WITH DIGEST

G.R. No. 78909 June 30, 1989

MATERNITY CHILDREN'S HOSPITAL, represented by ANTERA L. DORADO,
President, petitioner,
vs.
THE HONORABLE SECRETARY OF LABOR AND THE REGIONAL DlRECTOR OF LABOR,
REGION X,respondents.

MEDIALDEA, J.:
This is a petition for certiorari seeking the annulment of the Decision of the respondent Secretary of
Labor dated September 24, 1986, affirming with modification the Order of respondent Regional
Director of Labor, Region X, dated August 4, 1986, awarding salary differentials and emergency cost
of living allowances (ECOLAS) to employees of petitioner, and the Order denying petitioner's motion
for reconsideration dated May 13, 1987, on the ground of grave abuse of discretion.
Petitioner is a semi-government hospital, managed by the Board of Directors of the Cagayan de Oro
Women's Club and Puericulture Center, headed by Mrs. Antera Dorado, as holdover President. The
hospital derives its finances from the club itself as well as from paying patients, averaging 130 per
month. It is also partly subsidized by the Philippine Charity Sweepstakes Office and the Cagayan De
Oro City government.
Petitioner has forty-one (41) employees. Aside from salary and living allowances, the employees are
given food, but the amount spent therefor is deducted from their respective salaries (pp. 7778, Rollo).
On May 23, 1986, ten (10) employees of the petitioner employed in different capacities/positions
filed a complaint with the Office of the Regional Director of Labor and Employment, Region X, for
underpayment of their salaries and ECOLAS, which was docketed as ROX Case No. CW-71-86.
On June 16, 1986, the Regional Director directed two of his Labor Standard and Welfare Officers to
inspect the records of the petitioner to ascertain the truth of the allegations in the complaints (p.
98, Rollo). Payrolls covering the periods of May, 1974, January, 1985, November, 1985 and May,
1986, were duly submitted for inspection.
On July 17, 1986, the Labor Standard and Welfare Officers submitted their report confirming that
there was underpayment of wages and ECOLAs of all the employees by the petitioner, the
dispositive portion of which reads:
IN VIEW OF THE FOREGOING, deficiency on wage and ecola as verified and
confirmed per review of the respondent payrolls and interviews with the complainant
workers and all other information gathered by the team, it is respectfully
recommended to the Honorable Regional Director, this office, that Antera Dorado,
President be ORDERED to pay the amount of SIX HUNDRED FIFTY FOUR
THOUSAND SEVEN HUNDRED FIFTY SIX & 01/100 (P654,756.01), representing
underpayment of wages and ecola to the THIRTY SIX (36) employees of the said

hospital as appearing in the attached Annex "F" worksheets and/or whatever action
equitable under the premises. (p. 99, Rollo)
Based on this inspection report and recommendation, the Regional Director issued an Order dated
August 4, 1986, directing the payment of P723,888.58, representing underpayment of wages and
ECOLAs to all the petitioner's employees, the dispositive portion of which reads:
WHEREFORE, premises considered, respondent Maternity and Children Hospital is
hereby ordered to pay the above-listed complainants the total amount indicated
opposite each name, thru this Office within ten (10) days from receipt thereof.
Thenceforth, the respondent hospital is also ordered to pay its employees/workers
the prevailing statutory minimum wage and allowance.
SO ORDERED. (p. 34, Rollo)
Petitioner appealed from this Order to the Minister of Labor and Employment, Hon. Augusto S.
Sanchez, who rendered a Decision on September 24, 1986, modifying the said Order in that
deficiency wages and ECOLAs should be computed only from May 23, 1983 to May 23, 1986, the
dispositive portion of which reads:
WHEREFORE, the August 29, 1986 order is hereby MODIFIED in that the deficiency
wages and ECOLAs should only be computed from May 23, 1983 to May 23, 1986.
The case is remanded to the Regional Director, Region X, for recomputation
specifying the amounts due each the complainants under each of the applicable
Presidential Decrees. (p. 40, Rollo)
On October 24, 1986, the petitioner filed a motion for reconsideration which was denied by the
Secretary of Labor in his Order dated May 13, 1987, for lack of merit (p. 43 Rollo).
The instant petition questions the all-embracing applicability of the award involving salary
differentials and ECOLAS, in that it covers not only the hospital employees who signed the
complaints, but also those (a) who are not signatories to the complaint, and (b) those who were no
longer in the service of the hospital at the time the complaints were filed.
Petitioner likewise maintains that the Order of the respondent Regional Director of Labor, as affirmed
with modifications by respondent Secretary of Labor, does not clearly and distinctly state the facts
and the law on which the award was based. In its "Rejoinder to Comment", petitioner further
questions the authority of the Regional Director to award salary differentials and ECOLAs to private
respondents, (relying on the case of Encarnacion vs. Baltazar, G.R. No. L-16883, March 27, 1961, 1
SCRA 860, as authority for raising the additional issue of lack of jurisdiction at any stage of the
proceedings, p. 52, Rollo), alleging that the original and exclusive jurisdiction over money claims is
properly lodged in the Labor Arbiter, based on Article 217, paragraph 3 of the Labor Code.
The primary issue here is whether or not the Regional Director had jurisdiction over the case and if
so, the extent of coverage of any award that should be forthcoming, arising from his visitorial and
enforcement powers under Article 128 of the Labor Code. The matter of whether or not the decision
states clearly and distinctly statement of facts as well as the law upon which it is based, becomes
relevant after the issue on jurisdiction has been resolved.
This is a labor standards case, and is governed by Art. 128-b of the Labor Code, as amended by
E.O. No. 111. Labor standards refer to the minimum requirements prescribed by existing laws, rules,

and regulations relating to wages, hours of work, cost of living allowance and other monetary and
welfare benefits, including occupational, safety, and health standards (Section 7, Rule I, Rules on
the Disposition of Labor Standards Cases in the Regional Office, dated September 16,
1987). 1 Under the present rules, a Regional Director exercises both visitorial and enforcement power
over labor standards cases, and is therefore empowered to adjudicate money claims, provided there
stillexists an employer-employee relationship, and the findings of the regional office is not contested by
the employer concerned.
Prior to the promulgation of E.O. No. 111 on December 24, 1986, the Regional Director's authority
over money claims was unclear. The complaint in the present case was filed on May 23, 1986 when
E.O. No. 111 was not yet in effect, and the prevailing view was that stated in the case of Antonio
Ong, Sr. vs. Henry M. Parel, et al., G.R. No. 76710, dated December 21, 1987, thus:
. . . the Regional Director, in the exercise of his visitorial and enforcement powers
under Article 128 of the Labor Code, has no authority to award money claims,
properly falling within the jurisdiction of the labor arbiter. . . .
. . . If the inspection results in a finding that the employer has violated certain labor
standard laws, then the regional director must order the necessary rectifications.
However, this does not include adjudication of money claims, clearly within the ambit
of the labor arbiter's authority under Article 217 of the Code.
The Ong case relied on the ruling laid down in Zambales Base Metals Inc. vs. The Minister of Labor,
et al., (G.R. Nos. 73184-88, November 26, 1986, 146 SCRA 50) that the "Regional Director was not
empowered to share in the original and exclusive jurisdiction conferred on Labor Arbiters by Article
217."
We believe, however, that even in the absence of E. O. No. 111, Regional Directors already had
enforcement powers over money claims, effective under P.D. No. 850, issued on December 16,
1975, which transferred labor standards cases from the arbitration system to the enforcement
system.
To clarify matters, it is necessary to enumerate a series of rules and provisions of law on the
disposition of labor standards cases.
Prior to the promulgation of PD 850, labor standards cases were an exclusive function of labor
arbiters, under Article 216 of the then Labor Code (PD No. 442, as amended by PD 570-a), which
read in part:
Art. 216. Jurisdiction of the Commission. The Commission shall have exclusive
appellate jurisdiction over all cases decided by the Labor Arbiters and compulsory
arbitrators.
The Labor Arbiters shall have exclusive jurisdiction to hear and decide the following
cases involving all workers whether agricultural or non-agricultural.
xxx xxx xxx
(c) All money claims of workers, involving non-payment or
underpayment of wages, overtime compensation, separation pay,
maternity leave and other money claims arising from employee-

employer relations, except claims for workmen's compensation,

social security and medicare benefits;
(d) Violations of labor standard laws;
xxx xxx xxx
(Emphasis supplied)
The Regional Director exercised visitorial rights only under then Article 127 of the Code as follows:
ART. 127. Visitorial Powers. The Secretary of Labor or his duly authorized
representatives, including, but not restricted, to the labor inspectorate, shall have
access to employers' records and premises at any time of the day or night whenever
work is being undertaken therein, and the right to copy therefrom, to question any
employee and investigate any fact, condition or matter which may be necessary to
determine violations or in aid in the enforcement of this Title and of any Wage Order
or regulation issued pursuant to this Code.
With the promulgation of PD 850, Regional Directors were given enforcement powers, in addition to
visitorial powers. Article 127, as amended, provided in part:
SEC. 10. Article 127 of the Code is hereby amended to read as follows:
Art. 127. Visitorial and enforcement powers.
xxx xxx xxx
(b) The Secretary of Labor or his duly authorized
representatives shall have the power to order and
administer, after due notice and hearing,compliance
with the labor standards provisions of this Code
based on the findings of labor regulation officers or
industrial safety engineers made in the course of
inspection, and to issue writs of execution to the
appropriate authority for the enforcement of their
order.
xxx xxx xxx
Labor Arbiters, on the other hand, lost jurisdiction over labor standards cases. Article 216, as then
amended by PD 850, provided in part:
SEC. 22. Article 216 of the Code is hereby amended to read as follows:
Art. 216. Jurisdiction of Labor Arbiters and the Commission. (a)
The Labor Arbiters shall have exclusive jurisdiction to hear and
decide the following cases involving all workers, whether agricultural
or non-agricultural:
xxx xxx xxx

(3) All money claims of workers involving nonpayment or underpayment of wages, overtime or
premium compensation, maternity or service incentive
leave, separation pay and other money claims arising
from employer-employee relations, except claims for
employee's compensation, social security and
medicare benefits and as otherwise provided in
Article 127 of this Code.
xxx xxx xxx
(Emphasis supplied)
Under the then Labor Code therefore (PD 442 as amended by PD 570-a, as further amended by PD
850), there were three adjudicatory units: The Regional Director, the Bureau of Labor Relations and
the Labor Arbiter. It became necessary to clarify and consolidate all governing provisions on
jurisdiction into one document. 2 On April 23, 1976, MOLE Policy Instructions No. 6 was issued, and
provides in part (on labor standards cases) as follows:
POLICY INSTRUCTIONS NO. 6
TO: All Concerned
SUBJECT: DISTRIBUTION OF JURISDICTION OVER LABOR CASES
xxx xxx xxx
1. The following cases are under the exclusive original jurisdiction of
the Regional Director.
a) Labor standards cases arising from violations of
labor standard lawsdiscovered in the course of
inspection or complaints where employer-employee
relations still exist;
xxx xxx xxx
2. The following cases are under the exclusive original jurisdiction of
the Conciliation Section of the Regional Office:
a) Labor standards cases where employer-employee
relations no longer exist;
xxx xxx xxx
6. The following cases are certifiable to the Labor Arbiters:
a) Cases not settled by the Conciliation Section of the
Regional Office, namely:

1) labor standard cases where employer-employee

relations no longer exist;
xxx xxx xxx
(Emphasis supplied)
MOLE Policy Instructions No. 7 (undated) was likewise subsequently issued, enunciating the
rationale for, and the scope of, the enforcement power of the Regional Director, the first and second
paragraphs of which provide as follows:
POLICY INSTRUCTIONS NO. 7
TO: All Regional Directors
SUBJECT: LABOR STANDARDS CASES
Under PD 850, labor standards cases have been taken from the arbitration system
and placed under the enforcement system, except where a) questions of law are
involved as determined by the Regional Director, b) the amount involved exceeds
P100,000.00 or over 40% of the equity of the employer, whichever is lower, c) the
case requires evidentiary matters not disclosed or verified in the normal course of
inspection, or d) there is no more employer-employee relationship.
The purpose is clear: to assure the worker the rights and benefits due to him under
labor standards laws without having to go through arbitration. The worker need not
litigate to get what legally belongs to him. The whole enforcement machinery of the
Department of Labor exists to insure its expeditious delivery to him free of charge.
(Emphasis supplied)
Under the foregoing, a complaining employee who was denied his rights and benefits due him under
labor standards law need not litigate. The Regional Director, by virtue of his enforcement power,
assured "expeditious delivery to him of his rights and benefits free of charge", provided of course, he
was still in the employ of the firm.
After PD 850, Article 216 underwent a series of amendments (aside from being re-numbered as
Article 217) and with it a corresponding change in the jurisdiction of, and supervision over, the Labor
Arbiters:
1. PD 1367 (5-1-78) gave Labor Arbiters exclusive jurisdiction
over unresolved issues in collective bargaining, etc., and those cases
arising from employer-employee relationsduly indorsed by the
Regional Directors. (It also removed his jurisdiction over moral or
other damages) In other words, the Labor Arbiter entertained
cases certified to him. (Article 228, 1978 Labor Code.)
2. PD 1391 (5-29-78) all regional units of the National Labor
Relations Commission (NLRC) were integrated into the Regional
Offices Proper of the Ministry of Labor; effectively transferring direct
administrative control and supervision over the Arbitration Branch to
the Director of the Regional Office of the Ministry of Labor.

"Conciliable cases" which were thus previously under the jurisdiction

of the defunct Conciliation Section of the Regional Office for purposes
of conciliation or amicable settlement, became immediately
assignable to the Arbitration Branch for joint conciliation and
compulsory arbitration. In addition, the Labor Arbiter had jurisdiction
even over termination and labor-standards cases that may be
assigned to them for compulsory arbitration by the Director of the
Regional Office. PD 1391 merged conciliation and compulsory
arbitration functions in the person of the Labor Arbiter. The procedure
governing the disposition of cases at the Arbitration Branch paralleled
those in the Special Task Force and Field Services Division, with one
major exception: the Labor Arbiter exercised full and untrammelled
authority in the disposition of the case, particularly in the substantive
aspect, his decisions and orders subject to review only on appeal to
the NLRC. 3
3. MOLE Policy Instructions No. 37 Because of the seemingly
overlapping functions as a result of PD 1391, MOLE Policy
Instructions No. 37 was issued on October 7, 1978, and provided in
part:
POLICY INSTRUCTIONS NO. 37
TO: All Concerned
SUBJECT: ASSIGNMENT OF CASES TO LABOR ARBITERS
Pursuant to the provisions of Presidential Decree No. 1391 and to
insure speedy disposition of labor cases, the following guidelines are
hereby established for the information and guidance of all concerned.
1. Conciliable Cases.
Cases which are conciliable per se i.e., (a) labor standards cases
where employer-employee relationship no longer exists; (b) cases
involving deadlock in collective bargaining, except those falling under
P.D. 823, as amended; (c) unfair labor practice cases; and (d)
overseas employment cases, except those involving overseas
seamen, shall be assigned by the Regional Director to the Labor
Arbiter for conciliation and arbitration without coursing them through
the conciliation section of the Regional Office.
2. Labor Standards Cases.
Cases involving violation of labor standards laws where employeremployee relationshipstill exists shall be assigned to the Labor
Arbiters where:
a) intricate questions of law are involved; or

b) evidentiary matters not disclosed or verified in the

normal course of inspection by labor regulations
officers are required for their proper disposition.
3. Disposition of Cases.
When a case is assigned to a Labor Arbiter, all issues raised therein
shall be resolved by him including those which are originally
cognizable by the Regional Director to avoid multiplicity of
proceedings. In other words, the whole case, and not merely issues
involved therein, shall be assigned to and resolved by him.
xxx xxx xxx
(Emphasis supplied)
4. PD 1691(5-1-80) original and exclusive jurisdiction
over unresolved issues in collective bargaining and money claims,
which includes moral or other damages.
Despite the original and exclusive jurisdiction of labor arbiters over money claims,
however, the Regional Director nonetheless retained his enforcement power, and
remained empowered to adjudicate uncontested money claims.
5. BP 130 (8-21-8l) strengthened voluntary arbitration. The decree
also returned the Labor Arbiters as part of the NLRC, operating as
Arbitration Branch thereof.
6. BP 227(6-1- 82) original and exclusive jurisdiction over
questions involving legality of strikes and lock-outs.
The present petition questions the authority of the Regional Director to issue the Order, dated August
4, 1986, on the basis of his visitorial and enforcement powers under Article 128 (formerly Article 127)
of the present Labor Code. It is contended that based on the rulings in the Ong vs. Parel (supra) and
the Zambales Base Metals, Inc. vs. The Minister of Labor (supra) cases, a Regional Director is
precluded from adjudicating money claims on the ground that this is an exclusive function of the
Labor Arbiter under Article 217 of the present Code.
On August 4, 1986, when the order was issued, Article 128(b) 4 read as follows:
(b) The Minister of Labor or his duly authorized representatives shall
have the power to order and administer, after due notice and hearing,
compliance with the labor standards provisions of this Code based on
the findings of labor regulation officers or industrial safety engineers
made in the course of inspection, and to issue writs of execution to
the appropriate authority for the enforcement of their order, except in
cases where the employer contests the findings of the labor
regulations officer and raises issues which cannot be resolved
without considering evidentiary matters that are not verifiable in the
normal course of inspection. (Emphasis supplied)

On the other hand, Article 217 of the Labor Code as amended by P.D. 1691, effective May 1, 1980;
Batas Pambansa Blg. 130, effective August 21, 1981; and Batas Pambansa Blg. 227, effective June
1, 1982, inter alia, provides:
ART. 217. Jurisdiction of Labor Arbiters and the Commission. (a) The Labor
Arbiters shall have the original and exclusive jurisdiction to hear and decide within
thirty (30) working days after submission of the case by the parties for decision, the
following cases involving all workers, whether agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Those that workers may file involving wages, hours of work and
other terms and conditions of employment;
3. All money claims of workers, including those based on nonpayment or underpayment of wages, overtime compensation,
separation pay and other benefits provided by law or appropriate
agreement, except claims for employees' compensation, social
security, medicare and maternity benefits;
4. Cases involving household services; and
5. Cases arising from any violation of Article 265 of this Code,
including questions involving the legality of strikes and lock-outs.
(Emphasis supplied)
The Ong and Zambales cases involved workers who were still connected with the company.
However, in the Ong case, the employer disputed the adequacy of the evidentiary foundation
(employees' affidavits) of the findings of the labor standards inspectors while in the Zambales case,
the money claims which arose from alleged violations of labor standards provisions were not
discovered in the course of normal inspection. Thus, the provisions of MOLE Policy Instructions Nos.
6, (Distribution of Jurisdiction Over Labor Cases) and 37 (Assignment of Cases to Labor Arbiters)
giving Regional Directors adjudicatory powers over uncontested money claims discovered in the
course of normal inspection, provided an employer-employee relationship still exists, are
inapplicable.
In the present case, petitioner admitted the charge of underpayment of wages to workers still in its
employ; in fact, it pleaded for time to raise funds to satisfy its obligation. There was thus no contest
against the findings of the labor inspectors.
Barely less than a month after the promulgation on November 26, 1986 of the Zambales Base
Metals case, Executive Order No. 111 was issued on December 24, 1986, 5 amending Article 128(b) of
the Labor Code, to read as follows:
(b) THE PROVISIONS OF ARTICLE 217 OF THIS CODE TO THE
CONTRARY NOTWITHSTANDING AND IN CASES WHERE THE
RELATIONSHIP OF EMPLOYER-EMPLOYEE STILL EXISTS, the
Minister of Labor and Employment or his duly authorized
representatives shall have the power to order and administer, after
due notice and hearing, compliance with the labor standards
provisions of this Code AND OTHER LABOR LEGISLATION based
on the findings of labor regulation officers or industrial safety

engineers made in the course of inspection, and to issue writs of

execution to the appropriate authority for the enforcement of their
orders, except in cases where the employer contests the findings of
the labor regulation officer and raises issues which cannot be
resolved without considering evidentiary matters that are not
verifiable in the normal course of inspection. (Emphasis supplied)
As seen from the foregoing, EO 111 authorizes a Regional Director to order compliance by an
employer with labor standards provisions of the Labor Code and other legislation. It is Our
considered opinion however, that the inclusion of the phrase, " The provisions of Article 217 of this
Code to the contrary notwithstanding and in cases where the relationship of employer-employee still
exists" ... in Article 128(b), as amended, above-cited, merelyconfirms/reiterates the enforcement
adjudication authority of the Regional Director over uncontested money claims in cases where an
employer-employee relationship still exists. 6
Viewed in the light of PD 850 and read in coordination with MOLE Policy Instructions Nos. 6, 7 and
37, it is clear that it has always been the intention of our labor authorities to provide our workers
immediate access (when still feasible, as where an employer-employee relationship still exists) to
their rights and benefits, without being inconvenienced by arbitration/litigation processes that prove
to be not only nerve-wracking, but financially burdensome in the long run.
Note further the second paragraph of Policy Instructions No. 7 indicating that the transfer of labor
standards cases from the arbitration system to the enforcement system is
. . to assure the workers the rights and benefits due to him under labor standard
laws, without having to go through arbitration. . .
so that
. . the workers would not litigate to get what legally belongs to him. .. ensuring
delivery . . free of charge.
Social justice legislation, to be truly meaningful and rewarding to our workers, must not be hampered
in its application by long-winded arbitration and litigation. Rights must be asserted and benefits
received with the least inconvenience. Labor laws are meant to promote, not defeat, social justice.
This view is in consonance with the present "Rules on the Disposition of Labor Standard Cases in
the Regional Offices " 7 issued by the Secretary of Labor, Franklin M. Drilon on September 16, 1987.
Thus, Sections 2 and 3 of Rule II on "Money Claims Arising from Complaint Routine Inspection",
provide as follows:
Section 2. Complaint inspection. All such complaints shall immediately be
forwarded to the Regional Director who shall refer the case to the appropriate unit in
the Regional Office for assignment to a Labor Standards and Welfare Officer (LSWO)
for field inspection. When the field inspection does not produce the desired results,
the Regional Director shall summon the parties for summary investigation to expedite
the disposition of the case. . . .
Section 3. Complaints where no employer-employee relationship actually exists.
Where employer-employee relationship no longer exists by reason of the fact that it

has already been severed, claims for payment of monetary benefits fall within the
exclusive and original jurisdiction of the labor arbiters. . . . (Emphasis supplied)
Likewise, it is also clear that the limitation embodied in MOLE Policy Instructions No. 7 to amounts
not exceeding P100,000.00 has been dispensed with, in view of the following provisions of pars. (b)
and (c), Section 7 on "Restitution", the same Rules, thus:
xxx xxx xxx
(b) Plant-level restitutions may be effected for money claims not
exceeding Fifty Thousand (P50,000.00). . . .
(c) Restitutions in excess of the aforementioned amount shall be
effected at the Regional Office or at the worksite subject to the prior
approval of the Regional Director.
which indicate the intention to empower the Regional Director to award money claims in excess of
P100,000.00;provided of course the employer does not contest the findings made, based on the
provisions of Section 8 thereof:
Section 8. Compromise agreement. Should the parties arrive at an agreement as
to the whole or part of the dispute, said agreement shall be reduced in writing and
signed by the parties in the presence of the Regional Director or his duly authorized
representative.
E.O. No. 111 was issued on December 24, 1986 or three (3) months after the promulgation of the
Secretary of Labor's decision upholding private respondents' salary differentials and ECOLAs on
September 24, 1986. The amendment of the visitorial and enforcement powers of the Regional
Director (Article 128-b) by said E.O. 111 reflects the intention enunciated in Policy Instructions Nos. 6
and 37 to empower the Regional Directors to resolveuncontested money claims in cases where an
employer-employee relationship still exists. This intention must be given weight and entitled to great
respect. As held in Progressive Workers' Union, et. al. vs. F.P. Aguas, et. al. G.R. No. 59711-12, May
29, 1985, 150 SCRA 429:
. . The interpretation by officers of laws which are entrusted to their administration is
entitled to great respect. We see no reason to detract from this rudimentary rule in
administrative law, particularly when later events have proved said interpretation to
be in accord with the legislative intent. ..
The proceedings before the Regional Director must, perforce, be upheld on the basis of Article
128(b) as amended by E.O. No. 111, dated December 24, 1986, this executive order "to be
considered in the nature of a curative statute with retrospective application." (Progressive Workers'
Union, et al. vs. Hon. F.P. Aguas, et al. (Supra); M. Garcia vs. Judge A. Martinez, et al., G.R. No. L47629, May 28, 1979, 90 SCRA 331).
We now come to the question of whether or not the Regional Director erred in extending the award
to all hospital employees. We answer in the affirmative.
The Regional Director correctly applied the award with respect to those employees who signed the
complaint, as well as those who did not sign the complaint, but were still connected with the hospital

at the time the complaint was filed (See Order, p. 33 dated August 4, 1986 of the Regional Director,
Pedrito de Susi, p. 33, Rollo).
The justification for the award to this group of employees who were not signatories to the complaint
is that the visitorial and enforcement powers given to the Secretary of Labor is relevant to, and
exercisable over establishments, not over the individual members/employees, because what is
sought to be achieved by its exercise is the observance of, and/or compliance by, such
firm/establishment with the labor standards regulations. Necessarily, in case of an award resulting
from a violation of labor legislation by such establishment, the entire members/employees should
benefit therefrom. As aptly stated by then Minister of Labor Augusto S. Sanchez:
. . It would be highly derogatory to the rights of the workers, if after categorically
finding the respondent hospital guilty of underpayment of wages and ECOLAs, we
limit the award to only those who signed the complaint to the exclusion of the
majority of the workers who are similarly situated. Indeed, this would be not only
render the enforcement power of the Minister of Labor and Employment nugatory,
but would be the pinnacle of injustice considering that it would not only discriminate
but also deprive them of legislated benefits.
. . . (pp. 38-39, Rollo).
This view is further bolstered by the provisions of Sec. 6, Rule II of the "Rules on the Disposition of
Labor Standards cases in the Regional Offices" (supra) presently enforced, viz:
SECTION 6. Coverage of complaint inspection. A complaint inspection shall not
be limited to the specific allegations or violations raised by the complainants/workers
but shall be a thorough inquiry into and verification of the compliance by employer
with existing labor standards and shall cover all workers similarly situated. (Emphasis
supplied)
However, there is no legal justification for the award in favor of those employees who were no longer
connectedwith the hospital at the time the complaint was filed, having resigned therefrom in 1984,
viz:
1. Jean (Joan) Venzon (See Order, p. 33, Rollo)
2. Rosario Paclijan
3. Adela Peralta
4. Mauricio Nagales
5. Consesa Bautista
6. Teresita Agcopra
7. Felix Monleon
8. Teresita Salvador
9. Edgar Cataluna; and

10. Raymond Manija ( p.7, Rollo)

The enforcement power of the Regional Director cannot legally be upheld in cases of separated
employees. Article 129 of the Labor Code, cited by petitioner (p. 54, Rollo) is not applicable as said
article is in aid of the enforcement power of the Regional Director; hence, not applicable where the
employee seeking to be paid underpayment of wages is already separated from the service. His
claim is purely a money claim that has to be the subject of arbitration proceedings and therefore
within the original and exclusive jurisdiction of the Labor Arbiter.
Petitioner has likewise questioned the order dated August 4, 1986 of the Regional Director in that it
does not clearly and distinctly state the facts and the law on which the award is based.
We invite attention to the Minister of Labor's ruling thereon, as follows:
Finally, the respondent hospital assails the order under appeal as null and void
because it does not clearly and distinctly state the facts and the law on which the
awards were based. Contrary to the pretensions of the respondent hospital, we have
carefully reviewed the order on appeal and we found that the same contains a brief
statement of the (a) facts of the case; (b) issues involved; (c) applicable laws; (d)
conclusions and the reasons therefor; (e) specific remedy granted (amount
awarded). (p. 40, Rollo)
ACCORDINGLY, this petition should be dismissed, as it is hereby DISMISSED, as regards all
persons still employed in the Hospital at the time of the filing of the complaint, but GRANTED as
regards those employees no longer employed at that time.
SO ORDERED.
(DIGEST PDF)
[G.R. No. 47800. December 2, 1940.]
MAXIMO CALALANG, Petitioner, v. A. D. WILLIAMS, ET AL., Respondents.
Maximo Calalang in his own behalf.
Solicitor General Ozaeta and Assistant Solicitor General Amparo for respondents Williams,
Fragante and Bayan
City Fiscal Mabanag for the other respondents.
SYLLABUS
1. CONSTITUTIONAL LAW; CONSTITUTIONALITY OF COMMONWEALTH ACT No. 648; DELEGATION OF
LEGISLATIVE POWER; AUTHORITY OF DIRECTOR OF PUBLIC WORKS AND SECRETARY OF PUBLIC WORKS
AND COMMUNICATIONS TO PROMULGATE RULES AND REGULATIONS. The provisions of section 1 of
Commonwealth Act No. 648 do not confer legislative power upon the Director of Public Works and the
Secretary of Public Works and Communications. The authority therein conferred upon them and under which
they promulgated the rules and regulations now complained of is not to determine what public policy
demands but merely to carry out the legislative policy laid down by the National Assembly in said Act, to wit,
"to promote safe transit upon, and avoid obstructions on, roads and streets designated as national roads by
acts of the National Assembly or by executive orders of the President of the Philippines" and to close them
temporarily to any or all classes of traffic "whenever the condition of the road or the traffic thereon makes
such action necessary or advisable in the public convenience and interest." The delegated power, if at all,
therefore, is not the determination of what the law shall be, but merely the ascertainment of the facts and

circumstances upon which the application of said law is to be predicated. To promulgate rules and
regulations on the use of national roads and to determine when and how long a national road should be
closed to traffic, in view of the condition of the road or the traffic thereon and the requirements of public
convenience and interest, is an administrative function which cannot be directly discharged by the National
Assembly. It must depend on the discretion of some other government official to whom is confided the duty
of determining whether the proper occasion exists for executing the law. But it cannot be said that the
exercise of such discretion is the making of the law.
2. ID.; ID.; POLICE POWER; PERSONAL LIBERTY; GOVERNMENTAL AUTHORITY. Commonwealth Act No.
548 was passed by the National Assembly in the exercise of the paramount police power of the state. Said
Act, by virtue of which the rules and regulations complained of were promulgated, aims to promote safe
transit upon and avoid obstructions on national roads, in the interest and convenience of the public. In
enacting said law, therefore, the National Assembly was prompted by considerations of public convenience
and welfare. It was inspired by a desire to relieve congestion of traffic, which is, to say the least, a menace
to public safety. Public welfare, then, lies at the bottom of the enactment of said law, and the state in order
to promote the general welfare may interfere with personal liberty, with property, and with business and
occupations. Persons and property may be subjected to all kinds of restraints and burdens, in order to
secure the general comfort, health, and prosperity of the state (U.S. v. Gomer Jesus, 31 Phil., 218). To this
fundamental aim of our Government the rights of the individual are subordinated. Liberty is a blessing
without which life is a misery, but liberty should not be made to prevail over authority because then society
will fall into anarchy. Neither should authority be made to prevail over liberty because then the individual will
fall into slavery. The citizen should achieve the required balance of liberty and authority in his mind through
education and, personal discipline, so that there may be established the resultant equilibrium, which means
peace and order and happiness for all. The moment greater authority is conferred upon the government,
logically so much is withdrawn from the residuum of liberty which resides in the people. The paradox lies in
the fact that the apparent curtailment of liberty is precisely the very means of insuring its preservation.
3. ID.; ID.; SOCIAL JUSTICE. Social justice is "neither communism, nor despotism, nor atomism, nor
anarchy," but the humanization of laws and the equalization of social and economic forces by the State so
that justice in its rational and objectively secular conception may at least be approximated. Social justice
means the promotion of the welfare of all the people, the adoption by the Government of measures
calculated to insure economic stability of all the competent elements of society, through the maintenance of
a proper economic and social equilibrium in the interrelations of the members of the community,
constitutionally, through the adoption of measures legally justifiable, or extra-constitutionally, through the
exercise of powers underlying the existence of all governments on the time-honored principle of salus populi
est suprema lex. Social justice, therefore, must be founded on the recognition of the necessity of
interdependence among divers and diverse units of a society and of the protection that should be equally
and evenly extended to all groups as a combined force in our social and economic life, consistent with the
fundamental and paramount objective of the state of promoting the health, comfort, and quiet of all
persons, and of bringing about "the greatest good to the greatest number."

DECISION

LAUREL, J.:

Maximo Calalang, in his capacity as a private citizen and as a taxpayer of Manila, brought before this court
this petition for a writ of prohibition against the respondents, A. D. Williams, as Chairman of the National
Traffic Commission; Vicente Fragante, as Director of Public Works; Sergio Bayan, as Acting Secretary of
Public Works and Communications; Eulogio Rodriguez, as Mayor of the City of Manila; and Juan Dominguez,
as Acting Chief of Police of Manila.
It is alleged in the petition that the National Traffic Commission, in its resolution of July 17, 1940, resolved
to recommend to the Director of Public Works and to the Secretary of Public Works and Communications that
animal-drawn vehicles be prohibited from passing along Rosario Street extending from Plaza Calderon de la
Barca to Dasmarias Street, from 7:30 a.m. to 12:30 p.m. and from 1:30 p.m. to 5:30 p.m.; and along
Rizal Avenue extending from the railroad crossing at Antipolo Street to Echague Street, from 7 a.m. to 11
p.m., from a period of one year from the date of the opening of the Colgante Bridge to traffic; that the
Chairman of the National Traffic Commission, on July 18, 1940 recommended to the Director of Public Works

the adoption of the measure proposed in the resolution aforementioned, in pursuance of the provisions of
Commonwealth Act No. 548 which authorizes said Director of Public Works, with the approval of the
Secretary of Public Works and Communications, to promulgate rules and regulations to regulate and control
the use of and traffic on national roads; that on August 2, 1940, the Director of Public Works, in his first
indorsement to the Secretary of Public Works and Communications, recommended to the latter the approval
of the recommendation made by the Chairman of the National Traffic Commission as aforesaid, with the
modification that the closing of Rizal Avenue to traffic to animal-drawn vehicles be limited to the portion
thereof extending from the railroad crossing at Antipolo Street to Azcarraga Street; that on August 10,
1940, the Secretary of Public Works and Communications, in his second indorsement addressed to the
Director of Public Works, approved the recommendation of the latter that Rosario Street and Rizal Avenue be
closed to traffic of animal-drawn vehicles, between the points and during the hours as above indicated, for a
period of one year from the date of the opening of the Colgante Bridge to traffic; that the Mayor of Manila
and the Acting Chief of Police of Manila have enforced and caused to be enforced the rules and regulations
thus adopted; that as a consequence of such enforcement, all animal-drawn vehicles are not allowed to pass
and pick up passengers in the places above-mentioned to the detriment not only of their owners but of the
riding public as well.
It is contended by the petitioner that Commonwealth Act No. 548 by which the Director of Public Works, with
the approval of the Secretary of Public Works and Communications, is authorized to promulgate rules and
regulations for the regulation and control of the use of and traffic on national roads and streets is
unconstitutional because it constitutes an undue delegation of legislative power. This contention is
untenable. As was observed by this court in Rubi v. Provincial Board of Mindoro (39 Phil, 660, 700), "The
rule has nowhere been better stated than in the early Ohio case decided by Judge Ranney, and since
followed in a multitude of cases, namely: The true distinction therefore is between the delegation of power
to make the law, which necessarily involves a discretion as to what it shall be, and conferring an authority or
discretion as to its execution, to be exercised under and in pursuance of the law. The first cannot be done;
to the latter no valid objection can be made. (Cincinnati, W. & Z. R. Co. v. Commrs. Clinton County, 1 Ohio
St., 88.) Discretion, as held by Chief Justice Marshall in Wayman v. Southard (10 Wheat., 1) may be
committed by the Legislature to an executive department or official. The Legislature may make decisions of
executive departments or subordinate officials thereof, to whom it has committed the execution of certain
acts, final on questions of fact. (U.S. v. Kinkead, 248 Fed., 141.) The growing tendency in the decisions is to
give prominence to the necessity of the case."
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Section 1 of Commonwealth Act No. 548 reads as follows:

jgc:chanroble s.com.ph

"SECTION 1. To promote safe transit upon, and avoid obstructions on, roads and streets designated as
national roads by acts of the National Assembly or by executive orders of the President of the Philippines,
the Director of Public Works, with the approval of the Secretary of Public Works and Communications, shall
promulgate the necessary rules and regulations to regulate and control the use of and traffic on such roads
and streets. Such rules and regulations, with the approval of the President, may contain provisions
controlling or regulating the construction of buildings or other structures within a reasonable distance from
along the national roads. Such roads may be temporarily closed to any or all classes of traffic by the Director
of Public Works and his duly authorized representatives whenever the condition of the road or the traffic
thereon makes such action necessary or advisable in the public convenience and interest, or for a specified
period, with the approval of the Secretary of Public Works and Communications."
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The above provisions of law do not confer legislative power upon the Director of Public Works and the
Secretary of Public Works and Communications. The authority therein conferred upon them and under which
they promulgated the rules and regulations now complained of is not to determine what public policy
demands but merely to carry out the legislative policy laid down by the National Assembly in said Act, to wit,
"to promote safe transit upon and avoid obstructions on, roads and streets designated as national roads by
acts of the National Assembly or by executive orders of the President of the Philippines" and to close them
temporarily to any or all classes of traffic "whenever the condition of the road or the traffic makes such
action necessary or advisable in the public convenience and interest." The delegated power, if at all,
therefore, is not the determination of what the law shall be, but merely the ascertainment of the facts and
circumstances upon which the application of said law is to be predicated. To promulgate rules and
regulations on the use of national roads and to determine when and how long a national road should be
closed to traffic, in view of the condition of the road or the traffic thereon and the requirements of public
convenience and interest, is an administrative function which cannot be directly discharged by the National
Assembly. It must depend on the discretion of some other government official to whom is confided the duty
of determining whether the proper occasion exists for executing the law. But it cannot be said that the
exercise of such discretion is the making of the law. As was said in Lockes Appeal (72 Pa. 491): "To assert

that a law is less than a law, because it is made to depend on a future event or act, is to rob the Legislature
of the power to act wisely for the public welfare whenever a law is passed relating to a state of affairs not
yet developed, or to things future and impossible to fully know." The proper distinction the court said was
this: "The Legislature cannot delegate its power to make the law; but it can make a law to delegate a power
to determine some fact or state of things upon which the law makes, or intends to make, its own action
depend. To deny this would be to stop the wheels of government. There are many things upon which wise
and useful legislation must depend which cannot be known to the law-making power, and, must, therefore,
be a subject of inquiry and determination outside of the halls of legislation." (Field v. Clark, 143 U. S. 649,
694; 36 L. Ed. 294.)
In the case of People v. Rosenthal and Osmea, G.R. Nos. 46076 and 46077, promulgated June 12, 1939,
and in Pangasinan Transportation v. The Public Service Commission, G.R. No. 47065, promulgated June 26,
1940, this Court had occasion to observe that the principle of separation of powers has been made to adapt
itself to the complexities of modern governments, giving rise to the adoption, within certain limits, of the
principle of "subordinate legislation," not only in the United States and England but in practically all modern
governments. Accordingly, with the growing complexity of modern life, the multiplication of the subjects of
governmental regulations, and the increased difficulty of administering the laws, the rigidity of the theory of
separation of governmental powers has, to a large extent, been relaxed by permitting the delegation of
greater powers by the legislative and vesting a larger amount of discretion in administrative and executive
officials, not only in the execution of the laws, but also in the promulgation of certain rules and regulations
calculated to promote public interest.
The petitioner further contends that the rules and regulations promulgated by the respondents pursuant to
the provisions of Commonwealth Act No. 548 constitute an unlawful interference with legitimate business or
trade and abridge the right to personal liberty and freedom of locomotion. Commonwealth Act No. 548 was
passed by the National Assembly in the exercise of the paramount police power of the state.
Said Act, by virtue of which the rules and regulations complained of were promulgated, aims to promote
safe transit upon and avoid obstructions on national roads, in the interest and convenience of the public. In
enacting said law, therefore, the National Assembly was prompted by considerations of public convenience
and welfare. It was inspired by a desire to relieve congestion of traffic. which is, to say the least, a menace
to public safety. Public welfare, then, lies at the bottom of the enactment of said law, and the state in order
to promote the general welfare may interfere with personal liberty, with property, and with business and
occupations. Persons and property may be subjected to all kinds of restraints and burdens, in order to
secure the general comfort, health, and prosperity of the state (U.S. v. Gomez Jesus, 31 Phil., 218). To this
fundamental aim of our Government the rights of the individual are subordinated. Liberty is a blessing
without which life is a misery, but liberty should not be made to prevail over authority because then society
will fall into anarchy. Neither should authority be made to prevail over liberty because then the individual will
fall into slavery. The citizen should achieve the required balance of liberty and authority in his mind through
education and personal discipline, so that there may be established the resultant equilibrium, which means
peace and order and happiness for all. The moment greater authority is conferred upon the government,
logically so much is withdrawn from the residuum of liberty which resides in the people. The paradox lies in
the fact that the apparent curtailment of liberty is precisely the very means of insuring its preservation.
The scope of police power keeps expanding as civilization advances. As was said in the case of Dobbins v.
Los Angeles (195 U.S. 223, 238; 49 L. ed. 169), "the right to exercise the police power is a continuing one,
and a business lawful today may in the future, because of the changed situation, the growth of population or
other causes, become a menace to the public health and welfare, and be required to yield to the public
good." And in People v. Pomar (46 Phil., 440), it was observed that "advancing civilization is bringing within
the police power of the state today things which were not thought of as being within such power yesterday.
The development of civilization, the rapidly increasing population, the growth of public opinion, with an
increasing desire on the part of the masses and of the government to look after and care for the interests of
the individuals of the state, have brought within the police power many questions for regulation which
formerly were not so considered."
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The petitioner finally avers that the rules and regulations complained of infringe upon the constitutional
precept regarding the promotion of social justice to insure the well-being and economic security of all the
people. The promotion of social justice, however, is to be achieved not through a mistaken sympathy
towards any given group. Social justice is "neither communism, nor despotism, nor atomism, nor anarchy,"
but the humanization of laws and the equalization of social and economic forces by the State so that justice
in its rational and objectively secular conception may at least be approximated. Social justice means the
promotion of the welfare of all the people, the adoption by the Government of measures calculated to insure

economic stability of all the competent elements of society, through the maintenance of a proper economic
and social equilibrium in the interrelations of the members of the community, constitutionally, through the
adoption of measures legally justifiable, or extra-constitutionally, through the exercise of powers underlying
the existence of all governments on the time-honored principle of salus populi est suprema lex.
Social justice, therefore, must be founded on the recognition of the necessity of interdependence among
divers and diverse units of a society and of the protection that should be equally and evenly extended to all
groups as a combined force in our social and economic life, consistent with the fundamental and paramount
objective of the state of promoting the health, comfort, and quiet of all persons, and of bringing about "the
greatest good to the greatest number."
cralaw virtua1aw library

In view of the foregoing, the writ of prohibition prayed for is hereby denied, with costs against the petitioner.
So ordered.

DIGEST

Calalang v Williams (Labor Standards)

Calalang v Williams
GR No. 47800
December 2, 1940
FACTS:
Pursuant to the power delegated to it by the Legislature, the Director of Public Works
promulgated rules and regulations pertaining to the closure of Rosario Street and Rizal
Avenue to traffic of
animal-drawn vehicles for a year from the date of the opening of the Colgante Bridge to
traffic.
Among others, the petitioner Calalang, concerned citizen, aver that the rules and
regulations complained of:
infringe upon constitutional precept on the promotion of social justice to insure the well
being and economic security of all people;
and that it constitutes unlawful interference with legitimate business or trade and abridge
the right to personal liberty and freedom of locomotion.
ISSUE: Whether or not the rules and regulation promote social justice.
HELD:
YES, it still promotes social justice. In enacting the said law, the National Assembly was
prompted by considerations of public convenience and welfare.
The promotion of Social Justice is to be adhered not through a mistaken sympathy towards
any given group (e.g. the poor - because social justice is bringing the greatest good to the
greatest number, not necessarily just the poor like the drivers of the animal-drawn
vehicles).
Social justice:
: "neither communism, nor despotism, nor atomism, nor anarchy," but the humanization of
laws and the equalization of social and economic force by the State so that justice in its
rational and objectively secular conception may at least be approximated.

: the promotion of the welfare of all the people, the adoption by the Government of
measures calculated to insure economic stability of all the competent elements of society,
through the maintenance of a proper economic and social equilibrium in the interrelations of
the members of the
community, constitutionally, through the adoption of measures
legally justifiable, or extra-constitutionally, through the exercise of powers underlying the
existence of all governments on the time-honored principle of salus populi est suprema lex.
: must be founded on the recognition of the necessity of interdependence among divers and
diverse units of a society and of the protection that should be equally and evenly extended
to all groups as a combined force in our social and economic life, consistent with the
fundamental and paramount
objective of the state of promoting the health, comfort and
quiet of all persons, and of bringing about "the greatest good to the greatest number."
RATIO:
(1) Liberty is a blessing without which life is a misery, but liberty should not be made to
prevail over authority because then society will fall into anarchy.
(2)The citizen should achieve the required balance of liberty and authority in his mind
through education and personal discipline so that there may be established the resultant
equilibrium, which means peace and order and happiness of all.

G.R. No. 174585

October 19, 2007

FEDERICO M. LEDESMA, JR., Petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION (NLRC-SECOND DIVISION) HONS. RAUL T.
AQUINO, VICTORIANO R. CALAYCAY and ANGELITA A. GACUTAN ARE THE
COMMISSIONERS, PHILIPPINE NAUTICAL TRAINING INC., ATTY. HERNANI FABIA, RICKY TY,
PABLO MANOLO, C. DE LEON and TREENA CUEVA, Respondents.
DECISION
CHICO-NAZARIO, J.:
This a Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court, filed by
petitioner Federico Ledesma, Jr., seeking to reverse and set aside the Decision, 1 dated 28 May
2005, and the Resolution,2 dated 7 September 2006, of the Court of Appeals in CA-G.R. SP No.
79724. The appellate court, in its assailed Decision and Resolution, affirmed the Decision dated 15
April 2003, and Resolution dated 9 June 2003, of the National Labor Relations Commission (NLRC),
dismissing petitioners complaint for illegal dismissal and ordering the private respondent Philippine
National Training Institute (PNTI) to reinstate petitioner to his former position without loss of seniority
rights.
The factual and procedural antecedents of the instant petition are as follows:
On 4 December 1998, petitioner was employed as a bus/service driver by the private respondent on
probationary basis, as evidenced by his appointment.3 As such, he was required to report at private
respondents training site in Dasmarias, Cavite, under the direct supervision of its site administrator,
Pablo Manolo de Leon (de Leon).4

On 11 November 2000, petitioner filed a complaint against de Leon for allegedly abusing his
authority as site administrator by using the private respondents vehicles and other facilities for
personal ends. In the same complaint, petitioner also accused de Leon of immoral conduct allegedly
carried out within the private respondents premises. A copy of the complaint was duly received by
private respondents Chief Accountant, Nita Azarcon (Azarcon). 5
On 27 November 2000, de Leon filed a written report against the petitioner addressed to private
respondents Vice-President for Administration, Ricky Ty (Ty), citing his suspected drug use.
In view of de Leons report, private respondents Human Resource Manager, Trina Cueva (HR
Manager Cueva), on 29 November 2000, served a copy of a Notice to petitioner requiring him to
explain within 24 hours why no disciplinary action should be imposed on him for allegedly violating
Section 14, Article IV of the private respondents Code of Conduct. 6
On 3 December 2000, petitioner filed a complaint for illegal dismissal against private respondent
before the Labor Arbiter.
In his Position Paper,7 petitioner averred that in view of the complaint he filed against de Leon for his
abusive conduct as site administrator, the latter retaliated by falsely accusing petitioner as a drug
user. VP for Administration Ty, however, instead of verifying the veracity of de Leons report, readily
believed his allegations and together with HR Manager Cueva, verbally dismissed petitioner from
service on 29 November 2000.
Petitioner alleged that he was asked to report at private respondents main office in Espaa, Manila,
on 29 November 2000. There, petitioner was served by HR Manager Cueva a copy of the Notice to
Explain together with the copy of de Leons report citing his suspected drug use. After he was made
to receive the copies of the said notice and report, HR Manager Cueva went inside the office of VP
for Administration Ty. After a while, HR Manager Cueva came out of the office with VP for
Administration Ty. To petitioners surprise, HR Manager Cueva took back the earlier Notice to
Explain given to him and flatly declared that there was no more need for the petitioner to explain
since his drug test result revealed that he was positive for drugs. When petitioner, however, asked
for a copy of the said drug test result, HR Manager Cueva told him that it was with the companys
president, but she would also later claim that the drug test result was already with the proper
authorities at Camp Crame.8
Petitioner was then asked by HR Manager Cueva to sign a resignation letter and also remarked that
whether or not petitioner would resign willingly, he was no longer considered an employee of private
respondent. All these events transpired in the presence of VP for Administration Ty, who even
convinced petitioner to just voluntarily resign with the assurance that he would still be given
separation pay. Petitioner did not yet sign the resignation letter replying that he needed time to think
over the offers. When petitioner went back to private respondents training site in Dasmarias,
Cavite, to get his bicycle, he was no longer allowed by the guard to enter the premises. 9
On the following day, petitioner immediately went to St. Dominic Medical Center for a drug test and
he was found negative for any drug substance. With his drug result on hand, petitioner went back to
private respondents main office in Manila to talk to VP for Administration Ty and HR Manager Cueva
and to show to them his drug test result. Petitioner then told VP for Administration Ty and HR
Manager Cueva that since his drug test proved that he was not guilty of the drug use charge against
him, he decided to continue to work for the private respondent. 10
On 2 December 2000, petitioner reported for work but he was no longer allowed to enter the training
site for he was allegedly banned therefrom according to the guard on duty. This incident prompted

the petitioner to file the complaint for illegal dismissal against the private respondent before the
Labor Arbiter.
For its part, private respondent countered that petitioner was never dismissed from employment but
merely served a Notice to Explain why no disciplinary action should be filed against him in view of
his superiors report that he was suspected of using illegal drugs. Instead of filing an answer to the
said notice, however, petitioner prematurely lodged a complaint for illegal dismissal against private
respondent before the Labor Arbiter.11
Private respondent likewise denied petitioners allegations that it banned the latter from entering
private respondents premises. Rather, it was petitioner who failed or refused to report to work after
he was made to explain his alleged drug use. Indeed, on 3 December 2000, petitioner was able to
claim at the training site his salary for the period of 16-30 November 2000, as evidenced by a copy
of the pay voucher bearing petitioners signature. Petitioners accusation that he was no longer
allowed to enter the training site was further belied by the fact that he was able to claim his 13th
month pay thereat on 9 December 2000, supported by a copy of the pay voucher signed by
petitioner.12
On 26 July 2002, the Labor Arbiter rendered a Decision,13 in favor of the petitioner declaring illegal
his separation from employment. The Labor Arbiter, however, did not order petitioners reinstatement
for the same was no longer practical, and only directed private respondent to pay petitioner
backwages. The dispositive portion of the Labor Arbiters Decision reads:
WHEREFORE, premises considered, the dismissal of the [petitioner] is herein declared to be illegal.
[Private respondent] is directed to pay the complainant backwages and separation pay in the total
amount of One Hundred Eighty Four Thousand Eight Hundred Sixty One Pesos and Fifty Three
Centavos (P184, 861.53).14
Both parties questioned the Labor Arbiters Decision before the NLRC. Petitioner assailed the portion
of the Labor Arbiters Decision denying his prayer for reinstatement, and arguing that the doctrine of
strained relations is applied only to confidential employees and his position as a driver was not
covered by such prohibition.15 On the other hand, private respondent controverted the Labor Arbiters
finding that petitioner was illegally dismissed from employment, and insisted that petitioner was
never dismissed from his job but failed to report to work after he was asked to explain regarding his
suspected drug use.16
1wphi1

On 15 April 2003, the NLRC granted the appeal raised by both parties and reversed the Labor
Arbiters Decision.17 The NLRC declared that petitioner failed to establish the fact of dismissal for his
claim that he was banned from entering the training site was rendered impossible by the fact that he
was able to subsequently claim his salary and 13th month pay. Petitioners claim for reinstatement
was, however, granted by the NLRC. The decretal part of the NLRC Decision reads:
WHEREFORE, premises considered, the decision under review is, hereby REVERSED and SET
ASIDE, and another entered, DISMISSING the complaint for lack of merit.
[Petitioner] is however, ordered REINSTATED to his former position without loss of seniority rights,
but WITHOUT BACKWAGES.18
The Motion for Reconsideration filed by petitioner was likewise denied by the NLRC in its Resolution
dated 29 August 2003.19

The Court of Appeals dismissed petitioners Petition for Certiorari under Rule 65 of the Revised
Rules of Court, and affirmed the NLRC Decision giving more credence to private respondents
stance that petitioner was not dismissed from employment, as it is more in accord with the evidence
on record and the attendant circumstances of the instant case. 20 Similarly ill-fated was petitioners
Motion for Reconsideration, which was denied by the Court of Appeals in its Resolution issued on 7
September 2006. 21
Hence, this instant Petition for Review on Certiorari22 under Rule 45 of the Revised Rules of
Court, filed by petitioner assailing the foregoing Court of Appeals Decision and Resolution on the
following grounds:
I.
WHETHER, THE HON. COURT OF APPEALS COMMITTED A MISAPPREHENSION OF
FACTS, AND THE ASSAILED DECISION IS NOT SUPPORTED BY THE EVIDENCE ON
RECORD. PETITIONERS DISMISSAL WAS ESTABLISHED BY THE UNCONTRADICTED
EVIDENCES ON RECORD, WHICH WERE MISAPPRECIATED BY PUBLIC RESPONDENT
NLRC, AND HAD THESE BEEN CONSIDERED THE INEVITABLE CONCLUSION WOULD
BE THE AFFIRMATION OF THE LABOR ARBITERS DECISION FINDING ILLEGAL
DISMISSAL
II.
WHETHER, THE HON. COURT OF APPEALS SUBVERTED DUE PROCESS OF LAW
WHEN IT DID NOT CONSIDER THE EVIDENCE ON RECORD SHOWING THAT THERE
WAS NO JUST CAUSE FOR DISMISSAL AS PETITIONER IS NOT A DRUG USER AND
THERE IS NO EVIDENCE TO SUPPORT THIS GROUND FOR DISMISSAL.
III.
WHETHER, THE HON. COURT OF APPEALS COMMITTED REVERSIBLE ERROR OF
LAW IN NOT FINDING THAT RESPONDENTS SUBVERTED PETITIONERS RIGHT TO
DUE PROCESS OF THE LAW.23
Before we delve into the merits of this case, it is best to stress that the issues raised by petitioner in
this instant petition are factual in nature which is not within the office of a Petition for
Review.24 The raison detre for this rule is that, this Court is not a trier of facts and does not routinely
undertake the re-examination of the evidence presented by the contending parties for the factual
findings of the labor officials who have acquired expertise in their own fields are accorded not only
respect but even finality, and are binding upon this Court.25
However, when the findings of the Labor Arbiter contradict those of the NLRC, departure from the
general rule is warranted, and this Court must of necessity make an infinitesimal scrunity and
examine the records all over again including the evidence presented by the opposing parties to
determine which findings should be preferred as more conformable with evidentiary facts. 26
The primordial issue in the petition at bar is whether the petitioner was illegally dismissed from
employment.
The Labor Arbiter found that the petitioner was illegally dismissed from employment warranting the
payment of his backwages. The NLRC and the Court of Appeals found otherwise.

In reversing the Labor Arbiters Decision, the NLRC underscored the settled evidentiary rule that
before the burden of proof shifts to the employer to prove the validity of the employees dismissal,
the employee must first sufficiently establish that he was indeed dismissed from employment. The
petitioner, in the present case, failed to establish the fact of his dismissal. The NLRC did not give
credence to petitioners allegation that he was banned by the private respondent from entering the
workplace, opining that had it been true that petitioner was no longer allowed to enter the training
site when he reported for work thereat on 2 December 2000, it is quite a wonder he was able to do
so the very next day, on 3 December 2000, to claim his salary.27
The Court of Appeals validated the above conclusion reached by the NLRC and further rationated
that petitioners positive allegations that he was dismissed from service was negated by substantial
evidence to the contrary. Petitioners averments of what transpired inside private respondents main
office on 29 November 2000, when he was allegedly already dismissed from service, and his claim
that he was effectively banned from private respondents premises are belied by the fact that he was
able to claim his salary for the period of 16-30 November 2000 at private respondents training site.
Petitioner, therefore, is now before this Court assailing the Decisions handed down by the NLRC and
the Court of Appeals, and insisting that he was illegally dismissed from his employment. Petitioner
argues that his receipt of his earned salary for the period of 16-30 November 2000, and his 13th
month pay, is neither inconsistent with nor a negation of his allegation of illegal dismissal. Petitioner
maintains that he received his salary and benefit only from the guardhouse, for he was already
banned from the work premises.
We are not persuaded.
Well-entrenched is the principle that in order to establish a case before judicial and quasiadministrative bodies, it is necessary that allegations must be supported by substantial
evidence.28 Substantial evidence is more than a mere scintilla. It means such relevant evidence as a
reasonable mind might accept as adequate to support a conclusion. 29
In the present case, there is hardly any evidence on record so as to meet the quantum of evidence
required, i.e., substantial evidence. Petitioners claim of illegal dismissal is supported by no other
than his own bare, uncorroborated and, thus, self-serving allegations, which are also incoherent,
inconsistent and contradictory.
Petitioner himself narrated that when his presence was requested on 29 November 2000 at the
private respondents main office where he was served with the Notice to Explain his superiors report
on his suspected drug use, VP for Administration Ty offered him separation pay if he will just
voluntarily resign from employment. While we do not condone such an offer, neither can we construe
that petitioner was dismissed at that instance. Petitioner was only being given the option to either
resign and receive his separation pay or not to resign but face the possible disciplinary charges
against him. The final decision, therefore, whether to voluntarily resign or to continue working still,
ultimately rests with the petitioner. In fact, by petitoners own admission, he requested from VP for
Administration Ty more time to think over the offer.
Moreover, the petitioner alleged that he was not allowed to enter the training site by the guard on
duty who told him that he was already banned from the premises. Subsequently, however, petitioner
admitted in his Supplemental Affidavit that he was able to return to the said site on 3 December
2000, to claim his 16-30 November 2000 salary, and again on 9 December 2000, to receive his 13th
month pay. The fact alone that he was able to return to the training site to claim his salary and
benefits raises doubt as to his purported ban from the premises.

Finally, petitioners stance that he was dismissed by private respondent was further weakened with
the presentation of private respondents payroll bearing petitioners name proving that petitioner
remained as private respondents employee up to December 2000. Again, petitioners assertion that
the payroll was merely fabricated for the purpose of supporting private respondents case before the
NLRC cannot be given credence. Entries in the payroll, being entries in the course of business,
enjoy the presumption of regularity under Rule 130, Section 43 of the Rules of Court. It is therefore
incumbent upon the petitioner to adduce clear and convincing evidence in support of his claim of
fabrication and to overcome such presumption of regularity.30 Unfortunately, petitioner again failed in
such endeavor.
On these scores, there is a dearth of evidence to establish the fact of petitioners dismissal. We have
scrupulously examined the records and we found no evidence presented by petitioner, other than his
own contentions that he was indeed dismissed by private respondent.
While this Court is not unmindful of the rule that in cases of illegal dismissal, the employer bears the
burden of proof to prove that the termination was for a valid or authorized cause in the case at bar,
however, the facts and the evidence did not establish a prima facie case that the petitioner was
dismissed from employment.31 Before the private respondent must bear the burden of proving that
the dismissal was legal, petitioner must first establish by substantial evidence the fact of his
dismissal from service. Logically, if there is no dismissal, then there can be no question as to the
legality or illegality thereof.
In Machica v. Roosevelt Services Center, Inc.,32 we had underscored that the burden of proving the
allegations rest upon the party alleging, to wit:
The rule is that one who alleges a fact has the burden of proving it; thus, petitioners were
burdened to prove their allegation that respondents dismissed them from their employment. It must
be stressed that the evidence to prove this fact must be clear, positive and convincing. The
rule that the employer bears the burden of proof in illegal dismissal cases finds no application here
because the respondents deny having dismissed the petitioners.33
In Rufina Patis Factory v. Alusitain,34 this Court took the occasion to emphasize:
It is a basic rule in evidence, however, that the burden of proof is on the part of the party who makes
the allegations ei incumbit probatio, qui dicit, non qui negat. If he claims a right granted by law,
he must prove his claim by competent evidence, relying on the strength of his own evidence
and not upon the weakness of that of his opponent.35
It is true that the Constitution affords full protection to labor, and that in light of this Constitutional
mandate, we must be vigilant in striking down any attempt of the management to exploit or oppress
the working class. However, it does not mean that we are bound to uphold the working class in every
labor dispute brought before this Court for our resolution.
The law in protecting the rights of the employees, authorizes neither oppression nor self-destruction
of the employer. It should be made clear that when the law tilts the scales of justice in favor of labor,
it is in recognition of the inherent economic inequality between labor and management. The intent is
to balance the scales of justice; to put the two parties on relatively equal positions. There may be
cases where the circumstances warrant favoring labor over the interests of management but never
should the scale be so tilted if the result is an injustice to the employer. Justitia nemini neganda est -justice is to be denied to none.36

WHEREFORE, premises considered, the instant Petition is DENIED. The Court of Appeals Decision
dated 28 May 2005 and its Resolution dated 7 September 2006 in CA-G.R. SP No. 79724 are
hereby AFFIRMED. Costs against the petitioner.
SO ORDERED.
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," 1 challenges 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;" 2 that it "does not apply to all Filipino workers but only to
domestic helpers and females with similar skills;" 3 and 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." 4 Department 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 non-impairment
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." 5 As 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, 7 refers 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." 10 Significantly, 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." 11 It 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. 13 In 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," 14 but it
does not thereby make an undue discrimination between the sexes. It is well-settled that "equality before
the law" under the Constitution 15 does 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" 20 is 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." 23 In 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." 25 Department Order No. 1 is a valid implementation of the Labor Code, in particular, its basic
policy to "afford protection to labor," 26pursuant to the respondent Department of Labor's rule-making
authority vested in it by the Labor Code. 27 The 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" 29 is 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. 31 Freedom 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.

G.R. No. L-46496

Facts: Ang

February 27, 1940

Tibay

was

manufacturer

of

rubber

slippers.

There was a shortage of leather soles, and it was necessary to temporarily lay off members of
the

National Labor

Union.

According to the Union however, this was merely a scheme to systematically terminate the
employees from work, and that the shortage of soles is unsupported. It claims that Ang Tibay is
guilty of ULP because the owner, Teodoro, is discriminating against the National Labor Union,
and unjustly favoring the National Workers Brotherhood, which was allegedly sympathetic to the
employer.
The petitioner, Ang Tibay, has filed an opposition both to the motion for reconsideration of the
respondent Court of Industrial Relationsand to the motion for new trial of the respondent
National Labor

Union,

Inc.

Issue: Whether or not special courts like Court of Industrial Relations should observe due
process.
Held: Yes. The Court of Industrial Relations is not narrowly constrained by technical rules of
procedure, and Commonwealth Act No. 103 requires it to act according to justice and equity and
substantial merits of the case, without regard to technicalities orlegal evidence but may inform
its

mind

in

such

manner

as

it

may

deem

just

and equitable.

There are cardinal primary rights which must be respected even in proceedings of this
character. The first of these rights is the right to a hearing, which includes the right of the party
interested or affected to present his own case and submit evidence in support thereof. Not only
must the party be given an opportunity to present his case and to adduce evidence tending to
establish the rights which he asserts but the tribunal must consider the evidence presented.
While the duty to deliberate does not impose the obligation to decide right, it does imply a
necessity which cannot be disregarded, namely, that of having something to support its
decision. Not only must there be some evidence to support a finding or conclusion, but the
evidence must be substantial. The decision must be rendered on the evidence presented at
the hearing, or at least contained in the record and disclosed to the parties affected. The Court
of Industrial Relations or any of its judges, therefore, must act on its or his own independent
consideration of the law and facts of the controversy, and not simply accept the views of a
subordinate in arriving at a decision. The Court of Industrial Relations should, in all controversial
questions, render its decision in such a manner that the parties to the proceeding can know the

various issues involved, and the reasons for the decisions rendered. The performance of this
duty is inseparable from the authority conferred upon it.
SERRANO VS GALLANT PDF
G.R. No. L-48645 January 7, 1987
"BROTHERHOOD" LABOR UNITY MOVEMENT OF THE PHILIPPINES, ANTONIO
CASBADILLO, PROSPERO TABLADA, ERNESTO BENGSON, PATRICIO SERRANO, ANTONIO
B. BOBIAS, VIRGILIO ECHAS, DOMINGO PARINAS, NORBERTO GALANG, JUANITO
NAVARRO, NESTORIO MARCELLANA, TEOFILO B. CACATIAN, RUFO L. EGUIA, CARLOS
SUMOYAN, LAMBERTO RONQUILLO, ANGELITO AMANCIO, DANILO B. MATIAR, ET
AL., petitioners,
vs.
HON. RONALDO B. ZAMORA, PRESIDENTIAL ASSISTANT FOR LEGAL AFFAIRS, OFFICE OF
THE PRESIDENT, HON. AMADO G. INCIONG, UNDERSECRETARY OF LABOR, SAN MIGUEL
CORPORATION, GENARO OLIVES, ENRIQUE CAMAHORT, FEDERICO OATE, ERNESTO
VILLANUEVA, ANTONIO BOCALING and GODOFREDO CUETO, respondents.
Armando V. Ampil for petitioners.
Siguion Reyna, Montecillo and Ongsiako Law Office for private respondents.

GUTIERREZ, JR., J.:

The elemental question in labor law of whether or not an employer-employee relationship exists
between petitioners-members of the "Brotherhood Labor Unit Movement of the Philippines" (BLUM)
and respondent San Miguel Corporation, is the main issue in this petition. The disputed decision of
public respondent Ronaldo Zamora, Presidential Assistant for legal Affairs, contains a brief summary
of the facts involved:
1. The records disclose that on July 11, 1969, BLUM filed a complaint with the now
defunct Court of Industrial Relations, charging San Miguel Corporation, and the
following officers: Enrique Camahort, Federico Ofiate Feliciano Arceo, Melencio
Eugenia Jr., Ernesto Villanueva, Antonio Bocaling and Godofredo Cueto of unfair
labor practice as set forth in Section 4 (a), sub-sections (1) and (4) of Republic Act
No. 875 and of Legal dismissal. It was alleged that respondents ordered the
individual complainants to disaffiliate from the complainant union; and that
management dismissed the individual complainants when they insisted on their union
membership.
On their part, respondents moved for the dismissal of the complaint on the grounds
that the complainants are not and have never been employees of respondent
company but employees of the independent contractor; that respondent company
has never had control over the means and methods followed by the independent
contractor who enjoyed full authority to hire and control said employees; and that the
individual complainants are barred by estoppel from asserting that they are
employees of respondent company.

While pending with the Court of Industrial Relations CIR pleadings and testimonial
and documentary evidences were duly presented, although the actual hearing was
delayed by several postponements. The dispute was taken over by the National
Labor Relations Commission (NLRC) with the decreed abolition of the CIR and the
hearing of the case intransferably commenced on September 8, 1975.
On February 9, 1976, Labor Arbiter Nestor C. Lim found for complainants which was
concurred in by the NLRC in a decision dated June 28, 1976. The amount of
backwages awarded, however, was reduced by NLRC to the equivalent of one (1)
year salary.
On appeal, the Secretary in a decision dated June 1, 1977, set aside the NLRC
ruling, stressing the absence of an employer-mployee relationship as borne out by
the records of the case. ...
The petitioners strongly argue that there exists an employer-employee relationship between them
and the respondent company and that they were dismissed for unionism, an act constituting unfair
labor practice "for which respondents must be made to answer."
Unrebutted evidence and testimony on record establish that the petitioners are workers who have
been employed at the San Miguel Parola Glass Factory since 1961, averaging about seven (7) years
of service at the time of their termination. They worked as "cargadores" or "pahinante" at the SMC
Plant loading, unloading, piling or palleting empty bottles and woosen shells to and from company
trucks and warehouses. At times, they accompanied the company trucks on their delivery routes.
The petitioners first reported for work to Superintendent-in-Charge Camahort. They were issued gate
passes signed by Camahort and were provided by the respondent company with the tools,
equipment and paraphernalia used in the loading, unloading, piling and hauling operation.
Job orders emanated from Camahort. The orders are then transmitted to an assistant-officer-incharge. In turn, the assistant informs the warehousemen and checkers regarding the same. The
latter, thereafter, relays said orders to the capatazes or group leaders who then give orders to the
workers as to where, when and what to load, unload, pile, pallet or clean.
Work in the glass factory was neither regular nor continuous, depending wholly on the volume of
bottles manufactured to be loaded and unloaded, as well as the business activity of the company.
Work did not necessarily mean a full eight (8) hour day for the petitioners. However, work,at times,
exceeded the eight (8) hour day and necessitated work on Sundays and holidays. For this, they
were neither paid overtime nor compensation for work on Sundays and holidays.
Petitioners were paid every ten (10) days on a piece rate basis, that is, according to the number of
cartons and wooden shells they were able to load, unload, or pile. The group leader notes down the
number or volume of work that each individual worker has accomplished. This is then made the
basis of a report or statement which is compared with the notes of the checker and warehousemen
as to whether or not they tally. Final approval of report is by officer-in-charge Camahort. The pay
check is given to the group leaders for encashment, distribution, and payment to the petitioners in
accordance with payrolls prepared by said leaders. From the total earnings of the group, the group
leader gets a participation or share of ten (10%) percent plus an additional amount from the earnings
of each individual.
The petitioners worked exclusive at the SMC plant, never having been assigned to other companies
or departments of SMC plant, even when the volume of work was at its minimum. When any of the

glass furnaces suffered a breakdown, making a shutdown necessary, the petitioners work was
temporarily suspended. Thereafter, the petitioners would return to work at the glass plant.
Sometime in January, 1969, the petitioner workers numbering one hundred and forty (140)
organized and affiliated themselves with the petitioner union and engaged in union activities.
Believing themselves entitled to overtime and holiday pay, the petitioners pressed management,
airing other grievances such as being paid below the minimum wage law, inhuman treatment, being
forced to borrow at usurious rates of interest and to buy raffle tickets, coerced by withholding their
salaries, and salary deductions made without their consent. However, their gripes and grievances
were not heeded by the respondents.
On February 6, 1969, the petitioner union filed a notice of strike with the Bureau of Labor Relations
in connection with the dismissal of some of its members who were allegedly castigated for their
union membership and warned that should they persist in continuing with their union activities they
would be dismissed from their jobs. Several conciliation conferences were scheduled in order to
thresh out their differences, On February 12, 1969, union member Rogelio Dipad was dismissed
from work. At the scheduled conference on February 19, 1969, the complainant union through its
officers headed by National President Artemio Portugal Sr., presented a letter to the respondent
company containing proposals and/or labor demands together with a request for recognition and
collective bargaining.
San Miguel refused to bargain with the petitioner union alleging that the workers are not their
employees.
On February 20, 1969, all the petitioners were dismissed from their jobs and, thereafter, denied
entrance to respondent company's glass factory despite their regularly reporting for work. A
complaint for illegal dismissal and unfair labor practice was filed by the petitioners.
The case reaches us now with the same issues to be resolved as when it had begun.
The question of whether an employer-employee relationship exists in a certain situation continues to
bedevil the courts. Some businessmen try to avoid the bringing about of an employer-employee
relationship in their enterprises because that judicial relation spawns obligations connected with
workmen's compensation, social security, medicare, minimum wage, termination pay, and unionism.
(Mafinco Trading Corporation v. Ople, 70 SCRA 139).
In determining the existence of an employer-employee relationship, the elements that are generally
considered are the following: (a) the selection and engagement of the employee; (b) the payment of
wages; (c) the power of dismissal; and (d) the employer's power to control the employee with respect
to the means and methods by which the work is to be accomplished. It. is the called "control test"
that is the most important element (Investment Planning Corp. of the Phils. v. The Social Security
System, 21 SCRA 924; Mafinco Trading Corp. v. Ople, supra,and Rosario Brothers, Inc. v. Ople, 131
SCRA 72).
Applying the above criteria, the evidence strongly indicates the existence of an employer-employee
relationship between petitioner workers and respondent San Miguel Corporation. The respondent
asserts that the petitioners are employees of the Guaranteed Labor Contractor, an independent
labor contracting firm.
The facts and evidence on record negate respondent SMC's claim.

The existence of an independent contractor relationship is generally established by the following

criteria: "whether or not the contractor is carrying on an independent business; the nature and extent
of the work; the skill required; the term and duration of the relationship; the right to assign the
performance of a specified piece of work; the control and supervision of the work to another; the
employer's power with respect to the hiring, firing and payment of the contractor's workers; the
control of the premises; the duty to supply the premises tools, appliances, materials and labor; and
the mode, manner and terms of payment" (56 CJS Master and Servant, Sec. 3(2), 46; See also 27
AM. Jur. Independent Contractor, Sec. 5, 485 and Annex 75 ALR 7260727)
None of the above criteria exists in the case at bar.
Highly unusual and suspect is the absence of a written contract to specify the performance of a
specified piece of work, the nature and extent of the work and the term and duration of the
relationship. The records fail to show that a large commercial outfit, such as the San Miguel
Corporation, entered into mere oral agreements of employment or labor contracting where the same
would involve considerable expenses and dealings with a large number of workers over a long
period of time. Despite respondent company's allegations not an iota of evidence was offered to
prove the same or its particulars. Such failure makes respondent SMC's stand subject to serious
doubts.
Uncontroverted is the fact that for an average of seven (7) years, each of the petitioners had worked
continuously and exclusively for the respondent company's shipping and warehousing department.
Considering the length of time that the petitioners have worked with the respondent company, there
is justification to conclude that they were engaged to perform activities necessary or desirable in the
usual business or trade of the respondent, and the petitioners are, therefore regular employees (Phil.
Fishing Boat Officers and Engineers Union v. Court of Industrial Relations, 112 SCRA 159 and RJL
Martinez Fishing Corporation v. National Labor Relations Commission, 127 SCRA 454).
As we have found in RJL Martinez Fishing Corporation v. National Labor Relations Commission
(supra):
... [T]he employer-employee relationship between the parties herein is not
coterminous with each loading and unloading job. As earlier shown, respondents are
engaged in the business of fishing. For this purpose, they have a fleet of fishing
vessels. Under this situation, respondents' activity of catching fish is a continuous
process and could hardly be considered as seasonal in nature. So that the activities
performed by herein complainants, i.e. unloading the catch of tuna fish from
respondents' vessels and then loading the same to refrigerated vans, are necessary
or desirable in the business of respondents. This circumstance makes the
employment of complainants a regular one, in the sense that it does not depend on
any specific project or seasonable activity. (NLRC Decision, p. 94, Rollo).
lwphl@it

so as it with petitioners in the case at bar. In fact, despite past shutdowns of the glass plant for
repairs, the petitioners, thereafter, promptly returned to their jobs, never having been replaced, or
assigned elsewhere until the present controversy arose. The term of the petitioners' employment
appears indefinite. The continuity and habituality of petitioners' work bolsters their claim of employee
status vis-a-vis respondent company,
Even under the assumption that a contract of employment had indeed been executed between
respondent SMC and the alleged labor contractor, respondent's case will, nevertheless, fail.
Section 8, Rule VIII, Book III of the Implementing Rules of the Labor Code provides:

Job contracting. There is job contracting permissible under the Code if the
following conditions are met:
(1) The contractor carries on an independent business and undertakes the contract
work on his own account under his own responsibility according to his own manner
and method, free from the control and direction of his employer or principal in all
matters connected with the performance of the work except as to the results thereof;
and
(2) The contractor has substantial capital or investment in the form of tools,
equipment, machineries, work premises, and other materials which are necessary in
the conduct of his business.
We find that Guaranteed and Reliable Labor contractors have neither substantial capital nor
investment to qualify as an independent contractor under the law. The premises, tools, equipment
and paraphernalia used by the petitioners in their jobs are admittedly all supplied by respondent
company. It is only the manpower or labor force which the alleged contractors supply, suggesting the
existence of a "labor only" contracting scheme prohibited by law (Article 106, 109 of the Labor Code;
Section 9(b), Rule VIII, Book III, Implementing Rules and Regulations of the Labor Code). In fact,
even the alleged contractor's office, which consists of a space at respondent company's warehouse,
table, chair, typewriter and cabinet, are provided for by respondent SMC. It is therefore clear that the
alleged contractors have no capital outlay involved in the conduct of its business, in the maintenance
thereof or in the payment of its workers' salaries.
The payment of the workers' wages is a critical factor in determining the actuality of an employeremployee relationship whether between respondent company and petitioners or between the alleged
independent contractor and petitioners. It is important to emphasize that in a truly independent
contractor-contractee relationship, the fees are paid directly to the manpower agency in lump sum
without indicating or implying that the basis of such lump sum is the salary per worker multiplied by
the number of workers assigned to the company. This is the rule in Social Security System v. Court
of Appeals (39 SCRA 629, 635).
The alleged independent contractors in the case at bar were paid a lump sum representing only the
salaries the workers were entitled to, arrived at by adding the salaries of each worker which depend
on the volume of work they. had accomplished individually. These are based on payrolls, reports or
statements prepared by the workers' group leader, warehousemen and checkers, where they note
down the number of cartons, wooden shells and bottles each worker was able to load, unload, pile or
pallet and see whether they tally. The amount paid by respondent company to the alleged
independent contractor considers no business expenses or capital outlay of the latter. Nor is the
profit or gain of the alleged contractor in the conduct of its business provided for as an amount over
and above the workers' wages. Instead, the alleged contractor receives a percentage from the total
earnings of all the workers plus an additional amount corresponding to a percentage of the earnings
of each individual worker, which, perhaps, accounts for the petitioners' charge of unauthorized
deductions from their salaries by the respondents.
Anent the argument that the petitioners are not employees as they worked on piece basis, we
merely have to cite our rulings in Dy Keh Beng v. International Labor and Marine Union of the
Philippines (90 SCRA 161), as follows:
"[C]ircumstances must be construed to determine indeed if payment by the piece is
just a method of compensation and does not define the essence of the relation. Units
of time . . . and units of work are in establishments like respondent (sic) just

yardsticks whereby to determine rate of compensation, to be applied whenever

agreed upon. We cannot construe payment by the piece where work is done in such
an establishment so as to put the worker completely at liberty to turn him out and
take in another at pleasure."
Article 106 of the Labor Code provides the legal effect of a labor only contracting scheme, to wit:
... the person or intermediary shall be considered merely as an agent of the employer
who shall be responsible to the workers in the same manner and extent as if the
latter were directly employed by him.
Firmly establishing respondent SMC's role as employer is the control exercised by it over the
petitioners that is, control in the means and methods/manner by which petitioners are to go about
their work, as well as in disciplinary measures imposed by it.
Because of the nature of the petitioners' work as cargadores or pahinantes, supervision as to the
means and manner of performing the same is practically nil. For, how many ways are there to load
and unload bottles and wooden shells? The mere concern of both respondent SMC and the alleged
contractor is that the job of having the bottles and wooden shells brought to and from the warehouse
be done. More evident and pronounced is respondent company's right to control in the discipline of
petitioners. Documentary evidence presented by the petitioners establish respondent SMC's right to
impose disciplinary measures for violations or infractions of its rules and regulations as well as its
right to recommend transfers and dismissals of the piece workers. The inter-office memoranda
submitted in evidence prove the company's control over the petitioners. That respondent SMC has
the power to recommend penalties or dismissal of the piece workers, even as to Abner Bungay who
is alleged by SMC to be a representative of the alleged labor contractor, is the strongest indication of
respondent company's right of control over the petitioners as direct employer. There is no evidence
to show that the alleged labor contractor had such right of control or much less had been there to
supervise or deal with the petitioners.
The petitioners were dismissed allegedly because of the shutdown of the glass manufacturing plant.
Respondent company would have us believe that this was a case of retrenchment due to the closure
or cessation of operations of the establishment or undertaking. But such is not the case here. The
respondent's shutdown was merely temporary, one of its furnaces needing repair. Operations
continued after such repairs, but the petitioners had already been refused entry to the premises and
dismissed from respondent's service. New workers manned their positions. It is apparent that the
closure of respondent's warehouse was merely a ploy to get rid of the petitioners, who were then
agitating the respondent company for benefits, reforms and collective bargaining as a union. There
is no showing that petitioners had been remiss in their obligations and inefficient in their jobs to
warrant their separation.
As to the charge of unfair labor practice because of SMC's refusal to bargain with the petitioners, it is
clear that the respondent company had an existing collective bargaining agreement with the IBM
union which is the recognized collective bargaining representative at the respondent's glass plant.
There being a recognized bargaining representative of all employees at the company's glass plant,
the petitioners cannot merely form a union and demand bargaining. The Labor Code provides the
proper procedure for the recognition of unions as sole bargaining representatives. This must be
followed.
WHEREFORE, IN VIEW OF THE FOREGOING, the petition is GRANTED. The San Miguel
Corporation is hereby ordered to REINSTATE petitioners, with three (3) years backwages. However,

where reinstatement is no longer possible, the respondent SMC is ordered to pay the petitioners
separation pay equivalent to one (1) month pay for every year of service.
SO ORDERED.