Supreme Court of the Philippines

256 Phil. 386

EN BANC
G.R. No. 78909, June 30, 1989 Commented [a1]: LABOR STANDARDS: the min. req. prescribed,
by existing laws, rules, and regulations relating to wages, hours of
MATERNITY CHILDREN'S HOSPITAL, REPRESENTED BY ANTERA L. DORADO, work, cost-of-living allowance, and other monetary and welfare
benefits, including occupational, safety and health.
PRESIDENT, PETITIONER, VS. THE HONORABLE SECRETARY OF LABOR AND THE
REGIONAL DIRECTOR OF LABOR, REGION X, RESPONDENTS. FACTS: 10 employees of the petitioner filed a complaint with the
Office of the Regional Director of Labor and Employment for
underpayment of their salaries and ECOLAs.

ISSUE: who has jurisdiction over the case?

DECISION Who are entitled to the award?

HELD: RD exercised both visitorial and enforcement power over

MEDIALDEA, J.:
This is a petition for certiorariseeking the annulment of the Decision of the respondent Secretary of Labor
dated September 24, 1986, affirming with modification the Order of respondent Regional Director of
Labor, Region X, dated August 4, 1986, awarding salary differentials and emergency cost of living
allowances (ECOLAs) to employees of petitioner, and the Order denying petitioner's motion for
reconsideration dated May 13, 1987, on the ground of grave abuse of discretion.
Petitioner is a semi-government hospital, managed by the Board of Directors of the Cagayan de Oro
Women's Club and Puericulture Center, headed by Mrs. Antera Dorado, as hold¬over President. The
hospital derives its finances from the club itself as well as from paying patients, averaging 130 per month. It
is also partly subsidized by the Philippine Charity Sweepstakes Office and the Cagayan De Oro City
government.
labor standards cases, and is therefore empowered to adjudicate
money claims, provided there still exists an EER, and the findings of
the regional office is not contested by the employer concerned.
Those who signed in the complaint and all employees of the
hospital are entitled, but not those who are no longer connected in
the Hospital at the time of the filing of the complaint.
The visitorial and enforcement powers given to the Secretary of
Labor is relevant to, and exercisable over establishments, not over
the individual members/employees, because what is sought to be
achieved by its exercise is the observance of, and/or compliance by,
such firm/establishment with the labor standards regulations.

Petitioner has forty-one (41) employees. Aside from salary and living allowances, the employees are given
food, but the amount spent therefor is deducted from their respective salaries (pp. 77-78, Rollo).
On May 23, 1986, ten (10) employees of the petitioner employed in different capacities/positions filed a
complaint with the Office of the Regional Director of Labor and Employment, Region X, for
underpayment of their salaries and ECOLAs, which was docketed as ROX Case No. CW-7I-86.
On June 16, 1986, the Regional Director directed two of his Labor Standard and Welfare Officers to inspect
the records of the petitioner to ascertain the truth of the allegations in the complaints (p. 98, Rollo). Payrolls
covering the periods of May, 1974, January, 1985, November, 1985 and May, 1986, were duly submitted for
inspection.
On July 17, 1986, the Labor Standard and Welfare Officers submitted their report confirming that there was
underpayment of wages and ECOLAs of all the employees by the petitioner, the dispositive portion of
which reads:
"IN VIEW OF THE FOREGOING, deficiency on wage and ecola as verified and confirmed per review of
the respondent payrolls and interviews with the complainant workers and all other information gathered by
the team, it is respectfully recommended to the Honorable Regional Director, this office, that Antera
Dorado, President be ORDERED to pay the amount of SIX HUNDRED FIFTY FOUR THOUSAND
SEVEN HUNDRED FIFTY SIX &01/100 (P654,756.01), representing underpayment of wages and ecola
to the THIRTY SIX (36) employees of the said hospital as appearing in the attached Annex "F" worksheets
and/or whatever action equitable under the premises." (p. 99, Rollo)
Based on this inspection report and recommendation, the Regional Director issued an Order dated August
4, 1986, directing the payment of P723,888.58, representing underpayment of wages and ECOLAs to all the
petitioner's employees, the dispositive portion of which reads:
"WHEREFORE, premises considered, respondent Maternity and Children Hospital is hereby ordered to
pay the above-listed complainants the total amount indicated opposite each name, thru this Office within
ten (10) days from receipt thereof. Thenceforth, the respondent hospital is also ordered to pay its
employees/workers the prevailing statutory minimum wage and allowance.
SO ORDERED." (p. 34, Rollo)
Petitioner appealed from this Order to the Minister of Labor and Employment, Hon. Augusto S. Sanchez,
who rendered a Decision on September 24, 1986, modifying the said Order in that deficiency wages and
ECOLAs should be computed only from May 23, 1983 to May 23, 1986, the dispositive portion of which
reads:
"WHEREFORE, the August 29, 1986 order is hereby MODIFIED in that the deficiency wages and
ECOLAs should only be computed from May 23, 1983 to May 23, 1986. The case is remanded to the
Regional Director, Region X, for recomputation specifying the amounts due each the complainants under
each of the applicable Presidential Decrees." (p. 40, Rollo)
On October 24, 1986, the petitioner filed a motion for reconsideration which was denied by the Secretary of
Labor in his Order dated May 13,1987, for lack of merit (p. 43, Rollo).
The instant petition questions the all-embracing applicability of the award involving salary differentials and Commented [a2]: ISSUE: are those non-signatories in the
ECOLAs, in that it covers not only the hospital employees who signed the complaints, but also those (a) complaint also covered of the award; how about those who were
no longer in the service of the hospital when the complaints were
who are not signatories to the complaint, and (b) those who were no longer in the service of the hospital at filed?
the time the complaints were filed.
Petitioner likewise maintains that the Order of the respondent Regional Director of Labor, as affirmed with
modifications by respondent Secretary of Labor, does not clearly and distinctly state the facts and the law on
which the award was based. In its "Rejoinder to Comment," petitioner further questions the authority of the
Regional Director to award salary differentials and ECOLAs to private respondents, (relying on the case of
Encarnacion vs. Baltazar, G.R. No. L-16883, March 27,1961, 1 SCRA 860, as authority for raising the
additional issue of lack of jurisdiction at any stage of the proceedings, p. 52, Rollo), alleging that the original
and exclusive jurisdiction over money claims is properly lodged in the Labor Arbiter, based on Article 217,
paragraph 3 of the Labor Code.
The primary issue here is whether or not the Regional Director had jurisdiction over the case and if so, the Commented [a3]: Regional Director exercises both visitorial and
enforcement power over labor standards cases, and is therefore
extent of coverage of any award that should be forthcoming, arising from his visitorial and enforcement empowered to adjudicate money claims, provided there still exists an
powers under Article 128 of the Labor Code. The matter of whether or not the decision states clearly and employer-employee relationship,
distinctly statement of facts as well as the law upon which it is based, becomes relevant after the issue on
jurisdiction has been resolved.
This is a labor standards case, and is governed by Art. 128-b of the Labor Code, as amended by E.O. No.
111. Labor standards refer to the minimum requirements prescribed by existing laws, rules, and regulations
relating to wages, hours of work, cost of living allowance and other monetary and welfare benefits, including
occupational, safety, and health standards. (Section 7, Rule I, Rules on the Disposition of Labor Standards
Cases in the Regional Office, dated September 16, 1987).[1]Under the present rules, a Regional Director
exercises bothvisitorial and enforcement power over labor standards cases, and is therefore empowered to
adjudicate money claims, providedthere still existsan employer-employee relationship, and the findings of
the regional office is not contestedby the employer concerned.
Prior to the promulgation of E.O. No. 111 on December 24, 1986, the Regional Director's authority over
money claims was unclear. The complaint in the present case was filed on May 23, 1986 when E.O. No. 111
was not yet in effect, and the prevailing view was that stated in the case of Antonio Ong, Sr. vs. Henry M.
Parel, et al, G.R. No. 76710, dated December 21, 1987, thus:
"x x x the Regional Director, in the exercise of his visitorial and enforcement powers under Article 128 of
the Labor Code, has no authority to award money claims, properly falling within the jurisdiction of the labor
arbiter, x x x

"x x x If the inspection results in a finding that the employer has violated certain labor standard laws, then
the regional director must order the necessary rectifications. However, this does not include adjudication of
money claims, clearly within the ambit of the labor arbiter's authority under Article 217 of the Code."
The Ongcase relied on the ruling laid down in Zambales Base Metals Inc. vs. The Minister of Labor, et al.,
(G.R. Nos. 73184-88, November 26, 1986, 146 SCRA 50) that the "Regional Director was not empowered
to share in the original and exclusive jurisdiction conferred on Labor Arbiters by Article 217."
We believe, however, that even in the absence of E.O. No. 111, Regional Directors already had enforcement
powers over money claims, effective under P.D. No. 850, issued on December 16, 1975, which transferred
labor standards cases from the arbitration system to the enforcement system.
To clarify matters, it is necessary to enumerate a series of rules and provisions of law on the disposition of
labor standards cases.
Priorto the promulgation of PD 850, labor standards cases were an exclusive function of labor arbiters,
under Article 216 of the then Labor Code (PD No. 442, as amended by PD 570-a), which read in part:
"Art 216. Jurisdiction of the Commission. — The Commission shall have exclusive appellate jurisdiction
over all cases decided by the Labor Arbiters and compulsory arbitrators.
"The Labor Arbiters shall have exclusive jurisdictionto hear and decide the following cases involving all
workers whether agricultural or non-agricultural.
"xxx xxx xxx.
"(c) All money claims of workers, involving non-payment or underpayment of wages, overtime
compensation, separation pay, maternity leave and other money claims arising from employee-employer
relations, except claims for workmen's compensation, social security and medicare benefits;
"(d) Violations of labor standard laws;
"x x x." (Italics supplied)
The Regional Director exercised visitorial rights only under then Article 127 of the Code as follows:
"ART. 127. Visitorial Powers. — The Secretary of Labor or his duly authorized representatives, including,
but not restricted, to the labor inspectorate, shall have access to employers' records and premises at any time
of the day or night whenever work is being undertaken therein, and the right to copy therefrom, to question
any employee and investigate any fact, condition or matter which may be necessary to determine violations
or in aid in the enforcement of this Title and of any Wage Order or regulation issued pursuant to this
Code."
With the promulgation of PD- 850, Regional Directors were given enforcement powers, in addition to
visitorial powers. Article-127, as amended, provided in part:
SEC. 10. Article 127 of the Code is hereby amended to read as follows:
Art. 127. Visitorial and enforcement powers. —
xxx xxx xxx;
'(b) The Secretary of Labor or his duly authorized representatives shall have the power to order and
administer, after due notice and hearing, compliance with the labor standards provisionsof this Code based
on the findings of labor regulation officers or industrial safety engineers made in the course of inspection,
and to issue writs of execution to the appropriate authority for the enforcement of their order.'
"xxx xxx xxx."

Labor Arbiters, on the other hand, lost jurisdiction over labor standards cases. Article 216, as then amended
by PD 850, provided in part:
"SEC. 22. Article 216 of the Code is hereby amended to read as follows:.
'Art. 216. Jurisdiction of Labor Arbiters and the Commission. — (a) The Labor Arbiters shall have exclusive
jurisdiction to hear and decidethe following cases involving all workers, whether agricultural or non-
agricultural:
'xxx xxx xxx;
'(3) All money claims of workers involving non-payment or underpayment of wages, overtime or premium
compensation, maternity or service incentive leave, separation pay and other money claims arising from
employer-employee relations, except claims for employee's compensation, social security and medicare
benefits and as otherwise provided in Article 127 of this Code.'
"x x x." (Italics supplied)
Under the then Labor Code therefore (PD 442 as amended by PD 570-a, as further amended by PD 850),
there were three adjudicatory units: The Regional Director, the Bureau of Labor Relations and the Labor
Arbiter. It became necessary to clarify and consolidate all governing provisions on jurisdiction into one
document.[2]On April 23, 1976, MOLE Policy Instructions No. 6 was issued, and provides in part (on labor
standards cases) as follows:
"POLICY INSTRUCTIONS NO. 6
TO: All Concerned
SUBJECT: DISTRIBUTION OF JURISDICTION OVER LABOR CASES
"xxx xxx xxx
"1. The following cases are under the exclusive original jurisdictionof the Regional Director.
a) Labor standards case arising from violations of labor standard laws discovered in the course of inspection
or complaints where employer-employee relations still exist;
"xxx xxx xxx.
"2. The following cases are under the exclusive original jurisdictionof the Conciliation Section of the
Regional Office:
a) Labor standards cases where employer-employee relations no longer exist;
"xxx xxx xxx.
"6. The following cases are certifiableto the Labor Arbiters:
a) Cases not settled by the Conciliation Sectionof the Regional Office, namely:
1) labor standard cases where employer-employee relations no longer exist;
x x x." (Italics supplied)
MOLE Policy Instructions No. 7 (undated) was likewise subsequently issued, enunciating the rationale for,
and the scope of, the enforcement power of the Regional Director, the first and second paragraphs of which
provide as follows:
"POLICY INSTRUCTIONS NO. 7
TO: All-Regional Directors
SUBJECT: LABOR STANDARDS CASES

Under PD 850, labor standards cases have beentaken from the arbitration system and placed under the
enforcement system, except where a) questions of law are involved as determined by the Regional Director,
b) the amount involved exceeds P100,000.00 or over 40% of the equity of the employer, whichever is lower,
c) the case requires evidentiary matters not disclosed or verified in the normal course of inspection, or d)
there is no more employer-employee relationship.
The purpose is clear: to assure the worker the rights and benefits due to him under labor standards laws
without having to go through arbitration. The worker need not litigate to get what legally belongs to him.
The whole enforcement machinery of the Department of Labor exists to insure its expeditious delivery to
him free of charge." (Italics supplied)

Under the foregoing, a complaining employee who was denied his rights and benefits due him under labor
standards law need not litigate. The Regional Director, by virtue of his enforcement power, assured
"expeditious delivery to him of his rights and benefits free of charge," provided of course, he was still in the
employ of the firm.

After PD 850, Article 216 underwent a series of amendments (aside from being re-numbered as Article 217)
and with it a corresponding change in the jurisdiction of, and supervision over, the Labor Arbiters:
1. PD 1367(5-1-78) — gave Labor Arbiters exclusive jurisdiction over unresolvedissues in collective
bargaining, etc., and those cases arising from employer-employee relations duly indorsedby the Regional
Directors. (It also removed his jurisdiction over moral or other damages) In other words, the Labor Arbiter
entertained cases certifiedto him. (Article 228, 1978 Labor Code.)
2. PD 1391(5-29-78) — all regional units of the National Labor Relations Commission (NLRC) were
integrated into the Regional Offices Proper of the Ministry of Labor; effectively transferring direct
administrative control and supervision over the Arbitration Branch to the Director of the Regional Office of
the Ministry of Labor. "Conciliable cases" which were thus previously under the jurisdiction of the defunct
Conciliation Section of the Regional Office for purposes of conciliation or amicable settlement, became
immediately assignable to the Arbitration Branch for joint conciliation and compulsory arbitration. In
addition, the Labor Arbiter had jurisdiction even over termination and labor-standards cases that may be
assignedto them for compulsory arbitration by the Director of the Regional Office. PD 1391 merged
conciliation and compulsory arbitration functions in the person of the Labor Arbiter. The procedure
governing the disposition of cases at the Arbitration Branch paralleled those in the Special Task Force and
Field Services Division, with one major exception: the Labor Arbiter exercised full and untrammelled
authority in the disposition of the case, particularly in the substantive aspect, his decisions and orders
subject to review only on appeal to the NLRC.[3]

3. MOLE Policy Instructions No. 37 — Because of the seemingly overlapping functions as a result of PD
1391, MOLE Policy Instructions No. 37 was issued on October 7, 1978, and provided in part:

"POLICY INSTRUCTIONS NO. 37

TO: All Concerned
SUBJECT: ASSIGNMENT OF CASES TO LABOR ARBITERS
Pursuant to the provisions of Presidential Decree No. 1391 and to insure speedy disposition of labor cases,
the following guidelines are hereby established for the information and guidance of all concerned.
1. Conciliable Cases.
Cases which are conciliable per se, i.e., (a) labor standards cases where employer-employee relationship no
longer exists; (b) cases involving deadlock in collective bargaining, except those falling under P.D. 823, as
amended; (c) unfair labor practice cases; and (d) overseas employment cases, except those involving
overseas seamen, shall be assigned by the Regional Director to the Labor Arbiter for conciliation and
arbitration without coursing them through the conciliation section of the Regional Office.

2. Labor Standards Cases.

Cases involving violation of labor standards laws where employer-employee relationship still existsshall be
assigned to the Labor Arbiters where:
a) intricate questions of law are involved; or
b) evidentiary matters not disclosed or verified in the normal course of inspection by labor regulations
officers are required for their proper disposition.

3. Disposition of Cases.

When a case is assigned to a Labor Arbiter, all issues raised therein shall be resolved by him including those
which arc originally cognizable by the Regional Director to avoid multiplicity of proceedings. In other
words, the whole case, and not merely issues involved therein, shall be assigned to and resolved by him.
x x x." (Italics supplied)
4. PD 1691(5-1-80) — original and exclusive jurisdiction over unresolvedissues in collective bargaining and
money claims, which includesmoral or other damages.

Despite the original and exclusive jurisdiction of labor arbiters over money claims, however, the Regional
Director nonetheless retained his enforcement power, and remained empowered to adjudicate uncontested
money claims.

5. BP 130(8-21-81) — strengthened voluntary arbitration. The decree also returned the Labor Arbiters as
part of the NLRC, operating as Arbitration Branch thereof.
6. BP 227(6-1 -82) — original and exclusive jurisdiction over questions involving legality of strikes and
lock-outs.

The present petition questions the authority of the Regional Director to issue the Order, dated August 4,
3986, on the basis of his visitorial and enforcement powers under Article 128 (formerly Article 127) of the
present Labor Code. It is contended that based on the rulings in the Ong vs. Parel(supra) and the Zambales
Base Metals, Inc. vs. The Minister of Labor(supra) cases, a Regional Director is precluded from adjudicating
money claims on the ground that this is an exclusive function of the Labor Arbiter under Article 217 of the
present Code.
On August 4, 1986, when the order was issued, Article 128(b)[4]read as follows:
"(b) The Minister of Labor or his duly authorized representatives shall have the power to order and
administer, after due notice and hearing, compliance with the labor standards provisions of this Code based
on the findings of labor regulation officers or industrial safety engineers made in the course of inspection,
and to issue writs of execution to the appropriate authority for the enforcement of their order, except in
cases where the employer contests the findingsof the labor regulations officer and raises issues which cannot
be resolved without considering evidentiary matters that are not verifiable in the normal course of
inspection." (Italics supplied)
On the other hand, Article 217 of the Labor Code as amended by P.D. 1691, effective May 1,1980; Batas
Pambansa Blg. 130, effective August 21, 1981; and Batas Pambansa Blg. 227, effective June 1, 1982, inter
alia, provides:"ART. 217. Jurisdiction of Labor Arbiters and the Commission. — (a) The Labor Arbiters
shall have the original and exclusivejurisdiction to hear and decide within thirty (30) working days after
submission of the case by the parties for decision, the following cases involving all workers, whether
agricultural or non-agricultural:
"1. Unfair labor practice cases;

"2. Those that workers may file involving wages, hours of work and other terms and conditions of
employment;

"3. All money claims of workers, including those based on non¬payment or underpayment of wages,
overtime compensation, separation pay and other benefits provided by law or appropriate agreement, except
claims for employees' compensation, social security, medicare and maternity benefits;

"4. Cases involving household services; and

"5. Cases arising from any violation of Article 265 of this Code, including questions involving the legality of
strikes and lockouts." (Italics supplied)
The Ong and Zambales cases involved workers who were still connected with the company. However, in
the Ongcase, the employer disputed the adequacy of the evidentiary foundation (employees' affidavits) of
the findings of the labor standards inspectors while in the Zambalescase, the money claims which arose
from alleged violations of labor standards provisions were not discovered in the course of normal
inspection. Thus, the provisions of MOLE Policy Instructions Nos. 6, (Distribution of Jurisdiction Over
Labor Cases) and 37 (Assignment of Cases to Labor Arbiters) giving Regional Directors adjudicatory
powers over uncontested money claims discovered in the course of normal inspection, provided an
employer-employee relationship still exists, are inapplicable.
In the present case, petitioner admitted the charge of underpayment of wages to workers still in its employ;
in fact, it pleaded for time to raise funds to satisfy its obligation. There was thus no contest against the
findingsof the labor inspectors.
Barely less than a month after the promulgation on November 26, 1986 of the Zambales Base Metals case,
Executive Order No. 111 was issued on December 24, 1986,[5]amending Article 128(b) of the Labor Code,
to read as follows.
"(b) THE PROVISIONS OF ARTICLE 217 OF THIS CODE TO THE CONTRARY
NOTWITHSTANDING AND IN CASES WHERE THE RELATIONSHIP OF EMPLOYER-
EMPLOYEE STILL EXISTS, the Minister of Labor and Employment or his duly authorized
representatives shall have the power to order and administer, after due notice and hearing, compliance with
the labor standards provisions of this Code AND OTHER LABOR LEGISLATION based on the findings
of labor regulation officers or industrial safety engineers made in the course of inspection, and to issue writs
of execution to the appropriate authority for the enforcement of their orders, except in cases where the
employer contests the findings of the labor regulation officer and raises issues which cannot be resolved
without considering evidentiary matters that are not verifiable in the normal course of inspection." (Italics
supplied)
As seen from the foregoing, EO 111 authorizes a Regional Director to order compliance by an employer
with labor standards provisions of the Labor Code and other legislation. It is Our considered opinion
however, that the inclusion of the phrase, "The provisions of Article 217 of this Code to the contrary
notwithstanding and in cases where the relationship of employer-employee still exists "x x x in Article
128(b), as amended, above-cited, merely confirms/reiteratesthe enforcement/adjudication authority of the
Regional Director over uncontested money claims in cases where an employer-employee relationship still
exists.[6]

Viewed in the light of PD 850 and read in coordination with MOLE Policy Instructions Nos. 6, 7 and 37, it
is clear that it has always been the intention of our labor authorities to provide our workers immediate
access (when still feasible, as where an employer-employee relationship still exists) to their rights and
benefits, without being inconvenienced by arbitration/litigation processes that prove to be not only nerve-
wracking, but financially burdensome in the long run.

Note further the second paragraph of Policy Instructions No. 7 indicating that the transfer of labor
standards cases from the arbitration system to the enforcement system is
"xxx to assure the workers the rights and benefits due to him under labor standard laws, without having to
go through arbitration, xxx"

so that

"xxx the workers would not litigate to get what legally belongs to him xxx ensuring delivery xxx free of
charge."

Social justice legislation, to be truly meaningful and rewarding to our workers, must not be hampered in its
application by long-winded arbitration and litigation. Rights must be asserted and benefits received with the
least inconvenience. Labor laws are meant to promote, not defeat, social justice.

This view is in consonance with the present "Rules on the Disposition of Labor Standard Cases in the
Regional Offices"[7]issued by the Secretary of Labor, Franklin M. Drilon on September 16, 1987.

Thus, Sections 2 and 3 of Rule II on "Money Claims Arising from Complaint Routine Inspection," provide
as follows:

"Section 2. Complaint inspection. — All such complaints shall immediately be forwarded to the Regional
Director who shall refer the case to the appropriate unit in the Regional Office for assignment to a Labor
Standards and Welfare Officer (LSWO) for field inspection. When the field inspection does not produce the
desired results, the Regional Director shall summon the parties for summary investigation to expedite the
disposition of the case, x x x

"Section 3. Complaints where no employer-employee relationship actually exists. — Where employer-

employee relationship no longer existsby reason of the fact that it has already been severed, claims for
payment of monetary benefits fall within the exclusive and original jurisdiction of the labor arbiters, x x x"
(Italics supplied)
Likewise, it is also clear that the limitation embodied in MOLE Policy Instructions No. 7 to amounts not
exceeding P100,000.00 has been dispensed with, in view of the following provisions of pars, (b) and (c),
Section 7 on "Restitution," the same Rules, thus:

"xxx xxx xxx

"(b) Plant-level restitutions may be effected for money claims not exceeding Fifty Thousand (P50,000.00).
xxx.

"(c) Restitutions in excess of the aforementioned amount shall be effected at the Regional Office or at the
worksite subject to the prior approval of the Regional Director."

which indicate the intention to empower the Regional Director to award money claims in excessof
P100,000.00; providedof course the employer does not contest the findings made, based on the provisions
of Section 8 thereof:

"Section 8. Compromise agreement. —Should the parties arrive at an agreement as to the whole or part of
the dispute, said agreement shall be reduced in writing and signed by the parties in the presence of the
Regional Director or his duly authorized representative."

E.O. No. 111 was issued on December 24, 1986 or three (3) months after the promulgation of the Secretary
of Labor's decision upholding private respondents' salary differentials and ECOLAs on September 24,1986.
The amendment of the visitorial and enforcement powers of the Regional Director (Article 128-b) by said
E.O. 111 reflects the intention enunciated in Policy Instructions Nos. 6 and 37 to empower the Regional
Directors to resolve uncontested money claims in cases where an employer-employee relationship still
exists. This intention must be given weight and entitled to great respect. As held in Progressive Workers'
Union, et al. vs. F.P. Aguas, et al., G.R. No. 59711-12, May 29, 1985, 150 SCRA 429:

"x x x The interpretation by officers of laws which are entrusted to their administration is entitled to great
respect. We see no reason to detract from this rudimentary rule in administrative law, particularly when later
events have proved said interpretation to be in accord with the legislative intent, x x x"
The proceedings before the Regional Director must, perforce, be upheld on the basis of Article 128(b) as
amended by E.O. No. 111, dated December 24, 1986, this executive order "to be considered in the nature
of a curative statute with retrospective application." (Progressive Workers' Union, et al. vs. Hon. FP Aguas,
et al.(supra); M. Garcia vs. Judge A. Martinez, et al., G.R. No. L-47629, May 28, 1979, 90 SCRA 331).

We now come to the question of whether or not the Regional Director erred in extending the award to all
hospital employees. We answer in the affirmative.

The Regional Director correctly applied the award with respect to those employees who signedthe
complaint, as well as those who did not signthe complaint, but were still connected with the hospital at the
time the complaint was filed. (See Order, p. 33 dated August 4, 1986 of the Regional Director, Pedrito de
Susi, p. 33, Rollo).

The justification for the award to this group of employees who were not signatories to the complaint is that
the visitorial and enforcement powers given to the Secretary of Labor is relevant to, and exercisable over
establishments, not over the individual members/employees, because what is sought to be achieved by its
exercise is the observance of, and/or compliance by, such firm/establishment with the labor standards
regulations. Necessarily, in case of an award resulting from a violation of labor legislation by such
establishment, the entire members/employees should benefit therefrom. As aptly stated by then Minister of
Labor Augusto S. Sanchez:

"x x x. It would be highly derogatory to the rights of the workers, if after categorically finding the
respondent hospital guilty of underpayment of wages and ECOLAs, we limit the award to only those who
signed the complaint to the exclusion of the majority of the workers who are similarly situated. Indeed, this
would be not only render the enforcement power of the Minister of Labor and Employment nugatory, but
would be the pinnacle of injustice considering that it would not only discriminate but also deprive them of
legislated benefits.

"xxx."(PP. 38-39,Rollo)

This view is further bolstered by the provisions of Sec. 6, Rule II of the "Rules on the Disposition of Labor
Standards cases in the Regional Offices" (supra) presently enforced, viz:
"SECTION 6. Coverage of complaint inspection. — A complaint inspection shall not be limited to the
specific allegations or violations raised by the complainants/workers but shall be a thorough inquiry into
and verification of the compliance by employer with existing labor standards and shall cover all workers
similarly situated." (Italics supplied)

However, there is no legal justification for the award in favour of those employees who were no longer
connectedwith the hospital at the time the complaint was filed, having resigned therefrom in 1984, viz:

1. Jean (Joan) Venzon (See Order, p. 33, Rollo)

2. RosarioPaclijan
3. AdelaPeralta
4. MauricioNagales
5. Consesa Bautista
6. Teresita Agcopra
7. Felix Monleon
8. Teresita Salvador
9. Edgar Cataluna; and
10. Raymond Manija (p. 7, Rollo)

The enforcement power of the Regional Director cannot legally be upheld in cases of separated employees.
Article 129 of the Labor Code, cited by petitioner (p. 54, Rollo) is not applicable as said article is in aid of
the enforcement powerof the Regional Director; hence, not applicable where the employee seeking to be
paid underpayment of wages is already separated from the service. His claim is purely a money claim that
has to be the subject of arbitration proceedings and therefore within the original and exclusive jurisdiction
of the Labor Arbiter.

Petitioner has likewise questioned the order dated August 4, 1986 of the Regional Director in that it does
not clearly and distinctly state the facts and the law on which the award is based.

We invite attention to the Minister of Labor's ruling thereon, as follows:

'Finally, the respondent hospital assails the order under appeal as null and void because it does not
clearly and distinctly state the tacts and the law on which the awards were based. Contrary to the pretensions
of the respondent hospital, we have carefully reviewed the order on appeal and we found that the same
contains a brief statement of the (a) facts of the case; (b) issues involved; (c) applicable laws; (d) conclusions
and the reasons therefor; (e) specific remedy granted (amount awarded)." (p. 40, Rollo)

ACCORDINGLY, this petition should be dismissed, as it is hereby DISMISSED, as regards all persons still
employed in the Hospital at the time of the filing of the complaint, but GRANTEDas regards those
employees no longer employed at that time.

SO ORDERED.
 Supreme Court of the Philippines

70 Phil. 726
G.R. No. 47800, December 02, 1940 Commented [a4]: Maximo Calalang brought a petition for writ
of prohibition against Williams, in his capacity as the Chairman of
MAXIMO CALALANG, PETITIONER, VS. A. D. WILLIAMS, ET AL., RESPONDENTS. the National Traffic Commission.

CA 548 mandates the Dir. Of Public Works, with the approval of the
DECISION Sec. of Public Works and Communications, to promulgate rules and
regulations to control and regulate the use of and traffic on such
roads and streets to promote safe transit upon, and avoid
LAUREL, J.: obstructions on, roads and streets designated as national roads.

Maximo Calalang, in his capacity as a private citizen and as a taxpayer of Manila, brought before this court Resolution: adopted the resolution prohibiting the passing of
this petition for a writ of prohibition, against the respondents, A. D. Williams, as Chairman of the National animal-drawn vehicles in certain streets in Manila.

Traffic Commission; Vicente Fragante, as Director of Public Works; Sergio Bayan, as Acting Secretary of ISSUE: won the rules and regulations complained of infringe upon the
Public Works and Communications; Eulogio Rodriguez, as Mayor of the City of Manila; and Juan constitutional precept regarding the promotion of social justice to
insure the well-bring and economic security of all the people.
Dominguez, as Acting Chief of Police of Manila.
HELD: no. Social justice is "neither communism, nor despotism, nor
atomism, nor anarchy," but the humanization of laws and the
It is alleged in the petition that the National Traffic Commission, in its resolution of July 17, 1940, resolved equalization of social and economic forces by the State so that justice
to recommend to the Director of Public Works and to the Secretary of Public Works and Communications in its rational and objectively secular conception may at least be
approximated. - principle of salus populi est suprema lex/the greatest good
that animal-drawn vehicles be prohibited from passing along Rosario Street extending from Plaza Calderon for the greatest number.
de la Barca to Dasmarinas Street, from 7:30 a. m. to 12:30 p. m. and from 1:30 p. m. to 5:30 p. m.; and along
Rizal Avenue extending from the railroad crossing at Antipolo Street to' Echague Street, from 7 a. m. to 11
p.m., for a period of one year from the date of the opening of the Colgante Bridge to traffic; that the
Chairman of the National Traffic Commission, on July 18, 1940, recommended to the Director of Public
Works the adoption of the measure proposed in the resolution aforementioned, in pursuance of the
provisions or Commonwealth Act No. 548 which authorizes said Director of Public Works, with the
approval of the Secretary of Public Works and Communications, to promulgate rules and regulations to
regulate and control the use of and traffic on national roads fiat on August 2, 1940, the Director of Public
Works, in his first indorsement to the Secretary of Public Works and Communications, recommended to the
latter the approval of the recommendation made by the Chairman of the National Traffic Commission as
aforesaid, with the modification that the closing of Rizal Avenue to traffic of animal-drawn vehicles be
limited to the portion thereof extending from the railroad crossing at Antipolo Street to Azcarraga Street;
that on August 10, 1940, the Secretary of Public Works and Communications, in his second indorsement
addressed to the Director of Public Works, approved the recommendation of the latter that Rosario Street
and Rizal Avenue be closed to traffic of animal-drawn vehicles, between the points and during the hours as
above indicated, for a period of one year from the date of the opening of the Colgante Bridge to traffic; that
the Mayor of Manila and the Acting Chief of Police of Manila have enforced and caused to be enforced the
rules and regulations thus adopted; that as a consequence of such enforcement, all animal-drawn vehicles are
not now 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.

It is contended by the petitioner that Commonwealth Act No. 548 by which the Director of Public Works,
with the approval of the Secretary of Public Works and Communications, is authorized to promulgate rules
and regulations for the regulation and control of the use of and traffic on national roads and streets is
unconstitutional because it constitutes an undue delegation of legislative power. This contention is
untenable. As was observed by this court in Rubi vs. Provincial Board of Mindoro (39 Phil, 660, 700), "The
rule has nowhere been better stated than in the early Ohio case decided by Judge Ranney, and since
followed in a multitude of cases, namely: 'The true distinction therefore is between the delegation of power
to make the law, which necessarily involves a discretion as to what it shall be, and conferring an authority or
discretion as to its execution, to be exercised under and in pursuance of the law. The first cannot be done;
to the latter no valid objection can be made.' (Cincinnati, W. & Z. R. Co. vs. Comm'rs. Clinton County, 1
Ohio St., 88.) Discretion, as held by Chief Justice Marshall in Wayman vs. Southard (10 Wheat., 1) may be
committed by the Legislature to an executive department or official. The Legislature may make decisions of
executive departments or subordinate officials thereof, to whom it has committed the execution of certain
acts, final on questions of fact. (U. S. vs. Kinkead, 248 Fed., 141.) The growing tendency in the decisions is
to give prominence to the 'necessity' of the case."

Section 1 of Commonwealth Act No. 548 reads as follows:

"Section 1. To promote safe transit upon, and avoid obstructions on, roads and streets designated as
national roads by acts of the National Assembly or by executive orders of the President of the Philippines,
the Director of Public Works, with the approval of the Secretary of Public Works and Communications,
shall promulgate the necessary rules and regulations to regulate and control the use of and traffic on such
roads and streets. Such rules and regulations, with the approval of the President, may contain provisions
controlling or regulating the construction of buildings or other structures within a reasonable distance from
along the national roads. Such roads may be temporarily closed to any or all classes of traffic by the Director
of Public Works and his duly authorized representatives whenever the condition of the road or the traffic
thereon makes such action necessary or advisable in the public convenience and interest, or for a specified
period, with the approval of the Secretary of Public Works and Communications."
The above provisions of law do not confer legislative pOwer upon the Director of Public Works and the
Secretary of Public Works and Communications. The authority therein conferred upon them and under
which they promulgated the rules and regulations now complained of is not to determine what public policy
demands but merely to carry out the legislative policy laid down by the National Assembly in said Act, to
wit, "to promote safe transit upon and avoid obstructions on, roads and streets designated as national roads
by acts of the National Assembly or by executive orders of the President of the Philippines" and to close
them temporarily to any or all classes of traffic "whenever the condition of the road or the trafh'c makes
such action necessary or advisable in the public convenience and interest."-/ The delegated power, if at all,
therefore, is not the determination of what the law shall be, but merely the ascertainment of the facts and
circumstances upon which the application of said law is to be predicated. To promulgate rules and
regulations on the use of national roads and to determine when and how long a national road should be
closed to traffic, in view of the condition of the road or the traffic thereon and the requirements of public
convenience and interest, is an administrative function which cannot be directly discharged by the National
Assembly. It must depend on the discretion of some other government official to whom is confided the
duty of determining whether the proper occasion exists for executing the law. But it cannot be said that the
exercise of such discretion is the making of the law. As was said in Locke's Appeal (72 Pa. 491) : "To assert
that a law is less than a law, because it is made to depend on a future event or act, is to rob the Legislature
of the power to act wisely for the public welfare whenever a law is passed relating to a state of affairs not yet
developed, or to things future and impossible to fully know." The proper distinction the court said was this:
"The Legislature cannot delegate its power to make the law; but it can make a law to delegate a power to
determine some fact or state of things upon which the law makes, or intends to make, its own action
depend. To deny this would be to stop the wheels of government. There are many things upon which wise
and useful legislation must depend which cannot be known to the law-making power, and, must, therefore,
be a subject of inquiry and determination outside of the halls of legislation." (Field v. Clark, 143 U. S. 649,
694; 36 L. Ed. 294.)

In the case of People vs. Rosenthal and Osmeiia, G. it. Nos. 46076 and 46077, promulgated June 12, 1939,
and in Pangasinan Transportation vs. The Public Service Commission, G. R. No. 47065, promulgated June
26, 1940, this Court had occasion to observe that the principle of separation of powers has been made to
adapt itself to the complexities of modern governments, giving rise to the adoption, within certain limits, of
the principle of "subordinate legislation," not only in the United States and England but in practically all
modern governments. Accordingly, with the growing complexity of modern life, the multiplication of the
subjects of governmental regulations, and the increased difficulty of administering the laws, the rigidity of
the theory of separation of governmental powers has, to a large extent, been relaxed by permitting the
delegation of greater powers by the legislative and vesting a larger amount of discretion in administrative
and executive officials, not only in the execution of the laws, but also in the promulgation of certain rules
and regulations calculated to promote public interest.

The petitioner further contends that the rules and regulations promulgated by the respondents pursuant to
the provisions of Commonwealth Act No. 548 constitute an unlawful interference with legitimate business
or trade and abridge the right to personal liberty and freedom of locomotion. Commonwealth Act No. 548
was passed by the National Assembly in the exercise of the paramount police power of the state.

Said Act, by virtue of which the rules and regulations icomplained of were promulgated, aims to promote
safe 'transit upon_and avoid obstructions on national roads, in the interest and convenience of the public.
In enacting said law, therefore, the National Assembly was prompted by considerations of public
convenience and welfare. It was inspired by a desire to relieve congestion of traffic. which is, to say the least,
a menace to public safety. Public welfare, then, lies at_ the bottom of the enactment of 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 subjected to all kinds of restraints and burdens, in
order to secure the general comfort, health, and prosperity.,piJlje_state (U. S. vs. Gomez Jesus, 31 Phil.,
218). To this fundamental aim of our Government the rights of the individual are subordinated. Liberty is a
blessing without which life is a misery, but liberty should not be made to prevail over authority because then
society will fall into anarchy. Neither should authority be made to prevail over liberty because then the
individual will fall into slavery. The citizen should achieve the required balance of liberty and authority in his
mind through education and personal discipline, so that there may be established the resultant equilibrium,
which means peace and order and happiness for all. The moment greater authority is conferred upon the
government, logically so much is withdrawn from the residuum of liberty which resides in the people. The
paradox lies in the fact that the apparent curtailment of liberty is precisely the very means of insuring its
preservation.

The scope of police power keeps expanding as civilization advances. As was said in the case of Dobbins vs.
Los Angeles (195 U. S. 223, 238; 49 L. ed. 169), "the right to exercise the police power is a continuing one,
and a business lawful today may in the future, because of the changed situation, the growth of population or
other causes, become a menace to the public health and welfare, and be required to yield to the public
good." And in People vs. Pomar (46 Phil., 440), it was observed that "advancing civilization is bringing
within the police power of the state today things which were not thought of as being within such power
yesterday. The development of civilization, the rapidly increasing population, the growth of public opinion,
with an increasing desire on the part of the masses and of the government to look after and care for the
interests of the individuals of the state, have brought within the police power many questions for regulation
which formerly were not so considered."
The petitioner finally avers that the rules and regulations complained of infringe upon the constitutional
precept regarding the promotion of social justice to insure the well-bring and economic security of all the
people. The promotion of social justice, however, is to be achieved not through a mistaken sympathy
towards any given group. 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 ill 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 rowers underlying
the existence of all governments on th$ time-honored principle of salus populi est suprema lex.

Social justice, therefore, 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 the health, comfort, and quiet of all persons, and of bringing about "the
greatest good to the greatest number."

In view of the foregoing, the writ of prohibition prayed for is hereby denied, with costs against the
petitioner. So ordered.

Avanceña, C.J., Imperial, Diaz, and Horrilleno, JJ., concur.

Writ denied.

Copyright 2016 - Batas.org

 Supreme Court of the Philippines

246 Phil. 287

SECOND DIVISION
G.R. No. 68147, June 30, 1988
AMADA RANCE, MERCEDES LACUESTA, MELBA GUTIERREZ, ESTER FELONGCO,
CATALINO ARAGONES, CONSOLACION DE LA ROSA, AMANCIA GAY, EDUARDO
MENDOZA, ET AL., PETITIONERS, VS. THE NATIONAL LABOR RELATIONS
COMMISSION, POLYBAG MANUFACTURING CORPORATION, VIRGINIA MALLARI,
JOHNNY LEE, ROMAS VILLAMIN, POLYBAG WORKERS UNION, PONCIANO
FERNANDEZ, AND ANTONIO ANTIQUERA, RESPONDENTS.

DECISION
PARAS, J.:
A review of the records shows that a Collective Bargaining Agreement was entered into on April 30, 1981
by and between respondents Polybag Manufacturing Corporation and Polybag Workers Union which
provides among others:
"ARTICLE V

UNION SECURITY

Any employee within the bargaining unit who is a member of the union at the time of the effectivity of this
agreement or becomes a member of the UNION thereafter, shall during the term thereof or any extension,
continue to be a member in good standing of the UNION as a condition of continued employment in the
COMPANY.

Any employee hired during the effectivity of this agreement shall, within 30 days after becoming regular join
the UNION and continue to be a member in good standing thereof as a condition of continued
employment in the COMPANY.

On the basis of a board resolution of the UNION, the COMPANY shall dismiss from the service any
member of the UNION who loses his membership in good standing either by resignation therefrom or
expulsion therefrom for any of the following causes:

1. Disloyalty to the UNION;

2. Commission of acts inimical to the interest of the UNION;

3. Failure and refusal to pay UNION dues and other assessments;

4. Conviction for any offense or crime; or

5. Organizing and/or joining another labor organization claiming jurisdiction similar to that of the UNION.

Provided, however, That in case expulsion proceedings are instituted against any member of the UNION,
pending such proceedings, the COMPANY, on the basis of a board resolution of the UNION, shall
suspend the member concerned; and provided further, that the UNION, jointly and severally with the
officers and members of the board voting for the dismissal or suspension, shall hold and render the
COMPANY, its executive, owners, and officers free from any and all claims and liabilities." (Rollo, p. 64)
Petitioners herein were among the members of the respondent union who were expelled by the latter for
disloyalty in that they allegedly joined the NAFLU — a large federation. Because of the expulsion, petitioners
were dismissed by respondent Corporation. Petitioners sued for reinstatement and backwages stating their
dismissal was without due process. Losing both in the decisions of the Labor Arbiter and the National
Labor Relations Commission (NLRC), they elevated their cause to the Supreme Court.

Respondent Polybag Workers Union as already stated expelled 125 members on the ground of disloyalty
and acts inimical to the interests of the Union (Resolution No. 84, series of 1982, Rollo, p. 16) based on the
findings and recommendations of the panel of investigators. Both the Labor Arbiter and the NLRC found
the Collective Bargaining Agreement and the "Union Security Clause" valid and considered the termination
of the petitioners justified thereunder, for having committed an act of disloyalty to the Polybag Workers
Union by having affiliated with and having joined the NAFLU, another labor union claiming jurisdiction
similar to the former, while still members of respondent union (Rollo, pp. 45-46).

Among the disputed portions of the NLRC decision is its finding that it has been substantially proven that
the petitioners committed acts of disloyalty to their union as a consequence of the filing by NAFLU for and
in their behalf of the complaint in question (Rollo, p. 46).

Petitioners insist that their expulsion from the Union and consequent dismissal from employment have no
basis whether factual or legal, because they did not in fact affiliate themselves with another Union, the
NAFLU. On the contrary, they claim that there is a connivance between respondents Company and Union
in their illegal dismissal in order to avoid the payment of separation pay by respondent company.

Petitioners' contention that they did not authorize NAFLU to file NLRC-AB Case No. 6-4275-82 for them
is borne out by the records which show that they did not sign the complaint, neither did they sign any
document of membership application with NAFLU (Rollo, p. 323). Significantly, none of private
respondents was able to present any evidence to the contrary except for one employee who admitted having
authorized NAFLU to file the complaint but only for the purpose of questioning the funds of the Union
(Rollo, p. 216).

Placed in proper perspective, the mere act of seeking help from the NAFLU cannot constitute disloyalty as
contemplated in the Collective Bargaining Agreement. At most it was an act of self-preservation of workers
who, driven to desperation found shelter in the NAFLU who took the cudgels for them.

It will be recalled that 460 employees were temporarily laid off; some were laid-off as early as March 22,
1982 although the actual official announcement and notice of the intended shutdown was made only on
May 27, 1982 (Rollo, p. 151). The laid-off employees did not receive any separation pay because as alleged by
respondent company their dismissal was due to serious business reverses suffered by it. The only aid offered
by the company which was offered when the disgruntled employees began to discuss among themselves
their plight, was a 1/2 sack of rice monthly and P50.00 weekly. Most of the employees did not avail
themselves of the aid as those who did were allegedly made to sign blank papers. To aggravate matters,
petitioners complained that their pleas for their union officers to fight for their right to reinstatement, fell
on deaf ears. Their union leaders continued working and were not among those laid-off, which explains the
lack, of positive action on the part of the latter to help or even sympathize with the plight of the members.
All they could offer was a statement "marunong pa kayo sa may-ari ng kumpanya" ("you know more than the
company owners") (Rollo, p. 80). Under the circumstances, petitioners cannot be blamed for seeking help
wherever it could be found.

In fact even assuming that petitioners did authorize NAFLU to file the action for them, it would have been
pointless because NAFLU cannot file an action for members of another union. The proper remedy would
be to drop the union as party to the action and place the names of the employees instead (Lakas v. Marcelo
Enterprises, 118 SCRA 422 [1982]) as what appears to have been done in this case before the Court.

Petitioners claim that the NLRC erred in ruling that the expulsion proceeding conducted by the Union was
in accordance with its by-laws. Respondent Union had notified and summoned herein petitioners to appear
and explain why they should not be expelled from the union for having joined and affiliated with NAFLU.

Petitioners contend that the requisites of due process were not complied with in that, there was no impartial
tribunal or union body vested with authority to conduct the disciplinary proceeding under the union
constitution and by-laws, and, that complainants were not furnished notice of the charge against them, nor
timely notices of the hearings on the same (Rollo, p. 48).

According to the minutes of the special meeting of the Board of Directors of respondent Union held on
September 14, 1982, the Chairman of the Board of Directors showed the members of the board, copies of
the minutes of the investigation proceedings of each individual member, together with a consolidated list of
Union members found guilty as charged and recommended for expulsion as members of the respondent
Union. The Board members examined the minutes and the list (Rollo, p. 219).

It is to be noted, however, that only two (2) of the expelled petitioners appeared before the investigation
panel (Rollo, pp. 203, 235). Most of the petitioners boycotted the investigation proceedings. They alleged
that most of them did not receive the notice of summons from respondent Union because they were in the
provinces. This fact was not disproved by private respondents, who were able to present only a sample copy
of proof of service, Annex "14" (Rollo, p. 215). Petitioners further claim that they had no idea that they were
charged with disloyalty; those who came were not only threatened with persecution but also made to write
the answers to questions as dictated to them by the Union and company representatives. These untoward
incidents prompted petitioners to request for a general investigation with all the petitioners present but their
request was ignored by the panel of investigators (Rollo, pp. 280, 307). Again, these allegations were not
denied by private respondents.

In any event, even if petitioners who were complainants in NLRC-AB Case No. 6-4275-82 appeared in the
supposed investigation proceedings to answer the charge of disloyalty against them, it could not have altered
the fact that the proceedings were violative of the elementary rule of justice and fair play. The Board of
Directors of respondent union would have acted as prosecutor, investigator and judge at the same time. The
proceeding would have been a farce under the circumstances (Lit Employees Association v. Court of Industrial
Relations, 116 SCRA 459 [1982] citing Kapisanan ng Mga Manggagawa sa MRR v. Rafael Hernandez, 20 SCRA
109). The filing of the charge of disloyalty against petitioners was instigated by the Chairman of the Board
of Directors and Acting Union President, Ponciano Fernandez, in the special meeting of the members of
the Board of Directors as convened by the Acting Union President on August 16, 1982 (Rollo, p. 213). The
Panel of Investigators created under the Board's Resolution No. 83, s. 1982 was composed of the Chairman
of the Board, Ponciano Fernandez, and two (2) members of the Board, Samson Yap and Carmen Garcia
(Rollo, p. 214). It is the same Board that expelled its 125 members in its Resolution No. 84, s. of 1982 (Rollo,
p. 219).

All told, it is obvious, that in the absence of any full blown investigation of the expelled members of the
Union by an impartial body, there is no basis for respondent Union's accusations.

It is the policy of the state to assure the right of workers to "security of tenure" (Article XIII, Sec. 3 of the
New Constitution, Section 9, Article II of the 1973 Constitution). The guarantee is an act of social justice.
When a person has no property, his job may possibly be his only possession or means of livelihood.
Therefore, he should be protected against any arbitrary deprivation of his job. Article 280 of the Labor Code
has construed security of tenure as meaning that the employer shall not terminate the services of an
employee except for a just cause or when authorized by the code (Bundoc v. People's Bank and Trust Company,
103 SCRA 599 [1981]). Dismissal is not justified for being arbitrary where the workers were denied due
process (Reyes v. Philippine Duplicators, Inc., 109 SCRA 489 [1981] and a clear denial of due process, or
constitutional right must be safeguarded against at all times, (De Leon v. National Labor Relations Commission,
100 SCRA 691 [1980]). This is especially true in the case at bar where there were 125 workers mostly heads
or sole breadwinners of their respective families.

Time and again, this Court has reminded employers that while the power to dismiss is a normal prerogative
of the employer, the same is not without limitations. The employer is bound to exercise caution in
terminating the services of his employees especially so when it is made upon the request of a labor union
pursuant to the Collective Bargaining Agreement, as in the instant case. Dismissals must not be arbitrary and
capricious. Due process must be observed in dismissing an employee because it affects not only his position
but also his means of livelihood. Employers should, therefore, respect and protect the rights of their
employees, which include the right to labor (Liberty Cotton Mills Workers Union v. Liberty Cotton Mills, Inc., 90
SCRA 393 [1979], Resolution).

In the case at bar, the scandalous haste with which respondent corporation dismissed 125 employees lends
credence to the claim that there was connivance between respondent corporation and respondent Union. It
is evident that private respondents were in bad faith in dismissing petitioners. They, the private respondents,
are guilty of unfair labor practice.

PREMISES CONSIDERED, (1) the decision of respondent National Labor Relations Commission in
NLRC-NCR-11-6881-82 dated April 26, 1984 is REVERSED and SET ASIDE; and (2) respondent
corporation is ordered: (1) to reinstate petitioners to their former positions without reduction in rank,
seniority and salary; (b) to pay petitioners three-year backwages, without any reduction or qualification,
jointly and solidarity with respondent Union; and (c) to pay petitioners exemplary damages of P500.00 each.
Where reinstatement is no longer feasible, respondent corporation and respondent union are solidarily
ordered to pay, considering their length of service their corresponding separation pay and other benefits to
which they are entitled under the law.

SO ORDERED.
Yap, C. J., Melencio-Herrera, Padilla, and Sarmiento, JJ., concur.

Copyright 2016 - Batas.org

 Supreme Court of the Philippines

191 Phil. 182

SECOND DIVISION
G.R. No. L-43835, March 31, 1981
DOMINGO F. BONDOC, PETITIONER, VS. PEOPLE'S BANK AND TRUST COMPANY,
BANK OF THE PHILIPPINE ISLANDS (SURVIVING BANK) AND JACOBO C. CLAVE (AS
PRESIDENTIAL EXECUTIVE ASSISTANT), RESPONDENTS.

DECISION
AQUINO, J.:
This certiorari case involves the issue of whether respondent Presidential Executive Assistant committed a
grave abuse of discretion amounting to lack of jurisdiction in confirming the abolition of petitioner's
position as a department manager in a bank and the payment to him of separation pay instead of reinstating
him with backwages.
Domingo F. Bondoc, who used to be an assistant of Jaime C. Velasquez in the Ayala Securities Corporation
(p. 116, Rollo), joined the People's Bank and Trust Company on October 1, 1966 upon the
recommendation of Velasquez, a director, to Roman Azanza, the bank president (p. 35, Rollo).
He replaced Ariston Estrada, Jr. (p. 37, Rollo). Bondoc was chosen by the bank' s board of directors on
February 21, 1967 as the first manager of the bank's department of economic research and statistics which
was organized in January, 1967 (Exh. 4 and 5).
That department had only four employees: a stenographer and three clerks who were formerly employed in
the comptroller's office, accounting department and office of the corporate secretary (p. 117-118, Rollo).
Every year, from 1968 to 1973, Bondoc was elected to the position of department manager and assistant
vice-president by the bank's board of directors at its annual organizational meeting (Exh. 1-B to 1-F).
On May 15, 1973, Bondoc reported in writing to Manuel Chuidian, a bank director, certain anomalies com-
mitted by the officers of the bank. The Central Bank found that some officers of the bank utilized its funds
for their own interests. Because of those anomalies, the Monetary Board suspended Benito R. Araneta, a
director and vice-president, and reprimanded the other officers involved, namely, Severino Coronation,
Nicanor O. Corpus, Guillermo D. Teodoro, Feldres G. San Pedro, Carlos Villaluz, Godofredo Galindez,
Fernando Macalanlay and Manuel P. Elepaño (pp. 6-8, Rollo).
On September 19, 1973, the board of directors of the People' s Bank, in the course of its deliberation on the
bank' s projected merger with the Bank of the Philippine Islands, resolved to abolish its department of
economic research and statistics which, as already noted, was headed by Bondoc (p. 35, Rollo).
The board regarded the said department as a redundant unit whose functions could be performed by other
departments. The Bank of P. I., like twenty-three other commercial banks, has no such department (p. 117,
Rollo). Bondoc's four subordinates were absorbed by the accounting department.
Bondoc was advised of the abolition of his department in the later part of September, 1973. He asked the
personnel manager to compute his separation pay. Bondoc was told that his separation pay was equivalent
to seventy-five percent of his salary for every year of service. It amounted to P10,481.25. However, he was
indebted to the bank in the sum of P13, 493.33 under its car financing plan. (p. 118, Rollo).
Bondoc allegedly told the personnel manager that he would use his separation pay to liquidate his debt and
issue a check for P3,012.08 to cover the balance of his debt. He requested the personnel manager to
expedite the preparation of the bill of sale for the Toyota car so that he could get the document on the
following day. But he did not show up that day. (p. 118, Rollo).
It is relevant to state that the merger of the two banks was effected in compliance with the Central Bank's
requirement that commercial banks should increase their capital stock to a minimum of one hundred million
pesos through mergers and consolidations or other lawful means. The merger was approved by the
Monetary Board and the Securities and Exchange Commission. The merger agreement was signed in
January, 1974. It was consummated on June 1, 1974.
On November 2, 1973, the People's Bank, pursuant to section 11 of Presidential Decree No. 21 (creating
the ad hoc National Labor Relations Commission), applied with the Secretary of Labor for clearance to
terminate Bondoc's services effective on November 16 (p. 112, Rollo).
On that same day, November 2, the bank president, Vicente C. Aquino, formally notified Bondoc of the
termination of his services and of the application for clearance. Bondoc received the notice on November 5
(p. 35, Rollo).
He lost no time in filing with the NLRC his opposition to the termination of his services. He alleged in his
opposition that he was dismissed without cause (p. 114, Rollo).
As all efforts for the amicable settlement of the case were fruitless, it was submitted for compulsory
arbitration.
During the hearing, Bondoc tried to prove that the abolition of his position was a reprisal for his aforemen-
tioned exposure of some anomalies in the bank which resulted in the suspension or reprimand by the
Monetary Board of certain senior officers of the bank headed by Benito R. Araneta, a nephew of J. Antonio
Araneta, the chairman of the board (p. 48, Rollo).
After hearing, the NLRC arbitrator recommended to the Secretary of Labor the denial of the application to
terminate Bondoc' s employment and ordered the People's Bank to reinstate him with backwages from
November 16, 1973 and with allowances and other benefits guaranteed by law and without loss of status
and seniority rights (pp. 42-43, Rollo).
On appeal, the NLRC (Commissioners Castro, Borromeo and Seno) in its decision of January 21, 1975
reversed the decision of the arbitrator, approved the clearance for Bondoc' s dismissal and ordered the
People's Bank to pay him seventy-five percent (75%) of his monthly salary for every year of service in lieu of
the one-half month salary for every year of service fixed in the Termination Pay Law, Republic Act No.
1052, as amended by Republic Act No. 1787 (p. 45, Rollo).
The NLRC adduced as reasons to justify the abolition of Bondoc's position (1) the fact that his position as
manager being confidential in character, the bank had the prerogative to terminate his employment anytime;
(2) Bondoc's department was no longer necessary to the efficient operation of the bank in view of the
merger; (3) the management is not precluded from undertaking a reorganization or making changes to meet
the demands of the present and (4) in case of mergers, departments or positions may be abolished or new
ones created, as the necessity for them requires (p. 44-45, Rollo).
Bondoc appealed to the Secretary of Labor. That high official in his resolution of September 29, 1975 re-
versed the NLRC' s decision on the grounds that the motivation for the termination of Bondoc's services
was not taken into account by the NLRC and that the People' s Bank should not have abolished Bondoc's
department without prior clearance. He denied the application for clearance to dismiss Bondoc. (p. 50,
Rollo).
He ordered the People' s Bank to reinstate Bondoc to his former position or to any substantially equivalent
position with backwages equivalent to his salary for six months, it being understood that the Bank of the P.
I. has assumed all the liabilities and obligations of the People's Bank. The Secretary denied the application
for clearance to dismiss Bondoc, (pp. 48-50, Rollo).
From that resolution, the Bank of the P. I., as successor of the People' s Bank, appealed to the President of
the Philippines.
One of the grounds relied upon in that appeal was that Bondoc was convicted of bigamy, a crime involving
moral turpitude (Criminal Case No. 7185, Manila CFI, Exh. 1). The Bank of the P. I. cited Central Bank Cir-
cular No. 356, which disqualifies a person convicted of a crime involving moral turpitude from becoming an
officer of a bank (pp. 213-4, Rollo).
In a decision dated May 17, 1976, Presidential Executive Assistant Jacobo C. Clave set aside the decisions of
the arbitrator and the Secretary and confirmed in toto the NLRC' s decision (p. 54, Rollo).
The Office of the President held that under the Termination Pay Law an employment without a definite
period may be terminated with or without cause, that the abolition of Bondoc' s position was a necessary
incident of the merger of the two banks and that his services were no longer indispensable to them. Hence,
the clearance for his removal was authorized. (pp. 52-54, Rollo).
The review of the Presidential decision was sought by Bondoc in the petition which he filed in this Court on
May 27, 1976. This is the fifth decision to be rendered in his case.
We hold that under the peculiar or particular facts of this case the termination of Bondoc's employment was
lawful and justified and that no grave abuse of discretion amounting to lack of jurisdiction was committed
by the Presidential Executive Assistant in affirming the NLRC' s decision sustaining the termination of his
employment.
Bondoc was not employed for a fixed period. He held his position of department manager at the pleasure of
the bank' s board of directors. He occupied a managerial position and his stay therein depended on his
retention of the trust and confidence of the management and whether there was any need for his services.
Although some vindictive motivation might have impelled the abolition of his position, yet, it is undeniable
that the bank's board of directors possessed the power to remove him and to determine whether the interest
of the bank justified the existence of his department.
Under the old Termination Pay Law, it was held that in the absence of a contract of employment for a spe-
cific period the employer has the right to dismiss his employees at anytime with or without just cause (De
Dios vs. Bristol Laboratories (Phils.), Inc., L-25530, January 29, 1974, 55 SCRA 349, 358; Jaguar
Transportation Co., Inc. vs. Cornista, L-32959, May 11, 1978, 83 SCRA 77).
It may be noted that under Policy Instructions No. 8 of the Secretary of Labor "the employer is not required
to obtain a previous written clearance to terminate managerial employees in order to enable him to manage
effectively". (See Associated Citizens Bank vs. Ople, L-4896, February 24, 1981.)
The petitioner invokes the policy of the State to assure the right of "workers" to security of tenure (Sec. 9,
Art. II, Constitution).
That guarantee is an act of social justice. When a person has no property, his job may possibly be his only
possession or means of livelihood. Therefore, he should be protected against any arbitrary and unjust
deprivation of his job.
Article 280 of the Labor Code has construed security of tenure as referring to regular employment and as
meaning that "the employer shall not terminate the services of an employee except for a just cause or when
authorized by" the Code.
As already noted above, the facts of this case do not warrant the conclusion that Bondoc's right to security
of tenure was oppressively abridged. He knew all along that his tenure as a department manager rested in
the discretion of the bank's board of directors and that at anytime his services might be dispensed with or
his position might be abolished.
On equitable considerations, we hold that Bondoc should be paid as separation pay his salary and
allowances, if any, for seven months.
WHEREFORE, the decision of respondent Presidential Executive Assistant is affirmed with the
modification that the Bank of the P. I. should pay to the petitioner separation pay equivalent to his salary
and allowances (if any) for seven months. No costs.
SO ORDERED.

Barredo, (Chairman), Concepcion, Jr., Fernandez, and De Castro, JJ., concur.

Abad Santos, J., abroad.

Copyright 2016 - Batas.org

Supreme Court of the Philippines

97 Phil. 200

G.R. No. L-7771-73, May 31, 1955

PHILIPPINE MOVIE PICTURES WORKERS' ASSOCIATION, PETITIONER, VS. PREMIERE PRODUCTIONS,

INC., RESPONDENT.

DECISION

MONTEMAYOR, J.:

With the view taken by the Court of these cases, there is no need of making a long and elaborate
statement,of the facts involved. The petitioner in each of these cases, Philippine Movie Pictures
Workers Association later referred to as the Association, is a labor organization whose members were
employees and laborers of the respondent Premiere Productions, Inc., referred to later as the
Company, a corporation engaged in the production of movie pictures. On October 2, 1951, respondent
company filed a petition with the Court of Industrial Relations (CIR) for permission to lay-off its
personnel working in three of its departments, numbering about 44 on the ground that it was losing in
the operation of its business. Judge Arsenio C. Roldan, presiding judge of the CIR after an ocular
inspection of the company's premises, and after conferring with the personnel he found therein,
granted the petition and the personnel were laid off.
After shutting the studios, the company filed another petition with the CIR for permission or authority
to lease its equipment, studios, and other facilities to Eddie Infante, Braulio Calma and others. The
association objected to the proposed lease on the ground that it was an attempt by the company to
make use of its properties through other persons which would mean disturbance of the status
quowhile the dispute between the association and the company was pending. Then the company filed
a motion to withdraw its petition saying that it was convinced that the lease of its properties was a
mere exercise of its proprietary rights, and that court permission was unnecessary. The motion was
granted. Thereafter, on February 7, 1952, the company transferred some of its equipment to Polo,
Bulacan to be leased and used as in fact they were used by one Artemio Marquez in the filming of the
picture "Bakas Ng Kahapon". For this action of the company the association on February 9, 1952, filed
an urgent petition with the CIR, incidental case No. 598 V-8, for contempt and for injunction on the
ground that the company had no right to remove its equipment from its studios to be leased to
Marquez without court authority. Thereafter, the company again leased its equipment and facilities to
one Efren Reyes for the filming of the picture "Larawan Ng Buhay". The association again filed another
urgent petition, incidental case No. 598 V-10, for contempt and injunction. Again, on March 5, 1952,
the company leased its other sound equipment to one Manuel Vistan for the filming of the picture
"Troubador" and to Artemio Marquez in filming the picture "Boys Town". The association again filed
another petition, incidental case No. 598 V-11, for contempt and injunction.

After the company had answered the three petitions for contempt and injunction, by agreement of the
parties, these three incidental cases were heard jointly. During the hearing held before Presiding Judge
Roldan and in the presence of one Martin Dolorico, a Commissioner of the CIR, the parties entered into
a stipulation of facts and stated therein their respective contention, after which, both parties
submitted the cases for decision without further evidence. This was on October 7, 1952. However, no
decision was immediately rendered because both parties asked for time to enable them to bargain
collectively, the negotiations commencing in January, 1953 and lasting until July of the same year. In
the meantime, on April 18, 1953, the association filed a "Supplemental petition to annul lease
contracts and for contempt of court and for injunction", and on June 14, 1953, the association filed a
"Motion for production of document" under section 1, Rule 21, of the Rules of Court, alleging that the
movie company had in the meantime entered into other contracts of lease, and asking that Dr. Ciriaco
Santiago, president of the movie company or his representative produce before the court the contracts
referred to for the purpose of inspection, copying or photographing thereof, and to set for hearing the
urgent petitions of February 9, 1952 and April 18, 1953 regarding the simulated leases.

Thereafter, Commissioner Martin Dolorico filed his report, which report was approved and completely
adopted by Judge Roldan in his decision rendered on July 29, 1953, wherein he found that the leases of
the equipment, studios and other properties of the movie company to third parties were not simulated
but genuine, and that they were valid; that it was entirely proper for the movie company to lease its
equipment which was lying idle because of the shutting down of its studios so as to make money and
perhaps enable it to rehabilitate itself financially and to reemploy the same personnel who had been
laid off, that the association should not object to these leases because it was the understanding at the
time that they were laid off that in case it was later decided by the court that they had been
improperly made to stop working, they would not only be reinstated but they would also be given
backpay for the entire period of the lay-off. As to the supplemental petition to annul the lease
contracts and for contempt of court and for injunction filed on April 18, 1953 and the motion filed on
June 14th, Judge Roldan heM that they would be heard separately from the incidental cases, for
purposes of expediency. The decision ended by denying the three petitions for injunction and for
contempt of court.

Upon motion for reconsideration by the association and over the opposition of the 'company, the CIR
in bancby resolution dated November 13, 1953, reconsidered the decision aforementioned and set it
aside, as premature, saying that before rendering a final decision, the court should have awaited
further presentation of evidence on the supplemental petition of April 18, 1953, "so that all ingredients
for the proper disposal of the case would have been complete." The resolution was penned by Judge
Jose Bautista and concurred in by Judges Castillo and Yanson. Judge Roldan wrote a dissenting opinion
concurred in by Judge Juan E. Lanting.

The association has now filed these petitions for review by certiorari, not only of the decision of Judge
Rolijan but also of the resolution of the majority of the CIR, to set the same aside, and for the rendition
of another decision holding the leases entered into by the movie company to be illegal and that the
company and its officers and agents be held to have committed contempt of court in entering into
those leases without authority of the CIR.

The majority of the Tribunal believe that it is unnecessary to go into the merits of the present cases,
because the resolution of the majority of the CIR setting aside the decision of Judge Roldan, left the
cases without any decision to appeal from, and that said resolution is in the nature of a mere
interlocutory order, which is not subject to appeal.

In view of the forgoing, these petitions for certiorari are hereby denied, and the case3 are ordered
remanded to the CIR for further proceedings. No costs.

Pablo, Acting C. J., Bengzon, Bautista Angelo, Labrador, Concepcion, and Reyes, J. B. L. JJ., concur.
CONCURRING OPINION

REYES, A., J., concurring:

For a technical reason the majority want these cases remanded to the Court of Industrial Relations "for
further proceeding." To satisfy a rule of procedure I will not object. However, I think the remand
should be, not for "further proceedings", but for the specific purpose of having the Court of Industrial
Relations, sitting in bancand without further proceeding for the taking of evidence, render a decision to
take the place of the one it has set aside, and that court should be so advised. There is need for this
caution, because it appears from the resolution appeared from that the court in bancset aside the
decision of the trial judge for the reason that it was premature, believing "that the trial court should
have waited further presentation of evidence in the aforesaid union's supplemental petition, so that all
ingredients for the proper disposal of the case would have been complete." The court in bancthus
ruled that further evidence should be taken pursuant to the union's supplemental petition. It should be
noted, however, that the union seems ta have already waived presentation of further evidence since it
has petitioned this Court for an order directing the lower court to decide these cases, thus implying
that the cases were being submitted on the evidence already taken. In the circumstances, a decision is
now in order without further proceedings.

Copyright 2016 - Batas.org

 Supreme Court of the Philippines

469 Phil. 496

THIRD DIVISION
G. R. No. 144664, March 15, 2004
ASIAN TRANSMISSION CORPORATION, PETITIONER, VS. THE HON. COURT OF
APPEALS, THIRTEENTH DIVISION, HON. FROILAN M. BACUNGAN AS VOLUNTARY
ARBITRATOR, KISHIN A. LALWANI, UNION, UNION REPRESENTATIVE TO THE
PANEL ARBITRATORS; BISIG NG ASIAN TRANSMISSION LABOR UNION (BATLU);
HON. BIENVENIDO T. LAGUESMA IN HIS CAPACITY AS SECRETARY OF LABOR AND
EMPLOYMENT; AND DIRECTOR CHITA G. CILINDRO IN HER CAPACITY AS
DIRECTOR OF BUREAU OF WORKING CONDITIONS, RESPONDENTS.
CARPIO MORALES, J.:
Petitioner, Asian Transmission Corporation, seeks via petition for certiorari under Rule 65 of the 1995 Rules
of Civil Procedure the nullification of the March 28, 2000 Decision [1] of the Court of Appeals denying its
petition to annul 1) the March 11, 1993 “Explanatory Bulletin” [2] of the Department of Labor and
Employment (DOLE) entitled “Workers’ Entitlement to Holiday Pay on April 9, 1993, Araw ng Kagitingan
and Good Friday”, which bulletin the DOLE reproduced on January 23, 1998, 2) the July 31, 1998
Decision[3] of the Panel of Voluntary Arbitrators ruling that the said explanatory bulletin applied as well to
April 9, 1998, and 3) the September 18, 1998[4] Resolution of the Panel of Voluntary Arbitration denying its
Motion for Reconsideration.
The following facts, as found by the Court of Appeals, are undisputed:
The Department of Labor and Employment (DOLE), through Undersecretary Cresenciano B. Trajano,
issued an Explanatory Bulletin dated March 11, 1993 wherein it clarified, inter alia, that employees are
entitled to 200% of their basic wage on April 9, 1993, whether unworked, which[,] apart from being Good
Friday [and, therefore, a legal holiday], is also Araw ng Kagitingan [which is also a legal holiday]. The bulletin
reads:
“On the correct payment of holiday compensation on April 9, 1993 which apart from being Good Friday is
also Araw ng Kagitingan, i.e., two regular holidays falling on the same day, this Department is of the view that the
covered employees are entitled to at least two hundred percent (200%) of their basic wage even if said
holiday is unworked. The first 100% represents the payment of holiday pay on April 9, 1993 as Good Friday
and the second 100% is the payment of holiday pay for the same date as Araw ng Kagitingan.
Said bulletin was reproduced on January 23, 1998, when April 9, 1998 was both Maundy Thursday and Araw
ng Kagitingan . . .
Despite the explanatory bulletin, petitioner [Asian Transmission Corporation] opted to pay its daily paid employees only
100% of their basic pay on April 9, 1998. Respondent Bisig ng Asian Transmission Labor Union (BATLU) protested.
In accordance with Step 6 of the grievance procedure of the Collective Bargaining Agreement (CBA)
existing between petitioner and BATLU, the controversy was submitted for voluntary arbitration. . . . On
July 31, 1998, the Office of the Voluntary Arbitrator rendered a decision directing petitioner to pay its covered employees
“200% and not just 100% of their regular daily wages for the unworked April 9, 1998 which covers two regular
holidays, namely, Araw ng Kagitignan and Maundy Thursday.” (Emphasis and underscoring supplied)
Subject of interpretation in the case at bar is Article 94 of the Labor Code which reads:
ART. 94. Right to holiday pay. — (a) Every worker shall be paid his regular daily wage during regular holidays,
except in retail and service establishments regularly employing less than ten (10) workers;
(b) The employer may require an employee to work on any holiday but such employee shall be paid a
compensation equivalent to twice his regular rate; and
(c) As used in this Article, “holiday” includes: New Year’s Day, Maundy Thursday, Good Friday, the ninth
of April, the first of May, the twelfth of June, the fourth of July, the thirtieth of November, the twenty-fifth
and thirtieth of December and the day designated by law for holding a general election,
which was amended by Executive Order No. 203 issued on June 30, 1987, such that the regular holidays are
now:
1. New Year’s Day January 1
2. Maundy Thursday Movable Date
3. Good Friday Movable Date
4. Araw ng Kagitingan April 9
(Bataan and Corregidor Day)
5. Labor Day May 1
6. Independence Day June 12
7. National Heroes Day Last Sunday of August
8. Bonifacio Day November 30
9. Christmas Day December 25
10. Rizal Day December 30
In deciding in favor of the Bisig ng Asian Transmission Labor Union (BATLU), the Voluntary Arbitrator
held that Article 94 of the Labor Code provides for holiday pay for every regular holiday, the computation
of which is determined by a legal formula which is not changed by the fact that there are two holidays falling
on one day, like on April 9, 1998 when it was Araw ng Kagitingan and at the same time was Maundy
Thursday; and that that the law, as amended, enumerates ten regular holidays for every year should not be
interpreted as authorizing a reduction to nine the number of paid regular holidays “just because April 9
(Araw ng Kagitingan) in certain years, like 1993 and 1998, is also Holy Friday or Maundy Thursday.”
In the assailed decision, the Court of Appeals upheld the findings of the Voluntary Arbitrator, holding that
the Collective Bargaining Agreement (CBA) between petitioner and BATLU, the law governing the relations
between them, clearly recognizes their intent to consider Araw ng Kagitingan and Maundy Thursday, on
whatever date they may fall in any calendar year, as paid legal holidays during the effectivity of the CBA and
that “[t]here is no condition, qualification or exception for any variance from the clear intent that all
holidays shall be compensated.”[5]
The Court of Appeals further held that “in the absence of an explicit provision in law which provides for [a]
reduction of holiday pay if two holidays happen to fall on the same day, any doubt in the interpretation and
implementation of the Labor Code provisions on holiday pay must be resolved in favor of labor.”
By the present petition, petitioners raise the following issues:
I
WHETHER OR NOT THE RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE
OF DISCRETION IN ERRONEOUSLY INTERPRETING THE TERMS OF THE COLLECTIVE
BARGAINING AGREEMENT BETWEEN THE PARTIES AND SUBSTITUTING ITS OWN
JUDGMENT IN PLACE OF THE AGREEMENTS MADE BY THE PARTIES THEMSELVES
II
WHETHER OR NOT THE RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE
OF DISCRETION IN HOLDING THAT ANY DOUBTS ABOUT THE VALIDITY OF THE
POLICIES ENUNCIATED IN THE EXPLANATORY BULLETIN WAS LAID TO REST BY THE
REISSUANCE OF THE SAID EXPLANATORY BULLETIN
III
WHETHER OR NOT THE RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE
OF DISCRETION IN UPHOLDING THE VALIDITY OF THE EXPLANATORY BULLETIN
EVEN WHILE ADMITTING THAT THE SAID BULLEITN WAS NOT AN EXAMPLE OF A
JUDICIAL, QUASI-JUDICIAL, OR ONE OF THE RULES AND REGULATIONS THAT [Department
of Labor and Employment] DOLE MAY PROMULGATE
IV
WHETHER OR NOT THE SECRETARY OF THE DEPARTMENT OF LABOR AND
EMPLOYMENT (DOLE) BY ISSUING EXPLANATORY BULLETIN DATED MARCH 11, 1993, IN
THE GUISE OF PROVIDING GUIDELINES ON ART. 94 OF THE LABOR CODE, COMMITTED
GRAVE ABUSE OF DISCRETION, AS IT LEGISLATED AND INTERPRETED LEGAL
PROVISIONS IN SUCH A MANNER AS TO CREATE OBLIGATIONS WHERE NONE ARE
INTENDED BY THE LAW
V
WHETHER OR NOT THE RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE
OF DISCRETION IN SUSTAINING THE SECRETARY OF THE DEPARTMENT OF LABOR IN
REITERATING ITS EXPLANATORY BULLETIN DATED MARCH 11, 1993 AND IN ORDERING
THAT THE SAME POLICY OBTAINED FOR APRIL 9, 1998 DESPITE THE RULINGS OF THE
SUPREME COURT TO THE CONTRARY
 VI
WHETHER OR NOT RESPONDENTS’ ACTS WILL DEPRIVE PETITIONER OF PROPERTY
WITHOUT DUE PROCESS BY THE “EXPLANATORY BULLETIN” AS WELL AS EQUAL
PROTECTION OF LAWS
The petition is devoid of merit.
At the outset, it bears noting that instead of assailing the Court of Appeals Decision by petition for review
on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, petitioner lodged the present petition for
certiorari under Rule 65.
[S]ince the Court of Appeals had jurisdiction over the petition under Rule 65, any alleged errors committed
by it in the exercise of its jurisdiction would be errors of judgment which are reviewable by timely appeal
and not by a special civil action of certiorari. If the aggrieved party fails to do so within the reglementary
period, and the decision accordingly becomes final and executory, he cannot avail himself of the writ of
certiorari, his predicament being the effect of his deliberate inaction.
The appeal from a final disposition of the Court of Appeals is a petition for review under Rule 45 and not a
special civil action under Rule 65 of the Rules of Court, now Rule 45 and Rule 65, respectively, of the 1997
Rules of Civil Procedure. Rule 45 is clear that the decisions, final orders or resolutions of the Court of
Appeals in any case, i.e., regardless of the nature of the action or proceeding involved, may be appealed to
this Court by filing a petition for review, which would be but a continuation of the appellate process over
the original case. Under Rule 45 the reglementary period to appeal is fifteen (15) days from notice of
judgment or denial of motion for reconsideration.
xxx xxx xxx
For the writ of certiorari under Rule 65 of the Rules of Court to issue, a petitioner must show that he has no
plain, speedy and adequate remedy in the ordinary course of law against its perceived grievance. A remedy is
considered “plain, speedy and adequate” if it will promptly relieve the petitioner from the injurious effects
of the judgment and the acts of the lower court or agency. In this case, appeal was not only available but
also a speedy and adequate remedy.[6]
The records of the case show that following petitioner’s receipt on August 18, 2000 of a copy of the August
10, 2000 Resolution of the Court of Appeals denying its Motion for Reconsideration, it filed the present
petition for certiorari on September 15, 2000, at which time the Court of Appeals decision had become final
and executory, the 15-day period to appeal it under Rule 45 having expired.
Technicality aside, this Court finds no ground to disturb the assailed decision.
Holiday pay is a legislated benefit enacted as part of the Constitutional imperative that the State shall afford
protection to labor.[7] Its purpose is not merely “to prevent diminution of the monthly income of the
workers on account of work interruptions. In other words, although the worker is forced to take a rest, he
earns what he should earn, that is, his holiday pay.”[8] It is also intended to enable the worker to participate
in the national celebrations held during the days identified as with great historical and cultural significance.
Independence Day (June 12), Araw ng Kagitingan (April 9), National Heroes Day (last Sunday of August),
Bonifacio Day (November 30) and Rizal Day (December 30) were declared national holidays to afford
Filipinos with a recurring opportunity to commemorate the heroism of the Filipino people, promote
national identity, and deepen the spirit of patriotism. Labor Day (May 1) is a day traditionally reserved to
celebrate the contributions of the working class to the development of the nation, while the religious
holidays designated in Executive Order No. 203 allow the worker to celebrate his faith with his family.
As reflected above, Art. 94 of the Labor Code, as amended, affords a worker the enjoyment of ten paid
regular holidays.[9] The provision is mandatory,[10] regardless of whether an employee is paid on a monthly or
daily basis.[11] Unlike a bonus, which is a management prerogative,[12] holiday pay is a statutory benefit
demandable under the law. Since a worker is entitled to the enjoyment of ten paid regular holidays, the fact
that two holidays fall on the same date should not operate to reduce to nine the ten holiday pay benefits a
worker is entitled to receive.
It is elementary, under the rules of statutory construction, that when the language of the law is clear and
unequivocal, the law must be taken to mean exactly what it says.[13] In the case at bar, there is nothing in the
law which provides or indicates that the entitlement to ten days of holiday pay shall be reduced to nine
when two holidays fall on the same day.
Petitioner’s assertion that Wellington v. Trajano[14] has “overruled” the DOLE March 11, 1993 Explanatory
Bulletin does not lie. In Wellington, the issue was whether monthly-paid employees are entitled to an
additional day’s pay if a holiday falls on a Sunday. This Court, in answering the issue in the negative,
observed that in fixing the monthly salary of its employees, Wellington took into account “every working day
of the year including the holidays specified by law and excluding only Sunday.” In the instant case, the issue is
whether daily-paid employees are entitled to be paid for two regular holidays which fall on the same day. [15]
In any event, Art. 4 of the Labor Code provides that all doubts in the implementation and interpretation of
its provisions, including its implementing rules and regulations, shall be resolved in favor of labor. For the
working man’s welfare should be the primordial and paramount consideration. [16]
Moreover, Sec. 11, Rule IV, Book III of the Omnibus Rules to Implement the Labor Code provides that
“Nothing in the law or the rules shall justify an employer in withdrawing or reducing any benefits,
supplements or payments for unworked regular holidays as provided in existing individual or collective
agreement or employer practice or policy.”[17]
From the pertinent provisions of the CBA entered into by the parties, petitioner had obligated itself to pay
for the legal holidays as required by law. Thus, the 1997-1998 CBA incorporates the following provision:
ARTICLE XIV
PAID LEGAL HOLIDAYS
The following legal holidays shall be paid by the COMPANY as required by law:
1. New Year’s Day (January 1st)

2. Holy Thursday (moveable)

3. Good Friday (moveable)

 4. Araw ng Kagitingan (April 9th)

5. Labor Day (May 1st)

6. Independence Day (June 12th)

7. Bonifacio Day [November 30]

8. Christmas Day (December 25th)

9. Rizal Day (December 30th)

10. General Election designated by law, if declared public non-working holiday

11. National Heroes Day (Last Sunday of August)

Only an employee who works on the day immediately preceding or after a regular holiday shall be entitled to
the holiday pay.
A paid legal holiday occurring during the scheduled vacation leave will result in holiday payment in addition
to normal vacation pay but will not entitle the employee to another vacation leave.
Under similar circumstances, the COMPANY will give a day’s wage for November 1st and December 31st
whenever declared a holiday. When required to work on said days, the employee will be paid according to
Art. VI, Sec. 3B hereof.[18]
WHEREFORE, the petition is hereby DISMISSED.
SO ORDERED.
Vitug, (Chairman), Sandoval-Gutierrez, and Corona, JJ., concur.

[1]
Rollo at 39–51.
[2]
Rollo at 37.
[3]
Rollo at 58-70.
[4]
Rollo at 120.
[5]
Rollo at 48.
[6]
San Miguel Corporation v. Court of Appeals, G.R. No. 146775, January 30, 2002, 375 SCRA 311, 315, citing
National Irrigation Administration v. Court of Appeals, G.R. No. 129169, November 17, 1999, 318 SCRA, 263-
264.
[7]
Const., Art. XIII, Sec. 3.
[8]
Vide Jose Rizal College v. NLRC and NATOW, G.R. No. 65482, December 1, 1987.
[9]
Vide Book V, Title I of Pres. Decree No. 1083, “Code of Muslim Personal Laws of the Philippines,”
(February 4, 1977) which recognizes the official Muslim holidays.
[10]
Art. 94 of the Labor Code provides by way of exception retail and service establishments regularly
employing less than ten (10) workers.
[11]
Insular Bank of Asia and America Employees’ Union (IBAAEU) v. Inciong, No. L-52415, October 23, 1984,
132 SCRA 663; Chartered Bank Employees Association v. Ople, No. L-44717, August 28, 1985, 138 SCRA 273;
Mantrade/FMMC Division Employees and Workers Union v. Bacungan, No. L-48437, September 30, 1986, 144
SCRA 510.
[12]
Producers Bank of the Philippines v. NLRC, G.R. No. 100701, March 28, 2001, 355 SCRA 489, 496.
[13]
Insular Bank of Asia and America Employees Union (IBAAEU) v. Inciong, G.R. No. L-52415, October 23,
1984, 132 SCRA 663, 673.
[14]
Wellington Investment and Manufacturing Corporation v. Trajano, G.R. No. 114698, July 3, 1995, 245 SCRA 561.
[15]
Rollo at 49.
[16]
Abella v. NLRC, G.R. No. 71812, July 20, 1987, 152 SCRA 140, 146.
[17]
Vide Oceanic Pharmacal Employees Union v. Inciong, No. L-50568, 94 SCRA 270, 275.
[18]
Rollo at 8.

Copyright 2016 - Batas.org

 Supreme Court of the Philippines

670 Phil. 120

FIRST DIVISION
G.R. No. 161787, July 27, 2011
MASING AND SONS DEVELOPMENT CORPORATION AND CRISPIN CHAN,
PETITIONERS, VS. GREGORIO P. ROGELIO, RESPONDENT.

DECISION
BERSAMIN, J.:
In any controversy between a laborer and his master, doubts reasonably arising from the evidence are
resolved in favor of the laborer.

We re-affirm this principle, as we uphold the decision of the Court of Appeals (CA) that reversed the
uniform finding that there existed no employment relationship between the petitioners, as employers, and
the respondent, as employee, made by the National Labor Relations Commission (NLRC) and the Labor
Arbiter (LA).

Petitioners Masing and Sons Development Corporation (MSDC) and Crispin Chan assail the October 24,
2003 decision, [1] whereby the CA reversed the decision dated January 28, 2000 of the NLRC that affirmed
the decision of the LA (dismissing the claim of the respondent for retirement benefits on the ground that he
had not been employed by the petitioners but by another employer).
Antecedents

On May 19, 1997, respondent Gregorio P. Rogelio (Rogelio) brought against Chan a complaint for
retirement pay pursuant to Republic Act No. 7641, [2] in relation to Article 287 of the Labor Code, holiday
and rest days premium pay, service incentive leave, 13 th month pay, cost of living allowances (COLA),
underpayment of wages, and attorney's fees. On January 20, 1998, Rogelio amended his complaint to
include MSDC as a co-respondent. His version follows.

Rogelio was first employed in 1949 by Pan Phil. Copra Dealer, MSDC's predecessor, which engaged in the
buying and selling of copra in Ibajay, Aklan, with its main office being in Kalibo, Aklan. Masing Chan
owned and managed Pan Phil. Copra Dealer, and the Branch Manager in Ibajay was a certain So Na. In
1965, Masing Chan changed the business name of Pan Phil. Copra Dealer to Yao Mun Tek, and appointed
Jose Conanan Yap Branch Manager in Ibajay. In the 1970s, the business name of Yao Mun Tek was
changed to Aklan Lumber and General Merchandise, and Leon Chan became the Branch Manager in Ibajay.
Finally, in 1984, Masing Chan adopted the business name of Masing and Sons Development Corporation
(MSDC), appointing Wynne or Wayne Lim (Lim) as the Branch Manager in Ibajay. Crispin Chan replaced
his father, Masing Chan, in 1990 as the manager of the entire business.
In all that time, Rogelio worked as a laborer in the Ibajay Branch, along with twelve other employees. In
January 1974, Rogelio was reported for Social Security System (SSS) coverage. After paying contributions to
the SSS for more than 10 years, he became entitled to receive retirement benefits from the SSS. Thus, in
1991, he availed himself of the SSS retirement benefits, and in order to facilitate the grant of such benefits,
he entered into an internal arrangement with Chan and MSDC to the effect that MSDC would issue a
certification of his separation from employment notwithstanding that he would continue working as a
laborer in the Ibajay Branch.

The certification reads as follows: [3]

CRISPIN AMIGO CHAN - COPRA DEALER
IBAJAY, AKLAN

August 10, 1991

CERTIFICATION OF SEPARATION FROM EMPLOYMENT

To whom it may concern:

This is to certify that my employee, GREGORIO P. ROGELIO bearing SSS ID No. 07-0495213-7 who
was first covered effective January, 1974 up to June 30, 1989 inclusive, is now officially separated from my
employ effective the 1st of July, 1989.

Please be guided accordingly.

(SGD.) CRISPIN AMIGO CHAN

Proprietor
SSS ID No. 07-0595800-4

On March 17, 1997, Rogelio was paid his last salary. Lim, then the Ibajay Branch Manager, informed
Rogelio that he was deemed retired as of that date. Chan confirmed to Rogelio that he had already reached
the compulsory retirement age when he went to the main office in Kalibo to verify his status. Rogelio was
then 67 years old.

Considering that Rogelio was supposedly receiving a daily salary of P70.00 until 1997, but did not receive
any 13th month pay, service incentive leave, premium pay for holidays and rest days and COLA, and even
any retirement benefit from MSDC upon his retirement in March 1997, he commenced his claim for such
pay and benefits.

In substantiation, Rogelio submitted the January 19, 1998 affidavits of his co-workers, namely: Domingo
Guevarra, [4] Juanito Palomata, [5] and Ambrosio Señeres, [6] whereby they each declared under oath that
Rogelio had already been working at the Ibajay Branch by the time that MSDC's predecessor had hired them
in the 1950s to work in that branch; and that MSDC and Chan had continuously employed them until their
own retirements, that is, Guevarra in 1994, and Palomata and Señeres in 1997. They thereby corroborated
the history of MSDC and the names of the various Branch Managers as narrated by Rogelio, and confirmed
that like Rogelio, they did not receive any retirement benefits from Chan and MSDC upon their retirement.

In their defense, MSDC and Chan denied having engaged in copra buying in Ibajay, insisting that they did
not ever register in such business in any government agency. They asserted that Lim had not been their
agent or employee, because he had been an independent copra buyer. They averred, however, that Rogelio
was their former employee, hired on January 3, 1977 and retired on June 30, 1989; [7] and that Rogelio was
thereafter employed by Lim starting from July 1, 1989 until the filing of the complaint.

MSDC and Chan submitted the affidavit of Lim, whereby Lim stated that Rogelio was one of his employees
from 1989 until the termination of his services. [8] They also submitted SSS Form R-1A, Lim's SSS Report of
Employee-Members (showing that Rogelio and Palomata were reported as Lim's employees); [9] Lim's
application for registration as copra buyer; [10] Chan's affidavit; [11] and the affidavit of Guevarra [12] and
Señeres, [13] whereby said affiants denied having executed or signed the January 19, 1998 affidavits submitted
by Rogelio.

In his affidavit, Guevarra recanted the statement attributed to him that he had been employed by Chan and
MSDC, and declared that he had been an employee of Lim. Likewise, Guevarra's daughter executed an
affidavit, [14] averring that his father had been an employee of Lim and that his father had not signed the
affidavit dated January 19, 1998.

On April 5, 1999, the LA dismissed the complaint against Chan and MSDC, ruling thus:
From said evidence, it is our considered view that there exists no employer-employee relationship between
the parties effective July 1, 1989 up to the date of the filing of the instant complaint complainant was an
employee of Wynne O. Lim. Hence, his claim for retirement should have been filed against the latter for he
admitted that he was the employer of herein complainant in his sworn statement dated June 9, 1998.

Complainant's claim for retirement benefits against herein respondents under RA No. 7641 has been barred
by prescription considering the fact that it partakes of the nature of a money claim which prescribed after
the lapse of three years after its accrual.

The rest of the claims are also dismissed for the same accrued during complainant's employment with
Wynne O. Lim.

WHEREFORE, PREMISES CONSIDERED, this case is hereby DISMISSED for lack of merit.

SO ORDERED. [15]

Rogelio appealed, but the NLRC affirmed the decision of the LA on January 28, 2000, observing that there
could be no double retirement in the private sector; that with the double retirement, Rogelio would be
thereby enriching himself at the expense of the Government; and that having retired in 1991, Rogelio could
not avail himself of the benefits under Republic Act No. 7641 entitled An Act Amending Article 287 of
Presidential Decree No. 442, As Amended, Otherwise Known as The Labor Code Of The Philippines, By Providing for
Retirement Pay to Qualified Private Sector Employees in the Absence Of Any Retirement Plan in the Establishment, which
took effect only on January 7, 1993. [16]

The NLRC denied Rogelio's motion for reconsideration.

 Ruling of the CA

Rogelio commenced a special civil action for certiorari in the CA, charging the NLRC with grave abuse of
discretion in denying to him the benefits under Republic Act No. 7641, and in rejecting his money claims on
the ground of prescription.

On October 24, 2003, the CA promulgated its decision, [17] holding that Rogelio had substantially established
that he had been an employee of Chan and MSDC, and that the benefits under Republic Act No. 7641 were
apart from the retirement benefits that a qualified employee could claim under the Social Security Law,
conformably with the ruling in Oro Enterprises, Inc. v. NLRC (G.R. No. 110861, November 14, 1994, 238
SCRA 105).

The CA decreed:
WHEREFORE, premises considered, the Decision of the public respondent NLRC is hereby VACATED
and SET ASIDE. This case is remanded to the Labor Arbiter for the proper computation of the retirement
benefits of the petitioner based on Article 287 of the Labor Code, as amended, to be pegged at the
minimum wage prevailing in Ibajay, Aklan as of March 17, 1997, and attorney's fees based on the
same. Without costs.

SO ORDERED.

Chan and MSDC's motion for reconsideration was denied by the CA.
Issues

In this appeal, Chan and MSDC contend that the CA erred: (a) in taking cognizance of Rogelio's petition for
certiorari despite the decision of the NLRC having become final and executory almost two months before the
petition was filed; (b) in concluding that Rogelio had remained their employee from July 6, 1989 up to
March 17, 1997; and (c) in awarding retirement benefits and attorney's fees to Rogelio.
Ruling

The petition for review is barren of merit.

I
Certiorari was timely commenced in the CA

Anent the first error, the Court finds that the CA did not err in taking cognizance of the petition for certiorari
of Rogelio.

Based on the records, Rogelio received the NLRC's denial of his motion for reconsideration on January 16,
2003. He then had 60 days from January 16, 2003, or until March 17, 2003, within which to file his petition
for certiorari. It is without doubt, therefore, that his filing was timely considering that the CA received his
petition for certiorari at 2:44 o'clock in the afternoon of March 17, 2003.
The petitioners' insistence, that the issuance of the entry of judgment with respect to the NLRC's decision
precluded Rogelio from filing a petition for certiorari, was unwarranted. It ought to be without debate that
the finality of the NLRC's decision was of no consequence in the consideration of whether or not he could
bring a special civil action for certiorari within the period of 60 days for doing so under Section 4, Rule 65,
Rules of Court, simply because the question being thereby raised was jurisdictional.
II
Respondent remained the petitioners'
employee despite his supposed separation

Did Rogelio remain the employee of the petitioners from July 6, 1989 up to March 17, 1997?

The issue of whether or not an employer-employee relationship existed between the petitioners and the
respondent in that period was essentially a question of fact.[18] In dealing with such question, substantial
evidence - that amount of relevant evidence which a reasonable mind might accept as adequate to justify a
conclusion[19] - is sufficient. Although no particular form of evidence is required to prove the existence of
the relationship, and any competent and relevant evidence to prove the relationship may be admitted,[20] a
finding that the relationship exists must nonetheless rest on substantial evidence.

Generally, the Court does not review errors that raise factual questions, primarily because the Court is not a
trier of facts. However, where, like now, there is a conflict between the factual findings of the Labor Arbiter
and the NLRC, on the one hand, and those of the CA, on the other hand, [21] it is proper, in the exercise of
our equity jurisdiction, to review and re-evaluate the factual issues and to look into the records of the case
and re-examine the questioned findings.

The CA delved on and resolved the issue of the existence of an employer-employee relationship between
the petitioners and the respondent thusly:
As to the factual issue, the petitioner's evidence consists of his own statements and those of his alleged co-
worker from 1950 until 1997, Juanito Palomata, who unlike his former co-workers Domingo Guevarra and
Ambrosio Señeres, did not disown the "Sinumpaang Salaysay" he executed, in corroboration of petitioner's
allegations; and the Certification dated August 10, 1991 stating that petitioner was first placed under
coverage of the SSS in January 1974 to June 30, 1989 and was separated from service effective July 1, 1989,
a certification executed by respondent Crispin Amigo Chan which, petitioner maintains, was only intended
for his application for retirement benefits with the SSS.

Private respondents' evidence, on the other hand, consisted of respondent Crispin Amigo Chan's counter
statements as well as documentary evidence consisting of (1) Wayne Lim's Affidavit which petitioner
acknowledged in his Reply dated July 11, 1998, par. 8, admitting to being the employer of petitioner from
July 1, 1989 until the filing of the complaint; (2) Certification dated October 22, 1991 showing petitioner's
employment with respondents to have been between January 3, 1977 until July 1, 1989; (3) Affidavits of
Guevarra and Señeres disowning their signatures in the affidavits submitted in evidence by the petitioner; (4)
SSS report executed by Wayne Lim of his initial list of employees as of July 1, 1989 which includes the
petitioner. On appeal, the respondents further submitted documentary evidence showing that Wayne Lim
registered his business name on July 11, 1989 and apparently went into business buying copra.
At this point, we should note the following factual discrepancies in the evidence on hand: First, the
respondents issued certificates stating the commencement of petitioner's employment on different
dates, i.e. January 1974 and January 1977, although the earlier date referred only to the period when
petitioner was first placed under the coverage of the SSS, which need not necessarily refer to the
commencement of his employment. Secondly, while respondent Crispin Amigo Chan denied
having ever engaged in copra buying in Ibajay, the certificates he issued both dated in 1991 state
otherwise, for he declared himself as a "copra dealer" with address in Ibajay. Then there is the
statement of the petitioner that Wayne Lim was the respondents' manager in their branch office in
Ibajay since 1984, a statement that respondents failed to disavow. Instead, respondents insisted on
their non sequitur argument that they had never engaged in copra buying activities in Ibajay, and
that Wayne Lim was in business all by himself in regard to such activity.

The denial on respondents' part of their copra buying activities in Ibajay begs the obvious question: What
were petitioner and his witness Juanito Palomata then doing for respondents as laborers in Ibajay prior to
July 1, 1989? Indeed, what did petitioner do for the respondents as the latter's laborer prior to July 1, 1989,
which was different from what he did after said date? The records showed that he continued doing the same job,
i.e. as laborer and trusted employee tasked with the responsibility of getting money from the Kalibo office of
respondents which was used to buy copra and pay the employees' salaries. He did not only continue doing
the same thing but he apparently did the same at or from the same place, i.e. the bodega in Ibajay, which his co-
worker Palomata believed to belong to the respondent Masing & Sons. Since respondents admitted to
employing petitioner from 1977 to 1989, we have to conclude that, indeed, the bodega in Ibajay was owned
by respondents at least prior to July 1, 1989 since petitioner had consistently stated that he worked for the
respondents continuously in their branch office in Ibajay under different managers and nowhere else.

We believe that the respondents' strongest evidence in regard to the alleged separation of petitioner
from service effective July 1, 1989 would be the affidavit of Wayne Lim, owning to being the
employer of petitioner since July 1, 1989 and the SSS report that he executed listing petitioner as
one of his employees since said date. But in light of the incontrovertible physical reality that
petitioner and his co-workers did go to work day in and day out for such a long period of time,
doing the same thing and in the same place, without apparent discontinuity, except on paper, these
documents cannot be taken at their face value. We note that Wayne Lim apparently inherited, at
least on paper, ten (10) employees of respondent Crispin Amigo Chan, including petitioner, all on
the same day, i.e. on July 1, 1989. We note, too, that while there exists an initial report of employees
to the SSS by Wayne Lim, no other document apart from his affidavit and business registration was
offered by respondents to bolster their contention, irrespective of the fact that Wayne Lim was not a
party respondent. What were the circumstances underlying such alleged mass transfer of
employment? Unfortunately, the evidence for the respondents does not provide us with ready
answers. We could conclude that respondents sold their business in Ibajay and assets to Wayne
Lim on July 1, 1989; however, as pointed out above, respondent Crispin Amigo Chan himself said
that he was a "copra dealer" from Ibajay in August and October of 1991. Whether or not he was
registered as a copra buyer is immaterial, given that he declared himself a "copra dealer" and had
apparently engaged in the activity of buying copra, as shown precisely by the employment of
petitioner and Palomata. If Wayne Lim, from being the respondents' manager in Ibajay became an
independent businessman and took over the respondents' business in Ibajay along with all their
employees, why did not the respondents' simply state that fact for the record? More importantly,
why did the petitioner and Palomata continue believing that Wayne Lim was only the respondents'
manager? Given the long employment of petitioner with the respondents, was it possible for him
and his witness to make such mistake? We do not think so. In case of doubt, the doubt is resolved
in favor of labor, in favor of the safety and decent living for the laborer as mandated by Article 1702
of the Civil Code. The reality of the petitioner's toil speaks louder than words. xxx [22]

We agree with the CA's factual findings, because they were based on the evidence and records of the case
submitted before the LA. The CA essentially complied with the guidepost that the substantiality of evidence
depends on both its quantitative and its qualitative aspects.[23] Indeed, the records substantially established
that Chan and MSDC had employed Rogelio until 1997. In contrast, Chan and MSDC failed to adduce
credible substantiation of their averment that Rogelio had been Lim's employee from July 1989 until 1997.
Credible proof that could outweigh the showing by Rogelio to the contrary was demanded of Chan and
MSDC to establish the veracity of their allegation, for their mere allegation of Rogelio's employment under
Lim did not constitute evidence, [24] but they did not submit such proof, sadly failing to discharge their
burden of proving their own affirmative allegation. [25] In this regard, as we pointed out at the start, the
doubts reasonably arising from the evidence are resolved in favor of the laborer in any controversy between
a laborer and his master.
III
Respondent entitled to retirement benefits
from the petitioners

Article 287 of the Labor Code, as amended by Republic Act No. 7641, provides:
Article 287. Retirement. - Any employee may be retired upon reaching the retirement age established in the
collective bargaining agreement or other applicable employment contract.

In case of retirement, the employee shall be entitled to receive such retirement benefits as he may have
earned under existing laws and any collective bargaining agreement and other agreements; Provided,
however, That an employee's retirement benefits under any collective bargaining and other agreements shall
not be less than those provided herein.

In the absence of a retirement plan or agreement providing for retirement benefits of employees in
the establishment, an employee upon reaching the age of sixty (60) years or more, but not beyond
sixty-five (65) years which is hereby declared the compulsory retirement age, who has served at
least five (5) years in the said establishment, may retire and shall be entitled to retirement pay
equivalent to at least one-half (1/2) month salary for every year of service, a fraction of at least six
(6) months being considered as one whole year.

Unless the parties provide for broader inclusions, the term one-half (1/2) month salary shall mean
fifteen (15) days plus one-twelfth (1/12) of the 13th month pay and the cash equivalent of not more
than five (5) days of service incentive leaves.

Retail, service and agricultural establishments or operations employing not more than ten (10) employees or
workers are exempted from the coverage of this provision.

Violation of this provision is hereby declared unlawful and subject to the penal provisions provided under
Article 288 of this Code.
Was Rogelio entitled to the retirement benefits under Article 287 of the Labor Code, as amended by Republic
Act No. 7641?

The CA held so in its decision, to wit:

Having reached the conclusion that petitioner was an employee of the respondents from 1950 to March 17,
1997, and considering his uncontroverted allegation that in the Ibajay branch office where he was assigned,
respondents employed no less than 12 workers at said later date, thus affording private respondents no relief
from the duty of providing retirement benefits to their employees, we see no reason why petitioner should
not be entitled to the retirement benefits as provided for under Article 287 of the Labor Code, as
amended. The beneficent provisions of said law, as applied in Oro Enterprises Inc. v. NLRC, is apart from
the retirement benefits that can be claimed by a qualified employee under the social security law. Attorney's
fees are also granted to the petitioner. But the monetary benefits claimed by petitioner cannot be granted on
the basis of the evidence at hand. [26]

We concur with the CA's holding. The third paragraph of the aforequoted provision of the Labor Code
entitled Rogelio to retirement benefits as a necessary consequence of the finding that Rogelio was an
employee of MSDC and Chan. Indeed, there should be little, if any, doubt that the benefits under Republic
Act No. 7641, which was enacted as a labor protection measure and as a curative statute to respond, in part
at least, to the financial well-being of workers during their twilight years soon following their life of labor,
can be extended not only from the date of its enactment but retroactively to the time the employment
contracts started. [27]

WHEREFORE, the Court denies the petition for review on certiorari, and affirms the decision promulgated
on October 24, 2003 in CA-G.R. SP No.75983.

Costs of suit to be paid by the petitioners.

SO ORDERED.

Corona, C.J., (Chairperson), Leonardo-De Castro, Del Castillo, and Villarama, Jr., JJ., concur.

[1]
Rollo, pp. 111-121; penned by Associate Justice Renato C. Dacudao (retired), with Associate Justice Cancio
C. Garcia (later Presiding Justice of the CA and a Member of the Court) and Associate Justice Danilo B.
Pine (retired), concurring.
[2]
Approved on December 9, 1992 and effective on January 7, 1993.
[3]
CA rollo, p. 48.
[4]
Id., pp. 44-45.
[5]
Id.
[6]
Id., pp. 46-47.
[7]
Id., p. 35.
[8]
Id., p. 38.
[9]
Id., p. 36.
[10]
Id., p. 37.
[11]
Id., pp. 39-40.
[12]
Id., p. 51.
[13]
Id.
[14]
Id., p. 52.
[15]
Rollo, pp. 24-25.
[16]
Id., pp. 56-61.
[17]
Supra, note 1.
[18]
Lopez v. Bodega City, G.R. No. 155731, September 3, 2007, 532 SCRA 56, 64; Manila Water Company, Inc. v.
Peña, G.R. No. 158255, July 8, 2004, 434 SCRA 53, 58-59.
[19]
Section 5, Rule 133, Rules of Court; People's Broadcasting (Bombo Radyo Phils., Inc.) v. Secretary of the Department
of Labor and Employment, G.R. No. 179652, May 8, 2009, 587 SCRA 724, 753.
[20]
Opulencia Ice Plant and Storage v. NLRC, G.R. No. 98368, December 15, 1993, 228 SCRA 473, 478.
[21]
Lopez v. Bodega City, supra, p. 65; Manila Water Company, Inc. v. Pena, supra, p. 58; Tiu v. Pasaol, Sr., G.R. No.
139876, April 30, 2003, 402 SCRA 312, 319.
[22]
Rollo, pp.117-119.
[23]
Insular Life Assurance Co., Ltd. Employees Association-NATU v. Insular Life Assurance Co., Ltd., G.R. No.L-
25291, March 10, 1977, 76 SCRA 50.
[24]
Martinez v. National Labor Relations Commission, G.R. No. 117495, May 29, 1997, 272 SCRA 793, 801; P.T.
Cerna Corporation v. Court of Appeals, G.R. No. 91622, April 6, 1993, 221 SCRA 19, 25.
[25]
Jimenez v. National Labor Relations Commission, G.R. No. 116960, April 2, 1996, 256 SCRA 84, 89.
[26]
Rollo, p. 120.
[27]
Oro Enterprises, Inc. v. National Labor Relations Commission, G.R. No. 110861, November 14, 1994, 238
SCRA 105, 112.

Copyright 2016 - Batas.org

 Supreme Court of the Philippines

217 Phil. 629

SECOND DIVISION
G.R. No. L-52415, October 23, 1984
INSULAR BANK OF ASIA AND AMERICA EMPLOYEES' UNION (IBAAEU), PETITIONER,
VS. HON. AMADO G. INCIONG, DEPUTY MINISTER, MINISTRY OF LABOR AND
INSULAR BANK OF ASIA AND AMERICA, RESPONDENTS.

DECISION
MAKASIAR, J.:
This is a petition for certiorari to set aside the order dated November 10, 1979, of respondent Deputy
Minister of Labor, Amado G. Inciong, in NLRC case No. RB-IV-1561-76 entitled "Insular Bank of Asia
and America Employees' Union (complainant-appellee), vs. Insular Bank of Asia and America" (respondent-
appellant), the dispositive portion of which reads as follows:

"xx xx.

"ALL THE FOREGOING CONSIDERED, let the appealed Resolution en banc of the National Labor
Relations Commission dated 20 June 1978 be, as it is hereby, set aside and a new judgment promulgated
dismissing the instant case for lack of merit" (p. 109, rec.).
The antecedent facts culled from the records are as follows:

On June 20, 1975, petitioner filed a complaint against the respondent bank for the payment of holiday pay
before the then Department of Labor, National Labor Relations Commission, Regional Office No. IV in
Manila. Conciliation having failed, and upon the request of both parties, the case was certified for arbitration
on July 7, 1975 (p. 18, NLRC rec.).

On August 25, 1975, Labor Arbiter Ricarte T. Soriano rendered a decision in the above-entitled case,
granting petitioner's complaint for payment of holiday pay. Pertinent portions of the decision read:

"xx xx.
"The records disclosed that employees of respondent bank were not paid their wages on unworked regular
holidays as mandated by the Code, particularly Article 208, to wit:

'Art. 208. Right to holiday pay. –

‘(a) Every worker shall be paid his regular daily wage during regular holidays, except in retail and service
establishments regularly employing less than 10 workers.

‘(b) The term "holiday" as used in this chapter, shall include: New Year's Day, Maundy Thursday, Good
Friday, the ninth of April, the first of May, the twelfth of June, the fourth of July, the thirtieth of November,
the twenty-fifth and thirtieth of December and the day designated by law for holding a general election.

'xx xx.'

"This conclusion is deduced from the fact that the daily rate of pay of the bank employees was computed in the past with the
unworked regular holidays as excluded for purposes of determining the deductible amount for absences incurred. Thus, if the
employer uses the factor 303 days as a divisor in determining the daily rate of monthly paid employee, this
gives rise to a presumption that the monthly rate does not include payments for unworked regular holidays.
The use of the factor 303 indicates the number of ordinary working days in a year (which normally has 365
calendar days), excluding the 52 Sundays and the 10 regular holidays. The use of 251 as a factor (365
calendar days less 52 Saturdays, 52 Sundays, and 10 regular holidays) gives rise likewise to the same
presumption that the unworked Saturdays, Sundays and regular holidays are unpaid. This being the case, it is
not amiss to state with certainty that the instant claim for wages on regular unworked holidays is found to
be tenable and meritorious.

"WHEREFORE, judgment is hereby rendered:

“(a) xx xx.
“(b) Ordering respondent to pay wages to all its employees for all regular holidays since November 1, 1974"
(pp. 97-99, rec., Italics supplied).

Respondent bank did not appeal from the said decision. Instead, it complied with the order of Arbiter
Ricarte T. Soriano by paying their holiday pay up to and including January, 1976.
On December 16, 1975, Presidential Decree No. 850 was promulgated amending, among others, the
provisions of the Labor Code on the right to holiday pay to read as follows:

"Art. 94. Right to holiday pay. - (a) Every worker shall be paid his regular daily wages during regular
holidays, except in retail and service establishments regularly employing less than ten (10) workers;

“(b) The employer may require an employee to work on any holiday but such employee shall be paid a
compensation equivalent to twice his regular rate; and

“(c) As used in this Article, 'holiday' includes: New Year's Day, Maundy Thursday, Good Friday, the ninth
of April, the first of May, the twelfth of June, the fourth of July, the thirtieth of November, the twenty-fifth
and the thirtieth of December, and the day designated by law for holding a general election."
Accordingly, on February 16, 1976, by authority of Article 5 of the same Code, the Department of Labor
(now Ministry of Labor) promulgated the rules and regulations for the implementation of holidays with pay.
The controversial section thereof reads:

"SEC. 2. Status of employees paid by the month. -- Employees who are uniformly paid by the month, irrespective
of the number of working days therein, with a salary of not less than the statutory or established minimum
wage shall be presumed to be paid for all days in the month whether worked or not.

"For this purpose, the monthly minimum wage shall not be less than the statutory minimum wage
multiplied by 365 days divided by twelve" (Italics supplied).
On April 23, 1976, Policy Instruction No. 9 was issued by the then Secretary of Labor (now Minister)
interpreting the above-quoted rule, pertinent portion of which read:

"xx xx.
"The ten (10) paid legal holidays law, to start with, is intended to benefit principally daily employees. In the
case of monthly, only those whose monthly salary did not yet include payment for the ten (10) paid legal
holidays are entitled to the benefit.

"Under the rules implementing P.D. 850, this policy has been fully clarified to eliminate controversies on the
entitlement of monthly paid employees. The new determining rule is this: If the monthly paid employee is
receiving not less than P240, the maximum monthly minimum wage, and his monthly pay is uniform from
January to December, he is presumed to be already paid the ten (10) paid legal holidays. However, if
deductions are made from his monthly salary on account of holidays in months where they occur, then he is
still entitled to the ten (10) paid legal holidays. x x x" (Italics supplied).
Respondent bank, by reason of the ruling laid down by the aforecited rule implementing Article 94 of the
Labor Code and by Policy Instruction No. 9, stopped the payment of holiday pay to all its employees.
On August 30, 1976, petitioner filed a motion for a writ of execution to enforce the arbiter's decision of
August 25, 1975, whereby the respondent bank was ordered to pay its employees their daily wage for the
unworked regular holidays.
On September 10, 1975, respondent bank filed an opposition to the motion for a writ of execution alleging,
among others, that: (a) its refusal to pay the corresponding unworked holiday pay in accordance with the
award of Labor Arbiter Ricarte T. Soriano, dated August 25, 1975, is based on and justified by Policy
Instruction No. 9 which interpreted the rules implementing P. D. 850; and (b) that the said award is already
repealed by P.D. 850 which took effect on December 16, 1975, and by said Policy Instruction No. 9 of the
Department of Labor, considering that its monthly paid employees are not receiving less than P240.00 and
their monthly pay is uniform from January to December, and that no deductions are made from the
monthly salaries of its employees on account of holidays in months where they occur (pp. 64-65, NLRC,
rec.).
On October 18, 1976, Labor Arbiter Ricarte T. Soriano, instead of issuing a writ of execution, issued an
order enjoining the respondent bank to continue paying its employees their regular holiday pay on the
following grounds: (a) that the judgment is already final and the findings which is found in the body of the
decision as well as the dispositive portion thereof is res judicata or is the law of the case between the parties;
and (b) that since the decision had been partially implemented by the respondent bank, appeal from the said
decision is no longer available (pp. 100-103, rec.).
On November 17, 1976, respondent bank appealed from the above-cited order of Labor Arbiter Soriano to
the National Labor Relations Commission, reiterating therein its contentions averred in its opposition to the
motion for writ of execution. Respondent bank further alleged for the first time that the questioned order is
not supported by evidence insofar as it finds that respondent bank discontinued payment of holiday pay
beginning January, 1976 (p. 84, NLRC rec.).
On June 20, 1978, the National Labor Relations Commission promulgated its resolution en banc dismissing
respondent bank's appeal, the dispositive portion of which reads as follows:
"In view of the foregoing, we hereby resolve to dismiss, as we hereby dismiss, respondent's appeal; to set
aside Labor Arbiter Ricarte T. Soriano's order of 18 October 1976 and, as prayed for by complainant, to
order the issuance of the proper writ of execution" (p. 244, NLRC rec.).
Copies of the above resolution were served on the petitioner only on February 9, 1979 or almost eight (8)
months after it was promulgated, while copies were served on the respondent bank on February 13, 1979.
On February 21, 1979, respondent bank filed with the Office of the Minister of Labor a motion for
reconsideration/appeal with urgent prayer to stay execution, alleging therein the following: (a) that there is
prima facie evidence of grave abuse of discretion, amounting to lack of jurisdiction on the part of the
National Labor Relations Commission, in dismissing the respondent's appeal on pure technicalities without
passing upon the merits of the appeal; and (b) that the resolution appealed from is contrary to the law and
jurisprudence (pp. 260-274, NLRC rec.).
On March 19, 1979, petitioner filed its opposition to the respondent bank's appeal and alleged the following
grounds: (a) that the office of the Minister of Labor has no jurisdiction to entertain the instant appeal
pursuant to the provisions of P.D. 1391; (b) that the labor arbiter's decision being final, executory and
unappealable, execution is a matter of right for the petitioner; and (c) that the decision of the labor arbiter
dated August 25, 1975 is supported by the law and the evidence in the case (p. 364, NLRC rec.).
On July 30, 1979, petitioner filed a second motion for execution pending appeal, praying that a writ of
execution be issued by the National Labor Relations Commission pending appeal of the case with the
Office of the Minister of Labor. Respondent bank filed its opposition thereto on August 8, 1979.
On August 13, 1979, the National Labor Relations Commission issued an order which states:

"The Chief, Research and Information Division of this Commission is hereby directed to designate a Socio-
Economic Analyst to compute the holiday pay of the employees of the Insular Bank of Asia and America
from April 1976 to the present, in accordance with the Decision of the Labor Arbiter dated August 25,
1975" (p. 80, rec.).
On November 10, 1979, the Office of the Minister of Labor, through Deputy Minister Amado G. Inciong,
issued an order, the dispositive portion of which states:

"ALL THE FOREGOING CONSIDERED, let the appealed Resolution en banc of the National Labor
Relations Commission dated 20 June 1978 be, as it is hereby, set aside and a new judgment promulgated
dismissing the instant case for lack of merit" (p. 436, NLRC rec.).
Hence, this petition for certiorari charging public respondent Amado G. Inciong with abuse of discretion
amounting to lack or excess of jurisdiction.
The issue in this case is: whether or not the decision of a Labor Arbiter awarding payment of regular holiday
pay can still be set aside on appeal by the Deputy Minister of Labor even though it has already becone final
and had been partially executed, the finality of which was affirmed by the National Labor Relations
Commission sitting en banc, on the basis of an Implementing Rule and Policy Instruction promulgated by the
Ministry of Labor long after the said decision had become final and executory.
WE find for the petitioner.
I
WE agree with the petitioner's contention that Section 2, Rule IV, Book III of the implementing rules and
Policy Instruction No. 9 issued by the then Secretary of Labor are null and void since in the guise of
clarifying the Labor Code's provisions on holiday pay, they in effect amended them by enlarging the scope
of their exclusion (p. 11, rec.).
Article 94 of the Labor Code, as amended by P.D. 850, provides:

"Art. 94. Right to holiday pay. -- (a) Every worker shall be paid his regular daily wage during regular
holidays, except in retail and service establishments regularly employing less than ten (10) workers. x x x x."
The coverage and scope of exclusion of the Labor Code's holiday pay provisions is spelled out under Article
82 thereof which reads:

"Art. 82. Coverage. – The provision of this Title shall apply to employees in all establishments and
undertakings, whether for profit or not, but not to government employees, managerial employees, field personnel, members
of the family of the employer who are dependent on him for support, domestic helpers, persons in the personal service of another,
and workers who are paid by results as determined by the Secretary of Labor in appropriate regulations.

"xx xx" (Italics supplied).

From the above-cited provisions, it is clear that monthly paid employees are not excluded from the benefits
of holiday pay. However, the implementing rules on holiday pay promulgated by the then Secretary of Labor
excludes monthly paid employees from the said benefits by inserting, under Rule IV, Book III of the
implementing rules, Section 2, which provides that: "employees who are uniformly paid by the month,
irrespective of the number of working days therein, with a salary of not less than the statutory or established
minimum wage shall be presumed to be paid for all days in the month whether worked or not."
Public respondent maintains that "(T)he rules implementing P.D. 850 and Policy Instruction No. 9 were
issued to clarify the policy in the implementation of the ten (10) paid legal holidays. As interpreted,
'unworked' legal holidays are deemed paid insofar as monthly paid employees are concerned if (a) they are
receiving not less than the statutory minimum wage, (b) their monthly pay is uniform from January to
December, and (c) no deduction is made from their monthly salary on account of holidays in months where
they occur. As explained in Policy Instruction No. 9, 'The ten (10) paid legal holidays law, to start with, is
intended to benefit principally daily paid employees. In case of monthly, only those whose monthly salary
did not yet include payment for the ten (10) paid legal holidays are entitled to the benefit'" (pp. 340-341,
rec.). This contention is untenable.
It is elementary in the rules of statutory construction that when the language of the law is clear and
unequivocal the law must be taken to mean exactly what it says. In the case at bar, the provisions of the
Labor Code on the entitlement to the benefits of holiday pay are clear and explicit – it provides for both the
coverage of and exclusion from the benefits. In Policy Instruction No. 9, the then Secretary of Labor went
as far as to categorically state that the benefit is principally intended for daily paid employees, when the law
clearly states that every worker shall be paid their regular holiday pay. This is a flagrant violation of the
mandatory directive of Article 4 of the Labor Code, which states that "All doubts in the implementation and
interpretation of the provisions of this Code, including its implementing rules and regulations, shall be resolved in
favor of labor." Moreover, it shall always be presumed that the legislature intended to enact a valid and
permanent statute which would have the most beneficial effect that its language permits (Orlosky vs.
Haskell, 155 A. 112).
Obviously, the Secretary (Minister) of Labor had exceeded his statutory authority granted by Article 5 of the
Labor Code authorizing him to promulgate the necessary implementing rules and regulations.
Public respondent vehemently argues that the intent and spirit of the holiday pay law, as expressed by the
Secretary of Labor in the case of Chartered Bank Employees Association v. The Chartered Bank (NLRC
Case No. RB-1789-75, March 24, 1976), is to correct the disadvantages inherent in the daily compensation
system of employment -- holiday pay is primarily intended to benefit the daily paid workers whose employ-
ment and income are circumscribed by the principle of "no work, no pay." This argument may sound
meritorious; but, until the provisions of the Labor Code on holiday pay is amended by another law, monthly
paid employees are definitely included in the benefits of regular holiday pay. As earlier stated, the
presumption is always in favor of law, negatively put, the Labor Code is always strictly construed against
management.
While it is true that the contemporaneous construction placed upon a statute by executive officers whose
duty is to enforce it should be given great weight by the courts, still if such construction is so erroneous, as
in the instant case, the same must be declared as null and void. It is the role of the Judiciary to refine and,
when necessary, correct constitutional (and/or statutory) interpretation, in the context of the interactions of
the three branches of the government, almost always in situations where some agency of the State has
engaged in action that stems ultimately from some legitimate area of governmental power (The Supreme
Court in Modern Role, C. B. Swisher, 1958, p. 36).
Thus, in the case of Philippine Apparel Workers Union vs. National Labor Relations Commission (106
SCRA 444, July 31, 1981) where the Secretary of Labor enlarged the scope of exemption from the coverage
of a Presidential Decree granting increase in emergency allowance, this Court ruled that:
"x x x x the Secretary of Labor has exceeded his authority when he included paragraph (k) in Section 1 of
the Rules implementing P.D. 1123.
"xx xx xx.
"Clearly, the inclusion of paragraph k contravenes the statutory authority granted to the Secretary of Labor,
and the same is therefore void, as ruled by this Court in a long line of cases x x x x.
"'The recognition of the power of administrative officials to promulgate rules in the administration of the
statute, necessarily limited to what is provided for in the legislative enactment, may be found in the early
case of United States vs. Barrios decided in 1908. Then came in a 1914 decision, United States vs. Tupasi
Molina (29 Phil. 119) delineation of the scope of such competence. Thus: 'Of course the regulations
adopted under legislative authority by a particular department must be in harmony with the provisions of
the law, and for the sole purpose of carrying into effect its general provisions. By such regulations, of
course, the law itself cannot be extended. So long, however, as the regulations relate solely to carrying into
effect the provisions of the law, they are valid.' In 1936, in People vs. Santos, this Court expressed its dis-
approval of an administrative order that would amount to an excess of the regulatory power vested in an
administrative official. We reaffirmed such a doctrine in a 1951 decision, where we again made clear that
where an administrative order betrays inconsistency or repugnancy to the provisions of the Act, 'the
mandate of the Act must prevail and must be followed.' Justice Barrera, speaking for the Court in Victorias
Milling Inc. vs. Social Security Commission, citing Parker as well as Davis did tersely sum up the matter thus:
'A rule is binding on the Courts so long as the procedure fixed for its promulgation is followed and its scope
is within the statutory authority granted by the legislature, even if the courts are not in agreement with the
policy stated therein or its innate wisdom x x x. On the other hand, administrative interpretation of the law is at best
merely advisory, for it is the courts that finally determine what the law means.'
“‘It cannot be otherwise as the Constitution limits the authority of the President, in whom all executive
power resides, to take care that the laws be faithfully executed. No lesser administrative executive office or
agency then can, contrary to the express language of the Constitution, assert for itself a more extensive
prerogative. Necessarily, it is bound to observe the constitutional mandate. There must be strict compliance
with the legislative enactment. Its terms must be followed. The statute requires adherence to, not departure
from its provisions. No deviation is allowable. In the terse language of the present Chief Justice, an
administrative agency ‘cannot amend an act of Congress.' Respondents can be sustained, therefore, only if it
could be shown that the rules and regulations promulgated by them were in accordance with what the
Veterans Bill of Rights provides'" (Phil. Apparel Workers Union vs. National Labor Relations Commission,
supra, 463, 464, citing Teozon vs. Members of the Board of Administrators, PVA, 33 SCRA 585; see also
Santos vs. Hon. Estenzo, et al., 109 Phil. 419; Hilado vs. Collector of Internal Revenue, 100 Phil. 295; Sy
Man vs. Jacinto & Fabros, 93 Phil. 1093; Olsen & Co., Inc. vs. Aldanese and Trinidad, 43 Phil. 259).
This ruling of the Court was recently reiterated in the case of American Wire & Cable Workers Union
(TUPAS) vs. The National Labor Relations Commission and American Wire & Cable Co., Inc., G.R. No.
53337, promulgated on June 29, 1984.
In view of the foregoing, Section 2, Rule IV, Book III of the Rules to implement the Labor Code and Policy
Instruction No. 9 issued by the then Secretary of Labor must be declared null and void. Accordingly, public
respondent Deputy Minister of Labor Amado G. Inciong had no basis at all to deny the members of
petitioner union their regular holiday pay as directed by the Labor Code.
II
It is not disputed that the decision of Labor Arbiter Ricarte T. Soriano dated August 25, 1975, had already
become final, and was, in fact, partially executed by the respondent bank.
However, public respondent maintains that on the authority of De Luna vs. Kayanan, 61 SCRA 49,
November 13, 1974, he can annul the final decision of Labor Arbiter Soriano since the ensuing
promulgation of the integrated implementing rules of the Labor Code pursuant to P.D. 850 on February 16,
1976, and the issuance of Policy Instruction No. 9 on April 23, 1976 by the then Secretary of Labor are facts
and circumstances that transpired subsequent to the promulgation of the decision of the labor arbiter, which
renders the execution of the said decision impossible and unjust on the part of herein respondent bank (pp.
342-343, rec.).
This contention is untenable.
To start with, unlike the instant case, the case of De Luna relied upon by the public respondent is not a
labor case wherein the express mandate of the Constitution on the protection to labor is applied. Thus
Article 4 of the Labor Code provides that, "All doubts in the implementation and interpretation of the pro-
visions of this Code, including its implementing rules and regulations, shall be resolved in favor of labor";
and Article 1702 of the Civil Code provides that, "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."
Consequently, contrary to public respondent's allegations, it is patently unjust to deprive the members of
petitioner union of their vested right acquired by virtue of a final judgment on the basis of a labor statute
promulgated following the acquisition of the "right".
On the question of whether or not a law or statute can annul or modify a judicial order issued prior to its
promulgation, this Court, through Associate Justice Claro M. Recto, said:
"xx xx xx.
"We are decidedly of the opinion that they did not. Said order, being unappealable, became final on the date
of its issuance and the parties who acquired rights thereunder cannot be deprived thereof by a constitutional
provision enacted or promulgated subsequent thereto. Neither the Constitution nor the statutes, except penal laws
favorable to the accused, have retroactive effect in the sense of annulling or modifying vested rights, or altering contractual
obligations” (China Ins. & Surety Co. vs. Judge of First Instance of Manila, 63 Phil. 324, Italics supplied).
In the case of In re: Cunanan, et al., 19 Phil. 585, March 18, 1954, this Court said: "x x x when a court
renders a decision or promulgates a resolution or order on the basis of and in accordance with a certain law
or rule then in force, the subsequent amendment or even repeal of said law or rule may not affect the final
decision, order, or resolution already promulgated, in the sense of revoking or rendering it void and of no
effect." Thus, the amendatory rule (Rule IV, Book III of the Rules to Implement the Labor Code) cannot be
given retroactive effect as to modify final judgments. Not even a law can validly annul final decisions (In re:
Cunanan, et al., Ibid.).
Furthermore, the facts of the case relied upon by the public respondent are not analogous to that of the case
at bar. The case of De Luna speaks of final and executory judgment, while in the instant case, the final
judgment is partially executed. Just as the court is ousted of its jurisdiction to annul or modify a judgment
the moment it becomes final, the court also loses its jurisdiction to annul or modify a writ of execution
upon its service or execution; for, otherwise, we will have a situation wherein a final and executed judgment
can still be annulled or modified by the court upon mere motion of a party. This would certainly result in
endless litigations thereby rendering inutile the rule of law.
Respondent bank counters with the argument that its partial compliance was involuntary because it did so
under pain of levy and execution of its assets (p. 138, rec.). WE find no merit in this argument. Respondent
bank clearly manifested its voluntariness in complying with the decision of the labor arbiter by not appealing
to the National Labor Relations Commission as provided for under the Labor Code under Article 223. A
party who waives his right to appeal is deemed to have accepted the judgment, adverse or not, as correct,
especially if such party readily acquiesced in the judgment by starting to execute said judgment even before a
writ of execution was issued, is in this case. Under these circumstances, to permit a party to appeal from the
said partially executed final judgment would make a mockery of the doctrine of finality of judgments long
enshrined in this jurisdiction.
Section 1 of Rule 39 of the Revised Rules of Court provides that "x x x execution shall issue as a matter of
right upon the expiration of the period to appeal x x x or if no appeal has been duly perfected." This rule
applies to decisions or orders of labor arbiters who are exercising quasi-judicial functions since; "x x x the
rule of execution of judgments under the rules should govern all kinds of execution of judgment, unless it is
otherwise provided in other laws" (Sagucio vs. Bulos, 5 SCRA 803) and Article 223 of the Labor Code
provides that "x x x decisions, awards, or orders of the Labor Arbiter or compulsory arbitrators are final and
executory unless appealed to the Commission by any or both of the parties within ten (10) days from receipt
of such awards, orders, or decisions. x x x."
Thus, under the aforecited rule, the lapse of the appeal period deprives the courts of jurisdiction to alter the
final judgment and the judgment becomes final ipso jure (Vega vs. WCC, 89 SCRA 143, citing Cruz vs. WCC,
2 PHILAJUR 436, 440, January 31, 1978; see also Soliven vs. WCC, 77 SCRA 621; Carrero vs. WCC and
Regala vs. WCC, decided jointly, 77 SCRA 297; Vitug vs. Republic, 75 SCRA 436; Ramos vs. Republic, 69
SCRA 576).
In Galvez vs. Philippine Long Distance Telephone Co., 3 SCRA 422, 423, October 31, 1961, where the
lower court modified a final order, this Court ruled thus:
"xx xx xx.
"The lower court was thus aware of the fact that it was thereby altering or modifying its order of January 8,
1959. Regardless of the excellence of the motive for acting as it did, we are constrained to hold, however,
that the lower court had no authority to make said alteration or modification. x x x.
"xxx xx xx.
"The equitable considerations that led the lower court to take the action complained of cannot offset the
demands of public policy and public interest -- which are also responsive to the tenets of equity -- requiring
that all issues passed upon in decisions or final orders that have become executory, be deemed conclusively
disposed of and definitely closed, for, otherwise, there would be no end to litigations, thus setting at naught
the main role of courts of justice, which is to assist in the enforcement of the rule of law and the
maintenance of peace and order, by settling justiciable controversies with finality.
"xx xx xx."
In the recent case of Gabaya vs. Mendoza, 113 SCRA 405, 406, March 30, 1982, this Court said:
"xx xx xx.
"In Marasigan vs. Ronquillo (94 Phil. 237), it was categorically stated that the rule is absolute that after a
judgment becomes final, by the expiration of the period provided by the rules within which it so becomes,
no further amendment or correction can be made by the court except for clerical errors or mistakes. And
such final judgment is conclusive not only as to every matter which was offered and received to sustain or
defeat the claim or demand but as to any other admissible matter which must have been offered for that
purpose (L7044, 96 Phil. 526). In the earlier case of Contreras and Ginco vs. Felix and China Banking Corp.,
Inc. (44 O.G. 4306), it was stated that the rule must be adhered to regardless of any possible injustice in a particular case
for ‘(W)e have to subordinate the equity of a particular situation to the over-mastering need of certainty and immutability of
judicial pronouncements.'
"xx xx xx."
III
The despotic manner by which public respondent Amado G. Inciong divested the members of the
petitioner union of their rights acquired by virtue of a final judgment is tantamount to a deprivation of
property without due process of law. Public respondent completely ignored the rights of the petitioner
union's members in dismissing their complaint since he knew for a fact that the judgment of the labor
arbiter had long become final and was even partially executed by the respondent bank.
A final judgment vests in the prevailing party a right recognized and protected by law under the due process
clause of the Constitution (China Ins. & Surety Co. vs. Judge of First Instance of Manila, 63 Phil. 324). A
final judgment is "a vested interest which it is right and equitable that the government should recognize and
protect, and of which the individual could not be deprived arbitrarily without injustice" (Rookledge v.
Garwood, 65 N.W. 2d 785, 791).
It is by this guiding principle that the due process clause is interpreted. Thus, in the pithy language of then
Justice, later Chief Justice, Concepcion: "x x x acts of Congress, as well as those of the Executive, can deny
due process only under pain of nullity, and judicial proceedings suffering from the same flaw are subject to
the same sanction, any statutory provision to the contrary notwithstanding” (Vda. de Cuaycong vs. Vda. de
Sengbengco, 110 Phil. 118, Italics supplied). And "(I)t has been likewise established that a violation of a
constitutional right divests the court of jurisdiction; and as a consequence its judgment is null and void and
confers no rights" (Phil. Blooming Mills Employees Organization vs. Phil. Blooming Mills Co., Inc., 51
SCRA 211, June 5, 1973).
Tested by and pitted against this broad concept of the constitutional guarantee of due process, the action of
public respondent Amado G. Inciong is a clear example of deprivation of property without due process of
law and constituted grave abuse of discretion, amounting to lack or excess of jurisdiction in issuing the
order dated November 10, 1979.
WHEREFORE, THE PETITION IS HEREBY GRANTED, THE ORDER OF PUBLIC
RESPONDENT IS SET ASIDE, AND THE DECISION OF LABOR ARBITER RICARTE T.
SORIANO DATED AUGUST 25, 1975, IS HEREBY REINSTATED.
COSTS AGAINST PRIVATE RESPONDENT INSULAR BANK OF ASIA AND AMERICA.
SO ORDERED.
Guerrero, Escolin, and Cuevas, JJ., concur.
Aquino and Abad Santos, JJ., in the result.
Concepcion, Jr., J., no part.

Copyright 2016 - Batas.org

Supreme Court of the Philippines

508 Phil. 478

THIRD DIVISION

G.R. NO. 152012, September 30, 2005

LAND AND HOUSING DEVELOPMENT CORPORATION AND ABV ROCK GROUP, PETITIONERS, VS.
MARIANITO C. ESQUILLO, RESPONDENT.

DECISION

PANGANIBAN, J.:

Quitclaims, releases and other waivers of benefits granted by laws or contracts in favor of workers
should be strictly scrutinized to protect the weak and the disadvantaged. The waivers should be
carefully examined, in regard not only to the words and terms used, but also the factual circumstances
under which they have been executed.

The Case
Before us is a Petition for Review[1]under Rule 45 of the Rules of Court, seeking to set aside the July
27, 2001 Decision[2]and the January 29, 2002 Resolution[3]of the Court of Appeals (CA) in CA-GR SP
No. 50679. The dispositive portion of the Decision reads as follows:

"WHEREFORE, premises considered, the decision dated May 30, 1997 of public respondent is hereby
ANNULLEDand SET ASIDEand the decision, dated February 27, 1997 of Labor Arbiter Andres Zavalla is
REINSTATEDand AFFIRMEDin toto. Costs against [herein petitioners]."[4]

The assailed Resolution denied petitioners' Motion for Reconsideration.

The Facts

The antecedents are narrated by the CA as follows:

"[Respondent] Marianito C. Esquillo was hired as a structural engineer by [Petitioner] ABV Rock Group
('ABV') based in Jeddah, Kingdom of Saudi Arabia. He commenced employment on July 27, 1989, with
an initial monthly salary of US$1,000.00 that was gradually increased, on account of his good
performance and the annual renewal of his employment contract, until it reached US$1,300.00.
Private respondent Land & Housing Development Corporation ('LHDC'), a local placement agency,
facilitated [respondent's] employment papers.

"Although [respondent's] employment contract was supposed to be valid until July 26, 1995, it was
pre-terminated, through an Inter-Office Memo on Notice of Termination, dated November 17, 1994,
allegedly, for the reason, 'reduction of force.' Petitioner however, claims that the reason adduced was
'negated by the fact that a lot of transferees from other sites were taken in and promotions as well as
re-classifications in the lower ranks were done as shown by the list of fifteen (15) transferees from
Riyadh effective November 5, 1994, as well as letters of promotion and re-classification.' He further
claimed that [Petitioner] ABV maliciously confiscated his 'iqama' or resident visa despite the fact that it
was [respondent's] previous employer, FEAL IBC., which secured his 'iqama.' Consequently,
[respondent] was prevented from getting another job in Jeddah.
"[Respondent] subsequently received the amount of twenty-three thousand, one hundred fifty-three
Saudi Riyals (SR23,153.00) from [Petitioner] ABV, as final settlement of his claims and was issued an
exit visa that required him to immediately go back to the Philippines.

"As a result of the foregoing, [respondent] filed a complaint for breach of contract and/or illegal
dismissal, before the Philippine Overseas Employment Administration which was referred to the
National Labor Relations Commission, Sub-Regional Arbitration Branch No. IV, San Pablo City, and
docketed as SRAB-IV-4-0053-96-L. The parties were required to file their position papers and
responsive pleadings.

"In their position paper, [petitioners] maintained that [respondent's] dismissal was for valid cause, that
is, reduction of force. Due to the Gulf War, the projects of [Petitioner] ABV were reduced and it was
forced to 'terminate the contracts of workers whose job were not so immediate and urgent and retain
only those workers whose skills were needed just to maintain the projects.' [Respondent] was
informed, one month in advance, of the pre-termination of his contract, and he was paid his salary,
overtime pay, bonus and other benefits in the total amount of US$6,716.00 or Saudi Riyals
SR25,192.00. With respect to the alleged confiscation of [respondent's] 'iqama,' [petitioners] alleged
that the law requires its surrender to the Saudi authorities upon the termination of the employee's
contract of employment.

'Upon the submission of the case for resolution, the Hon. Labor Arbiter Andres Zavalla issued his
Decision, dated February 27, 1997, decreeing, as follows:

'WHEREFORE, premises considered, judgment is hereby rendered ordering [petitioners] jointly and
severally to pay [respondent] his salaries corresponding to the unexpired portion of his contract from
December 19, 1994 up to July 26, 1995 in the total amount of NINE THOUSAND FOUR HUNDRED FORTY
SEVEN U.S. Dollars (US$9,447.00) and ten percent (10%) of his monetary award as attorney's fees both
in Philippine currency to be computed at the prevailing rate at the time of payment.

'All other claims of [respondent] are hereby dismissed for lack of merit.

'SO ORDERED.'
"When [petitioners] filed their joint appeal, docketed as NLRC NCR CA No. 012650-97, [the NLRC] in a
Decision, dated May 30, 1997, reversed the aforecited decision and dismissed the [respondent's]
complaint for lack of merit. [Respondent's] motion for reconsideration was denied in a Resolution,
dated July 10, 1997."[5]

Ruling of the Court of Appeals

The Court of Appeals ruled that despite the absence of a written categorical objection to the
sufficiency of the payment received as consideration for the execution of the quitclaim, jurisprudence
supported the right of respondent to demand what was rightfully his under our labor laws. Hence, he
should have been allowed to recover the difference between the amount he had actually received and
the amount he should have received.

The CA also found that the NLRC had erroneously applied RA 8042 to the case. The appellate court
held that respondent was entitled to the salaries corresponding to the unexpired portion of his
Contract, in addition to what he had already received.

Hence, this Petition.[6]

The Issues

Petitioners raise the following issues for this Court's consideration:

"A. Whether or not the Honorable Court of Appeals committed reversible error when it took
cognizance of an issue of fact which was raised for the first time on appeal.

"B. Whether or not the Honorable Court of Appeals committed reversible error in its 27 July 2001
Decision and 29 January 2002 Resolution by affirming the 27 February 1997 Decision of the Labor
Arbiter which rendered as null and void and without binding effect the release and quitclaim executed
by the respondent in favor of the petitioners, and, thereafter, granted the respondent monetary
award."[7]
In the main, the issue is whether respondent, despite having executed a quitclaim, is entitled to a grant
of his additional monetary claims.

The Court's Ruling

The Petition has no merit.

At the outset, the Court notes the Manifestation of the Office of the Solicitor General (OSG),
recommending that "the decision dated May 30, 1997 of the NLRC be annulled and set aside and that
[Respondent] Esquillo be awarded the total amount of his salaries corresponding to the unexpired
portion of his contract of employment."[8]

Main Issue:

Entitlements of a Dismissed

Employee Who Has Executed a Quitclaim

The factual findings of labor officials, who are deemed to have acquired expertise in matters within
their respective jurisdictions, are generally accorded not only respect but finality.[9] In the present
case, the labor arbiter found respondent's dismissal to be illegal and devoid of any just or authorized
cause. The factual findings of the NLRC and the CA on this matter were not contradictory. Hence, the
Court finds no reason to deviate from their factualfinding that respondent was dismissed without any
legal cause.

Indeed, an employee cannot be dismissed except for cause, as provided by law, and only after due
notice and hearing.[10] Employees who are dismissed without cause have the right to be reinstated
without loss of seniority rights and other privileges; and to be paid full back wages, inclusive of
allowances and other benefits, plus proven damages.

With regard to contract workers, in cases arising before the effectivity of RA 8042 (the Migrant
Workers and Overseas Filipinos Act[11]), it is settled that if "the contract is for a fixed term and the
employee is dismissed without just cause, he is entitled to the payment of his salaries corresponding to
the unexpired portion of his contract."[12] In the present case, the Contract of respondent was until
July 26, 1995. Since his dismissal from service effective December 18, 1994, was not for a just cause,
he is entitled to be paid his salary corresponding to the unexpired portion of his Contract, in the total
amount of US$9,447.

We now go to the Release and Quitclaim signed by respondent. The document, which was prepared
by Petitioner ABV Rock Group,[13]states:

"KNOW ALL MEN BY THESE PRESENTS:

That for and in consideration of the sum of Saudi Riyals SR: TWENTY THREE THOUSAND ONE HUNDRED
FIFTY THREE (SR23,153)receipt of which is hereby acknowledged to my full and complete satisfaction, I,
MARIANITO C. ESQUILLOdo discharge my employer, ABV ROCK GROUP KB, JEDDAH,& its recruitment
agent, the LAND & HOUSING DEV'P. CORP., from any and all claims, demands, debts, dues, actions, or
causes of action, arising from my employment with aforesaid company/firm/entity.

"I hereby certify that I am of legal age, that I fully understand this instrument and agree that this is a
full and final release and discharge of the parties referred to herein, and I further agree that this
release may be pleaded as absolute and final bar to any suit or suits or legal proceedings that may
hereafter be prosecuted by me against aforementioned companies/entities.

IN WITNESS WHEREOF, I HAVE HEREUNTO SET MY HANDS THIS 29 dayof NOV, 1994 at JEDDAH.

SIGNED

MARIANITO C. ESQUILLO."[14]

Petitioners claim that the foregoing Release and Quitclaim has forever released them from "any and all
claims, demands, dues, actions, or causes of action" arising from respondent's employment with them.
They also contend that the validity of the document can no longer be questioned.

Unfortunately for petitioners, jurisprudence does not support their stance. The fact that employees
have signed a release and/or quitclaim does not necessarily result in the waiver of their claims. The
law strictly scrutinizes agreements in which workers agree to receive less compensation than what
they are legally entitled to. That document does not always bar them from demanding benefits to
which they are legally entitled.[15] The reason for this policy was explained, inter alia, in Marcos v.
National Labor Relations Commission, which we quote:

"We have heretofore explained that the reason why quitclaims are commonly frowned upon as
contrary to public policy, and why they are held to be ineffective to bar claims for the full measure of
the workers' legal rights, is the fact that the employer and the employee obviously do not stand on the
same footing. The employer drove the employee to the wall. The latter must have to get hold of
money. Because, out of a job, he had to face the harsh necessities of life. He thus found himself in no
position to resist money proffered. His, then, is a case of adherence, not of choice. One thing sure,
however, is that petitioners did not relent on their claim. They pressed it. They are deemed not [to]
have waived any of their rights. Renuntiatio non praesumitur.

"Along this line, we have more trenchantly declared that quitclaims and/or complete releases executed
by the employees do not estop them from pursuing their claims arising from unfair labor practices of
the employer. The basic reason for this is that such quitclaims and/or complete releases are against
public policy and, therefore, null and void. The acceptance of termination does not divest a laborer of
the right to prosecute his employer for unfair labor practice acts. While there may be possible
exceptions to this holding, we do not perceive any in the case at bar.

xxx xxx xxx

"We have pointed out in Veloso,et al. vs. Department of Labor and Employment, et al., that:

'While rights may be waived, the same must not be contrary to law, public order, public policy, morals
or good customs or prejudicial to a third person with a right recognized by law.

'Article 6 of the Civil Code renders a quitclaim agreement void ab initiowhere the quitclaim obligates
the workers concerned to forego their benefits while at the same time exempting the employer from
any liability that it may choose to reject. This runs counter to Art. 22 of the Civil Code which provides
that no one shall be unjustly enriched at the expense of another.'"[16]

In Periquet v.NLRC, this Court set the guidelines and the current doctrinal policy regarding quitclaims
and waivers, as follows:
"Not all waivers and quitclaims are invalid as against public policy. If the agreement was voluntarily
entered into and represents a reasonable settlement, it is binding on the parties and may not later be
disowned simply because of a change of mind. It is only where there is clear proof that the waiver was
wangled from an unsuspecting or gullible person, or the terms of settlement are unconscionable on its
face, that the law will step in to annul the questionable transaction. But where it is shown that the
person making the waiver did so voluntarily, with full understanding of what he was doing, and the
consideration for the quitclaim is credible and reasonable, the transaction must be recognized as a
valid and binding undertaking."[17]

Hence, quitclaims in which employees voluntarily accept a reasonable amount or consideration as

settlement are deemed valid. These agreements cannot be set aside merely because the parties have
subsequently changed their minds.[18] Consistent with this doctrine, a tribunal has the duty of
scrutinizing quitclaims brought to its attention by either party, in order to determine their validity.

In the present case, petitioners themselves offered the Release and Quitclaim as a defense. Even
though respondent -- in his pleadings before the labor arbiter -- was silent on the matter, he
nonetheless filed this case and questioned his dismissal immediately, a few days after setting foot in
the Philippines. In asking for payment for the unexpired portion of his employment Contract, he was
eloquently taking issue with the validity of the quitclaim. His actions spoke loudly enough; words were
not necessary.

To determine whether the Release and Quitclaim is valid, one important factor that must be taken into
account is the consideration accepted by respondent; the amount must constitute a "reasonable
settlement." The NLRC considered the amount of US$6,716 or SR23,153 reasonable, when compared
with (1) $3,900, the three-month salary that he would have been entitled to recover if RA 8042 were
applied; and (2) US$9,447, his salaries for the unexpired portion of his Contract.

It is relevant to point out, however, that respondent was dismissed prior to the effectivity of RA 8042.
As discussed at the outset, he is entitled to his salaries corresponding to the unexpired portion of his
Contract. This amount is exclusive of the SR23,153 that he received based on the November 29, 1994
Final Settlement. The latter amount was comprised of overtime pay, vacation pay, indemnity, contract
reward and notice pay -- items that were due him under his employment Contract. For these reasons,
the considerationstated in the Release and Quitclaim cannot be deemed a reasonable settlement;
hence, that agreement must be set aside.
That respondent is a professional structural engineer did not make him less susceptible to
disadvantageous financial offers, faced as he was with the prospect of unemployment in a country not
his own. "This Court has allowed supervisory employees to seek payment of benefits and a manager to
sue for illegal dismissal even though, for a consideration, they executed deeds of quitclaims releasing
their employers from liability."[19]

To stress, "in case of doubt, laws should be interpreted to favor the working class -- whether in the
government or in the private sector -- in order to give flesh and vigor to the pro-poor and pro-labor
provisions of our Constitution."[20]

WHEREFORE, the Petition is DENIEDand the assailed Decision and Resolution AFFIRMED. Costs against
petitioners.

SO ORDERED.

Sandoval-Gutierrez, Corona, Carpio Morales, andGarcia, JJ., concur.

[1]Rollo, pp. 8-25.

[2]Id., pp. 26-34. Penned by Justice Teodoro P. Regino and concurred in by Justices Delilah Vidallon-
Magtolis (Division chair) and Josefina Guevara-Salonga (member).

[3]Id., p. 35.

[4]CA Decision, p. 8; rollo, p. 33.

[5]Id., pp. 1-3 & 26-28. Citations omitted.

[6]The case was deemed submitted for decision on August 9, 2004, upon this Court's receipt of
petitioners' Memorandum, signed by Attys. Victor Pablo C. Trinidad and Charlo de la Costa Paredes.
Respondent's Memorandum, signed by Atty. Benito Ching Jr., was filed on July 16, 2004.

[7]Petitioners' Memorandum, p. 5; rollo, p. 182. Original in uppercase.

[8]OSG's Manifestation and Motion dated August 5, 2004, p. 3, rollo, p. 173.

[9]Asia World Recruitment, Inc. v. NLRC, 371 Phil. 745, August 24, 1999; Hacienda Fatima v. National
Federation of Sugarcane Workers-Food and General Trade, 396 SCRA 518, January 28, 2003; Tres Reyes
v. Maxim's Tea House, 398 SCRA 288, February 27, 2003.

[10]Art. 279 of the Labor Code. Anderson v. NLRC, 252 SCRA 116, 126, January 22, 1996.

[11]This law was approved on June 7, 1995.

[12]Anderson v. NLRC, supra, p.126, January 22, 1996, per Mendoza, J. See also Teknika Skills and
Trade Services, Inc. v. NLRC, 212 SCRA 132, August 4, 1992.

[13]Respondent's Memorandum, p. 2; rollo, p. 164.

[14]CA rollo, p. 45.

[15]Fuentes v. NLRC et al., GR No. 76835, November 24, 1988, 167 SCRA 767; see also Garcia v. NLRC et
al., GR No. 67825, September 4, 1987, 153 SCRA 639.

[16]248 SCRA 146, 152-153, September 8, 1995, per Regalado, J.

[17]186 SCRA 724, June 22, 1990, per Cruz, J.

[18]Galicia v. NLRC(Second Division), 276 SCRA 381, 387-388, July 28, 1997.

[19]Ariola v. Philex, GR No. 147756, August 9, 2005, per Carpio, J.(citing De Leon v. NLRC, 100 SCRA
691, October 30, 1980).

[20]PPA Employees Hired After July 1, 1989 v. Commission on Audit, GR No. 160396, September 6,
2005, per Panganiban, then acting CJ.

Copyright 2016 - Batas.org

 Supreme Court of the Philippines

G.R. No. 101535

SECOND DIVISION
G.R. No. 101535, January 22, 1993
PHILIPPINE NATIONAL CONSTRUCTION CORPORATION, PETITIONER, VS. THE
HONORABLE NATIONAL LABOR RELATIONS COMMISSION, SECOND DIVISION,
PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION, RAUL ABRICO, RODRIGO
VASALLO, EDUARDO A. SIBBALUCA, AND BENIGNO M. MANASIS, RESPONDENTS.

DECISION
CAMPOS, JR., J.:
Subject of this petition is the Resolution* of the National Labor Relations Commission (NLRC) affirming
the decision of the Philippine Overseas Employment Administration (POEA) which held herein petitioner
Philippine National Construction Corporation (PNCC) liable to private respondents Raul Abrico, Rodrigo
Vasallo, Eduardo A. Sibbaluca, and Benigno M. Manasis for salary, overtime pay, vacation and sick leave,
and completion bonus differentials.

The facts are as follows:

Herein private respondents Raul C. Abrico, Rodrigo Vasallo, Eduardo A. Sibbaluca, and Benigno M.
Manasis were deployed by herein petitioner for overseas employment to Iraq as security guards pursuant to
individual appointment contracts dated April 15, 1985. These were submitted to the POEA and were
validated by the latter on April 22, 1985. The contracts provided for a US$350.00/month salary.

However, on May 12, 1985, a second overseas contract was executed by the PNCC which was accepted by
private respondents. It modified the April 15, 1985 contract by providing for a monthly salary of US$260.00
for the same position. The contract was for a two-year period. When the period lapsed, private respondents
were repatriated and were extended local employment. However, all of them filed their voluntary resignation
effective August 31, 1987 so that they could avail of more benefits under the Retirement Program offered
by the PNCC.

On August 17, 1987, private respondents filed a complaint before the POEA for, among others, (a) non-
payment of promotional pay increase for Raul C. Abrico and Rodrigo J. Vasallo; (b) underpayment of
salaries, overtime pay, bonuses, night differential pay, sick leave and vacation leave benefits; (c) assigning
Friday overtime guarding duties to non-guards.

In disposing of the complaint, the POEA ruled as follows:

"The issues to be resolved in these are:

1. Whether or not herein complainants are entitled to salary and overtime pay differentials.
2. Whether or not herein complainants are entitled to vacation leave and sick leave differentials, bonus
differential and night shift differential.

3. Whether or not complainants Raul Abrico and Rodrigo J. Vasallo are entitled to promotional pay
differential.

This Office, after a thorough examination of the allegations as well as the evidence of the parties finds the
answer of the first issue to be affirmative, affirmative also to the second issue as far as vacation and sick
leaves (sic) differentials as well as bonus differential are concerned and negative as to the rest of the issues.

x x x The only dispute which remains unsolved is whether or not the monthly salary of herein complainants
is US$350.00 a month or US$260.00.

As correctly invoked by complainants paragraph (1) of Article 34 of the Labor Code prohibits the
substitution or alteration of employment contracts approved and verified by the Department of Labor from
the time (of) the actual signing thereof by the parties up to and including the period of expiration of the
same without the approval of the Department of Labor.

With regard to the first issue in this case the approved contract of employment of the herein complainants
with the respondent is US$350.00 a month. This can be inferred from the POEA approved contract of
employment and by the certification issued by respondent's chief recruiting officer. This being so, herein
complainants have the right to be paid as monthly salaries the aforementioned amount.

Complainants having been granted voluntarily by the respondent a two-hour daily overtime (Exh. "G", "G-
1") during the durations of their contract, are also entitled to be paid thereto based on the monthly salaries
of US$350.00 and not US$260.00.

In connection with the second issues of vacation and sick leaves (sic) differentials as well as bonus
differential, there being no refutation from the respondent of the allegation of the complainants that they
were paid the said benefits in accordance with the monthly rate they were receiving while working in Iraq,
that is US$260.00, instead of US$350.00, their salary rate in their approved employment contract, this Office
finds it proper to award the complainants the difference of the two (2) aforementioned amounts as far as
their vacation and sick leaves (sic) benefits as well as completion bonus are concerned. Subparagraph a of
paragraph seven of the master employment contract of the respondent in its Iraq project during the year
1985 provides a vacation leave of 20 days and sick leave of 10 days or a total of thirty (30) days leave for
each of their employee for twelve (12) months service. The said leaves (sic) benefits are commutable to cash
at the rate of 100% of the employee's salary at the end of employees foreign assignment (subpar. c par. 7,
respondent's Master Employment Contract). Respondent's master employment contract also provides for
completion bonus of fifteen (15) days for every year of service (par. 15). Respondent having paid the
complainants the said benefits in accordance with the monthly rate they actually received while working in
Iraq, this Office finds it proper for the respondent to pay to complainants the difference of the two
aforementioned amounts."[1]
From the decision of the POEA, the PNCC appealed to the NLRC. It alleged that the POEA erred in
applying Article 34(i) of the Labor Code; and in holding that the notice of employment, dated April 15,
1985, providing for a monthly salary of US$350.00 was the actual overseas employment contract instead of
the one dated May 12, 1985 which provided for a salary of US$260.00/month.
In affirming the POEA decision, the NLRC stated:
"x x x suffice it to state that in its aforestated Rejoinder respondent-appellant corporation admitted as "xxx
beyond question xxx that the contracts dated April 15, 1985 were amended or modified on May 12, 1985"
(Rollo 60), the latter sans "xxx the approval of the Department of Labor xxx" and/or the POEA, thus
within the context of prohibited practices under Art. 34 (i) of the Labor Code, as amended.

As validated by the POEA, the approved employment contracts of complainants-appellees were for
US$350.00 a month salary. Ms. Solis certified to the aforesaid salary as PNCC Recruitment Head (Rollo 25-
28); also, as per POEA Accreditation Department certification dated 25 June 1987. (Rollo 24).

xxxxxxxxx

Relative to the last assignment of error, respondent-appellant corporation insists that the POEA('s) basis for
the computation of the awarded differentials are erroneous for being without evidentiary basis or contrary
to the evidence.

It must be noted that complainants-appellees presented its (sic) claims (Annex "M", "N", "O", "P"; Rollo
122-136, 73-98) for differentials in overtime pay, sick leave and vacation leave benefits and completion
bonus, as well as its (sic) Exhibits "G" and "G-1", all of which served as POEA bases for entitlement (Rollo
181, 182) to the several money claims; and the formula bases for the aforestated computation were detailed
besides, in the assailed decision (pages 6, 7; Rollo 179, 180).

The record is bereft however, of evidence of compliance with the aforesaid employment contracts relative
to the aforesaid claims.

Absolutely no evidence appears to have been submitted for respondents-appellants relative to satisfaction of
the aforementioned claims: whether of payments for any overtime as authorized and rendered, or availment
of leave benefits or its computation (sic) to cash, etc., where the pertinent employment records, particularly
disbursements for services rendered, as well as for fringe benefits usually are for the account of the
deploying employer."[2]
A Motion for Reconsideration of this Resolution having been denied on August 23, 1991, petitioner filed
this petition for certiorari alleging that the public respondents committed grave abuse of discretion
amounting to lack or excess of jurisdiction in holding that the notice of employment dated April 15, 1985
was the actual employment contract and that Article 34(i) of the Labor Code was applicable.

We find no sufficient ground to annul the decision of the NLRC due to a capricious and whimsical exercise
of judgment. The petitioner's claim that the public respondent NLRC gravely abused its discretion in
holding that the private respondents were entitled to a monthly salary of US$350.00 pursuant to the April
15, 1985 employment contract has not been adequately substantiated. One of the axioms governing judicial
review through certiorari is that the administrative decision may properly be annulled or set aside only upon
clear showing that the administrative official or tribunal has acted with grave abuse of discretion. [3]

The assailed NLRC decision which affirmed the POEA ruling was based on the exhibits presented by the
parties, among which were the confirmation letters [4] issued to each of the private respondents and the
certification[5] issued by the POEA on June 25, 1987 stating that the approved rate for the position of a
company guard for the PNCC was US$350.00/month. More importantly, the NLRC relied upon the
admission made by the PNCC. Thus, it held:

"x x x suffice it to state that in its aforestated Rejoinder respondent-appellant corporation admitted
[underscoring supplied] as "xxx beyond question xxx that the contracts dated April 12, 1985 were amended or
modified on May 12, 1985" (Rollo 60), the latter sans "xxx the approval of the Department of Labor xxx"
and/or the POEA, thus within the context of prohibited practices under Art. 34 (i) of the Labor Code, as
amended."[6]

The PNCC now finds fault in that decision by saying that the April 15, 1985 document was but a mere
notice/offer of employment. Petitioner alleges further that it was never signed and accepted by private
respondents. Consequently, it never became a binding contract between the parties concerned. Petitioner
further stated that the real contract of employment was the one executed on May 12, 1985 which provided
for a monthly salary of US$260.00 and which was accepted by private respondents.

While the allegations of the PNCC may cast doubt on the real nature of the April 12, 1985 document, our
Civil Code[7]states:
"In case of doubt, all labor legislation and all labor contracts shall be construed in favor of the safety and
decent living for the laborers."
The mandate of the law for a liberal interpretation of labor contracts in favor of the working man was
applied in the case of Ditan vs. POEA Administrator[8] where We made the following pronouncement:
"A strict interpretation of the cold facts before us might support the position taken by the respondents.
However, we are dealing here not with an ordinary transaction but with a labor contract which deserves
special treatment and a liberal interpretation in favor of the worker x x x the Constitution mandates the
protection of labor and the sympathetic concern of the State for the working class conformably to the social
justice policy. x x x

xxx xxx

Under the policy of social justice, the law bends over backward to accommodate the interests of the
working class on the humane justification that those with less privileges in life should have more privileges
in law. x x x."
WHEREFORE, in view of the foregoing, the questioned Resolution of the NLRC is hereby
AFFIRMED. Consequently, this petition is DISMISSED. With costs.
SO ORDERED.

Narvasa, C.J., (Chairman), Feliciano, Regalado, and Nocon, JJ., concur.

*
NLRC Case No. POEA (L) 87-08-642, Raul Abrico, et. al. vs. Philippine National Construction
Corporation, et. al., May 15, 1991, Commissioner Domingo H. Zapanta, ponente, Commissioners Edna
Bonto-Perez and Rustico L. Diokno, concurring.
[1]
Decision, pp. 3-5; Records, pp. 181-183.
[2]
Resolution, pp. 12-14; Records, pp. 409-411.
[3]
Industrial Tower Sales, Inc. vs. Duma Sinsuat, 160 SCRA 19 (1988).
[4]
Annexes "A", "B”, "C", "D", Comment of Private Respondents; Rollo, pp. 81-84.
[5]
Annex "E", Comment of Private Respondents; Rollo, p. 85.
[6]
Supra, note 2.
[7]
Article 1702.
[8]
191 SCRA 823, 828, 829 (1990).

Copyright 2016 - Batas.org

 Supreme Court of the Philippines

270 Phil. 46
FIRST DIVISION
G.R. No. 79560, December 03, 1990
ANDRES E. DITAN, PETITIONER, VS. PHILIPPINE OVERSEAS EMPLOYMENT
ADMINISTRATION ADMINISTRATOR, NATIONAL LABOR RELATIONS COMMISSION,
ASIA-WORLD RECRUITMENT, INC., AND/OR INTRACO SALES CORPORATION,
RESPONDENTS.

DECISION
CRUZ, J.:
The petitioner had the rare experience of being taken hostage in 1984, along with a number of his co-
workers, by the rebels in Angola. His captivity for more than two months and the events that followed his
release are the subject of the present petition.
Andres E. Ditan was recruited by private respondent Intraco Sales Corporation, through its local agent, Asia
World, the other private respondent, to work in Angola as a welding supervisor. The contract was for nine
months, at a monthly salary of US$1,100.00 or US$275.00 weekly, and contained the required standard
stipulations for the protection of our overseas workers.
Arriving on November 30, 1984, in Luanda, capital of Angola, the petitioner was assigned as an ordinary
welder in the INTRACO central maintenance shop from December 2 to 25, 1984. On December 26, 1984,
he was informed, to his distress, that he would be transferred to Kafunfo, some 350 kilometers east of
Luanda. This was the place where, earlier that year, the rebels had attacked and kidnaped expatriate
workers, killing two Filipinos in the raid. Naturally, Ditan was reluctant to go. However, he was assured by
the INTRACO manager that Kafunfo was safe and adequately protected by government troops; moreover -
and this was more persuasive - he was told he would be sent home if he refused the new assignment. In the
end, with much misgiving, he relented and agreed.
On December 29, 1984, his fears were confirmed. The Unita rebels attacked the diamond mining site where
Ditan was working and took him and sixteen other Filipino hostages, along with other foreign workers. The
rebels and their captives walked through jungle terrain for 31 days to the Unita stronghold near the
Namibian border. They trekked for almost a thousand kilometers. They subsisted on meager fare. Some of
them had diarrhea. Their feet were blistered. It was only on March 16, 1985, that the hostages were finally
released after the intercession of their governments and the International Red Cross. Six days later, Ditan
and the other Filipino hostages were back in the Philippines.[1]
The repatriated workers had been assured by INTRACO that they would be given priority in re-
employment abroad, and eventually eleven of them were taken back. Ditan having been excluded, he filed
in June 1985 a complaint against the private respondents for breach of contract and various other
claims. Specifically, he sought the amount of US$4,675.00, representing his salaries for the unexpired 17
weeks of his contract; US$25,000.00 as war risk bonus; US$2,196.50 as the value of his lost belongings;
US$1,100 for unpaid vacation leave; and moral and exemplary damages in the sum of US$50,000.00, plus
attorney's fees.
All these claims were dismissed by POEA Administrator Tomas D. Achacoso in a decision dated January
27, 1987.[2] This was affirmed in toto by respondent NLRC in a resolution dated July 14, 1987,[3] which is
now being challenged in this petition.
Going over the record, we find that the public respondent correctly rejected the petitioner's claim for paid
vacation leave. The express stipulation in Clause 5 of the employment contract reads:
Should the Employee enter into a further 9 or 12 months contract at the completion contract, he will be
entitled to one month’s paid vacation before commencement of his second or subsequent contract.
It appears that the petitioner had not entered into a second contract with the employer after the expiration
of the first. Such re-employment was not a matter of right on the part of the petitioner but dependent on
the need for his skills in another project the employer might later be undertaking.
As regards the cost of his belongings, the evidence shows that they were not really lost but in fact returned
to him by the rebels prior to their release. If he had other properties that were not recovered, there was no
proof of their loss that could support his allegations. They were therefore also properly rejected.
We find, though, that the claims for breach of contract and war risk bonus deserve a little more reflection in
view of the peculiar circumstances of this case.
The fact that stands out most prominently in the record is the risk to which the petitioner was subjected
when he was assigned, after his reluctant consent, to the rebel-infested region of Kafunfo. This was a
dangerous area. This same place had earlier been the target of a rebel attack that had resulted in the death
of two Filipino workers and the capture of several others. Knowing all this, INTRACO still pressured
Ditan into agreeing to be transferred to that place, dismissing his initial objection and, more important,
threatening to send him home if he refused.
We feel that in failing to provide for the safety of the petitioner, the private respondents were clearly remiss
in the discharge of one of the primary duties of the employer. Worse, they not only neglected that duty but
indeed deliberately violated it by actually subjecting and exposing Ditan to a real and demonstrated
danger. It does not help to argue that he was not forced to go to Kafunfo and had the option of coming
home. That was a cruel choice, to say the least. The petitioner had gone to that foreign land in search of a
better life that he could share with his loved ones after his stint abroad. That choice would have required
him to come home empty-handed to the disappointment of an expectant family.
It is not explained why the petitioner was not paid for the unexpired portion of his contract which had 17
more weeks to go. The hostages were immediately repatriated after their release, presumably so they could
recover from their ordeal. The promise of INTRACO was that they would be given priority in re-
employment should their services be needed. In the particular case of the petitioner, the promise was not
fulfilled. It would seem that his work was terminated, and not again required, because it was really intended
all along to assign him only to Kafunfo.
The private respondents stress that the contract Ditan entered into called for his employment in Angola,
without indication of any particular place of assignment in the country. This meant he agreed to be assigned
to work anywhere in that country, including Kafunfo. When INTRACO assigned Ditan to that place in the
regular course of its business, it was merely exercising its rights under the employment contract that Ditan
had freely entered into. Hence, it is argued, he cannot now complain that there was a breach of that
contract for which he is entitled to monetary redress.
The private respondents also reject the claim for war risk bonus and point out that POEA Memorandum
Circular No. 4, issued pursuant to the mandatory war risk coverage provision in Section 2, Rule VI, of the
POEA Rules and Regulations on Overseas Employment, categorizing Angola as a war risk took effect only
on February 6, 1985, "after the petitioner's deployment to Angola on November 27, 1984." Consequently,
the stipulation could not be applied to the petitioner as it was not supposed to have a retroactive effect.
A strict interpretation of the cold facts before us might support the position taken by the
respondents. However, we are dealing here not with an ordinary transaction but with a labor contract which
deserves special treatment and a liberal interpretation in favor of the worker. As the Solicitor General
observes in his Comment supporting the petitioner, the Constitution mandates the protection of labor and
the sympathetic concern of the State for the working class conformably to the social justice policy. This is a
command we cannot disregard in the resolution of the case before us.
The paramount duty of this Court is to render justice through law. The law in this case allows two opposite
interpretations, one strictly in favor of the employers and the other liberally in favor of the worker. The
choice is obvious. We find, considering the totality of the circumstances attending this case, that the
petitioner is entitled to relief.
The petitioner went to Angola prepared to work as he had promised in accordance with the employment
contract he had entered into in good faith with the private respondents. Over his objection, he was sent to
a dangerous assignment and as he feared was taken hostage in a rebel attack that prevented him from
fulfilling his contract while in captivity. Upon his release, he was immediately sent home and was not paid
the salary corresponding to the unexpired portion of his contract. He was immediately repatriated with the
promise that he would be given priority in re-employment, which never came. To rub salt on the wound,
many of his co-hostages were re-employed as promised. The petitioner was left only with a bleak
experience and nothing to show for it except dashed hopes and a sense of rejection.
In these circumstances, the Court feels that the petitioner should be paid the salary corresponding to the 17
unserved weeks of his contract, which was terminated by the private respondents despite his willingness to
work out the balance of his term. In addition, to assuage the ordeal he underwent while in captivity by the
rebels, the Court has also decided in its discretion to award him nominal damages in the sum of
P20,000.00. This is not payment of the war risk claim which, as earlier noted, was not provided for in the
employment contract in question, or indemnification for any loss suffered by him. This is but a token of
the tenderness of the law towards the petitioning workman vis-a-vis the private respondents and their more
comfortable resources.
Under the policy of social justice, the law bends over backward to accommodate the interests of the
working class on the humane justification that those with less privileges in life should have more privileges
in law. That is why our judgment today must be for the petitioner.
WHEREFORE, the challenged resolution of the NLRC is hereby MODIFIED. The private respondents
are hereby DIRECTED jointly and severally to pay the petitioner: a) the current equivalent in Philippine
pesos of US$4,675.00, representing his unpaid salaries for the balance of the contract term; b) nominal
damages in the amount of P20,000.00; and c) 10% attorney's fees. No costs.
SO ORDERED.

Narvasa, (Chairman), Gancayco, Griño-Aquino, and Medialdea, JJ., concur.

[1]
Rollo, p. 47.
[2]
Ibid., pp. 46-54.
[3]
Id., pp. 65-69.

Supreme Court of the Philippines

230 Phil. 359

SECOND DIVISION
G.R. No. 62207, December 15, 1986
JUAN BONIFACIO, PETITIONER-APPELLANT, VS. GOVERNMENT SERVICE
INSURANCE SYSTEM

[MINISTRY OF EDUCATION CULTURE]

AND EMPLOYEES' COMPENSATION COMMISSION, RESPONDENTS-APPELLEES.

DECISION
FERNAN, J.:
Petition for review on certiorari of the decision of the Employees Compensation Commission dated August
19, 1982, affirming the denial by the Government Service Insurance System of petitioner's claim for benefits
under PD No. 626, as amended, for the death of his spouse, Lourdes Bonifacio.

The facts are undisputed.

The late Lourdes Bonifacio was a classroom teacher assigned to the district of Bagamanoc, Division of
Catanduanes, Ministry of Education and Culture from August, 1965 until she contracted carcinoma of the
breast with metastases to the gastro-intestinal tract and lungs which caused her death on October 5, 1978.

Dra. Corazon Yabes-Almirante of the Ospital ng Bagong Lipunan certified that the late Lourdes Bonifacio
underwent radical mastectomy for cancer of the breast in 1973. In 1976, when her ailment was noted to
have metastasized to her abdomen, she submitted herself to an operation known as "exploratory
laparotomy" in March of the same year. On September 1, 1978, she complained of "abdominal pain,
abdominal enlargement, vomiting, and failure to pass stools inspite of laxatives." Upon operation, it was
found that her entire gastro-intestinal tract was enveloped by carcinoma. Despite chemotherapy, she died
on October 5, 1978 from carcinoma of the breast metastatic to gastro-intestinal tract and lungs.

Thereafter a claim for death benefits under P.D. No. 626, as amended, was filed by petitioner with the
GSIS. The same was however denied on the ground that the decedent's principal ailment, carcinoma of the
breast with metastases to gastro-intestinal tract and lungs, is not an occupational disease for her particular
work as a teacher, nor is the risk of contracting said disease increased by her working conditions.

The Employees Compensation Commission, on appeal, affirmed the decision of the respondent System.

Petitioner now assails the decision of the respondent Commission on the following grounds:

a] The respondent Commission's affirmance of the denial by respondent System totally ignored the
Supreme Court's pronouncements on compensation cases; and

b] Under the law, in case of doubt in the implementation and interpretation of the provisions of the
Labor Code, including its implementing rules and regulations, the same shall be resolved in favor
of the laborer.

We hold that the GSIS and the Employees Compensation Commission did not err in denying petitioner's
claim.

A compensable sickness means "any illness definitely accepted as an occupational disease listed by the
Employees Compensation Commission, or any illness caused by employment subject to proof by the
employee that the risk of contracting the same is increased by working conditions. For this purpose, the
Commission is empowered to determine and approve occupational diseases and work related illnesses that
may be considered compensable based on peculiar hazards of employment." [Art. 167(1) Labor Code as
amended by P.D. No. 1368, effective May 1, 1978].

Thus, for the sickness or the resulting disability or death to be compensable, the sickness must be the result
of an accepted occupational disease listed by the Employees Compensation Commission [Annex "A" of the
Amended Rules on Employees Compensation], or any other sickness caused by employment subject to
proof by claimant that the risk of contracting the same is increased by working conditions. [Sec., 1, Rule II,
Amended Rules on Employees Compensation].

Carcinoma of the breast with metastases to the gastro-intestinal tract and lungs is not listed by the
Commission as an occupational disease. As to the "metastases to the gastro-intestinal tract and lungs" the
Commission lists such disease as occupational only in the following employment:

"Occupational Disease" Nature of Employment

16. Cancer of stomach and other lymphatic and Woodworkers, wood products industry
blood forming vessels; nasal cavity and sinuses carpenters, loggers and employees in pulp and
paper mills and plywood mills.
 17. Cancer of the lungs, liver and brain. Vinyl chloride workers, plastic workers.

[Annex A, Amended Rules on Employees Compensation, see p. 38, Rollo.]

The cancer which affected the deceased not being occupational in her particular employment, it became
incumbent upon petitioner to prove that the decedent's working conditions increased the risk of her
contracting the fatal illness. This onus, petitioner failed to satisfactorily discharge. We note the following
medical report on breast cancer which the Employees Compensation Commission cited in its decision and
which the petitioners failed to controvert:
"x x x Recent observations on the epidemeology of breast cancers suggest that it is intimately linked to 'estrogenic hormones'
[W.A.P. Anderson, Mosby, Pathology 5th edition, pp. 1217-1218]. Mammary carcinoma is likely to metastasize relatively
early to the regional lymph node's axillary and supra clavicular, if the primary site is in the outer half the breast. From thence
it spreads primarily to the bones, lungs, skin and subcutaneous tissues generally; less frequently to the brain. [Winrobe, et. al.,
Harrison's Principles of Internal Medicine, 7th edition pp. 584-585]." (pp. 3-4, ECC decision dated August 19, 1982).
Petitioner's contention that the decision of the Employees Compensation Commission totally ignored the
Supreme Court's pronouncements on compensation cases is unmeritorious. The petitioner evidently
overlooked that his claim is now within the ambit of the Labor Code and the rulings under the old law, Act
No. 3428, as amended, no longer control.

The old law as embodied particularly in Section 43 of RA No. 772 amending Act No. 3812, provided for
"the presumption of compensability and the rule on aggravation of illness, which favor the employee", and
"paved the way for the latitudinarian or expansive application of the Workmen's Compensation Law in
favor of the employee or worker." [Sulit v. ECC, 98 SCRA 483,489] The presumption in essence states that
in any proceeding for the enforcement of the claim for compensation under the Workmen's Compensation
Act "it shall be presumed in the absence of substantial evidence to the contrary that the claim comes within
the provisions of the said Act, that sufficient notice thereof was given, that the injury was not occasioned by
the willful intention of the injured employee to bring about the injury or death of himself or of another, that
the injury did not result solely from the intoxication of the injured employee while on duty, and that the
contents of verified medical and surgical reports introduced in evidence by claimants for compensation are
correct."

Thus, under the Workmen's Compensation Law, it is not necessary for the claimant to carry the burden of
proof to establish his case to the point of demonstration [Abana vs. Quisumbing, 22 SCRA 1278]. It is "not
necessary to prove that employment was the sole cause of the death or injury suffered by the employee. It is
sufficient to show that the employment had contributed to the aggravation or acceleration of such death or
ailment." [Fontesa vs. ECC, 22 SCRA 282] "Once the disease had been shown to have arisen in the course of
employment, it is presumed by law, in the absence of substantial evidence to the contrary, that it arose out
of it." [Hernandez vs. ECC, et. al. L-20202, May 31, 1965].

With this legal presumption in the old law, the burden of proof shifts to the employer and the employee no
longer suffers the burden of showing causation. Under the present Labor Code, the "latitudinarian or
expansive application of the Workmen's Compensation Law in favor of the employee or worker" no longer
prevails as the burden of showing proof of causation has shifted back to the employee particularly in cases
of sickness or injuries which are not accepted or listed as occupational by the Employees Compensation
Commission. As stated in Sulit vs. Employees Compensation Commission, [supra] "the Labor Code abolished the
presumption of compensability and the rule on aggravation of illness caused by the nature of the
employment."

While we do not dispute petitioner's contention that under the law, in case of doubt in the implementation
and interpretation of the provisions of the Labor Code, including its implementing rules and regulations, the
doubt shall be resolved in favor of the laborer, we find that the same has no application in this case since
the pertinent provisions of the Labor Code leave no room for doubt either in their interpretation or
application.

WHEREFORE, the petition is dismissed and the decisions of the GSIS and the Employees Compensation
Commission denying the claim, are affirmed. No costs.

SO ORDERED.

Feria, (Chairman), Alampay, Gutierrez, Jr., and Paras, JJ., concur.

Copyright 2016 - Batas.org

Supreme Court of the Philippines

256 Phil. 880

FIRST DIVISION

G.R. No. 75704, July 19, 1989

RUBBERWORLD (PHILS.), INC. AND ELPIDIO HIDALGO, PETITIONERS, VS. THE NATIONAL
LABOR RELATIONS COMMISSION (THIRD DIVISION) AND NESTOR MALABANAN,
RESPONDENTS.

DECISION

MEDIALDEA, J.:

This is a petition for certiorariunder Rule 65 of the Rules of Court seeking the annulment of the decision of
the respondent National Labor Relations Commission dated June 17, 1986 (p. 23, Rollo) in NLRC NCR
Case No. 6-2158-84 entitled "Nestor Malabananand Jonathan Transmil, Complainants, versus
Rubberworld(Phils.), Inc. and ElpidioHidalgo, Respondents", reversing the decision of the Labor Arbiter
which dismissed the complaint for illegal dismissal for lack of merit.

The antecedent facts are as follows:

Respondent Malabananwas employed by petitioner Rubberworld(Phils.), Inc. on September 25, 1978as an
ordinary clerk. In May, 1980, he was promoted to the position of production scheduler with a
corresponding salary increase. He was again transferred to the Inventory Control Section as stock clerk on
September 1, 1983.

On April 6, 1984, ElpidioHidalgo, the Plant I General Manager of petitioner company, received a copy of
the Financial Audit Report from the Internal Audit Department of the company showing a significant
material variance between the year-end actual inventory and that of the Cards (SC)/EDP Control Records.
As a result thereof, Noel Santiago, Section Head of the Inventory Control Section, where respondent
Malabananwas assigned, conducted an investigation of the reported discrepancies in the stock cards upon
the request of the Plant General Manager. Santiagothen submitted his report to the general manager
recommending the dismissal of respondent Malabanan.

Consequently, Malabanan'scase was endorsed to the Human Resources Division of petitioner company,
which conducted a reinvestigation on the matter and which affirmed the recommendation of the Inventory
Control Section Head for the termination of employment of respondent Malabanan.

On June 6, 1984, respondent Malabananwas dismisses by petitioner company.

On June 16, 1984, respondent Malabanan, along with another complainant named Jonathan Transmil, filed
a complaint for unfair labor practice and illegal dismissal against petitioner company alleging that they
(respondent Malabananand complainant Transmil) were members of the monthly salaried employees' union
affiliated with TUPAS; that petitioner company forced them to disaffiliate from the union; and that due to
their refusal to resign from the union, they were ultimately dismissed from employment by petitioner
company.

Petitioner companyon the other hand, denied complainants’ allegations and averred that respondent
Malabanan’sdismissal was due to gross and habitual neglect of his duty and not due to his union affiliation.

During the hearing of the case, the other complainant, Jonathan Transmilwithdrew from the case since he
already found another employment abroad.

On January 30, 1985, the Labor Arbiter rendered a decision (pp. 17-22, Rollo), the dispositiveportion of
which reads:

"WHEREFORE, premises considered, this case should be, as it is hereby, DISMISSED, for lack of merit.
"SO ORDERED."

Respondent Malabananappealed from the adverse decision to the respondent Commission. On June 17,
1986, respondent Commission reversed the appealed decision of the Labor Arbiter and stated, interalia:

"Confronted with this factual backgrounds, we find ourselves inclined to the view that the appealed decision
merits a reversal.

"x xx.

"WHEREFORE, premises considered, the appealed decision should be, as it is hereby REVERSED.
Consequently, the respondents are directed to reinstate complainant Nestor Malabananto his former
position as production scheduler, with full backwagesfrom the time he was illegally terminated up to actual
reinstatement, without loss of seniority rights and benefits appurtenant thereto.

"SO ORDERED."(pp. 23-27, Rollo)

The petitioner company moved for a reconsiderationon the ground that the respondent Commission's
decision is not in accordance with facts and evidence on record. On July 23, 1986, the said motion for
reconsideration was denied.

On September 3, 1986, petitioner filed the instant petition contending that the respondent Commission
committed grave abuse of discretion amounting to lack of jurisdiction in reversing the Labor Arbiter's
decision.

The two issues to be resolved in the instant case are: (1) whether or not the dismissal of respondent
Malabananis tainted with unfair labor practice; and (2) whether or not a just and valid cause exists for the
dismissal of private respondent Malabanan.

Petitioner alleges that the National Labor Relations Commission gravely erred in concluding that the
demotion of Malabananfrom production scheduler to a stock clerk at the Stock and Inventory Section was
intended to discourage Malabananfrom union membership. It argued that the Labor Arbiter was correct in
finding that the private respondent had not shown ample proof to the effect that he was a member of a
labor organization prior to his transfer to another position.

We believe that the foregoing contentions are impressed with merit. Art. 248 of the Labor Code, PD No.
442, as amended, provides:

"Art. 248. Unfair labor practices of employers. - It shall be unlawful for an employer to commit any of the
following unfair labor practices:

(a) To interfere with, restrain or coerce employees in the exercise of their right to self-organization;

"x xx."

The question of whether an employee was dismissed because of his union activities is essentially a question
of fact as to which the findings of the administrative agency concerned are conclusive and binding if
supported by substantial evidence. Substantial evidence has been defined as such relevant evidence as a
reasonable mind might accept as adequate to support a conclusion. It means such evidence which affords a
substantial basis from which the fact in issue can be reasonably inferred (Philippine Metal Foundries, Inc. v.
Court of industrial Relations, et. al., No. L-34948-49, May 15, 1979, 90 SCRA 135). The findings of the
Labor Arbiter on the non-existence of unfair labor practice on the part of the company are more in accord
and supported by the evidence submitted by the parties in the instant case, to wit:

"Complainant had stated that he wasamember of the monthly salaried employees union affiliated with
TUPAS. He, however, offered no proof to support his allegation. In fact, no evidence was presented to
prove the existence of such union. We [note] from the records that, as the usual practice, in cases like this
one, complainant is usually supported by the union of which he is a member. And ordinarily, the union
itself is impleadedas a co-complainant. Such circumstances, surprisingly, [are] not present in this case. In
fact, complainant categorically alleged that he had solicited the services of the PAFLU Labor Union in filing
this case. It is, indeed, surprising that complainant had to solicit the help of a labor union (PAFLU) of
which he was not a member instead of soliciting the aid of the labor union (TUPAS) of which he was
allegedly a member. These circumstances alone [destroy] the credibility of complainant's allegations." (p. 21,
Rollo).

Nowhere in the records can Wefind that the company actually performed positive acts to restrain the union
participation of private respondent. For one, it is doubtful whether Malabananwas really engaged in the
organization of a labor union affiliated with federation TUPAS. The only evidence presented by him to
prove this contention is his affidavit and that of his father. It is therefore, not in accordance with ordinary
experience and common practice that the private respondent pursued his battle alone, without the aid and
support of his co-members in the union and his federation especially in a case of serious nature as this one
involving company intervention with union activity.

As a rule, it is the prerogative of the company to promote, transfer or even demote its employees to other
positions when the interests of the company reasonably demand it. Unless there are instances which directly
point to interference by the company with the employees' right to self-organization, the transfer of private
respondent should be considered as within the bounds allowed by law. Furthermore, although private
respondent was transferred to a lower position, his original rank and salary remained undiminished, which
fact was not refuted or questioned by private respondent.

In view of the foregoing conclusions of the Labor Arbiter, We are compelled to agree with the latter that
the petitioner company did not commit any unfair labor practice in transferring and thereafter dismissing
private respondent.

The remaining issue to be resolved on this point is whether the dismissal of respondent Malabananwas for a
just and lawful cause. Article 282 of the Labor Code, as amended, provides:

"Article 282. Termination by employer. An employer may terminate an employment for any of the
following just causes:

x xx

b) Gross and habitual neglect by the employee of his duties;

x xx.”

Petitioner contends that private respondent Malabananwas guilty of gross negligence when he caused the
posting of incorrect entries in the stock card without counter checking the actual movement status of the
items at the warehouse, thereby resulting into unmanageable inaccuracies in the data posted in the stock
cards. The respondent Commission correctly ruled:

"Penultimately, even assuming for the sake of argument that herein complainant "posted entries in the stock
card without counter checking the actual movement status of the items at the warehouse, thereby resulting
in an inaccurate posting of data on the stock cards", to our impression does not constitute as a just cause for
dismissal. Records show that he was only transferred to the Inventory Control Section on September 1,
1983and was not so familiar and experienced as a stock clerk, and prior to his transfer, the record shows no
derogatory records in terms of his performance. His failure to carry out efficiently his duties as a stock clerk
is not so gross and habitual. In other words he was not notoriously negligent to warrant his severance from
the service. Considering that there is nothing on record that shows that he wilfullydefied instructions of his
superior with regards to his duties and that he gained personal benefit of the discrepancy, his dismissal is
unwarranted" (p. 26, Rollo).

It does not appear that private respondent Malabananis an incorrigible offender or that what he did inflicted
serious damage to the company so much so that his continuance in the service would be patently inimical to
the employer's interest. Assuming, ingratiaargumentithat the private respondent had indeed committed the
said mistakes in the posting of accurate data, this was only his first infraction with regard to his duties. It
would thus be cruel and unjust to mete out the drastic penalty of dismissal, for it is not proportionate to the
gravity of the misdeed.

In fact, the promotion of the private respondent from the position of ordinary clerk to production
scheduler establishes the presumption that his performance of his work is acceptable to the company. The
petitioner even admitted that it was due to heavy financial and business reverses that the company assigned
the private respondent to the position of Stock Clerk and not because of his unsatisfactory performance as
production scheduler (p. 6, Rollo). It has been held that there must be fair and reasonable criteria to be
used in selecting employees to be dismissed (AsiaworldPublishing House, Inc. v. Ople, No. L-56398, July
23, 1987, 152 SCRA 219).

It is worthy to note that the prerogative of management to dismiss or lay-off an employee must be done
without abuse of discretion, for what is at stake is not only petitioner's position, but also his means of
livelihood. This is so because the preservation of the lives of the citizens is a basic duty of the State, more
vital than the preservation of corporate profits (Euro-Linea, Phils., Inc. v. NLRC, L-75782, December 1,
1987, 156 SCRA 79).

The law regards the worker with compassion. Our society is a compassionate one. Where a penalty less
punitive would suffice, whatever missteps may be committed by the worker should not be visited by the
supreme penalty of dismissal. This is not only because of the law's concern for the working man. There is
in addition, his family to consider. After all, labor determinations should not only be secundumrationembut
also secundumcaritatem(Almira, et al., v. BF Goodrich Philippines, Inc., et al., G.R. No. L-34974, July 25,
1974, 58 SCRA 120).

ACCORDINGLY, the petition is DISMISSED for lack of merit. However, the decision of the public
respondent is hereby MODIFIED to the effect that petitioner company is ordered to reinstate private
respondent Nestor Malabananto the position of stock clerk or substantially equivalent position, with the
same rank and salary he is enjoying at the time of his termination, with three years backwagesand without
loss of seniority rights and benefits appurtenant thereto.

Should the reinstatement of the private respondent as herein ordered be rendered impossible by the
superventionof circumstances which prevent the same, the petitioner is further ordered to pay private
respondent separation pay equivalent to one (1) month's salary for every year of service rendered, computed
at his last rate of salary.

SO ORDERED.
Narvasa, (Chairman), Cruz, Gancayco, andGriño-Aquino, JJ.,concur.

Copyright 2016 - Batas.org

 Supreme Court of the Philippines

250 Phil. 129

EN BANC
G.R. No. 69870, November 29, 1988
NATIONAL SERVICE CORPORATION (NASECO) AND ARTURO L. PEREZ,
PETITIONERS, VS. THE HONORABLE THIRD DIVISION, NATIONAL LABOR
RELATIONS COMMISSION, MINISTRY OF LABOR AND EMPLOYMENT, MANILA AND
EUGENIA C. CREDO, RESPONDENTS.

[G.R. NO. 70295. NOVEMBER 29, 1988]

EUGENIA C. CREDO, PETITIONER, VS. NATIONAL LABOR RELATIONS COMMISSION,

NATIONAL SERVICES CORPORATION AND ARTURO L. PEREZ, RESPONDENTS.

DECISION
PADILLA, J.:
Consolidated special civil actions for certiorari seeking to review the decision* of the Third Division, National
Labor Relations Commission in Case No. 11-4944-83 dated 28 November 1984 and its resolution dated 16
January 1985 denying motions for reconsideration of said decision.

Eugenia C. Credo was an employee of the National Service Corporation (NASECO), a domestic
corporation which provides security guards as well as messengerial, janitorial and other similar manpower
services to the Philippine National Bank (PNB) and its agencies. She was first employed with NASECO as a
lady guard on 18 July 1975. Through the years, she was promoted to Clerk Typist, then Personnel Clerk
until she became Chief of Property and Records, on 10 March 1980. [1]

Sometime before 7 November 1983, Credo was administratively charged by Sisinio S. Lloren, Manager of
Finance and Special Project and Evaluation Department of NASECO, stemming from her non-compliance
with Lloren's memorandum, dated 11 October 1983, regarding certain entry procedures in the company's
Statement of Billings Adjustment. Said charges alleged that Credo "did not comply with Lloren's
instructions to place some corrections/additional remarks in the Statement of Billings Adjustment; and
when [Credo] was called by Lloren to his office to explain further the said instructions, [Credo] showed
resentment and behaved in a scandalous manner by shouting and uttering remarks of disrespect in the
presence of her co-employees."[2]

On 7 November 1983, Credo was called to meet Arturo L. Perez, then Acting General Manager of
NASECO, to explain her side before Perez and NASECO's Committee on Personnel Affairs in connection
with the administrative charges filed against her. After said meeting, on the same date, Credo was placed on
"Forced Leave" status for 15 days, effective 8 November 1983.[3]
Before the expiration of said 15-day leave, or on 18 November 1983, Credo filed a complaint, docketed as
Case No. 11-4944-83, with the Arbitration Branch, National Capital Region, Ministry of Labor and
Employment, Manila, against NASECO for placing her on forced leave, without due process. [4]

Likewise, while Credo was on forced leave, or on 22 November 1983, NASECO's Committee on Personnel
Affairs deliberated and evaluated a number of past acts of misconduct or infractions attributed to her.[5] As a
result of this deliberation, said committee resolved:
"1. That, respondent [Credo] committed the following offenses in the Code of Discipline, viz:

OFFENSE vs. Company Interest & Policies.

No. 3 - Any discourteous act to customer, officer and employee of client company or officer of the
Corporation.

OFFENSE vs. Public Moral

No. 7 - Exhibit marked discourtesy in the course of official duties or use of profane or insulting
language to any superior officer.

OFFENSE vs. Authority

No. 3 - Failure to comply with any lawful order or any instructions of a superior officer."

"2. That, Management has already given due consideration to respondent's [Credo] scandalous
actuations for several times in the past. Records also show that she was reprimanded for
some offense and did not question it. Management at this juncture, has already met its
maximum tolerance point so it has decided to put an end to respondent's [Credo] being an
undesirable employee."[6]
The committee recommended Credo's termination, with forfeiture of benefits. [7]

On 1 December 1983, Credo was called again to the office of Perez to be informed that she was being
charged with certain offenses. Notably, these offenses were those which NASECO's Committee on
Personnel Affairs already resolved, on 22 November 1983 to have been committed by Credo.

In Perez's office, and in the presence of NASECO's Committee on Personnel Affairs, Credo was made to
explain her side in connection with the charges filed against her; however, due to her failure to do so,[8] she
was handed a Notice of Termination, dated 24 November 1983, and made effective 1 December 1983. [9]

Hence, on 6 December 1983, Credo filed a supplemental complaint for illegal dismissal in Case No. 11-
4944-83, alleging absence of just or authorized cause for her dismissal and lack of opportunity to be
heard.[10]

After both parties had submitted their respective position papers, affidavits and other documentary evidence
in support of their claims and defenses, on 9 May 1984, the labor arbiter rendered a decision: 1) dismissing
Credo's complaint, and 2) directing NASECO to pay Credo separation pay equivalent to one half month's
pay for every year of service.[11]

Both parties appealed to respondent National Labor Relations Commission (NLRC) which, on 28
November 1984, rendered a decision: 1) directing NASECO to reinstate Credo to her former position, or
substantially equivalent position with six (6) months' backwages and without loss of seniority rights and
other privileges appertaining thereto, and 2) dismissing Credo's claim for attorney's fees, moral and
exemplary damages. As a consequence, both parties filed their respective motions for reconsideration, [12]
which the NLRC denied in a resolution of 16 January 1985. [13]

Hence, the present recourse by both parties.

In G.R. No. 68970, petitioners challenge as grave abuse of discretion the dispositive portion of the 28
November 1984 decision which ordered Credo's reinstatement with backwages. [14] Petitioners contend that
in arriving at said questioned order, the NLRC acted with grave abuse of discretion in finding that: 1)
petitioners violated the requirements mandated by law on termination, 2) petitioners failed in the burden of
proving that the termination of Credo was for a valid or authorized cause, 3) the alleged infractions
committed by Credo were not proven or, even if proved, could be considered to have been condoned by
petitioners, and 4) the termination of Credo was not for a valid or authorized cause.[15]

On the other hand, in G.R. No. 70295, petitioner Credo challenges as grave abuse of discretion the
dispositive portion of the 28 November 1984 decision which dismissed her claim for attorney's fees, moral
and exemplary damages and limited her right to backwages to only six (6) months.[16]

As guidelines for employers in the exercise of their power to dismiss employees for just causes, the law
provides that:
"Section 2. Notice of dismissal. – Any employer who seeks to dismiss a worker shall furnish him a written
notice stating the particular acts or omission constituting the grounds for his dismissal. x x x

"Section 5. Answer and Hearing. – The worker may answer the allegations stated against him in the notice
of dismissal within a reasonable period from receipt of such notice. The employer shall afford the worker
ample opportunity to be heard and to defend himself with the assistance of his representative, if he so
desires.

"Section 6. Decision to dismiss. – The employer shall immediately notify a worker in writing of a decision to
dismiss him stating clearly the reasons therefor." [17]
These guidelines mandate that the employer furnish an employee sought to be dismissed two (2) written
notices of dismissal before a termination of employment can be legally effected. These are the notice which
apprises the employee of the particular acts or omissions for which his dismissal is sought and the
subsequent notice which informs the employee of the employer's decision to dismiss him.

Likewise, a reading of the guidelines in consonance with the express provisions of law on protection to
labor[18] (which encompasses the right to security of tenure) and the broader dictates of procedural due
process necessarily mandate that notice of the employer's decision to dismiss an employee, with reasons
therefor, can only be issued after the employer has afforded the employee concerned ample opportunity to
be heard and to defend himself.

In the case at bar, NASECO did not comply with these guidelines in effecting Credo's dismissal. Although
she was apprised and "given the chance to explain her side" of the charges filed against her, this chance was
given so perfunctorily, thus rendering illusory Credo's right to security of tenure. That Credo was not given
ample opportunity to be heard and to defend herself is evident from the fact that the compliance with the
injunction to apprise her of the charges filed against her and to afford her a chance to prepare for her
defense was dispensed in only a day. This is not effective compliance with the legal requirements
aforementioned.

The fact also that the Notice of Termination of Credo's employment (or the decision to dismiss her) was
dated 24 November 1983 and made effective 1 December 1983 shows that NASECO was already bent on
terminating her services when she was informed on 1 December 1983 of the charges against her, and that
any hearing which NASECO thought of affording her after 24 November 1983 would merely be pro forma or
an exercise in futility.

Besides, Credo's mere non-compliance with Loren's memorandum regarding the entry procedures in the
company's Statement of Billings Adjustment did not warrant the severe penalty of dismissal. The NLRC
correctly held that:
"x x x, on the charge of gross discourtesy, the CPA found in its Report, dated 22 November 1983 that, 'In
the process of her testimony/explanations she again exhibited a conduct unbecoming in front of NASECO
Officers and argued to Mr. S. S. Lloren in a sarcastic and discourteous manner, notwithstanding, the fact
that she was inside the office of the Acctg. General Manager.' Let it be noted, however, that the Report did
not even describe how the socalled 'conduct unbecoming' or 'discourteous manner' was done by
complainant. Anent the sarcastic' argument of complainant, the purported transcript[19] of the meeting held
on 7 November 1983 does not indicate any sarcasm on the part of complainant. At the most, complainant
may have sounded insistent or emphatic about her work being more complete than the work of Ms. de
Castro, yet, the complaining officer signed the work of Ms. de Castro and did not sign hers.

"As to the charge of insubordination, it may be conceded, albeit unclear, that complainant failed 'to place
some corrections/additional remarks in the Statement of Billings Adjustments' as instructed. However,
under the circumstances obtaining, where complainant strongly felt that she was being discriminated against
by her superior in relation to other employees, we are of the considered view and so hold, that a reprimand
would have sufficed for the infraction, but certainly not termination from services. [20]
As this Court has ruled:
"x x x where a penalty less punitive would suffice, whatever missteps may be committed by labor ought not
to be visited with a consequence so severe. It is not only because of the law's concern for the workingman.
There is, in addition, his family to consider. Unemployment brings untold hardships and sorrows on those
dependent on the wage-earner."[21]
Of course, in justifying Credo's termination of employment, NASECO claims as additional lawful causes for
dismissal Credo's previous and repeated acts of insubordination, discourtesy and sarcasm towards her
superior officers, alleged to have been committed from 1980 to July 1983. [22]

If such acts of misconduct were indeed committed by Credo, they are deemed to have been condoned by
NASECO. For instance, sometime in 1980, when Credo allegedly "reacted in a scandalous manner and
raised her voice" in a discussion with NASECO's Acting head of the Personnel Administration,[23] no
disciplinary measure was taken or meted against her. Nor was she even reprimanded when she allegedly
talked "in a shouting or yelling manner" with the Acting Manager of NASECO's Building Maintenance and
Services Department in 1980,[24] or when she allegedly "shouted" at NASECO's Corporate Auditor "in front
of his subordinates displaying arrogance and unruly behavior" in 1980, or when she allegedly shouted at
NASECO's Internal Control Consultant in 1981.[25] But then, in sharp contrast to NASECO's penchant for
ignoring the aforesaid acts of misconduct, when Credo committed frequent tardiness in August and
September 1983, she was reprimanded.[26]

Even if the allegations of improper conduct (discourtesy to superiors) were satisfactorily proven,
NASECO's condonation thereof is gleaned from the fact that on 4 October 1983, Credo was given a salary
adjustment for having performed in the job "at least [satisfactorily]," [27] and she was then rated "Very
Satisfactory"[28] as regards job performance, particularly in terms of quality of work, quantity of work,
dependability, cooperation, resourcefulness and attendance.

Considering that the acts or omissions for which Credo's employment was sought to be legally terminated
were insufficiently proved, as to justify dismissal, reinstatement is proper. For "absent the reason which gave
rise to [the employee's] separation from employment, there is no intention on the part of the employer to
dismiss the employee concerned." [29] And, as a result of having been wrongfully dismissed, Credo is entitled
to three (3) years of backwages without deduction and qualification.[30]

However, while Credo's dismissal was effected without procedural fairness, an award of exemplary damages
in her favor can only be justified if her dismissal was effected in a wanton, fraudulent, oppressive or
malevolent manner.[31] A judicious examination of the record manifests no such conduct on the part of
management. However, in view of the attendant circumstances in the case, i.e., lack of due process in
effecting her dismissal, it is reasonable to award her moral damages. And, for having been compelled to
litigate because of the unlawful actuations of NASECO, a reasonable award for attorney's fees in her favor
is in order.

In NASECO's comment[32] in G.R. No. 70295, it is belatedly argued that the NLRC has no jurisdiction to
order Credo's reinstatement. NASECO claims that, as a government corporation (by virtue of its being a
subsidiary of the National Investment and Development Corporation (NIDC), a subsidiary wholly owned
by the Philippine National Bank (PNB), which in turn is a government owned corporation), the terms and
conditions of employment of its employees are governed by the Civil Service Law, rules and regulations. In
support of this argument, NASECO cites National Housing Corporation vs. Juco, [33] where this Court held
that "There should no longer be any question at this time that employees of government-owned or
controlled corporations are governed by the civil service law and civil service rules and regulations."

It would appear that, in the interest of justice, the holding in said case should not be given retroactive effect,
that is, to cases that arose before its promulgation on 17 January 1985. To do otherwise would be
oppressive to Credo and other employees similarly situated, because under the same 1973 Constitution but
prior to the ruling in National Housing Corporation vs. Juco, this Court had recognized the applicability of the
Labor Code to, and the authority of the NLRC to exercise jurisdiction over, disputes involving terms and
conditions of employment in government-owned or controlled corporations, among them, the National
Service Corporation (NASECO).[34]

Furthermore, in the matter of coverage by the civil service of government-owned or controlled

corporations, the 1987 Constitution starkly varies from the 1973 Constitution, upon which National Housing
Corporation vs. Juco is based. Under the 1973 Constitution, it was provided that:
"The civil service embraces every branch, agency, subdivision, and instrumentality of the Government,
including every government-owned or controlled corporation. x x x" [35]
On the other hand, the 1987 Constitution provides that:
"The civil service embraces all branches, subdivisions, instrumentalities, and agencies of the Government,
including government-owned or controlled corporations with original charter."[36] (underlining supplied)
Thus, the situations sought to be avoided by the 1973 Constitution and expressed by the Court in the
National Housing Corporation case in the following manner -
"The infirmity of the respondents' position lies in its permitting a circumvention or emasculation of Section
1, Article XII-B of the Constitution. It would be possible for a regular ministry of government to create a
host of subsidiary corporations under the Corporation Code funded by a willing legislature. A government-
owned corporation could create several subsidiary corporations. These subsidiary corporations would enjoy
the best of two worlds. Their officials and employees would be privileged individuals, free from the strict
accountability required by the Civil Service Decree and the regulations of the Commission on Audit. Their
incomes would not be subject to the competitive restraints of the open market nor to the terms and
conditions of civil service employment. Conceivably, all government-owned or controlled corporations
could be created, no longer by special charters, but through incorporations under the general law. The
constitutional amendment including such corporations in the embrace of the civil service would cease to
have application. Certainly, such a situation cannot be allowed to exist." [37]
appear relegated to relative insignificance by the 1987 Constitutional provision that the Civil Service
embraces government-owned or controlled corporations with original charter; and, therefore, by clear
implication, the Civil Service does not include government-owned or controlled corporations which are
organized as subsidiaries of government-owned or controlled corporations under the general corporation
law.

The proceedings in the 1986 Constitutional Commission also shed light on the Constitutional intent and
meaning in the use of the phrase "with original charter." Thus

"THE PRESIDING OFFICER (Mr Trenas). Commissioner Romulo is recognized

MR. ROMULO. I beg the indulgence of the Committee. I was reading the wrong provision

I refer to Section 1, subparagraph 1 which reads:

The Civil Service embraces all branches, subdivisions, instrumentalities and agencies of the government,
including government-owned or controlled corporations.

My query: Is Philippine Airlines covered by this provision?

MR. FOZ. Will the Commissioner please state his previous question?

MR. ROMULO. The phrase on line 4 of Section 1, subparagraph 1, under the Civil Service Commission,
says: "including government-owned or controlled corporations." Does that include a corporation, like the
Philippine Airlines which is government-owned or controlled?

MR. FOZ. I would like to throw a question to the Commissioner. Is the Philippine Airlines controlled by
the government in the sense that the majority of stocks are owned by the government?

MR. ROMULO. It is owned by the GSIS. So, this is what we might call a tertiary corporation. The GSIS is
owned by the government. Would this be covered because the provision says "including government-owned
or controlled corporations."

MR. FOZ. The Philippine Airlines was established as a private corporation. Later on, the government,
through the GSIS, acquired the controlling stocks. Is that not the correct situation?

MR. ROMULO. That is true as Commissioner Ople is about to explain. There was apparently a Supreme
Court decision that destroyed that distinction between a government-owned corporation created under the
Corporation Law and a government-owned corporation created by its own charter.
MR. FOZ. Yes, we recall the Supreme Court decision in the case of NHA vs. Juco to the effect that all
government corporations irrespective of the manner of creation, whether by special charter or by the private
Corporation Law, are deemed to be covered by the civil service because of the wide-embracing definition
made in this section of the existing 1973 Constitution. But we recall the response to the question of
Commissioner Ople that our intendment in this provision is just to give a general description of the civil
service. We are not here to make any declaration as to whether employees of government-owned or
controlled corporations are barred from the operation of laws, such as the Labor Code of the Philippines.
MR. ROMULO. Yes.

MR. OPLE. May I be recognized, Mr. Presiding Officer, since my name has been mentioned by both sides.

MR. ROMULO. I yield part of my time.

THE PRESIDING OFFICER (Mr. Trenas). Commissioner Ople is recognized.

MR. OPLE. In connection with the coverage of the Civil Service Law in Section 1 (1), may I volunteer some
information that may be helpful both to the interpellator and to the Committee. Following the proclamation
of martial law on September 21, 1972, this issue of the coverage of the Labor Code of the Philippines and of
the Civil Service Law almost immediately arose. I am, in particular, referring to the period following the
coming into force and effect of the Constitution of 1973, where the Article on the Civil Service was
supposed to take immediate force and effect. In the case of LUZTEVECO, there was a strike at the time.
This was a government-controlled and government-owned corporation. I think it was owned by the PNOC
with just the minuscule private shares left. So, the Secretary of Justice at that time, Secretary Abad Santos,
and myself sat down, and the result of that meeting was an opinion of the Secretary of Justice - which
became binding immediately on the government - that government corporations with original charters, such
as the GSIS, were covered by the Civil Service Law and corporations spun off from the GSIS, which we
called secondgeneration corporations functioning as private subsidiaries, were covered by the Labor Code.
Samples of such secondgeneration corporations were the Philippine Airlines, the Manila Hotel and the
Hyatt. And that demarcation worked very well. In fact, all of these companies I have mentioned as
examples, except for the Manila Hotel, had collective bargaining agreements. In the Philippine Airlines,
there were, in fact, three collective bargaining agreements; one, for the ground people or the PALIA; one,
for the flight attendants or the PASAC; and one for the pilots of the ALPAC. How then could a
corporation like that be covered by the Civil Service law? But, as the Chairman of the Committee pointed
out, the Supreme Court decision in the case of NHA vs. Juco unrobed the whole thing. Accordingly, the
Philippine Airlines, the Manila Hotel and the Hyatt are now considered under that decision covered by the
Civil Service Law. I also recall that in the emergency meeting of the Cabinet convened for this purpose at
the initiative of the Chairman of the Reorganization Commission, Armand Fabella, they agreed to allow the
CBAs to lapse before applying the full force and effect of the Supreme Court decision. So, we were in the
awkward situation when the new government took over. I can agree with Commissioner Romulo when he
said that this is a problem which I am not exactly sure we should address in the deliberations on the Civil
Service Law or whether we should be content with what the Chairman said - that Section 1 (1) of the Article
on the Civil Service is just a general description of the coverage of the Civil Service and no more.

Thank you, Mr. Presiding Officer.

MR. ROMULO. Mr. Presiding Officer, for the moment, I would be satisfied if the Committee puts on
records that it is not their intent by this provision and the phrase "including government-owned or
controlled corporations" to cover such companies as the Philippine Airlines.

MR. FOZ. Personally, that is my view. As a matter of fact, when this draft was made, my proposal was really
to eliminate, to drop from the provision, the phrase "including government-owned or controlled
corporations."

MR. ROMULO. Would the Committee indicate that that is the intent of this provision?

MR. MONSOD. Mr. Presiding Officer, I do not think the Committee can make such a statement in the face
of an absolute exclusion of government-owned or controlled corporations. However, this does not preclude
the Civil Service Law to prescribe different rules and procedures, including emoluments for employees of
proprietary corporations, taking into consideration the nature of their operations. So, it is a general coverage
but it does not preclude a distinction of the rules between the two types of enterprises.

MR. FOZ. In other words, it is something that should be left to the legislature to decide. As I said before,
this is just a general description and we are not making any declaration whatsoever.

MR. MONSOD. Perhaps if Commissioner Romulo would like a definitive understanding of the coverage
and the Gentleman wants to exclude government-owned or controlled corporations like Philippine Airlines,
then the recourse is to offer an amendment as to the coverage, if the Commissioner does not accept the
explanation that there could be a distinction of the rules, including salaries and emoluments.

MR. ROMULO. So as not to delay the proceedings, I will reserve my right to submit such an amendment.
 xxx xxx xxx

THE PRESIDING OFFICER (Mr. Trenas). Commissioner Romulo is recognized.

MR. ROMULO. On page 2, line 5, I suggest the following amendment after "corporations": Add a comma
(,) and the phrase EXCEPT THOSE EXERCISING PROPRIETARY FUNCTIONS.

THE PRESIDING OFFICER (Mr. Trenas). What does the Committee say?
SUSPENSION OF SESSION

MR. MONSOD. May we have a suspension of the session?

THE PRESIDING OFFICER (Mr. Trenas). The session is suspended.

It was 7:16 p.m.

RESUMPTION OF SESSION

At 7:21 p.m., the session was resumed.

THE PRESIDING OFFICER (Mr. Trenas). The session is resumed.

Commissioner Romulo is recognized.

MR. ROMULO. Mr. Presiding Officer, I am amending my original proposed amendment to now read as
follows: "including government-owned or controlled corporations WITH ORIGINAL CHARTERS." The
purpose of this amendment is to indicate that government corporations such as the GSIS and SSS, which
have original charters, fall within the ambit of the civil service. However, corporations which are subsidiaries
of these chartered agencies such as the Philippine Airlines, Manila Hotel and Hyatt are excluded from the
coverage of the civil service.

THE PRESIDING OFFICER (Mr. Trenas). What does the Committee say?

MR. FOZ. Just one question, Mr. Presiding Officer. By the term "original charters," what exactly do we
mean?

MR. ROMULO. We mean that they were created by law, by an act of Congress, or by special law.

MR. FOZ. And not under the general corporation law.

MR. ROMULO. That is correct. Mr. Presiding Officer.

MR. FOZ. With that understanding and clarification, the Committee accepts the amendment.

MR. NATIVIDAD. Mr. Presiding Officer, so those created by the general corporation law are out.
MR. ROMULO. That is correct."[38]

On the premise that it is the 1987 Constitution that governs the instant case because it is the Constitution in
place at the time of decision thereof, the NLRC has jurisdiction to accord relief to the parties. As an
admitted subsidiary of the NIDC, in turn a subsidiary of the PNB, the NASECO is a government-owned or
controlled corporation without original charter.

Dr. Jorge Bocobo, in his Cult of Legalism, cited by Mr. Justice Perfecto in his concurring opinion in Gomez
vs. Government Insurance Board (L-602, March 31, 1947, 44 O.G. No. 8, pp. 2687, 2694; also published in 78
Phil. 221) on the effectivity of the principle of social justice embodied in the 1935 Constitution, said:
"Certainly, this principle of social justice in our Constitution as generously conceived and so tersely phrased,
was not included in the fundamental law as a mere popular gesture. It was meant to (be) a vital, articulate,
compelling principle of public policy. It should be observed in the interpretation not only of future
legislation, but also of all laws already existing on November 15, 1935. It was intended to change the spirit
of our laws, present and future. Thus, all the laws which on the great historic event when the
Commonwealth of the Philippines was born, were susceptible of two interpretations - strict or liberal,
against or in favor of social justice, now have to be construed broadly in order to promote and achieve
social justice. This may seem novel to our friends, the advocates of legalism, but it is the only way to give life
and significance to the above-quoted principle of the Constitution. If it was not designed to apply to these
existing laws, then it would be necessary to wait for generations until all our codes and all our statutes shall
have been completely changed by removing every provision inimical to social justice, before the policy of
social justice can become really effective. That would be an absurd conclusion. It is more reasonable to hold
that this constitutional principle applies to all legislation in force on November 15, 1935, and all laws
thereafter passed."
WHEREFORE, in view of the foregoing, the challenged decision of the NLRC is AFFIRMED with
modifications. Petitioners in G.R. No. 69870, who are the private respondents in G.R. No. 70295, are
ordered to: 1) reinstate Eugenia C. Credo to her former position at the time of her termination, or if such
reinstatement is not possible, to place her in a substantially equivalent position, with three (3) years
backwages, from 1 December 1983, without qualification or deduction, and without loss of seniority rights
and other privileges appertaining thereto, and 2) pay Eugenia C. Credo P5,000.00 for moral damages and
P5,000.00 for attorney's fees.

If reinstatement in any event is no longer possible because of supervening events, petitioners in G.R. No.
69870, who are the private respondents in G.R. No. 70295 are ordered to pay Eugenia C. Credo, in addition
to her backwages and damages as above described, separation pay equivalent to one-half month's salary for
every year of service, to be computed on her monthly salary at the time of her termination on 1 December
1983.

SO ORDERED.

Fernan, C.J., Melencio-Herrera, Paras, Feliciano, Gancayco, Bidin, Sarmiento, Cortes, Griño-Aquino, Medialdea, and
Regalado, JJ., concur.
Gutierrez, Jr., J., concurs in the result.
Cruz, J., see separate concurrence.
Narvasa, J., on leave.

*
Signed by Guillermo C. Medina, Presiding Commissioner, Gabriel M. Gatchalian and Miguel B. Varela,
Commissioners; the last one concurring in the result.
[1]
Rollo (G.R. No. 69870), p. 122
[2]
Ibid., p. 123
[3]
Ibid.
[4]
Ibid., p. 22
[5]
Ibid., p. 62
[6]
Ibid., p. 63
[7]
Ibid.
[8]
Ibid., p. 66
[9]
Ibid., p. 65
[10]
Ibid., p. 25
[11]
Ibid., p. 104
[12]
Ibid., p. 126
[13]
Ibid., p. 148
[14]
Ibid., p. 8
[15]
Ibid.
[16]
Rollo, (G.R. No. 70295), p. 8
[17]
Rule XIV, Book V, Implementing Rules and Regulations
[18]
Constitution (1973), Art. II, Sec. 9; Constitution (1987), Art. II, Sec. 18; Labor Code, Art. III
[19]
Rollo, (G.R. No. 69870), p. 57-59
[20]
Ibid., p. 125
[21]
Almira vs. B.F. Goodrich Philippine, Inc., 58 SCRA 120
[22]
Rollo, (G.R. No. 69870), p. 2-5
[23]
Ibid., p. 13
[24]
Ibid.
[25]
Ibid.
[26]
Ibid.
[27]
Ibid., p. 91
[28]
Ibid., p. 78
[29]
Pepito vs. Secretary of Labor, 98 SCRA 454
[30]
Ibid.
[31]
Civil Code, Art. 2232
[32]
Rollo (G.R. No. 70295), p. 125
[33]
134 SCRA 172
[34]
Philippine Air Line, Inc. vs. NLRC, 124 SCRA 583; Philippine Air Lines, Inc. vs. NLRC, 126 SCRA 223 and
National Service Corporation vs. Leogardo, Jr., 130 SCRA 502
[35]
Constitution, 1973, Art. II-B, Sec. 1(1)
[36]
Constitution (1987), Art. IX-B, Sec. 2(1)
[37]
134 SCRA 182-183
[38]
Record of the Constitutional Commission, Vol. I, pp. 583-585

CONCURRING

CRUZ, J.:

While concurring with Mr. Justice Padilla's well-researched ponencia, I have to express once again my
disappointment over still another avoidable ambiguity in the 1987 Constitution.
It is clear now from the debates of the Constitutional Commission that the government-owned or
controlled corporations included in the Civil Service are those with legislative charters. Excluded are its
subsidiaries organized under the Corporation Code.

If that was the intention, the logical thing. I should imagine, would have been to simply say so. This would
have avoided the suggestion that there are corporations with duplicate charters as distinguished from those
with original charters.

All charters are original regardless of source unless they are amended. That is the acceptable distinction. Under
the provision, however, the charter is still and always original even if amended as long it was granted by the
legislature.

It would have been clearer, I think, to say "including government owned or controlled corporations with
legislative charters." Why this thought did not occur to the Constitutional Commission places one - again - in
needless puzzlement.

Copyright 2016 - Batas.org

 Supreme Court of the Philippines

256 Phil. 1079

THIRD DIVISION
G.R. No. 85279, July 28, 1989
SOCIAL SECURITY SYSTEM EMPLOYEES ASSOCIATION (SSSEA), DIONISIO T.
BAYLON, RAMON MODESTO, JUANITO MADURA, REUBEN ZAMORA, VIRGILIO DE
ALDAY, SERGIO ARANTE, PLACIDO AGUSTIN, VIRGILIO MAGPAYO, PETITIONERS,
VS. THE COURT OF APPEALS, SOCIAL SECURITY SYSTEM (SSS), HON. CEZAR C.
PERALEJO, RTC, BRANCH 98, QUEZON CITY, RESPONDENTS.

DECISION
CORTES, J.:
Primarily, the issue raised in this petition is whether or not the Regional Trial Court can enjoin the Social
Security System Employees Association (SSSEA) from striking and order the striking employees to return to
work. Collaterally, it is whether or not employees of the Social Security System (SSS) have the right to
strike.
The antecedents are as follows:
On June 11, 1987, the SSS filed with the Regional Trial Court of Quezon City a complaint for damages with
a prayer for a writ of preliminary injunction against petitioners, alleging that on June 9, 1987, the officers
and members of SSSEA staged an illegal strike and barricaded the entrances to the SSS Building, preventing
non-striking employees from reporting for work and SSS members from transacting business with the SSS;
that the strike was reported to the Public Sector Labor-Management Council, which ordered the strikers to
return to work; that the strikers refused to return to work; and that the SSS suffered damages as a result of
the strike. The complaint prayed that a writ of preliminary injunction be issued to enjoin the strike and that
the strikers be ordered to return to work; that the defendants (petitioners herein) be ordered to pay
damages; and that the strike be declared illegal.
It appears that the SSSEA went on strike after the SSS failed to act on the union's demands, which included:
implementation of the provisions of the old SSS-SSSEA collective bargaining agreement (CBA) on check-
off of union dues; payment of accrued overtime pay, night differential pay and holiday pay; conversion of
temporary or contractual employees with six (6) months or more of service into regular and permanent
employees and their entitlement to the same salaries, allowances and benefits given to other regular
employees of the SSS; and payment of the children's allowance of P30.00, and after the SSS deducted certain
amounts from the salaries of the employees and allegedly committed acts of discrimination and unfair labor
practice's [Rollo; pp. 21-24.]
The court a quo, on June 11, 1987, issued a temporary restraining order pending resolution of the
application for a writ of preliminary injunction [Rollo, p. 71.] In the meantime, petitioners filed a motion to
dismiss alleging the trial court's lack of jurisdiction over the subject matter [Rollo, pp. 72-82.] To this
motion, the SSS filed an opposition, reiterating its prayer for the issuance of a writ of injunction [Rollo, pp.
209-222.] On July 22, 1987, in a four-page order, the court a quo denied the motion to dismiss and
converted the restraining order into an injunction upon posting of a bond, after finding that the strike was
illegal [Rollo, pp. 83-86.] As petitioners' motion for the reconsideration of the aforesaid order was also
denied on August 14, 1988 [Rollo, p. 94], petitioners filed a petition for certiorari and prohibition with
preliminary injunction before this Court. Their petition was docketed as G.R. No. 79577. In a resolution
dated October 21, 1987, the Court, through the Third Division, resolved to refer the case to the Court of
Appeals. Petitioners filed a motion for reconsideration thereof, but during its pendency the Court of
Appeals on March 9, 1988 promulgated its decision on the referred case [Rollo, pp. 130-137.] Petitioners
moved to recall the Court of Appeals’ decision. In the meantime, the Court, on June 29, 1988 denied the
motion for reconsideration in G.R. No. 79577 for being moot and academic. Petitioners’ motion to recall
the decision of the Court of Appeals was also denied in view of this Court's denial of the motion for
reconsideration [Rollo, pp. 141-143.] Hence, the instant petition to review the decision of the Court of
Appeals [Rollo, pp. 12-37.]
Upon motion of the SSS on February 6, 1989, the Court issued a temporary restraining order enjoining the
petitioners from staging another strike or from pursuing the notice of strike they filed with the Department
of Labor and Employment on January 25, 1989 and to maintain the status quo [Rollo, pp. 151-152.]
The Court, taking the comment as answer, and noting the reply and supplemental reply filed by petitioners,
considered the issues joined and the case submitted for decision.
The position of the petitioners is that the Regional Trial Court had no jurisdiction to hear the case initiated
by the SSS and to issue the restraining order and the writ of preliminary injunction, as jurisdiction lay with
the Department of Labor and Employment or the National Labor Relations Commission, since the case
involves a labor dispute.
On the other hand, the SSS advances the contrary view, on the ground that the employees of the SSS are
covered by civil service laws and rules and regulations, not the Labor Code, therefore they do not have the
right to strike. Since neither the DOLE nor the NLRC has jurisdiction over the dispute, the Regional Trial
Court may enjoin the employees from striking.
In dismissing the petition for certiorari and prohibition with preliminary injunction filed by petitioners, the
Court of Appeals held that since the employees of the SSS, are government employees, they are not allowed
to strike, and may be enjoined by the Regional Trial Court, which had jurisdiction over the SSS’ complaint
for damages, from continuing with their strike.
Thus, the sequential questions to be resolved by the Court in deciding whether or not the Court of Appeals
erred in finding that the Regional Trial Court did not act without or in excess of jurisdiction when it took
cognizance of the case and enjoined the strike are as follows:
1. Do the employees of the SSS have the right to strike?
2. Does the Regional Trial Court have jurisdiction to hear the case initiated by the SSS and to enjoin the
strikers from continuing with the strike and to order them to return to work?
These shall be discussed and resolved seriatim.
I
The 1987 Constitution, in the Article on Social Justice and Human Rights, provides that the State "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" [Art. XIII, Sec. 3.]
By itself, this provision would seem to recognize the right of all workers and employees, including those in
the public sector, to strike. But the Constitution itself fails to expressly confirm this impression, for in the
Sub-Article on the Civil Service Commission, it provides, after defining the scope of the civil service as "all
branches, subdivisions, instrumentalities, and agencies of the Government, including government-owned or
controlled corporations with original charters," that "[t]he right to self-organization shall not be denied to
government employees" [Art. IX(B), Sec. 2(1) and (5).] Parenthetically, the Bill of Rights also provides that
"[t]he 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 abridged" [Art. III, Sec. 8.] Thus, while
there is no question that the Constitution recognizes the right of government employees to organize, it is
silent as to whether such recognition also includes the right to strike.
Resort to the intent of the framers of the organic law becomes helpful in understanding the meaning of
these provisions. A reading of the proceedings of the Constitutional Commission that drafted the 1987
Constitution would show that in recognizing the right of government employees to organize, the
commissioners intended to limit the right to the formation of unions or associations only, without including
the right to strike.
Thus, Commissioner Eulogio R. Lerum, one of the sponsors of the provision that "[t]he right to
self?organization shall not be denied to government employees" [Art. IX(B), Sec. 2(5)], in answer to the
apprehensions expressed by Commissioner Ambrosio B. Padilla, Vice?President of the Commission,
explained:
MR. LERUM. I think what I will try to say will not take that long. When we proposed this amendment
providing for self-organization of government employees, it does not mean that because they have the right
to organize, they also have the right to strike. That is a different matter. We are only talking about
organizing, uniting as a union. With regard to the right to strike, everyone will remember that in the Bill of
Rights, there is a provision that the right to form associations or societies whose purpose is not contrary to
law shall not be abridged. Now then, if the purpose of the state is to prohibit the strikes coming from
employees exercising government functions, that could be done because the moment that is prohibited,
then the union which will go on strike will be an illegal union. And that provision is carried in Republic Act
875. In Republic Act 875, workers, including those from the government-owned and controlled, are
allowed to organize but they are prohibited from striking. So, the fear of our honorable a Vice-President is
unfounded. It does not mean that because we approve this resolution, it carries with it the right to strike.
That is a different matter. As a matter of fact, that subject is now being discussed in the Committee on
Social Justice because we are trying to find a solution to this problem. We know that this problem exists;
that the moment we allow anybody in the government to strike, then what will happen if the members of
the Armed Forces will go on strike? What will happen to those people trying to protect us? So that is a
matter of discussion in the Committee on Social Justice. But, I repeat, the right to form an organization
does not carry with it the right to strike. [Record of the Constitutional Commission, vol. I, p. 569.]
It will be recalled that the Industrial Peace Act (R.A. No. 875), which was repealed by the Labor Code (P.D.
442) in 1974, expressly banned strikes by employees in the Government, including instrumentalities
exercising governmental functions, but excluding entities entrusted with proprietary functions:
Sec. 11. Prohibition Against Strikes in the Government. - The terms and conditions of employment in the
Government, including any political subdivision or instrumentality thereof, are governed by law and it is
declared to be the policy of this Act that employees therein shall not strike for the purpose of securing
changes or modification in their terms and conditions of employment. Such employees may belong to any
labor organization which does not impose the obligation to strike or to join in strike: Provided, however,
That this section shall apply only to employees employed in governmental functions and not those
employed in proprietary functions of the Government including but not limited to governmental
corporations.
No similar provision found in the Labor Code, although at one time it recognized the right of employees of
government corporations established under the Corporation Code to organize and bargain collectively and
those in the civil service to "form organizations for purposes not contrary to law" [Art. 244, before its
amendment by B.P. Blg. 70 in 1980], in the same breath it provided that "[t]he terms and conditions of
employment of all government employees, including employees of government owned and controlled
corporations, shall be governed by the Civil Service Law, rules and regulations" [now Art. 276.]
Understandably, the Labor Code is silent as to whether or not government employees may strike, for such
are excluded from its coverage [Ibid.] But then the Civil Service Decree [P.D. No. 807], is equally silent on
the matter.
On June 1, 1987, to implement the constitutional guarantee of the right of government employees to
organize, the President issued E.O. No. 180 which provides guidelines for the exercise of the right to
organize of government employees. In Section 14 thereof, it is provided that "[t]he Civil Service law and
rules governing concerted activities and strikes in the government service shall be observed, subject to any
legislation that may be enacted by Congress." The President was apparently referring to Memorandum
Circular No. 6, s. 1987 of the Civil Service Commission under date April 21, 1987 which, "prior to the
enactment by Congress of applicable laws concerning strike by government employees . . . enjoins under
pain of administrative sanctions, all government officers and employees from staging strikes,
demonstrations, mass leaves, walk-outs and other forms of mass action which will result in temporary
stoppage or disruption of public service." The air was thus cleared of the confusion. At present, in the
absence of any legislation allowing government employees to strike, recognizing their right to do so, or
regulating the exercise of the right, they are prohibited from striking, by express provision of Memorandum
Circular No. 6 and as implied in E.O. No. 180. [At this juncture, it must be stated that the validity of
Memorandum Circular No. 6 is not at issue.]
But are employees of the SSS covered by the prohibition against strikes?
The Court is of the considered view that they are. Considering that under the 1987 Constitution "[t]he civil
service embraces all branches, subdivisions, instrumentalities, and agencies of the Government, including
government-owned or controlled corporations with original charters" [Art. IX(B), Sec. 2(1); see also Sec. 1
of E.O. No. 180 where the employees in the civil service are denominated as "government employees"] and
that the SSS is one such government-controlled corporation with an original charter, having been created
under R.A. No. 1161, its employees are part of the civil service [NASECO v. NLRC, G.R. Nos. 69870 &
70295, November 24, 1988] and are covered by the Civil Service Commission's memorandum prohibiting
strikes. This being the case, the strike staged by the employees of the SSS was illegal.
The statement of the Court in Alliance of Government Workers v. Minister of Labor and Employment
[G.R. No. 60403, August 3, 1983, 124 SCRA 1] is relevant as it furnishes the rationale for distinguishing
between workers in the private sector and government employees with regard to the right to strike:
The general rule in the past and up to the present is that "the terms and conditions of employment in the
Government, including any political subdivision or instrumentality thereof are governed by law" (Section 11,
the Industrial Peace Act, R.A. No. 875, as amended and Article 277, the Labor Code, P.D. No. 442, as
amended). Since the terms and conditions of government employment are fixed by law, government
workers cannot use the same weapons employed by workers in the private sector to secure concessions
from their employers. The principle behind labor unionism in private industry is that industrial peace
cannot be secured through compulsion by law. Relations between private employers and their employees
rest on an essentially voluntary basis. Subject to the minimum requirements of wage laws and other labor
and welfare legislation, the terms and conditions of employment in the unionized private sector are settled
through the process of collective bargaining. In government employment, however, it is the legislature and,
where properly given delegated power, the administrative heads of government which fix the terms and
conditions of employment. And this is effected through statutes or administrative circulars, rules, and
regulations, not through collective bargaining agreements. [At p. 13; underscoring supplied.]
Apropos is the observation of the Acting Commissioner of Civil Service, in his position paper submitted to
the 1971 Constitutional Convention, and quoted with approval by the Court in Alliance, to wit:
It is the stand, therefore, of this Commission that by reason of the nature of the public employer and the
peculiar character of the public service, it must necessarily regard the right to strike given to unions in
private industry as not applying to public employees and civil service employees. It has been stated that the
Government, in contrast to the private employer, protects the interest of all people in the public service, and
that accordingly, such conflicting interests as are present in private labor relations could not exist in the
relations between government and those whom they employ. [At pp. 16-17; also quoted in National
Housing Corporation v. Juco, G.R. No. 64313, January 17, 1985, 134 SCRA 172, 178-179.]
E.O. No. 180, which provides guidelines for the exercise of the right to organize of government employees,
while clinging to the same philosophy, has, however, relaxed the rule to allow negotiation where the terms
and conditions of employment involved are not among those fixed by law. Thus:
SECTION 13. Terms and conditions of employment or improvements thereof, except those that are fixed
by law, may be the subject of negotiations between duly recognized employees’ organizations and
appropriate government authorities.
The same executive order has also provided for the general mechanism for the settlement of labor disputes
in the public sector, to wit:
SECTION 16. The Civil Service and labor laws and procedures, whenever applicable, shall be followed in
the resolution of complaints, grievances and cases involving government employees. In case any dispute
remains unresolved after exhausting all the available remedies under existing laws and procedures, the
parties may jointly refer the dispute to the [Public Sector Labor-Management] Council for appropriate
action.
Government employees may, therefore, through their unions or associations, either petition the Congress
for the betterment of the terms and conditions of employment which are within the ambit of legislation or
negotiate with the appropriate government agencies for the improvement of those which are not fixed by
law. If there be any unresolved grievances, the dispute may be referred to the Public Sector Labor-
Management Council for appropriate action. But employees in the civil service may not resort to strikes,
walkouts and other temporary work stoppages, like workers in the private sector, to pressure the
Government to accede to their demands. As now provided under Sec. 4, Rule III of the Rules and
Regulations to Govern the Exercise of the Right of Government-Employees to Self-Organization, which
took effect after the instant dispute arose, "[t]he terms and conditions of employment in the government,
including any political subdivision or instrumentality thereof and government-owned and controlled
corporations with original charters are governed by law and employees therein shall not strike for the
purpose of securing changes thereof."
II
The strike staged by the employees of the SSS belonging to petitioner union being prohibited by law, an
injunction may be issued to restrain it.
It is futile for the petitioners to assert that the the subject labor dispute falls within the exclusive jurisdiction
of the NLRC and, hence, the Regional Trial Court had no jurisdiction to issue a writ of injunction enjoining
the continuance of the strike. The Labor Code itself provides that terms and conditions of employment of
government employees shall be governed by the Civil Service Law, rules and regulations [Art. 276.] More
importantly, E.O. No. 180 vests the Public Sector Labor-Management Council with jurisdiction over
unresolved labor disputes involving government employees [Sec. 16.] Clearly, the NLRC has no jurisdiction
over the dispute.
This being the case, the Regional Trial Court was not precluded, in the exercise of its general jurisdiction
under B.P. Blg. 129, as amended, from assuming jurisdiction over the SSS’s complaint for damages and
issuing the injunctive writ prayed for therein. Unlike the NLRC, the Public Sector Labor-Management
Council has not been granted by law authority to issue writs of injunction in labor disputes within its
jurisdiction. Thus, since it is the Council, and not the NLRC, that has jurisdiction over the instant labor
dispute, resort to the general courts of law for the issuance of a writ of injunction to enjoin the strike is
appropriate.
Neither could the court a quo be accused of imprudence or overzealousness, for in fact it had proceeded
with caution. Thus, after issuing a writ of injunction enjoining the continuance of the strike to prevent any
further disruption of public service, the respondent judge, in the same order, admonished the parties to refer
the unresolved controversies emanating from their employer-employee relationship to the Public Sector
Labor-Management Council for appropriate action [Rollo, p. 86.]
III
In their "Petition/Application for Preliminary and Mandatory Injunction," and reiterated in their reply and
supplemental reply, petitioners allege that the SSS unlawfully withheld bonuses and benefits due the
individual petitioners and they pray that the Court issue a writ of preliminary prohibitive and mandatory
injunction to restrain the SSS and its agents from withholding payment thereof and to compel the SSS to
pay them. In their supplemental reply, petitioners annexed an order of the Civil Service Commission, dated
May 5, 1989, which ruled that the officers of the SSSEA who are not preventively suspended and who are
reporting for work pending the resolution of the administrative cases against them are entitled to their
salaries, year-end bonuses and other fringe benefits and affirmed the previous order of the Merit Systems
Promotion Board.
The matter being extraneous to the issues elevated to this Court, it is Our view that petitioners' remedy is
not to petition this Court to issue an injunction, but to cause the execution of the aforesaid order, if it has
already become final.
WHEREFORE, no reversible error having been committed by the Court of Appeals, the instant petition
for review is hereby DENIED and the decision of the appellate court dated March 9, 1988 in CA-G.R. SP
No. 13192 is AFFIRMED. Petitioners’ ”Petition/Application for Preliminary and Mandatory Injunction"
dated December 13, 1988 is DENIED.
SO ORDERED.
Fernan, C.J., Gutierrez, Jr., Feliciano, and Bidin, JJ., concur.

Copyright 2016 - Batas.org