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ART. 3.

DECLARATION OF BASIC POLICY Labor laws, in other words, are a significant factor in a nation’s
economy. They explain, partly but weightily, why a nation is
The State shall afford protection to labor, promote full
poor or prosperous, why a country is competitive or not in the
employment, ensure equal work opportunities regardless of
global market. Thus, the needs, the faults, and the goals of the
sex, race or creed, and regulate the relations between
economy cannot be ignored in formulating the labor laws,
workers and employers. The State shall assure the rights of
otherwise, the labor laws become purposeless, socially
workers to self-organization, collective bargaining, security of
irrelevant, or economically damaging.
tenure, and just and humane conditions of work.
The classic The Idea of Law asserts that any attempt by law to
COMMENTS
regulate restrictive practices by industry and trade unions is
1. LABOR LAWS AND SOCIAL-ECONOMIC GOALS likely to prove unconstructive if the inquiries and evidence of
economists and sociologists are disregarded.
The issues mentioned in this article — employment, protection
to labor, labor-management relations — are social issues. They
are concerns of labor laws because labor laws are devices for
2. INTERDEPENDENCE
social equity. Labor laws, depending on their provisions and
thrusts, may make the rich richer and the poor simply poor. The two-sentence declaration of basic policy in Article 3 hardly
mentions the employer except in the phrase “regulate the
Article 3 is not a statement of goals but a statement of policy
relations between workers and employers.” All other phrases
directions towards the goals.
pertain to rights of workers. But it should not be deduced that
The goals of the national economy, says the Constitution, are a the basic policy is to favor labor to prejudice capital. The plain
more equitable distribution of opportunities, income, and reality is that both sectors need each other. They are
wealth; a sustained increase in the amount of goods and interdependent — one is inutile without the other. Hence, the
services produced by the nation for the benefit of the people. better understanding is that the basic policy is to balance or to
The national economy definitely needs to expand productivity coordinate the rights and interests of both workers and
as the key to raising the quality of life for all, especially the employers. Article 3 of the Code, written in the early 1970s,
underprivileged.1 Those goals are the route to social justice, a should be viewed in the perspective of the 1987 Constitution
route directed by laws, especially those about labor and which, as already stated, explicitly recognizes shared
employment. responsibility of employers and workers and the right of
enterprise to reasonable returns on investment and to
expansion and growth.
GENERAL PROVISIONS ART. 4
1.2 Concern for Lowly Worker The Supreme Court reaffirms its
ART. 4. CONSTRUCTION IN FAVOR OF LABOR concern for the lowly worker who, often at his employer’s
mercy, must look up to the law for his protection. That law
All doubts in the implementation and interpretation of the
regards him with tenderness and even favor and always with
provisions of this Code, including its implementing rules and
faith and hope in his capacity to help in shaping the nation’s
regulations, shall be resolved in favor of labor.
future. He must not be taken for granted. He deserves abiding
respect. How society treats him determines

1. INTERPRETATION AND CONSTRUCTION whether the knife in his hands shall be a caring tool for beauty
and progress or an angry weapon of defiance and revenge. If
1.1 Laborer’s Welfare; Liberal Approach
we cherish him as we should, we must resolve to lighten “the
In carrying out and interpreting the Labor Code’s provisions and weight of centuries of exploitation and disdain that bends his
its implementing regulations, the working man’s welfare should back but does not bow his head.”
be the primordial and paramount consideration. This kind of
1.3 Reason for According Greater Protection to Employees
interpretation gives meaning and substance to the liberal and
compassionate spirit of the law as provided for in In the matter of employment bargaining, there is no doubt that
the employer stands on higher footing than the employee. First
Article 4 of the New Labor Code. The policy is to extend the
of all, there is greater supply than demand for labor. Secondly,
decree’s applicability to a greater number of employees to
the need for employment by labor comes from vital, and even
enable them to avail of the benefits under the law, in
desperate, necessity. Consequently, the law must protect
consonance with the State’s avowed policy to give maximum
labor, at least, to the extent of raising him to equal footing in
aid and protection to labor.
bargaining relations with capital and to shield him from abuses
In interpreting the Constitution’s protection to labor and social brought about by the necessity for survival. It is safe to
justiceprovisions and the labor laws and rules and regulations presume, therefore, that an employee or laborer who waives in
implementing the constitutional mandate, the Supreme Court advance any benefit granted him by law does so, certainly not
adopts the liberal approach which favors the exercise of labor in his interest or through generosity but under the forceful
rights.
intimidation of urgent need, and hence, he could not have so employer. Such favoritism, however, has not blinded the Court
acted freely and voluntarily.2 to the rule that justice is in every case for the deserving, to be
dispensed in the light of the established facts and the applicable
1.4 Justice, the Intention of the Law
law and doctrine.1
Protection to labor and resolution of doubts in favor of labor
The Secretary of Labor is duly mandated to equally protect and
cannot be pursued to the point of deliberately committing a
respect not only the laborer or worker’s side but also the
miscarriage of justice. The right to obtain justice is enjoyed by
management and/or employer’s side. The law, in protecting the
all members of society, rich or poor, worker or manager, alien
rights of the laborer, authorizes neither oppression nor self-
or citizen. Justice belongs to every one. It is not to be blinded
destruction of the employer.2 Management prerogatives,
or immobilized by the fact of one’s being economically
however, are subject to limitations provided by (1) law, (2)
underprivileged. This
contract or collective bargaining agreements, and (3) general
Article 4, it is submitted, cannot be taken to have superseded principles of fair play and justice.3
Article 10 of the
Briefly introduced below are the most fundamental of the
Civil Code (R.A. No. 386) that states: “In case of doubt in the management rights.
interpretation or application of laws, it is presumed that the
2.1 Right to ROI
lawmaking body intended right and justice to prevail.” Justice,
not expediency, is the higher end of law. And law does not favor The employer has the right to return of investments and to
favoritism amounting to injustice. make profit.
2. MANAGEMENT RIGHTS, BROADLY There is nothing dirty about profit per se — it is profit that
creates jobs and improves the workers’ lot. The Constitution
While the Constitution is committed to the policy of social
provides: “The State shall regulate the relations between
justice and the protection of the working class, it should not be
workers and employers, recognizing the right of labor to its just
supposed that every labor dispute will be automatically decided
share in the fruits of production and the right of enterprises to
in favor of labor. Management also has its own rights which, as
reasonable returns on investments, and to expansion and
such, are entitled to respect and enforcement in the interest of
growth.” Consistent with the policy of the State to bridge the
simple fair play. Out of its concern for those with less privileges
gap between the underprivileged workingman and the more
in life, the Supreme Court has inclined more often than not
affluent employers, the balance in favor of the workingman
toward the worker and upheld his cause in his conflicts with the
should be tilted without being blind to the concomitant right of the relationship, and to have them fairly understood and
the employer to the protection of his property. expressed in advance. The state has no right to interfere in a
private employment and stipulate the terms of the services to
2.2 Right to Prescribe Rules
be rendered; it cannot interfere with the liberty of contract
Employers have the right to make reasonable rules and with respect to labor except in the exercise of the police power.
regulations for the government of their employees, and when For instance, the Court of Industrial Relations issued an order
employees, with knowledge of an established rule, enter the directing the employer to recruit from the union, the
service, the rule becomes a part of the contract of employment employees needed to replace union members who may be
dismissed. This order, in substance and in effect, compels the
GENERAL PROVISIONS ART. 4
company, against its will, to employ preferentially the members
Company policies and regulations are, unless shown to be of the union. The Supreme Court held that the Court of
grossly oppressive or contrary to law, generally binding and Industrial Relations had no authority to issue such compulsory
valid on the parties. Thus in a certain case, the evidence showed order. “The general right to make a contract in relation to one’s
that the chauffeur of the autocalesas, without the consent of business is an essential part of the liberty of the citizens
the respondent company, allowed another chauffeur to drive protected by the due process clause of the Constitution. The
the autocalesa which was under his charge, in violation of the right of a laborer to sell his labor to such person as he may
regulations of the company. The Court held that such act of the choose is, in its essence, the same as the right of an employer
chauffeur constituted a sufficient cause for his dismissal as to purchase labor from any person whom it chooses.
provided for in the regulations of the company.
The employer and the employee have thus an equality of right
2.3 Right to Select Employees guaranteed by the Constitution. If the employer can compel the
employee to work against the latter’s will, this is servitude. If
An employer has a right to select his employees and to decide
the employee can compel the employer to give him work
when to engage them. He has a right under the law to full
against the employer’s will, this is oppression.”
freedom in employing any person free to accept employment
from him, and this, except as restricted by valid statute or valid
contract, at a wage and under conditions agreeable to them.
On the one hand, he may refuse to employ whomever he may
wish, irrespective of his motive, and on the other hand, he has
the right to prescribe the terms upon which he will consent to
Republic of the Philippines ESPIRITU, G. I. MANANSALA, CARLOS SANTOS, FELITO E.
SUPREME COURT CABANGON, ANGEL TICSAY, ROBERTO FORMELOZA, ROMEO
Manila GONZALES, and FLORENCIO MARQUEZ, petitioners,
vs.
SECOND DIVISION
B. F. GOODRICH PHILIPPINES, INC., COURT OF INDUSTRIAL
RELATIONS and HONORABLE JOAQUIN
SALVADOR, respondents.
G.R. No. L-34974 July 25, 1974
Domingo E. de Lara & Associates for petitioners.
P. A. ALMIRA, P. M. AMURAO, J. R. ANGELES, R. N. BADIOLA,
LILIA R. BAUTISTA, G. B. LAIZ, N. A. CANLAS, C. S. DE CASTRO, C. Manuel O. Chan for private respondent. Jose K Manguiat, Jr. for
V. CELIS, JR., A. M. DIONISIO, V. S. ESPIRITU, E. S. GUERRERO, J. respondent Court.
R. GUTIERREZ, E. HERMIDA, M. O. LORENZO, R. S. MARQUEZ, C.
G. PAISO, C. DELA PAZ, O. RABULAN, A. C. SALCEDO, C. P. SAN
JUAN, D. T. SULIT, I. F. UY, FELIX BAYANI LOPEZ, GERRY FERNANDO, J.:p
DOMINGO, Z. DACLISON, A. PANGINDIAN, T. F. PESTANO, P.
What is readily apparent in this appeal from a decision of
FULGAR, BEATRIZ M. LACSON, EROL A. SUGUITAN, ROSALIE O.
respondent Court of Industrial Relations, declaring a strike
ROMERO, AMADOR S. JALOSJOS, R. G. ARTEFICIO, M. R.
illegal because of the means employed, and dismissing
BARTOLOME, MANUEL BASILIA, SYLVIA CAGUIOA, REBECCA
petitioners, was the high pitch of bitterness that marked the
DELA CRUZ, ROGELIO I. CRUZ, LIGAYA A. DURAN, ENRIQUE
relationship between labor and management in the
GALIERO, ANNA T. GAMBOA, FELIPE LLAVORE ARSENIO A.
establishment of private respondent, B. F. Goodrich
MENDOZA, JUSTO MUEDEN, STALINITA QUIJANO, PATRICIA
Philippines, Inc. Even a cursory reading of the records will make
RODRIGUEZ, ALLINAS P. ALBINDA, RUBEN A. ANTONIO,
evident that on both sides, there was the feeling that the other
HERMINIA CANDO, NICOLAS CRUZ, TEREZA A. CRUZ, ANGELES
party was guilty of conduct the most reprehensible resulting in
Q. DELA CRUZ, DANIEL F. BAGUIO, MARCIAL DE LA LUPO, C. DE
the flagrant disregard of its rights. With such a background,
CASTRO, AMELIA R. CEDRO ISLA, ANDRES LACSAMANA, JOSE S.
there was a greater need for objectivity in the application of the
SIENA, ROLANDO S. JOSE, GERFE P. LOHO, BERNARDO
authoritative legal norms to the facts as found. It cannot be said
MARTINEZ, GONZALO MORALES, DIONISIO T. ONG, AUGUSTO
that respondent Court, more precisely respondent Joaquin
SANCHEZ, MANUEL V. TIBAY, MANUEL ALMENDRALA, E. V.
Salvador, then the Judge whose order is now on appeal, was
FRANCIA, CARMELO CAPARROS, ROQUE DUMAGUING, F. P.
fully cognizant that such should be the case.1 It is hard not to
lend credence to the contention of petitioners that there was caused the publication of notices in both the Manila Times and
undue receptivity to the claim of private respondent, no doubt Daily Mirror, newspapers of general and wide circulation ... for
induced by the skill, competence, and resourcefulness of its all employees not participating in the illegal strike to report for
counsel, Atty. Manuel Chan. It was unfortunate that in some of work on or before April 23, 1971, otherwise such failure will be
the crucial stages of the controversy, petitioners did not have considered as participation therein. Such notices were
the same advantage.2 Nonetheless, as will be shown, the strike accompanied by instructions to personnel at all levels on how
could have been viewed with a little less disapproval and even reporting for work will be accomplished, considering the
if declared illegal, need not have been attended with such a precarious situation in relation to the safety of employees
drastic consequence as termination of employment brought about by the strike of respondents. With respect to this
relationship. This last point is even more compelling particular aspect, certain of the respondents who were not
considering the security of tenure which is one of the notable seen in the picket line on or before April 23, 1971 were
features in the present Constitution.3 identified as having failed to report for work ... . It would
appear, however, that these listed respondents who failed to
The facts according to the appealed order follow: "As to the
report for work likewise were seen picketing the premises of
conduct of the strike and the picketing, this Court's Order of
complainant after April 26, 1971, ... ."5 Then came this portion:
July 1, 1971 has fully described the same. In the course of the
"It would seem that the picketing by respondents has
mass picketing, illegal and unlawful acts were committed by the
continued up [to] the present under the same pattern of
respondents such as physically blocking and preventing the
coercive activities narrated in our Order Of July 1, 1971.
entry of complainant's customers, supplies and other
Physical injuries where inflicted on complainants personnel
employees who were not on strike, both in complainant's
manager. Mass picketing with the employment of intimidatory
premises in Makati and Marikina, Rizal. Injuries likewise were
statements have again started on January 3, 1972. The roof of
inflicted on certain employees of complainant. Such acts of
the complainants Makati Recap Plant was set on fire on January
violence and intimidation appear to be of such a widespread
13, 1972 ..."6
nature so as to create an impression that there is a common
pattern of action set into motion by the respondents. The Based on the above facts, it was in the appealed order of Judge
actuations of respondents are likewise illegal. In the premises Salvador; "On the basis, therefore, of the motivation as well as
of complainant at Makati, Rizal, the respondents who picketed the conduct of the strike, the respondent are declared to have
the same on April 20, 1971 were identified ... . Similarly, some committed an illegal strike, which is likewise an unfair labor
of the respondents who picketed the Marikina premises of practice"7 As consequence, in the dispositive portion,
complainants were identified ....4 Further: 'The complainant petitioner where "declared to have lost their status of
employees of the complainant corporation as of April 19, Cement Co. v. Cement Workers Union. 13 For, as was therein
1971"8 The appealed order was handed down on February 4, pointed out, the ruling in National Labor Union, Inc. v.
1972. Had greater awareness been displayed to the approach Philippine Match Factory 14 to the effect that a strike "is an
followed by this court in a 1968 decision, Cebu Portland economic weapon at war with the policy of the Constitution
Cement Co. v. Cement Workers Union,9 as well as to Shell Oil and the law," resort to which "is not, in plain terms,
Workers' Union v. Shell Co. of the Philippines, Ltd. 10 there outlawed," 15although certainly discouraged, is obsolete, for
would have been less certitude displayed in the opinion of as was so clearly pointed out by Justice J. B. L. Reyes in Cebu
Judge Salvador as to the correctness of its decision. Moreover, Portland Cement Co. v. Cement Workers Union: 16 "For a time,
as stated at the outset, if there be deference to what of late has decisions on the issue under consideration were characterized
been so evident, even on the assumption of the illegality of the by strict adherence to the ruling in the Philippine Match Factory
strike, there need not be the automatic termination of the Case." 17 Further, it was stated by him: "The actual break-away
employment relationship, especially so in view of the command from the doctrine laid down in the Philippine Match Factory
of the present Constitution as to the security of tenure. case came in Dinglasan v. National Labor Union, when the
discretionary power of the Court of Industrial Relations to grant
1. It is understandable why respondent Judge Salvador was
affirmative relief was recognized. ... Thereafter, the doctrine
unsympathetic to a strike in which petitioners participated,
enunciated in Interwood Employees Association ... that good
considering the pendency of a certification election, just
faith of the strikers in the staging of the strike is immaterial in
because management would not consider their union as the
the determination of the legality or illegality of the strike, was
exclusive collective bargaining representative. At the very least,
abandoned. In the case of Ferrer v. CIR, et al. the belief of the
it was premature. Nonetheless, there was this commendable
strikers that the management was committing unfair labor
admission in the appealed order of Judge Salvador; "Lest we be
practice was properly considered in declaring an otherwise
miscontrued, the ilegality of the strike for recognition as
premature strike, not unlawful, and in affirming the order of
general proposition is not absolute. We declare such strike
the Labor Court for the reinstatement without back wages of
illegal on the basis of the attendant circumstances in this
said employees." 18 This 1968 decision of this Court, if present
case." 11 It mentioned the attendant circumstances, but as was
in the consciousness of respondent Judge Salvador, certainly
apparent in an earlier portion of such order, what respondent
could have caused, at the very least, a hesitancy on his part to
Judge apparently could not resist was the compelling force of
declare the strike illegal. This is not to deny that the labor union
what by now should be an outmoded view of a strike being "by
ought not to have declared a strike under such circumstances,
its very nature ... coercive ... ." 12 To display such a
but at least, while premature, it could have been plausibly
predisposition is to ignore the leading case of Cebu Portland
viewed as inspired by good faith, although perhaps not guided must have been unduly impressed by the evidence submitted
by sound legal advice. by the Shell Company to the effect that the strike was marred
by acts of force, intimidation and violence on the evening of
2. What was set forth in the facts as found by respondent Judge
June 14 and twice in the mornings of June 15 and 16, 1967 in
Salvador would indicate that it was during the picketing,
Manila. Attention was likewise called to the fact that even on
certainly not peaceful, that the imputed acts of violence did
the following day, with police officials stationed at the strike-
occur. It cannot be ignored, however, that there were injuries
bound area, molotov bombs did explode and the streets were
on both sides because management did not, understandably,
obstructed with wooden planks containing protruding nails.
play a passive role confronted as it was with the unruly
Moreover, in the branches of the Shell Company in Iloilo City as
disruptive tactics of labor. This is not, by any means, to condone
well as in Bacolod, on dates unspecified, physical injuries
activities of such character, irrespective of the parties
appeared to have been inflicted on management personnel.
responsible. It is merely to explain what cannot be justified.
Respondent Court in the appealed decision did penalize with
Nonetheless, did the acts in question call for an automatic
loss of employment the ten individuals responsible for such
finding of illegality? Again, the order issued on February 4, 1972
acts. Nor is it to be lost sight of that before the certification on
appeared to be oblivious of a 1971 decision of this Court, Shell
June 27, 1967, one month had elapsed during which the Union
Oil Workers' Union v. Shell Company of the Philippines,
was on strike. Except on those few days specified then, the Shell
Ltd. 19 There it was clearly held: "A strike otherwise valid, if
Company could not allege that the strike was conducted in a
violent in character, may be placed beyond the pale. Care is to
manner other than peaceful. Under the circumstances, it would
be taken, however, especially where an unfair labor practice is
be going too far to consider that it thereby became
involved, to avoid stamping it with illegality just because it is
illegal." 21 Then, mention was made of a decision "in Insular
tainted by such acts. To avoid rendering illusory the recognition
Life Assurance Co., Ltd. Employees' Association v. Insular Life
of the right to strike, responsibility in such case should be
Assurance Co., Ltd. [where] there is the recognition by this
individual and not collective. A different conclusion would be
Court, speaking through Justice Castro, of picketing as such
called for, of course, if the existence of force while the strike
being 'inherently explosive.' It is thus clear that not every form
lasts is pervasive and widespread, consistently and deliberately
of violence suffices to affix the seal of illegality on a strike or to
resorted to as a matter of policy. It could be reasonably
cause the loss of employment by the guilty party." 22
concluded then that even if justified as to ends, it becomes
illegal because of the means employed. 20 It must be pointed There was in that case a concurring opinion by Justice Barredo
out likewise that the facts as there found would seem to which elicited the approval of the present Chief Justice. Thus:
indicate a greater degree of violence. Thus: "Respondent Court "All these, however, do not mean, on the other hand, that
petitioner's strike should necessarily be held to be illegal. It is original blame must of course be assumed by petitioners, for
always a wholesome attitude in cases of this nature to give but they ought to have known that the picketing that comes within
secondary importance to strict technicalities, whether of the protection of the free speech guarantee is one that is
substantive or remedial law, and to constantly bear in mind the peaceful. It involves people marching to and fro with placards
human values involved which are beyond pecuniary to acquaint the public with the facts of a labor dispute. So it has
estimation. 23 been ruled from Mortera v. Court of Industrial Relations 26 a
1947 decision, to Chan Bros., Inc. v. Federacion Obrera de la
It would seem, therefore, to reiterate a point, that on the date
Industria Tabaquera y Otros Trabajadores de
of the appealed order of February 4, 1972, a less condemnatory
Filipinas 27 decided in January of this year. When they
attitude to the appearance of violence as such was part of the
obstructed entrance into the premises of private respondent,
law of the land. It is to be admitted that this is one of those
they ought to have known that they were inviting reprisal. It has
close cases. What is merely emphasized is that the imputation
been observed of course that in labor controversies the
of illegality on the ground of the means employed is not
unstructured incoherencies of vehement protest for
automatically called for.
grievances, sincerely even if erroneously felt, may easily flare
3. This is not to say that the appealed order is totally bereft of up into rowdy conduct. So it did come about. The appealed
support in law. It is merely to point out that the facts as found order took note of the resulting melee. From the standpoint of
did not point automatically and unerringly to so severe a result, settling a dispute, it would not suffice just to visit recriminations
namely the dismissal of petitioners. From a perspective more on either or both parties. The more crucial question is what to
attuned to the trend indicated in current decisions of this Court, do next.
the three cited cases being representative, the conclusion
We start with the circumstances that ought to be considered.
reached could have been cast in a different mold. In labor law,
To repeat, the breach of the peace, though started by
as in constitutional law, it is no doubt true that the issues
petitioners, was not solely their responsibility as it turned out.
submitted, in the language of Justice Malcolm, may be
For criminal charges and counter charges were filed by one
"determined by the court's approach to them." 24 It is
group against the other. The reply brief of private respondent,
submitted that the direction indicated in the express language
submitted on March 8, 1973, included a memorandum from a
of both the 1935 and the present Constitution, is that which
certain Attorney Rolando A. Velasco, speaking of the status of
leads to protection to labor. 25
the criminal cases filed by the group of petitioners against
As previously noted, both petitioners and private respondent management men, 28 , and of thirteen criminal cases as well as
were guilty of practices far from peaceful in character. The complaints against at least thirty individuals identified with
private respondent. 29 In some of them the complainants did First Lady as the Compassionate Society. 31 To the possible
not press charges, and the cases were dismissed. With the objection that in this Philippine Air Lines case, there was an
submission of such data, its objection to the admission of order of reinstatement, it suffices by way of an answer that
information similar in character as to the status of the criminal while the facts could be distinguished, the basic principle in
cases against petitioners loses weight. What is more, it does not accordance with a constitutional mandate, in the language of
appear as of this date as to who of the petitioners were found Justice Cardozo, speaks with a reverberating clang that drowns
guilty of what was referred to it in the Shell opinion as all weaker sounds.
committing serious acts of violence. As a matter of fact, the
It would imply at the very least that where a penalty less
appealed order merely referred to the instances of picketing
punitive would suffice, whatever missteps may be committed
conducted illegally without specifically pin-pointing the culprits
by labor ought not to be visited with a consequence so severe.
to whom such kind of conduct could be ascribed. It would seem
It is not only because of the law's concern for the workingman.
therefore, that the wholesale dismissal of petitioners is far from
There is, in addition, his family to consider. Unemployment
warranted. It is to be admitted though that on a showing of
brings untold hardships and sorrows on those dependent on
having engaged in non-peaceful activities of a serious
the wage-earner. The misery and pain attendant on the loss of
character, the right to re-admission is defeated.
jobs then could be avoided if there be acceptance of the view
This conclusion is further fortified by the stress on the security that under all the circumstances of this case, petitioners should
of tenure that is a notable feature of the present Constitution. not be deprived of their means of livelihood. Nor is this to
As pointed out in a decision rendered only last condone what had been done by them. For all this while, since
month, Philippine Airlines, Inc. v. Philippine Air Lines private respondent considered them separated from the
Employees Association: 30 "The futility of this appeal becomes service, they had not been paid. From the strictly juridical
even more apparent considering the express provision in the standpoint, it cannot be too strongly stressed, to follow Davis
Constitution already noted, requiring the State to assure in his masterly work, Discretionary Justice, 32 that where a
workers 'security of tenure.' It was not that specific in the 1935 decision may be made to rest an informed judgment rather
Charter. The mandate was limited to the State affording than rigid rules, all the equities of the case must be accorded
protection to labor, especially to working women and minors, their due weight. Finally, labor law determinations, to quote
.... from Bultmann, should be not only secundum rationem but
also secundum caritatem.
... That is to conform to the ideal of the New Society, the
establishment of which was to felicitously referred to by the
4. This is all that needs to be said except to remind petitioners their acquittal therein. Respondent Court is hereby ordered to
that the basic doctrine underlying the provisions of the implement this decision as expeditiously as possible. No costs.
Constitution so solicitous of labor as well as the applicable
Zaldivar, Barredo, Antonio, Fernandez and Aquino, JJ., concur.
statutory norms is that both the working force and
management are necessary components of the economy. The
rights of labor have been expanded. Concern is evident for its
DIGEST:
welfare. The advantages thus conferred, however, call for
attendant responsibilities. The ways of the law are not to be ALMIRA et al. vs BF Goodrich (1974) ART 4 Construction in
ignored. Those who seek comfort from the Shelter that it Favor of Labor: COMPASSIONATE JUSTICE
affords should be the last to engage in activities which negate
What is readily apparent in this appeal from a decision of
the very concept of a legal order as antithetical to force and
respondent Court of Industrial Relations, declaring a strike
coercion. What is equally important is that in the steps to be
illegal because of themeans employed, and dismissing
taken by it in the pursuit of what it believes to be its rights, the
petitioners, was the high pitch of bitterness that marked the
advice of those conversant with the requirements of legal
relationship between labor and management inthe
norms should be sought and should not be ignored. It is even
establishment of private respondent, B. F. Goodrich
more important that reason and not violence should be its
Philippines, Inc.
milieu.
FACTS:
WHEREFORE, the appealed order of February 4, 1972 as
affirmed in a resolution of March 14, 1972 is reversed and set Petitioners committed mass picketing because management
aside. Petitioners against whom no criminal charges filed in would not consider their union as the exclusivecollective
relation to their acts referred to in this decision are still pending bargaining representative, this resulted to illegal and unlawful
are ordered reinstated to their employment, with the right to acts against customers, supplies and otheremployees who
backpay corresponding to eighteen (18) months, at the were not on strike. All held responsible for such acts were
respective rates of compensation they were being paid on identified.A notice accompanied by instructions to personnel at
February 4, 1972, without any deduction corresponding to any all levels was publicized stating that for all employees
possible income earned elsewhere since their dismissal to the notparticipating in the illegal strike to report for work on a
present. Those petitioners against whom criminal complaints certain day, otherwise such failure will be considered
have been filed shall be reinstated, with the right to backpay as asparticipation therein. Petitioners who were not seen in the
herein indicated, only upon the final dismissal of said cases or picket line on the said date were identified as havingfailed to
report for work. It would appear, however, that those who of their means of livelihood. Nor is this to condone what had
failed to report for work likewise were seenpicketing the been done by them. For allthis while, since private respondent
premises of complainant after. The CIR, under Judge Salvador, considered them separated from the service, they had not
declared that petitioners committedan illegal strike on the been paid.From the strictly juridical standpoint where a
basis of the attendant coercive circumstances, which is likewise decision may be made to rest an informed judgment rather
an unfair labor practice. As aconsequence, petitioners lost their than rigidrules, all the equities of the case must be accorded
status as employees of herein respondent. their due weight (DISCRETIONARY JUSTICE). Finally, labor
lawdeterminations, to quote from Bultmann, should be
ISSUE:
not only secundum rationem but also secundum caritatem.This
WON the strike is illegal to cause the termination of BF is all that needs to be said except to remind petitioners that the
Goodrich’s employees. basic doctrine underlying the provisions of theConstitution so
solicitous of labor as well as the applicable statutory norms is
that both the working force andmanagement are necessary
HELD: components of the economy. The rights of labor have been
expanded. Concern isevident for its welfare. The advantages
NO.The SC ruled that there were injuries on both sides because
thus conferred, however, call for attendant responsibilities. The
management did not, understandably, play a passiverole
ways of thelaw are not to be ignored. Those who seek comfort
confronted as it was with the unruly disruptive tactics of labor,
from the Shelter that it affords should be the last to engage
merely to explain what cannot be justified. Allthese, however,
inactivities which negate the very concept of a legal order as
do not mean, that petitioner's strike should necessarily be held
antithetical to force and coercion. What is equallyimportant is
to be illegal.It would imply at the very least that where a
that in the steps to be taken by it in the pursuit of what it
penalty less punitive would suffice, whatever missteps may
believes to be its rights, the advice of thoseconversant with the
becommitted by labor ought not to be visited with a
requirements of legal norms should be sought and should not
consequence so severe. It is not only because of the
be ignored. It is even moreimportant that reason and not
law'sconcern for the workingman. There is, in addition, his
violence should be its milieu.
family to consider. Unemployment brings untold hardshipsand
sorrows on those dependent on the wage-earner. The misery
and pain attendant on the loss of jobs thencould be avoided if
there be acceptance of the view that under all the
circumstances of this case, petitionersshould not be deprived
The Solicitor General, arguing for the NLRC, cited numerous
previous cases where separation pay has been awarded by
DIGEST the Supreme Court even if the employee’s dismissal were
due to just and authorized causes.
Republic of the Philippines
SUPREME COURT
ISSUE: Whether or not Abucay is entitled to separation pay.
Manila HELD: No. In this case, the Supreme Court finally set the
rules as to when separation pay is proper in cases where the
EN BANC employee is dismissed for valid reasons.

G.R. No. 80609 August 23, 1988 As a rule, and under the Labor Code, a person dismissed
for just and authorized causes is not entitled to separation
PHILIPPINE LONG DISTANCE TELEPHONE pay. However, based on equity, an exception can be made
COMPANY, petitioner, if the employee is dismissed for causes other than serious
vs. misconduct or those reflecting on his moral character. Where
THE NATIONAL LABOR RELATIONS COMMISSION and the reason for the valid dismissal is, for example, habitual
MARILYN ABUCAY, respondents. intoxication or an offense involving moral turpitude, like theft
or illicit sexual relations with a fellow worker, the employer
may not be required to give the dismissed employee
separation pay, or financial assistance, or whatever other
FACTS: Marilyn Abucay has been an employee of the
name it is called, on the ground of social justice.
Philippine Long Distance Telephone Company (PLDT) for
ten years when it was discovered that she accepted “bribes” In the case at bar, the reason for Abucay’s dismissal is due
from certain customers in order to facilitate the phone to her acceptance of a “bribe” which is dishonesty and is
connections of said customers. PLDT terminated her immoral. The fact that she has worked with the PLDT for
employment. A labor case was filed by Abucay. The National more than a decade, if it is to be considered at all, should be
Labor Relations Commission (NLRC) found the dismissal to taken against her as it reflects a regrettable lack of loyalty
be valid but nevertheless, the NLRC ordered PLDT to pay that she should have strengthened instead of betraying
Abucay separation pay equivalent to one month pay for every during all of her 10 years of service with the company. The
year of service. court also made a pronouncement:
PLDT assailed the said decision. PLDT averred that
separation pay is only available in cases where the employee
has been illegally dismissed and reinstatement is no longer
possible. PLDT further argued that to award Abucay
separation pay is tantamount to rewarding her misdeeds.
We regret that your services as an
Republic of the Philippines employee of Solidbank are hereby
Supreme Court terminated, effective the close of business
hours on 31 August 2000. Your separation
Manila package will be in accordance with the
implementing guidelines issued to all
THIRD DIVISION officers and staff in President/CEO D.N.
Vistans Memorandum of 14 July 2000. You
Solidbank Corp. vs. NLRCC GR NO. 165951 will receive your separation pay only upon
March 30,2010 release of your clearance, but not later than
the effectivity date of your termination
Result of petitioners decision to cease its operations, from the Bank.
1,867 of its employees would be terminated.
We wish you success in your future
endeavors.[4]
On July 25, 2000, petitioner sent individual letters to
its employees, including respondents, advising them of
its decision to cease operations and informing them that On July 31, 2000, petitioner sent to the Department of
their employment would be terminated. The pertinent Labor and Employment a letter[5] dated July 28, 2000,
portions of said letter are hereunder reproduced, to wit: informing said office of the termination of its
employees, the pertinent portions of which read:
With the cessation of the banking
operations of Solidbank Corporation and In compliance with the provisions of
the surrender of its banking license to the Article 283 of the Labor Code, we would
Bangko Sentral ng Pilipinas (BSP), the like to inform the Department of Labor and
employment of all Solidbankers will have Employment that Solidbank Corporation
to be terminated. will cease operations and surrender its
banking license to the Bangko Sentral ng
Pilipinas effective 31 August 2000.
Case Nos. 30-09-03843-00, 30-1004350-00, 30-10-
Due to the cessation of the Banks 03928-00, 30-10-04200-00, and 30-10-04036-00.
operations, the employment of all officers
and staff of Solidbank will be terminated
effective the close of business hours on 31 On July 22, 2002, the LA rendered a Decision[8] ruling
August 2000. As a result, the Bank will that respondents were validly terminated from
implement a separation program in employment as a result of petitioners decision to cease
accordance with the attached its banking operations. The LA, however, inspired by
guidelines. The separation package compassionate justice, awarded financial assistance of
offered to Solidbankers is more than one months salary to respondents. The dispositive
what is required by law.[6]
portion of the Decision reads:

WHEREFORE, the Complaints for


Petitioner granted to its employees separation pay
illegal dismissal filed by the complainants
equivalent to 150% of gross monthly pay per year of under the above-stated case numbers are
service, and cash equivalent of earned and accrued hereby dismissed for lack of
vacation and sick leaves as a result of their merit. However, inspired by
dismissal. Upon receipt of their separation pay, the compassionate justice, this Office hereby
employees of petitioner, including respondents, orders the respondent Solidbank
Corporation to provide each
individually signed a Release, Waiver, and
complainant a financial assistance of one
Quitclaim.[7] months salary.

On September 27, 2000, respondents filed with the Metrobanks motion to dismiss the
Labor Arbiter (LA) complaints for illegal dismissal, claim against it for want of jurisdiction is
underpayment of separation pay, plus damages and DENIED for lack of merit.
attorneys fees, and these were docketed as NLRC NCR
Complainants motion to admit annexes affirmed with modification as to the award
dated March 12, 2001, together with their of the financial assistance.
motions to amend affidavits/complaints
dated January 22, 2001 are hereby SO ORDERED.[11]
GRANTED for being meritorious.
Solidbanks counterclaim is dismissed for
Aggrieved by the NLRC Decision, petitioner then
lack of merit.
appealed to the CA, specifically questioning the grant
SO ORDERED.[9] of financial assistance to respondents.

On May 28, 2004, the CA rendered a Decision


Both parties appealed the LAs Decision to the National
reversing the Decision of the NLRC. The CA shared
Labor Relations Commission (NLRC).
the view of the LA that respondents should only be
awarded one months salary as financial assistance and
On October 29, 2002, the NLRC rendered a
not two months salary as previously decreed by the
Decision[10] affirming the findings of the LA that
NLRC. The dispositive portion of the Decision reads:
respondents were validly terminated. The NLRC ruled
that the closure of a business is an authorized cause
WHEREFORE, premises
sanctioned under Article 283 of the Labor Code and considered, the assailed Decision
one that is ultimately a management prerogative. The is hereby REVERSED, and the 22 July
NLRC, however, modified the LAs Decision by 2002 Decision of the Labor Arbiter is
increasing the amount of financial assistance to two hereby REINSTATED.
months salary out of compassionate justice. The
dispositive portion of the Decision reads: SO ORDERED.[12]

WHEREFORE, premises
considered, the Decision appealed from is
Petitioner then filed a motion for reconsideration, RESPONDENTS WOULD BE ACCORDED
which was, however, denied by the CA in a Resolution BETTER BENEFITS THAN OTHER
FORMER SOLIDBANK EMPLOYEES WHO
dated October 28, 2004.
WERE SIMILARLY SITUATED.[15]

Hence, herein petition, with petitioner raising the


following assignment of errors, to wit: The petition is meritorious. The errors being
interrelated, this Court shall discuss the same seriatim.
THERE IS NO LEGAL BASIS FOR THE
COURT OF APPEALS AWARD OF Before anything else, this Court shall first address the
FINANCIAL ASSISTANCE EQUIVALENT allegations raised by respondents in their
TO ONE-MONTHS SALARY TO THE Comment,[16] which deal with the issue of the validity
RESPONDENTS AFTER ITS FINDING
of their termination. Respondents, in the main, claim
THAT SOLIDBANK HAS MORE THAN
COMPLIED WITH THE MANDATE OF that their termination was unlawful as petitioner did not
THE LAW ON PAYMENT OF SEPARATION really cease its operations.[17] Thus, notwithstanding
PAY.[13] their admission that the LA, the NLRC, and the CA all
ruled in unison that their termination was in accordance
THE AWARD OF FINANCIAL with law, respondents seek this Courts discretion to
ASSISTANCE CANNOT BE JUSTIFIED ON
reverse such findings.
THE BASIS OF COMPASSIONATE
JUSTICE AND AS A FORM OF EQUITABLE
RELIEF.[14] On this note, it is well settled that this Court is
not a trier of facts. To begin with, the question of
TO SUSTAIN THE COURT OF whether respondents were dismissed for authorized
APPEALS AWARD OF FINANCIAL cause is a question of fact which is beyond the province
ASSISTANCE TO THE 140 VALIDLY- of a petition for review on certiorari. It is fundamental
DISMISSED RESPONDENTS WOULD
RESULT IN A HIGHLY ANOMALOUS that the scope of the Supreme Courts judicial review
SITUATION WHERE THE SAID under Rule 45 of the Rules of Court is confined only to
errors of law. It does not extend to questions of fact; review. On September 20, 2005, an Entry of
more so, in labor cases where the doctrine applies with Judgment[22] was rendered. Based on the foregoing, the
greater force.[18] validity of the termination of respondents is an issue
that this Court must no longer look into as a necessary
The LA and the NLRC have already determined consequence of the denial of their petition for review
the factual issues, and these were affirmed by the CA. before this Court.
Thus, they are accorded not only great respect but also
finality, and are deemed binding upon this Court so Now, going to the issues raised by petitioner, this
long as they are supported by substantial evidence. A Court finds the same to be impressed with merit.
heavy burden rests upon respondents to convince the
Court that it should take exception from such a settled Article 283 of the Labor Code provides:
rule.[19]
ARTICLE 283. Closure of
establishment and reduction of
Moreover, what is damning to the cause of the personnel. - The employer may also
respondents is the fact that the issue of the validity of terminate the employment of any employee
their dismissal is now already final. As correctly due to the installation of labor-saving
manifested by petitioner, respondents had earlier filed devices, redundancy, retrenchment to
with this Court a petition for review[20] dated December prevent losses or the closing or cessation of
28, 2004, docketed as G.R. No. 165985, operation of the establishment or
undertaking unless the closing is for the
entitled Rodolfo Bombita, et al. v. Solidbank
purpose of circumventing the provisions of
Corporation, et al., which questioned the validity of this Title, by serving a written notice on the
their termination. A perusal of said petition shows that workers and the Ministry of Labor and
the issues raised therein are the very same issues Employment at least one (1) month before
respondents now raise in their Comment. On February the intended date thereof. In case of
21, 2005, this Courts Second Division issued a termination due to the installation of labor-
saving devices or redundancy, the worker
Resolution[21] denying respondents petition for
affected thereby shall be entitled to a above the requirements of the law. Despite this,
separation pay equivalent to at least his one however, petitioner has been ordered to pay
(1) month pay or to at least one (1) month
respondents an additional amount, equivalent to one
pay for every year of service, whichever is
higher. In case of retrenchment to months salary, as a form of financial assistance.
prevent losses and in cases of closures or
cessation of operations of establishment The LA awarded the financial assistance out of
or undertaking not due to serious compassionate justice. The CA affirmed such grant
business losses or financial reverses, the also out of compassionate justice and as a form of
separation pay shall be equivalent to one equitable relief for the employees who were suddenly
(1) month pay or at least one-half (1/2)
month pay for every year of service, dismissed due to exigencies of business.[24]
whichever is higher. A fraction of at least
six (6) months shall be considered one (1) After a thorough consideration of the
whole year. [23] circumstances at bar, this Court finds that the award of
financial assistance is bereft of legal basis and serves
to penalize petitioner who has complied with the
Based on Article 283, in case of cessation of requirements of the law.
operations, the employer is only required to pay his
employees a separation pay of one month pay or at least It behooves this Court as to why the CA affirmed
one-half month pay for every year of service, the grant of financial assistance notwithstanding its
whichever is higher. That is all that the law requires. pronouncement that it would be inequitable to allow
respondents to receive benefits than those prescribed
In the case at bar, petitioner paid respondents the by law and jurisprudence, to wit:
following: (a) separation pay computed at 150% of
their gross monthly pay per year of service; and (b) In the instant case, both the Labor
cash equivalent of earned and accrued vacation and Arbiter and the NLRC upheld the validity
sick leaves. Clearly, petitioner had gone over and of the dismissal of the employees and of the
quitclaim agreements between the affected Moreover, a review of jurisprudence relating to the
employees and employer Solidbank. application of compassionate and social justice in
However, it was a strange occurrence when
granting financial assistance in labor cases shows that
the NLRC granted an additional award of
separation pay in an amount equivalent to the same has been generally used in instances when an
two months salary to each employee. This employee has been dismissed for a just cause under
means that Solidbank now has the Article 282 of the Labor Code and not when an
obligation to pay the employees not only employee has been dismissed for an authorized
their wages, benefits and other privileges cause under Article 283.
under the law, and separation pay in an
amount equivalent to 150% of their one
months pay, but also financial assistance As a general rule, an employee who has been
equivalent to two months pay to each dismissed for any of the just causes enumerated under
employee. Such a situation cannot be Article 282[26] of the Labor Code is not entitled to
upheld by this Court. As discussed above, separation pay.[27]Although by way of exception, the
all that the law requires in cases of grant of separation pay or some other financial
dismissal due to an authorized cause is assistance may be allowed to an employee dismissed
that the employer must pay financial
for just causes on the basis of equity.[28]
assistance or separation pay in an
amount equivalent to one months pay or
one-half months for every year of service, The reason that the law does not statutorily grant
whichever is higher. Solidbank has separation pay or financial assistance in instances of
complied with the mandate of the law. termination due to a just cause is precisely because the
Hence, it would be unjust and cause for termination is due to the acts of the employee.
inequitable to allow the employees to
In such instances, however, this Court, inspired by
receive higher benefits than those
prescribed by the Labor Code and compassionate and social justice, has in the past
jurisprudence.[25] awarded financial assistance to dismissed employees
when circumstances warranted such an award.
In Central Philippines Bandag Retreaders, Inc.
v. Diasnes,[29] this Court discussed the parameters of
awarding separation pay to dismissed employees as a Thus, in Philippine Commercial International Bank v.
measure of financial assistance, viz: Abad,[31] this Court, having considered the
circumstances present therein and as a measure of
To reiterate our ruling social justice, awarded separation pay to a dismissed
in Toyota, labor adjudicatory officials and employee for a just cause under Article 282. The same
the CA must demur the award of separation concession was given by this Court in Aparente, Sr. v.
pay based on social justice when an National Labor Relations Commission[32] and Tanala
employees dismissal is based on serious
v. National Labor Relations Commission.[33]
misconduct or willful disobedience; gross
and habitual neglect of duty; fraud or willful
breach of trust; or commission of a crime Looking now at Article 283, this Court holds that the
against the person of the employer or his same was drafted by the legislature, taking the best
immediate family - grounds under Art. interest of laborers in mind. It is clear that the causes of
282 of the Labor Code that sanction the termination of an employee under Article 283 are
dismissals of employees. They must be due to circumstances beyond their control, such as
most judicious and circumspect in awarding
separation pay or financial assistance as the when management decides to reduce personnel based
constitutional policy to provide full on valid grounds, or when the employer decides to
protection to labor is not meant to be an cease operations. Thus, the bias towards labor is very
instrument to oppress the employers. The apparent, as the employer is statutorily required to pay
commitment of the Court to the cause of separation pay, the amount of which is also statutorily
labor should not embarrass us from prescribed.
sustaining the employers when they are
right, as here. In fine, we should be more
cautious in awarding financial assistance to While the CA should not be faulted for
the undeserving and those who are sympathizing with the plight of respondents as they
unworthy of the liberality of the law.[30] suddenly lost their means of livelihood, this Court
holds that it is precisely because of the sudden loss of the policy of social justice and the protection of the
employment − one that is beyond the control of working class, it should not be supposed that every
labor − that the law statutorily grants separation pay labor dispute will be automatically decided in favor of
and dictates how the same should be computed. Thus, labor. The management also has its own rights, as such,
any business establishment that decides to cease its are entitled to respect and enforcement in the interest
operations has the burden of complying with the of simple fair play. Out of its concern for those
law. This Court should refrain from adding more than with less privileges in life, the Supreme Court has
what the law requires, as the same is within the realm inclined more often than not toward the worker and
of the legislature. upheld his cause in his conflicts with the employer.
Such favoritism, however, has not blinded the Court to
It bears to stress, however, that petitioner may, the rule that justice is in every case for the deserving,
as it has done, grant on a voluntary and ex gratia to be dispensed in the light of the established facts and
basis, any amount more than what is required by the applicable law and doctrine.[34]
law, but to insist that more financial assistance be given
is certainly something that this Court cannot WHEREFORE, premises considered, the petition
countenance, as the same serves to penalize petitioner, is GRANTED. The May 28, 2004 Decision and
which has already given more than what the law October 28, 2004 Resolution of the Court of Appeals,
requires. Moreover, any award of additional financial in CA-G.R SP No. 76879, are REVERSED and SET
assistance to respondents would put them at an ASIDE.
advantage and in a better position than the rest of their
co-employees who similarly lost their employment SO ORDERED.
because of petitioners decision to cease its operations.

DIOSDADO M.
Withal, the law, in protecting the rights of the laborers,
PERALTA
authorizes neither oppression nor self-destruction of Associate Justice
the employer. While the Constitution is committed to
DIGEST: respondents, individually signed a "Release, Waiver,
Solidbank Corporation vs. NLRC, Rodolfo N. Bombita, et al. GR and Quitclaim.”
No. 165951; March 30, 2010
After their termination, Rs filed complaint for illegal dismissal
and underpayment of separation pay, among others, before
LA.LA: ruled that Rs were validly terminated from employment
FACTS:
as a result of bank's decision to cease its banking operations.
In May 2000, P Solidbank decided to cease its
The labor arbiter,however, inspired by compassionate justice,
commercial banking operations, which would cause the
awarded financial assistance of one month's salary to
termination of 1,867 of its employees,among which are
respondents. NLRC: affirmed LA’s ruling but increased the
Rs.Pursuant to Art 283 of LC, After sending letters to its
amount of financial assistance to two month’s salary.
employees of their termination to take effect at the close of
CA: reversed NLRCs judgment, and reinstated LA’s decision.
business hrs on Aug31, 2000, the bank sent on July 31, 2000, a
Solidbank filed petition with the SC.
letter dated July 28, 2000 to DOLE, informing it about the
termination of its employees because of the closure of the
ISSUE:
bank. It informed DOLE that the bank would be giving its
WON there is any legal basis for the award of financial
terminated employees a separation pay equivalent to 150% of
assistance to the respondents on the ground of compassionate
grossmonthly pay per year of service, and cash equivalent of
justice. --NONE
earned and accrued vacation and sick leaves as a result of their
dismissal.P Bank emphasized that the separation package
RULING:
offered to Solidbankers is more than what is required by law.
NO.The award of financial assistance is not required by law. All
that Art 283 of the Labor Code requires in cases of dismissal due
Art 283 of Labor Code requires that “in case of retrenchment to
to an authorizedcause is that the employer must pay financial
prevent losses and in cases of closures or cessation of
assistance or separation pay in an amount equivalent to "one
operations of establishment or undertaking not dueto serious
month's pay or one-half month's payfor every year of service,
business losses or financial reverses, the separation pay shall be
whichever is higher."In this case, Solidbank has complied with
equivalent to one (1) month pay or at least one-half (1/2)
the mandate of the law
month pay for every year of service, whichever is higher. A
. Hence, it would be unjust and inequitable to allow the
fraction of at least six (6) months shall be considered one (1)
employeesto receive higher benefits than those prescribed by
whole year.”
The employees were paid the separation package. Upon receipt the Labor Code and jurisprudence.In the case at bar, P paid R
the following:(a) separation pay computed at 150% of their
of their separation pay, the employees of petitioner, including
gross monthly pay per year of service; and(b) cash equivalent the employer decides to cease operations. Thus, the bias
of earned and accrued vacation and sick leaves.Clearly, towards laboris very apparent, as the employer is statutorily
petitioner had gone over and above the requirements of the required to pay separation pay, the amount of which is also
law. Despite this, however, petitioner has been ordered to statutorily prescribed.Withal, the law, in protecting the rights
payrespondents an additional amount, equivalent to one of the laborers, authorizes neither oppression nor self-
month's salary, as a form of financial assistance. The LA destruction of the employer. While theConstitution is
awarded the financial assistance outof "compassionate committed to the policy of social justice and the protection of
justice." The CA affirmed such grant also out of "compassionate the working class, it should not be supposed that every labor
justice" and as a form of "equitable relief" for the disputewill be automatically decided in favor of labor. The
employeeswho were suddenly dismissed due to exigencies management also has its own rights, as such, are entitled to
of business. After a thorough consideration of the respect and enforcement in theinterest of simple fair play. Out
circumstances at bar, this Court finds that theaward of of its concern for those with less privileges in life, the Supreme
financial assistance is bereft of legal basis and serves to Court has inclined more often than not toward theworker and
penalize petitioner who has complied with the requirements upheld his cause in his conflicts with the employer. Such
of the law. favoritism, however, has not blinded the Court to the rule that
justice is inevery case for the deserving, to be dispensed in the
Moreover, a review of jurisprudence relating to the application light of the established facts and applicable law and
of "compassionate and social justice" in granting financial doctrineThe P may grant on a voluntary and ex gratia basis, any
assistance inlabor cases shows that the same has been amount more than what is required by the law, but to insist that
generally used in instances when an employee has been more financialassistance be given is certainly something that
dismissed for a just cause under Article 282 ofthe Labor Code this Court cannot countenance, as the same serves to penalize
(when circumstances warranted such an award) and not when petitioner, which has already givenmore than what the law
an employee has been dismissed for an authorized cause requires.
underArticle 283.As a general rule, an employee dismissed for
just cause (Art. 282) is not granted separation pay.o Precisely
because dismissal by just cause is due to acts of the employee.o
In these instances, the Court, inspired by compassionate and
social justice, may award financial assistance.The causes of the
termination of an employee under Article 283 are due to
circumstances beyond their control, such as whenmanagement
decides to reduce personnel based on valid grounds, or when
DIGEST: RULING: YES The Court agreed with the lower court’s decision, to wit:
Lower court resorted to apply R.A. 875 and US Laws and
SAMPAGUITA PICTURES, INC. vs. PHILIPPINE MUSICIANS Guild jurisprudence from whichs aid Act was patterned after. (Since
(FFW) & COURT OFINDUSTRIALRELATIONS statutes are to be construed in the light of purposes achieved and the
FACTS: evils sought to be remedied). It ruled that the work of the musical
director and musicians is a functional and integral part of the
Respondent Philippine Musicians Guild (FFW) is a duly registered enterprise performed at the same studio substantially under the
legitimate labor organization. LVN Pictures, Inc., Sampaguita direction and control of the company. In other words, to determine
Pictures, Inc., and Premiere Productions, Inc. are corporations, duly whether a person who performs work for another is the latter's
organized under the Philippine laws, engaged in the making of employee or an independent contractor, the National Labor
motion pictures and in the processing and distribution thereof. Relations relies on 'the right to control' test . Under this test
Petitioner companies employ musicians for the purpose of making an employer-employee relationship exist where the person
music recordings for title music, background music, musical numbers, for whom the services are performed reserves the right to control
finale music and other incidental music, without which a not only the end to be achieved, but also the manner and means to
motion picture is incomplete. Ninety-five(95%) percent of all the be used in reaching the end. (United Insurance Company, 108, NLRB
musicians playing for the musical recordings of said companies are No. 115.). Notwithstanding that the employees are called
members of the Guild. The Guild has no knowledge of the existence independent contractors', the Board will hold them to be employees
of any other legitimate labor organization representing musicians under the Act where the extent of the employer's control over them
in said companies. Premised upon these allegations, the Guild indicates that the relationship is in reality one of employment.(John
prayed that it be certified as the sole and exclusive bargaining agency Hancock Insurance Co., 2375-D, 1940, Teller, Labor Dispute Collective
for all musicians working in the aforementioned companies. In their Bargaining, Vol.). The right of control of the film company over the
respective answers, the latter denied that they have any musicians as musicians is shown (1) by calling the musicians through 'call slips' in
employees, and alleged that the musical numbers in the filing of the 'the name of the company; (2) by arranging schedules in its studio for
companies are furnished by independent contractors. The lower recording sessions; (3) by furnishing transportation and meals to
court sustained the Guild’s theory. Are consideration of the order musicians; and(4) by supervising and directing in detail, through the
complained of having been denied by the Court enbanc, LVN motion picture director, the performance of the musicians before the
Pictures, inc., and Sampaguita Pictures, Inc., filed these petitions for camera, in order to suit the music they are playing to the picture
review for certiorari. which is being flashed on the screen. The “musical directors” have no
ISSUE :Whether the musicians in question(Guild members) are such control over the musicians involved in the present case. Said
“employees “of the petitioner film companies. musical directors control neither the music to be played, nor the
musicians playing it. The Premier Production did not appeal the
decision of the Court en banc (that’s why it’s not one of the
petitioners in the case) film companies summon the musicians
to work, through the musical directors. The film companies, through
the musical directors, fix the date, the time and the place of work.
The film companies, not the musical directors, provide
the transportation to and from the studio. The film companies
furnish meal at dinner time. It is well settled that "an employer-
employee relationship exists . . .where the person for whom the
services are performed reserves a right to control not only the end to
be achieved but also the means to be used in reaching such end . . .
." The decisive nature of said control over the "means to be used", is
illustrated in the case of Gilchrist Timber Co., et al., in which, by
reason of said control, the employer-employee relationship was held
to exist between the management and the workers, notwithstanding
the intervention of an alleged independent contractor, who had, and
exercise, the power to hire and fire said workers. The
aforementioned control over the means to be used" in reading the
desired end is possessed and exercised by the film companies over
the musicians in the cases before us. WHEREFORE, the order
appealed from is hereby affirmed, with costs against petitioners
herein. It is so ordered