Philippine Association of Service Exporters, Inc. vs. Franklin M.

Drilon
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 81958 June 30, 1988
PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS, INC., petitioner,
vs.
HON. FRANKLIN M. DRILON as Secretary of Labor and Employment, and TOMAS D.
ACHACOSO, as Administrator of the Philippine Overseas Employment
Administration, respondents.
Gutierrez & Alo Law Offices for petitioner.
SARMIENTO, J.:
The petitioner, Philippine Association of Service Exporters, Inc. (PASEI, for short), a firm "engaged
principally in the recruitment of Filipino workers, male and female, for overseas
placement," 1challenges the Constitutional validity of Department Order No. 1, Series of 1988, of
the Department of Labor and Employment, in the character of "GUIDELINES GOVERNING THE
TEMPORARY SUSPENSION OF DEPLOYMENT OF FILIPINO DOMESTIC AND HOUSEHOLD WORKERS,"
in this petition for certiorari and prohibition. Specifically, the measure is assailed for
"discrimination against males or females;" 2that it "does not apply to all Filipino workers but only
to domestic helpers and females with similar skills;" 3and that it is violative of the right to travel.
It is held likewise to be an invalid exercise of the lawmaking power, police power being
legislative, and not executive, in character.
In its supplement to the petition, PASEI invokes Section 3, of Article XIII, of the Constitution,
providing for worker participation "in policy and decision-making processes affecting their rights
and benefits as may be provided by law." 4Department Order No. 1, it is contended, was passed
in the absence of prior consultations. It is claimed, finally, to be in violation of the Charter's nonimpairment clause, in addition to the "great and irreparable injury" that PASEI members face
should the Order be further enforced.
On May 25, 1988, the Solicitor General, on behalf of the respondents Secretary of Labor and
Administrator of the Philippine Overseas Employment Administration, filed a Comment informing
the Court that on March 8, 1988, the respondent Labor Secretary lifted the deployment ban in
the states of Iraq, Jordan, Qatar, Canada, Hongkong, United States, Italy, Norway, Austria, and
Switzerland. * In submitting the validity of the challenged "guidelines," the Solicitor General
invokes the police power of the Philippine State.
It is admitted that Department Order No. 1 is in the nature of a police power measure. The only
question is whether or not it is valid under the Constitution.
The concept of police power is well-established in this jurisdiction. It has been defined as the
"state authority to enact legislation that may interfere with personal liberty or property in order
to promote the general welfare." 5As defined, it consists of (1) an imposition of restraint upon
liberty or property, (2) in order to foster the common good. It is not capable of an exact definition
but has been, purposely, veiled in general terms to underscore its all-comprehensive embrace.
"Its scope, ever-expanding to meet the exigencies of the times, even to anticipate the future
where it could be done, provides enough room for an efficient and flexible response to conditions
and circumstances thus assuring the greatest benefits." 6

It finds no specific Constitutional grant for the plain reason that it does not owe its origin to the
Charter. Along with the taxing power and eminent domain, it is inborn in the very fact of
statehood and sovereignty. It is a fundamental attribute of government that has enabled it to
perform the most vital functions of governance. Marshall, to whom the expression has been
credited, 7refers to it succinctly as the plenary power of the State "to govern its citizens." 8
"The police power of the State ... is a power coextensive with self- protection, and it is not inaptly
termed the "law of overwhelming necessity." It may be said to be that inherent and plenary
power in the State which enables it to prohibit all things hurtful to the comfort, safety, and
welfare of society." 9
It constitutes an implied limitation on the Bill of Rights. According to Fernando, it is "rooted in the
conception that men in organizing the state and imposing upon its government limitations to
safeguard constitutional rights did not intend thereby to enable an individual citizen or a group of
citizens to obstruct unreasonably the enactment of such salutary measures calculated to ensure
communal peace, safety, good order, and welfare." 10Significantly, the Bill of Rights itself does
not purport to be an absolute guaranty of individual rights and liberties "Even liberty itself, the
greatest of all rights, is not unrestricted license to act according to one's will." 11It is subject to
the far more overriding demands and requirements of the greater number.
Notwithstanding its extensive sweep, police power is not without its own limitations. For all its
awesome consequences, it may not be exercised arbitrarily or unreasonably. Otherwise, and in
that event, it defeats the purpose for which it is exercised, that is, to advance the public good.
Thus, when the power is used to further private interests at the expense of the citizenry, there is
a clear misuse of the power. 12
In the light of the foregoing, the petition must be dismissed.
As a general rule, official acts enjoy a presumed vahdity. 13In the absence of clear and convincing
evidence to the contrary, the presumption logically stands.
The petitioner has shown no satisfactory reason why the contested measure should be nullified.
There is no question that Department Order No. 1 applies only to "female contract
workers," 14but it does not thereby make an undue discrimination between the sexes. It is wellsettled that "equality before the law" under the Constitution 15does not import a perfect Identity
of rights among all men and women. It admits of classifications, provided that (1) such
classifications rest on substantial distinctions; (2) they are germane to the purposes of the law;
(3) they are not confined to existing conditions; and (4) they apply equally to all members of the
same class. 16
The Court is satisfied that the classification made-the preference for female workers rests on
substantial distinctions.
As a matter of judicial notice, the Court is well aware of the unhappy plight that has befallen our
female labor force abroad, especially domestic servants, amid exploitative working conditions
marked by, in not a few cases, physical and personal abuse. The sordid tales of maltreatment
suffered by migrant Filipina workers, even rape and various forms of torture, confirmed by
testimonies of returning workers, are compelling motives for urgent Government action. As
precisely the caretaker of Constitutional rights, the Court is called upon to protect victims of
exploitation. In fulfilling that duty, the Court sustains the Government's efforts.
The same, however, cannot be said of our male workers. In the first place, there is no evidence
that, except perhaps for isolated instances, our men abroad have been afflicted with an Identical
predicament. The petitioner has proffered no argument that the Government should act similarly
with respect to male workers. The Court, of course, is not impressing some male chauvinistic
notion that men are superior to women. What the Court is saying is that it was largely a matter

of evidence (that women domestic workers are being ill-treated abroad in massive instances) and
not upon some fanciful or arbitrary yardstick that the Government acted in this case. It is
evidence capable indeed of unquestionable demonstration and evidence this Court accepts. The
Court cannot, however, say the same thing as far as men are concerned. There is simply no
evidence to justify such an inference. Suffice it to state, then, that insofar as classifications are
concerned, this Court is content that distinctions are borne by the evidence. Discrimination in
this case is justified.
As we have furthermore indicated, executive determinations are generally final on the Court.
Under a republican regime, it is the executive branch that enforces policy. For their part, the
courts decide, in the proper cases, whether that policy, or the manner by which it is
implemented, agrees with the Constitution or the laws, but it is not for them to question its
wisdom. As a co-equal body, the judiciary has great respect for determinations of the Chief
Executive or his subalterns, especially when the legislature itself has specifically given them
enough room on how the law should be effectively enforced. In the case at bar, there is no
gainsaying the fact, and the Court will deal with this at greater length shortly, that Department
Order No. 1 implements the rule-making powers granted by the Labor Code. But what should be
noted is the fact that in spite of such a fiction of finality, the Court is on its own persuaded that
prevailing conditions indeed call for a deployment ban.
There is likewise no doubt that such a classification is germane to the purpose behind the
measure. Unquestionably, it is the avowed objective of Department Order No. 1 to "enhance the
protection for Filipino female overseas workers" 17 this Court has no quarrel that in the midst of
the terrible mistreatment Filipina workers have suffered abroad, a ban on deployment will be for
their own good and welfare.
The Order does not narrowly apply to existing conditions. Rather, it is intended to apply
indefinitely so long as those conditions exist. This is clear from the Order itself ("Pending review
of the administrative and legal measures, in the Philippines and in the host countries . . ." 18),
meaning to say that should the authorities arrive at a means impressed with a greater degree of
permanency, the ban shall be lifted. As a stop-gap measure, it is possessed of a necessary
malleability, depending on the circumstances of each case. Accordingly, it provides:
9. LIFTING OF SUSPENSION. The Secretary of Labor and Employment (DOLE) may, upon
recommendation of the Philippine Overseas Employment Administration (POEA), lift the
suspension in countries where there are:
1. Bilateral agreements or understanding with the Philippines, and/or,
2. Existing mechanisms providing for sufficient safeguards to ensure the welfare and protection
of Filipino workers. 19
The Court finds, finally, the impugned guidelines to be applicable to all female domestic overseas
workers. That it does not apply to "all Filipina workers" 20is not an argument for
unconstitutionality. Had the ban been given universal applicability, then it would have been
unreasonable and arbitrary. For obvious reasons, not all of them are similarly circumstanced.
What the Constitution prohibits is the singling out of a select person or group of persons within
an existing class, to the prejudice of such a person or group or resulting in an unfair advantage to
another person or group of persons. To apply the ban, say exclusively to workers deployed by A,
but not to those recruited by B, would obviously clash with the equal protection clause of the
Charter. It would be a classic case of what Chase refers to as a law that "takes property from A
and gives it to B." 21 It would be an unlawful invasion of property rights and freedom of contract
and needless to state, an invalid act.22(Fernando says: "Where the classification is based on such
distinctions that make a real difference as infancy, sex, and stage of civilization of minority
groups, the better rule, it would seem, is to recognize its validity only if the young, the women,

and the cultural minorities are singled out for favorable treatment. There would be an element of
unreasonableness if on the contrary their status that calls for the law ministering to their needs
is made the basis of discriminatory legislation against them. If such be the case, it would be
difficult to refute the assertion of denial of equal protection." 23In the case at bar, the assailed
Order clearly accords protection to certain women workers, and not the contrary.)
It is incorrect to say that Department Order No. 1 prescribes a total ban on overseas deployment.
From scattered provisions of the Order, it is evident that such a total ban has hot been
contemplated. We quote:
5. AUTHORIZED DEPLOYMENT-The deployment of domestic helpers and workers of similar skills
defined herein to the following [sic] are authorized under these guidelines and are exempted
from the suspension.
5.1 Hirings by immediate members of the family of Heads of State and Government;
5.2 Hirings by Minister, Deputy Minister and the other senior government officials; and
5.3 Hirings by senior officials of the diplomatic corps and duly accredited international
organizations.
5.4 Hirings by employers in countries with whom the Philippines have [sic] bilateral labor
agreements or understanding.
xxx xxx xxx
7. VACATIONING DOMESTIC HELPERS AND WORKERS OF SIMILAR SKILLS--Vacationing domestic
helpers and/or workers of similar skills shall be allowed to process with the POEA and leave for
worksite only if they are returning to the same employer to finish an existing or partially served
employment contract. Those workers returning to worksite to serve a new employer shall be
covered by the suspension and the provision of these guidelines.
xxx xxx xxx
9. LIFTING OF SUSPENSION-The Secretary of Labor and Employment (DOLE) may, upon
recommendation of the Philippine Overseas Employment Administration (POEA), lift the
suspension in countries where there are:
1. Bilateral agreements or understanding with the Philippines, and/or,
2. Existing mechanisms providing for sufficient safeguards to ensure the welfare and protection
of Filipino workers. 24
xxx xxx xxx
The consequence the deployment ban has on the right to travel does not impair the right. The
right to travel is subject, among other things, to the requirements of "public safety," "as may be
provided by law."25Department Order No. 1 is a valid implementation of the Labor Code, in
particular, its basic policy to "afford protection to labor," 26 pursuant to the respondent
Department of Labor's rule-making authority vested in it by the Labor Code. 27The petitioner
assumes that it is unreasonable simply because of its impact on the right to travel, but as we
have stated, the right itself is not absolute. The disputed Order is a valid qualification thereto.
Neither is there merit in the contention that Department Order No. 1 constitutes an invalid
exercise of legislative power. It is true that police power is the domain of the legislature, but it
does not mean that such an authority may not be lawfully delegated. As we have mentioned, the
Labor Code itself vests the Department of Labor and Employment with rulemaking powers in the
enforcement whereof. 28

The petitioners's reliance on the Constitutional guaranty of worker participation "in policy and
decision-making processes affecting their rights and benefits" 29is not well-taken. The right
granted by this provision, again, must submit to the demands and necessities of the State's
power of regulation.
The Constitution declares that:
Sec. 3. The State shall afford full protection to labor, local and overseas, organized and
unorganized, and promote full employment and equality of employment opportunities for all.

30

"Protection to labor" does not signify the promotion of employment alone. What concerns the
Constitution more paramountly is that such an employment be above all, decent, just, and
humane. It is bad enough that the country has to send its sons and daughters to strange lands
because it cannot satisfy their employment needs at home. Under these circumstances, the
Government is duty-bound to insure that our toiling expatriates have adequate protection,
personally and economically, while away from home. In this case, the Government has evidence,
an evidence the petitioner cannot seriously dispute, of the lack or inadequacy of such protection,
and as part of its duty, it has precisely ordered an indefinite ban on deployment.
The Court finds furthermore that the Government has not indiscriminately made use of its
authority. It is not contested that it has in fact removed the prohibition with respect to certain
countries as manifested by the Solicitor General.
The non-impairment clause of the Constitution, invoked by the petitioner, must yield to the loftier
purposes targetted by the Government. 31Freedom of contract and enterprise, like all other
freedoms, is not free from restrictions, more so in this jurisdiction, where laissez faire has never
been fully accepted as a controlling economic way of life.
This Court understands the grave implications the questioned Order has on the business of
recruitment. The concern of the Government, however, is not necessarily to maintain profits of
business firms. In the ordinary sequence of events, it is profits that suffer as a result of
Government regulation. The interest of the State is to provide a decent living to its citizens. The
Government has convinced the Court in this case that this is its intent. We do not find the
impugned Order to be tainted with a grave abuse of discretion to warrant the extraordinary relief
prayed for.
WHEREFORE, the petition is DISMISSED. No costs.
SO ORDERED.
Yap, C.J., Fernan, Narvasa, Melencio-Herrera, Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin,
Cortes and Grio-Aquino, JJ., concur.
Gutierrez, Jr. and Medialdea, JJ., are on leave.

Philippine Airlines, Inc. vs. Alberto Santos, Jr., et al.

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 77875 February 4, 1993
PHILIPPINE AIRLINES, INC., petitioner,
vs.
ALBERTO SANTOS, JR., HOUDIEL MAGADIA, GILBERT ANTONIO, REGINO DURAN,
PHILIPPINE AIRLINES EMPLOYEES ASSOCIATION, and THE NATIONAL LABOR RELATIONS
COMMISSION, respondents.
Fortunato Gupit, Jr., Solon R. Garcia, Rene B. Gorospe, Bienvinodo T. Jamoralin, jr. and Paulino D.
Ungos, Jr. for petitioner.
Adolpho M. Guerzon for private respondents.
REGALADO, J.:
The instant petition for certiorari seeks to set aside the decision of The National Labor Relations
Commission (NLRC) in NLRC Case No. 4-1206-85, promulgated on December 11,
1986, 1 containing the following disposition:
WHEREFORE, in view of the foregoing consideration, the Decision appealed from is set aside and
another one entered, declaring the suspension of complainants to be illegal and consequently,
respondent PAL is directed to pay complainants their salaries corresponding to the respective
period(s) of their suspension, and to delete the disciplinary action from complainants' service
records. 2
These material facts recited in the basic petition are virtually undisputed and we reproduce the
same hereunder:
1. Individual respondents are all Port Stewards of Catering Sub-Department, Passenger Services
Department of petitioner. Their duties and responsibilities, among others, are:
Prepares meal orders and checklists, setting up standard equipment in accordance with the
requirements of the type of service for each flight; skiing, binning, and inventorying of
Commissary supplies and equipment.
2. On various occasions, several deductions were made from their salary. The deductions
represented losses of inventoried items charged to them for mishandling of company properties .
. . which respondents resented. Such that on August 21, 1984, individual respondents,
represented by the union, made a formal notice regarding the deductions to petitioner thru Mr.
Reynaldo Abad, Manager for Catering. . . .
3. As there was no action taken on said representation, private respondents filed a formal
grievance on November 4, 1984 pursuant to the grievance machinery Step 1 of the Collective
Bargaining Agreement between petitioner and the union. . . . The topics which the union wanted
to be discussed in the said grievance were the illegal/questionable salary deductions and
inventory of bonded goods and merchandise being done by catering service personnel which
they believed should not be their duty.
4. The said grievance was submitted on November 21, 1984 to the office of Mr. Reynaldo Abad,
Manager for Catering, who at the time was on vacation leave. . . .

5. Subsequently, the grievants (individual respondents) thru the shop steward wrote a letter on
December 5, 1984 addressed to the office of Mr. Abad, who was still on leave at the time, that
inasmuch as no reply was made to their grievance which "was duly received by your secretary"
and considering that petitioner had only five days to resolve the grievance as provided for in the
CBA, said grievance as believed by them (private respondents) was deemed resolved in their
favor. . . .
6. Upon Mr. Abad's return on December 7, 1984, he immediately informed the grievants and
scheduled a meeting on December 12, 1984. . . .
7. Thereafter, the individual respondents refused to conduct inventory works. Alberto Santos, Jr.
did not conduct ramp inventory on December 7, 10 and 12. Gilbert Antonio did not conduct ramp
inventory on December 10. In like manner, Regino Duran and Houdiel Magadia did not conduct
the same on December 10 and 12.
8. At the grievance meeting which was attended by some union representatives, Mr. Abad
resolved the grievance by denying the petition of individual respondents and adopted the
position that inventory of bonded goods is part of their duty as catering service personnel, and
as for the salary deductions for losses, he rationalized:
1. It was only proper that employees are charged for the amount due to mishandling of company
property which resulted to losses. However, loss may be cost price 1/10 selling price.
9. As there was no ramp inventory conducted on the mentioned dates, Mr. Abad, on January 3,
1985 wrote by an inter-office memorandum addressed to the grievants, individual respondents
herein, for them to explain on (sic) why no disciplinary action should be taken against them for
not conducting ramp inventory. . . .
10. The directive was complied with . . . . The reason for not conducting ramp inventory was put
forth as:
4. Since the grievance step 1 was not decided and no action was done by your office within 5
days from November 21, 1984, per provision of the PAL-PALEA CBA, Art. IV, Sec. 2, the grievance
is deemed resolved in PALEA's favor.
11. Going over the explanation, Mr. Abad found the same unsatisfactory. Thus, a penalty of
suspension ranging from 7 days to 30 days were (sic) imposed depending on the number of
infractions committed. *
12. After the penalty of suspension was meted down, PALEA filed another grievance asking for
lifting of, or at least, holding in abeyance the execution of said penalty. The said grievance was
forthwith denied but the penalty of suspension with respect to respondent Ramos was modified,
such that his suspension which was originally from January 15, 1985 to April 5, 1985 was
shortened by one month and was lifted on March 5, 1985. The union, however, made a demand
for the reimbursement of the salaries of individual respondents during the period of their
suspension.
13. Petitioner stood pat (o)n the validity of the suspensions. Hence, a complaint for illegal
suspension was filed before the
Arbitration Branch of the Commission, . . . Labor Arbiter Ceferina J. Diosana, on March 17, 1986,
ruled in favor of petitioner by dismissing the complaint. . . . 3
Private respondents appealed the decision of the labor arbiter to respondent commission which
rendered the aforequoted decision setting aside the labor arbiter's order of dismissal. Petitioner's
motion for reconsideration having been denied, it interposed the present petition.

The Court is accordingly called upon to resolve the issue of whether or not public respondent
NLRC acted with grave abuse of discretion amounting to lack of jurisdiction in rendering the
aforementioned decision.
Evidently basic and firmly settled is the rule that judicial review by this Court in labor cases does
not go so far as to evaluate the sufficiency of the evidence upon which the labor officer or office
based his or its determination, but is limited to issues of jurisdiction and grave abuse of
discretion. 4 It has not been shown that respondent NLRC has unlawfully neglected the
performance of an act which the law specifically enjoins it to perform as a duty or has otherwise
unlawfully excluded petitioner from the exercise of a right to which it is entitled.
The instant case hinges on the interpretation of Section 2, Article IV of the PAL-PALEA Collective
Bargaining Agreement, (hereinafter, CBA), to wit:
Sec. 2 Processing of Grievances
xxx xxx xxx
STEP 1 Any employee who believes that he has a justifiable grievance shall take the matter up
with his shop steward. If the shop steward feels there is justification for taking the matter up with
the Company, he shall record the grievance on the grievance form heretofore agreed upon by
the parties. Two (2) copies of the grievance form properly filled, accepted, and signed shall then
be presented to and discussed by the shop steward with the division head. The division head
shall answer the grievance within five (5) days from the date of presentation by inserting his
decision on the grievance form, signing and dating same, and returning one copy to the shop
steward. If the division head fails to act within the five (5)-day regl(e)mentary period, the
grievance must be resolved in favor of the aggrieved party. If the division head's decision is not
appealed to Step II, the grievance shall be considered settled on the basis of the decision made,
and shall not be eligible for further appeal. 5 (Emphasis ours.)
Petitioner submits that since the grievance machinery was established for both labor and
management as a vehicle to thresh out whatever problems may arise in the course of their
relationship, every employee is duty bound to present the matter before management and give
the latter an opportunity to impose whatever corrective measure is possible. Under normal
circumstances, an employee should not preempt the resolution of his grievance; rather, he has
the duty to observe the status quo. 6
Citing Section 1, Article IV of the CBA, petitioner further argues that respondent employees have
the obligation, just as management has, to settle all labor disputes through friendly negotiations.
Thus, Section 2 of the CBA should not be narrowly interpreted. 7Before the prescriptive period of
five days begins to run, two concurrent requirements must be met, i.e., presentment of the
grievance and its discussion between the shop steward and the division head who in this case is
Mr. Abad. Section 2 is not self-executing; the mere filing of the grievance does not trigger the
tolling of the prescriptive period. 8
Petitioner has sorely missed the point.
It is a fact that the sympathy of the Court is on the side of the laboring classes, not only because
the Constitution imposes such sympathy, but because of the one-sided relation between labor
and capital. 9 The constitutional mandate for the promotion of labor is as explicit as it is
demanding. The purpose is to place the workingman on an equal plane with management with
all its power and influence in negotiating for the advancement of his interests and the defense
of his rights. 10Under the policy of social justice, the law bends over backward to accommodate
the interests of the working class on the humane justification that those with less privileges in
life should have more privileges in law. 11

It is clear that the grievance was filed with Mr. Abad's secretary during his absence. 12 Under
Section 2 of the CBA aforequoted, the division head shall act on the grievance within five (5)
days from the date of presentation thereof, otherwise "the grievance must be resolved in favor of
the aggrieved party." It is not disputed that the grievants knew that division head Reynaldo Abad
was then "on leave" when they filed their grievance which was received by Abad's
secretary. 13 This knowledge, however, should not prevent the application of the CBA.
On this score, respondent NLRC aptly ruled:
. . . Based on the facts heretofore narrated, division head Reynaldo Abad had to act on the
grievance of complainants within five days from 21 November 1984. Therefore, when Reynaldo
Abad, failed to act within the reglementary period, complainants, believing in good faith that the
effect of the CBA had already set in, cannot be blamed if they did not conduct ramp inventory for
the days thereafter. In this regard, respondent PAL argued that Reynaldo Abad was on leave at
the time the grievance was presented. This, however, is of no moment, for it is hard to believe
that everything under Abad's authority would have to stand still during his absence from office.
To be sure, it is to be expected that someone has to be left to attend to Abad's duties. Of course,
this may be a product of inadvertence on the part of PAL management, but certainly,
complainants should not be made to suffer the consequences. 14
Contrary to petitioner's submission, 15 the grievance of employees is not a matter which requires
the personal act of Mr. Abad and thus could not be delegated. Petitioner could at least have
assigned an officer-in-charge to look into the grievance and possibly make his recommendation
to Mr. Abad. It is of no moment that Mr. Abad immediately looked into the grievance upon
returning to work, for it must be remembered that the grievants are workingmen who suffered
salary deductions and who rely so much on their meager income for their daily subsistence and
survival. Besides, it is noteworthy that when these employees first presented their complaint on
August 21, 1984, petitioner failed to act on it. It was only after a formal grievance was filed and
after Mr. Abad returned to work on December 7, 1984 that petitioner decided to turn an ear to
their plaints.
As respondent NLRC has pointed out, Abad's failure to act on the matter may have been due to
petitioner's inadvertence, 16 but it is clearly too much of an injustice if the employees be made to
bear the dire effects thereof. Much as the latter were willing to discuss their grievance with their
employer, the latter closed the door to this possibility by not assigning someone else to look into
the matter during Abad's absence. Thus, private respondents should not be faulted for believing
that the effects of the CBA in their favor had already stepped into the controversy.
If the Court were to follow petitioner's line of reasoning, it would be easy for management to
delay the resolution of labor problems, the complaints of the workers in particular, and hide
under the cloak of its officers being "on leave" to avoid being caught by the 5-day deadline under
the CBA. If this should be allowed, the workingmen will suffer great injustice for they will
necessarily be at the mercy of their employer. That could not have been the intendment of the
pertinent provision of the CBA, much less the benevolent policy underlying our labor laws.
ACCORDINGLY, on the foregoing premises, the instant petition is hereby DENIED and the assailed
decision of respondent National Labor Relations Commission is AFFIRMED. This judgment is
immediately executory.
SO ORDERED.
Narvasa, C.J., Feliciano, Nocon and Campos, Jr., JJ., concur.
Philippine Education Co., Inc. vs. Union of Philippine Education Employees (NLU), et al.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-13778

April 29, 1960

PHILIPPINE EDUCATION CO., INC., petitioner,

vs.
UNION OF PHILIPPINE EDUCATION EMPLOYEES (NLU) and THE COURT OF INDUSTRIAL
RELATIONS, respondents.
Marcial Esposo for petitioner.
Eulogio R. Lerum for respondent Union. Jose B. Bolisay for respondent CIR.
MONTEMAYOR, J.:
The Philippine Education Company, Inc. is appealing the order of the Court of Industrial Relations,
dated February 7, 1958, directing it to reinstate its former employee, Ernesto Carpio, to his
former or equivalent position, without backpay, and from the resolution of the same court in
banc, dated March 22, 1958, denying the company's motion for reconsideration.
Ernesto Carpio and other employees of the company, members of the Union of Philippine
Education Employees (NLU) joined a strike staged on January 16, 1953. After the labor dispute
was settled, the Industrial Court ordered the reinstatement of the strikers, including Carpio. The
company, however, opposed the reinstatement of Carpio for the reason that a criminal complaint
had been filed against him in the Municipal Court of Manila for theft of magazines allegedly
belonging to the company. He was convicted and sentenced to two months and one day
of arresto mayor. On appeal to the Court of First Instance, Carpio was acquitted on the ground of
reasonable doubt.
The question of Carpio's reinstatement was heard by the Industrial Court where the parties
submitted as evidence the transcript of the stenographic notes taken during the hearing in the
criminal case before the Court of First Instance of Manila, the exhibits presented in said case, as
well as the decisions of the Municipal Court convicting him, and that of the Court of First Instance
acquitting him, or rather dismissing the case against him on reasonable doubt. After said
hearing, the Industrial Court agreed with the finding of the Court of First Instance that the offense
had not been proven beyond reasonable doubt and held that Carpio's acquittal entitled him to
reinstatement, though without backpay.
We have examined the aforementioned evidence, and we are inclined to agree with the Municipal
Court that Carpio's guilt had been duly established. At least, the preponderance of evidence was
against his innocence. The question for determination is whether the whether the acquittal of an
employee, specially on the ground of reasonable doubt, in a criminal case for theft involving
articles and merchandise belonging to his employer, entitles said employee to reinstatement.
In the case of National Labor Organization of Employees and Laborers vs. Court of Industrial
Relations, 95 Phil., 727; Off. Gaz. (9) 4219, we said:
. . . the acquittal of a employee in a criminal case is no bar to the Court of Industrial Relations,
after proper hearing, finding the same employee guilty of facts inimical to the interests of his
employer and justifying loss of confidence in him by said employer, thereby warranting his
dismissal or the refusal of the Company to reinstate him. The reason for this is not difficult to
see. The evidence required by law to establish guilt and to warrant conviction in a criminal case
substantially differs from the evidence necessary to establish responsibility or liability in a civil or

non-criminal case. The difference is in the amount and weight of evidence and also in degree. In
a criminal case, the evidence or proof must be beyond reasonable doubt while in a civil or non
criminal case it is merely preponderance of evidence. In further support of this principle we may
refer to Art. 29 of the New Civil Code (Rep. Act 386) which provides that when the accused in a
criminal case is acquitted on the ground of reasonable doubt a civil action for damages for the
same act or omission may be instituted where only a preponderance of evidence is necessary to
establish liability. From all this it is clear that the Court of Industrial Relations was justified in
denying the petition of Rivas and Tolentino for reinstatement in the cement company, because of
their illegal possession of hand grenades intended by them for purposes of sabotage in
connection with the strike on March 16, 1952.
Then in the case of National Labor Union vs. Standard Vacuum Oil Company, 73 Phil., 279, the
City Fiscal refused to prosecute two employees charged with theft for lack of evidence and yet
this Tribunal upheld their dismissal from the employer company on the ground that their
employer had ample reason to distrust them.
The relation of employer and employee, specially where the employee has access to the
employer's property in the form of articles and merchandise for sale, necessarily involves trust
and confidence. If said merchandise are lost and said loss is reasonably attributed to said
employee, and he is charged with theft, even if he is acquitted of the form of articles and
merchandise for sale, necessarily involves trust and confidence. If said merchandise are lost and
said loss is reasonably attributed to said employee, and he is charged with theft, even if he is
acquitted of the charge on reasonable doubt, when the employer has lost its confidence in him, it
would be highly unfair to require said employer to continue employing him or to reinstate him,
for in that case the former might find it necessary for its protection to employ another person to
watch and keep an eye on him. In the present case, Carpio was refused reinstatement not
because of any union affiliation or activity or because the company has been guilty of any unfair
labor practice. As already stated, Carpio was convicted in the Municipal Court and although he
was acquitted on reasonable doubt in the Court of First Instance, the company had ample reason
to distrust him. Under the circumstances, we cannot in conscience require the company to
reemploy or reinstate him.
In view of the foregoing, the appealed orders of the Industrial Court of February 7, 1958 and
March 22, 1958 are hereby reversed. No costs.
Paras, C.J., Bengzon, Bautista Angelo, Labrador, Barrera, and Gutierrez David, JJ., concur.

G.R. No. 87698 September 24, 1991

PHILIPPINE AIRLINES, INC., petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and OSCAR IRINEO,respondents.
The Legal Department, PAL for petitioner.
Francisco M. Delos Reyes for private respondent.

NARVASA, J.:p
This case treats of an employee of Philippine Airlines, Inc. (PAL), who was dismissed from his
work on August 23, 1967 on the basis of the findings and recommendations of a Fact Finding
Panel, submitted on August 11, 1967 after an investigation commenced in July, 1967 in
coordination with a well known accounting firm. 1 The Fact Finding Panel recommended the
criminal prosecution of the employee, Oscar Irineo, together with four others, namely: Rogelio
Damian, Antonio Rabasco, Jacinto Macatol and Jesus Saba, on account of complicity in irregular
refunds of international plane tickets. 2
On the basis of the panel's report, and the testimony of witnesses taken in the course of the
investigation, criminal proceedings were also initiated against four of the PAL employees above
named, namely: Oscar Irineo, Rogelio Damian, Antonio Rabasco, and Jacinto Macatol. They were
prosecuted for estafa thru falsification of commercial documents in the Court of First Instance of
Rizal, under an information filed by the Provincial Fiscal on September 25, 1968. 3The case
resulted in the conviction after due trial of all the accused on March 1, 1976; this, despite the
fiscal's having earlier moved for the dismissal of the charges as against Irineo and Macatol. 4
All four (4) defendants filed motions for reconsideration and/or new trial. All the motions were
denied except Macatol's. After due hearing on said motions, the Trial Court rendered an amended
decision datedSeptember 23, 1977 absolving Macatol of any liability for the offense charged, "for
lack of sufficient evidence." The other three appealed. 5
On July 6, 1978 about twelve (12) years after his dismissal from employment Macatol filed a
complaint for illegal dismissal against PAL in the Department of Labor. His complaint was
however dismissed by the Labor Arbiter on the ground that his right of action had prescribed.
That dismissal was affirmed by the National Labor Relations Commission in a decision
promulgated on May 30, 1980. The Commission ruled that "the running of the prescriptive period
... commenced on the date ... (Macatol's) cause of action accrued;" that such cause of action did
not accrue "upon the termination of the criminal case," but upon "his dismissal, the legality or
illegality of which could be determined soon after it was effected ... (and a) suit to contest its
legality could proceed independently of any criminal proceedings;" that "if no criminal case was
instituted, following the logic of the complainant's argument, the cause of action would not and
could not have accrued at all; ... (and) the institution of the criminal action did not bar the
complainant from filing a complaint for illegal dismissal." 6
On the other hand, the appeal taken by Oscar Irineo, Rogelio Damian, Antonio Rabasco, resulted
in a decision promulgated on September 23, 1983 by the Intermediate Appellate
Court, 7 affirming the judgment of conviction only as regards Rogelio Damian, but acquitting
Irineo and Rabasco "on grounds of reasonable doubt." 8

On May 10, 1984, seventeen (17) years after the termination of his employment on August 23,
1967, Irineo filed a complaint against PAL for reinstatement and back wages on the claim that
that termination was illegal. It is the action thus instituted that has given rise to the proceedings
now before this Court.
Irineo's action eventuated in a decision of the Labor Arbiter dated November 12,
1985, 9 decreeing his reinstatement to his position in 1967 without loss of seniority rights and the
payment to him of back wages "from August 13, 1967 up to his actual reinstatement," as well
as moral damages in the amount of P300,000.00.
The Arbiter overruled the defense of prescription asserted by PAL, among others. The Arbiter
held that since there was a PAL circular dated June 15, 1966 to the effect that "(a)n employee
charged with any crime inimical to the company's interest shall be placed under preventive
suspension until the final adjudication of his case," and there was, too, a standing order by the
Court of Industrial Relations at that time forbidding the dismissal of any employee by PAL without
court authority, the termination by PAL of Irineo's employment on August 23, 1967 merely
"amounted to a suspension per (said) PAL IRD Circular No. 66-11." According to the Arbiter, said
IRD Circular No. 66-11 was not raised in issue in the earlier case instituted by
Macatol, supra, 10 and this serves to distinguish Macatol's case from Irineo's, precluding reaching
a conclusion in the latter similar to that in the former (i.e., that the claim was barred by
prescription). The Arbiter held, in fine, that in view of said Circular No. 66-11, PAL's termination of
Irineo's employment should be deemed only as an act by which "Irineo was placed under
preventive suspension until his (criminal) case was finally adjudicated, for after all, the
arbitration branch of the Commission should put meaning to the law between the parties and
unless such law between the parties are (sic) implemented the same would become useless."
The Arbiter concluded with the following disposition:
WHEREFORE, judgment is hereby rendered directing PAL to terminate the suspension of Irineo
which it imposed on August 23, 1967 and to reinstate him to his position without loss of seniority
rights and with backwages from August 13, 1967 up to his actual reinstatement.
Lastly, moral damages in the amount of P300,000.00 is (sic) awarded to complainant.
PAL appealed to the NLRC but failed to obtain reversal of the Arbiter's judgment. In a Resolution
promulgated on February 28, 1989, the Third Division of the NLRC upheld all the Arbiter's
conclusions. 11 The NLRC agreed with the Arbiter that "applying the mandate of IRD Circular No.
66-11 which respondent PAL itself solely promulgated," Irineo was never dismissed from
employment but "was merely under preventive suspension;" and that PAL's termination of
Irineo's work was violative of the "Injunction Order dated September 3, 1963 in CIR Case No. 43IPA" (forbidding, during the pendency of said case, the dismissal of any employee by PAL without
court authority), even though that order "lost its efficacy when the parties concerned entered
into a valid Certified Bargaining Agreement" (on December 7, 1965, according to petitioner
PAL 12). It also affirmed the award of moral damages.
PAL is now before this Court, praying for the issuance of a writ ofcertiorari to nullify and set aside
the NLRC Resolution of February 28, 1989 as constituting "a plain case of patent abuse of
discretion amounting to excess of jurisdiction or lack of the same an exemplary example of
power arbitrarily exercised without due regard to the rule of law." The Court issued a temporary
restraining order on April 26, 1989 prohibiting enforcement or implementation of the challenged
resolution. 13
Required to comment in public respondent's behalf, the Office of the Solicitor General begged to
be excused, declaring that "(a)fter an exhaustive and judicious scrutiny of the records of the
case, as well as the applicable law and jurisprudence on the issues involved, ... (it could not),
without violating the law, espouse the position taken by the respondent ... (NLRC) ..." Comments

were filed by private respondent14 and the Senior Research Attorney of the NLRC in the latter's
behalf,15 which the Court resolved to treat as their answers to PAL's petition.
In light of the material facts above set out, it is not indeed possible, as the Solicitor General
holds, to defend the decision of the respondent Commission or that of the Labor Arbiter.
That there should be care and solicitude in the protection and vindication of the rights of
workingmen cannot be gainsaid; but that care and solicitude can not justify disregard of relevant
facts or eschewal of rationality in the construction of the text of applicable rules in order to arrive
at a disposition in favor of an employee who is perceived as otherwise deserving of sympathy
and commiseration.
The letter to Oscar Irineo of then PAL President Benigno P. Toda, Jr. dated August 23, 1967, based
evidently on the investigation and report of the fact finding panel, leaves no doubt that Irineo's
employment was being ended; the language is plain and categorical. It reads pertinently as
follows: 16
To: Oscar Ireneo
Comptroller's Department
For being involved in the irregular refund of tickets in the international service to the damage
and prejudice of the company, you are dismissed from the service effective immediately.
The acts committed being criminal, resulting in the swindling of the company, the Legal
Department is directed to file immediately the corresponding criminal cases against you.
To say, as both the Arbiter and the respondent Commission do, that that declaration, "you are
dismissed from the service effective immediately," should be construed merely as a suspension,
not a dismissal, from employment, is illogical if not downright ludicrous. They attempt to justify
this conclusion by adverting to a PAL circular dated June 15, 1966 to the effect that "(a)n
employee charged with any crime inimical to the company's interest shall be placed under
preventive suspension until the final adjudication of his case," and construe this as a complete
foreclosure or prohibition of any alternative or concurrent action on PAL's part, such as the
imposition of administrative sanctions or penalties; in other words, any disciplinary action
against an erring employee was absolutely dependent on the outcome of the criminal action
against the latter, no disciplinary measure of any nature being permissible against the employee
"until the final adjudication" of his criminal case. It is a construction that has nothing to support
it, is contrary to common sense, and one certainly not justified by the recorded facts.
The attempt to sustain the strained theory of dismissal-qua-suspensionby referring to a standing
order by the Court of Industrial Relations at that time forbidding the dismissal of any employee
by PAL without court authority, is equally indefensible. That prohibition was imposed only in
relation to a labor dispute then pending before the Court of Industrial Relations. That dispute
however ended when the parties entered into a collective bargaining agreement two (2) years or
so before Irineo was fired on August 23, 1967. In other words, when Irineo's employment was
terminated, the CIR injunction adverted was already functions officio and could no longer have
any relevance to that event.
There is moreover, nothing in the record to excuse respondent Irineo's omission to impugn his
termination of employment by PAL in line with the respondent commission's theory, i.e., that
under existing PAL rules and the CIR injunction, he could only be placed under preventive
suspension and therefore his dismissal was illegal. His assertion thereof after seventeen (17)
years from his discharge from employment can only mean that he slept on his rights or that his
counsel did not share the respondent Commission's belief in the soundness of the theory. His
claim must thus be rejected as time-barred, as being unpardonably tardy.

Premises considered, it appears clear to the Court that the respondent Commission's conclusions
are flawed by errors so serious as to constitute grave abuse of discretion and should on this
account be struck down.
WHEREFORE, the Court GRANTS the petition and issues the writ of certiorari prayed for,
NULLIFYING AND SETTING ASIDE the respondent Commission's Resolutions promulgated on
February 28, 1989 and on March 20, 1989, MAKING PERMANENT the temporary restraining order
issued by this Court on April 26, 1989, and DISMISSING private respondent's complaint. No costs.
SO ORDERED.
Cruz, Grio-Aquino and Medialdea, JJ., concur.
Pacific Mills, Inc vs. Zenaida Alonzo
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 78090 July 26, 1991
PACIFIC MILLS, INC., petitioner,
vs.
ZENAIDA ALONZO, respondent.
Napoleon L. Apostol for petitioner.

NARVASA, J.:p
From July 30, 1973, Zenaida Alonzo was employed as a ring frame operator in the Pacific Mills,
Inc. until September 30, 1982 when she was discharged by Management.
The record shows that in the early afternoon of September 22, 1982, Zenaida challenged
Company Inspector Ernesto Tamondong to a fight, saying: "Putang Ina mo, lumabas ka,
tarantado, kalalaki mong tao, duwag ka . . Ipagugulpi kita sa labas at kaya kitang ipakaladkad
dito sa loob ng compound palabas ng gate sa mga kamag-anak ko." And suiting action to the
word, she thereupon boxed Tamondong in the stomach. The motive for the assault was Zenaida's
resentment at having been reprimanded, together with other employees, two days earlier by
Tamondong for wasting time by engaging in Idle chatter. 1 Tamondong forthwith reported the
incident to the firm's Administrative Manager 2as well as the Chairman of Barangay Balombato,
Quezon City. 3
On September 30, 1982, Zenaida Alonzo was given a Memorandum by the company's Executive
Vice President & General Manager terminating her employment as of October 1, 1982 on various
grounds: poor work, habitual absences and tardiness, wasting time, insubordination and gross
disrespect. The service of that memorandum of dismissal on her was not preceded by any
complaint, hearing or other formality. These were apparently considered unnecessary by
Management 4 in view of the provision in the Company Rules and Regulations (embodied in the
Collective Bargaining Agreement between the company and the union representing the
employees) that:
Fighting or attempting to inflict harm to another employee, will render (sic) the aggressor to
outright dismissal.

It was only at the hearing of the complaint for illegal dismissal (and non-payment of
proportionate 13th month pay) instituted by Zenaida on October 4, 1982 in the NCR Arbitration
Branch, that evidence was presented by the company not only of the assault by Zenaida on her
superior but also of many other violations by her of company rules and regulations, in an attempt
to substantiate the validity of her dismissal from work.
The Labor Arbiter found that Alonzo had indeed verbally abused and struck her superior,
Tamondong, and rejected her contention that the assault was not punishable since it was "not
work-connected and was provoked/instigated by Ernesto Tamondong." 5 The Arbiter also declared
as "fully established the previous infractions of complainant," these being "a matter of record
and not denied by complainant (Zenaida)."
The Arbiter was of the view, however, that Alonzo was entitled to relief, because (a) the penalty
imposed was "harsh and severe and not commensurate with the offense, . . . suspension of three
(3) months . . (being) the proper, just and reasonable penalty . . .;" and because (b) the company
had failed "to investigate complainant before she was dismissed." The Arbiter thus ordered
Pacific Mills, Inc., Zenaida's employer:
. . . to reinstate complainant without loss of seniority rights and to pay her backwages from
January 1, 1983 until fully reinstated, the period from October 1, 1982 to December 31, 1982
complainant being under suspension without pay . . . (as well as) to pay complainant's 13th
month pay in the amount of THREE HUNDRED FIFTY-ONE PESOS ONLY (P351.00).
Acting on the employer's appeal, the National Labor Relations Commission rendered judgment on
March 23, 1987, sustaining the Labor Arbiter's findings. It however limited the award of back
wages to Zenaida only to three (3) years, in accordance with this Court's judgment in Feati
University Faculty Club (PAFLU) vs. Feati University, 58 SCRA 396. 6
Pacific Mills Inc. has instituted in this Court the special civil action ofcertiorari at bar praying for
nullification of the judgment of the NLRC for having been rendered with grave abuse of
discretion.
In the comment thereon, 7 required of him by the Court, the Solicitor General opined that:
. . . both the Labor Arbiter and the NLRC apparently failed to take into consideration the fact that
Zenaida Alonzo was dismissed not because of this isolated act (of assault against her superior)
but rather because of numerous and repeated violations of company rules and regulations. It was
only this last incident which compelled Pacific Mills, Inc. to finally terminate her services. It is the
totality of the infractions committed by the employee which should have been considered in
determining whether or not there is just cause for her dismissal.
Zenaida Alonzo was caught several times leaving her place of work to chat with her coemployees. This is reprehensible conduct since, as ring frame operator, she must be at her post
during work hours to prevent the occurrence of incidents which could damage the machine. The
company inspector precisely warned her against doing this. She had also been repeatedly
reprimanded for insubordination, habitual tardiness, wasting time and not wearing the required
company uniform, In spite of these infractions the company bore with her services and did not
see fit to dismiss her. Her assault on the company inspector was apparently the last straw which
compelled Pacific Mills, Inc. to terminate her services.
Accordingly, the Solicitor General recommended "payment of separation pay equivalent to three
(3) years backwages but without reinstatement" and of "proportionate 13th month pay."
For their part, the Chief Legal Officer of the NLRC, 8 and the private respondent, 9 insist that since
the dismissal of Zenaida Alonzo was not preceded by any notice of the charges and a hearing
thereon, the judgment of the NLRC must be sustained.

Decisive of this controversy is the judgment of the Court en banc inWenphil Corporation v. NLRC,
promulgated on February 8, 1989, 10 in which the following policy pronouncements were made:
The Court holds that the policy of ordering the reinstatement to the service of an employee
without loss of seniority and the payment of his wages during the period of his separation until
his actual reinstatement but not exceeding three (3) years without qualification or deduction,
when it appears he was not afforded due process, although his dismissal was found to be for just
and authorized cause in an appropriate proceeding in the Ministry of Labor and Employment,
should be re-examined. It will be highly prejudicial to the interests of the employer to impose on
him the services of an employee who has been shown to be guilty of the charges that warranted
his dismissal from employment. Indeed, it will demoralize the rank and file if the undeserving, if
not undesirable, remains in the service.
Thus in the present case, where the private respondent, who appears to be of violent temper,
caused trouble during office hours and even defied his superiors as they tried to pacify him,
should not be rewarded with reemployment and back wages. It may encourage him to do even
worse and will render a mockery of the rules of discipline that employees are required to
observe. Under the circumstances, the dismissal of the private respondent for just cause should
be maintained. He has no right to return to his former employer.
However, the petitioner (employer) must nevertheless be held to account for failure to extend to
private respondent his right to an investigation before causing his dismissal. The rule is explicit
as above discussed. The dismissal of an employee must be for just or authorized cause and after
due process (Section 1, Rule XIV, Implementing Regulations of the Labor Code). Petitioner
committed an infraction of the second requirement. Thus, it must be imposed a sanction for its
failure to give a formal notice and conduct an investigation as required by law before dismissing .
. . (respondent) from employment. Considering the circumstances of this case petitioner must
indemnify the private respondent the amount of P1,000.00. The measure of tills award depends
on the facts of each case and the gravity of the omission committed by the employer.
The Court perceives no sufficient cause, it has indeed been cited to none by the respondents, to
decline to apply the Wenphil doctrine to the case at bar.
While it is true that Pacific Mills, Inc. had not complied with the requirements of due process prior
to removing Zenaida Alonzo from employment, it is also true that subsequently, in the
proceedings before the Labor Arbiter in which Zenaida Alonzo had of course taken active part, it
had succeeded in satisfactorily proving the commission by Zenaida of many violations of
company rules and regulations justifying termination of her employment. Under the
circumstances, it is clear that, as the Solicitor General has pointed out, the continuance in the
service of the latter is patently inimical to her employer's interests and that, citingSan Miguel
Corporation v. NLRC, 11the law, in protecting the rights of the laborer authorizes neither
oppression nor self-destruction of the employer. And it was oppressive and unjust in the premises
to require reinstatement of the employee.
WHEREFORE, the petition is granted and the challenged decision of the respondent Commission
dated March 23, 1987 and that of the Labor Arbiter thereby affirmed, are NULLIFIED AND SET
ASIDE. However, the petitioner is ordered to pay private respondent a proportionate part of the
13th month pay due her, amounting to P351.00 as well as to indemnify her in the sum of
P1,000.00. No costs.
SO ORDERED.
Cruz, Gancayco, Grio-Aquino and Medialdea, JJ., concur.