LABOR STANDARDS

TOPIC: Article IV Labor Code

GR No. 174631
Uy vs. Centro Ceramica Corporation and/or Sy and Garcia
October 19, 2011
NLRCs finding of illegal dismissal is supported by the totality of evidence
and more consistent with logic and ordinary human experience than the
common finding of the CA and Labor Arbiter that petitioner informally
severed his employment relationship with the company.
Crucial factor is the verbal order directly given by Sy, the company
president, for petitioner to immediately turn over his accountabilities
Uys act of turning over the company files and samples is proof of his
voluntary informal resignation rather than of the summary dismissal
effected by management.
Evidence on record suggests that petitioner did not resign; he was orally
dismissed by Sy. It is this lack of clear, valid and legal cause, not to
mention due process, that made his dismissal illegal, warranting
reinstatement and the award of backwages.
When there is no showing of a clear, valid and legal cause for the
termination of employment, the law considers it a case of illegal dismissal.
Furthermore, Article 4 of the Labor Code expresses the basic principle that
all doubts in the interpretation and implementation of the Labor Code
should be interpreted in favor of the workingman. This principle has been
extended by jurisprudence to cover doubts in the evidence presented by
the employer and the employee. Thus we have held that if the evidence
presented by the employer and the employee are in equipoise, the scales
of justice must be tilted in favor of the latter.
Ponente: Justice Villarama, Jr.
FACTS:
Petitioner Uy was hired by respondent company on March 21, 1999, after which, he
became a regular employee on May 01, 2000.
He alleged that his predicament began when former VP Garcia was re-hired by
company in the last quarter of 2001. Incidents involving longtime clients led to a
strained relationship between him and Garcia.
February 19, 2002, he was informed by his supervisor that he was to assume a new
position in the marketing department to which he replied that he will think it over.
His friends warned him to be careful saying Mainit ka kay Garcia.

That same day, he was summoned by Sy and Garcia for a closed-door meeting
during which he was informed of the termination of his services due to
insubordination and advised him to turn over his samples and files immediately.
Sy even commented member ka pa naman ng Singles for Christ pero napakatigas
ng ulo mo.
February 21, 2002, Sy summoned him again but prior to this he was informed by his
supervisor that Sy will give him all that is due plus goodwill money. However, during
his meeting with Sy, he asked for his termination paper to which Sy replied If thats
what you want I will give it to you. Pag-isipan mo ang gagawin mo dahil kilala mo
naman kami we are powerful.
The following day, he turned over company samples, accounts and receivables to
his supervisor. Thereafter, he did not report to work anymore.
March 06, 2002, an employee of the company presented to him a memorandum
about his alleged poor sales performance to which he is being required to submit a
written explanation, why the company should not terminate his contract.
On March 13, 2002, he received a memorandum about his absence without leave
and failure to respond to the March 06 memorandum to which he is being required
to submit a written explanation, why the company should not terminate his
contract.
Respondent thru counsel sent a letter-reply and on March 18, 2002 Petitioner filed a
complaint for illegal dismissal against respondent company.
Labor Arbiters ruling: Companys favor, it was petitioner who opted not to
work, after offering to resign because he could not accept his possible transfer to
another department.
NLRCs ruling: Uys favor, reversed Labor Arbiters decision, Uys dismissal was
made under questionable circumstances giving weight to his claim that he was
being singled out notwithstanding that all sales personnel similarly could not meet
the P1.5 million monthly sales quota.
CA: Companys favor, evidence on record supports the Labor Arbiters finding that
petitioner "informally severed" the employment relationship as manifested by his
voluntary transfer of his accountabilities to his supervisor and thereafter his act of
not reporting for work anymore.
Uys motion for reconsideration was denied; hence, this instant petition.
ISSUE/S:
Uys Arguments:
1. CA instead of decreeing his illegal termination based on Sys verbal dismissal
without just cause and due process; concluded that petitioner voluntarily and
informally severed his relation with the company.
2. Agcaoilis statement is not important because what matters is the action of
Sy who dismissed him outright.

3. His act of turning over his accountabilities to his supervisor cannot be

considered voluntary on his part as it was done by him knowing that he was
already terminated and upon the specific instructions of Sy and Garcia.

Companys Arguments:
1. Evidence clearly show that Uy was not dismissed but required merely to
explain why he failed to report for work after meeting the company president.
2. Uys act of turning over his accountabilities cannot be proof of his illegal
dismissal because it was done voluntarily in line with his proposed
resignation.
3. That when the company was about to conduct investigation on Uy who went
AWOL since February 19, 2002, the latter refused to accept the memos sent
to him; thus, confirming that the company was investigating his failure to
report for work and giving him all the opportunity to explain his absence.
Whether petitioner was dismissed or voluntarily severed his employment
by abandoning his job.
DECISION:
The court granted Uys petition by reversing CAs decision and reinstating NLRCs
with modifications to the monetary rewards Uy is entitled to.
NLRCs finding of illegal dismissal is supported by the totality of evidence
and more consistent with logic and ordinary human experience than the
common finding of the CA and Labor Arbiter that petitioner informally
severed his employment relationship with the company.
The court is not convinced that after declining his supposed transfer to another
department as per the information relayed to him by his supervisor, petitioner
would readily turn over his files and samples unless something critical indeed took
place in his subsequent closed-door meeting with Sy and Garcia.
Crucial factor is the verbal order directly given by Sy, the company
president, for petitioner to immediately turn over his accountabilities
Uys act of turning over the company files and samples is proof of his
voluntary informal resignation rather than of the summary dismissal
effected by management.
Uy directly confirmed from the company president herself that he was already being
dismissed.
Evidence on record suggests that petitioner did not resign; he was orally
dismissed by Sy. It is this lack of clear, valid and legal cause, not to
mention due process, that made his dismissal illegal, warranting
reinstatement and the award of backwages.
Moreover, the filing of a complaint for illegal dismissal just three weeks later is
difficult to reconcile with voluntary resignation.

When there is no showing of a clear, valid and legal cause for the
termination of employment, the law considers it a case of illegal dismissal.
Furthermore, Article 4 of the Labor Code expresses the basic principle that
all doubts in the interpretation and implementation of the Labor Code
should be interpreted in favor of the workingman. This principle has been
extended by jurisprudence to cover doubts in the evidence presented by
the employer and the employee. Thus we have held that if the evidence
presented by the employer and the employee are in equipoise, the scales
of justice must be tilted in favor of the latter.
Accordingly, the NLRCs finding of illegal dismissal must be upheld.

GR No. 177114
Peaflor vs. Outdoor Clothing Manufacturing Corporation
(OCMC), Syfu, President, Demogena, Finance Manager,
and Paul Lee, Chairman
January 21, 2010
Court concludes that Peaflor did submit his resignation on March 15,
2000 on the following grounds:
1. Syfus memorandum of March 01, 2000 does not constitute
conclusive
evidence
of
their
dates
of
preparation
and
communication.
2. Buenaobras acknowledgement and acceptance were only presented
to the NLRC on appeal, not before the Labor Arbiter
3. Circumstances and evidences supports Peaflors claim that he was
compelled to resign from the company
Peaflor would have become a regular employee by March 01, 2000. Court
finds it unlikely that he would resign and would simply leave given his
undisputed record of having successfully worked in the company and that
he would tender his resignation on the very same day he was entitled by
law to be considered a regular employee where he could have availed of
its benefits if he would be separated from the service of a regular
employee.
Court finds it strange that Peaflor would submit his resignation on March
01, 2000 and keep completely quiet about his development until its
defective on March 15, 2000.
In employee termination disputes, the employer bears the burden of
proving that employees dismissal was for just and valid cause. Evidence
does not support the existence of voluntariness in Peaflors resignation.
The principle that all doubts in the interpretation and implementation of
the Labor Code should be interpreted in favor of the workingman has been

extended by jurisprudence to cover the doubts in the evidence presented

by the employer and employee.
Ponente: Justice Brion
FACTS:
Peaflor was hired on September 1999 as probationary Human Resources
Department (HRD) Manager of respondent OCMC. His relationship with the company
went well during the first few months wherein he designed and created the
companys Policy Manual, Personnel Handbook, Job Expectations and Organizational
Set-Up during this period.
His woes began when the companys Vice President for Operations, Edgar Lee, left
the company after a big fight between him and Chief Corporate Officer Syfu. Since
he was in close association with Lee, he claimed that he was among those who bore
Syfus ire.
Peaflor alleged that when the companys downsizing program due to negative
business returns began, his department had been singled out. His two staff
members were dismissed in which he became a one-man department for the
company carrying out all clerical, administrative and liaison work.
When employee Padilla suffered incident in a bombing incident, the company
required him to attend to her hospitalizations needs; he had to work outside the
office premises to undertake this task. When he considered himself to be on official
business, he was surprised to discover that the company deducted six days salary
corresponding to the time he assisted Padilla. Finance Manager Demogena
explained that Peaflor failed to submit his trip ticket which the latter belied as a
trip ticket was required only when a company vehicle was used and he did not use
any company vehicle when attended to his off-premises work.
On March 13, 2000, Peaflor learned that while he was away, Syfu appointed
Buenaobra as the new HRD Manager. This was confirmed by Syfus memorandum of
2010 to the entire office stating that Buenaobra was the concurrent HRD and
Accounting Manager. Surprised by the news, he tried to talk to Syfu to clarify the
matter but he was unable to do so. Under these circumstances, Peaflor allege that
he had no option but to resign. He submitted a letter to Syfu declaring his
irrevocable resignation from his employment on March 15, 2000.
Then, Peaflor filed a complaint for illegal dismissal with the labor arbiter
on the grounds that he had been constructively dismissed. He included a prayer for
reinstatement and payment of backwages, illegally deducted salaries, damages,
attorneys fees and other monetary claims.
OCMC claimed that Peaflor had voluntarily resigned from his work and
that he had in fact continued working for the company until his resignation on
March 15, 2000 the company presented as evidence the security report Peaflor
prepared and signed on March 13, 2000. OCMC disclaimed liability for any of
Penaflors monetary claims since the latter had voluntarily resigned he was not
entitled to any backwages and damages. Company denied making illegal deduction

from Peaflors salary since these were deducted due to the latters failure to report
for work during the dates the company questioned.
Labor Arbiter found that Peaflor had been illegally dismissed and ordered OCMC
to reinstate the latter to his former position, to pay him his illegally deducted salary
for six days, 13th month pay, attorneys fees, moral and exemplary damages.
OCMC appealed the decision to NLRC. The former insisted
1. Peaflor had not been constructively dismissed
2. He tendered his resignation on March 01, 2000 because he saw no future
with the corporation due to its dire financial standing
3. Syfu allege that he was compelled to appoint Buenaobra through a
memorandum dated March 01, 2000 to cover the position that Peaflor would
soon vacate and that the same was also made to address the matter that had
to be taken care of while Peaflor was on unauthorized leave.
4. They had given Peaflor two notices on March 06 and March 11, 2000 for his
unauthorized absences.
Peaflor countered:
1. The March 01, 2000 memorandum, Buenaobras March 03, 2000
memorandum and the AWOL memoranda were fabricated and were never
presented before the labor arbiter.
2. He rebutted Syfus claim that he submitted his letter on March 01, 2000 but
was instead submitted on March 15, 2000.
3. AWOL memoranda could not be relied on since he was never furnished copies
of these.
4. He could not be on prolonged absence without official leave, as his residence
was just a few meters away from his office.
NLRC overturned labor arbiters decision on the following grounds:
1. It characterized Peaflors resignation to OCMCs downward financial spiral.
2. No malice was present in the companys decision to dismiss Peaflors two
staff members. Peaflor, in fact, drafted that dismissal of his staff members.
Peaflor filed a petition for certiorari with CA on the ground that NLRCs
decision was tainted with grave abuse of discretion, although he essentially adopted
the same arguments he presented before the Labor Arbiter and the NLRC.
CA affirmed NLRCs decision stating that Peaflor failed to present sufficient
evidence supporting his claim that he had been constructively dismissed and
subsequently denied Peaflors motion for reconsideration; hence, this instant
petition.
ISSUE/S:
Peaflors Arguments:
He had been constructively dismissed and that:
1. Dismissal of his two staff members
2. Demeaning liaison work he had to perform as HRD Manager
3. Salary deduction for his alleged unauthorized absences
4. Appointment of Buenaobra

were clear acts of discrimination which made his employment unbearable and thus,
he was forced to resign.
OCMCs Arguments:
Peaflor voluntarily resigned, his allegations were all unsubstantiated and that:
1. HRD was not singled out but was the first to lose its staff members because
the company had to downsize.
2. Peaflor unreasonably felt humiliated in performing work that logically fell
under his department.
3. Absented himself from work without official leave; and
4. Demanded payment for his unauthorized absences.
Main Issue:
Whether Peaflors undisputed resignations was voluntary or a forced one
- constructive dismissal equivalent to an illegal dismissal.
Critical Issue:
Whether Peaflor filed his letter of resignation before or after the
appointment of Buenaobra as the new/concurrent HRD manager
DECISION:
The court granted Peaflors petition, reversed NLRC and CAs decision and
resolution, reinstated Labor Arbiters decision with modification that due to the
strained relations between the parties, respondents are additionally ordered to pay
separation pay equivalent to the petitioners one months salary.
Court concludes that Peaflor did submit his resignation on March 15,
2000 on the following grounds:
1. Syfus memorandum of March 01, 2000 does not constitute
conclusive
evidence
of
their
dates
of
preparation
and
communication.
2. Buenaobras acknowledgement and acceptance were only presented
to the NLRC on appeal, not before the Labor Arbiter - OCMC totally
failed to explain the reason for its omission. This is significant since these
were the clinching pieces of evidence that allowed NLRC to justify the
reversal of the Labor Arbiters decision.
3. Circumstances and evidences supports Peaflors claim that he was
compelled to resign from the company Three of the companys officials
acknowledged receipt on March 13, 2000 of the March 10 Memorandum
showing that indeed it was only that day that the appointment of Buenaobra
to the HRD position was disclosed. This was consistent in Peaflors position
that it was only in the afternoon of March 13, 2000 that he was told,
informally, that Buenaobra had taken over his position.
Peaflor would have become a regular employee by March 01, 2000. Court
finds it unlikely that he would resign and would simply leave given his
undisputed record of having successfully worked in the company and that
he would tender his resignation on the very same day he was entitled by
law to be considered a regular employee where he could have availed of

its benefits if he would be separated from the service of a regular

employee.
Court finds it strange that Peaflor would submit his resignation on March
01, 2000 and keep completely quiet about his development until its
defective on March 15, 2000.
It is more consistent with human experience that Peaflor indeed learned of the
appointment of Buenaobra only on March 13, 2000 and reacted to this development
through his resignation letter after realizing that he would only face hostility and
frustration in his working environment.
In employee termination disputes, the employer bears the burden of
proving that employees dismissal was for just and valid cause. Evidence
does not support the existence of voluntariness in Peaflors resignation.
Peaflors letter of resignation does not help the companys case since the company
must still prove that the employee voluntarily resigned. There can be no valid
resignation where the acts was made under the compulsion or under circumstances
approximating compulsion, such as when an employees act of handing in his
resignation was a reaction to circumstances leaving him no alternative but to
resign.
The principle that all doubts in the interpretation and implementation of
the Labor Code should be interpreted in favor of the workingman has been
extended by jurisprudence to cover the doubts in the evidence presented
by the employer and employee.
Peaflor has shown serious doubts about the merits of the companys case,
particularly in the appreciation of the clinching evidence on which NLRC and CA
decision were based. Article 4 compels the court to rule in Peaflors favor.

GR No. 165153
De Castro vs. Liberty Broadcasting Network, Inc. and
Quiogue, respondents
September 23, 2008
CA erred in appreciation of evidence surrounding De Castros termination
from employment. The cited grounds are doubtful under proven
circumstances and should have been interpreted in De Castros favor
pursuant to Article 4 of the Labor Code.
1. Petitioner had not even passed his probationary period when the
acts charged allegedly took place.

2. De Castros relationships within the company at the time the

charges were filed showed that he might have stepped in the wrong
toes in the course of performing his duties.
3. The timing of the filling of the charges was unusual
If doubts exist between the evidence presented by the employer and the
employee, the scales of justice must be tilted in favor of the latter it is a
time-honored rule in controversies between a laborer and his master,
doubts reasonably arising from the evidence or in the interpretation of
agreements and writing should be resolved in the formers favor.
Employer failed to prove a just cause for the termination of the
petitioners employment and CA erred when it saw grave abuse of
discretion in NLRCs ruling.
Ponente: Justice Brion
FACTS:
August 1995, De Castro commenced his employment as Building Administrator for
respondent company.
May 1996, respondent company through HRM Senior Manager Mandap sent notice
to petitioner requiring him to explain with 48 hours why he should not be made
liable for violation of Company Code of Conduct for acts constituting serious
misconduct, fraud and wilful breach of the trust reposed on him.
Petitioner denied the allegations made by Niguidula and Balais and labeled as
completely baseless and sham, designed to protect them as they were favorites of
Quiogue.
The company granted petitioners request for a formal hearing, however, petitioner
sent notice that he would not participate when he learned from his wife that
criminal cases for estafa and qualified theft had been filed against him in the
Prosecutors office. He felt that the said hearing would be a Moro-Moro
investigation.
May 24, 1996, the company further charged De Castro for violation of the Company
Code of Conduct based on affidavits of Balais, Samarita and Aying.
May 31, 1996, the company dismissed De Castro on the following grounds:
1. Soliciting money for his own benefit from suppliers Aying and Samarita.
2. Soliciting P14 000 in commission from Aying.
3. Theft of company property for unauthorized removal of one gallon of Delo Oil
from the storage room.
4. Discourtesy towards a co-employee for offensive language against Niguidula.
5. Disorderly behavior for challenging Niguidula for a fight, thereby creating a
disturbance in the normal flow of activities in the company.
6. Threat and Coercion for threatening bodily harm to Niguidula and coercing
Balais to solicit money in his behalf.
7. Abuse of authority for instructing Balais to collect commission from Aying and
Samarita.
8. Slander for uttering libelous statement against Niguidula.

De Castro filed a complaint for illegal dismissal in the NLRC.

Labor Arbiter Pati: De Castros favor, disbelieved the affidavits submitted by
Niguidula, Balais, Pacaldo, Samarita and Aying.
NLRC: Reversed Labor Arbiters decision, Labor Arbiter erred in disregarding
the affidavits of respondents witness. NLRC adopted Labor Arbiter Tamayos
findings.
NLRC Motion for Reconsideration: De Castros favor, charges against
petitioner were never really substantiated other than bare allegations in the
affidavits of witnesses who were companys employees and who had altercations
with petitioner prior to execution of their affidavits.
CA: Companys favor, NLRC committed grave abuse of discretion in disregarding
the affidavits of all respondents witnesses.
CA denied De Castros motion for reconsideration; hence, this instant petition.
ISSUE/S:
De Castros Arguments:
1. CA erred when it substituted its judgment for that of the Labor Arbiter and
NLRC who were trier of facts who had the opportunity to review the
evidence extensively.
2. His termination was a hatchet job maliciously concocted by Quiogue. He
questions the charge that he conspired with his fellow managers in December
1995 and asks why the investigation and supporting evidence came only in
1996.
3. Ayings change of statement proves that the charges against him have been
concocted.
4. He belies that he slandered and challenged Niguidula to fight; in fact, it was
Niguidula who defamed him. He even complained in writing to Quiogue about
the incident immediately after it happened and furnished copies to company
officials.
5. Quiogue failed to act on his complaint against Niguidula only to resurrect it
under the Notice of Violation served on him. This time, however, Niguidula
was already the victim.
6. In the notice of violation, although he was given 48 hours to explain,
Quiogue, in bad faith, immediately filed complaints for estafa and qualified
theft against him. Mandap even went to his residence and warned his wife
not to file charges against the company, or else, Quiogue would file cases
against him in regular courts.
Respondent Companys Arguments:
1. CA correctly ruled that NLRC committed grave abuse of discretion. Positive
Testimonies of the witnesses should be given credence.
2. Petitioner failed to rebut Samaritas testimony that he was forced to increase
the price for the construction of the fire exits because De Castro asked for
commissions.

3. De Castros claim that Quiogue orchestrated his dismissal is not supported by

evidence and that the gravity of the charges faced by De Castro are just
causes for termination of employment under the Labor Code.
W/N De Castro was illegally dismissed.
DECISION:
The court granted De Castros petition by reversing CAs decision and reinstating
NLRCs decision.
CA erred in appreciation of evidence surrounding De Castros termination
from employment. The cited grounds are doubtful under proven
circumstances and should have been interpreted in De Castros favor
pursuant to Article 4 of the Labor Code.
4. Petitioner had not even passed his probationary period when the
acts charged allegedly took place. This provides the following
implications:
a. As a new employee, his natural motivation was to make an early
positive impression on his employer.
b. His natural motivation as new employee and lack of awareness of the
dynamics of relationships within the company supports his action of
objecting to the way the contract for the installation of the fire escapes
was awarded to Samarita.
c. As a new employee, it is doubtful that he had already encouraged
solicitation of commission from suppliers. This was supported by the
turnaround of Ayings testimony.
5. De Castros relationships within the company at the time the
charges were filed showed that he might have stepped in the wrong
toes in the course of performing his duties.
a. Samarita had hidden dynamics with Quiogue since he was doing the
steel balusters for Quiogues home.
b. Mandap Quiogues subordinate.
c. Niguidula, purchasing manager, - is one who might be expected to be
in charge of actions regarding supply deals. He would not welcome a
zealous building administrator who can see how supplies are procured
and used.
d. Pacaldo subordinate of Niguidula
e. Balais air-con maintenance whom De Castro reprimanded for
unauthorized overtime work on an air-conditioning unit.
6. The timing of the filling of the charges was unusual the proposal to
solicit commission transpired in December, the charges were late
when they came in May. Also:
a. It was in April 1996 when De Castro questioned Quiogues decision to
award the contract to Samarita.
b. De Castro reprimanded Balais on the first week of May, an incident he
reported to Quiogue.
c. On May 09, 1996, De Castro had an altercation with Niguidula, an
incident he reported to Quigoue.

If doubts exist between the evidence presented by the employer and the
employee, the scales of justice must be tilted in favor of the latter it is a
time-honored rule in controversies between a laborer and his master,
doubts reasonably arising from the evidence or in the interpretation of
agreements and writing should be resolved in the formers favor.
Employer failed to prove a just cause for the termination of the petitioners
employment and CA erred when it saw grave abuse of discretion in NLRCs ruling.

LABOR STANDARDS
TOPIC: Social Justice

GR No. 157098
Norkis Free and Independent Worker Union (NFIWU) vs.
Norkis Trading Company (NTC), Inc
June 30, 2005
Stipulations in a contract must be read together not in isolation from one
another. The terms and clauses are clear and leave no room for doubt as
to the intention of the contracting parties whose literal meanings should
prevail.
The wage order was intended to fix a new minimum wage only, not to
grant across the-board wage increases. A reading of the wage order
convinces the court that the intention of RTWPB was to prescribe a floor
wage; not a salary ceiling This was affirmed in a letter-opinion sent by
RTPWB in answering the respondent companys queries.
RTPWB was only interpreting its own issuance, not a statutory provision.
The best authority to construe a rule or an issuance is its very source,
RTPWB.
Social justice does not mandate that every dispute should be
automatically decided in favor of labor. Court has always been guided by
the State policy enshrined in the Constitution: social justice and the
protection of the working class. Social justice does not, however, mandate
that every dispute should be automatically decided in favor of labor. In
every case, justice is to be granted to the deserving and dispensed in the
light of the established facts and the applicable law and doctrine.
Ponente: Justice Panganiban
FACTS:
Petitioner NFIWU and respondent company NTC entered into a Collective Bargaining
Agreement (CBA).
Section 2 Article XII of the same states: In the event a law is enacted increasing
the minimum wage, an across-the-board increase shall be granted by the company
according to the provisions of law.

On March 1998, Regional Tripartite Wage Productivity Board (RTWPB) of Region VII
issued Wage Order ROVII-06 establishing the minimum wage of P165.00 by
mandating an increase of P5.00 beginning April 1998 and another P5.00 effective
October 01, 1998.
Prior to this order, NFIWU and NTC had a memorandum of agreement stating
providing: P10.00 increase effective August 01, 1997 and another P10.00 increase
effective August 01, 1998. Thus, by the time the minimum wage was set by law at
P165.00, NTC pays their employees at a minimum wage of P175.00
In accordance with the Wage Order, NFIWU demand an across-the-board increase.
NTC, however, refused to implement the Wage Order arguing that long before the
passage of the said order, they have been paying its employees a daily wage of
P165.00 while the minimum wage at that time was still P155.00 per day. When the
Order became effective prescribing the new minimum wage of P165.00 per day, the
employees were already receiving P175.00 per day.
For failure to settle this controversy, a complaint was filed by petitioner in the
National Conciliation and Mediation Board where both parties selected an arbitrator
to decide the controversy.
Arbitrator: NFIWUs favor, NTC failed to comply with contractual obligation,
particularly, in Section 2 of Article XII of the CBA.
CA: NTCs favor, CA considered RTWPBs opinion in the scope and application of
the wage order where it showed that NTC sufficiently complied with the said wage
order. The wage order exempted enterprises already paying salary equal to or more
than the prescribed minimum wage; thus, the order effectively made the previous
voluntary increases given by respondent to its employees creditable against the
law-mandated increase.
Hence, this instant petition
ISSUE/S:
W/N NTC violated the CBA in its refusal to grant its employees an acrossthe-board increase as a result of the passage of Wage Order No. ROVII-06.
DECISION:
The court denied this petition and affirmed CAs decision.
Stipulations in a contract must be read together not in isolation from one
another. The terms and clauses are clear and leave no room for doubt as
to the intention of the contracting parties whose literal meanings should
prevail.
Collective Bargaining Agreement (CBA) Section 2 Article XII of the same states: In
the event a law is enacted increasing the minimum wage, an across-the-board
increase shall be granted by the company according to the provisions of law.
Petitioner disregards in its argument the qualifying phrase according to the
provisions of the law. Stipulations in a contract must be read together not in

isolation from one another. The terms and clauses are clear and leave no room for
doubt as to the intention of the contracting parties whose literal meanings should
prevail.
The wage order was intended to fix a new minimum wage only, not to
grant across the-board wage increases.
In Employers Confederation of the Phils. Vs. National Wages and Productivity
Commission, the court held that there are two methods of adjusting the minimum
wage:
1. Floor Wage fixing of determinate amount to be added to the prevailing
statutory minimum wage rates.
2. Salary Ceiling workers already paid more than the existing minimum wage
are also to be given a wage increase.
A reading of the wage order convinces the court that the intention of
RTWPB was to prescribe a floor wage; not a salary ceiling This was
affirmed in a letter-opinion sent by RTPWB in answering the respondent
companys queries.
RTPWB was only interpreting its own issuance, not a statutory provision.
The best authority to construe a rule or an issuance is its very source,
RTPWB.
The board has the authority to interpret its own rules and issuances; any phrase
contained in its interpretation becomes a part of those rules or issuances
themselves. Thus, it was proper for CA to consider the letter-opinion written by
RTWPB to explain the scope and import of its own order; as such interpretation is
deemed part of the order itself.
Social justice does not mandate that every dispute should be
automatically decided in favor of labor. Court has always been guided by
the State policy enshrined in the Constitution: social justice and the
protection of the working class. Social justice does not, however, mandate
that every dispute should be automatically decided in favor of labor. In
every case, justice is to be granted to the deserving and dispensed in the
light of the established facts and the applicable law and doctrine.