decisions of the Regional Directors involving
examinations of union accounts is expressly conferred on the BLR under the Rules of
Procedure on Mediation-Arbitration. The DOLE Secretary has no appellate jurisdiction over
decisions of Regional Directors involving petitions for examinations of union accounts. He
does not possess such power hence he cannot delegate, much more, abdicate powers which
he does not own. The DOLE Secretary, however, can properly delegate to the BLR his
visitorial power under Article 274 which includes the power to examine the financial
accounts of legitimate labor organizations. The DOLE Secretary can also delegate his other
functions and duties pursuant to Section 40, Chapter 8, Book IV of the Administrative Code
provided that the delegation is in writing, indicating the officer or class of officers or
employees to whom the delegation is made and only insofar as the delegation is necessary
for the latter to implement plans and programs adequately.

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CASE DIGESTS
KAPISANAN NG MANGGAGAWANG PINAGYAKAP (KMP) vs TRAJANO
G.R. No. L-62306, January 21, 1985
Facts:

Catalino Silvestre and 13 other employees of the Franklin Baker Company filed a
written request for accounts examination of the KMP. The union accounts examiner
conducted an investigation and found out that the union had several violations and that its
constitution and by-laws was illegal for lack of required ratification from its members. With
this, Silvestre, etc. filed for the expulsion of the union officers for gross violation of the Labor
Code. Med-Arbiter Cabihan ordered for the holding of a referendum to decide on the issue of
expulsion. The union officers appealed the order to Director Trajano of the BLR, stating that
the alleged misrepresentation was not supported by substantial evidence. Silvestre, on the
other hand, appealed that Med-Arbiter Cabihan erred in ordering for the conduct of the
referendum. Director Trajano dismissed both appeals. The union, through the officers, filed
this petition with the Court.
Issue:

Does the BLR have authority to order a referendum among union members to decide
whether or not its officers may be expelled?
Ruling:
No. In this case the Court said that if the union officers were guilty of the alleged acts
imputed against them, the Director of BLR pursuant to Article 242 of the New Labor Code
and in the light of Our ruling in Duyag vs. Inciong, should have meted out the appropriate
penalty on them, i.e., to expel them from the Union, as prayed for, and not call for a
referendum to decide the issue.

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CASE DIGESTS
PLUM FEDERATION OF INDUSTRIAL AND AGRARIAN WORKERS vs NORIEL
G.R. No. L-48007, December 15, 1982
Facts:

Plum Federation of Industrial and Agrarian Workers filed a petition for certification
election as the sole bargaining representative of the rank-and-file workers of Manila Jockey
Club, Inc. The Manila Jockey Club Race Day Operation Employees Labor Union-PTGWO
opposed said petition, contending that it is the recognized bargaining representative and
also invoked that the requirement of the written consent of at least 30% of all the employees
in the bargaining unit was not met, pursuant to the Code of Ethics of the Trade Union
Congress of the Philippines (TUCP). This case was forwarded to the president of the TUCP,
but the same was returned to the Secretary of Labor, which was later on transmitted to the
BLR. The BLR Director endorsed the case to the Regional Director, which dismissed the case,
upholding the letter of the president of TUCP referring back to the BLR the case and that the
BLR declare MJCR-OELU-PTGWO as the sole and exclusive bargaining agent.
Issue:

Does the director of BLR have authority to forward a case to the TUCP for arbitration
and decision?
Ruling:
No. The Director of BLR should have ordered for the certification election instead of
dismissing the appeal. Certification election is the fairest and most effective way of
determining which labor organization can truly represent the working force. The dismissal
of the appeal was considered by the Court as an impairment of the freedom of the workers
to voice out their choice of the union to represent them. If there is any doubt as to the
required number having met, there would be no better way than the holding of a certification
election to ascertain which union really commands the allegiance of the rank-and-file
employees. If the desired goal is for the execution of a collective bargaining contract to
protect the workers, then certification election is the most appropriate means to attain said
end.

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CASE DIGESTS
LITEX EMPLOYEES ASSOCIATION vs EDUVALA
G.R. No. L-41106, September 22, 1977
Facts:

The Federation of Free Workers filed with the Bureau of Labor Relations against Litex
Employees Association to hold a referendum among the members to determine whether
they desired to be affiliated with such Federation. The contention of Litex acting through its
counsel was that only about 700 out of more than 2,200 employees of the company had
manifested their desire to affiliate with the Federation and that a substantial number of such
had since then repudiated their signatures. It also raised the point that what was sought was
a certification election which was not proper as there was a certified collective bargaining
agreement between the union and the company. The Compulsory Arbitrator, after a careful
study of the pleadings, reached the conclusion that the truth of the matter could best be
ascertained by a referendum election. Eduvala, then OIC of the BLR, affirmed the decision. In
this petition, Litex contends that there is no statutory authorization for the holding of such a
referendum election.
Issue:
Does the BLR have authority to hold a referendum election among the members of a
union to determine whether or not to affiliate with a federation?
Ruling:
Yes. A cursory reading of Article 226 [now Article 232] of the Labor Code readily
yields the conclusion that in the interest of industrial peace and for the promotion of the
salutary constitutional objectives of social justice and protection to labor, the competence of
the governmental entrusted with supervision over disputes involving employers and
employees as well as "inter-union and intra-union conflicts," is broad and expansive. The
active participation in the implementation of the codal objective is entrusted to the executive
department. There is no support for any allegation of jurisdictional infirmity, considering
that the language employed is well-nigh inclusive with the stress on its "and exclusive
authority to act.

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CASE DIGESTS
VILLAOR vs TRAJANO
G.R. No. L-69188, September 23, 1986
Facts:

The Philippine Airlines Employees Association (PALEA) held its election of national
officers. Due to an election protest, its own Commission on Election (COMELEC) ordered for
the opening of the questioned ballot boxes. The previously proclaimed winners filed with the
Regional Office of the Minister of Labor and Employment a complaint against the PALEA
COMELEC members, seeking for the latters disqualification on the ground of alleged
partiality for the protesters. The Med-Arbiter then issued an order to enjoin from the
opening of the ballot boxes, but then the COMELEC proceeded despite the order and also
disposed the election protest by ordering holding of special elections for those who allegedly
were not able to vote. The Med-Arbiter issued an order declaring the COMELEC members
disqualified and the special election null and void. Upon appeal with the Bureau of Labor
Relations, Director Trajano decided to set aside the order of the Med-Arbiter, opining that by
disqualifying the PALEA COMELEC members, the government interferes with the right to
self-organization of the workers. Hence, the petitioners sought recourse from the Court.
Issue:

Does the BLR have jurisdiction over complaints of disqualification of election officers
of a union?
Ruling:
Yes. Article 226 [now Article 232] of the Labor Code provides that the BLR has
exclusive and original jurisdiction over inter-union and intra-union conflicts as
supplemented by Policy Instructions No. 6, which provides that the Med-Arbiters have
exclusive original jurisdiction over intra-union cases. The Court concluded from these
provisions that the freedom of the unions from interference from the government
presupposes that there is no inter-union or intra-union conflict. Hence, the Med-Arbiter
rightly exercised jurisdiction over the case.

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CASE DIGESTS
LA TONDEA WORKERS UNION (LTWU) vs SECRETARY OF LABOR
G.R. No. 96821, December 9, 1994
Facts:

Members of the La Tondea Workers Union petitioned the NCR Office of the
Department of Labor and Employment (DOLE) for an audit examination of funds and
financial records of the union. Accordingly an audit was ordered. A report was submitted
finding petitioners Ramon de la Cruz and Norma Marin accountable for for P367,553.00 for
union dues remitted by La Tondea Inc. to LTWU. De la Cruz and Marin appealed to the
Secretary of Labor; the latter indorsed the case to the Bureau of Labor Relations. The BLR
Director found for the petitioners and ordered to set aside the findings and for another
audit/examination to be conducted. LTWU moved for reconsideration, raising the issue on
jurisdiction that pursuant to Article 274 of the Labor Code, the power to order an
examination of the books of accounts and financial activities of a union is vested in the
Secretary of Labor and Employment or his representative and the BLR cannot be considered
the Secretary's representative. The BLR denied the motion, thus an appeal to the Secretary
was made. But the appeal was again referred to the BLR which denied the petition for being
moot and academic. Hence, this instant petition.
Issue:

Can the BLR be considered as the Secretary of Labors representative with respect to
authority to order an examination of the books of accounts and financial activities of a union?
Ruling:
Yes. The "union accounts examiners of the Bureau" mentioned in Rule 1, sec. 1(ff) of
the implementing rules as having the power to audit the books of accounts of unions are
actually officials of the BLR because the word "Bureau" is defined in Rule 1, sec. 1(b) of the
same rules as the Bureau of Labor Relations. The delegation of authority to union accounts
examiners in Rule 1, sec. 1(ff) is not exclusive. By indorsing the case to the BLR, the Secretary
of Labor and Employment must be presumed to have authorized the BLR to act on his behalf.

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CASE DIGESTS
RUGA vs NLRC
G.R. No. L-72654-61, January 22, 1990
Facts:

Petitioners were the fishermen-crew members of 7/B Sandyman II. For services
rendered in the conduct of private respondent's regular business of "trawl" fishing, they
were paid on percentage commission basis in cash by the cashier of their employer, De
Guzman Fishing Enterprises. As agreed upon, they received thirteen percent (13%) of the
proceeds of the sale of the fish-catch if the total proceeds exceeded the cost of crude oil
consumed during the fishing trip, otherwise, they received ten percent (10%) of the total
proceeds of the sale. The patron/pilot, chief engineer and master fisherman received a
minimum income of P350.00 per week while the assistant engineer, second fisherman, and
fisherman-winchman received a minimum income of P260.00 per week. On September 11,
1983 upon arrival at the fishing port, they were told by Jorge de Guzman to proceed to the
police station at Camaligan, Camarines Sur, for investigation on the report that they sold
some of their fish-catch at midsea to the prejudice of private respondent. No criminal charges
were formally filed against them but their employer refused to allow them to return to the
fishing vessel to resume their work on the same day. Hence, they individually filed their
complaints for illegal dismissal and non-payment of 13th month pay, emergency cost of
living allowance and service incentive pay, with the then Ministry (now Department) of
Labor and Employment. Their employer contends however that a joint venture exists
between them and the petitioners.
Issue:
Are fishermen-crew members of a trawl fishing vessel the employees of its owneroperator?
Ruling:
Yes. From the four (4) elements of an employer-employee relationship, the Court has
generally relied on the so-called right-of-control test where the person for whom the services
are performed reserves a right to control not only the end to be achieved but also the means
to be used in reaching such end. The conduct of the fishing operations was undisputably
shown by the testimony of Ruga, the patron/pilot of 7/B Sandyman II, to be under the control
and supervision of their employers operations manager. Matters dealing on the fixing of the
schedule of the fishing trip and the time to return to the fishing port were shown to be the
prerogative of the employer. While performing the fishing operations, petitioners received
instructions via a single-side band radio from private respondent's operations manager who
called the patron/pilot in the morning. They are told to report their activities, their position,
and the number of tubes of fish-catch in one day. Clearly thus, the conduct of the fishing
operations was monitored by the employer thru the patron/pilot of 7/B Sandyman II who is
responsible for disseminating the instructions to the crew members.

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CASE DIGESTS
LOYOLA SECURITY AND DETECTIVE AGENCY vs NLRC
G.R. No. 113287, May 9, 1995
Facts:

Prado and Tuscano filed complaints against their employer Loyola Security and
Detective Agency for illegal dismissal, illegal deduction, underpayment of wages, nonpayment of labor standard benefits, and violation of PD 851. The Labor Arbiter ruled in their
favor and the NLRC affirmed the decision on appeal. They moved for the execution of the
decision. However, they subsequently filed a Joint Manifestation acknowledging complete
satisfaction of the award. They again filed a motion for issuance of alias writ of execution for
the recovery of the balance, claiming they have received less than the Labor Arbiters award.
The employer believes that the acts of Prado in entering into a compromise agreement and
in accepting an advance of P5,000.00 constituted a novation of the award adjudged by the
Labor Arbiter. Records show that the satisfaction of judgment was executed by the
complainants without the assistance of their counsel and without the approval of the Labor
Arbiter. Also, it was noted that the compromise was entered by Prado not only in his own
behalf but also for Tuscano; however, such authority was not shown. Hence, this petition.
Issue:

Can a compromise agreement on the satisfaction of an award by the Labor Arbiter be


entered into without the latters approval?
Ruling:
No. The Labor Code of the Philippines does not contain any provision on compromise
agreements or quitclaims in cases pending before the Labor Arbiter and the NLRC. However,
the New Rules of Procedure of NLRC in Section 2, Rule V (Proceedings Before Labor Arbiter)
provides that:
Should the parties arrive at any agreement as to the whole or any part of the
dispute, the same shall be reduced to writing and signed by the parties and their
respective counsels, if any, before the Labor Arbiter. The settlement shall be approved
by the Labor Arbiter after being satisfied that it was voluntarily entered into by the
parties and after having explained to them the terms and consequences thereof.
A compromise agreement entered into by the parties not in the presence of
the Labor Arbiter before whom the case is pending shall be approved by him if, after
confronting the parties, particularly the complainants, he is satisfied that they
understand the terms and conditions of the settlement and that it was entered into
freely, and voluntarily by them and the agreement is not contrary to law, morals and
public policies.
Also, under Article 1878 of the Civil Code of the Philippines, a special power of
attorney is necessary to enter into a compromise; hence, the compromise entered into by
Prado could not bind Tuscano.

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CASE DIGESTS
Validity of compromise agreements and quitclaims in settlement of labor disputes
GALICIA, et. al. vs NLRC
G.R. No. 119649, July 28, 1997
Facts:
A complaint for illegal dismissal was filed by Ricky Galicia, et.al., against Keng Hua
Paper Products, Globe Paper Mills, and Armor Industrial Corporation. The Labor Arbiter
ruled in the employees favor and ordered for their reinstatement and payment of a total
amount of Php 3,223,261.00 or Php 107,380.00 per complainant, thus prompting the
companies to file their appeal with the NLRC. Subsequently, a compromise agreement was
entered into by Globe Paper Mills and the national president of the National Organization of
Workingmen (NOWM), the latter representing the complainants. The agreement settled the
case for and in consideration of the total sum of Php 300,000.00 or Php 12,000 per
complainant. With this, the complainants signed a Quitclaim and Release. They also executed
a joint affidavit, saying that they signed the compromise agreement under the compulsion of
dire necessity.
Issue:

Can a compromise agreement entered into by employees and their employer under
the compulsion of dire necessity be valid?
Ruling:
Yes, but only upon a showing that the person making the waiver did so voluntarily
and with full understanding of what he was doing and the consideration being credible.
Although the Court recognized that the complainants in this case voluntarily entered the
compromise agreement, it however considered the amount of Php 12,000.00 per worker as
inordinately low and exceedingly unreasonable as compared to the award by the Labor
Arbiter. Palpably inequitable, the quitclaim cannot be considered an obstacle to the pursuit
of their legitimate claims. The Court also recognizes "dire necessity" of laborers as ample
justification to accept even sufficient sums of money from their employers. The main
difference, however, lies in the existence of a voluntary acceptance of the agreement and the
reasonable consideration for it, making the agreement intrinsically valid and binding, thus
rendering the "dire necessity" excuse immaterial and irrelevant. Thus, the undisputed and
concurrent circumstances of dire necessity and unconscionability obtaining in the case at
bar constitute more than sufficient ground to invalidate the compromise agreement.

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CASE DIGESTS
Validity of compromise agreements and quitclaims in settlement of labor disputes
GOLDEN DONUTS, INC. vs NLRC
G.R. Nos. 113666-68, January 19, 2000
Facts:
Private respondents Macandog, Hontiveros, Tamargo, Tegio, Magtarayo were among
the employees separated from service after not accepting to be bound by a compromise
agreement entered into by the counsel of their union and their employer Golden Donuts, Inc.
This agreement resulted from the union members, who struck after failure of negotiations
with their employer, who sensed the gravity of the liability which may arise in case their
employer proceeds in filing a suit. Out of the 262 strikers, the private respondents did not
accept to be bound by the compromise agreement on the ground that the union had no
authority to waive or compromise their individual rights. The Labor Arbiter upheld the
dismissal of the private respondents, holding that they are bound by the compromise
agreement, but the NLRC modified the decision, ordering for their reinstatement.
Issue:
May a union compromise or waive the rights of its minority members, without their
consent?
Ruling:
No. Even if a clear majority of the union members agreed to a settlement with the
employer, the union has no authority to compromise the individual claims of members who
did not consent to such settlement. Absent a showing of the union's special authority to
compromise the individual claims of private respondents for reinstatement and back wages,
there is no valid waiver of the aforesaid rights. As private respondents did not authorize the
union to represent them not bound by the terms thereof.

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CASE DIGESTS
Validity of compromise agreements and quitclaims in settlement of labor disputes
MAGBANUA, et. al. vs UY
G.R. No. 161003, May 6, 2005
Facts:
The Supreme Court affirmed an NLRC decision awarding wage differentials in the
amount of Php 1,487,312.69 due to eight complainant workers. These workers then filed a
Motion for Issuance of Writ of Execution when the decision became final and executory.
Rizalino Uy filed a Manifestation to terminate the case, stating that the judgment award has
already been complied. Said Manifestation was accompanied by a Joint Affidavit executed by
the workers attesting to the receipt of payment and waiving all other benefits due them in
connection with their complaint. However, the workers filed an Urgent Motion for Issuance
of Writ of Execution alleging that there was only partial compliance of the judgment. Uy
opposed, contending the satisfaction of the judgment claim. Again, a Manifestation stating
that the claims have already been satisfied was filed by the workers. Hearings were
conducted. The Labor Arbiter then dismissed the motion, but the NLRC reversed the decision
holding that a final and executory judgment can no longer be altered.
Issues:

1) May a compromise agreement be effected even when there is already a final and
executory judgment?
2) Can a waiver be invalidated due to the absence of a partys counsel and the labor
arbiter during its execution?

Ruling:
1) Yes. There is no justification to disallow a compromise agreement, solely because
it was entered into after final judgment. The validity of the agreement is
determined by compliance with the requisites and principles of contracts, not by
when it was entered into. A reciprocal concession inherent in a compromise
agreement assures benefits for the contracting parties. For the defeated litigant,
obvious is the advantage of a compromise after final judgment. Liability arising
from the judgment may be reduced. As to the prevailing party, a compromise
agreement assures receipt of payment. Litigants are sometimes deprived of their
winnings because of unscrupulous mechanisms meant to delay or evade the
execution of a final judgment.
2) No. The presence or the absence of counsel when a waiver is executed does not
determine its validity. There is no law requiring the presence of a counsel to
validate a waiver. The test is whether it was executed voluntarily, freely and
intelligently; and whether the consideration for it was credible and reasonable.
The labor arbiters absence when the waivers were executed was remedied upon
compliance with the proceedings during the pre-execution conference, when the
Labor Arbiter made searching questions during the pre-execution conference to
ascertain whether petitioners had voluntarily and freely executed the waivers.
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CASE DIGESTS
Validity of compromise agreements and quitclaims in settlement of labor disputes
MINDORO LUMBER AND HARDWARE vs BACAY
G.R. No. 158753, June 8, 2005
Facts:
Private respondents in this case are employees of Mindoro Lumber and Hardware.
Invoking the power of the DOLE Regional Director, they filed a complaint for non-payment
of labor standard benefits; such, and other violations, was subsequently found true by the
DOLE after an inspection. The employees filed a Joint Affidavit alleging non-payment of their
entitlements and prayed that the DOLE grant such payment. Afterwards, they executed a
Joint Affidavit of Withdrawal of Complaint, stating that by virtue of the amount they received
(either Php 6,000.00 or Php 3,000.00), they are withdrawing their claim against their
employer. However, they contend that it was the former union president who persuaded
them to execute such withdrawal of complaint despite the amounts being grossly
disproportionate with the amounts they are supposed to receive. Furthermore, it was alleged
that the affidavit was executed without the assistance of the BLR or the regional office of the
DOLE.
Issue:

Can a compromise agreement executed without the assistance of the BLR or the
regional office of DOLE be valid?
Ruling:
No. Article 227 of the Labor Code provides that for a compromise agreement to be
valid, it should be voluntarily agreed by the parties with the assistance of the BLR or the
regional office of the DOLE. The assistance of the BLR or the regional office of the DOLE in
the execution of a compromise settlement is a basic requirement; without it, there can be no
valid compromise settlement. In this case, the petitioner admits that the purported
compromise settlement was executed by the private respondents without such required
assistance. The closest form of assistance adverted to by the petitioner in this case was that
of Bacays counsel when the latter appeared before the Office of the Regional Director to file
the following: the Sama-samang Salaysay sa Pag-uurong ng Sakdal executed by the private
respondents; a Sinumpaang Salaysay executed by Bacay withdrawing the complaint; and the
Motion to Dismiss. Such assistance, however, is not the "assistance" required by Article 227.
As such, the joint affiddavit executed by the respondents cannot qualify as a valid
compromise settlement.

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CASE DIGESTS
Validity of compromise agreements and quitclaims in settlement of labor disputes
EDI-STAFFBUILDERS INTERNATIONAL, INC. vs NLRC
G.R. No. 145587, October 26, 2007
Facts:
Eleazar Gran was an OFW recruited by EDI-Staffbuilders International, Inc. (EDI) and
was deployed by Expertise Search International (ESI) to work for Omar Ahmed Ali Bin Bechr
Est. (OAB) in Riyadh. As part of the terms and conditions of employment, Gran was to be paid
a monthly salary of SR 2,250.00 (USD 600.00). After accepting the offer of employment, Gran
signed an employment contract that granted him a monthly salary of USD 850.00. He
questioned the discrepancy; however, OAB agreed to pay him USD 850.00. After five months,
his employment was terminated. He received his final pay of SR 2,948, and executed a
Declaration releasing OAB from any financial obligation or otherwise, towards him. Gran
filed a complaint with the Labor Arbiter for illegal dismissal and underpayment of wages.
The Labor Arbiter upheld the dismissal and ruled that there was no underpayment. The
NLRC reversed this decision. Upon reaching the CA, it upheld NLRCs decision, and held that
the Declaration signed by Gran did not bar him from demanding benefits to which he was
entitled. In this petition, EDI questions the legality of award of backwages, stating as basis
the Declaration signed by Gran.
Issue:

Does a Declaration releasing an employer from obligations by a terminated employee


constitute a valid waiver and quitclaim?
Ruling:
No. The Court held that the salary paid upon termination was unreasonably low, the
payment of SR 2,948.00 is even lower than his monthly salary of SR 3,190.00 (USD 850.00).
If the Declaration is a quitclaim, then the consideration should be much much more than the
monthly salary of SR 3,190.00 (USD 850.00)although possibly less than the estimated
Gran's salaries for the remaining duration of his contract and other benefits as employee of
OAB. A quitclaim will understandably be lower than the sum total of the amounts and
benefits that can possibly be awarded to employees or to be earned for the remainder of the
contract period since it is a compromise where the employees will have to forfeit a certain
portion of the amounts they are claiming in exchange for the early payment of a compromise
amount. The court may however step in when such amount is unconscionably low or
unreasonable although the employee voluntarily agreed to it. In the case of the Declaration,
the amount is unreasonably small compared to the future wages of Gran.

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CASE DIGESTS
Validity of compromise agreements and quitclaims in settlement of labor disputes
ARELLANO, et.al., vs POWERTECH CORPORATION
G.R. No. 150861, January 22, 2008
Facts:
In 1999, the Labor Arbiter declared that Powertech illegally terminated the
petitioners and granted their monetary claims for Php 2,500,000.00. During the pendency
of the appeal to NLRC by Powertech, Carlos Gestiada for himself and on behalf of other
petitioners executed a quitclaim, release and waiver in favor of Powertech for Php 150,000.
He was also appointed as their attorney-in-fact evidenced by a special power of attorney.
Relying on the quitclaim and release, Powertech filed a motion for the withdrawal of the
appeal and cash bond which was granted by NLRC. When the check bounced, by motion of
the petitioners, NLRC declared the quitclaim, release and waiver void for lack of
consideration, reinstated the appeal and ordered Powertech to post a cash or surety bond.
Powertech paid Gestiada Php 150,000.00 for the employees and both parties filed a joint
motion to dismiss which was denied by the NLRC. On appeal, the CA ruled in favor of
Powertech annulling the decision of NLRC in denying the joint motion to dismiss.
Issue:

Was there a valid compromise agreement binding among the employees although
executed only by their appointed attorney-in-fact purportedly for himself?
Ruling:
No. The Court considered the act of Gestiada as a form of collusion, which is a
ground for the NLRC to declare a compromise agreement void. As provided for by law, The
National Labor Relations Commission 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.
The Court took into account the bad faith on the part of Powertech in negotiating with the
employees for fear of the higher amount of liability if the Labor Arbiters decision will be
accorded with finality.

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CASE DIGESTS
Validity of compromise agreements and quitclaims in settlement of labor disputes
GOODRICH MANUFACTURING CORPORATION vs ATIVO, et.al.
GR No. 188002, February 1, 2010
Facts:
The respondents in this case were former employees of Goodrich. Sometime in 2004,
the company offered an option for the employees to voluntarily resign because the company
was suffering from financial constraints. The respondents then availed this voluntary
resignation and were paid their separation pay. They also executed their respective waivers
and quitclaims. Afterwards, the employees claim they have been illegally dismissed. The
Labor Arbiter rendered a decision declaring that there was no illegal dismissal, but sustained
the money claims. The NLRC reversed this decision. Upon reaching the CA, the court
reinstated the decision of the Labor Arbiter. In this case, Goodrich claims that the waivers
and quitclaims were valid, and that allowing the respondents to recover their monetary
claims would render the waivers nugatory, considering that there was no coercion during
the execution of the waivers.
Issue:

Are employees quitclaims and waivers executed freely without any coercion valid
and binding?
Ruling:
Yes. Not all waivers and quitclaims are invalid as against public policy. If the
agreement was voluntarily entered into and represents a reasonable settlement, it is binding
on the parties and may not later be disowned simply because of a change of mind. It is only
where there is clear proof that the waiver was wangled from an unsuspecting or gullible
person, or the terms of settlement are unconscionable on its face, that the law will step in to
annul the questionable transaction. But where it is shown that the person making the waiver
did so voluntarily, with full understanding of what he was doing, and the consideration for
the quitclaim is credible and reasonable, the transaction must be recognized as a valid and
binding undertaking.

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CASE DIGESTS
Registration of Labor organizations
ASSOCIATED TRADE UNION vs NORIEL
GR No. L-48367, January 16, 1979
Facts:
Federation of Free Workers (FFW)-Synthetic Marketing and Industrial Corporation
Chapter filed a petition for certification election among the rank-and-file employees of
Synthetic Marketing and Industrial Corporation 48 days before the expiration of an old CBA.
As alleged in the petition, more than 30% of the total work force were in support of the
election, attaching the signatures of said union members. However, the Associated Trade
Unions (ATU)-KILUSAN was still existing and it had a renewed CBA with the employer which
was still in force then. Both the company and ATU opposed on the ground that the
certification election is contract-barred by virtue of the existence of the CBA duly registered
with the BLR. FFW assailed the validity of the said CBA on the ground that it was executed 5
months and 21 days prior to the expiration of the old CBA and that it was not ratified by the
members of the bargaining unit. Said CBA was registered with the BLR approximately 3
months prior to the expiration of the old CBA. The renewed CBA was certified 28 days before
expiration of the old CBA. The Med-Arbiter ordered for the conduct of the certification
election. ATU appealed the order to BLR Director Noriel, who affirmed the Med-Arbiters
decision.
Issue:

Can a CBA being assailed for its invalidity contract-bar a petition for certification
election?
Ruling:
Yes. According to the Court, the contract-bar rule does not apply to the case. The
contract-bar rule would preclude a certification election. That was to ignore the
decertification of the collective bargaining agreement which was hastily and prematurely
entered into precisely for the purpose of avoiding the holding of the certification election.
From the foregoing facts, the renewed CBA between ATU and the company cannot substitute
a bar to the instant petition for certification election. In the first place, the said CBA was
certified after the instant petition for certification had been filed by herein respondent union,
and its certification was conditioned upon the fact that there was no pending petition for
certification election with the Bureau of Labor Relations. The new CBA was not yet in
existence when the instant petition for certification election was filed. It is undubitably clear
from the facts heretofore unfolded that management and petitioner herein proceeded with
such indecent haste in renewing their CBA way ahead of the 'sixty-day freedom period' in
their obvious desire to frustrate the will of the rank-and-file employees in selecting their
collective bargaining representative. To countenance the actuation of the company and the
petitioner herein would be violative of the employees' constitutional right to selforganization.
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CASE DIGESTS
Registration of Labor organizations
TOYOTA MOTORS PHILIPPINES CORPORATION LABOR UNION vs TOYOTA MOTOR
PHILIPPINES CORPORATION
G.R. No. 135806, August 8, 2002
Facts:

Toyota Motors Philippines Corporation Employees and Workers Union (TMPCEWU)


filed a petition for certification election. Toyota Motor Philippines Corp. Labor Union
(TMPCLU) filed a motion to intervene with opposition, claiming that the petition was
premature due to an earlier resolution by the Secretary of Labor ordering the conduct of a
certification election among the rank-and-file employees of TMPC represented by petitioner
which was the subject of certiorari proceedings before the Supreme Court and still awaiting
final resolution at the time; and, that the collective bargaining unit which respondent
TMPCEWU sought to represent violated the "single or employer" unit policy since it excluded
the rank-and-file employees in the other divisions and departments in respondent TMPC. In
said SC decision, the legal personality of TMPCEWU was being assailed, its membership
being composed of supervisory and rank-and-file employees.
Issue:

Can a labor union not yet being issued with a certificate of registration validly file a
petition for certification election?
Ruling:
No. If a labor organizations application for registration is vitiated by falsification and
serious irregularities, a labor organization should be denied recognition as a legitimate labor
organization. And if a certificate of registration has been issued, the propriety of its
registration could be assailed directly through cancellation of registration proceedings in
accordance with Arts. 238 and 239 of the Labor Code, or indirectly, by challenging its petition
for the issuance of an order for certification election. In the present case, since TMPCEWU
had not acquired legal personality for the reason that its composition, being a mixture of
supervisory and rank-and-file employees, it cannot validly file a petition for election, moreso
can it become a bargaining representative of the workers in the company.

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CASE DIGESTS
Registration of Labor organizations
SAN MIGUEL FOODS INC vs SAN MIGUEL CORP. SUPERVISORS AND EXEMPT UNION
G.R. No. 146206, August 1, 2011
Facts:
Pursuant to a Supreme Court decision, the DOLE conducted pre-election conferences
on SMCSEUs petition for certification election. The Med-Arbiter ordered to proceed with the
election. The company San Miguel Foods Inc. questioned the eligibility to vote by some of its
employees, particularly those alleged confidential employees who were working as Payroll
Manager and those who have access with the salary and compensation data, the HR Assistant
and Personnel Assistant and those employees working in the live chicken operations who
are not covered by the bargaining unit. It also alleges that the employees of the Cabuyao, San
Fernando, and Otis plants of petitioners predecessor, San Miguel Corporation, as stated in
G.R. No. 110399, were engaged in "dressed" chicken processing, i.e., handling and packaging
of chicken meat, while the new bargaining unit includes employees engaged in "live" chicken
operations, i.e., those who breed chicks and grow chickens. Despite the objections, the MedArbiter ruled that SMCSEU was certified to be the exclusive bargaining agent of the
supervisors and exempt employees.
Issues:
1) Can the workers of separate divisions whose tasks are interrelated form a single
union?
2) Can confidential employees join the bargaining unit of a company?
Ruling:
1) Yes. The Court by taking into account the community or mutuality of interests test
said that those employees in the live chicken processing and dressed chicken
processing divisions held that they can form a union. 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 interest. This
is so because the basic test of an asserted bargaining units acceptability is whether
or not it is fundamentally the combination which will best assure to all employees the
exercise of their collective bargaining rights.
2) No. A confidential employee is one entrusted with confidence on delicate, or with the
custody, handling or care and protection of the employers property. Confidential
employees should be excluded from the bargaining unit, as their access to confidential
information may become the source of undue advantage. However, in this case, the
Court did not apply such fact to the Payroll Manager and those working with salary
and compensation data, saying that the job does not involve dealing with confidential
labor relations information in the course of the performance of his functions.

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CASE DIGESTS
Registration of Labor organizations
SAMAHANG MANGGAGAWA NG PACIFIC MILLS vs NORIEL
G.R. No. L-56588, January 17, 1985
Facts:
In a certification election among the workers in Pacific Mills, Inc., the PAFLU won over
CCLU. CCLU contested the certification of PAFLU. While the case was pending, 347 members
in the same bargaining unit disaffiliated for PAFLU and organized the Samahang
Manggagawa ng Pacific Mills, Inc. It was registered with the MOLE, and filed a request for
certification election to be held claiming that it commanded the majority of the workers in
the company, that no CBA was existing, and that more than 30% of the bargaining unit had
given their consent thereto. Pacific Mills objected, alleging that there was still a pending
certification election case between CCLU and PAFLU. The Med-Arbiter dismissed the petition
for certification election, which the BLR sustained.
Issue:

Was the BLR correct in dismissing a petition for certification election despite the fact
that no CBA was then existing and that a majority of the bargaining unit expressed consent
thereto?
Ruling:
No. According to the Court, with both the employer and the majority of the rank-andfile workers in agreement that a certification election should be held, so be it. The last
certification election was held on September 26, 1977. There is no existing CBA. The petition
for a certification election has the written consent of more than 30% of the members of the
bargaining unit. In the light of these facts, Art. 258 of the New Labor Code makes it mandatory
for the Bureau of Labor Relations to conduct a certification election.

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CASE DIGESTS
Registration of Labor organizations
LIBERTY FLOUR MILLS EMPLOYEES, vs. LIBERTY FLOUR MILLS, INC. PHIL.
G.R. No. 58768-70 December 29, 1989
Facts:
Philippine Labor Alliance Council (PLAC) and Liberty Flour Mills, Inc. entered into a
three-year CBA, providing for a daily wage increase of P2.00 for 1974, Pl.00 for 1975 and
another Pl.00 for 1976. The parties agreed to establish a union shop by imposing
"membership in good standing for the duration of the CBA as a condition for continued
employment" of workers. PLAC filed a complaint against the respondent company for nonpayment of the emergency cost of living allowance under P.D. No. 525. A similar complaint
was filed on 1975, this time by Evaristo and Biascan, who apparently were already veering
away from PLAC. After organizing a union caged the Federation of National Democratic
Labor Unions, Evaristo and Biascan filed with the Bureau of Labor Relations a petition for
certification election among the rank-and-file employees of the respondent company. This
new union overwhelmingly won the certification elections. They were, however, dismissed
from the company for organizing such union.
Issue:

Can disaffiliated members of a union claim illegal dismissal despite the CBA
containing a union shop agreement?
Ruling:
No. The Court held that the union shop clause was validly enforced against them and
justified the termination of their services. It is the policy of the State to promote unionism to
enable the workers to negotiate with management on the same level and with more
persuasiveness than if they were to individually and independently bargain for the
improvement of their respective conditions. To this end, the Constitution guarantees to them
the rights "to self-organization, collective bargaining and negotiations and peaceful
concerted actions including the right to strike in accordance with law." There is no question
that these purposes could be thwarted if every worker were to choose to go his own separate
way instead of joining his co-employees in planning collective action and presenting a united
front when they sit down to bargain with their employers. It is for this reason that the law
has sanctioned stipulations for the union shop and the closed shop as a means of encouraging
the workers to join and support the labor union of their own choice as their representative
in the negotiation of their demands and the protection of their interest vis-a-vis the
employer.

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CASE DIGESTS
BRILLO vs BUKLATAN
G.R. No. L-2213, October 14, 1950
Facts:

This case consists of four cause of actions filed by the president of the union Leyte
United Workers. First, the LUW, a duly registered labor union, sought to recover from several
defendants the amounts of money collected as contribution to the funds of LUW. Second, it
seeks to enforce the alleged agreement with the International Trust Corporation and Pacific
Copra Export Company to increase the wages by 20% of the member-employees, which the
union abandoned upon filing a complaint with the CIR for a wage increase of 50% instead.
Third and fourth, this case involved an action for certiorari and for declaratory relief against
the Secretary of Labor for granting licenses to the unions Leyte Stevedoring and Terminal
Dock Workers Union and the Visayan Workers Union, the registration of which is alleged to
be detrimental to Leyte United Workers because these new labor unions were organized by
old members of the Leyte United Workers, with the aid of the employers, and the result may
be the death of the Leyte United Workers.
Issues:
1) Does a labor union have the capacity to sue in its own name?
2) Can a labor union enforce an agreement, which it abandoned, with the CIR?
3) Did the Secretary of Labor commit grave abuse of discretion when it granted
licenses to new labor unions alleged to be detrimental to an existing labor union?
Ruling:
1) Yes. A labor union, being duly registered [under then CA No. 213] has a capacity
to sue and therefore the action should be brought in its own name.
2) No. Under the circumstances, the Leyte United Workers cannot now be allowed to
press upon the supposed agreement of 20% increase which was abandoned in the
Court of Industrial Relations which is the court with the jurisdiction over that
subject matter.
3) No. The petition for certiorari does not lie because the Secretary of Labor did not
exercise judicial function. Furthermore, there is no allegation that the new labor
unions have the purpose of undermining or destroying the constituted
Government or of violating any law or laws of the Philippines, and therefore, they
cannot be denied registration and permission to operate under section 2, of CA
No. 213.

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CASE DIGESTS
VASSAR INDUSTRIES EMPLOYEES UNION vs ESTRELLA
G.R. No. L-46562 March 31, 1978
Facts:

A CBA was existing with ALU and Vassar Industries. Prior to its expiration, 111 out of
150 employees disaffiliated from ALU and formed their own union VIEU. They applied for
registration with the BLR, complying with all the legal requirements. They then filed a
petition for certification election. The Med-Arbiter denied their petition on the ground that
the union was not registered with the Department of Labor. The BLR also denied
registration, saying that there is still an existing bargaining agent in the company.
Issue:
Can a labor unions registration be denied even if the requirements of the law were
already complied?
Ruling:
No. In one case, the SC held that mandamus lies to compel the registration of a labor
organization. There is both a constitutional and statutory recognition that laborers have the
right to form unions to take care of their interests vis-a-viz their employees. Their freedom
to form organizations would be rendered nugatory if they could not choose their own leaders
to speak on their behalf and to bargain for them." It cannot be otherwise, for the freedom to
choose which labor organization to join is an aspect of the constitutional mandate of
protection to labor. There is then the incontrovertible right of any individual to join an
organization of his choice. That option belongs to him. A workingman is not to be denied that
liberty. He may be, as a matter of fact, more in need of it the institution of collective
bargaining as an aspect of industrial democracy is to succeed. No obstacle that may possibly
thwart the desirable objective of militancy in labor's struggle for better terms and conditions
is then to be placed on his way. Once the fact of disaffiliation has been demonstrated beyond
doubt, as in this case, a certification election is the most expeditious way of determining
which labor organization is to be the exclusive bargaining representative.
Nonetheless, it is quite obvious that when the two parties entered into such a
collective bargaining agreement, such a move was motivated by the desire to impart a moot
and academic aspect to this petition. It should not therefore elicit the approval of this Court,
especially so as upon the expiration oil the collective contract, it is made "the duty of both
parties to keep the status quo and to continue in full force and effect the terms and conditions
of the existing agreement during the sixty-day period and/or until a new agreement is
reached by the parties." With a pending petition for certification, any such agreement
entered into by management with a labor organization is fraught with the risk that such a
labor union may not be chosen thereafter as the collective bargaining representative.

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CASE DIGESTS
ADAMSON AND ADAMSON vs CIR
G.R. No. L-35120 January 31, 1984
Facts:

The Adamson and Adamson, Inc. Supervisory Union (FFW) informed the petitioner
about its having organized on the same date that the Adamson and Adamson, Inc. Salesmen
Association (FFW) advised the petitioner that the rank and file salesmen had formed their
own union. During pendency of this petition, the rank-and-file employees formed their own
union, naming it Adamson and Adamson Independent Workers (FFW). The company argues
that the affiliation of the respondent union of supervisors, the salesmen's association, and
the Adamson and Adamson independent Workers Union of rank and file personnel with the
same national federation (FFW) violates Section 3 of the Industrial Peace Act, as amended,
because (1) it results in the indirect affiliation Of supervisors and rank-and-file employees
with one labor organization; (2) since respondent union and the unions of non-supervisors
in the same company are governed by the same constitution and by-laws of the national
federation, in practical effect, there is but one union; and (3) it would result in the respondent
union's losing its independence because it becomes the alter ego of the federation.
Issue:

Can the affiliation of a supervisory employees union with the same federation where
the rank-and-file union of the same employer be valid?
Ruling:
Yes. The inclusion of FWW in the registration is merely to stress that they are its
affiliates at the time of registrations. It does not mean that said local unions cannot stand on
their own Neither can it be construed that their personalities are so merged with the mother
federation that for one difference or another they cannot pursue their own ways,
independently of the federation. This is borne by the fact that FFW, like other federation is a
legitimate labor organization separate and distinct from its locals and affiliates and to
construe the registration certificates of the aforecited unions, would tie up any affiliates to
the shoe string of the federation. The Adamson and Adamson Supervisory Union and the
Adamson and Adamson, Inc., Salesmen Association (FFW), have their own respective
constitutions and by-laws. They are separately and independently registered of each other.
Both sent their separate proposals for collective bar agreements with their employer. There
could be no employer influence on rank-and-file organizational activities nor there could be
any rank and file influence on the supervisory function of the supervisors because of the
representation sought to be proscribed.

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CASE DIGESTS
DEMOCRATIC LABOR ASSOCATION vs CEBU STEVEDORING CO., INC.
G. R. No. L-10321, February 28, 1958
Facts:

Cebu Stevedores Association filed a petition for certification election to determine the
collective bargaining unit to represent the employees of Cebu Stevedoring Co. Three labor
unions intervened Democratic Labor Association, Cebu Trade Union, and Katubsanan sa
Mamumuo. Hearings were held, and the judge ruled that the Department of Labor conduct
an election among the casual laborers, designating DLA and CTU as the only labor unions
that may be voted. Cebu Stevedores Association filed a motion for reconsideration, disputing
the finding of the trial judge that there should be two collective bargaining units that would
represent two sets of workers based on their terms of employment, as well as the finding
that the two labor unions above-mentioned are ineligible to take part or be voted for in the
certification election.
Issue:

Considering that there are two sets of employees or laborers working within an
employer, one regular and permanent and the other casual or temporary, is it proper and,
convenient that there should be one collective bargaining unit for each?
Ruling:
Yes. 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 nor conclusive.
There are other factors that can be considered depending upon the circumstances of each
case. The Court in this case laid down four factors in determining the proper constituency of
the bargaining unit: (1) will of employees (Globe Doctrine); (2) affinity and unity of
employees' interest, such as substantial similarity of work and duties, or similarity of
compensation and working conditions; (3) prior collective bargaining history; and (4)
employment status, such as temporary, seasonal and probationary employees. In this case,
the mere existence of a prior collective bargaining history is not a decisive factor in the
determination of a collective bargaining agency. Where the circumstances had been so
altered or where the reciprocal relationship of the employer and the particular bargaining
unit has been so changed that the past mutual experience cannot be considered as a reliable
guide to the present determination of the bargaining unit, then prior collective bargaining
history should be brushed aside and only the prevailing facts and factors should control the
determination. We have also seen that an important factor to consider is the employment
status of the workers and employees to be affected by the collective bargaining agency. The
positions or categories of work to which, they belong should also be considered. This rule
requires that temporary, seasonal or probational employees be grouped as one category and
be treated separately from permanent employees. The test of the grouping is community or
mutuality of interest. And 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.
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CASE DIGESTS
LOPEZ SUGAR CORPORATION vs SECRETARY OF LABOR
G.R. No. 93117, August 1, 1995
Facts:

The National Congress of Unions in the Sugar Industry of the Philippines-TUCP


(NACUSIP-TUCP) filed with the DOLE a petition for direct certification or for certification
election to determine the exclusive bargaining representative of the supervisory employees
in Lopez Sugar Corporation. LSC opposed, saying that the petition was only meant to harass
the company and that the rank-and-file employees are were unaware of the petition. The
Med-Arbiter was left with no option but to order the conduct of the certification election
immediately upon the filing of the petition, holding that the subsequent disaffiliation or
withdrawals of members did not adversely affect the standing of the petition. LSC appealed
to the Secretary of Labor, who affirmed the Med-Arbiters decision, by saying that the holding
by the Med-Arbiter of a certification election is mandatory under Article 257 of the Labor
Code; that the subsequent withdrawals and disauthorization/disaffiliation of some
supervisory personnel in the petition for certification election could not bar its being
granted; and that a certification election is still the most appropriate means to finally settle
the issue of representation.
Issue:

Does the provision of Article 257 of the Labor Code deem mandatory the MedArbiters order to conduct a certification election upon filing of the petition?
Ruling:
No. According to the Court, while Article 257 directs the automatic conduct of a
certification election in an unorganized establishment, it also requires that the petition for
certification election must be filed by a legitimate labor organization. Indeed, the law did not
reduce the Med-Arbiter to an automaton which can instantly be set to impulse by the mere
filing of a petition for certification election. He is still tasked to satisfy himself that all the
conditions of the law are met, and among the legal requirements is that the petitioning union
must be a legitimate labor organization in good standing.

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CASE DIGESTS
PROGRESSIVE DEVELOPMENT CORPORATION vs SECRETARY OF LABOR
G.R. No. 96425 February 4, 1992
Facts:

KILUSAN-TUCP filed with the DOLE a petition for certification election among the
rank-and-file employees of Progressive Development Corporation (PDC). PDC filed its
opposition, saying the KILUSAN-TUCP has no legal personality to file such petition,
contending that the local union Progressive Development Employees Union (PDEU) has not
complied with the requirements set by law (submission of CBL, list of officers and members,
and books of accounts). The Med-Arbiter held that a certification election should be
conducted and that there was substantial compliance of the necessary requirements due to
the mere issuance of the charter certificate by the federation in favor of the local union.
Issue:

Is a local union merely granted with a charter certificate by the federation eligible to
file a petition for certification election?
Ruling:
Yes. When an unregistered union becomes a branch, local or chapter of a federation,
some of the requirements for registration are no longer required. The intent of the law in
imposing lesser requirements in the case of the branch or local of a registered federation or
national union is to encourage the affiliation of a local union with the federation or national
union in order to increase the local union's bargaining powers respecting terms and
conditions of labor. A local or chapter therefore becomes a legitimate labor organization only
upon submission of the following to the BLR: 1) A charter certificate, within 30 days from its
issuance by the labor federation or national union, and 2) The constitution and by-laws, a
statement on the set of officers, and the books of accounts all of which are certified under
oath by the secretary or treasurer, as the case may be, of such local or chapter, and attested
to by its president. Absent compliance with these mandatory requirements, the local or
chapter does not become a legitimate labor organization. However, in the case at bar, the
failure of the secretary of PDEU-Kilusan to certify the required documents under oath is fatal
to its acquisition of a legitimate status.
The mother union, acting for and in behalf of its affiliate, had the status of an agent
while the local union remained the basic unit of the association, free to serve the common
interest of all its members subject only to the restraints imposed by the constitution and bylaws of the association. Thus, where as in this case the petition for certification election was
filed by the federation which is merely an agent, the petition is deemed to be filed by the
chapter, the principal, which must be a legitimate labor organization. The chapter cannot
merely rely on the legitimate status of the mother union.

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CASE DIGESTS
VILLAR vs INCIONG
GR No. L-50283-84, April 20, 1983
Facts:

Amigo Employees Union (AEU)-PAFLU had a CBA with Amigo Manufacturing Inc.
Within the last 60 days of the CBA, some members, comprising only the minority, decided to
disaffiliate with PAFLU and designated themselves as the AEU. They then filed a petition for
certification election. PAFLU demanded for the dismissal of these employees, invoking the
security clause in the CBA. Petitioners in this case insist that their disaffiliation from PAFLU
and filing of a petition for certification election are not acts of disloyalty but merely an
exercise of their right to self-organization. They contend that this was done within the 60day period when questions of representation may freely be raised.
Issue:

Does the union formed by a minority of the disaffiliating union members acquire a
legal personality to validly file a petition for certification election?
Ruling:
No. Under Article 257 of the Labor Code and Section 3, Rule 2, Book 2 of its
Implementing Rules, questions of exclusive bargaining representation are entertainable
within the sixty (60) days prior to the expiry date of an existing CBA, and that they did file a
petition for certification election within that period. But the petition was filed in the name of
the Amigo Employees Union which had not disaffiliated from PAFLU, the mother union.
Petitioners being a mere minority of the local union may not bind the majority members of
the local union. Had petitioners merely disaffiliated from the. Amigo Employees UnionPAFLU, there could be no legal objections thereto for it was their right to do so. But what
petitioners did by the very clear terms of their "Sama-Samang Kapasiyahan" was to
disaffiliate the Amigo Employees Union-PAFLU from PAFLU, an act which they could not
have done with any effective consequence because they constituted the minority in the
Amigo Employees Union-PAFLU.

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CASE DIGESTS
ALLIANCE OF DEMOCRATIC FREE LABOR ORGANIZATION (ADFLO) vs LAGUESMA
G.R. No. 108625, March 11, 1996
Facts:

ADFLO filed an application for registration as a national federation. After proper


evaluation of its application and finding ADFLO to have complied with the requirements for
registration pursuant to Articles 234 and 237 of the Labor Code, the BLR issued its certificate
of registration. The Confederation of Labor and Allied Social Services (CLASS) filed a petition
for the cancellation of the Registration Certificate issued to ADFLO, allegedly for submitting
the requirements which were simulated. The BLR ordered for the cancellation of ADFLOs
registration, allegedly without ruling on the admissibility of the exhibits of CLASS and
without further hearing.
Issue:

Was there a violation of due process in a case for cancellation of union registration
when the BLR Director did not rule on the admissibility of the evidence submitted by the
parties?
Ruling:
Yes. Due process is mandated by the Constitution. Also, the Labor Code provides that
"the certificate of registration of any legitimate labor organization, whether national or local,
shall be cancelled by the Bureau if it has reason to believe, after due hearing, that the said
labor organization no longer meets one or more of the requirements herein prescribed." The
cancellation of a certificate of registration is the equivalent of snuffing out the life of a labor
organization. For without such registration, it loses as a rule its rights under the Labor
Code. Under the circumstances, petitioner was indisputably entitled to be heard before a
judgment could be rendered cancelling its certificate of registration. It will be noted that the
Director of the Bureau of Labor Relations never made any ruling on whether the exhibits
submitted by CLASS were admissible in evidence. That being so, the said exhibits cannot be
made use of in deciding the case. And, in the absence of this evidence, there is nothing in the
record to support the assailed decision. Therefore, the latter must necessarily fall for lack of
substantial basis. "A decision with absolutely nothing to support it is a nullity."

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CASE DIGESTS
ITOGON-SUYOC MINES, INC. vs SANGILO-ITOGON WORKERS UNION
G.R. No. L-24189, August 30, 1968
Facts:

Itogon-Suyoc Mines, Inc., through its general superintendent Claude Fertig, had been
dismissing from its employ members of respondent Sagilo-Itogon Workers' Union. Fiftyfour members of Sagilo were already fired when Department of Labor conciliators
conferred with petitioner's representative to explore the possibility of their reinstatement.
Petitioner refused reinstatement, alleged that dismissal of the 54 was for cause. Sensing that
its members were being eased out of employment one by one, Sagilo called a strike,
accompanied by picketing carried out at or near petitioner's mine premises in Itogon. Work
was paralyzed. The union filed a suit against the company for the illegal dismissal of one of
its members. The petitioner company contends that the union ceased to be a legitimate labor
union when the Department of Labor cancelled the former's registration permit for failure
to comply with statutory requirements. Contrariwise Sagilo avers that at the time the
complaint below was filed it was a legitimate labor organization, and continues to be so. Be
it noted that in the case for cancellation, no final decision has been made.
Issue:

Does the labor union lose its capacity to sue upon failure to submit the reportorial
requirements and without a final order providing its cancellation?
Ruling:
No. The Court perceived of no reason why the judgment in favor of the fifteen
individual respondent laborers should be overturned simply because the union of which
they were members ceased to be a legitimate labor union. It cannot be disputed that CIR's
prosecutor brought this case not merely for Sagilo; it was also on behalf of the 107
employees enumerated therein. This accounts for the fact that CIR's judgment for
reinstatement and backpay was rendered in favor of the fifteen respondent laborers. To
accept petitioner's argument as valid is to shunt aside substance to give way to form. Error,
if any, was harmless. It does not affect the substantial rights of the parties in interest. It is no
ground for reversal. At this stage this Court may even strike out Sagilo-Itogon Workers'
Union and leave the fifteen individual respondents alone. So it is, that there is no order final
in character cancelling Sagilo's registration permit and dropping its name from the roster
of legitimate labor unions. Sangilo's status does not appear in the record to have changed.
Therefore, Sagilo still enjoys all the rights accorded by law to a legitimate labor union. One
of those rights is the right to sue.

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CASE DIGESTS
PAFLU vs SECRETARY OF LABOR
G.R. No. L-22228, February 27, 1969
Facts:

The Registration of Labor Organizations issued a notice of hearing on the matter of


cancellation of the registration of the Social Security System Employees Association (SSSEA)
which was affiliated with PAFLU for failure to furnish the BLR with the reports of finances
and list of officers after the election. The Registrar, upon the submission of the required
memorandums, ordered a decision to cancel the registration of SSSEA. PAFLU then filed this
petition for certiorari and prohibition saying that RA 875 violates the freedom of assembly
and association, and that Section 23 of the law providing for the cancellation of union
registration upon failure to submit the necessary reportorial requirements was deemed
repealed when the Philippines ratified the ILO Convention No. 87.
Issue:
Does the provision of the law providing for the cancellation of union registration
violate the unions freedom to assembly and association?
Ruling:
No. basis. The registration prescribed in paragraph (b) of said section is not a
limitation to the right of assembly or association, which may be exercised with or without
said registration. The latter is merely a condition sine qua non for the acquisition of legal
personality by labor organizations, associations or unions and the possession of the "rights
and privileges granted by law to legitimate labor organizations". The Constitution does not
guarantee these rights and privileges, much less said personality, which are mere statutory
creations, for the possession and exercise of which registration is required to protect both
labor and the public against abuses, fraud, or impostors who pose as organizers, although
not truly accredited agents of the union they purport to represent. Such requirement is a
valid exercise of the police power, because the activities in which labor organizations,
associations and union of workers are engaged affect public interest, which should be
protected. Furthermore, the obligation to submit financial statements, as a condition for the
non-cancellation of a certificate of registration, is a reasonable regulation for the benefit of
the members of the organization, considering that the same generally solicits funds or
membership, as well as oftentimes collects, on behalf of its members, huge amounts of money
due to them or to the organization.

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CASE DIGESTS
TABLANTE-TUNGOL ENTERPRISES vs NORIEL
G.R. No. L-47848, August 23, 1978
Facts:

Because the labor union had engaged in an illegal strike, the petitioner company in
this case seeks for the cancellation of its registration, on the basis of the provision of the law
which states that acting as a labor contractor or engaging in the "cabo" system, or otherwise
engaging in any activity prohibited by law is a ground for the cancellation of union
registration.
Issue:

Can the engagement of a labor union in an illegal strike be a valid ground for the
cancellation of its union registration?
Ruling:
No. The phrase engaging in any activity prohibited by law should not be interpreted
or construed to include an illegal strike engaged into by any union. This is so because the
phrase 'or otherwise engaging in any activity prohibited by law' should be construed to mean
such activity engaged into by a union that partakes of the nature of a labor contractor or
'cabo' system. The law does not intend to include in the said phrase illegally declared strike
simply because strike per se is legal. Also, if the law intends to include illegally declared
strike, the same could have been expressly placed therein as had been previously done in
Presidential Decree No. 823." Clearly, an awareness of the relevance of the maxims noscitur
a sociis and ejusdem generis ought to have cautioned counsel for petitioner to shy away from
this approach.

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CASE DIGESTS
BENGUET CONSOLIDATED INC. vs BCI EMPLOYEES AND WORKERS UNION-PAFLU
G.R. No. L-24711, April 30, 1968
Facts:

The Benguet-Balotoc Workers Union (BBWU) entered into a CBA with Benguet
Consolidated Inc. Before its expiration, a certification election was conducted by the
Department of Labor among all the rank-and-file employees of Benguet. BCI Employees and
Workers Union (BCIEWU) was then certified as the sole and exclusive bargaining
representative in the company. As a result, allegedly, of the strike staged by (BCIEWU) and
its members, the company had to incur expenses for the rehabilitation of mine openings,
repair of mechanical equipment, cost of pumping water out of the mines, value of explosives,
tools and supplies lost and/or destroyed, and other miscellaneous expenses. So, the company
sued the union, PAFLU and their respective Presidents to recover said amount in the Court
of First Instance of Manila, on the sole premise that said defendants breached their
undertaking in the existing CONTRACT not to strike during the effectivity thereof. The
company invokes the Doctrine of Substitution, which states that if a bargaining agent other
than the union or organization that executed the contract, is elected, said new agent would
have to respect said contract, but that it may bargain with the management for the
shortening of the life of the contract if it considers it too long, or refuse to renew the contract
pursuant to an automatic renewal clause.
Issue:

Can the principle of substitution be validly invoked by the company against the new
bargaining representative in order to recover damages resulting from a strike staged by the
latters members?
Ruling:
No. The Court said that the doctrine merely states that even during the effectivity of
a collective bargaining agreement executed between employer and employees thru their
agent, the employees can change said agent but the contract continues to bind them up to its
expiration date. They may bargain however for the shortening of said expiration date. In
formulating the "substitutionary" doctrine, the only consideration involved was the
employees' interest in the existing bargaining agreement. The agent's interest never entered
the picture. Stated otherwise, the "substitutionary" doctrine only provides that the
employees cannot revoke the validly executed collective bargaining contract with their
employer by the simple expedient of changing their bargaining agent. And it is in the light of
this that the phrase "said new agent would have to respect said contract" must be
understood. It only means that the employees, thru their new bargaining agent, cannot
renege on their collective bargaining contract, except of course to negotiate with
management for the shortening thereof. The "substitutionary" doctrine, therefore, cannot be
invoked to support the contention that a newly certified collective bargaining agent
automatically assumes all the personal undertakings like the no-strike stipulation here
in the collective bargaining agreement made by the deposed union.
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CASE DIGESTS
PEOPLES INDUSTRIAL AND COMMERCIAL EMPLOYEES AND WORKERS
ORGANIZATION (FFW)-PICEWO vs PICC
GR No. L-27687, March 15, 1982
Facts:

The Federation of Tenants and Laborers Organization (FTLO) Rizal Chapter entered
into a CBA with Peoples Industrial and Commercial Corporation (PICC), including provisions
on No Strike, No Lockout and a Union Security Maintenance Shop. Subsequently, with the
knowledge of PICC, an election of officers of FTLO Rizal Chapter was conducted. Afterwards,
51 out of 60 employees executed a certification stating that they are members of FTLO but
they have changed their name to PICEWO and affiliated with the Federation of Free Workers
(FFW). Said certification did not include any reason for the change of name. The employees
were then charged with disloyalty, paving its way to their termination from work. The
employee contend that no disloyalty is involved, since what they did was merely to change
the name FTLO to PICEWO.
Issue:

Can a change of union name be construed as disloyalty which merits the dismissal of
the union members from work?
Ruling:
No. While the Court was not convinced with the argument that the act was only a
change of name and affiliated it with the FFW, it ruled that such act would not warrant the
dismissal of the employees. The Court said that the validity of dismissals pursuant to the
security clause of a CBA hinges on the validity of the disaffiliation of the local union from the
federation. The federation had the status of an agent, acting for and in behalf of its affiliate,
while the local union remained the basic unit of the association free to serve the common
interest of all its members including the freedom to disaffiliate when the circumstances
warrant. The right of the local members to withdraw from the federation and to form a new
local depends upon the provisions of the unions CBL and charter. In the absence of
enforceable provisions in the federations constitution preventing disaffiliation of a local
union, a local may severe its relationship with its parent. In this case, there was nothing
shown in the records nor was it claimed by the federation that the local union was expressly
forbidden to disaffiliate. Except for the union security clause, the federation claims no other
ground in expelling those who signed the certification. There is no merit to the contention of
the federation that the act of disaffiliation is disloyalty to the union. The federation and the
union are two different entities and it was the federation which actively initiated the
dismissal of the petitioners. A local union does not owe its existence to the federation to
which it affiliated. It is a separate and distinct voluntary association owing its creation and
existence to the will of its members.

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CASE DIGESTS
TROPICAL HUT FOOD EMPLOYEES UNION vs TROPICAL HUT FOOD MARKET
G.R. No. L-43495-99, January 20, 1990
Facts:

The rank-and-file workers of Tropical Hut Food Market formed a local union which
they named as Tropical Hut Food Employees Union, and sought affiliation with the National
Association of Trade Unions (NATU). It appears, however, that NATU was not registered as
a federation with the Department of Labor. A CBA between THEU-NATU and the company
was then executed, which included a union shop clause. NATU then received a letter from
the local union of the latters intention to disaffiliate from the former. With this disaffiliation,
the member-employees were terminated from work, allegedly due to the violation of the
union shop clause.
Issue:

Can member-employees of a union which disaffiliated with the federation be validly


dismissed pursuant to a union shop clause in the existing CBA?
Ruling:
No. The validity of the dismissals pursuant to the union security clause in the
collective bargaining agreement hinges on the validity of the disaffiliation of the local union
from the federation. The right of a local union to disaffiliate from its mother federation is
well-settled. A local union, being a separate and voluntary association, is free to serve the
interest of all its members including the freedom to disaffiliate when circumstances warrant.
This right is consistent with the constitutional guarantee of freedom of association. The
inclusion of the word NATU after the name of the local union THEU in the registration with
the Department of Labor is merely to stress that the THEU is NATU's affiliate at the time of
the registration. It does not mean that the said local union cannot stand on its own. Neither
can it be interpreted to mean that it cannot pursue its own interests independently of the
federation. A local union owes its creation and continued existence to the will of its members
and not to the federation to which it belongs. The alleged non-compliance of the local union
with the provision in the NATU Constitution requiring the service of three-month notice of
intention to withdraw did not produce the effect of nullifying the disaffiliation for the
following grounds: firstly, NATU was not even a legitimate labor organization, it appearing
that it was not registered at that time with the Department of Labor, and therefore did not
possess and acquire, in the first place, the legal personality to enforce its constitution and
laws, much less the right and privilege under the Labor Code to organize and affiliate
chapters or locals within its group, and secondly, the act of non-compliance with the
procedure on withdrawal is premised on purely technical grounds which cannot rise above
the fundamental right of self-organization.

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CASE DIGESTS
VOLKSCHEL LABOR UNION vs BLR
G.R. No. L-45824, June 19, 1985
Facts:

Volkschel Labor Union (VLU) was once affiliated with the Associated Labor Union for
Metal Workers (ALUMETAL). Both unions, using the name Volkschel Labor Union Associated
Labor Union for Metal Workers, jointly entered into a collective bargaining agreement with
respondent companies. A majority of VLU's members decided to disaffiliate from respondent
federation in order to operate on its own as an independent labor group pursuant to Article
241. A resolution was adopted and signed by petitioner's members revoking their check-off
authorization in favor of ALUMETAL and notices thereof were served on ALUMETAL and
respondent companies. ALUMETAL wrote respondent companies advising them to continue
deducting union dues and remitting them to said federation. With this, the respondent
companies sought the legal opinion of the respondent Bureau as regards the controversy
between the two unions. The BLR held that the disaffiliation was legal, but the members
should continue paying their dues to ALUMETAL in the concept of agency fees.
Issue:
Is the federation still entitled to union dues payments from the union's members
notwithstanding their disaffiliation from said federation?
Ruling:
Yes. A local union which has validly withdrawn from its affiliation with the parent
association and which continues to represent the employees of an employer is entitled to the
check-off dues under a collective bargaining contract. ALUMETAL is entitled to receive the
dues from respondent companies as long as petitioner union is affiliated with it and
respondent companies are authorized by their employees (members of petitioner union) to
deduct union dues. Without said affiliation, the employer has no link to the mother union.
The obligation of an employee to pay union dues is coterminous with his affiliation or
membership. The employees' check-off authorization, even if declared irrevocable, is good
only as long as they remain members of the union concerned." A contract between an
employer and the parent organization as bargaining agent for the employees is terminated
by the disaffiliation of the local of which the employees are members. Respondent companies
therefore were wrong in continuing the check-off in favor of respondent federation since
they were duly notified of the disaffiliation and of petitioner's members having already
rescinded their check-off authorization.

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CASE DIGESTS
DE LA SALLE UNIVERSITY vs DE LA SALLE UNIVERSITY EMPLOYEES ASSOCIATION
(DLSUEA-NAFTEU)
G.R. No. 169254, August 23, 2012
Facts:

De La Salle University was being accused of unfair labor practice due to its refusal to
bargain collectively with the De La Salle University Employees Association (DLSUEANAFTEU). Petitioner institution contends that its refusal to bargain collectively is justified
by the finding of the Labor Arbiter that there is an absolute void in the leadership of the
union. Also, DLSU opened a savings account for the union where all the collected union dues
and agency fees will be deposited and held in trust for the union. Subsequently, an election
of union officers was held pursuant to an order by the Regional Director.
Issues:

Is the employers refusal to bargain collectively justified by a void leadership in the

union?
Ruling:
No. The Court quoted the findings of the Secretary of Labor, saying that the issue of
union leadership is distinct and separate from the duty to bargain. It is then guilty of unfair
labor practice. The official determination of the BLR Director, saying that there was actually
no void leadership, removed whatever cloud of doubt on the authority of the incumbent to
negotiate for and in behalf of the union as the bargaining agent of the covered employees.
Furthermore, this issue of void leadership has already been long extinguished upon the
conduct of the election of the union officers.

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CASE DIGESTS
BENJAMIN VICTORIANO vs ELIZALDE ROPE WORKERS' UNION
G.R. No. L-25246, September 12, 1974
Facts:

Benjamin Victoriano is a member of the Iglesia ni Cristo (INC). He was also a member
of the Elizalde Rope Workers Union which had a CBA with Elizalde Rope Factory, Inc.
containing a closed shop provision. Being a member of a religious sect that prohibits the
affiliation of its members with any labor organization, Victoriano presented his resignation
to the Union. Thereupon, the Union asked the employer to separate Victoriano from his
employment in view of the fact that the latter was resigning from the Union as a member. In
this petition, the Union asserts that the closed shop provision in the CBA cannot be violative
of religious freedom.
Issue:

Does a closed shop agreement violate the right to religious freedom of an employee
belonging to a sect which prohibits the affiliation of its members with labor organizations?
Ruling:
Yes. The exemption clause in the (old) Labor Code provides that members of religious
sects with such prohibition cannot be compelled or coerced to join labor unions even when
said unions have closed shop agreements with employers; that in spite of any closed shop
agreement, members of said religious sectors cannot be refused employment or dismissed
from their jobs on the sole ground that they are not members of the union. The Court
emphasized that the free exercise of religious profession or belief is superior to contract rights.
In case of conflicts, the latter must, therefore, yield to the former.

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CASE DIGESTS
HOLY CHILD CATHOLIC SCHOOL vs HON. PATRICIA STO. TOMAS
G.R. No. 179146, July 23, 2013
Facts:

A petition for certification election was filed by private respondent Pinag-Isang Tinig
at Lakas ng Anakpawis Holy Child Catholic School Teachers and Employees Labor Union
(HCCS-TELUPIGLAS). Petitioner Holy Child Catholic School (HCCS) Petitioner raised that
members of the union do not belong to the same class; it is not only a mixture of managerial,
supervisory, and rank-and-file employees as three (3) are vice-principals, one (1) is a
department head/supervisor, and eleven (11) are coordinators but also a combination of
teaching and non-teaching personnel as twenty-seven (27) are non-teaching personnel. It
insisted that, for not being in accord with Article 245 of the Labor Code, the union is an
illegitimate labor organization lacking in personality to file a petition for certification
election and an inappropriate bargaining unit for want of community or mutuality of
interest.
Issue:

Can the commingling of supervisory and managerial and rank-and-file employees in


a union be a ground for the cancellation of its petition for certification election?
Ruling:
No. The inclusion in a union of disqualified employees is not among the grounds for
cancellation, unless such inclusion is due to misrepresentation, false statement or fraud
under the circumstances enumerated in Sections (a) and (c) of Article 239 of the Labor Code.
The employer cannot collaterally attack the legitimacy of the union by praying for the
dismissal of the petition for certification election. As stated by the Court, Except when it is
requested to bargain collectively, an employer is a mere bystander to any petition for
certification election; such proceeding is non-adversarial and merely investigative, for the
purpose thereof is to determine which organization will represent the employees in their
collective bargaining with the employer. The choice of their representative is the exclusive
concern of the employees; the employer cannot have any partisan interest therein; it cannot
interfere with, much less oppose, the process by filing a motion to dismiss or an appeal from
it; not even a mere allegation that some employees participating in a petition for certification
election are actually managerial employees will lend an employer legal personality to block
the certification election. The employer's only right in the proceeding is to be notified or
informed thereof. Further, the determination of whether union membership comprises
managerial and/or supervisory employees is a factual issue that is best left for resolution in
the inclusion-exclusion proceedings, which has not yet happened in this case so still
premature to pass upon. In case of alleged inclusion of disqualified employees in a union,
the proper procedure for an employer like petitioner is to directly file a petition for
cancellation of the unions certificate of registration due to misrepresentation, false
statement or fraud under the circumstances enumerated in Article 239 of the Labor Code, as
amended.
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CASE DIGESTS
NELSON A. CULILI vs EASTERN TELECOMMUNICATIONS PHILIPPINES, INC.,
G.R. No. 165381, February 9, 2011
Facts:

Due to financial losses, employer Eastern Telecommunications Philippines, Inc.


(ETPI) was compelled to reduce its workforce only to those that were necessary and which
it can sustain. With this, ETPI offered a Special Retirement Program to those who will be laid
off. Nestor Culili, a Senior Technician, was among those employees whose positions were
already considered redundant. Culili asserts that the employer was guilty of unfair labor
practice because his functions were sourced out to labor-only contractors and he was
discriminated against when his co-employees were treated differently when they were each
offered an additional motorcycle to induce them to avail of the Special Retirement Program.
Issue:

Is an employer guilty of unfair labor practice when it terminated an employee because


of redundancy of job positions?
Ruling:
No. In the past, the Court ruled that "unfair labor practice refers to acts that violate
the workers' right to organize. The prohibited acts are related to the workers' right to selforganization and to the observance of a CBA." It have likewise declared that "there should be
no dispute that all the prohibited acts constituting unfair labor practice in essence relate to
the workers' right to self-organization. Thus, an employer may only be held liable for unfair
labor practice if it can be shown that his acts affect in whatever manner the right of his
employees to self-organize. In the case at bar, there is no showing that ETPI, in implementing
its Right-Sizing Program, was motivated by ill will, bad faith or malice, or that it was aimed
at interfering with its employees right to self-organize. In fact, ETPI negotiated and
consulted with ETEU before implementing its Right-Sizing Program. Culili has the burden of
proof to present substantial evidence to support the allegation of unfair labor practice. Culili
failed to discharge this burden and his bare allegations deserve no credit.

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CASE DIGESTS
ASSOCIATED LABOR UNION vs JUDGE AMADOR E. GOMEZ, et. al.
G.R. No. L-25999, February 9, 1967
Facts:

ALU and SUGECO entered into a CBA. Prior to its expiry, renewal was sought through
negotiations but SUGECOs employees resigned from the union, which in turn broke the
negotiations. Request was made that unless the 12 resigned employees could produce a
clearance from the Union, they be not allowed in the meantime to report for work. SUGECO
made it understood that after the 12 men would have returned into the Union fold, said
company would then be "in a position to negotiate again for the renewal of the collective
bargaining contract." The Union wrote Sugeco, charged the latter with bargaining in bad
faith, and its supervisors with "campaigning for the resignation of members of this Union".
SUGECO sought recourse from the CFI to enjoin the strike engaged by the union. Judge Gomez
issued an ex parte writ of preliminary injunction. The union also lodged with the CIR a charge
for unfair labor practice against SUGECO, averring that the employers coerced and exerted
pressure upon the union members to resign, as they did resign, from the Union; and that such
resignations were seized upon by SUGECO to refuse further negotiations with the Union. In
this petition, the union assails the jurisdiction of the CFI over the complaint for injunction.
Issue:

Is the CFI lodged with jurisdiction over ULP cases and its ancilliary remedies?

Ruling:

No. The coercion or cajolery of employees heretofore described, by management or


union, is unfair labor practice. Therefore, the alleged act of coercing or instigating union
members to resign therefrom is clearly within the coverage of the prescription. It is aimed at
crippling the Union, throwing it off balance, destroying its bargaining authority. It is an attack
against the Magna Carta of Labor. By the same token, the charge levelled by Sugeco against
the Union that the latter "is coercing the resigned employees to rejoin the Union" is no less
an unfair labor practice. Jurisdiction then is exclusively vested in the Court of Industrial
Relations. Nor will Sugeco's averment that it suffers damages, by reason of the strike, work
to defeat the CIR's jurisdiction to hear the unfair labor practice charge. Reason for this is that
the right to damages "would still have to depend on the evidence in the unfair labor practice
case" in the CIR. To hold otherwise is to sanction split jurisdiction which is obnoxious
to the orderly administration of justice.

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CASE DIGESTS
GERONIMO Q. QUADRA vs CA
G.R. No. 147593, July 31, 2006
Facts:

Geronimo Q. Quadra was the Chief Legal Officer of respondent Philippine Charity
Sweepstakes Office (PCSO) when he organized and actively participated in the activities of
Philippine Charity Sweepstakes Employees Association (CUGCO), and then later the
Association of Sweepstakes Staff Personnel and Supervisors (CUGCO) (ASSPS [CUGCO]). He
was administratively charged for neglect of duty and misconduct and/or conduct prejudicial
to the interest of the service and was penalized with dismissal. He filed a motion for
reconsideration of the decision of the Civil Service Commission. Also, together with ASSPS
(CUGCO), he filed with the CIR a complaint for unfair labor practice against respondent PCSO
and its officers. The CIR issued its decision finding PCSO guilty of unfair labor practice for
having committed discrimination against the union and for having dismissed petitioner due
to his union activities. In this petition, Quadra assails the decision of the CA on the
jurisdiction of the over claims of moral and exemplary damages. He asserts that the CIR has
jurisdiction to award moral and exemplary damages arising out of illegal dismissal and
unfair labor practice.
Issue:

Does the CIR have jurisdiction over claims for damages arising out of illegal dismissal
and ULP?
Ruling:
YES. In a precedent case, the Court found it proper to award moral and exemplary
damages to illegally dismissed employees as their dismissal was tainted with unfair labor
practice. The filing of a petition for damages before the CIR did not constitute splitting of
cause of action under the Revised Rules of Court. The Revised Rules of Court prohibits parties
from instituting more than one suit for a single cause of action. Splitting a cause of action is
the act of dividing a single cause of action, claim or demand into two or more parts, and
bringing suit for one of such parts only, intending to reserve the rest for another separate
action. The purpose of the rule is to avoid harassment and vexation to the defendant and
avoid multiplicity of suits. The prevailing rule at the time that the action for unfair labor
practice and illegal dismissal was filed and tried before the CIR was that said court had no
jurisdiction over claims for damages. Hence, petitioner, at that time, could not raise the issue
of damages in the proceedings. However, the Supreme Court rendered its ruling in Rheem of
the Philippines, Inc., et al. v. Ferrer, et al. upholding the jurisdiction of the CIR over claims for
damages incidental to an employee's illegal dismissal. Petitioner properly filed his claim for
damages after the declaration by the Court and before the ruling on their case became final.
Such filing could not be considered as splitting of cause of action.

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CASE DIGESTS
GOYA, INC. vs GOYA, INC. EMPLOYEES UNION-FFW
G.R. No. 170054, January 21, 2013
Facts:

Goya, Inc. hired contractual employees from PESO Resources Development


Corporation (PESO) to perform temporary and occasional services in its factory in Parang,
Marikina. Goya, Inc. Employees Union-FFW noted that these contractual workers have been
assigned to work in positions regularly handled by regular workers and union members;
thus it asserted that said hiring is not a management prerogative and in gross violation of
the CBA tantamount to ULP.
Issue:
Does the hiring of contractual workers for work in positions handled by union
members constitute ULP?
Ruling:
Yes, if such hiring violates the CBA between the employer and the workers. To
emphasize, declaring that a particular act falls within the concept of management
prerogative is significantly different from acknowledging that such act is a valid exercise
thereof. The companys act of contracting out/outsourcing is within the purview of
management prerogative. However, such act is not a valid exercise thereof. Obviously, this is
due to the recognition that the CBA provisions agreed upon by the Company and the Union
delimit the free exercise of management prerogative pertaining to the hiring of contractual
employees. The right of the management to outsource parts of its operations is not totally
eliminated but is merely limited by the CBA. The exercise of management prerogative is not
unlimited; it is subject to the limitations found in law, collective bargaining agreement or the
general principles of fair play and justice

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CASE DIGESTS
BAPTISTA, et. al., vs VILLANUEVA, et. al.
G.R. No. 194709, July 31, 2013
Facts:

Petitioners were former members of Radio Philippines Network Employees Union


(RPNEU). They filed an impeachment complaint against their union officers. Subsequently,
several complaints were filed against petitioners for alleged violation of the unions CBL.
After being given opportunity to be heard through pleadings, the unions BOD affirmed the
recommendation to expel the petitioners from the union. They were also terminated from
work in compliance with their CBAs union security clause. Aggrieved, the petitioners filed
complaints for ULP, questioning the legality of their expulsion from the union and their
termination from work. Allegedly, it was ULP on the part of the union and the employer
because the petitioners were denied due process.
Issue:
Is the alleged denial of due process in the grievance procedure constitutive of ULP?
Ruling:
No. Based on RPNEUs Constitution and By-Laws, the charges against petitioners
were not mere internal squabbles, but violations that demand proper investigation because,
if proven, would constitute grounds for their expulsion from the union. Besides, any
supposed procedural flaw in the proceedings before the Committee was deemed cured when
petitioners were given the opportunity to be heard. The essence of due process is simply to
be heard, or as applied to administrative proceedings, an opportunity to explain ones side,
or an opportunity to seek a reconsideration of the action or ruling complained of. It is wellsettled that workers and employers organizations shall have the right to draw up their
constitutions and rules to elect their representatives in full freedom, to organize their
administration and activities and to formulate their programs. In this case, RPNEUs
Constitution and By-Laws expressly mandate that before a party is allowed to seek the
intervention of the court, it is a pre-condition that he should have availed of all the internal
remedies within the organization. Petitioners were found to have violated the provisions of
the unions Constitution and By-Laws when they filed petitions for impeachment against
their union officers and for audit before the DOLE without first exhausting all internal
remedies available within their organization. This act is a ground for expulsion from union
membership. Thus, petitioners expulsion from the union was not a deliberate attempt to
curtail or restrict their right to organize, but was triggered by the commission of an act,
expressly sanctioned by Section 2.5 of Article IX of the unions Constitution and By-Laws. For
a charge of ULP against a labor organization to prosper, the onus probandi rests upon the
party alleging it to prove or substantiate such claims by the requisite quantum of evidence.
In labor cases, as in other administrative proceedings, substantial evidence or such relevant
evidence as a reasonable mind might accept as sufficient to support a conclusion is required.
Moreover, it is indubitable that all the prohibited acts constituting unfair labor practice
should materially relate to the workers' right to self-organization.
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CASE DIGESTS
PHILIPPINE JOURNALISTS, INC., vs JOURNAL EMPLOYEES UNION (JEU)
G.R. No. 192601, June 3, 2013
Facts:

In this petition, the employer asserts that pursuant to its CBA with the union, funeral
and bereavement aid should be granted upon the death of a legal dependent of a regular
employee; that consistent with the definition provided by the SSS Law, the term legal
dependent referred to the spouse and children of a married regular employee, and to the
parents and siblings, 18 years old and below, of a single regular employee; that the CBA
considered the term dependents to have the same meaning as beneficiaries, as provided in
Section 5, Article XIII of the CBA on the payment of death benefits; that its earlier granting of
claims for funeral and bereavement aid without regard to the foregoing definition of the legal
dependents of married or single regular employees did not ripen into a company policy
whose unilateral withdrawal would constitute a violation of Article 100 of the Labor Code,
the law disallowing the non-diminution of benefits; that it had approved only four claims
from 1999 to 2003 based on its mistaken interpretation of the term legal dependents, but
later corrected the same.
Issue:

Notwithstanding the silence of the CBA on the definition of its terms, can the
definitions provided under the current social legislations be used in its interpretation?
Ruling:
Yes. Considering that existing laws always form part of any contract, and are deemed
incorporated in each and every contract, the definition of legal dependents under the social
legislations (SSS Law, RA 7875 as amended, PD 1146) applies in the absence of a contrary or
different definition mutually intended and adopted by the parties in the CBA. Accordingly,
the concurrence of a legitimate spouse does not disqualify a child or a parent of the employee
from being a legal dependent provided substantial evidence is adduced to prove the actual
dependency of the child or parent on the support of the employee. The differentiation among
the legal dependents is significant only in the event the CBA has prescribed a hierarchy
among them for the granting of a benefit; hence, the use of the terms primary beneficiaries
and secondary beneficiaries for that purpose. But considering that Section 4, Article XIII of
the CBA has not included that differentiation, petitioner had no basis to deny the claim for
funeral and bereavement aid of Alfante for the death of his parent whose death and fact of
legal dependency on him could be substantially proved. Pursuant to Article 100 of the Labor
Code, petitioner as the employer could not reduce, diminish, discontinue or eliminate any
benefit and supplement being enjoyed by or granted to its employees. This prohibition
against the diminution of benefits is founded on the constitutional mandate to protect the
rights of workers and to promote their welfare and to afford labor full protection.

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CASE DIGESTS
SAMAHANG MANGGAGAWA SA TOP FORM MANUFACTURING UNITED WORKERS OF
THE PHILIPPINES vs NLRC
G.R. No. 113856, September 7, 1998
Facts:

At the collective bargaining negotiation by the SMTFM with the employer Top Form
Manufacturing Philippines, Inc., it requested for the implementation of wage orders, but
demanded that the increase be on an across-the-board basis. The employer, however,
refused to this demand and implemented instead a scheme of increases purportedly to avoid
wage distortion. Such refusal was aggravated by the fact that prior to the issuance of said
wage orders, the employer allegedly promised at the collective bargaining conferences to
implement any government-mandated wage increases on an across-the-board basis. With
this, the union charged the employer with bargaining in bad faith, thus constituting ULP.
Issue:
Can an alleged promise of implementing government-mandated wage orders not
reduced into writing in the CBA be a basis of charging an employer with ULP?
Ruling:
No. The CBA is the law between the contracting parties the collective bargaining
representative and the employer-company. Compliance with a CBA is mandated by the
expressed policy to give protection to labor. In the same vein, CBA provisions should be
construed liberally rather than narrowly and technically, and the courts must place a
practical and realistic construction upon it, giving due consideration to the context in which
it is negotiated and purpose which it is intended to serve." This is founded on the dictum that
a CBA is not an ordinary contract but one impressed with public interest. It goes without
saying, however, that only provisions embodied in the CBA should be so interpreted and
complied with. Where a proposal raised by a contracting party does not find print in the
CBA, it is not a part thereof and the proponent has no claim whatsoever to its
implementation.

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CASE DIGESTS
CENTRAL AZUCARERA DE BAIS EMPLOYEES UNION vs CENTRAL AZUCARERA DE BAIS
G.R. No. 186605, November 17, 2010
Facts:

CABEU-NFL initiated the collective bargaining negotiations with the Central


Azucarera de Bais, Inc. (CAB). CAB offered its counter-proposal. The union in turn sent an
amended union proposal. CAB however maintained its position. Thus, the collective
bargaining negotiations resulted into a deadlock. When a letter request by the union seeking
for copies of the employers annual financial statement, CAB sent a letter response, saying
that the letter request was signed by the union president Pablito Saguran who was no longer
an employee of the CAB. Moreover, it stated that the union did not anymore represented the
majority of the employees, as the latter had already formed a new union. CAB then entered
into a CBA with this new union (CABELA) and failed to resume negotiations with the CABEUNFL. CAB was then charged of ULP by the CABEU-NFL.
Issue:

Does an employer commit ULP when a collective bargaining resulted into a deadlock
despite its active participation in such undertaking?
Ruling:
No. For a charge of unfair labor practice to prosper, it must be shown that CAB was
motivated by ill will, "bad faith, or fraud, or was oppressive to labor, or done in a manner
contrary to morals, good customs, or public policy, and, of course, that social humiliation,
wounded feelings or grave anxiety resulted x x x" in suspending negotiations with CABEUNFL. Notably, CAB believed that CABEU-NFL was no longer the representative of the
workers. It just wanted to foster industrial peace by bowing to the wishes of the
overwhelming majority of its rank and file workers and by negotiating and concluding in
good faith a CBA with CABELA." Such actions of CAB are nowhere tantamount to antiunionism, the evil sought to be punished in cases of unfair labor practices. Furthermore,
basic is the principle that good faith is presumed and he who alleges bad faith has the duty
to prove the same. By imputing bad faith to the actuations of CAB, CABEU-NFL has the burden
of proof to present substantial evidence to support the allegation of unfair labor practice.
Apparently, CABEU-NFL refers only to the circumstances mentioned in the letter-response,
namely, the execution of the supposed CBA between CAB and CABELA and the request to
suspend the negotiations, to conclude that bad faith attended CABs actions. The Court is of
the view that CABEU-NFL, in simply relying on the said letter-response, failed to substantiate
its claim of unfair labor practice to rebut the presumption of good faith.

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GENERAL MILLING CORPORATION vs CA
G.R. No. 146728. February 11, 2004
Facts:
All the 190 workers in the two plants of GMC are members of the General Milling
Corporation Independent Labor Union, a duly certified bargaining agent. A day before the
expiration of the CBA, the union sent GMC a proposed CBA, with a request that a counterproposal be submitted within ten (10) days. However, GMC had received collective and
individual letters from workers who stated that they had withdrawn from their union
membership, on grounds of religious affiliation and personal differences. Believing that the
union no longer had standing to negotiate a CBA, GMC did not send any counter-proposal. It
felt there was no basis to negotiate with a union which no longer existed, 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. GMC
dismissed Marcia Tumbiga, a union member, on the ground of incompetence. The union
protested and requested GMC to submit the matter to the grievance procedure provided in
the CBA. With this, the union filed a complaint for ULP.
Issue:
With the mandate of the law requiring an employer to submit a counter-proposal
within ten days from the receipt of the unions proposal, does its inaction on said union
request constitute ULP?
Ruling:
Yes, if such refusal was tainted with bad faith. 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 labor practice under Article 248 of the Labor Code, which provides among others
the violation of the duty to bargain collectively. The crucial question whether or not a party
has met his statutory duty to bargain in good faith typically turns on the facts of the
individual case. There is no per setest of good faith in bargaining. Good faith or bad faith is
an inference to be drawn from the facts. The effect of an employers or a unions actions
individually is not the test of good-faith bargaining, but the impact of all such occasions or
actions, considered as a whole. GMCs failure to make a timely reply to the proposals
presented by the union is indicative of its utter lack of interest in bargaining with the union.
Its excuse that it felt the union no longer represented the workers, was mainly dilatory as it
turned out to be utterly baseless. We hold that GMCs refusal to make a counter-proposal to
the unions proposal for CBA negotiation is an indication of its bad faith. Where the employer
did not even bother to submit an answer to the bargaining proposals of the union, there is a
clear evasion of the duty to bargain collectively. Failing to comply with the mandatory
obligation to submit a reply to the unions proposals, GMC violated its duty to bargain
collectively, making it liable for unfair labor practice.

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UNION OF FILIPRO EMPLOYEES vs NESTL PHILIPPINES, INC.
G.R. No. 158930-31 and 158944-45, August 22, 2006
Facts:

In consideration of the impending expiration of the CBA between Nestl and UFEDFA-KMU, the union informed the employer of its intention to renegotiate, especially on the
terms of the Retirement Plan offered to the employees. Nestl however contends that the
retirement plan is in the nature of a unilateral grant which, by their very nature, cannot be
the proper subject of a CBA negotiation. Nestl requested the NCMB for conciliation
proceedings, but still no agreement was reached. The Union, alleging that Nestl bargained
in bad faith in that it was setting pre-conditions in the ground rules by refusing to include
the issue of the Retirement Plan in the CBA negotiations, charged the employer with ULP.
The Secretary of Labor assumed compulsory jurisdiction over the matter.
Issues:
1) Can a retirement plan, which is in the form of a unilateral grant of the employer, be
the valid subject of a CBA negotiation?
2) Did the Secretary of Labor committed grave abuse of discretion when it assumed
compulsory jurisdiction over the labor dispute, including incidental matters such as
the substantive issue of validity of CBA negotiation subjects?
3) Can an employer be validly charged with ULP solely for its refusal to include a subject
matter in a CBA negotiation?
Ruling:
1) YES. In a previous ruling of the Court involving the same parties, the inclusion of the
retirement plan in the collective bargaining agreement as part of the package of
economic benefits extended by the company to its employees to provide them a
measure of financial security after they shall have ceased to be employed in the
company, reward their loyalty, boost their morale and efficiency and promote
industrial peace, gives a consensual character to the plan so that it may not be
terminated or modified at will by either party. The fact that the retirement plan is
non-contributory, i.e., that the employees contribute nothing to the operation of the
plan, does not make it a non-issue in the CBA negotiations.
2) NO. The Secretarys assumption of jurisdiction power necessarily includes matters
incidental to the labor dispute, that is, issues that are necessarily involved in the
dispute itself, not just to those ascribed in the Notice of Strike; or, otherwise
submitted to him for resolution. This authority to assume jurisdiction over the said
labor dispute must include and extend to all questions and controversies arising
therefrom, including cases over which the Labor Arbiter has exclusive jurisdiction.
Secretary Sto. Tomas correctly assumed jurisdiction over the questions incidental to
the current labor dispute and those matters raised by the parties. In any event, the
query as to whether or not the Retirement Plan is to be included in the CBA
negotiations between the parties ineluctably dictates upon the Secretary of the DOLE
to go into the substantive matter of the CBA negotiations.
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3) NO. Employers are accorded rights and privileges to assure their self-determination
and independence and reasonable return of capital. This mass of privileges comprises
the so-called management prerogatives. In this connection, the rule is that good faith
is always presumed. As long as the companys exercise of the same is in good faith to
advance its interest and not for purpose of defeating or circumventing the rights of
employees under the law or a valid agreement, such exercise will be upheld.
ESTATE OF NELSON R. DULAY vs ABOITIZ JEBSEN MARITIME, INC.
G.R. No. 172642, June 13, 2012
Facts:

Nelson Dulay was employed as an ordinary seaman and later as bosun by the General
Charterers Inc. (GCI), a subsidiary of Aboitiz Jebsen Maritime Inc. He died due to acute renal
failure secondary to septicemia. At the time of his death, Nelson was a bona fide member of
the Associated Marine Officers and Seamans Union of the Philippines (AMOSUP), GCIs
collective bargaining agent. Nelsons widow, Merridy Jane, thereafter claimed for death
benefits through the grievance procedure of the Collective Bargaining Agreement (CBA)
between AMOSUP and GCI. The employer contends that the widow is not entitled to death
benefits because the former are only liable for such in case of death of the seafarer during
the term of his contract pursuant to the POEA contract and the cause of his death is not
work-related. In this petition, Merridy Jane asserts that Section 10 of Republic Act (R.A.)
8042, otherwise known as the Migrant Workers and Overseas Filipinos Act of 1995, vests
jurisdiction on the appropriate branches of the NLRC to entertain disputes regarding the
interpretation of a collective bargaining agreement involving migrant or overseas Filipino
workers. However, Aboitiz insists that in the present case, Article 217, paragraph (c) as well
as Article 261 of the Labor Code remain to be the governing provisions of law with respect
to unresolved grievances arising from the interpretation and implementation of collective
bargaining agreements. Under these provisions of law, jurisdiction remains with voluntary
arbitrators.
Issue:
Does the Labor Arbiter have jurisdiction over the money claims of migrant workers
granted in a CBA?
Ruling:
NO. It is true that R.A. 8042 is a special law governing overseas Filipino workers.
However, a careful reading of this special law would readily show that there is no specific
provision thereunder which provides for jurisdiction over disputes or unresolved grievances
regarding the interpretation or implementation of a CBA. Section 10 of R.A. 8042, which is
cited by petitioner, simply speaks, in general, of claims arising out of an employer-employee
relationship or by virtue of any law or contract involving Filipino workers for overseas
deployment including claims for actual, moral, exemplary and other forms of damages.
Articles 217(c) and 261 of the Labor Code are very specific in stating that voluntary
arbitrators have jurisdiction over cases arising from the interpretation or implementation of
collective bargaining agreements. Stated differently, the instant case involves a situation
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where the special statute (R.A. 8042) refers to a subject in general, which the general statute
(Labor Code) treats in particular. In the present case, the basic issue raised by Merridy Jane
in her complaint filed with the NLRC is: which provision of the subject CBA applies insofar
as death benefits due to the heirs of Nelson are concerned. This issue clearly involves the
interpretation or implementation of the said CBA. Thus, the specific or special provisions of
the Labor Code govern.

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DIGITAL TELECOMMUNICATIONS PHILIPPINES, INC. vs DIGITEL EMPLOYEES UNION
G.R. No. 184903, October 10, 2012
Facts:

DEU was the certified exclusive bargaining agent in Digitel. However, no CBA was
executed. Ten years after, DEU initiated negotiation proceedings. Digitel refused, and
demanded that the Union show compliance with the provisions of its CBL on union
membership and election of officers, prompting the Union to file a notice of strike. The
Secretary of Labor assumed compulsory jurisdiction over the matter. During the pendency
of the controversy, Digitel proceeded to close Digiserv, a non-profit enterprise engaged in
call center servicing, filed with the Department of Labor and Employment (DOLE) an
Establishment Termination Report stating that it will cease its business operation. The
closure affected at least 100 employees, 42 of whom are members of the herein respondent
Union. Also, a petition for cancellation of the Unions registration was filed. The Secretary
thereafter ordered for the commencement of the CBA negotiations.
Issues:
1) Does the pendency of a petition for cancellation of union registration preclude
collective bargaining?
2) Did Digitel commit ULP when it closed the servicing unit composed of several union
members during the pendency of the labor dispute?
Ruling:
1) No. It is well-settled that the pendency of a petition for cancellation of union
registration does not preclude collective bargaining. That there is a pending
cancellation proceeding against the respondent Union is not a bar to set in motion the
mechanics of collective bargaining. If a certification election may still be ordered
despite the pendency of a petition to cancel the unions registration certificate, more
so should the collective bargaining process continue despite its pendency. The
majority status of the respondent Union is not affected by the pendency of the Petition
for Cancellation pending against it. Unless its certificate of registration and its status
as the certified bargaining agent are revoked, the employer is, by express provision
of the law, duty bound to collectively bargain with the Union.
2) Yes. The finding of unfair labor practice hinges on Digitels contracting-out certain
services performed by union member-employees to interfere with, restrain or coerce
them in the exercise of their right to self-organization. There is no doubt that Digitel
defied the assumption order by abruptly closing down Digiserv. The closure of a
department is not illegal per se. What makes it unlawful is when the closure is
undertaken in bad faith. Bad faith was manifested by the timing of the closure of
Digiserv and the rehiring of some employees to Interactive Technology Solutions, Inc.
(I-tech), a corporate arm of Digitel. The assumption order directs employees to return
to work, and the employer to reinstate the employees. The existence of the
assumption order should have prompted Digitel to observe the status quo. Instead,
Digitel proceeded to close down Digiserv.
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MANILA MINING CORP. EMPLOYEES ASSOCIATION-FEDERATION OF FREE WORKERS
CHAPTER vs. MANILA MINING CORP.
G.R. Nos. 178222-23, September 29, 2010
Facts:

The Union initiated negotiation proceedings with employer Manila Mining


Corporation. However, said employer was not able to secure a tailings permit from the
DENR-EMB despite its efforts to get the acceptance of the residents in the community for the
continuance of its operations. Hence, it had to temporarily shut down its operations, lay off
its employees, and called for the suspension of the CBA negotiations with the Union. This
prompted the Union to charge the employer with ULP, allegedly violating its duty to
collectively bargain.
Issue:

Does the failure of an employer to secure a government permit for its operations,
despite its utmost efforts to obtain such, justify its unilateral call of suspending CBA
negotiations?
Ruling:
YES. The lay-off is neither illegal nor can it be considered as unfair labor practice. For
a charge of unfair labor practice to prosper, it must be shown that the employer was
motivated by ill-will, bad faith or fraud, or was oppressive to labor. The employer must have
acted in a manner contrary to morals, good customs, or public policy causing social
humiliation, wounded feelings or grave anxiety. While the law makes it an obligation for the
employer and the employees to bargain collectively with each other, such compulsion does
not include the commitment to precipitately accept or agree to the proposals of the other. All
it contemplates is that both parties should approach the negotiation with an open mind and
make reasonable effort to reach a common ground of agreement. The Union based its
contention on the letter request by MMC for the suspension of the collective bargaining
negotiations until it resumes operations. Verily, it cannot be said that MMC deliberately
avoided the negotiation. It merely sought a suspension and in fact, even expressed its
willingness to negotiate once the mining operations resume. There was valid reliance on the
suspension of mining operations for the suspension, in turn, of the CBA negotiation. The
Union failed to prove bad faith in MMCs actuations.

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SAN MIGUEL FOODS INC vs SAN MIGUEL CORP. SUPERVISORS AND EXEMPT UNION
G.R. No. 146206, August 1, 2011
Facts:

Pursuant to a Supreme Court decision, the DOLE conducted pre-election conferences


on SMCSEUs petition for certification election. The Med-Arbiter ordered to proceed with the
election. The company San Miguel Foods Inc. questioned the eligibility to vote by some of its
employees, particularly those alleged confidential employees who were working as Payroll
Manager and those who have access with the salary and compensation data, the HR Assistant
and Personnel Assistant and those employees working in the live chicken operations who
are not covered by the bargaining unit. It also alleges that the employees of the Cabuyao, San
Fernando, and Otis plants of petitioners predecessor, San Miguel Corporation, as stated in
G.R. No. 110399, were engaged in "dressed" chicken processing, i.e., handling and packaging
of chicken meat, while the new bargaining unit includes employees engaged in "live" chicken
operations, i.e., those who breed chicks and grow chickens. Despite the objections, the MedArbiter ruled that SMCSEU was certified to be the exclusive bargaining agent of the
supervisors and exempt employees.
Issues:
1) Can the workers of separate divisions whose tasks are interrelated form a single
union?
2) Can confidential employees join the bargaining unit of a company?
Ruling:
1) Yes. The Court by taking into account the community or mutuality of interests test
said that those employees in the live chicken processing and dressed chicken
processing divisions held that they can form a union. 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 interest. This
is so because the basic test of an asserted bargaining units acceptability is whether
or not it is fundamentally the combination which will best assure to all employees the
exercise of their collective bargaining rights.
2) No. A confidential employee is one entrusted with confidence on delicate, or with the
custody, handling or care and protection of the employers property. Confidential
employees should be excluded from the bargaining unit, as their access to confidential
information may become the source of undue advantage. However, in this case, the
Court did not apply such fact to the Payroll Manager and those working with salary
and compensation data, saying that the job does not involve dealing with confidential
labor relations information in the course of the performance of his functions.

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SAMAHAN NG MGA MANGGAGAWA SA HYATT (SAMASAH-NUWHRAIN) vs.
HOTEL ENTERPRISES OF THE PHILIPPINES, INC.
G.R. No. 172303, June 6, 2011
Facts:

Angelito Caragdag was dismissed by his employer Hyatt Regency Manila after
committing several infractions in his work. Pursuant to the Hotels Code of Discipline, an
employee committing offenses penalized with 3 suspensions during a 12-month period shall
be meted the penalty of dismissal. The Union questioned the validity of Caragdags dismissal,
and was referred to Voluntary Arbitration. The VA found the 3 suspensions of Cargdag valid,
reasoning that the union officers and members had no right to breach company rules and
regulations on security and employee discipline on the basis of certain suspicions against
management and an ongoing CBA negotiation standoff. The VA also awarded financial
assistance to Caragdag. In this petition, the union questions CAs outright dismissal of the
appeal pursuant to Rule 43 of the Rules of Court and its deletion of the award of financial
assistance to Caragdag.
Issue:
Does the CA have appellate jurisdiction over the decisions and awards of a voluntary
arbitrator?
Ruling:
YES. The decision or award of the voluntary arbitrator or panel of arbitrators should
likewise be appealable to the Court of Appeals, in line with the procedure outlined in Revised
Administrative Circular No. 1-95 (now embodied in Rule 43 of the 1997 Rules of Civil
Procedure), just like those of the quasi-judicial agencies, boards and commissions
enumerated therein, and consistent with the original purpose to provide a uniform
procedure for the appellate review of adjudications of all quasi-judicial entities.
On the issue of the deletion of the award of financial assistance, the Court found that
the CA did not err on this matter. Caragdags dismissal being due to serious misconduct, it
follows that he should not be entitled to financial assistance. To rule otherwise would be to
reward him for the grave misconduct he committed. We must emphasize that social justice
is extended only to those who deserve its compassion.

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7K CORPORATION vs. EDDIE ALBARICO
G.R. No. 182295, June 26, 2013
Facts:

Eddie Albarico was dismissed from his work with 7K Corporation allegedly due to his
poor sales performance. He then submitted his money claims for separation pay and sales
commission reserved for him against the employer with the NCMB. He also filed a complaint
for illegal dismissal with the NLRC. The Labor Arbiter in favor of Albarico, who was awarded
separation pay in lieu of reinstatement, backwages and attorneys fees, and the order stated
that it was without prejudice to the pending NCMB case. The employer appealed the LAs
decision, alleging that Albarico committed forum shopping. Subsequently, the NCMB then
found the employer guilty of illegal dismissal. The case was elevated with the CA, which
upheld the assumption of jurisdiction of the VA to decide the legality of the dismissal.
Issue:
Can the VA act upon a complaint for illegal dismissal and the claim for separation pay,
which is within the competence of the Labor Arbiter?
Ruling:
YES. Voluntary arbitrators may, by agreement of the parties, assume jurisdiction over
a termination dispute such as the present case, contrary to the assertion of petitioner that
they may not. Article 262 of the Labor Code provides that the Voluntary Arbitrator or panel
of Voluntary Arbitrators, upon agreement of the parties, shall also hear and decide all other
labor disputes including unfair labor practices and bargaining deadlocks. The circumstances
of the instant case lead to no other conclusion than that the claim of respondent Albarico for
separation pay was premised on his allegation of illegal dismissal. Thus, the voluntary
arbitrator properly assumed jurisdiction over the issue of the legality of his dismissal. There
is no claim that the issue of entitlement to separation pay is being resolved in the context of
any authorized cause of termination undertaken by corporation. Neither is there any
allegation that a consideration of social justice is being resolved here. In fact, even in
instances in which separation pay is awarded in consideration of social justice, the issue of
the validity of the dismissal still needs to be resolved first. Only when there is already a
finding of a valid dismissal for a just cause does the court then award separation pay for
reason of social justice. The other circumstances when separation pay may be awarded are
not present in this case. Hence, the voluntary arbitrator correctly assumed that the core issue
behind the issue of separation pay is the legality of the dismissal of respondent.

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ROYAL PLANT WORKERS UNION vs COCA-COLA BOTTLERS PHILIPPINES, INC.
G.R. No. 198783, April 15, 2013
Facts:
Royal Plant Workers Union initiated the grievance machinery of its CBA with the Coca-Cola Bottlers
Philippines, Inc. when, upon the employers directive, the chairs used by those in the bottling operations were
removed. The arbitration committee ruled that the directive was not valid, thus ordering the employer to
return the said chairs. The case was elevated to the CA under Rule 43 of the Rules of Court. The CA, ruled in the
employers favor, stating that such directive was within the province of the employers prerogatives and that it
was made in good faith. Furthermore, the CA held that such mechanism did not ripen into a company practice,
wherein such removal would be considered as diminution of benefits under Article 100 of the Labor Code.
Issues:
1) Is an appeal to the CA via petition for review under Rule 43 of the Rules of Court proper to question
the decision of an Arbitration Committee?
2) Is an employers directive of removing the chairs used by its employees a valid exercise of managerial
prerogatives?
Ruling:
1) YES. The Court has already ruled in a number of cases that a decision or award of a voluntary arbitrator
is appealable to the CA via a petition for review under Rule 43. the decision or award of the voluntary
arbitrator or panel of arbitrators should likewise be appealable to the Court of Appeals, in line with
the procedure outlined in Revised Administrative Circular No. 1-95 (now embodied in Rule 43 of the
1997 Rules of Civil Procedure), just like those of the quasi-judicial agencies, boards and commissions
enumerated therein, and consistent with the original purpose to provide a uniform procedure for the
appellate review of adjudications of all quasi-judicial entities.
2) YES. In the present case, the removal of such chairs was not done indiscriminately. Rather, such
directive was a product of a careful study, giving due regard to the employees welfare. It was done
with good intentions, as CCBPI wanted to avoid instances of operators sleeping on the job while in the
performance of their duties and responsibilities and because of the fact that the chairs were not
necessary considering that the operators constantly move about while working. Furthermore, the CBA
contained no provision whatsoever requiring the management to provide chairs for the operators in
the production/manufacturing line while performing their duties and responsibilities. The CBA
expressly provides that benefits and/or privileges, not expressly given therein but which are presently
being granted by the company and enjoyed by the employees, shall be considered as purely voluntary
acts by the management and that the continuance of such benefits and/or privileges, no matter how
long or how often, shall not be understood as establishing an obligation on the companys part. Since
the matter of the chairs is not expressly stated in the CBA, it is understood that it was a purely voluntary
act on the part of CCBPI and the long practice did not convert it into an obligation or a vested right in
favor of the Union.
Also, the operators chairs cannot be considered as one of the employee benefits covered in
Article 10016 of the Labor Code. In the Courts view, the term "benefits" mentioned in the nondiminution rule refers to monetary benefits or privileges given to the employee with monetary
equivalents. Such benefits or privileges form part of the employees wage, salary or compensation
making them enforceable obligations.

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EMPLOYEES UNION OF BAYER PHILIPPINES vs BAYER PHILIPPINES, INC.
G.R. No. 162943, December 6, 2010
Facts:

Two factions within the Employees Union of Bayer Philippines (the EBR) were
asserting their rights to bargain with employer Bayer Philippines, Inc.: the Facundo faction
and the splinter union, Remigio faction. Barely six months after the new CBA was signed by
the employer and the EBR, the Remigio faction solicited signatures from the union members
to support the resolution of disaffiliating with the Union and forming the REUBP. Both of the
factions sought recognition from Bayer and demanding remittance of the union dues
collected. The employer responded by refusing to deal with either of the two groups and by
placing the union dues collected in a trust account. EUBP then filed a complaint for ULP
against Bayer for refusing to remit the union dues. During the pendency of this case, Bayer
then turned over the said dues to EUBP. The Labor Arbiter dismissed the complaint for lack
of jurisdiction. Another complaint for ULP was filed by EUBP against Bayer, Remigio and
Villareal, the grounds of which are the allegations of organizing a company union, gross
violation of the CBA, and violation of the duty to bargain. Subsequently, Bayer and REUBP
executed a CBA. The second ULP complaint was also dismissed for lack of jurisdiction.
Issue:

1) Does the Labor Arbiter lack jurisdiction over the propriety of the disaffiliation and
the legality of a splinter union necessarily incorporated in a complaint for ULP?
2) Can the act of the management in dealing and negotiating with a splinter union
despite its validly existing CBA with the then existing exclusive bargaining
representative be considered unfair labor practice?

Ruling:
1) YES. The issue of EUBP against Remigio and Villareal essentially involves an intraunion dispute. To rule on the the validity or illegality of their acts, the Labor
Arbiter and the NLRC will necessarily touch on the issues respecting the propriety
of their disaffiliation and the legality of the establishment of REUBP issues that
are outside the scope of their jurisdiction. Accordingly, the dismissal of the
complaint was validly made, but only with respect to these two respondents.
2) YES. When an employer proceeds to negotiate with a splinter union despite the
existence of its valid CBA with the duly certified and exclusive bargaining agent,
the former indubitably abandons its recognition of the latter and terminates the
entire CBA.

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MALAYANG MANGGAGAWA NG STAYFAST PHILIPPINES, INC. vs NLRC
G.R. No. 155306, August 28, 2013
Facts:

NLMS-Olalia was declared as the exclusive bargaining representative in Stayfast


Philippines, Inc. Petitioner union Malayang Manggagawa ng Stayfast Philippines filed a
notice of strike against the company. The company opposed, asserting that the union did not
have the legal personality to do so. It demanded for a memorandum from the union to explain
why its members should not be dismissed from employment. However, the union proceeded
with its sit down strike. The company then promptly terminated the participants in the
said strike. The union also filed a complaint allegedly for unfair labor practice, illegal
dismissal and union busting. The Labor Arbiter dismissed the complaint for failure to
substantiate such claims. The NLRC and CA denied the appeal of the union. Hence, this
petition for certiorari with the Supreme Court.
Issue:

Is a petition for certiorari under Rule 65 of the Rules of Court a proper remedy to
question the decision of the CA affirming the dismissal of the NLRC?
Ruling:
NO. A petition for certiorari under Rule 65 of the Rules of Court is a special civil action
that may be resorted to only in the absence of appeal or any plain, speedy and adequate
remedy in the ordinary course of law. For purposes of appeal, the Decision dated July 1, 2002
of the Court of Appeals was a final judgment as it denied due course to, and dismissed, the
petition. Thus, the Decision disposed of the petition of petitioner in a manner that left
nothing more to be done by the Court of Appeals in respect to the said case. Thus, petitioner
should have filed an appeal by petition for review on certiorari under Rule 45, not a petition
for certiorari under Rule 65, in this Court. Where the rules prescribe a particular remedy for
the vindication of rights, such remedy should be availed of. The proper remedy to obtain a
reversal of judgment on the merits, final order or resolution is appeal. This holds true even
if the error ascribed to the court rendering the judgment is its lack of jurisdiction over the
subject matter, or the exercise of power in excess thereof, or grave abuse of discretion in the
findings of fact or of law set out in the decision, order or resolution. The existence and
availability of the right of appeal prohibits the resort to certiorari because one of the
requirements for the latter remedy is that there should be no appeal.

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ASIA BREWERY INC. vs TUNAY NA PAGKAKAISA NG MGA MANGGAGAWA SA ASIA
G.R. Nos. 171594-96, September 18, 2013
Facts:

TPMA is the exclusive bargaining representative in Asia Brewery, Inc. Negotiations


began with the parties, but even after the 18th session they were not able to reconcile their
differences, particularly on wages and other economic benefits. The union declared deadlock
and filed a notice of strike. The company petitioned with the Secretary of Labor to assume
compulsory jurisdiction over the case, to which the Secretary upheld. It resolved the
deadlock between the parties. On the issue of wage increases, the Secretary resolved it based
from unaudited financial statements submitted by the company. In this petition, the union
accuses the Secretary of Labor of committing grave abuse of discretion for ruling the case in
such manner.
Issue:
Did the Secretary of Labor commit grave abuse of discretion when it resolved the case
based on unaudited financial statements submitted by the company?
Ruling:
YES. Such financial statements are mere self-serving declarations and inadmissible in
evidence. While the rules of evidence prevailing in the courts of law or equity are not
controlling in Labor case proceedings, the evidence presented must at least have a modicum
of admissibility for it to be given some probative value. The extent of judicial review over the
Secretary of Labor's arbitral award is not limited to a determination of grave abuse in the
manner of the secretary's exercise of his statutory powers. This Court is entitled to, and must
in the exercise of its judicial power review the substance of the Secretary's award when
grave abuse of discretion is alleged to exist in the award, i.e., in the appreciation of and the
conclusions the Secretary drew from the evidence presented. Thus, we rule that the
Secretary of Labor gravely abused her discretion when she relied on the unaudited financial
statements of company in determining the wage award because such evidence is self-serving
and inadmissible.

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CASE DIGESTS
BANKARD, INC. vs NLRC
G.R. No. 171664, March 6, 2013
Facts:

Bankard Employees Union-AWATU staged a strike against Bankard, Inc. allegedly


because of the companys commission of ULP. The company implemented its Manpower
Rationalization Program (MRP), which had the effect of it contracting an independent agency
to handle its call center needs. According to the union, it was ULP for the company because
such program discriminates those employees who are members of the union.
Issue:

Can an employer be charged for ULP for effectively reducing the number of its
employees?
Ruling:
YES, if such reduction of employment would be shown to affect in whatever manner
the right of the employees to self-organize. In this case, it could not be shown that the
company committed ULP. There was no proof that the program was meant to encourage the
employees to disassociate themselves from the Union or to restrain them from joining any
union or organization. There was no showing that it was intentionally implemented to stunt
the growth of the Union or that Bankard discriminated, or in any way singled out the union
members who had availed of the retirement package under the MRP. True, the program
might have affected the number of union membership because of the employees voluntary
resignation and availment of the package, but it does not necessarily follow that Bankard
indeed purposely sought such result. It must be recalled that the MRP was implemented as a
valid cost-cutting measure, well within the ambit of the so-called management prerogatives.
Bankard contracted an independent agency to meet business exigencies. In the absence of
any showing that Bankard was motivated by ill will, bad faith or malice, or that it was aimed
at interfering with its employees right to self-organize, it cannot be said to have committed
an act of unfair labor practice.

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CASE DIGESTS
TABANGAO SHELL REFINERY EMPLOYEES ASSOCIATION vs PILIPINAS SHELL
PETROLEUM CORPORATION
G.R. No. 170007, April 7, 2014
Facts:

The union Tabangao Shell Refinery Employees Association, in anticipation of the


expiration of the CBA with Pilipinas Shell Petroleum Corporation, initiated negotiations with
the said employer. After 41 sessions without reaching an agreement with regard to wage
increases, the company proposed a declaration of bargaining deadlock. The union filed a
notice of strike, alleging bad faith bargaining on the part of the company. The Secretary of
Labor took notice of the said notice of strike. The Secretary resolved the case, touching on
the issues of the CBA deadlock from which the strike was grounded. In this petition, the union
questions the validity of the Secretarys act off requiring the parties to submit position
papers even on the economic issues of the CBA.
Issue:

Does the Secretary of Labor have jurisdiction over issues with which a strike is
grounded, even if such issues are not within its competence?
Ruling:
YES. There was already an actual existing deadlock between the parties. What was
lacking was the formal recognition of the existence of such a deadlock because the union
refused a declaration of deadlock. Thus, the unions view that, at the time the Secretary of
Labor and Employment exercised her power of assumption of jurisdiction, the issue of
deadlock was neither an incidental issue to the matter of unfair labor practice nor an existing
issue is incorrect. More importantly, however, the unions mistaken theory that the deadlock
issue was neither incidental nor existing is based on its premise that the case is all about the
companys alleged unfair labor practice of bargaining in bad faith, which is the ground stated
in its first Notice of Strike. The Secretary of the DOLE has been explicitly granted by Article
263(g) of the Labor Code the authority to assume jurisdiction over a labor dispute causing
or likely to cause a strike or lockout in an industry indispensable to the national interest, and
decide the same accordingly. And, as a matter of necessity, it includes questions incidental
to the labor dispute; that is, issues that are necessarily involved in the dispute itself, and not
just to that ascribed in the Notice of Strike or otherwise submitted to him for resolution. The
totality of the companys Petition for Assumption of Jurisdiction, including every allegation
therein, also guided the Secretary of Labor and Employment in the proper determination of
the labor dispute over which he or she was being asked to assume jurisdiction.

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CASE DIGESTS
TELEFUNKEN SEMICONDUCTORS EMPLOYEES UNION vs CA
G.R. Nos. 143013-14, December 18, 2000
Facts:

Due to a bargaining deadlock during the CBA negotiations, the Union filed a notice of
strike. Then Acting Secretary of Labor assumed jurisdiction over the dispute, thus enjoining
any strike whether actual or intended. Despite the assumption order, the Union proceeded
with its strike, prompting the Acting Secretary to issue a return-to-work order. The company
then issued letters of termination to those union members who did not report back to work.
In this petition, the Union asserts that the presumption of legality of strikes is enshrined in
the Constitution, which is why the termination cannot be justified.
Issue:

Despite assumption orders from the Secretary of Labor, can a union validly hold a
strike against its employer?
Ruling:
NO. It is clear from Article 263 of the Labor Code that the moment the Secretary of
Labor assumes jurisdiction over a labor dispute in an industry indispensable to national
interest, such assumption shall have the effect of automatically enjoining the intended or
impending strike. It was not even necessary for the Secretary of Labor to issue another order
directing them to return to work. The mere issuance of an assumption order by the Secretary
of Labor automatically carries with it a return-to-work order, even if the directive to return
to work is not expressly stated in the assumption order. Also, Article 264 provides that No
strike or lockout shall be declared after the assumption of jurisdiction by the President or
the Secretary or after certification or submission of the dispute to compulsory or voluntary
arbitration or during the pendency of cases involving the same grounds for the strike or
lockout. The rationale of this prohibition is that once jurisdiction over the labor dispute has
been properly acquired by the competent authority, that jurisdiction should not be
interfered with by the application of the coercive processes of a strike. It was held in a
number of cases that defiance to the assumption and return-to-work orders of the Secretary
of Labor after he has assumed jurisdiction is a valid ground for loss of the employment status
of any striking union officer or member.

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CASE DIGESTS
CHUA vs NLRC
G.R. No. 105775, February 8, 1993
Facts:

The Union of Filipro Employees staged a strike against Nestle Philippines. Benito
Chua participated in the said strike. During the strike, several of the striking employees
threw stones at the trucks entering and leaving the company premises. One truck, whose
driver was rendered unconscious by a stone hitting him on the head, rammed a private
vehicle and crashed into a beauty parlor resulting in the death of three persons and extensive
damage to private property. The strike was declared illegal by the NLRC. The union and its
striking members offered to return to work and were readmitted by the company except 69
union officers and 33 union members, including Chua. Subsequently, the union's counsel
wrote to the Nestle requesting the reinstatement of five employees, including Chua. The
request, however, was denied. Chua received a notice of dismissal from Nestle for having
participated in the illegal strike. He then questions the legality of his dismissal, in this
petition for certiorari.
Issue:
Can a union member in an unlawful and violent strike constitute a valid cause for his
dismissal from employment?
Ruling:
YES. His participation in the unlawful and violent strike, which strike resulted in
multiple deaths and extensive property damage, constituted serious misconduct on his part.
Since his participation in the unlawful and violent strike was amply shown by substantial
evidence, the NLRC was correct in holding that the dismissal of Chua was valid being based
on lawful or authorized cause.
On the issue of granting financial assistance, the Court disagrees with the Labor
Arbiter that Chua should be entitled to it. Under the circumstances of this case, the Court
considers that such award of "financial assistance" was obviously unjustified. This Court has
several times ruled that "financial assistance", whatever form it might assume, is permissible
where the employee has been validly dismissed, only in those instances where the cause of
dismissal was something other than serious misconduct on the part of the employee or other
cause reflecting adversely on the employee's moral character.

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CASE DIGESTS
OLISA, et al. vs ESCARIO, et al.
G.R. No. 160302, September 27, 2010
Facts:

The officers and members of the Union in PINA walked out of its premises in support
of its officer charged by the personnel manager and the latters secretary with oral
defamation. PINA preventively suspended all officers of the Union because of the walkout.
The Union filed a notice of strike, claiming the PINA is guilty of union busting through the
constructive dismissal of its officers. Both PINA and Union filed ULP charges against each
other. The Labor Arbiter, and the NLRC on appeal, held that the strike was illegal. But the
NLRC ordered for the reinstatement of the employees without back wages. In this petition,
the union claims that the reinstated employees should be entitled to back wages, for they
have not abandoned their work.
Issue:
Are the participants of an illegal strike entitled to reinstatement with back wages?
Ruling:
NO. Contemplating two causes for the dismissal of an employee, that is: (a) unlawful
lockout; and (b) participation in an illegal strike, the third paragraph of Article 264(a)
authorizes the award of full back wages only when the termination of employment is a
consequence of an unlawful lockout. On the consequences of an illegal strike, the provision
distinguishes between a union officer and a union member participating in an illegal strike.
A union officer who knowingly participates in an illegal strike is deemed to have lost his
employment status, but a union member who is merely instigated or induced to participate
in the illegal strike is more benignly treated. Part of the explanation for the benign
consideration for the union member is the policy of reinstating rank-and-file workers who
are misled into supporting illegal strikes, absent any finding that such workers committed
illegal acts during the period of the illegal strikes. The petitioners were terminated for joining
a strike that was later declared to be illegal. The NLRC ordered their reinstatement or, in lieu
of reinstatement, the payment of their separation pay, because they were mere rank-and-file
workers whom the Unions officers had misled into joining the illegal strike. They were not
unjustly dismissed from work.

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CASE DIGESTS
TANGGA-AN vs PHILIPPINE TRANSMARINE CARRIERS, INC., et al.
G.R. No. 180636, March 13, 2013
Facts:

Tangga-an was deployed after signing a six-month employment contract with


Philippine Transmarine Carriers, Inc. Two months in his work, he was one of those ordered
to disembark from the vessel and were repatriated for the delay of the cargo discharging in
Japan. He then filed a case for illegal dismissal. The Labor Arbiter ruled in his favor, and ruled
that he was entitled to payment of back wages good for three months, pursuant to Section
10 of RA 8042. This was subsequently affirmed by the NLRC and CA. In this petition, Tanggaan asserts that he should be entitled to back wages good for four months, representing the
unexpired portion of his contract.
Issue:

Is the indemnity provided in Section 10 of RA 8042 entitling the migrant worker to


back wages corresponding to the unexpired portion of his contract only limited to three
months?
Ruling:
NO. The Court held that when the illegally dismissed employees employment
contract has a term of less than one year, he/she shall be entitled to recovery of salaries
representing the unexpired portion of his/her employment contract. A plain reading of Sec.
10 clearly reveals that the choice of which amount to award an illegally dismissed overseas
contract worker, i.e., whether his salaries for the unexpired portion of his employment
contract or three (3) months salary for every year of the unexpired term, whichever is less,
comes into play only when the employment contract concerned has a term of at least one (1)
year or more. This is evident from the wording "for every year of the unexpired term" which
follows the wording "salaries x x x for three months." To follow petitioners thinking that
private respondent is entitled to three (3) months salary only simply because it is the lesser
amount is to completely disregard and overlook some words used in the statute while giving
effect to some. This is contrary to the well-established rule in legal hermeneutics that in
interpreting a statute, care should be taken that every part or word thereof be given effect
since the lawmaking body is presumed to know the meaning of the words employed in the
statute and to have used them advisedly. Ut res magis valeat quam pereat. Thus, Tangga-an
is entitled to back wages equivalent to four months, the unexpired term of his contract.

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CASE DIGESTS
ALERT SECURITY AND INVESTIGATION AGENCY, INC. vs PASAWILAN, et al.
G.R. No. 182397, September 14, 2011
Facts:

Saidali Pasawilan, Wilfredo Verceles and Melchor Bulusan were security guards
employed by Alert Security and Investigation Agency, Inc. They alleged that they were being
underpaid, hence a complaint for money claims against their employer. Because of said
complaint, they were relieved from their posts and were not given new assignments despite
the lapse of six months. They then filed a complaint for illegal dismissal. In its defense, the
employer asserts that the security guards abandoned their work, for failure to report to their
new assignment.
Issues:

1) Is a complaint filed against the employer by the employee a valid ground for
dismissal?
2) Is there abandonment of work when an employee fails to report to his new
assignment?

Ruling:
1) NO. The Labor Code, as amended, enumerates several just and authorized causes
for a valid termination of employment. An employee asserting his right and asking
for minimum wage is not among those causes. Dismissing an employee on this
ground amounts to retaliation by management for an employees legitimate
grievance without due process. Such stroke of retribution has no place in
Philippine Labor Laws.
2) NO. For abandonment of work to fall under Article 282 (b) of the Labor Code, as
amended, as gross and habitual neglect of duties there must be the concurrence
of two elements. First, there should be a failure of the employee to report for work
without a valid or justifiable reason, and second, there should be a showing that
the employee intended to sever the employer-employee relationship, the second
element being the more determinative factor as manifested by overt acts. A
complaint for illegal dismissal is inconsistent with the charge of abandonment,
because when an employee takes steps to protect himself against a dismissal, this
cannot, by logic, be said to be abandonment by him of his right to be able to work.

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CASE DIGESTS
ARCHBUILD MASTERS AND CONSTRUCTION, INC. vs NLRC
G.R. No. 108142, December 26, 1995
Facts:

Archbuild Masters and Construction Inc. informed several of its employees whose
services it no longer needed as its project with the US government was nearing its
completion. According to ARMACON, the phase of work for which the employees, including
private respondent Cayanga, were hired neared its completion so that a lesser number of
workers and construction materials were required to be transported to the digging sites,
which meant fewer trips to the construction site and a reduction in the number of drivers.
Cayanga then filed for illegal dismissal, asserting that the proximate project completion was
not really the ground for his dismissal, but the purported absences he incurred allegedly
without leave.
Issue:
Can project employees be dismissed on the ground of the proximate completion of
the project for which their employment was engaged?
Ruling:
NO. As a project employee of ARMACON, Cayangas employment may be terminated
upon the completion of the project as there would be no further need for his services. Since
a project employee's work depends on the availability of projects, necessarily the duration
of his employment is not permanent but coterminous with the work to which he is assigned.
However, for project workers employed in the construction industry, employers are allowed
to reduce their work force into a number suited for the remaining work to be done upon the
completion or proximate accomplishment of the construction project. The employment of a
project worker hired for a specific phase of a construction project is understood to be
coterminus with the completion of such phase and not upon the accomplishment of the
whole project. Project workers in the construction industry may also be terminated as the
phase of a construction project draws nearer to completion when their services are no longer
needed provided they are not replaced.
If a project employee is dismissed his removal must still comply with the substantive
and procedural requirements of due process. Therefore, a project employee hired for a
specific task also enjoys security of tenure. A termination of his employment must be for a
lawful cause and must be done in a manner which affords him the proper notice and hearing.
Thus, a project employee must be duly furnished a written notice of his impending dismissal
and must be given the opportunity to dispute the legality of his removal. We find it in the
interest of justice to require employers to state the reason for their project employees'
dismissal and prove this ground once its veracity is challenged. Employers who hire project
employees are mandated to prove the actual basis for the latter's dismissal. A mere claim of
project completion is not sufficient to terminate a project worker's employment without
adequate proof to demonstrate such claims. In termination cases, the burden of proving that
an employee has been lawfully dismissed lies with the employer.
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CASE DIGESTS
FIANZA vs NLRC
G.R. No. 163061, June 26, 2013
Facts:

Alfonso Fianza was employed as Officer for Social Acceptance of Binga Hydroelectric
Plant, Inc. Almost two years in his employment, there was an instance where he did not
receive his salary and was advised not to report to work until his status was clarified. After
he made several inquiries, he was told to report to work by his supervisor, but the
management committee still had to concur with his reappointment before he could be
reinstated in the payroll. When the management committee did not act on his inquiries,
Fianza filed a complaint for illegal dismissal. His employer however asserts that he
abandoned his work and that he was merely a confidential employee, his employment being
coterminous with the term of the then president and chairperson of the company.
Issues:
Is an employee said to have abandoned his work during the pendency of his
reinstatement to the companys payroll?
Ruling:
NO. For a valid finding of abandonment, these two factors should be present: (1) the
failure to report for work or absence without valid or justifiable reason; and (2) a clear
intention to sever employer-employee relationship, with the second as the more
determinative factor which is manifested by overt acts from which it may be deduced that
the employees has no more intention to work. The intent to discontinue the employment
must be shown by clear proof that it was deliberate and unjustified. The very act of filing the
Complaint for illegal dismissal should have negated any intention on petitioners part to
sever his employment. In fact, it should already have been sufficient evidence to declare that
there was no abandonment of work. Moreover, petitioner went back to the company several
times to inquire about the status of his employment. The fact that his inquiries were not
answered does not prejudice this position.

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CASE DIGESTS
PASOS vs PHILIPPINE NATIONAL CONSTRUCTION CORPORATION
G.R. No. 192394, July 3, 2013
Facts:

Roy Pasos started working for PNCC as Accounting Clerk for the NAIA II Project. His
employment was extended two more years after the termination of his project employment
contract. He was again rehired twice. The latter rehiring did not specify when his
employment will end, but it was only specified in his contract that it will be coterminous with
the completion of the project. When he was informed of another appointment, he had taken
his medical examinations, only to find out that he contracted an illness which required him
to take a leave of absence. However, the personnel officer informed him that his services
were already terminated. Pasos then claims for illegal dismissal, stating that he already was
a regular employee, indicated by several appointments given to him for several projects.
Issue:
Did a project employee become a regular employee after reappointments for several
projects? If such is the case, can he be dismissed on the ground of contract expiration or
project completion?
Ruling:
YES. A project employee is one whose "employment has been fixed for a specific
project or undertaking the completion or termination of which has been determined at the
time of the engagement of the employee or where the work or services to be performed is
seasonal in nature and the employment is for the duration of the season." Thus, the principal
test used to determine whether employees are project employees is whether or not the
employees were assigned to carry out a specific project or undertaking, the duration or scope
of which was specified at the time the employees were engaged for that project. In the case
at bar, Pasos worked continuously for more than two years after the supposed three-month
duration of his project employment for the NAIA II Project. While his appointment for said
project allowed such extension since it specifically provided that in case his "services are still
needed beyond the validity of the contract, the Company shall extend his services," there was
no subsequent contract or appointment that specified a particular duration for the extension.
While for first three months, Pasos can be considered a project employee of PNCC, his
employment thereafter, when his services were extended without any specification of as to
the duration, made him a regular employee of PNCC. And his status as a regular employee
was not affected by the fact that he was assigned to several other projects and there were
intervals in between said projects since he enjoys security of tenure.
His regular employment was terminated by PNCC due to contract expiration or
project completion, which are both not among the just or authorized causes provided in the
Labor Code, as amended, for dismissing a regular employee. Thus, Pasos was illegally
dismissed.

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CASE DIGESTS
CONCRETE SOLUTIONS INC. vs CABUSAS
G.R. No. 177812, June 19, 2013
Facts:

Arthur Cabusas was hired by Primary Structures Corporation (PSC) as transit mixer.
It was stated in his employment contract that he is a project employee, and as such, his
employment is coterminous with the completion of the project or any phase thereof. Incident
reports of violations of company rules and regulations reached the management. Cabusas
was then preventively suspended pending investigation. He asked for the result of the
investigation and waited for such result. However, the company took it as his abandonment
from work. Thus, his services were terminated. Cabusas then filed a complaint for illegal
dismissal.
Issue:

Was there a deliberate abandonment of work which would justify a dismissal when
an employee merely waited for the result of a pending investigation on charges
administratively filed against him?
Ruling:
NO. To constitute abandonment, two elements must concur, to wit: (1) the failure to
report for work or absence without valid or justifiable reason; and (2) a clear intention to
sever the employer-employee relationship, with the second element as the more
determinative factor and being manifested by some overt acts. Abandonment is a matter of
intention and cannot lightly be presumed from certain equivocal acts. To be a valid cause for
dismissal for abandonment, there must be clear proof of deliberate and unjustified intent to
sever the employer-employee relationship. Clearly, the operative act is still the employee's
ultimate act of putting an end to his employment. The Court ruled that the two elements of
abandonment were lacking. The Court found his absence from work not sufficient to
establish that he already had intention of abandoning his job. Besides, settled is the rule that
mere absence or failure to report for work is not tantamount to abandonment of work. Even
the failure to report for work after a notice to return to work has been served does not
necessarily constitute abandonment. There is no showing of respondent's intent to sever the
employer-employee relationship. It is also notable that when respondent was refused entry
to petitioners' premises and the letter of former's counsel was refused acceptance by the
latter, there is already constructive dismissal which led respondent to seek recourse by filing
an illegal dismissal case.

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CASE DIGESTS
UNIVAC DEVELOPMENT INC. vs SORIANO
G.R. No. 182072, June 19, 2013
Facts:

William Soriano was employed as a probationary legal assistant in Univac


Development Inc. Eight days prior to the completion of his probationary period, he was
informed that he was being terminated from employment due to the companys cost-cutting
measures. He asked for a thirty-day notice but his termination was ordered to be effective
immediately. He filed charges for illegal dismissal against his company. For its defense, the
company contends Soriano abandoned his work, after he expressed his intention to leave the
company to review for the Bar examinations.
Issue:

Can a probationary employee, who was not informed of the regularization standards
by his employer, be dismissed even before the completion of his probationary status?
Ruling:
NO. In this instance, he is deemed to have been hired from day one as a regular
employee due to the employers failure to specify the reasonable standards by which
Sorianos alleged poor performance was evaluated as well as to prove that such standards
were made known to him at the start of his employment. Probationary employment shall not
exceed six (6) months from the date the employee started working, unless it is covered by
an apprenticeship agreement stipulating a longer period. The services of an employee who
has been engaged on a probationary basis may be terminated for a just cause or when he
fails to qualify as a regular employee in accordance with reasonable standards made known
by the employer to the employee at the time of his engagement. An employee who is allowed
to work after a probationary period shall be considered a regular employee. It is primordial
that at the start of the probationary period, the standards for regularization be made known
to the probationary employee. In this case, the employer failed to present adequate evidence
to substantiate its claim that respondent was apprised of said standards. Equally important
is the requirement that in order to invoke "failure to meet the probationary standards" as a
justification for dismissal, the employer must show how these standards have been applied
to the subject employee. In this case, aside from its bare allegation, it was not shown that a
performance evaluation was conducted to prove that his performance was indeed
unsatisfactory. Indeed, the power of the employer to terminate a probationary employee is
subject to three limitations, namely: (1) it must be exercised in accordance with the specific
requirements of the contract; (2) the dissatisfaction on the part of the employer must be real
and in good faith, not feigned so as to circumvent the contract or the law; and (3) there must
be no unlawful discrimination in the dismissal. In this case, not only did petitioner fail to
show that respondent was apprised of the standards for regularization but it was likewise
not shown how these standards had been applied in his case.

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CASE DIGESTS
ABBOTT LABORATORIES, PHILIPPINES et al. vs ALCARAZ
G.R. No. 192571, July 23, 2013
Facts:

Pearlie Ann Alcaraz was accepted as a probationary employee for the position of
Regulatory Affairs and Information Manager for six months. She was informed of her
responsibilities and tasks as such. She was also informed of company policies. However, the
management deemed her not fit for regularization, thus her services were terminated even
before the end of her probationary period. Alcaraz then filed a complaint for illegal dismissal,
claiming that she should have already been considered as a regular and not a probationary
employee given Abbotts failure to inform her of the reasonable standards for her
regularization upon her engagement as required under Article 29525 of the Labor Code.
Issue:

Is the act of the employer in informing the probationary employee of his/her tasks
during the probationary period constitutive of informing the latter of the reasonable
standards for regularization?
Ruling:
YES. The employer is made to comply with two (2) requirements when dealing with
a probationary employee: first, the employer must communicate the regularization
standards to the probationary employee; and second, the employer must make such
communication at the time of the probationary employees engagement. If the employer fails
to comply with either, the employee is deemed as a regular and not a probationary employee.
Keeping with these rules, an employer is deemed to have made known the standards that
would qualify a probationary employee to be a regular employee when it has exerted
reasonable efforts to apprise the employee of what he is expected to do or accomplish during
the trial period of probation. This goes without saying that the employee is sufficiently made
aware of his probationary status as well as the length of time of the probation. The exception
to the foregoing is when the job is self-descriptive in nature, for instance, in the case of maids,
cooks, drivers, or messengers. The rule on notifying a probationary employee of the
standards of regularization should not be used to exculpate an employee who acts in a
manner contrary to basic knowledge and common sense in regard to which there is no need
to spell out a policy or standard to be met. In the same light, an employees failure to perform
the duties and responsibilities which have been clearly made known to him constitutes a
justifiable basis for a probationary employees non-regularization.

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CASE DIGESTS
SAMPAGUITA AUTO TRANSPORT CORPORATION vs NLRC
G.R. No. 197384, January 30, 2013
Facts:

Efren Sagad was hired allegedly as a probationary bus driver of Sampaguita Auto
Transport Corporation. During the evaluation of his work performance, the evaluator noted
Sagads reckless manner of driving. Despite such evaluation, as shown in the records,
Sampaguita retained Sagad as bus driver even after his probationary period. However,
because of the negative evaluation, the company terminated his services, asserting he did
not qualify as a regular employee. Sagad filed a complaint for illegal dismissal.
Issue:
Was the employee validly dismissed as a probationary employee for failure to qualify
as regular employee despite being retained after the probationary period?
Ruling:
NO. He was, instead, dismissed as a regular employee. The Court found that Sagad
already attained regular status when the records indicate that he was retained even after his
probationary period. Thus, as a regular employee, Sagad can only be dismissed for just
causes under Article 282 of the Labor Code. The irregularities or infractions committed by
Sagad in connection with his work as a bus driver constitute a serious misconduct or, at the
very least, conduct analogous to serious misconduct, under the above-cited Article 282 of
the Labor Code. To be sure, his tendency to speed up during his trips, his reckless driving,
his picking up passengers in the middle of the road, his racing with other buses and his
jostling for vantage positions do not speak well of him as a bus driver. While he denies being
informed, when he was hired, of the duties and responsibilities of a driver contained in a
document submitted in evidence by the company the requirement "3. to obey traffic rules
and regulations as well as the company policies. 4. to ensure the safety of the riding public
as well as the other vehicles and motorists" is so fundamental and so universal that any bus
driver is expected to satisfy the requirement whether or not he has been so informed.

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CASE DIGESTS
UNIVERSITY OF THE EAST vs PEPANIO
G.R. No. 193897, January 23, 2013
Facts:

Then DECS issued a regulation requiring college faculty members to have a masters
degree as a minimum qualification for acquiring regular status. The UE President issued a
policy that it would hire those who have no postgraduate units or masters degree for its
college teaching staff, in the absence of qualified applicants, only on a semester-to-semester
basis. Mariti Bueno and Analiza Pepanio were hired both on a semester-to-semester basis
for they could not qualify for probationary or regular status because they lack postgraduate
studies. UE then extended their appointments. They then both sought to be considered as
regular employees, Bueno having served for 6 years and Pepanio for 3 years on a fullload basis. When UE did not heed such demands, they both filed cases of illegal dismissal.
Issue:
Pursuant to a school CBA, can college faculty without post graduate studies attain
regular status despite a government regulation requiring such degree?
Ruling:
NO. A school CBA must be read in conjunction with statutory and administrative
regulations governing faculty qualifications. Such regulations form part of a valid CBA
without need for the parties to make express reference to it. While the contracting parties
may establish such stipulations, clauses, terms and conditions, as they may see fit, the right
to contract is still subject to the limitation that the agreement must not be contrary to law or
public policy. In promulgating the Manual of Regulations, DECS was exercising its power of
regulation over educational institutions, which includes prescribing the minimum academic
qualifications for teaching personnel. The requirement of a masteral degree for tertiary
education teachers is not unreasonable. The operation of educational institutions involves
public interest. The government has a right to ensure that only qualified persons, in
possession of sufficient academic knowledge and teaching skills, are allowed to teach in such
institutions. Government regulation in this field of human activity is desirable for protecting,
not only the students, but the public as well from ill-prepared teachers, who are lacking in
the required scientific or technical knowledge. They may be required to take an examination
or to possess postgraduate degrees as prerequisite to employment.

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CASE DIGESTS
FIRST PHILIPPINE INDUSTRIAL CORPORATION vs CALIMBAS and MAHILOM
G.R. No. 179256, July 10, 2013
Facts:

Raquel Calimbas and Luisa Mahilom were engaged by De Guzman Manpower Services
to perform secretarial and clerical jobs for First Philippine Industrial Corporation. For five
years, they have rendered services to FPIC. After which, they were informed that their
services were no longer needed by FPIC, effective one month after such notice. FPIC cited
that the reason for their termination is the expiration of the contract with DGMS. They both
filed for illegal dismissal cases against FPIC.
Issue:
Can the principal terminate the services of employees engaged by a labor-only
contractor on the ground of the expiration of the contract to provide services?
Ruling:
NO. In this case, it was sufficiently established that there exists an employeremployee relationship between FPIC and the workers, the former exercising the power of
control over their work performance. And having served for almost five years at FPIC,
Calimbas and Mahilom have already attained the status of regular employees. Therefore,
they could only be dismissed for just causes as provided for by Article 282 of the Labor Code.
FPIC failed to show any valid or just cause under the Labor Code on which it may justify the
termination of services of the employees. Also, apart from notifying that their services had
already been terminated, FPIC failed to comply with the rudimentary requirement of
notifying respondents regarding the acts or omissions which led to the termination of their
services as well as giving them an ample opportunity to contest the legality of their dismissal.
Having failed to establish compliance with the requirements of termination of employment
under the Labor Code, the employees dismissal is tainted with illegality.

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CASE DIGESTS
POSEIDON INTERNATIONAL MARITIME SERVICES, INC. vs TAMALA, et al.
G.R. No. 186475, June 26, 2013
Facts:

Poseidon hired Tito Tamala, Felipe Saurin Jr., Artemio Bo-oc and Joel Fernandez to
man the fishing vessels of Van Doorn and its partners. Two months after they were hired and
started to work, the operations abruptly stopped and did not resume. Before disembarking,
the employees executed an agreement providing them 50% of their unpaid salaries. The
employees, after disembarking, filed a complaint for illegal dismissal. They also claim for
their unpaid salaries. When the case reached the CA, said court applied Section 10 of RA
8042.
Issue:

Can employees of a vessel dismissed due to stoppage of fishing operations validly


claim for their unpaid salaries pursuant to Section 10 of RA 8042?
Ruling:
NO. The application of Section 10 of R.A. No. 8042 presumes a finding of illegal
dismissal. In this case, the Court held that the dismissal of the employees was not tainted
with illegality, Van Doorn having complied with the legal requisites. Article 283 of the Labor
Code provides that The employer may also terminate the employment of any employee due
to the installation of labor-saving devices, redundancy, retrenchment to prevent losses or
the closing or cessation of operation of the establishment or undertaking unless the closing
is for the purpose of circumventing the provisions of this Title, by serving a written notice
on the workers and the [Department of Labor and Employment] at least one (1) month
before the intended date thereof. x x x In case of retrenchment to prevent losses and in cases
of closures or cessation of operations of establishment or undertaking not due to serious
business losses or financial reverses, the separation pay shall be equivalent to one (1) month
pay or at least one-half (1/2) month pay for every year of service, whichever is higher. Since
Poseidon ceased its fishing operations in the valid exercise of its management prerogative,
Section 10 of R.A. No. 8042 finds no application.

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CASE DIGESTS
CANEDO vs KAMPILAN SECURITY AND DETECTIVE AGENCY, INC.
G.R. No.179326, July 31, 2013
Facts:

Luciano Canedo was hired as security guard and was assigned in one of the power
barges of the National Power Corporation. He was suspended for a month for not wearing
the proper uniform while on duty. Prior to the expiration of the suspension period, NPC
informed Kampilan, Canedos agency, that it was no longer interested in Canedos services.
He was issued with a certification for his intended retirement; however, the certification
stated that he was terminated from service. He filed a complaint for illegal dismissal.
Issue:
Is an employee effectively dismissed even before the expiration of the suspension
period?
Ruling:
NO. In the present case, the Court held that the employee then was merely on a
floating status. Such a floating status is lawful and not unusual for security guards employed
in security agencies as their assignments primarily depend on the contracts entered into by
the agency with third parties. Canedo relies on the word "terminated" as used in the
Certification issued him and argues that the same is a clear indication that he was dismissed
from service. The Court said the Canedo cannot simply rely on this piece of document since
the fact of dismissal must be evidenced by positive and overt acts of an employer indicating
an intention to dismiss. Here, aside from this single document, he proffered no other
evidence showing that he was dismissed from employment. While it is true that he was not
allowed to report for work after the period of his suspension expired, the same was due to
NPCs request for his replacement as NPC was no longer interested in his services.
Countering such status, Canedo contends that even at present, he is still not given any new
duties. A floating status can ripen into constructive dismissal only when it goes beyond the
six-month maximum period allowed by law. In this case, Canedo filed the Complaint for
illegal dismissal even before the lapse of the six-month period. Hence, his claim of illegal
dismissal lacks basis. Moreover, it was in fact Canedo who intended to terminate his
relationship with respondents through his planned retirement. This is further bolstered by
his prayer in his Complaint where he sought for separation pay and not for reinstatement.

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CASE DIGESTS
CERVANTES vs PAL MARITIME CORPORATION
GR No. 175209, January 16, 2013
Facts:

Petitioner was hired as master of the vessel M/V Themistocles by PAL Maritime
Corporation, the manning agent of respondent Western Shipping Agencies, PTE., LTD. On
July 31, 1995, a telex message was sent to petitioner enumerating complaints received from
Colonial Shipping, the owner of the vessel. On the following day, petitioner sent a telex
message, imputing ill-motive on the part of the foreign inspectors who were making false
accusations against Filipino crew members. In the same message, petitioner addressed all
complaints raised against him. On August 2, petitioner sent another telex message informing
Western Shipping of the unbearable situation on board; petitioner asked that he be relieved
from his post. In response to said message, Western Shipping informed petitioner that the
owners had decided to grant his relieve and that the pre-matured ending of his contract was
mutually agreed. Petitioner accepted the decision. On October 25, 1996, Petitioner filed a
complaint for illegal dismissal.
Issue:
Was the act of the employee asking for relief from his post constitute resignation?
Held:
YES. Cervantes resigned from his employment. Records show that a telex message
containing the poor work performance of petitioner as the master of the vessel was
forwarded by the ship owner to respondent PAL Maritime. In connection with the
deficiencies, petitioner was given one month by the owner to take corrective measures to
improve on the deficiencies. Instead of complying with the request of the ship owners,
petitioner opted to be relieved from his post. While it is true that his resignation was an
offshoot of the complaint of the ship owners but the latter were merely requesting petitioner
and its chief officers to improve in their performance. The dismissal aspect was not
dismissed at all. It was the petitioner who brought out the idea and which was accepted by
the ship owner.

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CASE DIGESTS
GENERAL MILLING CORPORATION vs VIAJAR
G. R. No. 181738, January 30, 2013
Facts:

Viajar was an employee of GMC who was terminated on the ground of redundancy.
She filed a complaint before the Regional Arbitration Branch in Cebu City after she was
denied entry from the companys premises a month prior to the effective of her severance
and was subsequently asked to sign an application for retirement and benefits. She also
found that the company hired 15 new employees arousing her suspicion that her dismissal
was not necessary. However, GMC reasoned out that the termination of Viajar was necessary
because of the economic setbacks that the company was suffering. The Labor Arbiter
rendered a decision favoring GMC saying that it acted in good faith in terminating Viajar and
said decision was upheld by the NLRC upon the appeal by Viajar.
Issue:
Was the employee validly terminated on the ground of redundancy?
Ruling:
NO, the termination of Viajar due to redundancy was invalid. Article 283 of the Labor
Code validly provides redundancy as one of the authorized causes for dismissal provided
that the employer must comply with the requirements for a valid implementation of the
companys redundancy program. In the case at hand, the petitioner failed to present
substantial proof to support GMCs general allegations of redundancy. The lettermemorandum which contains general allegations is insufficient in supporting Viajars
termination of employment due to redundancy as there was no proof showing that GMC
made evaluations of the existing positions in the company nor did they show proof that the
company is experiencing business slow down or over hiring.

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CASE DIGESTS
VILLANUEVA, SR. vs BALIWAG NAVIGATION, INC., et al.
G.R. No. 206505, July 24, 2013
Facts:

Jereme Villanueva, Sr. entered into a ten-month employment contract with Baliwag
Navigation, Inc. His pre-employment medical examination indicated his fitness for work,
although it was provided that he had heart disease. While on work, he suddenly felt chest
pains and difficulty in breathing. He was given medication to alleviate the pain. He was
repatriated upon the expiration of his contract. He filed a claim for disability benefits from
the employer, claiming that his heart ailment was work-related, because he asserts that the
employer still engaged him for work despite such ailment.
Issue:

Can an employee claim compensability on a heart ailment he had even prior to his
work engagement?
Ruling:
NO. Villanueva was repatriated for finished contract, not for medical reasons. More
importantly, while the 2000 POEA-Standard Employment Contract (Section 32-A11)
considers a heart disease as occupational, Villanueva failed to satisfy by substantial evidence
the condition laid down in the Contract that if the heart disease was known to have been
present during employment, there must be proof that an acute exacerbation was clearly
precipitated by the unusual strain brought about by the nature of his work.

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CASE DIGESTS
SANG-AN vs EQUATOR KNIGHTS DETECTIVE AND SECURITY AGENCY, INC.
G.R. No. 173189, February 13, 2013
Facts:

Jonathan Sang-an was the Assistant Operation Manager of Equator Knights Detective
and Security Agency, Inc. Among his duties was the safekeeping of Eqautors firearms. On a
certain occasion, Equator discovered, on inventory, that two firearms were missing and that
Sang-an was responsible for such loss. He was temporarily suspended from work pending
investigation. While under suspension, a security guard was apprehended by policeman in
violation of the Comelec gun ban. The unlicensed firearm, according to the guard, was issued
to him by Sang-an. He filed a case for illegal suspension, but treated such as illegal dismissal,
claiming violation of due process. Equator argued that Sang-an was not illegally dismissed,
as his infractions were just causes as provided by Article 282 of the Labor Code.
Issue:
Was the employee validly dismissed despite the absence of the two-notice
requirement?
Ruling:
NO. On the substantive aspect, there was indeed a just cause for Sang-ans
termination, i.e. serious misconduct. By losing two firearms and issuing an unlicensed
firearm, Sang-an committed serious misconduct. He did not merely violate a company policy;
he violated the law itself. However, Equator failed to accord Sang-an procedural due process,
as he was not given any written notice informing him of the acts he committed to justify his
dismissal. The notice of suspension given to Sang-an only pertained to the first offense, i.e.,
the loss of Equators firearms underSang-an watch. With respect to his second offense (i.e.,
the issuance of an unlicensed firearm to Equators security guard that became the basis for
his dismissal), Sang-an was never given any notice that allowed him to air his side and to
avail of the guaranteed opportunity to be heard. In order to validly dismiss an employee, the
observance of both substantive and procedural due process by the employer is a condition
sine qua non. Procedural due process requires that the employee be given a notice of the
charge against him, an ample opportunity to be heard, and a notice of termination.

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CASE DIGESTS
POLYFOAM-RGC INTERNATIONAL CORPORATION vs CONCEPCION
G.R. No. 172349, June 13, 2012
Facts:

Edgardo Concepcion alleged that he was hired by Polyfoam as an all-around factory


worker for almost six years. One time, he discovered that his time card was not in the rack.
It was then that he was informed that the management decided to dismiss him due to an
infraction of a company rule. He wrote a letter requesting re-admission to work, but it was
not responded. Thus, it prompted Concepcion to file a case for illegal dismissal. Gramaje
intervened in the case, saying that she is the real employer of Concepcion. Polyfoam denied
that Concepcion was its employee.
Issue:

Did the act of the company in informing the employee of the managements decision
of terminating his employment after discovering that the latters time card can no longer be
found constitute as sufficient notice to dismiss?
Ruling:
NO. In fact, there was no abandonment in the case, as opposed to the allegations of
Polyfoam. The latter failed to show any valid or authorized cause under the Labor Code
which allowed it to terminate the services of respondent. Neither was it shown that
Concepcion was given ample opportunity to contest the legality of his dismissal. No notice of
termination was given to him. Clearly, Concepcion was not afforded due process. Having
failed to establish compliance with the requirements of termination of employment under
the Labor Code, the dismissal of respondent was tainted with illegality.

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CASE DIGESTS
ESGUERRA vs VALLE VERDE COUNTRY CLUB, INC.
G.R. No. 173012, June 13, 2012
Facts:

Valle Verde hired Dolores Esguerra as Head Food Checker and was promoted to Cost
Control Supervisor. After a function, the management found out that the proceeds were not
entirely remitted to the accounting department and that there were unauthorized food
charges against the account of one of its members who participated in the said function. The
management then sent a memorandum requiring Esguerra to explain why no disciplinary
action should be taken against her, and placing her in preventive suspension. Even though
she submitted her explanation, such was not found to be satisfactory by the management;
thus, she was dismissed from employment. It prompted Esguerra to file a complaint for
illegal dismissal. The NLRC found she was not illegally dismissed on the ground of loss and
confidence. In this petition, Esguerra contends she could not be dismissed on such ground,
for she was only a mere regular employee, with a position not vested with trust and
confidence.
Issues:
1) Does a memorandum directing an employee to explain why a disciplinary action
should not be taken against her constitute a sufficient notice?
2) Is a cost control supervisor an employee vested with trust and confidence?
Ruling:
1) YES. The law does not require that an intention to terminate ones employment
should be included in the first notice. It is enough that employees are properly
apprised of the charges brought against them so they can properly prepare their
defenses; it is only during the second notice that the intention to terminate ones
employment should be explicitly stated. Also, the existence of an actual, formal
"trial-type" hearing, although preferred, is not absolutely necessary to satisfy the
employee's right to be heard. Esguerra was able to present her defenses; and only
upon proper consideration of it did Valle Verde send the second memorandum
terminating her employment. Since Valle Verde complied with the two-notice
requirement, no procedural defect exists in Esguerras termination.
2) YES. Esguerra held the position of Cost Control Supervisor and had the duty to
remit to the accounting department the cash sales proceeds from every
transaction she was assigned to. This is not a routine task that a regular employee
may perform; it is related to the handling of business expenditures or finances.
For this reason, Esguerra occupies a position of trust and confidence. Any breach
of the trust imposed upon her can be a valid cause for dismissal. Loss of confidence
as a just cause for termination of employment can be invoked when an employee
holds a position of responsibility, trust and confidence. In order to constitute a
just cause for dismissal, the act complained of must be related to the performance
of the duties of the dismissed employee and must show that he or she is unfit to
continue working for the employer for violation of the trust reposed in him or her.
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CASE DIGESTS
PRUDENTIAL GUARANTEE AND ASSURANCE EMPLOYEE LABOR UNION vs NLRC
G.R. No. 185335, June 13, 2012
Facts:

Vallota was employed as a junior programmer of PGAI. After a spot security check of
the computer unit he was using in the company, it was discovered that he was keeping
certain information which the company believed to be confidential in nature. He was sent a
memorandum directing him to explain why he should not be dismissed. He replied, asking
for a conference, but it was turned down by the management. He was dismissed from his
work on the ground of loss of confidence.
Issues:
1) Can a junior programmer of a company be validly terminated on the ground of
loss of confidence?
2) Was there a valid dismissal of an employee despite his request of a conference
being turned down by his employer?
Ruling:
1) YES. Loss of confidence should ideally apply only to cases involving employees
occupying positions of trust and confidence or to those situations where the
employee is routinely charged with the care and custody of the employer's money
or property. Vallotas position is included in the second class of employees
occupying positions of trust and confidence, thus satisfying the first requisite.
However, although his position made him privy to confidential data, his act of
keeping such confidential data in his computer could not have been an act
justifying his dismissal, had it been proven by his employer that such was an
attempt to defraud his employer or to use the files in any purpose other than for
which it was intended. Absent this intention, the act of Vallota does not warrant
his dismissal.
2) NO. The Court said that when Vallota asked for a conference, the formal hearing
allowed by law to be conducted became mandatory. After PGAI failed to
affirmatively respond to such request, it follows that the hearing requirement was
not complied with and, therefore, Vallota was denied his right to procedural due
process.

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CASE DIGESTS
SAMAR-MED DISTRIBUTION vs NLRC
G. R. No. 162385, July 15, 2013
Facts:

Private respondent was the employee of petitioner-company charged with


supervising the companys sales personnel and sales agent and of representing the company
in transactions with the government. Josafat Gutang filed a complaint for money claims as a
result of the non-payment of his salary, allowances and commissions from sales and 13th
month pay, all of different time frames. He also alleged that the company made illegal
deductions from his salary and that his dismissal was invalid, because he could not think of
any infraction that would cause the same and that he did not receive any notice informing
him of his cessation.
Issue:

Was the termination valid?

Ruling:
No, petitioner was not illegally dismissed. Gutang was a managerial employee whose
position is vested with confidence on delicate matters which he failed to uphold in one event,
where he failed to account for and to turn over his sales collections. Article 282 (c) of the
Labor Code allows an employer to terminate an employees employment on the ground of
the latters fraud or willful breach of trust and confidence reposed in him if the employer has
a reasonable ground to believe that the employee was responsible for the misconduct. Such
requirement was proven to exist in the given case.
However, he was not accorded due process. Article 277 of the Labor Code provides
that in order to finally dismiss the employee, an employer is obligated to send him two
written notices: (a) one informing him of the acts or omissions for his dismissal and (b)
second notifying him of the employers decision to dismiss him after he was given the
opportunity to be heard and to defend himself. In the case at bar, although the company
issued a demand letter to Gutang, this would not constitute as sufficient to comply with said
requirement as its purpose is different from the requirement under the law, hence, the
company did not comply with the twin-notice requirement. No notices were issued and he
was not given the opportunity to be heard. This lack of statutory due process would not
nullify the dismissal of the employee since the dismissal was for just cause. Therefore, Gutang
is still entitled to nominal damages.

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CASE DIGESTS
PADILLO vs RURAL BANK OF NABUNTURAN, INC.
GR No. 199338, January 21, 2013
Facts:

On October 1, 1977, petitioner was employed by respondent Bank as its SA


Bookkeeper. Due to liquidity problems that occurred sometime in 2003, the Bank took out
retirement/insurance plans with Philam Life for all its employees in anticipation of its
possible closure and severance of its personnel. The Bank procured a Philam Life Plan in
favor of Padillo for a benefit amount of P100,000.00, set to mature on July 11, 2009. On
October 14, 2004, Oropeza bought majority shares of stock in the Bank and took over its
management which brought its gradual rehabilitation. The Bank's finances improved and
again regained liquidity.
In the later part of 2007, petitioner suffered a mild stroke due to hypertension which
consequently impaired his ability to effectively pursue his work. On September 10, 2007,
petitioner wrote to respondent Oropeza expressing his intention to avail of the early
retirement package but was unheeded by the latter. Petitioner asserted that the Bank had
adopted a policy of granting its aging employees early retirement packages, pointing out one
of his co-employee, Lusan. On October 3, 2007, petitioner was separated from work due to
his failing health.
Petitioner was substituted by his legal heirs due to his death.
Issues: 1. Whether or not petitioner is entitled to retirement benefits.
2. Whether or not respondents acted in bad faith when they did not acted upon
petitioner's claim for retirement benefits.
Held: 1. No. Petitioner should have met the age and tenure requirements set forth under
Article 300 of the Labor Code to be entitled to the retirement benefits provided therein.
Unfortunately, petitioner was able to comply with the five (5) year tenure requirement- as
he served for 29 years- he however, fell short with respect to the sixty (60) year age
requirement given that he was only fifty-five (55) years old when he retired. Therefore,
without prejudice to the proceeds due under the Philam Life Plan, petitioner's claim for
retirement benefits must be denied.
2. No, there was no bad faith in any of respondents actuations as they were within their
right to ignore petitioner's misplaced claim for retirement benefits. Respondents' obstinate
refusal to accede to petitioner's request is precisely justified by the fact that there lies no
basis under any applicable agreement or law which accords the latter the right to demand
any retirement benefits from the Bank. Neither can the grant of an early retirement package
to Lusan show that petitioner was unfairly discriminated upon. Records show that the same
was merely an isolated incident and petitioners failed to show that any bad faith or motive
attended such disparate treatment between Lusan and petitioner. Also, there is no showing
that other Bank employees were accorded the same benefits as that of Lusan which thereby
dilutes the soundness of petitioners' imputation of discrimination and bad faith.
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CASE DIGESTS
DE JESUS vs AQUINO
G.R. No. 164662, February 18, 2013
Facts:

De Jesus was employed by Supersonic and held the position of Sales Promotion
Officer, tasked to solicit clients and sell plane tickets to various agencies on credit. Her
employer dismissed her because a certain amount of ticket sales were not turned over to the
company. Several demands for the turnover of the ticket sales were given to De Jesus, but
despite such she was not able to settle her obligations. She was filed with estafa. De Jesus
alleged she was not granted notice and opportunity to be heard prior to the dismissal.
Issue:
Can the failure to turn over sales be a ground to dismiss an employee for loss of trust
and confidence?
Ruling:
YES. In termination of employment based on just cause, it is not enough that the
employee is guilty of misfeasance towards his employer, or that his continuance in service is
patently inimical to the employers interest. The law requires the employer to furnish the
employee concerned with two written notices one, specifying the ground or grounds for
termination and giving said employee reasonable opportunity within which to explain his
side, and another, indicating that upon due consideration of all the circumstances, rounds
have been established to justify his termination. In addition to this, a hearing or conference
is also required, whereby the employee may present evidence to rebut the accusations
against him. De Jesus failure to fully account her collections is sufficient justification for the
company to lose its trust and confidence in her. Loss of trust and confidence as a ground for
dismissing an employee does not require proof beyond reasonable doubt. It is sufficient if
there is "some basis" for such loss of confidence, or if the employer has reasonable grounds
to believe that the employee concerned is responsible for the misconduct, as to be unworthy
of the trust and confidence demanded by his position.
Despite the non-compliance with the two-notice rule, the dismissal is still valid.
However, De Jesus is entitled to the award of Php 50,000.00 as nominal damages.

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CASE DIGESTS
CRUZ vs BPI
G.R. No. 173357, February 13, 2013
Facts:

After 13 years of service with the bank, Rowena Cruz was dismissed on grounds of
negligence and breach of trust, allegedly on approving several fraudulent transactions.
Notice and hearing were granted. However, Cruz posits she could not be terminated on such
grounds, her position merely being a Cash Officer at the time of those transactions.
Issue:

Can an employee being remiss of her duties be validly terminated on the ground of
breach of trust?
Ruling:
YES. Cruz holds a managerial position since she is tasked to act in the interest of her
employer as she exercises independent judgment when she approves pre-termination of
USD CDs or the withdrawal of deposits. Petitioner was remiss in the performance of her duty
to approve the pre-termination of certificates of deposits by legitimate depositors or their
duly-authorized representatives, resulting in prejudice to the bank, which reimbursed the
monetary loss suffered by the affected clients. Hence, respondent was justified in dismissing
petitioner on the ground of breach of trust. As long as there is some basis for such loss of
confidence, such as when the employer has reasonable ground to believe that the employee
concerned is responsible for the purported misconduct, and the nature of his participation
therein renders him unworthy of the trust and confidence demanded of his position, a
managerial employee may be dismissed.

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CASE DIGESTS
MERALCO vs DEJAN
G.R. No. 194106, June 18, 2012
Facts:

Dejan was hired to collect payments for electric service installations and issue
corresponding meter sockets after payment of such deposit. He was, one time, asked to
explain why one private electrician was seen to take some meter sockets home. He admitted
issuing meter sockets without authorization of the applicants for electric connection.
Meralco dismissed him on the grounds of serious misconduct and loss of trust and
confidence.
Issue:
Was the employees act of taking company property without authorization a justified
cause of his dismissal?
Ruling:
YES. Meralco cannot be blamed for losing its trust and confidence in Dejan. He is no
ordinary employee. As branch representative, "he was principally charged with the function
and responsibility to accept payment of fees required for the installation of electric service
and facilitate issuance of meter sockets." The duties of his position require him to always act
with the highest degree of honesty, integrity and sincerity, as the company puts it. In light of
his fraudulent act, Meralco, an enterprise imbued with public interest, cannot be compelled
to continue Dejan's employment, as it would be inimical to its interest. Needless to say, the
law, in protecting the rights of the laborer, authorizes neither oppression nor selfdestruction of the employer. For sure, Dejan was validly dismissed for serious misconduct,
and loss of trust and confidence.

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CASE DIGESTS
PAULINO vs NLRC
G.R. No. 176184, June 13, 2012
Facts:

PLDT terminated Paulinos employment on the grounds of serious misconduct and


loss of trust and confidence, after finding out that several company properties were being
kept in his house. He was also charged with qualified theft. However, the criminal charge was
terminated because his guilt was not proved beyond reasonable doubt.
Issue:

Does an acquittal in a criminal case for qualified theft render the loss of confidence
baseless?
Ruling:
NO. Notwithstanding petitioners acquittal in the criminal case for qualified theft,
PLDT had adequately established the basis for the companys loss of confidence as a just
cause to terminate petitioner. This Court finds that approach to be correct, since proof
beyond reasonable doubt of an employees misconduct is not required in dismissing an
employee. Rather, as opposed to the "proof beyond reasonable doubt" standard of evidence
required in criminal cases, labor suits require only substantial evidence to prove the validity
of the dismissal. To warrant dismissal based on loss of confidence, there must be some basis
for the loss of trust or the employer must have reasonable grounds to believe that the
employee is responsible for misconduct that renders the latter unworthy of the trust and
confidence demanded by his or her position. Here, petitioner disputes the sufficiency of
PLDTs basis for loss of trust and confidence. He alleges that he did not steal the plant
materials, considering that he had lawful possession. However, assuming that he lawfully
possessed the materials, PLDT still had ample reason or basis to already distrust petitioner.
For more than a month, he did not even inform PLDT of the whereabouts of the plant
materials. Instead, he stocked these materials at his residence even if they were needed in
the daily operations of the company. In keeping with the honesty and integrity demanded by
his position, he should have turned over these materials to the plants warehouse.

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CASE DIGESTS
APO CEMENT CORPORATION vs BAPTISMA
G.R. No. 176671, June 20, 2012
Facts:

Apo Cement received information that some of its personnel, including Baptisma, the
Power Plant Manager, were receiving kickbacks from its suppliers. Upon investigation, he
was asked to explain, but he merely denied the accusations. Series of hearings were
conducted. The management was convinced of Baptismas fault, hence he was dismissed on
the ground of loss of trust and confidence.
Issue:

Was the employee validly dismissed due to loss of trust and confidence for receiving
kickbacks from the companys suppliers?
Ruling:
YES. To validly dismiss an employee on the ground of loss of trust and confidence
under Article 282 (c) of the Labor Code of the Philippines, the following guidelines must be
observed: "1) loss of confidence should not be simulated; 2) it should not be used as
subterfuge for causes which are improper, illegal or unjustified; 3) it may not be arbitrarily
asserted in the face of overwhelming evidence to the contrary; and 4) it must be genuine, not
a mere afterthought to justify earlier action taken in bad faith." More important, it "must be
based on a willful breach of trust and founded on clearly established facts." As the power
plant manager, Baptisma had some power or authority "vital and indispensable to the
procurement process." Jurisprudence consistently holds that for managerial employees "the
mere existence of a basis for believing that such employee has breached the trust of his
employer would suffice for his dismissal."

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CASE DIGESTS
VILLANUEVA, JR. vs NLRC
G.R. No. 176893, June 13, 2012
Facts:

Villanueva was employed as a bill collector. His supervisor referred a report


regarding unusual contract modifications in the transactions he handled. It was found out
that he was charging excessive fees for applicants for electric service and kept such excess
to himself. He was then informed of the investigation to be conducted by the company.
Meralco denied his request to cross-examine the witnesses who were not Meralco
employees. He was then sent with a notice of termination on the ground of serious
misconduct, due to his violation of the Company Code of Discipline.
Issue:

Can loss of trust and confidence be a ground to dismiss erring employees tasked with
handling company funds?
Ruling:
YES. The loss of trust and confidence must be based on willful breach of the trust
reposed in the employee by his employer. Such breach is willful if it is done intentionally,
knowingly, and purposely, without justifiable excuse, as distinguished from an act done
carelessly, thoughtlessly, heedlessly or inadvertently. Moreover, it must be based on
substantial evidence and not on the employers whims or caprices or suspicions otherwise,
the employee would eternally remain at the mercy of the employer. Loss of confidence must
not be indiscriminately used as a shield by the employer against a claim that the dismissal of
an employee was arbitrary. And, in order to constitute a just cause for dismissal, the act
complained of must be work-related and shows that the employee concerned is unfit to
continue working for the employer. In addition, loss of confidence as a just cause for
termination of employment is premised on the fact that the employee concerned holds a
position of responsibility, trust and confidence or that the employee concerned is entrusted
with confidence with respect to delicate matters, such as handling or case and protection of
the property and assets of the employer. The betrayal of this trust is the essence of the
offense for which an employee is penalized.

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CASE DIGESTS
NISSAN MOTORS PHILIPPINES vs ANGELO
G.R. No. 164181, September 14, 2011
Facts:

Victorino Angelo was employed by Nissan Motors as one of its payroll staff. He had
been on sick leave and vacation leave on two occasions, causing the non-preparation of the
payroll. He was then sent with a notice to explain, in consideration of a dismissal on the
ground of serious misconduct, willful disobedience, and gross neglect of duties. An
investigation was then conducted, but then the employer was convinced that Angelo was to
be dismissed; hence, a notice to terminate was sent.
Issue:
Was an employee guilty of gross neglect of duties for not being able to perform his
tasks during his approved leave of absences?
Ruling:
YES. In finding that petitioner was able to adduce evidence that would justify its
dismissal of respondent, the NLRC correctly ruled that the latter's failure to turn over his
functions to someone capable of performing the vital tasks which he could not effectively
perform or undertake because of his heart ailment or condition constitutes gross neglect.
Gross negligence connotes want of care in the performance of one's duties. Habitual neglect
implies repeated failure to perform one's duties for a period of time, depending upon the
circumstances. On the other hand, fraud and willful neglect of duties imply bad faith on the
part of the employee in failing to perform his job to the detriment of the employer and the
latter's business. The onus probandi to prove the lawfulness of the dismissal rests with the
employer. In termination cases, the burden of proof rests upon the employer to show that
the dismissal is for just and valid cause. Failure to do so would necessarily mean that the
dismissal was not justified and, therefore, was illegal. Substantial evidence, which is the
quantum of proof required in labor cases, is that amount of relevant evidence which a
reasonable mind might accept as adequate to justify a conclusion.

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CASE DIGESTS
YABUT vs MERALCO
G.R. No. 190436, January 16, 2012
Facts:

Yabut was then a Branch Field Representative when Meralco was informed of an
illegal service connection at his residence. A notice was send to Yabut, informing him of an
investigation to be conducted. He denied such allegations. The investigating team found out
that Yabuts electric service was already disconnected, but his meter still registered
consumption. Thus, he was terminated on the ground of dishonesty, in violation of the
company rules.
Issue:
Is dishonesty a valid ground for dismissing an employee?
Ruling:
YES. The Court said that such violation constituted serious misconduct, which is a just
cause for terminating an employee. Article 282 (a) provides that an employer may terminate
an employment because of an employee's serious misconduct, a cause that was present in
this case in view of the petitioner's violation of his employer's code of conduct. Misconduct
is defined as the "transgression of some established and definite rule of action, a forbidden
act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error
in judgment." For serious misconduct to justify dismissal, the following requisites must be
present: (a) it must be serious; (b) it must relate to the performance of the employee's duties;
and (c) it must show that the employee has become unfit to continue working for the
employer. It also qualified as a fraud or willful breach of trust. As a supervisor with duty and
power that included testing of service meters and investigation of violations of contract of
customers, his position can be treated as one of trust and confidence, requiring a high degree
of honesty as compared with ordinary rank-and-file employees.

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CASE DIGESTS
DONGON vs RAPID MOVERS AND FORWARDERS, CO., INC.
G.R. No. 163431, August 28, 2013
Facts:

Dongons job was to facilitate the loading and unloading of Tanduays trucks. He and
his driver went to Tanduay to get the goods for distribution. The security guard called their
attention, as the driver was not wearing an ID. Dongon then lent his ID to the driver. The
guard saw this misrepresentation and reported the same with Tanduay management.
Dongon believed he acted in good faith of lending his ID to the driver in order to facilitate the
deliveries. After an investigation, Dongon was dismissed on the ground of willful
disobedience.
Issue:

Was the employee guilty of willful disobedience even if he acted in good faith?

Ruling:
NO. The disobedience attributed to Dongon could not be justly characterized as willful
within the contemplation of Article 296 of the Labor Code. He neither benefitted from it, nor
thereby prejudiced the business interest of Rapid Movers. His explanation that his deed had
been intended to benefit Rapid Movers was credible. There could be no wrong or perversity
on his part that warranted the termination of his employment based on willful disobedience.
Willful disobedience to the lawful orders of an employer is one of the valid grounds to
terminate an employee under Article 296 (formerly Article 282) of the Labor Code. For
willful disobedience to be a ground, it is required that: (a) the conduct of the employee must
be willful or intentional; and (b) the order the employee violated must have been reasonable,
lawful, made known to the employee, and must pertain to the duties that he had been
engaged to discharge. Willfulness must be attended by a wrongful and perverse mental
attitude rendering the employees act inconsistent with proper subordination. In any case,
the conduct of the employee that is a valid ground for dismissal under the Labor Code
constitutes harmful behavior against the business interest or person of his employer. It is
implied that in every act of willful disobedience, the erring employee obtains undue
advantage detrimental to the business interest of the employer.

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CASE DIGESTS
CAVITE APPAREL, INC. vs MARQUEZ
G.R. No. 172044, February 06, 2013
Facts:

Michelle Marquez was a regular employee in the Finishing Department of Cavite


Apparel. On several occasions, she got sick and did not report to work, but she presents
medical certificates upon her return. Despite such, her certificates were not honored by her
employer. After her last absence, upon return, she was terminated for her habitual
absenteeism.
Issue:

Despite the necessity of the absences and presentation of proofs of such, can an
employee be validly dismissed for habitual absenteeism?
Ruling:
NO. The Court did not consider the absences habitual, and did not apply the doctrine
of totality of infractions. Neglect of duty, to be a ground for dismissal under Article 282 of the
Labor Code, must be both gross and habitual. Gross negligence implies want of care in the
performance of ones duties. Habitual neglect imparts repeated failure to perform ones
duties for a period of time, depending on the circumstances. Based on the records, there
simply cannot be a case of gross and habitual neglect of duty against Michelle. Even assuming
that she failed to present a medical certificate for her sick leave on May 8, 2000, the records
are bereft of any indication that apart from the four occasions when she did not report for
work, Michelle had been cited for any infraction since she started her employment with the
company in 1994. Four absences in her six years of service cannot be considered gross and
habitual neglect of duty, especially so since the absences were spread out over a six-month
period.
Although Michelle was fully aware of the company rules regarding leaves of absence,
and her dismissal might have been in accordance with the rules, it is well to stress that the
Court is not bound by such rules. Even when there exist some rules agreed upon between
the employer and employee on the subject of dismissal, the same cannot preclude the State
from inquiring on whether their rigid application would work too harshly on the employee.
This Court will not hesitate to disregard a penalty that is manifestly disproportionate to the
infraction committed.

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CASE DIGESTS
TEGIMENTA CHEMICAL PHILIPPINES vs OCO
G.R. No. 175369, February 27, 2013
Facts:

Oco was a material controller in Tegimenta Chemical Philippines. By reason of her


pregnancy, Oco incurred numerous instances of absence and tardiness. Her employer
advised her to take a vacation, which she did. After working for four days upon her return,
her employer told her not to report to work anymore, which she did. At the end of the month,
she inquired about her status, but was informed that she already lost her job. Oco filed a
complaint for illegal dismissal. The employer opposed, alleging Ocos abandonment.
Issue:
Was the employees absence without leave after being told not to report to work
anymore constitute abandonment?
Ruling:
NO. The mere absence of an employee is not sufficient to constitute abandonment. As
an employer, Tegimenta has the burden of proof to show the deliberate and unjustified
refusal of the employee to resume the latters employment without any intention of
returning. For abandonment to exist, two factors must be present: (1) the failure to report
for work or absence without a valid or justifiable reason; and (2) a clear intention to sever
the employer-employee relationship, with the second element as the more determinative
factor being manifested by some overt acts. Here, Tegimenta failed to discharge its burden
of proving that Oco desired to leave her job. The courts a quo uniformly found that she had
continuously reported for work right after her vacation, and that her office attendance was
simply cut off when she was categorically told not to report anymore. These courts even
noted that she had also called up the office to follow up her status; and when informed of her
definite termination, she lost no time in filing a case for illegal dismissal. Evidently, her
actions did not constitute abandonment and instead implied her continued interest to stay
employed. Abandonment is a matter of intention and cannot lightly be inferred or legally
presumed from certain equivocal acts. For abandonment to be appreciated, there must be a
"clear, willful, deliberate, and unjustified refusal of the employee to resume employment."
Here, the mere fact that Oco asked for separation pay, after she was told to no longer report
for work, does not reflect her intention to leave her job. She is merely exercising her option
under Article 279 of the Labor Code, which entitles her to either reinstatement and back
wages or payment of separation pay.

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CASE DIGESTS
COSMOS BOTTLING CORP. vs FERMIN
G.R. No. 193676, June 20, 2012
Facts:

Fermin was charged for theft by his co-employee. He explained it was merely a
practical joke and had every intention to return the phone. After an investigation, COSMOS
found Fermin guilty of stealing his co-employees phone and terminated him after 27 years
of service. Afterwards, his co-employee desisted and withdrew his complaint for theft.
Fermin claims he was illegally dismissed.
Issue:

Was the act of stealing a co-employees property a warranted ground for an


employees dismissal?
Ruling:
YES, it being analogous to serious misconduct. Theft committed against a coemployee is considered as a case analogous to serious misconduct, for which the penalty of
dismissal from service may be meted out to the erring employee. Misconduct involves "the
transgression of some established and definite rule of action, forbidden act, a dereliction of
duty, willful in character, and implies wrongful intent and not mere error in judgment." For
misconduct to be serious and therefore a valid ground for dismissal, it must be: (1) of grave
and aggravated character and not merely trivial or unimportant and (2) connected with the
work of the employee. A cause analogous to serious misconduct is a voluntary and/or willful
act or omission attesting to an employees moral depravity. Theft committed by an employee
against a person other than his employer, if proven by substantial evidence, is a cause
analogous to serious misconduct.

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