SUPREME COURT FIRST DIVISION
MAXIMO CALALANG, Petitioner,
-versus-
A. D. WILLIAMS, ET AL.,
Respondents.
x--------------------------------------------------x DECISION
G.R. No. 47800 December 2, 1940
Maximo Calalang, in his capacity as a private citizen and as a
taxpayer of Manila, brought before this court this petition for
a writ of prohibition against the respondents, A. D. Williams,
as Chairman of the National Traffic Commission; Vicente
Fragante, as Director of Public Works; Sergio Bayan, as
Acting Secretary of Public Works and Communications;
Eulogio Rodriguez, as Mayor of the City of Manila; and Juan
Dominguez, as Acting Chief of Police of Manila.
It is alleged in the petition that the National Traffic
Commission, in its resolution of July 17, 1940, resolved to
recommend to the Director of Public Works and to the
Secretary of Public Works and Communications that animal-
drawn vehicles be prohibited from passing along Rosario
Street extending from Plaza Calderon de la
LAUREL, J.:
Barca to Dasmariñas Street, from 7:30 a.m. to 12:30 p.m. and
from 1:30 p.m. to 5:30 p.m.; and along Rizal Avenue
extending from the railroad crossing at Antipolo Street to
Echague Street, from 7 a.m. to 11 p.m., from a period of one
year from the date of the opening of the Colgante Bridge to
traffic; that the Chairman of the National Traffic
Commission, on July 18, 1940 recommended to the Director
of Public Works the adoption of the measure proposed in the
resolution aforementioned, in pursuance of the provisions of
Commonwealth Act No. 548 which authorizes said Director
of Public Works, with the approval of the Secretary of Public
Works and Communications, to promulgate rules and
regulations to regulate and control the use of and traffic on
national roads; that on August 2, 1940, the Director of Public
Works, in his first indorsement to the Secretary of Public
Works and Communications, recommended to the latter the
approval of the recommendation made by the Chairman of
the National Traffic Commission as aforesaid, with the
modification that the closing of Rizal Avenue to traffic to
animal-drawn vehicles be limited to the portion thereof
extending from the railroad crossing at Antipolo Street to
Azcarraga Street; that on August 10, 1940, the Secretary of
Public Works and Communications, in his second
indorsement addressed to the Director of Public Works,
approved the recommendation of the latter that Rosario Street
and Rizal Avenue be closed to traffic of animal-drawn
vehicles, between the points and during the hours as above
indicated, for a period of one year from the date of the
opening of the Colgante Bridge to traffic; that the Mayor of
Manila and the Acting Chief of Police of Manila have
enforced and caused to be enforced the rules and regulations
thus adopted; that as a consequence of such enforcement, all
animal-drawn vehicles are not allowed to pass and pick up
passengers in the places above- mentioned to the detriment
not only of their owners but of the riding public as well. It is
contended by the petitioner that Commonwealth Act No. 548
by which the Director of Public Works, with the approval of
the Secretary of Public Works and Communications, is
authorized to promulgate rules and regulations for the
regulation and control of the use of and traffic on national
roads and streets is unconstitutional because it constitutes an
undue delegation of legislative power. This contention is
untenable. As was observed by this court in Rubi vs.
Provincial Board of Mindoro (39 Phil, 660, 700), “The rule
has nowhere been better stated than in the early Ohio case
decided by Judge Ranney, and since followed in a multitude
of cases, namely: ‘The true distinction therefore is between
the delegation of power to make the law, which necessarily
involves a discretion as to what it shall be, and conferring an
authority or discretion as to its execution, to be exercised
under and in pursuance of the law. The first cannot be done;
to the latter no valid objection can be made.’ (Cincinnati, W.
& Z. R. Co. vs. Comm’rs. Clinton County, 1 Ohio St., 88.)
Discretion, as held by Chief Justice Marshall in Wayman vs.
Southard (10 Wheat., 1) may be committed by the
Legislature to an executive department or official. The
Legislature may make decisions of executive departments or
subordinate officials thereof, to whom it has committed the
execution of certain acts, final on questions of fact. (U.S. vs.
Kinkead, 248 Fed., 141.) The growing tendency in the
decisions is to give prominence to the ‘necessity’ of the
case.”
Section 1 of Commonwealth Act No. 548 reads as follows:
“SECTION1. To promote safe transit upon, and avoid
obstructions on, roads and streets designated as national
roads by acts of the National Assembly or by executive
orders of the President of the Philippines, the Director of
Public Works, with the approval of the Secretary of Public
Works and Communications, shall promulgate the necessary
rules and regulations to regulate and control the use of and
traffic on such roads and streets. Such rules and regulations,
with the approval of the President, may contain provisions
controlling or regulating the construction of buildings or
other structures within a reasonable distance from along the
national roads. Such roads may be temporarily closed to any
or all classes of traffic by the Director of Public Works and
his duly authorized representatives whenever the condition of
the road or the traffic thereon makes such action necessary or
advisable in the public convenience and interest, or for a
specified period, with the approval of the Secretary of Public
Works and Communications.”
The above provisions of law do not confer legislative power
upon the Director of Public Works and the Secretary of
Public Works and Communications. The authority therein
conferred upon them and
under which they promulgated the rules and regulations now
complained of is not to determine what public policy
demands but merely to carry out the legislative policy laid
down by the National Assembly in said Act, to wit, “to
promote safe transit upon and avoid obstructions on, roads
and streets designated as national roads by acts of the
National Assembly or by executive orders of the President of
the Philippines” and to close them temporarily to any or all
classes of traffic “whenever the condition of the road or the
traffic makes such action necessary or advisable in the public
convenience and interest.” The delegated power, if at all,
therefore, is not the determination of what the law shall be,
but merely the ascertainment of the facts and circumstances
upon which the application of said law is to be predicated. To
promulgate rules and regulations on the use of national roads
and to determine when and how long a national road should
be closed to traffic, in view of the condition of the road or the
traffic thereon and the requirements of public convenience
and interest, is an administrative function which cannot be
directly discharged by the National Assembly. It must depend
on the discretion of some other government official to whom
is confided the duty of determining whether the proper
occasion exists for executing the law. But it cannot be said
that the exercise of such discretion is the making of the law.
As was said in Locke’s Appeal (72 Pa. 491): “To assert that a
law is less than a law, because it is made to depend on a
future event or act, is to rob the Legislature of the power to
act wisely for the public welfare whenever a law is passed
relating to a state of affairs not yet developed, or to things
future and impossible to fully know.” The proper distinction
the court said was this: “The Legislature cannot delegate its
power to make the law; but it can make a law to delegate a
power to determine some fact or state of things upon which
the law makes, or intends to make, its own action depend. To
deny this would be to stop the wheels of government. There
are many things upon which wise and useful legislation must
depend which cannot be known to the law-making power,
and, must, therefore, be a subject of inquiry and
determination outside of the halls of legislation.” (Field vs.
Clark, 143 U. S. 649, 694; 36 L. Ed. 294.)
In the case of People vs. Rosenthal and Osmeña, G.R. Nos.
46076 and 46077, promulgated June 12, 1939, and in
Pangasinan Transportation vs. The Public Service
Commission, G.R. No. 47065, promulgated
June 26, 1940, this Court had occasion to observe that the
principle of separation of powers has been made to adapt
itself to the complexities of modern governments, giving rise
to the adoption, within certain limits, of the principle of
“subordinate legislation,” not only in the United States and
England but in practically all modern governments.
Accordingly, with the growing complexity of modern life, the
multiplication of the subjects of governmental regulations,
and the increased difficulty of administering the laws, the
rigidity of the theory of separation of governmental powers
has, to a large extent, been relaxed by permitting the
delegation of greater powers by the legislative and vesting a
larger amount of discretion in administrative and executive
officials, not only in the execution of the laws, but also in the
promulgation of certain rules and regulations calculated to
promote public interest. The petitioner further contends that
the rules and regulations promulgated by the respondents
pursuant to the provisions of Commonwealth Act No. 548
constitute an unlawful interference with legitimate business
or trade and abridge the right to personal liberty and freedom
of locomotion. Commonwealth Act No. 548 was passed by
the National Assembly in the exercise of the paramount
police power of the state. Said Act, by virtue of which the
rules and regulations complained of were promulgated, aims
to promote safe transit upon and avoid obstructions on
national roads, in the interest and convenience of the public.
In enacting said law, therefore, the National Assembly was
prompted by considerations of public convenience and
welfare. It was inspired by a desire to relieve congestion of
traffic. which is, to say the least, a menace to public safety.
Public welfare, then, lies at the bottom of the enactment of
said law, and the state in order to promote the general welfare
may interfere with personal liberty, with property, and with
business and occupations. Persons and property may be
subjected to all kinds of restraints and burdens, in order to
secure the general comfort, health, and prosperity of the state
(U.S. vs. Gomez Jesus, 31 Phil., 218). To this fundamental
aim of our Government the rights of the individual are
subordinated. Liberty is a blessing without which life is a
misery, but liberty should not be made to prevail over
authority because then society will fall into anarchy. Neither
should authority be made to prevail over liberty because then
the individual will fall into slavery. The citizen should
achieve the required balance of liberty and authority in his
mind through education and personal discipline, so that there
may be established the resultant equilibrium, which means
peace and order and happiness for all. The moment greater
authority is conferred upon the government, logically so
much is withdrawn from the residuum of liberty which
resides in the people. The paradox lies in the fact that the
apparent curtailment of liberty is precisely the very means of
insuring its preservation.
The scope of police power keeps expanding as civilization
advances. As was said in the case of Dobbins vs. Los
Angeles (195 U.S. 223, 238; 49 L. ed. 169), “the right to
exercise the police power is a continuing one, and a business
lawful today may in the future, because of the changed
situation, the growth of population or other causes, become a
menace to the public health and welfare, and be required to
yield to the public good.” And in People vs. Pomar (46 Phil.,
440), it was observed that “advancing civilization is bringing
within the police power of the state today things which were
not thought of as being within such power yesterday. The
development of civilization, the rapidly increasing
population, the growth of public opinion, with an increasing
desire on the part of the masses and of the government to
look after and care for the interests of the individuals of the
state, have brought within the police power many questions
for regulation which formerly were not so considered.”
The petitioner finally avers that the rules and regulations
complained of infringe upon the constitutional precept
regarding the promotion of social justice to insure the well-
being and economic security of all the people. The promotion
of social justice, however, is to be achieved not through a
mistaken sympathy towards any given group. Social justice is
“neither communism, nor despotism, nor atomism, nor
anarchy,” but the humanization of laws and the equalization
of social and economic forces by the State so that justice in
its rational and objectively secular conception may at least be
approximated. Social justice means the promotion of the
welfare of all the people, the adoption by the Government of
measures calculated to insure economic stability of all the
competent elements of society, through the maintenance of a
proper economic and social equilibrium in the interrelations
of the members of the community, constitutionally, through
the adoption of measures legally justifiable, or extra-
constitutionally, through the exercise of powers underlying
the existence of all governments on the time-honored
principle of salus populi est suprema lex.
Social justice, therefore, must be founded on the recognition
of the necessity of interdependence among divers and diverse
units of a society and of the protection that should be equally
and evenly extended to all groups as a combined force in our
social and economic life, consistent with the fundamental and
paramount objective of the state of promoting the health,
comfort, and quiet of all persons, and of bringing about “the
greatest good to the greatest number.”
IN VIEW OF THE FOREGOING, the Writ of Prohibition
Prayed for is hereby denied, with costs against the petitioner.
So ordered.
Avanceña, C.J., Imperial, Diaz and Horrilleno, JJ., concur.
G.R. No. 81958 June 30, 1988
PHILIPPINE ASSOCIATION OF SERVICE
EXPORTERS, INC., petitioner,
vs.
HON. FRANKLIN M. DRILON as Secretary of Labor
and Employment, and TOMAS D. ACHACOSO, as
Administrator of the Philippine Overseas Employment
Administration, respondents.
Gutierrez & Alo Law Offices for petitioner.
SARMIENTO, J.:
The petitioner, Philippine Association of Service Exporters,
Inc. (PASEI, for short), a firm "engaged principally in the
recruitment of Filipino workers, male and female, for overseas
placement," 1 challenges the Constitutional validity of
Department Order No. 1, Series of 1988, of the Department of
Labor and Employment, in the character of "GUIDELINES
GOVERNING THE TEMPORARY SUSPENSION OF
DEPLOYMENT OF FILIPINO DOMESTIC AND
HOUSEHOLD WORKERS," in this petition for certiorari and
prohibition. Specifically, the measure is assailed for
"discrimination against males or females;" 2 that it "does not
apply to all Filipino workers but only to domestic helpers and
females with similar skills;" 3 and that it is violative of the right
to travel. It is held likewise to be an invalid exercise of the
lawmaking power, police power being legislative, and not
executive, in character.
In its supplement to the petition, PASEI invokes Section 3, of
Article XIII, of the Constitution, providing for worker
participation "in policy and decision-making processes
affecting their rights and benefits as may be provided by law."
4
Department Order No. 1, it is contended, was passed in the
absence of prior consultations. It is claimed, finally, to be in
violation of the Charter's non-impairment clause, in addition
to the "great and irreparable injury" that PASEI members face
should the Order be further enforced.
On May 25, 1988, the Solicitor General, on behalf of the
respondents Secretary of Labor and Administrator of the
Philippine Overseas Employment Administration, filed a
Comment informing the Court that on March 8, 1988, the
respondent Labor Secretary lifted the deployment ban in the
states of Iraq, Jordan, Qatar, Canada, Hongkong, United
States, Italy, Norway, Austria, and Switzerland. * In
submitting the validity of the challenged "guidelines," the
Solicitor General invokes the police power of the Philippine
State.
It is admitted that Department Order No. 1 is in the nature of a
police power measure. The only question is whether or not it
is valid under the Constitution.
The concept of police power is well-established in this
jurisdiction. It has been defined as the "state authority to enact
legislation that may interfere with personal liberty or property
in order to promote the general welfare." 5 As defined, it
consists of (1) an imposition of restraint upon liberty or
property, (2) in order to foster the common good. It is not
capable of an exact definition but has been, purposely, veiled
in general terms to underscore its all-comprehensive embrace.
"Its scope, ever-expanding to meet the exigencies of the times,
even to anticipate the future where it could be done, provides
enough room for an efficient and flexible response to
conditions and circumstances thus assuring the greatest
benefits." 6
It finds no specific Constitutional grant for the plain reason
that it does not owe its origin to the Charter. Along with the
taxing power and eminent domain, it is inborn in the very fact
of statehood and sovereignty. It is a fundamental attribute of
government that has enabled it to perform the most vital
functions of governance. Marshall, to whom the expression
has been credited, 7 refers to it succinctly as the plenary power
of the State "to govern its citizens." 8
"The police power of the State ... is a power coextensive with
self- protection, and it is not inaptly termed the "law of
overwhelming necessity." It may be said to be that inherent
and plenary power in the State which enables it to prohibit all
things hurtful to the comfort, safety, and welfare of society." 9
It constitutes an implied limitation on the Bill of Rights.
According to Fernando, it is "rooted in the conception that men
in organizing the state and imposing upon its government
limitations to safeguard constitutional rights did not intend
thereby to enable an individual citizen or a group of citizens to
obstruct unreasonably the enactment of such salutary measures
calculated to ensure communal peace, safety, good order, and
welfare." 10 Significantly, the Bill of Rights itself does not
purport to be an absolute guaranty of individual rights and
liberties "Even liberty itself, the greatest of all rights, is not
unrestricted license to act according to one's will." 11 It is
subject to the far more overriding demands and requirements
of the greater number.
Notwithstanding its extensive sweep, police power is not
without its own limitations. For all its awesome consequences,
it may not be exercised arbitrarily or unreasonably. Otherwise,
and in that event, it defeats the purpose for which it is
exercised, that is, to advance the public good. Thus, when the
power is used to further private interests at the expense of the
citizenry, there is a clear misuse of the power. 12
In the light of the foregoing, the petition must be dismissed.
As a general rule, official acts enjoy a presumed vahdity. 13 In
the absence of clear and convincing evidence to the contrary,
the presumption logically stands.
The petitioner has shown no satisfactory reason why the
contested measure should be nullified. There is no question
that Department Order No. 1 applies only to "female contract
workers," 14 but it does not thereby make an undue
discrimination between the sexes. It is well-settled that
"equality before the law" under the Constitution 15 does not
import a perfect Identity of rights among all men and women.
It admits of classifications, provided that (1) such
classifications rest on substantial distinctions; (2) they are
germane to the purposes of the law; (3) they are not confined
to existing conditions; and (4) they apply equally to all
members of the same class. 16
The Court is satisfied that the classification made-the
preference for female workers — rests on substantial
distinctions.
As a matter of judicial notice, the Court is well aware of the
unhappy plight that has befallen our female labor force abroad,
especially domestic servants, amid exploitative working
conditions marked by, in not a few cases, physical and
personal abuse. The sordid tales of maltreatment suffered by
migrant Filipina workers, even rape and various forms of
torture, confirmed by testimonies of returning workers, are
compelling motives for urgent Government action. As
precisely the caretaker of Constitutional rights, the Court is
called upon to protect victims of exploitation. In fulfilling that
duty, the Court sustains the Government's efforts.
The same, however, cannot be said of our male workers. In the
first place, there is no evidence that, except perhaps for
isolated instances, our men abroad have been afflicted with an
Identical predicament. The petitioner has proffered no
argument that the Government should act similarly with
respect to male workers. The Court, of course, is not
impressing some male chauvinistic notion that men are
superior to women. What the Court is saying is that it was
largely a matter of evidence (that women domestic workers are
being ill-treated abroad in massive instances) and not upon
some fanciful or arbitrary yardstick that the Government acted
in this case. It is evidence capable indeed of unquestionable
demonstration and evidence this Court accepts. The Court
cannot, however, say the same thing as far as men are
concerned. There is simply no evidence to justify such an
inference. Suffice it to state, then, that insofar as classifications
are concerned, this Court is content that distinctions are borne
by the evidence. Discrimination in this case is justified.
As we have furthermore indicated, executive determinations
are generally final on the Court. Under a republican regime, it
is the executive branch that enforces policy. For their part, the
courts decide, in the proper cases, whether that policy, or the
manner by which it is implemented, agrees with the
Constitution or the laws, but it is not for them to question its
wisdom. As a co-equal body, the judiciary has great respect for
determinations of the Chief Executive or his subalterns,
especially when the legislature itself has specifically given
them enough room on how the law should be effectively
enforced. In the case at bar, there is no gainsaying the fact, and
the Court will deal with this at greater length shortly, that
Department Order No. 1 implements the rule-making powers
granted by the Labor Code. But what should be noted is the
fact that in spite of such a fiction of finality, the Court is on its
own persuaded that prevailing conditions indeed call for a
deployment ban.
There is likewise no doubt that such a classification is germane
to the purpose behind the measure. Unquestionably, it is the
avowed objective of Department Order No. 1 to "enhance the
protection for Filipino female overseas workers" 17 this Court
has no quarrel that in the midst of the terrible mistreatment
Filipina workers have suffered abroad, a ban on deployment
will be for their own good and welfare.
The Order does not narrowly apply to existing conditions.
Rather, it is intended to apply indefinitely so long as those
conditions exist. This is clear from the Order itself ("Pending
review of the administrative and legal measures, in the
Philippines and in the host countries . . ."18), meaning to say
that should the authorities arrive at a means impressed with a
greater degree of permanency, the ban shall be lifted. As a
stop-gap measure, it is possessed of a necessary malleability,
depending on the circumstances of each case. Accordingly, it
provides:
9. LIFTING OF SUSPENSION. — The Secretary of Labor
and Employment (DOLE) may, upon recommendation of the
Philippine Overseas Employment Administration (POEA), lift
the suspension in countries where there are:
1. Bilateral agreements or understanding with the Philippines,
and/or,
2. Existing mechanisms providing for sufficient safeguards to
ensure the welfare and protection of Filipino workers. 19
The Court finds, finally, the impugned guidelines to be
applicable to all female domestic overseas workers. That it
does not apply to "all Filipina workers" 20 is not an argument
for unconstitutionality. Had the ban been given universal
applicability, then it would have been unreasonable and
arbitrary. For obvious reasons, not all of them are similarly
circumstanced. What the Constitution prohibits is the singling
out of a select person or group of persons within an existing
class, to the prejudice of such a person or group or resulting in
an unfair advantage to another person or group of persons. To
apply the ban, say exclusively to workers deployed by A, but
not to those recruited by B, would obviously clash with the
equal protection clause of the Charter. It would be a classic
case of what Chase refers to as a law that "takes property from
A and gives it to B." 21 It would be an unlawful invasion of
property rights and freedom of contract and needless to state,
an invalid act. 22 (Fernando says: "Where the classification is
based on such distinctions that make a real difference as
infancy, sex, and stage of civilization of minority groups, the
better rule, it would seem, is to recognize its validity only if
the young, the women, and the cultural minorities are singled
out for favorable treatment. There would be an element of
unreasonableness if on the contrary their status that calls for
the law ministering to their needs is made the basis of
discriminatory legislation against them. If such be the case, it
would be difficult to refute the assertion of denial of equal
protection." 23 In the case at bar, the assailed Order clearly
accords protection to certain women workers, and not the
contrary.)
It is incorrect to say that Department Order No. 1 prescribes a
total ban on overseas deployment. From scattered provisions
of the Order, it is evident that such a total ban has hot been
contemplated. We quote:
5. AUTHORIZED DEPLOYMENT-The deployment of
domestic helpers and workers of similar skills defined herein
to the following [sic] are authorized under these guidelines and
are exempted from the suspension.
5.1 Hirings by immediate members of the family of Heads of
State and Government;
5.2 Hirings by Minister, Deputy Minister and the other senior
government officials; and
5.3 Hirings by senior officials of the diplomatic corps and duly
accredited international organizations.
5.4 Hirings by employers in countries with whom the
Philippines have [sic] bilateral labor agreements or
understanding.
xxx xxx xxx
7. VACATIONING DOMESTIC HELPERS AND
WORKERS OF SIMILAR SKILLS--Vacationing domestic
helpers and/or workers of similar skills shall be allowed to
process with the POEA and leave for worksite only if they are
returning to the same employer to finish an existing or partially
served employment contract. Those workers returning to
worksite to serve a new employer shall be covered by the
suspension and the provision of these guidelines.
xxx xxx xxx
9. LIFTING OF SUSPENSION-The Secretary of Labor and
Employment (DOLE) may, upon recommendation of the
Philippine Overseas Employment Administration (POEA), lift
the suspension in countries where there are:
1. Bilateral agreements or understanding with the Philippines,
and/or,
2. Existing mechanisms providing for sufficient safeguards to
ensure the welfare and protection of Filipino workers. 24
xxx xxx xxx
The consequence the deployment ban has on the right to travel
does not impair the right. The right to travel is subject, among
other things, to the requirements of "public safety," "as may be
provided by law." 25 Department Order No. 1 is a valid
implementation of the Labor Code, in particular, its basic
policy to "afford protection to labor," 26 pursuant to the
respondent Department of Labor's rule-making authority
vested in it by the Labor Code. 27 The petitioner assumes that
it is unreasonable simply because of its impact on the right to
travel, but as we have stated, the right itself is not absolute.
The disputed Order is a valid qualification thereto.
Neither is there merit in the contention that Department Order
No. 1 constitutes an invalid exercise of legislative power. It is
true that police power is the domain of the legislature, but it
does not mean that such an authority may not be lawfully
delegated. As we have mentioned, the Labor Code itself vests
the Department of Labor and Employment with rulemaking
powers in the enforcement whereof. 28
The petitioners's reliance on the Constitutional guaranty of
worker participation "in policy and decision-making processes
affecting their rights and benefits" 29 is not well-taken. The
right granted by this provision, again, must submit to the
demands and necessities of the State's power of regulation.
The Constitution declares that:
Sec. 3. The State shall afford full protection to labor, local and
overseas, organized and unorganized, and promote full
employment and equality of employment opportunities for all.
30
"Protection to labor" does not signify the promotion of
employment alone. What concerns the Constitution more
paramountly is that such an employment be above all, decent,
just, and humane. It is bad enough that the country has to send
its sons and daughters to strange lands because it cannot satisfy
their employment needs at home. Under these circumstances,
the Government is duty-bound to insure that our toiling
expatriates have adequate protection, personally and
economically, while away from home. In this case, the
Government has evidence, an evidence the petitioner cannot
seriously dispute, of the lack or inadequacy of such protection,
and as part of its duty, it has precisely ordered an indefinite
ban on deployment.
The Court finds furthermore that the Government has not
indiscriminately made use of its authority. It is not contested
that it has in fact removed the prohibition with respect to
certain countries as manifested by the Solicitor General.
The non-impairment clause of the Constitution, invoked by the
petitioner, must yield to the loftier purposes targetted by the
Government. 31 Freedom of contract and enterprise, like all
other freedoms, is not free from restrictions, more so in this
jurisdiction, where laissez faire has never been fully accepted
as a controlling economic way of life.
This Court understands the grave implications the questioned
Order has on the business of recruitment. The concern of the
Government, however, is not necessarily to maintain profits of
business firms. In the ordinary sequence of events, it is profits
that suffer as a result of Government regulation. The interest
of the State is to provide a decent living to its citizens. The
Government has convinced the Court in this case that this is its
intent. We do not find the impugned Order to be tainted with a
grave abuse of discretion to warrant the extraordinary relief
prayed for.
WHEREFORE, the petition is DISMISSED. No costs.
C. ALCANTARA & SONS, INC., vs CA
G.R. No. 155109
ABAD, J.:
This case is about a) the consequences of an
illegally staged strike upon the employment status of the union
officers and its ordinary members and b) the right of reinstated
union members to go back to work pending the companys
appeal from the order reinstating them.
The Facts and the Case
C. Alcantara & Sons, Inc., (the Company) is a
domestic corporation engaged in the manufacture and
processing of plywood. Nagkahiusang Mamumuo sa Alsons-
SPFL (the Union) is the exclusive bargaining agent of the
Companys rank and file employees. The other parties to these
cases are the Union officers[if !supportFootnotes][1][endif] and their
striking members.[if !supportFootnotes][2][endif]
The Company and the Union entered into a
Collective Bargaining Agreement (CBA) that bound them to
hold no strike and no lockout in the course of its life. At some
point the parties began negotiating the economic provisions of
their CBA but this ended in a deadlock, prompting the Union
to file a notice of strike. After efforts at conciliation by the
Department of Labor and Employment (DOLE) failed, the
Union conducted a strike vote that resulted in an
overwhelming majority of its members favoring it. The Union
reported the strike vote to the DOLE and, after the observance
of the mandatory cooling-off period, went on strike.
During the strike, the Company filed a petition for
the issuance of a writ of preliminary injunction with prayer for
the issuance of a temporary restraining order (TRO) Ex Parte[if
!supportFootnotes][3][endif]
with the National Labor Relations
Commission (NLRC) to enjoin the strikers from intimidating,
threatening, molesting, and impeding by barricade the entry of
non-striking employees at the Companys premises. The NLRC
first issued a 20-day TRO and, after hearing, a writ of
preliminary injunction, enjoining the Union and its officers
and members from performing the acts complained of. But
several attempts to implement the writ failed. Only the
intervention of law enforcement units made such
implementation possible. Meantime, the Union filed a
petition[if !supportFootnotes][4][endif] with the Court of Appeals (CA),
questioning the preliminary injunction order. On February 8,
1999 the latter court dismissed the petition. The Union did not
appeal from such dismissal.
The Company, on the other hand, filed a petition
with the Regional Arbitration Board to declare the Unions
strike illegal,[if !supportFootnotes][5][endif] citing its violation of the no
strike, no lockout, provision of their CBA. Subsequently, the
Company amended its petition to implead the named Union
members who allegedly committed prohibited acts during the
strike. For their part, the Union, its officers, and its affected
members filed against the Company a counterclaim for unfair
labor practices, illegal dismissal, and damages. The Union also
assailed as invalid the service of summons on the individual
Union members included in the amended petition.
On June 29, 1999 the Labor Arbiter rendered a
decision,[if !supportFootnotes][6][endif] declaring the Unions strike
illegal for violating the CBAs no strike, no lockout, provision.
As a consequence, the Labor Arbiter held that the Union
officers should be deemed to have forfeited their employment
with the Company and that they should pay actual damages of
P3,825,000.00 plus 10% interest and attorneys fees. With
respect to the striking Union members, finding no proof that
they actually committed illegal acts during the strike, the
Labor Arbiter ordered their reinstatement without backwages.
The Labor Arbiter denied the Unions counterclaim for lack of
merit.
On June 29, 1999 the terminated Union members
promptly filed a motion for their immediate reinstatement but
the Labor Arbiter did not act on the same. At any rate, the
Company did not reinstate them. Both parties appealed[if
!supportFootnotes][7][endif]
the Labor Arbiters decision to the NLRC.
The Company impugned the Labor Arbiters decision insofar
as it ordered the reinstatement of the terminated Union
members. The Union, on the other hand, questioned the
declaration of illegality of the strike as well as the dismissal of
its officers and the order for them to pay damages.
On November 8, 1999 the NLRC rendered a
decision,[if !supportFootnotes][8][endif] affirming that of the Labor
Arbiter insofar as the latter declared the strike illegal, ordered
the Union officers terminated, and directed them to pay
damages to the Company. The NLRC ruled, however, that the
Union members involved, who were identified in the
proceedings held in the case, should also be terminated for
having committed prohibited and illegal acts.
The Union filed a petition for certiorari[if
!supportFootnotes][9][endif]
with the CA, questioning the NLRC
decision. Finding merit in the petition, the CA rendered a
decision on March 20, 2002,[if !supportFootnotes][10][endif] annulling
the NLRC decision and reinstating that of the Labor Arbiter.
The Company and the Union with its officers and members
filed separate petitions for review of the CA decision in G.R.
155109 and 155135, respectively.
During the pendency of these cases, the affected
Union members filed with the Labor Arbiter a motion for
reinstatement pending appeal by the parties and the
computation of their backwages based on the CA decision.
After hearing, the Labor Arbiter issued a resolution dated
November 21, 2002,[if !supportFootnotes][11][endif] holding that due to
the delay in the resolution of the dispute and the
impracticability of reinstatement owing to the fact that the
relations between the terminated Union members and the
Company had been severely strained by the prolonged
litigation, payment of separation pay to such Union members
was in order. The Labor Arbiter thus approved the
computation and payment of their separation pay and denied
all their other claims.
Both parties appealed the Labor Arbiters
resolution[if !supportFootnotes][12][endif] to the NLRC. Initially, in its
resolution dated April 30, 2003,[if !supportFootnotes][13][endif] the
NLRC declared the Labor Arbiters resolution of November 21,
2002 void for lack of factual and legal basis but ordered the
Company to pay the affected employees accrued wages and
13th month pay considering the Companys refusal to reinstate
them pending appeal. On motion for reconsideration by both
parties, however, the NLRC issued a resolution on August 29,
2003,[if !supportFootnotes][14][endif] modifying its earlier resolution by
deleting the grant of accrued wages and 13th month pay to the
subject employees, thus denying their motion for computation.
Upon the Unions petition for certiorari[if
!supportFootnotes][15][endif]
with the CA, questioning the NLRCs
denial of the terminated Union members claim for separation
pay, accrued wages, and other benefits, the CA rendered a
decision on February 24, 2005,[if !supportFootnotes][16][endif]
dismissing the petition. The CA ruled that the reinstatement
pending appeal provided under Article 223 of the Labor Code
contemplated illegal dismissal or termination cases and not
cases under Article 263. Thus, the CA ruled that the resolution
ordering the reinstatement of the terminated Union members
and the payment of their wages and other benefits had no basis.
Aggrieved, the Union sought intervention by this Court.
The Issues Presented
The issues presented in these cases are:
1. Whether or not the NLRC properly acquired
jurisdiction over the persons of the individual Union members
impleaded in the case;
2. Whether or not the Union staged an illegal
strike;
3. Assuming the strike to be illegal, whether or not
the impleaded Union members committed illegal acts during
the strike, justifying their termination from employment;
4. Whether or not the terminated Union members
are entitled to the payment of backwages on account of the
Companys refusal to reinstate them, pending appeal by the
parties, from the Labor Arbiters decision of June 29, 1999; and
5. Whether or not the terminated Union members
are entitled to accrued backwages and separation pay.
The Rulings of the Court

One. The NLRC acquires jurisdiction over parties in cases
before it either by summons served on them or by their
voluntary appearance before its Labor Arbiter. Here, while
the Union insists that summons were not properly served on
the impleaded Union members with respect to the Companys
amended petition that sought to declare the strike illegal, the
records show that they were so served. The Return of Service
of Summons[if !supportFootnotes][17][endif] indicated that 74 out of the
81[if !supportFootnotes][18][endif] impleaded Union members were
served with summons. But they refused either to accept the
summons or to acknowledge receipt of the same. Such refusal
cannot of course frustrate the NLRCs acquisition of
jurisdiction over them. Besides, the affected Union members
voluntarily entered their appearance in the case when they
sought affirmative relief in the course of the proceedings like
an award of damages in their favor.
Two. A strike may be regarded as invalid although the labor
union has complied with the strict requirements for staging
one as provided in Article 263 of the Labor Code when the
same is held contrary to an existing agreement, such as a no
strike clause or conclusive arbitration clause.[if
!supportFootnotes][19][endif]
Here, the CBA between the parties
contained a no strike, no lockout provision that enjoined both
the Union and the Company from resorting to the use of
economic weapons available to them under the law and to
instead take recourse to voluntary arbitration in settling their
disputes.
No law or public policy prohibits the Union and
the Company from mutually waiving the strike and lockout
maces available to them to give way to voluntary arbitration.
Indeed, no less than the 1987 Constitution recognizes in
Section 3, Article XIII, preferential use of voluntary means to
settle disputes. Thus
The State shall
promote the principle of
shared responsibility
between workers and
employers and the
preferential use of
voluntary modes in settling
disputes, including
conciliation, and shall
enforce their mutual
compliance therewith to
foster industrial peace.
The Court finds no compelling reason to depart
from the findings of the Labor Arbiter, the NLRC, and the CA
regarding the illegality of the strike. Social justice is not one-
sided. It cannot be used as a badge for not complying with a
lawful agreement.
Three. Since the Unions strike has been declared illegal, the
Union officers can, in accordance with law be terminated
from employment for their actions. This includes the shop
stewards. They cannot be shielded from the coverage of
Article 264 of the Labor Code since the Union appointed
them as such and placed them in positions of leadership and
power over the men in their respective work units.
As regards the rank and file Union members,
Article 264 of the Labor Code provides that termination from
employment is not warranted by the mere fact that a union
member has taken part in an illegal strike. It must be shown
that such a union member, clearly identified, performed an
illegal act or acts during the strike.[if !supportFootnotes][20][endif]
Here, although the Labor Arbiter found no proof
that the dismissed rank and file Union members committed
illegal acts, the NLRC found following the injunction hearing
in NLRC IC M-000126-98 that the Union members concerned
committed such acts, for which they had in fact been
criminally charged before various courts and the prosecutors
office in Davao City. Since the CA held that the existence of
criminal complaints against the Union members did not
warrant their dismissal, it becomes necessary for the Court to
go into the records to settle the issue.
The striking Union members allegedly committed
the following prohibited acts:
a. They
threatened, coerced, and
intimidated non-striking
employees, officers,
suppliers and customers;
b. b. They
obstructed the free
ingress to and egress
from the company
premises; and
c. They resisted
and defied the
implementation of the writ of
preliminary injunction
issued against the strikers.
Cornelio Caguiat, Ruben Tungapalan, and
Eufracio Rabusa depicted the above prohibited acts in their
affidavits and testimonies. The Sheriff of the NLRC said in his
Report[if !supportFootnotes][21][endif] that, in the course of his
implementation of the writ of injunction, he observed that the
striking employees blocked the exit lane of the Alson drive
with their tent. Tungapalan, a non-striking employee,
identified the Union members who threatened and coerced
him. Indeed, he filed criminal actions against them. Lastly, the
photos taken of the strike show the strikers, properly identified,
committing the acts complained of. These constitute
substantial evidence in support of the termination of the
subject Union members.
The mere fact that the criminal complaints against
the terminated Union members were subsequently dismissed
for one reason or another does not extinguish their liability
under the Labor Code. Nor does such dismissal bar the
admission of the affidavits, documents, and photos presented
to establish their identity and guilt during the hearing of the
petition to declare the strike illegal. The technical grounds that
the Union interposed for denying admission of the photos are
also not binding on the NLRC.[if !supportFootnotes][22][endif]
Four. The terminated Union members contend that, since the
Company refused to reinstate them after the Labor Arbiter
rendered a decision in their favor, the Company should be
ordered to pay them their wages during the pendency of the
appeals from the Labor Arbiters decision.
It will be recalled that after the Labor Arbiter
rendered his decision on June 29, 1999, which decision
ordered the reinstatement of the terminated Union members,
the latter promptly filed a motion for their reinstatement
pending appeal. But the Labor Arbiter did not for some reason
act on the motion. As it happened, after about four months or
on November 8, 1999, the NLRC reversed the Labor Arbiters
reinstatement order. It cannot be said, therefore, that the
Company had resisted a standing order of reinstatement
directed at it at this point.
Of course, on March 20, 2002 the CA restored the
Labor Arbiters reinstatement order. And this prompted the
affected Union members to again file with the Labor Arbiter a
motion for their reinstatement pending appeal. But, acting on
the motion, the Labor Arbiter resolved at this point that
reinstatement was no longer practicable because of the
severely strained relation between the company and the
terminated Union members. In place of reinstatement, the
Labor Arbiter ordered the Company to pay them their
separation pays.
Both parties appealed the Labor Arbiters above
ruling[if !supportFootnotes][23][endif] to the NLRC. But, as it turned out
the NLRC did not also favor reinstatement. It instead ordered
the Company to pay the terminated Union members their
accrued wages and 13th month pay considering its refusal to
reinstate them pending appeal. On motion for reconsideration,
however, the NLRC reconsidered and deleted altogether the
grant of accrued wages and 13th month pay. The Union
appealed the NLRC ruling to the CA on behalf of its
terminated members but the CA denied their appeal.
The CA denied reinstatement for the reason that
the reinstatement pending appeal provided under Article 223
of the Labor Code contemplated illegal dismissal or
termination cases and not cases under Article 264. But this
perceived distinction does not find support in the provisions of
the Labor Code.
The grounds for termination under Article 264 are
based on prohibited acts that employees could commit during
a strike. On the other hand, the grounds for termination under
Articles 282 to 284 are based on the employees conduct in
connection with his assigned work. Still, Article 217, which
defines the powers of Labor Arbiters, vests in the latter
jurisdiction over all termination cases, whatever be the
grounds given for the termination of employment.
Consequently, Article 223, which provides that the decision of
the Labor Arbiter reinstating a dismissed employee shall
immediately be executory pending appeal, cannot but apply to
all terminations irrespective of the grounds on which they are
based.
Here, although the Labor Arbiter failed to act on
the terminated Union members motion for reinstatement
pending appeal, the Company had the duty under Article 223
to immediately reinstate the affected employees even if it
intended to appeal from the decision ordaining such
reinstatement. The Companys failure to do so makes it liable
for accrued backwages until the eventual reversal of the order
of reinstatement by the NLRC on November 8, 1999,[if
!supportFootnotes][24][endif]
a period of four months and nine days.
Five. While it is true that generally the grant of separation
pay is not available to employees who are validly dismissed,
there are, in furtherance of the laws policy of compassionate
justice, certain circumstances that warrant the grant of some
relief in favor of the terminated Union members based on
equity.
Bitter labor disputes, especially strikes, always
generate a throng of odium and abhorrence that sometimes
result in unpleasant, although unwanted, consequences.[if
!supportFootnotes][25][endif]
Considering this, the striking employees
breach of certain restrictions imposed on their concerted
actions at their employers doorsteps cannot be regarded as so
inherently wicked that the employer can totally disregard their
long years of service prior to such breach.[if
!supportFootnotes][26][endif]
The records also fail to disclose any past
infractions committed by the dismissed Union members.
Taking these circumstances in consideration, the Court regards
the award of financial assistance to these Union members in
the form of one-half month salary for every year of service to
the company up to the date of their termination as equitable
and reasonable.
WHEREFORE, the Court DENIES the petition of the
Nagkahiusang Mamumuo sa Alsons-SPFL and its officers
and members in G.R. 155135 for lack of merit, and
REVERSES and SETS ASIDE the decision of the Court of
Appeals in CA-G.R. SP 59604 dated March 20, 2002. The
Court, on the other hand, GRANTS the petition of C.
Alcantara & Sons, Inc. in G.R. 155109 and REINSTATES
the decision of the National Labor Relations Commission in
NLRC CA M-004996-99 dated November 8, 1999.
Further, the Court PARTIALLY GRANTS the
petition of the Nagkahiusang Mamumuo sa Alsons-SPFL and
their dismissed members in G.R. 179220 and ORDERS C.
Alcantara & Sons, Inc. to pay the terminated Union members
backwages for four (4) months and nine (9) days and
separation pays equivalent to one-half month salary for every
year of service to the company up to the date of their
termination, with interest of 12% per annum from the time this
decision becomes final and executory until such backwages
and separation pays are paid. The Court DENIES all other
claims.
SO ORDERED.
ST. MARYS ACADEMY OF DIPOLOG CITY, vs
Palacio

G.R. No. 164913
DEL CASTILLO, J.:
The Court will not hesitate to defend the workers
constitutional right to security of tenure. After all, the interest
of the workers is paramount as they are regarded with
compassion under the policy of social justice.
By this Petition for Review on Certiorari,[if
!supportFootnotes][1][endif]
petitioner St. Marys Academy of Dipolog
City (petitioner) assails the Decision[if !supportFootnotes][2][endif]
dated September 24, 2003 and Resolution[if !supportFootnotes][3][endif]
dated August 16, 2004 of the Court of Appeals (CA) in CA-
G.R. SP No. 67691, which affirmed with modification the
Resolution[if !supportFootnotes][4][endif] of the National Labor
Relations Commission (NLRC), dated April 30, 2001 holding
the dismissal of respondents Teresita Palacio (Palacio),
Marigen Calibod (Calibod), Levie Laquio (Laquio), Elaine
Marie Santander (Santander), Eliza Saile (Saile), and Ma.
Dolores Montederamos (Montederamos) as illegal, as well as
the Resolution[if !supportFootnotes][5][endif] dated August 31, 2001
denying the motion for reconsideration.
Factual Antecedents
Petitioner, on the other hand, maintained that it had repeatedly
informed respondents of their obligation to comply with the
mandate of the Memorandum issued by DECS by passing the
LET to be eligible as a registered professional teacher. While
the DECS Memorandum, pursuant to PRC Resolution No.
600, S. 1997,[if !supportFootnotes][12][endif] fixed the deadline for
teachers to register on September 19, 2000,[if
!supportFootnotes][13][endif]
petitioner claimed that it decided to
terminate their services as early as March 31, 2000 because it
would be prejudicial to the school if their services will be
terminated in the middle of the school year.
Ruling of the Labor Arbiter
On September 22, 2000, the Labor Arbiter adjudged petitioner
guilty of illegal dismissal because it terminated the services of
the respondents on March 31, 2000 which was clearly prior to
the September 19, 2000 deadline fixed by PRC for the
registration of teachers as professional teachers, in violation of
the doctrine regarding the prospective application of laws.
Thus, petitioner was ordered to reinstate the respondents or to
pay them separation pay at the rate of month wage for every
year of service, plus limited backwages covering the period
from March 31, 2000 to September 30, 2000. The dispositive
portion of the Labor Arbiters Decision reads as follows:

On different dates in the late 1990s, petitioner hired WHEREFORE,

respondents Calibod, Laquio, Santander, Saile and anchored on the foregoing
Montederamos, as classroom teachers, and respondent premises, judgment is hereby
Palacio, as guidance counselor. In separate letters dated March rendered:
31, 2000,[if !supportFootnotes][6][endif] however, petitioner informed
them that their re-application for school year 2000-2001 could 1.) [endif]t
not be accepted because they failed to pass the Licensure hat respondents act of having
Examination for Teachers (LET). According to petitioner, as terminated the complainants
non-board passers, respondents could not continue practicing employment is in fact and in
their teaching profession pursuant to the Department of law illegal, as it is not
Education, Culture and Sports (DECS) Memorandum No. 10, founded on any of the
S. 1998[if !supportFootnotes][7][endif] which requires incumbent restricted just and authorized
teachers to register as professional teachers pursuant to Section causes provided for by law[,]
27[if !supportFootnotes][8][endif] of Republic Act (RA) No. 7836, hence, entitling
otherwise known as the Philippine Teachers complainants to the right of
Professionalization Act of 1994.[if !supportFootnotes][9][endif] reinstatement and backwages
in accordance with the
Together with four other classroom teachers namely Gail mandate of Article 279 of the
Josephine Padilla (Padilla), Virgilio Andalahao (Andalahao), Labor Code of the
Alma Decipulo (Decipulo),[if !supportFootnotes][10][endif] and Marlynn Philippines. In this case,
Palacio,[if !supportFootnotes][11][endif] who were similarly dismissed however, separation pay is
by petitioner on the same ground, respondents filed a hereby directed against
complaint contesting their termination as highly irregular and respondent together with the
premature. They admitted that they are indeed non-board payment of limited
passers, however, they also argued that their security of tenure backwages, as particularly
could not simply be trampled upon for their failure to register reflected in paragraph 2
with the Professional Regulation Commission (PRC) or to pass hereof;
the LET prior to the deadline set by RA 7836. Further, as the
aforesaid law provides for exceptions to the taking of 2.) [endif]
examination, they opined that their outright dismissal was ordering respondent St.
illegal because some of them possessed civil service Marys Academy to pay
eligibilities and special permits to teach. Furthermore, complainants their
petitioners retention and acceptance of other teachers who do separation pay and limited
not also possess the required eligibility showed evident bad backwages, particularly
faith in terminating respondents. indicated as follows:
A.) Teresita Palacio:
a.) Separation pay . . . . . . . . .
b.) Limited backwages . . . . .
Total . . . . . . . . . . . . . . . . .
P 11,250.90;
27,002.16;
B.) Gail Josephine Padilla:
a.) Separation pay . . . . . . . . .
b.) Limited backwages . . . . .
Total . . . . . . . . . . . . . . . . .
P 15,456.45;
26,512.20;
C.) Marigen Calibod:
a.) Separation pay . . . . . . . . .
b.) Limited backwages . . . . .
Total . . . . . . . . . . . . . . . . .
P 8,837.40;
26,512.20;
D.) Levei Laquio:
a.) Separation pay . . . . . . . . .
b.) Limited backwages . . . . .
Total . . . . . . . . . . . . . . . . .
P 11,378.15;
27,307.56;
E.) Elaine Marie Santander:
a.) Separation pay . . . . . . . . .
b.) Limited backwages . . . . .
Total . . . . . . . . . . . . . . . . .
P 8,837.40;
26,512.20;
F.) Virgilio Andalahao:
a.) Separation pay . . . . . . . . .
b.) Limited backwages . . . . .
Total . . . . . . . . . . . . . . . . .
P 6,435.00;
25,740.00;
G.) Alma Decipulo:
a.) Separation pay . . . . . . . . .
b.) Limited backwages . . . . .
Total . . . . . . . . . . . . . . . . .
P 6,435.00;
25,740.00;
H.)
Saile:
a.) Separation pay . . . . . . . . .
b.) Limited backwages . . . . .
Total . . . . . . . . . . . . . . . . .
P 19,313.72;
28,970.58;
P 48,284.30;
I.) Marlynn Palacio:
a.) Separation pay . . . . . . . . .
b.) Limited backwages . . . . .
P 38,253.06; Total . . . . . . . . . . . . . . . . .
P 4,290.00;
25,740.00;
P 30,030.00; and
[if !supportLists]J.) [endif]Ma. Dolores
Montederamos:
a.) Separation pay . . . . . . . . .
P 41,977.65; b.) Limited backwages . . . . .
Total . . . . . . . . . . . . . . . . .
P 18,205.04;
27,307.56;
P 45,512.60; and
[if !supportLists]3.) [endif]dismissing all other money
claims of complainants for lack of merit.
P 35,349.60;
SO ORDERED.[if !supportFootnotes][14][endif]
Ruling of the National Labor Relations Commission
Both parties appealed to the NLRC. In its Memorandum of
Appeal,[if !supportFootnotes][15][endif] petitioner insisted on the validity
P 38,685.71; of respondents termination from service, such act being in
compliance with RA 7836 and in accordance with DECS
Memorandum No. 10, S. 1998. Respondents, for their part, did
not question the merits of the Labor Arbiters Decision but
prayed for the refund of their retirement contribution and
payment of attorneys fees.
The NLRC, in its Resolution[if !supportFootnotes][16][endif] dated April
30, 2001, denied both appeals. In affirming the Labor Arbiters
P 35,349.60; Decision, it held that the grounds relied upon by petitioner to
dismiss respondents are not among those enumerated by the
Labor Code and that respondents are regular employees, thus
cannot be removed unless for cause. The NLRC did not grant
respondents demand for the refund of their retirement
contribution because this was not alleged in the original
complaint as well as their prayer for attorneys fees since this
case is not one for collection of unlawfully withheld wages.
P 32,175.00;
In a subsequent Resolution dated August 31, 2001,[if
!supportFootnotes][17][endif]
the NLRC likewise denied petitioners
Motion for Reconsideration,[if !supportFootnotes][18][endif] reiterating
that it cannot sustain petitioners premature implementation of
relevant laws and regulations.
Ruling of the Court of Appeals
P 32,175.00;
Petitioner, then, elevated the case to the CA via a petition for
Eliza certiorari.[if !supportFootnotes][19][endif] The CA agreed with the
findings of both the Labor Arbiter and the NLRC that the
dismissal was effected prematurely in violation of existing
laws, noting that respondents still had until September 19,
2000 within which to pass the LET. A contingency plan,
according to the CA, should have instead been adopted by
petitioner in the event respondents termination from the
service in the middle of the school year becomes inevitable.
The CA also observed that petitioners ulterior motive for the
termination may have been the result of a confrontation
between petitioners principal and respondents. The CA also
found petitioners acts of retaining and hiring other equally
unqualified teachers who do not possess the required eligibility
and allowing them to teach for the school year 2000-2001 as
badges of bad faith.
As regards Padilla, Marlynn Palacio, Andalahao and Decipulo,
the CA found them to be mere probationary, and not regular,
employees. Their employment contracts merely expired and
since the petitioner did not wish to renew their contracts, then
there is no illegal dismissal to speak of.
II. THE COURT OF APPEALS GRAVELY ERRED IN
FAILING TO CONSIDER THAT ASSUMING THAT
RESPONDENTS WERE PREMATURELY
TERMINATED IN MARCH 2000, AT THE MOST,
RESPONDENTS ARE ENTITLED TO BACKWAGES
UP TO SEPTEMBER 19, 2000 ONLY BECAUSE ON
SUCH DATE, THEY WERE ALREADY DISMISSIBLE
FOR CAUSE FOR NOT HAVING OBTAINED THEIR
TEACHERS LICENSE.[if !supportFootnotes][22][endif]

Accordingly, the dispositive portion of the CA Decision reads: Petitioner insists that it has the right to terminate respondents
services as early as March 2000 without waiting for the
WHEREFORE, September 19, 2000 deadline set by law for respondents to
the assailed Resolutions of register as professional teachers due to the need to fix the
the NLRC, Fifth Division school organization prior to the applicable school year.
dated April 30, 2001, [is] Petitioner justifies respondents termination by advancing that
hereby AFFIRMED with it would be difficult to hire licensed teachers in the middle of
MODIFICATION. The the school year as respondents replacements. Also, the
monetary awards adjudged termination of respondents in the middle of the school year
in favor of private might result in compromising the education of the students as
respondents Gail Josephine well as the school operation. Petitioner further argues that it
Padilla, Virgilio Andalahao, cannot hire respondents for the period covering only June to
Alma Decipolo and Merlyn September as it would contravene the DECSs policy requiring
Palacio whose services were written contracts of at least one years duration for teachers.
legally terminated, are
hereby DELETED for lack Our Ruling
of basis. so ordered.
The petition is devoid of merit.

The dismissal of Teresita Palacio, Calibod, Laquio,

Santander, and Montederamos was premature and defeated
Petitioner their right to security of tenure. Sailes dismissal has legal
moved to partially reconsider basis for lack of the required qualification needed for
the Decision insofar as it continued practice of teaching.
found the dismissal of herein
respondents to be premature Pertinent provisions of RA 7836 provide:
and prayed that respondents
be declared legally dismissed SEC. 13. Examination, Registration and
from the service. The CA, License Required. Except as
however, denied the motion. otherwise specifically
allowed under the provisions
Hence, this petition. of this Act, all applicants for
registration as professional
Issues teachers shall be required to
undergo a written
I. THE COURT OF APPEALS COMMITTED examination which shall be
GRIEVOUS ERROR IN HOLDING THAT THE given at least once a year in
DISMISSAL OF TERESITA PALACIO, MARIGEN such places and dates as the
CALIBOD, LEVIE LAQUIO, ELAINE MARIE Board may determine upon
SANTANDER, ELIZA SAILE, AND DOLORES approval by the Commission.
MONTEDERAMOS, WAS PREMATURE BECAUSE IT A valid certificate of
WAS EFFECTED ON MARCH 31, 2000 PRIOR TO registration and a valid
SEPTEMBER 20, 2000,[if !supportFootnotes][21][endif] THE professional license from the
DEADLINE SET BY THE PROFESSIONAL Commission are required
[REGULATION] COMMISSION FOR TEACHERS TO before any person is allowed
ACQUIRE THEIR LICENSE. to practice as a professional
 teacher in the Philippines, (2) An
except as otherwise allowed elementary or
under this Act. secondary
teacher for three
xxxx (3) years in good
standing and a
SEC. 26. Registration and Exception. holder of a
Two (2) years after the masters degree
effectivity of this Act, no in education or
person shall engage in its equivalent.
teaching and/or act as a
professional teacher as Provided, That they shall be given two (2) years from the
defined in this Act, whether organization of the Board for professional teachers within
in the preschool, elementary which to register and be included in the roster of professional
or secondary level, unless he teachers: Provided, further, That those incumbent teachers
is a duly registered who are not qualified to register without examination under
professional teacher, and a this Act or who, albeit qualified, were unable to register
holder of a valid certificate within the two-year period shall be issued a five-year
of registration and a valid temporary or special permit from the time the Board is
professional license or a organized within which to register after passing the
holder of a valid examination and complying with the requirements provided
special/temporary permit. in this Act and be included in the roster of professional
teachers: Provided, furthermore, That those who have failed
Upon approval of the application and
the licensure examination for professional teachers shall be
payment of the prescribed
fees, the certificate of eligible as para-teachers and as such, shall be issued by the
registration and professional Board a special or temporary permit, and shall be assigned by
the Department of Education, Culture and Sports (DECS) to
license as a professional
schools as it may determine under the circumstances.
teacher shall be issued
without examination as
xxxx
required in this Act to a
qualified applicant, who at SEC. 27. Inhibition Against the Practice
the time of the approval of of the Teaching Profession.
this Act, is: Except as otherwise allowed
under this Act, no person
[if !supportLists](a) [endif]A holder of a certificate of shall practice or offer to
eligibility as a teacher issued by the Civil Service practice the teaching
Commission and the Department of Education, Culture and profession in the Philippines
Sports; or or be appointed as teacher to
any position without having
[if !supportLists](b) [endif]A registered professional previously obtained a valid
teacher with the National Board for Teachers under the certificate of registration and
Department of Education, Culture and Sports (DECS) a valid professional license
pursuant to Presidential Decree No. 1006; or from the Commission.
(c) Not qualified xxxx
under paragraphs one and SEC. 31.
two but with any of the Transitory Provision. All
following qualifications, to incumbent teachers in both
wit: the public and private sector
not otherwise certified as
(1) An professional teachers by
elementary or virtue of this Act, shall be
secondary given five (5) years
teacher for five temporary certificates from
(5) years in good the time the Board for
standing and a Professional Teachers is
holder of a organized within which to
Bachelor of qualify as required by this
Science in Act and be included in the
Education or its roster of professionals.
equivalent; or

Pursuant to RA 7836, the PRC formulated certain rules and
regulations relative to the registration of teachers and their
continued practice of the teaching profession. Specific periods
and deadlines were fixed within which incumbent teachers
must register as professional teachers in consonance with the
essential purpose of the law in promoting good quality
education by ensuring that those who practice the teaching
profession are duly licensed and are registered as professional
teachers.
Under DECS Memorandum No. 10, S. 1998, the Board for
Professional Teachers (BPT), created under the general
supervision and administrative control of the PRC, was
organized on September 20, 1995 so that, in the
implementation of Sections 26, 27 and 31 of RA 7836,
incumbent teachers as of December 16, 1994 have until
September 19, 1997 to register as professional teachers. The
Memorandum further stated that a Memorandum of
Agreement (MOA) was subsequently entered into by the PRC,
Civil Service Commission (CSC) and DECS to further allow
those teachers who failed to register by September 19, 1997 to
continue their service and register. BPT Resolution No. 600, s.
1997 was thereafter passed to provide the guidelines[if
!supportFootnotes][23][endif]
to govern teacher registration beyond
September 19, 1997. Consequently, the deadline was moved
to September 19, 2000.
Pursuant to the aforestated law, resolution and
memorandum, effective September 20, 2000, only holders of
valid certificates of registration, valid professional licenses
and valid special/temporary permits can engage in teaching in
both public and private schools.[if !supportFootnotes][24][endif] Clearly,
respondents, in the case at bar, had until September 19, 2000
to comply with the mandatory requirement to register as
professional teachers. As respondents are categorized as those
not qualified to register without examination, the law requires
them to register by taking and passing the licensure
examination.
It is undisputed that respondents were all non-
board passers when they were dismissed by petitioner on
March 31, 2000. Based on the certification issued by the PRC
on October 23, 2000,[if !supportFootnotes][25][endif] only respondent
Santander passed the LET but only for the elementary level.
Thus, she is still unqualified to teach in the high school level.
All the others, except respondent Saile who is not qualified to
take the LET, failed the examination. Petitioner harps on the
fact that even if respondents were to take the LET in August
of 2000, the results could not be known in time to meet the
September 19, 2000 deadline. However, it is to be noted that
the law still allows those who failed the licensure examination
between 1996 and 2000 to continue teaching if they obtain
temporary or special permits as para-teachers.[if
!supportFootnotes][26][endif]
In other words, as the law has provided a
specific timeframe within which respondents could comply,
petitioner has no right to deny them of this privilege accorded
to them by law. As correctly pointed out by the Labor Arbiter
and affirmed by the NLRC and the CA, the dismissal from
service of respondents Palacio, Calibod, Laquio, Santander
and Montederamos on March 31, 2000 was quite premature.
Petitioner claims that it terminated respondents
employment as early as March 2000 because it would be
highly difficult to hire professional teachers in the middle of
the school year as replacements for respondents without
compromising the operation of the school and education of the
students. Also, petitioner reasons out that it could not enter into
written contracts with respondents for the period June 2000 to
September 19, 2000 without violating the DECSs policy
requiring contracts of yearly duration for elementary and high
school teachers.
Petitioners contentions are not tenable. First, even
if respondents contracts stipulate for a period of one year in
compliance with DECSs directive, such stipulation could not
be given effect for being violative of the law. Provisions in a
contract must be read in conjunction with statutory and
administrative regulations. This finds basis on the principle
that an existing law enters into and forms part of a valid
contract without the need for the parties expressly making
reference to it.[if !supportFootnotes][27][endif] Settled is the rule that
stipulations made upon the convenience of the parties are valid
only if they are not contrary to law.[if !supportFootnotes][28][endif]
Hence, mere reliance on the policy of DECS requiring yearly
contracts for teachers should not prevent petitioner from
retaining the services of respondents until and unless the law
provides for cause for respondents dismissal.
Petitioners intention and desire not to put the
students education and school operation in jeopardy is neither
a decisive consideration for respondents termination prior to
the deadline set by law. Again, by setting a deadline for
registration as professional teachers, the law has allowed
incumbent teachers to practice their teaching profession until
September 19, 2000, despite being unregistered and
unlicensed. The prejudice that respondents retention would
cause to the schools operation is only trivial if not speculative
as compared to the consequences of respondents
unemployment. Because of petitioners predicament, it should
have adopted measures to protect the interest of its teachers as
regular employees. As correctly observed by the CA,
petitioner should have earlier drawn a contingency plan in the
event there is need to terminate respondents services in the
middle of the school year. Incidentally, petitioner did not
dispute that it hired and retained other teachers who do not
likewise possess the qualification and eligibility and even
allowed them to teach during the school year 2000-2001. This
indicates petitioners ulterior motive in hastily dismissing
respondents.
It is incumbent upon this Court to afford full
protection to labor. Thus, while we take cognizance of the
employers right to protect its interest, the same should be
exercised in a manner which does not infringe on the workers
right to security of tenure. Under the policy of social justice,
the law bends over backward to accommodate the interests of
the working class on the humane justification that those with
less privilege in life should have more in law.[if !
To reiterate, this Court will not hesitate to defend
respondents right to security of tenure. The premature
dismissal from the service of respondents Palacio, Calibod,
Laquio, Santander and Montederamos is unwarranted.
However, we take exception to the case of respondent Saile
who, as alleged by petitioner, was not qualified to take the LET
as she only had three out of the minimum 10 required
educational units to be admitted to take the LET pursuant to
Section 15 of RA 7836,[if !supportFootnotes][30][endif] which fact
respondent Saile did not refute. Not being qualified to take the
examination to become a duly licensed professional teacher,
petitioner cannot be compelled to retain her services as she
cannot possibly obtain the needed prerequisite to allow her to
continue practicing the teaching profession. Thus, we find her
termination just and legal.
Limited backwages computed from March 31, 2000 to
September 30, 2000 awarded in favor of Palacio, Calibod,
Laquio, Santander and Montederamos are sustained.
Petitioner questions the amount of separation pay awarded to
respondents contending that assuming respondents were
illegally dismissed, they are only entitled to an amount
computed from the time of dismissal up to September 19,
2000 only. After September 19, 2000, respondents, according
to petitioner, are already dismissible for cause for lack of the
necessary license to teach.
This contention deserves no merit. Petitioner
cannot possibly presume that respondents could not timely
comply with the requirements of the law. At any rate, we note
that petitioner only assailed the amount of backwages for the
first time in its motion for reconsideration of the Decision of
the CA. Thus, the Court cannot entertain the issue for being
belatedly raised. Hence, the award of limited backwages
covering the period from March 31, 2000 to September 30,
2000 as ruled by the Labor Arbiter and affirmed by both the
NLRC and CA is in order.
WHEREFORE, the petition is PARTIALLY GRANTED.
The Decision of the Court of Appeals dated September 24,
2003 in CA-G.R. SP No. 67691 finding respondents Teresita
Palacio, Marigen Calibod, Levie Laquio, Elaine Marie
Santander and Ma. Dolores Montederamos to have been
illegally dismissed and awarding them separation pay and
limited backwages is AFFIRMED. As regards respondent
Eliza Saile, we find her termination valid and legal.
Consequently, the awards of separation pay and limited
backwages in her favor are DELETED.
SO ORDERED.
G.R. No. 78909 June 30, 1989
MATERNITY CHILDREN'S HOSPITAL, represented
by ANTERA L. DORADO, President, petitioner,
vs.
THE HONORABLE SECRETARY OF LABOR AND
THE REGIONAL DlRECTOR OF LABOR, REGION X,
respondents.
MEDIALDEA, J.:
This is a petition for certiorari seeking the annulment of the
Decision of the respondent Secretary of Labor dated
September 24, 1986, affirming with modification the Order of
respondent Regional Director of Labor, Region X, dated
August 4, 1986, awarding salary differentials and emergency
cost of living allowances (ECOLAS) to employees of
petitioner, and the Order denying petitioner's motion for
reconsideration dated May 13, 1987, on the ground of grave
abuse of discretion.
Petitioner is a semi-government hospital, managed by the
Board of Directors of the Cagayan de Oro Women's Club and
Puericulture Center, headed by Mrs. Antera Dorado, as
holdover President. The hospital derives its finances from the
club itself as well as from paying patients, averaging 130 per
month. It is also partly subsidized by the Philippine Charity
Sweepstakes Office and the Cagayan De Oro City
government.
Petitioner has forty-one (41) employees. Aside from salary and
living allowances, the employees are given food, but the
amount spent therefor is deducted from their respective
salaries (pp. 77-78, Rollo).
On May 23, 1986, ten (10) employees of the petitioner
employed in different capacities/positions filed a complaint
with the Office of the Regional Director of Labor and
Employment, Region X, for underpayment of their salaries and
ECOLAS, which was docketed as ROX Case No. CW-71-86.
On June 16, 1986, the Regional Director directed two of his
Labor Standard and Welfare Officers to inspect the records of
the petitioner to ascertain the truth of the allegations in the
complaints (p. 98, Rollo). Payrolls covering the periods of
May, 1974, January, 1985, November, 1985 and May, 1986,
were duly submitted for inspection.
On July 17, 1986, the Labor Standard and Welfare Officers
submitted their report confirming that there was underpayment
of wages and ECOLAs of all the employees by the petitioner,
the dispositive portion of which reads:
IN VIEW OF THE FOREGOING, deficiency on wage and
ecola as verified and confirmed per review of the respondent
payrolls and interviews with the complainant workers and all
other information gathered by the team, it is respectfully
recommended to the Honorable Regional Director, this office,
that Antera Dorado, President be ORDERED to pay the
amount of SIX HUNDRED FIFTY FOUR THOUSAND
SEVEN HUNDRED FIFTY SIX & 01/100 (P654,756.01),
representing underpayment of wages and ecola to the THIRTY
SIX (36) employees of the said hospital as appearing in the
attached Annex "F" worksheets and/or whatever action
equitable under the premises. (p. 99, Rollo)
Based on this inspection report and recommendation, the
Regional Director issued an Order dated August 4, 1986,
directing the payment of P723,888.58, representing
underpayment of wages and ECOLAs to all the petitioner's
employees, the dispositive portion of which reads:
WHEREFORE, premises considered, respondent Maternity
and Children Hospital is hereby ordered to pay the above-listed
complainants the total amount indicated opposite each name,
thru this Office within ten (10) days from receipt thereof.
Thenceforth, the respondent hospital is also ordered to pay its
employees/workers the prevailing statutory minimum wage
and allowance.
SO ORDERED. (p. 34, Rollo)
Petitioner appealed from this Order to the Minister of Labor
and Employment, Hon. Augusto S. Sanchez, who rendered a
Decision on September 24, 1986, modifying the said Order in
that deficiency wages and ECOLAs should be computed only
from May 23, 1983 to May 23, 1986, the dispositive portion of
which reads:
WHEREFORE, the August 29, 1986 order is hereby
MODIFIED in that the deficiency wages and ECOLAs should
only be computed from May 23, 1983 to May 23, 1986. The
case is remanded to the Regional Director, Region X, for
recomputation specifying the amounts due each the
complainants under each of the applicable Presidential
Decrees. (p. 40, Rollo)
On October 24, 1986, the petitioner filed a motion for
reconsideration which was denied by the Secretary of Labor in
his Order dated May 13, 1987, for lack of merit (p. 43 Rollo).
The instant petition questions the all-embracing applicability
of the award involving salary differentials and ECOLAS, in
that it covers not only the hospital employees who signed the
complaints, but also those (a) who are not signatories to the
complaint, and (b) those who were no longer in the service of
the hospital at the time the complaints were filed.
Petitioner likewise maintains that the Order of the respondent
Regional Director of Labor, as affirmed with modifications by
respondent Secretary of Labor, does not clearly and distinctly
state the facts and the law on which the award was based. In
its "Rejoinder to Comment", petitioner further questions the
authority of the Regional Director to award salary differentials
and ECOLAs to private respondents, (relying on the case of
Encarnacion vs. Baltazar, G.R. No. L-16883, March 27, 1961,
1 SCRA 860, as authority for raising the additional issue of
lack of jurisdiction at any stage of the proceedings, p. 52,
Rollo), alleging that the original and exclusive jurisdiction
over money claims is properly lodged in the Labor Arbiter,
based on Article 217, paragraph 3 of the Labor Code.
The primary issue here is whether or not the Regional Director
had jurisdiction over the case and if so, the extent of coverage
of any award that should be forthcoming, arising from his
visitorial and enforcement powers under Article 128 of the
Labor Code. The matter of whether or not the decision states
clearly and distinctly statement of facts as well as the law upon
which it is based, becomes relevant after the issue on
jurisdiction has been resolved.
This is a labor standards case, and is governed by Art. 128-b
of the Labor Code, as amended by E.O. No. 111. Labor
standards refer to the minimum requirements prescribed by
existing laws, rules, and regulations relating to wages, hours
of work, cost of living allowance and other monetary and
welfare benefits, including occupational, safety, and health
standards (Section 7, Rule I, Rules on the Disposition of Labor
Standards Cases in the Regional Office, dated September 16,
1987). 1 Under the present rules, a Regional Director exercises
both visitorial and enforcement power over labor standards
cases, and is therefore empowered to adjudicate money claims,
provided there still exists an employer-employee relationship,
and the findings of the regional office is not contested by the
employer concerned.
Prior to the promulgation of E.O. No. 111 on December 24,
1986, the Regional Director's authority over money claims was
unclear. The complaint in the present case was filed on May
23, 1986 when E.O. No. 111 was not yet in effect, and the
prevailing view was that stated in the case of Antonio Ong, Sr.
vs. Henry M. Parel, et al., G.R. No. 76710, dated December
21, 1987, thus:
. . . the Regional Director, in the exercise of his visitorial and
enforcement powers under Article 128 of the Labor Code, has
no authority to award money claims, properly falling within
the jurisdiction of the labor arbiter. . . .
. . . If the inspection results in a finding that the employer has
violated certain labor standard laws, then the regional director
must order the necessary rectifications. However, this does not
include adjudication of money claims, clearly within the ambit
of the labor arbiter's authority under Article 217 of the Code.
The Ong case relied on the ruling laid down in Zambales Base
Metals Inc. vs. The Minister of Labor, et al., (G.R. Nos. 73184-
88, November 26, 1986, 146 SCRA 50) that the "Regional
Director was not empowered to share in the original and
exclusive jurisdiction conferred on Labor Arbiters by Article
217."
We believe, however, that even in the absence of E. O. No.
111, Regional Directors already had enforcement powers over
money claims, effective under P.D. No. 850, issued on
December 16, 1975, which transferred labor standards cases
from the arbitration system to the enforcement system.
To clarify matters, it is necessary to enumerate a series of rules
and provisions of law on the disposition of labor standards
cases.
Prior to the promulgation of PD 850, labor standards cases
were an exclusive function of labor arbiters, under Article 216
of the then Labor Code (PD No. 442, as amended by PD 570-
a), which read in part:
Art. 216. Jurisdiction of the Commission. — The Commission
shall have exclusive appellate jurisdiction over all cases
decided by the Labor Arbiters and compulsory arbitrators.
The Labor Arbiters shall have exclusive jurisdiction to hear
and decide the following cases involving all workers whether
agricultural or non-agricultural.
xxx xxx xxx
(c) All money claims of workers, involving non-payment or
underpayment of wages, overtime compensation, separation
pay, maternity leave and other money claims arising from
employee-employer relations, except claims for workmen's
compensation, social security and medicare benefits;
(d) Violations of labor standard laws;
xxx xxx xxx
(Emphasis supplied)
The Regional Director exercised visitorial rights only under
then Article 127 of the Code as follows:
ART. 127. Visitorial Powers. — The Secretary of Labor or his
duly authorized representatives, including, but not restricted,
to the labor inspectorate, shall have access to employers'
records and premises at any time of the day or night whenever
work is being undertaken therein, and the right to copy
therefrom, to question any employee and investigate any fact,
condition or matter which may be necessary to determine
violations or in aid in the enforcement of this Title and of any
Wage Order or regulation issued pursuant to this Code.
With the promulgation of PD 850, Regional Directors were
given enforcement powers, in addition to visitorial powers.
Article 127, as amended, provided in part:
SEC. 10. Article 127 of the Code is hereby amended to read as
follows:
Art. 127. Visitorial and enforcement powers. —
xxx xxx xxx
(b) The Secretary of Labor or his duly authorized
representatives shall have the power to order and administer,
after due notice and hearing, compliance with the labor
standards provisions of this Code based on the findings of
labor regulation officers or industrial safety engineers made in
the course of inspection, and to issue writs of execution to the
appropriate authority for the enforcement of their order.
xxx xxx xxx
Labor Arbiters, on the other hand, lost jurisdiction over labor
standards cases. Article 216, as then amended by PD 850,
provided in part:
SEC. 22. Article 216 of the Code is hereby amended to read as
follows:
Art. 216. Jurisdiction of Labor Arbiters and the Commission.
— (a) The Labor Arbiters shall have exclusive jurisdiction to
hear and decide the following cases involving all workers,
whether agricultural or non-agricultural:
xxx xxx xxx
(3) All money claims of workers involving non-payment or
underpayment of wages, overtime or premium compensation,
maternity or service incentive leave, separation pay and other
money claims arising from employer-employee relations,
except claims for employee's compensation, social security
and medicare benefits and as otherwise provided in Article 127
of this Code.
xxx xxx xxx
(Emphasis supplied)
Under the then Labor Code therefore (PD 442 as amended by
PD 570-a, as further amended by PD 850), there were three
adjudicatory units: The Regional Director, the Bureau of
Labor Relations and the Labor Arbiter. It became necessary to
clarify and consolidate all governing provisions on jurisdiction
into one document. 2 On April 23, 1976, MOLE Policy
Instructions No. 6 was issued, and provides in part (on labor
standards cases) as follows:
POLICY INSTRUCTIONS NO. 6
TO: All Concerned
SUBJECT: DISTRIBUTION OF JURISDICTION OVER
LABOR CASES
xxx xxx xxx
1. The following cases are under the exclusive original
jurisdiction of the Regional Director.
a) Labor standards cases arising from violations of labor
standard laws discovered in the course of inspection or
complaints where employer-employee relations still exist;
xxx xxx xxx
2. The following cases are under the exclusive original
jurisdiction of the Conciliation Section of the Regional Office:
a) Labor standards cases where employer-employee relations
no longer exist;
xxx xxx xxx
6. The following cases are certifiable to the Labor Arbiters:
a) Cases not settled by the Conciliation Section of the Regional
Office, namely:
1) labor standard cases where employer-employee relations no
longer exist;
xxx xxx xxx
(Emphasis supplied)
MOLE Policy Instructions No. 7 (undated) was likewise
subsequently issued, enunciating the rationale for, and the
scope of, the enforcement power of the Regional Director, the
first and second paragraphs of which provide as follows:
POLICY INSTRUCTIONS NO. 7
TO: All Regional Directors
SUBJECT: LABOR STANDARDS CASES
Under PD 850, labor standards cases have been taken from
the arbitration system and placed under the enforcement
system, except where a) questions of law are involved as
determined by the Regional Director, b) the amount involved
exceeds P100,000.00 or over 40% of the equity of the
employer, whichever is lower, c) the case requires evidentiary
matters not disclosed or verified in the normal course of
inspection, or d) there is no more employer-employee
relationship.
The purpose is clear: to assure the worker the rights and
benefits due to him under labor standards laws without having
to go through arbitration. The worker need not litigate to get
what legally belongs to him. The whole enforcement
machinery of the Department of Labor exists to insure its
expeditious delivery to him free of charge. (Emphasis
supplied)
Under the foregoing, a complaining employee who was denied
his rights and benefits due him under labor standards law need
not litigate. The Regional Director, by virtue of his
enforcement power, assured "expeditious delivery to him of
his rights and benefits free of charge", provided of course, he
was still in the employ of the firm.
After PD 850, Article 216 underwent a series of amendments
(aside from being re-numbered as Article 217) and with it a
corresponding change in the jurisdiction of, and supervision
over, the Labor Arbiters:
1. PD 1367 (5-1-78) — gave Labor Arbiters exclusive
jurisdiction over unresolved issues in collective bargaining,
etc., and those cases arising from employer-employee relations
duly indorsed by the Regional Directors. (It also removed his
jurisdiction over moral or other damages) In other words, the
Labor Arbiter entertained cases certified to him. (Article 228,
1978 Labor Code.)
2. PD 1391 (5-29-78) — all regional units of the National
Labor Relations Commission (NLRC) were integrated into the
Regional Offices Proper of the Ministry of Labor; effectively
transferring direct administrative control and supervision over
the Arbitration Branch to the Director of the Regional Office
of the Ministry of Labor. "Conciliable cases" which were thus
previously under the jurisdiction of the defunct Conciliation
Section of the Regional Office for purposes of conciliation or
amicable settlement, became immediately assignable to the
Arbitration Branch for joint conciliation and compulsory
arbitration. In addition, the Labor Arbiter had jurisdiction
even over termination and labor-standards cases that may be
assigned to them for compulsory arbitration by the Director of
the Regional Office. PD 1391 merged conciliation and
compulsory arbitration functions in the person of the Labor
Arbiter. The procedure governing the disposition of cases at
the Arbitration Branch paralleled those in the Special Task
Force and Field Services Division, with one major exception:
the Labor Arbiter exercised full and untrammelled authority in
the disposition of the case, particularly in the substantive
aspect, his decisions and orders subject to review only on
appeal to the NLRC. 3
3. MOLE Policy Instructions No. 37 — Because of the
seemingly overlapping functions as a result of PD 1391,
MOLE Policy Instructions No. 37 was issued on October 7,
1978, and provided in part:
POLICY INSTRUCTIONS NO. 37
TO: All Concerned
SUBJECT: ASSIGNMENT OF CASES TO LABOR
ARBITERS
Pursuant to the provisions of Presidential Decree No. 1391 and
to insure speedy disposition of labor cases, the following
guidelines are hereby established for the information and
guidance of all concerned.
1. Conciliable Cases.
Cases which are conciliable per se i.e., (a) labor standards
cases where employer-employee relationship no longer exists;
(b) cases involving deadlock in collective bargaining, except
those falling under P.D. 823, as amended; (c) unfair labor
practice cases; and (d) overseas employment cases, except
those involving overseas seamen, shall be assigned by the
Regional Director to the Labor Arbiter for conciliation and
arbitration without coursing them through the conciliation
section of the Regional Office.
2. Labor Standards Cases.
Cases involving violation of labor standards laws where
employer- employee relationship still exists shall be assigned
to the Labor Arbiters where:
a) intricate questions of law are involved; or
b) evidentiary matters not disclosed or verified in the normal
course of inspection by labor regulations officers are required
for their proper disposition.
3. Disposition of Cases.
When a case is assigned to a Labor Arbiter, all issues raised
therein shall be resolved by him including those which are
originally cognizable by the Regional Director to avoid
multiplicity of proceedings. In other words, the whole case,
and not merely issues involved therein, shall be assigned to
and resolved by him.
xxx xxx xxx
(Emphasis supplied)
4. PD 1691(5-1-80) — original and exclusive jurisdiction over
unresolved issues in collective bargaining and money claims,
which includes moral or other damages.
Despite the original and exclusive jurisdiction of labor arbiters
over money claims, however, the Regional Director
nonetheless retained his enforcement power, and remained
empowered to adjudicate uncontested money claims.
5. BP 130 (8-21-8l) — strengthened voluntary arbitration. The
decree also returned the Labor Arbiters as part of the NLRC,
operating as Arbitration Branch thereof.
6. BP 227(6-1- 82) — original and exclusive jurisdiction over
questions involving legality of strikes and lock-outs.
The present petition questions the authority of the Regional
Director to issue the Order, dated August 4, 1986, on the basis
of his visitorial and enforcement powers under Article 128
(formerly Article 127) of the present Labor Code. It is
contended that based on the rulings in the Ong vs. Parel
(supra) and the Zambales Base Metals, Inc. vs. The Minister
of Labor (supra) cases, a Regional Director is precluded from
adjudicating money claims on the ground that this is an
exclusive function of the Labor Arbiter under Article 217 of
the present Code.
On August 4, 1986, when the order was issued, Article 128(b)
4
read as follows:
(b) The Minister of Labor or his duly authorized
representatives shall have the power to order and administer,
after due notice and hearing, compliance with the labor
standards provisions of this Code based on the findings of
labor regulation officers or industrial safety engineers made in
the course of inspection, and to issue writs of execution to the
appropriate authority for the enforcement of their order, except
in cases where the employer contests the findings of the labor
regulations officer and raises issues which cannot be resolved
without considering evidentiary matters that are not verifiable
in the normal course of inspection. (Emphasis supplied)
On the other hand, Article 217 of the Labor Code as amended
by P.D. 1691, effective May 1, 1980; Batas Pambansa Blg.
130, effective August 21, 1981; and Batas Pambansa Blg. 227,
effective June 1, 1982, inter alia, provides:
ART. 217. Jurisdiction of Labor Arbiters and the Commission.
— (a) The Labor Arbiters shall have the original and exclusive
jurisdiction to hear and decide within thirty (30) working days
after submission of the case by the parties for decision, the
following cases involving all workers, whether agricultural or
non-agricultural:
1. Unfair labor practice cases;
2. Those that workers may file involving wages, hours of work
and other terms and conditions of employment;
3. All money claims of workers, including those based on non-
payment or underpayment of wages, overtime compensation,
separation pay and other benefits provided by law or
appropriate agreement, except claims for employees'
compensation, social security, medicare and maternity
benefits;
4. Cases involving household services; and
5. Cases arising from any violation of Article 265 of this Code,
including questions involving the legality of strikes and lock-
outs. (Emphasis supplied)
The Ong and Zambales cases involved workers who were still
connected with the company. However, in the Ong case, the
employer disputed the adequacy of the evidentiary foundation
(employees' affidavits) of the findings of the labor standards
inspectors while in the Zambales case, the money claims
which arose from alleged violations of labor standards
provisions were not discovered in the course of normal
inspection. Thus, the provisions of MOLE Policy Instructions
Nos. 6, (Distribution of Jurisdiction Over Labor Cases) and 37
(Assignment of Cases to Labor Arbiters) giving Regional
Directors adjudicatory powers over uncontested money claims
discovered in the course of normal inspection, provided an
employer-employee relationship still exists, are inapplicable.
In the present case, petitioner admitted the charge of
underpayment of wages to workers still in its employ; in fact,
it pleaded for time to raise funds to satisfy its obligation. There
was thus no contest against the findings of the labor inspectors.
Barely less than a month after the promulgation on November
26, 1986 of the Zambales Base Metals case, Executive Order
No. 111 was issued on December 24, 1986,5 amending Article
128(b) of the Labor Code, to read as follows:
(b) THE PROVISIONS OF ARTICLE 217 OF THIS CODE
TO THE CONTRARY NOTWITHSTANDING AND IN
CASES WHERE THE RELATIONSHIP OF EMPLOYER-
EMPLOYEE STILL EXISTS, the Minister of Labor and
Employment or his duly authorized representatives shall have
the power to order and administer, after due notice and
hearing, compliance with the labor standards provisions of this
Code AND OTHER LABOR LEGISLATION based on the
findings of labor regulation officers or industrial safety
engineers made in the course of inspection, and to issue writs
of execution to the appropriate authority for the enforcement
of their orders, except in cases where the employer contests the
findings of the labor regulation officer and raises issues which
cannot be resolved without considering evidentiary matters
that are not verifiable in the normal course of inspection.
(Emphasis supplied)
As seen from the foregoing, EO 111 authorizes a Regional
Director to order compliance by an employer with labor
standards provisions of the Labor Code and other legislation.
It is Our considered opinion however, that the inclusion of the
phrase, " The provisions of Article 217 of this Code to the
contrary notwithstanding and in cases where the relationship
of employer-employee still exists" ... in Article 128(b), as
amended, above-cited, merely confirms/reiterates the
enforcement adjudication authority of the Regional Director
over uncontested money claims in cases where an employer-
employee relationship still exists. 6
Viewed in the light of PD 850 and read in coordination with
MOLE Policy Instructions Nos. 6, 7 and 37, it is clear that it
has always been the intention of our labor authorities to
provide our workers immediate access (when still feasible, as
where an employer-employee relationship still exists) to their
rights and benefits, without being inconvenienced by
arbitration/litigation processes that prove to be not only nerve-
wracking, but financially burdensome in the long run.
Note further the second paragraph of Policy Instructions No. 7
indicating that the transfer of labor standards cases from the
arbitration system to the enforcement system is
. . to assure the workers the rights and benefits due to him
under labor standard laws, without having to go through
arbitration. . .
so that
. . the workers would not litigate to get what legally belongs to
him. .. ensuring delivery . . free of charge.
Social justice legislation, to be truly meaningful and rewarding
to our workers, must not be hampered in its application by
long-winded arbitration and litigation. Rights must be asserted
and benefits received with the least inconvenience. Labor laws
are meant to promote, not defeat, social justice.
This view is in consonance with the present "Rules on the
Disposition of Labor Standard Cases in the Regional Offices "
7
issued by the Secretary of Labor, Franklin M. Drilon on
September 16, 1987.
Thus, Sections 2 and 3 of Rule II on "Money Claims Arising
from Complaint Routine Inspection", provide as follows:
Section 2. Complaint inspection. — All such complaints shall
immediately be forwarded to the Regional Director who shall
refer the case to the appropriate unit in the Regional Office for
assignment to a Labor Standards and Welfare Officer (LSWO)
for field inspection. When the field inspection does not
produce the desired results, the Regional Director shall
summon the parties for summary investigation to expedite the
disposition of the case. . . .
Section 3. Complaints where no employer-employee
relationship actually exists. — Where employer-employee
relationship no longer exists by reason of the fact that it has
already been severed, claims for payment of monetary benefits
fall within the exclusive and original jurisdiction of the labor
arbiters. . . . (Emphasis supplied)
Likewise, it is also clear that the limitation embodied in MOLE
Policy Instructions No. 7 to amounts not exceeding
P100,000.00 has been dispensed with, in view of the following
provisions of pars. (b) and (c), Section 7 on "Restitution", the
same Rules, thus:
xxx xxx xxx
(b) Plant-level restitutions may be effected for money claims
not exceeding Fifty Thousand (P50,000.00). . . .
(c) Restitutions in excess of the aforementioned amount shall
be effected at the Regional Office or at the worksite subject to
the prior approval of the Regional Director.
which indicate the intention to empower the Regional Director
to award money claims in excess of P100,000.00; provided of
course the employer does not contest the findings made, based
on the provisions of Section 8 thereof:
Section 8. Compromise agreement. — Should the parties
arrive at an agreement as to the whole or part of the dispute,
said agreement shall be reduced in writing and signed by the
parties in the presence of the Regional Director or his duly
authorized representative.
E.O. No. 111 was issued on December 24, 1986 or three (3)
months after the promulgation of the Secretary of Labor's
decision upholding private respondents' salary differentials
and ECOLAs on September 24, 1986. The amendment of the
visitorial and enforcement powers of the Regional Director
(Article 128-b) by said E.O. 111 reflects the intention
enunciated in Policy Instructions Nos. 6 and 37 to empower
the Regional Directors to resolve uncontested money claims in
cases where an employer-employee relationship still exists.
This intention must be given weight and entitled to great
respect. As held in Progressive Workers' Union, et. al. vs. F.P.
Aguas, et. al. G.R. No. 59711-12, May 29, 1985, 150 SCRA
429:
. . The interpretation by officers of laws which are entrusted to
their administration is entitled to great respect. We see no
reason to detract from this rudimentary rule in administrative
law, particularly when later events have proved said
interpretation to be in accord with the legislative intent. ..
The proceedings before the Regional Director must, perforce,
be upheld on the basis of Article 128(b) as amended by E.O.
No. 111, dated December 24, 1986, this executive order "to be
considered in the nature of a curative statute with retrospective
application." (Progressive Workers' Union, et al. vs. Hon. F.P.
Aguas, et al. (Supra); M. Garcia vs. Judge A. Martinez, et al.,
G.R. No. L- 47629, May 28, 1979, 90 SCRA 331).
We now come to the question of whether or not the Regional
Director erred in extending the award to all hospital
employees. We answer in the affirmative.
The Regional Director correctly applied the award with respect
to those employees who signed the complaint, as well as those
who did not sign the complaint, but were still connected with
the hospital at the time the complaint was filed (See Order, p.
33 dated August 4, 1986 of the Regional Director, Pedrito de
Susi, p. 33, Rollo).
The justification for the award to this group of employees who
were not signatories to the complaint is that the visitorial and
enforcement powers given to the Secretary of Labor is relevant
to, and exercisable over establishments, not over the individual
members/employees, because what is sought to be achieved by
its exercise is the observance of, and/or compliance by, such
firm/establishment with the labor standards regulations.
Necessarily, in case of an award resulting from a violation of
labor legislation by such establishment, the entire
members/employees should benefit therefrom. As aptly stated
by then Minister of Labor Augusto S. Sanchez:
. . It would be highly derogatory to the rights of the workers,
if after categorically finding the respondent hospital guilty of
underpayment of wages and ECOLAs, we limit the award to
only those who signed the complaint to the exclusion of the
majority of the workers who are similarly situated. Indeed, this
would be not only render the enforcement power of the
Minister of Labor and Employment nugatory, but would be the
pinnacle of injustice considering that it would not only
discriminate but also deprive them of legislated benefits.
. . . (pp. 38-39, Rollo).
This view is further bolstered by the provisions of Sec. 6, Rule
II of the "Rules on the Disposition of Labor Standards cases in
the Regional Offices" (supra) presently enforced, viz:
SECTION 6. Coverage of complaint inspection. — A
complaint inspection shall not be limited to the specific
allegations or violations raised by the complainants/workers
but shall be a thorough inquiry into and verification of the
compliance by employer with existing labor standards and
shall cover all workers similarly situated. (Emphasis supplied)
However, there is no legal justification for the award in favor
of those employees who were no longer connected with the
hospital at the time the complaint was filed, having resigned
therefrom in 1984, viz:
1 Gancayco, Padilla, Bidin, Cortes, Griño-Aquino and
2 Jean (Joan) Venzon (See Order, p. 33,
Rollo)
3
4 Rosario Paclijan
5 vs.
6 Adela Peralta
7 AIRLINES EMPLOYEES ASSOCIATION, and THE
8 Mauricio Nagales
9 Fortunato Gupit, Jr., Solon R. Garcia, Rene B. Gorospe,
10 Consesa Bautista
11
12 Teresita Agcopra
13
14 Felix Monleon
15
16 Teresita Salvador
17
18 Edgar Cataluna; and
19
10. Raymond Manija ( p.7, Rollo)
The enforcement power of the Regional Director cannot
legally be upheld in cases of separated employees. Article
129 of the Labor Code, cited by petitioner (p. 54, Rollo) is
not applicable as said article is in aid of the enforcement
power of the Regional Director; hence, not applicable where
the employee seeking to be paid underpayment of wages is
already separated from the service. His claim is purely a
money claim that has to be the subject of arbitration
proceedings and therefore within the original and exclusive
jurisdiction of the Labor Arbiter.
Petitioner has likewise questioned the order dated August 4,
1986 of the Regional Director in that it does not clearly and
distinctly state the facts and the law on which the award is
based.
We invite attention to the Minister of Labor's ruling thereon,
as follows:
Finally, the respondent hospital assails the order under appeal
as null and void because it does not clearly and distinctly
state the facts and the law on which the awards were based.
Contrary to the pretensions of the respondent hospital, we
have carefully reviewed the order on appeal and we found
that the same contains a brief statement of the (a) facts of the
case; (b) issues involved; (c) applicable laws; (d) conclusions
and the reasons therefor; (e) specific remedy granted (amount
awarded). (p. 40, Rollo)
ACCORDINGLY, this petition should be dismissed, as it is
hereby DISMISSED, as regards all persons still employed in
the Hospital at the time of the filing of the complaint, but
GRANTED as regards those employees no longer employed
at that time.
SO ORDERED.
Fernan, C.J., Narvasa, Gutierrez, Jr., Cruz, Paras, Feliciano,
Regalado, JJ., concur.
G.R. No. 77875 February 4, 1993
PHILIPPINE AIRLINES, INC., petitioner,
ALBERTO SANTOS, JR., HOUDIEL MAGADIA,
GILBERT ANTONIO, REGINO DURAN, PHILIPPINE
NATIONAL LABOR RELATIONS COMMISSION,
respondents.
Bienvinodo T. Jamoralin, jr. and Paulino D. Ungos, Jr. for
petitioner.
Adolpho M. Guerzon for private respondents.
REGALADO, J.:
The instant petition for certiorari seeks to set aside the
decision of The National Labor Relations Commission
(NLRC) in NLRC Case No. 4-1206-85, promulgated on
December 11, 1986,1 containing the following disposition:
WHEREFORE, in view of the foregoing consideration, the
Decision appealed from is set aside and another one entered,
declaring the suspension of complainants to be illegal and
consequently, respondent PAL is directed to pay complainants
their salaries corresponding to the respective period(s) of their
suspension, and to delete the disciplinary action from
complainants' service records.2
These material facts recited in the basic petition are virtually
undisputed and we reproduce the same hereunder:
1. Individual respondents are all Port Stewards of Catering
Sub-Department, Passenger Services Department of
petitioner. Their duties and responsibilities, among others, are:
Prepares meal orders and checklists, setting up standard
equipment in accordance with the requirements of the type of
service for each flight; skiing, binning, and inventorying of
Commissary supplies and equipment.
2. On various occasions, several deductions were made from
their salary. The deductions represented losses of inventoried
items charged to them for mishandling of company properties
. . . which respondents resented. Such that on August 21, 1984,
individual respondents, represented by the union, made a
formal notice regarding the deductions to petitioner thru Mr.
Reynaldo Abad, Manager for Catering. . . .
3. As there was no action taken on said representation, private
respondents filed a formal grievance on November 4, 1984
pursuant to the grievance machinery Step 1 of the Collective
Bargaining Agreement between petitioner and the union. . . .
The topics which the union wanted to be discussed in the said
grievance were the illegal/questionable salary deductions and
inventory of bonded goods and merchandise being done by
catering service personnel which they believed should not be
their duty.
4. The said grievance was submitted on November 21, 1984 to
the office of Mr. Reynaldo Abad, Manager for Catering, who
at the time was on vacation leave. . . .
5. Subsequently, the grievants (individual respondents) thru
the shop steward wrote a letter on December 5, 1984 addressed
to the office of Mr. Abad, who was still on leave at the time,
that inasmuch as no reply was made to their grievance which
"was duly received by your secretary" and considering that
petitioner had only five days to resolve the grievance as
provided for in the CBA, said grievance as believed by them
(private respondents) was deemed resolved in their favor. . . .
6. Upon Mr. Abad's return on December 7, 1984, he
immediately informed the grievants and scheduled a meeting
on December 12, 1984. . . .
7. Thereafter, the individual respondents refused to conduct
inventory works. Alberto Santos, Jr. did not conduct ramp
inventory on December 7, 10 and 12. Gilbert Antonio did not
conduct ramp inventory on December 10. In like manner,
Regino Duran and Houdiel Magadia did not conduct the same
on December 10 and 12.
8. At the grievance meeting which was attended by some union
representatives, Mr. Abad resolved the grievance by denying
the petition of individual respondents and adopted the position
that inventory of bonded goods is part of their duty as catering
service personnel, and as for the salary deductions for losses,
he rationalized:
1. It was only proper that employees are charged for the
amount due to mishandling of company property which
resulted to losses. However, loss may be cost price 1/10 selling
price.
9. As there was no ramp inventory conducted on the mentioned
dates, Mr. Abad, on January 3, 1985 wrote by an inter-office
memorandum addressed to the grievants, individual
respondents herein, for them to explain on (sic) why no
disciplinary action should be taken against them for not
conducting ramp inventory. . . .
10. The directive was complied with . . . . The reason for not
conducting ramp inventory was put forth as:
4. Since the grievance step 1 was not decided and no action
was done by your office within 5 days from November 21,
1984, per provision of the PAL-PALEA CBA, Art. IV, Sec. 2,
the grievance is deemed resolved in PALEA's favor.
11. Going over the explanation, Mr. Abad found the same
unsatisfactory. Thus, a penalty of suspension ranging from 7
days to 30 days were (sic) imposed depending on the number
of infractions committed. *
12. After the penalty of suspension was meted down, PALEA
filed another grievance asking for lifting of, or at least, holding
in abeyance the execution of said penalty. The said grievance
was forthwith denied but the penalty of suspension with
respect to respondent Ramos was modified, such that his
suspension which was originally from January 15, 1985 to
April 5, 1985 was shortened by one month and was lifted on
March 5, 1985. The union, however, made a demand for the
reimbursement of the salaries of individual respondents during
the period of their suspension.
13. Petitioner stood pat (o)n the validity of the suspensions.
Hence, a complaint for illegal suspension was filed before the
Arbitration Branch of the Commission, . . . Labor Arbiter
Ceferina J. Diosana, on March 17, 1986, ruled in favor of
petitioner by dismissing the complaint. . . .3
Private respondents appealed the decision of the labor arbiter
to respondent commission which rendered the aforequoted
decision setting aside the labor arbiter's order of dismissal.
Petitioner's motion for reconsideration having been denied, it
interposed the present petition.
The Court is accordingly called upon to resolve the issue of
whether or not public respondent NLRC acted with grave
abuse of discretion amounting to lack of jurisdiction in
rendering the aforementioned decision.
Evidently basic and firmly settled is the rule that judicial
review by this Court in labor cases does not go so far as to
evaluate the sufficiency of the evidence upon which the labor
officer or office based his or its determination, but is limited
to issues of jurisdiction and grave abuse of discretion.4 It has
not been shown that respondent NLRC has unlawfully
neglected the performance of an act which the law
specifically enjoins it to perform as a duty or has otherwise
unlawfully excluded petitioner from the exercise of a right to
which it is entitled.
The instant case hinges on the interpretation of Section 2,
Article IV of the PAL-PALEA Collective Bargaining
Agreement, (hereinafter, CBA), to wit:
Sec. 2 — Processing of Grievances
xxx xxx xxx
STEP 1 — Any employee who believes that he has a
justifiable grievance shall take the matter up with his shop
steward. If the shop steward feels there is justification for
taking the matter up with the Company, he shall record the
grievance on the grievance form heretofore agreed upon by
the parties. Two (2) copies of the grievance form properly
filled, accepted, and signed shall then be presented to and
discussed by the shop steward with the division head. The
division head shall answer the grievance within five (5) days
from the date of presentation by inserting his decision on the
grievance form, signing and dating same, and returning one
copy to the shop steward. If the division head fails to act
within the five (5)-day regl(e)mentary period, the grievance
must be resolved in favor of the aggrieved party. If the
division head's decision is not appealed to Step II, the
grievance shall be considered settled on the basis of the
decision made, and shall not be eligible for further appeal.5
(Emphasis ours.)
Petitioner submits that since the grievance machinery was
established for both labor and management as a vehicle to
thresh out whatever problems may arise in the course of their
relationship, every employee is duty bound to present the
matter before management and give the latter an opportunity
to impose whatever corrective measure is possible. Under
normal circumstances, an employee should not preempt the
resolution of his grievance; rather, he has the duty to observe
the status quo.6
Citing Section 1, Article IV of the CBA, petitioner further
argues that respondent employees have the obligation, just as
management has, to settle all labor disputes through friendly
negotiations. Thus, Section 2 of the CBA should not be
narrowly interpreted. 7 Before the prescriptive period of five
days begins to run, two concurrent requirements must be met,
i.e., presentment of the grievance and its discussion between
the shop steward and the division head who in this case is
Mr. Abad. Section 2 is not self-executing; the mere filing of
the grievance does not trigger the tolling of the prescriptive
period.8
Petitioner has sorely missed the point.
It is a fact that the sympathy of the Court is on the side of the
laboring classes, not only because the Constitution imposes
such sympathy, but because of the one-sided relation between
labor and capital.9 The constitutional mandate for the
promotion of labor is as explicit as it is demanding. The
purpose is to place the workingman on an equal plane with
management — with all its power and influence — in
negotiating for the advancement of his interests and the
defense of his rights.10 Under the policy of social justice, the
law bends over backward to accommodate the interests of the
working class on the humane justification that those with less
privileges in life should have more privileges in law. 11
It is clear that the grievance was filed with Mr. Abad's
secretary during his absence.12 Under Section 2 of the CBA
aforequoted, the division head shall act on the grievance
within five (5) days from the date of presentation thereof,
otherwise "the grievance must be resolved in favor of the
aggrieved party." It is not disputed that the grievants knew
that division head Reynaldo Abad was then "on leave" when
they filed their grievance which was received by Abad's
secretary.13 This knowledge, however, should not prevent the
application of the CBA.
On this score, respondent NLRC aptly ruled:
. . . Based on the facts heretofore narrated, division head
Reynaldo Abad had to act on the grievance of complainants
within five days from 21 November 1984. Therefore, when
Reynaldo Abad, failed to act within the reglementary period,
complainants, believing in good faith that the effect of the
CBA had already set in, cannot be blamed if they did not
conduct ramp inventory for the days thereafter. In this regard,
respondent PAL argued that Reynaldo Abad was on leave at
the time the grievance was presented. This, however, is of no
moment, for it is hard to believe that everything under Abad's
authority would have to stand still during his absence from
office. To be sure, it is to be expected that someone has to be
left to attend to Abad's duties. Of course, this may be a
product of inadvertence on the part of PAL management, but
certainly, complainants should not be made to suffer the
consequences. 14
Contrary to petitioner's submission,15 the grievance of
employees is not a matter which requires the personal act of
Mr. Abad and thus could not be delegated. Petitioner could at
least have assigned an officer-in-charge to look into the
grievance and possibly make his recommendation to Mr.
Abad. It is of no moment that Mr. Abad immediately looked
into the grievance upon returning to work, for it must be
remembered that the grievants are workingmen who suffered
salary deductions and who rely so much on their meager
income for their daily subsistence and survival. Besides, it is
noteworthy that when these employees first presented their
complaint on August 21, 1984, petitioner failed to act on it. It
was only after a formal grievance was filed and after Mr.
Abad returned to work on December 7, 1984 that petitioner
decided to turn an ear to their plaints.
As respondent NLRC has pointed out, Abad's failure to act
on the matter may have been due to petitioner's
inadvertence,16 but it is clearly too much of an injustice if the
employees be made to bear the dire effects thereof. Much as
the latter were willing to discuss their grievance with their
employer, the latter closed the door to this possibility by not
assigning someone else to look into the matter during Abad's
absence. Thus, private respondents should not be faulted for
believing that the effects of the CBA in their favor had
already stepped into the controversy.
If the Court were to follow petitioner's line of reasoning, it
would be easy for management to delay the resolution of
labor problems, the complaints of the workers in particular,
and hide under the cloak of its officers being "on leave" to
avoid being caught by the 5-day deadline under the CBA. If
this should be allowed, the workingmen will suffer great
injustice for they will necessarily be at the mercy of their
employer. That could not have been the intendment of the
pertinent provision of the CBA, much less the benevolent
policy underlying our labor laws.
ACCORDINGLY, on the foregoing premises, the instant
petition is hereby DENIED and the assailed decision of
respondent National Labor Relations Commission is
AFFIRMED. This judgment is immediately executory.
SO ORDERED.
Narvasa, C.J., Feliciano, Nocon and Campos, Jr., JJ., concur.
G.R. No. 167614 March 24, 2009
ANTONIO M. SERRANO, Petitioner,
vs.
Gallant MARITIME SERVICES, INC. and
MARLOW NAVIGATION CO., INC., Respondents.
DECISION
AUSTRIA-MARTINEZ, J.:
For decades, the toil of solitary migrants has helped lift
entire families and communities out of poverty. Their
earnings have built houses, provided health care,
equipped schools and planted the seeds of businesses.
They have woven together the world by transmitting
ideas and knowledge from country to country. They have
provided the dynamic human link between cultures,
societies and economies. Yet, only recently have we
begun to understand not only how much international
migration impacts development, but how smart public
policies can magnify this effect.
United Nations Secretary-General Ban Ki-Moon
Global Forum on Migration and Development
Brussels, July 10, 20071
For Antonio Serrano (petitioner), a Filipino seafarer, the
last clause in the 5th paragraph of Section 10, Republic
Act (R.A.) No. 8042,2 to wit:
Sec. 10. Money Claims. - x x x In case of termination of
overseas employment without just, valid or authorized
cause as defined by law or contract, the workers shall be
entitled to the full reimbursement of his placement fee
with interest of twelve percent (12%) per annum, plus his
salaries for the unexpired portion of his employment
contract or for three (3) months for every year of the
unexpired term, whichever is less.
x x x x (Emphasis and underscoring supplied)
does not magnify the contributions of overseas Filipino
workers (OFWs) to national development, but
exacerbates the hardships borne by them by unduly
limiting their entitlement in case of illegal dismissal to
their lump-sum salary either for the unexpired portion of
their employment contract "or for three months for every
year of the unexpired term, whichever is less" (subject
clause). Petitioner claims that the last clause violates the
OFWs' constitutional rights in that it impairs the terms of
their contract, deprives them of equal protection and
denies them due process.
By way of Petition for Review under Rule 45 of the
Rules of Court, petitioner assails the December 8, 2004
Decision3 and April 1, 2005 Resolution4 of the Court of
Appeals (CA), which applied the subject clause,
entreating this Court to declare the subject clause
unconstitutional.
Petitioner was hired by Gallant Maritime Services, Inc.
and Marlow Navigation Co., Ltd. (respondents) under a
Philippine Overseas Employment Administration
(POEA)-approved Contract of Employment with the
following terms and conditions:
Duration of contract
12 months
Position
Chief Officer
Basic monthly salary
US$1,400.00
Hours of work
48.0 hours per week
Overtime
US$700.00 per month
Vacation leave with pay
7.00 days per month5
On March 19, 1998, the date of his departure, petitioner
was constrained to accept a downgraded employment
contract for the position of Second Officer with a
monthly salary of US$1,000.00, upon the assurance and
representation of respondents that he would be made
Chief Officer by the end of April 1998.6
Respondents did not deliver on their promise to make
petitioner Chief Officer.7 Hence, petitioner refused to
stay on as Second Officer and was repatriated to the
Philippines on May 26, 1998.8
Petitioner's employment contract was for a period of 12
months or from March 19, 1998 up to March 19, 1999,
but at the time of his repatriation on May 26, 1998, he
had served only two (2) months and seven (7) days of his
contract, leaving an unexpired portion of nine (9) months
and twenty-three (23) days.
Petitioner filed with the Labor Arbiter (LA) a Complaint9
against respondents for constructive dismissal and for
payment of his money claims in the total amount of
US$26,442.73, broken down as follows:
May 27/31, 1998 (5 days) incl. Leave pay
US$ 413.90
June 01/30, 1998
2,590.00
July 01/31, 1998
2,590.00
August 01/31, 1998
2,590.00
Sept. 01/30, 1998
2,590.00
Oct. 01/31, 1998
2,590.00
Nov. 01/30, 1998
2,590.00
Dec. 01/31, 1998
2,590.00
Jan. 01/31, 1999
2,590.00
Feb. 01/28, 1999
2,590.00
Mar. 1/19, 1999 (19 days) incl. leave pay
1,640.00
---------------------------------------------------------------------
-----------
25,382.23
Amount adjusted to chief mate's salary
(March 19/31, 1998 to April 1/30, 1998) +
1,060.5010
---------------------------------------------------------------------
-------------------------
TOTAL CLAIM
US$ 26,442.7311
as well as moral and exemplary damages and attorney's
fees.
The LA rendered a Decision dated July 15, 1999,
declaring the dismissal of petitioner illegal and awarding
him monetary benefits, to wit:
WHEREFORE, premises considered, judgment is hereby
rendered declaring that the dismissal of the complainant
(petitioner) by the respondents in the above-entitled case
was illegal and the respondents are hereby ordered to pay
the complainant [petitioner], jointly and severally, in
Philippine Currency, based on the rate of exchange
prevailing at the time of payment, the amount of EIGHT
THOUSAND SEVEN HUNDRED SEVENTY U.S.
DOLLARS (US $8,770.00), representing the
complainant’s salary for three (3) months of the
unexpired portion of the aforesaid contract of
employment.1avvphi1
The respondents are likewise ordered to pay the
complainant [petitioner], jointly and severally, in
Philippine Currency, based on the rate of exchange
prevailing at the time of payment, the amount of FORTY
FIVE U.S. DOLLARS (US$ 45.00),12 representing the
complainant’s claim for a salary differential. In addition,
the respondents are hereby ordered to pay the
complainant, jointly and severally, in Philippine
Currency, at the exchange rate prevailing at the time of
payment, the complainant’s (petitioner's) claim for
attorney’s fees equivalent to ten percent (10%) of the
total amount awarded to the aforesaid employee under
this Decision.
The claims of the complainant for moral and exemplary
damages are hereby DISMISSED for lack of merit.
All other claims are hereby DISMISSED.
SO ORDERED.13 (Emphasis supplied)
In awarding petitioner a lump-sum salary of
US$8,770.00, the LA based his computation on the
salary period of three months only -- rather than the
entire unexpired portion of nine months and 23 days of
petitioner's employment contract - applying the subject
clause. However, the LA applied the salary rate of
US$2,590.00, consisting of petitioner's "[b]asic salary,
US$1,400.00/month + US$700.00/month, fixed overtime
pay, + US$490.00/month, vacation leave pay =
US$2,590.00/compensation per month."14
Respondents appealed15 to the National Labor Relations
Commission (NLRC) to question the finding of the LA
that petitioner was illegally dismissed.
Petitioner also appealed16 to the NLRC on the sole issue
that the LA erred in not applying the ruling of the Court
in Triple Integrated Services, Inc. v. National Labor
Relations Commission17 that in case of illegal dismissal,
OFWs are entitled to their salaries for the unexpired
portion of their contracts.18
In a Decision dated June 15, 2000, the NLRC modified
the LA Decision, to wit:
WHEREFORE, the Decision dated 15 July 1999 is
MODIFIED. Respondents are hereby ordered to pay
complainant, jointly and severally, in Philippine
currency, at the prevailing rate of exchange at the time of
payment the following:
1. Three (3) months salary
$1,400 x 3
US$4,200.00
2. Salary differential
45.00
US$4,245.00
3. 10% Attorney’s fees
424.50
TOTAL
US$4,669.50
The other findings are affirmed.
SO ORDERED.19
The NLRC corrected the LA's computation of the lump-
sum salary awarded to petitioner by reducing the
applicable salary rate from US$2,590.00 to US$1,400.00
because R.A. No. 8042 "does not provide for the award
of overtime pay, which should be proven to have been
actually performed, and for vacation leave pay."20
Petitioner filed a Motion for Partial Reconsideration, but
this time he questioned the constitutionality of the
subject clause.21 The NLRC denied the motion.22
Petitioner filed a Petition for Certiorari23 with the CA,
reiterating the constitutional challenge against the subject
clause.24 After initially dismissing the petition on a
technicality, the CA eventually gave due course to it, as
directed by this Court in its Resolution dated August 7,
2003 which granted the petition for certiorari, docketed
as G.R. No. 151833, filed by petitioner.
In a Decision dated December 8, 2004, the CA affirmed
the NLRC ruling on the reduction of the applicable
salary rate; however, the CA skirted the constitutional
issue raised by petitioner.25
His Motion for Reconsideration26 having been denied by
the CA,27 petitioner brings his cause to this Court on the
following grounds:
I
The Court of Appeals and the labor tribunals have
decided the case in a way not in accord with applicable
decision of the Supreme Court involving similar issue of
granting unto the migrant worker back wages equal to
the unexpired portion of his contract of employment
instead of limiting it to three (3) months
II
In the alternative that the Court of Appeals and the Labor
Tribunals were merely applying their interpretation of
Section 10 of Republic Act No. 8042, it is submitted that
the Court of Appeals gravely erred in law when it failed
to discharge its judicial duty to decide questions of
substance not theretofore determined by the Honorable
Supreme Court, particularly, the constitutional issues
raised by the petitioner on the constitutionality of said
law, which unreasonably, unfairly and arbitrarily limits
payment of the award for back wages of overseas
workers to three (3) months.
III
Even without considering the constitutional limitations
[of] Sec. 10 of Republic Act No. 8042, the Court of
Appeals gravely erred in law in excluding from
petitioner’s award the overtime pay and vacation pay
provided in his contract since under the contract they
form part of his salary.28
On February 26, 2008, petitioner wrote the Court to
withdraw his petition as he is already old and sickly, and
he intends to make use of the monetary award for his
medical treatment and medication.29 Required to
comment, counsel for petitioner filed a motion, urging
the court to allow partial execution of the undisputed
monetary award and, at the same time, praying that the
constitutional question be resolved.30
Considering that the parties have filed their respective
memoranda, the Court now takes up the full merit of the
petition mindful of the extreme importance of the
constitutional question raised therein.
On the first and second issues
The unanimous finding of the LA, NLRC and CA that
the dismissal of petitioner was illegal is not disputed.
Likewise not disputed is the salary differential of
US$45.00 awarded to petitioner in all three fora. What
remains disputed is only the computation of the lump-
sum salary to be awarded to petitioner by reason of his
illegal dismissal.
Applying the subject clause, the NLRC and the CA
computed the lump-sum salary of petitioner at the
monthly rate of US$1,400.00 covering the period of
three months out of the unexpired portion of nine months
and 23 days of his employment contract or a total of
US$4,200.00.
Impugning the constitutionality of the subject clause,
petitioner contends that, in addition to the US$4,200.00
awarded by the NLRC and the CA, he is entitled to
US$21,182.23 more or a total of US$25,382.23,
equivalent to his salaries for the entire nine months and
23 days left of his employment contract, computed at the
monthly rate of US$2,590.00.31
The Arguments of Petitioner
Petitioner contends that the subject clause is
unconstitutional because it unduly impairs the freedom of
OFWs to negotiate for and stipulate in their overseas
employment contracts a determinate employment period
and a fixed salary package.32 It also impinges on the equal
protection clause, for it treats OFWs differently from local
Filipino workers (local workers) by putting a cap on the
amount of lump-sum salary to which OFWs are entitled in
case of illegal dismissal, while setting no limit to the same
monetary award for local workers when their dismissal is
declared illegal; that the disparate treatment is not
reasonable as there is no substantial distinction between
the two groups;33 and that it defeats Section 18,34 Article
II of the Constitution which guarantees the protection of
the rights and welfare of all Filipino workers, whether
deployed locally or overseas.35
Moreover, petitioner argues that the decisions of the CA
and the labor tribunals are not in line with existing
jurisprudence on the issue of money claims of illegally
dismissed OFWs. Though there are conflicting rulings on
this, petitioner urges the Court to sort them out for the
guidance of affected OFWs.36
Petitioner further underscores that the insertion of the
subject clause into R.A. No. 8042 serves no other purpose
but to benefit local placement agencies. He marks the
statement made by the Solicitor General in his
Memorandum, viz.:
Often, placement agencies, their liability being solidary,
shoulder the payment of money claims in the event that
jurisdiction over the foreign employer is not acquired by
the court or if the foreign employer reneges on its
obligation. Hence, placement agencies that are in good
faith and which fulfill their obligations are unnecessarily
penalized for the acts of the foreign employer. To protect
them and to promote their continued helpful contribution
in deploying Filipino migrant workers, liability for money
claims was reduced under Section 10 of R.A. No. 8042. 37
(Emphasis supplied)
Petitioner argues that in mitigating the solidary liability of
placement agencies, the subject clause sacrifices the well-
being of OFWs. Not only that, the provision makes
foreign employers better off than local employers because
in cases involving the illegal dismissal of employees,
foreign employers are liable for salaries covering a
maximum of only three months of the unexpired
employment contract while local employers are liable for
the full lump-sum salaries of their employees. As
petitioner puts it:
In terms of practical application, the local employers are
not limited to the amount of backwages they have to give
their employees they have illegally dismissed, following
well-entrenched and unequivocal jurisprudence on the
matter. On the other hand, foreign employers will only be
limited to giving the illegally dismissed migrant workers
the maximum of three (3) months unpaid salaries
notwithstanding the unexpired term of the contract that
can be more than three (3) months.38
Lastly, petitioner claims that the subject clause violates
the due process clause, for it deprives him of the salaries
and other emoluments he is entitled to under his fixed-
period employment contract.39
The Arguments of Respondents
In their Comment and Memorandum, respondents
contend that the constitutional issue should not be
entertained, for this was belatedly interposed by petitioner
in his appeal before the CA, and not at the earliest
opportunity, which was when he filed an appeal before the
NLRC.40
The Arguments of the Solicitor General
The Solicitor General (OSG)41 points out that as R.A. No.
8042 took effect on July 15, 1995, its provisions could not
have impaired petitioner's 1998 employment contract.
Rather, R.A. No. 8042 having preceded petitioner's
contract, the provisions thereof are deemed part of the
minimum terms of petitioner's employment, especially on
the matter of money claims, as this was not stipulated
upon by the parties.42
Moreover, the OSG emphasizes that OFWs and local
workers differ in terms of the nature of their employment,
such that their rights to monetary benefits must
necessarily be treated differently. The OSG enumerates
the essential elements that distinguish OFWs from local
workers: first, while local workers perform their jobs
within Philippine territory, OFWs perform their jobs for
foreign employers, over whom it is difficult for our courts
to acquire jurisdiction, or against whom it is almost
impossible to enforce judgment; and second, as held in
Coyoca v. National Labor Relations Commission43 and
Millares v. National Labor Relations Commission,44
OFWs are contractual employees who can never acquire
regular employment status, unlike local workers who are
or can become regular employees. Hence, the OSG posits
that there are rights and privileges exclusive to local
workers, but not available to OFWs; that these
peculiarities make for a reasonable and valid basis for the
differentiated treatment under the subject clause of the
money claims of OFWs who are illegally dismissed. Thus,
the provision does not violate the equal protection clause
nor Section 18, Article II of the Constitution.45
Lastly, the OSG defends the rationale behind the subject
clause as a police power measure adopted to mitigate the
solidary liability of placement agencies for this "redounds
to the benefit of the migrant workers whose welfare the
government seeks to promote. The survival of legitimate
placement agencies helps [assure] the government that
migrant workers are properly deployed and are employed
under decent and humane conditions."46
The Court's Ruling
The Court sustains petitioner on the first and second
issues.
When the Court is called upon to exercise its power of
judicial review of the acts of its co-equals, such as the
Congress, it does so only when these conditions obtain:
(1) that there is an actual case or controversy involving a
conflict of rights susceptible of judicial determination;47
(2) that the constitutional question is raised by a proper
party48 and at the earliest opportunity;49 and (3) that the
constitutional question is the very lis mota of the case,50
otherwise the Court will dismiss the case or decide the
same on some other ground.51
Without a doubt, there exists in this case an actual
controversy directly involving petitioner who is
personally aggrieved that the labor tribunals and the CA
computed his monetary award based on the salary period
of three months only as provided under the subject
clause.
The constitutional challenge is also timely. It should be
borne in mind that the requirement that a constitutional
issue be raised at the earliest opportunity entails the
interposition of the issue in the pleadings before a
competent court, such that, if the issue is not raised in
the pleadings before that competent court, it cannot be
considered at the trial and, if not considered in the trial, it
cannot be considered on appeal.52 Records disclose that
the issue on the constitutionality of the subject clause
was first raised, not in petitioner's appeal with the
NLRC, but in his Motion for Partial Reconsideration
with said labor tribunal,53 and reiterated in his Petition
for Certiorari before the CA.54 Nonetheless, the issue is
deemed seasonably raised because it is not the NLRC but
the CA which has the competence to resolve the
constitutional issue. The NLRC is a labor tribunal that
merely performs a quasi-judicial function – its function
in the present case is limited to determining questions of
fact to which the legislative policy of R.A. No. 8042 is to
be applied and to resolving such questions in accordance
with the standards laid down by the law itself;55 thus, its
foremost function is to administer and enforce R.A. No.
8042, and not to inquire into the validity of its
provisions. The CA, on the other hand, is vested with the
power of judicial review or the power to declare
unconstitutional a law or a provision thereof, such as the
subject clause.56 Petitioner's interposition of the
constitutional issue before the CA was undoubtedly
seasonable. The CA was therefore remiss in failing to
take up the issue in its decision.
The third condition that the constitutional issue be
critical to the resolution of the case likewise obtains
because the monetary claim of petitioner to his lump-
sum salary for the entire unexpired portion of his 12-
month employment contract, and not just for a period of
three months, strikes at the very core of the subject
clause.
Thus, the stage is all set for the determination of the
constitutionality of the subject clause.
Does the subject clause violate Section 10,
Article III of the Constitution on non-impairment
of contracts?
The answer is in the negative.
Petitioner's claim that the subject clause unduly interferes
with the stipulations in his contract on the term of his
employment and the fixed salary package he will receive57
is not tenable.
Section 10, Article III of the Constitution provides:
No law impairing the obligation of contracts shall be
passed.
The prohibition is aligned with the general principle that
laws newly enacted have only a prospective operation,58
and cannot affect acts or contracts already perfected;59
however, as to laws already in existence, their provisions
are read into contracts and deemed a part thereof.60 Thus,
the non-impairment clause under Section 10, Article II is
limited in application to laws about to be enacted that
would in any way derogate from existing acts or contracts
by enlarging, abridging or in any manner changing the
intention of the parties thereto.
As aptly observed by the OSG, the enactment of R.A. No.
8042 in 1995 preceded the execution of the employment
contract between petitioner and respondents in 1998.
Hence, it cannot be argued that R.A. No. 8042,
particularly the subject clause, impaired the employment
contract of the parties. Rather, when the parties executed
their 1998 employment contract, they were deemed to
have incorporated into it all the provisions of R.A. No.
8042.
But even if the Court were to disregard the timeline, the
subject clause may not be declared unconstitutional on the
ground that it impinges on the impairment clause, for the
law was enacted in the exercise of the police power of the
State to regulate a business, profession or calling,
particularly the recruitment and deployment of OFWs,
with the noble end in view of ensuring respect for the
dignity and well-being of OFWs wherever they may be
employed.61 Police power legislations adopted by the
State to promote the health, morals, peace, education,
good order, safety, and general welfare of the people are
generally applicable not only to future contracts but even
to those already in existence, for all private contracts must
yield to the superior and legitimate measures taken by the
State to promote public welfare.62
Does the subject clause violate Section 1,
Article III of the Constitution, and Section 18,
Article II and Section 3, Article XIII on labor
as a protected sector?
The answer is in the affirmative.
Section 1, Article III of the Constitution guarantees:
No person shall be deprived of life, liberty, or property
without due process of law nor shall any person be denied
the equal protection of the law.
Section 18,63 Article II and Section 3,64 Article XIII
accord all members of the labor sector, without distinction
as to place of deployment, full protection of their rights
and welfare.
To Filipino workers, the rights guaranteed under the
foregoing constitutional provisions translate to economic
security and parity: all monetary benefits should be
equally enjoyed by workers of similar category, while all
monetary obligations should be borne by them in equal
degree; none should be denied the protection of the laws
which is enjoyed by, or spared the burden imposed on,
others in like circumstances.65
Such rights are not absolute but subject to the inherent
power of Congress to incorporate, when it sees fit, a
system of classification into its legislation; however, to be
valid, the classification must comply with these
requirements: 1) it is based on substantial distinctions; 2)
it is germane to the purposes of the law; 3) it is not limited
to existing conditions only; and 4) it applies equally to all
members of the class.66
There are three levels of scrutiny at which the Court
reviews the constitutionality of a classification embodied
in a law: a) the deferential or rational basis scrutiny in
which the challenged classification needs only be shown
to be rationally related to serving a legitimate state
interest;67 b) the middle-tier or intermediate scrutiny in
which the government must show that the challenged
classification serves an important state interest and that
the classification is at least substantially related to serving
that interest;68 and c) strict judicial scrutiny69 in which a
legislative classification which impermissibly interferes
with the exercise of a fundamental right70 or operates to
the peculiar disadvantage of a suspect class71 is presumed
unconstitutional, and the burden is upon the government
to prove that the classification is necessary to achieve a
compelling state interest and that it is the least restrictive
means to protect such interest.72
Under American jurisprudence, strict judicial scrutiny is
triggered by suspect classifications73 based on race74 or
gender75 but not when the classification is drawn along
income categories.76
It is different in the Philippine setting. In Central Bank
(now Bangko Sentral ng Pilipinas) Employee Association,
Inc. v. Bangko Sentral ng Pilipinas,77 the constitutionality
of a provision in the charter of the Bangko Sentral ng
Pilipinas (BSP), a government financial institution (GFI),
was challenged for maintaining its rank-and-file
employees under the Salary Standardization Law (SSL),
even when the rank-and-file employees of other GFIs had
been exempted from the SSL by their respective charters.
Finding that the disputed provision contained a suspect
classification based on salary grade, the Court deliberately
employed the standard of strict judicial scrutiny in its
review of the constitutionality of said provision. More
significantly, it was in this case that the Court revealed the
broad outlines of its judicial philosophy, to wit:
Congress retains its wide discretion in providing for a
valid classification, and its policies should be accorded
recognition and respect by the courts of justice except
when they run afoul of the Constitution. The deference
stops where the classification violates a fundamental
right, or prejudices persons accorded special protection
by the Constitution. When these violations arise, this
Court must discharge its primary role as the vanguard of
constitutional guaranties, and require a stricter and more
exacting adherence to constitutional limitations. Rational
basis should not suffice.
Admittedly, the view that prejudice to persons accorded
special protection by the Constitution requires a stricter
judicial scrutiny finds no support in American or English
jurisprudence. Nevertheless, these foreign decisions and
authorities are not per se controlling in this jurisdiction.
At best, they are persuasive and have been used to support
many of our decisions. We should not place undue and
fawning reliance upon them and regard them as
indispensable mental crutches without which we cannot
come to our own decisions through the employment of our
own endowments. We live in a different ambience and
must decide our own problems in the light of our own
interests and needs, and of our qualities and even
idiosyncrasies as a people, and always with our own
concept of law and justice. Our laws must be construed in
accordance with the intention of our own lawmakers and
such intent may be deduced from the language of each law
and the context of other local legislation related thereto.
More importantly, they must be construed to serve our
own public interest which is the be-all and the end-all of
all our laws. And it need not be stressed that our public
interest is distinct and different from others.
xxxx
Further, the quest for a better and more "equal" world calls
for the use of equal protection as a tool of effective
judicial intervention.
Equality is one ideal which cries out for bold attention and
action in the Constitution. The Preamble proclaims
"equality" as an ideal precisely in protest against crushing
inequities in Philippine society. The command to promote
social justice in Article II, Section 10, in "all phases of
national development," further explicitated in Article
XIII, are clear commands to the State to take affirmative
action in the direction of greater equality. x x x [T]here is
thus in the Philippine Constitution no lack of doctrinal
support for a more vigorous state effort towards achieving
a reasonable measure of equality.
Our present Constitution has gone further in guaranteeing
vital social and economic rights to marginalized groups of
society, including labor. Under the policy of social justice,
the law bends over backward to accommodate the
interests of the working class on the humane justification
that those with less privilege in life should have more in
law. And the obligation to afford protection to labor is
incumbent not only on the legislative and executive
branches but also on the judiciary to translate this pledge
into a living reality. Social justice calls for the
humanization of laws and the equalization of social and
economic forces by the State so that justice in its rational
and objectively secular conception may at least be
approximated.
xxxx
Under most circumstances, the Court will exercise
judicial restraint in deciding questions of constitutionality,
recognizing the broad discretion given to Congress in
exercising its legislative power. Judicial scrutiny would
be based on the "rational basis" test, and the legislative
discretion would be given deferential treatment.
But if the challenge to the statute is premised on the denial
of a fundamental right, or the perpetuation of prejudice
against persons favored by the Constitution with
special protection, judicial scrutiny ought to be more
strict. A weak and watered down view would call for the
abdication of this Court’s solemn duty to strike down any
law repugnant to the Constitution and the rights it
enshrines. This is true whether the actor committing the
unconstitutional act is a private person or the government
itself or one of its instrumentalities. Oppressive acts will
be struck down regardless of the character or nature of the
actor.
xxxx
In the case at bar, the challenged proviso operates on the
basis of the salary grade or officer-employee status. It is
akin to a distinction based on economic class and status,
with the higher grades as recipients of a benefit
specifically withheld from the lower grades. Officers of
the BSP now receive higher compensation packages that
are competitive with the industry, while the poorer, low-
salaried employees are limited to the rates prescribed by
the SSL. The implications are quite disturbing: BSP rank-
and-file employees are paid the strictly regimented rates
of the SSL while employees higher in rank - possessing
higher and better education and opportunities for career
advancement - are given higher compensation packages to
entice them to stay. Considering that majority, if not all,
the rank-and-file employees consist of people whose
status and rank in life are less and limited, especially in
terms of job marketability, it is they - and not the officers
- who have the real economic and financial need for the
adjustment . This is in accord with the policy of the
Constitution "to free the people from poverty, provide
adequate social services, extend to them a decent standard
of living, and improve the quality of life for all." Any act
of Congress that runs counter to this constitutional
desideratum deserves strict scrutiny by this Court before
it can pass muster. (Emphasis supplied)
Imbued with the same sense of "obligation to afford
protection to labor," the Court in the present case also
employs the standard of strict judicial scrutiny, for it
perceives in the subject clause a suspect classification
prejudicial to OFWs.
Upon cursory reading, the subject clause appears facially
neutral, for it applies to all OFWs. However, a closer
examination reveals that the subject clause has a
discriminatory intent against, and an invidious impact on,
OFWs at two levels:
First, OFWs with employment contracts of less than one
year vis-à-vis OFWs with employment contracts of one
year or more;
Second, among OFWs with employment contracts of
more than one year; and
Third, OFWs vis-à-vis local workers with fixed-period
employment;
OFWs with employment contracts of less than one
year vis-à-vis OFWs with employment contracts of one
year or more
As pointed out by petitioner,78 it was in Marsaman
Manning Agency, Inc. v. National Labor Relations
Commission79 (Second Division, 1999) that the Court laid
down the following rules on the application of the periods
prescribed under Section 10(5) of R.A. No. 804, to wit:
A plain reading of Sec. 10 clearly reveals that the
choice of which amount to award an illegally dismissed
overseas contract worker, i.e., whether his salaries for
the unexpired portion of his employment contract or
three (3) months’ salary for every year of the unexpired
term, whichever is less, comes into play only when the
employment contract concerned has a term of at least
one (1) year or more. This is evident from the words
"for every year of the unexpired term" which follows
the words "salaries x x x for three months." To follow
petitioners’ thinking that private respondent is entitled to
three (3) months salary only simply because it is the
lesser amount is to completely disregard and overlook
some words used in the statute while giving effect to
some. This is contrary to the well-established rule in
legal hermeneutics that in interpreting a statute, care
should be taken that every part or word thereof be given
effect since the law-making body is presumed to know
the meaning of the words employed in the statue and to
have used them advisedly. Ut res magis valeat quam
pereat.80 (Emphasis supplied)
In Marsaman, the OFW involved was illegally dismissed
two months into his 10-month contract, but was awarded
his salaries for the remaining 8 months and 6 days of his
contract.
Prior to Marsaman, however, there were two cases in
which the Court made conflicting rulings on Section
10(5). One was Asian Center for Career and
Employment System and Services v. National Labor
Relations Commission (Second Division, October
1998),81 which involved an OFW who was awarded a
two-year employment contract, but was dismissed after
working for one year and two months. The LA declared
his dismissal illegal and awarded him SR13,600.00 as
lump-sum salary covering eight months, the unexpired
portion of his contract. On appeal, the Court reduced the
award to SR3,600.00 equivalent to his three months’
salary, this being the lesser value, to wit:
Under Section 10 of R.A. No. 8042, a worker dismissed
from overseas employment without just, valid or
authorized cause is entitled to his salary for the
unexpired portion of his employment contract or for
three (3) months for every year of the unexpired term,
whichever is less.
In the case at bar, the unexpired portion of private
respondent’s employment contract is eight (8) months.
Private respondent should therefore be paid his basic
salary corresponding to three (3) months or a total of
SR3,600.82
Another was Triple-Eight Integrated Services, Inc. v.
National Labor Relations Commission (Third Division,
December 1998),83 which involved an OFW (therein
respondent Erlinda Osdana) who was originally granted
a 12-month contract, which was deemed renewed for
another 12 months. After serving for one year and seven-
and-a-half months, respondent Osdana was illegally
dismissed, and the Court awarded her salaries for the
entire unexpired portion of four and one-half months of
her contract.
The Marsaman interpretation of Section 10(5) has since
been adopted in the following cases:
Case Title
Contract Period
Period of Service
Unexpired Period
Period Applied in the Computation of the Monetary
Award
Skippers v. Maguad84
6 months
2 months
4 months
4 months
Bahia Shipping v. Reynaldo Chua 85
9 months
8 months
4 months
4 months
Centennial Transmarine v. dela Cruz l86
9 months
4 months
5 months
5 months
Talidano v. Falcon87
12 months
3 months
9 months
3 months
Univan v. CA 88 months of the unexpired portion of their contracts. Even
12 months the OFWs involved in Talidano and Univan who had
3 months worked for a longer period of 3 months out of their 12-
9 months month contracts before being illegally dismissed were
3 months awarded their salaries for only 3 months.
Oriental v. CA 89 To illustrate the disparity even more vividly, the Court
12 months assumes a hypothetical OFW-A with an employment
more than 2 months contract of 10 months at a monthly salary rate of
10 months US$1,000.00 and a hypothetical OFW-B with an
3 months employment contract of 15 months with the same
PCL v. NLRC90 monthly salary rate of US$1,000.00. Both commenced
12 months work on the same day and under the same employer, and
more than 2 months were illegally dismissed after one month of work. Under
more or less 9 months the subject clause, OFW-A will be entitled to
3 months US$9,000.00, equivalent to his salaries for the remaining
Olarte v. Nayona91 9 months of his contract, whereas OFW-B will be
12 months entitled to only US$3,000.00, equivalent to his salaries
21 days for 3 months of the unexpired portion of his contract,
11 months and 9 days instead of US$14,000.00 for the unexpired portion of 14
3 months months of his contract, as the US$3,000.00 is the lesser
JSS v.Ferrer92 amount.
12 months The disparity becomes more aggravating when the Court
16 days takes into account jurisprudence that, prior to the
11 months and 24 days effectivity of R.A. No. 8042 on July 14, 1995,97 illegally
3 months dismissed OFWs, no matter how long the period of their
Pentagon v. Adelantar93 employment contracts, were entitled to their salaries for
12 months the entire unexpired portions of their contracts. The
9 months and 7 days matrix below speaks for itself:
2 months and 23 days Case Title
2 months and 23 days Contract Period
Phil. Employ v. Paramio, et al.94 Period of Service
12 months Unexpired Period
10 months Period Applied in the Computation of the Monetary
2 months Award
Unexpired portion ATCI v. CA, et al.98
Flourish Maritime v. Almanzor 95 2 years
2 years 2 months
26 days 22 months
23 months and 4 days 22 months
6 months or 3 months for each year of contract Phil. Integrated v. NLRC99
Athenna Manpower v. Villanos 96 2 years
1 year, 10 months and 28 days 7 days
1 month 23 months and 23 days
1 year, 9 months and 28 days 23 months and 23 days
6 months or 3 months for each year of contract JGB v. NLC100
As the foregoing matrix readily shows, the subject clause 2 years
classifies OFWs into two categories. The first category 9 months
includes OFWs with fixed-period employment contracts 15 months
of less than one year; in case of illegal dismissal, they are 15 months
entitled to their salaries for the entire unexpired portion Agoy v. NLRC101
of their contract. The second category consists of OFWs 2 years
with fixed-period employment contracts of one year or 2 months
more; in case of illegal dismissal, they are entitled to 22 months
monetary award equivalent to only 3 months of the 22 months
unexpired portion of their contracts. EDI v. NLRC, et al.102
The disparity in the treatment of these two groups cannot 2 years
be discounted. In Skippers, the respondent OFW worked 5 months
for only 2 months out of his 6-month contract, but was 19 months
awarded his salaries for the remaining 4 months. In 19 months
contrast, the respondent OFWs in Oriental and PCL who Barros v. NLRC, et al.103
had also worked for about 2 months out of their 12- 12 months
month contracts were awarded their salaries for only 3 4 months
8 months
8 months
Philippine Transmarine v. Carilla104
12 months
6 months and 22 days
5 months and 18 days
5 months and 18 days
It is plain that prior to R.A. No. 8042, all OFWs,
regardless of contract periods or the unexpired portions
thereof, were treated alike in terms of the computation of
their monetary benefits in case of illegal dismissal. Their
claims were subjected to a uniform rule of computation:
their basic salaries multiplied by the entire unexpired
portion of their employment contracts.
The enactment of the subject clause in R.A. No. 8042
introduced a differentiated rule of computation of the
money claims of illegally dismissed OFWs based on their
employment periods, in the process singling out one
category whose contracts have an unexpired portion of
one year or more and subjecting them to the peculiar
disadvantage of having their monetary awards limited to
their salaries for 3 months or for the unexpired portion
thereof, whichever is less, but all the while sparing the
other category from such prejudice, simply because the
latter's unexpired contracts fall short of one year.
Among OFWs With Employment Contracts of More
Than One Year
Upon closer examination of the terminology employed in
the subject clause, the Court now has misgivings on the
accuracy of the Marsaman interpretation.
The Court notes that the subject clause "or for three (3)
months for every year of the unexpired term, whichever is
less" contains the qualifying phrases "every year" and
"unexpired term." By its ordinary meaning, the word
"term" means a limited or definite extent of time.105
Corollarily, that "every year" is but part of an "unexpired
term" is significant in many ways: first, the unexpired
term must be at least one year, for if it were any shorter,
there would be no occasion for such unexpired term to be
measured by every year; and second, the original term
must be more than one year, for otherwise, whatever
would be the unexpired term thereof will not reach even a
year. Consequently, the more decisive factor in the
determination of when the subject clause "for three (3)
months for every year of the unexpired term, whichever is
less" shall apply is not the length of the original contract
period as held in Marsaman,106 but the length of the
unexpired portion of the contract period -- the subject
clause applies in cases when the unexpired portion of the
contract period is at least one year, which arithmetically
requires that the original contract period be more than one
year.
Viewed in that light, the subject clause creates a sub-layer
of discrimination among OFWs whose contract periods
are for more than one year: those who are illegally
dismissed with less than one year left in their contracts
shall be entitled to their salaries for the entire unexpired
portion thereof, while those who are illegally dismissed
with one year or more remaining in their contracts shall
be covered by the subject clause, and their monetary
benefits limited to their salaries for three months only.
To concretely illustrate the application of the foregoing
interpretation of the subject clause, the Court assumes
hypothetical OFW-C and OFW-D, who each have a 24-
month contract at a salary rate of US$1,000.00 per month.
OFW-C is illegally dismissed on the 12th month, and
OFW-D, on the 13th month. Considering that there is at
least 12 months remaining in the contract period of OFW-
C, the subject clause applies to the computation of the
latter's monetary benefits. Thus, OFW-C will be entitled,
not to US$12,000,00 or the latter's total salaries for the 12
months unexpired portion of the contract, but to the lesser
amount of US$3,000.00 or the latter's salaries for 3
months out of the 12-month unexpired term of the
contract. On the other hand, OFW-D is spared from the
effects of the subject clause, for there are only 11 months
left in the latter's contract period. Thus, OFW-D will be
entitled to US$11,000.00, which is equivalent to his/her
total salaries for the entire 11-month unexpired portion.
OFWs vis-à-vis Local Workers
With Fixed-Period Employment
As discussed earlier, prior to R.A. No. 8042, a uniform
system of computation of the monetary awards of illegally
dismissed OFWs was in place. This uniform system was
applicable even to local workers with fixed-term
employment.107
The earliest rule prescribing a uniform system of
computation was actually Article 299 of the Code of
Commerce (1888),108 to wit:
Article 299. If the contracts between the merchants and
their shop clerks and employees should have been made
of a fixed period, none of the contracting parties, without
the consent of the other, may withdraw from the
fulfillment of said contract until the termination of the
period agreed upon.
Persons violating this clause shall be subject to indemnify
the loss and damage suffered, with the exception of the
provisions contained in the following articles.
In Reyes v. The Compañia Maritima,109 the Court applied
the foregoing provision to determine the liability of a
shipping company for the illegal discharge of its managers
prior to the expiration of their fixed-term employment.
The Court therein held the shipping company liable for the
salaries of its managers for the remainder of their fixed-
term employment.
There is a more specific rule as far as seafarers are
concerned: Article 605 of the Code of Commerce which
provides:
Article 605. If the contracts of the captain and members
of the crew with the agent should be for a definite period
or voyage, they cannot be discharged until the fulfillment
of their contracts, except for reasons of insubordination in
serious matters, robbery, theft, habitual drunkenness, and
damage caused to the vessel or to its cargo by malice or
manifest or proven negligence.
Article 605 was applied to Madrigal Shipping Company,
Inc. v. Ogilvie,110 in
which the Court held the shipping company liable for the
salaries and subsistence allowance of its illegally
dismissed employees for the entire unexpired portion of
their employment contracts.
While Article 605 has remained good law up to the
present,111 Article 299 of the Code of Commerce was
replaced by Art. 1586 of the Civil Code of 1889, to wit:
Article 1586. Field hands, mechanics, artisans, and other
laborers hired for a certain time and for a certain work
cannot leave or be dismissed without sufficient cause,
before the fulfillment of the contract. (Emphasis
supplied.)
Citing Manresa, the Court in Lemoine v. Alkan112 read the
disjunctive "or" in Article 1586 as a conjunctive "and" so
as to apply the provision to local workers who are
employed for a time certain although for no particular
skill. This interpretation of Article 1586 was reiterated in
Garcia Palomar v. Hotel de France Company.113 And in
both Lemoine and Palomar, the Court adopted the general
principle that in actions for wrongful discharge founded
on Article 1586, local workers are entitled to recover
damages to the extent of the amount stipulated to be paid
to them by the terms of their contract. On the computation
of the amount of such damages, the Court in Aldaz v.
Gay114 held:
The doctrine is well-established in American
jurisprudence, and nothing has been brought to our
attention to the contrary under Spanish jurisprudence, that
when an employee is wrongfully discharged it is his duty
to seek other employment of the same kind in the same
community, for the purpose of reducing the damages
resulting from such wrongful discharge. However, while
this is the general rule, the burden of showing that he
failed to make an effort to secure other employment of a
like nature, and that other employment of a like nature was
obtainable, is upon the defendant. When an employee is
wrongfully discharged under a contract of employment
his prima facie damage is the amount which he would be
entitled to had he continued in such employment until the
termination of the period. (Howard vs. Daly, 61 N. Y.,
362; Allen vs. Whitlark, 99 Mich., 492; Farrell vs. School
District No. 2, 98 Mich., 43.)115 (Emphasis supplied)
On August 30, 1950, the New Civil Code took effect with
new provisions on fixed-term employment: Section 2
(Obligations with a Period), Chapter 3, Title I, and
Sections 2 (Contract of Labor) and 3 (Contract for a Piece
of Work), Chapter 3, Title VIII, Book IV.116 Much like
Article 1586 of the Civil Code of 1889, the new provisions
of the Civil Code do not expressly provide for the
remedies available to a fixed-term worker who is illegally
discharged. However, it is noted that in Mackay Radio &
Telegraph Co., Inc. v. Rich,117 the Court carried over the
principles on the payment of damages underlying Article
1586 of the Civil Code of 1889 and applied the same to a
case involving the illegal discharge of a local worker
whose fixed-period employment contract was entered into
in 1952, when the new Civil Code was already in effect.118
More significantly, the same principles were applied to
cases involving overseas Filipino workers whose fixed-
term employment contracts were illegally terminated,
such as in First Asian Trans & Shipping Agency, Inc. v.
Ople,119 involving seafarers who were illegally
discharged. In Teknika Skills and Trade Services, Inc. v.
National Labor Relations Commission,120 an OFW who
was illegally dismissed prior to the expiration of her fixed-
period employment contract as a baby sitter, was awarded
salaries corresponding to the unexpired portion of her
contract. The Court arrived at the same ruling in Anderson
v. National Labor Relations Commission,121 which
involved a foreman hired in 1988 in Saudi Arabia for a
fixed term of two years, but who was illegally dismissed
after only nine months on the job -- the Court awarded him
salaries corresponding to 15 months, the unexpired
portion of his contract. In Asia World Recruitment, Inc. v.
National Labor Relations Commission,122 a Filipino
working as a security officer in 1989 in Angola was
awarded his salaries for the remaining period of his 12-
month contract after he was wrongfully discharged.
Finally, in Vinta Maritime Co., Inc. v. National Labor
Relations Commission,123 an OFW whose 12-month
contract was illegally cut short in the second month was
declared entitled to his salaries for the remaining 10
months of his contract.
In sum, prior to R.A. No. 8042, OFWs and local workers
with fixed-term employment who were illegally
discharged were treated alike in terms of the computation
of their money claims: they were uniformly entitled to
their salaries for the entire unexpired portions of their
contracts. But with the enactment of R.A. No. 8042,
specifically the adoption of the subject clause, illegally
dismissed OFWs with an unexpired portion of one year or
more in their employment contract have since been
differently treated in that their money claims are subject
to a 3-month cap, whereas no such limitation is imposed
on local workers with fixed-term employment.
The Court concludes that the subject clause contains a
suspect classification in that, in the computation of the
monetary benefits of fixed-term employees who are
illegally discharged, it imposes a 3-month cap on the
claim of OFWs with an unexpired portion of one year
or more in their contracts, but none on the claims of
other OFWs or local workers with fixed-term
employment. The subject clause singles out one
classification of OFWs and burdens it with a peculiar
disadvantage.
There being a suspect classification involving a
vulnerable sector protected by the Constitution, the Court
now subjects the classification to a strict judicial
scrutiny, and determines whether it serves a compelling
state interest through the least restrictive means.
What constitutes compelling state interest is measured by
the scale of rights and powers arrayed in the Constitution
and calibrated by history.124 It is akin to the paramount
interest of the state125 for which some individual liberties
must give way, such as the public interest in
safeguarding health or maintaining medical standards,126
or in maintaining access to information on matters of
public concern.127
In the present case, the Court dug deep into the records
but found no compelling state interest that the subject
clause may possibly serve.
The OSG defends the subject clause as a police power
measure "designed to protect the employment of Filipino
seafarers overseas x x x. By limiting the liability to three
months [sic], Filipino seafarers have better chance of
getting hired by foreign employers." The limitation also
protects the interest of local placement agencies, which
otherwise may be made to shoulder millions of pesos in
"termination pay."128
The OSG explained further:
Often, placement agencies, their liability being solidary,
shoulder the payment of money claims in the event that
jurisdiction over the foreign employer is not acquired by
the court or if the foreign employer reneges on its
obligation. Hence, placement agencies that are in good
faith and which fulfill their obligations are unnecessarily
penalized for the acts of the foreign employer. To protect
them and to promote their continued helpful contribution
in deploying Filipino migrant workers, liability for
money are reduced under Section 10 of RA 8042.
This measure redounds to the benefit of the migrant
workers whose welfare the government seeks to
promote. The survival of legitimate placement agencies
helps [assure] the government that migrant workers are
properly deployed and are employed under decent and
humane conditions.129 (Emphasis supplied)
However, nowhere in the Comment or Memorandum
does the OSG cite the source of its perception of the state
interest sought to be served by the subject clause.
The OSG locates the purpose of R.A. No. 8042 in the
speech of Rep. Bonifacio Gallego in sponsorship of
House Bill No. 14314 (HB 14314), from which the law
originated;130 but the speech makes no reference to the
underlying reason for the adoption of the subject clause.
That is only natural for none of the 29 provisions in HB
14314 resembles the subject clause.
On the other hand, Senate Bill No. 2077 (SB 2077)
contains a provision on money claims, to wit:
Sec. 10. Money Claims. - Notwithstanding any provision
of law to the contrary, the Labor Arbiters of the National
Labor Relations Commission (NLRC) shall have the
original and exclusive jurisdiction to hear and decide,
within ninety (90) calendar days after the filing of the
complaint, the claims arising out of an employer-
employee relationship or by virtue of the complaint, the
claim arising out of an employer-employee relationship
or by virtue of any law or contract involving Filipino
workers for overseas employment including claims for
actual, moral, exemplary and other forms of damages.
The liability of the principal and the
recruitment/placement agency or any and all claims
under this Section shall be joint and several.
Any compromise/amicable settlement or voluntary
agreement on any money claims exclusive of damages
under this Section shall not be less than fifty percent
(50%) of such money claims: Provided, That any
installment payments, if applicable, to satisfy any such
compromise or voluntary settlement shall not be more
than two (2) months. Any compromise/voluntary
agreement in violation of this paragraph shall be null and
void.
Non-compliance with the mandatory period for
resolutions of cases provided under this Section shall
subject the responsible officials to any or all of the
following penalties:
(1) The salary of any such official who fails to render his
decision or resolution within the prescribed period shall
be, or caused to be, withheld until the said official
complies therewith;
(2) Suspension for not more than ninety (90) days; or
(3) Dismissal from the service with disqualification to
hold any appointive public office for five (5) years.
Provided, however, That the penalties herein provided
shall be without prejudice to any liability which any such
official may have incurred under other existing laws or
rules and regulations as a consequence of violating the
provisions of this paragraph.
But significantly, Section 10 of SB 2077 does not
provide for any rule on the computation of money
claims.
A rule on the computation of money claims containing
the subject clause was inserted and eventually adopted as
the 5th paragraph of Section 10 of R.A. No. 8042. The
Court examined the rationale of the subject clause in the
transcripts of the "Bicameral Conference Committee
(Conference Committee) Meetings on the Magna Carta
on OCWs (Disagreeing Provisions of Senate Bill No.
2077 and House Bill No. 14314)." However, the Court
finds no discernible state interest, let alone a compelling
one, that is sought to be protected or advanced by the
adoption of the subject clause.
In fine, the Government has failed to discharge its
burden of proving the existence of a compelling state
interest that would justify the perpetuation of the
discrimination against OFWs under the subject clause.
Assuming that, as advanced by the OSG, the purpose of
the subject clause is to protect the employment of OFWs
by mitigating the solidary liability of placement
agencies, such callous and cavalier rationale will have to
be rejected. There can never be a justification for any
form of government action that alleviates the burden of
one sector, but imposes the same burden on another
sector, especially when the favored sector is composed
of private businesses such as placement agencies, while
the disadvantaged sector is composed of OFWs whose
protection no less than the Constitution commands. The
idea that private business interest can be elevated to the
level of a compelling state interest is odious.
Moreover, even if the purpose of the subject clause is to
lessen the solidary liability of placement agencies vis-a-
vis their foreign principals, there are mechanisms already
in place that can be employed to achieve that purpose
without infringing on the constitutional rights of OFWs.
The POEA Rules and Regulations Governing the
Recruitment and Employment of Land-Based Overseas
Workers, dated February 4, 2002, imposes administrative
disciplinary measures on erring foreign employers who
default on their contractual obligations to migrant
workers and/or their Philippine agents. These
disciplinary measures range from temporary
disqualification to preventive suspension. The POEA
Rules and Regulations Governing the Recruitment and
Employment of Seafarers, dated May 23, 2003, contains
similar administrative disciplinary measures against
erring foreign employers.
Resort to these administrative measures is undoubtedly
the less restrictive means of aiding local placement
agencies in enforcing the solidary liability of their
foreign principals.
Thus, the subject clause in the 5th paragraph of Section
10 of R.A. No. 8042 is violative of the right of petitioner
and other OFWs to equal protection.1avvphi1
Further, there would be certain misgivings if one is to
approach the declaration of the unconstitutionality of the
subject clause from the lone perspective that the clause
directly violates state policy on labor under Section 3,131
Article XIII of the Constitution.
While all the provisions of the 1987 Constitution are
presumed self-executing,132 there are some which this
Court has declared not judicially enforceable, Article
XIII being one,133 particularly Section 3 thereof, the
nature of which, this Court, in Agabon v. National Labor
Relations Commission,134 has described to be not self-
actuating:
Thus, the constitutional mandates of protection to labor
and security of tenure may be deemed as self-executing
in the sense that these are automatically acknowledged
and observed without need for any enabling legislation.
However, to declare that the constitutional provisions are
enough to guarantee the full exercise of the rights
embodied therein, and the realization of ideals therein
expressed, would be impractical, if not unrealistic. The
espousal of such view presents the dangerous tendency
of being overbroad and exaggerated. The guarantees of
"full protection to labor" and "security of tenure", when
examined in isolation, are facially unqualified, and the
broadest interpretation possible suggests a blanket shield
in favor of labor against any form of removal regardless
of circumstance. This interpretation implies an
unimpeachable right to continued employment-a utopian
notion, doubtless-but still hardly within the
contemplation of the framers. Subsequent legislation is
still needed to define the parameters of these guaranteed
rights to ensure the protection and promotion, not only
the rights of the labor sector, but of the employers' as
well. Without specific and pertinent legislation, judicial
bodies will be at a loss, formulating their own conclusion
to approximate at least the aims of the Constitution.
Ultimately, therefore, Section 3 of Article XIII cannot,
on its own, be a source of a positive enforceable right to
stave off the dismissal of an employee for just cause
owing to the failure to serve proper notice or hearing. As
manifested by several framers of the 1987 Constitution,
the provisions on social justice require legislative
enactments for their enforceability.135 (Emphasis added)
Thus, Section 3, Article XIII cannot be treated as a
principal source of direct enforceable rights, for the
violation of which the questioned clause may be declared
unconstitutional. It may unwittingly risk opening the
floodgates of litigation to every worker or union over
every conceivable violation of so broad a concept as
social justice for labor.
It must be stressed that Section 3, Article XIII does not
directly bestow on the working class any actual
enforceable right, but merely clothes it with the status of
a sector for whom the Constitution urges protection
through executive or legislative action and judicial
recognition. Its utility is best limited to being an impetus
not just for the executive and legislative departments, but
for the judiciary as well, to protect the welfare of the
working class. And it was in fact consistent with that
constitutional agenda that the Court in Central Bank
(now Bangko Sentral ng Pilipinas) Employee
Association, Inc. v. Bangko Sentral ng Pilipinas, penned
by then Associate Justice now Chief Justice Reynato S.
Puno, formulated the judicial precept that when the
challenge to a statute is premised on the perpetuation of
prejudice against persons favored by the Constitution
with special protection -- such as the working class or a
section thereof -- the Court may recognize the existence
of a suspect classification and subject the same to strict
judicial scrutiny.
The view that the concepts of suspect classification and
strict judicial scrutiny formulated in Central Bank
Employee Association exaggerate the significance of
Section 3, Article XIII is a groundless apprehension.
Central Bank applied Article XIII in conjunction with
the equal protection clause. Article XIII, by itself,
without the application of the equal protection clause,
has no life or force of its own as elucidated in Agabon.
Along the same line of reasoning, the Court further holds
that the subject clause violates petitioner's right to
substantive due process, for it deprives him of property,
consisting of monetary benefits, without any existing
valid governmental purpose.136
The argument of the Solicitor General, that the actual
purpose of the subject clause of limiting the entitlement
of OFWs to their three-month salary in case of illegal
dismissal, is to give them a better chance of getting hired
by foreign employers. This is plain speculation. As
earlier discussed, there is nothing in the text of the law or
the records of the deliberations leading to its enactment
or the pleadings of respondent that would indicate that
there is an existing governmental purpose for the subject
clause, or even just a pretext of one.
The subject clause does not state or imply any definitive
governmental purpose; and it is for that precise reason
that the clause violates not just petitioner's right to equal
protection, but also her right to substantive due process
under Section 1,137 Article III of the Constitution.
The subject clause being unconstitutional, petitioner is
entitled to his salaries for the entire unexpired period of
nine months and 23 days of his employment contract,
pursuant to law and jurisprudence prior to the enactment
of R.A. No. 8042.
On the Third Issue
Petitioner contends that his overtime and leave pay
should form part of the salary basis in the computation of
his monetary award, because these are fixed benefits that
have been stipulated into his contract.
Petitioner is mistaken.
The word salaries in Section 10(5) does not include
overtime and leave pay. For seafarers like petitioner,
DOLE Department Order No. 33, series 1996, provides a
Standard Employment Contract of Seafarers, in which
salary is understood as the basic wage, exclusive of
overtime, leave pay and other bonuses; whereas overtime
pay is compensation for all work "performed" in excess
of the regular eight hours, and holiday pay is
compensation for any work "performed" on designated
rest days and holidays.
By the foregoing definition alone, there is no basis for
the automatic inclusion of overtime and holiday pay in
 the computation of petitioner's monetary award, unless
there is evidence that he performed work during those
periods. As the Court held in Centennial Transmarine,
Inc. v. Dela Cruz,138
However, the payment of overtime pay and leave pay
should be disallowed in light of our ruling in Cagampan
v. National Labor Relations Commission, to wit:
The rendition of overtime work and the submission of
sufficient proof that said was actually performed are
conditions to be satisfied before a seaman could be
entitled to overtime pay which should be computed on
the basis of 30% of the basic monthly salary. In short,
the contract provision guarantees the right to overtime
pay but the entitlement to such benefit must first be
established.
In the same vein, the claim for the day's leave pay for the
unexpired portion of the contract is unwarranted since
the same is given during the actual service of the
seamen.
WHEREFORE, the Court GRANTS the Petition. The
subject clause "or for three months for every year of the
unexpired term, whichever is less" in the 5th paragraph of
Section 10 of Republic Act No. 8042 is DECLARED
UNCONSTITUTIONAL; and the December 8, 2004
Decision and April 1, 2005 Resolution of the Court of
Appeals are MODIFIED to the effect that petitioner is
AWARDED his salaries for the entire unexpired portion
of his employment contract consisting of nine months and
23 days computed at the rate of US$1,400.00 per month.
G.R. No. L-46496 February 27, 1940
ANG TIBAY, represented by TORIBIO TEODORO,
manager and propietor, and
NATIONAL WORKERS BROTHERHOOD, petitioners,
vs.
THE COURT OF INDUSTRIAL RELATIONS and
NATIONAL LABOR UNION, INC., respondents.
Office of the Solicitor-General Ozaeta and Assistant Attorney
Barcelona for the Court of Industrial Relations.
Antonio D. Paguia for National Labor Unon.
Claro M. Recto for petitioner "Ang Tibay".
Jose M. Casal for National Workers' Brotherhood.
LAUREL, J.:
The Solicitor-General in behalf of the respondent Court of
Industrial Relations in the above-entitled case has filed a
motion for reconsideration and moves that, for the reasons
stated in his motion, we reconsider the following legal
conclusions of the majority opinion of this Court:
1. Que un contrato de trabajo, asi individual como colectivo,
sin termino fijo de duracion o que no sea para una
determinada, termina o bien por voluntad de cualquiera de las
partes o cada vez que ilega el plazo fijado para el pago de los
salarios segun costumbre en la localidad o cunado se termine
la obra;
2. Que los obreros de una empresa fabril, que han celebrado
contrato, ya individual ya colectivamente, con ell, sin tiempo
fijo, y que se han visto obligados a cesar en sus tarbajos por
haberse declarando paro forzoso en la fabrica en la cual
tarbajan, dejan de ser empleados u obreros de la misma;
3. Que un patrono o sociedad que ha celebrado un contrato
colectivo de trabajo con sus osbreros sin tiempo fijo de
duracion y sin ser para una obra determiminada y que se
niega a readmitir a dichos obreros que cesaron como
consecuencia de un paro forzoso, no es culpable de practica
injusta in incurre en la sancion penal del articulo 5 de la Ley
No. 213 del Commonwealth, aunque su negativa a readmitir
se deba a que dichos obreros pertenecen a un determinado
organismo obrero, puesto que tales ya han dejado deser
empleados suyos por terminacion del contrato en virtud del
paro.
The respondent National Labor Union, Inc., on the other
hand, prays for the vacation of the judgement rendered by the
majority of this Court and the remanding of the case to the
Court of Industrial Relations for a new trial, and avers:
1. That Toribio Teodoro's claim that on September 26, 1938,
there was shortage of leather soles in ANG TIBAY making it
necessary for him to temporarily lay off the members of the
National Labor Union Inc., is entirely false and unsupported
by the records of the Bureau of Customs and the Books of
Accounts of native dealers in leather.
2. That the supposed lack of leather materials claimed by
Toribio Teodoro was but a scheme to systematically prevent
the forfeiture of this bond despite the breach of his
CONTRACT with the Philippine Army.
3. That Toribio Teodoro's letter to the Philippine Army dated
September 29, 1938, (re supposed delay of leather soles from
the States) was but a scheme to systematically prevent the
forfeiture of this bond despite the breach of his CONTRACT
with the Philippine Army.
4. That the National Worker's Brotherhood of ANG TIBAY
is a company or employer union dominated by Toribio
Teodoro, the existence and functions of which are illegal.
(281 U.S., 548, petitioner's printed memorandum, p. 25.)
5. That in the exercise by the laborers of their rights to
collective bargaining, majority rule and elective
representation are highly essential and indispensable.
(Sections 2 and 5, Commonwealth Act No. 213.)
6. That the century provisions of the Civil Code which had
been (the) principal source of dissensions and continuous
civil war in Spain cannot and should not be made applicable
in interpreting and applying the salutary provisions of a
modern labor legislation of American origin where the
industrial peace has always been the rule.
7. That the employer Toribio Teodoro was guilty of unfair
labor practice for discriminating against the National Labor
Union, Inc., and unjustly favoring the National Workers'
Brotherhood.
8. That the exhibits hereto attached are so inaccessible to the
respondents that even with the exercise of due diligence they
could not be expected to have obtained them and offered as
evidence in the Court of Industrial Relations.
9. That the attached documents and exhibits are of such far-
reaching importance and effect that their admission would
necessarily mean the modification and reversal of the
judgment rendered herein.
The petitioner, Ang Tibay, has filed an opposition both to the
motion for reconsideration of the respondent National Labor
Union, Inc.
In view of the conclusion reached by us and to be herein after
stead with reference to the motion for a new trial of the
respondent National Labor Union, Inc., we are of the opinion
that it is not necessary to pass upon the motion for
reconsideration of the Solicitor-General. We shall proceed to
dispose of the motion for new trial of the respondent labor
union. Before doing this, however, we deem it necessary, in
the interest of orderly procedure in cases of this nature, in
interest of orderly procedure in cases of this nature, to make
several observations regarding the nature of the powers of the
Court of Industrial Relations and emphasize certain guiding
principles which should be observed in the trial of cases
brought before it. We have re-examined the entire record of
the proceedings had before the Court of Industrial Relations
in this case, and we have found no substantial evidence that
the exclusion of the 89 laborers here was due to their union
affiliation or activity. The whole transcript taken contains
what transpired during the hearing and is more of a record of
contradictory and conflicting statements of opposing counsel,
with sporadic conclusion drawn to suit their own views. It is
evident that these statements and expressions of views of
counsel have no evidentiary value.
The Court of Industrial Relations is a special court whose
functions are specifically stated in the law of its creation
(Commonwealth Act No. 103). It is more an administrative
than a part of the integrated judicial system of the nation. It is
not intended to be a mere receptive organ of the Government.
Unlike a court of justice which is essentially passive, acting
only when its jurisdiction is invoked and deciding only cases
that are presented to it by the parties litigant, the function of
the Court of Industrial Relations, as will appear from perusal
of its organic law, is more active, affirmative and dynamic. It
not only exercises judicial or quasi-judicial functions in the
determination of disputes between employers and employees
but its functions in the determination of disputes between
employers and employees but its functions are far more
comprehensive and expensive. It has jurisdiction over the
entire Philippines, to consider, investigate, decide, and settle
any question, matter controversy or dispute arising between,
and/or affecting employers and employees or laborers, and
regulate the relations between them, subject to, and in
accordance with, the provisions of Commonwealth Act No.
103 (section 1). It shall take cognizance or purposes of
prevention, arbitration, decision and settlement, of any
industrial or agricultural dispute causing or likely to cause a
strike or lockout, arising from differences as regards wages,
shares or compensation, hours of labor or conditions of
tenancy or employment, between landlords and tenants or
farm-laborers, provided that the number of employees,
laborers or tenants of farm-laborers involved exceeds thirty,
and such industrial or agricultural dispute is submitted to the
Court by the Secretary of Labor or by any or both of the
parties to the controversy and certified by the Secretary of
labor as existing and proper to be by the Secretary of Labor
as existing and proper to be dealth with by the Court for the
sake of public interest. (Section 4, ibid.) It shall, before
hearing the dispute and in the course of such hearing,
endeavor to reconcile the parties and induce them to settle the
dispute by amicable agreement. (Paragraph 2, section 4, ibid.)
When directed by the President of the Philippines, it shall
investigate and study all industries established in a designated
locality, with a view to determinating the necessity and
fairness of fixing and adopting for such industry or locality a
minimum wage or share of laborers or tenants, or a maximum
"canon" or rental to be paid by the "inquilinos" or tenants or
less to landowners. (Section 5, ibid.) In fine, it may appeal to
voluntary arbitration in the settlement of industrial disputes;
may employ mediation or conciliation for that purpose, or
recur to the more effective system of official investigation
and compulsory arbitration in order to determine specific
controversies between labor and capital industry and in
agriculture. There is in reality here a mingling of executive
and judicial functions, which is a departure from the rigid
doctrine of the separation of governmental powers.
In the case of Goseco vs. Court of Industrial Relations et al.,
G.R. No. 46673, promulgated September 13, 1939, we had
occasion to joint out that the Court of Industrial Relations et
al., G. R. No. 46673, promulgated September 13, 1939, we
had occasion to point out that the Court of Industrial
Relations is not narrowly constrained by technical rules of
procedure, and the Act requires it to "act according to justice
and equity and substantial merits of the case, without regard
to technicalities or legal forms and shall not be bound by any
technicalities or legal forms and shall not be bound by any
technical rules of legal evidence but may inform its mind in
such manner as it may deem just and equitable." (Section 20,
Commonwealth Act No. 103.) It shall not be restricted to the
specific relief claimed or demands made by the parties to the
industrial or agricultural dispute, but may include in the
award, order or decision any matter or determination which
may be deemed necessary or expedient for the purpose of
settling the dispute or of preventing further industrial or
agricultural disputes. (section 13, ibid.) And in the light of
this legislative policy, appeals to this Court have been
especially regulated by the rules recently promulgated by the
rules recently promulgated by this Court to carry into the
effect the avowed legislative purpose. The fact, however, that
the Court of Industrial Relations may be said to be free from
the rigidity of certain procedural requirements does not mean
that it can, in justifiable cases before it, entirely ignore or
disregard the fundamental and essential requirements of due
process in trials and investigations of an administrative
character. There are primary rights which must be respected
even in proceedings of this character:
(1) The first of these rights is the right to a hearing, which
includes the right of the party interested or affected to present
his own case and submit evidence in support thereof. In the
language of Chief Hughes, in Morgan v. U.S., 304 U.S. 1, 58
S. Ct. 773, 999, 82 Law. ed. 1129, "the liberty and property
of the citizen shall be protected by the rudimentary
requirements of fair play.
(2) Not only must the party be given an opportunity to
present his case and to adduce evidence tending to establish
the rights which he asserts but the tribunal must consider the
evidence presented. (Chief Justice Hughes in Morgan v. U.S.
298 U.S. 468, 56 S. Ct. 906, 80 law. ed. 1288.) In the
language of this court in Edwards vs. McCoy, 22 Phil., 598,
"the right to adduce evidence, without the corresponding duty
on the part of the board to consider it, is vain. Such right is
conspicuously futile if the person or persons to whom the
evidence is presented can thrust it aside without notice or
consideration."
(3) "While the duty to deliberate does not impose the
obligation to decide right, it does imply a necessity which
cannot be disregarded, namely, that of having something to
support it is a nullity, a place when directly attached."
(Edwards vs. McCoy, supra.) This principle emanates from
the more fundamental is contrary to the vesting of unlimited
power anywhere. Law is both a grant and a limitation upon
power.
(4) Not only must there be some evidence to support a
finding or conclusion (City of Manila vs. Agustin, G.R. No.
45844, promulgated November 29, 1937, XXXVI O. G.
1335), but the evidence must be "substantial." (Washington,
Virginia and Maryland Coach Co. v. national labor Relations
Board, 301 U.S. 142, 147, 57 S. Ct. 648, 650, 81 Law. ed.
965.) It means such relevant evidence as a reasonable mind
accept as adequate to support a conclusion." (Appalachian
Electric Power v. National Labor Relations Board, 4 Cir., 93
F. 2d 985, 989; National Labor Relations Board v. Thompson
Products, 6 Cir., 97 F. 2d 13, 15; Ballston-Stillwater Knitting
Co. v. National Labor Relations Board, 2 Cir., 98 F. 2d 758,
760.) . . . The statute provides that "the rules of evidence
prevailing in courts of law and equity shall not be
controlling.' The obvious purpose of this and similar
provisions is to free administrative boards from the
compulsion of technical rules so that the mere admission of
matter which would be deemed incompetent inn judicial
proceedings would not invalidate the administrative order.
(Interstate Commerce Commission v. Baird, 194 U.S. 25, 44,
24 S. Ct. 563, 568, 48 Law. ed. 860; Interstate Commerce
Commission v. Louisville and Nashville R. Co., 227 U.S. 88,
93 33 S. Ct. 185, 187, 57 Law. ed. 431; United States v.
Abilene and Southern Ry. Co. S. Ct. 220, 225, 74 Law. ed.
624.) But this assurance of a desirable flexibility in
administrative procedure does not go far as to justify orders
without a basis in evidence having rational probative force.
Mere uncorroborated hearsay or rumor does not constitute
substantial evidence. (Consolidated Edison Co. v. National
Labor Relations Board, 59 S. Ct. 206, 83 Law. ed. No. 4,
Adv. Op., p. 131.)"
(5) The decision must be rendered on the evidence presented
at the hearing, or at least contained in the record and
disclosed to the parties affected. (Interstate Commence
Commission vs. L. & N. R. Co., 227 U.S. 88, 33 S. Ct. 185,
57 Law. ed. 431.) Only by confining the administrative
tribunal to the evidence disclosed to the parties, can the latter
be protected in their right to know and meet the case against
them. It should not, however, detract from their duty actively
to see that the law is enforced, and for that purpose, to use the
authorized legal methods of securing evidence and informing
itself of facts material and relevant to the controversy. Boards
of inquiry may be appointed for the purpose of investigating
and determining the facts in any given case, but their report
and decision are only advisory. (Section 9, Commonwealth
Act No. 103.) The Court of Industrial Relations may refer
any industrial or agricultural dispute or any matter under its
consideration or advisement to a local board of inquiry, a
provincial fiscal. a justice of the peace or any public official
in any part of the Philippines for investigation, report and
recommendation, and may delegate to such board or public
official such powers and functions as the said Court of
Industrial Relations may deem necessary, but such delegation
shall not affect the exercise of the Court itself of any of its
powers. (Section 10, ibid.)
(6) The Court of Industrial Relations or any of its judges,
therefore, must act on its or his own independent
consideration of the law and facts of the controversy, and not
simply accept the views of a subordinate in arriving at a
decision. It may be that the volume of work is such that it is
literally Relations personally to decide all controversies
coming before them. In the United States the difficulty is
solved with the enactment of statutory authority authorizing
examiners or other subordinates to render final decision, with
the right to appeal to board or commission, but in our case
there is no such statutory authority.
(7) The Court of Industrial Relations should, in all
controversial questions, render its decision in such a manner
that the parties to the proceeding can know the various issues
involved, and the reasons for the decision rendered. The
performance of this duty is inseparable from the authority
conferred upon it.
In the right of the foregoing fundamental principles, it is
sufficient to observe here that, except as to the alleged
agreement between the Ang Tibay and the National Worker's
Brotherhood (appendix A), the record is barren and does not
satisfy the thirst for a factual basis upon which to predicate,
in a national way, a conclusion of law.
This result, however, does not now preclude the concession
of a new trial prayed for the by respondent National Labor
Union, Inc., it is alleged that "the supposed lack of material
claimed by Toribio Teodoro was but a scheme adopted to
systematically discharged all the members of the National
Labor Union Inc., from work" and this avernment is desired
to be proved by the petitioner with the "records of the Bureau
of Customs and the Books of Accounts of native dealers in
leather"; that "the National Workers Brotherhood Union of
Ang Tibay is a company or employer union dominated by
Toribio Teodoro, the existence and functions of which are
illegal." Petitioner further alleges under oath that the exhibits
attached to the petition to prove his substantial avernments"
are so inaccessible to the respondents that even within the
exercise of due diligence they could not be expected to have
obtained them and offered as evidence in the Court of
Industrial Relations", and that the documents attached to the
petition "are of such far reaching importance and effect that
their admission would necessarily mean the modification and
reversal of the judgment rendered herein." We have
considered the reply of Ang Tibay and its arguments against
the petition. By and large, after considerable discussions, we
have come to the conclusion that the interest of justice would
be better served if the movant is given opportunity to present
at the hearing the documents referred to in his motion and
such other evidence as may be relevant to the main issue
involved. The legislation which created the Court of
Industrial Relations and under which it acts is new. The
failure to grasp the fundamental issue involved is not entirely
attributable to the parties adversely affected by the result.
Accordingly, the motion for a new trial should be and the
same is hereby granted, and the entire record of this case
shall be remanded to the Court of Industrial Relations, with
instruction that it reopen the case, receive all such evidence
as may be relevant and otherwise proceed in accordance with
the requirements set forth hereinabove. So ordered.
Avanceña, C. J., Villa-Real, Imperial, Diaz, Concepcion and
Moran, JJ., concur.
G.R. No. 174585 October 19, 2007
FEDERICO M. LEDESMA, JR., Petitioner, vs.
NATIONAL LABOR RELATIONS COMMISSION
(NLRC-SECOND DIVISION)
CHICO-NAZARIO, J.:
This a Petition for Review on Certiorari under Rule 45 of the
Revised Rules of Court, filed by petitioner Federico
Ledesma, Jr., seeking to reverse and set aside the Decision,1
dated 28 May 2005, and the Resolution,2 dated 7 September
2006, of the Court of Appeals in CA-G.R. SP No. 79724. The
appellate court, in its assailed Decision and Resolution,
affirmed the Decision dated 15 April 2003, and Resolution
dated 9 June 2003, of the National Labor Relations
Commission (NLRC), dismissing petitioner’s complaint for
illegal dismissal and ordering the private respondent
Philippine National Training Institute (PNTI) to reinstate
petitioner to his former position without loss of seniority
rights.
The factual and procedural antecedents of the instant petition
are as follows:
On 4 December 1998, petitioner was employed as a
bus/service driver by the private respondent on probationary
basis, as evidenced by his appointment.3 As such, he was
required to report at private respondent’s training site in
Dasmariñas, Cavite, under the direct supervision of its site
administrator, Pablo Manolo de Leon (de Leon).4
On 11 November 2000, petitioner filed a complaint against
de Leon for allegedly abusing his authority as site
administrator by using the private respondent’s vehicles and
other facilities for personal ends. In the same complaint,
petitioner also accused de Leon of immoral conduct allegedly
carried out within the private respondent’s premises. A copy
of the complaint was duly received by private respondent’s
Chief Accountant, Nita Azarcon (Azarcon).5
On 27 November 2000, de Leon filed a written report against
the petitioner addressed to private respondent’s Vice-
President for Administration, Ricky Ty (Ty), citing his
suspected drug use.
In view of de Leon’s report, private respondent’s Human
Resource Manager, Trina Cueva (HR Manager Cueva), on 29
November 2000, served a copy of a Notice to petitioner
requiring him to explain within 24 hours why no disciplinary
action should be imposed on him for allegedly violating
Section 14, Article IV of the private respondent’s Code of
Conduct.6
On 3 December 2000, petitioner filed a complaint for illegal
dismissal against private respondent before the Labor Arbiter.
In his Position Paper,7 petitioner averred that in view of the
complaint he filed against de Leon for his abusive conduct as
site administrator, the latter retaliated by falsely accusing
petitioner as a drug user. VP for Administration Ty, however,
instead of verifying the veracity of de Leon’s report, readily
believed his allegations and together with HR Manager
Cueva, verbally dismissed petitioner from service on 29
November 2000.
Petitioner alleged that he was asked to report at private
respondent’s main office in España, Manila, on 29 November
2000. There, petitioner was served by HR Manager Cueva a
copy of the Notice to Explain together with the copy of de
Leon’s report citing his suspected drug use. After he was
made to receive the copies of the said notice and report, HR
Manager Cueva went inside the office of VP for
Administration Ty. After a while, HR Manager Cueva came
out of the office with VP for Administration Ty. To
petitioner’s surprise, HR Manager Cueva took back the
earlier Notice to Explain given to him and flatly declared that
there was no more need for the petitioner to explain since his
drug test result revealed that he was positive for drugs. When
petitioner, however, asked for a copy of the said drug test
result, HR Manager Cueva told him that it was with the
company’s president, but she would also later claim that the
drug test result was already with the proper authorities at
Camp Crame.8
Petitioner was then asked by HR Manager Cueva to sign a
resignation letter and also remarked that whether or not
petitioner would resign willingly, he was no longer
considered an employee of private respondent. All these
events transpired in the presence of VP for Administration
Ty, who even convinced petitioner to just voluntarily resign
with the assurance that he would still be given separation
pay. Petitioner did not yet sign the resignation letter replying
that he needed time to think over the offers. When petitioner
went back to private respondent’s training site in Dasmariñas,
Cavite, to get his bicycle, he was no longer allowed by the
guard to enter the premises.9
On the following day, petitioner immediately went to St.
Dominic Medical Center for a drug test and he was found
negative for any drug substance. With his drug result on
hand, petitioner went back to private respondent’s main
office in Manila to talk to VP for Administration Ty and HR
Manager Cueva and to show to them his drug test result.
Petitioner then told VP for Administration Ty and HR
Manager Cueva that since his drug test proved that he was
not guilty of the drug use charge against him, he decided to
continue to work for the private respondent.10
On 2 December 2000, petitioner reported for work but he was
no longer allowed to enter the training site for he was
allegedly banned therefrom according to the guard on duty.
This incident prompted the petitioner to file the complaint for
illegal dismissal against the private respondent before the
Labor Arbiter.
For its part, private respondent countered that petitioner was
never dismissed from employment but merely served a
Notice to Explain why no disciplinary action should be filed
against him in view of his superior’s report that he was
suspected of using illegal drugs. Instead of filing an answer
to the said notice, however, petitioner prematurely lodged a
complaint for illegal dismissal against private respondent
before the Labor Arbiter.11
Private respondent likewise denied petitioner’s allegations
that it banned the latter from entering private respondent’s
premises. Rather, it was petitioner who failed or refused to
report to work after he was made to explain his alleged drug
use. Indeed, on 3 December 2000, petitioner was able to
claim at the training site his salary for the period of 16-30
November 2000, as evidenced by a copy of the pay voucher
bearing petitioner’s signature. Petitioner’s accusation that he
was no longer allowed to enter the training site was further
belied by the fact that he was able to claim his 13th month
pay thereat on 9 December 2000, supported by a copy of the
pay voucher signed by petitioner.12
On 26 July 2002, the Labor Arbiter rendered a Decision,13 in
favor of the petitioner declaring illegal his separation from
employment. The Labor Arbiter, however, did not order
petitioner’s reinstatement for the same was no longer
practical, and only directed private respondent to pay
petitioner backwages. The dispositive portion of the Labor
Arbiter’s Decision reads:
WHEREFORE, premises considered, the dismissal of the
[petitioner] is herein declared to be illegal. [Private
respondent] is directed to pay the complainant backwages
and separation pay in the total amount of One Hundred
Eighty Four Thousand Eight Hundred Sixty One Pesos and
Fifty Three Centavos (₱184, 861.53).14
Both parties questioned the Labor Arbiter’s Decision before
the NLRC. Petitioner assailed the portion of the Labor
Arbiter’s Decision denying his prayer for reinstatement, and
arguing that the doctrine of strained relations is applied only
to confidential employees and his position as a driver was not
covered by such prohibition.15 On the other hand, private
respondent controverted the Labor Arbiter’s finding that
petitioner was illegally dismissed from employment, and
insisted that petitioner was never dismissed from his job but
failed to report to work after he was asked to explain
regarding his suspected drug use.161âwphi1
On 15 April 2003, the NLRC granted the appeal raised by
both parties and reversed the Labor Arbiter’s Decision.17 The
NLRC declared that petitioner failed to establish the fact of
dismissal for his claim that he was banned from entering the
training site was rendered impossible by the fact that he was
able to subsequently claim his salary and 13th month pay.
Petitioner’s claim for reinstatement was, however, granted by
the NLRC. The decretal part of the NLRC Decision reads:
WHEREFORE, premises considered, the decision under
review is, hereby REVERSED and SET ASIDE, and another
entered, DISMISSING the complaint for lack of merit.
[Petitioner] is however, ordered REINSTATED to his former
position without loss of seniority rights, but WITHOUT
BACKWAGES.18
The Motion for Reconsideration filed by petitioner was
likewise denied by the NLRC in its Resolution dated 29
August 2003.19
The Court of Appeals dismissed petitioner’s Petition for
Certiorari under Rule 65 of the Revised Rules of Court, and
affirmed the NLRC Decision giving more credence to private
respondent’s stance that petitioner was not dismissed from
employment, as it is more in accord with the evidence on
record and the attendant circumstances of the instant case.20
Similarly ill-fated was petitioner’s Motion for
Reconsideration, which was denied by the Court of Appeals
in its Resolution issued on 7 September 2006. 21
Hence, this instant Petition for Review on Certiorari22 under
Rule 45 of the Revised Rules of Court, filed by petitioner
assailing the foregoing Court of Appeals Decision and
Resolution on the following grounds:
I.
WHETHER, THE HON. COURT OF APPEALS
COMMITTED A MISAPPREHENSION OF FACTS, AND
THE ASSAILED DECISION IS NOT SUPPORTED BY
THE EVIDENCE ON RECORD. PETITIONER’S
DISMISSAL WAS ESTABLISHED BY THE
UNCONTRADICTED EVIDENCES ON RECORD,
WHICH WERE MISAPPRECIATED BY PUBLIC
RESPONDENT NLRC, AND HAD THESE BEEN
CONSIDERED THE INEVITABLE CONCLUSION
WOULD BE THE AFFIRMATION OF THE LABOR
ARBITER’S DECISION FINDING ILLEGAL DISMISSAL
II.
WHETHER, THE HON. COURT OF APPEALS
SUBVERTED DUE PROCESS OF LAW WHEN IT DID
NOT CONSIDER THE EVIDENCE ON RECORD
SHOWING THAT THERE WAS NO JUST CAUSE FOR
DISMISSAL AS PETITIONER IS NOT A DRUG USER
AND THERE IS NO EVIDENCE TO SUPPORT THIS
GROUND FOR DISMISSAL.
III.
WHETHER, THE HON. COURT OF APPEALS
COMMITTED REVERSIBLE ERROR OF LAW IN NOT
FINDING THAT RESPONDENTS SUBVERTED
PETITIONER’S RIGHT TO DUE PROCESS OF THE
LAW.23
Before we delve into the merits of this case, it is best to stress
that the issues raised by petitioner in this instant petition are
factual in nature which is not within the office of a Petition
for Review.24 The raison d’etre for this rule is that, this Court
is not a trier of facts and does not routinely undertake the re-
examination of the evidence presented by the contending
parties for the factual findings of the labor officials who have
acquired expertise in their own fields are accorded not only
respect but even finality, and are binding upon this Court.25
However, when the findings of the Labor Arbiter contradict
those of the NLRC, departure from the general rule is
warranted, and this Court must of necessity make an
infinitesimal scrunity and examine the records all over again
including the evidence presented by the opposing parties to
determine which findings should be preferred as more
conformable with evidentiary facts.26
The primordial issue in the petition at bar is whether the
petitioner was illegally dismissed from employment.
The Labor Arbiter found that the petitioner was illegally
dismissed from employment warranting the payment of his
backwages. The NLRC and the Court of Appeals found
otherwise.
In reversing the Labor Arbiter’s Decision, the NLRC
underscored the settled evidentiary rule that before the
burden of proof shifts to the employer to prove the validity of
the employee’s dismissal, the employee must first sufficiently
establish that he was indeed dismissed from employment.
The petitioner, in the present case, failed to establish the fact
of his dismissal. The NLRC did not give credence to
petitioner’s allegation that he was banned by the private
respondent from entering the workplace, opining that had it
been true that petitioner was no longer allowed to enter the
training site when he reported for work thereat on 2
December 2000, it is quite a wonder he was able to do so the
very next day, on 3 December 2000, to claim his salary.27
The Court of Appeals validated the above conclusion reached
by the NLRC and further rationated that petitioner’s positive
allegations that he was dismissed from service was negated
by substantial evidence to the contrary. Petitioner’s
averments of what transpired inside private respondent’s
main office on 29 November 2000, when he was allegedly
already dismissed from service, and his claim that he was
effectively banned from private respondent’s premises are
belied by the fact that he was able to claim his salary for the
period of 16-30 November 2000 at private respondent’s
training site.
Petitioner, therefore, is now before this Court assailing the
Decisions handed down by the NLRC and the Court of
Appeals, and insisting that he was illegally dismissed from
his employment. Petitioner argues that his receipt of his
earned salary for the period of 16-30 November 2000, and his
13th month pay, is neither inconsistent with nor a negation of
his allegation of illegal dismissal. Petitioner maintains that he
received his salary and benefit only from the guardhouse, for
he was already banned from the work premises.
We are not persuaded.
Well-entrenched is the principle that in order to establish a
case before judicial and quasi-administrative bodies, it is
necessary that allegations must be supported by substantial
evidence.28 Substantial evidence is more than a mere scintilla.
It means such relevant evidence as a reasonable mind might
accept as adequate to support a conclusion.29
In the present case, there is hardly any evidence on record so
as to meet the quantum of evidence required, i.e., substantial
evidence. Petitioner’s claim of illegal dismissal is supported
by no other than his own bare, uncorroborated and, thus, self-
serving allegations, which are also incoherent, inconsistent
and contradictory.
Petitioner himself narrated that when his presence was
requested on 29 November 2000 at the private respondent’s
main office where he was served with the Notice to Explain
his superior’s report on his suspected drug use, VP for
Administration Ty offered him separation pay if he will just
voluntarily resign from employment. While we do not
condone such an offer, neither can we construe that petitioner
was dismissed at that instance. Petitioner was only being
given the option to either resign and receive his separation
pay or not to resign but face the possible disciplinary charges
against him. The final decision, therefore, whether to
voluntarily resign or to continue working still, ultimately
rests with the petitioner. In fact, by petitoner’s own
admission, he requested from VP for Administration Ty more
time to think over the offer.
Moreover, the petitioner alleged that he was not allowed to
enter the training site by the guard on duty who told him that
he was already banned from the premises. Subsequently,
however, petitioner admitted in his Supplemental Affidavit
that he was able to return to the said site on 3 December
2000, to claim his 16-30 November 2000 salary, and again on
9 December 2000, to receive his 13th month pay. The fact
alone that he was able to return to the training site to claim
his salary and benefits raises doubt as to his purported ban
from the premises.
Finally, petitioner’s stance that he was dismissed by private
respondent was further weakened with the presentation of
private respondent’s payroll bearing petitioner’s name
proving that petitioner remained as private respondent’s
employee up to December 2000. Again, petitioner’s assertion
that the payroll was merely fabricated for the purpose of
supporting private respondent’s case before the NLRC cannot
be given credence. Entries in the payroll, being entries in the
course of business, enjoy the presumption of regularity under
Rule 130, Section 43 of the Rules of Court. It is therefore
incumbent upon the petitioner to adduce clear and convincing
evidence in support of his claim of fabrication and to
overcome such presumption of regularity.30 Unfortunately,
petitioner again failed in such endeavor.
On these scores, there is a dearth of evidence to establish the
fact of petitioner’s dismissal. We have scrupulously
examined the records and we found no evidence presented by
petitioner, other than his own contentions that he was indeed
dismissed by private respondent.
While this Court is not unmindful of the rule that in cases of
illegal dismissal, the employer bears the burden of proof to
prove that the termination was for a valid or authorized cause
in the case at bar, however, the facts and the evidence did not
establish a prima facie case that the petitioner was dismissed
from employment.31 Before the private respondent must bear
the burden of proving that the dismissal was legal, petitioner
must first establish by substantial evidence the fact of his
dismissal from service. Logically, if there is no dismissal,
then there can be no question as to the legality or illegality
thereof.
In Machica v. Roosevelt Services Center, Inc.,32 we had
underscored that the burden of proving the allegations rest
upon the party alleging, to wit:
The rule is that one who alleges a fact has the burden of
proving it; thus, petitioners were burdened to prove their
allegation that respondents dismissed them from their
employment. It must be stressed that the evidence to prove
this fact must be clear, positive and convincing. The rule
that the employer bears the burden of proof in illegal
dismissal cases finds no application here because the
respondents deny having dismissed the petitioners.33
In Rufina Patis Factory v. Alusitain,34 this Court took the
occasion to emphasize:
It is a basic rule in evidence, however, that the burden of
proof is on the part of the party who makes the allegations –
ei incumbit probatio, qui dicit, non qui negat. If he claims a
right granted by law, he must prove his claim by
competent evidence, relying on the strength of his own
evidence and not upon the weakness of that of his
opponent.35
It is true that the Constitution affords full protection to labor,
and that in light of this Constitutional mandate, we must be
vigilant in striking down any attempt of the management to
exploit or oppress the working class. However, it does not
mean that we are bound to uphold the working class in every
labor dispute brought before this Court for our resolution.
The law in protecting the rights of the employees, authorizes
neither oppression nor self-destruction of the employer. It
should be made clear that when the law tilts the scales of
justice in favor of labor, it is in recognition of the inherent
economic inequality between labor and management. The
intent is to balance the scales of justice; to put the two parties
on relatively equal positions. There may be cases where the
circumstances warrant favoring labor over the interests of
management but never should the scale be so tilted if the
result is an injustice to the employer. Justitia nemini neganda
est -- justice is to be denied to none.36
WHEREFORE, premises considered, the instant Petition is
DENIED. The Court of Appeals Decision dated 28 May 2005
and its Resolution dated 7 September 2006 in CA-G.R. SP
No. 79724 are hereby AFFIRMED. Costs against the
petitioner.SO ORDERED.
[ GR No. L-49280, Apr 30, 1980 ]
LUZ G. CRISTOBAL v. EMPLOYEES’ COMPENSATION
COMMISSION
186 Phil. 324
MAKASIAR, J.:
Petition for review on certiorari of the June 21, 1978
decision of the Employees' Compensation Commission filed
by petitioner in forma pauperis.
The deceased, Fortunato S. Cristobal, was employed as
Supervising Information Officer II of the National Science
Development Board (NSDB for short) based in Bicutan,
Taguig, Rizal. His original appointment was dated February
26, 1964 (p. 16, ECC rec.). On April 8, 1976, he developed
loose bowel movement which later worsened and his
excrement was marked with fresh blood. Self-administered
medications were made but symptoms persisted until April
22, 1976 when he was brought to the Hospital of Infant Jesus
and was there treated by Dr. Willie Lagdameo, who
diagnosed his illness as rectal malignancy. On May 28,
1976, he was discharged with improved conditions but just
one year thereafter, he was again confined at the UST
Hospital for the same ailment. A second operation became
necessary because of the recurrence of malignancy in the
pelvis. Despite earnest medical efforts, he succumbed to his
illness on May 27, 1977 (p. 6, rec.).
The petitioner herein, as the decedent's widow and
beneficiary, filed with the Government Service Insurance
System (GSIS for short), a claim for income (death) benefits
under Presidential Decree No. 626, as amended. The said
claim was denied by the GSIS and in a subsequent request for
reconsideration, the System reiterated its decision stating that
-
"Under the present law on compensation, the listed
occupational diseases are compensable when the conditions
set therein are satisfied. It also allows certain diseases to be
compensable whenever the claimant is able to prove that the
risks of contracting such diseases were increased by the
working conditions attendant to the deceased's
employment. This is provided under Sec. 1(b) Rule III of the
Rules and Regulations Implementing Presidential Decree No.
626 which took effect on January 1, 1975. As far as the
degree of proof is concerned, the claimant must be able to
show at least by substantial evidence that the development of
the ailment was brought largely by the working conditions
present in the nature of employment. In the case of your
husband, it will be noted that the ailment which resulted in
his death on May 27, 1977 was Rectal Malignancy. This
ailment, not being listed as an occupational disease,
therefore, required such degree of proof as mentioned
above. On the basis, however, of the papers and evidence on
record which you have submitted, it appears that you have
not established that the deceased's employment has any direct
causal relationship with the contraction of the ailment. While
it is admitted that the aforementioned ailment supervened in
the course of the deceased's employment as Supervising
Information Officer II in the National Science Development
Board, Bicutan, Taguig, Rizal, there has not been any
showing that the same directly arose therefrom or resulted
from the nature thereof" (GSIS letter dated February 20, 1978
denying the request of petitioner for reconsideration).
The petitioner appealed to the ECC, which affirmed the
decision of the GSIS.
Hence, this petition.
In resolving the issue of compensability, the respondents
herein failed to consider these outstanding facts patent from
the records. The deceased, as Supervising Officer II of the
NSDB, was actually assigned to the Printing Department of
the said agency where he was exposed to various chemicals
and intense heat. This fact was corroborated by the affidavit
of one Angel Peres, a co-employee of the deceased, to the
effect that -
"I know personally Fortunato Cristobal because he was my
Supervisor in the Bureau of Printing;
"During the employment of Fortunato Cristobal at the Bureau
of Printing, he contracted sickness which was later diagnosed
as ano-rectal cancer which caused his death;
"Fortunato Cristobal continued working at the
aforementioned Bureau of Printing even when he was already
suffering from a rectal illness and he had been complaining to
me that said illness became more painful whenever he
performs his job in the Bureau;
"I also noticed that he oftentimes eat food in the Bureau
without washing his hands;
"The place where Fortunato Cristobal was assigned in the
Bureau of Printing is very unhygienic and polluted with
chemicals and he oftentimes complain to me that the odor of
the chemicals make him feel dizzy always;
"Fortunato Cristobal always handle chemicals in the Bureau
of Printing while in the performance of his duties" (Annex C,
Petition).
These statements find relevance in the medical certificate
issued by Dr. Rufo A. Guzman stating that "the illness may
be aggravated by the unhygienic conditions in the Bureau of
Printing where he works. Handling of chemicals for printing,
eating without proper washing of hands, tension due to the
pressure of work, plus neglected personal necessity which
may be attributed to the inadequate facilities in the Bureau of
Printing" (Annex D, Petition).
Undisputed is the fact that the deceased entered the
government free from any kind of disease. Likewise, it is
admitted that the deceased husband's ailment supervened in
the course of his employment with the NSDB. The ECC,
however, failed to appreciate the evidence submitted by the
petitioner to substantiate her claim. In denying the claim, it
merely relied on the fact that the certification issued by the
physician of the deceased failed to indicate the actual causes
or factors which led to the decedent's rectal malignancy. This
Court, however, is of the opinion that the affidavit of Angel
Peres substantiated by the medical certificate issued by Dr.
Rufo A. Guzman (in relation to the medical findings of Dr.
Willie Lagdameo of the Hospital of Infant Jesus [p. 17, ECC
rec.] and Dr. Mercia C. Abrenica, its own medical officer [p.
9, ECC rec.]) sufficiently establish that the risk of contracting
the disease is increased, if not caused, by the working
conditions prevailing in the respondent's (NSDB) premises.
In the case of Eliseo vs. Workmen's Compensation
Commission (84 SCRA 188), this Court held:
"We cannot agree with the private respondent that the claim
of the petitioner is without any factual or legal basis nor with
the respondent Workmen's Compensation Commission that
there is no evidence substantial enough to show that this
leukemia which caused the death of Isabel Eliseo has a causal
relation to the nature of her work with the respondent G & S
Manufacturing Corp. It may be true that the job of a reviser
or quality controller, which was the work of claimant Isabel
Eliseo, does not entail physical exertion. It may also be true
that all that is required is alertness of the eye to see and detect
any defect or flaw in a garment being revised and to point out
those defects for correction or repair before a garment can
pass for distribution and use. However, it must be admitted
that the nature of the work of the claimant required her to
deal with textiles or fabrics which involved chemicals of
various kinds and composition and this exposure of the
deceased to these chemicals in private respondent's
establishment probably led to the development of the disease
of leukemia or at least aggravated the illness of the claimant
from which she died as a result. In Laron vs. Workmen's
Compensation Commission, et al., 73 SCRA 84, We held that
in testing the evidence or the relation between the injury or
disease and the employment, probability and not certainty, is
the touchstone, reiterated in National Housing Corp. vs.
WCC, 79 SCRA 281."
Section 1(b), Rule III of the Implementing Rules and
regulations of P.D. 626 provides -
"For sickness and the resulting disability or death to be
compensable, the sickness must be the result of an
occupational disease listed under Annex 'A' of these Rules
with the conditions set therein satisfied; otherwise, proof
must be shown that the risk of contracting the disease is
increased by the working conditions."
This Court is convinced that the petitioner, by clear and
convincing evidence, has adequately satisfied the second part
of the aforequoted provision, following the theory of
increased risk as laid down in the case of Amparo vs. GSIS,
ECC Case No. 0046 (August 18, 1976) and reiterated in
Corales vs. ECC, 84 SCRA 762 (August 25, 1978).
Furthermore, in the case of Sepulveda vs. Employees'
Compensation Commission (84 SCRA 771 [August 25,
1978]), this Court stated that -
"x x x the respondent Commission, under Resolution No. 223
dated March 16, 1977, adopted, as a policy, the institution of
a more compassionate interpretation of the restrictive
provisions of Presidential Decree No. 626, as amended, by its
administering agencies, the Social Security System and the
Government Service Insurance System, with respect to,
among others, Myocardial Infarction and other borderline
cases. x x x"
In the instant case, it is evident that rectal cancer is one of
those borderline cases. Likewise, it is clear that the purpose
of the resolution is to extend the applicability of the
provisions of P.D. 626, thereby affording a greater number of
employees the opportunity to avail of the benefits under the
law. This is in consonance with the avowed policy of the
State, as mandated by the Constitution and embodied in the
New Labor Code, to give maximum aid and protection to
labor. The Employees' Compensation Commission, like the
defunct Court of Industrial Relations and the Workmen's
Compensation Commission, is under obligation at all times to
give meaning and substance to the constitutional guarantees
in favor of the working man, more specially, the social justice
guarantee; for otherwise, these guarantees would be merely
"a lot of meaningless patter" (Santos vs. WCC, 75 SCRA 371
[1977]).
As pointed out by no less than the respondent ECC itself in
its Comment dated January 5, 1978 -
"It may not be amiss to mention that the ECC has time and
again expanded the list of occupational diseases. This comes
about after continuing studies made by the ECC. Indeed,
cancer has already been included as a qualified occupational
disease in certain cases --
Occupational Disease
π
Nature of Employment
1. Cancer of the epithelial lining of the bladder (Papilloma of
the bladder)
Work involving exposure to alphanapthylamine, beta-
napthylamine or benzidine or any part of the salts; and
auramine or magenta;
2. Cancer epithellomatons or ulceration of the skin or of the
corneal surface of the eye due to tar, pitch, bitumen, mineral
oil or paraffin or any compound product or residue of any of
these substances
The use of handling of, exposure to, tar, pitch, bitumen,
mineral oil (include paraffin) soot or any compound product
or residue of any of these substances
xx xxxx xx
16. Cancer of the stomach and other lymphatic and blood-
forming vessels; nasal cavity and sinuses;
Woodworkers; wood products industry carpenters, loggers and
employees in pulp and paper mills and plywood mills;
17. Cancer of the lungs, liver and brain.
Vinyl chloride workers, plastic workers.
"Worth nothing is the fact that the above types of cancer have
no known etiology. Yet, they are regarded as
occupational. The clear implication is that the law merely
requires a reasonable work-connection" (pp. 59-60, rec.,
italics supplied).
From the foregoing statements, it is palpable that the
respondent ECC recognizes, as it is duty bound to, the policy
of the State to afford maximum aid and protection to
labor. Therefore, to require the petitioner to show the actual
causes or factors which led to the decedent's rectal
malignancy would not be consistent with this liberal
interpretation. It is of universal acceptance that practically all
kinds of cancer belong to the class of clinical diseases whose
exact etiology, cause or origin, is unknown. It is in this
regard that the evidence submitted by the petitioner deserves
serious consideration.

As persuasively pointed out by the petitioner in her

memorandum addressed to this Court dated April 6, 1979 -
"x x x x

"The respondent GSIS said, 'It is unfortunate that despite the

relatively fast pace in the march of progress, science to this
day has not given us the cause of cancer' (p. 11, GSIS
Comment). Hence medical scientists are still venturing into
the unknown, so to speak. x x x

"x x x x.

"Evidently, GSIS has trodden the grounds on an unsure

foot. It would seem to insinuate that petitioner must blame
science for having not yet discovered the actual cause of her
husband's fatal illness. Why is it then that petitioner must be
required to prove causation - that her husband's cancer was
caused by his employment - if science itself is ignorant of the
cause of cancer? x x x."
WE give due consideration to the respondent's application of
P.D. 626 in ruling on the claim since petitioner's husband
died on May 27, 1977, after the effectivity of the provisions
of the New Labor Code on Employees'
Compensation. Moreover, medical records did not disclose
the date when the deceased employee actually contracted the
disease, rectal malignancy having been discovered only on
April 22, 1976 when the deceased sought hospital
confinement.

From the above discussion, it is undeniable that the petitioner

is entitled to her claim.

WHEREFORE, THE DECISION OF RESPONDENT

EMPLOYEES' COMPENSATION COMMISSION IS
HEREBY SET ASIDE AND THE RESPONDENT GSIS IS
HEREBY DIRECTED
1 TO PAY THE PETITIONER THE SUM OF
TWELVE THOUSAND (P12,000.00) PESOS AS
DEATH BENEFITS;
2
3 TO REIMBURSE PETITIONER MEDICAL,
SURGICAL AND HOSPITAL EXPENSES DULY
SUPPORTED BY PROPER RECEIPTS;
4
5 TO PAY PETITIONER THE SUM OF SEVEN
HUNDRED (P700.00) PESOS AS FUNERAL
EXPENSES; AND
6
7 TO PAY THE PETITIONER ATTORNEY'S FEES
EQUIVALENT TO TEN (10%) PERCENT OF THE
DEATH BENEFITS.
SO ORDERED.