MATERNITY CHILDREN’S HOSPITAL VS SECRETARY OF LABOR (Labor Law defined)

G.R. No. 78909

Date: June 30, 1984
Petitioner: Maternity Children’s Hospital, represented by Antera L. Dorado
Respondents: The Honorable Secretary of Labor and the Regional Director of Labor, Region X
Ponente: Medialdea, J.

FACTS:
Petitioner is a semi-governmental hospital in Cagayan De Oro and Employing forty-one
(41) employees. Aside from salary and living allowances, the employees are given food, but the amount of
which is deducted from their respective salaries. On May 3, 1986, ten (10) employees filed a complaint with
the Regional Director of Labor and Employment, Region 10, for underpayment of their salaries and
ECOLAS. Consequently, the Regional Director directed two of his labor standard and welfare officers to
investigate and ascertain the truth of the allegations in the complaint.

Based on the report and recommendation, the Regional Director issued an order dated August 4,
1986, directing payment of ₱ 723, 888.58, to all the petitioner’s employees. The Secretary of Labor likewise
affirmed the Decision and dismissed the Motion for Reconsideration of the petitioner.

In a petition for certiorari, petitioner questioned the jurisdiction of the Regional Director and the all-
embracing applicability of the award involving salary differentials and ECOLAS, in that it covers not only the
hospitals employees who signed the complaints, but also those who are not signatories to the complaint, and
those who were no longer in the service of the hospital at the time the complaint was filed.

ISSUES:
1. Whether or not the Regional Director had jurisdiction over the case; and
2. Whether or not the Regional Director erred in extending the award to all hospital employees?

HELD:
1. The answer is in the affirmative the Regional Directos has a jurisdiction in this labor standard case.
This is Labor Standard case, and is governed by Article 128 (b) of the Labor Code , as amended by
E.O. No. 111.

“Labor standards refer to the minimum requirements prescribed by existing laws,

rules, and regulations relating to wages, hours of work, cost of living allowance and
other monetary and welfare benefits, including occupational, safety, and health
standards (Section 7, Rule I, Rules on the Disposition of Labor Standards Cases in the
Regional Office, dated September 16, 1987)”.

Under the present rules, a Regional Director exercises both visitorial and enforcement power over
labor standards cases, and is therefore empowered to adjudicate money claims, provided there still
exists an employer-employee relationship, and the findings of the regional office is not contested by the
employer concerned. We believed…that even in the absence of E. O. No. 111, Regional Directors
already had enforcement powers over money claims, effective under P.D. No. 850, issued on December
16, 1975, which transferred labor standards cases from the arbitration system to the enforcement
system.

2. The Regional Director correctly applied the award with respect to those employees who signed the
complaint, as well as those who did not sign the complaint, but were still connected with the hospital at
the time the complaint was filed. The justification for the award to this group of employees who were not
signatories to the complaint is that the visitorial and enforcement powers given to the Secretatry of Labor
labor is relevant to, and exercisable over establishments, not over individual
members/employees, because what is sought to be achieved by its exercise is the observance of, and/
or compliance by such firm/establishment with the labor standards regulations. However, there is no legal
justification for the award in favor of those employees who were no longer connected with the hospital t
the time the complaint was filed. Article 129 of the Labor Code in aid of the enforcement power of the
Regional Director is not applicable where the employee seeking to be paid is separated from service. His
claim is purely money claim that has to be subject of arbitration proceedings and therefore within the
original and exclusive jurisdiction of the Labor Arbiter.
Malayang Samahan ng mga Manggagawa sa M. Greenfield (MSMGOUWP) v. Ramos, NLRC [G.R. No.
113907, February 28, 2000]

FACTS:
Petitioner MSMS, (local union) is an affiliate of ULGWP (federation). A local union election was held under the
action of the federation. The defeated candidates filed a petition for impeachment. The local union held a
general membership meeting. Several union members failed to attend the meeting. The local union requested
the company to deduct the union fines from the wage of those union members who failed to attend the
general membership meeting. The Secretary General of the federation disapproved the resolution imposing the
Php50 fine. The company then sent a reply to petitioner’s request stating it cannot deduct fines without going
against certain laws. The imposition of the fine became the subject of a bitter disagreement between the
Federation and the local union culminating to the latter’s declaration of general autonomy from the former. The
federation asked the company to stop the remittance of the local union’s share in the education funds. The
company led a complaint of interpleader with the DOLE. The federation called a meeting placing the local
union under trusteeship and appointing an administrator. Petitioner union officers received letters from the
administrator requiring them to explain why they should not be removed from the office and expelled from
union membership. The officers were expelled from the federation. The federation advised the company of the
expulsion of the 30 union officers and demanded their separation pursuant to the Union Security Clause in the
CBA. The Federation filed a notice of strike with the NCMB to compel the company to effect the immediate
termination of the expelled union officers. Under the pressure of a strike, the company terminated the 30 union
officers from employment. The petitioners filed a notice of strike on the grounds of discrimination; interference;
mass dismissal of union officers and shop stewards; threats, coercion and intimidation ; and union busting. The
petitioners prayed for the suspension of the effects of their termination. Secretary Drilon dismissed the petition
stating it was an intra-union matter. Later, 78 union shop stewards were placed under preventive suspension.
The union members staged a walk-out and officially declared a strike that afternoon. The strike was attended
by violence.

ISSUES:

1. Whether or not the company was illegal dismissal.

2. Whether or not the strike was illegal.
3. Whether or not petitioners can be deemed to have abandoned their work.

HELD:

1. Yes. The charges against respondent company proceeds from onemain issue – the termination of several
employees upon the demand of the federation pursuant to the union security clause. Although the union
security clause may be validly enforced, such must comply with due process. In this case, petitioner union
officers were expelled for allegedly committing acts of disloyalty to the federation. The company did
not inquire into the cause of the expulsion and merely relied upon the federation’s allegations. The issue is not
a purely intra-union matter as it was later on converted into a termination dispute when the company dismissed
the petitioners from work without the benefit of a separate notice and hearing. Although it started as an intra-
union dispute within the exclusive jurisdiction of the BLR, to remand the same to the BLR would intolerably
delay the case and the Labor Arbiter could rule upon it. As to the act of disaffiliation by the local union; it is
settled that a local union has the right to disaffiliate from its mother union in the absence of specific provisions
in the federation’s constitution prohibiting such. There was no such provision in federation ULGWP’s
constitution.

2. No. As to the legally of the strike; it was based on the termination dispute and petitioners believed in good
faith in dismissing them, the company was guilty of ULP. A no-strike, no lockout provision in the CBA can only
be invoked when the strike is economic. As to the violence, the parties agreed that the violence was not
attributed to the striking employees alone as the company itself hired men to pacify the strikers. Such violence
cannot be a ground for declaring the strike illegal.

3. As to the dismissal of the petitioners; respondents failed to prove that there was abandonment absent any
proof of petitioner’s intention to sever the employee-employer relationship.
Malayang Samahan ng mga Manggagawa sa M. Greenfield, et al. v. Ramos, Et al. - g.r. nO. 113907.
APRIL 20, 2001. 357 SCRA 77

Facts:

This is a motion for partial reconsideration of the Supreme Court’s decision dated February 28, 2000, the
dispositive portion of which reads:
“WHEREFORE, the petition is GRANTED; the decision of the National Labor Relations Commission in Case
No. NCR-00-09-04199-89 is REVERSED and SET ASIDE; and the respondent company is hereby ordered to
immediately reinstate the petitioners to their respective positions. Should reinstatement be not feasible,
respondent company shall pay separation pay of one month salary for every year of service. Since petitioners
were terminated without the requisite written notice at least 30 days prior to their termination, following the
recent ruling in the case of Ruben Serrano vs. National Labor Relations Commission and Isetann Department
Store, the respondent company is hereby ordered to pay full backwages to petitioner-employees while the
Federation is also ordered to pay full backwages to petitioner-union officers who were dismissed upon its
instigation. Since the dismissal of petitioners was without cause, backwages shall be computed from the time
the herein petitioner employees and union officers were dismissed until their actual reinstatement. Should
reinstatement be not feasible, their backwages shall be computed from the time petitioners were terminated
until the finality of this decision. Costs against the respondent company.
Petitioners allege that this Court committed patent and palpable error in holding that “the respondent company
officials cannot be held personally liable for damages on account of employees’ dismissal because the
employer corporation has a personality separate and distinct from its officers who merely acted as its agents”
whereas the records clearly established that respondent company officers Saul Tawil, Carlos T. Javelosa and
Renato C. Puangco have caused the hasty, arbitrary and unlawful dismissal of petitioners from work; that as
top officials of the respondent company who handed down the decision dismissing the petitioners, they are
responsible for acts of unfair labor practice; that these respondent corporate officers should not be considered
as mere agents of the company but the wrongdoers. Petitioners further contend that while the case was
pending before the public respondents, the respondent company, in the early part of February 1990, began
removing its machineries and equipment from its plant located at Merville Park, Paranaque and began
diverting jobs intended for the regular employees to its sub-contractor/satellite branches; that the respondent
company officials are also the officers and incorporators of these satellite companies as shown in their articles
of incorporation and the general information sheet.

Issue:

Whether or not the corporation’s officers (stockholders at the same time) should be liable jointly and severally
with the corporation.

Ruling:

No. Petitioners’ contention that respondent company officials should be made personally liable for damages on
account of petitioners’ dismissal is not impressed with merit. A corporation is a juridical entity with legal
personality separate and distinct from those acting for and in its behalf and, in general from the people
comprising it. The rule is that obligations incurred by the corporation, acting through its directors, officers and
employees, are its sole liabilities. True, solidary liabilities may at times be incurred but only when exceptional
circumstances warrant such as, generally, in the following cases:

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, particularly, the Court has held corporate directors and officers solidarily liable with the
corporation for the termination of employment of corporate employees done with malice or in bad faith. Bad
faith or negligence is a question of fact and is evidentiary. It has been held that bad faith does not connote bad
judgment or negligence; it imports a dishonest purpose or some moral obliquity and conscious doing of wrong;
it means breach of a known duty thru some motive or interest or ill will; it partakes of the nature of fraud.
In the instant case, there is nothing substantial on record to show that respondent officers acted in patent bad
faith or were guilty of gross negligence in terminating the services of petitioners so as to warrant personal
liability.

It is basic that a corporation is invested by law with a personality separate and distinct from those of
the persons composing it as well as from that of any other legal entity to which it may be related. Mere
ownership by a single stockholder or by another corporation of all or nearly all of the capital stock of a
corporation is not of itself sufficient ground for disregarding the separate corporate personality.

Petitioners’ claim that the jobs intended for the respondent company’s regular employees were diverted
to its satellite companies where the respondent company officers are holding key positions is not substantiated
and was raised for the first time in this motion for reconsideration. Even assuming that the respondent
company officials are also officers and incorporators of the satellite companies, such circumstance does not in
itself amount to fraud. The documents attached to petitioners’ motion for reconsideration show that these
satellite companies were established prior to the filing of petitioners’ complaint against private respondents with
the Department of Labor and Employment on September 6, 1989 and that these corporations have different
sets of incorporators aside from the respondent officers and are holding their principal offices at different
locations. Substantial identity of incorporators between respondent company and these satellite companies
does not necessarily imply fraud. In such a case, respondent company’s corporate personality remains
inviolable.
SAN MIGUEL CORPORATION, petitioner,vs. NATIONAL LABOR RELATIONS COMMISSION, Second
Division, ILAW AT BUKLOD NG MANGGAGAWA (IBM), respondents. G.R. No. 119293. June 10, 2003]

Facts:

Petitioner San Miguel Corporation (SMC) and respondent Ilaw at Buklod ng Manggagawa (IBM), exclusive
bargaining agent of petitioner’s daily-paid rank and file employees, executed a Collective Bargaining
Agreement (CBA) under which they agreed to submit all disputes to grievance and arbitration proceedings.
The CBA also included a mutually enforceable no-strike no-lockout agreement.

On April 11, 1994, IBM, through its vice-president Alfredo Colomeda, filed with the National Conciliation and
Mediation Board (NCMB) a notice of strike, against petitioner for allegedly committing: (1) illegal dismissal of
union members, (2) illegal transfer, (3) violation of CBA, (4) contracting out of jobs being performed by
union members, (5) labor-only contracting, (6) harassment of union officers and members,(7 )
non-recognition of duly-elected union officers, and (8) other acts of unfair labor practice.

The next day, IBM filed another notice of strike, this time through its president Edilberto Galvez, raising
similar grounds: (1) illegal transfer, (2) labor-only contracting, (3) violation of CBA, (4) dismissal of union
officers and members, and (5) other acts of unfair labor practice.
The Galvez group subsequently requested the NCMB to consolidate its notice of strike with that of the
Colomeda group, to which the latter opposed, alleging Galvez’s lack of authority in filing the same.

Petitioner thereafter filed a Motion for Severance of Notices of Strike with Motion to Dismiss, on the grounds
that the notices raised non-strikeable issues and that they affected four corporations which are separate
and distinct from each other.

After several conciliation meetings, NCMB Director Reynaldo Ubaldo found that the real issues involved are
non-strikeable. Hence issued separate letter-orders to both union groups, converting their notices of strike
into preventive mediation.

While separate preventive mediation conferences were ongoing, the Colomeda group filed with the NCMB a
notice of holding a strike vote. Petitioner opposed by filing a Manifestation and Motion to Declare Notice
of Strike Vote Illegal, invoking the case of PAL v. Drilon, which held that no strike could be legally declared
during the pendency of preventive mediation. NCMB Director Ubaldo in response issued another letter to
the Colomeda Group reiterating the conversion of the notice of strike into a case of preventive mediation
and emphasizing the findings that the grounds raised center only on an intra-union conflict.

Meanwhile, on May 23, 1994, the Galvez group filed its second notice of strike against petitioner. Additional
grounds were set forth therein, including discrimination, coercion of employees, illegal lockout and illegal
closure. The NCMB however found these grounds to be mere amplifications of those alleged in the first
notice that the group filed. It therefore ordered the consolidation of the second notice with the preceding
one that was earlier reduced to preventive mediation. On the same date, the group likewise notified the
NCMB of its intention to hold a strike vote on May 27, 1994.

The Colomeda group notified the NCMB of the results of their strike vote, which favored the holding of a
strike. In reply, NCMB issued a letter again advising them that by virtue of the PAL v. Drilon ruling, their
notice of strike is deemed not to have been filed, consequently invalidating any subsequent strike for lack of
compliance with the notice requirement. Despite this and the pendency of the preventive mediation
proceedings, on June 4, 1994, IBM went on strike. The strike paralyzed the operations of petitioner,
causing it losses allegedly worth P29.98 million in daily lost production.

Two days after the declaration of strike, petitioner filed with public respondent NLRC an amended Petition
for Injunction with Prayer for the Issuance of Temporary Restraining Order, Free Ingress and Egress Order and
Deputization Order. After due hearing and ocular inspection, resolved to issue a temporary restraining order
(TRO) directing free ingress to and egress from petitioner’s plants, without prejudice to the union’s
right to peaceful picketing and continuous hearings on the injunction case.

To minimize further damage to itself, petitioner entered into a Memorandum of Agreement (MOA with the
respondent-union, calling for a lifting of the picket lines and resumption of work in exchange of “good faith
talks” between the management and the labor management committees. The MOA, signed in the presence of
Department of Labor and Employment (DOLE) officials, expressly stated that cases filed in relation to
their dispute will continue and will not be affected in any manner whatsoever by the agreement. The picket
lines ended and work was then resumed.

Respondent thereafter moved to reconsider the issuance of the TRO, and sought to dismiss the injunction
case in view of the cessation of its picketing activities as a result of the signed MOA. It argued that the case
had become moot and academic there being no more prohibited activities to restrain, be they actual or
threatened. Petitioner, however, opposed and submitted copies of flyers being circulated by IBM, as proof
of the union’s alleged threat to revive the strike. The NLRC did not rule on the opposition to the TRO and
allowed it to lapse.

The NLRC issued the challenged decision, denying the petition for injunction for lack of factual basis. It
found that the circumstances at the time did not constitute or no longer constituted an actual or threatened
commission of unlawful acts.It likewise denied petitioner’s motion for reconsideration in its resolution.

Issue:

WON THE NLRC GRAVELY ABUSED ITS DISCRETION WHEN IT FAILED TO ENFORCE, BY
INJUNCTION, THE PARTIES’ RECIPROCAL OBLIGATIONS TO SUBMIT TO ARBITRATION AND NOT
TO STRIKE.

Ruling:

Article 254 of the Labor Code provides that no temporary or permanent injunction or restraining order in
any case involving or growing out of labor disputes shall be issued by any court or other entitye xce p t as
otherwise provided in Articles 218 and 264 of the Labor Code. Under the first exception, Article 218 (e) of
the Labor Code expressly confers upon the NLRC the power to “enjoin or restrain actual and threatened
commission of any or all prohibited or unlawful acts, or to require the performance of a particular act in any
labor dispute which, if not restrained or performed forthwith, may cause grave or irreparable damage to any
party or render ineffectual any decision in favor of such party x x x.” The second exception, on the other
hand, is when the labor organization or the employer engages in any of the “prohibited activities”
enumerated in Article 264.

Pursuant to Article 218 (e), the coercive measure of injunction may also be used to restrain an actual or
threatened unlawful strike. In the case of San Miguel Corporation v. NLRC, where the same issue of NLRC’s
duty to enjoin an unlawful strike was raised, we ruled that the NLRC committed grave abuse of discretion when
it denied the petition for injunction to restrain the union from declaring a strike based on
non-strikeable grounds. Further, in IBM v. NLRC, we held that it is the “legal duty and obligation” of the
NLRC to enjoin a partial strike staged in violation of the law. Failure promptly to issue an injunction by the
public respondent was likewise held therein to be an abuse of discretion.

In the case at bar, petitioner sought a permanent injunction to enjoin the respondent’s strike. A strike is
considered as the most effective weapon in protecting the rights of the employees to improve the terms and
conditions of their employment. However, to be valid, a strike must be pursued within legal bounds. One of the
procedural requisites that Article 263 of the Labor Code and its Implementing Rules prescribe is the
filing of a valid notice of strike with the NCMB. Imposed for the purpose of encouraging the voluntary
settlement of disputes, this requirement has been held to be mandatory, the lack of which shall render a
strike illegal.
In the present case, NCMB converted IBM’s notices into preventive mediation as it found that the real issues
raised are non-strikeable. Such order is in pursuance of the NCMB’s duty to exert “all efforts at mediation and
conciliation to enable the parties to settle the dispute amicably,” and in line with the state policy of favoring
voluntary modes of settling labor disputes. In accordance with the Implementing Rules of the Labor
Code, the said conversion has the effect of dismissing the notices of strike filed by respondent. A case in
point is PAL v. Drilon, where we declared a strike illegal for lack of a valid notice of strike, in view of the
NCMB’s conversion of the notice therein into a preventive mediation case.

Clearly, therefore, applying the aforecited ruling to the case at bar, when the NCMB ordered the preventive
mediation on May 2, 1994, respondent had thereupon lost the notices of strike it had filed. Subsequently,
however, it still defiantly proceeded with the strike while mediation was ongoing, and notwithstanding the
letter-advisories of NCMB warning it of its lack of notice of strike. In the case of NUWHRAIN v. NLRC,
where the petitioner-union therein similarly defied a prohibition by the NCMB, we said: Petitioners should
have complied with the prohibition to strike ordered by the NCMB when the latter dismissed the notices of
strike after finding that the alleged acts of discrimination of the hotel were not ULP, hence not “strikeable.”
The refusal of the petitioners to heed said proscription of the NCMB is reflective of bad faith.

Such disregard of the mediation proceedings was a blatant violation of the Implementing Rules, which
explicitly oblige the parties to bargain collectively in good faith and prohibit them from impeding or
disrupting the proceedings.

Moreover, it bears stressing that Article 264(a) of the Labor Code explicitly states that a declaration of strike
without first having filed the required notice is a prohibited activity, which may be prevented through an
injunction in accordance with Article 254. Clearly, public respondent should have granted the injunctive
relief to prevent the grave damage brought about by the unlawful strike.

Also noteworthy is public respondent’s disregard of petitioner’s argument pointing out the union’s failure to
observe the CBA provisions on grievance and arbitration. In the case of San Miguel Corp. v. NLRC, we
ruled that the union therein violated the mandatory provisions of the CBA when it filed a notice of strike
without availing of the remedies prescribed therein.

As to petitioner’s allegation of violation of the no-strike provision in the CBA, jurisprudence has enunciated
that such clauses only bar strikes which are economic in nature, but not strikes grounded on unfair labor
practices. The notices filed in the case at bar alleged unfair labor practices, the initial determination of
which would entail fact-finding that is best left for the labor arbiters. Nevertheless, our finding herein of the
invalidity of the notices of strike dispenses with the need to discuss this issue.