Magsino Labor Relations Digests, Arbues 2019
G.R. No. L-22008 November 3, 1924
PEOPLE v JULIO POMAR
Facts:
Prosecuting attorney of the City of Manila presented a complaint in the
Court of First Instance, accusing the defendant of a violation of section 13 in
connection with section 15 of Act No. 3071. The accused was the manager and
person in charge of La Flor de la Isabela, Employee Macaria Fajardo was pregnant
and granted vacation leave (VL). However, accused refused to pay to Fajardo the
sum P80, to which she was entitled as her regular wages corresponding to 30 days
before and 30 days after her delivery. The defendant answered and admitted at the
trial all of the allegations contained in the complaint, and contended that the
provisions of Act No. 3071 were unconstitutional and void.
Section 13 of Act No. 3071 is as follows:
Every person, firm or corporation owning or managing a factory, shop or place of
labor of any description shall be obliged to grant to any woman employed by it as
laborer who may be pregnant, thirty days vacation with pay before and another thirty
days after confinement: Provided, That the employer shall not discharge such
laborer without just cause, under the penalty of being required to pay to her wages
equivalent to the total of two months counted from the day of her discharge.
Section 15 of the same Act is as follows:
Any person, firm or corporation violating any of the provisions of this Act shall be
punished by a fine of not less than fifty pesos nor more than two hundred and fifty,
or by imprisonment for not less than ten days nor more than six months, or both, in
the discretion of the court.
In the case of firms or corporations, the presidents, directors or managers thereof or,
in their default, the persons acting in their stead, shall be criminally responsible for
each violation of the provisions of this Act.
Said section 13 was enacted in the exercise of its police power, with the
praiseworthy purpose of safeguarding the health of pregnant women laborers in
"factory, shop or place of labor of any description," and of insuring to them, to a
certain extent, reasonable support for one month before and one month after their
delivery.
Issue:
1
Whether said Act has been adopted in the reasonable and lawful exercise of
the police power of the state.
Held: No.
Sir William Blackstone defines the police power as "the due regulation and
domestic order of the kingdom, whereby the inhabitants of a state, like members of a
well-governed family, are bound to conform their general behavior to the rules of
propriety, good neighborhood, and good manners, and to be decent, industrious, and
inoffensive in their respective stations."
Mr. Jeremy Bentham, distributed into eight distinct branches: (1) prevention
of offenses; (2) prevention of calamities; (3) prevention of endemic diseased; (4)
police of charity; (5) police of interior communications; (6) police of public
amusements; (7) police for recent intelligence; (8) police for registration."
Justice Cooley says: "The police power is the power vested in the
legislature by the constitution to make, ordain, and establish all manner of
wholesome and reasonable laws, statutes, and ordinances, either with penalties or
without, not repugnant to the constitution, as they shall judge to be for the good and
welfare of the commonwealth, and of the subject of the same.
It has been said that the particular statute before us is required in the interest
of social justice for whose end freedom of contract may lawfully be subjected to
restraint. The liberty of the individual to do as he pleases, even in innocent matters,
is not absolute. That liberty must frequently yield to the common good, and the line
beyond which the power of interference may not be pressed is neither definite nor
unalterable, may be made to move, within limits not well defined, with changing
needs and circumstances.
The right of a person to sell his labor upon such terms as he deems proper
is, in its essence, the same as the right of the purchaser of labor to prescribe the
conditions upon which he will accept such labor from the person offering to sell. In
all such particulars the employer and the employee have equality of right, and any
legislation that disturbs that equality is an arbitrary interference with the liberty of
contract, which no government can legally justify in a free land, under a constitution
which provides that no person shall be deprived of his liberty without due process of
law.
The state, when providing by legislation for the protection of the public
health, the public morals, or the public safety, is subject to and is controlled by the
paramount authority of the constitution of the state, and will not be permitted to
 Magsino Labor Relations Digests, Arbues 2019
violate rights secured or guaranteed by that instrument or interfere with the execution
of the powers and rights guaranteed to the people under their law — the constitution.
The police power of the state is a growing and expanding power. As
civilization develops and public conscience becomes awakened, the police power
may be extended, as has been demonstrated in the growth of public sentiment with
reference to the manufacture and sale of intoxicating liquors. But that power cannot
grow faster than the fundamental law of the state, nor transcend or violate the
express inhibition of the people's law — the constitution. If the people desire to have
the police power extended and applied to conditions and things prohibited by the
organic law, they must first amend that law.
It will also be noted from an examination of said section 13, that it takes no
account of contracts for the employment of women by the day nor by the piece. The
law is equally applicable to each case. It will hardly be contended that the person,
firm or corporation owning or managing a factory, shop or place of labor, who
employs women by the day or by the piece, could be compelled under the law to pay
for sixty days during which no services were rendered.
It has been decided in a long line of decisions of the US SC that the right to
contract about one's affairs is a part of the liberty of the individual, protected by the
"due process of law" clause of the constitution.
For all of the foregoing reasons, we are fully persuaded, under the facts and
the law, that the provisions of section 13, of Act No. 3071 of the Philippine
Legislature, are unconstitutional and void, in that they violate and are contrary to the
provisions of the first paragraph of section 3 of the Act of Congress of the US.
WEST COAST HOTEL CO. v PARRISH 300 US 379 (1937)
Facts:
Under Washington state law, the Industrial Welfare Committee and
Supervisor of Women in Industry set a minimum wage of $14.50 for each work
week of 48 hours. Elsie Parrish, an employee of the West Coast Hotel Company,
received an amount less than this wage. Parrish brought a suit to recover the
difference between the wages paid to her and the minimum wage fixed by state law.
In ruling for the hotel, the lower court relied on Adkins v. Children's Hospital
(1923), in which the Court struck down a minimum wage law for working women.
Issue:
2
Does a minimum wage law for women violate the Due Process Clause of
the Fifth Amendment, as applied to the states by the Fourteenth Amendment?
Held: No.
The establishment of minimum wages for women was constitutional.
Echoing Muller v. Oregon (1908), the majority ruled that the state may use its police
power to restrict the individual freedom to contract. The decision overruled Atkins
and marked the Court's departure from the expansive view of the freedom to
contract. The decision is generally regarded as having ended the Lochner era, a
period in American legal history in which the Supreme Court tended to invalidate
legislation aimed at regulating business.
While Justice Hughes wrote the opinion, the stark doctrinal shift resulted
from Justice Owen Josephus Roberts changing his perspective on this issue.
According to Hughes, President Franklin Roosevelt's reelection in 1936 and the
impressive achievements of the New Deal caused Roberts to abandon his affiliation
with the Court's conservative justices.
G.R. No. L-21484 November 29, 1969
THE AGRICULTURAL CREDIT and COOPERATIVE FINANCING
ADMINISTRATION (ACCFA) v ACCFA SUPERVISORS' ASSOCIATION
Facts:
The Unions started protesting against alleged violations and non-
implementation of a CBA which was originally agreed upon to be effective a full
year beginning July 1, 1961. On October 25, 1962 until November 26, 1962, the
Unions were on a strike. On October 30, 1962 the Unions filed a complaint with the
Court of Industrial Relations (CIR) against the ACCFA for having allegedly
committed acts of unfair labor practice, namely: violation of the CBA in order to
discourage the members of the Unions in the exercise of their right to self-
organization, discrimination against said members in the matter of promotions, and
refusal to bargain. On March 25, 1963, CIR ruled in favor of the Union. MR denied
(G.R. No. L-21484).
 Magsino Labor Relations Digests, Arbues 2019
ACCFA was renamed as Agricultural Credit Administration (ACA). On
March 17, 1964 the ACCFA Supervisors' Association and the ACCFA Workers'
Association filed a petition for certification election with the CIR praying that they
be certified as the exclusive bargaining agents for the supervisors and rank-and-file
employees, respectively, in the ACA. ACA denied that the Unions represented the
majority of the employees, respectively, in the ACA. It further alleged that the
petition was premature, that the ACA was not the proper party to be notified and to
answer the petition, and that the employees and supervisors could not lawfully
become members of the Unions, nor be represented by them. However, in a joint
manifestation of the Unions dated May 7, 1964, with the conformity of the ACA
Administrator and of the Agrarian Counsel in his capacity as such and as counsel for
the National Land Reform Council, it was agreed "that the union petitioners in this
case represent the majority of the employees in their respective bargaining units" and
that only the legal issues raised would be submitted for the resolution of the trial
Court. The trial Court in its order dated May 21, 1964 certified "the ACCFA
Workers' Association and the ACCFA Supervisors' Association as the sole and
exclusive bargaining representatives of the rank-and-file employees and supervisors,
respectively, of the Agricultural Credit Administration." Said order was affirmed by
the CIR en banc in its resolution dated August 24, 1964 (G.R. No. L-23605).
Issue:
WON CIR has jurisdiction to entertain the petition of the Unions for
certification election on the ground that it (ACA) is engaged in governmental
functions.
Held: No.
Under Section 3 of the Agricultural Land Reform Code the ACA was
established, among other governmental agencies, to extend credit and similar
assistance to agriculture, in pursuance of the policy enunciated in Section 2.
Section 110 provides that "the administrative machinery of the ACCFA
shall be reorganized to enable it to align its activities with the requirements and
objective of this Code and shall be known as the Agricultural Credit
Administration." Under Section 112 the sum of P150M was appropriated out of
national funds to finance the additional credit functions of the ACA as a result of the
land reform program laid down in the Code. The power to audit the operations of
farmers' cooperatives and otherwise inquire into their affairs, as given by Section
113, is in the nature of the visitorial power of the sovereign, which only a
government agency specially delegated to do so by the Congress may legally
exercise.
3
The implementation of the land reform program of the government
according to Republic Act No. 3844 is most certainly a governmental, not a
proprietary, function; and for that purpose Executive Order No. 75 has placed the
ACA under the Land Reform Project Administration together with the other member
agencies, the personnel complement of all of which are placed in one single pool and
made available for assignment from one agency to another, subject only to Civil
Service laws, rules and regulations, position classification and wage structures.
The considerations set forth above militate quite strongly against the
recognition of collective bargaining powers in the respondent Unions within the
context of Republic Act No. 875, and hence against the grant of their basic petition
for certification election as proper bargaining units. The ACA is a government office
or agency engaged in governmental, not proprietary functions. Under this traditional
classification, such constituent functions are exercised by the State as attributes of
sovereignty, and not merely to promote the welfare, progress and prosperity of the
people — these letter functions being ministrant he exercise of which is optional on
the part of the government.
The growing complexities of modern society, however, have rendered this
traditional classification of the functions of government quite unrealistic, not to say
obsolete. The areas which used to be left to private enterprise and initiative and
which the government was called upon to enter optionally, and only "because it was
better equipped to administer for the public welfare than is any private individual or
group of individuals," continue to lose their well-defined boundaries and to be
absorbed within activities that the government must undertake in its sovereign
capacity if it is to meet the increasing social challenges of the times. There can be no
dispute as to the fact that the land reform program contemplated in the said Code is
beyond the capabilities of any private enterprise to translate into reality.
Respondent Unions are not entitled to the certification election sought in the
Court below. Such certification is admittedly for purposes of bargaining in behalf of
the employees with respect to terms and conditions of employment, including the
right to strike as a coercive economic weapon, as in fact the said unions did strike in
1962 against the ACCFA (G.R. No. L-21824). This is contrary to Section 11 of
Republic Act No. 875
Separate opinion of Justice Fernando
 Magsino Labor Relations Digests, Arbues 2019
Governmental functions are classified into constituent and ministrant. "The
former are those which constitute the very bonds of society and are compulsory in
nature; the latter are those that are undertaken only by way of advancing the general
interests of society, and are merely optional.
President Wilson enumerates the constituent functions as follows: '(1) The
keeping of order and providing for the protection of persons and property from
violence and robbery. (2) The fixing of the legal relations between man and wife and
between parents and children. (3) The regulation of the holding, transmission, and
interchange of property, and the determination of its liabilities for debt or for crime.
(4) The determination of contract rights between individuals. (5) The definition and
punishment of crime. (6) The administration of justice in civil cases. (7) The
determination of the political duties, privileges, and relations of citizens. (8)
Dealings of the state with foreign powers: the preservation of the state from external
danger or encroachment and the advancement of its international interests.'
The ministrant functions were then enumerated, followed by a statement of
the basis that would justify engaging in such activities. Thus: "The most important of
the ministrant functions are: public works, public education, public charity, health
and safety regulations, and regulations of trade and industry. The principles
determining whether or not a government shall exercise certain of these optional
functions are: (1) that a government should do for the public welfare those things
which private capital would not naturally undertake and (2) that a government should
do these things which by its very nature it is better equipped to administer for the
public welfare than is any private individual or group of individuals."
It is thus apparent that until the administration of President Roosevelt, the
laissez-faire principle resulted in the contraction of the sphere where governmental
entry was permissible. The object was to protect property even if thereby the needs
of the general public would be left unsatisfied.
The laissez-faire principle never found full acceptance in the Philippines.
Moreover, to erase any doubts, the ConCon saw to it that our fundamental law
embodies a policy of the responsibility thrust on government to cope with social and
economic problems and an earnest and sincere commitment to the promotion of the
general welfare through state action. It would thus follow that the force of any legal
objection to regulatory measures adversely affecting property rights or to statutes
organizing public corporations that may engage in competition with private
enterprise has been blunted. Unless there be a clear showing of any invasion of rights
guaranteed by the Constitution, their validity is a foregone conclusion.
4
G.R. No. 103524 April 15, 1992
CESAR BENGZON v HON. FRANKLIN N. DRILON
Facts:
RA 910 as amended was enacted to provide the retirement pensions of
Justices of the SC and of the CA and its automatic readjustment. Similar benefits
were given to members of ConCom and AFP under RA 1568 and PD 578
respectively. However, PD 644 repealed RA 1797 thus disallowing the automatic
readjustment of pensions of retired justices and AFP. PD 1638 however allowed the
automatic readjustment of pensions only for AFP.
Thus, the Congress approved a bill for the reenactment of the repealed RA
1797 to allow automatic adjustment of pensions of justices. President Aquino,
however vetoed HB. 16297 on July 11, 1990 on the for violating the policy on
standardization of compensation as articulated in RA 6758 (Compensation and
Position Classification Act of 1989). She further said that "the Government should
not grant distinct privileges to select group of officials whose retirement benefits
under existing laws already enjoy preferential treatment over those of the vast
majority of our civil service servants."
Prior to the filing of the petition, the SC issued a resolution granting the
administrative matter filed by another retired justice for the adjustment of their
pension. Pursuant to the above resolution, Congress included in the General
Appropriations Bill for Fiscal Year 1992 certain appropriations for the Judiciary
intended for the payment of the adjusted pension rates due the retired Justices of SC
and CA. Such was again vetoed by Cory for nullifying her ealier veto.
Issue:
Held:
The veto power is not absolute. The Executive must veto a bill in its entirety
or not at all. However, when it comes to appropriation, revenue or tariff bills, the
Constitution has wisely provided the "item veto power" to avoid inexpedient riders
being attached to an indispensable appropriation or revenue measure. The power to
 Magsino Labor Relations Digests, Arbues 2019
disapprove any item or items in an appropriate bill does not grant the authority to
veto a part of an item and to approve the remaining portion of the same item.
It turns out, however, that P.D. 644 never became valid law. If P.D. 644
was not law, it follows that RA 1797 was not repealed and continues to be effective
up to the present. In the same way that it was enforced from 1951 to 1975, so should
it be enforced today. HB 16297 was superfluous as it tried to restore benefits which
were never taken away validly. The veto of HB 16297 in 1991 did not also produce
any effect. Both were based on erroneous and non-existent premises. From the
foregoing discussion, it can be seen that when the President vetoed certain provisions
of the 1992 GAA, she was actually vetoing RA 1797 which, of course, is beyond her
power to accomplish.
In the case at bar, the veto of these specific provisions in the GAA is
tantamount to dictating to the Judiciary how its funds should be utilized, which is
clearly repugnant to fiscal autonomy. The freedom of the CJ to make adjustments in
the utilization of the funds appropriated for the expenditures of the judiciary,
including the use of any savings from any particular item to cover deficits or
shortages in other items of the Judiciary is withheld. Fiscal autonomy means freedom
from outside control.
It can not be denied that the retired Justices have a vested right to the
accrued pensions due them pursuant to RA 1797. The right to a public pension is of
statutory origin. Any argument which seeks to remove special privileges given by
law to former Justices of this Court and the ground that there should be no "grant of
distinct privileges" or "preferential treatment" to retired Justices ignores these
provisions of the Constitution and, in effect, asks that these Constitutional provisions
on special protections for the Judiciary be repealed.
The SolGen was wrong when it said that giving public funds to retirees who
are now living a private life is tantamount to robbery. All that the retirees ask is to be
given the benefits granted by law. To characterize them as engaging in "robbery" is
intemperate, abrasive, and disrespectful more so because the argument is unfounded.
For as long as these retired Justices are entitled under laws which continue
to be effective, the government can not deprive them of their vested right to the
payment of their pensions.
G.R. No. 47800. December 2, 1940
MAXIMO CALALANG, Petitioner, v. A. D. WILLIAMS
5
SOCIAL JUSTICE. — Social justice is "neither communism, nor despotism, nor
atomism, nor anarchy," but the humanization of laws and the equalization of social
and economic forces by the State so that justice in its rational and objectively secular
conception may at least be approximated. Social justice means the promotion of the
welfare of all the people, the adoption by the Government of measures calculated to
insure economic stability of all the competent elements of society, through the
maintenance of a proper economic and social equilibrium in the interrelations of the
members of the community, constitutionally, through the adoption of measures
legally justifiable, or extra-constitutionally, through the exercise of powers
underlying the existence of all governments on the time-honored principle of salus
populi est suprema lex. Social justice, therefore, must be founded on the recognition
of the necessity of interdependence among divers and diverse units of a society and
of the protection that should be equally and evenly extended to all groups as a
combined force in our social and economic life, consistent with the fundamental and
paramount objective of the state of promoting the health, comfort, and quiet of all
persons, and of bringing about "the greatest good to the greatest number."
G.R. No. 119243 April 17, 1997 BREW MASTER v NATIONAL
FEDERATION OF LABOR UNIONS (NAFLU)
Facts:
Complainant was employed by respondent as route helper. From 19 April
1993 up to 19 May 1993, complainant went on absent without permission (AWOP).
On 20 May 1993, respondent thru Mr. Rodolfo Valentin, sent a Memo to
complainant asking the latter why he should not be disciplined. Complainant
justified that his wife left and he was forced to take his children back to Samar.
Respondent issued a Notice of Termination stating that the complainant was aware
of the company Rules and Regulations that absence without permission for 6
consecutive working days is considered abandonment of work.
The LA dismissed the complaint for lack of merit, citing the principle of
managerial control, which recognizes the employer's prerogative to prescribe
 Magsino Labor Relations Digests, Arbues 2019
reasonable rules and regulations to govern the conduct of his employees. The
principle allows the imposition of disciplinary measures which are necessary for the
efficiency of both the employer and the employees. NLRC modified the LA decision
and held that complainant's dismissal was invalid. Complainant appellant's prolonged
absences, although unauthorized, may not amount to gross neglect or abandonment
of work to warrant outright termination of employment.
Petitioner filed this special civil action contending that the NLRC
committed grave abuse of discretion. It argued that the NLRC failed to consider the
rationale behind petitioner's Rules and Regulation and that it was deprived of its
prerogative to enforce them.
Issue:
WON NLRC committed gradilej.
Held: No.
A scrutiny of the facts discloses that complainant's absence was precipitated
by grave family problem as his wife unexpectedly deserted him and abandoned the
family. Petitioner's finding that complainant was guilty of abandonment is
misplaced. Abandonment as a just and valid ground for dismissal requires the
deliberate, unjustified refusal of the employee to resume his employment. Two
elements must then be satisfied: (1) the failure to report for work or absence without
valid or justifiable reason; and (2) a clear intention to sever the employer-employee
relation. The second element is the more determinative factor and must be evinced
by overt acts. Likewise, the burden of proof is on the employer to show the
employee's clear and deliberate intent to discontinue his employment without any
intention of returning, mere absence is not sufficient. While we do not decide here
the validity of petitioner's Rules and Regulations on continuous, unauthorized
absences, what is plain is that it was wielded with undue haste resulting in a
deprivation of due process, thus not allowing for a determination of just cause or
abandonment.
G.R. No. 110017 January 2, 1997 RODOLFO FUENTES v NLRC
Facts:
On 31 October 1990 petitioners filed with the DOLE office in Cagayan de
Oro City a complaint for illegal dismissal with prayer for reinstatement, against
private respondent Agusan Plantation, and/or Chang Chee Kong. In their answer
respondents denied the allegations of petitioners and contended that upon receipt of
instructions from the head office in Singapore to implement retrenchment, private
respondentsconducted grievance conferences or meetings with petitioners
6
representative labor organization, the Association of Trade Unions and its local
president and its board of directors. Private respondents also contended that the 30-
day notices of termination were duly sent to petitioners.
LA ruled in favor of petitioners. NLRC reversed. Petitioners filed for R65
with the SC. They argued that their dismissal or retrenchment did not comply with
the requirements of Art. 283 of the Labor Code.
Issue:
WON there is a valid retrenchment.
Held: No.
Under Art. 283 therefore retrenchment may be valid only when the
following requisites are met: (a) it is to prevent losses; (b) written notices were
served on the workers and DOLE at least one (1) month before the effective date of
retrenchment; and, (c) separation pay is paid to the affected workers.
The closure of a business establishment is a ground for the termination of
the services of an employee unless the closing is for the purpose of circumventing
pertinent provisions of the Labor Code. But while business reverses can be a just
cause for terminating employees, they must be sufficiently proved by the employer.
There is no question that an employer may reduce its work force to prevent
losses. However, these losses must be serious, actual and real. Otherwise, this ground
for termination of employment would be susceptible to abuse by scheming
employers who might be merely feigning losses in their business ventures in order to
ease out employees.
As regards the requirement of notices of termination to the employees, it is
undisputed that the Notice of Retrenchment was submitted to the DOLE on 12
September 1990. However, the employees were terminated either on September 25
or 30, 1990. The one-month notice of retrenchment filed with the DOLE and served
on the workers before the intended date thereof is mandatory. Private respondents
failed to comply with this requisite.
G.R. No. 112630 September 5, 1997 CORAZON JAMER v NLRC
 Magsino Labor Relations Digests, Arbues 2019
Facts:
Corazon Jamer and Christina Amortizado were employees of Isetan until
they were terminated on August 31, 1990 on the alleged ground of dishonesty in
their work as Store Cashiers. Complainants function as Store Cashiers is to reconcile
the cash sales with the tally sheets to determine shortages or coverage.
On July 16, 1990, complainants discovered a shortage of P15k. They did
not immediately report the shortage to management hoping to find the cause of the
shortage but to no avail they failed to reconcile the same. Hence, they had no other
alternative but to report the same to the management on July 17, 1990. Respondent
Isetan conducted an administrative investigation. Finding the explanation of the
complainants to be unsatisfactory, respondent dismissed the complainants from the
service on August 31, 1990.
LA held that there was illegal dismissal. NLRC reversed. R65 with SC
without filing MR with the NLRC.
Issue:
WON there was illegal dismissal.
Held: No.
Substantial evidence exists to warrant the finding that petitioners were
validly dismissed for just cause and after observance of due process.
Under the Labor Code, as amended, the requirements for the lawful
dismissal of an employee by his employer are two-fold: the substantive and the
procedural. Not only must the dismissal be for a valid or authorized cause as
provided by law (Articles 282, 283 and 284, of the Labor Code, as amended), but the
rudimentary requirements of due process, basic of which are the opportunity to be
heard and to defend himself, must be observed before an employee may be
dismissed.
With respect to the first requisite, Article 282 of the Labor Code is
controlling. The failure of petitioners to report the aforequoted shortages and
overages to management as soon as they arose resulted in the breach of the fiduciary
trust reposed in them by respondent company, thereby causing the latter to lose
confidence in them. This warrants their dismissal.
Social justice ceases to be an effective instrument for the "equalization of
the social and economic forces" by the State when it is used to shield wrongdoing.
While it is true that compassion and human consideration should guide the
7
disposition of cases involving termination of employment since it affects one's
source or means of livelihood, it should not be overlooked that the benefits accorded
to labor do not include compelling an employer to retain the services of an employee
who has been shown to be a gross liability to the employer. The intent is to balance
the scale of justice; to put the two parties on relatively equal positions. There may be
cases where the circumstances warrant favoring labor over the interests of
management but never should the scale be so tilted if the result is an injustice to the
employer, Justicia remini regarda est (Justice is to be denied to none).
As regards to the second requisite, the law requires that the employer must
furnish the worker sought to be dismissed with 2 written notices before termination
may be validly effected: first, a notice apprising the employee of the particular acts
or omission for which his dismissal is sought and, second, a subsequent notice
informing the employee of the decision to dismiss him. In accordance with this
requirement, petitioners were given the required notices, on August 2 and then on
August 23. The Court finds that petitioners were accorded due process before they
were dismissed on August 3. It is a well-established rule that the essence of due
process is simply an opportunity to be heard, or as applied to administrative
proceedings, an opportunity to explain one's side or an opportunity to seek a
reconsideration of the action or ruling complained of.
Marcopper Mining Corporation vs. NLRC
G.R. No. 103525. March 29, 1996
Facts:
A CBA was entered into between Marcopper and NA-MAWU-MIF, a labor
federation to which the Marcopper Employees Union (the exclusive bargaining agent
of all rank-and-file workers of petitioner) is affiliated, to be effective 1 May 1984
until 30 April 1987.
The CBA provides 2 wage increases. The 1st wage increase was with no
problem. Private respondent, however, assailed the manner in which the second
wage increase was effected. It argued that the COLA should first be integrated into
the basic wage before the 5% wage increase is computed. Consequently, the union
filed a complaint for underpayment of wages before the Regional Arbitration.
Sec. 1 Art. V of the CBA provides: “It is expressly understood that this
wage increase shall be exclusive of increase in the minimum wage and/or mandatory
living allowance that may be promulgated during the life of this Agreement.”
Accordingly, applying the aforequoted provision in the case at bench, petitioner
concludes that it was clearly not the intention of the parties to include the COLA in
 Magsino Labor Relations Digests, Arbues 2019
computing the CBA/MOA mandated increase since the MOA was entered into a year
before E.O. No. 178 was enacted even though their effectivity dates coincide.
Issue:
WON EO 178 should supersede the CBA.
Held:
The principle that the CBA is the law between the contracting parties stands
strong and true. However, the present controversy involves not merely an
interpretation of CBA provisions. More importantly, it requires a determination of
the effect of an executive order on the terms and the conditions of the CBA.
Petitioner’s arguments eventually lose steam in the light of the fact that
compliance with the law is mandatory and beyond contractual stipulation by and
between the parties; consequently, whether or not petitioner intended the basic wage
to include the COLA becomes immaterial. There is evidently nothing to construe and
interpret because the law is clear and unambiguous. Unfortunately for petitioner, said
law, by some uncanny coincidence, retroactively took effect on the same date the
CBA increase became effective. Therefore, there cannot be any doubt that the
computation of the CBA increase on the basis of the integrated wage does not
constitute a violation of the CBA.
While the terms and conditions of the CBA constitute the law between the
parties, it is not, however, an ordinary contract to which is applied the principles of
law governing ordinary contracts. A CBA, as a labor contract within the
contemplation of Article 1700 of the Civil Code of the Philippines which governs the
relations between labor and capital, is not merely contractual in nature but impressed
with public interest, thus, it must yield to the common good. As such, it must be
construed liberally rather than narrowly and technically, and the courts must place a
practical and realistic construction upon it, giving due consideration to the context in
which it is negotiated and purpose which it is intended to serve.
G.R. No. 111933. July 23, 1997 PLDT v NLRC
Facts:
8
Sometime in December 1987, two supervisors almost simultaneously
received two different requests for overseas calls bound for different Middle East
countries and both callers reported the same calling number (98-68-16). Investigation
shows that the subject number was temporarily disconnected on June 10, 1987, and
permanently on September 24, 1987. It also showed that 439 overseas calls were
made through the same number between May and November 1987.
Private respondent Lettie Corpuz was employed as traffic operator at the
Manila International Traffic Division (MITD) by PLDT. On July 26, 1988, Corpuz
was asked to explain her alleged infraction, that is, facilitating 34 calls using the
disconnected number. Instead of tendering the required explanation, respondent
requested a formal investigation to allow her to confront the witnesses and rebut the
proofs that may be brought against her. On grounds of serious misconduct and
breach of trust, the Legal Department recommended her dismissal. In a letter dated
June 16, 1989, respondent was terminated from employment effective the following
day.
LA ordered her reinstatement. NLRC affirmed. PetCert was filed by PLDT
to SC.
Issue:
WON there was a valid dismissal.
Held: No.
The right of an employer to freely discharge his employees is subject to
regulation by the State, basically through the exercise of its police power. This is so
because the preservation of the lives of citizens is a basic duty of the State, an
obligation more vital than the preservation of corporate profits.
Petitioner insists that respondent was guilty of defrauding them when she
serviced 56 of the 439 calls coming from telephone number 98-68-16 and received
numerous requests for overseas calls virtually from the same calling number, which
could not have been a mere coincidence but most likely was a pre-arranged
undertaking in connivance with certain subscribers. The records show, however, that
the subject phone calls were neither unusual nor coincidental as other operators
shared similar experiences.
*Substantial Evidence Rule; The Supreme Court will not sanction a dismissal
premised on mere conjectures and suspicions.· This Court will not sanction a
dismissal premised on mere conjectures and suspicions. To be a valid ground for
respondent’s dismissal, the evidence must be substantial and not arbitrary and must
 Magsino Labor Relations Digests, Arbues 2019
be founded on clearly established facts sufficient to warrant his separation from
work.
*Security of Tenure; In carrying out and interpreting the Labor Code’s provisions
and its implementing regulations, the workingman’s welfare should be the primordial
and paramount consideration; The constitutional right of workers to security of
tenure should not be denied on mere speculation of any unclear and nebulous basis.
JMM Promotion v CA G.R. No. 120095. August 5, 1996
Facts:
Due to the death of Maricris Sioson in 1991, Cory banned the deployment
of performing artists to Japan and other destinations. This was relaxed however with
the introduction of the Entertainment Industry Advisory Council which later
proposed a plan to POEA to screen and train performing artists seeking to go abroad.
In pursuant to the proposal POEA and the secretary of DOLE sought a 4 step plan to
realize the plan which included an Artist’s Record Book which a performing artist
must acquire prior to being deployed abroad. The Federation of Talent Managers of
the Philippines assailed the validity of the said regulation as it violated the right to
travel, abridge existing contracts and rights and deprives artists of their individual
rights. JMM intervened to bolster the cause of FETMOP. The lower court ruled in
favor of EIAC.
Issue:
WON the issuances were a valid exercise of police power.
Held: Yes.
The latin maxim salus populi est suprema lex embodies the character of the
entire spectrum of public laws aimed at promoting the general welfare of the people
under the State’s police power. As an inherent attribute of sovereignty which
virtually extends to all public needs, this least limitable of governmental powers
grants a wide panoply of instruments through which the state, as parens patriae gives
effect to a host of its regulatory powers. Thus, police power concerns government
enactments which precisely interfere with personal liberty or property in order to
promote the general welfare or the common good. As the assailed Department Order
enjoys a presumed validity, it follows that the burden rests upon petitioners to
demonstrate that the said order, particularly, its ARB requirement, does not enhance
the public welfare or was exercised arbitrarily or unreasonably.
9
In any event, apart from the State’s police power, the Constitution itself
mandates government to extend the fullest protection to our overseas workers. The
basic constitutional statement on labor, embodied in Section 18 of Article II of the
Constitution provides: Sec. 18. The State affirms labor as a primary social economic
force. It shall protect the rights of workers and promote their welfare. More
emphatically, the social justice provision on labor of the 1987 Constitution in its first
paragraph states: The State shall afford full protection to labor, local and overseas,
organized and unorganized and promote full employment and equality of
employment opportunities for all. Obviously, protection to labor does not indicate
promotion of employment alone. Under the welfare and social justice provisions of
the Constitution, the promotion of full employment, while desirable, cannot take a
backseat to the government’s constitutional duty to provide mechanisms for the
protection of our workforce, local or overseas.
A profession, trade or calling is a property right within the meaning of our
constitutional guarantees. One cannot be deprived of the right to work and the right
to make a living because these rights are property rights, the arbitrary and
unwarranted deprivation of which normally constitutes an actionable wrong.
Nevertheless, no right is absolute, and the proper regulation of a profession, calling,
business or trade has always been upheld as a legitimate subject of a valid exercise of
the police power by the state particularly when their conduct affects either the
execution of legitimate governmental functions, the preservation of the State, the
public health and welfare and public morals. According to the maxim, sic utere tuo
ut alienum non laedas, it must of course be within the legitimate range of legislative
action to define the mode and manner in which every one may so use his own
property so as not to pose injury to himself or others.
Locally, the Professional Regulation Commission has begun to require
previously licensed doctors and other professionals to furnish documentary proof
that they had either re-trained or had undertaken continuing education courses as a
requirement for renewal of their licenses. It is not claimed that these requirements
pose an unwarranted deprivation of a property right under the due process clause. So
long as professionals and other workers meet reasonable regulatory standards no
such deprivation exists.
The equal protection clause of the Constitution does not forbid
classification for so long as such classification is based on real and substantial
differences having a reasonable relation to the subject of the particular legislation.
the equal protection clause of the Constitution does not forbid classification for so
long as such classification is based on real and substantial differences having a
reasonable relation to the subject of the particular legislation.
 Magsino Labor Relations Digests, Arbues 2019
Philippine Association of Service Exporters, Inc. vs. Drilon
No. L-81958. June 30,1988.
Facts:
Phil association of Service Exporters, Inc., is engaged principally in the
recruitment of Filipino workers, male and female of overseas employment. It
challenges the constitutional validity of Dept. Order No. 1 (1998) of DOLE entitled
“Guidelines Governing the Temporary Suspension of Deployment of Filipino
Domestic and Household Workers.” It claims that such order is a discrimination
against males and females. The Order does not apply to all Filipino workers but only
to domestic helpers and females with similar skills, and that it is in violation of the
right to travel, it also being an invalid exercise of the lawmaking power. Further,
PASEI invokes Sec 3 of Art 13 of the Constitution, providing for worker
participation in policy and decision-making processes affecting their rights and
benefits as may be provided by law. Thereafter the Solicitor General on behalf of
DOLE submitting to the validity of the challenged guidelines involving the police
power of the State and informed the court that the respondent have lifted the
deployment ban in some states where there exists bilateral agreement with the
Philippines and existing mechanism providing for sufficient safeguards to ensure the
welfare and protection of the Filipino workers.
Issue:
WON DO 1-1998 is a valid exercise of police power.
Held: Yes.
Police power has been defined as the "state authority to enact legislation
that may interfere with personal liberty or property in order to promote the general
welfare." As defined, it consists of (1) an imposition of restraint upon liberty or
property, (2) in order to foster the common good.
The petitioner has shown no satisfactory reason why the contested
measure should be nullified. There is no question that Department Order No. 1
applies only to "female contract workers," but it does not thereby make an undue
discrimination between the sexes. It is well-settled that "equality before the law"
under the Constitution does not import a perfect identity of rights among all men and
women. It admits of classifications, provided that (1) such classiflcations rest on
substantial distinctions; (2) they are germane to the purposes of the law; (3) they are
not confined to existing conditions; and (4) they apply equally to all members of the
same class. The Court is satisfied that the classification made – the preference for
female workers - rests on substantial distinctions.
10
The same, however, cannot be said of our male workers. In the first place,
there is no evidence that, except perhaps for isolated instances, our men abroad have
been afflicted with an identical predicament. The petitioner has proffered no
argument that the Government should act similarly with respect to male workers.
The Court, of course, is not impressing some male chauvinistic notion that men are
superior to women. What the Court is saying is that it was largely a matter of
evidence (that women domestic workers are being ill-treated abroad in massive
instances) and not upon some fanciful or arbitrary yardstick that the Government
acted in this case. It is evidence capable indeed of unquestionable demonstration and
evidence this Court accepts. The Court cannot, however, say the same thing as far as
men are concerned. There is simply no evidence to justify such an inference. Suffice
it to state, then, that insofar as classification are concerned, this Court is content that
distinctions are borne by the evidence. Discrimination in this case is justified.
Protection to labor" does not signify the promotion of einployment alone.
What concerns the Constitution more paramountly is that such an employment be
above all, decent, just, and humane. It is bad enough that the country has to send its
sons and daughters to strange lands because it cannot satisfy their employment needs
at home. Under these circumstances, the Government is duty-bound to insure that
our toiling expatriates have adequate protection, personally and economically, while
away from home. In this case, the Government has evidence, an evidence the
petitioner cannot seriously dispuce, of the lack or inadequacy of auch protection, and
as part of its duty, it has precisely ordered an indefinite ban on deployment.
·The petitioner's reliance on the Constitutional guaranty of worker
participation "in policy and decisionmaking processes affecting their rights and
benefits" is not well taken. The right granted by this provision, again, must submit to
the demands and necessities of the State's power of regulation. The nonimpairment
clause of the Constitution, invoked by the
petitioner, must yield to the loftier purposes targetted by the Government. Freedom
of contract and enterprise, like all other freedoms, is not free from restrictions, more
so in this jurisdiction, where laissez faire has never been fully accepted as a
controlling economic-way of life.
G.R. No. 95449. August 18, 1997 PHILIPPINE-SINGAPORE
TRANSPORT SERVICES (PSTS) v NLRC
Facts:
 Magsino Labor Relations Digests, Arbues 2019
Petitioner PSTS, a manning agency, hired private respondent Estrada as
master of the vessel Sea Carrier I for its foreign principal, Intra-Oil in the high seas
of Bombay, India. On January 21, 1988 or barely two months following his
employment, Estrada was that he would be relieved from his employment and be
repatriated. Upon his arrival, he went to PSTS to ask about his dismissal from
employment and to claim for his unpaid salary and the sum corresponding to his
plane fare which was deducted from his salary. Petitioner PSTS informed him that
his service was terminated due to his incompetence. It also denied his claim for the
sum of money.
Estrada filed in POEA Adjudication Department a complaint against PSTS
and Intra-Oil for illegal dismissal. POEA granted the petition. NLRC affirmed
holding that respondent’s repatriation was not due to his incompetence but due to his
refusal to tow another barge belonging to the charterer and which refusal had been
shown to be justified by the private respondent.
Issue: WON the management exercised its prerogative properly.
Held:No.
The power to dismiss an employee is a recognized prerogative that is
inherent in the employer’s right to freely manage and regulate his business. An
employer cannot rationally be expected to retain the employment of a person whose
lack respect to his employer. The right of the company to dismiss an employee is a
measure of self-protection. Such right, however, is subject to regulation by the State,
basically in the exercise of its paramount police power. Thus, the dismissal of
employees must be made within the parameters of the law and pursuant to the basic
tenets of equity, justice and fairplay. It must not be done arbitrarily and without just
cause.
Article 279 of the Labor Code provides that the security of tenure has been
construed to mean as that the employer shall not terminate the services of an
employee except for a just cause or when authorized by the Code. The two facets of
this legal provision are: (a) the legality of the act of dismissal; and (b) the legality in
the manner of dismissal. The illegality of the act of dismissal constitutes discharge
without just cause, while illegality in the manner of dismissal is dismissal without
due process. If an employee is dismissed without just cause, he is entitled to
reinstatement with backwages up to the time of his actual reinstatement, if the
contract of employment is not for a definite period; or to the payment of his salaries
corresponding to the unexpired portion of the employment contract, if the contract is
for the definite period. If the dismissal is for a just cause but it was made without due
process, the employee is entitled to the payment of an indemnity.
11
Estrada was dismissed without just cause. Bale, inutusan kasi siya na
maghila ng barko pero ayaw niya kasi luma na yung lubid na panghila. Nireport niya
na luma na yung lubid pero walang dumating na bago.
Before an employee can be dismissed, the Labor Code requires the
employer to furnish the employee a written notice containing a statement of the
causes for termination and to afford said employee ample opportunity to be heard. If
the employer decides to terminate the services of the employee, the employer must
notify the worker in writing of the decision to dismiss him, stating clearly the reasons
therefor. Petitioner seeks to justify the absence of the said notice and hearing by
invoking a provision in the contract of employment which authorizes the company to
terminate employment without notice. Such contractual provision is inapplicable
here. The said provision applies only when the employee is liable for serious
misconduct, neglect of duty or violation of company rules and regulations.
Apparently, private respondent Estrada was not found guilty of any of these offenses.
Chu v NLRC and VICTORIAS MILLING G.R. No. 106107. June 2, 1994
Facts:
Petitioner retired from service but under a Special Contract of Employment,
petitioner was employed as Head of the Warehousing Department. Private
respondent issued 2 Memos both providing for a rotation of the personnel and other
organizational changes. Pursuant to the memos, petitioner was transferred to the
Sugar Sales Department. Petitioner protested his transfer and requested a
reconsideration thereof, which was denied.
Petitioner filed a complaint for illegal dismissal, contending that he was
constructively dismissed from his employment. LA dismissed the complaint holding
that petitioner’s transfer was without change in rank or salary; (3) petitioner’s
designation in either department was the same; (4) the personnel rotation was
pursuant to organizational changes done in the valid exercise of management
prerogatives; (5) there was no bad faith in the transfer and (6) petitioner failed to
 Magsino Labor Relations Digests, Arbues 2019
show that he was prejudiced by the changes or transferred to a demeaning or
humiliating position. NLRC affirmed.
Issue: WON there was a valid exercise of management prerogative.
Held: Yes.
·An owner of a business enterprise is given considerable leeway in
managing his business because it is deemed important to society as a whole that he
should succeed. Our law, therefore, recognizes certain rights as inherent in the
management of business enterprises. These rights are collectively called
management prerogatives or acts by which one directing a business is able to control
the variables thereof so as to enhance the chances of making a profit. Together, they
may be taken as the freedom to administer the affairs of a business enterprise such
that the costs of running it would be below the expected earnings or receipts. In
short, the elbow room in the quest for profits.
It is the employer’s prerogative, based on its assessment and perception of
its employees’ qualifications to move them around in the various areas of its
business operations in order to ascertain where they will function with maximum
benefit to the company. An employee’s right to security of tenure does not give him
such a vested right in his position as would deprive the company of its prerogative to
change his assignment or transfer him where he will be most useful. When his
transfer is not unreasonable, nor inconvenient, nor prejudicial to him, and it does not
involve a demotion in rank or a diminution of his salaries, benefits, and other
privileges, the employee may not complain that it amounts to a constructive
dismissal.
Nothing in the Special Contract of Employment invoked by petitioner
wherein private respondent had waived its right to transfer or re-assign petitioner to
any other position in the company. Before such right can be deemed to have been
waived or contracted away, the stipulation to that effect must be clearly stated so as
to leave no room to doubt the intentions of the parties. The mere specification in the
employment contract of the position to be held by the employee is not such
stipulation.
Union Carbide Labor Union vs. Union Carbide Phils.
G.R. No. 41314 November 13, 1992
Facts:
The Company used to operate morning, afternoon, and night shifts.
Pursuant to the CBA, a new work schedule was implemented where the morning and
12
afternoon workers shall report from Sunday to Thursday and the night shift workers
shall work from Thursday to Sunday. On November 6, 1972, the night shift
employees filed a demand to maintain the old working schedule from Monday thru
Friday. In manifestation of their dissention to the new work schedule, the 3
respondents Duro, Torio, and Javillonar did not report for work. Their absence
caused their suspension for 14 days. LA ordered their reinstatement but secretary of
labor reversed.
Issue: WON there was valid dismissal due to insubordination.
Held: Yes.
Management retained the prerogative, whenever exigencies of the service so
require, to change the working hours of its employees. And as long such prerogative
is exercised in good faith for the advancement of the employerÊs interest and not for
the purpose of defeating or circumventing the rights of the employees under special
laws or under valid agreements, this Court will uphold such exercise. Even as the
law is solicitous of the welfare of employees, it must also protect the right of an
employer to exercise what are clearly management prerogatives. The free will of
management to conduct its own business affairs to achieve its purpose cannot be
denied.
Further, the incident complained of took place sometime in 1972, so there is
no violation of the 1973 Constitution to speak of because the guarantee of security of
tenure embodied under Section 9, Article II may not be given a retroactive effect. It
is the basic norm that provisions of the fundamental law should be given prospective
application only, unless legislative intent for its retroactive application is so
provided.
San Miguel Brewery Sales Force Union (PTGWO) vs. Ople
G.R. No. 53515. February 8, 1989
Facts:
For 3 years, a collective bargaining agreement was being implemented by
San Miguel Corporation Sales Force Union (PTGWO), and San Miguel Corporation.
 Magsino Labor Relations Digests, Arbues 2019
Section 1, of Article IV of which provided “Employees within the appropriate
bargaining unit shall be entitled to a basic monthly compensation plus commission
based on their respective sales.” Then, the company introduced a marketing scheme
known as “Complementary Distribution System”(CDS) whereby its beer products
were offered for sale directly to wholesalers through San Miguel’s Sales Offices. The
union alleged that the new marketing scheme violates Sec 1, Art IV of the CBA
because the introduction of the CDS would reduce the take home pay of the
salesmen.
Issue: WON the CDS was a valid exercise of management prerogative.
Held: Yes.
Public respondent was correct in holding that the CDS is a valid exercise of
management prerogatives. Except as limited by special laws, an employer is free to
regulate, according to his own discretion and judgment, all aspects of employment,
including hiring, work assignments, working methods, time, place and manner of
work, tools to be used, processes to be followed, supervision of workers, working
regulations, transfer of employees, work supervision, lay-off of workers and the
discipline, dismissal and recall of work.
So long as a company’s management prerogatives are exercised in good
faith for the advancement of the employer’s interest and not for the purpose of
defeating or circumventing the rights of the employees under special
laws or under valid agreements, this Court will uphold them. San Miguel
Corporation’s offer to compensate the members of its sales force who will be
adversely affected by the implementation of the CDS, by paying them a so-called
back adjustment commission to make up for the commissions they might lose as a
result of the CDS, proves the company’s good faith and lack of intention to bust their
union.
GSIS vs. GSIS Supervisors’ Union No. L-39575. August 31, 1978
Facts:
A strike was called and staged by respondent in protest against the
discriminatory acts constituting unfair labor practices in matters of promotion,
among others, committed by the management of the petitioner against the
13
respondent. By the order of the CIR, and amicable settlement was reached. The
General Manager thereafter met and rectified many of the demands of the Union but
the dispute continued. Respondent filed a petition with the CIR. It alleged that
promotions are based on union affiliation and that to further discourage membership
in the GSISSU, the GSIS bargained with a rank and file union in the GSIS on the
terms and conditions of employment of employees who pertain to the certified
supervisory bargaining unit. CIR ordered the GSIS to appoint Dr. Andrea Moral as
Acting Assistant Medical Director, replacing the present incumbent, Dr. Orlando
Misa.
Issue: WON the CIR’s order violated the management prerogative.
Held: Yes.
The right to select and appoint employees is the prerogative of the
employer, the privilege of management because such right inheres in the conduct and
operation of the business by the employer. Labor may not impose nor demand who is
to be appointed or designated by management. This discretion or judgment lodged in
management may not, therefore, be controlled, interfered with or substituted by the
CIR upon petition or representation of the
striking labor union.
The promotion of Misa was fair and made in good faith. It has not been
shown by any credible proof submitted to the Hearing Officer or to the CIR that such
selection was arbitrary. The claim of the respondent Union that the designation of
Dr. Misa and not Dr. Moral is discriminatory on account of the latter’s being a
member of the Union has not been sufficiently proved for there is nothing in the
Report submitted by the Hearing Officer clearly indicating that the GSIS preferred
Dr. Misa instead of Dr. Moral in order to bust the GSISSU or to discourage
membership in said union. The Report made no finding if the protagonists belong to
different camps or even slightly that for union considerations, the GSIS favored one
or the other.
In the promotion; of personnel the basic consideration is efficiency in public
service, even to the disappointment of aspirants longer in the service.
PT&T vs CA G.R. No. 152057. September 29, 2003
Facts:
Petitioner, after conducting a series of studies regarding the profitability of
its retail operations, its existing branches and the number of employees, the
petitioner came up with a Relocation and Restructuring Program Private respondents
 Magsino Labor Relations Digests, Arbues 2019
received separate letters from the petitioner, giving them the option to choose the
branch to which they could be transferred. Thereafter, through HRAG Bulletin No.
97-06-16, the private respondents and other petitioner's employees were directed to
"relocate" to their new PT&T Branches. The affected employees were directed to
report to their respective relocation assignments. Moreover, the employees who
would agree to the transfers would be considered promoted.
The private respondents rejected the petitioner's offer. Petitioner, then, sent
letters to the private respondents requiring them to explain in writing why no
disciplinary action should be taken against them for their refusal to be
transferred/relocated. In their respective replies to the petitioner's letters, the private
respondents explained that: The transfers imposed by the management would cause
enormous difficulties on the individual complainants. For one, their new assignment
involves distant places which would require their separation from their respective
families. Dissatisfied with this explanation, the petitioner considered the private
respondents' refusal as insubordination and willful disobedience to a lawful order;
hence, the private respondents were dismissed from work. They forthwith filed their
respective complaints against the petitioner before the appropriate sub-regional
branches of the NLRC.
In their position paper, private respondents declared that their refusal to
transfer could not possibly give rise to a valid dismissal on the ground of willful
disobedience, as their transfer was prejudicial and inconvenient; thus unreasonable.
The private respondents further opined that since their respective transfers resulted in
their promotion, they had the right to refuse or decline the positions being offered to
them. Resultantly, the refusal to accept the transfers could not have amounted to
insubordination or willful disobedience to the "lawful orders of the employer."
For its part, the company alleged that the private respondents' transfers were
made in the lawful exercise of its management prerogative and were done in good
faith. The transfers were aimed at decongesting surplus employees and detailing
them to a more demanding branch.
Issue: WON the management prerogative was valid.
Held: No.
An employee cannot be promoted, even if merely as a result of a transfer,
without his consent. A transfer that results in promotion or demotion, advancement
or reduction or a transfer that aims to lure the employee away from his permanent
position cannot be done without the employees’ consent. There is no law that
compels an employee to accept a promotion for the reason that a promotion is in the
14
nature of a gift or reward, which a person has a right to refuse. Hence, the exercise
by the private respondents of their right cannot be considered in law as
insubordination, or willful disobedience of a lawful order of the employer. As such,
there was no valid cause for the respondent’s dismissal.
*Promotion
Promotion is the advancement from one position to another with an increase
in duties and responsibilities as authorized by law, and usually accompanied by an
increase in salary. The indispensable element for there to be a promotion is that there
must be an advancement from one position to another or an upward vertical
movement of the employee’s rank or position. Any increase in salary should only be
considered incidental but never determinative of whether or not a promotion is
bestowed upon an employee. This can be likened to the upgrading of salaries of
government employees without necessarily conferring upon them the concomitant
elevation to higher positions.
ELMER M. MENDOZA v RURAL BANK OF LUCBAN
G.R. No. 155421 July 7, 2004
Facts:
On April 25, 1999, the Board of Directors of the Rural Bank of Lucban,
Inc., issued Board Resolution Nos. 99-52 and 99-53, “that in line with the policy of
the bank to familiarize bank employees with the various phases of bank operations
and further strengthen the existing internal control system, all officers and employees
are subject to reshuffle of assignments. Moreover, this resolution does not preclude
the transfer of assignment of bank officers and employees from the branch office to
the head office and vice-versa."
Petitioner filed a Complaint before NLRC. Petitioner argued that he had
been demoted from appraiser to clerk and not given any work to do, while his table
had been placed near the toilet and eventually removed. He adds that the reshuffling
 Magsino Labor Relations Digests, Arbues 2019
of employees was done in bad faith, because it was designed primarily to force him
to resign.
Issue: WON the reshuffling was valid.
Held: Yes.
In the pursuit of its legitimate business interest, management has the
prerogative to transfer or assign employees from one office or area of operation to
another provided there is no demotion in rank or diminution of salary, benefits, and
other privileges; and the action is not motivated by discrimination, made in bad faith,
or effected as a form of punishment or demotion without sufficient cause. This
privilege is inherent in the right of employers to control and manage their enterprise
effectively. The right of employees to security of tenure does not give them vested
rights to their positions to the extent of depriving management of its prerogative to
change their assignments or to transfer them. Managerial prerogatives, however, are
subject to limitations provided by law, CBAs, and general principles of fair play and
justice.
The managerial prerogative to transfer personnel must be exercised without
grave abuse of discretion, bearing in mind the basic elements of justice and fair play.
Having the right should not be confused with the manner in which that right is
exercised. Thus, it cannot be used as a subterfuge by the employer to rid himself of
an undesirable worker. In particular, the employer must be able to show that the
transfer is not unreasonable, inconvenient or prejudicial to the employee; nor does it
involve a demotion in rank or a diminution of his salaries, privileges and other
benefits. Should the employer fail to overcome this burden of proof, the employee’s
transfer shall be tantamount to constructive dismissal, which has been defined as a
quitting because continued employment is rendered impossible, unreasonable or
unlikely; as an offer involving a demotion in rank and diminution in pay. Likewise,
constructive dismissal exists when an act of clear discrimination, insensibility or
disdain by an employer has become so unbearable to
the employee leaving him with no option but to forego with his continued
employment.
Petitioner’s transfer was made in pursuit of respondent’s policy to
familiarize bank employees with the various phases of bank operations and further
strengthen the existing internal control system of all officers and employees.
Employees may be transferred based on their qualifications, aptitudes and
competencies to positions in which they can function with maximum benefit to the
company. There appears no justification for denying an employer the right to transfer
employees to expand their competence and maximize their full potential for the
15
advancement of the establishment. Petitioner was not singled out; other employees
were also reassigned without their express consent.
Yuco Chemical Industries, Inc. vs. Ministry of Labor and
Employment G.R. No. 75656 May 28, 1990
Facts:
Private respondents George Halili and Amado Magno were employed by
petitionercompany which is engaged in the manufacture/assembly of ice boxes. They
were assigned to make aluminum handles for the ice boxes. On August 12,1981,
after obtaining a favorable legal opinion from the Tarlac provincial office of MOLE
concerning the legality of moving the production of aluminum handles from Tarlac
to Manila, petitioner addressed a memorandum to private respondents directing them
to report for work within one week from
notice at their new place of work at Sta. Cruz, Manila. The memorandum further
stated that private respondents would be paid with a salary of P27.00 and an
additional allowance of P2.00 "to meet the higher cost of living in Manila. A day
after or on August 13, 1981, instead of complying with the memorandum, private
respondents filed a complaint with the provincial labor office for illegal dismissal.
Issue: WON the transfer was valid.
Held: The managerial prerogative to transfer personnel must be exercised without
grave abuse of discretion and putting to mind the basic elements of justice and fair
play. Having the right should not be confused with the manner in which that right
must be exercised. Thus it cannot be used as a subterfuge by the employer to rid
himself of an undesirable worker. Nor when the real reason is to penalize an
employee for his union activities and thereby defeat his right to self-organization.
But the transfer can be upheld when there is no showing that it is unnecessary,
inconvenient and prejudicial to the displaced
The reassignment of Halili and Magno to Manila is legally indefensible on
several grounds. Firstly, it was grossly inconvenient to private respondents. They are
working students. When they received the transfer memorandum directing their
 Magsino Labor Relations Digests, Arbues 2019
relocation to Manila within seven days from notice, classes had already started. The
move from Tarlac to Manila at such time would mean a disruption of their studies.
Secondly, there appears to be no genuine business urgency that necessitated their
transfer. As well pointed out by private respondents’ counsel, the fabrication of
aluminum handles for ice boxes does not require special dexterity. Many workers
could be contracted right in Manila to perform that particular line of work.
Altogether, there is a strong basis for public respondentÊs conclusion that the
controversial transfer was not prompted by legitimate reasons. Petitioner company
had indeed discriminated against Magno and Halili when the duo was selected for
reassignment to Manila. The transfer was timed at the height of union concerted
activities in the firm, deliberately calculated to demoralize the other union members.
Under such questionable circumstances, private respondents had a valid reason to
refuse the Manila reassignment. Public respondent did not err or abuse his discretion
in upholding the employees’ cause.
Caltex Refinery Employees Association (CREA) v NLRC
G.R. No. 102993. July 14, 1995
Facts:
Petitioner Arnelio Clarete and Caltex gave facts. Clarete argued that he
found a bottle of lighter fluid in the rubbish pile. He asked the security guard de Villa
posted at the gate to allow him to bring the bottle home. De Villa referred Clarete to
Castillo, the security supervisor. Castillo instructed Clarete to leave the bottle in his
office. Clarete went home without the bottle. Caltex on the other hand, argued that
Clarete refused to allow de Villa to inspect hi bag as it was just filled with work
clothes. De Villa opened the bag and found the lighter fluid hidden in the sleeves of
his Clarete’s clothes. When asked about the gate pass for the fluid, Clarete said he
did not need one as it was for his personal use.
In a letter, Caltex asked Clarete why he should not be disciplined. Clarete
replied that he had no intention to bring the bottle home without permission.
However, he was thereafter charged with theft. Clarete was acquitted. His services
were terminated for serious misconduct and loss of trust and confidence resulting
from having violated a lawful order of the Company.
16
Issue: WON there was valid dismissal.
Held: No.
There are restrictions to guide the employers in the exercise of management
prerogatives, particularly the right to discipline or dismiss employees, for both the
Constitution and the law guarantee employees’ security of tenure. Thus, employees
may be dismissed only in the manner provided by law. The right of the employer
must not be exercised arbitrarily and without just cause. Otherwise, the constitutional
mandate of security of tenure of the workers would be rendered nugatory.
But while Clarete may be guilty of violation of company rules, we find the
penalty of dismissal imposed upon him by respondent Caltex too harsh and
unreasonable. Penalty of dismissal must be commensurate with the act, conduct or
omission imputed to the employee and imposed in connection with the employer’s
disciplinary authority. Even when there exist some rules agreed upon between the
employer and employee on the subject of dismissal the same cannot preclude the
State from inquiring on whether its rigid application would work too harshly on the
employee.
The penalty of dismissal imposed on Clarete is unduly harsh and grossly
disproportionate to the reason for terminating his employment. Clarete has no
previous record in his eight years of service; that respondent Caltex did not lose
anything as the bottle of lighter fluid was retrieved on time; and that there was no
showing that Clarete’s retention in the service would work undue prejudice to the
viability of employer’s operations .
G.R. No. 70479 February 27, 1987
FIRESTONE TIRE AND RUBBER v CARLOS LARIOSA
Facts:
When Lariosa submitted himself for routine check before going out of the
factory, the security guards found 16 wool flannel swabs all belonging to the
company. Why he placed the swabs in his personal bag, which is not the usual
receptacle for company property, has not been satisfactorily explained. Lariosa was
terminated for stealing company property and loss of trust. A criminal complaint for
theft was filed against Lariosa. Lariosa filed a complaint for illegal dismissal. LA
found the dismissal justified. NLRC reversed.
Issue: WON the termination was too severe.
Held: No.
 Magsino Labor Relations Digests, Arbues 2019
A review of the record shows that Lariosa was indubitably involved in the
attempted theft of the flannel swabs. There is no gainsaying that theft committed by
an employee constitutes a valid reason for his dismissal by the employer. Although
as a rule this Court leans over backwards to help workers and employees continue
with their employment or to mitigate the penalties imposed on them, acts of
dishonesty in the handling of company property are a different matter.
Thus, under Article 283 of the Labor Code, an employer may terminate an
employment for "serious misconduct" or for "fraud or willful breach by the
employee of the trust reposed in him by his employer or representative."
If there is sufficient evidence that an employee has been guilty of a breach
of trust or that his employer has ample reasons to distrust him, the labor tribunal
cannot justly deny to the employer the authority to dismiss such an employee.
If Lariosa, by his own wrong-doing, could no longer be trusted, it would be
an act of oppression to compel the company to retain him, fully aware that such an
employee could, in the long run, endanger its very viability.
The employer's obligation to give his workers just compensation and
treatment carries with it the corollary right to expect from the workers adequate
work, diligence and good conduct.
DUNCAN ASSOCIATION v GLAXO WELLCOME
G.R. No. 162994 September 17, 2004
Facts:
Pedro A. Tecson was hired by respondent Glaxo Wellcome Philippines, Inc.
as medical representative. As stipulated in the contract signed and agreed by Tecson,
The Glaxo provides that an employee is expected to inform management of any
existing or future relationship by consanguinity or affinity with co-employees or
employees of competing drug companies. If management perceives a conflict of
interest or a potential conflict between such relationship and the employee’s
employment with the company, the management and the employee will explore the
possibility of a “transfer to another department or preparation for employment
outside the company after six months.
Subsequently, Tecson entered into a romantic relationship with Bettsy, an
employee of Astra Pharmaceuticals, a competitor of Glaxo. In 1998,Tecson married
Bettsy, whilst constantly reminded by the District Manager regarding the conflict of
interest which his relationship with Bettsy might engender. When Tecson failed to
17
resolve the conflicting issue, Glaxo offered Tecson a separation pay or to be
transferred from Camarines to Butuan-Surigao-Agusan sales area to which the
former refused to abide. Aggrieved, Tecson filed a petition to the National
Conciliation and Mediation Board (NCMB) which affirmed Glaxo’s policy as valid.
CA affirmed NCMB’s decision, hence, this petition.
Issue: May an employer prohibit an employee to marry.
Held: It depends.
If the prohibition or restriction pertains to the choice of spouse, rather than
the choice to marry at all, there should be an examination of the rationale behind the
constraint. If the restrictions or conditions bear no relevance to any interests that the
employer should be concerned with, then they should not be upheld. Restrictions that
are nothing more than the enforcement of personal biases, such as prohibitions on
marrying members of a particular race or ethnic group, may be struck down.
If the rationale in question relates to a consideration so vital to the interests
of the employer as to warrant legal protection, it should then be determined whether
the means employed by the employer are reasonable enough as to allow a measure of
balance between these key interests of the employer and the fundamental right of the
employee to marry.
Glaxo belongs to the highly competitive pharmaceutical industry. Glaxo is
entitled to guard its trade secrets, manufacturing formulas, marketing strategies and
other confidential programs and information from competitors, concomitant to its
right to protect its own economic interests. It is but reasonable for Glaxo to be
cautious about the social interaction of its employees with those of companies which
it directly competes with. If the employee goes as far as sharing hearth and home
with the employee of the rival company, there is greater cause of concern on the part
of Glaxo. The fear may not so much arise from the possibility of willful betrayal by
its employees of trade secrets, but from the myriad opportunities in the course of
shared lives that one may inadvertently divulge to the spouse confidential
information that the rival drug company may benefit from. After all, the employer
has no control over pillow talk. Neither could it be expected that the employee
maintain a higher fidelity to the employer than to the spouse.
Still, these concerns aside, the steps that Glaxo may employ to avoid the
undue divulgence of its trade secrets should be within reason. If termination is to be
considered as an option, it should be only as a final resort. In this case, Glaxo's
assailed policy does not call for automatic termination, providing as it does a process
 Magsino Labor Relations Digests, Arbues 2019
that allows for all the opportunities for a mutually agreeable solution. Per the
Employee Handbook, "every effort shall be made, together by management and the
employee, to arrive at a solution within 6 months, either by transfer to another
department in a non-counter checking position, or by career preparation toward
outside employment after Glaxo Wellcome. Employees must be prepared for
possible resignation within 6 months, if no other solution is feasible." This procedure
is extremely reasonable under the circumstances, and we have no problems in
upholding its validity.
Glaxo must retain the said policy, and should another employee trek the
same trail as Tecson did, it cannot be foreordained that the Court would similarly
rule for Glaxo and against the said employee. As repeatedly emphasized, it all
depends on the particular circumstances of each case. And ultimately, if dismissal,
constructive or otherwise, is resorted to, the standards for termination set by the
Labor Code must still be complied with.
G.R. No. 148303. October 17, 2002 UNION OF NESTLE WORKERS
CAGAYAN DE ORO FACTORY (UNWCF) vs. NESTLE PHILPPINES
Facts:
Nestle adopted Policy No. HRM 1.8, otherwise known as the Drug Abuse
Policy. Pursuant to this policy, the management shall conduct simultaneous drug
tests on all employees from different factories and plants. There was resistance to the
policy in the Cagayan de Oro factory. Out of 496 employees, only 141 submitted
themselves to drug testing. On August 20, 1999, the Union of Nestle Workers
Cagayan de Oro Factory wrote Nestle challenging the implementation of the policy
and branding it as a mere subterfuge to defeat the employees’ constitutional rights.
Nestle claimed that the policy is in keeping with the governments thrust to eradicate
the proliferation of drug abuse, explaining that the company has the right: (a) to
ensure that its employees are of sound physical and mental health and (b) to
terminate the services of an employee who refuses to undergo the drug test.
Petitioner filed a complaint for injuction. Respondent filed a MoDi alleging
that RTC has no jurisdiction since it is a labor dispute. RTC dismissed the complaint.
Issue: WON the complaint was a labor dispute.
Held: Yes.
18
Respondent Nestle’s Drug Abuse Policy states that illegal drugs and use of
regulated drugs beyond the medically prescribed limits are prohibited in the
workplace. Illegal drug use puts at risk the integrity of Nestle operations and the
safety of our products. It is detrimental to the health, safety and work-performance of
employees and is harmful to the welfare of families and the surrounding community.
Company personnel policies are guiding principles stated in broad, long-
range terms that express the philosophy or beliefs of an organizations top authority
regarding personnel matters. They deal with matter affecting efficiency and well-
being of employees and include, among others, the procedure in the administration
of wages, benefits, promotions, transfer and other personnel movements which are
usually not spelled out in the collective agreement. Considering that the Drug Abuse
Policy is a company personnel policy, it is the Voluntary Arbitrators or Panel of
Voluntary Arbitrators, not the RTC, which exercises jurisdiction over this case.
G.R. No. 127598.January 28, 2002 MERALCO vs Secretary of Labor
Facts:
On March 15, 1999, Atty. Tomacruz and FLAMES entered into a "Contract
for Professional Service," under which FLAMES undertook to pay Atty. Tomacruz
for his legal services.
FLAMES had already delivered to Atty. Tomacruz the P50k as acceptance
fee and another P50k representing his contingent fee under their contract. FLAMES
explained to Atty. Tomacruz that pending efforts to collect from its members, it
could only effect partial payment of his fee due to financial constraints. After the
lapse of more than a year with no payments being made, Atty. Tomacruz wrote
FLAMES demanding the balance of his stipulated fee under the contract of service,
computed at 15% of the amount which each FLAMES member received from
MERALCO or P25,000.00 per member. Atty. Tomacruz received a letter from
FLAMES, expressing its refusal to make further payments. FLAMES stated that the
15% contingent fee had no actual basis "since no benefit was in fact obtained by the
members of FLAMES consequent to the filing of the Motion for intervention."
FLAMES added that the amounts already received by Atty. Tomacruz was
reasonable compensation for his services and was commensurate to what was
actually worked out by him.
Issue: WON the employment contract was valid.
Held: No.
 Magsino Labor Relations Digests, Arbues 2019
Generally speaking, where the employment of an attorney is under an
express valid contract fixing the compensation for the attorney, such contract is
conclusive as to the amount of compensation.[8]cralaw A stipulation on a lawyer's
compensation in a written contract for professional services ordinarily controls the
amount of fees that the contracting lawyer may be allowed, unless the court finds
such stipulated amount unreasonable or unconscionable. The degree of
unconscionability or unreasonableness of a stipulated amount in a contingent fee
contract, will not however, preclude recovery. It merely justifies the court's fixing a
reasonable amount for the lawyer's services
The contingent fee of P11M is clearly disproportionate to the extent of the
services rendered by Atty. Tomacruz, even if we were to take into account the
character of his intervention and the quality of his work. Thus, it is incumbent upon
us to fix a more reasonable sum which, in relation to the prevailing circumstances,
could be deemed as appropriate. In other words, we find here reason to apply the
principle of quantum meruit.
"Quantum meruit," meaning "as much as he deserves," is used as a basis for
determining the lawyer's professional fees in the absence of a contract, but
recoverable by him from his client. Recovery of attorney's fees on the basis of
quantum meruit is authorized when (1) although there is a contract, the fees
stipulated are found unconscionable or unreasonable by the court; (2) the contract for
attorney's fees is void due to purely formal defects of execution; (3) counsel, for
justifiable cause, was not able to finish the case to its conclusion; and (4) the lawyer
and client disregard the contract for attorney's fees.
In fixing a reasonable compensation for services rendered by a lawyer on
the basis of quantum meruit, the following factors are considered: (1) the time spent
and extent of services rendered; (2) the novelty and difficulty of the questions
involved; (3) the importance of the subject matter; (4) the skill demanded; (5) the
probability of losing other employment as a result of the acceptance of the proffered
case; (6) the amount involved in the controversy and the benefits resulting to the
client; (7) the certainty of compensation; (8) the character of employment; and (9)
the professional standing of the lawyer.
19
G.R. No. 76219 May 27, 1991 GTE DIRECTORIES
CORPORATION v HON. AUGUSTO S. SANCHEZ
Facts:
GTE prints directories. Increments were given by the so-called "Grid
System," grids within each territory usually numbering five. Each grid was assigned
a fixed closing dated. At such closing date, a salesperson should have achieved a
certain amount of the revenue target designated for his grid; otherwise, he loses the
forthcoming grid or forfeits the remaining grids not yet received. The new Sales
Evaluation and Production Policy was implemented which was more aggressive than
the Grid System.
GTE sent memorandum to its sales representatives, requiring submission of
"individual reports reflecting target revenues as of grid deadlines. No compliance
was made. GTE thereupon suspended its sales representatives. Finally, GTE gave its
sales representatives an ultimatum. By memorandum individually addressed to its
sales representatives, GTE required them, for the last time, to submit the required
reports GTE terminated the employment of the recalcitrant sales representatives.
Issue: WON the termination was valid.
Held: Yes.
GTE had cause to dismiss the premise sales representatives who had
repeatedly and deliberately refused to comply with its directive for submission of
individual reports on specified matters. The record shows that GTE addressed 6
written official communications to said premise sales representatives embodying this
requirement.
The Labor Minister found nothing to suggest that the employer's unilateral
action of inaugurating a new sales scheme "was designed to discourage union
organization or diminish its influence;" that on the contrary, it was "part of its overall
plan to improve efficiency and economy and at the same time gain profit to the
highest. Except as limited by special laws, an employer is free to regulate, according
to his own discretion and judgment, all aspects of employment, including hiring,
work assignments, working methods, time, place and manner of work, tools to be
used, processes to be followed, supervision of workers, working regulations, transfer
of employees, work supervision, lay-off of workers and the discipline, dismissal and
recall of work.
 Magsino Labor Relations Digests, Arbues 2019
Every business enterprise endeavors to increase its profits. In the process, it
may adopt or devise means designed towards that goal. So long as a company's
management prerogatives are exercised in good faith for the advancement of the
employer's interest and not for the purpose of defeating or circumventing the rights
of the employees under special laws or under valid agreements, this Court will
uphold them.
To sanction disregard or disobedience by employees of a rule or order laid
down by management, on the pleaded theory that the rule or order is unreasonable,
illegal, or otherwise irregular for one reason or another, would be disastrous to the
discipline and order that it is in the interest of both the employer and his employees.
G.R. No. 106246 September 1, 1994 CENTRAL NEGROS
ELECTRIC COOPERATIVE (CENECO) v NLRC
Facts:
Private respondents are employees of petitioner, an electric cooperative
company. They have been in service varying from 10 months to 4.5 years. They were
extended permanent appointments only on July 13, 1988, retroactive to June 16,
1988. Petitioner has a CBA with its employees' union for a duration of 3 years from
April 1, 1987 up to March 31, 1990. The CBA provides for a wage increase for all
permanent. Though they were made permanent in 1988, private respondents
demanded payment of the wage increase for the year 1987 as provided by the above
collective bargaining agreement. Petitioner denied their demand.
Issue: WON the employees were regular employees even prior to 1988.
Held: Yes.
It cannot be denied that private respondents attained the status of regular
employees even before 1988. Firstly, they perform activities which are necessary or
desirable in the usual business of the petitioner as an electric cooperative. Indeed,
their appointments would not have been regularized if their jobs were not
indispensable in the daily operation of the petitioner's business. Secondly, they had
worked for petitioner for more than 6 months before they were given regular
appointments. They had been hired on various dates starting from 1984.
Articles 280 and 281 of our Labor Code, put an end to the practice of
making permanent casuals of our lowly employees by the simple expedient of
extending to them probationary appointments, ad infinitum. Thus, Article 281,
placed a ceiling on probationary employment, i.e., not to exceed 6 months from the
20
date the employee started working. On the other hand, Article 280, defined when an
employment shall be regular notwithstanding any written agreement to the contrary.
In other words, the graduation of an employee from casual or probationary to regular
does not depend on the arbitrary will of his employer. If there is any group of
employees that needs robust protection from the exploitation of employers, it is the
casuals and probationaries.
G.R. No. 70705 August 21, 1989 MOISES DE LEON v NLRC
Facts:
Petitioner was employed by respondent company La Tondeña as
maintenance man whose work consisted mainly of painting company building and
equipment, and other odd jobs relating to maintenance. After having worked for
respondent for more than a year, petitioner requested that he be included in the
payroll of regular employees, to which the former responded by dismissing petitioner
from his employment. Petitioner having been refused reinstatement filed a complaint
before the Labor Arbiter. Petitioner asserts that he is a regular employee performing
similar functions as of a regular maintenance and was rehired by respondent
company’s labor agency to perform the same tasks. Respondent company meanwhile
claims petitioner was a casual worker hired only to paint a certain building in the
premises and that his work as painter terminated upon completion of the job. The LA
ruled in favor of petitioner but was reversed on appeal by the NLRC tribunal.
Issue: WON De Leon was a regular employee.
Held: Yes.
Contrary agreements notwithstanding, an employment is deemed regular
when the activities performed by the employee are usually necessary or desirable in
the usual business or trade of the employer. Not considered regular are the so-called
"project employment" the completion or termination of which is more or less
determinable at the time of employment, such as those employed in connection with
a particular construction project and seasonal employment which by its nature is only
desirable for a limited period of time. However, any employee who has rendered at
least one year of service, whether continuous or intermittent, is deemed regular with
respect to the activity he performed and while such activity actually exists.
 Magsino Labor Relations Digests, Arbues 2019
The primary standard of determining a regular employment is the
reasonable connection between the particular activity performed by the employee in
relation to the usual business or trade of the employer. The connection can be
determined by considering the nature of the work performed and its relation to the
scheme of the particular business or trade in its entirety. Also, if the employee has
been performing the job for at least one year, even if the performance is not
continuous or merely intermittent, the law deems the repeated and continuing need
for its performance as sufficient evidence of the necessity if not indispensability of
that activity to the business. Hence, the employment is also considered regular, but
only with respect to such activity and while such activity exists.
In the case at bar, the respondent company, which is engaged in the
business of manufacture and distillery of wines and liquors, claims that petitioner
was contracted on a casual basis specifically to paint a certain company building and
that its completion rendered petitioner's employment terminated. This may have been
true at the beginning, and had it been shown that petitioner's activity was exclusively
limited to painting that certain building, respondent company's theory of casual
employment would have been worthy of consideration. However, during petitioner's
period of employment, the records reveal that the tasks assigned to him included not
only painting of company buildings, equipment and tools but also cleaning and oiling
machines, even operating a drilling machine, and other odd jobs assigned to him
when he had no painting job.
G.R. No. L-77629 May 9, 1990
KIMBERLY INDEPENDENT v Drilon
Facts:
Kimberly-Clark Philippines, Inc. (KIMBERLY) executed a three-year
collective bargaining agreement (CBA) with United Kimberly-Clark Employees
Union-Philippine Transport and General Workers' Organization (UKCEUPTGWO)
which expired on June 30,1986. Within the 60-day freedom period prior to the
expiration of and during the negotiations for the renewal of the aforementioned
21
CBA, some members of the bargaining unit formed another union called "Kimberly
Independent Labor Union for Solidarity, Activism and Nationalism-Organized Labor
Association in Line Industries and Agriculture (KILUSAN-OLALIA). KILUSAN-
OLALIA filed a petition for certification election. KIMBERLY and UKCEU-
PTGWO did not object to the holding of a certification election but objected to the
inclusion of the so-called contractual workers whose employment with KIMBERLY
was coursed through an independent contractor, Rank Manpower Company
(RANK), as among the qualified voters. During the pre-election conference, 64
casual workers were challenged by KIMBERLY and UKCEU-PTGWO on the
ground that they are not employees of KIMBERLY but of RANK. It was agreed by
all the parties that the 64 voters shall be allowed to cast their votes but that their
ballots shall be segregated and subject to challenge proceedings.
Issue: WON the 64 employees were regular Kimberly employees.
Held:
Article 280 of the Labor Code provides for two. kinds of regular employees,
namely: (1) those who are engaged to perform activities which are usually necessary
or desirable in the usual business or trade of the employer; and (2) those who have
rendered at least one year of service, whether continuous or broken, with respect to
the activity in which they are employed. The individual petitioners herein who have
been adjudged to be regular employees fall under the second category.
Owing to their length of service with the company, these workers became
regular employees, by operation of law, 1 year after they were employed by
KIMBERLY through RANK. While the actual regularization of these employees
entails the mechanical act of issuing regular appointment papers and compliance
with such other operating procedures as may be adopted by the employer, it is more
in keeping with the intent and spirit of the law to rule that the status of regular
employment attaches to the casual worker on the day immediately after the end of
his first year of service. To rule otherwise, and to instead make their regularization
dependent on the happening of some contingency or the fulfillment of certain
requirements, is to impose a burden on the employee which is not sanctioned by law.
That the first stated position is the situation contemplated and sanctioned by
law is further enhanced by the absence of a statutory limitation before regular status
can be acquired by a casual employee. The law is explicit. As long as the employee
has rendered at least one year of service, he becomes a regular employee with respect
to the activity in which he is employed. The law does not provide the qualification
that the employee must first be issued a regular appointment or must first be formally
 Magsino Labor Relations Digests, Arbues 2019
declared as such before he can acquire a regular status. Obviously, where the law
does not distinguish, no distinction should be drawn
G.R. No. 91307 January 24, 1991 SINGER SEWING v Drilon
Facts:
SINGER MACHINE COLLECTORS UNION-BAGUIO (SIMACUB) filed
a petition for direct certification as the sole and exclusive bargaining agent of all
collectors of the Singer Sewing Machine Company, Baguio City branch. The
Company opposed the petition mainly on the ground that the union members are
actually not employees but are independent contractors as evidenced by the
collection agency agreement which they signed. Union asserted that they "perform
the most desirable and necessary activities for the continuous and effective
operations of the business of the petitioner Company".
Issue: WON the collecting agents are employees of the company.
Held: No.
The nature of the relationship between a company and its collecting agents
depends on the circumstances of each particular relationship. Not all collecting
agents are employees and neither are all collecting agents independent contractors.
The plain language of the agreement reveals that the designation as
collection agent does not create an employment relationship and that the applicant is
to be considered at all times as an independent contractor. This is consistent with the
first rule of interpretation that the literal meaning of the stipulations in the contract
controls. No such words as "to hire and employ" are present. Moreover, the
agreement did not fix an amount for wages nor the required working hours.
Compensation is earned only on the basis of the tangible results produced, i.e., total
collections made.
The Court finds that since private respondents are not employees of the
Company, they are not entitled to the constitutional right to join or form a labor
organization for purposes of collective bargaining. Accordingly, there is no
constitutional and legal basis for their "union" to be granted their petition for direct
certification.
22
G. R. No. 148492. May 9, 2003 BUENAVENTURA C. MAGSALIN v
NATIONAL ORGANIZATION OF WORKING MEN (N.O.W.M)
Facts:
The private respondents worked as sales route helpers for the petitioner (Coca Cola)
for 5 months and thereafter they were hired on a daily basis. According to the petitioner, the
respondents were merely hired as substitutes for regular helpers when the latter were
unavailable or due to shortage of manpower/high volume of work. These workers would then
wait every morning outside the gates and if hired, they would be paid their wages at the end of
the day. The respondents asked the petitioner to make them regular but the latter refused.
Hence, 23 of these temporary workers filed a case for illegal dismissal.
Issue: WON the truck helpers were regular employees.
Held: Yes.
In determining whether an employment should be considered regular or non-regular,
the applicable test is the reasonable connection between the particular activity performed by
the employee in relation to the usual business or trade of the employer. The standard, supplied
by the law itself, is whether the work undertaken is necessary or desirable in the usual
business or trade of the employer, a fact that can be assessed by looking into the nature of the
services rendered and its relation to the general scheme under which the business or trade is
pursued in the usual course. It is distinguished from a specific undertaking that is divorced
from the normal activities required in carrying on the particular business or trade. But,
although the work to be performed is only for a specific project or seasonal, where a person
thus engaged has been performing the job for at least one year, even if the performance is not
continuous or is merely intermittent, the law deems the repeated and continuing need for its
performance as being sufficient to indicate the necessity or desirability of that activity to the
business or trade of the employer. The employment of such person is also then deemed to be
regular with respect to such activity and while such activity exists.
The argument of petitioner that its usual business or trade is softdrink manufacturing
and that the work assigned to respondent workers as sales route helpers so involves merely
postproduction activities, one which is not indispensable in the manufacture of its products,
scarcely can be persuasive. If, as so argued by petitioner company, only those whose work are
directly involved in the production of softdrinks may be held performing functions necessary
and desirable in its usual business or trade, there would have then been no need for it to even
maintain regular truck sales route helpers. The nature of the work performed must be viewed
from a perspective of the business or trade in its entirety and not on a confined scope. The
repeated rehiring of respondent workers and the continuing need for their services clearly
attest to the necessity or desirability of their services in the regular conduct of the business or
trade of petitioner company.
 Magsino Labor Relations Digests, Arbues 2019
G.R. No. L-46562 March 31, 1978 VASSAR INDUSTRIES
EMPLOYEES UNION (VIEU) v HON. FRANCISCO L. ESTRELLA
Facts:
There was in existence a CBA between private respondents Associated
Labor Unions and Vassar Industries. Prior to its expiration, 111 of a total number of
150 employees of such firm disaffiliated from the former labor organization and
formed their own union. Thereafter, they filed an application for registration of their
union with the Bureau of Labor Relations, complying with an the requirements of
both the Labor Code and its implementing regulations. While such application was
pending, petitioner Union filed a petition for certification as bargaining agent for the
rank-and-file employees of the company. The Med-Arbiter denied their plea on the
ground that the union was not duly registered with the Department of Labor.
The Bureau of Labor Relations denied the application for registration on the
ground that there is a registered collective bargaining agent in the company.
Issue: WON BLR may deny the registration.
Held: No.
There is both a constitutional and statutory recognition that laborers have
the right to form unions to take care of their interests vis-a-viz their employees. Their
freedom to form organizations would be rendered nugatory if they could not choose
their own leaders to speak on their behalf and to bargain for them." The freedom to
choose which labor organization to join is an aspect of the constitutional mandate of
protection to labor. Mandamus lies to compel the registration of a labor organization.
To allow a labor union to organize itself and acquire a personality distinct and
separate from its members and to serve as an instrumentality to conclude CBA, the
role of a labor union as the agency for the expression of the collective will affecting
its members both present and prospective, was stressed.
Employees shall have the right to self-organization and to form, join or
assist labor organizations of their own choosing for the purpose of collective
bargaining through representatives of their own choosing and to engage in concerted
activities for the purpose of collective bargaining and other mutual aid or
protection." The Labor Code is equally explicit on the matter. Thus: "The State shall
assure the rights of workers to self-organization, collective bargaining, security of
tenure and just and humane conditions of work."
G.R. No. L-25246 September 12, 1974 BENJAMIN VICTORIANO
v ELIZALDE ROPE WORKERS' UNION
23
Facts:
Benjamin Victoriano (hereinafter referred to as Appellee), a member of
INC, had been in the employ of the Elizalde Rope Factory, Inc. (hereinafter referred
to as Company) since 1958. As such employee, he was a member of the Elizalde
Rope Workers' Union (hereinafter referred to as Union) which had with the
Company a CBA containing a closed shop provision which reads as:
Membership in the Union shall be required as a condition of employment
for all permanent employees workers covered by this Agreement.
Under Section 4(a), paragraph 4, of RA 875, prior to its amendment by RA
3350, the employer was not precluded "from making an agreement with a labor
organization to require as a condition of employment membership therein, if such
labor organization is the representative of the employees." On June 18, 1961,
however, RA 3350 was enacted, introducing an amendment to — paragraph (4)
subsection (a) of section 4 of Republic Act No. 875, as follows: "but such agreement
shall not cover members of any religious sects which prohibit affiliation of their
members in any such labor organization".
Being a member of a religious sect that prohibits the affiliation of its
members with any labor organization, Appellee presented his resignation to appellant
Union in 1962, and when no action was taken thereon, he reiterated his resignation
on September 3, 1974. Thereupon, the Union wrote a formal letter to the Company
asking the latter to separate Appellee from the service in view of the fact that he was
resigning from the Union as a member.
The management of the Company in turn notified Appellee and his counsel
that unless the Appellee could achieve a satisfactory arrangement with the Union, the
Company would be constrained to dismiss him from the service. This prompted
Appellee to file an action for injunction to enjoin the Company and the Union from
dismissing Appellee. In its answer, the Union invoked the "union security clause" of
the CBA; assailed the constitutionality RA 3350.
Issue: WON RA 3350 is unconstitutional
Held: No. Section 3 of RA 875 provides that employees shall have the right to self-
organization and to form, join of assist labor organizations of their own choosing for
the purpose of collective bargaining and to engage in concerted activities for the
purpose of collective bargaining and other mutual aid or protection. What the
Constitution and the Industrial Peace Act recognize and guarantee is the "right" to
form or join associations.
 Magsino Labor Relations Digests, Arbues 2019
The right to refrain from joining labor organizations recognized by Section
3 of the Industrial Peace Act is, however, limited. The legal protection granted to
such right to refrain from joining is withdrawn by operation of law, where a labor
union and an employer have agreed on a closed shop, by virtue of which the
employer may employ only member of the collective bargaining union, and the
employees must continue to be members of the union for the duration of the contract
in order to keep their jobs. To that all-embracing coverage of the closed shop
arrangement, RA 3350 introduced an exception, when it added to Section 4 of the
Industrial Peace Act the following proviso: "but such agreement shall not cover
members of any religious sects which prohibit affiliation of their members in any
such labor organization". RA 3350 merely excludes ipso jure from the application
and coverage of the closed shop agreement the employees belonging to any religious
sects which prohibit affiliation of their members with any labor organization. What
the exception provides, therefore, is that members of said religious sects cannot be
compelled or coerced to join labor unions even when said unions have closed shop
agreements with the employers; that in spite of any closed shop agreement, members
of said religious sects cannot be refused employment or dismissed from their jobs on
the sole ground that they are not members of the collective bargaining union. The
free exercise of religious profession or belief is superior to contract rights. In case of
conflict, the latter must, therefore, yield to the former.
The primary effects of the exemption from closed shop agreements in favor
of members of religious sects that prohibit their members from affiliating with a
labor organization, is the protection of said employees against the aggregate force of
the CBA, and relieving certain citizens of a burden on their religious beliefs; and by
eliminating to a certain extent economic insecurity due to unemployment, which is a
serious menace to the welfare of the people. It is our view that the exemption from
the effects of closed shop agreement does not directly advance, or diminish, the
interests of any particular religion. The benefit upon the religious sects is merely
incidental and indirect. The "establishment clause" (of religion) does not ban
regulation on conduct whose reason or effect merely happens to coincide or
harmonize with the tenets of some or all religions. The free exercise clause of the
Constitution has been interpreted to require that religious exercise be preferentially
aided.
G.R. No. 82914 June 20, 1988 KAPATIRAN SA MEAT AND CANNING v
BLR DIRECTOR PURA FERRER CALLEJA
Facts:
1984-1987: TUPAS (Kapatiran) was the sole and exclusive collective
bargaining representative of the workers in the Meat and Canning Division of the
24
Universal Robina Corp, with a 3-yr collective bargaining agreement which was to
expire on November 15, 1987 Within the freedom period of 60 days prior to the
expiration of its CBA, TUPAS filed an amended notice of strike as a means of
pressuring the company to extend, renew, or negotiate a new CBA with it.
The NEW ULO (composed mostly of workers belonging to the INC sect)
registered as a labor union. TUPAS staged a strike ROBINA obtained an injunction
against the strike, resulting in an agreement to return to work and for the parties to
negotiate a new CBA. The NEW ULO filed a petition for a certification election at
the BLR
TUPAS moved to dismiss the petition for being defective in form and the members
of the NEW ULO were mostly members of INC sect which 3 yrs previous refused to
affiliate with any labor union and accused company of using the NEW ULO to
defeat TUPAS’ bargaining rights
Med-Arbiter ordered the holding of a certification election with 20 days.
TUPAS appealed to BLR; In the meantime, it was able to negotiate a new 3-yr CBA
with ROBINA, which was signed on December 3, 1987 and to expire on November
15, 1990 BLR Director Calleja dismissed the appeal. TUPAS’ MR was denied.
Hence, this petition alleging that BLR acted in excess of her jurisdiction and with
grave abuse of discretion in affirming the Med-Arbiter’s order for a certification
election.
Issue: WON the right of members of the INC sect not to join a labor union for being
contrary to their religious beliefs bar the members of that sect from forming their
own union.
Held: No.
The public respondent correctly observed that the "recognition of the tenets
of the sect ... should not infringe on the basic right of self-organization granted by
the constitution to workers, regardless of religious affiliation."
G.R. No. 131235. November 16, 1999
UST FACULTY UNION (USTFU) v ERNESTO R. BITONIO
Facts:
Private respondent Mariño et al are duly elected officer of UST faculty. The
union has a 5-year CBA with its employer and is set to expire on May 31,1998. On
September 21, 1996, Sec Gen of the union posted a general assembly announcement
 Magsino Labor Relations Digests, Arbues 2019
to be held on October 5, 1996. Various UST club presidents requested a general
faculty assembly thus union and non-union faculty members convened. New set of
officers were elected, violative of the CBL and that GA was held with the attendance
of non-union members. Current union officers were served with a notice to vacate
the union office as new set of offices were already elected. CBA was likewise
ratified by an overwhelming majority. Mad-Arbiter declared the election conducted
was violative of the union’s CBL. BLR Director Bitonio upheld the decision with a
ruling that the CBL which constituted the covenant between the union and its
members, could not be suspended during the general assembly of all faculty
members, since it had not been authorized by the union.
Issue: WON public respondent committed grave abuse of discretion in refusing to
recognize the officers elected during the October 4, 1996 general assembly.
Held: No.
We cannot attribute grave abuse of discretion to Director Bitonios finding
and conclusion. We invalidated the local union elections held at the wrong date
without prior notice to members and conducted without regard for duly prescribed
ground rules. We held that the proceedings were rendered void by the lack of due
process -- undue haste, lack of adequate safeguards to ensure integrity of the voting,
and the absence of the notice of the dates of balloting.
Self-organization is a fundamental right guaranteed by the Constitution and
the Labor Code.Corollary to this right is the prerogative not to join, affiliate with or
assist a labor union. Therefore, to become a union member, an employee must, as a
rule, not only signify the intent to become one, but also take some positive steps to
realize that intent.
On joining a labor union, the constitution and by-laws become a part of the
members contract of membership under which he agrees to become bound by the
constitution and governing rules of the union so far as it is not inconsistent with
controlling principles of law. The constitution and by-laws of an unincorporated
trade union express the terms of a contract, which define the privileges and rights
secured to, and duties assumed by, those who have become members. The agreement
of a member on joining a union to abide by its laws and comply with the will of the
lawfully constituted majority does not require a member to submit to the
determination of the union any question involving his personal rights.
*Union Election vs Certification Election
25
A union election is held pursuant to the union’s constitution and bylaws,
and the right to vote in it is enjoyed only by union members. A union election should
be distinguished from a certification election, which is the process of determining,
through secret ballot, the sole and exclusive bargaining agent of the employees in the
appropriate bargaining unit, for purposes of collective bargaining. Specifically, the
purpose of a certification election is to ascertain whether or not a majority of the
employees wish to be represented by a labor organization and, in the affirmative
case, by which particular labor organization.
In a certification election, all employees belonging to the appropriate
bargaining unit can vote. Therefore, a union member who likewise belongs to the
appropriate bargaining unit is entitled to vote in said election. However, the reverse
is not always true; an employee belonging to the appropriate bargaining unit but who
is not a member of the union cannot vote in the union election, unless otherwise
authorized by the constitution and bylaws of the union. Verily, union affairs and
elections cannot be decided in a non-union activity.
In both elections, there are procedures to be followed. Thus, the October 4,
1996 election cannot properly be called a union election, because the procedure laid
down in the USTFUs CBL for the election of officers was not followed. It could not
have been a certification election either, because representation was not the issue,
and the proper procedure for such election was not followed. The participation of
non-union members in the election aggravated its irregularity.
G.R. No. L-43495-99 January 20, 1990 TROPICAL HUT
EMPLOYEES' UNION-CGW v TROPICAL HUT FOOD MARKET
Facts: The rank and file workers of the Tropical Hut Food organized a local union
called the Tropical Hut Employees Union (THEU), elected their officers, adopted
their constitution and by-laws and immediately sought affiliation with the National
Association of Trade Unions (NATU). The NATU accepted the THEU application
for affiliation. Following such affiliation with NATU, Registration Certificate was
issued by the DOLE in the name of the Tropical Hut Employees Union — NATU. It
appears, however, that NATU itself as a labor federation, was not registered with the
Department of Labor.
 Magsino Labor Relations Digests, Arbues 2019
Company and THEU-NATU entered into a new CBA which incorporated
the previous union-shop security clause and the attached check-off authorization
form. NATU received a letter jointly signed by the incumbent officers of the local
union informing the NATU that THEU was disaffiliating from the NATU federation.
On despite being given the chance to affirm their membership with THEU-NATU,
they did not. The union security clause set forth in the CBA was enforced which
says membership is a condition of continued employment. And they were dismissed.
Issue: WON disaffiliation is a violation of union security clause and be the basis of
the dismissal of the employees.
Held: No. The union security clause embodied in the CBA cannot be used to
justify the dismissals meted to petitioners since it is not applicable to the
circumstances obtaining in this case. The CBA imposes dismissal only in case an
employee is expelled from the union for joining another federation or for forming
another union or who fails or refuses to maintain membership therein. The case at
bar does not involve the withdrawal of merely some employees from the union but of
the whole THEU itself from its federation. Clearly, since there is no violation of the
union security provision in the CBA, there was no sufficient ground to terminate the
employment of said employees.
In view of the fact that the dispute revolved around the mother federation
and its local, with the company suspending and dismissing the workers at the
instance of the mother federation then, the company’s liability should be limited to
the immediate reinstatement of the workers. And since their dismissals were effected
without previous hearing and at the instance of NATU, this federation should be held
liable to the petitioners for the payment of their backwages, as what We have ruled
in the Liberty Cotton Mills Case.
G.R. No. 127374. January 31, 2002 PHILIPPINE SKYLANDERS v NLRC
Facts:
In November 1993 the Philippine Skylanders Employees Association
(PSEA-NWC), a local labor union affiliated with the Philippine Association of Free
Labor Unions (PAFLU), won in the certification election conducted among the rank
and file employees of Philippine Skylanders, Inc. (PSI). Its rival union, Philippine
Skylanders Employees Association-WATU (PSEA-WATU) immediately protested
the result of the election before the Secretary of Labor. PSEA-NWC sent PAFLU a
notice of disaffiliation citing as reason PAFLU's supposed deliberate and habitual
dereliction of duty toward its members.
26
PSEA subsequently affiliated itself with the National Congress of Workers
(NCW), changed its name to Philippine Skylanders Employees Association -
National Congress of Workers (PSEA-NCW), and to maintain continuity within the
organization, allowed the former officers of PSEA-PAFLU to continue occupying
their positions as elected officers in the newly-forged PSEA-NCW.
17 March 1994 PSEA-NCW entered into a collective bargaining agreement
with PSI which was immediately registered with the Department of Labor and
Employment. PAFLU requested for the accounting. PSI through its personnel
manager Francisco Dakila denied the request.
PAFLU through Serafin Ayroso filed a complaint for unfair labor practice
against PSI, its president Mariles Romulo and personnel manager Francisco Dakila.
PAFLU alleged that aside from PSI’s refusal to bargain collectively with its workers,
the company through its president and personnel manager, was also liable for
interfering with its employees’ union activities
Ayroso filed another complaint in behalf of PAFLU for unfair labor practice
against Francisco Dakila. Through Ayroso PAFLU claimed that Dakila was present
in PSEA’s organizational meeting thereby confirming his illicit participation in
union activities. Ayroso added that the members of the local union had unwittingly
fallen into the manipulative machinations of PSI and were lured into endorsing a
collective bargaining agreement which was detrimental to their interests.
PAFLU amended its complaint by including the elected officers of PSEA-PAFLU as
additional party respondents. PAFLU averred that the local officers of PSEA-
PAFLU, namely Macario Cabanias, Pepito Rodillas, Sharon Castillo, Danilo
Carbonel, Manuel Eda, Rolando Felix, Jocelyn Fronda, Ricardo Lumba, Joseph
Mirasol, Nerisa Mortel, Teofilo Quirong, Leonardo Reyes, Manuel Cadiente, and
Herminia Riosa, were equally guilty of unfair labor practice since they brazenly
allowed themselves to be manipulated and influenced by petitioner Francisco Dakila.
Dakila moved for the dismissal of the complaint on the ground that the issue
of disaffiliation was an inter-union conflict which lay beyond the jurisdiction of the
Labor Arbiter. PSEA was no longer affiliated with PAFLU, Ayroso or PAFLU for
that matter had no personality to file the instant complaint.
Labor Arbiter declared PSEA’s disaffiliation from PAFLU invalid and held
PSI, PSEA-PAFLU and their respective officers guilty of unfair labor practice.
 Magsino Labor Relations Digests, Arbues 2019
As PSEA-NCW’s personality was not accorded recognition, its collective
bargaining agreement with PSI was struck down for being invalid.
PSI, PSEA and their respective officers appealed to the NLRC. But the
NLRC upheld the Decision ofthe Labor Arbiter.
Held: Right of local unions to separate from their mother federation on the ground
that as separate and voluntary associations, local unions do not owe their creation
and existence to the national federation to which they areaffiliated but, instead, to the
will of their members. The sole essence of affiliation is to increase, by collective
action, the common bargaining power of local unions for the effective enhancement
and protection of their interests. Admittedly, there aretimes when without succor and
support local unions may find it hard, unaided by other support groups, to secure
justice for themselves. Yet the local unions remain the basic units of association, free
to serve their own interests subject to the restraints imposed by the constitution and
by-laws of the national federation, and free also to renounce the affiliation upon the
terms laid down in the agreement which brought such affiliation into existence.
Nothing shown in the records nor is it claimed by PAFLU that the local
union was expressly forbidden to disaffiliate from the federation nor were there any
conditions imposed for a valid breakaway. As such, the pendency of an election
protest involving both the mother federation and the local union did not constitute a
bar to a valid disaffiliation. Neither was it disputed by PAFLU that 111 signatories
out of the 120 members of the local union, or an equivalent of 92.5% of the total
union membership supported the claim of disaffiliation and had in fact disauthorized
PAFLU from instituting any complaint in their behalf.
It was entirely reasonable then for PSI to enter into a collective bargaining
agreement with PSEA-NCW. As PSEA had validly severed itself from PAFLU,
there would be no restrictions which could validly hinder it from subsequently
affiliating with NCW and entering into a collective bargaining agreement in behalf
of its members. The mere act of disaffiliation did not divest PSEA of its own
personality; neither did it give PAFLU the license to act independently of the local
union.
27
G.R. No. L-50992 June 19, 1985
NATIVIDAD SAMPANG vs HONORABLE AMADO G. INCIONG
Facts:
Sampang seeks the reversal of an order of the then Deputy Minister of
Labor Inciong, who sustained the RD in his decision to grant clearance for her
dismissal, presumably for initiating "a concerted action among the rank and file
workers not to perform overtime work amounting to gross insubordination" That
charge she denied, her version being that she made "several representations with
management, upon request of the members of the union, to cut-off overtime work, as
this would mean more days of work and additional living allowance for the workers,
but to no avail, that the overtime work was a device of management to avoid
compliance with P.D. 112; that there is no exigency for the rendering of overtime
work, hence, the concerted refusal to work overtime cannot be recalled a strike."
Issue: WON Sampang’s dismissal violated the security of tenure.
Held: Yes.
There is here a case, therefore, of an employee, with more than thirty years
service, having been dismissed for instigating a strike that lasted for two days and
caused the loss in the amount of P2,716.00. It is quite obvious then that the
constitutional mandate on security of tenure was violated. For even if her denial that
she did not instigate such two-day strike be disregarded, still the penalty imposed
was grossly disproportionate to the offense imputed to her.
It would imply at the very least that 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
workingman. There is, in addition, his family to consider. Unemployment brings
untold hardships and sorrows on those dependent on the wage-earner. The misery
and pain attendant on the loss of jobs then could be avoided if there be acceptance of
the view that under all the circumstances of this case, petitioners should not be
deprived of their means of livelihood. Nor is this to condone what had been done by
them. For all this while, since private respondent considered them separated from the
service, they had not been paid. From the strictly juridical standpoint, it cannot be
too strongly stressed, to follow Davis in his masterly work, Discretionary Justice,
that where a decision may be made to rest on informed judgment rather than rigid
rules, all the equities of the case must be accorded their due weight. Finally, labor
 Magsino Labor Relations Digests, Arbues 2019
law determinations, to quote from Bultmann, should be not only secundum rationem
but also secundum caritatem.
G.R. No. L-50283-84 April 20, 1983
DOLORES VILLAR v DEPUTY MINISTER INCIONG
Facts:
Petitioners were members of the Amigo Employees Union-PAFLU, and the
existing bargaining agent of the employees in private respondent Amigo
Manufacturing (hereinafter referred to as Company). The Company and the Amigo
Employees Union-PAFLU had a CBA governing their labor relations, which
agreement was then about to expire on February 28, 1977. Within the last 60 days of
the CBA, events transpired giving rise to the present dispute.
On January 5, 1977, upon written authority of at least 30% of the employees
in the company, including the petitioners, the Federation of Unions of Rizal (referred
to as FUR) filed a petition for certification election with the Med-Arbiter. The
petition was opposed by PAFLU. Thereafter, employees who signed with PAFLU
signed a resolution stating their withdrawal from PAFLU and authorizing FUR to be
their sole bargaining agent.
Invoking the security clause in the CBA, PAFLU demanded the dismissal
of the members of fur, which the company granted.
Issue: WON the right to self-organization has been impaired.
Held: No.
It is true that disaffiliation from a labor union is not open to legal objection.
It is implicit in the freedom of association ordained by the Constitution. But this
Court has laid down the ruling that a closed shop is a valid form of union security,
and such provision in a collective bargaining agreement is not a restriction of the
right of freedom of association guaranteed by the Constitution. The quoted
stipulation for closed-shop is clear and unequivocal and it leaves no room for doubt
that the employer is bound, under the collective bargaining agreement, to dismiss the
employees, herein petitioners, for non- union membership. Petitioners became non-
union.
28
Petitioners insist that their disaffiliation from PAFLU and filing a petition
for certification election are not acts of disloyalty but an exercise of their right to
self-organization. They contend that these acts were done within the 60-day freedom
period when questions of representation may freely be raised. Under the peculiar
facts of the case, We find petitioners' insistence untenable.
A closed-shop is a valid form of union security, and a provision therefor in
a collective bargaining agreement is not a restriction of the right of freedom of
association guaranteed by the Constitution. Where in a closed-shop agreement it is
stipulated that union members who cease to be in good standing shall immediately be
dismissed, such dismissal does not constitute an unfair labor practice exclusively
cognizable by the CIR.
Extant from the records is the fact that petitioners numbering 10, were
among the 96 who signed the "Sama-Samang Kapasiyahan" whereas there are 234
union members in the Amigo Employees Union-PAFLU. Hence, petitioners
constituted a small minority for which reason they could not have successfully
disaffiliated the local union from PAFLU. Since only 96 wanted disaffiliation, it can
be inferred that the majority wanted the union to remain an affiliate of PAFLU and
this is not denied or disputed by petitioners. The action of the majority must,
therefore, prevail over that of the minority members.
G.R. No. L-22228 February 27, 1969
PAFLU, SOCIAL SECURITY SYSTEM EMPLOYEES ASSOCIATION-
PAFLU v SECRETARY OF LABOR
Facts:
The Registration of Labor Organizations — hereinafter referred to as the
Registrar — issued a notice of hearing of the matter of cancellation of the
registration of the SSSEA, because of failure to furnish the BLR with copies of the
reports on the finances of that union duly verified by affidavits, in violation of
Section 23 of Republic Act No. 875. After hearing, the certification was cancelled.
 Magsino Labor Relations Digests, Arbues 2019
Petitioners pray for writs of certiorari and prohibition to restrain
respondents, the Secretary of Labor, the Director of Labor Relations and the
Registrar of Labor Organizations, from enforcing an order of cancellation of the
registration certificate of the Social Security System Employees Association —
hereinafter referred to as the SSSEA — which is affiliated to the Philippine
Association of Free Labor Unions — hereinafter referred to as PAFLU — as well as
to annul all proceedings in connection with said cancellation and to prohibit
respondents from enforcing Section 23 of RA 875.
Issue: WON section 23 violates freedom of assembly and association.
Held: No.
The registration prescribed in paragraph (b) of said section is not a
limitation to the right of assembly or association, which may be exercised with or
without said registration. The latter is merely a condition sine qua non for the
acquisition of legal personality by labor organizations, associations or unions and the
possession of the "rights and privileges granted by law to legitimate labor
organizations". The Constitution does not guarantee these rights and privileges,
much less said personality, which are mere statutory creations, for the possession and
exercise of which registration is required to protect both labor and the public against
abuses, fraud, or impostors who pose as organizers, although not truly accredited
agents of the union they purport to represent. Such requirement is a valid exercise of
the police power, because the activities in which labor organizations, associations
and union of workers are engaged affect public interest, which should be protected.
Furthermore, the obligation to submit financial statements, as a condition for the
non-cancellation of a certificate of registration, is a reasonable regulation for the
benefit of the members of the organization, considering that the same generally
solicits funds or membership, as well as oftentimes collects, on behalf of its
members, huge amounts of money due to them or to the organization.
Sec. 23 does not impinge upon the right of organization guaranteed in the
Declaration of Human Rights, or run counter to Art. 2, 4, 7, which provide that
"workers and employers shall have the right to establish and join organizations of
their own choosing, without previous authorization"; that "workers and employers
organizations shall not be liable to be dissolved or suspended by administrative
authority"; that "the acquisition of legal personality by workers' and employers'
organizations, shall not be made subject to conditions of such a character as to
restrict the application of the provisions" above mentioned; and that "the guarantees
provided for in" said Convention shall not be impaired by the law of the land.
G.R. Nos. L-18778 and L-18779 August 31, 1967
29
UNITED SEAMEN v DAVAO SHIPOWNER
Facts:
On August 4, 1959, USUP presented a set of demand to DSA, representing
the respondent shipping companies, for union recognition, union security,
standardization of wages and other benefits. In response, the ship owners brought to
the attention of the USUP the existence of a CBA with the Davao Marine
Association (DMA), where all of the crewmen of their launches belonged. They
suggested to the USUP that they first take the necessary steps for certification as the
collective bargaining agent, as the ship owners were bound by the CBA until 1959.
However, even before receiving the ship owner’s response to its demands, the USUP
had filed a Notice of Strike against the individual ship owners at the Department of
Labor Davao Office.
The Chief of the Labor Operations Section of the Davao Office requested
for a conference to solve the conflict. On August 20, 1959, both parties reached a
covenant stating the withdrawal of the Notice of Strike, as well as the observance of
the status quo regarding the jobs incident to the businesses of the DSA and the
withdrawal of the civil case of the DMA against the USUP. It was also stipulated in
the contract that the USUP will respect the existing CBA between DSA and DMA,
but USUP will file a petition for certification election for determination of union
representation.
As stipulated, the USUP filed with the CIR a petition for certification
election. Subsequent to the covenant, the shipping companies separately served
notices of termination upon 64 employees, effecting December 31, 1959, due to
different reasons (from stoppage of operations to the death of one of the partners of
the shipping companies due to business losses). As a result, USUP reported the
terminations to the Department of Labor, which called for a conference.
Nevertheless, on December 29, 1959, the USUP notified the Philippine
Constabulary, City Mayor, Bureau of Customs and the general public of a strike on
January 1, 1960.
On February 11, 1960, the shipping companies filed a petition for writ of
injunction, as a necessity due to irreparable damage to properties due to “coercion,
violence and illegal picketing”. On the other hand, on February 24, 1960, the USUP
filed a ULP case against the ship owners and DSA, alleging that the ship owners
interfered, and continued to interfere with their right to self-organization by
discrimination against employees. CIR however sided with the DSA, dismissing the
USUP’s ULP case while declaring the strike as illegal.
Issue: WON the strike was legal.
 Magsino Labor Relations Digests, Arbues 2019
Held: No.
The Supreme Court agreed with the lower court’s findings that the USUP’s
Notice of Strike was but a direct offshoot of the “losing effort” to compel the DSA
and the ship owners to recognize USUP as the sole collective bargaining agent of the
employees, to the exclusion of the DMA as the existing collective bargaining agent
of the DSA.
First, the Court noted that the USUP filed its Notice of Strike even before
its receipt of the ship owner’s answers to its set of demands, thereby showing that the
USUP was already set on continuing the strike with or without the answer of the ship
owners. This, according to the Court was a clear showing that USUP was aware of
the existence of DMA as a valid collective bargaining agent, operating as a legal bar
to entertaining USUP’s demands.
Second, the Court stated that USUP completely disturbed the status quo –
the return to normal and original operating practices through the strike that was done
by USUP. By striking, USUP impaired existing CBA between the shipowners and
the DMA which recognized "the right of the Employer to hire, promote and transfer
and for legal cause suspend, lay-off or discharge employees subject to the right of the
union (referring to the DMA) to notification and to ask reconsideration of any action
of the Employer in the premises."
It could not also be said that the DSA violated the covenant of August 20,
1959, as it was stated that the DSA was not a party thereto. Even assuming that the
shipping companies were bound by the covenant, the termination of the employees
was not considered to be a violation of the covenant, as the dismissals were
predicated on legitimate reasons.
Third, the existence of the CBA should have deterred USUP from acts
tending to force its recognition as a union. The employees concerned were bound by
the CBA between DMA and the ship owners, but instead of going through the
procedure as stated in their CBA for grievance machinery.
Fourth, it was stated by the Court that, even granting that the purpose of the
strike was valid, the fact still remained that the means employed by the employees on
strike were far from legitimate, as shown by the fact that the USUP used acts of
violence and coercion.
G.R. Nos. 64821-23 January 29, 1993
UNIVERSITY OF PANGASINAN FACULTY UNION v NLRC
30
Petitioner filed various complaints against UPang in NLRC Dagupan,
mostly for non-payment of allowances. The complaints were dismissed.
Petitioner's contention that the cases filed by Consuelo Abad as its president
should affect, not only herself, but all the other union members similarly situated as
she was, is well taken. The uncontroverted allegation of the petitioner is that it is the
holder of Registration Certificate No. 9865-C, having been registered with the then
Ministry of Labor and Employment on February 16, 1978. As such, petitioner
possessed the legal personality to sue and be sued under its registered name.
Corollarily, its president, Consuelo Abad, correctly filed the complaints even if some
of them involved rights and interest purely or exclusively appertaining to individual
employees, it appearing that she signed the complaints "for and in behalf of the
University of Pangasinan Faculty Union."
The University's contention that petitioner had no legal personality to
institute and prosecute money claims must, therefore, fail. What should be borne in
mind is that the interest of the individual worker can be better protected on the whole
by a strong union aware of its moral and legal obligations to represent the rank and
file faithfully and secure for them the best wages and working terms and conditions. .
. . Although this was stated within the context of collective bargaining, it applies
equally well to cases, such as the present wherein the union, through its president,
presented its individual members' grievances through proper proceedings. While the
complaints might not have disclosed the identities of the individual employees
claiming monetary benefits, such technical defect should not be taken against the
claimants, especially because the University appears to have failed to demand a bill
of particulars during the proceedings before the Labor Arbiter.
On the merits of the petition, the NLRC did not abuse its discretion in
resolving the appeal from the decision of Executive Labor Arbiter Tumang except
for the disallowance of the emergency cost of living allowance to members of the
petitioner.
GR No. L-30241 June 30,1972
MACTAN WORKERS UNION VS ABOITIZ 47 SCRA 517
FACTS:
 Magsino Labor Relations Digests, Arbues 2019
Defendant Cebu Shipyard & Engineering Works, Inc. in Lapulapu City is
employing laborers and employees belonging to two rival labor unions. Namely
plaintiff, Mactan Workers Union(MWU) and intervenor appellant Associated Labor
Union (ALU). On November 28, 1964, the defendant Cebu Shipyard & Engineering
Works, Inc. and the Associated Labor Union entered into a ‘Collective Bargaining
Agreement which mandate a profit sharing bonus of 10% of its net income derived
from the direct operation of its shipyard and shop in LapuLapu City for its labourers
and workers. The profit sharing bonus shall be paid by the company to ALU of
which ALU will deliver it to the employees. Unclaimed bonuses shall be returned to
the management. The delivery should be in 2 instalments, 1st payable in March and
the 2nd payable in June every year.
In 1965, the 2nd instalment given in June were not received by members of
the rival Mactan Workers Union (MWU) because they did not went to the ALU
office to receive their shares. After the 60 day period has lapse, ALU returned the
funds to the management with an advice to management to refrain from delivering
the amount to the members of MWU without a court order otherwise ALU will take
steps to protect the interests of its members. Because of the warning from ALU, the
company deposited the amount of P4,035.82 with the Labor Administrator. The
MWU filed a case with the lower court to recover the amount.
The lower court ordered the company to deliver the sum of money to ALU
and for ALU to pay the members of MWU their corresponding shares. Hence, the
appeal of intervenor ALU.
ISSUE: WON Intervenor ALU only represent its members and not the entire
workforce of Defendant company
HELD: Petition dismissed.
The Labor Union that gets the majority vote as the exclusive bargaining
representative does not act for its members alone. It represents all the employees in
such a bargaining unit. It is not to be forgotten that what is entitled to constitutional
protection is labor, more specifically the workers, not labor organizations. That is the
Raison D’etere of labor unions.
Nevertheless, it is not to be forgotten that what is entitled to constitutional
protection is labor, or more specifically the working men and women, not labor
organizations. The latter are merely the instrumentalities through which their welfare
may be promoted and fostered. That is the raison d’etre of labor unions. The utmost
care should be taken then, lest in displaying an unyielding, intransigent attitude on
behalf of their members, injustice be committed against opposing labor
organizations. In the final analysis, they alone are not the sole victims, but the labor
31
movement itself, which may well be the recipient of a crippling blow. Moreover,
while it is equally understandable that their counsel would take advantage of every
legal doctrine deemed applicable or conjure up any defense that could serve their
cause, still, as officers of the court, there should be an awareness that resort to such a
technique does result in clogged dockets, without the least justification especially so
if there be insistence on flimsy and insubstantial contentions just to give some
semblance of plausibility to their pleadings. Certainly, technical virtuosity, or what
passes for it, is no substitute for an earnest and sincere desire to assure that there be
justice according to law. That is a creed to which all members of the legal profession,
labor lawyers not excluded, should do their best to live by.
G.R. No. 96189 July 14, 1992 UP v HON. PURA FERRER-CALLEJA
The Organization of Non-Academic Personnel of UP (ONAPUP) filed a
petition for certification election with Bureau of Legal Relations (BLR). It claimed to
represent 33% of all the non-academic personnel of UP-Diliman, Los Baños, Manila,
and Visayas. The University made no objections thererto, but the All UP Workers’
Union opposed the same and asked that the appropriate organizational unistructure
be first defined. It alleged that its membership composed of both academic and non-
academic rank-and-file (RnF) employees (EEs) of UP. The University then made a
comment on such that there should indeed be 2 distinct unions, one for academic EEs
and the other for the non-academic EEs, considering their dichotomy of interests.
Director Calleja however declared that the appropriate bargaining unit should
comprise of both groups, stating that the intent of EO 180 was to not fragmentalize
the employer (ER) unit. The University also sought to exclude from the bargaining
unit EEs holding supervisory positions, alleging that there still existed that held
supervisory powers over her other EEs. Director Calleja upheld her earlier ruling,
interposing that the policy-making powers contemplated in the case merely pertained
to academic matters and not as under the Labor Code. UP’s Motion for
reconsideration was likewise denied, hence this petition for certiorari.
ISSUE: WON academic and non-academic EEs of UP should comprise a single
collective bargaining unit.
 Magsino Labor Relations Digests, Arbues 2019
HELD: No. Although the country’s labor laws fail to provide a criterion for
determining the proper bargaining unit, even EO No. 180 only stated that the
appropriate organizational unit. A “bargaining unit” has been defined as a group of
employees, consistent with equity to the ER, cases have shown the 4 criterion to
consider;(1) will of the employees; (2) affinity and unit of employees' interest, such
as substantial similarity of work and duties, or similarity of compensation and
working conditions; (3) prior collective bargaining history; and (4) employment
status, such as temporary, seasonal probationary employees. Out of the four, it is the
“community/mutuality of interests” test that stands out the most. Applying the same,
it's clear that the acad and non-academic personnel’s respective interests contradict
with each other, and in effect, failed to satisfy the “community/mutuality of interest
test.” Contrarily, the 2 obviously share a dichotomy of interest or dissimilarity in the
work. Thus, the 2 separate and distinct bargaining units, one unit is for academics
and the other for non-academic unit personnel, is essential to assure it to all the
EEsthe exercise of their collective bargaining rights.
A "bargaining unit" is a group of employees of a given employer,
comprised of all or less than all of the entire body of employees, which the collective
interest of all the employees, consistent with equity to the employer, indicate to be
the best suited to serve the reciprocal rights and duties of the parties under the
collective bargaining provisions of the law.
The test of the grouping is community or mutuality of interests. And this is
so because 'the basic test of an asserted bargaining unit's acceptability is whether or
not it is fundamentally the combination which will best assure to all employees the
exercise of their collective bargaining rights." Hence, in that case, the Court upheld
the trial court's conclusion that two separate bargaining units should be formed, one
consisting of regular and permanent employees and another consisting of casual
laborers or stevedores.
MECHANICAL DEPARTMENT LABOR UNION SA PHILIPPINE
NATIONAL RAILWAYS v. CIR G.R. No. L-28223 August 30, 1968
FACTS: R Samahanng mga Manggagawa sa Caloocan Shops filed a petition calling
attention to the fact that there were three unions in the Caloocan shops of the PNR
(Samahan, KapisananngManggagawasa Manila Railroad Company, and Mechanical
Department Labor Union), that no certification election had been held in the last 12
months, that both R Samahanand P had submitted labor demands upon the
management for which reason a certification election was needed to determine the
proper collective bargaining agency for the Caloocan shop workers. This was
opposed by the management and P.
32
- P previously certified as SEBA of EEs & laborers of PNR’s mechanical
department
- Negotiated two bargaining agreements with management (1961, 1963)
- Renewal had been negotiated, contract remained to be signed
- Caloocan shops unit was not established nor separated from the Mechanical
Department unit
- R composed mainly of supervisors who had filed pending case to be
declared non-supervisors
- Purpose of petition was to disturb present smooth working labor
management relations
CIR found that R was composed of workers exclusively at Caloocan shops
of PNR changed with the maintenance of rolling stocks for repairs - major repair of
locomotives, engines, etc. It found that there is a community of interest among the
workers of the Caloocan shops, since they are grouped in one place and work under
the same conditions, and exposed to the same occupational risk. Though evidence on
record shows that workers at the Caloocan Shops perform the same nature of work as
their counterparts in the Manila Shed, the difference lies in the fact that workers at
the Caloocan Shops perform major repairs of locomotives, rolling stocks, engines,
etc., while those in the Manila Shed, works on minor repairs. Heavy equipment and
machineries are found in the Caloocan Shops.
In view of its findings and the history of "union representation" in the
railway company, indicating that bargaining units had been formed through
separation of new units from existing ones whenever plebiscites had shown the
workers' desire to have their own representatives, and relying on the "Globe
doctrine", CIR held that the employees in the Caloocan Shops should be given a
chance to vote on whether their group should be separated from that represented by
the Mechanical Department Labor Union, and ordered a plebiscite held for the
purpose.
P Union appealed to SC questioning the applicability under the
circumstances of the “Globe doctrine” of considering the will of the employees in
determining what union should represent them.
ISSUE: W/N a plebiscite election should be held to determine whether EEs at the
Caloocan shops desire R Union to be separated from the P union so that it may be
recognized as a separate bargaining unit.
RULING: YES. Under the Globe doctrine, bargaining units may be formed through
separation of new units from existing ones whenever plebiscites had shown the
 Magsino Labor Relations Digests, Arbues 2019
workers’ desire to have their own representatives. Technically, this appeal is
premature, since the result of the ordered plebiscite among the workers of the
Caloocan shops may be adverse to the formation of a separate unit, in which event,
as stated in the appealed order, all questions raised in this case would be rendered
moot and academic.
Appellant contends that the application of the "Globe doctrine" is not
warranted because the workers of the Caloocan shops do not require different skills
from the rest of the workers in the Mechanical Department of the Railway Company.
This question is primarily one of facts. The Industrial Court has found that there is a
basic difference, in that those in the Caloocan shops not only have a community of
interest and working conditions but perform major repairs of railway rolling stock,
using heavy equipment and machineries found in said shops, while the others only
perform minor repairs. It is easy to understand, therefore, that the workers in the
Caloocan shops require special skill in the use of heavy equipment and machinery
sufficient to set them apart from the rest of the workers. In addition, the record shows
that the collective bargaining agreements negotiated by the appellant union have
been in existence for more than two (2) years; hence, such agreements can not
constitute a bar to the determination, by proper elections, of a new bargaining
representative (PLDT Employees' Union vs. Philippine Long Distance Telephone
Co.)
As to the charge that some of the members of the appellee, "Samahan Ng
Manggagawa", are actually supervisors, it appears that the question of the status of
such members is still pending final decision; hence, it would not constitute a legal
obstacle to the holding of the plebiscite. At any rate, the appellant may later question
whether the votes of those ultimately declared to be supervisors should be counted.
G.R. No. 102130 July 26, 1994
GOLDEN FARMS v SECRETARY OF LABOR
Facts:
On February 27, 1992, private respondent Progressive Federation of Labor
(PFL) filed a petition before the Med-Arbiter praying for the holding of a
certification election among the monthly paid office and technical rank-and-file
employees of petitioner Golden Farms. Petitioner moved to dismiss the petition
because there was already an existing collective bargaining agreement between the
rank-and-file employees represented by the National Federation of Labor (NFL) and
petitioner. Respondent PFL opposed petitioner's Motion to Dismiss. It countered that
the monthly paid office and technical employees should be allowed to form a
separate bargaining unit because they were expressly excluded from coverage in the
Collecting Bargaining Agreement (CBA) between petitioner and NFL.
33
Issue: WON petitioner's monthly paid rank-and file employees can constitute a
bargaining unit separate from the existing bargaining unit of its daily paid rank-and-
file employees.
Held: Yes.
The monthly paid office and technical rank-and-file employees of petitioner
Golden Farms enjoy the constitutional right to self-organization and collective
bargaining. A "bargaining unit" has been defined as a group of employees of a given
employer, comprised of all or less than all of the entire body of employees, which the
collective interest of all the employees, consistent with equity to the employer,
indicate to be the best suited to serve the reciprocal rights and duties of the parties
under the collective bargaining provisions of the law. The community or mutuality of
interest is therefore the essential criterion in the grouping. "And this is so because
'the basic test of an asserted bargaining unit's acceptability is whether or not it is
fundamentally the combination which will best assure to all employees the exercise
of their collective bargaining rights.'
In the case at bench, the evidence established that the monthly paid rank-
and-file employees of petitioner primarily perform administrative or clerical work. In
contradistinction, the petitioner's daily paid rank-and-file employees mainly work in
the cultivation of bananas in the fields. It is crystal clear the monthly paid rank-and-
file employees of petitioner have very little in common with its daily paid rank-and-
file employees in terms of duties and obligations, working conditions, salary rates,
and skills. To be sure, the said monthly paid rank-and-file employees have even been
excluded from the bargaining unit of the daily paid rank-and-file employees. This
dissimilarity of interests warrants the formation of a separate and distinct bargaining
unit for the monthly paid rank-and-file employees of the petitioner. To rule otherwise
would deny this distinct class of employees the right to self-organization for
purposes of collective bargaining. Without the shield of an organization, it will also
expose them to the exploitations of management.
*Note
It was petitioner company that filed the motion to dismiss the petition for
election. The general rule is that an employer has no standing to question a
certification election since this is the sole concern of the workers. 11 Law and policy
demand that employers take a strick, hands-off stance in certification elections. The
bargaining representative of employees should be chosen free from any extraneous
 Magsino Labor Relations Digests, Arbues 2019
influence of management. A labor bargaining representative, to be effective, must
owe its loyalty to the employees alone and to no other.
G.R. No. 85343 June 28, 1989 PHILTRANCO SERVICE ENTERPRISES v
s BUREAU OF LABOR RELATIONS
Facts:
On February 15, 1988, the Kapisanan ng mga Kawani, Assistant,
Manggagawa at Konpidensyal sa Philtranco (KASAMA KO), a registered labor
organization filed a petition for certification election with DOLE seeking to represent
all professional, technical, administrative, and confidential employees personnel of
respondent at its establishments in Luzon, Visayas and Mindanao for purposes of
collective bargaining. KASAMA KO alleged that they were always expressly
excluded from participating in the certification election conducted among the rank
and file employees (drivers, conductors, coach drivers, coach stewards, and
mechanics) of respondent and are excluded from the bargaining unit covered by the
CBA between respondent and its rank and file employees. In addition, there exist
substantial differences in the terms and conditions of employment between the
above-mentioned employees, hence, the former are covered by another appropriate
bargaining unit which is separate and distinct from that of the rank and file
employees of respondent.
On February 24, 1988, the National Mines and Allied Workers Union
(NAMAWU-MIF) filed a motion for intervention alleging that it is the bargaining
agent of the workers at Philtranco and as such it has a substantial interest in the
outcome of the petition.
Issue: WON KASAMA KO may represent all professional, technical, administrative,
and confidential employees personnel.
Held: No.
34
The Labor Code recognizes 2 principal groups of employees, namely, the
managerial and the rank and file groups.
Members of the KASAMA KO who are professional, technical,
administrative and confidential personnel of PHILTRANCO performing managerial
functions are not qualified to join, much less form a union. They were expressly
excluded within the operational ambit of the bargaining unit for the simple reason
that under the law, managers are disqualified to be members of a labor organization.
The employees of Philtranco have been appraised and their functions
evaluated. Managers by any name may not join the rank and file union. On the other
hand, those who are rank and file workers may join the existing bargaining unit
instead of organizing another bargaining unit and compelling the employer to deal
with it.
*One-union, one-company
We see no need for the formation of another union in PHILTRANCO. The
qualified members of the KASAMA KO may join the NAMAWU-MIF if they want
to be union members, and to be consistent with the one-union, one-company policy
of the DOLE.
It is natural in almost all fairly sized companies to have groups of workers
discharging different functions. No company could possibly have all employees
performing exactly the same work. Variety of tasks is to be expected. It would not be
in the interest of sound labor-management relations if each group of employees
assigned to a specialized function or section would decide to break away from their
fellow-workers and form their own separate bargaining unit. We cannot allow one
unit for typists and clerks, one unit for accountants, another unit for messengers and
drivers, and so on in needless profusion. Where shall the line be drawn? The
questioned decision of the public respondent can only lead to confusion, discord and
labor strife.
The respondents state that this case is an exception to the general rule
considering that substantial differences exist between the office employees or
professional, technical, administrative and confidential employees vis-a-vis the field
workers or drivers, conductors and mechanics of the petitioner. Against this
contention, we find that the "substantial differences" in the terms and conditions of
employment between the private respondent's members and the rest of the company's
rank and file employees are more imagined than real. We agree with the petitioner
 Magsino Labor Relations Digests, Arbues 2019
that the differences alleged are not substantial or significant enough to merit the
formation of another union.
SAN MIGUEL UNION VS. LAGUESMA G.R. No. 110399 August 15, 1997
Facts:
Petitioner union filed before DOLE a Petition for Direct Certification or
Certification Election among the supervisors and exempt employees of the SMC
Magnolia Poultry Products Plants of Cabuyao, San Fernando and Otis.
Med-Arbiter Danilo L. Reynante issued an Order ordering the conduct of
certification election among the abovementioned employees of the different plants as
one bargaining unit.
San Miguel Corporation filed a Notice of Appeal with Memorandum on
Appeal, pointing out, among others, the Med-Arbiter’s error in grouping together all
three (3) separate plants, into one bargaining unit, and in including supervisory levels
3 and above whose positions are confidential in nature.
The public respondent, Usec Laguesma, granted respondent company’s Appeal and
ordered the remand of the case to the Med-Arbiter of origin for determination of the
true classification of each of the employees sought to be included in the appropriate
bargaining unit.
Upon petitioner-union’s motion, Undersecretary Laguesma granted the
reconsideration prayed for and directed the conduct of separate certification elections
among the supervisors ranked as supervisory levels 1 to 4 (S1 to S4) and the exempt
employees in each of the three plants at Cabuyao, San Fernando and Otis.
Issue: WON the employees of the three plants constitute an appropriate single
bargaining unit.
35
Held: Yes. The fact that the three plants are located in three different places, namely,
in Cabuyao, Laguna, in Otis, Pandacan, Metro Manila, and in San Fernando,
Pampanga is immaterial. Geographical location can be completely disregarded if the
communal or mutual interests of the employees are not sacrificed.
An appropriate bargaining unit may be defined as “a group of employees of
a given employer, comprised of all or less than all of the entire body of employees,
which the collective interest of all the employees, consistent with equity to the
employer, indicate to be best suited to serve the reciprocal rights and duties of the
parties under the collective bargaining provisions of the law.”
A unit to be appropriate must effect a grouping of employees who have
substantial, mutual interests in wages, hours, working conditions and other subjects
of collective bargaining.
G.R. No. 77395 November 29, 1988
BELYCA CORPORATION v DIR. CALLEJA
Facts:
On June 3, 1986, private respondent Associated Labor Union (ALU)-TUCP
filed a petition for direct certification as the sole and exclusive bargaining agent of
all the rank and file employees/workers of Belyca Corporation (Livestock and Agro-
Division). The collective bargaining unit sought for the issuance of an order
authorizing the immediate holding of a certification election.
Respondent employer alleged that due to the nature of its business, very few
of its employees are permanent, the overwhelming majority of which are seasonal
and casual and regular employees and that 138 employees who signed were no
longer part of the corporation. Petitioner contends that the bargaining unit must
include all the workers in its integrated business concerns ranging from piggery,
poultry, to supermarts and cinemas so as not to split an otherwise single bargaining
unit into fragmented bargaining units. LA granted the petition.
Issue: WON THE PROPOSED BARGAINING UNIT IS AN APPROPRIATE
BARGAINING UNIT.
 Magsino Labor Relations Digests, Arbues 2019
Held: Yes. Art. 256 does not specifically define what constitutes an appropriate
collective bargaining unit. There are 4 factors to be considered in determining the
proper bargaining unit to wit: (1) will of employees (Glove Doctrine); (2) affinity
and unity of employee's interest, such as substantial similarity of work and duties or
similarity of compensation and working conditions; (3) prior collective bargaining
history; and (4) employment status, such as temporary, seasonal and probationary
employees".
The Court stressed the importance of the fourth factor and sustained the trial
court's conclusion that two separate bargaining units should be formed in dealing
with respondent company, one consisting of regular and permanent employees and
another consisting of casual laborers or stevedores. Otherwise stated, temporary
employees should be treated separately from permanent employees. But more
importantly, this Court laid down the test of proper grouping, which is community
and mutuality of interest.
Where the employment status was not at issue but the nature of work of the
employees concerned; the Court stressed the importance of the second factor
otherwise known as the substantial-mutual-interest test.
It is beyond question that the employees of the livestock and agro division
of petitioner corporation perform work entirely different from those performed by
employees in the supermarts and cinema. Among others, the noted differences are:
their working conditions, hours of work, rates of pay, including the categories of
their positions and employment status. As stated by petitioner corporation in its
position paper, due to the nature of the business in which its livestock-agro division
is engaged very few of its employees in the division are permanent, the
overwhelming majority of which are seasonal and casual and not regular employees.
G.R. No. 92357 July 21, 1993 PHIL. SCOUT VETERANS SECURITY
AND INVESTIGATION AGENCY (PSVSIA) v SECRETARY
Facts:
On April 6, 1989, private respondent labor union, PGA Brotherhood
Association - Union of Filipino Workers (UFW), hereinafter referred to as "the
Union" filed a petition for Direct Certification/Certification Election among the rank
and file employees of Philippine Scout Veterans Security, GVM Security and
36
Abaquin Security. These three agencies were collectively referred to by private
respondent Union as the "PGA Security Agency. On April 11, 1986, petitioners filed
a single comment alleging therein that the said three security agencies have separate
and distinct corporate personalities.
Issue: WON the employer may intervene in the certification election.
Held: No. Except where the employer has to file a petition for certification election
pursuant to Article 258 because of a request to bargain collectively, it has nothing to
do with a certification election which is the sole concern of the workers. Its role in a
certification election is a mere by-stander. It has no legal standing in a certification
election as it cannot oppose the petition or appeal the Med-Arbiter's orders related
thereto. An employer that involves itself in a certification election lends suspicion to
the fact that it wants to create a company union.
G.R. No. 101730. June 17, 1993 PT&T v LAGUESMA and PT&T
SUPERVISORY EMPLOYEES UNION-APSOTEU
Facts:
PT&T Supervisory Employees Union- APSOTEU (UNION, for brevity)
filed a petition before the Industrial Relations praying for the holding of a
certification election among the supervisory employees of petitioner Philippine
Telegraph & Telephone Corporation (PT&T, for brevity). On 29 October 1990,
UNION amended its petition to include the allegation that PT&T was an
unorganized establishment employing roughly 100 supervisory employees from
whose ranks will constitute the bargaining unit sought to be established. On 22
November 1990, PT&T moved to dismiss the petition for certification election on the
ground that UNION members were performing managerial functions and thus were
not merely supervisory employees. Moreover, PT&T alleged that a certified
bargaining unit already existed among its rank-and-file employees which barred the
filing of the petition.
Issue: Can a petition for certification election filed by supervisory employees of an
unorganized establishment — one without a certified bargaining agent — be
dismissed on the ground that these employees are actually performing managerial
functions?
Held: No.
 Magsino Labor Relations Digests, Arbues 2019
The applicable provision of law in the case at bar is Art. 257 of the Labor
Code. The supervisor employees of PT&T did not yet have a certified bargaining
agent to represent them at the time the UNION, which is a legitimate labor
organization duly registered with the Department of Labor and Employment, filed
the petition for certification election. Since no certified bargaining agent represented
the supervisory employees, PT&T may be deemed an unorganized establishment
within the purview of Art. 257 of the Labor Code. The fact that petitioner's rank-and-
file employees were already represented by a certi􀀼ed bargaining agent does not
make PT&T an organized
establishment vis-a-vis the supervisory employees. After all, supervisory employees
are "not eligible for membership in a labor organization of the rank-and-file
employees." Consequently, the Med-Arbiter, as sustained by public respondent,
committed no grave abuse of discretion in granting the petition for certification
election among the supervisory employees of petitioner PT&T because Art. 257 of
the Labor Code provides that said election should be automatically conducted upon
filing of the petition.
PT&T did not possess the legal personality to file a motion to dismiss the
petition for certification election even if based on the ground that its supervisory
employees are in reality managerial employees. It is well-settled that an employer
has no standing to question a certification election since this is the sole concern of
the workers. The only exception to this rule is where the employer has to file the
petition for certification election itself pursuant to Art. 258 of the Labor Code
because it was requested to bargaining collectively. But, other than this instance, the
choice of a collective bargaining agent is purely the internal affair of labor. What
PT&T should have done was to question the inclusion of any disqualified employee
in the certification election during the exclusion-inclusion proceedings before the
representation officer. Indeed, this is precisely the purpose of the exclusion-inclusion
proceedings, i.e., to determine who among the employees are entitled to vote and be
part of the bargaining unit sought to be certified.
37
G.R. No. 116172. October 10, 1996. SAN MIGUEL FOODS, INC.-CEBU
B-MEG FEED PLANT v LAGUESMA and IBM
Facts:
On September 1993, a petition for certification election among the monthly-
paid employees of the San Miguel Foods, Inc.-Cebu B-Meg Feeds Plant was filed by
private respondent labor federation Ilaw at Buklod ng Manggagawa (IBM, for
brevity) before Med- Arbiter alleging, inter alia, that it is a legitimate labor
organization duly registered with DOLE. Petition granted.
Issue: WON IBM was a legitimate labor organization.
Held:
It is important to determine whether or not a particular labor organization is
legitimate since legitimate labor organizations have exclusive rights under the law
which cannot be exercised by nonlegitimate unions, one of which is the right to be
certi􀀼ed as the exclusive representative of all the employees in an appropriate
collective bargaining unit for purposes of collective bargaining. These rights are
found under Article 242 of the Labor Code.
Ordinarily a labor organization attains the status of legitimacy only upon the
issuance in its name of a Certificate of Registration by the BLR pursuant to Articles
234 and 235 of the Labor Code. The foregoing procedure is not the only way by
which a labor union may become legitimate, however. When an unregistered union
becomes a branch, local or chapter of a federation, some of the aforementioned
requirements for registration are no longer required. Section 3, Rule II, Book V of
the Implementing Rules of the Labor Code governs the procedure for union
affiliation. Paragraph (a) refers to a local or chapter of a federation which did not
undergo the rudiments of registration while paragraph (b) refers to an independently
registered union which affiliated with a federation. Implicit in the foregoing
differentiation is the fact that a local or chapter need not be independently registered.
By force of law (in this case, Article 212 [h]), such local or chapter becomes a
legitimate labor organization upon compliance with the aforementioned provisions of
Section 3 (a) and (e), without having to be issued a Certificate of Registration in its
favor by the BLR. Absent compliance with these mandatory requirements, the local
or chapter does not become a legitimate labor organization. Corollarily, the
satisfaction of all these requirements by the local or chapter shall vest upon it the
status of legitimacy with all its concomitant statutory privileges, one of which is the
right to be certified as the exclusive representative of all the employees in an
appropriate bargaining unit.
 Magsino Labor Relations Digests, Arbues 2019
Petitioner SMFI does not dispute the fact that IBM at SMFI has complied
with the second set of requirements, i.e., constitution, by-laws, et al. What is
controverted is the non-compliance with the requirement as to the charter certificate
which must be submitted to the BLR within 30 days from its issuance by the labor
federation. While the presence of a charter certificate is conceded, petitioner
maintains that the validity and authenticity of the same cannot yet be ascertained as it
is still not known who is the legitimate and authorized representative of the IBM
Federation who may validly issue said charter certificate in favor of its local, IBM at
SMFI. According to petitioner, there are 2 contending sets of officers of the IBM
Federation at the time the charter certi􀀼cate was issued in favor of IBM at SMFI, the
faction of Mr. Severino O. Meron and that of Mr. Edilberto B. Galvez. We agree
with the position of the public respondent and the Solicitor General in upholding the
legitimate status of IBM at SMFI. In addition private respondent's Comment to this
petition indicates that in the election of o􀀼cers held to determine the representatives
of IBM, the faction of Mr. Meron lost to the group of Mr. Edilberto Galvez, and the
latter was acknowledged as the duly elected IBM National President. Thus, the
authority of Mr. Galvez to sign the charter certificate of IBM at SMFI, as President
of the IBM Federation, can no longer be successfully questioned.
*CHARTER CERTIFICATE; CERTIFICATION UNDER OATH BY THE
ORGANIZATION'S SECRETARY AND PRESIDENT NOT ESSENTIAL FOR
VALIDITY THEREOF
Petitioner next asseverates that the Charter Certificate submitted by the
private respondent was defective in that it was not certified under oath and attested to
by the organization's secretary and President. Petitioner is grasping at straws. Under
our ruling in the Progressive Development Corporation case, what is required to be
certified under oath by the secretary or treasurer and attested to by the local's
president are the "constitution and by-laws, a statement on the set of officers, and the
books of accounts" of the organization. The charter certificate issued by the mother
union need not be certified under oath by the secretary or treasurer and attested to by
the local's president.
*CERTIFICATION ELECTION; ROLE OF EMPLOYER IS THAT OF A
MERE BY-STANDER THEREIN; Exception
In any case, this Court notes that it is petitioner, the employer, which has
offered the most tenacious resistance to the holding of a certification election among
its monthly-paid rank-and-file employees. This must not be so, for the choice of a
collective bargaining agent is the sole concern of the employees. The only exception
to this rule is where the employer has to file the petition for certification election
38
pursuant to Article 258 of the Labor Code because it was requested to bargain
collectively, which exception finds no application in the case before us. Its role in a
certification election has aptly been described as that of a mere by-stander. It has no
legal standing in a certification election as it cannot oppose the petition or appeal the
Med-Arbiter's orders related thereto. An employer that involves itself in a
certification election lends suspicion to the fact that it wants to create a company
union. This Court should be the last agency to lend support to such an attempt at
interference with a purely internal affair of labor. While employers may rightfully be
notified or informed of petitions of such nature, they should not, however, be
considered parties thereto with the concomitant right to oppose it. Sound policy
dictates that they should maintain a strictly hands-off policy.
G.R. No. L-41937. July 6, 1976 FOITAF-ASSOCIATED ANGLO
AMERICAN CHAPTER vs Director CARMELO NORIEL
Facts:
Private respondent union filed a verified petition for certification election
among the employees and workers of the Company alleging that more than thirty
percent of its rank and file workers support the same. The med-arbiter assigned to the
case ordered that an election be conducted. The petitioner union appealed from said
order on the sole ground that there was failure to comply with the 39% requirement
alleging that there had been retractions of some employees without however
presenting proofs of the same. The BLR issued a resolution sustaining the previous
order of the med-arbiter for a certification election. A MR of said resolution was
filed, opposed and denied. Hence the petition for certiorari labeling respondent
Director's order for the holding of a certification election, despite the alleged failure
to comply with the 30% requirement of the Labor Code, as arbitrary and improvident
exercise of authority.
Issue: WON the certification election was proper
Held: Yes.
Where the verified petition by private respondent labor union had the
support of more than thirty percent of the rank and file employees, it becomes, in the
language of the new Labor Code, "mandatory for the Bureau to conduct a
certification election for the purpose of determining the representatives of the
employees in the appropriate bargaining unit and certify the winner as the exclusive
collective bargaining representative of all the employees in the unit." It would run
counter to the law then, with the duty thus imposed on respondent Director, to
ignore the demand that it be held.
 Magsino Labor Relations Digests, Arbues 2019
No grave abuse of discretion, much less arbitrariness could be imputed to
the rejection of the plea of petition to set aside the challenged order for the holding
of a certification election inspite of the alleged failure to comply with the 30%
requirement of the New Labor Code. The alleged retraction on the part of a number
of employees involved resulting in the requirement of the law not being met is highly
dubious in character. The 13 employees who allegedly retracted were not even
presented before the med-arbiter and the alleged additional 45 employees who
supposedly likewise changed their minds, were also not called to testify to the effect,
petitioner satisfy itself with their being named in an a􀀼davit executed by its
presented. There is no justification for sustaining petitioner's stand. To do so would
be to disregard previous authoritative doctrines on the matter involving the basic
constitutional of freedom of association, made even more meaningful in labor
matters by the statutory device of certification election.
*INDUSTRIAL PEACE ACT AND THE NEW LABOR CODE STRESS
EMPLOYEES RIGHT TO SELF-ORGANIZATION. —
There is in the Industrial Peace Act this categorical provision on the right of
employees to self-organization: "Employees shall have the right to self-organization
and to form, join or assist labor organization of their own choosing for the purpose of
collective bargaining through representatives of their own choosing and to engage in
concerted activities for the purpose of collective bargaining and other mutual aid or
protection." (Section 3 of RA 875) The new Labor Code (PD 442, 1974) is equally
explicit on the matter. Thus: "The State shall assure the rights of workers to
selforganization, collective bargaining, security of tenure and just and humane
condition of work."
*HOLDING OF A CERTIFICATION ELECTION TO DETERMINE
REPRESENTATIVE UNION. —
It is of the very essence of the regime of industrial democracy sought to be
attained through the collective bargaining process that there be no obstacle to the
freedom identified with the exercise of the right to selforganization. Labor is to be
represented by a union that can express its collective will. In the event, and this is
usually the case, that there is more than one such group fighting for that privilege, a
certification election must be conducted. The institution of collective bargaining is,
to recall Cox, a prime manifestation of industrial democracy at work. The 2 parties to
the relationship, labor and management, make their own rules by coming to terms.
That is to govern themselves in matters that really count. As labor, however, is
composed of a number of individuals, it is indispensable that they be represented by
39
a labor organization of their choice. Thus may be discerned how crucial is a
certification election.
Certification election is the fairest and most effective way of determining
which labor organization can duly represent the working force. It is a fundamental
postulate that the will of the majority, if given expression in an honest election with
freedom on the part of the voters to make their choice, is controlling. No better
device can assure the institution of industrial democracy with the two parties to a
business enterprise, management and labor, establishing a regime of self-rule.
G.R. No. L-33705. April 15, 1977. AIR LINE PILOTS ASSOCIATION
OF THE PHILIPPINES (GASTON GROUP) v CIR
Facts:
G.R. No. L-33705 April 15, 1977
AIR LINE PILOTS ASSOCIATION OF THE PHILIPPINES (GASTON GROUP),
petitioner, 
vs.
THE COURT OF INDUSTRIAL RELATIONS and AIR LINES
PILOTS ASSOCIATION OF THE PHILIPPINES (GOMEZ GROUP), respondents
Facts:
These are two petitions for certiorari (L-33705 and L-35206), consolidated
for purposes of decision because they involve more or less the same parties and
interlocking issues.
L-33705
On January 2, 1971, the ALPAP, represented by Capt. Gomez, who claimed
to be its president, filed a petition with CIR praying for certification as the sole and
exclusive collective bargaining representative of "all the pilots now under
employment by the Philippine Air Lines, Inc, and are on active flight and/or
operational assignments." This was opposed by Capt. Gaston who also claimed to be
the president alleging that CIR had no jurisdiction over the subject matter “because a
certification proceeding in the Court of Industrial Relations is not the proper forum
for the adjudication of the question as to who is the lawful president of a legitimate
labor organization”. The Judge thereafter ruled in favor of Gomez.
ALPAP then held a meeting where 221 of the 270 members adopted a
resolution amending ALPAP’s constitution and by-laws by providing in a new
section thereof that —
“Any active member who shall be forced to retire or forced to resign or otherwise
terminated for union activities as solely determine' by the Association shall have the
option to either continue to be and remain as an active member in good standing or
to resign in writing his active membership with the Association.”
 Magsino Labor Relations Digests, Arbues 2019
Gaston then said that the amendment was adopted "In anticipation on the
fact that they may be forced to resign or retire because of their 'union activities.' A
majority of ALPAP members filed letters of retirement/ resignation from PAL.
Thereafter, an election for officers was held resulting to the election of Gaston as
president. Those however, who did not tender resignation voted for Gomez as
president.
On June 3, 1971, ALPAP (Gaston) filed an opposition in Case 101-IPAB to
an urgent ex parte motion of the PAL to enjoin the members of ALPAP from retiring
or resigning en masse. It claimed that they sought for reinstatement and that their
filing of resignations is a valid exercise of their constitutional rights and they could
not be deprived of their benefits. The opposition however was denied.
L-35206
A labor dispute was certified by the President of the Philippines between
ALPAP and PAL and was assigned to Judge Paredes. After conferring with the
parties, the Judge issued a return-to-work order, which ordered ALPAP members to
return to work and ordered PAL not to suspend or dismiss any employee as result of
the strike and failure to comply to the said order shall result to contempt of court.
The employees then returned to work but Gaston, however, did not and it resulted to
his termination.
PAL then filed an urgent motion with the CIR to enjoin the members of
ALPAP from proceeding with their intention to resign/ retire en masse. The judge
then issued an order to ALPAP not to strike otherwise they will be terminated.
ALPAP then filed an MR alleging that such order subjects them to involuntary
servitude. Their MR was denied.
It then resulted to mass resignation and PAL accepted such and the caveat
pilots who retired were no longer entitled to benefits as the Pilots acts constituted a
violation of the court’s order not to strike. Gomez then filed a petition to allow him
to represent ALPAP since those who voted for Gaston has already resigned. Gaston
and the pilots who resigned then prayed to the CIR that they be reinstated. This was
opposed by Gomez and PAL but the judge ordered a dismissal of their opposition
and ordered the reinstatement. The CIR however reversed the order of Judge
Paredeson the ground that the question of the employee status of the pilots who were
seeking reinstatement with PAL has already been raised squarely in Case 2939-MC
and resolved by the said tribunal found that the said pilots have already lost their
employee status as a consequence of their resignations and/or retirement from PAL
which had been duly accepted by the latter.
40
Issue: WON the authorization given by the industrial court to ALPAP (Gomez), in a
certification proceeding to take over the corporate name, office and funds of ALPAP
is valid.
Held:
No. We have made a careful examination of the records of L-33705 and we
find the adoption of the resolution introducing the questioned amendment to be
substantial compliance with the ALPAP constitution and by-law. Indeed, there is no
refutation of the act that 221out of the 270 members of ALPAP did cast their votesin
favor of the said amendment on October 30, 1970 at the ALPAP general membership
meeting.
Their Court cannot likewise subscribe to the restrictive interpretation made
by the court below of the term "labor organization," which Section 2(e) of R.A. 875
defines as any union or association of employees which exist, in whole or in part, for
the purpose of the collective bargaining or dealing with employers concerning terms
and conditions of employment." The absence of the condition that the court would
attach to the statutory concept of a labor organization, as being limited to the
employees of particular employer, is quite evident from the law. The emphasis of
Industrial Peace Act is clearly on the purposes for which a union or association of
employees established rather than that membership therein should be limited only to
the employees of a particular employer. Trite to say, under Section 2(h) of R.A 875
"representative" is define as including "a legitimate labor organization or any officer
or agent of such organization, whether or not employed by the employer or employee
whom he represents." It cannot be overemphasized likewise that labor dispute can
exist "regardless of whether the disputants stand in the proximate relation of
employer and employee. (Section 2(j), R.a. 875).
There is, furthermore, nothing in the constitution and by-laws of ALPAP
which indubitably restricts membership therein to PAL pilots alone. 1 Although
according to ALPAP (Gomez) there has never been an instance when a non-PAL
pilot became a member of ALPAP, the complete lack of any such precondition for
ALPAP membership cannot but be interpreted as an unmistakable authority for the
association to accept pilots into its fold though they may not be under PAL's employ.
The fundamental assumptions relied upon by the industrial court as bases
for authorizing ALPAP (Gomez) to take over the office and funds of ALPAP being,
in this Court's opinion, erroneous, and, in the absence of any serious dispute that on
December 18-22, 1970 Felix C. Gaston, and four other pilots, were elected by the
required majority of ALPAP members as officers of their association, this Court
hereby rules that the mentioned authorization to ALPAP (Gomez) to take over the
office, funds and name of ALPAP was done with grave abuse of discretion.
 Magsino Labor Relations Digests, Arbues 2019
G.R. No. 84433. June 2, 1992
ALEXANDER REYES v CRESENCIANO B. TRAJANO
Facts:
A certification election was held among the employees of Tri-Union
Industries Corporation. The competing unions were the Tri-Union Employees
Union-Organized Labor Association in Line Industries and Agriculture (TUEU-
OLALIA), and Trade Union of the Philippines and Allied Services (TUPAS). Of the
348 workers initially deemed to be qualified voters, only 240 actually took part in the
election, conducted under the supervision of the BLR. Among the 240 employees
who cast their votes were 141 members of the INC. TUEU-OLALIA garnished the
most votes sans the INC votes.
The challenged votes were those cast by the 141 INC members. They were
segregated and excluded from the final count in virtue of an agreement between the
competing unions, reached at the pre-election conference that the INC members
should not be allowed to vote "because they are not members of any union and
refused to participate in the previous certification elections."
The INK employees promptly made known their protest to the exclusion of
their votes. They filed a petition to cancel the election alleging that it "was not fair"
and the result thereof did "not reflect the true sentiments of the majority of the
employees." TUEU-OLALIA opposed the petition. It contended that the petitioners
"do not have legal personality to protest the results of the election," because "they are
not members of either contending unit, but of the INC" which prohibits its followers,
on religious grounds, from joining or forming any labor organization.
Issue: WON INC votes must be counted despite not being part of a labor union.
Held: Yes.
The respondents' argument that the petitioners are disqualified to vote
because they "are not constituted into a duly organized labor union" — "but
members of the INC which prohibits its followers, on religious grounds, from joining
or forming any labor organization" — and "hence, not one of the unions which vied
for certification as sole and exclusive bargaining representative," is specious. Neither
law, administrative rule nor jurisprudence requires that only employees affiliated
with any labor organization may take part in a certification election. On the contrary,
the plainly discernible intendment of the law is to grant the right to vote to all bona
fide employees in the bargaining unit, whether they are members of a labor
organization or not. In a certification election all rank-and-file employees in the
41
appropriate bargaining unit are entitled to vote. This principle is clearly stated in Art.
255 of the Labor Code which states that the 'labor organization designated or
selected by the majority of the employees in an appropriate bargaining unit shall be
the exclusive representative of the employees in such unit for the purpose of
collective bargaining.' Collective bargaining covers all aspects of the employment
relation and the resultant CBA negotiated by the certified union binds all employees
in the bargaining unit. Hence, all rank-and-file employees, probationary or
permanent, have a substantial interest in the selection of the bargaining
representative. The Code makes no distinction as to their employment status as basis
for eligibility in supporting the petition for certification election. The law refers to
'all' the employees in the bargaining unit. All they need to be eligible to support the
petition is to belong to the 'bargaining unit.
Neither does not the contention that petitioners should be denied the right to
vote because they "did not participate in previous certification elections in the
company for the reason that their religious beliefs do not allow them to form, join or
assist labor organizations," persuade acceptance. No law, administrative rule or
precedent prescribes forfeiture of the right to vote by reason of neglect to exercise
the right in past certification elections. In denying the petitioners' right to vote upon
these egregiously fallacious grounds, the public respondents exercised their
discretion whimsically, capriciously and oppressively and gravely abused the same.
The purpose of a certification election is precisely the ascertainment of the
wishes of the majority of the employees in the appropriate bargaining unit: to be or
not to be represented by a labor organization, and in the affirmative case, by which
particular labor organization. If the results of the election should disclose that the
majority of the workers do not wish to be represented by any union, then their wishes
must be respected, and no union may properly be certified as the exclusive
representative of the workers in the bargaining unit in dealing with the employer
regarding wages, hours and other terms and conditions of employment. The minority
employees — who wish to have a union represent them in collective bargaining —
can do nothing but wait for another suitable occasion to petition for a certification
election and hope that the results will be different. They may not and should not be
permitted, however, to impose their will on the majority — who do not desire to
have a union certified as the exclusive workers' benefit in the bargaining unit - upon
the plea that they, the minority workers, are being denied the right of self
organization and collective bargaining.
G.R. No. 92391. July 3, 1992 PHILIPPINE FRUITS AND VEGETABLE
INDUSTRIES v HON. RUBEN D. TORRES
 Magsino Labor Relations Digests, Arbues 2019
Facts: On December 16, 1988, a certification election filed by the Trade Union of the
Philippines and Allied Services (TUPAS). Said order directed the holding of a
certification election among the regular and seasonal workers of the Philippine Fruits
and Vegetables, Inc. After a series of pre-election conferences, all issues relative to
the conduct of the certification election were threshed out except that which pertains
to the voting qualifications of the 194 workers enumerated in the lists of qualified
voters submitted by TUPAS. However, Med Arbiter ordered the opening of their
votes in order to attain majority. On February 23, 1989, petitioner formally filed a
Protest.
Issue: WON the protest was filed within the reglementary period.
Held: No. The records before Us quite clearly disclose the fact that petitioner, after
filing a manifestation of protest on December 16, 1988, election day, only formalized
the same on February 20, 1989, or more than 2 months after the close of election
proceedings. We are not persuaded by petitioner's arguments that election
proceedings include not only casting of votes but necessarily includes canvassing
and appreciation of votes cast and considering that the canvassing and appreciation
of all the votes cast were terminated only on February 16, 1989, it was only then that
the election proceedings are deemed closed, and thus, when the formal protest was
filed on February 20, 1989, the five-day period within which to file the formal
protest still subsisted and its protest was therefore formalized within the
reglementary period.
As explained correctly by the Solicitor General, the phrase "close of
election proceedings" as used in Sections 3 and 4 of the pertinent Implementing
Rules refers to that period from the closing of the polls to the counting and tabulation
of the votes as it could not have been the intention of the Implementing Rules to
include in the term "close of the election proceedings" the period for the final
determination of the challenged votes and the canvass thereof, as in the case at bar,
which may take a very long period. Thus, if a protest can be formalized within five
days after a final determination and canvass of the challenged votes have been made,
it would result in an undue delay in the affirmation of the employees' expressed
choice of a bargaining representative.
Petitioner would likewise bring into issue the fact that the notice of
certification election was posted only on December 12, 1988 or four days before the
scheduled elections on December 16, 1988, instead of the five-day period as required
under Section 1 of Rule VI, Book V of the Implementing Rules. But it is not
disputed that a substantial number, or 291 of 322 qualified voters, of the employees
concerned were informed, thru the notices thus posted, of the elections to be held on
42
December 16, 1988, and that such employees had in fact voted accordingly on
election day. Viewed thus in the light of the substantial participation in the elections
by voter-employees, and further in the light of the all-too settled rule that in
interpreting the Constitution's protection to labor and social justice provisions and
the labor laws and rules and regulations implementing the constitutional mandate,
the SC adopts the liberal approach which favors the exercise of labor rights, We find
the lack of one day in the posting of notices insignificant, and hence, not a
compelling reason at all in nullifying the elections.
*EMPLOYEES IMPROPERLY LAID-OFF; ELIGIBLE TO VOTE
.
Employees who have been improperly laid off but who have a present,
unabandoned right to or expectation of reemployment, are eligible to vote in
certification elections. Thus if the dismissal is under litigation the employees
concerned could still qualify to vote in the elections.
*CERTIFICATION ELECTION; PROTEST IN THE PROCEEDINGS
A close reading of Sections 3 and 4, Rule VI, Book V of the Implementing
Rules of the Labor Code, provides: "Section 3: The Representation officer may rule
on any on-the-spot question arising from the conduct of the election. The interested
party may however, file a protest with the representation officer before the close of
the proceedings. "Protests not so raised are deemed waived. Such protest shall be
contained in the minutes of the proceedings." "Section 4: Where the protest is
formalized before the med-arbiter within 5 days after the close of the election
proceedings, the med-arbiter shall decide the same within 20 working days from the
date of formalization. If not formalized within the prescribed period, the protest shall
be deemed dropped. The decision may be appealed to the Bureau in the same manner
and on the same grounds as provided under Rule V."
The following requirements in order that a protest filed thereunder would
prosper, to wit: (1) The protest must be filed with the representation officer and made
of record in the minutes of the proceedings before theclose of election proceedings,
and (2) The protest must be formalized before the Med- Arbiter within 5 days after
the close of the election proceedings.
G.R. No. 143428. June 25, 2001
SANDOVAL SHIPYARDS v PRISCO PEPITO
Facts:
Sometime in 1992, the National Federation of Labor (NFL) filed with
DOLE a petition for certification election, alleging that its members, who included
 Magsino Labor Relations Digests, Arbues 2019
private respondents Prisco Pepito, et al., were regular employees of petitioner
Sandoval Shipyards, Inc. (SSI). Finding that the NFL members were rank-and-file
employees of SSI, the Med-Arbiter issued an order directing that a certification
election be held. However, in a Resolution, then Undersecretary Bienvenido
Laguesma reversed the Med-Arbiter's Order and ruled that there was a valid
subcontracting agreement between SSI and its subcontractors, and that no employer-
employee relationship existed between SSI and private respondents, since the latter
were the employees of the subcontractors. In 1993, several cases for illegal dismissal
were filed by private respondents against SSI and its President, petitioner Vicente
Sandoval. The LA rendered its Decision in the illegal dismissal cases. He found that
while private respondents were illegally dismissed, they were not entitled to
reinstatement with backwages, damages and attorney's fees. The LA ruled that there
was no employer-employee relationship between SSI and private respondents, citing
the resolution of Undersecretary Laguesma in the certification election case. Private
respondents then appealed to the NLRC, which affirmed the LA decision. Not
satisfied with the decision of the NLRC, private respondents appealed to the Court of
Appeals. The appellate court reversed the decision of the NLRC and held that SSI is
the direct employer of private respondents. Petitioners filed a motion for
reconsideration, but the same was denied for lack of merit. Hence, the present
appeal.
Issue:
WON CA erred in applying this Court's pronouncement in Manila Golf &
Country Club vs. Intermediate Appellate Court that a decision in a certification
election case regarding the existence of an employer-employee relationship does not
foreclose all further dispute between the parties as to the existence or non-existence
of such relationship. They contend that such pronouncement is obiter dictum since
the issue involved therein was whether or not the persons rendering caddying
services for the golf club's members and their guests in the club's courses or premises
are employees of Manila Golf and Country Club and therefore within the
compulsory coverage of the Social Security System, not the correctness of the Med-
Arbiter's finding in the certification election case that no employer-employee
relationship existed between the golf club and the caddies.
Held: No. CA affirmed.
The Court of Appeals correctly applied the ruling in Manila Golf & Country
Club vs. IAC that "however final it may become, the decision in a certi􀀼cation
election case, by the very nature of such proceeding, is not such as to foreclose all
further dispute as to the existence, or non-existence of an employer-employee
relationship" between SSI and private respondents herein.
43
"A certification proceeding is not a 'litigation' in the sense in which this
term is commonly understood, but a mere investigation of a nonadversary, fact-
􀀼nding character, in which the investigating agency plays the part of a disinterested
investigator seeking merely to ascertain the desires of the employees as to the matter
of their representation. The court enjoys a wide discretion in determining the
procedure necessary to insure the fair and free choice of bargaining representatives
by the employees.
The SC ruled that both the Labor Arbiter and the NLRC erred in holding
that there was no employer-employee relationship between SSI and private
respondents. A certification proceeding is not a "litigation" in the sense in which this
term is commonly understood, but a mere investigation of a nonadversary, fact-
finding character, in which the investigating agency plays the part of a disinterested
investigator seeking merely to ascertain the desires of the employees as to the matter
of their representation. The appellate court properly noted that the issue as to
whether private respondents were illegally dismissed, which was resolved in the
affrmative by the LA, was not appealed by petitioners. Such ruling has therefore
attained finality. Thus, petitioner SSI, as the direct employer of private respondents,
was liable to either reinstate them or pay them backwages or separation pay.
However, because there was not enough evidence on this matter, there is a need to
remand the case to the Labor Arbiter for further proceedings.
G.R. No. 95013. September 21, 1994 TRADE UNIONS OF THE
PHILS/FEBRUARY SIX MOVEMENT (TUPAS/FSM) v Laguesma
COLLECTIVE BARGAINING AND ADMINISTRATION OF AGREEMENTS;
TERMS OF COLLECTIVE BARGAINING AGREEMENT
(ARTICLE 253-A, LABOR CODE) APPLIED IN CASE AT BAR. —
It is crystal clear from the records that the rank-and-file employees of
private respondent's Glassware Division are, at present, represented by ILO-PHILS.
Hence, petitioner's reliance on the March 22, 1990 Certification issued by Director
Bautista, Jr., is misplaced. The existence and filing of their CBA was confirmed in a
Certification, dated April 24, 1990. The certification of ILO-PHILS. "as the sole and
exclusive bargaining agent of the rank-and-file workers of Transunion-Glassware
Division," means it shall remain as such during the existence of the CBA, to the
exclusion of other labor organizations, including petitioner, and no petition
questioning the majority status of the incumbent bargaining agent shall be
 Magsino Labor Relations Digests, Arbues 2019
entertained, nor shall certification election be conducted, outside of the sixty-day
freedom period immediately before the expiry date of the five-year term of the CBA.
REGISTRY OF UNIONS AND FILE OF COLLECTIVE AGREEMENTS;
OFFICIAL FUNCTIONS PRESUMED REGULARLY PERFORMED.—
Petitioner points out that the subject CBA was filed beyond the 30-day
period prescribed under Article 231 of the Labor Code. It appears that the procedural
requirement of filing the CBA within 30 days from date of execution under Article
231 was not met. The subject CBA was executed on November 28, 1989. It was
ratified on December 8, 1989, and then 􀀼led with DOLE for registration purposes on
March 14, 1990. Be that as it may, the delay in the filing of the CBA was sufficiently
explained, i.e., there was an inter-union conflict on who would succeed to the
presidency of ILO-PHILS. The CBA was registered by the DOLE only on May 4,
1990. It would be injudicious for us to assume, as what petitioner did, that the said
CBA was filed only on April 30, 1990, as 5 days before its registration, on the
unsupported surmise that it was done to suit the law that enjoins Regional Offices of
DOLE to act upon an application for registration of a CBA within 5 days from its
receipt thereof. In the absence of any substantial evidence that DOLE officials or
personnel, in collusion with private respondent, had antedated the filing date of the
CBA, the presumption on regularity in the performance of official functions holds.
COLLECTIVE BARGAINING AGREEMENT; IMPORTANCE. —
Noncompliance with the procedural requirement of Article 231 should not
adversely affect the substantive validity of the CBA between ILO-PHILS and the
Transunion Corporation- Glassware Division covering the company's rank and file
employees. A CBA is more than a contract. It is highly impressed with public
interest for it is an essential instrument to promote industrial peace. Hence, it bears
the blessings not only of the employer and employees concerned but even the DOLE.
To set it aside on technical grounds is not conducive to the public good.
44
G.R. No. 82341. December 6, 1989 SUNDOWNER Dev Corp v Drilon
EMPLOYMENT CONTRACTS AND COLLECTIVE BARGAINING
AGREEMENTS; NOT ENFORCEABLE AGAINST A TRANSFEREE OF AN
ENTERPRISE. —
The rule is that unless expressly assumed, labor contracts such as
employment contracts and collective bargaining agreements are not enforceable
against a transferee of an enterprise, labor contracts being in personam, thus binding
only between the parties. A labor contract merely creates an action in personam and
does not create any real right which should be respected by third parties. This
conclusion draws its force from the right of an employer to select his employees and
to decide when to engage them as protected under our Constitution, and the same can
only be restricted by law through the exercise of the police power.
GENERAL RULE THAT BONA FIDE PURCHASER OF ASSETS OF AN
ONGOING CONCERN NOT REQUIRED TO ABSORB EMPLOYEES OF THE
LATTER; EXCEPTION. —
As a general rule, there is no law requiring a bona 􀀼de purchaser of
assets of an on-going concern to absorb in its employ the employees of the latter.
However, although the purchaser of the assets or enterprise is not legally bound to
absorb in its employ the employers of the seller of such assets or enterprise, the
parties are liable to the employees if the transaction between the parties is colored or
clothed with bad faith. In the case at bar, contrary to the claim of the public
respondent that the transaction between petitioner and Mabuhay was attended with
bad faith, the court finds no cogent basis for such contention. Thus, the absorption of
the employees of Mabuhay may not be imposed on petitioner.
G.R. No. L-24711. April 30, 1968 BENGUET CONSOLIDATED v
BCI EMPLOYEES & WORKERS UNION-PAFLU
 Magsino Labor Relations Digests, Arbues 2019
"PRINCIPLE OF SUBSTITUTION", MEANING OF. —
The principle of substitution, formulated by the National Labor Relations
Board, counterpart of our CIR, means that where there occurs a shift in employees'
union allegiance after the execution of a collective bargaining contract with their
employer, the employees can change their agent - the labor union, but the collective
bargaining contract which is still subsisting, continues to bind the employees up to
its expiration date. They may, however, bargain for the shortening of said expiration
date. And the only consideration for the "substitutionary" doctrine is the employees'
interest in the existing bargaining agreement; the agent's (Union's) interest never
enters into the picture.
UNDER "SUBSTITUTIONARY DOCTRINE", EMPLOYEES CANNOT RENEGE
ON THEIR COLLECTIVE BARGAINING CONTRACT; EXCEPTION. —
The "Substitutionary doctrine" provides that the employees cannot revoke
the validly executed collective bargaining contract with their employer by the simple
expedient of changing their bargaining agent. The new agent must respect the
contract. The employees, thru their new bargaining agent, cannot renege on the
collective bargaining contract, except to negotiate with management for the
shortening thereof.
NEW COLLECTIVE BARGAINING AGENT DOES NOT AUTOMATICALLY
ASSUME ALL PERSONAL UNDERTAKINGS OF DEPOSED UNION;
SUBSTITUTIONARY DOCTRINE, HELD INAPPLICABLE. —
The "Substitutionary doctrine" cannot be invoked to support the claim that a
newly certified collective bargaining agent automatically assumes all personal
undertakings, such as the no-strike stipulation in this case, assumed by the deposed
union. When the BBWU bound itself and its officers not to strike, it could not bind
all the rival unions because the BBWU was the agent only of the employees, not of
the other unions which possess distinct personalities.
45
G.R. Nos. 58768-70. December 29, 1989. LIBERTY FLOUR MILLS
EMPLOYEES v LIBERTY FLOUR MILLS
PRESIDENTIAL DECREE NO. 525; EMERGE ON ALLOWANCE; DEEMED
ABSORBED BY THE WAGE INCREASE UNDER THE COLLECTIVE
BARGAINING AGREEMENT; CASE AT BAR. —
The Court holds that the emergency allowances are indeed absorbed by the
wage increases required by P.D. 525 are indeed absorbed by the wage increases
required under the Section 2 of the CBA. This is because Section 6 of the
Interpretative Bulletin on LOI No. 174 specifically provides: Sec. 6. Allowances
under LOI . — All allowances, bonuses, wage adjustments and other benefits given
by employers to their employees shall be treated by the DOLE as in substantial
compliance with the minimum standards set forth in LOI No. 174 if: (a) they
conform with at least the minimum allowances scales specified in the immediately
preceding Section ; and (b) they are given in response to the appeal of the President
in his speech on 4 January 1974, or to countervail the quantum jump in the cost of
living as a result of the energy crisis starting in November 1973, or pursuant to
Presidential Decree No. 390; Provided, That the payment is retroactive to 18
February 1974 or earlier. The allowances and other benefits may be granted
unilaterally by the employer or through collective bargaining, and may be paid at the
same time as the regular wages of the employees. Allowances and other benefits
which are not given in substantial compliance with the LOI as interpreted herein
shall not be treated by the DOLE as emergency allowances in the contemplation of
the LOI unless otherwise shown by sufficient proof. Thus, without such proof,
escalation clauses in collective bargaining agreements concluded before the appeal
of the President providing for automatic or periodic wage increases shall not be
considered allowances for purposes of the LOI.
SECTION 5 OF ITS IMPLEMENTING RULES INTERPRETED. —
The petitioners contend that the wage increases were the result of
negotiation undertaken long before the promulgation of P.D. No. 525 and so should
not be considered part of the emergency allowance decreed. In support of this
contention, they cite Section 15 of the Rules implementing P.D. No. 525, providing
as follows: Nothing herein shall prevent the employer and his employees, from
entering into any agreement with terms more favorable to the employees than those
provided herein, or be construed to sanction the diminution of any benefits granted to
the employees under existing laws, agreements, and voluntary practice. Obviously,
this section should not be read in isolation but must be related to the other sections
 Magsino Labor Relations Digests, Arbues 2019
above-quoted, to give effect to the intent and spirit of the decree. The meaning of the
section simply is that any benefit over and above the prescribed allowances may still
be agreed upon by the employees and the employer or, if already granted, may no
longer be withdrawn or diminished.
COLLECTIVE BARGAINING AGREEMENTS; ENFORCES REGARDLESS OF
ABSENCE OF CERTIFICATION BY THE BUREAU OF LABOR RELATIONS.
— their own choice as their representative in the negotiation of their demands and the
In its challenged decision, the public respondent held that in demanding the
dismissal of Evaristo and Biascan, PLAC had acted prematurely because the 1974
CBA providing for union shop and pursuant to which the two petitioners were
dismissed had not yet been certi􀀼ed. The implication is that it was not yet in effect
and so could not be the basis of the action taken against the two petitioners. This
conclusion is erroneous. It disregards the ruling of this Court in Tanduay Distillery
Labor Union v. NLRC, were we held: The fact, therefore, that the BLR failed to
certify or act on TDLU's request for certification of the CBA in question is of no
moment to the resolution of the issues presented in this case. The BLR itself found in
its order of July 8, 1982, that the "uncertified CBA was duly 􀀼led and submitted on
October 29, 1980, to last until June 30, 1982 is certifiable for having complied with
all the requirements for certification." The CBA concluded in 1974 was certifiable
and was in fact certified on April 11, 1975. It bears stressing that Evaristo and
Biascan were dismissed only on May 20, 1975, more than a month after the said
certification. The correct view is that expressed by Commissioner Cecilio P. Seno in
his concurring and dissenting opinion, viz.: . . . Evidence on record show that after
the cancellation of the registration certificate of the Federation of Democratic Labor
Unions, no other union contested the exclusive representation of the Philippine
Labor Alliance Council (PLAC), consequently, there was no more legal impediment
that stood on the way as to the validity and enforceability of the provisions of the
CBA entered into by and between respondent corporation and respondent union. The
certification of the collective bargaining agreement by the BLR is not required to put
a stamp of validity to such contract. Once it is duly entered into and signed by the
parties, a collective bargaining agreement becomes effective as between the parties
regardless of whether or not the same has been certified by the BLR.
POLICY OF THE STATE TO PROMOTE UNIONISM EXPLAINED. —
It is the policy of the State to promote unionism to enable the workers to
negotiate with management on the same level and with more persuasiveness than if
they were to individually and independently bargain for the improvement of their
respective conditions. To this end, the Constitution guarantees to them the rights "to
46
self-organization, collective bargaining and negotiations and peaceful concerted
actions including the right to strike in accordance with law." There is no question
that these purposes could be thwarted if every worker were to choose to go his own
separate way instead of joining his co-employees in planning collective action and
presenting a united front when they sit down to bargain with their employers. It is for
this reason that the law has sanctioned stipulations for the union shop and the closed
shop as a means of encouraging the workers to join and support the labor union of
protection of their interest vis-a-vis the employer.
G.R. No. 102636. September 10, 1993 METROPOLITAN BANK & TRUST
COMPANY EMPLOYEES UNIONALU- TUCP v NLRC
"WAGE DISTORTION," DEFINED. —
The term "wage distortion", under the Rules Implementing Republic Act
6727, is defined, thus: "(p) Wage Distortion means a situation where an increase in
prescribed wage rates results in the elimination or severe contraction of intentional
quantitative differences in wage or salary rates between and among employee groups
in an establishment as to effectively obliterate the distinctions embodied in such
wage structure based on skills, length of service, or other logical bases of
differentiation."
The "intentional quantitative differences" in wage among employees of the
bank has been set by the CBA to about P900 per month as of 01 January 1989. It is
intentional as it has been arrived at through the collective bargaining process to
which the parties are thereby concluded. The Solicitor General, in recommending the
grant of due course to the petition, has correctly emphasized that the intention of the
parties, whether the benefits under a collective bargaining agreement should be
equated with those granted by law or not, unless there are compelling reasons
otherwise, must prevail and be given effect.
In keeping then with the intendment of the law and the agreement of the
parties themselves, along with the often repeated rule that all doubts in the
interpretation and implementation of labor laws should be resolved in favor of labor,
we must approximate an acceptable quantitative difference between and among the
CBA agreed work levels. We, however, do not subscribe to the labor arbiter's
exacting prescription in correcting the wage distortion. Like the majority of the
 Magsino Labor Relations Digests, Arbues 2019
members of the NLRC, we are also of the view that giving the employees an across-
the-board increase of P750 may not be conducive to the policy of encouraging
"employers to grant wage and allowance increases to their employees higher than the
minimum rates of increases prescribed by statute or administrative regulation,"
particularly in this case where both RA 6727 and the CBA allow a credit for
voluntary compliance. We 􀀼nd the formula suggested then by Commissioner Bonto-
Perez, which has also been the standard considered by the Regional Tripartite Wages
and Productivity Commission for the correction of pay scale structures in cases of
wage distortion, to well be the appropriate measure to balance the respective
contentions of the parties in this instance. We also view it as being just and equitable.
G.R. No. 113856 September 7, 1998 SAMAHANG MANGGAGAWA SA
TOP FORM MANUFACTURING UNITED WORKERS OF THE
PHILIPPINES (SMTFM-UWP) v NLRC
There’s no wage distortion here nibba.
WHERE A PROPOSAL RAISED BY A CONTRACTING PARTY DOES NOT
FIND PRINT IN THE COLLECTIVE BARGAINING AGREEMENT, IT IS NOT
A PART THEREOF AND THE PROPONENT HAS NO CLAIM WHATSOEVER
TO ITS IMPLEMENTATION; CASE AT BAR. —
The CBA is the law between the contracting parties — the collective
bargaining representative and the employer-company. Compliance with a CBA is
mandated by the expressed policy to give protection to labor. In the same vein, CBA
provisions should be "construed liberally rather than narrowly and technically, and
the courts must place a practical and realistic construction upon it, giving due
consideration to the context in which it is negotiated and purpose which it is intended
to serve." This is founded on the dictum that a CBA is not an ordinary contract but
one impressed with public interest. It goes without saying, however, that only
provisions embodied in the CBA should be so interpreted and complied with. Where
a proposal raised by a contracting party does not And print in the CBA, it is not a
part thereof and the proponent has no claim whatsoever to its implementation.
EXECUTION OF COLLECTIVE BARGAINING AGREEMENT IS PROOF OF
GOOD FAITH BARGAINING; CASE AT BAR. —
With the execution of the CBA, bad faith bargaining can no longer be imputed upon
any of the parties thereto. All provisions in the CBA are supposed to have been
jointly and voluntarily incorporated therein by the parties. This is not a case where
private respondent exhibited an indifferent attitude towards collective bargaining
because the negotiations were not the unilateral activity of petitioner union. The
47
CBA is proof enough that private respondent exerted "reasonable effort at good faith
bargaining.
G.R. No. L-38258. November 19, 1982. LAKAS NG
MANGGAGAWANG MAKABAYAN v MARCELO ENTERPRISES
CERTIFICATION ELECTION; INDISPENSABLE WHERE THE ISSUE OF
LEGITIMATE REPRESENTATION IS VIED BY TWO OR MORE LABOR
ORGANIZATIONS; CASE AT BAR.—
Where the issue of legitimate representation in dispute is vied for not only
by one legitimate labor organization but two or more, there is every equitable ground
warranting the holding of a certi􀀼cation election. In this way, the issue as to who is
really the true bargaining representative of all the employees maybe 􀀼rmly settled
by the simple expedient of an election." The cited case gives the reason for the need
of determining once and for all the true choice of membership as to who should be
their bargaining representative, which is that, "(E)xperience teaches us one of the
root causes of labor or industrial disputes is the problem arising from a questionable
bargaining representative entering into CBA concerning terms and conditions of
employment."
COLLECTIVE BARGAINING EMPLOYER'S RIGHT TO DEMAND OF THE
ASSERTED BARGAINING AGENT PROOF OF ITS REPRESENTATIONS OF
ITS EMPLOYEES. —
Respecting the issue of representation and the right of the employer to
demand reasonable proof of majority representation on the part of the supposed or
putative bargaining agent, the commentaries in Rothenberg on Labor Relations, pp.
429- 431 are forceful and persuasive, thus : "It is essential to the right of a putative
bargaining agent to represent the employees that it be the delegate of a majority of
the employees and, conversely, an employer is under duty to bargain collectively
only when the bargaining agent is representative of the majority of the employees. A
natural consequences of these principles is that the employer has the right to demand
of the asserted bargaining agent proof of its representation of its employees. Having
the right to demonstration of this fact, it is not an 'unfair labor practice' for an
 Magsino Labor Relations Digests, Arbues 2019
employer to refuse to negotiate until the asserted bargaining agent has presented
reasonable proof of majority representation. It is necessary however that such
demand be made in good faith and not merely as a pretext or device for delay or
evasion. The employer's right is however to reasonable proof. . . . Although an
employer has the undoubted right to bargain with a bargaining agent whose authority
has been established, without the requirement that the bargaining agent be officially
certified by the National Labor Relations Board as such, if the informally presented
evidence leaves a real doubt as to the issue, the employer has a right to demand a
certification and to refuse to negotiate until such official certification is presented.
CONCERTED ACTIVITIES EXECUTED AND CARRIED INTO EFFECT AT
THE INSTIGATION AND MOTIVATION OF A LABOR ORGANIZATION NOT
A BARGAINING AGENT CONSTITUTE A VIOLATION OF EMPLOYER'S
BASIC RIGHT TO BARGAIN COLLECTIVELY; CASE AT BAR. —
The clear facts of the case as hereinbefore restated indisputably show that a
legitimate representation issue confronted the respondent Marcelo Companies. In the
face of these facts and in conformity with the existing jurisprudence, We hold that
there existed on duty to bargain collectively with the complainant LAKAS on the
part of said companies. And proceeding from this basis, it follows that all acts
instigated by complainant LAKAS such as the filing of the Notice of Strike on June
13, 1967 (although later withdrawn) and the two strikes of September 4, 1967 and
November 7, 1967 were calculated, designed and intended to compel the respondent
Marcelo Companies to recognize or bargain with it notwithstanding that it was an
uncertified union, or in the case of respondent Marcelo Tire and Rubber Corporation,
to bargain with it despite the fact that the MUEWA of Paulino Lazaro was already
certified as the sole bargaining agent in said respondent company. These concerted
activities executed and carried into effect at the instigation and motivation of
LAKAS are all illegal and violative of the employer's basic right to bargain
collectively only with the representative supported by the majority of its employees
in each of the bargaining units. This Court is not unaware of the present predicament
of the employees involved but much as We sympathize with those who have been
misled and so lost their jobs through hasty, ill-advised and precipitate moves, We
rule that the facts neither substantiate nor support the finding that the respondent
Marcelo Companies are guilty of unfair labor practice.
UNFAIR LABOR PRACTICE; REQUIREMENT TO FILL UP A FORM FOR
SCHEDULING, NOT A REFUSAL TO REINSTATE OR RE-EMPLOY
STRIKERS; CASE AT BAR. —
48
It is the settled jurisprudence that it is an unfair labor practice for an
employer not to reinstate, or re-employment to, members of union who abandon their
strike and make unconditional offer to return to work. Exhibit "B" presents an
unconditional offer of the striking employees to return to work under the same terms
and conditions of employment before the strike. We find as a fact that the respondent
Marcelo Companies did not refuse to reinstate or re-employ the strikers, as a
consequence of which We overrule the finding of unfair labor practice against said
companies based on the erroneous conclusion of the respondent court. It is clear
from the records that even before the unconditional offer to return to work contained
in Exhibit "B" was made, the respondent Marcelo Companies had already posted
notices for the strikers to return back to work. It is true that upon their return, the
striker were required to fill up a form (Exhibit "49") wherein they were to indicate
the date of their availability for work. But We are more impressed and are persuaded
to accept as true the contention of the respondent Marcelo Companies that the
aforestated requirement was only for purposes of proper scheduling of the start of
work for each returning striker. It must be noted that as a consequences of the two
strikes which were both attended by widespread acts of violence and vandalism, the
businesses of the respondent companies were completely paralyzed. It would hardly
be justiciable to demand of the respondent companies to readmit all the returning
workers in one big force or as each demanded readmission. There were machines
that were not in operating condition because of long disuse during the strikes. Some
of the machines needed more than one worker to operate them so that in the absence
of the needed team of workers, the start of work by one without his teammates would
necessarily be useless, and the company would be paying for his time spent doing no
work. Finally, We take judicial cognizance of the fact that companies whose
businesses were completely paralyzed by major strikes cannot resume operations at
once and in the same state or force as before the strikes. But what strikes Us most in
lending credence to respondents' allegation that Exhibit "49" was not meant to screen
the strikers, is the fact that all of the returning strikers who filled up the form were
scheduled for work and consequently started with their jobs. It is only those strikers
who refused or failed to fill-up the required form, like the herein complaining
employees, who were not scheduled for work and consequently have not been re-
employed by the respondent Marcelo Companies. Even if there was a sincere belief
on their part that the requirement
of Exhibit "49" was a ruse at "screening" them is, this fear would have been dispelled
upon notice of the fact that each and all of their co-strikers who filled up the required
form were in fact scheduled for work and started to work. The stoppage of their work
was not, therefore, the direct consequence of the respondent companies' complained
act. Hence, their economic loss should not be shifted to the employer. In the light of
the above ruling and taking the facts and circumstances of the case before Us in
relation to the requirement by the respondent companies in the filling up of Exhibit
 Magsino Labor Relations Digests, Arbues 2019
"49", We hold and rule that the requirement was an act of self- preservation,
designed to effect costsavings
as well as to insure peace and order within their premises. Accordingly, the petition
in G.R. No. L-38258 should be dismissed, it having failed to prove, substantiate and
justify the unfair labor practice charges against the respondent Marcelo Companies.
WORKER'S RIGHT TO SELF-ORGANIZATION; SUBJECT TO EMPLOYER'S
FREEDOM TO ENFORCE RULES AND ORDERS NECESSARY TO THE
PROPER CONDUCT OF HIS BUSINESS. —
It was never the state policy nor Our judicial pronouncement that the
employees' rights to self-organization and to engage in concerted activities for
mutual aid and protection, are absolute or be upheld under all circumstances. The
protection of workers' right to self-organization in no way interfere with employer's
freedom to enforce such rules and orders as are necessary to proper conduct of his
businesses, so long as employer's supervision is not for the purpose of intimidating
or coercing his employees with respect to their self-organization and representation.
It is the functions of the court to see that the rights of self-organization and collective
bargaining guaranteed by the Act are amply secured to the employee, but in its effort
to prevent the prescribed unfair labor practice, the court must be mindful of the
welfare of the honest employer.
G.R. No. L-20044. April 30, 1964. NATIONAL UNION
RESTAURANT WORKERS (PTUC) v CIR
There appears certain marks, opposite each demand, such as a check for
those demands to which Mrs. Felisa Herrera was agreeable, a cross signifying the
disapproval of Mrs. Herrera, and a circle regarding those demands which were left
open for discussion on some future occasion that the parties may deem convenient.
Such markings were made during the discussion of the demands in the meeting
called by respondents on May 3, 1960 at their restaurant in Quezon City. The court a
quo concluded that the fact that respondent Herrera had agreed to some of the
demands shows that she did not refuse to bargain collectively with the complaining
union.
We can hardly dispute this finding, for it finds support in the evidence. The
inference that respondents did not refuse to bargain collectively with the complaining
union because they accepted some of the demands while they refused the others even
leaving open other demands for future discussion is correct, especially so when those
demands were discussed at a meeting called by respondents themselves precisely in
view of the letter sent by the union on April 29, 1960. It is true that under Section 14
of Republic Act 875 whenever a party serves a written notice upon the employer
making some demands the latter shall reply thereto not later than 10 days from
receipt thereof, but this condition is merely procedural, and as much its non-
compliance cannot be deemed to be an act of unfair labor practice. The fact is that
respondents did not
ignore the letter sent by the union so much so that they called a meeting to discuss its
demands, as already stated elsewhere.
It is contended that respondents refused to bargain with the complaining
union as such even if they called a meeting of its officers and employees hereby
concluding that they did not desire to enter into a bargaining agreement with said
union. This conclusion has no rational relation with the main premise of the union
for it is belied by the fact that respondents did actually agree and bargain with the
representatives of the union. While it is true that respondents denied the capacity of
the complaining union to bargain collectively with the respondents this is because
they were of the impression that before a union could have that capacity it must first
be certified by the CIR as the duly authorized bargaining unit, as in fact this is what
they stated in their answer to the petition for certification filed by said union before
the CIR. In said case, another union known as the International Labor and Marine
Union of the Philippines claimed to represent the majority of the employees of
respondent restaurant, and this is what it alleged in a letter sent to the manager of
OF respondents dated May 25, 1962.
Kiok Loy v. National Labor Relations Commission,
G.R. No. L-54334, January 22, 1986, 225 PHIL 138-147
Unfair labor practice is committed when it is shown that the respondent
employer, after having been served with a written bargaining proposal by the
petitioning Union, did not even bother to submit an answer or reply to the said
49
 Magsino Labor Relations Digests, Arbues 2019
proposal. While the law does not compel the parties to reach an agreement, it does
contemplate that both parties will approach the negotiation with an open mind and
make a reasonable effort to reach a common ground of agreement.
Neither are WE persuaded by petitioner-company's stand that the Collective
Bargaining Agreement which was approved and adopted by the NLRC is a total
nullity for it lacks the company's consent, much less its argument that once the
Collective Bargaining Agreement is implemented, the Company will face the
prospect of closing down because it has to pay a staggering amount of economic
benefits to the Union that will equal if not exceed its capital. Such a stand and the
evidence in support thereof should have been presented before the Labor Arbiter
which is the proper forum for the purpose.
We agree with the pronouncement that it is not obligatory upon either side
of a labor controversy to precipitately accept or agree to the proposals of the other.
But an erring party should not be tolerated and allowed with impunity to resort to
schemes feigning negotiations by going through empty gestures. More so, as in the
instant case, where the intervention of the National Labor Relations Commission was
properly sought for after conciliation efforts undertaken by the BLR failed. The
instant case being a certified one, it must be resolved by the NLRC pursuant to the
mandate of P.D. 873, as amended, which authorizes the said body to determine the
reasonableness of the terms and conditions of employment embodied in any
Collective Bargaining Agreement. To that extent, utmost deference to its findings of
reasonableness of any Collective Bargaining Agreement as the governing agreement
by the employees and management must be accorded due respect by this Court.
G.R. No. 111262. September 19, 1996 SAN MIGUEL CORPORATION
EMPLOYEES UNION-PTGWO v Confesor
TERM OF REPRESENTATION ASPECT FIXED TO FIVE YEARS; ALL OTHER
ASPECTS, THREE YEARS. —
Article 253-A is a new provision. This was incorporated by Section 21 of
Republic Act No. 6715 (the Herrera-Veloso Law) which took effect on March 21,
1989. This new provision states that the CBA has a term of 5 years instead of 3
50
years, before the amendment of the law as far as the representation aspect is
concerned. All other provisions of the CBA shall be negotiated not later than 3 years
after its execution. The "representation aspect" refers to the identity and majority
status of the union that negotiated the CBA as the exclusive bargaining
representative of the appropriate bargaining unit concerned. "All other provisions"
simply refers to the rest of the CBA, economic as well as non-economic provisions,
except representation.
ARTICLE 253-A OF THE LABOR CODE, CONSTRUED. —
The framers of the law wanted to maintain industrial peace and stability by
having both management and labor work harmoniously together without any
disturbance. Thus, no outside union can enter the establishment within 5 years and
challenge the status of the incumbent union as the exclusive bargaining agent.
Likewise, the terms and conditions of employment economic and non-economic)
cannot be questioned by the employers or employees during the period of effectivity
of the CBA. The CBA is a contract between the parties and the parties must respect
the terms and conditions of the agreement. Notably, the framers of the law did not
give a fixed term as to the effectivity of the terms and conditions of employment. It
can be gleaned from their discussions that it was left to the parties to fix the period.
COLLECTIVE BARGAINING AGREEMENT; TERM OF NON-
REPRESENTATION PROVISION IS THREE YEARS. —
The issue as to the term of non-representation provisions of the CBA need
not belabored especially when we take note of the Memorandum of the Secretary of
Labor dated February 24, 1994 which was mentioned in the Resolution of
Undersecretary Bienvenido Laguesma on January 16, 1995 in the certification
election case involving the SMC employees. In said memorandum, the Secretary of
Labor had occasion to clarify the term of the renegotiated terms of the CBA vis-a-vis
the term of the bargaining agent, to wit: As a matter of policy the parties are
encourages to enter into a renegotiated CBA with a term which would coincidde with
the aforesaid 5 year term of the bargaining representative. In the event however, that
the parties, by mutual agreement, enter into a renegotiated contract with a term of 3
years or one which does not coincide with the said 5-year term, and said agreement
is ratified by majority of the members in the bargaining unit, the subject contract is
valid and legal and therefore, binds the contracting parties. The same will however
not adversely affect the right of another union to challenge the majority status of the
incumbent bargaining agent within 60 days before the lapse of the original 5 year
term of the CBA. Thus, we do not find any grave abuse of discretion on the part of
 Magsino Labor Relations Digests, Arbues 2019
the Secretary of Labor in ruling that the effectivity of the renegotiated terms of the
CBA shall be for 3 years.
OPERATING DIVISIONS OF THE COMPANY WHICH BECAME SEPARATE
AND DISTINCT NO LONGER BELONG TO A SINGLE BARGAINING UNIT.
— and organize themselves into distinctive and different groups. It would then be best
Ever mindful of the employees' interests, management has assured the
concerned employees that they will be absorbed by the new corporations without
loss of tenure and retaining their present pay and benefits according to the existing
CBAs. They were advised that upon the expiration of the CBAs, new agreements
will be negotiated between the management of the new corporations and the
bargaining representatives of the employees concerned. Indubitably, therefore,
Magnolia and SMFI became distinct entities with separate juridical personalities.
Thus, they can not belong to a single bargaining unit as held in the case of Diatagon
Labor Federation Local 110 of the ULGWP v. Ople. Petitioner-union's attempt to
include the employees of Magnolia and SMFI in the SMC bargaining unit so as to
have a bigger mass base of employees has, therefore, no more valid ground.
TEST IN DETERMINING APPROPRIATE BARGAINING UNIT. —
There are various factors which must be satisfied and considered in
determining the proper constituency of a bargaining unit. No one particular factor is
itself decisive of the determination. The weight accorded to any particular factor
varies in accordance with the particular question or questions that may arise in a
given case. What are these factors? Rothenberg mentions a good number, but the
most pertinent to our case are: (1) will of the employees (Globe Doctrine); (2)
affinity and unit of employees' interest, such as substantial similarity of work and
duties, or similarity of compensation and working conditions; (3) prior collective
bargaining history; and (4) employment status, such as temporary, seasonal and
probationary employees.
In determining an appropriate bargaining unit, the test of grouping is
mutuality or commonality of interests. The employees sought to be represented by
the collective bargaining agent must have substantial mutual interests in terms of
employment and working conditions as evinced by the type of work they performed.
Considering the spin-offs, the companies would consequently have their respective
and distinctive concerns in terms of the nature of work, wages, hours of work and
other conditions of employment. Interests of employees in the different companies
perforce differ. SMC is engaged in the business of beer manufacturing. Magnolia is
involved in the manufacturing and processing of dairy products while SMFI is
51
involved in the production of feeds and the processing of chicken. The nature of their
products and scales of business may require different skills which must necessarily
be commensurate by different compensation packages. The different companies may
have different volumes of work and different working conditions. For such reason,
the employees of the different companies see the need to group themselves together
to have separate bargaining units for the different companies where the employees
can bargain separately according to their needs and according to their own working
conditions.
G.R. No. 91915. September 11, 1992
DIVINE WORD UNIVERSITY OF TACLOBAN v Secretary
On the issue of whether or not a certification election should have been ordered by
the Secretary of Labor, pertinent are the following respective provisions of the Labor
Code and Rule V, Book V of the Implementing Rules and Regulations of the same
Code:
"ART. 258. When an employer may file petition. — When requested to bargain
collectively, an employer may petition the Bureau for an election. If there is no
existing certified collective bargaining agreement in the unit, the Bureau shall, after
hearing, order a certification election.
All certification cases shall be decided within twenty (20) working days.
The Bureau shall conduct a certification election within twenty (20) days in
accordance with the rules and regulations prescribed by the Secretary of Labor.
Sec. 3. When to file. — In the absence of a collective bargaining agreement duly
registered in accordance with Article 231 of the Code, a petition for certification
election may be filed at any time. However, no certification election may be held
within one year from the date of issuance of a final certification election result.
Neither may a representation question be entertained if, before the filing of a petition
 Magsino Labor Relations Digests, Arbues 2019
for certification election, a bargaining deadlock to which an incumbent or certified
bargaining agent is a party had been submitted to conciliation or arbitration or had
become the subject of valid notice of strike or lockout. (Emphasis supplied)
If a collective bargaining agreement has been duly registered in accordance with
Article 231 of the Code, a petition for certification election or a motion for
intervention can only be entertained within sixty (60) days prior to the expiry date of
such agreement."
These provisions make it plain that in the absence of a collective bargaining
agreement, an employer who is requested to bargain collectively may file a petition
for certification election any time except upon a clear showing that one of these two
instances exists: (a) the petition is filed within one year from the date of issuance of a
final certification election result or (b) when a bargaining deadlock had been
submitted to conciliation or arbitration or had become the subject of a valid notice of
strike or lockout.
While there is no question that the petition for certification election was filed by the
herein petitioner after almost four years from the time of the certification election
and, therefore, there is no question as to the timeliness of the petition, the problem
appears to lie in the fact that the Secretary of Labor had found that a bargaining
deadlock exists.
A "deadlock" is defined as the "counteraction of things producing entire stoppage: a
state of inaction or of neutralization caused by the opposition of persons or of
factions (as in government or a voting body): standstill." There is a deadlock when
there is a "complete blocking or stoppage resulting from the action of equal and
opposed forces; as, the deadlock of a jury or legislature. The word is synonymous
with the word impasse which, within the meaning of the American federal labor
laws, "presupposes reasonable effort at good faith bargaining which, despite noble
intentions, does not conclude in agreement between the parties."
A thorough study of the records reveals that there was no "reasonable effort at good
faith bargaining" specially on the part of the University. Its indifferent attitude
towards collective bargaining inevitably resulted in the failure of the parties to arrive
at an agreement. As it was evident that unilateral moves were being undertaken only
by the DWUEU-ALU, there was no "counteraction" of forces or an impasse to speak
of. While collective bargaining should be initiated by the union, there is a
corresponding responsibility on the part of the employer to respond in some manner
to such acts. This is clear from the provisions of the Labor Code Art. 250(a) of which
states:
52
"ART. 250. Procedure in collective bargaining. — The following procedures
shall be observed in collective bargaining:chanrob1es virtual 1aw library
(a) When a party desires to negotiate an agreement, it shall serve a written
notice upon the other party with a statement of its proposals. The other party shall
make a reply thereto not later than ten (10) calendar days from receipt of such notice.
(b) Should differences arise on the basis of such notice and reply, either party
may request for a conference which shall begin not later than ten (10) calendar days
from the date of request.
(c) If the dispute is not settled, the Board shall intervene upon request of either
or both parties or at its own initiative and immediately call the parties to conciliation
meetings. The Board shall have the power to issue subpoenas requiring the
attendance of the parties to such meetings. It shall be the duty of the parties to
participate fully and promptly in the conciliation meetings the Board may call;
(d) During the conciliation proceedings in the Board, the parties are prohibited
from doing any act which may disrupt or impede the early settlement of the disputes;
and
(e) The Board shall exert all efforts to settle disputes amicably and encourage
the parties to submit their case to a voluntary arbitrator."
Considering the procedure outlined above, the Court cannot help but notice that the
DWUEU was not entirely blameless in the matter of the delay in the bargaining
process. While it is true that as early as March 7, 1985, said union had submitted its
collective bargaining proposals and that, its subsequent withdrawal by the DWUEU
Vice-President being unauthorized and therefore ineffective, the same proposals
could be considered as subsisting, the fact remains that said union remained passive
for three years. The records do not show that during this three-year period, it exerted
any effort to pursue collective bargaining as a means of attaining better terms of
employment.
It was only after its affiliation with the ALU that the same union, through the ALU
Director for Operations, requested an "initial conference" for the purpose of
collective bargaining. That the DWUEU abandoned its collective bargaining
proposals prior to its affiliation with ALU is further confirmed by the fact that in the
aforequoted May 10, 1988 agreement with the University, said Union bound itself to
submit a new set of proposals on May 13, 1988. Under the circumstances, the
 Magsino Labor Relations Digests, Arbues 2019
agreement of May 10, 1988 may as well be considered the written notice to bargain
referred to in the aforequoted Art. 250(a) of the Labor Code, which thereby set into
motion the machinery for collective bargaining, as in fact, on May 19, 1988,
DWUEU-ALU submitted its collective bargaining proposals.
Be that as it may, the Court is not inclined to rule that there has been a deadlock or
an impasse in the collective bargaining process. As the Court earlier observed, there
has not been a "reasonable effort at good faith bargaining" on the part of the
University. While DWUEU-ALU was opening all possible avenues for the
conclusion of an agreement, the record is replete with evidence on the University’s
reluctance and thinly disguised refusal to bargain with the duly certified bargaining
agent, such that the inescapable conclusion is that the University evidently had no
intention of bargaining with it. Thus, while the Court recognizes that technically, the
University has the right to file the petition for certification election as there was no
bargaining deadlock to speak of, to grant its prayer that the herein assailed Orders be
annulled would put an unjustified premium on bad faith bargaining.
Bad faith on the part of the University is further exemplified by the fact that an hour
before the start of the May 10, 1988 conference, it surreptitiously filed the petition
for certification election. And yet during said conference, it committed itself to "sit
down" with the Union. Obviously, the University tried to preempt the conference
which would have legally foreclosed its right to file the petition for certification
election. In so doing, the University failed to act in accordance with Art. 252 of the
Labor Code which defines the meaning of the duty to bargain collectively as "the
performance of a mutual obligation to meet and convene promptly and expeditiously
in good faith." Moreover, by filing the petition for certification election while
agreeing to confer with the DWUEU-ALU, the University violated the mandate of
Art. 19 of the Civil Code that" (e)very person must, in the exercise of his rights and
in the performance of his duties, act with justice, give everyone his due, and observe
honesty and good faith."
Moreover, the University’s unscrupulous attitude towards the DWUEU-ALU is also
betrayed by its belated questioning of the status of the said union. The
communications between them afforded the University ample opportunity to raise
the issue of representation if indeed it was doubtful of the DWUEU-ALU’s status as
a majority union, but it failed to do so. On the other hand, in the agreement of May
10, 1988, the University even agreed "to sit down and determine the number of
employees that will represent their bargaining unit." This clearly indicates that the
University recognized the DWUEU-ALU as the bargaining representative of the
employees and is, therefore, estopped from questioning the majority status of the
said union.
53
Hence, petitioner’s contention that the DWUEU-ALU’s proposals may not be
unilaterally imposed on it on the ground that a collective bargaining agreement is a
contract wherein the consent of both parties is indispensable is devoid of merit. A
similar argument had already been disregarded in the case of Kiok Loy v. NLRC,
where we upheld the order of the NLRC declaring the union’s draft CBA proposal as
the collective agreement which should govern the relationship between the parties.
Kiok Loy v. NLRC is applicable in the instant case considering that the facts therein
have also been indubitably established in this case. These factors are: (a) the union is
the duly certified bargaining agent; (b) it made a definite request to bargain and
submitted its collective bargaining proposals, and (c) the University made no counter
proposal whatsoever. As we said in Kiok Loy," [a] company’s refusal to make
counter proposal if considered in relation to the entire bargaining process, may
indicate bad faith and this is especially true where the Union’s request for a counter
proposal is left unanswered." Moreover, the Court added in the same case that "it is
not obligatory upon either side of a labor controversy to precipitately accept or agree
to the proposals of the other. But an erring party should not be tolerated and allowed
with impunity to resort to schemes feigning negotiations by going through empty
gestures."
That being the case, the petitioner may not validly assert that its consent should be a
primordial consideration in the bargaining process. By its acts, no less than its
inaction which bespeak its insincerity, it has forfeited whatever rights it could have
asserted as an employer. We, therefore, find it superfluous to discuss the two other
contentions in its petition.
G.R. No. 91231. February 4, 1991 NESTLE PHILIPPINES v NLRC
COLLECTIVE BARGAINING AGREEMENT (CBA); INCLUSION OF RETIREMENT
PLAN IN THE CBA, GIVES A CONSENSUAL CHARACTER TO THE PLAN. —
The NLRC correctly observed that the inclusion of the retirement plan in the CBA
as part of the package of economic benefits extended by the company to its employees to
provide them a measure of financial security after they shall have ceased to be employed in the
company, reward their loyalty, boost their morale and efficiency and promote industrial peace,
gives "a consensual character" to the plan so that it may not be terminated or modified at will
by either party.
NON-CONTRIBUTORY OF RETIREMENT PLAN, DOES NOT MAKE IT A NON-ISSUE
IN THE CBA NEGOTIATION. —
 Magsino Labor Relations Digests, Arbues 2019
The fact that the retirement plan is non-contributory, i.e., that the employees contribute
nothing to the operation of the plan, does not make it a non-issue in the CBA negotiations. As
a matter of fact, almost all of the benefits that the petitioner has granted to its employees under
the CBA — salary increases, rice allowances, midyear bonuses, 13th and 14th month pay,
seniority pay, medical and hospitalization plans, health and dental services, vacation, sick &
other leaves with pay — are non-contributory bene􀀼ts. Since the retirement plan has been an
integral part of the CBA since 1972, the Union's demand to increase the benefits due the
employees under said plan, is a valid CBA issue. The deadlock between the company and the
union on this issue was resolvable by the Secretary of Labor, or the NLRC, after the Secretary
had assumed jurisdiction over the labor dispute (Art. 263).
EMPLOYEES HAVE VESTED AND DEMANDABLE RIGHT OVER EXISTING
BENEFITS GRANTED BY EMPLOYER; NON-CONTRIBUTORY RETIREMENT PLAN,
INCLUDED THEREIN. —
The petitioner's contention, that employees have no vested or demandable right to a
non-contributory retirement plan, has no merit for employees do have a vested and
demandable right over existing benefits voluntarily granted to them by their employer. The
latter may not unilaterally withdraw, eliminate or diminish such benefits.
G.R. No. 111651. November 28, 1996 OSMALIK BUSTAMANTE v NLRC
Facts: On 15 March 1996, the Court (First Division) promulgated a decision in this
case, the dispositive part of which states:
"WHEREFORE, the resolution of the NLRC dated 3 May 1993 is modified
in that its deletion of the award for backwages in favor of petitioners, is
SET ASIDE. The decision of the LA dated 26 April 1991 is AFFIRMED
with the modification that backwages shall be paid to petitioners from the
time of their illegal dismissal on 25 June 1990 up to the date of their
reinstatement. If reinstatement s no longer feasible, a one-month salary shall
be paid the petitioners as ordered in the labor arbiter's decision, in addition
to the adjudged backwages.
Issue: WON petitioners are entitled to recover backwages because they were not
actually dismissed but their probationary employment was not converted to
permanent employment.
Held: Yes. In accordance with the above provision, an illegally dismissed
employee is entitled to his full backwages from the time his compensation was
54
withheld from him (which, as a rule, is from the time of his illegal dismissal) up to
the time of his actual reinstatement.
Backwages to be awarded to an illegally dismissed employee, should not, as
a general rule, be diminished or reduced by the earnings derived by him elsewhere
during the period of his illegal dismissal. The underlying reason for this ruling is that
the employee, while litigating the legality of his dismissal, must still earn a living to
support himself and family, while full backwages have to be paid by the employer as
part of the price or penalty he has to pay for illegally dismissing his employee. The
clear legislative intent of the amendment in Rep. Act No. 6715 is to give more
benefits to workers than was previously given them under the Mercury Drug rule or
the "deduction of earnings elsewhere" rule. Thus, a closer adherence to the
legislative policy behind Rep. Act No. 6715 points to "full backwages" as meaning
exactly that, i.e., without deducting from backwages the earnings derived elsewhere
by the concerned employee during the period of his illegal dismissal. In other words,
the provision calling for "full backwages" to illegally dismissed employees is clear,
plain and free from ambiguity and, therefore, must be applied without attempted or
strained interpretation. Index animi sermo est.
G.R. No. 118651. October 16, 1997 PIONEER TEXTURIZING v NLRC
Facts: Private respondent Lourdes A. de Jesus is petitioner’s reviser/trimmer since
1980. De Jesus received from petitioner’s personnel manager a memo requiring her
to explain why no disciplinary action should be taken against her for dishonesty and
tampering of official records and documents with the intention of cheating as P.O.
No. 3853 allegedly required no trimming. The memo also placed her under
preventive suspension for thirty days. In her handwritten explanation, de Jesus
maintained that she merely committed a mistake and admitted that she may have
been negligent but not for dishonesty or tampering. Petitioner’s personnel
department, nonetheless, terminated her from employment and sent her a notice of
termination dated September 18, 1992.
On September 22, 1992, de Jesus filed a complaint for illegal dismissal
against petitioners. Petitioners insist that the NLRC gravely abused its discretion in
holding that de Jesus is entitled to reinstatement to her previous position for she was
not illegally dismissed in the first place. In support thereof, petitioners quote portions
of the NLRC decision which stated that petitioners cannot be entirely faulted for
dismissing the complaint and that there was no illegal dismissal to speak of in the
case at bar.
 Magsino Labor Relations Digests, Arbues 2019
Issue: WON reinstatement and backwages are due.
Held: Yes. Gleaned either from the LA observations or from the NLRCs
assessment, it distinctly appears that petitioners accusation of dishonesty and
tampering of official records and documents with intention of cheating against de
Jesus was not substantiated by clear and convincing evidence. Petitioners simply
failed, both before the Labor Arbiter and the NLRC, to discharge the burdent of
proof and to validly justify de Jesus dismissal from service. The law, in this light,
directs the employers, such as herein petitioners, not to terminate the services of an
employee except for a just or authorized cause under the Labor Code.[8] Lack of a
just cause in the dismissal from service of an employee, as in this case, renders the
dismissal illegal, despite the employers observance of procedural due process.[9]
And while the NLRC stated that there was no illegal dismissal to speak of in the case
at bar and that petitioners cannot be entirely faulted therefor, said statements are
inordinate pronouncements which did not remove the assailed dismissal from the
realm of illegality. Neither can these pronouncements preclude us from holding
otherwise.
Corollary to our determination that de Jesus was illegally dismissed is her
imperative entitlement to reinstatement and backwages as mandated by law.
Issue: WON order for reinstatement requires motion for execution.
Held: No. Article 224 states that the need for a writ of execution applies only
within 5 years from the date a decision, an order or awards becomes final and
executory. It cannot relate to an award or order of reinstatement still to be appealed
or pending appeal which Article 223 contemplates. The provision of Article 223 is
clear that an award for reinstatement shall be immediately executory even pending
appeal and the posting of a bond by the employer shall not stay the execution for
reinstatement.
The legislative content is quite obvious, i.e., to make an award of
reinstatement immediately enforceable, even pending appeal. To require the
application for and issuance of a writ of execution as prerequisites for the execution
of a reinstatement award would certainly betray and run counter to the very object
and intent of Article 223, i. e., the immediate execution of a reinstatement order. The
reason is simple. An application for a writ of execution and its issuance could be
delayed for numerous reasons. A mere continuance or postponement of a scheduled
hearing, for instance, or an inaction on the part of the Labor Arbiter or the NLRC
could easily delay the issuance of the writ thereby setting at naught the strict
mandate and noble purpose envisioned by Article 223. In other words, if the
55
requirements of Article 224 were to govern, as we so declared in Maranaw, then the
executory nature of a reinstatement order or award contemplated by Article 223 will
be unduly circumscribed and rendered ineffectual. In enacting the law, the legislature
is presumed to have ordaineda valid and sensible law, one which operates no further
than may be necessary to achieve its specific purpose. Statutes, as a rule, are to be
construed in the light of the purpose to be achieved and the evil sought to be
remedied. And where statues are fairly susceptible of two or more construction, that
construction should be adopted which will most tend to give effect to the manifest
intent of the law maker and promote the object for which the statute was enacted,
and a construction should be rejected which would tend to render abortive other
provisions of the statute and to defeat the object which the legislator sought to attain
by its enactment. In introducing a new rule on the reinstatement aspect of a labor
decision under R.A. No. 6715, Congress should not be considered to be indulging in
mere semantic exercise. On appeal, however, the appellate tribunal concerned may
enjoin or suspend the reinstatement order in the exercise of its sound discretion.
G.R. No. 74531 June 28, 1988 PIZZA INN v NLRC
Facts: Before the expiration of the 6-month probationary period, Felicidad
Fontanilla resigned. Claiming that she was forced to resign by the petitioner, the
former filed a complaint against the latter. Petitioner appealed from the decision of
the LA favoring private respondent. Petitioner's appeal was dismissed by the NLRC.
The case was elevated to SC but also with no favorable result.
Due to the finality of the judgment in this case, the LA issued a second alias
Writ of Execution dated September 8, 1984 against petitioner wherein the amount
involved (representing backwages of private respondent among others, from April
24, 1982 to September 30, 1984) amounted to P29,001.00 as per computation of the
Socio-Economic Analyst of the Commission. Petitioner filed a Motion to Recompute
and to quash/stay writ of execution, notice of garnishment under supersedeas bond
on October 19, 1984.
Issue: May an employer be ordered to reinstate private respondent after the closure
of its branch or outlet where private respondent was employed, and to pay private
respondent back wages even after the date of closure and continuously without limit
considering that there was no way to reinstate the workers anymore?
 Magsino Labor Relations Digests, Arbues 2019
Held: No. Reinstatement became a legal impossibility due to the fact that Pizza-In
closed its business in 1984 due to financial losses. However, she is entitled to
damages.
It is on record that the Socio-Economic Analyst of the public respondent
computed that award of P29,001.00 covering the period from April, 1982 to
September, 1984, which amount complainant admittedly received after the NLRC
Sheriff garnished from the amount deposited at the Philippine Commercial and
International Bank despite the pendency of petitioner's appeal questioning the order
of the Labor Arbiter's denial of petitioner's Motion to Recompute and to Quash/Stay
Writ of Execution/Notice of Garnishment under Supersedeas Bond.
Computing backwages beyond January 1984, the date of closure, would not
only be unjust but confiscatory as well as violative of the Constitution depriving the
petitioner of his property rights. The unlimited award would not only prejudice the
herein petitioner but would, as well, impose a crushing financial burden on the
already financially distressed petitioner corporation. The fact that the computation of
the backwages was done ex-parte without giving petitioner a chance or opportunity
to comment on said computation is clearly a denial of due process.
G.R. No. 101427 November 8, 1993 CONSUELO KUNTING v NLRC
Facts: Consuelo B. Kunting was employed as a teacher by respondent St. Joseph
School in Gov. Camins Avenue, Zamboanga City. School did not renew her
employment contract for the school year 1988-89, thereby terminating her
employment with the school. The termination letter was dated April 4, 1988.
The LA held that there was illegal dismissal and awarded separation pay in
lieu of reinstatement due to strained relations. However, the NLRC modified the
grant of 6 months backwages and ordered instead the payment of backwages without
qualification and deduction, computed from the date of promulgation of its decision.
Issue: WON separation pay may be awarded in lieu of reinstatement.
Held: Not in this case. An illegally dismissed employee's right to reinstatement is
not absolute. In the case at bar, however, the peculiar circumstances surrounding the
dismissal of petitioner simply do not show such kind of strained relationship as to
warrant the severance of the working relationship between the parties.
56
Strained relations must be of such a nature or degree as to preclude
reinstatement. But, where the differences between the parties are neither personal nor
physical, nor serious, then there is no reason why the illegally dismissed employee
should not be reinstated rather than simply given separation pay and backwages.
More so if the cause of the perceived 'strained relations' is the filing of a complaint
for illegal dismissal.
Whatever resentments had been harbored by petitioner upon her
unceremonious dismissal after having been employed by St. Joseph School for more
than 16 years is understandable. Such resentments, however, would not suffice to
deny her reemployment because to do so would render for naught her constitutional
right to security of tenure and her corollary right to reinstatement under Article 279.
Petitioner is, after all, a permanent teacher as she had rendered more than three years
of satisfactory service.
*Computing award for backwages
Closely related to the right to reinstatement is the employee's right to
receive backwages which represent the compensation that an unjustly dismissed
employee should have received had said employee not be dismissed. Petitioner
claims that she is entitled to full backwages (computed from the date of dismissal
until actual reinstatement) under Article 279. This contention, however, is not
supported by prevailing jurisprudence which limits the award of backwages to 3
years without qualification and deduction.
While RA 6715 amending Sec. 279 grants full backwages to dismissed
employees computed from the date of their illegal dismissal up to the date of actual
reinstatement, the same cannot be applied in the case at bar. This is because
petitioner was illegally dismissed on April 4, 1988, or before the effectivity of R.A.
6715 on March 21, 1989. In Lantion v. NLRC (181 SCRA 513 [1990]), We held that
nothing in R.A. 6715 provides for its retroactive application. Necessarily, awards of
backwages in cases of illegal dismissal initiated before the effectivity of R.A. 6715
will have to be resolved by applying the three-year limit formulated in the case of
Mercury, Drug v. CIR.
 Magsino Labor Relations Digests, Arbues 2019
G.R. No. 114250 April 5, 1995 DOMINICO CONGSON v NLRC
Facts: Petitioner is the registered owner of Southern Fishing Industry. Private
respondents were hired on various dates by petitioner’s as regular piece-rate workers.
They were uniformly paid at a rate of P1.00 per tuna weighing 30 to 80 kilos per
movement. During the first week of June 1990, petitioner notified his workers of his
proposal to reduce the rate-per-tuna movement due to the scarcity of tuna. Private
respondents resisted petitioner's proposed rate reduction. When they reported for
work the next day, they were informed that they had been replaced by a new set of
workers, When they requested for a dialogue with the management, they were
instructed to wait for further notice. They waited for the notice of dialogue for a full
week but in vain. They filed a case for constructive dismissal and separation pay. LA
ruled in favor of respondents.
Issue: WON separation pay may be awarded in lieu of reinstatement.
Held: Yes. . As a permissible exception to the general rule, separation pay may be
awarded to the employee in lieu of reinstatement, by reason of strained relationship
between the employer and employee.
Firstly, petitioner consistently refused to re-admit private respondents in his
establishment. Petitioner even replaced private respondents with a new set of
workers to perform the tasks of private respondents; Moreover, although petitioner
ostensibly argued in his supplemental motion for reconsideration that reinstatement
should have been the proper remedy in the case at bench on his premise that the
existence of strained relationship was not adequately established, yet petitioner never
sincerely intended to effect the actual reinstatement of private respondents. For if
petitioner were to pursue further the entire logic of his argument, the prayer in his
supplemental motion for reconsideration should have contained not just the mere
deletion of the award of separation pay, but precisely, the reinstatement of private
respondents. Quite obviously then, notwithstanding petitioner's argument for
reinstatement he was only interested in the deletion of the award of separation pay to
private respondents.
And secondly, private respondents themselves, from the very start, had
already indicated their aversion to their continued employment in petitioner's
establishment. The very filing of the case for separation pay. It appears that relations
between the petitioner and the complainants have been so strained that the
complainants are no longer willing to be reinstated. As such reinstatement would
57
only exacerbate the animosities that have developed between the parties, the public
respondents were correct in ordering instead the grant of separation pay to the
dismissed employees in the interest of industrial peace.
G.R. No. 152308. January 26, 2005 ACESITE CORPORATION v NLRC
Facts: Gonzales was a security guard. After exhausting his paid vacation and sick
leaves, he filed for an emergency leave which was not approved. However, he did
not report for work thus was asked to file a written letter requiring explanation. He
explained that he was recovering from stomach disorder and needed to go home to
Abra. On May 7, 1998, he received a letter (sent on May 5) requiring him to report
back to work. He reported on May 8 but was barred from entering the premises
because petitioner issued a termination letter through an inter-office memo.
Issue: WON reinstatement should be made.
Held: No. In illegal dismissal cases, reinstatement to an illegally dismissed
employees former position may be excused on the ground of strained relations. This
may be invoked against employees whose positions demand trust and confidence, or
whose differences with their employer are of such nature or degree as to preclude
reinstatement.
In the case at bar, Gonzales was Chief of Security, whose duty was to
manage the operation of the security areas of the hotel to provide and ensure the
safety and security of the hotel guests, visitors, management, staff and their
properties according to company policies and local laws. It cannot be gainsaid that
Gonzales position is one of trust and confidence, he being in charge of the over-all
security of said hotel. Thus, reinstatement is no longer possible. In lieu thereof,
Acesite is liable to pay separation pay of 1 month for every year of service.
As to the award of moral and exemplary damages, this Court finds it
unwarranted. Moral damages are recoverable only where the dismissal of the
employees was attended by bad faith or fraud or constituted an act oppressive to
 Magsino Labor Relations Digests, Arbues 2019
labor or was done in a manner contrary to morals, good customs or public policy.
Exemplary damages on the other hand may be awarded only if the dismissal was
effected in a wanton, oppressive or malevolent manner. Though these grounds have
been alleged by Gonzales, they were not sufficiently proven.
G.R. No. 140518 December 16, 2004
MANILA DIAMOND HOTEL EMPLOYEES’ UNION v CA
Facts: On November 29, 1997, the Union staged a strike against the Hotel.
Numerous confrontations between the two parties followed, creating an obvious
strain between them. The Hotel claims that the strike was illegal and it had to dismiss
some employees for their participation in the allegedly illegal concerted activity. The
Union, on the other hand, accused the Hotel of illegally dismissing the workers. The
secretary of labor ordered a payroll reinstatement but the hotel refused.
Issue: WON strained relations warrants payroll reinstatement.
Held: No. A strained relationship between the striking employees and
management is no reason for payroll reinstatement in lieu of actual reinstatement.
Petitioner correctly points out that labor disputes naturally involve strained relations
between labor and management, and that in most strikes, the relations between the
strikers and the non-strikers will similarly be tense. Bitter labor disputes always
leave an aftermath of strong emotions and unpleasant situations. Nevertheless, the
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government must still perform its function and apply the law, especially if, as in this
case, national interest is involved.
It is, therefore, evident from the foregoing that the Secretary’s subsequent
order for mere payroll reinstatement constitutes grave abuse of discretion amounting
to lack or excess of jurisdiction. Indeed, this Court has always recognized the "great
breadth of discretion" by the Secretary once he assumes jurisdiction over a labor
dispute. However, payroll reinstatement in lieu of actual reinstatement is a departure
from the rule in these cases and there must be showing of special circumstances
rendering actual reinstatement impracticable, as in the UST case aforementioned, or
otherwise not conducive to attaining the purpose of the law in providing for
assumption of jurisdiction by the Secretary of Labor and Employment in a labor
dispute that affects the national interest. None appears to have been established in
this case. Even in the exercise of his discretion under Article 236(g), the Secretary
must always keep in mind the purpose of the law. Time and again, this Court has
held that when an official by-passes the law on the asserted ground of attaining a
laudable objective, the same will not be maintained if the intendment or purpose of
the law would be defeated.
G.R. No. 152329. April 22, 2003 ALEJANDRO ROQUERO v PAL
Facts: Petitioner was a mechanic for PAL. He got caught using shabu inside the
airport. On March 30, 1994, Roquero received a notice of administrative charge for
violating the PAL Code of Discipline. They were required to answer the charges and
were placed under preventive suspension. Roquero in his reply to notice of
administrative charge, assailed his arrest and asserted that he was instigated by PAL
to take the drugs. He argued that he was instigated by the airport manager. He based
his argument on the fact that the manager was not arrested even though they were
together at the time of the crime.
The NLRC ruled in favor of complainants as it likewise found PAL guilty
of instigation. It ordered reinstatement to their former positions but without
backwages. Complainants filed a motion for a writ of execution of the order of
reinstatement. The LA granted the motion but PAL refused to execute the said order
on the ground that they have filed a Petition for Review before CA. CA reversed the
decision of the NLRC and upheld the dismissal of Roquero. However, it denied the
 Magsino Labor Relations Digests, Arbues 2019
award of separation pay and attorneys fees to Roquero on the ground that one who
has been validly dismissed is not entitled to those benefits.
Issue: WON order of reinstatement is immediately executor.
Held: Yes. The order of reinstatement is immediately executory. The unjustified
refusal of the employer to reinstate a dismissed employee entitles him to payment of
his salaries effective from the time the employer failed to reinstate him despite the
issuance of a writ of execution. Unless there is a restraining order issued, it is
ministerial upon the Labor Arbiter to implement the order of reinstatement. In the
case at bar, no restraining order was granted. Thus, it was mandatory on PAL to
actually reinstate Roquero or reinstate him in the payroll. Having failed to do so,
PAL must pay Roquero the salary he is entitled to, as if he was reinstated, from the
time of the decision of the NLRC until the finality of the decision of this Court.
IN VIEW WHEREOF, the dismissal of petitioner Roquero is AFFIRMED,
but respondent PAL is ordered to pay the wages to which Roquero is entitled from
the time the reinstatement order was issued until the finality of this decision.
MARILOU GENUINO v NLRC G.R. Nos. 142732-33 December 4, 2007
Facts: On August 23, 1993, Citibank sent Genuino (a treasurer) a letter charging
her with knowledge and/or involvement in transactions which were irregular or even
fraudulent. In the same letter, Genuino was informed she was under preventive
suspension. On September 13, 1993, Citibank sent another letter demanding
explanation in writing 3 days from her receipt hereof why her employment should
not be terminated in view of her involvement in irregular transactions. She was also
directed to appear in an administrative investigation. Despite this, petitioner did not
appear nor submit a written explanation. Genuinos employment was terminated.
LA held that the dismissal was without just cause and failed to comply with
administrative due process. NLRC modified judgment holding the dismissal as valid
but ordered Citibank to pay the salaries due to the complainant from the date it
reinstated complainant in the payroll (computed at P60k a month, as found by the
LA) up to and until the date of this decision.
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Issue: Effect of dismissal for just cause but lack due process.
Held: As Assistant Vice-President of Citibanks Treasury Department, Genuino
was tasked to solicit investments, and peso and dollar deposits for, and keep them in
Citibank; and to sell and/or push for the sale of Citibanks financial products, such as
the MBS, for the account and benefit of Citibank. She held a position of trust and
confidence. There is no way she could deny any knowledge of the banks policies nor
her understanding of these policies as reflected in the survey done by the bank. All
the pieces of evidence compel us to conclude that Genuino did not have her
employers interest. All told, Citibank had valid grounds to dismiss Genuino on
ground of loss of confidence. In view of Citibanks failure to observe due process,
however, nominal damages are in order but the amount is hereby raised to P30k
pursuant to Agabon v. NLRC.
If the decision of the LA is later reversed on appeal upon the finding that
the ground for dismissal is valid, then the employer has the right to require the
dismissed employee on payroll reinstatement to refund the salaries s/he received
while the case was pending appeal, or it can be deducted from the accrued benefits
that the dismissed employee was entitled to receive from his/her employer under
existing laws, collective bargaining agreement provisions, and company practices.
However, if the employee was reinstated to work during the pendency of the appeal,
then the employee is entitled to the compensation received for actual services
rendered without need of refund.
JUANITO GARCIA v PAL G.R. No. 164856 January 20, 2009
Facts: The case stemmed from the administrative charge filed by PAL against its
employees-herein petitioners after they were allegedly caught in the act of sniffing
shabu when a team of company security personnel and law enforcers raided PAL.
After due notice, PAL dismissed petitioners on October 9, 1995 for transgressing the
PAL Code of Discipline, prompting them to file a complaint for illegal dismissal and
damages which was, by Decision of January 11, 1999, resolved by the LA in their
favor, thus ordering PAL to, inter alia, immediately comply with the reinstatement
aspect of the decision. During this time, PAL was placed under Permanent
Rehabilitation.
CA reversed LA on 2 grounds: (1) a subsequent finding of a valid dismissal
removes the basis for implementing the reinstatement aspect of LA decisio, and (2)
the impossibility to comply with the reinstatement order due to corporate
rehabilitation provides a reasonable justification for the failure to exercise the
options under Article 223.
 Magsino Labor Relations Digests, Arbues 2019
Issue: WON subsequent finding of valid dismissal render order of reinstatement
nugatory.
Held: No. The social justice principles of labor law outweigh or render
inapplicable the civil law doctrine of unjust enrichment.
There are 2 views regarding this matter. The 1 st view is Even if the order of
reinstatement of the LA is reversed on appeal, it is obligatory on the part of the
employer to reinstate and pay the wages of the dismissed employee during the period
of appeal until reversal by the higher court. On the other hand, if the employee has
been reinstated during the appeal period and such reinstatement order is reversed
with finality, the employee is not required to reimburse whatever salary he received
for he is entitled to such, more so if he actually rendered services during the period.
In other words, a dismissed employee whose case was favorably decided by the
Labor Arbiter is entitled to receive wages pending appeal upon reinstatement, which
is immediately executory. Unless there is a restraining order, it is ministerial upon
the Labor Arbiter to implement the order of reinstatement and it is mandatory on the
employer to comply therewith.
The 2nd view is espoused in the case of Genuino. If the decision of the labor
arbiter is later reversed on appeal upon the finding that the ground for dismissal is
valid, then the employer has the right to require the dismissed employee on payroll
reinstatement to refund the salaries s/he received while the case was pending appeal,
or it can be deducted from the accrued benefits that the dismissed employee was
entitled to receive from his/her employer under existing laws, collective bargaining
agreement provisions, and company practices. However, if the employee was
reinstated to work during the pendency of the appeal, then the employee is entitled to
the compensation received for actual services rendered without need of refund.
Prior to Genuino, there had been no known similar case containing a
dispositive portion where the employee was required to refund the salaries received
on payroll reinstatement. In fact, in a catena of cases, the Court did not order the
refund of salaries garnished or received by payroll-reinstated employees despite a
subsequent reversal of the reinstatement order. The dearth of authority supporting
Genuino is not difficult to fathom for it would otherwise render inutile the rationale
of reinstatement pending appeal.
The Genuino ruling not only disregards the social justice principles behind
the rule, but also institutes a scheme unduly favorable to management. Under such
scheme, the salaries dispensed pendente lite merely serve as a bond posted in
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installment by the employer. For in the event of a reversal of the Labor Arbiters
decision ordering reinstatement, the employer gets back the same amount without
having to spend ordinarily for bond premiums. This circumvents, if not directly
contradicts, the proscription that the posting of a bond [even a cash bond] by the
employer shall not stay the execution for reinstatement.
The rule to be followed is the 1st one. The Court reaffirms the prevailing
principle that even if the order of reinstatement of the Labor Arbiter is reversed on
appeal, it is obligatory on the part of the employer to reinstate and pay the wages of
the dismissed employee during the period of appeal until reversal by the higher
court. It settles the view that the Labor Arbiter's order of reinstatement is
immediately executory and the employer has to either re-admit them to work under
the same terms and conditions prevailing prior to their dismissal, or to reinstate them
in the payroll, and that failing to exercise the options in the alternative, employer
must pay the employee’s salaries
Issue: WON Rehabilitation bars reinstatement.
Held: Yes. After the labor arbiters decision is reversed by a higher tribunal, the
employee may be barred from collecting the accrued wages, if it is shown that the
delay in enforcing the reinstatement pending appeal was without fault on the part of
the employer.
The test is two-fold: (1) there must be actual delay or the fact that the order
of reinstatement pending appeal was not executed prior to its reversal; and (2) the
delay must not be due to the employers unjustified act or omission. If the delay is
due to the employers unjustified refusal, the employer may still be required to pay
the salaries notwithstanding the reversal of the Labor Arbiters decision.
It is settled that upon appointment by the SEC of a rehabilitation receiver,
all actions for claims before any court, tribunal or board against the corporation shall
ipso jure be suspended. As stated early on, during the pendency of petitioners
complaint before the Labor Arbiter, the SEC placed respondent under an Interim
Rehabilitation Receiver. After the Labor Arbiter rendered his decision, the SEC
replaced the Interim Rehabilitation Receiver with a Permanent Rehabilitation
Receiver.
Case law recognizes that unless there is a restraining order, the
implementation of the order of reinstatement is ministerial and mandatory. This
injunction or suspension of claims by legislative fiat partakes of the nature of a
restraining order that constitutes a legal justification for respondents non-compliance
 Magsino Labor Relations Digests, Arbues 2019
with the reinstatement order. Respondents failure to exercise the alternative options
of actual reinstatement and payroll reinstatement was thus justified. Such being the
case, respondents obligation to pay the salaries pending appeal, as the normal effect
of the non-exercise of the options, did not attach.
In sum, the obligation to pay the employee’s salaries upon the employers
failure to exercise the alternative options under Article 223 of the Labor Code is not
a hard and fast rule, considering the inherent constraints of corporate rehabilitation.
G.R. No. 72644 December 14, 1987 ALFREDO PRIMERO v IAC
Facts: Since August 1, 1974, appellee's bus dispatcher did not assign any bus to be
driven by appellant Primero. No reason or cause was given by the dispatcher to
appellant for not assigning a bus to the latter for 23 days. On the 23rd day, appellant
was told to look for another job. He filed a case for illegal dismissal, and for
recovery of back wages and reinstatement. Later on, he withdraw his case to file a
damage suit with a civil court. On August 11, 1980 the Trial Court rendered
judgment dismissing the complaint on the ground of lack of jurisdiction, for the
reason that at the time that the complaint was filed. on August 17, 1978, the law —
the Labor Code as amended by PD 1367, eff. May 1, 1978 — conferred exclusive,
original jurisdiction over claims for moral or other damages, not on ordinary courts,
but on Labor Arbiters.
Issue: WON Civil Courts may entertain suits for damages arising from EER.
Held: No. It is clear that the question of the legality of the act of dismissal is
intimately related to the issue of the legality of the manner by which that act of
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dismissal was performed. But while the Labor Code treats of the nature of, and the
remedy available as regards the first — the employee's separation from employment
— it does not at all deal with the second — the manner of that separation — which is
governed exclusively by the Civil Code. In addressing the first issue, the Labor
Arbiter applies the Labor Code; in addressing the second, the Civil Code. And this
appears to be the plain and patent intendment of the law. For apart from the reliefs
expressly set out in the Labor Code flowing from illegal dismissal from employment,
no other damages may be awarded to an illegally dismissed employee other than
those specified by the Civil Code. Hence, the fact that the issue-of whether or not
moral or other damages were suffered by an employee and in the affirmative, the
amount that should properly be awarded to him in the circumstances-is determined
under the provisions of the Civil Code and not the Labor Code, obviously was not
meant to create a cause of action independent of that for illegal dismissal and thus
place the matter beyond the Labor Arbiter's jurisdiction.
Thus, an employee who has been illegally dismissed causing him to suffer
moral damages (as determined by the Civil Code), has a cause of action for
reinstatement and recovery of back wages and damages. When he institutes
proceedings before the Labor Arbiter, he should make a claim for all said reliefs. He
cannot be permitted to prosecute his claims piecemeal. He cannot institute
proceedings separately and contemporaneously in a court of justice upon the same
cause of action or a part thereof. He cannot and should not be allowed to sue in two
forums: one, before the Labor Arbiter for reinstatement and recovery of back wages,
or for separation pay, upon the theory that his dismissal was illegal; and two, before
a court of justice for recovery of moral and other damages, upon the theory that the
manner of his dismissal was unduly injurious, or tortious. This is what in procedural
law is known as splitting causes of action, engendering multiplicity of actions.
It is against such mischiefs that the Labor Code amendments just discussed
are evidently directed, and it is such duplicity which the Rules of Court regard as
ground for abatement or dismissal of actions, constituting either litis pendentia (auter
action pendant) or res adjudicata, as the case may be. But this was precisely what
Primero's counsel did. He split Primero's cause of action; and he made one of the
split parts the subject of a cause of action before a court of justice. Consequently, the
judgment of the Labor Arbiter granting Primero separation pay operated as a bar to
his subsequent action for the recovery of damages before the Court of First Instance
under the doctrine of res judicata, The rule is that the prior "judgment or order is,
with respect to the matter directly adjudged or as to any other matter that could have
been raised in relation thereto, conclusive between the parties and their successors in
interest by title subsequent to the commencement of the action or special proceeding,
litigating for the same thing and under the same title and in the same capacity.
 Magsino Labor Relations Digests, Arbues 2019
G.R. No. 78345 September 21, 1990 JOSE M. MAGLUTAC v NLRC
Facts: On October 3, 1984, Manager Maglutac received a notice of termination.
The notice of termination reads:
You are hereby notified and advised that the Board of Directors of this
Corporation, acting on the unanimous resolution, have decided that your
continued employment in this company, will not be in the best interest of
the corporation.
The termination of your services is without prejudice to any future action,
private or legal, that the Company may take to demand restitution, enforce
collection or require repayment of whatever financial obligations you now
have incurred, to the company.
It turns out that the company lost trust and confidence on Maglutac because
his family established a company that directly competes with Commart. LA ruled
that there was illegal dismissal and Maglutac must be reinstated with full backwages.
The NLRC affirmed the finding of the Labor Arbiter that complainant was illegally
dismissed by Commart but it deleted the award for moral and exemplary damages in
favor of complainant and absolved Jesus T. Maglutac from any personal liability to
the complainant.
Issue: WON Maglutac is entitled to damages.
Held: Yes. NLRC held that his dismissal was not merely without just cause but
was also an act of vendetta, malice attended the act thus, he is entitled to moral and
exemplary damages under the Civil Code.
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The legislative intent appears clear to allow recovery in proceedings before
LA of moral and other forms of damages, in all cases or matters arising from EER.
This would no doubt include, particularly, instances where an employee has been
unlawfully dismissed. In such a case, the LA has jurisdiction to award to the
dismissed employee not only the reliefs specifically provided by labor laws, but also
moral and other forms of damages governed by the Civil Code.
*Moral damages
Moral damages would be recoverable, for example, where the dismissal of
the employee was not only effected without authorized cause and /or due process for
which relief is granted by the Labor Code but was attended by bad faith or fraud, or
constituted an act oppressive to labor, or was done in a manner contrary to morals
good customs or public policy for which the obtainable relief is determined by the
Civil Code (not the Labor Code). Stated otherwise, if the evidence adduced by the
employee before the Labor Arbiter should establish that the employer did indeed
terminate the employee's services without just cause or without according him due
process, the Labor Arbiter's judgment shall be for the employer to reinstate the
employee and pay him his backwages or, exceptionally, for the employee simply to
receive separation pay. These are reliefs explicitly prescribed by the Labor Code. But
any award of moral damages by the Labor Arbiter obviously cannot be based on the
Labor Code but should be grounded on the Civil Code.
Moral damages may be awarded to compensate one for diverse injuries such
as mental anguish, besmirched reputation, wounded feelings and social humiliation.
It is however not enough that such injuries have arisen; it is essential that they have
sprung from a wrongful act or omission of the defendant which was the proximate
cause thereof.
*Exemplary damages
The complainant was dismissed without due process. His dismissal was
made effective immediately and he was not given an opportunity to present his side.
Where the employee's dismissal was effected without procedural fairness, an award
of exemplary damages in her favor can only be justified if her dismissal was affected
in a wanton, oppressive or malevolent manner
We agree however, with the contention of the Solicitor General that the
award by the Labor Arbiter of P 200,000.00 moral damages and P20,000.00
exemplary damages is excessive, In the exercise of our discretion, We reduce the
 Magsino Labor Relations Digests, Arbues 2019
award of damages to P40,000.00 as moral damages and P10,000.00 as exemplary
damages.
G.R. No. 118746 September 7, 1995 ATTY. TAGANAS v NLRC
Facts: Petitioner Atty. Taganas represented herein private respondents in a labor
suit conditioned upon a contingent fee arrangement granting the equivalent of 50%
of the judgment award plus three P300 appearance fee per hearing. The LA ruled in
favor of private respondents. This decision was appealed by Ultra and PTSI to the
NLRC but to no avail. During the execution stage of the decision, petitioner moved
to enforce his attorney's charging lien. Private respondents, aggrieved for receiving a
reduced award due to the attorney's charging lien, contested the validity of the
contingent fee arrangement they have with petitioner.
Finding the arrangement excessive, the Labor Arbiter ordered the reduction
of petitioner's contingent fee from fifty percent of the judgment award to ten percent.
Issue: WON the reduction of petitioner's contingent fee is warranted.
Held: Yes. A contingent fee arrangement is an agreement laid down in an express
contract between a lawyer and a client in which the lawyer's professional fee, usually
a fixed percentage of what may be recovered in the action is made to depend upon
the success of the litigation. This arrangement is valid in this jurisdiction. It is,
however, under the supervision and scrutiny of the court to protect clients from
unjust charges. Section 13 of the Canons of Professional Ethics states that "a contract
for a contingent fee, where sanctioned by law, should be reasonable under all the
circumstances of the case including the risk and uncertainty of the compensation, but
should always be subject to the supervision of a court, as to its reasonableness"
The financial capacity and economic status of the client have to be taken
into account in fixing the reasonableness of the fee. Noting that petitioner's clients
were lowly janitors who receive miniscule salaries and that they were precisely
63
represented by petitioner in the labor dispute to acquire what they have not been
receiving under the law and to alleviate their living condition, the reduction of
petitioner's contingent fee is proper. Labor cases, it should be stressed, call for
compassionate justice.
Furthermore, petitioner's contingent fee falls within the purview of Article
111 of the Labor Code. This article fixes the limit on the amount of attorney's fees
which a lawyer, like petitioner, may recover in any judicial or administrative
proceedings since the labor suit where he represented private respondents asked for
the claim and recovery of wages. In fact, We are not even precluded from fixing a
lower amount than the ten percent ceiling prescribed by the article when
circumstances warrant it. Nonetheless, considering the circumstances and the able
handling of the case, petitioner's fee need not be further reduced.
*Rule if the client failed to dispute excessive contingent fee
The contingent fee contract being unreasonable and unconscionable the
same was correctly disallowed by public respondent NLRC even with respect to the
four private respondents who agreed to pay higher percentage. Petitioner is reminded
that as a lawyer he is primarily an officer of the court charged with the duty of
assisting the court in administering impartial justice between the parties. When he
takes his oath, he submits himself to the authority of the court and subjects his
professional fees to judicial control.
G.R. No. 79907 March 16, 1989 SAMUEL CASAS LIM v NLRC
Facts: Respondent Victoria Calsado tried to resign from her position in Sweet
Lines but she was persuaded not to. Relations began to sour later, however, when she
repeatedly asked for payment of her commissions, which had accumulated and were
long overdue. She was terminated.
Issue: WON separation pay must be awarded.
Held: Yes. Separation pay is granted where reinstatement is no longer advisable
because of strained relations between the employee and the employer. Back wages
represent compensation that should have been earned but were not collected because
of the unjust dismissal. The bases for computing the two are different, the first being
usually the length of the employee's service and the second the actual period when he
was unlawfully prevented from working.
We have ordered the payment of both in proper case as otherwise the
employee might be deprived of benefits justly due him. Thus, if an employee who
 Magsino Labor Relations Digests, Arbues 2019
has worked only one year is sustained by the labor court after three years from his
unjust dismissal, granting him separation pay only would entitle him to only one
month salary. There is no reason why he should not also be paid three years back
wages corresponding to the period when he could not return to his work or could not
find employment elsewhere.
G.R. No. 83234 April 18, 1989 OSIAS ACADEMY v DOLE
Facts: The award by the respondent Minister of Labor 1 of separation pay, on
grounds of equity, to two employees of petitioner Osias Academy despite the
avowedly correct grant of clearance to it to terminate the services of said employees
on the ground of loss of confidence based on a satisfactory showing of
embezzlement of company funds, serious misconduct, etc., is challenged in the
special civil action of certiorari at bar.
Issue: WON separation pay may be awarded.
Held: No. There should be no question that where it comes to such valid but not
iniquitous causes as failure to comply with work standards, the grant of separation
pay to the dismissed employee may be both just and compassionate, particularly if he
has worked for some time with the company. It is not the employee's fault if he does
not have the necessary aptitude for his work but on the other hand the company
cannot be required to maintain him just the same at the expense of the efficiency of
its operations. He too may be validly replaced. Under these and similar
circumstances, however, the award to the employee of separation pay would be
sustainable under the social justice policy even if the separation is for cause.
But where the cause of the separation is more serious than mere
inefficiency, the generosity of the law must be more discerning. There is no doubt it
is compassionate to give separation pay to a salesman if he is dismissed for his
inability to fill his quota but surely he does not deserve such generosity if his offense
is misappropriation of the receipts of his sales. This is no longer mere incompetence
but clear dishonesty. A security guard found sleeping on the job is doubtless subject
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to dismissal but may be allowed separation pay since his conduct, while inept, is not
depraved. But if he was in fact not really sleeping but sleeping with a prostitute
during his tour of duty and in the company premises, the situation is changed
completely. This is not only inefficiency but immorality and the grant of separation
pay would be entirely unjustified.
*Separation pay as measure of social justice
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. The policy of
social justice is not intended to countenance wrongdoing simply because it is
committed by the underprivileged.
ALAN GUSTILO v WYETH PHILIPPINES
G.R. No. 149629 October 4, 2004
Facts: Gustilo was employed by Wyeth Philippines, Inc., respondent company, as
a pharmaceutical territory manager. Petitioners employment records show that
respondent company, on various dates, reprimanded and suspended him for
habitually neglecting to submit his periodic reports.
Petitioner submitted to respondent company a plan of action where he
committed to make an average of 18 daily calls to physicians; submit promptly all
periodic reports; and ensure 95% territory program performance for every cycle.
However, petitioner failed to achieve the above objectives, prompting respondent
company to send him 2 separate notices dated February 20, 1996 and April 10, 1996,
charging him with willful violation of company rules and regulations and directing
him to submit a written explanation. On May 22, 1996, he was terminated.
 Magsino Labor Relations Digests, Arbues 2019
NLRC ordered reinstatement or in lieu therof, separation pay. CA held that
dismissal was valid but awarded him separation pay considering the mitigating
factors of length of service, the loyalty awards he received.
Issue: WON separation pay shall be awarded.
Held: No. The general rule is separation pay shall not be awarded if there’s a valid
dismissal. In the case at bar, we find no exceptional circumstances to warrant the
grant of financial assistance or separation pay to petitioner. It bears stressing that
petitioner did not only violate company disciplinary rules and regulations. As found
by the CA, he falsified his employment application form by not stating therein that
he is the nephew of Mr. Danao, respondent Wyeths Nutritional Territory Manager.
Also, on February 2, 1993, he was suspended for falsifying a gasoline receipt. On
June 28, 1993, he was warned for submitting a false report of his trade outlet calls.
On September 8, 1993, he was found guilty of unauthorized availment of sick,
vacation and emergency leaves. These infractions manifest his slack of moral
principle. In simple term, he is dishonest.
Financial assistance may be allowed as a measure of social justice in
exceptional circumstances and as an equitable concession. We are likewise mindful
that financial assistance is allowed only in those instances where the employee is
validly dismissed for causes other than serious misconduct or those reflecting on his
moral character.
G.R. No. 86932 June 27, 1990 DBP v and DOROTHY S. ANCHETA
Facts: Philippine Smelter Corporation mortgaged its assets with DBP. PSC failed
to pay the loan thus there was extrajudicial foreclosure.
On February 10, 1987, 40 petitioners filed a Petition for Involuntary
Insolvency against PSC and DBP, impleading as co-respondents therein Jose
Panganiban Ice Plant and Cold Storage et al.
On February 13, 1987, herein private respondents filed a complaint with the
DOL(E) against PSC and DBP for nonpayment of salaries, 13th month pay,
incentive leave pay and separation pay. DBP filed its position paper on September 7,
1987, invoking the absence of EER between private respondents and DBP and
submitting that when DBP foreclosed the assets of PSC, it did so as a foreclosing
creditor.
65
NLRC held DBP liable for unpaid wages of private respondents "not as a
majority stockholder of respondent PSC, but as the foreclosing creditor who
possesses the assets of said PSC by virtue of the auction sale it held in 1987." In
addition, the NLRC held that the labor arbiter is correct in assuming jurisdiction
because "the worker's preference to the amount secured by DBP by virtue of said
foreclosure sales of PSC properties arose out of or are connected or interwoven with
the labor dispute brought forth by appellees against PSC and DBP.
Issue: WON a foreclosing creditor is liable for unpaid wages.
Held: No. During the dates material to the foregoing proceedings, Article 110 of
the Labor Code read:
Art. 110.Worker preference in case of bankruptcy. — In the event of
bankruptcy or liquidation of an employer's business, his workers shall enjoy
first preference as regards wages due them for services rendered during the
period prior to the bankruptcy or liquidation, any provision of law to the
contrary notwithstanding. Unpaid wages shall be paid in full before other
creditors may establish any claim to a share in the assets of the employer.
It is quite clear from the provisions that a declaration of bankruptcy or a
judicial liquidation must be present before the worker's preference may be enforced.
The claims of all creditors whether preferred or non- preferred, the Identification of
the preferred ones and the totality of the employer's asset should be brought into the
picture. There can then be an authoritative, fair, and binding adjudication instead of
the piece meal settlement which would result from the questioned decision in this
case.
Republic Act No. 6715, which took effect on March 21, 1989, amended Article 110
of the Labor Code to read as follows:
Art. 110.Worker preference in case of bankruptcy. — In the event of
bankruptcy or liquidation of an employer's business, his workers shall enjoy
first preference as regards their unpaid wages and other monetary claims,
any provision of law to the contrary notwithstanding. Such unpaid wages
and monetary claims shall be paid in full before the claims of the
Government and other creditors may be paid.
Despite said amendments, however, the same interpretation of Article 110
as applied in the aforesaid case of Development Bank of the Philippines vs. Hon.
Labor Arbiter Ariel C. Santos, et al., supra, was adopted by this Court in the recent
 Magsino Labor Relations Digests, Arbues 2019
case of Development Bank of the Philippines vs. National Labor Relations
Commission, et. al., For facility of reference, especially the rationalization for the
conclusions reached therein, we reproduce the salient portions of the decision in this
later case.
Notably, the terms "declaration" of bankruptcy or "judicial" liquidation have been
eliminated but liquidation proceedings is still needed.
1. Because of its impact on the entire system of credit, Article 110 of the
Labor Code cannot be viewed in isolation but must be read in relation to the Civil
Code scheme on classification and preference of credits.
2. In the same way that the Civil Code provisions on classification of credits
and the Insolvency Law have been brought into harmony, so also must the kindred
provisions of the Labor Law be made to harmonize with those laws.
3. In the event of insolvency, a principal objective should be to effect an
equitable distribution of the insolvent's property among his creditors. To accomplish
this there must first be some proceeding where notice to all of the insolvent's
creditors may be given and where the claims of preferred creditors may be bindingly
adjudicated. 1989).
A preference of credit bestows upon the preferred creditor an advantage of
having his credit satisfied first ahead of other claims which may be established
against the debtor. Logically, it becomes material only when the properties and
assets of the debtors are insufficient to pay his debts in full; for if the debtor is amply
able to pay his various creditors, in full, how can the necessity exist to determine
which of his creditors shall be paid first or whether they shall be paid out of the
proceeds of the sale of the debtor's specific property? Indubitably, the preferential
right of credit attains significance only after the properties of the debtor have been
inventoried and liquidated, and the claims held by his various creditors have been
established.
4. A distinction should be made between a preference of credit and a lien. A
preference applies only to claims which do not attach to specific properties. A hen
creates a charge on a particular property. The right of first preference as regards
unpaid wages recognize by Article 110 does not constitute a hen on the property of
the insolvent debtor in favor of workers. It is but a preference of credit in their favor,
a preference in application. It is a method adopted to determine and specify the order
in which credits should be paid in the final distribution of the proceeds of the
66
insolvent's assets. It is a right to a first preference in the discharge of the funds of the
judgment debtor.
Article 110 of the Labor Code does not purport to create a lien in favor of
workers or employees for unpaid wages either upon all of the properties or upon any
particular property owned by their employer. Claims for unpaid wages do not
therefore fall at all within the category of specially preferred claims established
under Articles 2241 and 2242 of the Civil Code, except to the extent that such claims
for unpaid wages are already covered by Article 2241, number 6: 'claims for laborers'
wages, on the goods manufactured or the work done; or by Article 2242, number 3:
'claims of laborers and other workers engaged in the construction, reconstruction or
repair of buildings, canals and other works, upon said buildings, canals or other
works.' To the extent that claims for unpaid wages fall outside the scope of Article
2241, number 6 and Article 2242, number 3, they would come within the ambit of
the category of ordinary preferred credits under Article 2244.'
5. The DBP anchors its claim on a mortgage credit. A mortgage directly and
immediately subjects the property upon which it is imposed, whoever the possessor
may be, to the fulfillment of the obligation for whose security it was constituted
(Article 2176, Civil Code). It creates a real right which is enforceable against the
whole world. It is a lien on an Identified immovable property, which a preference is
not. A recorded mortgage credit is a special preferred credit under Article 2242 (5) of
the Civil Code on classification of credits. The preference given by Article 110,
when not falling within Article 2241 (6) and Article 2242 (3) of the Civil Code and
not attached to any specific property, is an ordinary preferred credit although its
impact is to move it from second priority to first priority in the order of preference
established by Article 2244 of the Civil Coe.
In fact, under the Insolvency Law (Section 29) a creditor holding a
mortgage or hen of any kind as security is not permitted to vote in the election of the
assignee in insolvency proceedings unless the value of his security is first fixed or he
surrenders all such property to the receiver of the insolvent's estate.
6. Even if Article 110 and its Implementing Rule, as amended, should be
interpreted to mean 'absolute preference,' the same should be given only prospective
effect in line with the cardinal rule that laws shall have no retroactive effect, unless
the contrary is provided (Article 4, Civil Code). Thereby, any infringement on the
constitutional guarantee on non-impairment of obligation of contracts (Section 10,
Article III, 1987 Constitution) is also avoided. In point of fact, DBP's mortgage
credit antedated by several years the amendatory law, RA No. 6715. To give Article
110 retroactive effect would be to wipe out the mortgage in DBPs favor and expose
 Magsino Labor Relations Digests, Arbues 2019
it to a risk which it sought to protect itself against by requiring a collateral in the
form of real property.
In fine, the right to preference given to workers under Article 110 of the
Labor Code cannot exist in any effective way prior to the time of its presentation in
distribution proceedings. It will find application when, in proceedings such as
insolvency, such unpaid wages shall be paid in full before the 'claims of the
Government and other creditors' may be paid. But, for an orderly settlement of a
debtor's assets, all creditors must be convened, their claims ascertained and
inventoried, and thereafter the preference determined in the course of judicial
proceedings which have for their object the subjection of the property of the debtor
to the payment of his debts or other lawful obligations. Thereby, an orderly
determination of preference of creditors' claims is assured; the adjudication made
will be binding on all parties-in-interest, since those proceedings are proceedings in
rem; and the legal scheme of classification, concurrence and preference of credits in
the Civil Code, the Insolvency Law, and the Labor Code is preserved in harmony.
On the foregoing considerations and it appearing that an involuntary
insolvency proceeding has been instituted against PSC, private respondents should
properly assert their respective claims in said proceeding.
G.R. No. 108031 March 1, 1995 DBP v NLRC and LEONOR ANG
Facts: Ang was Executive Secretary with Tropical Philippines Wood Industries,
Inc. (TPWII) when DBP foreclosed the latter. On 14 December 1987 aggrieved by
the termination of her employment, private respondent filed with the Labor Arbiter a
complaint for separation pay, 13th month pay, vacation and sick leave pay, salaries
and allowances against TPWII, its General Manager, and petitioner.
Issue: WON Art. 110 of the Labor Code, as amended, which refers to worker
preference in case of bankruptcy or liquidation of an employer's business is
applicable to the present case notwithstanding the absence of any formal declaration
of bankruptcy or judicial liquidation of TPWII.
Held: A declaration of bankruptcy or a judicial liquidation must be present before
the worker's preference may be enforced. Thus, Article 110 of the Labor Code and
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its implementing rule cannot be invoked by the respondents in this case absent a
formal declaration of bankruptcy or a liquidation order.
Art. 110, which was amended by R.A. 6715 effective 21 March 1989, now
reads:
Art. 110.Worker preference in case of bankruptcy. — In the event of
bankruptcy or liquidation of an employer's business, his workers shall enjoy
first preference as regards their unpaid wages and other monetary claims,
any provision of law to the contrary notwithstanding. Such unpaid wages
and monetary claims shall be paid in full before the claims of the
Government and other creditors may be paid.
Obviously, the amendment expanded the concept of "worker preference" to
cover not only unpaid wages but also other monetary claims to which even claims of
the Government must be deemed subordinate. The Rules and Regulations
Implementing R.A. 6715, approved 24 May 1989, also amended the corresponding
implementing rule, and now reads:
Sec. 10. Payment of wages and other monetary claims in case of
bankruptcy. — In case of bankruptcy or liquidation of the employer's
business, the unpaid wages and other monetary claims of the employees
shall be given first preference and shall be paid in full before the claims of
government and other creditors may be paid.
Although the terms "declaration" (of bankruptcy) or "judicial" (liquidation)
have been notably eliminated, this Court did not alter its original position that the
right to preference given to workers under Art. 110 cannot exist in any effective way
prior to the time of its presentation in distribution proceedings.
Worker preference will find application when, in proceedings such as
insolvency, such unpaid wages shall be paid in full before the "claims of the
Government and other creditors" may be paid. But, for an orderly settlement of a
debtor's assets, all creditors must be convened, their claims ascertained and
inventoried, and thereafter the preferences determined. In the course of judicial
proceedings which have for their object the subjection of the property of the debtor
to the payment of his debts or other lawful obligations. Thereby, an orderly
determination of preference of creditors' claims is assured; the adjudication made
will be binding on all parties-in-interest since those proceedings are proceedings in
rem; and the legal scheme of classification, concurrence and preference of credits in
the Civil Code, the Insolvency Law, and the Labor Code is preserved in harmony
 Magsino Labor Relations Digests, Arbues 2019
A preference of credit bestows upon the preferred creditor an advantage of
having his credit satisfied first ahead of other claims which may be established
against the debtor. Logically, it becomes material only when the properties and
assets of the debtors are insufficient to pay his debts in full; for if the debtor is amply
able to pay his various creditors in full, how can the necessity exist to determine
which of his creditors shall be paid first or whether they shall be paid out of the
proceeds of the sale of the debtor's specific property. Indubitably, the preferential
right of credit attains significance only after the properties of the debtor have been
inventoried and liquidated, and the claims held by his various creditors have been
established.
A preference applies only to claims which do not attach to specific
properties. A lien creates a charge on a particular property. The right of first
preference as regards unpaid wages recognized by Article 110 does not constitute a
lien on the property of the insolvent debtor in favor of workers. It is but a preference
of credit in their favor, a preference in application. It is a method adopted to
determine and specify the order in which credits should be paid in the final
distribution of the proceeds of the insolvent's assets. It is a right to a first preference
in the discharge of the funds of the judgment debtor.
In the present case, there is as yet no declaration of bankruptcy nor judicial
liquidation of TPWII. Hence, it would be premature to enforce the worker's
preference.
G.R. No. 114787 June 2, 1995 MAM REALTY v NLRC
Facts: The case originated from a complaint filed with the Labor Arbiter by
private respondent Celso B. Balbastro against herein petitioners, MAM Realty
Development Corporation and its Vice President Manuel P. Centeno, for wage
differentials et al.
Issue: WON Centeno is jointly and severally liable.
Held: No. A corporation, being a juridical entity, may act only through its
directors, officers and employees. Obligations incurred by them, acting as such
corporate agents, are not theirs but the direct accountabilities of the corporation they
represent. True, solidary liabilities may at times be incurred but only when
exceptional circumstances warrant such as, generally, in the following cases:
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1. When directors and trustees or, in appropriate cases, the officers of
a corporation —
(a) vote for or assent to patently unlawful acts of the corporation;
(b) act in bad faith or with gross negligence in directing the corporate
affairs;
(c) are guilty of conflict of interest to the prejudice of the corporation,
its stockholders or members, and other persons.
2. When a director or officer has consented to the issuance of watered
stocks or who, having knowledge thereof, did not forthwith file with the
corporate secretary his written objection thereto.
3. When a director, trustee or officer has contractually agreed or
stipulated to hold himself personally and solidarily liable with the
Corporation.
4 When a director, trustee or officer is made, by specific provision of
law, personally liable for his corporate action.
In labor cases, for instance, the Court has held corporate directors and
officers solidarily liable with the corporation for the termination of employment of
employees done with malice or in bad faith.
In the case at Bench, there is nothing substantial on record that can justify,
prescinding from the foregoing, petitioner Centeno's solidary liability with the
corporation.
G.R. No. 70615 October 28, 1986
VIRGILIO CALLANTA v Carnation Phils
Facts: On June 1, 1979, respondent filed with MOLE an application for clearance
to terminate the employment of Virgilio Callanta on the alleged grounds of serious
misconduct and misappropriation of company funds amounting to P12k. On July 5,
1982, Virgilio Callanta filed with the MOLE a complaint for illegal dismissal. In its
position paper dated October 5, 1982, respondent Carnation put in issue the
timeliness of petitioner's complaint alleging that the same is barred by prescription
for having been filed more than 3 years after the date of Callanta's dismissal.
Issue: WON an action for illegal dismissal prescribes in 3 years pursuant to
Articles 291 and 292.
 Magsino Labor Relations Digests, Arbues 2019
Held: No. 4-year prescriptive period under Article 1146 of the New Civil Code,
applies by way of supplement, in the instant case. One's employment, profession,
trade or calling is a "property right," and the wrongful interference therewith is an
actionable wrong. The right is considered to be property within the protection of a
constitutional guaranty of due process of law. Clearly then, when one is arbitrarily
and unjustly deprived of his job or means of livelihood, the action instituted to
contest the legality of one's dismissal from employment constitutes, in essence, an
action predicated "upon an injury to the rights of the plaintiff," as contemplated
under Art. 1146 of the New Civil Code, which must be brought within 4 years.
In the instant case, the action for illegal dismissal was filed by petitioners
on July 5, 1982, or 3 years, 1 month and 5 days after the alleged effectivity date of
his dismissal on June 1, 1979 which is well within the 4-year prescriptive period
under Article 1146 of the New Civil Code.
Even on the assumption that an action for illegal dismissal falls under the
category of "offenses" or "money claims" under Articles 291 and 292, Labor Code,
which provide for a three-year prescriptive period, still, a strict application of said
provisions will not destroy the enforcement of fundamental rights of the employees.
As a statutory provision on limitations of actions, Articles 291 and 292 go to matters
of remedy and not to the destruction of fundamental rights. As a general rule, a
statute of limitation extinguishes the remedy only. Although the remedy to enforce a
right may be barred, that right may be enforced by some other available remedy
which is not barred.
G.R. No. 128024. May 9, 2000 BEBIANO BAEZ v HON. VALDEVILLA
Facts: Petitioner was the sales operations manager of Oro Marketing. Oro
indefinitely suspended Baez. LA ruled in favor of petitioner while NLRC dismissed
the appeal for being filed out of time. Thereafter, Oro filed a complaint for damages
before the RTC. Petitioner filed a motion to dismiss arguing that the action for
damages, having arisen from an EER, was squarely under the exclusive original
jurisdiction of the NLRC under Article 217(a), paragraph 4 and is barred by reason
of the final judgment in the labor case.
RTC dismissed the motion to dismiss because a perusal of the complaint
which is for damages does not ask for any relief under the Labor Code. It seeks to
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recover damages as redress for defendant's breach of his contractual obligation to
plaintiff who was damaged and prejudiced. The Court believes such cause of action
is within the realm of civil law, and jurisdiction over the controversy belongs to the
regular courts.
Issue: WON RTC has jurisdiction.
Held: No. Labor Code is even more committed to the view that on policy
grounds, and equally so in the interest of greater promptness in the disposition of
labor matters, a court is spared the often onerous task of determining what essentially
is a factual matter, namely, the damages that may be incurred by either labor or
management as a result of disputes or controversies arising from employer-employee
relations.
This is, of course, to distinguish from cases of actions for damages where
the EER is merely incidental and the cause of action proceeds from a different source
of obligation. Thus, the jurisdiction of regular courts was upheld where the damages,
claimed for were based on tort, malicious prosecution, or breach of contract, as when
the claimant seeks to recover a debt from a former employee or seeks liquidated
damages in enforcement of a prior employment contract.
Neither can we uphold the reasoning of respondent court that because the
resolution of the issues presented by the complaint does not entail application of the
Labor Code, the dispute is intrinsically civil. Article 217(a) bestows upon the LA
original and exclusive jurisdiction over claims for damages arising from EER. LA
has jurisdiction to award not only the reliefs provided by labor laws, but also
damages governed by the Civil Code.
G. R. No. 143215. July 11, 2002 SOLIMAN SECURITY SERVICES v CA
Facts: Respondent Valenzuela was a security guard until he was relieved with
promise to be reassigned. Valenzuela then filed a case for constructive dismissal with
payment for overtime et al, arguing that he was put on a floating status. Petitioner in
its answer alleged that Valenzuela refused the reassignment and the 29 days of
floating status was not tantamount to constructive dismissal.
LA ruled in favor of respondent. On appeal, petitioner failed to post the
appeal bond. Regardless, NLRC gave due course to the appeal upon the petitioner’s
submission of a manifestation and affidavit.
 Magsino Labor Relations Digests, Arbues 2019
Issue: WON non-posting of bond warrants dismissal of appeal.
Held: Yes. Private respondent would posit that the appeal of petitioners to the
NLRC should be considered to have been made on 19 January 1999 (when petitioner
submitted, pursuant to the NLRC order, a statement under oath to the effect that the
surety bond it had posted was genuine and confirmed it to be in effect until the final
termination of the case) which was beyond the ten-day period for perfecting an
appeal. The records before the Court would show, however, that an appeal bond was
posted with the NLRC at the same time that the appeal memorandum of petitioners
was filed on 16 October 1998. A certified true copy of the appeal bond would
indicate that it was received by the Commission on 16 October 1998, the date
reflected by the stamp-mark thereon. The surety bond issued by the Philippine
Charter Insurance Corporation bore the date of 14 October 1998 or two days before
the appeal memorandum was seasonably filed on 16 October 1998. The Order, dated
11 November 1998, of the NLRC categorically stated that records would disclose
that the instant appeal was accompanied by a surety bond, as the Decision sought to
be appealed involved a monetary award. The NLRC, in fact, ordered petitioner to
submit an affidavit to confirm that its appeal bond was genuine and would be in
force and effect until the final disposition of the case. The Commissions declaration
that the appeal was accompanied by a surety bond indicated that there had been
compliance with Article 223 of the Labor Code.
An appeal to the NLRC is perfected once an appellant files the
memorandum of appeal, pays the required appeal fee and, where an employer
appeals and a monetary award is involved, the latter posts an appeal bond or submits
a surety bond issued by a reputable bonding company. In line with the desired
objective of labor laws to have controversies promptly resolved on their merits, the
requirements for perfecting appeals are given liberal interpretation and construction.
G.R. No. 116464 March 1, 2000 RODENTO NAVARRO v NLRC
Facts: Petitioners are jeepney drivers on a boundary system. The dispatcher, told
the petitioners cannot go out on the usual working hours of 5 PM to 4 AM (night
shift) because their working hours were moved to a new schedule of work, 7 PM to 6
AM. Petitioners did not ply their route as protest. Petitioners were dismissed.
Petitioners filed a case for illegal dismissal asking for severance pay among
others. LA ruled in favor of petitioner. On April 3, 1992, private respondents were
served a copy of the decision of the labor arbiter. Aggrieved, they filed on April 13,
1992 with NLRC their memorandum on appeal. Nevertheless, it was only on April
30, 1992, that private respondents filed the appeal bond. Unfortunately, the aforesaid
70
bond was later discovered to be spurious because the person who signed it was no
longer connected with the insurance company for more than 10 years already. It was
only on July 20, 1993, that private respondents posted a substitute bond issued by
another company.
Issue: WON THE LA DECISION HAS BECOME FINAL FOR NON-FILING
OF A SUPERSEDEAS BOND WITHIN THE REGLEMENTARY PERIOD.
Held: Yes. The perfection of an appeal within the reglementary period and in the
manner prescribed by law is jurisdictional, and noncompliance with such legal
requirement is fatal and has the effect of rendering the judgment final and executory.
Such requirement cannot be trifled with.
Perfection of an appeal includes the filing, within the prescribed period, of
the memorandum of appeal containing, among others, the assignment of error/s, the
relief sought and, posting of the appeal bond. In case where the judgment involves a
monetary award, as in this case, the appeal may be perfected only upon posting of a
cash or surety bond issued by a reputable bonding company duly accredited by the
NLRC. The amount of the bond must be equivalent to the monetary award, exclusive
of moral and exemplary damages and attorney's fees.
The records indicate that private respondents received the copy of labor
arbiter's decision on April 3, hence, they had only until April 13 to perfect their
appeal. While private respondents filed their memorandum of appeal on time, they
posted surety bond only on April 30, which is beyond the ten-day reglementaty
period. Private respondents' failure to post the required appeal bond within the
prescribed period is inexcusable. Worse, the appeal bond was bogus having been
issued by an officer no longer connected with the bonding company, which was not
sufficiently explained by private respondents. For sure, they cannot avoid
responsibility by disavowing any knowledge of its fictitiousness for they were
required to secure bond only from reputable companies. Corollary, they should have
ensured that the bond is genuine, otherwise, the purpose of requiring the posting of
bond, that is, to guarantee the payment of valid and legal claims against the
employer, would not be served.
We are mindful of the fact that this Court, in a number of cases, has relaxed
this requirement on grounds of substantial justice and special circumstances of the
case. However, we find no cogent reason to apply this same liberal interpretation
herein when the bond posted was not genuine. In this case, there is really no bond
posted since a fake or expired bond is in legal contemplation merely a scrap of paper.
It should be stressed that the intention of lawmakers to make the bond an
 Magsino Labor Relations Digests, Arbues 2019
indispensable requisite for the perfection of an appeal by the employer is
underscored by the provision that an appeal by the employer may be perfected only
upon the posting of a cash or surety bond. The word "only" makes it perfectly clear
that the lawmakers intended the posting of a cash or surety bond by the employer to
be the exclusive means by which an employer's appeal may be perfected.
As the appeal filed by private respondents was not perfected within the
reglementary period, the running of the prescriptive period for perfecting an appeal
was not tolled. Consequently, the decision of the labor arbiter became final and
executory upon the lapse of ten calendar days from receipt of the decision. Hence,
the decision became immutable and it can no longer be amended nor altered by the
labor tribunal. Accordingly, inasmuch as the timely posting of appeal bond is an
indispensable and jurisdictional requisite and not a mere technicality of law, the
NLRC has no authority to entertain the appeal, much less to set aside the decision of
the labor arbiter in this case. Any amendment or alteration made which substantially
affects the final and executory judgment is null and void for lack of jurisdiction,
including the entire proceedings held for that purpose.
G.R. No. 108914 September 20, 1994
STAR ANGEL HANDICRAFT v NLRC
Facts: Respondent Fribaldos filed money claims against petitioner in LA. LA ruled
in favor of Frivaldos. Petitioner moved for the reconsideration of the decision of the
LA. After the denial of the motion for reconsideration, petitioner appealed to the
NLRC with an Urgent Motion to Reduce Bond, alleging as grounds grave abuse of
discretion committed by the Labor Arbiter in computing the award of the claims
based on an erroneous applicable, daily-minimum wage for the handicraft
establishment. The motion averred that a big portion of the awards had already
prescribed, thus justifying the reduction of the bond from P93k to only P19k.Without
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resolving the Urgent Motion to Reduce Bond, the NLRC dismissed the appeal of
petitioner for appellant's failure to put up a bond.
Issue: WON NLRC validly dismissed the appeal and motion to reduce bond for
failure to post bond.
Held: No. What obviously misled the NLRC in imposing the posting of a bond as
a precondition before it can act on the motion to reduce the bond is provision of
Article 223 (par. 2) of the Labor Code which requires the posting of the bond before
an appeal "may be perfected."
There is a clear distinction between the filing of an appeal within the
reglementary period and its perfection. The latter may transpire after the end of the
reglementary period for filing the appeal.
Under Article 223, an appeal to the NLRC from the decisions, awards or
orders of the LA must be made "within 10 calendar days from receipt of such
decisions, awards or orders." Under Section 3(a) of Rule VI of the New Rules of
Procedure of the NLRC, the appeal fees must be paid and the memorandum of
appeal must be filed within the ten-day reglementary period. Neither the Labor Code
nor its implementing rules specifically provide for a situation where the appellant
moves for a reduction of the appeal bond.
Inasmuch as in practice the NLRC allows the reduction of the appeal bond
upon motion of appellant and on meritorious grounds, it follows that a motion to that
effect may be filed within the reglementary period for appealing. Such motion may
be filed in lieu of a bond which amount is being contested. In the meantime, the
appeal is not deemed perfected and the LA retains jurisdiction over the case until the
NLRC has acted on the motion and appellant has filed the bond as fixed by the
NLRC.
G.R. No. 114161 November 23, 1995 VIRGILIO M. CAÑETE v NLRC
Petitioner VIRGILIO M. CAÑETE assails the Decision and Resolution of the
NLRC, dated September 20, 1993 and December 20, 1993, respectively, as having
been issued with grave abuse of discretion. Petitioner claims he was illegally
dismissed from service. His employer, however, private respondent VICENTE
TING/V.T. MARKETING, maintains petitioner abandoned his job.
 Magsino Labor Relations Digests, Arbues 2019
Private respondent is a wholesaler of dry goods. Petitioner started working with
private respondent as helper-utility man on July 11, 1987. Petitioner alleged that he
and his co-employees worked from 7:30 a.m. until past 6:00 p.m., but it was made to
appear on their time cards that they worked the regular eight (8) hours from 8:00
a.m. to 5:00 p.m. Thus, they received compensation for only eight (8) hours work
and were underpaid.
On July 22, 1992, at about 7:10 a.m., petitioner arrived at the workplace and found
some of his co-employees already working. He casually remarked: "Why are we
working so early when we were supposed to start (at) 7:30 a.m.? In fact, we (have)
already been deprived of half an hour('s pay) because our payrolls indicate that we
start (work) at 8:00 a.m." Somehow, his remark reached management. At about 6:00
p.m. that night, petitioner was summoned by respondent's manager, Joaquin Chua.
He was told not to report for work anymore and he would just be paid for the
services he rendered. Petitioner inquired why he was being dismissed. Referring to
petitioner's remark that morning, Chua told petitioner he was interferring with the
work of his co-employees. Petitioner explained he merely aired a harmless
observation. His explanation did not satisfy Chua. Petitioner was ordered to return
the following day to get his separation pay.
The next day, when petitioner reported for work, he was offered the amount of Six
Thousand Pesos (P6,000.00) as separation pay. He refused the offer. Respondent
then barred him from working. A month later, petitioner filed with the Department of
Labor a complaint for illegal dismissal, underpayment of wages, non-payment of
13th month pay and damages. 1
Private respondent, on the other hand, presented a different story. On July 22, 1992,
private respondent reprimanded petitioner for his repeated and habitual absences
from work. From that day on, petitioner did not report for work. It was three (3) days
later, or on July 25, 1992, when petitioner returned but only to demand payment for
his three-days work for the payroll period July 20-25, 1992. Private respondent
reported the abandonment of work to the Department of Labor on August 10, 1992.
He also furnished petitioner a copy of the notice of termination due to abandonment
at his last known address. However, the notice did not reach petitioner since, as per
the Certification2of Postmaster Roberto Robit, petitioner was unknown at the given
address.3
In support of his position that petitioner had repeatedly absented himself from work,
and that he was reprimanded therefor, private respondent submitted to the NLRC
petitioner's time records which disclosed the following:
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(a) petitioner worked for only four (4) days for the payroll period
May 14-19, 1990;
(b) he was absent for three (3) days for the payroll period June 25-
30, 1990;
(c) he was absent for two (2) days for the payroll period November
12-17, 1990;
(d) he was absent for three (3) days for the payroll period May 11-
16, 1992;
(e) he was absent the whole working week of May 18-23, 1992;
and,
In a Decision, dated March 8, 1993,4 Labor Arbiter Ray Alan T. Drilon ruled that
petitioner did not abandon his job but was illegally dismissed from service. Petitioner
was awarded backwages, separation pay and attorney's fees. He was also given wage
differentials due to a finding of underpayment of wages.
As per the return of service, Atty. Enrique Chua, private respondent's counsel,
received a copy of the Decision of the labor arbiter on March 15, 1993. However,
private respondent's appeal to the National Labor Relations Commission (NLRC)
was filed only on March 26, 1993, or a day after the lapse of the ten-day period
prescribed by law. Initially, the NLRC dismissed his appeal.5
Private respondent moved for a reconsideration of the dismissal of his appeal. He
explained that the copy of the labor arbiter's Decision which was sent by registered
mail to his lawyer, Atty. Enrique Chua, was received by one NENETTE VASQUEZ,
a person not under the employ of his lawyer. Vasquez was a sales representative of
United System, an office which-adjoins Chua's law office. Attached to the Motion
was the Affidavit of Vasquez6 where she deposed that she received a copy of said
Decision on March 15, 1993, at about 8:20 a.m. On said date and time, she was
resting at the well-ventilated premises of Atty. Chua's office which was then still
closed. She was still resting when the postman who regularly delivered mail in said
building, asked her if she could receive the mail intended for Atty. Chua as the
latter's office was still closed. She acceded and signed the registry return card.
 Magsino Labor Relations Digests, Arbues 2019
Vasquez stayed on the premises of Atty. Chua's office for about 15-20 minutes.
Thereafter, she left to see a prospective client and inadvertently brought with her the
mail intended for Atty. Chua. She was able to give the mail to Anelyn Cadiz, Chua's
clerk, only the following day, March 16, 1993. However, she failed to inform Cadiz
that she actually received the mail the day before. Cadiz thus presumed that the mail
was delivered only on said date. Consequently, Atty. Chua reckoned the period of
appeal from March 16, 1993 and actually filed respondent's appeal ten (10) days
thereafter, or on March 26, 1993. Vasquez' account of the incident was corroborated
by the postman, Roque S. Tubungbanua7 and Chua's clerk, Anelyn Cadiz.8
Petitioner opposed the motion for reconsideration. 9 He alleged that service of the
copy of the labor arbiter's Decision to Vasquez on March 15, 1993 should be deemed
as proper service to respondent's counsel. Petitioner also objected to the documents
submitted by respondent to the NLRC for the first time on appeal, viz: (a) petitioner's
daily time record and payroll for the months of August and December 1989 and
April 1990 attached to respondent Notice and Memorandum on Appeal; (b)
Certification of the Postmaster of Bacolod City, dated May 11, 1993, that he was not
able to effect delivery of the notice of abandonment for petitioner was unknown at
the given address. Petitioner charged that he was denied due process when these
documents were presented only at such late stage and was not adduced at the hearing
before the labor arbiter.
In its Decision, 10 dated September 20, 1993, NLRC reversed the Decision of the
labor arbiter. It ruled that petitioner was not illegally dismissed but abandoned his
work. Nonetheless, in view of the willingness of the employer to pay separation pay,
the NLRC awarded to petitioner the amount of Nine Thousand Seven Hundred
Fifteen Pesos and Eighty Centavos (P9,715.80) as separation pay. Petitioner's claims
for underpayment of wages and damages were found unmeritorious and were
likewise dismissed. Petitioner moved for reconsideration. It was denied. 11
Hence, this petition for certiorari.
Petitioner contends that the NLRC acted with grave abuse of discretion in: (a)
declaring private respondent's appeal to have been seasonably filed; (b) holding that
petitioner was not dismissed but abandoned his employment; and, (c) admitting and
considering evidence which had been presented by private respondent for the first
time on appeal.
Before proceeding with the substantive issue raised in this petition, we shall first rule
on the procedural objections raised by petitioner.
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First. Petitioner avers that private respondent failed to make a timely appeal of the
Decision of the labor arbiter to the NLRC. He insists that receipt by Nenette Vasquez
of a copy of the Decision of the labor arbiter on March 15, 1993 should have been
considered as receipt of said Decision by Atty. Chua, private respondent's then
counsel of record. The fact that Ms. Vasquez may have handed a copy of said
Decision to a clerk of Atty. Chua only on March 16, 1993 is of no moment. Since the
return of service shows that the Decision was received on March 15, 1993, private
respondent had only until March 25, 1993 within which to perfect his appeal with the
NLRC. Hence, private respondent's appeal on March 26, 1993 was belatedly filed,
rendering the labor arbiter's Decision final and executory.
The contention has no merit.
Section 4, Rule 13 of the Rules of Court provides:
Sec. 4. Personal service. — Service of the papers may be made by
delivering personally a copy to the party or his attorney, or by
leaving it in his office with his clerk or with a person having
charge thereof. If no person is found in his office, or his office is
not known, then by leaving the copy, between the hours of eight in
the morning and six in the evening, at the party's or attorney's
residence, if known, with a person of sufficient discretion to
receive the same.
We have ruled that where a copy of the decision is served on a person who is neither
a clerk nor one in charge of the attorney's office, such service is invalid. 12 In the case
at bar, it is undisputed that Nenette Vasquez, the person who received a copy of the
labor arbiter's Decision, was neither a clerk of Atty. Chua, respondents counsel, nor a
person in charge of Atty. Chua's office. Hence, her receipt of said Decision on March
15, 1993 cannot be considered as notice to Atty. Chua. Since a copy of the Decision
was actually delivered by Vasquez to Atty. Chua's clerk only on March 16, 1993, it
was only on this date that the ten-day period for the filing of respondent's appeal
commenced to run. Thus, respondent's March 26, 1993 appeal to the NLRC was
seasonably filed.
Second. Petitioner charges that the NLRC abused its discretion when it considered,
over his objection, certain documents 13 which private respondent submitted for the
first time on appeal. Petitioner claims he was denied due process.
We do not agree.
 Magsino Labor Relations Digests, Arbues 2019
Article 221 of the Labor Code mandates that technical rules of evidence in courts of
law shall not be controlling in any of the proceedings before the Commission or the
Labor Arbiters. Further, the Commission is required to use every reasonable means
to ascertain the facts without regard to technicalities or procedure. Technical rules
may be relaxed to prevent miscarriage of justice. They must not be allowed to stand
in the way of equitably and completely resolving the rights and obligations of the
parties. 14
In the case at bar, petitioner had the opportunity to rebut the truth of these additional
documents. Respondent NLRC correctly accorded weight to these documents
considering their nature and character. These were daily time records, certifications
from the postmaster, etc., whose trustworthiness can be relied upon.
Consequently, we find no grave abuse of discretion on the part of the NLRC in
considering on appeal petitioner's daily time records and payrolls for the period
August 1989, December 1989 and April 1990 to rebut the charge of underpayment of
wages. On the basis of these documents, it was sufficiently proved that petitioner
received the minimum daily wage for said period. Perforce, the NLRC correctly
dismissed petitioner's charge for underpayment of wages.
any inference that he abandoned his work. Abandonment is a matter of intention and
cannot be lightly inferred or legally presumed from certain equivocal acts. To
constitute abandonment, there must be clear proof of deliberate and unjustified intent
to discontinue the employment. 15 The burden of proving abandonment of work as a
just cause for dismissal is on the employer. Private respondent failed to discharge
this burden.
IN VIEW WHEREOF, the Decision and Resolution of the National Labor Relations
Commission, dated September 20, 1993 and December 20, 1993, respectively, are
REVERSED. Accordingly, the Decision of Labor Arbiter Ray Alan T. Drilon, dated
March 8, 1993, is REINSTATED, except with respect to the award of wage
differentials relative to the charge of under payment of wages which is hereby
deleted. No costs.

However, on the issue of illegal dismissal, we find that petitioner did not abandon his
work but was illegally dismissed from service.

Private respondent claims that petitioner abandoned his employment after he was
reprimanded for his past absences. As proof thereof, private respondent submitted
the pertinent daily time records of petitioner from way back May 1990. However, the
evidence adduced by private respondent show that petitioner was last absent from
work on May 18-23, 1992. Private respondent's stance that he reprimanded petitioner
for his past absences after the lapse of one month, or on July 22, 1992 strains the
limits of credence. Indeed, private respondent did not cite any immediate
circumstance which could have triggered such a reprimand on that particular day.
G.R. No. 108951. March 7, 2000 JESUS B. DIAMONON v DOLE
The circumstances narrated by private respondent leading to petitioner's alleged
abandonment of work are highly suspect. On top of all, it is difficult to imagine that
petitioner would abandon his job for prior to his dismissal on July 22, 1992, Facts: Petitioner was removed as VP of National Congress of Unions in the Sugar
petitioner, a daily-wage earner, had been in the employ of private respondent since Industry of the Philippines (NACUSIP) and Vice President for Luzon of the
Philippine Agricultural, Commercial and Industrial Workers Union (PACIWU)
July 11, 1987, or for close to five (5) years. We find it incongruous for petitioner to
respectively through resolutions approved by the boards of the 2 unions.
give up his job after receiving a mere reprimand from his employer. What is more
telling is that on August 19, 1992 or less than a month from the time he was
There are 2 cases here. The 1st case is a is a complaint against the 2 unions
dismissed from service, petitioner immediately filed a complaint against his
employer for illegal dismissal with a prayer for reinstatement. Petitioner's acts negate while the 2nd case is against Atty. Dela Cruz for violating the CBLs of both unions.

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 Magsino Labor Relations Digests, Arbues 2019
The 1st case was ruled in favor of petitioner while the 2 nd case was
dismissed for lack of personality to sue since “petitioner was already removed.”
Petitioner appealed the 2nd case in DOLE Sec. Laguesma. Laguesma held that
petitioner failed to show in his complaint that the administrative remedies provided
for in the constitution and by-laws of both unions, have been exhausted or such
remedies are not available, was fatal to petitioners cause. Resultantly, he affirmed the
dismissal of the complaint.
Issue: WON Dole sec. validly switched the issue from lack of personality to
failure to exhaust administrative remedies.
Held: Yes. His failure to seek recourse before the National convention on his
complaint against private respondents taints his action with prematurity. Generally,
an appellate court may only pass upon errors assigned. However, this rule is not
without exceptions. In the following instances, the Supreme Court ruled that an
appellate court (and quasi-judicial bodies) is accorded a broad discretionary power to
waive the lack of assignment of errors and consider errors not assigned:
(a) Grounds not assigned as errors but affecting the jurisdiction of the court over the
subject matter;
(b) Matters not assigned as errors on appeal but are evidently plain or clerical errors
within contemplation of law;
(c) Matters not assigned as errors on appeal but consideration of which is necessary
in arriving at a just decision and complete resolution of the case or to serve the
interests of a justice or to avoid dispensing piecemeal justice;
(d) Matters not specifically assigned as errors on appeal but raised in the trial court
and are matters of record having some bearing on the issue submitted which the
parties failed to raise or which the lower court ignored; Supreme
(e) Matters not assigned as errors on appeal but closely related to an error assigned;
(f) Matters not assigned as errors on appeal but upon which the determination of a
question properly assigned, is dependent.
G.R. No. 101539 September 4, 1992 CECILE DE OCAMPO v NLRC
Facts: Baliwag Mahogany Corp. issued 3-day suspension orders affecting 20
employees for failure to render overtime work. On the same day, the union filed a
notice of strike on the grounds of ULP particularly the violation of the CBA
provisions on non-payment of unused leaves. On January 13, 1990, the company
issued a notice of termination to petitioner et al allegedly to effect cost reduction and
redundancy. The members of the union conducted a picket at the main gate of the
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company on January 18, 1990. 2 strikes ensued prompting the labor sec to certify the
dispute to NLRC for compulsory arbitration.
The company alleging loss of income, asked NLRC to submit evidence to
prove the same. NLRC granted.
Issue: WON NLRC committed gadilej for allowing receipt of additional evidence.
Held: No. Anent the contention that the respondent Commission gravely abused
its discretion when it allowed the presentation of additional evidence to prove the
loss suffered by the company despite the fact that they were mere afterthoughts and
just concocted by the company, time and again, We emphasize that "technical rules
of evidence are not binding in labor cases. Labor officials should use every and
reasonable means to ascertain the facts in each case speedily and objectively, without
regard to technicalities of law or procedure, all in the interest of due process"
G.R. No. 130866 September 16, 1998 ST. MARTIN FUNERAL v NLRC
Facts: Respondent Aricayos filed a complaint for illegal dismissal against
petitioner. Petitioner insist that Aricayos was not an employee but only helps
voluntarily as payment for debt of gratitude. LA dismissed the complaint due to lack
of jurisdiction for there was no EER present. NLRC remanded the case to LA.
Petitioner filed this PetCert to SC arguing that NLRC committed gadilej.
Issue: WON petition should be remanded to CA.
Held: Yes. BP 129 as amended by RA 7902 brings about the following changes:
1. The last paragraph which excluded its application to the LC and the Central
Board of Assessment Appeals was deleted and replaced by a new paragraph granting
the CA limited powers to conduct trials and hearings in cases within its jurisdiction.
2. The reference to the LC in that last paragraph was transposed to paragraph
(3) of the section, such that the original exclusionary clause therein now provides
"except those falling within the appellate jurisdiction of the SC in accordance with
the Constitution, the LC under PD No. 442, as amended, the provisions of this Act,
 Magsino Labor Relations Digests, Arbues 2019
and of subparagraph (1) of the 3rd paragraph and subparagraph (4) of the 4th
paragraph of Section 17 of the Judiciary Act of 1948."
3. Contrarily, however, specifically added to and included among the quasi-
judicial agencies over which the CA shall have exclusive appellate jurisdiction are
the SEC, the SSC, the Employees Compensation Commission and the CSC
Paragraph (3), Section 9 of B.P. No. 129 now grants exclusive appellate
jurisdiction to the CA over all final adjudications of the RTC and the quasi-judicial
agencies generally or specifically referred to therein except, among others, those
falling within the appellate jurisdiction of the SC in accordance with the Labor Code
under Presidential Decree No. 442, as amended.
The Court is, therefore, of the considered opinion that ever since appeals
from the NLRC to the Supreme Court were eliminated, the legislative intendment
was that the special civil action of certiorari was and still is the proper vehicle for
judicial review of decisions of the NLRC. The use of the word "appeal" in relation
thereto and in the instances we have noted could have been a lapsus plumae because
appeals by certiorari and the original action for certiorari are both modes of judicial
review addressed to the appellate courts. The important distinction between them,
however, and with which the Court is particularly concerned here is that the special
civil action of certiorari is within the concurrent original jurisdiction of this Court
and the CA; whereas to indulge in the assumption that appeals by certiorari to the SC
are allowed would not subserve, but would subvert, the intention of Congress.
Becase there is a growing number of labor cases being elevated to this
Court which, not being a trier of fact, only to remand it to NLRC for resolution of
ambiguous factual findings; that the CA is procedurally equipped for that purpose;
and that there is undeniably an imperative need for expeditious action on labor cases
as a major aspect of constitutional protection to labor; Therefore, all references in the
amended Section 9 of B.P. No. 129 to supposed appeals from the NLRC to the SC
are interpreted and hereby declared to mean and refer to petitions for certiorari under
Rule 65. Consequently, all such petitions should hence forth be initially filed in the
CA in strict observance of the doctrine on the hierarchy of courts as the appropriate
forum for the relief desired.
G.R. No. 104302 July 14, 1999 REBECCA VELOSO v China Airlines
Facts: Petitioner, a ticket officer, was laid off due to closure of a ticketing section
to prevent losses. Petitioner filed a case of illegal dismissal and UPL. LA ruled in
favor of petitioner. NLRC reversed but ordered respondent to pay retrenchment pay.
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However, instead of filing the required motion for reconsideration,
petitioner filed the instant petition for certiorari. In doing so, petitioner boldly avers
that a recourse to the NLRC via a motion for reconsideration is futile and will only
injure further her rights to a speedy and unbiased judgment of the case. She did not
expect the labor tribunal to rectify itself.
Issue: WON certiorari should be dismissed because MR should be filed first.
Held: Yes. It is settled that certiorari will lie only if there is no appeal or any other
plain, speedy and adequate remedy in the ordinary course of law against acts of
public respondent. In this case, the plain and adequate remedy expressly provided by
law is a motion for reconsideration of the impugned resolution, to be made under
oath and filed within ten (10) days from receipt of the questioned resolution of the
NLRC, a procedure which is jurisdictional. Hence, the filing of the petition for
certiorari in this case is patently violative of prevailing jurisprudence and will not
prosper without undue damage to the fundamental doctrine that undergirds the grant
of this prerogative writ.
Further, it should be stressed that without a motion for reconsideration
seasonably filed within the ten-day reglementary period, an order, decision or
resolution of the NLRC, becomes final and executory after ten (10) calendar days
from receipt thereof. Hence, the resolution of the NLRC had become final and
executory on January 17, 1992, insofar as petitioner is concerned, because she admits
under oath having received notice thereof9 on January 7, 1992. The merits of her
case may no longer be reviewed to determine if the public respondent might be
faulted for grave abuse of discretion, as alleged in her petition dated March 14, 1992.
Thus, the Court has no recourse but to sustain the respondent's position on
jurisdictional and other grounds, that the petition ought not to be given due course
and the case should be dismissed for lack of merit.
G.R. No. 126805 March 16, 2000 PAL v NLRC
Facts: Respondent Pescante was load controller for PAL. He was accused of
contracting a passenger named Cominero with excess baggage to make it appear that
her baggage was within the allowable limit. Petitioner filed an admin case against
Pescante who was found guilty and subsequently dismissed.
 Magsino Labor Relations Digests, Arbues 2019
Pescante filed a case for illegal dismissal. LA upheld the dismissal but
NLRC reversed. PAL filed rule 65 with SC.
Issue: WON SC may review factual issues.
Held: Yes. In certiorari proceedings under Rule 65, this Court does not assess and
weigh the sufficiency of evidence upon which the labor arbiter and public respondent
NLRC based their decisions. Our query is limited to the determination of whether or
not public respondent acted without or in excess of jurisdiction or with grave abuse
of discretion in rendering the assailed decisions.
But when the findings of the NLRC contradict those of the labor arbiter,
this Court, in the exercise of its equity jurisdiction, must of necessity review the
records of the case to determine which findings should be preferred as more
comfortable to the evidentiary facts, as in this case.
G.R. No. 142314 June 28, 2001 MC ENGINEERING v NLRC
Facts: Respondent entered into an employment agreement with petitioner for
deployment as plumber in KSA. He was unable to complete contract. Respondent
filed a complaint with the POEA against petitioners MC and Hanil for illegal
dismissal where he prayed for the payment of his salaries for the unexpired portion
77
of his employment agreement and the reimbursement of his airfare. In March of
1996, the case was referred to the NLRC as by then it was this agency which had
jurisdiction over respondent’s complaint by virtue of RA 8042, the Migrant Workers
and Overseas Filipinos Act of 1995.
LA ruled in favor of respondent. NLRC dismissed the appeal. Petitioner
filed PetCert under R45 to the CA. CA dismissed the petition because: (1) there is no
certification against forum shopping by co-petitioner Hamil Development Co., Ltd.;
and (2) there is no written explanation why the service of the pleading was not done
personally (Section 3, Rule 46 and Section 11, Rule 13, 1997 Rules of Civil
Procedure). Apparently the certification for non-forum shopping was only signed by
MC and not by Hanmil.
Issue: WON there should be strict compliance in the rule on non-forum shopping.
Held: No, substantial compliance is enough. In all cases filed in the CA, as with
all initiatory pleadings before any tribunal, a certification of non-forum shopping
signed by the petitioner must be filed together with the petition. The failure of a
petitioner to comply with this requirement constitutes sufficient ground for the
dismissal of his petition. Thus, the Court has previously held that a certification not
attached to the complaint or petition or one belatedly filed or one signed by counsel
and not the party himself constitutes a violation of the requirement which can result
in the dismissal of the complaint or petition.
However, with respect to the contents of the certification, the rule of
substantial compliance may be availed of. This is because the requirement of strict
compliance with the provisions regarding the certification of non-forum shopping
merely underscores its mandatory nature in that the certification cannot be altogether
dispensed with or its requirements completely disregarded. It does not thereby
interdict substantial compliance with its provisions under justifiable circumstances.
In the case at bar, the CA should have taken into consideration the fact that
petitioner Hanil is being sued by private respondent in its capacity as the foreign
principal of petitioner MCEI. It was petitioner MCEI, as the local private
employment agency, who entered into contracts with potential overseas workers on
behalf of petitioner Hanil.
Issue: WON service of pleading should be done personally.
Held: There may be substantial compliance but petitioner failed to comply.
Section 11, Rule 13 of the 1997 Rules of Civil Procedure provides:
 Magsino Labor Relations Digests, Arbues 2019
"Sec. 11. Priorities in modes of service and filing. – Whenever practicable,
the service and filing of pleadings and other papers shall be done
personally. Except with respect to papers emanating from the court, a resort
to other modes must be accompanied by a written explanation why the
service or filing was not done personally. A violation of this rule may be
cause to consider the paper as not filed."
The utter disregard of the rules made by petitioners cannot justly be
rationalized by harking on the policy of liberal construction and substantial
compliance.
The fact that an affidavit of service accompanied their petition does not
amount to a substantial compliance with the requirement of an explanation why other
modes of service other than personal service were resorted to. An affidavit of
service, under Section 13, Rule 13 of the 1997 Rules of Civil Procedure, is required
merely as proof that service has been made to the other parties in a case. Thus, it is a
requirement totally different from the requirement that an explanation be made if
personal service of pleadings was not resorted to. In fact, a cursory reading of the
affidavit of service attached by petitioners in their petition before the Court of
Appeals shows that it merely states that a certain Rogelio Mindol served copies of
the pleading to the counsel of private respondent, the NLRC, and the Solicitor-
General by registered mail. There is not even a hint of an explanation why such
mode of service was resorted to.
that fateful day. CA in dismissing the PetRev argued that: (a) that the certification of
non-forum shopping was defective; (b) that certified true copies of material portions
of the record were not attached to the petition; and (c) that the petition failed to state
all the material dates which would establish the timeliness thereof. As admitted by
petitioner herself, she received a copy of the resolution on June 9, 1997, and yet it
was only on January 27, 1998, or seven-and-a-half months later, that she filed a MR.
Issue: WON SC should give due course to the PetCert.
Held: No. The instant petition was not timely filed. Under section 1 of R45 of the
former Revised Rules of Court, which was then still in effect, an appeal from a
decision rendered by the CA to this Court must be made within 15 days from notice
of the judgment or the denial of a motion for reconsideration filed in due time. In the
case at bar, petitioner filed her MR from receipt of the resolution of dismissal 231
days late, thereby rendering the said resolution final and executory. The gap of more
than 7 months is too large for us to ignore. Petitioner did not even offer any
explanation to account for the tardiness. It behooves the party invoking liberality in
the application of procedural rules to at least explain his non-compliance therewith.
We have held that the period of appeal is not only mandatory, but more importantly,
it is jurisdictional. Even we cannot ignore the immutable character of a final
judgment.

G.R. No. 132916. November 16, 2001 RUFINA TANCINCO v GSIS

Facts: SPO1 Tancinco, an aide of VP Erap, was shot dead while off-duty. The
Employee’s Compensation Commission denied his claims. ECC argued that
Tancinco’s death, when he was on off duty status did not arise out of and in the
course of his employment as a member of the PNP Security Command because he
was neither executing an order for VP Estrada nor performing an official function on
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