ASSOCIACION DE AGRICULTORES DE TALISAY-SILAY, INC.
, TRINO MONTINOLA, mind, the provision of Section 1 to the effect that "the unrefined sugar . . . as well as by-
FERNANDO CUENCA, EDUARDO LEDESMA, EMILIO JISON, NILO LIZARES, NICOLAS
JALANDONI and SECRETARY OF LABOR, plaintiffs-appellees,
vs.
TALISAY-SILAY MILLING CO., INC., and LUZON SURETY CO., I,
G.R. No. L-19937, 1979 April 3
En Banc
RESOLUTION
BARREDO, J:
Motion for reconsideration signed by Attorney Camilo L. Sabio on his own behalf and on
behalf of the law firm of Attorneys Montemayor & Dimaano as "counsel for the laborers"
involved in this case, but not joined by any attorney of the Ministry of Labor, for the
reconsideration, for the grounds therein discussed, of the decision of this Court dated
February 19, 1979.
Brushing aside as of secondary importance the issue of whether or not private counsel
who has signed the subject motion for reconsideration and whose authority to appear
for the Minister of Labor was not affirmed by the Minister when asked to do so by the
Court, has the personality to appear in this case as counsel of record, and attending
instead to the grounds vehemently and lengthily expounded in said motion in order that
no argument as to the merits of the cause of the laborers involved herein may not remain
unresolved, the Court has opted to take up the points raised by counsel Sabio which, to
be sure, are not really new.
In synthesis, the basic argument advanced by counsel is that in effect Republic Act 809
enjoins that, first, contracts between the millers and the planters in all sugar milling
districts entered into subsequent to June 22, 1952, the date of its effectivity, may not be
taken into account in determining whether or not there was a majority of planters in the
district with written milling contracts with the central during the crop years material to
this case, for purposes of the Act's application, and, second, that should any such
contracts be entered into, the rate of sharing between the miller and the planters should
not be less than that prescribed in Section 1 of the Act. As may be seen in Our decision,
the Court has already fully considered the points raised by counsel and has found them
to be insufficiently persuasive, albeit quite impressive and to a certain degree plausible.
We are fully convinced, however, that the language of the pertinent provisions of the Act,
notwithstanding the individual opinions of certain members of Congress quoted by
counsel, does not evince a definite intent to deny to the planters and millers the freedom
of contract to the extent indicated in the motion. Such a sacred fundamental right of the
parties may he denied only expressly or by indubitable implication from the terms and
tenor of the statute itself and not in the light of the arguments of particular legislators
during the debates in the course of its enactment, which can be inconclusive. To Our
products" produced in the district "shall be divided between the central and the
planters" in the proportions therein prescribed "in the absence of written milling
agreements between the majority of planters and the millers" unequivocally means that
when there are such written milling agreements, the section would not apply. Notably,
this language does not distinguish between contracts in force at the time of the
enforcement of the Act, on the one hand, and contracts to be executed thereafter, on the
other. To construe said provision as contemplating only the contracts then in existence
and about to expire to the exclusion of new ones to be executed later is to read into the
law something it does not suggest at all, considering particularly that in the contrary
sense, it would be tantamount to an injunction against the execution of new contracts,
which would be violative of the fundamental right of freedom of contract as
distinguished from the constitutional prohibition against impairment of contractual
obligations. The Court cannot see its way clear to the adoption of such a construction,
much as it feels that any doubt, if any exists, must be resolved in favor of giving labor the
maximum benefit derivable from social legislations, such as Republic Act 809 should be
deemed to be. Indeed, if social justice is to remain a noble and worthy ideal, it must be
practiced without unnecessary infringement of the inalienable liberties consecrated in
the fundamental law of the land for the promotion of the general welfare, unless there is
clear and unmistakable warrant for the exertion of state power. We have said in Our
decision that in appropriate instances social justice may be more compelling and
imperious than police power where labor is involved, but the basis for such occasions
must be definite not equivocal, to avoid the imbalance of rights and opportunities which
it is precisely the aim of social justice to equalize for the protection of the poor and the
underprivileged to which the working class belongs.
Moreover, We take judicial notice of the fact that in actuality, contracts have been
entered into with rates of sharing different from those prescribed in Section 1 in
practically all the milling districts in the Philippines after the passage of Republic Act
809. Such contemporary construction of the law in actual practice, if indeed challenged
by labor in some instances, only proves that the construction proposed by counsel is not
commonly accepted by the others concerned, much less indubitable.
As regards the plaint that under the terms of Our judgment, payment of money
corresponding to the laborers should be made to the Asociacion or the planters who in
turn are sentenced to pay the laborers, instead of said money being paid directly to the
laborers thru the Minister of Labor, all that needs be stated is that under Section 1 of the
Act, the primary distribution is between the miller and the planters, and the requirement
in Section 9 thereof that "any increase in the participation granted the planters .. shall be
divided between the planter and his laborer" in the proportion therein fixed is evidently
predicated on the fact that as the employer, the planter is the one supposed to pay the
laborers, albeit it is provided that such payment must be done under the supervision of
the Minister of Labor pursuant to such orders for the enforcement of the said provision
as he may issue, obviously to insure the due identity of and full payment to all the
1
laborers concerned. To avoid however, that the money paid to the Asociacion or the
planters purportedly for the share of the laborers fixed in the law may serve its purpose,
it is understood that no part of the 60% of the money to be paid to the planters shall be
available to the planter concerned until after the Ministry of Labor shall have certified
that all his laborers entitled thereto have been fully paid.
In view of the foregoing, the Court resolved to DENY the motion for reconsideration
aforementioned, and in order to terminate once and for all this litigation of more than a
quarter of a century. We hereby declare this DENIAL to be FINAL, and Our decision may
now be executed. Accordingly, with the same finality, We hereby DENY the motions of
the Asociacion, the CENTRAL and the amicus curiae Attorneys Tañada, Sanchez, Tañada
and Tañada, for extension of time to file their own respective motions for
reconsideration.
156 Phil. 489
FERNANDO, J.:
This appeal by certiorari from a resolution of Court of Industrial Relations, if typical,
yields the impression that in the realm of management there is not too-marked an
appreciation for the quality of mercy. What is sought is a reversal of an order of
respondent Court reinstating one Fidel Gotangco dismissed by his employer, petitioner
Philippine Air Lines, for having been found guilty of the breach of trust and violation of
the rules and regulations of the company. So it was decreed, considering what was felt to
be the severity of dismissal. Petitioner, however, is firm and unyielding in its insistence
that this was an appropriate case for terminating employment. It would support its
stand by an invocation of Manila Trading and Supply Company v. Zulueta.[1] As will
hereinafter be shown, such a reliance is misplaced not only in terms of the opinion
therein rendered but likewise in the light of the trend of later rulings of this Tribunal.
What poses an even more insurmountable obstacle is that such an attitude of firm and
unyielding insistence on the traditional concept of management rights is at war with the
new provision on security of tenure in the present Constitution.[2] There is no occasion
for reversal then.
There is no dispute as to the facts. The order now sought to be reviewed started with the
nature of the case as one seeking authority for the dismissal of Fidel Gotangco, with the
employer, petitioner Philippine Air Lines, presenting in evidence an exhibit referring to
the confiscation of a piece of lead material from his person at one of the gates of the PAL
Airfield compound and a signed statement by him, taken at an investigation, wherein he
admitted his apprehension by a company security guard with a lead material he intended
to take home for his personal use. Then the order continues: "On the whole, the
evidence of respondent is uncontroverted. And no question, Fidel Gotango is guilty of
breach of trust and violation of the rules and regulations of his employer. But
respondent seeks authority to dismiss him on the basis of such guilt. It is believed,
however, that in this particular case dismissal is too severe a penalty to impose on Fidel
Gotangco for trying to slip out a lead material belonging to respondent. Because (1) it is
his first time to commit the charge in question for the duration of his 17 years of service
with respondent; (2) the cost of said material, considering its size, is negligible (8" x 10"
x 1/2"); (3) respondent did not lose anything after all as the lead material was retrieved
in time; (4) the ignominy and mental torture undergone by Gotangco is practically
punishment in itself; and (5) he has been under preventive suspension to date. For
which reason, it would seem more equitable to retain than dismiss him."[3]
Petitioner was therefore ordered "to reinstate Fidel Gotangco immediately, without
backwages."[4] So it decided the matter. There appears to be nothing unreasonable. An
offense was committed. It was not condoned. A penalty was imposed, but one
proportionate to the gravity of the misdeed. Petitioner, as indicated by his appeal,
appears to be unsatisfied. It insists on dismissal. We do not see it that way.
So rigid an approach must find its justification in a statute, of which there is none, or in a
pronouncement of this, Court that speaks unequivocally. Petitioner is hopeful that
Manila Trading and Supply Company v. Zulueta did so. It is laboring under a
misapprehension. A more careful analysis ought to have made that clear. There is
nothing in it that requires us to hold that on the matter of termination of employment,
management must have its way and respondent Court ignored. Our later decisions,
especially so those penned by the same illustrious Justice Laurel, indicate the contrary.
The pith of the matter is then simply this, that when respondent Court after a
conscientious appraisal of the facts did reach a conclusion that was far from arbitrary
and was impressed with an element of generosity to which the law should not be a
stranger, there is no valid ground for us to hold otherwise. Even on the assumption that
it were not thus before, it is so now. There is, as noted, in the Constitution the guarantee
of security of tenure. The appeal must fail then.
1. The sole error assigned by petitioner is that respondent Court should not order the
reinstatement of Fidel Gotangco in the light of its undisputed finding that he "is guilty of
breach of trust and violation of the rules and regulations of his employer."[5] It sought to
lend plausibility to such a contention by asserting in its brief: "The principle that the
Court of Industrial Relations cannot arrogate upon itself the authority to order an
employer to reinstate a dismissed employee who admittedly has breached the trust of
his employer is now so well woven in our jurisprudence that only a grave abuse of
judicial discretion can unsettle the rule. This principle was so clearly articulated in one
case (Manila Trading & Supply Co. v. Zulueta, 69 Phil. 486) where this Honorable Court,
through the late J. Laurel, declared - 'The whole controversy is centered around the right
of the Court of Industrial Relations to order the readmission of a laborer who, it is
admitted, had been found derelict in the performance of his duties towards his
employer. We concede that the right of an employer to freely select or discharge his
employees, is subject to regulation by the State basically in the exercise of its paramount
police power. (Com. Act Nos. 103 and 213). But much as we should expand beyond
2
economic orthodoxy, we hold that an employer cannot legally be compelled to continue
with the employment of a person who admittedly was guilty of misfeasance or
malfeasance towards his employer, and whose continuance in the service of the latter is
patently inimical to his interests.' "[6] Its tone of certitude is unwarranted. The very
excerpt cited speaks of the paramount police power as a limitation on the right of an
employer to freely select or discharge his employees. Moreover, while there was an
admission that misfeasance or malfeasance could be a ground for dismissal, the last
sentence thereof reads: "The law, in protecting the rights of the laborer, authorizes
neither oppression nor self-destruction of the employer."[7] Where, therefore, it could, be
shown that the result would be neither oppressive nor self-destructive, it cannot be
asserted dogmatically that an outright termination of employment is justified.
The Manila Trading decision was promulgated on January 30, 1940. Before the end of
the year, in another Manila Trading Company case, Manila Trading Supply
Co. v. Philippine Labor Union,[8] the same Justice Laurel made clear that the earlier
doctrine did not call for automatic application. Thus: "It is admitted, however, that an
employer cannot legally be compelled to continue an employee or laborer in the service
when a justifiable cause for his discharge exists, but since under section 19 of
Commonwealth Act No. 103 the, authority of the Court of Industrial Relations to require
his continuance in the service is incidental to the pendency of an industrial dispute
before it, it necessarily follows that the said court has the power to determine whether
such cause exists. In the instant case, the Court of Industrial Relations having reached
the conclusion that the dismissal of Andres Dimapiles is groundless and unjustified, the
doctrine in Manila Trading & Supply Co. v. Zulueta, et al., G. R. No. 46853, promulgated
January 30, 1940, is not applicable. Upon the other hand, and as was observed in the
case of Ang Tibay v. The Court of Industrial Relations, G. R. No. 46496, promulgated May
29, 1939, 'the policy of laissez faire has to some extent given way to the assumption by
the Government of the right of intervention even in contractual relations affected with
public interest.' "[9] What is more, three other cases before the end of the year,[10] the
opinions in which were penned by the same distinguished jurist, left no doubt as to the
flexibility of the approach to be followed whenever the first Manila Trading Supply
decision was invoked. For each and every one of them, he sustained respondent Court of
Industrial Relations in its conclusion that dismissal was not warranted. After liberation,
in a 1948 decision, Manila Hotel. Co. v. Court of Industrial Relations,[11] one of his equally
discerning colleagues, likewise a former delegate to the 1934 Constitutional Convention,
Justice Briones, did announce in unmistakable language, that the first Manila Trading
Company decision should not lend itself as a justification for outright dismissal
independently of the circumstances of each case. For him, speaking as ponente, "es, sin
embargo, también cierto que hay casos en que la destitución o suspensión de un empleado
resulta caprichosa, o injustificada, o de otro modo ilegal, en cuyo caso el obrero debe ser
protegido por el Estado mediante la agenda o instrumento que tenga para ello que en
nuestro caso es la Corte de Relaciones Industriales."[12] A host of later decisions attests to
the acceptance by this Court of the conclusion reached by the Court of Industrial
Relations in the discharge of the task assigned to it to protect the rights of labor. [13] Nor is
this all. As pointed out in Phil. Educational Institution v. MLQSEA Faculty
Association:[14] "It was Justice Laurel who, in the first decision, promulgated in 1939,
concerning the scope of the power of this Court to alter factual conclusions reached by
the Court of Industrial Relations, expressed the view that we should not disturb 'the
findings of facts made by the Court of Industrial Relations * * *.' A year and two months
later on November, 1940, he was much more definite. Such findings 'are conclusive and
will not be disturbed in the absence of a showing [of abuse of] discretion.' "[15] Such a
formulation was followed in twenty-nine later decisions, the latest of which, prior to
Philippine Educational Institution, was Laguna College v. Court of Industrial
Relations,[16] the ponente being the present Chief Justice.
Greater familiarity therefore with the approach consistently followed by Justice Laurel in
labor controversies ought to have cautioned petitioner against the misplaced reliance on
the excerpt from the first Manila Trading case, which as made clear in the foregoing, was
not even subjected to an accurate appraisal. The sole assigned error is therefore without
merit.
2. The futility of this appeal becomes even more apparent considering the express
provision in the Constitution already noted, requiring the State to assure workers
"security of tenure."[17] It was not that specific in the 1935 Charter. The mandate was
limited to the State affording "protection to labor, especially to working women and
minors, * * *."[18] If by virtue of the above, it would not be legally justifiable to reverse the
order of reinstatement, it becomes even more readily manifest that such a conclusion is
even more unwarranted now. To reach it would be to show lack of fealty to a
constitutional command. This is not to say that dismissal for cause is now outlawed. No
such thing is intimated in this opinion. It is merely to stress that where respondent
Court of Industrial Relations, in the light of all the circumstances disclosed, particularly
that it was a first offense after seventeen years of service, reached the conclusion, neither
arbitrary nor oppressive, that dismissal was too severe a penalty, this Court should not
view the matter differently. That is to conform to the ideal of the New Society, the
establishment of which was so felicitously referred to by the First Lady as the
Compassionate Society.[19]
3. Much less should the result reached by this Court lend itself to the interpretation that
there has been a condonation of theft. From the facts as found by respondent Court
accepted by petitioner, the offense was "breach of trust and violation of the rules and
regulations of the company." A lead material of negligible size, in the opinion of
respondent Court, its measurement being eight inches by ten inches, with thickness of
one-half inch, not shown to be of any use to the company, hardly of any pecuniary worth,
was picked up by the employee in question, but thereafter taken from him by a security
guard. That was all that transpired. It would be too harsh an appraisal to view it as
constituting theft. So the parties have considered the matter. If stress is laid on this
aspect of the case, it is only to ward off any unwarranted inference that this Court was
not properly mindful of the more serious consequences that should ordinarily follow a
3
dishonest act amounting to a crime.
WHEREFORE, the appealed order of respondent Court of April 12, 1965, reinstating
Fidel Gotangco without backwages, as sustained in a resolution of May 19, 1965, is
affirmed. Costs against Philippine Air Lines.
G.R. No. L-69870 November 29, 1988
NATIONAL SERVICE CORPORATION (NASECO) AND ARTURO L. PEREZ, petitioners,
vs.
THE HONORABLE THIRD DIVISION, NATIONAL LABOR RELATIONS COMMISSION,
MINISTRY OF LABOR AND EMPLOYMENT, MANILA AND EUGENIA C.
CREDO, respondents.
G.R. No. 70295 November 29,1988
EUGENIA C. CREDO, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, NATIONAL SERVICES CORPORATION
AND ARTURO L. PEREZ, respondents.
The Chief Legal Counsel for respondents NASECO and Arturo L. Perez.
Melchor R. Flores for petitioner Eugenia C. Credo.
PADILLA, J.:
Consolidated special civil actions for certiorari seeking to review the decision * of the
Third Division, National Labor Relations Commission in Case No. 11-4944-83 dated 28
November 1984 and its resolution dated 16 January 1985 denying motions for
reconsideration of said decision.
Eugenia C. Credo was an employee of the National Service Corporation (NASECO), a
domestic corporation which provides security guards as well as messengerial, janitorial
and other similar manpower services to the Philippine National Bank (PNB) and its
agencies. She was first employed with NASECO as a lady guard on 18 July 1975. Through
the years, she was promoted to Clerk Typist, then Personnel Clerk until she became Chief
of Property and Records, on 10 March 1980. 1
Sometime before 7 November 1983, Credo was administratively charged by Sisinio S.
Lloren, Manager of Finance and Special Project and Evaluation Department of NASECO,
stemming from her non-compliance with Lloren's memorandum, dated 11 October 1983,
regarding certain entry procedures in the company's Statement of Billings Adjustment.
Said charges alleged that Credo "did not comply with Lloren's instructions to place some
corrections/additional remarks in the Statement of Billings Adjustment; and when
[Credo] was called by Lloren to his office to explain further the said instructions, [Credo]
showed resentment and behaved in a scandalous manner by shouting and uttering
remarks of disrespect in the presence of her co-employees." 2
On 7 November 1983, Credo was called to meet Arturo L. Perez, then Acting General
Manager of NASECO, to explain her side before Perez and NASECO's Committee on
Personnel Affairs in connection with the administrative charges filed against her. After
said meeting, on the same date, Credo was placed on "Forced Leave" status for 1 5 days,
effective 8 November 1983. 3
Before the expiration of said 15-day leave, or on 18 November 1983, Credo filed a
complaint, docketed as Case No. 114944-83, with the Arbitration Branch, National
Capital Region, Ministry of Labor and Employment, Manila, against NASECO for placing
her on forced leave, without due process. 4
Likewise, while Credo was on forced leave, or on 22 November 1983, NASECO's
Committee on Personnel Affairs deliberated and evaluated a number of past acts of
misconduct or infractions attributed to her. 5 As a result of this deliberation, said
committee resolved:
1. That, respondent [Credo] committed the following offenses in the Code of Discipline,
viz:
OFFENSE vs. Company Interest & Policies
No. 3 — Any discourteous act to customer, officer and employee of client company or
officer of the Corporation.
OFFENSE vs. Public Moral
No. 7 — Exhibit marked discourtesy in the course of official duties or use of profane or
insulting language to any superior officer.
OFFENSE vs. Authority
No. 3 — Failure to comply with any lawful order or any instructions of a superior officer.
2. That, Management has already given due consideration to respondent's [Credo]
scandalous actuations for several times in the past. Records also show that she was
reprimanded for some offense and did not question it. Management at this juncture, has
already met its maximum tolerance point so it has decided to put an end to respondent's
[Credo] being an undesirable employee. 6
The committee recommended Credo's termination, with forfeiture of benefits. 7
On 1 December 1983, Credo was called age to the office of Perez to be informed that she
was being charged with certain offenses. Notably, these offenses were those which
NASECO's Committee on Personnel Affairs already resolved, on 22 November 1983 to
have been committed by Credo.
In Perez's office, and in the presence of NASECO's Committee on Personnel Affairs, Credo
was made to explain her side in connection with the charges filed against her; however,
due to her failure to do so, 8 she was handed a Notice of Termination, dated 24
November 1983, and made effective 1 December 1983. 9Hence, on 6 December 1983,
Credo filed a supplemental complaint for illegal dismissal in Case No. 11-4944-83,
alleging absence of just or authorized cause for her dismissal and lack of opportunity to
be heard. 10
After both parties had submitted their respective position papers, affidavits and other
documentary evidence in support of their claims and defenses, on 9 May 1984, the labor
arbiter rendered a decision: 1) dismissing Credo's complaint, and 2) directing NASECO to
pay Credo separation pay equivalent to one half month's pay for every year of service.11
Both parties appealed to respondent National Labor Relations Commission (NLRC)
which, on 28 November 1984, rendered a decision: 1) directing NASECO to reinstate
Credo to her former position, or substantially equivalent position, with six (6) months'
4
backwages and without loss of seniority rights and other privileges appertaining thereto,
and 2) dismissing Credo's claim for attorney's fees, moral and exemplary damages. As a
consequence, both parties filed their respective motions for reconsideration, 12 which
the NLRC denied in a resolution of 16 January 1985. 13
Hence, the present recourse by both parties. In G.R. No. 68970, petitioners challenge as
grave abuse of discretion the dispositive portion of the 28 November 1984 decision
which ordered Credo's reinstatement with backwages. 14 Petitioners contend that in
arriving at said questioned order, the NLRC acted with grave abuse of discretion in
finding that: 1) petitioners violated the requirements mandated by law on termination,
2) petitioners failed in the burden of proving that the termination of Credo was for a
valid or authorized cause, 3) the alleged infractions committed by Credo were not
proven or, even if proved, could be considered to have been condoned by petitioners,
and 4) the termination of Credo was not for a valid or authorized cause. 15
On the other hand, in G.R. No. 70295, petitioner Credo challenges as grave abuse of
discretion the dispositive portion of the 28 November 1984 decision which dismissed
her claim for attorney's fees, moral and exemplary damages and limited her right to
backwages to only six (6) months. 16
As guidelines for employers in the exercise of their power to dismiss employees for just
causes, the law provides that:
Section 2. Notice of dismissal. — Any employer who seeks to dismiss a worker shall
furnish him a written notice stating the particular acts or omission constituting the
grounds for his dismissal.
xxx xxx xxx
Section 5. Answer and Hearing. — The worker may answer the allegations stated against
him in the notice of dismissal within a reasonable period from receipt of such notice. The
employer shall afford the worker ample opportunity to be heard and to defend himself
with the assistance of his representative, if he so desires.
Section 6. Decision to dismiss. — The employer shall immediately notify a worker in
writing of a decision to dismiss him stating clearly the reasons therefor. 17
These guidelines mandate that the employer furnish an employee sought to be dismissed
two (2) written notices of dismissal before a termination of employment can be legally
effected. These are the notice which apprises the employee of the particular acts or
omissions for which his dismissal is sought and the subsequent notice which informs the
employee of the employer's decision to dismiss him.
Likewise, a reading of the guidelines in consonance with the express provisions of law on
protection to labor 18 (which encompasses the right to security of tenure) and the
broader dictates of procedural due process necessarily mandate that notice of the
employer's decision to dismiss an employee, with reasons therefor, can only be issued
after the employer has afforded the employee concerned ample opportunity to be heard
and to defend himself.
In the case at bar, NASECO did not comply with these guidelines in effecting Credo's
dismissal. Although she was apprised and "given the chance to explain her side" of the
charges filed against her, this chance was given so perfunctorily, thus rendering illusory
Credo's right to security of tenure. That Credo was not given ample opportunity to be
heard and to defend herself is evident from the fact that the compliance with the
injunction to apprise her of the charges filed against her and to afford her a chance to
prepare for her defense was dispensed in only a day. This is not effective compliance
with the legal requirements aforementioned.
The fact also that the Notice of Termination of Credo's employment (or the decision to
dismiss her) was dated 24 November 1983 and made effective 1 December 1983 shows
that NASECO was already bent on terminating her services when she was informed on 1
December 1983 of the charges against her, and that any hearing which NASECO thought
of affording her after 24 November 1983 would merely be pro forma or an exercise in
futility.
Besides, Credo's mere non-compliance with Lorens memorandum regarding the entry
procedures in the company's Statement of Billings Adjustment did not warrant the
severe penalty of dismissal of the NLRC correctly held that:
... on the charge of gross discourtesy, the CPA found in its Report, dated 22 November
1983 that, "In the process of her testimony/explanations she again exhibited a conduct
unbecoming in front of NASECO Officers and argued to Mr. S. S. Lloren in a sarcastic and
discourteous manner, notwithstanding, the fact that she was inside the office of the
Acctg. General Manager." Let it be noted, however, that the Report did not even describe
how the so called "conduct unbecoming" or "discourteous manner" was done by
complainant. Anent the "sarcastic" argument of complainant, the purported
transcript 19 of the meeting held on 7 November 1983 does not indicate any sarcasm on
the part of complainant. At the most, complainant may have sounded insistent or
emphatic about her work being more complete than the work of Ms. de Castro, yet, the
complaining officer signed the work of Ms. de Castro and did not sign hers.
As to the charge of insubordination, it may be conceded, albeit unclear, that complainant
failed to place same corrections/additional remarks in the Statement of Billings
Adjustments as instructed. However, under the circumstances obtaining, where
complainant strongly felt that she was being discriminated against by her superior in
relation to other employees, we are of the considered view and so hold, that a reprimand
would have sufficed for the infraction, but certainly not termination from services. 20
As this Court has ruled:
... where a penalty less punitive would suffice, whatever missteps may be committed by
labor ought not to be visited with a consequence so severe. It is not only because of the
law's concern for the working man. There is, in addition, his family to consider.
Unemployment brings untold hardships and sorrows on those dependent on the wage-
earner. 21
Of course, in justifying Credo's termination of employment, NASECO claims as additional
lawful causes for dismissal Credo's previous and repeated acts of insubordination,
discourtesy and sarcasm towards her superior officers, alleged to have been committed
from 1980 to July 1983. 22
If such acts of misconduct were indeed committed by Credo, they are deemed to have
been condoned by NASECO. For instance, sometime in 1980, when Credo allegedly
"reacted in a scandalous manner and raised her voice" in a discussion with NASECO's
Acting head of the Personnel Administration 23 no disciplinary measure was taken or
5
meted against her. Nor was she even reprimanded when she allegedly talked 'in a
shouting or yelling manner" with the Acting Manager of NASECO's Building Maintenance
and Services Department in 1980 24 or when she allegedly "shouted" at NASECO's
Corporate Auditor "in front of his subordinates displaying arrogance and unruly
behavior" in 1980, or when she allegedly shouted at NASECO's Internal Control
Consultant in 1981. 25 But then, in sharp contrast to NASECO's penchant for ignoring the
aforesaid acts of misconduct, when Credo committed frequent tardiness in August and
September 1983, she was reprimanded. 26
Even if the allegations of improper conduct (discourtesy to superiors) were satisfactorily
proven, NASECO's condonation thereof is gleaned from the fact that on 4 October 1983,
Credo was given a salary adjustment for having performed in the job "at least
[satisfactorily]" 27 and she was then rated "Very Satisfactory" 28as regards job
performance, particularly in terms of quality of work, quantity of work, dependability,
cooperation, resourcefulness and attendance.
Considering that the acts or omissions for which Credo's employment was sought to be
legally terminated were insufficiently proved, as to justify dismissal, reinstatement is
proper. For "absent the reason which gave rise to [the employee's] separation from
employment, there is no intention on the part of the employer to dismiss the employee
concerned." 29 And, as a result of having been wrongfully dismissed, Credo is entitled to
three (3) years of backwages without deduction and qualification. 30
However, while Credo's dismissal was effected without procedural fairness, an award of
exemplary damages in her favor can only be justified if her dismissal was effected in a
wanton, fraudulent, oppressive or malevolent manner. 31 A judicious examination of the
record manifests no such conduct on the part of management. However, in view of the
attendant circumstances in the case, i.e., lack of due process in effecting her dismissal, it
is reasonable to award her moral damages. And, for having been compelled to litigate
because of the unlawful actuations of NASECO, a reasonable award for attorney's fees in
her favor is in order.
In NASECO's comment 32 in G.R. No. 70295, it is belatedly argued that the NLRC has no
jurisdiction to order Credo's reinstatement. NASECO claims that, as a government
corporation (by virtue of its being a subsidiary of the National Investment and
Development Corporation (NIDC), a subsidiary wholly owned by the Philippine National
Bank (PNB), which in turn is a government owned corporation), the terms and
conditions of employment of its employees are governed by the Civil Service Law, rules
and regulations. In support of this argument, NASECO cites National Housing Corporation
vs. JUCO, 33 where this Court held that "There should no longer be any question at this
time that employees of government-owned or controlled corporations are governed by
the civil service law and civil service rifles and regulations."
It would appear that, in the interest of justice, the holding in said case should not be
given retroactive effect, that is, to cases that arose before its promulgation on 17 January
1985. To do otherwise would be oppressive to Credo and other employees similarly
situated, because under the same 1973 Constitution ,but prior to the ruling in National
Housing Corporation vs. Juco, this Court had recognized the applicability of the Labor
Code to, and the authority of the NLRC to exercise jurisdiction over, disputes involving
terms and conditions of employment in government owned or controlled corporations,
among them, the National Service Corporation (NASECO).<äre||anº•1àw> 34
Furthermore, in the matter of coverage by the civil service of government-owned or
controlled corporations, the 1987 Constitution starkly varies from the 1973 Constitution,
upon which National Housing Corporation vs. Juco is based. Under the 1973 Constitution,
it was provided that:
The civil service embraces every branch, agency, subdivision, and instrumentality of the
Government, including every government-owned or controlled corporation. ... 35
On the other hand, the 1987 Constitution provides that:
The civil service embraces all branches, subdivisions, instrumentalities, and agencies of
the Government, including government-owned or controlled corporations with original
charter. 36 (Emphasis supplied)
Thus, the situations sought to be avoided by the 1973 Constitution and expressed by the
Court in the National Housing . Corporation case in the following manner —
The infirmity of the respondents' position lies in its permitting a circumvention or
emasculation of Section 1, Article XII-B of the constitution. It would be possible for a
regular ministry of government to create a host of subsidiary corporations under the
Corporation Code funded by a willing legislature. A government-owned corporation
could create several subsidiary corporations. These subsidiary corporations would enjoy
the best of two worlds. Their officials and employees would be privileged individuals,
free from the strict accountability required by the Civil Service Decree and the
regulations of the Commission on Audit. Their incomes would not be subject to the
competitive restrains of the open market nor to the terms and conditions of civil service
employment. Conceivably, all government-owned or controlled corporations could be
created, no longer by special charters, but through incorporations under the general law.
The Constitutional amendment including such corporations in the embrace of the civil
service would cease to have application. Certainly, such a situation cannot be allowed to
exist. 37
appear relegated to relative insignificance by the 1987 Constitutional provision that the
Civil Service embraces government-owned or controlled corporations with original
charter; and, therefore, by clear implication, the Civil Service does not include
government-owned or controlled corporations which are organized as subsidiaries of
government-owned or controlled corporations under the general corporation law.
The proceedings in the 1986 Constitutional Commission also shed light on the
Constitutional intent and meaning in the use of the phrase "with original charter." Thus
THE PRESIDING OFFICER (Mr. Trenas) Commissioner Romulo is recognized.
MR. ROMULO. I beg the indulgence of the Committee. I was reading the wrong provision.
I refer to Section 1, subparagraph I which reads:
The Civil Service embraces all branches, subdivisions, instrumentalities, and agencies of
the government, including government-owned or controlled corporations.
My query: Is Philippine Airlines covered by this provision? MR. FOZ. Will the
Commissioner please state his previous question?
MR. ROMULO. The phrase on line 4 of Section 1, subparagraph 1, under the Civil Service
Commission, says: "including government-owned or controlled corporations.' Does that
6
include a corporation, like the Philippine Airlines which is government-owned or
controlled?
MR. FOZ. I would like to throw a question to the Commissioner. Is the Philippine Airlines
controlled by the government in the sense that the majority of stocks are owned by the
government?
MR. ROMULO. It is owned by the GSIS. So, this is what we might call a tertiary
corporation. The GSIS is owned by the government. Would this be covered because the
provision says "including government-owned or controlled corporations."
MR. FOZ. The Philippine Airlines was established as a private corporation. Later on, the
government, through the GSIS, acquired the controlling stocks. Is that not the correct
situation?
MR. ROMULO. That is true as Commissioner Ople is about to explain. There was
apparently a Supreme Court decision that destroyed that distinction between a
government-owned corporation created under the Corporation Law and a government-
owned corporation created by its own charter.
MR. FOZ. Yes, we recall the Supreme Court decision in the case of NHA vs. Juco to the
effect that all government corporations irrespective of the manner of creation, whether
by special charter or by the private Corporation Law, are deemed to be covered by the
civil service because of the wide-embracing definition made in this section of the existing
1973 Constitution. But we recall the response to the question of Commissioner Ople that
our intendment in this provision is just to give a general description of the civil service.
We are not here to make any declaration as to whether employees of government-owned
or controlled corporations are barred from the operation of laws, such as the Labor Code
of the Philippines.
MR. ROMULO. Yes.
MR. OPLE. May I be recognized, Mr. Presiding Officer, since my name has been mentioned
by both sides.
MR. ROMULO. I yield part of my time.
THE PRESIDING OFFICER (Mr.Trenas). Commissioner Ople is recognized.
MR. OPLE. In connection with the coverage of the Civil Service Law in Section 1 (1), may I
volunteer some information that may be helpful both to the interpellator and to the
Committee. Following the proclamation of martial law on September 21, 1972, this issue
of the coverage of the Labor Code of the Philippines and of the Civil Service Law almost
immediately arose. I am, in particular, referring to the period following the coming into
force and effect of the Constitution of 1973, where the Article on the Civil Service was
supposed to take immediate force and effect. In the case of LUZTEVECO, there was a
strike at the time. This was a government-controlled and government-owned
corporation. I think it was owned by the PNOC with just the minuscule private shares
left. So, the Secretary of Justice at that time, Secretary Abad Santos, and myself sat down,
and the result of that meeting was an opinion of the Secretary of Justice which 9 became
binding immediately on the government that government corporations with original
charters, such as the GSIS, were covered by the Civil Service Law and corporations spun
off from the GSIS, which we called second generation corporations functioning as private
subsidiaries, were covered by the Labor Code. Samples of such second generation
corporations were the Philippine Airlines, the Manila
Hotel and the Hyatt. And that demarcation worked very well. In fact, all of these
companies I have mentioned as examples, except for the Manila Hotel, had collective
bargaining agreements. In the Philippine Airlines, there were, in fact, three collective
bargaining agreements; one, for the ground people or the PALIA one, for the flight
attendants or the PASAC and one for the pilots of the ALPAC How then could a
corporation like that be covered by the Civil Service law? But, as the Chairman of the
Committee pointed out, the Supreme Court decision in the case of NHA vs. Juco unrobed
the whole thing. Accordingly, the Philippine Airlines, the Manila Hotel and the Hyatt are
now considered under that decision covered by the Civil Service Law. I also recall that in
the emergency meeting of the Cabinet convened for this purpose at the initiative of the
Chairman of the Reorganization Commission, Armand Fabella, they agreed to allow the
CBA's to lapse before applying the full force and effect of the Supreme Court decision. So,
we were in the awkward situation when the new government took over. I can agree with
Commissioner Romulo when he said that this is a problem which I am not exactly sure
we should address in the deliberations on the Civil Service Law or whether we should be
content with what the Chairman said that Section 1 (1) of the Article on the Civil Service
is just a general description of the coverage of the Civil Service and no more.
Thank you, Mr. Presiding Officer.
MR. ROMULO. Mr. Presiding Officer, for the moment, I would be satisfied if the
Committee puts on records that it is not their intent by this provision and the phrase
"including government-owned or controlled corporations" to cover such companies as
the Philippine Airlines.
MR. FOZ. Personally, that is my view. As a matter of fact, when this draft was made, my
proposal was really to eliminate, to drop from the provision, the phrase "including
government- owned or controlled corporations."
MR. ROMULO. Would the Committee indicate that is the intent of this provision?
MR. MONSOD. Mr. Presiding Officer, I do not think the Committee can make such a
statement in the face of an absolute exclusion of government-owned or controlled
corporations. However, this does not preclude the Civil Service Law to prescribe
different rules and procedures, including emoluments for employees of proprietary
corporations, taking into consideration the nature of their operations. So, it is a general
coverage but it does not preclude a distinction of the rules between the two types of
enterprises.
MR. FOZ. In other words, it is something that should be left to the legislature to decide. As
I said before, this is just a general description and we are not making any declaration
whatsoever.
MR. MONSOD. Perhaps if Commissioner Romulo would like a definitive understanding of
the coverage and the Gentleman wants to exclude government-owned or controlled
corporations like Philippine Airlines, then the recourse is to offer an amendment as to
the coverage, if the Commissioner does not accept the explanation that there could be a
distinction of the rules, including salaries and emoluments.
7
MR. ROMULO. So as not to delay the proceedings, I will reserve my right to submit such
an amendment.
xxx xxx xxx
THE PRESIDING OFFICE (Mr. Trenas) Commissioner Romulo is recognized.
MR. ROMULO. On page 2, line 5, I suggest the following amendment after "corporations":
Add a comma (,) and the phrase EXCEPT THOSE EXERCISING PROPRIETARY
FUNCTIONS.
THE PRESIDING OFFICER (Mr. Trenas). What does the Committee say?
SUSPENSION OF SESSION
MR. MONSOD. May we have a suspension of the session?
THE PRESIDING OFFICER (Mr. Trenas). The session is suspended.
It was 7:16 p.m.
RESUMPTION OF SESSION
At 7:21 p.m., the session was resumed.
THE PRESIDING OFFICER (Mr. Trenas). The session is resumed.
Commissioner Romulo is recognized.
MR. ROMULO. Mr. Presiding Officer, I am amending my original proposed amendment to
now read as follows: "including government-owned or controlled corporations WITH
ORIGINAL CHARTERS." The purpose of this amendment is to indicate that government
corporations such as the GSIS and SSS, which have original charters, fall within the ambit
of the civil service. However, corporations which are subsidiaries of these chartered
agencies such as the Philippine Airlines, Manila Hotel and Hyatt are excluded from the
coverage of the civil service.
THE PRESIDING OFFICER (Mr. Trenas). What does the Committee say?
MR. FOZ. Just one question, Mr. Presiding Officer. By the term "original charters," what
exactly do we mean?
MR. ROMULO. We mean that they were created by law, by an act of Congress, or by
special law.
MR. FOZ. And not under the general corporation law.
MR. ROMULO. That is correct. Mr. Presiding Officer.
MR. FOZ. With that understanding and clarification, the Committee accepts the
amendment.
MR. NATIVIDAD. Mr. Presiding officer, so those created by the general corporation law
are out.
MR. ROMULO. That is correct: 38
On the premise that it is the 1987 Constitution that governs the instant case because it is
the Constitution in place at the time of decision thereof, the NLRC has jurisdiction to
accord relief to the parties. As an admitted subsidiary of the NIDC, in turn a subsidiary of
the PNB, the NASECO is a government-owned or controlled corporation without original
charter.
Dr. Jorge Bocobo, in his Cult of Legalism, cited by Mr. Justice Perfecto in his concurring
opinion in Gomez vs. Government Insurance Board (L-602, March 31, 1947, 44 O.G. No. 8,
pp. 2687, 2694; also published in 78 Phil. 221) on the effectivity of the principle of social
justice embodied in the 1935 Constitution, said:
Certainly, this principle of social justice in our Constitution as generously conceived and
so tersely phrased, was not included in the fundamental law as a mere popular gesture. It
was meant to (be) a vital, articulate, compelling principle of public policy. It should be
observed in the interpretation not only of future legislation, but also of all laws already
existing on November 15, 1935. It was intended to change the spirit of our laws, present
and future. Thus, all the laws which on the great historic event when the Commonwealth
of the Philippines was born, were susceptible of two interpretations strict or liberal,
against or in favor of social justice, now have to be construed broadly in order to
promote and achieve social justice. This may seem novel to our friends, the advocates of
legalism but it is the only way to give life and significance to the above-quoted principle
of the Constitution. If it was not designed to apply to these existing laws, then it would be
necessary to wait for generations until all our codes and all our statutes shall have been
completely charred by removing every provision inimical to social justice, before the
policy of social justice can become really effective. That would be an absurd conclusion. It
is more reasonable to hold that this constitutional principle applies to all legislation in
force on November 15, 1935, and all laws thereafter passed.
WHEREFORE, in view of the foregoing, the challenged decision of the NLRC is AFFIRMED
with modifications. Petitioners in G.R. No. 69870, who are the private respondents in G.R.
No. 70295, are ordered to: 1) reinstate Eugenia C. Credo to her former position at the
time of her termination, or if such reinstatement is not possible, to place her in a
substantially equivalent position, with three (3) years backwages, from 1 December
1983, without qualification or deduction, and without loss of seniority rights and other
privileges appertaining thereto, and 2) pay Eugenia C. Credo P5,000.00 for moral
damages and P5,000.00 for attorney's fees.
If reinstatement in any event is no longer possible because of supervening events,
petitioners in G.R. No. 69870, who are the private respondents in G.R. No. 70295 are
ordered to pay Eugenia C. Credo, in addition to her backwages and damages as above
described, separation pay equivalent to one-half month's salary for every year of service,
to be computed on her monthly salary at the time of her termination on 1 December
1983.
SO ORDERED.
PLDT vs. NLRC
G.R. No. 80609 August 23, 1988
Facts:
Abucay, a traffic operator of the PLDT, was accused by two complainants of having
demanded and received from them the total amount of P3,800.00 in consideration of her
promise to facilitate approval of their applications for telephone installation.
Investigated and heard, she was found guilty as charged and accordingly separated from
the service. She went to the Ministry of Labor and Employment claiming she had been
illegally removed. After consideration of the evidence and arguments of the parties, the
company was sustained and the complaint was dismissed for lack of merit. Nevertheless,
the dispositive portion of labor arbiter’s decision declared:
WHEREFORE, the instant complaint is dismissed for lack of merit.
8
Considering that Dr. Bangayan and Mrs. Martinez are not totally blameless in the light of
the fact that the deal happened outhide the premises of respondent company and that
their act of giving P3,800.00 without any receipt is tantamount to corruption of public
officers, complainant must be given one month pay for every year of service as financial
assistance.
Both the petitioner and the private respondent appealed to the National Labor Relations
Board, which upheld the said decision in toto and dismissed the appeals. The private
respondent took no further action, thereby impliedly accepting the validity of her
dismissal. The petitioner, however, is now before us to question the affirmance of the
above- quoted award as having been made with grave abuse of discretion.
The position of the petitioner is simply stated: It is conceded that an employee illegally
dismissed is entitled to reinstatement and backwages as required by the labor laws.
However, an employee dismissed for cause is entitled to neither reinstatement nor
backwages and is not allowed any relief at all because his dismissal is in accordance with
law. In the case of the private respondent, she has been awarded financial assistance
equivalent to ten months pay corresponding to her 10 year service in the company
despite her removal for cause. She is, therefore, in effect rewarded rather than punished
for her dishonesty, and without any legal authorization or justification. The award is
made on the ground of equity and compassion, which cannot be a substitute for law.
Moreover, such award puts a premium on dishonesty and encourages instead of
deterring corruption.
For its part, the public respondent claims that the employee is sufficiently punished with
her dismissal. The grant of financial assistance is not intended as a reward for her
offense but merely to help her for the loss of her employment after working faithfully
with the company for ten years. In support of this position, the Solicitor General cites the
cases of Firestone Tire and Rubber Company of the Philippines v. Lariosa and Soco v.
Mercantile Corporation of Davao, where the employees were dismissed for cause but
were nevertheless allowed separation pay on grounds of social and compassionate
justice.
Issue: WON Separation pay is proper.
Held:
We hold that henceforth separation pay shall be allowed as a measure of social justice
only in those instances where the employee is validly dismissed for causes other than
serious misconduct or those reflecting on his moral character. Where the reason for the
valid dismissal is, for example, habitual intoxication or an offense involving moral
turpitude, like theft or illicit sexual relations with a fellow worker, the employer may not
be required to give the dismissed employee separation pay, or financial assistance, or
whatever other name it is called, on the ground of social justice.
A contrary rule would, as the petitioner correctly argues, have the effect, of rewarding
rather than punishing the erring employee for his offense. And we do not agree that the
punishment is his dismissal only and that the separation pay has nothing to do with the
wrong he has committed. Of course it has. Indeed, if the employee who steals from the
company is granted separation pay even as he is validly dismissed, it is not unlikely that
he will commit a similar offense in his next employment because he thinks he can expect
a like leniency if he is again found out. This kind of misplaced compassion is not going to
do labor in general any good as it will encourage the infiltration of its ranks by those who
do not deserve the protection and concern of the Constitution.
The policy of social justice is not intended to countenance wrongdoing simply because it
is committed by the underprivileged. At best it may mitigate the penalty but it certainly
will not condone the offense. Compassion for the poor is an imperative of every humane
society but only when the recipient is not a rascal claiming an undeserved privilege.
Social justice cannot be permitted to be refuge of scoundrels any more than can equity be
an impediment to the punishment of the guilty. Those who invoke social justice may do
so only if their hands are clean and their motives blameless and not simply because they
happen to be poor. This great policy of our Constitution is not meant for the protection of
those who have proved they are not worthy of it, like the workers who have tainted the
cause of labor with the blemishes of their own character.
Applying the above considerations, we hold that the grant of separation pay in the case at
bar is unjustified. The private respondent has been dismissed for dishonesty, as found by
the labor arbiter and affirmed by the NLRC and as she herself has impliedly admitted.
The fact that she has worked with the PLDT for more than a decade, if it is to be
considered at all, should be taken against her as it reflects a regrettable lack of loyalty
that she should have strengthened instead of betraying during all of her 10 years of
service with the company. If regarded as a justification for moderating the penalty of
dismissal, it will actually become a prize for disloyalty, perverting the meaning of social
justice and undermining the efforts of labor to cleanse its ranks of all undesirables.
Petition granted
G.R. No. Nos. L-34069-70 February 28, 1973
B.F. GOODRICH PHILIPPINES, INC., Petitioner, vs. B.F. GOODRICH (MARIKINA
FACTORY) CONFIDENTIAL & SALARIED EMPLOYEES UNION-NATU, B.F. GOODRICH
(MAKATI OFFICE) CONFIDENTIAL & SALARIED EMPLOYEES UNION-NATU, and
COURT OF INDUSTRIAL RELATIONS, Respondents.
Manuel O. Chan for petitioner.
Domingo E. de Lara and Associates for respondents.
FERNANDO, J.:
The specific question raised impressed with an aspect of novelty, sustained with vigor
and plausibility, persuaded this Court that the petition was worth looning into. It is
whether the determination of an unfair labor practice case, brought against respondent-
unions, must precede the holding of a certification election. A negative response came
from respondent Court of Industrial Relations, through Judge Ansberto Paredes. His
order, affirmed by respondent Court en banc, is sought to be nullified in this certiorari
proceeding. The answer filed on behalf of respondent-unions would sustain its validity.
What is more, it called attention to what is characterized as a consistent pattern of anti-
union practices on the part of petitioner intended to defeat the rights of labor to
collective bargaining. A careful study of the specific legal issue posed, namely, whether
the existence of an unfair labor practice case against a labor organization, consisting of
an illegal strike, would suffice to call for the postponement of a proposed certification
9
election, incidentally started at the instance of petitioner itself, yields the same
conclusion reached by respondent Court. The objectives of the Industrial Peace
Act 1 would be sooner attained if, at the earliest opportunity, the employees, all of them
of an appropriate collective bargaining unit, be polled to determine which labor
organization should be its exclusive representative. Moreover, the discretion on the
matter vested in respondent Court is rarely interfered with. We dismiss the
petition.chanroblesvirtualawlibrarychanrobles virtual law library
It was shown in the petition that on February 27, 1971, one Rodolfo Pajaro, as President
of B.F. Goodrich (Makati Office) Confidential and Salaried Employees Union-NATU, sent a
letter to the petitioner, seeking recognition as the bargaining agent of such employees so
that thereafter there could be negotiations for a collective contract. 2Similarly, on the
same date, one Pablo C. Fulgar, as President of B.F. Goodrich (Marikina Factory)
Confidential and Salaried Employees Union-NATU and one Marcelino Lontok, Jr.,
representing himself as Vice-President, NATU, sent a letter to the petitioner, of a similar
tenor. 3 Petitioner, as employer, countered by filing on March 6, 1971, two petitions for
certification election with respondent Court of Industrial Relations. 4 Then came on
March 10, 1971, two strike notices from respondents, filed with the Bureau of Labor
Relations, demanding union recognition. 5 It was not until April 13, 1971, that
respondent Court commenced the hearings of the petitions for certification election. 6 It
was then alleged that on two days in April 19 and 20, 1971, there was a strike staged by
those affiliated with private respondents, to force recognition of their
unions. 7Subsequently, after preliminary investigation first had, on a finding of a prima
facie case of illegal strike and unfair labor practice committed by the members of the two
unions, Case No. 5612-ULP of the Court of Industrial Relations for unfair labor practice
was filed against them. 8 There was on May 27, 1971, an answer with affirmative
defenses filed in such case. 9 Earlier, on May 20, 1971, the petitioner filed identical
motions in MC Cases Nos. 2995 and 2996 to hold in abeyance the hearings of the
petitions for certification election. 10 Then, on August 5, 1971, respondent Court, through
Judge Ansberto Paredes, denied the petitioner's motions to hold in abeyance the hearing
of MC Cases Nos. 2995 and 2996. 11chanrobles virtual law library
The challenged order of Judge Paredes stated the nature of the issue before him as well
as the respective positions of the parties: "Submitted for resolution without further
arguments are petitioner's motions filed in each of the above-entitled cases, praying that
the proceedings therein be held in abeyance pending final judgment in Case No. 5612-
ULP and the oppositions thereto filed by the respondent unions. It is petitioner's stand
that if Case No. 5612-ULP will prosper and the strike staged by respondent unions
during the pendency of the instant cases will be declared illegal and the individual
members cited therein as respondents found guilty of the unfair labor practice acts
complained of, the latter will consequently lose their status as employees and will be
disqualified to vote in a certification election that may be ordered by the Court. On the
other hand, respondents-oppositors maintain that the pendency of said unfair labor
practice case is not a bar to the hearing of the instant cases, following the ruling of this
Court in Case No. 2536-MC entitled "In re: Petition for Certification Election at the
Central Textile Mills, Inc., Vicente Flores, et al." " 12 This was his ruling: "The motions can
not be granted. Individual respondents in the ULP case are still employees and possessed
of the right to self-organization. Included therein is their choice of a bargaining
representative (Secs. 2 [d], 3 & 12, R. A. 875). To hold the certification proceedings in
abeyance until final judgment of the ULP case will be a denial of the aforesaid statutory
right, the employees being left without a collective bargaining representative." 13 The
dispositive portion was to deny the motions for lack of merit. There was a motion for
reconsideration, but such motion did not prosper. It was denied on August 31,
1971. 14chanrobles virtual law library
These certiorari proceedings were then filed with this Court, with petitioners
maintaining through copious references to National Labor Relations Board cases that,
with the declaration of what it considered to be an illegal strike resulting in an unfair
labor practice case, the status as employees of members of the two respondent Labor
Unions would be placed in doubt and thus should be determined before the certification
election. This Court, in a resolution of November 10, 1971, required private respondents
to file an answer. There is, on the whole, an admission of the allegations of the petition.
In addition, the following special and affirmative defenses were interposed: "That up to
the present, the strike of the respondent unions is still on, thus the striking employees
cannot be considered to have abandoned, quit, or otherwise terminated their
employment relationship with the petitioner company, on the basis of the doctrine that a
strike does not serve to sever the employer-employee relationship; ... That the
respondent unions were virtually coerced by the petitioner company's blatant resort to
all kinds of union-busting tactics, topped by the technical refusal to recognize and
bargain with the respondent unions through the neat trick of filing a baseless petition for
certification election and questioning therein the right of over 90% of the unions'
membership to join the unions; ... That the members of the respondent unions are still
employees of the petitioner company and as such are qualified to vote in any certification
election that the Court of Industrial Relations may direct to be held on the petitioner
company's own petition, pursuant to Section 2(d) of Republic Act 875, ... ." 15 They sought
the dismissal of these certiorari proceedings for lack of merit. Subsequently, memoranda
were filed by the parties, and the case was deemed submitted on February 14,
1972.chanroblesvirtualawlibrarychanrobles virtual law library
As made clear at the outset, petitioner has not made out a case for the reversal of the
challenged order of Judge Ansberto Paredes.chanroblesvirtualawlibrarychanrobles
virtual law library
1. There is novelty in the specific question raised, as to whether or not a certification
election may be stayed at the instance of the employer, pending the determination of an
unfair labor practice case filed by it against certain employees affiliated with respondent-
unions. That is a matter of which this Court has not had an opportunity to speak on
previously. What is settled law, dating from the case of Standard Cigarette Workers'
Union v. Court of Industrial Relations, 16 decided in 1957, is that if it were a labor
organization objecting to the participation in a certification election of a company-
dominated union, as a result of which a complaint for an unfair labor practice case
against the employer was filed, the status of the latter union must be first cleared in such
a proceeding before such voting could take place. In the language of Justice J.B.L. Reyes
10
as ponente: "As correctly pointed out by Judge Lanting in his dissenting opinion on the
denial of petitioner's motion for reconsideration, a complaint for unfair labor practice
may be considered a prejudicial question in a proceeding for certification election when
it is charged therein that one or more labor unions participating in the election are being
aided, or are controlled, by the company or employer. The reason is that the certification
election may lead to the selection of an employer-dominated or company union as the
employees' bargaining representative, and when the court finds that said union is
employer-dominated in the unfair labor practice case, the union selected would be
decertified and the whole election proceedings would be rendered useless and
nugatory." 17 The next year, the same jurist had occasion to reiterate such a doctrine
in Manila Paper Mills Employees and Workers Association v. Court of Industrial
Relations, 18 thus: "We agree with the CIR on the reasons given in its order that only a
formal charge of company domination may serve as a bar to and stop a certification
election, the reason being that if there is a union dominated by the Company, to which
some of the workers belong, an election among the workers and employees of the
company would not reflect the true sentiment and wishes of the said workers and
employees from the standpoint of their welfare and interest, because as to the members
of the company dominated union, the vote of the said members in the election would not
be free. It is equally true, however, that the opposition to the holding of a certification
election due to a charge of company domination can only be filed and maintained by the
labor organization which made the charge of company domination, because it is the
entity that stands to lose and suffer prejudice by the certification election, the reason
being that its members might be overwhelmed in the voting by the other members
controlled and dominated by the Company," 19 It is easily understandable why it should
be thus. There would be an impairment of the integrity of the collective bargaining
process if a company-dominated union were allowed to participate in a certification
election. The timid, the timorous and the faint-hearted in the ranks of labor could easily
be tempted to cast their votes in favor of the choice of management. Should it emerge
victorious, and it becomes the exclusive representative of labor at the conference table,
there is a frustration of the statutory scheme. It takes two to bargain. There would be
instead a unilateral imposition by the employer. There is need therefore to inquire as to
whether a labor organization that aspires to be the exclusive bargaining representative is
company-dominated before the certification
election.chanroblesvirtualawlibrarychanrobles virtual law library
2. The unique situation before us, however, it exactly the reverse. It is management that
would have an unfair labor practice case filed by it for illegal strike engaged in by some
of its employees concluded, before it would agree to the holding of a certification
election. That is the stand of petitioner. It does not carry conviction. The reason that
justifies the postponement of a certification election pending an inquiry, as to the bona
fides of a labor union, precisely calls for a different conclusion. If under the circumstances
disclosed, management is allowed to have its way, the result might be to dilute or fritter
away the strength of an organization bent on a more zealous defense of labor's
prerogatives. The difficulties and obstacles that must be then hurdled would not be lost
on the rest of the personnel, who had not as yet made up their minds one way or the
other. This is not to say that management is to be precluded from filing an unfair labor
practice case. It is merely to stress that such a suit should not be allowed to lend itself as
a means, whether intended or not, to prevent a truly free expression of the will of the
labor group as to the organization that will represent it. It is not only the loss of time
involved, in itself not likely to enhance the prospect of respondent-unions, but also the
fear engendered in the mind of an ordinary employee that management has many
weapons in its arsenal to bring the full force of its undeniable power against those of its
employees dissatisfied with things as they are. There is no valid reason then for the
postponement sought. This is one instance that calls for the application of the maxim, lex
dilationes semper exhorret. Moreover, is there not in the posture taken by petitioner a
contravention of what is expressly set forth in the Industrial Peace Act, which speaks of
the labor organizations "designated or selected for the purpose of collective bargaining
by the majority of the employees in an appropriate collective bargaining unit [be the
exclusive] representative of all the employees in such unit for the purpose of collective
bargaining." 20 The law clearly contemplates all the employees, not only some of them. As
much as possible then, there is to be no unwarranted reduction in the number of those
taking part in a certification election, even under the guise that in the meanwhile, which
may take some time, some of those who are employees could possibly lose such status,
by virtue of a pending unfair labor practice case.chanroblesvirtualawlibrarychanrobles
virtual law library
3. Nor would any useful purpose be served by such a postponement of the holding of a
certification election until after the determination of the unfair labor practice case filed.
The time that might elapse is hard to predict, as the matter may eventually reach this
Tribunal. In the meanwhile, there is no opportunity for free choice on the part of the
employees as to which labor organization shall be their exclusive bargaining
representative. The force of such an objection could be blunted if after a final decision to
the effect that the employees complained of were engaged in illegal strike, they would
automatically lose their jobs. Such is not the law, however. 21 It does not necessarily
follow that whoever might have participated in a strike thus proscribed has thereby
forfeited the right to employment. What will be gained then by holding in abeyance the
certification election? There is no certitude that the final decision arrived at in the
pending unfair labor practice case would sustain the claim of petitioner. Even if success
would attend such endeavor, it cannot be plausibly asserted that its employees adjudged
as having been engaged in such illegal strike are ipso facto deprived of such status. There
is thus an aspect of futility about the whole thing. Why should not respondent Court then
decide as it did?chanrobles virtual law library
4. This Court, moreover, is led to sustain the challenged order by another consideration.
In General Maritime Stevedores' Union v. South Sea Shipping Line, 22 a 1960 decision,
Justice Labrador, speaking for this Court, stated that the question of whether or not a
certification election shall be held "may well be left to the sound discretion of the Court
of Industrial Relations, considering the conditions involved in the case, ... ." 23 This Court
has since then been committed to such a doctrine. 24 As a matter of fact, the only
American Supreme Court decision cited in the petition, National Labor Relations Board v.
A.J. Tower Co., 25 likewise, sustains the same principle. It was there held that the
11
discretion of the labor tribunal, in this case, the National Labor Relations Board of the
United States, is not lightly to be interfered with. The issue in that case, as noted in the
opinion of Justice Murphy, equally noted for his labor law decisions, as well as his civil
libertarian views, "concerns the procedure used in elections under the National Labor
Relations Act in which employees choose a statutory representative for purposes of
collective bargaining. Specifically, we must determine the propriety of the National Labor
Relations Board's refusal to accept an employers post-election challenge to the eligibility
of a voter who participated in a consent election." 26 His opinion then went on to state
that the First Circuit Court of Appeals set aside the Board's order. The matter was then
taken to the United States Supreme Court on certiorari. In reversing the Circuit Court of
Appeals, Justice Murphy made clear the acceptance of such a doctrine in the light of the
National Labor Relations Act thus: "As we have noted before, Congress has entrusted the
Board with a wide degree of discretion in establishing the procedure and safeguards
necessary to insure the fair and free choice of bargaining representatives by
employees." 27 Hence, this ruling of American Supreme Court: "It follows that the court
below erred in refusing to enforce the Board's order in full." 28 In the United States as in
the Philippines, the decision in such matters by the administrative agency is accorded the
utmost respect. Relevant is this affirmation by the then Justice, now Chief Justice,
Concepcion that in such proceedings, the determination of what is an appropriate
bargaining unit is "entitled to almost complete finality." 29 The prevailing principle then
on questions as to certification, as well as in other labor cases, is that only where there is
a showing of clear abuse of discretion would this Tribunal be warranted in reversing the
actuation of respondent
Court. 30 There is no showing of such a failing in this
case.chanroblesvirtualawlibrarychanrobles virtual law library
WHEREFORE, the petition for certiorari is dismissed. With costs against petitioner.
G.R. Nos. L-30632-33 April 11, 1972
CALTEX FILIPINO MANAGERS AND SUPERVISORS ASSOCIATION petitioner,
vs.
COURT OF INDUSTRIAL RELATIONS, CALTEX (PHILIPPINES), INC., W.E. MENEFEE
and B.F. EDWARDS, respondents.
I. Facts/Summary
The Caltex Filipino Managers and Supervisors' Association (hereinafter referred to as
Union) is a labor organization of Filipino managers supervisors in Caltex (Philippines),
Inc., which sent a letter to the respondent informing them of the Union’s registration to
which the respondent inquired of the position titles of the employees that the Union
sought to represent. The Union sent proposals to the respondent wherein one of the
demands was the recognition of the Association as the duly authorized bargaining
agency for managers and supervisors of the respondent which was countered by the
respondent, stating that a distinction exists between representatives of management and
individuals employed as supervisors and that it is respondent's belief that managerial
employees are not qualified for membership in a labor organization which caused the
Union to issue a certification proceeding to remove any question with regard to position
titles that should be included in the bargaining unit. The Union filed notice to strike for
reasons of refusal to bargain and act on demands by the respondent; the respondent’s
resort to union-busting tactics in order to discourage the activities of the Union including
discrimination and intimidation of the Union’s members. The Judge handling the hearing
of the certification proceedings advised the employees not to go on strike; and on the
basis of the strike notice filed, the Union struck after the efforts exerted to settle
differences failed. Because of this, the respondent filed an urgent petition to declare the
said strike as illegal; that the officers and members of Union who have instigated,
declared, encouraged and/or participated in the illegal strike be held and punished for
contempt and be declared to have lost their employee status; that a temporary injunction
be issued to restrain the Union and its members from doing acts that would disrupt the
respondent’s activities.
The petition was met by the Union with a motion to dismiss questioning the jurisdiction
of the industrial court which was opposed by the respondent and by the trial court.
Because of the settlement between the parties of some of their disputes, the Union filed
with respondent court a manifestation to the effect that the issues had become moot and
academic. The respondent company filed a counter-manifestation disputing the
representations of the Union on the effect of the return-to-work agreement. On the basis
of the manifestation and counter-manifestation, respondent court en banc issued a
resolution on which allowed the withdrawal of the Union's motion for reconsideration
against the order on the theory that there was justification for such withdrawal. After
several filing of different motions, the trial court ruled that under the return-to-work
agreement the respondent company had reserved its rights to prosecute and directed
that the case be set for hearing covering the alleged illegality of the strike. The Union’s
charge for unfair labor practices against the respondent company was denied by the
respondent.
II. Issue/s
It was being questioned whether or not the Court of Industrial Relations can assume
jurisdiction in the case at hand. It was also being questioned whether or not the strike
staged by the Union is illegal and, incident thereto, whether respondent court correctly
terminated the employee status of Jose Mapa, Dominador Mangalino and Herminigildo
Mandanas and reprimanded and admonished the other officers of the Association.
Moreover, there are contentions onwWhether or not respondent court correctly
absolved the respondents from the unfair labor practice charge.
III. Applicable Provisions of the Labor Code/Special Laws
Sec. 9 of Republic Act No. 875 - AN ACT TO PROMOTE INDUSTRIAL PEACE AND FOR
OTHER PURPOSES
(REPEALED BY PRESIDENTIAL DECREE NO. 442)
Sec. 9 - Injunctions in Labor Disputes
(d) No court of the Philippines shall have jurisdiction to issue a temporary or
permanent injunction in any case involving or growing out of a labor dispute, as herein
defined except after hearing the testimony of witnesses in open court (with opportunity
for cross-examination) in support of the allegations of a complaint made under oath, and
12
testimony in opposition thereto, if offered, and except after finding of fact by the Court, to
the effect:
(1) That unlawful acts have been threatened and will be committed unless
restrained, or have been committed and will be continued unless restrained, but no
injunction or temporary restraining order shall be issued on account of any threat or
unlawful act excepting against the person or persons, association, or organization
making the threat or committing the unlawful act or actually authorizing or ratifying the
same after actual knowledge thereof;
(2) That substantial and irreparable injury to complainant's property will follow;
(3) That as to each item of relief granted greater injury will be inflicted upon
complainant by the denial of relief that will be inflicted upon defendants by the granting
of relief;
(4) That complaint has no adequate remedy at law; and
(5) That the public officers charged with the duty to protect complainant's
property are unable or unwilling to furnish adequate protection.
… study thoroughly the different phases of the demands. Meanwhile counsel for
Sec. 10 of Republic Act No. 875 - AN ACT TO PROMOTE INDUSTRIAL PEACE AND FOR
OTHER PURPOSES
(REPEALED BY PRESIDENTIAL DECREE NO. 442)
Section 10. Labor Disputes in Industries Indispensable to the National Interest. - When in
the opinion of the President of the Philippines there exists a labor dispute in an industry
indispensable to the national interest and when such labor dispute is certified by the
President to the Court of Industrial Relations, said Court may cause to be issued a
restraining order forbidding the employees to strike or the employer to lockout the
employees, pending an investigation by the Court, and if no other solution to the dispute
is found, the Court may issue an order fixing the terms and conditions of employment.
IV. Decision of the Supreme Court
The Supreme Court ruled that there can be no injunction issued against any strike except
when a labor dispute arises in an industry indispensable to the national interest and
such dispute is certified by the President of the Philippines to the Court of Industrial
Relations in compliance with Sec. 10 of Republic Act No. 875; however in this case, as the
respondent has sought injunctive relief under Sec. 9(d) of Republic Act No.875,
respondent court had jurisdiction over the Company's "Urgent Petition" . The Supreme
Court also ruled that the strike of the Caltex Filipino Managers and Supervisors'
Association as legal in all respects and ordered the respondent company to reinstate J.J.
Mapa and Dominador Mangalino to their former positions without loss of seniority and
privileges, with backwages from the time of dismissal. Since Herminigildo Mandanas
appears to have voluntarily left the Company, no reinstatement is ordered as to him. The
Supreme Court also ruled that respondent company is guilty of unfair labor practices and
they are therefore ordered to cease and desist from the same and they are directed to
pay backwages to the striking employees.
Feati University v. Bautista
G.R. No.L-21278 December 27, 1966
Lessons Applicable: Applicability to certain specific persons – Professors in national
interest
Laws Applicable:
FACTS:
 January 14, 1963: the President of Feati University Faculty Club (PAFLU) wrote
a letter to Mrs. Victoria L. Araneta, President of Feati University informing her
that it registered as a labor union.
 January 22, 1963: PAFLU sent a letter with 26 demands in relation to their
employment and requesting an answer within 10 days from receipt thereof.
 Araneta answered the letters, requesting that she be given at least 30 days to
Feati, wrote a letter to the President of PAFLU demanding proof of its majority
status and designation as a bargaining representative
 February 1, 1963: the President of PAFLU rejected the extension of time and
filed a notice of strike with the Bureau of Labor due to Feati’s refusal to bargain
collectively.
 Conciliation Division of the Bureau of Labor made efforts to conciliate them but
failed.
 February 18, 1963: PAFLU declared a strike and established picket lines in the
premises of Feati resulting in the disruption of classes in the University.
 March 21, 1963: the President of the Philippines certified to the Court of
Industrial Relations (CIR) the dispute between Feati and PAFLU pursuant to the
provisions of Section 10 of Republic Act No. 875.
 3 cases were filed with the CIR
 41-IPA – PAFLU’s petition to declare in contempt of court
since Feati refused to accept them back to work in violation
of the return-to-work order of March 30, 1963 and has
employed professors and/or instructors to take their places
 1183-MC – PAFLU’s petition for certification election praying
that it be certified as the sole and exclusive bargaining
representative
 Later withdrawn since the Case 41-IPA had already
been certified by the President to the CIR and has
absorbed the issues herein
 V-30 – PAFLU’s complaint for indirect contempt of court
filed against the administrative officials of the Feati
reiterating Case 41-IPA
 May 10, 1963: Feati filed before the SC a petition for certiorari and prohibition
with writ of preliminary injunction which was issued upon the Feati's filing a
13
 bond of P50,000 (increased from P1,000), ordering CIR Judge Jose S. Bautista to
desist and refrain from further proceeding
 March 23, 1963: On the strength of the presidential certification, Judge Bautista
set the case for hearing
 Feati, thru counsel filed a motion to dismiss the case upon the ground
that the CIR has no jurisdiction over the case, because:
1. the Industrial Peace Act is NOT applicable to the University, it being an educational
institution, nor to the members of the Faculty Club, they being independent contractors
2. the presidential certification is violative of Section 10 of the Industrial Peace Act, as
the University is not an industrial establishment and there was no industrial dispute
which could be certified to the CIR
 Judge Bautista denied the motion to dismiss and ordered the strikers to return
immediately to work and the University to take them back under the last terms
and conditions existing before the dispute arose
 Without the motion for reconsideration having been acted upon by the CIR en
banc, Judge Bautista set the case for hearing on the merits for May 8, 1963 but
was cancelled upon Feati’s petition for certiorari alleging that Judge Jose S.
Bautista acted without, or in excess of, jurisdiction, or with grave abuse of
discretion, in taking cognizance of, and in issuing the questioned orders in, CIR
Cases Nos. 41-IPA 1183-MC and V-30
 Feati claims that it is not an employer within the contemplation of R.A.
875, because it is not an industrial establishment
 Feati also claims that it is only a lessee of the services of its professors
and/or instructors pursuant to a contract of services entered into
between them because the University does not exercise control over
their work
ISSUES: W/N Feati can be considered an employer and PAFLU as an employee to be
covered by R.A. 875 and have right to unionize
HELD: YES. petition for certiorari and prohibition with preliminary injunction in Case
G.R. No. L-21278 is dismissed
 Section 2(c) of R.A. 875:
o The term employer include any person acting in the interest of an employer, directly
or indirectly, but shall not include any labor organization (otherwise than when acting as
an employer) or any one acting in the capacity or agent of such labor organization.
§ Congress did not intend to give a complete definition of "employer", but rather that
such definition should be complementary to what is commonly understood as employer
§ Act itself specifically enumerated those who are not included in the term "employer"
and educational institutions are not included; hence, they can be included in the term
"employer". However, those educational institutions that are not operated for profit are
not within the purview of Republic Act No. 875.
ü Feati realizes profits and parts of such earning is distributed as dividends to private
stockholders or individuals
§ It embraces not only those who are usually and ordinarily considered employees, but
also those who have ceased as employees as a consequence of a labor dispute.
 employee must be one who is engaged in the service of another; who performs
services for another; who works for salary or wages
 "workers" limited to those performing physical labor
o embrace stenographers and bookkeepers
o Teachers are not included
 Feati controls the work of the members of its faculty
o prescribes the courses or subjects that professors teach, and when and where to
teach
o professors' work is characterized by regularity and continuity for a fixed duration
o professors are compensated for their services by wages and salaries, rather than by
profits
o professors and/or instructors cannot substitute others to do their work without the
consent of the university
o professors can be laid off if their work is found not satisfactory
 Moreover, even if university professors are considered independent
contractors, still they would be covered by Rep. Act No. 875
 professors, instructors or teachers of private educational institutions
who teach to earn a living are entitled to the protection of our labor
laws — and one such law is Republic Act No. 875.
 The term "labor dispute" includes any controversy concerning terms, tenure or
conditions of employment, or concerning the association or representation of
persons in negotiating, fixing, maintaining, changing, or seeking to arrange
terms or conditions of employment regardless of whether the disputants stand
in proximate relation of employer and employees.
 To certify a labor dispute to the CIR is the prerogative of the President under
the law (Because the strike declared by the members of the minority union
threatens a major industry of 18,000 students which affects the national
interest), and this Court will not interfere in, much less curtail, the exercise of
that prerogative. The jurisdiction of the CIR in a certified case is exclusive. The
parties involved in the case may appeal to the Supreme Court from the order or
orders thus issued by the CIR.
 Section 10 of Republic Act No. 875 empowers the Court of Industrial Relations
to issue an order "fixing the terms of employment." This clause is broad enough
to authorize the Court to order the strikers to return to work and the employer
to readmit them
 The return-to-work order cannot be considered as an impairment of the
contract entered into with the replacements. Besides, labor contracts must
yield to the common good and such contracts are subject to the special laws on
labor unions, collective bargaining, strikes and similar subjects
14
15
LOPEZ SUGAR CORPORATION
VS
Sec. of Labor
[NACUSIP and CAILO]
247 SCRA 1
[August 1995]
Facts
-The Med-Arbiter, sustained by the Secretary of Labor and Employment, has ruled that
Art. 257 is mandatory and give him no other choice than to conduct a certification
election upon the receipt of the corresponding petition.
“Art. 257. Petitions in unorganized establishments. -In any establishment where there is
no certified bargaining agent, a certification election shall automatically be conducted by
the Med-Arbiter upon the filing of a petition by a legitimate labor organization.”
-National Congress of Unions in the Sugar Industry of the Philippines-TUCP (“NACUSIP-
TUCP”) filed with the Department of Labor and Employment (“DOLE”) a petition for
direct certification or for certification election to determine the sole and exclusive
collective bargaining representative of the supervisory employees of herein petitioner,
Lopez Sugar Corporation (“LSC”). NACUSIP-TUCP averred that it was a legitimate
national labor organization; that LSC was employing 55 supervisory employees, the
majority of whom were members of the union; that no other labor organization was
claiming membership over the supervisory employees; that there was no existing
collective bargaining agreement covering said employees; and that there was no
legal impediment either to a direct certification of NACUSIP-TUCP or to the holding of a
certification election.
-LSC contended it. NACUSIP-TUCP submitted Charter Certificate No. 003-89, dated 20
July 1989, of the NACUSIP-TUCP Lopez Sugar Central Supervisory Chapter.
-LSC appealed to the DOLE and asseverated that the order was a patent nullity and that
the Med-Arbiter acted with grave abuse of discretion, Sec. of Labor denied it. Petition for
certiorari was filed.
Issue
WON the certification election should push through
Held
No, because the labor organization is not legitimate. It was held in Progressive
Development Corporation vs. Secretary, Department of Labor and Employment:
“But while Article 257 cited by the Solicitor General directs the automatic conduct of a
certification election in an unorganized establishment, it also requires that the petition
for certification election must be filed by a legitimate labor organization. Article 212(h)
defines a legitimate labor organization as ‘any labor organization duly registered with
the DOLE and includes any branch or local thereof.’ Rule 1, Section 1(j), Book V of the
Implementing Rules likewise defines a legitimate labor organization as ‘any labor
organization duly registered with the DOLE and includes any branch, local or affiliate
thereof .’ “
Indeed, the law did not reduce the Med-Arbiter to an automaton which can instantly be
set to impulse by the mere filing of a petition for certification election. He is still tasked to
satisfyhimself that all the conditions of the law are met, and amongthe legal
requirements is that the petitioning union must be legitimate labor organization in good
standing.
The petition for certification election, in the case at bench, was filed by the NACUSIP-
TUCP, a national labor organization duly registered with the DOLE. The legitimate status
of NACUSIPTUCP might be conceded; being merely, however, an agent for the local
organization (the NACUSIP-TUCP Lopez Sugar Central Supervisory Chapter), the
federation’s bona fide status alone would not suffice. The local chapter, as its principal,
shouldalso be a legitimate labor organization in good standing.
Accordingly, in Progressive Development, we elucidated: “In the case of union affiliation
with a federation, the documentary requirements are found in Rule II, Section 3(e), Book
V of the Implementing Rules, which we again quote as follows:
“‘(c ) The local or chapter of a labor federation or national union shall have and maintain
a constitution and by laws, set of officers and books of accounts. For reporting purposes,
the procedure governing the reporting of independently registered unions, federations
or national unions shall be observed.’ “Since the ‘procedure governing the reporting
independently registered unions’ refers to the certification and attestation requirements
contained in Article 235, paragraph 2, it follows that the constitution and by-laws, set of
officers and books of accounts submitted by the local and chapter must likewise comply
with these requirements. The same rationale for requiring the submission of duly
subscribed documents upon union registration exists in the case of union affiliation.
Moreover, there is greater reason to exact compliance with the certification and
attestation requirements because, as previously mentioned, several requirements
applicable to independent union registration are no longer required in the case of the
formation a local or chapter. The policy of the law in conferring greater bargaining
power upon labor unions must be balanced with the policy of providing preventive
measures against the commission of fraud.
“A local or chapter therefore becomes a legitimate labor organization only upon
submission of the following to theBLR:
“1) A charter certificate, within 30 days from its issuance by the labor federation or
national union, and
“2) The constitution and by-laws, a statement on the set of officers, and the books of
accounts all of which are certified under oath by the secretary or treasurer, as the case
may be, of such local or chapter, and attested to by its president.
“Absent compliance with these mandatory requirements, the local or chapter does not
become legitimate labor organization.”
The only document extant on record to establish the legitimacy of the NACUSIP-TUCP
Lopez Sugar Central Supervisory Chapter is a charter certificate and nothing else.
Disposition
WHEREFORE, the assailed Decision of the Secretary of Labor, dated 06 March 1990,
affirming that of the Med-Arbiter, is ANNULLED and SET ASIDE. The petition for
certification election is dismissed. No costs
Labor Dispute
16
SAN MIGUEL CORPORATION EMPLOYEES UNION-PTGWO, DANIEL S.L. BORBON II,
HERMINIA REYES, MARCELA PURIFICACION, ET AL., petitioners,
vs.
HON. JESUS G. BERSAMIRA, IN HIS CAPACITY AS PRESIDING JUDGE OF BRANCH 166,
RTC, PASIG, and SAN MIGUEL CORPORATION, respondents.
186 SCRA 496 | G.R. No. 87700
June 13, 1990
Ponente: Melencio-Herrera, J.
NATURE OF CASE
Writ of Certiorari
BRIEF
Before the Court is an appeal from the Decision of RTC Branch 166 of Pasig where the
petitioners’ plea is that the Writ of Preliminary Injunction was issued without or in
excess of jurisdiction and with grave abuse of discretion, a labor dispute being involved.
FACTS
San Miguel Corporation entered into contracts for merchandising services with Lipercon
and D’Rite companies, both independent contractors duly licensed by DOLE, to maintain
its competitive position, and in keeping with the imperatives of efficiency, business
expansion and diversity of operation. In the contracts, it was expressly agreed that the
workers employed by the contractors were not to be deemed employees or agents of San
Miguel. Thus, no employer-employee relationship.
Later on, San Miguel executed a CBA which specifically provides that “temporary,
probationary, or contract employees and workers are excluded from the bargaining unit
and therefore, outside the scope of this Agreement.”
The Union, petitioner, advised San Miguel that some of the workers of Lipercon and
D’Rite had signed up for union membership and sought regularization. The Union alleged
that some the workers have been continuously working for San Miguel for a period
ranging from 6 months to 15 years, and that the nature of their work is neither casual
nor seasonal.
Strikes were held and a series of pickets were held for the reason that the Union failed to
receive any favourable response from San Miguel. Thereafter, San Miguel filed a
complaint for Injunction and Damages before the RTC of Pasig to enjoin the Union to
prevent the peaceful and normal operations of the former. The Union filed a Motion to
Dismiss but was subsequently denied by the RTC reasoning that the absence of
employer-employee relationship negates the existence of labor dispute. Thus, the RTC
issued Orders enjoining the Union from commiting acts that disrupt the operations of
San Miguel.
ISSUE/s of the CASE
Whether or not there is a labor dispute between San Miguel and the Union?
ACTION OF THE COURT
SC: The decision of the RTC is SET ASIDE.
COURT RATIONALE ON THE ABOVE CASE
A labor dispute includes any controvery or matter concerning terms and conditions of
employment or the association or representation of persons in negotiating, fixing,
maintaining, changing, or arranging the terms and conditions or employment, regardless
of whether the disputants stand in the proximate relation of employer and employee.
What the Union seeks is to regularize the status of the employees contracted by Liparcon
and D’Rite and that they be absorbed into the working unit of San Miguel. In this wise,
the matter dwells on the working relationship between the said employees and San
Miguel. Terms, tenure and conditions of their employment and the arrangement of those
terms are thus involved bringing the matter within the purview of a labor dispute.
Further, the Union also seeks to represent the workers, who have signed for union
membership, for the purpose of collecting bargaining. Obvious then is that
representation and association, for the purpose of negotiating the conditions of
employment are also involved. In fact, the injunction sought by San Miguel was precisely
also to prevent such representation. Again, the matter of representation falls squarely
within the ambit of a labor dispute.
As the case is indisputably linked with a labor dispute, jurisdiction belongs to labor
tribunals.
SUPREME COURT RULING
WHEREFORE, the Writ of Certiorari is GRANTED. The Orders of the Regional Trial Court
of Pasig is SET ASIDE.
Gold City Integrated Port Service, Inc (INPORT) vs. NLRC
GR No. 103560
July 6, 1995
Facts: Petitioner’s employees stopped working and gathered in a mass action to express
their grievances regarding wages, thirteenth month pay and hazard pay. Said employees
were all members of the Macajalar Labor Union — Federation of Free Workers (MLU-
FFW) with whom petitioner had an existing collective bargaining agreement.
Petitioner was engaged in stevedoring and arrastre services at the port of Cagayan de
Oro. The strike paralyzed operations at said port.
17
The strikers filed individual notices of strike (“Kaugalingon nga Declarasyon sa Pag-
Welga”) with the then Ministry of Labor and Employment.
With the failure of conciliation conferences between petitioner and the strikers, INPORT
filed a complaint before the Labor Arbiter for Illegal Strike with prayer for a restraining
order/preliminary injunction.
The National Labor Relations Commission issued a temporary restraining order.
Thereafter, majority of the strikers returned to work, leaving herein private respondents
who continued their protest.
For not having complied with the formal requirements in Article 264 of the Labor
Code, 3 the strike staged by petitioner’s workers on April 30, 1985 was found by the
Labor Arbiter to be illegal. 4 The workers who participated in the illegal strike did not,
however, lose their employment, since there was no evidence that they participated in
illegal acts. After noting that petitioner accepted the other striking employees back to
work, the Labor Arbiter held that the private respondents should similarly be allowed to
return to work without having to undergo the required screening to be undertaken by
their union (MLU-FFW).
As regards the six private respondents who were union officers, the Labor Arbiter ruled
that they could not have possibly been “duped or tricked” into signing the strike notice
for they were active participants in the conciliation meetings and were thus fully aware
of what was going on. Hence, said union officers should be accepted back to work after
seeking reconsideration from herein petitioner. 5
The NLRC affirmed with modification 8 the Arbiter’s decision. It held that the concerted
action by the workers was more of a “protest action” than a strike. Private respondents,
including the six union officers, should also be allowed to work unconditionally to avoid
discrimination. However, in view of the strained relations between the parties,
separation pay was awarded in lieu of reinstatement.
Upon petitioner’s motion for reconsideration, public respondent modified the above
resolution.
The Commission ruled that since private respondents were not actually terminated from
service, there was no basis for reinstatement. However, it awarded six months’ salary as
separation pay or financial assistance in the nature of “equitable relief.” The award for
backwages was also deleted for lack of factual and legal basis. In lieu of backwages,
compensation equivalent to P1,000.00 was given.
Issue: Whether separation pay and backwages be awarded by public respondent NLRC
to participants of an illegal strike?
Held: Reinstatement and backwages or, if no longer feasible, separation pay, can only be
granted if sufficient bases exist under the law, particularly after a showing of illegal
dismissal. However, while the union members may thus be entitled under the law to be
reinstated or to receive separation pay, their expulsion from the union in accordance
with the collective bargaining agreement renders the same impossible.
Ratio: A strike, considered as the most effective weapon of labor, 13 is defined as any
temporary stoppage of work by the concerted action of employees as a result of an
industrial or labor dispute. 14 A labor dispute includes any controversy or matter
concerning terms or conditions of employment or the association or representation of
persons in negotiating, fixing, maintaining, changing or arranging the terms and
conditions of employment, regardless of whether or not the disputants stand in the
proximate relation of employers and employees. 15
Private respondents and their co-workers stopped working and held the mass action on
April 30, 1985 to press for their wages and other benefits. What transpired then was
clearly a strike, for the cessation of work by concerted action resulted from a labor
dispute.
The complaint before the Labor Arbiter involved the legality of said strike. The Arbiter
correctly ruled that the strike was illegal for failure to comply with the requirements of
Article 264 (now Article 263) paragraphs (c) and (f) of the Labor Code. 16
The individual notices of strike filed by the workers did not conform to the notice
required by the law to be filed since they were represented by a union (MLU-FFW) which
even had an existing collective bargaining agreement with INPORT.
Neither did the striking workers observe the strike vote by secret ballot, cooling-off
period and reporting requirements.
A union officer who knowingly participates in an illegal strike and any worker or union
officer who knowingly participates in the commission of illegal acts during a strike may
be declared to have lost their employment status. 20 An ordinary striking worker cannot
be terminated for mere participation in an illegal strike. There must be proof that he
committed illegal acts during a strike. A union officer, on the other hand, may be
terminated from work when he knowingly participates in an illegal strike, and like other
workers, when he commits an illegal act during a strike.
In the case at bench, INPORT accepted the majority of the striking workers, including
union officers, back to work. Private respondents were left to continue with the strike
after they refused to submit to the “screening” required by the company.
Under Article 264 of the Labor Code, a worker merely participating in an illegal strike
may not be terminated from his employment. It is only when he commits illegal acts
during a strike that he may be declared to have lost his employment status. Since there
appears no proof that these union members committed illegal acts during the strike, they
cannot be dismissed. The striking union members among private respondents are thus
entitled to reinstatement, there being no just cause for their dismissal.
However, considering that a decade has already lapsed from the time the disputed strike
occurred, we find that to award separation pay in lieu of reinstatement would be more
practical and appropriate.
No backwages will be awarded to private respondent-union members as a penalty for
their participation in the illegal strike. Their continued participation in said strike, even
after most of their co-workers had returned to work, can hardly be rewarded by such an
award.
The fate of private respondent-union officers is different. Their insistence on
unconditional reinstatement or separation pay and backwages is unwarranted and
unjustified. For knowingly participating in an illegal strike, the law mandates that a
union officer may be terminated from employment. 34
Notwithstanding the fact that INPORT previously accepted other union officers and that
the screening required by it was uncalled for, still it cannot be gainsaid that it possessed
18
the right and prerogative to terminate the union officers from service. The law, in using
the word may, grants the employer the option of declaring a union officer who
participated in an illegal strike as having lost his employment. 35
Moreover, an illegal strike which, more often than not, brings about unnecessary
economic disruption and chaos in the workplace should not be countenanced by a
relaxation of the sanctions prescribed by law.
The union officers are, therefore, not entitled to any relief.
Dispositive: WHEREFORE, from the foregoing premises, the petition in G.R. No. 103560
(“Gold City Integrated Port Service Inc. v. National Labor Relations Commission, et al.”) is
GRANTED. One month salary for each year of service until 1985 is awarded to private
respondents who were not union officers as separation pay. The petition in G.R. No.
103599 (“Adelo Ebuna, et al. v. National Labor Relations Commission, et al.”) is
DISMISSED for lack of merit. No costs.
160 Phil. 87
BARREDO, J.:
Three incidents arising from Our decision in this case dated August 30, 1974: (1) Motion
for reconsideration filed by petitioner; (2) Manifestation and motion for intervention of
United RCPI Communications Labor Association-Philippine Association of Free Labor
Unions (URCPICLA-PAFLU); and (3) Prayer for a modified judgment filed by respondent
union, Philippine Communications, Electronics & Electricity Workers' Federation, RCPI
Employees' Union (RCPIEU).
I inescapable duty of all parties concerned, including the court, to disregard all technical
In its motion for reconsideration, petitioner suggests that Our decision did not resolve
squarely the issue of whether or not respondent Industrial Court gravely abused its
discretion in declaring petitioner, by its order of February 15, 1973, as having waived its
right to make an offer of its evidence and in forthwith considering the matter of the
implementation of the return-to-work order of April 23, 1968 as directed in the writ of
execution of December 29, 1969 submitted for resolution. It is claimed that this issue is
pivotal, for if it is resolved in its favor, the ordered reinstatement of the 167 employees
and workers enumerated in respondent court's order of October 5, 1973 may not be
complied with until after the issues of fact regarding their identity and status as such
workers and employees have been reviewed and passed upon in the light of the evidence
offered by petitioner at the hearing. Petitioner invokes Section 20 of Commonwealth Act
103 together with this Court's injunction in Ang Tibay vs. CIR, 69 Phil. 365, that the
Industrial Court must "use the authorized legal methods of securing evidence and
informing itself of acts material and relevant to the controversy" in seeing to it "that the
law is enforced." In other words, petitioner submits that in ignoring or refusing to take
into account evidence already in the record albeit not duly offered, respondent court
sacrificed substance for technicality.
In this connection, it may be well to bear in mind, that the reasons why respondent court
felt compelled to act as it did are explained in its order of February 15,1973 thus:
"All these aforestated pleadings were set for hearing on January 29, 1973. After the
parties made clear their respective positions on the issues involved, the Court gave the
counsel for respondent until February 3, 1973 within which to submit his offer of
exhibits in writing and the counsel for petitioner three (3) days after receipt of the offer
in writing within which to file his objections. Both counsel were also given by the Court
ten (10) days from submission of the objection within which to submit simultaneous
memoranda (t.s.n., pp. 2-6, Jan. 29, 1973).
Considering that February 3, 1973, had already lapsed without respondents having as
yet submitted its offer of exhibits, despite the so many chances given to it, there is now
valid reason to grant the urgent motion of petitioner." (Page 58, Rollo.)
As We have said in Our decision, "(a) bare recital of the above facts renders undeniable
the far-fromcommendable efforts of petitioner to set at naught a return-to-work order.
Considering that it is of a peremptory character and its execution was long overdue, the
challenged actuation of respondent court had all the earmarks of legality." It is not true
then that We have not resolved the issue referred to. Indeed, all that need be added here
is that while it is true that labor cases, especially those involving claims for compensation
due the workers, must be resolved on the basis of all material facts, and it is the
rules in baring[1] and discovering them, on the other hand, it is as important that said
cases must be decided on time for the obvious reason that the claimants are not in a
position to engage in any long drawn proceedings without risking either their
wherewithal or their convictions. The courts cannot leave the progress of the case to the
convenience of the parties, particularly, the employer who can afford to keep it dragging.
Accordingly, where the inquiry into the material facts is unreasonably delayed by
unwarranted and unexplained actuations of any of the parties, no abuse of discretion is
committed by the court if it deems the right of such offending party to present his factual
side of the issue waived.
This is particularly true in the case at bar, for, as the record shows, the order of
reinstatement which has remained unobeyed by petitioner to this day was issued more
than seven years ago and was in fact already nearing five years old when the above-
quoted order of February 15, 1973 had to be issued in exasperation by respondent
court. The duty of the court spoken of in Ang Tibay to ferret out all facts necessary for
the just determination of the rights of the parties without regard to technical rules ceases
19
when the court is disabled by the very indifference and inattention, if not disregard, of a
party of the orders of the court designed to expedite proceedings already being
protracted through maneuvers of the same party.
Besides, it is noteworthy that petitioner did not even care to move for the
reconsideration of the order in question. Taking the court for granted, it merely went
ahead and made its required offer of evidence, at long last, eighteen days late. If only to
make all and sundry understand that no one can thus trifle with the court with impunity,
petitioner should suffer the consequences of its patent lack of diligence in the protection
of its interest which it has coupled with inexplicable failure to accord the orders of the
court due attention, considering it was undertaking a task of vital public interest, the
implementation of a peremptory return-to-work order it had issued five years back.
It is of no consequence that respondent union's motion to strike out the offer of evidence
belatedly filed by petitioner was not resolved by respondent court. The fact of the
matter is that said offer had already been deemed waived by the court. Procedurally,
therefore, there was no need to strike out something that had not been included legally
in the record.
In view of the foregoing considerations, and for the reason that the arguments of
petitioner relative to Presidential Decree No. 21 have been more than adequately
discussed in Our decision, petitioner's motion is denied for lack of merit.
II
The motion to intervene of URCPICLA-PAFLU is likewise without merit. Aside from the
fact that it had already intervened in the court below but later on did nothing to protect
its pretended rights relative to the orders assailed here, on the merits, its position suffers
from the same fatal defect of the motion for reconsideration of petitioner in that it is
premised on erroneous assumptions regarding the objective and purpose of Presidential
Decree No. 21. The members of movant union were hired or employed by petitioner in
open violation of the order of reinstatement of the Industrial Court and as such they
cannot have any legal standing as employees protected by said Presidential Decree. It
would be absurd if an employer were to be required to seek prior clearance from the
Department of Labor before he can layoff workers he has hired as substitutes for strikers
subsequently ordered reinstated by the courts, particularly if the employer has, as in the
instant case, hired said substitutes in violation of a restraining order not to hire anyone
without the permission of the court. The motion to intervene is, therefore, denied.
III
It is the plea of respondent unions for modification of Our decision that deserves
favorable consideration. The prayer is for Us to include in the judgment an award of
backwages to the employees and laborers concerned, in addition to their immediate
reinstatement. The plea is opposed by petitioner upon the ground that the issue of
payment of backwages was neither raised in nor passed upon by the Industrial Court and
is, in fact, not even touched in the previous pleadings of the parties in the instant case.
Additionally, it is averred that the matter is now actually being looked into by the
National Labor Relations Board, hence it is not necessary for this Court to take it up.
We are of the considered opinion that, indeed, the award prayed for is in order. The fact
that nothing was done in the court below about it is not a valid objection to the granting
thereof. Neither can its denial be justified just because it was not expressly demanded by
respondents before Our decision was handed down. Such award is such a logical and
inescapable consequence of the order of reinstatement that actually one is incomplete
without the other.
We are not dealing here with backwages to be paid to workers who are being ordered
reinstated as a consequence of a finding by the court that their suspension or dismissal
by their employer is illegal, which, of course, is dependent on the sound discretion of the
court. (Union of the Philippine Education Employees vs. Philippine Education Company, 91
Phil. 93.) In the present instance, what is involved is a failure to comply with, nay a veiled
defiance by respondent of a return-to-work order of the Industrial Court issued seven
years ago. Worse, from all appearances, such continued resistance of petitioner to said
peremptory order can hardly evoke sympathy. To begin with, its attempt to question the
identity of those entitled to reinstatement claiming that they were not actually in their
employ at the time of the declaration of the strike sounds hollow. It is inconceivable that
strangers and outsiders would try to be taken in such a surreptitious manner. Neither
can the allegation that petitioner has presented evidence of abandonment prior to the
strike and of resignations subsequent thereto be of help to petitioner. Voluntary
abandonment of work before a strike is too unusual to be readily credible whereas
purported resignations after a strike and during the pendency or protracted
reinstatement proceedings are at least suspect and do not affect the employee status of
the persons concerned, unless there is patent evidence that the pretended abandonment
or resignation was due to another employment.[2] Moreover, the proceedings below had
been stalled by transparent dilatory moves of petitioner which are basically
irreconcilable with the attitude of cooperativeness and obedience an employer is
expected to maintain at all times towards orders of the court issued by virtue of powers
expressly granted to it by law. (Section 10, Republic Act 875;) Section 19,
Commonwealth Act 103.)
The Industrial Court had no discretion in the matter. There was no controversial issue of
20
fault it had to decide. It was a plain case of exacting the most natural sanction for a
defiance of its order. If it overlooked the award, seemingly engrossed as it was in
resolving the issue of identity of the strikers raised by petitioner, that was plain error
which it is within Our prerogative to correct motu propio, as We do in appeals by writ of
error in respect to a manifest error not assigned nor discussed by appellant in his brief
(Section 7, Rule 51.) Employees and workers deprived of their means of livelihood in
defiance of a judicial order the legality of which is beyond dispute do not have to remind
the court of their right to get compensated of their lost earnings upon their actual
reinstatement. Award thereof should come as a matter of course. For Us not to rule on
this point now only to leave it for action by the National Labor Relations Board and
thereby give rise to another possible appeal to Us to unnecessarily lengthen even more
the tortuous road already travelled by respondents in their effort to get what has been
rightfully due them since years ago. We would be recreant to our constitutional duty to
give protection to labor that way.
IV
Taking all circumstances of this case into account, We find no justifiable reason why We
cannot apply here in respect to the amount of the award the ruling in Feati University
Club vs. Feati University, G.R. No. L-35103, Aug. 15, 1974, wherein We said:
"As to the amount of backwages, the Court applies the precedent recently set in Mercury
Drug Co. vs. CIR (L-23357, April 30, 1974, applied in NASSCO vs. CIR, L-31852 & L-32724,
June 28, 1974 and Almira, et al. vs. B.F. Goodrich Phil., Inc., L-34974, July 25, 1974.) of
fixing the amount of backwages to a just and reasonable level without qualification or
deduction so as to avoid protracted delay in the execution of the award for backwages
due to extended hearings and unavoidable delays and difficulties encountered in
determining the earnings of the laid-off employees ordered to be reinstated with
backwages during the pendency of the case for purposes of deducting the same from the
gross backwages awarded.
"As has been noted, this formula of awarding reasonable net backwages without
deduction or qualification relieves the employees from proving or disproving their
earnings during their lay-off and the employers from submitting counterproofs, and
obviates the twin evils of idleness on the part of the employee who would 'with folded
arms, remain inactive in the expectation that a windfall would come to him' (Itogon
Suyoc Mines, Inc. vs. Sangilo-Itogon Workers Union, 24 SCRA 873 (1968), cited in Diwa ng
Pagkakaisa vs. Filtex International Corp., 43 SCRA 287 (1972) per Makalintal, now C.J.)
and attrition and protracted delay in satisfying such award on the part of unscrupulous
employers who have seized upon the further proceedings to determine the actual
earnings of the wrongfully dismissed or laid-off employees to hold unduly extended
hearings for each and every employee awarded backwages and thereby render
practically nugatory such award and compel the employees to agree to unconscionable
settlements of their backwages award in order to satisfy their dire need. (See La
Campana Food Products, Inc. vs. CIR, 28 SCRA 314 (1969) and Kaisahan ng Mga
Manggagawa vs. La Campana Food Products, Inc., 36 SCRA 142 (1970)."
This formula of making a flat award for a given period has been adopted in subsequent
cases.[3] Accordingly, each of the 167 members of respondent unions named in the
decision under review and found by the Industrial Court to be entitled to reinstatement
should be paid backwages for two years, without any deduction or qualification, at the
respective rates of compensation they were receiving at the time of the strike, November
17, 1967. It goes without saying that all those who can be shown by incontestible
evidence to have died prior to the date of the strike shall be disregarded, but the heirs of
those who have died after the strike shall receive the respective proportional amounts
due their predecessors-in-interest as of the time of death, if the same occurred less than
two years from the date of the strike, and the full two-years backwages, if after two years
from said date. Any amount paid by reason or on the occasion of supposed resignations
after the strike shall not be deducted.
Before closing, it must be mentioned that the Court understands that notwithstanding
that its decision of August 30, 1974 is immediately executory, the employees concerned
have not yet been reinstated up to now. Petitioner is warned, that the pendency of the
present incidents is no excuse for its failure to comply immediately with said decision
and appropriate action would have to be taken to protect the dignity of the court, if such
attitude continues.
WHEREFORE, the motion for reconsideration of petitioner dated September 16, 1974 as
well as the motion to intervene of URCPICLA-PAFLU of October 16, 1974 are both denied
for lack of merit. On the other hand, the motion of respondent RCPIEU of November 6,
1974 for modification of judgment is granted, if only to complete Our decision, which
cannot be final without such award being included therein. Petitioner is ordered to pay
the 167 employees and workers of petitioner enumerated in the Industrial Court's order
of October 5, 1973 backwages for two years, without any deduction or qualification,
pursuant to the tenor of the above opinion. This resolution is also immediately
executory.
KIOK LOY vs. NLRC and PAMBANSANG KILUSAN NG PAGGAWA (KILUSAN)
G.R. No. L-54334
January 22, 1986
FACTS: In a certification election, KILUSAN, a legitimate late labor federation, won and
was subsequently certified in a resolution by the BLR as the sole and exclusive
bargaining agent of the rank-and-file employees of Sweden Ice Cream Plant (Company).
21
Thereafter, the Union furnished the Company with copies of its proposed CBA. At the
same time, it requested the Company for its counter proposals. The request were ignored
and remained unacted upon by the Company.
Left with no other alternative in its attempt to bring the Company to the bargaining table,
the Union filed a “Notice of Strike”, with the BLR on ground of unresolved economic
issues in collective bargaining.
The NLRC rendered its decision, the dispositive portion of which reads as follows:
WHEREFORE, the respondent [company] is hereby declared guilty of unjustified refusal
to bargain, in violation of Section (g) Article 248 (now Article 249), of P.D. 442, as
amended. xx
ISSUE: Did the NLRC act with grave abuse of discretion?
HELD: NO
Collective bargaining which is defined as negotiations towards a collective agreement, is
one of the democratic frameworks under the New Labor Code, designed to stabilize the
relation between labor and management and to create a climate of sound and stable
industrial peace. It is a mutual responsibility of the employer and the Union and is
characterized as a legal obligation. So much so that Article 249, par. (g) of the Labor Code
makes it an unfair labor practice for an employer to refuse “to meet and convene
promptly and expeditiously in good faith for the purpose of negotiating an agreement
with respect to wages, hours of work, and all other terms and conditions of employment
including proposals for adjusting any grievance or question arising under such an
agreement and executing a contract incorporating such agreement, if requested by either
party.
We are in total conformity with respondent NLRC’s pronouncement that petitioner
Company is GUILTY of unfair labor practice. It has been indubitably established that (1)
respondent Union was a duly certified bargaining agent; (2) it made a definite request to
bargain, accompanied with a copy of the proposed CBA, to the Company not only once
but twice which were left unanswered and unacted upon; and (3) the Company made no
counter proposal whatsoever all of which conclusively indicate lack of a sincere desire to
negotiate. A Company’s refusal to make counter proposal if considered in relation to the
entire bargaining process, may indicate bad faith and this is specially true where the
Union’s request for a counter proposal is left unanswered. Even during the period of
compulsory arbitration before the NLRC, petitioner Company’s approach and attitude-
stalling the negotiation by a series of postponements, non-appearance at the hearing
conducted, and undue delay in submitting its financial statements, lead to no other
conclusion except that it is unwilling to negotiate and reach an agreement with the
Union.
From the over-all conduct of petitioner company in relation to the task of negotiation,
there can be no doubt that the Union has a valid cause to complain against its
(Company’s) attitude, the totality of which is indicative of the latter’s disregard of, and
failure to live up to, what is enjoined by the Labor Code — to bargain in good faith.
NOTES: While it is a mutual obligation of the parties to bargain, the employer, however,
is not under any legal duty to initiate contract negotiation. The mechanics of collective
bargaining is set in motion only when the following jurisdictional preconditions are
present, namely,
(1) possession of the status of majority representation of the employees’ representative
in accordance with any of the means of selection or designation provided for by the
Labor Code;
(2) proof of majority representation; and
(3) a demand to bargain under Article 251, par. (a) of the New Labor Code . … all of
which preconditions are undisputedly present in the instant case.
G.R. No. 93983 June 29, 1992
DAVAO INTEGRATED PORT AND STEVEDORING SERVICES
CORPORATION, petitioner,
vs.
ALFREDO C. OLVIDA IN HIS CAPACITY AS VOLUNTARY ARBITRATOR, AND THE
ASSOCIATION OF TRADE UNIONS (ATU-TUCP)., respondents.
GRIÑO-AQUINO, J.:p
This petition for certiorari with prayer for the issuance of a temporary restraining order
impugns the Decision dated May 19, 1990 of the Voluntary Arbitrator, Alfredo C. Olvida,
in "Association or Trade Unions (ATU-TUCP) vs. Davao Integrated Port and Stevedoring
Services Corporation" (Case No. AC-220-RBXI-03-001-90 in the National Conciliation and
Mediation Board, Regional Branch XI. Davao City).
The controversy centers on the interpretation of two provisions of the five-year
Collective Bargaining Agreement (effective April 15, 1989 up to April 14, 1994) between
the petitioner, Davao Integrated Port and Stevedoring Services Corporation (or
"DIPSSC"), and the respondent, Association of Trade Unions [ATU-TUCP] (the Union, for
short). Those provisions are:
1. ARTICLE VIII — SICK, VACATION AND EMERGENCY LEAVES.
Sec. 4 — Emergency Leaves. The Company agrees to grant a maximum or six (6) days
Emergency Leave with pay per calendar year to all regular field workers, covered by this
agreement who have rendered at least six months of service (including overtime) per
calendar year, are members of the Regular Labor Pool, upon prior approval by the
company. Said Emergency Leave is not cumulative (sic) nor commutable." (pp. 46-
47, Rollo; Emphasis supplied.)
ARTICLE XVII — SPECIAL PROVISIONS.
Sec. 4 — Union Education and Training Fund. The Company agrees to contribute twelve
thousand (P12,000.00) pesos per year to the Union Education and Training Fund. (p.
48, Rollo.)
The controversy arose when petitioner, through its new Assistant General Manager
Benjamin Marzo, insisted that the above provisions are to be interpreted as:
1. Under Article VIII, Section 4 (Emergency Leave) — that before the intermittent field
workers who are members of the Regular Labor Pool can avail of the six (6) days
Emergency Leave provided in this provision, the workers must have rendered at least six
months of service per calendar year regardless of their employment status (i.e., regular
22
or probationary). Thus, all regular (non-intermittent) field workers, who belong to the
Regular Labor Pool must have rendered at least six months of service per calendar year
to be entitled to the six days Emergency Leave Pay. Petitioner pointed out that the
phrase "per calendar year" is used twice in Section 4, the first of which modifies the word
"pay" and the second modifies the phrase "who or rendered at least six months of
service." (pp. 130-131.) The entitlement and enjoyment of the emergency leave must be
strictly availed in the calendar year on which the six months service was rendered.
2. Under Article XVII, Section 4 (Union Education and Training Fund) — petitioner
required that the Union should first prepare and submit a seminar program before it can
avail of the Education and Training Fund of P12,000.00 per annum.
After due hearing, respondent Arbitrator rendered a decision on May 19, 1990,
upholding the union's interpretations of Article VIII, Section 4 and Article XVII, Section 4,
of the Collective Bargaining Agreement. The dispositive portion of the decision reads:
1. The first sentence of Article VIII, Section 4 which read: "The Company agrees to grant
maximum or six (6) days Emergency Leave with pay per calendar year to all regular field
workers" — refers to all non-intermittent regular field workers who reported for work
everyday and therefore the requirement of six (6) months or 1,248 hours does not apply;
whereas, the next sentences which stated the following: "covered by this agreement who
have rendered at least six months (including overtime) per calendar year, are members
of the Regular Labor Pool, upon prior approval by the company." — refers to
intermittent workers/members of the Regular Labor Pool, whose work depends upon
the arrival of vessels in the wharf and therefore must comply [with] the requirement in
the agreement, and so before it can avail of the six (6) days Emergency Leave with pay
must first rendered at least six months (including overtime) per calendar year. Once the
1,248 hours (6 months) is complied subject workers can avail the benefit anytime an
Emergency occurred and the same condition of 1,248 hours shall no longer apply in the
succeeding calendar years.
2. With respect to the other provision of Article XVII, Section 4 of the new CBA — Union
Education and Training Fund — since the language of the agreement is clear and simple
the respondent company shall comply [with] its obligation by contributing to the Union
Education and Training Fund the amount of Twelve Thousand (P12,000.00) pesos per
year at the beginning of each and every year and/or P1,000.00 at the end of each and
every month during the lifetime of the CBA at the option of the respondent company. Any
post signing condition impose by either or the parties that may affect the spontaneous
implementation of Article XVII, Section 4 is foreign to the language of the contract. (pp.
139-140. Rollo.)
In this petition for certiorari, petitioner assails the respondent Arbitrator's construction
of Section 4, Article VII (on emergency leave) and Section 4, Article XVII (on the Union
Education and Training Fund) of the CBA.
After deliberating on the divergent views of the parties on the aforementioned
controversial provisions of the CBA, the Court finds the petitioner's interpretation of
Section 4, Article VIII (emergency leave) more logical than the Arbitrator's and the
Union's. The provision of the CBA is clear: (1) the employee must be a member of the
Regular Labor Pool; (2) he is entitled to only six (6) days emergency leave with pay per
calendar year; and (3) he must have rendered service for at least six (6) months during
the year when he took his emergency leave. The emergency leave may be staggered or it
may last for any number of days as emergencies arise but the employee is entitled only
to six (6) days of emergency leave "with pay" per year. Since the emergency leave is
allowed to enable the employee to attend to an emergency in his family or household, it
may be taken at any time during the calendar year but he must render at least six months
service for that year to be entitled to collect his wages for the six (6) days of his
emergency leave. Since emergencies are unexpected and unscheduled happenings, it
would be absurd to require the employee to render six (6) months service before being
entitled to take a six-day emergency leave with pay for it would mean that no emergency
leave can be taken by an employee during the first six months of a calendar year.
With regard to the provision on Union Education and Training Fund in Section 4, Article
XVII of the CBA, the petitioner's requirement that the Union submit a seminar program
for each calendar year before it may claim the company's P12,000 yearly donation to the
fund, is not warranted by the terms of the CBA. The Arbitrator did not abuse his
discretion in ruling that the respondent company should comply with its obligation to
contribute to the Union Education and Training Fund the amount of Twelve Thousand
(P12,000.00) pesos per year by paying said amount to the Union at the beginning of each
and every year, or contributing P1,000.00 at the end of each and every month during the
lifetime or the CBA, at the option of the company. As correctly observed by the
Arbitrator, the employer's demand for the submission of a seminar program "is foreign
to the language of the contract" with the union.
WHEREFORE, the petition for certiorari is GRANTED. Section 4, Article VIII of the CBA is
interpreted to mean that any employee who is a member of the Regular Labor Pool is
entitled to six (6) days emergency leave with pay per calendar year provided he has
rendered at least six (6) months service during the year when he took his emergency
leave. The decision of the respondent Voluntary Arbitrator is AFFIRMED in other
respects. No costs.
SO ORDERED.
Victoria v. Inciong (1988)
Petitioners: SATURNO A. VICTORIA
Respondents: HON. AMADO G. INCIONG, DEPUTY MINISTER, AND FAR EAST
BROADCASTING COMPANY, INC. (FEBC)
Ponente: Fernan
Topic: Work Enlightenment
FACTS:
 Victoria was employed on March 17, 1956 by FEBC as a radio transmitter
operator.
 Sometime in July 1971, he and his co-workers organized FEBC Employees
Association.
 After registering their association with the then Department of Labor, they
demanded recognition of said association by the company but the latter refused
on the ground that being a non-profit, non-stock, non-commercial and religious
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 corporation, it is not covered by Republic Act 875, otherwise known as the
Industrial Peace Act, the labor law enforced at that time.
 In conciliation meetings at the Department of Labor, the Director of Labor
Relations Edmundo Cabal advised the union members that the company could
not be forced to recognize them or to bargain collectively with them because it
is a non-profit, non-commercial and religious organization.
 Notwithstanding such advice, the union members led by Victoria as its
president, declared a strike and picketed the company’s premises on
September 6, 1972 for the purpose of seeking recognition of the labor union.
 As a countermeasure, the company filed a case for damages with preliminary
injunction against the strikers before the CFI Bulacan. Said court issued an
injunction enjoining the three-day-old strike staged against the company. The
complaint was later amended seeking to declare the strike illegal.
 Upon the declaration of martial law on September 21, 1972 and the
promulgation of Presidential Decree No. 21 creating the National Labor
Relations Commission, the ad hoc National Labor Relations Commission took
cognizance of the strike through "FEBC Employees Association v. FEBC” and
“Generoso Serino v. FEBC,” both cases for reinstatement due to FEBC’s refusal
to accept the union's offer to return to work during the pendency of the case in
the CFI.
 On December 28, 1972, Arbitrator Flavio Aguas rendered a joint decision in the
two cases recognizing the jurisdiction of the CFI Bulacan. The dispositive
portion stated: “This Order shall, however, be without prejudice to whatever
decision the [CFI] Bulacan may promulgate in Civil Case No. 750-V and to the
requirements the existing order may need of people working with the mass
media of communications.”
 The decision of the arbitrator was successively appealed to the ad hoc NLRC,
the Secretary of Labor and the Office of the President of the Philippines, and
was affirmed in all instances.
 On April 23, 1975, CFI Bulacan rendered judgment, “declaring that the strike
admitted by the defendants to have been declared by them is illegal inasmuch
as it was for the purpose of compelling the plaintiff-company to recognize their
labor union which could not be legally done because the plaintiffs were not
covered by Republic Act 875.”
 On April 24, 1975, by virtue of the CFI decision, FEBC notified Victoria that he is
dismissed effective April 26, 1975.
 Thereupon, Victoria filed a case before the NLRC against FEBC alleging violation
of Article 267 of the Labor Code which requires clearance from the Secretary of
Labor for every shutdown of business establishments or dismissal of
employees.
 On February 27, 1976, the Labor Arbiter decided in Victoria’s favor declaring
the dismissal to be illegal, thereby ordering reinstatement with full backwages.
 On appeal, the arbiter’s decision was affirmed by the NLRC.
 On appeal to the Secretary of Labor, it was set aside. The Secretary ruled: “We
do not agree with the [NLRC ruling] that an application for clearance to
terminate [Victoria] is mandatory on the part of [FEBC] before terminating
[Victoria’s] services. We believe that what would have been necessary was a
report as provided for under Section 11 [f], Rule XIV, Book V of the Rules and
Regulations Implementing the Labor Code. Moreover, even if an application for
clearance was filed, this Office would have treated the same as a report.
Otherwise, it would render nugatory the Decision of the Arbitrator dated
December 28, 1972 in Case Nos. 0021 and 0285 which was affirmed by the
Commission, the Secretary of Labor and the Office of the President of the
Philippines, ordering his temporary reinstatement, subject to whatever
Decision the CFI Bulacan may promulgate in Civil Case No. 750-V. It could be
clearly inferred from said [NLRC] Decisions that if the strike is declared illegal,
the strikers will be considered to have lost their employment status under the
then existing laws and jurisprudence, otherwise strikers could stage illegal
strike with impunity. Since the strike was declared illegal, [FEBC] acted in good
faith when it dispensed with the services of [Victoria]. For failure of [FEBC] to
file the necessary report and based on equitable considerations, [Victoria]
should be granted separation pay equivalent to one-half month salary for every
year of service.”
 Victoria insists that Article 267(b) (Note: repealed) of the Labor Code is very
clear. It does not make any distinction as to the ground for dismissal. Whether
or not the dismissal sought by the employer company is for cause, it is
imperative that the company must apply for a clearance from the Secretary of
Labor.
ISSUES:
 WoN a clearance from the Secretary of Labor is still necessary before Victoria
can be dismissed
o NO. In Madrigal & Company, Inc. v. Zamora, penned by Justice
Abraham F. Sarmiento promulgated on June 30, 1987, the Court ruled
in agreement with the findings of then Presidential Assistant for Legal
Affairs Ronaldo Zamora that the purpose in requiring a prior
clearance from the Secretary of Labor in cases of shutdown or
dismissal of employees is to afford the Secretary ample opportunity to
examine and determine the reasonableness of the request.
o We agree with the Solicitor General. Technically speaking, no
clearance was obtained by Victoria from the then Secretary of Labor,
the last step towards full compliance with the requirements of law on
the matter of dismissal of employees. However, the rationale behind
the clearance requirement was fully met. The Secretary of Labor was
apprised of FEBC’s intention to terminate Victoria’s services. This in
effect is an application for clearance to dismiss Victoria from
employment. The affirmance of the restrictive condition in the
dispositive portion of the labor arbiter's decision (in the earlier two
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 cases) by the Secretary of Labor and the Office of the President of the implementing the Labor Code which
Philippines signifies a grant of authority to dismiss Victoria in case the provides:
strike is declared illegal by CFI Bulacan. Consequently and as correctly  “Every employer shall submit a report to the Regional Office
stated by the Solicitor General, FEBC acted in good faith when it in accordance with the form presented by the Department
terminated the employment of Victoria upon a declaration, of illegality on the following instances of termination of employment,
of the strike by CFI Bulacan. Moreover, the then Secretary of Labor suspension, lay-off or shutdown which may be effected by
manifested his conformity to the dismissal, not once, but twice. In this the employer without prior clearance within five [5] days
regard, the mandatory rule on clearance need not be applied. thereafter:
o The strike staged by the union in 1972 was a futile move. The law  xxx xxx xxx
then enforced, Republic Act 875 specifically excluded FEBC from its  [f] All other terminations of employment, suspension, lay-
coverage. Even if the parties had gone to court to compel recognition, offs or shutdowns, not otherwise specified in this and in the
no positive relief could have been obtained since the same was not immediately preceding sections."
sanctioned by law. Because of this, there was no necessity on the part o To hold otherwise would render nugatory the conditions set forth in
of FEBC to show specific acts of Victoria during the strike to justify his the decision of Labor Arbiter Aguas on the basis of which Victoria was
dismissal. temporarily reinstated.
o This is a matter of responsibility and of answerability. Victoria as NOTES:
a union leader, must see to it that the policies and activities of the
union in the conduct of labor relations are within the precepts of
law and any deviation from the legal boundaries shall be
imputable to the leader. He bears the responsibility of guiding
the union along the path of law and to cause the union to demand
what is not legally demandable, would foment anarchy which is a
prelude to chaos.
o Victoria should have known and it was his duty to impart this
imputed knowledge to the members of the union that employees
and laborers in non-profit organizations are not covered by the
provisions of the Industrial Peace Act and the Court of Industrial
Relations [in the case at bar, the CFI] has no jurisdiction to
entertain petitions of labor unions or organizations of said non-
profit organizations for certification as the exclusive bargaining
representatives of said employees and laborers.
o As a strike is an economic weapon at war with the policy of the
Constitution and the law at that time, a resort thereto by laborers
shall be deemed to be a choice of remedy peculiarly their own, and
outside of the statute, and as such, the strikers must accept all the
risks attendant upon their choice. If they succeed and the employer
succumbs, the law will not stand in their way in the enjoyment of the
lawful fruits of their victory. But if they fail, they cannot thereafter
invoke the protection of the law for the consequences of their conduct
unless the right they wished vindicated is one which the law will, by
all means, protect and enforce.
o We further agree with the Acting Secretary of Labor that what was
required in the case of petitioner's dismissal was only a report as
provided under Section II [f] of Rule XIV of the Rules and Regulations

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