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Republic of the Philippines

SUPREME COURT
ManilaEN BANC
G.R. No. L-46892 June 28, 1940

ANTAMOK GOLDFIELDS MINING COMPANY,


recurrente,vs.
COURT OF INDUSTRIAL RELATIONS, and NATIONAL LABOR UNION,
INC.,
recurridos.
Sres. DeWitt, Perkins y Ponce Enrile en representacionde la recurrente.Sres.
Paguia y Lerum en represetacion de la recurrida, National Labor Union.

IMPERIAL,
J .:
AMICABLE SETTLEMENT
In order to have the present strike of the contractors and laborers of the
respondent company who staged a walkout on January 3, 1939, amicably
settled, the parties hereby mutually agree to end the said strike under the
condition that all laborers will be readmitted upon the execution of this
agreement; provided, that all laborers whose services should be dispensed
with due to lack of work in those tunnels where they are no longer needed
will be given not less than fifteen days employment from the date of this
settlement or resumption of work, and provided, further, that as soon as the
stopes in 1360 and 1460 levels are opened and the services of men are
needed, the company will give preference to efficient laborers when reducing
the personnel as above mentioned in those working places and may transfer
them to other division to replace inefficient men.
In witness hereof, the laborers represented by a committee composed of
Messrs. Luis Lardizabal, Tomas Dirige, Victoriano Madayag, Maximo
Conaoi, Daniel Lambinicio, and Juan Cerilo and the Antamok
Goldfields Mining Co. as represented by its President, Mr. Andres
Soriano, have hereunto placed their signatures this 4th day of January,
1939.1. The discharges and indefinite suspensions alleged in the motion
were made by the respondent without first securing the consent of the
Court in violation of the order of this Court of January 23,1939.2. The
discharges and indefinite suspensions were made by the respondent
without just cause. In the order of January 23, 1939, the respondent was
enjoined to refrain from discharging any laborer involved in the dispute
without just cause and without previous authority of the Court.
It appears and no denial of the fact is made by the respondent that the
dismissal is one case and alleged suspension for an indefinite time in the
other, which has all the effects of a discharge, were made without seeking
the authority of the Court.
The charge that Haber and the group of nine laborers were indefinitely
suspended of continuous loafing and refusal to work was not established.
The real motive behind the lay was the completion of their work "outside."
Under the circumstances,
the provision of the order of March 21, to the effect hat these men should be
returned to their work underground after the completion of their work"
outside" should have been observed. The respondent instead of complying
with the order laid off the men.
The discharge of Victoriano Madayag and his forty-four companions as a
result of the Moldero incident also lacks justification. In the case of
Madayag, although he was present with Haber when Moldero was attacked,
neither one is accused of the aggression. The two of them were conversing
with Moldero with the latter was stoned from behind without anybody
apparently being able to point out the aggressor. Less justification can be
found for the discharge of the forty-four men as a result of the incident. The
investigation disclosed that at the time of the assault, they were at the Creek
busy with their work. Both the distance and the topographical situation of
the place where the men were working, which is far and well below the bank
of the place of the incident, precluded their hearing of seeing clearly what
transpired above them in the place where Moldero was assaulted. An ocular
inspection of the premises made by the investigator confirmed this view.
So far as is known, despite the investigations conducted by the officials of
the company and the policeman of the camp and by the constabulary
authorities in Baguio, the person or persons responsible for the stoning has
not been determined.
The precipitate and unwarranted dismissal of the forty-five men after the
incident seems to have been spurred by an over anxious desire on the part
of the company to get ridof these men.
As previously found, in the order of this Court of March 21, 1939,
about 134 underground laborers of the respondent were transferred
and made to work 'outside of the mines' or surface work. The majority of
these men were muckers, miners, timbermen, trammers, and mine helpers
and had to their favor from 6 months to 5 years service in the mines of the
company and not a few of them have done underground work in several
capacities and in different tunnels and divisions of the mine. Among them
are found leaders of the movement of the laborers for higher
pay and better working conditions which culminated in the strike called
on January 3, 1939. These leaders have been prominent in the formation of
the union its activities and in connection with the strike. The temporary
transfer of these men to "outside" work was authorized by the Court in said
order on the strength of the assurance of the respondent that no more work
suited for them inside the mines existed. It was directed, however, in the
aforesaid order that as soon as their outside was completed the laborers
should be immediately returned to their respective work inside the mines.
Subsequent events and acts of the officials of the respondent in charge of
the mines have convinced the Court work existed and exists for the men
inside the tunnels and their transfers were made to provide an opportunity
to the company to dispense with their services as soon as the work is
completed. The unwarranted discharges of Haber and nine others and
those of Victoriano Madayag and his forty-four companions amply
demonstrated this conclusion. Upon the company's own admission, as
shown in its reports in the records and upon the findings of the investigator
of the Court, more than four hundred (400)workers of different classes
among them, muckers, miners, timbermen, trammers and capataces
coming from different mines in the region have been employed by the
respondent as fresh laborers. Almost all, if not all, of these men are not
members of the petitioner, the National Laborer Union, Inc. At the
same time the work in different tunnels and division in the mines
are allegedly being completed, the old workers are being laid off. Although
a small number of the men found transfer to other divisions being operated,
the majority are being left without work. Instead of laying hands on the old
men laid off and making them work in the tunnels needing hands and
reinstating in the tunnel work those laborers transferred to the 'outside'
department, the respondent preferred to take in and hire other workers
coming from different places because evidently they are not members of
theunion. There is no doubt in the mind of the Court that a good number of
the position given of the men who were employed after the strike numbering
more than four hundred to date could have been offered to the strikes who
are now doing work "outside" and other who have been laid off on the
allegation that the underground work in which they were engaged had been
completed. To believe that not a single man or say a few among the latter
could have met the requirements set by the technical men of the company
to perform the different classes of work for which the fresh men were
engaged because they lack the required efficiency, experience,
physique. intelligence and skill of the four hundred fresh laborers
would be shutting the eyes of the court to realities. These men prior to the
occurence of the dispute, had worked for months and many for years in the
mines of the respondent and it can not be easily accepted that their
experience gained in their particular lines in the very property of the
respondent would be inferior to that attained by the other workmen in other
mines inthe district for an equal period of time. Their inefficiency as a whole
group can not be successfully sustained now because they were not
transferred to surface work for this reason but because of the alleged lack of
work or completion of their work underground. Had any of them been
inefficient in the past, it can not be explained why the company laborer
continued in the service as the records of the company abound with
instance of discharges made in the past of laborers who were found either
inefficient or incompetent or whose services were unsatisfactory. The
company asserts ignorance of the union affiliations of the men in the mine
but the evidence stands uncontradicted that before the strike was called a
petition was presented by the men to the management carrying the
signatures of about eight hundred (800) worker demanding higher pay and
better working conditions. When the men struck, the operation of the mine
was completely paralyzed and there is a strong indication that a great
majority of the workers joined openly the strike. It would not have been
difficult for the respondent, with the means at its command, to find for itself
the employees and laborers who remained loyal to the company and to
consider those who struck as either members of the union or its
sympathizer. The respondent's claim as to the motive for the suspension
and discharges lacks substance and support in the evidence and the
inferences to be drawn from it. From all what appears, it is inferred that the
respondent desire to discourage membership in the union and to rout it if
possible. The wholesale discharges were the expression of such desire. The
acts in the mind of the Court, are calculated to have two effects. They will
not only immediately affect the discharged laborers but would also
discourage other laborers from joining or remaining members of the union.
he allegation that it has always been policy to consider the laborer's
connection with the company terminated upon termination of the working
place in which he is employed is not supported by the facts. It has been
shown that as a general rule when work in a place is completed, workers
are transferred to another working place in one level or to another level,
although in some instances days may elapse before all the men in a bunch
can be absorbed in different levels. It is alleged that mining operations in the
property vary and involve several types, and that a miner, for example, may
be good in one type, but that it does not necessarily follow that he can do
good work in another type. And that the employment of men in particular
jobs not suitable for them increased the cost of production as a result of
lower output. Consequently, the respondent vehemently insists in its right of
selecting the men that it should employ and that in the exercise of this right it
should not be restrained or interfered with by the Court. It contends that as
to fitness of a laborer to do a particular type of work the opinion of the
management or its technical men should be respected. But all these
arguments are meaningless in the face of the finding of the Court that the
underground laborers transferred to the 'outside' work are not wanting in
experience, efficiency and other conditions alleged to be found among the
fresh laborers. The special qualifications to do particular work can not rightly
be invoked in favor of the employment of new laborers most specially in those
cases of common or unskilled labor like muckers, trammers, helpers,
etc. Under normal circumstances, the exercise of judgment of the employer
in selecting men he is to employ should not be interfered with. But when
such judgment is arbitrarily exercised to the prejudice of members of a labor
union whose rights should be safeguarded in consonance with the policies
of the law, the Court not only feels it justified but rightly its duty
to interfere to afford protection to the laborers affected. It should be
observed at the outset that our Constitution was adopted in the midst of
surging unrest and dissatisfaction resulting from economic and social
distress which was threatening the stability of governments the world over.
Alive to the social and economic forces at work, the framers of our
Constitution boldly met the problems and difficulties which faced them and
endeavored to crystallize, with more or less fidelity, the political, social; and
economic proposition of their age, and this they did, with the consciousness
that the political and philosophical aphorism of their generation will, in the
language of a great jurist, "be doubted by the next and perhaps entirely
discarded by the third."(Chief Justice Winslow in Gorgnis v. Falk Co., 147
Wis., 327; 133 N. W., 209.) Embodying the spirit of the present epoch,
general provisions were inserted in the Constitution which are intended to
bring about the needed social and economic equilibrium between component
elements of society through the application of what may be termed as the
justitia communis advocated by Grotius and Leibnits many years ago to be
secured through the counterbalancing of economic and social forces and
opportunities which should be regulated, if not controlled, by the State or
placed, as it were, in custodia societatis . "The promotion of social justice to
insure the well-being and economic security of all the people' was thus
inserted as vital principle in our Constitution. (Sec. 5, Art. II,
Constitution.) And in order that this declaration of principle may
not just be an empty medley of words, the Constitution in various
sections thereof has provided the means towards its realization. For instance,
section 6 of Articles XIII declares that the State "shall afford protection to
labor, especially to workingwomen and minors, and shall regulated the
relations between landowner and tenant, and between labor and capital in
industry and in agriculture." The same section also states that "the State
may provide for compulsory arbitration." In extraordinary cases
mentioned in section 16, Articles VI, of the Constitution, the President
of the Philippines may be authorized by law, for a limited period and subject
to such restrictions as the National Assembly may prescribed, to "promulgate
rules and regulations to carry out a declared national policy."

Albeit, almost at the same time the Congress of the United States
approved the National Labor Regulations Act (49 Stat., 449) on July 5,
1935, commonly known as the Wagner Act, we were in the Philippines
headway towards the adoption of our fundamental law, pursuant to
congressional authority given in the Tydings-McDuffie Independence Act,
approved March 24, 1934. In our Bill of Rights we now find the following
provision "The right to form associations or societies for purposes not
contrary to law shall not be abridged." (Par. 6, section 1, art. III, Constitution.)
What was an agitation in the United States which brought about the
recommendation by the Commission on Industrial Relations created by an
Act of Congress in 1912 for the adoption of a Labor Bill of Rights as an
amendment to the United States Constitution is, in our case, virtually an
accepted principle, which may be expanded and vitalized by legislation to
keep pace with the development of time and circumstances. By and large,
these provisions in our Constitution all evince and express the need of
shifting emphasis to community interest with a view to affirmative
enhancement of human values. Inconformity with the constitutional
objective and cognizant of the historical fact that industrial and agricultural
disputes had given rise to disquietude, bloodshed and revolution in our
country, the National Assembly enacted Commonwealth Act No. 103, entitled
"An Act to afford protection of labor by creating a Court of Industrial Relations
empowered to fix minimum wages for laborers and maximum rental to be
paid tenants, and to enforce compulsory arbitration between employers or
landlords, and employees or tenants, respectively; and by prescribing
penalties for the violation of the orders" and, later, Commonwealth Act. No.
213, entitled, "An Act to define and regulate legitimate
labor organizations."(Asto this last act, vide "finding and policy,"
preamble [sec. 1]of the Wagner Act [49 Sta., 449]).
Commonwealth Act No. 103, approved October 29, 1936, was originally Bill
No. 700 of the National Assembly. More light is shed by the
explanatory statement of the Bill than by what transpired in the
course of the deliberation of the measure in the legislative chamber. "El
presente proyecto de ley,"thus the explanatory statement of Bill No. 700, 'crea
una Junta de Relaciones Industriales . . . yprovee el arbitraje obligatorio. . . de
acuerdo con el Articulo 6, Titulo XIII de la Constitucion, elprovee que "El
Estado podrs establacerel arbitraje obligatorio." "Incorporating the
conclusionreached by a committee appointed, a year or so before it was
observed that 'bajo la legislacionactual' " — evidently referring to Act No.
4055 — "no existe instrumento adecuado para evitar lashuelgas. El
Departamentode Trabajo desempeña maramente el papel de pacificadorentre
las partesen controversia y sus decisiones no sonobligatorias ni para los
patronos ni para los obreros. Elpueblo la allegado a un grado de desarrollo
industrial, quehace imperiosa el que la intervencion delgobierno en
estosconflictos sea mas efectiva . . . ." The creation of a Court of Industrial
Relationswas thus proposed, endowed "no solamente del poder de arbitrar
sino tambien del deberdeinvestigar, decidir, y hacer recomendaciones sobre
las cuestiones en conflicto y los problem as queafectan al Capitaly al Trabajo
en la Industria y la Agricultuta bajola direccion del Presidente de
laMancomunidad de Filipinaso a peticion del Secretario del
Trabajo.x x x x x x x x xFrom what has been stated, it appears that the
legislation which are now called upon to construe was enacted in pursuance
of what appears to be deliberate embodiment of a new social policy, founded
on the conception of a society integrated not by independent individuals
dealing at arms 'length, but by interdependent members of a consolidated
whole whose interests must be protected against mutual aggression and
warfare among and between divers and diverse units which are impelled by
counter vailing and opposite individual and group interests, and this is
particularly true in the relationship between labor and capital. Social and
industrial disturbances which fifty years ago were feudal-like and of isolated
importance may now well result in a serious strain upon the entire economic
organism of the nation. In the United States labor legislation has undergone
a longprocess of development too long to nature here, culminating in the
enactments of what were commonly known as the Clayton Act, the Norris-La
Guardia Act, and finally, the Wagner Act and the Fair Labor Standards Act of
1938.The Wagner Act created the National Labor Relations Board as an
instrumentality of the Federal Government in the settlement of labor
disputes, which device is aimed at the avoidance of unnecessary friction
between labor and capital and the establishment of industrial peace.
Scrutiny of legislation in that country and of pronouncement made by its
Supreme Court reveals a continuous renovation and change made necessary
by the impact of changing needs and economic pressure brought about by
the irresistible momentum of new social and economic forces developed
there. In the light of changes that have occured, it is doubted if the
pronouncement made by the said Supreme Court in 1905 (Lochner v. New
York, 198, U.S., 45) or in 1908 (Adair v. U.S., 52 Law. ed.430, 208 U.S., 161,
and Coppage v. Kansas, 236 U.S., 1) — cases which are relied upon by the
petitioner in its printed memorandum— still retain their virtuality at the
present time. In the Philippines, social legislation has had a similar
development although of course to a much smaller degree and of different
adaptation giving rise to several attempts at meeting and solving our peculiar
social and economic problems. (See Commonwealth to the National
Assembly, September 2,1936;Executive Order No. 49, S. 1936).The system of
voluntary arbitration devised by Act No. 4055 of the defunct Philippine
Legislature has apparently been abandoned by the enactment of the
aforementioned Commonwealth Acts Nos. 103and 213. In the midst of
changes that have taken place, it may likewise be doubted if the
pronouncement made by this court in the case of People vs. Pomar (46 Phil.,
440)— also relied upon by the petitioner in its printed memorandum
— still retains its virtually as a living principle. The policy of laissez
faire has to some extent given way the assumption by the government of the
right of intervention even in contractual relations affected with public
interests. x x x x x x x x xIn Commonwealth Act No. 103, and it, our
Government no longer performs the role of a mere mediator or intervenor but
that of the supreme arbiter. Hearing was held on April 3, 1939, where
witnesses for both the petitioners and the respondent testified. To
supplement the facts brought out at the hearing, the Court ordered one of its
Special Agents to proceed to the premises of the mines to conduct a
further investigation.
University of the Immaculate Conception vs Sec of Labor
OCTOBER 23, 2012 ~ VBDIAZ
University of the Immaculate Conception vs Sec of Labor
GR 151379
Facts:
This case stemmed from the collective bargaining negotiations
between petitioner University of Immaculate Concepcion, Inc.
(UNIVERSITY) and respondent The UIC Teaching and
Non- Teaching Personnel and Employees Union (UNION). The
UNION, as the certified bargaining
agent of all rank and file employees of the UNIVERSITY, submitted
its collective bargaining proposals to the latter on February 16,
1994. However, one item was left unresolved and this was the
inclusion or exclusion of some positions in the scope of the
bargaining unit.
The UNION it filed a notice of strike on the grounds of bargaining
deadlock and ULP. During the thirty (30) day cooling-off period, two
union members were dismissed by petitioner. Consequently, the
UNION went on strike.
On January 23, 1995, the then Secretary of Labor, Ma. Nieves R.
Confessor, issued an Order assuming jurisdiction over the labor
dispute.
On March 10, 1995, the UNION filed another notice of strike, this
time citing as a reason the UNIVERSITY’s termination of the
individual respondents. The UNION alleged that the UNIVERSITY’s
act of terminating the individual respondents is in violation of the
Order of the Secretary of Labor.
On March 28, 1995, the Secretary of Labor issued another Order
reiterating the directives contained in the January 23, 1995 Order.
Hence, the UNIVERSITY was directed to reinstate the individual
respondents under the same terms and conditions prevailing prior
to the labor dispute.
The UNIVERSITY filed a MR. In the Order dated August 18, 1995,
then Acting Secretary Jose S. Brilliantes denied the MR, but
modified the two previous Orders by adding:
Anent the Union’s Motion, we find that superseding circumstances
would not warrant the physical reinstatement of the twelve (12)
terminated employees.
Hence, they are hereby ordered placed under payroll reinstatement
until the validity of their termination is finally resolved.
Issue: WON payroll reinstatement, instead of actual reinstatement,
is proper.
Held:
With respect to the Secretary’s Order allowing payroll reinstatement
instead of actual reinstatement for the individual respondents
herein, an amendment to the previous Orders issued by her office,
the same is usually not allowed. Article 263(g) of the Labor
Code aforementioned states that all workers must immediately
return to work and all employers
must readmit all of them under the same terms and conditions
prevailing before the strike or lockout. The phrase “under the same
terms and conditions” makes it clear that the norm is
actual reinstatement. This is consistent with the idea that any work
stoppage or slowdown in that
particular industry can be detrimental to the national interest.
In ordering payroll reinstatement in lieu of actual reinstatement,
then Acting Secretary of Labor Jose S. Brillantes said:
Anent the Union’s Motion, we find that superseding circumstances
would not warrant the physical reinstatement of the twelve (12)
terminated employees. Hence, they are hereby ordered placed under
payroll reinstatement until the validity of their termination is finally
resolved.
As an exception to the rule, payroll reinstatement must rest on
special circumstances that render actual reinstatement
impracticable or otherwise not conducive to attaining the purposes
of the law.
The “superseding circumstances” mentioned by the Acting
Secretary of Labor no doubt refer to the final decision of the panel of
arbitrators as to the confidential nature of the positions of the
twelve private respondents, thereby rendering their actual and
physical reinstatement impracticable and more likely to exacerbate
the situation. The payroll reinstatement in lieu of actual
reinstatement ordered in these cases, therefore, appears justified as
an exception to the rule until the validity of their termination is
finally resolved. This Court sees no grave abuse of discretion on the
part of the Acting Secretary of Labor in ordering the same.
Furthermore, the issue has not been raised by any party in this
case.
Petition denied.
Petitioner

Manila Diamond Hotel Employees’ Union


Respondent

The Hon. Court of Appeals, The Secretary of Labor and


Employment, and The Manila Diamond Hotel
Ponente

Justice Azcuna, First Division


Docket Number and Date of Decision

G.R. No. 140518, December 16, 2004


Significance of the Case

In this case, the Supreme Court explained the legislative


intendment or purpose behind Article 236 (g) of the Labor Code,
and reiterated the rule that payroll reinstatement in lieu of actual
reinstatement is not sanctioned under the provision of the said
article.
Facts

On November 11, 1996, the Union filed a petition for a certification


election so that it may be declared the exclusive bargaining
representative of the Hotel’s employees for the purpose of collective
bargaining. The petition was dismissed by the Department of Labor
and Employment (DOLE) on January 15, 1997.
After a few months, despite the dismissal of their petition, the
Union sent a letter to the Hotel informing the latter of its desire to
negotiate for a collective bargaining agreement. The Hotel, however,
refused to negotiate with the Union, citing the earlier dismissal of
the Union’s petition for certification by DOLE.
Failing to settle the issue, the Union staged a strike against the
Hotel. Numerous confrontations followed, further straining the
relationship between the Union and the Hotel. The Hotel claims that
the strike was illegal and dismissed some employees for their
participation in the allegedly illegal concerted activity. The Union,
on the other hand, accused the Hotel of illegally dismissing the
workers.
A Petition for Assumption of Jurisdiction under Article 263(g) of the
Labor Code was later filed by the Union before the Secretary of
Labor. Thereafter, Secretary of Labor Trajano issued an Order
directing the striking officers and members of the Union to return to
work within twenty-four (24) hours and the Hotel to accept them
back under the same terms and conditions prevailing prior to the
strike.
After receiving the above order the members of the Union reported
for work, but the Hotel refused to accept them and instead filed a
Motion for Reconsideration of the Secretary’s Order.
Acting on the motion for reconsideration, then Acting Secretary of
Labor Español modified the one earlier issued by Secretary Trajano
and instead directed that the strikers be reinstated only in the
payroll.
This is where the controversy arose. The union alleged that the
Secretary of Labor committed grave abuse of discretion for
modifying its earlier order and requiring instead the reinstatement
of the employees in the payroll.
The Court of Appeals dismissed the Union’s petition and affirmed
the Secretary of Labor’s Order for payroll reinstatement. It held that
the challenged order is merely an error of judgment and not a grave
abuse of discretion and that payroll reinstatement is not prohibited
by law, but may be “called for” under certain circumstances. The
CA cited University of Santo Tomas vs. NLRC as basis for its ruling.
Ruling

The Supreme Court reversed the decision of the CA, and ruled that
the Secretary of Labor committed grave abused of discretion in
ordering payroll reinstatement in lieu of actual reinstatement. The
Court noted the difference between UST case and the instant case.
In UST case the teachers could not be given back their academic
assignments since the order of the Secretary for them to return to
work was given in the middle of the first semester of the academic
year. The NLRC was, therefore, faced with a situation where the
striking teachers were entitled to a return to work order, but the
university could not immediately reinstate them since it would be
impracticable and detrimental to the students to change teachers at
that point in time.
In the present case, there is no similar compelling reason that
called for payroll reinstatement as an alternative remedy. A strained
relationship between the striking employees and management is no
reason for payroll reinstatement in lieu of actual reinstatement.
Under Article 263(g), all workers must immediately return to work
and all employers must readmit all of them under the same terms
and conditions prevailing before the strike or lockout. The Court
pointed out that the law uses the precise phrase of “under the same
terms and conditions,” revealing that it contemplates only actual
reinstatement. This is in keeping with the rationale that any work
stoppage or slowdown in that particular industry can be inimical to
the national economy.
The Court reiterates that Article 263(g) was not written to protect
labor from the excesses of management, nor was it written to ease
management from expenses, which it normally incurs during a
work stoppage or slowdown. This law was written as a means to be
used by the State to protect itself from an emergency or crisis. It is
not for labor, nor is it for management.
No. L49046. January 26, 1988. *

SATURNO A. VICTORIA, petitioner, vs. HON. AMADO G.


INCIONG, DEPUTY MINISTER, and FAR EAST
BROADCASTING COMPANY, INC., respondents.

Labor Laws; Dismissal.—The purpose in requiring a prior


clearance from the Secretary of Labor in cases of shutdown or dismi
ssal
of employees is to afford the Secretary ample opportunity to examin
e
and determine the reasonableness of the request.

Same; Same; In case of petitioner’s dismissal, a report is required


as provided under Section 11[f] of Rule XIV of the Rules and
Regulations implementing the Labor Code.—We further agree with t
he
Acting Secretary of Labor that what was required in the case of
petitioner’s dismissal was only a report as provided under Section 1
1[f]
of Rule XIV of the Rules and Regulations implementing the Labor C
ode
which provides: “Every employer shall submit a report to the Region
al
Office in accordance with the form presented by the Department on
the
following instances of termination of employment, suspension, lay-
off or
shutdown which may be effected by the employer without prior
clearance within five (5) days thereafter: x x x x x x x x x

Same; Same; Jurisdiction.—Employees and laborers in nonprofit


organizations are not covered by the provisions of the Industrial Pea
ce
Act and Court of Industrial Relations (now RTC) has no jurisdiction
to
entertain petitioners of labor organizations of said nonprofit
organizations for certification as the exclusive bargaining
representatives of said employees and laborers.
PETITION for review from the order of the Department of
Labor and Employment.

The facts are stated in the opinion of the Court.


FERNAN, J.:

Petition for review of the Order of the then Acting Secretary of


Labor Amado G. Inciong dated June 6, 1978, in NLRC Case
No. RB176475, reversing the decision of the National Labor
Relations Commission dated November 17, 1976 and holding
that, under the law and facts of the case, there was no
necessity for private respondent to obtain a clearance for the
termination of petitioner’s employment under Article 257[b] of
the Labor Code, as amended, and that a mere report of such
termination was sufficient, under Section 11[f]. Rule XIV of the
Rules and Regulations implementing said Code.

Petitioner Saturno Victoria was employed on March 17,


1956 by private respondent Far East Broadcasting Company,
Incorporated as a radio transmitter operator. Sometime in
July 1971, he and his coworkers organized the Far East
Broadcasting Company Employees Association. After
registering their association with the then Department of
Labor, they demanded recognition of said association by the
company but the latter refused on the ground that being a non
profit, nonstock, noncommercial and religious corporation, it
is not covered by Republic Act 875, otherwise known as the
Industrial Peace Act, the labor law enforced at that time.

Several conciliation meetings were held at the Department


of Labor and in those meetings, the Director of Labor Relations
Edmundo Cabal advised the union members that the company
could not be forced to recognize them or to bargain collectively
with them because it is a nonprofit, noncommercial and
religious organization. Notwithstanding such advice, the union
members led by Saturno Victoria as its president, declared a
strike and picketed the company’s premises on September 6,
1972 for the purpose of seeking recognition of the labor union.

As a countermeasure, the company filed a case for damages


with preliminary injunction against the strikers before the
then Court of First Instance of Bulacan docketed as Civil Case
No. 750V. Said court issued an injunction enjoining the three
day old strike staged against the company. The complaint was
later amended seeking to declare the strike illegal.

Upon the declaration of martial law on September 21, 1972


and the promulgation of Presidential Decree No. 21 creating
the National Labor Relations Commission, the ad hoc National
Labor Relations Commission took cognizance of the strike
through NLRC Case No. 0021 entitled “Far East Broadcasting
Company Employees Association, complainant versus Far East
Broadcasting Company, respondent” and NLRC Case No. 0285
entitled “Generoso Serino, complainant, versus Far East
Broadcasting Company, respondent”, both cases for
reinstatement due to the company’s refusal to accept the
union’s offer to return to work during the pendency of the case
in the Court of First Instance.

On December 28, 1972, Arbitrator Flavio Aguas rendered a


joint decision in the two cases mentioned above recognizing the
jurisdiction of the Court of First Instance of Bulacan, the
dispositive portion reading as follows:
“IN VIEW WHEREOF, and in the interest of justice and equity, it is
hereby directed that:
1.
1.That striking members of the Far East Broadcasting Company Em
ployees Association
return to their respective positions in the corporation;
2.
2.The respondent Far East Broadcasting Company Incorporated to
accept back the
returning strikers without loss in rank seniority or status;
3.
3.The workers shall return to work within ten [10] days from receipt
of this resolution
otherwise they shall be deemed to have forfeited such right;
4.
4.The respondent shall report compliance with this decision within f
ifteen [15] days from
receipt hereof.
This Order shall, however, be without prejudice to whatever decisio
n the Court of First
Instance of Bulacan may promulgate in Civil Case No. 750V and to
the requirements the
existing order may need of people working with the mass media of c
ommunications.
IT IS SO ORDERED.”1

The decision of the arbitrator was successively appealed to the


ad hoc National Labor Relations Commission, the Secretary of
Labor and the Office of the President of the Philippines, and
was affirmed in all instances.

On April 23, 1975, the Court of First Instance of Bulacan


rendered judgment, to wit:
“WHEREFORE, judgment is hereby rendered:
1. 1.Making injunction against defendants permanent;
2.
2.Declaring that this Court has jurisdiction to try and hear the inst
ant case despite
Section 2 of Presidential Decree No. 2;
3.
3.Declaring that plaintiff Far East Broadcasting Company is a non-
profit organization
since it does not declare dividends;
4.
4.Declaring that the strike admitted by the defendants to have been
declared by them is
illegal inasmuch as it was for the purpose of compelling the plaintif
fcompany to
recognize their labor union which could not be legally done because
the plaintiffs
were not covered by Republic Act 875;
5.
5.Declaring that the evidence presented is insufficient to show that
defendants caused
the damage to the plaintiff consequent on the destruction of its rela
ys and its
antennas as well as its transmission lines.
SO ORDERED.”2

On April 24, 1975, by virtue of the above decision, the company


notified Saturno Victoria that he is dismissed effective April
26, 1975. Thereupon, he filed Case No. RBIV1764 before the
National Labor Relations Commission, Regional Branch IV
against the company alleging violation of Article 267 of the
Labor Code which requires clearance from the Secretary of
Labor for every shutdown of business establishments or
dismissal of employees. On February 27, 1976, Labor Arbiter
Manuel B. Lorenzo rendered a decision in petitioner’s favor
declaring the dismissal to be illegal, thereby ordering
reinstatement with full backwages. On appeal, the arbiter’s
decision was affirmed by the National Labor Relations
Commission. But when the commission’s decision was in turn
appealed to the Secretary of Labor, it was set aside and in lieu
thereof the questioned Order dated June 6, 1978 was issued.

In view of its brevity and for a better understanding of the


reasons behind it, We quote the disputed Order in full:
“ORDER

This is an appeal by respondent from the Decision of the National L


abor Relations
Commission, dated November 17, 1976.
The Commission upheld the Decision of the labor arbiter dated Febr
uary 27, 1976 ordering
respondent to reinstate with full backwages herein complainant Sat
urno A. Victoria based
on the finding that respondent did not file any application for cleara
nce to terminate the
services of complainant before dismissing him from his employment
.
Briefly the facts of this case are as follows:
Complainant Saturno Victoria is the president of the Far East Broa
dcasting Company
Employees Union. On September 8, 1972, the said union declared a
strike against
respondent company. On September 11, 1972, respondent filed wit
h the Court of First
Instance of Bulacan, Civil Case No. 750V, for the issuance of an inj
unction and a prayer
that the strike be declared illegal.
On October 24, 1972, complainant together with the other strikers f
iled with the ad hoc
National Labor Relations Commission Case Nos. 0021 and 0285 for
reinstatement. The
Arbitrator rendered a decision in said case on December 28, 1972,
wherein he ordered
respondent to reinstate complainants subject to the following condit
ion:
‘This Order shall, however, be without prejudice to whatever decisio
n the Court of First Instance
may promulgate on Civil Case No. 750V and to the requirements th
e existing order may need of
people working with the mass media of communications.’
Since said decision was affirmed by the NLRC, the Secretary of Labo
r, and the Office of
the President of the Philippines, complainants were reinstated purs
uant thereto.
In a Decision dated April 23, 1975, in Civil Case No. 750V, promulg
ated by the Court of
First Instance of Bulacan, the strike staged by herein complainant a
nd the other strikers
was declared illegal. Based on said Decision, respondent dismissed
complainant from his
employment. Hence, complainant filed the instant complaint for ille
gal dismissal.
Under the aforecited facts, we do not agree with the ruling of the Co
mmission now
subject of this appeal that an application for clearance to terminate
herein complainant is
mandatory on the part of respondent before terminating complaina
nt’s services. We believe
that what would have been necessary was a report as provided for u
nder Section 11[f], Rule
XIV, Book V of the Rules and Regulations Implementing the Labor C
ode. Moreover, even if
an application for clearance was filed, this Office would have treated
the same as a report.
Otherwise, it would render nugatory the Decision of the Arbitrator d
ated December 28,
1972 in Case Nos. 0021 and 0285 which was affirmed by the Comm
ission, the Secretary of
Labor and the Office of the President of the Philippines, ordering his
temporary
reinstatement, subject to whatever Decision the CFI of Bulacan may
promulgate in Civil
Case No. 750
V. It could be clearly inferred from said CFI Decisions that if the stri
ke is declared illegal,
the strikers will be considered to have lost their employment status
under the then existing
laws and jurisprudence, otherwise strikers could stage illegal strike
with impunity. Since
the strike was declared illegal, respondent acted in good faith when
it dispensed with the
services of herein complainant.
For failure of respondent to file the necessary report and based on e
quitable
considerations, complainant should be granted separation pay equi
valent to onehalf month
salary for every year of service.
WHEREFORE, let the decision of the National Labor Relations Com
mission dated
November 17, 1976 be, as it is hereby, set aside and a new judgmen
t is entered, ordering
respondent to give complainant separation pay equivalent to one-
half month salary for
every year of service.
SO ORDERED.”3
Petitioner elevates to Us for review on Certiorari the
aforequoted Order seeking to persuade this Court that then
Acting Secretary of Labor Amado G. Inciong committed
reversible error in holding that, under the law and facts of this
case, a mere report of the termination of the services of said
petitioner was sufficient. Petitioner assigns the following
errors:
I
WHETHER OR NOT A CLEARANCE FROM THE SECRETARY OF LA
BOR IS STILL
NECESSARY BEFORE THE PETITIONER HEREIN COULD BE DISM
ISSED
CONSIDERING THE RESTRICTIVE CONDITION IN THE DECISION
OF THE
COMPULSORY ARBITRATOR IN NLRC CASE NOS. 0021 AND 0285.
II

WHETHER OR NOT THE DECISION OF THE COURT OF FIRST INS


TANCE OF
BULACAN IN CIVIL CASE NO. 750V IPSO FACTO GAVE THE RESP
ONDENT
COMPANY AUTHORITY TO DISMISS HEREIN PETITIONER WITHO
UT ANY
CLEARANCE FROM THE SECRETARY OF LABOR. 4
The substantive law on the matter enforced during the time of
petitioner’s dismissal was Article 267[b] of the Labor Code [in
conjunction with the rules and regulations implementing said
substantive law.] Article 267 reads:

“No employer that has no collective bargaining agreement may shut


down his
establishment or dismiss or terminate the service of regular employ
ees with at least one [1]
year of service except managerial employees as defined in this book
without previous
written clearance from the Secretary of Labor.”

Petitioner maintains that the abovecited provision is very


clear. It does not make any distinction as to the ground for
dismissal. Whether or not the dismissal sought by the
employer company is for cause, it is imperative that the
company must apply for a clearance from the Secretary of
Labor.
In a recent case penned by Justice Abraham F. Sarmiento
5 promulgated on June 30, 1987, we had occasion to rule in
agreement with the findings of then Presidential Assistant for
Legal Affairs Ronaldo Zamora that the purpose in requiring a
prior clearance from the Secretary of Labor in cases of
shutdown or dismissal of employees, is to afford the Secretary
ample opportunity to examine and determine the
reasonableness of the request.
The Solicitor General, in relation to said pronouncement
and in justification of the Acting Labor Secretary’s decision
makes the following observations:

“It is true that Article 267[b] of the Labor Code requires that before
any business
establishment is shut down or any employee is dismissed, written cl
earance from the
Secretary of Labor must first be obtained. It is likewise true that in t
he case of petitioner,
there was no written clearance in the usual form. But while there m
ay not have been strict
compliance with Article 267 there was substantial compliance. The
Secretary of Labor twice
manifested his conformity to petitioner’s dismissal.
“The first manifestation of acquiescence by the Secretary of Labor to
the dismissal of
petitioner was his affirmance of the decision of the arbitrator in NLR
C Case Nos. 0021 and
0285. The arbitrator ordered the reinstatement of the strikers but s
ubject to the decision of
the CFI of Bulacan in Civil Case No. 750V. The Secretary of Labor af
firmed the decision of
the arbitrator. In effect, therefore, the Secretary of Labor issued a ca
rte blanche to the CFI
of Bulacan to either dismiss or retain petitioner.
“The second manifestation was his decision in NLRC Case No. RB-
IV176465 wherein
he said that clearance for the dismissal of petitioner was not require
d, but only a report;
that even if an application for clearance was filed, he would have tre
ated it as a mere
report. While this is not prior clearance in the contemplation of Arti
cle 267, it is at least a
ratification of the dismissal of petitioner.”6

We agree with the Solicitor General. Technically speaking, no


clearance was obtained by private respondent from the then
Secretary of Labor, the last step towards full compliance with
the requirements of law on the matter of dismissal of
employees. However, the rationale behind the clearance
requirement was fully met. The Secretary of Labor was
apprised of private respondent’s intention to terminate the
services of petitioner. This in effect is an application for
clearance to dismiss petitioner from employment. The
affirmance of the restrictive condition in the dispositive portion
of the labor arbiter’s decision in NLRC Case Nos. 0021 and
0285 by the Secretary of Labor and the Office of the President
of the Philippines, signifies a grant of authority to dismiss
petitioner in case the strike is declared illegal by the Court of
First Instance of Bulacan. Consequently and as correctly
stated by the Solicitor General, private respondent acted in
good faith when it terminated the employment of petitioner
on a declaration of illegality of the strike by the Court of
First Instance of Bulacan. Moreover, the then Secretary of
Labor manifested his conformity to the dismissal, not once, but
twice. In this regard, the mandatory rule on clearance need not
be applied.

The strike staged by the union in 1972 was a futile move.


The law then enforced, Republic Act 875 specifically excluded
respondent company from its coverage. Even if the parties had
gone to court to compel recognition, no positive relief could
have been obtained since the same was not sanctioned by law.
Because of this, there was no necessity on the part of private
respondent to show specific acts of petitioner during the strike
to justify his dismissal.

This is a matter of responsibility and of answerability.


Petitioner as a union leader, must see to it that the policies
and activities of the union in the conduct of labor relations are
within the precepts of law and any deviation from the legal
boundaries shall be imputable to the leader. He bears the
responsibility of guiding the union along the path of law and to
cause the union to demand what is not legally demandable,
would foment anarchy which is a prelude to chaos.

Petitioner should have known and it was his duty to impart


this imputed knowledge to the members of the union that
employees and laborers in nonprofit organizations are not
covered by the provisions of the Industrial Peace Act and the
Court of Industrial Relations [in the case at bar, the Court of
First Instance] has no jurisdiction to entertain petitions of
labor unions or organizations of said nonprofit organizations
for certification as the exclusive bargaining representatives of
said employees and laborers. 7
As a strike is an economic weapon at war with the policy of
the Constitution and the law at that time, a resort thereto by
laborers shall be deemed to be a choice of remedy peculiarly
their own, and outside of the statute, and as such, the strikers
must accept all the risks attendant upon their choice. If they
succeed and the employer succumbs, the law will not stand in
their way in the enjoyment of the lawful fruits of their victory.
But if they fail, they cannot thereafter invoke the protection of
the law for the consequences of their conduct unless the right
they wished vindicated is one which the law will, by all means,
protect and enforce. 8
We further agree with the Acting Secretary of Labor that
what was required in the case of petitioner’s dismissal was
only a report as provided under Section 11[f] of Rule XIV of the
Rules and Regulations implementing the Labor Code which
provides:
“Every employer shall submit a report to the Regional Office in acco
rdance with the form
presented by the Department on the following instances of terminati
on of employment,
suspension, layoff or shutdown which may be effected by the emplo
yer without prior
clearance within five [5] days thereafter:
xxx xxx xxx
[f] All other terminations of employment, suspension, layoffs or shut
downs, not
otherwise specified in this and in the immediately preceding section
s.”

To hold otherwise would render nugatory the conditions set


forth in the decision of Labor Arbiter Aguas on the basis of
which petitioner was temporarily reinstated.

Inasmuch as there was a valid and reasonable ground to


dismiss petitioner but no report as required by the
implementing rules and regulations of the Labor Code was
filed by respondent Company with the then Department of
Labor, petitioner as held by the Acting Secretary of Labor, is
entitled to separation pay equivalent to onehalf month salary
for every year of service.

WHEREFORE, the petition is dismissed. The decision of the


acting Secretary of Labor is AFFIRMED in toto.

SO ORDERED.

Gutierrez, Jr., Feliciano, Bidin and Cortes, JJ., concur.


Petition dismissed. Decision affirmed.

Notes.—Dismissal of wife due to alleged immoral conduct of


her husband is not justified. (Divine Word High School vs.
NLRC, 143 SCRA 346.)

Employer is given clearance to terminate employees but to


award them separation pay for their years of service. (SMC vs.
Deputy Minister of Labor & Employment, 145 SCRA 196.)
ST. MARTIN FUNERAL HOMES vs NLRC Case Digest

[G.R. No. 142351, November 22, 2006]

ST. MARTIN FUNERAL HOMES, PETITIONER, VS. NATIONAL


LABOR RELATIONS COMMISSION , AND BIENVENIDO
ARICAYOS, RESPONDENTS.

FACTS

St. Martin Funeral Homes, Inc. (St. Martin) was originally owned by
the mother of Amelita Malabed. Bienvenido Aricayos, a former
overseas contract worker, was granted financial assistance by
Amelita’s mother. In return, Aricayos extended assistance to
Amelita’s mother in managing St. Martin without compensation.
There was no written employment contract between Amelita’s
mother and Aricayos nor is he listed as an employee in the payroll
of St. Martin.

When Amelita’s mother died, she took over as manager of St.


Martin. After discovering some alleged anomalies, Amelita removed
the authority of Aricayos and his wife from taking part in managing
St. Martin’s operations.

Aricayos filed a complaints for illegal dismissal with prayer for


reinstatement, payment of back wages, and damages. After
requiring the parties to submit memoranda, position papers, and
other documentary evidences in support of their respective
positions, the Labor Arbiter rendered a Decision, in favor of
petitioner declaring that his office had no jurisdiction over the case
citing Dela Salle University vs. NLRC, 135 SCR 674, 677 (1988)
where the existence of an employer-employee relationship is
disputed and not assumed, as in these cases, the determination of
that question should be handled by the regular courts after full
dress trial and not by the Labor Arbiter.
ISSUE

Whether the Labor Arbiter made a determination of the presence of


an employer-employee relationship between St. Martin and
respondent Aricayos based on the evidence on record.

HELD

It is clear that the issue submitted for resolution is a question of


fact which is proscribed by the rule disallowing factual issues in
appeal by certiorari to the Supreme Court under Rule 45. This is
explicit in Rule 45, Section 1 that petitions of this nature “shall
raise only questions of law which must be distinctly set forth.”
Petitioner St. Martin would like the Court to examine the pleadings
and documentary evidence extant on the records of the Labor
Arbiter to determine if said official indeed made a finding on the
existence of the alleged employer-employee nexus between the
parties based on the facts contained in said pleadings and evidence.
Evidently this issue is embraced by the circumscription.

Even with the inadequate information and few documents on hand,


one thing is clear––that the Labor Arbiter did not set the labor case
for hearing to be able to determine the veracity of the conflicting
positions of the parties. On this point alone, a remand is needed.

We held in a catena of cases that while a formal trial or hearing is


discretionary on the part of the Labor Arbiter, when there are
factual issues that require a formal presentation of evidence in a
hearing, the Labor Arbiter cannot simply rely on the position
papers, more so, on mere unsubstantiated claims of parties.
FIRST DIVISION

[G.R. No.131374. January 26, 2000]

ABBOTT LABORATORIES PHILIPPINES, INC., petitioner,


vs. ABBOTT LABORATORIES EMPLOYEES UNION, MR.
CRESENCIANO TRAJANO, in his capacity as Acting Secretary of
The Department of Labor and Employment and MR.
BENEDICTO ERNESTO BITONIO, JR., in his capacity as
Director IV of the Bureau of Labor
Relations, respondents. ULANDU

DECISION

DAVIDE, JR., C.J.:

This special civil action for certiorari and mandamus assails the
action of the then Acting Secretary of Labor and Employment
Cresenciano. B. Trajano contained in its letter dated 19 September
1997,[1] informing petitioner Abbott Laboratories Philippines, Inc.
(hereafter ABBOTT), thru its counsel that the Office of the Secretary
of Labor cannot act on ABBOTT's appeal from the decision of 31
March 1997[2] and the Order of 9 July 1997 [3] of the Bureau of Labor
Relations, for lack of appellate jurisdiction.

ABBOTT is a corporation engaged in the manufacture and


distribution of pharmaceutical drugs. On 22 February 1996, [4] the
Abbott Laboratories Employees Union (hereafter ALEU) represented
by its president, Alvin B. Buerano, filed an application for union
registration in the Department of Labor and Employment. ALEU
alleged in the application that it is a labor organization with
members consisting of 30 rank-and-file employees in the
manufacturing unit of ABBOTT and that there was no certified
bargaining agent in the unit it sought to represent, namely, the
manufacturing unit.

On 28 February 1996,[5] ALEU's application was approved by the


Bureau of Labor Relations, which in due course issued Certificate of
Registration No. NCR-UR-2-1638-96. Consequently, ALEU became
a legitimate labor organization.
On 2 April 1996,[6] ABBOTT filed a petition for cancellation of the
Certificate of Registration No. NCR-UR-2-1638-96 in the Regional
Office of the Bureau of Labor Relations. This case was docketed as
Case No. OD-M-9604-006. ABBOTT assailed the certificate of
registration since ALEU's application was not signed by at least
20% of the total 286 rank-and-file employees of the entire employer
unit; and that it omitted to submit copies of its books of
account. LEX

On 21 June 1996,[7] the Regional Director of the Bureau of Labor


Relations decreed the cancellation of ALEU's registration certificate
No. NCR-UR-II-1585-95.[8] In its decision, the Regional Director
adopted the 13 June 1996[9] findings and recommendations of the
Med-Arbiter. It ruled that the union has failed to sliow that the
rank-and-file employees in the manufacturing unit of ABBOTT were
bound by a common interest to justify the formation of a bargaining
unit separate from those belonging to the sales and office staff
units. There was, therefore, sufficient reason to assume that the
entire membership of the rank-and-file consisting of 286 employees
or the "employer unit" make up the appropriate bargaining unit.
However, it was clear on the record that the union's application for
registration was supported by 30 signatures of its members or
barely constituting 10% of the entire rank-and-file employees of
ABBOTT. Thus the Regional Director found that for ALEU's failure
to satisfy the requirements of union registration under Article 234
of the Labor Code; the cancellation of its certificate of registration
was in order.

Forthwith, on 19 August 11996,[10] ALEU appealed said cancellation


to the Office of the Secretary of Labor and Employment, which
referred the same to the Director of the Bureau of Labor Relations.
The said appeal was docketed as Case No. BLR-A-10-25-96.

On 31 March 1997,[11] the Bureau of Labor Relations rendered


judgment reversing the 21 June 1996 decision of the Regional
Director, thus:

WHEREFORE, the appeal is GRANTED and the decision


of the Regional Director dated 21 June 1996 is hereby
REVERSED. Abbott Laboratories Employees Union shall
remain in the roster of legitimate labor organizations,
with all the rights, privileges and obligations appurtenant
thereto.[12]

It gave the following reasons to justify the reversal: ( 1) Article 234


of the Labor Code does not require an applicant union to show
proof of the "desirability of more than one Ibargaining unit within
an employer unit," and the absence of such proof is not a ground
for the cancellation of a union's registration pursuant to Article 239
of Book V, Rule II of the implementing rules of the Labor Code; (2)
the issue pertaining to the appropriateness of a bargaining unit
cannot be raised in a cancellation proceeding but may be threshed
out in the exclusion-inclusion process during a certification
election; and (3) the "one-bargaining unit, one-employer unit policy"
must not be interpreted in a manner that shall derogate the right of
the employees to self-organization and freedom of association as
guaranteed by Article III, Section 8 of the 1987 Constitution and
Article II of the International Labor Organization's Convention
No.87. Jj sc

Its motion to reconsider the 31 March 1997 decision of the Bureau


of Labor Relations having been denied for lack of merit in the
Order[13] of 9 July 1997, ABBOTT appealed to the Secretary of Labor
and Employment. However, in its letter dated 19 September 1997,
[14]
addressed to ABBOTT's counsel, the Secretary of Labor and
Employment refused to act on ABBOTT's appeal on the ground that
it has no jurisdiction to review the decision of the Bureau of Labor
Relations on iappeals in cancellation cases emanating from the
Regional Offices. The decision of the Bureau of Labor Relations
therein is final and executory under Section 4, Rule III, Book V of
the Rules and Regulations Implementing thc Labor Code, as
amended by Department Order No. 09, s. of 1997. Finally, the
Secretary stated:

It has always been the policy of this Office that pleadings


denominated as appeal thereto over decisions of the BLR
in cancellation cases coming from the Regional Offices
are referred back to the BLR, so that the same may be
treated as motions for reconsideration and disposed of
accordingly. However, since your office has already filed a
motion for reconsideration with the BLR which has been
denied in its Order dated 09 July 1997, your recourse
should have been a special civil action for certiorari with
the Supreme Court.

In view of the foregoing, please be informed that the


Office of the Secretary cannot act upon your Appeal,
except to cause the BLR to include it in the records of the
case.

Hence, this petition. ABBOTT premised its argument on the


authority of the Secretary of Labor and Employment to review the
decision of the Bureau of Labor Relations and at the same time
raised the issue on the validity of ALEU's certificate of registration.

We find no merit in this petition.

At the outset, it is wortl1y to note that the present petition assails


only the letter of the then Secretary of Labor & Employment
refusing to take cognizance of ABBOTT's appeal for lack of appellate
jurisdiction. Hence, in the resolution of the present petition, it is
just appropriate to limit the issue on the power of the Secretary of
Labor and Employment to review the decisions of the Bureau of
Labor Relations rendered in the exercise of its appellate jurisdiction
over decisions of the Regional Director in cases involving
cancellations of certificates of registration of labor unions. The issue
anent the validity of ALEU's certificate of registration is subject of
the Bureau of Labor Relations decision dated 31 March 1997.
However, said decision is not being assailed in the present petition;
hence, we are not at liberty to review the same. Sc jj

Contrary to ABBOTT's contention, there has been no grave abuse of


discretion on the part of the Secretary of Labor and Employment.
Its refusal to take cognizance of ALEU's appeal from the decision of
the Bureau of Labor Relations is in accordance with the provisions
of Rule VIII, Book V of the Omnibus Rules Implementing the Labor
Code as amended by Department Order No. 09. [15] The rule
governing petitions for cancellation of registration of any legitimate
labor organization or worker association, as it now stands, provides:

SECTION 1. Venue of Action --If the respondent to the


petition is a local/chapter, affiliate, or a workers'
association with operations limited to one region, the
petition shall be filed with the Regional Office having
jurisdiction over the place where the respondent
principally operates. Petitions filed against federations,
national or industry unions, trade union centers, or
workers' associations operating in more than one regional
jurisdiction, shall be filed with the Bureau.

SECTION 3. Cancellation of registration;. nature and


grounds. -- Subject to the requirements of notice and due
process, the registration of any legitimate labor
organization or worker's association may be cancelled by
the Bureau or the Regional Office upon the filing of an
independent petition for cancellation based on any of the
following grounds:

(a) Failure to comply with any of the requirements


prescribed under Articles 234, 237 and 238 of the Code;

(b) Violation of any of the provisions of Article 239 of the


Code;

(b) Commission of any of the acts enumerated under


Article 241 of the Code; provided, that no petition for
cancellation based on this ground may be granted unless
supported by at least thirty percent (30%) of all the
members of the respondent labor organization or
workers' association.

Section 4. Action on the petition; appeals -- The Regional


or Bureau Director, as the case may be, shall have thirty
(30) days from submission of the case for resolution
within which to resolve the petition. The decision of the
Regional or Bureau Director may be appealed to the
Bureau or the Secretary, as the case may be, within ten
(10) days from receipt thereof by the aggrieved party on
the ground of grave abuse of discretion or any violation
of these Rules.

The Bureau or the Secretary shall have fifteen ( 15) days


from receipt of the records of the case within which to
decide the appeal. The decision of the Bureau or the
Secretary shall be final and executory.Sj cj

Clearly, the Secretary of Labor and Employment has no jurisdiction


to entertain the appeal of ABBOTT. The appellate jurisdiction of the
Secretary .of Labor and Employment is limited only to a review of
cancellation proceedings decided by the Bureau of Labor Relations
in the exercise of its exclusive and original jurisdiction. The
Secretary of Labor and Employment has no jurisdiction over
decisions of the Bureau of Labor Relations rendered in the exercise
of its appellate power to review the decision of the Regional Director
in a petition to cancel the union's certificate of registration, said
decisions being final and inappealable. [16] We sustain the analysis
and interpretation of the OSG on this matter, to wit:

From the foregoing, the Office of the Secretary correctly


maintained that it cannot take cognizance of petitioner's
appeal from the decision of BLR Director Bitonio.
Sections 7 to 9[17] (of the Implementing Rules of the Labor
Code) thus provide for two situations:

(1) The first situation involves a petition for cancellation


of union registration which is filed with a Regional
Office. A decision of a Regional Office cancelling a union's
certificate of registration may be appealed to
the BLR whose decision on the matter shall be final and
inappealable.

(2) The second situation involves a petition for


cancellation of certificate of union registration which is
filed directly with the BLR. A decision of the BLR
cancelling a union's certificate of registration may be
appealed to the Secretary of Labor whose decision on the
matter shall be final and inappealable.
Respondent Acting Labor Secretary's ruling --that the
BLR's decision upholding the validity of respondent
union's certificate of registration is final and inappealable
--is thus in accordance with aforequoted Omnibus Rules
because the petition for cancellation of union registration
was filed by petitioner with a Regional Office, specifically,
with the Regional Office of the BLR, National Capital
Region (vide pp.1-2, Annex 2, Petition). The cancellation
proceedings initiated by petitioner before the Regional
Office is covered by the first situation contemplated by
Sections 7 to 9 of the Omnibus Rules. Hence, an appeal
from the decision of the Regional Office may be brought
to the BLR whose decision on the matter is final and
inappealable. Supreme

In the instant case, upon the cancellation of respondent


union's registration by the Regional Office, respondent
union incorrectly appealed said decision to the Office of
the Secretary. Nevertheless, this situation was
immediately rectified when the Office of the
Secretary motu proprio referred the appeal to the BLR
However, upon reversal by the BLR of the decision of the
Regional Office cancelling registration, petitioner should
have immediately elevated the BLR decision to the
Supreme Court in a special civil action
for certiorari under Rule 65 of the Rules of Court.

Under Sections 3 and 4, Rule VIII of Book V of the Rules


and Regulations implementing the Labor Code, as
amended by Department Order No. 09, petitions for
cancellation of union registration may be filed with a
Regional office, or directly, with the Bureau of Labor
Relations. Appeals from the decision of a Regional
Director may be filed with the BLR Director whose
decision shall be final and executory. On the other hand,
appeals from the decisions of the BLR may be filed with
the Secretary of Labor whose decision shall be final and
executory .
Thus, under Sections 7 to 9 of the Omnibus Rules and
under Sections 3 and 4 of the Implementing Rules (as
amended by Department Order No. 09), the finality of the
BLR decision is dependent on whether or not the petition
for cancellation was filed with the BLR directly. Under
said Rules, if the petition for cancellation is directly filed
with the BLR, its decision cancelling union registration is
not yet final and executory as it may still be appealed to
the Office of the Secretary. However, if the petition for
cancellation was filed with the Regional Office, the
decision of the BLR resolving an appeal of the decision of
said Regional Office is final and executory. [18] Court

It is clear then that the Secretary of Labor and Employment did not
commit grave abuse of discretion in not acting on ABBOTT's appeal.
The decisions of the Bureau of Labor Relations on cases brought
before it on appeal from the Regional Director are final and
executory. Hence, the remedy of the aggrieved party is to
seasonably avail of the special civil action of certiorari under Rule
65 of the Rules of Court.[19]

Even if we relaxed the rule and consider the present petition as a


petition for certiorari not only of the letter of the Secretary of Labor
and Employment but also of the decision of the Bureau of the Labor
Relations which overruled the order of cancellation of ALEU's
certificate of registration, the same would still be dismissable for
being time-barred. Under Sec. 4 of Rule 65 of the 1997 Revised
Rules of Court the special civil action for certiorari should be
instituted within a period of sixty (60) days from notice of the
judgment, order or resolution sought to be assailed. ABBOTT
received the decision of the Bureau of Labor Relations on 14 April
1997 and the order denying its motion for reconsideration of the
said decision on 16 July 1997. The present petition was only filed
on 28 November 1997, after the laps of more than four months.
Thus, for failure to avail of the correct remd4y within the period
provided by law, the decision of the Bureau of Labor Relations has
become final and executory.
WHEREFORE, the Petition is DENIED. The challenged order in
BLR-A-10-25-96 of the Secretary of Labor and Employment
embodied in its 19 September letter is hereby AFFIRMED.

SO ORDERED.

THIRD DIVISION

AMA COMPUTER COLLEGE-G.R. No. 162739


SANTIAGO CITY, INC.,
Petitioner, Present:

YNARES-SANTIAGO, J.,
-versus- Chairperson,
AUSTRIA-MARTINEZ,
CORONA,*
NACHURA, and
CHELLY P. NACINO, REYES, JJ.
substituted by the Heirs of
Chelly P. Nacino, Promulgated:
Respondent.
February 12, 2008

x-----------------------------------------------------------------------------------x

RESOLUTION

NACHURA, J.:

Before this Court is a Petition for Review on Certiorari[1] under Rule


45 of the Rules of Civil Procedure seeking the reversal of the Court
of Appeals (CA) Resolution[2] dated June 23, 2003, the dispositive
portion of which provides:

WHEREFORE, for being procedurally flawed, this


petition for certiorari is hereby DENIED DUE COURSE,
and consequently DISMISSED. Needless to say, the
prayer for temporary restraining order, being merely an
adjunct to the main suit, must be pro tanto DENIED.

SO ORDERED.

and of the CA Resolution[3] dated March 3, 2004 which denied


petitioner's motion for reconsideration.

Petitioner AMA Computer College Santiago City, Inc. (AMA)


employed Chelly P. Nacino (Nacino) as Online Coordinator of the
college. On October 30, 2002, ostensibly upon inspection, the
Human Resources Division Supervisor, Mariziel C. San Pedro (San
Pedro) found Nacino absent from his post. On the same day, San
Pedro issued a Memorandum[4] requiring Nacino to explain his
absence. Nacino filed with San Pedro a written
[5]
explanation claiming that he had to rush home at 1315 hours
(1:15 PM) because he was suffering from LBM (loose bowel
movement) and that the facilities in the school were inadequate and
inefficient, but he had gone back to the school at 1410 hours (2:10
PM). Not satisfied with the explanation, San Pedro sought another
explanation because the earlier explanation does not conform to a
previous investigation conducted. [6] Nacino furnished San Pedro the
same written explanation he had earlier submitted. San Pedro then
filed a formal complaint against Nacino for false testimony, in
addition to the charge of abandonment. An Investigating
Committee[7] was constituted to investigate the complaint and,
pending investigation, Nacino was placed under preventive
suspension for a maximum of thirty (30) days, effective November 8,
2002.[8] The Investigating Committee found Nacino guilty as
charged, and was dismissed from the service on December 5, 2002.
[9]

Aggrieved, Nacino filed on December 13, 2002 a Complaint [10] for


Illegal Suspension and Termination before the National Conciliation
and Mediation Board (NCMB) in TuguegaraoCity. On January 10,
2003, Maria Luanne M. Jali-jali (Jali-jali), AMA's representative,
signed the submission Agreement, accepting the jurisdiction of
Voluntary Arbitrator Nicanor Y. Samaniego (Voluntary Arbitrator)
over the controversy.
Before the Voluntary Arbitrator, the parties agreed to settle the case
amicably, with Nacino discharging and releasing AMA from all his
claims in consideration of the sum of P7,719.81.The
[11]
Decision embodying the Compromise Agreement and the
corresponding Quitclaim and Release, [12] both dated February 21,
2003, were duly prepared and signed, but the check in payment of
the consideration for the settlement had yet to be released.

On April 1, 2003, Nacino died in an accident. On April 15, 2003,


the Voluntary Arbitrator rendered the assailed Decision, [13] ordering
Nacino's reinstatement and the payment of his backwages and
13th month pay. Therein, the Voluntary Arbitrator manifested that,
due to AMA's failure to pay the sum of P7,719.81, Nacino withdrew
from the Compromise Agreement, as shown by the conduct of a
hearing on March 15, 2003 where both parties appeared and were
directed to file their position papers. The Voluntary Arbitrator also
stated that Nacino complied, but AMA failed to file its position
paper and to appear before him despite summons. On May 7, 2003,
the Voluntary Arbitrator issued a Writ of Execution [14] upon motion
of Nacino's surviving spouse, one Bernadeth V. Nacino. AMA
filed a Motion to Quash the said Writ but the Voluntary Arbitrator
allegedly refused to receive the same. [15] Thus, on May 22, 2003, the
heirs of Nacino were able to garnish AMA's bank deposits in the
amount of P52,021.70.
On June 16, 2003, AMA filed a Petition [16] for Certiorari under Rule
65 before the CA. On June 23, 2003, the CA dismissed the said
petition because it was a wrong mode of review. It held that the
proper remedy was an appeal by way of Rule 43 of the Rules of Civil
Procedure. Accordingly, the CA opined, an erroneous appeal shall
be dismissed outright pursuant to Section 2, Rule 50 of the Rules of
Civil Procedure.

AMA filed its Motion for Reconsideration but the CA denied it in its
Resolution dated March 3, 2004.

Hence, this petition based on the sole ground that:


THE COURT OF APPEALS COMMITTED SERIOUS
ERROR OF LAW IN DISMISSING THE PETITION FOR
CERTIORARI UNDER RULE 65 OF THE 1997 RULES OF
CIVIL PROCEDURE FILED BY HEREIN PETITIONER.

AMA claims that Jali-jali was misinformed and misled in signing the
Submission Agreement, subjecting AMA to the jurisdiction of the
Voluntary Arbitrator; that the Voluntary Arbitrator's Decision was
issued under the Labor Code and, as such, the same is not
appealable under Rule 43, as provided for by Section 2 [17] thereof,
but under Rule 65 of the Rules of Civil Procedure; and that the
petition for certiorari is the only plain, speedy and adequate remedy
in this case since the Voluntary Arbitrator acted with grave abuse of
discretion in disregarding the parties' compromise agreement, in
rendering the assailed Decision, and in issuing the Writ of
Execution without affording AMA its right to due process.
On the other hand, the heirs of Nacino refused to receive this
Court's Resolution requiring them to file their Comment [18] and, as
such, were considered to have waived their right to file the same. [19]
The instant petition lacks merit.

Pertinent is our ruling in Centro Escolar University Faculty and


Allied Workers Union-Independent v. Court of Appeals,[20] where we
held:

We find that the Court of Appeals did not err in holding


that petitioner used a wrong remedy when it filed a
special civil action on certiorari under Rule 65 instead of
an appeal under Rule 43 of the 1997 Rules of Civil
Procedure. The Court held in Luzon Development Bank v.
Association of Luzon Development Bank Employees that
decisions of the voluntary arbitrator under the Labor
Code are appealable to the Court of Appeals. In that case,
the Court observed that the Labor Code was silent as
regards the appeals from the decisions of the voluntary
arbitrator, unlike those of the Labor Arbiter which may
be appealed to the National Labor Relations Commission.
The Court noted, however, that the voluntary arbitrator is
a government instrumentality within the contemplation of
Section 9 of Batas Pambansa Blg. (BP) 129 which
provides for the appellate jurisdiction of the Court of
Appeals. The decisions of the voluntary arbitrator are
akin to those of the Regional Trial Court, and, therefore,
should first be appealed to the Court of Appeals before
being elevated to this Court. This is in furtherance and
consistent with the original purpose of Circular No. 1-91
to provide a uniform procedure for the appellate review of
adjudications of all quasi-judicial agencies not expressly
excepted from the coverage of Section 9 of BP 129.
Circular No. 1-91 was later revised and became Revised
Administrative Circular No. 1-95. The Rules of Court
Revision Committee incorporated said circular in Rule 43
of the 1997 Rules of Civil Procedure. The inclusion of the
decisions of the voluntary arbitrator in the Rule was
based on the Court's pronouncements in Luzon
Development Bank v. Association of Luzon Development
Bank Employees. Petitioner's argument, therefore, that
the ruling in said case is inapplicable in this case is
without merit.

We are not unmindful of instances when certiorari was granted


despite the availability of appeal, such as (a) when public welfare
and the advancement of public policy dictates; (b) when the broader
interest of justice so requires; (c) when the writs issued are null and
void; or (d) when the questioned order amounts to an oppressive
exercise of judicial authority. [21]However, none of these recognized
exceptions attends the case at bar. AMA has sadly failed to show
circumstances that would justify a deviation from the general rule.

While it is true that, in accordance with the liberal spirit which


pervades the Rules of Court and in the interest of justice, a
petition for certiorari may be treated as having been filed under
Rule 45, the petition for certiorari filed by petitioner before the CA
cannot be treated as such, without the exceptional circumstances
mentioned above, because it was filed way beyond the 15-day
reglementary period within which to file the Petition for Review.
[22]
AMA received the assailed Decision of the Voluntary Arbitrator
on April 15, 2003 and it filed the petition for certiorari under Rule
65 before the CA only on June 16, 2003. [23] By parity of reasoning,
the same reglementary period should apply to appeals taken from
the decisions of Voluntary Arbitrators under Rule 43. Based on the
foregoing disquisitions, the assailed Decision of the Voluntary
Arbitrator had already become final and executory and beyond the
purview of this Court to act upon.[24]

Verily, rules of procedure exist for a noble purpose, and to disregard


such rules in the guise of liberal construction would be to defeat
such purpose. Procedural rules are not to be disdained as mere
technicalities. They may not be ignored to suit the convenience of a
party. Adjective law ensures the effective enforcement of substantive
rights through the orderly and speedy administration of justice.
Rules are not intended to hamper litigants or complicate litigation.
But they help provide for a vital system of justice where suitors may
be heard following judicial procedure and in the correct forum.
Public order and our system of justice are well served by a
conscientious observance by the parties of the procedural rules. [25]

WHEREFORE, the instant Petition is DENIED for lack of merit. The


assailed Court of Appeals Resolutions dated June 23, 2003 and
March 3, 2004 are hereby AFFIRMED. Costs against the petitioner.
SO ORDERED.

ANTONIO EDUARDO B. NACHURA


Associate Justice

WE CONCUR:

CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson

MA. ALICIA AUSTRIA-MARTINEZ RENATO C. CORONA


Associate Justice Associate Justice
RUBEN T. REYES
Associate Justice

ATTESTATION

I attest that the conclusions in the above Resolution were reached


in consultation before the case was assigned to the writer of the
opinion of the Courts Division.

CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson, Third Division

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and the


Division Chairpersons Attestation, I certify that the conclusions in
the above Resolution were reached in consultation before the case
was assigned to the writer of the opinion of the Courts Division.

REYNATO S. PUNO
Chief Justice
SUPREME COURT SECOND DIVISION

PHILIPPINE AIRLINES, INC., Petitioner,

-versus- G.R. No. 120567 March 20, 1998

NATIONAL LABOR RELATIONS COMMISSION, FERDINAND


PINEDA and GOGFREDO CABLING,

Respondents.
x----------------------------------------------------x

DECISION

MARTINEZ, J.:

Can the National Labor Relations Commission (NLRC), even without


a complaint for illegal dismissal filed before the labor arbiter,
entertain an action for injunction and issue such writ enjoining
petitioner Philippine Airlines, Inc. from enforcing its Orders of
dismissal against private respondents, and ordering petitioner to
reinstate the private respondents to their previous positions?
This is the pivotal issue presented before us in this petition for
certiorari under Rule 65 of the Revised Rules of Court which seeks
the nullification of the injunctive writ dated April 3, 1995 issued by
the NLRC and the Order denying petitioner’s motion for
reconsideration
on the ground that the said Orders were issued in excess of
jurisdiction.
Private respondents are flight stewards of the petitioner. Both were
dismissed from the service for their alleged involvement in the April
3, 1993 currency smuggling in Hong Kong.
Aggrieved by said dismissal, private respondents filed with the
NLRC a Petition[1] for injunction praying that:
“I. Upon filing of this Petition, a temporary restraining order be
issued, prohibiting respondents (petitioner herein) from effecting or
enforcing the Decision dated Feb. 22, 1995, or to reinstate
petitioners temporarily while a hearing on the propriety of the
issuance of a writ of preliminary injunction is being undertaken;
“II. After hearing, a writ of preliminary mandatory injunction be
issued ordering respondent to reinstate petitioners to their former
positions pending the hearing of this case, or, prohibiting
respondent from enforcing its Decision dated February 22, 1995
while this case is pending adjudication;
“III. After hearing, that the writ of preliminary injunction as to the
reliefs sought for be made permanent, that petitioners be awarded
full backwages, moral damages of PHP 500,000.00 each and
exemplary damages of PHP 500,000.00 each, attorney’s fees
equivalent to ten percent of whatever amount is awarded, and the
costs of suit.”

On April 3, 1995, the NLRC issued a temporary mandatory


injunction[2] enjoining petitioner to cease and desist from enforcing
its February 22, 1995 Memorandum of dismissal. In granting the
writ, the NLRC considered the following facts, to wit: “that almost
two (2) years ago, i.e. on April 15, 1993, the petitioners were
instructed to attend an investigation by respondent’s ‘Security and
Fraud Prevention Sub-Department’ regarding an April 3, 1993
incident in Hongkong at which Joseph Abaca, respondent’s Avionics
Mechanic in Hongkong ‘was intercepted by the Hongkong Airport
Police at Gate 05 the ramp area of the Kai Tak International Airport
while about to exit said gate carrying a bag said to contain some 2.5
million pesos in Philippine Currencies. That at the Police Station,
Mr. Abaca claimed that he just found said plastic bag at the Skybed
Section of the arrival flight PR300/03 April 93,’ where petitioners
served as flight stewards of said flight PR300; the petitioners sought
‘a more detailed account of what this HKG incident is all about’; but
instead, the petitioners were administratively charged, ‘a hearing’
on which ‘did not push through’ until almost two (2) years after, i.e.
‘on January 20, 1995 where a confrontation between Mr. Abaca and
petitioners herein was compulsorily arranged by the respondent’s
disciplinary board’ at which hearing, Abaca was made to identify
petitioners as co-conspirators; that despite the fact that the
procedure of identification adopted by respondent’s Disciplinary
Board was anomalous ‘as there was no one else in the line-up
(which could not be called one) but petitioners Joseph Abaca still
had difficulty in identifying petitioner Pineda as his co-conspirator,
and as to petitioner Cabling, he was implicated and pointed by
Abaca only after respondent’s Atty. Cabatuando pressed the former
to identify petitioner Cabling as co-conspirator’; that with the
hearing reset to January 25, 1995, ‘Mr. Joseph Abaca finally gave
exculpating statements to the board in that he cleared petitioners
from any participation or from being the owners of the currencies,
and at which hearing Mr. Joseph Abaca volunteered the
information that the real owner of said money was one who
frequented his headquarters in Hongkong to which information, the
Disciplinary Board Chairman, Mr. Ismael Khan,’ opined ‘for the
need for another hearing to go to the bottom of the incident’; that
from said statement, it appeared ‘that Mr. Joseph Abaca was the
courier, and had another mechanic in Manila who hid the currency
at the plane’s skybed for Abaca to retrieve in Hongkong, which
findings of how the money was found was previously confirmed by
Mr. Joseph Abaca himself when he was first investigated by the
Hongkong authorities’; that just as petitioners ‘thought that they
were already fully cleared of the charges, as they no longer received
any summons/notices on the intended ‘additional hearings’
mandated by the Disciplinary Board,’ they were
surprised to receive on February 23, 1995 a Memorandum dated
February 22, 1995’ terminating their services for alleged violation of
respondent’s Code of Discipline ‘effective, immediately;’ that
sometime first week of March, 1995, petitioner Pineda received
another Memorandum from respondent Mr. Juan Paraiso, advising
him of his termination effective February 3, 1995, likewise for
violation of respondent’s Code of Discipline;” In support of the
issuance of the writ of temporary injunction, the NLRC adopted the
view that: (1) private respondents cannot be validly dismissed on
the strength of petitioner’s Code of Discipline which was declared
illegal by this Court in the case of PAL, Inc. vs. NLRC, (G.R. No.
85985), promulgated August 13, 1993, for the reason that it was
formulated by the petitioner without the participation of its
employees as required in R.A. 6715, amending Article 211 of the
Labor Code; (2) the whimsical, baseless and premature dismissals
of private respondents which “caused them grave and irreparable
injury” is enjoinable as private respondents are left “with no speedy
and adequate remedy at law” except the issuance of a temporary
mandatory injunction; (3) the NLRC is empowered under Article 218
(e) of the Labor Code not only to restrain any actual or threatened
commission of any or all prohibited or unlawful acts but also to
require the performance of a particular act in any labor dispute,
which, if not restrained or performed forthwith, may cause grave or
irreparable damage to any party; and (4) the temporary mandatory
power of the NLRC was recognized by this Court in the case of
Chemo-Technicshe Mfg., Inc. Employees Union, DFA, et. al. vs.
Chemo-Technische Mfg., Inc. [G.R. No. 107031, January 25, 1993].
On May 4, 1995, petitioner moved for reconsideration[3] arguing
that the NLRC erred:
1. in granting a temporary injunction order when it has no
jurisdiction to issue an injunction or restraining order since this
may be issued only under Article 218 of the Labor Code if the case
involves or arises from labor disputes;
2. in granting a temporary injunction order when the termination of
private respondents have long been carried out;
3. in ordering the reinstatement of private respondents on the basis
of their mere allegations, in violation of PAL’s right to due process;
4. in arrogating unto itself management prerogative to discipline its
employees and divesting the labor arbiter of its original and
exclusive jurisdiction over illegal dismissal cases;
5. in suspending the effects of termination when such action is
exclusively within the jurisdiction of the Secretary of Labor;
6. in issuing the temporary injunction in the absence of any
irreparable or substantial injury to both private respondents.
On May 31, 1995, the NLRC denied petitioner’s motion for
reconsideration, ruling:
“The respondent (now petitioner), for one, cannot validly claim that
we cannot exercise our injunctive power under Article 218 (e) of the
Labor Code on the pretext that what we have here is not a labor
dispute as long as it concedes that as defined by law, a”(1) ‘Labor
Dispute’ includes any controversy or matter concerning terms or
conditions of employment.” If security of tenure, which has been
breached by respondent and which, precisely, is sought to be
protected by our temporary mandatory injunction (the core of
controversy in this case) is not a “term or condition of employment”,
what then is? x x x

Anent respondent’s second argument, Article 218 (e) of the Labor


Code empowered the Commission not only to issue a prohibitory
injunction, but a mandatory (“to require the performance”) one as
well. Besides, as earlier discussed, we already exercised (on August
23, 1991) this temporary mandatory injunctive power in the case of
“Chemo-Technische Mfg., Inc. Employees Union-DFA et. al. vs.
Chemo-Technishe Mfg., Inc., et. al.” (supra) and effectively enjoined
one (1) month old dismissals by Chemo-Technische and that our
aforesaid mandatory exercise of injunctive power, when questioned
through a petition for certiorari, was sustained by the Third
Division of the Supreme court per its Resolution dated January 25,
1993.
x x x
Respondent’s fourth argument that petitioner’s remedy for their
dismissals is ‘to file an illegal dismissal case against PAL which
cases are within the original and exclusive jurisdiction of the Labor
Arbiter’ is ignorant. In requiring as a condition for the issuance of a
‘temporary or permanent injunction’- ‘(4) That complainant has no
adequate remedy at law;’ Article 218 (e) of the Labor Code clearly
envisioned adequacy, and not plain availability of a remedy at law
as an alternative bar to the issuance of an injunction. An illegal
dismissal suit (which takes, on its expeditious side, three (3) years
before it can be disposed of) while available as a remedy under
Article 217 (a) of the Labor Code, is certainly not an ‘adequate;
remedy at law. Ergo, it cannot, as an alternative remedy, bar our
exercise of that injunctive power given us by Article 218 (e) of the
Code.
x x x
Thus, Article 218 (e), as earlier discussed [which empowers this
Commission ‘to require the performance of a particular act’ (such as
our requiring respondent ‘to cease and desist from enforcing’ its
whimsical memoranda of dismissals and ‘instead to reinstate
petitioners to their respective position held prior to their subject
dismissals’) in ‘any labor dispute which, if not performed forthwith,
may cause grave and irreparable damage to any party’] stands as
the sole ‘adequate remedy at law’ for petitioners here.
Finally, the respondent, in its sixth argument claims that even if its
acts of dismissing petitioners ‘may be great, still the same is
capable of compensation’, and that consequently, ‘injunction need
not be issued where adequate compensation at law could be
obtained’. Actually, what respondent PAL argues here is that we
need not interfere in its whimsical dismissals of petitioners as, after
all, it can pay the latter its backwages.
But just the same, we have to stress that Article 279 does not
speak alone of backwages as an obtainable relief for illegal
dismissal; that reinstatement as well is the concern of said law,
enforceable when necessary, through Article 218 (e) of the Labor
Code (without need of an illegal dismissal suit under Article 217 (a)
of the Code) if such whimsical and capricious act of illegal dismissal
will ‘cause grave or irreparable injury to a party’”[4]
Hence, the present recourse.
Generally, injunction is a preservative remedy for the protection of
one’s substantive rights or interest. It is not a cause of action in
itself but merely a provisional remedy, an adjunct to a main suit. It
is resorted to only when there is a pressing necessity to avoid
injurious consequences which cannot be remedied under any
standard of compensation. The application of the injunctive writ
rests upon the existence of an emergency or of a special reason
before the main case be regularly heard. The essential conditions
for granting such temporary injunctive relief are that the complaint
alleges facts which appear to be sufficient to constitute a proper
basis for injunction and that on the entire showing from the
contending parties, the injunction is reasonably necessary to
protect the legal rights of the plaintiff pending the litigation.[5]
Injunction is also a special equitable relief granted only in cases
where there is no plain, adequate and complete remedy at law.[6]
In labor cases, Article 218 of the Labor Code empowers the NLRC

“(e) To enjoin or restrain any actual or threatened commission of
any or all prohibited or unlawful acts or to require the performance
of a particular act in any labor dispute which, if not restrained or
performed forthwith, may cause grave or irreparable damage to any
party or render ineffectual any decision in favor of such party;
(Emphasis Ours)
Complementing the above-quoted provision, Sec. 1, Rule XI of the
New Rules of Procedure of the NLRC, pertinently provides as
follows:
“Section 1. Injunction in Ordinary Labor Dispute. — A preliminary
injunction or a restraining order may be granted by the Commission
through its divisions pursuant to the provisions of paragraph (e) of
Article 218 of the Labor Code, as amended, when it is established
on the bases of the sworn allegations in the petition that the acts
complained of, involving or arising from any labor dispute before
the Commission, which, if not restrained or performed forthwith,
may cause grave or irreparable damage to any party or render
ineffectual any decision in favor of such party.
x x x
The foregoing ancillary power may be exercised by the Labor
Arbiters only as an incident to the cases pending before them in
order to preserve the rights of the parties during the pendency of
the case, but excluding labor disputes involving strikes or lockout.
[7] (Emphasis Ours)
From the foregoing provisions of law, the power of the NLRC to
issue an injunctive writ originates from “any labor dispute” upon
application by a party thereof, which application if not granted “may
cause grave or irreparable damage to any party or render ineffectual
any decision in favor of such party.”
The term “labor dispute” is defined as “any controversy or matter
concerning terms and conditions of employment or the association
or representation of persons in negotiating, fixing, maintaining,
changing, or arranging the terms and conditions of employment
regardless of whether or not the disputants stand in the proximate
relation of employers and employees.”[8]
The term “controversy” is likewise defined as “a litigated question;
adversary proceeding in a court of law; a civil action or suit, either
at law or in equity; a justiciable dispute.”[9]
A “justiciable controversy” is “one involving an active antagonistic
assertion of a legal right on one side and a denial thereof on the
other concerning a real, and not a mere theoretical question or
issue.”[10]
Taking into account the foregoing definitions, it is an essential
requirement that there must first be a labor dispute between the
contending parties before the labor arbiter. In the present case,
there is no labor dispute between the petitioner and private
respondents as there has yet been no complaint for illegal dismissal
filed with the labor arbiter by the private respondents against the
petitioner.
The petition for injunction directly filed before the NLRC is in
reality an action for illegal dismissal. This is clear from the
allegations in the petition which prays for; reinstatement of private
respondents; award of full backwages, moral and exemplary
damages; and attorney’s fees. As such, the petition should have
been filed with the labor arbiter who has the original and exclusive
jurisdiction to hear and decide the following cases involving all
workers, whether agricultural or nonagricultural:
(1) Unfair labor practice;
(2) Termination disputes;
(3) If accompanied with a claim for reinstatement, those cases that
workers may file involving wages, rates of pay, hours of work and
other terms and conditions of employment;
(4) Claims for actual, moral, exemplary and other forms of damages
arising from the employer-employee relations;
(5) Cases arising from any violation of Article 264 of this Code,
including questions involving the legality of strikes and lockouts;
and
(6) Except claims for employees compensation, social security,
medicare and maternity benefits, all other claims arising from
employer-employee relations, including those of persons in
domestic or household service, involving an amount exceeding five
thousand pesos (P5,000.00), whether or not accompanied with a
claim for reinstatement.[11]
The jurisdiction conferred by the foregoing legal provision to the
labor arbiter is both original and exclusive, meaning, no other
officer or tribunal can take cognizance of, hear and decide any of
the cases therein enumerated. The only exceptions are where the
Secretary of Labor and Employment or the NLRC exercises the
power of compulsory arbitration, or the parties agree to submit the
matter to voluntary arbitration pursuant to Article 263 (g) of the
Labor Code, the pertinent portions of which reads:
“(g) When, in his opinion, there exists a labor dispute causing or
likely to cause a strike or lockout in an industry indispensable to
the national interest, the Secretary of Labor and Employment may
assume jurisdiction over the dispute and decide it or certify the
same to the Commission for compulsory arbitration. Such
assumption or certification shall have the effect of automatically
enjoining the intended or impending strike or lockout as specified in
the assumption or certification order. If one has already taken place
at the time of assumption or certification, all striking or locked out
employees shall immediately resume operations and readmit all
workers under the same terms and conditions prevailing before the
strike or lockout. The Secretary of Labor and Employment or the
Commission may seek the assistance of law enforcement agencies
to ensure compliance with this provision as well as with such
orders as he may issue to enforce the same.
x x x”
On the other hand, the NLRC shall have exclusive appellate
jurisdiction over all cases decided by labor arbiters as provided in
Article 217(b) of the Labor Code. In short, the jurisdiction of the
NLRC in illegal dismissal cases is appellate in nature and, therefore,
it cannot entertain the private respondents’ petition for injunction
which challenges the dismissal orders of petitioner. Article 218(e) of
the Labor Code does not provide blanket authority to the NLRC or
any of its divisions to issue writs of injunction, considering that
Section 1 of Rule XI of the New Rules of Procedure of the NLRC
makes injunction only an ancillary remedy in ordinary labor
disputes”[12]

Thus, the NLRC exceeded its jurisdiction when it issued the


assailed Order granting private respondents’ petition for injunction
and ordering the petitioner to reinstate private respondents.
The argument of the NLRC in its assailed Order that to file an
illegal dismissal suit with the labor arbiter is not an “adequate”
remedy since it takes three (3) years before it can be disposed of, is
patently erroneous. An “adequate” remedy at law has been defined
as one “that affords relief with reference to the matter in
controversy, and which is appropriate to the particular
circumstances of the case.”[13] It is a remedy which is equally
beneficial, speedy and sufficient which will promptly relieve the
petitioner from the injurious effects of the acts complained of.[14]
Under the Labor Code, the ordinary and proper recourse of an
illegally dismissed employee is to file a complaint for illegal
dismissal with the labor arbiter.[15] In the case at bar, private
respondents disregarded this rule and directly went to the NLRC
through a petition for injunction praying that petitioner be enjoined
from enforcing its dismissal orders. In Lamb vs. Phipps,[16] we
ruled that if the remedy is specifically provided by law, it is
presumed to be adequate. Moreover, the preliminary mandatory
injunction prayed for by the private respondents in their petition
before the NLRC can also be entertained by the labor arbiter who,
as shown earlier, has the ancillary power to issue preliminary
injunctions or restraining orders as an incident in the cases
pending before him in order to preserve the rights of the parties
during the pendency of the case.[17]
Furthermore, an examination of private respondents’ petition for
injunction reveals that it has no basis since there is no showing of
any urgency or irreparable injury which the private respondents
might suffer. An injury is considered irreparable if it is of such
constant and frequent recurrence that no fair and reasonable
redress can be had therefor in a court of law,[18] or where there is
no standard by which their amount can be measured with
reasonable accuracy, that is, it is not susceptible of mathematical
computation. It is considered irreparable injury when it cannot be
adequately compensated in
damages due to the nature of the injury itself or the nature of the
right or property injured or when there exists no certain pecuniary
standard for the measurement of damages.[19]
In the case at bar, the alleged injury which private respondents
stand to suffer by reason of their alleged illegal dismissal can be
adequately compensated and therefore, there exists no “irreparable
injury,” as defined above which would necessitate the issuance of
the injunction sought for. Article 279 of the Labor Code provides
that an employee who is unjustly dismissed from employment shall
be entitled to reinstatement, without loss of seniority rights and
other privileges, and to the payment of full backwages, inclusive of
allowances, and to other benefits or their monetary equivalent
computed from the time his compensation was withheld from him
up to the time of his actual reinstatement.
The ruling of the NLRC that the Supreme Court upheld its power to
issue temporary mandatory injunction orders in the case of
ChemoTechnische Mfg., Inc. Employees Union-DFA, et. al. vs.
ChemoTechnische Mfg., Inc. et. al., docketed as G.R. No. 107031, is
misleading. As correctly argued by the petitioner, no such
pronouncement was made by this Court in said case. On January
25, 1993, we issued a Minute Resolution in the subject case stating
as follows:
“Considering the allegations contained, the issues raised and the
arguments adduced in the petition for certiorari, as well as the
comments of both public and private respondents thereon, and the
reply of the petitioners to private respondent’s motion to dismiss the
petition, the Court Resolved to DENY the same for being
premature.”
It is clear from the above resolution that we did not in anyway
sustain the action of the NLRC in issuing such temporary
mandatory injunction but rather we dismissed the petition as the
NLRC had yet to rule upon the motion for reconsideration filed by
petitioner. Thus, the minute resolution denying the petition for
being prematurely filed.
Finally, an injunction, as an extraordinary remedy, is not favored
in labor law considering that it generally has not proved to be an
effective means of settling labor disputes.[20] It has been the policy
of the State to encourage the parties to use the non-judicial process
of negotiation and compromise, mediation and arbitration.[21]
Thus, injunctions may be issued only in cases of extreme necessity
based on legal grounds clearly established, after due consultations
or hearing and when all efforts at conciliation are exhausted which
factors, however, are clearly absent in the present case.
WHEREFORE, the petition is hereby GRANTED. The assailed
Orders dated April 3, 1995 and May 31, 1995, issued by the
National Labor Relations Commission (First Division), in NLRC NCR
IC No. 000563-95, are hereby REVERSED and SET ASIDE.

SO ORDERED.

Regalado, Melo, Puno and Mendoza, JJ., concur.


SPECIAL FIRST DIVISION

[G.R. No. 127598. February 22, 2000]

MANILA ELECTRIC COMPANY, petitioner, vs. Hon. Secretary of


Labor Leonardo Quisumbing and Meralco Employees and
Workers Association (MEWA), respondents.

RESOLUTION

YNARES_SANTIAGO, J.:

In the Decision promulgated on January 27, 1999, the Court


disposed of the case as follows:

"WHEREFORE, the petition is granted and the orders of


public respondent Secretary of Labor dated August 19,
1996 and December 28, 1996 are set aside to the extent
set forth above. The parties are directed to execute a
Collective Bargaining Agreement incorporating the terms
and conditions contained in the unaffected portions of
the Secretary of Labors orders of August 19, 1996 and
December 28, 1996, and the modifications set forth
above. The retirement fund issue is remanded to the
Secretary of Labor for reception of evidence and
determination of the legal personality of the Meralco
retirement fund."[1]

The modifications of the public respondents resolutions include the


following:

January 27, 1999 decision Secretarys resolution


Wages -P1,900.00 for 1995-96 P2,200.00
Xmas bonus -modified to one month 2 months
Retirees -remanded to the Secretary granted
Loan to coops -denied granted
GHSIP, HMP
and Housing loans -granted up to P60,000.00 granted
Signing bonus -denied granted
Union leave -40 days (typo error) 30 days
High voltage/pole -not apply to those who are members
of a team
not exposed to the risk
Collectors -no need for cash bond, no
need to reduce quota and MAPL
CBU -exclude confidential employees include
Union security -maintenance of membership closed shop
Contracting out -no need to consult union consult first
All benefits -existing terms and conditions all terms
Retroactivity -Dec 28, 1996-Dec 27, 199(9) from Dec 1,
1995
Dissatisfied with the Decision, some alleged members of private
respondent union (Union for brevity) filed a motion for intervention
and a motion for reconsideration of the said Decision. A separate
intervention was likewise made by the supervisors union
(FLAMES[2]) of petitioner corporation alleging that it has bona
fide legal interest in the outcome of the case.[3] The Court required
the "proper parties" to file a comment to the three motions for
reconsideration but the Solicitor-General asked that he be excused
from filing the comment because the "petition filed in the instant
case was granted" by the Court.[4] Consequently, petitioner filed its
own consolidated comment. An "Appeal Seeking Immediate
Reconsideration" was also filed by the alleged newly elected
president of the Union.[5] Other subsequent pleadings were filed by
the parties and intervenors.

The issues raised in the motions for reconsideration had already


been passed upon by the Court in the January 27, 1999 decision.
No new arguments were presented for consideration of the Court.
Nonetheless, certain matters will be considered herein, particularly
those involving the amount of wages and the retroactivity of the
Collective Bargaining Agreement (CBA) arbitral awards.
Petitioner warns that if the wage increase of P2,200.00 per month
as ordered by the Secretary is allowed, it would simply pass the cost
covering such increase to the consumers through an increase in the
rate of electricity. This is a non sequitur. The Court cannot be
threatened with such a misleading argument. An increase in the
prices of electric current needs the approval of the appropriate
regulatory government agency and does not automatically result
from a mere increase in the wages of petitioners employees.
Besides, this argument presupposes that petitioner is capable of
meeting a wage increase. The All Asia Capital report upon which the
Union relies to support its position regarding the wage issue can
not be an accurate basis and conclusive determinant of the rate of
wage increase. Section 45 of Rule 130 Rules of Evidence provides:

"Commercial lists and the like. - Evidence of statements of


matters of interest to persons engaged in an occupation
contained in a list, register, periodical, or other published
compilation is admissible as tending to prove the truth of
any relevant matter so stated if that compilation is
published for use by persons engaged in that occupation
and is generally used and relied upon by them therein."

Under the afore-quoted rule, statement of matters contained in a


periodical may be admitted only "if that compilation is published for
use by persons engaged in that occupation and is generally used
and relied upon by them therein." As correctly held in our Decision
dated January 27, 1999, the cited report is a mere newspaper
account and not even a commercial list. At most, it is but an
analysis or opinion which carries no persuasive weight for purposes
of this case as no sufficient figures to support it were presented.
Neither did anybody testify to its accuracy. It cannot be said that
businessmen generally rely on news items such as this in their
occupation. Besides, no evidence was presented that the
publication was regularly prepared by a person in touch with the
market and that it is generally regarded as trustworthy and reliable.
Absent extrinsic proof of their accuracy, these reports are not
admissible.[6] In the same manner, newspapers containing stock
quotations are not admissible in evidence when the source of the
reports is available.[7] With more reason, mere analyses or
projections of such reports cannot be admitted. In particular, the
source of the report in this case can be easily made available
considering that the same is necessary for compliance with certain
governmental requirements.

Nonetheless, by petitioners own allegations, its actual total net


income for 1996 was P5.1 billion. [8] An estimate by the All Asia
financial analyst stated that petitioners net operating income for the
same year was about P5.7 billion, a figure which the Union relies on
to support its claim. Assuming without admitting the truth thereof,
the figure is higher than the P4.171 billion allegedly suggested by
petitioner as its projected net operating income. The P5.7 billion
which was the Secretarys basis for granting the P2,200.00 is higher
than the actual net income of P5.1 billion admitted by petitioner. It
would be proper then to increase this Courts award of P1,900.00 to
P2,000.00 for the two years of the CBA award. For 1992, the agreed
CBA wage increase for rank-and-file was P1,400.00 and was
reduced to P1,350.00, for 1993; further reduced to P1,150.00 for
1994. For supervisory employees, the agreed wage increase for the
years 1992-1994 are P1,742.50, P1,682.50 and P1,442.50,
respectively. Based on the foregoing figures, the P2,000.00 increase
for the two-year period awarded to the rank-and-file is much higher
than the highest increase granted to supervisory employees. [9] As
mentioned in the January 27, 1999 Decision, the Court does "not
seek to enumerate in this decision the factors that should affect
wage determination" because collective bargaining disputes
particularly those affecting the national interest and public service
"requires due consideration and proper balancing of the interests of
the parties to the dispute and of those who might be affected by the
dispute."[10] The Court takes judicial notice that the new amounts
granted herein are significantly higher than the weighted average
salary currently enjoyed by other rank-and-file employees within
the community. It should be noted that the relations between labor
and capital is impressed with public interest which must yield to
the common good.[11] Neither party should act oppressively against
the other or impair the interest or convenience of the public.
[12]
Besides, matters of salary increases are part of management
prerogative.[13]
On the retroactivity of the CBA arbitral award, it is well to recall
that this petition had its origin in the renegotiation of the parties
1992-1997 CBA insofar as the last two-year period thereof is
concerned. When the Secretary of Labor assumed jurisdiction and
granted the arbitral awards, there was no question that these
arbitral awards were to be given retroactive effect. However, the
parties dispute the reckoning period when retroaction shall
commence. Petitioner claims that the award should retroact only
from such time that the Secretary of Labor rendered the award,
invoking the 1995 decision in Pier 8 case[14] where the Court,
citing Union of Filipino Employees v. NLRC,[15] said:

"The assailed resolution which incorporated the CBA to


be signed by the parties was promulgated on June 5,
1989, the expiry date of the past CBA. Based on the
provision of Section 253-A, its retroactivity should be
agreed upon by the parties. But since no agreement to
that effect was made, public respondent did not abuse its
discretion in giving the said CBA a prospective effect. The
action of the public respondent is within the ambit of its
authority vested by existing law."

On the other hand, the Union argues that the award should
retroact to such time granted by the Secretary, citing the 1993
decision of St Lukes.[16]

"Finally, the effectivity of the Order of January 28, 1991,


must retroact to the date of the expiration of the previous
CBA, contrary to the position of petitioner. Under the
circumstances of the case, Article 253-A cannot be
properly applied to herein case. As correctly stated by
public respondent in his assailed Order of April 12, 1991
dismissing petitioners Motion for Reconsideration---

Anent the alleged lack of basis for the


retroactivity provisions awarded, we would
stress that the provision of law invoked by the
Hospital, Article 253-A of the Labor Code,
speaks of agreements by and between the
parties, and not arbitral awards . . .

"Therefore, in the absence of a specific provision of law


prohibiting retroactivity of the effectivity of arbitral
awards issued by the Secretary of Labor pursuant to
Article 263(g) of the Labor Code, such as herein involved,
public respondent is deemed vested with plenary and
discretionary powers to determine the effectivity thereof."

In the 1997 case of Mindanao Terminal,[17] the Court applied the St.
Lukes doctrine and ruled that:

"In St. Lukes Medical Center v. Torres, a deadlock also


developed during the CBA negotiations between
management and the union. The Secretary of Labor
assumed jurisdiction and ordered the retroaction of the
CBA to the date of expiration of the previous CBA. As in
this case, it was alleged that the Secretary of Labor
gravely abused its discretion in making his award
retroactive. In dismissing this contention this Court held:

"Therefore, in the absence of a specific


provision of law prohibiting retroactive of the
effectivity of arbitral awards issued by the
Secretary of Labor pursuant to Article 263(g) of
the Labor Code, such as herein involved,
public respondent is deemed vested with
plenary and discretionary powers to determine
the effectivity thereof."

The Court in the January 27, 1999 Decision, stated that the CBA
shall be "effective for a period of 2 years counted from December 28,
1996 up to December 27, 1999." Parenthetically, this actually
covers a three-year period. Labor laws are silent as to when an
arbitral award in a labor dispute where the Secretary had assumed
jurisdiction by virtue of Article 263 (g) of the Labor Code shall
retroact. In general, a CBA negotiated within six months after the
expiration of the existing CBA retroacts to the day immediately
following such date and if agreed thereafter, the effectivity depends
on the agreement of the parties. [18] On the other hand, the law is
silent as to the retroactivity of a CBA arbitral award or that granted
not by virtue of the mutual agreement of the parties but by
intervention of the government. Despite the silence of the law, the
Court rules herein that CBA arbitral awards granted after six
months from the expiration of the last CBA shall retroact to such
time agreed upon by both employer and the employees or their
union. Absent such an agreement as to retroactivity, the award
shall retroact to the first day after the six-month period following
the expiration of the last day of the CBA should there be one. In the
absence of a CBA, the Secretarys determination of the date of
retroactivity as part of his discretionary powers over arbitral awards
shall control.

It is true that an arbitral award cannot per se be categorized as an


agreement voluntarily entered into by the parties because it
requires the interference and imposing power of the State thru the
Secretary of Labor when he assumes jurisdiction. However, the
arbitral award can be considered as an approximation of a collective
bargaining agreement which would otherwise have been entered
into by the parties.[19] The terms or periods set forth in Article 253-A
pertains explicitly to a CBA. But there is nothing that would prevent
its application by analogy to an arbitral award by the Secretary
considering the absence of an applicable law. Under Article 253-A:
"(I)f any such agreement is entered into beyond six months, the
parties shal! agree on the duration of retroactivity thereof." In other
words, the law contemplates retroactivity whether the agreement be
entered into before or after the said six-month period. The
agreement of the parties need not be categorically stated for their
acts may be considered in determining the duration of retroactivity.
In this connection, the Court considers the letter of petitioners
Chairman of the Board and its President addressed to their
stockholders, which states that the CBA "for the rank-and-file
employees covering the period December 1, 1995 to November 30,
1997 is still with the Supreme Court," [20] as indicative of petitioners
recognition that the CBA award covers the said period. Earlier,
petitioners negotiating panel transmitted to the Union a copy of its
proposed CBA covering the same period inclusive. [21] In addition,
petitioner does not dispute the allegation that in the past CBA
arbitral awards, the Secretary granted retroactivity commencing
from the period immediately following the last day of the expired
CBA. Thus, by petitioners own actions, the Court sees no reason to
retroact the subject CBA awards to a different date. The period is
herein set at two (2) years from December 1, 1995 to November 30,
1997.

On the allegation concerning the grant of loan to a cooperative,


there is no merit in the unions claim that it is no different from
housing loans granted by the employer. The award of loans for
housing is justified because it pertains to a basic necessity of life. It
is part of a privilege recognized by the employer and allowed by law.
In contrast, providing seed money for the establishment of the
employees cooperative is a matter in which the employer has no
business interest or legal obligation. Courts should not be utilized
as a tool to compel any person to grant loans to another nor to force
parties to undertake an obligation without justification. On the
contrary, it is the government that has the obligation to render
financial assistance to cooperatives and the Cooperative Code does
not make it an obligation of the employer or any private individual.
[22]

Anent the 40-day union leave, the Court finds that the same is a
typographical error. In order to avoid any confusion, it is herein
declared that the union leave is only thirty (30) days as granted by
the Secretary of Labor and affirmed in the Decision of this Court.

The added requirement of consultation imposed by the Secretary in


cases of contracting out for six (6) months or more has been
rejected by the Court. Suffice it to say that the employer is allowed
to contract out services for six months or more. However, a line
must be drawn between management prerogatives regarding
business operations per se and those which affect the rights of
employees, and in treating the latter, the employer should see to it
that its employees are at least properly informed of its decision or
modes of action in order to attain a harmonious labor-management
relationship and enlighten the workers concerning their rights.
[23]
Hiring of workers is within the employers inherent freedom to
regulate and is a valid exercise of its management prerogative
subject only to special laws and agreements on the matter and the
fair standards of justice.[24] The management cannot be denied the
faculty of promoting efficiency and attaining economy by a study of
what units are essential for its operation. It has the ultimate
determination of whether services should be performed by its
personnel or contracted to outside agencies. While there should be
mutual consultation, eventually deference is to be paid to what
management decides.[25] Contracting out of services is an exercise of
business judgment or management prerogative. [26] Absent proof that
management acted in a malicious or arbitrary manner, the Court
will not interfere with the exercise of judgment by an employer. [27] As
mentioned in the January 27, 1999 Decision, the law already
sufficiently regulates this matter.[28] Jurisprudence also provides
adequate limitations, such that the employer must be motivated by
good faith and the contracting out should not be resorted to
circumvent the law or must not have been the result of malicious or
arbitrary actions.[29] These are matters that may be categorically
determined only when an actual suit on the matter arises.

WHEREFORE, the motion for reconsideration is partially granted


and the assailed Decision is modified as follows: (1) the arbitral
award shall retroact from December 1, 1995 to November 30, 1997;
and (2) the award of wage is increased from the original amount of
One Thousand Nine Hundred Pesos (P1,900.00) to Two Thousand
Pesos (P2,000.00) for the years 1995 and 1996. This Resolution is
subject to the monetary advances granted by petitioner to its rank-
and-file employees during the pendency of this case assuming such
advances had actually been distributed to them. The assailed
Decision is AFFIRMED in all other respects.

SO ORDERED.

Davide, Jr., C.J., (Chairman), Melo, Kapunan, and Pardo, JJ., concur.
DIVISION [ GR No. 55159, Dec 22, 1989 ]

PHILIPPINE AIRLINES v. NLRC +

DECISION

259 Phil. 1039

CORTES, J.:
Petitioner impugns in this petition for certiorari that part of the
public respondent National Labor Relations Commission's (NLRC)
decision in NLRC Case No. RB-IV-9319-77 which ordered petitioner
to restore private respondent Dolina to its payroll, and to pay his
salaries from 1 April 1979 "until this case is finally resolved"
[Rollo, p. 33.] Petitioner contends that public respondent NLRC
gravely abused its discretion considering that in the same decision
public respondent affirmed the decision of the Labor
Arbiter in toto granting respondent's application for clearance to
dismiss the private respondent.
The pertinent facts are as follows:
Private respondent Dolina was admitted to the Philippine Airlines
(PAL) aviation School for training as a pilot beginning 16 January
1973. The training agreement bound PAL to provide regular and
permanent employment to Dolina upon completion of the training
course. On 25 January 1974, Dolina completed the course, and
undertook an equipment qualification course up to 4 October
1974. On 9 October 1974, the Civil Aeronautics Administration
issued him a license as Commercial Pilot and PAL then extended
him a temporary appointment for six (6) months as Limited First
Officer. When his appointment was due to expire on 30 April
1975, Dolina had only logged eighty four (84) hours and fifty five
(55) minutes flying time, short of the minimum 500 flying hours
required for regularization as First Officer. To enable him to
complete the requirement, his employment was extended
for another six months which appointment was described as
"permanent." On 31 October 1975, when his appointment was
again due to expire, he was still short of the minimum flying time
requirement such that his appointment was again extended up to
30 April 1976. During this third extension of his
appointment, Dolinacompleted the 500 flying hours requirement,
and thus on 31 March 1976 he applied for regularization as First
Officer. Pending his physical examination by the chief Flight
Surgeon, his appointment was again extended to 31 October
1976. On 17 August 1976, Dolinatook a psychological examination
wherein his "Adaptability Rating" was found to be "unacceptable"
[Annex "L" to the Petition, p. 8; Rollo, p. 116.] On 23 September
1976, complainant was again subjected to an examination and
interview by the Pilot Acceptance Qualifications Board as part of the
regularization process, which examination revealed the following:
* * *
b. Armando Dolina - After thorough evaluation of the candidate's
past records, his performance and the result of his medical
examination as submitted by the Medical Sub?Department, the
Board finds Mr. A. Dolina not qualified for regular employment in
the Company.
* * *
[NLRC Decision, pp. 3-4; Rollo, pp. 25-26.]
Conformably, the Board recommended the termination of the
complainant pursuant to which PAL filed a clearance application
[Rollo, p. 34] for Dolina's termination. In the
meantime Dolina was placed under preventive suspension effective
1 October 1976. Dolina countered with a complaint for illegal
dismissal on 6 October 1976 [Rollo, p. 35.] On 26 January 1977 the
Officer-in-Charge of the Department of Labor Regional Office No. IV
lifted the preventive suspension, and ordered petitioner to
reinstate Dolina to his former position with full backwages from 1
October 1976 up to actual reinstatement. The issue of termination
and damages was referred to the Executive Labor Arbiter for
compulsory arbitration [Rollo, p. 71.]
Petitioner appealed the order lifting Dolina's suspension to the
Secretary of Labor. However, on 2 March 1977, pending the
resolution of petitioner's appeal, the parties signed an agreement
before the Undersecretary of Labor, the terms of which are as
follows:
AGREEMENT
The undersigned parties hereby agree to the following:
1. While pending final resolution of the complaint of Mr.
Armando Dolina against the Philippine Airlines, he shall be
considered in the payroll effective 1 October 1976.
2. The order of Regional Director Vicente Leogardo for the
reinstatement with backwages of Mr. Dolina is hereby rendered
moot and academic.
3. The parties shall consider this arrangement pending final
resolution of the case by arbitration.
* * *
Subsequently, on 30 May 1977, the Acting Secretary of Labor
issued an order finding that the propriety of the suspension had
been rendered moot and academic by the above agreement and
referred the case for compulsory arbitration to the Executive Labor
Arbiter [Annex "J" to the Petition; Rollo, p. 85.] On 23 March 1979,
the Labor Arbiter rendered its decision, the dispositive portion of
which reads as follows:
IN VIEW OF ALL THE FOREGOING, it is our considered opinion
that there is merit on the application for clearance, and therefore,
the same should be as it is hereby GRANTED. Consequently,
the oppositor's TERMINATION IS IN ORDER.
Since the termination is upheld, perforce the claim for moral
damages is denied. Besides pursuant to P.D. No. 1367 dated May
1, 1978, this office is devoid of jurisdiction to entertain said claim.
SO ORDERED. [Decision of Labor Arbiter, p. 12; Rollo, p. 97.]
By virtue of the above decision, PAL removed Dolina from its payroll
effective 1 April 1979. Dolina then appealed the Labor Arbiter's
decision to the public respondent NLRC on 29 April 1979 and there
filed a motion praying that PAL be ordered to return him
to PAL'spayroll, contending that the Labor Arbiter's decision was
not yet final because of his timely appeal. PAL opposed the motion
claiming that it was no longer obliged to return Dolina to its payroll
since the decision of the Labor Arbiter dated 23 March 1979 in its
favor was a final resolution of the case by arbitration [Annex "N" to
the Petition, p. 1; Rollo, p. 137.]
On 8 February 1980, public respondent NLRC rendered its decision
containing the assailed portion to wit:
* * *
In fine it is our considered view that the respondent's application
for clearance to dismiss the complainant has sufficiently
surmounted the test of validity.
Be that as it may, we are not in accord with the discontinuation of
the payment of complainant's salaries. The agreement of the
parties stipulated in no uncertain terms that the complainant
[Dolina] is to be carried in respondent's payroll until this case is
finally resolved. As things stand, the main issue is still being
litigated. The complainant, therefore, must be restored to the
payroll and paid for his salaries from 1 April 1979, the date he was
dropped from the respondent's payroll.
WHEREFORE, the Decision appealed from should be as it is hereby
affirmed in toto. However the respondent is ordered to restore the
complainant to its payroll and to pay his salaries from 1 April 1979
until this case is finally resolved.
SO ORDERED. [NLRC Decision, pp. 10-11; Rollo, pp. 32-33;
Underscoring supplied.]
Hence, this petition, with a prayer for a temporary restraining
order. The Court issued a temporary restraining order on 10
October 1980. Private respondent Dolina failed to file his comment
and the Solicitor General submitted his own Comment supporting
the stand of petitioner. Due to the adverse stand of the Solicitor
General, public respondent NLRC submitted its own Comment.
The issue before the Court is whether or not the NLRC committed
grave abuse of discretion in holding that private
respondent Dolina was entitled to his salaries from 1 April 1979
"until this case is finally resolved."
PAL contends that inasmuch as the respondent Commission
acting en banc had affirmed in toto the decision of the Labor Arbiter
granting petitioner the clearance for the dismissal of private
respondent Dolina, it is an act of grave abuse of discretion
amounting to lack of jurisdiction on its part to order petitioner to
pay private respondent's salaries from 1 April 1979 until the case is
finally terminated. PAL contends that said stipulation refers only to
the resolution of the case by arbitration and said arbitration of the
case was terminated when the Labor Arbiter rendered its decision
dated 23 March 1979. PAL argues that the arbitration of the case is
limited to and comprises merely the proceedings before the Labor
Arbiter such that when the latter renders a decision, arbitration of
the dispute is terminated.
Public respondent NLRC on the other hand contends that
arbitration is a continuing process from the time the case is referred
by the Secretary of Labor to the Arbitration Branch until the final
judgment is had on appeal. Since the Labor Arbiter's decision in
favor of petitioner did not finally resolve the case in view of the
timely appeal by private respondent from said decision, the case
was not yet finally terminated by arbitration and Dolina is entitled
to be placed in petitioner's payroll until the complaint is finally
resolved.
The above contentions call for the proper interpretation of the
agreement between the parties, specifically the third stipulation
containing the clause "pending final resolution of the case by
arbitration."
It is a basic rule in interpretation of contracts that the
circumstances under which an instrument was made, including
the situation of the subject thereof and the parties to it, may be
considered so that the intention of the contracting parties may
be judged correctly [Art. 1371, Civil Code of the Philippines; Section
11, Rule 130, Rules of Court; Lim v. Court of Appeals, G.R. No. L-
40258, September 11, 1980, 99 SCRA 668.] In the instant case, the
stipulation in the 2 March 1977 agreement that Dolina shall be
included in the payroll of PAL until final resolution of the case by
arbitration was intended to supersede the order of the Regional
Director which, by stipulation of the parties, was rendered moot
and academic. In lieu of reinstatement and the payment of
his backwages, private respondent was included in
petitioner's payroll, effective from the time he was preventively
suspended until final resolution of the case by arbitration, without
having to perform any work for the petitioner. In entering into the
agreement, the parties could not have intended to include in the
clause "final resolution of the case by arbitration" the whole
adjudicatory process, including appeal. For if it were so, even
proceedings on certioraribefore this Court would be embraced by the
term "arbitration" and private respondent will continue to receive
monthly salary without rendering any service to the petitioner
regardless of the outcome of the proceedings before the Labor
Arbiter, for as long as one of the parties appeal to the NLRC and
until the case is finally resolved by this Court. This is clearly an
absurdity which could not have been contemplated by the parties.
Neither can proceedings on appeal before the NLRC en banc be
considered as part of the arbitration proceeding. In its broad sense,
arbitration is the reference of a dispute to an impartial third person,
chosen by the parties or appointed by statutory authority to hear
and decide the case in controversy [Chan Linte v. Law Union and
Rock, Ins. Co., 42 Phil. 548 (1921).] When the consent of one of the
parties is enforced by statutory provisions, the proceeding is
referred to as compulsory arbitration. In labor cases, compulsory
arbitration is the process of settlement of labor disputes by a
government agency which has the authority to investigate and to
make an award which is binding on all the parties [See Wood v.
Seattle, 23 Wash. 1, 62 P 135, 52 LRA 369 (1920); Amalgamated
Association v. Wisconsin Employees' Relations Board, 340 U.S.
383-410, 95 L. Ed. 381 (1951).] Under the Labor Code, it is the
Labor Arbiter who is clothed with the authority to conduct
compulsory arbitration on cases involving termination disputes
[Article 217, Pres. Decree No. 442, as amended.] When the Labor
Arbiter renders his decision, compulsory arbitration is deemed
terminated because by then the hearing and determination of the
controversy has ended. Any appeal raised by an aggrieved party
from the Labor Arbiter's decision is already beyond the scope of
arbitration since in the appeal stage, the NLRC en banc merely
reviews the Labor Arbiter's decision for errors of fact or law and no
longer duplicates the proceedings before the Labor Arbiter. Thus,
the clause "pending final resolution of the case by arbitration"
should be understood to be limited only to the proceedings before
the Labor Arbiter, such that when the latter rendered his decision,
the case was finally resolved by arbitration.
More important, however, is the fact that the NLRC's order for the
continued payment of Dolina's salaries is inconsistent with
its affirmance of the Labor Arbiter's decision upholding the validity
of Dolina's dismissal. In affirming the Labor Arbiter's decision
granting the termination clearance, the NLRC held that:
With respect to the issue of whether or not the complainant's
[Dolina] dismissal was sufficiently grounded, we are not persuaded
that the respondent [herein petitioner PAL] is under obligation to
employ him as regular employee simply because he was certified
physically fit and technically proficient by the CAA.
This is understandable for it concerns the safety of its properties,
and above all, the safety of the lives and properties of its
passengers, which by law it is committed to transport safely. In the
absence, therefore, of any showing that its standards are
unreasonable and discriminatory, which we do not find
here, We cannot disturb them. We can only say that for exercising
extraordinary diligence in the selection of its pilots, We join the
public in commending it.
* * *
In fine, it is Our considered view that the respondent's application
for clearance to dismiss the complainant has sufficiently
surmounted the test of validity.
In view of the above finding of valid dismissal, the NLRC had no
authority to order the continued payment of Dolina's salaries from 1
April 1979 until the case is finally resolved. The NLRC's order
would result in compensating Dolina for services no longer rendered
and when he is no longer in PAL's employ. This is contrary to the
age-old rule of "a fair day's wage for a fair day's labor" which
continues to govern the relation between labor and capital and
remains a basic factor in determining employees' wages
[Durabilt Recapping Plant & Co. v. National Labor Relations
Commission, G.R. No. 76746, July 27, 1987, 152 SCRA 328.] So
that, if there is no work performed by the employee there can be no
wage or pay unless the laborer was able, willing and ready to work
but was prevented by management or was illegally locked out,
suspended or dismissed. Where the employee's dismissal was
for a just cause, it would neither be fair nor just to allow the
employee to recover something he has not earned and could not
have earned [Santos v. National Labor Relations Commission, G.R.
No. 76721, September 21, 1987, 154 SCRA 166.]
Moreover, in ordering the continued payment of Dolina's salaries
from 1 April 1979 until the case is finally resolved, the NLRC in
effect ordered the payment of backwages to Dolina notwithstanding
its finding of a valid dismissal.
This is clearly untenable.
In the first place, backwages in general are granted on grounds of
equity for earnings which a worker or employee has lost due to his
illegal dismissal [New Manila Candy Workers Union (NACONWA-
PAFLU) v. Court of Industrial Relations, G.R. No. L-29728, October
30, 1978, 86 SCRA 37; Durabilt Recapping Plant & Co. v. National
Labor Relations Commission, supra; Chong Guan Trading v.
National Labor Relations Commission, G.R. No. 81471, April 26,
1989; Santos v. National Labor Relations
Commission, supra.] Where, as in this case, the dismissal was
for a just cause, there is no factual or legal basis for ordering the
payment of backwages. The order of the NLRC for the continued
payment of Dolina's salaries would allow the latter to unjustly
enrich himself at the expense of the petitioner. This Court has
reiterated time and again that the law, in protecting the rights of
the laborer, authorizes neither oppression nor self-destruction of
the employer [Colgate Palmolive Philippines, Inc. v. Ople, G.R. No.
73681, June 30, 1988, 163 SCRA 323.] In this case, the NLRC
chose not to adhere with fidelity to this doctrine.
Secondly, NLRC's order for continued payment of Dolina's salary
from 1 April 1979 up to the final resolution of the case would
place Dolina in a better position than those workers who were
found to have been illegally dismissed by their employer. For in the
latter case, the backwages that can be recovered by the worker is
limited to three years [Mercury Drug Co., Inc. v. Court of Industrial
Relations, G.R. No. L-23357, April 30, 1974, 56 SCRA 694;
Philippine Airlines, Inc. v. National Labor Relations Commission,
G.R. No. 64809, November 29, 1983, 126 SCRA 223; Madrigal &
Co., Inc. v. Zamora, G.R. No. L-48237, Madrigal & Co., Inc. v.
Minister of Labor, G.R. No. L-49023, June 30, 1987] while Dolina,
whose dismissal was found to be valid, can recover approximately
ten years backwages, which corresponds to the period from 1 April
1979 until "final resolution" of the instant case.
Considering the foregoing, the Court holds that
respondent NLRC's order for the continued payment
of Dolina's salaries from "1 April 1979 until the case is finally
resolved" is contrary to law and established jurisprudence and the
NLRC acted in excess of its jurisdiction in issuing the assailed
order. In the recent case of Llora Motors, Inc. v. Drilon, G.R. No.
82895, November 7, 1989 the Court held as an act without or in
excess of jurisdiction the portion of the Labor Arbiter's award,
which required the employer to pay to its employee an amount
equivalent to a half month's pay for every year of service as
retirement benefits, for being without basis either in law or
contract. Similarly, there is in this case an excess of jurisdiction on
the part of the NLRC in ordering the continued payment
of Dolina's salaries "from 1 April 1979 until the case is finally
resolved."
WHEREFORE, that part of the dispositive portion of the decision of
the National Labor Relations Commission in NLRC CASE NO. RB-
IV-9319-77 requiring petitioner to restore private respondent to its
payroll and ordering the payment of his salaries from 1 April 1979
until the case is finally resolved is hereby declared NULL and VOID
and SET ASIDE. The temporary Restraining Order issued by the
Court on 10 October 1980 is made PERMANENT.
SO ORDERED.

DIVISION

[ GR No. 106231, Nov 16, 1994 ]

HAWAIIAN-PHILIPPINE COMPANY v. REYNALDO J. GULMATICO +

DECISION

BIDIN, J.:
This petition for certiorari and prohibition with preliminary
injunction seeks to annul the Order dated June 29, 1992 issued by
public respondent Labor Arbiter Reynaldo J. Gulmatico denying
petitioner's motion to dismiss respondents' complaint for "Claims
on R.A. 809" in RAB VI Case No. 06-07-10256-89, the dispositive
portion of which reads, in part:
"WHEREFORE, premises considered, the motion to dismiss dated
July 31, 1989 and the supplement thereto dated September 19,
1989 filed by respondent company together with the motion to
dismiss filed by respondent Ramon Jison dated August 27, 1990
and Francisco Jison dated September 20, 1990, respectively, are
hereby DENIED.
xxx xxx xxx" (Rollo, p. 59)
The antecedent facts are as follows:
On July 4, 1989, respondent union, the National Federation of
Sugar Workers-Food and General Trades (NFSW-FGT) filed RAB VI
Case No. 06-07-10256-89 against herein petitioner Hawaiian-
Philippine Company for claims under Republic Act 809 (The Sugar
Act of 1952). Respondent union claimed that the sugar farm
workers within petitioner's milling district have never availed of the
benefits due them under the law.
Under Section 9 of R.A. 809, otherwise known as the Sugar Act of
1952, it is provided, to wit:
"Sec. 9. In addition to the benefits granted by the Minimum Wage
Law, the proceeds of any increase in participation granted to
planters under this Act and above their present
share shall be divided between the planter and his laborers in the fo
llowingproportions;
"Sixty per centum of the increase participation for the laborers and
forty per centum for the planters. The distribution of the share
corresponding to the laborers shall be made under the supervision
of the Department of Labor.
"x x x" (Emphasis
supplied.)
On July 31, 1989, petitioner filed a "Motion to Dismiss," followed by
a "Supplemental Motion to Dismiss" on September 19, 1989.
Petitioner contended that public respondent Labor Arbiter has no
jurisdiction to entertain and resolve the case, and that respondent
union has no cause of action against petitioner.
On August 23, 1989, respondent union filed an "Opposition to
Motion to Dismiss."
On October 3, 1989, petitioner filed a "Reply to Opposition" followed
by a "Citation of Authorities in Support of Motion to Dismiss."
On December 20, 1989, respondent union filed an amended
complaint, additionally impleading as complainants Efren Elaco,
Bienvenido Gulmatico, Alberto Amacio, Narciso Vasquez, Mario
Casociano and all the other farm workers of the sugar planters
milling with petitioner from 1979 up to the present, and as
respondents, Jose Maria Regalado, Ramon Jison, Rolly Hernaez,
Rodolfo Gamboa, Francisco Jison and all other sugar planters
milling their canes with petitioner from 1979 up to the present.
On August 27, 1990, Ramon Jison, one of the respondents
impleaded in the amended complaint, filed a "Motion to Dismiss
and/or to Include Necessary Parties," praying for the inclusion as
co-respondents of the Asociacion de Hacenderos de Silan-Saravia,
Inc. and the Associate Planters of Silay-Saravia, Inc.
On June 29, 1992, public respondent promulgated the assailed
Order denying petitioner's Motion to Dismiss and Supplemental
Motion to Dismiss.
Hence, this petition filed by Hawaiian-Philippine Company.
Petitioner reasserts the two issues earlier raised in its Motion to
Dismiss which public respondent unfavorably resolved in the
assailed Order.
These two issues are first, whether public respondent Labor Arbiter
has jurisdiction to hear and decide the case against petitioner; and
second, whether respondent union and/or the farm workers
represented by it have a cause of action against petitioner.
Petitioner contends that the complaint filed against it cannot be
categorized under any of the cases falling within the jurisdiction of
the Labor Arbiter as enumerated in Article 217 of the Labor Code,
as amended, considering that no employer-employee relationship
exists between petitioner milling company and the farm workers
represented by respondent union. Article 217 of the Labor Code
provides:
"Article 217. Jurisdiction of Labor Arbiters and the Commission. -
(a) Except as otherwise provided under this Code, the Labor
Arbiters shall have original and exclusive jurisdiction to hear and
decide, within thirty (30) calendar days after the submission of the
case by the parties for decision without extension, even in the
absence of stenographic notes, the following cases involving all
workers, whether agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases
that workers may file involving wages, rates of pay, hours of work
and other terms and conditions of employment;
4. Claims for actual, moral, exemplary and other forms of
damages arising from employer-employee relations;
5. Cases arising from any violation of Article 264 of this Code,
including questions involving the legality of strikes and lockouts;
and
6. Except claims for employees' compensation, social security,
medicare from maternity
benefits, all other claims arising fromemployer-employee relations,
including those of persons in domestic or household service,
involving an amount exceeding Five Thousand Pesos (P5,000.00),
whether or not accompanied with a claim for reinstatement."
(Emphasis supplied)
In support of its contention that the Labor Arbiter has no
jurisdiction to hear and decide the case against petitioner, the latter
cites the ruling
in San Miguel Corporation vs. NLRC, 161 SCRA 719 [1988],
wherein it was held that a single unifying element runs through the
cases and disputes falling under the jurisdiction of the Labor
Arbiter and that is that all the enumerated cases and disputes arise
out of or are in connection with an employer-employee relationship,
or some aspect or incident of such relationship. Likewise,
in Federation of FreeFarmers vs. Court of Appeals, 107 SCRA 411 [
1981], this Court held that:
"x x x. From the beginning of the sugar industry, the centrals have
never had any privity with the plantation laborers, since they had
their own laborers to take care of. x x
x Nowhere in Republic Act 809 (the Sugar Act of 1952) can we find
anything that creates anyrelationship between the laborers of the pl
anters and the centrals. x x x.""x x
x Under no principle of law or equity can we impose on the central x
x x any liability to the plantation laborers. x x x." (Emphasis
supplied)
On the strength of the aforecited authorities, petitioner contends
that it is not a proper party and has no involvement in the case filed
by respondent union as it is not the employer of the respondent
sugar workers.
Furthermore, to bolster its contention, petitioner cites the Rules
and Regulations Implementing RA 809 issued by the then Wage
Administration Service pursuant to the Administrative Order of the
Labor Secretary dated October 1, 1952. Section 1 thereof states:
"Section 1. The payment of the proceeds derived from the sixty per
centum of any increase in the participation due the laborers shall
be directly paid to the individual laborer concerned at the end of
each milling
season by his respective planter under the Supervisionof the Secret
ary of Labor or his duly authorized representative by means of
payrolls prepared by said planter." (Emphasis supplied)
In addition, under Letter of Instruction No. 854 dated May 1, 1979,
it is provided:
"1. Payment subject to supervision. The workers' share shall be
paid directly by the planter concerned to the workers or claimants
entitled thereto subject to the supervision of the Minister of Labor
or his duly designated representative."The responsibility for the
payment of the sugar workers' benefits under R.A. 809 was
categorically ruled upon in
the Federation of FreeFarmers case, supra., to wit:"x x
x the matter of paying the plantation laborers of the respective plant
ers becomes exclusively the concern of the planters, thelaborers an
d the Department of Labor. Under no principle of law or equity can
we impose on the Central here VICTORIAS anyliability to the respec
tive plantation laborers, should any of their respective planters?
employers fail to pay their legal share. After all, since under the law
it is the Department of Labor which is the office directly called upon
to supervise such payment, it is but reasonable to maintain that if
any blame is to be fixed for the unfortunate situation of the unpaid
laborers, the same should principally be laid on the planters and
secondarily on the Department of Labor, but surely never on the
central.
"Whatever liability there exists in favor of the plantation laborers sh
ould be pinned on the PLANTERS, their respective employers."
(Emphasis supplied)
On the other hand, public respondent and respondent union
maintain the position that privity exists between petitioner and the
sugar workers. Actually, public respondent, in resolving petitioner's
Motion to Dismiss, skirted the issue of whether an employer-
employee relationship indeed exists between petitioner milling
company and the sugar workers. He did not categorically rule
thereon but instead relied on the observation that when petitioner
delivered to its planters the quedans representing its share,
petitioner did not first ascertain whether the shares of all the
workers or claimants were fully paid/covered pursuant to LOI No.
854, and that petitioner did not have the necessary certification
from the Department of Labor attesting to such fact of delivery. In
view of these observations, public respondent subscribed to the
possibility that petitioner may still have a liability vis-a-vis the
workers' share. Consequently, in order that the workers would not
have to litigate their claim separately, which would be tantamount
to tolerating the splitting of a cause of action, public respondent
held that petitioner should still be included in this case as an
indispensable party without which a full determination of this case
would not be obtained.
We find for petitioner.
The Solicitor General, in its adverse Comment, correctly agreed with
petitioner's contention that while the jurisdiction over controversies
involving agricultural workers has been transferred from the Court
of Agrarian Relations to the Labor Arbiters under the Labor Code as
amended, the said transferred jurisdiction is however, not without
limitations. The dispute or controversy must still fall under one of
the cases enumerated under Article 217 of the Labor Code, which
cases, as ruled in San Miguel, supra., arise out of or are in
connection with an employer-employee relationship.
In the case at bar, it is clear that there is no employer-employee
relationship between petitioner milling company and respondent
union and/or its members-workers, a fact which, the Solicitor
General notes, public respondent did not dispute or was silent
about. Absent the jurisdictional requisite of an employer-employee
relationship between petitioner and private respondent, the
inevitable conclusion is that public respondent is without
jurisdiction to hear and decide the case with respect to petitioner.
Anent the issue of whether respondent union and/or its members-
workers have a cause of action against petitioner, the same must be
resolved in the negative. To have a cause of action, the claimant
must show that he has a legal right and the respondent a
correlative duty in respect thereof, which the latter violated by some
wrongful act or omission (Marquez vs. Varela, 92 Phil. 373 [1952]).
In the instant case, a simple reading of Section 9 of R.A. 809 and
Section 1 of LOI 845 as aforequoted, would show that the payment
of the workers' share is a liability of the planters-employers, and not
of the milling company/sugar central. We thus reiterate Our ruling
on this matter, as enunciated
in Federation of Free Farmers, supra., to wit:
"x x x. Nowhere in Republic Act No. 809 can we find anything that
creates any relationship between the laborers of the planters and
the centrals. Under the terms of said Act, the old practice of the
centrals issuing the quedans to the respective PLANTERS for their
share of the proceeds of milled sugar per their milling contracts has
not been altered or modified. In other
words, the language of theAct does not in any manner make the cen
tral the insurer on behalf of the plantation laborers that the latter's
respective employers-planters would pay them their share. x x x"
"x x x. Accordingly, the only obligation of the centrals (under
Section 9 of the Act), like VICTORIAS, is to give to the respective
planters, like PLANTERS herein, the planters' share in the
proportion stipulated in the milling contract which would
necessarily include the portion of 60% pertaining to the laborers.
Once this has been done, the central is already out of the picture x
x x" (Emphasis supplied)
In the case at bar, it is undisputed that petitioner milling company
has already distributed to its planters their respective shares.
Consequently, petitioner has fulfilled its part and has nothing more
to do with the subsequent distribution by the planters of the
workers' share.
Public respondent's contention that petitioner is an indispensable
party is not supported by the applicable provisions of the Rules of
Court. Under Section 7, Rule 3 thereof, indispensable parties are
"parties in interest" without whom no final determination of the
action can be obtained. In this case, petitioner cannot be deemed as
a party in interest since there is no privity or legal obligation linking
it to respondent union and/or its members-workers.
In order to further justify petitioner's compulsory joinder as a party
to this case, public respondent relies on petitioners' lack of
certification from the Department of Labor of its delivery of the
planters' shares as evidence of an alleged "conspicuous display of
concerted conspiracy between the respondent sugar central
(petitioner) and its adherent planters to deprive the workers or
claimants of their shares in the increase in participation of the
adherent planters." (Rollo, p. 56)
The assertion is based on factual conclusions which have yet to be
proved. And even assuming for the sake of argument that public
respondent's conclusions are true, respondent union's and/or its
workers' recourse lies with the Secretary of Labor, upon whom
authority is vested under RA 809 to supervise the payment of the
workers' shares. Any act or omission involving the legal right of the
workers to said shares may be acted upon by the Labor Secretary
either motu proprio or at the instance of the workers. In this case
however, no such action has been brought by the subject workers,
thereby raising the presumption that no actionable violation has
been committed.
Public respondent is concerned that the respondent planters may
easily put up the defense that the workers' share is with petitioner
milling company, giving rise to multiplicity of suits. The Solicitor
General correctly postulates that the planters cannot legally set up
the said defense since the payment of the workers' share is a direct
obligation of the planters to their workers that cannot be shifted to
the miller/central. Furthermore, the Solicitor General notes that
there is nothing in RA 809 which suggests directly or indirectly that
the obligation of the planter to pay the workers' share is dependent
upon his receipt from the miller of his own share. If indeed the
planter did not receive his just and due share from the miller, he is
not without legal remedies to enforce his rights. The proper
recourse against a reneging miller or central is for the planter to
implead the former not as an indispensable party but as a third
party defendant under Section 12, Rule 6 of the Rules of Court. In
such case, herein petitioner milling company would be a proper
third party defendant because it is directly liable to the planters
(the original defendants) for all or part of the workers' claim.
However, the planters involved in this controversy have not filed
any complaint of such a nature against petitioner, thereby lending
credence to the conclusion that petitioner has fulfilled its part vis-a-
vis its obligation under RA 809.
WHEREFORE, premises considered, the petition is GRANTED.
Public respondent Reynaldo J. Gulmatico is hereby ORDERED to
DISMISS RAB VI Case No. 06-07-10256-89 with respect to herein
petitioner Hawaiian-Philippine Company and to PROCEED WITH
DISPATCH in resolving the said case.
SO ORDERED.

Romero, Melo, and Vitug, JJ., concur.


Feliciano, J., (Chairman), on leave.
THIRD DIVISION
[G.R. No. 157010. June 21, 2005]
PHILIPPINE NATIONAL BANK, petitioner, vs. FLORENCE O.
CABANSAG, respondent.
DECISION
PANGANIBAN, J.:
The Court reiterates the basic policy that all Filipino workers,
whether employed locally or overseas, enjoy the protective mantle of
Philippine labor and social legislations. Our labor statutes may not
be rendered ineffective by laws or judgments promulgated, or
stipulations agreed upon, in a foreign country.
The Case
Before us is a Petition for Review on Certiorari[1] under Rule 45 of
the Rules of Court, seeking to reverse and set aside the July 16,
2002 Decision[2] and the January 29, 2003 Resolution[3] of the Court
of Appeals (CA) in CA-GR SP No. 68403. The assailed Decision
dismissed the CA Petition (filed by herein petitioner), which had
sought to reverse the National Labor Relations Commission (NLRC)s
June 29, 2001 Resolution,[4] affirming Labor Arbiter Joel S. Lustrias
January 18, 2000 Decision.[5]
The assailed CA Resolution denied herein petitioners Motion for
Reconsideration.
The Facts
The facts are narrated by the Court of Appeals as follows:
In late 1998, [herein Respondent Florence Cabansag] arrived in
Singapore as a tourist. She applied for employment, with the
Singapore Branch of the Philippine National Bank, a private
banking corporation organized and existing under the laws of the
Philippines, with principal offices at the PNB Financial Center,
Roxas Boulevard, Manila. At the time, the Singapore PNB Branch
was under the helm of Ruben C. Tobias, a lawyer, as General
Manager, with the rank of Vice-President of the Bank. At the time,
too, the Branch Office had two (2) types of employees: (a)
expatriates or the regular employees, hired in Manila and assigned
abroad including Singapore, and (b) locally (direct) hired. She
applied for employment as Branch Credit Officer, at a total monthly
package of $SG4,500.00, effective upon assumption of duties after
approval. Ruben C. Tobias found her eminently qualified and wrote
on October 26, 1998, a letter to the President of the Bank in
Manila, recommending the appointment of Florence O. Cabansag,
for the position.
xxxxxxxxx
The President of the Bank was impressed with the credentials of
Florence O. Cabansag that he approved the recommendation of
Ruben C. Tobias. She then filed an Application, with the Ministry of
Manpower of the Government of Singapore, for the issuance of
an Employment Pass as an employee of the Singapore PNB Branch.
Her application was approved for a period of two (2) years.
On December 7, 1998, Ruben C. Tobias wrote a letter to Florence O.
Cabansag offering her a temporary appointment, as Credit Officer,
at a basic salary of Singapore Dollars 4,500.00, a month and, upon
her successful completion of her probation to be determined solely,
by the Bank, she may be extended at the discretion of the Bank, a
permanent appointment and that her temporary appointment was
subject to the following terms and conditions:
1. You will be on probation for a period of three (3) consecutive
months from the date of your assumption of duty.
2. You will observe the Banks rules and regulations and those that
may be adopted from time to time.
3. You will keep in strictest confidence all matters related to
transactions between the Bank and its clients.
4. You will devote your full time during business hours in
promoting the business and interest of the Bank.
5. You will not, without prior written consent of the Bank, be
employed in anyway for any purpose whatsoever outside business
hours by any person, firm or company.
6. Termination of your employment with the Bank may be made by
either party after notice of one (1) day in writing during probation,
one month notice upon confirmation or the equivalent of one (1)
days or months salary in lieu of notice.
Florence O. Cabansag accepted the position and assumed office. In
the meantime, the Philippine Embassy in Singapore processed the
employment contract of Florence O. Cabansag and, on March 8,
1999, she was issued by the Philippine Overseas Employment
Administration, an Overseas Employment Certificate, certifying that
she was a bona fide contract worker for Singapore.
xxxxxxxxx
Barely three (3) months in office, Florence O. Cabansag submitted
to Ruben C. Tobias, on March 9, 1999, her initial Performance
Report. Ruben C. Tobias was so impressed with the Report that he
made a notation and, on said Report: GOOD WORK. However, in
the evening of April 14, 1999, while Florence O. Cabansag was in
the flat, which she and Cecilia Aquino, the Assistant Vice-President
and Deputy General Manager of the Branch and Rosanna
Sarmiento, the Chief Dealer of the said Branch, rented, she was told
by the two (2) that Ruben C. Tobias has asked them to tell Florence
O. Cabansag to resign from her job. Florence O. Cabansag was
perplexed at the sudden turn of events and the runabout way
Ruben C. Tobias procured her resignation from the Bank. The next
day, Florence O. Cabansag talked to Ruben C. Tobias and inquired
if what Cecilia Aquino and Rosanna Sarmiento had told her was
true. Ruben C. Tobias confirmed the veracity of the information,
with the explanation that her resignation was imperative as a cost-
cutting measure of the Bank. Ruben C. Tobias, likewise, told
Florence O. Cabansag that the PNB Singapore Branch will be sold
or transformed into a remittance office and that, in either way,
Florence O. Cabansag had to resign from her employment. The
more Florence O. Cabansag was perplexed. She then asked Ruben
C. Tobias that she be furnished with a Formal Advice from the PNB
Head Office in Manila. However, Ruben C. Tobias flatly refused.
Florence O. Cabansag did not submit any letter of resignation.
On April 16, 1999, Ruben C. Tobias again summoned Florence O.
Cabansag to his office and demanded that she submit her letter of
resignation, with the pretext that he needed a Chinese-speaking
Credit Officer to penetrate the local market, with the information
that a Chinese-speaking Credit Officer had already been hired and
will be reporting for work soon. She was warned that, unless she
submitted her letter of resignation, her employment record will be
blemished with the notation DISMISSED spread thereon. Without
giving any definitive answer, Florence O. Cabansag asked Ruben C.
Tobias that she be given sufficient time to look for another job.
Ruben C. Tobias told her that she should be out of her employment
by May 15, 1999.
However, on April 19, 1999, Ruben C. Tobias again summoned
Florence O. Cabansag and adamantly ordered her to submit her
letter of resignation. She refused. On April 20, 1999, she received a
letter from Ruben C. Tobias terminating her employment with the
Bank.
xxxxxxxxx
On January 18, 2000, the Labor Arbiter rendered judgment in favor
of the Complainant and against the Respondents, the decretal
portion of which reads as follows:
WHEREFORE, considering the foregoing premises, judgment is
hereby rendered finding respondents guilty of Illegal dismissal and
devoid of due process, and are hereby ordered:
1. To reinstate complainant to her former or substantially
equivalent position without loss of seniority rights, benefits
and privileges;
2. Solidarily liable to pay complainant as follows:
a) To pay complainant her backwages from 16 April 1999
up to her actual reinstatement. Her backwages as of
the date of the promulgation of this decision amounted
to SGD 40,500.00 or its equivalent in Philippine
Currency at the time of payment;
b) Mid-year bonus in the amount of SGD 2,250.00 or its
equivalent in Philippine Currency at the time of
payment;
c) Allowance for Sunday banking in the amount of SGD
120.00 or its equivalent in Philippine Currency at the
time of payment;
d) Monetary equivalent of leave credits earned on Sunday
banking in the amount of SGD 1,557.67 or its
equivalent in Philippine Currency at the time of
payment;
e) Monetary equivalent of unused sick leave benefits in the
amount of SGD 1,150.60 or its equivalent in Philippine
Currency at the time of payment.
f) Monetary equivalent of unused vacation leave benefits in
the amount of SGD 319.85 or its equivalent in
Philippine Currency at the time of payment.
g) 13th month pay in the amount of SGD 4,500.00 or its
equivalent in Philippine Currency at the time of
payment;
3. Solidarily to pay complainant actual damages in the
amount of SGD 1,978.00 or its equivalent in Philippine
Currency at the time of payment, and moral damages in
the amount of PhP 200,000.00, exemplary damages in the
amount of PhP 100,000.00;
4. To pay complainant the amount of SGD 5,039.81 or its
equivalent in Philippine Currency at the time of payment,
representing attorneys fees.
SO ORDERED. [6] [Emphasis in the original.]
PNB appealed the labor arbiters Decision to the NLRC. In a
Resolution dated June 29, 2001, the Commission affirmed that
Decision, but reduced the moral damages to P100,000 and the
exemplary damages to P50,000. In a subsequent Resolution, the
NLRC denied PNBs Motion for Reconsideration.
Ruling of the Court of Appeals
In disposing of the Petition for Certiorari, the CA noted that
petitioner bank had failed to adduce in evidence the Singaporean
law supposedly governing the latters employment Contract with
respondent. The appellate court found that the Contract had
actually been processed by the Philippine Embassy in Singapore
and approved by the Philippine Overseas Employment
Administration (POEA), which then used that Contract as a basis
for issuing an Overseas Employment Certificate in favor of
respondent.
According to the CA, even though respondent secured an
employment pass from the Singapore Ministry of Employment, she
did not thereby waive Philippine labor laws, or the jurisdiction of
the labor arbiter or the NLRC over her Complaint for illegal
dismissal. In so doing, neither did she submit herself solely to the
Ministry of Manpower of Singapores jurisdiction over disputes
arising from her employment. The appellate court further noted that
a cursory reading of the Ministrys letter will readily show that no
such waiver or submission is stated or implied.
Finally, the CA held that petitioner had failed to establish a just
cause for the dismissal of respondent. The bank had also failed to
give her sufficient notice and an opportunity to be heard and to
defend herself. The CA ruled that she was consequently entitled to
reinstatement and back wages, computed from the time of her
dismissal up to the time of her reinstatement.
Hence, this Petition.[7]

Issues
Petitioner submits the following issues for our consideration:
1. Whether or not the arbitration branch of the NLRC in the
National Capital Region has jurisdiction over the instant
controversy;
2. Whether or not the arbitration of the NLRC in the National
Capital Region is the most convenient venue or forum to
hear and decide the instant controversy; and
3. Whether or not the respondent was illegally dismissed, and
therefore, entitled to recover moral and exemplary damages
and attorneys fees.[8]
In addition, respondent assails, in her Comment, [9] the propriety
of Rule 45 as the procedural mode for seeking a review of the CA
Decision affirming the NLRC Resolution. Such issue deserves scant
consideration. Respondent miscomprehends the Courts discourse
in St. Martin Funeral Home v. NLRC, [10] which has indeed affirmed
that the proper mode of review of NLRC decisions, resolutions or
orders is by a special civil action for certiorari under Rule 65 of the
Rules of Court. The Supreme Court and the Court of Appeals
have concurrent original jurisdiction over such petitions
for certiorari. Thus, in observance of the doctrine on the hierarchy of
courts, these petitions should be initially filed with the CA. [11]
Rightly, the bank elevated the NLRC Resolution to the CA by way
of a Petition for Certiorari. In seeking a review by this Court of the
CA Decision -- on questions of jurisdiction, venue and validity of
employment termination -- petitioner is likewise correct in invoking
Rule 45.[12]
It is true, however, that in a petition for review on certiorari, the
scope of the Supreme Courts judicial review of decisions of the
Court of Appeals is generally confined only to errors of law. It does
not extend to questions of fact. This doctrine applies with greater
force in labor cases. Factual questions are for the labor tribunals to
resolve. [13] In the present case, the labor arbiter and the NLRC have
already determined the factual issues. Their findings, which are
supported by substantial evidence, were affirmed by the CA. Thus,
they are entitled to great respect and are rendered conclusive upon
this Court, absent a clear showing of palpable error or arbitrary
disregard of evidence.[14]

The Courts Ruling


The Petition has no merit.
First Issue:
Jurisdiction
The jurisdiction of labor arbiters and the NLRC is specified in
Article 217 of the Labor Code as follows:
ART. 217. Jurisdiction of Labor Arbiters and the Commission. (a)
Except as otherwise provided under this Code the Labor Arbiters
shall have original and exclusive jurisdiction to hear and decide,
within thirty (30) calendar days after the submission of the case by
the parties for decision without extension, even in the absence of
stenographic notes, the following cases involving all workers,
whether agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases
that workers may file involving wage, rates of pay, hours
of work and other terms and conditions of employment
4. Claims for actual, moral, exemplary and other forms of
damages arising from the employer-employee relations;
5. Cases arising from any violation of Article 264 of this
Code, including questions involving the legality of strikes
and lockouts; and
6. Except claims for Employees Compensation, Social
Security, Medicare and maternity benefits, all other
claims, arising from employer-employee relations,
including those of persons in domestic or household
service, involving an amount of exceeding five thousand
pesos (P5,000.00) regardless of whether accompanied with
a claim for reinstatement.
(b) The commission shall have exclusive appellate jurisdiction over
all cases decided by Labor Arbiters.
x x x x x x x x x.
More specifically, Section 10 of RA 8042 reads in part:
SECTION 10. Money Claims. Notwithstanding any provision of law
to the contrary, the Labor Arbiters of the National Labor Relations
Commission (NLRC) shall have the original and exclusive
jurisdiction to hear and decide, within ninety (90) calendar days
after the filing of the complaint, the claims arising out of an
employer-employee relationship or by virtue of any law or contract
involving Filipino workers for overseas deployment including claims
for actual, moral, exemplary and other forms of damages.
xxxxxxxxx
Based on the foregoing provisions, labor arbiters clearly
have original and exclusive jurisdiction over claims arising from
employer-employee relations, including termination
disputes involving allworkers, among whom are overseas Filipino
workers (OFW).[15]
We are not unmindful of the fact that respondent was directly
hired, while on a tourist status in Singapore, by the PNB branch in
that city state. Prior to employing respondent, petitioner had to
obtain an employment pass for her from the Singapore Ministry of
Manpower. Securing the pass was a regulatory requirement
pursuant to the immigration regulations of that country.[16]
Similarly, the Philippine government requires non-Filipinos
working in the country to first obtain a local work permit in order to
be legally employed here. That permit, however, does not
automatically mean that the non-citizen is thereby bound by local
laws only, as averred by petitioner. It does not at all imply a waiver
of ones national laws on labor. Absent any clear and convincing
evidence to the contrary, such permit simply means that its holder
has a legal status as a worker in the issuing country.
Noteworthy is the fact that respondent likewise applied for and
secured an Overseas Employment Certificate from the POEA
through the Philippine Embassy in Singapore. The Certificate,
issued on March 8, 1999, declared her a bona fide contract worker
for Singapore. Under Philippine law, this document authorized her
working status in a foreign country and entitled her to all benefits
and processes under our statutes. Thus, even
assuming arguendo that she was considered at the start of her
employment as a direct hire governed by and subject to the laws,
common practices and customs prevailing in Singapore [17] she
subsequently became a contract worker or an OFW who was
covered by Philippine labor laws and policies upon certification by
the POEA. At the time her employment was illegally terminated, she
already possessed the POEA employment Certificate.
Moreover, petitioner admits that it is a Philippine corporation
doing business through a branch office in Singapore.
[18]
Significantly, respondents employment by the Singapore branch
office had to be approved by Benjamin P. Palma Gil, [19] the president
of the bank whose principal offices were in Manila. This
circumstance militates against petitioners contention that
respondent was locally hired; and totally governed by and subject to
the laws, common practices and customs of Singapore, not of the
Philippines. Instead, with more reason does this fact reinforce the
presumption that respondent falls under the legal definition
of migrant worker, in this case one deployed in Singapore. Hence,
petitioner cannot escape the application of Philippine laws or the
jurisdiction of the NLRC and the labor arbiter.
In any event, we recall the following policy pronouncement of the
Court in Royal Crown Internationale v. NLRC:[20]
x x x. Whether employed locally or overseas, all Filipino workers
enjoy the protective mantle of Philippine labor and social legislation,
contract stipulations to the contrary notwithstanding. This
pronouncement is in keeping with the basic public policy of the
State to afford protection to labor, promote full employment, ensure
equal work opportunities regardless of sex, race or creed, and
regulate the relations between workers and employers. For the State
assures the basic rights of all workers to self-organization, collective
bargaining, security of tenure, and just and humane conditions of
work [Article 3 of the Labor Code of the Philippines; See also Section
18, Article II and Section 3, Article XIII, 1987 Constitution]. This
ruling is likewise rendered imperative by Article 17 of the Civil Code
which states that laws which have for their object public order,
public policy and good customs shall not be rendered ineffective by
laws or judgments promulgated, or by determination or conventions
agreed upon in a foreign country.
Second Issue:
Proper Venue
Section 1(a) of Rule IV of the NLRC Rules of Procedure reads:
Section 1. Venue (a) All cases which Labor Arbiters have authority
to hear and decide may be filed in the Regional Arbitration Branch
having jurisdiction over the workplace of the
complainant/petitioner; Provided, however that cases of Overseas
Filipino Worker (OFW) shall be filed before the Regional Arbitration
Branch where the complainant resides or where the principal office
of the respondent/employer is situated, at the option of the
complainant.
For purposes of venue, workplace shall be understood as the place
or locality where the employee is regularly assigned when the cause
of action arose. It shall include the place where the employee is
supposed to report back after a temporary detail, assignment or
travel. In the case of field employees, as well as ambulant or
itinerant workers, their workplace is where they are regularly
assigned, or where they are supposed to regularly receive their
salaries/wages or work instructions from, and report the results of
their assignment to their employers.
Under the Migrant Workers and Overseas Filipinos Act of 1995
(RA 8042), a migrant worker refers to a person who is to be engaged,
is engaged or has been engaged in a remunerated activity in a state
of which he or she is not a legal resident; to be used
interchangeably with overseas Filipino worker. [21] Undeniably,
respondent was employed by petitioner in its branch office in
Singapore. Admittedly, she is a Filipino and not a legal resident of
that state. She thus falls within the category of migrant worker or
overseas Filipino worker.
As such, it is her option to choose the venue of her Complaint
against petitioner for illegal dismissal. The law gives her two
choices: (1) at the Regional Arbitration Branch (RAB) where she
resides or (2) at the RAB where the principal office of her employer
is situated. Since her dismissal by petitioner, respondent has
returned to the Philippines -- specifically to her residence at
Filinvest II, Quezon City. Thus, in filing her Complaint before the
RAB office in Quezon City, she has made a valid choice of proper
venue.
Third Issue:
Illegal Dismissal
The appellate court was correct in holding that respondent was
already a regular employee at the time of her dismissal, because her
three-month probationary period of employment had already ended.
This ruling is in accordance with Article 281 of the Labor Code: An
employee who is allowed to work after a probationary period shall
be considered a regular employee. Indeed, petitioner recognized
respondent as such at the time it dismissed her, by giving her one
months salary in lieu of a one-month notice, consistent with
provision No. 6 of her employment Contract.
Notice and Hearing
Not Complied With
As a regular employee, respondent was entitled to all rights,
benefits and privileges provided under our labor laws. One of her
fundamental rights is that she may not be dismissed without due
process of law. The twin requirements of notice and hearing
constitute the essential elements of procedural due process, and
neither of these elements can be eliminated without running afoul
of the constitutional guarantee.[22]
In dismissing employees, the employer must furnish them two
written notices: 1) one to apprise them of the particular acts or
omissions for which their dismissal is sought; and 2) the other to
inform them of the decision to dismiss them. As to the requirement
of a hearing, its essence lies simply in the opportunity to be heard.
[23]

The evidence in this case is crystal-clear. Respondent was not


notified of the specific act or omission for which her dismissal was
being sought. Neither was she given any chance to be heard, as
required by law. At any rate, even if she were given the opportunity
to be heard, she could not have defended herself effectively, for she
knew no cause to answer to.
All that petitioner tendered to respondent was a notice of her
employment termination effective the very same day, together with
the equivalent of a one-month pay. This Court has already held that
nothing in the law gives an employer the option to substitute the
required prior notice and opportunity to be heard with the mere
payment of 30 days salary.[24]
Well-settled is the rule that the employer shall be sanctioned for
noncompliance with the requirements of, or for failure to observe,
due process that must be observed in dismissing an employee. [25]
No Valid Cause
for Dismissal
Moreover, Articles 282,[26] 283[27] and 284[28] of the Labor Code
provide the valid grounds or causes for an employees dismissal. The
employer has the burden of proving that it was done for any of
those just or authorized causes. The failure to discharge this
burden means that the dismissal was not justified, and that the
employee is entitled to reinstatement and back wages. [29]
Notably, petitioner has not asserted any of the grounds provided
by law as a valid reason for terminating the employment of
respondent. It merely insists that her dismissal was validly effected
pursuant to the provisions of her employment Contract, which she
had voluntarily agreed to be bound to.
Truly, the contracting parties may establish such stipulations,
clauses, terms and conditions as they want, and their agreement
would have the force of law between them. However, petitioner
overlooks the qualification that those terms and conditions agreed
upon must not be contrary to law, morals, customs, public policy or
public order.[30] As explained earlier, the employment Contract
between petitioner and respondent is governed by Philippine labor
laws. Hence, the stipulations, clauses, and terms and conditions of
the Contract must not contravene our labor law provisions.
Moreover, a contract of employment is imbued with public
interest. The Court has time and time again reminded parties that
they are not at liberty to insulate themselves and their relationships
from the impact of labor laws and regulations by simply
contracting with each other.[31] Also, while a contract is the law
between the parties, the provisions of positive law that regulate
such contracts are deemed included and shall limit and govern the
relations between the parties.[32]
Basic in our jurisprudence is the principle that when there is no
showing of any clear, valid, and legal cause for the termination of
employment, the law considers the matter a case of illegal
dismissal.[33]
Awards for Damages
Justified
Finally, moral damages are recoverable when the dismissal of an
employee is attended by bad faith or constitutes an act oppressive
to labor or is done in a manner contrary to morals, good customs or
public policy.[34] Awards for moral and exemplary damages would be
proper if the employee was harassed and arbitrarily dismissed by
the employer.[35]
In affirming the awards of moral and exemplary damages, we
quote with approval the following ratiocination of the labor arbiter:
The records also show that [respondents] dismissal was effected by
[petitioners] capricious and high-handed manner, anti-social and
oppressive, fraudulent and in bad faith, and contrary to morals,
good customs and public policy. Bad faith and fraud are shown in
the acts committed by [petitioners] before, during and after
[respondents] dismissal in addition to the manner by which she was
dismissed. First, [respondent] was pressured to resign for two
different and contradictory reasons, namely, cost-cutting and the
need for a Chinese[-]speaking credit officer, for which no written
advice was given despite complainants request. Such wavering
stance or vacillating position indicates bad faith and a dishonest
purpose. Second, she was employed on account of her
qualifications, experience and readiness for the position of credit
officer and pressured to resign a month after she was commended
for her good work. Third, the demand for [respondents] instant
resignation on 19 April 1999 to give way to her replacement who
was allegedly reporting soonest, is whimsical, fraudulent and in bad
faith, because on 16 April 1999 she was given a period of [sic] until
15 May 1999 within which to leave. Fourth, the pressures made on
her to resign were highly oppressive, anti-social and caused her
absolute torture, as [petitioners] disregarded her situation as an
overseas worker away from home and family, with no prospect for
another job. She was not even provided with a return trip fare.
Fifth, the notice of termination is an utter manifestation of bad faith
and whim as it totally disregards [respondents] right to security of
tenure and due process. Such notice together with the demands for
[respondents] resignation contravenes the fundamental guarantee
and public policy of the Philippine government on security of
tenure.
[Respondent] likewise established that as a proximate result of her
dismissal and prior demands for resignation, she suffered and
continues to suffer mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock and social
humiliation. Her standing in the social and business community as
well as prospects for employment with other entities have been
adversely affected by her dismissal. [Petitioners] are thus liable for
moral damages under Article 2217 of the Civil Code.
xxxxxxxxx
[Petitioners] likewise acted in a wanton, oppressive or malevolent
manner in terminating [respondents] employment and are therefore
liable for exemplary damages. This should served [sic] as protection
to other employees of [petitioner] company, and by way of example
or correction for the public good so that persons similarly minded
as [petitioners] would be deterred from committing the same acts. [36]
The Court also affirms the award of attorneys fees. It is settled
that when an action is instituted for the recovery of wages, or when
employees are forced to litigate and consequently incur expenses to
protect their rights and interests, the grant of attorneys fees is
legally justifiable.[37]
WHEREFORE, the Petition is DENIED and the assailed Decision
and Resolution AFFIRMED. Costs against petitioner.
SO ORDERED.
Sandoval-Gutierrez, Corona, Carpio-Morales, and Garcia,
JJ., concur.
THIRD DIVISION
[G.R. No. 124193. March 6, 1998]
WILLIAM DAYAG, EDUARDO CORTON, EDGARDO CORTON,
LEOPOLDO NAGMA, ALOY FLORES, ROMEO PUNAY and
EDWIN DAYAG, petitioners, vs. HON. POTENCIANO S.
CANIZARES, JR., NATIONAL LABOR RELATIONS
COMMISSION and YOUNGS CONSTRUCTION
CORPORATION, respondents.
DECISION
ROMERO, J.:
On March 11, 1993, petitioners William Dayag, Edwin Dayag,
Eduardo Corton, Edgardo Corton, Leopoldo Nagma, Aloy Flores,
and Romeo Punay filed a complaint for illegal dismissal, non-
payment of wages, overtime pay, premium pay, holiday pay, service
incentive leave, 13th month pay, and actual, moral and exemplary
damages against Alfredo Young, a building contractor doing
business under the firm name Youngs Construction. They filed the
complaint with the National Capital Region Arbitration Branch of
the NLRC which docketed the same as NLRC-NCR-Case No. 00-03-
01891-93. The case was subsequently assigned to Labor Arbiter
Potenciano Canizares, Jr.
Petitioners alleged that they were hired in 1990 by Young to
work as tower crane operators at the latters construction site at
Platinum 2000 in San Juan, Metro Manila. In November 1991, they
were transferred to Cebu City to work at the construction of his
Shoemart Cebu project. Petitioners worked in Cebu until February
1993, except for Punay who stayed up to September 29, 1992 only
and Nagma, until October 21, 1992.
On January 30, 1993, William Dayag asked for permission to go
to Manila to attend to family matters. He was allowed to do so but
was not paid for the period January 23-30, 1993, allegedly due to
his accountability for the loss of certain construction tools. Eduardo
Corton had earlier left on January 16, 1993, purportedly due to
harassment by Young. In February 1993, Edgardo Corton, Aloy
Flores and Edwin Dayag also left Cebu for Manila, allegedly for the
same reason. Thereafter, petitioners banded together and filed the
complaint previously mentioned.
Instead of attending the initial hearings set by the labor arbiter,
Young filed, on July 6, 1993, a motion to transfer the case to the
Regional Arbitration Branch, Region VII of the NLRC. He claimed
that the workplace where petitioners were regularly assigned was in
Cebu City and that, in consonance with Section 1(a) of Rule IV of
the New Rules of Procedure of the NLRC,[1] the case should have
been filed in Cebu City. Young submitted in evidence a certificate of
registration of business name showing his companys address as
Corner SudlonEspaa Streets, Pari-an, Cebu City; its business
permit issued by the Office of the Mayor of Cebu City and a
certification by the Philippine National PoliceCebu City Police
Station 2 that petitioners had been booked therein for qualified
theft upon the complaint of Youngs Construction.
Petitioners opposed the same, arguing that all of them, except
for Punay, were, by that time, residents of Metro Manila and that
they could not afford trips to Cebu City. Besides, they claimed that
respondent had its main office at Corinthian Gardens in Quezon
City. Young, in reply, declared that the Corinthian Gardens address
was not his principal place of business, but actually his residence,
which he also used as a correspondent office for his construction
firm.
Agreeing that petitioners workplace when the cause of action
accrued was Cebu City, the labor arbiter, on September 8, 1993,
granted Youngs motion and ordered the transmittal of the case to
the regional arbitration branch of Region VII. Petitioners promptly
appealed said order to the NLRC, which, however, dismissed the
same on January 31, 1995, for lack of merit.
Citing Nestl Philippines, Inc. vs. NLRC[2] and Cruzvale, Inc. vs.
Laguesma,[3] petitioners moved for a reconsideration of the January
31, 1995 resolution of the Commission. Acting favorably on said
motion, the Commission, on August 25, 1995, annulled and set
aside its resolution of January 31, 1995, and remanded the case to
the original arbitration branch of the National Capital Region for
further proceedings. This prompted Young, in turn, to file his own
motion for reconsideration seeking the reversal of the August 25,
1995 resolution of the Commission. Finding the two above-cited
cases to be inapplicable to instant case, the Commission made a
volte-face and reconsidered its August 25, 1995 resolution. It
reinstated the resolution of January 31, 1995, directing the transfer
of the case to Cebu City. In addition, it ruled that no further motion
of a similar nature would be entertained. Hence, the recourse to
this Court by petitioners, who raise the following as errors:
1. THE LABOR ARBITER A QUO ERRED IN ISSUING THE
DISPUTED ORDER DATED SEPTEMBER 8, 1993 WHEN,
OBVIOUSLY, THE SAID MOTION TO TRANSFER VENUE WAS
FILED IN VIOLATION OF SECTIONS 4 AND 5 OF RULE 15 OF
THE REVISED RULES OF COURT.
2. PUBLIC RESPONDENTS ERRED IN ISSUING THE DISPUTED
JUDGMENT WHEN, OBVIOUSLY, THE RESPONDENT, BY
FILING ITS POSITION PAPER, HAS WAIVED ITS RIGHT TO
QUESTION THE VENUE OF THE INSTANT CASE.
3. THE PUBLIC RESPONDENTS ERRED IN CONCLUDING THAT
THE WORKPLACE OF THE COMPLAINANTS IS AT CEBU CITY
AND IN DECLARING THAT THE PROPER VENUE IS AT CEBU
CITY.
Petitioner contends that the labor arbiter acted with grave abuse
of discretion when it entertained Youngs motion to transfer venue
since it did not specify the time and date when it would be heard by
the labor arbiter. They raise the suppletory application of the Rules
of Court, specifically Sections 4 and 5 of Rule 15, [4] in relation to
Section 3 of Rule I of the New Rules of Procedure of the NLRC, in
support of their contention.
We find no merit in petitioners argument. In a long line of
decisions,[5] this Court has consistently ruled that the application of
technical rules of procedure in labor cases may be relaxed to serve
the demands of substantial justice. As provided by Article 221 of
the Labor Code rules of evidence prevailing in courts of law or
equity shall not be controlling and it is the spirit and intention of
this Code that the Commission and its members and the Labor
Arbiters shall use every and all reasonable means to ascertain the
facts in each case speedily and objectively and without regard to
technicalities of law or procedure, all in the interest of due
process. Furthermore, while it is true that any motion that does not
comply with the requirements of Rule 15 should not be accepted for
filing and, if filed, is not entitled to judicial cognizance, this Court
has likewise held that where a rigid application of the rule will
result in a manifest failure or miscarriage of justice, technicalities
may be disregarded in order to resolve the case. Litigations should,
as much as possible, be decided on the merits and not on
technicalities.[6] Lastly, petitioners were able to file an opposition to
the motion to transfer venue which, undisputedly, was considered
by the labor arbiter when he issued the disputed order of
September 8, 1993. There is, hence, no showing that petitioners
have been unduly prejudiced by the motions failure to give notice of
hearing.
Given the foregoing, it seems improper to nullify Youngs motion
on a mere technicality. Petitioners averments should be given scant
consideration to give way to the more substantial matter of
equitably determining the rights and obligations of the parties. It
need not be emphasized that rules of procedure must be interpreted
in a manner that will help secure and not defeat justice. [7]
Likewise, petitioners harp on Youngs so-called waiver of his right
to contest the venue of the instant case. They argue that Young is
estopped from questioning the venue herein as his motion to
transfer venue was actually a position paper, a close scrutiny of the
same purportedly showing that he admitted and denied certain
allegations found in petitioners complaint.
Petitioners contention rings hollow. Even if the questioned
motion was at the same time a position paper, Section 1(c) of Rule
IV provides: (w)hen improper venue is not objected to before or at
the time of the filing of position papers, such question shall be
deemed waived (Emphasis supplied). Consequently, there is no
waiver of improper venue if a party questions venue simultaneously
with the filing of a position paper. Moreover, nowhere in the New
Rules of Procedure of the NLRC is there a requirement that a party
must object solely to venue, on penalty of waiving the same. In fact,
Section 1(d) provides that:
The venue of an action may be changed or transferred to a different
Regional Arbitration Branch other than where the complaint was
filed by written agreement of the parties or when the Commission or
Labor Arbiter before whom the case is pending so orders, upon
motion by the proper party in meritorious cases (Emphasis
supplied).
Youngs acts are in consonance with this provision, for he
seasonably made representations to transfer the venue of the action
in the proper motion.
Finally, while it is true that objections to venue are deemed
waived if the respondent, through conduct, manifests satisfaction
with the venue until after the trial, or abides by it until the matter
has proceeded to a hearing, [8] no waiver of the defense of venue on
the ground of estoppel by conduct can be attributed to Young, who
consistently and persistently contested the same even before trial.
Similarly, petitioners reliance on Nestl[9] and Cruzvale[10] is
likewise misplaced. While Nestl ruled that Rule IV of the New Rules
of Procedure of the NLRC does not constitute a complete rule on
venue in cases cognizable by labor arbiters, Section 2, Rule 4 of the
Rules of Court[11] having suppletory effect, it also held that the
foregoing provision of the Rules of Court applies only where the
petitioners are labor unions or where a single act of an employer
gives rise to a cause of action common to many of its employees
working in different branches or workplaces of the former. It is not
denied that petitioners herein are not represented by a union; nor
were they assigned to different workplaces by
Young. Likewise, Cruzvale is inapplicable to the case at bar, the
issue involved therein being the propriety of the DOLE Region IV
Offices taking cognizance of a petition for certification election when
the companys place of business was in Cubao, Quezon City, while
the workplace of the petitioning union was elsewhere. The instant
case does not involve any certification election; nor are the
workplace of the employees and place of business of the employer
different.
Young cannot, however, derive comfort from the foregoing, this
petition having been overtaken by events. In the recent case
of Sulpicio Lines, Inc. vs. NLRC[12] this Court held that the question
of venue essentially pertains to the trial and relates more to the
convenience of the parties rather than upon the substance and
merits of the case. It underscored the fact that the permissive rules
underlying provisions on venue are intended to assure convenience
for the plaintiff and his witnesses and to promote the ends of
justice. With more reason does the principle find applicability in
cases involving labor and management because of the doctrine well-
entrenched in our jurisdiction that the State shall afford full
protection to labor. The Court held that Section 1(a), Rule IV of the
NLRC Rules of Procedure on Venue was merely permissive. In its
words:
This provision is obviously permissive, for the said section uses the
word may, allowing a different venue when the interests of
substantial justice demand a different one. In any case, as stated
earlier, the Constitutional protection accorded to labor is a
paramount and compelling factor, provided the venue chosen is not
altogether oppressive to the employer.
The rationale for the rule is obvious. The worker, being the
economically-disadvantaged partywhether as
complainant/petitioner or as respondent, as the case may be, the
nearest governmental machinery to settle the dispute must be
placed at his immediate disposal, and the other party is not to be
given the choice of another competent agency sitting in another
place as this will unduly burden the former. [13] In fact, even in cases
where venue has been stipulated by the parties, this Court has not
hesitated to set aside the same if it would lead to a situation so
grossly inconvenient to one party as to virtually negate his claim.
Again, in Sulpicio Lines, this Court, citing Sweet Lines vs. Teves,
[14]
held that:
An agreement will not be held valid where it practically negates the
action of the claimant, such as the private respondents herein. The
philosophy underlying the provisions on transfer of venue of actions
is the convenience of the plaintiffs as well as his witnesses and to
promote the ends of justice. Considering the expense and trouble a
passenger residing outside Cebu City would incur to prosecute a
claim in the City of Cebu, he would probably decide not to file the
action at all. The condition will thus defeat, instead of enhance, the
ends of justice. Upon the other hand, petitioner had branches or
offices in the respective ports of call of the vessels and could afford
to litigate in any of these places. Hence, the filing of the suit in the
CFI of Misamis Oriental, as was done in the instant case will not
cause inconvenience to, much less prejudice petitioner.
In the case at hand, the ruling specifying the National Capital
Region Arbitration Branch as the venue of the present action
cannot be considered oppressive to Young. His residence in
Corinthian Gardens also serves as his correspondent
office. Certainly, the filing of the suit in the National Capital Region
Arbitration Branch in Manila will not cause him as much
inconvenience as it would the petitioners, who are now residents of
Metro Manila, if the same was heard in Cebu. Hearing the case in
Manila would clearly expedite proceedings and bring about the
speedy resolution of instant case.
WHEREFORE, premises considered, the resolution of February
12, 1996, of public respondent NLRC, transferring the instant case
to the Seventh Regional Arbitration Branch, Cebu City, is SET
ASIDE. Instead, its resolution dated August 25, 1995, remanding
the case to the Arbitration Branch of Origin, is hereby REINSTATED
and AFFIRMED.
SO ORDERED.
Narvasa, C.J. (Chairman), Kapunan and Purisima, JJ., concur.
FIRST DIVISION
[G.R. No. 117650. March 7, 1996]
SULPICIO LINES, INC., petitioner, vs. NATIONAL LABOR
RELATIONS COMMISSION and JAIME
CAGATAN, respondents.
DECISION
KAPUNAN, J.:
Petitioner Sulpicio Lines, Inc., owner of MV Cotabato Princess,
on January 15, 1992 dismissed private respondent Jaime Cagatan,
a messman of the said vessel, allegedly for being absent without
leave for a prolonged period of six (6) months.
As a result of his dismissal, the private respondent filed a
complaint for illegal dismissal before the National Labor Relations
Commission (NLRC) through its National Capital Region Arbitration
Branch in Manila, docketed as NLRC-NCR Case No. 00-06-3163-92.
[1]

Responding to the said complaint, petitioner, on June 25, 1992,


filed a Motion to Dismiss on the ground of improper venue, stating,
among other things, that the case for illegal dismissal should have
been lodged with the NLRCs Regional Branch No. VII (Cebu), as its
main office was located in Cebu City.[2]
In an Order dated August 21, 1992 Labor Arbiter Arthur
L. Amansec of the NLRC-NCR denied petitioners Motion to Dismiss,
holding that:
Considering that the complainant is a ship steward, traveled on
board respondents ship along the Manila-Enstancia-Iloilo-
Zamboanga-Cotabato vice-versa route, Manila can be said to be
part of the complainants territorial workplace. [3]
The aforequoted Order was seasonably appealed to the NLRC by
petitioner. On February 28, 1994, respondent NLRC found
petitioners appeal unmeritorious and sustained the Labor Arbiters
August 21, 1992 ruling, explaining that under the New NLRC Rules,
the Commission or the Labor Arbiter before whom the case is
pending may order a change of venue. [4] Finding no grave abuse of
discretion in the Labor Arbiters assailed Order, respondent NLRC
emphasized that:
[T]he complainant instituted the Action in Manila where he
resides. Hence, we see no grave abuse of discretion on the part of
the labor arbiter in denying the respondents Motion to Dismiss
as We find support in the basic principle that the State shall afford
protection to labor and that the NLRC is not bound by strict
technical rules of procedure.[5]
Undaunted, petitioner sought a reconsideration of the above
Order, which the public respondent denied in its Resolution dated
July 22, 1994.[6] Consequently, petitioner comes to this Court for
relief, in the form of a Special Civil Action for Certiorari under Rule
65 of the Rules of Court, contending that public respondent NLRC
acted with grave abuse of discretion amounting to lack or excess of
jurisdiction when it issued its assailed rulings. [7]
It is petitioners principal contention that a ship or vessel as
workplace is an extension of its homeport or principal place of
business, and that being part of the territory of the homeport,
(such) vessel is governed to a large extent by the laws and is under
the jurisdiction of the homeport.[8] Based on this submission,
petitioner avers that its vessel-as-workplace is under the territorial
jurisdiction of the Regional Arbitration branch where (its) . . .
principal office is located, which is Branch VII, located in Cebu City.
[9]

We disagree.
As early as 1911, this Court held that the question of venue
essentially relates to the trial and touches more upon the
convenience of the parties, rather than upon the substance and
merits of the case.[10] Our permissive rules underlying provisions on
venue are intended to assure convenience for the plaintiff and his
witnesses and to promote the ends of justice. This axiom all the
more finds applicability in cases involving labor and management
because of the principle, paramount in our jurisdiction, that the
State shall afford full protection to labor. [11]
Even in cases where venue has been stipulated by the parties by
contract, this Court has not hesitated to set aside agreements on
venue if the same would lead to a situation so grossly inconvenient
to one party as to virtually negate his claim. In Sweet Lines
vs. Teves,[12] involving a contract of adhesion, we held that:
An agreement will not be held valid where it practically negates the
action of the claimants, such as the private respondents herein. The
philosophy underlying the provisions on transfer of venue of actions
is the convenience of the plaintiffs as well as his witnesses and to
promote the ends of justice. Considering the expense and trouble a
passenger residing outside Cebu City would incur to prosecute a
claim in the City of Cebu, he would most probably decide not to file
the action at all. The condition will thus defeat, instead of enhance,
the ends of justice. Upon the other hand, petitioner had branches
or offices in the respective ports of call of the vessels and can afford
to litigate in any of these places. Hence, the filing of the suit in the
CFI of Misamis Oriental, as was done in the instant case will not
cause inconvenience to, much less prejudice petitioner. [13]
In the case at bench, it is not denied that while petitioner
maintains its principal office in Cebu City, it retains a major
booking and shipping office in Manila from which it earns
considerable revenue, and from which it hires and trains a
significant number of its workforce. Its virulent insistence on
holding the proceedings in the NLRCs regional arbitration branch
in Cebu City is obviously a ploy to inconvenience the private
respondent, a mere steward who resides in Metro Manila, who
would obviously not be able to afford the frequent trips to Cebu City
in order to follow up his case.
Even the provisions cited by petitioner in support of its
contention that venue of the illegal dismissal case lodged by private
respondent is improperly laid, would not absolutely support his
claim that respondent NLRC acted with grave abuse of discretion in
allowing the private respondent to file his case with the NCR
arbitration branch.
Section 1, Rule IV of the NLRC Rules of Procedure on Venue,
provides that:
Section 1. Venue - (a) All cases in which Labor Arbiters have
authority to hear and decide may be filed in the Regional
Arbitration Branch having jurisdiction over the workplace of the
complainant/petitioner.
This provision is obviously permissive, for the said section uses
the word may, allowing a different venue when the interests of
substantial justice demand a different one. In any case, as stated
earlier, the Constitutional protection accorded to labor is a
paramount and compelling factor, provided the venue chosen is not
altogether oppressive to the employer.
Moreover, Section 1, Rule IV of the 1990 NLRC Rules
additionally provides that, for purposes of venue, workplace shall be
understood as the place or locality where the employee is regularly
assigned when the cause of action arose. Since the private
respondents regular place of assignment is the vessel
MV Cotabato Princess which plies the Manila-Estancia-Iloilo-
Zamboanga-Cotabatoroute, we are of the opinion that Labor Arbiter
Arthur L. Amansec was correct in concluding that Manila could be
considered part of the complainants territorial
workplace. Respondent NLRC, therefore, committed no grave abuse
of discretion in sustaining the labor arbiters denial of herein
petitioners Motion to Dismiss.
WHEREFORE, premises considered, the instant petition is
hereby DISMISSED for lack of merit.
SO ORDERED.
Padilla, Bellosillo, Vitug, and Hermosisima, Jr., JJ., concur.