I.
The Applicable Laws
Maternity Childrens Hospital vs. Secretary
of Labor
Facts:
Petitioner is a semi-government hospital,
managed by the Board of Directors of the
Cagayan deOro Women's Club and
Puericulture Center, headed by Mrs. Antera
Dorado, as holdover President. The hospital
derives its finances from the club itself as well
as from paying patients,averaging 130 per
month. It is also partly subsidized by the
Philippine Charity SweepstakesOffice and the
Cagayan De Oro City government.Petitioner
has forty-one (41) employees. Aside from
salary and living allowances, theemployees are
given food, but the amount spent therefor is
deducted from their respectivesalariesOn May
23, 1986, ten (10) employees of the petitioner
employed in different capacities/positionsfiled
a complaint with the Office of the Regional
Director of Labor and Employment, Region
X,for underpayment of their salaries and
ECOLAS, which was docketed as ROX Case
No. CW-71-86.On June 16, 1986, the Regional
Director directed two of his Labor Standard
and WelfareOfficers to inspect the records of
the petitioner to ascertain the truth of the
allegations in thecomplaints. Based on their
inspection report and recommendation, the
Regional Director issuedan Order dated
August 4, 1986, directing the payment of
P723,888.58, representingunderpayment of
wages and ECOLAs to all the petitioner's
employees.Petitioner appealed from this Order
to the Minister of Labor and Employment,
Hon. Augusto S.Sanchez, who rendered a
Decision on September 24, 1986, modifying
the said Order in thatdeficiency wages and
ECOLAs should be computed only from May
23, 1983 to May 23, 1986,On October 24,
1986, the petitioner filed a motion for
reconsideration which was denied by
theSecretary of Labor in his Order dated May
13, 1987, for lack of merit.
Issue:
Whether or not the Regional Director had
jurisdiction over the case and if so, the extent
of coverage of any award that should be
forthcoming, arising from his visitorial and
enforcementpowers under Article 128 of the
Labor Code.
Held:
This is a labor standards case, and is
governed by Art. 128-b of the Labor Code, as
amendedby E.O. No. 111. Under the present
rules, a Regional Director exercises
both visitorial andenforcement power over
labor standards cases, and is therefore
empowered to adjudicatemoney claims,
provided there still exists an employer-
employee relationship, and the findings of the
regional office is not contested by the
employer concerned.
1
Labor standards refer to the minimum
requirements prescribed by existing laws,
rules, andregulations relating to wages, hours
of work, cost of living allowance and other
monetary andwelfare benefits, including
occupational, safety, and health standards
(Section 7, Rule I, Ruleson the Disposition of
Labor Standards Cases in the Regional Office,
dated September 16,1987).
Decision:
ACCORDINGLY, this petition should be
dismissed, as it is hereby DISMISSED, as
regards allpersons still employed in the
Hospital at the time of the filing of the
complaint, but GRANTED asregards those
employees no longer employed at that time.
SO ORDERED.
Fernan, C.J., Narvasa, Gutierrez, Jr., Cruz, Paras,
Feliciano, Gancayco, Padilla, Bidin, Cortes,Grio-
Aquino and Regalado, JJ., concur
P.I. Manufacturing Inc. vs
P.I.Manufacturing Supervisors and Forman
Association
FACTS:
P.I. Manufacturing, Incorporated (petitioner) is
a domestic corporation engaged in the
manufacture and sale of household
appliances. On the other hand, respondent
P.I. Manufacturing Supervisors and Foremen
Association (PIMASUFA) is an organization of
petitioner's supervisors and foremen, joined in
this case by its federation, the National Labor
Union (NLU). On December 10, 1987, the
President signed into law RA No. 6640
providing, among others, an increase in the
statutory minimum wage and salary rates of
employees and workers in the private sector.
Section 2 of said Act provides: That those
already receiving above the minimum wage up
to one hundred pesos (P100.00) shall receive
an increase of ten pesos (P10.00) per day.
Thereafter, on December 18, 1987, petitioner
and respondent PIMASUFA entered into a new
Collective Bargaining Agreement (1987 CBA)
whereby the supervisors were granted an
increase of P625.00 per month and the
foremen, P475.00 per month. The increases
were made retroactive to May 12, 1987, or
prior to the passage of R.A. No. 6640, and
every year thereafter until July 26, 1989. On
January 26, 1989, respondents PIMASUFA
and NLU led a complaint with the Arbitration
Branch of the National Labor Relations
Commission (NLRC), docketed as NLRC-NCR
Case No. 00-01-00584, charging petitioner
with violation of R.A. No. 6640. The Labor
Arbiter rendered his Decision in favor of
respondents. Petitioner was ordered to give
the members of respondent PIMASUFA wage
increases equivalent to 13.5% of their basic
pay they were receiving prior to December 14,
1987. The percentage in increase given to
those who received benefits under R.A. 6640
should be the same percentage given to the
supervisors and foremen. On appeal by
petitioner, the NLRC, in its Resolution dated
January 8, 1991, affirmed the Labor Arbiter's
judgment. Undaunted, petitioner filed a
petition for certiorari with this Court.
However, we referred the petition to the Court
of Appeals. The CA rendered its Decision
affirming the Decision of the NLRC with
modification by raising the 13.5% wage
increase to 18.5%. Petitioner averred that the
CBA absolved it from any wage distortion
brought about by the implementation of the
new minimum wage law. Since the contract
was signed on December 17, 1987, or after the
effectivity of Republic Act No. 6640, petitioner
claims that private respondent is deemed to
have waived any benefit it may have under the
new law. The CA disagreed and said that the
increase resulting from any wage distortion
caused by the implementation of Republic Act
6640 is not waivable. Quoting Purefoods vs
NLRC the CA said: "Generally, quitclaims by
laborers are frowned upon as contrary to
public policy and are held to be ineffective to
bar recovery for the full measure of the
worker's rights. The reason for the rule is that
the employer and the employee do not stand
on the same footing." Moreover, Section 8 of
the Rules Implementing RA 6640 states: No
wage increase shall be credited as compliance
with the increase prescribed herein unless
expressly provided under valid individual
written/collective agreements; and provided
further that such wage increase was granted
in anticipation of the legislated wage increase
under the act. But such increases shall not
include anniversary wage increases provided
in collective bargaining agreements. Likewise,
Article 1419 of the Civil Code mandates that:
When the law sets, or authorizes the setting
of a minimum wage for laborers, and a
contract is agreed upon by which a laborer
accepts a lower wage, he shall be entitled to
recover the deficiency. Petitioner filed a
motion for reconsideration but it was denied
by the CA, thus the petition for review on
certiorari to the SC.
ISSUE(S):
(1) Whether the implementation of R.A. No.
6640 resulted in a wage distortion
(2) Whether such distortion was cured or
remedied by the 1987 CBA
HELD:
(1) YES, the implementation resulted in a
wage distortion. R.A. No. 6727, otherwise
known as the Wage Rationalization Act,
explicitly defines "wage distortion" as: a
situation where an increase in prescribed
wage rates results in the elimination or severe
contraction of intentional quantitative
differences in wage or salary rates between
and among employee groups in an
establishment as to effectively obliterate the
distinctions embodied in such wage structure
based on skills, length of service, or other
logical bases of differentiation. Otherwise
stated, wage distortion means the
disappearance or virtual disappearance of pay
differentials between lower and higher
positions in an enterprise because of
compliance with a wage order. The
implementation of R.A. No. 6640 resulted in
the increase of P10.00 in the wage rates of the
lowest paid supervisor and foremen. As a
consequence, their increased wage rates
exceeded that of previously higher paid
supervisors. The gaps or differences between
and among the wage rates of all the above
employees have been substantially altered and
reduced. It is therefore undeniable that the
increase in the wage rates by virtue of R.A. No.
6640 resulted in wage distortion. (2) YES, it
was cured. The 1987 CBA increased the
monthly salaries of the supervisors by
P625.00 and the foremen, by P475.00,
effective May 12, 1987. These increases re-
established and broadened the gap, not only
between the supervisors and the foremen, but
also between them and the rank-and-le
employees. Significantly, the 1987 CBA wage
increases almost doubled that of the P10.00
increase under R.A. No. 6640. Clearly, the gap
between the wage rates of the supervisors and
those of the foremen was inevitably re-
established. It continued to broaden through
the years. Interestingly, such gap as re-
established by virtue of the CBA is more than
a substantial compliance with R.A. No. 6640
Under RA 6640, only those receiving wages
P100.00 and below are entitled to the P10.00
wage increase. The apparent intention of the
law is only to upgrade the salaries or wages of
the employees specified therein. Almost all of
the members of respondent PIMASUFA have
been receiving wage rates above P100.00 and,
therefore, not entitled to the P10.00 increase.
To compel employers simply to add on
legislative increases in salaries or allowances
without regard to what is already being paid,
would be to penalize employers who grant
their workers more than the statutory
prescribed minimum rates of increases.
Clearly, this would be counter-productive so
far as securing the interests of labor is
concerned
Philippine Association of Service
Expporters, Inc. vs. Drilon
Facts:
The petitioner, Philippine Association of
Service Exporters, Inc. (PASEI), a firm
"engaged principally in the recruitment of
Filipino workers for overseas placement,"
challenges the Constitutional validity of
Department Order No. 1, Series of 1988, of the
Department of Labor and Employment, in the
character of "GUIDELINES GOVERNING THE
TEMPORARY SUSPENSION OF DEPLOYMENT
OF FILIPINO DOMESTIC AND HOUSEHOLD
WORKERS," and specifically assailed for
"discrimination against males or females;" 2
that it "does not apply to all Filipino workers
but only to domestic helpers and females with
similar skills;" 3 and that it is violative of the
right to travel. It is held likewise to be an
invalid exercise of the lawmaking power, police
power being legislative, and not executive, in
character. On May 25, 1988, the Solicitor
General, on behalf of the respondents
Secretary of Labor and Administrator of the
Philippine Overseas Employment
Administration, filed a Comment informing the
Court that on March 8, 1988, the respondent
Labor Secretary lifted the deployment ban in
the states of Iraq, Jordan, Qatar, Canada,
Hongkong, United States, Italy, Norway,
Austria, and Switzerland. In submitting the
validity of the challenged "guidelines," the
Solicitor General invokes the police power of
the Philippine State.
Issue:
Whether the challenged Department Order is a
valid regulation in the nature of a police power
measure under the Constitution.
Held:
The concept of police power is well-established
in this jurisdiction. It has been defined as the
"state authority to enact legislation that may
interfere with personal liberty or property in
order to promote the general welfare." 5 As
defined, it consists of (1) an imposition of
restraint upon liberty or property, (2) in order
to foster the common good. It is not capable of
an exact definition but has been, purposely,
veiled in general terms to underscore its all-
comprehensive embrace. Its scope, ever-
expanding to meet the exigencies of the times,
even to anticipate the future where it could be
done, provides enough room for an efficient
and flexible response to conditions and
circumstances thus assuring the greatest
benefits. It finds no specific Constitutional
grant for the plain reason that it does not owe
its origin to the Charter. Along with the taxing
power and eminent domain, it is inborn in the
very fact of statehood and sovereignty. It is a
fundamental attribute of government that has
enabled it to perform the most vital functions
of governance. The police power of the State ...
is a power coextensive with self- protection. It
may be said to be that inherent and plenary
power in the State which enables it to prohibit
all things hurtful to the comfort, safety, and
welfare of society. As a general rule, official
acts enjoy a presumed validity. 13 In the
absence of clear and convincing evidence to
the contrary, the presumption logically
stands. 9 The petitioner has shown no
satisfactory reason why the contested
measure should be nullified. There is no
question that Department Order No. 1 applies
only to "female contract workers," 14 but it
does not thereby make an undue
discrimination between the sexes. It is well-
settled that "equality before the law" under the
Constitution 15 does not import a perfect
Identity of rights among all men and women.
"Protection to labor" does not signify the
promotion of employment alone. What
concerns the Constitution more paramountly
is that such an employment be above all,
decent, just, and humane. Under these
circumstances, the Government is duty-bound
to insure that our toiling expatriates have
adequate protection, personally and
economically, while away from home. In this
case, the Government has evidence, an
evidence the petitioner cannot seriously
dispute, of the lack or inadequacy of such
protection, and as part of its duty, it has
precisely ordered an indefinite ban on
deployment. This Court understands the grave
implications the questioned Order has on the
business of recruitment. The concern of the
Government, however, is not necessarily to
maintain profits of business firms. In the
ordinary sequence of events, it is profits that
suffer as a result of Government regulation.
The interest of the State is to provide a decent
living to its citizens. Decision: The
Government has convinced the Court in this
case that this is its intent. We do not find the
impugned Order to be tainted with a grave
abuse of discretion to warrant the
extraordinary relief prayed for. WHEREFORE,
the petition is DISMISSED.
Sosito vs. Aguinaldo Development Corp.
Facts:
Petitioner Manuel Sosito was employed in
1964 by the private respondent, a logging
company, and was in charge of logging
importation, with a monthly salary of P675.00,
1 when he went on indefinite leave with the
consent of the company on January 16, 1976.
On July 20, 1976, the private respondent,
through its president, announced a measure deserves commendation and support
retrenchment program and offered separation
pay to employees in the active service as of
June 30, 1976, who would tender their
resignations not later than July 31, 1976. The
petitioner decided to accept this offer and so
submitted his resignation on July 29, 1976,
"to avail himself of the gratuity benefits"
promised. However, his resignation was not
acted upon and he was never given the
separation pay he expected. The petitioner
complained to the Department of Labor, where
he was sustained by the labor arbiter. The
company was ordered to pay Sosito the sum of
P 4,387.50, representing his salary for six and
a half months. On appeal to the National
Labor Relations Commission, this decision
was reversed and it was held that the
petitioner was not covered by the
retrenchment program.
Issue:
Whether or not the petitioner is covered by the
retrenchment program and thus entitled to
separation benefits.
Held:
It is clear from the memorandum that the offer
of separation pay was extended only to those
who were in the active service of the company
as of June 30, 1976. It is equally clear that
the petitioner was not eligible for the promised
gratuity as he was not actually working with
the company as of the said date. Being on
indefinite leave, he was not in the active
service of the private respondent although, if
one were to be technical, he was still in its
employ. Even so, during the period of
indefinite leave, he was not entitled to receive
any salary or to enjoy any other benefits
available to those in the active service. We
note that under the law then in force the
private respondent could have validly reduced
its work force because of its financial reverses
without the obligation to grant separation pay.
This was permitted under the original Article
272(a), of the Labor Code, which was in force
at the time. To its credit, however, the
company voluntarily offered gratuities to those
who would agree to be phased out pursuant to
the terms and conditions of its retrenchment
program, in recognition of their loyalty and to
tide them over their own financial difficulties.
The Court feels that such compassionate
but at the same time rules that it should be
available only to those who are qualified
therefore. We hold that the petitioner is not
one of them. While the Constitution is
committed to the policy of social justice and
the protection of the working class, it should
not be supposed that every labor dispute will
be automatically decided in favor of labor.
Management also has its own rights which, as
such, are entitled to respect and 19
enforcement in the interest of simple fair play.
Out of its concern for those with less privileges
in life, this Court has inclined more often than
not toward the worker and upheld his cause
in his conflicts with the employer. Such
favoritism, however, has not blinded us to the
rule that justice is in every case for the
deserving, to be dispensed in the light of the
established facts and the applicable law and
doctrine. Decision: WHEREFORE, the petition
is DISMISSED and the challenged decision
AFFIRMED,
Mendoza vs. Rural Bank of Lucban
Facts:
On April 25, 1999, the Board of Directors of
the Rural Bank of Lucban, Inc., issued Board
Resolution Nos. 99-52 and 99-53, providing
that in line with the policy of the bank to
familiarize bank employees with the various
phases of bank operations and further
strengthen the existing internal control
system, all officers and employees are subject
to reshuffle of assignments and that those
affected branch employees are reshuffled to
their new assignments without changes in
their compensation and other benefits. On
May 3, 1999, in an undated letter addressed
to Daya, the Banks Board Chairman,
petitioner Elmer Mendoza expressed his
opinion on the reshuffle alleging that "his
reshuffling is deemed to be a demotion
without any legal basis and thus asking to be
allowed to remain in his position. On May 10,
1999, Daya replied reitirating that it was
never the intention (of the management) to
downgrade his position in the bank
considering that due compensation is
maintained and no future reduction was
intended. It was further reiterated that the
conduct of reshuffle is also a prerogative of
bank management.". On June 7, 1999,
petitioner submitted to the bank's Tayabas
branch manager a letter in which he applied
for a leave of absence from work. On June 21,
1999, petitioner again submitted a letter
asking for another leave of absence for twenty
days effective on the same date. On June 24,
1999, while on his second leave of absence,
petitioner filed a Complaint before Arbitration
Branch No. IV of the National Labor Relations
Commission (NLRC). The Complaint -- for
illegal dismissal, underpayment, separation
pay and damages -- was filed against the
Rural Bank of Lucban and/or its president,
Alejo B. Daya; and its Tayabas branch
manager, Briccio V. Cada. The case was
docketed as NLRC Case SRAB-IV-6-5862-99-
Q.The labor arbiter's June 14, 2000 Decision
upheld petitioner's claims. On appeal, the
NLRC reversed the labor arbiter. In its July
18, 2001 Resolution. After the NLRC denied
his Motion for Reconsideration, petitioner
brought before the CA a Petition for Certiorari
assailing the foregoing Resolution. Finding
that no grave abuse of discretion could be
attributed to the NLRC, the CA Decision ruled
in favor of the private respondent rural bank.
Issue:
23 Whether or not the the petitioner was
constructively dismissed from employment
and that the reshuffling pursuant to Board
Res. Nos. 99-52 and 99-53 is a valid exercise
of management prerogative.
Held:
The Petition has no merit. Constructive
dismissal is defined as an involuntary
resignation resorted to when continued
employment is rendered impossible,
unreasonable or unlikely; when there is a
demotion in rank or a diminution of pay; or
when a clear discrimination, insensibility or
disdain by an employer becomes unbearable
to the employee. Jurisprudence recognizes the
exercise of management prerogatives. For this
reason, courts often decline to interfere in
legitimate business decisions of employers.
Indeed, labor laws discourage interference in
employers' judgments concerning the conduct
of their business. The law must protect not
only the welfare of employees, but also the
right of employers. In the pursuit of its
legitimate business interest, management has
the prerogative to transfer or assign employees
from one office or area of operation to another
-- provided there is no demotion in rank or
diminution of salary, benefits, and other
privileges; and the action is not motivated by
discrimination, made in bad faith, or effected
as a form of punishment or demotion without
sufficient cause. This privilege is inherent in
the right of employers to control and manage
their enterprise effectively. The right of
employees to security of tenure does not give
them vested rights to their positions to the
extent of depriving management of its
prerogative to change their assignments or to
transfer them. Managerial prerogatives,
however, are subject to limitations provided by
law, collective bargaining agreements, and
general principles of fair play and justice.
Decision: WHEREFORE, this Petition is
DENIED, and the June 14, 2002 Decision and
the September 25, 2002 Resolution of the
Court of Appeals are AFFIRMED. Costs
against petitioner. SO ORDERED. Davide, Jr.,
C.J., (Chairman), Ynares-Santiago, Carpio,
and Azcuna, JJ., concur.
China Banking Corp., vs. Borromeo
Facts:
Respondent Mariano M. Borromeo joined the
petitioner Bank on June 1, 1989 as Manager
Level 1 assigned at the latters Regional Office
in Cebu City. Subsequently, the respondent
was laterally transferred to Cagayan de Oro
City as Branch Manager of the petitioner
Banks branch thereat. For the years 1989-
1995 he was promoted from Manager Level I
to Senior Manager Level II having consistently
received a "highly satisfactory" performance
rating (1989-1990) and a "very good"
performance rating (1991-1995). Finally, in
1996, with a "highly satisfactory" performance
rating, the respondent was promoted to the
position of Assistant Vice-President, Branch
Banking Group for the Mindanao area
effective October 16, 1996. However, prior to
his last promotion and then unknown to the
petitioner Bank, the respondent, without
authority from the Executive Committee or
Board of Directors, approved several
DAUD/BP (Drawn Against Uncollected
Deposits/Bills Purchased) accommodations
amounting to P2,441,375 in favor of certain
Joel Maniwan. Such checks, which are not
sufficiently funded by cash, are generally not
honored by banks. Further, such
accommodations may be granted only by a
bank officer upon express authority from its
Executive Committee or Board of Directors.
Upon knowing of this by the bank authorities,
Samuel L. Chiong, First Vice-President and
HeadVisayas Mindanao Division of the
petitioner bank issued a memorandum
seeking clarification on issues relative thereto.
In reply, the respondent answered the queries
but nonetheless, accepted full responsibility
for committing an error in judgment, lapses in
control and abuse of discretion. However,
respondent vehemently denied benefiting
therefrom. Apology was accorded by the
respondent in relation to this and
subsequently tendered his irrevocable
resignation effective May 31, 1997. His acts
having constituted a violation of the Banks
Code of Ethics, respondent was directed to
restitute the amount of P1,507,736.79
representing 90% of the total loss of
P1,675,263.10 incurred by the petitioner
Bank. However, in view of his resignation and
considering the years of service in the
petitioner Bank, the management earmarked
only P836,637.08 from the respondents total
separation benefits or pay. The said amount
would be released upon recovery of the sums
demanded from Maniwan in a civil case.
Consequently, the respondent, through
counsel, made a demand on the petitioner
Bank for the payment of his separation pay
and other benefits but the petitioner Bank
maintained its position to withhold the sum
earmarked. Thus, the respondent filed with
the National Labor Relations Commission
(NLRC), the complaint for payment of
separation pay, mid-year bonus, profit share
and damages against the petitioner Bank. The
Labor Arbiter ruled in favor of the bank.
Respondent appealed to the NLRC but it
affirmed in toto the findings of the Labor
Arbiter. However, the CA upon petition set
aside the NLRC decision and alleged that
repondent was denied his rights to due
process. Hence, this petition. 29
Issue:
Whether the bank has the prerogative/right
to impose the withholding of respondents
benefits as what it considered the appropriate
penalty under the circumstances pursuant to
its company rules and regulations.
Held:
The petition is meritorious. The petitioner
Bank was left with no other recourse but to
impose the ancillary penalty of restitution in
view of his voluntary separation from the
petitioner Bank. It was certainly within the
petitioner Banks prerogative to impose on the
respondent what it considered the appropriate
penalty under the circumstances pursuant to
its company rules and regulations. It is well
recognized that company policies and
regulations are, unless shown to be grossly
oppressive or contrary to law, generally
binding and valid on the parties and must be
complied with until finally revised or amended
unilaterally or preferably through negotiation
or by competent authority. Moreover,
management has the prerogative to discipline
its employees and to impose appropriate
penalties on erring workers pursuant to
company rules and regulations. The petitioner
Banks business is essentially imbued with
public interest and owes great fidelity to the
public it deals with. It is expected to exercise
the highest degree of diligence in the selection
and supervision of their employees.As a
corollary, and like all other business
enterprises, its prerogative to discipline its
employees and to impose appropriate
penalties on erring workers pursuant to
company rules and regulations must be
respected. The law, in protecting the rights of
labor, authorized neither oppression nor self-
destruction of an employer company which
itself is possessed of rights that must be
entitled to recognition and respect.
Significantly, the respondent ids not wholly
deprived of his separation benefits but were
merely withheld and will be released without
delay as soon as the bank has satisfied a
judgment in the civil case. Decision:
WHEREFORE, the petition is GRANTED. The
Decision dated July 19, 2002 of the Court of
Appeals and its Resolution dated January 6,
2003 in CA-G.R. SP No. 57365 are
REVERSED AND SET ASIDE. The Resolution
dated October 20, 1999 of the NLRC, affirming
the Decision dated February 26, 1999 of the
Labor Arbiter, is REINSTATED. SO
ORDERED. Puno, Austria-Martinez, Tinga,
and Chico-Nazario* , JJ., concur.
SSS Employee Asso. v CA
Facts: The petitioners went on strike after the
SSS failed to act upon the unions demands
concerning the implementation of their CBA.
SSS filed before the court action for damages
with prayer for writ of preliminary injunction
against petitioners for staging an illegal strike.
The court issued a temporary restraining
order pending the resolution of the application
for preliminary injunction while petitioners
filed a motion to dismiss alleging the courts
lack of jurisdiction over the subject matter.
Petitioners contend that the court made
reversible error in taking cognizance on the
subject matter since the jurisdiction lies on
the DOLE or the National Labor Relations
Commission as the case involves a labor
dispute. The SSS contends on one hand that
the petitioners are covered by the Civil Service
laws, rules and regulation thus have no right
to strike. They are not covered by the NLRC or
DOLE therefore the court may enjoin the
petitioners from striking.
Issue:
Whether or not SSS employers have the right
to strike
Whether or not the CA erred in taking
jurisdiction over the subject matter.
Held:
The Constitutional provisions enshrined on
Human Rights and Social Justice provides
guarantee among workers with the right to
organize and conduct peaceful concerted
activities such as strikes. On one hand,
Section 14 of E.O No. 180 provides that the
Civil Service law and rules governing
concerted activities and strikes in the
government service shall be observed,
subject to any legislation that may be enacted
by Congress referring to Memorandum
Circular No. 6, s. 1987 of the Civil Service
Commission which states that prior to the
enactment by Congress of applicable laws
concerning strike by government employees
enjoins under pain of administrative
sanctions, all government officers and
employees from staging strikes,
demonstrations, mass leaves, walk-outs and
other forms of mass action which will result in
temporary stoppage or disruption of public
service. Therefore in the absence of any
legislation allowing govt. employees to strike
they are prohibited from doing so.
In Sec. 1 of E.O. No. 180 the employees in the
civil service are denominated as
government employees and that the SSS is
one such government-controlled corporation
with an original charter, having been created
under R.A. No. 1161, its employees are part of
the civil service and are covered by the Civil
Service Commissions memorandum
prohibiting strikes.
Neither the DOLE nor the NLRC has
jurisdiction over the subject matter but
instead it is the Public Sector Labor-
Management Council which is not granted by
law authority to issue writ of injunction in
labor disputes within its jurisdiction thus the
resort of SSS before the general court for the
issuance of a writ of injunction to enjoin the
strike is appropriate.
II. Basic Principles
Brotherhood Labor Unity Movement of the
Philippines vs. Zamora
Facts:
Petitioners have been reporting as loaders for San
Miguel Parola Glass Factory under the supervision of a
certain Camahort. Job orders for work came from
Camahort and petitioners were also supplied with tools
and other equipment for the fulfillment of their duties.
With the job orders being dependent on the volume of
production of the factory, work was not necessarily 8
hours but at times petitioners would be asked to work
more than 8 hours and at times also on Saturdays and
Sundays They were not paid for their overtime and
rendered work during Saturdays and Sundays.
Petitioners organized and held union activities to push
management to pay for their overtime and holiday
compensation as well as other grievances. Some
members were then dismissed from work due to their
membership with the union. Due to this, Petitioners
filed a notice of strike on the Bureau of Labor Relations
and a meeting was held between the parties wherein
petitioners gave proposals for recognition and collective
bargaining. San Miguel refused to bargain with
petitioners alleging that there was no employer
employee relationship. The NLRC heard the dispute and
the arbiter decided in favor of the Petitioners to receive
one year salary. Upon appeal of SMC, the Secretary
stressed upon the decision that there was no employer
employee relationship. Thus the appeal of the
petitoners.
Issue:
Whether or not the employer employee relationship
exists between the Brotherhood Labor Union
Movement and San Miguel Corporation?
Ruling:
The petition is granted. SMC was ordered to reinstate
petitioners, with three (3) years backwages. However, if
reinstatement is no longer possible, SMC is ordered to
pay separation pay equivalent to one (1) month pay for
every year of service.
Ratio: The question of whether an employer
employee relationship exists in a certain situation
continues to bedevil the courts. Some businessmen try
to avoid the bringing about of an employer employee
relationship in their enterprises because that judicial
relation spawns obligations connected with workmens
compensation, social security, medicare, termination
pay, and unionism.
Tabas, et., al, vs. California Manufacturing Company
Inc., et., al.
Facts:
On July 21, 23, and 28, 1986, the petitioners petitioned
the NLRC for reinstatement and payment of various
benefits, including minimum wage, overtime pay,
holiday pay, thirteenmonth pay, and emergency cost of
living allowance pay, against the respondent. On
October 7, 1986, after the cases had been consolidated,
the respondent filed a motion to dismiss as well as a
position paper denying the existence of an employer-
employee relation between the petitioners and the
respondents and, consequently, any liability for
payment of money claims. It appears that the
petitioners were, prior to their stint with respondents,
employees of Livi, which subsequently assigned them to
work as "promotional merchandisers" 3 for the former
firm pursuant to a manpower supply agreement. The
petitioners were made to sign employment contracts
with durations of six months, upon the expiration of
which they signed new agreements with the same
period, and so on. The petitioners now allege that they
had become regular California employees and demand,
as a consequence whereof, similar benefits. They
likewise claim that pending further proceedings below,
they were notified by California that they would not be
rehired. As a result, they filed an amended complaint
charging California with illegal dismissal. California
admits having refused to accept the petitioners back to
work but deny liability therefor for the reason that it is
not, to begin with, the petitioners' employer and that
the "retrenchment" had been forced by business losses
as well as expiration of contracts. 9
Issue:
Whether there exist an employer-employee relation
between the petitioners and the respondents based on
the manpower supply contract agreement between
repondent California and Livi.
Held:
The existence of an employer-employees relation is a
question of law and being such, it cannot be made the
subject of agreement. Hence, the fact that the
manpower supply agreement between Livi and
California had specifically designated the former as the
petitioners' employer and had absolved the latter from
any liability as an employer, will not erase either party's
obligations as an employer, if an employer-employee
relation otherwise exists between the workers and
either firm. At any rate, since the agreement was
between Livi and California, they alone are bound by it,
and the petitioners cannot be made to suffer from its
adverse consequences. This Court has consistently ruled
that the determination of whether or not there is an
employeremployee relation depends upon four
standards: 91 (1) the manner of selection and
engagement of the putative employee; (2) the mode of
payment of wages; (3) the presence or absence of a
power of dismissal; and (4) the presence or absence of a
power to control the putative employee's conduct. 14
Of the four, the right-of-control test has been held to be
the decisive factor. 15 The Court need not therefore
consider whether it is Livi or California which exercises
control over the petitioner vis-a-vis the four barometers
referred to earlier, since by fiction of law, either or both
shoulder responsibility. The records show that the
petitioners bad been given an initial six-month contract,
renewed for another six months. Accordingly, under
Article 281 of the Code, they had become regular
employees-of-California-and had acquired a secure
tenure. Hence, they cannot be separated without due
process of law.
Decision:
WHEREFORE, the petition is GRANTED. Judgment is
hereby RENDERED: (1): SETTING ASIDE the decision,
dated March 20, 1987, and the resolution, dated August
19, 1987; (2) ORDERING the respondent, the California
Manufacturing Company, to REINSTATE the petitioners
with full status and rights of regular employees; and (3)
ORDERING the respondent, the California
Manufacturing Company, and the respondents, Livi
Manpower Service, Inc. and/or Lily-Victoria Azarcon, to
PAY, jointly and severally, unto the petitioners: (a)
backwages and differential pays effective as and from
the time they had acquired a regular status under the
second paragraph, of Section 281, of the Labor Code,
but not to exceed three (3) years, and (b) all such other
and further benefits as may be provided by existing
collective bargaining agreement(s) or other relations, or
by law, beginning such time; and (4) ORDERING the
private respondents to PAY unto the petitioners
attorney's fees equivalent to ten (10%) percent of all
money claims hereby awarded, in addition to those
money claims. The private respondents are likewise
ORDERED to PAY the costs of this suit.