Vous êtes sur la page 1sur 25

Adkins vs Childrens Hospital

Brief Fact Summary. In 1918, the District of Columbia passed a statute that established a minimum wage
for women and children, the constitutionality of which was challenged in this matter.

Synopsis of Rule of Law. The freedom to contract may be restricted only when exceptional circumstances
exist as they relate to the police powers of a state.
Facts. The District of Columbia imposed a law upon all employers forcing them to pay their women and
child workers a predetermined minimum wage.

Issue. Is the fixing of a minimum wage for children and women constitutional?
Held. No. It is inappropriate to restrict a womans freedom to contract for her labor service when such
restriction is not equally applied to a man. The payment of a minimum wage puts a burden on the employer
that is completely unrelated to his business
Discussion. This case reflects the change in societys regard for the female worker. The Supreme Court of
the United States (Supreme Court) expressly recognizes that a mature woman has the same contracting
competence as a man. The Supreme Court decides to side with the business owners and the economic
consequence that a minimum wage would have on them. Specifically, the closing of businesses is mentioned
as a detractor and weighed against the potential thriftiness or lack thereof of women workers.

People vs Julio Pomar

The accused being the manager and person in charge of La Flor de la Isabela, a tobacco factory pertaining to
La Campania General de Tabacos de Filipinas, a corporation duly authorized to transact business and the
petitioner Macaria Fajardo, whom he granted vacation leave which began on the 16th d,y of July, 1923, by
reason of her pregnancy, did then and there willfully, unlawfully, and feloniously fail and refuse to pay to
said woman the sum of eighty pesos (P80), Philippine currency, to which she was entitled as her regular
wages corresponding to thirty days before and thirty days after her delivery and confinement which took
place on the 12th day of August, 1923, despite and over the demands made by her, the said Macaria
Fajardo, upon said accused, to do so.

To said complaint, the defendant contended that the provisions of said Act No. 3071, upon which the
complaint was based were illegal, unconstitutional and void.

The lower court, found the defendant guilty of the alleged offense described in the complaint, and sentenced
him to pay a fine of P50, in accordance with the provisions of section 15 of said Act, to suffer subsidiary
imprisonment in case of insolvency, and to pay the costs.

From that sentence the defendant appealed, and now makes the following assignments of error: That the
court erred in overruling the demurrer; in convicting him of the crime charged in the information; and in not
declaring section 13 of Act No. 3071, unconstitutional.

Whether or not the provisions of sections 13 and 15 of Act No. 3071 are a reasonable and lawful exercise of
the police power of the state

Said section 13 was enacted by the Legislature of the Philippine Islands in the exercise of its supposed police
power, with the praiseworthy purpose of safeguarding the health of pregnant women laborers in "factory,
shop or place of labor of any description," and of insuring to them, to a certain extent, reasonable support
for one month before and one month after their delivery.

The statute now under consideration is attacked upon the ground that it authorizes an unconstitutional
interference with the freedom of contract including within the guarantees of the due process clause of the
5th Amendment. That the right to contract about one's affairs is a part of the liberty of the individual
protected by this clause is settled by the decision of this court, and is no longer open to question. The law
takes account of the necessities of only one party to the contract. It ignores the necessities of the employer
by compelling him to pay not less than a certain sum, not only whether the employee is capable of earning
it, but irrespective of the ability of his business to sustain the burden, generously leaving him, of course, the
privilege of abandoning his business as an alternative for going on at a loss. Liberty includes not only the
right to labor, but to refuse to labor, and, consequently, the right to contract to labor or for labor, and to
terminate such contracts, and to refuse to make such contracts.. Hence, we are of the opinion that this Act
contravenes those provisions of the state and Federal constitutions, which guarantee that no person shall be
deprived of life, liberty or property without due process of law.

Clearly, therefore, the law has deprived, every person, firm, or corporation owning or managing a factory,
shop or place of labor of any description within the Philippine Islands, of his right to enter into contracts of
employment upon such terms as he and the employee may agree upon. The law creates a term in every such
contract, without the consent of the parties. Such persons are, therefore, deprived of their liberty to
contract. The constitution of the Philippine Islands guarantees to every citizen his liberty and one of his
liberties is the liberty to contract. It has been decided in a long line of decisions of the Supreme Court of the
United States, that the right to contract about one's affairs is a part of the liberty of the individual, protected
by the "due process of law" clause of the constitution. The rule in this jurisdiction is, that the contracting
parties may establish any agreements, terms, and conditions they may deem advisable, provided they are
not contrary to law, morals or public policy. (Art. 1255, Civil Code.)

For all of the foregoing reasons, we are fully persuaded, under the facts and the law, that the provisions of
section 13, of Act No. 3071 of the Philippine Legislature, are unconstitutional and void, in that they violate
and are contrary to the provisions of the first paragraph of section 3 of the Act of Congress of the United
States of August 29, 1916.

West Coast Hotel Co. vs Parrish

Brief Fact Summary. Washington instituted a state wage minimum for women and minors. The Appellant,
West Coast Hotel (Appellant), paid the Appellee, Parrish (Appellee), less than this minimum.

Synopsis of Rule of Law. Wage and hour laws generally do not violate the Due Process Clause of the United
States Constitution (Constitution).
Facts. The Appellee was a maid who worked for less than the state minimum of $14.50 per 48-hour week.
She brought suit to recover the difference in pay from the Appellant.

Issue. Is the fixing of minimum wages for women and minors constitutional?
Held. Yes. This case overrules Adkins v. Childrens Hospital.
The exploitation of a class of workers who are at a disadvantaged bargaining position is in the best interest
of the health of the worker and economic health of the community.
Discussion. The Supreme Court of the United States (Supreme Court) reverts to reasoning that women are
in an inferior position and need to be protected from those who might try to take advantage of the situation.
Furthermore, the state is justified in adopting such legislation to protect the rest of the community from the
burden of supporting economically disadvantaged workers. It is important to note that the Depression
colored the Supreme Courts analysis.

PASEI vs. Drilon

Facts: The petitioner, Philippine Association of Service Exporters, Inc. (PASEI, for short), a firm "engaged
principally in the recruitmentof Filipino workers, male and female, for overseas placement," challenges
the Constitutional validity of Department Order No. 1, Series of 1988, of the Department of Labor and
prohibition. The measure is assailed for "discrimination against males or females," that it 'does not apply to
all Filipino workers but only to domestic helpers and females with similar skills," and that it is violative of
the right to travel. It was likewise held to be an invalid exercise of the lawmaking power, police power being
legislative, and not executive, in character.

In its supplement to the petition, PASEI invokes Section 3, of Article XIII, of the Constitution, providing for
worker participation "in policy and decision-making processes affecting their rights and benefits as may be
provided by law." In addition, it was contended thatDepartment Order No. 1 was passed in the absence of
priorconsultations. It was claimed to be in violation of the Charter's non-impairment clause, in addition to
the "great and irreparable injury" that PASEI members face should the Order be further enforced.

The Solicitor General, on behalf of the respondent Secretary of Labor and Administrator of the Philippine
Overseas Employment Administration, invokes the police power of the Philippine State.

Issue: Whether or not deployment ban for female domestic helpers is valid under our Constitution.
Held: Yes. It is a valid exercise of police power. The concept of police power is well-established in this
jurisdiction. It has been defined as the "state authority to enact legislation that may interfere with personal
liberty or property in order to promote the general welfare." As defined, it consists of (1) an imposition of
restraint upon liberty or property, (2) in order to foster the common good. It is not capable of an exact
definition but has been, purposely, veiled in general terms to underscore its all-comprehensive embrace.

"Its scope, ever-expanding to meet the exigencies of the times, even to anticipate the future where it could be
done, provides enough room for an efficient and flexible response to conditions and circumstances thus
assuring the greatest benefits."

It constitutes an implied limitation on the Bill of Rights. According to Fernando, it is "rooted in the
conception that men in organizing the state and imposing upon its government limitations to
safeguardconstitutional rights did not intend thereby to enable an individual citizen or a group of citizens to
obstruct unreasonably the enactment of such salutary measures calculated to ensure communal peace,
safety, good order, and welfare." Significantly, the Bill of Rights itself does not purport to be an absolute
guaranty of individual rights and liberties "Even liberty itself, the greatest of all rights, is not unrestricted
license to act according to one's will." It is subject to the far more overriding demands and requirements of
the greater number.

Art 2. Section 5. The maintenance of peace and order, the protection of life, liberty, and property, and
promotion of the general welfare are essential for the enjoyment by all the people of the blessings of

Section 18. The State affirms labor as a primary social economic force. It shall protect the rights of workers
and promote their welfare.

Aris Phil vs NLRC

On 11 April 1988, private respondents, who were employees of petitioner, aggrieved by managements failure
to attend to their complaints concerning their working surroundings which had become detrimental and
hazardous, requested for a grievance conference. Private respondents lost no time in filing a complaint for
illegal dismissal against petitioner with NLRC of NCR. After due trial, Aris (Phils.), Inc. is hereby ordered to
reinstate within ten (10) days from receipt private respondents to their former respective positions or any
substantial equivalent positions if already filled up, without loss of seniority right and privileges but with
limited backwages of six (6) months. Private respondents filed a Motion For Issuance of a Writ of Execution
pursuant to Section 12 of R.A. No. 6715. Petitioner and complainants filed their own Appeals.
Petitioner filed an Opposition to the motion for execution alleging that Section 12 of R.A. No. 6715
on execution pending appeal cannot be applied retroactively to cases pending at the time of its effectivity
because it does not expressly provide that it shall be given retroactive effect and to give retroactive effect to
Section 12 thereof to pending cases would not only result in the imposition of an additional obligation on
petitioner but would also dilute its right to appeal since it would be burdened with the consequences of
reinstatement without the benefit of a final judgment.
Whether or not the provision under Section 12 of R.A. No. 6715 is constitutional.
YES. Petition was dismissed for lack of merit. Costs against petitioners.
Presumption against unconstitutionality. The validity of the questioned law is not only supported and
sustained by the foregoing considerations. As contended by the Solicitor General, it is a valid exercise of the
police power of the State. Certainly, if the right of an employer to freely discharge his employees is subject to
regulation by the State, basically in the exercise of its permanent police power on the theory that the
preservation of the lives of the citizens is a basic duty of the State, that is more vital than the preservation of
corporate profits. Then, by and pursuant to the same power, the State may authorize an immediate
implementation, pending appeal, of a decision reinstating a dismissed or separated employee since that
saving act is designed to stop, although temporarily since the appeal may be decided in favor of the
appellant, a continuing threat or danger to the survival or even the life of the dismissed or separated
employee and its family.
Moreover, the questioned interim rules of the NLRC can validly be given retroactive effect. They are
procedural or remedial in character, promulgated pursuant to the authority vested upon it under Article
218(a) of the Labor Code of the Philippines, as amended. Settled is the rule that procedural laws may be
given retroactive effect. There are no vested rights in rules of procedure. A remedial statute may be made
applicable to cases pending at the time of its enactment.

Alalayan vs NPC
In 1961, Republic Act No. 3043 (An Act to Further Amend Commonwealth Act Numbered One Hundred
Twenty, as Amended by Republic Act Numbered Twenty Six Hundred and Forty One) was passed. This law
amended the charter of NAPOCOR (National Power Corporation). Section 3 of RA 3043 provides that:
a. contractors being supplied by NAPOCOR shall not exceed an annual profit of 12%;
b. if they do, they shall refund such excess to their customers;
c. that NAPOCOR has the power to renew all existing contracts with franchise holders for the supply of
Santiago Alalayan and the Philippine Power and Development Company (PPDC) assailed the said
provision.They averred that Section 3 is a rider because first, it was not included in the title of the amending
law nor was it included in the amended law. Second, the main purpose of RA 3043 was to increase the
capital stock of NAPOCOR hence Alalayan et al believed that Section 3 was not germane to RA 3043.
Whether or not Section 3 of RA 3043 is constitutional.
Yes. The Supreme Court simply ruled that the Constitution does not require Congress to employ in the title
of an enactment, language of such precision as to mirror, fully index or catalogue all the contents and the
minute details therein. It suffices if the title should serve the purpose of the constitutional demand that it
inform the legislators, the persons interested in the subject of the bill, and the public, of the nature, scope
and consequences of the proposed law and its operation. And this, to lead them to inquire into the body of
the bill, study and discuss the same, take appropriate action thereon, and, thus, prevent surprise or fraud
upon the legislators.

Art 2. Section 10. The State shall promote social justice in all phases of national development.
SOCIAL JUSTICE- is justice that follows the principle that all individuals and groups are entitle to fair and
impartial treatment
Art 12. Section 1. The goals of the national economy are a more equitable distribution of opportunities,
income, and wealth; a sustained increase in the amount of goods and services produced by the nation for
the benefit of the people; and an expanding productivity as the key to raising the quality of life for all,
especially the underprivileged.
The State shall promote industrialization and full employment based on sound agricultural development and
agrarian reform, through industries that make full and efficient use of human and natural resources, and
which are competitive in both domestic and foreign markets. However, the State shall protect Filipino
enterprises against unfair foreign competition and trade practices.
In the pursuit of these goals, all sectors of the economy and all regions of the country shall be given
optimum opportunity to develop. Private enterprises, including corporations, cooperatives, and similar
collective organizations, shall be encouraged to broaden the base of their ownership.
Section 2. All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all
forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural resources
are owned by the State. With the exception of agricultural lands, all other natural resources shall not be
alienated. The exploration, development, and utilization of natural resources shall be under the full control
and supervision of the State. The State may directly undertake such activities, or it may enter into co-
production, joint venture, or production-sharing agreements with Filipino citizens, or corporations or
associations at least sixty per centum of whose capital is owned by such citizens. Such agreements may be
for a period not exceeding twenty-five years, renewable for not more than twenty-five years, and under such
terms and conditions as may be provided by law. In cases of water rights for irrigation, water supply
fisheries, or industrial uses other than the development of water power, beneficial use may be the measure
and limit of the grant.
The State shall protect the nations marine wealth in its archipelagic waters, territorial sea, and exclusive
economic zone, and reserve its use and enjoyment exclusively to Filipino citizens.
The Congress may, by law, allow small-scale utilization of natural resources by Filipino citizens, as well as
cooperative fish farming, with priority to subsistence fishermen and fishworkers in rivers, lakes, bays, and
The President may enter into agreements with foreign-owned corporations involving either technical or
financial assistance for large-scale exploration, development, and utilization of minerals, petroleum, and
other mineral oils according to the general terms and conditions provided by law, based on real
contributions to the economic growth and general welfare of the country. In such agreements, the State
shall promote the development and use of local scientific and technical resources.
The President shall notify the Congress of every contract entered into in accordance with this provision,
within thirty days from its execution.

Calalang vs Williams

The National Traffic Commission, in its resolution of July 17, 1940, resolved to recommend to the Director of
the Public Works and to the Secretary of Public Works and Communications that animal-
drawn vehicles be prohibited from passing along the following for a period of one year from the date of the
opening of the Colgante Bridge to traffic:
1) Rosario Street extending from Plaza Calderon de la Barca to Dasmarias
Street from 7:30Am to 12:30 pm and from 1:30 pm to 530 pm; and
2) along Rizal Avenue extending from the railroad crossing at Antipolo Street to
Echague Street from 7 am to 11pm
The Chairman of the National Traffic Commission on July 18, 1940 recommended to the Director of Public
Works with the approval of the Secretary of Public Works the adoption of
thethemeasure proposed in the resolution aforementioned in pursuance of the provisions of theCommonweal
th Act No. 548 which authorizes said Director with the approval from the
Secretary of the Public Works and Communication to promulgate rules and regulations to regulate and
control the use of and traffic on national roads.
On August 2, 1940, the Director recommended to the Secretary the approval of the recommendations made
by the Chairman of the National Traffic Commission with modifications. The Secretary of Public Works
approved the recommendations on August 10,1940. The Mayor of Manila and the Acting Chief of Police of
Manila have enforced and caused to be enforced the rules and regulation. As a consequence, all animal-
drawn vehicles are not allowed to pass and pick up passengers in the places above mentioned to the
detriment not only of their owners but of the riding public as well.
1) Whether the rules and regulations promulgated by the respondents pursuant to the provisions of
Commonwealth Act NO. 548 constitute an unlawful inference with legitimate business or trade and abridged
the right to personal liberty and freedom of locomotion?
2) Whether the rules and regulations complained of infringe upon the constitutional precept regarding
the promotion of social justice to insure the well-being and economic security of all the people?
1) No. The promulgation of the Act aims to promote safe transit upon and avoid obstructions on national
roads in the interest and convenience of the public. In enacting said law, the National Assembly was
prompted by considerations of public convenience and welfare. It was inspired by the desire to relieve
congestion of traffic, which is a menace to the public safety. Public welfare lies at the bottom of the
promulgation of the said law and the state in order to promote the general welfare may interfere with
personal liberty, with property, and with business and occupations. Persons and property may be subject to
all kinds of restraints and burdens in order to secure the general comfort, health, and prosperity of the
State. To this fundamental aims of the government, the rights of the individual are subordinated. Liberty is a
blessing which should not be made to prevail over authority because society will fall into anarchy. Neither
should authority be made to prevail over liberty because then the individual will fall into slavery. The
paradox lies in the fact that the apparent curtailment of liberty is precisely the very means of insuring its
2) No. Social justice is neither communism, nor despotism, nor atomism, nor anarchy, but the
humanization of laws and the equalization of social and economic forces by the State so that justice in its
rational and objectively secular conception may at least be approximated. Social justice means the
promotion of the welfare of all the people, the adoption by the Government of measures calculated to insure
economic stability of all the competent elements of society, through the maintenance of a proper economic
and social equilibrium in the interrelations of the members of the community, constitutionally, through the
adoption of measures legally justifiable, or extra-constitutionally, through the exercise of powers underlying
the existence of all governments on the time-honored principles of salus populi estsuprema lex.
Social justice must be founded on the recognition of the necessity of interdependence among divers and
diverse units of a society and of the protection that should be equally and evenly extended to all groups as a
combined force in our social and economic life, consistent with the fundamental and paramount objective of
the state of promoting health, comfort and quiet of all persons, and of bringing about the greatest good to
the greatest number.

Facts: The New Central Bank Act abolished the old Central Bank and created the new BSP on 1993 through
RA No 7653. Central Bank Employees Association assailed the provision of RA No 7653, Art II Sec 15(c).
They contend that it makes an unconstitutional cut between two classes of employees in the BSP, viz: (1) the
BSP officers as exempt class of Salary Standardization Law (RA 6758) and (2) the rank-and-file non-exempt
class. BSP contends that the exemption of officers (SG 20 and above) from the SSL was intended to address
the BSPs lack of competitiveness in terms of attracting competent officers and executives. It was not
intended to discriminate against the rank-and-file.
Issue: Whether or not Section 15(c) violates equal protection right of the BSP r&f employees?
Decision: Sec 15(c) unconstitutional. Judicial notice that other Govt Financial Institution undertook
amendment of their charters from 1995 to 2004 a blanket provision for all employees to be covered by SSL.
The said subsequent enactments constitute significant changes in circumstance that considerably alter the
reasonability of the continued operation of the last proviso of Section 15(c). Legal history shows that GFIs
have long been recognized as comprising one distinct class, separate from other governmental entities. There
is no substantial distinctions so as to differentiate, the BSP rank-and-file from the other rank-and-file of the
seven GFIs. The equal protection clause does not demand absolute equality but it requires that all persons
shall be treated alike, under like circumstances and conditions both as to privileges conferred and liabilities
enforced. Those that fall within a class should be treated in the same fashion; whatever restrictions cast on
some in the group is equally binding on the rest. It is clear that the enactment of the seven subsequent
charters has rendered the continued application of the challenged proviso anathema to the equal protection
of the law, and the same should be declared as an outlaw.

Art. 2 Section 18. The State affirms labor as a primary social economic force. It shall protect the rights of
workers and promote their welfare.

Art. 4. Laws shall have no retroactive effect, unless the contrary is provided.
Art. 1702. In case of doubt, all labor legislation and all labor contracts shall be construed in favor of the
safety and decent living for the laborer.

Agabon vs NLRC
Private respondent Riviera Home Improvements, Inc. is engaged in the business of selling and installing
ornamental and construction materials. It employed petitioners Virgilio Agabon and Jenny Agabon as
gypsum board and cornice installers on January 2, 1992 until February 23, 1999 when they were dismissed
for abandonment of work. Thus, Petitioners then filed a complaint for illegal dismissal and payment of
money claims
Petitioners also claim that private respondent did not comply with the twin requirements of notice and
hearing. Private respondent, on the other hand, maintained that petitioners were not dismissed but had
abandoned their work.
Issue: WON petitioners were illegally dismissed.
Accordingly, petitioners dismissal was for a just cause. They had abandoned their employment and were
already working for another employer.
To dismiss an employee, the law requires not only the existence of a just and valid cause but also enjoins
the employer to give the employee the opportunity to be heard and to defend himself.
Abandonment is the deliberate and unjustified refusal of an employee to resume his employment. It is a
form of neglect of duty, hence, a just cause for termination of employment by the employer.
After establishing that the terminations were for a just and valid cause, we now determine if the procedures
for dismissal were observed.
The procedure for terminating an employee is found in Book VI, Rule I, Section 2(d) of the Omnibus Rules
Implementing the Labor Code:
Standards of due process: requirements of notice. In all cases of termination of employment, the following
standards of due process shall be substantially observed:
For termination of employment based on just causes as defined in Article 282 of the Code:
1. A written notice served on the employee specifying the ground or grounds for termination, and giving to said
employee reasonable opportunity within which to explain his side;
1. A hearing or conference during which the employee concerned, with the assistance of counsel if the
employee so desires, is given opportunity to respond to the charge, present his evidence or rebut the
evidence presented against him; and
(c) A written notice of termination served on the employee indicating that upon due consideration of all the
circumstances, grounds have been established to justify his termination.
In case of termination, the foregoing notices shall be served on the employees last known address.
Procedurally, (1) if the dismissal is based on a just cause under Article 282, the employer must give the
employee two written notices and a hearing or opportunity to be heard if requested by the employee before
terminating the employment: a notice specifying the grounds for which dismissal is sought a hearing or an
opportunity to be heard and after hearing or opportunity to be heard, a notice of the decision to dismiss; and
(2) if the dismissal is based on authorized causes under Articles 283 and 284, the employer must give the
employee and the Department of Labor and Employment written notices 30 days prior to the effectivity of his
From the foregoing rules four possible situations may be derived: (1) the dismissal is for a just cause under
Article 282 of the Labor Code, for an authorized cause under Article 283, or for health reasons under Article
284, and due process was observed; (2) the dismissal is without just or authorized cause but due process
was observed; (3) the dismissal is without just or authorized cause and there was no due process; and (4)
the dismissal is for just or authorized cause but due process was not observed.
The present case squarely falls under the fourth situation. The dismissal should be upheld because it was
established that the petitioners abandoned their jobs to work for another company. Private respondent,
however, did not follow the notice requirements and instead argued that sending notices to the last known
addresses would have been useless because they did not reside there anymore. Unfortunately for the private
respondent, this is not a valid excuse because the law mandates the twin notice requirements to the
employees last known address. Thus, it should be held liable for non-compliance with the procedural
requirements of due process.
Petition denied. CA affirmed with modifications.

Art 13 Section 3. The State shall afford full protection to labor, local and overseas, organized and
unorganized, and promote full employment and equality of employment opportunities for all.
It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations, and
peaceful concerted activities, including the right to strike in accordance with law. They shall be entitled to
security of tenure, humane conditions of work, and a living wage. They shall also participate in policy and
decision-making processes affecting their rights and benefits as may be provided by law.
The State shall promote the principle of shared responsibility between workers and employers and the
preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce their
mutual compliance therewith to foster industrial peace.
The State shall regulate the relations between workers and employers, recognizing the right of labor to its
just share in the fruits of production and the right of enterprises to reasonable returns to investments, and
to expansion and growth.

Art 2 Section 9. The State shall promote a just and dynamic social order that will ensure the prosperity
and independence of the nation and free the people from poverty through policies that provide adequate
social services, promote full employment, a rising standard of living, and an improved quality of life for all.
Section 10. The State shall promote social justice in all phases of national development.
Section 11. The State values the dignity of every human person and guarantees full respect for human
Section 13. The State recognizes the vital role of the youth in nation-building and shall promote and protect
their physical, moral, spiritual, intellectual, and social well-being. It shall inculcate in the youth patriotism
and nationalism, and encourage their involvement in public and civic affairs.
Section 14. The State recognizes the role of women in nation-building, and shall ensure the fundamental
equality before the law of women and men.
Section 18. The State affirms labor as a primary social economic force. It shall protect the rights of workers
and promote their welfare.
Section 20. The State recognizes the indispensable role of the private sector, encourages private enterprise,
and provides incentives to needed investments.

Globe Mackay vs NLRC

Parties Involved/Characters:

Imelda Salazar
General System Analyst of GMCR
Delfin Saldivar
Manager for Technical Operations support ofGMCR
Agustin Maramara
Companys Internal Auditor
Richard Yambao
Owner and Manager of Elecon Engineeringwhich is a supplier of GMCR
It is alleged that Salazar and Saldivar are very close. It is also mentioned that they share an
apartment.1984, reports shows that the company equipment and sare parts worth thousands of dollars
under the custody of Saldivar were missing. A report prepared by Maramara indicated that:-
Saldivar entered into a partnership with Yambao- Saldivar recommended Elecon
- The missing aircon was used by Saldivar for personal use(recovered by replevin)
- Salazar (respondent) got involved because she is a signed witness of the Articles of Partnership of the two
She knows where the missing aircon is, failed to report it.

(1984) Because of those, Salazar was suspended and was given time to explain herself (for 30 days/one
month). After 3 days she already filed acomplaint against GMCR for illegal dismissal (illegal suspension at
first then it escalated to that).
(1985) Heared by Labor Arbiter in favor of Imelda Salazar, awardedher reinstatement, backwages and
other benefits plus moral damages.
(1987) NLRC affirmed Labor Arbiter decision but backwages of 2years only; no moral damagesThus this
petition by GMCR before SC
Is she illegally dismissed based on the Labor Code and Constitutionalguarantee?
She was illegally dismissed. The Court pointed out Art 279 of the Labor Code which talks about the
Security of tenure for regular employees which states that:
An employee who is unjustly dismissed from workshall be entitled to reinstatement without loss of seniority
rights andother privileges and to his full backwages, inclusive of allowances,and to his other benefits or their
monetary equivalent
Corollary to it is the Implementing Rules and Regulations of theLabor Code (IRR) stating that employer
cannot terminate regular employees without just cause or authorized by laws and if such employee get
illegally dismissed, he or she will be entitled to be back in his/her position or be reinstated without loss of
seniority rights plus backwages
The priority is clearly leaned towards the employee or to labor. The Court pointed out the opening paragraph
on Labor and the 1973Constitution on Article 2 which enshrines full protection to labor. In the1986
ConCom, they have designed Social Justice and Human rights To reduce social, economic and political
Court held that the Labor Code is clear and unambiguous. Under statcon, if the law is clear, plain and
free from ambiguity, it must be applied literally [Verba Legis]
(Additional, away from statcon, she is not in a fiduciary position so she can be reinstated because strained
relations arent relevant in her position)

DOCTRINE: Verba Legis

Plain-meaning rule or verba legis derived from the maxim index animisermo est (speech is the index of
intention) rests on the valid presumption that the words employed by the legislature in a statute correctly
express its intent or will and preclude the court from construing it differently. The legislature is presumed to
know the meaning of the words, to have used words advisedly, and to have expressed its intent by the use of
such words as are found in the statute. Verba legis non est recedendum, or from the words of a statute
there should be no departure. Neither does the provision admit of any qualification. If in the wisdom of the
Court, there may be a ground or grounds for non- application of the above-cited provision, this should be by
way of exception, such as when the reinstatement may be inadmissible due to ensuing strained relations
between the employer and the employee. (Copy pasted from the GMCR v. NLRC case)
Security of Tenure.
In cases of regular employment, the employer shall not terminate the services of an employee except for a
just cause or when authorized by this Title. An employee who is unjustly dismissed from work shall be
entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages,
inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his
compensation was withheld from him up to the time of his actual reinstatement
IRR on Labor Code
"Sec. 2. Security of Tenure. In cases of regular employment, the employer shall not terminate the services
of an employee except for a just cause as provided in the Labor Code or when authorized by existing laws.
Sec. 3. Reinstatement. An employee who is unjustly dismissed from work shall be entitled to
reinstatement without loss of seniority rights and to backwages."'

Maquiling vs PTS
Maquiling vs. Philippine Tuberculosis Society, Inc
G.R. No. 143384. February 4, 2005.
450 SCRA 465
Petitioner Dr. Maquiling was employed by respondent Philippine Tuberculosis Society, Inc. (PTS). Dr.
Maquiling, then earning a monthly salary of thirteen thousand nine hundred pesos (P13,900.00) was
dismissed from service as Deputy Executive Director after serving PTS for twenty-three (23) years on the
ground of lost of trust and confidence constituted, among others, by: delayed GSIS remittances, reported
deficit of P7.3 million appearing in the PTSs financial statement. Dr. Maquiling filed a complaint against
PTS for reinstatement or, in the alternative, for payment of full backwages and separation pay in accordance
with Article 279 of the Labor Code, as well as moral damages in the amount of five hundred thousand pesos
(P500,000.00) and exemplary damages in the amount of one hundred thousand pesos (P100,000.00).
The complaint was assigned to a labor arbiter. After PTS failed to appear despite having requested for
several postponements, Dr. Maquiling was allowed to present his evidence ex parte consisting of his
testimony on direct examination and documentary proof. Dr. Maquiling moved for submission of the case for
resolution, which motion was granted.
After considering the evidence adduced by the parties, the labor arbiter rendered a decision ordering
PTS to immediately reinstate Dr. Maquiling to the position of Deputy Executive Director or its equivalent
rank. Upon appeal by PTS to the NLRC, the Commission upheld the decision of the labor arbiter and
dismissed the appeal.
However, PTS appealed the decision to the Court of Appeals which reversed the decisions of the
NLRC and labor arbiter by ordering the dismissal of the complaint and declaring that his dismissal from
employment as legal and valid. It, however, ordered PTS to pay Dr. Maquiling the amount of ten thousand
pesos (P10,000.00) as damages or indemnity for violation of his right to procedural due process.
Granting that there is lack of statutory due process, will the dismissal for a just cause render the
same ineffectual? Is Dr. Maquiling entitled to damages resulting from a violation of his right to procedural
due process? If yes, what kind of damages is allowed and not allowed?
Yes. Where the dismissal is for a just cause, as in the instant case, the lack of statutory due
process should not nullify the dismissal, or render it illegal, or ineffectual. However, the employer
should indemnify the employee for the violation of his statutory rights. The indemnity to be imposed
should be stiffer to discourage the abhorrent practice of dismiss now, pay later, which we sought to deter
in the Serrano ruling. The sanction should be in the nature of indemnification or penalty and should depend
on the facts of each case, taking into special consideration the gravity of the due process violation of the
The violation of the petitioners right to statutory due process by the private respondent
warrants the payment of indemnity in the form of nominal damages. The amount of such damages is
addressed to the sound discretion of the court, taking into account the relevant circumstances.
It may be also argued that actual or compensatory damages may be recovered in employment
termination cases. Actual or compensatory damages is not available as a matter of right to an
employee dismissed for just cause but denied statutory due process. The award must be based on clear
factual and legal bases and correspond to such pecuniary loss suffered by the employee as duly proven.
Evidently, there is a less degree of discretion to award actual or compensatory damages.

Art 3 Section 1. No person shall be deprived of life, liberty, or property without due process of law, nor
shall any person be denied the equal protection of the laws.
Section 4. No law shall be passed abridging the freedom of speech, of expression, or of the press, or the
right of the people peaceably to assemble and petition the government for redress of grievances.
Section 7. The right of the people to information on matters of public concern shall be recognized. Access to
official records, and to documents and papers pertaining to official acts, transactions, or decisions, as well
as to government research data used as basis for policy development, shall be afforded the citizen, subject to
such limitations as may be provided by law.
Section 8. The right of the people, including those employed in the public and private sectors, to form
unions, associations, or societies for purposes not contrary to law shall not be abridged.
Section 10. No law impairing the obligation of contracts shall be passed.
Section 16. All persons shall have the right to a speedy disposition of their cases before all judicial, quasi-
judicial, or administrative bodies.
Section 18. (2) No involuntary servitude in any form shall exist except as a punishment for a crime whereof
the party shall have been duly convicted.

Philippine Movie Pictures Workers Association vs Premiere Productions, Inc.

In October 1951, Premiere Productions, Inc. (PPI) filed a petition with the Court of Industrial relations (CIR)
seeking authority to lay-off 44 workers on the ground of financial losses. The union therein (Philippine Movie
Pictures Workers Association) opposed the petition as it averred that PPI is merely retaliating against
employees who joined a previous strike.
Judge Arsenio Roldan of the CIR then conducted an ocular inspection. The inspection was attended by
counsels for both parties. The judge inspected some records and interrogated some witnesses. The counsels
for both parties were granted opportunities to cross examine in said ocular inspection. Thereafter, Judge
Roldan granted PPI the authority to lay-off the 44 workers.
ISSUE: Whether or not an ocular inspection may be the basis, without receiving full evidence, of determining
the cause or motive of laying off employees.
HELD: No. An ocular inspection does not satisfy the procedural requirement. The petition for lay-off was
predicated on the lack of work and of the further fact that the company was incurring financial losses
these allegations cannot be proven simply by an ocular inspection. The parties, especially the workers in
this case, should not be deprived of their opportunity to present evidence they may deem necessary to
establish their case in the main trial. Here, the main trial is absent because all that was conducted was an
ocular inspection such is tantamount to a deprivation of their right to be heard. It is recognized that ones
employment, profession, or trade, or calling, is a property right and the wrongful interference therewith is an
actionable wrong. Therefore, the dismissal of the 44 workers without opportunity to be heard is a violation of
their property right.

Sibal vs Notre dame of greater manila

Petitioner Delia R. Sibal was employed as school nurse by private respondent Notre Dame of Greater Manila,
she was compensated on a 12-month basis, although she worked only during the ten-month period of
classes. She was not required to report for work for the entire Christmas and summer vacations. However,
respondent's director, Fr. Gonzales, requested her to shorten her summer vacation, From two weeks after
the last day of classes to two weeks before the first day of classes of the next school year. Petitioner acceded
to the request Fr. Gonzales required petitioner to report during that summer to help in the library. Petitioner
contested the order, stating that: it will necessitate a change in the terms and conditions of her employment
that library work is alien to her profession as nurse Later on, Fr. Gonzales was replaced by Fr. Pablo Garcia,
as new director. required petitioner to report for work during the summer before the beginning of school
year. Petitioner informed him that her contract does not require her to report for work during the summer
vacation. Fr. Garcia promised to verify her allegation. However, he failed to inform petitioner of his findings.
Thus, in order that her failure to report for work may not be misinterpreted, petitioner filed leaves of absence
during the summer break. Petitioner failed to receive her vacation pay. During school year 1981-1982,
petitioner was assigned to teach health subjects This situation came about because the two (2) teachers of
the health subjects had left the school. Petitioner, however, was not given compensation for teaching,
notwithstanding the fact that other teachers were duly compensated for extra work done. During the school
year petitioner tried to arrange for a meeting with Fr. Garcia regarding her vacation pay, but to no avail
because Fr. Garcia was always busy and also suffered a heart attack which necessitated his hospitalization.
In December 1981, petitioner received her 13th month pay which was computed on the basis of a 10-month
period only. Fr. Garcia again required petitioner to work during that summer to update all the clinical
records of the students. petitioner objected by reiterating that her contract does not require her to report for
work during summerRespondent said that it was imperative for her to report for work during the summer
because it is the best time to update the clinical records when no students could disturb her In addition,
she reminded Fr. Garcia that she had not received any compensation for teaching health subjects the past
school year. Respondent said that petitioner was not entitled to extra compensation for teaching because
teaching was allegedly part of her regular working program as a school nurse. On April 14, 1982, petitioner,
apart from reiterating her objection to the order, called the attention of Fr. Garcia to the school's failure to
pay her salary for the summer of 1981 and of the deficiency in her 13th month pay for that year. Fr. Garcia
refused to consider petitioner's demands and threatened to take drastic measures against her if she remains
obstinate in her refusal to follow his order to report for work that summer. Petitioner, for the fourth time,
informed Fr. Garcia that her contract does not require her to report for work during summer, and she does
not intend to do so that summer of 1982. Petitioner filed a complaint for non-payment of the following; (1)
vacation pay for four (4) summer months; (2) compensation for teaching health subjects; and (3) deficiency
in the 13th month pay for 1981. Summons was served on respondent school on the opening day of classes
on June 14, 1982. That very day when petitioner reported for work, respondent school served petitioner her
letter of termination effective immediately and it also submitted a copy of the termination paper to the
Ministry of Labor and Employment (MOLE). The following day, petitioner filed an amended complaint,
adding two more charges: illegal dismissal and unfair labor practice. petitioner alleges the following:
Respondent NLRC failed to give full respect to the constitutional mandate on security of tenure when the
majority decision affirmed the decision of the Labor Arbiter: Separating and dismissing petitioner on the
basis of her perception that petitioner and the director could no longer work harmoniously. The award of
separation pay would defeat and render nugatory the Constitutional guaranty of security of tenure.Petitioner
is entitled to compensation relative to her teaching job which is distinct and separate from her duties as
school nurse. Public respondent NLRC, however, submits the following: The relationship between petitioner
and respondent school had come to the point that reinstatement of petitioner would cause undue burden on
both parties. It would affect petitioner's performance of her duties as school nurse and private respondent's
business. Teaching health subjects is allied to petitioner's job as school nurse, particularly so when the
same is done within the official eight (8) working hour schedule.
Whether or not petitioner is entitled to compensation for teaching health subjects? Yes
Whether or not petitioner is entitled to reimbursements for services rendered during semestral breaks? YES
The respondent NLRC erred is sustaining the Labor Arbiter's ruling that petitioner is not entitled to
compensation for teaching health subjects allegedly because: petitioner taught during her regular working
hours; the subject Health is allied to her profession as nurse; she and respondent school had no clear
understanding regarding extra compensation. Petitioner is entitled to compensation for teaching health
subjects. Petitioner's teaching the subject in the classroom and her administering to the health needs of
students in the clinic involve two different and distinct jobs. Cannot be equated with each other for they
refer to different functions. Teaching requires preparation of lesson plans, examinations and grades, while
clinical work entails preparation of clinical records and treating illnesses of students in school. There can be
no doubt that teaching health subjects is extra work for petitioner, and therefore necessitates extra
compensation. it has been the practice of the school to pay extra compensation to teachers who were given
extra load even during regular working hours The court cited that in University of Pangasinan Faculty Union
v. University of Pangasinan: that semestral breaks may be considered as "hours worked" under the Rules
implementing the Labor Code that regular professors and teachers are entitled to ECOLA (Emergency Cost of
Living Allowance) during the semestral breaks, their "absence" from work not being of their own will.
WHEREFORE, the appealed decision of respondent NLRC is hereby SET ASIDE. Private respondent is
hereby ordered to REINSTATE petitioner to her former position without loss of seniority rights and with
backwages for three (3) years from the time of her illegal dismissal; to pay her the regular extra
compensation relative to her teaching health subjects; and to pay her moral damages, the amount of which
shall be determined by respondent NLRC. Let this case be remanded to the NLRC for the proper
implementation of this decision. SO ORDERED.

Century Textile Mills vs. NLRC

Facts: According to Rodolfo Marin (a factory co-worker of private respondent Calangi), at around 12:15 AM
on June 4, 1983 and within company premises, he chanced upon Gatchie Torrena (a machine operator at
petitioner's factory) and noticed the latter mixing some substance with the drinking water contained in a
pitcher from which Meliton and Santos regularly drank. Before anyone could take a drink from the pitcher,
Marin reported what he had observed to Meliton who, in turn, informed Santos of the same. Soon after,
Meliton and Santos took possession of the pitcher of water and filed a formal report of the incident with
company management. The contents of the pitcher were subsequently analyzed by chemists at the
Philippine Constabulary Crime Laboratory at Camp Crame, Quezon City who found the presence of a
toxic chemical(formaldehyde) therein.

On October 11, 1983, private respondent Calangi filed a Complaint for illegal dismissal with the Arbitration
Branch, National Capital Region, of the then Ministry of Labor and Employment. Among other things,
private respondent alleged in his complaint that prior to his preventive suspension, neither the company nor
any of its officers furnished him with a copy of their charges, nor afforded him the opportunity to answer the
same and defend himself.

In a Decision dated August 16, 1984, the Labor Arbiter dismissed the private respondents complaint. The
Labor Arbiter found that not only was the evidence against private respondent Calangi overwhelming and
sufficient enough to justify his dismissal, but that the private respondent failed inexplicably to deny or
controvert thecharges against him.

Issue: Whether or not reinstatement is always available.

Held: No. In view of the finding of the illegal dismissal in this case, petitioner Corporation is liable to private
respondent Calangi forpayment of the latter's back wages for three years, without qualification and
deduction. Considering the circumstances, however, the Court believes that reinstatement of private
respondent to his former position--or to any other equivalent position in the company will not serve the both
interests of the parties involved. Petitioner Corporation should not be compelled to take back into fold
an employee who, at least in the minds of his employers, poses a significant threat to the lives and safety of
company workers. Consequently, we hold that private respondent should be given his separation pay in lieu
of such reinstatement. The amount of separation pay shall be equivalent to the private respondent's one-half
month's salary for every year of service, to be computed from December 13, 1974 (date of first employment)
until June 10, 1986 (three years after date of illegal dismissal).

Phimco industries, Inc. v. Phimco Industries Labor Association

Leyte Land Transportation Co. v. Leyte Farmers and Workers Union, 80 Phil. (48)
Sometime in the mid-1940s, seventy-six drivers and laborers who were members of the Leyte Farmers and
Laborers Union (LFLU), staged a strike against the Leyte Land Transportation Company, Inc. (LLTC). The
labor dispute went to court and the Court of Industrial Relations (CIR) ordered LLTC to pay all its employees
an increased minimum wage and grant the employees 15 sick leave days and 15 vacation leave days.
LLTC appealed and questioned, among others, the order which mandates it to grant the benefits not only to
the striking employees but to all its employees including those that did not join the strike.
ISSUE: Whether or not the increased rate and other benefits shall only apply to the employees who joined
the strike.
HELD: No, it applies to all employees, regardless if they joined the strike or not. The employees who did not
strike shall also benefit from the result of the strike. This is even if the employees who did not join the strike
are also not member of LFLU. Since they are laborers of LLTC, they too are covered by the wage increase. To
accord such increase only to members of the union would constitute an unjust and unwarranted
discrimination against non-members.
In this case, the Supreme Court also defined minimum wage as follows:
It is the just compensation, for the employees labor and an adequate income to meet essential necessities of
civilized life, and at the same time allow the capital a fair return on its investment.
Note: At that time, the then CIR had the power to fix the minimum wage.

Victoriano v. Elizale Rope Workers Union

Benjamin Victoriano, an Iglesia ni Cristo (INC) member, has been an employee of the Elizalde Rope Factory
(ERF) since 1958. He was also a member of the EPWU (Elizalde Rope Workers Union). Under the collective
bargaining agreement (CBA) between ERF and EPWU, a close shop agreement is being enforced which
means that employment in the factory relies on the membership in the EPWU; that in order to retain
employment in the said factory one must be a member of the said Union. In 1962, Victoriano tendered his
resignation from EPWU claiming that as per RA 3350 he is an exemption to the close shop agreement by
virtue of his being a member of the INC because apparently in the INC, one is forbidden from being a
member of any labor union. It was only in 1974 that his resignation from the Union was acted upon by
EPWU which notified ERF about it. ERF then moved to terminate Victoriano due to his non-membership
from the EPWU. EPWU and ERF reiterated that he is not exempt from the close shop agreement because RA
3350, which provides that close shop agreements shall not cover members of any religious sects which
prohibit affiliation of their members in any such labor organization, is unconstitutional and that said law
violates the EPWUs and ERFs legal/contractual rights.
ISSUE: Whether or not RA 3350 is unconstitutional.
HELD: No. The right to religion prevails over contractual or legal rights. As such, an INC member may refuse
to join a labor union and despite the fact that there is a close shop agreement in the factory where he was
employed, his employment could not be validly terminated for his non-membership in the majority therein.
Further, the right to join a union includes the right not to join a union. The law is not unconstitutional. It
recognizes both the rights of unions and employers to enforce terms of contracts and at the same time it
recognizes the workers right to join or not to join union. RA 3550 recognizes as well the primacy of a
constitutional right over a contractual right.

Hacienda Luisita, Inc. v. PARC


On July 5, 2011, the Supreme Court en banc voted unanimously (11-0) to DISMISS/DENY the petition filed
by HLI and AFFIRM with MODIFICATIONS the resolutions of the PARC revoking HLIs Stock Distribution
Plan (SDP) and placing the subject lands in Hacienda Luisita under compulsory coverage of the
Comprehensive Agrarian Reform Program (CARP) of the government.

The Court however did not order outright land distribution. Voting 6-5, the Court noted that there are
operative facts that occurred in the interim and which the Court cannot validly ignore. Thus, the Court
declared that the revocation of the SDP must, by application of the operative fact principle, give way to the
right of the original 6,296 qualified farmworkers-beneficiaries (FWBs) to choose whether they want to remain
as HLI stockholders or [choose actual land distribution]. It thus ordered the Department of Agrarian Reform
(DAR) to immediately schedule meetings with the said 6,296 FWBs and explain to them the effects,
consequences and legal or practical implications of their choice, after which the FWBs will be asked to
manifest, in secret voting, their choices in the ballot, signing their signatures or placing their thumbmarks, as
the case may be, over their printed names.

The parties thereafter filed their respective motions for reconsideration of the Court decision.


(1) Is the operative fact doctrine available in this case?

(2) Is Sec. 31 of RA 6657 unconstitutional?
(3) Cant the Court order that DARs compulsory acquisition of Hacienda Lusita cover the full 6,443
hectares allegedly covered by RA 6657 and previously held by Tarlac Development Corporation (Tadeco), and
not just the 4,915.75 hectares covered by HLIs SDP?
(4) Is the date of the taking (for purposes of determining the just compensation payable to HLI) November
21, 1989, when PARC approved HLIs SDP?
(5) Has the 10-year period prohibition on the transfer of awarded lands under RA 6657 lapsed on May 10,
1999 (since Hacienda Luisita were placed under CARP coverage through the SDOA scheme on May 11,
1989), and thus the qualified FWBs should now be allowed to sell their land interests in Hacienda Luisita to
third parties, whether they have fully paid for the lands or not?
(6) THE CRUCIAL ISSUE: Should the ruling in the July 5, 2011 Decision that the qualified FWBs be given
an option to remain as stockholders of HLI be reconsidered?

[The Court PARTIALLY GRANTED the motions for reconsideration of respondents PARC, et al. with
respect to the option granted to the original farmworkers-beneficiaries (FWBs) of Hacienda Luisita to remain
with petitioner HLI, which option the Court thereby RECALLED and SET ASIDE. It reconsidered its earlier
decision that the qualified FWBs should be given an option to remain as stockholders of HLI,
and UNANIMOUSLY directed immediate land distribution to the qualified FWBs.]

1. YES, the operative fact doctrine is applicable in this case.

[The Court maintained its stance that the operative fact doctrine is applicable in this case since, contrary to the
suggestion of the minority, the doctrine is not limited only to invalid or unconstitutional laws but also applies to
decisions made by the President or the administrative agencies that have the force and effect of laws. Prior to
the nullification or recall of said decisions, they may have produced acts and consequences that must be
respected. It is on this score that the operative fact doctrine should be applied to acts and consequences that
resulted from the implementation of the PARC Resolution approving the SDP of HLI. The majority stressed that
the application of the operative fact doctrine by the Court in its July 5, 2011 decision was in fact favorable to
the FWBs because not only were they allowed to retain the benefits and homelots they received under the
stock distribution scheme, they were also given the option to choose for themselves whether they want to
remain as stockholders of HLI or not.]

2. NO, Sec. 31 of RA 6657 NOT unconstitutional.

[The Court maintained that the Court is NOT compelled to rule on the constitutionality of Sec. 31 of RA 6657,
reiterating that it was not raised at the earliest opportunity and that the resolution thereof is not the lis
mota of the case. Moreover, the issue has been rendered moot and academic since SDO is no longer one of
the modes of acquisition under RA 9700. The majority clarified that in its July 5, 2011 decision, it made no
ruling in favor of the constitutionality of Sec. 31 of RA 6657, but found nonetheless that there was no apparent
grave violation of the Constitution that may justify the resolution of the issue of constitutionality.]

3. NO, the Court CANNOT order that DARs compulsory acquisition of Hacienda Lusita cover the
full 6,443 hectares and not just the 4,915.75 hectares covered by HLIs SDP.

[Since what is put in issue before the Court is the propriety of the revocation of the SDP, which only involves
4,915.75 has. of agricultural land and not 6,443 has., then the Court is constrained to rule only as regards the
4,915.75 has. of agricultural land.Nonetheless, this should not prevent the DAR, under its mandate under the
agrarian reform law, from subsequently subjecting to agrarian reform other agricultural lands originally held
by Tadeco that were allegedly not transferred to HLI but were supposedly covered by RA 6657.

However since the area to be awarded to each FWB in the July 5, 2011 Decision appears too restrictive
considering that there are roads, irrigation canals, and other portions of the land that are considered
commonly-owned by farmworkers, and these may necessarily result in the decrease of the area size that may
be awarded per FWB the Court reconsiders its Decision and resolves to give the DAR leeway in adjusting the
area that may be awarded per FWB in case the number of actual qualified FWBs decreases. In order to ensure
the proper distribution of the agricultural lands of Hacienda Luisita per qualified FWB, and considering that
matters involving strictly the administrative implementation and enforcement of agrarian reform laws are
within the jurisdiction of the DAR, it is the latter which shall determine the area with which each qualified FWB
will be awarded.

On the other hand, the majority likewise reiterated its holding that the 500-hectare portion of Hacienda Luisita
that have been validly converted to industrial use and have been acquired by intervenors Rizal Commercial
Banking Corporation (RCBC) and Luisita Industrial Park Corporation (LIPCO), as well as the separate 80.51-
hectare SCTEX lot acquired by the government, should be excluded from the coverage of the assailed PARC
resolution. The Court however ordered that the unused balance of the proceeds of the sale of the 500-hectare
converted land and of the 80.51-hectare land used for the SCTEX be distributed to the FWBs.]

4. YES, the date of taking is November 21, 1989, when PARC approved HLIs SDP.

[For the purpose of determining just compensation, the date of taking is November 21, 1989 (the date when
PARC approved HLIs SDP) since this is the time that the FWBs were considered to own and possess the
agricultural lands in Hacienda Luisita. To be precise, these lands became subject of the agrarian reform
coverage through the stock distribution scheme only upon the approval of the SDP, that is, on November 21,
1989. Such approval is akin to a notice of coverage ordinarily issued under compulsory acquisition. On the
contention of the minority (Justice Sereno) that the date of the notice of coverage [after PARCs revocation of the
SDP], that is, January 2, 2006, is determinative of the just compensation that HLI is entitled to receive, the
Court majority noted that none of the cases cited to justify this position involved the stock distribution scheme.
Thus, said cases do not squarely apply to the instant case. The foregoing notwithstanding, it bears stressing
that the DAR's land valuation is only preliminary and is not, by any means, final and conclusive upon the
landowner. The landowner can file an original action with the RTC acting as a special agrarian court to
determine just compensation. The court has the right to review with finality the determination in the exercise of
what is admittedly a judicial function.]

5. NO, the 10-year period prohibition on the transfer of awarded lands under RA 6657 has NOT
lapsed on May 10, 1999; thus, the qualified FWBs should NOT yet be allowed to sell their land
interests in Hacienda Luisita to third parties.

[Under RA 6657 and DAO 1, the awarded lands may only be transferred or conveyed after 10 years from
the issuance and registration of the emancipation patent (EP) or certificate of land ownership award (CLOA).
Considering that the EPs or CLOAs have not yet been issued to the qualified FWBs in the instant case, the 10-
year prohibitive period has not even started. Significantly, the reckoning point is the issuance of the EP or
CLOA, and not the placing of the agricultural lands under CARP coverage. Moreover, should the FWBs be
immediately allowed the option to sell or convey their interest in the subject lands, then all efforts at agrarian
reform would be rendered nugatory, since, at the end of the day, these lands will just be transferred to
persons not entitled to land distribution under CARP.]

6. YES, the ruling in the July 5, 2011 Decision that the qualified FWBs be given an option to
remain as stockholders of HLI should be reconsidered.

[The Court reconsidered its earlier decision that the qualified FWBs should be given an option to remain as
stockholders of HLI, inasmuch as these qualified FWBs will never gain control [over the subject lands] given the
present proportion of shareholdings in HLI. The Court noted that the share of the FWBs in the HLI capital stock
is [just] 33.296%. Thus, even if all the holders of this 33.296% unanimously vote to remain as HLI stockholders,
which is unlikely, control will never be in the hands of the FWBs. Control means the majority of [sic] 50% plus
at least one share of the common shares and other voting shares. Applying the formula to the HLI
stockholdings, the number of shares that will constitute the majority is 295,112,101 shares (590,554,220 total
HLI capital shares divided by 2 plus one [1] HLI share). The 118,391,976.85 shares subject to the SDP
approved by PARC substantially fall short of the 295,112,101 shares needed by the FWBs to acquire control
over HLI.]

Anucension vs NLRC
Cadalin v. POEA, NLRC
This is a consolidation of 3 cases of SPECIAL CIVIL ACTIONS in the Supreme Court for Certiorari.
On June 6, 1984, Cadalin, Amul and Evangelista, in their own behalf and on behalf of 728 other OCWs
instituted a class suit by filing an Amended Complaint with the POEA for money claims arising from their
ROOT INTERNATIONAL, INC (BRI) which is a foreign corporation with headquarters in Houston, Texas, and
is engaged in construction; while AIBC is a domestic corporation licensed as a service contractor to recruit,
mobilize and deploy Filipino workers for overseas employment on behalf of its foreign principals.
The amended complaint sought the payment of the unexpired portion of the employment contracts, which
was terminated prematurely, and secondarily, the payment of the interest of the earnings of the Travel and
Reserved Fund; interest on all the unpaid benefits; area wage and salary differential pay; fringe benefits;
reimbursement of SSS and premium not remitted to the SSS; refund of withholding tax not remitted to the
BIR; penalties for committing prohibited practices; as well as the suspension of the license of AIBC and the
accreditation of BRII
On October 2, 1984, the POEA Administrator denied the Motion to Strike Out of the Records filed by AIBC
but required the claimants to correct the deficiencies in the complaint pointed out.
AIB and BRII kept on filing Motion for Extension of Time to file their answer. The POEA kept on granting
such motions.
On November 14, 1984, claimants filed an opposition to the motions for extension of time and asked that
AIBC and BRII declared in default for failure to file their answers.
On December 27, 1984, the POEA Administrator issued an order directing AIBC and BRII to file their
answers within ten days from receipt of the order.
(at madami pang motions ang na-file, new complainants joined the case, ang daming inavail na remedies ng
both parties)
On June 19, 1987, AIBC finally submitted its answer to the complaint. At the same hearing, the parties were
given a period of 15 days from said date within which to submit their respective position papers. On
February 24, 1988, AIBC and BRII submitted position paper. On October 27, 1988, AIBC and BRII filed a
Consolidated Reply, POEA Adminitartor rendered his decision which awarded the amount of $824, 652.44
in favor of only 324 complainants. Claimants submitted their Appeal Memorandum For Partial Appeal from
the decision of the POEA. AIBC also filed its MR and/or appeal in addition to the Notice of Appeal filed
NLRC promulgated its Resolution, modifying the decision of the POEA. The resolution removed some of the
benefits awarded in favor of the claimants. NLRC denied all the MRs. Hence, these petitions filed by the
claimants and by AlBC and BRII.
The case rooted from the Labor Law enacted by Bahrain where most of the complainants were deployed. His
Majesty Ise Bin Selman Al Kaifa, Amir of Bahrain, issued his Amiri Decree No. 23 on June 16, 1176,
otherwise known re the Labour Law for the Private Sector. Some of the provision of Amiri Decree No. 23 that
are relevant to the claims of the complainants-appellants are as follows:
Art. 79: x x x A worker shall receive payment for each extra hour equivalent to his wage entitlement
increased by a minimum of twenty-rive per centurn thereof for hours worked during the day; and by a
minimum off fifty per centurn thereof for hours worked during the night which shall be deemed to being
from seven oclock in the evening until seven oclock in the morning .
Art. 80: Friday shall be deemed to be a weekly day of rest on full pay.
If employee worked, 150% of his normal wage shall be paid to him x x x.
Art. 81; x x x When conditions of work require the worker to work on any official holiday, he shall be paid an
additional sum equivalent to 150% of his normal wage.
Art. 84: Every worker who has completed one years continuous service with his employer shall be entitled to
Laos on full pay for a period of not less than 21 days for each year increased to a period not less than 28
days after five continuous years of service.
A worker shall be entitled to such leave upon a quantum meruit in respect of the proportion of his service in
that year.
Art. 107: A contract of employment made for a period of indefinite duration may be terminated by either
party thereto after giving the other party prior notice before such termination, in writing, in respect of
monthly paid workers and fifteen days notice in respect of other workers. The party terminating a contract
without the required notice shall pay to the other party compensation equivalent to the amount of wages
payable to the worker for the period of such notice or the unexpired portion thereof.
Art. Ill: x x x the employer concerned shall pay to such worker, upon termination of employment, a leaving
indemnity for the period of his employment calculated on the basis of fifteen days wages for each year of the
first three years of service and of one months wages for each year of service thereafter. Such worker shall be
entitled to payment of leaving indemnity upon a quantum meruit in proportion to the period of his service
completed within a year.
1. WON the foreign law should govern or the contract of the parties.(WON the complainants who have
worked in Bahrain are entitled to the above-mentioned benefits provided by Amiri Decree No. 23 of Bahrain).
2. WON the Bahrain Law should apply in the case. (Assuming it is applicable WON complainants claim for
the benefits provided therein have prescribed.)
3. Whether or not the instant cases qualify as; a class suit (siningit ko nalang)
(the rest of the issues in the full text of the case refer to Labor Law)
1. NLRC set aside Section 1, Rule 129 of the 1989 Revised Rules on Evidence governing the pleading and
proof of a foreign law and admitted in evidence a simple copy of the Bahrains Amiri Decree No. 23 of 1976
(Labour Law for the Private Sector).
NLRC applied the Amiri Deere, No. 23 of 1976, which provides for greater benefits than those stipulated in
the overseas-employment contracts of the claimants. It was of the belief that where the laws of the host
country are more favorable and beneficial to the workers, then the laws of the host country shall form part
of the overseas employment contract. It approved the observation of the POEA Administrator that in labor
proceedings, all doubts in the implementation of the provisions of the Labor Code and its implementing
regulations shall be resolved in favor of labor.
The overseas-employment contracts, which were prepared by AIBC and BRII themselves, provided that the
laws of the host country became applicable to said contracts if they offer terms and conditions more
favorable than those stipulated therein. However there was a part of the employment contract which
provides that the compensation of the employee may be adjusted downward so that the total computation
plus the non-waivable benefits shall be equivalent to the compensation therein agree, another part of the
same provision categorically states that total remuneration and benefits do not fall below that of the host
country regulation and custom.
Any ambiguity in the overseas-employment contracts should be interpreted against AIBC and BRII, the
parties that drafted it. Article 1377 of the Civil Code of the Philippines provides:
The interpretation of obscure words or stipulations in a contract shall not favor the party who caused the
Said rule of interpretation is applicable to contracts of adhesion where there is already a prepared form
containing the stipulations of the employment contract and the employees merely take it or leave it. The
presumption is that there was an imposition by one party against the other and that the employees signed
the contracts out of necessity that reduced their bargaining power.
We read the overseas employment contracts in question as adopting the provisions of the Amiri Decree No.
23 of 1976 as part and parcel thereof. The parties to a contract may select the law by which it is to be
governed. In such a case, the foreign law is adopted as a system to regulate the relations of the parties,
including questions of their capacity to enter into the contract, the formalities to be observed by them,
matters of performance, and so forth. Instead of adopting the entire mass of the foreign law, the parties may
just agree that specific provisions of a foreign statute shall be deemed incorporated into their contract as a
set of terms. By such reference to the provisions of the foreign law, the contract does not become a foreign
contract to be governed by the foreign law. The said law does not operate as a statute but as a set of
contractual terms deemed written in the contract.
A basic policy of contract is to protect the expectation of the parties. Such party expectation is protected by
giving effect to the parties own choice of the applicable law. The choice of law must, however, bear some
relationship the parties or their transaction. There is no question that the contracts sought to be enforced by
claimants have a direct connection with the Bahrain law because the services were rendered in that country.
2. NLRC ruled that the prescriptive period for the filing of the claims of the complainants was 3 years, as
provided in Article 291 of the Labor Code of the Philippines, and not ten years as provided in Article 1144 of
the Civil Code of the Philippines nor one year as provided in the Amiri Decree No. 23 of 1976.
Article 156 of the Amiri Decree No. 23 of 1976 provides:
A claim arising out of a contract of employment shall not actionable after the lapse of one year from the
date of the expiry of the Contract.
As a general rule, a foreign procedural law will not be applied in the forum (local court), Procedural matters,
such as service of process, joinder of actions, period and requisites for appeal, and so forth, are governed by
the laws of the forum. This is true even if the action is based upon a foreign substantive law.
A law on prescription of actions is sui generis in Conflict of Laws in the sense that it may be viewed either as
procedural or substantive, depending on the characterization given such a law. In Bournias v. Atlantic
Maritime Company (220 F. 2d. 152, 2d Cir. [1955]), where the issue was the applicability of the Panama
Labor Code in a case filed in the State of New York for claims arising from said Code, the claims would have
prescribed under the Panamanian Law but not under the Statute of Limitations of New York. The U.S.
Circuit Court of Appeals held that the Panamanian Law was procedural as it was not specifically intended
to be substantive, hence, the prescriptive period provided in the law of the forum should apply. The Court
observed: . . . we are dealing with a statute of limitations of a foreign country, and it is not clear on the face
of the statute that its purpose was to limit the enforceability, outside as well as within the foreign country
concerned, of the substantive rights to which the statute pertains. We think that as a yardstick for
determining whether that was the purpose, this test is the most satisfactory one.
The Court further noted: Applying that test here it appears to us that the libellant is entitled to succeed, for
the respondents have failed to satisfy us that the Panamanian period of limitation in question was
specifically aimed against the particular rights which the libellant seeks to enforce. The Panama Labor Code
is a statute having broad objectives. The American court applied the statute of limitations of New York,
instead of the Panamanian law, after finding that there was no showing that the Panamanian law on
prescription was intended to be substantive. Being considered merely a procedural law even in Panama, it
has to give way to the law of the forum (local Court) on prescription of actions.
However the characterization of a statute into a procedural or substantive law becomes irrelevant when the
country of the forum (local Court) has a borrowing statute. Said statute has the practical effect of treating
the foreign statute of limitation as one of substance. A borrowing statute directs the state of the forum
(local Court) to apply the foreign statute of limitations to the pending claims based on a foreign law. While
there are several kinds of borrowing statutes, one form provides that an action barred by the laws of the
place where it accrued will not be enforced in the forum even though the local statute was not run against it.
Section 48 of Code of Civil Procedure is of this kind. It provides: If by the laws of the state or country where
the cause of action arose, the action is barred, it is also barred in the Philippine Islands.
Section 48 has not been repealed or amended by the Civil Code of the Philippines. In the light of the 1987
Constitution, however, Section 48 cannot be enforced ex proprio vigore insofar as it ordains the application
in this jurisdiction of Section 156 of the Amiri Decree No. 23 of 1976.
The courts of the forum (local Court) will not enforce any foreign claim obnoxious to the forums public
policy. To enforce the one-year prescriptive period of the Amiri Decree No. 23 of 1976 as regards the claims
in question would contravene the public policy on the protection to labor.
In the Declaration of Principles and State Policies, the 1987 Constitution emphasized that:The state shall
promote social justice in all phases of national development (Sec. 10).
The state affirms labor as a primary social economic force. It shall protect the rights of workers and promote
their welfare (Sec. 18).
In Article XIII on Social Justice and Human Rights, the 1987 Constitution provides:
Sec. 3. The State shall afford full protection to labor, local and overseas, organized and unorganized, and
promote full employment and equality of employment opportunities for all.
Thus, the applicable law on prescription is the Philippine law.
The next question is whether the prescriptive period governing the filing of the claims is 3 years, as provided
by the Labor Code or 10 years, as provided by the Civil Code of the Philippines.
Article 1144 of the Civil Code of the Philippines provides:
The following actions must be brought within ten years from the time the right of action accross:
(1) Upon a written contract; (2) Upon an obligation created by law; (3) Upon a judgment
In this case, the claim for pay differentials is primarily anchored on the written contracts between the
litigants, the ten-year prescriptive period provided by Art. 1144(l) of the New Civil Code should govern.
3. NO. A class suit is proper where the subject matter of the controversy is one of common or general
interest to many and the parties are so numerous that it is impracticable to bring them all before the court.
When all the claims are for benefits granted under the Bahrain law many of the claimants worked outside
Bahrain. Some of the claimants were deployed in Indonesia under different terms and condition of
Inasmuch as the First requirement of a class suit is not present (common or general interest based on the
Amiri Decree of the State of Bahrain), it is only logical that only those who worked in Bahrain shall be
entitled to rile their claims in a class suit.
While there are common defendants (AIBC and BRII) and the nature of the claims is the same (for
employees benefits), there is no common question of law or fact. While some claims are based on the Amiri
Law of Bahrain, many of the claimants never worked in that country, but were deployed elsewhere. Thus,
each claimant is interested only in his own demand and not in the claims of the other employees of
defendants. A claimant has no concern in protecting the interests of the other claimants as shown by the
fact, that hundreds of them have abandoned their co-claimants and have entered into separate compromise
settlements of their respective claims. The claimants who worked in Bahrain can not be allowed to sue in a
class suit in a judicial proceeding.
WHEREFORE, all the three petitioners are DISMISSED.

Bank of the Philippines Islands v. BPI Employees Union-Davao Chapter-Federation of Unions in BPI
In 2000, Far East Bank (FEB) was absorbed by the Bank of the Philippine Islands (BPI). Now BPI has an
existing Union Shop Clause agreement with the BPI Employees Union-Davao Chapter-Federation of Unions
in BPI Unibank (BPI Union) whereby it is a pre-condition that new employees must join the union before
they can be regularized otherwise they will not have a continued employment. By reason of the failure of the
FEB employees to join the union, BPI Union recommended to BPI their dismissal. BPI refused. The issue
went to voluntary arbitration where BPI won but the Court of Appeals reversed the Voluntary Arbitrator. BPI
appealed to the Supreme Court.
ISSUE: Whether or not the Union Shop agreement violated the constitutional right of security of tenure of
the FEB employees absorbed by BPI.
HELD: No. As a general rule, the State protects the workers right to security of tenure. An employees
services can only be terminated upon just and authorized causes. In this case, the presence of a Union Shop
Clause in the CBA between BPI and BPI Union must be respected. Failure of an employee to join the union
pursuant to the clause is an authorized cause for BPI not to continue employing the employee concerned
and BPI must respect that provision of the CBA. In the hierarchy of labor rights, unionism is favored over
security of tenure. A contrary interpretation of the Union Shop Clause would dilute its efficacy and put the
certified union that is supposedly being protected thereby at the mercy of management. Nevertheless, the
FEB employees are still entitled to the twin notice rule this is to afford them ample opportunity to whether
or not join the union.

ISAE vs Quisimbing

Private respondent International School, Inc. (School), pursuant to PD 732, is a domestic educational
institution established primarily for dependents of foreign diplomatic personnel and other temporary
residents. The decree authorizes the School to employ its own teaching and management personnel selected
by it either locally or abroad, from Philippine or other nationalities, such personnel being exempt from
otherwise applicable laws and regulations attending their employment, except laws that have been or will be
enacted for the protection of employees. School hires both foreign and local teachers as members of its
faculty, classifying the same into two: (1) foreign-hires and (2) local-hires.
The School grants foreign-hires certain benefits not accorded local-hires. Foreign-hires are also paid a salary
rate 25% more than local-hires.
When negotiations for a new CBA were held on June 1995, petitioner ISAE, a legitimate labor union and the
collective bargaining representative of all faculty members of the School, contested the difference in salary
rates between foreign and local-hires. This issue, as well as the question of whether foreign-hires should be
included in the appropriate bargaining unit, eventually caused a deadlock between the parties.
ISAE filed a notice of strike. Due to the failure to reach a compromise in the NCMB, the matter reached the
DOLE which favored the School. Hence this petition.

Whether the foreign-hires should be included in bargaining unit of local- hires.

NO. The Constitution, Article XIII, Section 3, specifically provides that labor is entitled to humane
conditions of work. These conditions are not restricted to the physical workplace the factory, the office or
the field but include as well the manner by which employers treat their employees.
Discrimination, particularly in terms of wages, is frowned upon by the Labor Code. Article 248 declares it an
unfair labor practice for an employer to discriminate in regard to wages in order to encourage or discourage
membership in any labor organization.
The Constitution enjoins the State to protect the rights of workers and promote their welfare, In Section 18,
Article II of the constitution mandates to afford labor full protection. The State has the right and duty to
regulate the relations between labor and capital. These relations are not merely contractual but are so
impressed with public interest that labor contracts, collective bargaining agreements included, must yield to
the common good.
However, foreign-hires do not belong to the same bargaining unit as the local-hires.
A bargaining unit is a group of employees of a given employer, comprised of all or less than all of the entire
body of employees, consistent with equity to the employer indicate to be the best suited to serve the reciprocal
rights and duties of the parties under the collective bargaining provisions of the law.
The factors in determining the appropriate collective bargaining unit are (1) the will of the employees (Globe
Doctrine); (2) affinity and unity of the employees interest, such as substantial similarity of work and duties,
or similarity of compensation and working conditions (Substantial Mutual Interests Rule); (3) prior collective
bargaining history; and (4) similarity of employment status. 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.
In the case at bar, it does not appear that foreign-hires have indicated their intention to be grouped together
with local-hires for purposes of collective bargaining. The collective bargaining history in the School also
shows that these groups were always treated separately. Foreign-hires have limited tenure; local-hires enjoy
security of tenure. Although foreign-hires perform similar functions under the same working conditions as
the local-hires, foreign-hires are accorded certain benefits not granted to local-hires such as housing,
transportation, shipping costs, taxes and home leave travel allowances. These benefits are reasonably
related to their status as foreign-hires, and justify the exclusion of the former from the latter. To include
foreign-hires in a bargaining unit with local-hires would not assure either group the exercise of their
respective collective bargaining rights.
WHEREFORE, the petition is GIVEN DUE COURSE. The petition is hereby GRANTED IN PART.

Serrano v. Gallant Maritime Services

Petitioner was hired by Gallant Maritime Services, Inc. and Marlow Navigation Co., Ltd. (respondents) under
a Philippine Overseas Employment Administration (POEA)-approved Contract of Employment with the
following terms and conditions:
Duration of contract 12 months
Position Chief Officer
Basic monthly salary US$1,400.00
Hours of work 48.0 hours per week
Overtime US$700.00 per month
Vacation leave with pay 7.00 days per month
On March 19, 1998, the date of his departure, petitioner was constrained to accept
a downgraded employment contract for the position of Second Officer with a monthly salary of
US$1,000.00, upon the assurance and representation of respondents that he would be made Chief Officer
by the end of April 1998.
Respondents did not deliver on their promise to make petitioner Chief Officer. Hence, petitioner refused to
stay on as Second Officer and was repatriated to the Philippines on May 26, 1998.
Petitioners employment contract was for a period of 12 months or from March 19, 1998 up to March 19,
1999, but at the time of his repatriation on May 26, 1998, he had served only two (2) months and
seven (7) days of his contract, leaving an unexpired portion of nine (9) months and twenty-three (23)
Petitioner filed with the Labor Arbiter (LA) a Complaint against respondents for constructive
dismissal and for payment of his money claims in the total amount of US$26,442.73.
The LA rendered a Decision dated July 15, 1999, declaring the dismissal of petitioner illegal and
awarding him monetary benefits, to wit:
WHEREFORE, premises considered, judgment is hereby rendered declaring that the dismissal of the
complainant (petitioner) by the respondents in the above-entitled case was illegal and the respondents are
hereby ordered to pay the complainant [petitioner], jointly and severally, in Philippine Currency,
based on the rate of exchange prevailing at the time of payment, the amount of EIGHT THOUSAND
SEVEN HUNDRED SEVENTY U.S. DOLLARS (US $8,770.00), representing the complainants salary for
three (3) months of the unexpired portion of the aforesaid contract of employment.
The claims of the complainant for moral and exemplary damages are hereby DISMISSED for lack of merit.
In awarding petitioner a lump-sum salary of US$8,770.00, the LA based his computation on the
salary period of three months only rather than the entire unexpired portion of nine months and 23
days of petitioners employment contract applying the subject clause. However, the LA applied the
salary rate of US$2,590.00, consisting of petitioners [b]asic salary, US$1,400.00/month +
US$700.00/month, fixed overtime pay, + US$490.00/month, vacation leave pay =
US$2,590.00/compensation per month.
Respondents appealed to the National Labor Relations Commission (NLRC) to question the finding of the
LA that petitioner was illegally dismissed.
The NLRC modified the LA Decision and corrected the LAs computation of the lump-sum salary awarded to
petitioner by reducing the applicable salary rate from US$2,590.00 to US$1,400.00 because R.A. No. 8042
does not provide for the award of overtime pay, which should be proven to have been actually
performed, and for vacation leave pay.
Petitioner filed a Motion for Partial Reconsideration, but this time he questioned the constitutionality
of the subject clause. The NLRC denied the motion.
Petitioner filed a Petition for Certiorari with the CA, reiterating the constitutional challenge against the
subject clause. After initially dismissing the petition on a technicality, the CA eventually gave due course to
it, as directed by this Court in its Resolution which granted the petition for certiorari,filed by petitioner.
The CA affirmed the NLRC ruling on the reduction of the applicable salary rate; however, the CA
skirted the constitutional issue raised by petitioner.
His Motion for Reconsideration having been denied by the CA, petitioner brings his cause to this Court on
the following grounds:
The Court of Appeals and the labor tribunals have decided the case in a way not in accord with applicable
decision of the Supreme Court involving similar issue of granting unto the migrant worker back wages
equal to the unexpired portion of his contract of employment instead of limiting it to three (3)
Even without considering the constitutional limitations [of] Sec. 10 of Republic Act No. 8042, the Court of
Appeals gravely erred in law in excluding from petitioners award the overtime pay and vacation pay
provided in his contract since under the contract they form part of his salary.
The Court now takes up the full merit of the petition mindful of the extreme importance of the constitutional
question raised therein.
Whether Section 10 (par 5) of RA 8042 is unconstitutional
Proper computation of the Lump-sum salary to be awarded to petitioner by reason of his illegal
Whether the overtime and leave pay should form part of the salary basis in the computation of his
monetary award

The unanimous finding of the LA, NLRC and CA that the dismissal of petitioner was illegal is not
disputed. Likewise not disputed is the salary differential of US$45.00 awarded to petitioner in all three fora.
Applying the subject clause, the NLRC and the CA computed the lump-sum salary of petitioner at the
monthly rate of US$1,400.00 covering the period of three months out of the unexpired portion of nine
months and 23 days of his employment contract or a total of US$4,200.00.
Impugning the constitutionality of the subject clause, petitioner contends that, in addition to the
US$4,200.00 awarded by the NLRC and the CA, he is entitled to US$21,182.23 more or a total of
US$25,382.23, equivalent to his salaries for the entire nine months and 23 days left of his
employment contract, computed at the monthly rate of US$2,590.00.31
Arguments of the Petitioner
For Antonio Serrano (petitioner), a Filipino seafarer, the last clause in the 5th paragraph of Section 10,
Republic Act (R.A.) No. 8042, violates the OFWs constitutional rights in that it impairs the terms of their
contract, deprives them of equal protection and denies them due process.
The Arguments of Respondents
Respondents contend that the constitutional issue should not be entertained, for this was belatedly
interposed by petitioner in his appeal before the CA, and not at the earliest opportunity, which was when he
filed an appeal before the NLRC.40
The Arguments of the Solicitor General
The Solicitor General (OSG)41 points out that as R.A. No. 8042 took effect on July 15, 1995, its provisions
could not have impaired petitioners 1998 employment contract. Rather, R.A. No. 8042 having preceded
petitioners contract, the provisions thereof are deemed part of the minimum terms of petitioners
employment, especially on the matter of money claims, as this was not stipulated upon by the parties.
The Courts Ruling:
First Issue
Does the subject clause violate Section 1, Article III of the Constitution, and Section 18, Article II
and Section 3, Article XIII on Labor as protected sector?
The answer is in the affirmative.
Section 1, Article III of the Constitution guarantees:
No person shall be deprived of life, liberty, or property without due process of law nor shall any person be
denied the equal protection of the law.
Section 18, Article II and Section 3, Article XIII accord all members of the labor sector, without distinction as
to place of deployment, full protection of their rights and welfare.
To Filipino workers, the rights guaranteed under the foregoing constitutional provisions translate to
economic security and parity: all monetary benefits should be equally enjoyed by workers of similar
category, while all monetary obligations should be borne by them in equal degree; none should be denied the
protection of the laws which is enjoyed by, or spared the burden imposed on, others in like circumstances.
Imbued with the same sense of obligation to afford protection to labor, the Court in the present
case also employs the standard of strict judicial scrutiny, for it perceives in the subject clause a
suspect classification prejudicial to OFWs.
Upon cursory reading, the subject clause appears facially neutral, for it applies to all OFWs. However, a
closer examination reveals that the subject clause has a discriminatory intent against, and an invidious
impact on OFWs
The subject clause does not state or imply any definitive governmental purpose; and it is for that precise
reason that the clause violates not just petitioners right to equal protection, but also her right to
substantive due process under Section 1, Article III of the Constitution.
Second Issue
It is plain that prior to R.A. No. 8042, all OFWs, regardless of contract periods or the unexpired portions
thereof, were treated alike in terms of the computation of their monetary benefits in case of illegal dismissal.
Their claims were subjected to a uniform rule of computation: their basic salaries multiplied by the entire
unexpired portion of their employment contracts.
The enactment of the subject clause in R.A. No. 8042 introduced a differentiated rule of computation
of the money claims of illegally dismissed OFWs based on their employment periods, in the process
singling out one category whose contracts have an unexpired portion of one year or more and subjecting
them to the peculiar disadvantage of having their monetary awards limited to their salaries for 3 months or
for the unexpired portion thereof, whichever is less, but all the while sparing the other category from such
prejudice, simply because the latters unexpired contracts fall short of one year.
Prior to R.A. No. 8042, a uniform system of computation of the monetary awards of illegally dismissed OFWs
was in place. This uniform system was applicable even to local workers with fixed-term employment.
The subject clause does not state or imply any definitive governmental purpose; and it is for that precise
reason that the clause violates not just petitioners right to equal protection, but also her right to
substantive due process under Section 1, Article III of the Constitution.
The subject clause being unconstitutional, petitioner is entitled to his salaries for the entire
unexpired period of nine months and 23 days of his employment contract, pursuant to law and
jurisprudence prior to the enactment of R.A. No. 8042.
Third Issue
Petitioner contends that his overtime and leave pay should form part of the salary basis in the computation
of his monetary award, because these are fixed benefits that have been stipulated into his contract.
Petitioner is mistaken.
The word salaries in Section 10(5) does not include overtime and leave pay. For seafarers like petitioner,
DOLE Department Order No. 33, series 1996, provides a Standard Employment Contract of Seafarers, in
which salary is understood as the basic wage, exclusive of overtime, leave pay and other bonuses;
whereas overtime pay is compensation for all work performed in excess of the regular eight hours,
and holiday pay is compensation for any work performed on designated rest days and holidays.
In the same vein, the claim for the days leave pay for the unexpired portion of the contract is unwarranted
since the same is given during the actual service of the seamen.
WHEREFORE, the Court GRANTS the Petition. The subject clause or for three months for every year
of the unexpired term, whichever is less in the 5th paragraph of Section 10 of Republic Act No. 8042
is DECLARED UNCONSTITUTIONAL; and the December 8, 2004 Decision and April 1, 2005 Resolution
of the Court of Appeals are MODIFIED to the effect that petitioner is AWARDED his salaries for the
entire unexpired portion of his employment contract consisting of nine months and 23 days
computed at the rate of US$1,400.00 per month.

Asia Brewery, Inc. v Tunay na Pagkakaisa ng mga Manggagawa sa Asia

Facts: Asia Brewery entered into a Collective Bargaining Agreement with BLMA, the exclusive bargaining
representative of Asia Brewery rank-and-file employees. Those employees explicitly excluded in the CBA are,
among others, confidential and executive secretaries and purchasing and quality control staff.

A dispute arose when Asia Brewery management stopped deducting union dues from 81 employees,
believing that their membership in the union violated the CBA. These employees were Sampling Inspectors,
Machine Gauge Technician, both part of the Quality Control Staff, checkers assigned to different
departments, and secretaries and clerks directly under the respective division managers.

During the pendency of the case, Tunay na Pagkakaisa won in a certification election.

Issue: Whether or not the 81 employees may be validly excluded from the bargaining unit.

Held: No. Confidential employees are defined as those who (1) assist or act in a confidential capacity, (2) to
persons who formulate, determine, and effectuate management policies in the field of labor relations. The
two (2) criteria are cumulative, and both must be met if an employee is to be considered a confidential
employee that is, the confidential relationship must exist between the employee and his supervisor, and the
supervisor must handle the prescribed responsibilities relating to labor relations.The exclusion from
bargaining units of employees who, in the normal course of their duties, become aware of management
policies relating to labor relations is a principal objective sought to be accomplished by the "confidential
employee rule."

There is no showing in this case that the secretaries/clerks and checkers assisted or acted in a confidential
capacity to managerial employees and obtained confidential information relating to labor relations
policies.And even assuming that they had exposure to internal business operations of the company,
respondent claimed, this is not per se ground for their exclusion in the bargaining unit of the daily-paid
rank-and-file employees.