G.R. No. 87700 June 13, 1990
inciting, instigating and/or inducing the employees
SAN MIGUEL CORPORATION EMPLOYEES UNION-PTGWO, DANIEL
S.L. BORBON II, HERMINIA REYES, MARCELA PURIFICACION, ET
AL., petitioners,
vs.
HON. JESUS G. BERSAMIRA, IN HIS CAPACITY AS PRESIDING
JUDGE OF BRANCH 166, RTC, PASIG, and SAN MIGUEL
CORPORATION, respondents.
Romeo C. Lagman for petitioners.
Jardeleza, Sobrevinas, Diaz, Mayudini & Bodegon for respondents.
MELENCIO-HERRERA, J.:
Respondent Judge of the Regional Trial Court of Pasig, Branch 166, is
taken to task by petitioners in this special civil action for certiorari and
Prohibition for having issued the challenged Writ of Preliminary Injunction
on 29 March 1989 in Civil Case No. 57055 of his Court entitled "San Miguel
Corporation vs. SMCEU-PTGWO, et als."
Petitioners' plea is that said Writ was issued without or in excess of
jurisdiction and with grave abuse of discretion, a labor dispute being
involved. Private respondent San Miguel Corporation (SanMig. for short),
for its part, defends the Writ on the ground of absence of any employer-
employee relationship between it and the contractual workers employed by
the companies Lipercon Services, Inc. (Lipercon) and D'Rite Service
Enterprises (D'Rite), besides the fact that the Union is bereft of personality
to represent said workers for purposes of collective bargaining. The Solicitor
General agrees with the position of SanMig.
The antecedents of the controversy reveal that:
Sometime in 1983 and 1984, SanMig entered into contracts for
merchandising services with Lipercon and D'Rite (Annexes K and I,
SanMig's Comment, respectively). These companies are independent
contractors duly licensed by the Department of Labor and Employment
(DOLE). SanMig entered into those contracts to maintain its competitive
position and in keeping with the imperatives of efficiency, business
expansion and diversity of its operation. In said contracts, it was expressly
understood and agreed that the workers employed by the contractors were
to be paid by the latter and that none of them were to be deemed
employees or agents of SanMig. There was to be no employer-employee
relation between the contractors and/or its workers, on the one hand, and
SanMig on the other.
Petitioner San Miguel Corporation Employees Union-PTWGO (the Union,
for brevity) is the duly authorized representative of the monthly paid rank-
and-file employees of SanMig with whom the latter executed a Collective
Bargaining Agreement (CBA) effective 1 July 1986 to 30 June 1989 (Annex
A, SanMig's Comment). Section 1 of their CBA specifically provides that
"temporary, probationary, or contract employees and workers are excluded
from the bargaining unit and, therefore, outside the scope of this
Agreement."
In a letter, dated 20 November 1988 (Annex C, Petition), the Union advised
SanMig that some Lipercon and D'Rite workers had signed up for union
membership and sought the regularization of their employment with SMC.
The Union alleged that this group of employees, while appearing to be
contractual workers supposedly independent contractors, have been
continuously working for SanMig for a period ranging from six (6) months to
fifteen (15) years and that their work is neither casual nor seasonal as they
are performing work or activities necessary or desirable in the usual
business or trade of SanMig. Thus, it was contended that there exists a
"labor-only" contracting situation. It was then demanded that the
employment status of these workers be regularized.
On 12 January 1989 on the ground that it had failed to receive any
favorable response from SanMig, the Union filed a notice of strike for unfair
labor practice, CBA violations, and union busting (Annex D, Petition).
On 30 January 1989, the Union again filed a second notice of strike for
unfair labor practice (Annex F, Petition).
As in the first notice of strike. Conciliatory meetings were held on the
second notice. Subsequently, the two (2) notices of strike were consolidated
and several conciliation conferences were held to settle the dispute before
the National Conciliation and Mediation Board (NCMB) of DOLE (Annex G,
Petition).
Beginning 14 February 1989 until 2 March 1989, series of pickets were
staged by Lipercon and D'Rite workers in various SMC plants and offices.
On 6 March 1989, SMC filed a verified Complaint for Injunction and
Damages before respondent Court to enjoin the Union from:
a. representing and/or acting for and in behalf of the
employees of LIPERCON and/or D'RITE for the
purposes of collective bargaining;
b. calling for and holding a strike vote, to compel
plaintiff to hire the employees or workers of
LIPERCON and D'RITE;
c.
or workers of LIPERCON and D'RITE to demonstrate
and/or picket at the plants and offices of plaintiff within
the bargaining unit referred to in the CBA,...;
d. staging a strike to compel plaintiff to hire the
employees or workers of LIPERCON and D'RITE;
e. using the employees or workers of LIPERCON
AND D'RITE to man the strike area and/or picket lines
and/or barricades which the defendants may set up at
the plants and offices of plaintiff within the bargaining
unit referred to in the CBA ...;
f. intimidating, threatening with bodily harm and/or
molesting the other employees and/or contract
workers of plaintiff, as well as those persons lawfully
transacting business with plaintiff at the work places
within the bargaining unit referred to in the CBA, ..., to
compel plaintiff to hire the employees or workers of
LIPERCON and D'RITE;
g. blocking, preventing, prohibiting, obstructing and/or
impeding the free ingress to, and egress from, the
work places within the bargaining unit referred to in
the CBA .., to compel plaintiff to hire the employees or
workers of LIPERCON and D'RITE;
h. preventing and/or disrupting the peaceful and
normal operation of plaintiff at the work places within
the bargaining unit referred to in the CBA, Annex 'C'
hereof, to compel plaintiff to hire the employees or
workers of LIPERCON and D'RITE. (Annex H,
Petition)
Respondent Court found the Complaint sufficient in form and substance and
issued a Temporary Restraining Order for the purpose of maintaining
the status quo, and set the application for Injunction for hearing.
In the meantime, on 13 March 1989, the Union filed a Motion to Dismiss
SanMig's Complaint on the ground of lack of jurisdiction over the
case/nature of the action, which motion was opposed by SanMig. That
Motion was denied by respondent Judge in an Order dated 11 April 1989.
After several hearings on SanMig's application for injunctive relief, where
the parties presented both testimonial and documentary evidence on 25
March 1989, respondent Court issued the questioned Order (Annex A,
Petition) granting the application and enjoining the Union from Committing
the acts complained of, supra. Accordingly, on 29 March 1989, respondent
Court issued the corresponding Writ of Preliminary Injunction after SanMig
had posted the required bond of P100,000.00 to answer for whatever
damages petitioners may sustain by reason thereof.
In issuing the Injunction, respondent Court rationalized:
The absence of employer-employee relationship
negates the existence of labor dispute. Verily, this
court has jurisdiction to take cognizance of plaintiff's
grievance.
The evidence so far presented indicates that plaintiff
has contracts for services with Lipercon and D'Rite.
The application and contract for employment of the
defendants' witnesses are either with Lipercon or
D'Rite. What could be discerned is that there is no
employer-employee relationship between plaintiff and
the contractual workers employed by Lipercon and
D'Rite. This, however, does not mean that a final
determination regarding the question of the existence
of employer-employee relationship has already been
made. To finally resolve this dispute, the court must
extensively consider and delve into the manner of
selection and engagement of the putative employee;
the mode of payment of wages; the presence or
absence of a power of dismissal; and the Presence or
absence of a power to control the putative employee's
conduct. This necessitates a full-blown trial. If the acts
complained of are not restrained, plaintiff would,
undoubtedly, suffer irreparable damages. Upon the
other hand, a writ of injunction does not necessarily
expose defendants to irreparable damages.
Evidently, plaintiff has established its right to the relief
demanded. (p. 21, Rollo)
Anchored on grave abuse of discretion, petitioners are now before us
seeking nullification of the challenged Writ. On 24 April 1989, we issued a
Temporary Restraining Order enjoining the implementation of the Injunction
issued by respondent Court. The Union construed this to mean that "we can
now strike," which it superimposed on the Order and widely circulated to
entice the Union membership to go on strike. Upon being apprised thereof,
in a Resolution of 24 May 1989, we required the parties to "RESTORE
the status quo ante declaration of strike" (p. 2,62 Rollo).
In the meantime, however, or on 2 May 1989, the Union went on strike.
Apparently, some of the contractual workers of Lipercon and D'Rite had
been laid off. The strike adversely affected thirteen (13) of the latter's plants
and offices.
On 3 May 1989, the National Conciliation and Mediation Board (NCMB)
called the parties to conciliation. The Union stated that it would lift the strike
if the thirty (30) Lipercon and D'Rite employees were recalled, and
discussion on their other demands, such as wage distortion and
appointment of coordinators, were made. Effected eventually was a
Memorandum of Agreement between SanMig and the Union that "without
prejudice to the outcome of G.R. No. 87700 (this case) and Civil Case No.
57055 (the case below), the laid-off individuals ... shall be recalled effective
8 May 1989 to their former jobs or equivalent positions under the same
terms and conditions prior to "lay-off" (Annex 15, SanMig Comment). In
turn, the Union would immediately lift the pickets and return to work.
After an exchange of pleadings, this Court, on 12 October 1989, gave due
course to the Petition and required the parties to submit their memoranda
simultaneously, the last of which was filed on 9 January 1990.
The focal issue for determination is whether or not respondent Court
correctly assumed jurisdiction over the present controversy and properly
issued the Writ of Preliminary Injunction to the resolution of that question, is
the matter of whether, or not the case at bar involves, or is in connection
with, or relates to a labor dispute. An affirmative answer would bring the
case within the original and exclusive jurisdiction of labor tribunals to the
exclusion of the regular Courts.
Petitioners take the position that 'it is beyond dispute that the controversy in
the court a quo involves or arose out of a labor dispute and is directly
connected or interwoven with the cases pending with the NCMB-DOLE, and
is thus beyond the ambit of the public respondent's jurisdiction. That the
acts complained of (i.e., the mass concerted action of picketing and the
reliefs prayed for by the private respondent) are within the competence of
labor tribunals, is beyond question" (pp. 6-7, Petitioners' Memo).
On the other hand, SanMig denies the existence of any employer-employee
relationship and consequently of any labor dispute between itself and the
Union. SanMig submits, in particular, that "respondent Court is vested with
jurisdiction and judicial competence to enjoin the specific type of strike
staged by petitioner union and its officers herein complained of," for the
reasons that:
A. The exclusive bargaining representative of an
employer unit cannot strike to compel the employer to
hire and thereby create an employment relationship
with contractual workers, especially were the
contractual workers were recognized by the union,
under the governing collective bargaining agreement,
as excluded from, and therefore strangers to, the
bargaining unit.
B. A strike is a coercive economic weapon granted
the bargaining representative only in the event of a
deadlock in a labor dispute over 'wages, hours of work
and all other and of the employment' of the employees
in the unit. The union leaders cannot instigate a strike
to compel the employer, especially on the eve of
certification elections, to hire strangers or workers
outside the unit, in the hope the latter will help re-elect
them.
C. Civil courts have the jurisdiction to enjoin the above
because this specie of strike does not arise out of a
labor dispute, is an abuse of right, and violates the
employer's constitutional liberty to hire or not to hire.
(SanMig's Memorandum, pp. 475-476, Rollo).
We find the Petition of a meritorious character.
A "labor dispute" as defined in Article 212 (1) of the Labor Code includes
"any controversy or matter concerning terms and conditions of employment
or the association or representation of persons in negotiating, fixing,
maintaining, changing, or arranging the terms and conditions of
employment, regardless of whether the disputants stand in the proximate
relation of employer and employee."
While it is SanMig's submission that no employer-employee relationship
exists between itself, on the one hand, and the contractual workers of
Lipercon and D'Rite on the other, a labor dispute can nevertheless exist
"regardless of whether the disputants stand in the proximate relationship of
employer and employee" (Article 212 [1], Labor Code, supra) provided the
controversy concerns, among others, the terms and conditions of
employment or a "change" or "arrangement" thereof (ibid). Put differently,
and as defined by law, the existence of a labor dispute is not negative by
the fact that the plaintiffs and defendants do not stand in the proximate
relation of employer and employee.
That a labor dispute, as defined by the law, does exist herein is evident. At
bottom, what the Union seeks is to regularize the status of the employees
contracted by Lipercon and D'Rite in effect, that they be absorbed into the
working unit of SanMig. This matter definitely dwells on the working
relationship between said employees vis-a-vis SanMig. Terms, tenure and
conditions of their employment and the arrangement of those terms are thus
involved bringing the matter within the purview of a labor dispute. Further,
the Union also seeks to represent those workers, who have signed up for
Union membership, for the purpose of collective bargaining. SanMig, for its
part, resists that Union demand on the ground that there is no employer-
employee relationship between it and those workers and because the
demand violates the terms of their CBA. Obvious then is that representation
and association, for the purpose of negotiating the conditions of
employment are also involved. In fact, the injunction sought by SanMig was
precisely also to prevent such representation. Again, the matter of
representation falls within the scope of a labor dispute. Neither can it be
denied that the controversy below is directly connected with the labor
dispute already taken cognizance of by the NCMB-DOLE (NCMB-NCR- NS-
01- 021-89; NCMB NCR NS-01-093-83).
Whether or not the Union demands are valid; whether or not SanMig's
contracts with Lipercon and D'Rite constitute "labor-only" contracting and,
therefore, a regular employer-employee relationship may, in fact, be said to
exist; whether or not the Union can lawfully represent the workers of
Lipercon and D'Rite in their demands against SanMig in the light of the
existing CBA; whether or not the notice of strike was valid and the strike
itself legal when it was allegedly instigated to compel the employer to hire
strangers outside the working unit; — those are issues the resolution of
which call for the application of labor laws, and SanMig's cause's of action
in the Court below are inextricably linked with those issues.
The precedent in Layno vs. de la Cruz (G.R. No. L-29636, 30 April 1965, 13
SCRA 738) relied upon by SanMig is not controlling as in that case there
was no controversy over terms, tenure or conditions, of employment or the
representation of employees that called for the application of labor laws. In
that case, what the petitioning union demanded was not a change in
working terms and conditions, or the representation of the employees, but
that its members be hired as stevedores in the place of the members of a
rival union, which petitioners wanted discharged notwithstanding the
existing contract of the arrastre company with the latter union. Hence, the
ruling therein, on the basis of those facts unique to that case, that such a
demand could hardly be considered a labor dispute.
As the case is indisputably linked with a labor dispute, jurisdiction belongs
to the labor tribunals. As explicitly provided for in Article 217 of the Labor
Code, prior to its amendment by R.A. No. 6715 on 21 March 1989, since
the suit below was instituted on 6 March 1989, Labor Arbiters have original
and exclusive jurisdiction to hear and decide the following cases involving
all workers including "1. unfair labor practice cases; 2. those that workers
may file involving wages, hours of work and other terms and conditions of
employment; ... and 5. cases arising from any violation of Article 265 of this
Code, including questions involving the legality of striker and lockouts. ..."
Article 217 lays down the plain command of the law.
The claim of SanMig that the action below is for damages under Articles 19,
20 and 21 of the Civil Code would not suffice to keep the case within the
jurisdictional boundaries of regular Courts. That claim for damages is
interwoven with a labor dispute existing between the parties and would
have to be ventilated before the administrative machinery established for
the expeditious settlement of those disputes. To allow the action filed below
to prosper would bring about "split jurisdiction" which is obnoxious to the
orderly administration of justice (Philippine Communications, Electronics
and Electricity Workers Federation vs. Hon. Nolasco, L-24984, 29 July
1968, 24 SCRA 321).
We recognize the proprietary right of SanMig to exercise an inherent
management prerogative and its best business judgment to determine
whether it should contract out the performance of some of its work to
independent contractors. However, the rights of all workers to self-
organization, collective bargaining and negotiations, and peaceful concerted
activities, including the right to strike in accordance with law (Section 3,
Article XIII, 1987 Constitution) equally call for recognition and protection.
Those contending interests must be placed in proper perspective and
equilibrium.
WHEREFORE, the Writ of certiorari is GRANTED and the Orders of
respondent Judge of 25 March 1989 and 29 March 1989 are SET ASIDE.
The Writ of Prohibition is GRANTED and respondent Judge is enjoined from
taking any further action in Civil Case No. 57055 except for the purpose of
dismissing it. The status quo ante declaration of strike ordered by the Court
on 24 May 1989 shall be observed pending the proceedings in the National
Conciliation Mediation Board-Department of Labor and Employment,
docketed as NCMB-NCR-NS-01-02189 and NCMB-NCR-NS-01-093-83. No
costs.
SO ORDERED.
G.R. No. 172013 October 2, 2009
PATRICIA HALAGUEÑA, MA. ANGELITA L. PULIDO, MA.
TERESITA P. SANTIAGO, MARIANNE V. KATINDIG, BERNADETTE
A. CABALQUINTO, LORNA B. TUGAS, MARY CHRISTINE A.
VILLARETE, CYNTHIA A. STEHMEIER, ROSE ANNA G. VICTA,
NOEMI R. CRESENCIO, and other flight attendants of PHILIPPINE
AIRLINES, Petitioners,
vs.
PHILIPPINE AIRLINES INCORPORATED, Respondent.
DECISION
PERALTA, J.:
Before this Court is a petition for review on certiorari under Rule 45 of
the Rules of Court seeking to annul and set aside the Decision1 and
the Resolution2 of the Court of Appeals (CA) in CA-G.R. SP. No.
86813.
Petitioners were employed as female flight attendants of respondent
Philippine Airlines (PAL) on different dates prior to November 22, 1996.
They are members of the Flight Attendants and Stewards Association
of the Philippines (FASAP), a labor organization certified as the sole
and exclusive certified as the sole and exclusive bargaining
representative of the flight attendants, flight stewards and pursers of
respondent.
On July 11, 2001, respondent and FASAP entered into a Collective
Bargaining Agreement3 incorporating the terms and conditions of their
agreement for the years 2000 to 2005, hereinafter referred to as PAL-
FASAP CBA.
Section 144, Part A of the PAL-FASAP CBA, provides that:
A. For the Cabin Attendants hired before 22 November 1996:
xxxx
3. Compulsory Retirement
Subject to the grooming standards provisions of this Agreement,
compulsory retirement shall be fifty-five (55) for females and sixty (60)
for males. x x x.
In a letter dated July 22, 2003,4 petitioners and several female cabin
crews manifested that the aforementioned CBA provision on
compulsory retirement is discriminatory, and demanded for an equal
treatment with their male counterparts. This demand was reiterated in
a letter5 by petitioners' counsel addressed to respondent demanding
the removal of gender discrimination provisions in the coming re-
negotiations of the PAL-FASAP CBA.
On July 12, 2004, Robert D. Anduiza, President of FASAP submitted
their 2004-2005 CBA proposals6 and manifested their willingness to
commence the collective bargaining negotiations between the
management and the association, at the soonest possible time.
On July 29, 2004, petitioners filed a Special Civil Action for Declaratory
Relief with Prayer for the Issuance of Temporary Restraining Order
and Writ of Preliminary Injunction7 with the Regional Trial Court (RTC)
of Makati City, Branch 147, docketed as Civil Case No. 04-886, against
respondent for the invalidity of Section 144, Part A of the PAL-FASAP
CBA. The RTC set a hearing on petitioners' application for a TRO and,
thereafter, required the parties to submit their respective memoranda.
On August 9, 2004, the RTC issued an Order8 upholding its jurisdiction
over the present case. The RTC reasoned that:
In the instant case, the thrust of the Petition is Sec. 144 of the subject
CBA which is allegedly discriminatory as it discriminates against
female flight attendants, in violation of the Constitution, the Labor
Code, and the CEDAW. The allegations in the Petition do not make out
a labor dispute arising from employer-employee relationship as none is
shown to exist. This case is not directed specifically against
respondent arising from any act of the latter, nor does it involve a claim
against the respondent. Rather, this case seeks a declaration of the
nullity of the questioned provision of the CBA, which is within the
Court's competence, with the allegations in the Petition constituting the
bases for such relief sought.
The RTC issued a TRO on August 10, 2004,9 enjoining the respondent
for implementing Section 144, Part A of the PAL-FASAP CBA.
The respondent filed an omnibus motion10 seeking reconsideration of
the order overruling its objection to the jurisdiction of the RTC the lifting
of the TRO. It further prayed that the (1) petitioners' application for the
issuance of a writ of preliminary injunction be denied; and (2) the
petition be dismissed or the proceedings in this case be suspended.
On September 27, 2004, the RTC issued an Order11 directing the
issuance of a writ of preliminary injunction enjoining the respondent or
any of its agents and representatives from further implementing Sec.
144, Part A of the PAL-FASAP CBA pending the resolution of the case.
Aggrieved, respondent, on October 8, 2004, filed a Petition for
Certiorari and Prohibition with Prayer for a Temporary Restraining
Order and Writ of Preliminary Injunction12 with the Court of Appeals
(CA) praying that the order of the RTC, which denied its objection to its
jurisdiction, be annuled and set aside for having been issued without
and/or with grave abuse of discretion amounting to lack of jurisdiction.
The CA rendered a Decision, dated August 31, 2005, granting the
respondent's petition, and ruled that:
WHEREFORE, the respondent court is by us declared to have NO
JURISDICTION OVER THE CASE BELOW and, consequently, all the
proceedings, orders and processes it has so far issued therein are
ANNULED and SET ASIDE. Respondent court is ordered to DISMISS
its Civil Case No. 04-886.
SO ORDERED.
Petitioner filed a motion for reconsideration,13 which was denied by the
CA in its Resolution dated March 7, 2006.
Hence, the instant petition assigning the following error:
THE COURT OF APPEALS' CONCLUSION THAT THE SUBJECT
MATTER IS A LABOR DISPUTE OR GRIEVANCE IS CONTRARY TO
LAW AND JURISPRUDENCE.
The main issue in this case is whether the RTC has jurisdiction over
the petitioners' action challenging the legality or constitutionality of the
provisions on the compulsory retirement age contained in the CBA
between respondent PAL and FASAP.
Petitioners submit that the RTC has jurisdiction in all civil actions in
which the subject of the litigation is incapable of pecuniary estimation
and in all cases not within the exclusive jurisdiction of any court,
tribunal, person or body exercising judicial or quasi-judicial functions.
The RTC has the power to adjudicate all controversies except those
expressly witheld from the plenary powers of the court. Accordingly, it
has the power to decide issues of constitutionality or legality of the
provisions of Section 144, Part A of the PAL-FASAP CBA. As the issue
involved is constitutional in character, the labor arbiter or the National
Labor Relations Commission (NLRC) has no jurisdiction over the case
and, thus, the petitioners pray that judgment be rendered on the merits
declaring Section 144, Part A of the PAL-FASAP CBA null and void.
Respondent, on the other hand, alleges that the labor tribunals have
jurisdiction over the present case, as the controversy partakes of a
labor dispute. The dispute concerns the terms and conditions of
petitioners' employment in PAL, specifically their retirement age. The
RTC has no jurisdiction over the subject matter of petitioners' petition
for declaratory relief because the Voluntary Arbitrator or panel of
Voluntary Arbitrators have original and exclusive jurisdiction to hear
and decide all unresolved grievances arising from the interpretation or
implementation of the CBA. Regular courts have no power to set and
fix the terms and conditions of employment. Finally, respondent alleged
that petitioners' prayer before this Court to resolve their petition for
declaratory relief on the merits is procedurally improper and baseless.
The petition is meritorious.
Jurisdiction of the court is determined on the basis of the material
allegations of the complaint and the character of the relief prayed for
irrespective of whether plaintiff is entitled to such relief.14
In the case at bar, the allegations in the petition for declaratory relief
plainly show that petitioners' cause of action is the annulment of
Section 144, Part A of the PAL-FASAP CBA. The pertinent portion of
the petition recites:
CAUSE OF ACTION
24. Petitioners have the constitutional right to fundamental
equality with men under Section 14, Article II, 1987 of the
 Constitution and, within the specific context of this case, with
the male cabin attendants of Philippine Airlines.
26. Petitioners have the statutory right to equal work and
employment opportunities with men under Article 3,
Presidential Decree No. 442, The Labor Code and, within the
specific context of this case, with the male cabin attendants
of Philippine Airlines.
27. It is unlawful, even criminal, for an employer to
discriminate against women employees with respect to terms
and conditions of employment solely on account of their sex
under Article 135 of the Labor Code as amended by
Republic Act No. 6725 or the Act Strengthening Prohibition
on Discrimination Against Women.
28. This discrimination against Petitioners is likewise against
the Convention on the Elimination of All Forms of
Discrimination Against Women (hereafter, "CEDAW"), a
multilateral convention that the Philippines ratified in 1981.
The Government and its agents, including our courts, not
only must condemn all forms of discrimination against
women, but must also implement measures towards its
elimination.
29. This case is a matter of public interest not only because
of Philippine Airlines' violation of the Constitution and
existing laws, but also because it highlights the fact that
twenty-three years after the Philippine Senate ratified the
CEDAW, discrimination against women continues.
31. Section 114, Part A of the PAL-FASAP 2000-20005 CBA
on compulsory retirement from service is invidiously
discriminatory against and manifestly prejudicial to
Petitioners because, they are compelled to retire at a lower
age (fifty-five (55) relative to their male counterparts (sixty
(60).
33. There is no reasonable, much less lawful, basis for
Philippine Airlines to distinguish, differentiate or classify
cabin attendants on the basis of sex and thereby arbitrarily
set a lower compulsory retirement age of 55 for Petitioners
for the sole reason that they are women.
37. For being patently unconstitutional and unlawful, Section
114, Part A of the PAL-FASAP 2000-2005 CBA must be
declared invalid and stricken down to the extent that it
discriminates against petitioner.
38. Accordingly, consistent with the constitutional and
statutory guarantee of equality between men and women,
Petitioners should be adjudged and declared entitled, like
their male counterparts, to work until they are sixty (60)
years old.
PRAYER
WHEREFORE, it is most respectfully prayed that the Honorable Court:
c. after trial on the merits:
(I) declare Section 114, Part A of the PAL-FASAP 2000-2005 CBA
INVALID, NULL and VOID to the extent that it discriminates against
Petitioners; x x x x
From the petitioners' allegations and relief prayed for in its petition, it is
clear that the issue raised is whether Section 144, Part A of the PAL-
FASAP CBA is unlawful and unconstitutional. Here, the petitioners'
primary relief in Civil Case No. 04-886 is the annulment of Section 144,
Part A of the PAL-FASAP CBA, which allegedly discriminates against
them for being female flight attendants. The subject of litigation is
incapable of pecuniary estimation, exclusively cognizable by the RTC,
pursuant to Section 19 (1) of Batas Pambansa Blg. 129, as
amended.15 Being an ordinary civil action, the same is beyond the
jurisdiction of labor tribunals.
The said issue cannot be resolved solely by applying the Labor Code.
Rather, it requires the application of the Constitution, labor statutes,
law on contracts and the Convention on the Elimination of All Forms of
Discrimination Against Women,16 and the power to apply and interpret
the constitution and CEDAW is within the jurisdiction of trial courts, a
court of general jurisdiction. In Georg Grotjahn GMBH & Co. v.
Isnani,17 this Court held that not every dispute between an employer
and employee involves matters that only labor arbiters and the NLRC
can resolve in the exercise of their adjudicatory or quasi-judicial
powers. The jurisdiction of labor arbiters and the NLRC under Article
217 of the Labor Code is limited to disputes arising from an employer-
employee relationship which can only be resolved by reference to the
Labor Code, other labor statutes, or their collective bargaining
agreement.
Not every controversy or money claim by an employee against the
employer or vice-versa is within the exclusive jurisdiction of the labor
arbiter. Actions between employees and employer where the
employer-employee relationship is merely incidental and the cause of
action precedes from a different source of obligation is within the
exclusive jurisdiction of the regular court.18 Here, the employer-
employee relationship between the parties is merely incidental and the
cause of action ultimately arose from different sources of obligation,
i.e., the Constitution and CEDAW.
Thus, where the principal relief sought is to be resolved not by
reference to the Labor Code or other labor relations statute or a
collective bargaining agreement but by the general civil law, the
jurisdiction over the dispute belongs to the regular courts of justice and
not to the labor arbiter and the NLRC. In such situations, resolution of
the dispute requires expertise, not in labor management relations nor
in wage structures and other terms and conditions of employment, but
rather in the application of the general civil law. Clearly, such claims fall
outside the area of competence or expertise ordinarily ascribed to labor
arbiters and the NLRC and the rationale for granting jurisdiction over
such claims to these agencies disappears.19
If We divest the regular courts of jurisdiction over the case, then which
tribunal or forum shall determine the constitutionality or legality of the
assailed CBA provision?
This Court holds that the grievance machinery and voluntary arbitrators
do not have the power to determine and settle the issues at hand. They
have no jurisdiction and competence to decide constitutional issues
relative to the questioned compulsory retirement age. Their exercise of
jurisdiction is futile, as it is like vesting power to someone who cannot
wield it.
In Gonzales v. Climax Mining Ltd.,20 this Court affirmed the jurisdiction
of courts over questions on constitutionality of contracts, as the same
involves the exercise of judicial power. The Court said:
Whether the case involves void or voidable contracts is still a judicial
question. It may, in some instances, involve questions of fact especially
with regard to the determination of the circumstances of the execution
of the contracts. But the resolution of the validity or voidness of the
contracts remains a legal or judicial question as it requires the exercise
of judicial function. It requires the ascertainment of what laws are
applicable to the dispute, the interpretation and application of those
laws, and the rendering of a judgment based thereon. Clearly, the
dispute is not a mining conflict. It is essentially judicial. The complaint
was not merely for the determination of rights under the mining
contracts since the very validity of those contracts is put in issue.
In Saura v. Saura, Jr.,21 this Court emphasized the primacy of the
regular court's judicial power enshrined in the Constitution that is true
that the trend is towards vesting administrative bodies like the SEC
with the power to adjudicate matters coming under their particular
specialization, to insure a more knowledgeable solution of the
problems submitted to them. This would also relieve the regular courts
of a substantial number of cases that would otherwise swell their
already clogged dockets. But as expedient as this policy may be, it
should not deprive the courts of justice of their power to decide
ordinary cases in accordance with the general laws that do not
require any particular expertise or training to interpret and apply.
Otherwise, the creeping take-over by the administrative agencies
of the judicial power vested in the courts would render the
judiciary virtually impotent in the discharge of the duties assigned
to it by the Constitution.
To be sure, in Rivera v. Espiritu,22 after Philippine Airlines (PAL) and
PAL Employees Association (PALEA) entered into an agreement,
which includes the provision to suspend the PAL-PALEA CBA for 10
years, several employees questioned its validity via a petition for
certiorari directly to the Supreme Court. They said that the suspension
was unconstitutional and contrary to public policy. Petitioners submit
that the suspension was inordinately long, way beyond the maximum
statutory life of 5 years for a CBA provided for in Article 253-A of the
Labor Code. By agreeing to a 10-year suspension, PALEA, in effect,
abdicated the workers' constitutional right to bargain for another CBA
at the mandated time.
In that case, this Court denied the petition for certiorari, ruling that
there is available to petitioners a plain, speedy, and adequate remedy
in the ordinary course of law. The Court said that while the petition was
denominated as one for certiorari and prohibition, its object was
actually the nullification of the PAL-PALEA agreement. As such,
petitioners' proper remedy is an ordinary civil action for annulment of
contract, an action which properly falls under the jurisdiction of the
regional trial courts.
The change in the terms and conditions of employment, should Section
144 of the CBA be held invalid, is but a necessary and unavoidable
consequence of the principal relief sought, i.e., nullification of the
alleged discriminatory provision in the CBA. Thus, it does not
necessarily follow that a resolution of controversy that would bring
about a change in the terms and conditions of employment is a labor
dispute, cognizable by labor tribunals. It is unfair to preclude petitioners
from invoking the trial court's jurisdiction merely because it may
eventually result into a change of the terms and conditions of
employment. Along that line, the trial court is not asked to set and fix
the terms and conditions of employment, but is called upon to
determine whether CBA is consistent with the laws.
Although the CBA provides for a procedure for the adjustment of
grievances, such referral to the grievance machinery and thereafter to
voluntary arbitration would be inappropriate to the petitioners, because
the union and the management have unanimously agreed to the terms
of the CBA and their interest is unified.
In Pantranco North Express, Inc., v. NLRC,23 this Court held that:
x x x Hence, only disputes involving the union and the company shall
be referred to the grievance machinery or voluntary arbitrators.
In the instant case, both the union and the company are united or have
come to an agreement regarding the dismissal of private respondents.
No grievance between them exists which could be brought to a
grievance machinery. The problem or dispute in the present case is
between the union and the company on the one hand and some union
and non-union members who were dismissed, on the other hand. The
dispute has to be settled before an impartial body. The grievance
machinery with members designated by the union and the company
cannot be expected to be impartial against the dismissed employees.
Due process demands that the dismissed workers’ grievances be
ventilated before an impartial body. x x x .
Applying the same rationale to the case at bar, it cannot be said that
the "dispute" is between the union and petitioner company because
both have previously agreed upon the provision on "compulsory
retirement" as embodied in the CBA. Also, it was only private
respondent on his own who questioned the compulsory retirement. x x
x.
In the same vein, the dispute in the case at bar is not between FASAP
and respondent PAL, who have both previously agreed upon the
provision on the compulsory retirement of female flight attendants as
embodied in the CBA. The dispute is between respondent PAL and
several female flight attendants who questioned the provision on
compulsory retirement of female flight attendants. Thus, applying the
principle in the aforementioned case cited, referral to the grievance
machinery and voluntary arbitration would not serve the interest of the
petitioners.
Besides, a referral of the case to the grievance machinery and to the
voluntary arbitrator under the CBA would be futile because respondent
already implemented Section 114, Part A of PAL-FASAP CBA when
several of its female flight attendants reached the compulsory
retirement age of 55.
Further, FASAP, in a letter dated July 12, 2004, addressed to PAL,
submitted its association's bargaining proposal for the remaining period
of 2004-2005 of the PAL-FASAP CBA, which includes the
renegotiation of the subject Section 144. However, FASAP's attempt to
change the questioned provision was shallow and superficial, to say
the least, because it exerted no further efforts to pursue its proposal.
When petitioners in their individual capacities questioned the legality of
the compulsory retirement in the CBA before the trial court, there was
no showing that FASAP, as their representative, endeavored to adjust,
settle or negotiate with PAL for the removal of the difference in
compulsory age retirement between its female and male flight
attendants, particularly those employed before November 22, 1996.
Without FASAP's active participation on behalf of its female flight
attendants, the utilization of the grievance machinery or voluntary
arbitration would be pointless.
Although it is a rule that a contract freely entered between the parties
should be respected, since a contract is the law between the parties,
said rule is not absolute.
In Pakistan International Airlines Corporation v. Ople,25 this Court held
that:
The principle of party autonomy in contracts is not, however, an
absolute principle. The rule in Article 1306, of our Civil Code is that the
contracting parties may establish such stipulations as they may deem
convenient, "provided they are not contrary to law, morals, good
customs, public order or public policy." Thus, counter-balancing the
principle of autonomy of contracting parties is the equally general rule
that provisions of applicable law, especially provisions relating to
matters affected with public policy, are deemed written into the
contract. Put a little differently, the governing principle is that parties
may not contract away applicable provisions of law especially
peremptory provisions dealing with matters heavily impressed with
public interest. The law relating to labor and employment is clearly
such an area and parties are not at liberty to insulate themselves and
their relationships from the impact of labor laws and regulations by
simply contracting with each other.
Moreover, the relations between capital and labor are not merely
contractual. They are so impressed with public interest that labor
contracts must yield to the common good.x x x 26 The supremacy of the
law over contracts is explained by the fact that labor contracts are not
ordinary contracts; these are imbued with public interest and therefore
are subject to the police power of the state.27 It should not be taken to
mean that retirement provisions agreed upon in the CBA are absolutely
beyond the ambit of judicial review and nullification. A CBA, as a labor
contract, is not merely contractual in nature but impressed with public
interest. If the retirement provisions in the CBA run contrary to law,
public morals, or public policy, such provisions may very well be
voided.28
Finally, the issue in the petition for certiorari brought before the CA by
the respondent was the alleged exercise of grave abuse of discretion
of the RTC in taking cognizance of the case for declaratory relief.
When the CA annuled and set aside the RTC's order, petitioners
sought relief before this Court through the instant petition for review
under Rule 45. A perusal of the petition before Us, petitioners pray for
the declaration of the alleged discriminatory provision in the CBA
against its female flight attendants.
This Court is not persuaded. The rule is settled that pure questions of
fact may not be the proper subject of an appeal by certiorari under
Rule 45 of the Revised Rules of Court. This mode of appeal is
generally limited only to questions of law which must be distinctly set
forth in the petition. The Supreme Court is not a trier of facts.29
The question as to whether said Section 114, Part A of the PAL-
FASAP CBA is discriminatory or not is a question of fact. This would
require the presentation and reception of evidence by the parties in
order for the trial court to ascertain the facts of the case and whether
said provision violates the Constitution, statutes and treaties. A full-
blown trial is necessary, which jurisdiction to hear the same is properly
lodged with the the RTC. Therefore, a remand of this case to the RTC
for the proper determination of the merits of the petition for declaratory
relief is just and proper.1avvphi1
WHEREFORE, the petition is PARTLY GRANTED. The Decision and
Resolution of the Court of Appeals, dated August 31, 2005 and March
7, 2006, respectively, in CA-G.R. SP. No. 86813
are REVERSED and SET ASIDE. The Regional Trial Court of Makati
City, Branch 147 is DIRECTED to continue the proceedings in Civil
Case No. 04-886 with deliberate dispatch.
SO ORDERED.

The trial court in this case is not asked to interpret Section 144, Part A
of the PAL-FASAP CBA. Interpretation, as defined in Black's Law
Dictionary, is the art of or process of discovering and ascertaining the
meaning of a statute, will, contract, or other written document. 24 The
provision regarding the compulsory retirement of flight attendants is not
ambiguous and does not require interpretation. Neither is there any
question regarding the implementation of the subject CBA provision,
because the manner of implementing the same is clear in itself. The
only controversy lies in its intrinsic validity.
G.R. No. 196539 October 10, 2012
MARIETTA N. PORTILLO, Petitioner,
vs.
RUDOLF LIETZ, INC., RUDOLF LIETZ and COURT OF
APPEALS Respondents.
DECISION
PEREZ, J.:
Before us is a petition for certiorari assailing the Resolution 1 dated
14 October 2010 of the Court of Appeals in CA-G.R. SP No. I 065g
I which modified its Decision2 dated 31 March 2009, thus allowing
the legal compensation or petitioner Marietta N. Portillo's (Portillo)
monetary claims against respondent corporation Rudolf Lietz,
Inc.'s (Lietz Inc.)3 claim for liquidated damages arising from
Portillo’s alleged violation of the "Goodwill Clause" in the
employment contract executed by the parties.
The facts are not in dispute.
In a letter agreement dated 3 May 1991, signed by individual
respondent Rudolf Lietz (Rudolf) and conformed to by Portillo, the
latter was hired by the former under the following terms and
conditions:
A copy of [Lietz Inc.’s] work rules and policies on personnel is
enclosed and an inherent part of the terms and conditions of
employment.
We acknowledge your proposal in your application specifically to
the effect that you will not engage in any other gainful employment
by yourself or with any other company either directly or indirectly
without written consent of [Lietz Inc.], and we hereby accept and
henceforth consider your proposal an undertaking on your part, a
breach of which will render you liable to [Lietz Inc.] for liquidated
damages.
If you are in agreement with these terms and conditions of
employment, please signify your conformity below. 4
On her tenth (10th) year with Lietz Inc., specifically on 1 February
2002, Portillo was promoted to Sales Representative and received
a corresponding increase in basic monthly salary and sales quota.
In this regard, Portillo signed another letter agreement containing a
"Goodwill Clause:"
It remains understood and you agreed that, on the termination of
your employment by act of either you or [Lietz Inc.], and for a
period of three (3) years thereafter, you shall not engage directly or
indirectly as employee, manager, proprietor, or solicitor for yourself
or others in a similar or competitive business or the same
character of work which you were employed by [Lietz Inc.] to do
and perform. Should you breach this good will clause of this
Contract, you shall pay [Lietz Inc.] as liquidated damages the
amount of 100% of your gross compensation over the last 12
months, it being agreed that this sum is reasonable and just. 5
Three (3) years thereafter, on 6 June 2005, Portillo resigned from
Lietz Inc. During her exit interview, Portillo declared that she
intended to engage in business—a rice dealership, selling rice in
wholesale.
On 15 June 2005, Lietz Inc. accepted Portillo’s resignation and
reminded her of the "Goodwill Clause" in the last letter agreement
she had signed. Upon receipt thereof, Portillo jotted a note thereon
that the latest contract she had signed in February 2004 did not
contain any "Goodwill Clause" referred to by Lietz Inc. In response
thereto, Lietz Inc. categorically wrote:
Please be informed that the standard prescription of prohibiting
employees from engaging in business or seeking employment with
organizations that directly or indirectly compete against [Lietz Inc.]
for three (3) years after resignation remains in effect.
The documentation you pertain to is an internal memorandum of
your salary increase, not an employment contract. The absence of
the three-year prohibition clause in this document (or any
document for that matter) does not cancel the prohibition itself. We
did not, have not, and will not issue any cancellation of such in the
foreseeable future[.] [T]hus[,] regretfully, it is erroneous of you to
believe otherwise.6
In a subsequent letter dated 21 June 2005, Lietz Inc. wrote Portillo
and supposed that the exchange of correspondence between them
regarding the "Goodwill Clause" in the employment contract was a
moot exercise since Portillo’s articulated intention to go into
business, selling rice, will not compete with Lietz Inc.’s products.
Subsequently, Lietz Inc. learned that Portillo had been hired by Ed
Keller Philippines, Limited to head its Pharma Raw Material
Department. Ed Keller Limited is purportedly a direct competitor of
Lietz Inc.
Meanwhile, Portillo’s demands from Lietz Inc. for the payment of
her remaining salaries and commissions went unheeded. Lietz Inc.
gave Portillo the run around, on the pretext that her salaries and
commissions were still being computed.
On 14 September 2005, Portillo filed a complaint with the National
Labor Relations Commission (NLRC) for non-payment of 1½
months’ salary, two (2) months’ commission, 13th month pay, plus
moral, exemplary and actual damages and attorney’s fees.
In its position paper, Lietz Inc. admitted liability for Portillo’s money
claims in the total amount of P110,662.16. However, Lietz Inc.
raised the defense of legal compensation: Portillo’s money claims
should be offset against her liability to Lietz Inc. for liquidated
damages in the amount of ₱869,633.097 for Portillo’s alleged
breach of the "Goodwill Clause" in the employment contract when
she became employed with Ed Keller Philippines, Limited.
On 25 May 2007, Labor Arbiter Daniel J. Cajilig granted Portillo’s
complaint:
WHEREFORE, judgment is hereby rendered ordering respondents
Rudolf Lietz, Inc. to pay complainant Marietta N. Portillo the
amount of Php110,662.16, representing her salary and
commissions, including 13th month pay.8
On appeal by respondents, the NLRC, through its Second Division,
affirmed the ruling of Labor Arbiter Daniel J. Cajilig. On motion for
reconsideration, the NLRC stood pat on its ruling.
Expectedly, respondents filed a petition for certiorari before the
Court of Appeals, alleging grave abuse of discretion in the labor
tribunals’ rulings.
As earlier adverted to, the appellate court initially affirmed the labor
tribunals:
WHEREFORE, considering the foregoing premises, judgment is
hereby rendered by us DENYING the petition filed in this case. The
Resolution of the National Labor Relations Commission (NLRC),
Second Division, in the labor case docketed as NLRC NCR Case
No. 00-09- 08113-2005 [NLRC LAC No. 07-001965-07(5)] is
hereby AFFIRMED.9
The disposition was disturbed. The Court of Appeals, on motion for
reconsideration, modified its previous decision, thus:
WHEREFORE, in view of the foregoing premises, we
hereby MODIFY the decision promulgated on March 31, 2009 in
that, while we uphold the monetary award in favor of the
[petitioner] in the aggregate sum of ₱110,662.16 representing the
unpaid salary, commission and 13th month pay due to her, we
hereby allow legal compensation or set-off of such award of
monetary claims by her liability to [respondents] for liquidated
damages arising from her violation of the "Goodwill Clause" in her
employment contract with them.10
Portillo’s motion for reconsideration was denied.
Hence, this petition for certiorari listing the following acts as grave
abuse of discretion of the Court of Appeals:
THE COURT OF APPEALS ACTED WITH GRAVE ABUSE OF
DISCRETION BY EVADING TO RECOGNIZE (sic) THAT THE
RESPONDENTS’ EARLIER PETITION IS FATALLY DEFECTIVE;
THE COURT OF APPEALS ACTED WITH GRAVE ABUSE OF
DISCRETION BY OVERSTEPPING THE BOUNDS OF
APPELLATE JURISDICTION[;]
THE COURT OF APPEALS ACTED WITH GRAVE ABUSE OF
DISCRETION BY MODIFYING ITS PREVIOUS DECISION
BASED ON AN ISSUE THAT WAS RAISED ONLY ON THE
FIRST INSTANCE AS AN APPEAL BUT WAS NEVER AT THE
TRIAL COURT AMOUNTING TO DENIAL OF DUE PROCESS[;]
THE COURT OF APPEALS ACTED WITH GRAVE ABUSE OF
DISCRETION BY EVADING THE POSITIVE DUTY TO UPHOLD
THE RELEVANT LAWS[.]11
Simply, the issue is whether Portillo’s money claims for unpaid
salaries may be offset against respondents’ claim for liquidated
damages.
Before anything else, we address the procedural error committed
by Portillo, i.e., filing a petition for certiorari, a special civil action
under Rule 65 of the Rules of Court, instead of a petition for review
on certiorari, a mode of appeal, under Rule 45 thereof. On this
score alone, the petition should have been dismissed outright.
Section 1, Rule 45 of the Rules of Court expressly provides that a
party desiring to appeal by certiorari from a judgment or final order
or resolution of the Court of Appeals may file a verified petition for
review on certiorari. Considering that, in this case, appeal
by certiorari was available to Portillo, that available recourse
foreclosed her right to resort to a special civil action for certiorari, a
limited form of review and a remedy of last recourse, which lies
only where there is no appeal or plain, speedy and adequate
remedy in the ordinary course of law.12
A petition for review on certiorari under Rule 45 and a petition
for certiorari under Rule 65 are mutually exclusive
remedies. Certiorari cannot co-exist with an appeal or any other
adequate remedy.13 If a petition for review is available, even
prescribed, the nature of the questions of law intended to be raised
on appeal is of no consequence. It may well be that those
questions of law will treat exclusively of whether or not the
judgment or final order was rendered without or in excess of
jurisdiction, or with grave abuse of discretion. This is immaterial.
The remedy is appeal, not certiorari as a special civil action.14
Be that as it may, on more than one occasion, to serve the ultimate
purpose of all rules of procedures—attaining substantial justice as
expeditiously as possible15 —we have accepted procedurally
incorrect petitions and decided them on the merits. We do the
same here.
The Court of Appeals anchors its modified ruling on the ostensible
causal connection between Portillo’s money claims and Lietz Inc.’s
claim for liquidated damages, both claims apparently arising from
the same employment relations. Thus, did it say:
x x x This Court will have to take cognizance of and consider the
"Goodwill Clause" contained [in] the employment contract signed
by and between [respondents and Portillo]. There is no gainsaying
the fact that such "Goodwill Clause" is part and parcel of the
employment contract extended to [Portillo], and such clause is not
contrary to law, morals and public policy. There is thus a causal
connection between [Portillo’s] monetary claims against
[respondents] and the latter’s claim for liquidated damages against
the former. Consequently, we should allow legal compensation or
set-off to take place. [Respondents and Portillo] are both bound
principally and, at the same time, are creditors of each other.
[Portillo] is a creditor of [respondents] in the sum of ₱110,662.16 in
connection with her monetary claims against the latter. At the
same time, [respondents] are creditors of [Portillo] insofar as their
claims for liquidated damages in the sum of ₱980,295.2516 against
the latter is concerned.17
We are not convinced.
Paragraph 4 of Article 217 of the Labor Code appears to have
caused the reliance by the Court of Appeals on the "causal
connection between [Portillo’s] monetary claims against
[respondents] and the latter’s claim from liquidated damages
against the former."
Art. 217. Jurisdiction of Labor Arbiters and the Commission. –
(a) Except as otherwise provided under this code, the Arbiters shall
have original and exclusive jurisdiction to hear and decide, within
thirty (30) calendar days after the submission of the case by the
parties for decision without extension, even in the absence of
stenographic notes, the following case involving all workers,
whether agricultural or nonagricultural:
xxxx
4. Claims for actual, moral, exemplary and other forms of damages
arising from the employer-employee relations; (Underscoring
supplied)
Evidently, the Court of Appeals is convinced that the claim for
liquidated damages emanates from the "Goodwill Clause of the
employment contract and, therefore, is a claim for damages arising
from the employeremployee relations."
As early as Singapore Airlines Limited v. Paño,18 we established
that not all disputes between an employer and his employee(s) fall
within the jurisdiction of the labor tribunals. We differentiated
between abandonment per se and the manner and consequent
effects of such abandonment and ruled that the first, is a labor
case, while the second, is a civil law case.
Upon the facts and issues involved, jurisdiction over the present
controversy must be held to belong to the civil Courts. While
seemingly petitioner's claim for damages arises from employer-
employee relations, and the latest amendment to Article 217 of the
Labor Code under PD No. 1691 and BP Blg. 130 provides that all
other claims arising from employer-employee relationship are
cognizable by Labor Arbiters [citation omitted], in essence,
petitioner's claim for damages is grounded on the "wanton failure
and refusal" without just cause of private respondent Cruz to report
for duty despite repeated notices served upon him of the
disapproval of his application for leave of absence without pay.
This, coupled with the further averment that Cruz "maliciously and
with bad faith" violated the terms and conditions of the conversion
training course agreement to the damage of petitioner removes the
present controversy from the coverage of the Labor Code and
brings it within the purview of Civil Law.
Clearly, the complaint was anchored not on the abandonment per
se by private respondent Cruz of his job—as the latter was not
required in the Complaint to report back to work—but on
the manner and consequent effects of such abandonment of work
translated in terms of the damages which petitioner had to suffer.
Squarely in point is the ruling enunciated in the case of
Quisaba vs. Sta. Ines Melale Veneer & Plywood, Inc. [citation
omitted], the pertinent portion of which reads:
"Although the acts complained of seemingly appear to constitute
'matter involving employee-employer' relations as Quisaba's
dismissal was the severance of a pre-existing employee-employer
relations, his complaint is grounded not on his dismissal per se, as
in fact he does not ask for reinstatement or backwages, but on the
manner of his dismissal and the consequent effects of such
dismissal.
"Civil law consists of that 'mass of precepts that determine or
regulate the relations . . . that exist between members of a society
for the protection of private interest (1 Sanchez Roman 3).
"The 'right' of the respondents to dismiss Quisaba should not be
confused with the manner in which the right was exercised and the
effects flowing therefrom. If the dismissal was done anti-socially or
oppressively as the complaint alleges, then the respondents
violated Article 1701 of the Civil Code which prohibits acts of
oppression by either capital or labor against the other, and Article
21, which makes a person liable for damages if he wilfully causes
loss or injury to another in a manner that is contrary to morals,
good customs or public policy, the sanction for which, by way of
moral damages, is provided in article 2219, No. 10. [citation
omitted]"
Stated differently, petitioner seeks protection under the civil
laws and claims no benefits under the Labor Code. The
primary relief sought is for liquidated damages for breach of a
contractual obligation. The other items demanded are not
labor benefits demanded by workers generally taken
cognizance of in labor disputes, such as payment of wages,
overtime compensation or separation pay. The items claimed
are the natural consequences flowing from breach of an
obligation, intrinsically a civil dispute.19 (Emphasis supplied)
Subsequent rulings amplified the teaching in Singapore
Airlines. The reasonable causal connection rule was discussed.
Thus, in San Miguel Corporation v. National Labor Relations
Commission,20 we held:
While paragraph 3 above refers to "all money claims of workers," it
is not necessary to suppose that the entire universe of money
claims that might be asserted by workers against their employers
has been absorbed into the original and exclusive jurisdiction of
Labor Arbiters. In the first place, paragraph 3 should be read not in
isolation from but rather within the context formed by paragraph 1
(relating to unfair labor practices), paragraph 2 (relating to claims
concerning terms and conditions of employment), paragraph 4
(claims relating to household services, a particular species of
employer-employee relations), and paragraph 5 (relating to certain
activities prohibited to employees or to employers). It is evident
that there is a unifying element which runs through paragraph 1 to
5 and that is, that they all refer to cases or disputes arising out of
or in connection with an employer-employee relationship. This is,
in other words, a situation where the rule of noscitur a sociis may
be usefully invoked in clarifying the scope of paragraph 3, and any
other paragraph of Article 217 of the Labor Code, as amended. We
reach the above conclusion from an examination of the terms
themselves of Article 217, as last amended by B.P. Blg. 227, and
even though earlier versions of Article 217 of the Labor Code
expressly brought within the jurisdiction of the Labor Arbiters and
the NLRC "cases arising from employer-employee relations,
[citation omitted]" which clause was not expressly carried over, in
printer's ink, in Article 217 as it exists today. For it cannot be
presumed that money claims of workers which do not arise out of
or in connection with their employer-employee relationship, and
which would therefore fall within the general jurisdiction of regular
courts of justice, were intended by the legislative authority to be
taken away from the jurisdiction of the courts and lodged with
Labor Arbiters on an exclusive basis. The Court, therefore,
believes and so holds that the "money claims of workers"
referred to in paragraph 3 of Article 217 embraces money
claims which arise out of or in connection with the employer-
employee relationship, or some aspect or incident of such
relationship. Put a little differently, that money claims of
workers which now fall within the original and exclusive
jurisdiction of Labor Arbiters are those money claims which
have some reasonable causal connection with the employer-
employee relationship.21 (Emphasis supplied)
We thereafter ruled that the "reasonable causal connection with
the employer-employee relationship" is a requirement not only in
employees’ money claims against the employer but is, likewise, a
condition when the claimant is the employer.
In Dai-Chi Electronics Manufacturing Corporation v. Villarama,
Jr.,22 which reiterated the San Miguel ruling and allied
jurisprudence, we pronounced that a non-compete clause, as in
the "Goodwill Clause" referred to in the present case, with a
stipulation that a violation thereof makes the employee liable to his
former employer for liquidated damages, refers to post-
employment relations of the parties.
In Dai-Chi, the trial court dismissed the civil complaint filed by the
employer to recover damages from its employee for the latter’s
breach of his contractual obligation. We reversed the ruling of the
trial court as we found that the employer did not ask for any relief
under the Labor Code but sought to recover damages agreed upon
in the contract as redress for its employee’s breach of contractual
obligation to its "damage and prejudice." We iterated that Article
217, paragraph 4 does not automatically cover all disputes
between an employer and its employee(s). We noted that the
cause of action was within the realm of Civil Law, thus, jurisdiction
over the controversy belongs to the regular courts. At bottom, we
considered that the stipulation referred to post-employment
relations of the parties.
That the "Goodwill Clause" in this case is likewise a
postemployment issue should brook no argument. There is no
dispute as to the cessation of Portillo’s employment with Lietz
Inc.23 She simply claims her unpaid salaries and commissions,
which Lietz Inc. does not contest. At that juncture, Portillo was no
longer an employee of Lietz Inc.24The "Goodwill Clause" or the
"Non-Compete Clause" is a contractual undertaking effective after
the cessation of the employment relationship between the parties.
In accordance with jurisprudence, breach of the undertaking is a
civil law dispute, not a labor law case.
It is clear, therefore, that while Portillo’s claim for unpaid salaries is
a money claim that arises out of or in connection with an employer-
employee relationship, Lietz Inc.’s claim against Portillo for
violation of the goodwill clause is a money claim based on an act
done after the cessation of the employment relationship. And,
while the jurisdiction over Portillo’s claim is vested in the labor
arbiter, the jurisdiction over Lietz Inc.’s claim rests on the regular
courts. Thus:
As it is, petitioner does not ask for any relief under the Labor Code.
It merely seeks to recover damages based on the parties' contract
of employment as redress for respondent's breach thereof. Such
cause of action is within the realm of Civil Law, and jurisdiction
over the controversy belongs to the regular courts. More so must
this be in the present case, what with the reality that the stipulation
refers to the postemployment relations of the parties.
For sure, a plain and cursory reading of the complaint will readily
reveal that the subject matter is one of claim for damages arising
from a breach of contract, which is within the ambit of the regular
court's jurisdiction. [citation omitted]
It is basic that jurisdiction over the subject matter is determined
upon the allegations made in the complaint, irrespective of whether
or not the plaintiff is entitled to recover upon the claim asserted
therein, which is a matter resolved only after and as a result of a
trial. Neither can jurisdiction of a court be made to depend upon
the defenses made by a defendant in his answer or motion to
dismiss. If such were the rule, the question of jurisdiction would
depend almost entirely upon the defendant. 25 [citation omitted]
xxxx
Whereas this Court in a number of occasions had applied the
jurisdictional provisions of Article 217 to claims for damages filed
by employees [citation omitted], we hold that by the designating
clause "arising from the employer-employee relations" Article 217
should apply with equal force to the claim of an employer for actual
damages against its dismissed employee, where the basis for the
claim arises from or is necessarily connected with the fact of
termination, and should be entered as a counterclaim in the illegal
dismissal case.26
xxxx
This is, of course, to distinguish from cases of actions for
damages where the employer-employee relationship 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 [citation omitted], malicious prosecution [citation omitted], or
breach of contract, as when the claimant seeks to recover a
debt from a former employee [citation omitted] or seeks
liquidated damages in enforcement of a prior employment
contract. [citation omitted]
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 or other labor laws,
the dispute is intrinsically civil. Article 217(a) of the Labor Code, as
amended, clearly bestows upon the Labor Arbiter original and
exclusive jurisdiction over claims for damages arising from
employer-employee relations─in other words, the Labor Arbiter
has jurisdiction to award not only the reliefs provided by labor laws,
but also damages governed by the Civil Code.27 (Emphasis
supplied)
In the case at bar, the difference in the nature of the credits that
one has against the other, conversely, the nature of the debt one
owes another, which difference in turn results in the difference of
the forum where the different credits can be enforced, prevents the
application of compensation. Simply, the labor tribunal in an
employee’s claim for unpaid wages is without authority to allow the
compensation of such claims against the post employment claim of
the former employer for breach of a post employment condition.
The labor tribunal does not have jurisdiction over the civil case of
breach of contract.
We are aware that in Bañez v. Hon. Valdevilla, we mentioned that:
Whereas this Court in a number of occasions had applied the
jurisdictional provisions of Article 217 to claims for damages filed
by employees [citation omitted], we hold that by the designating
clause "arising from the employer-employee relations" Article 217
should apply with equal force to the claim of an employer for actual
damages against its dismissed employee, where the basis for the
claim arises from or is necessarily connected with the fact of
termination, and should be entered as a counterclaim in the illegal
dismissal case.28
While on the surface, Bañez supports the decision of the Court of
Appeals, the facts beneath premise an opposite conclusion. There,
the salesman-employee obtained from the NLRC a final favorable
judgment of illegal dismissal. Afterwards, the employer filed with
the trial court a complaint for damages for alleged nefarious
activities causing damage to the employer. Explaining further why
the claims for damages should be entered as a counterclaim in the
illegal dismissal case, we said:
claims provided for in Article 217, jurisdiction over the action is with
the regular courts. [citation omitted]
As it is, petitioner does not ask for any relief under the Labor Code.
It merely seeks to recover damages based on the parties’ contract
of employment as redress for respondent’s breach thereof. Such
cause of action is within the realm of Civil Law, and jurisdiction
over the controversy belongs to the regular courts. More so must
this be in the present case, what with the reality that the stipulation
refers to the postemployment relations of the parties.
For sure, a plain and cursory reading of the complaint will readily
reveal that the subject matter is one of claim for damages arising
from a breach of contract, which is within the ambit of the regular
court’s jurisdiction. [citation omitted]

Even under Republic Act No. 875 (the ‘Industrial Peace Act,’ now It is basic that jurisdiction over the subject matter is determined
completely superseded by the Labor Code), jurisprudence was upon the allegations made in the complaint, irrespective of whether
settled that where the plaintiff’s cause of action for damages arose or not the plaintiff is entitled to recover upon the claim asserted
out of, or was necessarily intertwined with, an alleged unfair labor therein, which is a matter resolved only after and as a result of a
practice committed by the union, the jurisdiction is exclusively with
trial. Neither can jurisdiction of a court be made to depend upon
the (now defunct) Court of Industrial Relations, and the assumption the defenses made by a defendant in his answer or motion to
of jurisdiction of regular courts over the same is a nullity. To allow
dismiss. If such were the rule, the question of jurisdiction would
otherwise would be "to sanction split jurisdiction, which is depend almost entirely upon the defendant. 32 (Underscoring
prejudicial to the orderly administration of justice." Thus, even after supplied).
the enactment of the Labor Code, where the damages separately
claimed by the employer were allegedly incurred as a
consequence of strike or picketing of the union, such complaint for The error of the appellate court in its Resolution of 14 October
damages is deeply rooted from the labor dispute between the 2010 is basic. The original decision, the right ruling, should not
parties, and should be dismissed by ordinary courts for lack of have been reconsidered.1âwphi1
jurisdiction. As held by this Court in National Federation of Labor
vs. Eisma, 127 SCRA 419: Indeed, the application of compensation in this case is effectively
barred by Article 113 of the Labor Code which prohibits wage
Certainly, the present Labor Code is even more committed to the deductions except in three circumstances:
view that on policy grounds, and equally so in the interest of
greater promptness in the disposition of labor matters, a court is ART. 113. Wage Deduction. – No employer, in his own behalf or in
spared the often onerous task of determining what essentially is a behalf of any person, shall make any deduction from wages of his
factual matter, namely, the damages that may be incurred by either employees, except:
labor or management as a result of disputes or controversies
arising from employer-employee relations.29
(a) In cases where the worker is insured with his consent by the
employer, and the deduction is to recompense the employer for the
Evidently, the ruling of the appellate court is modeled after the amount paid by him as premium on the insurance;
basis used in Bañez which is the "intertwined" facts of the claims of
the employer and the employee or that the "complaint for damages
is deeply rooted from the labor dispute between the parties." Thus, (b) For union dues, in cases where the right of the worker or his
did the appellate court say that: union to check-off has been recognized by the employer or
authorized in writing by the individual worker concerned; and
There is no gainsaying the fact that such "Goodwill Clause" is part
and parcel of the employment contract extended to [Portillo], and (c) In cases where the employer is authorized by law or regulations
such clause is not contrary to law, morals and public policy. There issued by the Secretary of Labor.
is thus a causal connection between [Portillo’s] monetary claims
against [respondents] and the latter’s claim for liquidated damages WHEREFORE, the petition is GRANTED. The Resolution of the
against the former. Consequently, we should allow legal Court of Appeals in CA-G.R. SP No. I 06581 dated 14 October 20 I
compensation or set-off to take place.30 0 is SET ASIDE. The Decision of the Court of Appeals in CA-G.R.
SP No. I 06581 dated 3 I March :2009 is REINSTATED. No costs.
The Court of Appeals was misguided. Its conclusion was incorrect.
SO ORDERED.
There is no causal connection between the petitioner employees’
claim for unpaid wages and the respondent employers’ claim for
damages for the alleged "Goodwill Clause" violation. Portillo’s
claim for unpaid salaries did not have anything to do with her
alleged violation of the employment contract as, in fact, her
separation from employment is not "rooted" in the alleged
contractual violation. She resigned from her employment. She was
not dismissed. Portillo’s entitlement to the unpaid salaries is not
even contested. Indeed, Lietz Inc.’s argument about legal
compensation necessarily admits that it owes the money claimed
by Portillo.

The alleged contractual violation did not arise during the existence
of the employer-employee relationship. It was a post-employment
matter, a post-employment violation. Reminders are apt. That is
provided by the fairly recent case of Yusen Air and Sea Services
Phils., Inc. v. Villamor,31 which harked back to the previous rulings
on the necessity of "reasonable causal connection" between the
tortious damage and the damage arising from the employer-
employee relationship. Yusen proceeded to pronounce that the
absence of the connection results in the absence of jurisdiction of
the labor arbiter. Importantly, such absence of jurisdiction cannot
be remedied by raising before the labor tribunal the tortious
damage as a defense. Thus:

When, as here, the cause of action is based on a quasi-delict or

tort, which has no reasonable causal connection with any of the
G.R. No. L-54334 January 22, 1986
KIOK LOY, doing business under the name and style
SWEDEN ICE CREAM PLANT, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION
(NLRC) and PAMBANSANG KILUSAN NG PAGGAWA
(KILUSAN), respondents.
Ablan and Associates for petitioner.
Abdulcadir T. Ibrahim for private respondent.
CUEVAS, J.:
Petition for certiorari to annul the decision 1 of the
National Labor Relations Commission (NLRC) dated July
20, 1979 which found petitioner Sweden Ice Cream
guilty of unfair labor practice for unjustified refusal to
bargain, in violation of par. (g) of Article 249 2 of the New
Labor Code, 3 and declared the draft proposal of the
Union for a collective bargaining agreement as the
governing collective bargaining agreement between the
employees and the management.
The pertinent background facts are as follows:
In a certification election held on October 3, 1978, the
Pambansang Kilusang Paggawa (Union for short), a
legitimate late labor federation, won and was
subsequently certified in a resolution dated November
29, 1978 by the Bureau of Labor Relations as the sole
and exclusive bargaining agent of the rank-and-file
employees of Sweden Ice Cream Plant (Company for
short). The Company's motion for reconsideration of the
said resolution was denied on January 25, 1978.
Thereafter, and more specifically on December 7, 1978,
the Union furnished 4 the Company with two copies of its
proposed collective bargaining agreement. At the same
time, it requested the Company for its counter proposals.
Eliciting no response to the aforesaid request, the Union
again wrote the Company reiterating its request for
collective bargaining negotiations and for the Company
to furnish them with its counter proposals. Both requests
were ignored and remained unacted upon by the
Company.
Left with no other alternative in its attempt to bring the
Company to the bargaining table, the Union, on
February 14, 1979, filed a "Notice of Strike", with the
Bureau of Labor Relations (BLR) on ground of
unresolved economic issues in collective bargaining. 5
Conciliation proceedings then followed during the thirty-
day statutory cooling-off period. But all attempts towards
an amicable settlement failed, prompting the Bureau of
Labor Relations to certify the case to the National Labor
Relations Commission (NLRC) for compulsory arbitration
pursuant to Presidential Decree No. 823, as amended.
The labor arbiter, Andres Fidelino, to whom the case
was assigned, set the initial hearing for April 29, 1979.
For failure however, of the parties to submit their
respective position papers as required, the said hearing
was cancelled and reset to another date. Meanwhile, the
Union submitted its position paper. The Company did
not, and instead requested for a resetting which was
granted. The Company was directed anew to submit its
financial statements for the years 1976, 1977, and 1978.
The case was further reset to May 11, 1979 due to the
withdrawal of the Company's counsel of record, Atty.
Rodolfo dela Cruz. On May 24, 1978, Atty. Fortunato
Panganiban formally entered his appearance as counsel
for the Company only to request for another
postponement allegedly for the purpose of acquainting
himself with the case. Meanwhile, the Company
submitted its position paper on May 28, 1979.
When the case was called for hearing on June 4, 1979
as scheduled, the Company's representative, Mr. Ching,
who was supposed to be examined, failed to appear.
Atty. Panganiban then requested for another
postponement which the labor arbiter denied. He also
ruled that the Company has waived its right to present
further evidence and, therefore, considered the case
submitted for resolution.
On July 18, 1979, labor arbiter Andres Fidelino
submitted its report to the National Labor Relations
Commission. On July 20, 1979, the National Labor
Relations Commission rendered its decision, the
dispositive portion of which reads as follows:
WHEREFORE, the respondent Sweden
Ice Cream is hereby declared guilty of
unjustified refusal to bargain, in violation
of Section (g) Article 248 (now Article
249), of P.D. 442, as amended. Further,
the draft proposal for a collective
bargaining agreement (Exh. "E ") hereto
attached and made an integral part of
this decision, sent by the Union (Private
respondent) to the respondent
(petitioner herein) and which is hereby
found to be reasonable under the
premises, is hereby declared to be the
collective agreement which should
govern the relationship between the
parties herein.
SO ORDERED. (Emphasis supplied)
Petitioner now comes before Us assailing the aforesaid
decision contending that the National Labor Relations
Commission acted without or in excess of its jurisdiction
or with grave abuse of discretion amounting to lack of
jurisdiction in rendering the challenged decision. On
August 4, 1980, this Court dismissed the petition for lack
of merit. Upon motion of the petitioner, however, the
Resolution of dismissal was reconsidered and the
petition was given due course in a Resolution dated April
1, 1981.
Petitioner Company now maintains that its right to
procedural due process has been violated when it was
precluded from presenting further evidence in support of
its stand and when its request for further postponement
was denied. Petitioner further contends that the National
Labor Relations Commission's finding of unfair labor
practice for refusal to bargain is not supported by law
and the evidence considering that it was only on May 24,
1979 when the Union furnished them with a copy of the
proposed Collective Bargaining Agreement and it was
only then that they came to know of the Union's
demands; and finally, that the Collective Bargaining
Agreement approved and adopted by the National Labor
Relations Commission is unreasonable and lacks legal
basis.
The petition lacks merit. Consequently, its dismissal is in
order.
Collective bargaining which is defined as negotiations
towards a collective agreement,6 is one of the
democratic frameworks under the New Labor Code,
designed to stabilize the relation between labor and
management and to create a climate of sound and
stable industrial peace. It is a mutual responsibility of the
employer and the Union and is characterized as a legal
obligation. So much so that Article 249, par. (g) of the
Labor Code makes it an unfair labor practice for an
employer to refuse "to meet and convene promptly and
expeditiously in good faith for the purpose of negotiating
an agreement with respect to wages, hours of work, and
all other terms and conditions of employment including
proposals for adjusting any grievance or question arising
under such an agreement and executing a contract
incorporating such agreement, if requested by either
party.
While it is a mutual obligation of the parties to bargain,
the employer, however, is not under any legal duty to
initiate contract negotiation.7 The mechanics of collective
bargaining is set in motion only when the following
jurisdictional preconditions are present, namely, (1)
possession of the status of majority representation of the
employees' representative in accordance with any of the
means of selection or designation provided for by the
Labor Code; (2) proof of majority representation; and (3)
a demand to bargain under Article 251, par. (a) of the
New Labor Code . ... all of which preconditions are
undisputedly present in the instant case.
From the over-all conduct of petitioner company in
relation to the task of negotiation, there can be no doubt
that the Union has a valid cause to complain against its
(Company's) attitude, the totality of which is indicative of
the latter's disregard of, and failure to live up to, what is
enjoined by the Labor Code — to bargain in good faith.
We are in total conformity with respondent NLRC's
pronouncement that petitioner Company is GUILTY of
unfair labor practice. It has been indubitably established
that (1) respondent Union was a duly certified bargaining
agent; (2) it made a definite request to bargain,
accompanied with a copy of the proposed Collective
Bargaining Agreement, to the Company not only once
but twice which were left unanswered and unacted upon;
and (3) the Company made no counter proposal
whatsoever all of which conclusively indicate lack of a
sincere desire to negotiate. 8 A Company's refusal to
make counter proposal if considered in relation to the
entire bargaining process, may indicate bad faith and
this is specially true where the Union's request for a
counter proposal is left unanswered. 9 Even during the
period of compulsory arbitration before the NLRC,
petitioner Company's approach and attitude-stalling the
negotiation by a series of postponements, non-
appearance at the hearing conducted, and undue delay
in submitting its financial statements, lead to no other
conclusion except that it is unwilling to negotiate and
reach an agreement with the Union. Petitioner has not at
any instance, evinced good faith or willingness to
discuss freely and fully the claims and demands set forth
by the Union much less justify its opposition thereto. 10
The case at bar is not a case of first impression, for in
the Herald Delivery Carriers Union (PAFLU) vs. Herald
Publications 11 the rule had been laid down that "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
proposal This doctrine was reiterated anew in Bradman
vs. Court of Industrial Relations 12 wherein it was further
ruled that "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
As a last-ditch attempt to effect a reversal of the decision
sought to be reviewed, petitioner capitalizes on the issue
of due process claiming, that it was denied the right to
be heard and present its side when the Labor Arbiter
denied the Company's motion for further postponement.
Petitioner's aforesaid submittal failed to impress Us.
Considering the various postponements granted in its
behalf, the claimed denial of due process appeared
totally bereft of any legal and factual support. As herein
earlier stated, petitioner had not even honored
respondent Union with any reply to the latter's
successive letters, all geared towards bringing the
Company to the bargaining table. It did not even bother
to furnish or serve the Union with its counter proposal
despite persistent requests made therefor. Certainly, the
moves and overall behavior of petitioner-company were
in total derogation of the policy enshrined in the New
Labor Code which is aimed towards expediting
settlement of economic disputes. Hence, this Court is not
prepared to affix its imprimatur to such an illegal scheme
and dubious maneuvers.
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.13 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.
WHEREFORE, the instant petition is DISMISSED. The
temporary restraining order issued on August 27, 1980,
is LIFTED and SET ASIDE.
No pronouncement as to costs.
SO ORDERED.

G.R. No. L-48347 October 3, 1978
SCOUT RAMON V. ALBANO MEMORIAL
COLLEGE, petitioner,
vs.
HON. CARMELO C. NORIEL, and FEDERATION OF FREE
WORKERS (Scout Ramon V. Albano Memorial College
Chapter), respondents.
Martiniano A. Valdisimo for petitioner.
Jaime D. Lauron for private respondent.
Solicitor General Estelito P. Mendoza Assistant Solicitor
General Reynato S. Puno and Solicitor Jesus V. Diaz for the
Public Respondent.
FERNANDO, Acting C.J.:
The grave abuse of discretion imputed to respondent Director
of Labor Relations Carmelo C. Noriel, when he ordered a
certification election at the instance of private respondent,
Federation of Free Workers, was his alleged failure to abide by
previous rulings of the Department of Labor. Assurring such to
be the case, the point raised is not decisive of this controversy,
As was made apparent in the Comment of Solicitor General
Estelito P. Mendoza, 1 the challenged order conforms to the
decisions of this Court. Where the law is concerned, it is this
Tribunal that speaks authoritatively.- Petitioner has failed to
make out a case. We dismiss.
The controversy began with the filing of a petition for
certification election on September 22, 1977 by the Scout
Ramon V. Albano Memorial College Chapter of private
respondent labor union. It alleged that the written consent of 67
employees out of an alleged total working force of 200, more or
less, had been secured. There was, on October 21, 1977, a
motion to dismiss the petition filed by the employer, the present
petitioner. It was based on the lack of the 30% consent
requirement as there were 250 employees, the required thirty
percent of the said work force being 75. With the figure of the
actual number of employees in the school establishment thus
supplied, private respondent submitted on October 26, 1977
the additional signatures of 22 employees in support of its plea
for a certification election. There was an opposition on the part
of the present petitioner. It was filed on November 2, 1977.
Then came, fifteen days later, an order from the Med-Arbiter
assigned to the case dismissing the petition for certification on
the ground that the compliance with the 30% requirement must
be shown as of the time of its filing. Private respondent
appealed to the Bureau of Labor Relations such order of the
Med-Arbiter dismissing its petition. Respondent Noriel on
February 8, 1978 sustained the appeal, ordering a certification
election at the Scout Ramon V. Albano Memorial College
within twenty (20) days from receipt thereof, with the following
as contending unions: 1. FFW (Scout Ramon V. Albano
Memorial College Chapter): 2. No Union, Petitioner moved for
its reconsideration, but it did not succeed. An appeal to the
Secretary of Labor was likewise of no avail Hence this petition.
As set forth at the outset, there, is no merit to this petition.
1. The present Labor Code did not take effect until November
1,1974. 2 The day before, on October 31, 1974 this Court,
speaking through Justice E. Fernandez now retired, in
Confederation of Citizens Labor union vs. National Labor
Relations Commission, 3 held fast to the existing doctrine
emphasizing the significance of a certification election in a
regime of collective bargaining. Then in the first decision after
its effectivity, United Employees Union of Gelmart Industries v.
Noriel, 4 It was pointed out: The constitute ion of collective
bargaining is. to recall Cox a prime manifestation of industrial
democracy at, work. The two parties to the relationship, tabor
and management, make their own rules b 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 a labor organization
of their choice. Thus may be discerned how crucial is a
certification election. So our decisions from the earliest case
of PLDT Employees Union v. PLDT Co. Free Telephone
Workers Union to the latest, Philippine Communications,
Electronics & Electricity Workers' Federation PCWF v. Court of
Industrial Relations, had made clear." 5 The same principle was
again given expression in language equally emphatic in the
subsequent case of Philippine Association of Free Labor
Unions v. Bureau of Labor Relations: 6 "Petitioner thus appears
to be woefully lacking in awareness of the significance of a
certification election for the collective bargaining process. It is
the fairest and most effective way of determining which labor
organization can truly represent the working force. It is a
fundamental postulate that the will of the majority 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. 7 That is to accord respect to
the policy of the Labor Code, indisputably partial to the holding
of a certification election so as to arrive in a manner definitive
and certain concerning the choice of the labor organization to
represent the workers in a collective bargaining unit. 8
2. Conformably to the above basic concept, this Court, in the
aforesaid Philippine Association of Free Labor Unions decision,
recognized that the Bureau of Labor Relations, in the exercise
of sound discretion, may order a certification election
notwithstanding the failure to meet the 30% requirement. Once
that requisite is complied with, however, the Code makes, clear
that "it shall be mandatory for the Bureau to conduct a
Identification election for the purpose of determining the
representative 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." 9 Necessarily then, the argument of petitioner as to the
inability of private respondent to come up with the required
signatures when the petition was first filed falls to the ground.
At any rate, additional signatures were subsequently secured.
The allegation that there was thereafter a retraction on the part
of a number of such signatories lends added support to the
decision arrived at by respondent Noriel that the only way of
determining with accuracy the true will of the personnel
involved in the bargaining unit is to conduct a certification
petition At any rate. that s a factual matter, the resolution of
which by respondent Noriel is entitled to respect by this
Tribunal. 10
3. There is relevance likewise to this excerpt from Monark
International, Inc. v. Noriel, cited in the Comment of Solicitor
General Mendoza: "There is another infirmity from which the
petition suffers. It was filed by the employer, the adversary in
the collective bargaining process. Precisely, the institution of
collective bargaining is designed to assure that the other party,
labor, is free to choose its representative. To resolve any doubt
on the matter, a certification election, to repeat, is the most
appropriate means of ascertaining its will. It is true that there
may be circumstances where the interest of the employer calls
for its being heard on the matter. An obvious instance is where
it invokes the obstacle interposed by the contract-bar rule. This
case certainly does not fall within the exception. Sound policy
dictates that as much as possible, management is to maintain
a strictly hands-off policy. For if it does not, it may lend itself to
the legitimate suspicion that it is partial to one of the
contending unions. That is repugnant to the concept of
collective bargaining. That is against the letter and spirit of
welfare legislation intended to protect labor and to promote
social justice. The judiciary then should be the last to look with
tolerance at such efforts of an employer to take part in the
process leading to the free and untrammeled choice of the
exclusive bargaining representative of the workers." 11
WHEREFORE, the petition for certiorari is dismissed, with
Costs. This decision is immediately executory. The restraining
order is hereby lifted. A certification election must be
conducted forthwith.