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Republic of the Philippines functions, and alleging that by implementing the Code, it had not violated the collective

SUPREME COURT bargaining agreement (CBA) or any provision of the Labor Code. Assailing the complaint as
Manila unsupported by evidence, PAL maintained that Article 253 of the Labor Code cited by PALEA
reffered to the requirements for negotiating a CBA which was inapplicable as indeed the current
THIRD DIVISION CBA had been negotiated.

G.R. No. 85985 August 13, 1993 In its reply to PAL's position paper, PALEA maintained that Article 249 (E) of the Labor Code
was violated when PAL unilaterally implemented the Code, and cited provisions of Articles IV
PHILIPPINE AIRLINES, INC. (PAL), petitioner, and I of Chapter II of the Code as defective for, respectively, running counter to the construction
of penal laws and making punishable any offense within PAL's contemplation. These provisions
vs.
NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER ISABEL P. are the following:
ORTIGUERRA and PHILIPPINE AIRLINES EMPLOYEES ASSOCIATION
(PALEA), respondents. Sec. 2. Non-exclusivity. — This Code does not contain the entirety of the rules
and regulations of the company. Every employee is bound to comply with all
Solon Garcia for petitioner. applicable rules, regulations, policies, procedures and standards, including
standards of quality, productivity and behaviour, as issued and promulgated
by the company through its duly authorized officials. Any violations thereof
Adolpho M. Guerzon for respondent PALEA. shall be punishable with a penalty to be determined by the gravity and/or
frequency of the offense.
MELO, J.:
Sec. 7. Cumulative Record. — An employee's record of offenses shall be
In the instant petition for certiorari, the Court is presented the issue of whether or not the cumulative. The penalty for an offense shall be determined on the basis of his
formulation of a Code of Discipline among employees is a shared responsibility of the employer past record of offenses of any nature or the absence thereof. The more
and the employees. habitual an offender has been, the greater shall be the penalty for the latest
offense. Thus, an employee may be dismissed if the number of his past
On March 15, 1985, the Philippine Airlines, Inc. (PAL) completely revised its 1966 Code of offenses warrants such penalty in the judgment of management even if each
Discipline. The Code was circulated among the employees and was immediately implemented, offense considered separately may not warrant dismissal. Habitual offenders
and some employees were forthwith subjected to the disciplinary measures embodied therein. or recidivists have no place in PAL. On the other hand, due regard shall be
given to the length of time between commission of individual offenses to
Thus, on August 20, 1985, the Philippine Airlines Employees Association (PALEA) filed a determine whether the employee's conduct may indicate occasional lapses
complaint before the National Labor Relations Commission (NLRC) for unfair labor practice (which may nevertheless require sterner disciplinary action) or a pattern of
(Case No. NCR-7-2051-85) with the following remarks: "ULP with arbitrary implementation of incorrigibility.
PAL's Code of Discipline without notice and prior discussion with Union by Management"
(Rollo, p. 41). In its position paper, PALEA contended that PAL, by its unilateral implementation Labor Arbiter Isabel P. Ortiguerra handling the case called the parties to a conference but they
of the Code, was guilty of unfair labor practice, specifically Paragraphs E and G of Article 249 failed to appear at the scheduled date. Interpreting such failure as a waiver of the parties' right
and Article 253 of the Labor Code. PALEA alleged that copies of the Code had been circulated to present evidence, the labor arbiter considered the case submitted for decision. On November
in limited numbers; that being penal in nature the Code must conform with the requirements of 7, 1986, a decision was rendered finding no bad faith on the part of PAL in adopting the Code
sufficient publication, and that the Code was arbitrary, oppressive, and prejudicial to the rights and ruling that no unfair labor practice had been committed. However, the arbiter held that PAL
of the employees. It prayed that implementation of the Code be held in abeyance; that PAL was "not totally fault free" considering that while the issuance of rules and regulations governing
should discuss the substance of the Code with PALEA; that employees dismissed under the the conduct of employees is a "legitimate management prerogative" such rules and regulations
Code be reinstated and their cases subjected to further hearing; and that PAL be declared must meet the test of "reasonableness, propriety and fairness." She found Section 1 of the
guilty of unfair labor practice and be ordered to pay damages (pp. 7-14, Record.) Code aforequoted as "an all embracing and all encompassing provision that makes punishable
any offense one can think of in the company"; while Section 7, likewise quoted above, is
PAL filed a motion to dismiss the complaint, asserting its prerogative as an employer to "objectionable for it violates the rule against double jeopardy thereby ushering in two or more
prescibe rules and regulations regarding employess' conduct in carrying out their duties and punishment for the same misdemeanor." (pp. 38-39, Rollo.)
The labor arbiter also found that PAL "failed to prove that the new Code was amply circulated." tenure and loss of employment — a property right! It is time that management
Noting that PAL's assertion that it had furnished all its employees copies of the Code is realizes that to attain effectiveness in its conduct rules, there should be
unsupported by documentary evidence, she stated that such "failure" on the part of PAL candidness and openness by Management and participation by the union,
resulted in the imposition of penalties on employees who thought all the while that the 1966 representing its members. In fact, our Constitution has recognized the principle
Code was still being followed. Thus, the arbiter concluded that "(t)he phrase ignorance of the of "shared responsibility" between employers and workers and has likewise
law excuses no one from compliance . . . finds application only after it has been conclusively recognized the right of workers to participate in "policy and decision-making
shown that the law was circulated to all the parties concerned and efforts to disseminate process affecting their rights . . ." The latter provision was interpreted by the
information regarding the new law have been exerted. (p. 39, Rollo.) She thereupon disposed: Constitutional Commissioners to mean participation in "management"'
(Record of the Constitutional Commission, Vol. II).
WHEREFORE, premises considered, respondent PAL is hereby ordered as
follows: In a sense, participation by the union in the adoption of the code if conduct
could have accelerated and enhanced their feelings of belonging and would
1. Furnish all employees with the new Code of Discipline; have resulted in cooperation rather than resistance to the Code. In fact, labor-
management cooperation is now "the thing." (pp. 3-4, NLRC Decision ff. p.
149, Original Record.)
2. Reconsider the cases of employees meted with penalties under the New
Code of Discipline and remand the same for further hearing; and
Respondent Commission thereupon disposed:
3. Discuss with PALEA the objectionable provisions specifically tackled in the
body of the decision. WHEREFORE, premises considered, we modify the appealed decision in the
sense that the New Code of Discipline should be reviewed and discussed with
complainant union, particularly the disputed provisions [.] (T)hereafter,
All other claims of the complainant union (is) [are] hereby, dismissed for lack
respondent is directed to furnish each employee with a copy of the appealed
of merit.
Code of Discipline. The pending cases adverted to in the appealed decision if
still in the arbitral level, should be reconsidered by the respondent Philippine
SO ORDERED. (p. 40, Rollo.) Air Lines. Other dispositions of the Labor Arbiter are sustained.

PAL appealed to the NLRC. On August 19, 1988, the NLRC through Commissioner SO ORDERED. (p. 5, NLRC Decision.)
Encarnacion, with Presiding Commissioner Bonto-Perez and Commissioner Maglaya
concurring, found no evidence of unfair labor practice committed by PAL and affirmed the
PAL then filed the instant petition for certiorari charging public respondents with grave abuse
dismissal of PALEA's charge. Nonetheless, the NLRC made the following observations:
of discretion in: (a) directing PAL "to share its management prerogative of formulating a Code
of Discipline"; (b) engaging in quasi-judicial legislation in ordering PAL to share said prerogative
Indeed, failure of management to discuss the provisions of a contemplated with the union; (c) deciding beyond the issue of unfair labor practice, and (d) requiring PAL to
code of discipline which shall govern the conduct of its employees would result reconsider pending cases still in the arbitral level (p. 7, Petition; p. 8, Rollo.)
in the erosion and deterioration of an otherwise harmonious and smooth
relationship between them as did happen in the instant case. There is no
As stated above, the Principal issue submitted for resolution in the instant petition is whether
dispute that adoption of rules of conduct or discipline is a prerogative of
management may be compelled to share with the union or its employees its prerogative of
management and is imperative and essential if an industry, has to survive in a
competitive world. But labor climate has progressed, too. In the Philippine formulating a code of discipline.
scene, at no time in our contemporary history is the need for a cooperative,
supportive and smooth relationship between labor and management more PAL asserts that when it revised its Code on March 15, 1985, there was no law which mandated
keenly felt if we are to survive economically. Management can no longer the sharing of responsibility therefor between employer and employee.
exclude labor in the deliberation and adoption of rules and regulations that will
affect them. Indeed, it was only on March 2, 1989, with the approval of Republic Act No. 6715, amending
Article 211 of the Labor Code, that the law explicitly considered it a State policy "(t)o ensure
The complainant union in this case has the right to feel isolated in the adoption the participation of workers in decision and policy-making processes affecting the rights, duties
of the New Code of Discipline. The Code of Discipline involves security of and welfare." However, even in the absence of said clear provision of law, the exercise of
management prerogatives was never considered boundless. Thus, in Cruz vs. Medina (177 The Association recognizes the right of the Company to determine matters of
SCRA 565 [1989]) it was held that management's prerogatives must be without abuse of management it policy and Company operations and to direct its manpower.
discretion. Management of the Company includes the right to organize, plan, direct and
control operations, to hire, assign employees to work, transfer employees from
In San Miguel Brewery Sales Force Union (PTGWO) vs. Ople (170 SCRA 25 [1989]), we one department, to another, to promote, demote, discipline, suspend or
upheld the company's right to implement a new system of distributing its products, but gave discharge employees for just cause; to lay-off employees for valid and legal
the following caveat: causes, to introduce new or improved methods or facilities or to change
existing methods or facilities and the right to make and enforce Company rules
So long as a company's management prerogatives are exercised in good faith and regulations to carry out the functions of management.
for the advancement of the employer's interest and not for the purpose of
defeating or circumventing the rights of the employees under special laws or The exercise by management of its prerogative shall be done in a just
under valid agreements, this Court will uphold them. reasonable, humane and/or lawful manner.
(at p. 28.)
Such provision in the collective bargaining agreement may not be interpreted as cession of
All this points to the conclusion that the exercise of managerial prerogatives is not unlimited. It employees' rights to participate in the deliberation of matters which may affect their rights and
is circumscribed by limitations found in law, a collective bargaining agreement, or the general the formulation of policies relative thereto. And one such mater is the formulation of a code of
principles of fair play and justice (University of Sto. Tomas vs. NLRC, 190 SCRA 758 [1990]). discipline.
Moreover, as enunciated in Abbott Laboratories (Phil.), vs. NLRC (154 713 [1987]), it must be
duly established that the prerogative being invoked is clearly a managerial one. Indeed, industrial peace cannot be achieved if the employees are denied their just participation
in the discussion of matters affecting their rights. Thus, even before Article 211 of the labor
A close scrutiny of the objectionable provisions of the Code reveals that they are not purely Code (P.D. 442) was amended by Republic Act No. 6715, it was already declared a policy of
business-oriented nor do they concern the management aspect of the business of the company the State, "(d) To promote the enlightenment of workers concerning their rights and obligations
as in the San Miguel case. The provisions of the Code clearly have repercusions on the . . . as employees." This was, of course, amplified by Republic Act No 6715 when it decreed
employee's right to security of tenure. The implementation of the provisions may result in the the "participation of workers in decision and policy making processes affecting their rights,
deprivation of an employee's means of livelihood which, as correctly pointed out by the NLRC, duties and welfare." PAL's position that it cannot be saddled with the "obligation" of sharing
is a property right (Callanta, vs Carnation Philippines, Inc., 145 SCRA 268 [1986]). In view of management prerogatives as during the formulation of the Code, Republic Act No. 6715 had
these aspects of the case which border on infringement of constitutional rights, we must uphold not yet been enacted (Petitioner's Memorandum, p. 44; Rollo, p. 212), cannot thus be
the constitutional requirements for the protection of labor and the promotion of social justice, sustained. While such "obligation" was not yet founded in law when the Code was formulated,
for these factors, according to Justice Isagani Cruz, tilt "the scales of justice when there is the attainment of a harmonious labor-management relationship and the then already existing
doubt, in favor of the worker" (Employees Association of the Philippine American Life Insurance state policy of enlightening workers concerning their rights as employees demand no less than
Company vs. NLRC, 199 SCRA 628 [1991] 635). the observance of transparency in managerial moves affecting employees' rights.

Verily, a line must be drawn between management prerogatives regarding business Petitioner's assertion that it needed the implementation of a new Code of Discipline considering
operations per se and those which affect the rights of the employees. In treating the latter, the nature of its business cannot be overemphasized. In fact, its being a local monopoly in the
management should see to it that its employees are at least properly informed of its decisions business demands the most stringent of measures to attain safe travel for its patrons.
or modes action. PAL asserts that all its employees have been furnished copies of the Code. Nonetheless, whatever disciplinary measures are adopted cannot be properly implemented in
Public respondents found to the contrary, which finding, to say the least is entitled to great the absence of full cooperation of the employees. Such cooperation cannot be attained if the
respect. employees are restive on account, of their being left out in the determination of cardinal and
fundamental matters affecting their employment.
PAL posits the view that by signing the 1989-1991 collective bargaining agreement, on June
27, 1990, PALEA in effect, recognized PAL's "exclusive right to make and enforce company WHEREFORE, the petition is DISMISSED and the questioned decision AFFIRMED. No special
rules and regulations to carry out the functions of management without having to discuss the pronouncement is made as to costs.
same with PALEA and much less, obtain the latter's conformity thereto" (pp. 11-12, Petitioner's
Memorandum; pp 180-181, Rollo.) Petitioner's view is based on the following provision of the SO ORDERED.
agreement:
Republic of the Philippines with the imperatives of efficiency, business expansion and diversity of its operation. In said
contracts, it was expressly understood and agreed that the workers employed by the
SUPREME COURT contractors were to be paid by the latter and that none of them were to be deemed employees
or agents of SanMig. There was to be no employer-employee relation between the contractors
and/or its workers, on the one hand, and SanMig on the other.
Manila

SECOND DIVISION Petitioner San Miguel Corporation Employees Union-PTWGO (the Union, for brevity) is the
duly authorized representative of the monthly paid rank-and-file employees of SanMig with
whom the latter executed a Collective Bargaining Agreement (CBA) effective 1 July 1986 to 30
G.R. No. 87700 June 13, 1990 June 1989 (Annex A, SanMig's Comment). Section 1 of their CBA specifically provides that
"temporary, probationary, or contract employees and workers are excluded from the bargaining
SAN MIGUEL CORPORATION EMPLOYEES UNION-PTGWO, DANIEL S.L. BORBON II, unit and, therefore, outside the scope of this Agreement."
HERMINIA REYES, MARCELA PURIFICACION, ET AL., petitioners,
In a letter, dated 20 November 1988 (Annex C, Petition), the Union advised SanMig that some
vs. Lipercon and D'Rite workers had signed up for union membership and sought the regularization
of their employment with SMC. The Union alleged that this group of employees, while
HON. JESUS G. BERSAMIRA, IN HIS CAPACITY AS PRESIDING JUDGE OF BRANCH 166, appearing to be contractual workers supposedly independent contractors, have been
RTC, PASIG, and SAN MIGUEL CORPORATION, respondents. continuously working for SanMig for a period ranging from six (6) months to fifteen (15) years
and that their work is neither casual nor seasonal as they are performing work or activities
Romeo C. Lagman for petitioners. necessary or desirable in the usual business or trade of SanMig. Thus, it was contended that
there exists a "labor-only" contracting situation. It was then demanded that the employment
status of these workers be regularized.
Jardeleza, Sobrevinas, Diaz, Mayudini & Bodegon for respondents.
On 12 January 1989 on the ground that it had failed to receive any favorable response from
MELENCIO-HERRERA, J.
SanMig, the Union filed a notice of strike for unfair labor practice, CBA violations, and union
busting (Annex D, Petition).
Respondent Judge of the Regional Trial Court of Pasig, Branch 166, is taken to task by
petitioners in this special civil action for certiorari and Prohibition for having issued the
On 30 January 1989, the Union again filed a second notice of strike for unfair labor practice
challenged Writ of Preliminary Injunction on 29 March 1989 in Civil Case No. 57055 of his Court
(Annex F, Petition).
entitled "San Miguel Corporation vs. SMCEU-PTGWO, et als."
As in the first notice of strike. Conciliatory meetings were held on the second notice.
Petitioners' plea is that said Writ was issued without or in excess of jurisdiction and with grave
Subsequently, the two (2) notices of strike were consolidated and several conciliation
abuse of discretion, a labor dispute being involved. Private respondent San Miguel Corporation
conferences were held to settle the dispute before the National Conciliation and Mediation
(SanMig. for short), for its part, defends the Writ on the ground of absence of any employer-
Board (NCMB) of DOLE (Annex G, Petition).
employee relationship between it and the contractual workers employed by the companies
Lipercon Services, Inc. (Lipercon) and D'Rite Service Enterprises (D'Rite), besides the fact that
the Union is bereft of personality to represent said workers for purposes of collective Beginning 14 February 1989 until 2 March 1989, series of pickets were staged by Lipercon and
bargaining. The Solicitor General agrees with the position of SanMig. D'Rite workers in various SMC plants and offices.

The antecedents of the controversy reveal that On 6 March 1989, SMC filed a verified Complaint for Injunction and Damages before
respondent Court to enjoin the Union from:
Sometime in 1983 and 1984, SanMig entered into contracts for merchandising services with
Lipercon and D'Rite (Annexes K and I, SanMig's Comment, respectively). These companies a. representing and/or acting for and in behalf of the employees of LIPERCON and/or
are independent contractors duly licensed by the Department of Labor and Employment D'RITE for the purposes of collective bargaining;
(DOLE). SanMig entered into those contracts to maintain its competitive position and in keeping
b. calling for and holding a strike vote, to compel plaintiff to hire the employees or workers In issuing the Injunction, respondent Court rationalized:
of LIPERCON and D'RITE;
The absence of employer-employee relationship negates the existence of labor dispute. Verily,
c. inciting, instigating and/or inducing the employees or workers of LIPERCON and D'RITE to this court has jurisdiction to take cognizance of plaintiff's grievance.
demonstrate and/or picket at the plants and offices of plaintiff within the bargaining unit referred
to in the CBA,...; The evidence so far presented indicates that plaintiff has contracts for services with Lipercon
and D'Rite. The application and contract for employment of the defendants' witnesses are either
d. staging a strike to compel plaintiff to hire the employees or workers of LIPERCON and with Lipercon or D'Rite. What could be discerned is that there is no employer-employee
D'RITE; relationship between plaintiff and the contractual workers employed by Lipercon and D'Rite.
This, however, does not mean that a final determination regarding the question of the existence
e. using the employees or workers of LIPERCON AND D'RITE to man the strike area of employer-employee relationship has already been made. To finally resolve this dispute, the
and/or picket lines and/or barricades which the defendants may set up at the plants and offices court must extensively consider and delve into the manner of selection and engagement of the
of plaintiff within the bargaining unit referred to in the CBA ...; putative employee; the mode of payment of wages; the presence or absence of a power of
dismissal; and the Presence or absence of a power to control the putative employee's conduct.
This necessitates a full-blown trial. If the acts complained of are not restrained, plaintiff would,
f. intimidating, threatening with bodily harm and/or molesting the other employees and/or
undoubtedly, suffer irreparable damages. Upon the other hand, a writ of injunction does not
contract workers of plaintiff, as well as those persons lawfully transacting business with plaintiff
necessarily expose defendants to irreparable damages.
at the work places within the bargaining unit referred to in the CBA, ..., to compel plaintiff to
hire the employees or workers of LIPERCON and D'RITE;
Evidently, plaintiff has established its right to the relief demanded. (p. 21, Rollo)
g. blocking, preventing, prohibiting, obstructing and/or impeding the free ingress to, and
egress from, the work places within the bargaining unit referred to in the CBA .., to compel Anchored on grave abuse of discretion, petitioners are now before us seeking nullification of
plaintiff to hire the employees or workers of LIPERCON and D'RITE; the challenged Writ. On 24 April 1989, we issued a Temporary Restraining Order enjoining the
implementation of the Injunction issued by respondent Court. The Union construed this to mean
that "we can now strike," which it superimposed on the Order and widely circulated to entice
h. preventing and/or disrupting the peaceful and normal operation of plaintiff at the work
the Union membership to go on strike. Upon being apprised thereof, in a Resolution of 24 May
places within the bargaining unit referred to in the CBA, Annex 'C' hereof, to compel plaintiff to
1989, we required the parties to "RESTORE the status quo ante declaration of strike" (p. 2,62
hire the employees or workers of LIPERCON and D'RITE. (Annex H, Petition)
Rollo).
Respondent Court found the Complaint sufficient in form and substance and issued a
In the meantime, however, or on 2 May 1989, the Union went on strike. Apparently, some of
Temporary Restraining Order for the purpose of maintaining the status quo, and set the
the contractual workers of Lipercon and D'Rite had been laid off. The strike adversely affected
application for Injunction for hearing.
thirteen (13) of the latter's plants and offices.
In the meantime, on 13 March 1989, the Union filed a Motion to Dismiss SanMig's Complaint
On 3 May 1989, the National Conciliation and Mediation Board (NCMB) called the parties to
on the ground of lack of jurisdiction over the case/nature of the action, which motion was
conciliation. The Union stated that it would lift the strike if the thirty (30) Lipercon and D'Rite
opposed by SanMig. That Motion was denied by respondent Judge in an Order dated 11 April
employees were recalled, and discussion on their other demands, such as wage distortion and
1989.
appointment of coordinators, were made. Effected eventually was a Memorandum of
Agreement between SanMig and the Union that "without prejudice to the outcome of G.R. No.
After several hearings on SanMig's application for injunctive relief, where the parties presented 87700 (this case) and Civil Case No. 57055 (the case below), the laid-off individuals ... shall
both testimonial and documentary evidence on 25 March 1989, respondent Court issued the be recalled effective 8 May 1989 to their former jobs or equivalent positions under the same
questioned Order (Annex A, Petition) granting the application and enjoining the Union from terms and conditions prior to "lay-off" (Annex 15, SanMig Comment). In turn, the Union would
Committing the acts complained of, supra. Accordingly, on 29 March 1989, respondent Court immediately lift the pickets and return to work.
issued the corresponding Writ of Preliminary Injunction after SanMig had posted the required
bond of P100,000.00 to answer for whatever damages petitioners may sustain by reason
thereof. After an exchange of pleadings, this Court, on 12 October 1989, gave due course to the Petition
and required the parties to submit their memoranda simultaneously, the last of which was filed
on 9 January 1990.
The focal issue for determination is whether or not respondent Court correctly assumed While it is SanMig's submission that no employer-employee relationship exists between itself,
jurisdiction over the present controversy and properly issued the Writ of Preliminary Injunction on the one hand, and the contractual workers of Lipercon and D'Rite on the other, a labor
to the resolution of that question, is the matter of whether, or not the case at bar involves, or is dispute can nevertheless exist "regardless of whether the disputants stand in the proximate
in connection with, or relates to a labor dispute. An affirmative answer would bring the case relationship of employer and employee" (Article 212 [1], Labor Code, supra) provided the
within the original and exclusive jurisdiction of labor tribunals to the exclusion of the regular controversy concerns, among others, the terms and conditions of employment or a "change"
Courts. or "arrangement" thereof (ibid). Put differently, and as defined by law, the existence of a labor
dispute is not negative by the fact that the plaintiffs and defendants do not stand in the
Petitioners take the position that 'it is beyond dispute that the controversy in the court a quo proximate relation of employer and employee.
involves or arose out of a labor dispute and is directly connected or interwoven with the cases
pending with the NCMB-DOLE, and is thus beyond the ambit of the public respondent's That a labor dispute, as defined by the law, does exist herein is evident. At bottom, what the
jurisdiction. That the acts complained of (i.e., the mass concerted action of picketing and the Union seeks is to regularize the status of the employees contracted by Lipercon and D'Rite in
reliefs prayed for by the private respondent) are within the competence of labor tribunals, is effect, that they be absorbed into the working unit of SanMig. This matter definitely dwells on
beyond question" (pp. 6-7, Petitioners' Memo). the working relationship between said employees vis-a-vis SanMig. Terms, tenure and
conditions of their employment and the arrangement of those terms are thus involved bringing
On the other hand, SanMig denies the existence of any employer-employee relationship and the matter within the purview of a labor dispute. Further, the Union also seeks to represent
consequently of any labor dispute between itself and the Union. SanMig submits, in particular, those workers, who have signed up for Union membership, for the purpose of collective
that "respondent Court is vested with jurisdiction and judicial competence to enjoin the specific bargaining. SanMig, for its part, resists that Union demand on the ground that there is no
type of strike staged by petitioner union and its officers herein complained of," for the reasons employer-employee relationship between it and those workers and because the demand
that: violates the terms of their CBA. Obvious then is that representation and association, for the
purpose of negotiating the conditions of employment are also involved. In fact, the injunction
sought by SanMig was precisely also to prevent such representation. Again, the matter of
A. The exclusive bargaining representative of an employer unit cannot strike to compel
representation falls within the scope of a labor dispute. Neither can it be denied that the
the employer to hire and thereby create an employment relationship with contractual workers,
controversy below is directly connected with the labor dispute already taken cognizance of by
especially were the contractual workers were recognized by the union, under the governing
the NCMB-DOLE (NCMB-NCR- NS-01- 021-89; NCMB NCR NS-01-093-83).
collective bargaining agreement, as excluded from, and therefore strangers to, the bargaining
unit.
Whether or not the Union demands are valid; whether or not SanMig's contracts with Lipercon
and D'Rite constitute "labor-only" contracting and, therefore, a regular employer-employee
B. A strike is a coercive economic weapon granted the bargaining representative only in
relationship may, in fact, be said to exist; whether or not the Union can lawfully represent the
the event of a deadlock in a labor dispute over 'wages, hours of work and all other and of the
employment' of the employees in the unit. The union leaders cannot instigate a strike to compel workers of Lipercon and D'Rite in their demands against SanMig in the light of the existing
the employer, especially on the eve of certification elections, to hire strangers or workers CBA; whether or not the notice of strike was valid and the strike itself legal when it was allegedly
instigated to compel the employer to hire strangers outside the working unit; — those are issues
outside the unit, in the hope the latter will help re-elect them.
the resolution of which call for the application of labor laws, and SanMig's cause's of action in
the Court below are inextricably linked with those issues.
C. Civil courts have the jurisdiction to enjoin the above because this specie of strike does
not arise out of a labor dispute, is an abuse of right, and violates the employer's constitutional
liberty to hire or not to hire. (SanMig's Memorandum, pp. 475-476, Rollo). The precedent in Layno vs. de la Cruz (G.R. No. L-29636, 30 April 1965, 13 SCRA 738) relied
upon by SanMig is not controlling as in that case there was no controversy over terms, tenure
or conditions, of employment or the representation of employees that called for the application
We find the Petition of a meritorious character. of labor laws. In that case, what the petitioning union demanded was not a change in working
terms and conditions, or the representation of the employees, but that its members be hired as
A "labor dispute" as defined in Article 212 (1) of the Labor Code includes "any controversy or stevedores in the place of the members of a rival union, which petitioners wanted discharged
matter concerning terms and conditions of employment or the association or representation of notwithstanding the existing contract of the arrastre company with the latter union. Hence, the
persons in negotiating, fixing, maintaining, changing, or arranging the terms and conditions of ruling therein, on the basis of those facts unique to that case, that such a demand could hardly
employment, regardless of whether the disputants stand in the proximate relation of employer be considered a labor dispute.
and employee."
As the case is indisputably linked with a labor dispute, jurisdiction belongs to the labor tribunals.
As explicitly provided for in Article 217 of the Labor Code, prior to its amendment by R.A. No.
6715 on 21 March 1989, since the suit below was instituted on 6 March 1989, Labor Arbiters
have original and exclusive jurisdiction to hear and decide the following cases involving all
workers including "1. unfair labor practice cases; 2. those that workers may file involving wages,
hours of work and other terms and conditions of employment; ... and 5. cases arising from any
violation of Article 265 of this Code, including questions involving the legality of striker and
lockouts. ..." Article 217 lays down the plain command of the law.

The claim of SanMig that the action below is for damages under Articles 19, 20 and 21 of the
Civil Code would not suffice to keep the case within the jurisdictional boundaries of regular
Courts. That claim for damages is interwoven with a labor dispute existing between the parties
and would have to be ventilated before the administrative machinery established for the
expeditious settlement of those disputes. To allow the action filed below to prosper would bring
about "split jurisdiction" which is obnoxious to the orderly administration of justice (Philippine
Communications, Electronics and Electricity Workers Federation vs. Hon. Nolasco, L-24984,
29 July 1968, 24 SCRA 321).

We recognize the proprietary right of SanMig to exercise an inherent management prerogative


and its best business judgment to determine whether it should contract out the performance of
some of its work to independent contractors. However, 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 (Section 3, Article XIII, 1987 Constitution)
equally call for recognition and protection. Those contending interests must be placed in proper
perspective and equilibrium.

WHEREFORE, the Writ of certiorari is GRANTED and the Orders of respondent Judge of 25
March 1989 and 29 March 1989 are SET ASIDE. The Writ of Prohibition is GRANTED and
respondent Judge is enjoined from taking any further action in Civil Case No. 57055 except for
the purpose of dismissing it. The status quo ante declaration of strike ordered by the Court on
24 May 1989 shall be observed pending the proceedings in the National Conciliation Mediation
Board-Department of Labor and Employment, docketed as NCMB-NCR-NS-01-02189 and
NCMB-NCR-NS-01-093-83. No costs.

SO ORDERED.
Republic of the Philippines With this development, Susarco and its officers were impleaded in the amended complaint of
the private respondents. Later, William Quasha and/or Cirilo Asperilla were also included in the
SUPREME COURT suit as the resident agents of AMAL of the Philippines.

Manila On November 7, 1986, the petitioner filed his own complaint with the NLRC against AMAL for
his remaining unsatisfied claims.
FIRST DIVISION
On May 29, 1987, Labor Arbiter Eduardo G. Magno, to whom the petitioner's complaint was
assigned, rendered a decision ordering AMAL to pay the petitioner the amount of P371,469.59
G.R. No. 90856 July 23, 1992
as separation pay, unpaid salary and commissions, after deducting the value of the assets
earlier appropriated by the petitioner. 2
ARTURO DE GUZMAN, petitioner, vs.
On September 30, 1987, Labor Arbiter Ma. Lourdes A. Sales, who tried the private
NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER MA. LOURDES A. respondents' complaint, rendered a decision —
SALES, AVELINO D. VALLESTEROL, ALEJANDRO Q. FRIAS, LINDA DE LA CRUZ,
CORAZON M. DE LA FUENTE, LILIA F. FLORO, and MARIO F. JAYME, respondents.
1. Ordering Respondents AMAL and Arturo de Guzman to pay jointly and severally to
each Complainant separation pay computed at one-half month pay for every year of service,
CRUZ, J.: backwages for one month, unpaid salaries for June 16-30, 1986, 13th month pay from January
to June 30, 1986 and incentive leave pay equivalent to two and-a-half days pay;
It is a fundamental principle of law and human conduct that a person "must, in the exercise of
his rights and in the performance of his duties, act with justice, give every one his due, and 2. Dismissing the complaint against respondents Leo Fialla, William Quasha, Susarco,
observe honesty and good faith." 1 This is the principle we shall apply in the case at bar to Inc. and its directors Susan de Guzman, Pacita Castaneda, George Estomata and Cynthia
gauge the petitioner's motives in his dealings with the private respondents. Serrano for lack of basis and/or merit;

Arturo de Guzman was the general manager of the Manila office of the Affiliated Machineries 3. Dismissing the claims for damages for lack of basis;
Agency, Ltd., which was based in Hongkong. On June 30, 1986, he received a telex message
from Leo A. Fialla, managing director of AMAL in its main office, advising him of the closure of
4. Ordering respondents AMAL and Arturo de Guzman to pay jointly and severally
the company due to financial reverses. This message triggered the series of events that are
attorney's fees to Complainants equivalent to 10% of the monetary awards herein. 3
the subject of this litigation.

Immediately upon receipt of the advise, De Guzman notified all the personnel of the Manila This decision was on appeal affirmed in toto by the NLRC, which is now faulted for grave abuse
of discretion in this petition for certiorari.
office. The employees then sent a letter to AMAL accepting its decision to close, subject to the
payment to them of their current salaries, severance pay, and other statutory benefits. De
Guzman joined them in these representations.

These requests were, however, not heeded. Consequently, the employees, now herein private The petitioner does not dispute the jurisdiction of the Labor Arbiter and NLRC over the
respondents, lodged a complaint with the NLRC against AMAL, through Leo A. Fialla and complaint of the private respondents against AMAL in view of their previous employment
Arturo de Guzman, for illegal dismissal, unpaid wages or commissions, separation pay, sick relationship. He argues, however, that the public respondents acted without or in excess of
and vacation leave benefits, 13th month pay, and bonus. jurisdiction in holding him jointly and severally liable with AMAL as he was not an employer of
the private respondents.
For his part, the petitioner began selling some of AMAL's assets and applied the proceeds
thereof, as well as the remaining assets, to the payment of his claims against the company. He The Solicitor General and the private respondents disagree. They maintain that the petitioner,
also organized Susarco, Inc., with himself as its president and his wife as one of the being AMAL's highest local representative in the Philippines, may be held personally
incorporators and a member of the board of directors. This company is engaged in the same answerable for the private respondents' claims because he is included in the term "employer"
line of business and has the same clients as that of the dissolved AMAL. under Art. 212 (c),
(now e) of the Labor Code which provides: properties have already been appropriated by the petitioner to satisfy his own claims against
the company.
Art. 212. Definitions. —
By so doing, has the petitioner incurred liability to the private respondents?
xxx xxx xxx
The Labor Arbiter believed he had because of his bad faith and ruled as follows:
c. "Employer" includes any person acting in the interest of an employer, directly or
indirectly. . . . Considering that Respondent A. de Guzman is guilty of bad faith in appropriating for himself
the properties of Respondent AMAL to the prejudice of Complainants herein whose claims are
In the leading case of A.C. Ransom Labor Union-CCLU vs. NLRC, 4 as affirmed in the known to Respondent at the time he made the disposition of AMAL's properties, he is held
subsequent cases of Gudez vs. NLRC, 5 and Maglutac vs. jointly and severally liable with Respondent AMAL for the award of unpaid wages, separation
pay, backwages for one month, 13th month pay and cash value of unused vacation leave.
NLRC, 6 this Court treated the president of the employer corporation as an "employer" and
held him solidarily liable with the said corporation for the payment of the employees' money In Velayo v. Shell Co. of the Philippines, 8 Commercial Air Lines, Inc. (CALI), knowing that it
claims. So was the vice-president of the employer corporation in the case of Chua vs. NLRC. did not have enough assets to pay off its liabilities, called a meeting of its creditors where it
7 announced that in case of non-agreement on a pro-rata distribution of its assets, including the
C-54 plant in California, it would file insolvency proceedings. Shell Company of the Philippines,
one of its creditors, took advantage of this information and immediately made a telegraphic
The aforecited cases will not apply to the instant case, however, because the persons who
assignment of its credits in favor of its sister corporation in the United States. The latter
were there made personally liable for the employees' claims were stockholders-officers of the
thereupon promptly attached the plane in California and disposed of the same, thus depriving
respondent corporation. In the case at bar, the petitioner, while admittedly the highest ranking
the other creditors of their proportionate share in its value. The Court declared that Shell had
local representative of AMAL in the Philippines, is nevertheless not a stockholder and much
less a member of the board of directors or an officer thereof. He is at most only a managerial acted in bad faith and betrayed the trust of the other creditors of CALI. The said company was
employee under Art. 212 (m) of the Labor Code, which reads in relevant part as follows: ordered to pay them compensatory damages in a sum equal to the value of the C-54 plane at
the time it assigned its credit and exemplary damages in the sum of P25,000.00.
Art 212. Definitions. —
We quote with approval the following observations of Labor Arbiter Sales in her decision:
xxx xxx xxx
While the legitimacy of Respondent A. de Guzman's claims against AMAL is not questioned, it
must be stated that the manner and the means by which he satisfied such claims are evidently
m. Managerial employee is one who is vested with powers and prerogatives to lay down characterized by bad faith on his part. For one, Respondent A. de Guzman took advantage of
and execute management policies and/or to his position as General Manager and arrogated to himself the right to retain possession and
ownership of all properties owned and left by AMAL in the Philippines, even if he knew that
hire, transfer, suspend, lay off, recall, discharge, assign or discipline employees. . . . Complainants herein have similar valid claims for unpaid wages and other employee benefits
from the Respondent AMAL. . . .
As such, the petitioner cannot be held directly responsible for the decision to close the business
that resulted in his separation and that of the private respondents. That decision came directly Another strong indication of bad faith on the part of Respondent A. de Guzman is his filing of a
and exclusively from AMAL. The petitioner's participation was limited to the enforcement of this separate complaint against AMAL before the NLRC Arbitration Branch about four (4) months
decision in line with his duties as general manager of the company. Even in a normal situation, after the filing of the instant case without informing this Office about the existence of said case
in fact, he would not be liable, as a managerial employee of AMAL, for the monetary claims of during the proceedings in the instant case. This case was deemed submitted for decision on
its employees. There should be no question that the private respondents' recourse for such May 18, 1987 but it was only on June 2, 1987 that Respondent A. de Guzman formally notified
claims cannot be against the petitioner but against AMAL and AMAL alone. this Office through his Supplemental Position Paper of his pending complaint before Arbiter
Eduardo Magno docketed as NLRC Case No. 11-4441-86. Under Rule V, Section 4 of the
The judgment in favor of the private respondents could have been enforced against the revised rules of the NLRC, it is provided that:
properties of AMAL located in this country except for one difficulty. The problem is that these
Sec. 4. CONSOLIDATION OF CASES — where there are two or more cases pending before Art. 21. Any person who willfully causes loss or injury to another in a manner that is contrary
different Labor Arbiters in the same Regional Arbitration Branch involving the same employer to morals, good customs or public policy shall compensate the latter for the damage.
and issues or the same parties with different issues, the case which was filed last shall be
consolidated with the first to avoid unnecessary costs or delay. Such cases shall be disposed Applying these provisions, we hold that although the petitioner cannot be made solidarily liable
of by the Labor Arbiter to whom the first case was assigned. (Emphasis supplied). with AMAL for the monetary demand of its employees, he is nevertheless directly liable to them
for his questionable conduct in attempting to deprive them of their just share in the assets of
Had Respondent A. de Guzman given timely notice of his complaint, his case could have been AMAL.
consolidated with this case and the issues in both cases could have been resolved in a manner
that would give due consideration to the rights and liabilities of all parties in interest at the least, Under Art. 2219, (10) of the Civil Code, moral damages may be recovered for the acts referred
in case consolidation is objected to or no longer possible, the Complainants herein could have to in Art. 21. In Bert Osmeña & Associates vs. Court of Appeals, 11 we held that "fraud and
been given a chance to intervene in the other case so that whatever disposition might be bad faith having been established, the award of moral damages is in order." And in Pan Pacific
rendered by Arbiter Magno would include consideration of Complainants' claims herein. Company (Phil.) vs. Phil. Advertising Corp., 12 moral damages were awarded against the
defendant for its wanton and deliberate refusal to pay the just debt due the plaintiff.
It is not disputed that the petitioner in the case at bar had his own claims against AMAL and
consequently had some proportionate right over its assets. However, this right ceased to exist It is settled that the court can grant the relief warranted by the allegation and the proof even if
when, knowing fully well that the private respondents had similarly valid claims, he took it is not specifically sought by the injured party. 13 In the case at bar, while the private
advantage of his position as general manager and applied AMAL's assets in payment respondents did not categorically pray for damages, they did allege that the petitioner, taking
exclusively of his own claims. advantage of his position as general manager, had appropriated the properties of AMAL in
payment of his own claims against the company. That was averment enough of the injury they
According to Tolentino in his distinguished work on the Civil Code: suffered as a result of the petitioner's bad faith.

The exercise of a right ends when the right disappears, and it disappears when it is abused, The fact that no actual or compensatory damages was proven before the trial court does not
especially to the prejudice of others. The mask of a right without the spirit of justice which gives adversely affect the private respondents' right to recover moral damages. We have held that
it life, is repugnant to the modern concept of social law. It cannot be said that a person exercises moral damages may be awarded in the cases referred to in the chapter on Human Relations
a right when he unnecessarily prejudices another or offends morals or good customs. Over and of the Civil Code (Articles 19-36) without need of proof that the wrongful act complained of had
above the specific precepts of positive law are the supreme norms of justice which the law caused any physical injury upon the complainant. 14
develops and which are expressed in three principles: honeste vivere, alterum non laedre and
just suum quique tribuere; and he who violates them violates the law. For this reason, it is not When moral damages are awarded, exemplary damages may also be decreed. 15 Exemplary
permissible to abuse our rights to prejudice others. 9 damages are imposed by the way of example or correction for the public good, in additional to
moral, temperate, liquidated or compensatory damages. 16 According to the Code
The modern tendency, he continues, is to depart from the classical and traditional theory, and Commission, "exemplary damages are required by public policy, for wanton acts must be
to grant indemnity for damages in cases where there is an abuse of rights, even when the act suppressed. They are an antidote so that the poison of wickedness may not run through the
is not illicit. Law cannot be given an anti-social effect. If mere fault or negligence in one's acts body politic." 17 These damages are legally assessible against him.
can make him liable for damages for injury caused thereby, with more reason should abuse or
bad faith make him liable. A person should be protected only when he acts in the legitimate The petitioner asserts that, assuming the private respondents to have a cause of action against
exercise of his right, that is, when he acts with prudence and in good faith; but not when he him for his alleged bad faith, the civil courts and not the Labor Arbiter have jurisdiction over the
acts with negligence or abuse. 10 case.

The above-mentioned principles are contained in Article 19 of the Civil Code which provides: In Associated Citizen Bank, et al. vs. Judge Japson, 18 this Court held:

Art. 19. Every person must, in the exercise of his rights and in the performance of his duties, Primarily, the issue to be resolved is whether or not the respondent court has jurisdiction to
act with justice, give everyone his due, and observe honesty and good faith. hear and decide an action for damages based on the dismissal of the employee.

This is supplemented by Article 21 of the same Code thus: On all fours to the above issue is the ruling of this Court in Primero v. Intermediate Appellate
Court (156 SCRA 435 [1987]) which once again reiterated the doctrine that the jurisdiction of
the Labor Arbiter under Article 217 of the Labor Code is broad and comprehensive enough to Sound practice seeks to accommodate the theory which avoids waste of time, effort and
include claims for moral and exemplary damages sought to be recovered by an employee expense, both to the parties and the government, not to speak of delay in the disposal of the
whose services has been illegally terminated by is employer (Ebon v. De Guzman, 113 SCRA case (cf. Fernandez v. Garcia, 92 Phil. 592, 597). A marked characteristics of our judicial set-
55 [1982]; Aguda v. Vallejos, 113 SCRA 69 [1982]; Getz Corporation v. Court of Appeals, 116 up is that where the dictates of justice so demand . . . the Supreme Court should act, and act
SCRA 86 [1982]). with finality. (Li Siu Liat v. Republic, 21 SCRA 1039, 1046, citing Samal v. CA, 99 Phil. 230 and
U.S. v. Gimenez, 34 Phil. 74). In this case, the dictates of justice do demand that this Court
For the unlawful termination of employment, this Court in Primero v. Intermediate Appellate act, and act with finality. (Beautifont, Inc. v. CA, 157 SCRA 481)
Court, supra, ruled that the Labor Arbiter had the exclusive and original jurisdiction over claims
for moral and other forms of damages, so that the employee in the proceedings before the It is stressed that the petitioner's liability to the private respondents is a direct liability in the
Labor Arbiter should prosecute his claims not only for reliefs specified under the Labor Code form of moral and exemplary damages and not a solidary liability with AMAL for the claims of
but also for damages under the Civil Code. its employees against the company. He is being held liable not because he is the general
manager of AMAL but because he took advantage of his position by applying the properties of
. . . Question of damages which arose out of or connected with the labor dispute should be AMAL to the payment exclusively of his own claims to the detriment of other employees.
determined by the labor tribunal to the exclusion of the regular courts of justice (Limquiaco, Jr.
v. Ramolete, 156 SCRA 162 [1987]). The regular courts have no jurisdiction over claims for WHEREFORE, the questioned decision is AFFIRMED but with the modification that the
moral and exemplary damages arising from illegal dismissal of an employee (Vargas v. Akai petitioner shall not be held jointly and severally liable with AMAL for the private respondents'
Philippines, Inc., 156 SCRA 531 [1987]). money claims against the latter. However, for his bad faith in arrogating to himself AMAL's
properties to the prejudice of the private respondents, the petitioner is ordered: 1) to pay the
Although the question of damages arising from the petitioner's bad faith has not directly sprung private respondents moral damages in the sum of P20,00.00 and exemplary damages in the
from the illegal dismissal, it is clearly intertwined therewith. The predicament of the private sum of P20,00.00; and 2) to return the assets of AMAL that he has appropriated, or the value
respondents caused by their dismissal was aggravated by the petitioner's act in the arrogating thereof, with legal interests thereon from the date of the appropriation until they are actually
to himself all of AMAL's assets to the exclusion of its other creditors, including its employees. restored, these amounts to be proportionately distributed among the private respondents in
The issue of bad faith is incidental to the main action for illegal dismissal and is thus properly satisfaction of the judgment rendered in their favor against AMAL.
cognizable by the Labor Arbiter.
SO ORDERED.
We agree that, strictly speaking, the determination of the amount thereof would require a
remand to the Labor Arbiter. However, inasmuch as the private respondents were separated
in 1986 and this case has been pending since then, the interests of justice demand the direct
resolution of this motion in this proceeding.

As this Court has consistently declared:

. . . it is a cherished rule of procedure for this Court to always strive to settle the entire
controversy in a single proceeding leaving no root or branch to bear the seeds of future
litigation. No useful purpose will be served if this case is remanded to the trial court only to
have its decision raised again tot the Indeterminate Appellate Court and from there to this
Court. (Alger Electric, Inc. v. Court of Appeals, 135 SCRA 37)

Remand of the case to the lower court for further reception of evidence is not necessary where
the court is in a position to resolve the dispute based on the records before it. On many
occasions, the Court, in the public interest and the expeditious administration of justice, has
resolved actions on the merits instead of remanding them to the trial court for further
proceedings, such as where the ends of justice would not be subserved by the remand of the
case or when public interest demands an early disposition of the case. (Lianga Bay Logging
Co., Inc. v. CA, 157 SCRA 357)
Republic of the Philippines After having been allowed by the CFI to intervene in Civil Case No. 18460, the petitioner labor
organization sought to dismiss the Complaint on the ground that the said court had no
SUPREME COURT jurisdiction over the case filed by the private respondent.1 The petitioner argued that Civil Case
No. 18460 relates to an existing labor dispute and as such the proper forum for the same is the
industrial court.
Manila

FIRST DIVISION In an Order dated July 9, 1974, the CFI denied the Motion to Dismiss filed by the petitioner. 2
The petitioner sought a reconsideration of the said case but did not succeed in doing so. 3
G.R. No. L-39084 February 23, 1988
On August 8, 1974, the petitioner elevated the case to this Court by way of the instant Petition.4
The petitioner maintains its stand that the CFI has no jurisdiction over Civil Case No. 18460.
PHILIPPINE ASSOCIATION OF FREE LABOR UNIONS (PAFLU), petitioner, vs.
In an Answer filed with this Court on August 29, 1974, the private respondent contends that
EMILIO V. SALAS, Judge of the Court of First Instance of Rizal, Seventh Judicial District, Civil Case No. 18460 is not a labor dispute recognizable by the industrial court. The private
Branch I, Pasig, Rizal and WONG KING YUEN, respondents. respondent points out that Civil Case No. 18460 is an ordinary civil action for damages against
the provincial sheriff and directed against the sheriffs bond required under Section 17, Rule 39
GANCAYCO, J.: of the Rules of Court. The private respondent adds that it is an entirely separate proceeding
distinct from the labor case filed with the CIR and that, accordingly, it is the Court of First
This is a petition for certiorari under Rule 65 of the Rules of Court. Instance which has jurisdiction over the same.5

The record of the case discloses that the herein petitioner Philippine Association of Free Labor After a careful examination of the entire record of the case, We find that instant Petition to be
Unions (PAFLU) is a labor organization registered with the Department of Labor and devoid of merit.
Employment. Sometime in 1963, the petitioner filed a Complaint for unfair labor practice with
the then Court of Industrial Relations (CIR) against the Northwest manufacturing Corporation The sole issue in this case is whether or not the CFI has the jurisdiction to issue the injunctive
and a certain Gan Hun. The suit was docketed as Case No. 3901-ULP. relief questioned by the petitioner. We rule in the affirmative.

On September 25, 1972, the CIR rendered a Decision in favor of the petitioner labor It is clear that Civil Case No. 18460 is an ordinary civil action for damages, not a labor dispute.
organization. Pursuant to a writ of execution issued by the CIR, the provincial sheriff of Rizal The case is directed against the provincial sheriff and the recovery of damages is sought
commenced levying the personal properties of the said Gan Hun, particularly the properties against the bond provided for Section 17, Rule 39 of the Rules of Court governing execution
found in his residential apartment unit in San Juan, then a town of Rizal province. and satisfaction of judgments.

The herein private respondent Wong King Yuen however, claims that Gan Hun is his boarder Even if the act complained of by the private respondent arose from a labor dispute between
in the apartment unit mentioned earlier and that the properties inside the apartment unit levied the petitioner and another party, the inevitable conclusion remains the same — there is no
by the provincial sheriff belong to him and not to Gan Hun. labor dispute between the petitioner and the private respondent. Civil Case No. 18460 has no
direct bearing with the case flied with the industrial court. The civil case remains distinct from
Thus, on October 18, 1973, the private respondent filed a Complaint for damages with the then the labor dispute pending with the CIR.
Court of First Instance (CFI) of Rizal against the provincial sheriff. The suit was docketed as
Civil Case No. 18460. The amount of money involved in the said case is about P24,680.00. Under Commonwealth Act No. 103, the law creating the Court of Industrial Relations, the
jurisdiction of the industrial court is limited to labor disputes. i.e., problems and controversies
As sought by the private respondent, the CFI, with the herein respondent Judge Emilio V. Salas pertaining to the relationship between employer and employee. Section I thereof provides as
presiding therein, issued an injunctive writ restraining the provincial sheriff from proceeding follows —
with the sale of the properties in question.
Sec. 1. Jurisdiction. — There is created a Court of Industrial Relations hereinafter called the
court, which shall have jurisdiction over the entire Philippines to consider, investigate, decide
and settle all questions, matters, controversies, or disputes arising between, and/or affecting
employers and employees or laborers, and regulate the relations between them, . . . .
(Emphasis supplied.)

From the foregoing, it is clear that the jurisdiction of the CIR can be invoked only when there is
a dispute arising between or affecting employers and employees, or when an employer-
employee relationship exists between the parties.

There being no labor dispute between the petitioner and the private respondent, the Court of
First Instance 6 has the jurisdiction to issue the injunctive relief sought by the private
respondent in Civil Case No. 18460.7 The latter case can proceed independently of the case
pending in the Court of Industrial Relations. 8

Accordingly, the writ of certiorari sought by the petitioner cannot issue.

WHEREFORE, in view of the foregoing, the instant Petition for certiorari is hereby DISMISSED
for lack of merit. We make no pronouncement as to costs:

SO ORDERED.

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