LABOR 2 CASES

MIDTERMS

Basic principles: Creation, Powers and Jurisdiction of the NLRC

GIL CAPILI and RICARDO CAPILI v NRLC, et al. 270 SCRA 488 - ALDEN
FACTS: ​The (8) respondents are licensed drivers of public utility jeepneys plying the
Libertad-Sta. Cruz route in Manila. The jeepneys were formerly owned by petitioner Gil Capili.
On 7 May 1991, petitioner Ricardo Capili jointly with his wife had assumed ownership and
operation of the jeepneys driven by private respondents, the latter and the other drivers similarly
situated were required by the jeepney operators to sign individually contracts of lease of the
jeepneys to formalize their lessor-lessee relationship.

Having gathered the impression that the signing of the contracts of lease was a condition
precedent before they could continue driving for petitioners, all the drivers stopped plying their
assigned routes beginning 7 May 1991.

The drivers (22 total) filed a complaint for illegal dismissal before the Labor Arbiter
praying for separation pay. However, 14 of the complainants desisted and resumed their routes
while the remaining 8 refused to return to work.

Petitioners claimed that the 8 drivers voluntarily abandoned their respective jobs without
any valid cause and thereafter refused and still continue to refuse to return to work despite
repeated demand and/or notices given to them to to return to work.

The Labor Arbiter, affirmed by the NLRC, ruled that the issue was a simple case of
misunderstanding only. However, NLRC modified the LA’s decision by granting separation pay
to the drivers. Being the case, petitioners impute grave abuse of discretion on the part of
respondent NLRC in awarding separation pay to private respondents.

ISSUE: ​Whether the drivers are entitled to be awarded with separation pay.

HELD: ​Under Arts. 283 and 284 of the same Code, separation pay is authorized only in cases
of dismissals due to any of these reasons:

a. installation of labor saving devices;

b. redundancy;
c. retrenchment;
d. cessation of the employer's business, and,
e. when the employee is suffering from a disease and his continued employment is
prohibited by law or is prejudicial to his health and to the health of his
co-employees.

However, separation pay shall be allowed as a measure of social justice in those cases
where the employee is validly dismissed for causes other than serious misconduct or those
reflecting on his moral character, but only when he was illegally dismissed.
 In the instant case there was no dismissal at all. There was only a misunderstanding
between petitioners and private respondents which caused the latter to stop reporting for work.
If the Labor Arbiter ordered reinstatement it should not be construed as relief proceeding from
illegal dismissal; instead, it should be considered as a declaration or affirmation that private
respondents may return to work because they were not dismissed in the first place.

When there is no illegal dismissal, even if the relations are strained, separation pay has
no legal basis. Besides, the doctrine on "strained relations" cannot be applied indiscriminately
since every labor dispute almost invariably results in "strained relations;" otherwise,
reinstatement can never be possible simply because some hostility is engendered between the
parties as a result of their disagreement.

G.R. No. 89621 September 24, 1991 = CABIGTING

PEPSI COLA DISTRIBUTORS OF THE PHILIPPINES, INC., represented by its Plant

General Manager ANTHONY B. SIAN, ELEAZAR LIMBAB, IRENEO BALTAZAR & JORGE
HERAYA,​petitioners, vs. ​HON. LOLITA O. GAL-LANG, SALVADOR NOVILLA, ALEJANDRO
OLIVA, WILFREDO CABAÑAS & FULGENCIO LEGO,​ respondents​.

CRUZ, ​J.:

FACTS:

1. The private respondents were employees of the petitioner who were suspected of
complicity in the irregular disposition of empty Pepsi Cola bottles.

2. On July 16, 1987, the PEPSI COLA DISTRIBUTORS OF THE PHILIPPINES, INC​.,
filed a criminal complaint for theft against them but this was later withdrawn and substituted with
a criminal complaint for falsification of private documents.

3. November 23, 1987 after an administrative investigation, the private respondents

were dismissed by the PEPSI COLA DISTRIBUTORS OF THE PHILIPPINES, INC.,

4. On November 26, 1987, the Municipal Trial Court of Tanauan, Leyte, dismissed the
complaint.

5. As a result, they filed a complaint for illegal dismissal with the Regional Arbitration
Branch of the NLRC in Tacloban City on December 1, 1987.

In addition, they instituted in the Regional Trial Court of Leyte, on April 4, 1988, a
separate civil complaint against the PEPSI COLA DISTRIBUTORS OF THE PHILIPPINES,
INC., for damages arising from what they claimed to be their malicious prosecution.

6. The PEPSI COLA DISTRIBUTORS OF THE PHILIPPINES, INC.​, moved to dismiss

the civil complaint on the ground that the trial court had no jurisdiction over the case because it
involved employee-employer relations that were exclusively cognizable by the labor arbiter.
 HELD:

It must be stressed that not every controversy involving workers and their employers can
be resolved only by the labor arbiters. This will be so only if there is a "reasonable causal
connection" between the claim asserted and employee-employer relations. Absent such a link,
the complaint will be cognizable by the regular courts of justice in the exercise of their civil and
criminal jurisdiction.

This case involves a complaint for damages for malicious prosecution which was filed
with the Regional Trial Court of Leyte by the employees of the defendant company. It does not
appear that there is a "reasonable causal connection" between the complaint and the relations
of the parties as employer and employees. The complaint did not arise from such relations and
in fact could have arisen independently of an employment relationship between the parties.

VICTOR CLAPANO, et al. vs. HON. FILOMENO GAPULTOS, et al.

(G.R. Nos. L-51574-77 September 30, 1984)
CONTEMPT POWER

FACTS: ​The spouses Conrado Crisostomo and Thelma Gallaza mortgaged 3 parcels of land
with respondent Philippine National Bank, General Santos City Branch (PNB), as security for a
loan. The mortgage was extrajudicially foreclosed because of the spouses' failure to settle their
obligation, and the properties were sold at public auction to the PNB as the highest bidder. PNB
took possession of the same.
PNB executed a Deed of Promise to Sell said land in favor of respondent Princessita
Jabido-Maulit. When the vendee, Princessita, tried to take physical possession of the land,
petitioners Fernando Abellon and his wife Conchita Abellon (Abellons) claiming to be the
tenants of the former owner, Crisostomo, refused to give up possession.
PNB and Princessita filed with the CFI of South Cotabato, Branch II, Koronadal an
"Ex-Parte Motion for the Issuance of Writ of Possession. The Writ was issued placing PNB
and/or Princessita in possession, to the exclusion of the former owners. Another Order was
issued directing respondent Provincial Sheriff to place PNB and Princessita in complete
possession of the subject property, and to remove and destroy the temporary huts and/or
dwellings and other improvements in the premises huts and/or dwellings and other
improvements in the premises that appear to obstruct and prevent execution. PNB and
Princessita were thus placed in complete possession.
However, in another proceeding before the then Court of Agrarian Relations of Cotabato
City (CAR) Branch II, the Abellons filed a Petition for Reinstatement. The CAR issued a
Restraining Order enjoining respondents and/or their representatives from further depriving the
Abellons of the peaceful possession of the land they were tenanting. Attempts by private
respondents to dissolve that Order were unsuccessful.
 When the Abellons re-entered the area and harvested coconuts, PNB and Princessita
charged the Abellons with contempt of Court before the CFI of South Cotabato. Atty. Victor A.
Clapano (petitioner’s counsel) was included because he had allegedly instructed Abellons not to
vacate the property.
The CFI issued the challenged Order finding that there existed prima facie evidence of
contempt of Court against petitioners and directed the Provincial Fiscal to file five (5) separate
Informations against them covering five allegedly contemptuous acts committed on different
dates. Complying, the Provincial Fiscal filed four (4) separate Informations for Indirect Contempt
against petitioners in the CFI. Petitioners moved to quash the Informations but quashal was
denied. Petitioners Victor Clapano, Alejandro Abejeron Tertuliano Abejeron, Fernando Abellon.
Conchita Abellon. Anias Mahinay and Marcelo Saycon are now before us assailing the above
Orders of respondent CFI.

ISSUE: ​Whether the petitioners can be charged of contempt.

HELD: NO. ​The Informations filed against petitioners in the criminal cases in the Court of First
Instance of South Cotabato, Branch 11, at Koronadal, are declared null and void.
Fuentes, et al vs. Leviste, et als., is authority for ​the doctrine that the mere refusal of
the defeated party to surrender the property to the winning party upon the order of the
sheriff does not, constitute contempt. And although it has been held that there is
contempt of Court when the defeated party re-enters the land after possession thereof
has been delivered to the prevailing party by the sheriff in the enforcement of the writ of
execution, the peculiar circumstances of this case exculpate petitioners from any charge
of contempt.
(***Further explanation: In the first place, petitioners were successful in obtaining an
Order upholding their tenancy status and enjoining the defendants therein from depriving them
of their possession and cultivation of the subject property. Secondly, under Section 35, Rule 39
of the Rules of Court, the possession of property is given to a purchaser in extrajudicial
foreclosures unless a third party is actually holding the property adversely to the judgment
debtor. In this case, the subject land was being possessed and cultivated by the Abellons as
third parties, whose status as tenants was recognized in CAR case. In the CAR case, the
parties eventually entered into a Compromise Agreement, wherein they stipulated among other
things, that the Abellons were being conceded to be tenants of the subject property, and were
being allowed to re-enter the landholding. Thirdly, as tenants, Abellons are protected by
Presidential Decree No. 1038, which provides that no tenant tiller of private agricultural lands
devoted to crops other than rice and/or corn shall be removed, ejected, ousted or excluded from
his farm holding unless for causes provided by law and directed by a final decision or order of
the court. Sale of the land is not included as one of the just causes for removal of tenants.)

Procedure and Appeals

Rapid Manpower Consultant v. NLRC

Facts:
The petitioner in behalf of its accredited principal, Albert Abela Group/Saudi Catering
and Contracting Services, hired Wilfredo Nazareno, David Prodigalidad, Dante San
Miguel, and Fernando Dabu (complainants) as janitor and deployed them at Khaled
International Airport in Riyadh, Saudi Arabia for three years. Before the expiration of
their contract, the complainants were repatriated to the Philippines allegedly on
violations of company rules and laws of Saudi Arabia. On September 18, 1985, they
filed a complaint with the POEA for illegal dismissal and payment of overtime pay,
salary differential and attorney's fees. On November 3, 1986, petitioner filed a
Manifestation reserving its light to present additional evidence as soon as the same are
made available by its principal in Al-Khobar, Kingdom of Saudi Arabia.

On January 15, 1987, the POEA rendered its decision and required the Rapid
manpower and the Albert group to pay jointly and severally the complainants their
salaries corresponding to the unexpired portion of their contracts and unpaid overtime
pay.

On February 9, 1987, petitioner appealed to the NLRC and contented that the POEA
erred in appreciating the facts.

On June 16, 1987, petitioner filed a Supplemental Memorandum on Appeal with Motion
for New Trial and claimed that it received the original employment records of the
complainant from the office of their foreign employer in Saudi Arabia that would justify
the dismissal of complainants and would serve as evidence.

On November 22, 1988, the NLRC affirmed the decission of POEA and remanded the
case for further reception of evidence on the issue of ILLEGAL DISMISSAL only.
The petitioner then appealed to the supreme court that NLRC erred when it ruled to
exclude the issues on salary differential pay and unpaid overtime pay from being
remanded for having failed to raise these on appeal despite the fact that the relief being
sought for as stated in its Memorandum on Appeal praying to set aside the decision of
the Honorable POEA Administration and subsequent dismissal of the case which, for all
intents and purposes included all issues raised therein.

Petitioners: Contended that it was not able to discuss and refute claimants' money
claims owing to the fact that it did not have the documents to controvert the said claims;
that it manifested before the POEA such lack and sought time to secure the much
needed documents; that at the time the POEA rendered its decision, it still did not
possess the said evidence; that it would have been foolish for petitioner to include the
issues on money claims on appeal and fabricate its argument; that in its Supplemental
Memorandum on Appeal, petitioner prayed for new trial based on newly discovered
evidence as an alternative remedy; that the prayer in the original Memorandum on
Appeal sought to reverse the Decision of January 15, 1989 and dismissal of this case
which was comprehensive enough to include the other issues on money claims; and
that it has no intention to deprive respondents of their money claims if the same are
legitimate, valid and deserving but that the payment must be done after considering all
the evidence including the documentary evidence it received from respondents'
employer in Saudi Arabia.

Held:​The petition has merit. In labor cases, the rules of evidence prevailing in courts of
law or equity are not controlling (Article 221, Labor Code). The law requires the
Commission and its members and the Labor Arbiters to use every and reasonable
means to ascertain the facts in each case speedily and objectively in the interest of due
process. The essence of due process is to be found in the reasonable opportunity to be
heard and to submit any evidence one may have in support of one's defense.
In the case, the requirements of due process was not fully met. Thus the supreme court
orderes to remand the entire case not just the issue on illegal dismissal to the POEA
owing to the peculiar circumstances of this case. The petitioners could hardly be faulted
for the delayed transmittal of the documents from Saudi Arabia. They did not sleep on
their rights. Petitioners promptly informed the POEA of their lack of evidence and
inability to fully traverse the issues and arguments raised against them. They had asked
for time to get the necessary evidence but they were not granted the opportunity.

DBP VS. NLRC - PADRIGO

Facts:​ November 14, 1986, private respondents filed with DOLE- Daet, Camarines
Norte, 17 individual complaints against Republic Hardwood Inc. (RHI) for unpaid wages
and separation pay. These complaints were thereafter endorsed to Regional Arbitration
Branch of the NLRC since the petitioners had already been terminated from
employment.
RHI alleged that it had ceased to operate in 1983 due to the government ban against
tree-cutting and that in May 24, 1981, its sawmill was totally burned resulting in
enormous losses and that due to its financial setbacks, RHI failed to pay its loan with
the DBP. RHI contended that since DBP foreclosed its mortgaged assets on September
24,1985, then any adjudication of monetary claims in favor of its former employees must
be satisfied against DBP. Private respondent impleaded DBP.
Labor Arbiter favored private respondents and held RHI and DBP jointly and severally
liable to private respondents. DBP appealed to the NLRC. NLRC affirmed LA’s
judgment. DBP filed M.R. but it was dismissed. Thus, this petition for certiorari.

Issue:​ Whether or not the Joint Decision of Executive Labor Arbiter Gelacio L. Rivera is
violative of procedural due process on the part of DBP
Held:
DBP asserts that it was deprived of due process since there was no formal order impleading it in
the complaints against RHI. Moreover, DBP points out, the cases were never set for hearing
thus depriving it of the opportunity to peruse the documentary evidence of the complainants and
to confront the complainants' witnesses. Additionally, DBP was not given an opportunity to
present its own evidence.
There is no merit to this contention of DBP. Denial of due process means the total lack
of opportunity to be heard. There is no denial of due process where a party is given an
opportunity to be heard and to present his case. The petitioner in this case filed an
opposition to the motion to implead it as a party defendant. It likewise filed a motion for
reconsideration of the labor arbiter's decision. Thereafter, DBP filed an appeal with the
NLRC and, later on, a motion for reconsideration of the NLRC decision. The petitioner,
thus, was given ample opportunity to present its case. It was not denied due process.

Bantolino vs Coca-cola - PEÑA

FACTS: ​Sixty-two (62) employees of respondent Coca-Cola Bottlers, Inc., and its officers, filed
a complaint against respondents for unfair labor practice through illegal dismissal, violation of
their security of tenure and the perpetuation of the Cabo System. They thus prayed for
reinstatement with full back wages, and the declaration of their regular employment status.

Labor Arbiter Jose De Vera conducted clarificatory hearings to elicit information the
complainants averred that in the performance of their duties as route helpers, bottle
segregators, and others, they were employees of Coca-Cola Bottlers, Inc. Respondent company
replaced them and prevented them from entering the company premises, they were deemed to
have been illegally dismissed.

In lieu of a position paper, respondent company filed a motion to dismiss complaint for lack of
jurisdiction and cause of action, there being no employer-employee relationship between
complainants and Coca-Cola Bottlers, Inc., and that respondents Lipercon Services, Peoples
Specialist Services and Interim Services being bona fide independent contractors, were the real
employers of the complainants.
Labor Arbiter Jose De Vera rendered a decision ordering respondent company to reinstate
complainants to their former positions with all the rights, privileges and benefits due regular
employees, and to pay their full back wages which, with the exception of Prudencio Bantolino
whose back wages must be computed upon proof of his dismissal as of 31 May 1998, already
amounted to an aggregate of P1,810,244.00.

On appeal, the NLRC sustained the finding of the Labor Arbiter that there was indeed an
employer-employee relationship between the complainants and respondent company.
Respondent Coca-Cola Bottlers appealed to the Court of Appeals which, although affirming the
finding of the NLRC that an employer-employee relationship existed between the contending
parties nonetheless agreed with respondent that the affidavits of some of the complainants
should not have been given probative value for their failure to affirm the contents thereof and to
undergo cross-examination. As a consequence, the appellate court dismissed their complaints
for lack of sufficient evidence.

Contention of the Petitioner: ​Court of Appeals should not have given weight to respondents
claim of failure to cross-examine them. They insist that, unlike regular courts, labor cases are
decided based merely on the parties position papers and affidavits in support of their allegations
and subsequent pleadings that may be filed thereto.

Contention of the Respondent:​ affiants were not presented in court to affirm their statements,
much less to be cross-examined, their affidavits should, as the Court of Appeals rightly held, be
stricken off the records for being self-serving, hearsay and inadmissible in evidence.

ISSUE: ​Whether the Labor Arbiter and NLRC is bound to comply with the technicalities of law

RULING: NO. ​It was not necessary for the affiants to appear and testify and be cross-examined
by counsel for the adverse party. To require otherwise would be to negate the rationale and
purpose of the summary nature of the proceedings mandated by the Rules and to make
mandatory the application of the technical rules of evidence. Art. 221 of the Labor Code, the
rules of evidence prevailing in courts of law do not control proceedings before the Labor Arbiter
and the NLRC. Further, it notes that the Labor Arbiter and the NLRC are authorized to adopt
reasonable means to ascertain the facts in each case speedily and objectively and without
regard to technicalities of law and procedure, all in the interest of due process. We find no
compelling reason to deviate therefrom.

To reiterate, administrative bodies like the NLRC are not bound by the technical niceties of law
and procedure and the rules obtaining in courts of law.

NASIPIT LUMBER CO. VS NLRC

FACTS​:
Nasipit Lumber Company, Inc (NALCO) employed Juanito Collado as a security guard on
September 9. 1970. During his employment, four crates of lawanit boards containing 1,000
panels were stolen from NALCO’s premises. He was implicated for theft and was placed under
preventive suspension. On September 8, 1976, NALCO filed a petition for clearance to dismiss
Collado with the Regional Office of the DOLE in Cagayan de Oro City. Collado opposed the
petition. The case was then set for hearing on September 16, 1976, but Collado, despite due
notice, failed to appear. NALCO was allowed to present evidence ex-parte. On October 12,
1976, the petition was approved. Collado filed a motion for reconsideration on the ground that
he was not given an opportunity to rebut the false findings or adduce evidence on his favor.
Roughly two months after, the case was referred to the Executive Labor Arbiter for compulsory
arbitration however, after a perusal of records, the Labor Arbiter returned the case to the
Regional Director for whatever appropriate action he may deem fit.
Consequently, it was referred to the Sec of Labor where the Acting Secretary issued an order
affirming the application for clearance to dismiss Collado. Collado then filed a complaint before
the Butuan District Labor Office for unjust dismissal and reinstatement with backwages and
benefits. NALCO then filed a Motion to Dismiss on the ground that Collado has no sufficient
cause of action and that the decision of the Acting Labor Secretary had become final and
executory, hence there is res judicata. Again, the case was referred to the Executive Labor
Arbiter for compulsory arbitration and this time, the Exec LA decided that NALCO should
reinstate Collado to his former position without backwages and without loss of his seniority
rights. This prompted both parties to the NLRC wherein NALCO asked for the reversal and
revocation of the decision of the Exec LA, while Collado prayed for a modification of the
appealed decision to include backwages and benefits in addition to reinstatement. The NLRC
rendered a decision modifying the Exec LA’s decision by ordering Collado’s reinstatement with
two years backwages without qualification and loss of seniority rights. Hence, NALCO filed a
petition for certiorari and prohibition with prayer for the issuance of a writ of preliminary
injunction and/or a restraining order seeking to annul the NLRC decision and to prohibit its
execution. The SC dismissed the case for lack of merit but, NALCO filed an urgent motion for
reconsideration to which Collado opposed.

ISSUES​: 1. Is the principle of res judicata applicable in labor relations proceedings?

2. Is the decision of the NLRC to reinstate Collado with back wages and without loss of seniority
rights valid?
RULING​:
1. No, it is not applicable in labor relations proceedings considering that the IRR of the Labor
Code provides that such proceedings are “non-litigous and summary in nature without regard to
legal technicalities obtaining in courts of law.” This is in consonance with the dictum that the
doctrine of res judicata applies only to judicial and quasi-judicial proceedings and not to the
exercise of administrative powers.
2. No, the NLRC abused its discretion in directing his reinstatement with two years backwages.
The relation between NALCO and Collado is now strained by Collado’s violation of the trust and
confidence reposed upon him as a member of the security force. Proof beyond reasonable
doubt of an employee’s misconduct is not required when loss of confidence is the ground for
dismissal. It is sufficient if the employer has “some basis” to lose confidence or that the
employer has reasonable ground to believe or to entertain the moral conviction that the
employee concerned is responsible for the misconduct and that the nature of his participation
therein rendered him absolutely unworthy of the trust and confident demanded by his position.

PHILIPPINE NATIONAL CONSTRUCTION CORPORATION (PNCC) vs. DIRECTOR PURA

FERRER-CALLEJA, RASIDALI C. ABDULLAH, ENFORCEMENT UNIT NCR ARBITRATION
BRANCH, REYNALDO SANTOS, ET AL. ,

167 SCRA 294 - ALDEN

FACTS: T​he 388 private respondent are employees of petitioner who are members of the
PNCC Tollways and Workers Union. The union engaged the services of Atty. Emmanuel Clave
as labor advocate, negotiator and adviser with compensation of 10% on any arbitration award,
settlement, collective bargaining agreement (CBA) negotiation gains, plus expenses in the
performance of his responsibilities. Negotiation fee payable to Atty. Clave was lowered from
10% to 5%. Union resolutions were passed providing that fee’s payable to Atty. Clave will be
subject to check-off arrangement with the PNCC and directing it’s members to execute check-off
authorization.

Relaying on the union’s resolution PNCC deducted special assessment fees from all
union members. However, respondent alleged that they did not comply with the check off
authorization hence, PNCC is not authorized to deduct from their salaries. On July 11, 1985, the
388 private respondents, members of the then CDCP Union, now PNCC Employees and
Workers Union, filed a petition with the National Capital Region Director of the Department of
Labor and Employment (DOLE) against their own union officers and the petitioner. They asked
that a temporary restraining order enjoining their employer from further collecting special
assessments from salaries of union members, declaring resolutions of executive board of the
union null and void and ordering PNCC and/or union officers to return the amount already
deducted.

Mid-Arbiter set the hearing of the case but PNCC was not able to file any pleadings in
the hearing of the case and was not able to present it side. Med-Arbiter issued an order
declaring the questioned Resolution null and void and to the effect ordered PNCC to stop
collecting special assessment against union members’ salaries. He likewise ordered thence and
the union, jointly severally return to the employees concern the amount deducted from their
salaries.

On November 5, 1986, Public respondent BLR Director Pura Ferrer-Calleja issued a writ
of execution, directing the Enforcement Unit of the NCR Branch to collect from
petitioner-employer and/or the CDCP Union the sum of P257,400.00, the total amount of
deductions made against the salaries of the employees, or to satisfy said amount from the
movable or immovable properties of the petitioner and/or union which are not exempt from
execution. Petitioner now questions the said order of public respondents contending that there
was a denial of petitioner’s right to due process of law when it ordered the writ of execution
because they were not duly informed of the case filed against them. It also questions the
jurisdiction of BLR.

ISSUE: ​Whether the Bureau of Labor Relation has jurisdiction over cases involving employers
or only for matters involving disputes between and among the union, its officers and members?
Will the summons served upon minor employees binding upon the employer?

HELD: O​n the issue of jurisdiction, yes, the Court has jurisdiction over the controversy. Under
Article 241 of the Labor Code, the Bureau of Labor Relations has jurisdiction over cases of
reported violations thereof and to mete the appropriate penalty in disputes between and among
the union, its officers and members. The petition was for violation of said article which provides
that "(n)o special assessment or other extraordinary fees may be levied upon the members of a
labor organization unless authorized by a written resolution of a majority of all the members at a
general membership meeting duly called for the purpose. ..."

On the second issue, the court ruled that the service of summons upon the minor
subordinates of petitioner's Tollways Division is not valid and binding. Under Section 15, Rule
14 of the Rules of Court, service of summons upon public corporations must be made on its
executive head or on such officer or officers as the law or the court may direct. Under Section
13 of the same Rule, service upon a private corporation may be made on the president,
manager, secretary, cashier, agent or any of its directors. The court also took judicial notice that
the political upheaval of 1986 affected the petitioner as government-controlled corporation. The
defective service of summons prevented the pending case from being brought to the attention of
petitioner's Legal Department. The eloquent non-appearance of petitioner in all the hearings
establishing a money claim against it is an indication of lack of sufficient notice regarding the
case. It came to know of the case only when the judgment against it was being executed. Notice
to enable the other party to be heard and to present evidence is not a mere technicality or a
trivial matter in any administrative or judicial proceedings. The service of summons is a very vital
and indispensable ingredient of due process. With that, restraining order issued by the Supreme
Court was made permanent.

G.R. No. L-58011 & L-58012 November 18, 1983 = CABIGTING

VIR-JEN SHIPPING AND MARINE SERVICES, INC., ​petitioner,

vs.

NATIONAL LABOR RELATIONS COMMISSION, ROGELIO BISULA RUBEN

ARROZA JUAN GACUTNO LEONILO ATOK, NILO CRUZ, ALVARO ANDRADA, NEMESIO
ADUG SIMPLICIO BAUTISTA, ROMEO ACOSTA, and JOSE ENCABO ​respondents.

GUTIERREZ, JR., ​J

FACTS:
 1. ​The Seamen entered into separate contracts of employment with the Company,
engaging them to work on board M/T' Jannu for a period of twelve (12) months.

2. Rogelio H. Bisula,(respondent) received a cable from VIR-JEN SHIPPING AND

MARINE SERVICES, INC., ​advising him of the possibility that the vessel might be directed to
call at ITF-controlled ports and at the same time informing him of the procedure to be followed in
the computation of the special or additional compensation of crew members while in said ports.

(ITF is the acronym for the International Transport Workers Federation, a militant
international labor organization with affiliates in different ports of the world)

3. On 22 March 1979, the VIR-JEN SHIPPING AND MARINE SERVICES, INC., sent
another cable to respondent Bisula, this time informing him of the respective amounts each of
the officers and crew members would receive as special compensation when the vessel called
at the port of Kwinana Australia, an ITF-controlled port. This was followed by another cable on
23 March 1979, informing him that the officers and crew members had been enrolled as
members of the ITF in Sydney, Australia, and that the membership fee for the 28 personnel
complement of the vessel had already been paid.

4. The following day, shipmaster Bisula cabled Vir-jen stated that the officers and crews
were not interested in ITF membership and their demand was a 50 percent increase based on
their then salaries.

5. In reply, Vir-jen counter proposed a 25 percent increase.

6. Only after Kyoei Tanker Co., Ltd., declined to increase the lumps sum amount given
monthly to Vir-jen was the decision to terminate their employment formulated.

7. A complaint for illegal dismissal and non-payment of earned wages with the National
Seamen Board was filed.

8. The NSB rendered a decision declaring that the seamen breached their employment
contracts when they demanded and received from Vir-jen Shipping wages over and above their
contracted rates. Also the dismissal of the seamen was declared legal.

9. The seamen appealed the decision to the NLRC which reversed the decision of the
NSB and required the petitioner to pay the wages and other monetary benefits corresponding to
the unexpired portion of the manning contract on the ground that the termination of the contract
was without valid cause.

ISSUE: ​whether or not the seamen violated their contracts of employment

HELD:

The form contracts approved by the National Seamen Board are designed to protect
Filipino seamen not foreign ship owners who can take care of themselves.

The standard forms embodies the basic minimums which must be incorporated as parts
of the employment contract. They are not collective bargaining agreements or immutable
contracts which the parties cannot improve upon or modify in the course of the agreed period of
time. To state, therefore, that the affected seamen cannot petition their employer for higher
salaries during the 12 months duration of the contract runs counter to established principles of
labor legislation. The National Labor Relations Commission, as the appellate tribunal from
decisions of the National Seamen Board, correctly ruled that ​the seamen did not violate their
contracts​ to warrant their dismissal.