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52824, March 16, 1988 ]
REYNALDO BAUTISTA, PETITIONER, VS. HON. AMADO C. INCIONG, IN HIS CAPACITY AS DEPUTY MINISTER OF LABOR AND ASSOCIATED LABOR UNIONS (ALU), RESPONDENTS.
This is an illegal dismissal case. The respondent Deputy Minister dismissed the complaint of herein petitioner principally on the ground that no employer-employee relationship existed between the petitioner and respondent Associated Labor Unions (ALU). The facts as found by the National Capital Region Director of the then Ministry of Labor (MOL), Region IV are as follows: "Complainant (petitioner) was employed by ALU as 'Organizer' in 1972 with a starting salary of P250.00 a month. As such, he paid his monthly SSS contributions, with the respondent as his employer. On March 15, 1979, He was left in the office of ALU while his other-co-organizers were in Cainta, Rizal attending a certification election at Chrysler Philippines, as he was not the organizer assigned in said company. On March 16, 1979, he went on sick leave for ten (10) days. His SSS sickness benefit application form signed by ALU's physician was given to ALU for submission to the SSS. On March 16, 1979, complainant reported back for work upon expiration of his leave but was informed by ALU's Area Vice-President for Luzon of his termination effective March 15, 1979. Hence, this complaint filed on March 28, 1979. On April 18, 1979, however, ALU filed a clearance application to terminate complainant's services effective March 16, 1979 on the ground of abandonment of work." (p. 48, Rollo) Based on these findings, the Director ruled in favor of the petitioner and ordered the respondent Union to reinstate the petitioner to his former position with full backwages and to pay him emergency allowance, 13th month pay and to refund his Mutual Aid Fund Deposit in the amount of P370.00. Respondent ALU appealed to the Ministry of Labor. On October 23, 1979, the respondent Deputy Minister set aside the order of the Director and dismissed the petitioner's complaint for lack of merit. In his order, the Deputy Minister found that the petitioner was merely accommodated by the respondent union after he was dismissed by his former employer sometime in 1972 and that his membership coverage with the SSS which shows that respondent ALU is the one paying the employer's share in the premiums is not conclusive proof that respondent is the petitioner's employer because such payments were performed by the respondent as a favor for all those who were performing full time union activities with it to entitle them to SSS benefits. The Deputy Minister further ruled that the non-existence of an employer-employee relationship between the parties is bolstered by the fact that respondent ALU is not an entity for profit but a duly registered labor union whose sole purpose is the representation of its bona fide organization units where it is certified as such. In this petition, the petitioner contends that the respondent Deputy Minister committed grave abuse of discretion in holding that there was no employer-employee relationship between him and the respondent union so much so that he is not entitled to the benefits that he is praying for. We agree with the petitioner. There is nothing in the records which support the Deputy Minister's conclusion that the petitioner is not an employee of respondent ALU. The mere fact that the respondent is a labor union does not mean that it cannot be considered an employer of the persons who work for it. Much less should it be exempted from the very labor laws which it espouses as a labor organization. In the case of Brotherhood Labor Unity Movement in the Philippines v. Zamora, (147 SCRA 49, 54), we outlined the factors in ascertaining an employer-employee relationship:
"In determining the existence of an employer-employee relationship, the elements that are generally considered are the following: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer's power to control the employee with respect to the means and methods by which the work is to be accomplished. It is the so-called 'control test' that is the most important element (Investment Planning Corp. of the Phils. v. The Social Security System, 21 SCRA 924; Mafinco Trading Corp. v. Ople, supra, and Rosario Brothers, Inc. v. Ople, 131 SCRA 72)." "In the case at bar, the Regional Director correctly found that the petitioner was an employee of the respondent union as reflected in the latter's individual payroll sheets and shown by the petitioner's membership with the Social Security System (SSS) and the respondent union's share of remittances in the petitioner's favor. Even more significant, is the respondent union's act of filing a clearance application with the MOL to terminate the petitioner's services. Bautista was selected and hired by the Union. He was paid wages by the Union. ALU had the power to dismiss him as indeed it dismissed him. And definitely, the Union tightly controlled the work of Bautista as one of its organizers. There is absolutely no factual or legal basis for Deputy Minister Inciong's decision. We are, thus, constrained to reverse the findings of the respondent Deputy Minister. However, the records show that antipathy and antagonism between the petitioner and the respondent union militate against the former's reinstatement. ALU would not want to have a union organizer whom it does not trust and who could sabotage its efforts to unionize commercial and industrial establishments. Severance pay, therefore, is more proper and in order. As we have ruled in the case of Asiaworld Publishing House, Inc. v. Hon. Blas Ople, et al., (G.R. No. 56398, July 23, 1987) quoting the case of Balaquezon EWTU v. Zamora, (97 SCRA 5, 8): "'It should be underscored that the backwages are being awarded on the basis of equity or in the nature of severance pay. This means that a monetary award is to be paid to the striking employees as an alternative to reinstatement which can no longer be effected in view of the long passage of time or because of the realities of the situation. (Underscoring supplied) WHEREFORE, the petition is hereby GRANTED and the decision of the respondent Deputy Minister is ANNULLED and SET ASIDE. The Order of Regional Director Francisco L. Estrella is REINSTATED and ordered executed but instead of returning the petitioner to his former position, the private respondent is ordered to pay him an amount equal to his backwages for only three years and the separation pay to which he may be entitled as of the end of the three year period under the applicable law or collective bargaining agreement.
[ G.R. No. 87211, March 05, 1991 ]
JOVENCIO L. MAYOR, PETITIONER, VS. HON. CATALINO MACARAIG, HON. GUILLERMO CARAGUE, HON. RIZALINA CAJUCOM, HON. FRANKLIN DRILON, RESPONDENTS, LOURDES A. SALES AND RICARDO OLAIREZ, PETITIONERSINTERVENORS.
Five (5) special civil actions are hereby jointly decided because they involve one common, fundamental issue, the constitutionality of Republic Act No. 6715, effective March 21, 1989, in so far as it declares vacant ―all positions of the Commissioners, Executive Labor Arbiters and Labor Arbiters of the National Labor Relations Commission,‖ and operates to remove the incumbents upon the appointment and qualification of their successors. The law is entitled, ―AN ACT TO EXTEND PROTECTION TO LABOR, STRENGTHEN THE CONSTITUTIONAL RIGHTS OF WORKERS TO SELF-ORGANIZATION, COLLECTIVE BARGAINING AND PEACEFUL CONCERTED ACTIVITIES, FOSTER INDUSTRIAL PEACE AND HARMONY, PROMOTE THE PREFERENTIAL USE OF VOLUNTARY MODES OF SETTLING LABOR DISPUTES AND REORGANIZE THE NATIONAL LABOR RELATIONS COMMISSION, AMENDING PRESIDENTIAL DECREE NO. 441, AS AMENDED, OTHERWISE KNOWN AS THE LABOR CODE OF THE PHILIPPINES, APPROPRIATING FUNDS THEREFOR AND FOR OTHER PURPOSES.‖ The provision directly dealing with the reorganization of the National Labor Relations Commission is Section 35. It reads as follows: ―SEC. 35. Equity of the Incumbent. Incumbent career officials and rank-and-file employees of the National Labor Relations Commission not otherwise affected by the Act shall continue to hold office without need of reappointment. However, consistent with the need to professionalize the higher levels of officialdom invested with adjudicatory powers and functions, and to upgrade their qualifications, ranks, and salaries or emoluments, all positions of the Commissioners, Executive Labor Arbiters and Labor Arbiters of the present National Labor Relations Commission are hereby declared vacant. However, subject officials shall continue to temporarily discharge their duties and functions until their successors shall have been duly appointed and qualified.‖ The first of these five consolidated cases was filed by Labor Arbiter Jovencio Ll. Mayor on March 8, 1989. In the year that followed, eight other officers of the Commission, as initiators of their own separate actions or as intervenors, joined Mayor in the attempt to invalidate the reorganization and to be reinstated to their positions in the Government service. G.R. No. 87211: Jovencio Mayor; and Intervenors Lourdes A. Sales and Ricardo Olairez Jovencio Ll. Mayor, a member of the Philippine Bar for fifteen (15) years, was appointed Labor Arbiter in 1986 after he had, according to him, met the prescribed qualifications and passed ―a rigid screening process.‖ Fearing that he would be removed from office on account of the expected reorganization, he filed in this Court the action now docketed as G.R. No. 87211. His fears proved groundless, however. He was in fact reappointed a Labor Arbiter on March 8, 1990. Hence, as he himself says, the case became moot as to him. Like Mayor, both intervenors Lourdes A. Sales and Ricardo N. Olairez were appointed Labor Arbiters in 1986, but unlike Mayor, were not among the one hundred fifty-one (151) Labor Arbiters reappointed by the President on March 8, 1990. G.R. No. 90044: Pascual Y. Reyes; and Intervenor Eugenio I. Sagmit, Jr. At the time of the effectivity of R.A. No. 6715, Pascual Y. Reyes was holding the office of Executive Director of the National Labor Relations Commission in virtue of an appointment extended to him on May 30, 1975. As specified by Administrative Order No. 10 of the Secretary of Labor, dated July 14, 1975, the functions of his
in relation to Section 5 of said Act. 1988). benefits and emoluments accruing to them for the unexpired portions of their six-year terms and allowed to enjoy retirement benefits under applicable laws (pursuant to R.R.R.” and Article 213 of the Labor Code.‖ in 1991. he instituted the action at bar. No. 78951. 1986 shall hold office for a term of six (6) years ** (but of those thus appointed) three shall hold office for four (4) years. Eugenio I. . 1989 to the effect that the offices of Executive Director and Deputy Executive Director had been abolished by Section 35. 90044. on December 18.R.office were “to take charge of all administrative matters of the Commission and to have direct supervision over all units and personnel assigned to perform administrative tasks. 1986. but since Congress adjourned on December 22. Article 215 of the Labor Code by providing that ―the Commissioners appointed under Executive Order No. 1989 without approving their appointments. Lucas was however offered the position of Assistant Regional Director by Secretary Drilon and then by Acting Secretary Dionisio de la Serna (by letter dated January 9. Encarnacion. or more precisely on November 19. as amended. G. amended.A. G. Lucas. that they be paid all salaries. but when no action was allegedly taken thereon. 1987. R. 1989‖). Their new appointments were submitted to Congress. they had not been served with notice of the termination of their services as incumbent commissioners. the President extended to Encarnacion. Sagmit was afterwards granted leave to intervene in the action. 1986. Jr. issued by the President on July 25. G. declared that the ―Executive Director. were appointed National Labor Relations Commissioners on October 20. Encarnacion and Daniel M. 91547: Ceferino Dulay. Jr. 252. shall exercise the administrative functions of the Commission. No other appointments were thereafter extended to Encarnacion and Dulay. and three for two (2) years ** without prejudice to reappointment. alternatively. No. On November 18. 252. The petitioner-in-intervention. Lucas was designated Presiding Commissioner of the Commission‘s Second Division. appointed as such on October 27.‖ Reyes moved for reconsideration on August 29. Both Reyes and Sagmit were informed that they had been separated from employment upon the effectivity of R. 1992. 1987 after twenty-five (25) years of government service. Lucas declined the offer.” Reyes states that he has been ―a public servant for 42 years. 6715 being then already in effect. Dulay was appointed Presiding Commissioner of the Third Division. and no vacancy existed in their positions. pursuant to a Memorandum-Order issued by then Secretary of Labor Franklin Drilon on August 17. Rosario G. Later. and ―their functions transferred to the Chairman. after the Commission was reorganized pursuant to Executive Order No. aided by the Executive Clerk. assisted by a Deputy Executive Director. the terms of Encarnacion and Lucas would expire on October 23. according to them.‖ and ―is about to retire at sixty-five (65). They all pray that their removal be pronounced unconstitutional and void and they be declared Commissioners lawfully in office.A. No. and Daniel M..A. June 28. 1989. No. Lucas Petitioners Rosario G. 1990 which referred to his appointment as such Assistant Regional Director supposedly ―issued by the President on November 8. 6715. No. was Reyes‘ Deputy Executive Director. 1992. 1989. Executive Order No. 910 and the Resolution re Judge Mario Ortiz. and that of Dulay. Sagmit. and Commissioner Ceferino E. Lucas and Dulay new appointments as Commissioners of the NLRC despite the fact that. 47 of President Aquino. said appointments became functus officio. or.‖ Under Executive Order No. 47 dated September 10. believing it imported a demotion.
E. ranks. Commissioners. No.‖ the Constitution declares. namely: (1) Hon. ―shall be removed or suspended except for cause provided by law. They may all be reduced to one basic question. G.‖ He complains that he was effectively removed from his position as a result of the designation of the full complement of Commissioners in and to all Five Divisions of the NLRC by Administrative Order No. Putong. Ireneo B.R. all holders of said positions at the time of the effectivity of said Republic Act No.‖ As everyone knows. Rogelio I. The Basic Issue A number of issues have been raised and ventilated by the petitioners in their separate pleadings. The old positions were declared vacant because. G. quondam Dean of the College of Law of the University of the Philippines. administrative officer. 6715 DECLARING VACANT “all positions of the Commissioners. Third Division [Luzon except NCR]). 1986. Edna Bonto Perez (as Presiding Commissioner. Javier (Presiding Commissioner. or labor arbiter -. Appointed Chairman was Hon. (4) Ernesto G. Jr. Deputy Executive Clerk. ―No officer or employee in the civil service. 1975 and ―was retained in such position despite the reorganization under the Freedom Constitution of 1986 ** (and) later promoted to and appointed by the President as Commissioner of the ** (NLRC) First Division on October 23. 91730: Conrado Maglaya Petitioner Conrado Maglaya alleges that he has been ―a member of the Philippine Bar for thirty-six (36) years of which 31 years ** (had been) devoted to public service. Veloso III. and his attempt to obtain a reconsideration of his exclusion therefrom and bring about his reinstatement as Labor Arbiter was unavailing.R. Rustico L. Abella (Associate Commissioner. 1986.A. issued by Labor Secretary Drilon. and Labor Arbiters of the reorganized National Labor Relations Commission. Fifth Division). 1990. thereafter caused the appointment of other persons to the new positions specified in said statute: of Chairman. the last 24 years in the field of labor relations law.commissioner. Buat (Presiding Commissioner. Executive Labor Arbiters and Labor Arbiters of the present National Labor Relations Commission. Other members appointed to the reorganized Commission were Vicente S. Ladrido III (Presiding Commissioner. and to upgrade their qualifications. (5) Musib M. relating to the constitutionality of the provisions of Republic Act No. The right is secured to all employees in private as well as in public employment.falls within . serving for sixteen years in the Department of Health.” according to which the public respondents 1) considered as effectively separated from the service inter alia. of ―the need to professionalize the higher levels of officialdom invested with adjudicatory powers and functions. and salaries or emoluments. He was not included in the list of newly appointed Labor Arbiters released on March 8. and (6) Oscar N. Bernabe S. and Leon G. as the statute states. Fifth Division [Mindanao]). Rayala. Fourth Division [Visayas]). 1989. 6715. six (6) were reappointed. 6715. Diokno. Bartolome Carale. joined the Government service in 1974.Of the incumbent Commissioners as of the effectivity of R. Gambito Rolando Gambito passed the bar examinations in 1971. Gonzaga. including the positions of Executive Director and Deputy Executive Director of the Commission. Ceniza. Romeo B. and 2) consequently. Second Division). (2) Domingo H. Executive Clerk.‖ that he was appointed Labor Arbiter on May 30.‖ There can scarcely be any doubt that each of the petitioners -. No. and as Labor Arbiter in the Department of Labor and Employment from October. 94518: Rolando D. Zapanta (Associate Commissioner. security of tenure is a protected right under the Constitution. Second Division [NCR]). (3) Lourdes C. Batuhan. Irenea E. Bernardo. 161 dated November 18.
in an implied abolition thereof. fails to disclose such essential inconsistencies.‖ RA 6715 would appear to have made the Commission somewhat more autonomous. if at all. an infringement of the constitutional guarantee of security of tenure. including government-owned or controlled corporations with original charters. on its face. and agencies of the Government. or clear and explicit constitutional mandate for such termination of employment. and will have to be struck down on that account. Such an act would constitute. a recognized cause for removal or termination of employment of a Government officer or employee is the abolition by law of his office as a result of reorganization carried out by reason of economy or to remove redundancy of functions. subdivisions. it can not be conceded the power to simply pronounce those offices vacant and thereby effectively remove the occupants or holders thereof from the civil service. While it is undoubtedly a prerogative of the legislature to abolish certain offices. and the Labor Arbiters had the right to retain their positions until the age of compulsory retirement.‖ The Commissioners thus had the right to remain in office until the expiration of the terms for which they had been appointed. ―There shall be a National Labor Relations commission which shall be attached to the Department of Labor and employment for program coordination only **. under the circumstances. Now. with a view to discovering the changes thereby effected on the nature. 1. ranks.. So. unless sooner removed ―for cause provided by law. Generally 1. Amendments as Regards the NLRC and the Commissioners First. that resulting from an irreconcilable inconsistency between the nature. too. Abolition of an office is obviously not the same as the declaration that that office is vacant. powers. The inquiry therefore should be whether or not RA 6715 has worked such an abolition of the petitioners‘ offices. as regards the National Labor Relations Commissioners. the Executive Director. duties and functions of the petitioners‘ offices under the old rules and those corresponding thereto under the new law.the concept of an ―officer or employee in the civil service‖ since the civil service ―embraces all branches. Tripartite representation was to a certain extent restored in the Commission. An examination of the relevant provisions of RA 6715.‖ The Constitution does not.‖ 2. expressly or impliedly.‖ None of them could be deemed to be serving at the pleasure of the President. and the Labor Arbiters under the prior legislation. It is immediately apparent that there is no express abolition in RA 6715 of the petitioners‘ positions. and salaries or emoluments. This is the only mode by which. It can not be justified by the professed ―need to professionalize the higher levels of officialdom invested with adjudicatory powers and functions. A. Prior to its amendment by RA 6715. as . the Executive Director and Deputy Executive Director. ordain the abolition of the petitioners‘ positions or their removal from their offices.e. unless sooner removed ―for cause provided by law.‖ So. composition. instrumentalities. Article 213 of the Labor Code envisaged the NLRC as being an integral part of the Department of Labor and Employment. Nature and Composition of the Commission. ―be a National Labor Relations Commission in the Department of Labor and Employment **. and to upgrade their qualifications. The same Section 213. of course.‖ it said. Article 213 now declares that. and there is no claim that the petitioners‘ separation from the service is due to a cause other than RA 6715. ―There shall. duties and functions of the Commission and the Commissioners. the Deputy Executive Director. the petitioners‘ removal from their positions may be defended and sustained. i. justification must be sought.
the law now. The Chairman and the four (4) remaining members shall come from the public sector. as follows: ―Five (5) members each shall be chosen from among the nominees of the workers and employers organizations.” D.appointed for a term of six (6) years -. and the territory over which the divisions could exercise exclusive appellate jurisdiction. Under the law now. on the other. Both under the old and the amended law. as amended by RA 6715. as well as adjudicatory and other powers. then exercised both administrative and adjudicatory powers -.‖ and the Fourth and Fifth Divisions have their main offices in Cebu and Cagayan de Oro City. and (b) have at least five years‘ experience in handling labormanagement relations. and Appellate Jurisdiction over Fixed Territory Other changes related to the official station of the Commission and its divisions. the Commission was vested with rule-making and administrative authority. ―the members nominated by the workers and employers organizations shall divest themselves of any affiliation with or interest in the federation or association to which they belong. and exercise jurisdiction over cases ―from the Visayas and Mindanao. 1. respectively. now provides that the Chairman and fourteen (14) members composing the NLRC shall be chosen from the workers‘. Prescribed by the old law as qualifications for commissioners -. Allocation of Powers Between NLRC En Banc and its Divisions Another amendment was made in respect of the allocation of powers and functions between the Commission en banc.‖ B. But whereas under the old law.‖ However.‖ the Third Division has its main office also in Metropolitan Manila but would have appellate jurisdiction over ―cases from other parts of Luzon. and its divisions. functions and duties. Official Stations. once they assume office.‖ C. and could sit en banc or in divisions of three (3) members each.said Commission. employers‘ and the public sectors. (b) engagement in the practice of law for at . functions and duties through its divisions. and the appellate authority of the divisions is exclusive “within their respective territorial jurisdiction. in other words.‖ respectively. Under the old law.amended. requires (a) membership in the bar. 2. and appeals could be taken to them from decisions of Labor Arbiters regardless of the regional office whence the case originated. on the other hand. the cases to be decided en banc and those by a division were determined by rules laid down by the Commission with the approval of the ex officio Chairman (the Secretary of Labor) -.‖ but 2) it ―shall exercise its adjudicatory and all other powers. the First and Second Divisions have their official station in Metropolitan Manila and ―handle cases coming from the National Capital Region.were that they (a) be members of the Philippine bar. on the one hand. provides that 1) the Commission ―shall sit en banc only for purposes of promulgating rules and regulations governing the hearing and disposition of cases before any of its divisions and regional branches and formulating policies affecting its administration and operations. the Commission en banc and its divisions had their main office in Metropolitan Manila. Qualifications and Tenure of Commissioners Revisions were also made by RA 6715 with respect to the qualifications and tenure of the National Labor Relations Commissioners. with the latter to be chosen from among the recommendees of the Secretary of Labor and Employment. RA 6715.
(2) Those that workers may file involving wages. and are subject to the Civil Service Law.‖ On the other hand. but simply provides that there shall be as many labor arbiters as may be necessary for the effective and efficient operation of the Commission. whether agricultural or non-agricultural: (1) Unfair labor practice cases. except claims for employees‘ compensation. (3) All money claims of workers. (3) If accompanied with a claim for reinstatement. including those based on non-payment or underpayment of wages. (4) Cases involving household services. 2. ―incumbent Executive Labor Arbiters and Labor Arbiters who have been engaged in the practice of law for at least five (5) years may be considered as already qualified. and (5) Cases arising from any violation of Article 265 of this Code. They were appointed by the President upon recommendation of the Chairman. with at least two (2) years experience in the field of labor management relations.least 15 years. Qualifications The old law provided for one hundred fifty (150) labor arbiters assigned to the different regional offices or branches of the Department of Labor and Employment (including sub-regional branches or provincial extension units). The exclusive. including questions involving the legality of strikes and lockouts. hours of work and other terms and conditions of employment. hours of work and other terms and conditions of employment. The old law declared that Executive Labor Arbiters and Labor Arbiters should be members of the Bar. unless they are sooner removed for cause as provided by law or become incapacitated to discharge the duties of their office. rules and regulations.‖ They are appointed by the President. separation pay and other benefits provided by law or appropriate agreement.‖ however. residence in the region where the commissioner is to hold office. RA 6715 does not specify any fixed number of labor arbiters. Amendments Regarding Executive Labor Arbiters and Labor Arbiters A. Exclusive Original Jurisdiction Before the effectivity of RA 6715. overtime compensation. The commissioners appointed shall hold office during good behavior until they reach the age of sixty-five (65) years.‖ For ―purposes of reappointment. on recommendation of the Secretary of Labor and Employment. (c) at least five years‘ experience or exposure in the field of labor-management relations. whether agricultural or non-agricultural: (1) Unfair labor practice cases. indicated by italics in the enumeration which shortly follows. each regional branch being headed by an Executive Labor Arbiter. rules and regulations. RA 6715 requires that the ―Executive Labor Arbiters and Labor Arbiters shall likewise be members of the Philippine Bar. rates of pay. . (2) Termination disputes. and (d) preferably.‖ but in addition ―must have been in the practice of law in the Philippines for at least seven (7) years. B. social security. Some changes were introduced by RA 6715. with at least three (3) years experience or exposure in the field of labor-management relations. and were ―subject to the Civil Service Law. the exclusive original jurisdiction of labor arbiters comprehended the following cases involving all workers. those cases that workers may file involving wages. original jurisdiction of Labor Arbiters now embraces the following cases involving all workers. medicare and maternity benefits.
or change its essential character as a supervisory and adjudicatory body. moral. should operate only prospectively. requiring that its membership be drawn from tripartite sectors (workers. employees and the public sector). Amendments as Regards the Executive Director and Deputy Executive Director Prior to RA 6715. the ex officio Chairman of the National Labor Relations Commission (the Secretary of Labor). including questions involving the legality of strikes and lockouts. there was. involving an amount exceeding five thousand pesos (P5. not to . The office of Executive Director is nowhere mentioned in RA 6715. Under said Act. Furthermore. third.‖ The Executive Clerk appears to be the officer who used to be known under the old law as the Executive Director. without extension. whether it performs administrative or rule-making functions or exercises appellate jurisdiction to review decisions and final orders of the Labor Arbiters. without extension. RA 6715 provides that ―Cases arising from the interpretation or implementation of collective bargaining agreements and those arising from the interpretation or enforcement of company personnel policies shall be disposed of by the Labor Arbiter by referring the same to the grievance machinery and voluntary arbitration as may be provided in said agreements. changing the official stations of the Commission‘s divisions. as under the former law. who ―shall have the administrative supervision over the Commission and its regional branches and all its personnel.(4) Claims for actual. an Executive Director. in the performance of their functions. There has been created the office of Chairman. the Executive Director and the Deputy Executive Director were obviously themselves subject to the supervision and control of the head of office.‖ In this function. including those of persons in domestic or household service. medicare and maternity benefits. he shall be ―aided by the Executive Clerk of the Commission. or the Commission itself. all other claims arising from employer-employee relations. exemplary and other forms of damages arising from the employer-employee relations. Said Executive Clerk is given the additional responsibility of assisting the Commission en banc and the First Division. whether or not accompanied with a claim for reinstatement. the Labor Arbiters are given thirty (30) calendar days after the submission of the case by the parties to decide the case. and even those prescribing higher or other qualifications for the positions of Commissioner which.‖ Summing up 1. 6715 did not abolish the NLRC.‖ 3. The provisions conferring a somewhat greater measure of autonomy.00). who was charged with the ―exercise (of) the administrative functions of the Commission.” Although not so stated in the law. the law says. except that the present statute stresses that ―even in the absence of stenographic notes. in performing ―such similar or equivalent functions and duties as are discharged by the Clerk of Court ** of the Court of Appeals. including the Executive Labor Arbiters and Labor Arbiters. Now. Republic Act No. as earlier stated. fourth and fifth) ―in the performance of such similar or equivalent functions and duties as are discharged by the ** Deputy Clerk(s) of the Court of Appeals. as before. social security. the NLRC continues to act collegially. if at all. assisted by a Deputy Executive Director.‖ The positions of Deputy Executive Clerks have also been created whose main role is to assist the other divisions of the Commission (the second.000. (6) Except claims for employees compensation.‖ the period to decide is still thirty days. his chief functions were “to take charge of all administrative matters of the Commission and to have direct supervision over all units and personnel assigned to perform administrative tasks. Under RA 6715.‖ More particularly. the Secretary of Labor is no longer ex officio Chairman of the Commission. (5) Cases arising from any violation of Article 264 of this Code.
but new appellations or designations given to the existing positions of Executive Director and Deputy Executive Director. WHEREFORE. also no showing that the petitioning Arbiters do not qualify under the new law. 161 SCRA 812. Reyes and petitioner-in-intervention Eugenio L. it not appearing that any of them is unfit or has given cause for removal. are ordered reinstated to said positions with full back salaries. and Conrado Maglaya as Commissioners of the NLRC is ruled unconstitutional and void.R. however. is likewise declared unconstitutional and void. Bartolome Carale. respectively. Sales and Ricardo Olairez and petitioner Rolando D. 910 and this Court‘s Resolution in Ortiz vs. and there is. besides. Jr. Dulay. 90044. there being no essential inconsistency on that score between Republic Act No. the removal of petitioner Pascual Y. Daniel M. unless they opt for retirement. No. No. 2. in either case with full back salaries. and they are ordered reinstated as Executive Clerk and Deputy Executive Clerk. powers and duties of the NLRC as to justify a conclusion that the Act in truth did not merely declare vacant but actually abolished the offices of commissioners and created others in their place. No. Neither does the Act specify the qualifications for Executive Clerk and Deputy Executive Clerks. 6715 and the old law. 2. Nos. Their original and exclusive jurisdiction remains substantially the same under both the old law and the new. the removal of petitioners Rosario G. 91547. Jr. Lucas. as they must be. and conformably to the alternative prayer of the petitioners themselves. and G. pursuant to RA No. and the following specific dispositions are hereby RENDERED: 1.R. of certain classes of labor disputes. In G. Similar considerations yield the same conclusion as far as the positions of Labor Arbiters are concerned.. 3. not an express or implied abolition. or that anything inheres in these positions that would preclude their incumbents from being named Executive Clerk and Deputy Executive Clerks. from which the logical conclusion is that what was intended was merely a change in nomenclature. G. 87211. respectively.R. at the same time. no mention in the Act of the former titles. having also been illegally removed as Labor Arbiters.none of these can be said to work so essential or radical a revision of the nature. emoluments and benefits from the dates of their removal up to the time they are reinstated. to avoid displacement of any of the incumbent Commissioners now serving. Encarnacion. and 94518. petitioners-intervenors Lourdes A. The position titles of ―Executive Clerk‖ and ―Deputy Executive Clerk(s)‖ provided for in RA 6715 are obviously not those of newly-created offices. Gambito.R. There is no reason to suppose that these could be higher than those for Executive Director and Deputy Executive Director. who replaced the Secretary of Labor as ex officio Chairman of the NLRC pursuant to RA 6715. none of the petitioners having been affected or in any manner prejudiced by his appointment and incumbency as such. . it is ORDERED that said petitioners be paid all salaries. No. GRANTED. Commission on Elections. 79857. 91730. This disposition does not involve or apply to respondent Hon. their incumbents‘ constitutionally guaranteed security of tenure cannot be defeated by the provision for higher or other qualifications than were prescribed under the old law. in the first instance. In G. Sagmit. benefits and emoluments accruing to them for the unexpired portions of their six-year terms and allowed to enjoy retirement benefits under applicable laws. as NLRC Executive Director and Deputy Executive Director.mention the fact that the petitioners (in G. There is no essential change from the prescribed and basically administrative duties of these positions and. said provision can only operate prospectively and as to new appointees to positions regularly vacated.R. The Labor Arbiters continue to exercise the same basic power and function: the adjudication. and 3.R. Again. Ceferino E. 91547) have asserted without dispute that they possess the new qualifications -. the petitions are. In G. No. emoluments and benefits from the date of their removal to that of their reinstatement.
0522. Manuel Sarmiento. 1987 and July 28. or on June 30. the Company terminated from employment all UFE Union officers. The National Conciliation and Mediation Board (NCMB) invited the parties for a conference on February 4. UFE submitted to the company a list of CBA proposals.[ G. 1988 for the purpose of settling the dispute. RESPONDENTS. INC. Alabang. in Alabang/Cabuyao. 91025. This special civil action of certiorari assails the resolution (dated June 5. while the Cebu/Davao was represented by TUPAS. 1988. It is . In the meantime. and all the members of the negotiating panel for instigating and knowingly participating in a strike staged at the Makati. the petitioner Union of Filipro Employees. assailed the legal personality of the proponents of the said notice of strike to represent the Nestle employees. on the other hand. 1989). the Cagayan de Oro unit was represented by WATU. Prior to the expiration of the CBAs for Makati and Alabang/Cabuyao.. Makati. The private respondent however. PETITIONER. On June 10. Under the said CBAs. 1988. On September 21.R. expressed its readiness to negotiate a new CBA for Makati and Alabang/Cabuyao units but reserved the negotiation for Cagayan de Oro and Cebu/Davao considering that the issue of representation for the latter units was not yet settled. asserted their authority to represent the regular rank-and-file employees of Nestle. This notwithstanding. Philippines. 1987. December 19. said union negotiating panel thus ceased to exist and its former members divested of any legal personality. the union filed a complaint for illegal dismissal. 1987. 1987. The Labor Arbiter. No.‖ The union officers. 1990 ] UNION OF FILIPRO EMPLOYEES. the NCMB proceeded to invite the parties to attend the conciliation meetings and to which private respondent failed to attend contending that it will deal only with a negotiating panel duly constituted and mandated in accordance with the UFE Constitution and By-laws. 1987 without any notice of strike filed and a strike vote obtained for the purpose. 1987. standing and capacity to act as such or represent the union in any manner whatsoever. private respondent sought guidelines from the Department of Labor on how it should treat letters from several splinter groups claiming to have possessed authority to negotiate in behalf of the UFE. ―with the dismissal of UFE officers including all the members of the union negotiating panel as later on confirmed by the NLRC en banc. The decision was later on affirmed by the respondent NLRC en banc. (private respondent) filed a Notice of Strike at the Department of Labor raising the issues of CBA deadlock and unfair labor practice. The records show that before the filing of said notice of strike. 1988. headed by its president. on November 2. On September 14. Cabuyao and Cagayan de Oro on September 11. The company on the other hand. in a decision dated January 12. VS. The antecedents are: On June 22. the resolution denying the motion for reconsideration (dated August 8. Mr. UFE was certified as the sole and exclusive bargaining representative of Cagayan de Oro and Cebu/Davao units. Alabang/Cabuyao and Makati units were represented by the UFE. respectively. the respective CBAs in the four (4) units of Nestle. upheld the validity of the dismissal of said union officers. Respondent company contends that. THE HONORABLE NLRC AND NESTLE PHILIPPINES. the sole and exclusive bargaining agent of all rank-and-file employees of Nestle Philippines. 1989) of the National Labor Relations Commission (NLRC) relative to Certified Case No. Cagayan de Oro and Cebu/Davao work locations had all expired. being the duly elected officers of the union.
p. this petition for certiorari. or to recognize any act by a particular group to adopt the deadlock counter proposal of the management. which was. petitioner limited the issues to be resolved into six (6). ―The NLRC is further directed to call all the parties immediately and resolve the CBA deadlock within twenty (20) days from submission of the case for resolution. The workers thereat likewise conducted separate elections of their officers. belong to just one (1) union. this office hereby certificates the sole issue of deadlock in CBA negotiations affecting the Makati. 1988. the UFE. p. only the following shall be dealt with in this resolution: 1. Petitioner originally raised 13 errors committed by the public respondent. in its Urgent Manifestation and Motion dated September 24. it must be noted. denied on August 8. the union filed a case of ULP against the company with the NLRCNCR Arbitration Branch on November 16. however. 1988. Alabang and Cabuyao units to the National Labor Relations Commission for compulsory arbitration. Thus. petitioner filed a motion asking the Secretary of Labor to assume jurisdiction over the dispute of deadlock in collective bargaining between the parties. WHETHER OR NOT THE SECOND DIVISION OF THE NLRC ACTED WITHOUT JURISDICTION IN RENDERING THE ASSAILED RESOLUTION. ruling on non-economic issues. as aforestated. would be most unwise. lt filed a motion for reconsideration. 1990. at this stage. However. the parties are hereby ordered to execute and implement through their duly authorized representatives a collective bargaining agreement for a duration of five (5) years from promulgation of this Resolution. Labor Secretary Franklin Drilon certified to the NLRC the said dispute between the UFE and Nestle. three (3) other groups in the Nestle plant in Cabuyao and two groups in the Makati office have expressed a desire to bargain with management professing alleged authorization from and by the general membership. 1988. does not agree therewith. These groups however.Hence. the company concluded separate CBAs with the general membership of the union at Cebu/Davao and Cagayan de Oro units.‖ On March 20. respectively. 1988.‖ (Rollo. 1989.―SO ORDERED. In a letter dated August 20. the Second Division of the NLRC promulgated a resolution granting wage increase and other benefits to Nestle‘s employees. . BLR Director Pura Ferrer-Calleja advised: ―Any attempt on the part of management to directly deal with any of the factions claiming to have the imprimatur of the majority of the employees. 225) On June 5.noteworthy that aside from the names of the negotiating panel submitted by one UFE officials. 1988. 180) Petitioner finds said resolution to be inadequate and accordingly. 1988 and August 5.‖ (Rollo. Philippines. as well as absolving the private respondent of the Unfair Labor Practice charge. 1989. On October 28. THE SAME BEING RENDERED ONLY BY A DIVISION OF THE PUBLIC RESPONDENT AND NOT BY EN BANC. the relevant portion of which reads as follows: ―WHEREFORE. above premises considered. On October 18. Assailing the validity of these agreements. It may only fan the fire. Efforts to resolve the dispute amicably were taken by the NCMB but yielded negative result because of the irreconcilable conflicts of the parties on the matter of who should represent and negotiate for the workers. The dispositive portion states as follows: ―WHEREFORE.
We affirm the public respondent‘s findings and rule as regards the issue of jurisdiction. Petitioner‘s Urgent Manifestation and Motion dated September 24. 1988 when existing rules prescribed that. 6715 took effect during pendency of this case. fourth and fifth divisions.There shall be a National Labor Relations Commission which shall be attached to the Department of Labor and Employment for program and policy coordination only. This case was certified on October 28. the Court Resolved to DISPENSE with the filing of the same. ALABANG AND CABUYAO. R. National Labor Relations Commission. 213. WHETHER OR NOT THE RESPONDENT NLRC HAD ACTED WITH GRAVE ABUSE OF DISCRETION AND COMMITTED SERIOUS ERRORS IN FACT AND IN LAW WHEN IT RULED THAT THE CBA IS EFFECTIVE ONLY UPON THE PROMULGATION OF THE ASSAILED RESOLUTION. WHETHER OR NOT PUBLIC RESPONDENT HAD SERIOUSLY ERRED IN DENYING PETITIONER‘S DEMAND FOR A CONTRACT SIGNING BONUS AND IN TOTALLY DISREGARDING THE LONG PRACTICE AND TRADITION IN COMPANY WHICH AMOUNT TO DIMINUTION OF EMPLOYEES BENEFITS. The Commission shall exercise its adjudicatory and all other powers. WHETHER OR NOT PUBLIC RESPONDENT ERRED IN ENTIRELY ABSOLVING THE COMPANY FROM THE UNFAIR LABOR PRACTICE CHARGE AND IN DISREGARDING THE SUBSTANTIAL INCRIMINATORY EVIDENCE RELATIVE THERETO. the members nominated by the workers and employers organizations shall divest themselves of any affiliation with or interest in the federation or association to which they belong. It appearing that the allowance of said opposition would necessarily delay the early disposition of this case.2. Upon assumption into office. Article 213 of the Labor Code of the Philippines. it is incumbent upon the Commission en banc to decide or resolve a certified dispute. respectively. is further amended to read as follows: Art. 4. WHETHER OR NOT PUBLIC RESPONDENT SERIOUSLY ERRED IN NOT GRANTING THE UNIONS DEMAND FOR A ―MODIFIED UNION SHOP‖ SECURITY CLAUSE IN THE CBA AS ITS RULING CLEARLY COLLIDES WITH SETTLED JURISPRUDENCE ON THE MATTER. Aside from vesting upon each division the power to adjudicate cases filed before the Commission. as amended. cases from other parts of . 1990). Counsel for the private respondent company filed a motion for leave of court to oppose the aforesaid urgent manifestation and motion. The Commission may sit en banc or in five (5) divisions. 3. each composed of three (3) members. However. Of the five (5) divisions. WHETHER OR NOT THE RESPONDENT NLRC SERIOUSLY ERRED IN HOLDING THAT THE CBA TO BE SIGNED BY THE PARTIES SHALL COVER SOLELY THE BARGAINING UNIT CONSISTING OF ALL REGULAR RANK-AND-FILE EMPLOYEES OF THE RESPONDENT COMPANY AT MAKATI. with the latter to be chosen from among the recommendees of the Secretary of Labor and Employment. Five (5) members each shall be chosen from among the nominees of the workers and employers organizations.A. 6. The Commission shall sit en banc only for purposes of promulgating rules and regulations governing the hearing and disposition of cases before any of its divisions and regional branches and formulating policies affecting its administration and operations. (p. 5. Section 5 of RA 6715 provides as follows: ―Section 5. . functions and duties through its divisions. 9. composed of (a) Chairman and fourteen (14) Members. The Chairman and the four (4) remaining members shall come from the public sector. the first and second divisions shall handle cases coming from the National Capital Region and the third. said Act further provides that the divisions of the Commission shall have exclusive appellate jurisdiction over cases within their respective territorial jurisdiction.
the Presiding Commissioner of the second division shall be the Acting Chairman. when acting thru its Divisions. the Chairman shall designate such number of additional Commissioners from the other divisions as may be necessary. the Secretary of Labor.‖ Moreover. Third.Luzon. 6715 provides: ―Section 36. and the four (4) other members from the public sector shall be the Presiding Commissioners of the second. respectively. . The Commission when sitting en banc.A. from the Visayas and Mindanao. The Chairman.A. The conclusions of a division on any case submitted to it for decision shall be reached in consultation before the case is assigned to a member for the writing of the opinion. The divisions of the Commission shall have exclusive appellate jurisdiction over cases within their respective territorial jurisdiction. aided by the Executive Clerk of the Commission. fourth and fifth divisions. In case of the effective absence or incapacity of the Chairman. the Commission shall cease holding en banc sessions for purposes of adjudicating cases and shall discharge their adjudicatory functions and powers through their respective Divisions. 6715. . which reads: ―2. 36 (Series of 1989).‖ (Underscoring supplied) In view of the enactment of Republic Act 6715. and Fifth Divisions. The concurrence of two (2) Commissioners of a division shall be necessary for the pronouncement of a judgment or resolution. the above-cited Administrative Order is valid. in the performance of such similar or equivalent functions and duties as are discharged by the Clerk of Court and Deputy Clerks of Court of the Court of Appeals. respectively. A certification to this effect signed by the Presiding Commissioner of the division shall be issued. Fourth. and. The Chairman shall be the Presiding Commissioner of the first division. This is supported by the fact that on March 21. 1989. third. the aforementioned rules requiring the Commission en banc to decide or resolve a certified dispute have accordingly been repealed. it is to be emphasized and it is a matter of judicial notice that since the effectivity of R. Rule-Making Authority. respectively. by said Executive Clerk for its First Division and four (4) other Deputy Executive Clerks for the Second. 1989. shall have administrative supervision over the Commission and its regional branches and all its personnel. the date of the effectivity of Republic Act 6715. having been issued in accordance with existing legislation as the Secretary of Labor is clothed with the power to promulgate rules for the implementation of the said amendatory law. including the Executive Labor Arbiters and Labor Arbiters. Effective March 21. Whenever the required membership in a division is not complete and the concurrence of two (2) commissioners to arrive at a judgment or resolution cannot be obtained. To rule otherwise would not be congruous to the proper administration of justice. We find no legal justification in entertaining petitioner‘s claim considering that the clear intent of the amendatory provision is to expedite the disposition of labor cases filed before the Commission. shall be assisted by the same Executive Clerk. and a copy thereof attached to the record of the case and served upon the parties. Section 36 of R. It shall be mandatory for the division to meet for purposes of the consultation ordained therein. many cases have already been decided by the five (5) divisions of the NLRC. issued Administrative Order No.‖ Contrary to the claim of the petitioner.The Secretary of Labor and Employment is hereby authorized to promulgate such rules and regulations as may be necessary to implement the provisions of this Act.
UST Faculty Union. No. The compelling consideration of the Secretary‘s assumption of jurisdiction is the fact that a prolonged strike or lockout is inimical to the national economy and thus. its authority did not include the power to amend the Secretary‘s order (University of Santo Tomas v. the Union filed an Urgent Manifestation seeking the modification of the certification order to include the Cebu/Davao and Cagayan de Oro divisions. the consolidation of the issue with the instant case poses complicated questions regarding venue and joinder of parties.As to the second issue. Under this situation.e. i. As the implementing body. the Union argues. October 18. pp. The assumption of jurisdiction by the Secretary of Labor over labor disputes causing or likely to cause a strike or lockout in an industry indispensable to the national interest is in the nature of a police power measure. ―Thus. not only because of the evidentiary need to resolve the issue. . National Labor Relations Commission. 1990). the NLRC was thereby charged with the task of implementing the certification order for compulsory arbitration. In its assailed resolution. We feel that each of the issues propounded by the parties shall be better dealt with separately according to its own merits. the union manifested its intention to file a complaint for ULP against the company and its officers responsible for such act. would give premium to the alleged unlawful act of the Company in entering into separate ‗Collective Bargaining Agreements‘ directly with the workers thereat. Public respondent‘s resolution is proper and in full compliance with the order of the Secretary of Labor. the issue as to whether such acts constitute ULP is best heard and decided separately from the certified case. the Secretary‘s certification order for compulsory arbitration which was intended for the immediate formulation of an already delayed CBA was proper. ―Considering that the Union had reserved the right to prosecute the Company and its officers responsible for the alleged unlawful execution of the CBA directly with the union members in Cagayan de Oro and Cebu/Davao units. 174-176) We agree. G. the Court is convinced that the public respondent committed no grave abuse of discretion in resolving only the sole issue certified to by the Secretary and formulating a CBA which covers the bargaining units consisting of all regular rank-and-file employees of the respondent company at Makati. the employees/workers therein being all bonafide members of the Union which is the sole and exclusive bargaining representative of all the regular rank-and-file workers of the company nationwide. We rule to resolve the sole issue in dispute certified to this Commission. as it has in fact filed a case which is now pending with our Arbitration Branch. but also because of the delay that may ensue in the resolution of the present conflict. the deadlock in the collective bargaining negotiations in Cabuyao/Alabang and Makati units.. 89920. public respondent stated: ―A perusal of the records and proceedings of this case reveals that after the issuance by the Secretary of Labor of his Order dated 28 October 1988 certifying the dispute to Us. which it eventually did. ―Furthermore. It cannot be denied that the private respondent is engaged in an undertaking affected with public interest being one of the largest manufacturers of food products. Alabang and Cabuyao only. the need to implement some measures to suppress any act which will hinder the company‘s essential productions is indispensable for the promotion of the common good.R. The concomittant delay that will result in resolving petitioner‘s motion for the modification of the certification order to determine whether to include Cebu/Davao and Cagayan de Oro Divisions or not will defeat the very purpose of the Secretary of Labor‘s assumption of jurisdiction and his subsequent certification order for compulsory arbitration. Corollarily. Their non-inclusion in the certification order. ―In the same vein.‖ (Rollo.
but would also have favorable implications to the community and to the economy as a whole. compulsory arbitration is the process of settlement of labor disputes by a government agency which has the authority to investigate and to make an award which is binding on all the parties. this Court finds the provisions of Article 253 and Article 253-A of the Labor Code as amended by R. As regards the third issue raised by petitioner. it being beyond the scope of the certification order. We cannot subscribe to this argument. 253. v. this Court had occasion to define what a compulsory arbitration is. the NLRC is not sitting as a judicial court but as an administrative body charged with the duty to implement the order of the Secretary. However. insofar as the representation aspect is concerned. this Court stated: ―When the consent of one of the parties is enforced by statutory provisions.R. Duty to bargain collectively when there exists a collective bargaining agreement. It shall be the duty of both parties to keep the status quo and to continue in full force and effect the terms and conditions of the existing agreement during the 60-day period and/or until a new agreement is reached by the parties. No petition questioning the majority status of the incumbent bargaining agent shall be entertained and no . 6715. there exists a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest. as amended by Section 27 of R. (G. the Secretary of Labor and Employment may assume jurisdiction over the dispute and decide it or certify the same to the Commission for compulsory arbitration. Such assumption or certification shall have the effect of automatically enjoining the intended or impending strike or lockout as specified in the assumption or certification order. Moreover. either party can serve a written notice to terminate or modify the agreement at least sixty (60) days prior to its expiration date. 263 paragraph (g) of the Labor Code. be for a term of five (5) years. 55159. the Commission is further tasked to act within the earliest time possible and with the end in view that its action would not only serve the interests of the parties alone.For the same reason. We rule that the prayer to declare the respondent company guilty of acts of unfair labor practice when it allegedly resorted to practices designed to delay the collective bargaining negotiations cannot be subsumed in this petition. The Secretary of Labor and Employment or the Commission may seek the assistance of law enforcement agencies to ensure compliance with this provision as well as with such orders as he may issue to enforce the same. 6715 as the applicable laws. the proceeding is referred to as compulsory arbitration. If one has already taken place at the time of assumption or certification. in his opinion. it committed grave abuse of discretion as it allowed multiplicity of suits and splitting causes of action which are barred by procedural rule.Any Collective Bargaining Agreement that the parties may enter into shall. Terms of a collective bargaining agreement. Its function only is to formulate the terms and conditions of the CBA and cannot go beyond the scope of the order. Inc. In said case. National Labor Relations Commission. This is the clear intention of the legislative body in enacting Art. .A. the duty to bargain collectively shall also mean that neither party shall terminate nor modify such agreement during its lifetime. (Underscoring supplied) In view of the avowed but limited purpose of respondent‘s assumption of jurisdiction over this compulsory arbitration case. When there is a collective bargaining agreement.A. 89). 253-A. 22 Dec.‖ When sitting in a compulsory arbitration certified to by the Secretary of Labor. all striking or lockout employees shall immediately return to work and the employer shall immediately resume operations and readmit all workers under the same terms and conditions prevailing before the strike or lockout. which provides: (g) When. it cannot be faulted in not taking cognizance of other matters that would defeat this purpose. thus: ―Art. In the recent case of the Philippine Airlines. ―Art. Petitioner argues that because of the public respondent‘s actuation in this regard. In labor cases.
The assailed resolution which incorporated the CBA to be signed by the parties was promulgated June 5. x x x ― In the aforecited case. It is clear and explicit from Article 253-A that any agreement on such other provisions of the CBA shall be given retroactive effect only when it is entered into within six (6) months from its expiry date. If any such agreement is entered into beyond six months. But nowhere in the said pronouncement did We rule that every CBA contracted after the expiry date of the previous CBA must retroact to the day following such date. shall retroact to the day immediately following such date. 1989. All other provisions of the Collective Bargaining Agreement shall be renegotiated not later than three (3) years after its execution. public respondent did not abuse its discretion in giving the said CBA a prospective effect. the expiry date of the past CBA. then the parties shall agree on the duration of the retroactivity thereof. If the agreement was entered into outside the six (6) month period. But since no agreement to that effect was made.‖ (Underscoring supplied) In the light of the foregoing. Hence. Any agreement on such other provisions of the Collective Bargaining Agreement entered into within six (6) months from the date of expiry of the term of such other provisions as fixed in the Collective Bargaining Agreement. What was emphasized by this Court is that in no case should there be a period in which no agreement would govern at all. Inciong (121 SCRA 444) where this Court ruled: ―x x x. it is proper to rule that in the case at bar. This would include backwages. petitioners may not escape the effects of the security clause under either the old CBA or the new CBA by claiming that the old CBA had expired and that the new CBA cannot be given retroactive enforcement. and hence. the parties may exercise their rights under this Code. there being no new agreement reached. 1987. the parties shall agree on the duration of retroactivity thereof. Articles 253 an 253-A mandate the parties to keep the status quo and to continue in full force and effect the terms and conditions of the existing during the 60-day period prior to the expiration of the old CBA and/or until a now agreement is reached by the parties. this Court upholds the pronouncement of the NLRC holding the CBA to be signed by the parties effective upon the promulgation of the assailed resolution. the Court only pointed out that it is not right for union members to argue that they cannot be covered by the past and the new CBAs both containing the same closed-shop agreement for acts committed during the interregnum. the immediate effects of the mandated wage increase on the fringe benefits such as . 1977 of the Amigo-Employees UnionPAFLU and on February 15. its retroactivity should be agreed upon by the parties. Based on the provision of Section 253-A. To do so would be to create a gap during which no agreement would govern. the automatic renewal clause provided for by the law which is deemed incorporated in all CBAs. While petitioners were charged for alleged commission of acts of disloyalty inimical to the interests of the Amigo Employees Union . PAFLU and the company entered into and concluded a new collective bargaining agreement. the Union cites the case of Villar v. The action of the public respondent is within the ambit of its authority vested by existing laws. Petitioner claims that because of the prospective effect of the CBA. the clear and unmistakable terms of Articles 253 and 253-A must be deemed controlling. outside the 6 month period from June 30. from the time the old contract expired to the time a new agreement shall have been entered into with the union.certification election shall be conducted by the Department of Labor and Employment outside of the sixty-day period immediately before the date of expiry of such five year term of the Collective Bargaining Agreement.PAFLU in the Resolution of February 14. provides the reason why the new CBA can only be given a prospective effect. In assailing the public respondent‘s actuation. Consequently. union members were deprived of substantial amount of monetary benefits which they could have enjoyed had the CBA be given retroactive effect. 1977. In case of a deadlock in the renegotiation of the collective bargaining agreement.
August 21.‖ the assailed resolutions were erroneous and were drawn up arbitrarily and whimsically. unreasonable. and right to differential pay. 63122. if not the highest in the industry. G.R. 135 Phil. 591 (1939). National Labor Relations Commission. This Court. 323 (1961). prejudicial to the workers. 127 SCRA 6911. Petitioner did not succeed in overcoming the presumption of regularity in the performance of the public respondent‘s functions. leaves. v. 70 Phil. Nevertheless. Taken as a whole. 26 SCRA 272. No. Court of Industrial Relations. [Philippine Educational Institution v. incompetitive and thus. 276] and there being no indication that the findings are unsubstantiated by evidence [University of Pangasinan Faculty Union v. 111 Phil. Even if prospective in effect. We ruled that the findings of fact of the then Court of Industrial Relations (now NLRC). v. in not granting its demands for the inclusion in the CBA of a ―Contract Signing Bonus‖ and a ―Modified Union Shop Agreement. February 20. overtime premium.R. 127 SCRA 694. 282 (1968). 704]. Court of Industrial Relations. the assailed resolutions are after all responsive to the call of compassionate justice observed in labor law and the dictates of reason which is considered supreme in every adjudication. The findings of fact are conclusive and will not be disturbed in the absence of a showing that there has been grave abuse of discretion. February 20. 1984.. 26 SCRA 272. 63122. 1984. No. [Pambusco Employees Union Inc. 1987. G. No. 153 SCRA 247. University of Pangasinan Faculty Union v. Petitioner contends that in issuing the assailed resolutions. National Labor Union.the 13th and 14th month pay. Philippine Educational Institution v. We are convinced that the CBA formulated by public respondent is fair. are conclusive and will not be disturbed.R. it is imbued with competence to appraise and evaluate the evidence and positions presented by the parties. the terms and conditions thereof are inadequate. Even if the resolution fell short of meeting the numerous demands of the union.‖ Moreover. the petitioner failed to establish that public respondent committed grave abuse of discretion in not giving the CBA a retrospective effect. MLQSEA Faculty Association. 1 SCRA 734. Because of its expertise in settling labor disputes. 68 Phil. v. Manila Electric Co. 1989 are AFFIRMED. G. In the case of Palencia v. said CBA still entities the Nestle workers and employees reasonable compensation and benefits which. In the absence of a clear showing of grave abuse of the discretion. University of Pangasinan and NLRC. It further avers that the awards are bereft of any factual and legal basis. is one of the highest. 75763. The Resolutions of the NLRC. PREMISES CONSIDERED. public respondent considered only the position of the private respondent and totally disregarded that of the petitioner. except insofar as the ruling absolving the private respondent of unfair labor practice which is declared SET ASIDE. dated June 5. ACCORDINGLY. University of Pangasinan and NLRC. the findings of the respondent NLRC on the terms of the CBA should not be disturbed. reasonable and just. It further decries public respondent‘s alleged taking side with the private respondent. the NLRC is in the best position to formulate a CBA which is equitable to all concerned. the petition is DISMISSED. San Carlos Milling Co. . Thus: ―Following a long line of decisions this Court has consistently declined to disturb the findings of fact of the then Court of Industrial Relations whose functions the NLRC now performs. Petitioner made so many claims and statements which were adopted and asserted without good ground. 617 (1940). MLQSEA Faculty Assn. 1989 and August 8. It fails to substantiate why. is not unmindful of these. According to petitioner. The fourth and fifth assignment of errors should be resolved jointly considering that they are the terms and conditions of the CBA. etc. in the opinion of this Court.
At about 11:00 p. at about 11:00 p. ANTHONY FARNICAN. although he was then armed with a shotgun. the respondent submitted the sworn statements of Freddie Bragado. the security guard (SG) on post. SG Bragado.R. the patrols met the respondent's mine engineer. RICARDO WANGIT. Because of the threat. No. I The facts as narrated by the Labor Arbiter are as follows: "These cases of illegal dismissal were filed on December 11. Itogon-Suyoc Mines. They have been consolidated since the complainants have the same causes of action against the same respondent. five mine patrols proceeded to 14 Vein. information and resolution of the fiscal and Order of the Municipal Court all showing prima facie case exists against complainants. PETITIONERS. between 11:00 p. The records do not show what was their respective pay when the complainants were all discharged on December 3. and Jovencio Mina and Peter Atuban in the second case. SG Freddie Bragado. herein complainants were allegedly caught in the act of highgrading. 1400 Level underground. Melchor Estonilo and security guards. VS.. Estonilo padlocked their working place so they proceeded to take a crow's bath at the place where they were apprehended. on the other hand. PETER ATUBAN AND ARTHUR ALTATIS. and 11:45 p. 0044-81. they were ordered to get out. and when the lookout miner noticed their presence and warned his companions: "Adda tao!" in Ilocano.m. No. Prior to the apprehension. INC. 1981 by Anthony Farnican. Arthur Altatis and Ricardo Wangit in the first case. the guard on post and star witness of the respondent. but the complainants threatened him not to report them otherwise something would happen to him. and Engr. Inc. placed on preventive suspension on November 23.. They observed the highgraders in (sic) five (5) minutes. SG Bragado just let the complainants commit highgrading until the mine patrols arrived to apprehend the highgraders. but the guards refused the offer. hammers and iron tubes being used in breaking the ores. On their way. allegedly warned the complainants to stop their illegal activity. According to the respondent's version.000. have another version. RAB-I-0044-81 and NLRC Case No. meaning "the guards are here!" — the mine patrols apprehended the complainants and recovered from the hands of the complainants were a plastic containing the highgrade ores. joint affidavit of the apprehending security guards. escorted by two security guards carrying two sacks of highgrade ore. With headlights off. leadman of the complainants. "In support of the foregoing allegations.[ G. NATIONAL LABOR RELATIONS COMMISSION (NLRC) AND ITOGONSUYOC MINES. essay report that the recovered effects are highgrade. 97251-52.m. 23 Position. 1981. RAB-I-0045-81 upholding the dismissal of petitioners. they saw the complainants breaking and pulverizing highgrade ores in the presence of the posted security guard. 0045-81.m.00 per apprehension plus 30% percent of the value of the allegedly recovered . the patrols went down the manway and when they reached the apprehension site.m. July 14.. 1981 and subsequently dismissed on December 3. Complainants were investigated. 1981. They worked under the supervision of Engr. This is a petition for certiorari to set aside the decision of the Third Division of the National Labor Relations Commission (NLRC) in NLRC Case No. became afraid.00 each to settle the manner (sic). "The complainants.. "On November 20. "One of the complainants allegedly bribed the apprehending officers (sic) P1. They denied the allegations of the apprehending security guards and charged them to be more interested in the reward of P100. 1981. Nos. RESPONDENTS. 1995 ] JOVENCIO MINA.
"Respondent is finally ordered to present proof of compliance with this Order within ten (10) days from receipt of this decision" (Rollo. No. II Petitioners claim that their motion for reconsideration should have been resolved by the same members of the Third Division who rendered the appealed decision. in the light of the foregoing considerations. the First and Second Divisions shall handle cases coming from the National Capital Region and the Third. assumed their posts on November 20. Rule VII of the New Rules of Procedure of NLRC. the guard on post told the patrols why they were effecting the arrest when complainants had not done anything illegal. as newly constituted. Hence. Hence. — Unless otherwise provided by law.A. The new commissioners. We do not agree. 1989 while Commissioner Rogelio I. "xxx Of the five (5) divisions [of the NLRC]. this petition. plus full back wages to be counted after the 10th day from receipt of this decision up to the time of their actual reinstatement. 1989. Fourth and Fifth Divisions. Bernardo who were assigned to the Third Division. Javier and Commissioner Ireneo B. p. That when they were apprehended. the respondent is hereby ordered to reinstate the five (5) complainants to their former respective position without loss of seniority rights with full back wages including ECOLA and 13th month pay for one year and four months. On October 18. rendered its Decision dated November 29. cases from other parts of Luzon. The dispositive portion of the decision reads: "WHEREFORE. the Third Division. 1989. without any just and valid cause. That they were discharged illegally. the Third Division of NLRC affirmed the Labor Arbiter's decision but limited the award of back wages to three years. Private respondent appealed the decision of the Labor Arbiter to NLRC.highgrade. 6715. respectively. Presiding Commissioner Lourdes C. In support of the foregoing allegations. Section 2(b). Under Article 213 of the Labor Code of the Philippines as amended by R. 15-17). 1986. Respondent is also ordered to pay complainants ten (10%) percent attorney's fees of the total amounts (sic) awarded. 19). 1990 and declaring the dismissal from employment of complainants as valid. Each Division shall consist of one member from the public sector who shall act as Presiding Commissioner and one member each from the workers and . a change in the membership of the division took place. they submitted sworn statements including that of SG Bragado" (Rollo. Rayala assumed his office on November 15. In the motion for reconsideration filed by private respondent. The divisions of the Commission shall have exclusive appellate jurisdiction over cases with their respective territorial jurisdiction" (Italics supplied). Between the rendition of the decision of the Third Division and the resolution denying the motion for reconsideration. pp. provides as follows: "b) Divisions. 161 dated November 18. functions and duties through its five (5) Divisions. the Labor Arbiter rendered his decision finding that the complainants were illegally dismissed. 1990 setting aside the Resolution dated October 18. 1989 of the Secretary of Labor and Employment reorganized the NLRC and specified the place of assignment of the newly appointed commissioners. Administrative Order No. the Commission shall exercise its adjudicatory and all other powers. On April 28. from the Visayas and Mindanao. these complaints.
the judges were appointed before the courts were established. Since petitioners are from Baguio City. as well as the law. It is therefore of no significance as to who of the commissioners is functioning in the division at any given time. and. It simply means that there is no judge to act in the court. It is common for persons. Llorente and Dayrit. appealed cases from Luzon (Regions I. Since there is reasonable ground to believe that petitioners committed the crime of highgrading. The only matter of concern is that the Commissioners voting on the motion for reconsideration were duly assigned to the division. X. IV except Metro Manila and V). appealed cases from Visayas (Regions VI. there is an important distinction between them which should be kept in mind. respondent company is justified in terminating their services. In a few instances. The judge may become disqualified. including the Cordillera Administrative Region. The law is clear that the jurisdiction to decide cases appealed to NLRC is vested in the different divisions thereof. 1990 is AFFIRMED. which is assigned to the NLRC Third Division. appealed cases from Mindanao (Regions IX. 346-347). . National Labor Relations Commission. Fourth Division." (at pp. The Decision of NLRC dated November 29. lawyers. the petition is DISMISSED. Courts may exist without a present judge. National Labor Relations Commission. VII. including those from the Mindanao Autonomous Region)" (Italics supplied). when the person speaking means the judge simply. respectively. but such fact does not destroy the court. 581 exist to justify respondent company's loss of trust and confidence in petitioners. 29 Phil. A person may be appointed a judge and be assigned to a particular district or court subsequently. "Of the five (5) Divisions. not in the individual commissioners assigned to each division. the First and Second Divisions shall have exclusive territorial jurisdiction over appeals of cases coming from the National Capital Region and the POEA.D. Capitol Industrial Construction Groups v. the motion for reconsideration filed by petitioners must also be resolved by said Third Division.employers sectors. and the person who occupies the position of judge. and judges. the Supreme Court stated that: "xxx In ordinary parlance judges are spoken of as the courts and the courts are referred to. to use these terms interchangeably. nevertheless. Consequently. It is well-established that factual findings of labor administrative officials. is. The job of petitioners. if supported by substantial evidence. There may be a judge without a court. as miners. notwithstanding that fact. as an entity. although generally described as menial. the Third Division of NLRC correctly took cognizance of the appealed case. we find and so hold that substantial evidence exists to warrant the finding that petitioners were engaged in highgrading. Going now to the claim that petitioners were illegally dismissed. But. 222 SCRA 604 . II. 221 SCRA 469 ). of such nature as to require a substantial amount of trust and confidence on the part of respondent company. WHEREFORE. 341 (1915). No. XI and XII. The courts of the Philippine Islands were created and the judges were appointed thereto later. are entitled not only to great respect but even to finality (Baguio Colleges Foundation v. By analogy. III. and VIII). As may be gleaned from the above-cited rules of NLRC. It is not imperative that all the elements of highgrading or theft of gold as defined by Section 1 of P. the Fifth Division. in the case of Pamintuan v. Baguio City is included in the Cordillera Administrative Region. the Third Division. So it appears that there is an important distinction between the court.
(B) correction of their own typographical errors of the names of employees appearing in the caption. Anliza (13) Almario. Maria (34) Trono. Violeta C. that as top officials of the respondent company who handed down the decision dismissing the petitioners. Josefina (9) Advincula. Leonisa (20) Bactat. Rosario (11) Alilay. Myrna Palaca. Javelosa and Renato C.R. Bonifacio G. following the recent ruling in the case of Ruben Serrano vs. Marites (17) Alvarez. petitioners also pray for the (A) inclusion of the names of employees listed in Annex "D" of the petition which they inadvertently omitted in the caption of the case. Margie deL (30) Salvador. Elisa M. Should reinstatement be not feasible. in the early part of February 1990. Eugenia (24) Escurel. began removing its machineries and equipment from its plant located at Merville Park. NATIONAL LABOR RELATIONS COMMISSION Before us is petitioners' motion for partial reconsideration of our decision dated February 28. RAMOS. Rebecca Poceran. Belen Barquio. Felicidad (4) Arias. Imelda (2) Andres.. respondent company shall pay separation pay of one month salary for every year of service. (22) Cruz. Evelyn F. Anacorita (19) Aquino. National Labor Relations Commission and Isetann Department Store. Should reinstatement be not feasible. SO ORDERED. Azucena G. Josefina (3)Aragon. (39) Villon. Olivia (32) Tiaga. the respondent company is hereby ordered to pay full backwages to petitioner-employees while the Federation is also ordered to pay full backwages to petitioner-union officers who were dismissed upon its instigation. Mercedita (28) Rempis. In their subsequent motion filed on the same day. Rosalina (16) Alvaran. Edna (18) Ampo. (25) Hilario. Adeliza T. Monica (8) Abellada. and the respondent company is hereby ordered to immediately reinstate the petitioners to their respective positions. Marilyn (12) Almario. Since petitioners were terminated without the requisite written notice at least 30 days prior to their termination. Eva C. NCR-00-09-04199-89 is REVERSED and SET ASIDE." Petitioners allege that this Court committed patent and palpable error in holding that "the respondent company officials cannot be held personally liable for damages on account of employees' dismissal because the employer corporation has a personality separate and distinct from its officers who merely acted as its agents" whereas the records clearly established that respondent company officers Saul Tawil. Adoracion (27) Perez. GREENFIELD (MSMGUWP) VS. . Petitioners further contend that while the case was pending before the public respondents. the respondent company. Salvacion (6) Arceo. April 20.  the dispositive portion of which reads: "WHEREFORE. Zenaida (29) Rosario. Celia (21) Carpio. Marilou (15) Almonte. 2000. the decision of the National Labor Relations Commission in Case No. arbitrary and unlawful dismissal of petitioners from work.[ G. Harmelina (10) Ajayo. Primitiva Gomez. Since the dismissal of petitioners was without cause. backwages shall be computed from the time the herein petitioner employees and union officers were dismissed until their actual reinstatement. Carlos T. Angelita (14) Almazan. their backwages shall be computed from the time petitioners were terminated until the finality of this decision. they are responsible for acts of unfair labor practice. (37) Villanueva. Lita Buquid. Ciervo. Milagros (38) Villapondo. that these respondent corporate officers should not be considered as mere agents of the company but the wrongdoers. (26) Payuan. Paranaque and began diverting jobs intended for the regular employees to its sub-contractor/satellite branches. the petition is GRANTED. Aida (33) Torbela. they found that the same is being used by other unnamed business entities also engaged in the manufacture of garments. Marilou Dejocos. They added that during their ocular inspection of the plant site of the respondent company. No. Amelia (23) Glifonia. Mercedita Perez. Elizabeth (7) Anonuevo. Amorlita Rotairo. Costs against the respondent company. Puangco have caused the hasty. to wit: (1) Amores. 2001 ] MALAYANG SAMAHAN NG MGA MANGGAGAWA SA M. Maximina Faustino. Genevive (5) Arroyo. that the respondent company officials are also the officers and incorporators of these satellite companies as shown in their articles of incorporation and the general information sheet. Greenfield thus it will be very difficult for them to fully enforce and implement the court's decision. which should be as follows: Manuela Avelin. HON. Nenevina (35) Varona. 113907. Asuncion (36) Vasquez. Petitioners further claim that the respondent company no longer operates its plant site as M. Norma (31) Sambayanan.
are its sole liabilities. The rule is that obligations incurred by the corporation. Elena Tebis. (21) Venerado Pastoral. Fausta Segundo. Rodelia Royandoyon. Leonila Rodil. in general from the people comprising it. Susan Abogona. Petitioners' contention that respondent company officials should be made personally liable for damages on account of petitioners' dismissal is not impressed with merit. Maria Fe Berezo.Emma Saludario. hence should not be granted any relief from the court. Juana Overencio. Josephine Lasco. officers and employees. solidary liabilities may at times be incurred but only when exceptional circumstances warrant such as. Respondent officials interpose no objection to the inclusion of employees inadvertently excluded in the caption of the case but object to the inclusion of employees who were allegedly similarly situated for the reason that these employees had not been parties to the case. (6) Erlinda Baby Patungan Manalo. (5) Erlinda San Juan. Cristina Rapinan. Maria Enicame. Teodora Sulit. in the following cases: 1. (13) Esther Cometa. (c) are guilty of conflict of interest to the prejudice of the corporation. Jose Irlanda. Evangeline Tayco. to wit: (1) Dionisa Aban. A corporation is a juridical entity with legal personality separate and distinct from those acting for and in its behalf and. Matilde de Blas. Julita Maniba. Roselyn Rivero. Tita Senis. (14) Eliza Cabiting. (22) Cristina Perlas. Rufina Bugnot. having knowledge thereof. (2) Alicia Aragon. Emma Saludario. and other persons. Edeltrudes Romero. trustee or officer has contractually agreed or stipulated to hold himself personally and solidarily liable with the Corporation. (7) Jenette Patungan. Precila Carta. Azucena Postigo. In their Comment. (b) act in bad faith or with gross negligence in directing the corporate affairs. Florenia Ragos. Tessie Balbis. Ricardo Paloga. Regina Lapidario. the officers of a corporation (a) Vote for or assent to patently unlawful acts of the corporation. (4) Nelita F. On the other hand. (C) inclusion of other employees similarly situated whose names were not included in Annex "D" or in the caption of the case. Respondent company failed to file its comment. Rowena Jarabejo. Milagros Fonseca. Aurora Bravo. (2) When a director or officer has consented to the issuance of watered stocks or who. (8) Blandina Simbahan. the Solicitor General interposes no objection to petitioners' prayer for the inclusion of omitted and similarly situated employees and the correction of employees' names in the caption of the case. Narcisa Songuad. Gregoria Arguelles. Juanita Osuyos. True. trustee or officer is made. Macaria Barrion. that the supposed proof of satellite companies hardly constitute newly discovered evidence. Carmen Rosimo Basco. (16) Edna Fernandez. (15) Erlinda Dalut. Josie Marcos. Noemi Menguillo. Josie Sumarsar. acting through its directors. generally. (3) When a director. (23) Margie del Rosario. (19) Imelda Jarabe. Betty Borja. Diana Adovas. (11) Teresita Arales. When directors and trustees or. (17) Emily Inocencio. Gelongos. Salvacion Wilson. Anita Ahillon. (12) Alice Artikulo. (9) Asuncion Varona. Paulina Valdez. Teresita Nierves. Celsa Doropan. Shirley Melegrito. (3) Vicky Francia. private respondent company officials Carlos Javelosa and Remedios Caoleng. its stockholders or members. Amalia Eugenio. thus it is too late for petitioners to require this Court to admit and evaluate evidence not presented during the trial. in appropriate cases. state that considering that petitioners admitted having knowledge of the fact that private respondent officers are also holding key positions in the alleged satellite companies. in their Comment. (4) When a director. they should have presented the pertinent evidence with the public respondents. (20) Mercedes Pabadora. Jovita Cera. by specific provision of law. Rodrigo Buella. did not forthwith file with the corporate secretary his written objection thereto. (18) Esperanza Jalocon. (10) Josefina Andres. . personally liable for his corporate action.
" Petitioners' claim that the jobs intended for the respondent company's regular employees were diverted to its satellite companies where the respondent company officers are holding key positions is not substantiated and was raised for the first time in this motion for reconsideration. vs. Even assuming that the respondent company officials are also officers and incorporators of the satellite companies. Bad faith or negligence is a question of fact and is evidentiary. however. "We now come to the personal liability of petitioner. Both corporations were substantially owned and controlled by the same person and there was no break or cessation in operations. July 1. There appears to be no evidence on record that he acted maliciously or in bad faith in terminating the services of private respondents.In labor cases. NLRC. Inc. should nor have been made personally answerable for the payment of private respondents' back salaries. particularly. the Court has held corporate directors and officers solidarily liable with the corporation for the termination of employment of corporate employees done with malice or in bad faith. Petitioner Sunio. As held in Sunio vs. In the instant case. Court of Industrial Relations. and a single payroll for both businesses. 1989 and that these corporations have different sets of incorporators aside from the respondent officers and are holding their principal offices at different locations. The laborers of the gaugau factory and the coffee factory were also interchangeable. all the assets of the steel and nail plant were . respondent company's corporate personality remains inviolable. was within the scope of his authority and was a corporate act. Inc. Mere ownership by a single stockholder or by another corporation of all or nearly all of the capital stock of a corporation is not of itself sufficient ground for disregarding the separate corporate personality.e. it partakes of the nature of fraud. 1957 and was succeeded on the next day. we find those rulings inapplicable to this case. Kaisahan ng Manggagawa sa La Campana (KKM). 1957 by the Claparols Steel Corporation. the workers in one factory worked also in the other factory. one management. In such a case. ceased operations on June 30. and his alleged arbitrary dismissal of private respondents. La Campana Coffee Factory.. His act. alleged as grounds thereof. i. it imports a dishonest purpose or some moral obliquity and conscious doing of wrong. Substantial identity of incorporators between respondent company and these satellite companies does not necessarily imply fraud. there is nothing substantial on record to show that respondent officers acted in patent bad faith or were guilty of gross negligence in terminating the services of petitioners so as to warrant personal liability. Respondents. It is basic that a corporation is invested by law with a personality separate and distinct from those of the persons composing it as well as from that of any other legal entity to which it may be related. therefore. Moreover. the Claparol Steel and Nail Plant which was ordered to pay its workers backwages. They had one office. The documents attached to petitioners' motion for reconsideration show that these satellite companies were established prior to the filing of petitioners' complaint against private respondents with the Department of Labor and Employment on September 6. The Assistant Regional Director's Decision failed to disclose the reason why he was made personally liable. Petitioner Sunio was impleaded in the Complaint in his capacity as General Manager of petitioner corporation. and La Campana Gaugau Packing were substantially owned by the same person. such circumstance does not in itself amount to fraud. Sunio. It has been held that bad faith does not connote bad judgement or negligence. who was made jointly and severally responsible with petitioner company and CIPI for the payment of the backwages of private respondents. In Claparols vs. it means breach of a known duty thru some motive or interest or ill will. In La Campana Coffee Factory. This is reversible error. his being the owner of one half (1/2) interest of said corporation. Although there were earlier decisions of this Court in labor cases where corporate officers were held to be personally liable for the payment of wages and other money claims to its employees. therefore.
engaged in the same business and operating in the same compound. the Court ruled that under the Minimum Wage Law. after the December 19. NLRC. a new corporation was created. in the above-mentioned cases. owned by the same family. in 1969.transferred to the new corporation. Petitioners failed to explain why these employees allegedly similarly situated were not included in the submitted list filed before us. foreseeing the possibility or probability of payment of backwages to the 22 strikers. the situation in AC Ransom does not obtain in this case. WHEREFORE. RANSOM actually ceased operations on May 1. However. A judgment cannot bind persons who are not parties to the action. it would appear that RANSOM." This Court said: "In the instant case." Clearly. the responsible officer of an employer corporation can be held personally liable for non-payment of backwages for "if the policy of the law were otherwise. Such inclusion would be tantamount to a substantial amendment which cannot be allowed at this late stage of the proceedings as it will definitely work to the prejudice and disadvantage of the private respondents. organized ROSARIO to replace RANSOM. Petitioners' prayer for the inclusion of employees listed in Annex "D" whose names were admittedly inadvertently excluded in the caption of the case and for the correction of typographical errors of the employees' names appearing in the caption. It is elementary that strangers to a case are not bound by the judgment rendered by the court and such judgment is not available as an adjudication either against or in favor of such other person. Notably. a situation which is not obtaining in the instant case. In AC Ransom Labor Union-CCLU vs. petitioners' motion for reconsideration is partially granted so as to include the names of employees listed in Annex "D" which petitioners inadvertently omitted in the caption of this case. is well taken and is hereby granted. . with the latter to be eventually phased out if the 22 strikers win their case. petitioners' prayer for the inclusion of other employees allegedly similarly situated but whose names were not included either in Annex "D" or in the caption of the case must be denied. 1972 Decision of the Court of Industrial Relations was promulgated against RANSOM. where the alleged satellite companies were established even prior to the filing of petitioners' complaint with the Department of Labor. the corporation employer would have devious ways for evading of back wages. 1973.
. 55159. Dolina completed the course. p. the Civil Aeronautics Administration issued him a license as Commercial Pilot and PAL then extended him a temporary appointment for six (6) months as Limited First Officer. 1989 ] PHILIPPINE AIRLINES. when his appointment was again due to expire. 35. Armando Dolina . Rollo. [NLRC Decision. In the meantime Dolina was placed under preventive suspension effective 1 October 1976. on 2 March 1977. December 22. 116. Dolina had only logged eighty four (84) hours and fifty five (55) minutes flying time. When his appointment was due to expire on 30 April 1975. p.R. VS. p. p. However. p. Petitioner impugns in this petition for certiorari that part of the public respondent National Labor Relations Commission's (NLRC) decision in NLRC Case No. PETITIONER. his appointment was again extended to 31 October 1976. the Board recommended the termination of the complainant pursuant to which PAL filed a clearance application [Rollo.] Conformably. During this third extension of his appointment. which examination revealed the following: b. short of the minimum 500 flying hours required for regularization as First Officer. 34] for Dolina's termination. p. Dolina not qualified for regular employment in the Company.] Petitioner contends that public respondent NLRC gravely abused its discretion considering that in the same decision public respondent affirmed the decision of the Labor Arbiter in toto granting respondent's application for clearance to dismiss the private respondent. 8. Dolina completed the 500 flying hours requirement. The pertinent facts are as follows: Private respondent Dolina was admitted to the Philippine Airlines (PAL) aviation School for training as a pilot beginning 16 January 1973. the Board finds Mr.] On 23 September 1976.[ G. No. To enable him to complete the requirement. and undertook an equipment qualification course up to 4 October 1974. On 9 October 1974. 3-4. INC. his performance and the result of his medical examination as submitted by the Medical Sub-Department. On 25 January 1974. NATIONAL LABOR RELATIONS COMMISSION AND ARMANDO DOLINA. RESPONDENTS. pp.] On 26 January 1977 the Officer-in-Charge of the Department of Labor Regional Office No. and to pay his salaries from 1 April 1979 "until this case is finally resolved" [Rollo. On 17 August 1976. 71. complainant was again subjected to an examination and interview by the Pilot Acceptance Qualifications Board as part of the regularization process. pending the resolution of petitioner's appeal.] Petitioner appealed the order lifting Dolina's suspension to the Secretary of Labor. Pending his physical examination by the chief Flight Surgeon. his employment was extended for another six months which appointment was described as "permanent. RB-IV-9319-77 which ordered petitioner to restore private respondent Dolina to its payroll.After thorough evaluation of the candidate‘s past records. IV lifted the preventive suspension. the terms of which are as follows: . and ordered petitioner to reinstate Dolina to his former position with full backwages from 1 October 1976 up to actual reinstatement. pp. The issue of termination and damages was referred to the Executive Labor Arbiter for compulsory arbitration [Rollo. 25-26. Dolina countered with a complaint for illegal dismissal on 6 October 1976 [Rollo. and thus on 31 March 1976 he applied for regularization as First Officer. Dolina took a psychological examination wherein his "Adaptability Rating" was found to be "unacceptable" [Annex "L" to the Petition. A. Rollo. 33." On 31 October 1975. he was still short of the minimum flying time requirement such that his appointment was again extended up to 30 April 1976. The training agreement bound PAL to provide regular and permanent employment to Dolina upon completion of the training course. the parties signed an agreement before the Undersecretary of Labor.
the date he was dropped from the respondent's payroll. p. PAL opposed the motion claiming that it was no longer obliged to return Dolina to its payroll since the decision of the Labor Arbiter dated 23 March 1979 in its favor was a final resolution of the case by arbitration [Annex "N" to the Petition. Rollo. the Decision appealed from should be as it is hereby affirmed in toto. [NLRC Decision. However the respondent is ordered to restore the complainant to its payroll and to pay his salaries from 1 April 1979 until this case is finally resolved. 10-11. Armando Dolina against the Philippine Airlines.] On 23 March 1979. 1367 dated May 1. therefore. Private respondent Dolina failed to file his comment and the Solicitor General submitted his own Comment supporting the stand of petitioner.D. 32-33. p. we are not in accord with the discontinuation of the payment of complainant's salaries. Due to the adverse stand of the Solicitor General. 97. with a prayer for a temporary restraining order. The parties shall consider this arrangement pending final resolution of the case by arbitration. Since the termination is upheld. this office is devoid of jurisdiction to entertain said claim. 3. WHEREFORE. contending that the Labor Arbiter's decision was not yet final because of his timely appeal. Rollo. p. Underscoring supplied. Subsequently. public respondent NLRC submitted its own Comment. [Decision of Labor Arbiter. the main issue is still being litigated. Rollo. 12. Besides pursuant to P. While pending final resolution of the complaint of Mr. pp. Be that as it may. SO ORDERED. the same should be as it is hereby GRANTED. 1978. the Acting Secretary of Labor issued an order finding that the propriety of the suspension had been rendered moot and academic by the above agreement and referred the case for compulsory arbitration to the Executive Labor Arbiter [Annex "J" to the Petition. p. The Court issued a temporary restraining order on 10 October 1980. Consequently.AGREEMENT The undersigned parties hereby agree to the following: 1. Rollo. No. The order of Regional Director Vicente Leogardo for the reinstatement with backwages of Mr.] On 8 February 1980. PAL removed Dolina from its payroll effective 1 April 1979. the Labor Arbiter rendered its decision. pp. 2. must be restored to the payroll and paid for his salaries from 1 April 1979. the oppositor's TERMINATION IS IN ORDER. As things stand. the dispositive portion of which reads as follows: IN VIEW OF ALL THE FOREGOING. this petition.] By virtue of the above decision. Dolina then appealed the Labor Arbiter's decision to the public respondent NLRC on 29 April 1979 and there filed a motion praying that PAL be ordered to return him to PAL's payroll. SO ORDERED. perforce the claim for moral damages is denied. 85. 137. on 30 May 1977. 1. he shall be considered in the payroll effective 1 October 1976. and therefore. . The agreement of the parties stipulated in no uncertain terms that the complainant [Dolina] is to be carried in respondent's payroll until this case is finally resolved. p. The complainant. Dolina is hereby rendered moot and academic. it is our considered opinion that there is merit on the application for clearance.] Hence. public respondent NLRC rendered its decision containing the assailed portion to wit: In fine it is our considered view that the respondent's application for clearance to dismiss the complainant has sufficiently surmounted the test of validity.
Lim v.] Under the Labor Code. L-40258. Court of Appeals. Wisconsin Employees' Relations Board. Co.The issue before the Court is whether or not the NLRC committed grave abuse of discretion in holding that private respondent Dolina was entitled to his salaries from 1 April 1979 "until this case is finally resolved. even proceedings on certiorari before this Court would be embraced by the term "arbitration" and private respondent will continue to receive monthly salary without rendering any service to the petitioner regardless of the outcome of the proceedings before the Labor Arbiter. In its broad sense. 1. Section 11. Any appeal raised by an aggrieved party from the Labor . chosen by the parties or appointed by statutory authority to hear and decide the case in controversy [Chan Linte v. Ins.R. PAL argues that the arbitration of the case is limited to and comprises merely the proceedings before the Labor Arbiter such that when the latter renders a decision. including the situation of the subject thereof and the parties to it. Since the Labor Arbiter's decision in favor of petitioner did not finally resolve the case in view of the timely appeal by private respondent from said decision. September 11. 1980. 52 LRA 369 (1920). as amended. it is an act of grave abuse of discretion amounting to lack of jurisdiction on its part to order petitioner to pay private respondent's salaries from 1 April 1979 until the case is finally terminated. For if it were so.] When the Labor Arbiter renders his decision. Ed. the case was not yet finally terminated by arbitration and Dolina is entitled to be placed in petitioner's payroll until the complaint is finally resolved. In entering into the agreement. was rendered moot and academic. compulsory arbitration is deemed terminated because by then the hearing and determination of the controversy has ended. PAL contends that said stipulation refers only to the resolution of the case by arbitration and said arbitration of the case was terminated when the Labor Arbiter rendered its decision dated 23 March 1979. Neither can proceedings on appeal before the NLRC en banc be considered as part of the arbitration proceeding. specifically the third stipulation containing the clause "pending final resolution of the case by arbitration. Pres. arbitration is the reference of a dispute to an impartial third person. No. 383-410. the proceeding is referred to as compulsory arbitration. by stipulation of the parties. 62 P 135. it is the Labor Arbiter who is clothed with the authority to conduct compulsory arbitration on cases involving termination disputes [Article 217.S. Amalgamated Association v. including appeal. 548 (1921). The above contentions call for the proper interpretation of the agreement between the parties. 23 Wash." It is a basic rule in interpretation of contracts that the circumstances under which an instrument was made. In labor cases. This is clearly an absurdity which could not have been contemplated by the parties. 340 U. 381 (1951). without having to perform any work for the petitioner. 95 L. may be considered so that the intention of the contracting parties may be judged correctly [Art. 42 Phil. Public respondent NLRC on the other hand contends that arbitration is a continuing process from the time the case is referred by the Secretary of Labor to the Arbitration Branch until the final judgment is had on appeal. Civil Code of the Philippines. 442. Rules of Court. Rule 130." PAL contends that inasmuch as the respondent Commission acting en banc had affirmed in toto the decision of the Labor Arbiter granting petitioner the clearance for the dismissal of private respondent Dolina. arbitration of the dispute is terminated.. Decree No. effective from the time he was preventively suspended until final resolution of the case by arbitration. 1371. the parties could not have intended to include in the clause "final resolution of the case by arbitration" the whole adjudicatory process. private respondent was included in petitioner's payroll. G.] In the instant case. Seattle. 99 SCRA 668. compulsory arbitration is the process of settlement of labor disputes by a government agency which has the authority to investigate and to make an award which is binding on all the parties [See Wood v. for as long as one of the parties appeal to the NLRC and until the case is finally resolved by this Court. In lieu of reinstatement and the payment of his backwages. the stipulation in the 2 March 1977 agreement that Dolina shall be included in the payroll of PAL until final resolution of the case by arbitration was intended to supersede the order of the Regional Director which.] When the consent of one of the parties is enforced by statutory provisions. Law Union and Rock.
R.] Where. therefore.R. of any showing that its standards are unreasonable and discriminatory. This is clearly untenable. National Labor Relations Commission. G. 1978. National Labor Relations Commission. In view of the above finding of valid dismissal. July 27.R. 86 SCRA 37. 81471. 1987. We join the public in commending it. Durabilt Recapping Plant & Co. however. the safety of the lives and properties of its passengers. G. October 30. G. Santos v.R. 154 SCRA 166. v. it would neither be fair nor just to allow the employee to recover something he has not earned and could not have earned [Santos v. No. the NLRC en banc merely reviews the Labor Arbiter's decision for errors of fact or law and no longer duplicates the proceedings before the Labor Arbiter.] Moreover. Thus. if there is no work performed by the employee there can be no wage or pay unless the laborer was able. 1989. which we do not find here. supra. v. 76721. as in this case. More important. in ordering the continued payment of Dolina's salaries from 1 April 1979 until the case is finally resolved. In the first place. such that when the latter rendered his decision. In the absence. willing and ready to work but was prevented by management or was illegally locked out. September 21. Chong Guan Trading v. This is understandable for it concerns the safety of its properties. 1987. the dismissal was for a just cause. No. Where the employee's dismissal was for a just cause. The order of the NLRC for the continued payment of Dolina's salaries would allow the latter to unjustly enrich himself at the expense of the petitioner. and above all. * * * In fine. Court of Industrial Relations. authorizes neither oppression nor self-destruction of the employer [Colgate . We can only say that for exercising extraordinary diligence in the selection of its pilots. The NLRC's order would result in compensating Dolina for services no longer rendered and when he is no longer in PAL's employ. We cannot disturb them. This is contrary to the age-old rule of "a fair day's wage for a fair day's labor" which continues to govern the relation between labor and capital and remains a basic factor in determining employees' wages [Durabilt Recapping Plant & Co. in protecting the rights of the laborer. there is no factual or legal basis for ordering the payment of backwages.Arbiter's decision is already beyond the scope of arbitration since in the appeal stage. supra. April 26. we are not persuaded that the respondent [herein petitioner PAL] is under obligation to employ him as regular employee simply because he was certified physically fit and technically proficient by the CAA. the NLRC held that: With respect to the issue of whether or not the complainant's [Dolina] dismissal was sufficiently grounded. the NLRC had no authority to order the continued payment of Dolina's salaries from 1 April 1979 until the case is finally resolved. L-29728. G. is the fact that the NLRC's order for the continued payment of Dolina's salaries is inconsistent with its affirmance of the Labor Arbiter's decision upholding the validity of Dolina's dismissal. No. the NLRC in effect ordered the payment of backwages to Dolina notwithstanding its finding of a valid dismissal. the clause "pending final resolution of the case by arbitration" should be understood to be limited only to the proceedings before the Labor Arbiter. This Court has reiterated time and again that the law. National Labor Relations Commission. 152 SCRA 328.] So that. In affirming the Labor Arbiter's decision granting the termination clearance. the case was finally resolved by arbitration. which by law it is committed to transport safely. it is Our considered view that the respondent's application for clearance to dismiss the complainant has sufficiently surmounted the test of validity. backwages in general are granted on grounds of equity for earnings which a worker or employee has lost due to his illegal dismissal [New Manila Candy Workers Union (NACONWA-PAFLU) v. National Labor Relations Commission. 76746. National Labor Relations Commission. suspended or dismissed. No.
Similarly. 1974. G.R.R. 1987] while Dolina. G. 64809. G. the NLRC chose not to adhere with fidelity to this doctrine. No. v. Madrigal & Co. No. Drilon. Inc. Inc. No. L-23357. L-49023. In the recent case of Llora Motors. National Labor Relations Commission. The temporary Restraining Order issued by the Court on 10 October 1980 is made PERMANENT." WHEREFORE. No.. whose dismissal was found to be valid.R. v. 1988. Inc. No. April 30. No. Inc. 163 SCRA 323. G. Considering the foregoing. Secondly. there is in this case an excess of jurisdiction on the part of the NLRC in ordering the continued payment of Dolina's salaries "from 1 April 1979 until the case is finally resolved.. June 30. For in the latter case. which required the employer to pay to its employee an amount equivalent to a half month's pay for every year of service as retirement benefits.R. Ople. Minister of Labor. L-48237. November 7. G.R. June 30. 126 SCRA 223. v. v. which corresponds to the period from 1 April 1979 until "final resolution" of the instant case. Philippine Airlines.Palmolive Philippines.] In this case.. can recover approximately ten years backwages. Madrigal & Co. Court of Industrial Relations. 56 SCRA 694. that part of the dispositive portion of the decision of the National Labor Relations Commission in NLRC CASE NO. Inc. 73681. Inc. the Court holds that respondent NLRC's order for the continued payment of Dolina's salaries from "1 April 1979 until the case is finally resolved" is contrary to law and established jurisprudence and the NLRC acted in excess of its jurisdiction in issuing the assailed order. v. Zamora. v. the backwages that can be recovered by the worker is limited to three years [Mercury Drug Co. for being without basis either in law or contract. 1989 the Court held as an act without or in excess of jurisdiction the portion of the Labor Arbiter's award. G. November 29.R. NLRC's order for continued payment of Dolina's salary from 1 April 1979 up to the final resolution of the case would place Dolina in a better position than those workers who were found to have been illegally dismissed by their employer. . 82895. 1983. RB-IV-9319-77 requiring petitioner to restore private respondent to its payroll and ordering the payment of his salaries from 1 April 1979 until the case is finally resolved is hereby declared NULL and VOID and SET ASIDE.
the terms and conditions attendant to the acceptance of petitioner's "Professional Services" were attached to it reading: Scope of Professional Services The Senior Process Design Engineer shall work together with the Process Design Consultant in performing the scope of services below which includes but are not limited to the following: 1.200. Review the progress of work being done by the Basic Design Engineering Company and coordinate with the company management team for an efficient and effective project implementation. Australian and US petroleum product standard by the year 2004.R. As indicated in the above-quoted portion of Rabino's letter. . 5. We thank you for considering our company as a valued partner in the advancement of Petroleum Processing Technology in our country.200. 1999 up to the completion of the scope of services and continuation thereof with a guaranty of 12 continuous months as outlined in the attachment or until a mutually agreed date. 2006 ] CORAZON ALMIREZ. 1999 to petitioner. Make reports and recommendations to the company management team regarding work progress. 7. As well as the Philippine Clean Air Act provisions applicable to the proposed 1. Perform other related works that are necessary in completing the Engineering Procurement and Construction (EPC) bid documents and progress reports relevant to schedules of deliveries to the Project Proponent as required by the company. Implement new process technologies that can meet the requirements of Japanese. EDWIN R.000 BPSD Petroleum Refinery. Participate in discussions during the solicitation of proposals from Basic Design Engineering Companies. 8. Represent the Company in technical meetings to be held locally or abroad. 6. No. Review and revise/improve as necessary the existing conceptual process block diagram or Process Flow Scheme of the proposed petroleum refinery.000 BPSD petroleum refinery. Almirez This is to confirm acceptance of your services as per attached Terms and Conditions. Your services will commence effective October 18. furnished the details of the employment of her services as follows: Subject: Acceptance of Professional Services Refinery – Senior Process Design Engineer Dear Ms. Rabino (Rabino) who. Various capacity combinations are to be considered to develop process design modules of 1. revisions and improvement of process design on a regular basis as required by company management team. 3. Prepare the Process Design Terms of Reference or Basis of Design and other data required for the proposed 1. These data are to be used in securing the services of a Basic Design Engineering Company as well as part of Project Accomplishment of Infinite Loop Technology Corp. VS INFINITE LOOP TECHNOLOGY CORPORATION.000 BPSD total capacity. by letter dated September 30. 162401.[ G. RABINO AND COURT OF APPEALS. PETITIONER. 4. Corazon Almirez (petitioner) was hired as a Refinery Senior Process Design Engineer for a specific project by respondent Infinite Loop Technology Corporation (Infinite Loop) through its General Manager/President-co-respondent Edwin R. January 31. 2. Petroleum Product Standards required shall be researched and be part of the Basis of Design or Term of Reference. RESPONDENTS.200.
on other relevant works or projects when required. 1999 Salary for Nov.Out of town travel expenses Other Benefits: . 1-15. Others: Infinite Loop Technology Corporation to provide the ff: . Continue related works when the construction stage of this Proposed Refinery will push through.Printer/ Scanner .000.9. . 1999 Full payment for Nov.000. 10.00 2.Process Simulation Softwares to be identified later (Emphasis in the original. underscoring supplied) The letter. fax. or until a mutually agreed date.500.Communication Expenses (Cellular phone.Representation Expenses . 15-30. 1-15.000. Serve as technical consultant to Infinite Loop Technology Corp.000.US$ 300. 15-30 salary Salary for Dec. tels) . 1-15. 1999 1/17/00 1/16/00 Salary for Jan. For her services. 16-31. Terms of Payments Professional Fee: US$ 2. petitioner received the following amounts on the dates indicated: Voucher date 11/23/99 12/02/99 12/15/99 Salary for Nov. Reimbursable Expenses: Work related expenses which include but not limited to the following: . bore the signature of petitioner and Rabino.00 12.000.00 10.Project Bonus at the end of the contract to be mutually agreed upon by both parties.00 8.00 per month as transportation allowance (Engineer to use her personal car in the performance of work) to be paid in equivalent pesos every end of the month.00 .00 per month (net of tax) To be paid 50/50 split in US Dollars or equivalent Peso every 15th and 30th of the month Length of Service: Guaranteed minimum of 12 continuous months or up to completion of services.000.Laptop Computer (Pentium III or best available model with modems etc.) . 2000 Salary for Jan.00 12. as well as the attached documents. 2000 Amount P20.
00 By letter dated February 2. when I received my salary for the month of January which is only partial. be constrained to file the necessary action in court. Inc. She was constrained to resign from her job as an engineer at the Technoserve International Co." Rabino assured petitioner that her professional services would be resumed once they are provided with the initial payment requested from the project proponent.00 a month net of tax. 2000.17). you stated that our client's services "will commence effective October 18. you have paid her only a total amount of SEVENTY FOUR THOUSAND TWO HUNDRED TWENTY NINE & 17/100 PESOS (P74.000) and even less because [of] SSS and tax deductions x x x I understand that tax should be deducted from my salary for your Accounting records but I would like to ask you not to deduct it from the P30.500. However. which is way below than the agreed professional fee of US $2. ALMIREZ has referred to us for appropriate legal action concerning her contract with your company as a refinery process design engineer. our client suffered sleepless nights. By letter dated August 9. petitioner. failing which we shall. that "like any other proposed project. . Moreover.000.000. in view of her contract with your company. In the said contract.. 2000 12. formal demand is hereby made on you to compensate our client the total amount of her contract or the amount of US DOLLARS: twenty thousand ($ 20. much to our regret. CORAZON S. In view thereof. 2000. The same is a clear violation of the terms and conditions of the contract. Rabino stated that petitioner's letter "was totally different [from] what [they] verbally agreed [upon]" in her house.00 salary I am supposed to be receiving. However. MORE OR LESS.00 --------------Total P77. 1999 up to the completion of the scope of the services and continuation thereof with a guaranty of 12 continuous months as outlined in the attachment or until a mutually agreed date".000 BPSD Petroleum Refinery] can be deferred like its present status. Currently I am paying my SSS contributions voluntarily so there is no need for the company to pay my monthly contributions.000. 2000. despite your guarantee of at least 12 continuous months of service." and that since "the financial side for the engineering design for the proposed [project] is not yet available x x x it would be prudent to SUSPEND her professional services as Senior Process Design Engineer effective February 7. wrote Rabino "to compensate [her with] the total amount of her contract. [the Proposed 1.200.000.00 monthly. 2000.1/20/00 Salary for Jan. On account of your blatant violation of the terms and conditions of the contract. which was accepted by our said client on September 30. this amount is already net of tax x x x. anxiety and besmirched reputation. my understanding is that. 1-15." thus: Our client MS. I would like to render my service at Infinite Loop based on the contract that I signed and I am willing to serve as technical consultant to Infinite Loop on other relevant works or projects while we are waiting for the Masbate refinery project.000.229. 1999.. Responding. you suspended her professional services effective February 7. within five (5) days from your receipt hereof.00). (P25. through counsel. petitioner conveyed to Infinite Loop through Rabino her disappointment with the "salary" she was receiving in this wise: x x x When I agreed with a salary of P30.
I. and (4) 10% of the total claim as and for attorney's fees.00 as and for moral damages. is the lead company in this undertaking in association with other companies forming a consortium to cope up with the huge financial and technical requirement of this project.00 in its peso equivalent at the date of payment less advances in the amount of P77. is still in contact with us.00 as and for exemplary damages. 2000. .000. there being no employee-employer relationship between them as the contract they entered into was one of services and not of employment. but unfortunately the Project Proponent. Infinite Loop and Rabino (hereafter respondents) appealed to the NLRC. Infinite Loop moved to dismiss petitioner's complaint on the ground that the NLRC has no jurisdiction over the parties and the subject matter. the former Chairman of Arrox Resources Corp.x x x ABUSED ITS DISCRETION AMOUNTING TO LACK OF JURISDICTION AND ERRED IN NOT FINDING THAT THE LABOR ARBITER HAS NO JURISDICTION OVER THE CAUSES OF ACTION PLEADED IN THE COMPLAINT." held that there existed an employeremployee relationship between the parties. NON PAYMENT OF PROFESSIONAL FEE AND BREACH OF CONTRACT. At the moment. We would inform you soonest once any development from the project proponent would be relayed to us. they argued that the NLRC: I. by letter of November 15. Corp. as follows: Thank you for reminding us about our agreement about this possible landmark project.000.E. We all hope that this project will push thru after our country would overcome all the peace and order. have encountered re-organization and have not yet paid us for this project. (3) P100. You all know that Infinite Loop Tech. finding that employer-employee relation between the parties indeed existed.." praying that judgment be rendered in her favor ordering Infinite Loop to pay: (1) $22. the Labor Arbiter. 2002. On December 12. It dismissed petitioner's claim for damages. Before the Court of Appeals to which respondents elevated the case. The Labor Arbiter thus ordered Infinite Loop and Rabino to jointly and severally pay petitioner the sum of US$ 24. 2001.00 or its peso equivalent representing salaries and wages. 6 of the Scope of Professional Services of petitioner showed that "the company's management team exercises control over the means and methods in the performance of [petitioner's] duties as Refinery Process Design Engineer.Rabino later wrote petitioner. finding that paragraph No. dismissed respondents' appeal.00 plus 5% thereof by way of attorney's fees. By Resolution of November 14. By Resolution dated September 19.000. (2) P300.000. the NLRC. Arrox Resources Corp. economic and political crisis we are encountering now. We all hope that you would bear with us. 2000.. II.000. however. petitioner filed a complaint against Infinite Loop and Rabino before the National Labor Relations Commission (NLRC) for "breach of contract of employment. We all have invested a lot of group resources for this.x x x COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION AND COMMITTED REVERSIBLE ERROR IN NOT FINDING THAT [PETITIONER] IS NOT AN EMPLOYEE OF [INFINITE LOOP].
 Under the control test.III. and (4) the presence or absence of the power of control. (3) the presence or absence of the power of dismissal. Philhealth. the company naturally expected to be updated regularly of her "work progress. MOREOVER. the so called "control test" is commonly regarded as the most crucial and determinative indicator of the presence or absence of an employer-employee relationship. there is no showing of a power of control over petitioner. hence.' held by Decision dated October 20." if any. From the earlier-quoted scope of petitioner's professional services. Philhealth contributions and . In bolstering her contention that there was an employer-employee relationship. To ascertain the existence of an employer-employee relationship. on the project for which she was specifically hired.x x x SERIOUSLY ERRED IN NOT FINDING THE ENVISIONED ENGAGEMENT OF [PETITIONER] AS A REFINERY PROCESS ENGINEER IS CO-TERMINOUS WITH THE PROJECT. the last one. (2) the payment of wages. above-quoted paragraph No." Having hired petitioner's professional services on account of her "expertise and qualifications" as petitioner herself proffers in her Position Paper. revisions and improvement of process design on a regular basis as required by company management team" does not "show that the company's management team exercises control over the means and methods in the performance of her duties as Refinery Process Design Engineer. The services to be performed by her specified what she needed to achieve but not on how she was to go about it. Contrary to the finding of the Labor Arbiter. B. WHICH PROJECT DID NOT MATERIALIZE. and withholding tax. 2003 that no employer-employee relationship existed between the parties. but also the manner and means to be used in reaching that end. petitioner contending that the appellate court erred when it: A. It accordingly reversed the NLRC decision and dismissed petitioner's complaint. Hence. finding that "[petitioner] was hired to render professional services for a specific project' and her "primary cause of action is for a sum of money on account of [Infinite Loop's] alleged breach of contractual obligation to pay her agreed professional fee. petitioner draws attention to the pay slips and Infinite Loop's deduction of her SSS. (Underscoring supplied) The appellate court. THE ASSAILED JUDGMENT IS BASED ON MISAPPRECIATION OF FACTS. as affirmed by the NLRC. Of these four. and to the designation of the payments to her as "salaries. 6 of the "Scope of [petitioner's] Professional Services' requiring her to "[m]ake reports and recommendations to the company management team regarding work progress. x x x FAILED TO CONSIDER THE RELIEF MENTIONED IN [PETITIONER'S] COMPLAINT FOR PAYMENT OF SALARY x x x C. x x x RULED THAT THE SEPARATION FROM SERVICE OF [PETITIONER] BECAUSE OF THE PROJECT'S DISCONTINUANCE DID NOT RESULT TO ILLEGAL DISMISSAL. jurisprudence has invariably applied the four-fold test. an employer-employee relationship exists where the person for whom the services are performed reserves the right to control not only the end achieved. the NLRC and the Labor Arbiter have no jurisdiction over the complaint." The deduction from petitioner's remuneration of amounts representing SSS premiums. the present petition. x x x INCONSISTENTLY RULED THAT THERE WAS NO EMPLOYER-EMPLOYEE RELATIONSHIP BETWEEN THE PARTIES BUT AT THE SAME TIME IT CITED THAT [PETITIONER] IS A PROJECT EMPLOYEE. to wit: (1) the manner of selection and engagement.
as the employers in these two cases did not only regularly make similar deductions from the therein complainants" remuneration but also registered and declared the complainants with the SSS and Medicare (Philhealth) as their employees. which is the law between the parties. NLRC and Nagusara v. v. together with its attachments." which. was made in the only payslip issued to petitioner.withholding tax. 2000. Such payslip cannot prove the existence of an employer-employee relationship between the parties. . that for the period of January 16-31." It is the above-quoted contract of engagement of services-letter dated September 30. 1999. The cases of Equitable Banking Corp. "Salary" is a general term defined as "a remuneration for services given. NLRC should be differentiated from the present case. WHEREFORE. Even petitioner concedes rendering service "based on the contract. the petition is DENIED for lack of merit. as reflected earlier. the other amounts of remuneration having been documented by cash vouchers. As for the designation of the payments to petitioner as "salaries. is bereft of a showing of power of control. the most crucial and determinative indicator of the presence of an employer-employee relationship." it is not determinative of the existence of an employer-employee relationship.
33893 entitled COMMANDO SECURITY SERVICE AGENCY. 5 and 6. Defendant refused. Before us is a Petition for Review on Certiorari of the decision of the Court of Appeals in CA-G. It held: "However. plaintiff Commando Security Service Agency.40 on a daily 8-hour basis and P808.R. 112139. 5 and 6. 5 and 6. 1989). THE HONORABLE COURT OF APPEALS (FORMER EIGHTH DIVISION) AND COMMANDO SECURITY SERVICE AGENCY. NLRC. Phil. . and (3) the Wage Orders violate the impairment clause of the Constitution.72 for a four hour overtime while the shift-in-charge was to be paid P811. This was followed on November 1. vs. Their Contract expired on June 6. vs. 2000 ] LAPANDAY AGRICULTURAL DEVELOPMENT CORPORATION.[ G. 19203-88. CV No. subject to the provisions of Sec. By the time of the filing of plaintiff‘s Complaint. INCORPORATED vs." Plaintiff demanded that its Guard Service Contract with defendant be upgraded in compliance with Wage Order Nos. Wage Order No.00 increase on the ECOLA. the Wage Orders made specific provisions to amend existing contracts for security services by allowing the adjustment of the consideration paid by the principal to the security agency concerned. Both Wage Orders contain the following provision: "In the case of contract for construction projects and for security. Branch 9. adjustments must be paid by the principal to the security agency concerned.00 per day on the minimum wage of workers in the private sector and a P5.R.. The contract called for the payment to a guard of P754. However. Inc. and defendant Lapanday Agricultural Development Corporation entered into a Guard Service Contract. 9. janitorial and similar services. Wage Orders increasing the minimum wage in 1983 were complied with by the defendant. 1984 by Wage Order No. May 18. Wage Orders No. On June 16. the sum it should pay is less in amount. The Wage Orders require the amendment of the contract as to the consideration to cover the service contractor‘s payment of the increases mandated. in the case at bar.. PETITIONER. 11th Judicial Region. the increase in the minimum wage and allowances rates of the workers shall be borne by the principal or client of the construction/service contractor and the contracts shall be deemed amended accordingly. RESPONDENTS. Before the plaintiff could pay the minimum wage as mandated by law. Davao City in Civil Case No.25. VS. LAPANDAY AGRICULTURAL DEVELOPMENT CORPORATION which affirmed the decision of the Regional Trial Court. Plaintiff provided security guards in defendant‘s banana plantation. respectively). 3 (b) of this order" (Sec. in order for the security agency to pay the security guards. Inc. Tuberculosis Society. NLRC. January 31. Defendant opposed the Complaint by raising the following defenses: (1) the rate adjustment is the obligation of the plaintiff as employer of the security guards. 6 and Sec. No. The pertinent facts as found by the Court of Appeals are as follows: "The evidence shows that in June 1986. the contract for security services had earlier been terminated without the corresponding amendment. the rate adjustment payable by defendant amounted to P462. 1986 without the rate adjustment called for Wage Order Nos.28 on a daily 8-hour basis and an additional P565. 5 was promulgated directing an increase of P3.00 on the ECOLA. (2) assuming its liability. 5 and 6 being implemented. 1984. et al.60 for the 4-hour overtime. (Eagle Security Agency. INC. The trial court decided in favor of the plaintiff..346. Plaintiff now demands adjustment in the contract price as the same was deemed amended by Wage Order Nos. 6 which further increased said minimum wage by P3. Inc.
et al. private respondent contends that the basis of its action against petitioner-appellant is the enforcement of the Guard Service Contract entered into by them. NLRC. (Eagle Security Agency vs. petitioner submits that it is the National Labor Relations Commission (NLRC) and not the civil courts that has jurisdiction to resolve the issue involved in this case for it refers to the enforcement of wage adjustment and other benefits due to private respondent‘s security guards mandated under Wage Order Nos. 18 May 1989). "As to the issue that Wage Orders Nos..341."  3. IN THE ABSENCE OF BAD FAITH AND WITHOUT THE TRIAL COURT CORRECTLY ESTABLISHING THE BASIS FOR ATTORNEY’S FEES. But if its Eagle that pays them. Inc. May 18. which is deemed amended by Section 6 of Wage Order No. 4. it cannot claim reimbursements from Eagle. A SECURITY AGENCY WHO DID NOT PAY WAGE INCREASE TO ITS GUARDS IT HAD ALREADY TERMINATED AND WITHOUT THEIR AUTHORIZATION CANNOT INSTITUTE AN ACTION TO RECOVER SAID WAGE INCREASE FOR ITS BENEFIT. et al.31 or 25% of the total adjustment claim of P462. THE WAGE INCREASES PROVIDED FOR IN THE WAGE ORDERS WERE DUE TO THE GUARDS AND NOT THE SECURITY AGENCY. the increases/adjustments in wages and ECOLA are due to private respondent and not to the security guards who are not parties to the said contract. the High Court ruled" The Supreme Court has rejected the impairment of contract argument in sustaining the validity and constitutionality of labor and social legislation like the Blue Sunday Law. Inasmuch as the services of the forty-two (42) security guards were already terminated at the time the complaint was filed on August 15. the latter can claim reimbursement from PTS in lieu of an adjustment. Reiterating its position below. 1989). 2. Inc. that pursuant to their amended Guard Service Contract. considering that the contract had expired and had not been renewed. 1988. petitioner asserts that private respondent has no factual and legal basis to collect the benefits under subject Wage Order Nos. Inc. compulsory coverage of private sector employees in the Social Security System. if PTS pays the security guards. 5 and 6.. Tuberculosis Society."Given these circumstances. 5 and 6 intended for the security guards without the authorization of the security guards concerned. amounts that they claim were never paid by private respondent and therefore not collectible by the latter from the petitioner. National Labor Relation Commission and Phil. 5 AND 6. Considering that the RTC has no jurisdiction. NLRC and Phil. and the abolition of share tenancy enacted pursuant to the police power of the state (Eagle Security Agency. there is no need for them to authorize the filing of. THE NATIONAL LABOR RELATIONS (SIC) IS THE PROPER FORUM THAT HAS THE JURISDICTION TO RESOLVE THE ISSUE OF WHETHER OR NOT THE PETITIONER IS LIABLE TO PAY THE PRIVATE RESPONDENT THE WAGE AND ALLOWANCE INCREASES MANDATED UNDER WAGE ORDER NOS. private respondent‘s complaint partakes of the nature of an action for recovery of what was supposedly due the guards under said Wage Orders. 6. It is therefore immaterial whether or not private respondent paid its security guards their wages as adjusted by said Wage Orders and that since the forty-two (42) security guards are not parties to the Guard Service Contract. vs. THE SAME MAY NOT BE AWARDED.25 for lack of basis and for being unconscionable. vs. Petitioner also assails the award of attorney‘s fees in the amount of P115. hence this petition where petitioner cites the following grounds to support the instant petition for review: "1. or be joined in. NLRC. 5 and 6 constitute impairments of contracts in violation of constitutional guarantees. On the other hand.585. Moreover. vs." Petitioner‘s motion for reconsideration was denied. its decision is without force and effect. . 5 and Section 9 of Wage Order No. Tuberculosis Society.
hours of work and other terms and conditions of employment. arising from employer-employee relations. As regards the award to private respondent of the amount of P115. private respondent is not seeking any relief under the Labor Code but seeks payment of a sum of money and damages on account of petitioner‘s alleged breach of its obligation under their Guard Service Contract. private respondent alleges that the suit filed before the trial court is for the purpose of securing the upgrading of the Guard Service Contract entered into by herein petitioner and private respondent in June 1983. In its complaint. f accompanied with a claim for reinstatement. the core issue involved in the present petition is whether or not petitioner is liable to the private respondent for the wage adjustments provided under Wage Order Nos. Article 217 of the Labor Code as amended vests upon the labor arbiters exclusive original jurisdiction only over the following: 1. an employer-employee relationship is an indispensable jurisdictional requisite. While the resolution of the issue involves the application of labor laws. Furthermore. Unfair labor practices.583. reference to the labor code was only for the determination of the solidary liability of the petitioner to the respondent where no employer-employee relation exists. and there is none in this case. 5 and 6 and for attorney‘s fees. private respondent maintains that there is enough evidence and/or basis for the grant thereof. In all these cases. We resolve to grant the petition. Cases arising from any violation of Article 264 of this Code. Private respondent further contends that petitioner is estopped or barred from raising the question of jurisdiction for the first time before the Supreme Court after having voluntarily submitted to the jurisdiction of the regular courts below and having lost its case therein. Social Security. jurisdiction lies with the regular courts. and 6. 2. We resolve first the issue of jurisdiction. The action is within the realm of civil law hence jurisdiction over the case belongs to the regular courts. all other claims. to litigate in court. It is well settled in law and jurisprudence that where no employer-employee relationship exists between the parties and no issue is involved which may be resolved by reference to the Labor Code. involving an amount exceeding five thousand pesos (P5. the amount of P115. other labor statutes or any collective bargaining agreement. 4. rates of pay.31 granted by the trial court which is 25% of the total claim is not unconscionable.31 as attorney‘s fees. since the legal fee payable by private respondent to its counsel is essentially on contingent basis. Except claims for Employees Compensation.000. Thus. including questions involving legality of strikes and lockouts. 5.585. We agree with the respondent that the RTC has jurisdiction over the subject matter of the present case. 3. . those cases that workers may file involving wages.this suit. Termination disputes.00) regardless of whether accompanied with a claim for reinstatement. Medicare and maternity benefits. The enforcement of this written contract does not fall under the jurisdiction of the NLRC because the money claims involved therein did not arise from employer-employee relations between the parties and is intrinsically a civil dispute. considering that the adamant attitude of the petitioner (in implementing the questioned Wage Orders) compelled the herein private respondent. On the merits. including those of persons in domestic or household service. it is the Regional Trial Court that has jurisdiction. moral exemplary and other forms of damages arising from employer-employee relations. Claims for actual. As regards the jurisdiction of the RTC.
158 SCRA 665]. Premises considered. – Whenever an employer enters into a contract with another person for the performance of the former‘s work. As an employer. 106. Contractor or subcontractor. among others. would directly pay the security guards the wage and allowance increases because there is no privity of contract between them. association or corporation which. uniforms and other equipments. What the Wage Orders require. The contractor is made liable by virtue of his status as direct employer. in the same manner and extent that he is liable to employees directly employed by him. EAGLE. EAGLE is tasked. and that the principal is ultimately liable for the said increases. 5 and 6. on the other hand.e. tools. No. in order to ensure that the employees are paid the wages due them. therefore. This Court held in Eagle Security. the employer shall be jointly and severally liable with his contractor or subcontractor to such employees to the extent of the work performed under the contract. On the other hand. ART. 1988. R." It will be seen from the above provisions that the principal (petitioner) and the contractor (respondent) are jointly and severally liable to the employees for their wages. Even in the absence of an employer-employee relationship. vs. the law itself establishes one between the principal and the employees of the agency for a limited purpose i. there existed a contractual agreement between PTSI and EAGLE wherein the former availed of the security services provided by the latter. However. Inciong. In ruling that under the Wage Orders. the solidary liability of the principal and contractor was held to apply to the aforementioned Wage Order Nos. March 16. Inc. In the above-mentioned cases. 52824. firearms with ammunitions.Private respondent admits that there is no employer-employee relationship between it and the petitioner. existing security guard services contracts are amended to allow adjustment of the consideration in order to cover payment of mandated increases. shall be paid in accordance with the provisions of this Code. the Wage Orders made specific provision to amend existing contracts for security services by allowing the adjustment of the consideration paid by the principal to the security agency concerned. 107. materials and supplies necessary for the maintenance of a security force. the security agency collects from its client payment for its security services. is the amendment of the contracts as to . The security guards‘ contractual relationship is with their immediate employer. in order for the security agency to comply with the new wage and allowance rates it has to pay the security guards. In the event that the contractor or subcontractor fails to pay the wages of his employees in accordance with this Code. The private respondent is an independent/job contractor who assigned security guards at the petitioner‘s premises for a stipulated amount per guard per month. the security guards‘ immediate recourse for the payment of the increases is with their direct employer. NLRC that the joint and several liability of the contractor and the principal is mandated by the Labor Code to assure compliance with the provisions therein including the minimum wage. NLRC and Spartan Security and Detective Agency. job or project. This payment covers the wages for the security guards and also expenses for their supervision and training. supra and Bautista vs. The principal. if any. partnership. Indirect employer. PTSI in this case. however. not being an employer. ‗To be borne‘. accessories. this Court stated: "The Wage Orders are explicit that payment of the increases are ‗to be borne‘ by the principal or client. 3 of the Contract for Security Services. In return. Inc. vs. contracts with an independent contractor for the performance of any work. the guards bonds. task. with the payment of their wages [See Article VII Sec. The Contract of Security Services expressly stipulated that the security guards are employees of the Agency and not of the petitioner. Articles 106 and 107 of the Labor Code provides the rule governing the payment of wages of employees in the event that the contractor fails to pay such wages as follows: "Art. is made the indirect employer of the contractor‘s employees to secure payment of their wages should the contractor be unable to pay them. – The provisions of the immediately preceding Article shall likewise apply to any person. does not mean that the principal. the employees of the contractor and of the latter‘s subcontractor. EAGLE. G.
the consideration to cover the service contractors‘ payment of the increases mandated. In the end, therefore, ultimate liability for the payment of the increases rests with the principal. In view of the foregoing, the security guards should claim the amount of the increases from EAGLE. Under the Labor Code, in case the agency fails to pay them the amounts claimed, PTSI should be held solidarily liable with EAGLE [Articles 106, 107 and 109]. Should EAGLE pay, it can claim an adjustment from PTSI for an increase in consideration to cover the increases payable to the security guards." It is clear also from the foregoing that it is only when contractor pays the increases mandated that it can claim an adjustment from the principal to cover the increases payable to the security guards. The conclusion that the right of the contractor (as principal debtor) to recover from the principal as solidary co-debtor) arises only if he has paid the amounts for which both of them are jointly and severally liable is in line with Article 1217 of the Civil Code which provides: "Art. 1217. Payment made by one of the solidary debtors extinguishes the obligation. If two or more solidary debtors offer to pay, the creditor may choose which offer to accept. He who made payment may claim from his codebtors only the share which corresponds to each, with interest for the payment already made. If the payment is made before the debt is due, no interest for the intervening period may be demanded. xxx" Pursuant to the above provision, the right of reimbursement from a co-debtor is recognized in favor of the one who paid. It will be seen that the liability of the petitioner to reimburse the respondent only arises if and when respondent actually pays its employees the increases granted by Wage Order Nos. 5 and 6. Payment, which means not only the delivery of money but also the performance, in any other manner, of the obligation, is the operative fact which will entitle either of the solidary debtors to seek reimbursement for the share which corresponds to each of the debtors. The records show that judgment was rendered by Labor Arbiter Newton R. Sancho holding both petitioner and private respondent jointly and solidarily liable to the security guards in a Decision dated October 17, 1986 (NLRC Case No. 2849-MC-XI-86). However, it is not disputed that the private respondent has not actually paid the security guards the wage increases granted under the Wage Orders in question. Neither is it alleged that there is an extant claim for such wage adjustments from the security guards concerned, whose services have already been terminated by the contractor. Accordingly, private respondent has no cause of action against petitioner to recover the wage increases. Needless to stress, the increases in wages are intended for the benefit of the laborers and the contractor may not assert a claim against the principal for salary wage adjustments that it has not actually paid. Otherwise, as correctly put by the respondent, the contractor would be unduly enriching itself by recovering wage increases, for its own benefit. Finally, considering that the private respondent has no cause of action against the petitioner, private respondent is not entitled to attorney‘s fees. WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals dated May 24, 1993 is REVERSED and SET ASIDE. The complaint of private respondent COMMANDO SECURITY SERVICE AGENCY, INC. is hereby DISMISSED.
[ G.R. No. 124100, April 01, 1998 ]
PHILTRANCO SERVICE ENTERPRISES, INC., PETITIONER, VS. NATIONAL LABOR RELATIONS COMMISSION AND MR. ROBERTO NIEVA, RESPONDENTS.
Petitioner seeks, in this petition for certiorari under Rule 65, the reversal of the resolution of the National Labor Relations Commission dated November 29, 1995, ordering petitioner to pay private respondent Roberto Nieva back wages and separation pay. The facts of the case are as follows:
Roberto Nieva who was employed as a driver by petitioner Philtranco Services Enterprises, Inc. (hereafter Philtranco) on April 13, 1977, was assigned to the Legaspi City-Pasay City route. On May 15, 1989, Nieva sideswiped an owner-type jeep, damaging the latter’s park light. Unfortunately, the vehicle’s owner turned out to be a PC colonel who arrested Nieva and brought him to Camp Crame where the corresponding criminal complaint was filed against him. Nieva obtained his release from detention by virtue of a bail bond secured by Philtranco. He was suspended by the latter for thirty days effective June 8, 1989. Nieva reported back to work after serving his suspension. A few days after resuming his driving duties, however, he was re-arrested on the ground that his bail bond was fake. Nieva reported the incident to the management of Philtranco. On October 15, 1989, Nieva was advised by Philtranco’s administrative officer, Epifanio Llado, that to avoid re-arrest, he would have to refrain from driving until a settlement could be reached with the jeep owner. From then on, Nieva would report for work only to be told to wait until his case was settled. The case was finally settled on July 20, 1991, with Philtranco paying for the damages to the jeep. Three days thereafter, Nieva reported for work, but he was requested to file a new application as he was no longer considered an employee of Philtranco, allegedly for being absent without leave from October 19 to November 20, 1989.
Aggrieved by this turn of events, Nieva filed a complaint for illegal dismissal and 13th month pay with the NLRC‘s National Capital Region Arbitration Branch in Manila, which docketed the same as NLRC NCR Case No. 03-01891-92. The case was subsequently assigned to Labor Arbiter Cornelio L. Linsangan. Philtranco did not appear at the first four conferences scheduled by the arbiter, prompting the latter to warn Philtranco that it would be declared in default if it failed to appear at the next hearing. Threatened with such an eventuality, Philtranco‘s representative finally appeared. On August 28, 1992, it filed a position paper with motion to dismiss, stating, among other things, that the complaint should have been lodged with the NLRC‘s Regional Arbitration Branch in Legaspi City, not only because Nieva was a resident thereof, but also because the latter was hired, assigned, and based in Legaspi City. The motion to dismiss was denied by the labor arbiter in an order dated January 26, 1993. Nieva then presented his evidence. On August 30, 1993, Philtranco filed a second motion to dismiss, which was likewise denied by the arbiter on the ground that the same did not raise any new arguments. Thereafter, Philtranco presented its evidence to prove that Nieva had abandoned his work, having been absent without leave from October 19 to November 20, 1989. After considering the evidence of the parties, the labor arbiter gave more credence to Nieva‘s version of facts, finding that the latter‘s absences were incurred with Philtranco‘s permission, since he was instructed not to drive until his case was settled. The arbiter dismissed Philtranco‘s allegation that Nieva had abandoned his work, stating that:
“Persistence in pursuing his claim before the Labor Arbiter negates allegation of abandonment (Antonio Evangelista vs. NLRC and Arturo Mendoza, 195 SCRA 603). In the instant case, even before complainant filed his present complaint he had already shown his determination (and) persistence to return to his work as he untiringly kept on reporting for duty. In fact, as ordered by his supervisor in Legaspi City, he even went to respondent’s main office in Pasay City to talk to the operations manager regarding his return to work. There could be no better manifestation of one’s interest to his work than what complainant had done. Definitely, therefore, complainant did not abandon his job.”
Thus, on June 14, 1994, the labor arbiter rendered a decision awarding back wages and separation pay to Nieva. Said decision was seasonably appealed to the NLRC by Philtranco. In a resolution issued on September 15, 1995, the NLRC affirmed the decision of the labor arbiter, granting back wages and separation benefits as follows:
“PREMISES CONSIDERED, WHEREFORE, respondent is directed to pay individual complainant Roberto Nieva both his backwages in the amount of P67,392.00 PESOS and separation benefits in the amount of P33,696.00 PESOS. SO ORDERED.”
Philtranco‘s motion for reconsideration of said resolution having been likewise denied by the NLRC in its resolution of November 29, 1995, Philtranco elevated its case to this Court, raising the following issues: 1. The NLRC committed grave abuse of discretion amounting to lack of jurisdiction when it denied the motion of Philtranco to dismiss complaint based on improper venue; 2. The Commission gravely abused its discretion amounting to lack or in excess of jurisdiction in ruling that Philtranco should be imposed backwages and separation pay; 3. Respondent Commission acted with grave abuse of discretion amounting to lack of jurisdiction as to its findings of facts and when it confirmed the labor arbiter‘s decision that there was no abandonment of work by the private respondent and that the latter showed his persistence to return to work. The petition lacks merit. As regards the first issue, this Court has previously declared that the question of venue essentially pertains to the trial and relates more to the convenience of the parties rather than upon the substance and merits of the case. Provisions on venue are intended to assure convenience for the plaintiff and his witnesses and to promote the ends of justice. In fact, Section 1(a), Rule IV of the New Rules of Procedure of the NLRC, cited by Philtranco in support of its contention that venue of the illegal dismissal case filed by Nieva is improperly laid, speaks of the complainant/petitioner‘s workplace, evidently showing that the rule is intended for the exclusive benefit of the worker. This being the case, the worker may waive said benefit. Furthermore, the aforesaid Section has been declared by this Court to be merely permissive. In Dayag vs. NLRC, this Court held that:
“This provision is obviously permissive, for the said section uses the word ‘may,’ allowing a different venue when the interests of substantial justice demand a different one. In any case, as stated earlier, the Constitutional protection accorded to labor is a paramount and compelling factor, provided the venue chosen is not altogether oppressive to the employer.”
Moreover, Nieva, as a driver of Philtranco, was assigned to the Legaspi City-Pasay City route. Sulpicio Lines, Inc. vs. NLRC is exactly in point. In said case, we held that:
finding no grave abuse of discretion committed by public respondent NLRC. workplace shall be understood as the place or locality where the employee is regularly assigned when the cause of action arose. This assertion repeatedly made by complainant was never refuted by respondent. much less grave abuse. 1989. WHEREFORE. Suffice it to say that these issues raised by Philtranco relate to the veracity of the findings of fact of the NLRC and the labor arbiter. as in this case. Manila being considered as part of Nieva‘s workplace by reason of his plying the Legaspi City-Pasay City route. It should be noted that a petition for certiorari under Rule 65 of the Rules of Court will prosper only if there is a showing of grave abuse of discretion or an act without or in excess of jurisdiction on the part of the National Labor Relations Commission. Such being the case.” Considering that the findings of fact of the Labor Arbiter and the NLRC are supported by evidence on record. As regards the second and third issues. the respondent cannot conveniently contend that the absence of complainant was without permission. for his failure to report for work as directed. Time and again. Philtranco cites. Rule IV of the 1990 NLRC Rules additionally provides that.” From the foregoing. we are of the opinion that Labor Arbiter Arthur L. ‘for purposes of venue. a letter from Philtranco‘s assistant manager to Nieva requiring the latter to report within five days from receipt thereof. as proof of Nieva‘s abandonment of his work. Amansec was correct in concluding that Manila could be considered part of the complainant’s territorial workplace. re-evaluate the credibility of witnesses. 1995 is AFFIRMED and this petition is hereby DISMISSED for lack of merit. We agree. From the foregoing. not to drive his vehicle until the case filed by the PC Colonel arising from the vehicular accident is settled. we have held that the immediate filing of a complaint for illegal dismissal by an employee. the labor arbiter. we hold that the NLRC did not commit abuse of discretion. Likewise. the labor arbiter considered Nieva‘s absence from work as not equivalent to abandonment. nor substitute the findings of fact of an administrative tribunal which has gained expertise in its special field. It is not for this Court to re-examine conflicting evidence. Costs against petitioner. the assailed Resolution of November 29. when it denied Philtranco‘s motion to dismiss Nieva‘s complaint on the ground of improper venue and affirmed the labor arbiter‘s award of back wages and separation pay to the latter. It does not include an inquiry as to the correctness of the evaluation of evidence which was the basis of the labor official or officer in determining his conclusion. it is obvious that the filing of the complaint with the National Capital Region Arbitration Branch was proper. is inconsistent with abandonment. Parenthetically. .’ Since the private respondent’s regular place of assignment is the vessel MV Cotabato Princess which plies the Manila-EstanciaIloilo-Zamboanga-Cotabato route. held that: “Complainant categorically stated in his position paper and Sinumpaang Salaysay that on 15 October 1989 he was instructed by Epifanio Llado. It harps on the alleged paucity of Nieva‘s evidence. Philtranco contends that the NLRC committed grave abuse of discretion when it affirmed the labor arbiter‘s finding of non-abandonment by Nieva of his work. the same must be accorded due respect and finality. two irregularity reports to the effect that Nieva was absent without leave from October 19-31 and November 1-20. in finding that Nieva did not abandon his job.“Section 1. on pain of being dropped from the roll. and a termination letter from Philtranco‘s company lawyer to Nieva. respondent company’s administrative officer. while citing the numerous exhibits marshaled on its behalf.
a complaint for illegal dismissal against FCC (NLRC-NCR Case No. On June 21. The sole issue to be resolved is whether or not the NLRC has jurisdiction over a complaint filed by a corporate executive vice-president for illegal dismissal. Dissatisfied. No. or on February 10. 1987 of respondent National Labor Relations Commission (NLRC) reversing the order dated December 3. VS. Rollo). 1985. the FCC Board approved and adopted a resolution dismissing Lagdameo as Executive Vice-President of the company. 1983. 1-228-85) alleging that his dismissal was done without a formal hearing and investigation and. PETITIONER. 1991 ] FORTUNE CEMENT CORPORATION. The Labor Arbiter granted the motion to dismiss (p. January 24. however. he was elected Executive Vice-President of FCC effective November 1.R. 4.[ G. 63. Rollo). would be "deemed" retained in their respective positions without necessity of yearly reappointments. We find merit in the petition. unless they resigned or were terminated by the Board (p. therefore. 1983. 5. Rollo). National Capital Region. 1-228-85) against petitioner Fortune Cement Corporation (FCC for brevity) for lack of jurisdiction. Lagdameo filed with the National Labor Relations Commission (NLRC). Rollo). at the FCC Board of Directors' regular monthly meeting. without due process (p. 1975. Section 5 of Presidential Decree No. FCC moved to dismiss Lagdameo's complaint on the ground that his dismissal as a corporate officer is a purely intra-corporate controversy over which the Securities and Exchange Commission (SEC) has original and exclusive jurisdiction. The NLRC denied FCC's motion for reconsideration (p. 1975 (p. 4. Rollo). On October 14. 1983. RESPONDENTS. the FCC Board resolved that all of its incumbent corporate officers. including Lagdameo. On August 5. On appeal. Some eight (8) years later. 902-A vests in the SEC original and exclusive jurisdiction over this controversy: . resulting from a board resolution dismissing him as such officer. LAGDAMEO. during a regular meeting. At subsequent regular meetings held on June 14 and 21. 1985 of the Labor Arbiter which dismissed private respondent Antonio M. effective immediately. 79762. 22. Lagdameo is a registered stockholder of FCC. This is a petition for certiorari with prayer to annul the resolution dated May 29. Lagdameo's (Lagdameo for brevity) complaint for Illegal Dismissal (NLRC NCR Case No. NLRC (FIRST DIVISION) AND ANTONIO M. 1987). FCC filed this petition for certiorari. Rollo). the NLRC set aside the Labor Arbiter's order and remanded the case to the Arbitration Branch "for appropriate proceedings" (NLRC Resolution dated April 30. for loss of trust and confidence (p. 3.
respondent NLRC held: "x x x. 16-17. A labor dispute as defined in the Labor Code includes any controversy or matter concerning terms or conditions of employment or the association or representation of persons in negotiating." The dispute between petitioner and Lagdameo is of the class described in Section 5. 1-228-85 be dismissed by respondent NLRC for lack of jurisdiction . hence. partnerships and other forms of associations registered with it as expressly granted under existing laws and decrees. it is clear to Us that a labor dispute had arisen between the appellant and the respondent corporation. 65. “c) Controversies in the election or appointments of directors. hence. appointment and/or removal of an executive vice-president is a prerogative vested upon a corporate board. is an elective corporate office." aptly observed: "The position of 'Executive Vice-President. partnership or association of which they are stockholders.' from which private respondent Lagdameo claims to have been illegally dismissed. "And it must be. Villanueva. a dispute which falls within the original and exclusive jurisdiction of the NLRC. declining to defend public respondent in its pleading entitled "Manifestation in Lieu of Comment. For having been dismissed for alleged loss of trust and confidence. it shall have original and exclusive jurisdiction to hear and decide cases involving: "a) Devices and schemes employed by or any acts. In addition to the regulatory and adjudicative functions of the Securities and Exchange Commission over corporations.D. of the board of directors. "Indeed the election. members. (c) of Presidential Decree No.) The Solicitor General. but more so. between any or all of them and the corporation. changing or arranging the terms and conditions of employment regardless of whether or not the disputants stand in the proximate relations of employers and employees. P. its officers or partners. Underscoring supplied. Rollo. Rollo. not only because it is a practice observed in petitioner Fortune Cement Corporation. respectively.) The Solicitor General pointed out that "a corporate officer's dismissal is always a corporate act and/or an intra-corporate controversy and that nature is not altered by the reason or wisdom which the Board of Directors may have in taking such action. because of an express mandate of law. Predicated on the above facts." (pp.) In reversing the decision of Labor Arbiter Porfirio E. fixing. business associates. par. and between such corporation. partnership or associations. members or associates. He himself acquired that position through election by the corporation's Board of Directors. partnership or association and the state insofar as it concerns their individual franchise or right to exist as such entity. 902-A. It is not disputed that complainant Lagdameo was an employee of respondent Fortune Cement Corporation. 902-A."Section 5. amounting to fraud and misrepresentation which may be detrimental to the interest of the public and/or stockholders." (p. claiming that no investigation was conducted. The Solicitor General recommended that the petition be granted and NLRC-NCR Case No. officers or managers of such corporations. maintaining. between and among stockholders. being then the Executive Vice-President. partners. complainant questioned his dismissal on such ground and the manner in which he was dismissed. trustees. within the original and exclusive jurisdiction of the SEC. “b) Controversies arising out of intra-corporate or partnership relations. there was and is denial of due process. members of associations or organization registered with the Commission. or associates. although he also lost the same as a consequence of the latter's resolution." (Section 5.
having been rendered without jurisdiction.(p. Rollo). . 1-228-85 is affirmed. the relationship of a person to a corporation. The issue of the SEC's power or jurisdiction is decisive and renders unnecessary a consideration of the other questions raised by Lagdameo. this Court. is hereby reversed and set aside. involving as it does. In PSBA vs. The decision of the Labor Arbiter dated December 3. and arbitrary. because the "irregularities" charged against him were not investigated (p. and is in fact a corporate controversy in contemplation of the Corporation Code. Generally speaking. Thus did this Court rule in the case of Dy vs. a person who is not a mere employee but a stockholder and officer. Rollo). Leaño (127 SCRA 778). and that the SEC is without power to grant the reliefs prayed for in his complaint (p. hence. but by the incidents of the relationship as they actually exist. of the corporation. because a closer look at these ." Lagdameo claims that his dismissal was wrongful. The matter of whom to elect is a prerogative that belongs to the Board. illegal. 95.) WHEREFORE. No costs. Rollo). Lagdameo's seeking recourse in the appropriate forum. not the NLRC. in his amended complaint. intimately linked with his relations with the corporation. that even a corporate officer enjoys security of tenure regardless of his rank (p. seeks other reliefs which would seemingly fall under the jurisdiction of the Labor Arbiter. an integral part it might be said. whether as officer or as agent or employee is not determined by the nature of the services performed. ruled that the SEC. has jurisdiction: "This is not a case of dismissal. without prejudice to private respondent Antonio M. and of Tan's not having been elected thereafter." (Underlining ours. Rollo). that the case of PSBA vs. is not a simple labor problem but a matter that comes within the area of corporate affairs and management. and involves the exercise of deliberate choice and the faculty of discriminative selection. 1985 dismissing NLRC-NCR Case No. confronted with a similar controversy.underpayment of salary and non-payment of living allowance . 106. The situation is that of a corporate office having been declared vacant. 85.shows that they are actually part of the perquisites of his elective position. National Labor Relations Commission (145 SCRA 211) which involved a similar situation: "It is of no moment that Vailoces. 97. The question of remuneration. Leaño (supra) cited by the Labor Arbiter finds no application to his case because it is not a matter of corporate office having been declared vacant but one where a corporate officer was dismissed without legal and factual basis and without due process. the questioned Resolution of the NLRC reversing the decision of the Labor Arbiter. that the power of dismissal should not be confused with the manner of exercising the same.
R. NATIONAL LABOR RELATIONS COMMISSION AND PHILIPPINE AIR LINES. David. inefficiency. for 30 years. and related acts or omissions resulting in the concealment or coverup and prevention of the seasonable discovery of anomalous transactions which. by virtue of an election in March 1988 conducted by the Board of Directors. PETITIONER. petitioner and several other senior officers of PAL were administratively charged by Romeo S. petitioner and several other senior officers of PAL were uniformly charged in the three (3) other aforementioned cases of gross incompetence. negligence. January 05. RESPONDENTS. The last time he was elected as such was on October 20. Executive Vice President and Chief Operating Officer for a term of one (1) year and who holds said office until his successor is elected and qualified. Petitioner started his employment with PAL on February 25. Sometime on July 2. pursuant to Section 7. No." "Kasbah/Primavera" and "Middle East." "Robelle. Espino was the Executive Vice President-Chief Operating Officer of private respondent Philippine Airlines (PAL) when his services were terminated sometime in December 1990 by the Board of Directors of PAL as a result of the findings of the panels created by then President Corazon C." "Kasbah/La Primavera. labelled as "Goldair. ESPINO. Article III in relation to Section 1.[ G. failure to observe and/or implement administrative and executive policies. Senior Vice President for Corporate Services and Logistics Group. for their purported involvement in four cases." Except for the conflict of interest charges in the "Robelle" case." "Robelle. 109642-43. Article IV of the Amended ByLaws of PAL. was successively promoted  until he became. . The controversy generated in the instant case once again calls for the resolution of the issue of whether or not the National Labor Relations Commission (NLRC) has jurisdiction over a complaint filed by a corporate Executive Vice President-Chief Operating Officer for illegal dismissal resulting from the termination of his services as such officer by virtue of four (4) separate resolutions of the Board of Directors of Philippine Air Lines (PAL). The undisputed facts are as follows: Petitioner Leslie W. HON. 1990. 1995 ] LESLIE W. dereliction of duty. mismanagement. denominated "Goldair." and "Middle East" which allegedly prejudiced the interests of both PAL and the Philippine Government. as a consequence. mismanagement. VS. Aquino to investigate the administrative charges filed against him and other senior officers for their purported involvement in four cases. caused prejudice to the best interest of PAL and the Government. 1960 as a Traffic and Sales Trainee and. 1989.
the recourse of petitioner Espino should have been addressed. . for reinstatement with backwages. 2) Ordering respondent PAL to pay complainant Leslie Espino the following sums: a) Backwages as of February 1992 . The case was docketed as NLRC Case No. . without qualification or deduction. . . 1992. Aquino. . . . without qualification or deduction from the time of his illegal dismissal up to the date of his actual reinstatement. . . had been charged administratively with various offenses and accordingly suspended. . On February 20.00 (P195. . . . . it became. 1991 in the "Goldair. were deferred by the Board of Directors.Pending investigation by the panels created by then President Corazon C. NCR. . ." "Robelle. to the Office of the President of the Republic of the Philippines. among others. petitioner Espino filed a complaint for illegal dismissal against PAL with the National Labor Relations Commission. . PAL justified the legality of petitioner Espino's dismissal from the service before the Labor Arbiter but questioned the jurisdiction of the NLRC contending that. because the investigating panels were created by President Corazon C. . 00-05-03210-91. . PAL argued that since the Board resolutions on the aforesaid cases cannot be reviewed by the NLRC. . Labor Arbiter Cresencio J. . P10 Million as exemplary damages and attorney's fees. . the Board issued separate resolutions dated January 19. the election or appointment of some senior officers of the company who. during the organizational meeting of the PAL Board of Directors. 1990. .925. . His backwages as of February 29. petitioner and other senior officers of PAL were placed under suspension by the Board of Directors. .000. . a "parallel arbitration unit" which substituted the NLRC. like petitioner. including the one month suspension). . . . praying. . premises considered. During the said organizational meeting.00 x 15 months. . . Feliciano Belmonte was elected Chairman of the Board while Dante Santos was elected as President and Chief Executive Officer. judgment is hereby rendered: 1) Ordering complainant's immediate reinstatement to his former position as Executive Vice President-Chief Operating Officer without loss of seniority rights plus full backwages and other benefits appurtenant thereto. 1992 as computed are in the total sum of P2. 1991 in the "Middle East" case wherein petitioner was considered resigned from the service effective immediately for loss of confidence and for acts inimical to the interests of the company. . P 2. from the time of his illegal dismissal up to the time of his actual reinstatement. Arbitration Branch." cases and another dated August 9. Ramos rendered a decision  finding that petitioner Espino was dismissed without just and valid cause and accordingly ordered his reinstatement to his former position as Executive Vice-President-Chief Operating Officer without loss of seniority rights plus full backwages and other benefits appurtenant thereto." and Kasbah/La Primavera. As such. by way of an appeal. . . The dispositive portion reads: "WHEREFORE. Aquino. . . On October 19.000. On the basis of the findings submitted by the presidential investigating panels. recovery of P50 Million as moral damages.925. . together with the PAL Board of Directors. As a result of his termination.00 . .000. .
. . . . . . . and 1 for domestic) for complainant. . 1992. . . . . . . . on February 25. . the Labor Arbiter issued a writ of execution. . . .192. . . . . . . PAL. .00 4) Granting attorney's feesof 10% of the total monetary award. . .700. . . . . . . . .0 million. 2. filed a motion to quash the writ of execution reiterating its argument that the Securities and Exchange Commission (SEC) and not the NLRC has original and exclusive jurisdiction over the subject matter involving the dismissal or removal of corporate officers. . . and not the NLRC. . PAL filed on March 5. . . . .00 TOTAL P26. . 1. . . . or more specifically. . . . . . . 22. . . .000. . . . . . 1992 a supplemental memorandum on appeal. . . . (1 for international. 1 for regional. . . On February 28. a total of . . . . . .00 c) Midyear and Christmas bonuses equivalent to two (2) months pay . .157. .650. . . .000. for its part. 1992. . . . . . . . .000. petitioner Espino filed a motion for issuance of writ of execution on the ground that the decision of the Labor Arbiter ordering reinstatement is immediately executory even pending appeal pursuant to Article 223 of the Labor Code. . . . . PAL argued that the Labor Arbiter's decision is null and void for lack of jurisdiction over the subject matter as it is the Securities and Exchange Commission. . . . . . . which has original and exclusive jurisdiction over cases involving dismissal or removal of corporate officers. . 390. . . . . .b) Cash equivalent of Annual trip passes on first class. . . Earlier. .50/dollar .00" From the said decision. .00 3) Awarding moral damages to complainant in the sum of P20 million plus exemplary damages of P2.000. . .00 GRAND TOTAL P28. . . . . . . . . . . .507. . . .000. . his spouse. .700. as amended. . . . . . qualified dependent and parents worth approximately US $45. .00 at current rate of exchange P26. . . . . 1992 an appeal with the NLRC and submitted on March 13. . . . . . . . . .000. . . . . .
between and among stockholders. as amended. Labor Arbiter Cresencio Ramos and Sheriff Anam Timbayan were permanently enjoined from enforcing the said alias writ of execution. On May 5. Petitioner Espino. Thereafter. amounting to fraud and misrepresentation which may be detrimental to the interest of the public and/or of the stockholders. the NLRC issued a temporary restraining order enjoining petitioner Espino. members.000. citing Presidential Decree No. Labor Arbiter Ramos denied PAL's motion to quash the writ of execution. its officers or partners. 5 of Presidential Decree No. 902-A. or associates. (2) of the Labor Code. 1992.00 surety bond. later amended to implead the Labor Arbiter. PAL posted the P400. praying for the issuance of a temporary restraining order to enjoin the enforcement of said alias writ of execution. an alias writ of execution was issued. but also his claim for backwages and other benefits and damages. In addition to the regulatory and adjudicative functions of the Securities and Exchange Commission over corporations. partnership or association and the state insofar as it concerns their individual franchise or right to exist as such entity. business associates. PAL then filed on April 23. partnerships and other forms of associations registered with it as expressly granted under existing laws and decrees. (b) Controversies arising out of intracorporate or partnership relations. that PAL is estopped from questioning the jurisdiction of the NLRC. Sheriff Anam Timbayan. 1993. 1992. not only his removal from office. between any or all of them and the corporation. Petitioner Espino filed a motion for reconsideration but the same was denied on January 8. after an exchange of pleadings. On July 31. members.On March 31. partners. Leano. Sec. to hear the illegal dismissal case he filed against PAL as it involves the termination of a regular and permanent employee and the issues in the dispute involved. par. and between such corporation. 1992. from implementing the alias writ of execution issued on April 2. as follows: "SECTION 5. or on April 2. 1992. petitioner filed the instant petition for certiorari contending mainly that it is the NLRC which has jurisdiction under Article 217.000.00 cash or surety bond. partnership or association of which they are stockholders. respectively. members of associations or organizations registered with the Commission.  and consequently reiterated in three (3) other cases  that it is the Securities and Exchange Commission (SEC) and not the NLRC which has original and exclusive jurisdiction over cases involving the removal from employment of corporate officers. 1992 with the NLRC a petition for injunction. or associates. laid down the rule in the case of Philippine School of Business Administration v. 902-A regarding the jurisdiction of the Securities and Exchange Commission provides. their agents and all persons acting under them. it shall have original and exclusive jurisdiction to hear and decide cases involving: (a) Devices or schemes employed by or any acts of the board of directors. We rule that the petition lacks merit. 1992 upon PAL's posting of P400. The Court. the NLRC promulgated a resolution  dismissing the complaint for illegal dismissal for lack of jurisdiction and declaring the nullity of the alias writ of execution.  Dissatisfied. 1992. On April 27. .
partnerships and other forms of associations registered with it as expressly granted under existing laws and decrees. Evidently. Leano. PD 902-A specifically provides: "SEC. which involved an Executive Vice President who was not re-elected to the said position during the election of officers on September 5. He was later considered by the Board as resigned from the service. 5. The matter of petitioner's not being elected to the office of Executive Vice President-Chief Operating Officer thus falls squarely within the purview of Section 5 par. partnerships or associations. 1990. upon investigation and recommendation. Generally speaking. Article IV of the Amended by-Laws of PAL. trustees.  Furthermore. is an elective corporate office under Section 7." A corporate officer's dismissal is always a corporate act and/or an intra-corporate controversy and that nature is not altered by the reason or wisdom which the Board of Directors may have in taking such action. The said corporate office has a fixed term of one (1) year and the one elected shall hold office until a successor shall have been elected and qualified. but is under the management of a Rehabilitation Receiver or Management Committee created pursuant to this Decree. (c) of P. is not determined by the nature of the services performed. the Court emphatically stated: "This is not a case of dismissal. partnerships or associations to be declared in the state of suspension of payments in cases where the corporation. partnership or association possesses sufficient property to cover all its debts but foresees the impossibility of meeting them when they respectively fall due or in cases where the corporation. whether as officer or as agent or employee. In the case of PSBA v. it shall have original and exclusive jurisdiction to hear and decide cases involving: (c) Controversies in the election or appointments of directors. officers or managers of such corporations. partnership or association has no sufficient assets to cover its liabilities. In addition to the regulatory and adjudicative functions of the Securities and Exchange Commission over corporations. were deferred by the Board of Directors in its organizational meeting on October 19. 902-A. supra. together with other senior officers who were similarly charged administratively. Article III in relation to Section 1.D." Indisputably. (d) Petitions of corporations. were resolved by the PAL Board of Directors against him and other senior officers. for reasons earlier stated. trustees. The matter of whom to elect is a prerogative that belongs to the Board. and the said position was later abolished. this intra-corporate ruling places the instant case under the specialized . officers or managers of such corporations. partnerships or associations. but by the incidents of the relationship as they actually exist. He lost that position when his appointment or election as Executive Vice President-Chief Operating Officer. the position of Executive Vice President-Chief Operating Officer from which petitioner Espino claims to have been illegally dismissed. it must be noted that the reason behind the non-election of petitioner to the position of Executive Vice President-Chief Operating Officer arose from.(c) Controversies in the election or appointments of directors. The situation is that of a corporate office having been declared vacant. his involvement in the alleged irregularities in the aforementioned cases which." In intra-corporate matters concerning the election or appointment of officers of a corporation. Section 5. 1981 by the PSBA's newly elected Board of Directors. and involves the exercise of deliberate choice and the faculty of discriminative selection. the relationship of a person to a corporation. or is closely connected with. and that of TAN's not having been elected thereafter.
902-A confers upon the latter ‘absolute jurisdiction. that appeal from the resolution of the Board of Directors of PAL as regards termination of his services.. is not a simple labor problem but a matter that comes within the area of corporate affairs and management. supervision.e. partnerships and associations and those dealing with the internal affairs of such corporations. permit or license to operate is concerned. trustees. SEC. It is not accurate for petitioner to conclude that PAL did not raise the issue of jurisdiction at the initial stages of the case. partnership or association and the public. mislead one into placing the case under the jurisdiction of the Labor Arbiter. Petitioner's reliance on the principle of estoppel to justify the exercise of jurisdiction by the NLRC over the instant complaint is misplaced. intimately linked with his relations with the corporation. other benefits. hence. under the circumstances. partnership or association and its stockholders. An error of this nature. thus: "The question of remuneration. a person who is not a mere employee but a stockholder and officer. such as those affecting the corporation. its directors. it is still within the competence and expertise of the SEC to resolve all matters arising from or closely connected with all intra-corporate disputes. at first glance. et al.. (c) between the corporation. the issue of consequential damages may just as well be resolved and adjudicated by the SEC. i. PAL did in fact question the jurisdiction of the Labor Arbiter. partners. involving as it does. between the corporation. partnership or association and the state in so far as its franchise. v. an integral part. and control over all corporations. of the corporation. partners or associates themselves. In Dy v. officers and shareholders. is to the Office of the President." The fact that petitioner sought payment of his backwages. et al.. partnerships or associations. the controversy must pertain to any of the following relationships: (a) between the corporation. It is in aid of this office that the adjudicative power of the SEC must be exercised. for. NLRC. partnerships and associations with the end in view that investment in these entities may be encouraged and protected. Otherwise stated. members. Section 3 of PD No. et al. in order that the SEC can take cognizance of a case. and (d) among the stockholders. Undoubtedly. as well as moral and exemplary damages and attorney's fees in his complaint for illegal dismissal will not operate to prevent the SEC from exercising its jurisdiction under PD 902-A. a closer examination reveals that they are actually part of the perquisites of his elective position.  thus: "This grant of jurisdiction must be viewed in the light of the nature and function of the SEC under the law." The Court has likewise ruled in the case of Andaya v. and is in fact a corporate controversy in contemplation of the Corporation Code. who are grantees of primary franchise and/or license or permit issued by the government to operate in the Philippines x x x. confronted with the same issue ruled. The jurisdiction of the SEC has likewise been clarified by this Court in the case of Union Glass and Container Corporation. could not justify . while it may be predicated on a different ground.competence and expertise of the SEC. partnerships or associations. it might be said. Thus the law explicitly specified and delimited its jurisdiction to matters intrinsically connected with the regulation of corporations.' The principal function of the SEC is the supervision and control over corporations. or officers. While the affirmative reliefs and monetary claims sought by petitioner in his complaint may. and their activities pursued for the promotion of economic development. Abadia  that in intra-corporate matters.  the Court.
without prejudice to petitioner's seeking relief. the instant petition for certiorari is DISMISSED for lack of merit. Again. Thus. In the case of Dy v. Ramirez  reiterated that the decision of a tribunal not vested with appropriate jurisdiction is null and void. SO ORDERED. NLRC. finding no grave abuse of discretion on the part of NLRC in dismissing the complaint for illegal dismissal.  The principle of estoppel cannot be invoked to prevent this Court from taking up the question of jurisdiction. the Court in Southeast Asian Fisheries Development Center-Aquaculture Department v. The resolution of the National Labor Relations Commission dated July 31. WHEREFORE. the Court. supra. NLRC  restated the rule that the invocation of estoppel with respect to the issue of jurisdiction is unavailing because estoppel does not apply to confer jurisdiction upon a tribunal that has none over the cause of action. in the proper forum. but only before the NLRC. 1992 dismissing the complaint for illegal dismissal for lack of jurisdiction is AFFIRMED. . The instant case does not provide an exception to the said rule. which has been apparent on the face of the pleadings since the start of the litigation before the Labor Arbiter. citing the case of Calimlim v. In fine.petitioner's insistence that PAL did not raise the issue of jurisdiction at the outset. if so minded. the issue of the SEC's jurisdiction is settled and the Court finds it unnecessary to dwell further on other questions raised by petitioner. the instant petition must be dismissed. It is well-settled that jurisdiction over the subject matter is conferred by law and the question of lack of jurisdiction may be raised at anytime even on appeal.
petitioner was placed under preventive suspension. Aggrieved by the action taken by the PAL board of directors. His termination from the service was spawned by a letter sent some time in June 1990 by a member of PAL's board of directors. Petitioner Ramon C. ("PAL"). of 14." A similar conclusion was arrived at by the PAL board of directors with regard to petitioner in the "Goldair" case where he.. when his services were terminated on 19 December 1990 in the aftermath of the muchpublicized "two-billion-peso PALscam. 00-06-03684-91) for illegal . among other things.6 million Australian dollars. had been charged with various offenses. then Solicitor General Francisco Chavez. failure to observe and/or implement administrative and executive policies" and with the "concealment. Belmonte. VS. an overpayment by PAL to Autographics in the amount of around P12 million. No.. RESPONDENTS. Inc." Lozon started to work for the national carrier on 23 August 1967 and. imprudence.R. a certified public accountant. he had been administratively charged by Romeo David. were charged with like "offenses" that had caused PAL's defraudation by Goldair. Lozon. negligence. the board deferred action on the election or appointment of some senior officers of the company who. Jr. mismanagement. PAL's general sales agent in Australia. for twentythree years. Santos was designated president and chief executive officer. labeled "Goldair. Petitioner was forthwith considered "resigned from the service x x x for loss of confidence and for acts inimical to the interests of the company. together with six other PAL officials." "Autographics. during which occasion Feliciano R. filed with the National Labor Relations Commission ("NLRC") in Manila a complaint (docketed NLRC-NCR Case No. was a Senior Vice-President-Finance of private respondent Philippine Airlines." Pending the investigation of these cases by a panel constituted by then President Corazon C. Inc. Senior Vice-President for Corporate Services and Logistics Group. Aquino. LOZON. 107660." "Big Bang of 1983" and "Middle East. the PAL board of directors issued two resolutions relative to the investigation conducted by the presidential investigating panel in the "Autographics" and "Goldair" cases. steadily climbed the corporate ladder until he became one of its vice-presidents. INC. In the organizational meeting of the PAL board of directors on 19 October 1990. On 18 January 1991. for his (Lozon) purported involvement in four cases. PETITIONER. along with three other officials.. like petitioner. petitioner. NLRC (SECOND DIVISION) AND PHILIPPINE AIRLINES. Chavez demanded an investigation of twenty-three irregularities allegedly committed by twenty-two high-ranking PAL officials. with "gross inefficiency. to PAL President Dante Santos. Among these officials was petitioner. or cover-up and prevention of the seasonal discovery of the anomalous transactions" had with Autographics.[ G. January 02. on 26 June 1991. 1995 ] RAMON C. was elected chairman of the board while Dante G." petitioner was charged. dereliction of duty. In "Autographics. resulting in.
the NLRC rendered a decision (in NLRC NCR Case No. once again. and attorney's fees equivalent to ten percent (10%) of all the foregoing awards. PAL appealed the decision of the labor arbiter by filing a memorandum on appeal.632. plus moral damages of P40 Million.500. Further.000. 1992 already amounted to P2. On 24 July 1992. PAL filed a motion to quash the writ which petitioner promptly opposed. should be deemed to have substituted for the NLRC. asseverating that the charges leveled against him were purely administrative in nature that could have well been ventilated under the grievance procedure outlined in PAL's Code of Discipline. PAL averred. exclusive of fringes. petitioner questioned the authority of the panel to conduct the investigation. all the foregoing premises being considered. "SO ORDERED. Christmas Bonus." A day after promulgating the decision. On 17 March 1992. was within the exclusive and original jurisdiction of the Securities and Exchange Commission ("SEC"). In the "Middle East" case. in legal contemplation. . 00261-92). No decision was rendered by NLRC on this petition.. to reinstate the complainant to his former position with all the rights. positing the theory that since the investigating panel was constituted by then President Aquino. with backwages and "fringe benefits such as Vacation leave. privileges.00.000.00 as moral damages. The decretal portion of the decision read: "WHEREFORE. petitioner's recourse should have been to appeal his case to the Office of the President. Labor Arbiter Jose G.000. the jurisdiction of the NLRC but this time on the ground that the issue pertaining to the removal or dismissal of petitioner. suspended petitioner for six (6) months for his supposed involvement in the anomalous administration of commercial marketing arrangements in which PAL had lost an estimated P120 million. a corporate officer. said panel.. Petitioner interposed a partial appeal praying for an increase in the amount of moral and exemplary damages awarded by the labor arbiter. exemplary damages of P10 Million and reasonable attorney's fees. Inc. Petitioner's motion for reconsideration was denied by the NLRC." On 09 August 1991. de Vera rendered a decision ruling for petitioner. car expenses. PAL filed a petition for injunction with the NLRC (docketed NLRC IC Case No. 00-06-03684-91) dismissing the case on the strength of PAL's new argument on the issue of jurisdiction. It questioned at the same time the jurisdiction of the NLRC. along with the PAL board of directors.00 as exemplary damages. After the labor arbiter had denied the motion to quash. On the other hand. 13th month pay. which as of March 15. the PAL board of directors also held petitioner as "resigned from the company" for loss of confidence and for acts inimical to the interests of the company in the "Big Bang of 1983" case for his alleged role in the irregularities that had precipitated the write-down (write-off) of assets amounting to P553 million from the books and financial statements of PAL. on the same date. etc. PAL defended the validity of petitioner's dismissal before the Labor Arbiter.000. P1. Thus. the PAL board of directors. the labor arbiter issued a writ of execution. the respondent company is ordered to pay complainant as follows: P5. The instant petition for certiorari filed with this Court raises these issues: (a) Whether or not the NLRC has jurisdiction over the illegal dismissal case. and (b) on the assumption that the SEC has that jurisdiction. Sick leave. judgment is hereby rendered ordering the respondent Philippine Airlines. Meanwhile. whether or not private respondent is estopped from raising NLRC's lack of jurisdiction over the controversy. became "a parallel arbitration unit" which. trip pass entitlement. assailing.dismissal and for reinstatement. and benefits appertaining thereto plus backwages. Medical Expenses.
 Dy v. employed by directors. partners. as well as for moral and exemplary damages and attorney's fees. officers." With regard to the matter of damages. In addition to the regulatory and adjudicative functions of the Securities and Exchange Commission over corporations. car expenses. as well as d. partnerships and associations or to their franchises. particularly in respect of devices and schemes. earlier so ascribed as the "two-billion-peso PALscam." Petitioner himself admits that "vice presidents are senior members of management. medical expenses. officers or managers of such corporations. and/or other stockholders. in a complaint filed before the Regional Trial Court. Intra-corporate and partnership relations between or among the corporation. a corporate controversy in contemplation of the Corporation Code. including their elections or appointments. and c. and other benefits. In Fortune Cement Corporation v. partnerships or associations. Presidential Decree No. 5.We sustain NLRC's dismissal of the case. business associates. he would serve for a term of one year and until his successor shall have been elected and qualified. b. placed under the management of a Rehabilitation Receiver or Management Committee. in intra-corporate matters concerning the election or appointment of officers of a corporation. or members of registered firms. Petitions for suspension of payments filed by corporations. the decree provides: "SEC." that inevitably places the case under the specialized competence of the SEC and well beyond the ambit of a labor arbiter's normal jurisdiction under the general provisions of Article 217 of the Labor Code. Petitioner contends that the jurisdiction of the SEC excludes its cognizance over claims for vacation and sick leaves. State and corporate affairs in relation to the legal existence of corporations. Petitioner. in Andaya v. 902-A confers on the SEC original and exclusive jurisdiction to hear and decide controversies and cases involving a. 13th month pay. or possessing insufficient assets to cover their liabilities and said entities are upon petition or motu proprio. partnerships and other forms of associations registered with it as expressly granted under existing laws and decrees. Christmas bonus. Specifically.Finance Group by PAL's board of directors at its organizational meeting held on 20 October 1989 pursuant to the By-laws. NLRC categorically states that the question of remuneration being asserted by an officer of a corporation is "not a simple labor problem but a matter that comes within the area of corporate affairs and management. and is in fact. trustees. partnerships or associations possessing sufficient property to cover all their debts but which foresee the impossibility of meeting them when they respectively fall due. did not get to be re-elected thereafter." Not the least insignificant in the case at bench is that petitioner's dismissal is intertwined with still another intra-corporate affair. under which." whose designations are no longer than just by means of ordinary promotions. for reasons already mentioned. it shall have original and exclusive jurisdiction to hear and decide cases involving: "(c) Controversies in the election or appointments of directors. Investors and corporate affairs. In his own case. Abadia where. petitioner has been elected to the position of Senior Vice-President . officers and stockholders and partners. such as fraudulent practices. the Court has quoted with approval the Solicitor General's contention that "a corporate officer's dismissal is always a corporate act and/or intra-corporate controversy and that nature is not altered by the reason or wisdom which the Board of Directors may have in taking such action. the president and general manager of the Armed Forces and Police Savings and Loan Association ("AFPSLAI") questioned his ouster from . NLRC.
the stewardship of the association. et al. if the lower court had jurisdiction. such. If it had no jurisdiction.D. nevertheless. Rule 9. and may not be conferred by consent of the parties or by estoppel’ (5 C. 103200. This defense may be interposed at any time. officers. the parties are not barred. Rules of Court). shareholders. 73. trustees. in intra-corporate matters such as those affecting the corporation. for the same ‘must exist as a matter of law. and the question of lack of jurisdiction may be raised at anytime even on appeal. Court of Appeals. No. controversies within the purview of Section 5 of P. in dismissing the petition assailing the order of the trial court which ruled that SEC. this Court said: "Lack of jurisdiction over the subject matter of the suit is yet another matter. Petitioner maintains that PAL is estopped. held: "’The operation of the principle of estoppel on the question of jurisdiction seemingly depends upon whether the lower court actually had jurisdiction or not. No. its directors.J.R. this Court. The error could not alter the fact that PAL did question even then the jurisdiction of both the labor arbiter and the NLRC. While it may be said that the same corporate acts also give rise to civil liability for damages. as this kind of jurisdiction is conferred by law and not within the courts. for instance. and does not depend upon the will of the parties." (Underscoring supplied. G. indeed. 93-94). Here. on the issue of estoppel. The amended complaint impleads herein respondents who. 101 Phil." As early as the initial stages of the controversy PAL had already raised the issue of jurisdiction albeit mistakenly at first on the ground that petitioner's recourse was an appeal to the Office of the President. let alone the parties. from assailing such jurisdiction. as that the court had no jurisdiction. The rule that jurisdiction is conferred by law. However. this Court. by use of civil law terms and phrases. moreover. it does not follow that the case is necessarily taken out of the jurisdiction of the SEC as it may award damages which can be considered consequential in the exercise of its adjudicative powers. had jurisdiction over the case. from questioning the jurisdiction of the NLRC considering that PAL did not hold the dispute to be intracorporate until after the case had already been brought on appeal to the NLRC. has no bearing thereon. the party who induced it to adopt such theory will not be permitted.S. to themselves determine or conveniently set aside. in their capacity as directors of AFPSLAI. to assume an inconsistent position--that the lower court had jurisdiction. the issue of consequential damages may just as well be resolved and adjudicated by the SEC. the principle of estoppel applies. Whenever it appears that the court has no jurisdiction over the subject matter. during appeal (Roxas vs. not the regular courts. In the first place. 861-863). allegedly convened an illegal meeting and voted for the reorganization of management resulting in petitioner's ouster as corporate officer. 902-A must not be so constricted as to deny to the SEC the sound exercise of its expertise and competence in resolving all closely related aspects of such corporate disputes. the action shall be dismissed (Section 2. that jurisdiction over a subject matter is conferred by law.’" . and the case was heard and decided upon a given theory. incidental issues that properly fall within the authority of a tribunal may also be considered by it to avoid multiplicity. on appeal. 37 Phil.. 31 August 1994. 957) or even after final judgment (Cruzcosa vs. Rafferty. but the case was tried and decided upon the theory that it had jurisdiction. Consequently. Judge Concepcion. Such is understandable. on appeal. Casiano (111 Phil. there would not be much basis to indicate that PAL was "effectively barred by estoppel. It has long been the established rule. In the recent case of La Naval Drug Corporation vs. 146). although unsuccessfully. Besides. In People vs.. has said: "The allegations against herein respondents in the amended complaint unquestionably reveal intra-corporate controversies cleverly concealed.) We here reiterate the above holdings for. of actions.
1990.. dated April 26. We need not delve into whether or not PAL's conduct does indeed smack of opportunism. RESPONDENTS. and the corporate secretary of private respondent Pamana Golden Care Medical Center Foundation. petitioner was allegedly informed personally by Dr. and appointing the latter and Dr. . petitioner filed a complaint for illegal dismissal and non-payment of wages. if circumstances permit. Petitioner averred that she thereafter received a copy of said board resolution. the herein petition for certiorari is DISMISSED. Benjamin Donasco as acting Medical Director and acting Hospital Administrator. TABANG.Petitioner points to "PAL's scandalous duplicity" in questioning the jurisdiction of the NLRC in this particular controversy while upholding it (NLRC's jurisdiction) in "Robin Dui v. more than that. 1993. her dismissal is an intra-corporate controversy which falls within the exclusive jurisdiction of the Securities and Exchange Commission (SEC). but the payment thereof was allegedly stopped in November. Inc.R. 1995. Philippine Airlines" (Case No. The records show that petitioner Purificacion Tabang was a founding member. a member of the Board of Trustees. the Board of Trustees issued a memorandum appointing petitioner as Medical Director and Hospital Administrator of private respondent’s Pamana Golden Care Medical Center in Calamba. On October 30. NLRC AND PAMANA GOLDEN CARE MEDICAL CENTER FOUNDATION. Although the memorandum was silent as to the amount of remuneration for the position.00) from private respondent. No. affirming in toto the order of the labor arbiter. 1994. INC. As medical director and hospital administrator. suffice it to say that Robin Dui is entirely an independent and separate case and. [ G.. Respondent corporation moved for the dismissal of the complaint on the ground of lack of jurisdiction over the subject matter. 121143. VS. January 21. petitioner claims that she received a monthly retainer fee of five thousand pesos (P5. which dismissed petitioner’s complaint for illegal dismissal with money claims for lack of jurisdiction. dated June 26. Laguna. 1993.000. it is not before us in this instance. 1991. hence. It argued that petitioner’s position as Medical Director and Hospital Administrator was interlinked with her position as member of the Board of Trustees. a recourse in the proper forum. PETITIONER. respectively. WHEREFORE. petitioner was tasked to run the affairs of the aforesaid medical center and perform all acts of administration relative to its daily operations. allowances and 13th month pay before the labor arbiter. 1997 ] PURIFICACION G. No costs. 00-4-20267) pending before that Commission. the Board of Trustees passed a resolution relieving her of her position as Medical Director and Hospital Administrator. without prejudice to petitioner's seeking. Ernesto Naval that in a special meeting held on April 30.a non-stock corporation engaged in extending medical and surgical services.On June 6. and the decision appealed from is AFFIRMED. This is a petition for certiorari which seeks to annul the resolution of the National Labor Relations Commission (NLRC). On May 1. 1993.
vice-president. Section 2(i).” The president.Petitioner opposed the motion to dismiss. Article I thereof states that one of the powers of the Board of Trustees is “(t)o appoint a Medical Director. respondent NLRC affirmed the dismissal of the case on the additional ground that “the position of a Medical Director and Hospital Administrator is akin to that of an executive position in a corporate ladder structure. other offices are sometimes created by the charter or by-laws of a corporation. She claimed that there is no intracorporate controversy involved since she filed the complaint in her capacity as Medical Director and Hospital Administrator. 1990. 902-A. Comptroller/Administrator. trustees. officers or managers of corporations. or the board of directors may be empowered under the by-laws of a corporation to create additional offices as may be necessary. jurisdiction over the same is vested in the SEC. and modern corporation statutes usually designate them as the officers of the corporation. applies in the present dispute. which provides that the SEC exercises exclusive jurisdiction over controversies in the election or appointment of directors. partnerships or associations. He ruled that the case falls within the jurisdiction of the SEC. Aggrieved by the decision. Section 5(c) of Presidential Decree No. the determination of the rights of petitioner and the concomitant liability of private respondent arising from her ouster as a medical director and/or hospital administrator. Accordingly. In the case at bar. she is deemed an officer of the corporation. pursuant to Section 5 of Presidential Decree No. and not in the . to be without merit.Similarly. It has been held that an “office” is created by the charter of the corporation and the officer is elected by the directors or stockholders. however. Chiefs of Services and such other officers as it may deem necessary and prescribe their powers and duties.The charges against herein private respondent partake of the nature of an intra-corporate controversy. considering that herein petitioner. Perforce.On the other hand. 1994. a medical director and a hospital administrator are considered as corporate officers under the by-laws of respondent corporation. We agree with the findings of the NLRC that it is the SEC which has jurisdiction over the case at bar. or as an employee of private respondent. secretary and treasurer are commonly regarded as the principal or executive officers of a corporation. Petitioner’s motion for reconsideration was treated as an appeal by the labor arbiter who consequently ordered the elevation of the entire records of the case to public respondent NLRC for appellate review.However. which are corporate offices. petitioner’s removal from the said position was an intra-corporate controversy within the original and exclusive jurisdiction of the SEC. the labor arbiter issued an order dismissing the complaint for lack of jurisdiction.” hence. petitioner filed the instant petition which we find. is an intra-corporate controversy subject to the jurisdiction of the SEC. Contrary to the contention of petitioner. was appointed by respondent corporation’s Board of Trustees in its memorandum of October 30. On April 26. 902-A. contending that her position as Medical Director and Hospital Administrator was separate and distinct from her position as member of the Board of Trustees. unlike an ordinary employee. On appeal. an “employee”usually occupies no office and generally is employed not by action of the directors or stockholders but by the managing officer of the corporation who also determines the compensation to be paid to such employee.
The health care plan is called Pamana Golden Care Plan and the holders are called Pamana Golden Care Card Holders or. Thus. and therefore interlinked with. this would not operate to effectively remove this case from the jurisdiction of the SEC. a close scrutiny thereof shows that said claims are actually part of the perquisites of his position in.. his relations with the corporation. while respondent Pamana Golden Care Medical Center Foundation.’” WHEREFORE.It is stated in the memorandum of petitioner that Pamana. is a stock and profit corporation selling pre-need plan for education. a person who is not a mere employee but a stockholder and officer. vs. A corporate officer’s dismissal is always a corporate act. Inc.. etc. non-profit corporation. Office of the Minister of Labor and Employment. et al. Inc. It is an admitted fact that herein petitioner is a retained physician of Pamana. Inc. the questioned resolution of the NLRC is hereby AFFIRMED. With regard to the amount of P5. vs. et al. Moreover. Although the payments were considered advances to Pamana Golden Care. at most. or an intra-corporate controversy.. et al. Inc. there is no evidence to show that the Pamana Golden Care stated in the vouchers refers to herein respondent Pamana Golden Care Medical Center Foundation. is not a simple labor problem but a matter that comes within the area of corporate affairs and management and is in fact a corporate controversy in contemplation of the Corporation Code. the allegation of petitioner that her being a member of the Board of Trustees was not one of the considerations for her appointment is belied by the tenor of the memorandum itself. and the nature is not altered by the reason or wisdom with which the Board of Directors may have in taking such action. There is no distinction.000. .00 was a valid claim against respondent corporation.Labor Arbiter or the NLRC. Inc.. among others. it might be said.” and this cannot be construed other than in reference to her position or capacity as a corporate trustee. for professional fees and/or retainer fees earned for her treatment of Pamana Golden Care card holders. qualification.. Inc. Moreover.00 formerly received by herein petitioner every month. The vouchers submitted by petitioner show that the said amount was paid to her by PAMANA.. a stock corporation which is separate and distinct from herein private respondent. an integral part. the same cannot be considered as compensation for her services rendered as Medical Director and Hospital Administrator. Pamana Members.. pension and health care.NLRC. the Court said: ‘(t)he question of remuneration involving as it does. in her complaintfiled before the Regional Trial Court of Calamba. said vouchers can only be considered as proof of payment of retainer fees made by Pamana. In Dy. herein petitioner is asking. we ruled that “(a)lthough the reliefs sought by Chavez appear to fall under the jurisdiction of the labor arbiter as they are claims for unpaid salaries and other remunerations for services rendered. of the corporation. simply. without prejudice to petitioner’s taking recourse to and seeking relief through the appropriate remedy in the proper forum. Calamba branch. Pamana Golden Care is a division of Pamana. Also. It states: “We hope that you will uphold and promote the mission of our foundation.000. whose patients are holders of the Pamana Golden Care Card. an intra-corporate controversy is one which arises between a stockholder and the corporation. even assuming that the monthly payment of P5. In the case of Cagayan de Oro Coliseum. nor any exemption whatsoever. is a non-stock. Inc. The provision is broad and covers all kinds of controversies between stockholders and corporations. to herein petitioner as a retained physician of Pamana Golden Care. In fact. Inc.
Rufino R. respondent Labor Arbiter also issued a subpoena duces tecum to submit the same books and documents. petitioners moved for the dismissal of TAN' s complaint. On September 5. February 24. and petitioners. and at the same time elected a new set of officers. the Philippine School of Business Administration (PSBA). 2145). Quezon City. NCR-9-20-81) (the Labor Case. 1981. NCR-9-20-81) involving private respondent-complainant.[ G. 1981 and September 5. a domestic corporation. TAN filed with the National Labor Relations Commission (NLRC) (National Capital Region) a complaint for Illegal Dismissal against petitioners alleging that he was "summarily. Tan (TAN). LEANO OF THE NLRC AND RUFINO R. 1981. 1981. Before the NLRC. TAN was not reelected as Executive Vice-President. in brief). TAN lodged before the Securities and Exchange Commission (SEC) another complaint against petitioners essentially questioning the validity of the PSBA elections of August 1. books and records. TAN also filed a one-million-peso damage suit against petitioners before the then Court of First Instance of Rizal. 1981. And. TAN. SEC issued a subpoena duces tecum commanding the production of corporate documents. L. No. 1981. three members were elected to fill vacancies in the seven-man body.R. the Board declared all corporate positions vacant except those of the Chairman and President. On October 15. On October 13. for illegal and oppressive removal (Civil Case No. illegally. on September 28. irregularly and improperly removed from his position as Executive Vice-President x x x without cause. 1984 ] PHILIPPINE SCHOOL OF BUSINESS ADMINISTRATION VS. This Petition for Certiorari questions the jurisdiction of respondent Labor Arbiter over the present controversy (No. On September 21. investigation or notice" (NLRC Case No. 1981. . On September 16. also during a regular meeting. 1981. invoking the principle against split jurisdiction. he was a Director and the Executive Vice President enjoying salaries and allowances. Q-33444). at the PSBA Board of Directors' regular meeting. 1981. LABOR ARBITER LACANDOLA S. RESPONDENTS. On August 1. 1981. and majority of its Directors. Before September 5. and of his "ouster" as Executive Vice-President (SEC Case No.58468. TAN is one of the principal stockholders of PSBA.
enjoining respondent Labor Arbiter from proceeding in any manner with the Labor Case. An intracorporate controversy would call for SEC jurisdiction. TAN invoked the same allegations in his complaint filed with the SEC. Basically. the question is whether the election of directors on August 1. 1981 of the three directors was in contravention of the PSBA By-Laws providing that any vacancy in the Board shall be filled by a majority vote of the stockholders at a meeting specially called for the purpose. and the director or directors so chosen hold office for the unexpired term. This is the crux of the question that TAN has raised before the SEC. for he was dismissed suddenly and summarily without cause in violation of his constitutional rights to due process and security of tenure. and at the ensuing election of officers. The officers receive such salaries or compensation as the Board of Directors may fix. may choose a successor or successors who shall hold office for the expired term of his predecessor. by a majority vote. Relevant and pertinent it is to note that the PSBA is a domestic corporation duly organized and existing under our laws. 1981 that all corporate positions were declared vacant in order to effect a reorganization. TAN was not reelected as Executive Vice-President. petitioners availed of this Petition contending mainly that: “1. Any vacancy in the Board of Directors filled by a majority vote of the subscribed capital stock entitled to vote at a meeting specially called for the purpose. it was at the regular Board Meeting of September 5. and subsequently gave due course to the Petition. 1981 and the election of officers on September 5. He prays that his dismissal be declared illegal and that his reinstatement be ordered with full backwages and without loss of other benefits. Even in his position paper before the NLRC. The issuance by the respondent labor arbiter of a subpoena duces tecum was likewise without jurisdiction especially if considered in the light of procedural and substantial requirements therefor such that it is imperative that the supervising authority of this Honorable Court should be exercised to prevent a substantial wrong and to do substantial justice. disqualification. 1981 was tainted with irregularity on account of the presence of illegally elected directors without whom the results could have been different. 2145) rendered a Partial Decision annulling the election of the three directors and . General management is vested in a Board of seven directors elected annually by the stockholders entitled to vote. the Board meeting on September 5. The By-Laws likewise provide that should the position of any officer of the corporation become vacant by reason of death. the Board of Directors. The respondent labor arbiter illegally assumed jurisdiction over the complaint for 'Illegal Dismissal' because the failure of the private respondent to be reelected to the corporate position of Executive Vice-President was an intracorporate question over which the Securities and Exchange Commission had already assumed jurisdiction. And. 1981. that of the NLRC. he concludes. who serve until the election and qualification of their successors. So much so. who is elected by the Board of Directors from their own number. The jurisdiction of the SEC vis-a-vis the NLRC is in issue.On October 22. TAN alleged that the election on August 1. 1981. falling within the jurisdiction of the NLRC. We issued a Temporary Restraining Order. the SEC (Case No. which resulted in TAN's failure to be re-elected. that three directors were elected to fill vacancies. that on December 17. were validly held. “2. A labor dispute. 1981. among them. resignation. or otherwise. It was at a Board regular monthly meeting held on August 1." TAN counter-argues that his sole and exclusive cause of action is illegal dismissal. Thus. therefore. the Executive Vice-President. Corporate officers are provided for. 1981.
partnership or association and the state insofar as it concerns their individual franchise or right to exist as such entity. “b) Controversies arising out of intra-corporate or partnership relations. but by the incidents of the relationship as they actually exist. respectively. officers or managers of the PSBA. NCR-9-20-81 for lack of jurisdiction. members. The matter of whom to elect is a prerogative that belongs to the Board. business associates. With the foregoing conclusion. and involves the exercise of deliberate choice and the faculty of discriminative selection. its officers or partners. The correctness of said conclusion is not for us to pass upon in this case. and between them and the corporation. is not determined by the nature of the services performed. Generally speaking. partnerships or associations. partners. the relation between and among its stockholders. and (3) declaring the Temporary Restraining Order heretofore issued permanent. . these matters fall within the jurisdiction of the SEC. TAN was present at said meeting and again sought the issuance of injunctive relief from the SEC. the relationship of a person to a corporation. and between such corporation. No costs. between any or all of them and the corporation. Private respondent also contends that his "ouster" was a scheme to intimidate him into selling his shares and to deprive him of his just and fair return on his investment as a stockholder received through his salary and allowances as Executive Vice-President. WHEREFORE. members of associations or organizations registered with the Commission. the controversy is intra-corporate in nature. trustees. it follows that the issuance of a subpoena duces tecum by the Labor Arbiter will have to be set aside. between and among stockholders. or associates. fundamentally. of the board of directors." This is not a case of dismissal. The situation is that of a corporate office having been declared vacant. Vis-a-vis the NLRC. judgment is hereby rendered (1) ordering respondent Labor Arbiter to dismiss the complaint in NLRC Case No. “c) Controversies in the election or appointments of directors. Presidential Decree No. partnership or association of which they are stockholders. officers or managers of such corporations.ordered the convening of a stockholders' meeting for the purpose of electing new members of the Board. (2) nullifying the subpoena duces tecum issued by him in said case. 902-A vests in the Securities and Exchange Commission: "x x x original and exclusive jurisdiction to hear and decide cases involving: “a) Devices or schemes employed by or any acts. and of TAN's not having been elected thereafter. It revolves around the election of directors. whether as officer or as agent or employee. The foregoing indubitably show that. members or associates. amounting to fraud and misrepresentation which may be detrimental to the interest of the public and/or stockholders.
respondents’ father gave it a valuation of only P3 10. Saura. namely.625. 1979. P42. The petition for review on certiorari seeks to annul and set aside the decision of the Court of Appeals and the resolution denying reconsideration of said decision. Helen G. respondents executed a deed of exchange of the two parcels of land for 23.635. SAURA. Saura.. recovery of corporate assets and funds.00. Millan were the absolute owners of two parcels of land located at Governor Forbes. Millan are the legitimate children of Ramon Sr. Inc.375. The balance was made to appear as the contribution of petitioners in the corporation: P42.00 each. 136159. Jr. and Carmencita S. initiated the incorporation of Villa Governor Forbes. by his first and second wife. AND CARMENCITA S. 1999 ] MACRINA S. and P19. for annulment of subscription. with his children. his wife Macrina and their children Amelita and Romeo. Sr. Saura. Jr. and Villa Governor Forbes. They may be related as follows: The parties in this case are related to one another by blood. Sr. respondents Ramon G.00 for Macrina. were also assigned shares in the amount of P19. and Carmencita filed a complaint with the Securities and Exchange Commission (SEC) against their father Ramon E. Jr. . On August 29.00 for Amelita. During the pendency of the proceedings. Sr. 1986. ROMEO S. AND VILLA GOVERNOR FORBES.000.000. On the other hand. Manila. She was joined by co-petitioners. SAURA. evidenced by Transfer Certificate of Title (TCT) Nos. Though the property was appraised by bank examiners to have a value of about P2. MILLAN.00 each as paid shares of stock. 135150 in the name of VGFI. They were the children of the late Ramon E. PETITIONERS. and Carmencita were credited with P73. Petitioner Macrina Saura is Ramon Sr.[ G. SAURA.’s third wife. SAURA. Respondents Ramon G. AMELITA S. The Court of Appeals upheld the jurisdiction of the regional trial court over the case pending between the parties. JR. No.. Saura. VS.00.625. September 01. respondents Ramon. The antecedent facts are undisputed.750 shares of stocks of VGFI.000. RAMON G. On August 8. 1979.375. Amelita Saura-Vergara and Romeo S.. INC. 135148 and 135149. on May 15. each containing an area of seven hundred (700) square meters..00 for Romeo.500. her children by Ramon Sr. Inc. respondents Ramon. and Carmencita S.. Sampaloc. Saura. In 1979. and third wife as stockholders. Saura. the deed of exchange was registered with the Register of Deeds of Manila resulting in the cancellation of respondents’ certificates of title and the issuance of TCT No.00. Norma T. Saura and Raymundo Y. Saura. Of this amount.. respondents’ father. Ramon E. RESPONDENTS.. Jr.R. (VGFI) a corporation duly organized and existing under Philippine laws. Saura. respectively. Their other siblings. On March 25. valued at P237.
the Court of Appeals upheld the order of the trial court and dismissed the petition for lack of merit. with prayer for receivership ex parte. 1997. cancellation of title. the SEC panel of hearing officers promulgated a decision approving a compromise agreement between respondent Carmencita S. 1990. Sandalwood has no intra-corporate relationship with petitioners or respondents. accounting. They insist that the Securities and Exchange Commission has original and exclusive jurisdiction over the subject matter and nature of the complaint. The validity of the deed of exchange is “intricately connected with the sale” of the real property to Sandalwood by petitioners Amelita and Romeo. Hence. Despite the pendency of the SEC case. the appellate court maintained that the SEC has no jurisdiction over the subject matter of the civil action for annulment of the sale. the trial court denied the motion to dismiss and held that: (1) there was no forum shopping because the cases pending with the SEC and with the regional trial court involved different issues. Saura. died. of VGFI. declaration of nullity of deed of exchange. In its decision promulgated on November 28. 1995. the SEC en banc reversed such finding and remanded the case to the hearing panel for the immediate resolution of the case. the court deferred the resolution of the issue of prescription and lack of cause of action until after trial. 1995. Amelita and Romeo filed with the trial court a motion to dismiss the complaint based on: (1) forum shopping. 1995. . on April 11. With respect to respondent Ramon G. making him not a stockholder of the corporation. On December 11. 1995.. Manila. Millan and petitioners. Jr. 1995. (5) lack of cause of action. 221008 to Sandalwood. and (4) Sandalwood Realty Development Corporation’s claim that respondents were not the real party in interest was without basis because they stand to benefit or be injured by the result of the suit. petitioners sold the disputed real property to Sandalwood Realty Development Corporation (Sandalwood) for a consideration of P15. (6) estoppel. (3) prescription. On September 8. On May 11. a civil case for annulment of sale. respondents Ramon Jr. The sale was done without the knowledge and consent of respondents Ramon. Though it agreed with petitioners that the trial court had no jurisdiction insofar as the deed of exchange was concerned for being an agreement between VGFI and the respondents who are stockholders of the corporation. petitioners Macrina. the trial court denied petitioners’ separate motions for reconsideration.000. However. Jr. However. Sr. Eventually. Ramon.000. acting in their capacities as president and vice president..00. the Register of Deeds of Manila issued TCT No. (3) there was no litis pendentia because no identity of parties and issues exists. and Carmencita. recovery of possession. (4) lack of jurisdiction. and Carmencita filed with the Regional Trial Court. On August 26. damages. On January 26. petitioners elevated the case to the Court of Appeals via certiorari contending that the trial court gravely erred when it denied the motion to dismiss. there was no intra-corporate dispute.1992. (2) the civil case was not barred by res judicata since the judgment on compromise of the SEC did not result in a complete and final settlement of the claims which the parties may have against each other. the panel of hearing officers dismissed the case upon finding that his shares had been declared delinquent and subsequently sold at public auction. 1996. respectively. This was because the validity of the deed of exchange was not the only matter brought before the trial court. On October 29. and (7) litis pendentia. (2) res judicata.
Saura as President and Romeo S. it shall have original and exclusive jurisdiction to hear and decide cases involving: “(a) Devices or schemes employed by or any acts of the board of directors.” Hence. The Deed of Sale (Annex “E.” Section 5 of Presidential Decree 902-A sets forth the jurisdiction of the SEC as follows: “ Sec. 5. partners. Saura as Vice President. They contend that the main issue involved in the complaint filed with the trial court is the validity of the deed of exchange executed between petitioner VGFI and respondents. On the other hand. justifying the suspension of the civil case with the trial court. which is an intra-corporate matter falling within the original and exclusive jurisdiction of the SEC. That will be resolved by the proper court. Petitioners contend that the main issue to be resolved is the validity of the deed of exchange. There is no showing that Sandalwood has any intra-corporate relationship with the petitioners or the private respondents. petitioners Macrina. members.” Petition) indicates that the sale was signed for VGFI by petitioner Amelita S. petitioners advance the same assignment of errors they made in their petition with the appellate court. we rely on the sound judicial principle that jurisdiction over the subject matter is conferred by law and is determined by the allegations of the complaint irrespective of whether the plaintiff is entitled to all or some of the claims asserted therein. or associates. however. partnership or association of which they are . respondents do not dispute that the validity of the deed of exchange is in issue. In this petition. between and among stockholders. In essence. partnerships and other forms of associations registered with it as expressly granted under existing laws and decrees. Hence the questioned sale between VGFI and Sandalwood is beyond the adjudicative power of the SEC. Amelita and Romeo. they contend that this issue is “intricately connected with the sale of the realty to Sandalwood. The resolution of the petition hinges on the determination of the validity of the sale of realty to a third party not involved in the intra-corporate dispute. What we are examining here is which as between the Regional Trial Court and the Securities and Exchange Commission has the competent jurisdiction over the questioned sale. In addition to the regulatory and adjudicative functions of the Securities and Exchange Commission over corporations. this petition for review on certiorari. Petitioners allege that this issue poses a prejudicial question to the case pending with the trial court. the Court of Appeals held that: “ Such sale purportedly made by the VGFI to Sandalwood Real Estate & Development Corporation is entirely a different matter. amounting to fraud and misrepresentation which may be detrimental to the interest of the public and/or of stockholders. “To determine which body has jurisdiction over the present controversy. one that is intra-corporate in nature since it involved a transaction between the respondents-stockholders and the corporation. claim that the Court of Appeals gravely abused its discretion when it upheld the jurisdiction of the trial court and dismissed their petition. “(b) Controversies arising out of intra-corporate or partnership relations. in favor of another corporation. business associates. its officers or partners. members of associations or organizations registered with the Commission.” It is their position that this complexity removed the dispute from the ambit of SEC’s jurisdiction and vested it on the trial court. we shall not deal with the merits of the questioned sale of real property from VGFI to Sandalwood. between any or all of them and the corporation.Specifically. In the present case.
beyond the jurisdiction of the SEC. questioning the validity of the deed of exchange. and Carmencita. This would also relieve the regular courts of a substantial number of cases that would otherwise swell their already clogged dockets. This jurisdiction is determined by a concurrence of two elements: (1) the status or relationship of the parties. partnership or association and the State insofar as it concerns their individual franchise or right to exist as such entity. and between such corporation. respectively.  Thus. it cannot be joined as party-defendant in the SEC case as to do so would violate the rule on jurisdiction. Hence. respondents Ramon. In the present case. or associates. Respondents’ complaint for annulment of the sale is an ordinary civil action. partnership or association of which they are stockholders. partnership or association possesses sufficient property to cover all its debts but foresees the impossibility of meeting them when they fall due or in cases where the corporation. This action must await the final ruling of the issue raised in SEC Case No. . members.corporate relationship with respondents Ramon. which has no intra. Otherwise. the civil case with the trial court is directed against the buyer of the disputed property. trustees. 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. respectively.”  Since Sandalwood has no intra-corporate relationship with the respondents. and between such corporation. the controversy is an ordinary civil litigation beyond the ambit of the limited jurisdiction of the Securities and Exchange Commission. partnerships or associations to be declared in the state of suspension of payments in cases where the corporation. “(c) Controversies in the election or appointment of directors. and (2) the nature of the question that is the subject of their controversy. Jr. respondents’ complaint for annulment of sale can only succeed if final judgment is rendered in SEC Case No. to insure a more knowledgeable solution of the problems submitted to them. between any or all of them and the corporation. the resolution of which is a logical antecedent of the issue involved in the civil action against Sandalwood.” In the complaint filed with the trial court. annulling the deed of exchange executed in favor of VGFI. 2968. partnerships or associations. respondents’ complaint against Sandalwood for the annulment of the sale of realty was properly filed before the regular court. and Carmencita seek the annulment of the sale to Sandalwood. officers or managers of such corporations.” “The grant of jurisdiction to the SEC must be viewed in the light of its nature and function under the law. partnership or association. 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. members or associates. “(d) Petitions of corporations. there is no necessity to resort to the expertise of the SEC.”  “The first element requires that the controversy must arise out of intra-corporate or partnership relations between and among stockholders.stockholders. partnership or association has no sufficient assets to cover its liabilities but is under the management of a rehabilitation receiver or management committee created pursuant to this Decree. “It is true that the trend is towards vesting administrative bodies like the SEC with the power to adjudicate matters coming under their particular specialization. But as expedient as this policy may be. 2968. Therefore. partnership or association and the State in so far as it concerns their individual franchises. Petitioners are only impleaded as necessary parties being the officers of the seller-corporation. members or associates. Jr. Ultimately. The second element requires that the dispute among the parties be intrinsically connected with the regulation of the corporation.
” Though it might seem that the first requisite was present in the cases pending with the SEC and the trial court. (b) identity of rights asserted and relief prayed for. the defense of litis pendentia in one case is a bar to the others. . subject matter. damages with prayer for receivership ex parte. cancellation of title.R.identity of subject matter and cause of action. recovery of possession. Forbes property. amount to res judicata in the action under consideration. (d) and there must be between the first and second actions identity of parties. (c) it must be a judgment on the merits.” In light of the foregoing discussion.’ Another case elucidates the consequence of forum. the appellate court correctly ruled that the civil case for annulment of sale of realty is properly lodged with the regular court. The appellate court found that there was no forum shopping. will. promulgated on November 28. we MODIFY the decision of the Court of Appeals in CA-G.Having resolved the issue of jurisdiction. said requisites also constitutive of the requisites for auter action pendant or lis pendens. In relation to the contention that the judgment on compromise between respondent Carmencita and petitioners barred her from filing the antecedent civil case with the trial court due to res judicata. the relief being founded on the same facts. and. (b) the court which rendered judgment had jurisdiction over the parties and the subject matter. res judicata exists when all the following elements are present: (a) the former judgment must be final. a final judgment in one would constitute res judicata and thus would cause the dismissal of the rest. The case pending with the SEC involved an issue different from the case pending with the trial court. there is forum-shopping when. between an action pending before this Court and another one. there exist: ‘(a) identity of parties. It was not even a complete disposition of the controversies between the parties because the appellate court found that “the compromise agreement did not entirely dispose of the parties’ controversy. Petitioners claim that respondents were guilty of forum shopping. we go into the discussion of other issues raised in the petition. and (c) the identity of the two preceding particulars is such that any judgment rendered in the other action. and cause of action. accounting. we find that the other requisites were not present. There was no identity in the rights asserted and the relief prayed for. The case pending with the SEC was for the annulment of subscription and recovery of corporate assets and funds. declaration of nullity of deed of exchange. As held in the recent case of Banaga vs. and where a final judgment in one case will amount to res judicata in the other. However. particularly in connection with the Gov. The complaint pending with the trial court relates to the annulment of sale. “Forum-shopping exists where the elements of litis pendentia are present.shopping: ‘*W+here a litigant sues the same party against whom another action or actions for the alleged violation of the same right and the enforcement of the same relief is/are still pending. the appellate court was right in finding that res judicata did not exist. such that any resolution in the first would not amount to res judicata in the other. Thus. or at least such parties as represent the same interests in both actions. 39557. SP No. Court of Appeals. it failed to meet all the elements of res judicata -. We sustain the Court of Appeal’s finding. WHEREFORE. There is no question that the SEC has jurisdiction over the question involved. regardless of which party is successful.
1996. hence. private respondent also refused to abide by their agreement and continued collecting the dues from the members of his association despite several demands to desist. PETITIONER. We DIRECT the Securities and Exchange Commission to proceed with the hearing and disposition of SEC Case. private respondent protested and. alleging fraud. AND ANTONIO ANDA This petition for certiorari seeks to annul and set aside the decision of the Regional Trial Court. claiming that jurisdiction was lodged with the Securities and Exchange Commission (SEC). The facts are undisputed. 1995 and both petitioner and private respondent ran for president. Private respondent moved to dismiss the complaint for lack of jurisdiction. The MCTC denied the motion on February 9. 1996. ELIEZER R. Pampanga to dismiss Civil Case No. 1996. 1995. PRESIDING JUDGE. No. The trial court found the dispute to be intracorporate. Branch 16. in August 1995. which are suspended until final outcome of the SEC case. BR. petitioner won. Branch 58. Private respondent filed a petition for certiorari before the Regional Trial Court. petitioner and private respondent agreed to consolidate their respective associations and form the Unified Mabalacat-Angeles Jeepney Operators' and Drivers' Association. DE LOS SANTOS.R. Petitioner was thus constrained to file the complaint to restrain private respondent from collecting the dues and to order him to pay damages in the amount of P25. It denied reconsideration on May 31. petitioner and private respondent also agreed to elect one set of officers who shall be given the sole authority to collect the daily dues from the members of the consolidated association. refused to recognize the results of the election. Pampanga. Lozano filed Civil Case No. 58. June 19. Petitioner claims that: "THE RESPONDENT JUDGE ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION AND SERIOUS ERROR OF LAW IN CONCLUDING THAT THE SECURITIES AND EXCHANGE COMMISSION . 1214 for lack of jurisdiction. Inc. HON. Inc. 1214 accordingly.00. On December 19. It denied reconsideration on March 8. elections were held on October 29. ANGELES CITY. [ G. 1214 for damages against respondent Antonio Anda before the Municipal Circuit Trial Court (MCTC). 125221. (UMAJODA). subject to the jurisdiction of the SEC. Hence this petition. Manila.000. Mabalacat and Magalang.1997. in order to facilitate the proceedings in Civil Case No. 95-73823 pending with the Regional Trial Court. Inc. Mabalacat and Magalang. RTC. and ordered the MCTC to dismiss Civil Case No. No. (KAMAJDA) while respondent Anda was the president of the Samahang Angeles-Mabalacat Jeepney Operators' and Drivers' Association. petitioner Reynaldo M. (SAMAJODA). 2968 with all deliberate dispatch. Pampanga. VS. Angeles City.00 and attorney's fees of P500. 1997 ] REYNALDO M. Angeles City which ordered the Municipal Circuit Trial Court. Branch 58. LOZANO. Petitioner alleged that he was the president of the Kapatirang Mabalacat-Angeles Jeepney Drivers' Association. upon the request of the Sangguniang Bayan of Mabalacat.
respectively. members.HAS JURISDICTION OVER A CASE OF DAMAGES BETWEEN HEADS/PRESIDENTS OF TWO (2) ASSOCIATIONS WHO INTENDED TO CONSOLIDATE/MERGE THEIR ASSOCIATIONS BUT NOT YET [SIC] APPROVED AND REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION. however. partnership or association or deal with the internal affairs of the corporation. (b) Controversies arising out of intracorporate or partnership relations. The second element requires that the dispute among the parties be intrinsically connected with the regulation of the corporation. amounting to fraud and misrepresentation which may be detrimental to the interest of the public and/or of the stockholders. the principal function of the SEC is the supervision and control of corporations. (c) Controversies in the election or appointment of directors." The jurisdiction of the Securities and Exchange Commission (SEC) is set forth in Section 5 of Presidential Decree No. respectively. There is no intracorporate nor partnership relation between petitioner and private respondent. After all. partnership or association. members of associations or organizations registered with the Commission. partnership or association of which they are stockholders. partnership or association has no sufficient assets to cover its liabilities. The controversy between them arose out of their plan to consolidate their respective jeepney drivers' and operators' associations into a single common association. 902A. members or associates. but is under the management of a Rehabilitation Receiver or Management Committee created pursuant to this Decree. still a proposal. This unified association was. partnership or association possesses sufficient property to cover all its debts but foresees the impossibility of meeting them when they respect very fall due or in cases where the corporation. (d) Petitions of corporations. or associates. and between such corporation. its officers or partners. x x x [T]he Securities and Exchange Commission [has] original and exclusive jurisdiction to hear and decide cases involving: (a) Devices or schemes employed by or any acts of the board of directors. and their activities pursued for the promotion of economic development. members or associates. and between such corporation. trustees. partnership or association and the state insofar as it concerns their individual franchise or right to exist as such entity. between and among stockholders. partnership or association and the State in so far as it concerns their individual franchises. This jurisdiction is determined by a concurrence of two elements: (1) the status or relationship of the parties." The grant of jurisdiction to the SEC must be viewed in the light of its nature and function under the law. partners. business associates. partnerships or associations to be declared in the state of suspension of payments in cases where the corporation. partnerships or associations. partnership or association of which they are stockholders. Consolidation becomes effective not upon mere agreement of the members but only upon . or associates. members. The first element requires that the controversy must arise out of intracorporate or partnership relations between and among stockholders. officers or managers of such corporations. between any or all of them and the corporation. and (2) the nature of the question that is the subject of their controversy. Section 5 reads as follows: "Section 5. It had not been approved by the SEC. partnerships and associations with the end in view that investments in these entities may be encouraged and protected. between any or all of them and the corporation. neither had its officers and members submitted their articles of consolidation in accordance with Sections 78 and 79 of the Corporation Code.
there is no corporation by estoppel. 1996 and the order dated May 31. The new consolidated corporation comes into existence and the constituent corporations dissolve and cease to exist. The SEC therefore has no jurisdiction over the complaint. Branch 58. but these associations are two separate entities. No costs. The dispute between petitioner and private respondent is not within the KAMAJDA nor the SAMAJODA. It applies when persons assume to form a corporation and exercise corporate functions and enter into business relations with third persons. 1996 of the Regional Trial Court. is satisfied that the consolidation of the corporations is not inconsistent with the provisions of the Corporation Code and existing laws. upon processing and examining the articles of consolidation. . It is between members of separate and distinct associations. any act or omission of the parties. IN VIEW WHEREOF. 1214. Corporation by estoppel is founded on principles of equity and is designed to prevent injustice and unfairness. The doctrine of corporation by estoppel advanced by private respondent cannot override jurisdictional requirements. The KAMAJDA and SAMAJODA to which petitioner and private respondent belong are duly registered with the SEC. The Municipal Circuit Trial Court of Mabalacat and Magalang. the petition is granted and the decision dated April 18.issuance of the certificate of consolidation by the SEC. Jurisdiction is fixed by law and is not subject to the agreement of the parties. Petitioner and private respondent have no intracorporate relation much less do they have an intracorporate dispute. enlarged or diminished by. neither can it be conferred by the acquiescence of the court. who therefore know that it has not been registered. it issues a certificate of consolidation which makes the reorganization official. Angeles City are set aside. Where there is no third person involved and the conflict arises only among those assuming the form of a corporation. It cannot be acquired through or waived. When the SEC. Pampanga is ordered to proceed with dispatch in resolving Civil Case No.
009364-95. to collect checks drawn against overseas banks payable in foreign currency and to ensure the collection of foreign bills or checks purchased. as mentioned at the outset. tasked with the duties. VS. in the amount of P420. 2001 ] PRUDENTIAL BANK AND TRUST COMPANY.000. NLRC. dated October 15. The Court of Appeals reversed and set aside the resolution of the National Labor Relations Commission (NLRC) in NLRC NCR CA No.R. including the signing of transmittal letters covering the same. Private respondent sought reconsideration which. however.00 (P15.000. REYES. the respondent is also ordered to pay complainant separation pay equivalent to one month salary for every year of service. Prior to her dismissal. 30607 and of its Resolution. Aggrieved. private respondent Reyes held the position of Assistant Vice President in the foreign department of the Bank. the dispositive portion of which reads: "WHEREFORE. was denied by the NLRC in its Resolution of 28 July 1998. fringe benefits and attorney's fees filed by Clarita Tan Reyes against Prudential Bank and Trust Company (the Bank) before the labor arbiter. The subject petition was referred to the Court of Appeals for appropriate action and disposition per resolution of this Court dated November 25.000 x 28 mos. private respondent commenced on October 28. Martin Funeral Homes vs.R. SP No. 141093. Attorney's fees equivalent to ten (10%) percent of the total award should likewise be paid by respondent.). SO ORDERED. dated December 6." Not satisfied. which is a complaint for illegal suspension and illegal dismissal with prayer for moral and exemplary damages. in accordance with the ruling in St. Before the Court is a petition for review on certiorari of the Decision.).00 x 36 mos. a petition for certiorari before the Supreme Court. 00-06-03462-92. CLARITA T. In addition.A. PETITIONER.000. reversed the Labor Arbiter's decision in its Resolution dated 24 March 1997. finding the dismissal of complainant to be without factual and legal basis. After proceedings duly undertaken by the parties. 1998. the Court of Appeals adopted the following antecedent facts leading to Reyes's dismissal as summarized by the NLRC: . In lieu of reinstatement.[ G.00 (P15. No. the Bank appealed to the NLRC which. judgment was rendered by Labor Arbiter Cornelio L. the respondent should also pay complainant profit sharing and unpaid fringe benefits. reversing and setting aside the labor arbiter's decision and dismissing for lack of merit private respondent's complaint. 1999 of the Court of Appeals in C. 1998. Linsangan. The case stems from NLRC NCR Case No. among others. gratuity.-G. In its assailed decision. judgment is hereby rendered ordering the respondent bank to pay her back wages for three (3) years in the amount of P540. February 20. 1999 denying petitioner's motion for reconsideration of said decision. RESPONDENT.
Atty. the president of the Bank issued a memorandum to the complainant informing her of the findings of the auditors and asked her to give her side. 27-29). d) In June 1989. 22 to 22-A and 23 to 23-A). 7 and 25. TSN. b) After Ms. advised complainant to send the checks for collection despite the lapse of fifteen (15) months. 1991.70 corresponding to the face value of the checks. f) About fifteen (15) months after the HSBC checks were received by the Bank. 4 June 1993. Thus. complainant instructed her to withdraw the same for the purpose of changing the addressee thereon from American Express Bank to Bank of Hawaii (ibid. complainant authorized the crediting of the account of Filipinas Tyrom in the amount of P4. As the complainant failed to attend and participate in the formal investigation conducted by the Committee on May 24. She then requested complainant to sign the said transmittal letters (Exhibits 1. responsibilities and functions. On the following day.00. 4 June 1993. Pablo Magno. TSN. In reply. in the amount of US$115. her duties. 1991.000. including the responsibility over the two (2) HSBC checks. the said checks were discovered in the course of an audit conducted by the Bank's auditors. No. The Committee's findings were: `a) The two (2) HSBC checks were received by the Foreign Department on 6 April 1989. p. the new transmittal letters remained unsigned. 1989. e) When asked by Ms. Joven then returned to complainant for the latter to sign the new transmittal letters. Ms. were turned over to another remittance clerk. she was constrained to make a general denial of any misfeasance or malfeasance on her part and asked that a formal investigation be made. On March 8. (See Exhibits 5 to 5-B). complainant told Ms. All other transmittal letters are in fact signed by complainant. Joven to just hold on to the letters and checks and await further instructions (ibid. despite due notice. complainant stated that in view of the refusal of the Bank that she be furnished copies of the pertinent documents she is requesting and the refusal to grant her a reasonable period to prepare her answer. Singapore. 011728-7232-146. the Committee proceeded with its hearings and heard the testimonies of several witnesses. Ms. However.780.102.) under a special collection scheme (Exhibits 4 and 5 to 5-B). drawn by the Sanford Trading against Hongkong and Shanghai Banking Corporation. a transmittal letter was prepared by Ms. in the amount of US$109. In a subsequent letter. complainant requested for an extension of one week to submit her explanation. Hence. 1991. pp. Ms. . as it is complainant who gives her instructions directly concerning the transmittal of foreign bills purchased. Castillo about the two (2) HSBC checks. a remittance clerk then assigned in the Foreign Department. Joven delivered the transmittal letters and the checks to the Accounting Section of the Foreign Department. Ms. were not sent out for collection to Hongkong Shanghai Banking Corporation on the alleged order of the complainant until the said checks became stale. and No.00. (Exhibits 6. c) After complying with complainant's instruction. Cecilia Joven. On the same day. the Bank's legal counsel. 42-52). Jurong Branch.). Analisa Castillo (Exhibit 14. TSN. pp. 011730-7232-146. dated March 14. in favor of Filipinas Tyrom. The Bank created a committee to investigate the findings of the auditors involving the two checks which were not collected and became stale. 42). Joven relayed to the latter complainant's instruction (Exhibit 14. Joven was transferred to another department. for the purpose of sending out the two (2) HSBC checks for collection."The auditors of the Bank discovered that two checks.650. 11 March 1993. received by the Bank on April 6. to the president.
1991. however. in a letter the text of which is quoted in full: `Dear Mrs. Mr. 11728 and 11730 of Hongkong and Shanghai Banking Corporation in the total amount of US$224. h) On 10 July 1990.650. the Fact Finding Committee which was created to investigate the commission and/or omission of the acts alluded therein. she was illegally dismissed. the Senior VicePresident. Senior Vice President. she alleged that it would be self-serving for the respondent to state that she was found guilty of gross misconduct in deliberately withholding the clearing of the two dollar checks. You tried to influence the decision of Atty. As a matter of fact. Renato Santos and falsely informed the latter that Atty. the same being acts of serious misconduct in the performance of your duties resulting in monetary loss to the Bank. your services are terminated effective immediately. Bank legal counsel. In view thereof. complainant is liable to pay moral and exemplary damages and attorney's fees." .' To date. Magno advised that a demand letter be sent instead. Santos had asked you to seek. Magno. the advice given by the legal counsel of the Bank which Mr. the HSBC checks were finally sent for collection. the vice president and the auditors of the Bank. complainant alleged that the real reason for her dismissal was her filing of the criminal cases against the bank president. you even relayed a false advice which delayed further the sending of the two checks for collection.' In her position paper. Furthermore. You deliberately withheld from Mr. Magno's advice from her superior.00 by giving instructions to the collection clerk not to send the checks for collection. the Board of Directors of the Bank resolved not to re-elect complainant any longer to the position of assistant president pursuant to the Bank's By-laws. Reyes: After a thorough investigation and appreciation of the charges against you as contained in the Memorandum of the President dated March 8. had been credited with their peso equivalent. had just cause for terminating her services. and 3. has found the following: 1. Accordingly.g) Complainant. In relation thereto. respondent argues that there were substantial bases for the Bank to lose its trust and confidence on the complainant and. You have deliberately held the clearing of Checks Nos. thereby further delaying the collection of the HSBC checks. they were returned for the reason `Account closed. the value of said checks have not been paid by Filipinas Tyrom. 1991. which as payee of the checks. These findings have given rise to the Bank's loss of trust and confidence in you. Hence. She further alleged that she was not afforded due process as she was not given the chance to refute the charges mentioned in the letter of dismissal. complainant was informed of her termination of employment from the Bank by Senior Vice President Benedicto L. Santos. when the said checks were finally sent to clearing after the lapse of 15 months from receipt of said checks. such filing not being a valid ground for her dismissal.' After a review of the Committee's findings. On the other hand. for filing the clearly unfounded suit against the respondent`s officers. 2. but were returned on 16 July 1990 for the reason `account closed' (Exhibits 2-A and 3-A). Likewise. Pablo P. Santos. the Board has resolved not to re-elect you to the position of Assistant Vice President of the Bank. deliberately withheld Atty. by asking him to do something allegedly upon instructions of a Senior Vice President of the Bank or else lose his job when in truth and in fact no such instructions was given. you refused to heed the advice of the Bank's legal counsel to send the checks for collection. On July 19. your monetary and retirement benefits are forfeited except those that have vested in you. Moreover. accordingly. In view thereof.
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED." In sum. II. an elective position under the corporate by-laws and her non- ." Hence. In lieu thereof. and 3. EVEN ASSUMING ARGUENDO THAT RESPONDENT WAS ENTITLED TO BACKWAGES. 2. the decision appealed from is hereby REVERSED and SET ASIDE. the Bank's recourse to this Court contending in its memorandum that: "IN SETTING ASIDE THE DECISION DATED 24 MARCH 1997 AND THE RESOLUTION DATED 28 JULY 1998 OF THE NLRC AND REINSTATING WITH MODIFICATION THE DECISION DATED 20 JULY 1995 OF LABOR ARBITER CORNELIO L. THERE WAS SUBSTANTIAL EVIDENCE OF RESPONDENT'S MISCONDUCT JUSTIFYING THE BANK'S LOSS OF TRUST AND CONFIDENCE ON (sic) HER. To pay attorney's fee equivalent to ten (10%) percent of the total award. WHICH DECISION RESPONDENT HERSELF SOUGHT TO EXECUTE. petitioner seeks refuge behind the argument that the dispute is an intra-corporate controversy concerning as it does the non-election of private respondent to the position of Assistant Vice-President of the Bank which falls under the exclusive and original jurisdiction of the Securities and Exchange Commission (now the Regional Trial Court) under Section 5 of Presidential Decree No. EVEN ASSUMING ARGUENDO THAT THE NLRC HAS JURISDICTION. LINSANGAN. To pay petitioner full backwages and other benefits from July 19. the Court of Appeals reinstated the judgment of the labor arbiter with modification as follows: "WHEREFORE. THE HONORABLE COURT OF APPEALS ERRED IN AWARDING UNLIMITED AND UNQUALIFIED BACKWAGES THEREBY GOING FAR BEYOND THE LABOR ARBITER'S DECISION LIMITING THE SAME TO THREE YEARS. In effect. the resolution of this petition hinges on (1) whether the NLRC has jurisdiction over the complaint for illegal dismissal. 1991 up to the finality of this judgment. and (3) whether the amount of back wages awarded was proper. in the light of the foregoing. 902-A. IN VIEW OF THE FOLLOWING: I. petitioner contends that complainant is a corporate officer. IT IS THE SEC (NOW THE REGIONAL TRIAL COURT) AND NOT THE NLRC WHICH HAS ORIGINAL AND EXCLUSIVE JURISDICTION OVER CASES INVOLVING THE REMOVAL FROM OFFICE OF CORPORATE OFFICERS. On the first issue.The Court of Appeals found that the NLRC committed grave abuse of discretion in ruling that the dismissal of Reyes is valid. III. SO ORDERED. (2) whether complainant Reyes was illegally dismissed. More specifically. judgment is hereby rendered ordering respondent Bank as follows: 1. To pay petitioner separation pay equivalent to one (1) month salary for every year of service in lieu of reinstatement.
As Assistant Vice President of the foreign department of the Bank. As earlier stated. her services may be terminated only for a just or authorized cause. it is no wonder then that the Bank endeavored to the very end to establish loss of trust and confidence and serious misconduct on the part of private respondent but. and attacking it for lack of jurisdiction when adverse." As far as the records before this Court reveal however. The bank's contention that she merely holds an elective position and that in effect she is not a regular employee is belied by the nature of her work and her length of service with the Bank. While it is true that jurisdiction over the subject matter of a case may be raised at any time of the proceedings. It appears that private respondent was appointed Accounting Clerk by the Bank on July 14. she is entitled to security of tenure. From that position she rose to become supervisor. as a regular employee." Undeterred. In this regard. the bank said nothing about jurisdiction. to no avail. she was appointed Assistant Vice-President which she occupied until her illegal dismissal on July 19. that is. The Bank participated in the proceedings from start to finish. It has been stated that "the primary standard of determining regular employment is the reasonable connection between the particular activity performed by the employee in relation to the usual trade or business of the employer. Hence. as will be discussed later." As Assistant Vice-President of the Foreign Department of the Bank she performs tasks integral to the operations of the bank and her length of service with the bank totaling 28 years speaks volumes of her status as a regular employee of the bank. not because of the mode or even the reason for hiring them. it never questioned the proceedings on the ground of lack of jurisdiction. Even before the Court of Appeals. among others. the NLRC and the Court of Appeals. this rule presupposes that laches or estoppel has not supervened. Here. she rose from the ranks and has been employed with the Bank since 1963 until the termination of her employment in 1991. It was only when the Court of Appeals ruled in favor of private respondent did it raise the issue of jurisdiction. only if favorable. the Bank appealed to the NLRC. not for purposes of questioning jurisdiction but to establish that private respondent's tenure was subject to the discretion of the Board of Directors and that her non-reelection was a mere expiration of her term. When the decision of the Labor Arbiter was adverse to it. 1963. The Bank actively participated in the proceedings before the Labor Arbiter. including the signing of transmittal letters covering the same. the principle of estoppel lies. "an employee is regular because of the nature of work and the length of service. This being in truth a case of illegal dismissal. Petitioner Bank can no longer raise the issue of jurisdiction under the principle of estoppel. a party may be estopped or barred from raising the question of jurisdiction for the first time in a petition before the Supreme Court when it failed to do so in the early stages of the proceedings. This argument will not do either and must be rejected. . The Bank insists that private respondent was elected Assistant Vice President sometime in 1990 to serve as such for only one year. 1991. Then in 1982. It filed its position paper with the Labor Arbiter. to collect checks drawn against overseas banks payable in foreign currency and to ensure the collection of foreign bills or checks purchased. Commission on the Settlement of Land Problems. Bañaga vs. In fine. petitioner Bank has consistently asserted in all its pleadings at all stages of the proceedings that respondent held the position of Assistant Vice President. is most enlightening. she is tasked. an elective position which she held by virtue of her having been elected as such by the Board of Directors.election is an intra-corporate controversy cognizable by the SEC invoking lengthily a number of this Court's decisions. The Court therein stated: "This Court has time and again frowned upon the undesirable practice of a party submitting his case for decision and then accepting the judgment. Additionally. the Bank also contends that estoppel cannot lie considering that "from the beginning. such an assertion was made only in the appeal to the NLRC and raised again before the Court of Appeals. When the NLRC decided in its favor.
vs. Respondent Bank's charge of deliberate withholding of the two dollar checks finds no support in the testimony of Atty. if same was really given to her by complainant. that is: she was instructed by complainant to hold the release of subject checks. if carried out. After painstakingly examining the testimonies of Ms. The right of an employer to dismiss employees on the ground that it has lost its trust and confidence in him must not be exercised arbitrarily and without just cause. It will be observed that the testimonies of the bank's other witnesses. It was incumbent upon Ms. Jocson.This brings us to the second issue wherein the Bank insists that it has presented substantial evidence to prove the breach of trust on the part of private respondent warranting her dismissal. it must be substantial and not arbitrary. the rule that proof beyond reasonable doubt is not required to terminate an employee on the charge of loss of confidence and that it is sufficient that there is some basis for such loss of confidence. It bears emphasizing that respondent Bank's witnesses merely corroborate Joven's testimony. Joven is more credible. In this regard. that she is guilty of conflict of interest that she waived her right to due process for not attending the hearing. the court must adopt the testimony which it believes to be true (U. vs. therefore. Moreover. Joven while testifying on the witness stand and was not impressed by her assertions. Inc. Joven's allegation even deepens as we consider the fact that when the non- . Settled is the rule that when the conclusions of the Labor Arbiter are sufficiently substantiated by the evidence on record. For loss of trust and confidence to be valid ground for an employee's dismissal. Dante Castor and Antonio Ragasa pertaining to the non-release of the dollar checks and their corresponding transmittal letters were all anchored on what was told them by Ms. On cross examination. NLRC.00 falls short of the requisite proof to warrant petitioner's dismissal. Ms. On this point. We quote pertinent portions of the decision. Joven not only to disobey the instruction but even to report the matter to management. the Court of Appeals disagreed and set aside the findings of the NLRC that Reyes deliberately withheld the release of the two dollar checks. Joven was fully aware that the instruction. This Office had closely observed the demeanor of Ms. supra) will rise or fall on the credibility of Miss Joven who undisputedly is the star witness for the bank. and must be founded on clearly established facts sufficient to warrant the employee's separation from work (Labor vs. Joven's allegation that petitioner instructed her to hold the subject two dollar checks amounting to $224. 25-J. Rollo). NLRC. Our doubt on the veracity of Ms. Joven in that her non-release of the dollar checks was upon the instruction of complainant Reyes is extremely doubtful. Analiza Castillo. One thing was clearly established: that the legality of complainant's dismissal based on the first ground stated in respondent's letter of termination (exh. There being conflict in the statement of witnesses. Atty. Jocson testified that the documents themselves do not show any direct withholding (pp. In a nutshell. THIRD. 90). Upon this point. 268 SCRA 497). 186-187. to wit: "FIRST: Respondent Bank heavily relied on the testimony and affidavit of Remittance Clerk Joven in trying to establish loss of confidence. the said instruction constitutes a gross violation of the bank's standard operating procedure. thus: This Office has repeatedly gone over the records of the case and painstakingly examined the testimonies of respondent bank's witnesses. the Court quotes with approval the following disquisition of Labor Arbiter Linsangan. In the first place. the issue boils down to who between complainant and Ms. is not absolute. Joven and respondent's other witnesses this Office finds the evidence still wanting in proof of complainant's guilt. respondent Bank failed to adduce convincing evidence to prove bad faith and malice. Except for Joven's bare assertion to withhold the dollar checks per petitioner's instruction. SECOND. 18 Phil.S. and that she was dismissed based on loss of trust and confidence. Losada. Chairman of the Investigating Committee. Joven. 248 SCRA 183).650. the same should be respected by appellate tribunals since he is in a better position to assess and evaluate the credibility of the contending parties (Ala Mode Garments. The allegation of Ms. will greatly prejudice her employer bank. However.
accompanied by driver Celestino Banito. complainant's driver. And yet. she said the same should be held as per instruction of Mrs. And it took the bank another four (4) months before it dismissed complainant. Reyes. Castillo the former contented herself by continuously not taking any action on the two dollar checks. The non-release of the dollar checks was reported to top management sometime on 15 November 1989 when complainant. In this regard. Ms. Mother (Mrs. Ms. Clarita Tan Reyes and I were in the residence of one Ms. Cecille Joven. It took Ms. Joven to confront her. The evidence shows that it was only on 16 May 1990 that Ms. It clearly appears from the foregoing that the complainant herein has no knowledge of. Mrs. Sometime on November 15. Mrs. much less participation in. reported the matter to Vice President Santos. how it came about that the two dollar checks which she was then holding with the transmittal letters. the actions taken by the complainant were spontaneous. As to what prompted her to make her letter of explanation was not even mentioned. Incidentally. Hesitatingly. "14". Ms. Joven even impliedly told by Ms. she was not even reprimanded by the bank. 4. Joven is solely responsible for the same. went to her residence and confronted her regarding the non-release of the dollar checks. the complainant. 1989 at about 7:00 o'clock in the evening. myself. the non-release of the dollar checks under discussion. Tan Reyes had been intimately called Mother in the Bank) akala ko bouncing checks yon mga yon. 3. was surprised and she said: "Ano. that complainant was issued a memorandum directing her to submit an explanation. When I asked Cecille Joven what I was supposed to do with those checks. then a Processing Clerk in the Foreign Department of Prudential Bank. Clarita Tan Reyes. supra). There are other factors that constrain this Office to doubt even more the legality of complainant's dismissal based on the first ground stated in the letter of dismissal. papaano mong alam na bouncing na hindi mo pa pinadadala. The delayed action taken by respondent against complainant lends credence to the assertion of the latter that her dismissal was a mere retaliation to the criminal complaints she filed against the bank's top officials. Mrs.' (Exh. Head of the Foreign Department. Castillo regarding the non-release of the checks sometime in November. Cecille Joven. Castillo (sic) to ignore the two checks and just withhold their release. Cecille Joven said: "Eh. . On the other hand. Worse. When complainant was informed by Mr. it was only on 08 March 1991. Castillo said: `4. thus: `1. Celestino Bonito. stated in his affidavit. 5. were found in a plastic envelope kept day-to-day by the former. and Mrs. Joven broke her silence on the matter despite the fact that on 15 November 1989. at about 8:00 p. after a lapse of sixteen (16) months from the time the non-release of the checks was reported to the Vice President.m. Clarita Tan Reyes were seated in the sala when the latter asked the former. 1989 she immediately reported the matter to Vice President Santos. Castor and Ms. Cecille Joven turned pale and was not able to answer. And as earlier mentioned. complainant went to the residence of Ms.release of the checks was discovered by Ms. upon hearing those words. Ms. accompanied by Supervisor Dante Castor and Analiza Castillo. Cecille Joven. In her affidavit Ms.' 2. her mother. Joven eighteen (18) months before she explained her side on the controversy.
and the assailed Decision of the Court of Appeals. On the third issue. Indeed. that its liability should be mitigated on account of its good faith and that private respondent is not entirely blameless. jurisprudence is clear on the amount of backwages recoverable in cases of illegal dismissal. is AFFIRMED. as a rule." We uphold the findings of the Court of Appeals that the dismissal of private respondent on the ground of loss of trust and confidence was without basis. 1999. Due process dictates that management accord the employees every kind of assistance to enable him to prepare adequately for his defense. that private respondent is not entitled to full backwages in view of the fact that she did not bother to appeal that portion of the labor arbiter's judgment awarding back wages limited to three years. she is entitled to full backwages from the time her actual compensation was withheld from her (which. she is likewise entitled to attorney's fees at the rate above-mentioned. separation pay equivalent to one (1) month salary for every year of service in lieu of reinstatement. In any event. WHEREFORE. is from the time of her illegal dismissal) up to the finality of this judgment (instead of reinstatement) considering that reinstatement is no longer feasible as correctly pointed out by the Court of Appeals on account of the strained relations brought about by the litigation in this case. There is no showing that private respondent is partly at fault or that the Bank acted in good faith in terminating an employee of twenty-eight years. On the other hand. The charge was predicated on the testimony of Ms. resort to a judicial review of the decisions of the National Labor Relations Commission in a petition for certiorari under Rule 65 of Rules of Court is confined to issues of want or excess of jurisdiction and grave abuse of discretion. The Court finds nothing confidential in the auditor's report and the affidavit of Transmittal Clerk Joven. Respondent Bank having failed to furnish petitioner necessary documents imputing loss of confidence. while those illegally dismissed after are granted full backwages inclusive of allowances and other benefits or their monetary equivalent from the time their actual compensation was withheld from them up to the time of their actual reinstatement. since private respondent was compelled to file an action for illegal dismissal with the labor arbiter. including legal representation. as the Bank does here. 6715 clearly and plainly provides for "full backwages" to illegally dismissed employees. dated October 15. This Court is not a trier of facts and will not weigh anew the evidence already passed upon by the Court of Appeals. 1989 are entitled to backwages up to three (3) years without deduction or qualification. the appellate court awarded backwages in accordance with current jurisprudence. It must be stressed that private respondent filed a special civil action for certiorari to review the decision of the NLRC and not an ordinary appeal. in the main. Article 279 of Republic Act No. Considering that private respondent was terminated on July 19. In the instant case. 1991 up to the finality of this judgment. the instant petition for review on certiorari is DENIED. Joven and we defer to the findings of the Labor Arbiter as confirmed and adopted by the Court of Appeals on the credibility of said witness. the Bank questions the award of full backwages and other benefits from July 19. . the Court finds it irrelevant to the charge. The issue of conflict of interest not having been covered by the investigation. The Bank argues. petitioner was not amply afforded opportunity to prepare an intelligent answer. Lastly. Employees illegally dismissed prior to the effectivity of Republic Act No. and attorney's fees equivalent to ten (10%) percent of the total award. There is no room to argue. Since reinstatement is no longer viable. 1991. she is also entitled to separation pay equivalent to one (1) month salary for every year of service. Corollary to the foregoing. the Court of Appeals found that the NLRC gravely abused its discretion in finding that the private respondent's dismissal was valid and so reversed the same. An ordinary appeal is distinguished from the remedy of certiorari under Rule 65 of the Revised Rules of Court in that in ordinary appeals it is settled that a party who did not appeal cannot seek affirmative relief other than the ones granted in the decision of the court below. 6715 on March 21.FOURTH.
on jurisdictional ground.R. this court said: ―. For instance. 1997. a Decision of the Labor Arbiter dated January 19. Records do not show that petitioner presented a Motion for Reconsideration of subject Decision of the National Labor Relations Commission. absence of which can be fatal to a Petition for Certiorari. Before the Court is a Petition for Certiorari seeking to annul a Decision of the National Labor Relations Commission dated April 20. Nevertheless.. it is necessary that a Motion for Reconsideration of the Decision of the National Labor Relations Commission must first be resorted to. VS. An ordinary allegation – ―. speedy. should be fully conversant with the requirements for the institution of certiorari proceedings under Rule 65 of the Revised Rules of Court. No.R. Petitioner‘s inaction or negligence under the circumstances is tantamount to a deprivation of the right and opportunity of the . While the rule prescribing the requisite motion for reconsideration is not absolute and recognizes some exceptions. comes to the fore and should be well understood and observed. No. and there is no appeal. 1994 in NLRC-NCR Case No. This premature action of petitioners constitutes a fatal infirmity as ruled in a long line of decisions. National Labor Relations Commission — The filing of such motion is intended to afford public respondent an opportunity to correct any actual or fancied error attributed to it by way of a re-examination of the legal and factual aspects of the case. or seven years ago.. nor any plain. 1. Labor law practitioners and all lawyers. there is no showing that the case at bar constitutes an exception. 1995 in NLRC-NCR-CA-No.. 112630. 121227.. most recently is the case of Building Care Corporation v. Petitioner cannot and should not rely on the liberality of the Court simply because he is a working man. which motion is. INC. In the Jamer case. September 5.. 1998 ] VICENTE SAN JOSE. G. and to render substantial and speedy justice to subject aged stevedore retiree who first presented his claim for retirement benefit in April 1991. generally required before the filing of Petition for Certiorari. 00-03-02101-93 a case for a money claim . National Labor Relations Commission. PETITIONER. for that matter. and adequate remedy in the ordinary course of law‖ (Rule 65. RESPONDENTS. NATIONAL LABOR RELATIONS COMMISSION AND OCEAN TERMINAL SERVICES.underpayment of retirement benefit. 00671-94 which reversed.[ G. Sec. The ruling in Corazon Jamer v. we gave due course to the petition to enable the Court to reiterate and clarify the jurisdictional boundaries between Labor Arbiters and Voluntary Arbitrator or Panel of Voluntary Arbitrators over money claims. August 17. Revised Rules of Court) is not a foolproof substitute for a Motion for Reconsideration.
unless proven otherwise. dated January 19.39 for retirement pay. as earlier intimated. pp. 26-27. 00-03-02101-93..00 rests upon him. 58-59). Likewise. he would have immediately filed this complaint but nay. He is entitled to differential. Decision of the Labor Arbiter in NLRC-NCR-Case No. We cannot sustain a computation of length of service based on the ECC contribution records. 15. so while he was connected with the company for the past 11 years. in his position paper (Record. for it took him two (2) years to do so. he did apply for retirement and was paid P3. 1994.. thus: ―Complainant. will not prosper. the facts of this case are undisputed. Reads subject Decision of the Labor Arbiter: ―Respondents. that all stevedores only for paid every time they were assigned or actually performed stevedoring. that the use of divisor 303 is not applicable because complainant performed stevedoring job only on call. that the burden of proving that complainant‘s latest salary was P200. that the computation used in arriving at the amount of P3. We find for the complainant. that if indeed respondent took advantage of his illiteracy into signing his quitclaim. But the issue of jurisdiction is the bedrock of the Petition because. that he only worked on rotation basis and not seven days a week due to numerous stevedores who can not all be given assignments at the same time. pages 18 to 21) that complainant‘s latest basic salary was P120. The issue therefore is whether or not complainant is entitled to the claimed differential of separation pay.34 per day.‖ As stated in the Decision of the Labor Arbiter in NLRC-NCR-Case No. The prescription period is three years. in their Reply to complainant‘s position paper. aside from the fact that the best evidence thereof are complainant‘s daily time records which respondent are (sic) duty bound to keep and make available anytime in case of this. a motion for reconsideration is an adequate remedy. pages 11 to 14) states that he was hired sometime in July 1980 as a stevedore continuously until he was advised in April 1991 to retire from service considering that he already reached 65 years old (sic). he did not actually render 11 years of service.. 15-17). The Labor Arbiter decided the case solely on the merits of the complaint. ― (Rollo. the Decision of the National Labor Relations Commission. at pp.156. January 9. hence certiorari proceedings. reversed the Labor Arbiter‘s Decision on the issue of jurisdiction. allege (Record. that he already voluntarily signed a waiver of quitclaim. 00-03-0201-93. Likewise. 15017. The Labor Arbiter reported. the allegation that complainant rendered service for only five days a month for the past 11 years is statistically improbable.30 was the same computation applied to the other stevedores. 1994 (Rollo.respondent commission to cleanse itself of an error unwittingly committed or to vindicate itself of an act unfairly imputed. pp. Whether or not complainant worked on rotation basis is a burden which lies upon the employer. pp. The late filing has no bearing.156. hereinbelow quoted. .. that accordingly. It is suffice (sic) that the filing falls within the period. 16-17). The presumption is that the normal working period is eight (8) hours a day and six (6) days a week. or 26 days a month. Nowhere in the Decision is made mention of or reference to the issue of jurisdiction of the Labor Arbiter (Rollo. as in this case.
Therefore. There being non. Since the instant case arises from interpretation or implementation of a collective bargaining agreement. unless otherwise extended by the company for justifiable reason.600 x 11 years) = P28. which the employers are likewise duty bound to keep and present. pp.P3. April 20. the pertinent portion of which reads: xxx ANY UNION member shall be compulsory retired (sic) by the company upon reaching the age of sixty (60) years. ruling. his retrenchment pay differential is P25. 06701-94. we have to sustain complainant‘s assertion that his latest salary rate was P200 a day or P5.30 . He shall be paid his retirement pay equivalent to one-half (1/2) month salary for every year of service.200 x 11 years _________________ 2 = (P2.156. Jurisdiction of Labor Arbiter and the Commission.70‖ The Decision of the National Labor Relations Commission in NLRC-NCR-CA No.443. 18-21). His claim for separation pay differential is based on the Collective Bargaining Agreement (CBA) between his union and the respondent company. etc. It can be easily proven by payrolls. (c) Cases arising from the interpretation or implementation of collective bargaining agreement and those arising from the interpretation or enforcement of company procedure/policies shall be disposed of by the Labor Arbiter by referring the same to the grievance machinery and voluntary arbitrator as may be provided in said agreements.600 = P25.443.156.70 broken down as follows: P200 x 26 days = P5. the Labor Arbiter should have dismissed it for lack of jurisdiction in accordance with Article 217 (c) of the Labor Code..30 . which reads: (Underscoring supplied) Art. 1995 (Rollo.200 a month. The National Labor Relations Commission reversed on jurisdictional ground the aforesaid Decision of the Labor Arbiter.P3. 217. a fraction of at least six months being considered as one (1) whole year.‖ Petitioner contends that: . vouchers. xxx The company agrees that in case of casual employees and/or workers who work on rotation basis the criterion for determining their retirement pay shall be 303 rotation calls or work days as equivalent to one (1) year and shall be paid their retirement pay equivalent to one half (1/2) month for every year of service. as follows: ―.Also.. the burden of proving the amount of salaries paid to employees rests upon the employer not on the employee.
26-33. its Implementing Rules. G.I. August 22. advice and a critique to stress that both have obligations to the Courts and students of the law. pp. Decisions of the Labor Arbiters. and make certain that they truly and accurately reflect their conclusions and their final dispositions. xxx‖ This is not an admonition but rather. such resolution or decision should likewise state the factual and legal foundation relied upon. No. pp. and the Supreme Court serve not only to adjudicate disputes. executives. 38-32). support for the Decision could have been found in pertinent provisions of the Labor Code. 7-8) The Manifestation and Motion (In Lieu of Comment) sent in on December 6. The same thing goes for the findings of fact made by the NLRC. Article VIII of the Constitution which provides that no decision shall be rendered by any court without expressing therein clearly and distinctly the facts of the case and the law on which it is based. Had the Labor Arbiter exerted more research efforts. labor leaders and law students. NLRC. A decision should faithfully comply with Section 14. and germane decisions of the Supreme Court. at pp. and assumptions. An Arbiter cannot rely on simplistic statements. as it is a settled rule that such findings are entitled to great respect and even finality when supported by substantial evidence. Labor Arbiter Decision Labor Arbiters should exert all efforts to cite statutory provisions and/or judicial decision to buttress their dispositions. THE PUBLIC RESPONDENT NLRC GRAVELY ABUSED ITS DISCRETION IN GIVING DUE COURSE TO THE APPEAL DESPITE THE FACT 4 (SIC) THAT IT WAS FILED OUT OF TIME AND THERE IS NO SHOWING THAT A SURETY BOND WAS POSTED. The reason for this is obvious: aside from being required by the Constitution. It is a requirement of due process and fair play that the parties to a litigation be informed of how it was decided. who is unable to pinpoint the possible errors of the court for review by a higher tribunal. (Rollo. 1996: ―xxx This Court has previously held that judges and arbiters should draw up their decisions and resolutions with due care. decisions rise or fall on the basis of the analysis and reasoning processes of decision makers or adjudicators. re: jurisdiction raised by the Petitioner (Rollo. Timeliness of Appeal And Filing of Appeal Bond . they shall be struck down for being whimsical and capricious and arrived at with grave abuse of discretion. the National Labor Relations Commission. otherwise. They all have a keen interest in methods of analysis and the reasoning processes employed in labor dispute adjudication and resolution. v. generalizations. On the issues raised by the Petitioner. but also as an educational tool to practitioners. These are not substitutes for reasoned judgment. we rule: I.R. In fact. 1995 by the Office of the Solicitor General support the second issue. A decision that does not clearly and distinctly state the facts and the law on which it is based leaves the parties in the dark as to how it was reached and is especially prejudicial to the losing party. et al. with an explanation of the factual and legal reasons that led to the conclusions of the court. THE PUBLIC RESPONDENT NLRC GRAVELY ABUSED ITS DISCRETION N SETTING ASIDE THE DECISION OF XXX DATED 19 JANUARY 1994 AND DISMISSING THE CASE ON THE GROUND OF LACK OF JURISDICTION WHEN THE ISSUE DOES NOT INVOLVE ANY PROVISION OF THE COLLECTIVE BARGAINING AGREEMENT. upon the modified decision. If such decision had to be completely overturned or set aside. As this Court said in Juan Saballa. the court should be able to justify such a sudden change of course. it must be able to convincingly explain the taking back of its solemn conclusions and pronouncements in the earlier decision. II. 10247284.
Resolution No. moral. involving an amount exceeding five thousand pesos (P5. whether agricultural or non-agricultural: 1. 6. in the amount of P25. (Underscoring supplied) Hence. it is crystal clear that the appeal was filed within the prescriptive period to perfect an appeal. to wit: ―xxx While it is true that private respondent company received a copy of the decision dated January 19. for the simple reason that a surety bond was issued by BF General Insurance Company. the amendments to the New Rules of Procedure of the NLRC. Medicare and maternity benefits. claims for actual. read: ―A.70 (Rollo. 11-01-91 which took effect on January 14. the following cases involving all workers. including questions involving the legality of strikes and lockouts. exemplary and other forms of damages arising from the employer-employee relations.. submitted by the National Labor Relations Commission. 443. Cases arising from any violation of Article 264 of this Code. the last day to perfect an appeal shall be the next working day. in accordance with the Rules of the National Labor Relations Commission.. pp. it is undisputed that the tenth day within which to file an appeal fell on a Saturday. within thirty (30) calendar days after the submission of the case by the parties for decision without extension.. Termination disputes. 63-64). — (a) Except as otherwise provided under this Code the Labor Arbiter shall have original and exclusive jurisdiction to hear and decide. including those of persons in domestic or household service.. awards or orders of the Labor Arbiter xxx .The Court rules that the appeal of the respondent corporation was interposed within the reglementary period. Period of Appeal — Decisions. Rule VI. 1994 of the Labor Arbiter xxx and filed its appeal on February 14. Sunday or a Holiday. Except claims for Employees Compensation. The pertinent provisions of the Labor Code. and an appeal bond was duly posted.. provides in part: 1. rates of pay. Jurisdiction of Labor Arbiters Art. all other claims. 4. Likewise.. 2. 2. even in the absence of stenographic notes. If accompanied with a claim for reinstatement. 5. We adopt the following Comment dated August 14. the last day to perfect the decision shall be the next working day. awards or orders of the Labor Arbiter . hours of work and other terms and conditions of employment.. falls on a Saturday. those cases that workers may file involving wages. and. Unfair labor practice cases. arising from employer-employee relations. deserves scant consideration. the petitioner‘s contention that private respondent did not post the required surety bond. 1996. 1994. Jurisdiction of Labor Arbiter and the Commission. If the 10th day . shall be final and executory unless appealed to the Commission by any or both parties within ten (10) calendar days from receipt of such decisions. . 1992. Sections 1 and 6 are hereby amended to read as follows: Section 1. Thus. Inc.000) regardless of whether accompanied with a claim for reinstatement. 3. 217. Social Security. Jurisdictional Issue The jurisdiction of Labor Arbiters and Voluntary Arbitrator or Panel of Voluntary Arbitrators is clearly defined and specifically delineated in the Labor Code.
‖ The phrase ―Except as otherwise provided under this Code‖ refers to the following exceptions: A. and that of the Voluntary Arbitrator or Panel of Voluntary Arbitrators in Article 261.. Jurisdiction of Labor Arbiters . 217. B. 3. For purposes of this Article.(c) Cases arising from the interpretation or implementation of collective bargaining agreement and those arising from the interpretation or enforcement of company procedure/policies shall be disposed of by the Labor Arbiter by referring the same to the grievance machinery and voluntary arbitrator so maybe provided in said agreement.. to wit: ―Art... Accordingly. The cases where the Labor Arbiters have original and exclusive jurisdiction are enumerated in Article 217. Jurisdiction of Voluntary Arbitrators or panel of Voluntary Arbitrators. Jurisdiction of Voluntary Arbitrator or Panel of Voluntary Arbitrators Art. shall also hear and decide all other labor disputes including unfair labor practices and bargaining deadlocks. Jurisdiction over other labor disputes. and 262 indicates. upon agreement of the parties. Art. They must be read as a whole and each Article of the Code reconciled one with the other.‖ The aforecited provisions of law cannot be read in isolation or separately. — The Voluntary Arbitrator or panel of Voluntary Arbitrators shall have original and exclusive jurisdiction to hear and decide all unresolved grievances arising from the interpretation or implementation of the Collective Bargaining Agreement and those arising from the interpretation or enforcement of company personnel policies referred to in the immediately preceding article. its Regional Offices and the Regional Directors of the Department of Labor and Employment shall not entertain disputes. shall no longer be treated as unfair labor practice and shall be resolved as grievances under the collective bargaining agreement. The original and exclusive jurisdiction of Labor Arbiters is qualified by an exception as indicated in the introductory sentence of Article 217 (a). Jurisdiction of Labor Arbiters . The Commission. 261.. the following cases involving all workers. gross violations of Collective Bargaining Agreement shall mean flagrant and/or malicious refusal to comply with the economic provisions of such agreement. 261 and 262. An analysis of the provisions of Articles 217. violations of a Collective Bargaining Agreement. — The Voluntary Arbitrator or panel of Voluntary Arbitrators.. except those which are gross in character.. 262. (c) Cases arising from the interpretation or implementation of collective bargaining agreement and those arising from the interpretation or enforcement of company procedure/policies shall be disposed of . Art.. 2. grievances or matters under the exclusive and original jurisdiction of the Voluntary Arbitrator or panel of Voluntary Arbitrators and shall immediately dispose and refer the same to the Grievance Machinery or Voluntary Arbitration provided in the Collective Bargaining Agreement. 261. The jurisdiction of the Labor Arbiter and Voluntary Arbitrator or Panel of Voluntary Arbitrators over the cases enumerated in Articles 217. 217. can possibly include money claims in one form or another. (a) Except as otherwise provided under this Code the Labor Arbiter shall have original and exclusive jurisdiction to hear and decide . that: 1.
except those which are gross in character. xxx. Accordingly. The Voluntary Arbitrator or Panel of Voluntary Arbitrators will have original and exclusive jurisdiction over money claims ―arising from the interpretation or implementation of the Collective Bargaining Agreement and. 1. Art. As shown in the above contextual and wholistic analysis of Articles 217. Jurisdiction over other labor disputes. Merits of the Case The Court will not remand the case to the Voluntary Arbitrator or Panel of Voluntary Arbitrators for hearing. Voluntary Arbitrators or Panel of Voluntary Arbitrators. 262.by the Labor Arbiter by referring the same to the grievance machinery and voluntary arbitrator as may be provided in said agreement. 4. 261. upon agreement of the parties.. violations of a collective bargaining agreement..‖ 2. however. The labor disputes referred to in the same Article 262 can include all those disputes mentioned in Article 217 over which the Labor Arbiter has original and exclusive jurisdiction. shall also hear and decide all other labor disputes including unfair labor practices and bargaining deadlocks. upon agreement of the parties. shall also hear and decide all other labor disputes including unfair labor practices and bargaining deadlocks. for money claims is limited only to those arising from statutes or contracts other than a Collective Bargaining Agreement. . shall no longer be treated as unfair labor practice and shall be resolved as grievances under the Collective Bargaining Agreement. 261 and 262 of the Labor Code as indicated above. unresolved grievances arising from the interpretation or implementation of the Collective Bargaining Agreement and those arising from the interpretation or enforcement of company personnel policies. under Article 261. Parenthetically. as the controversy between the parties involved an issue ―arising from the interpretation or implementation‖ of a provision of the collective bargaining agreement. This case has dragged on far too long . The jurisdiction of Voluntary Arbitrator or Panel of Voluntary Arbitrators is provided for in Arts. the original and exclusive jurisdiction of the Labor Arbiter under Article 217 (c).The Voluntary Arbitrator or panel of Voluntary Arbitrators. the National Labor Relations Commission correctly ruled that the Labor Arbiter had no jurisdiction to hear and decide petitioner‘s money-claim underpayment of retirement benefits. B. those arising from the interpretation or enforcement of company personnel policies‖. can exercise jurisdiction over any and all disputes between an employer and a union and/or individual worker as provided for in Article 262. Jurisdiction over other labor disputes.The voluntary arbitrator or panel of voluntary arbitrators.eight (8) years. ―Art. The Voluntary Arbitrator or Panel of Voluntary Arbitrators has original and exclusive jurisdiction over the controversy under Article 261 of the Labor Code. .. and not the Labor Arbiter. 3. A close reading of Article 261 indicates that the original and exclusive jurisdiction of Voluntary Arbitrator or Panel of Voluntary Arbitrators is limited only to: ―. 262.‖ It must be emphasized that the jurisdiction of the Voluntary Arbitrator or Panel of Voluntary Arbitrators under Article 262 must be voluntarily conferred upon by both labor and management. and 262 of the Labor Code.. Any further delay would be a denial of speedy justice to .
Safety and Welfare Benefits. Hence. That the appeal to the National Labor Relations Commission was filed within the reglementary period and that the appeal bond was filed. and finally to this Court. The simple statement of the Labor Arbiter that ―we cannot sustain a computation of length of service based on ECC contribution records‖. The respondent must therefore pay the petitioner the additional amount of Twenty-Five Thousand Four Hundred Forty-Three and Seventy Centavos P25.an aged retired stevedore. the respondent-employer failed.7. Rule X. the length of service as requirement for retirement. Tosoc. there is legal and factual basis for the same. it must therefore suffer the consequences of such failure. There is further the possibility that any Decision by the Voluntary Arbitrator or Panel of Voluntary Arbitrators will be appealed to the Court of Appeals.443. This is precisely the basis of retirement. i. By its own folly. and the computation of benefits based on years of service and monthly wage. specifically Secs. and time records. 6. All employers are likewise required to keep an employment record of all their employees. That we adopt the computation formula for the retirement benefits by the Labor Arbiter.the employer was forewarned of the need for accurate record keeping. In fact. We adopt as our own the retirement benefit computation formula of the Labor Arbiter.70) Pesos. (See Book III. Title II. namely: payrolls. Omnibus Rules . and salary as a basis for benefit computation . (See Articles 183-184. 1 and 12. and the reasons therefor as stated in the decision abovequoted. simply because the insurance fund is solely funded by the employer and the rate of employer‘s contribution varies according to time and actuarial computations.e. In both instances. The worker has no ready access to this employer‘s record. The respondent-employer was afforded the opportunity to show proof of the petitioner‘s length of service and pay records. Health. the Court will rule on the merits of the case.  ) From the very beginning . 2. this decision is immediately executory. it is farthest from his mind to inquire into the amount of employer‘s contribution. however. and 3. That the National Labor Relations Commission correctly ruled that the Labor Arbiter had no jurisdiction over the case. It is unrealistic to expect a lowly stevedore to know what reports his employer submits to the Employee‘s Compensation Commission under Book IV. of the Labor Code. because the case involved an issue ―arising from the interpretation or implementation‖ of a Collective Bargaining Agreement.by the provision of the retirement provision of the Collective Bargaining Agreement. Labor Code). and the basis thereof. Employees Compensation and State Insurance Fund. 181 SCRA 386. Labor Code). To recapitulate. (See Article 196 (b). the Court hereby rules 1. was not amply explained by the Labor Arbiter. The worker is at all times entitled to benefits upon the occurrence of the defined contingency even when the employer fails to remit the contributions. (South Motorists Enterprises v. In view of the long delay in the disposition of the case.8. . much less whether the employer remits the contributions.Implementing the Labor Code)..
. did not find the aforequoted proposal acceptable and consequently refused Mr. Petitioner Corporation. Division Managers and higher-ranked personnel" who submit to the Corporation Ideas and suggestions found to be beneficial to the Corporation." and that the same "ultimately and finally solved the problem of the Corporation in the production of Beer Grande. several cases of beer grande full goods were received by MB as returned beer fulls (RBF). petitioner.." Private respondent thus claimed entitlement to a cash prize of P60. Vega's subsequent demands for a cash award under the Innovation Program. NLRC In line with an Innovation Program sponsored by petitioner San Miguel Corporation ("Corporation. Mr. except [ED-HO staff. Ministry of Labor and Employment." and was supposed to eliminate certain alleged defects in the quality and taste of the product "San Miguel Beer Grande:" Title of Proposal Modified Grande Pasteurization Process Present Condition or Procedure At the early stage of beer grande production. Proposed lnnovation (Attach necessary information) In order to minimize if not elienate underpasteurization of beer grande. VII (Cebu City) of the then. In this way. 1 Mr. No. a Complaint 2 (docketed as Case No. On 22 February 1983. the self-life (sic) of beer grande will also be increased. . however.R. vs. 1988 SAN MIGUEL CORPORATION. Vega at that time had been in the employ of petitioner Corporation for thirteen (1 3) years and was then holding the position of "mechanic in the Bottling Department of the SMC Plant Brewery situated in Tipolo. Frivate respondent Vega alleged there that his proposal "[had] been accepted by the methods analyst and implemented by the Corporation [in] October 1980. Mandaue City. increasing the pasteurization time and the pasteurization acts for grande beer. RAB-VII-0170-83) was filed against petitioner Corporation with Regional Arbitration Branch No. 80774 May 31.". The RBF's were found to have sediments and their contents were hazy.G. Vega's proposal was entitled "Modified Grande Pasteurization Process.. reduce the speed of the beer grande pasteurizer thereby. private respondent Rustico Vega submitted on 23 September 1980 an innovation proposal." "SMC") and under which management undertook to grant cash awards to "all SMC employees .00 (the maximum award per proposal offered under the Innovation Program) and attorney's fees.000. These effects are usually caused by underpasteurization time and the pasteurzation units for beer grande were almost similar to those of the steinie.
" The Labor Arbiter's order was subsequently appealed by both parties.00 as "financial assistance. petitioner Corporation. the Labor Arbiter. order the respondent to pay the complainant the amount of P60. overtime compensation. 3. social security. A counterclaim for moral and exemplary damages. the following cases involving are workers. noting that the money claim of complainant Vega in this case is "not a necessary incident of his employment" and that said claim is not among those mentioned in Article 217 of the Labor Code." 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 . Unfair labor practice cases. medicare and maternity benefits. hours of work and other terms and conditions of employment. invoking Article 217 of the Labor Code. Cases arising from any violation of Article 265 of this. and litigation expenses closed out petitioner's pleading. In the present Petition for certiorari filed on 4 December 1987. Vega the sum of P2." Petitioner further alleged that the Labor Arbiter had no jurisdiction. separation pay and other benefits provided by law or appropriate agreement. the appealed Order is hereby set aside and another udgment entered. All money claims of workers. 227 which took effect on 1 June 1982: ART. 217. including those based on non-payment or underpayment of wages. attorney's fees. including questions involving the legality of strikes and lockouts. Jurisdiction of Labor Arbiters and the commission. In an Order 4 dated 30 April 1986. Vega's proposal was tumed down by the company "for lack of originality" and that the same. seeks to annul the Decision of public respondent Commission in Case No. 3 petitioner Corporation alleged that private respondent had no cause of action." the Labor Arbiter also directed petitioner to pay Mr. 4. the public respondent National Labor Relations Commission. Code. It denied ever having approved or adopted Mr. in a gesture of "compassion and to show the government's concern for the workingman. Cases involving household services. and 5. on 4 September 1987. and available administrative remedies provided under the rules of the Innovation Program. rendered a Decision.In an Answer With Counterclaim and Position Paper.000. private respondent Vega assailing the dismissal of his complaint for lack of jurisdiction and petitioner Corporation questioning the propriety of the award of "financial assistance" to Mr. The jurisdiction of Labor Arbiters and the National Labor Relations Commission is outlined in Article 217 of the Labor Code.000. except claims for employees' compensation. dismissed the complaint for lack of jurisdiction. 2. "even if implemented [could not] achieve the desired result. as last amended by Batas Pambansa Blg. Vega's proposal as part of the Corporation's brewing procedure in the production of San Miguel Beer Grande. Vega having improperly bypassed the grievance machinery procedure prescribed under a then existing collective bargaining agreement between management and employees. whether agricultural or non-agricultural: 1. Among other things. (b) The Commission shall have exclusive appellate jurisdiction over all cases decided by Labor Arbiters. Those that workers may file involving wages. (a) The Labor Arbiters shall have the original and exclusive jurisdiction to hear and decide within thirty (30) working days after submission of the case by the parties for decision. Vega. RAB-VII-01 70-83 upon the ground that the Labor Arbiter and the Commission have no jurisdiction over the subject matter of the case. (Emphasis supplied) While paragraph 3 above refers to "all money claims of workers.00 as explained above. Mr. However. SO ORDERED. 5 the dispositive portion of which reads: WHEREFORE. Acting on the appeals. petitioner stated that Mr.
the Labor Arbiters have no jurisdiction if the Labor Code is not involved. as amended. Mr. Blg. and paragraph 5 (relating to certain activities prohibited to employees or to employers). and any other paragraph of Article 217 of the Labor Code. In reversing the order of dismissal and requiring respondent Judge to take cognizance of the case below. in other words. paragraph 3 should be read not in isolation from but rather within the context formed by paragraph 1 related to unfair labor practices). although the parties were an employer and two employees. and cash advances from the corporation. Justice Melencio-Herrera. Petitioner had sued private respondent for non-payment of accounts which had arisen from private respondent's own purchases of vehicles and parts. Justice Abad Santos stated: The pivotal question to Our mind is whether or not the Labor Code has any relevance to the reliefs sought by the plaintiffs. 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. At the pre-trial in the lower court.original and exclusive jurisdiction of Labor Arbiters. and which would therefore fall within the general jurisdiction of the regular courts of justice. is enough to bring such money claim within the original and exclusive jurisdiction of Labor Arbiters. or some aspect or incident of such relationship. hence. therefore. 1982. 7 the petitioner was a corporation engaged in the sale and repair of motor vehicles. therefore. speaking through Mme. <äre|| anº•1àw> Applying the foregoing reading to the present case. fell within the jurisdiction of the Labor Arbiter and the NLRC." 6 which clause was not expressly carried over. paragraph 4 (claims relating to household services. In Medina vs. a particular species of employer-employee relations). The next issue that must logically be confronted is whether the fact that the money claim of private respondent Vega arose out of or in connection with his employment relation" with petitioner Corporation. arose out of or in connection with his employment relationship with petitioner. Inc. Without the existing employer-employee relationship between the parties here. 11 SCRA 597. Vega of his proposal concerning beer grande. although a controversy is between an employer and an employee. private respondent raised the question of lack of jurisdiction of the court. in negating jurisdiction of the Labor Arbiter. 227. the principle followed by this Court was that. under paragraph 5 of Article 217 of the Labor Code had jurisdiction over" all other cases arising from employer-employee relation. paragraph 2 (relating to claims concerning terms and conditions of employment). unless.P. it fell outside the jurisdiction of the court and consequently should be dismissed. more specifically to employees below the rank of manager. For it cannot be presumed that money claims of workers which do not arise out of or in connection with their employer-employee relationship. in printer's ink. said: Before the enactment of BP Blg. We reach the above conclusion from an examination of the terms themselves of Article 217. that they all refer to cases or disputes arising out of or in connection with an employer-employee relationship. as last amended by B. The Court. It is evident that there is a unifying element which runs through paragraphs 1 to 5 and that is. stating that because petitioner's complaint arose out of the employer-employee relationship. Put a little differently. without that relationship. Respondent Judge did dismiss the case. private respondent Vega's suit against petitioner Corporation would never have arisen. In Molave Motor Sales. This is. The money claim of private respondent Vega in this case. we note that petitioner's Innovation Program is an employee incentive scheme offered and open only to employees of petitioner Corporation. a situation where the rule of noscitur a sociis may be usefully invoked in clarifying the scope of paragraph 3. 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. 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." Even then. expressly excluded by this Code. while private respondent was the sales Manager of petitioner. For if the Labor Code has no relevance. In the first place. . holding that the sum of money and damages sued for by the employer arose from the employer-employee relationship and. 227 on June 1. Castro-Bartolome. Laron. Labor Arbiters. 604. repair jobs on cars personally owned by him. in Article 217 as it exists today. 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. any discussion concerning the statutes amending it and whether or not they have retroactive effect is unnecessary. this Court. there would have been no occasion to consider the petitioner's Innovation Program or the submission by Mr. v.
The important principle that runs through these three (3) cases is that where the claim to the principal relief sought 9 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. clearly if impliedly suggesting that the claim for damages did not necessarily arise out of or in connection with the employer-employee relationship. Singapore Airlines Limited v. It results that the orders under review are based on a wrong premise. whether or not an enforceable contract. No pronouncement as to costs. unlike Medina. could be translated into some substantial benefit to the Corporation. questions not to be resolved by referring to labor legislation and having nothing to do with wages or other terms and conditions of employment. The Court treated the claim for damages as "a simple action for damages for tortious acts" allegedly committed by private respondents. Such being the case. Theirs is a simple action for damages for tortious acts allegedly committed by the defendants. the Court notes that the SMC Innovation Program was essentially an invitation from petitioner Corporation to its employees to submit innovation proposals. referred to in the above excerpt. and if so. Such undertaking. RAB-VII-0170-83 is hereby DISMISSED. whether or not it had been breached. Clearly. Paño. The primary relief sought is for liquidated damages for breach of a contractual obligation. . Those accounts have no relevance to the Labor Code. 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. Castro-Bartolome. not the Labor Arbiters and the NLRC should have jurisdiction. could nonetheless ripen into an enforceable contractual (facio ut des) 11 obligation on the part of petitioner Corporation under certain circumstances. though unilateral in origin. and for the purchase price of vehicles and parts sold to him. The cause of action was one under the civil laws. Hence the civil courts. 122 SCRA 671. involved a claim for damages by two (2) employees against the employer company and the General Manager thereof. satisfied the standards and requirements of the Innovation Program 10 and which. 8 It seems worth noting that Medina v. without prejudice to the right of private respondent Vega to file a suit before the proper court. and it does not breach any provision of the Labor Code or the contract of employment of DEFENDANT. In the case below. in the judgment of the Corporation's officials. In such situations. the governing statute is the Civil Code and not the Labor Code. but rather in the application of the general civil law.It is obvious from the complaint that the plaintiffs have not alleged any unfair labor practice. therefore. petitioner seeks protection under the civil laws and claims no benefits under the Labor Code. the Petition for certiorari is GRANTED. if he so desires. and that petitioner Corporation undertook to grant cash awards to employees who accept such invitation and whose innovation suggestions. arising from the use of slanderous language on the occasion when the General Manager fired the two (2) employees (the Plant General Manager and the Plant Comptroller). intrinsically a civil dispute. albeit implied arid innominate. the cost of repair jobs made on his personal cars. involved a claim for liquidated damages not by a worker but by the employer company. not in labor management relations nor in wage structures and other terms and conditions of employment. resolution of the dispute requires expertise. the following was said: Stated differently. PLAINTIFF had sued for monies loaned to DEFENDANT. but rather having recourse to our law on contracts. The decision dated 4 September 1987 of public respondent National Labor Relations Commission is SET ASIDE and the complaint in Case No. The items claimed are the natural consequences flowing from breach of an obligation. Thus. Paño. are preeminently legal questions. also cited in Molave. The other items demanded are not labor benefits demanded by workers generally taken cognizance of in labor disputes. overtime compensation or separation pay. such as payment of wages. the jurisdiction over the dispute belongs to the regular courts of justice and not to the Labor Arbiter and the NLRC. Applying the foregoing to the instant case. WEREFORE. 677. had arisen between petitioner Corporation and private respondent Vega in the circumstances of this case. And in Singapore Airlines Limited v.
On September 3. Furthermore. The computation of the foregoing awards is hereto attached and forms an integral part of this decision. October 08. On November 23. for illegal dismissal. Benedicto Faburada. 1990. the Labor Arbiter rendered a decision. Petitioner PHCCI contends that private respondents are its members and are working for it as volunteers. No. the dispositive portion of which reads: WHEREFORE. separation pay.R. thus respondent is directed to pay Complainants backwages computed from the time they were illegally dismissed up to the actual reinstatement but subject to the three year backwages rule. petitioner PHCCI filed a motion to dismiss the complaint on the ground that there is no employer-employee relationship between them as private respondents are all members and co-owners of the cooperative. On the same date. judgment is hereby rendered declaring complainants illegally dismissed." On appeal. wage differential. 121948. separation pay for one month for every year of service since reinstatement is evidently not feasible anymore. the NLRC affirmed the Labor Arbiter's decision. private respondents. No. Sisinita Vilar. private respondents have not exhausted the remedies provided in the cooperative by-laws. BENEDICTO FABURADA On January 3.[ G. Department of Labor and Employment (DOLE). requires conciliation or mediation within the cooperative before a resort to judicial proceeding. Not being . wage differentials and Ten Percent (10%) attorney's fees from the aggregate monetary award. Inc. and attorney's fees. All other claims are hereby dismissed for lack of merit. petitioner filed a supplemental motion to dismiss alleging that Article 121 of R. premises considered. filed a complaint against the Perpetual Help Credit Cooperative. 1993. holding that the case is impressed with employer-employee relationship and that the law on cooperatives is subservient to the Labor Code. the Labor Arbiter denied petitioner's motion to dismiss. (PHCCI). Forthwith. this petition by the PHCCI. 2001 ] PERPETUAL HELP CREDIT COOPERATIVE VS. 6939. he being a part-time employee. However. The issue for our resolution is whether or not respondent judge committed grave abuse of discretion in ruling that there is an employer-employee relationship between the parties and that private respondents were illegally dismissed. complainant Benedicto Faburada shall only be awarded what are due him in proportion to the nine and a half months that he had served the respondent. 1990. with the Arbitration Branch. premium pay on holidays and rest days.A. 1990. Hence. petitioner. Imelda Tamayo and Harold Catipay. otherwise known as the Cooperative Development Authority Law which took effect on March 26. to pay complainants 13th month pay. moral damages. Dumaguete City.
from January 1. prepare checks and cash vouchers for regular and emergency loans. 1987 up to December 29.Monday to Friday .000. P1.00 .for at least three (3) hours.00 for December 1987. 1989 to June 30.from December 1..m. 1989. Tamayo . They worked under the supervision of the cooperative manager..m. Harold D.350. 1988.from July to . carefully considered by respondent NLRC in affirming the Labor Arbiter's decision. P250. junior depositors and special accounts.m. and P1. schedule loans. 1989. P500. Catipay . and perform such other bookkeeping and accounting duties as may be assigned to her from time to time. to 5:30 p. from 1:00 p. P1.8:00 to 11:30 a. and P1. assist in the posting and preparation of deposit slips. dividends and patronage funds. take charge of loan releases every Monday morning. The above elements are present here.from January to June 1989. Duties: Among others. pick up balances for the computation of interests on savings deposit. Monthly salary: P500.for at least three (3) hours. Work schedule: .. mortuary. were assigned specific duties.00 . Worked with the Cooperative since October 19. maintain the masterlist of the cooperative members. and for at least three (3 ) hours during Sundays.from July 1.m.m.00 . perform various forms for mimeographing. thus: Benedicto Faburada -Regular part-time Computer programmer/ operator. Monthly salary: P900.150.. In determining the existence of an employer-employee relationship.m. Worked with the Cooperative since June 1. they were dismissed.m and 2:00 to 5:30 p. Imelda C.500.from January to June 1989.m. the following elements are considered: (1) the selection and engagement of the worker or the power to hire. and perform such other bookkeeping and accounting duties as may be assigned her from time to time.from October to November 1987.050. receive deposits from members.8:00 to 11:30 a. That an employer-employee exists between the parties is shown by the averments of private respondents in their respective affidavits. Worked with the Cooperative since March 3 to December 29. prepare cash vouchers. Jr. and one Sunday each month . 1987 to December 31. Worked with the Cooperative since December 1. and perform such other duties as may be assigned from time to time. they cannot sue petitioner. and every Saturday from 8:00 to 11:30 a. daily summary of disbursements to respective classifications. Sisinita Vilar -Clerk. Duties: Among others. Work schedule: Tuesdays and Thursdays. hired private respondents to work for it. fill up members logbook of regular depositors. and P1. post the monthly balance of fixed and savings deposits in preparation for the computation of interests. (3) the payment of wages by whatever means.00 .m and 1:00 to 4:00 p. reconcile bank statements to the daily summary of disbursements. 1989 to December 31. (2) the power to dismiss. through Mr. No particular form of proof is required to prove the existence of an employer-employee relationship.00 from July to December 1989. dividends. with the latter assuming primacy in the overall consideration.m.000.8:00 to 11:30 a. its Manager.Clerk. every Saturday .00 .from January to December 1988. Any competent and relevant evidence may show the relationship. Edilberto Lantaca.00 from July to December 1989. P950 . But unfortunately.m.00 . 1987 up to December 29. Saturday . check petty cash vouchers. and (4) the power to control the worker's conduct.000.00 .8:00 to 11:30 a. mortuary and patronage funds.00 .regular employees. Enter data into the computer. take charge of the preparation of new passbooks and ledgers for new applicants. were paid regular wages and made to accomplish daily time records just like any other regular employee. 1989. compute interests on savings deposits. effect mortuary deductions and dividends on fixed deposits. 1989. Petitioner PHCCI. 1988 up to December 29. Monthly salary: P1. Work schedule: Regular working hours.00 -from June to December 1988. and 1:00 to 4:00 p. and 2:00 to 5:30 p. P1.m. They worked regularly on regular working hours. Prepare summary of salary advances.Clerk. and 1:00 to 4:00 p.from March to June 1989. disburse checks during regular and emergency loans. and for one Sunday each month . 1989. Monthly salary: P60. Work schedule: Monday to Friday . 1989. journal vouchers. Duties: Among others.
(2) project employees or those whose employment has been fixed for a specific project or undertaking. their services may be terminated only for a valid cause. and (3) casual employees or those who are neither regular nor project employees. 1989. Catipay. 703 (1989 ) is misplaced. for one and a half (1 1/2) years. The just causes are: (1) serious misconduct or willful disobedience of lawful orders in connection with the employee's work. 1990. Petitioner's contention that private respondents are mere volunteer workers. Bookkeeping. reconcile passbooks and ledgers of members in the market. this leads us to the issue of whether or not private respondents are regular employees. Its invocation of San Jose City Electric Cooperative vs. This fact alone qualified them as regular employees. and. worked with petitioner for more than one (1) year: Benedicto Faburada. accounting and collecting duties. The valid causes are categorized into two groups: the just causes under Articles 282 of the Labor Code and the authorized causes under Articles 283 and 284 of the same Code. analogous cases.. with respect to the activity in which they are employed. Undeniably. private respondents are entitled to security of tenure. and Imelda C. Petitioner missed the point. (3) fraud or willful breach of trust. whether such service is continuous or broken. All of them. The authorized causes are: (1) the installation of labor-saving devices. with observance of due process. The issue in this case is whether or not the employeesmembers of a cooperative can organize themselves for purposes of collective bargaining. Thus. Tamayo. not regular employees. All of them were given a memorandum of termination on January 2. Sisinita Vilar. (3) retrenchment to prevent losses. Necessarily. and assist the other clerks in their duties. except Harold D. We are not prepared to disregard the findings of both the Labor Arbiter and respondent NLRC. One's regularity of employment is not determined by the number of hours one works but by the nature and by the length of time one has been in that particular job. effective December 29. for two (2) years. must necessarily fail. and (b) those casual employees who have rendered at least one (1) year of service. like this one. (2) redundancy. and (4) closing or cessation of operations of the establishment or undertaking. the completion or termination of which has been determined at the time of the engagement of the employee or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season. does not mean that he is not a regular employee. The employees who are deemed regular are: (a) those who have been engaged to perform activities which are usually necessary or desirable in the usual trade or business of the employer. that quantum of evidence required in quasi-judicial proceedings. not whether or not the members can be employees. post daily collections from the two (2) collectors in the market. Article 280 of the Labor Code provides for three kinds of employees: (1) regular employees or those who have been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer. such as.December 1989. private respondents were rendering services necessary to the day-to-day operations of petitioner PHCCI. Article 284 provides that an employer would be authorized to terminate the services of an employee found to be suffering from any disease if the employee's continued employment is prohibited by law or is prejudicial to his health or to the health of his fellow employees . the same being supported by substantial evidence. unless the closing is for the purpose of circumventing the provisions of law. That Benedicto Faburada worked only on a part-time basis. As regular employees or workers. for two (2) years and two (2) months. (4) commission of a crime or an offense against the person of the employer or his immediate family member or representative. Duties: Among others. Ministry of Labor and Employment (173 SCRA 697. (2) gross or habitual neglect of duties.
Private respondents were dismissed not for any of the above causes. They were dismissed because petitioner considered them to be mere voluntary workers, being its members, and as such work at its pleasure. Petitioner thus vehemently insists that their dismissal is not against the law. Procedural due process requires that the employer serve the employees to be dismissed two (2) written notices before the termination of their employment is effected: (a) the first, to apprise them of the particular acts or omissions for which their dismissal is sought and (b) the second, to inform them of the decision of the employer that they are being dismissed. In this case, only one notice was served upon private respondents by petitioner. It was in the form of a Memorandum signed by the Manager of the Cooperative dated January 2, 1990 terminating their services effective December 29, 1989. Clearly, petitioner failed to comply with the twin requisites of a valid notice. We hold that private respondents have been illegally dismissed. Petitioner contends that the labor arbiter has no jurisdiction to take cognizance of the complaint of private respondents considering that they failed to submit their dispute to the grievance machinery as required by P.D 175 (strengthening the Cooperative Movement) and its implementing rules and regulations under LOI 23. Likewise, the Cooperative Development Authority did not issue a Certificate of Non-Resolution pursuant to Section 8 of R.A. 6939 or the Cooperative Development Authority Law. As aptly stated by the Solicitor General in his comment, P.D. 175 does not provide for a grievance machinery where a dispute or claim may first be submitted. LOI 23 refers to instructions to the Secretary of Public Works and Communications to implement immediately the recommendation of the Postmaster General for the dismissal of some employees of the Bureau of Post. Obviously, this LOI has no relevance to the instant case. Article 121 of Republic Act No. 6938 (Cooperative Code of the Philippines) provides the procedure how cooperative disputes are to be resolved, thus: "ART. 121. Settlement of Disputes.- Disputes among members, officers, directors, and committee members, and intracooperative disputes shall, as far as practicable, be settled amicably in accordance with the conciliation or mediation mechanisms embodied in the bylaws of the cooperative, and in applicable laws. Should such a conciliation/mediation proceeding fail, the matter shall be settled in a court of competent jurisdiction." Complementing this Article is Section 8 of R.A. No. 6939 (Cooperative Development Authority Law) which reads: SEC. 8 Mediation and Conciliation.- Upon request of either or both parties, the Authority shall mediate and conciliate disputes within a cooperative or between cooperatives: Provided, That if no mediation or conciliation succeeds within three (3) months from request thereof, a certificate of non-resolution shall be issued by the Commission prior to the filing of appropriate action before the proper courts. The above provisions apply to members, officers and directors of the cooperative involved in disputes within a cooperative or between cooperatives. There is no evidence that private respondents are members of petitioner PHCCI and even if they are, the dispute is about payment of wages, overtime pay, rest day and termination of employment. Under Art. 217 of the Labor Code, these disputes are within the original and exclusive jurisdiction of the Labor Arbiter.
As illegally dismissed employees, private respondents are therefore entitled to reinstatement without loss of seniority rights and other privileges and to full backwages, inclusive of allowances, plus other benefits or their monetary equivalent computed from the time their compensation was witheld from them up to the time of their actual reinstatement. Since they were dismissed after March 21, 1989, the effectivity date of R.A. 6715 they are granted full backwages, meaning, without deducting from their backwages the earnings derived by them elsewhere during the period of their illegal dismissal. If reinstatement is no longer feasible, as when the relationship between petitioner and private respondents has become strained, payment of their separation pay in lieu of reinstatement is in order. WHEREFORE, the petition is hereby DENIED. The decision of respondent NLRC is AFFIRMED, with modification in the sense that the backwages due private respondents shall be paid in full, computed from the time they were illegally dismissed up to the time of the finality of this Decision.
[ G.R. No. 79907, March 16, 1989 ]
SAMUEL CASAS LIM VS. NLRC [G.R. NO. 79975. MARCH 16, 1989] SWEET LINES VS. NATIONAL LABOR RELATIONS COMMISSION
These two cases have been consolidated because they relate to the same factual antecedents and the same private respondent. The issues are: 1. In G.R. No. 79975, whether or not the private respondent was an employee of the petitioner and, if so, had been illegally dimissed; and corollarily, whether or not the NLRC had jurisdiction over their dispute. 2. In G.R. No. 79907, whether or not the petitioner could be held solidarily liable with Sweet Lines, Inc. to the private respondent. The record shows that private respondent Victoria Calsado was hired by Sweet Lines, Inc. on March 5, 1981, as Senior Branch Officer of its International Accounts Department for a fixed salary and a stipulated 5% commission on sales production. On December 1, 1983, after tendering her resignation to accept another offer of employment, she was persuaded to remain with an offer of her promotion to Manager of the Department with corresponding increase in compensation, which she accepted. She was also allowed to buy a second-hand Colt Lancer pursuant to a liberal car plan under which one-half of the cost was to be paid by the company and the other half was to be deducted from her salary. Relations began to sour later, however, when she repeatedly asked for payment of her commissions, which had accumulated and were long overdue. She also complained of the inordinate demands on her time even when she was sick and in the hospital. Finally, on July 16, 1985, she was served with a letter from Samuel Casas Lim, the other petitioner, informing her that her "employment with Sweet Lines" would terminate on August 5, 1985. Efforts were also taken by Sweet Lines to forcibly take the car from her, culminating in an action for replevin against her in the regional trial court of Manila. On August 14, 1985, Calsado filed a complaint against both petitioners for illegal dismissal, illegal deduction, and unpaid wages and commissions plus moral and exemplary damages, among other claims. There followed an extended hearing where she testified on the details of her employment, emphasizing her unsatisfactory treatment by the management of Sweet Lines and especially the termination of her services without the required notice and hearing and without valid cause. She also presented four other witnesses to corroborate her charges.
The respondents' defenses were based mainly on the claim that Calsado was not an employee of Sweet Lines but an independent contractor and that therefore their dispute with her came under the jurisdiction of the civil courts and not of the Labor Arbiter. On this matter the private respondent pointedly comments:
At this point, private respondent would like to underscore the fact that while private respondent in the proceedings before the Labor Arbiter presented five witnesses including herself, all of whom were cross-examined by petitioners, and numerous documents which were marked as Exhs. "A" to "GG-8d" and 858 receipts and bills, all of which were duly identified and testified to by private respondent and her witnesses and examined by petitioners, petitioners failed to present any single evidence, testimonial or documentary, to controvert private respondent's evidence. All that they presented were their unsubstantiated pleadings not one of which was under oath, not even their position paper which, under the NLRC rules (Sec. 2, Rule 7, Revised Rules of the NLRC), have to be verified.
On December 29, 1986, decision was rendered against the two petitioners by the Labor Arbiter, who held them liable in solidum to the complainant for the following amounts:
(a) Separation pay equivalent to one month pay for every year of service based on her latest basic salary of P2,500.00 plus allowance of P500.00, or a total monthly pay of P3,000.00; (b) Backwages based on her last monthly pay rate of P3,000.00 to be computed from the time of her dismissal to the actual payment of her separation pay; (c) Proportionate 13th month pay for the year 1985; (d) Sales commission in the sum of P432,656.68; (e) Moral damages of P100,000.00; (f) Exemplary damages of P10,000.00; and (g) Attorney's fees of P10,000.00 plus 25% of the total monetary awards in favor of the complainant.
The decision was appealed to the National Labor Relations Commission and affirmed in toto except as to the attorney's fees, which were reduced to 10% of the total award. Both Sweet Lines and Lim then came to us in separate petitions to raise the above-stated issues. On October 14, 1987, we issued a temporary restraining order against the enforcement of the decision of the public respondent dated September 11, 1987. The petitions were consolidated on December 7, 1987, and given due course on May 16, 1987, with the parties being required to submit their respective memoranda. On the first question, we hold that the employe-employer relations between Calsado and Sweet Lines have been sufficiently established. The following documents submitted by the former and not controverted by the latter should belie the claim that Calsado was only an independent contractor over whom Sweet Lines had no control.
1. Certification issued by Sweet Lines, Inc. dated May 21, 1984, stating that private respondent “is employed with this company since March 5, 1982 up to the present, presently designated as International Accounts Manager of the Sweet Lines, Inc., Manila Branch." (Exh. ”W") 2. Termination letter issued by Samuel Casas Lim to private respondent reading: "Your employment with Sweet Lines, Inc. will cease effective August 15, 1985. In connection with the foregoing, you are entitled to (1) separation pay equivalent to one half month for every year of service x x x; (2) The computed money value of unused vacation leave x x x; (3) Thirteenth month pay x x x;" (Exh. "V') 3. Notice of private respondent's promotion effective December 1, 1982 from Senior Branch Officer to Manager, International Accounts, with an increase in basic salary from P1,250 to P2,500 a month; (Exh. "D")
Inc. counsel for petitioner company. The letter. The termination letter itself. Indeed. which was signed by the other petitioner as Vice President of Sweet Lines. On the contrary. If it is true that Sweet Lines had no control over her and left her free to determine her work schedule." On the fourth issue. The petitioner cannot now argue that the grant to her of the 13th month pay and even the differential pay was a mere accommodation like the car plan (which. and presently holding the position of Manager. the determination of the existence of employee-employer relations is a factual finding which this Court will not disturb or reverse in the absence of a showing of grave abuse of discretion. (Exh. Certification. 1985. "I") There is in the above exhibits a consistent and categorical recognition of Calsado as an employee of petitioner Sweet Lines. Approved application for sick leave of private respondent for 15 days from March 7. We do not see such justification here. We find from the record that all these tests have been satisfied.” (Exh. Such relationship having been established. 1985 to April 3. Ramolete and more positively in National Union of Bank Employees v. "Y") 7. with evidence showing inter alia that she had the financial resources and other means or equipment to operate as such. "E") 5. Certification dated September 6. informed her not only of her separation but also of the benefits due her as a result of the termination of her services. 1985. by Atty. International Account. Under Article 247 of the Code. At any rate. One must prove what one alleges. shall be under the jurisdiction of the labor arbiters. the third issue is automatically resolved and requires not much elaboration." Sweet Lines has also failed to substantiate its allegation that Calsado was an independent contractor. the damages (allegedly) suffered by the petitioners only form part of the civil component of the injury arising from the unfair labor practice. notarized on January 10. as it should have. is a benefit usually extended only to employees).4. "the civil aspects of all cases involving unfair labor practices which may include claims for damages and other affirmative relief. Inc. 1985 to April 3. said she was "entitled" to certain payments as a result of the cessation of her "employment with Sweet Lines. allowance and 13th month pay differentials on account of her promotion. Lazaro. (Exh. that private respondent “is a bona fide employee of Sweet Lines. prepared and approved by the proper officials of petitioner Sweet Lines. there would have been no reason at all for its approval of her application for sick leave from March 7. where we declared: As we stated.. the ascertainment of the employment status of the private respondent was made on the basis of the criteria consistently employed by the Court in the determination of the employeeemployer relationship. "E") 6. its notarized certification that Calsado was its bona fide employee is irrefutable. subscribed and sworn to before a notary public declaring that private respondent was then an Account Executive of Sweet Lines. but Sweet Lines confined itself to mere denials. (Exh. Suffice it only to stress that the damages claimed by private respondent as a result of her illegal dismissal and the violation of the terms and conditions of her employment also come within the jurisdiction of the Labor Arbiter as a contrary rule would result in the splitting of actions and the consequent multiplication of suits. in fact. There is no evidence that he acted with malice or bad faith. Inc. Inc. 1985. for that matter. we agree with petitioner Lim that he cannot be held personally liable with Sweet Lines for merely having signed the letter informing Calsado of her separation. 1983 issued by the petitioner company. So we recently affirmed in Limquiaco v. whose signatures appear thereon. . Computation of her salary. Gregorio Francisco.
if an employee who has worked only one year is sustained by the labor court after three years from his unjust dismissal. NLRC. if it finds that its consideration is necessary in arriving at a just decision of the case. done in his capacity as Vice President of Sweet Lines and on its behalf. We especially uphold the award of moral and exemplary damages in view of the acts of harassment and bad faith testified to by the private respondent and not refuted by Sweet Lines. we hold that the contention of Sweet Lines that separation pay and back wages are inconsistent with each other is not well-taken. 1987. invoking equity rather than law.It is true that Lim has raised this matter rather tardily and also that he belongs to a closed corporation controlled by the members of one family only. observes that making Lim solidarily liable with Sweet Lines will ensure payment of Calsado's claim. NLRC is not in point because there the debtor corporation actually ceased operations after the decision of the Court of Industrial Relations was promulgated against it. As we said in Ortigas vs. the pressures exerted upon her even when she was sick in the hospital. the first being usually the length of the employee‘s service and the second the actual period when he was unlawfully prevented from working. the mere fact that Lim is part of the family corporation does not mean that all its acts are imputable to him directly and personally. as a condition for the issuance of our temporary restraining order of October 14. But these circumstances should not be allowed to operate against him if he is to be accorded substantial justice in the resolution of the private respondent's claim. among other aggravations. granting him separation pay only would entitle him to only one month salary. Sweet Lines is still existing and able to satisfy the judgment in favor of the private respondent The Solicitor General. the suggestion of one of the company officers that she discuss her complaints with him alone in a private place. But this precaution. which should cover the amounts awarded to the private respondent. clearly demonstrate the validity of the private respondent's complaints. There is no showing that he acted without or in excess of his authority or was motivated by personal ill-will toward Calsado. Mere ownership by a single stockholder or by another corporation of all or nearly all of the capital stock of a corporation is not of itself sufficient ground for disregarding the separate corporate personality. her arbitrary separation. Finally. His acts were official acts. even if they are not assigned as errors in the appeal. Lufthansa German Airlines. even assuming it to be valid.00. therefore. Petitioner Sunio. Separation pay is granted where reinstatement is no longer advisable because of strained relations between the employee and the employer. the delays in the payment of her commissions. His act. Back wages represent compensation that should have been earned but were not collected because of the unjust dismissal. . It is basic that a corporation is invested by law with a personality separate and distinct from those of the persons composing it as well as from that of any other entity to which it may be related. The case of Ransom v. In fact. The applicable decision is Sunio v. therefore. Sweet Lines posted as required a bond in the amount of P850. Thus. was within the scope of his authority and was a corporate act. making it necessary to enforce it against its former president. should not have been made personally answerable for the payment of private respondents' back salaries. the questionable attempts to get the vehicle from her after her dismissal. There appears to be no evidence on record that he acted maliciously or in bad faith in terminating the services of private respondents.000. We have ordered the payment of both in proper cases as otherwise the employee might be deprived of benefits justly due him. is really unnecessary. The bases for computing the two are different. Her treatment during her employment." As for the second charge. the Court is "clothed with ample authority to review matters. where it was held: Petitioner Sunio was impleaded in the Complaint in his capacity as General Manager of petitioner corporation.
INC. and of backwages and attorney's fees. In 1993. facilities. and P25. VALDEVILLA AND ORO MARKETING. is LIFTED. in accordance with existing policy. Palangan found petitioner to have been illegally dismissed and ordered the payment of separation pay in lieu of reinstatement. paragraph 4 of the Labor Code and is barred by reason of the final judgment in the labor case.00 plus 12% interest as estimated cost of supplies.000. He accused private respondent of splitting causes of action. P709. with costs against the petitioner. . In a decision dated July 7. 1994. [ G. On January 30. etc. No.There is no reason why he should not also be paid three years back wages corresponding to the period when he could not return to his work or could not find employment elsewhere. for three years.00 as attorney's fees. petitioner filed a motion to dismiss the above complaint. He also pointed out that the civil action of private respondent is an act of forum-shopping and was merely resorted to after a failure to obtain a favorable decision with the NLRC.97 plus 12% interest as loss of profit and/or unearned income of three years.700. the Court also pointed out that even if all the procedural requirements for the filing of the petition were met. PETITIONER. space.R. P5. Elevated by petition for certiorari before this Court.000. Labor Arbiter Nicodemus G. DOWNEY C. G.R. which dismissed the same for having been filed out of time. He interposed in the court below that the action for damages. 79975 is DISMISSED. On November 13. The decision was appealed to the NLRC. P119. The temporary restraining order dated October 14. 79907 is GRANTED and petitioner Samuel Casas Lim is hereby absolved of liability in his personal capacity. private respondent filed a complaint for damages before the Regional Trial Court ("RTC") of Misamis Oriental.217. private respondent "indefinitely suspended" petitioner and the latter filed a complaint for illegal dismissal with the National Labor Relations Commission ("NLRC") in Iligan City. d. Petitioner was the sales operations manager of private respondent in its branch in Iligan City. G. No. are assailed in this petition for certiorari under Rule 65 of the Rules of Court for having been issued in grave abuse of discretion. HON. 1987. docketed as Civil Case No. which prayed for the payment of the following: a.00 as initial expenses of litigation. was squarely under the exclusive original jurisdiction of the NLRC under Article 217(a). the case was dismissed on technical grounds. 1996 and October 16. 1995. taking jurisdiction over an action for damages filed by an employer against its dismissed employee. b. 2000 ] BEBIANO M. 128024. 95-554. subject to the modification that the award of back wages shall be limited to only three years. May 09. stating that the latter could very well have included the instant claim for damages in its counterclaim before the Labor Arbiter. c. The orders of respondent judge dated June 20. it would still be dismissed for failure to show grave abuse of discretion on the part of the NLRC. VS. properties. 1996. WHEREFORE. BAÑEZ. No. having arisen from an employer-employee relationship. RESPONDENTS.. 1996. however.R. It is so ordered.
 In declaring itself as having jurisdiction over the subject matter of the instant controversy. paragraph 4 of the Labor Code. Thereafter.Ruling upon the motion to dismiss. defendant. and jurisdiction over the controversy belongs to the regular courts. purporting that said customer purchased the items from plaintiff on installment basis. That accordingly plaintiff’s sales decreased and reduced to a considerable extent the profits which it would have earned. namely. and forum-shopping. Article 217(a). property and manpower. (Singapore Airlines. Paño. enjoining respondents from further proceeding with Civil Case No. 1996. the petition reiterates the grounds raised in the Motion to Dismiss dated January 30.) xxx Petitioner's motion for reconsideration of the above Order was denied for lack of merit on October 16. 1996. quoted herein: Defendant canvassed customers personally or through salesmen of plaintiff which were hired or recruited by him. however. By way of assignment of errors. purportedly for the plaintiff but in reality on his own account or business. 95-554 until further orders from the Court. It seeks to recover damages as redress for defendant's breach of his contractual obligation to plaintiff who was damaged and prejudiced. which summarized the basis for private respondent's action for damages in this manner: Paragraph 5 of the complaint alleged that the defendant violated the plaintiff’s policy re: His business in his branch at Iligan City wherein defendant was the Sales Operations Manager. within thirty (30) calendar days after the submission of the case by the parties for decision without extension. splitting of causes of action. The determining issue. 122 SCRA 671. the Second Division of this Court issued a Temporary Restraining Order ("TRO ") on March 5. The Court believes such cause of action is within the realm of civil law. reads: ART. If said customer decided to buy items from plaintiff on installment basis. a Group Sales Manager of plaintiff but also utilized by him as secretary in his own business for collecting and receiving of installments. which was already in effect at the time of the filing of this case. 1997. is the issue of jurisdiction. Hence. The collection and receipt of payments were made inside the Iligan City branch using plaintiff’s facilities. --. The Court believes that there was a breach of a contractual obligation. and paragraph 7 of the same complaint briefly narrated the modus operandi of defendant. would buy the items on cash basis at ex-factory price. Jurisdiction of Labor Arbiters and the Commission. without the knowledge of said customer and plaintiff. Ltd.employee relations. which is intrinsically a civil dispute. and thereafter required the customer to sign promissory notes and other documents using the name and property of plaintiff. whether agricultural or non-agricultural: . respondent judge issued the herein questioned Order. 217. this petition. even in the absence of stenographic notes. the employer's claim for damages is grounded on the nefarious activities of defendant causing damage and prejudice to plaintiff as alleged in paragraph 7 of the complaint. a privilege not given to customers. The averments in the complaint removed the controversy from the coverage of the Labor Code of the Philippines and brought it within the purview of civil law. the following cases involving all workers. Acting on petitioner's prayer.(a) Except as otherwise provided under this Code the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide. Vs. lack of jurisdiction over the subject matter of the action. respondent court stated: A perusal of the complaint which is for damages does not ask for any relief under the Labor Code of the Philippines. defendant collected the installment payments either personally or through Venus Lozano. res judicata. While seemingly the cause of action arose from employer.
127 SCRA 419: Certainly. 6715. and as amended by R. Eisma. lasted only briefly since on May 1. Whereas this Court in a number of occasions had applied the jurisdictional provisions of Article 217 to claims for damages filed by employees.A. the damages alleged in the complaint below are: first. Even under Republic Act No. In the first place.") No. 6715. Second. to allow respondent court to proceed with the instant action for damages would be to .A. and should be entered as a counterclaim in the illegal dismissal case." Thus. and which put to rest the earlier confusion as to who between Labor Arbiters and regular courts had jurisdiction over claims for damages as between employers and employees. Presently. where the damages separately claimed by the employer were allegedly incurred as a consequence of strike or picketing of the union.A. Presidential Decree ("P. namely. 1367 and restored Article 217 of the Labor Code almost to its original form. To allow otherwise would be "to sanction split jurisdiction. 1691 nullified P. 1980. moral. 1979. private respondent's claim against petitioner for actual damages arose from a prior employer-employee relationship. which took effect on March 21. P. There is no mistaking the fact that in the case before us. and the assumption of jurisdiction of regular courts over the same is a nullity.D. 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. now completely superseded by the Labor Code). jurisprudence was settled that where the plaintiff's cause of action for damages arose out of. 875 (the "Industrial Peace Act". Claims for actual. On May 1.4." This limitation in jurisdiction. and more importantly. and equally so in the interest of greater promptness in the disposition of labor matters. No. a court is spared the often onerous task of determining what essentially is a factual matter. those amounting to lost profits and earnings due to petitioner's abandonment or neglect of his duties as sales manager. the jurisdiction is exclusively with the (now defunct) Court of Industrial Relations. an alleged unfair labor practice committed by the union. or was necessarily intertwined with. No.D. where the basis for the claim arises from or is necessarily connected with the fact of termination. such complaint for damages is deeply rooted from the labor dispute between the parties. jurisdiction over all money claims of workers. which is prejudicial to the orderly administration of justice. Thus. The above provisions are a result of the amendment by Section 9 of Republic Act ("R. private respondent would not have taken issue with petitioner's "doing business of his own" had the latter not been concurrently its employee. however.") No. those equivalent to the value of private respondent's property and supplies which petitioner used in conducting his "business ". however. having been otherwise preoccupied by his unauthorized installment sale scheme.D. the damages that may be incurred by either labor or management as a result of disputes or controversies arising from employer-employee relations. It will be recalled that years prior to R. and should be dismissed by ordinary courts for lack of jurisdiction. 1989. even after the enactment of the Labor Code. exemplary and other forms of damages arising from the employer-employee relations. 6715. was originally lodged with the Labor Arbiters and the NLRC by Article 217 of the Labor Code. and second. the present Labor Code is even more committed to the view that on policy grounds. including claims for damages. 1367 amended said Article 217 to the effect that "Regional Directors shall not indorse and Labor Arbiters shall not entertain claims for moral or other forms of damages. As held by this Court in National Federation of Labor vs. the jurisdiction of Labor Arbiters and the NLRC in Article 217 is comprehensive enough to include claims for all forms of damages "arising from the employer-employee relations".
malicious prosecution. it is obvious that private respondent's remedy is not in the filing of this separate action for damages. clearly bestows upon the Labor Arbiter original and exclusive jurisdiction over claims for damages arising from employer-employee relations ---in other words. however. respondent court's taking jurisdiction over the instant case would bring about precisely the harm that the lawmakers sought to avoid in amending the Labor Code to restore jurisdiction over claims for damages of this nature to the NLRC. 1980. Article 217(a) of the Labor Code. as when the claimant seeks to recover a debt from a former employee or seeks liquidated damages in enforcement of a prior employment contract. xxx (Underscoring supplied) Clearly. as amended. the issue of actual damages has been settled in the labor case. it was by reason of petitioner's installment plan that the sales of the Iligan branch of private respondent (where petitioner was employed) reached its highest record level to the extent that petitioner was awarded the 1989 Field Sales Achievement Award in recognition of his exceptional sales performance. of course. In other words. 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. In Ebon vs. Thus. but also damages governed by the Civil Code. which is now final and executory. The Labor Arbiter. So. found to the contrary ---that no business losses may be attributed to petitioner as in fact. xxx Evidently.open anew the factual issue of whether petitioner's installment sale scheme resulted in business losses and the dissipation of private respondent's property. 113 SCRA 52.  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. Presidential Decree No. and presented evidence in support thereof. de Guzman. this Court discussed: The lawmakers in divesting the Labor Arbiters and the NLRC of jurisdiction to award moral and other forms of damages in labor cases could have assumed that the Labor Arbiters' position-paper procedure of ascertaining the facts in dispute might not be an adequate tool for arriving at a just and accurate assessment of damages. it may help to refer to that period from 1979 to 1980 when jurisdiction over employment-predicated actions for damages vacillated from labor tribunals to regular courts. 1367 and restored to the Labor Arbiter and the NLRC their jurisdiction to award all kinds of damages in cases arising from employer-employee relations. Still on the prospect of re-opening factual issues already resolved by the labor court. on May 1. the jurisdiction of regular courts was upheld where the damages. the Labor Arbiter has jurisdiction to award not only the reliefs provided by labor laws. the dispute is intrinsically civil. splitting the cause of action and possible conflicting findings and conclusions by two tribunals on one and the same claim. where private respondent brought up as a defense the same allegations now embodied in his complaint. 1691 (which substantially reenacted Article 217 in its original form) nullified Presidential Decree No. or breach of contract. claimed for were based on tort. but in . This issue has been duly raised and ruled upon in the illegal dismissal case. as distinguished from backwages and separation pay. the lawmaking authority had second thoughts about depriving the Labor Arbiters and the NLRC of the jurisdiction to award damages in labor cases because that setup would mean duplicity of suits. and back to labor tribunals. and that the trial procedure in the Court of First Instance would be a more effective means of determining such damages. Thus. and that the installment scheme was in fact with the knowledge of the management of the Iligan branch of private respondent. This is.
and the instant action for damages cannot take the place of such lost appeal. No pronouncement as to costs. the Petition is GRANTED. WHEREFORE. we will no longer pass upon petitioner's other assignments of error. . Having lost the right to appeal on grounds of untimeliness. the decision in the labor case stands as a final judgment on the merits. Respondent court clearly having no jurisdiction over private respondent's complaint for damages.properly perfecting an appeal from the Labor Arbiter's decision. 95-554 before Branch 39 of the Regional Trial Court of Misamis Oriental is hereby DISMISSED. and the complaint in Civil Case No.
arose out of or in connection with his employment relationship with petitioner. private respondent Vega's suit against petitioner Corporation would never have arisen. therefore. without that relationship. we note that petitioner's Innovation Program is an employee incentive scheme offered and open only to employees of petitioner Corporation. . more specifically to employees below the rank of manager.Applying the foregoing reading to the present case. there would have been no occasion to consider the petitioner's Innovation Program or the submission by Mr. Without the existing employer-employee relationship between the parties here. The money claim of private respondent Vega in this case. Vega of his proposal concerning beer grande.
Such being the case. fell within the jurisdiction of the Labor Arbiter and the NLRC. The other items demanded are not labor benefits demanded by workers generally taken cognizance of in labor disputes. Justice Abad Santos stated: The pivotal question to Our mind is whether or not the Labor Code has any relevance to the reliefs sought by the plaintiffs. 677. The cause of action was one under the civil laws. Singapore Airlines Limited v. 8 It seems worth noting that Medina v. it fell outside the jurisdiction of the court and consequently should be dismissed. It is obvious from the complaint that the plaintiffs have not alleged any unfair labor practice. Petitioner had sued private respondent for non-payment of accounts which had arisen from private respondent's own purchases of vehicles and parts. Paño. The Court treated the claim for damages as "a simple action for damages for tortious acts" allegedly committed by private respondents. under paragraph 5 of Article 217 of the Labor Code had jurisdiction over" all other cases arising from employer-employee relation. 604. Laron. private respondent raised the question of lack of jurisdiction of the court. holding that the sum of money and damages sued for by the employer arose from the employer-employee relationship and. repair jobs on cars personally owned by him. v. although a controversy is between an employer and an employee. Castro-Bartolome. petitioner seeks protection under the civil laws and claims no benefits under the Labor Code. intrinsically a civil dispute. In reversing the order of dismissal and requiring respondent Judge to take cognizance of the case below. 122 SCRA 671. PLAINTIFF had sued for monies loaned to DEFENDANT. not the Labor Arbiters and the NLRC should have jurisdiction. unlike Medina. In the case below. Castro-Bartolome. In Medina vs. the principle followed by this Court was that. such as payment of wages. Those accounts have no relevance to the Labor Code. 1982. involved a claim for liquidated damages not by a worker but by the employer company. At the pre-trial in the lower court. although the parties were an employer and two employees. 11 SCRA 597. unless. the Labor Arbiters have no jurisdiction if the Labor Code is not involved. expressly excluded by this Code. while private respondent was the sales Manager of petitioner. stating that because petitioner's complaint arose out of the employer-employee relationship. The items claimed are the natural consequences flowing from breach of an obligation. And in Singapore Airlines Limited v. overtime compensation or separation pay. Paño. Hence the civil courts. involved a claim for damages by two (2) employees against the employer company and the General Manager thereof. Justice Melencio-Herrera. speaking through Mme. Theirs is a simple action for damages for tortious acts allegedly committed by the defendants. arising from the use of slanderous language on the occasion when the General Manager fired the two (2) employees (the Plant General Manager and the Plant Comptroller). said: Before the enactment of BP Blg. Mr. the jurisdiction over the dispute belongs to . For if the Labor Code has no relevance. in negating jurisdiction of the Labor Arbiter. Inc. the cost of repair jobs made on his personal cars. this Court. any discussion concerning the statutes amending it and whether or not they have retroactive effect is unnecessary. In Molave Motor Sales. clearly if impliedly suggesting that the claim for damages did not necessarily arise out of or in connection with the employer-employee relationship. Labor Arbiters.The next issue that must logically be confronted is whether the fact that the money claim of private respondent Vega arose out of or in connection with his employment relation" with petitioner Corporation. hence. It results that the orders under review are based on a wrong premise." Even then. 227 on June 1. and cash advances from the corporation. and for the purchase price of vehicles and parts sold to him. also cited in Molave. referred to in the above excerpt. 7 the petitioner was a corporation engaged in the sale and repair of motor vehicles. Respondent Judge did dismiss the case. and it does not breach any provision of the Labor Code or the contract of employment of DEFENDANT. is enough to bring such money claim within the original and exclusive jurisdiction of Labor Arbiters. the following was said: Stated differently. the governing statute is the Civil Code and not the Labor Code. The primary relief sought is for liquidated damages for breach of a contractual obligation. The important principle that runs through these three (3) cases is that where the claim to the principal relief sought 9 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 Petition for certiorari is GRANTED. satisfied the standards and requirements of the Innovation Program 10 and which. not in labor management relations or in wage structures and other terms and conditions of employment. without prejudice to the right of private respondent Vega to file a suit before the proper court. could be translated into some substantial benefit to the Corporation. WEREFORE. but rather in the application of the general civil law.the regular courts of justice and not to the Labor Arbiter and the NLRC. 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. the Court notes that the SMC Innovation Program was essentially an invitation from petitioner Corporation to its employees to submit innovation proposals. though unilateral in origin. questions not to be resolved by referring to labor legislation and having nothing to do with wages or other terms and conditions of employment. resolution of the dispute requires expertise. Clearly. No pronouncement as to costs. could nonetheless ripen into an enforceable contractual (facio ut des) 11 obligation on the part of petitioner Corporation under certain circumstances. In such situations. RAB-VII-0170-83 is hereby DISMISSED. in the judgment of the Corporation's officials. Applying the foregoing to the instant case. therefore. if he so desires. and if so. whether or not an enforceable contract. The decision dated 4 September 1987 of public respondent National Labor Relations Commission is SET ASIDE and the complaint in Case No. . but rather having recourse to our law on contracts. Thus. and that petitioner Corporation undertook to grant cash awards to employees who accept such invitation and whose innovation suggestions. had arisen between petitioner Corporation and private respondent Vega in the circumstances of this case. albeit implied arid innominate. whether or not it had been breached. are preeminently legal questions. Such undertaking.
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