2 Final

LABOR STANDARDS | 2011 NLRC RULES OF
PROCEDURE
22.T/SGP Larkins vs. NLRC, G.R. No.
92432, February 23, 1995
FACTS: Petitioner was a member of the
United States Air Force (USAF) assigned to
oversee the dormitories of the Third
Aircraft Generation Squadron (3 AGS) at
Clark Air Base, Pampanga. Thereafter, 3
AGS terminated the contract for the
maintenance
and
upkeep
of
the
dormitories with the De Guzman Custodial
Services. The employees thereof, including
private respondents, were allowed to
continue working for 3 AGS. It was left to
the new contractor, the JAC Maintenance
Services owned by Cunanan, to decide
whether it would retain their services.
Cunanan, however, chose to bring in his
own workers. As a result, the workers of
the De Guzman Custodial Services were
requested to surrender their base passes.
Private respondents then filed a complaint
with the Regional Arbitration Branch of the
NLRC
against
petitioner,
Lt.
Col.
Frankhauser, and Cunanan for illegal
dismissal and underpayment of wages.
Private
respondents
amended
their
complaint and added therein claims for
emergency cost of living allowance,
thirteenth month pay, service incentive
leave
pay
and
holiday
premiums.
Petitioner and Lt. Col. Frankhauser failed
to answer the complaint, appear at the
hearings and submit their position paper,
which the Labor Arbiter deemed a waiver
on their part to do so. The case was
therefore submitted for decision on the
basis of private respondents' position
paper and supporting documents. The
Labor Arbiter rendered a decision granting
all the claims of private respondents.
Petitioner appealed to the NLRC claiming
that the Labor Arbiter never acquired
jurisdiction over her person because no
summons or copies of the complaints,
both original and amended, were ever
served on her.
ISSUE: Whether Labor Arbiter acquired
jurisdiction over petitioners person.
HELD:
Labor
Arbiter
acquired
no
jurisdiction over the case and the person
of petitioner. Firstly, the "Agreement
Between the Republic of the Philippines

and the United States of America
Concerning Military Bases," governed the
rights, duties, authority, and the exercise
thereof by Philippine and American
nationals inside the U.S. military bases in
the country. Article XIV is the governing
procedure for service of summons on
persons inside U.S. military bases.
Summonses and other processes issued
by Philippine courts and administrative
agencies for United States Armed Forces
personnel within any U.S. base in the
Philippines could be served therein only
with the permission of the Base
Commander. If he withholds giving his
permission, he should instead designate
another person to serve the process, and
obtain the server's affidavit for filing with
the appropriate court. Respondent Labor
Arbiter did not follow said procedure. He
instead, addressed the summons to Lt.Col.
Frankhauser
and
not
the
Base
Commander. Secondly, under Base Labor
Agreement, any dispute or disagreement
between the United States Armed Forces
and Filipino employees should be settled
under grievance or labor relations
procedures established therein (Art. II) or
by the arbitration process provided in the
Romualdez-Bosworth
Memorandum
of
Agreement. If no agreement was reached
or if the grievance procedure failed, the
dispute was appealable by either party to
a Joint Labor Committee established in
Article III of the Base Labor Agreement.
Therefore, no jurisdiction was ever
acquired by the Labor Arbiter over the
case and the person of petitioner and the
judgment rendered is null and void. Lastly,
notices of hearing are not summonses. It
is basic that the Labor Arbiter cannot
acquire jurisdiction over the person
without being served with summons. In
the absence of service of summons or a
valid waiver thereof, the hearings and
judgment rendered by the Labor Arbiter
are null and void. Petitioner, in the case at
bench, appealed to the NLRC
and
participated in the oral argument before
the said body. This, however, does not
constitute a waiver of the lack of
summons and a voluntary submission of
her person to the jurisdiction of the Labor
Arbiter. If an appearance before the NLRC

PROCEDURE
is precisely to question the jurisdiction of
the said agency over the person of the
defendant, then this appearance is not
equivalent to service of summons
23.UERM Memorial Medical Center vs.
NLRC, G.R. No. 110419, March 3,
1997
24.
FACTS: On 12 April 1988, Policy
Instruction No. 54 was issued by the SOLE,
which reads: the personnel in subject
hospitals and clinics are entitled to a full
weekly wage of seven days if they have
completed the 40-hour/5-day workweek in
any given work week.
Petitioners challenged the validity of said
Policy Instruction and refused to pay the
salaries of the private respondents for
Saturdays and Sundays. Within the
reglementary period for appeal, the
petitioners
filed
their
Notice
and
Memorandum of Appeal with a Real Estate
Bond consisting of land and various
improvements. The private respondents
moved to dismiss the appeal on the
ground that Article 223 of the Labor Code,
as amended, requires the posting of a
cash or surety bond. The NLRC directed
petitioners to post a cash or surety bond
with a warning that failure to do so would
cause the dismissal of the appeal.
ISSUE: Whether in perfecting an appeal to
the National Labor Relations Commission
(NLRC) a property bond is excluded by the
two forms of appeal bond cash or surety
as enumerated in Article 223 of the
Labor Code.
HELD: The applicable law is Article 223 of
the Labor Code, as amended by Republic
Act No. 6715, which provides: "In case of a
judgment involving a monetary award, an
appeal by the employer may be perfected
only upon the posting of a cash or surety
bond issued by a reputable bonding
company
duly
accredited
by
the
Commission in the amount equivalent to
the monetary award in the judgment
appealed from.
We have given a liberal interpretation to
this provision. We previously held that:
"The intention of the lawmakers to make

the bond an indispensable requisite for the
perfection of an appeal by the employer is
underscored by the provision that an
appeal by the employer may be perfected
"only upon the posting of a cash or surety
bond." The word "only" makes it perfectly
clear, that the lawmakers intended the
posting of a cash or surety bond by the
employer to be the exclusive means by
which an employer's appeal may be
perfected. The requirement is intended to
discourage employers from using an
appeal to delay, or even evade, their
obligation to satisfy their employees' just
and lawful claims. Considering, however,
that the current policy is not to strictly
follow technical rules but rather to take
into account the spirit and intention of the
Labor Code, it would be prudent for us to
look into the merits of the case, especially
since petitioner disputes the allegation
that private respondent was illegally
dismissed."In the case at bar, the
judgment involved is more than P17
million and its precipitate execution can
adversely affect the existence of petitioner
medical center. Likewise, the issues
involved are not insignificant and they
deserve a full discourse by our quasijudicial and judicial authorities. We are
also confident that the real property bond
posted by the petitioners sufficiently
protects
the
interests
of
private
respondents should they finally prevail. It
is not disputed that the real property
offered
by
petitioners
is
worth
P102,345,650. The judgment in favor of
private respondent is only a little more
than P17 million. The case is remanded to
the NLRC for continuation of proceedings
25.3. Phil Tranco Services vs. NLRC,
G.R. No. 124100, April 1, 1998
FACTS: Nieva was employed as a driver
by petitioner assigned to the Legaspi City
Pasay City route. Nieva sideswiped an
owner-type jeep and a criminal complaint
was filed against him. Philtranco posted a
bail bond for Nieva. After having been
suspended, he was told to wait until his
case was settled. The case was finally
settled he was requested to file a new
application as he was no longer

PROCEDURE
considered an employee of Philtranco,
allegedly for being absent without leave
from October 19 to November 20, 1989.
Nieva filed a complaint for illegal dismissal
and demanded for 13th month pay with
the NLRCs
National
Capital Region
Arbitration Branch in Manila. Philtranco
filed a motion to dismiss on the ground of
improper
venue,
stating
that
the
complaint should have been lodged with
the NLRCs Regional Arbitration Branch in
Legaspi City, not only because Nieva was
a resident thereof, but also because the
latter was hired, assigned, and based in
Legaspi City.
ISSUE: Whether NLRCs NCR Arbitration
Branch in Manila was a proper venue for
the filing of Nievas complaints for illegal
dismissal
HELD: The filing of the complaint with the
National Capital Region Arbitration Branch
was proper, Manila being considered as
part of Nievas workplace by reason of his
plying the Legaspi City-Pasay City route. In
fact, Section 1(a), Rule IV of the New Rules
of Procedure of the NLRC is merely
permissive.
Provisions on venue are
intended to assure convenience for the
employee and his witnesses and to
promote the ends of justice provided that
it is not oppressive to the employer.
26.4. St. Martin Funeral Homes vs.
NLRC,
G.R.
No.
130866,
September 16, 1998
FACTS: The owner of petitioner St. Martin
Funeral Homes, Inc. (St. Martin) is Amelita
Malabed. Prior to January 1996, Amelitas
mother managed the funeral parlor. In
1995, Aricayos was granted financial
assistance by Amelitas mother.
As a sign of appreciation, respondent
extended assistance in managing St.
Martin without compensation and no
written employment contract between
Amelitas
mother
and
respondent
Aricayos;
furthermore,
respondent
Aricayos was not even listed as an
employee in the Companys payroll.
When Amelitas mother died in January

1996, Amelita took over as manager of St.
Martin.Much to her chagrin, she found out
that St. Martinhad arrearages in the
payment of BIR taxes and otherfees owing
to
the
government,
but
company
recordstended to show that payments
were made thereon.As a result, Amelita
removed the authority fromrespondent
Aricayos and his wife from taking part in
managing St. Martins operations.
Aggrieved, respondent Aricayos accused
St.Martin of his illegal dismissal as
Operations Manager of the company. He
believed that the cause of his termination
was Amelitas suspicion that he pocketed
PhP 38,000.00 which was set aside for
payment to the BIR of St. Martins valued
added taxes. The Labor Arbiter rendered
a Decision, in favor of petitioner declaring
that hisoffice had no jurisdiction over the
case. NLRC issued a Resolution annulling
the Arbiters Decision and remanded the
case to him for appropriate proceedings,
to determine the factual issue of the
existence
of
employer-employee
relationship between the parties. When its
motion for reconsideration was rejected by
the NLRC, petitioner filed a petition for
certiorari under Rule 65 before this Court,
docketed
as
G.R.
No.
130866.On
September 16, 1998, this Court through
Justice Jose Vitug, rendered the landmark
Decision in this case then docketed as
G.R. No. 130866, holding for the first time
that all petitions for certiorari under Rule
65 assailing the decisions of the NLRC
should henceforth be filed with the CA
ISSUE: Whether a petitioner can file his
petition for certiorari under Rule 65 to
assail the decision of a lower court like
NLRC.
HELD: A petition for certiorari under
Rule65 must first be filed at the Court of
Appeals. Said court has a concurrent
jurisdiction on petitions for certiorari,
mandamus,
prohibitions. This is in
consonance with the hierarchy of courts.
27.5. Ludo & Luym Corp., vs.
Saornido,
G.R.
No.
140960,
January 20, 2003

PROCEDURE
FACTS:
Petitioner
LUDO
&
LUYM
CORPORATION (LUDO) is a domestic
corporation engaged in the manufacture
of coconut oil, corn starch, glucose and
related
products.
It
operates
a
manufacturing plant and a wharf where
raw materials and finished products are
shipped out.
In the course of its business operations,
LUDO engaged the arrastre services of
Cresencio LuArrastre Services (CLAS) for
the loading and unloading of its finished
products at the wharf. Accordingly, several
arrastre workers were deployed by CLAS
to perform the services needed by LUDO.
These arrastre workers were subsequently
hired, on different dates, as regular rankand-file employees of LUDO every time
the latter needed additional manpower
services. Said employees thereafter joined
respondent union, the LUDO Employees
Union (LEU), which acted as the exclusive
bargaining agent
of the rank-and-file
employees. Thereafter, respondent union
entered into a collective bargaining
agreement with LUDO which provides
certain benefits to the employees, the
amount of which vary according to the
length of service rendered by the availing
employee the union requested LUDO to
include in its members period of service
the time during which they rendered
arrastre services to LUDO through the
CLAS so that they could get higher
benefits. LUDO failed to act on the
request. Thus, the matter was submitted
for voluntary arbitration.
The parties
accordingly
executed
a
submission
agreement raising the sole issue of the
date of regularization of the workers for
resolution by the Voluntary Arbitrator. The
Voluntary Arbitrator ruled that: (1) the
respondent employees were engaged in
activities necessary and desirable to the
business of petitioner, and (2) CLAS is a
labor-only contractor of petitioner.
In this instant case, petitioner contends
that the appellate court gravely erred
when it upheld the award of benefits
which were beyond the terms of
submission agreement. Petitioner asserts
that the arbitrator must confine its
adjudication to those issues submitted by
the parties for arbitration, which in this
case is the sole issue of the date of

regularization of the workers. Hence, the
award of benefits by the arbitrator was
done
in
excess
of
jurisdiction.
Respondents, for their part, aver that the
three-year prescriptive period is reckoned
only from the time the obligor declares
his refusal to comply with his obligation in
clear and unequivocal terms. In this case,
respondents maintain that LUDO merely
promised to review the company records
in response to respondents demand for
adjustment
in
the
date
of
their
regularization
without
making
a
categorical statement of refusal
ISSUE: Whether benefits consisting of
salary increases, vacation leave and sick
leave benefits for the years1977 to 1987
are already barred by prescription when
private respondents filed their case in
January 1999.
HELD: We held in San Jose vs NLRC, that
the jurisdiction of the Labor Arbiter and
the Voluntary Arbitrator or Panel of
Voluntary Arbitrators over the cases
enumerated in the Labor Code, Articles
217, 261 and 262, can possibly include
money claims in one for more another.
Comparatively, in another case we held
that compulsory arbitration has been
defined both as the process of settlement
of labor disputes by a government agency
which has the authority to investigate and
to make an award which is binding on all
the parties, and as a mode of arbitration
where the parties are compelled to accept
there solution of their dispute through
arbitration by a third party. In general, the
arbitrator is expected to decide those
questions expressly stated and limited in
the submission agreement. However,
since arbitration is the final resort for the
adjudication of disputes, the arbitrator can
assume that he has the power to make a
final settlement.
While
the
submission
agreement
mentioned only the determination of the
date
or
regularization,
law
and
jurisprudence give the voluntary arbitrator
enough leeway of authority as well as
adequate prerogative to accomplish the
reason for which the law on voluntary

PROCEDURE
arbitration was created speedy labor
justice.
Since the parties had continued their
negotiations even after the matter was
raised before the Grievance Procedure and
the voluntary arbitration, the respondents
had not refused to comply with their duty.
They just wanted the complainants to
present some proofs. The complainants
cause of action had not therefore accrued
yet. Besides, in the earlier voluntary
arbitration case aforementioned involving
exactly the same issue and employees
similarly situated as the complainants,
the same defense was raised and
dismissed by Honorable Thelma Jordan,
Voluntary Arbitrator.
28.6.
Hansin
Engineering
Construction vs. CA, G.R.
165910, April 10, 2006
&
No.
FACTS: Hanjin is a construction company

that had been
contracted by the
Philippine
Government
for
the
construction of various foreign-financed
projects. Hanjin and the Philippine
Government entered into contracts for the
construction of the Malinao Dam at Pilar,
Bohol, with a projected completion period
of1,050 calendar days, including main
canal and lateral projects for 750 days.
From August 1995 to August1996, Hanjin
contracted the services of 712carpenters,
masons, truck drivers, helpers, laborers,
heavy equipment operators, lead men,
engineers,
steel
men,
mechanics,
electricians and others. In April 1998, 712
employees filed complaints for illegal
dismissal and for payment of benefits
against petitioners, before the NLRC. The
complainants
averred that they were
regular employees of Hanjin and that they
were separated from employment without
any lawful or just cause. Only 521 of the
complainants affixed their signatures in
the complaints. Petitioners alleged that
the complainants were mere project
employees in its Bohol Irrigation Project
and that 2 of the workers were charged
with qualified theft before the RTC. Some
of the complainants had already migrated
to USA or had died, while 117 of them
were still under the employ of Hanjin.
Petitioner stated that some of the
complainants had voluntarily resigned; 14

were absent without prior
approved
leave; 15 had signed a Motion to Withdraw
from the complaint; and many of the
complainants were separated on account
of the completion of the project. However,
petitioners failed to append any document
to support their claim. Labor Arbiter
rendered judgment in favor of the
428complainants, granting separation pay
and attorney's fees to each of them
stating that the complainants were regular
employees of petitioner and their claims
for underpayment, holiday pay, premium
pay for holiday and rest day, 13th month
pay, and service incentive leave would be
computed after sufficient data were made
available.
Petitioners
appealed
the
decision to the NLRC, which affirmed with
modification the Labor Arbiter's ruling.
Petitioners filed a Motion for the
Reconsideration of the decision(with a
motion to conduct clarificatory hearings)
NLRC partially granted petitioners' motion.
Unsatisfied, petitioners filed a Petition for
Certiorari under Rule 65 of the Revised
Rules of Court in the CA. CA dismissed the
petition and affirmed the NLRC's ruling
that the dismissed employees were
regular employees. The CA stressed that
petitioners failed to refute the claim of the
respondents that they were regular
employees.
Petitioners
moved
to
reconsider the decision, which the CA
denied.
ISSUE: Whether respondents are project
employees.
HELD: While respondent alleged that
"complainants all signed a contract of
employment at the time they were hired
indicating therein the particular project
they will be working on, the period and
other
conditions
provided
in
their
contracts which complainants fully knew
and understood," now herein the records
can the said contracts be found.
Moreover, let it be stressed that under DO
No. 19,Series of 1993 on project
employment, 6indicators are enumerated
therein and one of which is that: "The
termination of his employment in the
particular project/undertaking is reported
to the Department of Labor and

PROCEDURE
Employment (DOLE)Regional Office having
jurisdiction over the workplace within 30
days following the date of his separation
from work x x x."In this particular case,
the records do not show that a similar
report was ever made by respondent to
the
Department
of
Labor
and
Employment. Such failure of respondent
employer to report to the nearest
employment office of the Department of
Labor, the termination of the workers it
claimed as project employees at the time
it completed the project, is proof that
complainants were not project employees.
The principal test for determining whether
particular
employees
are
properly
characterized as project employees is:
whether or not the project employees
were assigned to carry out a specific
project or undertaking, the duration of
which were specified at the time the
employees were engaged for that project.
Predetermination of the duration or period
of project employment is essential in
resolving whether one is a project
employee or not.
In the instant case, the completion of the
project for which the complainants were
hired was not determined at the start of
their employment, there being no
substantial proof thereof. The fact that
complainants had rendered more than one
year of service at the time of their
dismissal and there being no substantial
evidence to support that they were
engaged to work on a specific project or
undertaking,
overturns
respondents
allegation that complainants were project
employees hired for a
specific fixed
project for a limited period of time.
Complainants herein were, therefore, nonproject employees, but regular employees.
Admittedly,
being
a
duly
licensed
contractor
firm
in
the
Philippines,
respondent is the awardee of several
construction projects and in many
occasions it has been given the priority in
the awarding of subsequent projects. In
the light of the above facts and
circumstances, the respondent's main
defense that completion of the project
worked on by the complainants constitute
a
valid
cause
of
termination
is
unsustainable. To repeat, there is no
substantial evidence on record to sustain

this contention. The mere allegation of the
respondents that under their employment
contracts the complainants were made to
understand that they were project
employees is definitely not persuasive or
unworthy of credence. The best evidence
of which would have been the alleged
contracts. These employees signed duly
notarized waivers/quitclaims and who did
not recant later. In the absence of
evidence showing the contrary, said
quitclaims were executed voluntarily and
without
any
force
or
intimidation.
Petitioners submitted to the NLRC dubious
machine copies of only some of
respondents? contracts, including alleged
employment
termination
reports
submitted to the DOLE. The NLRC found
the contracts barren of probative weight
and utterly insufficient to buttress the
contention of petitioners that respondents
were only project employees. Contrary to
the
representation
of
respondent's
counsel, the original copies of the reports
made to DOLE were never produced and
submitted to this Commission. Neither
were they presented for comparison with
the machine copies. These machine copies
were not also certified as true copies by
the DOLE.
The actual continuous
employment
of
complainants
by
respondent Hanjin since 1991 until 1995
overcomes the piecemeal "appointments"
covering for periods of 6 months or less.
From these short term but repeated
"appointments," it is apparent that the
periods have been imposed to preclude
the acquisition of tenurial security by the
employee and which kind of employment
contracts should be disregarded for being
contrary to public policy.
The appellate court, the NLRC and the
Labor Arbiter are thus one in finding that
respondents were not project employees,
and in sustaining respondents' claim of
illegal dismissal due to petitioners failure
to adduce contrary evidence. Well-settled
is the rule that findings of fact of quasijudicial agencies, like the NLRC, are
accorded not only respect but at times
even finality if such findings are supported
by substantial evidence. Such findings of
facts can only be set aside upon showing
of grave abuse of discretion, fraud or error

PROCEDURE
of law, none of which have been shown in
this case.
29. Phil. Journalist Inc. vs. NLRC, G.R.
No. 166421, Sept. 5, 2006
FACTS: The Philippine Journalists, Inc. (PJI)
is a domestic corporation engaged in the
publication and sale of newspapers and
magazines. The exclusive bargaining
agent of all the rank-and-file employees in
the company is the Journal Employees
Union (Union for brevity). In 2005, the
Union filed a notice of strike before the
National Conciliation and Mediation Board
(NCMB), claiming that PJI was guilty of
unfair labor practice. PJI was then going to
implement a retrenchment program due to
"over-staffing or bloated work force and
continuing actual losses sustained by the
company for the past three years resulting
in negative stockholders equity of P127.0
million. After submitting their respective
papers, in its resolution dated May 31,
2001, the NLRC declared that the 31
complainants were illegally dismissed and
that there was no basis for the petitioners
retrenchment program thus it ordered
their reinstatement to their former
position without loss of seniority rights
and other other benefits, with payment of
unpaid salaries, bonuses and backwages.
Thereafter, the parties executed a
Compromise Agreement dated July 9,
2001, where PJI under took to reinstate
the 31 complainant-employees effective
July 1, 2001 without loss of seniority rights
and benefits; 17 of them who were
previously retrenched were agreed to be
given full and complete payment of their
respective monetary claims, while 14
others
would be paid their monetary
claims minus what they received by way
of separation pay. The compromise
agreement was submitted to the NLRC for
approval. The compromise agreement was
approved and was deemed closed and
terminated. The Union filed another Notice
of Strike claiming that 29 employees
where illegally dismissed. After the
retrenchment program was implemented,
the members-employees who continued
working were made to sign 5 month
contract and was threatened to be

dismissed if they refused to conform to
40% to 50% salary deduction. The NLRC
forthwith issued another Resolution on July
25, 2002, declaring that the Clarificatory
Motion of complainants Floro Andrin, Jr.
and Jazen M.Jilhani had been mooted by
the compromise agreement as they
appeared to be included in paragraph 2.c
and paragraph 2.d, respectively thereof.
As to the seven others who had filed a
motion for clarification, the NLRC held that
they should have filed individual affidavits
to establish their claims or moved to
consolidate their cases with the certified
case. Thus, the NLRC granted the
computation of their benefits as shown in
the
individual
affidavits
of
the
complainants. However, as to the prayer
to declare the Union guilty of unfair labor
practice, to continue with the CBA
negotiation and to pay moral and
exemplary damages, the NLRC ruled that
there was no sufficient factual and legal
basis to modify its resolution.
Thus, the compromise agreement was
approved and NCMB-NCR-NS-03-087-00
was deemed closed and terminated .In its
Resolution dated July 31, 2003, the NLRC
ruled that the complainants were not
illegally dismissed. The May 31, 2001
Resolution declaring the retrenchment
program illegal did not attain finality as "it
had been academically mooted by the
compromise agreement entered into
between both parties on July 9, 2001."
According to the Commission, it was on
the basis of this agreement that the July
25, 2002 Resolution which declared the
case closed and terminated was issued.
Thus, the May 31, 2001 Resolution could
not be made the basis to justify the
alleged continued employment regularity
of the 29 complainants subsequent to
their retrenchment. The NLRC also
declared that by their separate acts of
entering into fixed-term employment
contracts with petitioner after their
separation from employment by virtue of
retrenchment, they are deemed to have
admitted the validity of their separation
from employment and are thus estopped
from questioning it. The NLRC dismissed
the case for lack of merit, but directed the

PROCEDURE
company to "give preference to the
separated 29 complainants should they
apply for re-employment."In its Decision
dated August 17, 2004, the appellate
court held that the NLRC gravely abused
its discretion in ruling for PJI. The
compromise agreement referred only to
the award given by the NLRC to the
complainants in the said case, that is, the
obligation of the employer to the
complainants. The CA also ruled that the
dismissed employees were not barred
from pursuing their
monetary claims
despite the fact that they had accepted
their separation pay and signed their
quitclaims.
ISSUE: whether an NLRC Resolution,
which includes a pronouncement that the
members of a union had been illegally
dismissed, is abandoned or rendered
moot and academic by a compromise
agreement subsequently entered into
between the dismissed employees and the
employer and if such a compromise
agreement constitutes res judicata to a
new complaint later filed by other union
members-employees, not parties to the
agreement, who likewise claim to have
been illegally dismissed.
HELD: Article 227 of the Labor Code of the
Philippines
authorizes
compromise
agreements voluntarily agreed upon by
the parties, in conformity with the basic
policy of the State "to promote and
emphasize the primacy of free collective
bargaining and negotiations, including
voluntary arbitration, mediation and
conciliation, as modes of settling labor or
industrial disputes. ART. 227 Compromise
Agreements.
Any
compromise
settlement, including those involving labor
standard laws, voluntarily agreed upon by
the parties with the assistance of the
Bureau or the regional office of the
Department of Labor, shall be final and
binding upon the parties. The National
Labor Relations Commission or any court
shall not assume jurisdiction over issues
involved therein except in case of
noncompliance thereof or if there is prima
facie evidence that the settlement was
obtained
through
fraud,
misrepresentation, or coercion. Thus, a
judgment rendered in accordance with a

compromise agreement is not appealable,
and is immediately executory unless a
motion is filed to setaside the agreement
on the ground of fraud, mistake, or duress,
in which case an appeal may be taken
against the order denying the motion.
Under Article2037 of the Civil Code, "a
compromise has upon the parties the
effect and authority of res judicata," even
when effected without judicial approval;
and under the principle of res judicata, an
issue which had already been laid to rest
by the parties themselves can no longer
be relitigated. Adjective law governing
judicial compromises annunciate that once
approved by the court, a judicial
compromise is not appealable and it
thereby becomes immediately executory
but this rule must be understood to refer
and apply only to those who are bound by
the compromise and, on the assumption
that they are the only parties to the case,
the litigation comes to an end except only
as regards to its compliance and the
fulfillment by the parties of their
respective obligations there under. The
reason for the rule, said the Court in
Domingo v. Court of Appeals[325 Phil.
469], is that when both parties so
enterinto the agreement to put a close to
a pendinglitigation between them and ask
that a decision berendered in conformity
therewith, it would only be"natural to
presume that such action constitutes an
implicit waiver of the right to appeal"
against thatdecision. The order approving
the compromise agreement thus becomes
a final act, and it forms part and parcel of
the judgment that can be enforced by a
writ of execution unless otherwise
enjoined by a restraining order .
Thus, contrary to the allegation of
petitioners, the execution and subsequent
approval by the NLRC of the agreement
forged between it and the respondent
Union did not render the NLRC resolution
in effectual, nor rendered it "moot and
academic."The agreement becomes part
of the judgment of the court or tribunal,
and as a logical consequence, there is an
implicit waiver of the right to appeal.

PROCEDURE
In any event, the compromise agreement
cannot bind a party who did not
voluntarily take part in the settlement
itself and gave specific individual consent.
It
must
be
remembered
that
a
compromise agreement is also a contract;
it requires the consent of the parties, and
it is only then that the agreement may be
considered as voluntarily entered into. A
careful perusal of the wordings of the
compromise agreement will show that the
parties agreed that the only issue to be
resolved was the question of the monetary
claim of several employees. The findings
of the appellate court are in accord with
the evidence on record, and we note with
approval the following pronouncement:
Respondents
alleged
that
it
hired
contractual employees majority of whom
were those retrenched because of the
increased but uncertain demand for its
publications. Respondent did this almost
immediately after its alleged retrenchment
program. Another telling feature in the
scheme of respondent is the fact that
these contractual employees were given
contracts of five (5) month durations and
thereafter,
were
offered
regular
employment with salaries lower than their
previous salaries. The Labor Code
explicitly prohibits the diminution of
employees benefits.
Clearly, the situation in the case at bar is
one of the things the provision on security
of tenure seeks to prevent. Lastly, it could
not be said that the employees in this
case are barred from pursuing their claims
because of their acceptance of separation
pay and their signing of quitclaims. It is
settled that quitclaims, waivers and/or
complete releases executed by employees
do not stop them from pursuing their
claims if there isa showing of undue
pressure or duress. The basic reason for
this is that such quitclaims, waivers and/or
complete releases being figuratively
exacted through the barrel of a gun, are
against public policy and therefore null
and void ab initio (ACD Investigation
Security Agency, Inc. v. Pablo D. Daquera,
G.R. No.147473, March 30, 2004).
In the case at bar, the employees were
faced with impending termination. As
such, it was but natural for them to accept

whatever monetary benefits that they
could get.
30.ST. MARTIN FUNERAL HOMES vs.
NATIONAL
LABOR
RELATIONS
COMMISSION (NLRC) (Nov. 22,
2006)
FACTS: Complainant, herein private
respondent Aricayos, filed a petition for
illegal
dismissal
with
prayer
for
reinstatement, payment of back wages
and damages against petitioner St. Martin
Funeral Homes. The initiatory pleading
was filed before the NLRC RAB.
The owner of St. Marting Funeral Homes is
Amelita
Malabed.
Amelitas
mother
managed the funeral parlor. Respondent
Aricayos, on the other hand, was formerly
an overseas contract worker. Aricayos, in
1995, was granted financial assistance by
Amelitas
mother.
As
a
sign
of
appreciation,
Aricayos
extended
assistance
to
Amelitas
mother
in
managing
St.
Martin
without
compensation. There was no written
employment contract between them,
Aricayos was not even listed as an
employee in the Companys payroll.
When Amelita took over, after her
mothers death, she saw that there were
some arrears in the payment of BIR taxes.
Thus, Amelita removed the authority from
Aricayos and his wife from taking part in
managing St. Martins operations. Thus,
Aricayos accused St. Martin of his illegal
dismissal as Operations Manager on the
ground of Amelitas suspicion that he
pocketed money for payment of BIR taxes.
LA rendered a decision in favor of St.
Martins stating that it had no jurisdiction
over the case, citing Dela Salle University
vs. NLRC , as it is the civil court which has
jurisdiction to determine whether there is
an employer-employee relationship. NLRC,
however, reversed the decision stating
that LA is so authorized to threshed out
the issue of the existence of employeremployee relationship when the facts are
not too clear so as the ends of justice
would better be served. MR of petitioner

PROCEDURE
was denied by NLRC. P filed for certiorari
under Rule 65. The case was remanded to
the CA and CA affirmed the decision of
NLRC.
Petitioner
asserts
that
LA
already
concluded that there was no EE-ER
relationship based on the position papers
and memoranda of the parties. On the
other hand, respondent Aricayos supports
the pronouncement of the NLRC as
affirmed by the CA that there was no
determination of the existence of EE-ER
relationship.
Thus, this is petition for review on
certiorari under Rule 45 seeking to reverse
the decision of the CA which affirmed the
NLRC in remanding the complaint of
respondent Aricayos to the Labor Arbiter.
ISSUE: WON the LA made a determination
of the presence of an EE-ER relationship
between St. Martin and Aricayos based on
the evidence on record. Further, WON it is
within the authority of the LA to set the
labor case for hearing to be able to
determine the veracity of the conflicting
positions of the parties.
RULING: While a formal trial or hearing is
discretionary on the part of the Labor
Arbiter, when there are factual issues that
require a formal presentation of evidence
in a hearing, the Labor Arbiter cannot
simply rely on the position papers, more
so, on mere unsubstantiated claims of
parties.
APPLICATION:
In In the case at bar, there are certain
admissions by petitioner St. Martin that
should have prodded the Labor Arbiter to
conduct a hearing for a more in-depth
examination of the contrasting positions of
the parties, namely:
1.
That respondent helped Amelita's
mother manage the funeral parlor
business by running errands for her,
2.
Overseeing the business from 1995
up to January 1996 when the mother died,
3.
And that after Amelita made
changes in the business operation, private
respondent and his wife were no longer
allowed to participate in the management

of St. Martin.
These facts, as admitted by the petitioner
and the affidavits of St. Martin's witnesses,
could have been examined more in detail
by the Labor Arbiter in a hearing to
convince himself that there was indeed no
employment relationship between the
parties as he originally found.
CA decision affirmed. Petition DENIED.
31. DOLE Philippines, Inc. vs. Medel

Esteva, et al.
[GR No. 161115 November 30, 2006]
FACTS: Petitioner is a corporation
engaged principally in the production and
processing of pineapple for the export
market. Respondents are members of the
Cannery
Multi-Purpose
Cooperative
(CAMPCO).
CAMPCO was organized in
accordance with Republic Act No. 6938,
otherwise known as the Cooperative Code
of the Philippines. Pursuant to the Service
Contract, CAMPCO members rendered
services to petitioner.
The number of
CAMPCO members that report for work
and the type of service they performed
depended on the needs of petitioner at
any given time.
Although the Service
Contract specifically stated that it shall
only be for a period of six months, i.e.,
from 1 July to 31 December 1993, the
parties had apparently extended or
renewed the same for the succeeding
years without executing another written
contract.
It
was
under
these
circumstances that respondents came to
work for petitioner. DOLE organized a Task
Force that conducted an investigation into
the
alleged
labor-only
contracting
activities of the cooperatives. The Task
Force identified six cooperatives that were
engaged in labor-only contracting, one of
which was CAMPCO. In this case,
respondents alleged that they started
working for petitioner at various times in
the years 1993 and 1994, by virtue of the
Service
Contract
executed
between
CAMPCO and petitioner.
All of the
respondents had already rendered more
than one year of service to petitioner.
While some of the respondents were still

PROCEDURE
working for petitioner, others were put on
stay home status on varying dates in
the years 1994, 1995, and 1996 and were
no longer furnished with work thereafter.
Together, respondents filed a Complaint
with the NLRC for illegal dismissal,
regularization,
wage
differentials,
damages and attorneys fees. Petitioner
denied
that
respondents
were
its
employees. It explained that it found the
need to engage external services to
augment its regular workforce, which was
affected by peaks in operation, work
backlogs, absenteeism, and excessive
leaves. It used to engage the services of
individual workers for definite periods
specified in their employment contracts
and never exceeding one year. However,
such an arrangement became the subject
of a labor case, in which petitioner was
accused of preventing the regularization of
such workers.
ISSUES:
1. Whether or not the court of appeals was
correct when it made its own factual
findings and
disregarded the factual
findings of the labor arbiter and the NLRC.
2. Whether or not CAMPCO was a mere
labor-only contractor.
RULING: Yes. The Court in the exercise of
its equity jurisdiction may look into the
records of the case and re-examine the
questioned findings. As a corollary, this
Court is clothed with ample authority to
review matters, even if they are not
assigned as errors in their appeal, if it
finds that their consideration is necessary
to arrive at a just decision of the case. The
same principles are now necessarily
adhered to and are applied by the Court of
Appeals in its expanded jurisdiction over
labor cases elevated through a petition for
certiorari; thus, we see no error on its part
when
it
made
anew
a
factual
determination of the matters and on that
basis reversed the ruling of the NLRC.
Yes. CAMPCO was a mere labor-only
contractor. First, although petitioner touts
the multi-million pesos assets of CAMPCO,
it does well to remember that such were
amassed in the years following its
establishment. In 1993, when CAMPCO

was established and the Service Contract
between petitioner and CAMPCO was
entered into, CAMPCO only had P6,600.00
paid-up capital, which could hardly be
considered substantial. It only managed to
increase its capitalization and assets in
the succeeding years by continually and
defiantly engaging in what had been
declared by authorized DOLE officials as
labor-only contracting. Second, CAMPCO
did not carry out an independent business
from petitioner.
It was precisely
established to render services to petitioner
to augment its workforce during peak
seasons. Petitioner was its only client.
Even as CAMPCO had its own office and
office equipment, these were mainly used
for administrative purposes; the tools,
machineries, and equipment actually used
by CAMPCO members when rendering
services to the petitioner belonged to the
latter. Third, petitioner exercised control
over the CAMPCO members, including
respondents. Petitioner attempts to refute
control by alleging the presence of a
CAMPCO supervisor in the work premises.
Yet, the mere presence within the
premises of a supervisor from the
cooperative did not necessarily mean that
CAMPCO had control over its members.
Section 8(1), Rule VIII, Book III of the
implementing rules of the Labor Code, as
amended, required for permissible job
contracting that the contractor undertakes
the contract work on his 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.
As alleged by the
respondents,
and
unrebutted
by
petitioner, CAMPCO members, before
working for the petitioner, had to undergo
instructions and pass the training provided
by petitioners personnel.
It was
petitioner who determined and prepared
the work assignments of the CAMPCO
members.
CAMPCO members worked
within
petitioners
plantation
and
processing
plants
alongside
regular
employees performing identical jobs, a
circumstance recognized as an indicium of
a
labor-only
contractorship.
Fourth,

PROCEDURE
CAMPCO was not engaged to perform a
specific and special job or service. In the
Service Contract of 1993, CAMPCO agreed
to assist petitioner in its daily operations,
and perform odd jobs as may be assigned.
CAMPCO complied with this venture by
assigning members to petitioner. Apart
from that, no other particular job, work or
service was required from CAMPCO, and it
is apparent, with such an arrangement,
that CAMPCO merely acted as a
recruitment agency for petitioner. Since
the undertaking of CAMPCO did not
involve the performance of a specific job,
but rather the supply of manpower only,
CAMPCO clearly conducted itself as a
labor-only contractor. Lastly, CAMPCO
members,
including
respondents,
performed activities directly related to the
principal business of petitioner.
They
worked as can processing attendant,
feeder of canned pineapple and pineapple
processing, nata de coco processing
attendant,
fruit
cocktail
processing
attendant, and etc., functions which were,
not only directly related, but were very
vital to petitioners business of production
and processing of pineapple products for
export. The declaration that CAMPCO is
indeed engaged in the prohibited activities
of
labor-only
contracting,
then
consequently,
an
employer-employee
relationship is deemed to exist between
petitioner and respondents, since CAMPCO
shall be considered as a mere agent or
intermediary of petitioner.
Since respondents are now recognized as
employees of petitioner, this Court is
tasked to determine the nature of their
employment. In consideration of all the
attendant circumstances in this case, this
Court concludes that respondents are
regular employees of petitioner. As such,
they are entitled to security of tenure.
They could only be removed based on just
and authorized causes as provided for in
the Labor Code, as amended, and after
they are accorded procedural due process.
Therefore, petitioners acts of placing
some of the respondents on stay home
status and not giving them work
assignments for more than six months
were already tantamount to constructive
and illegal dismissal.
32.INTERCONTINENTAL
BROADCASTING
CORP.
VS.
PANGANIBAN (G R. No. 151407,
February 6, 2007)
FACTS: Ireneo Panganiban (respondent)
was employed as Assistant
General
Manager
of
the
Intercontinental
Broadcasting Corporation (petitioner) from
May 1986 until his preventive suspension
on August 26, 1988. Respondent resigned
from his employment on September 2,
1988.
On April 12, 1989, respondent filed a civil
case with the RTC of Quezon City, Branch
93 against the members of the Board of
Administrators
(BOA)
of
petitioner
alleging, among others, non-payment of
his unpaid commissions. A motion to
dismiss was filed by Joselito Santiago, one
of the defendants, on the ground of lack of
jurisdiction, as respondents claim was a
labor money claim, but this was denied by
the RTC. Thus, Santiago filed a petition for
certiorari with the CA which granted
Santiagos petition for lack of jurisdiction
and set aside the RTCs Orders.
Thereafter, respondent was elected by the
BOA as Vice-President for Marketing in July
1992. He resigned in April 1993. On July
24, 1996, respondent filed against
petitioner a complaint for illegal dismissal,
separation pay, retirement benefits,
unpaid commissions, and damages. The
Labor Arbiter (LA) ordered respondents
reinstatement with full backwages, and
the payment of his unpaid commission,
damages and attorneys fees. Petitioner
appealed to the NLRC but due to
petitioners failure to post a bond, the
appeal was dismissed. The decision was
deemed final and executory.
ISSUE:
WON respondents claim for unpaid
commissions has already prescribed.
RULING:
Yes. Respondents claim had already
prescribed as of September 1991. In
addition, the claims of private respondent
for reinstatement, backwages and benefits

PROCEDURE
in conjunction with his employment from
1986 to 1988 have prescribed.
The applicable law in this case is Article
291 of the Labor Code which provides that
all money claims arising from employeremployee relations accruing during the
effectivity of this Code shall be filed within
three (3) years from the time the cause of
action accrued; otherwise they shall be
forever barred.
The term money claims covers all
money claims arising from an employeremployee relation the prescription of an
action is interrupted by (a) the filing of an
action, (b) a written extrajudicial demand
by the creditor, and (c) a written
acknowledgment of the debt by the
debtor.
On this point, the Court ruled that
although the commencement of a civil
action stops the running of the statute of
prescription or limitations, its dismissal or
voluntary abandonment by plaintiff leaves
the parties in exactly the same position as
though no action had been commenced at
all. Hence, while the filing of Civil Case
could have interrupted the running of the
three-year
prescriptive
period,
its
consequent dismissal by the CA due to
lack of jurisdiction effectively canceled the
tolling of the prescriptive period within
which to file his money claim, leaving
respondent in exactly the same position as
though no civil case had been filed at all.
The running of the three-year prescriptive
period not having been interrupted by the
filing of Civil Case respondents cause of
action
had
already
prescribed
on
September 2, 1991, three years after his
cessation of employment on September 2,
1988. Consequently, when respondent
filed his complaint for illegal dismissal,
separation pay, retirement benefits, and
damages in July 24, 1996, his claim,
clearly, had already been barred by
prescription.
33.G.R. No. 162813, February 12,
2007, Far East Agricultural Supply,
Inc. and/or Alexander Uy vs. Jimmy
Lebatique and the Honorable
Court Of Appeals
FACTS:
The case originated from a complaint for

illegal dismissal and nonpayment of
overtime pay filed by Jimmy Lebatique, a
truck driver against his employer, Far East
Agricultural Supply Inc.
Lebatique was employed March 1996 and
was tasked to deliver animal feeds to the
companys clients.
On
January
24,
200o,
Lebatique
complained about not being payed
overtime pay. That same day when he
complained, he was suspended by Far
Easts General Manager Manuel Uy for his
alleged illegal use of company vehicle,
and was prohibited from entering the
company premises when he reported to
work the next day.
Lebatique sought the assistance of the
DOLE Public Assistance and Complaints
Unit for the issue on the nonpayment of
his Overtime pay.
Two days after seeking the assistance of
the DOLE, he received a telegram from Far
East requiring him to report to work. Upon
his return, Alexander Uy confronted him
about his complaint and after talking to
Manuel, Alexander terminated Lebatique.
The Labor Arbiter ruled in favor of
Lebatique
but
this
decision
was
overturned by the NLRC who stated that
Lebatique was merely suspended and that
he is a field personnel not entitled to
overtime pay, service incentive leave pay
and 13th month pay. The Court of Appeals
reinstated the Arbiters ruling so petitioner
appealed to the Supreme Court by way of
review on certiorari.
ISSUE/S:
The case revolves around two specific
points on (1) whether or not Lebatique
was illegally dismissed and on (2) whether
or not he is a field personnel who is not
entitled to overtime pay.
RULING:
The case was remanded to the Labor
Arbiter
for
further
proceedings
to
determine
the amount of overtime pay and other
monetary benefits due to Lebatique
because:

PROCEDURE
Lebatique was illegally dismissed

In cases of illegal dismissal, the burden is
on the employer to prove that the
termination was for a valid cause and in
this case the petitioners failed to
discharge such burden.
34.LETRAN CALAMBA FACULTY and

EMPLOYEES
ASSOCIATION,
petitioner, vs. NATIONAL LABOR
RELATIONS
COMMISSION
and
COLEGIO DE SANJUAN DE LETRAN
CALAMBA, INC.,respondent.
As to the petitioners claims that

Lebatique was not dismissed but that he
abandoned
his
work
after
being
suspended, an employee who takes steps
to protest his layoff cannot by any stretch
of imagination be said to have abandoned
his work. Lebatiques filing of the
complaint is proof enough of his desire to
return to work, thus negating any
suggestion of abandonment.
Lebatique is not a field personnel
FACTS:
On October 8, 1992, the Letran Calamba
Faculty and Employees Association filed
with Regional Arbitration Branch No. IV of
the NLRC a Complaint against Colegio de
San Juan de Letran, Calamba, Inc for
collection of various monetary claims due
its members. The complaint alleges
among many things, that in the
computation for 13th month pay of its
academic personnel respondent does not
include
as
basis
therefor
their
compensation
for
overloads,
that
respondent has not paid the wage
increase, the salary increase due to the
non-academic personnel as a result of job
grading has not been given, that the acts
of the respondent has resulted in
diminution of benefits of the faculty
members.
In
its
position
paper,
respondent denied all the allegations.
The definition of a "field personnel" is not

merely concerned with the location where
the employee regularly performs his
duties but also with the fact that the
employees performance is unsupervised
by the employer. A field personnel are
those who regularly perform their duties
away from the principal place of business
of the employer and whose actual hours of
work in the field cannot be determined
with reasonable certainty. In order to
determine whether an employee is a field
employee, it is also necessary to ascertain
if actual hours of work in the field can be
determined with reasonable certainty by
the employer. In so doing, an inquiry must
be made as to whether or not the
employees time and performance are
constantly supervised by the employer.
Given the above definition, Lebatique is
not a field personnel for the following
reasons:
(1) company drivers, including
Lebatique, are directed to deliver the
goods at a specified time and place;
(2) they are not given the
discretion to solicit, select and contact
prospective clients; and
(3) Far East issued a directive that
company drivers should stay at the
clients premises during truck-ban hours
which is from 5:00 to 9:00 a.m. and 5:00
to 9:00 p.m.
Prior to the filing of the above-mentioned

complaint, petitioner filed a separate
complaint against the respondent for
money claims with Regional Office No. IV
of the Department of Labor and
Employment (DOLE). On the other hand,
pending resolution in another NLRC case,
responden school filed with Regional
Arbitration Branch No. IV of the NLRC a
petition to declare as illegal the strike
staged by petitioner.
On September 28, 1998, the Labor Arbiter
(LA) handling the consolidated cases
rendered a Decision dismissing the money
claims and declaring the strike illegal.
Upon appeal to the NLRC, the petition was
dismissed. Petitioner then availed of an
action for certiorari with the CA but was
also dismissed.
ISSUES:
1.
Whether or nor the CA erred in
holding that the factual findings of the
NLRCcannot be revied in certiorari
proceedings?

PROCEDURE
2.
Whether or not the teaching
overload should be included in the basis in
the computation of their 13th month pay?
or basic salary, because it is being paid for

additional work performed in excess of the
regular teaching load.
RULING: On the first issue

The Court finds no error in the ruling of the
CA that since nowhere in the petition is
there any acceptable demonstration that
the LA or the NLRC acted either with grave
abuse of discretion or without or in excess
of its jurisdiction, the appellate court has
no reason to look into the correctness of
the evaluation of evidence which supports
the labor tribunals' findings of fact.
The findings of the Labor Arbiter, when
affirmed by the NLRC and the CA, are
binding on the Supreme Court unless
patently erroneous. Thus, in a petitioner
for review on certiorari, this Courts
jurisdiction is limited to reviewing errors of
law in the absence of any showing that the
factual findings complained of are devoid
of support in the records or are glaringly
erroneous.
35. Metro Transit Organization vs.

Piglas NFWU-KMU et al., G.R. No.
175460, April 14, 2008
In petitions for review on certiorari like the

instant case, the Court invariably sustains
the unanimous factual findings of the LA,
the NLRC and the CA, specially when such
findings are supported by substantial
evidence and there is no cogent basis to
reverse the same, as in this case.22
FACTS:
Petitioner
Metro
Transit
Organization, Inc. (MTO) is a government
owned and controlled corporation which
entered
into
a
Management
and
Operations Agreement (MOA) with the
Light Rail Transit Authority (LRTA) for the
operation of the Light Rail Transit (LRT)
Baclaran-Monumento Line. For purposes of
collective bargaining agreement (CBA),
petitioner MTOs rank and file employees
formed
the
Pinag-isang
Lakas
ng
Manggagawa sa Metro, Inc.-National
Federation of Labor (PIGLAS).
Petitioners MTO and PIGLAS entered into a
CBA covering the period of 13 February
1995 to 13 February 2000. Thereafter,
PIGLAS renegotiated the CBA demanding
higher benefits.
On 25 July 2000, due to a bargaining
deadlock, PIGLAS filed a Notice of Strike
before the National Conciliation and
Mediation Board (NCMB).
On the second issue

Settled is the doctrine that when an
administrative
or
executive
agency
renders an opinion or issues a statement
of policy, it merely interprets a preexisting law and the administrative
interpretation is at best advisory for it is
the courts that finally determine what the
law means. Hence, while the DOLE order
may not be applicable, the Court finds that
overload pay should be excluded from the
computation of the 13th month pay of
petitioners members.
The striking PIGLAS members refused to

accede to the Return to Work Order.
Following their continued non-compliance,
on 28 July 2000, the LRTA formally
informed petitioner MTO that it had issued
a Board Resolution which: (1) allowed the
expiration after 31 July 2000 of LRTAs
MOA with petitioner MTO; and (2) directed
the LRTA to take over the operations and
maintenance of the LRT Line. By virtue of
said Resolution, petitioner MTO sent
termination notices to its employees,
including herein respondents.
In the same manner that payment for

overtime work and work performed during
special
holidays
is
considered
as
additional compensation apart and distinct
from an employee's regular wage or basic
salary, an overload pay, owing to its very
nature and definition, may not be
considered as part of a teacher's regular
Resultantly, respondents filed with the

Labor
Arbiter
Complaints[4]
against
petitioners and the LRTA for the following:
(1) illegal dismissal; (2) unfair labor
practice for union busting; (3) moral and
exemplary damages; and (4) attorneys
fees.

PROCEDURE
On 13 September 2004, the Labor Arbiter
rendered
judgment
in
favor
of
respondents.
Petitioners appealed to the National Labor
Relations Commission (NLRC).
In a
Resolution dated 19 May 2006, the NLRC
dismissed petitioners appeal for nonperfection since it failed to post the
required bond.
Without filing a Motion for Reconsideration
of the afore-quoted NLRC Resolution,
petitioners filed a Petition for Certiorari
with the Court of Appeals assailing the
same.
They have not, however, filed a motion for
reconsideration of the ruling prior to filing
the petition. This renders the petition
fatally defective.
ISSUE: Whether or not the non-filing of
motion of reconsideration to the NLRC is a
ground for dismissal of the appeal
HELD: We agree in the Court of Appeals
finding that petitioners case does not fall
under any of the recognized exceptions to
the filing of a motion for reconsideration,
to wit: (1) when the issue raised is purely
of law; (2) when public interest is involved;
(3) in case of urgency; or when the
questions raised are the same as those
that have already been squarely argued
and exhaustively passed upon by the
lower court. As the Court of Appeals
reasoned, the issue before the NLRC is
both factual and legal at the same time,
involving as it does the requirements of
the property bond for the perfection of the
appeal, as well as the finding that
petitioners failed to perfect the same.
Evidently, the burden is on petitioners
seeking exception to the rule to show
sufficient justification for dispensing with
the requirement. Certiorari cannot be
resorted to as a shield from the adverse
consequences of petitioners' own omission
of the filing of the required motion for
reconsideration.
Nonetheless, even if we are to disregard
the petitioners procedural faux pas with
the Court of Appeals, and proceed to
review the propriety of the 19 May 2006

NLRC Resolution, we still arrive at the
conclusion that the NLRC did not err in
denying petitioners appeal for its failure
to file a bond in accordance with the Rules
of Procedure of the NLRC.
In cases involving a monetary award, an
employer seeking to appeal the decision
of the Labor Arbiter to the NLRC is
unconditionally required by Article 223of
the Labor Code to post a cash or surety
bond equivalent to the amount of the
monetary award adjudged. It should be
stressed that the intention of lawmakers
to make the bond an indispensable
requisite for the perfection of an appeal by
the employer is underscored by the
provision that an appeal by the employer
may be perfected only upon the posting of
a cash or surety bond. The word only
makes it perfectly clear that the
lawmakers intended the posting of a cash
or surety bond by the employer to be the
exclusive means by which an employers
appeal may be perfected. Moreover, it
bears stressing that the perfection of an
appeal in the manner and within the
period prescribed by law is not only
mandatory but jurisdictional, and failure to
conform to the rules will render the
judgment sought to be reviewed final and
unappealable.
It
cannot
be
overemphasized that the NLRC Rules, akin
to the Rules of Court, promulgated by
authority of law, have the force and effect
of law.[
As borne by the records, petitioners filed a
property bond which was conditionally
accepted by the NLRC subject to the
following conditions specified in its 24
February 2006Order:
The conditional acceptance of petitioners
property bond was subject to the
submission of the following: 1) Certified
copy of Board Resolution or a Certificate
from the Corporate Secretary of Light Rail
Transit
Authority
stating
that
the
Corporation President is authorized by a
Board Resolution to submit title as
guarantee of judgment award; 2) Certified
Copy of the Titles issued by the Registry of
Deeds of Pasay City; 3) Certified Copy of

PROCEDURE
the current tax declarations of Titles; 4)
Tax clearance from the City Treasurer of
Pasay City; 5) Appraisal report of an
accredited appraisal company attesting to
the fair market value of property within
ten (10) days from receipt of this Order.
Failure to comply therewith will result in
the dismissal of the appeal for nonperfection thereof.
36.
J.
K.
MERCADO
&
SONS
AGRICULTURAL ENTERPRISES, INC.,
vs. STO. TOMAS
FACTS: On December 3, 1993, the
Regional Tripartite Wages and Productivity
Board, Region XI, issued Wage Order No.
RTWPB-XI-03, granting a Cost of Living
Allowance (COLA) to covered workers.
On January 28, 1994, petitioner filed an
application for exemption from the
coverage of the aforesaid wage order.
Thus, however, was denied by the regional
wage board in an Order dated April 11,
1994.
Notwithstanding the said order, private
respondents were not given the benefits
due them under Wage Order No. RTWPBXI-03.
On July 10, 1998, private respondents filed
an Urgent Motion for Writ of Execution,
and Writ of Garnishment seeking the
enforcement of subject wage order against
several entities including herein petitioner.
On October 7, 1998, the OIC-Regional
Director, Region XI, issued a Writ of
Execution for the enforcement of the
Order dated April 11, 1994 of the Regional
Tripartite Wages and Productivity Board.
On November 17, 1998 and November 23,
1998, respectively, petitioner filed a
Motion to Quash the Writ of Execution and
a Supplemental Motion to the Motion to
Quash. Petitioner argued that herein
private respondents' right had already
prescribed due to their failure to move for
the execution of the April 11, 1994 Order
within the period provided under Article
291 of the Labor Code, as amended, or

within three (3) years from the finality of
the said order.
Ruling that the benefits which remained
unpaid have not prescribed and that the
private respondents need not file a claim
to be entitled thereto, the Regional
Director denied the Motion to Quash in an
Order dated January 7, 1999.
Not satisfied with the denial of its motion
to quash, petitioner filed a Notice of
Appeal on January 29, 1999.
Petitioner argued on appeal that the
Regional Director abused his discretion in
issuing the writ of execution since it was
not a party to the case. Petitioner likewise
argued that the Regional Director abused
his discretion in issuing the writ of
execution in the absence of any motion
filed by private respondents. Petitioner
likewise claimed that since more than
three (3) years have already elapsed from
the time of the finality of the order dated
April 11, 1994, the right of private
respondents to claim the benefits under
the same had already prescribed.
However, the appeal to the CA was
denied. On March 2, 2001, petitioner filed
a Motion for Reconsideration but the same
was denied for lack of merit by public
respondent in an Order dated March 14,
2002. Hence, this petition.
ISSUES: WON the claim of the private
respondents for cost of living allowance
(COLA) pursuant to Wage Order No.
RTWPB-XI-03 has already prescribed
because of the failure of the respondents
to make the appropriate claim within the
three (3) year prescriptive period provided
by Article 291 of the Labor Code, as
amended.
WON a money claim must be filed first by
private respondents against petitioner for
the latter's refusal to pay the COLA
granted under WO
RULING:
A.
NO.

PROCEDURE
Art. 291 of the Labor Code applies to
money claims in general and provides for
a 3-year prescriptive period to file them.
On the other hand, respondent employees'
money claims in this case had been
reduced to a judgment, in the form of a
Wage Order, which has become final and
executory. The prescription applicable,
therefore, is not the general one that
applies to money claims, but the specific
one applying to judgments. Thus, the right
to enforce the judgment, having been
exercised within five years, has not yet
prescribed.
Stated otherwise, a claimant has three
years to press a money claim. Once
judgment is rendered in her favor, she has
five years to ask for execution of the
judgment, counted from its finality. This is
consistent with the rule on statutory
construction that a general provision
should yield to a specific one and with the
mandate of social justice that doubts
should be resolved in favor of labor.
B.
NO.
Clearly, petitioner's contention is premised
on the mistaken belief that the right of
private respondents to recover their wage
differential or COLA under Wage Order No.
03 is still a contestable issue.
It must be emphasized that the order
dated April 11, 1994 had long become
final and executory. Petitioner did not
appeal the said order. Having failed to
avail of the remedy of appeal of the said
order, petitioner cannot belatedly avoid its
duty to comply with the said order by
insisting that a money claim must first be
filed by herein private respondents. A
contrary ruling would result to absurdity
and would even unjustly benefit petitioner
who for quite sometime had exerted every
effort to avoid the obligation of giving the
wage differential or COLA granted under
Wage Order No. 3.
37. J. Phil. Marine Inc., vs. NLRC, G.R.
No. 1753661, August 11, 2008
FACTS: Warlito E. Dumalaog (respondent),
who served as cook aboard vessels plying
overseas, filed on March 4, 2002 before
the National Labor Relations Commission
(NLRC) a pro-forma complaint1 against
petitioners manning agency J-Phil
Marine, Inc. (J-Phil), its then president

Jesus Candava, and its foreign principal
Norman Shipping Services for unpaid
money claims, moral and exemplary
damages, and attorneys fees.
Respondent thereafter filed two amended
pro forma complaints2 praying for the
award of overtime pay, vacation leave
pay, sick leave pay, and disability/medical
benefits, he having, by his claim,
contracted enlargement of the heart and
severe thyroid enlargement in the
discharge of his duties as cook which
rendered him disabled.
Respondents
total
claim
against
petitioners
was
P864,343.30
plus
P117,557.60 representing interest and
P195,928.66 representing attorneys fees.
By Decision4 of August 29, 2003, Labor
Arbiter Fe Superiaso-Cellan dismissed
respondents complaint for lack of merit.
On appeal, the NLRC, by Decision of
September 27, 2004, reversed the Labor
Arbiters
decision
and
awarded
US$50,000.00
disability
benefit
to
respondent. It dismissed respondents
other claims, however, for lack of basis or
jurisdiction.6
Petitioners
Motion
for
Reconsideration7 having been denied by
the NLRC,8 they filed a petition for
certiorari9 before the Court of Appeals.
By Resolution10 of September 22, 2005,
the Court of Appeals dismissed petitioners
petition for, inter alia, failure to attach to
the petition all material documents, and
for defective verification and certification.
Petitioners Motion for Reconsideration of
the appellate courts Resolution was
denied;11 hence, they filed the present
Petition for Review on Certiorari.
During the pendency of the case before
this Court, respondent, against the advice
of his counsel, entered into a compromise
agreement with petitioners. He thereupon
signed a Quitclaim and Release subscribed
and sworn to before the Labor Arbiter.
ISSUE: WON the compromise agreement
is valid even without the intervention of
the counsel.

PROCEDURE
HELD: Yes. The compromise agreement is
valid even without the intervention of the
counsel.
Article 227 of the Labor Code provides:
Any compromise settlement, including
those involving labor standard laws,
voluntarily agreed upon by the parties
with the assistance of the Department of
Labor, shall be final and binding upon the
parties. The National Labor Relations
Commission or any court shall not assume
jurisdiction over issues involved therein
except in case of non-compliance thereof
or if there is prima facie evidence that the
settlement was obtained through fraud,
misrepresentation, or coercion.
That a client has undoubtedly the right to
compromise
a
suit
without
the
intervention of his lawyer24 cannot be
gainsaid, the only qualification being that
if such compromise is entered into with
the intent of defrauding the lawyer of the
fees justly due him, the compromise must
be subject to the said fees.25 In the case
at bar, there is no showing that
respondent intended to defraud his
counsel of his fees. In fact, the Quitclaim
and Release, the execution of which was
witnessed by petitioner J-Phils president
Eulalio C. Candava and one Antonio C.
Casim, notes that the 20% attorneys fees
would be "paid 12 April 2007 P90,000."
38.
Sy vs. ALC Industries, G.R. No.
168339, October 10, 2008
FACTS:
Petitioner was hired by
respondent corporation ALCII as a
supervisor in its purchasing office. She
was thereafter assigned to ALCII's
construction project in Davao City as
business manager and supervisor of the
Administrative
Division.
Her
Davao
assignment was from May 1997 to April
15, 1999.
Petitioner
alleged
that
respondents
refused to pay her salary beginning
August 1998 and allowances beginning
June 1998, despite her almost weekly
verbal
follow-up.
Petitioner filed a
complaint before the labor arbiter for
unpaid salaries and allowances. Despite
several notices and warnings, respondents

did not file a position paper to controvert
petitioner's
claims.
The
case
was
submitted for resolution based solely on
petitioner's allegations and evidence.
In his June 30, 2000 decision, the labor
arbiter ordered ALCII and/or Dexter
Ceriales to pay petitioner P282,560
representing her unpaid salary and
allowance.
Respondents filed an appeal with motion
for reduction of bond in the National Labor
Relations Commission (NLRC) without
posting any cash or surety bond. In a
resolution dated September 6, 2001, the
NLRC dismissed respondents' appeal. It
ruled that respondents failed to adduce
substantial evidence to support their
arguments of non-liability. Moreover, it
found no justifiable reason to grant a
reduction in the required bond.
Respondents were able to file a motion for
reconsideration on time, accompanied by
a joint undertaking/declaration in lieu of
the cash or surety bond. Nevertheless,
respondents' motion for reconsideration
was denied.
On August 2, 2002, respondents filed a
motion for clarification but this was
likewise denied. Respondents questioned
the NLRC's denial of their motion for
clarification and reconsideration in the CA
via a petition for certiorari and prohibition.
In its March 30, 2005 decision, the CA set
aside the resolutions of the NLRC and the
decision of the labor arbiter and dismissed
petitioner's complaint.
ISSUE: WON the decision of the Labor
Arbiter has become final and executory.
HELD: Article 223. APPEAL. - Decisions,
awards, or orders of the Labor Arbiter are
final and executory unless appealed to the
Commission by any or both parties within
ten calendar days from receipt of such
decisions, awards, or orders. xxx.
In case of a judgment involving a
monetary award, an appeal by the
employer may be perfected only upon the

PROCEDURE
posting of a cash or surety bond issued by
a reputable bonding company duly
accredited by the Commission in the
amount equivalent to the monetary award
in the judgment appealed from. (emphasis
supplied)
Section 1, Rule VI of the Rules of
Procedure of the NLRC, as amended,
likewise provides that the appeal must be
filed within ten days from receipt of the
decision, resolution or order of the labor
arbiter. Moreover, Section 6 of the same
rules provides that an appeal by the
employer may be perfected only upon the
posting of a cash or surety bond. As the
right to appeal is merely a statutory
privilege, it must be exercised only in the
manner and in accordance with the
provisions of the law. Otherwise, the right
to appeal is lost.
In a long line of cases, we have ruled that
the payment of the appeal bond is a
jurisdictional requisite for the perfection of
an appeal to the NLRC. The lawmakers
intended to make the posting of a cash or
surety bond by the employer the exclusive
means by which an employer's appeal
may be perfected. The rationale for this
rule is:
The requirement that the employer post a
cash or surety bond to perfect its/his
appeal is apparently intended to assure
the workers that if they prevail in the case,
they will receive the money judgment in
their favor upon the dismissal of the
employers' appeal. It was intended to
discourage employers from using an
appeal to delay, or even evade, their
obligation to satisfy their employee's just
and lawful claims.
The explanation advanced by respondents
for their failure to pay the appeal bond
belies their claim. The NLRC found that
respondents did not pay the appeal bond
on the mistaken notion that they were not
liable for the monetary award and had
already
ceased
operations
due
to
bankruptcy. Respondents belatedly filed a
bond with their motion for reconsideration
of the NLRC's dismissal of their appeal. We
cannot
countenance
such
flagrant
disregard of established rules of procedure
on appeals.
Moreover,
the
filing
of
a
joint
undertaking/declaration, filed way beyond
the ten-day reglementary period for
perfecting an appeal and as a substitute
for the cash or surety bond, did not
operate to validate the lost appeal.
The decision of the labor arbiter therefore
became final and executory for failure of
respondents to perfect their appeal within
the reglementary period. Clearly, the CA
no longer had jurisdiction to entertain
respondents' appeal from the labor
arbiter's decision.
Respondents point out that we have
occasionally
allowed
exceptions
to
mandatory and jurisdictional requirements
in the perfection of appeals, such as
disregarding unintended lapses on the
basis of strong and compelling reasons.
This is true. However, the obvious motive
behind respondents' plea for liberality is to
thwart petitioner's claims. This we cannot
allow. Respondents' lapses were far from
unintentional.
They
were
deliberate
attempts to circumvent established rules.
Respondents' other contention that they
were deprived of due process is likewise
devoid of merit. Due process is satisfied
when the parties are afforded fair and
reasonable opportunity to explain their
respective sides of the controversy. In
Mariveles Shipyard Corp. v. CA, we held:
The requirements of due process in labor
cases before a Labor Arbiter is satisfied
when the parties are given the opportunity
to submit their position papers to which
they are supposed to attach all the
supporting documents or documentary
evidence that would prove their respective
claims, in the event that the Labor Arbiter
determines that no formal hearing would
be conducted or that such hearing was not
necessary. (emphasis supplied).
We
ruled
in
Times
Transportation
Company, Inc. v. Sotelo:
To extend the period of appeal is to
prolong the resolution of the case, a
circumstance which would give the
employer the opportunity to wear out the
energy and meager resources of the

PROCEDURE
workers to the point that they would be
constrained to give up for less than what
they deserve in law.
39.)
PCI
TRAVEL
CORPORATION,petitioner Vs NLRC
FACTS: Sometime in 1994, respondent
NUBE-AMEXPEA/PCI
Travel
Employees
Union filed a Complaint for unfair labor
practice against
petitioner PCI Travel
Corporation. It claimed that petitioner had
been filling up positions left by regular
rank-and-file with contractual employees,
but were performing work which were
usually necessary and desirable in the
usual business or trade of the petitioner.
Respondent prayed that the Labor Arbiter
order
the
petitioner
to
pay
the
contractual employees the differentials
between the wages/benefits of regular
employees and the actual wages/benefits
paid to them from the first day of their
employment, plus moral and exemplary
damages, and attorneys fees of not less
than P300,000.00 per employee.
Petitioner moved to dismiss the complaint
on the ground that the Union was not the
real party-in-interest.
Subsequently,
petitioner manifested that while it was
ready and willing to prove that said
employees were provided by independent
legitimate contractors and that it was not
engaged in labor-only contracting in a
position paper yet to be submitted,
petitioner prayed that the Labor Arbiter
first resolve the issues raised in their
motion to dismiss.
Labor Arbiter ruled that motion to dismiss
is a prohibited pleading. Labor arbiter
decided that the petitioner is guilty of
unfair labor practices.
Petitioner filed petition for certiorari with
the Court of Appeals. However, the CA
dismissed the appeal for failure of the
petitioner to attach the necessary
documents and pleading in support for the
relief they sought. Additionally, the
verification for non-forum shopping was
signed by Companys President without
proof that he is authorized by the
corporation to sign it trough resolution.
ISSUE: WON the CA was correct in

dismissing the case based on the
aforementioned technical grounds.
HELD:
No. the Court of Appeals
erred in its decision. The case must be
remanded to the CA for resolution on the
merits.
President of the corporation can sign the
verification and certification without need
of a board resolution, there thus exists a
compelling reason for the reinstatement
of the
petition before the Court of
Appeals. A perusal of the petition for
certiorari would reveal that petitioner
intended to show the grave abuse of
discretion committed by the labor
tribunals in not allowing the petitioner the
ample opportunity to submit its position
paper on the alleged violation of the CBA.
The Labor Arbiter and the NLRC viewed it
as a waiver on its part and hastened to
rule that since the complainants
allegations remain unrebutted, they are
deemed correct and valid. Due process
dictates that a person should be given the
opportunity to be heard. Unfortunately,
this was not accorded to the petitioner
and such right was even foreclosed when
the appellate court dismissed the petition
before it on technical grounds. The policy
of our judicial system is to encourage full
adjudication of the merits of an appeal.
Ends of justice are better served when
both parties are heard and the controversy
decided on its merits.
Thus, in the
exercise of its equity jurisdiction, the Court
will not hesitate to reverse the dismissal of
appeals that are grounded merely on
technicalities.
40. Lolita Lopez et al. vs. Quezon City
Sports Club, Inc.
FACTS: In this case, there are two actions.
First, the one initiated by the labor
organization and the other initiated by the
employer. In the first case, the Kasapiang
Manggagawa sa Quezon City Sports Club
(union) claims that it is a registered
independent labor organization and the
incumbent collective bargaining agent of
Quezon City Sports Club (QCSC). They
filed a complaint for unfair labor practice
against QCSC on 12 November 1997.

PROCEDURE
The Union averred that it was ordered to
submit a new information sheet.
It
immediately wrote a letter addressed to
the general manager, Angel Sadang, to
inquire about the information sheet, only
to be insulted by the latter. The members
of the union were not paid their salaries on
30 June 1997. A QCSC board member,
Antonio Chua allegedly harassed one of
the employees and told him not to join the
strike and even promised a promotion. On
4 July 1997, the union wrote a letter to the
management for the release of the
members salaries for the period 16-30
June 1997, implementation of Wage Order
No. 5, and granting of wage increases
mandated by the Collective Bargaining
Agreement (CBA). When its letter went
unanswered, the union filed a notice of
strike on 10 July 1997 for violation of
Article 248 (a)(c)(e) of the Labor Code,
nonpayment of overtime pay, refusal to
hear its grievances, and malicious refusal
to comply with the economic provisions of
the CBA. After conducting a strike vote, it
staged a strike on 12 August 1997. On 16
August 1997, the QCSC placed some of its
employees under temporary lay-off status
due to redundancy.
The second case: It appears that on 22
December 1997, QCSC also filed a petition
for cancellation of registration against the
union and to declare the unions strike on
August 12, 1997 as illegal. This action by
QCSC is docketed as NLRC CASE NO. 0009-0663-97. The Labor Arbiter Ernesto
Dinopol declared the strike of the union
illegal in its decision dated October 9,
1998 (Dinopol decision). The dispositive
reads:
WHEREFORE, in view of the Unions having
violated the no-strike-no-lockout provision
of the Collective Bargaining Agreement,
the strike it staged on August 12, 1998 is
hereby declared illegal and consequently,
pursuant to Article 264 of the Labor Code,
the
individual
respondents,
namely:
RONILO C. LEE, EDUARDO V. SANTIA,
CECILLE C. PANGAN, ROMEO M. MORGA,
GENARO C. BANDO AND ALEX J.
SANTIAGO, who admitted in paragraph 1
of their position paper that they are
officers/members of the complaining
Union are hereby declared to have lost

their employment status.
Back to the first case, the Labor Arbiter
(Joel Lustria) found QCSC guilty of unfair
labor practice. QCSC appealed from the
labor arbiters decision. It also filed a
motion for reduction of the appeal bond to
P4,000,000.00.
The NLRC ordered the
posting of an additional P6,000,000.00).
QCSC filed a supplement to its appeal,
citing the Dinopol decision.
Meanwhile, the National Labor Relations
Commission (NLRC) rendered a decision
granting the appeal and reversing the
Lustria decision. The NLRC said that the
Dinopol Decision in the illegal strike case
must prevail over the Lustria Decision
because of the established doctrine of
primacy and finality of decision. In the
illegal strike case, Ronilo Lee, Eduardo
Santia, Cecille Pangan, Romeo Morga,
Genaro Bando and Alex Santiago lost or
forfeited their employment on the day the
illegal strike was staged. The NLRC said
that the forfeiture of their employment
status carries with it the extinction of their
right to demand for and be entitled to the
economic benefits accorded to them by
law and the existing CBA.
The other complainants (petitioners)
meanwhile
filed
a
motion
for
reconsideration, which was denied by the
NLRC. They filed a petition for certiorari
under Rule 65 before the Court of Appeals
but was denied.
Issues:
1.
Do the simultaneous filing of the
motion to reduce the appeal bond and
posting of the reduced amount of bond
within the reglementary period for appeal
constitute substantial compliance with
Article 223 of the Labor Code?
2. Whether the NLRC erred in declaring
them to have lost their employment
contrary to the Dinopol decision which
only affected a few of the employees who
were union members.
Ruling:
First issue:
Under the Rules, appeals involving
monetary awards are perfected only upon

PROCEDURE
compliance with the following mandatory
requisites, namely: (1) payment of the
appeal fees; (2) filing of the memorandum
of appeal; and (3) payment of the required
cash or surety bond.
Thus, the posting of a bond is
indispensable to the perfection of an
appeal in cases involving monetary
awards from the decision of the labor
arbiter. The filing of the bond is not only
mandatory but also a jurisdictional
requirement that must be complied with in
order to confer jurisdiction upon the NLRC.
Non-compliance with the requirement
renders the decision of the labor arbiter
final and executory. This requirement is
intended to assure the workers that if they
prevail in the case, they will receive the
money judgment in their favor upon the
dismissal of the employers appeal. It is
intended to discourage employers from
using an appeal to delay or evade their
obligation to satisfy their employees just
and lawful claims.
However, Section 6 of the New Rules of
Procedure of the NLRC also mandates,
among others, that no motion to reduce
bond shall be entertained except on
meritorious grounds and upon the posting
of a bond in a reasonable amount in
relation to the monetary award. Hence,
the NLRC has the full discretion to grant or
deny the motion to reduce the amount of
the appeal bond.
In the case of Nicol v. Footjoy Industrial
Corporation
ruled
that
the
bond
requirement
on
appeals
involving
monetary awards had been and could be
relaxed in meritorious cases such as: (1)
there was substantial compliance with the
Rules; (2) the surrounding facts and
circumstances
constitute
meritorious
grounds to reduce the bond; (3) a liberal
interpretation of the requirement of an
appeal bond would serve the desired
objective of resolving controversies on the
merits; or (4) the appellants, at the very
least, exhibited their willingness and/or
good faith by posting a partial bond during
the reglementary period. Applying these
jurisprudential guidelines, we find and
hold that the NLRC did not err in reducing
the amount of the appeal bond and
considering the appeal as having been
filed within the reglementary period.
The
posting
of
the
amount
of
P4,000,000.00 simultaneously with the
filing of the motion to reduce the bond to
that amount, as well as the filing of the
memorandum of appeal, all within the
reglementary period, altogether constitute
substantial compliance with the Rules.
Second issue:
We rule in favor of petitioners.
The assailed Dinopol decision involves a
complaint for illegal strike filed by QCSC
on the ground of a no-strike no lockout
provision in the CBA. The challenged
decision was rendered in accordance with
law and is supported by factual evidence
on record. In the notice of strike, the
union did not state in particular the acts,
which allegedly constitute unfair labor
practice. Moreover, by virtue of the nostrike no lockout provision in the CBA, the
union was prohibited from staging an
economic strike, i.e., to force wage or
other concessions from the employer,
which he is not required by law to grant.
However, it should be noted that while the
strike declared by the union was held
illegal, only the union officers were
declared as having lost their employment
status. In effect, there was a ruling only
with respect to some union members
while the status of all others had remained
disputed.
There is no conflict between the Dinopol
and the Lustria decisions. While both
rulings involve the same parties and same
issues, there is a distinction between the
remedies sought by the parties in these
two cases. In the Dinopol decision, it was
QCSC which filed a petition to declare the
illegality of the 12 August 1997 strike by
the union. The consequence of the
declaration of an illegal strike is
termination from employment, which the
Labor Arbiter did so rule in said case.
However, not all union members were
terminated. In fact, only a few union
officers
were
validly
dismissed
in
accordance with Article 264 of the Labor
Code (the six named). Corollarily, the
other union members who had merely
participated in the strike but had not
committed any illegal acts were not
dismissed from employment. Hence, the
NLRC erred in declaring the employment
status of all employees as having been

PROCEDURE
lost or forfeited by virtue of the Dinopol
decision.
On the other hand, the Lustria decision
involved the unfair labor practices alleged
by the union with particularity. In said
case, Labor Arbiter Lustria sided with the
Union and found QCSC guilty of such
practices. As a consequence, the affected
employees were granted backwages and
separation pay. The grant of backwages
and separation pay however was not
premised on the declaration of the
illegality of the strike but on the finding
that these affected employees were
constructively dismissed from work, as
evidenced by the layoffs effected by the
company.
Therefore, with respect to petitioners and
union officers Alex J. Santiago, Ma. Cecilia
Pangan, Ronilo E. Lee, and Genaro Bando,
who apparently had been substituted by
present petitioner Teresita Bando, the
Dinopol decision declaring them as having
lost their employment status still stands.
To recapitulate, the NLRC erred in setting
aside the Lustria decision, as well as in
deleting the award of backwages and
separation pay, despite the finding that
the
affected
employees
had
been
constructively dismissed.
Based on the foregoing, the Lustria
decision should be upheld and therefore
reinstated except as regards the four
petitioners.
41. Lockheed Detective & Watchman
Agency vs UP G.R. No. 185918, April 18,
2012
Facts: Petitioner entered into a contract for
security services with respondent. An
NLRC
Decision
holding
respondent
solidarily liable with petitioner to security
guards for P12,142,522.69 became final
and executory.
A writ of execution was issued by the
Labor Arbiter, which was later on quashed
upon motion by respondent. The quashal
was reversed by the NLRC. Upon
reconsideration, the NLRC reconsidered
and modified that the satisfaction of the
award will be only against the funds of
respondent which are not identified as
public funds. The NRLCs order and
resolution having become final, an alias
writ of execution was issued. A notice of
garnishment was served upon PNB
Diliman Branch. Upon learning of the

notice, respondent filed an urgent motion
to
quash
garnishment
which
was
dismissed by the Labor Arbiter. Funds from
PNB were withdrawn by the sheriff.
Respondent filed a petition for certiorari
with the Court of Appeals. The CA
dismissed the petition ruling that the
funds are not public funds but on
reconsideration, amended its decision
holding still that the funds are not public
funds but the petition is granted because
of the case of National Electrification
Administration vs Morales(NEA case) that
all money claims against the government
must be first filed with the Commission on
Audit. Petitioner moved for reconsideration
but was denied. The Amended Decision
and Resolution are now being assailed in
this petition for review on certiorari.
Issue: Whether or not the funds of
respondent were properly garnished?
Ruling: No, the funds of respondent were
not properly garnished. The Court ruled
that the CA correctly cited the NEA case.
Respondent is a juridical personality
separate
and
distinct
from
the
government and has the capacity to sue
and be sued. Thus, it cannot evade
execution, and its funds may be subject to
garnishment or levy. However, before
execution may be had, a claim for
payment of the judgment award must first
be
filed
with
COA
pursuant
to
Commonwealth Act No. 327.
42.
Portillo vs. Rudolf Lietz, Inc. et
al., G.R. No. 196539, October 10,
2012
FACTS:
Portillo
was
a
Sales
Representative of Rudolf Lietz, Inc.
pharmaceutical business. Portillo signed
an employment contract containing a
Goodwill Clause as follows:
It remains understood and you agreed
that, on the termination of your
employment by act of either you or [Lietz
Inc.], and for a period of three (3) years
thereafter, you shall not engage directly or
indirectly
as
employee,
manager,
proprietor, or solicitor for yourself or
others in a similar or competitive business
or the same character of work which you
were employed by [Lietz Inc.] to do and

PROCEDURE
perform. Should you breach this good will
clause of this Contract, you shall pay [Lietz
Inc.] as liquidated damages the amount of
100% of your gross compensation over the
last 12 months, it being agreed that this
sum is reasonable and just.
Portillo subsequently resigned from her
employment with Lietz. She demanded
from Lietz Inc. for the payment of her
remaining salaries and commissions,
which were not paid to her upon such
resignation. Later, and within the 3-year
prohibitory period, Lietz learned that
Portillo was hired by Ed Keller Philippine as
head of its Pharma Raw Material
Department. Ed Keller is direct competitor
of Lietz.
As Portillos demand for remaining salaries
and commissions from Lietz still went
unheeded, she filed a complaint with the
NLRC for non-payment of 1 months
salary, 2 months commission, 13th month
pay, plus moral, exemplary and actual
damages and attorneys fees.
In its position paper, Lietz admitted
liability for Portillos money claims.
However, Lietz raised the defense of legal
compensation: Portillos money claims
should be offset against her liability to
Lietz for liquidated damages for Portillos
breach of the Goodwill Clause in the
employment contract when she became
employed with Ed Keller.
The difference in the nature of the credits

that
one
has
against
the
other,
conversely, the nature of the debt one
owes another, which difference in turn
results in the difference of the forum
where the different credits can be
enforced, prevents the application of
compensation. The labor tribunal does not
have jurisdiction over the civil case of
breach of contract.
Issue:
Should the claims of Portillo against Lietz
for unpaid wages, commissions, etc. be
offset against her liability to Lietz for
damages from breach of the Goodwill
Clause in the contract?
Respondent claimed that petitioners failed

to give her an assignment for more than
nine months, amounting to constructive
dismissal, and this compelled her to file
the complaint for illegal dismissal.
Ruling:
No, it should not be offset.
While Portillos claim for unpaid salaries is
a money claim that arises out of or in
connection with an employer-employee
relationship, Lietz claim against Portillo
for violation of the goodwill clause is a
money claim based on an act done after
the
cessation
of
the
employment
relationship. And, while the jurisdiction
over Portillos claim is vested in the labor
arbiter, the jurisdiction over Lietz Inc.s
claim rests on the regular courts.
43. Building Care Corp. vs. Macaraeg,

G.R. No. 198357, December 10, 2012
FACTS: Petitioners are in the business of
providing security services to their clients.
They hired respondent as a security guard
beginning August 25, 1996, assigning her
at Genato Building in Caloocan City.
However, on March 9, 2008, respondent
was relieved of her post. She was reassigned to Bayview Park Hotel from
March 9-13, 2008, but after said period,
she was allegedly no longer given any
assignment. Thus, on September 9, 2008,
respondent filed a complaint against
petitioners
for
illegal
dismissal,
underpayment of salaries, non-payment of
separation pay and refund of cash bond.
Conciliation and mediation proceedings
failed, so the parties were ordered to
submit their respective position papers.
On the other hand, petitioners that

respondent was relieved from her post as
requested by the client because of her
habitual tardiness, persistent borrowing of
money from employees and tenants of the
client,
and
sleeping
on
the
job.
Respondent filed a complaint for illegal
dismissal with the Labor Arbiter.
The Labor Arbiter (LA) in favor of
petitioners, holding that the dismissal of
Macaraeg was valid, but ordered the
former to pay a certain sum as financial
assistance. The Appeal which respondent
filed with the NLRC was for having been

PROCEDURE
filed out of time. Hence, NLRC declared
that the LA's Decision had become final
and executory on June 16, 2009.
Respondent elevated the case to the CA
via a petition for certiorari. The CA
reversed and set aside the decision of
NLRC and declared Macaraeg to have
been illegally dismissed. Petitioners were
ordered to reinstate petitioner without loss
of seniority rights, benefits and privileges;
and to pay her backwages and other
monetary benefits during the period of her
illegal
dismissal
up
to
actual
reinstatement. Petitioners' motion for
reconsideration was denied. Hence, the
present petition.
ISSUE: Whether the CA erred in liberally
applying the rules of procedure and ruling
that respondent's appeal should be
allowed and resolved on the merits
despite having been filed out of time.
RULING: The Court cannot sustain the
CA's Decision. It should be emphasized
that the resort to a liberal application, or
suspension
of
the
application
of
procedural rules, must remain as the
exception to the well-settled principle that
rules must be complied with for the
orderly administration of justice. In
Marohomsalic v. Cole, the Court stated:
While procedural rules may be relaxed in
the interest of justice, it is well-settled that
these are tools designed to facilitate the
adjudication of cases. The relaxation of
procedural rules in the interest of justice
was never intended to be a license for
erring litigants to violate the rules with
impunity. Liberality in the interpretation
and application of the rules can be
invoked only in proper cases and under
justifiable causes and circumstances.
While litigation is not a game of
technicalities, every case must be
prosecuted in accordance with the
prescribed procedure to ensure an orderly
and speedy administration of justice.
The later case of Daikoku Electronics
Phils., Inc. v. Raza, further explained that:
To be sure, the relaxation of procedural
rules cannot be made without any valid
reasons proffered for or underpinning it. To

merit liberality, petitioner must show
reasonable cause justifying its noncompliance with the rules and must
convince the Court that the outright
dismissal of the petition would defeat the
administration of substantial justice. x x x
The desired leniency cannot be accorded
absent valid and compelling reasons for
such a procedural lapse. x x x
In this case, the justifications given by the
CA for its liberality by choosing to overlook
the belated filing of the appeal are, the
importance of the issue raised, i.e.,
whether
respondent
was
illegally
dismissed; and the belief that respondent
should
be
"afforded
the
amplest
opportunity for the proper and just
determination of his cause, free from the
constraints of technicalities," considering
that the belated filing of respondent's
appeal before the NLRC was the fault of
respondent's
former
counsel.
Note,
however, that neither respondent nor her
former counsel gave any explanation or
reason citing extraordinary circumstances
for her lawyer's failure to abide by the
rules for filing an appeal. Respondent
merely insisted that she had not been
remiss in following up her case with said
lawyer. It is, however, an oft-repeated
ruling that the negligence and mistakes of
counsel bind the client. A departure from
this rule would bring about never-ending
suits, so long as lawyers could allege their
own fault or negligence to support the
clients case and obtain remedies and
reliefs already lost by the operation of law.
It should also be borne in mind that the
right of the winning party to enjoy the
finality of the resolution of the case is also
an essential part of public policy and the
orderly administration of justice. Hence,
such right is just as weighty or equally
important as the right of the losing party
to appeal or seek reconsideration within
the prescribed period.
When the Labor Arbiter's Decision became
final, petitioners attained a vested right to
said judgment.

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LABOR STANDARDS | 2011 NLRC RULES OF

Between the Republic of the Philippines

LABOR STANDARDS | 2011 NLRC RULES OF

"The intention of the lawmakers to make

LABOR STANDARDS | 2011 NLRC RULES OF

When Amelitas mother died in January

LABOR STANDARDS | 2011 NLRC RULES OF

case is the sole issue of the date of

LABOR STANDARDS | 2011 NLRC RULES OF

FACTS: Hanjin is a construction company

complainants had voluntarily resigned; 14

LABOR STANDARDS | 2011 NLRC RULES OF

substantial evidence on record to sustain

LABOR STANDARDS | 2011 NLRC RULES OF

contract and was threatened to be

LABOR STANDARDS | 2011 NLRC RULES OF

judgment rendered in accordance with a

LABOR STANDARDS | 2011 NLRC RULES OF

such, it was but natural for them to accept

LABOR STANDARDS | 2011 NLRC RULES OF

allowed to participate in the management

31. DOLE Philippines, Inc. vs. Medel

LABOR STANDARDS | 2011 NLRC RULES OF

establishment. In 1993, when CAMPCO

LABOR STANDARDS | 2011 NLRC RULES OF

LABOR STANDARDS | 2011 NLRC RULES OF

The case originated from a complaint for

LABOR STANDARDS | 2011 NLRC RULES OF

Lebatique was illegally dismissed

34.LETRAN CALAMBA FACULTY and

As to the petitioners claims that

Lebatique is not a field personnel

The definition of a "field personnel" is not

Prior to the filing of the above-mentioned

LABOR STANDARDS | 2011 NLRC RULES OF

or basic salary, because it is being paid for

RULING: On the first issue

35. Metro Transit Organization vs.

In petitions for review on certiorari like the

On the second issue

The striking PIGLAS members refused to

In the same manner that payment for

Resultantly, respondents filed with the

LABOR STANDARDS | 2011 NLRC RULES OF

review the propriety of the 19 May 2006

LABOR STANDARDS | 2011 NLRC RULES OF

291 of the Labor Code, as amended, or

LABOR STANDARDS | 2011 NLRC RULES OF

Marine, Inc. (J-Phil), its then president

LABOR STANDARDS | 2011 NLRC RULES OF

several notices and warnings, respondents

LABOR STANDARDS | 2011 NLRC RULES OF

LABOR STANDARDS | 2011 NLRC RULES OF

ISSUE: WON the CA was correct in

LABOR STANDARDS | 2011 NLRC RULES OF

Union are hereby declared to have lost

LABOR STANDARDS | 2011 NLRC RULES OF

LABOR STANDARDS | 2011 NLRC RULES OF

Diliman Branch. Upon learning of the

LABOR STANDARDS | 2011 NLRC RULES OF

The difference in the nature of the credits

Respondent claimed that petitioners failed

43. Building Care Corp. vs. Macaraeg,